Bank of Montreal (BMO) 6-K 2025 Q1 BMO Financial Group Reports First Quarter 2025 Results

BMO Financial Group Reports First Quarter 2025 Results

REPORT TO SHAREHOLDERS

BMO’s First Quarter 2025 Report to Shareholders, including the unaudited interim consolidated financial statements for the period ended January 31, 2025 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

First Quarter 2025 compared with First Quarter 2024:

• Net income¹ of $2,138 million, compared with $1,292 million; adjusted net income¹ of $2,289 million, compared with $1,893 million

• Reported earnings per share (EPS)² of $2.83, an increase from $1.73; adjusted EPS^{1, 2} of $3.04, an increase from $2.56

• Provision for credit losses (PCL) of $1,011 million, compared with $627 million

• Return on equity (ROE) of 10.6%, an increase from 7.2%; adjusted ROE¹ of 11.3%, an increase from 10.6%

• Common Equity Tier 1 (CET1) Ratio³ of 13.6%, compared with 12.8%

Adjusted¹ results in the current quarter excluded the following items:

• Impact of aligning accounting policies for employee vacation across legal entities of $70 million ($96 million pre-tax).

• Amortization of acquisition-related intangible assets and any impairments of $79 million ($106 million pre-tax).

• Acquisition and integration costs of $7 million ($10 million pre-tax).

• Impact of the U.S. Federal Deposit Insurance Corporation (FDIC) special assessment partial reversal of $5 million ($7 million pre-tax).

Toronto, February 25, 2025 – BMO Financial Group (TSX:BMO) (NYSE:BMO) today announced financial results for the first quarter ended January 31, 2025. Reported net income was $2,138 million and EPS was $2.83, an increase from $1,292 million and $1.73 in the prior year. Adjusted net income was $2,289 million and adjusted EPS was $3.04, an increase from $1,893 million and $2.56 in the prior year.

“We delivered strong first quarter performance with broad-based revenue growth driving positive operating leverage in each of our operating groups. Provisions for credit losses declined from the prior quarter as expected, and we initiated our share buyback program,” said Darryl White, Chief Executive Officer, BMO Financial Group.

“With the strength of our deep geographic and business diversification, we are well positioned to compete and grow in this dynamic operating environment. Our balance sheet is strong, and we’re serving our clients with robust capital and liquidity and business strategies aimed at providing trusted advice – just as we have for over 200 years throughout Canada and the United States,” concluded Mr. White.

Concurrent with the release of results, BMO announced a second quarter 2025 dividend of $1.59 per common share, an increase of $0.08 or 5% from the prior year, and unchanged from the prior quarter. The quarterly dividend of $1.59 per common share is equivalent to an annual dividend of $6.36 per common share. During the quarter, we purchased for cancellation 1.2 million common shares under the normal course issuer bid.

Caution

The foregoing section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

(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 First Quarter Report 2025 1

Enhanced Disclosure Task Force

Disclosures related to recommendations from the Financial Stability Board’s Enhanced Disclosure Task Force (EDTF) to provide high-quality, transparent risk disclosures are detailed in the index below, as presented in BMO’s 2024 Annual Report, the First Quarter 2025 Report to Shareholders (RTS), Supplemental Financial Information (SFI) or Supplemental Regulatory Capital Information (SRCI). Information on BMO’s website, including information within the SFI or SRCI, is not and should not be considered incorporated by reference into our First Quarter 2025 Report to Shareholders.

Topic	EDTF Disclosure	Page Number
		2024 Annual   Report	Q1 2025
			RTS	SFI	SRCI
General	1.   Risk-related information in each report, including an index for easy navigation	68-109	3	Index	Index
	2.   Risk terminology, measures and key parameters	72-109, 117-119	30	-	-
	3.   Top and emerging risks	68-70	5, 30	-	-
	4.   Plans to meet new key regulatory ratios once applicable rules are finalized	62	16	-	-
Risk Governance, Risk Management and Business Model	5.   Risk management and governance framework, processes and key functions	72-76	-	-	-
	6.   Risk culture, risk appetite and procedures to support the culture	76	-	-	-
	7.   Risks that arise from business models and activities	74-75	-	-	-
	8.   Stress testing within the risk governance and capital frameworks	76	-	-	-
Capital Adequacy and Risk-Weighted Assets (RWA)	9.   Pillar 1 capital requirements	60-63	-	-	5-6, 15
	10.  Composition of capital components and reconciliation of the accounting balance sheet to the regulatory balance sheet. A main features template can be found at https://www.bmo.com/main/about-bmo/investor-relations/regulatory-disclosure	63-64	16-17	-	5-7, 17-18
	11.  Flow statement of movements in regulatory capital, including changes in Common Equity Tier 1 Capital, Additional Tier 1 Capital and Tier 2 Capital	-	-	-	8
	12.  Capital management and strategic planning	59, 65-66	-	-	-
	13.  Risk-weighted assets (RWA) by operating group	64	-	-	16
	14.  Analysis of capital requirements for each method used in calculating RWA	63-64, 77-80	-	-	16,  22-49, 55-67, 84-89
	15.  Tabulate credit risk in the banking book for Basel asset classes and major portfolios	-	-	-	22-49, 51-67,  87-89
	16.  Flow statement that reconciles movements in RWA by risk type	-	-	-	50, 83
	17.  Basel validation and back-testing process, including estimated and actual loss parameter information	103-104	-	-	90
Liquidity	18.  Management of liquidity needs, and liquidity reserve held to meet those needs	91-97	34, 37	-	-
Funding	19.  Encumbered and unencumbered assets disclosed by balance sheet category	93	35	45	-
	20.  Consolidated total assets, liabilities and off-balance sheet commitments by remaining contractual maturity	98-99	39-40	-	-
	21.  Analysis of funding sources and funding strategy	94-95	35-36	-	-
Market Risk	22.  Linkage of trading and non-trading market risk to the Consolidated Balance Sheet	89	32	-	-
	23.  Significant trading and non-trading market risk factors	85-89	33	-	-
	24.  Market risk model assumptions, validation procedures and back-testing	85-89,104	-	-	-
	25.  Primary techniques for risk measurement and risk assessment, including risk of loss	85-89	32-33	-	-
Credit Risk	26.  Analysis of credit risk profile, exposure and concentration	77-84, 148-155	13, 50-54	25-42	16-81
	27.  Policies to identify impaired loans and renegotiated loans	148-150, 155	-	-	-
	28.  Reconciliation of opening and closing balances of impaired loans and allowance for credit losses	83,151	13, 50-51	-	-
	29.  Counterparty credit risk arising from derivative transactions	77-78, 84, 167-168	-	-	55-73
	30.  Credit risk mitigation	77-78, 150, 159, 200-201	-	-	21, 51-52, 68
Other Risks	31.  Discussion of other risks	72-74, 100-109	-	-	-
	32.  Publicly known risk events involving material or potentially material loss events	100-109	-	-	-

2 BMO Financial Group First Quarter Report 2025

Management’s Discussion and Analysis

Management’s Discussion and Analysis (MD&A) commentary is as at February 24, 2025 for the period ended January 31, 2025. The material that precedes this section comprises part of this MD&A. The MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the period ended January 31, 2025, included in this document, as well as the audited annual consolidated financial statements for the year ended October 31, 2024, and the 2024 annual MD&A, contained in Bank of Montreal’s 2024 Annual Report.

The 2024 annual MD&A includes a comprehensive discussion of our businesses, strategies and objectives, and can be accessed on our website, together with other disclosure materials, including interim filings, Annual Information Form and Notice of Annual Meeting of Shareholders and Proxy Circular at www.bmo.com/investorrelations. Readers are also encouraged to visit the site to view other quarterly financial information.

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. In this document, the names BMO and BMO Financial Group, as well as the words “bank”, “we” and “our”, mean Bank of Montreal, together with its subsidiaries.

Table of Contents

4	Caution Regarding Forward-Looking Statements
5	Economic Developments and Outlook
6	Financial Highlights
7	Non-GAAP and Other Financial Measures
11	Foreign Exchange
11	Net Income
12	Revenue
13	Total Provision for Credit Losses
13	Impaired Loans
14	Non-Interest Expense
14	Provision for Income Taxes
15	Balance Sheet
16	Capital Management
19	Review of Operating Groups’ Performance
	19	Personal and Commercial Banking (P&C)
	20	Canadian Personal and Commercial Banking (Canadian P&C)
	21	U.S. Personal and Commercial Banking (U.S. P&C)
	23	BMO Wealth Management
	24	BMO Capital Markets
	26	Corporate Services
27	Summary Quarterly Earnings Trends
28	Transactions with Related Parties
28	Off-Balance Sheet Arrangements

28	Accounting Policies and Critical Accounting Estimates and Judgments
	28	Allowance for Credit Losses
29	Disclosure for Global Systemically Important Banks (G-SIB)
30	Future Changes in Accounting Policies
30	Other Regulatory Developments
30	Risk Management
	30	Top and Emerging Risks That May Affect Future Results
	30	Real Estate Secured Lending
	31	International Exposures
	32	Market Risk
	33	Insurance Market Risk
	34	Liquidity and Funding Risk
	36	Credit Ratings
41	Glossary of Financial Terms
43	Interim Consolidated Financial Statements
	43	Consolidated Statement of Income
	44	Consolidated Statement of Comprehensive Income
	45	Consolidated Balance Sheet
	46	Consolidated Statement of Changes in Equity
	47	Consolidated Statement of Cash Flows
	48	Notes to Interim Consolidated Financial Statements
64	Investor and Media Information

Bank of Montreal’s management, under the supervision of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness, as at January 31, 2025, of Bank of Montreal’s disclosure controls and procedures (as defined in the rules of the U.S. Securities and Exchange Commission and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures are effective.

There were no changes in our internal control over financial reporting during the quarter ended January 31, 2025, which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Because of inherent limitations, disclosure controls and procedures and internal control over financial reporting can provide only reasonable assurance and may not prevent or detect misstatements.

As in prior quarters, Bank of Montreal’s Audit and Conduct Review Committee reviewed this document and Bank of Montreal’s Board of Directors approved the document prior to its release.

BMO Financial Group First Quarter Report 2025 3

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 2025 and beyond; our strategies or future actions; our targets and commitments (including with respect to net zero emissions); 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; 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 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, the appeal of favourable outcomes and 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 execute our strategic plans, complete proposed 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 more information, please refer to 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 non-financial, legal and regulatory, strategic, environmental and social, and reputation risk, in the Enterprise-Wide Risk Management section of BMO’s 2024 Annual Report, and the Risk Management section in our First Quarter 2025 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 2024 Annual Report, as updated in the Economic Developments and Outlook section and the Risk Management - Update on General Economic Conditions and Trade Disputes section in our First Quarter 2025 Report to Shareholders, as well as in the Allowance for Credit Losses section of BMO’s 2024 Annual Report, as updated in the Allowance for Credit Losses section in our First Quarter 2025 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.

4 BMO Financial Group First Quarter Report 2025

Economic Developments and Outlook ⁽¹⁾

Canada’s real gross domestic product (GDP) growth is expected to moderate slightly in the first calendar quarter of 2025 from an estimated annualized rate of 1.8% in the fourth quarter of 2024. The economy faces a material risk of punitive tariffs on exports to the United States that could take effect at the end of a 30-day grace period in early March 2025 and counter duties on imports. Assuming Canada avoids a trade war with the United States, real GDP growth is projected to improve to a rate of 1.7% in 2025 from an estimated 1.3% in 2024. Falling interest rates should support consumer spending and a recovery in housing market activity, despite the dampening effect of immigration restrictions and slower population growth. A temporary reduction in sales taxes and Ontario’s rebate cheques to taxpayers should also provide support early in the year. The unemployment rate has risen by almost one percentage point in the past year to 6.6% in January 2025, due to a rapidly expanding labour force and slowing employment growth. The unemployment rate is anticipated to rise to 6.9% in the months ahead, before falling modestly as economic growth improves and population growth slows. Easing labour shortages and lower gasoline prices helped to reduce Consumer Price Index inflation to a 1.9% year-over-year rate in January 2025 from a 2.9% rate in January 2024. With inflation near the 2% target, the Bank of Canada has lowered its key policy rate by 200 basis points since June 2024 and is expected to reduce it by an additional 50 basis points to 2.5% by July 2025. Alongside lower mortgage rates, new mortgage rules, largely intended to assist first-time home buyers, will support the housing market. Industry-wide growth in residential mortgage balances has improved recently to 4.1% year-over-year in December 2024 and is projected to increase gradually as housing market activity improves. Year-over-year growth in consumer credit (excluding mortgages) was 4.2% in December 2024, amid strong growth in credit card balances, and will likely remain close to this pace in 2025. Industry-wide growth in non-financial corporate credit balances was 1.8% year-over-year in December 2024, held back by trade policy uncertainty. The Canadian dollar will likely remain weak due to the lower interest rate environment in Canada relative to the United States. In the event widespread tariffs of up to 25% are imposed for a full year, together with retaliation duties, Canada’s economy would likely suffer a moderate recession, with the Bank of Canada likely to respond with lower interest rates resulting in a further weakening of the Canadian dollar. This risk will likely depress business investment growth for some time.

A broadening trade war would slow the U.S. economy though likely not pull it into a recession. Assuming a trade war is avoided, U.S. real GDP is expected to grow at a moderate rate in the first quarter of 2025, similar to the 2.3% annualized rate in the fourth quarter of 2024, supported by lower policy rates though held back by a strong U.S. dollar. Growth in U.S. real GDP in 2025 is expected to moderate to 2.4% from 2.8% in 2024, amid continued strength in consumer and business spending and possible reductions in personal income and corporate taxes, offset partly by the potential effects of trade protectionism, deportations of undocumented migrants, and reductions in federal government spending. While employment growth remains positive, the unemployment rate has increased moderately to 4.0% in January 2025 and is projected to rise slightly to 4.3% in 2025. The easing in labour market conditions has reduced pressure on inflation, resulting in year-over-year growth in the Consumer Price Index moderating to 3.0% in January 2025, though inflation remains somewhat elevated. After lowering its key lending rate by 100 basis points since September 2024, the Federal Reserve is projected to reduce the rate further by a cumulative 50 basis points in 2025. Housing market activity should improve modestly as current elevated mortgage rates decline. Growth in residential mortgage balances has slowed considerably to 2.0% year-over-year in January 2025 due to ongoing weakness in home sales, but will likely strengthen moderately in 2025 given anticipated declines in mortgage rates. Despite increased credit card use, year-over-year growth in consumer loan balances decelerated to 2.2% in January 2025, but is projected to pick up modestly in 2025 due to lower interest rates. Year-over-year growth in commercial, industrial and commercial real estate credit remains weak at 1.2% in January 2025 due to still elevated borrowing costs, stricter lending conditions and weakness in the office real estate market, though it is expected to improve modestly in 2025 in response to lower interest rates.

The economic outlook is subject to several risks that could lead to a less favourable outcome for the North American economy. The most immediate threat is from potential new tariffs imposed by the U.S. Federal Government on U.S. imports and retaliatory actions by trading partners. The Canadian economy and businesses face additional long-term risks in the event of an unsuccessful renegotiation of the Canada-United States-Mexico Trade Agreement by 2026. The wildfires in Los Angeles will temporarily slow growth in California before extensive rebuilding in the years ahead. Other risks include the continued conflict in Ukraine, possible renewed conflict in the Middle East, heightened tensions between the United States and China over trade relations and Taiwan, and ongoing diplomatic tensions between Canada and India.

Caution

This Economic Developments and Outlook section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

(1) All periods in this section refer to the calendar quarter and calendar year, rather than the fiscal quarter or fiscal year.

BMO Financial Group First Quarter Report 2025 5

Financial Highlights

TABLE 1
(Canadian $ in millions, except as noted)	Q1-2025		Q4-2024		Q1-2024
Summary Income Statement (1)
Net interest income		5,398		5,438		4,721
Non-interest revenue		3,868		3,519		2,951
Revenue		9,266		8,957		7,672
Provision for credit losses on impaired loans		859		1,107		473
Provision for credit losses on performing loans		152		416		154
Total provision for credit losses (PCL)		1,011		1,523		627
Non-interest expense		5,427		4,427		5,389
Provision for income taxes		690		703		364
Net income		2,138		2,304		1,292
Net income attributable to non-controlling interest in subsidiaries		4		3		2
Dividends on preferred shares and distributions on other equity instruments		65		152		40
Net income available to common shareholders		2,069		2,149		1,250
Adjusted net income		2,289		1,542		1,893
Adjusted net income available to common shareholders		2,220		1,387		1,851
Common Share Data ($, except as noted) (1)
Basic earnings per share		2.84		2.95		1.73
Diluted earnings per share		2.83		2.94		1.73
Adjusted diluted earnings per share		3.04		1.90		2.56
Book value per share		109.46		104.40		96.88
Closing share price		143.88		126.88		126.64
Number of common shares outstanding (in millions)
End of period		728.8		729.5		725.5
Average basic		729.6		729.4		723.8
Average diluted		730.7		730.1		724.6
Market capitalization ($ billions)		104.9		92.6		91.9
Dividends declared per share		1.59		1.55		1.51
Dividend yield (%)		4.4		4.9		4.8
Dividend payout ratio (%)		56.1		52.6		87.4
Adjusted dividend payout ratio (%)		52.3		81.5		59.0
Financial Measures and Ratios (%) (1) (2)
Return on equity (ROE)		10.6		11.4		7.2
Adjusted return on equity		11.3		7.4		10.6
Return on tangible common equity (ROTCE)		14.4		15.6		10.3
Adjusted return on tangible common equity		14.9		9.7		14.3
Efficiency ratio		58.6		49.4		70.2
Adjusted efficiency ratio		56.3		58.3		60.9
Operating leverage		20.1		29.8		27.5
Adjusted operating leverage		8.9		2.4		(5.4	)
Net interest margin on average earning assets		1.62		1.70		1.57
Adjusted net interest margin, excluding trading net interest income, and trading and insurance assets		1.93		1.91		1.84
Effective tax rate		24.39		23.37		21.95
Adjusted effective tax rate		24.52		21.71		22.43
Total PCL-to-average net loans and acceptances		0.58		0.91		0.38
PCL on impaired loans-to-average net loans and acceptances		0.50		0.66		0.29
Balance Sheet and Other Information (as at, $ millions, except as noted)
Assets		1,468,093		1,409,647		1,324,762
Average earning assets		1,319,541		1,272,939		1,194,407
Gross loans and acceptances		694,027		682,731		652,932
Net loans and acceptances		689,235		678,375		649,176
Deposits		996,832		982,440		914,138
Common shareholders’ equity		79,772		76,163		70,292
Total risk weighted assets (3)		433,944		420,838		414,145
Assets under administration		830,137		770,584		724,527
Assets under management		450,617		422,701		360,325
Capital and Liquidity Measures (%) (3)
Common Equity Tier 1 Ratio		13.6		13.6		12.8
Tier 1 Capital Ratio		15.4		15.4		14.4
Total Capital Ratio		17.6		17.6		16.6
Leverage Ratio		4.4		4.4		4.2
TLAC Ratio		29.8		29.3		27.6
Liquidity Coverage Ratio (LCR)		128		132		129
Net Stable Funding Ratio (NSFR)		116		117		116
Foreign Exchange Rates ($)
As at Canadian/U.S. dollar		1.4514		1.3909		1.3404
Average Canadian/U.S. dollar		1.4303		1.3641		1.3392

 (1) Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented in the table above. Management assesses performance on a reported basis and an adjusted basis, and considers both to be useful. For further information, refer to the Non-GAAP and Other Financial Measures section.

 (2) PCL, ROE and ROTCE ratios are presented on an annualized basis.

 (3) Capital and liquidity measures are disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline and the Liquidity Adequacy Requirements (LAR) Guideline, as set out by the Office of the Superintendent of Financial Institutions (OSFI), as applicable.

 Certain comparative figures have been reclassified to conform with the current period’s presentation.

6 BMO Financial Group First Quarter Report 2025

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. 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.

For further information regarding the composition of our non-GAAP and other financial measures, including supplementary financial measures, refer to the Glossary of Financial Terms.

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, provision for credit losses 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 basis 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 be reflective of ongoing business performance. 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 the corresponding adjusted results.

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 because it measures the performance of businesses consistently, whether they were acquired or developed organically.

Adjusting Items

Adjusted results in the current quarter, prior year and prior quarter excluded the following items:

• Impact of aligning accounting policies for employee vacation across legal entities of $70 million ($96 million pre-tax) in Q1-2025, recorded in non-interest expense in Corporate Services.

• Amortization of acquisition-related intangible assets and any impairments of $79 million ($106 million pre-tax) in Q1-2025, recorded in non-interest expense in the related operating group. Prior periods included $84 million ($112 million pre-tax) in Q1-2024 and $92 million ($124 million pre-tax) in Q4-2024.

• Acquisition and integration costs of $7 million ($10 million pre-tax) in Q1-2025, recorded in non-interest expense in the related operating group. Prior periods included $57 million ($76 million pre-tax) in Q1-2024 and $27 million ($35 million pre-tax) in Q4-2024.

• Impact of a U.S. Federal Deposit Insurance Corporate (FDIC) special assessment partial reversal of $5 million ($7 million pre-tax) in Q1-2025, recorded in non-interest expense in Corporate Services. Prior periods included a $313 million ($417 million pre-tax) expense in Q1-2024, and an $11 million ($14 million pre-tax) partial reversal of non-interest expense in Q4-2024.

• The impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, recorded in Corporate Services. Prior periods included $11 million ($15 million pre-tax) in Q1-2024, comprising interest expense of $14 million and non-interest expense of $1 million, and Q4-2024 included the reversal of a fiscal 2022 legal provision, including accrued interest of $870 million ($1,183 million pre-tax), comprising a reversal of interest expense of $589 million and a reversal of non-interest expense of $594 million. For further information, refer to the Provisions and Contingent Liabilities section in Note 25 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report.

• Net accounting loss of $136 million ($164 million pre-tax) on the sale of a portfolio of recreational vehicle loans related to balance sheet optimization, recorded in non-interest revenue in Corporate Services in Q1-2024.

Adjusting items in aggregate decreased net income by $151 million in the current quarter, compared with a decrease of $601 million in the prior year and an increase of $762 million in the prior quarter.

