BMO (TSX: BMO) absorbs goodwill hit and plots new buyback
Rhea-AI Filing Summary
Bank of Montreal (BMO) reported third quarter 2026 net income of $1,750 million, down 25% from $2,330 million, and diluted EPS of $2.38, down 24% from $3.14. Reported ROE was 8.4% versus 11.6%, mainly reflecting a $962 million after-tax goodwill-related charge tied to the announced sale of the Transportation Finance and Vendor Finance businesses.
On an adjusted basis, net income rose 19% to $2,859 million, with adjusted EPS up 22% to $3.96 and adjusted ROE of 14.0% versus 12.0%. Provision for credit losses was $722 million, down from $797 million, and the CET1 ratio was 13.0%. BMO declared a fourth quarter 2026 dividend of $1.71 per common share (annualized $6.84), up $0.08 or 5% year-over-year, repurchased 3.8 million common shares at an average of $239.37 under its NCIB, and announced its intention to establish a new NCIB for up to 25 million common shares, subject to regulatory and exchange approvals.
Positive
- Adjusted earnings growth: adjusted net income increased 19% to $2,859 million and adjusted diluted EPS rose 22% to $3.96 versus the prior-year quarter.
- Credit costs improved: provision for credit losses fell to $722 million from $797 million, with lower provisions in Canadian P&C and U.S. Banking and a smaller performing loan provision.
- Capital strength: BMO reported a Common Equity Tier 1 (CET1) Ratio of 13.0% as at July 31, 2026, providing a solid regulatory capital buffer.
- Capital return: quarterly common share dividend set at $1.71, up 5% year-over-year, and 3.8 million shares were repurchased at an average of $239.37, with plans for a new NCIB of up to 25 million shares.
- Segment performance: every business segment delivered record pre-provision pre-tax earnings, with strong contributions from Capital Markets, Wealth Management, and commercial loan growth in Canada and the U.S.
Negative
- Reported earnings decline: reported net income dropped 25% to $1,750 million and reported diluted EPS decreased 24% to $2.38 versus the prior-year quarter.
- Goodwill-related charge: Corporate Services recorded a reported net loss of $1,151 million, including a divestiture-related charge of $962 million after-tax ($1,092 million pre-tax) mainly tied to reduced goodwill.
- Lower reported ROE: reported return on equity fell to 8.4% from 11.6% in the prior-year quarter, reflecting the impact of the divestiture-related charge.
- Capital ratio lower than prior year: the CET1 Ratio of 13.0% compared with 13.5% in the prior year, as internal capital generation was offset by share repurchases and higher risk-weighted assets.
Filing Explained
As a Form 6-K, this filing furnishes Bank of Montreal’s home-market third-quarter earnings information, including unaudited interim statements for the period ended
Key Figures
Reported net income, Q3 2026: $1,750 million
Adjusted net income, Q3 2026: $2,859 million
Reported diluted EPS, Q3 2026: $2.38
+5 more
8 metrics
Reported net income, Q3 2026
$1,750 million
Quarter ended July 31, 2026; down 25% from $2,330 million in Q3 2025
Adjusted net income, Q3 2026
$2,859 million
Quarter ended July 31, 2026; up 19% from $2,399 million in Q3 2025
Reported diluted EPS, Q3 2026
$2.38
Quarter ended July 31, 2026; down 24% from $3.14 in Q3 2025
Adjusted diluted EPS, Q3 2026
$3.96
Quarter ended July 31, 2026; up 22% from $3.23 in Q3 2025
Provision for credit losses, Q3 2026
$722 million
Quarter ended July 31, 2026; down from $797 million in Q3 2025
Common Equity Tier 1 (CET1) Ratio
13.0%
As at July 31, 2026; compared with 13.5% in prior year
Quarterly common share dividend, Q4 2026
$1.71 per share
Equivalent to $6.84 annual; up $0.08 or 5% year-over-year
Shares repurchased under NCIB, Q3 2026
3.8 million shares
Purchased for cancellation at an average price of $239.37 per share
Key Terms
Common Equity Tier 1 (CET1) Ratio, provision for credit losses, normal course issuer bid, return on equity, +2 more
6 terms
Common Equity Tier 1 (CET1) Ratio financial
"Common Equity Tier 1 (CET1) Ratio3 of 13.0%, compared with 13.5%"
The common equity tier 1 (CET1) ratio is a measure of a bank’s financial strength, showing how much high-quality capital it has compared to its risk-weighted assets. Think of it as a safety buffer or cushion that helps ensure the bank can withstand financial stress. A higher CET1 ratio indicates a stronger position, which is important for investors because it signals greater stability and resilience.
provision for credit losses financial
"Provision for credit losses (PCL) of $722 million, a decrease from $797 million"
Provision for credit losses is an amount set aside by a financial institution to cover potential future losses from borrowers who may not repay their loans. It acts like a safety net, helping the institution manage risks and stay financially healthy. For investors, it signals how cautious a lender is about potential loan defaults and can impact the company's profitability and financial stability.
normal course issuer bid financial
"purchased for cancellation 3.8 million common shares under the normal course issuer bid (NCIB)"
A Normal Course Issuer Bid is when a company buys back its own shares from the stock market over time. This usually shows that the company believes its stock is undervalued and wants to support its price, which can be important for investors to watch.
return on equity financial
"Reported return on equity (ROE) of 8.4%, compared with 11.6%; adjusted ROE1"
Return on equity shows how effectively a company uses its shareholders' money to generate profit. It is calculated by dividing the company's net profit by its shareholders' equity, indicating how much profit is earned for each dollar invested by owners. Higher return on equity suggests the company is good at turning investments into earnings, which can be an important factor for investors assessing its profitability and efficiency.
