Equibles

6-K

BANK OF MONTREAL /CAN/ (BMO)

6-K 2025-05-28 For: 2025-04-30
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Added on April 05, 2026

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

For the month of: May, 2025 Commission File Number: <br>001-13354

BANK OF MONTREAL

(Name of Registrant)

100 King Street West
1 First Canadian Place 129 rue Saint-Jacques
Toronto, Ontario Montreal, Quebec
Canada, M5X 1A1 Canada, H2Y 1L6
(Executive Offices) (Head Office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F ☐ Form 40-F

☒

INCORPORATION BY REFERENCE

The information contained in this Form 6-K and any exhibits hereto shall be deemed filed with the Securities and Exchange Commission (“SEC”) solely for purposes of incorporation by reference into and as part of the following registration statements of the registrant on file with and declared effective by the SEC:

1. Registration Statement – Form <br>F-3<br> – File <br>No. 333-214934
2. Registration Statement – Form <br>F-3<br> – File <br>No. 333-285508
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3. Registration Statement – Form <br>S-8<br> – File <br>No. 333-191591
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4. Registration Statement – Form <br>S-8<br> – File <br>No. 333-180968
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5. Registration Statement – Form <br>S-8<br> – File <br>No. 333-177579
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6. Registration Statement – Form <br>S-8<br> – File <br>No. 333-177568
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7. Registration Statement – Form <br>S-8<br> – File <br>No. 333-176479
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8. Registration Statement – Form <br>S-8<br> – File <br>No. 333-175413
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9. Registration Statement – Form <br>S-8<br> – File <br>No. 333-175412
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10. Registration Statement – Form <br>S-8<br> – File <br>No. 333-113096
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11. Registration Statement – Form <br>S-8<br> – File <br>No. 333-14260
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12. Registration Statement – Form <br>S-8<br> – File <br>No. 33-92112
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13. Registration Statement – Form <br>S-8<br> – File <br>No. 333-207739
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14. Registration Statement – Form <br>S-8<br> – File <br>No. 333-237522
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15. Registration Statement – Form <br>S-8<br> – File <br>No. 333-276007
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EXHIBIT INDEX

Exhibit Description of Exhibit
99.1 Second Quarter 2025 Management’s Discussion and Analysis of Results of Operations and Financial Condition
99.2 Second Quarter 2025 Consolidated Financial Statements
99.3 Second Quarter 2025 Consolidated Capitalization of Bank of Montreal
101. Interactive Data File (formatted as Inline XBRL)
104. Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BANK OF MONTREAL
By: /s/ Tayfun Tuzun
Name: Tayfun Tuzun
Title: Chief Financial Officer
Date<br>: May 28, 2025 By: /s/ Paul V. Noble
Name: Paul V. Noble
Title: Corporate Secretary

EX-99.1

LOGO

BMO Financial Group Reports Second Quarter 2025 Results

REPORT TO SHAREHOLDERS

BMO’s Second Quarter 2025 Report to Shareholders, including the unaudited interim consolidated financial statements for the period ended April 30, 2025, is 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

Second Quarter 2025 compared with Second Quarter 2024:

• Reported net income^1^ of<br>$1,962 million, compared with $1,866 million; adjusted net income^1^ of $2,046 million, compared with $2,033 million
• Reported earnings per share (EPS)^2^ of<br>$2.50, compared with $2.36; adjusted EPS^1, 2^ of $2.62, compared with $2.59
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• Provision for credit losses (PCL) of $1,054 million, compared with $705 million
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• Reported return on equity (ROE) of 9.4%, compared with 9.9%; adjusted ROE^1^ of 9.8%, compared with 10.9%
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• Common Equity Tier 1 (CET1) Ratio^3^<br>of 13.5%, compared with 13.1%
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• Declared a quarterly dividend of $1.63 per common share, an increase of $0.08 or 5% from<br>the prior year and $0.04 or 3% from the prior quarter
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Year-to-Date 2025 compared with Year-to-Date 2024:

• Reported net income^1^ of<br>$4,100 million, compared with $3,158 million; adjusted net income^1^ of $4,335 million, compared with $3,926 million
• Reported EPS^2^ of $5.34, compared with<br>$4.08; adjusted EPS^1, 2^of $5.66, compared with $5.14
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• PCL of $2,065 million, compared with $1,332 million
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• Reported ROE of 10.0%, compared with 8.5%; adjusted ROE^1^of 10.6%, compared with 10.7%
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Toronto, May 28, 2025 – BMO Financial Group (TSX:BMO) (NYSE:BMO) today announced financial results for the second quarter ended April 30, 2025. Reported net income was $1,962 million and reported EPS was $2.50, an increase from $1,866 million and $2.36 in the prior year. Adjusted net income was $2,046 million and adjusted EPS was $2.62, an increase from $2,033 million and $2.59 in the prior year.

“This quarter, we delivered strong revenue and pre-provision, pre-tax earnings growth across each operating group and ongoing positive operating leverage. Impaired credit provisions moderated again this quarter as expected, while we bolstered performing allowances. We’re executing against our plan to rebuild return on equity, including actions to optimize our balance sheet and invest for growth,” said Darryl White, Chief Executive Officer, BMO Financial Group.

”We’re supporting our clients through the current environment from a position of strength. Our robust capital position enables us to return capital to shareholders through buybacks and higher dividends, and provides resilience for a range of economic outcomes as we help our clients and the communities we serve make real financial progress,” concluded Mr. White.

Concurrent with the release of results, BMO announced a third quarter 2025 dividend of $1.63 per common share, an increase of $0.08 or 5% from the prior year, and an increase of $0.04 or 3% from the prior quarter. The quarterly dividend of $1.63 per common share is equivalent to an annual dividend of $6.52 per common share. During the quarter, we purchased for cancellation 7 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<br>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<br>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.<br>
(2) All EPS measures in this document refer to diluted EPS, unless specified otherwise.
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(3) The CET1 Ratio is disclosed in accordance with the Capital Adequacy Requirements (CAR) Guideline, as set out by the Office<br>of the Superintendent of Financial Institutions (OSFI), as applicable.
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BMO Financial Group Second Quarter Report 2025 1
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Enhanced Disclosure Task Force

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

Topic EDTF Disclosure Page Number
2024 Annual<br><br><br>Report Q2 2025
RTS SFI SRCI
General 1.   Risk-related information in each report, including an index for easy navigation 68-109 3 Index Index
2.   Risk<br>terminology, measures and key parameters 72-109,<br>117-119 31 - -
3.   Top and<br>emerging risks 68-70 5, 31 - -
4.   Plans to<br>meet new key regulatory ratios once applicable rules are finalized 62 17-18 - -
Risk Governance, Risk Management and Business Model 5.   Risk<br>management and governance framework, processes and key functions 72-76 - - -
6.   Risk<br>culture, risk appetite and procedures to support the culture 76 - - -
7.   Risks<br>that arise from business models and activities 74-75 - - -
8.   Stress<br>testing within the risk governance and capital frameworks 76 - - -
Capital Adequacy and Risk-Weighted Assets (RWA) 9.   Pillar 1<br>capital requirements 60-63 - - 5-6, 15
10.  Composition of<br>capital components and reconciliation of the accounting balance sheet to<br>the regulatory balance sheet. A main features template can be found at<br>https://www.bmo.com/main/about-bmo/investor-relations/regulatory-disclosure 63-64 18 - 5-7, 17-18
11.  Flow statement<br>of movements in regulatory capital, including changes in Common Equity Tier 1 Capital, Additional Tier 1 Capital and Tier 2 Capital - - - 8
12.  Capital<br>management and strategic planning 59, 65-66 - - -
13.  Risk-weighted<br>assets (RWA) by operating group 64 - - 16
14.  Analysis of<br>capital requirements for each method used in calculating RWA 63-64,<br> <br>77-80 - - 16, <br>22-49,<br>55-67, 84-89
15.  Tabulate credit<br>risk in the banking book for Basel asset classes and major portfolios - - - 22-49,<br><br><br>51-67, 87-89
16.  Flow statement<br>that reconciles movements in RWA by risk type - - - 50, 83
17.  Basel<br>validation and back-testing process, including estimated and actual loss parameter information 103-104 - - 90
Liquidity 18.  Management of<br>liquidity needs, and liquidity reserve held to meet those needs 91-97 35, 38 - -
Funding 19.  Encumbered and<br>unencumbered assets disclosed by balance sheet category 93 36 45 -
20.  Consolidated<br>total assets, liabilities and off-balance sheet commitments by remaining contractual maturity 98-99 40-41 - -
21.  Analysis of<br>funding sources and funding strategy 94-95 36-37 - -
Market Risk 22.  Linkage of<br>trading and non-trading market risk to the Consolidated Balance Sheet 89 33 - -
23.  Significant<br>trading and non-trading market risk factors 85-89 34 - -
24.  Market risk<br>model assumptions, validation procedures and back-testing 85-89, 104 - - -
25.  Primary<br>techniques for risk measurement and risk assessment, including risk of loss 85-89 33-34 - -
Credit Risk 26.  Analysis of<br>credit risk profile, exposure and concentration 77-84,<br>148-155 14-15,<br> <br>51-56 25-42 16-81
27.  Policies to<br>identify impaired loans and renegotiated loans 148-150, 155 - - -
28.  Reconciliation<br>of opening and closing balances of impaired loans and allowance for credit losses 83,151 15, 51-53 - -
29.  Counterparty<br>credit risk arising from derivative transactions 77-78, 84,<br>167-168 - - 55-73
30.  Credit risk<br>mitigation 77-78, 150,<br>159, 200-201 - - 21, 51-52, 68
Other Risks 31.  Discussion of<br>other risks 72-74,<br>100-109 - - -
32.  Publicly known<br>risk events involving material or potentially material loss events 100-109 - - -
2 BMO Financial Group Second Quarter Report 2025
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Management’s Discussion and Analysis

Management’s Discussion and Analysis (MD&A) commentary is as at May 27, 2025 for the period ended April 30, 2025. The material that precedes this section comprises part of this MD&A. The MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the period ended April 30, 2025, included in this document, as well as the audited annual consolidated financial statements for the year ended October 31, 2024, and the 2024 annual MD&A, contained in Bank of Montreal’s 2024 Annual Report.

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

Bank of Montreal uses a unified branding approach that links all of the organization’s member companies. Bank of Montreal, together with its subsidiaries, is known as BMO Financial Group. In this document, the names BMO and BMO Financial Group, as well as the words “bank”, “we” and “our”, mean Bank of Montreal, together with its subsidiaries.

Table of Contents

4 Caution Regarding Forward-Looking Statements
5 Economic Developments and Outlook
6 Financial Highlights
7 Non-GAAP and Other Financial Measures
12 Foreign Exchange
12 Net Income
13 Revenue
14 Total Provision for Credit Losses
15 Impaired Loans
15 Non-Interest Expense
16 Provision for Income Taxes
16 Balance Sheet
17 Capital Management
20 Review of Operating Groups’ Performance
20 Personal and Commercial Banking (P&C)
21 Canadian Personal and Commercial Banking (Canadian P&C)
23 U.S. Personal and Commercial Banking (U.S. P&C)
25 BMO Wealth Management
26 BMO Capital Markets
28 Corporate Services
29 Summary Quarterly Earnings Trends
30 Transactions with Related Parties
30 Off-Balance Sheet Arrangements
30 Accounting Policies and Critical Accounting Estimates and Judgments
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30 Allowance for Credit Losses
31 Future Changes in Accounting Policies
31 Other Regulatory Developments
31 Risk Management
31 Top and Emerging Risks That May Affect Future Results
31 Real Estate Secured Lending
33 International Exposures
33 Market Risk
34 Insurance Market Risk
35 Liquidity and Funding Risk
37 Credit Ratings
42 Glossary of Financial Terms
44 Interim Consolidated Financial Statements
44 Consolidated Statement of Income
45 Consolidated Statement of Comprehensive Income
46 Consolidated Balance Sheet
47 Consolidated Statement of Changes in Equity
48 Consolidated Statement of Cash Flows
49 Notes to Interim Consolidated Financial Statements
68 Investor and Media Information

Bank of Montreal’s management, under the supervision of the Chief Executive Officer and the Chief Financial Officer, has evaluated the effectiveness, as at April 30, 2025, of Bank of Montreal’s disclosure controls and procedures (as defined in the rules of the U.S. Securities and Exchange Commission and the Canadian Securities Administrators) and has concluded that such disclosure controls and procedures are effective.

There were no changes in our internal control over financial reporting during the quarter ended April 30, 2025, which materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

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

BMO Financial Group Second Quarter Report 2025 3

Caution Regarding Forward-Looking Statements

Bank of Montreal’s public communications often include written or oral forward-looking statements. Statements of this type are included in this document and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the “safe harbor” provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this document may include, but are not limited to: statements with respect to our objectives and priorities for fiscal 2025 and beyond; our strategies or future actions; our targets and commitments (including with respect to net zero emissions); expectations for our financial condition, capital position, the regulatory environment in which we operate, the results of, or outlook for, our operations or the Canadian, U.S. and international economies; and include statements made by our management. Forward-looking statements are typically identified by words such as “will”, “would”, “should”, “believe”, “expect”, “anticipate”, “project”, “intend”, “estimate”, “plan”, “goal”, “commit”, “target”, “may”, “might”, “schedule”, “forecast”, “outlook”, “timeline”, “suggest”, “seek” and “could” or negative or grammatical variations thereof.

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

The future outcomes that relate to forward-looking statements may be influenced by many factors, including, but not limited to: general economic and market conditions in the countries in which we operate, including labour challenges and changes in foreign exchange and interest rates; political conditions, including changes relating to, or affecting, economic or trade matters, including tariffs, countermeasures and tariff mitigation policies; changes to our credit ratings; cyber and information security, including the threat of data breaches, hacking, identity theft and corporate espionage, as well as the possibility of denial of service resulting from efforts targeted at causing system failure and service disruption; technology resilience, innovation and competition; failure of third parties to comply with their obligations to us; disruptions of global supply chains; environmental and social risk, including climate change; the Canadian housing market and consumer leverage; inflationary pressures; changes in laws, including tax legislation and interpretation, or in supervisory expectations or requirements, including capital, interest rate and liquidity requirements and guidance, including if the bank were designated a global systemically important bank, and the effect of such changes on funding costs and capital requirements; changes in monetary, fiscal or economic policy; weak, volatile or illiquid capital or credit markets; the level of competition in the geographic and business areas in which we operate; exposure to, and the resolution of, significant litigation or regulatory matters, the appeal of favourable outcomes and our ability to successfully appeal adverse outcomes of such matters and the timing, determination and recovery of amounts related to such matters; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to execute our strategic plans, complete proposed acquisitions or dispositions and integrate acquisitions, including obtaining regulatory approvals, and realize any anticipated benefits from such plans and transactions; critical accounting estimates and judgments, and the effects of changes in accounting standards, rules and interpretations on these estimates; operational and infrastructure risks, including with respect to reliance on third parties; global capital markets activities; the emergence or continuation of widespread health emergencies or pandemics, and their impact on local, national or international economies, as well as their heightening of certain risks that may affect our future results; the possible effects on our business of war or terrorist activities; natural disasters, such as earthquakes or flooding, and disruptions to public infrastructure, such as transportation, communications, power or water supply; and our ability to anticipate and effectively manage risks arising from all of the foregoing factors.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors and risks could adversely affect our results. For more information, please refer to the discussion in the Risks That May Affect Future Results section, and the sections related to credit and counterparty, market, insurance, liquidity and funding, operational non-financial, legal and regulatory, strategic, environmental and social, and reputation risk, in the Enterprise-Wide Risk Management section of BMO’s 2024 Annual Report, and the Risk Management section in our Second Quarter 2025 Report to Shareholders, all of which outline certain key factors and risks that may affect our future results. Investors and others should carefully consider these factors and risks, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. We do not undertake to update any forward-looking statements, whether written or oral, that may be made from time to time by the organization or on its behalf, except as required by law. The forward-looking information contained in this document is presented for the purpose of assisting shareholders and analysts in understanding our financial position as at and for the periods ended on the dates presented, as well as our strategic priorities and objectives, and may not be appropriate for other purposes.

Material economic assumptions underlying the forward-looking statements contained in this document include those set out in the Economic Developments and Outlook section of BMO’s 2024 Annual Report, as updated in the Economic Developments and Outlook section in our Second Quarter 2025 Report to Shareholders, as well as in the Allowance for Credit Losses section of BMO’s 2024 Annual Report, as updated in the Allowance for Credit Losses section in our Second Quarter 2025 Report to Shareholders. Assumptions about the performance of the Canadian and U.S. economies, as well as overall market conditions and their combined effect on our business, are material factors we consider when determining our strategic priorities, objectives and expectations for our business. In determining our expectations for economic growth, we primarily consider historical economic data, past relationships between economic and financial variables, changes in government policies, and the risks to the domestic and global economy.

4 BMO Financial Group Second Quarter Report 2025

Economic Developments and Outlook ^(1)^

The ongoing change in U.S. trade pronouncements has created a heightened sense of uncertainty that is impacting both Canada and the United States by depressing confidence and slowing consumer spending and business investment. New U.S. tariffs on imported motor vehicles, steel, aluminum and goods that are not compliant with the Canada-United States-Mexico Agreement (CUSMA) will likely cause Canadian exports to decline for a couple of quarters. The ultimate impact on economic growth in both countries will depend on the level and duration of tariffs and the outcome of trade negotiations.

Canada’s real gross domestic product (GDP) growth is expected to moderate to an annualized rate of 1.5% in the first quarter of 2025 from 2.6% in the fourth quarter of 2024, before further contracting moderately in the second and third quarters. Annual real GDP growth in 2025 is anticipated to slow to 1.0% from 1.5% in 2024, before picking up to 1.2% in 2026. Assuming agreements relating to future trade policies can be reached between the Canadian and U.S. governments, economic growth is projected to turn positive later in 2025 and improve further in 2026. The recovery would be supported by the easing of trade tensions, lower interest rates, a low-valued currency and expansionary fiscal policies. Employment rose modestly in April 2025 and grew a healthy 1.2% year-over-year. The unemployment rate has risen from 6.2% to 6.9% over the past year, entirely due to rapid labour force growth, which is now slowing due to a sizeable reduction in immigration. The expected near-term contraction in real GDP could lift the jobless rate to 7.7% by the end of the year, before declining in 2026 on firmer economic activity. Consumer price index inflation has fluctuated widely, reflecting temporary changes in sales taxes, but remains low at 1.7% year-over-year in April 2025. Retaliatory tariffs applied to some U.S. imports will temporarily lift inflation, but the annual rate is still expected to average 2.0% in 2025 and 2026, in line with the Bank of Canada’s medium-term target. After reducing the policy rate by 225 basis points since last summer, the Bank of Canada held interest rates steady in April 2025, adopting a more cautious stance due to tariff-related uncertainty surrounding both inflation and growth. We anticipate the central bank will reduce the policy rate three more times in 2025 by a total of 75 basis points to address a weaker economy. Industry-wide growth in residential mortgage balances improved to 4.5% year-over-year in March 2025. However, economic uncertainty related to the trade war has already contributed to a sharp reversal in home sales this year, and growth is projected to slow for the remainder of the year, before improving in 2026 as housing market activity responds to a firmer economy and lower borrowing costs. Year-over-year growth in consumer credit (excluding mortgages) held firm at 4.1% in March 2025, but is anticipated to decelerate as a result of rising unemployment. Industry-wide growth in non-financial corporate credit balances strengthened to 3.5% year-over-year in March 2025, but balances are expected to decline modestly in the remainder of the year due to a contraction in business investment. The Canadian dollar is projected to remain weak in 2025, reflecting the low interest rate environment and economic concerns.

The U.S. economy lost momentum early this year due to trade policy uncertainty and still-elevated interest rates. Real GDP contracted 0.3% annualized in the first quarter of 2025 after growing 2.4% in the fourth quarter of 2024, as businesses rushed to import products, supplies and equipment ahead of pending tariffs. A sharp increase in the average effective tariff on U.S. imports will depress activity in the second quarter. Annual GDP growth in 2025 is expected to average 1.3%, slowing from 2.8% in 2024. Recent efforts towards de-escalation of the trade war are promising, including a 90-day rollback of retaliatory duties between the United States and China. Assuming trade talks lead to a permanent reduction in some tariffs and Congress approves proposed legislation to reduce corporate and personal income taxes, economic growth is expected to strengthen to 1.4% in 2026. Employment growth has moderated, but remains healthy with non-farm payrolls expanding 1.2% year-over-year in April 2025. However, federal job cuts and delayed hiring in the private sector could lead to a significant slowing in job growth this year. While the unemployment rate remains low at 4.2%, it is expected to rise to 5.0% by the end of the year. Consumer price index inflation declined to 2.3% year-over-year in April 2025, benefitting in part from lower oil prices. Tariffs are expected to lift annual inflation to above 3% later this year, before moderating in response to weaker demand and an expected roll back of some tariffs. The Federal Reserve has held policy rates steady this year, due to the uncertain effect of tariffs on economic growth and inflation, but is expected to reduce rates by a cumulative 150 basis points between July 2025 and June 2026 to address a rising unemployment rate. Growth in residential mortgage balances at commercial banks slowed considerably to 1.7% year-over-year in April 2025, due to continued weakness in home sales, but will likely strengthen later in the year as mortgage rates decline. Year-over-year growth in consumer loan balances was 2.4% in April 2025, and is projected to remain moderate in 2025. Year-over-year growth in business, industrial and commercial real estate credit remains weak at 1.3% in April 2025, due to still elevated borrowing costs and uncertain trade policies, and is unlikely to recover until the trade war abates.

The economic outlook is subject to several risks that could lead to a less favourable outcome for the North American economy. The most immediate threat is from a possible escalation of the trade war, such as a resumption of reciprocal tariffs by the United States on many countries beyond July 2025. In addition, investors could lose confidence in holding U.S. assets, including Treasury securities, risking renewed weakness in financial markets. Canadian businesses face longer-term risks in the event of an unsuccessful renegotiation of the CUSMA. Other risks stem from the continued conflict in Ukraine and the Middle East, and ongoing diplomatic tensions between Canada and India.

Our operations, clients, and customers may be affected by significant changes to the economic environment and increased economic uncertainty. An increase in provisions for credit losses, volatility in capital markets and slower loan growth could result if tariffs are high and persistent. Management regularly monitors the economic environment to take proactive actions 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<br>year.
BMO Financial Group Second Quarter Report 2025 5
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Financial Highlights

TABLE 1
(Canadian in millions, except as noted) Q1-2025 Q2-2024 YTD-2025 YTD-2024
Summary Income Statement (1)
Net interest income 5,097 5,398 4,515 **** 10,495 9,236
Non-interest revenue 3,582 3,868 3,459 **** 7,450 6,410
Revenue 8,679 9,266 7,974 **** 17,945 15,646
Provision for credit losses on impaired loans 765 859 658 **** 1,624 1,131
Provision for credit losses on performing loans 289 152 47 **** 441 201
Total provision for credit losses (PCL) 1,054 1,011 705 **** 2,065 1,332
Non-interest expense 5,019 5,427 4,844 **** 10,446 10,233
Provision for income taxes 644 690 559 **** 1,334 923
Net income 1,962 2,138 1,866 **** 4,100 3,158
Net income attributable to non-controlling interest in<br>subsidiaries 2 4 4 **** 6 6
Dividends on preferred shares and distributions on other equity<br>instruments 142 65 143 **** 207 183
Net income available to common shareholders 1,818 2,069 1,719 **** 3,887 2,969
Adjusted net income 2,046 2,289 2,033 **** 4,335 3,926
Adjusted net income available to common shareholders 1,902 2,220 1,886 **** 4,122 3,737
Common Share Data (, except as noted) (1)
Basic earnings per share 2.51 2.84 2.36 **** 5.34 4.09
Diluted earnings per share 2.50 2.83 2.36 **** 5.34 4.08
Adjusted diluted earnings per share 2.62 3.04 2.59 **** 5.66 5.14
Book value per share 108.03 109.46 97.67 **** 108.03 97.67
Closing share price 132.09 143.88 122.97 **** 132.09 122.97
Number of common shares outstanding (in millions)
End of period 722.1 728.8 729.3 **** 722.1 729.3
Average basic 725.4 729.6 728.3 **** 727.5 726.0
Average diluted 726.4 730.7 729.3 **** 728.6 726.9
Market capitalization ( billions) 95.4 104.9 89.7 **** 95.4 89.7
Dividends declared per share 1.59 1.59 1.51 **** 3.18 3.02
Dividend yield (%) 4.8 4.4 4.9 **** 4.8 4.9
Dividend payout ratio (%) 63.4 56.1 64.0 **** 59.5 73.9
Adjusted dividend payout ratio (%) 60.6 52.3 58.3 **** 56.1 58.7
Financial Measures and Ratios (%) (1) (2)
Return on equity (ROE) 9.4 10.6 9.9 **** 10.0 8.5
Adjusted return on equity 9.8 11.3 10.9 **** 10.6 10.7
Return on tangible common equity (ROTCE) 12.8 14.4 14.0 **** 13.6 12.1
Adjusted return on tangible common equity 12.8 14.9 14.6 **** 13.9 14.5
Efficiency ratio 57.8 58.6 60.7 **** 58.2 65.4
Adjusted efficiency ratio 56.5 56.3 58.0 **** 56.4 59.4
Operating leverage 5.2 20.1 14.3 **** 12.6 17.9
Adjusted operating leverage 2.7 8.9 3.0 **** 5.7 (0.9 )
Net interest margin on average earning assets 1.60 1.62 1.51 **** 1.61 1.54
Adjusted net interest margin, excluding trading net interest income, and trading and insurance<br>assets 1.97 1.93 1.82 **** 1.95 1.83
Effective tax rate 24.70 24.39 23.07 **** 24.54 22.62
Adjusted effective tax rate 24.73 24.52 23.27 **** 24.62 22.86
Total PCL-to-average net<br>loans and acceptances 0.63 0.58 0.44 **** 0.61 0.41
PCL on impaired loans-to-average net loans and acceptances 0.46 0.50 0.41 **** 0.48 0.35
Balance Sheet and Other Information (as at, millions, except as noted)
Assets 1,440,269 1,468,093 1,374,053 **** 1,440,269 1,374,053
Average earning assets 1,308,774 1,319,541 1,216,579 **** 1,314,247 1,205,372
Gross loans and acceptances 681,102 694,027 664,658 **** 681,102 664,658
Net loans and acceptances 676,142 689,235 660,644 **** 676,142 660,644
Deposits 958,267 996,832 937,572 **** 958,267 937,572
Common shareholders’ equity 78,008 79,772 71,225 **** 78,008 71,225
Total risk weighted assets (3) 425,066 433,944 417,994 **** 425,066 417,994
Assets under administration 799,054 830,137 725,921 **** 799,054 725,921
Assets under management 437,911 450,617 385,936 **** 437,911 385,936
Capital and Liquidity Measures (%) (3)
Common Equity Tier 1 Ratio 13.5 13.6 13.1 **** 13.5 13.1
Tier 1 Capital Ratio 15.3 15.4 14.9 **** 15.3 14.9
Total Capital Ratio 17.9 17.6 17.0 **** 17.9 17.0
Leverage Ratio 4.4 4.4 4.3 **** 4.4 4.3
TLAC Ratio 29.9 29.8 28.0 **** 29.9 28.0
Liquidity Coverage Ratio (LCR) 134 128 128 **** 134 128
Net Stable Funding Ratio (NSFR) 117 116 115 **** 117 115
Foreign Exchange Rates ()
As at Canadian/U.S. dollar 1.3786 1.4514 1.3763 **** 1.3786 1.3763
Average Canadian/U.S. dollar 1.4203 1.4303 1.3625 **** 1.4254 1.3507

All values are in US Dollars.

(1) Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented<br>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<br>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<br>Liquidity Adequacy Requirements (LAR) Guideline, as set out by the Office of the Superintendent of Financial Institutions (OSFI), as applicable.
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Certain comparative figures have been reclassified to conform with the current period’s presentation.

6 BMO Financial Group Second Quarter Report 2025

Non-GAAP and Other Financial Measures

Results and measures in this document are presented on a generally accepted accounting principles (GAAP) basis. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from our audited annual consolidated financial statements and our unaudited interim consolidated financial statements, prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board. References to GAAP mean IFRS. We use a number of financial measures to assess our performance, as well as the performance of our operating segments, including amounts, measures and ratios that are presented on a non-GAAP basis, as described below. We believe that these non-GAAP amounts, measures and ratios, read together with our GAAP results, provide readers with a better understanding of how management assesses results.

Non-GAAP amounts, measures and ratios do not have standardized meanings under GAAP. They are unlikely to be comparable to similar measures presented by other companies and should not be viewed in isolation from, or as a substitute for, GAAP results.

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

Adjusted measures and ratios

Management considers both reported and adjusted results and measures to be useful in assessing underlying ongoing business performance. Adjusted results and measures remove certain specified items from revenue, non-interest expense, provision for credit losses and income taxes, as detailed in the following table. Adjusted results and measures presented in this document are non-GAAP. Presenting results on both a reported basis and an adjusted basis permits readers to assess the impact of certain items on results for the periods presented, and to better assess results excluding those items that may not be reflective of ongoing business performance. As such, the presentation may facilitate readers’ analysis of trends. Except as otherwise noted, management’s discussion of changes in reported results in this document applies equally to changes in the corresponding adjusted results.

Tangible common equity and return on tangible common equity

Tangible common equity is calculated as common shareholders’ equity, less goodwill and acquisition-related intangible assets, net of related deferred tax liabilities. Return on tangible common equity (ROTCE) is calculated as net income available to common shareholders, adjusted for the amortization of acquisition-related intangible assets and any impairments, as a percentage of average tangible common equity. ROTCE is commonly used in the North American banking industry and is meaningful because it measures the performance of businesses consistently, whether they were acquired or developed organically.

Adjusting Items

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

• Amortization of acquisition-related intangible assets and any impairments of $81 million ($109 million pre-tax) in Q2-2025, recorded in non-interest expense in the related operating group. Prior periods included $79 million<br>($106 million pre-tax) in Q1-2025, $79 million ($107 million pre-tax) in<br>Q2-2024, and $84 million ($112 million pre-tax) in Q1-2024.
• A reversal of acquisition and integration costs of $1 million ($2 million<br>pre-tax) related to the acquisition of Bank of the West in Q2-2025, recorded in non-interest expense in Corporate Services. Prior<br>periods included acquisition and integration costs of $7 million ($10 million pre-tax) in Q1-2025, $26 million ($36 million pre-tax) in Q2-2024, and $57 million ($76 million pre-tax) in Q1-2024, recorded in non-interest expense in the related operating group.
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• Impact of a U.S. Federal Deposit Insurance Corporation (FDIC) special assessment expense of $4 million<br>($5 million pre-tax) in Q2-2025, recorded in non-interest expense in Corporate Services. Prior periods included a<br>$5 million ($7 million pre-tax) partial reversal of non-interest expense in Q1-2025, a $50 million<br>($67 million pre-tax) expense in Q2-2024 and a $313 million ($417 million pre-tax) expense in Q1-2024.
--- ---
• The impact of a lawsuit associated with a predecessor bank, M&I Marshall and Ilsley Bank, recorded in Corporate<br>Services in the prior year. Prior periods included $12 million ($15 million pre-tax) in Q2-2024 and $11 million ($15 million pre-tax) in Q1-2024, both comprising interest expense of $14 million and non-interest expense of $1 million. For further<br>information, refer to the Provisions and Contingent Liabilities section in Note 25 of the audited annual consolidated financial statements of BMO’s 2024 Annual Report.
--- ---
• Impact of aligning accounting policies for employee vacation across legal entities of $70 million<br>($96 million pre-tax) in Q1-2025, recorded in non-interest expense in Corporate Services.
--- ---
• Net accounting loss of $136 million ($164 million pre-tax) on the<br>sale of a portfolio of recreational vehicle loans related to balance sheet optimization in Q1-2024, recorded in non-interest revenue in Corporate Services.<br>
--- ---

Adjusting items in aggregate decreased net income by $84 million in the current quarter, compared with a decrease of $167 million in the prior year and a decrease of $151 million in the prior quarter. On a year-to-date basis, adjusting items in aggregate decreased net income by $235 million in the current year, compared with a decrease of $768 million in the prior year.

BMO Financial Group Second Quarter Report 2025 7

Non-GAAP and Other Financial Measures ^(1)^ ****

TABLE 2
(Canadian in millions, except as noted) Q1-2025 Q2-2024 YTD-2025 YTD-2024
Reported Results
Net interest income 5,097 **** 5,398 4,515 **** 10,495 **** 9,236
Non-interest revenue 3,582 **** 3,868 3,459 **** 7,450 **** 6,410
Revenue 8,679 **** 9,266 7,974 **** 17,945 **** 15,646
Provision for credit losses (1,054 ) (1,011 ) (705 ) **** (2,065 ) (1,332 )
Non-interest expense (5,019 ) (5,427 ) (4,844 ) **** (10,446 ) (10,233 )
Income before income taxes 2,606 **** 2,828 2,425 **** 5,434 **** 4,081
Provision for income taxes (644 ) (690 ) (559 ) **** (1,334 ) (923 )
Net income 1,962 **** 2,138 1,866 **** 4,100 **** 3,158
Dividends on preferred shares and distributions on other equity instruments 142 **** 65 143 **** 207 **** 183
Net income attributable to<br>non-controlling interest in subsidiaries 2 **** 4 4 **** 6 **** 6
Net income available to common shareholders 1,818 **** 2,069 1,719 **** 3,887 **** 2,969
Diluted EPS () 2.50 **** 2.83 2.36 **** 5.34 **** 4.08
Adjusting Items Impacting Revenue (Pre-tax)
Legal provision/reversal (including related interest expense and legal fees) - **** - (14 ) **** - **** (28 )
Impact of loan portfolio sale - **** - - **** - **** (164 )
Impact of adjusting items on revenue<br>(pre-tax) - **** - (14 ) **** - **** (192 )
Adjusting Items Impacting Non-Interest Expense (Pre-tax)
Acquisition and integration costs/reversal 2 **** (10 ) (36 ) **** (8 ) (112 )
Amortization of acquisition-related intangible assets (109 ) (106 ) (107 ) **** (215 ) (219 )
Legal provision/reversal (including related interest expense and legal fees) - **** - (1 ) **** - **** (2 )
FDIC special assessment (5 ) 7 (67 ) **** 2 **** (484 )
Impact of alignment of accounting policies - **** (96 ) - **** (96 ) -
Impact of adjusting items on<br>non-interest expense (pre-tax) (112 ) (205 ) (211 ) **** (317 ) (817 )
Impact of adjusting items on reported net income (pre-tax) (112 ) (205 ) (225 ) **** (317 ) (1,009 )
Adjusting Items Impacting Revenue (After-tax)
Legal provision/reversal (including related interest expense and legal fees) - **** - (11 ) **** - **** (21 )
Impact of loan portfolio sale - **** - - **** - **** (136 )
Impact of adjusting items on revenue<br>(after-tax) - **** - (11 ) **** - **** (157 )
Adjusting Items Impacting Non-Interest Expense (After-tax)
Acquisition and integration costs/reversal 1 **** (7 ) (26 ) **** (6 ) (83 )
Amortization of acquisition-related intangible assets (81 ) (79 ) (79 ) **** (160 ) (163 )
Legal provision/reversal (including related interest expense and legal fees) - **** - (1 ) **** - **** (2 )
FDIC special assessment (4 ) 5 (50 ) **** 1 **** (363 )
Impact of alignment of accounting policies - **** (70 ) - **** (70 ) -
Impact of adjusting items on<br>non-interest expense (after-tax) (84 ) (151 ) (156 ) **** (235 ) (611 )
Impact of adjusting items on reported net income (after-tax) (84 ) (151 ) (167 ) **** (235 ) (768 )
Impact on diluted EPS () (0.12 ) (0.21 ) (0.23 ) **** (0.32 ) (1.06 )
Adjusted Results
Net interest income 5,097 **** 5,398 4,529 **** 10,495 **** 9,264
Non-interest revenue 3,582 **** 3,868 3,459 **** 7,450 **** 6,574
Revenue 8,679 **** 9,266 7,988 **** 17,945 **** 15,838
Provision for credit losses (1,054 ) (1,011 ) (705 ) **** (2,065 ) (1,332 )
Non-interest expense (4,907 ) (5,222 ) (4,633 ) **** (10,129 ) (9,416 )
Income before income taxes 2,718 **** 3,033 2,650 **** 5,751 **** 5,090
Provision for income taxes (672 ) (744 ) (617 ) **** (1,416 ) (1,164 )
Net income 2,046 **** 2,289 2,033 **** 4,335 **** 3,926
Net income available to common shareholders 1,902 **** 2,220 1,886 **** 4,122 **** 3,737
Diluted EPS () 2.62 **** 3.04 2.59 **** 5.66 **** 5.14

All values are in US Dollars.

