BMO Financial Group Reports First Quarter 2026 Results
REPORT TO SHAREHOLDERS
BMO’s First Quarter 2026 Report to Shareholders, including the unaudited interim consolidated financial statements for the period ended January 31, 2026, are available online at www.bmo.com/investorrelations, on the Canadian Securities Administrators’ website at www.sedarplus.ca, and on the EDGAR section of the U.S. Securities and Exchange Commission’s website at www.sec.gov.
Financial Results Highlights
First Quarter 2026 compared with First Quarter 2025:
•Reported net income1 of $2,489 million, an increase of 16% from $2,138 million; adjusted net income1 of $2,551 million, an increase of 11% from $2,289 million
•Reported earnings per share (EPS)2 of $3.39, an increase of 20% from $2.83; adjusted EPS1, 2 of $3.48, an increase of 15% from $3.04
•Provision for credit losses (PCL) of $746 million, a decrease from $1,011 million
•Reported return on equity (ROE) of 12.1%, compared with 10.6%; adjusted ROE1 of 12.4%, compared with 11.3%
•Common Equity Tier 1 (CET1) Ratio3 of 13.1%, compared with 13.6%
Toronto, February 25, 2026 – BMO Financial Group (TSX:BMO) (NYSE:BMO) reported net income for the first quarter ended January 31, 2026 was $2,489 million, compared with $2,138 million in the prior year, and EPS of $3.39, compared with $2.83. Reported ROE was 12.1%, compared with 10.6% in the prior year. Adjusted net income was $2,551 million and adjusted EPS was $3.48, an increase from $2,289 million and $3.04, respectively, in the prior year. Adjusted ROE was 12.4%, compared with 11.3% in the prior year. Reported and adjusted results in the current quarter included severance costs of $147 million ($202 million pre-tax) associated with advancing operational efficiencies across the enterprise, recorded in the respective operating segments. On November 1, 2025, the bank completed the acquisition of Burgundy Asset Management Ltd. (Burgundy), with results included in the Wealth Management operating segment.
“BMO had a very strong start to the year. Building on last year’s momentum we are executing on our commitments, delivering higher return on equity and double-digit earnings growth. We earned record revenue in each of our operating segments this quarter, with strong fee growth in our market-driven businesses. Our focus on closely managing expenses and operational efficiency is creating capacity for strategic investments in technology and talent that deliver value for today and the future. Credit is well-managed and in-line with our expectations,” said Darryl White, CEO of BMO Financial Group.
“Through disciplined execution of our strategy we are making meaningful progress on the clear path we set to elevate returns and drive profitable earnings growth as we focus on delivering value for our clients and shareholders,” concluded Mr. White.
Concurrent with the release of results, BMO announced a second quarter 2026 dividend of $1.67 per common share, unchanged from the prior quarter and an increase of $0.08 or 5% from the prior year. The quarterly dividend of $1.67 is equivalent to an annual dividend of $6.68 per common share. During the quarter, we purchased for cancellation 6.0 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 section.
(1)Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. They are also presented on an adjusted basis that excludes the impact of certain specified items from reported results. Adjusted results and ratios are non-GAAP and are detailed in the Non-GAAP and Other Financial Measures section. Unless otherwise indicated, all amounts are in Canadian dollars. All ratios and percentage changes in this document are based on unrounded numbers.
(2)All EPS measures in this document refer to diluted EPS, unless specified otherwise.
(3)The CET1 Ratio is disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline, as set out by the Office of the Superintendent of Financial Institutions (OSFI), as applicable.
BMO Financial Group First Quarter Report 2026 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 2025 Annual Report, the First Quarter 2026 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 2026 Report to Shareholders.
Topic
EDTF Disclosure
Page Number
2025 Annual Report
Q1 2026
RTS
SFI
SRCI
General
1. Risk-related information in each report, including an index for easy navigation
67-107
3
Index
Index
2. Risk terminology, measures and key parameters
70-107,
122-124
27
–
–
3. Top and emerging risks
67-69
5,27
–
–
4. Plans to meet new key regulatory ratios once applicable rules are finalized
61
15
–
–
Risk Governance, Risk Management and Business Model
5. Risk management and governance framework, processes and key functions
70-74
–
–
–
6. Risk culture, risk appetite and procedures to support the culture
72-75
–
–
–
7. Risks that arise from business models and activities
63,72-74
–
–
–
8. Stress testing within the risk governance and capital frameworks
75
–
–
–
Capital Adequacy and Risk-Weighted Assets (RWA)
9. Pillar 1 capital requirements
59-61,185
–
–
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
62
15-16
–
7
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
58-63
–
–
–
13. Risk-weighted assets (RWA) by operating segment
63
–
–
16
14. Analysis of capital requirements for each method used in calculating RWA
59-63,
76-80
–
–
16,22-49, 55-67,70-71, 78-82,84, 86-91
15. Tabulate credit risk in the banking book for Basel asset classes and major portfolios
–
–
–
22-49, 51-67,89-91
16. Flow statement that reconciles movements in RWA by risk type
–
–
–
50,71,83
17. Basel validation and back-testing process, including estimated and actual loss parameter information
101-102
–
–
92
Liquidity
18. Management of liquidity needs, and liquidity reserve held to meet those needs
89-95
30,33
–
–
Funding
19. Encumbered and unencumbered assets disclosed by balance sheet category
91
31
48
–
20. Consolidated total assets, liabilities and off-balance sheet commitments by remaining contractual maturity
96-97
35-36
–
–
21. Analysis of funding sources and funding strategy
92-93
31-32
–
–
Market Risk
22. Linkage of trading and non-trading market risk to the Consolidated Balance Sheet
88
29
–
–
23. Significant trading and non-trading market risk factors
84-88
29-30
–
–
24. Market risk model assumptions, validation procedures and back-testing
84-88,
101-102
–
–
–
25. Primary techniques for risk measurement and risk assessment, including risk of loss
84-88
29-30
–
–
Credit Risk
26. Analysis of credit risk profile, exposure and concentration
62-63,76-83,
145-152, 163-164
12-13,47-51
24-45
16-81
27. Policies to identify impaired loans and renegotiated loans
146,151
–
–
–
28. Reconciliation of opening and closing balances of impaired loans and allowance for credit losses
82,148
13,47-48
–
–
29. Counterparty credit risk arising from derivative transactions
76-78,83,
163-164
–
–
55-73
30. Credit risk mitigation
76-78,147, 154,196-197
–
–
21,51-52,68
Other Risks
31. Discussion of other risks
70-73, 98-107
–
–
–
32. Publicly known risk events involving material or potentially material loss events
98-107,
197-198
–
–
–
2 BMO Financial Group First Quarter Report 2026
Management’s Discussion and Analysis
Management’s Discussion and Analysis (MD&A) commentary is as at February 25, 2026 for the period ended January 31, 2026. 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, 2026, included in this document, as well as the audited annual consolidated financial statements for the year ended October 31, 2025, and the 2025 annual MD&A, contained in Bank of Montreal’s 2025 Annual Report.
The 2025 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, and our most recent Annual Information Form, 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.
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, 2026, 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, 2026, 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 2026 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 2026 and beyond; our strategies or future actions; our targets and commitments; expectations for our financial condition, capital position, the regulatory environment in which we operate, the results of, or outlook for, our operations or the Canadian, U.S. and international economies; and include statements made by our management. Forward-looking statements are typically identified by words such as “will”, “would”, “should”, “believe”, “expect”, “anticipate”, “project”, “intend”, “estimate”, “plan”, “goal”, “commit”, “target”, “may”, “might”, “schedule”, “forecast”, “outlook”, “timeline”, “suggest”, “seek” and “could” or negative or grammatical variations thereof.
By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties, both general and specific in nature. There is significant risk that predictions, forecasts, conclusions or projections will not prove to be accurate, that our assumptions may not be correct, and that actual results may differ materially from such predictions, forecasts, conclusions or projections. We caution readers of this document not to place undue reliance on our forward-looking statements, as a number of
factors – many of which are beyond our control and the effects of which can be difficult to predict – could cause actual future results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed in the forward-looking statements.
The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: general economic and market conditions in the countries in which we operate, including labour challenges and changes in foreign exchange and interest rates; political conditions, including changes relating to, or affecting, economic or trade matters, including tariffs, countermeasures and tariff mitigation policies; changes to our credit ratings; cyber and information security, including the threat of data breaches, hacking, identity theft and corporate espionage, as well as the possibility of denial of service resulting from efforts targeted at causing system failure and service disruption; technology resilience, innovation and competition; technological change, including the use of data and artificial intelligence (AI) in our business, including generative AI; failure of third parties to comply with their obligations to us; disruptions of global supply chains; environmental and social risk, including climate change; the Canadian housing market and consumer leverage; inflationary pressures; changes in laws, including tax legislation and interpretation, or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, including if the bank were designated a global systemically important bank, and the effect of such changes on funding costs and capital requirements; changes in monetary, fiscal or economic policy; weak, volatile or illiquid capital or credit markets; the level of competition in the geographic and business areas in which we operate; exposure to, and the resolution of, significant litigation or regulatory matters, our ability to successfully appeal adverse outcomes of such matters and the timing, determination and recovery of amounts related to such matters; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to successfully execute our strategic plans, complete acquisitions or dispositions and integrate acquisitions, including obtaining regulatory approvals, and realize any anticipated benefits from such plans and transactions; critical accounting estimates and judgments, and the effects of changes in accounting standards, rules and interpretations on these estimates; operational and infrastructure risks, including with respect to reliance on third parties; global capital markets activities; the emergence or continuation of widespread health emergencies or pandemics, and their impact on local, national or international economies, as well as their heightening of certain risks that may affect our future results; the possible effects on our business of war or terrorist activities; natural disasters, such as earthquakes or flooding, and disruptions to public infrastructure, such as transportation, communications, power or water supply; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors.
We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For further information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, liquidity and funding, operational non-financial, legal and regulatory compliance, strategic, environmental and social, and reputation risk in the Enterprise-Wide Risk Management section of BMO’s 2025 Annual Report, and the Risk Management section in our First Quarter 2026 Report to Shareholders, all of which outline certain key factors and risks that may affect our future results. Investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law. The forward-looking information contained in this document is presented for the purpose of assisting shareholders and analysts in understanding our financial position as at and for the periods ended on the dates presented, as well as our strategic priorities and objectives, and may not be appropriate for other purposes.
Material economic assumptions underlying the forward-looking statements contained in this document include those set out in the Economic Developments and Outlook section of BMO’s 2025 Annual Report, as updated in the Economic Developments and Outlook section in our First Quarter 2026 Report to Shareholders, as well as in the Allowance for Credit Losses section of BMO’s 2025 Annual Report, as updated in the Allowance for Credit Losses section in our First Quarter 2026 Report to Shareholders. Assumptions about the performance of the Canadian and U.S. economies, as well as overall market conditions and their combined effect on our business, are material factors we consider when determining our strategic priorities, objectives and expectations for our business. In determining our expectations for economic growth, we primarily consider historical economic data, past relationships between economic and financial variables, changes in government policies, and the risks to the domestic and global economy.
4 BMO Financial Group First Quarter Report 2026
Economic Developments and Outlook (1)
The renegotiation of the United States-Mexico-Canada Agreement (USMCA) is expected to shape the direction of trade policies in 2026. We assume the renegotiation will extend into next year, preserving the compliance exemption that allows most Canadian and Mexican goods to enter the U.S. duty-free, but also prolonging the uncertainty.
Despite high tariffs on some products, including motor vehicles, steel and aluminum, Canada’s economy continues to expand. However, real gross domestic product (GDP) is estimated to have slowed to almost no growth in the fourth quarter of 2025, compared with an annual rate of 2.6% in the third quarter. The slowdown reflects the negative effects of uncertain trade policies on business investment, along with continued weakness in the Ontario housing market. An increase in consumer and government spending likely provided some offsetting support to the economy. Real GDP is projected to expand a modest 1.4% in 2026, supported by prior declines in interest rates and expansionary fiscal policies aimed at increasing business investment. The unemployment rate, which decreased over the past year to 6.5% in January 2026, is expected to decline slightly to 6.4% by the end of 2026 as economic growth improves and population growth remains slow in response to lower immigration targets. Consumer price inflation remained moderate at 2.3% year-over-year in January 2026, but is projected to average 2.5% in 2026, partially due to rising food costs. After reducing policy rates by a total of 100 basis points in 2025, the Bank of Canada is anticipated to maintain a steady policy rate stance in 2026. The Canadian dollar is projected to strengthen moderately in 2026, assuming trade tensions begin to subside and interest-rate differentials with the United States narrow. Housing market activity remains weak in Ontario and British Columbia due to affordability challenges and slower population growth. As a result, industry-wide growth in residential mortgage balances, at 4.6% year-over-year in December 2025, is expected to moderate somewhat in 2026. Year-over-year growth in consumer credit (excluding mortgages) remained moderate at 3.4% in December 2025, but is expected to improve somewhat in 2026, due to support from lower interest rates. Industry-wide growth in non-financial corporate credit balances was 3.7% year-over-year in December 2025, and will likely remain moderate until trade-policy uncertainty improves.
The U.S. economy has expanded at a healthy rate. Real GDP grew at an annual rate of 1.4% in the fourth quarter of 2025 following a strong 4.4% increase in the third quarter. The deceleration was primarily due to a six-week partial shutdown of the federal government. Consumer spending remains solid, supported by the wealth effect from rising equity markets, while substantial investment in AI technologies and data centres continues to drive business spending. With support from lower interest rates and expansionary fiscal policies, real GDP is expected to increase 2.5% in 2026, improving from 2.2% in 2025. Slower hiring pushed the unemployment rate up modestly in the past year to 4.3% in January 2026, and it is expected to average 4.5% in 2026, which is still low by historical standards. Consumer price inflation eased in the past year to 2.4% year-over-year in January 2026, despite new tariffs, and is projected to further decline modestly in 2026 amid a moderation in wage growth. After lowering policy rates by 75 basis points in 2025 to address labour-market softness, the Federal Reserve is projected to reduce rates by a similar amount in 2026 amid easing inflation pressure. However, longer-term interest rates are expected to remain near current levels due to concerns about the large federal budget deficit and lingering above-target inflation. Industry-wide growth in residential mortgage balances remained modest at 2.2% year-over-year in January 2026 amid continued weakness in home sales, but will likely strengthen in 2026 on somewhat lower mortgage rates. Year-over-year growth in consumer loan balances improved to 4.1% in January 2026 and is projected to remain firm in 2026. Year-over-year growth in business, industrial and commercial real estate credit was solid at 4.0% in January 2026 and is anticipated to remain healthy in 2026.
The above economic outlook is subject to several risks that could lead to a less favourable outcome for the North American economy. The most immediate threat stems from further escalation of U.S. tariffs. Canadian businesses face longer-term risks if renegotiation of the USMCA is unsuccessful, as significant tariffs could then apply to more goods exported to the U.S., potentially leading to a recession in Canada. If the USMCA is renegotiated, some tariffs are likely to persist, which could result in slower growth. Other risks include an escalation of the Russia-Ukraine war; heightened tensions between the U.S. and Iran that could destabilize the Middle East; and a potential escalation of the U.S.’s involvement in Venezuela. Elevated equity valuations also pose the risk of a destabilizing correction. Longer-term, substantial business spending to develop and adopt AI systems, while providing material support to the economy, presents new challenges for workers and industries, such as software. Although AI has not yet led to significant job losses, it could increasingly affect hiring decisions and drive significant shifts in workforce composition, requiring displaced workers to learn new skills.
Our operations, clients and customers may be affected by significant changes to the economic environment and heightened economic uncertainty. An increase in provisions for credit losses, volatility in capital markets and slower loan growth could result if tariffs increase substantially. Management regularly monitors the economic environment and takes proactive measures to respond to uncertainties and reduce the impact on our results.
