BMO Financial Group Reports Second Quarter 2019 Results

Financial Results Highlights

Second Quarter 2019 Compared With Second Quarter 2018:

- Net income of $1,497 million, up 20%; adjusted net income1 of
$1,522 million, up 4%
- EPS2 of $2.26, up 22%; adjusted EPS1, 2 of $2.30, up 5%
- Net revenue3 of $5,652 million, up 8%
- ROE of 13.6%, up from 12.6%; adjusted ROE1 of 13.9% compared with
14.9%
- Provision for credit losses (PCL) of $176 million compared with
$160 million in the prior year
- Common Equity Tier 1 Ratio of 11.3%
- Dividend increased $0.03 from the prior quarter to $1.03, up 7%
from the prior year

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

- Net income of $3,007 million, up 35%; adjusted net income1,4,5 of
$3,060 million, up 6%
- EPS2 of $4.54, up 38%; adjusted EPS1,2 of $4.62, up 7%
- Net revenue3 of $11,243 million, up 7%
- ROE of 13.6%, up from 11.0%; adjusted ROE1 of 13.9% compared with
14.4%
- Provision for credit losses of $313 million compared with $301
million in the prior year

Toronto (ots/PRNewswire) - For the second quarter ended April 30,
2019, BMO Financial Group (TSX: BMO) (NYSE: BMO) recorded net income
of $1,497 million or $2.26 per share on a reported basis, and net
income of $1,522 million or $2.30 per share on an adjusted basis.

"BMO's continued strong performance this quarter is highlighted by
good momentum across our U.S. platform and in our North American
Commercial Banking business, reflecting our differentiated approach
to growing customer relationships. For the first half of the year,
adjusted earnings per share are up 7% and our U.S. segment
contributed 35% to BMO's adjusted earnings," said Darryl White, Chief
Executive Officer, BMO Financial Group.

"This growth is supported by our strong capital position, a stable
credit environment, and the continued resiliency of the Canadian and
U.S. economies. We are taking disciplined actions to grow each of our
businesses, including optimizing our teams and developing innovative
solutions that enhance customer experience. These actions are
deepening loyalty and trust and position the bank for long-term
growth," concluded Mr. White.

Return on equity (ROE) was 13.6%, up from 12.6% in the prior year,
and adjusted ROE was 13.9% compared with 14.9%. Return on tangible
common equity (ROTCE) was 16.4%, up from 15.6% in the prior year and
adjusted ROTCE was 16.4% compared with 18.0% in the prior year.

Concurrent with the release of results, BMO announced a third
quarter 2019 dividend of $1.03 per common share, up $0.03 or 3% 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
preferred
share
dividends.
(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.
Restructuring
cost 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 Second Quarter 2019 Report to Shareholders, including
our unaudited interim consolidated financial statements for the
period ended April 30, 2019, is available online at
www.bmo.com/investorrelations and at www.sedar.com.

Second Quarter Operating Segment Overview

Canadian P&C

Reported net income of $615 million increased $27 million or 5%
and adjusted net income of $615 million increased $26 million or 5%
from the prior year. Adjusted net income excludes the amortization of
acquisition-related intangible assets. Results reflect good revenue
growth, partially offset by higher expenses and higher provisions for
credit losses.

During the quarter, we won two Celent 2019 Model Bank Awards. The
Celent Model Bank Award for Payment Services Hub Implementation
recognizes delivery of our new BMO Payment Hub, a technology platform
that integrates multiple payment services in one central location,
which will enable us to deliver new products more quickly and
cost-effectively. The Celent Model Bank Award for Innovation
Enablement recognizes our BMO InnoV8 program, which tests and
develops ideas to transform a customer's financial journey and is the
foundation for multiple award-winning digital banking solutions and
patent applications. These awards are a testament to our commitment
to creating and investing in services to better support our
customers.

U.S. P&C

Reported net income of $406 million increased $58 million or 17%
and adjusted net income of $417 million increased $58 million or 16%
from the prior year. Adjusted net income excludes the amortization of
acquisition-related intangible assets.

Reported net income of US$306 million increased US$35 million or
13% and adjusted net income of US$314 million increased US$35 million
or 12% from the prior year, largely due to good revenue growth and
lower provisions for credit losses, partially offset by higher
expenses.

For the third consecutive year, BMO Harris Bank was recognized as
a Best Place to Work for LGBTQ Equality on the 2019 Corporate
Equality Index (CEI), a U.S. national benchmarking survey and report
on corporate policies and practices related to LGBTQ workplace
equality, administered by the Human Rights Campaign Foundation. The
2019 CEI evaluates LGBTQ-related policies and practices including
non-discrimination workplace protections, domestic partner benefits,
transgender-inclusive healthcare benefits, competency programs and
engagement with the LGTBQ community.

BMO Wealth Management

Reported net income of $305 million increased $9 million or 3% and
adjusted net income of $315 million increased $8 million or 3% from
the prior year. Adjusted net income excludes the amortization of
acquisition-related intangible assets. Traditional wealth reported
net income of $226 million and adjusted net income of $236 million
was relatively unchanged compared with the prior year as the impact
of strong net interest income growth and improved equity markets were
largely offset by targeted growth investments and lower performance
fees in asset management. Insurance net income was $79 million, an
increase of $10 million or 14%, primarily due to favourable market
movements.

In the 2019 Brokerage Report Card, issued by Investment Executive,
over 90% of BMO Nesbitt Burns advisors said they would recommend
their firm.

