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Higher Volumes and Lower Costs Contribute to Improved Results

Year-over-Year Operating Highlights:

• Net income of $602 million, up $81 million or 15%
• EPS¹ of $1.16 and cash EPS² of $1.19, both up 16%
• ROE of 19.4%, up from 18.3%
• A $43 million specific provision for credit losses, with no reduction in the general allowance, compared with a $55 million specific provision and a $40 million reduction in the general allowance
• Revenue² growth of 2.9% (5.1% excluding the impact of the weaker U.S. dollar)
• Expense reduction of 1.8% (up 0.3% excluding the impact of the weaker U.S. dollar)
• Productivity ratio² improves 299 basis points to 62.9% and cash productivity ratio² improves 288 basis points to 61.9%
• Tier 1 Capital Ratio of 9.72%, compared with 9.65% a year ago and 9.81% at the end of 2004

Other Highlights

• Net income up $51 million or 9.5% from the fourth quarter of 2004
• Revenue growth of 7.0% from the fourth quarter (8.3% excluding the impact of the weaker U.S. dollar)
• Expense growth of 2.7% from the fourth quarter (3.9% excluding the impact of the weaker U.S. dollar)
• Specific provision for credit losses now anticipated to be $350 million or less in fiscal 2005, versus the 2005 target of $400 million or less
• Announced a $0.02 or 4.5% increase in common share dividends to $0.46 per quarter

1 All Earnings per Share (EPS) measures in this release refer to diluted EPS unless specified otherwise.

2 The adjustments that change results under generally accepted accounting principles (GAAP) to cash results and GAAP revenue and income taxes to a taxable equivalent basis (teb) are outlined in the Non-GAAP Measures section in the Financial Performance Review, where all non-GAAP measures and their closest GAAP counterparts are outlined. Revenues and income taxes in the financial statements are stated in accordance with GAAP. Otherwise, all revenues and income taxes and measures that include revenues or income taxes in this document are stated on a taxable equivalent basis.

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. As such, in this document, the names BMO and BMO Financial Group mean Bank of Montreal.

FIRST QUARTER 2005 MANAGEMENT'S DISCUSSION AND ANALYSIS (MD&A)
MD&A commentary is as of February 22, 2005. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from financial statements prepared in accordance with Canadian generally accepted accounting principles (GAAP).

(1) These are non-GAAP amounts or non-GAAP measures. Please see footnote 2 to the preceding operating highlights and the non-GAAP Measures section in the Financial Performance Review, which outline the use of non-GAAP measures in this document.

(2) Excluding the reduction in the general allowance for credit losses, Corporate Support net income increased $4 million from a year ago and declined $8 million from the fourth quarter.

Toronto, February 22, 2005 — BMO Financial Group reported net income of $602 million for the first quarter ended January 31, 2005, up 15% from a year ago.

PERFORMANCE OVERVIEW
Net income was $602 million for the first quarter of 2005, up $81 million from $521 million a year ago. Earnings per share (EPS) of $1.16 rose 16%. Cash EPS, which reflects the add-back of the after-tax amortization of intangible assets, also rose 16%, to $1.19.

"The year is off to a good start and we are well positioned to achieve all of our financial targets for fiscal 2005," said Tony Comper, President and Chief Executive Officer, BMO Financial Group. "We again improved our productivity, our top priority for 2005, and each of our client operating groups posted higher earnings than a year ago."

Net income in the first quarter of 2005 benefited from certain items, recorded primarily in Investment Banking Group:

• The $32 million ($21 million after tax) impact of a change in accounting for investments of merchant banking subsidiaries that increased investment securities gains; and
• A $32 million recovery of prior years' income taxes.

