BMO Financial Group Reports Fourth Quarter and Fiscal 2018 Results (4)

(Canadian $ in millions, except as noted) Q4-2018 Q3-2018 Q4-2017 Fiscal 2018 Fiscal 2017 --- Reported Results Revenue 5,922 5,820 5,655 23,037 22,260 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) (390) (269) (573) (1,352) (1,538) --- Revenue, net of CCPB 5,532 5,551 5,082 21,685 20,722 Total provision for credit losses (175) (186) (202) (662) (746) Non-interest expense (3,224) (3,386) (3,375) (13,613) (13,330) --- Income before income taxes 2,133 1,979 1,505 7,410 6,646 Provision for income taxes (438) (443) (278) (1,960) (1,296) --- Net Income 1,695 1,536 1,227 5,450 5,350 EPS ($) 2.57 2.31 1.81 8.17 7.92 === Adjusting Items (Pre- tax) (1) Acquisition integration costs (2) (18) (8) (24) (34) (87) Amortization of acquisition-related intangible assets (3) (31) (28) (34) (116) (149) Restructuring costs (4) (59) (260) (59) Decrease in the collective allowance for credit losses (5) 76 Benefit from the remeasurement of an employee benefit liability (6) 277 277 --- Adjusting items included in reported pre-tax income 228 (36) (117) (133) (219) === Adjusting Items (After tax) (1) Acquisition integration costs (2) (13) (7) (15) (25) (55) Amortization of acquisition-related intangible assets (3) (24) (22) (26) (90) (116) Restructuring costs (4) (41) (192) (41) Decrease in the collective allowance for credit losses (5) 54 Benefit from the remeasurement of an employee benefit liability (6) 203 203 U.S. net deferred tax asset revaluation (7) (425) --- Adjusting items included in reported net income after tax 166 (29) (82) (529) (158) Impact on EPS ($) 0.25 (0.05) (0.13) (0.82) (0.24) === Adjusted Results Revenue 5,922 5,820 5,655 23,037 22,260 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) (390) (269) (573) (1,352) (1,538) --- Revenue, net of CCPB 5,532 5,551 5,082 21,685 20,722 Total provision for credit losses (175) (186) (202) (662) (822) Non-interest expense (3,452) (3,350) (3,258) (13,480) (13,035) --- Income before income taxes 1,905 2,015 1,622 7,543 6,865 Provision for income taxes (376) (450) (313) (1,564) (1,357) --- Net income 1,529 1,565 1,309 5,979 5,508 EPS ($) 2.32 2.36 1.94 8.99 8.16 ===

(1) Adjusting items are generally included in Corporate Services, with the exception of the amortization of acquisition-related intangible assets and certain acquisition integration costs, which are charged to the operating groups. (2) Acquisition integration costs related to BMO Transportation Finance are charged to Corporate Services, since the acquisition impacts both Canadian and U.S. P&C businesses. KGS-Alpha acquisition integration costs are reported in BMO Capital Markets. Acquisition integration costs are recorded in non-interest expense. (3) These expenses were charged to the non-interest expense of the operating groups. Before-tax and after-tax amounts for each operating group are provided on pages 14, 15, 16, 18 and 20. (4) In Q2-18, we recorded a restructuring charge, primarily related to severance costs, as a result of an ongoing bank-wide initiative to simplify how we work, drive increased efficiency and invest in technology to move our business forward. A restructuring charge in Q4-17 was also taken as we continued to accelerate the use of technology to enhance customer experience and focused on driving operational efficiencies. Restructuring costs are included in non-interest expense in Corporate Services. (5) Adjustments to the collective allowance for credit losses are recorded in Corporate Services provision for credit losses in 2017 and prior years. (6) The current quarter included a $277 million pre-tax benefit from the remeasurement of an employee benefit liability as a result of an amendment to our other employee future benefits plan for certain employees that was announced in the fourth quarter of 2018. This amount has been included in Corporate Services in non-interest expense. (7) Charge related to the revaluation of our U.S. net deferred tax asset as a result of the enactment of the U.S. Tax Cuts and Jobs Act. For more information see the Critical Accounting Estimates - Income Taxes and Deferred Tax Assets section on page 119 of BMO's 2018 Annual MD&A for further details. Certain comparative figures have been reclassified to conform with the current year's presentation. Adjusted results and measures in this table are non-GAAP amounts or non-GAAP measures.

Caution Regarding Forward-Looking StatementsBank of Montreal's public communications often include written or oral forward-looking statements. Statements of this type are included in this document, and may be included in other filings with Canadian securities regulators or the U.S. Securities and Exchange Commission, or in other communications. All such statements are made pursuant to the "safe harbor" provisions of, and are intended to be forward-looking statements under, the United States Private Securities Litigation Reform Act of 1995 and any applicable Canadian securities legislation. Forward-looking statements in this document may include, but are not limited to, statements with respect to our objectives and priorities for fiscal 2019 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, the regulatory environment in which we operate and the results of or outlook for our operations or for the Canadian, U.S. and international economies, and include statements of our management. Forward-looking statements are typically identified by words such as "will", "would", "should", "believe", "expect", "anticipate", "project", "intend", "estimate", "plan", "goal", "target", "may" and "could".

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

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