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 2026 5
Financial Highlights
TABLE 1
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
Summary Income Statement (1)
Net interest income
5,643
5,496
5,398
Non-interest revenue
4,181
3,845
3,868
Revenue
9,824
9,341
9,266
Provision for credit losses on impaired loans
739
750
859
Provision for credit losses on performing loans
7
5
152
Total provision for credit losses (PCL)
746
755
1,011
Non-interest expense
5,753
5,556
5,427
Provision for income taxes
836
735
690
Net income
2,489
2,295
2,138
Net income (loss) attributable to non-controlling interest in subsidiaries
(1)
7
4
Dividends on preferred shares and distributions on other equity instruments
81
163
65
Net income available to common shareholders
2,409
2,125
2,069
Adjusted net income
2,551
2,514
2,289
Adjusted net income available to common shareholders
2,471
2,344
2,220
Common Share Data ($, except as noted) (1)
Basic earnings per share
3.40
2.98
2.84
Diluted earnings per share
3.39
2.97
2.83
Adjusted diluted earnings per share
3.48
3.28
3.04
Book value per share
110.45
111.57
109.46
Closing share price
185.37
174.23
143.88
Number of common shares outstanding (in millions)
End of period
706.2
708.9
728.8
Average basic
708.4
713.3
729.6
Average diluted
710.2
715.1
730.7
Market capitalization ($ millions)
130,908
123,513
104,855
Dividends declared per common share
1.67
1.63
1.59
Dividend yield (%)
3.6
3.7
4.4
Dividend payout ratio (%)
49.1
54.7
56.1
Adjusted dividend payout ratio (%)
47.9
49.6
52.3
Financial Measures and Ratios (%) (1) (2)
Return on equity
12.1
10.7
10.6
Adjusted return on equity
12.4
11.8
11.3
Return on tangible common equity
16.2
14.7
14.4
Adjusted return on tangible common equity
16.1
15.4
14.9
Efficiency ratio
58.6
59.5
58.6
Adjusted efficiency ratio
57.8
56.7
56.3
Operating leverage
0.0
(21.2)
20.1
Adjusted operating leverage
(2.8)
3.0
8.9
Net interest margin on average earning assets
1.68
1.67
1.62
Adjusted net interest margin, excluding Global Markets and Insurance
2.33
2.30
2.13
Effective tax rate
25.2
24.2
24.4
Adjusted effective tax rate
25.0
23.6
24.5
Total PCL-to-average net loans and acceptances
0.44
0.44
0.58
PCL on impaired loans-to-average net loans and acceptances
0.44
0.44
0.50
Balance Sheet and Other Information (as at, $ millions, except as noted)
Assets
1,458,132
1,476,802
1,468,093
Average earning assets
1,334,388
1,304,278
1,319,541
Gross loans and acceptances
674,383
682,922
694,027
Net loans and acceptances
669,316
677,872
689,235
Deposits
954,789
976,202
996,832
Common shareholders’ equity
77,999
79,095
79,772
Total risk-weighted assets (3)
442,058
437,945
433,944
Assets under administration
872,742
864,891
830,137
Assets under management
547,035
506,661
450,617
Capital and Liquidity Measures (%) (3)
Common Equity Tier 1 Ratio
13.1
13.3
13.6
Tier 1 Capital Ratio
14.8
15.0
15.4
Total Capital Ratio
16.9
17.3
17.6
Leverage Ratio
4.4
4.3
4.4
TLAC Ratio
29.1
29.7
29.8
Liquidity Coverage Ratio
126
132
128
Net Stable Funding Ratio
116
117
116
Foreign Exchange Rates ($)
As at Canadian/U.S. dollar
1.3589
1.4016
1.4514
Average Canadian/U.S. dollar
1.3759
1.3887
1.4303
(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 2026
Non-GAAP and Other Financial Measures
Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements and our unaudited interim consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB). References to GAAP mean IFRS. We use a number of financial measures to assess our performance, as well as the performance of our operating segments, including amounts, measures and ratios that are presented on a non‑GAAP basis, as described below. We believe that these non‑GAAP amounts, measures and ratios, read together with our GAAP results, provide readers with a better understanding of how management assesses results.
Non-GAAP amounts, measures and ratios do not have standardized meanings under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, GAAP results.
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 and income taxes, as detailed in the following table. Adjusted results and measures presented in this document are non‑GAAP. Presenting results on both a reported and an adjusted basis permits readers to assess the impact of certain items on results for the periods presented, and to better assess results excluding those items that may not reflect ongoing business performance. As such, the presentation may facilitate readers’ analysis of underlying trends. Except as otherwise noted, management’s discussion of changes in reported results in this document applies equally to changes in the corresponding adjusted results.
Net Interest Margin, excluding Global Markets and Insurance
Effective the first quarter of fiscal 2026, we report net interest margin on a basis that excludes net interest income from our Global Markets business in Capital Markets, and average earning assets from our Global Markets and Insurance businesses. Management considers this measure to be useful in allowing readers to assess performance of BMO’s lending, investing and deposit-raising activities without the volatility that may be associated with market and trading-related activities. This measure replaces Net Interest Margin, excluding trading and insurance previously disclosed, and prior periods have been reclassified to conform with the current period’s presentation.
Tangible common equity and return on tangible common equity
Tangible common equity is calculated as common shareholders’ equity, less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities. Return on tangible common equity (ROTCE) is calculated as net income available to common shareholders, adjusted for the amortization of acquisition-related intangible assets and any impairments, as a percentage of average tangible common equity. ROTCE is commonly used in the North American banking industry and is meaningful as a consistent measure of the performance of businesses, whether they were acquired or developed organically.
Adjusting Items
Adjusted results in the current quarter and prior periods excluded the following items:
•Acquisition and integration costs of $7 million ($9 million pre-tax) in the current quarter. Prior periods included expense of $3 million ($4 million pre-tax) in Q4-2025 and $7 million ($10 million pre-tax) in Q1-2025. Amounts are recorded in non-interest expense in the related operating segment: Burgundy in Wealth Management and Bank of the West in Corporate Services.
•Amortization of acquisition-related intangible assets of $71 million ($96 million pre-tax) in the current quarter. Prior periods included $123 million ($168 million pre-tax) in Q4-2025 and $79 million ($106 million pre-tax) in Q1-2025. Amounts are recorded in non-interest expense in the related operating segment.
•Change in the fair value of contingent consideration related to the acquisition of Burgundy, which reduced non-interest revenue in the current quarter by $16 million (pre-tax and after-tax), recorded in Wealth Management. For further information, refer to Note 13 of the unaudited interim consolidated financial statements and Note 9 of the audited annual consolidated financial statements of BMO’s 2025 Annual Report.
•Impact of divestitures related to the announced sale of 138 branches in select U.S. markets included divestiture-related costs of $3 million ($4 million pre-tax) in the current quarter. Prior periods included a write-down of goodwill of $102 million (pre-tax and after-tax) in Q4-2025. Amounts are recorded in non-interest expense in Corporate Services.
•U.S. Federal Deposit Insurance Corporation (FDIC) special assessment recorded in non-interest expense in Corporate Services. Q1-2026 included a partial reversal of a prior charge of $35 million ($47 million pre-tax). Prior periods included a $9 million ($12 million pre-tax) partial reversal in Q4-2025 and a $5 million ($7 million pre-tax) partial reversal in Q1-2025.
•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.
Adjusting items in aggregate decreased net income by $62 million in the current quarter, compared with a $151 million decrease in the prior year and a decrease of $219 million in the prior quarter.
BMO Financial Group First Quarter Report 2026 7
Non-GAAP and Other Financial Measures (1)
TABLE 2
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
Reported Results
Net interest income
5,643
5,496
5,398
Non-interest revenue
4,181
3,845
3,868
Revenue
9,824
9,341
9,266
Provision for credit losses
746
755
1,011
Non-interest expense
5,753
5,556
5,427
Income before income taxes
3,325
3,030
2,828
Provision for income taxes
836
735
690
Net income
2,489
2,295
2,138
Dividends on preferred shares and distributions on other equity instruments
81
163
65
Net income (loss) attributable to non-controlling interest in subsidiaries
(1)
7
4
Net income available to common shareholders
2,409
2,125
2,069
Diluted EPS ($)
3.39
2.97
2.83
Adjusting Items Impacting Revenue (Pre-tax)
Change in fair value of contingent consideration (2)
Amortization of acquisition-related intangible assets (3)
(71)
(123)
(79)
Impact of divestitures
(3)
(102)
–
FDIC special assessment
35
9
5
Impact of alignment of accounting policies
–
–
(70)
Impact of adjusting items on non-interest expense (after-tax)
(46)
(219)
(151)
Impact of adjusting items on reported net income (after-tax)
(62)
(219)
(151)
Impact on diluted EPS ($)
(0.09)
(0.31)
(0.21)
Adjusted Results
Net interest income
5,643
5,496
5,398
Non-interest revenue
4,197
3,845
3,868
Revenue
9,840
9,341
9,266
Provision for credit losses
746
755
1,011
Non-interest expense
5,691
5,294
5,222
Income before income taxes
3,403
3,292
3,033
Provision for income taxes
852
778
744
Net income
2,551
2,514
2,289
Net income available to common shareholders
2,471
2,344
2,220
Diluted EPS ($)
3.48
3.28
3.04
(1)Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented in the table above. Refer to the commentary in this Non-GAAP and Other Financial Measures section for further information on adjusting items.
(2)Recorded in non-interest revenue.
(3)Represents amortization of acquisition-related intangible assets and any impairment.
8 BMO Financial Group First Quarter Report 2026
Summary of Reported and Adjusted Results by Operating Segment
TABLE 3
Wealth
Capital
Corporate
U.S. Operations (1)
(Canadian $ in millions, except as noted)
Canadian P&C
U.S. Banking
Management
Markets
Services
Total Bank
(US$ in millions)
Q1-2026
Reported net income (loss)
948
742
352
657
(210)
2,489
715
Dividends on preferred shares and distributions on
other equity instruments
13
14
2
15
37
81
17
Net income (loss) attributable to non-controlling interest in subsidiaries
–
(2)
–
–
1
(1)
(1)
Net income (loss) available to common shareholders
935
730
350
642
(248)
2,409
699
Acquisition and integration costs
–
–
7
–
–
7
–
Amortization of acquisition-related intangible assets
3
60
5
3
–
71
46
Change in fair value of contingent consideration
–
–
16
–
–
16
–
Impact of divestitures
–
–
–
–
3
3
2
FDIC special assessment
–
–
–
–
(35)
(35)
(26)
Adjusted net income (loss) (2)
951
802
380
660
(242)
2,551
737
Adjusted net income (loss) available to common shareholders (2)
938
790
378
645
(280)
2,471
721
Q4-2025
Reported net income (loss)
733
807
399
525
(169)
2,295
616
Dividends on preferred shares and distributions on
other equity instruments
11
15
2
10
125
163
3
Net income attributable to non-controlling interest in subsidiaries
–
7
–
–
–
7
5
Net income (loss) available to common shareholders
722
785
397
515
(294)
2,125
608
Acquisition and integration costs
–
–
1
–
2
3
1
Amortization of acquisition-related intangible assets
48
64
–
11
–
123
47
Impact of divestitures
–
–
–
–
102
102
73
FDIC special assessment
–
–
–
–
(9)
(9)
(6)
Adjusted net income (loss) (2)
781
871
400
536
(74)
2,514
731
Adjusted net income (loss) available to common shareholders (2)
770
849
398
526
(199)
2,344
723
Q1-2025
Reported net income (loss)
877
635
328
589
(291)
2,138
639
Dividends on preferred shares and distributions on
other equity instruments
12
15
2
10
26
65
3
Net income attributable to non-controlling interest in subsidiaries
–
–
–
–
4
4
3
Net income (loss) available to common shareholders
865
620
326
579
(321)
2,069
633
Acquisition and integration costs
–
–
–
–
7
7
5
Amortization of acquisition-related intangible assets
3
72
–
4
–
79
52
FDIC special assessment
–
–
–
–
(5)
(5)
(4)
Impact of alignment of accounting policies
–
–
–
–
70
70
25
Adjusted net income (loss) (2)
880
707
328
593
(219)
2,289
717
Adjusted net income (loss) available to common shareholders (2)
868
692
326
583
(249)
2,220
711
(1)U.S. Operations comprises reported and adjusted results recorded in U.S. Banking, and the U.S. operations in Capital Markets and Corporate Services.
(2)Refer to the commentary in this Non-GAAP and Other Financial Measures section for details on adjusting items.
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Return on Equity and Return on Tangible Common Equity
TABLE 4
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
Reported net income
2,489
2,295
2,138
Net income (loss) attributable to non-controlling interest in subsidiaries
(1)
7
4
Net income attributable to bank shareholders
2,490
2,288
2,134
Dividends on preferred shares and distributions on other equity instruments
81
163
65
Net income available to common shareholders (A)
2,409
2,125
2,069
After-tax amortization of acquisition-related intangible assets
71
123
79
Net income available to common shareholders after adjusting for amortization of
acquisition-related intangible assets (B)
2,480
2,248
2,148
After-tax impact of other adjusting items (1)
(9)
96
72
Adjusted net income available to common shareholders (C)
2,471
2,344
2,220
Average common shareholders’ equity (D)
79,075
78,511
77,693
Goodwill
(16,838)
(16,716)
(17,209)
Acquisition-related intangible assets
(2,330)
(2,171)
(2,514)
Net of related deferred tax liabilities
858
882
1,011
Average tangible common equity (E)
60,765
60,506
58,981
Return on equity (%) (= A/D) (2)
12.1
10.7
10.6
Adjusted return on equity (%) (= C/D) (2)
12.4
11.8
11.3
Return on tangible common equity (%) (= B/E) (2)
16.2
14.7
14.4
Adjusted return on tangible common equity (%) (= C/E) (2)
16.1
15.4
14.9
(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.
BMO Financial Group First Quarter Report 2026 9
Return on Equity by Operating Segment (1)
TABLE 5
Wealth
Capital
Corporate
U.S. Operations (2)
(Canadian $ in millions, except as noted)
Canadian P&C
U.S. Banking
Management
Markets
Services
Total Bank
(US$ in millions)
Q1-2026
Reported
Net income (loss) available to common shareholders
935
730
350
642
(248)
2,409
699
Total average common equity
16,405
36,797
4,199
15,219
6,455
79,075
33,150
Return on equity (%)
22.6
7.9
33.1
16.7
na
12.1
8.4
Adjusted (3)
Net income (loss) available to common shareholders
938
790
378
645
(280)
2,471
721
Total average common equity
16,405
36,797
4,199
15,219
6,455
79,075
33,150
Return on equity (%)
22.7
8.5
35.7
16.8
na
12.4
8.6
Q4-2025
Reported
Net income (loss) available to common shareholders
722
785
397
515
(294)
2,125
608
Total average common equity
16,938
36,458
3,049
14,076
7,990
78,511
32,235
Return on equity (%)
16.9
8.5
51.7
14.5
na
10.7
7.5
Adjusted (3)
Net income (loss) available to common shareholders
770
849
398
526
(199)
2,344
723
Total average common equity
16,938
36,458
3,049
14,076
7,990
78,511
32,235
Return on equity (%)
18.1
9.2
52.0
14.8
na
11.8
8.9
Q1-2025
Reported
Net income (loss) available to common shareholders
865
620
326
579
(321)
2,069
633
Total average common equity
16,515
38,033
3,044
13,536
6,565
77,693
32,650
Return on equity (%)
20.8
6.5
42.5
17.0
na
10.6
7.7
Adjusted (3)
Net income (loss) available to common shareholders
868
692
326
583
(249)
2,220
711
Total average common equity
16,515
38,033
3,044
13,536
6,565
77,693
32,650
Return on equity (%)
20.9
7.2
42.5
17.1
na
11.3
8.6
(1)Return on equity is based on allocated capital. Capital is allocated to the operating segments based on the amount of regulatory capital required to support business activities, including risk-weighted assets and capital deductions, with unallocated capital reported in Corporate Services. Effective the first quarter of fiscal 2026, the allocation approach was updated to primarily reflect an increase in the capital allocation rate to 12.5% of risk-weighted assets, compared with 12.0% in fiscal 2025. Capital allocation methodologies are reviewed annually. For further information, refer to the How BMO Reports Operating Segments Results section. Return on equity ratios are presented on an annualized basis.
(2)U.S. Operations comprises reported and adjusted results and allocated capital recorded in U.S. Banking, and the U.S. operations in 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
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Caution
This Non-GAAP and Other Financial Measures section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
Impact of Foreign Exchange
TABLE 6
Q1-2026
(Canadian $ in millions, except as noted)
vs. Q1-2025
vs. Q4-2025
Canadian/U.S. dollar exchange rate (average)
Current period
1.3759
1.3759
Prior period
1.4303
1.3887
Increased/(Decreased)
Effects on U.S. Operations reported results
Net interest income
(95)
(22)
Non-interest revenue
(59)
(13)
Total revenue
(154)
(35)
Provision for credit losses
17
1
Non-interest expense
94
24
Provision for income taxes
8
2
Net income
(35)
(8)
Impact on basic earnings per share ($)
(0.05)
(0.01)
Impact on diluted earnings per share ($)
(0.05)
(0.01)
Effects on U.S. Operations adjusted results (1)
Net interest income
(95)
(22)
Non-interest revenue
(59)
(13)
Total revenue
(154)
(35)
Provision for credit losses
17
1
Non-interest expense
88
22
Provision for income taxes
10
3
Net income
(39)
(9)
Impact on basic earnings per share ($)
(0.05)
(0.01)
Impact on diluted earnings per share ($)
(0.05)
(0.01)
(1)Adjusted results are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.