(1) Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented<br>in the table above. Refer to the commentary in this Non-GAAP and Other Financial Measures section for further information on adjusting items.
8 BMO Financial Group Second Quarter Report 2025
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Summary of Reported and Adjusted Results by Operating Segment

TABLE 3
(Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C BMO WealthManagement BMO CapitalMarkets CorporateServices Total Bank U.S. Segment (1)(US in millions)
Q2-2025
Reported net income (loss) **** 782 **** 546 **** 1,328 **** 361 **** 431 **** (158 ) **** 1,962 **** ****
Dividends on preferred shares and distributions on other equity instruments **** 11 **** 14 **** 25 **** 3 **** 10 **** 104 **** **** 142 **** ****
Net income (loss) attributable to non-controlling interest in<br>subsidiaries **** - **** 5 **** 5 **** - **** - **** (3 ) **** 2 **** ****
Net income (loss) available to common shareholders **** 771 **** 527 **** 1,298 **** 358 **** 421 **** (259 ) **** 1,818 **** ****
Acquisition and integration costs/reversal (2) **** - **** - **** - **** - **** - **** (1 ) **** (1 ) )
Amortization of acquisition-related intangible assets **** 4 **** 72 **** 76 **** 2 **** 3 **** - **** **** 81 **** ****
Impact of FDIC special assessment **** - **** - **** - **** - **** - **** 4 **** **** 4 **** ****
Adjusted net income (loss) (3) **** 786 **** 618 **** 1,404 **** 363 **** 434 **** (155 ) **** 2,046 **** ****
Adjusted net income (loss) available to common shareholders<br>(3) **** 775 **** 599 **** 1,374 **** 360 **** 424 **** (256 ) **** 1,902 **** ****
Q1-2025
Reported net income (loss) 894 580 1,474 369 587 (292 ) 2,138
Dividends on preferred shares and distributions on other equity instruments 12 15 27 2 10 26 65
Net income attributable to non-controlling interest in<br>subsidiaries - - - - - 4 4
Net income (loss) available to common shareholders 882 565 1,447 367 577 (322 ) 2,069
Acquisition and integration costs (2) - - - - - 7 7
Amortization of acquisition-related intangible assets 3 70 73 2 4 - 79
Impact of FDIC special assessment - - - - - (5 ) (5 ) )
Impact of alignment of accounting policies - - - - - 70 70
Adjusted net income (loss) (3) 897 650 1,547 371 591 (220 ) 2,289
Adjusted net income (loss) available to common shareholders<br>(3) 885 635 1,520 369 581 (250 ) 2,220
Q2-2024
Reported net income (loss) 872 543 1,415 320 459 (328 ) 1,866
Dividends on preferred shares and distributions on other equity instruments 11 13 24 2 9 108 143
Net income attributable to non-controlling interest in<br>subsidiaries - 4 4 - - - 4
Net income (loss) available to common shareholders 861 526 1,387 318 450 (436 ) 1,719
Acquisition and integration costs (2) 2 - 2 - 2 22 26
Amortization of acquisition-related intangible assets 3 69 72 2 5 - 79
Legal provision/reversal (including related interest expense and legal fees) - - - - - 12 12
Impact of FDIC special assessment - - - - - 50 50
Adjusted net income (loss) (3) 877 612 1,489 322 466 (244 ) 2,033
Adjusted net income (loss) available to common shareholders<br>(3) 866 595 1,461 320 457 (352 ) 1,886
YTD-2025
Reported net income (loss) **** 1,676 **** 1,126 **** 2,802 **** 730 **** 1,018 **** (450 ) **** 4,100 **** ****
Dividends on preferred shares and distributions on other equity instruments **** 23 **** 29 **** 52 **** 5 **** 20 **** 130 **** **** 207 **** ****
Net income attributable to non-controlling interest in<br>subsidiaries **** - **** 5 **** 5 **** - **** - **** 1 **** **** 6 **** ****
Net income (loss) available to common shareholders **** 1,653 **** 1,092 **** 2,745 **** 725 **** 998 **** (581 ) **** 3,887 **** ****
Acquisition and integration costs (2) **** - **** - **** - **** - **** - **** 6 **** **** 6 **** ****
Amortization of acquisition-related intangible assets **** 7 **** 142 **** 149 **** 4 **** 7 **** - **** **** 160 **** ****
Impact of FDIC special assessment **** - **** - **** - **** - **** - **** (1 ) **** (1 ) )
Impact of alignment of accounting policies **** - **** - **** - **** - **** - **** 70 **** **** 70 **** ****
Adjusted net income (loss) (3) **** 1,683 **** 1,268 **** 2,951 **** 734 **** 1,025 **** (375 ) **** 4,335 **** ****
Adjusted net income (loss) available to common shareholders<br>(3) **** 1,660 **** 1,234 **** 2,894 **** 729 **** 1,005 **** (506 ) **** 4,122 **** ****

All values are in US Dollars.

(1) U.S. segment comprises reported and adjusted results recorded in U.S. P&C and our U.S. operations in BMO Wealth<br>Management, BMO Capital Markets and Corporate Services.
(2) Acquisition and integration costs are recorded in non-interest expense in the<br>related operating groups. Expenses related to the acquisition of Bank of the West were recorded in Corporate Services; expenses related to the acquisition of Clearpool and Radicle were recorded in BMO Capital Markets; and expenses related to the<br>acquisition of AIR MILES were recorded in Canadian P&C.
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(3) Refer to the commentary in this Non-GAAP and Other Financial Measures section for<br>details on adjusting items.
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BMO Financial Group Second Quarter Report 2025 9
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Summary of Reported and Adjusted Results by Operating Segment (Continued)

TABLE 3 (Continued)
(Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C BMO WealthManagement BMO CapitalMarkets CorporateServices Total Bank U.S. Segment (1)(US in millions)
YTD-2024
Reported net income (loss) 1,793 1,103 2,896 560 852 (1,150 ) 3,158
Dividends on preferred shares and distributions on other equity instruments 21 26 47 4 18 114 183
Net income attributable to non-controlling interest in<br>subsidiaries - 4 4 - - 2 6
Net income (loss) available to common shareholders 1,772 1,073 2,845 556 834 (1,266 ) 2,969
Acquisition and integration costs (2) 3 - 3 - 12 68 83
Amortization of acquisition-related intangible assets 6 144 150 3 10 - 163
Legal provision/reversal (including related interest expense and legal fees) - - - - - 23 23
Impact of loan portfolio sale - - - - - 136 136
Impact of FDIC special assessment - - - - - 363 363
Adjusted net income (loss) (3) 1,802 1,247 3,049 563 874 (560 ) 3,926
Adjusted net income (loss) available to common shareholders<br>(3) 1,781 1,217 2,998 559 856 (676 ) 3,737

All values are in US Dollars.

(1) U.S. segment comprises reported and adjusted results recorded in U.S. P&C and our U.S. operations in BMO Wealth<br>Management, BMO Capital Markets and Corporate Services.
(2) Acquisition and integration costs are recorded in non-interest expense in the<br>related operating groups. Expenses related to the acquisition of Bank of the West were recorded in Corporate Services; expenses related to the acquisition of Clearpool and Radicle were recorded in BMO Capital Markets; and expenses related to the<br>acquisition of AIR MILES were recorded in Canadian P&C.
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(3) Refer to the commentary in this Non-GAAP and Other Financial Measures section for<br>details on adjusting items.
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Return on Equity and Return on Tangible Common Equity

TABLE 4
(Canadian $ in millions, except as noted) Q2-2025 Q1-2025 Q2-2024 YTD-2025 YTD-2024
Reported net income **** 1,962 **** 2,138 1,866 **** 4,100 **** 3,158
Net income attributable to<br>non-controlling interest in subsidiaries **** 2 **** 4 4 **** 6 **** 6
Net income attributable to bank shareholders **** 1,960 **** 2,134 1,862 **** 4,094 **** 3,152
Dividends on preferred shares and distributions on other equity<br>instruments **** 142 **** 65 143 **** 207 **** 183
Net income available to common shareholders (A) **** 1,818 **** 2,069 1,719 **** 3,887 **** 2,969
After-tax amortization of<br>acquisition-related intangible assets **** 81 **** 79 79 **** 160 **** 163
Net income available to common shareholders after adjusting for<br>amortization of acquisition-related intangible assets (B) **** 1,899 **** 2,148 1,798 **** 4,047 **** 3,132
After-tax impact of other<br>adjusting items (1) **** 3 **** 72 88 **** 75 **** 605
Adjusted net income available to common shareholders (C) **** 1,902 **** 2,220 1,886 **** 4,122 **** 3,737
Average common shareholders’ equity (D) **** 79,288 **** 77,693 70,551 **** 78,478 **** 69,965
Goodwill **** (17,089 ) (17,209 ) (16,431 ) **** (17,150 ) (16,293 )
Acquisition-related intangible assets **** (2,400 ) (2,514 ) (2,694 ) **** (2,458 ) (2,720 )
Net of related deferred tax liabilities **** 986 **** 1,011 978 **** 999 **** 992
Average tangible common equity (E) **** 60,785 **** 58,981 52,404 **** 59,868 **** 51,944
Return on equity (%) (= A/D) (2) **** 9.4 **** 10.6 9.9 **** 10.0 **** 8.5
Adjusted return on equity (%) (= C/D) (2) **** 9.8 **** 11.3 10.9 **** 10.6 **** 10.7
Return on tangible common equity (%) (= B/E) (2) **** 12.8 **** 14.4 14.0 **** 13.6 **** 12.1
Adjusted return on tangible common equity (%) (= C/E) (2) **** 12.8 **** 14.9 14.6 **** 13.9 **** 14.5
(1) Refer to the commentary in this Non-GAAP and Other Financial Measures section for<br>details on adjusting items.
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(2) Quarterly calculations are on an annualized basis.
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10 BMO Financial Group Second Quarter Report 2025
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Return on Equity by Operating Segment ^(1)^ ****

TABLE 5
Q2-2025
(Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C BMO WealthManagement BMO CapitalMarkets CorporateServices Total Bank U.S. Segment (2)(US in millions)
Reported
Net income (loss) available to common shareholders **** 771 **** 527 **** 1,298 **** 358 **** 421 **** (259 ) **** 1,818
Total average common equity **** 16,760 **** 35,461 **** 52,221 **** 5,092 **** 13,931 **** 8,044 **** **** 79,288
Return on equity (%) **** 18.9 **** 6.1 **** 10.2 **** 28.9 **** 12.4 **** na **** **** 9.4
Adjusted (3)
Net income (loss) available to common shareholders **** 775 **** 599 **** 1,374 **** 360 **** 424 **** (256 ) **** 1,902
Total average common equity **** 16,760 **** 35,461 **** 52,221 **** 5,092 **** 13,931 **** 8,044 **** **** 79,288
Return on equity (%) **** 19.0 **** 6.9 **** 10.8 **** 29.1 **** 12.5 **** na **** **** 9.8
Q1-2025
(Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C BMO Wealth<br>Management BMO Capital<br>Markets Corporate<br>Services Total Bank U.S. Segment (2)(US in millions)
Reported
Net income (loss) available to common shareholders 882 565 1,447 367 577 (322 ) 2,069
Total average common equity 16,515 36,068 52,583 5,009 13,555 6,546 77,693
Return on equity (%) 21.2 6.2 10.9 29.0 16.9 na 10.6
Adjusted (3)
Net income (loss) available to common shareholders 885 635 1,520 369 581 (250 ) 2,220
Total average common equity 16,515 36,068 52,583 5,009 13,555 6,546 77,693
Return on equity (%) 21.3 7.0 11.5 29.2 17.0 na 11.3
Q2-2024
(Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C BMO Wealth<br>Management BMO Capital<br>Markets Corporate<br>Services Total Bank U.S. Segment (2)(US in millions)
Reported
Net income (loss) available to common shareholders 861 526 1,387 318 450 (436 ) 1,719
Total average common equity 15,750 33,078 48,828 4,736 13,008 3,979 70,551
Return on equity (%) 22.3 6.5 11.6 27.2 14.1 na 9.9
Adjusted (3)
Net income (loss) available to common shareholders 866 595 1,461 320 457 (352 ) 1,886
Total average common equity 15,750 33,078 48,828 4,736 13,008 3,979 70,551
Return on equity (%) 22.4 7.3 12.2 27.4 14.3 na 10.9
YTD-2025
(Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C BMO WealthManagement BMO CapitalMarkets CorporateServices Total Bank U.S. Segment (2)(US in millions)
Reported
Net income (loss) available to common shareholders **** 1,653 **** 1,092 **** 2,745 **** 725 **** 998 **** (581 ) **** 3,887
Total average common equity **** 16,636 **** 35,769 **** 52,405 **** 5,049 **** 13,739 **** 7,285 **** **** 78,478
Return on equity (%) **** 20.0 **** 6.2 **** 10.6 **** 29.0 **** 14.6 **** na **** **** 10.0
Adjusted (3)
Net income (loss) available to common shareholders **** 1,660 **** 1,234 **** 2,894 **** 729 **** 1,005 **** (506 ) **** 4,122
Total average common equity **** 16,636 **** 35,769 **** 52,405 **** 5,049 **** 13,739 **** 7,285 **** **** 78,478
Return on equity (%) **** 20.1 **** 7.0 **** 11.1 **** 29.1 **** 14.8 **** na **** **** 10.6
YTD-2024
(Canadian $ in millions, except as noted) Canadian P&C U.S. P&C Total P&C BMO Wealth<br>Management BMO Capital<br>Markets Corporate<br>Services Total Bank U.S. Segment (2)(US in millions)
Reported
Net income (loss) available to common shareholders 1,772 1,073 2,845 556 834 (1,266 ) 2,969
Total average common equity 15,799 33,163 48,962 4,707 13,106 3,190 69,965
Return on equity (%) 22.6 6.5 11.7 23.7 12.8 na 8.5
Adjusted (3)
Net income (loss) available to common shareholders 1,781 1,217 2,998 559 856 (676 ) 3,737
Total average common equity 15,799 33,163 48,962 4,707 13,106 3,190 69,965
Return on equity (%) 22.7 7.4 12.3 23.9 13.1 na 10.7

All values are in US Dollars.

(1) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. Capital is allocated to the operating segments based on the amount of regulatory capital required to support business activities, with unallocated capital reported in<br>Corporate Services. Capital allocation methodologies are reviewed at least annually. For further information, refer to the How BMO Reports Operating Group Results section. Return on equity ratios are presented on an annualized basis.<br>
(2) U.S. segment comprises reported and adjusted results and allocated capital recorded in U.S. P&C and our U.S.<br>operations in BMO Wealth Management, BMO Capital Markets and Corporate Services.
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(3) Refer to the commentary in this Non-GAAP and Other Financial Measures section for<br>details on adjusting items.
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na – not applicable

Caution

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

BMO Financial Group Second Quarter Report 2025 11

Foreign Exchange

TABLE 6
YTD-2025
(Canadian in millions, except as noted) vs. Q1-2025 vs. YTD-2024
Canadian/U.S. dollar exchange rate (average)
Current period 1.4203 1.4203 1.4254
Prior period 1.3625 1.4303 1.3507
Effects on U.S. segment reported results
Increased (Decreased) net interest income 89 (17 ) 240
Increased (Decreased)<br>non-interest revenue 60 (11 ) 139
Increased (Decreased) total revenue 149 (28 ) 379
Decreased (Increased) provision for credit losses (13 ) 3 (34 )
Decreased (Increased) non-interest expense (95 ) 17 (278 )
Decreased (Increased) provision for income taxes (9 ) 2 (12 )
Increased (Decreased) net income 32 (6 ) 55
Impact on earnings per share () 0.04 (0.01 ) 0.07
Effects on U.S. segment adjusted results
Increased (Decreased) net interest income 90 (17 ) 242
Increased (Decreased)<br>non-interest revenue 59 (11 ) 148
Increased (Decreased) total revenue 149 (28 ) 390
Decreased (Increased) provision for credit losses (13 ) 3 (34 )
Decreased (Increased) non-interest expense (87 ) 16 (234 )
Decreased (Increased) provision for income taxes (10 ) 2 (25 )
Increased (Decreased) net income 39 (7 ) 97
Impact on earnings per share () 0.05 (0.01 ) 0.13

All values are in US Dollars.

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

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

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

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

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

Net Income

Q2 2025 vs. Q2 2024

Reported net income was $1,962 million, an increase of $96 million or 5% from the prior year, and adjusted net income was $2,046 million, an increase of $13 million or 1%. The impact of the stronger U.S. dollar increased net income by 2% on both a reported basis and an adjusted basis. Reported earnings per share (EPS) was $2.50, an increase of $0.14 from the prior year, and adjusted EPS was $2.62, an increase of $0.03.

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

Q2 2025 vs. Q1 2025

Reported net income decreased $176 million or 8% from the prior quarter, and adjusted net income decreased $243 million or 11%. Reported EPS decreased $0.33 from the prior quarter, and adjusted EPS decreased $0.42.

Reported net income in the prior quarter was impacted by the alignment of accounting policies for employee vacation across legal entities. The decrease in reported and adjusted net income reflected lower revenue and a higher provision for credit losses, partially offset by lower expenses. Reported and adjusted net income decreased across all operating segments. Corporate Services recorded a lower net loss on both a reported basis and an adjusted basis.

12 BMO Financial Group Second Quarter Report 2025

Q2 YTD 2025 vs. Q2 YTD 2024

Reported net income was $4,100 million, an increase of $942 million or 30% from the prior year, and adjusted net income was $4,335 million, an increase of $409 million or 10%. The impact of the stronger U.S. dollar increased net income by 2% on a reported basis and 3% on an adjusted basis. Reported EPS was $5.34, an increase of $1.26 from the prior year, and adjusted EPS was $5.66, an increase of $0.52.

The increase in reported results reflected the impact of the FDIC special assessment and the net accounting loss on the sale of a portfolio of recreation vehicles in the prior year, and lower acquisition and integration-related costs, partially offset by the impact of aligning accounting policies for employee vacation across legal entities in the current year. Adjusted results increased due to higher revenue, partially offset by a higher provision for credit losses and higher expenses. Reported and adjusted net income increased in BMO Wealth Management and BMO Capital Markets, partially offset by a decrease in Canadian P&C. U.S. P&C net income increased due to the impact of stronger U.S. dollar, and decreased on a source currency basis. Corporate Services recorded a lower net loss on both a reported basis 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

Q2 2025 vs. Q2 2024

Reported and adjusted revenue was $8,679 million, an increase of $705 million or 9% from the prior year on a reported basis, and an increase of $691 million or 9% on an adjusted basis. The impact of the stronger U.S. dollar increased reported and adjusted revenue by 2%. Reported and adjusted revenue increased across all operating segments and in Corporate Services. The impact of the transition of bankers’ acceptances exposures to loans resulted in lower non-interest revenue, offset in net interest income.

Reported and adjusted net interest income was $5,097 million, an increase of $582 million or 13% from the prior year on a reported basis, and an increase of $568 million or 13% on an adjusted basis, driven by higher net interest margin, balance growth in Canadian P&C and BMO Wealth Management, higher trading-related net interest income and the impact of the stronger U.S. dollar. Trading-related net interest income was $64 million, an increase of $50 million from the prior year.

BMO’s overall reported net interest margin of 1.60% increased 9 basis points from the prior year. Adjusted net interest margin, excluding trading-related net interest income and trading and insurance assets was 1.97%, an increase of 15 basis points, primarily due to higher deposit and loan margins and higher net interest income in Corporate Services.

Non-interest revenue was $3,582 million, an increase of $123 million or 4% from the prior year, driven by higher trading revenue, wealth management fees, deposit fees and advisory fees, as well as the impact of the stronger U.S. dollar. These were partially offset by markdowns on fair value loans, lower lending fees, including the impact of bankers’ acceptances exposures noted above, and a loss of $51 million on the strategic sale of a non-relationship U.S. credit card portfolio related to balance sheet optimization, and lower net gains on investments recorded in net securities gains, other than trading and share of profit (loss) in joint ventures.

Q2 2025 vs. Q1 2025

Reported and adjusted revenue decreased $587 million or 6% from the prior quarter. Revenue decreased across all operating segments and was relatively unchanged in Corporate Services.

Net interest income decreased $301 million or 6% from the prior quarter, driven by lower trading-related net interest income and the impact of three fewer days in the current quarter, partially offset by higher non-trading net interest margin. Trading-related net interest income decreased $206 million from the prior quarter.

BMO’s overall reported net interest margin decreased 2 basis points from the prior quarter. Adjusted net interest margin, excluding trading-related net interest income and trading and insurance assets increased 4 basis points, primarily due to higher deposit margins and lower low-yielding assets in BMO Capital Markets and Corporate Services.

Non-interest revenue decreased $286 million or 7% from the prior quarter, with decreases across most categories, including the items noted above, lower lending fees, insurance-related revenue and wealth management fees, partially offset by higher advisory fees.

Q2 YTD 2025 vs. Q2 YTD 2024

Reported and adjusted revenue was $17,945 million, an increase of $2,299 million or 15% from the prior year on a reported basis, and $2,107 million or 13% on an adjusted basis. The impact of the stronger U.S. dollar increased revenue by 3% on both a reported and an adjusted basis. Reported revenue in the prior year was impacted by the net accounting loss on the sale of a portfolio of recreational vehicle loans. Revenue increased across all operating segments and in Corporate Services.

Reported and adjusted net interest income was $10,495 million, an increase of $1,259 million or 14% from the prior year on a reported basis, and an increase of $1,231 million or 13% on an adjusted basis. The increase was driven by higher non-trading interest margin, balance growth in Canadian P&C and BMO Wealth Management, higher trading-related net interest income, and higher net interest income in Corporate Services, as well as the impact of the stronger U.S. dollar. Trading-related net interest income was $334 million, an increase of $192 million from the prior year.

BMO’s overall reported net interest margin of 1.61% increased 7 basis points from the prior year. Adjusted net interest margin, excluding trading-related net interest income and trading and insurance assets of 1.95%, increased 12 basis points, primarily due to higher deposit and loan margins.

Reported and adjusted non-interest revenue was $7,450 million, an increase of $1,040 million or 16% from the prior year on a reported basis, and an increase of $876 million or 13% on an adjusted basis, with increases across most categories, including higher trading revenue, wealth management

BMO Financial Group Second Quarter Report 2025 13

fees, deposit fees and advisory fees, as well as the impact of the stronger U.S. dollar, partially offset by higher markdowns on fair value loans and lower lending fees as noted above.

Net interest income and non-interest revenue are detailed in the unaudited interim consolidated financial statements.

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

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

TABLE 7
Average earning assets (3) Net interest margin (in basis points)
(Canadian in millions, except as noted) Q1-2025 Q2-2024 Q2-2025 Q1-2025 Q2-2024 Q2-2025 Q1-2025 Q2-2024
Canadian P&C 2,359 2,385 2,154 **** 341,885 339,325 312,320 **** 283 279 280
U.S. P&C 2,122 2,205 1,994 **** 223,071 227,215 215,614 **** 390 385 376
Personal and Commercial Banking (P&C) 4,481 4,590 4,148 **** 564,956 566,540 527,934 **** 325 321 319
All other operating groups and Corporate Services 616 808 367 **** 743,818 753,001 688,645 **** na na na
Total reported 5,097 5,398 4,515 **** 1,308,774 1,319,541 1,216,579 **** 160 162 151
Total adjusted 5,097 5,398 4,529 **** 1,308,774 1,319,541 1,216,579 **** 160 162 151
Trading net interest income and trading and insurance assets 64 270 14 **** 262,362 263,968 206,593 **** na na na
Total reported, excluding trading and insurance 5,033 5,128 4,501 **** 1,046,412 1,055,573 1,009,986 **** 197 193 181
Total adjusted, excluding trading and insurance 5,033 5,128 4,515 **** 1,046,412 1,055,573 1,009,986 **** 197 193 182
U.S. P&C (US in millions) 1,495 1,541 1,463 **** 157,057 158,863 158,241 **** 390 385 376
Average earning assets (3) Net interest margin (in basis points)
(Canadian in millions, except as noted) YTD-2024 YTD-2025 YTD-2024 YTD-2025 YTD-2024
Canadian P&C 4,744 4,295 **** 340,584 309,883 **** 281 279
U.S. P&C 4,327 4,052 **** 225,177 213,955 **** 388 381
Personal and Commercial Banking (P&C) 9,071 8,347 **** 565,761 523,838 **** 323 320
All other operating groups and Corporate Services 1,424 889 **** 748,486 681,534 **** na na
Total reported 10,495 9,236 **** 1,314,247 1,205,372 **** 161 154
Total adjusted 10,495 9,264 **** 1,314,247 1,205,372 **** 161 155
Trading net interest income and trading and insurance assets 334 142 **** 263,178 203,220 **** na na
Total reported, excluding trading and insurance 10,161 9,094 **** 1,051,069 1,002,152 **** 195 182
Total adjusted, excluding trading and insurance 10,161 9,122 **** 1,051,069 1,002,152 **** 195 183
U.S. P&C (US in millions) 3,036 3,000 **** 157,975 158,398 **** 388 381

All values are in US Dollars.

(1) Adjusted results and ratios in this table are on a non-GAAP basis and are<br>discussed in the Non-GAAP and Other Financial Measures section.
(2) Operating group revenue is presented on a taxable equivalent basis (teb) in net interest income. For further information,<br>refer to the How BMO Reports Operating Group Results section in BMO’s 2024 Annual MD&A.
--- ---
(3) Average earning assets represents the daily average balance of interest-bearing deposits at central banks, deposits with<br>other banks, securities borrowed or purchased under resale agreement, securities and loans over the period.
--- ---

na – not applicable

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

Total Provision for Credit Losses

TABLE 8
(Canadian $ in millions) Canadian P&C U.S. P&C Total P&C BMO WealthManagement BMO CapitalMarkets CorporateServices Total Bank
Q2-2025
Provision for credit losses on impaired loans **** 476 **** 247 **** **** 723 **** 2 **** **** 28 **** **** 12 **** **** 765
Provision for (recovery of) credit losses on performing<br>loans **** 132 **** 87 **** **** 219 **** 6 **** **** 73 **** **** (9 ) **** 289
Total provision for credit losses **** 608 **** 334 **** **** 942 **** 8 **** **** 101 **** **** 3 **** **** 1,054
Total PCL-to-average net<br>loans and acceptances (%) (1) **** 0.74 **** 0.66 **** **** 0.70 **** 0.07 **** **** 0.51 **** **** nm **** **** 0.63
PCL on impaired loans-to-average net loans and acceptances (%) (1) **** 0.58 **** 0.49 **** **** 0.54 **** 0.01 **** **** 0.13 **** **** nm **** **** 0.46
Q1-2025
Provision for credit losses on impaired loans 491 312 803 1 35 20 859
Provision for (recovery of) credit losses on performing<br>loans 51 102 153 (1 ) 11 (11 ) 152
Total provision for credit losses 542 414 956 - 46 9 1,011
Total PCL-to-average net<br>loans and acceptances (%) (1) 0.64 0.76 0.69 - 0.21 nm 0.58
PCL on impaired loans-to-average net loans and acceptances (%) (1) 0.58 0.58 0.58 0.01 0.16 nm 0.50
Q2-2024
Provision for credit losses on impaired loans 295 288 583 6 61 8 658
Provision for (recovery of) credit losses on performing<br>loans 103 (7 ) 96 (13 ) (9 ) (27 ) 47
Total provision for (recovery of) credit losses 398 281 679 (7 ) 52 (19 ) 705
Total PCL-to-average net<br>loans and acceptances (%) (1) 0.51 0.57 0.53 (0.07 ) 0.25 nm 0.44
PCL on impaired loans-to-average net loans and acceptances (%) (1) 0.38 0.57 0.46 0.06 0.29 nm 0.41
YTD-2025
Provision for credit losses on impaired loans **** 967 **** 559 **** **** 1,526 **** 3 **** **** 63 **** **** 32 **** **** 1,624
Provision for (recovery of) credit losses on performing<br>loans **** 183 **** 189 **** **** 372 **** 5 **** **** 84 **** **** (20 ) **** 441
Total provision for credit losses **** 1,150 **** 748 **** **** 1,898 **** 8 **** **** 147 **** **** 12 **** **** 2,065
Total PCL-to-average net<br>loans and acceptances (%) (1) **** 0.69 **** 0.71 **** **** 0.70 **** 0.04 **** **** 0.35 **** **** nm **** **** 0.61
PCL on impaired loans-to-average net loans and acceptances (%) (1) **** 0.58 **** 0.53 **** **** 0.56 **** 0.01 **** **** 0.15 **** **** nm **** **** 0.48
YTD-2024
Provision for credit losses on impaired loans 533 471 1,004 9 72 46 1,131
Provision for (recovery of) credit losses on performing<br>loans 160 100 260 (3 ) (42 ) (14 ) 201
Total provision for credit losses 693 571 1,264 6 30 32 1,332
Total PCL-to-average net<br>loans and acceptances (%) (1) 0.44 0.57 0.49 0.03 0.07 nm 0.41
PCL on impaired loans-to-average net loans and acceptances (%) (1) 0.34 0.47 0.39 0.04 0.18 nm 0.35
(1) PCL ratios are presented on an annualized basis.
--- ---

nm – not meaningful

14 BMO Financial Group Second Quarter Report 2025

Q2 2025 vs. Q2 2024

Total provision for credit losses was $1,054 million, compared with a provision of $705 million in the prior year. Total provision for credit losses as a percentage of average net loans and acceptances was 63 basis points, compared with 44 basis points in the prior year. The provision for credit losses on impaired loans was $765 million, an increase of $107 million, primarily due to higher provisions in Canadian Commercial Banking and Canadian unsecured consumer lending, partially offset by lower provisions in U.S. Commercial Banking and BMO Capital Markets. The provision for credit losses on impaired loans as a percentage of average net loans and acceptances was 46 basis points, compared with 41 basis points in the prior year. There was a $289 million provision for credit losses on performing loans, compared with a $47 million provision in the prior year. The provision for credit losses on performing loans in the current quarter was largely driven by changes in the macro-economic outlook and portfolio credit migration, partially offset by lower balances in certain portfolios.

Q2 2025 vs. Q1 2025

Total provision for credit losses increased $43 million from the prior quarter. The provision for credit losses on impaired loans decreased $94 million, due to lower provisions across all operating groups, primarily reflecting decreases in U.S. Commercial Banking and U.S. Personal and Business Banking. The provision for credit losses on impaired loans as a percentage of average net loans and acceptances was 46 basis points, compared with 50 basis points. There was a $289 million provision for credit losses on performing loans, compared with a $152 million provision in the prior quarter.

Q2 YTD 2025 vs. Q2 YTD 2024

Total provision for credit losses was $2,065 million, compared with a provision of $1,332 million in the prior year. The total provision for credit losses ratio was 61 basis points, compared with 41 basis points in the prior year. The provision for credit losses on impaired loans was $1,624 million, an increase of $493 million from the prior year, primarily due to higher provisions in Canadian Commercial Banking and Canadian unsecured consumer lending. The provision for credit losses on impaired loans ratio was 48 basis points, compared with 35 basis points in the prior year. There was a $441 million provision for credit losses on performing loans in the current year, compared with a $201 million provision in the prior year.

Impaired Loans

TABLE 9
(Canadian $ in millions, except as noted) Q2-2025 Q1-2025 Q2-2024 YTD-2025 YTD-2024
GIL, beginning of period **** 6,954 **** 5,843 4,259 **** 5,843 **** 3,960
Classified as impaired during the period **** 1,771 **** 2,373 1,988 **** 4,144 **** 3,354
Transferred to not impaired during the period **** (440 ) (364 ) (263 ) **** (804 ) (527 )
Net repayments **** (731 ) (616 ) (409 ) **** (1,347 ) (731 )
Amounts written-off **** (543 ) (424 ) (381 ) **** (967 ) (762 )
Disposals of loans **** (65 ) (2 ) - **** (67 ) (21 )
Foreign exchange and other movements **** (207 ) 144 66 **** (63 ) (13 )
GIL, end of period **** 6,739 **** 6,954 5,260 **** 6,739 **** 5,260
GIL to gross loans and acceptances (%) **** 0.99 **** 1.00 0.79 **** 0.99 **** 0.79

Total gross impaired loans and acceptances (GIL) were $6,739 million, a decrease from $6,954 million in the prior quarter, primarily due to the impact of the weaker U.S. dollar. GIL as a percentage of gross loans and acceptances decreased to 0.99% from 1.00% in the prior quarter.

Loans classified as impaired during the quarter were $1,771 million, a decrease from $2,373 million in the prior quarter, primarily due to lower business and government formations across several sectors.

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

Non-Interest Expense

Q2 2025 vs. Q2 2024

Reported non-interest expense was $5,019 million, an increase of $175 million or 4% from the prior year, and adjusted non-interest expense was $4,907 million, an increase of $274 million or 6%. The impact of the stronger U.S. dollar increased non-interest expense by 2% on both a reported and an adjusted basis.

Reported results reflected the impact of a lower FDIC special assessment, amortization of acquisition-related intangible assets in both periods, and higher acquisition and integration costs in the prior year. Adjusted non-interest expense increased, primarily due to higher employee-related expenses, including performance-based compensation, higher computer and equipment costs, and the impact of the stronger U.S. dollar, partially offset by below-trend expenses in Corporate Services.

Reported efficiency ratio was 57.8%, compared with 60.7% in the prior year, and adjusted efficiency ratio was 56.5%, compared with 58.0%. Reported operating leverage was positive 5.2% and adjusted operating leverage was positive 2.7%.

Q2 2025 vs. Q1 2025

Reported non-interest expense decreased $408 million or 8% from the prior quarter, and adjusted non-interest expense decreased $315 million or 6%.

The decrease in reported non-interest expense included the impact of alignment of accounting policies for employee vacation across legal entities in the prior quarter. The decrease in adjusted non-interest expense was primarily due to lower employee-related expenses, including stock-based compensation and seasonal benefits that are expensed in the first quarter of each year.

BMO Financial Group Second Quarter Report 2025 15

Q2 YTD 2025 vs. Q2 YTD 2024

Reported non-interest expense was $10,446 million, an increase of $213 million or 2% from the prior year, and adjusted non-interest expense was $10,129 million, an increase of $713 million or 8%. The impact of the stronger U.S. dollar increased non-interest expense by 3% on both a reported and an adjusted basis.

Reported results reflected the impact of alignment of accounting policies for employee vacation across legal entities in the current year, partially offset by lower acquisition and integration costs and a FDIC special assessment expense. The increase in non-interest expense was driven by higher employee-related costs, including performance-based compensation, higher computer and equipment costs, premises costs, as well as the impact of the stronger U.S. dollar, partially offset by below-trend other expenses.

The reported efficiency ratio was 58.2%, compared with 65.4% in the prior year. The adjusted efficiency ratio was 56.4%, compared with 59.4% in the prior year.

Non-interest expense is detailed in the unaudited interim consolidated financial statements.

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

Provision for Income Taxes

The reported provision for income taxes was $644 million, an increase of $85 million from the prior year, and a decrease of $46 million from the prior quarter. The reported effective tax rate was 24.7%, compared with 23.1% in the prior year and 24.4% in the prior quarter. The adjusted provision for income taxes was $672 million, an increase of $55 million from the prior year, and a decrease of $72 million from the prior quarter. The adjusted effective tax rate was 24.7%, compared with 23.3% in the prior year and 24.5% in the prior quarter.

