BMO Financial Group Reports Third Quarter 2019 Results

Financial Results Highlights

Third Quarter 2019 Compared With Third Quarter 2018:

- Reported net income of $1,557 million and adjusted net income1 of
$1,582 million, both up 1%
- Reported EPS2 of $2.34 and adjusted EPS1, 2 of $2.38, both up 1%
- Net revenue3 of $5,779 million, up 5%
- Provision for credit losses (PCL) of $306 million compared with
$186 million in the prior year; includes provision for performing
loans of $63 million
- ROE of 13.2%, compared with 14.7%; adjusted ROE1 of 13.5%, compared
with 15.0%
- Common Equity Tier 1 Ratio of 11.4%
- Dividend of $1.03 unchanged from the prior quarter, up 7% from the
prior year

Year-to-Date 2019 Compared With Year-to-Date 2018:

- Reported net income of $4,564 million, up 22%; adjusted net
income1,4,5 of $4,642 million, up 4%
- Reported EPS2 of $6.88, up 23%; adjusted EPS1,2 of $7.00, up 5%
- Net revenue3 of $17,022 million, up 6%
- Provision for credit losses of $619 million compared with $487
million in the prior year
- ROE of 13.5%, up from 12.3%; adjusted ROE1 of 13.7% compared with
14.6%

(All dollar amounts are stated in Canadian dollars unless
otherwise indicated)

Toronto (ots/PRNewswire) - For the third quarter ended July 31,
2019, BMO Financial Group (TSX: BMO) (NYSE: BMO) recorded net income
of $1,557 million or $2.34 per share on a reported basis, and net
income of $1,582 million or $2.38 per share on an adjusted basis.

"BMO continued to deliver strong operating results this quarter
demonstrating the resilience of our diversified North American
platform, with adjusted earnings per share of $2.38, good revenue
growth of 5% and positive operating leverage. Our Canadian and U.S.
Personal and Commercial banking businesses together delivered 9%
growth in pre-provision pre-tax profit contribution with good balance
momentum. Capital Markets continues to perform well, with record
revenue in Investment and Corporate Banking. While provisions for
credit losses increased this quarter from very low levels, overall
credit quality remains strong," said Darryl White, Chief Executive
Officer, BMO Financial Group.

"We remain committed to our strategic priorities, including our
focus on improving efficiency, which was below 60% on an adjusted
basis this quarter, and growing our diversified U.S. businesses,
which contributed 34% of the bank's year-to-date adjusted earnings.
Our capital position remains strong at 11.4% and we are taking
actions to continue to position our businesses for growth and
sustainable long-term performance," concluded Mr. White.

Return on equity (ROE) was 13.2%, compared with 14.7% in the prior
year, and adjusted ROE was 13.5% compared with 15.0% in the prior
year. Return on tangible common equity (ROTCE) and adjusted ROTCE
were both 15.8% in the current quarter, compared with 18.0% on both a
reported and an adjusted basis in the prior year.

Concurrent with the release of results, BMO announced a fourth
quarter 2019 dividend of $1.03 per common share, unchanged from the
preceding quarter and up $0.07 per share or 7%from the prior year.
The quarterly dividend of $1.03 per common share is equivalent to an
annual dividend of $4.12 per common share.

