Source: The Canadian Press

BMO Financial Group (TSX:BMO) said Friday it has acquired Rockford, Ill.-based Amcore Bank N.A. in a deal with the U.S. Federal Deposit Insurance Corp.

Financial terms of the deal for the failed U.S. bank were not immediately available, but BMO said the agreement was not material to earnings.

Amcore’s 52 branches were to reopen as under BMO’s Harris Bank banner on Saturday.

“This is a perfect strategic fit that accelerates our growth strategy and reinforces our already strong position in the U.S. Midwest,” said Bill Downe, president and CEO of BMO Financial Group.

“The addition of this franchise — quality locations and a valuable customer base — supports our current market share and expands Harris’ branch network into communities in northern Illinois and southern Wisconsin, including Madison and Rockford, where we already have a strong and growing commercial banking presence.”

Under the deal, BMO will assume approximately US$2.1 billion in deposits and acquire roughly US$2.5 billion in assets, including approximately US$2 billion in loans.

Bank of Montreal’s (TSX:BMO) Harris Bank unit is a key player in the Chicago-area markets and other parts of the U.S. midwestern states.

Amcore was one of seven banks in Illinois shut by U.S. regulators on Friday, putting the number of U.S. bank failures this year at 57.

The Federal Deposit Insurance Corp. took over four banks in Chicago: New Century Bank, with US$485.6 million in assets; Citizens Bank&Trust Company, with US$77.3 million in assets; Broadway Bank, with US$1.2 billion in assets; and Lincoln Park Savings Bank, with US$199.9 million in assets.

The FDIC took over Peotone Bank and Trust Company in Peotone, with US$130.2 million in assets; and Wheatland Bank of Naperville, with US$437.2 million in assets.

MB Financial Bank agreed to acquire the deposits of both Broadway Bank and New Century Bank. Republic Bank of Chicago agreed to assume Citizens’ deposits.

Northbrook Bank and Trust Company of NorthBrook agreed to acquire the deposits of Lincoln Park Savings Bank. First Midwest Bank of Itasca agreed to assume Peotone Bank and Trust’s deposits. Wheaton Bank & Trust will acquire the deposits of Wheatland Bank.

The failure of Broadway Bank is expected to cost the FDIC’s deposit insurance fund US$394.3 million. For the other banks, the estimated costs are: Amcore Bank, US$220.3 million; New Century Bank, US$125.3 million; Citizens Bank&Trust Company, US$20.9 million; Lincoln Park Savings Bank, US$48.4 million; Peotone Bank and Trust Company, US$31.7 million; and Wheatland Bank, US$133 million.

Broadway Bank was owned by the family of Illinois Treasurer Alexi Giannoulias, a Democrat who is running for President Barack Obama’s old Senate seat. The bank was heavy into real estate loans and lost US$75 million last year.

There were 140 bank failures in the U.S. last year, the highest annual tally since 1992 at the height of the savings and loan crisis. They cost the insurance fund more than US$30 billion. Twenty-five banks failed in 2008 and only three succumbed in 2007.

With files from The Associated Press