Bank of Montreal (BMO) is scheduled to report fourth quarter results on Nov 24. After posting 3 earnings surprises in a row, fourth quarter estimates are trending higher by a penny in the last week, rising to 90 cents.

Bank of Montreal, which provides personal, commercial and corporate banking services in North America, reported record revenues in the third quarter. The company saw strong growth in its personal and commercial banking segment. P&C Canada saw net income rise 13% compared with a year ago. Commercial banking saw revenue grow 17%.

Like other banks, Bank of Montreal also saw big gains from its trading segment, which saw net income rise 30% from the year ago period. Corporate banking also improved.

Weakness was still evident in the P&C U.S. segment where revenues fell 0.5% from a year ago. While there was improvement due to gains on the sale of mortgages, there were higher levels of impaired loans.

The company is still allotting for credit losses of $417 million, comprised of $357 million of specific provisions and $60 million in general allowance which is down from the year ago period which saw $484 million allotted, including $434 million in specific provisions.

Value Fundamentals

Bank of Montreal still has attractive value characteristics. It is trading with a forward P/E of 13.04 and has a price-to-book ratio of 1.53. It is rewarding shareholders with a hefty dividend, currently yielding 5.40%. The company is now a Zacks #1 Rank (buy) stock.

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