Net income in the first quarter of 2004 also benefited from the net effect of certain items, recorded in Corporate Support:

• The one-time impact of a change in accounting for mortgage loan prepayment fees that increased net interest income by $42 million ($27 million after tax);
• The one-time impact of a change in accounting for gains and losses on Bank of Montreal shares held by BMO subsidiaries that reduced non-interest trading revenue $26 million ($16 million after tax);
• A reduction in the general allowance for credit losses that reduced the provision for credit losses by $40 million ($26 million after tax); and
• An increase to future income tax liabilities related to U.S. real estate that increased the provision for income taxes by $19 million.

Excluding the $53 million (or $0.10 per share) after tax impact of the two items benefiting the current quarter and the $18 million (or $0.03 per share) after tax net benefit of the four items affecting results of a year ago, net income was $549 million, up $46 million or 9.0% from a year ago.  On a similarly adjusted basis, EPS was $1.06 and cash EPS was $1.09, both up 9%.

The $46 million increase was attributable to volume growth in Personal and Commercial Client Group, higher full-service investing and mutual fund fees in Private Client Group, improved trading revenue, and cost management in all client operating groups. These improvements were partially offset by lower net investment securities gains on the remaining investment portfolios and the impact of reduced spreads in Investment Banking Group.

Revenue¹ increased $68 million or 2.9% from a year ago to $2,439 million, as Personal and Commercial Client Group revenue rose $85 million or 7.1%, driven by strong volume growth. Private Client Group revenue increased $11 million or 2.2%, while Investment Banking Group revenue fell $12 million or 1.6%, as lower net interest income offset improved trading revenue. Net investment securities gains were down slightly from a year ago, despite the $32 million impact of the change in accounting for merchant banking investments. The weaker U.S. dollar lowered revenue growth by $52 million or 2.2 percentage points overall and reduced the pace of revenue growth in each of the client operating groups. The net impact of accounting changes in the first quarter of last year increased revenue in that period by $16 million.

Net interest margin¹ was lower in each of the operating groups, but was relatively unchanged in personal and commercial banking in Canada. BMO's overall net interest margin for the first quarter of 2005 declined by 24 basis points from the prior year, to 1.64%. All but 6 basis points of the decline relates to the combination of: a change in accounting for variable interest entities (VIEs) that resulted in the inclusion of an average $20.6 billion of VIE assets in BMO's balance sheet in 2005 (12 basis point impact); and the adjustment to mortgage prepayment fees that increased revenue of a year ago (6 basis point impact). Net interest margin declined 18 basis points relative to the fourth quarter, due primarily to the inclusion of VIE assets, while net interest margin in personal and commercial banking in Canada was slightly higher. Net interest margins are detailed in the revenue section of the Financial Performance Review.

Results included $43 million of specific provisions for credit losses, compared with specific provisions of $55 million in the first quarter of 2004. Results of a year ago also included a $40 million reduction in the general allowance for credit losses, resulting in an overall $28 million increase in the provision in the current quarter.

Non-interest expense totalled $1,533 million, a decrease of $28 million or 1.8% from the first quarter of 2004. Excluding the impact of the weaker U.S. dollar, expenses were essentially unchanged from a year ago, due primarily to effective cost management. The non-interest expense-to-revenue ratio¹ (productivity ratio) was 62.9% in the first quarter of 2005, compared with 65.9% a year ago. The cash productivity ratio improved 288 basis points to 61.9%.

Relative to the fourth quarter, net income rose $51 million or 9.5%, driven by improved revenues in each of our client operating groups. This quarter's results benefited from the $53 million after-tax impact of the two items mentioned previously, while the fourth quarter benefited from a $50 million ($33 million after tax) reduction in the general allowance.

"We remain focused on our key corporate priorities for 2005," added Mr. Comper. "This focus contributed to our broadly-based improvement in results relative to the preceding quarter and permits us to again announce an increase in dividends to common shareholders."