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

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

Balance Sheet

TABLE 10
(Canadian $ in millions) As at April 30, 2025 As at October 31, 2024
Assets
Cash and cash equivalents and interest bearing deposits with banks **** 68,577 68,738
Securities **** 400,025 396,880
Securities borrowed or purchased under resale agreements **** 119,487 110,907
Net loans and acceptances **** 676,142 678,375
Derivative instruments **** 49,726 47,253
Other assets **** 126,312 107,494
Total assets **** 1,440,269 1,409,647
Liabilities and Equity
Deposits **** 958,267 982,440
Derivative instruments **** 57,727 58,303
Securities lent or sold under repurchase agreements **** 118,949 110,791
Other liabilities **** 209,753 165,450
Subordinated debt **** 9,740 8,377
Equity **** 85,795 84,250
Non-controlling interest in<br>subsidiaries **** 38 36
Total liabilities and equity **** 1,440,269 1,409,647

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

Total assets were $1,440.3 billion as at April 30, 2025, an increase of $30.6 billion from October 31, 2024. The impact of the weaker U.S. dollar decreased assets by $6.5 billion, excluding the impact on derivative assets.

Cash and cash equivalents and interest bearing deposits with banks were relatively unchanged.

Securities increased $3.1 billion, primarily due to higher levels of client activity in BMO Capital Markets, partially offset by the impact of the weaker U.S. dollar.

Securities borrowed or purchased under resale agreements increased $8.6 billion, due to higher levels of client activity in BMO Capital Markets.

Net loans and acceptances decreased $2.2 billion, due to the impact of the weaker U.S. dollar. Business and government loans and acceptances decreased $3.4 billion, primarily due to the impact of the weaker U.S. dollar, with lower balances in BMO Capital Markets and U.S. P&C largely offset by higher balances in Canadian P&C. Consumer instalment and other personal loans decreased $0.5 billion and credit card balances decreased $0.4 billion. Residential mortgages increased $2.7 billion.

Derivative assets increased $2.5 billion, driven by an increase in the fair value of foreign exchange contracts, partially offset by a decrease in the fair value of equity and interest rate contracts.

Other assets increased $18.8 billion, primarily in BMO Capital Markets, due to changes in the balance of unsettled securities transactions and higher cash collateral balances posted with counterparties.

16 BMO Financial Group Second Quarter Report 2025

Liabilities increased $29.1 billion from October 31, 2024. The impact of the weaker U.S. dollar decreased liabilities by $6.0 billion, excluding the impact on derivative liabilities.

Deposits decreased $24.2 billion. Customer deposits decreased $14.7 billion, with lower balances in U.S. P&C reflecting the impact of deposit optimization activities, Canadian P&C and the impact of the weaker U.S. dollar, partially offset by higher balances in BMO Wealth Management. Other deposits decreased $9.5 billion, due to lower wholesale funding in Corporate Services, lower balances in Global Markets and the impact of the weaker U.S. dollar.

Derivative liabilities decreased $0.6 billion, driven by a decrease in the fair value of equity and interest rate contracts, offset by an increase in the fair value of foreign exchange contracts.

Securities lent or sold under repurchase agreements increased $8.2 billion, due to higher levels of client activity in BMO Capital Markets.

Other liabilities increased $44.3 billion, primarily in BMO Capital Markets, due to an increase in securities sold but not yet purchased, changes in the balance of unsettled securities transactions and higher securitization liabilities, partially offset by lower balances in Corporate Services.

Subordinated debt increased $1.4 billion, reflecting an issuance in the quarter.

Equity increased $1.5 billion from October 31, 2024. Accumulated other comprehensive income increased $1.3 billion, primarily due to a decline in accumulated other comprehensive loss on cash flow hedges, partially offset by the impact of the weaker U.S. dollar on the translation of net foreign operations. Retained earnings increased $0.7 billion, as a result of net income earned in the year, partially offset by dividends and distributions on other equity instruments and the repurchase of common shares for cancellation under the normal course issuer bid (NCIB). Preferred shares and other equity instruments decreased $0.3 billion, due to the redemption of our Non-Cumulative 5-year Rate Reset Class B Preferred Shares, Series 31 (NVCC). Common shares decreased $0.2 billion, due to the repurchase of shares for cancellation under the NCIB, partially offset by the issuance of shares issued under the Amended and Restated Stock Option Plan.

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.

Capital Management

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

Second Quarter 2025 Regulatory Capital Review

BMO’s Common Equity Tier 1 (CET1) Ratio was 13.5% as at April 30, 2025, a decrease from 13.6% at the end of the first quarter of 2025, as internal capital generation was more than offset by the impact of the repurchase of common shares for cancellation under BMO’s normal course issuer bid and higher source currency risk-weighted assets (RWA).

CET1 Capital was $57.4 billion as at April 30, 2025, a decrease from $59.2 billion as at January 31, 2025, as internal capital generation was more than offset by the impact of the shares repurchased and foreign exchange movements.

RWA were $425.1 billion as at April 30, 2025, a decrease from $433.9 billion as at January 31, 2025. RWA decreased, primarily due to the impact of foreign exchange movements, as well as lower operational risk, partially offset by higher credit risk reflecting changes in asset quality and asset size, and higher market risk.

In calculating regulatory capital ratios, total RWA must be increased when a capital floor amount calculated under the standardized approaches, multiplied by a capital floor adjustment factor, is higher than a similar calculation using more risk-sensitive internal modelled approaches, where applicable. The capital floor was not operative as at April 30, 2025, unchanged from January 31, 2025.

The bank’s Tier 1 and Total Capital Ratios were 15.3% and 17.9%, respectively, as at April 30, 2025, compared with 15.4% and 17.6%, respectively, as at January 31, 2025. The Tier 1 Capital Ratio was lower due to the same factors noted for the CET1 Ratio. The Total Capital Ratio was higher, as factors impacting the Tier 1 Capital ratio were largely offset by the issuance of $1,250 million of subordinated notes.

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 April 30, 2025, unchanged from the first quarter of 2025, as lower Tier 1 Capital was offset by lower leverage exposures.

The bank’s risk-based Total Loss Absorbing Capacity (TLAC) Ratio and TLAC Leverage Ratio were 29.9% and 8.5%, respectively, as at April 30, 2025, compared with 29.8% and 8.5%, respectively, as at January 31, 2025.

BMO Financial Group Second Quarter Report 2025 17

Regulatory Capital Developments

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

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

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

Regulatory Capital, Leverage and Total Loss AbsorbingCapacity

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

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

TABLE 11
(% of risk-weighted assets or leverage exposures) Minimum capital,<br>leverage and TLAC<br>requirements Total Pillar 1 Capital<br>buffer (1) Tier 1 Capital<br><br><br>buffer (2) Domestic stability<br>buffer^^(3) Minimum capital,<br>leverage and TLAC<br>requirements including<br>capital buffers BMO capital, leverage<br>and TLAC ratios as at<br>April 30, 2025
Common Equity Tier 1 Ratio 4.5% 3.5% na 3.5% 11.5% 13.5%
Tier 1 Capital Ratio 6.0% 3.5% na 3.5% 13.0% 15.3%
Total Capital Ratio 8.0% 3.5% na 3.5% 15.0% 17.9%
TLAC Ratio 21.5% na na 3.5% 25.0% 29.9%
Leverage Ratio 3.0% na 0.5% na 3.5% 4.4%
TLAC Leverage Ratio 6.75% na 0.5% na 7.25% 8.5%
(1) The minimum CET1 Ratio requirement of 4.5% is augmented by the 3.5% Total Pillar 1 Capital buffers, which can absorb<br>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<br>(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<br>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.<br>
--- ---
(2) D-SIBs are required to meet a 0.5% Tier 1 Capital buffer requirement for the<br>Leverage and TLAC Leverage Ratios.
--- ---
(3) OSFI requires all D-SIBs to hold a DSB against Pillar 2 risks associated with<br>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<br>timely manner. Banks may be required to hold additional buffers that are applicable to capital, leverage and TLAC ratios.
--- ---

na – not applicable

Regulatory Capital and TLAC Position

TABLE 12
(Canadian $ in millions, except as noted) Q2-2025 Q1-2025 Q2-2024
Gross common equity (1) **** 78,008 **** 79,772 71,225
Regulatory adjustments applied to common equity **** (20,603 ) (20,575 ) (16,499 )
Common Equity Tier 1 Capital (CET1) **** 57,405 **** 59,197 54,726
Additional Tier 1 Eligible Capital (2) **** 7,787 **** 7,787 7,464
Regulatory adjustments applied to Tier 1 Capital **** (85 ) (135 ) (97 )
Additional Tier 1 Capital (AT1) **** 7,702 **** 7,652 7,367
Tier 1 Capital (T1 = CET1 + AT1) **** 65,107 **** 66,849 62,093
Tier 2 Eligible Capital (3) **** 10,880 **** 9,494 8,910
Regulatory adjustments applied to Tier 2 Capital **** (6 ) (3 ) (74 )
Tier 2 Capital (T2) **** 10,874 **** 9,491 8,836
Total Capital (TC = T1 + T2) **** 75,981 **** 76,340 70,929
Other TLAC instruments (4) **** 51,424 **** 53,148 46,101
Adjustments applied to Other TLAC **** (140 ) (113 ) (89 )
Other TLAC available after adjustments **** 51,284 **** 53,035 46,012
TLAC **** 127,265 **** 129,375 116,941
Risk-Weighted Assets (5) **** 425,066 **** 433,944 417,994
Leverage Ratio Exposures **** 1,490,551 **** 1,529,299 1,453,472
Capital, Leverage and TLAC Ratios (%)
CET1 Ratio **** 13.5 **** 13.6 13.1
Tier 1 Capital Ratio **** 15.3 **** 15.4 14.9
Total Capital Ratio **** 17.9 **** 17.6 17.0
TLAC Ratio **** 29.9 **** 29.8 28.0
Leverage Ratio **** 4.4 **** 4.4 4.3
TLAC Leverage Ratio **** 8.5 **** 8.5 8.0
(1) Gross Common Equity includes issued qualifying common shares, retained earnings, accumulated other comprehensive income<br>and eligible common share capital issued by subsidiaries.
--- ---
(2) Additional Tier 1 Eligible Capital includes directly and indirectly issued qualifying Additional Tier 1 instruments.<br>
--- ---
(3) Tier 2 Eligible Capital includes subordinated debentures and may include portion of expected credit loss provisions.<br>
--- ---
(4) Other TLAC includes senior unsecured debt subject to the Canadian Bail-In Regime.<br>
--- ---
(5) Institutions using one of the internal model-based approaches for credit risk, counterparty credit risk, or market risk<br>are subject to a capital floor requirement that is applied to RWA, as prescribed in OSFI’s CAR Guideline.
--- ---
18 BMO Financial Group Second Quarter Report 2025
---

Outstanding Shares and Securities Convertible into Common Shares ^(1)^ ****

TABLE 13
As at April 30, 2025 Number of<br>shares Amount<br>  (in millions)
Common shares 722,070,767 $23,730
Class B Preferred shares (2)
Series 33 8,000,000 $200
Series 44 16,000,000 $400
Series 50 500,000 $500
Series 52 650,000 $650
Other Equity Instruments (2)
4.800% Additional Tier 1 Capital Notes (3) US$500
4.300% Limited Recourse Capital Notes, Series 1 (LRCNs) $1,250
5.625% Limited Recourse Capital Notes, Series 2 (LRCNs) $750
7.325% Limited Recourse Capital Notes, Series 3 (LRCNs) $1,000
7.700% Limited Recourse Capital Notes, Series 4 (LRCNs) US$1,000
7.300% Limited Recourse Capital Notes, Series 5 (LRCNs) US$750
Medium-Term Notes (3)
3.803% Subordinated Notes due 2032 US$1,250
Series J - Second Tranche $1,250
Series K - First Tranche $1,000
3.088% Subordinated Notes due 2037 US$1,250
Series L - First Tranche $750
Series M - First Tranche $1,150
Series M - Second Tranche $1,000
Series N - First Tranche $1,250
Stock options
Vested 3,080,854
Non-vested 3,504,552
(1) Details on the Medium-Term Notes are outlined in Note 16 of the audited consolidated financial statements of BMO’s<br>2024 Annual Report. Details on share capital and other equity instruments are outlined in Note 6 of the unaudited interim consolidated financial statements and Note 17 of the audited annual consolidated financial statements of<br>BMO’s 2024 Annual Report.
--- ---
(2) Convertible into common shares. For LRCNs, convertible into common shares by virtue of the recourse to the Preferred<br>Shares Series 48, Preferred Shares Series 49, Preferred Shares Series 51, Preferred Shares 53, and Preferred Shares 54 for Series 1, Series 2, Series 3, Series 4, and Series 5 LRCNs, respectively, issued concurrently with the LRCNs, which currently<br>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 non-viability contingent capital (NVCC) trigger event were to occur, our NVCC instruments would be converted into BMO common shares pursuant to automatic conversion formulas, with a conversion price based on the greater of: (i) a floor price of $5.00; and (ii) the current market price of our common shares at the time of the trigger event (calculated using a 10-day weighted average). Based on a floor price of $5.00, these NVCC capital instruments would be converted into approximately 4.6 billion BMO common shares, assuming no accrued interest and no declared and unpaid dividends.

Other Capital Developments

On May 6, 2025, we announced our intention to redeem all of our outstanding $1,250 million 2.077% Series J Medium-Term Notes Second Tranche (NVCC) at par, plus accrued and unpaid interest to, but excluding, the redemption date on June 17, 2025.

On March 5, 2025, we issued $1,250 million 4.077% Series N Medium-Term Notes First Tranche (NVCC) through our Canadian Medium-Term Note Program.

On January 17, 2025, we announced a normal course issuer bid (NCIB) to purchase up to 20 million of our common shares for cancellation commencing on January 22, 2025, and ending no later than January 21, 2026. The timing and amount of purchases under the NCIB are determined by management, based on factors such as market conditions and capital levels. We also established an automatic securities purchase plan related to the NCIB under which our broker may purchase our common shares pursuant to the NCIB within a defined set of criteria. During the three months ended April 30, 2025, we purchased for cancellation 7 million common shares under the NCIB, at an average price of $137.52 per share for a total amount of $981 million, including tax. During the six months ended April 30, 2025, we purchased for cancellation 8.2 million common shares under the NCIB, at an average price of $138.53 per share for a total amount of $1,157 million, including tax. In addition, we repurchased 2 million common shares in May 2025 at an average price of $136.15.

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

Dividends

On May 28, 2025, BMO announced that the Board of Directors had declared a quarterly dividend on common shares of $1.63 per share, a $0.04 increase from the prior quarter and a $0.08 increase from the prior year. The dividend is payable on August 26, 2025 to shareholders of record on July 30, 2025. Common shareholders may elect to have their cash dividends reinvested in common shares of BMO, in accordance with the Shareholder Dividend Reinvestment and Share Purchase Plan (DRIP).

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

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

Caution

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

BMO Financial Group Second Quarter Report 2025 19

Review of Operating Groups’ Performance

How BMO Reports Operating Group Results

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

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

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

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

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

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

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

TABLE 14
(Canadian $ in millions, except as noted) Q2-2025 Q1-2025 Q2-2024 YTD-2025 YTD-2024
Net interest income (teb) (2) **** 4,481 4,590 4,148 **** 9,071 8,347
Non-interest revenue **** 1,021 1,151 1,060 **** 2,172 2,093
Total revenue (teb) (2) **** 5,502 5,741 5,208 **** 11,243 10,440
Provision for credit losses on impaired loans **** 723 803 583 **** 1,526 1,004
Provision for credit losses on performing loans **** 219 153 96 **** 372 260
Total provision for credit losses **** 942 956 679 **** 1,898 1,264
Non-interest expense **** 2,795 2,828 2,657 **** 5,623 5,333
Income before income taxes **** 1,765 1,957 1,872 **** 3,722 3,843
Provision for income taxes (teb) (2) **** 437 483 457 **** 920 947
Reported net income **** 1,328 1,474 1,415 **** 2,802 2,896
Dividends on preferred shares and distributions on other equity instruments **** 25 27 24 **** 52 47
Net income attributable to<br>non-controlling interest in subsidiaries **** 5 - 4 **** 5 4
Net income available to common shareholders **** 1,298 1,447 1,387 **** 2,745 2,845
Acquisition and integration costs (3) **** - - 2 **** - 3
Amortization of acquisition-related intangible assets (4) **** 76 73 72 **** 149 150
Adjusted net income **** 1,404 1,547 1,489 **** 2,951 3,049
Adjusted net income available to common shareholders **** 1,374 1,520 1,461 **** 2,894 2,998
(1) Adjusted results are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.
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(2) Taxable equivalent basis (teb) amounts of $8 million in Q2-2025,<br>$9 million in Q1-2025, and $9 million in Q2-2024; and $17 million for YTD-2025 and $18 million for YTD-2024. These amounts were recorded in net interest income, revenue and in provision for income taxes.
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(3) Acquisition and integration costs related to the acquisition of AIR MILES, recorded in<br>non-interest expense.
--- ---
(4) Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.<br>
--- ---

The Personal and Commercial Banking (P&C) operating group represents the sum of our two retail and commercial operating segments, Canadian Personal and Commercial Banking (Canadian P&C) and U.S. Personal and Commercial Banking (U.S. P&C). The P&C banking business reported net income was $1,328 million, a decrease of $87 million or 6% from the prior year, and a decrease of $146 million or 10% from the prior quarter. These operating segments are reviewed separately in the sections that follow.

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

20 BMO Financial Group Second Quarter Report 2025

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

TABLE 15
(Canadian $ in millions, except as noted) Q2-2025 Q1-2025 Q2-2024 YTD-2025 YTD-2024
Net interest income **** 2,359 **** 2,385 2,154 **** 4,744 4,295
Non-interest revenue **** 615 **** 680 665 **** 1,295 1,302
Total revenue **** 2,974 **** 3,065 2,819 **** 6,039 5,597
Provision for credit losses on impaired loans **** 476 **** 491 295 **** 967 533
Provision for credit losses on performing loans **** 132 **** 51 103 **** 183 160
Total provision for credit losses (PCL) **** 608 **** 542 398 **** 1,150 693
Non-interest expense **** 1,289 **** 1,290 1,216 **** 2,579 2,426
Income before income taxes **** 1,077 **** 1,233 1,205 **** 2,310 2,478
Provision for income taxes **** 295 **** 339 333 **** 634 685
Reported net income **** 782 **** 894 872 **** 1,676 1,793
Dividends on preferred shares and distributions on other equity<br>instruments **** 11 **** 12 11 **** 23 21
Net income available to common shareholders **** 771 **** 882 861 **** 1,653 1,772
Acquisition and integration costs (2) **** - **** - 2 **** - 3
Amortization of acquisition-related intangible assets (3) **** 4 **** 3 3 **** 7 6
Adjusted net income **** 786 **** 897 877 **** 1,683 1,802
Adjusted net income available to common shareholders **** 775 **** 885 866 **** 1,660 1,781
Adjusted non-interest<br>expense **** 1,284 **** 1,286 1,208 **** 2,570 2,413
Key Performance Metrics and Drivers
Personal and Business Banking revenue **** 2,141 **** 2,206 2,016 **** 4,347 4,033
Commercial Banking revenue **** 833 **** 859 803 **** 1,692 1,564
Return on equity (%) (4) (5) **** 18.9 **** 21.2 22.3 **** 20.0 22.6
Adjusted return on equity (%) (4) (5) **** 19.0 **** 21.3 22.4 **** 20.1 22.7
Operating leverage (%) **** (0.5 ) 3.7 4.1 **** 1.6 1.5
Adjusted operating leverage (%) **** (0.8 ) 3.6 4.5 **** 1.4 2.0
Efficiency ratio (%) **** 43.3 **** 42.1 43.2 **** 42.7 43.4
Adjusted efficiency ratio (%) **** 43.2 **** 42.0 42.9 **** 42.6 43.1
PCL on impaired loans to average net loans and acceptances (%) (5) **** 0.58 **** 0.58 0.38 **** 0.58 0.34
Net interest margin on average earning assets (%) **** 2.83 **** 2.79 2.80 **** 2.81 2.79
Average earning assets **** 341,885 **** 339,325 312,320 **** 340,584 309,883
Average gross loans and acceptances **** 340,175 **** 337,611 319,896 **** 338,871 318,602
Average deposits **** 310,646 **** 313,950 297,304 **** 312,326 293,024
(1) Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.
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(2) Acquisition and integration costs related to the acquisition of AIR MILES, recorded in<br>non-interest expense.
--- ---
(3) Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.<br>
--- ---
(4) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section.
--- ---
(5) Return on equity and PCL ratios are presented on an annualized basis.
--- ---

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

Q2 2025 vs. Q2 2024

Canadian P&C reported net income was $782 million, a decrease of $90 million or 10% from the prior year.

Total revenue was $2,974 million, an increase of $155 million or 6% from the prior year. Net interest income increased $205 million or 10%, primarily due to higher balances and net interest margin. Non-interest revenue decreased $50 million or 7%, primarily due to lower lending fee revenue, reflecting the impact of the transition of bankers’ acceptances exposures to loans, and lower card-related revenue, partially offset by higher deposit fee revenue. Net interest margin of 2.83% increased 3 basis points from the prior year, primarily due to higher deposit and loan margins, partially offset by loans growing faster than deposits.

Personal and Business Banking revenue increased $125 million or 6% and Commercial Banking revenue increased $30 million or 4%, both due to higher net interest income, partially offset by lower non-interest revenue.

Total provision for credit losses was $608 million, an increase of $210 million from the prior year. The provision for credit losses on impaired loans was $476 million, an increase of $181 million, due to higher provisions in Commercial Banking and Personal and Business Banking, driven by unsecured segments of the consumer portfolio. There was a $132 million provision for credit losses on performing loans in the current quarter, compared with a $103 million provision in the prior year.

Non-interest expense was $1,289 million, an increase of $73 million or 6% from the prior year, primarily driven by higher technology costs and employee-related expenses.

Average gross loans and acceptances increased $20.3 billion or 6% from the prior year to $340.2 billion. Personal and Business Banking loan balances increased 5%, primarily reflecting growth in residential mortgages, Commercial Banking loan balances increased 8% and credit card balances increased 6%. Average deposits increased $13.3 billion or 4% to $310.6 billion. Personal and Business Banking and Commercial Banking deposits both increased 4%.

BMO Financial Group Second Quarter Report 2025 21

Q2 2025 vs. Q1 2025

Reported net income decreased $112 million or 12% from the prior quarter.

Total revenue decreased $91 million or 3% from the prior quarter. Net interest income decreased $26 million or 1%, due to the impact of three fewer days in the current quarter, partially offset by higher net interest margin. Non-interest revenue decreased $65 million or 9%, primarily due to lower card-related revenue and lower gains on investments in our commercial business. Net interest margin increased 4 basis points from the prior quarter, primarily due to higher loan and deposit margins, partially offset by loans growing faster than deposits.

Personal and Business Banking revenue decreased $65 million or 3% and Commercial Banking revenue decreased $26 million or 3%, both due to lower net interest income and non-interest revenue.

Total provision for credit losses increased $66 million from the prior quarter. The provision for credit losses on impaired loans decreased $15 million, reflecting lower provisions in both Commercial Banking and Personal and Business Banking. There was a $132 million provision for credit losses on performing loans in the current quarter, compared with a $51 million provision in the prior quarter.

Non-interest expense was relatively unchanged from prior quarter, with lower operating costs partially offset by higher technology costs.

Average gross loans and acceptances increased $2.6 billion or 1% from the prior quarter. Personal and Business Banking loan balances were relatively unchanged from the prior quarter, Commercial Banking loan balances increased 2% and credit card balances decreased 2%. Average deposits decreased $3.3 billion or 1% from the prior quarter, with lower term deposits partially offset by higher operating deposits. Personal and Business Banking deposits were relatively unchanged and Commercial Banking decreased $2.7 billion or 3%.

Q2 YTD 2025 vs. Q2 YTD 2024

Canadian P&C reported net income was $1,676 million, a decrease of $117 million or 6% from the prior year.

Total revenue was $6,039 million, an increase of $442 million or 8% from the prior year. Net interest income increased $449 million or 10%, due to higher balances and net interest margin. Non-interest revenue decreased $7 million or 1%, primarily due to lower lending fee revenue reflecting the impact of the transition of bankers’ acceptances exposures to loans, partially offset by higher deposit fee revenue and gains on investments in our commercial business. Net interest margin of 2.81% increased 2 basis points from the prior year, due to higher loan and deposit margins, partially offset by loans growing faster than deposits.

Personal and Business Banking revenue increased $314 million or 8%, due to higher net interest income and non-interest revenue. Commercial Banking revenue increased $128 million or 8%, due to higher net interest income, partially offset by lower non-interest revenue.

Total provision for credit losses was $1,150 million, an increase of $457 million from the prior year. The provision for credit losses on impaired loans was $967 million, an increase of $434 million, reflecting higher provisions in both Commercial Banking and Personal and Business Banking, driven by unsecured segments of the consumer portfolio. There was a $183 million provision for credit losses on performing loans in the current year, compared with a $160 million provision in the prior year.

Non-interest expense was $2,579 million, an increase of $153 million or 6% from the prior year, driven by higher employee-related expenses, and higher technology and operating costs.

Average gross loans and acceptances increased $20.3 billion or 6% from the prior year. Personal and Business Banking loan balances increased 6%, Commercial Banking loan balances increased 8% and credit card balances increased 8%. Average deposits increased $19.3 billion or 7% from the prior year, Personal and Business Banking deposits increased 6% and Commercial Banking deposits increased 9%.

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

22 BMO Financial Group Second Quarter Report 2025

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

TABLE 16
(Canadian in millions, except as noted) Q1-2025 Q2-2024 YTD-2025 YTD-2024
Net interest income (teb) (2) 2,122 2,205 1,994 **** 4,327 4,052
Non-interest revenue 406 471 395 **** 877 791
Total revenue (teb) (2) 2,528 2,676 2,389 **** 5,204 4,843
Provision for credit losses on impaired loans 247 312 288 **** 559 471
Provision for (recovery of) credit losses on performing<br>loans 87 102 (7 ) **** 189 100
Total provision for credit losses (PCL) 334 414 281 **** 748 571
Non-interest expense 1,506 1,538 1,441 **** 3,044 2,907
Income before income taxes 688 724 667 **** 1,412 1,365
Provision for income taxes (teb) (2) 142 144 124 **** 286 262
Reported net income 546 580 543 **** 1,126 1,103
Dividends on preferred shares and distributions on other equity instruments 14 15 13 **** 29 26
Net income attributable to<br>non-controlling interest in subsidiaries 5 - 4 **** 5 4
Net income available to common shareholders 527 565 526 **** 1,092 1,073
Amortization of acquisition-related intangible assets (3) 72 70 69 **** 142 144
Adjusted net income 618 650 612 **** 1,268 1,247
Adjusted net income available to common shareholders 599 635 595 **** 1,234 1,217
Adjusted non-interest<br>expense 1,409 1,444 1,348 **** 2,853 2,714
Average earning assets 223,071 227,215 215,614 **** 225,177 213,955
Average gross loans and acceptances 212,146 215,827 203,029 **** 214,017 203,340
Average deposits 231,173 240,658 221,216 **** 235,994 218,155
(US equivalent in millions)
Net interest income (teb) (2) 1,495 1,541 1,463 **** 3,036 3,000
Non-interest revenue 286 330 290 **** 616 586
Total revenue (teb) (2) 1,781 1,871 1,753 **** 3,652 3,586
Provision for credit losses on impaired loans 175 217 211 **** 392 348
Provision for (recovery of) credit losses on performing<br>loans 63 70 (5 ) **** 133 75
Total provision for credit losses 238 287 206 **** 525 423
Non-interest expense 1,060 1,075 1,058 **** 2,135 2,152
Income before income taxes 483 509 489 **** 992 1,011
Provision for income taxes (teb) (2) 100 102 91 **** 202 194
Reported net income 383 407 398 **** 790 817
Dividends on preferred shares and distributions on other equity instruments 10 11 9 **** 21 19
Net income attributable to<br>non-controlling interest in subsidiaries 3 - 3 **** 3 3
Net income available to common shareholders 370 396 386 **** 766 795
Amortization of acquisition-related intangible assets (3) 50 49 51 **** 99 107
Adjusted net income 433 456 449 **** 889 924
Adjusted net income available to common shareholders 420 445 437 **** 865 902
Adjusted non-interest<br>expense 992 1,009 990 **** 2,001 2,009
Key Performance Metrics (US basis)
Personal and Business Banking revenue 686 715 683 **** 1,401 1,408
Commercial Banking revenue 1,095 1,156 1,070 **** 2,251 2,178
Return on equity (%) (4) (5) 6.1 6.2 6.5 **** 6.2 6.5
Adjusted return on equity (%) (4) (5) 6.9 7.0 7.3 **** 7.0 7.4
Operating leverage (%) 1.4 3.8 (0.6 ) **** 2.6 (11.1 )
Adjusted operating leverage (%) 1.3 3.1 (1.0 ) **** 2.2 (8.4 )
Efficiency ratio (%) 59.5 57.5 60.3 **** 58.5 60.0
Adjusted efficiency ratio (%) 55.7 54.0 56.4 **** 54.8 56.0
Net interest margin on average earning assets (%) 3.90 3.85 3.76 **** 3.88 3.81
PCL on impaired loans to average net loans and acceptances (%) (5) 0.49 0.58 0.57 **** 0.53 0.47
Average earning assets 157,057 158,863 158,241 **** 157,975 158,398
Average gross loans and acceptances 149,364 150,898 149,005 **** 150,144 150,545
Average deposits 162,757 168,263 162,359 **** 165,556 161,507

All values are in US Dollars.

(1) Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.
(2) Taxable equivalent basis (teb) amounts of $8 million in Q2-2025, and<br>$9 million in both Q1-2025 and Q2-2024; and $17 million for YTD-2025 and $18 million for YTD-2024. These amounts were recorded in net interest income revenue and provision for income taxes, and were reflected in the ratios. On a source currency basis: US$6 million in each of Q2-2025, Q1-2025, and Q2-2024; and US$12 million for YTD-2025 and US$13 million for YTD-2024.
--- ---
(3) Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense. On a source<br>currency basis: US$68 million in Q2-2025, US$66 million in Q1-2025, and US $68 million in Q2-2024; and<br>US$134 million for YTD-2025 and US$143 million for YTD-2024.
--- ---
(4) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section.
--- ---
(5) Return on equity and PCL ratios are presented on an annualized basis.
--- ---

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

Q2 2025 vs. Q2 2024

U.S. P&C reported net income was $546 million, an increase of $3 million from the prior year. The impact of the stronger U.S. dollar increased revenue, expenses and net income by 4%, respectively. All amounts in the remainder of this section are presented on a U.S. dollar basis.

Reported net income was $383 million, a decrease of $15 million or 4% from the prior year.

Total revenue was $1,781 million, an increase of $28 million or 2% from the prior year. Net interest income increased $32 million or 2%, due to higher margins. Non-interest revenue decreased $4 million or 1% from the prior year, primarily due to the impact of a loss of $35 million on the strategic sale of a non-relationship credit card portfolio in the current quarter, partially offset by higher deposit fee revenue. Net interest margin of 3.90% increased 14 basis points, primarily due to higher deposit and loan margins.

BMO Financial Group Second Quarter Report 2025 23

Personal and Business Banking revenue increased $3 million, as higher net interest income was partially offset by lower non-interest revenue. Commercial Banking revenue increased $25 million or 2%, due to higher net interest income and non-interest revenue.

Total provision for credit losses was $238 million, an increase of $32 million from the prior year. The provision for credit losses on impaired loans was $175 million, a decrease of $36 million, with lower provisions in Commercial Banking, partially offset by higher provisions in Personal and Business Banking. There was a $63 million provision for credit losses on performing loans in the current quarter, compared with a recovery of $5 million in the prior year.

Non-interest expense was $1,060 million, relatively unchanged from the prior year, with higher employee-related expenses offset by lower operating costs.

Average gross loans and acceptances were relatively unchanged from the prior year at $149.4 billion. Personal and Business Banking loan balances increased 10% and Commercial Banking loan balances decreased 2%. Average total deposits were relatively unchanged at $162.8 billion. Personal and Business Banking deposits increased 1% and Commercial Banking deposits were relatively unchanged.

Q2 2025 vs. Q1 2025

Reported net income decreased $34 million or 6% from the prior quarter. The impact of the weaker U.S. dollar decreased revenue, expenses and net income by 1%, respectively. All amounts in the remainder of this section are presented on a U.S. dollar basis.

Reported net income decreased $24 million or 6% from the prior quarter.

Total revenue decreased $90 million or 5% from the prior quarter. Net interest income decreased $46 million or 3%, due to the impact of three fewer days in the current quarter and lower balances, partially offset by higher margins. Non-interest revenue decreased $44 million or 13%, primarily due to the loss on sale noted above and lower lending fee revenue, partially offset by higher deposit fee revenue. Net interest margin of 3.90% increased 5 basis points from the prior quarter, driven by higher deposit and loan margins, partially offset by deposits declining faster than loans, reflecting the impact of deposit optimization activities.

Personal and Business Banking revenue decreased $29 million or 4%, due to lower non-interest revenue, partially offset by higher net interest income. Commercial Banking revenue decreased $61 million or 5%, primarily due to lower net interest income and non-interest revenue.

Total provision for credit losses decreased $49 million from the prior quarter. The provision for credit losses on impaired loans decreased $42 million, due to lower provisions in both Commercial Banking and Personal and Business Banking. There was a $63 million provision for credit losses on performing loans in the current quarter, compared with a $70 million provision in the prior quarter.

Non-interest expense decreased $15 million or 1% from the prior quarter, primarily due to lower technology costs, partially offset by higher advertising costs.

Average gross loans and acceptances decreased $1.5 billion or 1% from the prior quarter. Commercial Banking loan balances decreased 1%, and Personal and Business Banking loan balances were relatively unchanged from the prior quarter. Average total deposits decreased $5.5 billion or 3% from the prior quarter. Commercial Banking deposits decreased 5% and Personal and Business Banking deposits decreased 1%.

Q2 YTD 2025 vs. Q2 YTD 2024

Reported net income was $1,126 million, an increase of $23 million or 2% from the prior year. The impact of the stronger U.S. dollar increased revenue by 6%, and increased expenses and net income by 5%, respectively. All amounts in the remainder of this section are on a U.S. dollar basis.

Reported net income was $790 million, a decrease of $27 million or 3% from the prior year.

Total revenue was $3,652 million, an increase of $66 million or 2% from the prior year. Net interest income increased $36 million or 1%, primarily due to higher deposit balances. Non-interest revenue increased $30 million or 5%, due to higher deposit and lending fee revenue, partially offset by the loss on sale noted above. Net interest margin of 3.88% increased 7 basis points, primarily due to deposits growing faster than loans and improved loan margin, partially offset by lower deposit margins.

Personal and Business Banking revenue decreased $7 million, due to lower non-interest revenue, partially offset by higher net interest income. Commercial Banking revenue increased $73 million or 3%, due to higher net interest income and non-interest revenue.

Total provision for credit losses was $525 million, an increase of $102 million from the prior year. The provision for credit losses on impaired loans was $392 million, an increase of $44 million, primarily due to higher Commercial Banking provisions. There was a $133 million provision for credit losses on performing loans in the current year, compared with a $75 million provision in the prior year.

Non-interest expense was $2,135 million, a decrease of $17 million from the prior year, reflecting lower operating costs, partially offset by higher employee-related expenses.

Average gross loans and acceptances were relatively unchanged from the prior year at $150.1 billion. Commercial loan balances decreased 2% and Personal and Business Banking balances increased 5%. Average total deposits increased $4.0 billion or 3% to $165.6 billion. Commercial Banking deposits increased 2% and Personal and Business Banking deposits increased 3%.