BMO Financial Group First Quarter Report 2025 7

Non-GAAP and Other Financial Measures ⁽¹⁾

TABLE 2
(Canadian $ in millions, except as noted)	Q1-2025			Q4-2024			Q1-2024
Reported Results
Net interest income		5,398			5,438			4,721
Non-interest revenue		3,868			3,519			2,951
Revenue		9,266			8,957			7,672
Provision for credit losses		(1,011	)		(1,523	)		(627	)
Non-interest expense		(5,427	)		(4,427	)		(5,389	)
Income before income taxes		2,828			3,007			1,656
Provision for income taxes		(690	)		(703	)		(364	)
Net income		2,138			2,304			1,292
Dividends on preferred shares and distributions on other equity instruments		65			152			40
Net income attributable to non-controlling interest in subsidiaries		4			3			2
Net income available to common shareholders		2,069			2,149			1,250
Diluted EPS ($)		2.83			2.94			1.73
Adjusting Items Impacting Revenue (Pre-tax)
Legal provision/reversal (including related interest expense and legal fees)		-			589			(14	)
Impact of loan portfolio sale		-			-			(164	)
Impact of adjusting items on revenue (pre-tax)		-			589			(178	)
Adjusting Items Impacting Non-Interest Expense (Pre-tax)
Acquisition and integration costs		(10	)		(35	)		(76	)
Amortization of acquisition-related intangible assets		(106	)		(124	)		(112	)
Legal provision/reversal (including related interest expense and legal fees)		-			594			(1	)
FDIC special assessment		7			14			(417	)
Impact of alignment of accounting policies		(96	)		-			-
Impact of adjusting items on non-interest expense (pre-tax)		(205	)		449			(606	)
Impact of adjusting items on reported net income (pre-tax)		(205	)		1,038			(784	)
Adjusting Items Impacting Revenue (After-tax)
Legal provision/reversal (including related interest expense and legal fees)		-			433			(10	)
Impact of loan portfolio sale		-			-			(136	)
Impact of adjusting items on revenue (after-tax)		-			433			(146	)
Adjusting Items Impacting Non-Interest Expense (After-tax)
Acquisition and integration costs		(7	)		(27	)		(57	)
Amortization of acquisition-related intangible assets		(79	)		(92	)		(84	)
Legal provision/reversal (including related interest expense and legal fees)		-			437			(1	)
FDIC special assessment		5			11			(313	)
Impact of alignment of accounting policies		(70	)		-			-
Impact of adjusting items on non-interest expense (after-tax)		(151	)		329			(455	)
Impact of adjusting items on reported net income (after-tax)		(151	)		762			(601	)
Impact on diluted EPS ($)		(0.21	)		1.04			(0.83	)
Adjusted Results
Net interest income		5,398			4,849			4,735
Non-interest revenue		3,868			3,519			3,115
Revenue		9,266			8,368			7,850
Provision for credit losses		(1,011	)		(1,523	)		(627	)
Non-interest expense		(5,222	)		(4,876	)		(4,783	)
Income before income taxes		3,033			1,969			2,440
Provision for income taxes		(744	)		(427	)		(547	)
Net income		2,289			1,542			1,893
Net income available to common shareholders		2,220			1,387			1,851
Diluted EPS ($)		3.04			1.90			2.56

 (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.

8 BMO Financial Group First Quarter Report 2025

Summary of Reported and Adjusted Results by Operating Segment

TABLE 3
(Canadian $ in millions, except as noted)	Canadian P&C		U.S. P&C		Total P&C		BMO Wealth Management		BMO Capital Markets		Corporate Services			Total Bank			U.S. Segment (1) (US$ in millions)
Q1-2025
Reported net income (loss)		894		580		1,474		369		587		(292	)		2,138			639
Dividends on preferred shares and distributions on other equity instruments		12		15		27		2		10		26			65			3
Net income attributable to non-controlling interest in subsidiaries		-		-		-		-		-		4			4			-
Net income available to common shareholders		882		565		1,447		367		577		(322	)		2,069			636
Acquisition and integration costs (2)		-		-		-		-		-		7			7			5
Amortization of acquisition-related intangible assets		3		70		73		2		4		-			79			52
Impact of FDIC special assessment		-		-		-		-		-		(5	)		(5	)		(4	)
Impact of alignment of accounting policies		-		-		-		-		-		70			70			25
Adjusted net income (loss) (3)		897		650		1,547		371		591		(220	)		2,289			717
Adjusted net income available to common shareholders		885		635		1,520		369		581		(250	)		2,220			714
Q4-2024
Reported net income (loss)		750		256		1,006		326		251		721			2,304			930
Dividends on preferred shares and distributions on other equity instruments		11		14		25		2		10		115			152			5
Net income attributable to non-controlling interest in subsidiaries		-		1		1		-		-		2			3			-
Net income available to common shareholders		739		241		980		324		241		604			2,149			925
Acquisition and integration costs (2)		12		-		12		-		2		13			27			9
Amortization of acquisition-related intangible assets		3		70		73		2		17		-			92			54
Legal provision/reversal (including related interest expense and legal fees)		-		-		-		-		-		(870	)		(870	)		(643	)
Impact of FDIC special assessment		-		-		-		-		-		(11	)		(11	)		(8	)
Adjusted net income (loss) (3)		765		326		1,091		328		270		(147	)		1,542			342
Adjusted net income available to common shareholders		754		311		1,065		326		260		(264	)		1,387			337
Q1-2024
Reported net income (loss)		921		560		1,481		240		393		(822	)		1,292			184
Dividends on preferred shares and distributions on other equity instruments		10		13		23		2		9		6			40			5
Net income attributable to non-controlling interest in subsidiaries		-		-		-		-		-		2			2			4
Net income available to common shareholders		911		547		1,458		238		384		(830	)		1,250			175
Acquisition and integration costs (2)		1		-		1		-		10		46			57			39
Amortization of acquisition-related intangible assets		3		75		78		1		5		-			84			59
Legal provision/reversal (including related interest expense and legal fees)		-		-		-		-		-		11			11			8
Impact of loan portfolio sale		-		-		-		-		-		136			136			102
Impact of FDIC special assessment		-		-		-		-		-		313			313			231
Adjusted net income (loss) (3)		925		635		1,560		241		408		(316	)		1,893			623
Adjusted net income available to common shareholders		915		622		1,537		239		399		(324	)		1,851			614

 (1) U.S. segment comprises reported and adjusted results recorded in U.S. P&C and our U.S. operations in BMO Wealth Management, BMO Capital Markets and Corporate Services.

 (2) Acquisition and integration costs are recorded in non-interest expense in the related operating groups. Expenses related to the acquisition of Bank of the West were recorded in Corporate Services; expenses related to the acquisition of Clearpool and Radicle were recorded in BMO Capital Markets; and expenses related to the acquisition of AIR MILES were recorded in Canadian P&C.

 (3) Refer to the commentary in this Non-GAAP and Other Financial Measures section for details on adjusting items.

BMO Financial Group First Quarter Report 2025 9

Return on Equity and Return on Tangible Common Equity

TABLE 4
(Canadian $ in millions, except as noted)	Q1-2025			Q4-2024			Q1-2024
Reported net income		2,138			2,304			1,292
Net income attributable to non-controlling interest in subsidiaries		4			3			2
Net income attributable to bank shareholders		2,134			2,301			1,290
Dividends on preferred shares and distributions on other equity instruments		65			152			40
Net income available to common shareholders (A)		2,069			2,149			1,250
After-tax amortization of acquisition-related intangible assets		79			92			84
Net income available to common shareholders after adjusting for amortization of acquisition-related intangible assets (B)		2,148			2,241			1,334
After-tax impact of other adjusting items (1)		72			(854	)		517
Adjusted net income available to common shareholders (C)		2,220			1,387			1,851
Average common shareholders’ equity (D)		77,693			74,992			69,391
Goodwill		(17,209	)		(16,435	)		(16,158	)
Acquisition-related intangible assets		(2,514	)		(2,512	)		(2,745	)
Net of related deferred tax liabilities		1,011			934			1,007
Average tangible common equity (E)		58,981			56,979			51,494
Return on equity (%) (= A/D) (2)		10.6			11.4			7.2
Adjusted return on equity (%) (= C/D) (2)		11.3			7.4			10.6
Return on tangible common equity (%) (= B/E) (2)		14.4			15.6			10.3
Adjusted return on tangible common equity (%) (= C/E) (2)		14.9			9.7			14.3

 (1) Refer to the commentary in this Non-GAAP and Other Financial Measures section for details on adjusting items.

 (2) Quarterly calculations are on an annualized basis.

Return on Equity by Operating Segment ⁽¹⁾

TABLE 5
	Q1-2025
(Canadian $ in millions, except as noted)	Canadian P&C		U.S. P&C		Total P&C		BMO Wealth Management		BMO Capital Markets		Corporate Services			Total Bank		U.S. Segment (2) (US$ in millions)
Reported
Net income available to common shareholders		882		565		1,447		367		577		(322	)		2,069		636
Total average common equity		16,515		36,068		52,583		5,009		13,555		6,546			77,693		32,650
Return on equity (%)		21.2		6.2		10.9		29.0		16.9		na			10.6		7.7
Adjusted (3)
Net income (loss) available to common shareholders		885		635		1,520		369		581		(250	)		2,220		714
Total average common equity		16,515		36,068		52,583		5,009		13,555		6,546			77,693		32,650
Return on equity (%)		21.3		7.0		11.5		29.2		17.0		na			11.3		8.6
	Q4-2024
(Canadian $ in millions, except as noted)	Canadian P&C		U.S. P&C		Total P&C		BMO Wealth Management		BMO Capital Markets		Corporate Services			Total Bank		U.S. Segment (2) (US$ in millions)
Reported
Net income (loss) available to common shareholders		739		241		980		324		241		604			2,149		925
Total average common equity		16,237		33,311		49,548		4,841		13,242		7,361			74,992		31,818
Return on equity (%)		18.1		2.9		7.9		26.6		7.3		na			11.4		11.5
Adjusted (3)
Net income (loss) available to common shareholders		754		311		1,065		326		260		(264	)		1,387		337
Total average common equity		16,237		33,311		49,548		4,841		13,242		7,361			74,992		31,818
Return on equity (%)		18.5		3.8		8.6		26.8		7.8		na			7.4		4.2
	Q1-2024
(Canadian $ in millions, except as noted)	Canadian P&C		U.S. P&C		Total P&C		BMO Wealth Management		BMO Capital Markets		Corporate Services			Total Bank		U.S. Segment (2) (US$ in millions)
Reported
Net income (loss) available to common shareholders		911		547		1,458		238		384		(830	)		1,250		175
Total average common equity		15,847		33,246		49,093		4,679		13,202		2,417			69,391		32,059
Return on equity (%)		22.8		6.5		11.8		20.3		11.6		na			7.2		2.2
Adjusted (3)
Net income (loss) available to common shareholders		915		622		1,537		239		399		(324	)		1,851		614
Total average common equity		15,847		33,246		49,093		4,679		13,202		2,417			69,391		32,059
Return on equity (%)		23.0		7.4		12.4		20.4		12.0		na			10.6		7.6

 (1) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. Capital is allocated to the operating segments based on the amount of regulatory capital required to support business activities, with unallocated capital reported in Corporate Services. Capital allocation methodologies are reviewed at least annually. For further information, refer to the How BMO Reports Operating Group Results section. Return on equity ratios are presented on an annualized basis.

 (2) U.S. segment comprises reported and adjusted results and allocated capital recorded in U.S. P&C and our U.S. operations in BMO Wealth Management, BMO Capital Markets and Corporate Services.

 (3) Refer to the commentary in this Non-GAAP and Other Financial Measures section for details on adjusting items.

 na – not applicable

Caution

This Non-GAAP and Other Financial Measures section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

10 BMO Financial Group First Quarter Report 2025

Foreign Exchange

TABLE 6
	Q1-2025
(Canadian $ in millions, except as noted)	vs. Q1-2024			vs. Q4-2024
Canadian/U.S. dollar exchange rate (average)
Current period		1.4303			1.4303
Prior period		1.3392			1.3641
Effects on U.S. segment reported results
Increased (Decreased) net interest income		152			136
Increased (Decreased) non-interest revenue		77			65
Increased (Decreased) total revenue		229			201
Decreased (Increased) provision for credit losses		(21	)		(43	)
Decreased (Increased) non-interest expense		(189	)		(80	)
Decreased (Increased) provision for income taxes		(2	)		(16	)
Increased (Decreased) net income		17			62
Impact on earnings per share ($)		0.02			0.08
Effects on U.S. segment adjusted results
Increased (Decreased) net interest income		153			107
Increased (Decreased) non-interest revenue		88			65
Increased (Decreased) total revenue		241			172
Decreased (Increased) provision for credit losses		(21	)		(43	)
Decreased (Increased) non-interest expense		(149	)		(104	)
Decreased (Increased) provision for income taxes		(14	)		(2	)
Increased (Decreased) net income		57			23
Impact on earnings per share ($)		0.08			0.03

 Adjusted results in this table are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.

The table above indicates the relevant average Canadian/U.S. dollar exchange rates and the impact of changes in those rates on BMO’s U.S. segment reported and adjusted results. Our U.S. segment comprises reported and adjusted results recorded in U.S. P&C and our U.S. operations in BMO Wealth Management, BMO Capital Markets and Corporate Services.

The Canadian dollar equivalents of BMO’s U.S. segment results that are denominated in U.S. dollars increased in the first quarter of fiscal 2025, relative to both the first quarter and the fourth quarter of fiscal 2024, due to changes in the Canadian/U.S. dollar exchange rate. References in this document to the impact of the U.S. dollar do not include U.S. dollar-denominated amounts recorded outside of BMO’s U.S. segment.

Economically, our U.S. dollar income stream was not hedged against the risk of changes in foreign exchange rates during fiscal 2025 and fiscal 2024. Changes in exchange rates will affect future results measured in Canadian dollars, and the impact on those results is a function of the periods in which revenue, expenses and provisions for (or recoveries of) credit losses and income taxes arise.

Refer to the Enterprise-Wide Capital Management section of BMO’s 2024 Annual MD&A for a discussion of the impact that changes in foreign exchange rates can have on BMO’s capital position.

Net Income

Q1 2025 vs. Q1 2024

Reported net income was $2,138 million, an increase of $846 million or 65% from the prior year, and adjusted net income was $2,289 million, an increase of $396 million or 21%. The impact of the stronger U.S. dollar increased net income by 2% on a reported basis and 4% on an adjusted basis. Reported earnings per share (EPS) was $2.83, an increase of $1.10 from the prior year, and adjusted EPS was $3.04, an increase of $0.48.

The increase in reported net income reflected the impact of the FDIC special assessment and net accounting loss on the sale of a portfolio of recreational vehicle loans in the prior year, as well as lower acquisition and integration costs, partially offset by the impact of aligning accounting policies for employee vacation across legal entities in the current year.

The increase in adjusted net income reflected higher revenue, partially offset by higher expenses and a higher provision for credit losses. Reported and adjusted net income increased in BMO Capital Markets and BMO Wealth Management, and decreased in Canadian P&C. Reported and adjusted net income increased in U.S. P&C due to the impact of the stronger U.S. dollar, and decreased on a source currency basis. Corporate Services recorded a lower net loss on both a reported and an adjusted basis.

Q1 2025 vs. Q4 2024

Reported net income decreased $166 million or 7% from the prior quarter, and adjusted net income increased $747 million or 48%. The impact of the stronger U.S. dollar increased net income by 2% on both a reported basis and an adjusted basis. Reported EPS decreased $0.11 from the prior quarter, and adjusted EPS increased $1.14.

Reported net income decreased, primarily due to the reversal of the fiscal 2022 legal provision in the prior quarter. The increase in adjusted net income reflected higher revenue and a lower provision for credit losses, partially offset by higher expenses. Reported and adjusted net income increased across all operating segments. On a reported basis, Corporate Services recorded a net loss, compared with net income in the prior quarter, and a higher net loss on an adjusted basis.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Net Income section.

BMO Financial Group First Quarter Report 2025 11

Revenue

Q1 2025 vs. Q1 2024

Reported and adjusted revenue was $9,266 million. Reported revenue increased $1,594 million or 21% from the prior year, and adjusted revenue increased $1,416 million or 18%. The impact of the stronger U.S. dollar increased revenue by 3% on a reported basis and 4% on an adjusted basis. The increase in reported and adjusted revenue was driven by higher net interest income and non-interest revenue, with increases across all operating segments and Corporate Services.

Reported and adjusted net interest income was $5,398 million, an increase of $677 million or 14% from the prior year on a reported basis and an increase of $663 million or 14% on an adjusted basis, primarily due to higher net interest income in Canadian P&C and BMO Capital Markets, and the impact of the stronger U.S. dollar. Trading-related net interest income was $270 million, an increase of $142 million from the prior year.

BMO’s overall reported net interest margin of 1.62% increased 5 basis points from the prior year. Adjusted net interest margin, excluding trading-related net interest income, trading and insurance assets, was 1.93%, an increase of 9 basis points from the prior year, primarily due to higher margins in Canadian P&C and BMO Capital Markets, and higher net interest income in Corporate Services.

Reported and adjusted non-interest revenue was $3,868 million, an increase of $917 million or 31% from the prior year on a reported basis, and an increase of $753 million or 24% on an adjusted basis. Reported results included the net accounting loss on the sale of a portfolio of recreational vehicle loans in the prior year. Adjusted non-interest revenue increased across most categories, with higher trading revenue, investment management and custodial fee revenue, insurance-related revenue, mutual fund fee revenue, securities gains, other than trading, as well as the impact of treasury-related activities in Corporate Services in the prior year and the impact of the stronger U.S. dollar.

Q1 2025 vs. Q4 2024

Reported revenue increased $309 million or 3% from the prior quarter, and adjusted revenue increased $898 million or 11%. The impact of the stronger U.S. dollar increased reported and adjusted revenue by 2%.

Reported net interest income decreased $40 million or 1% from the prior quarter, primarily driven by the reversal of accrued interest on the fiscal 2022 legal provision in the prior quarter. On an adjusted basis, net interest income increased $549 million or 11%, driven by higher trading net interest income in BMO Capital Markets and higher net interest income in our P&C businesses, as well as the impact of the stronger U.S. dollar. Trading-related net interest income increased $325 million from the prior quarter.

BMO’s overall reported net interest margin decreased 8 basis points from the prior quarter. Adjusted net interest margin, excluding trading-related net interest income, and trading and insurance assets, increased 2 basis points, primarily due to higher margins in our P&C businesses, partially offset by higher low-yielding assets in Corporate Services and lower margins in BMO Capital Markets.

Reported and adjusted non-interest revenue increased $349 million or 10% from the prior quarter, with increases across most categories, including higher trading revenue, insurance-related revenue, investment management and custodial fee revenue, underwriting and advisory fee revenue, card fee revenue and mutual fund fee revenue, as well as the impact of the stronger U.S. dollar.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Revenue section.

Change in Net Interest Income, Average Earning Assets and Net Interest Margin ⁽¹⁾

TABLE 7
	Net interest income (teb) (2)							Average earning assets (3)						Net interest margin (in basis points)
(Canadian $ in millions, except as noted)	Q1-2025		Q4-2024			Q1-2024		Q1-2025		Q4-2024		Q1-2024		Q1-2025		Q4-2024		Q1-2024
Canadian P&C		2,385		2,304			2,141		339,325		334,612		307,501		279		274		277
U.S. P&C		2,205		2,054			2,058		227,215		216,463		212,331		385		378		386
Personal and Commercial Banking (P&C)		4,590		4,358			4,199		566,540		551,075		519,832		321		315		321
All other operating groups and Corporate Services		808		1,080			522		753,001		721,864		674,575		na		na		na
Total reported		5,398		5,438			4,721		1,319,541		1,272,939		1,194,407		162		170		157
Total adjusted		5,398		4,849			4,735		1,319,541		1,272,939		1,194,407		162		152		158
Trading net interest income, trading and insurance assets		270		(55	)		128		263,968		249,129		199,919		na		na		na
Total reported, excluding trading and insurance		5,128		5,493			4,593		1,055,573		1,023,810		994,488		193		213		184
Total adjusted, excluding trading and insurance		5,128		4,904			4,607		1,055,573		1,023,810		994,488		193		191		184
U.S. P&C (US$ in millions)		1,541		1,506			1,537		158,863		158,683		158,552		385		378		386

 (1) Adjusted results and ratios in this table are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.

 (2) Operating group revenue is presented on a taxable equivalent basis (teb) in net interest income. For further information, refer to the How BMO Reports Operating Group Results section in BMO’s 2024 Annual MD&A.

 (3) Average earning assets represents the daily average balance of interest-bearing deposits at central banks, deposits with other banks, securities borrowed or purchased under resale agreement, securities and loans over the period.

 na – not applicable

 Certain comparative figures have been reclassified to conform with the current period’s presentation.

12 BMO Financial Group First Quarter Report 2025

Total Provision for Credit Losses

TABLE 8
(Canadian $ in millions)	Canadian P&C		U.S. P&C		Total P&C		BMO Wealth Management			BMO Capital Markets			Corporate Services			Total Bank
Q1-2025
Provision for credit losses on impaired loans		491		312		803		1			35			20			859
Provision for (recovery of) credit losses on performing loans		51		102		153		(1	)		11			(11	)		152
Total provision for credit losses		542		414		956		-			46			9			1,011
Total PCL-to-average net loans and acceptances (%) (1)		0.64		0.76		0.69		-			0.21			nm			0.58
PCL on impaired loans-to-average net loans and acceptances (%) (1)		0.58		0.58		0.58		0.01			0.16			nm			0.50
Q4-2024
Provision for credit losses on impaired loans		440		435		875		16			203			13			1,107
Provision for (recovery of) credit losses on performing loans		138		263		401		18			8			(11	)		416
Total provision for credit losses		578		698		1,276		34			211			2			1,523
Total PCL-to-average net loans and acceptances (%) (1)		0.69		1.36		0.95		0.31			1.02			nm			0.91
PCL on impaired loans-to-average net loans and acceptances (%) (1)		0.53		0.85		0.65		0.14			0.99			nm			0.66
Q1-2024
Provision for credit losses on impaired loans		238		183		421		3			11			38			473
Provision for (recovery of) credit losses on performing loans		57		107		164		10			(33	)		13			154
Total provision for (recovery of) credit losses		295		290		585		13			(22	)		51			627
Total PCL-to-average net loans and acceptances (%) (1)		0.37		0.57		0.45		0.12			(0.10	)		nm			0.38
PCL on impaired loans-to-average net loans and acceptances (%) (1)		0.30		0.36		0.32		0.02			0.06			nm			0.29

 (1) PCL ratios are presented on an annualized basis.

 nm – not meaningful

Q1 2025 vs. Q1 2024

Total provision for credit losses was $1,011 million, compared with a provision of $627 million in the prior year. Total provision for credit losses as a percentage of average net loans and acceptances was 58 basis points, compared with 38 basis points in the prior year. The provision for credit losses on impaired loans was $859 million, an increase of $386 million, primarily due to higher provisions in Commercial Banking and Canadian unsecured consumer lending. The provision for credit losses on impaired loans as a percentage of average net loans and acceptances was 50 basis points, compared with 29 basis points. There was a $152 million provision for credit losses on performing loans, compared with a $154 million provision in the prior year. The provision for credit losses on performing loans in the current quarter was largely driven by the impact of the uncertain economic environment, including potential tariffs, on future credit conditions, and portfolio credit migration, partially offset by lower balances in certain portfolios.

