What's Happening?
BMO Financial Group, a Canadian banking giant with U.S. operations headquartered in Chicago, has announced the sale of 138 branches across 11 states to First Citizens Bank, based in North Carolina. This move is part of BMO's strategic 'branch optimization'
plan, which aims to focus on markets with significant growth potential. The sale includes branches in states such as North Dakota, South Dakota, Wyoming, Nebraska, Kansas, Missouri, Oklahoma, Idaho, Minnesota, Oregon, and Illinois. First Citizens Bank will assume approximately $5.7 billion in deposits and purchase around $1.1 billion in loans. BMO plans to open 150 new banking locations over the next five years, particularly in California, where it expanded its presence following the acquisition of Bank of the West in 2023.
Why It's Important?
This transaction marks a significant shift in BMO's U.S. strategy, allowing the bank to concentrate resources on high-growth markets. By selling branches in less strategic locations, BMO aims to deepen client relationships and enhance service delivery in areas with greater long-term growth potential. The move also reflects broader trends in the banking industry, where institutions are increasingly optimizing their branch networks to adapt to changing consumer behaviors and digital banking trends. For First Citizens Bank, acquiring these branches represents an opportunity to expand its footprint and customer base across multiple states, potentially increasing its market share and competitive positioning.
What's Next?
The deal is expected to close in mid-2026, pending regulatory approval. As BMO shifts its focus to expanding in California, it will likely invest in enhancing its digital banking capabilities and customer service offerings to attract and retain clients in this competitive market. Meanwhile, First Citizens Bank will work on integrating the newly acquired branches into its existing operations, ensuring a smooth transition for customers and employees. Regulatory scrutiny may arise, given the scale of the transaction, but both banks are likely to engage with regulators to address any concerns and facilitate the approval process.