goodwill financial
"resulting in a charge of $1,092 million pre-tax, primarily related to goodwill"
Goodwill is the extra value a buyer pays for a company above the measurable worth of its buildings, inventory and other tangible items, reflecting things like brand reputation, customer loyalty and expected future profits. Think of paying more for a café because of its famous name and regulars rather than its furniture alone. It matters to investors because changes in goodwill — for example a write-down if expected benefits don’t materialize — can reduce reported earnings and signal that past acquisitions aren’t delivering as hoped.
tangible common equity financial
"Tangible common equity and return on tangible common equity Tangible common equity is calculated as"
Tangible common equity is the portion of a company’s net worth that belongs to ordinary shareholders after removing intangible items (like goodwill or patents) and any preferred claims; it’s often expressed on a per-share basis. Think of it as the hard, sellable value left for common owners if you removed non-physical assets and paid off debts—investors use it to judge how much real cushion a company has and whether the stock might be under- or over-valued.
Earnings Snapshot
Reported net income: $1,750 million
quarter ended July 31, 2026
Reported net income
$1,750 million
decrease of 25% from $2,330 million in Q3 2025
Adjusted net income
$2,859 million
increase of 19% from $2,399 million in Q3 2025
Reported diluted EPS
$2.38
decrease of 24% from $3.14 in Q3 2025
Adjusted diluted EPS
$3.96
increase of 22% from $3.23 in Q3 2025
Provision for credit losses
$722 million
down from $797 million in Q3 2025
Reported ROE
8.4%
down from 11.6% in Q3 2025
Adjusted ROE
14.0%
up from 12.0% in Q3 2025
FAQ
How did BMO (BMO) perform financially in the third quarter of 2026?
BMO reported net income of $1,750 million, down 25% from $2,330 million, and diluted EPS of $2.38, down 24% from $3.14. On an adjusted basis, net income was $2,859 million, up 19%, and adjusted EPS was $3.96, up 22% from $3.23.
What affected BMO’s reported earnings in Q3 2026?
Reported results were affected by a $962 million after-tax charge related to reducing goodwill associated with the announced sale of BMO’s Transportation Finance and Vendor Finance businesses, recorded in Corporate Services and contributing to a reported net loss of $1,151 million in that segment.
What was BMO (BMO)’s provision for credit losses in Q3 2026?
Total provision for credit losses was $722 million, down from $797 million a year earlier. PCL on impaired loans decreased by $65 million to $708 million, and PCL on performing loans was $14 million, compared with $24 million in the prior year.
What is BMO’s capital position, including the CET1 ratio?
As at July 31, 2026, BMO reported a Common Equity Tier 1 (CET1) Ratio of 13.0%, unchanged from the end of the second quarter of 2026 and compared with 13.5% in the prior year, reflecting internal capital generation offset by share repurchases and higher risk-weighted assets.
What dividend did BMO (BMO) declare for the fourth quarter of 2026?
BMO announced a fourth quarter 2026 dividend of $1.71 per common share, unchanged from the prior quarter and up $0.08 or 5% from the prior year. This quarterly dividend is equivalent to an annual dividend of $6.84 per common share.
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Washington, D.C. 20549
FORM 6-K
Report of Foreign Private Issuer
Pursuant to Rule 13a-16 or 15d-16
of the Securities Exchange Act of 1934
of the Securities Exchange Act of 1934
For the month of: August, 2026 Commission File Number: 001-13354
BANK OF MONTREAL (Name of Registrant) | |||||
100 King Street West 1 First Canadian Place Toronto, Ontario Canada, M5X 1A1 (Executive Offices) | 129 rue Saint-Jacques Montreal, Quebec Canada, H2Y 1L6 (Head Office) | ||||
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:
Form 20-F ________ Form 40-F __X____
INCORPORATION BY REFERENCE
The information contained in this Form 6-K and any exhibits hereto shall be deemed filed with the Securities and Exchange Commission (“SEC”) solely for purposes of incorporation by reference into and as part of the following registration statements of the registrant on file with and declared effective by the SEC:
1.Registration Statement – Form F-3 – File No. 333-214934
2.Registration Statement – Form F-3 – File No. 333-285508
3.Registration Statement – Form S-8 – File No. 333-191591
4.Registration Statement – Form S-8 – File No. 333-180968
5.Registration Statement – Form S-8 – File No. 333-177579
6.Registration Statement – Form S-8 – File No. 333-177568
7.Registration Statement – Form S-8 – File No. 333-176479
8.Registration Statement – Form S-8 – File No. 333-175413
9.Registration Statement – Form S-8 – File No. 333-175412
10.Registration Statement – Form S-8 – File No. 333-113096
11.Registration Statement – Form S-8 – File No. 333-14260
12.Registration Statement – Form S-8 – File No. 33-92112
13.Registration Statement – Form S-8 – File No. 333-207739
14.Registration Statement – Form S-8 – File No. 333-237522
15.Registration Statement – Form S-8 – File No. 333-276007
EXHIBIT INDEX
Exhibit Description of Exhibit
99.1 Press Release – Third Quarter 2026 Earnings Release
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BANK OF MONTREAL By: /s/ Rahul Nalgirkar | |||||
Name: Rahul Nalgirkar Title: Chief Financial Officer By: /s/ Pascale Elharrar | |||||
Name: Pascale Elharrar Title: Corporate Secretary | |||||
Date: August 25, 2026
BMO Financial Group Reports Third Quarter 2026 Results
EARNINGS RELEASE
BMO’s Third Quarter 2026 Report to Shareholders, including the unaudited interim consolidated financial statements for the period ended July 31, 2026, are available online at www.bmo.com/investorrelations, on the Canadian Securities Administrators’ website at www.sedarplus.ca, and on the EDGAR section of the U.S. Securities and Exchange Commission’s website at www.sec.gov.
