Combination Creates North American Powerhouse and Offers Superior
Value Creation TORONTO and CHERRY HILL, NJ, Oct. 2
/PRNewswire-FirstCall/ -- TD Bank Financial Group (TDBFG) (TSX and
NYSE: TD) and New Jersey-based Commerce Bancorp Inc. (NYSE:CBH)
today announced that they have signed a definitive agreement for
TDBFG to acquire Commerce Bank in a 75% stock and 25% cash
transaction valued at US$8.5 billion. "Acquiring Commerce Bank
offers a singularly unique and compelling opportunity for our
shareholders - one that is both a strategic fit and a superior
value creation opportunity through accelerated organic growth. The
combination of Commerce with TD Banknorth doubles the scale of our
US banking business and accelerates our transformation to a leading
North American financial institution," said Ed Clark, President and
Chief Executive Officer, TD Bank Financial Group. "Commerce brings
an impressive geographic footprint and market share in a contiguous
region and a complementary North American retail banking business
model." The addition of Commerce Bank would give TD Bank Financial
Group more than 2,000 branches in North America and approximately
one-quarter of a trillion dollars in deposits, making it the first
bank with critical mass in both the Canadian and US markets. TD
Bank Financial Group will become the seventh largest bank in North
America as measured by branch locations. "Our joining forces with
TD Bank Financial Group opens the door to tremendous new growth
opportunities," said Dennis DiFlorio, Chairman, Commerce Bank N.A.
"Combining TD's broad array of sophisticated retail and commercial
products with our unparalleled banking convenience is truly
exciting. We are delighted for our customers, employees and
shareholders." Description of the Transaction Under the agreement,
Commerce shareholders will receive 0.4142 shares of a TD common
share and US$10.50 in cash in exchange for each common share of
Commerce Bancorp Inc. The consideration was negotiated on the basis
of US$42.00 per share value for Commerce Bank. The transaction
value based on the October 1, 2007 closing price of TD common
shares is $42.37. The transaction will be taxable for Commerce
shareholders for US federal income tax purposes, including the TD
shares they receive. Following the completion of the transaction,
TDBFG expects to take a one time restructuring charge of
approximately US$490 million pre-tax. On a GAAP basis, the
transaction is expected to be 28 cents dilutive in fiscal 2008 and
22 cents dilutive in 2009 to TD's earnings, and 10 cents dilutive
in 2008 and flat in 2009 on an adjusted basis. The deal is expected
to close in March or April 2008 subject to approvals from Commerce
shareholders and US and Canadian regulatory authorities. Commerce
has determined to take certain actions with respect to its balance
sheet, with the intention of reducing the exposure to changes in
interest rates. The Company intends to sell a portion of its
fixed-rate investment securities portfolio and reinvest in short
term or floating rate AAA-rated securities. Commerce presently
anticipates that it will record an after-tax charge of
approximately US$150 million in the third quarter related to these
actions. In addition, Commerce has agreed to negotiate the sale of
Commerce Banc Insurance Services, Inc. (CBIS) to George E.
Norcross, III, Chairman and Chief Executive Officer of Commerce
Banc Insurance Services, Inc. (CBIS) and a director of the Commerce
Board, subject to the approval of TD Bank Financial Group. Mr.
DiFlorio and Bob Falese, President and Chief Executive Officer,
Commerce Bank will continue to be responsible for running Commerce,
based at its headquarters in Cherry Hill, New Jersey and will
report to Bharat Masrani, President and Chief Executive Officer, TD
Banknorth upon the conclusion of the transaction. Accelerating TD
Banknorth's growth strategy "Commerce gives us scale in the
Mid-Atlantic and will allow us to turbocharge our organic growth
strategy," said Masrani. "We look forward to creating the first
truly integrated, North American financial services powerhouse."