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

24 BMO Financial Group Second Quarter Report 2025

BMO Wealth Management ^(1)^ ****

TABLE 17
(Canadian in millions, except as noted) Q1-2025 Q2-2024 YTD-2025 YTD-2024
Net interest income 369 355 322 **** 724 647
Non-interest revenue 1,159 1,231 1,071 **** 2,390 2,074
Total revenue 1,528 1,586 1,393 **** 3,114 2,721
Provision for credit losses on impaired loans 2 1 6 **** 3 9
Provision for (recovery of) credit losses on performing<br>loans 6 (1 ) (13 ) **** 5 (3 )
Total provision for (recovery of) credit losses (PCL) 8 - (7 ) **** 8 6
Non-interest expense 1,041 1,095 978 **** 2,136 1,975
Income before income taxes 479 491 422 **** 970 740
Provision for income taxes 118 122 102 **** 240 180
Reported net income 361 369 320 **** 730 560
Dividends on preferred shares and distributions on other equity<br>instruments 3 2 2 **** 5 4
Net income available to common shareholders 358 367 318 **** 725 556
Amortization of acquisition-related intangible assets (2) 2 2 2 **** 4 3
Adjusted net income 363 371 322 **** 734 563
Adjusted net income available to common shareholders 360 369 320 **** 729 559
Adjusted non-interest<br>expense 1,039 1,092 975 **** 2,131 1,971
Key Performance Metrics
Wealth and Asset Management reported net income 302 286 252 **** 588 439
Wealth and Asset Management adjusted net income 304 288 254 **** 592 442
Insurance reported net income (loss) 59 83 68 **** 142 121
Return on equity (%) (3) (4) 28.9 29.0 27.2 **** 29.0 23.7
Adjusted return on equity (%) (3) (4) 29.1 29.2 27.4 **** 29.1 23.9
Reported efficiency ratio (%) 68.1 69.0 70.3 **** 68.6 72.6
Adjusted efficiency ratio (%) 67.9 68.9 70.1 **** 68.4 72.5
Operating leverage (%) 3.5 9.5 7.0 **** 6.4 8.3
Adjusted operating leverage (%) 3.5 9.6 7.1 **** 6.4 8.4
PCL on impaired loans to average net loans and acceptances (%) (4) 0.01 0.01 0.06 **** 0.01 0.04
Average assets 71,033 70,005 63,673 **** 70,511 63,093
Average gross loans and acceptances 46,592 45,953 42,310 **** 46,267 42,063
Average deposits 68,956 67,019 60,564 **** 67,971 60,321
Assets under administration (5) 389,320 406,313 341,422 **** 389,320 341,422
Assets under management 437,911 450,617 385,936 **** 437,911 385,936
U.S. Business Select Financial Data (US in millions)
Total revenue 202 201 184 **** 403 379
Non-interest expense 146 150 141 **** 296 292
Reported net income 38 39 36 **** 77 65
Adjusted non-interest expense 144 148 139 **** 292 289
Adjusted net income 40 40 37 **** 80 67
Average gross loans and acceptances 11,804 11,360 10,435 **** 11,578 10,353
Average deposits 11,754 11,942 11,346 **** 11,849 11,452

All values are in US Dollars.

(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.<br>
--- ---
(3) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section.
--- ---
(4) Return on equity and PCL ratios are presented on an annualized basis.
--- ---
(5) Certain assets under management that are also administered by the bank are included in assets under administration.<br>
--- ---

Q2 2025 vs. Q2 2024

BMO Wealth Management reported net income was $361 million, an increase of $41 million or 13% from the prior year. Wealth and Asset Management reported net income was $302 million, an increase of $50 million or 20%, and Insurance net income was $59 million, a decrease of $9 million or 13%.

Total revenue was $1,528 million, an increase of $135 million or 10% from the prior year. Revenue in Wealth and Asset Management was $1,433 million, an increase of $142 million or 11%, primarily due to the impact of stronger global markets and net sales, strong growth in loan and deposit balances and the impact of the stronger U.S. dollar. Insurance revenue was $95 million, a decrease of $7 million or 6%, primarily due to unfavourable market movements in the current quarter.

Total provision for credit losses was $8 million, compared with a recovery of $7 million in the prior year.

Non-interest expense was $1,041 million, an increase of $63 million or 6%, primarily due to higher employee-related expenses, including higher revenue-based costs and investment in talent, and the impact of the stronger U.S. dollar.

Assets under management increased $52.0 billion or 13% from the prior year to $437.9 billion and assets under administration increased $47.9 billion or 14% to $389.3 billion, driven by stronger global markets and higher net client assets. Average gross loans increased 10% and average deposits increased 14%.

Q2 2025 vs. Q1 2025

Reported net income decreased $8 million or 2% from the prior quarter. Wealth and Asset Management reported net income increased $16 million or 6% from the prior quarter, and Insurance net income decreased $24 million or 30%.

Total revenue decreased $58 million or 4% from the prior quarter. Wealth and Asset Management revenue decreased $19 million or 1%, primarily due to the impact of three fewer days in the current quarter and the impact of weaker global markets, partially offset by the impact of net sales and balance growth.

BMO Financial Group Second Quarter Report 2025 25

Insurance revenue decreased $39 million or 28%, primarily due to unfavourable market movements in the current quarter relative to the prior quarter.

Total provision for credit losses increased $8 million from the prior quarter.

Non-interest expense decreased $54 million or 5%, primarily due to the impact of stock-based compensation for employees eligible to retire that is expensed in the first quarter of each year.

Assets under management decreased $12.7 billion or 3% from the prior quarter and assets under administration decreased $17.0 billion or 4%, driven by weaker global markets and the impact of foreign exchange movements, partially offset by higher net client assets. Average gross loans increased 1% and average deposits increased 3%.

Q2 YTD 2025 vs. Q2 YTD 2024

Reported net income was $730 million, an increase of $170 million or 30% from the prior year. Wealth and Asset Management reported net income was $588 million, an increase of $149 million or 34%, and Insurance net income was $142 million, an increase of $21 million or 18% from the prior year.

Total revenue was $3,114 million, an increase of $393 million or 14%. Revenue in Wealth and Asset Management was $2,885 million, an increase of $347 million or 14%, primarily due to the impact of stronger global markets and net sales, strong growth in loan and deposit balances, higher transaction revenue, as well as the impact of the stronger U.S. dollar. Insurance revenue was $229 million, an increase of $46 million or 25%, primarily due to favourable market movements in the current year.

Total provision for credit losses was $8 million, an increase of $2 million from the prior year.

Non-interest expense was $2,136 million, an increase of $161 million or 8%, primarily due to higher employee-related expenses, including higher revenue-based costs, investment in talent and the impact of the stronger U.S. dollar.

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

BMO Capital Markets ^(1)^ ****

TABLE 18
(Canadian in millions, except as noted) Q1-2025 Q2-2024 YTD-2025 YTD-2024
Net interest income (teb) (2) 474 **** 699 358 **** 1,173 863
Non-interest revenue 1,305 **** 1,374 1,303 **** 2,679 2,387
Total revenue (teb) (2) 1,779 **** 2,073 1,661 **** 3,852 3,250
Provision for credit losses on impaired loans 28 **** 35 61 **** 63 72
Provision for (recovery of) credit losses on performing<br>loans 73 **** 11 (9 ) **** 84 (42 )
Total provision for credit losses (PCL) 101 **** 46 52 **** 147 30
Non-interest expense 1,100 **** 1,255 1,028 **** 2,355 2,144
Income before income taxes 578 **** 772 581 **** 1,350 1,076
Provision for income taxes (teb) (2) 147 **** 185 122 **** 332 224
Reported net income 431 **** 587 459 **** 1,018 852
Dividends on preferred shares and distributions on other equity<br>instruments 10 **** 10 9 **** 20 18
Net income available to common shareholders 421 **** 577 450 **** 998 834
Acquisition and integration costs (3) - **** - 2 **** - 12
Amortization of acquisition-related intangible assets (4) 3 **** 4 5 **** 7 10
Adjusted net income 434 **** 591 466 **** 1,025 874
Adjusted net income available to common shareholders 424 **** 581 457 **** 1,005 856
Adjusted non-interest<br>expense 1,095 **** 1,250 1,019 **** 2,345 2,114
Key Performance Metrics
Global Markets revenue 1,150 **** 1,361 1,008 **** 2,511 1,960
Investment and Corporate Banking revenue 629 **** 712 653 **** 1,341 1,290
Return on equity (%) (5) (6) 12.4 **** 16.9 14.1 **** 14.6 12.8
Adjusted return on equity (%) (5) (6) 12.5 **** 17.0 14.3 **** 14.8 13.1
Operating leverage (teb) (%) - **** 18.0 8.2 **** 8.6 (0.5 )
Adjusted operating leverage (teb) (%) (0.5 ) 16.4 8.1 **** 7.6 -
Efficiency ratio (teb) (%) 61.9 **** 60.5 61.9 **** 61.2 66.0
Adjusted efficiency ratio (teb) (%) 61.6 **** 60.3 61.3 **** 60.9 65.0
PCL on impaired loans to average net loans and acceptances (%) (6) 0.13 **** 0.16 0.29 **** 0.15 0.18
Average assets 564,034 **** 578,930 455,916 **** 571,605 446,962
Average gross loans and acceptances 82,193 **** 86,575 82,878 **** 84,419 82,558
U.S. Business Select Financial Data (US in millions)
Total revenue (teb) 600 **** 778 577 **** 1,378 1,167
Non-interest expense 382 **** 441 378 **** 823 807
Reported net income 118 **** 241 121 **** 359 252
Adjusted non-interest expense 379 **** 439 374 **** 818 793
Adjusted net income 120 **** 243 124 **** 363 262
Average assets 200,885 **** 201,230 149,206 **** 201,060 145,430
Average gross loans and acceptances 30,898 **** 31,763 31,760 **** 31,338 31,637

All values are in US Dollars.

(1) Adjusted results and ratios are on a non-GAAP basis and are discussed in the Non-GAAP and Other Financial Measures section.
(2) Beginning January 1, 2024, we treated certain Canadian dividends as<br>non-deductible for tax purposes, due to legislation that was enacted in the third quarter of fiscal 2024. As a result, we no longer report this revenue on a taxable equivalent basis (teb): $2 million in Q2-2025; $nil in Q1-2025, $2 million in Q2-2024; and $2 million for YTD-2025 and<br>$21 million for YTD-2024. These amounts were recorded in net interest income and provision for income taxes, and reflected in the ratios. For further information, refer to the Other Regulatory<br>Developments section of BMO’s 2024 Annual MD&A.
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(3) Clearpool and Radicle pre-tax acquisition and integration costs, recorded in non-interest expense.
--- ---
(4) Amortization of acquisition-related intangible assets and any impairments, recorded in non-interest expense.<br>
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26 BMO Financial Group Second Quarter Report 2025
---
(5) Return on equity is based on allocated capital. Effective the first quarter of fiscal 2025, the capital allocation rate<br>increased to 12.0% of risk weighted assets, compared with 11.5% in fiscal 2024. For further information, refer to the Non-GAAP and Other Financial Measures section.
--- ---
(6) Return on equity and PCL ratios are presented on an annualized basis.
--- ---

Q2 2025 vs. Q2 2024

BMO Capital Markets reported net income was $431 million, a decrease of $28 million or 6% from the prior year.

Total revenue was $1,779 million, an increase of $118 million or 7% from the prior year. Global Markets revenue increased $142 million or 14%, reflecting strong performance in trading revenue, primarily in commodities, and the impact of the stronger U.S. dollar. Investment and Corporate Banking revenue decreased $24 million or 4% from the prior year, primarily due to higher markdowns on fair value loans and lower net gains on investments, partially offset by higher advisory fee revenue, corporate banking revenue and the impact of the stronger U.S. dollar.

Total provision for credit losses was $101 million, an increase of $49 million from the prior year. The provision for credit losses on impaired loans was $28 million, a decrease of $33 million. There was a provision of $73 million for credit losses on performing loans, compared with a recovery of $9 million in the prior year.

Non-interest expense was $1,100 million, an increase of $72 million or 7% from the prior year, driven by higher employee-related expenses and the impact of the stronger U.S. dollar.

Average gross loans and acceptances of $82.2 billion, decreased $0.7 billion or 1% from the prior year.

Q2 2025 vs. Q1 2025

Reported net income decreased $156 million or 27% from the prior quarter.

Total revenue decreased $294 million or 14% from the prior quarter. Global Markets revenue decreased $211 million or 16%, primarily due to lower equities and interest rate trading revenue. Investment and Corporate Banking revenue decreased $83 million or 12%, primarily due to higher markdowns on fair value loans, lower net gains on investments and lower corporate banking revenue, partially offset by higher advisory fee revenue.

Total provision for credit losses was $101 million, an increase of $55 million from the prior quarter. The provision for credit losses on impaired loans was $28 million, a decrease of $7 million. There was a provision of $73 million for credit losses on performing loans, compared with a $11 million provision in the prior quarter.

Non-interest expense decreased $155 million or 12% from the prior quarter, driven by lower performance-based compensation 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 decreased $4.4 billion or 5% from the prior quarter.

Q2 YTD 2025 vs. Q2 YTD 2024

Reported net income was $1,018 million, an increase of $166 million or 20% from the prior year.

Total revenue was $3,852 million, an increase of $602 million or 19% from the prior year. Global Markets revenue increased $551 million or 28%, reflecting strong trading performance across all products and the impact of the stronger U.S. dollar. Investment and Corporate Banking revenue increased $51 million or 4% from the prior year, reflecting higher advisory fee revenue, corporate banking revenue and the impact of the stronger U.S. dollar, partially offset by higher markdowns on fair value loans and lower net gains on investments.

Total provision for credit losses was $147 million, an increase of $117 million from the prior year. The provision for credit losses on impaired loans was $63 million, a decrease of $9 million. There was a provision of $84 million for credit losses on performing loans, compared with a recovery of $42 million in the prior year.

Non-interest expense was $2,355 million, an increase of $211 million or 10% from the prior year, driven by higher performance-based compensation and technology costs, and the impact of the stronger U.S. dollar.

Average gross loans and acceptances of $84.4 billion increased $1.9 billion or 2% from the prior year.

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

BMO Financial Group Second Quarter Report 2025 27

Corporate Services ^(1)^ ****

TABLE 19
(Canadian in millions, except as noted) Q1-2025 Q2-2024 YTD-2025 YTD-2024
Net interest income before group teb offset (217 ) (237 ) (302 ) **** (454 ) (582 )
Group teb offset (10 ) (9 ) (11 ) **** (19 ) (39 )
Net interest income (teb) (227 ) (246 ) (313 ) **** (473 ) (621 )
Non-interest revenue 97 **** 112 25 **** 209 **** (144 )
Total revenue (teb) (130 ) (134 ) (288 ) **** (264 ) (765 )
Provision for credit losses on impaired loans 12 **** 20 8 **** 32 **** 46
Provision for (recovery of) credit losses on performing<br>loans (9 ) (11 ) (27 ) **** (20 ) (14 )
Total provision for (recovery of) credit losses 3 **** 9 (19 ) **** 12 **** 32
Non-interest expense 83 **** 249 181 **** 332 **** 781
Income (loss) before income taxes (216 ) (392 ) (450 ) **** (608 ) (1,578 )
Provision for (recovery of) income taxes (teb) (58 ) (100 ) (122 ) **** (158 ) (428 )
Reported net income (loss) (158 ) (292 ) (328 ) **** (450 ) (1,150 )
Dividends on preferred shares and distributions on other equity instruments 104 **** 26 108 **** 130 **** 114
Net income (loss) attributable to<br>non-controlling interest in subsidiaries (3 ) 4 - **** 1 **** 2
Net loss available to common shareholders (259 ) (322 ) (436 ) **** (581 ) (1,266 )
Acquisition and integration costs/reversal (2) (1 ) 7 22 **** 6 **** 68
Legal provision/reversal (including related interest expense and legal fees) - **** - 12 **** - **** 23
Impact of loan portfolio sale - **** - - **** - **** 136
FDIC special assessment 4 **** (5 ) 50 **** (1 ) 363
Impact of alignment of accounting policies - **** 70 - **** 70 **** -
Adjusted net loss (155 ) (220 ) (244 ) **** (375 ) (560 )
Adjusted net loss available to common shareholders (256 ) (250 ) (352 ) **** (506 ) (676 )
Adjusted total revenue (teb) (3) (130 ) (134 ) (274 ) **** (264 ) (573 )
Adjusted non-interest<br>expense 80 **** 150 83 **** 230 **** 204
U.S. Business Select Financial Data (US in millions)
Total revenue 16 **** (19 ) 57 **** (3 ) (49 )
Total provision for (recovery of) credit losses (2 ) 4 (16 ) **** 2 **** 3
Non-interest expense 57 **** 57 70 **** 114 **** 475
Provision for (recovery of) income taxes (teb) (15 ) (32 ) (1 ) **** (47 ) (136 )
Reported net income (loss) (24 ) (48 ) 4 **** (72 ) (391 )
Adjusted total revenue 16 **** (19 ) 68 **** (3 ) 94
Adjusted non-interest<br>expense 55 **** 21 (1 ) **** 76 **** 50
Adjusted net income (loss) (22 ) (22 ) 66 **** (44 ) 46

All values are in US Dollars.

(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/reversal related to the acquisition of Bank of the West, recorded in non-interest expense.
--- ---
(3) Group taxable equivalent basis (teb) offset amounts recorded in revenue and provision for (recovery of) income taxes:<br>$10 million in Q2-2025; $9 million in Q1-2025 and $11 million in Q2-2024; and $19 million for YTD-2025 and $39 million for YTD-2024.
--- ---

Q2 2025 vs. Q2 2024

Corporate Services reported net loss was $158 million, compared with reported net loss of $328 million in the prior year, and adjusted net loss was $155 million, compared with adjusted net loss of $244 million in the prior year.

The lower reported net loss was primarily due to the impact of a higher FDIC special assessment and acquisition and integration costs in the prior year. The lower adjusted net loss, which excluded the above items, was driven by higher revenue, primarily due to the impact of treasury-related activities.

Q2 2025 vs. Q1 2025

Reported net loss was $158 million, compared with reported net loss of $292 million in the prior quarter, and adjusted net loss was $155 million, compared with adjusted net loss of $220 million in the prior quarter.

Reported net income in the prior quarter included the impact of alignment of accounting policies for employee vacation across legal entities. On an adjusted basis, the lower net loss was primarily driven by lower expenses, due to the seasonal impact of employee benefits that are expensed in the first quarter of each year.

Q2 YTD 2025 vs. Q2 YTD 2024

Reported net loss was $450 million, compared with reported net loss of $1,150 million in the prior year. The lower reported net loss primarily reflected the net accounting loss related to the sale of a portfolio of recreational vehicle loans in the prior year, partially offset by the impact of alignment of accounting policies for employee vacation across legal entities in the current year, lower acquisition and integration costs, and a lower impact of the FDIC special assessment.

Adjusted net loss was $375 million, compared with adjusted net loss of $560 million in the prior year. Adjusted net loss excluded the items noted above, with the decrease driven by higher revenue reflecting the impact of treasury-related activities, partially offset by higher expenses, including the impact of the consolidation of certain U.S. retirement benefit plans in the prior year.

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

28 BMO Financial Group Second Quarter Report 2025

Summary Quarterly Earnings Trends ^(1)^

TABLE 20
(Canadian in millions, except as noted) Q1-2025 Q4-2024 Q3-2024 Q2-2024 Q1-2024 Q4-2023 Q3-2023
Net interest income 5,097 **** 5,398 5,438 4,794 4,515 4,721 4,941 4,905
Non-interest revenue 3,582 **** 3,868 3,519 3,398 3,459 2,951 3,378 3,147
Revenue 8,679 **** 9,266 8,957 8,192 7,974 7,672 8,319 8,052
Provision for credit losses on impaired loans 765 **** 859 1,107 828 658 473 408 333
Provision for credit losses on performing loans 289 **** 152 416 78 47 154 38 159
Total provision for credit losses 1,054 **** 1,011 1,523 906 705 627 446 492
Non-interest expense 5,019 **** 5,427 4,427 4,839 4,844 5,389 5,679 5,572
Income before income taxes 2,606 **** 2,828 3,007 2,447 2,425 1,656 2,194 1,988
Provision for income taxes 644 **** 690 703 582 559 364 484 423
Reported net income (see below) 1,962 **** 2,138 2,304 1,865 1,866 1,292 1,710 1,565
Acquisition and integration costs/reversal (1 ) 7 27 19 26 57 433 370
Amortization of acquisition-related intangible assets 81 **** 79 92 79 79 84 88 85
Legal provision/reversal (including related interest expense and legal fees) - **** - (870 ) 13 12 11 12 (3 )
Impact of loan portfolio sale - **** - - - - 136 - -
FDIC special assessment 4 **** (5 ) (11 ) 5 50 313 - -
Impact of Canadian tax measures - **** - - - - - - 131
Impact of alignment of accounting policies - **** 70 - - - - - -
Adjusted net income 2,046 **** 2,289 1,542 1,981 2,033 1,893 2,243 2,148
Operating Group Reported Revenue
Canadian P&C 2,974 **** 3,065 2,934 2,908 2,819 2,778 2,796 2,716
U.S. P&C 2,528 **** 2,676 2,468 2,453 2,389 2,454 2,488 2,414
BMO Wealth Management 1,528 **** 1,586 1,486 1,439 1,393 1,328 1,465 1,525
BMO Capital Markets 1,779 **** 2,073 1,600 1,666 1,661 1,589 1,651 1,463
Corporate Services (130 ) (134 ) 469 (274 ) (288 ) (477 ) (81 ) (66 )
Total revenue 8,679 **** 9,266 8,957 8,192 7,974 7,672 8,319 8,052
Key Performance Metrics
Diluted earnings per share () (2) 2.50 **** 2.83 2.94 2.48 2.36 1.73 2.19 2.12
Adjusted diluted earnings per share () 2.62 **** 3.04 1.90 2.64 2.59 2.56 2.93 2.94
PCL-to-average net loans and<br>acceptances (annualized) (%) 0.63 **** 0.58 0.91 0.54 0.44 0.38 0.27 0.30
Effective tax rate (%) 24.70 **** 24.39 23.37 23.80 23.07 21.95 22.07 21.31
Adjusted effective tax rate (%) 24.73 **** 24.52 21.71 23.89 23.27 22.43 22.95 22.08
Canadian/U.S. dollar average exchange rate () 1.4203 **** 1.4303 1.3641 1.3705 1.3625 1.3392 1.3648 1.3331

All values are in US Dollars.

(1) Adjusted results exclude certain items from reported results and are used to calculate our adjusted measures as presented<br>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<br>Financial Measures sections in both this document and BMO’s 2024 Annual Report. For details on the composition of non-GAAP amounts, measures and ratios, as well as supplementary financial measures, refer<br>to the Glossary of Financial Terms.
(2) Net income and earnings from our business operations are attributable to shareholders by way of EPS and diluted EPS.<br>Adjusted EPS and adjusted diluted EPS are non-GAAP measures. For further information, refer to the Non-GAAP and Other Financial Measures section.
--- ---

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

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

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

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

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

Credit outcomes in both wholesale and consumer portfolios included the impact of a higher interest rate environment, resulting in higher provisions on impaired loans. Impaired provisions have decreased since the fourth quarter of fiscal 2024. Provisions on performing loans have been impacted by credit migration, uncertain credit conditions and changes in the macro-economic outlook.

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

BMO Financial Group Second Quarter Report 2025 29

the enterprise, which combined with the benefit of realized cost synergies related to the acquisition of Bank of the West, have tempered expense growth in recent quarters.

The effective tax rate has varied with legislative changes; changes in tax policy, including their interpretation by tax authorities and the courts; earnings mix, including the relative proportion of earnings attributable to the different jurisdictions in which we operate, the level of pre-tax income, and the level of investments or securities which generate tax credits, or tax-exempt income from securities. The reported effective tax rate was impacted by the elimination of the income tax deduction for certain Canadian dividends in fiscal 2024 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 to our preferred customers for those services. Key management personnel are defined as those persons having authority and responsibility for planning, directing and/or controlling the activities of an entity, being the directors and most senior executives of the bank. We provide banking services to our joint ventures and associates on the same terms offered to our customers for these services. We also offer employees a subsidy on annual credit card fees.

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

Off-Balance Sheet Arrangements

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

Accounting Policies and Critical Accounting Estimates and Judgments

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

Allowance for Credit Losses

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

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

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

Our total allowance for credit losses as at April 30, 2025, was $5,616 million ($4,936 million as at October 31, 2024) and comprised an allowance on performing loans of $4,638 million and an allowance on impaired loans of $978 million ($4,205 million and $731 million, respectively, as at October 31, 2024). The allowance on performing loans increased $433 million from the fourth quarter of 2024, largely driven by changes in the macro-economic outlook, portfolio credit migration, and the impact of the uncertain economic environment on future credit conditions, partially offset by lower balances in certain portfolios and movements in foreign exchange rates.

30 BMO Financial Group Second Quarter Report 2025

Information on the Provision for Credit Losses for the three and six months ended April 30, 2025, can be found in the Total Provision for Credit Losses section.

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

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

Future Changes in Accounting Policies

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

Other Regulatory Developments

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

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

Sustainability-Related Regulatory Developments

In March 2025, OSFI released updates to Guideline B-15, Climate Risk Management, to align with the requirements of the Canadian Sustainability Standards Board standards. Key updates include delaying the implementation date for disclosing Scope 3 greenhouse gas emissions and industry-based metrics by three years to fiscal 2028. We have incorporated these updates into our implementation plans accordingly.

Risk Management

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

Top and Emerging Risks That May Affect Future Results

BMO’s top and emerging risks and other factors that may affect future results are described in the Enterprise-Wide Risk Management section of BMO’s 2024 Annual Report. 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, as well as potential changes to U.S. tax legislation, 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 22
(Canadian $ in millions, except as noted) Residential<br><br><br>mortgages Amortizing<br><br><br>home equity<br><br><br>lines of credit Total amortizing<br><br><br>real estate<br> <br>secured lending Non-amortizing<br><br><br>real estate<br> <br>secured lending Total Canadian<br><br><br>real estate<br> <br>secured lending
As at April 30, 2025 **** 160,938 **** 36,774 **** 197,712 **** 13,784 **** 211,496
As at January 31, 2025 160,123 36,360 196,483 13,548 210,031
BMO Financial Group Second Quarter Report 2025 31
---

Residential Mortgages ^(1)^ ****

TABLE 23
As at April 30, 2025 As at January 31, 2025
(Canadian $ in millions, except as noted) Outstanding Balances For the threemonths ended Outstanding Balances For the three<br>months ended
Region (2) Insured(3) Uninsured Total % of total Average LTV<br><br><br>uninsured(4) Insured (3) Uninsured Total % of total Average LTV<br>uninsured (4)
Atlantic **** 3,233 **** 3,924 **** 7,157 **** 3.7% **** 70% 3,304 3,838 7,142 3.7% 69%
Quebec **** 8,501 **** 13,608 **** 22,109 **** 11.4% **** 71% 8,738 13,580 22,318 11.5% 71%
Ontario **** 14,166 **** 66,762 **** 80,928 **** 41.7% **** 70% 14,243 65,436 79,679 41.0% 71%
Alberta **** 9,397 **** 8,372 **** 17,769 **** 9.2% **** 73% 9,532 8,232 17,764 9.1% 73%
British Columbia **** 4,412 **** 24,790 **** 29,202 **** 15.1% **** 68% 4,488 24,927 29,415 15.1% 68%
All other Canada **** 2,131 **** 1,642 **** 3,773 **** 1.9% **** 72% 2,167 1,638 3,805 2.0% 72%
Total Canada **** 41,840 **** 119,098 **** 160,938 **** 83.0% **** 70% 42,472 117,651 160,123 82.4% 70%
United States **** 61 **** 32,815 **** 32,876 **** 17.0% **** 72% 64 34,106 34,170 17.6% 71%
Total **** 41,901 **** 151,913 **** 193,814 **** 100% **** 70% 42,536 151,757 194,293 100% 71%
(1) Reporting methodologies are in accordance with OSFI’s Residential Mortgage Underwriting Practices and Procedures (B-20) Guideline.
--- ---
(2) Region is based upon address of the property mortgaged.
--- ---
(3) Insured mortgages are defined as mortgages that are insured individually or in bulk through an eligible insurer (i.e.,<br>CMHC, Sagen MI Canada^TM^).
--- ---
(4) Loan-to-value (LTV) is based on original<br>outstanding balances for mortgages and authorized amounts for HELOCs, divided by the value of the collateral at point of origination.
--- ---

Home Equity Lines of Credit ^(1)^

TABLE 24
As at April 30, 2025 As at January 31, 2025
(Canadian $ in millions, except as noted) Portfolio For the threemonths ended Portfolio For the three<br>months ended
Region (2) OutstandingBalances % Authorizations % Average LTV(4) Outstanding<br>Balances % Authorizations % Average LTV (4)
Atlantic **** 1,088 **** 1.9% **** 2,098 **** 1.8% **** 64% 1,072 1.9% 2,064 1.7% 63%
Quebec **** 9,170 **** 16.0% **** 18,675 **** 15.8% **** 69% 9,145 16.1% 18,513 15.7% 67%
Ontario **** 25,619 **** 44.9% **** 48,003 **** 40.7% **** 63% 25,288 44.6% 47,540 40.3% 62%
Alberta **** 3,206 **** 5.6% **** 7,239 **** 6.1% **** 62% 3,171 5.6% 7,171 6.1% 60%
British Columbia **** 10,752 **** 18.8% **** 20,479 **** 17.3% **** 62% 10,513 18.5% 20,113 17.0% 61%
All other Canada **** 723 **** 1.3% **** 1,484 **** 1.3% **** 70% 719 1.3% 1,481 1.3% 67%
Total Canada **** 50,558 **** 88.5% **** 97,978 **** 83.0% **** 64% 49,908 88.0% 96,882 82.1% 62%
United States **** 6,578 **** 11.5% **** 20,092 **** 17.0% **** 57% 6,806 12.0% 21,095 17.9% 58%
Total **** 57,136 **** 100% **** 118,070 **** 100% **** 62% 56,714 100% 117,977 100% 62%

Refer to footnote references in the Residential Mortgages table above.

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

TABLE 25
As at April 30, 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% **** 7.4% **** 18.3% **** 36.0% **** 25.3% **** 2.5% **** 7.0%
United States (4) **** 0.3% **** 1.6% **** 3.7% **** 2.5% **** 9.1% **** 82.6% **** 0.1% **** 0.1%
Total **** 0.7% **** 2.6% **** 6.8% **** 15.6% **** 31.4% **** 35.0% **** 2.1% **** 5.8%
As at January 31, 2025
Amortization period
< 5 Years % 6-10 Years % 11-15 Years % 16-20 Years % 21-25 Years % 26-30 Years % 31-35 Years % > 35 Years %
Canada (3) 0.7% 2.7% 7.2% 18.1% 35.7% 25.5% 2.4% 7.7%
United States (4) 0.3% 1.7% 3.8% 2.5% 8.9% 82.6% 0.1% 0.1%
Total 0.7% 2.5% 6.6% 15.3% 31.0% 35.6% 2.0% 6.3%
(1) In Canada, the remaining amortization is based on the current balance, interest rate, customer payment amount and payment<br>frequency. The contractual payment schedule is used in the United States.
--- ---
(2) Reporting methodologies are in accordance with OSFI’s B-20 Guideline.<br>
--- ---
(3) As a result of increases in interest rates, the portfolio included $0.1 billion ($2.6 billion as at<br>January 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.<br>
--- ---
(4) A large proportion of U.S.-based mortgages in the longer-amortization band are primarily associated with modification<br>programs for troubled borrowers and regulator-initiated mortgage refinancing programs.
--- ---
32 BMO Financial Group Second Quarter Report 2025
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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 26
As at April 30, 2025 As at<br><br><br>January 31, 2025
(Canadian $ in millions) Funded Lending and Commitments Securities Repo-Style Transactions andDerivatives Total NetExposure Total Net<br>Exposure
Region Bank Corporate Sovereign Total Bank Corporate Sovereign Total Bank Corporate Sovereign Total
Europe (excluding United Kingdom) **** 709 **** 2,974 **** - **** 3,683 **** 948 **** 172 **** 5,837 **** 6,957 **** 982 **** 318 **** 63 **** 1,363 **** 12,003 7,879
United Kingdom **** 46 **** 6,599 **** 549 **** 7,194 **** 177 **** 124 **** 1,348 **** 1,649 **** 198 **** 678 **** 52 **** 928 **** 9,771 9,464
Latin America **** 2,589 **** 5,238 **** - **** 7,827 **** - **** 46 **** - **** 46 **** 6 **** 198 **** 12 **** 216 **** 8,089 8,694
Asia-Pacific **** 2,378 **** 2,453 **** 142 **** 4,973 **** 654 **** 10 **** 1,834 **** 2,498 **** 406 **** 223 **** 128 **** 757 **** 8,228 10,868
Africa and Middle East **** 1,488 **** 924 **** 104 **** 2,516 **** - **** 17 **** 10 **** 27 **** 3 **** 1 **** 1,725 **** 1,729 **** 4,272 4,134
Other (1) **** - **** 1 **** 14 **** 15 **** 175 **** - **** 3,961 **** 4,136 **** 8 **** - **** 521 **** 529 **** 4,680 5,932
Total **** 7,210 **** 18,189 **** 809 **** 26,208 **** 1,954 **** 369 **** 12,990 **** 15,313 **** 1,603 **** 1,418 **** 2,501 **** 5,522 **** 47,043 46,971
(1) Primarily exposure to supranational entities.
--- ---

Caution

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

Market Risk

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

Linkages between Balance Sheet Items and Market Risk Disclosures

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

TABLE 27
As at October 31, 2024
Subject to market risk Not subject<br><br><br>to marketrisk Consolidated<br><br><br>Balance<br>Sheet Subject to market risk Not subject<br><br><br>to market<br>risk Primary risk factors for<br><br><br>non-traded risk<br>balances
(Canadian in millions) Tradedrisk (1) Non-tradedrisk (2) Traded<br>risk (1) Non-traded<br>risk (2)
Assets Subject to Market Risk
Cash and cash equivalents 65,362 **** - 65,362 **** - 65,098 - 65,098 - Interest rate
Interest bearing deposits with banks 3,215 **** 257 2,958 **** - 3,640 201 3,439 - Interest rate
Securities 400,025 **** 150,273 249,752 **** - 396,880 153,833 243,047 - Interest rate, credit spread, equity
Securities borrowed or purchased under resale agreements 119,487 **** - 119,487 **** - 110,907 - 110,907 - Interest rate
Loans and acceptances (net of allowance for credit losses) 675,704 **** 5,132 670,572 **** - 678,016 6,085 671,931 - Interest rate, foreign exchange
Derivative instruments 49,726 **** 43,464 6,262 **** - 47,253 42,879 4,374 - Interest rate, foreign exchange
Customers’ liabilities under acceptances 438 **** - 438 **** - 359 - 359 - Interest rate
Other assets 126,312 **** 11,345 11,930 **** 103,037 107,494 9,783 11,001 86,710 Interest rate
Total assets 1,440,269 **** 210,471 1,126,761 **** 103,037 1,409,647 212,781 1,110,156 86,710
Liabilities Subject to Market Risk
Deposits 958,267 **** 46,909 911,358 **** - 982,440 45,223 937,217 - Interest rate, foreign exchange
Derivative instruments 57,727 **** 54,088 3,639 **** - 58,303 54,713 3,590 - Interest rate, foreign exchange
Acceptances 438 **** - 438 **** - 359 - 359 - Interest rate
Securities sold but not yet purchased 53,422 **** 53,422 - **** - 35,030 35,030 - - Interest rate
Securities lent or sold under repurchase agreements 118,949 **** - 118,949 **** - 110,791 - 110,791 - Interest rate
Other liabilities 155,893 **** - 90,011 **** 65,882 130,061 - 78,583 51,478 Interest rate
Subordinated debt 9,740 **** - 9,740 **** - 8,377 - 8,377 - Interest rate
Total liabilities 1,354,436 **** 154,419 1,134,135 **** 65,882 1,325,361 134,966 1,138,917 51,478

All values are in US Dollars.