Financial Results Highlights
Third Quarter 2026 compared with Third Quarter 2025:
•Reported net income1 of $1,750 million, a decrease of 25% from $2,330 million; adjusted net income1 of $2,859 million, an increase of 19% from $2,399 million
•Reported earnings per share (EPS)2 of $2.38, a decrease of 24% from $3.14; adjusted EPS1, 2 of $3.96, an increase of 22% from $3.23
•Provision for credit losses (PCL) of $722 million, a decrease from $797 million
•Reported return on equity (ROE) of 8.4%, compared with 11.6%; adjusted ROE1 of 14.0%, compared with 12.0%
•Common Equity Tier 1 (CET1) Ratio3 of 13.0%, compared with 13.5%
Year-to-Date 2026 compared with Year-to-Date 2025:
•Reported net income1 of $6,869 million, an increase of 7% from $6,430 million; adjusted net income1 of $8,143 million, an increase of 21% from $6,734 million
•Reported EPS2 of $9.30, an increase of 10% from $8.47; adjusted EPS1, 2 of $11.11, an increase of 25% from $8.89
•PCL of $2,207 million, a decrease from $2,862 million
•Reported ROE of 11.1%, compared with 10.5%; adjusted ROE1 of 13.3%, compared with 11.1%
Toronto, August 25, 2026 – BMO Financial Group (TSX:BMO) (NYSE:BMO) reported net income for the third quarter ended July 31, 2026 was $1,750 million, compared with $2,330 million in the prior year, and EPS of $2.38, compared with $3.14. Reported ROE was 8.4%, compared with 11.6% in the prior year. The decrease in reported results was driven by a charge related to the reduction in goodwill associated with the announced sale of BMO’s Transportation and Vendor Finance businesses. Adjusted net income of $2,859 million increased 19% from $2,399 million in the prior year, and adjusted EPS of $3.96 increased 22% from $3.23. Adjusted ROE was 14.0%, compared with 12.0% in the prior year.
“BMO delivered another strong quarter, driven by disciplined execution against the commitments we made at our March Investor Day to elevate ROE and accelerate growth. Every business segment delivered record pre-provision pre-tax earnings, with sustained momentum in Capital Markets and Wealth Management, and continued commercial loan growth in both Canada and the U.S. as we deepen client relationships across our franchise. Credit performance improved, reflecting our proactive risk management and well-diversified portfolio,” said Darryl White, CEO of BMO Financial Group.
“We continue to reallocate and deploy capital to areas positioned to deliver sustainable and long-term value for our shareholders. This includes profitable loan growth to help support economic expansion, investing in talent, technology and AI-powered capabilities, and returning capital through dividends and share repurchases, while maintaining a robust CET1 ratio,” concluded Mr. White.
Concurrent with the release of results, BMO announced a fourth quarter 2026 dividend of $1.71 per common share, unchanged from the prior quarter and an increase of $0.08 or 5% from the prior year. The quarterly dividend of $1.71 is equivalent to an annual dividend of $6.84 per common share. During the quarter, we purchased for cancellation 3.8 million common shares under the normal course issuer bid (NCIB), at an average price of $239.37 per share.
On August 25, 2026, we announced our intention to establish a new NCIB for up to 25 million common shares, subject to the approval of the Office of the Superintendent of Financial Institutions (OSFI) and the Toronto Stock Exchange. Once approvals are obtained, the timing and amount of purchases under the new NCIB will be at management’s discretion, based on factors such as market conditions and capital levels.
Caution
The foregoing section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements section.
(1)Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. They are also presented on an adjusted basis that excludes the impact of certain specified items from reported results. Adjusted results and ratios are non-GAAP and are detailed in the Non-GAAP and Other Financial Measures section. Unless otherwise indicated, all amounts are in Canadian dollars. All ratios and percentage changes in this document are based on unrounded numbers.
(2)All EPS measures in this document refer to diluted EPS, unless specified otherwise.
(3)The CET1 Ratio is disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline, as set out by the Office of the Superintendent of Financial Institutions (OSFI), as applicable.
BMO Financial Group Third Quarter 2026 Earnings Release 1
Third Quarter 2026 Performance Review
Adjusted results and ratios in this section are on a non-GAAP basis. Refer to the Non-GAAP and Other Financial Measures section for further information on adjusting items.
Canadian P&C
Reported net income was $980 million, an increase of $131 million or 16% from the prior year, and adjusted net income was $983 million, an increase of $131 million or 15%, primarily due to a 6% increase in revenue and a lower provision for credit losses, partially offset by higher expenses. Revenue growth was driven by increases in net interest income, primarily due to higher net interest margin and non-interest revenue.
U.S. Banking
Reported net income was $868 million, an increase of $101 million or 13% from the prior year, and adjusted net income was $925 million, an increase of $96 million or 11%. The impact of the stronger U.S. dollar increased each of revenue, expenses and net income by 2%.
On a U.S. dollar basis, reported net income was $620 million, an increase of $62 million or 11% from the prior year, and adjusted net income was $661 million, an increase of $58 million or 9%, primarily due to a 5% increase in revenue, partially offset by higher expenses. Revenue growth was driven by increases in net interest income, primarily due to higher net interest margin and non-interest revenue.
