During a second-quarter earnings call last week, Truist CEO Bill Rogers cited nonbank mergers and acquisitions as an area with big potential growth for the bank — pinpointing the insurance sector. 

“We’re going to allow capacity and be opportunistic there,” he said Tuesday.

If 2021 was a year in which banks went after big acquisition targets — particularly, the U.S. footprints of foreign banks that were recalibrating their strategies — then it follows that 2022 would be a time when smaller deals would abound. 

There are fewer big fish left in the pond. No Bank of the West. Or MUFG Union. Or HSBC branch network. Even midsize regionals like First Horizon came at a considerable price tag.

Market observers may have been lulled into thinking that the acquirers in some of last year’s splashier deals would be too busy working out the details of last year’s big hauls to bother with this year’s small fry, as it were.

But the past week or two has shown that to be untrue.

Bank of Montreal, which in December agreed to buy Bank of the West from BNP Paribas for $16.3 billion, said Wednesday it would acquire Calgary-based carbon-offset developer Radicle Group for an undisclosed sum in a deal it intends to close by the end of the year.

But Radicle doesn’t just generate credits companies can buy and sell to make up for the emissions they can’t eliminate. It also helps companies measure their emissions, target areas where they can improve and gauge their progress.

BMO last year launched an energy transition group to help clients winnow their emissions to net zero. The bank also established an institute that researches financial risks and opportunities tied to climate change, and functions as an incubator for environmental technology.

Building expertise from scratch in the climate silo may not be time-efficient, the bank’s executives asserted. 

Climate, energy transition and net-zero targets come up “in almost every client conversation we have,” Dan Goldman, co-head of BMO Global Markets, told The Globe and Mail.

“It’s not topical,” he said. “It’s front and center in terms of thinking about how the world evolves.”

Radicle, meanwhile, had been exploring a sale. And for BMO, the thinking may have been: Why settle for partnerships with experts in a coveted field on isolated initiatives when they could be brought into the fold?

“This is too big a priority for us,” Levent Kahraman, BMO Global Markets’ other co-head told The Globe and Mail. “The key get here is [intellectual property].”

Under the deal, Radicle’s 130 employees would join the bank’s global markets unit and bring relationships with Radicle’s roughly 4,000 clients.

“By joining BMO, Radicle will be able to … accelerate its emissions reduction efforts, scale its activities across BMO’s client network, develop additional sustainability services, and enter new markets,” Radicle CEO Saj Shapiro said in a press release.

Citizens’ private-wealth push

BMO isn’t the only bank this month to build out a niche of its strategy (through buying) after making a major acquisition in 2021. Citizens Bank, which last year acquired 80 East Coast branches from HSBC — not to mention a separate $3.5 billion purchase of New Jersey-based Investors Bancorp — continued to ramp up its presence in private wealth with a deal to buy certain assets and liabilities of New Hampshire-based Paladin Advisors.

Financial terms of this deal, too, are undisclosed. But Citizens aims to complete the transaction, which would couch Paladin in Citizens’ Clarfeld private-wealth division, by September.

“We’ve made no secret that we’re seeking other wealth platforms,” Citizens CEO Bruce Van Saun told American Banker last fall.

Private wealth isn’t the only area in which Citizens has been expanding in recent months. The lender bought investment banking and asset management firm JMP Group and valuation consulting firm Willamette Management Associates last year.

Citizens said the Paladin deal strengthens its presence in New England, which the Providence, Rhode Island-based bank calls geographically important.  

Additionally, “we gain additional reach and Paladin’s fresh asset allocation investment strategy, which complements our established approach,” Chris Weyrauch, head of Citizens Wealth Management, said in a press release.

Karen Parker Feld, Paladin’s CEO, said her firm “prioritizes careful investment management and comprehensive financial advice … guided by a philosophy of accountability, transparency and consultation.” 

“We will expand upon that mission with Citizens, bringing additional services to clients, a difficult-to-replicate value proposition for any independent advisor,” she said.