News Releases

Strong Net Income with 4^th Consecutive Quarter of Higher Revenues, and a Continuing Commitment to Expense Control in all Operating Groups

Personal and Commercial Banking Canada Continues to Achieve High Year-over-Year Growth in Revenue and Net Income

Tier 1 Capital Ratio Remains Strong, at 12.53%

Financial Results Highlights:

• Net income of $657 million, up $432 million from a year ago
• EPS¹ of $1.12 and cash EPS² of $1.13, both up $0.73 from a year ago
• Revenue exceeds $3 billion with stable expenses relative to a year ago
• Provisions for credit losses of $333 million, down $95 million from a year ago

Toronto, March 2, 2010 - For the first quarter ended January 31, 2010, BMO Financial Group reported net income of $657 million or $1.12 per share. Canadian personal and commercial banking had a strong quarter, with net income of $403 million, up $88 million or 28% from a year ago. Private Client Group net income was also strong, at $113 million, up $45 million or 68% from a year ago.

Today, BMO announced a second quarter dividend of $0.70 per common share, unchanged from the preceding quarter and equivalent to an annual dividend of $2.80 per common share.

"This quarter's strong performance demonstrates the earnings power of our core businesses and reinforces the confidence we have in our strategy,'' said Bill Downe, President and Chief Executive Officer, BMO Financial Group. "Underpinning this performance is an unwavering commitment to our customers, which runs through every part of the company.

"P&C Canada continues to set the pace for the company. It had another strong quarter, with $403 million in net income, up 28% from a year ago. We have continued to make investments to improve the customer experience and our competitive position, while prudently managing expense growth. Revenue increased 12%, driven by volume growth across most products and improved net interest margin.

"We fully support the prudent measures announced by the Canadian Finance Minister two weeks ago to support the long-term stability of Canada's housing market and curtail any speculative excesses in mortgage borrowing. BMO continues to offer advice and develop new products that align with the government's policy of supporting the long-term stability of a sector that is vital to our economy and the financial well-being of Canadian families. It's just one more way we are making money make sense for our customers.

"BMO Capital Markets results were good, with $248 million in net income. While up sharply from a year ago, results were lower than in recent quarters, which benefited from a favourable trading environment. BMO Capital Markets has achieved ROE of at least 18% for three consecutive quarters. We are committed to high-quality earnings over the course of the business cycle and believe that steady improvement in the North American economy should lead to more favourable capital markets opportunities, particularly in investment banking.

"Private Client Group results were up strongly from a year ago due to improved equity markets, higher asset levels, higher insurance revenues and the effects of last year's charges related to our decision to support clients in the difficult market environment. Net income was $113 million, up $45 million or 68% from a year ago. Cash productivity continues to improve. It was 72.0%, better than 82.0% a year ago and 74.0% in the preceding quarter.

"In the United States, we are seeing the beginning of a recovery in the Midwest market and expect that companies will be rebuilding their capital and inventories. We have launched a strategy to take advantage of this unique opportunity at a time when many of our competitors are distracted and as we continue to build momentum in our commercial business. We have undertaken an analysis of the needs of our BMO Capital Markets borrowing clients to identify those that can be better served under a commercial banking model. We will be shifting those accounts from BMO Capital Markets to our P&C U.S. business to better align our people and capital with client needs. This will allow us to serve a much larger client base, at lower cost and more efficiently, while increasing our size and momentum in commercial banking in the United States. This will also focus the efforts of BMO Capital Markets on building its pipeline of investment banking opportunities. To put this initiative into perspective, the transfer more than doubles the size of the P&C U.S. commercial loan portfolio. The changes will help build on recent momentum in our P&C U.S. business which has seen deposit growth and stronger commercial mid-market, mortgage and auto loan originations.

"In summary, BMO's financial position is very strong, providing significant flexibility to attract new customers and invest for the future. We plan to continue to innovate and provide new products and services that customers want, creating lasting value for both customers and shareholders."

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

2 The adjustments that change results under generally accepted accounting principles (GAAP) to cash results are outlined in the Non-GAAP Measures section at the end of Management's Discussion and Analysis (MD&A), where such non-GAAP measures and their closest GAAP counterparts are outlined.

Operating Segment Overview

P&C Canada
Net income was a strong $403 million, up $88 million or 28% from a year ago. We had good revenue increases across each of our personal, commercial and cards businesses, driven by volume growth across most products and improved net interest margin. There was particularly strong growth in personal and commercial deposits. Good revenue growth together with effective management of operating expenses, while investing for the future, has resulted in strong cash operating leverage of 11.1%.