(1) Results and
measures in
this document
are presented
on a GAAP
basis. They
are also
presented on
an adjusted
basis that
excludes the
impact of
certain
items.
Adjusted
results and
measures are
non-GAAP and
are detailed
for all
reported
periods in
the Non-GAAP
Measures
section,
where such
non-GAAP
measures and
their closest
GAAP
counterparts
are
disclosed.
(2) All Earnings
per Share
(EPS)
measures in
this document
refer to
diluted EPS,
unless
specified
otherwise.
EPS is
calculated
using net
income after
deducting
total
dividends on
preferred
shares and
distributions
on other
equity
instruments.
(3) Net revenue
is reported
on a basis
that nets
insurance
claims,
commissions
and changes
in policy
benefit
liabilities
(CCPB)
against
insurance
revenue.
(4) Reported net
income in the
first quarter
of 2018
included a
$425 million
(US$339
million)
charge due to
the
revaluation
of our U.S.
net deferred
tax asset as
a result of
the enactment
of the U.S.
Tax Cuts and
Jobs Act.
(5) Reported net
income in the
second
quarter of
2018 included
a $192
million
after-tax
($260 million
pre-tax)
restructuring
charge,
primarily
related to
severance, as
a result of
an ongoing
bank-wide
initiative to
simplify how
we work,
drive
increased
efficiency,
and invest in
technology to
move our
business
forward. The
restructuring
charge is
included in
non-interest
expense in
Corporate
Services.
Note: All ratios
and
percentage
changes in
this document
are based on
unrounded
numbers.

Our complete Third Quarter 2019 Report to Shareholders, including
our unaudited interim consolidated financial statements for the
period ended July 31, 2019, is available online at
www.bmo.com/investorrelations and at www.sedar.com.

Third Quarter Operating Segment Overview

Canadian P&C

Reported net income of $648 million increased $7 million or 1% and
adjusted net income of $649 million increased $8 million or 1% from
the prior year. Adjusted net income excludes the amortization of
acquisition-related intangible assets. Results reflect good revenue
growth, largely offset by higher provisions for credit losses and
higher expenses.

During the quarter, we were named Best Commercial Bank in Canada
by World Finance for the fifth consecutive year. The award celebrates
innovation and a commitment to customer excellence, recognizing
best-in-class organizations in a variety of sectors. Earning this
award for five consecutive years is reflective of the work BMO has
done to develop strong customer loyalty and deepen sector strength.

U.S. P&C

Reported net income of $368 million increased $4 million or 1% and
adjusted net income of $379 million increased $3 million or 1% from
the prior year. Adjusted net income excludes the amortization of
acquisition-related intangible assets.

Reported net income was US$277 million compared with US$279
million and adjusted net income was US$285 million compared with
US$288 million in the prior year, with good revenue performance
offset by higher provisions for credit losses and higher expenses.

BMO Harris Bank was recognized by Forbes' Magazine as one of
America's Best Employers for Women in 2019. This ranking results from
an independent survey of 60,000 U.S. employees nationwide, including
40,000 women, in companies with at least 1,000 employees in their
U.S. operations.

BMO Wealth Management

Reported net income was $249 million compared with $291 million
and adjusted net income was $257 million compared with $301 million
in the prior year. Adjusted net income excludes the amortization of
acquisition-related intangible assets. Traditional wealth reported
net income of $225 million increased $23 million or 11% and adjusted
net income of $233 million increased $21 million or 10% driven by
higher revenue, partially offset by select investments in the
business. Insurance net income was $24 million compared with $89
million in the prior year, primarily due to lower reinsurance results
and unfavourable market movements in the current year relative to
favourable movements in the prior year.

BMO Private Banking was named Best Private Bank in Canada by World
Finance for the ninth consecutive year. In addition, Money Observer
named BMO's Sustainable Opportunities Global Equity Fund the Best
Smaller Fund in the Global Growth category for 2019.

BMO Capital Markets

Reported net income of $313 million increased $12 million or 4%
and adjusted net income of $318 million increased $15 million or 5%
from the prior year. Adjusted net income excludes the amortization of
acquisition-related intangible assets and acquisition integration
costs. Net income reflects good revenue performance, net of higher
expenses.

BMO Capital Markets has been a long-standing leader as an advisor
and underwriter in the metals and mining space. In the current
quarter, BMO Capital Markets acted as a financial advisor to Newmont
Goldcorp Corporation in its joint venture with Barrick Gold
Corporation to combine their respective operations in Nevada,
resulting in the world's largest gold producing complex. This was in
addition to acting as a financial advisor to Newmont Mining
Corporation in the prior quarter, in connection with Newmont's
acquisition of Goldcorp Inc., which created the world's leading gold
company.