Advisors TD Securities Inc., J.P. Morgan Securities Inc. and Keefe,
Bruyette & Woods, Inc. are serving as financial advisors and
Simpson Thacher & Bartlett LLP is serving as legal advisor to
TD Bank Financial Group. Goldman, Sachs & Co. is serving as
financial advisor and Sullivan & Cromwell LLP is serving as
legal advisor to Commerce Bancorp Inc. Commerce Bank Key Facts
& Figures - As "America's Most Convenient Bank," Commerce Bank
offers personal and commercial banking, insurance, investment
planning and wealth management services. - The Bank's "have it your
way" approach emphasizes Commerce's hallmark products and services
including seven-day branch banking, free personal chequing, online
banking and stock trading at commerceonline.com, and
1-800-YES-2000, a full-service, 24-hour bank- by-phone system. - In
a market of highly critical customers, Commerce Bank ranks highest
in satisfying banking customers in the New York City metropolitan
area, according to the J.D. Power and Associates 2006 Retail
Banking Satisfaction Study. The operations of Commerce Bank
include: - Nearly 460 locations and close to 700 Automated Teller
Machines (ATMs) throughout New Jersey, New York, Connecticut,
Pennsylvania, Delaware, Washington, DC, Virginia, Maryland and
Southeast Florida - 2.4 million customers - US $100 million in
average deposits per branch - US $48 billion in assets as of June
30, 2007 - US $44 billion in deposits as of June 30, 2007 - More
than 15,000 employees Conference Call Information TD Bank Financial
Group will hold an analyst conference call today, October 2, 2007
at 8:30 a.m. ET to discuss the details of the transaction. The call
will feature a presentation by Ed Clark, President and CEO and
Colleen Johnston, Chief Financial Officer of TD Bank Financial
Group and Bharat Masrani, President and CEO of TD Banknorth.
Joining the call from Commerce Bancorp Inc. will be Dennis
DiFlorio, Chairman, Robert Falese, President and CEO, and Doug
Pauls, Chief Financial Officer. The call is expected to last 60
minutes. A question and answer period for pre-qualified analysts
and investors will follow the formal presentations. Both calls will
be webcast live via TD's website at http://www.td.com/investor as
well as the investor relations section of Commerce Bank's website
at http://www.commerceonline.com/. Pre-qualified analysts and
investors may access the call by calling 416-915-5651or toll free
at 1-800-732-0232. Media may also access the call at those numbers,
but in listen-only mode. Recordings of the presentation will be
archived on TD's website (http://www.td.com/) following the webcast
and will be available for replay for a period of at least one
month. The replay of the webcast will also be accessible from the
investor relations section of Commerce's website at
http://www.commerceonline.com/. About TD Bank Financial Group The
Toronto-Dominion Bank and its subsidiaries are collectively known
as TD Bank Financial Group. The Bank serves more than 14 million
customers in four key businesses operating in a number of locations
in key financial centres around the globe: Canadian Personal and
Commercial Banking, including TD Canada Trust as well as the Bank's
global insurance operations (excluding the U.S.); Wealth
Management, including TD Waterhouse Canada, TD Waterhouse U.K. and
the Bank's investment in TD Ameritrade; U.S. Personal and
Commercial Banking through TD Banknorth; and Wholesale Banking,
including TD Securities. The Bank also ranks among the world's
leading on-line financial services firms, with more than 4.5
million on-line customers. The Bank had $404 billion in assets as
at July 31, 2007. The Bank is headquartered in Toronto, Canada. The
Bank's common stock is listed on the Toronto Stock Exchange and the
New York Stock Exchange under symbol: TD, as well as on the Tokyo
Stock Exchange. About Commerce Bancorp Inc. Commerce Bank,
"America's Most Convenient Bank," is a leading retailer of
financial services with almost 460 convenient stores in
Metropolitan New York, Metropolitan Philadelphia, Metropolitan DC
and Southeast Florida. Headquartered in Cherry Hill, New Jersey,
Commerce Bancorp (NYSE:CBH) has approximately $49 billion in
assets. For more information about Commerce, please visit the
company's interactive financial resource center at
http://www.commerceonline.com/. Forward-Looking Statements and
Additional Information The information presented may contain
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and comparable "safe
harbour" of Canadian legislation, including, but not limited to,
statements relating to anticipated financial and operating results,
the companies' plans, objectives, expectations and intentions, cost
savings and other statements, including words such as "anticipate,"
"believe," "plan," "estimate," "expect," "intend," "will,"
"should," "may," and other similar expressions. Such statements are
based upon the current beliefs and expectations of our management
and involve a number of significant risks and uncertainties. Actual
results may differ materially from the results anticipated in these
forward-looking statements. The following factors, among others,
could cause or contribute to such material differences: the ability
to obtain the approval of the transaction by Commerce Bancorp, Inc.