Our goal is to be the bank that defines great customer experience, and our customers are telling us we are on the right track. We have narrowed the gap to the industry leader on both personal and commercial loyalty scores relative to a year ago. We have seen year-over-year increases in the average number of product categories used by both our personal and commercial customers. This is the result of our commitment to listen, understand and provide guidance to our customers.

In personal banking, we continue to focus on expanding and upgrading our branch network in priority markets, and on driving revenue growth and customer loyalty through effective use of our robust performance management system. In the current quarter, we opened three new branches, redeveloped three and closed one.

In commercial banking, we launched BMO Business Essentials and BMO SmartSteps for Business. These offers provide our business customers with solutions designed for their particular industry, aimed at their specific business needs. We continue to rank second in Canadian business lending market share and our goal is to become the bank of choice for businesses across Canada. In addition, we continue to leverage our integrated customer offer in driving success in our upper mid-market commercial business.

In the cards business, we are one of the largest MasterCard issuers in Canada. We are growing our cards business with prudent credit management and have had low credit loss rates relative to our peers.

On December 31, 2009, we completed the acquisition of the Diners Club North American franchise from Citigroup. Diners Club is recognized around the world as a premier card program for employee Travel & Entertainment expense cards. The North American franchise also benefits from worldwide MasterCard acceptance. The acquisition positions BMO among the top commercial card issuers in North America. It also allows BMO to partner with other Diners Club franchisees around the world to deliver a premier global Travel & Entertainment offering to its multinational clients, making us a compelling choice for prospective commercial customers across North America.

P&C U.S. (all amounts in U.S. $)
Net income was $16 million, down $12 million or 43% from a year ago. Revenues from improved loan spreads were more than offset by decreased deposit spreads, an increase in the impact of impaired loans year over year, and the first quarter 2009 reduction of the Visa litigation accrual.

Cash net income for the quarter was $35 million, adjusting for the impact of impaired loans. The cash productivity ratio for the quarter was 72.1%, adjusted on the same basis.

Our focus in 2010 is on profitable growth in both loans and deposits while maintaining effective expense control. We have seen deposit growth of $1.0 billion or 5.2% from last year, concentrated in our commercial accounts. Mortgage and auto loan originations remain strong, with an increase of more than 80% from last year in both businesses, reflecting our targeted focus on these opportunities. Our loss rates and delinquencies on consumer loans remain well below those of our peers.

We continue to focus on the customer experience as reflected in our high customer loyalty scores. Our retail net promoter score was 40 for the first quarter of 2010, compared with 43 in the fourth quarter of 2009. Our retail net promoter score remains very strong compared to the scores of our major competitors.

The 2009 Greenwich Excellence Award winners were recently announced, and our commercial banking team was recognized as a multiple award winner. More than 750 banks were evaluated, based on interviews with more than 13,000 customers. As a result, 33 banks were recognized for distinctive quality in mid-market banking, and 43 were recognized for distinctive quality in small business banking. Our commercial mid-market segment was recognized for overall satisfaction excellence on both a national and regional level. Our small business segment was recognized for excellence in financial stability and relationship manager performance on a national level. Harris treasury management was recognized for excellence in overall satisfaction on a regional level.

Private Client Group (PCG)
Net income in the first quarter was $113 million, an increase of $45 million or 68% from the same quarter a year ago. The BMO Life Assurance acquisition increased net income by $7 million.

PCG net income, excluding the insurance business, was $70 million, up $34 million or 93% from a year ago. Revenue for PCG, excluding insurance, grew by 11% due to the success of our focus on attracting new client assets and continued improvement in equity markets. Results a year ago included a charge of $17 million ($11 million after tax) related to the decision to assist some of our U.S. clients by purchasing auction-rate securities from their accounts in the weak capital markets environment.

Insurance net income was $43 million for the quarter, up $11 million or 38% from a year ago due to the BMO Life Assurance acquisition and organic growth. Assets under management and administration improved by $40 billion or 18%, after adjusting to exclude the impact of the weaker U.S. dollar.

For the fourth year in a row, BMO Mutual Funds was ranked highest for its English and French language services in Dalbar Inc.'s annual ranking of Canadian mutual fund companies. BMO InvestorLine placed second in Dalbar's direct brokerages ranking.