Q1 2025 vs. Q4 2024

Total provision for credit losses decreased $512 million from the prior quarter. The provision for credit losses on impaired loans decreased $248 million, primarily due to lower provisions in BMO Capital Markets and U.S. Commercial Banking, partially offset by higher provisions in Canadian unsecured consumer lending. The provision for credit losses on impaired loans as a percentage of average net loans and acceptances was 50 basis points, compared with 66 basis points. There was a $152 million provision for credit losses on performing loans, compared with a $416 million provision in the prior quarter.

Impaired Loans

TABLE 9
(Canadian $ in millions, except as noted)	Q1-2025			Q4-2024			Q1-2024
GIL, beginning of period		5,843			6,041			3,960
Classified as impaired during the period		2,373			2,218			1,366
Purchased credit impaired during the period		-			-			-
Transferred to not impaired during the period		(364	)		(290	)		(264	)
Net repayments		(616	)		(890	)		(322	)
Amounts written-off		(424	)		(1,217	)		(381	)
Recoveries of loans and advances previously written-off		-			-			-
Disposals of loans		(2	)		(49	)		(21	)
Foreign exchange and other movements		144			30			(79	)
GIL, end of period		6,954			5,843			4,259
GIL to gross loans and acceptances (%)		1.00			0.86			0.65

Total gross impaired loans and acceptances (GIL) were $6,954 million, an increase from $5,843 million in the prior quarter, primarily due to higher impaired loans in U.S. Commercial Banking across several sectors, including manufacturing and commercial real estate, as well as the impact of the stronger U.S. dollar. GIL as a percentage of gross loans and acceptances increased to 1.00% from 0.86% in the prior quarter.

Loans classified as impaired during the quarter were $2,373 million, an increase from $2,218 million in the prior quarter, reflecting higher impaired loan formations in consumer lending and business and government lending.

Factors contributing to the change in GIL are outlined in the table above.

BMO Financial Group First Quarter Report 2025 13

Non-Interest Expense

Q1 2025 vs. Q1 2024

Reported non-interest expense was $5,427 million, an increase of $38 million or 1% from the prior year, and adjusted non-interest expense was $5,222 million, an increase of $439 million or 9%. The impact of the stronger U.S. dollar increased non-interest expense by 3% on both a reported and an adjusted basis.

Reported results reflected the impact of the FDIC special assessment in the prior year and lower acquisition and integration costs, partially offset by the impact of aligning accounting policies for employee vacation across legal entities. Adjusted non-interest expense increased, primarily due to higher employee-related expenses, including performance-based compensation, the impact of the consolidation of certain retirement benefit plans in the prior year, higher computer and equipment costs, and the impact of the stronger U.S. dollar.

Reported efficiency ratio was 58.6%, compared with 70.2% in the prior year, and adjusted efficiency ratio was 56.3%, compared with 60.9%. Reported operating leverage was positive 20.1% and adjusted operating leverage was positive 8.9%.

Q1 2025 vs. Q4 2024

Reported non-interest expense increased $1,000 million or 23% from the prior quarter, and adjusted non-interest expense increased $346 million or 7%. The impact of the stronger U.S. dollar increased non-interest expense by 2% on both a reported basis and an adjusted basis.

The increase in reported results reflected the reversal of the fiscal 2022 legal provision in the prior quarter and the impact of aligning accounting policies in the current quarter. The increase in adjusted non-interest expense was primarily due to higher employee-related expenses, including stock-based compensation and seasonal benefits that are expensed in the first quarter of each year, and the impact of the stronger U.S. dollar, partially offset by lower advertising costs, professional fees and association, clearing and annual regulator fees.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Non-Interest Expense section.

Provision for Income Taxes

The reported provision for income taxes was $690 million, an increase of $326 million from the prior year, and a decrease of $13 million from the prior quarter. The reported effective tax rate was 24.4%, compared with 22.0% in the prior year and 23.4% in the prior quarter. The adjusted provision for income taxes was $744 million, an increase of $197 million from the prior year and $317 million from the prior quarter. The adjusted effective tax rate was 24.5%, compared with 22.4% in the prior year and 21.7% in the prior quarter.

The change in the reported effective tax rate relative to the prior year, was primarily due to the impact of lower income in the prior year. The change relative to the prior quarter was primarily due to changes in earnings mix and the impact of the Global Minimum Tax (GMT) Act in the current quarter. The change in the adjusted effective tax rate relative to the prior year and prior quarter was primarily due to the impact of lower income in both the prior year and prior quarter, changes in earnings mix and the impact of the GMT Act. For further information on the GMT Act, refer to the Other Regulatory Developments section and Note 11 of the unaudited interim consolidated financial statements.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Provision for Income Taxes section.

14 BMO Financial Group First Quarter Report 2025

Balance Sheet

TABLE 10
(Canadian $ in millions)	As at January 31, 2025		As at October 31, 2024
Assets
Cash and cash equivalents and interest bearing deposits with banks		79,799		68,738
Securities		411,068		396,880
Securities borrowed or purchased under resale agreements		110,632		110,907
Net loans and acceptances		689,235		678,375
Derivative instruments		52,513		47,253
Other assets		124,846		107,494
Total assets		1,468,093		1,409,647
Liabilities and Equity
Deposits		996,832		982,440
Derivative instruments		66,353		58,303
Securities lent or sold under repurchase agreements		122,585		110,791
Other liabilities		186,169		165,450
Subordinated debt		8,554		8,377
Equity		87,559		84,250
Non-controlling interest in subsidiaries		41		36
Total liabilities and equity		1,468,093		1,409,647

 Certain comparative figures have been reclassified to conform with the current period’s presentation.

Total assets were $1,468.1 billion as at January 31, 2025, an increase of $58.4 billion from October 31, 2024. The impact of the stronger U.S. dollar increased assets by $32.2 billion, excluding the impact on derivative assets.

Cash and cash equivalents and interest bearing deposits with banks increased $11.1 billion, primarily due to higher balances held with central banks and the impact of the stronger U.S. dollar.

Securities increased $14.2 billion, primarily due to the impact of the stronger U.S. dollar and higher levels of client activity in BMO Capital Markets, partially offset by lower balances in Corporate Services.

Securities borrowed or purchased under resale agreements decreased $0.3 billion, due to lower levels of client activity in BMO Capital Markets, partially offset by the impact of the stronger U.S. dollar.

Net loans and acceptances increased $10.9 billion. Business and government loans and acceptances increased $7.8 billion, primarily due to the impact of the stronger U.S. dollar, with growth in Canadian P&C more than offset by lower balances in BMO Capital Markets and U.S. P&C. Residential mortgages increased $3.2 billion, driven by growth in our P&C businesses and the impact of the stronger U.S. dollar.

Derivative assets increased $5.3 billion, driven by an increase in the fair value of foreign exchange and interest rate contracts.

Other assets increased $17.4 billion, primarily in BMO Capital Markets, due to changes in the balance of unsettled securities transactions and higher cash collateral balances posted with counterparties and the impact of the stronger U.S. dollar.

Liabilities increased $55.1 billion from October 31, 2024. The impact of the stronger U.S. dollar increased liabilities by $29.4 billion, excluding the impact on derivative liabilities.

Deposits increased $14.4 billion. Customer deposits increased $11.0 billion, primarily due to the impact of the stronger U.S. dollar, with growth in BMO Capital Markets and BMO Wealth Management more than offset by lower commercial deposits in our P&C businesses. Other deposits increased $3.4 billion, due to the impact of the stronger U.S. dollar, partially offset by lower wholesale funding in Corporate Services and lower balances in Global Markets.

Derivative liabilities increased $8.0 billion, driven by an increase in the fair value of foreign exchange and interest rate contracts, partially offset by a decrease in the fair value of equity contracts.

Securities lent or sold under repurchase agreements increased $11.8 billion, due to higher levels of client activity in BMO Capital Markets and the impact of the stronger U.S. dollar.

Other liabilities increased $20.7 billion, primarily in BMO Capital Markets, due to an increase in securities sold but not yet purchased, higher securitization liabilities, changes in the balance of unsettled securities transactions and the impact of the stronger U.S. dollar, partially offset by lower balances in Corporate Services.

Subordinated debt was relatively unchanged, compared with October 31, 2024.

Equity increased $3.3 billion from October 31, 2024. Accumulated other comprehensive income increased $2.8 billion, primarily due to the impact of the stronger U.S. dollar on the translation of net foreign operations and a decline in the accumulated other comprehensive loss on cash flow hedges. Retained earnings increased $0.8 billion, as a result of net income earned in the year, partially offset by dividends and distributions on other equity instruments and the repurchase of common shares for cancellation under the normal course issuer bid. Preferred shares and other equity instruments decreased $0.3 billion, due to the redemption of our Non-Cumulative 5-year Rate Reset Class B Preferred Shares, Series 31 (NVCC).

Contractual obligations by year of maturity are outlined in the Contractual Maturities of Assets and Liabilities and Off-Balance Sheet Commitments table in the Risk Management section.

BMO Financial Group First Quarter Report 2025 15

Capital Management

BMO continues to manage its capital within the framework described in the Enterprise-Wide Capital Management section of BMO’s 2024 Annual Report.

First Quarter 2025 Regulatory Capital Review

BMO’s Common Equity Tier 1 (CET1) Ratio was 13.6% as at January 31, 2025, relatively unchanged from the fourth quarter of 2024, as internal capital generation was largely offset by higher source currency risk-weighted assets (RWA) and the impact of the repurchase of common shares for cancellation under BMO’s normal course issuer bid.

CET1 Capital was $59.2 billion as at January 31, 2025, an increase from $57.1 billion as at October 31, 2024, driven by the impact of foreign exchange movements and internal capital generation, partially offset by the impact of the share repurchases.

RWA were $433.9 billion as at January 31, 2025, an increase from $420.8 billion as at October 31, 2024. RWA increased, primarily due to the impact of foreign exchange movements, changes in asset quality, an increase in asset size and higher market risk.

In calculating regulatory capital ratios, total RWA must be increased when a capital floor amount calculated under the standardized approaches, multiplied by a capital floor adjustment factor, is higher than a similar calculation using more risk-sensitive internal modelled approaches, where applicable. The capital floor was not operative as at January 31, 2025, unchanged from October 31, 2024.

The bank’s Tier 1 and Total Capital Ratios were 15.4% and 17.6%, respectively, as at January 31, 2025, unchanged from October 31, 2024, due to the same factors impacting the CET1 ratio.

The impact of foreign exchange movements on capital ratios was largely offset. BMO’s investments in foreign operations are primarily denominated in U.S. dollars, and the foreign exchange impact of U.S. dollar-denominated RWA and capital deductions may result in variability in the bank’s capital ratios. We manage the impact of foreign exchange movements on RWA and capital deductions on our capital ratios.

Our Leverage Ratio was 4.4% as at January 31, 2025, relatively unchanged from the fourth quarter of 2024, as higher Tier 1 Capital was offset by higher leverage exposures.

The bank’s risk-based Total Loss Absorbing Capacity (TLAC) Ratio and TLAC Leverage Ratio were 29.8% and 8.5%, respectively, as at January 31, 2025, compared with 29.3% and 8.3%, respectively, as at October 31, 2024.

Regulatory Capital Developments

On February 12, 2025, OSFI announced the deferral of increases to the capital floor adjustment factor, currently at 67.5%, until further notice. Banks will be notified at least two years prior to increases in the capital floor adjustment factor being resumed.

On December 17, 2024, OSFI announced that the Domestic Stability Buffer (DSB) will remain at 3.5%.

Refer to the Enterprise-Wide Capital Management section of BMO’s 2024 Annual Report for discussion of regulatory developments.

Regulatory Capital, Leverage and Total Loss Absorbing Capacity

Regulatory capital requirements for BMO are determined in accordance with guidelines issued by OSFI, which are based on the Basel III framework developed by the Basel Committee on Banking Supervision (BCBS), and include OSFI’s CAR Guideline and the Leverage Requirements (LR) Guideline. TLAC requirements are determined in accordance with OSFI’s TLAC Guideline. For more information refer to the Enterprise-Wide Capital Management section of BMO’s 2024 Annual Report.

OSFI’s capital, leverage and TLAC requirements are summarized in the following table.

TABLE 11
(% of risk-weighted assets or leverage exposures)	Minimum capital, leverage and TLAC requirements		Total Pillar 1 Capital buffer (1)		Tier 1 Capital buffer (2)		Domestic stability buffer (3)		Minimum capital, leverage and TLAC requirements including capital buffers		BMO capital, leverage and TLAC ratios as at January 31, 2025
Common Equity Tier 1 Ratio		4.5%		3.5%		na		3.5%		11.5%		13.6%
Tier 1 Capital Ratio		6.0%		3.5%		na		3.5%		13.0%		15.4%
Total Capital Ratio		8.0%		3.5%		na		3.5%		15.0%		17.6%
TLAC Ratio		21.5%		na		na		3.5%		25.0%		29.8%
Leverage Ratio		3.0%		na		0.5%		na		3.5%		4.4%
TLAC Leverage Ratio		6.75%		na		0.5%		na		7.25%		8.5%

 (1) The minimum CET1 Ratio requirement of 4.5% is augmented by the 3.5% Total Pillar 1 Capital buffers, which can absorb losses during periods of stress. Pillar 1 Capital buffers, which will be met with CET1 Capital, include a capital conservation buffer of 2.5%, a Common Equity Tier 1 surcharge for domestic systemically important banks (D-SIBs) of 1.0% and a countercyclical buffer, as prescribed by OSFI (immaterial for the quarter). If a bank’s capital ratios fall within the range of this combined buffer, restrictions on discretionary distributions of earnings (such as dividends, share repurchases and discretionary compensation) would ensue, with the degree of such restrictions varying according to the position of the bank’s ratios within the buffer range.

 (2) D-SIBs are required to meet a 0.5% Tier 1 Capital buffer requirement for the Leverage and TLAC Leverage Ratios.

 (3) OSFI requires all D-SIBs to hold a DSB against Pillar 2 risks associated with systemic vulnerabilities. Breaches of the DSB do not result in a bank being subject to automatic constraints on capital distributions. In the event of a breach, OSFI would require a remediation plan, and would expect for the plan to be executed in a timely manner. Banks may be required to hold additional buffers that are applicable to capital, leverage and TLAC ratios.

 na – not applicable

16 BMO Financial Group First Quarter Report 2025

Regulatory Capital and TLAC Position

TABLE 12
(Canadian $ in millions, except as noted)	Q1-2025			Q4-2024			Q1-2024
Gross common equity (1)		79,772			76,163			70,292
Regulatory adjustments applied to common equity		(20,575	)		(19,109	)		(17,432	)
Common Equity Tier 1 Capital (CET1)		59,197			57,054			52,860
Additional Tier 1 Eligible Capital (2)		7,787			7,787			6,958
Regulatory adjustments applied to Tier 1 Capital		(135	)		(106	)		(97	)
Additional Tier 1 Capital (AT1)		7,652			7,681			6,861
Tier 1 Capital (T1 = CET1 + AT1)		66,849			64,735			59,721
Tier 2 Eligible Capital (3)		9,494			9,184			8,898
Regulatory adjustments applied to Tier 2 Capital		(3	)		(8	)		(53	)
Tier 2 Capital (T2)		9,491			9,176			8,845
Total Capital (TC = T1 + T2)		76,340			73,911			68,566
Other TLAC instruments (4)		53,148			49,465			45,849
Adjustments applied to Other TLAC		(113	)		(88	)		(153	)
Other TLAC available after adjustments		53,035			49,377			45,696
TLAC		129,375			123,288			114,262
Risk-Weighted Assets (5)		433,944			420,838			414,145
Leverage Ratio Exposures		1,529,299			1,484,962			1,406,555
Capital, Leverage and TLAC Ratios (%)
CET1 Ratio		13.6			13.6			12.8
Tier 1 Capital Ratio		15.4			15.4			14.4
Total Capital Ratio		17.6			17.6			16.6
TLAC Ratio		29.8			29.3			27.6
Leverage Ratio		4.4			4.4			4.2
TLAC Leverage Ratio		8.5			8.3			8.1

 (1) Gross Common Equity includes issued qualifying common shares, retained earnings, accumulated other comprehensive income and eligible common share capital issued by subsidiaries.

 (2) Additional Tier 1 Eligible Capital includes directly and indirectly issued qualifying Additional Tier 1 instruments.

 (3) Tier 2 Eligible Capital includes subordinated debentures and may include portion of expected credit loss provisions.

 (4) Other TLAC includes senior unsecured debt subject to the Canadian Bail-In Regime.

 (5) Institutions using one of the internal model-based approaches for credit risk, counterparty credit risk, or market risk are subject to a capital floor requirement that is applied to RWA, as prescribed in OSFI’s CAR Guideline.

Outstanding Shares and Securities Convertible into Common Shares ⁽¹⁾

TABLE 13
As at January 31, 2025	Number of shares		Amount   (in millions)
Common shares (2)		728,763,569		$23,923
Class B Preferred shares (3)
Series 33		8,000,000		$200
Series 44		16,000,000		$400
Series 50		500,000		$500
Series 52		650,000		$650
Other Equity Instruments (3)
4.800% Additional Tier 1 Capital Notes (4)				US$500
4.300% Limited Recourse Capital Notes, Series 1 (LRCNs)				$1,250
5.625% Limited Recourse Capital Notes, Series 2 (LRCNs)				$750
7.325% Limited Recourse Capital Notes, Series 3 (LRCNs)				$1,000
7.700% Limited Recourse Capital Notes, Series 4 (LRCNs)				US$1,000
7.300% Limited Recourse Capital Notes, Series 5 (LRCNs)				US$750
Medium-Term Notes (3)
3.803% Subordinated Notes due 2032				US$1,250
Series J - Second Tranche				$1,250
Series K - First Tranche				$1,000
3.088% Subordinated Notes due 2037				US$1,250
Series L - First Tranche				$750
Series M - First Tranche				$1,150
Series M - Second Tranche				$1,000
Stock options
Vested		3,292,163
Non-vested		3,504,552

 (1) Details on the Medium-Term Notes are outlined in Note 16 of the audited consolidated financial statements of BMO’s 2024 Annual Report. Details on share capital and Other Equity Instruments are outlined in Note 6 of the unaudited interim consolidated financial statements and Note 17 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report.

 (2) Common Shares are net of 95,889 treasury shares.

 (3) Convertible into common shares. For LRCNs, convertible into common shares by virtue of the recourse to the Preferred Shares Series 48, Preferred Shares Series 49, Preferred Shares Series 51, Preferred Shares 53, and Preferred Shares 54 for Series 1, Series 2, Series 3, Series 4, and Series 5 LRCNs, respectively, issued concurrently with the LRCNs, which currently comprise the limited recourse trust assets.

 (4) The notes had an initial interest rate of 4.800% and reset on August 25, 2024 to 6.709%.

If a non-viability contingent capital (NVCC) trigger event were to occur, our NVCC instruments would be converted into BMO common shares pursuant to automatic conversion formulas, with a conversion price based on the greater of: (i) a floor price of $5.00; and (ii) the current market price of our common shares at the time of the trigger event (calculated using a 10-day weighted average). Based on a floor price of $5.00, these NVCC capital instruments would be converted into approximately 4.3 billion BMO common shares, assuming no accrued interest and no declared and unpaid dividends.

BMO Financial Group First Quarter Report 2025 17

Other Capital Developments

On January 17, 2025, we announced a normal course issuer bid (NCIB) to purchase up to 20 million of our common shares for cancellation commencing on January 22, 2025, and ending no later than January 21, 2026. The timing and amount of purchases under the NCIB are determined by management, based on factors such as market conditions and capital levels. We also established an automatic securities purchase plan related to the NCIB under which our broker may, at certain points in time, purchase our common shares pursuant to the NCIB within a defined set of criteria. During the quarter, we purchased for cancellation 1.2 million common shares under the NCIB, at an average price of $144.43 per share for a total amount of $176 million, including tax. In addition, we repurchased 2 million common shares in February 2025 at an average share price of $141.39.

On November 25, 2024, we redeemed all of our outstanding 12 million Non-Cumulative 5-year Rate Reset Class B Preferred Shares, Series 31 (NVCC) for an aggregate total of $300 million.

Dividends

On February 25, 2025, BMO announced that the Board of Directors had declared a quarterly dividend on common shares of $1.59 per share, unchanged from the prior quarter. The dividend is payable on May 27, 2025 to shareholders of record on April 29, 2025. Common shareholders may elect to have their cash dividends reinvested in common shares of BMO, in accordance with the Shareholder Dividend Reinvestment and Share Purchase Plan (DRIP).

Common shares under the DRIP are purchased on the open market without a discount.

For the purposes of the Income Tax Act (Canada) and any similar provincial and territorial legislation, BMO designates all dividends paid or deemed to be paid on both its common and preferred shares as “eligible dividends”, unless indicated otherwise.

Caution

This Capital Management section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

18 BMO Financial Group First Quarter Report 2025

Review of Operating Groups’ Performance

How BMO Reports Operating Group Results

BMO reports financial results for its three operating groups, one of which comprises two operating segments, all of which are supported by Corporate Units and Technology and Operations (T&O) within Corporate Services. Operating segment results include allocations from Corporate Services for treasury-related revenue, corporate and T&O costs, and capital.

BMO employs funds transfer pricing and liquidity transfer pricing between corporate treasury and the operating segments in order to assign cost or credit on assets and liabilities to facilitate effective pricing and business decision-making, and to help assess the profitability performance of each line of business. These practices also capture the cost of holding supplemental liquid assets to meet contingent liquidity requirements, as well as facilitating the management of interest rate and liquidity risk within our risk appetite framework and regulatory requirements. We review our transfer pricing methodologies at least annually in order to align with our interest rate, liquidity and funding risk management practices, and update these as appropriate.

