Bank of Montreal to sell 138 branches to First Citizens

BMO (BMO) announced a strategic initiative to optimize its U.S. branch network. BMO announced it has entered into a definitive agreement to sell 138 BMO branches to First Citizens (FCNCA). The branches are in North Dakota, South Dakota, Wyoming, Nebraska, Kansas, Missouri, Oklahoma, and Idaho, as well as select branches in western Minnesota, one branch in eastern Oregon, and one branch in southern Illinois. In parallel, BMO plans to open 150 new branches over the next five years, with a focus on densifying its presence in U.S. markets. Plans for new branches will be California-centric, but not limited to the state. Under the terms of the agreement, First Citizens Bank will assume approximately $5.7B in deposits and purchase approximately $1.1B in loans for a net deposit premium of approximately 5% paid on closing. As a result, the bank will record a charge related to goodwill of approximately $75M before and after-tax in Q4. On closing, the bank expects to record a tax expense of approximately $85M. The impact to the bank’s CET1 ratio is not expected to be material. These amounts are subject to closing adjustments, including fair values and prevailing foreign exchange rates, and will be reported in the corporate services segment and treated as an adjusting item. The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in mid-2026.