(1) Primarily comprises balance sheet items that are subject to the trading and underwriting risk management framework and<br>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<br>framework and secured financing transactions.
--- ---

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

BMO Financial Group Second Quarter Report 2025 33

Trading Market Risk Measures

Average Total Trading Value at Risk (VaR) decreased quarter-over-quarter, primarily due to lower equity exposures, partially offset by higher market volatility and changes in commodity exposures.

Total Trading Value at Risk ^(1)^ ****

TABLE 28
For the quarter ended April 30, 2025 January 31, 2025 April 30, 2024
Quarter-end Average High Low Average Average
Commodity VaR **** 5.7 **** **** 8.7 **** **** 15.1 **** 5.7 3.4 3.5
Equity VaR **** 20.9 **** **** 20.6 **** **** 35.7 **** 14.5 26.1 15.7
Foreign exchange VaR **** 1.8 **** **** 2.1 **** **** 5.1 **** 0.8 1.6 0.8
Interest rate VaR (2) **** 28.0 **** **** 28.5 **** **** 33.1 **** 22.8 29.2 28.5
Diversification **** (18.0 ) **** (22.5 ) **** nm **** nm (21.0 ) (16.5 )
Total Trading VaR **** 38.4 **** **** 37.4 **** **** 46.7 **** 31.5 39.3 32.0
(1) One-day measure using a 99% confidence interval. Gains are presented in brackets and losses are presented as positive<br>numbers.
--- ---
(2) Interest rate VaR includes general credit spread risk.
--- ---

nm – not meaningful

Structural (Non-Trading) Market Risk

Our structural market risk strategy and profile remains consistent with prior periods. The net balance sheet is fully invested in an intermediate duration target interest rate profile. Structural economic value exposure to rising rates remained relatively unchanged relative to January 31, 2025. Structural economic value benefit to falling rates decreased, compared with January 31, 2025, primarily due to modelled deposit pricing being less rate-sensitive at lower projected interest rate levels following the decrease in U.S. term market rates during the current quarter.

Structural earnings benefit to rising interest rates decreased modestly, compared with January 31, 2025, reflecting lower asset sensitivity. Structural earnings exposure to falling interest rates remained relatively unchanged, relative to January 31, 2025.

StructuralInterest Rate Sensitivity ^(1) (2)^ ****

TABLE 29
Earnings sensitivity over the next 12 months
(Pre-tax Canadian equivalent in<br>millions) April 30,<br><br><br>2025 January 31,<br><br><br>2025 April 30,<br><br><br>2024 April 30,<br><br><br>2025 January 31,<br><br><br>2025 April 30,<br><br><br>2024
United States Total Total Total Canada(3) United States Total Total Total
100 basis point increase (734 ) **** (869 ) **** (1,603 ) (1,627 ) (2,008 ) **** 112 **** **** 193 **** **** 305 **** 357 257
100 basis point decrease 655 **** **** 93 **** **** 747 **** 842 1,447 **** (84 ) **** (158 ) **** (242 ) (236 ) (270 )

All values are in US Dollars.

(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<br>yield curve as at the end of the period, using a constant balance sheet.
--- ---
(3) Includes Canadian dollar and other currencies.
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Insurance Market Risk

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

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

TABLE 30
(Pre-tax Canadian $ in<br>millions) As at April 30, 2025 As at January 31, 2025
Interest Rate Sensitivity (1) (2)
50 basis point increase **** - **** 3
50 basis point decrease **** (1 ) (3 )
Equity Market Sensitivity (3)
10% increase **** 28 **** 28
10% decrease **** (26 ) (29 )
(1) Estimated impact on, or sensitivity of, income before tax to a 50 basis point increase or decrease in interest rates.<br>
--- ---
(2) Interest rate sensitivities assume a parallel shift in assumed interest rates across the entire yield curve as at the end<br>of the period with no change in the ultimate risk-free rate.
--- ---
(3) Estimated impact on, or sensitivity of, income before tax to a 10% increase or decrease in our exposure to equity price<br>risk arising from our investment in equity securities at the reporting date, assuming all other variables remain constant.
--- ---

Caution

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

34 BMO Financial Group Second Quarter Report 2025

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 second quarter of 2025. Customer loans and deposits and wholesale funding declined, primarily due to the impact of the weaker U.S. dollar. BMO’s liquidity metrics, including the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR), remained well above internal targets and regulatory requirements.

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

In the normal course of business, we may encumber a portion of cash and securities holdings as collateral in support of trading activities and participation in clearing and payment systems in Canada, the United States and abroad. In addition, we may receive liquid assets as collateral and may re-pledge these assets in exchange for cash or as collateral in support of trading activities. Net unencumbered liquid assets, defined as on-balance sheet assets, such as BMO-owned cash and securities and securities borrowed or purchased under resale agreements, plus other off-balance sheet eligible collateral received, less assets encumbered as collateral, totalled $370.1 billion as at April 30, 2025, compared with $395.0 billion as at January 31, 2025. The decrease in unencumbered liquid assets was due to lower cash and 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 31
As at April 30, 2025 As at January 31, 2025
(Canadian $ in millions) Bank-ownedassets Other cash &securitiesreceived Total grossassets (1) Encumberedassets Netunencumberedassets^^(2) Net<br>unencumbered<br>assets (2)
Cash and cash equivalents **** 65,362 **** - **** 65,362 **** 82 **** 65,280 76,367
Deposits with other banks **** 3,215 **** - **** 3,215 **** - **** 3,215 3,339
Securities and securities borrowed or purchased under resale agreements
Sovereigns/Central banks/Multilateral development banks **** 185,176 **** 106,463 **** 291,639 **** 148,967 **** 142,672 139,559
NHA mortgage-backed securities and U.S. agency mortgage-backed securities and collateralized mortgage<br>obligations **** 119,326 **** 11,310 **** 130,636 **** 68,088 **** 62,548 67,011
Corporate and other debt **** 37,052 **** 20,620 **** 57,672 **** 19,785 **** 37,887 45,965
Corporate equity **** 58,471 **** 62,906 **** 121,377 **** 83,679 **** 37,698 42,264
Total securities and securities borrowed or purchased under resale agreements **** 400,025 **** 201,299 **** 601,324 **** 320,519 **** 280,805 294,799
NHA mortgage-backed securities (reported as loans at amortized cost)<br>(3) **** 26,092 **** - **** 26,092 **** 5,297 **** 20,795 20,529
Total liquid assets **** 494,694 **** 201,299 **** 695,993 **** 325,898 **** 370,095 395,034
(1) Gross assets include bank-owned assets and cash and securities received from third parties.
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(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<br>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,<br>NHA mortgage-backed securities.
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BMO Financial Group Second Quarter Report 2025 35
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Asset Encumbrance

TABLE 32
Encumbered(2) Net unencumbered
(Canadian $ in millions)<br><br><br>As at April 30, 2025 Total grossassets (1) Pledged ascollateral Otherencumbered Otherunencumbered(3) Available ascollateral (4)
Cash and deposits with other banks **** 68,577 **** - **** 82 **** - **** 68,495
Securities (5) **** 627,416 **** 240,980 **** 84,836 **** 24,925 **** 276,675
Loans **** 649,612 **** 65,022 **** 1,828 **** 431,366 **** 151,396
Other assets
Derivative instruments **** 49,726 **** - **** - **** 49,726 **** -
Customers’ liability under acceptances **** 438 **** - **** - **** 438 **** -
Premises and equipment **** 6,161 **** - **** - **** 6,161 **** -
Goodwill **** 16,630 **** - **** - **** 16,630 **** -
Intangible assets **** 4,824 **** - **** - **** 4,824 **** -
Current tax assets **** 1,620 **** - **** - **** 1,620 **** -
Deferred tax assets **** 2,641 **** - **** - **** 2,641 **** -
Receivable from brokers, dealers and clients **** 48,401 **** - **** - **** 48,401 **** -
Other **** 46,035 **** 10,991 **** - **** 35,044 **** -
Total other assets **** 176,476 **** 10,991 **** - **** 165,485 **** -
Total assets **** 1,522,081 **** 316,993 **** 86,746 **** 621,776 **** 496,566
Encumbered (2) Net unencumbered
(Canadian $ in millions)<br><br><br>As at January 31, 2025 Total gross<br>assets (1) Pledged as<br>collateral Other<br>encumbered Other<br>unencumbered (3) Available as<br>collateral (4)
Cash and deposits with other banks 79,799 - 93 - 79,706
Securities (5) 635,527 249,990 70,209 25,855 289,473
Loans 662,890 67,558 1,728 439,422 154,182
Other assets
Derivative instruments 52,513 - - 52,513 -
Customers’ liability under acceptances 521 - - 521 -
Premises and equipment 6,312 - - 6,312 -
Goodwill 17,485 - - 17,485 -
Intangible assets 5,002 - - 5,002 -
Current tax assets 2,105 - - 2,105 -
Deferred tax assets 2,916 - - 2,916 -
Receivable from brokers, dealers and clients 38,057 - - 38,057 -
Other 52,969 15,136 - 37,833 -
Total other assets 177,880 15,136 - 162,744 -
Total assets 1,556,096 332,684 72,030 628,021 523,361
(1) Gross assets includes on-balance sheet and<br>off-balance sheet assets.
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(2) Pledged as collateral refers to the portion of on-balance sheet assets and other<br>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<br>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.
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(3) Other unencumbered assets include select liquid asset holdings that management believes are not readily available to<br>support BMO’s liquidity requirements. These include securities of $24.9 billion as at April 30, 2025, and include securities held at BMO’s insurance subsidiary, seller financing securities and certain investments held at our<br>merchant banking business. Other unencumbered assets include mortgages and loans that may be securitized to access secured funding.
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(4) Loans included in available as collateral represent loans currently lodged at central banks that may be used to access<br>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<br>Home Loan Bank (FHLB) advances.
--- ---
(5) Includes securities, securities borrowed or purchased under resale agreements and NHA mortgage-backed securities (reported<br>as loans at amortized cost).
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Net Unencumbered Liquid Assets by Legal Entity

TABLE 33
(Canadian $ in millions) As at April 30, 2025 As at January 31, 2025
BMO (parent) **** 218,200 239,323
BMO Bank N.A. **** 120,117 132,135
Broker dealers **** 31,778 23,576
Total net unencumbered liquid assets by legal entity **** 370,095 395,034

Funding Strategy

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

We maintain a large and stable base of customer deposits that, in combination with our strong capital position, is a source of strength. This supports the maintenance of a sound liquidity position and reduces reliance on wholesale funding. Customer deposits totalled $697.0 billion as at April 30, 2025, decreasing from $722.7 billion as at January 31, 2025, primarily driven by the impact of the weaker U.S. dollar.

Total secured and unsecured wholesale funding outstanding, which largely consists of negotiable marketable securities, was $258.8 billion as at April 30, 2025, with $71.7 billion sourced as secured funding and $187.1 billion sourced as unsecured funding. Wholesale funding outstanding decreased from $263.4 billion as at January 31, 2025, primarily due to the impact of the weaker U.S. dollar. The mix and maturities of BMO’s wholesale term funding are outlined in the following table. Additional information on deposit maturities can be found in the Contractual Maturities of Assets and Liabilities and Off-Balance Sheet Commitments section. We maintain a sizeable portfolio of unencumbered liquid assets, totalling $370.1 billion as at April 30, 2025, that can be monetized to meet potential funding requirements, as described in the Unencumbered Liquid Assets section above.

36 BMO Financial Group Second Quarter Report 2025

Wholesale Funding Maturities ^(1)^ ****

TABLE 34
As at April 30, 2025 As at January 31, 2025
(Canadian $ in millions) Less than<br><br><br>1 month 1 to 3<br><br><br>months 3 to 6<br><br><br>months 6 to 12  months Subtotal lessthan 1 year 1 to 2<br><br><br>years Over<br><br><br>2 years Total Total
Deposits from banks **** 1,662 **** 1,546 **** 892 **** 552 **** 4,652 **** - **** - **** 4,652 4,887
Certificates of deposit and commercial paper **** 12,336 **** 21,001 **** 18,576 **** 36,156 **** 88,069 **** 1,529 **** - **** 89,598 93,233
Bearer deposit notes **** 1,269 **** 1,004 **** 900 **** 500 **** 3,673 **** - **** - **** 3,673 3,320
Asset-backed commercial paper (ABCP) **** 1,886 **** 3,992 **** 6,694 **** 1,070 **** 13,642 **** - **** - **** 13,642 12,038
Senior unsecured medium-term notes **** 2,068 **** 5,152 **** 5,264 **** 2,893 **** 15,377 **** 16,821 **** 31,551 **** 63,749 66,938
Senior unsecured structured notes (2) **** 156 **** 169 **** 3 **** 382 **** 710 **** 833 **** 14,194 **** 15,737 16,304
Secured funding
Mortgage and HELOC securitizations **** - **** 1,320 **** 154 **** 1,075 **** 2,549 **** 2,396 **** 14,097 **** 19,042 19,140
Covered bonds **** - **** 3,446 **** 618 **** 5,190 **** 9,254 **** 12,859 **** 5,469 **** 27,582 27,157
Other asset-backed securitizations (3) **** - **** - **** - **** 802 **** 802 **** 875 **** 4,814 **** 6,491 6,939
Federal Home Loan Bank advances **** - **** - **** 1,447 **** 10 **** 1,457 **** 2,068 **** 1,379 **** 4,904 4,863
Subordinated debt **** - **** - **** - **** 25 **** 25 **** - **** 9,713 **** 9,738 8,553
Total **** 19,377 **** 37,630 **** 34,548 **** 48,655 **** 140,210 **** 37,381 **** 81,217 **** 258,808 263,372
Of which:
Secured **** 1,886 **** 8,758 **** 8,913 **** 8,147 **** 27,704 **** 18,198 **** 25,759 **** 71,661 70,137
Unsecured **** 17,491 **** 28,872 **** 25,635 **** 40,508 **** 112,506 **** 19,183 **** 55,458 **** 187,147 193,235
Total (4) **** 19,377 **** 37,630 **** 34,548 **** 48,655 **** 140,210 **** 37,381 **** 81,217 **** 258,808 263,372
(1) Wholesale unsecured funding primarily includes funding raised through the issuance of negotiable marketable securities.<br>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<br>conduits that are not consolidated for financial reporting purposes.
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(2) Includes structured notes issued to institutional investors and exchange-traded notes.
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(3) Includes credit card loan securitizations.
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(4) Total wholesale funding comprised Canadian-dollar-denominated funding totalling $53.0 billion and<br>U.S.-dollar-denominated and other foreign-currency-denominated funding totalling $205.8 billion as at April 30, 2025.
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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 2024 Annual Report. Please also see the Risk Management section.

Credit Ratings

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

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

TABLE 35
As at April 30, 2025
Rating agency (1) Short-term debt Senior debt (2) Long-term<br>deposits/legacy<br>senior debt (3) Subordinated<br> <br>debt<br>(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<br>price or suitability for a particular investor. Ratings are subject to revision or withdrawal at any time by the rating organization.
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(2) Subject to conversion under the Bank Recapitalization (Bail-In) Regime.<br>
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(3) Long-term deposits / Legacy senior debt includes senior debt issued prior to September 23, 2018 and senior debt<br>issued on or after September 23, 2018 that is excluded from the Bank Recapitalization (Bail-In) Regime.
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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 April 30, 2025, we would be required to provide additional collateral to counterparties totalling $254 million, $561 million and $1,399 million, as a result of a one-notch, two-notch and three-notch downgrade, respectively.

BMO Financial Group Second Quarter Report 2025 37

Liquidity Coverage Ratio

The Liquidity Coverage Ratio (LCR) is calculated in accordance with OSFI’s LAR Guideline and is summarized in the following table. The LCR is calculated on a daily basis as the ratio of the stock of High-Quality Liquid Assets (HQLA) held to total net stressed cash outflows over the next 30 calendar days. BMO’s HQLA primarily comprises cash, highly-rated debt issued or backed by governments, highly-rated covered bonds and non-financial corporate debt, and non-financial equities that are part of a major stock index. Net cash flows include outflows from deposits, secured and unsecured wholesale funding, commitments and potential collateral requirements, offset by permitted inflows from loans, securities lending activities and other non-HQLA debt maturing over a 30-day horizon. Weightings prescribed by OSFI are applied to cash flows and HQLA to arrive at the weighted values and the LCR. The LCR does not reflect liquidity in BMO Financial Corp. (BFC) in excess of 100%, because of limitations on the transfer of liquidity between BFC and the parent bank. Canadian domestic systemically important banks (D-SIBs), including BMO, are required to maintain a minimum LCR of 100%. The average daily LCR for the quarter ended April 30, 2025 was 134%, equivalent to a surplus of $65.2 billion above the regulatory minimum. The LCR increased 6% from 128% in the prior quarter, due to a decrease in net cash outflows. While banks are required to maintain an LCR of greater than 100% in normal conditions, they are also expected to be able to utilize HQLA during a period of stress, which may result in an LCR of less than 100% during such a period. The LCR is only one measure of a bank’s liquidity position and does not fully capture all of its liquid assets or the funding alternatives that may be available during a period of stress. BMO’s total liquid assets are shown in the Liquid Assets table.

TABLE 36
For the quarter ended April 30, 2025
(Canadian $ in billions, except as noted) Total unweighted value(average) (1) (2) Total weighted value(average) (2) (3)
High-Quality Liquid Assets
Total high-quality liquid assets (HQLA) **** * **** 258.7
Cash Outflows
Retail deposits and deposits from small business customers, of which: **** 315.0 **** 22.7
Stable deposits **** 144.6 **** 4.3
Less stable deposits **** 170.4 **** 18.4
Unsecured wholesale funding, of which: **** 321.6 **** 141.2
Operational deposits (all counterparties) and deposits in networks of cooperative banks **** 157.4 **** 38.9
Non-operational deposits (all counterparties) **** 141.5 **** 79.6
Unsecured debt **** 22.7 **** 22.7
Secured wholesale funding **** * **** 25.4
Additional requirements, of which: **** 258.5 **** 54.8
Outflows related to derivatives exposures and other collateral requirements **** 39.9 **** 9.8
Outflows related to loss of funding on debt products **** 2.6 **** 2.6
Credit and liquidity facilities **** 216.0 **** 42.4
Other contractual funding obligations **** 0.6 **** -
Other contingent funding obligations **** 580.9 **** 12.3
Total cash outflows **** - **** 256.4
Cash Inflows
Secured lending (e.g., reverse repos) **** 167.6 **** 28.4
Inflows from fully performing exposures **** 20.1 **** 11.2
Other cash inflows **** 23.3 **** 23.3
Total cash inflows **** 211.0 **** 62.9
For the quarter ended April 30, 2025 Total adjusted value(4)
Total HQLA **** 258.7
Total net cash outflows **** 193.5
Liquidity Coverage Ratio (%) (2) **** 134
For the quarter ended January 31, 2025 Total adjusted value (4)
Total HQLA 259.5
Total net cash outflows 203.2
Liquidity Coverage Ratio (%) 128
* Disclosure is not required under the LCR disclosure standard.
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(1) Unweighted values are calculated at market value (for HQLA) or as outstanding balances maturing or callable within 30 days<br>(for inflows and outflows).
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(2) Values are calculated based on the simple average of the daily LCR over 61 business days in the second quarter of fiscal<br>2025.
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(3) Weighted values are calculated after the application of the weights prescribed under OSFI’s LAR Guideline for HQLA<br>and cash inflows and outflows.
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(4) Adjusted values are calculated based on total weighted values after applicable caps, as defined by the LAR Guideline.<br>
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38 BMO Financial Group Second Quarter Report 2025
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Net Stable Funding Ratio

The Net Stable Funding Ratio (NSFR) is a regulatory liquidity metric that assesses the stability of a bank’s funding profile in relation to the liquidity value of its assets and is calculated in accordance with OSFI’s LAR Guideline. Unlike the LCR, which is a short-term metric, the NSFR assesses a bank’s medium-term and long-term resilience. The NSFR is defined as the ratio of the amount of available stable funding (ASF) to the amount of required stable funding (RSF). ASF represents the proportion of own and third-party resources that are expected to be reliably available over a one-year horizon (including customer deposits, long-term wholesale funding, and capital). The stable funding requirements for each institution are set by OSFI based on the liquidity and maturity characteristics of its on-balance sheet assets and off-balance sheet exposures. Weightings prescribed by OSFI are applied to notional asset and liability balances to determine ASF and RSF and the NSFR. Canadian domestic systemically important banks (D-SIBs), including BMO, are required to maintain a minimum NSFR of 100%. BMO’s NSFR was 117% as at April 30, 2025, equivalent to a surplus of $113.8 billion above the regulatory minimum. The NSFR increased from 116% in the prior quarter, as lower available stable funding was more than offset by a decrease in required stable funding.

TABLE 37
For the quarter ended April 30, 2025
Unweighted Value by Residual Maturity Weighted<br><br><br>Value (2)
(Canadian $ in billions, except as noted) No<br><br><br>maturity(1) Less than 6months 6 to 12<br><br><br>months Over 1 year
Available Stable Funding (ASF) Item
Capital: **** - **** - **** - **** 97.2 **** 97.2
Regulatory capital **** - **** - **** - **** 97.2 **** 97.2
Other capital instruments **** - **** - **** - **** - **** -
Retail deposits and deposits from small business customers: **** 236.3 **** 66.9 **** 38.5 **** 63.5 **** 371.7
Stable deposits **** 116.6 **** 27.7 **** 15.7 **** 13.4 **** 165.4
Less stable deposits **** 119.7 **** 39.2 **** 22.8 **** 50.1 **** 206.3
Wholesale funding: **** 316.7 **** 281.3 **** 61.0 **** 101.3 **** 279.5
Operational deposits **** 144.4 **** - **** - **** 0.4 **** 72.6
Other wholesale funding **** 172.3 **** 281.3 **** 61.0 **** 100.9 **** 206.9
Liabilities with matching interdependent assets **** - **** 0.6 **** 1.0 **** 15.0 **** -
Other liabilities: **** 13.4 **** * **** * **** 98.5 **** 36.0
NSFR derivative liabilities **** * **** * **** * **** 7.0 **** *
All other liabilities and equity not included in the above<br>categories **** 13.4 **** 54.7 **** 1.5 **** 35.3 **** 36.0
Total ASF **** * **** * **** * **** * **** 784.4
Required Stable Funding (RSF) Item
Total NSFR high-quality liquid assets (HQLA) **** * **** * **** * **** * **** 14.5
Deposits held at other financial institutions for operational purposes **** - **** 0.2 **** - **** - **** 0.1
Performing loans and securities: **** 195.4 **** 218.4 **** 68.3 **** 353.5 **** 522.9
Performing loans to financial institutions secured by Level 1 HQLA **** - **** 101.2 **** 2.3 **** - **** 3.5
Performing loans to financial institutions secured by non-Level 1<br>HQLA and unsecured performing loans to financial institutions **** 32.0 **** 59.9 **** 8.8 **** 18.4 **** 61.8
Performing loans to non-financial corporate clients, loans to retail<br>and small business customers, and loans to sovereigns, central banks and public sector entities, of which: **** 124.9 **** 38.0 **** 33.9 **** 170.2 **** 286.0
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit<br>risk **** - **** - **** - **** - **** -
Performing residential mortgages, of which: **** 13.8 **** 16.7 **** 22.9 **** 138.2 **** 126.4
With a risk weight of less than or equal to 35% under the Basel II standardized approach for credit<br>risk **** 13.8 **** 16.7 **** 22.9 **** 138.2 **** 126.4
Securities that are not in default and do not qualify as HQLA, including exchange-traded equities **** 24.7 **** 2.6 **** 0.4 **** 26.7 **** 45.2
Assets with matching interdependent liabilities **** - **** 0.6 **** 1.0 **** 15.0 **** -
Other assets: **** 52.5 **** * **** * **** 129.2 **** 111.7
Physical traded commodities, including gold **** 11.3 **** * **** * **** * **** 9.6
Assets posted as initial margin for derivative contracts and contributions to default funds of central<br>clearing parties **** * **** * **** * **** 19.3 **** 16.4
NSFR derivative assets **** * **** * **** * **** 2.7 **** -
NSFR derivative liabilities before deduction of variation margin posted **** * **** * **** * **** 15.9 **** 0.8
All other assets not included in the above categories **** 41.2 **** 56.4 **** 0.4 **** 34.5 **** 84.9
Off-balance sheet<br>items **** * **** * **** * **** 616.4 **** 21.4
Total RSF **** * **** * **** * **** * **** 670.6
Net Stable Funding Ratio (%) **** * **** * **** * **** * **** 117
For the quarter ended January 31, 2025 Weighted<br><br><br>Value (2)
Total ASF 800.3
Total RSF 688.7
Net Stable Funding Ratio (%) 116
* Disclosure is not required under the NSFR disclosure standard.
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(1) Items in the no maturity column do not have a stated maturity. These may include, but are not limited to, non-maturity deposits, short positions, open maturity positions, non-HQLA equities, physical traded commodities and demand loans.
--- ---
(2) Weighted values are calculated after the application of the weights prescribed under the OSFI LAR Guideline for ASF and<br>RSF.
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BMO Financial Group Second Quarter Report 2025 39
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Contractual Maturities of Assets and Liabilities andOff-Balance Sheet Commitments

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

TABLE 38
April 30, 2025
(Canadian $ in millions) 0 to 1month 1 to 3months 3 to 6months 6 to 9months 9 to 12months 1 to 2years 2 to 5years Over 5years No specificmaturity Total
Assets
Cash and cash equivalents **** 63,050 **** - **** - **** - **** - **** - **** - **** - **** 2,312 **** **** 65,362 ****
Interest bearing deposits with banks **** 2,756 **** 379 **** 67 **** 2 **** 1 **** 10 **** - **** - **** - **** **** 3,215 ****
Securities **** 5,169 **** 6,968 **** 11,857 **** 8,015 **** 8,173 **** 34,699 **** 77,932 **** 188,741 **** 58,471 **** **** 400,025 ****
Securities borrowed or purchased under resale agreements **** 94,342 **** 16,618 **** 6,293 **** 1,574 **** 660 **** - **** - **** - **** - **** **** 119,487 ****
Loans (1)
Residential mortgages **** 1,857 **** 3,946 **** 8,745 **** 10,377 **** 11,291 **** 48,370 **** 74,527 **** 34,493 **** 208 **** **** 193,814 ****
Consumer instalment and other personal **** 531 **** 991 **** 2,485 **** 2,768 **** 3,387 **** 14,592 **** 21,504 **** 18,891 **** 26,997 **** **** 92,146 ****
Credit cards **** - **** - **** - **** - **** - **** - **** - **** - **** 13,221 **** **** 13,221 ****
Business and government **** 11,416 **** 16,229 **** 19,241 **** 15,518 **** 16,885 **** 59,816 **** 102,775 **** 33,824 **** 105,779 **** **** 381,483 ****
Allowance for credit losses **** - **** - **** - **** - **** - **** - **** - **** - **** (4,960 ) **** (4,960 )
Total loans, net of allowance **** 13,804 **** 21,166 **** 30,471 **** 28,663 **** 31,563 **** 122,778 **** 198,806 **** 87,208 **** 141,245 **** **** 675,704 ****
Other assets
Derivative instruments **** 5,819 **** 7,375 **** 4,444 **** 4,286 **** 3,269 **** 6,472 **** 10,302 **** 7,759 **** - **** **** 49,726 ****
Customers’ liability under acceptances **** 438 **** - **** - **** - **** - **** - **** - **** - **** - **** **** 438 ****
Receivable from brokers, dealers and clients **** 48,401 **** - **** - **** - **** - **** - **** - **** - **** - **** **** 48,401 ****
Other **** 3,498 **** 1,278 **** 409 **** 29 **** 20 **** 15 **** 10 **** 7,672 **** 64,980 **** **** 77,911 ****
Total other assets **** 58,156 **** 8,653 **** 4,853 **** 4,315 **** 3,289 **** 6,487 **** 10,312 **** 15,431 **** 64,980 **** **** 176,476 ****
Total assets **** 237,277 **** 53,784 **** 53,541 **** 42,569 **** 43,686 **** 163,974 **** 287,050 **** 291,380 **** 267,008 **** **** 1,440,269 ****
TABLE 39
April 30, 2025
(Canadian $ in millions) 0 to 1month 1 to 3months 3 to 6months 6 to 9months 9 to 12months 1 to 2years 2 to 5years Over 5years No specificmaturity Total
Liabilities and Equity
Deposits (2) (3) **** 41,667 **** 69,777 **** 70,656 **** 60,937 **** 44,134 **** 58,350 **** 73,879 **** 26,716 **** 512,151 **** **** 958,267 ****
Other liabilities
Derivative instruments **** 6,594 **** 9,442 **** 6,383 **** 5,607 **** 3,467 **** 6,698 **** 9,949 **** 9,587 **** - **** **** 57,727 ****
Acceptances **** 438 **** - **** - **** - **** - **** - **** - **** - **** - **** **** 438 ****
Securities sold but not yet purchased (4) **** 53,422 **** - **** - **** - **** - **** - **** - **** - **** - **** **** 53,422 ****
Securities lent or sold under repurchase agreements (4) **** 104,107 **** 11,474 **** 703 **** - **** 985 **** 1,680 **** - **** - **** - **** **** 118,949 ****
Securitization and structured entities’ liabilities **** 25 **** 2,207 **** 151 **** 2,315 **** 198 **** 2,882 **** 10,150 **** 34,008 **** - **** **** 51,936 ****
Insurance-related liabilities **** 84 **** 81 **** 18 **** 20 **** 30 **** 86 **** 210 **** 740 **** 18,069 **** **** 19,338 ****
Payable to brokers, dealers and clients **** 48,732 **** - **** - **** - **** - **** - **** - **** - **** - **** **** 48,732 ****
Other **** 12,899 **** 416 **** 1,646 **** 1,670 **** 181 **** 2,982 **** 2,566 **** 2,703 **** 10,824 **** **** 35,887 ****
Total other liabilities **** 226,301 **** 23,620 **** 8,901 **** 9,612 **** 4,861 **** 14,328 **** 22,875 **** 47,038 **** 28,893 **** **** 386,429 ****
Subordinated debt **** - **** - **** - **** 25 **** - **** - **** 25 **** 9,690 **** - **** **** 9,740 ****
Total equity **** - **** - **** - **** - **** - **** - **** - **** - **** 85,833 **** **** 85,833 ****
Total liabilities and equity **** 267,968 **** 93,397 **** 79,557 **** 70,574 **** 48,995 **** 72,678 **** 96,779 **** 83,444 **** 626,877 **** **** 1,440,269 ****
(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 $28,685 million as at April 30, 2025, have a fixed maturity date; however, they can be<br>redeemed early (either fully or partially) by customers without penalty. These are classified as payable on a fixed date due to their stated contractual maturity date.
--- ---
(4) These are presented based on their earliest maturity date.
--- ---
TABLE 40
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
April 30, 2025
(Canadian $ in millions) 0 to 1month 1 to 3months 3 to 6months 6 to 9months 9 to 12months 1 to 2years 2 to 5years Over 5years No specificmaturity Total
Off-Balance Sheet Commitments **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** **** ****
Commitments to extend credit (1) **** 3,850 **** 9,711 **** 12,437 **** 8,862 **** 14,510 **** 52,281 **** 124,942 **** 7,865 **** - **** 234,458
Letters of credit (2) **** 3,200 **** 4,975 **** 5,844 **** 5,715 **** 6,185 **** 2,638 **** 3,340 **** 74 **** - **** 31,971
Backstop liquidity facilities **** 1,009 **** 1,040 **** 1,462 **** 837 **** 1,069 **** 9,981 **** 1,506 **** 874 **** - **** 17,778
Other commitments (3) **** 55 **** 84 **** 130 **** 221 **** 143 **** 453 **** 807 **** 333 **** - **** 2,226
(1) Commitments to extend credit exclude personal lines of credit and credit cards that are unconditionally cancellable at<br>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.<br>
--- ---
(3) Other commitments comprise purchase obligations and lease commitments for leases signed but not yet commenced.<br>
--- ---
40 BMO Financial Group Second Quarter Report 2025
---
TABLE 41
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
October 31, 2024
(Canadian $ in millions) 0 to 1<br>month 1 to 3<br>months 3 to 6<br>months 6 to 9<br>months 9 to 12<br>months 1 to 2<br>years 2 to 5<br>years Over 5<br>years No specific<br>maturity Total
Assets
Cash and cash equivalents 62,827 - - - - - - - 2,271 65,098
Interest bearing deposits with banks 2,513 628 481 18 - - - - - 3,640
Securities 6,787 14,011 7,840 6,707 9,720 21,264 84,775 172,886 72,890 396,880
Securities borrowed or purchased under resale agreements 85,185 16,803 5,701 2,330 888 - - - - 110,907
Loans (1)
Residential mortgages 1,683 3,284 6,413 6,653 9,252 52,489 77,867 33,227 212 191,080
Consumer instalment and other personal 581 974 1,703 1,827 2,671 14,815 24,595 18,830 26,691 92,687
Credit cards - - - - - - - - 13,612 13,612
Business and government 8,647 14,418 16,461 19,448 21,828 63,613 105,740 32,444 102,394 384,993
Allowance for credit losses - - - - - - - - (4,356 ) (4,356 )
Total loans, net of allowance 10,911 18,676 24,577 27,928 33,751 130,917 208,202 84,501 138,553 678,016
Other assets
Derivative instruments 5,573 7,996 7,211 2,482 1,660 6,365 8,374 7,592 - 47,253
Customers’ liability under acceptances 359 - - - - - - - - 359
Receivable from brokers, dealers and clients 31,916 - - - - - - - - 31,916
Other 3,847 1,012 948 31 14 13 13 7,717 61,983 75,578
Total other assets 41,695 9,008 8,159 2,513 1,674 6,378 8,387 15,309 61,983 155,106
Total assets 209,918 59,126 46,758 39,496 46,033 158,559 301,364 272,696 275,697 1,409,647
TABLE 42
October 31, 2024
(Canadian $ in millions) 0 to 1<br>month 1 to 3<br>months 3 to 6<br>months 6 to 9<br>months 9 to 12<br>months 1 to 2<br>years 2 to 5<br>years Over 5<br>years No specific<br>maturity Total
Liabilities and Equity
Deposits (2) (3) 47,637 74,759 69,479 68,110 48,835 51,789 87,297 25,602 508,932 982,440
Other liabilities
Derivative instruments 6,769 10,541 10,828 3,311 2,160 6,470 9,112 9,112 - 58,303
Acceptances 359 - - - - - - - - 359
Securities sold but not yet purchased (4) 35,030 - - - - - - - - 35,030
Securities lent or sold under repurchase agreements (4) 99,364 7,777 721 106 1,016 1,807 - - - 110,791
Securitization and structured entities’ liabilities 44 981 1,072 2,183 152 4,353 9,913 21,466 - 40,164
Insurance-related liabilities 93 89 18 18 30 83 195 701 17,543 18,770
Payable to brokers, dealers and clients 34,407 - - - - - - - - 34,407
Other 12,409 2,968 805 144 1,611 2,492 4,058 2,799 9,434 36,720
Total other liabilities 188,475 22,356 13,444 5,762 4,969 15,205 23,278 34,078 26,977 334,544
Subordinated debt - - - - - 25 25 8,327 - 8,377
Total equity - - - - - - - - 84,286 84,286
Total liabilities and equity 236,112 97,115 82,923 73,872 53,804 67,019 110,600 68,007 620,195 1,409,647
(1) Loans receivable on demand have been included under no specific maturity.
--- ---
(2) Deposits payable on demand and payable after notice have been included under no specific maturity.
--- ---
(3) Deposits totalling $29,136 million as at October 31, 2024, have a fixed maturity date; however, they can be<br>redeemed early (either fully or partially) by customers without penalty. These are classified as payable on a fixed date due to their stated contractual maturity date.
--- ---
(4) These are presented based on their earliest maturity date.
--- ---
TABLE 43
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
October 31, 2024
(Canadian $ in millions) 0 to 1<br>month 1 to 3<br>months 3 to 6<br>months 6 to 9<br>months 9 to 12<br>months 1 to 2<br>years 2 to 5<br>years Over 5<br>years No specific<br>maturity Total
Off-Balance Sheet Commitments
Commitments to extend credit (1) 3,720 5,220 10,229 16,052 16,284 47,054 130,664 7,048 - 236,271
Letters of credit (2) 2,109 5,235 6,113 6,761 6,163 2,310 3,689 36 - 32,416
Backstop liquidity facilities 283 213 213 3,408 1,132 3,047 9,110 818 - 18,224
Other commitments (3) 30 78 94 87 187 399 486 98 - 1,459
(1) Commitments to extend credit exclude personal lines of credit and credit cards that are unconditionally cancellable at<br>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.<br>
--- ---
(3) Other commitments comprise purchase obligations and lease commitments for leases signed but not yet commenced.<br>
--- ---

Caution

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

BMO Financial Group Second Quarter Report 2025 41

Glossary of Financial Terms

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

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

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

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

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

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

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

BasisPoint is one one-hundredth of a percentage point.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

42 BMO Financial Group Second Quarter Report 2025

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Return on Tangible Common Equity (ROTCE) is calculated as net income available to common shareholders, adjusted for the amortization of acquisition-related intangible assets and any impairments, as a percentage of average tangible common equity.