10 BMO Financial Group First Quarter Report 2026
The table above indicates the relevant average Canadian/U.S. dollar exchange rates and the impact of changes in those rates on reported and adjusted results in BMO’s U.S. operations, comprising U.S. Banking and the U.S. operations in Capital Markets and Corporate Services.
The Canadian dollar equivalents of BMO’s U.S. operations results that are denominated in U.S. dollars decreased in the first quarter of fiscal 2026, relative to the fourth quarter of fiscal 2025 and the first quarter of fiscal 2025, 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. operations.
Economically, our U.S. dollar income stream was not hedged against the risk of changes in foreign exchange rates during fiscal 2026 and fiscal 2025. 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 2025 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 2026 vs. Q1 2025
Reported net income was $2,489 million, an increase of $351 million or 16% from the prior year, and adjusted net income was $2,551 million, an increase of $262 million or 11%. The impact of the weaker U.S. dollar decreased net income by 2% on both a reported basis and an adjusted basis. Reported earnings per share (EPS) was $3.39, an increase of $0.56 from the prior year, and adjusted EPS was $3.48, an increase of $0.44 or 15%. Reported and adjusted results in the current quarter included severance costs of $147 million ($202 million pre-tax) associated with advancing operational efficiencies across the enterprise, recorded in the respective operating segments. The impact of these severance costs reduced EPS by $0.21 per share.
The increase in reported results included the impact of aligning accounting policies for employee vacation across legal entities in the prior year and a larger partial reversal of the FDIC special assessment in the current quarter.
The increase in reported and adjusted net income reflected higher revenue and a lower provision for credit losses, partially offset by higher expenses, and increased across all operating segments. Corporate Services recorded a lower net loss on a reported basis in the current year, primarily due to the items noted above, and a higher net loss on an adjusted basis.
Q1 2026 vs. Q4 2025
Reported net income increased $194 million or 8% from the prior quarter, and adjusted net income increased $37 million or 1%. Reported EPS increased $0.42 from the prior quarter, and adjusted EPS increased $0.20, due to higher net income and lower dividends on preferred shares and distributions on other equity instruments.
The increase in reported net income was primarily due to a write-down of goodwill related to the announced sale of branches in certain U.S. markets in the prior quarter, and lower amortization of acquisition-related intangible assets in the current quarter.
The increase in adjusted net income reflected higher revenue, partially offset by higher expenses. Reported and adjusted net income increased in Canadian P&C and Capital Markets, and decreased in U.S. Banking and Wealth Management. Corporate Services recorded a higher net loss compared with the prior quarter on both a reported and 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.
Revenue
Q1 2026 vs. Q1 2025
Reported revenue was $9,824 million, an increase of $558 million or 6% from the prior year, and adjusted revenue was $9,840 million, an increase of $574 million or 6%. The impact of the weaker U.S. dollar decreased revenue by 2% on both a reported basis and an adjusted basis. Adjusted revenue excluded the impact of a change in the fair value of contingent consideration related to the acquisition of Burgundy, which reduced non-interest revenue in the current quarter by $16 million. Reported and adjusted revenue increased in Canadian P&C, Wealth Management and Capital Markets. Reported and adjusted revenue decreased in U.S. Banking due to the impact of the weaker U.S. dollar, and increased on a source currency basis. Revenue increased in Corporate Services on both a reported and an adjusted basis.
Reported and adjusted net interest income was $5,643 million, an increase of $245 million or 5% from the prior year, driven by higher net interest margin, balance growth in Canadian P&C and Wealth Management, and higher net interest income in Corporate Services, partially offset by lower balances in U.S. Banking.
BMO’s overall reported net interest margin of 1.68% increased 6 basis points from the prior year. Net interest margin, excluding Global Markets and Insurance, was 2.33%, an increase of 20 basis points, primarily due to higher deposit margins from the benefit of ladder reinvestment rates, a favourable deposit mix and disciplined pricing, as well as higher net interest income and lower low-yielding average assets in Corporate Services.
Reported non-interest revenue was $4,181 million, an increase of $313 million or 8% from the prior year, and adjusted non-interest revenue was $4,197 million, an increase of $329 million or 9%, with increases across most categories, primarily driven by higher wealth management fees, trading revenue, underwriting and advisory fee revenue, as well as above-trend card fee revenue in Canadian Personal and Business Banking due to revised future redemption assumptions in the current quarter. Trading non-interest revenue of $866 million increased $64 million from the prior year.
BMO Financial Group First Quarter Report 2026 11
Q1 2026 vs. Q4 2025
Reported revenue increased $483 million or 5% from the prior quarter, and adjusted revenue increased $499 million or 5%. Revenue increased across all operating segments and decreased in Corporate Services.
Reported and adjusted net interest income increased $147 million or 3% from the prior quarter, driven by higher trading-related net interest income and higher net interest margin, partially offset by lower net interest income in Corporate Services.
BMO’s overall reported net interest margin increased 1 basis point from the prior quarter. Net interest margin, excluding Global Markets and Insurance, increased 3 basis points, primarily due to higher deposit margins, partially offset by lower net interest income in Corporate Services.
Reported non-interest revenue increased $336 million or 9% from the prior quarter, and adjusted non-interest revenue increased $352 million or 9%, due to higher trading revenue, wealth management fees and above-trend card fee revenue noted above, partially offset by lower securities gains, excluding trading, and underwriting and advisory fee revenue. Trading non-interest revenue increased $309 million from the prior quarter.
Change in Net Interest Income, Average Earning Assets and Net Interest Margin (1)
TABLE 7
(Canadian $ in millions, except as noted)
Net interest income (teb) (2)
Average earning assets (3)
Net interest margin (in basis points)
Q1-2026
Q4-2025
Q1-2025
Q1-2026
Q4-2025
Q1-2025
Q1-2026
Q4-2025
Q1-2025
Canadian P&C
2,523
2,464
2,385
344,866
344,411
339,325
290
284
279
U.S. Banking
2,267
2,234
2,322
224,843
229,046
243,645
400
387
378
All other operating segments and Corporate Services
853
798
691
764,679
730,821
736,571
na
na
na
Total reported
5,643
5,496
5,398
1,334,388
1,304,278
1,319,541
168
167
162
Global Markets net interest income, and Global Markets and Insurance assets
369
266
397
436,238
402,940
387,786
na
na
na
Total reported, excluding Global Markets and Insurance
5,274
5,230
5,001
898,150
901,338
931,755
233
230
213
U.S. Banking (US$ in millions)
1,648
1,609
1,623
163,417
164,942
170,348
400
387
378
(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 segment revenue is presented on a taxable equivalent basis (teb) in net interest income. For further information, refer to the How BMO Reports Operating Segments Results section in BMO’s 2025 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 a period.
na – not applicable
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Total Provision for Credit Losses
TABLE 8
Wealth
Capital
Corporate
(Canadian $ in millions)
Canadian P&C
U.S. Banking
Management
Markets
Services
Total Bank
Q1-2026
Provision for credit losses on impaired loans
497
202
2
29
9
739
Provision (recovery of provision) for credit losses on performing loans
18
17
(4)
(21)
(3)
7
Total provision (recovery of provision) for credit losses
515
219
(2)
8
6
746
Total PCL-to-average net loans and acceptances (%) (1)
0.60
0.41
(0.02)
0.04
nm
0.44
PCL on impaired loans-to-average net loans and acceptances (%) (1)
0.58
0.38
0.03
0.14
nm
0.44
Q4-2025
Provision for credit losses on impaired loans
496
209
5
37
3
750
Provision (recovery of provision) for credit losses on performing loans
153
(90)
(1)
(39)
(18)
5
Total provision (recovery of provision) for credit losses
649
119
4
(2)
(15)
755
Total PCL-to-average net loans and acceptances (%) (1)
0.76
0.22
0.05
(0.01)
nm
0.44
PCL on impaired loans-to-average net loans and acceptances (%) (1)
0.58
0.38
0.06
0.18
nm
0.44
Q1-2025
Provision for credit losses on impaired loans
491
312
1
35
20
859
Provision (recovery of provision) for credit losses on performing loans
51
102
(1)
11
(11)
152
Total provision (recovery of provision) for credit losses
542
414
–
46
9
1,011
Total PCL-to-average net loans and acceptances (%) (1)
0.64
0.71
0.00
0.21
nm
0.58
PCL on impaired loans-to-average net loans and acceptances (%) (1)
0.58
0.54
0.01
0.16
nm
0.50
(1)PCL ratios are presented on an annualized basis.
nm – not meaningful
Certain comparative figures have been reclassified to conform with the current year’s presentation.
Q1 2026 vs. Q1 2025
Total provision for credit losses was $746 million, compared with a provision of $1,011 million in the prior year. Total provision for credit losses as a percentage of average net loans and acceptances was 44 basis points, compared with 58 basis points in the prior year. The provision for credit losses on impaired loans was $739 million, a decrease of $120 million, largely due to lower provisions in U.S. Banking. The provision for credit losses on impaired loans as a percentage of average net loans and acceptances was 44 basis points, compared with 50 basis points in the prior year. There was a $7 million provision for credit losses on performing loans, compared with a $152 million provision in the prior year. The provision for credit losses on performing loans in the current quarter primarily reflected portfolio credit migration, partially offset by lower balances in certain portfolios and improvement in the macroeconomic scenarios.
12 BMO Financial Group First Quarter Report 2026
Q1 2026 vs. Q4 2025
Total provision for credit losses decreased $9 million from the prior quarter. The provision for credit losses on impaired loans decreased $11 million, largely due to lower provisions in Capital Markets and U.S. Banking. The provision for credit losses on impaired loans as a percentage of average net loans and acceptances was relatively unchanged from the prior quarter. The provision for credit losses on performing loans was relatively unchanged from the prior quarter.
Impaired Loans
TABLE 9
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
GIL, beginning of period
7,091
6,951
5,843
Classified as impaired during the period
1,452
1,835
2,373
Transferred to performing during the period
(351)
(235)
(364)
Net repayments
(779)
(779)
(616)
Amounts written-off
(423)
(660)
(424)
Disposals of loans
(19)
(65)
(2)
Foreign exchange and other movements
(108)
44
144
GIL, end of period
6,863
7,091
6,954
GIL to gross loans and acceptances (%)
1.02
1.04
1.00
Total gross impaired loans and acceptances (GIL) were $6,863 million, a decrease from $7,091 million in the prior quarter, largely due to lower formations in impaired loans. GIL as a percentage of gross loans and acceptances was 1.02%, a decrease from 1.04% in the prior quarter.
Loans classified as impaired during the quarter were $1,452 million, a decrease from $1,835 million in the prior quarter, reflecting lower formations in business and government lending.
Factors contributing to the change in GIL are outlined in the table above.
Non-Interest Expense
Q1 2026 vs. Q1 2025
Reported non‑interest expense was $5,753 million, an increase of $326 million or 6% from the prior year, and adjusted non‑interest expense was $5,691 million, an increase of $469 million or 9%. Severance costs in the quarter contributed 4% to the increase. The impact of the weaker U.S. dollar decreased non-interest expense by 2% on both a reported basis and an adjusted basis.
Reported results included the impact of aligning accounting policies for employee vacation across legal entities in the prior year and a larger partial reversal of the FDIC special assessment in the current quarter. Reported and adjusted non-interest expense increased, primarily due to higher employee-related expenses, including severance and performance-based compensation, and higher computer and equipment costs, partially offset by the impact of the weaker U.S. dollar.
Reported efficiency ratio was 58.6%, unchanged from the prior year, and adjusted efficiency ratio was 57.8%, compared with 56.3%. Reported operating leverage was nil and adjusted operating leverage was negative 2.8%, due to the severance charge noted above.
Q1 2026 vs. Q4 2025
Reported non-interest expense increased $197 million or 4% from the prior quarter, and adjusted non-interest expense increased $397 million or 8%.
Reported non-interest expense included the impact of the write-down of goodwill related to the announced sale of branches in certain U.S. markets in the prior quarter, lower amortization of acquisition-related intangible assets and a larger partial reversal of the FDIC special assessment. The increase in adjusted non-interest expense was primarily due to higher employee-related expenses, including severance, and stock-based compensation for employees eligible to retire and seasonal benefits that are expensed in the first quarter of each year. These were partially offset by lower professional fees, computer and equipment, advertising and premises costs.
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 $836 million, an increase of $146 million from the prior year, and an increase of $101 million from the prior quarter. The reported effective tax rate was 25.2%, compared with 24.4% in the prior year and 24.2% in the prior quarter. The adjusted provision for income taxes was $852 million, an increase of $108 million from the prior year, and an increase of $74 million from the prior quarter. The adjusted effective tax rate was 25.0%, compared with 24.5% in the prior year and 23.6% in the prior quarter.
The change in the reported effective tax rate relative to the prior year and the prior quarter was primarily due to the impact of lower income in the prior year and the prior quarter. The change in the adjusted effective tax rate relative to the prior year was primarily due to the impact of lower income in the prior year. The change in the adjusted effective tax rate relative to the prior quarter was primarily due to earnings mix and the impact of lower income in 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 Provision for Income Taxes section.
BMO Financial Group First Quarter Report 2026 13
Balance Sheet
TABLE 10
(Canadian $ in millions)
As at January 31, 2026
As at October 31, 2025
Assets
Cash and cash equivalents and interest bearing deposits with banks
70,248
70,322
Securities
421,331
423,476
Securities borrowed or purchased under resale agreements
109,725
129,421
Net loans and acceptances
669,316
677,872
Derivative instruments
69,398
57,151
Other assets
118,114
118,560
Total assets
1,458,132
1,476,802
Liabilities and Equity
Deposits
954,789
976,202
Derivative instruments
65,392
58,729
Securities lent or sold under repurchase agreements
132,280
134,967
Other liabilities
211,508
210,304
Subordinated debt
8,412
8,500
Equity
85,705
88,051
Non-controlling interest in subsidiaries
46
49
Total liabilities and equity
1,458,132
1,476,802
Total assets were $1,458.1 billion as at January 31, 2026, a decrease of $18.7 billion from October 31, 2025. The impact of the weaker U.S. dollar decreased assets by $23.3 billion, excluding the impact on derivative assets.
Cash and cash equivalents and interest bearing deposits with banks were relatively unchanged from the prior quarter, as higher balances held with central banks were offset by the impact of the weaker U.S. dollar.
Securities decreased $2.1 billion, with higher levels of client activity in Capital Markets more than offset by the impact of the weaker U.S. dollar.
Securities borrowed or purchased under resale agreements decreased $19.7 billion, due to lower levels of client activity in Capital Markets and the impact of the weaker U.S. dollar.
Net loans and acceptances decreased $8.6 billion, primarily due to the impact of the weaker U.S. dollar. Business and government loans and acceptances decreased $5.2 billion, with underlying loan growth more than offset by the impact of the weaker U.S. dollar. Residential mortgages decreased $1.9 billion. Consumer instalment and other personal decreased $0.9 billion and credit card balances decreased $0.5 billion.
Derivative assets increased $12.2 billion, driven by an increase in the fair value of commodity, foreign exchange and interest rate contracts.
Other assets decreased $0.4 billion, primarily due to the impact of the weaker U.S. dollar, partially offset by higher balances in Wealth Management, Corporate Services and Capital Markets.
Liabilities decreased $16.3 billion from October 31, 2025. The impact of the weaker U.S. dollar decreased liabilities by $22.3 billion, excluding the impact on derivative liabilities.
Deposits decreased $21.4 billion. Customer deposits decreased $12.0 billion, primarily due to the impact of the weaker U.S. dollar, moderately lower balances in Canadian P&C and U.S. Banking, partially offset by higher balances in Wealth Management and Capital Markets. Other deposits decreased $9.4 billion, due to the impact of the weaker U.S. dollar and lower balances in Global Markets.
Derivative liabilities increased $6.7 billion, driven by an increase in the fair value of foreign exchange, commodity and equity contracts.
Securities lent or sold under repurchase agreements decreased $2.7 billion, due to the impact of the weaker U.S. dollar, partially offset by higher levels of client activity in Capital Markets.
Other liabilities increased $1.2 billion, primarily in Capital Markets, due to higher securitization liabilities, partially offset by the impact of the weaker U.S. dollar.
Subordinated debt was relatively unchanged from the prior quarter, with no new issuances or redemptions during the quarter.