stockholders; the ability to realize the expected synergies
resulting for the transaction in the amounts or in the timeframe
anticipated; the ability to integrate Commerce Bancorp, Inc.'s
businesses into those of TD Bank Financial Group in a timely and
cost-efficient manner; and the ability to obtain governmental
approvals of the transaction or to satisfy other conditions to the
transaction on the proposed terms and timeframe. Additional factors
that could cause TD Bank Financial Group's and Commerce Bancorp,
Inc.'s results to differ materially from those described in the
forward-looking statements can be found in the 2006 Annual Report
on Form 40-F for The Toronto-Dominion Bank and the 2006 Annual
Report on Form 10-K of Commerce Bancorp, Inc. filed with the
Securities and Exchange Commission and available at the Securities
and Exchange Commission's Internet site (http://www.sec.gov/). The
proposed merger transaction involving The Toronto-Dominion Bank and
Commerce Bancorp, Inc. will be submitted to Commerce Bancorp's
shareholders for their consideration Shareholders are encouraged to
read the proxy statement/prospectus regarding the proposed
transaction when it becomes available because it will contain
important information. Shareholders will be able to obtain a free
copy of the proxy statement/prospectus, as well as other filings
containing information about The Toronto-Dominion Bank and Commerce
Bancorp, Inc., without charge, at the SEC's Internet site
(http://www.sec.gov/). Copies of the proxy statement/prospectus and
the filings with the SEC that will be incorporated by reference in
the proxy statement/prospectus can also be obtained, when
available, without charge, by directing a request to TD Bank
Financial Group, 66 Wellington Street West, Toronto, ON M5K 1A2,
Attention: Investor Relations, (416) 308-9030, or to Commerce
Bancorp, Inc., Shareholder Relations, 1701 Route 70 East Cherry
Hill, NJ 08034-5400, 1-888-751-9000. The Toronto-Dominion Bank,
Commerce Bancorp, Inc., their respective directors and executive
officers and other persons may be deemed to be participants in the
solicitation of proxies in respect of the proposed transaction.
Information regarding The Toronto-Dominion Bank's directors and
executive officers is available in its Annual Report on Form 40-F
for the year ended October 31, 2006, which was filed with the
Securities and Exchange Commission on December 11, 2006, and its
notice of annual meeting and proxy circular for its most recent
annual meeting, which was filed with the Securities and Exchange
Commission on February 23, 2007. Information regarding Commerce
Bancorp, Inc.'s directors and executive officers is available in
Commerce Bancorp, Inc.'s proxy statement for its most recent annual
meeting, which was filed with the Securities and Exchange
Commission on April 13, 2007. Other information regarding the
participants in the proxy solicitation and a description of their
direct and indirect interests, by security holdings or otherwise,
will be contained in the proxy statement/prospectus and other
relevant materials to be filed with the SEC when they become
available. DATASOURCE: TD Bank Financial Group CONTACT: Media: Neil
Parmenter, TD Bank Financial Group, (416) 982-4285; Jeff Nathanson,
TD Banknorth, (207) 761-8517; David Flaherty, Commerce Bank, (856)
751-4069; Investors: Tim Thompson, TD Bank Financial Group, (416)
982-6346; Doug Pauls, Commerce Bank, (856) 751-2727
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