Go big or go home — that's a lesson analysts are taking away from Canadian banks' mixed showing in the United States last quarter.

The bigger the lender has been getting in the U.S., the better it did here.

Toronto-Dominion Bank — the Canadian bank that is biggest in the U.S. — had its best quarter ever here. Its Portland, Maine, subsidiary, TD Bank, benefited from recent deals from Florida to New Jersey.

Bank of Montreal, Canada's No. 2 stateside player by assets, said a revenue-boosting deal for a failed bank helped offset commercial-loan losses at its Chicago subsidiary, Harris NA.

Royal Bank of Canada's Raleigh division, RBC Bank, meanwhile, reported another money-losing quarter as its parent continues retooling the U.S. business by looking to shed assets. It has been losing money on bad commercial loans in the Southeast.

Brad Smith, a managing director and the head of research at Stone-cap Securities Inc. in Toronto, said Toronto-Dominion's numbers indicate that its peers may have to be willing to invest a lot if they want to thrive in the notoriously tough U.S. banking market. Whether they will must be determined, he and other market watchers said. RBC Bank is in restructuring mode. Harris has said it will not do any deals unless they add to the bottom line immediately, limiting its options for the near future.

"Canadian banks that really want to play in the U.S. and be meaningful have to do what TD did," Smith said.

What Toronto-Dominion has done is buy a lot of small and midsize banks in a short period. It has invested about $20 billion in the U.S. in about five years. In May, it agreed to buy South Financial Group Inc. in Greenville, S.C., just weeks after buying three failed banks in Florida. In 2008, it bought Cherry Hill, N.J.-based Commerce Bancorp; it had first entered the U.S. in 2005, buying half of Banknorth in Portland, Maine. It will have 1,300 branches from Maine to Florida once the South Financial deal closes this year.

The dealmaking has paid off in higher loan volumes, deposits and fees: Toronto-Dominion's U.S. personal and commercial bank earnings of $276 million in its fiscal third quarter, ended July 31, were the "highest level since we entered the United States," W. Edmund Clark, the company's president and chief executive, told analysts last week.

Harris Bank reaped rewards from buying and building, too.

Bank of Montreal's purchase in April of the failed Amcore Bank in Rockford, Ill., helped boost revenue and net interest margin of its U.S. personal and commercial bank, the reporting segment that includes Harris and some other U.S. assets.

This offset bigger commercial real estate losses across its Midwestern footprint; Harris said it has 331 branches in its primary markets in Illinois, Indiana and Wisconsin. Bank of Montreal's U.S division's profits fell 15% from the prior quarter, to about $38 million.

Smith said it is unclear whether Bank of Montreal is willing to make a substantial investment to get bigger in the States with serious acquisition. The Amcore deal — which included 58 branches and $3.4 billion in deposits — was relatively small, and conservative for a company that is profitable and has nearly $400 billion in assets, he said.

William Downe, Bank of Montreal's CEO, said last month that it has feelers out for a U.S. acquisition in personal and commercial banking, or wealth management. But nothing may happen for a "long period" because "it has to be accretive immediately."

Royal Bank of Canada's international division — which includes RBC Bank and other assets — reported a net loss of $74 million, up from a $26 million loss in the previous quarter.

"Our sense is that RBC has not given up on its U.S. ambitions," analysts at CreditSights Inc. wrote in a recent report, adding that the company may try to "grow its way out of its problems" through more acquisitions eventually. It also may be trying to "nurse" its U.S. commercial bank through the downturn in order to sell it at a "more favorable time," they wrote.

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