Bank of Montreal has received approval from the Federal Reserve and the Office of the Comptroller of the Currency to buy Bank of the West in San Francisco.
As part of the approval, BMO Financial, the U.S. parent of the $164.8 billion-asset BMO Harris Bank agreed to provide the Fed and the Federal Deposit Insurance Corp. with an interim update to its resolution plan to reflect the acquisition.
Because BMO Financial would become subject to heightened prudential standards after the deal closes, Bank of Montreal will provide implementation plans for how it will comply with those standards.
Finally, the Fed said it will use next year’s stress test to recalculate BMO Financial’s stress test buffer to include the impact of the acquisition. BMO just received a new stress test requirement last year.
Regulators also adjusted the stress testing schedules for Citizens Financial Group for its purchase of Investors Bancorp) and for M&T Bank when it bought People’s United Financial.
BMO Financial agreed to buy the $91.8 billion-asset Bank of the West from BNP Paribas in December 2021 for $16.3 billion.
BMO Financial expects to close the deal on Feb. 1. The integration is expected to take place in September.
BMO Financial also said that Nandita Bakhshi, Bank of the West’s CEO, will join its board and serve as a special adviser for the integration.