Corporate Services

Reported and adjusted net loss for the quarter was $21 million
compared with a reported net loss of $60 million and an adjusted net
loss of $55 million in the prior year. Adjusted results exclude
acquisition integration costs in the prior year. Adjusted results
reflect lower expenses and higher revenue excluding teb.

Adjusted results in this Third Quarter Operating Segment Overview
section are non-GAAP amounts or non-GAAP measures. Please see the
Non-GAAP Measures section.

Capital

BMO's Common Equity Tier 1 (CET1) Ratio was 11.4% at July 31,
2019. The CET1 Ratio increased from 11.3% at the end of the second
quarter as retained earnings growth, lower deductions and other net
positive changes more than offset business growth.

Provision for Credit Losses

Total provision for credit losses was $306 million compared with
$186 million in the prior year. The provision for credit losses ratio
was 28 basis points compared with 19 basis points in the prior year.
The provision for credit losses on impaired loans of $243 million
increased $66 million from $177 million in the prior year, primarily
due to higher provisions in our Canadian P&C business. The provision
for credit losses on impaired loans ratio was 22 basis points
compared with 18 basis points in the prior year. There was a $63
million provision for credit losses on performing loans in the
current quarter compared with a $9 million provision for credit
losses on performing loans in the prior year.

Caution

The foregoing sections contain forward-looking statements. Please
see the Caution Regarding Forward-Looking Statements.

Regulatory Filings

Our continuous disclosure materials, including our interim
filings, annual Management's Discussion and Analysis and audited
consolidated financial statements, Annual Information Form and Notice
of Annual Meeting of Shareholders and Proxy Circular, are available
on our website at www.bmo.com/investorrelations, on the Canadian
Securities Administrators' website at www.sedar.com, and on the EDGAR
section of the U.S. Securities and Exchange Commission's website at
www.sec.gov.

Bank of
Montreal uses
a unified
branding
approach that
links all of
the
organization's
member
companies.
Bank of
Montreal,
together with
its
subsidiaries,
is known as
BMO Financial
Group. As
such, in this
document, the
names BMO and
BMO Financial
Group mean
Bank of
Montreal,
together with
its
subsidiaries.

Non-GAAP Measures

Results and measures in this document are presented on a GAAP
basis. Unless otherwise indicated, all amounts are in Canadian
dollars and have been derived from financial statements prepared in
accordance with International Financial Reporting Standards (IFRS).
References to GAAP mean IFRS. They are also presented on an adjusted
basis that excludes the impact of certain items as set out in the
table below. Results and measures that exclude the impact of
Canadian/U.S. dollar exchange rate movements on our U.S. segment are
non-GAAP measures (please see the Foreign Exchange section of our
Third Quarter 2019 Report to Shareholders for a discussion of the
effects of changes in exchange rates on our results). Management
assesses performance on a reported basis and on an adjusted basis and
considers both to be useful in assessing underlying ongoing business
performance. Presenting results on both bases provides readers with a
better understanding of how management assesses results. It also
permits readers to assess the impact of certain specified items on
results for the periods presented, and to better assess results
excluding those items that may not be reflective of ongoing results.
As such, the presentation may facilitate readers' analysis of trends.
Except as otherwise noted, management's discussion of changes in
reported results in this document applies equally to changes in
corresponding adjusted results. Adjusted results and measures are
non-GAAP and as such do not have standardized meaning under GAAP.
They are unlikely to be comparable to similar measures presented by
other companies and should not be viewed in isolation from, or as a
substitute for, GAAP results.