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

Securities Borrowed or Purchased under ResaleAgreements 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 dominant factor in determining control of the entity. BMO is required to consolidate a SE if it controls the entity by having power over the entity, exposure to variable returns as a result of its involvement and the ability to exercise power to affect the amount of those returns.

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

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

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

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

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

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

Total Capital comprises Tier 1 and Tier 2 Capital.

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

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

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

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

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

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

BMO Financial Group Second Quarter Report 2025 43

Investor and Media Information

Investor Presentation Materials

Interested parties are invited to visit BMO’s website at www.bmo.com/investorrelations to review the 2024 Annual MD&A and audited annual consolidated financial statements, quarterly presentation materials and supplementary financial and regulatory information package.

Quarterly Conference Call and Webcast Presentations

Interested parties are also invited to listen to our quarterly conference call on Wednesday, May 28, 2025, at 8:00 a.m. (ET). The call may be accessed by telephone at 416-340-2217 (from within Toronto) or 1-800-806-5484 (toll-free outside Toronto), entering Passcode: 9768240#. A replay of the conference call can be accessed until June 25, 2025, by calling 905-694-9451 (from within Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering Passcode: 9180754#.

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

Media Relations Contact

Jeff Roman, Director, Enterprise Media Relations, jeff.roman@bmo.com, 416-867-3996

Investor Relations Contacts

Christine Viau, Head, Investor Relations, christine.viau@bmo.com, 416-867-6956

Bill Anderson, Managing Director, Investor Relations, bill2.anderson@bmo.com, 416-867-7834

Shareholder Dividend Reinvestment and Share PurchasePlan (DRIP)<br><br><br>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<br>Plan and how to enrol can be found at www.bmo.com/investorrelations.<br> <br><br><br><br>For dividend information, change in shareholder addressor to advise of duplicate mailings, please contact<br><br><br>Computershare Trust Company of Canada<br> <br>100 University Avenue, 8th Floor<br><br><br>Toronto, Ontario M5J 2Y1<br> <br>Telephone: 1-800-340-5021 (Canada and the United States)<br> <br>Telephone: (514) 982-7800 (international)<br> <br>Fax:<br>1-888-453-0330 (Canada and the United States)<br><br><br>Fax: (416) 263-9394 (international)<br> <br>E-mail: service@computershare.com For other shareholder information, please contact<br><br><br>Bank of Montreal<br> <br>Shareholder Services<br><br><br>Corporate Secretary’s Department<br> <br>One First Canadian Place, 9th Floor<br><br><br>Toronto, Ontario M5X 1A1<br> <br>Telephone: (416)<br>867-6785<br> <br>E-mail: corp.secretary@bmo.com<br><br><br><br> <br>For further information on this document, please contact<br><br><br>Bank of Montreal<br> <br>Investor Relations Department<br><br><br>P.O. Box 1, One First Canadian Place, 37th Floor<br> <br>Toronto, Ontario M5X 1A1<br><br><br><br> <br>To review financial results and regulatory filings and disclosures online,please visit BMO’s website at www.bmo.com/investorrelations.

BMO’s 2024 Annual MD&A, audited consolidated financial statements, annual information form and annual report on Form 40-F (filed with the U.S. Securities and Exchange Commission) are available online at www.bmo.com/investorrelations and at www.sedarplus.ca. Printed copies of the bank’s complete 2024 audited consolidated financial statements are available free of charge upon request at 416-867-6785 or corp.secretary@bmo.com.

^®^ Registered trademark of Bank of Montreal

68 BMO Financial Group Second Quarter Report 2025

EX-99.2

Interim Consolidated Financial Statements

Consolidated Statement of Income

(Unaudited) (Canadian in millions, except as noted) For the six months ended
January 31,<br> 2025 April 30,<br> 2024 April 30,<br> 2025 April 30,<br> 2024
Interest, Dividend and Fee Income
Loans 9,501 $ 10,121 $ 9,745 $ 19,622 $ 19,577
Securities (Note 2) 3,978 4,120 3,716 8,098 7,155
Securities borrowed or purchased under resale agreements 1,448 1,565 1,672 3,013 3,229
Deposits with banks 727 817 1,031 1,544 2,057
15,654 16,623 16,164 32,277 32,018
Interest Expense
Deposits 7,268 8,124 8,454 15,392 16,838
Securities sold but not yet purchased and securities lent or sold under repurchase agreements 2,374 2,189 2,282 4,563 4,158
Subordinated debt 115 111 111 226 222
Other liabilities 800 801 802 1,601 1,564
10,557 11,225 11,649 21,782 22,782
Net Interest Income 5,097 5,398 4,515 10,495 9,236
Non-Interest Revenue
Securities commissions and fees 275 288 271 563 540
Deposit and payment service charges 456 442 398 898 794
Trading revenues 819 802 599 1,621 1,059
Lending fees 324 362 388 686 773
Card fees 201 219 212 420 426
Investment management and custodial fees 556 574 501 1,130 984
Mutual fund revenues 353 363 323 716 638
Underwriting and advisory fees 415 380 371 795 715
Securities gains, other than trading (Note 2) 66 58 81 124 94
Foreign exchange gains, other than trading 62 76 65 138 129
Insurance service results (Note 5) 123 91 99 214 198
Insurance investment results (Notes 2 and 5) (4 ) 60 25 56 16
Share of profit (loss) in associates and joint ventures (2 ) 49 67 47 105
Other revenues (losses) (62 ) 104 59 42 (61 )
3,582 3,868 3,459 7,450 6,410
Total Revenue 8,679 9,266 7,974 17,945 15,646
Provision for Credit Losses (Note 3) 1,054 1,011 705 2,065 1,332
Non-Interest Expense
Employee compensation 2,850 3,235 2,619 6,085 5,489
Premises and equipment 1,086 1,086 1,032 2,172 2,008
Amortization of intangible assets 296 288 276 584 555
Advertising and business development 210 174 202 384 393
Communications 95 86 100 181 201
Professional fees 141 146 132 287 270
Association, clearing and annual regulator fees 85 76 72 161 141
Other 256 336 411 592 1,176
5,019 5,427 4,844 10,446 10,233
Income Before Provision for Income Taxes 2,606 2,828 2,425 5,434 4,081
Provision for income taxes (Note 11) 644 690 559 1,334 923
Net Income 1,962 $ 2,138 $ 1,866 $ 4,100 $ 3,158
Attributable to:
Bank shareholders 1,960 $ 2,134 $ 1,862 $ 4,094 $ 3,152
Non-controlling interest in subsidiaries 2 4 4 6 6
Net Income 1,962 $ 2,138 $ 1,866 $ 4,100 $ 3,158
Earnings Per Common Share (Canadian ) (Note 10)
Basic 2.51 $ 2.84 $ 2.36 $ 5.34 $ 4.09
Diluted 2.50 2.83 2.36 5.34 4.08
Dividends per common share 1.59 1.59 1.51 3.18 3.02

All values are in US Dollars.

The accompanying notes are an integral part of these interim consolidated financial statements.

44<br> BMO Financial Group Second Quarter Report 2025

Interim Consolidated Financial Statements

Consolidated Statement of Comprehensive Income

(Unaudited) (Canadian $ in millions) For the three months ended For the six months ended
April 30,<br>2025 January 31,<br>2025 April 30,<br>2024 April 30,<br>2025 April 30,<br>2024
Net Income $ 1,962 $ 2,138 $ 1,866 $ 4,100 $ 3,158
Other Comprehensive Income (Loss), net of taxes
Items that will subsequently be reclassified to net income
Net change in unrealized gains (losses) on fair value through OCI debt securities
Unrealized gains (losses) on fair value through OCI debt securities arising during the period (1) (137 ) 120 40 (17 ) 311
Reclassification to earnings of (gains) during the period (2) (15 ) (6 ) (40 ) (21 ) (45 )
(152 ) 114 - (38 ) 266
Net change in unrealized gains (losses) on cash flow hedges
Gains (losses) on derivatives designated as cash flow hedges arising during the period (3) 818 375 (1,443 ) 1,193 471
Reclassification to earnings of losses on derivatives<br> designated as cash flow hedges during the period (4) 184 341 379 525 768
1,002 716 (1,064 ) 1,718 1,239
Net gains (losses) on translation of net foreign operations
Unrealized gains (losses) on translation of net foreign operations (3,205 ) 2,612 1,482 (593 ) (398 )
Unrealized gains (losses) on hedges of net foreign operations (5) 747 (541 ) (266 ) 206 61
(2,458 ) 2,071 1,216 (387 ) (337 )
Items that will not be subsequently reclassified to net income
Net unrealized gains (losses) on fair value through OCI equity securities arising during the period (6) - (11 ) - (11 ) 8
Net gains (losses) on remeasurement of pension and other employee future benefit plans (7) (28 ) 22 43 (6 ) (48 )
Net gains (losses) on remeasurement of own credit risk on financial liabilities<br> designated at fair value (8) 146 (88 ) (356 ) 58 (783 )
118 (77 ) (313 ) 41 (823 )
Other Comprehensive Income (Loss), net of taxes (1,490 ) 2,824 (161 ) 1,334 345
Total Comprehensive Income $ 472 $ 4,962 $ 1,705 $ 5,434 $ 3,503
Attributable to:
Bank shareholders $ 470 $ 4,958 $ 1,701 $ 5,428 $ 3,497
Non-controlling<br> interest in subsidiaries 2 4 4 6 6
Total Comprehensive Income $ 472 $ 4,962 $ 1,705 $ 5,434 $ 3,503
(1) Net of income tax (provision) recovery of $50 million, $(45) million, $(14) million for the three months ended and $5 million and $(113) million for the six months ended, respectively.
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(2) Net of income tax provision of $6 million, $2 million, $15 million for the three months ended and $8 million and $17 million for the six months ended, respectively.
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(3) Net of income tax (provision) <br>recovery<br>of $(302) million, $(148) million, $547 million for the three months ended and $(450) million and $(182) million for the six months ended, respectively.
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(4) Net of income tax (recovery) of $(70) million, $(129) million, $(144) million for the three months ended and $(199) million and $(291) million for the six months ended, respectively.
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(5) Net of income tax (provision) recovery of $(287) million, $208 million, $103 million for the three months ended and $(79) million and $(23) million for the six months ended, respectively.
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(6) Net of income tax (provision) recovery of $nil million, $4 million, $nil million for the three months ended and $4 million and $(3) million for the six months ended, respectively.
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(7) Net of income tax (provision) recovery of $11 million, $(8) million, $(17) million for the three months ended and $3 million and $18 million for the six months ended, respectively.
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(8) Net of income tax (provision) recovery of $(56) million, $34 million, $137 million for the three months ended and $(22) million and $300 million for the six months ended, respectively.
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The accompanying notes are an integral part of these interim consolidated financial statements.

BMO Financial Group Second Quarter Report 2025 <br>45

Interim Consolidated Financial Statements

Consolidated Balance Sheet

(Unaudited) (Canadian $ in millions) As at
April 30,<br>2025 October 31,<br>2024
Assets
Cash and Cash Equivalents $ 65,362 $ 65,098
Interest Bearing Deposits with Banks 3,215 3,640
Securities<br>(Note 2)
Trading 173,889 168,926
Fair value through profit or loss 19,929 19,064
Fair value through other comprehensive income 105,938 93,702
Debt securities at amortized cost 100,269 115,188
400,025 396,880
Securities Borrowed or Purchased Under Resale Agreements 119,487 110,907
Loans<br>(Note 3)
Residential mortgages 193,814 191,080
Consumer instalment and other personal 92,146 92,687
Credit cards 13,221 13,612
Business and government 381,483 384,993
680,664 682,372
Allowance for credit losses (Note 3) (4,960 ) (4,356 )
675,704 678,016
Other Assets
Derivative instruments 49,726 47,253
Customers’ liability under acceptances 438 359
Premises and equipment 6,161 6,249
Goodwill 16,630 16,774
Intangible assets 4,824 4,925
Current tax assets 1,620 2,219
Deferred tax assets 2,641 3,024
Receivable from brokers, dealers and clients 48,401 31,916
Other 46,035 42,387
176,476 155,106
Total Assets $ 1,440,269 $ 1,409,647
Liabilities and Equity
Deposits<br>(Note 4) $ 958,267 $ 982,440
Other Liabilities
Derivative instruments 57,727 58,303
Acceptances 438 359
Securities sold but not yet purchased 53,422 35,030
Securities lent or sold under repurchase agreements 118,949 110,791
Securitization and structured entities’ liabilities 51,936 40,164
Insurance-related liabilities (Note 5) 19,338 18,770
Payable to brokers, dealers and clients 48,732 34,407
Other 35,887 36,720
386,429 334,544
Subordinated Debt<br>(Note 4) 9,740 8,377
Total Liabilities 1,354,436 1,325,361
Equity
Preferred shares and other equity instruments (Note 6) 7,787 8,087
Common shares (Note 6) 23,730 23,921
Contributed surplus 367 354
Retained earnings 47,158 46,469
Accumulated other comprehensive income 6,753 5,419
Total shareholders’ equity 85,795 84,250
Non-controlling<br> interest in subsidiaries (Note 6) 38 36
Total Equity 85,833 84,286
Total Liabilities and Equity $ 1,440,269 $ 1,409,647

The accompanying notes are an integral part of these interim consolidated financial statements.

46<br> BMO Financial Group Second Quarter Report 2025

Interim Consolidated Financial Statements

Consolidated Statement of Changes in Equity

(Unaudited) (Canadian $ in millions) For the three months ended For the six months ended
April 30,<br><br>2025 April 30,<br><br>2024 April 30,<br><br>2025 April 30,<br><br>2024
Preferred Shares and Other Equity Instruments<br>(Note 6)
Balance at beginning of period $ 7,787 $ 6,958 $ 8,087 $ 6,958
Issued during the period - 1,356 - 1,356
Redeemed during the period - - (300 ) -
Balance at end of period 7,787 8,314 7,787 8,314
Common Shares<br>(Note 6)
Balance at beginning of period 23,923 23,412 23,921 22,941
Issued under the Shareholder Dividend Reinvestment and Share Purchase Plan - 466 - 905
Issued under the Stock Option Plan 22 9 71 42
Treasury shares sold 14 9 7 8
Repurchased for cancellation (229 ) - (269 ) -
Balance at end of period 23,730 23,896 23,730 23,896
Contributed Surplus
Balance at beginning of period 363 351 354 328
Stock option expense, net of options exercised (3 ) (1 ) 5 11
Net premium on sale of treasury shares 7 - 8 11
Balance at end of period 367 350 367 350
Retained Earnings
Balance at beginning of period 47,243 44,161 46,469 44,006
Net income attributable to bank shareholders 1,960 1,862 4,094 3,152
Dividends on preferred shares and distributions payable on other equity instruments (142 ) (143 ) (207 ) (183 )
Dividends on common shares (1,151 ) (1,102 ) (2,310 ) (2,197 )
Equity issue expense - (6 ) - (6 )
Common shares repurchased for cancellation (Note 6) (752 ) - (888 ) -
Balance at end of period 47,158 44,772 47,158 44,772
Accumulated Other Comprehensive (Loss) on Fair Value through OCI Securities, net of taxes
Balance at beginning of period (218 ) (190 ) (321 ) (464 )
Unrealized gains (losses) on fair value through OCI debt securities arising during the period (137 ) 40 (17 ) 311
Unrealized gains (losses) on fair value through OCI equity securities arising during the period - - (11 ) 8
Reclassification to earnings of (gains) during the period (15 ) (40 ) (21 ) (45 )
Balance at end of period (370 ) (190 ) (370 ) (190 )
Accumulated Other Comprehensive Income (Loss) on Cash Flow Hedges, net of taxes
Balance at beginning of period (803 ) (3,145 ) (1,519 ) (5,448 )
Gains (losses) on derivatives designated as cash flow hedges arising during the period 818 (1,443 ) 1,193 471
Reclassification to earnings of losses on derivatives designated as cash flow hedges during the period 184 379 525 768
Balance at end of period 199 (4,209 ) 199 (4,209 )
Accumulated Other Comprehensive Income on Translation of Net Foreign Operations, net of taxes
Balance at beginning of period 8,452 4,641 6,381 6,194
Unrealized gains (losses) on translation of net foreign operations (3,205 ) 1,482 (593 ) (398 )
Unrealized gains (losses) on hedges of net foreign operations 747 (266 ) 206 61
Balance at end of period 5,994 5,857 5,994 5,857
Accumulated Other Comprehensive Income on Pension and Other Employee<br> Future Benefit Plans, net of taxes
Balance at beginning of period 896 852 874 943
Gains (losses) on remeasurement of pension and other employee future benefit plans (28 ) 43 (6 ) (48 )
Balance at end of period 868 895 868 895
Accumulated Other Comprehensive Income (Loss) on Own Credit Risk on Financial Liabilities<br> Designated at Fair Value, net of taxes
Balance at beginning of period (84 ) 210 4 637
Gains (losses) on remeasurement of own credit risk on financial liabilities designated at fair value 146 (356 ) 58 (783 )
Balance at end of period 62 (146 ) 62 (146 )
Total Accumulated Other Comprehensive Income 6,753 2,207 6,753 2,207
Total Shareholders’ Equity 85,795 79,539 85,795 79,539
Non-Controlling<br> Interest in Subsidiaries (Note 6)
Balance at beginning of period 41 29 36 28
Net income attributable to <br>non-controlling<br> interest in subsidiaries 2 4 6 6
Dividends to <br>non-controlling<br> interest in subsidiaries (3 ) (3 ) (3 ) (3 )
Other (2 ) 1 (1 ) -
Balance at end of period 38 31 38 31
Total Equity $ 85,833 $ 79,570 $ 85,833 $ 79,570

The accompanying notes are an integral part of these interim consolidated financial statements.

BMO Financial Group Second Quarter Report 2025 <br>47

Interim Consolidated Financial Statements

Consolidated Statement of Cash Flows

(Unaudited) (Canadian $ in millions) For the three months ended For the six months ended
April 30,<br><br>2025 April 30,<br><br>2024 April 30,<br><br>2025 April 30,<br><br>2024
Cash Flows Provided by (Used in) Operating Activities
Net Income $ 1,962 $ 1,866 $ 4,100 $ 3,158
Adjustments to determine net cash flows provided by operating activities:
Securities (gains), other than trading (Note 2) (66 ) (81 ) (124 ) (94 )
Depreciation of premises and equipment 245 240 498 484
Depreciation of other assets 3 8 7 17
Amortization of intangible assets 296 276 584 555
Provision for credit losses (Note 3) 1,054 705 2,065 1,332
Deferred taxes 65 (376 ) 236 (264 )
Share of (profit) loss in associates and joint ventures 2 (67 ) (47 ) (105 )
Changes in operating assets and liabilities:
Trading securities 2,722 (18,684 ) (5,370 ) (35,759 )
Derivative assets 7,520 (9,197 ) (782 ) 5,730
Derivative liabilities (10,570 ) 9,189 (2,187 ) (4,759 )
Current income taxes 146 (203 ) 170 124
Accrued interest receivable and payable (166 ) 427 (415 ) 839
Insurance-related liabilities (203 ) (141 ) 568 1,901
Brokers, dealers and clients receivable and payable (2,899 ) 1,595 (2,216 ) 4,368
Other items and accruals, net 6,473 1,818 (2,698 ) (3,408 )
Deposits (12,363 ) 9,621 (21,405 ) 29,208
Loans (3,307 ) (7,825 ) (2,001 ) (4,152 )
Securities sold but not yet purchased 10,577 (1,965 ) 18,635 (1,367 )
Securities lent or sold under repurchase agreements 769 10,392 9,029 15,051
Securities borrowed or purchased under resale agreements (12,182 ) (440 ) (9,271 ) (2,576 )
Securitization and structured entities’ liabilities 6,729 6,830 12,303 9,687
Net Cash Provided by (Used in) Operating Activities (3,193 ) 3,988 1,679 19,970
Cash Flows (Used in) Financing Activities
Net increase (decrease) in liabilities of subsidiaries 279 (2,433 ) (715 ) (6,768 )
Proceeds from issuance of subordinated debt 1,250 - 1,250 -
Proceeds from issuance of preferred shares, net of issuance costs (Note 6) - 1,350 - 1,350
Redemption of preferred shares (Note 6) - - (300 ) -
Net proceeds from issuance of common shares (Note 6) 20 10 64 31
Net sale of treasury shares 22 9 15 8
Common shares repurchased for cancellation (Note 6) (963 ) - (1,136 ) -
Cash dividends and distributions paid (1,224 ) (669 ) (2,507 ) (1,414 )
Cash dividends paid to <br>non-controlling<br> interest (3 ) (3 ) (3 ) (3 )
Repayment of lease liabilities (78 ) (93 ) (138 ) (185 )
Net Cash (Used in) Financing Activities (697 ) (1,829 ) (3,470 ) (6,981 )
Cash Flows Provided by (Used in) Investing Activities
Interest bearing deposits with banks (20 ) (35 ) 432 (238 )
Purchases of securities, other than trading (16,819 ) (15,917 ) (35,375 ) (40,218 )
Maturities of securities, other than trading 8,682 6,000 25,382 13,089
Proceeds from sales of securities, other than trading 3,984 12,078 13,111 17,267
Net purchases of premises and equipment and software (439 ) (327 ) (825 ) (719 )
Net Cash Provided by (Used in) Investing Activities (4,612 ) 1,799 2,725 (10,819 )
Effect of Exchange Rate Changes on Cash and Cash Equivalents (2,596 ) 1,252 (670 ) (235 )
Net increase (decrease) in Cash and Cash Equivalents (11,098 ) 5,210 264 1,935
Cash and Cash Equivalents at Beginning of Period 76,460 74,659 65,098 77,934
Cash and Cash Equivalents at End of Period $ 65,362 $ 79,869 $ 65,362 $ 79,869
Supplemental Disclosure of Cash Flow Information
Net cash provided by operating activities includes:
Interest paid in the period (1) $ 10,423 $ 10,808 $ 22,100 $ 21,481
Income taxes paid in the period 826 658 1,306 1,077
Interest received in the period 14,807 15,151 30,920 30,476
Dividends received in the period 637 642 1,363 1,191
(1) Includes dividends paid on securities sold but not yet purchased.
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The accompanying notes are an integral part of these interim consolidated financial statements.

48<br> BMO Financial Group Second Quarter Report 2025

Notes to Interim Consolidated Financial Statements

April 30, 2025 (Unaudited)

Note 1: Basis of Presentation

Bank of Montreal (the bank or BMO) is a chartered bank under the Bank Act (Canada) and is a public company incorporated in Canada. We are a highly diversified financial services company, providing a broad range of personal and commercial banking, wealth management and investment banking products and services. The bank’s head office is at 129 rue Saint Jacques, Montreal, Quebec. Our executive offices are at 100 King Street West, 1 First Canadian Place, Toronto, Ontario. Our common shares are listed on the Toronto Stock Exchange (TSX) and the New York Stock Exchange.

These condensed interim consolidated financial statements have been prepared in accordance with International Accounting Standard (IAS) 34, Interim Financial Reporting as issued by the International Accounting Standards Board (IASB) using the same accounting policies as disclosed in our annual consolidated financial statements for the year ended October 31, 2024, except as outlined below. These condensed interim consolidated financial statements should be read in conjunction with the notes to our annual consolidated financial statements for the year ended October 31, 2024. We also comply with interpretations of International Financial Reporting Standards (IFRS) by our regulator, the Office of the Superintendent of Financial Institutions (OSFI). These interim consolidated financial statements were authorized for issue by the Board of Directors on May 28, 2025.

Use of Estimates and Judgments

The preparation of the interim consolidated financial statements requires management to make estimates and judgments that affect the carrying amounts of certain assets and liabilities, certain amounts reported in net income and other related disclosures.

The most significant assets and liabilities for which we must make estimates and judgments include the allowance for credit losses (ACL); financial instruments measured at fair value; pension and other employee future benefits; impairment of securities and investments in associates and joint ventures; income taxes and deferred tax assets; goodwill and intangible assets; insurance contract liabilities; provisions including legal proceedings and severance charges; transfers of financial assets and consolidation of structured entities. We make judgments in assessing the business model for financial assets as well as whether substantially all risks and rewards have been transferred in respect of transfers of financial assets and whether we control structured entities. If actual results were to differ from the estimates, the impact would be recorded in future periods.

The economic outlook is subject to several risks that could lead to a less favourable outcome for the North American economy. The most immediate threat is from a possible escalation of the trade war, such as a resumption of reciprocal tariffs by the United States on many countries beyond July 2025. In addition, investors could lose confidence in holding U.S. assets, including Treasury securities, risking renewed weakness in financial markets. Canadian businesses face longer-term risks in the event of an unsuccessful renegotiation of the Canada-United States-Mexico Trade Agreement. Other risks stem from the continued conflict in Ukraine and the Middle East, and ongoing diplomatic tensions between Canada and India. The impact on our business, results of operations, reputation, financial performance and condition, including the potential for credit, counterparty and mark-to-market losses, our credit ratings and regulatory capital and liquidity ratios, as well as the impacts to our customers and competitors, will depend on future developments, which remain uncertain. By their very nature, the estimates and judgments we make for the purposes of preparing our consolidated financial statements relate to matters that are inherently uncertain. However, we have detailed policies and internal controls in place that are intended to ensure the judgments made in estimating these amounts are well controlled and independently reviewed, and that our policies are consistently applied from period to period. We believe that our estimates of the value of our assets and liabilities are appropriate as at April 30, 2025.

Allowance for Credit Losses

As detailed further in Note 1 of our annual consolidated financial statements for the year ended October 31, 2024, ACL consists of allowances on impaired loans, which represent estimated losses related to impaired loans in the portfolio provided for but not yet written off, and allowances on performing loans, which is our best estimate of impairment in the existing portfolio for loans that have not yet been individually identified as impaired.

The expected credit losses (ECL) model requires the recognition of credit losses generally based on 12 months of expected losses for performing loans and the recognition of lifetime losses on performing loans that have experienced a significant increase in credit risk since origination.

The determination of a significant increase in credit risk takes into account many different factors and varies by product and risk segment. The bank’s methodology for determining a significant increase in credit risk is based on the change in probability of default between origination, and reporting date, assessed using probability-weighted scenarios as well as certain other criteria, such as 30 days past due and watchlist status. The assessment of a significant increase in credit risk requires experienced credit judgment.

In determining whether there has been a significant increase in credit risk and in calculating the amount of ECL, we must rely on estimates and exercise judgment, based on what we know at the end of the reporting period, regarding matters for which the ultimate outcome is unknown. These judgments include changes in circumstances that may cause future assessments of credit risk to be materially different from current assessments, which could require an increase or a decrease in the ACL. The calculation of ECL includes the explicit incorporation of forecasts of future economic conditions. We have developed models incorporating specific macroeconomic variables that are relevant to each portfolio. Key economic variables for our retail portfolios include our primary operating markets of Canada, the United States and regional markets, where considered significant. Forecasts are developed internally by our Economics group, considering external data and our view of future economic conditions. We exercise experienced credit judgment to incorporate multiple economic forecasts, which are probability-weighted, in the determination of the final ECL. The allowance is sensitive to changes in both economic forecasts and the probability weight assigned to each forecast scenario.

Additional information regarding the ACL is included in Note 3.

BMO Financial Group Second Quarter Report 2025 <br>49

Note 2: Securities

Classification of Securities

The following table summarizes the carrying amounts of the bank’s securities by classification:

(Canadian $ in millions) April 30, 2025 October 31, 2024
Trading securities (1) $ 173,889 $ 168,926
Fair value through profit or loss securities (FVTPL)
FVTPL securities mandatorily measured at fair value 7,141 6,850
FVTPL investment securities held by Insurance subsidiaries designated at fair value 12,788 12,214
Total FVTPL securities 19,929 19,064
Fair value through other comprehensive income (FVOCI) securities (2) 105,938 93,702
Amortized cost securities (3) 100,269 115,188
Total $ 400,025 $ 396,880
(1) Trading securities include interests of $35,823 million as at April 30, 2025 ($21,485 million as at October 31, 2024) in Collateralized Mortgage Obligations (CMO). We receive CMO in return for our sales of Mortgage Backed Securities (MBS) to certain structured vehicles that we do not consolidate. When we subsequently sell these CMO to third parties, but do not transfer substantially all risks and rewards of ownership to the third-party investor, or we maintain an interest in the sold instrument, we retain these CMO on our Consolidated Balance Sheet. Refer to Note 7 of our annual consolidated financial statements for the year ended October 31, 2024 for further discussion on these vehicles.
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(2) Amounts are net of ACL of $5 million ($4 million as at October 31, 2024).
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(3) Amounts are net of ACL of $3 million ($3 million as at October 31, 2024).
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Amortized Cost Securities

The following table summarizes the carrying value and fair value of amortized cost debt securities:

(Canadian $ in millions) April 30, 2025 October 31, 2024
Carrying value Fair value Carrying value Fair value
Issued or guaranteed by:
Canadian federal government $ 1,469 $ 1,458 $ 2,465 $ 2,403
Canadian provincial and municipal governments 5,756 5,754 4,488 4,216
U.S. federal government 44,184 40,603 55,421 51,319
U.S. states, municipalities and agencies 168 170 182 180
Other governments 528 527 681 675
NHA MBS, U.S. agency MBS and CMO (1) 40,105 36,629 42,773 38,619
Corporate debt 8,059 7,858 9,178 9,049
Total $ 100,269 $ 92,999 $ 115,188 $ 106,461
(1) These amounts are either supported by insured mortgages or issued by U.S. agencies and government-sponsored enterprises. NHA refers to the National Housing Act.
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The carrying value of securities that are part of fair value hedging relationships are adjusted for related gains (losses) on hedge contracts.

Unrealized Gains and Losses on FVOCI Securities

The following table summarizes the unrealized gains and losses on FVOCI securities:

(Canadian $ in millions) April 30, 2025 October 31, 2024
Cost or<br>amortized<br>cost Gross<br>unrealized<br>gains Gross<br>unrealized<br>losses Fair value Cost or<br>amortized<br><br>cost Gross<br>unrealized<br>gains Gross<br>unrealized<br>losses Fair value
Issued or guaranteed by:
Canadian federal government $ 43,994 $ 622 $ (6 ) $ 44,610 $ 33,892 $ 303 $ (18 ) $ 34,177
Canadian provincial and municipal governments 5,708 157 (12 ) 5,853 5,939 82 (25 ) 5,996
U.S. federal government 17,324 290 (48 ) 17,566 17,033 100 (168 ) 16,965
U.S. states, municipalities and agencies 5,404 36 (74 ) 5,366 5,125 24 (81 ) 5,068
Other governments 4,609 45 (11 ) 4,643 5,643 20 (7 ) 5,656
NHA MBS, U.S. agency MBS and CMO 23,278 235 (269 ) 23,244 21,570 58 (335 ) 21,293
Corporate debt 4,451 34 (18 ) 4,467 4,391 31 (52 ) 4,370
Corporate equity 161 28 - 189 135 42 - 177
Total $ 104,929 $ 1,447 $ (438 ) $ 105,938 $ 93,728 $ 660 $ (686 ) $ 93,702

Unrealized gains (losses) may be offset by related (losses) gains on hedge contracts.

Interest Income on Debt Securities

The following table presents interest income calculated using the effective interest method:

(Canadian $ in millions) For the three months ended For the six months ended
April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024
FVOCI securities $ 1,079 $ 896 $ 2,176 $ 1,843
Amortized cost securities 661 1,075 1,466 2,029
Total $ 1,740 $ 1,971 $ 3,642 $ 3,872
50<br> BMO Financial Group Second Quarter Report 2025
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Non-Interest Revenue

Net gains and losses from securities, excluding gains and losses on trading securities, have been included in our Consolidated Statement of Income as follows:

(Canadian $ in millions) For the three months ended For the six months ended
April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024
FVTPL securities $ 47 $ 25 $ 96 $ 32
FVOCI securities - net realized gains (1) 20 55 29 63
Impairment on FVOCI and amortized cost securities (1 ) 1 (1 ) (1 )
Securities gains, other than trading $ 66 $ 81 $ 124 $ 94
(1) Gains are net of (losses) on hedge contracts.
--- ---

Interest and dividend income and gains on securities held in our Insurance business are recorded as a component of non-interest revenue, insurance investment results, in our Consolidated Statement of Income as follows:

(Canadian $ in millions) For the three months ended For the six months ended
April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024
Interest and dividend income $ 133 $ 131 $ 269 $ 258
Gains (losses) from securities designated at FVTPL (1) (304 ) (301 ) (23 ) 606
Realized gains from FVOCI securities 2 - 2 -
Total interest and dividend income and gains held in our Insurance business $ (169 ) $ (170 ) $ 248 $ 864
(1) Gains (losses) on these securities may be offset by certain (losses) gains from changes in insurance-related liabilities.
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Note 3: Loans and Allowance for Credit Losses

Allowance for Credit Losses

The ACL recorded in our Consolidated Balance Sheet is maintained at a level we consider adequate to absorb credit-related losses on our loans and other credit instruments. The ACL amounted to $5,616 million as at April 30, 2025 ($4,936 million as at October 31, 2024) of which $4,960 million ($4,356 million as at October 31, 2024) was recorded in loans and $656 million ($580 million as at October 31, 2024) was recorded in other liabilities in our Consolidated Balance Sheet. Changes in gross balances, including originations, maturities, sales, write-offs and repayments in the normal course of operations, impact the ACL.

The following tables show the continuity in the loss allowance by product type for the three and six months ended April 30, 2025 and April 30, 2024. Transfers represent the amount of ECL that moved between stages during the period, for example, moving from a 12-month (Stage 1) to lifetime (Stage 2) ECL measurement basis. Net remeasurements represent the ECL impact due to transfers between stages, as well as changes in economic forecasts and credit quality. Model changes include the ECL impact of new calculation models or methodologies.

