The Toronto-based bank said Tuesday that growth in Canadian loans and its wealth management division helped deliver a strong quarterly net income of $1.09 billion, which was about one per cent higher than a year earlier.
But several analysts say there is a notably different story beneath the headline figures.
"When you start digging into the numbers it looked pretty disappointing to me," said Tom Lewandowski, a financial services analyst with Edward Jones in St. Louis, who said BMO's results fell "well below" his expectations.
He pointed to weakness in the bank's U.S. operations as one key area that fell short.
Adjusted net income for the quarter fell two per cent from a year ago to $1.102 billion. That was well ahead of estimates but included a one-time $121-million gain that one analyst said would put off investors.
BMO's overall adjusted earnings including the one-time gain amounted to $1.64 per share, down one cent from a year earlier but ahead of analyst estimates of $1.58 per share.
But Barclay's analyst John Aiken wrote that the one-time gain was worth "roughly 19 cents per share and would take BMO's core number to $1.45, well below consensus."
Bank of Montreal shares were down $3.28 to close at $70.25 on the Toronto Stock Exchange. However, that's still up significantly from a year ago when BMO closed on Dec. 3, 2012, at $59.29.
The entire banking sector on the TSX, including BMO, is up about 20 per cent so far this year — providing investors with an incentive to sell at least some of their shares to lock in profits.
Breaking down the results issued Tuesday, BMO's U.S. personal and commercial banking arm posted a 28 per cent decline in net income to US$103 million, while net income at its capital markets segment dropped 27 per cent to $229 million.
By comparison, the bank's Canadian personal and commercial banking arm recorded $469 million of net income in the fourth quarter, an increase of $27 million or six per cent from a year earlier.
Net income from wealth management services in the fourth quarter nearly doubled to $312 million, the bank said.
Its provision for credit losses in the quarter was reduced to $189 million from $192 million a year earlier, while the 2013 provision was $589 million, down 23 per cent from $765 million in fiscal 2012.
BMO quietly reduced its staff count in the fourth quarter, cutting its workforce by the equivalent of nearly 1,000 positions. Chief operating officer Frank Techar said the bank made the cuts to reduce expenses and make overall operations more efficient.
For the full year, BMO's net profit showed a one per cent gain over the previous year, hitting a record $4.2 billion.
Adjusted net income was $4.276 billion, up five per cent from the previous year.
"This performance reflects a well executed growth strategy and benefits of a diversified business model," chief executive Bill Downe said.
"Canadian personal and commercial banking had record earnings this year. We delivered robust volume growth contributing to notably stronger revenue and income in the second half."
Bank of Montreal also announced that its quarterly dividend will be increased by two cents to 76 cents per common share — a move that had been widely expected.
It also announced that its share buyback program will be renewed when it expires.