The costs of Corporate Units and T&O services are largely allocated to the four operating segments, with any remaining amounts retained in Corporate Services. Certain expenses directly incurred to support a specific operating segment are generally allocated to that operating segment. Other expenses are generally allocated across the operating segments in amounts that are reasonably reflective of the level of support provided to each operating segment. We review our expense allocation methodologies at least annually and update these as appropriate.

Periodically, certain lines of business and units within our organizational structure are realigned within an operating segment or transferred between operating segments and Corporate Services to support our strategic priorities. Allocations of revenue, expenses, provisions for income taxes and capital from Corporate Services to the operating groups are updated to better align with these changes.

Capital is allocated to the operating segments based on the amount of regulatory capital required to support business activities. Effective the first quarter of fiscal 2025, the capital allocation rate increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. Unallocated capital is reported in Corporate Services. We review our capital allocation methodologies at least annually and update these as appropriate.

We analyze revenue at the consolidated level based on GAAP revenue as reported in the audited annual consolidated financial statements, rather than on a taxable equivalent basis (teb), which is consistent with our Canadian banking peer group. Like many banks, BMO analyzes revenue on a teb basis at the operating segment level. Revenue and the provision for income taxes in BMO Capital Markets and U.S. P&C are increased on tax-exempt securities to equivalent pre-tax amounts in order to facilitate comparisons of income from taxable and tax-exempt sources. The offset to the segment teb adjustments is reflected in Corporate Services revenue and provision for (recovery of) income taxes. In fiscal 2024, the Canadian government enacted legislation that, in certain circumstances, denies deductions for dividends that are received after 2023. As a result, beginning January 1, 2024, we did not take the deduction for certain Canadian dividends received by BMO Capital Markets, and we no longer report this revenue on a taxable equivalent basis. Refer to the Other Regulatory Developments section in BMO’s 2024 Annual Report for further details.

Personal and Commercial Banking (P&C) ⁽¹⁾

TABLE 14
(Canadian $ in millions, except as noted)	Q1-2025		Q4-2024		Q1-2024
Net interest income (teb) (2)		4,590		4,358		4,199
Non-interest revenue		1,151		1,044		1,033
Total revenue (teb) (2)		5,741		5,402		5,232
Provision for credit losses on impaired loans		803		875		421
Provision for credit losses on performing loans		153		401		164
Total provision for credit losses		956		1,276		585
Non-interest expense		2,828		2,818		2,676
Income before income taxes		1,957		1,308		1,971
Provision for income taxes (teb) (2)		483		302		490
Reported net income		1,474		1,006		1,481
Dividends on preferred shares and distributions on other equity instruments		27		25		23
Net income attributable to non-controlling interest in subsidiaries		-		1		-
Net income available to common shareholders		1,447		980		1,458
Acquisition and integration costs (3)		-		12		1
Amortization of acquisition-related intangible assets (4)		73		73		78
Adjusted net income		1,547		1,091		1,560
Adjusted net income available to common shareholders		1,520		1,065		1,537

 (1) Adjusted results are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.

 (2) Taxable equivalent basis (teb) amounts of $9 million in Q1-2025, Q4-2024 and Q1-2024, respectively. These amounts were recorded in net interest income, revenue and in provision for income taxes.

 (3) Acquisition and integration costs related to the acquisition of AIR MILES, recorded in non-interest expense.

 (4) Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.

The Personal and Commercial Banking (P&C) operating group represents the sum of our two retail and commercial operating segments, Canadian Personal and Commercial Banking (Canadian P&C) and U.S. Personal and Commercial Banking (U.S. P&C). The P&C banking business reported net income was $1,474 million, a decrease of $7 million or relatively unchanged from the prior year, and an increase of $468 million or 46% from the prior quarter. These operating segments are reviewed separately in the sections that follow.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.

BMO Financial Group First Quarter Report 2025 19

Canadian Personal and Commercial Banking (Canadian P&C) ⁽¹⁾

TABLE 15
(Canadian $ in millions, except as noted)	Q1-2025		Q4-2024		Q1-2024
Net interest income		2,385		2,304		2,141
Non-interest revenue		680		630		637
Total revenue		3,065		2,934		2,778
Provision for credit losses on impaired loans		491		440		238
Provision for credit losses on performing loans		51		138		57
Total provision for credit losses (PCL)		542		578		295
Non-interest expense		1,290		1,319		1,210
Income before income taxes		1,233		1,037		1,273
Provision for income taxes		339		287		352
Reported net income		894		750		921
Dividends on preferred shares and distributions on other equity instruments		12		11		10
Net income available to common shareholders		882		739		911
Acquisition and integration costs (2)		-		12		1
Amortization of acquisition-related intangible assets (3)		3		3		3
Adjusted net income		897		765		925
Adjusted net income available to common shareholders		885		754		915
Adjusted non-interest expense		1,286		1,299		1,205
Key Performance Metrics and Drivers
Personal and Business Banking revenue		2,206		2,117		2,017
Commercial Banking revenue		859		817		761
Return on equity (%) (4) (5)		21.2		18.1		22.8
Adjusted return on equity (%) (4) (5)		21.3		18.5		23.0
Operating leverage (%)		3.7		0.1		(1.0	)
Adjusted operating leverage (%)		3.6		1.1		(0.5	)
Efficiency ratio (%)		42.1		45.0		43.6
Adjusted efficiency ratio (%)		42.0		44.3		43.4
PCL on impaired loans to average net loans and acceptances (%) (5)		0.58		0.53		0.30
Net interest margin on average earning assets (%)		2.79		2.74		2.77
Average earning assets		339,325		334,612		307,501
Average gross loans and acceptances		337,611		332,965		317,335
Average deposits		313,950		312,475		288,837

 (1) Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.

 (2) Acquisition and integration costs related to the acquisition of AIR MILES, recorded in non-interest expense.

 (3) Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.

 (4) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section.

 (5) Return on equity and PCL ratios are presented on an annualized basis.

 Certain comparative figures have been reclassified to conform with the current period’s presentation.

Q1 2025 vs. Q1 2024

Canadian P&C reported net income was $894 million, a decrease of $27 million or 3% from the prior year.

Total revenue was $3,065 million, an increase of $287 million or 10% from the prior year. Net interest income increased $244 million or 11%, primarily due to balance growth and higher net interest margins. Non-interest revenue increased $43 million or 7%, primarily due to gains on investments in our commercial business, higher deposit fee revenue and card-related revenue, partially offset by lower lending fee revenue, reflecting the impact of the transition of bankers’ acceptances exposures to loans. Net interest margin of 2.79% increased 2 basis points from the prior year, primarily due to higher loan margins, partially offset by loans growing faster than deposits and lower deposit margins.

Personal and Business Banking revenue increased $189 million or 9%, due to higher net interest income and non-interest revenue. Commercial Banking revenue increased $98 million or 13%, due to higher net interest income.

Total provision for credit losses was $542 million, an increase of $247 million from the prior year. The provision for credit losses on impaired loans was $491 million, an increase of $253 million, due to higher provisions in Commercial Banking and unsecured consumer lending. There was a $51 million provision for credit losses on performing loans in the current quarter, compared with a $57 million provision in the prior year.

Non-interest expense was $1,290 million, an increase of $80 million or 7% from the prior year, primarily driven by higher employee-related expenses and technology costs.

Average gross loans and acceptances increased $20.3 billion or 6% from the prior year to $337.6 billion. Personal and Business Banking loan balances increased 6%, primarily reflecting growth in residential mortgage balances. Commercial Banking loan balances increased 7% and credit card balances increased 11%. Average deposits increased $25.1 billion or 9% to $314.0 billion. Personal and Business Banking deposits increased 7%, primarily due to strong growth in term deposits. Commercial Banking deposits increased 13%.

Q1 2025 vs. Q4 2024

Reported net income increased $144 million or 19% from the prior quarter.

Total revenue increased $131 million or 4% from the prior quarter. Net interest income increased $81 million or 4%, primarily due to higher balances and net interest margins. Non-interest revenue increased $50 million or 8%, primarily due to higher card-related revenue, higher gains on investments in our commercial business and higher deposit fee revenue. Net interest margin increased 5 basis points from the prior quarter, primarily due to higher loan and deposit margins, partially offset by loans growing faster than deposits.

20 BMO Financial Group First Quarter Report 2025

Personal and Business Banking revenue increased $89 million or 4% and Commercial Banking revenue increased $42 million or 5%, both due to higher net interest income and non-interest revenue.

Total provision for credit losses decreased $36 million from the prior quarter. The provision for credit losses on impaired loans increased $51 million, largely due to higher provisions in Personal and Business Banking. There was a $51 million provision for credit losses on performing loans in the current quarter, compared with a $138 million provision in the prior quarter.

Non-interest expense decreased $29 million or 2% from the prior quarter, driven by lower employee-related expenses, lower advertising costs and lower acquisition and integration costs.

Average gross loans and acceptances increased $4.6 billion or 1% from the prior quarter. Personal and Business Banking loan balances increased 1%, Commercial Banking loan balances increased 2% and credit card balances increased 2%. Average deposits were relatively unchanged from the prior quarter, with growth in chequing and savings deposits largely offset by lower term deposits.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.

U.S. Personal and Commercial Banking (U.S. P&C) ⁽¹⁾

TABLE 16
(Canadian $ in millions, except as noted)	Q1-2025		Q4-2024		Q1-2024
Net interest income (teb) (2)		2,205		2,054		2,058
Non-interest revenue		471		414		396
Total revenue (teb) (2)		2,676		2,468		2,454
Provision for credit losses on impaired loans		312		435		183
Provision for credit losses on performing loans		102		263		107
Total provision for credit losses (PCL)		414		698		290
Non-interest expense		1,538		1,499		1,466
Income before income taxes		724		271		698
Provision for income taxes (teb) (2)		144		15		138
Reported net income		580		256		560
Dividends on preferred shares and distributions on other equity instruments		15		14		13
Net income attributable to non-controlling interest in subsidiaries		-		1		-
Net income available to common shareholders		565		241		547
Amortization of acquisition-related intangible assets (3)		70		70		75
Adjusted net income		650		326		635
Adjusted net income available to common shareholders		635		311		622
Adjusted non-interest expense		1,444		1,405		1,366
Average earning assets		227,215		216,463		212,331
Average gross loans and acceptances		215,827		205,041		203,644
Average deposits		240,658		228,129		215,160
(US$ equivalent in millions)
Net interest income (teb) (2)		1,541		1,506		1,537
Non-interest revenue		330		304		296
Total revenue (teb) (2)		1,871		1,810		1,833
Provision for credit losses on impaired loans		217		320		137
Provision for credit losses on performing loans		70		189		80
Total provision for credit losses		287		509		217
Non-interest expense		1,075		1,098		1,094
Income before income taxes		509		203		522
Provision for income taxes (teb) (2)		102		12		103
Reported net income		407		191		419
Dividends on preferred shares and distributions on other equity instruments		11		11		10
Net income attributable to non-controlling interest in subsidiaries		-		1		-
Net income available to common shareholders		396		179		409
Amortization of acquisition-related intangible assets (3)		49		51		56
Adjusted net income		456		242		475
Adjusted net income available to common shareholders		445		230		465
Adjusted non-interest expense		1,009		1,030		1,019
Key Performance Metrics (US$ basis)
Personal and Business Banking revenue		715		696		725
Commercial Banking revenue		1,156		1,114		1,108
Return on equity (%) (4) (5)		6.2		2.9		6.5
Adjusted return on equity (%) (4) (5)		7.0		3.8		7.4
Operating leverage (%)		3.8		2.8		(38.4	)
Adjusted operating leverage (%)		3.1		2.2		(26.4	)
Efficiency ratio (%)		57.5		60.7		59.7
Adjusted efficiency ratio (%)		54.0		56.9		55.6
Net interest margin on average earning assets (%)		3.85		3.78		3.86
PCL on impaired loans to average net loans and acceptances (%) (5)		0.58		0.85		0.36
Average earning assets		158,863		158,683		158,552
Average gross loans and acceptances		150,898		150,309		152,051
Average deposits		168,263		167,238		160,674

 (1) Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.

 (2) Taxable equivalent basis (teb) amounts of $9 million in Q1-2025, Q4-2024 and Q1-2024, respectively. These amounts were recorded in net interest income revenue and provision for income taxes, and were reflected in the ratios. On a source currency basis: US$6 million in both Q1-2025 and Q4-2024, and US$7 million in Q1-2024.

 (3) Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense. On a source currency basis: Q1-2025 US$66 million, Q4-2024 US$68 million, Q1-2024 US$75 million.

BMO Financial Group First Quarter Report 2025 21

 (4) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section.

 (5) Return on equity and PCL ratios are presented on an annualized basis.

 Certain comparative figures have been reclassified to conform with the current period’s presentation.

Q1 2025 vs. Q1 2024

U.S. P&C reported net income was $580 million, an increase of $20 million or 4% from the prior year. The impact of the stronger U.S. dollar increased revenue, expenses and net income by 7%, respectively. All amounts in the remainder of this section are presented on a U.S. dollar basis.

Reported net income was $407 million, a decrease of $12 million or 3% from the prior year.

Total revenue was $1,871 million, an increase of $38 million or 2% from the prior year. Net interest income was relatively unchanged from the prior year, with higher deposit balances offset by lower commercial loan balances and lower net interest margins. Non-interest revenue increased $34 million or 11% from the prior year, due to higher lending and deposit fee revenue, partially offset by lower card-related revenue. Net interest margin of 3.85% decreased 1 basis point, primarily due to lower deposit margins, partially offset by deposits growing faster than loans.

Personal and Business Banking revenue decreased $10 million or 1%, due to lower net interest income and non-interest revenue. Commercial Banking revenue increased $48 million or 4% due to higher net interest income and non-interest revenue.

Total provision for credit losses was $287 million, an increase of $70 million from the prior year. The provision for credit losses on impaired loans was $217 million, an increase of $80 million, due to higher provisions in Commercial Banking. There was a $70 million provision for credit losses on performing loans in the current quarter, compared with a $80 million provision in the prior year.

Non-interest expense was $1,075 million, a decrease of $19 million or 2%, primarily driven by realized cost synergies related to the Bank of the West acquisition and our focus on operational efficiencies, and lower deposit insurance and advertising costs, partially offset by higher technology costs.

Average gross loans and acceptances decreased $1.1 billion or 1% from the prior year to $150.9 billion, and increased 2%, excluding sale of the recreational vehicle loan portfolio in the prior year. Personal and Business Banking loan balances increased 1% and Commercial Banking loan balances decreased 1%. Average total deposits increased $7.6 billion or 5% from the prior year. Personal and Business Banking deposits increased 5% and Commercial Banking deposits increased 4%.

Q1 2025 vs. Q4 2024

Reported net income increased $324 million from the prior quarter. The impact of the stronger U.S. dollar increased revenue and expenses by 5% and net income by 11%. All amounts in the remainder of this section are presented on a U.S. dollar basis.

Reported net income increased $216 million from the prior quarter, primarily due to lower provisions for credit losses.

Total revenue increased $61 million or 3% from the prior quarter. Net interest income increased $35 million or 2%, due to growth in balances and higher net interest margins. Non-interest revenue increased $26 million or 8%, primarily due to higher deposit and lending fee revenue. Net interest margin of 3.85% increased 7 basis points from the prior quarter, driven by higher loan and deposit margins, as well as deposits growing faster than loans.

Personal and Business Banking revenue increased $19 million or 3% and Commercial Banking revenue increased $42 million or 4%, both due to higher net interest income and non-interest revenue.

Total provision for credit losses decreased $222 million from the prior quarter. The provision for credit losses on impaired loans decreased $103 million, largely due to lower provisions in Commercial Banking. There was a $70 million provision for credit losses on performing loans in the current quarter, compared with a $189 million provision in the prior quarter.

Non-interest expense decreased $23 million or 2% from the prior quarter, primarily due to lower advertising and other operating costs, partially offset by higher employee-related costs.

Average gross loans and acceptances were relatively unchanged from the prior quarter. Commercial Banking loan balances were relatively unchanged and Personal and Business Banking loan balances increased 2%. Average total deposits increased $1.0 billion or 1% from the prior quarter. Commercial Banking deposits increased 1% and Personal and Business Banking deposits were relatively unchanged.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.

22 BMO Financial Group First Quarter Report 2025

BMO Wealth Management ⁽¹⁾

TABLE 17
(Canadian $ in millions, except as noted)	Q1-2025			Q4-2024			Q1-2024
Net interest income		355			340			325
Non-interest revenue		1,231			1,146			1,003
Total revenue		1,586			1,486			1,328
Provision for credit losses on impaired loans		1			16			3
Provision for (recovery of) credit losses on performing loans		(1	)		18			10
Total provision for credit losses (PCL)		-			34			13
Non-interest expense		1,095			1,024			997
Income before income taxes		491			428			318
Provision for income taxes		122			102			78
Reported net income		369			326			240
Dividends on preferred shares and distributions on other equity instruments		2			2			2
Net income available to common shareholders		367			324			238
Amortization of acquisition-related intangible assets (2)		2			2			1
Adjusted net income		371			328			241
Adjusted net income available to common shareholders		369			326			239
Adjusted non-interest expense		1,092			1,022			996
Key Performance Metrics
Wealth and Asset Management reported net income		286			273			187
Wealth and Asset Management adjusted net income		288			275			188
Insurance reported net income (loss)		83			53			53
Return on equity (%) (3) (4)		29.0			26.6			20.3
Adjusted return on equity (%) (3) (4)		29.2			26.8			20.4
Reported efficiency ratio (%)		69.0			68.9			75.0
Adjusted efficiency ratio (%)		68.9			68.8			74.9
Operating leverage (%)		9.5			(1.9	)		10.0
Adjusted operating leverage (%)		9.6			(1.8	)		10.0
PCL on impaired loans to average net loans and acceptances (%) (4)		0.01			0.14			0.02
Average assets		70,005			67,047			62,524
Average gross loans and acceptances		45,953			44,094			41,822
Average deposits		67,019			62,739			60,083
Assets under administration (5)		406,313			361,250			331,615
Assets under management		450,617			422,701			360,325
U.S. Business Select Financial Data (US$ in millions)
Total revenue		201			196			195
Non-interest expense		150			154			151
Reported net income		39			19			29
Adjusted non-interest expense		148			152			150
Adjusted net income		40			20			30
Average gross loans and acceptances		11,360			10,873			10,272
Average deposits		11,942			11,573			11,556

 (1) Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.

 (2) Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.

 (3) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section.

 (4) Return on equity and PCL ratios are presented on an annualized basis.

 (5) Certain assets under management that are also administered by the bank are included in assets under administration.

Q1 2025 vs. Q1 2024

BMO Wealth Management reported net income was $369 million, an increase of $129 million or 53% from the prior year. Wealth and Asset Management reported net income was $286 million, an increase of $99 million or 52%, and Insurance net income was $83 million, an increase of $30 million or 57%.

Total revenue was $1,586 million, an increase of $258 million or 19% from the prior year. Revenue in Wealth and Asset Management was $1,452 million, an increase of $205 million or 16%, primarily due to the impact of stronger global markets and net sales, strong balance growth, higher transaction revenue and the impact of the stronger U.S. dollar. Insurance revenue was $134 million, an increase of $53 million or 64%, primarily due to favourable market movements in the current quarter.

Non-interest expense was $1,095 million, an increase of $98 million or 10%, primarily due to higher employee-related expenses, including higher revenue-based costs and investment in talent, and the impact of the stronger U.S. dollar.

Assets under management increased $90.3 billion or 25% from the prior year to $450.6 billion, driven by stronger global markets, higher net client assets and the impact of foreign exchange movements. Assets under administration increased $74.7 billion or 23% to $406.3 billion, primarily due to stronger global markets and the impact of foreign exchange movements. Average gross loans increased 10% and average deposits increased 12%.

BMO Financial Group First Quarter Report 2025 23

Q1 2025 vs. Q4 2024

Reported net income increased $43 million or 13% from the prior quarter. Wealth and Asset Management reported net income increased $13 million or 4%, and Insurance net income increased $30 million or 56%.

Total revenue increased $100 million or 7% from the prior quarter. Wealth and Asset Management revenue increased $53 million or 4%, primarily due to the impact of stronger global markets and net sales, higher transaction revenue, higher net interest income and the impact of the stronger U.S. dollar. Insurance revenue increased $47 million or 54%, primarily due to favourable market movements in the current quarter relative to the prior quarter.

Non-interest expense increased $71 million or 7%, primarily due to higher stock-based compensation for employees eligible to retire that are expensed in the first quarter of each year, higher revenue-based costs and the impact of the stronger U.S. dollar.

Assets under management increased $27.9 billion or 7% from the prior quarter, reflecting stronger global markets, higher net client assets and the impact of foreign exchange movements. Assets under administration increased $45.1 billion or 12%, primarily due to stronger global markets and the impact of foreign exchange movements. Average gross loans increased 4% and average deposits increased 7%.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.

BMO Capital Markets ⁽¹⁾

TABLE 18
(Canadian $ in millions, except as noted)	Q1-2025		Q4-2024			Q1-2024
Net interest income (teb) (2)		699		389			505
Non-interest revenue		1,374		1,211			1,084
Total revenue (teb) (2)		2,073		1,600			1,589
Provision for credit losses on impaired loans		35		203			11
Provision for (recovery of) credit losses on performing loans		11		8			(33	)
Total provision for (recovery of) credit losses (PCL)		46		211			(22	)
Non-interest expense		1,255		1,087			1,116
Income before income taxes		772		302			495
Provision for income taxes (teb) (2)		185		51			102
Reported net income		587		251			393
Dividends on preferred shares and distributions on other equity instruments		10		10			9
Net income available to common shareholders		577		241			384
Acquisition and integration costs (3)		-		2			10
Amortization of acquisition-related intangible assets (4)		4		17			5
Adjusted net income		591		270			408
Adjusted net income available to common shareholders		581		260			399
Adjusted non-interest expense		1,250		1,061			1,095
Key Performance Metrics
Global Markets revenue		1,361		938			952
Investment and Corporate Banking revenue		712		662			637
Return on equity (%) (5) (6)		16.9		7.3			11.6
Adjusted return on equity (%) (5) (6)		17.0		7.8			12.0
Operating leverage (teb) (%)		18.0		(6.4	)		(8.8	)
Adjusted operating leverage (teb) (%)		16.4		(4.3	)		(7.7	)
Efficiency ratio (teb) (%)		60.5		67.9			70.2
Adjusted efficiency ratio (teb) (%)		60.3		66.3			69.0
PCL on impaired loans to average net loans and acceptances (%) (6)		0.16		0.99			0.06
Average assets		578,930		505,558			438,202
Average gross loans and acceptances		86,575		82,397			82,245
U.S. Business Select Financial Data (US$ in millions)
Total revenue (teb) (2)		778		567			590
Non-interest expense		441		394			429
Reported net income		241		43			131
Adjusted non-interest expense		439		391			419
Adjusted net income		243		45			138
Average assets		201,230		179,813			141,735
Average gross loans and acceptances		31,763		31,713			31,516

 (1) Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.