BMO Financial Group Second Quarter Report 2025 <br>51
(Canadian in millions)
For the three months ended April 30, 2024
Stage 2 Stage 3<br>(1) Total Stage 1 Stage 2 Stage 3 (1) Total
Loans: Residential mortgages
Balance as at beginning of period 62 $ 191 $ 22 $ 275 $ 66 $ 187 $ 12 $ 265
Transfer to Stage 1 37 (37 ) - - 30 (29 ) (1 ) -
Transfer to Stage 2 (3 ) 7 (4 ) - (20 ) 23 (3 ) -
Transfer to Stage 3 - (10 ) 10 - - (8 ) 8 -
Net remeasurement of loss allowance (32 ) 50 5 23 (30 ) 37 8 15
Loan originations 5 - - 5 2 - - 2
Derecognitions and maturities - (3 ) - (3 ) (1 ) (2 ) - (3 )
Model changes - - - - - - - -
Total PCL (2) 7 7 11 25 (19 ) 21 12 14
Write-offs (3) - - (4 ) (4 ) - - (1 ) (1 )
Recoveries of previous write-offs - - 3 3 - - 1 1
Foreign exchange and other (2 ) (4 ) (14 ) (20 ) - 1 (11 ) (10 )
Balance as at end of period 67 $ 194 $ 18 $ 279 $ 47 $ 209 $ 13 $ 269
Loans: Consumer instalment and other personal
Balance as at beginning of period 194 $ 514 $ 183 $ 891 $ 144 $ 436 $ 171 $ 751
Transfer to Stage 1 74 (70 ) (4 ) - 112 (108 ) (4 ) -
Transfer to Stage 2 (15 ) 28 (13 ) - (10 ) 20 (10 ) -
Transfer to Stage 3 (2 ) (43 ) 45 - (2 ) (36 ) 38 -
Net remeasurement of loss allowance (67 ) 133 108 174 (86 ) 86 45 45
Loan originations 7 - - 7 9 - - 9
Derecognitions and maturities (4 ) (10 ) - (14 ) (3 ) (8 ) - (11 )
Model changes - - - - - - - -
Total PCL (2) (7 ) 38 136 167 20 (46 ) 69 43
Write-offs (3) - - (168 ) (168 ) - - (156 ) (156 )
Recoveries of previous write-offs - - 44 44 - - 98 98
Foreign exchange and other (4 ) (7 ) (16 ) (27 ) 2 4 (13 ) (7 )
Balance as at end of period 183 $ 545 $ 179 $ 907 $ 166 $ 394 $ 169 $ 729
Loans: Credit cards
Balance as at beginning of period 229 $ 492 $ - $ 721 $ 167 $ 343 $ - $ 510
Transfer to Stage 1 58 (58 ) - - 66 (66 ) - -
Transfer to Stage 2 (24 ) 24 - - (14 ) 14 - -
Transfer to Stage 3 (2 ) (112 ) 114 - (1 ) (68 ) 69 -
Net remeasurement of loss allowance (55 ) 189 81 215 (30 ) 163 96 229
Loan originations 18 - - 18 20 - - 20
Derecognitions and maturities (4 ) (10 ) - (14 ) (2 ) (5 ) - (7 )
Model changes - - - - - - - -
Total PCL (2) (9 ) 33 195 219 39 38 165 242
Write-offs (3) - - (230 ) (230 ) - - (179 ) (179 )
Recoveries of previous write-offs - - 56 56 - - 27 27
Foreign exchange and other (3 ) (17 ) (21 ) (41 ) 1 2 (13 ) (10 )
Balance as at end of period 217 $ 508 $ - $ 725 $ 207 $ 383 $ - $ 590
Loans: Business and government
Balance as at beginning of period 860 $ 1,938 $ 753 $ 3,551 $ 913 $ 1,269 $ 520 $ 2,702
Transfer to Stage 1 93 (88 ) (5 ) - 203 (190 ) (13 ) -
Transfer to Stage 2 (59 ) 89 (30 ) - (55 ) 70 (15 ) -
Transfer to Stage 3 (2 ) (82 ) 84 - (2 ) (90 ) 92 -
Net remeasurement of loss allowance 4 318 374 696 (214 ) 314 348 448
Loan originations 68 - - 68 64 - - 64
Derecognitions and maturities (30 ) (99 ) - (129 ) (34 ) (72 ) - (106 )
Model changes - - - - - - - -
Total PCL (2) 74 138 423 635 (38 ) 32 412 406
Write-offs (3) - - (371 ) (371 ) - - (224 ) (224 )
Recoveries of previous write-offs - - 93 93 - - 15 15
Foreign exchange and other (32 ) (54 ) (117 ) (203 ) 9 52 (70 ) (9 )
Balance as at end of period 902 $ 2,022 $ 781 $ 3,705 $ 884 $ 1,353 $ 653 $ 2,890
Total as at end of period 1,369 $ 3,269 $ 978 $ 5,616 $ 1,304 $ 2,339 $ 835 $ 4,478
Comprising: Loans 1,112 $ 2,938 $ 910 $ 4,960 $ 1,085 $ 2,118 $ 811 $ 4,014
Other credit instruments (4) 257 331 68 656 219 221 24 464

All values are in US Dollars.

(1) Includes changes in the allowance for purchased credit impaired (PCI) loans.
(2) Excludes PCL on other assets of $8 million for the three months ended April 30, 2025 ($nil million for the three months ended April 30, 2024).
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(3) Generally, we continue to seek recovery on amounts that were written off during the year, unless the loan is sold, we no longer have the right to collect or we have exhausted all reasonable efforts to collect.
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(4) Other credit instruments, including <br>off-balance<br> sheet items, are recorded in other liabilities in our Consolidated Balance Sheet.
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52<br> BMO Financial Group Second Quarter Report 2025
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(Canadian in millions)
For the six months ended April 30, 2024
Stage 2 Stage 3<br>(1) Total Stage 1 Stage 2 Stage 3 (1) Total
Loans: Residential mortgages
Balance as at beginning of period 56 $ 186 $ 19 $ 261 $ 73 $ 151 $ 10 $ 234
Transfer to Stage 1 82 (81 ) (1 ) - 53 (52 ) (1 ) -
Transfer to Stage 2 (5 ) 14 (9 ) - (22 ) 28 (6 ) -
Transfer to Stage 3 - (18 ) 18 - - (14 ) 14 -
Net remeasurement of loss allowance (74 ) 101 18 45 (63 ) 107 12 56
Loan originations 10 - - 10 10 - - 10
Derecognitions and maturities (1 ) (7 ) - (8 ) (2 ) (5 ) - (7 )
Model changes - - - - (1 ) (5 ) - (6 )
Total PCL (2) 12 9 26 47 (25 ) 59 19 53
Write-offs (3) - - (5 ) (5 ) - - (3 ) (3 )
Recoveries of previous write-offs - - 4 4 - - 3 3
Foreign exchange and other (1 ) (1 ) (26 ) (28 ) (1 ) (1 ) (16 ) (18 )
Balance as at end of period 67 $ 194 $ 18 $ 279 $ 47 $ 209 $ 13 $ 269
Loans: Consumer instalment and other personal
Balance as at beginning of period 197 $ 471 $ 175 $ 843 $ 220 $ 434 $ 152 $ 806
Transfer to Stage 1 147 (137 ) (10 ) - 171 (163 ) (8 ) -
Transfer to Stage 2 (28 ) 53 (25 ) - (21 ) 42 (21 ) -
Transfer to Stage 3 (4 ) (85 ) 89 - (4 ) (65 ) 69 -
Net remeasurement of loss allowance (135 ) 264 246 375 (151 ) 117 202 168
Loan originations 16 - - 16 33 - - 33
Derecognitions and maturities (9 ) (19 ) - (28 ) (7 ) (16 ) (11 ) (34 )
Model changes - - - - 15 46 - 61
Total PCL (2) (13 ) 76 300 363 36 (39 ) 231 228
Write-offs (3) - - (338 ) (338 ) - - (315 ) (315 )
Recoveries of previous write-offs - - 72 72 - - 123 123
Foreign exchange and other (1 ) (2 ) (30 ) (33 ) (90 ) (1 ) (22 ) (113 )
Balance as at end of period 183 $ 545 $ 179 $ 907 $ 166 $ 394 $ 169 $ 729
Loans: Credit cards
Balance as at beginning of period 233 $ 472 $ - $ 705 $ 188 $ 308 $ - $ 496
Transfer to Stage 1 124 (124 ) - - 116 (116 ) - -
Transfer to Stage 2 (46 ) 46 - - (27 ) 27 - -
Transfer to Stage 3 (4 ) (219 ) 223 - (2 ) (116 ) 118 -
Net remeasurement of loss allowance (115 ) 364 160 409 (105 ) 285 162 342
Loan originations 33 - - 33 37 - - 37
Derecognitions and maturities (6 ) (19 ) - (25 ) (4 ) (13 ) - (17 )
Model changes - - - - 4 9 - 13
Total PCL (2) (14 ) 48 383 417 19 76 280 375
Write-offs (3) - - (453 ) (453 ) - - (331 ) (331 )
Recoveries of previous write-offs - - 109 109 - - 75 75
Foreign exchange and other (2 ) (12 ) (39 ) (53 ) - (1 ) (24 ) (25 )
Balance as at end of period 217 $ 508 $ - $ 725 $ 207 $ 383 $ - $ 590
Loans: Business and government
Balance as at beginning of period 892 $ 1,698 $ 537 $ 3,127 $ 1,043 $ 1,155 $ 533 $ 2,731
Transfer to Stage 1 252 (231 ) (21 ) - 387 (372 ) (15 ) -
Transfer to Stage 2 (170 ) 238 (68 ) - (174 ) 192 (18 ) -
Transfer to Stage 3 (4 ) (220 ) 224 - (4 ) (153 ) 157 -
Net remeasurement of loss allowance (143 ) 706 780 1,343 (434 ) 609 488 663
Loan originations 146 - - 146 147 8 - 155
Derecognitions and maturities (68 ) (184 ) - (252 ) (84 ) (164 ) (11 ) (259 )
Model changes - - - - 53 57 - 110
Total PCL (2) 13 309 915 1,237 (109 ) 177 601 669
Write-offs (3) - - (624 ) (624 ) - - (444 ) (444 )
Recoveries of previous write-offs - - 154 154 - - 90 90
Foreign exchange and other (3 ) 15 (201 ) (189 ) (50 ) 21 (127 ) (156 )
Balance as at end of period 902 $ 2,022 $ 781 $ 3,705 $ 884 $ 1,353 $ 653 $ 2,890
Total as at end of period 1,369 $ 3,269 $ 978 $ 5,616 $ 1,304 $ 2,339 $ 835 $ 4,478
Comprising: Loans 1,112 $ 2,938 $ 910 $ 4,960 $ 1,085 $ 2,118 $ 811 $ 4,014
Other credit instruments (4) 257 331 68 656 219 221 24 464

All values are in US Dollars.

(1) Includes changes in the allowance for PCI loans.
(2) Excludes PCL on other assets of $1<br><br>million for the six months ended April 30, 2025 ($7 million for the six months ended April 30, 2024).
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(3) Generally, we continue to seek recovery on amounts that were written off during the year, unless the loan is sold, we no longer have the right to collect or we have exhausted all reasonable efforts to collect.
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(4) Other credit instruments, including <br>off-balance<br> sheet items, are recorded in other liabilities in our Consolidated Balance Sheet.
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BMO Financial Group Second Quarter Report 2025 <br>53
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Credit Risk Exposure

The following table sets out our credit risk exposure for all loans carried at amortized cost, FVOCI or FVTPL as at April 30, 2025 and October 31, 2024. Stage 1 represents performing loans carried with up to a 12-month ECL, Stage 2 represents performing loans carried with a lifetime ECL, and Stage 3 represents loans with a lifetime ECL that are credit impaired.

(Canadian in millions)
For the three months ended October 31, 2024
Stage 2 Stage 3<br>(2) Total Stage 1 (1) Stage 2 Stage 3 (2) Total
Loans: Residential mortgages
Exceptionally low - $ - $ - $ - $ 1 $ - $ - $ 1
Very low 95,091 231 - 95,322 86,730 5,631 - 92,361
Low 56,642 10,143 - 66,785 52,111 15,080 - 67,191
Medium 7,976 4,987 - 12,963 7,402 5,329 - 12,731
High 277 2,897 - 3,174 268 2,622 - 2,890
Not rated (3) 13,771 1,042 - 14,813 14,207 1,042 - 15,249
Impaired - - 757 757 - - 657 657
Gross residential mortgages 173,757 19,300 757 193,814 160,719 29,704 657 191,080
ACL 67 193 8 268 56 185 10 251
Carrying amount 173,690 19,107 749 193,546 160,663 29,519 647 190,829
Loans: Consumer instalment and other personal
Exceptionally low 9,244 8 - 9,252 9,162 145 - 9,307
Very low 20,848 61 - 20,909 20,466 903 - 21,369
Low 27,622 2,581 - 30,203 26,125 4,575 - 30,700
Medium 7,414 5,705 - 13,119 7,405 5,526 - 12,931
High 666 2,155 - 2,821 789 2,017 - 2,806
Not rated (3) 14,339 877 - 15,216 14,522 475 - 14,997
Impaired - - 626 626 - - 577 577
Gross consumer instalment and other personal 80,133 11,387 626 92,146 78,469 13,641 577 92,687
ACL 169 519 172 860 183 447 168 798
Carrying amount 79,964 10,868 454 91,286 78,286 13,194 409 91,889
Loans: Credit cards (4)
Exceptionally low 1,636 - - 1,636 1,660 - - 1,660
Very low 2,130 2 - 2,132 2,166 1 - 2,167
Low 2,025 46 - 2,071 2,110 60 - 2,170
Medium 4,416 790 - 5,206 4,544 824 - 5,368
High 768 1,015 - 1,783 746 922 - 1,668
Not rated (3) 270 123 - 393 430 149 - 579
Impaired - - - - - - - -
Gross credit cards 11,245 1,976 - 13,221 11,656 1,956 - 13,612
ACL 146 447 - 593 161 421 - 582
Carrying amount 11,099 1,529 - 12,628 11,495 1,535 - 13,030
Loans: Business and government (5)
Acceptable
Investment grade 184,974 3,455 - 188,429 191,742 3,437 - 195,179
Sub-investment grade 136,515 27,947 - 164,462 147,713 15,078 - 162,791
Watchlist 153 23,521 - 23,674 238 22,535 - 22,773
Impaired - - 5,356 5,356 - - 4,609 4,609
Gross business and government 321,642 54,923 5,356 381,921 339,693 41,050 4,609 385,352
ACL 730 1,779 730 3,239 743 1,507 475 2,725
Carrying amount 320,912 53,144 4,626 378,682 338,950 39,543 4,134 382,627
Total gross loans and acceptances 586,777 87,586 6,739 681,102 590,537 86,351 5,843 682,731
Total net loans and acceptances 585,665 84,648 5,829 676,142 589,394 83,791 5,190 678,375
Commitments and financial guarantee contracts
Acceptable
Investment grade 195,854 1,042 - 196,896 198,132 787 - 198,919
Sub-investment grade 58,505 15,509 - 74,014 68,177 6,647 - 74,824
Watchlist 9 8,596 - 8,605 59 8,765 - 8,824
Impaired - - 1,801 1,801 - - 1,373 1,373
Gross commitments and financial guarantee contracts 254,368 25,147 1,801 281,316 266,368 16,199 1,373 283,940
ACL 257 331 68 656 235 267 78 580
Carrying amount (6) (7) 254,111 $ 24,816 $ 1,733 $ 280,660 $ 266,133 $ 15,932 $ 1,295 $ 283,360

All values are in US Dollars.

(1) Includes $94 million ($163 million as at October 31, 2024) of residential mortgages and $13,404 million ($12,431 million as at October 31, 2024) of business and government loans that are classified and measured at FVTPL and not subject to ECL.
(2) Includes PCI loans.
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(3) Includes purchased portfolios and certain cases where an internal risk rating is not assigned. Alternative credit risk assessments, rating methodologies, policies and tools are used to manage credit risk for these portfolios.
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(4) Credit card loans are immediately written off when principal or interest payments are 180 days past due, and as a result are not reported as impaired in Stage 3.
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(5) Includes customers’ liability under acceptances.
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(6) Represents the total contractual amounts of undrawn credit facilities and other off-balance sheet exposures, excluding personal lines of credit and credit cards that are unconditionally cancellable at our discretion.
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(7) Certain commercial borrower commitments are conditional and may include recourse to counterparties.
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54<br> BMO Financial Group Second Quarter Report 2025
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Loans Past Due Not Impaired

Loans that are past due but not classified as impaired are loans where our customers have failed to make payments when contractually due but for which we expect the full amount of principal and interest payments to be collected. The following table presents loans that are past due but not classified as impaired as at April 30, 2025 and October 31, 2024. Loans less than 30 days past due are excluded as they are not generally representative of the borrower’s ability to meet their payment obligations.

(Canadian $ in millions) April 30, 2025 October 31, 2024
30 to 89 days 90 days or more<br>(1) Total 30 to 89 days 90 days or more (1) Total
Residential mortgages $ 687 $ 7 $ 694 $ 696 $ 15 $ 711
Credit cards, consumer instalment and other personal 749 189 938 734 173 907
Business and government 411 13 424 689 16 705
Total $ 1,847 $ 209 $ 2,056 $ 2,119 $ 204 $ 2,323
(1) Fully secured loans with amounts between 90 and 180 days past due that we have not classified as impaired totalled $7<br><br>million as at April 30, 2025 ($16 million as at October 31, 2024).
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ECL Sensitivity and Key Economic Variables

The ECL model requires the recognition of credit losses generally based on 12 months of expected losses for performing loans and the recognition of lifetime losses on performing loans that have experienced a significant increase in credit risk since origination.

The allowance for performing loans is sensitive to changes in both economic forecasts and the probability-weight assigned to each forecast scenario. Many of the factors have a high degree of interdependency, although there is no single factor to which loan loss allowances as a whole are sensitive.

The upside scenario as at April 30, 2025 assumes a stronger economic environment than the base case forecast, with lower unemployment rates.

As at April 30, 2025, our base case scenario depicts an economic environment with higher unemployment rates in the near-term, largely in response to the trade war and weaker financial conditions, and a moderate economic recovery over the medium-term as trade policy uncertainty diminishes and interest rates decline further. Our base case forecast as at October 31, 2024 broadly depicted a stronger economic environment.

If we assumed a 100% weight on the base case forecast and included the impact of loan migration by restaging, with other assumptions held constant, including the application of experienced credit judgment, the allowance on performing loans would be approximately $3,350 million as at April 30, 2025 ($2,625 million as at October 31, 2024), compared to the reported allowance for performing loans of $4,638 million ($4,205 million as at October 31, 2024).

As at April 30, 2025, our downside scenario involves a sharp contraction in the Canadian and U.S. economies in the near-term, followed by a relatively slow recovery. Our severe downside scenario depicts an even deeper contraction in the Canadian and U.S. economies than in the downside scenario. The severe downside scenario as at October 31, 2024 broadly depicted a similar economic environment over the projection period. If we assumed a 100 % weight on the severe downside forecast and included the impact of loan migration by restaging, with other assumptions held constant, including the application of experienced credit judgment, the allowance on performing loans would be approximately $ 7,825 million as at April 30, 2025 ($7,500 million as at October 31, 2024), compared to the reported allowance for performing loans of $4,638 million ($4,205 million as at October 31, 2024).

Actual results in a recession will differ as our portfolio will change through time due to migration, growth, changes in geopolitical risks, risk mitigation actions and other factors. In addition, our allowance will reflect the four economic scenarios used in assessing the allowance, with often unequal weightings attached to each scenario, which can change through time.

The following tables show the key economic variables used to estimate the allowance for performing loans forecast over the next 12 months or lifetime measurement period. The variables as at April 30, 2025 include the impact of tariffs and trade policy uncertainty on the economic outlook. While the values disclosed below are national variables, we use regional variables in the underlying models and consider factors impacting particular industries where appropriate.
As at April 30, 2025
Scenarios
All figures are average annual values Upside Base Downside Severe downside
First 12months Remaininghorizon (1) First 12months Remaininghorizon (1) First 12months Remaininghorizon (1) First 12months Remaininghorizon (1)
Real GDP growth rates (2)
Canada
United States
Corporate BBB 10-year spread
Canada
United States
Unemployment rates
Canada
United States
Housing Price Index (2)
Canada (3)
United States (4)

All values are in US Dollars.

(1) The remaining forecast period is two years.
(2) Real gross domestic product (GDP) and housing price index are averages of quarterly year-over-year growth rates.
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(3) In Canada, we use the Housing Price Index Benchmark Composite.
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(4) In the United States, we use the National Case-Shiller House Price Index.
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BMO Financial Group Second Quarter Report 2025 <br>55
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As at October 31, 2024
Scenarios
All figures are average annual values Upside Base Downside Severe downside
First 12 months Remaining horizon (1) First 12 months Remaining horizon (1) First 12 months Remaining horizon (1) First 12 months Remaining horizon (1)
Real GDP growth rates (2)
Canada
United States
Corporate BBB 10-year spread
Canada
United States
Unemployment rates
Canada
United States
Housing Price Index (2)
Canada (3)
United States (4)

All values are in US Dollars.

(1) The remaining forecast period is two years.
(2) Real gross domestic product (GDP) and housing price index are averages of quarterly year-over-year growth rates.
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(3) In Canada, we use the Housing Price Index Benchmark Composite.
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(4) In the United States, we use the National Case-Shiller House Price Index.
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The ECL approach requires the recognition of credit losses generally based on 12 months of expected losses for performing loans (Stage 1) and the recognition of lifetime expected losses for performing loans that have experienced a significant increase in credit risk since origination (Stage 2). Under our current probability-weighted scenarios, if all of our performing loans were in Stage 1, our models would generate an allowance for performing loans of approximately $3,425 million ($3,050 million as at October 31, 2024), compared to the reported allowance for performing loans of $4,638 million ($4,205 million as at October 31, 2024).

Note 4: Deposits and Subordinated Debt

Deposits

Payable on demand
(Canadian $ in millions) Interest bearing Non-interest<br>bearing Payable<br>after notice<br>(1) Payable on a<br>fixed date<br>(2)<br><br>(3) April 30, 2025 October 31, 2024
Amortized cost deposits by:
Banks (4) $ 4,422 $ 1,881 $ 1,627 $ 19,851 $ 27,781 $ 32,546
Business and government 72,600 40,636 202,401 245,118 560,755 575,019
Individuals 4,207 36,111 148,266 129,213 317,797 320,767
Total amortized cost deposits 81,229 78,628 352,294 394,182 906,333 928,332
Deposits at FVTPL - - - 51,934 51,934 54,108
Total (5) $ 81,229 $ 78,628 $ 352,294 $ 446,116 $ 958,267 $ 982,440
Booked in:
Canada $ 70,603 $ 67,839 $ 155,961 $ 314,544 $ 608,947 $ 618,141
United States 10,553 10,788 194,481 86,577 302,399 314,066
Other countries 73 1 1,852 44,995 46,921 50,233
Total $ 81,229 $ 78,628 $ 352,294 $ 446,116 $ 958,267 $ 982,440
(1) Includes $43,388 million of non-interest bearing deposits as at April 30, 2025 ($44,617 million as at October 31, 2024).
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(2) Includes $61,837 million of senior unsecured debt as at April 30, 2025 subject to the Bank Recapitalization (Bail-In) regime ($65,986 million as at October 31, 2024). The Bail-In regime provides certain statutory powers to the Canada Deposit Insurance Corporation, including the ability to convert specified eligible shares and liabilities into common shares if the bank becomes non-viable.
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(3) Deposits totalling $28,685 million as at April 30, 2025 ($29,136 million as at October 31, 2024) can be redeemed early, either fully or partially, by customers without penalty. These are classified as payable on a fixed date, based on their remaining contractual maturities.
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(4) Includes regulated and central banks.
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(5) Includes $503,272 million of deposits denominated in U.S. dollars as at April 30, 2025 ($521,160 million as at October 31, 2024), and $55,220 million of deposits denominated in other foreign currencies ($54,397 million as at October 31, 2024).
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The following table presents deposits payable on a fixed date and greater than one hundred thousand dollars:

(Canadian $ in millions) Canada United States Other Total
As at April 30, 2025 $   265,717 $     76,703 $    44,995 $ 387,415
As at October 31, 2024 285,555 77,313 48,086 410,954

The following table presents the maturity schedule for deposits payable on a fixed date greater than one hundred thousand dollars, which are booked in Canada:

(Canadian $ in millions) Less than 3 months 3 to 6 months 6 to 12 months Over 12 months Total
As at April 30, 2025 $      60,424 $    34,449 $     47,389 $   123,455 $ 265,717
As at October 31, 2024 63,442 33,704 62,674 125,735 285,555
56<br> BMO Financial Group Second Quarter Report 2025
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Subordinated Debt

On May 6, 2025, we announced our intention to redeem all of our $1,250 million 2.077% Series J Medium-Term Notes (NVCC) Second Tranche, at a redemption price of 100% of the principal amount plus accrued and unpaid interest to, but excluding, the redemption date on June 17, 2025.

On March 5, 2025, we issued $1,250 million of 4.077 % Series N Medium-Term Notes First Tranche (NVCC) through our Canadian Medium-Term Note Program. The notes will reset to a floating rate on March 5, 2030.

Note 5: Insurance

Insurance Results

Insurance service results in our Consolidated Statement of Income are as follows:

(Canadian $ in millions) For the three months ended For the six months ended
April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024
Insurance revenue $ 474 $ 434 $ 944 $ 867
Insurance service expenses (339 ) (305 ) (690 ) (602 )
Net expenses from reinsurance contracts (12 ) (30 ) (40 ) (67 )
Insurance service results $ 123 $ 99 $ 214 $ 198

Insurance investment results in our Consolidated Statement of Income are as follows:

(Canadian $ in millions) For the three months ended For the six months ended
April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024
Investment return $ (258 ) $ (215 ) $ 301 $ 1,068
Insurance finance (expense) from insurance and reinsurance contracts held 261 213 (212 ) (1,012 )
Movement in investment contract liabilities (7 ) 27 (33 ) (40 )
Insurance investment results $ (4 ) $ 25 $ 56 $ 16

Insurance Contract Liabilities

Insurance contract liabilities by remaining coverage and incurred claims comprise the following:

(Canadian $ in millions) For the three months ended April 30, 2025 For the three months ended April 30, 2024
Liabilities for<br>remaining coverage Liabilities for<br>incurred claims Total Liabilities for<br>remaining coverage Liabilities for<br>incurred claims Total
Insurance contract liabilities, beginning of period $ 17,814 $ 218 $ 18,032 $ 15,032 $ 225 $ 15,257
Insurance service results (763 ) 651 (112 ) (398 ) 290 (108 )
Net finance expenses from insurance contracts (249 ) - (249 ) (195 ) - (195 )
Total cash flows 828 (675 ) 153 437 (303 ) 134
Other changes in the net carrying amount of the insurance contract (1 ) (7 ) (8 ) 1 2 3
Insurance contract liabilities, end of period (1) $ 17,629 $ 187 $ 17,816 $ 14,877 $ 214 $ 15,091
(Canadian $ in millions) For the six months ended April 30, 2025 For the six months ended April 30, 2024
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Liabilities for<br>remaining coverage Liabilities for<br>incurred claims Total Liabilities for<br>remaining coverage Liabilities for<br>incurred claims Total
Insurance contract liabilities, beginning of period $ 17,047 $ 201 $ 17,248 $ 13,114 $ 235 $ 13,349
Insurance service results (1,186 ) 972 (214 ) (783 ) 553 (230 )
Net finance expenses from insurance contracts 282 - 282 1,072 - 1,072
Total cash flows 1,486 (983 ) 503 1,474 (573 ) 901
Other changes in the net carrying amount of the insurance contract - (3 ) (3 ) - (1 ) (1 )
Insurance contract liabilities, end of period (1) $ 17,629 $ 187 $ 17,816 $ 14,877 $ 214 $ 15,091
(1) The liabilities for incurred claims relating to insurance contracts in our creditor and reinsurance business were $<br>104<br> million as at April 30, 2025 and $115 million as at April 30, 2024.
--- ---

Contractual service margin (CSM) from contracts issued was $13 million and $31 million for the three and six months ended April 30, 2025, respectively ($20 million and $60 million for the three and six months ended April 30, 2024, respectively). Total CSM as at April 30, 2025 was $1,543 million ($1,550 million as at October 31, 2024). This excludes the impact of any reinsurance held, which is not significant to the bank. Onerous contract losses for the three and six months ended April 30, 2025 and 2024 were not material.

We use the following rates for discounting fulfilment cash flows for our insurance contract liabilities, which are based on a risk-free yield adjusted for an illiquidity premium that reflects the liquidity characteristics of the liabilities:

Portfolio duration: April 30, 2025 October 31, 2024
1 year 3.47% 4.16%
3 years 3.72% 4.17%
5 years 4.04% 4.35%
10 years 4.72% 4.82%
20 years 5.25% 5.15%
30 years 5.09% 4.98%
Ultimate 5.00% 5.00%
BMO Financial Group Second Quarter Report 2025 <br>57
---

Note 6: Equity

Preferred and Common Shares Outstanding and Other Equity Instruments

(1)

(Canadian $ in millions, except as noted) April 30, 2025 October 31, 2024
Number<br>of shares Amount Dividends declared<br>per share<br>(2) Number<br>of shares Amount Dividends declared<br>per share (2) Convertible into
Preferred Shares - Classified as Equity
Class B – Series 31 - $ - $ - 12,000,000 $ 300 $ 0.96 Class B - Series 32 (3) (4)
Class B – Series 33 8,000,000 200 0.38 8,000,000 200 0.76 Class B - Series 34 (3) (4)
Class B – Series 44 16,000,000 400 0.85 16,000,000 400 1.70 Class B - Series 45 (3) (4)
Class B – Series 50 500,000 500 36.87 500,000 500 73.73 Not convertible (4)
Class B – Series 52 650,000 650 35.29 650,000 650 70.57 Not convertible (4)
Preferred Shares - Classified as Equity $ 1,750 $ 2,050
Recourse to
Other Equity Instruments
4.800% Additional Tier 1 Capital Notes (AT1 Notes) $ 658 $ 658 - (4) (5) (7)
4.300% Limited Recourse Capital Notes, Series 1 (Series 1 LRCNs) 1,250 1,250 Preferred Shares Series 48 (4) (6) (7)
5.625% Limited Recourse Capital Notes, Series 2 (Series 2 LRCNs) 750 750 Preferred Shares Series 49 (4) (6) (7)
7.325% Limited Recourse Capital Notes, Series 3 (Series 3 LRCNs) 1,000 1,000 Preferred Shares Series 51 (4) (6) (7)
7.700% Limited Recourse Capital Notes, Series 4 (Series 4 LRCNs) 1,356 1,356 Preferred Shares Series 53 (4) (6) (7)
7.300% Limited Recourse Capital Notes, Series 5 (Series 5 LRCNs) 1,023 1,023 Preferred Shares Series 54 (4) (6) (7)
Other Equity Instruments 6,037 6,037
Preferred Shares and Other Equity Instruments 7,787 8,087
Common Shares 722,070,767 $ 23,730 $ 3.18 729,529,876 $ 23,921 $ 6.12 (8) (9) (10)
(1) For additional information refer to Notes 17 and 21 of our annual consolidated financial statements for the year ended October 31, 2024.
--- ---
(2) Represents year-to-date dividends declared per share as at reporting date. Non-cumulative dividends on preferred shares are payable quarterly as and when declared by the Board of Directors, except for Class B – Series 50 and 52 preferred share dividends, which are payable semi-annually.
--- ---
(3) If converted, the holders have the option to convert back to the original preferred shares on subsequent redemption dates, subject to certain conditions.
--- ---
(4) The instruments issued include a NVCC provision, which is necessary for the preferred shares, AT1 Notes and by virtue of the recourse to the Preferred Shares Series 48, Preferred Shares Series 49, Preferred Shares Series 51, Preferred Shares Series 53 and Preferred Shares Series 54 (collectively, the LRCN Preferred Shares) for Series 1, Series 2, Series 3, Series 4 and Series 5 LRCNs (collectively, the LRCNs), respectively, to qualify as regulatory capital under Basel III. As such, they are convertible into a variable number of our common shares if OSFI announces that the bank is, or is about to become, non-viable or if a federal or provincial government in Canada publicly announces that the bank has accepted or agreed to accept a capital injection, or equivalent support, to avoid non-viability. In such an event, each preferred share, including the LRCN Preferred Shares and AT1 Notes, is convertible into common shares pursuant to an automatic conversion formula and 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 based on the volume weighted average trading price of our common shares on the TSX. The number of common shares issued is determined by dividing the value of the preferred share or other equity instrument, including declared and unpaid dividends, by the conversion price and then applying the multiplier.
--- ---
(5) The notes had an initial interest rate of 4.800% and reset on August 25, 2024 to 6.709%.
--- ---
(6) Non-deferrable interest is payable semi-annually on the Series 1, Series 2 and Series 3 LRCNs and quarterly on the Series 4 and Series 5 LRCNs at the bank’s discretion. Non-payment of interest will result in a recourse event, with the noteholders’ sole remedy being the holders’ proportionate share of trust assets comprised of the LRCN Preferred Shares, each series of which is issued concurrently with the corresponding LRCNs and are eliminated on consolidation. In such an event, the delivery of the trust assets will represent the full and complete extinguishment of our obligations under the LRCNs. In circumstances where the LRCN Preferred Shares are converted into common shares of the bank under the NVCC provision, the LRCNs would be redeemed and the noteholders’ sole remedy would be their proportionate share of trust assets, then comprised of common shares of the bank received by the trust on conversion.
--- ---
(7) The rates represent the annual interest rate percentage applicable to the notes issued as at the reporting date.
--- ---
(8) The stock options issued under the Stock Option Plan are convertible into 6,585,406 common shares as at April 30, 2025 (6,554,492 common shares as at October 31, 2024) of which 3,080,854 are exercisable as at April 30, 2025 (2,856,460 as at October 31, 2024).
--- ---
(9) During the three and six months ended April 30, 2025, we issued nil common shares, under the Shareholder Dividend Reinvestment and Share Purchase Plan (3,732,736 and 7,790,724 common shares during the three and six months ended April 30, 2024) and we issued 211,309 and 685,719 common shares, under the Stock Option Plan (88,707 and 479,703 common shares during the three and six months ended April 30, 2024).
--- ---
(10) Common shares are net of nil treasury shares as at April 30, 2025 (55,172 treasury shares as at October 31, 2024).
--- ---

Other Equity Instruments

The AT1 Notes and LRCNs are compound financial instruments that have both equity and liability features. On the date of issuance, we assigned an insignificant value to the liability components of both instruments and, as a result, the full amount of proceeds has been classified as equity and forms part of our additional Tier 1 NVCC. Distributions on the AT1 Notes and LRCNs are recognized as a reduction in equity when payable. The AT1 Notes and LRCNs are subordinate to the claims of the depositors and certain other creditors in right of payment.

Preferred Shares

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

Common Shares

On January 17, 2025, we announced a normal course issuer bid (NCIB) to purchase up to 20 million of our common shares for cancellation commencing January 22, 2025, and ending no later than January 21, 2026. The timing and amount of purchases under the NCIB are determined by management, based on factors such as market conditions and capital levels. During the three months ended April 30, 2025, we purchased for cancellation 7.0 million

common shares under the NCIB, at an average price of $137.52 per share for a total amount of $981 million, including tax. During the six months ended April 30, 2025, we purchased for cancellation

8.2 million common shares under the NCIB, at an average price of $138.53 per share for a total amount of $1,157 million, including tax.

58<br> BMO Financial Group Second Quarter Report 2025

Shareholder Dividend Reinvestment and Share Purchase Plan

Until further notice, common shares under the Shareholder Dividend Reinvestment and Share Purchase Plan will be purchased on the open market without a discount.

Non-Controlling Interest

Non-controlling interest in subsidiaries, relating to our acquisition of Bank of the West, was $38 million as at April 30, 2025 ($36 million as at October 31, 2024).

Note 7: Fair Value Measurements

Fair Value of Financial Instruments Not Carried at Fair Value on the Balance Sheet

Set out in the following table are the amounts that would be reported if all financial instruments not currently carried at fair value were reported at their fair values. Refer to Note 18 of our annual consolidated financial statements for the year ended October 31, 2024 for further discussion on the determination of fair value.