BMO Capital Markets

Reported net income was $249 million and adjusted net income was
$253 million compared with $286 million on both a reported and an
adjusted basis in the prior year. Adjusted net income excludes the
amortization of acquisition-related intangible assets and acquisition
integration costs. Strong performance in Investment and Corporate
Banking and higher Trading Products revenue were largely offset by a
severance expense and higher provisions for credit losses.

BMO Capital Markets received the Lead Manager Sustainability Bond
Award from Environmental Finance for our role in the supranational,
sub-sovereign and agency (SSA) space and our industry-defining
sustainable bonds. We were also named World's Best Metals and Mining
Investment Bank for the tenth consecutive year by Global Finance.

Corporate Services

Reported and adjusted net loss for the quarter was $78 million
compared with a reported net loss of $272 million and an adjusted net
loss of $78 million in the prior year. Adjusted results in the prior
year exclude a $192 million after-tax restructuring charge and
acquisition integration costs. Adjusted results were unchanged, with
lower expenses, offset by lower recoveries of credit losses.

Adjusted results in this 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 11.3% at April 30,
2019. The CET1 Ratio decreased from 11.4% at the end of the first
quarter as retained earnings growth was more than offset by strong
business growth and a small impact from other changes in CET1
Capital.

Provision for Credit Losses

Total provision for credit losses was $176 million, an increase of
$16 million from the prior year. The provision for credit losses on
impaired loans of $150 million decreased $22 million from $172
million in the prior year, primarily due to lower provisions in our
U.S. P&C business, largely resulting from a recovery on a commercial
loan. There was a provision for credit losses on performing loans of
$26 million in the current quarter compared with a recovery of credit
losses of $12 million 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 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 Q2-2019 Q1-2019 Q2-2018 YTD-2019 YTD-2018
millions,except as
noted)
Reported Results
Revenue 6,213 6,517 5,580 12,730 11,218
Insurance claims, (561) (926) (332) (1,487) (693)
commissions and
changes in policy
benefit liabilities
(CCPB)
Revenue, net of 5,652 5,591 5,248 11,243 10,525
CCPB
Total provision for (176) (137) (160) (313) (301)
credit losses
Non-interest (3,595) (3,557) (3,525) (7,152) (6,925)
expense
Income before 1,881 1,897 1,563 3,778 3,299
income taxes
Provision for (384) (387) (317) (771) (1,080)
income taxes
Net income 1,497 1,510 1,246 3,007 2,219
EPS ($) 2.26 2.28 1.86 4.54 3.29
Adjusting Items
(Pre-tax) (1)
Acquisition (2) (6) (4) (8) (8)
integration costs
(2)
Amortization of (30) (31) (29) (61) (57)
acquisition-related
intangible assets
(3)
Restructuring costs - - (260) - (260)
(4)
Adjusting items (32) (37) (293) (69) (325)
included in
reported pre-tax
income
Adjusting Items
(After tax) (1)
Acquisition (2) (4) (2) (6) (5)
integration costs
(2)
Amortization of (23) (24) (23) (47) (44)
acquisition-related
intangible assets
(3)
Restructuring costs - - (192) - (192)
(4)
U.S. net deferred - - - - (425)
tax asset
revaluation (5)
Adjusting items (25) (28) (217) (53) (666)
included in
reported net income
after tax
Impact on EPS ($) (0.04) (0.04) (0.34) (0.08) (1.03)
Adjusted Results
Revenue 6,213 6,517 5,580 12,730 11,218
Insurance claims, (561) (926) (332) (1,487) (693)
commissions and
changes in policy
benefit liabilities
(CCPB)
Revenue, net of 5,652 5,591 5,248 11,243 10,525
CCPB
Total provision for (176) (137) (160) (313) (301)
credit losses
Non-interest (3,563) (3,520) (3,232) (7,083) (6,600)
expense
Income before 1,913 1,934 1,856 3,847 3,624
income taxes
Provision for (391) (396) (393) (787) (739)
income taxes
Net income 1,522 1,538 1,463 3,060 2,885
EPS ($) 2.30 2.32 2.20 4.62 4.32

(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 13, 14,
16, 18 and 20 of
our Second 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 in this document, 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 this
document. 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. Please see the Economic Review
and Outlook section of our Second 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 Wednesday, May 29, 2019, at 8:00 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: 3792150#. A replay of the conference call can be accessed
until Monday, August 26, 2019, by calling 905-694-9451 (from within
Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering
Passcode: 9055681#.

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
Purchase Plan (the Plan) notice for our normal course
Average market price as issuer bid, please contact
defined under the Bank of MontrealShareholder
PlanFebruary 2019: ServicesCorporate Secretary's
$98.92March 2019: DepartmentOne First Canadian
$100.76April 2019: Place, 21st FloorToronto,
$105.72For dividend Ontario M5X 1A1Telephone:
information, change in (416) 867-6785Fax: (416)
shareholder address or to 867-6793E-mail:
advise of duplicate corp.secretary@bmo.comFor
mailings, please contact further information on this
Computershare Trust document, please contactBank
Company of Canada100 of MontrealInvestor Relations
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FloorToronto, Ontario M5J First Canadian Place, 10th
2Y1Telephone: FloorToronto, Ontario M5X 1A1
1-800-340-5021 (Canada To review financial results
and the United and regulatory filings and
States)Telephone: (514) disclosures online, please
982-7800 visit our website at
(international)Fax: www.bmo.com/investorrelations
1-888-453-0330 (Canada .
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.

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