 (2) Beginning January 1, 2024, we treated certain Canadian dividends as non-deductible for tax purposes, due to legislation that was enacted in the third quarter of fiscal 2024. As a result, we no longer report this revenue on a taxable equivalent basis (teb): $nil in Q1-2025, $2 million in Q4-2024 and $19 million in Q1-2024. On a source currency basis for our U.S. businesses: $nil in Q1-2025, $1 million in Q4-2024 and $nil in Q1-2024. These amounts were recorded in net interest income and provision for income taxes, and reflected in the ratios. For further information, refer to the Other Regulatory Developments section of BMO’s 2024 Annual MD&A.

 (3) Clearpool and Radicle pre-tax acquisition and integration costs, recorded in non-interest expense.

 (4) Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense. Q4-2024 included an $18 million pre-tax write-down related to the acquisition of Radicle.

 (5) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section.

 (6) Return on equity and PCL ratios are presented on an annualized basis.

24 BMO Financial Group First Quarter Report 2025

Q1 2025 vs. Q1 2024

BMO Capital Markets reported net income was $587 million, an increase of $194 million or 49% from the prior year.

Total revenue was $2,073 million, an increase of $484 million or 30% from the prior year. Global Markets revenue increased $409 million or 43%, reflecting strong performance across all trading products and the impact of the stronger U.S. dollar. Investment and Corporate Banking revenue increased $75 million or 12%, due to higher corporate banking revenue, debt underwriting revenue and the impact of the stronger U.S. dollar.

Total provision for credit losses was $46 million, an increase of $68 million from the prior year. The provision for credit losses on impaired loans was $35 million, an increase of $24 million from the prior year. There was a provision of $11 million for credit losses on performing loans, compared with a recovery of $33 million in the prior year.

Non-interest expense was $1,255 million, an increase of $139 million or 12% from the prior year, driven by higher performance-based compensation, technology costs and the impact of the stronger U.S. dollar.

Average gross loans and acceptances of $86.6 billion increased $4.3 billion or 5% from the prior year.

Q1 2025 vs. Q4 2024

Reported net income increased $336 million from the prior quarter, primarily due to strong revenue growth and lower provisions for credit losses.

Total revenue increased $473 million or 30% from the prior quarter. Global Markets revenue increased $423 million or 45%, primarily due to higher trading revenue across all trading products and the impact of the stronger U.S. dollar. Investment and Corporate Banking revenue increased $50 million or 8%, primarily due to higher debt underwriting revenue, lower mark-downs on the held-for-sale loan portfolio and the impact of the stronger U.S. dollar, partially offset by lower advisory fee revenue.

Total provision for credit losses was $46 million, a decrease of $165 million from the prior quarter. The provision for credit losses on impaired loans was $35 million, a decrease of $168 million from the prior quarter. There was a provision of $11 million for credit losses on performing loans, compared with a provision of $8 million in the prior quarter.

Non-interest expense increased $168 million or 15% from the prior quarter, driven by higher performance-based compensation, the impact of stock-based compensation for employees eligible to retire that is expensed in the first quarter of each year and the impact of the stronger U.S. dollar.

Average gross loans and acceptances increased $4.2 billion or 5% from the prior quarter.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.

BMO Financial Group First Quarter Report 2025 25

Corporate Services ^{(1) (2)}

TABLE 19
(Canadian $ in millions, except as noted)	Q1-2025			Q4-2024			Q1-2024
Net interest income before group teb offset		(237	)		362			(280	)
Group teb offset		(9	)		(11	)		(28	)
Net interest income (teb)		(246	)		351			(308	)
Non-interest revenue		112			118			(169	)
Total revenue (teb)		(134	)		469			(477	)
Provision for credit losses on impaired loans		20			13			38
Provision for (recovery of) credit losses on performing loans		(11	)		(11	)		13
Total provision for credit losses		9			2			51
Non-interest expense		249			(502	)		600
Income (loss) before income taxes		(392	)		969			(1,128	)
Provision for (recovery of) income taxes (teb)		(100	)		248			(306	)
Reported net income (loss)		(292	)		721			(822	)
Net income attributable to non-controlling interest in subsidiaries		26			115			6
Dividends on preferred shares and distributions on other equity instruments		4			2			2
Net income (loss) available to common shareholders		(322	)		604			(830	)
Acquisition and integration costs (3)		7			13			46
Legal provision/reversal (including related interest expense and legal fees)		-			(870	)		11
Impact of loan portfolio sale		-			-			136
FDIC special assessment		(5	)		(11	)		313
Impact of alignment of accounting policies		70			-			-
Adjusted net loss		(220	)		(147	)		(316	)
Adjusted net loss available to common shareholders		(250	)		(264	)		(324	)
Adjusted total revenue (teb) (4)		(134	)		(120	)		(299	)
Adjusted non-interest expense		150			89			121
U.S. Business Select Financial Data (US$ in millions)
Total revenue		(19	)		460			(106	)
Total provision for (recovery of) credit losses		4			(2	)		19
Non-interest expense		57			(436	)		405
Provision for (recovery of) income taxes (teb)		(32	)		221			(135	)
Reported net income (loss)		(48	)		677			(395	)
Adjusted total revenue		(19	)		24			26
Adjusted non-interest expense		21			-			51
Adjusted net income (loss)		(22	)		35			(20	)

 (1) Adjusted results are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.

 (2) Effective the first quarter of fiscal 2024, balances and the associated revenue, expenses and provisions for credit losses related to our Canadian and U.S. indirect retail auto financing business, previously reported in Personal and Commercial Banking, are reported in Corporate Services, reflecting the exit and wind-down of this business unit.

 (3) Acquisition and integration costs related to the acquisition of Bank of the West, recorded in non-interest expense.

 (4) Group taxable equivalent basis (teb) offset amounts for our U.S. businesses recorded in revenue and provision for (recovery of) income taxes: US$6 million in Q1-2025, US$7 million in both Q4-2024 and Q1-2024.

Q1 2025 vs. Q1 2024

Corporate Services reported net loss was $292 million, compared with reported net loss of $822 million in the prior year, and adjusted net loss was $220 million, compared with adjusted net loss of $316 million.

The lower reported net loss was primarily due to the impact of the FDIC special assessment and the net accounting loss related to the sale of a portfolio of recreational vehicle loans in the prior year, and lower acquisition and integration costs, partially offset by the impact of aligning accounting policies for employee vacation across legal entities in the current quarter.

The lower adjusted net loss, which excluded the above items, reflected higher revenue, primarily due to the impact of treasury-related activities and a lower provision for credit losses, partially offset by higher expenses, including the impact of the consolidation of certain retirement benefit plans in the prior year.

Q1 2025 vs. Q4 2024

Reported net loss was $292 million, compared with reported net income of $721 million in the prior quarter, and adjusted net loss was $220 million, compared with adjusted net loss of $147 million.

Reported net income in the prior quarter included the reversal of the fiscal 2022 legal provision. On an adjusted basis, the higher net loss was primarily due to higher expenses reflecting the seasonal impact of employee benefits.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Review of Operating Groups’ Performance section.

26 BMO Financial Group First Quarter Report 2025

Summary Quarterly Earnings Trends ⁽¹⁾

TABLE 20
(Canadian $ in millions, except as noted)	Q1-2025			Q4-2024			Q3-2024			Q2-2024			Q1-2024			Q4-2023			Q3-2023			Q2-2023
Net interest income		5,398			5,438			4,794			4,515			4,721			4,941			4,905			4,814
Non-interest revenue		3,868			3,519			3,398			3,459			2,951			3,378			3,147			2,975
Revenue		9,266			8,957			8,192			7,974			7,672			8,319			8,052			7,789
Provision for credit losses on impaired loans		859			1,107			828			658			473			408			333			243
Provision for credit losses on performing loans		152			416			78			47			154			38			159			780
Total provision for credit losses		1,011			1,523			906			705			627			446			492			1,023
Non-interest expense		5,427			4,427			4,839			4,844			5,389			5,679			5,572			5,501
Income before income taxes		2,828			3,007			2,447			2,425			1,656			2,194			1,988			1,265
Provision for income taxes		690			703			582			559			364			484			423			236
Reported net income (see below)		2,138			2,304			1,865			1,866			1,292			1,710			1,565			1,029
Acquisition and integration costs		7			27			19			26			57			433			370			549
Amortization of acquisition-related intangible assets		79			92			79			79			84			88			85			85
Legal provision/reversal (including related interest expense and legal fees)		-			(870	)		13			12			11			12			(3	)		6
Impact of loan portfolio sale		-			-			-			-			136			-			-			-
FDIC special assessment		(5	)		(11	)		5			50			313			-			-			-
Impact of Canadian tax measures		-			-			-			-			-			-			131			-
Initial provision for credit losses on purchased performing loans		-			-			-			-			-			-			-			517
Impact of alignment of accounting policies		70			-			-			-			-			-			-			-
Adjusted net income		2,289			1,542			1,981			2,033			1,893			2,243			2,148			2,186
Operating Group Reported Revenue
Canadian P&C		3,065			2,934			2,908			2,819			2,778			2,796			2,716			2,490
U.S. P&C		2,676			2,468			2,453			2,389			2,454			2,488			2,414			2,544
BMO Wealth Management		1,586			1,486			1,439			1,393			1,328			1,465			1,525			1,293
BMO Capital Markets		2,073			1,600			1,666			1,661			1,589			1,651			1,463			1,579
Corporate Services		(134	)		469			(274	)		(288	)		(477	)		(81	)		(66	)		(117	)
Total revenue		9,266			8,957			8,192			7,974			7,672			8,319			8,052			7,789
Key Performance Metrics
Diluted earnings per share ($) (2)		2.83			2.94			2.48			2.36			1.73			2.19			2.12			1.26
Adjusted diluted earnings per share ($)		3.04			1.90			2.64			2.59			2.56			2.93			2.94			2.89
PCL-to-average net loans and acceptances (annualized) (%)		0.58			0.91			0.54			0.44			0.38			0.27			0.30			0.65
Effective tax rate (%)		24.39			23.37			23.80			23.07			21.95			22.07			21.31			18.60
Adjusted effective tax rate (%)		24.52			21.71			23.89			23.27			22.43			22.95			22.08			22.47
Canadian/U.S. dollar average exchange rate ($)		1.4303			1.3641			1.3705			1.3625			1.3392			1.3648			1.3331			1.3564

 (1) Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented in the table above. Management assesses performance on a reported basis and an adjusted basis, and considers both to be useful. For further information on adjusting items, refer to the Non-GAAP and Other Financial Measures section. For details on the composition of non-GAAP amounts, measures and ratios, as well as supplementary financial measures, refer to the Glossary of Financial Terms.

 (2) Net income and earnings from our business operations are attributable to shareholders by way of EPS and diluted EPS. Adjusted EPS and adjusted diluted EPS are non-GAAP measures. For further information, refer to the Non-GAAP and Other Financial Measures section.

 Certain comparative figures have been reclassified to conform with the current period’s presentation and for changes in accounting policy.

Earnings in certain quarters are impacted by seasonal factors, such as higher employee expenses related to employee benefits and stock-based compensation for employees eligible to retire which are recorded in the first quarter of each year, as well as the impact of fewer days in the second quarter relative to other quarters. Results are also impacted by foreign currency translation, primarily changes in the U.S. dollar relative to the Canadian dollar. Quarterly EPS is impacted by the semi-annual payment of dividends on certain equity instruments. The table above outlines summary results for the second quarter of fiscal 2023 through the first quarter of fiscal 2025.

On June 1, 2023, we completed the acquisition of AIR MILES, which contributed to the increase in revenue and expenses in our Canadian P&C business beginning the third quarter of fiscal 2023.

A number of specified items impacted reported results in certain quarters. The first quarter of fiscal 2025 included the impact of aligning accounting policies for employee vacation across legal entities. The fourth quarter of fiscal 2024 included a reversal of a fiscal 2022 legal provision, including accrued interest, associated with a predecessor bank, M&I Marshall and Ilsley Bank. Fiscal 2024 and the first quarter of fiscal 2025 included the impact of a FDIC special assessment in each quarter. The first quarter of fiscal 2024 included a loss on the sale of a portfolio of recreational vehicle loans related to balance sheet optimization. The third quarter of fiscal 2023 included the impact of certain tax measures enacted by the Canadian government. The second quarter of fiscal 2023 included an initial provision for credit losses on the purchased Bank of the West performing loan portfolio. All periods included acquisition and integration costs, as well as the amortization of acquisition-related intangible assets and any impairments.

Financial performance benefitted from the strength and diversification of our businesses.

Revenue growth in Canadian P&C reflected good customer acquisition and volume growth, with higher net interest margins. U.S. P&C revenue performance has been impacted by a more muted U.S. banking environment, with reduced loan demand and higher deposit costs. Revenue in BMO Wealth Management benefitted from stronger global markets and steady growth in client assets, while high interest rates resulted in a shift in deposit mix to term deposits and reduced margins, a trend that abated in the first quarter of fiscal 2025 with reductions in the Bank of Canada rate policy. Insurance revenue is subject to variability resulting from market-related impacts. BMO Capital Markets’ revenue is largely driven by market conditions that affect client activity. Trading activity reflected strong performance in the first quarter of fiscal 2025, driven by stronger client flows.

Over the past eight quarters, the higher interest rate environment has had a meaningful impact on credit outcomes in both wholesale and consumer portfolios, resulting in higher provisions on impaired loans. Provisions on performing loans have been impacted by credit migration and uncertain credit conditions, partially offset by improvements in the macro-economic outlook.

BMO Financial Group First Quarter Report 2025 27

Non-interest expense reflected strong expense management, while we continue to invest in our business to drive revenue growth. The first quarter of fiscal 2025 included the impact of aligning accounting policies for employee vacation across legal entities. The fourth quarter of fiscal 2024 benefitted from the reversal of the fiscal 2022 legal provision. The third quarter of fiscal 2023 included severance costs associated with accelerating operational efficiencies across the enterprise, which combined with the benefit of realized cost synergies, have tempered expense growth in recent quarters.

The effective tax rate has varied with legislative changes; changes in tax policy, including their interpretation by tax authorities and the courts; earnings mix, including the relative proportion of earnings attributable to the different jurisdictions in which we operate, the level of pre-tax income, and the level of investments or securities which generate tax credits, or tax-exempt income from securities. The reported effective tax rate was impacted by the elimination of the income tax deduction for certain Canadian dividends in fiscal 2024.

Refer to the Non-GAAP and Other Financial Measures section for further information on non-GAAP amounts, measures and ratios, including adjusting items in this Summary Quarterly Earnings Trend section.

Transactions with Related Parties

In the ordinary course of business, we provide banking services to our key management personnel on the same terms that we offer to our preferred customers for those services. Key management personnel are defined as those persons having authority and responsibility for planning, directing and/or controlling the activities of an entity, being the directors and most senior executives of the bank. We provide banking services to our joint ventures and associates on the same terms offered to our customers for these services. We also offer employees a subsidy on annual credit card fees.

The bank’s policies and procedures for related party transactions did not materially change from October 31, 2024, as described in Note 28 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report.

Off-Balance Sheet Arrangements

We enter into a number of off-balance sheet arrangements in the normal course of operations. The most significant of these are structured entities, credit instruments and guarantees, which are described in the Off-Balance Sheet Arrangements section of BMO’s 2024 Annual Report. We consolidate our own securitization vehicles, certain capital and funding vehicles, and other structured entities created to meet our own, as well as our customers’ needs. We do not consolidate our customer securitization vehicles, certain capital vehicles, various BMO-managed funds or various other structured entities where investments are held. There have been no significant changes to the bank’s off-balance sheet arrangements since October 31, 2024.

Accounting Policies and Critical Accounting Estimates and Judgments

Material accounting policies are described in BMO’s 2024 Annual Report and in the notes to our annual consolidated financial statements for the year ended October 31, 2024, and in Note 1 of the unaudited interim consolidated financial statements, together with a discussion of certain accounting estimates that are considered particularly important as they require management to make significant judgments, some of which relate to matters that are inherently uncertain. Readers are encouraged to review the discussion in Note 1 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report, as well as the updates provided in Note 1 of the unaudited interim consolidated financial statements.

Allowance for Credit Losses

The allowance for credit losses (ACL) consists of allowances on impaired loans, which represent estimated losses related to impaired loans provided for but not yet written off, and allowances on performing loans, which is the bank’s best estimate of impairment in the existing portfolio for loans that have not yet been individually identified as impaired. Expected credit losses (ECL) are calculated on a probability-weighted basis, based on the economic scenarios described below, and are calculated for each exposure in the portfolio as a function of the probability of default (PD), exposure at default (EAD) and loss given default (LGD), with the timing of the loss also considered. Where there has been a significant increase in credit risk, remaining lifetime ECL is recorded; otherwise, 12 months of ECL is generally recorded. A significant increase in credit risk considers many different factors and will vary by product and risk segment. The main factors considered in making this determination are the change in PD since origination and certain other criteria, such as delinquency and watchlist status. We may apply experienced credit judgment to reflect factors not captured in the results produced by the ECL models, as we deem necessary. In the current quarter, we applied experienced credit judgment to reflect the impact of the uncertain environment, including potential tariffs, on credit conditions and the economy. We have controls and processes in place to govern the ECL process, including judgments and assumptions used in determining the allowance on performing loans. These judgments and assumptions may change over time, and the impact of any such change will be recorded in future periods.

In establishing our allowance for performing loans, we attach probability weightings to economic scenarios which are representative of our view of economic and market conditions at the reporting date. The base scenario represents our view of the most probable outcome, as well as upside, downside, and severe downside scenarios, all developed by our Economics group.

When changes in economic performance are assessed, we use real GDP as the basis, which acts as the key driver for movements in many of the other economic and market variables used, including equity market and volatility indices, corporate credit spreads, unemployment rates, housing prices and consumer credit. In addition, we also consider industry-specific variables, where applicable. Many of the variables have a high degree of interdependency, and as such, there is no single variable to which the allowance is sensitive.

Our total allowance for credit losses as at January 31, 2025, was $5,438 million ($4,936 million as at October 31, 2024) and comprised an allowance on performing loans of $4,480 million and an allowance on impaired loans of $958 million ($4,205 million and $731 million, respectively, as at October 31, 2024). The allowance on performing loans increased $275 million from the fourth quarter of 2024, largely driven by the impact of the

28 BMO Financial Group First Quarter Report 2025

uncertain economic environment, including potential tariffs, on future credit conditions, portfolio credit migration, and movements in foreign exchange rates, partially offset by lower balances in certain portfolios.

Information on the Provision for Credit Losses for the three months ended January 31, 2025, can be found in the Total Provision for Credit Losses section.

For additional information, refer to the Risk Management section, Allowance for Credit Losses section of BMO’s 2024 Annual Report, Note 4 of the audited annual consolidated financial statements, as well as Note 3 of the unaudited interim consolidated financial statements.

This Accounting Policies and Critical Accounting Estimates and Judgments section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Disclosure for Global Systemically Important Banks (G-SIB)

As a domestic systemically important bank (D-SIB), OSFI requires that we disclose on an annual basis the 13 indicators comprising the assessment methodology of Global Systemically Important Banks (G-SIB). These indicators measure the impact a bank’s failure would have on the global financial system and wider economy. The indicators reflect the size of banks, their interconnectedness, the lack of alternative infrastructure for services banks provide, their global activity and complexity. This methodology is outlined in a paper, Global systemically important banks: Updated assessment methodology and the additional loss absorbency requirement, issued by the Basel Committee on Banking Supervision (BCBS) in July 2018. As required under the current methodology, the indicators are calculated based on specific instructions issued by the BCBS, and as a result, the measures used may not be based on the most recent version of Basel III framework. Therefore, values may not be consistent with other measures used in this report. Based on 2023 fiscal year indicators, the bank was not designated as a G-SIB in November 2024. If the bank were designated as a G-SIB in the future, the bank’s capital ratio requirements would include the higher of the D-SIB and G-SIB surcharges, both of which are currently set at 1%, and the higher of the D-SIB and G-SIB leverage buffer requirements, both of which are currently set at 0.5%. In addition, the bank may be subject to increased supervisory expectations and requirements.

Indicator values have been reported based on regulatory requirements for consolidation and therefore, insurance and other non-banking information is only included insofar as it is included in the regulatory consolidation of the group, or as otherwise specified by the assessment methodology. This level of consolidation differs from that used in the consolidated financial statements. Results may therefore not be comparable to other disclosures in this report.

The table below provides the fiscal year-end data of the 13 indicators for the bank. During the fiscal 2024 year, notional amounts of over-the-counter derivatives increased, primarily due to higher interest rate derivative activity. The higher underwritten transactions were primarily driven by favourable market conditions. Other year-over-year movements in indicators reflect normal changes in business activity as well as accounting policy changes.

Disclosure for Global Systemically Important Banks

TABLE 21
(Canadian $ in millions)	Indicators	As at October 31
		2024		2023
A. Cross-jurisdictional activity	1. Cross-jurisdictional claims		802,942		683,915
	2. Cross-jurisdictional liabilities		707,844		616,848
B. Size	3. Total exposures as defined for use in the Basel III leverage ratio		1,514,998		1,435,254
C. Interconnectedness	4. Intra-financial system assets		191,887		174,316
	5. Intra-financial system liabilities		80,702		69,840
	6. Securities outstanding		348,447		337,901
D. Substitutability/Financial institution infrastructure	7. Payments activity (1)		38,624,267		43,870,359
	8. Assets under custody		409,334		392,633
	9. Underwritten transactions in debt and equity markets		143,176		94,325
	10. Trading volume (includes the two sub indicators)
	Trading volume fixed income sub indicator		9,195,314		5,163,888
	Trading volume equities and other securities sub indicator		5,246,195		4,361,851
E. Complexity	11. Notional amount of over-the-counter (OTC) derivatives		22,825,043		11,615,227
	12. Trading, FVTPL and FVOCI securities (2)		81,342		55,793
	13. Level 3 assets		7,148		6,028

 (1) Included intercompany transactions that are cleared through a correspondent bank.

