In this recession, the U.S. banks’ losses are Canadian banks’ gains, as a unit of Canadian banking giant Bank of Montrael (BMO) bought the largest U.S. bank failure from last week.
Amcore Bank of Rockford, Ill., with $3.8 billion in total assets and 52 branches, mostly in Illinois, was taken over by the Federal Deposit Insurance Corp. (FDIC) last week and subsequently sold off to Harris Bank, a U.S. subsidiary of BMO.
Amcore is part of seven U.S. bank failures of last week, sending total U.S. bank failures to 57 this year.
BMO is the fourth largest Canadian bank, following Toronto-Dominion (TD), CIBC, and Royal Bank of Canada. It bought Harris in the mid-1980s.
Canadian banks have long sought larger market shares in the United States, and the recent financial crisis has been a blessing in disguise for Canadian banks, which have largely avoided the huge loan write-downs that plagued American banks. Harris is already one of the largest regional banks in the U.S. Midwest, with operations in Wisconsin, Indiana, and Illinois.
"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, CEO of BMO Financial Group.
Two weeks ago, Riverside National Bank of Florida and two other Southern banking institutions were taken over by Canada’s No. 2 bank, TD, greatly boosting its presence in the southern U.S. In recent years, TD has also expanded rapidly in the eastern United States—it has acquired major presence in the U.S. Northeast and Mid-Atlantic regions following its acquisition of Commerce Bancorp.
One hundred and forty banks failed in the United States last year, the highest number of bank failures since 1992.