BMO Announces Branch Optimization to Accelerate Future Growth

Executive Summary

• BMO entered a definitive agreement to sell 138 U.S. branches to First‑Citizens Bank, transferring roughly $5.7 bn in deposits and $1.1 bn in loans.
• The bank will open approximately 150 new branches over the next five years, primarily in California and other high‑growth U.S. markets.
• Transaction will generate a goodwill charge of about US$75 m (CAD$104 m) and an estimated tax expense of US$85 m (CAD$117 m); impact on CET1 ratio is expected to be immaterial.

Key Details

• Branches Sold: 138 locations across ND, SD, WY, NE, KS, MO, OK, ID, western MN, eastern OR, southern IL.
• Buyer: First‑Citizens Bank & Trust Company.
• Deposits Transferred: ~US$5.7 bn (≈CAD$7.9 bn).
• Loans Purchased: ~US$1.1 bn (≈CAD$1.5 bn).
• Deposit Premium: Approximately 5 % paid at closing.
• Goodwill Charge: US$75 m (CAD$104 m) recorded before and after tax in Q4 2025.
• Tax Expense: Approx. US$85 m (CAD$117 m).
• CET1 Impact: Not expected to be material.
• Closing Timeline: Mid‑2026, subject to regulatory approvals and customary conditions.
• New Branch Plan: ~150 new branches over five years; focus on densifying presence in core U.S. markets, especially California.
• Advisors: BMO Capital Markets & Piper Sandler (financial); Godfrey & Khan (legal) for BMO; Arnold & Porter Kaye Scholer LLP and Smith, Anderson, Blount, Dorsett, Mitchell & Jernigan (legal) for First‑Citizens.
• Customer Impact: No change to existing banking services until closing; transition plans in place.

Notable Quotes

“We're sharpening our focus on markets with the greatest potential for long‑term growth,” said Aron Levine, President, BMO U.S. “This reallocation allows us to deepen client relationships and deliver the full power of BMO to our clients.”