 (2) FVTPL: Fair value through profit or loss; FVOCI: Fair value through other comprehensive income.

BMO Financial Group First Quarter Report 2025 29

Future Changes in Accounting Policies

We monitor the potential changes proposed by the International Accounting Standards Board (IASB) and analyze the effect that changes in the standards may have on BMO’s financial reporting and accounting policies. New standards and amendments to existing standards, which are effective for the bank in the future, can be found in Note 1 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report.

Other Regulatory Developments

We continue to monitor and prepare for regulatory developments, including those referenced elsewhere in this document.

For a comprehensive discussion of other regulatory developments, refer to the Enterprise-Wide Capital Management section, the Risks That May Affect Future Results section, the Liquidity and Funding Risk section, and the Legal and Regulatory Risk section of BMO’s 2024 Annual Report.

Global Minimum Tax

On June 20, 2024, the Canadian government enacted legislation that contained a number of measures, including the Global Minimum Tax Act, which introduced a 15% global minimum tax on income earned by large multinational groups. The global minimum tax rules are effective for our fiscal year beginning November 1, 2024, and as a result, our effective tax rate increased by approximately 65 basis points for the three months ended January 31, 2025.

Canadian Sustainability Disclosure Standards

On December 18, 2024, the Canadian Sustainability Standards Board (CSSB) issued its inaugural standards: Canadian Sustainability Disclosure Standards (CSDS) 1, General Requirements for Disclosure of Sustainability-related Financial Information, and CSDS 2, Climate-related Disclosures. These standards represent a significant milestone in promoting consistency and comparability in sustainability reporting by largely aligning with the global baseline developed by the International Sustainability Standards Board. The CSSB standards are currently a voluntary framework and we will continue to monitor developments regarding any mandatory requirements to adopt.

Risk Management

BMO’s risk management policies and processes to identify, measure, manage, monitor, mitigate and report its credit and counterparty, market, insurance, liquidity and funding, operational non-financial, including artificial intelligence, cyber, information and other technology-related risks, legal and regulatory, strategic, environmental and social, and reputation risks are outlined in the Enterprise-Wide Risk Management section of BMO’s 2024 Annual Report.

Top and Emerging Risks That May Affect Future Results

BMO’s top and emerging risks and other factors that may affect future results are described in the Enterprise-Wide Risk Management section of BMO’s 2024 Annual Report. The following is an update to the 2024 Annual Report.

Update on General Economic Conditions and Trade Disputes

Economic conditions impact BMO’s financial results, operational efficiency, strategic direction and our clients, and customers. Sources of possible risk to economic conditions may include the rate of GDP growth, monetary and fiscal policies, interest rates, unemployment levels and geopolitical risk.

The Canadian economy has shown signs of improvement, however, trade protectionism and wide-spread tariffs by the United States could significantly weaken the economy. The U.S. economy could slow in response to retaliatory tariffs. Significant changes to the economic environment and increased economic uncertainty may affect our operations, clients, and customers. It is likely that tariffs, if widespread and prolonged, would lead to an increase in provisions for credit losses, volatility in capital markets and slower loan growth. Management conducts regular monitoring of the economic environment to proactively take appropriate measures to respond to uncertainties and reduce the impact on our results.

For further information on the North American economic outlook, refer to the Economic Developments and Outlook section.

Real Estate Secured Lending

Real Estate Secured Lending includes residential mortgage and home equity line of credit (HELOC) exposures. The following tables provide a breakdown of residential mortgages and home equity lines of credit by geographic region, as well as insured and uninsured balances. Residential mortgages and home equity lines of credit are secured by residential properties.

Canadian Real Estate Secured Lending

TABLE 22
(Canadian $ in millions, except as noted)	Residential mortgages		Amortizing home equity lines of credit		Total amortizing real estate secured lending		Non-amortizing real estate secured lending		Total Canadian real estate secured lending
As at January 31, 2025		160,123		36,360		196,483		13,548		210,031
As at October 31, 2024		158,910		36,326		195,236		13,614		208,850

30 BMO Financial Group First Quarter Report 2025

Residential Mortgages ⁽¹⁾

TABLE 23
	As at January 31, 2025										As at October 31, 2024
(Canadian $ in millions, except as noted)	Outstanding Balances								For the three months ended		Outstanding Balances								For the three months ended
Region (2)	Insured (3)		Uninsured		Total		% of total		Average LTV uninsured (4)		Insured (3)		Uninsured		Total		% of total		Average LTV uninsured (4)
Atlantic		3,304		3,838		7,142		3.7%		69%		3,261		3,802		7,063		3.7%		70%
Quebec		8,738		13,580		22,318		11.5%		71%		8,811		13,647		22,458		11.8%		71%
Ontario		14,243		65,436		79,679		41.0%		71%		14,199		64,107		78,306		41.0%		70%
Alberta		9,532		8,232		17,764		9.1%		73%		9,551		8,175		17,726		9.3%		73%
British Columbia		4,488		24,927		29,415		15.1%		68%		4,504		25,011		29,515		15.4%		68%
All other Canada		2,167		1,638		3,805		2.0%		72%		2,180		1,662		3,842		2.0%		72%
Total Canada		42,472		117,651		160,123		82.4%		70%		42,506		116,404		158,910		83.2%		70%
United States		64		34,106		34,170		17.6%		71%		67		32,103		32,170		16.8%		74%
Total		42,536		151,757		194,293		100%		71%		42,573		148,507		191,080		100%		71%

 (1) Reporting methodologies are in accordance with OSFI’s Residential Mortgage Underwriting Practices and Procedures (B-20) Guideline.

 (2) Region is based upon address of the property mortgaged.

 (3) Insured mortgages are defined as mortgages that are insured individually or in bulk through an eligible insurer (i.e., CMHC, Sagen MI Canada^TM).

 (4) Loan-to-value (LTV) is based on original outstanding balances for mortgages and authorized amounts for HELOCs, divided by the value of the collateral at point of origination.

Home Equity Lines of Credit ⁽¹⁾

TABLE 24
	As at January 31, 2025										As at October 31, 2024
(Canadian $ in millions, except as noted)	Portfolio								For the three months ended		Portfolio								For the three months ended
Region (2)	Outstanding Balances		%		Authorizations		%		Average LTV (4)		Outstanding Balances		%		Authorizations		%		Average LTV (4)
Atlantic		1,072		1.9%		2,064		1.7%		63%		1,051		1.9%		2,028		1.7%		62%
Quebec		9,145		16.1%		18,513		15.7%		67%		9,216		16.3%		18,530		15.9%		68%
Ontario		25,288		44.6%		47,540		40.3%		62%		25,313		44.8%		47,222		40.6%		62%
Alberta		3,171		5.6%		7,171		6.1%		60%		3,200		5.7%		7,156		6.1%		60%
British Columbia		10,513		18.5%		20,113		17.0%		61%		10,432		18.5%		19,867		17.1%		60%
All other Canada		719		1.3%		1,481		1.3%		67%		728		1.3%		1,485		1.3%		67%
Total Canada		49,908		88.0%		96,882		82.1%		62%		49,940		88.5%		96,288		82.7%		62%
United States		6,806		12.0%		21,095		17.9%		58%		6,497		11.5%		20,146		17.3%		58%
Total		56,714		100%		117,977		100%		62%		56,437		100%		116,434		100%		61%

 Refer to footnote references in the Residential Mortgages table above.

Residential Mortgages by Remaining Term of Amortization ^{(1) (2)}

TABLE 25
	As at January 31, 2025
	Amortization period
	< 5 Years %		6-10 Years %		11-15 Years %		16-20 Years %		21-25 Years %		26-30 Years %		31-35 Years %		> 35 Years %
Canada (3)		0.7%		2.7%		7.2%		18.1%		35.7%		25.5%		2.4%		7.7%
United States (4)		0.3%		1.7%		3.8%		2.5%		8.9%		82.6%		0.1%		0.1%
Total		0.7%		2.5%		6.6%		15.3%		31.0%		35.6%		2.0%		6.3%
	As at October 31, 2024
	Amortization period
	< 5 Years %		6-10 Years %		11-15 Years %		16-20 Years %		21-25 Years %		26-30 Years %		31-35 Years %		> 35 Years %
Canada (3)		0.7%		2.6%		6.6%		16.1%		33.8%		26.5%		3.6%		10.1%
United States (4)		0.4%		1.7%		4.0%		2.4%		9.0%		82.3%		0.1%		0.1%
Total		0.6%		2.5%		6.2%		13.8%		29.6%		35.9%		3.0%		8.4%

 (1) In Canada, the remaining amortization is based on the current balance, interest rate, customer payment amount and payment frequency. The contractual payment schedule is used in the United States.

 (2) Reporting methodologies are in accordance with OSFI’s B-20 Guideline.

 (3) As a result of increases in interest rates, the portfolio included $2.6 billion ($9.3 billion as at October 31, 2024) of variable-rate mortgages in negative amortization, with all of the contractual payments in the current period being applied to interest, and the portion of interest due that is not met by each payment added to the principal.

 (4) A large proportion of U.S.-based mortgages in the longer-amortization band are primarily associated with modification programs for troubled borrowers and regulator-initiated mortgage refinancing programs.

International Exposures

BMO’s geographic exposures outside of Canada and the United States are subject to a risk management framework that incorporates assessments of the economic and political risk in each region or country. These exposures are also managed within limits based on product, entity and country of ultimate risk. Our total net exposure to these regions is set out in the table below.

The table outlines total net exposure for funded lending and undrawn commitments, securities (including cash products, traded credit and credit default swap activity), repo-style transactions and derivatives. Repo-style transactions and derivatives exposure are reported as mark-to-market value. Derivatives exposures incorporate transaction netting where master netting agreements with counterparties have been entered into, and collateral offsets for counterparties where a Credit Support Annex is in effect.

BMO Financial Group First Quarter Report 2025 31

Exposure by Region

TABLE 26
		As at January 31, 2025																										As at October 31, 2024
(Canadian $ in millions)	Funded Lending and Commitments								Securities								Repo-Style Transactions and Derivatives								Total Net Exposure		Total Net Exposure
Region	Bank		Corporate		Sovereign		Total		Bank		Corporate		Sovereign		Total		Bank		Corporate		Sovereign		Total
Europe (excluding United Kingdom)		822		2,929		-		3,751		614		61		2,043		2,718		1,109		220		81		1,410		7,879		10,670
United Kingdom		62		6,852		207		7,121		238		65		1,185		1,488		81		645		129		855		9,464		10,493
Latin America		3,142		5,200		-		8,342		1		149		-		150		3		180		19		202		8,694		8,628
Asia-Pacific		3,932		2,427		177		6,536		495		11		3,352		3,858		132		143		199		474		10,868		10,304
Africa and Middle East		1,814		741		110		2,665		1		43		16		60		16		31		1,362		1,409		4,134		3,939
Other (1)		-		5		24		29		279		-		4,597		4,876		2		-		1,025		1,027		5,932		5,205
Total		9,772		18,154		518		28,444		1,628		329		11,193		13,150		1,343		1,219		2,815		5,377		46,971		49,239

 (1) Primarily exposure to supranational entities.

Caution

This Risk Management section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

Market Risk

BMO’s market risk management practices and key measures are outlined in the Market Risk section of BMO’s 2024 Annual Report.

Linkages between Balance Sheet Items and Market Risk Disclosures

The table below presents items reported in our Consolidated Balance Sheet that are subject to market risk, comprising balances that are subject to either traded risk or non-traded risk measurement techniques.

TABLE 27
	As at January 31, 2025							As at October 31, 2024
		Consolidated Balance Sheet		Subject to market risk			Not subject to market risk		Consolidated Balance Sheet		Subject to market risk			Not subject to market risk	Primary risk factors for non-traded risk balances
(Canadian $ in millions)			Traded risk (1)		Non-traded risk (2)					Traded risk (1)		Non-traded risk (2)
Assets Subject to Market Risk
Cash and cash equivalents		76,460		-		76,460	-		65,098		-		65,098	-	Interest rate
Interest bearing deposits with banks		3,339		191		3,148	-		3,640		201		3,439	-	Interest rate
Securities		411,068		162,264		248,804	-		396,880		153,833		243,047	-	Interest rate, credit spread, equity
Securities borrowed or purchased under resale agreements		110,632		-		110,632	-		110,907		-		110,907	-	Interest rate
Loans and acceptances (net of allowance for credit losses)		688,714		4,842		683,872	-		678,016		6,085		671,931	-	Interest rate, foreign exchange
Derivative instruments		52,513		47,445		5,068	-		47,253		42,879		4,374	-	Interest rate, foreign exchange
Customer’s liabilities under acceptances		521		-		521	-		359		-		359	-	Interest rate
Other assets		124,846		14,198		13,055	97,593		107,494		9,783		11,001	86,710	Interest rate
Total assets		1,468,093		228,940		1,141,560	97,593		1,409,647		212,781		1,110,156	86,710
Liabilities Subject to Market Risk
Deposits		996,832		48,382		948,450	-		982,440		45,223		937,217	-	Interest rate, foreign exchange
Derivative instruments		66,353		61,403		4,950	-		58,303		54,713		3,590	-	Interest rate, foreign exchange
Acceptances		521		-		521	-		359		-		359	-	Interest rate
Securities sold but not yet purchased		44,047		44,047		-	-		35,030		35,030		-	-	Interest rate
Securities lent or sold under repurchase agreements		122,585		-		122,585	-		110,791		-		110,791	-	Interest rate
Other liabilities		141,601		-		83,925	57,676		130,061		-		78,583	51,478	Interest rate
Subordinated debt		8,554		-		8,554	-		8,377		-		8,377	-	Interest rate
Total liabilities		1,380,493		153,832		1,168,985	57,676		1,325,361		134,966		1,138,917	51,478

 (1) Primarily comprises balance sheet items that are subject to the trading and underwriting risk management framework and recorded at fair value through profit or loss.

 (2) Primarily comprises balance sheet items that are subject to the structural balance sheet insurance risk management framework and secured financing transactions.

 Certain comparative figures have been reclassified to conform with the current period’s presentation.

32 BMO Financial Group First Quarter Report 2025

Trading Market Risk Measures

Average Total Trading Value at Risk (VaR) increased quarter-over-quarter, primarily due to higher equity exposures, partially offset by lower interest rate exposures.

Total Trading Value at Risk ⁽¹⁾

TABLE 28
	For the quarter ended January 31, 2025										October 31, 2024			January 31, 2024
	Quarter-end			Average			High		Low		Average			Average
Commodity VaR		6.2			3.4			6.5		2.0		4.1			3.2
Equity VaR		30.7			26.1			31.6		17.4		18.2			13.6
Foreign exchange VaR		1.6			1.6			2.6		0.8		1.5			1.3
Interest rate VaR (2)		23.2			29.2			41.9		22.1		32.7			29.5
Diversification		(22.8	)		(21.0	)		nm		nm		(24.4	)		(17.7	)
Total Trading VaR		38.9			39.3			45.4		31.7		32.1			29.9

  (1) One-day measure using a 99% confidence interval. Gains are presented in brackets and losses are presented as positive numbers.

 (2) Interest rate VaR includes general credit spread risk.

 nm – not meaningful

Structural (Non-Trading) Market Risk

Our structural market risk strategy and profile remains consistent with prior periods. The net balance sheet is fully invested in an intermediate duration target interest rate profile. Structural economic value exposure to rising rates and benefit to falling rates increased relative to October 31, 2024, primarily due to modelled deposit pricing being more rate-sensitive at higher projected interest rate levels following the increase in U.S. term market rates during the current quarter.

Structural earnings benefit to rising interest rates and exposure to falling interest rates remained relatively unchanged, relative to October 31, 2024.

Structural Interest Rate Sensitivity ^{(1) (2)}

TABLE 29
	Economic value sensitivity															Earnings sensitivity over the next 12 months
(Pre-tax Canadian $ equivalent in millions)							January 31, 2025			October 31, 2024			January 31, 2024									January 31, 2025			October 31, 2024			January 31, 2024
	Canada (3)			United States			Total			Total			Total			Canada (3)			United States			Total			Total			Total
100 basis point increase		(740	)		(887	)		(1,627	)		(1,483	)		(1,598	)		72			285			357			367			278
100 basis point decrease		659			182			842			660			968			(38	)		(198	)		(236	)		(210	)		(296	)

 (1) Losses are presented in brackets and gains are presented as positive numbers.

 (2) Interest rate sensitivities assume an immediate and sustained parallel shift in assumed interest rates across the entire yield curve as at the end of the period, using a constant balance sheet.

 (3) Includes Canadian dollar and other currencies.

Insurance Market Risk

Insurance market risk includes interest rate and equity market risk arising from the activities of our BMO Insurance business. We entered into hedging arrangements to mitigate the impact of changes in interest rates on our earnings. The impact of insurance market risk on earnings is reflected in insurance investment results on our Consolidated Statement of Income. The impact of insurance market risk is not reflected in the Structural Interest Rate Sensitivity table above.

The table below reflects the estimated immediate impact on, or sensitivity of, our income before tax to changes in interest rates, including the estimated impact of the above hedging arrangements, and our exposure to equity price risk arising from our investment in equity securities.

TABLE 30
(Pre-tax Canadian $ in millions)					As at January 31, 2025			As at October 31, 2024
Interest Rate Sensitivity (1) (2)
50 basis point increase						3			6
50 basis point decrease						(3	)		(9	)
Equity Market Sensitivity (3)
10% increase						28			28
10% decrease						(29	)		(26	)

 (1) Estimated impact on, or sensitivity of, income before tax to a 50 basis point increase or decrease in interest rates.

 (2) Interest rate sensitivities assume a parallel shift in assumed interest rates across the entire yield curve as at the end of the period with no change in the ultimate risk-free rate.

 (3) Estimated impact on, or sensitivity of, income before tax to a 10% increase or decrease in our exposure to equity price risk arising from our investment in equity securities at the reporting date, assuming all other variables remain constant.

Caution

This Market Risk section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

BMO Financial Group First Quarter Report 2025 33

Liquidity and Funding Risk

Liquidity and funding risk is managed under a robust risk management framework. There were no material changes in the framework during the quarter.

BMO continued to maintain a strong liquidity position in the first quarter of 2025, with increases in customer loans and deposits and wholesale funding, primarily driven by the impact of the stronger U.S. dollar. BMO’s liquidity metrics, including the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), remained well above internal targets and regulatory requirements.

BMO’s liquid assets are primarily held in our trading businesses, as well as in liquidity portfolios that are maintained for contingent liquidity risk management purposes and as investments of excess structural liquidity. Liquid assets include unencumbered, high-quality assets that are marketable, can be pledged as security for borrowings, and can be converted to cash in a time frame that meets our liquidity and funding requirements. BMO’s liquid assets are summarized in the table below.

In the normal course of business, we may encumber a portion of cash and securities holdings as collateral in support of trading activities and participation in clearing and payment systems in Canada, the United States and abroad. In addition, we may receive liquid assets as collateral and may re-pledge these assets in exchange for cash or as collateral in support of trading activities. Net unencumbered liquid assets, defined as on-balance sheet assets, such as BMO-owned cash and securities and securities borrowed or purchased under resale agreements, plus other off-balance sheet eligible collateral received, less assets encumbered as collateral, totalled $395.0 billion as at January 31, 2025, compared with $396.3 billion as at October 31, 2024. The decrease in unencumbered liquid assets was primarily due to lower securities balances partially offset by higher cash balances.

Net unencumbered liquid assets are primarily held at the parent bank level, at BMO Bank N.A., and in our broker/dealer operations. In addition to liquid assets, BMO has access to the Bank of Canada’s lending assistance programs, the Federal Reserve Bank discount window in the United States, the Bank of England’s Sterling Monetary Framework, and European Central Bank standby liquidity facilities. We do not consider central bank facilities as a source of available liquidity when assessing the soundness of our liquidity position.

In addition to cash and securities holdings, we may also pledge other assets, including mortgages and loans, to raise long-term secured funding. BMO’s total encumbered assets and unencumbered liquid assets are summarized in the Asset Encumbrance table.

Liquid Assets

TABLE 31
	As at January 31, 2025										As at October 31, 2024
(Canadian $ in millions)	Bank-owned assets		Other cash & securities received		Total gross assets (1)		Encumbered assets		Net unencumbered assets (2)		Net unencumbered assets (2)
Cash and cash equivalents		76,460		-		76,460		93		76,367		65,018
Deposits with other banks		3,339		-		3,339		-		3,339		3,640
Securities and securities borrowed or purchased under resale agreements
Sovereigns/Central banks/Multilateral development banks		184,172		103,320		287,492		147,933		139,559		150,126
NHA mortgage-backed securities and U.S. agency mortgage-backed securities and collateralized mortgage obligations		118,770		11,319		130,089		63,078		67,011		61,729
Corporate and other debt		38,925		22,436		61,361		15,396		45,965		43,722
Corporate equity		69,201		61,560		130,761		88,497		42,264		52,329
Total securities and securities borrowed or purchased under resale agreements		411,068		198,635		609,703		314,904		294,799		307,906
NHA mortgage-backed securities (reported as loans at amortized cost) (3)		25,824		-		25,824		5,295		20,529		19,774
Total liquid assets		516,691		198,635		715,326		320,292		395,034		396,338

 (1) Gross assets include bank-owned assets and cash and securities received from third parties.

 (2) Net unencumbered assets are defined as total gross assets less encumbered assets.

 (3) Under IFRS, National Housing Act (NHA) mortgage-backed securities that include mortgages owned by BMO as the underlying collateral are classified as loans. Unencumbered NHA mortgage-backed securities have liquidity value and are included as liquid assets under BMO’s Liquidity and Funding Risk Management Framework. This amount is shown as a separate line item, NHA mortgage-backed securities.