Equity decreased $2.3 billion from October 31, 2025. Accumulated other comprehensive income decreased $1.8 billion, primarily due to a decline in accumulated other comprehensive income on translation of net foreign operations, losses on cash flow hedges and remeasurement of own credit risk on financial liabilities designated at fair value. Preferred shares and other equity instruments decreased $1.3 billion, due to the redemption of our Limited Recourse Capital Notes, Series 1 (NVCC). Retained earnings increased $0.3 billion, as a result of net income earned in the year, partially offset by dividends and distributions on other equity instruments and the purchase of common shares for cancellation under the normal course issuer bid (NCIB). Common shares increased $0.3 billion.
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.
14 BMO Financial Group First Quarter Report 2026
Capital Management
BMO continues to manage its capital within the framework described in the Enterprise-Wide Capital Management section of BMO’s 2025 Annual Report.
First Quarter 2026 Regulatory Capital Review
BMO’s Common Equity Tier 1 (CET1) Ratio was 13.1% as at January 31, 2026, a decrease from 13.3% at the end of the fourth quarter of 2025, as internal capital generation was more than offset by higher source currency risk-weighted assets (RWA) and the impact of the purchase of common shares for cancellation.
CET1 Capital was $57.8 billion as at January 31, 2026, a decrease from $58.3 billion as at October 31, 2025, with internal capital generation more than offset by the impact of common shares purchased for cancellation and the impact of foreign exchange movements.
RWA were $442.1 billion as at January 31, 2026, an increase from $437.9 billion as at October 31, 2025. RWA increased due to higher credit, market and operational risk RWA, partially offset by the impact of foreign exchange movements. The increase in credit risk RWA was primarily due to methodology and model changes, and an increase in asset size, partially offset by changes in asset quality.
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, 2026, unchanged from October 31, 2025.
The bank’s Tier 1 and Total Capital Ratios were 14.8% and 16.9%, respectively, as at January 31, 2026, compared with 15.0% and 17.3%, respectively, as at October 31, 2025. The Tier 1 Capital Ratio and Total Capital Ratio were lower, due to the same factors impacting the CET1 Capital Ratio.
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, and during the current quarter, this impact was largely offset.
Our Leverage Ratio was 4.4% as at January 31, 2026, an increase from 4.3% at the end of the fourth quarter of 2025, driven by lower leverage exposures, partially offset by lower Tier 1 Capital.
The bank’s risk-based Total Loss Absorbing Capacity (TLAC) Ratio and TLAC Leverage Ratio were 29.1% and 8.6%, respectively, as at January 31, 2026, compared with 29.7% and 8.5%, respectively, as at October 31, 2025.
Regulatory Capital Developments
OSFI’s revised Capital Adequacy Requirements (CAR) Guideline and the Capital and Liquidity Treatment of Crypto-Asset Exposures (Banking) Guideline were effective the first quarter of fiscal 2026. These changes did not have a material impact.
On December 18, 2025, OSFI announced that the Domestic Stability Buffer (DSB) will remain at 3.5%.
For a discussion on other regulatory developments, refer to the Enterprise-Wide Capital Management section of BMO’s 2025 Annual Report.
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 2025 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 requirements
Total Pillar 1 Capital buffer (1)
Tier 1 Capital buffer (2)
Minimum requirements before domestic stability buffer
Domestic stability buffer (3)
Minimum capital, leverage and TLAC requirements including capital buffers
BMO capital, leverage and TLAC ratios as at January 31, 2026
Common Equity Tier 1 Ratio
4.5%
3.5%
na
8.0%
3.5%
11.5%
13.1%
Tier 1 Capital Ratio
6.0%
3.5%
na
9.5%
3.5%
13.0%
14.8%
Total Capital Ratio
8.0%
3.5%
na
11.5%
3.5%
15.0%
16.9%
TLAC Ratio
21.5%
na
na
21.5%
3.5%
25.0%
29.1%
Leverage Ratio
3.0%
na
0.5%
3.5%
na
3.5%
4.4%
TLAC Leverage Ratio
6.75%
na
0.5%
7.25%
na
7.25%
8.6%
(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
BMO Financial Group First Quarter Report 2026 15
Regulatory Capital and TLAC Position
TABLE 12
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
Gross common equity (1)
77,999
79,095
79,772
Regulatory adjustments applied to common equity
(20,198)
(20,809)
(20,575)
Common Equity Tier 1 Capital (CET1)
57,801
58,286
59,197
Additional Tier 1 Eligible Capital (2)
7,706
7,706
7,787
Regulatory adjustments applied to Tier 1 Capital
(82)
(102)
(135)
Additional Tier 1 Capital (AT1)
7,624
7,604
7,652
Tier 1 Capital (T1 = CET1 + AT1)
65,425
65,890
66,849
Tier 2 Eligible Capital (3)
9,466
9,679
9,494
Regulatory adjustments applied to Tier 2 Capital
(1)
(7)
(3)
Tier 2 Capital (T2)
9,465
9,672
9,491
Total Capital (TC = T1 + T2)
74,890
75,562
76,340
Other TLAC instruments (4)
53,652
54,510
53,148
Adjustments applied to Other TLAC
(88)
(115)
(113)
Other TLAC available after adjustments
53,564
54,395
53,035
TLAC
128,454
129,957
129,375
Risk-Weighted Assets (5)
442,058
437,945
433,944
Leverage Ratio Exposures
1,488,813
1,521,813
1,529,299
Capital, Leverage and TLAC Ratios (%)
CET1 Ratio
13.1
13.3
13.6
Tier 1 Capital Ratio
14.8
15.0
15.4
Total Capital Ratio
16.9
17.3
17.6
TLAC Ratio
29.1
29.7
29.8
Leverage Ratio
4.4
4.3
4.4
TLAC Leverage Ratio
8.6
8.5
8.5
(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
Number of
Amount
As at January 31, 2026
shares
(in millions)
Common shares
706,195,754
$23,708
Class B Preferred shares (2)
Series 44
16,000,000
$400
Series 50
500,000
$500
Series 52
650,000
$650
Other Equity Instruments (2)
4.800% Additional Tier 1 Capital Notes (3)
US$500
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
6.875% Limited Recourse Capital Notes, Series 6 (LRCNs)
US$1,000
Medium-Term Notes
3.803% Subordinated Notes due 2032
US$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
Series N - First Tranche
$1,250
Stock options
Vested
2,706,330
Non-vested
3,148,295
(1)Details on the Medium-Term Notes are outlined in Note 16 of the audited consolidated financial statements of BMO’s 2025 Annual Report. Details on share capital and other equity instruments are outlined in Note 6 of the unaudited interim consolidated financial statements and Note 16 of the audited annual consolidated financial statements of BMO’s 2025 Annual Report.
(2)Convertible into common shares. For LRCNs, convertible into common shares by virtue of the recourse to the Preferred Shares Preferred Shares Series 49, Preferred Shares Series 51, Preferred Shares 53, Preferred Shares 54, and Preferred Shares 55 for Series 2, Series 3, Series 4, Series 5, and Series 6 LRCNs, respectively, issued concurrently with the LRCNs, which currently comprise the limited recourse trust assets.
(3)The notes had an initial interest rate of 4.800% and reset on August 25, 2024 to 6.709%.
If a 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 4.4 billion BMO common shares, assuming no accrued interest and no declared and unpaid dividends.
16 BMO Financial Group First Quarter Report 2026
Other Capital Developments
On November 12, 2025, we redeemed the $1,250 million 4.300% LRCNs, Series 1 (NVCC) and the corresponding $1,250 million Non-Cumulative 5-Year Fixed Rate Reset Class B Preferred Shares, Series 48 (NVCC).
As part of the acquisition of Burgundy on November 1, 2025, we issued 2,723,726 common shares with an aggregate value of $481 million to shareholders of Burgundy.
BMO has a normal course issuer bid (NCIB) to purchase up to 30 million of our common shares for cancellation which commenced on September 5, 2025 and ends no later than September 4, 2026. The timing and amount of purchases under the NCIB are determined by management, based on factors such as market conditions and capital levels. During the three months ended January 31, 2026, we purchased for cancellation 6.0 million common shares under the NCIB, at an average price of $178.05 per share for a total amount of $1,088 million, including tax. The bank has purchased a total of 11.8 million common shares for cancellation under the NCIB as at January 31, 2026.
Dividends
On February 25, 2026, BMO announced that the Board of Directors had declared a quarterly dividend on common shares of $1.67 per share, unchanged from the prior quarter and an $0.08 increase from the prior year. The dividend is payable on May 26, 2026 to shareholders of record on April 29, 2026. 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.
Operating Segments Performance Review
How BMO Reports Operating Segments Results
BMO reports financial results for its four operating segments, Canadian Personal and Commercial Banking, U.S. Banking, Wealth Management and Capital Markets, all of which are supported by Corporate Units and Technology and Operations (T&O) within Corporate Services. Operating segments results include allocations from Corporate Services for treasury-related revenue, corporate and T&O expenses, taxes 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 allocation methodologies at least annually and update these as appropriate.
Capital is allocated to the operating segments based on the amount of regulatory capital required to support business activities, including risk-weighted assets and capital deductions. Effective the first quarter of fiscal 2026, the allocation approach was updated, primarily to reflect an increase in the capital allocation rate to 12.5% of risk-weighted assets, compared with 12.0% in fiscal 2025. Unallocated capital is reported in Corporate Services. We review our capital allocation methodologies at least annually and update these as appropriate.
Periodically, certain lines of business and units within our organizational structure are realigned to support our strategic priorities. In addition, revenue and expense allocations, including between operating segments, are updated to more accurately align with these priorities. Results for prior periods are reclassified to conform with the current period’s presentation.
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). Similar to many banks, BMO analyzes revenue on a teb basis at the operating segment level. Net interest income, total revenue and provision for (recovery of) income taxes in Capital Markets and U.S. Banking are increased on tax-exempt securities to equivalent pre-tax amounts in order to facilitate comparisons of income from taxable and tax-exempt sources, and are reflected in the key performance metrics. The offset to the segment teb adjustments is reflected in Corporate Services net interest income, total revenue and provision for (recovery of) income taxes.
Caution
This How BMO Reports Operating Segments Results section contains forward-looking statements. Please refer to the Caution Regarding Forward-Looking Statements.
BMO Financial Group First Quarter Report 2026 17
Canadian Personal and Commercial Banking (Canadian P&C) (1)
TABLE 14
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
Net interest income
2,523
2,464
2,385
Non-interest revenue
735
638
658
Total revenue
3,258
3,102
3,043
Provision for credit losses on impaired loans
497
496
491
Provision for credit losses on performing loans
18
153
51
Total provision for credit losses (PCL)
515
649
542
Non-interest expense
1,437
1,445
1,293
Income before income taxes
1,306
1,008
1,208
Provision for income taxes
358
275
331
Reported net income
948
733
877
Dividends on preferred shares and distributions on other equity instruments
13
11
12
Net income available to common shareholders
935
722
865
Amortization of acquisition-related intangible assets (2)
3
48
3
Adjusted net income
951
781
880
Adjusted net income available to common shareholders
938
770
868
Adjusted non-interest expense
1,433
1,377
1,289
Key Performance Metrics
Personal and Business Banking revenue
2,306
2,194
2,179
Commercial Banking revenue
952
908
864
Return on equity (%) (3) (4)
22.6
16.9
20.8
Adjusted return on equity (%) (3) (4)
22.7
18.1
20.9
Operating leverage (%)
(4.1)
(2.7)
3.7
Adjusted operating leverage (%)
(4.1)
0.7
3.6
Efficiency ratio (%)
44.1
46.6
42.5
Adjusted efficiency ratio (%)
44.0
44.4
42.3
PCL on impaired loans-to-average net loans and acceptances (%) (4)
0.58
0.58
0.58
Net interest margin on average earning assets (%)
2.90
2.84
2.79
Average earning assets
344,866
344,411
339,325
Average gross loans and acceptances
343,093
342,659
337,611
Average deposits
311,425
312,344
313,950
(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. Q4-2025 included a $64 million impairment related to AIR MILES.
(3)Return on equity is based on allocated capital. For further information, refer to the How BMO Reports Operating Segments Results section.
(4)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 2026 vs. Q1 2025
Canadian P&C reported net income was $948 million, an increase of $71 million or 8% from the prior year.
Total revenue was $3,258 million, an increase of $215 million or 7% from the prior year. Net interest income increased $138 million or 6%, primarily due to higher net interest margin and higher balances. Non-interest revenue increased $77 million or 12%, primarily due to above-trend card fee revenue in Personal and Business Banking due to revised future redemption assumptions in the current quarter, as well as higher gains on investments in our Commercial Banking business and higher mutual fund distribution fee revenue. Net interest margin of 2.90% increased 11 basis points from the prior year, primarily due to higher deposit and loan margins, partially offset by a change in product mix.
Personal and Business Banking revenue increased $127 million or 6% and Commercial Banking revenue increased $88 million or 10%, both due to higher net interest income and higher non-interest revenue.
Total provision for credit losses was $515 million, a decrease of $27 million from the prior year. The provision for credit losses on impaired loans was $497 million, an increase of $6 million, with higher provisions in Personal and Business Banking, partially offset by lower provisions in Commercial Banking. There was a $18 million provision for credit losses on performing loans in the current quarter, compared with a $51 million provision in the prior year.
Non-interest expense was $1,437 million, an increase of $144 million or 11% from the prior year, reflecting higher employee-related expenses, including severance, and higher technology costs.
Average gross loans and acceptances increased $5.5 billion or 2% from the prior year to $343.1 billion. Personal and Business Banking loan balances increased 2%, primarily reflecting growth in residential mortgages. Commercial Banking loan balances increased 2% and credit card balances decreased 6%. Average deposits decreased $2.5 billion or 1% from the prior year to $311.4 billion, with lower term deposits, partially offset by higher operating deposits. Personal and Business Banking deposits decreased 3% and Commercial Banking deposits increased 4%.
Q1 2026 vs. Q4 2025
Reported net income increased $215 million or 29% from the prior quarter.
Total revenue increased $156 million or 5% from the prior quarter. Net interest income increased $59 million or 2%, primarily due to higher net interest margin. Non-interest revenue increased $97 million or 15% from the prior quarter, primarily due to above-trend card fee revenue noted above, and higher gains on investments in our commercial business. Net interest margin of 2.90% increased 6 basis points from the prior quarter, primarily due to higher deposit margins.
Personal and Business Banking revenue increased $112 million or 5% and Commercial Banking revenue increased $44 million or 5%, both due to higher net interest income and higher non-interest revenue.
18 BMO Financial Group First Quarter Report 2026
Total provision for credit losses decreased $134 million from the prior quarter, largely due to a lower provision on performing loans, while the provision on impaired loans was relatively unchanged.
Non-interest expense decreased $8 million or 1% from the prior quarter, primarily due to lower amortization of acquisition-related intangible assets reflecting an impairment related to AIR MILES in the prior quarter, partially offset by higher employee-related expenses, including severance and the impact of stock-based compensation for employees eligible to retire that is expensed in the first quarter of each year.
Average gross loans and acceptances increased $0.4 billion from the prior quarter. Average deposits decreased $0.9 billion from the prior quarter as strong growth in operating deposits was more than offset by lower term deposits. Personal and Business Banking deposits decreased 1% and Commercial Banking deposits increased 1%.
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 Operating Segments Performance Review section.
