BMO Unveils Strategic Branch Optimization Plans for Impactful Future Growth

BMO Financial Group has announced a pivotal move aimed at optimizing its branch network in the United States. This strategic initiative is designed to enhance future growth while ensuring that the bank's resources are effectively matched to markets demonstrating robust client engagement and growth potential. The announcement comes as BMO seeks to bolster its footprint in key U.S. markets.

On October 16, 2025, BMO confirmed that it had entered into a definitive agreement with First-Citizens Bank & Trust Company to sell 138 branches located across several states, including North Dakota, South Dakota, Wyoming, Nebraska, Kansas, Missouri, Oklahoma, and Idaho. Additionally, the agreement includes select branches in western Minnesota, one in eastern Oregon, and another in southern Illinois. This decision represents a significant shift in BMO's approach to its U.S. operations and reflects a calculated effort to focus on areas with higher potential for expansion.

In conjunction with this divestiture, BMO plans to open 150 new branches over the next five years as part of a broader strategy to concentrate on markets where the bank can enhance its presence and serve a growing customer base. While the new branches will primarily focus on California, the bank's expansion plans are not limited to this state alone. The intention is to densify its presence in regions that allow BMO to leverage established offerings across Personal and Business Banking, Commercial Banking, and Wealth Management.

Aron Levine, President of BMO U.S., expressed the core philosophy driving this initiative, emphasizing the importance of creating deeper connections with clients. "We're sharpening our focus on markets with the greatest potential for long-term growth," Levine noted. He added that the branches are more than just physical locations; they serve as financial advisory centers and community hubs, facilitating client relationships and supporting in achieving their financial goals.

The financial implications of the transaction are notable as BMO will transfer approximately $5.7 billion in deposits and roughly $1.1 billion in loans to First Citizens Bank, which will result in a net deposit premium of approximately 5% at closing. The bank has anticipated recording a goodwill charge of about $75 million and a tax expense of around $85 million related to this transaction, though it expects minimal effect on its Common Equity Tier 1 (CET1) ratio.

The sale is subject to regulatory approvals and customary closing conditions, with expectations that the transaction will close in mid-2026. Until the process is finalized, BMO customers are advised to continue with their banking activities as usual using existing banking tools and services. BMO is also working closely with First Citizens Bank to ensure a seamless transition for customers affected by the branch changes.

BMO aims to fortify its position as a leading North American bank by focusing on long-term profitability and returns while reinforcing its commitment to customer service and community involvement. The bank's ongoing strategy underscores its determination to provide integrated and personalized service at scale, fostering loyalty and trust among clients by ensuring that their banking needs are met effectively.

As BMO embarks on this new chapter, its dedication to innovation and growth in the U.S. market is clear, reflecting a strategic foresight that could reshape the bank's operations and offerings to better serve its clients in the coming years. With a rich history of 200 years in banking, BMO is steadfast in its mission to make meaningful progress in the financial landscape, aiming to drive positive change locally and across the regions it serves.