34 BMO Financial Group First Quarter Report 2025

Asset Encumbrance

TABLE 32
			Encumbered (2)				Net unencumbered
(Canadian $ in millions) As at January 31, 2025	Total gross assets (1)		Pledged as collateral		Other encumbered		Other unencumbered (3)		Available as collateral (4)
Cash and deposits with other banks		79,799		-		93		-		79,706
Securities (5)		635,527		249,990		70,209		25,855		289,473
Loans		662,890		67,558		1,728		439,422		154,182
Other assets
Derivative instruments		52,513		-		-		52,513		-
Customers’ liability under acceptances		521		-		-		521		-
Premises and equipment		6,312		-		-		6,312		-
Goodwill		17,485		-		-		17,485		-
Intangible assets		5,002		-		-		5,002		-
Current tax assets		2,105		-		-		2,105		-
Deferred tax assets		2,916		-		-		2,916		-
Receivable from brokers, dealers and clients		38,057		-		-		38,057		-
Other		52,969		15,136		-		37,833		-
Total other assets		177,880		15,136		-		162,744		-
Total assets		1,556,096		332,684		72,030		628,021		523,361
			Encumbered (2)				Net unencumbered
(Canadian $ in millions) As at October 31, 2024	Total gross assets (1)		Pledged as collateral		Other encumbered		Other unencumbered (3)		Available as collateral (4)
Cash and deposits with other banks		68,738		-		80		-		68,658
Securities (5)		617,217		233,907		55,630		24,824		302,856
Loans		652,750		69,615		1,804		427,863		153,468
Other assets
Derivative instruments		47,253		-		-		47,253		-
Customers’ liability under acceptances		359		-		-		359		-
Premises and equipment		6,249		-		-		6,249		-
Goodwill		16,774		-		-		16,774		-
Intangible assets		4,925		-		-		4,925		-
Current tax assets		2,219		-		-		2,219		-
Deferred tax assets		3,024		-		-		3,024		-
Receivable from brokers, dealers and clients		31,916		-		-		31,916		-
Other		42,387		10,314		-		32,073		-
Total other assets		155,106		10,314		-		144,792		-
Total assets		1,493,811		313,836		57,514		597,479		524,982

 (1) Gross assets includes on-balance sheet and off-balance sheet assets.

 (2) Pledged as collateral refers to the portion of on-balance sheet assets and other cash and securities that is pledged through repurchase agreements, securities lending, derivative contracts and requirements associated with participation in clearing houses and payment systems. Other encumbered assets include assets that are restricted for legal or other reasons, such as minimum required deposits at central banks, short sales and certain U.S. agency securities that have been sold to third parties but are consolidated under IFRS.

 (3) Other unencumbered assets include select liquid asset holdings that management believes are not readily available to support BMO’s liquidity requirements. These include securities of $25.9 billion as at January 31, 2025, and include securities held at BMO’s insurance subsidiary, seller financing securities and certain investments held at our merchant banking business. Other unencumbered assets include mortgages and loans that may be securitized to access secured funding.

 (4) Loans included in available as collateral represent loans currently lodged at central banks that may be used to access central bank funding. Loans available for pledging as collateral do not include other sources of additional liquidity that may be realized from BMO’s loan portfolio, such as incremental securitization, covered bond issuances and U.S. Federal Home Loan Bank (FHLB) advances.

 (5) Includes securities, securities borrowed or purchased under resale agreements and NHA mortgage-backed securities (reported as loans at amortized cost).

Net Unencumbered Liquid Assets by Legal Entity

TABLE 33
(Canadian $ in millions)	As at January 31, 2025		As at October 31, 2024
BMO (parent)		239,323		240,796
BMO Bank N.A.		132,135		128,521
Broker dealers		23,576		27,021
Total net unencumbered liquid assets by legal entity		395,034		396,338

Funding Strategy

BMO’s funding strategy requires that secured and unsecured wholesale funding used to support loans and less liquid assets must have a term (typically maturing in two to ten years) that will support the effective term to maturity of these assets. Secured and unsecured wholesale funding for liquid trading assets is largely shorter term (maturing in one year or less), aligned with the liquidity of the assets being funded, and is subject to limits on aggregate maturities that are permitted across different periods. Supplemental liquidity pools are funded largely with wholesale term funding.

We maintain a large and stable base of customer deposits that, in combination with our strong capital position, is a source of strength. This supports the maintenance of a sound liquidity position and reduces reliance on wholesale funding. Customer deposits totalled $722.7 billion as at January 31, 2025, increasing from $711.7 billion as at October 31, 2024, primarily driven by the impact of the stronger U.S. dollar.

Total secured and unsecured wholesale funding outstanding, which largely consists of negotiable marketable securities, was $263.4 billion as at January 31, 2025, with $70.1 billion sourced as secured funding and $193.2 billion sourced as unsecured funding. Wholesale funding outstanding increased from $259.0 billion as at October 31, 2024, primarily due to the impact of the stronger U.S. dollar. The mix and maturities of BMO’s wholesale term funding are outlined in the following table. Additional information on deposit maturities can be found in the Contractual Maturities of Assets and Liabilities and Off-Balance Sheet Commitments section. We maintain a sizeable portfolio of unencumbered liquid assets, totalling $395.0 billion as at January 31, 2025, that can be monetized to meet potential funding requirements, as described in the Unencumbered Liquid Assets section above.

BMO Financial Group First Quarter Report 2025 35

Wholesale Funding Maturities ⁽¹⁾

TABLE 34
	As at January 31, 2025																As at October 31, 2024
(Canadian $ in millions)	Less than 1 month		1 to 3   months		3 to 6   months		6 to 12   months		Subtotal less than 1 year		1 to 2   years		Over   2 years		Total		Total
Deposits from banks		2,166		1,230		824		667		4,887		-		-		4,887		5,599
Certificates of deposit and commercial paper		4,910		22,056		31,814		33,836		92,616		617		-		93,233		90,349
Bearer deposit notes		883		1,432		423		582		3,320		-		-		3,320		4,638
Asset-backed commercial paper (ABCP)		2,112		5,200		3,065		1,661		12,038		-		-		12,038		9,612
Senior unsecured medium-term notes		1,500		1,618		7,379		6,527		17,024		12,695		37,219		66,938		67,913
Senior unsecured structured notes (2)		282		78		162		344		866		683		14,755		16,304		14,621
Secured funding
Mortgage and HELOC securitizations		-		909		1,320		943		3,172		2,549		13,419		19,140		18,187
Covered bonds		-		-		3,629		2,794		6,423		14,249		6,485		27,157		26,969
Other asset-backed securitizations (3)		-		-		-		845		845		1,467		4,627		6,939		7,116
Federal Home Loan Bank advances		-		-		-		1,524		1,524		1,887		1,452		4,863		5,633
Subordinated debt		-		-		-		25		25		-		8,528		8,553		8,403
Total		11,853		32,523		48,616		49,748		142,740		34,147		86,485		263,372		259,040
Of which:
Secured		2,112		6,109		8,014		7,767		24,002		20,152		25,983		70,137		67,517
Unsecured		9,741		26,414		40,602		41,981		118,738		13,995		60,502		193,235		191,523
Total (4)		11,853		32,523		48,616		49,748		142,740		34,147		86,485		263,372		259,040

 (1) Wholesale unsecured funding primarily includes funding raised through the issuance of negotiable marketable securities. Wholesale funding excludes repo transactions which are disclosed in the Contractual Maturities of Assets and Liabilities and Off-Balance Sheet Commitments section, and also excludes ABCP issued by certain ABCP conduits that are not consolidated for financial reporting purposes.

 (2) Includes structured notes issued to institutional investors and exchange-traded notes.

 (3) Includes credit card, auto and transportation finance loan securitizations.

 (4) Total wholesale funding comprised Canadian-dollar-denominated funding totalling $52.3 billion and U.S.-dollar-denominated and other foreign-currency-denominated funding totalling $211.1 billion as at January 31, 2025.

 Certain comparative figures have been reclassified to conform with the current period’s presentation.

Diversification of our wholesale funding sources is an important part of our overall liquidity management strategy. BMO’s wholesale funding activities are well-diversified by jurisdiction, currency, investor segment, instrument type and maturity profile. BMO maintains ready access to long-term wholesale funding through various borrowing programs, including a European Note Issuance Program, Canadian, Australian and U.S. Medium-Term Note programs, Canadian and U.S. mortgage securitizations, Canadian credit card loans, auto loans and home equity line of credit (HELOC) securitizations, covered bonds, and Canadian and U.S. senior unsecured deposits.

Our wholesale funding plan seeks to ensure sufficient funding capacity is available to execute our business strategies. The funding plan considers expected maturities, as well as asset and liability growth projected for our businesses in our forecasting and planning processes, and assesses funding needs in relation to the sources available. The funding plan is reviewed annually by the senior management committees with specific related responsibilities and approved by the Risk Review Committee, and is regularly updated to reflect actual results and incorporate updated forecast information.

Additional information on Liquidity and Funding Risk governance can be found in the Liquidity and Funding Risk section of BMO’s 2024 Annual Report. Please also see the Risk Management section.

Credit Ratings

The credit ratings assigned to BMO’s short-term and senior long-term debt securities by external rating agencies are important in raising both capital and funding to support the bank’s business operations. Maintaining strong credit ratings allows us to access the wholesale markets at competitive pricing levels. Should BMO’s credit ratings experience a downgrade, our cost of funding may increase and our access to funding and capital through the wholesale markets could be constrained. A material downgrade of BMO’s ratings could also have other consequences, including those set out in Note 8 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report.

The credit ratings assigned to BMO’s senior debt by rating agencies are indicative of high-grade, high-quality issues.

TABLE 35
As at January 31, 2025
Rating agency (1)	Short-term debt	Senior debt (2)	Long-term deposits / Legacy senior debt (3)	Subordinated debt (NVCC)	Outlook
Moody’s	P-1	A2	Aa2	Baa1 (hyb)	Stable
S&P	A-1	A-	A+	BBB+	Stable
Fitch	F1+	AA-	AA	A	Stable
DBRS	R-1 (high)	AA (low)	AA	A (low)	Stable

 (1) Credit ratings are not recommendations to purchase, hold or sell a financial obligation and do not address the market price or suitability for a particular investor. Ratings are subject to revision or withdrawal at any time by the rating organization.

 (2) Subject to conversion under the Bank Recapitalization (Bail-In) Regime.

 (3) Long-term deposits / Legacy senior debt includes senior debt issued prior to September 23, 2018 and senior debt issued on or after September 23, 2018 that is excluded from the Bank Recapitalization (Bail-In) Regime.

We are required to deliver collateral to certain counterparties in the event of a downgrade of BMO’s current credit rating. The incremental collateral required is based on mark-to-market exposure, collateral valuations and collateral threshold arrangements, as applicable. As at January 31, 2025, we would be required to provide additional collateral to counterparties totalling $221 million, $532 million and $1,076 million, as a result of a one-notch, two-notch and three-notch downgrade, respectively.

36 BMO Financial Group First Quarter Report 2025

Liquidity Coverage Ratio

The Liquidity Coverage Ratio (LCR) is calculated in accordance with OSFI’s LAR Guideline and is summarized in the following table. The LCR is calculated on a daily basis as the ratio of the stock of High-Quality Liquid Assets (HQLA) held to total net stressed cash outflows over the next 30 calendar days. BMO’s HQLA primarily comprises cash, highly-rated debt issued or backed by governments, highly-rated covered bonds and non-financial corporate debt, and non-financial equities that are part of a major stock index. Net cash flows include outflows from deposits, secured and unsecured wholesale funding, commitments and potential collateral requirements, offset by permitted inflows from loans, securities lending activities and other non-HQLA debt maturing over a 30-day horizon. Weightings prescribed by OSFI are applied to cash flows and HQLA to arrive at the weighted values and the LCR. The LCR does not reflect liquidity in BMO Financial Corp. (BFC) in excess of 100%, because of limitations on the transfer of liquidity between BFC and the parent bank. Canadian domestic systemically important banks (D-SIBs), including BMO, are required to maintain a minimum LCR of 100%. The average daily LCR for the quarter ended January 31, 2025 was 128%, equivalent to a surplus of $56.3 billion above the regulatory minimum. The LCR decreased 4% from 132% in the prior quarter, as higher HQLA was more than offset by an increase in net cash outflows. While banks are required to maintain an LCR of greater than 100% in normal conditions, they are also expected to be able to utilize HQLA during a period of stress, which may result in an LCR of less than 100% during such a period. The LCR is only one measure of a bank’s liquidity position and does not fully capture all of its liquid assets or the funding alternatives that may be available during a period of stress. BMO’s total liquid assets are shown in the Liquid Assets table.

TABLE 36
	For the quarter ended January 31, 2025
(Canadian $ in billions, except as noted)	Total unweighted value (average) (1) (2)		Total weighted value (average) (2) (3)
High-Quality Liquid Assets
Total high-quality liquid assets (HQLA)		*		259.5
Cash Outflows
Retail deposits and deposits from small business customers, of which:		311.0		22.3
Stable deposits		143.0		4.3
Less stable deposits		168.0		18.0
Unsecured wholesale funding, of which:		329.6		145.5
Operational deposits (all counterparties) and deposits in networks of cooperative banks		161.2		39.9
Non-operational deposits (all counterparties)		147.4		84.6
Unsecured debt		21.0		21.0
Secured wholesale funding		*		24.2
Additional requirements, of which:		257.8		54.0
Outflows related to derivatives exposures and other collateral requirements		36.6		8.9
Outflows related to loss of funding on debt products		2.6		2.6
Credit and liquidity facilities		218.6		42.5
Other contractual funding obligations		0.6		-
Other contingent funding obligations		561.8		12.5
Total cash outflows		-		258.5
Cash Inflows
Secured lending (e.g., reverse repos)		164.1		24.9
Inflows from fully performing exposures		18.6		10.3
Other cash inflows		20.1		20.1
Total cash inflows		202.8		55.3
For the quarter ended January 31, 2025			Total adjusted value (4)
Total HQLA				259.5
Total net cash outflows				203.2
Liquidity Coverage Ratio (%) (2)				128
For the quarter ended October 31, 2024			Total adjusted value (4)
Total HQLA				253.4
Total net cash outflows				192.4
Liquidity Coverage Ratio (%)				132

* Disclosure is not required under the LCR disclosure standard.

(1) Unweighted values are calculated at market value (for HQLA) or as outstanding balances maturing or callable within 30 days (for inflows and outflows).

(2) Values are calculated based on the simple average of the daily LCR over 62 business days in the first quarter of 2025.

(3) Weighted values are calculated after the application of the weights prescribed under OSFI’s LAR Guideline for HQLA and cash inflows and outflows.

(4) Adjusted values are calculated based on total weighted values after applicable caps, as defined by the LAR Guideline.

BMO Financial Group First Quarter Report 2025 37

Net Stable Funding Ratio

The Net Stable Funding Ratio (NSFR) is a regulatory liquidity metric that assesses the stability of a bank’s funding profile in relation to the liquidity value of its assets and is calculated in accordance with OSFI’s LAR Guideline. Unlike the LCR, which is a short-term metric, the NSFR assesses a bank’s medium-term and long-term resilience. The NSFR is defined as the ratio of the amount of available stable funding (ASF) to the amount of required stable funding (RSF). ASF represents the proportion of own and third-party resources that are expected to be reliably available over a one-year horizon (including customer deposits, long-term wholesale funding, and capital). The stable funding requirements for each institution are set by OSFI based on the liquidity and maturity characteristics of its on-balance sheet assets and off-balance sheet exposures. Weightings prescribed by OSFI are applied to notional asset and liability balances to determine ASF and RSF and the NSFR. Canadian domestic systemically important banks (D-SIBs), including BMO, are required to maintain a minimum NSFR of 100%. BMO’s NSFR was 116% as at January 31, 2025, equivalent to a surplus of $111.6 billion above the regulatory minimum. The NSFR decreased from 117% in the prior quarter, as higher available stable funding was more than offset by an increase in required stable funding.

TABLE 37
	For the quarter ended January 31, 2025
	Unweighted Value by Residual Maturity								Weighted Value (2)
(Canadian $ in billions, except as noted)	No maturity (1)		Less than 6 months		6 to 12 months		Over 1 year
Available Stable Funding (ASF) Item
Capital:		-		-		-		98.7		98.7
Regulatory capital		-		-		-		98.7		98.7
Other capital instruments		-		-		-		-		-
Retail deposits and deposits from small business customers:		239.6		70.0		42.6		65.6		382.4
Stable deposits		121.1		27.6		17.4		14.4		172.2
Less stable deposits		118.5		42.4		25.2		51.2		210.2
Wholesale funding:		324.9		288.3		69.9		107.9		292.4
Operational deposits		150.4		-		-		-		75.2
Other wholesale funding		174.5		288.3		69.9		107.9		217.2
Liabilities with matching interdependent assets		-		1.3		0.9		14.8		-
Other liabilities:		3.2		*		*		89.3		26.8
NSFR derivative liabilities		*		*		*		6.8		*
All other liabilities and equity not included in the above categories		3.2		54.9		1.5		26.1		26.8
Total ASF		*		*		*		*		800.3
Required Stable Funding (RSF) Item
Total NSFR high-quality liquid assets (HQLA)		*		*		*		*		17.5
Deposits held at other financial institutions for operational purposes		-		0.1		-		-		0.1
Performing loans and securities:		202.7		214.0		76.3		363.1		540.6
Performing loans to financial institutions secured by Level 1 HQLA		-		97.5		2.9		-		3.4
Performing loans to financial institutions secured by non-Level 1 HQLA and unsecured performing loans to financial institutions		35.0		57.6		9.5		19.5		65.8
Performing loans to non-financial corporate clients, loans to retail and small business customers, and loans to sovereigns, central banks and public sector entities, of which:		122.5		41.1		43.2		173.6		291.4
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk		-		-		-		-		-
Performing residential mortgages, of which:		13.5		14.8		20.4		141.0		126.7
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit risk		13.5		14.8		20.4		141.0		126.7
Securities that are not in default and do not qualify as HQLA, including exchange-traded equities		31.7		3.0		0.3		29.0		53.3
Assets with matching interdependent liabilities		-		1.3		0.9		14.8		-
Other assets:		53.7		*		*		117.4		107.9
Physical traded commodities, including gold		13.8		*		*		*		11.7
Assets posted as initial margin for derivative contracts and contributions to default funds of central clearing parties		*		*		*		17.9		15.2
NSFR derivative assets		*		*		*		3.9		-
NSFR derivative liabilities before deduction of variation margin posted		*		*		*		19.2		1.0
All other assets not included in the above categories		39.9		45.4		0.4		30.6		80.0
Off-balance sheet items		*		*		*		642.7		22.6
Total RSF		*		*		*		*		688.7
Net Stable Funding Ratio (%)		*		*		*		*		116
For the quarter ended October 31, 2024									Weighted Value (2)
Total ASF										788.7
Total RSF										673.3
Net Stable Funding Ratio (%)										117

 * Disclosure is not required under the NSFR disclosure standard.

 (1) Items in the no maturity column do not have a stated maturity. These may include, but are not limited to, non-maturity deposits, short positions, open maturity positions, non-HQLA equities, physical traded commodities and demand loans.

 (2) Weighted values are calculated after the application of the weights prescribed under the OSFI LAR Guideline for ASF and RSF.

38 BMO Financial Group First Quarter Report 2025

Contractual Maturities of Assets and Liabilities and Off-Balance Sheet Commitments

The tables below show the remaining contractual maturities of on-balance sheet assets and liabilities and off-balance sheet commitments. The contractual maturity of financial assets and liabilities is an input to, but is not necessarily consistent with, the expected maturity of assets and liabilities that is used in the management of liquidity and funding risk. We forecast asset and liability cash flows, under both normal market conditions and a number of stress scenarios, to manage liquidity and funding risk. Stress scenarios incorporate assumptions for loan repayments, deposit withdrawals, and credit commitment and liquidity facility drawdowns by counterparty and product type. Stress scenarios also consider the time horizon over which liquid assets can be monetized and the related discounts (“haircuts”) and potential collateral requirements that may arise from both market volatility and credit rating downgrades, among other assumptions.

TABLE 38
																	January 31, 2025
(Canadian $ in millions)	0 to 1 month		1 to 3 months		3 to 6 months		6 to 9 months		9 to 12 months		1 to 2 years		2 to 5 years		Over 5 years		No maturity			Total
On-Balance Sheet Financial Instruments
Assets
Cash and cash equivalents		74,130		-		-		-		-		-		-		-		2,330			76,460
Interest bearing deposits with banks		2,541		682		92		7		1		16		-		-		-			3,339
Securities		4,338		7,575		9,436		9,775		6,603		39,491		81,739		182,910		69,201			411,068
Securities borrowed or purchased under resale agreements		87,165		15,365		5,284		1,829		989		-		-		-		-			110,632
Loans (1)
Residential mortgages		1,770		3,971		6,678		8,942		10,661		50,332		76,216		35,563		160			194,293
Consumer instalment and other personal		500		1,072		1,714		2,598		2,867		14,602		23,394		19,491		26,818			93,056
Credit cards		-		-		-		-		-		-		-		-		13,520			13,520
Business and government		10,219		15,449		20,162		18,048		17,399		59,588		109,202		36,104		106,466			392,637
Allowance for credit losses		-		-		-		-		-		-		-		-		(4,792	)		(4,792	)
Total loans, net of allowance		12,489		20,492		28,554		29,588		30,927		124,522		208,812		91,158		142,172			688,714
Other assets
Derivative instruments		6,347		10,624		4,048		2,478		4,001		6,898		9,809		8,308		-			52,513
Customers’ liability under acceptances		521		-		-		-		-		-		-		-		-			521
Receivable from brokers, dealers and clients		38,057		-		-		-		-		-		-		-		-			38,057
Other		3,863		763		1,195		33		11		18		13		8,090		72,803			86,789
Total other assets		48,788		11,387		5,243		2,511		4,012		6,916		9,822		16,398		72,803			177,880
Total assets		229,451		55,501		48,609		43,710		42,532		170,945		300,373		290,466		286,506			1,468,093
TABLE 39
																	January 31, 2025
(Canadian $ in millions)	0 to 1 month		1 to 3 months		3 to 6 months		6 to 9 months		9 to 12 months		1 to 2 years		2 to 5 years		Over 5 years		No maturity			Total
Liabilities and Equity
Deposits (2) (3)		38,309		64,577		87,567		53,592		58,632		56,687		80,938		28,712		527,818			996,832
Other liabilities
Derivative instruments		7,732		15,369		5,473		3,447		4,393		8,085		11,212		10,642		-			66,353
Acceptances		521		-		-		-		-		-		-		-		-			521
Securities sold but not yet purchased (4)		44,047		-		-		-		-		-		-		-		-			44,047
Securities lent or sold under repurchase agreements (4)		102,050		16,725		759		5		-		3,046		-		-		-			122,585
Securitization and structured entities’ liabilities		-		1,011		2,222		151		2,385		2,974		9,876		28,175		-			46,794
Insurance-related liabilities		81		92		19		18		32		86		206		737		18,270			19,541
Payable to brokers, dealers and clients		41,284		-		-		-		-		-		-		-		-			41,284
Other		11,724		746		910		1,686		1,310		2,906		2,619		2,828		9,253			33,982
Total other liabilities		207,439		33,943		9,383		5,307		8,120		17,097		23,913		42,382		27,523			375,107
Subordinated debt		-		-		-		-		-		25		25		8,504		-			8,554
Total equity		-		-		-		-		-		-		-		-		87,600			87,600
Total liabilities and equity		245,748		98,520		96,950		58,899		66,752		73,809		104,876		79,598		642,941			1,468,093

 (1) Loans receivable on demand have been included under no maturity.