Wealth Management
Reported net income was $408 million, an increase of $16 million or 4% from the prior year, and adjusted net income was $480 million, an increase of $85 million or 22%. Wealth and Asset Management reported net income was $320 million, an increase of $23 million or 8%, and adjusted net income was $392 million, an increase of $92 million or 31%, reflecting higher revenue, primarily due to the impact of stronger global markets and net sales, as well as higher net interest income, partially offset by higher expenses. Insurance net income was $88 million, a decrease of $7 million or 8% from the prior year, primarily due to a gain on the sale of a non-strategic portfolio of insurance contracts in the prior year, partially offset by favourable market movements in the current year.
Capital Markets
Reported net income was $645 million, an increase of $203 million or 46% from the prior year, and adjusted net income was $649 million, an increase of $203 million or 45%, reflecting higher revenue in Global Markets and Investment and Corporate Banking, and a lower provision for credit losses, partially offset by higher expenses.
Corporate Services
Reported net loss was $1,151 million, and included the impact of the announced sale of BMO’s Transportation Finance and Vendor Finance businesses, resulting in a charge of $962 million ($1,092 million pre-tax), primarily related to goodwill, compared with a reported net loss of $120 million in the prior year. Adjusted net loss was $178 million, compared with an adjusted net loss of $123 million. The higher adjusted net loss primarily reflected lower revenue and higher expenses.
Credit Quality
Total provision for credit losses was $722 million, compared with a provision of $797 million in the prior year. The provision for credit losses on impaired loans was $708 million, a decrease of $65 million, largely due to lower provisions in Canadian P&C and U.S. Banking. The provision for credit losses on performing loans was $14 million, compared with $24 million in the prior year. The performing provision in the current quarter was primarily driven by changes in the macroeconomic outlook, partially offset by improvement in portfolio credit quality.
Refer to the Critical Accounting Estimates and Judgments section of BMO’s 2025 Annual Report and Note 3 of the audited annual consolidated financial statements for further information on the allowance for credit losses as at October 31, 2025.
Capital
BMO’s Common Equity Tier 1 (CET1) Ratio was 13.0% as at July 31, 2026, unchanged from 13.0% at the end of the second quarter of 2026, as internal capital generation was offset by the impact of the purchase of common shares for cancellation and higher source currency risk-weighted assets (RWA).
Non-GAAP and Other Financial Measures
Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements and our unaudited interim consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). References to GAAP mean IFRS. We use a number of financial measures to assess our performance, as well as the performance of our operating segments, including amounts, measures and ratios that are presented on a non‑GAAP basis, as described below. We believe that these non‑GAAP amounts, measures and ratios, read together with our GAAP results, provide readers with a better understanding of how management assesses results.
Non-GAAP amounts, measures and ratios do not have standardized meanings 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.
2 BMO Financial Group Third Quarter 2026 Earnings Release
Certain information contained in BMO’s Third Quarter 2026 Management’s Discussion and Analysis dated August 25, 2026, for the period ended July 31, 2026, is incorporated by reference into this document. For further details on the composition of our supplementary financial measures, refer to the Glossary of Financial Terms section of BMO’s Third Quarter 2026 Report to Shareholders, which is available online at www.bmo.com/investorrelations and at www.sedarplus.ca.
Adjusted measures and ratios
Management considers both reported and adjusted results and measures to be useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non‑interest expense and income taxes, as detailed in the following table. Adjusted results and measures presented in this document are non‑GAAP. Presenting results on both a reported and an adjusted basis permits readers to assess the impact of certain items on results for the periods presented, and to better assess results excluding those items that may not reflect ongoing business performance. As such, the presentation may facilitate readers’ analysis of underlying trends. Except as otherwise noted, management’s discussion of changes in reported results in this document applies equally to changes in the corresponding adjusted results.
Net Interest Margin, excluding Global Markets and Insurance
Effective the first quarter of fiscal 2026, we report net interest margin on a basis that excludes net interest income from our Global Markets business in Capital Markets, and average earning assets from our Global Markets and Insurance businesses. Management considers this measure to be useful in allowing readers to assess performance of BMO’s lending, investing and deposit-raising activities without the volatility that may be associated with market and trading-related activities. This measure replaces net interest margin, excluding trading and insurance previously disclosed, and prior periods have been reclassified to conform with the current period’s presentation.
Tangible common equity and return on tangible common equity
Tangible common equity is calculated as common shareholders’ equity, less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities. Return on tangible common equity (ROTCE) is calculated as net income available to common shareholders, adjusted for the amortization of acquisition-related intangible assets and any impairments, as a percentage of average tangible common equity. ROTCE is commonly used in the North American banking industry and is meaningful as a consistent measure of the performance of businesses, whether they were acquired or developed organically.
Adjusting Items
Adjusted results in the current quarter and prior periods excluded the following items:
•Impact of divestitures of $1,106 million ($973 million after-tax) in the current quarter included the announced sale of BMO’s Transportation Finance and Vendor Finance businesses resulting in a charge of $1,092 million ($962 million after-tax), primarily related to goodwill, as well as divestiture-related costs related to the announced sale of 138 branches in select U.S. markets of $14 million ($10 million after-tax). Prior periods included costs related to the sale of branches of $26 million ($24 million after-tax) in Q2-2026 and $4 million ($3 million after-tax) in Q1-2026. Amounts are recorded in non-interest expense in Corporate Services.