Non-GAAP Measures

(Canadian $ in Q3-2019 Q2-2019 Q3-2018 YTD-2019 YTD-2018
millions, except as
noted)
Reported Results
Revenue 6,666 6,213 5,794 19,396 17,012
Insurance claims, (887) (561) (269) (2,374) (962)
commissions and
changesin policy
benefit liabilities
(CCPB)
Revenue, net of 5,779 5,652 5,525 17,022 16,050
CCPB
Total provision for (306) (176) (186) (619) (487)
credit losses
Non-interest (3,491) (3,595) (3,359) (10,643) (10,284)
expense
Income before 1,982 1,881 1,980 5,760 5,279
income taxes
Provision for (425) (384) (443) (1,196) (1,523)
income taxes
Net income 1,557 1,497 1,537 4,564 3,756
EPS ($) 2.34 2.26 2.31 6.88 5.60
Adjusting Items
(Pre-tax) (1)
Acquisition (3) (2) (8) (11) (16)
integration costs
(2)
Amortization of (29) (30) (28) (90) (85)
acquisition-related
intangible assets
(3)
Restructuring costs - - - - (260)
(4)
Adjusting items (32) (32) (36) (101) (361)
included in
reported pre-tax
income
Adjusting Items
(After tax) (1)
Acquisition (2) (2) (7) (8) (12)
integration costs
(2)
Amortization of (23) (23) (22) (70) (66)
acquisition-related
intangible assets
(3)
Restructuring costs - - - - (192)
(4)
U.S. net deferred - - - - (425)
tax asset
revaluation (5)
Adjusting items (25) (25) (29) (78) (695)
included in
reported net income
after tax
Impact on EPS ($) (0.04) (0.04) (0.05) (0.12) (1.07)
Adjusted Results
Revenue 6,666 6,213 5,794 19,396 17,012
Insurance claims, (887) (561) (269) (2,374) (962)
commissions and
changesin policy
benefit liabilities
(CCPB)
Revenue, net of 5,779 5,652 5,525 17,022 16,050
CCPB
Total provision for (306) (176) (186) (619) (487)
credit losses
Non-interest (3,459) (3,563) (3,323) (10,542) (9,923)
expense
Income before 2,014 1,913 2,016 5,861 5,640
income taxes
Provision for (432) (391) (450) (1,219) (1,189)
income taxes
Net income 1,582 1,522 1,566 4,642 4,451
EPS ($) 2.38 2.30 2.36 7.00 6.67

(1) Adjusting items are
generally included
in Corporate
Services, with the
exception of the
amortization of
acquisition-related
intangible assets
and certain
acquisition
integration costs,
which are charged
to the operating
groups.
(2) Acquisition
integration costs
related to the
acquired BMO
Transportation
Finance business
are charged to
Corporate Services,
since the
acquisition impacts
both Canadian and
U.S. P&C
businesses.
KGS-Alpha
acquisition
integration costs
are reported in BMO
Capital Markets.
Acquisition
integration costs
are recorded in
non-interest
expense.
(3) These expenses were
charged to the
non-interest
expense of the
operating groups.
Before-tax and
after-tax amounts
for each operating
group are provided
on pages 14, 15,
17, 19 and 20 of
our Third Quarter
2019 Report to
Shareholders.
(4) In Q2-2018, we
recorded a
restructuring
charge, primarily
related to
severance, as a
result of an
ongoing bank-wide
initiative to
simplify how we
work, drive
increased
efficiency and
invest in
technology to move
our business
forward.
Restructuring costs
are included in
non-interest
expense in
Corporate Services.
(5) Charge related to
the revaluation of
our U.S. net
deferred tax asset
as a result of the
enactment of the
U.S. Tax Cut and
Jobs Act. For more
information see the
Critical Accounting
Estimates - Income
Taxes and Deferred
Tax Assets section
on page 119 of
BMO's 2018 Annual
Report.
Certain
comparative
figures have
been
reclassified
to conform
with the
current
period's
presentation.
Adjusted
results and
measures in
this table
are non-GAAP
amounts or
non-GAAP
measures.