U.S. Banking (1)
TABLE 15
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
Net interest income (teb) (2)
2,267
2,234
2,322
Non-interest revenue
629
641
642
Total revenue (teb) (2)
2,896
2,875
2,964
Provision for credit losses on impaired loans
202
209
312
Provision (recovery of provision) for credit losses on performing loans
17
(90)
102
Total provision for credit losses (PCL)
219
119
414
Non-interest expense
1,734
1,719
1,752
Income before income taxes
943
1,037
798
Provision for income taxes (teb) (2)
201
230
163
Reported net income
742
807
635
Dividends on preferred shares and distributions on other equity instruments
14
15
15
Net income (loss) attributable to non-controlling interest in subsidiaries
(2)
7
–
Net income available to common shareholders
730
785
620
Amortization of acquisition-related intangible assets (3)
60
64
72
Adjusted net income
802
871
707
Adjusted net income available to common shareholders
790
849
692
Adjusted non-interest expense
1,653
1,634
1,655
Average earning assets
224,843
229,046
243,645
Average gross loans and acceptances
215,479
218,999
232,078
Average deposits
235,206
236,483
257,741
(US$ equivalent in millions)
Net interest income (teb) (2)
1,648
1,609
1,623
Non-interest revenue
457
463
449
Total revenue (teb) (2)
2,105
2,072
2,072
Provision for credit losses on impaired loans
148
151
217
Provision (recovery of provision) for credit losses on performing loans
12
(65)
70
Total provision for credit losses
160
86
287
Non-interest expense
1,260
1,238
1,225
Income before income taxes
685
748
560
Provision for income taxes (teb) (2)
146
166
114
Reported net income
539
582
446
Dividends on preferred shares and distributions on other equity instruments
10
11
11
Net income (loss) attributable to non-controlling interest in subsidiaries
(1)
5
–
Net income available to common shareholders
530
566
435
Amortization of acquisition-related intangible assets (3)
44
45
50
Adjusted net income
583
627
496
Adjusted net income available to common shareholders
574
611
485
Adjusted non-interest expense
1,201
1,178
1,157
Key Performance Metrics (US$ basis)
Personal and Business Banking revenue
754
753
715
Commercial Banking revenue
1,134
1,100
1,156
Private Wealth revenue
217
219
201
Return on equity (%) (4) (5)
7.9
8.5
6.5
Adjusted return on equity (%) (4) (5)
8.5
9.2
7.2
Operating leverage (%)
(1.3)
4.4
3.8
Adjusted operating leverage (%)
(2.2)
3.6
3.2
Efficiency ratio (%)
59.9
59.8
59.1
Adjusted efficiency ratio (%)
57.1
56.9
55.9
Net interest margin on average earning assets (%)
4.00
3.87
3.78
PCL on impaired loans-to-average net loans and acceptances (%) (5)
0.38
0.38
0.54
Average earning assets
163,417
164,942
170,348
Average gross loans and acceptances
156,612
157,706
162,258
Average deposits
170,947
170,295
180,205
Assets under administration (6)
125,263
104,368
103,501
Assets under management (6)
85,751
83,036
70,469
(1)Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.
(2)Net interest income, total revenue and the provision for income taxes are presented on a taxable equivalent basis (teb) and are reflected in the ratios. Teb amounts of $7 million in Q1-2026, $8 million in Q4-2025 and $9 million in Q1-2025 are offset in Corporate Services. On a source currency basis: US$5 million in Q1-2026, US$6 million in both Q4-2025 and Q1-2025.
BMO Financial Group First Quarter Report 2026 19
(3)Amortization of acquisition-related intangible assets and any impairments, recorded in non‑interest expense. On a source currency basis: US$59 million in Q1-2026, US$60 million in Q4-2025, and US$68 million in Q1-2025.
(4)Return on equity is based on allocated capital. For further information, refer to the How BMO Reports Operating Segments Results section.
(5)Return on equity and PCL ratios are presented on an annualized basis.
(6)Relates to Private Wealth. Assets under administration excludes assets under custody.
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Q1 2026 vs. Q1 2025
U.S. Banking reported net income was $742 million, an increase of $107 million or 17% from the prior year. The impact of the weaker U.S. dollar decreased net income by 5%, and revenue and expenses by 4%, respectively. All amounts in the remainder of this section are presented on a U.S. dollar basis.
Reported net income was $539 million, an increase of $93 million or 21% from the prior year.
Total revenue was $2,105 million, an increase of $33 million or 2% from the prior year. Net interest income increased $25 million or 2%, due to higher net interest margin, partially offset by lower balances. Non-interest revenue increased $8 million or 2% from the prior year, primarily due to higher investment management, deposit and advisory fee revenue, partially offset by lower lending fee revenue. Net interest margin of 4.00% increased 22 basis points, primarily due to higher deposit margins, partially offset by lower deposit balances.
Personal and Business Banking revenue increased $39 million or 5%, primarily due to higher net interest income. Commercial Banking revenue decreased $22 million or 2%, primarily due to lower net interest income. Private Wealth revenue increased $16 million or 8%, primarily due to higher non-interest revenue.
Total provision for credit losses was $160 million, a decrease of $127 million from the prior year. The provision for credit losses on impaired loans was $148 million, a decrease of $69 million, largely due to lower provisions in Commercial Banking. There was a $12 million provision for credit losses on performing loans in the current quarter, compared with a $70 million provision in the prior year.
Non-interest expense was $1,260 million, an increase of $35 million or 3% from the prior year, primarily due to higher employee-related expenses, including severance and investments in talent.
Average gross loans and acceptances decreased $5.7 billion or 3% from the prior year to $156.6 billion. Commercial Banking balances decreased 6% reflecting balance sheet optimization initiatives, with Personal and Business Banking balances relatively unchanged from the prior year. Private Wealth balances increased 10%. Average total deposits decreased $9.3 billion or 5% from the prior year to $170.9 billion, driven by lower term deposits. Personal and Business Banking deposits decreased 8%, Commercial Banking deposits decreased 2% and Private Wealth deposits decreased 5%.
Assets under management increased $15.3 billion or 22% from the prior year to $85.8 billion, driven by stronger markets and higher client assets. Assets under administration increased $21.8 billion or 21% to $125.3 billion, primarily driven by stronger markets.
Q1 2026 vs. Q4 2025
Reported net income decreased $65 million or 8% from the prior quarter. All amounts in the remainder of this section are presented on a U.S. dollar basis.
Reported net income decreased $43 million or 7% from the prior quarter.
Total revenue increased $33 million or 2% from the prior quarter. Net interest income increased $39 million or 2%, primarily due to higher net interest margin. Non-interest revenue was relatively unchanged from the prior quarter. Net interest margin increased 13 basis points, primarily due to higher deposit and loan margins.
Commercial Banking revenue increased $34 million or 3%, due to higher net interest income, partially offset by lower non-interest revenue, with Personal and Business Banking and Private Wealth revenue relatively unchanged from the prior quarter.
Total provision for credit losses increased $74 million from the prior quarter, largely due to higher provisions on performing loans. The provision for credit losses on impaired loans decreased $3 million, with lower provisions in Commercial banking partially offset by higher provisions in Personal and Business Banking. There was a $12 million provision for credit losses on performing loans in the current quarter, compared with a $65 million recovery in the prior quarter.
Non-interest expense increased $22 million or 2% from the prior quarter, primarily due to higher employee-related expenses, including severance and the impact of stock-based compensation for employees eligible to retire that is expensed in the first quarter of each year, and higher technology costs, partially offset by lower advertising costs.
Average gross loans and acceptances decreased $1.1 billion or 1% from the prior quarter, due to lower Commercial Banking and Personal and Business Banking balances. Average total deposits were relatively unchanged from the prior quarter. Commercial Banking deposits increased 3% and Personal and Business Banking deposits decreased 2%, with Private Wealth deposits relatively unchanged.
Assets under management increased $2.7 billion or 3%, driven by stronger markets and higher client assets. Assets under administration increased $20.9 billion or 20%, due to stronger markets.
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 Operating Segments Performance Review section.
20 BMO Financial Group First Quarter Report 2026
Wealth Management (1)
TABLE 16
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
Net interest income
290
274
238
Non-interest revenue
1,210
1,168
1,082
Total revenue
1,500
1,442
1,320
Provision for credit losses on impaired loans
2
5
1
Provision (recovery of provision) for credit losses on performing loans
(4)
(1)
(1)
Total provision (recovery of provision) for credit losses (PCL)
(2)
4
–
Non-interest expense
1,030
908
883
Income before income taxes
472
530
437
Provision for income taxes
120
131
109
Reported net income
352
399
328
Dividends on preferred shares and distributions on other equity instruments
2
2
2
Net income available to common shareholders
350
397
326
Acquisition and integration costs (2)
7
1
–
Amortization of acquisition-related intangible assets (3)
5
–
–
Change in fair value of contingent consideration (4)
16
–
–
Adjusted net income
380
400
328
Adjusted net income available to common shareholders
378
398
326
Adjusted total revenue
1,516
1,442
1,320
Adjusted non-interest expense
1,015
906
883
Key Performance Metrics
Wealth and Asset Management reported net income
273
320
245
Wealth and Asset Management adjusted net income
301
321
245
Insurance reported net income
79
79
83
Return on equity (%) (5) (6)
33.1
51.7
42.5
Adjusted return on equity (%) (5) (6)
35.7
52.0
42.5
Efficiency ratio (%)
68.7
63.0
66.8
Adjusted efficiency ratio (%)
66.9
62.9
66.8
Operating leverage (%)
(3.1)
4.8
10.8
Adjusted operating leverage (%)
(0.2)
5.1
10.8
PCL on impaired loans-to-average net loans and acceptances (%) (6)
0.03
0.06
0.01
Average assets
56,164
53,776
52,550
Average gross loans and acceptances
30,802
30,400
29,702
Average deposits
57,405
54,324
49,936
Assets under administration (7)
288,269
282,258
256,092
Assets under management
430,512
390,282
348,338
(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 Burgundy, recorded in non-interest expense.
(3)Amortization of acquisition-related intangible assets and any impairments, recorded in non‑interest expense.
(4)Change in fair value of contingent consideration related to the acquisition of Burgundy, recorded in non-interest revenue.
(5)Return on equity is based on allocated capital. For further information, refer to the How BMO Reports Operating Segments Results section.
(6)Return on equity and PCL ratios are presented on an annualized basis.
(7)Certain assets under management that are also administered by the bank are included in assets under administration.
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Q1 2026 vs. Q1 2025
Wealth Management reported net income was $352 million, an increase of $24 million or 7% from the prior year. Wealth and Asset Management net income was $273 million, an increase of $28 million or 11%, and Insurance net income was $79 million, a decrease of $4 million or 5%.
Total revenue was $1,500 million, an increase of $180 million or 14% from the prior year. Revenue in Wealth and Asset Management was $1,372 million, an increase of $186 million or 16%, primarily due to the impact of stronger global markets and net sales, growth in deposit and loan balances and the inclusion of Burgundy, partially offset by a change in fair value of contingent consideration related to the acquisition. Insurance revenue was $128 million, a decrease of $6 million or 4%, due to lower service results, partially offset by higher investment results driven by effective portfolio optimization.
Total recovery of the provision for credit losses was $2 million, compared with nil in the prior year.
Non-interest expense was $1,030 million, an increase of $147 million or 17%, primarily due to higher employee-related expenses, including higher revenue-based costs and severance, and the impact of Burgundy.
Assets under management increased $82.2 billion or 24% from the prior year to $430.5 billion, primarily due to stronger global markets and higher client assets, as well as the inclusion of Burgundy. Assets under administration increased $32.2 billion or 13% to $288.3 billion, primarily driven by stronger global markets. Average gross loans increased 4% and average deposits increased 15%.
Q1 2026 vs. Q4 2025
Reported net income decreased $47 million or 12% from the prior quarter. Wealth and Asset Management reported net income decreased $47 million or 15% from the prior quarter, and Insurance net income was relatively unchanged.
Total revenue increased $58 million or 4% from the prior quarter. Revenue in Wealth and Asset Management increased $59 million or 5%, primarily due to the inclusion of Burgundy, stronger global markets and good growth in deposit and loan balances, partially offset by the change in fair value of contingent consideration noted above. Insurance revenue was relatively unchanged.
Total recovery of the provision for credit losses was $2 million, compared with a provision of $4 million in the prior quarter.
BMO Financial Group First Quarter Report 2026 21
Non-interest expense increased $122 million or 13%, primarily due to higher employee-related expenses, including stock-based compensation for employees eligible to retire that are expensed in the first quarter of each year and severance, as well as the impact of Burgundy.
Assets under management increased $40.2 billion or 10%, due to the inclusion of Burgundy, higher client assets and stronger global markets. Assets under administration increased $6.0 billion or 2%, due to stronger global markets. Average gross loans increased 1% and average deposits increased 6%.
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 Operating Segments Performance Review section.
Capital Markets (1)
TABLE 17
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
Net interest income (teb) (2)
700
580
699
Non-interest revenue
1,512
1,239
1,374
Total revenue (teb) (2)
2,212
1,819
2,073
Provision for credit losses on impaired loans
29
37
35
Provision (recovery of provision) for credit losses on performing loans
(21)
(39)
11
Total provision (recovery of provision) for credit losses (PCL)
8
(2)
46
Non-interest expense
1,324
1,120
1,251
Income before income taxes
880
701
776
Provision for income taxes (teb) (2)
223
176
187
Reported net income
657
525
589
Dividends on preferred shares and distributions on other equity instruments
15
10
10
Net income available to common shareholders
642
515
579
Amortization of acquisition-related intangible assets (3)
3
11
4
Adjusted net income
660
536
593
Adjusted net income available to common shareholders
645
526
583
Adjusted non-interest expense
1,319
1,105
1,246
Key Performance Metrics
Global Markets revenue
1,440
1,037
1,363
Investment and Corporate Banking revenue
772
782
710
Return on equity (%) (4) (5)
16.7
14.5
17.0
Adjusted return on equity (%) (4) (5)
16.8
14.8
17.1
Operating leverage (teb) (%)
0.8
10.4
18.1
Adjusted operating leverage (teb) (%)
0.7
9.3
16.5
Efficiency ratio (teb) (%)
59.9
61.5
60.4
Adjusted efficiency ratio (teb) (%)
59.7
60.7
60.1
PCL on impaired loans-to-average net loans and acceptances (%) (5)
0.14
0.18
0.16
Average assets
593,769
548,583
578,952
Average gross loans and acceptances
86,972
85,586
86,575
U.S. Business Select Financial Data (US$ in millions)
Total revenue (teb)
816
635
778
Non-interest expense
475
417
441
Reported net income
249
168
241
Adjusted non-interest expense
473
414
439
Adjusted net income
251
170
243
Average assets
204,563
187,111
201,230
Average gross loans and acceptances
35,298
33,067
31,763
(1)Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.
(2)Net interest income, total revenue and the provision for income taxes are presented on a taxable equivalent basis (teb) and are reflected in the ratios. Teb amounts of $2 million in Q1-2026, $2 million in Q4-2025, and $nil in Q1-2025 are offset in Corporate Services.
(3)Amortization of acquisition-related intangible assets and any impairments, recorded in non‑interest expense. Q4-2025 included an impairment related to Radicle of $10 million.
(4)Return on equity is based on allocated capital. For further information, refer to the How BMO Reports Operating Segments Results 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 2026 vs. Q1 2025
Capital Markets reported net income was $657 million, an increase of $68 million or 11% from the prior year. The impact of the weaker U.S. dollar decreased net income by 3%, and revenue and non-interest expense by 2%, respectively.
Total revenue was $2,212 million, an increase of $139 million or 7% from the prior year. Global Markets revenue increased $77 million or 6%, primarily due to higher equities trading revenue, partially offset by the impact of the weaker U.S. dollar. Investment and Corporate Banking revenue increased $62 million or 9%, primarily due to higher advisory fee revenue, partially offset by the impact of the weaker U.S. dollar.
Total provision for credit losses was $8 million, compared with a $46 million provision in the prior year. The provision for credit losses on impaired loans was $29 million, a decrease of $6 million from the prior year. There was a $21 million recovery of the provision for credit losses on performing loans in the current quarter, compared with an $11 million provision in the prior year.
Non-interest expense was $1,324 million, an increase of $73 million or 6% from the prior year, driven by higher employee-related expenses, including higher performance-based compensation and severance, partially offset by the impact of the weaker U.S. dollar.
Average gross loans and acceptances of $86.9 billion increased $0.4 billion from the prior year.
22 BMO Financial Group First Quarter Report 2026
Q1 2026 vs. Q4 2025
Reported net income increased $132 million or 25% from the prior quarter.
Total revenue increased $393 million or 22% from the prior quarter. Global Markets revenue increased $403 million or 39%, primarily due to higher trading revenue from strong client activity. Investment and Corporate Banking revenue decreased $10 million or 1%, primarily due to lower debt underwriting revenue, partially offset by higher corporate banking and advisory fee revenue.
Total provision for credit losses was $8 million, compared with a $2 million recovery of the provision for credit losses in the prior quarter. The provision for credit losses on impaired loans decreased $8 million from the prior quarter. There was a $21 million recovery of the provision on performing loans in the current quarter, compared with a $39 million recovery in the prior quarter.
Non-interest expense increased $204 million or 18% from the prior quarter, driven by higher employee-related expenses, including 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 severance.
Average gross loans and acceptances increased $1.4 billion or 2% 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 Operating Segments Performance Review section.