(Canadian $ in millions) April 30, 2025 October 31, 2024
Carrying value Fair value Carrying value Fair value
Securities<br>(1)
Amortized cost $    100,269 $ 92,999 $ 115,188 $ 106,461
Loans<br>(1) (2)
Residential mortgages 193,452 191,924 190,666 188,848
Consumer instalment and other personal 91,286 91,300 91,889 91,513
Credit cards 12,628 12,628 13,030 13,030
Business and government 364,826 365,215 369,776 370,101
662,192 661,067 665,361 663,492
Deposits<br>(3) 906,333 907,269 928,332 928,689
Securitization and structured entities’ liabilities<br>(4) 21,256 21,162 21,850 21,653
Other liabilities<br>(5) 2,985 2,778 2,929 2,669
Subordinated debt 9,740 9,854 8,377 8,543

This table excludes financial instruments with a carrying value approximating fair value, such as cash and cash equivalents, interest bearing deposits with banks, securities borrowed or purchased under resale agreements, certain other assets, certain other liabilities and securities lent or sold under repurchase agreements.

(1) Carrying value is net of ACL.
(2) Excludes $94 million of residential mortgages classified as FVTPL, $13,404 million of business and government loans classified as FVTPL and $14 million of business and government loans classified as FVOCI ($163 million, $12,431 million and $61 million, respectively, as at October 31, 2024).
--- ---
(3) Excludes $46,909 million of structured note liabilities, $1,994 million of money market deposits, $1,173 million of embedded options related to structured deposits carried at amortized cost and $1,858 million of metals deposits measured at fair value ($45,222 million, $6,032 million, $1,047 million and $1,807 million, respectively, as at October 31, 2024).
--- ---
(4) Excludes $30,680 million of securitization and structured entities’ liabilities classified as FVTPL ($18,314 million as at October 31, 2024).
--- ---
(5) Other liabilities include certain investment contract liabilities in our insurance business measured at amortized cost, as well as certain other liabilities of subsidiaries.
--- ---

Fair Value Hierarchy

We use a fair value hierarchy to categorize assets and liabilities carried at fair value according to the inputs we use in valuation techniques to measure fair value.

Valuation Techniques and Significant Inputs

We determine the fair value of assets and liabilities using quoted prices in active markets (Level 1) when these are available. When quoted prices in active markets are not available, we determine the fair value of financial assets and liabilities using models such as discounted cash flows with observable market data for inputs, such as yields or broker quotes and other third-party vendor quotes (Level 2). Fair value may also be determined using models where significant market inputs are not observable due to inactive markets or minimal market activity (Level 3). We maximize the use of observable market inputs to the extent possible.

Our Level 2 trading securities are primarily valued using discounted cash flow models with observable spreads or broker quotes. The fair value of Level 2 FVOCI securities is determined using discounted cash flow models with observable spreads or third-party vendor quotes. Level 2 structured note liabilities are valued using models with observable market information. Level 2 derivative assets and liabilities are valued using industry standard models and observable market information.

BMO Financial Group Second Quarter Report 2025 <br>59

The extent of our use of actively quoted market prices (L eve l 1), internal models using observable market information as inputs (Level 2) and models using one or more significant unobservable inputs (Level 3) in the valuation of securities, loans classified as FVTPL and FVOCI, other assets, fair value liabilities, derivative assets and derivative liabilities is presented in the following table:

(Canadian in millions) April 30, 2025 October 31, 2024
Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Trading Securities
Issued or guaranteed by:
Canadian federal government 362 $ 9,126 $ - $ 9,488 $ 1,272 $ 8,764 $ - $ 10,036
Canadian provincial and municipal governments - 7,359 - 7,359 - 7,585 - 7,585
U.S. federal government 5,311 22,731 - 28,042 2,688 21,560 - 24,248
U.S. states, municipalities and agencies - 1,096 - 1,096 - 565 - 565
Other governments 54 4,967 - 5,021 92 3,757 - 3,849
NHA MBS, and U.S. agency MBS and CMO - 55,950 5 55,955 - 40,995 - 40,995
Corporate debt - 10,986 - 10,986 - 10,172 - 10,172
Trading loans - 4,622 - 4,622 - 5,493 - 5,493
Corporate equity 50,784 536 - 51,320 65,559 420 4 65,983
56,511 117,373 5 173,889 69,611 99,311 4 168,926
FVTPL Securities
Issued or guaranteed by:
Canadian federal government - 956 - 956 166 237 - 403
Canadian provincial and municipal governments - 1,588 - 1,588 - 1,578 - 1,578
U.S. federal government - 1,482 - 1,482 - 1,527 - 1,527
Other governments - - - - - 25 - 25
NHA MBS, and U.S. agency MBS and CMO - 22 - 22 - 21 - 21
Corporate debt - 8,882 36 8,918 - 8,745 35 8,780
Corporate equity 920 786 5,257 6,963 921 910 4,899 6,730
920 13,716 5,293 19,929 1,087 13,043 4,934 19,064
FVOCI Securities
Issued or guaranteed by:
Canadian federal government - 44,610 - 44,610 3,212 30,965 - 34,177
Canadian provincial and municipal governments - 5,853 - 5,853 - 5,996 - 5,996
U.S. federal government 359 17,207 - 17,566 25 16,940 - 16,965
U.S. states, municipalities and agencies - 5,366 - 5,366 - 5,068 - 5,068
Other governments - 4,643 - 4,643 - 5,656 - 5,656
NHA MBS, and U.S. agency MBS and CMO - 23,244 - 23,244 - 21,293 - 21,293
Corporate debt - 4,467 - 4,467 - 4,370 - 4,370
Corporate equity - - 189 189 - - 177 177
359 105,390 189 105,938 3,237 90,288 177 93,702
Loans
Residential mortgages - 94 - 94 - 163 - 163
Business and government loans - 13,036 382 13,418 - 12,190 302 12,492
- 13,130 382 13,512 - 12,353 302 12,655
Other Assets (1) 13,173 - 1,435 14,608 11,236 - 1,717 12,953
Fair Value Liabilities (2)
Deposits (3) - 51,934 - 51,934 - 54,108 - 54,108
Securities sold but not yet purchased 15,518 37,904 - 53,422 10,631 24,399 - 35,030
Other liabilities (4) 1,854 31,467 - 33,321 1,754 19,110 - 20,864
17,372 121,305 - 138,677 12,385 97,617 - 110,002
Derivative Assets
Interest rate contracts 50 9,167 - 9,217 36 9,851 - 9,887
Foreign exchange contracts 21 29,526 - 29,547 4 21,258 10 21,272
Commodity contracts 273 1,472 9 1,754 169 1,656 2 1,827
Equity contracts 329 8,863 14 9,206 539 13,718 - 14,257
Credit default swaps - 1 1 2 - 10 - 10
673 49,029 24 49,726 748 46,493 12 47,253
Derivative Liabilities
Interest rate contracts 37 10,423 - 10,460 32 10,811 - 10,843
Foreign exchange contracts - 29,150 - 29,150 - 19,955 - 19,955
Commodity contracts 116 1,688 - 1,804 96 1,721 4 1,821
Equity contracts 102 16,210 1 16,313 75 25,596 2 25,673
Credit default swaps - - - - - 10 1 11
255 57,471 1 57,727 203 58,093 7 58,303

All values are in US Dollars.

(1) Other assets include precious metals, segregated fund assets and investment properties in our insurance business, carbon credits, certain receivables and other items measured at fair value.
(2) Interest expense for liabilities carried at fair value is $1,060 million and $1,780 million for the three and six months ended April 30, 2025, respectively ($806 million and $1,335 million for the three and six months ended April 30, 2024). Interest expense for liabilities carried at amortized cost is $9,497 million and $20,002 million for the three and six months ended April 30, 2025, respectively ($10,843 million and $21,447 million for the three and six months ended April 30, 2024).
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(3) Deposits include structured note liabilities, money market and metals deposits designated at FVTPL and certain embedded options related to structured deposits carried at amortized cost.
--- ---
(4) Other liabilities include certain investment contract liabilities and segregated fund liabilities in our insurance business, as well as certain securitization and structured entities’ liabilities measured at FVTPL.
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Certain comparative figures have been reclassified to conform with the current period’s presentation.

60<br> BMO Financial Group Second Quarter Report 2025

Quantitative Information about Level 3 Fair Value Measurements

The table below presents the fair values of our significant Level 3 financial instruments measured at fair value on a recurring basis, the valuation techniques used to determine their fair values and the value ranges of significant unobservable inputs used in the valuations. We have not applied any other reasonably possible alternative assumptions to the significant Level 3 categories of private equity investments, as the net asset values are provided by the investment or fund managers.

(Canadian in millions, except as noted) April 30, 2025
Range of input values<br>(1)
Fair value<br>of assets Valuation techniques Significant<br><br>unobservable inputs Low High
Private equity $ 5,446 Net asset value Net asset value na na
EV/EBITDA Multiple 4 28
Investment properties 1,358 Income approach Capitalization rate 2% 8%

All values are in US Dollars.

(1) The low and high input values represent the lowest and highest actual level of inputs used to value a group of financial instruments in a particular product category. These input ranges do not reflect the level of input uncertainty, but are affected by the specific underlying instruments within each product category. The input ranges will therefore vary from period to period based on the characteristics of the underlying instruments held at each balance sheet date.

na – not applicable

Significant Transfers

Our policy is to record transfers of assets and liabilities between fair value hierarchy levels at their fair values as at the end of each reporting period, consistent with the date of the determination of fair value. Transfers between Level 1 and Level 2 are dependent on the recency of issuance and availability of quoted market prices in the active market. There were no significant transfers between Level 1 and Level 2 during the three and six months ended April 30, 2025 and 2024.

Changes in Level 3 Fair Value Measurements

The tables below present a reconciliation of all changes in Level 3 financial instruments for the three and six months ended April 30, 2025 and 2024, including realized and unrealized gains (losses) included in earnings and other comprehensive income as well as transfers into and out of Level 3. Transfers from Level 2 into Level 3 were due to an increase in unobservable market inputs used in pricing the securities. Transfers out of Level 3 into Level 2 were due to an increase in observable market inputs used in pricing the securities.

BMO Financial Group Second Quarter Report 2025 <br>61
Change in fair value Movements Transfers
For the three months ended April 30, 2025<br><br>(Canadian $ in millions) Fair Value<br>as at January 31,<br>2025 Included in<br>earnings Included<br>in other<br>comprehensive<br>income<br>(1) Issuances/<br>   Purchases Sales Maturities/<br>Settlement Transfers<br>into<br>Level 3 Transfers<br>out of<br>Level 3 Fair Value<br>as at April 30,<br>2025 Change in<br>unrealized gains<br>(losses) recorded<br>in income<br>for instruments<br>still held<br>(2)
Trading Securities
NHA MBS and U.S. agency MBS and CMO $ - $ - $ - $ 5 $ - $ - $ - $ - $ 5 $ -
Corporate equity 6 - - - - - - (6 ) - -
Total trading securities 6 - - 5 - - - (6 ) 5 -
FVTPL Securities
Corporate debt 33 2 - 1 - - - - 36 2
Corporate equity 5,202 (120 ) (110 ) 342 (57 ) - - - 5,257 (68 )
Total FVTPL securities 5,235 (118 ) (110 ) 343 (57 ) - - - 5,293 (66 )
FVOCI Securities
Corporate equity 163 - - 26 - - - - 189 na
Total FVOCI securities 163 - - 26 - - - - 189 na
Business and Government Loans 321 (11 ) (7 ) 50 - - 29 - 382 (11 )
Other Assets 1,841 (1 ) - 7 (7 ) (405 ) - - 1,435 (1 )
Derivative Assets
Foreign exchange contracts 42 - - - - (42 ) - - - -
Commodity contracts 5 4 - - - - - - 9 4
Equity contracts 13 (2 ) - - - - 3 - 14 (2 )
Credit default swaps - - - - - - 1 - 1 -
Total derivative assets 60 2 - - - (42 ) 4 - 24 2
Other Liabilities - - - - - - - - - -
Derivative Liabilities
Commodity contracts - - - - - - - - - -
Equity contracts 2 - - - - - 1 (2 ) 1 -
Credit default swaps 1 - - - - (1 ) - - - -
Total derivative liabilities 3 - - - - (1 ) 1 (2 ) 1 -
Change in fair value Movements Transfers
For the six months ended April 30, 2025<br><br>(Canadian $ in millions) Fair Value<br>as at October 31,<br>2024 Included in<br>earnings Included<br>in other<br>comprehensive<br>income<br>(1) Issuances/<br>Purchases Sales Maturities/<br>Settlement Transfers<br>into<br>Level 3 Transfers<br>out of<br>Level 3 Fair Value<br>as at April 30,<br>2025 Change in<br>unrealized gains<br>(losses) recorded<br>in income<br>for instruments<br>still held<br>(2)
Trading Securities
NHA MBS and U.S. agency MBS and CMO $ - $ - $ - $ 5 $ - $ - $ - $ - $ 5 $ -
Corporate equity 4 - - 2 - - - (6 ) - -
Total trading securities 4 - - 7 - - - (6 ) 5 -
FVTPL Securities
Corporate debt 35 1 - 2 - - - (2 ) 36 1
Corporate equity 4,899 (96 ) (21 ) 614 (139 ) - - - 5,257 16
Total FVTPL securities 4,934 (95 ) (21 ) 616 (139 ) - - (2 ) 5,293 17
FVOCI Securities
Corporate equity 177 - (15 ) 27 - - - - 189 na
Total FVOCI securities 177 - (15 ) 27 - - - - 189 na
Business and Government Loans 302 2 (1 ) 56 - (6 ) 29 - 382 2
Other Assets 1,717 (56 ) - 201 (7 ) (420 ) - - 1,435 (52 )
Derivative Assets
Foreign exchange contracts 10 - - 32 - (42 ) - - - -
Commodity contracts 2 7 - - - - - - 9 7
Equity contracts - (2 ) - - - - 16 - 14 (2 )
Credit default swaps - - - - - - 1 - 1 -
Total derivative assets 12 5 - 32 - (42 ) 17 - 24 5
Other Liabilities - - - - - - - - - -
Derivative Liabilities
Commodity contracts 4 (4 ) - - - - - - - (4 )
Equity contracts 2 - - - - - 1 (2 ) 1 -
Credit default swaps 1 - - - - (1 ) - - - -
Total derivative liabilities 7 (4 ) - - - (1 ) 1 (2 ) 1 (4 )
(1) Foreign exchange translation on assets and liabilities held by foreign operations is included in other comprehensive income, net foreign operations.
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(2) Changes in unrealized gains (losses) on Trading and FVTPL securities still held on April 30, 2025 are included in earnings for the period.
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Unrealized gains (losses) recognized on Level 3 financial instruments may be offset by (losses) gains on economic hedge contracts.

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

na – not applicable

62<br> BMO Financial Group Second Quarter Report 2025
Change in fair value Movements Transfers
For the three months ended April 30, 2024<br><br>(Canadian $ in millions) Fair Value<br><br>as at January 31,<br>2024 Included in<br>earnings Included<br>in other<br>comprehensive<br>income<br>(1) Issuances/<br>   Purchases Sales Maturities/<br>Settlement Transfers<br>into<br>Level 3 Transfers<br>out of<br>Level 3 Fair Value<br>as at April 30,<br>2024 Change in<br>unrealized gains<br>(losses) recorded<br>in income<br>for instruments<br>still held<br>(2)
Trading Securities
NHA MBS and U.S. agency MBS and CMO $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Corporate equity - - - - - - - - - -
Total trading securities - - - - - - - - - -
FVTPL Securities
Corporate debt 24 (6 ) - 17 - - - - 35 (6 )
Corporate equity 4,319 15 49 206 (88 ) - - - 4,501 66
Total FVTPL securities 4,343 9 49 223 (88 ) - - - 4,536 60
FVOCI Securities
Corporate equity 173 - - 1 - - - - 174 na
Total FVOCI securities 173 - - 1 - - - - 174 na
Business and Government Loans 196 - 5 13 - (59 ) 198 - 353 -
Other Assets 1,671 (56 ) - 12 - (5 ) - - 1,622 (65 )
Derivative Assets
Foreign exchange contracts - - - - - - - - - -
Commodity contracts 7 (7 ) - - - - - - - (7 )
Equity contracts 7 - - - - - 6 - 13 -
Credit default swaps - - - - - - - - - -
Total derivative assets 14 (7 ) - - - - 6 - 13 (7 )
Other Liabilities 13 - - - - (13 ) - - - -
Derivative Liabilities
Commodity contracts 1 1 - - - - - - 2 1
Equity contracts - - - - - - 1 - 1 -
Credit default swaps 1 (1 ) - - - - 1 - 1 (1 )
Total derivative liabilities 2 - - - - - 2 - 4 -
Change in fair value Movements Transfers
For the six months ended April 30, 2024<br><br>(Canadian $ in millions) Fair Value<br><br>as at October 31,<br>2023 Included in<br> earnings Included<br> in other<br> comprehensive<br> income<br>(1) Issuances/<br> Purchases Sales Maturities/<br> Settlement Transfers<br> into<br> Level 3 Transfers<br> out of<br> Level 3 Fair Value<br><br>as at April 30,<br>2024 Change in<br> unrealized gains<br> (losses) recorded<br> in income<br> for instruments<br> still held<br>(2)
Trading Securities
NHA MBS and U.S. agency MBS and CMO $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Corporate equity 37 - - - - - - (37 ) - -
Total trading securities 37 - - - - - - (37 ) - -
FVTPL Securities
Corporate debt 27 (9 ) - 17 - - - - 35 (9 )
Corporate equity 4,208 (92 ) (10 ) 522 (126 ) - - (1 ) 4,501 17
Total FVTPL securities 4,235 (101 ) (10 ) 539 (126 ) - - (1 ) 4,536 8
FVOCI Securities
Corporate equity 160 - 11 3 - - - - 174 na
Total FVOCI securities 160 - 11 3 - - - - 174 na
Business and Government Loans 186 - (1 ) 46 - (76 ) 198 - 353 -
Other Assets 1,723 (17 ) - 16 (21 ) (79 ) - - 1,622 -
Derivative Assets
Foreign exchange contracts - - - - - - - - - -
Commodity contracts 5 (5 ) - - - - - - - (5 )
Equity contracts - - - - - - 13 - 13 -
Credit default swaps - - - - - - - - - -
Total derivative assets 5 (5 ) - - - - 13 - 13 (5 )
Other Liabilities 5 - - 8 - (13 ) - - - -
Derivative Liabilities
Commodity contracts 1 1 - - - - - - 2 1
Equity contracts 8 - - - - - 1 (8 ) 1 -
Credit default swaps 2 (2 ) - - - - 1 - 1 (1 )
Total derivative liabilities 11 (1 ) - - - - 2 (8 ) 4 -
(1) Foreign exchange translation on assets and liabilities held by foreign operations is included in other comprehensive income, net foreign operations.
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(2) Changes in unrealized gains (losses) on Trading and FVTPL securities still held on April 30, 2024 are included in earnings for the period.
--- ---

Unrealized gains (losses) recognized on Level 3 financial instruments may be offset by (losses) gains on economic hedge contracts.

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

na – not applicable

BMO Financial Group Second Quarter Report 2025 <br>63

Note 8: Capital Management

Our objective is to maintain a strong capital position in a cost-effective structure that: is appropriate given our target regulatory capital ratios and our internal assessment of required economic capital; underpins our operating groups’ business strategies and considers the market environment; supports depositor, investor and regulator confidence, while building long-term shareholder value; and is consistent with our target credit ratings.

As at April 30, 2025, we met OSFI’s target capital ratio requirements, which include a 2.5% Capital Conservation Buffer, a 1.0% Common Equity Surcharge for Domestic Systemically Important Banks (D-SIBs), a Countercyclical Buffer and a 3.5% Domestic Stability Buffer (DSB) applicable to D-SIBs. On December 17, 2024, OSFI announced that the DSB will remain at 3.5%. Our capital position as at April 30, 2025 is further detailed in the Capital Management section of our interim Management’s Discussion and Analysis.

Regulatory Capital and Total Loss Absorbing Capacity Measures, Risk-Weighted Assets and Leverage Exposures

(1)
(Canadian $ in millions, except as noted) April 30, 2025 October 31, 2024
CET1 Capital
Tier 1 Capital
Total Capital
TLAC
Risk-Weighted Assets
Leverage Exposures
CET1 Ratio
Tier 1 Capital Ratio
Total Capital Ratio
TLAC Ratio
Leverage Ratio
TLAC Leverage Ratio

All values are in US Dollars.

(1) Calculated in accordance with OSFI’s Capital Adequacy Requirements Guideline, Leverage Requirements Guideline and Total Loss Absorbing Capacity (TLAC) Guideline.

Note 9: Employee Compensation

Stock Options

We did not grant any stock options during the three months ended April 30, 2025 or 2024. During the six months ended April 30, 2025, we granted a total of 716,633 stock options (1,113,853 stock options during the six months ended April 30, 2024) with a weighted-average fair value of $18.46 per option ($15.33 per option for the six months ended April 30, 2024).

To determine the fair value of the stock option tranches (i.e. the portion that vests each year) on the grant date, the following ranges of values were used for each option pricing assumption:
For stock options granted during the six months ended April 30, 2024
Expected dividend yield
Expected share price volatility
Risk-free rate of return
Expected period until exercise (in years)
Exercise price ()

All values are in US Dollars.

Changes to the input assumptions can result in different fair value estimates.

Pension and Other Employee Future Benefit Expenses

Pension and other employee future benefit expenses are determined as follows:
(Canadian in millions)
Other employee future benefit plans
For the three months ended April 30, 2024 April 30, 2025 April 30, 2024
Current service cost
Net interest (income) expense (1) ) )
Impact of plan amendments
Administrative expenses
Benefits expense
Government pension plans expense (2)
Defined contribution expense
Total pension and other employee future benefit expensesrecognized in our Consolidated Statement of Income

All values are in US Dollars.

(1) Net interest (income) expense is increased by $nil million for pension benefit plans and $3 million for other employee future benefit plans for the three months ended April 30, 2025 ($nil million for pension benefit plans and $1 million for other employee future benefit plans for the three months ended April 30, 2024) as a result of assets written down through other comprehensive income due to the asset ceiling.
(2) Includes Canada Pension Plan, Quebec Pension Plan and U.S. Federal Insurance Contribution Act.
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64<br> BMO Financial Group Second Quarter Report 2025
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(Canadian in millions)
Other employee future benefit plans
For the six months ended April 30, 2024 April 30, 2025 April 30, 2024
Current service cost 89 $ 76 $ 3 $ 3
Net interest (income) expense (1) (26 ) (30 ) 19 20
Impact of plan amendments (19 ) - - (84 )
Administrative expenses 7 6 - -
Benefits expense 51 52 22 (61 )
Government pension plans expense (2) 214 209 - -
Defined contribution expense 178 169 - -
Total pension and other employee future benefit expenses (recovery) recognized in our Consolidated Statement of Income 443 $ 430 $ 22 $ (61 )

All values are in US Dollars.

(1) Net interest (income) expense is increased by $nil million for pension benefit plans and $3 million for other employee future benefit plans for the six months ended April 30, 2025 ($nil million for pension benefit plans and $1 million for other employee future benefit plans for the six months ended April 30, 2024) as a result of assets written down through other comprehensive income due to the asset ceiling.
(2) Includes Canada Pension Plan, Quebec Pension Plan and U.S. Federal Insurance Contribution Act.
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We amended one of our U.S. pension plans in the first quarter of 2025, resulting in a $19 million benefit that was recognized as a reduction in employee compensation expense.

Note 10: Earnings Per Share

Basic earnings per share is calculated by dividing net income attributable to bank shareholders, after deducting dividends payable on preferred shares and distributions payable on other equity instruments, by the daily average number of fully paid common shares outstanding throughout the period.

Diluted earnings per share is calculated in the same manner, with further adjustments made to reflect the dilutive impact of instruments convertible into our common shares.

The following tables present our basic and diluted earnings per share:

Basic Earnings Per Common Share

(Canadian $ in millions, except as noted) For the three months ended For the six months ended
April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024
Net income attributable to bank shareholders $ 1,960 $ 1,862 $ 4,094 $ 3,152
Dividends on preferred shares and distributions on other equity instruments (142 ) (143 ) (207 ) (183 )
Net income available to common shareholders $ 1,818 $ 1,719 $ 3,887 $ 2,969
Weighted-average number of common shares outstanding (in thousands) 725,402 728,348 727,518 726,024
Basic earnings per common share (Canadian $) $ 2.51 $ 2.36 $ 5.34 $ 4.09

Diluted Earnings Per Common Share

(Canadian $ in millions, except as noted) For the three months ended For the six months ended
April 30, 2025 April 30, 2024 April 30, 2025 April 30, 2024
Net income available to common shareholders $ 1,818 $ 1,719 $ 3,887 $ 2,969
Weighted-average number of common shares outstanding (in thousands) 725,402 728,348 727,518 726,024
Dilutive impact of stock options (1)
Stock options potentially exercisable 5,893 4,691 6,072 3,707
Common shares potentially repurchased (4,855 ) (3,760 ) (4,989 ) (2,824 )
Weighted-average number of diluted common shares outstanding (in thousands) 726,440 729,279 728,601 726,907
Diluted earnings per common share (Canadian $) $ 2.50 $ 2.36 $ 5.34 $ 4.08
(1) The dilutive effect of stock options was calculated using the treasury stock method. In computing diluted earnings per share, we excluded average stock options outstanding of<br>716,633 and 594,569 with a weighted-average exercise price of $150.60 and $151.95 for the three and six months ended April 30, 2025, respectively (2,198,642 and 3,140,711 with a weighted-average exercise price of $132.66 and $131.39 for the three and six months ended April 30, 2024, respectively), as the average share price for the periods did not exceed the exercise price.
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Note 11: Income Taxes

Tax Assessments

Canadian tax authorities have reassessed us for additional income tax and interest in an amount of approximately $1,465 million in respect of certain 2011-2018 Canadian corporate dividends. These reassessments denied certain dividend deductions on the basis that the dividends were received as part of a “dividend rental arrangement.” In general, the tax rules raised by the Canadian tax authorities were prospectively addressed in the 2015 and 2018 Canadian federal budgets. We filed Notices of Appeal with the Tax Court of Canada and the matter is in litigation. We remain of the view that our tax filing positions were appropriate and intend to challenge all reassessments. However, if such challenges are unsuccessful, the additional expense would negatively impact our net income.

BMO Financial Group Second Quarter Report 2025 <br>65

Global Minimum Tax

In May 2023, the IASB issued an amendment to IAS 12

Income Taxes

(IAS 12). The amendment addresses concerns around accounting for the global minimum top-up tax as outlined in the two-pillar plan for international tax reform developed by members of the Organisation for Economic Co-operation and Deve

lop

ment/G20 Inclusive Framework on Base Erosion and Profit Shifting. The amendment to IAS 12 includes temporary mandatory relief from recognizing and disclosing deferred taxes related to the top-up tax. We have applied the temporary mandatory relief related to deferred taxes in jurisdictions in which we operate where the top-up tax legislation has been enacted, or substantively enacted. The global minimum tax rules are effective for our fiscal year beginning November 1, 2024, and as a result, our effective tax rate increased by approximately 60 basis points and 65 basis points for the three and six months ended April 30, 2025.

Note 12: Operating Segmentation

Operating Groups

We conduct our business through three operating groups, each of which has a distinct mandate. Our operating groups are Personal and Commercial Banking (P&C) (comprised of Canadian Personal and Commercial Banking (Canadian P&C) and U.S. Personal and Commercial Banking (U.S. P&C)), BMO Wealth Management (BMO WM) and BMO Capital Markets (BMO CM), along with a Corporate Services unit.

For additional information refer to Note 26 of our annual consolidated financial statements for the year ended October 31, 2024.

Our results and average assets, grouped by operating segment, are as follows:

(Canadian in millions)
For the three months ended April 30, 2025 U.S. P&C BMO WM BMO CM Corporate<br> Services<br>(1) Total
Net interest income (2) 2,359 $ 2,122 $ 369 $ 474 $ (227 ) $ 5,097
Non-interest revenue 615 406 1,159 1,305 97 3,582
Total Revenue 2,974 2,528 1,528 1,779 (130 ) 8,679
Provision for credit losses on impaired loans 476 247 2 28 12 765
Provision for (recovery of) credit losses on performing loans 132 87 6 73 (9 ) 289
Total provision for credit losses 608 334 8 101 3 1,054
Depreciation and amortization 157 243 65 79 - 544
Non-interest expense 1,132 1,263 976 1,021 83 4,475
Income (loss) before taxes and non-controlling interest in subsidiaries 1,077 688 479 578 (216 ) 2,606
Provision for (recovery of) income taxes 295 142 118 147 (58 ) 644
Reported net income (loss) 782 $ 546 $ 361 $ 431 $ (158 ) $ 1,962
Non-controlling interest in subsidiaries - $ 5 $ - $ - $ (3 ) $ 2
Net income (loss) attributable to bank shareholders 782 $ 541 $ 361 $ 431 $ (155 ) $ 1,960
Average assets (3) 343,799 $ 243,601 $ 71,033 $ 564,034 $ 281,216 $ 1,503,683
For the three months ended April 30, 2024 U.S. P&C BMO WM BMO CM Corporate<br> Services (1) Total
Net interest income (2) 2,154 $ 1,994 $ 322 $ 358 $ (313 ) $ 4,515
Non-interest revenue 665 395 1,071 1,303 25 3,459
Total Revenue 2,819 2,389 1,393 1,661 (288 ) 7,974
Provision for credit losses on impaired loans 295 288 6 61 8 658
Provision for (recovery of) credit losses on performing loans 103 (7 ) (13 ) (9 ) (27 ) 47
Total provision for (recovery of) credit losses 398 281 (7 ) 52 (19 ) 705
Depreciation and amortization 145 238 67 74 - 524
Non-interest expense 1,071 1,203 911 954 181 4,320
Income (loss) before taxes and non-controlling interest in subsidiaries 1,205 667 422 581 (450 ) 2,425
Provision for (recovery of) income taxes 333 124 102 122 (122 ) 559
Reported net income (loss) 872 $ 543 $ 320 $ 459 $ (328 ) $ 1,866
Non-controlling interest in subsidiaries - $ 4 $ - $ - $ - $ 4
Net income (loss) attributable to bank shareholders 872 $ 539 $ 320 $ 459 $ (328 ) $ 1,862
Average assets (3) 323,710 $ 236,135 $ 63,673 $ 455,916 $ 271,005 $ 1,350,439

All values are in US Dollars.

(1) Corporate Services includes Technology and Operations.
(2) Operating groups report on a taxable equivalent basis (teb). Revenue and the provision for income taxes are increased on tax-exempt securities to an equivalent before-tax basis to facilitate comparisons of income between taxable and tax-exempt sources. The offset to the groups’ teb adjustments is reflected in Corporate Services revenue and provision for income taxes.
--- ---
(3) Included within average assets are average earning assets, which are comprised of deposits with other banks, deposits at central banks, securities borrowed or purchased under resale agreements, loans and securities. Total average earning assets for three months ended April 30, 2025 are $1,308,774 million, including $341,885 million for Canadian P&C, $223,071 million for U.S. P&C, and $743,818 million for all other operating segments including Corporate Services (for three months ended April 30, 2024<br><br>- Total: $1,216,579 million, Canadian P&C: $312,320 million, U.S. P&C: $215,614 million and all other operating segments: $688,645 million).
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66<br> BMO Financial Group Second Quarter Report 2025
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(Canadian in millions)
For the six months ended April 30, 2025 U.S. P&C BMO WM BMO CM Corporate<br><br>Services<br>(1) Total
Net interest income (2) 4,744 $ 4,327 $ 724 $ 1,173 $ (473 ) $ 10,495
Non-interest revenue 1,295 877 2,390 2,679 209 7,450
Total Revenue 6,039 5,204 3,114 3,852 (264 ) 17,945
Provision for credit losses on impaired loans 967 559 3 63 32 1,624
Provision for (recovery of) credit losses on performing loans 183 189 5 84 (20 ) 441
Total provision for credit losses 1,150 748 8 147 12 2,065
Depreciation and amortization 310 483 132 164 - 1,089
Non-interest expense 2,269 2,561 2,004 2,191 332 9,357
Income (loss) before taxes and non-controlling interest in subsidiaries 2,310 1,412 970 1,350 (608 ) 5,434
Provision for (recovery of) income taxes 634 286 240 332 (158 ) 1,334
Reported net income (loss) 1,676 $ 1,126 $ 730 $ 1,018 $ (450 ) $ 4,100
Non-controlling interest in subsidiaries - $ 5 $ - $ - $ 1 $ 6
Net income (loss) attributable to bank shareholders 1,676 $ 1,121 $ 730 $ 1,018 $ (451 ) $ 4,094
Average assets (3) 342,623 $ 245,950 $ 70,511 $ 571,605 $ 282,057 $ 1,512,746
For the six months ended April 30, 2024 U.S. P&C BMO WM BMO CM Corporate<br> Services (1) Total
Net interest income (2) 4,295 $ 4,052 $ 647 $ 863 $ (621 ) $ 9,236
Non-interest revenue 1,302 791 2,074 2,387 (144 ) 6,410
Total Revenue 5,597 4,843 2,721 3,250 (765 ) 15,646
Provision for credit losses on impaired loans 533 471 9 72 46 1,131
Provision for (recovery of) credit losses on performing loans 160 100 (3 ) (42 ) (14 ) 201
Total provision for credit losses 693 571 6 30 32 1,332
Depreciation and amortization 288 484 133 151 - 1,056
Non-interest expense 2,138 2,423 1,842 1,993 781 9,177
Income (loss) before taxes and non-controlling interest in subsidiaries 2,478 1,365 740 1,076 (1,578 ) 4,081
Provision for (recovery of) income taxes 685 262 180 224 (428 ) 923
Reported net income (loss) 1,793 $ 1,103 $ 560 $ 852 $ (1,150 ) $ 3,158
Non-controlling interest in subsidiaries - $ 4 $ - $ - $ 2 $ 6
Net income (loss) attributable to bank shareholders 1,793 $ 1,099 $ 560 $ 852 $ (1,152 ) $ 3,152
Average assets (3) 322,349 $ 234,219 $ 63,093 $ 446,962 $ 269,435 $ 1,336,058

All values are in US Dollars.

(1) Corporate Services includes Technology and Operations.
(2) Operating groups report on a taxable equivalent basis (teb). Revenue and the provision for income taxes are increased on tax-exempt securities to an equivalent before-tax basis to facilitate comparisons of income between taxable and tax-exempt sources. The offset to the groups’ teb adjustments is reflected in Corporate Services revenue and provision for income taxes.
--- ---
(3) Included within average assets are average earning assets, which are comprised of deposits with other banks, deposits at central banks, securities borrowed or purchased under resale agreements, loans and securities. Total average earning assets for six months ended April 30, 2025 are $1,314,247 million, including $340,584 million for Canadian P&C, $225,177 million for U.S. P&C, and $748,486 million for all other operating segments including Corporate Services (for six months ended April 30, 2024 - Total: $1,205,372 million, Canadian P&C: $309,883 million, U.S. P&C: $213,955 million and all other operating segments: $681,534 million).
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BMO Financial Group Second Quarter Report 2025 <br>67
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EX-99.3

Exhibit 99.3

CONSOLIDATED CAPITALIZATION OF BANK OF MONTREAL

The following table sets forth the consolidated capitalization of the Bank as at April 30, 2025.

As atApril 30, 2025
(in millions of Canadian<br>dollars)
Subordinated Debt 9,740
Total Equity
Preferred Shares^(1)^ and Other Equity Instruments^(2)^ 7,787
Common Shares 23,730
Contributed Surplus 367
Retained Earnings 47,158
Accumulated Other Comprehensive Income 6,753
Total Shareholders’ Equity 85,795
Non-controlling Interest in Subsidiaries 38
Total Equity 85,833
Total Capitalization 95,573

Notes:

(1) Preferred Shares classified under Total Equity consist of Class B Preferred Shares Series 33, 44, 50 and 52. For<br>more information on the classification of Preferred Shares, please refer to Note 6 of the unaudited interim consolidated financial statements of Bank of Montreal for the six months ended April 30, 2025.
(2) The Other Equity Instruments described under Total Equity consist of Additional Tier 1 Capital Notes and Limited Recourse<br>Capital Notes, Series 1, 2, 3, 4 and 5. Please refer to Note 6 of the unaudited interim consolidated financial statements of Bank of Montreal for the six months ended April 30, 2025.
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