BMO Financial Group (TSX, NYSE: BMO) today announced the signing of an agreement for its U.S. subsidiary, Harris Bank, to acquire Chicago-based New Lenox State Bank (NLSB).
Founded in 1927, NLSB is a well-respected community bank with eight full-service branches in key locations in Chicago’s southwestern suburbs. Headquartered in New Lenox, Illinois, NLSB will significantly expand Harris’ distribution network in Will County, one of the fastest growing regions in the United States. NLSB is privately held with assets of $US 998 million and deposits of $US 899 million as of December 31, 2003.
“Very early on, BMO recognized the importance of Chicago as the base for building out in the United States, using the well-known Harris franchise as the cornerstone,” said Tony Comper, Chairman and CEO, BMO Financial Group. “The Greater Chicago area is one of the major economic engines for growth in the U.S. and NLSB represents an important addition to our expanding distribution network in the region. We will continue to pursue acquisitions in high growth markets, while remaining highly selective, strategic, and disciplined in our approach.”
Harris added 10 new branches in 2003 and expects to add at least that many new branches in 2004. It is on track to reach 200 locations throughout the greater Chicago area over the next several years.
NLSB is the 13th acquisition by BMO Financial Group in the U.S. since 1999. The purchase price is $US 228.5 million ($CDN 306 million). Excluding one-time costs, the impact of the transaction on BMO cash earnings per share is nominally accretive in year one.
“NLSB is a fixture in the communities it serves and it has maintained market share and growth in a competitive environment despite facing many new entrants,” said Frank Techar, President and CEO, Harris Bank.” NLSB significantly expands our presence in markets we know well, and solidifies Harris’ number one market share position in rapidly growing Will County.”
Added Everett J. Hauck, President of New Lenox Holding Company, NLSB’s parent firm, “We are proud to be joining such an outstanding organization. Harris has a loyal client base throughout the greater Chicago region and our shared vision is a strong focus on community banking, local knowledge and customer service.”
The acquisition of NLSB, which is subject to regulatory approval, is expected to close in the summer of 2004. It will increase Harris Bank’s network to 163 branches, which includes Harris’ pending acquisition of Lakeland Community Bank, and over 450 ABMs throughout the greater Chicago area.
Established in 1817 as Bank of Montreal, BMO Financial Group serves clients across Canada and in the United States through its Canadian retail arm, BMO Bank of Montreal; Chicago-based Harris Bank, a major U.S. mid-west financial services organization with a national wealth management platform; BMO Nesbitt Burns, one of Canada's leading full-service investment firms; and Harris Nesbitt, its U.S. investment and corporate banking operation.
Investor Conference Call:
Senior BMO executives will comment on the acquisition during a conference call scheduled for 8:30 a.m. EST, Wednesday, February 4, 2004. The call may be accessed by telephone at 416-695-9753 (from within Toronto) or 1-888-789-0089 (toll-free outside Toronto). A replay of the conference call can be accessed until Wednesday, February 18, 2004 by calling 416-695-9862, or toll free at 1-888-330-1960, and entering passcode 8694. A live webcast of the conference call can be accessed at www.bmo.com/investorrelations. A replay of the webcast can be accessed until May 3, 2004.
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