•Acquisition and integration costs of $6 million ($4 million after-tax) in the current quarter. Prior periods included expenses of $3 million ($2 million after-tax) in Q2-2026, $9 million ($7 million after-tax) in Q1-2026, $5 million ($4 million after-tax) in Q3-2025, a reversal of $2 million ($1 million after-tax) in Q2-2025 and expenses of $10 million ($7 million after-tax) in Q1-2025. Amounts are recorded in non-interest expense in the related operating segment: Burgundy in Wealth Management and Bank of the West in Corporate Services.
•Amortization of acquisition-related intangible assets of $94 million ($69 million after-tax) in the current quarter. Prior periods included $93 million ($70 million after-tax) in Q2-2026, $96 million ($71 million after-tax) in Q1-2026, $93 million ($69 million after-tax) in Q3-2025, $109 million ($81 million after-tax) in Q2-2025 and $106 million ($79 million after-tax) in Q1-2025. Amounts are recorded in non-interest expense in the related operating segment.
•Change in fair value of contingent consideration related to the acquisition of Burgundy, recorded in non-interest revenue in Wealth Management. The increase in contingent consideration and reduction in non-interest revenue was $63 million (pre-tax and after-tax) in the current quarter, $7 million (pre-tax and after-tax) in Q2-2026 and $16 million (pre-tax and after-tax) in Q1-2026. For further information, refer to Note 13 of the unaudited interim consolidated financial statements and Note 9 of the audited annual consolidated financial statements of BMO’s 2025 Annual Report.
•U.S. Federal Deposit Insurance Corporation (FDIC) special assessment recorded in non-interest expense in Corporate Services. Q1-2026 included a partial reversal of a prior charge of $47 million ($35 million after-tax). Prior periods included a partial reversal of $5 million ($4 million after-tax) in Q3-2025, expenses of $5 million ($4 million after-tax) in Q2-2025 and a partial reversal of $7 million ($5 million after-tax) in Q1-2025.
•Impact of aligning accounting policies for employee vacation across legal entities of $96 million ($70 million after-tax) in Q1-2025, recorded in non-interest expense in Corporate Services.
Adjusting items in aggregate decreased net income by $1,109 million in the current quarter, compared with a $69 million decrease in the prior year and a decrease of $103 million in the prior quarter. On a year-to-date basis, adjusting items in aggregate decreased net income by $1,274 million, compared with a decrease of $304 million in the prior year.
BMO Financial Group Third Quarter 2026 Earnings Release 3
Non-GAAP and Other Financial Measures (1)
| TABLE 1 | |||||||||||||||||
| (Canadian $ in millions, except as noted) | Q3-2026 | Q2-2026 | Q3-2025 | YTD-2026 | YTD-2025 | ||||||||||||
| Reported Results | |||||||||||||||||
| Net interest income | 5,567 | 5,268 | 5,496 | 16,478 | 15,991 | ||||||||||||
| Non-interest revenue | 4,329 | 4,299 | 3,492 | 12,809 | 10,942 | ||||||||||||
| Revenue | 9,896 | 9,567 | 8,988 | 29,287 | 26,933 | ||||||||||||
| Provision for credit losses | 722 | 739 | 797 | 2,207 | 2,862 | ||||||||||||
| Non-interest expense | 6,678 | 5,330 | 5,105 | 17,761 | 15,551 | ||||||||||||
| Income before income taxes | 2,496 | 3,498 | 3,086 | 9,319 | 8,520 | ||||||||||||
| Provision for income taxes | 746 | 868 | 756 | 2,450 | 2,090 | ||||||||||||
| Net income | 1,750 | 2,630 | 2,330 | 6,869 | 6,430 | ||||||||||||
| Dividends on preferred shares and distributions on other equity instruments | 81 | 139 | 66 | 301 | 273 | ||||||||||||
Net income (loss) attributable to non-controlling interest in subsidiaries | 2 | 4 | 3 | 5 | 9 | ||||||||||||
| Net income available to common shareholders | 1,667 | 2,487 | 2,261 | 6,563 | 6,148 | ||||||||||||
Diluted EPS ($) | 2.38 | 3.53 | 3.14 | 9.30 | 8.47 | ||||||||||||
| Adjusting Items Impacting Revenue (Pre-tax) | |||||||||||||||||
Change in fair value of contingent consideration (2) | (63) | (7) | – | (86) | – | ||||||||||||
| Impact of adjusting items on revenue (pre-tax) | (63) | (7) | – | (86) | – | ||||||||||||
| Adjusting Items Impacting Non-Interest Expense (Pre-tax) | |||||||||||||||||
| Acquisition and integration costs | (6) | (3) | (5) | (18) | (13) | ||||||||||||
Amortization of acquisition-related intangible assets (3) | (94) | (93) | (93) | (283) | (308) | ||||||||||||
Impact of divestitures | (1,106) | (26) | – | (1,136) | – | ||||||||||||
| FDIC special assessment | – | – | 5 | 47 | 7 | ||||||||||||
| Impact of alignment of accounting policies | – | – | – | – | (96) | ||||||||||||
| Impact of adjusting items on non-interest expense (pre-tax) | (1,206) | (122) | (93) | (1,390) | (410) | ||||||||||||
| Adjusting Items Impacting Revenue (After-tax) | |||||||||||||||||
Change in fair value of contingent consideration (2) | (63) | (7) | – | (86) | – | ||||||||||||