PCG launched nine new BMO Exchange Traded Funds (ETFs), including three fixed income funds, as well as country- and industry-specific funds that provide exposure to areas and sectors such as China, India, utilities, junior gold companies and global infrastructure. This significant expansion into the ETF market brings our product line to 22 ETFs. The expansion further demonstrates BMO's commitment to this growing industry and to providing investors with a full range of investment options.

BMO Capital Markets
BMO Capital Markets results for the quarter reflect a good start to the year. Net income was $248 million, up $71 million or 40% from a year ago. Revenue increased by $193 million to $920 million. Our strong revenue performance benefited from our continued focus on clients and maintaining a diversified portfolio of businesses. Mergers and acquisitions and debt underwriting activities rebounded due to improved market conditions. Investment securities gains were positive this year whereas the prior year included significant charges related to the weaker capital markets environment. Improved lending fees were offset by lower corporate banking net interest income due to reduced asset levels. Trading revenues were strong in the first quarter of 2009 due to a favourable trading environment, but overall trading results were lowered by certain charges related to the capital markets environment. In the first quarter of 2010, trading revenues were at more normal levels, due to reduced opportunities from lower market volatility and narrower spreads.

In the previous quarter, we announced our agreement with Paloma Securities to hire its global securities lending team. The integration began in December 2009 and complements our existing North American securities lending operations, providing a platform for future growth opportunities.

During the quarter, BMO Capital Markets was involved in 130 new issues, including 40 corporate debt and 36 government debt deals, six issues of preferred shares and 48 common equity transactions, raising $53.7 billion, up $7.9 billion from the previous quarter.

Corporate Services
Corporate Services incurred a net loss in the quarter of $124 million, largely due to provisions for credit losses and low revenue. The net loss improved $245 million from the prior year. Revenues improved $212 million or 65%, mainly due to a lower negative carry on certain asset-liability interest rate positions as a result of management actions and more stable market conditions, and to mark-to-market gains on hedging activities in the current year compared to losses in the prior year. These factors were partly offset by lower securitization revenue. Provisions for credit losses were better by $158 million as a result of lower provisions charged to Corporate Services. BMO employs a methodology for segmented reporting purposes whereby expected credit losses are charged to the client operating groups, and the difference between expected losses and actual losses is charged (or credited) to Corporate Services.

Caution
The foregoing sections contain forward-looking statements. Please see the Caution Regarding Forward-Looking Statements.

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 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 harbour 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 may involve, but are not limited to, comments with respect to our objectives and priorities for 2010 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, 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 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: general economic and market conditions in the countries in which we operate; interest rate and currency value fluctuations; changes in monetary policy; the degree of competition in the geographic and business areas in which we operate; changes in laws; judicial or regulatory proceedings; the accuracy and completeness of the information we obtain with respect to our customers and counterparties; our ability to execute our strategic plans and to complete and integrate acquisitions; critical accounting estimates; operational and infrastructure risks; general political conditions; global capital market activities; the possible effects on our business of war or terrorist activities; disease or illness that impacts on local, national or international economies; disruptions to public infrastructure, such as transportation, communications, power or water supply; and technological changes.

We caution that the foregoing list is not exhaustive of all possible factors. Other factors could adversely affect our results. For more information, please see the discussion on pages 32 and 33 of BMO's 2009 Annual Report, which outlines in detail certain key factors that may affect BMO's future results. 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, except as required by law. The forward-looking information contained in this document is presented for the purpose of assisting our shareholders in understanding our financial position as at and for the periods ended on the dates presented and our strategic priorities and objectives, and may not be appropriate for other purposes.

Assumptions about the performance of the Canadian and U.S. economies as well as overall market conditions and their combined effect on the bank's business, including those described under the heading Economic Outlook and Review, are material factors we consider when determining our strategic priorities, objectives and expectations for our business. In determining our expectations for economic growth, both broadly and in the financial services sector, we primarily consider historical economic data provided by the Canadian and U.S. governments and their agencies.

To view the rest of this news release consisting of:

INVESTOR AND MEDIA PRESENTATION

Investor Presentation Materials
Interested parties are invited to visit our website at www.bmo.com/investorrelations to review our 2009 Annual Report, this quarterly news release, presentation materials and a supplementary financial information package online.

Quarterly Conference Call and Webcast Presentations
Interested parties are also invited to listen to our quarterly conference call on Tuesday, March 2, 2010, at 2:00 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, May 25, 2010, by calling 416-695-5800 (from within Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering passcode 1645426.

A live webcast of the call can be accessed on our website at www.bmo.com/investorrelations. A replay can be accessed on the site until Tuesday, May 25, 2010.