The

Bank of Montreal

says it’s selling 138 of its branches in the United States to First-Citizens Bank & Trust Co. and will open 150 others as it looks to optimize its branch network.

The branches being sold are mainly in North Dakota, South Dakota, Wyoming, Nebraska, Kansas, Missouri, Oklahoma and Idaho, as well as select branches in Minnesota, one branch in Oregon and one branch in Illinois.

BMO plans to open 150 new branches over the next five years with the aim of improving its presence in U.S. markets where it has “opportunity to achieve critical mass” and further boost its business, it said. The plans for the new branches will be “California-centric, but not limited to the state,” it said.

“This reallocation allows us to deepen client relationships and deliver the full power of BMO to our clients,” Aron Levine, BMO’s U.S. president, said in a statement on Thursday. “Our branches play a vital role in that journey; they’re much more than buildings. They’re financial advice centres and community hubs where relationships are built.”

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Under the terms of the agreement, First Citizens Bank will assume approximately $5.7 billion in deposits and purchase approximately $1.1 billion in loans for a net deposit premium of approximately five per cent paid on closing, BMO said.

BMO will record a charge related to goodwill of approximately US$75 million before and after tax in the fourth quarter. Upon closing, the bank expects to record a tax expense of approximately US$85 million.

The transaction is subject to regulatory approvals and other customary closing conditions and is expected to close in mid-2026.

• Email: nkarim@postmedia.com