| Impact of adjusting items on revenue (after-tax) | (63) | (7) | – | (86) | – | ||||||||||||
| Adjusting Items Impacting Non-Interest Expense (After-tax) | |||||||||||||||||
| Acquisition and integration costs | (4) | (2) | (4) | (13) | (10) | ||||||||||||
Amortization of acquisition-related intangible assets (3) | (69) | (70) | (69) | (210) | (229) | ||||||||||||
Impact of divestitures | (973) | (24) | – | (1,000) | – | ||||||||||||
| FDIC special assessment | – | – | 4 | 35 | 5 | ||||||||||||
| Impact of alignment of accounting policies | – | – | – | – | (70) | ||||||||||||
| Impact of adjusting items on non-interest expense (after-tax) | (1,046) | (96) | (69) | (1,188) | (304) | ||||||||||||
| Impact of adjusting items on reported net income (after-tax) | (1,109) | (103) | (69) | (1,274) | (304) | ||||||||||||
Impact on diluted EPS ($) | (1.58) | (0.14) | (0.09) | (1.81) | (0.42) | ||||||||||||
| Adjusted Results | |||||||||||||||||
| Net interest income | 5,567 | 5,268 | 5,496 | 16,478 | 15,991 | ||||||||||||
| Non-interest revenue | 4,392 | 4,306 | 3,492 | 12,895 | 10,942 | ||||||||||||
| Revenue | 9,959 | 9,574 | 8,988 | 29,373 | 26,933 | ||||||||||||
| Provision for credit losses | 722 | 739 | 797 | 2,207 | 2,862 | ||||||||||||
| Non-interest expense | 5,472 | 5,208 | 5,012 | 16,371 | 15,141 | ||||||||||||
| Income before income taxes | 3,765 | 3,627 | 3,179 | 10,795 | 8,930 | ||||||||||||
| Provision for income taxes | 906 | 894 | 780 | 2,652 | 2,196 | ||||||||||||
| Net income | 2,859 | 2,733 | 2,399 | 8,143 | 6,734 | ||||||||||||
| Net income available to common shareholders | 2,776 | 2,590 | 2,330 | 7,837 | 6,452 | ||||||||||||
Diluted EPS ($) | 3.96 | 3.67 | 3.23 | 11.11 | 8.89 | ||||||||||||
(1)Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented in the table above. Refer to the commentary in this Non-GAAP and Other Financial Measures section for further information on adjusting items.
(2)Recorded in non-interest revenue.
(3)Represents amortization of acquisition-related intangible assets and any impairment.
4 BMO Financial Group Third Quarter 2026 Earnings Release
Summary of Reported and Adjusted Results by Operating Segment
| TABLE 2 | |||||||||||||||||||||||
Wealth | Capital | Corporate | U.S. Operations (1) | ||||||||||||||||||||
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. Banking | Management | Markets | Services | Total Bank | (US$ in millions) | ||||||||||||||||
| Q3-2026 | |||||||||||||||||||||||
| Reported net income (loss) | 980 | 868 | 408 | 645 | (1,151) | 1,750 | 68 | ||||||||||||||||
| Dividends on preferred shares and distributions on | |||||||||||||||||||||||
other equity instruments | 12 | 15 | 2 | 15 | 37 | 81 | 16 | ||||||||||||||||
Net income attributable to non-controlling interest in subsidiaries | – | 1 | – | – | 1 | 2 | 1 | ||||||||||||||||
Net income (loss) available to common shareholders | 968 | 852 | 406 | 630 | (1,189) | 1,667 | 51 | ||||||||||||||||
Acquisition and integration costs | – | – | 4 | – | – | 4 | – | ||||||||||||||||
| Amortization of acquisition-related intangible assets | 3 | 57 | 5 | 4 | – | 69 | 42 | ||||||||||||||||
Change in fair value of contingent consideration | – | – | 63 | – | – | 63 | – | ||||||||||||||||
| Impact of divestitures | – | – | – | – | 973 | 973 | 684 | ||||||||||||||||
Adjusted net income (loss) (2) | 983 | 925 | 480 | 649 | (178) | 2,859 | 794 | ||||||||||||||||
Adjusted net income (loss) available to common shareholders (2) | 971 | 909 | 478 | 634 | (216) | 2,776 | 777 | ||||||||||||||||
| Q2-2026 | |||||||||||||||||||||||
| Reported net income (loss) | 884 | 790 | 428 | 638 | (110) | 2,630 | 655 | ||||||||||||||||
| Dividends on preferred shares and distributions on | |||||||||||||||||||||||
| other equity instruments | 11 | 14 | 1 | 15 | 98 | 139 | 15 | ||||||||||||||||
| Net income attributable to non-controlling interest in subsidiaries | – | 4 | – | – | – | 4 | 3 | ||||||||||||||||
Net income (loss) available to common shareholders | 873 | 772 | 427 | 623 | (208) | 2,487 | 637 | ||||||||||||||||
Acquisition and integration costs | – | – | 2 | – | – | 2 | – | ||||||||||||||||
| Amortization of acquisition-related intangible assets | 3 | 57 | 7 | 3 | – | 70 | 43 | ||||||||||||||||
| Change in fair value of contingent consideration | – | – | 7 | – | – | 7 | – | ||||||||||||||||
| Impact of divestitures | – | – | – | – | 24 | 24 | 18 | ||||||||||||||||
Adjusted net income (loss) (2) | 887 | 847 | 444 | 641 | (86) | 2,733 | 716 | ||||||||||||||||
Adjusted net income (loss) available to common shareholders (2) | 876 | 829 | 443 | 626 | (184) | 2,590 | 698 | ||||||||||||||||
| Q3-2025 | |||||||||||||||||||||||
Reported net income (loss) | 849 | 767 | 392 | 442 | (120) | 2,330 | 661 | ||||||||||||||||
| Dividends on preferred shares and distributions on | |||||||||||||||||||||||
