Fitch Ratings has removed from Rating Watch Positive and upgraded Bank of the West's (BOW) Long- and Short-Term Issuer Default Ratings (IDR) to 'AA-' from 'A' and 'F1+' from 'F1', respectively.

These actions follow the closing of BOW's acquisition by Bank of Montreal (BMO; AA-/Negative). Fitch has also upgraded BOW's Shareholder Support Rating (SSR) to 'aa-' from 'a'. The Rating Outlook is Negative, mirroring the Outlook on BMO.

BMO's ratings and Negative Outlook were not impacted by today's action. For more information on Fitch's rating on BMO, please see 'Fitch Affirms Bank of Montreal at 'AA-'; Outlook Negative' dated July 11, 2022 at www.fitchratings.com.

Concurrently with this action, Fitch has withdrawn all outstanding ratings of BOW due to reorganization of the rated entity as the company no longer exists.

Key Rating Drivers

The rating actions follows the completion of the sale of BOW to BMO and subsequent merger into BMO's main U.S. operating entity, Harris Bank N.A. (AA-/Negative). Fitch has equalized BOW's ratings with those of BMO Harris, and ultimately BMO since Fitch views BMO Harris as a core strategic holding of BMO.

In Fitch's opinion, BOW will play an integral and core part of BMO Harris' operations as BOW operates in many of the same product lines and services that BMO Harris does. The operations will also help BMO expand and grow its franchise throughout parts of the Western U.S.

Rating Sensitivities

Factors that could, individually or collectively, lead to negative rating action/downgrade:

Negative rating sensitivities do not apply as the ratings have been withdrawn.

Factors that could, individually or collectively, lead to positive rating action/upgrade:

Positive rating sensitivities do not apply as the ratings have been withdrawn.

OTHER DEBT AND ISSUER RATINGS: KEY RATING DRIVERS

Fitch also upgraded BOW's Long- and Short-Term Deposit Ratings to 'AA' from 'A+', and 'F1+' from 'F1', respectively, essentially mirroring those of BMO. Following the upgrade, these ratings were also withdrawn.

BOW's Long-Term Deposit Ratings for its uninsured deposits were one notch higher than the company's Long-Term IDR, which reflects depositor preference for U.S. banks and the superior recovery prospects for deposits resulting from depositor preference.

BOW's Short-Term Deposit Rating were linked to the Long-Term Deposit Rating per Fitch's rating criteria and maps to a baseline of 'F1+'.

OTHER DEBT AND ISSUER RATINGS: RATING SENSITIVITIES

Rating sensitivities for other debt and issuer ratings do not apply as the rating has been withdrawn.

Best/Worst Case Rating Scenario

International scale credit ratings of Financial Institutions and Covered Bond issuers have a best-case rating upgrade scenario (defined as the 99th percentile of rating transitions, measured in a positive direction) of three notches over a three-year rating horizon; and a worst-case rating downgrade scenario (defined as the 99th percentile of rating transitions, measured in a negative direction) of four notches over three years. The complete span of best- and worst-case scenario credit ratings for all rating categories ranges from 'AAA' to 'D'. Best- and worst-case scenario credit ratings are based on historical performance. For more information about the methodology used to determine sector-specific best- and worst-case scenario credit ratings, visit https://www.fitchratings.com/site/re/10111579

REFERENCES FOR SUBSTANTIALLY MATERIAL SOURCE CITED AS KEY DRIVER OF RATING

The principal sources of information used in the analysis are described in the Applicable Criteria.

ESG Considerations

Unless otherwise disclosed in this section, the highest level of ESG credit relevance is a score of '3'. This means ESG issues are credit-neutral or have only a minimal credit impact on the entity, either due to their nature or the way in which they are being managed by the entity. For more information on Fitch's ESG Relevance Scores, visit www.fitchratings.com/ESG.

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