Corporate Services (1)
TABLE 18
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q1-2025
Net interest income before segment teb offset
(128)
(46)
(237)
Segment teb offset
(9)
(10)
(9)
Net interest income (teb)
(137)
(56)
(246)
Non-interest revenue
95
159
112
Total revenue (teb)
(42)
103
(134)
Provision for credit losses on impaired loans
9
3
20
Recovery of provision for credit losses on performing loans
(3)
(18)
(11)
Total provision (recovery of provision) for credit losses
6
(15)
9
Non-interest expense
228
364
248
Loss before income taxes
(276)
(246)
(391)
Recovery of income taxes (teb)
(66)
(77)
(100)
Reported net loss
(210)
(169)
(291)
Dividends on preferred shares and distributions on other equity instruments
37
125
26
Net income attributable to non-controlling interest in subsidiaries
1
–
4
Net loss available to common shareholders
(248)
(294)
(321)
Acquisition and integration costs (2)
–
2
7
Impact of divestitures
3
102
–
FDIC special assessment
(35)
(9)
(5)
Impact of alignment of accounting policies
–
–
70
Adjusted net loss
(242)
(74)
(219)
Adjusted net loss available to common shareholders
(280)
(199)
(249)
Adjusted non-interest expense
271
272
149
U.S. Business Select Financial Data (US$ in millions)
Total revenue
(27)
–
(19)
Total provision (recovery of provision) for credit losses
–
(3)
4
Non-interest expense
90
174
57
Recovery of income taxes (teb)
(44)
(37)
(32)
Reported net loss
(73)
(134)
(48)
Adjusted non-interest expense
122
108
21
Adjusted net loss
(97)
(66)
(22)
(1)Adjusted results 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 Bank of the West, recorded in non-interest expense.
(3)Segment taxable equivalent basis (teb) offset amounts recorded in net interest income, total revenue and provision for (recovery of) income taxes: $9 million in Q1-2026, $10 million in Q4-2025 and $9 million in Q1-2025.
Certain comparative figures have been reclassified to conform with the current period’s presentation.
Q1 2026 vs. Q1 2025
Corporate Services reported net loss was $210 million, compared with reported net loss of $291 million in the prior year, with the change primarily reflecting the impact of aligning accounting policies for employee vacation across legal entities in the prior year and the benefit of a larger partial reversal of the FDIC special assessment in the current quarter.
Adjusted net loss was $242 million, compared with adjusted net loss of $219 million in the prior year, with the change primarily driven by higher expenses reflecting higher employee-related expenses, including severance, partially offset by higher treasury-related revenue.
Q1 2026 vs. Q4 2025
Reported net loss was $210 million, compared with reported net loss of $169 million in the prior quarter, and adjusted net loss was $242 million, compared with adjusted net loss of $74 million in the prior quarter.
Reported net loss included the impact of the larger partial reversal of the FDIC special assessment. The higher adjusted net loss primarily reflected lower treasury-related revenue. Expenses were relatively unchanged from the prior quarter, with lower premises and technology costs and professional fees, offset by higher employee-related expenses reflecting severance and the seasonal impact of employee benefits.
BMO Financial Group First Quarter Report 2026 23
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 Operating Segments Performance Review section.
Summary Quarterly Earnings Trends (1)
TABLE 19
(Canadian $ in millions, except as noted)
Q1-2026
Q4-2025
Q3-2025
Q2-2025
Q1-2025
Q4-2024
Q3-2024
Q2-2024
Net interest income
5,643
5,496
5,496
5,097
5,398
5,438
4,794
4,515
Non-interest revenue
4,181
3,845
3,492
3,582
3,868
3,519
3,398
3,459
Revenue
9,824
9,341
8,988
8,679
9,266
8,957
8,192
7,974
Provision for credit losses on impaired loans
739
750
773
765
859
1,107
828
658
Provision for credit losses on performing loans
7
5
24
289
152
416
78
47
Total provision for credit losses
746
755
797
1,054
1,011
1,523
906
705
Non-interest expense
5,753
5,556
5,105
5,019
5,427
4,427
4,839
4,844
Income before income taxes
3,325
3,030
3,086
2,606
2,828
3,007
2,447
2,425
Provision for income taxes
836
735
756
644
690
703
582
559
Reported net income (see below)
2,489
2,295
2,330
1,962
2,138
2,304
1,865
1,866
Acquisition and integration costs/reversal
7
3
4
(1)
7
27
19
26
Amortization of acquisition-related intangible assets
71
123
69
81
79
92
79
79
Change in fair value of contingent consideration
16
–
–
–
–
–
–
–
Impact of divestitures
3
102
–
–
–
–
–
–
Legal provision/reversal (including related interest expense and legal fees)
–
–
–
–
–
(870)
13
12
FDIC special assessment
(35)
(9)
(4)
4
(5)
(11)
5
50
Impact of alignment of accounting policies
–
–
–
–
70
–
–
–
Adjusted net income
2,551
2,514
2,399
2,046
2,289
1,542
1,981
2,033
Operating Segment Reported Revenue (2)
Canadian P&C
3,258
3,102
3,076
2,953
3,043
2,913
2,888
2,799
U.S. Banking
2,896
2,875
2,830
2,814
2,964
2,735
2,722
2,639
Wealth Management
1,500
1,442
1,365
1,263
1,320
1,240
1,190
1,163
Capital Markets
2,212
1,819
1,776
1,779
2,073
1,600
1,666
1,661
Corporate Services
(42)
103
(59)
(130)
(134)
469
(274)
(288)
Total revenue
9,824
9,341
8,988
8,679
9,266
8,957
8,192
7,974
Key Performance Metrics
Diluted earnings per share ($) (3)
3.39
2.97
3.14
2.50
2.83
2.94
2.48
2.36
Adjusted diluted earnings per share ($)
3.48
3.28
3.23
2.62
3.04
1.90
2.64
2.59
Total PCL-to-average net loans and acceptances (annualized) (%)
0.44
0.44
0.47
0.63
0.58
0.91
0.54
0.44
Effective tax rate (%)
25.2
24.2
24.5
24.7
24.4
23.4
23.8
23.1
Adjusted effective tax rate (%)
25.0
23.6
24.5
24.7
24.5
21.7
23.9
23.3
Canadian/U.S. dollar average exchange rate ($)
1.3759
1.3887
1.3730
1.4203
1.4303
1.3641
1.3705
1.3625
(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 sections in both this document and BMO’s 2025 Annual Report. 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)Operating segment revenue, net interest income, total revenue and provision for income taxes are presented on a taxable equivalent basis (teb). The offset to the segments’ teb adjustments is reflected in Corporate Services. For further information, refer to the How BMO Reports Operating Segments Results section.
(3)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.
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. Economic conditions, such as evolving trade policies and global events may also impact our results and the markets in which we operate. The table above outlines summary results for the second quarter of fiscal 2024 through the first quarter of fiscal 2026.
A number of adjusting items impacted reported results in certain quarters. The first quarter of fiscal 2026 included a change in the fair value of contingent consideration related to the acquisition of Burgundy. The fourth quarter of fiscal 2025 included a write-down of goodwill related to the announced sale of certain U.S. branches. 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. All periods were impacted by an FDIC special assessment charge and reversal of prior charges, 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, with improving revenue trends.
Revenue growth in Canadian P&C reflected good customer acquisition, volume growth and higher net interest margin. U.S. Banking revenue was impacted by muted industry loan demand and balance sheet optimization activities, with the past five quarters benefitting from higher net interest margin and higher fee revenue. Wealth Management revenue benefitted from stronger global markets and steady growth in client assets and balance sheet growth, as well as the inclusion of Burgundy beginning the first quarter of fiscal 2026. Insurance revenue is subject to variability resulting from market-related impacts. Capital Markets revenue, which is largely driven by market conditions that affect client activity, continued to benefit from robust trading activity from strong client flows, as well as improvement in equity underwriting and advisory activity in recent quarters.
Provisions for credit losses on impaired loans can vary depending on the economic environment and specific client circumstances. Provisions for credit losses on impaired loans increased in fiscal 2024, reflecting the impact of prolonged higher interest rates, tightening credit conditions and shifting consumer demand. In fiscal 2025 and fiscal 2026, provisions for credit losses on impaired loans moderated and have remained relatively stable
24 BMO Financial Group First Quarter Report 2026
over the past five quarters with lower provisions in U.S. Banking and Capital Markets, offset by higher provisions in Canadian P&C. Provisions on performing loans were impacted by the macroeconomic outlook, credit migration and loan growth. In fiscal 2024 and the first half of fiscal 2025, the bank added provisions on performing loans reflecting credit migration and uncertainty in credit conditions, with overall provisions during the past three quarters remaining stable, as the impact of credit migration was largely offset by improvements in the macroeconomic outlook.
Non-interest expense was impacted by the specific items in certain quarters noted above, and reflected disciplined expense management, while we continue to invest in our business to drive revenue growth. Expense growth has largely been driven by employee-related expenses and technology costs. The first quarter of fiscal 2026 included severance costs associated with advancing operational efficiencies across the enterprise.
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 and the implementation of the global minimum tax rules beginning the first quarter of fiscal 2025.
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 these services to our preferred customers. 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, 2025, as described in Note 27 of the audited annual consolidated financial statements of BMO’s 2025 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 2025 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, 2025.
Accounting Policies and Critical Accounting Estimates and Judgments
Material accounting policies are described in BMO’s 2025 Annual Report and in the notes to our annual consolidated financial statements for the year ended October 31, 2025, 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 2025 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) primarily consists of allowances for impaired loans, which represent estimated losses related to impaired loans provided for but not yet written off, and allowances for 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 four 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, lifetime ECL is recorded; otherwise, 12 months of ECL is generally recorded. Determining a significant increase in credit risk involves consideration of many different factors that will vary by product and risk segment. The principal factors considered in making this determination are the change in PD since origination and certain other criteria, such as 30-day past due 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 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, with the impact of any such change recorded in future periods.
In establishing our allowance for performing loans, we attach probability weightings to economic scenarios that 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 of which have been developed by our Economics group.
BMO Financial Group First Quarter Report 2026 25
When changes in economic performance in the forecasts are measured, 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, 2026, was $5,753 million ($5,739 million as at October 31, 2025) and comprised an allowance on performing loans of $4,609 million and an allowance on impaired loans of $1,144 million ($4,709 million and $1,030 million, respectively, as at October 31, 2025). The allowance on performing loans decreased $100 million from the fourth quarter of 2025, primarily driven by movements in foreign exchange rates, lower balances in certain portfolios and improvement in the macroeconomic scenarios, partially offset by portfolio credit migration.
Information on the Provision for Credit Losses for the three months ended January 31, 2026, 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 2025 Annual Report, Note 3 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. As required under the current methodology, which is integrated in the Basel Committee on Banking Supervision (BCBS) consolidated Basel Framework, the indicators are calculated based on specific instructions, 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 fiscal 2024 indicators, the bank was not designated as a G-SIB in the most recent assessment issued by the Financial Stability Board (FSB) in November 2025. 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 fiscal 2025, notional amounts of over-the-counter derivatives decreased, primarily driven by the compressions of centrally-cleared notionals, as well as the natural run-off of positions across the portfolio. The securities outstanding increased, primarily driven by BMO common share price appreciation. The higher underwritten transactions were primarily due to favourable market conditions. Other year-over-year movements in indicators reflect normal changes in business activity.
TABLE 20
(Canadian $ in millions)
Indicators
As at October 31
2025 (1)
2024
A. Cross-jurisdictional activity
1. Cross-jurisdictional claims
802,959
787,081
2. Cross-jurisdictional liabilities
732,465
707,844
B. Size
3. Total exposures as defined for use in the Basel III leverage ratio
1,555,645
1,514,998
C. Interconnectedness
4. Intra-financial system assets
191,907
191,887
5. Intra-financial system liabilities
80,071
80,702
6. Securities outstanding
383,818
348,447
D. Substitutability/Financial institution infrastructure
7. Payments activity (2)
41,815,459
38,624,267
8. Assets under custody
436,356
409,334
9. Underwritten transactions in debt and equity markets
172,983
143,176
10. Trading volume (includes the two sub indicators)
Trading volume fixed income sub indicator
2,502,576
2,813,092
Trading volume equities and other securities sub indicator
4,902,969
5,912,720
E. Complexity
11. Notional amount of over-the-counter (OTC) derivatives
19,050,126
22,857,725
12. Trading, FVTPL and FVOCI securities (3)
80,748
79,820
13. Level 3 assets
7,848
7,148
(1)The fiscal 2025 indicator values are subject to regulatory review following the date of this report. Should any revisions be required as a result of that review, an update with revised indicators will be published in accordance with the applicable regulatory disclosure requirements.
(2)Included intercompany transactions that are cleared through a correspondent bank.
(3)FVTPL: Fair value through profit or loss; FVOCI: Fair value through other comprehensive income.
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 2025 Annual Report.
26 BMO Financial Group First Quarter Report 2026
Other Regulatory Developments
We continue to monitor and prepare for other 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 Compliance Risk section of BMO’s 2025 Annual Report.
Liquidity Adequacy Requirement
In January 2026, OSFI published its final Liquidity Adequacy Requirements (LAR) Guideline for fiscal 2026, which comes into effect on May 1, 2026. The changes primarily relate to retail deposit categorization with updated guidance on the retail structured products and their treatment under LAR. These changes are not expected to have a material impact on our liquidity and funding practices.
U.S. Federal Deposit Insurance Corporation Assessment
In November 2023, the U.S. Federal Deposit Insurance Corporation (FDIC) approved the final rule to implement the special assessment on depository institutions to recover the losses incurred in the deposit insurance fund that were attributable to the protection of uninsured depositors of Silicon Valley Bank and Signature Bank. In the first quarter of fiscal 2026, we recorded a reversal of $35 million ($47 million pre-tax) in non-interest expense reflecting an updated FDIC assessment, indicating reduced losses subject to the special assessment.
Risk Management
BMO’s risk management policies and processes, designed to identify, assess, measure, manage and report its credit and counterparty, market, liquidity and funding, operational non-financial, including artificial intelligence, cyber, information and other technology-related risks, legal and regulatory compliance, strategic, environmental and social, and reputation risks are outlined in the Enterprise-Wide Risk Management section of BMO’s 2025 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 2025 Annual Report. These risks have the potential to materially impact BMO’s financial results, our operational efficiency, strategic direction or reputation. We continue to monitor the environment in which the bank operates, in order to identify and respond to any adverse developments, such as changes in general economic conditions and trade disputes, and take appropriate steps to reduce the impact on our results. For developments on general economic conditions and trade disputes, 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 21
(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, 2026
162,052
38,754
200,806
13,871
214,677
As at October 31, 2025
162,340
38,089
200,429
13,969
214,398
Residential Mortgages (1)
TABLE 22
As at January 31, 2026
As at October 31, 2025
(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
3,227
4,090
7,317
3.8%
69%
3,274
4,024
7,298
3.7%
70%
Quebec
7,801
13,236
21,037
10.8%
70%
8,145
13,427
21,572
11.0%
70%
Ontario
14,562
69,261
83,823
43.2%
70%
14,495
68,506
83,001
42.3%
70%
Alberta
9,092
8,568
17,660
9.1%
71%
9,234
8,546
17,780
9.1%
72%
British Columbia
4,244
24,291
28,535
14.7%
68%
4,303
24,663
28,966
14.8%
69%
All other Canada
2,073
1,607
3,680
1.9%
72%
2,109
1,614
3,723
1.9%
72%
Total Canada
40,999
121,053
162,052
83.5%
70%
41,560
120,780
162,340
82.8%
70%
United States
58
31,979
32,037
16.5%
72%
60
33,633
33,693
17.2%
73%
Total
41,057
153,032
194,089
100%
70%
41,620
154,413
196,033
100%
71%
(1)Reporting methodologies are in accordance with OSFI’s Residential Mortgage Underwriting Practices and Procedures (B-20) Guideline.
BMO Financial Group First Quarter Report 2026 27
(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 CanadaTM).
(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 23
As at January 31, 2026
As at October 31, 2025
(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
1,181
2.0%
2,238
1.8%
67%
1,149
2.0%
2,180
1.8%
67%
Quebec
9,483
16.0%
19,354
16.0%
71%
9,364
15.9%
19,123
15.8%
71%
Ontario
26,404
44.7%
49,441
40.8%
66%
26,177
44.5%
48,939
40.5%
66%
Alberta
3,379
5.7%
7,564
6.2%
67%
3,328
5.7%
7,471
6.2%
66%
British Columbia
11,445
19.3%
21,692
17.9%
62%
11,311
19.2%
21,338
17.7%
63%
All other Canada
733
1.2%
1,501
1.2%
67%
729
1.2%
1,485
1.2%
68%
Total Canada
52,625
88.9%
101,790
83.9%
66%
52,058
88.5%
100,536
83.2%
66%
United States
6,583
11.1%
19,522
16.1%
56%
6,762
11.5%
20,288
16.8%
57%
Total
59,208
100%
121,312
100%
65%
58,820
100%
120,824
100%
65%
Refer to footnote references in the Residential Mortgages table above.
