Five US bank acquisition targets are best aligned with Bank of Montreal's (BMO.TO, BMO) internal acquisition criteria, Raymond James said in a report on Thursday.

Analyst Stephen Boland said these banks included Banc of California (BANC), Banner Corp. (BANR), Byline Bancorp (BY), Old Second Bancorp (OSBC), and Riverview Bancorp (RVSB).

"We believe each of these targets possesses key attributes that could help enhance various aspects of BMO's US division, including an improved funding mix, greater efficiency, and natural synergies arising from their presence in the bank's core focus markets," Boland said in a note to clients.

"Unlike the 2023 Bank of the West transaction, none of these targets would be transformational on their own," the analyst said. "Nonetheless, we view M&A as an important lever for BMO in strengthening its competitive positioning in the US market, as the bank works toward its primary objective of achieving a 12%+ ROE across its US banking operations."

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