| other equity instruments | 12 | 15 | 1 | 11 | 27 | 66 | 3 | ||||||||||||||||
| Net income attributable to non-controlling interest in subsidiaries | – | 2 | – | – | 1 | 3 | 3 | ||||||||||||||||
Net income (loss) available to common shareholders | 837 | 750 | 391 | 431 | (148) | 2,261 | 655 | ||||||||||||||||
| Acquisition and integration costs | – | – | 3 | – | 1 | 4 | 1 | ||||||||||||||||
| Amortization of acquisition-related intangible assets | 3 | 62 | – | 4 | – | 69 | 47 | ||||||||||||||||
FDIC special assessment | – | – | – | – | (4) | (4) | (3) | ||||||||||||||||
Adjusted net income (loss) (2) | 852 | 829 | 395 | 446 | (123) | 2,399 | 706 | ||||||||||||||||
Adjusted net income (loss) available to common shareholders (2) | 840 | 812 | 394 | 435 | (151) | 2,330 | 700 | ||||||||||||||||
| YTD-2026 | |||||||||||||||||||||||
| Reported net income (loss) | 2,812 | 2,400 | 1,188 | 1,940 | (1,471) | 6,869 | 1,438 | ||||||||||||||||
| Dividends on preferred shares and distributions on | |||||||||||||||||||||||
| other equity instruments | 36 | 43 | 5 | 45 | 172 | 301 | 48 | ||||||||||||||||
Net income attributable to non-controlling interest in subsidiaries | – | 3 | – | – | 2 | 5 | 3 | ||||||||||||||||
Net income (loss) available to common shareholders | 2,776 | 2,354 | 1,183 | 1,895 | (1,645) | 6,563 | 1,387 | ||||||||||||||||
Acquisition and integration costs | – | – | 13 | – | – | 13 | – | ||||||||||||||||
| Amortization of acquisition-related intangible assets | 9 | 174 | 17 | 10 | – | 210 | 131 | ||||||||||||||||
| Change in fair value of contingent consideration | – | – | 86 | – | – | 86 | – | ||||||||||||||||
Impact of divestitures | – | – | – | – | 1,000 | 1,000 | 704 | ||||||||||||||||
| FDIC special assessment | – | – | – | – | (35) | (35) | (26) | ||||||||||||||||
Adjusted net income (loss) (2) | 2,821 | 2,574 | 1,304 | 1,950 | (506) | 8,143 | 2,247 | ||||||||||||||||
Adjusted net income (loss) available to common shareholders (2) | 2,785 | 2,528 | 1,299 | 1,905 | (680) | 7,837 | 2,196 | ||||||||||||||||
(1)U.S. Operations comprises reported and adjusted results recorded in U.S. Banking, and the U.S. operations in Capital Markets and Corporate Services.
(2)Refer to the commentary in this Non-GAAP and Other Financial Measures section for details on adjusting items.
Certain comparative figures have been reclassified to conform with the current period’s presentation.
BMO Financial Group Third Quarter 2026 Earnings Release 5
Summary of Reported and Adjusted Results by Operating Segment (Continued)
TABLE 2 (Continued) | |||||||||||||||||||||||
Wealth | Capital | Corporate | U.S. Operations (1) | ||||||||||||||||||||
| (Canadian $ in millions, except as noted) | Canadian P&C | U.S. Banking | Management | Markets | Services | Total Bank | (US$ in millions) | ||||||||||||||||
| YTD-2025 | |||||||||||||||||||||||
| Reported net income (loss) | 2,490 | 2,003 | 1,040 | 1,465 | (568) | 6,430 | 1,815 | ||||||||||||||||
| Dividends on preferred shares and distributions on | |||||||||||||||||||||||
| other equity instruments | 35 | 46 | 4 | 31 | 157 | 273 | 9 | ||||||||||||||||
| Net income attributable to non-controlling interest in subsidiaries | – | 7 | – | – | 2 | 9 | 7 | ||||||||||||||||
Net income (loss) available to common shareholders | 2,455 | 1,950 | 1,036 | 1,434 | (727) | 6,148 | 1,799 | ||||||||||||||||
Acquisition and integration costs | – | – | 3 | – | 7 | 10 | 5 | ||||||||||||||||
| Amortization of acquisition-related intangible assets | 10 | 208 | – | 11 | – | 229 | 153 | ||||||||||||||||
| FDIC special assessment | – | – | – | – | (5) | (5) | (4) | ||||||||||||||||
| Impact of alignment of accounting policies | – | – | – | – | 70 | 70 | 25 | ||||||||||||||||
Adjusted net income (loss) (2) | 2,500 | 2,211 | 1,043 | 1,476 | (496) | 6,734 | 1,994 | ||||||||||||||||
Adjusted net income (loss) available to common shareholders (2) | 2,465 | 2,158 | 1,039 | 1,445 | (655) | 6,452 | 1,978 | ||||||||||||||||
See previous page for footnote references.
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Caution
This Non-GAAP and Other Financial Measures section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
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 2026 and beyond; our strategies or future actions; our targets and commitments; expectations for our financial condition, capital position, the regulatory environment in which we operate, the results of, or outlook for, our operations or the Canadian, U.S. and international economies; and include statements made by our management. Forward-looking statements are typically identified by words such as “will”, “would”, “should”, “believe”, “expect”, “anticipate”, “project”, “intend”, “estimate”, “plan”, “goal”, “commit”, “target”, “may”, “might”, “schedule”, “forecast”, “outlook”, “timeline”, “suggest”, “seek” and “could” or negative or grammatical variations thereof.