Residential Mortgages by Remaining Term of Amortization (1) (2)
TABLE 24
As at January 31, 2026
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%
2.8%
8.1%
19.7%
33.7%
28.1%
2.5%
4.4%
United States (4)
0.3%
1.6%
3.3%
3.1%
13.3%
78.2%
0.1%
0.1%
Total
0.7%
2.6%
7.3%
16.9%
30.4%
36.3%
2.1%
3.7%
As at October 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%
2.8%
8.1%
19.5%
34.6%
27.1%
2.5%
4.7%
United States (4)
0.3%
1.6%
3.3%
2.9%
11.1%
80.6%
0.1%
0.1%
Total
0.7%
2.6%
7.3%
16.6%
30.6%
36.2%
2.1%
3.9%
(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 less than $0.1 billion (relatively unchanged from October 31, 2025) 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 at fair 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.
Exposure by Region
TABLE 25
As at January 31, 2026
As at October 31, 2025
(Canadian $ in millions)
Funded Lending and Commitments
Securities
Repo-Style Transactions and Derivatives
Region
Bank
Corporate
Sovereign
Total
Bank
Corporate
Sovereign
Total
Bank
Corporate
Sovereign
Total
Total Net Exposure
Total Net Exposure
Europe (excluding United Kingdom)
592
3,615
–
4,207
236
62
4,333
4,631
1,681
717
124
2,522
11,360
13,822
United Kingdom
194
6,620
–
6,814
120
32
2,543
2,695
515
655
59
1,229
10,738
9,440
Latin America
2,922
4,376
–
7,298
–
95
–
95
1
482
42
525
7,918
8,202
Asia-Pacific
2,414
2,644
63
5,121
419
17
473
909
495
177
287
959
6,989
6,726
Africa and Middle East
2,379
1,662
103
4,144
–
45
23
68
2
60
1,709
1,771
5,983
5,500
Other (1)
–
2
12
14
–
–
3,465
3,465
10
–
263
273
3,752
4,508
Total
8,501
18,919
178
27,598
775
251
10,837
11,863
2,704
2,091
2,484
7,279
46,740
48,198
(1)Primarily exposure to supranational entities.
Caution
This Risk Management section contains forward‑looking statements. Please refer to the Caution Regarding Forward‑Looking Statements.
28 BMO Financial Group First Quarter Report 2026
Market Risk
BMO’s market risk management practices and key measures are outlined in the Market Risk section of BMO’s 2025 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 26
As at January 31, 2026
As at October 31, 2025
Consolidated
Subject to market risk
Not subject
Consolidated
Subject to market risk
Not subject
Primary risk factors for
Balance
Traded
Non-traded
to market
Balance
Traded
Non-traded
to market
non-traded risk
(Canadian $ in millions)
Sheet
risk (1)
risk (2)
risk
Sheet
risk (1)
risk (2)
risk
balances
Assets Subject to Market Risk
Cash and cash equivalents
67,378
–
67,378
–
67,484
–
67,484
–
Interest rate
Interest bearing deposits with banks
2,870
429
2,441
–
2,838
456
2,382
–
Interest rate
Securities
421,331
166,732
254,599
–
423,476
172,680
250,796
–
Interest rate, credit spread, equity
Securities borrowed or purchased
under resale agreements
109,725
–
109,725
–
129,421
–
129,421
–
Interest rate
Loans and acceptances
(net of allowance for credit losses)
668,235
7,553
660,682
–
677,161
6,271
670,890
–
Interest rate, foreign exchange
Derivative instruments
69,398
63,880
5,518
–
57,151
51,829
5,322
–
Interest rate, foreign exchange
Customers’ liabilities under acceptances
1,081
–
1,081
–
711
–
711
–
Interest rate
Other assets
118,114
5,483
17,670
94,961
118,560
6,411
12,460
99,689
Interest rate
Total assets
1,458,132
244,077
1,119,094
94,961
1,476,802
237,647
1,139,466
99,689
Liabilities Subject to Market Risk
Deposits
954,789
50,471
904,318
–
976,202
49,093
927,109
–
Interest rate, foreign exchange
Derivative instruments
65,392
62,714
2,678
–
58,729
54,770
3,959
–
Interest rate, foreign exchange
Acceptances
1,081
–
1,081
–
711
–
711
–
Interest rate
Securities sold but not yet purchased
47,409
47,409
–
–
54,876
54,876
–
–
Interest rate
Securities lent or sold under
repurchase agreements
132,280
–
132,280
–
134,967
–
134,967
–
Interest rate
Other liabilities
163,018
–
99,642
63,376
154,717
–
91,688
63,029
Interest rate
Subordinated debt
8,412
–
8,412
–
8,500
–
8,500
–
Interest rate
Total liabilities
1,372,381
160,594
1,148,411
63,376
1,388,702
158,739
1,166,934
63,029
(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.
Trading Market Risk Measures
Average Total Trading Value at Risk (VaR) decreased quarter-over-quarter, primarily due to increased diversification and reduced equity risk, partially offset by higher interest rate exposures.
Total Trading Value at Risk (1)
TABLE 27
For the quarter ended January 31, 2026
October 31, 2025
January 31, 2025
Quarter-end
Average
High
Low
Average
Average
Commodity VaR
9.4
9.2
16.2
5.1
9.9
3.4
Equity VaR
11.1
12.6
17.0
9.4
14.9
26.1
Foreign exchange VaR
1.3
1.3
2.6
0.5
1.6
1.6
Interest rate VaR (2)
28.5
31.8
40.3
26.1
27.5
29.2
Diversification
(23.8)
(27.4)
nm
nm
(22.0)
(21.0)
Total Trading VaR
26.5
27.5
34.3
22.6
31.9
39.3
(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
BMO Financial Group First Quarter Report 2026 29
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 structural economic value benefit to falling rates increased, compared with October 31, 2025, primarily due to an increase in longer-term fixed rate term assets.
Structural earnings benefit to rising interest rates and structural earnings exposure to falling interest rate decreased, compared with October 31, 2025, as fewer net assets are scheduled to reprice over the next 12 months.
Structural Interest Rate Sensitivity (1) (2)
TABLE 28
Economic value sensitivity
Earnings sensitivity over the next 12 months
January 31, 2026
October 31, 2025
January 31, 2025
January 31, 2026
October 31, 2025
January 31, 2025
(Pre-tax Canadian $ equivalent in millions)
Canada (3)
United States
Total
Total
Total
Canada (3)
United States
Total
Total
Total
100 basis point increase
(1,284)
(793)
(2,077)
(1,736)
(1,627)
87
153
240
357
357
100 basis point decrease
1,283
162
1,445
1,063
842
(54)
(206)
(260)
(322)
(236)
(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.
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 2026. Customer deposits and loans declined during the quarter, primarily due to the impact of the weaker U.S. dollar. Wholesale funding decreased, reflecting net maturities. BMO’s liquidity metrics, including the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), exceeded 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 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 $367.0 billion as at January 31, 2026, compared with $393.5 billion as at October 31, 2025. The decrease in unencumbered liquid assets was due to lower securities balances and the impact of the weaker U.S. dollar.
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 29
As at January 31, 2026
As at October 31, 2025
Other cash &
Net
Net
Bank-owned
securities
Total gross
Encumbered
unencumbered
unencumbered
(Canadian $ in millions)
assets
received
assets (1)
assets
assets (2)
assets (2)
Cash and cash equivalents
67,378
–
67,378
87
67,291
67,376
Deposits with other banks
2,870
–
2,870
–
2,870
2,838
Securities and securities borrowed or purchased under resale agreements
Sovereigns/Central banks/Multilateral development banks
187,831
105,635
293,466
150,842
142,624
151,602
NHA mortgage-backed securities and U.S. agency mortgage-backed
securities and collateralized mortgage obligations
128,815
12,513
141,328
81,597
59,731
62,856
Corporate and other debt
38,228
28,771
66,999
29,730
37,269
37,886
Corporate equity
66,457
67,834
134,291
95,716
38,575
51,389
Total securities and securities borrowed or purchased under resale agreements
421,331
214,753
636,084
357,885
278,199
303,733
NHA mortgage-backed securities (reported as loans at amortized cost) (3)
25,138
–
25,138
6,502
18,636
19,588
Total liquid assets
516,717
214,753
731,470
364,474
366,996
393,535
(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.
30 BMO Financial Group First Quarter Report 2026
Asset Encumbrance
TABLE 30
Encumbered (2)
Net unencumbered
(Canadian $ in millions)
Total gross
Pledged as
Other
Other
Available as
As at January 31, 2026
assets (1)
collateral
encumbered
unencumbered (3)
collateral (4)
Cash and deposits with other banks
70,248
–
87
–
70,161
Securities (5)
661,222
275,543
88,844
25,876
270,959
Loans
643,097
61,950
1,859
415,899
163,389
Other assets
Derivative instruments
69,398
–
–
69,398
–
Customers' liability under acceptances
1,081
–
–
1,081
–
Premises and equipment
6,140
–
–
6,140
–
Goodwill
16,619
–
–
16,619
–
Intangible assets
5,015
–
–
5,015
–
Current tax assets
2,181
–
–
2,181
–
Deferred tax assets
2,602
–
–
2,602
–
Receivable from brokers, dealers and clients
45,203
–
–
45,203
–
Other
40,354
11,250
–
29,104
–
Total other assets
188,593
11,250
–
177,343
–
Total assets
1,563,160
348,743
90,790
619,118
504,509
Encumbered (2)
Net unencumbered
(Canadian $ in millions)
Total gross
Pledged as
Other
Other
Available as
As at October 31, 2025
assets (1)
collateral
encumbered
unencumbered (3)
collateral (4)
Cash and deposits with other banks
70,322
–
108
–
70,214
Securities (5)
682,594
271,748
87,525
25,739
297,582
Loans
650,883
58,052
1,834
435,852
155,145
Other assets
Derivative instruments
57,151
–
–
57,151
–
Customers' liability under acceptances
711
–
–
711
–
Premises and equipment
6,252
–
–
6,252
–
Goodwill
16,797
–
–
16,797
–
Intangible assets
4,758
–
–
4,758
–
Current tax assets
1,970
–
–
1,970
–
Deferred tax assets
2,732
–
–
2,732
–
Receivable from brokers, dealers and clients
43,167
–
–
43,167
–
Other
42,884
11,149
–
31,735
–
Total other assets
176,422
11,149
–
165,273
–
Total assets
1,580,221
340,949
89,467
626,864
522,941
(1)Gross assets include 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, 2026, 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 31
(Canadian $ in millions)
As at January 31, 2026
As at October 31, 2025
BMO (parent)
214,953
232,874
BMO Bank N.A.
121,671
127,012
Broker dealers
30,372
33,649
Total net unencumbered liquid assets by legal entity
366,996
393,535
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 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), is aligned with the liquidity of the assets being funded and is subject to limits on aggregate maturities 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 $703.0 billion as at January 31, 2026, decreasing from $715.0 billion as at October 31, 2025, primarily due to the impact of the weaker U.S. dollar.
Total secured and unsecured wholesale funding outstanding, which largely consists of negotiable marketable securities, was $253.6 billion as at January 31, 2026, with $69.2 billion sourced as secured funding and $184.4 billion sourced as unsecured funding. Wholesale funding outstanding decreased from $258.6 billion as at October 31, 2025, due to net maturities during the current quarter. 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 $367.0 billion as at January 31, 2026, that can be monetized to meet potential funding requirements, as described in the Unencumbered Liquid Assets section above.
BMO Financial Group First Quarter Report 2026 31
Wholesale Funding Maturities (1)
TABLE 32
As at January 31, 2026
As at October 31, 2025
Less than
1 to 3
3 to 6
6 to 12
Subtotal less
1 to 2
Over
(Canadian $ in millions)
1 month
months
months
months
than 1 year
years
2 years
Total
Total
Deposits from banks
1,652
956
1,263
2,069
5,940
–
–
5,940
4,403
Certificates of deposit and commercial paper
6,882
14,772
26,454
31,586
79,694
1,727
–
81,421
89,662
Bearer deposit notes
1,759
1,487
994
570
4,810
–
–
4,810
5,799
Asset-backed commercial paper (ABCP)
1,405
5,042
6,990
2,009
15,446
–
–
15,446
15,277
Senior unsecured medium-term notes
–
1,750
5,473
10,226
17,449
18,306
30,922
66,677
64,725
Senior unsecured structured notes (2)
147
2
177
565
891
650
15,644
17,185
17,335
Secured funding
Mortgage and HELOC securitizations
–
200
497
1,851
2,548
1,997
13,212
17,757
18,383
Covered bonds
–
3,104
3,225
8,839
15,168
2,513
6,587
24,268
24,053
Other asset-backed securitizations (3)
–
–
–
–
–
–
4,026
4,026
5,711
Federal Home Loan Bank advances
–
4,765
170
1,359
6,294
–
1,405
7,699
4,741
Subordinated debt
–
–
–
–
–
–
8,411
8,411
8,499
Total
11,845
32,078
45,243
59,074
148,240
25,193
80,207
253,640
258,588
Of which:
Secured
1,405
13,111
10,882
14,058
39,456
4,510
25,230
69,196
68,165
Unsecured
10,440
18,967
34,361
45,016
108,784
20,683
54,977
184,444
190,423
Total (4)
11,845
32,078
45,243
59,074
148,240
25,193
80,207
253,640
258,588
(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 loan securitizations.
(4)Total wholesale funding comprised Canadian‑dollar‑denominated funding totalling $53.8 billion ($54.3 billion as at October 31, 2025) and U.S.‑dollar‑denominated and other foreign‑currency‑denominated funding totalling $199.8 billion as at January 31, 2026 ($204.3 billion as at October 31, 2025).
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 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 2025 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 7 of the audited annual consolidated financial statements of BMO’s 2025 Annual Report.
The credit ratings assigned to BMO’s senior debt by rating agencies are indicative of high-grade, high-quality issues.
TABLE 33
As at January 31, 2026
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, 2026, we would be required to provide additional collateral to counterparties totalling $327 million, $677 million and $1,598 million, as a result of a one-notch, two-notch and three-notch downgrade, respectively.
32 BMO Financial Group First Quarter Report 2026
Liquidity Coverage Ratio
The Liquidity Coverage Ratio (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, in accordance with OSFI’s LAR Guideline, as summarized in the table below. 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, 2026, was 126%, equivalent to a surplus of $52.1 billion above the regulatory minimum. The LCR decreased 6% from 132% in the prior quarter, due to 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 34
For the quarter ended January 31, 2026
(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)
*
252.9
Cash Outflows
Retail deposits and deposits from small business customers, of which:
303.9
21.6
Stable deposits
141.1
4.2
Less stable deposits
162.8
17.4
Unsecured wholesale funding, of which:
340.7
146.6
Operational deposits (all counterparties) and deposits in networks of cooperative banks
173.5
42.9
Non-operational deposits (all counterparties)
144.9
81.4
Unsecured debt
22.3
22.3
Secured wholesale funding
*
36.7
Additional requirements, of which:
266.9
62.5
Outflows related to derivatives exposures and other collateral requirements
43.0
14.8
Outflows related to loss of funding on debt products
3.8
3.8
Credit and liquidity facilities
220.1
43.9
Other contractual funding obligations
0.8
–
Other contingent funding obligations
568.4
12.3
Total cash outflows
*
279.7
Cash Inflows
Secured lending (e.g., reverse repos)
205.4
36.7
Inflows from fully performing exposures
17.5
9.7
Other cash inflows
34.0
32.5
Total cash inflows
256.9
78.9
For the quarter ended January 31, 2026
Total adjusted value (4)
Total HQLA
252.9
Total net cash outflows
200.8
Liquidity Coverage Ratio (%) (2)
126
For the quarter ended October 31, 2025
Total adjusted value (4)
Total HQLA
252.1
Total net cash outflows
191.4
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 61 business days in the first quarter of fiscal 2026.
(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 2026 33
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, 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, RSF and the NSFR. Canadian D-SIBs, including BMO, are required to maintain a minimum NSFR of 100%. BMO’s NSFR was 116% as at January 31, 2026, equivalent to a surplus of $105.0 billion above the regulatory minimum. The NSFR decreased from 117% in the prior quarter, due to both an increase in required stable funding and a decrease in available stable funding.
