BMO Financial Group today announced the signing of an agreement for its U.S. subsidiary, Harris Bank, to acquire Chicago-based New Lenox State Bank.

The $306 million deal is the latest move by BMO to expand further in the U.S. Midwestern market.

Under a deal announced Wednesday, BMO’s Chicago-based Harris Bank unit will acquire New Lenox State, a privately held community bank with eight branches in Chicago’s southwestern suburbs and assets of just under US$1 billion.

“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,” Tony Comper, BMO’s chairman and chief executive, said in a news release.

“The Greater Chicago area is one of the major economic engines for growth in the U.S. and New Lenox 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 this year. It is on track to reach 200 locations throughout the greater Chicago area over the next several years.

New Lenox is the 13th acquisition by the BMO Financial Group in the U.S. since 1999. The purchase price was US$228.5 million US, about $306 million Cdn. Excluding one-time costs, the transaction will add nominally to BMO’s cash earnings this year.

The deal is expected to close this summer and will increase Harris Bank’s network to 163 branches, which includes Harris’ pending acquisition of Lakeland Community Bank.