Revenue for the quarter increased $160 million or 7.0% from the fourth quarter. Revenue rose in all operating groups, with Personal and Commercial Client Group benefiting from higher volumes and Private Client Group benefiting from increased client trading activity in the full-service and direct investing businesses. Investment Banking Group earned significantly improved trading and commission revenue, reflecting higher client volumes, and higher origination activity. Net investment securities gains were unchanged from the fourth quarter, despite the $32 million impact of the current quarter's accounting change to record investments of merchant banking subsidiaries at fair value. The fourth quarter was affected by a $14 million charge to credit card fees, while the weaker U.S. dollar lowered revenue growth from the fourth quarter by approximately $29 million or 1.3 percentage points.

This quarter's specific provision for credit losses of $43 million compared with a specific provision of $37 million and a $50 million reduction of the general allowance in the fourth quarter, resulting in an overall $56 million increase in the provision.

Non-interest expense increased $40 million or 2.7% from the fourth quarter. Costs declined in Personal and Commercial Client Group, but were up in Private Client Group and Investment Banking Group (IBG), due to higher performance-based compensation. IBG's performance-based compensation was lowered in the fourth quarter to align with results for that quarter. The weaker U.S. dollar lowered expense growth from the fourth quarter by approximately $18 million or 1.2 percentage points. Our overall productivity and cash productivity ratios improved from the fourth quarter by 263 basis points and 252 basis points, respectively.

During the quarter, we repurchased 2,046,500 Bank of Montreal common shares under our common share repurchase program at an average cost of $56.16 per share, for a total cost of $115 million.

On February 22, 2005, BMO's Board of Directors approved a quarterly dividend payable to common shareholders of $0.46, representing a 4.5% increase over the first quarter dividend of $0.44 per share. Quarterly dividends have increased 15% from the second quarter of 2004.

____________________
¹ On a taxable equivalent basis — see the Non-GAAP Measures section

2005 Earnings and Economic Outlook
We anticipate achieving our annual targets for 2005 that were established at the end of last year and are outlined above. However, we now anticipate somewhat slower economic growth in Canada than we expected at the end of fiscal 2004. After expanding an estimated 2.6% in calendar year 2004, Canadian real GDP is now projected to grow at a moderate rate of 2.8% in 2005, down from our year-end estimate of 3.2%. Low interest rates will support personal and business spending, though the high Canadian dollar will continue to challenge exporters. Interest rates are expected to remain stable until autumn, before rising modestly late in the year. The Canadian dollar is projected to trade within a narrow range of 79 to 81 cents U.S., with support from the large Canadian trade surplus counterbalancing the effects of expectations of higher interest rates in the United States than in Canada. Low interest rates will underpin growth in household and business lending, while recent strength in equity markets should promote investment banking and wealth management activities.

Though moderating from the strong 4.4% pace of 2004 due to reduced monetary and fiscal stimulus, the United States economy is projected to grow at a still healthy rate of 3.6% in 2005, down slightly from our year-end estimate of 3.7%. Business spending on capital equipment should remain strong amid growing confidence and rising profits, supporting demand for business loans. However, housing activity will moderate as rising interest rates reduce affordability, slowing demand for residential mortgages. Interest rates are projected to increase gradually in 2005 as the Federal Reserve reduces the monetary stimulus in the system.

Management's Responsibility for Financial Information
A rigorous and comprehensive financial governance framework is in place at BMO and its subsidiaries at both the management and board levels. Each year, BMO's Annual Report contains a statement signed by the Chief Executive Officer (CEO) and Chief Financial Officer (CFO) outlining management's responsibility for financial information contained in the report. As in the prior year, BMO filed certifications, signed by the CEO and CFO, with the SEC in the United States in December 2004 when we filed our Annual Report and other annual disclosure documents. In those filings, BMO's CEO and CFO certify, as required by the United States Sarbanes Oxley Act, the appropriateness of BMO's financial disclosures in our Form 40-F filings and the effectiveness of controls and procedures over those disclosures. BMO's CEO and CFO certify the appropriateness of our financial disclosures in BMO's interim filings with securities regulators, including this MD&A and the accompanying unaudited interim consolidated financial statements for the period ended January 31, 2005.