TABLE 35
For the quarter ended January 31, 2026
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:
88.3
–
–
8.3
96.6
Regulatory capital
88.3
–
–
8.3
96.6
Other capital instruments
–
–
–
–
–
Retail deposits and deposits from small business customers:
244.8
54.3
28.8
60.9
361.4
Stable deposits
120.1
24.8
12.0
12.0
161.0
Less stable deposits
124.7
29.5
16.8
48.9
200.4
Wholesale funding:
338.3
284.0
76.2
88.9
281.0
Operational deposits
160.9
0.1
–
0.5
81.0
Other wholesale funding
177.4
283.9
76.2
88.4
200.0
Liabilities with matching interdependent assets
–
0.6
1.0
14.9
–
Other liabilities:
8.1
*
*
97.4
40.9
NSFR derivative liabilities
*
*
*
4.8
–
All other liabilities and equity not included in the above categories
8.1
50.9
1.7
40.0
40.9
Total ASF
*
*
*
*
779.9
Required Stable Funding (RSF) Item
Total NSFR high-quality liquid assets (HQLA)
*
*
*
*
20.9
Deposits held at other financial institutions for operational purposes
–
–
–
–
–
Performing loans and securities:
203.0
218.5
65.8
339.9
516.4
Performing loans to financial institutions secured by Level 1 HQLA
–
99.6
0.8
–
2.3
Performing loans to financial institutions secured by non-Level 1 HQLA and unsecured
performing loans to financial institutions
26.1
53.4
6.4
16.5
51.7
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:
132.3
35.6
34.1
166.9
289.1
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:
13.9
25.5
24.1
131.3
123.4
With a risk weight of less than or equal to 35% under the Basel II standardized
approach for credit risk
13.9
25.5
24.1
131.3
123.4
Securities that are not in default and do not qualify as HQLA,
including exchange-traded equities
30.7
4.4
0.4
25.2
49.9
Assets with matching interdependent liabilities
–
0.6
1.0
14.9
–
Other assets:
43.7
*
*
138.7
115.8
Physical traded commodities, including gold
5.4
*
*
*
4.6
Assets posted as initial margin for derivative contracts and contributions to
default funds of central clearing parties
*
*
*
22.6
19.2
NSFR derivative assets
*
*
*
4.3
–
NSFR derivative liabilities before deduction of variation margin posted
*
*
*
15.3
0.8
All other assets not included in the above categories
38.3
51.9
0.5
44.1
91.2
Off-balance sheet items
*
*
*
631.2
21.8
Total RSF
*
*
*
*
674.9
Net Stable Funding Ratio (%)
*
*
*
*
116
Weighted Value (2)
For the quarter ended October 31, 2025
Total ASF
783.3
Total RSF
668.8
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, capital with perpetual maturity, 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.
34 BMO Financial Group First Quarter Report 2026
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 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, 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 36
January 31, 2026
0 to 1
1 to 3
3 to 6
6 to 9
9 to 12
1 to 2
2 to 5
Over 5
No specific
(Canadian $ in millions)
month
months
months
months
months
years
years
years
maturity
Total
Assets
Cash and cash equivalents
65,103
–
–
–
–
–
–
–
2,275
67,378
Interest bearing deposits with banks
2,591
205
67
–
–
7
–
–
–
2,870
Securities
5,855
4,263
8,791
9,299
19,137
27,041
85,784
194,703
66,458
421,331
Securities borrowed or purchased under
resale agreements
92,377
9,954
6,584
727
83
–
–
–
–
109,725
Loans (1)
Residential mortgages
2,424
6,750
13,332
12,678
8,319
45,280
71,141
33,818
347
194,089
Consumer instalment and other personal
667
1,901
3,895
3,231
2,751
11,685
21,964
18,434
27,313
91,841
Credit cards
–
–
–
–
–
–
–
–
12,120
12,120
Business and government
11,786
15,145
23,517
18,476
16,884
59,116
96,718
35,968
97,642
375,252
Allowance for credit losses
–
–
–
–
–
–
–
–
(5,067)
(5,067)
Total loans, net of allowance
14,877
23,796
40,744
34,385
27,954
116,081
189,823
88,220
132,355
668,235
Other assets
Derivative instruments
7,880
12,066
6,887
5,696
7,008
8,655
11,432
9,774
–
69,398
Customers’ liability under acceptances
1,081
–
–
–
–
–
–
–
–
1,081
Receivable from brokers, dealers and clients
45,203
–
–
–
–
–
–
–
–
45,203
Other
4,171
822
592
16
7
14
12
7,823
59,454
72,911
Total other assets
58,335
12,888
7,479
5,712
7,015
8,669
11,444
17,597
59,454
188,593
Total assets
239,138
51,106
63,665
50,123
54,189
151,798
287,051
300,520
260,542
1,458,132
TABLE 37
January 31, 2026
0 to 1
1 to 3
3 to 6
6 to 9
9 to 12
1 to 2
2 to 5
Over 5
No specific
(Canadian $ in millions)
month
months
months
months
months
years
years
years
maturity
Total
Liabilities and Equity
Deposits (2) (3)
33,543
50,392
73,124
54,115
51,066
51,619
66,522
30,656
543,752
954,789
Other liabilities
Derivative instruments
8,058
9,452
6,908
5,236
6,337
7,948
11,922
9,531
–
65,392
Acceptances
1,081
–
–
–
–
–
–
–
–
1,081
Securities sold but not yet purchased (4)
47,409
–
–
–
–
–
–
–
–
47,409
Securities lent or sold under repurchase
agreements (4)
111,927
16,412
720
–
–
3,221
–
–
–
132,280
Securitization and structured entities’ liabilities
44
199
480
1,387
884
3,174
9,590
41,051
–
56,809
Insurance-related liabilities
81
76
28
22
32
93
222
744
19,906
21,204
Payable to brokers, dealers and clients
43,335
–
–
–
–
–
–
–
–
43,335
Other
11,032
5,413
316
114
2,914
1,043
2,649
2,573
15,616
41,670
Total other liabilities
222,967
31,552
8,452
6,759
10,167
15,479
24,383
53,899
35,522
409,180
Subordinated debt
–
–
–
–
–
–
25
8,387
–
8,412
Total equity
–
–
–
–
–
–
–
–
85,751
85,751
Total liabilities and equity
256,510
81,944
81,576
60,874
61,233
67,098
90,930
92,942
665,025
1,458,132
(1)Loans receivable on demand have been included under no specific maturity.
(2)Deposits payable on demand and payable after notice have been included under no specific maturity.
(3)Deposits totalling $27,258 million as at January 31, 2026, 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 38
January 31, 2026
0 to 1
1 to 3
3 to 6
6 to 9
9 to 12
1 to 2
2 to 5
Over 5
No specific
(Canadian $ in millions)
month
months
months
months
months
years
years
years
maturity
Total
Off-Balance Sheet Commitments
Commitments to extend credit (1)
2,444
6,545
13,711
14,594
14,890
54,914
130,844
6,600
–
244,542
Letters of credit (2)
2,414
4,369
6,337
5,809
6,933
2,253
3,707
71
–
31,893
Backstop liquidity facilities
–
416
2,432
2,565
1,716
10,523
1,100
–
–
18,752
Other commitments (3)
76
93
156
149
211
615
1,294
298
–
2,892
(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 2026 35
TABLE 39
October 31, 2025
0 to 1
1 to 3
3 to 6
6 to 9
9 to 12
1 to 2
2 to 5
Over 5
No specific
(Canadian $ in millions)
month
months
months
months
months
years
years
years
maturity
Total
Assets
Cash and cash equivalents
65,232
–
–
–
–
–
–
–
2,252
67,484
Interest bearing deposits with banks
2,461
328
47
2
–
–
–
–
–
2,838
Securities
4,613
5,026
7,358
6,635
11,121
43,792
84,041
190,809
70,081
423,476
Securities borrowed or purchased under
resale agreements
105,268
15,571
6,399
1,880
303
–
–
–
–
129,421
Loans (1)
Residential mortgages
2,596
6,037
10,583
14,475
13,025
46,764
66,853
35,365
335
196,033
Consumer instalment and other personal
691
1,584
3,079
4,292
3,376
12,991
20,184
19,079
27,465
92,741
Credit cards
–
–
–
–
–
–
–
–
12,649
12,649
Business and government
11,283
14,430
18,395
23,398
20,399
61,935
98,451
36,768
95,729
380,788
Allowance for credit losses
–
–
–
–
–
–
–
–
(5,050)
(5,050)
Total loans, net of allowance
14,570
22,051
32,057
42,165
36,800
121,690
185,488
91,212
131,128
677,161
Other assets
Derivative instruments
6,336
10,429
5,146
4,122
3,997
7,688
10,420
9,013
–
57,151
Customers’ liability under acceptances
711
–
–
–
–
–
–
–
–
711
Receivable from brokers, dealers and clients
43,167
–
–
–
–
–
–
–
–
43,167
Other
3,752
1,155
455
26
8
15
14
7,990
61,978
75,393
Total other assets
53,966
11,584
5,601
4,148
4,005
7,703
10,434
17,003
61,978
176,422
Total assets
246,110
54,560
51,462
54,830
52,229
173,185
279,963
299,024
265,439
1,476,802
TABLE 40
October 31, 2025
0 to 1
1 to 3
3 to 6
6 to 9
9 to 12
1 to 2
2 to 5
Over 5
No specific
(Canadian $ in millions)
month
months
months
months
months
years
years
years
maturity
Total
Liabilities and Equity
Deposits (2) (3)
37,399
65,186
66,458
58,424
49,572
55,403
68,983
29,023
545,754
976,202
Other liabilities
Derivative instruments
5,789
9,844
6,317
4,517
4,264
7,180
10,924
9,894
–
58,729
Acceptances
711
–
–
–
–
–
–
–
–
711
Securities sold but not yet purchased (4)
54,876
–
–
–
–
–
–
–
–
54,876
Securities lent or sold under repurchase
agreements (4)
113,549
17,158
762
–
–
3,498
–
–
–
134,967
Securitization and structured entities’ liabilities
1
2,375
200
481
1,377
2,980
10,287
33,861
–
51,562
Insurance-related liabilities
90
82
21
23
33
91
220
745
19,131
20,436
Payable to brokers, dealers and clients
45,170
–
–
–
–
–
–
–
–
45,170
Other
11,733
5,244
222
339
120
2,567
2,784
2,659
11,881
37,549
Total other liabilities
231,919
34,703
7,522
5,360
5,794
16,316
24,215
47,159
31,012
404,000
Subordinated debt
–
25
–
–
–
–
25
8,450
–
8,500
Total equity
–
–
–
–
–
–
–
–
88,100
88,100
Total liabilities and equity
269,318
99,914
73,980
63,784
55,366
71,719
93,223
84,632
664,866
1,476,802
(1)Loans receivable on demand have been included under no specific maturity.
(2)Deposits payable on demand and payable after notice have been included under no specific maturity.
(3)Deposits totalling $27,819 million as at October 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 41
October 31, 2025
0 to 1
1 to 3
3 to 6
6 to 9
9 to 12
1 to 2
2 to 5
Over 5
No specific
(Canadian $ in millions)
month
months
months
months
months
years
years
years
maturity
Total
Off-Balance Sheet Commitments
Commitments to extend credit (1)
2,889
4,405
10,029
15,588
22,066
55,191
130,267
6,417
–
246,852
Letters of credit (2)
2,372
5,167
6,192
5,787
5,982
2,530
3,807
76
–
31,913
Backstop liquidity facilities
429
72
–
2,304
2,845
4,543
7,804
361
–
18,358
Other commitments (3)
59
92
154
144
136
444
805
256
–
2,090
(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.
36 BMO Financial Group First Quarter Report 2026
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 reflect 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 Impaired Loans is maintained to reduce the carrying value of individually identified impaired loans to the expected recoverable amount.
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 Performing Loans Ratio is calculated as the allowance for credit losses on performing loans as a percentage of gross performing loans and acceptances.
Allowance for Credit Losses Ratio is calculated as the allowance for credit losses on impaired loans as a percentage of gross impaired loans and acceptances.
Assets under Administration (AUA) refers to the assets administered by the bank, including assets under custody, that are beneficially owned by clients and therefore not reported on the bank’s consolidated balance sheet. BMO provides administrative services for these assets, including safekeeping, recordkeeping, income collection and distribution, and reporting.
Assets under Management (AUM) refers to the total market value of assets beneficially owned by clients and managed by the bank. Services provided in respect of AUM include the provision of investment advice and discretionary portfolio management. AUM is not reported on the bank’s consolidated balance sheet.
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 a 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 carries different terms, interest rates and risks.
Common Equity Tier 1 (CET1) Capital comprises common shareholders’ equity, including applicable contractual service margin, less regulatory 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 are 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 estimate 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 segments).
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.
BMO Financial Group First Quarter Report 2026 37
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 for financial loss if the bank is unable to meet its 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.
Market Risk is the potential for financial loss as a result of the impact to capital and earnings from adverse changes in market variables that may affect the bank’s trading, underwriting and banking book positions, 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 Global Markets, is presented on a basis that excludes Global Markets net 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 Global Markets and Insurance is the ratio of net interest income, excluding net interest income from our Global Markets business in Capital Markets to average earning assets, excluding Global Markets and Insurance average earning assets, expressed as a percentage or in basis points.
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, calculated in accordance with OSFI’s Liquidity Adequacy Requirements (LAR) 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 comprise a variety of financial arrangements offered to clients, including 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 a non-GAAP measure, calculated as income before 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.
Provision for Credit Losses (PCL) Impaired Loans Ratio is calculated as the annualized total provision for credit losses on impaired loans as a percentage of average net loans and acceptances.
Provision for Credit Losses (PCL) Performing Loans Ratio is calculated as the annualized provision for credit losses on performing loans as a percentage of average net loans and acceptances.
Return on Assets (ROA) is calculated as net income, as a percentage of average assets.
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.
38 BMO Financial Group First Quarter Report 2026
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 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 primary 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). Net interest income, total revenue and provision for income taxes in Capital Markets and U.S. Banking are increased on tax-exempt securities to an equivalent pre-tax basis to facilitate comparisons of income between taxable and tax-exempt sources, and are reflected in the key metrics. The offset to operating segment teb adjustments is reflected in Corporate Services net interest income, 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, less regulatory deductions.
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 (TSR) represents the average annual total return earned on an investment in BMO common shares made at the beginning of the respective period. It 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.
BMO Financial Group First Quarter Report 2026 39
Investor and Media Information
Investor Presentation Materials
Interested parties are invited to visit BMO’s website at www.bmo.com/investorrelations to review the 2025 Annual MD&A and audited annual consolidated financial statements, quarterly presentation materials and supplementary financial and regulatory information package.
Quarterly Conference Call and Webcast Presentations
Interested parties are also invited to listen to our quarterly conference call on Wednesday, February 25, 2026, at 8:00 a.m. (ET). The call may be accessed by telephone at 647-557-5533 (from within Toronto) or 1-888-440-4121 (toll-free outside Toronto), entering Passcode: 89709#. A replay of the conference call can be accessed until March 25, 2026, by calling 647-362-9199 (from within Toronto) or 1-800-770-2030 (toll-free outside Toronto) and entering Passcode: 89709#.
A live webcast of the call can be accessed on our website at www.bmo.com/investorrelations. A replay can also be accessed on the website.
Upcoming Events
•BMO Investor Day March 26, 2026
•Annual Meeting of Shareholders April 15, 2026
•Q2-2026 Earnings Release May 27, 2026
•Q3-2026 Earnings Release August 25, 2026
•Q4-2026 Earnings Release December 2, 2026
Media Relations Contact
John Fenton, Head, Public Relations, john.fenton@bmo.com, 416-867-3996
Bill Anderson, Managing Director, Investor Relations, bill2.anderson@bmo.com, 416-867-7834
Shareholder Dividend Reinvestment and Share Purchase Plan (DRIP)
Common shareholders may elect to have their cash dividends reinvested in common shares of the bank, in accordance with the bank's DRIP. More information about the Plan and how to enrol can be found at www.bmo.com/investorrelations.
For dividend information, change in shareholder address
or to advise of duplicate mailings, please contact
Computershare Trust Company of Canada
320 Bay Street, 14th Floor
Toronto, Ontario M5H 4A6
Telephone: 416-263-9200
Fax: 1-888-453-0330
E-mail: service@computershare.com
For other shareholder information, please contact
Bank of Montreal
Shareholder Services
Corporate Secretary’s Department
1 First Canadian Place, 9th Floor
Toronto, Ontario M5X 1A1
Telephone: 416-867-6785
E-mail: corp.secretary@bmo.com
For further information on this document, please contact
Bank of Montreal
Investor Relations Department
P.O. Box 1, 1 First Canadian Place, 37th Floor
Toronto, Ontario M5X 1A1
BMO’s 2025 Annual MD&A, audited consolidated financial statements, Annual Information Form and annual report on Form 40-F (filed with the U.S. Securities and Exchange Commission) are available online at www.bmo.com/investorrelations and at www.sedarplus.ca. Printed copies of the bank’s complete 2025 audited consolidated financial statements are available free of charge upon request at 416-867-6785 or corp.secretary@bmo.com.