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, including labour challenges and changes in foreign exchange and interest rates; political conditions, including changes relating to, or affecting, economic or trade matters, including tariffs, countermeasures and tariff mitigation policies; changes to our credit ratings; cyber and information security, including the threat of data breaches, 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; technology resilience, innovation and competition; technological change, including the use of data and artificial intelligence (AI) in our business, including generative AI; failure of third parties to comply with their obligations to us; disruptions of global supply chains; environmental and social risk, including climate change; the Canadian housing market and consumer leverage; inflationary pressures; changes in laws, including tax legislation and interpretation, or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, including if the bank were designated a global systemically important bank, and the effect of such changes on funding costs, liquidity and capital requirements; changes in monetary, fiscal or economic policy; weak, volatile or illiquid capital or credit markets; the level of competition in the geographic and business areas in which we operate; exposure to, and the resolution of, significant litigation or regulatory matters, our ability to successfully appeal adverse outcomes of such matters and the timing, determination and recovery of amounts related to such matters; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to successfully execute our strategic plans, complete acquisitions or dispositions and integrate acquisitions, including obtaining regulatory approvals, and realize any anticipated benefits from such plans and transactions; critical accounting estimates and judgments, and the effects of changes in accounting standards, rules and interpretations on these estimates; operational and infrastructure risks, including with respect to reliance on third parties; global capital markets activities; the emergence or continuation of widespread health emergencies or pandemics, and their impact on local, national or international economies, as well as their heightening of certain risks that may affect our future results; the possible effects on our business of war or terrorist activities; natural disasters, such as earthquakes or flooding, and disruptions to public infrastructure, such as transportation, communications, power or water supply; 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 further information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, liquidity and funding, operational non-financial, legal and regulatory compliance, strategic, environmental and social, and reputation risk in the Enterprise-Wide Risk Management section of BMO’s 2025 Annual Report, and the Risk Management section in our Third Quarter 2026 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 shareholders and analysts 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 include those set out in the Economic Developments and Outlook section of BMO’s 2025 Annual Report, as updated in the Economic Developments and Outlook section and the Risk Management – Geopolitical and Trade Developments section in our Third Quarter 2026 Report to Shareholders, as well as in the Allowance for Credit Losses section of BMO’s 2025 Annual Report, as updated in the Allowance for Credit Losses section in our Third Quarter 2026 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, we primarily consider historical economic data, past relationships between economic and financial variables, changes in government policies, and the risks to the domestic and global economy.
6 BMO Financial Group Third Quarter 2026 Earnings Release
Investor and Media Information
Investor Presentation Materials
Interested parties are invited to visit BMO’s website at www.bmo.com/investorrelations to review the 2025 Annual MD&A and audited annual consolidated financial statements, quarterly presentation materials and supplementary financial and regulatory information package.
Quarterly Conference Call and Webcast Presentations
Interested parties are also invited to listen to our quarterly conference call on Tuesday, August 25, 2026, at 7:15 a.m. (ET). The call may be accessed by telephone at 647-557-5533 (from within Toronto) or 1-888-440-4121 (toll-free outside Toronto), entering Passcode: 89709#. A replay of the conference call can be accessed until October 25, 2026, by calling 647-362-9199 (from within Toronto) or 1-800-770-2030 (toll-free outside Toronto) and entering Passcode: 89709#.
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 website.
Media Relations Contact
John Fenton, Head, Public Relations, john.fenton@bmo.com, 416-867-3996
Investor Relations Contacts
Christine Viau, Head, Investor Relations, christine.viau@bmo.com, 416-867-6956
Bill Anderson, Managing Director, Investor Relations, bill2.anderson@bmo.com, 416-867-7834
Shareholder Dividend Reinvestment and Share Purchase Plan (DRIP) Common shareholders may elect to have their cash dividends reinvested in common shares of the bank, in accordance with the bank's DRIP. More information about the Plan and how to enrol can be found at www.bmo.com/investorrelations. For dividend information, change in shareholder address or to advise of duplicate mailings, please contact Computershare Trust Company of Canada 320 Bay Street, 14th Floor Toronto, Ontario M5H 4A6 Telephone: 416-263-9200 Fax: 1-888-453-0330 E-mail: service@computershare.com | For other shareholder information, please contact Bank of Montreal Shareholder Services Corporate Secretary’s Department 1 First Canadian Place, 9th Floor Toronto, Ontario M5X 1A1 Telephone: 416-867-6785 E-mail: corp.secretary@bmo.com For further information on this document, please contact Bank of Montreal Investor Relations Department P.O. Box 1, 1 First Canadian Place, 37th Floor Toronto, Ontario M5X 1A1 | ||||
BMO’s 2025 Annual MD&A, audited consolidated financial statements, Annual Information Form and annual report on Form 40-F (filed with the U.S. Securities and Exchange Commission) are available online at www.bmo.com/investorrelations, www.sedarplus.ca and at www.sec.gov. Printed copies of the bank’s complete 2025 audited consolidated financial statements are available free of charge upon request at 416-867-6785 or corp.secretary@bmo.com.
Annual Meeting 2027
The next Annual Meeting of Shareholders will be held on Wednesday, April 14, 2027.
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BMO Financial Group Third Quarter 2026 Earnings Release 7