Bank of Montreal’s (BMO) expansion south of the border appears to be paying off as its U.S. operations boosted the bank’s third-quarter (Q3 2018) results that topped analyst expectations.

Contributions from the U.S. segment increased to 28% of the bank’s total earnings this year, said CEO Darryl White — up from 24% in 2017.

“This performance is a testament to the strong reputation and trust we have within the U.S. market,” he said during a conference call with analysts Tuesday afternoon.

BMO, like some of its big bank peers, has been on the hunt for growth opportunities amid a robust economic climate south of the border. White has noted an investment outflow from Canada to the U.S. in the wake of tax reforms and other factors in the U.S.

Most recently, the bank announced a deal to acquire New York-based KGS-Alpha Capital Markets in May for an undisclosed amount. The fixed income broker-dealer specializes in the institutional investor market for U.S. mortgage-backed and asset-backed securities.

BMO’s U.S. business contributed $1.43 billion to the bottom line in 2017, and the total U.S. segment has delivered compound annual income growth of 12% over the past two years.

The bank earned $1.54 billion for the quarter ended July 31, up from $1.39 billion in the same quarter a year ago.

The profit amounted to $2.31 per share for the quarter, up from $2.05 per share in the same quarter last year.

On an adjusted basis, BMO said it earned $1.57 billion or $2.36 per share in its most recent quarter, up from $1.37 billion or $2.03 per share a year ago.

Analysts had expected the bank to earned $2.26 per share for the quarter, according to Thomson Reuters Eikon.

The bank saw a particularly good contribution from its U.S. segment and from its commercial businesses on both sides of the border, White said.

Canadian personal and commercial banking earned $642 million for the quarter, up $29 million from a year ago.

Meanwhile, U.S. personal and commercial banking earned $364 million, up $96 million from the same quarter last year.

The bank’s wealth management arm earned $291 million, up $22 million from a year ago, while its capital markets group earned $301 million, up by $20 million.

BMO’s corporate services division lost $62 million for the quarter compared with a net loss of $44 million in the prior year.

The bank’s total provision for credit losses —or money set aside to cover bad loans — was $186 million, an increase of $60 million from the prior year.

BMO also announced Tuesday that Craig Broderick, former chief risk officer of the Goldman Sachs Group Inc., has joined its board of directors.

Broderick retired from Goldman Sachs in January.