As in prior quarters, BMO's audit committee reviewed this document, including the attached unaudited interim consolidated financial statements, and BMO's Board of Directors approved the document prior to its release.

A comprehensive discussion of our businesses, strategies and objectives can be found in Management's Discussion and Analysis in BMO's 2004 Annual Report, which can be accessed on our web site at www.bmo.com/investorrelations. Readers are also encouraged to visit the site to view other quarterly financial information.

Regulatory Filings
Our continuous disclosure materials, including our interim filings, annual MD&A and audited consolidated financial statements, our Annual Information Form and the Notice of Annual Meeting of Shareholders and Proxy Circular are available on our web site at www.bmo.com/investorrelations, on the Canadian Securities Administrators' web site at www.sedar.com, and on the EDGAR section of the SEC's web site at www.sec.gov.

To view the rest of this news release consisting of:

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 news release, and may be included in 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 the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may involve, but are not limited to, comments with respect to our objectives for 2005 and beyond, our strategies or future actions, our targets, expectations for our financial condition or share price, and the results of or outlook for our operations or for the Canadian and U.S. economies.

By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. There is significant risk that predictions and other forward-looking statements will not prove to be accurate. We caution readers of this document not to place undue reliance on our forward-looking statements as a number of factors 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: global capital market activities; interest rate and currency value fluctuations; the effects of war or terrorist activities; the effects of disease or illness on local, national or international economies; the effects of disruptions to public infrastructure, such as transportation, communications, power or water supply; industry and worldwide economic and political conditions; regulatory and statutory developments; the effects of competition in the geographic and business areas in which we operate; management actions; and technological changes. We caution that the foregoing list of factors is not exhaustive and that when relying on forward-looking statements to make decisions with respect to Bank of Montreal, investors and others should carefully consider these factors, as well as other uncertainties and potential events, and the inherent uncertainty of forward-looking statements. Bank of Montreal does not undertake to update any forward-looking statement, whether written or oral, that may be made, from time to time, by the organization or on its behalf.

INVESTOR AND MEDIA PRESENTATION

Investor Presentation Materials
Interested parties are invited to visit our web site at www.bmo.com/investorrelations to review this quarterly news release, presentation materials and a supplementary financial information package online. Copies of these documents are also available at BMO Financial Group's offices at 100 King Street West, 18^th Floor, 1 First Canadian Place, Toronto, Ontario, M5X 1A1.

Quarterly Conference Call and Webcast Presentations
Interested parties are also invited to listen to our quarterly conference call on Tuesday, February 22, 2005 at 2:30 p.m. (EST). At that time, senior BMO executives will comment on results for the quarter and respond to questions from the investor community. The call may be accessed by telephone at 416-695-9753 (from within Toronto) or 1-888-789-0089 (toll-free outside Toronto). A replay of the conference call can be accessed until Tuesday, March 8, 2005 by calling 416-695-5292 (from within Toronto) or 1-888-742-2491 (toll-free outside Toronto) and entering passcode 1162.

A live webcast of the call can be accessed on our web site at www.bmo.com/investorrelations. A replay can be accessed on the site until Tuesday, May 24, 2005.

Media Relations Contacts
Ralph Marranca, Toronto, ralph.marranca@bmo.com, 416-867-3996
Lucie Gosselin, Montreal, lucie.gosselin@bmo.com, 514-877-1101

Investor Relations Contacts
Susan Payne, Senior Vice-President, Investor Relations, susan.payne@bmo.com, 416-867-6656
Steven Bonin, Director, Investor Relations, steven.bonin@bmo.com, 416-867-5452

Chief Financial Officer
Karen Maidment, Senior Executive Vice-President and Chief Financial Officer, karen.maidment@bmo.com, 416-867-6776

Corporate Secretary
Velma Jones, Vice-President and Corporate Secretary, Corporate and Legal Affairs, corp.secretary@bmo.com, 416-867-6785