 (2) Deposits payable on demand and payable after notice have been included under no maturity.

 (3) Deposits totalling $29,063 million as at January 31, 2025, have a fixed maturity date; however, they can be redeemed early (either fully or partially) by customers without penalty. These are classified as payable on a fixed date due to their stated contractual maturity date.

 (4) These are presented based on their earliest maturity date.

TABLE 40
																	January 31, 2025
(Canadian $ in millions)	0 to 1 month		1 to 3 months		3 to 6 months		6 to 9 months		9 to 12 months		1 to 2 years		2 to 5 years		Over 5 years		No  maturity			Total
Off-Balance Sheet Commitments
Commitments to extend credit (1)		1,900		6,905		17,069		13,373		13,033		51,646		134,511		7,315		-			245,752
Letters of credit (2)		2,746		4,431		7,255		5,267		6,917		2,157		4,041		35		-			32,849
Backstop liquidity facilities		-		308		2,158		1,539		881		10,883		1,645		849		-			18,263
Other commitments (3)		99		80		127		129		228		537		830		452		-			2,482

 (1) Commitments to extend credit exclude personal lines of credit and credit cards that are unconditionally cancellable at BMO’s discretion. A large majority of these commitments expire without being drawn upon. As a result, the total contractual amounts may not be representative of the funding likely to be required for these commitments.

 (2) Letters of credit can be drawn down at any time. These are classified based on their stated contractual maturity.

 (3) Other commitments comprise purchase obligations and lease commitments for leases signed but not yet commenced.

BMO Financial Group First Quarter Report 2025 39

TABLE 41
																	October 31, 2024
(Canadian $ in millions)	0 to 1 month		1 to 3 months		3 to 6 months		6 to 9 months		9 to 12 months		1 to 2 years		2 to 5 years		Over 5 years		No maturity			Total
On-Balance Sheet Financial Instruments
Assets
Cash and cash equivalents		62,827		-		-		-		-		-		-		-		2,271			65,098
Interest bearing deposits with banks		2,513		628		481		18		-		-		-		-		-			3,640
Securities		6,787		14,011		7,840		6,707		9,720		21,264		84,775		172,886		72,890			396,880
Securities borrowed or purchased under resale agreements		85,185		16,803		5,701		2,330		888		-		-		-		-			110,907
Loans (1)
Residential mortgages		1,683		3,284		6,413		6,653		9,252		52,489		77,867		33,227		212			191,080
Consumer instalment and other personal		581		974		1,703		1,827		2,671		14,815		24,595		18,830		26,691			92,687
Credit cards		-		-		-		-		-		-		-		-		13,612			13,612
Business and government		8,647		14,418		16,461		19,448		21,828		63,613		105,740		32,444		102,394			384,993
Allowance for credit losses		-		-		-		-		-		-		-		-		(4,356	)		(4,356	)
Total loans, net of allowance		10,911		18,676		24,577		27,928		33,751		130,917		208,202		84,501		138,553			678,016
Other assets
Derivative instruments		5,573		7,996		7,211		2,482		1,660		6,365		8,374		7,592		-			47,253
Customers’ liability under acceptances		359		-		-		-		-		-		-		-		-			359
Receivable from brokers, dealers and clients		31,916		-		-		-		-		-		-		-		-			31,916
Other		3,847		1,012		948		31		14		13		13		7,717		61,983			75,578
Total other assets		41,695		9,008		8,159		2,513		1,674		6,378		8,387		15,309		61,983			155,106
Total assets		209,918		59,126		46,758		39,496		46,033		158,559		301,364		272,696		275,697			1,409,647
TABLE 42
																	October 31, 2024
(Canadian $ in millions)	0 to 1 month		1 to 3 months		3 to 6 months		6 to 9 months		9 to 12 months		1 to 2 years		2 to 5 years		Over 5 years		No maturity			Total
Liabilities and Equity
Deposits (2) (3)		47,637		74,759		69,479		68,110		48,835		51,789		87,297		25,602		508,932			982,440
Other liabilities
Derivative instruments		6,769		10,541		10,828		3,311		2,160		6,470		9,112		9,112		-			58,303
Acceptances		359		-		-		-		-		-		-		-		-			359
Securities sold but not yet purchased (4)		35,030		-		-		-		-		-		-		-		-			35,030
Securities lent or sold under repurchase agreements (4)		99,364		7,777		721		106		1,016		1,807		-		-		-			110,791
Securitization and structured entities’ liabilities		44		981		1,072		2,183		152		4,353		9,913		21,466		-			40,164
Insurance-related liabilities		93		89		18		18		30		83		195		701		17,543			18,770
Payable to brokers, dealers and clients		34,407		-		-		-		-		-		-		-		-			34,407
Other		12,409		2,968		805		144		1,611		2,492		4,058		2,799		9,434			36,720
Total other liabilities		188,475		22,356		13,444		5,762		4,969		15,205		23,278		34,078		26,977			334,544
Subordinated debt		-		-		-		-		-		25		25		8,327		-			8,377
Total equity		-		-		-		-		-		-		-		-		84,286			84,286
Total liabilities and equity		236,112		97,115		82,923		73,872		53,804		67,019		110,600		68,007		620,195			1,409,647

 (1) Loans receivable on demand have been included under no maturity.

 (2) Deposits payable on demand and payable after notice have been included under no maturity.

 (3) Deposits totalling $29,136 million as at October 31, 2024, have a fixed maturity date; however, they can be redeemed early (either fully or partially) by customers without penalty. These are classified as payable on a fixed date due to their stated contractual maturity date.

 (4) These are presented based on their earliest maturity date.

TABLE 43
																	October 31, 2024
(Canadian $ in millions)	0 to 1 month		1 to 3 months		3 to 6 months		6 to 9 months		9 to 12 months		1 to 2 years		2 to 5 years		Over 5 years		No maturity			Total
Off-Balance Sheet Commitments
Commitments to extend credit (1)		3,720		5,220		10,229		16,052		16,284		47,054		130,664		7,048		-			236,271
Letters of credit (2)		2,109		5,235		6,113		6,761		6,163		2,310		3,689		36		-			32,416
Backstop liquidity facilities		283		213		213		3,408		1,132		3,047		9,110		818		-			18,224
Other commitments (3)		30		78		94		87		187		399		486		98		-			1,459

 (1) Commitments to extend credit exclude personal lines of credit and credit cards that are unconditionally cancellable at BMO’s discretion. A large majority of these commitments expire without being drawn upon. As a result, the total contractual amounts may not be representative of the funding likely to be required for these commitments.

 (2) Letters of credit can be drawn down at any time. These are classified based on their stated contractual maturity.

 (3) Other commitments comprise purchase obligations and lease commitments for leases signed but not yet commenced.

Caution

This Liquidity and Funding Risk section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.

40 BMO Financial Group First Quarter Report 2025

Glossary of Financial Terms

Adjusted Earnings and Measures are non-GAAP and exclude certain specified items from revenue, non-interest expense, provision for credit losses and income taxes that may not be reflective of ongoing business performance. Management considers both reported and adjusted results to be useful in assessing underlying ongoing performance, as set out in the Non-GAAP and Other Financial Measures section.

Allowance for Credit Losses represents an amount deemed appropriate by management to absorb credit-related losses on loans and acceptances and other credit instruments, in accordance with applicable accounting standards. Allowance on Performing Loans is maintained to cover impairment in the existing portfolio for loans that have not yet been individually identified as impaired. Allowance on Impaired Loans is maintained to reduce the carrying value of individually identified impaired loans to the expected recoverable amount.

Allowance for Credit Losses on Impaired Loans Ratio is calculated as the allowance for credit losses on impaired loans as a percentage of gross impaired loans and acceptances.

Assets under Administration and Assets under Management refers to assets administered or managed by a financial institution that are beneficially owned by clients and therefore not reported on the balance sheet of the administering or managing financial institution.

Asset-Backed Commercial Paper (ABCP) is backed by assets such as trade receivables, and is generally used for short-term financing needs.

Average Earning Assets represents the daily average balance of deposits at central banks, deposits with other banks, securities borrowed or purchased under resale agreements, securities, and loans over the period.

Bankers’ Acceptances (BAs) are bills of exchange or negotiable instruments drawn by a borrower for payment at maturity and accepted by a bank. BAs constitute a guarantee of payment by the issuer’s bank for a fee and can be traded in the money market.

Basis Point is one one-hundredth of a percentage point.

Book Value per Share represents common shareholders’ equity divided by the number of common shares at the end of a period.

Collateral is assets pledged as security to secure loans or other obligations.

Collateralized Mortgage Obligations (CMOs) are debt securities with multiple tranches, issued by structured entities and collateralized by a pool of mortgages. Each tranche offers different terms, interest rates, and risks.

Common Equity Tier 1 (CET1) Capital comprises common shareholders’ equity, including applicable contractual service margin, net of deductions for goodwill, intangible assets, pension assets, certain deferred tax assets and other items, which may include a portion of expected credit loss provisions or a shortfall in allowances or other specified items.

Common Equity Tier 1 (CET1) Ratio is calculated as CET1 Capital divided by risk-weighted assets. The CET1 Ratio is calculated in accordance with OSFI’s Capital Adequacy Requirements (CAR) Guideline.

Common Shareholders’ Equity is the most permanent form of capital. For regulatory capital purposes, common shareholders’ equity comprises common shareholders’ equity, net of capital deductions.

Contractual Service Margin (CSM) represents the unearned profit of a group of insurance contracts that we expect to recognize in the income statement as services provided.

Credit Valuation Adjustment (CVA) represents fair value adjustments to capture counterparty credit risk in our derivative valuations.

Derivatives are contracts, requiring no or little initial investment, with a value that is derived from movements in underlying interest or foreign exchange rates, equity or commodity prices or other indices. Derivatives are used to transfer, modify or reduce current or expected risks from changes in rates and prices.

Dividend Payout Ratio represents common share dividends as a percentage of net income available to common shareholders. It is calculated by dividing dividends per share by basic earnings per share.

Dividend Yield is calculated as dividends per common share divided by the closing share price.

Earnings per Share (EPS) is calculated by dividing net income available to common shareholders, after deducting preferred share dividends and distributions on other equity instruments, by the average number of common shares outstanding. Diluted EPS, which is BMO’s basis for measuring performance, adjusts for possible conversions of financial instruments into common shares if those conversions would reduce EPS.

Earnings Sensitivity is a measure of the impact of potential changes in interest rates on the projected 12-month pre-tax net income from a portfolio of assets, liabilities and off-balance sheet positions in response to prescribed parallel interest rate movements, with interest rates floored at zero.

Economic Capital is an expression of the enterprise’s capital demand requirement relative to its view of the economic risks in its underlying business activities. It represents management’s estimation of the likely magnitude of economic losses that could occur should severely adverse situations arise. Economic capital is calculated for various types of risk, including credit, market (trading and non-trading), operational non-financial, business and insurance, based on a one-year time horizon using a defined confidence level.

Economic Value Sensitivity is a measure of the impact of potential changes in interest rates on the market value of a portfolio of assets, liabilities and off-balance sheet positions in response to prescribed parallel interest rate movements, with interest rates floored at zero.

Effective Tax Rate is a percentage calculated as provision for income taxes divided by income before provision for income taxes.

Efficiency Ratio (or Expense-to-Revenue Ratio) is a measure of productivity. It is a percentage calculated as non-interest expense divided by total revenue (on a taxable equivalent basis in the operating groups).

Fair Value is the amount of consideration that would be agreed upon in an arm’s-length transaction between knowledgeable, willing parties who are under no compulsion to act in an orderly market transaction.

Forwards and Futures are contractual agreements to either buy or sell a specified amount of a currency, commodity, interest-rate-sensitive financial instrument or security at a specified price and date in the future. Forwards are customized contracts transacted in the over-the-counter market. Futures are transacted in standardized amounts on regulated exchanges and are subject to daily cash margin requirements.

Gross Impaired Loans and Acceptances (GIL) is calculated as the credit impaired balance of loans and customers’ liability under acceptances.

Gross Impaired Loans and Acceptances (GIL) Ratio is calculated as gross impaired loans and acceptances as a percentage of gross loans and acceptances.

Guarantees and Standby Letters of Credit represent our obligation to make payments to third parties on behalf of a customer if the customer is unable to make the required payments or meet other contractual requirements.

Hedging is a risk management technique used to neutralize, manage or offset interest rate, foreign currency, equity, commodity or credit risk exposures arising from normal banking activities.

High-Quality Liquid Assets (HQLA) are cash or assets that can be converted into cash with little or no loss in value to meet short-term liquidity needs.

Impaired Loans are loans for which there is no longer a reasonable assurance of the timely collection of principal or interest.

Insurance Investment Results represent net returns on insurance-related assets and the impact of the change in discount rates and financial assumptions on insurance contract liabilities.

Insurance Service Results represent insurance revenue, insurance service expenses and reinsurance results.

Leverage Exposures (LE) consist of on-balance sheet items and specified off-balance sheet items, net of specified adjustments.

Leverage Ratio is a Basel III regulatory measure calculated as Tier 1 Capital divided by LE, in accordance with OSFI’s Capital Adequacy Requirements (CAR) Guideline.

Liquidity and Funding Risk is the potential risk that we are unable to meet our financial commitments in a timely manner at reasonable prices as they come due. Financial commitments include liabilities to depositors and suppliers, as well as lending, investment and pledging commitments.

Liquidity Coverage Ratio (LCR) is a Basel III regulatory metric calculated as the ratio of high-quality liquid assets to total net stressed cash outflows over a thirty-day period under a stress scenario, in accordance with guidelines issued by OSFI.

BMO Financial Group First Quarter Report 2025 41

Market Risk is the potential for adverse changes in the value of our assets and liabilities resulting from changes in market variables such as interest rates, foreign exchange rates, credit spreads, equity and commodity prices and their implied volatilities.

Mark-to-Market represents the valuation of financial instruments at fair value as of the balance sheet date.

Master Netting Agreements are agreements between two parties designed to reduce the credit risk of multiple derivative transactions through the provision of a legal right to offset exposure in the event of default.

Net Interest Income comprises earnings on assets, such as loans and securities, including interest and certain dividend income, less interest expense paid on liabilities, such as deposits. Net interest income, excluding trading, is presented on a basis that excludes trading-related interest income.

Net Interest Margin is the ratio of net interest income to average earning assets, expressed as a percentage or in basis points. Net interest margin, excluding trading net interest income, and trading and insurance average assets is calculated in the same manner, excluding trading-related interest income, and trading and insurance earning assets.

Net Stable Funding Ratio (NSFR) is a regulatory liquidity measure that assesses the stability of a bank’s funding profile in relation to the liquidity value of its assets, and is calculated in accordance with OSFI’s Liquidity Adequacy Requirements (CAR) Guideline.

Notional Amount refers to the principal amount used to calculate interest and other payments under derivative contracts. The principal amount does not change hands under the terms of a derivative contract, except in the case of cross-currency swaps.

Off-Balance Sheet Financial Instruments comprises a variety of financial arrangements offered to clients, which include credit derivatives, written put options, backstop liquidity facilities, standby letters of credit, performance guarantees, credit enhancements, commitments to extend credit, securities lending, documentary and commercial letters of credit, and other indemnifications.

Office of the Superintendent of Financial Institutions (OSFI) is the government agency responsible for regulating banks, insurance companies, trust companies, loan companies and pension plans in Canada.

Operating Leverage is the difference between the growth rates of revenue and non-interest expense.

Options are contractual agreements that convey to the purchaser the right but not the obligation to either buy or sell a specified amount of a currency, commodity, interest-rate-sensitive financial instrument or security at a fixed future date or at any time within a fixed future period.

Pre-Provision, Pre-Tax Earnings (PPPT) is calculated as income before the provision for income taxes and provision for (recovery of) credit losses. We use PPPT on both a reported and an adjusted basis to assess our ability to generate sustained earnings growth excluding credit losses, which are impacted by the cyclical nature of a credit cycle.

Provision for Credit Losses (PCL) is a charge to income that represents an amount deemed adequate by management to provide for impairment in a portfolio of loans and acceptances and other credit instruments, given the composition of the portfolio, the probability of default, the economic outlook and the allowance for credit losses already established. PCL can comprise both a provision for credit losses on impaired loans and a provision for credit losses on performing loans.

Provision for Credit Losses (PCL) Ratio is calculated as the annualized total provision for credit losses as a percentage of average net loans and acceptances.

Return on Equity or Return on Common Shareholders’ Equity (ROE) is calculated as net income, less preferred dividends and distributions on other equity instruments, as a percentage of average common shareholders’ equity. Common shareholders’ equity comprises common share capital, contributed surplus, accumulated other comprehensive income (loss) and retained earnings.

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.

Risk-Weighted Assets (RWA) are on- and off-balance sheet exposures adjusted by a regulatory risk-weighted factor to a comparable risk level, in accordance with guidelines issued by OSFI.

Securities Borrowed or Purchased under Resale Agreements are low-cost, low-risk instruments, often supported by the pledge of cash collateral, which arise from transactions that involve the borrowing or purchasing of securities.

Securities Lent or Sold under Repurchase Agreements are low-cost, low-risk liabilities, often supported by cash collateral, which arise from transactions that involve the lending or selling of securities.

Securitization is the practice of selling pools of contractual debts, such as residential mortgages, auto loans and credit card debt obligations, to third parties or trusts, which then typically issue a series of asset-backed securities to investors to fund the purchase of the contractual debts.

Structured Entities (SEs) include entities for which voting or similar rights are not the dominant factor in determining control of the entity. BMO is required to consolidate a SE if it controls the entity by having power over the entity, exposure to variable returns as a result of its involvement and the ability to exercise power to affect the amount of those returns.

Structural (Non-Trading) Market Risk comprises interest rate risk arising from banking activities (loans and deposits) and foreign exchange risk arising from foreign currency operations and exposures.

Swaps are contractual agreements between two parties to exchange a series of cash flows based on notional amounts over a specified period.

Tangible Common Equity is calculated as common shareholders’ equity, less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities.

Taxable Equivalent Basis (teb): Operating segment revenue is presented on a taxable equivalent basis (teb). Revenue and the provision for income taxes in BMO Capital Markets and U.S. P&C are increased on tax-exempt securities to an equivalent pre-tax basis to facilitate comparisons of income between taxable and tax-exempt sources. The offset to operating segment teb adjustments is reflected in Corporate Services revenue and provision for (recovery of) income taxes.

Tier 1 Capital comprises CET1 Capital and Additional Tier 1 (AT1) Capital. AT1 Capital consists of preferred shares, limited recourse capital notes and other qualifying capital instruments issued by a subsidiary to third parties.

Tier 2 Capital comprises subordinated debentures and may include certain credit loss provisions, less regulatory deductions.

Total Capital comprises Tier 1 and Tier 2 Capital.

Total Loss Absorbing Capacity (TLAC) comprises Total Capital and senior unsecured debt subject to the Canadian Bail-In Regime, less regulatory deductions, in accordance with guidelines issued by OSFI.

Total Loss Absorbing Capacity (TLAC) Ratio is calculated as TLAC divided by risk-weighted assets.

Total Loss Absorbing Capacity (TLAC) Leverage Ratio is calculated as TLAC divided by leverage exposures.

Total Shareholder Return: The annual total shareholder return (TSR) represents the average annual total return earned on an investment in BMO common shares made at the beginning of the respective period. The return includes the change in share price and assumes dividends received were reinvested in additional common shares.

Trading-Related Revenue comprises net interest income and non-interest revenue earned from on-balance sheet and off-balance sheet positions undertaken for trading purposes. The management of these positions typically includes marking them to market on a daily basis.

Value-at-Risk (VaR) measures the maximum loss likely to be experienced in the trading and underwriting portfolios, measured at a 99% confidence level over a one-day holding period. VaR is calculated for specific classes of risk in BMO’s trading and underwriting activities related to interest rates, foreign exchange rates, credit spreads, equity and commodity prices and their implied volatilities.

42 BMO Financial Group First Quarter Report 2025

Investor and Media Information

Investor Presentation Materials

Interested parties are invited to visit BMO’s website at www.bmo.com/investorrelations to review the 2024 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, February 25, 2025, at 8:15 a.m. (ET). The call may be accessed by telephone at 416-340-2217 (from within Toronto) or 1-800-806-5484 (toll-free outside Toronto), entering Passcode: 9768240#. A replay of the conference call can be accessed until March 25, 2025, by calling 905-694-9451 (from within Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering Passcode: 9180754#.

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

Jeff Roman, Director, Enterprise Media Relations, jeff.roman@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 100 University Avenue, 8th Floor Toronto, Ontario M5J 2Y1 Telephone: 1-800-340-5021 (Canada and the United States) Telephone: (514) 982-7800 (international) Fax: 1-888-453-0330 (Canada and the United States) Fax: (416) 263-9394 (international) E-mail: service@computershare.com For other shareholder information, please contact Bank of Montreal Shareholder Services Corporate Secretary’s Department One 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, One First Canadian Place, 37th Floor Toronto, Ontario M5X 1A1   To review financial results and regulatory filings and disclosures online, please visit BMO’s website at www.bmo.com/investorrelations.

BMO’s 2024 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 and at www.sedarplus.ca. Printed copies of the bank’s complete 2024 audited consolidated financial statements are available free of charge upon request at 416-867-6785 or corp.secretary@bmo.com.

Annual Meeting 2025

The next Annual Meeting of Shareholders will be held on Friday, April 11, 2025.

^® Registered trademark of Bank of Montreal

64 BMO Financial Group First Quarter Report 2025