Caution Regarding Forward-Looking Statements

Bank of Montreal's public communications often include written or
oral forward-looking statements. Statements of this type are included
in this document, and may be included in other filings with Canadian
securities regulators or the U.S. Securities and Exchange Commission,
or in other communications. All such statements are made pursuant to
the "safe harbor" provisions of, and are intended to be
forward-looking statements under, the United States Private
Securities Litigation Reform Act of 1995 and any applicable Canadian
securities legislation. Forward-looking statements in this document
may include, but are not limited to, statements with respect to our
objectives and priorities for fiscal 2019 and beyond, our strategies
or future actions, our targets, expectations for our financial
condition or share price, the regulatory environment in which we
operate and the results of or outlook for our operations or for the
Canadian, U.S. and international economies, and include statements of
our management. Forward-looking statements are typically identified
by words such as "will", "would", "should", "believe", "expect",
"anticipate", "project", "intend", "estimate", "plan", "goal",
"target", "may" and "could".

By their nature, forward-looking statements require us to make
assumptions and are subject to inherent risks and uncertainties, both
general and specific in nature. There is significant risk that
predictions, forecasts, conclusions or projections will not prove to
be accurate, that our assumptions may not be correct, and that actual
results may differ materially from such predictions, forecasts,
conclusions or projections. We caution readers of this document not
to place undue reliance on our forward-looking statements, as a
number of factors - many of which are beyond our control and the
effects of which can be difficult to predict - could cause actual
future results, conditions, actions or events to differ materially
from the targets, expectations, estimates or intentions expressed in
the forward-looking statements.

The future outcomes that relate to forward-looking statements may
be influenced by many factors, including but not limited to: general
economic and market conditions in the countries in which we operate;
the Canadian housing market; weak, volatile or illiquid capital
and/or credit markets; interest rate and currency value fluctuations;
changes in monetary, fiscal, or economic policy and tax legislation
and interpretation; the level of competition in the geographic and
business areas in which we operate; changes in laws or in supervisory
expectations or requirements, including capital, interest rate and
liquidity requirements and guidance, and the effect of such changes
on funding costs; judicial or regulatory proceedings; the accuracy
and completeness of the information we obtain with respect to our
customers and counterparties; failure of third parties to comply with
their obligations to us; our ability to execute our strategic plans
and to complete and integrate acquisitions, including obtaining
regulatory approvals; critical accounting estimates and the effect of
changes to accounting standards, rules and interpretations on these
estimates; operational and infrastructure risks, including with
respect to reliance on third parties; changes to our credit ratings;
political conditions, including changes relating to or affecting
economic or trade matters; global capital markets activities; the
possible effects on our business of war or terrorist activities;
outbreaks of disease or illness that affect local, national or
international economies; natural disasters and disruptions to public
infrastructure, such as transportation, communications, power or
water supply; technological changes; information and cyber security,
including the threat of hacking, identity theft and corporate
espionage, as well as the possibility of denial of service resulting
from efforts targeted at causing system failure and service
disruption; and our ability to anticipate and effectively manage
risks arising from all of the foregoing factors.

We caution that the foregoing list is not exhaustive of all
possible factors. Other factors and risks could adversely affect our
results. For more information, please see the discussion in the Risks
That May Affect Future Results section, and the sections related to
credit and counterparty, market, insurance, liquidity and funding,
operational, model, legal and regulatory, business, strategic,
environmental and social, and reputation risk, in the Enterprise-Wide
Risk Management section which begin on page 78 of BMO's 2018 Annual
Report, and the Risk Management section of our Third Quarter 2019
Report to Shareholders, all of which outline certain key factors and
risks that may affect our future results. Investors and others should
carefully consider these factors and risks, as well as other
uncertainties and potential events, and the inherent uncertainty of
forward-looking statements. We do not undertake to update any
forward-looking statements, whether written or oral, that may be made
from time to time by the organization or on its behalf, except as
required by law. The forward-looking information contained in this
document is presented for the purpose of assisting our shareholders
in understanding our financial position as at and for the periods
ended on the dates presented, as well as our strategic priorities and
objectives, and may not be appropriate for other purposes.

Material economic assumptions underlying the forward-looking
statements contained in this document are set out in the 2018 Annual
Report under the heading "Economic Developments and Outlook", as
updated by the Economic Review and Outlook section set forth in our
Third Quarter 2019 Report to Shareholders. Assumptions about the
performance of the Canadian and U.S. economies, as well as overall
market conditions and their combined effect on our business, are
material factors we consider when determining our strategic
priorities, objectives and expectations for our business. In
determining our expectations for economic growth, both broadly and in
the financial services sector, we primarily consider historical
economic data provided by governments, historical relationships
between economic and financial variables, and the risks to the
domestic and global economy. See the Economic Review and Outlook
section of our Third Quarter 2019 Report to Shareholders.

INVESTOR AND MEDIA PRESENTATION

Investor Presentation Materials

Interested parties are invited to visit our website at
www.bmo.com/investorrelations to review our 2018 annual MD&A and
audited annual consolidated financial statements, quarterly
presentation materials and supplementary financial information
package.

Quarterly Conference Call and Webcast Presentations

Interested parties are also invited to listen to our quarterly
conference call on Tuesday, August 27, 2019, at 7:15 a.m. (ET). The
call may be accessed by telephone at 416-641-2144 (from within
Toronto) or 1-888-789-9572 (toll-free outside Toronto), entering
Passcode: 4374112#. A replay of the conference call can be accessed
until Monday, December 2, 2019, by calling 905-694-9451 (from within
Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering
Passcode: 4234667#.

A live webcast of the call can be accessed on our website at
www.bmo.com/investorrelations. A replay can also be accessed on the
site.

Shareholder Dividend For other shareholder
Reinvestment and Share information, including the
PurchasePlan (the Plan) notice for our normal course
Average market price as issuer bid, please contact
defined under the PlanMay Bank of MontrealShareholder
2019: $103.32June 2019: ServicesCorporate Secretary's
$98.49July 2019: $100.41 DepartmentOne First Canadian
For dividend information, Place, 21st FloorToronto,
change in shareholder Ontario M5X 1A1Telephone:
addressor to advise of (416) 867-6785Fax: (416)
duplicate mailings, 867-6793E-mail:
please contact corp.secretary@bmo.com For
Computershare Trust further information on this
Company of Canada100 document, please contactBank
University Avenue, 8th of MontrealInvestor Relations
FloorToronto, Ontario M5J DepartmentP.O. Box 1, One
2Y1Telephone: First Canadian Place, 10th
1-800-340-5021 (Canada FloorToronto, Ontario M5X 1A1
and the United To review financial results
States)Telephone: (514) and regulatory filings and
982-7800 disclosures online, please
(international)Fax: visit our website at
1-888-453-0330 (Canada www.bmo.com/investorrelations
and the United .
States)Fax: (416)
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(international)E-mail:
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Our 2018 Annual MD&A, audited annual consolidated financial
statements and annual report on Form 40-F (filed with the U.S.
Securities and Exchange Commission) are available online at
www.bmo.com/investorrelations and at www.sedar.com. Printed copies of
the bank's complete 2018 audited financial statements are available
free of charge upon request at 416-867-6785 or
corp.secretary@bmo.com.

Annual
Meeting 2020
The next
Annual
Meeting of
Shareholders
will be held
on Tuesday,
March 31,
2020 in
Toronto,
Ontario.

® Registered trademark of Bank of Montreal

ots Originaltext: BMO Financial Group
Im Internet recherchierbar: http://www.presseportal.de

Contact:
Paul Gammal
Toronto
paul.gammal@bmo.com
416-867-6543

Investor Relations Contacts: Jill Homenuk
Head
Investor Relations
jill.homenuk@bmo.com
416-867-4770

Tom Little
Director
Investor Relations
tom.little@bmo.com
416-867-7834

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