Business 1st: BMO Financial Group Reports Strong Net Income of $4.2 billion for 2012, Driving Strong EPS Growth

BMO Financial Group BMO Bank of Montreal

TORONTO, ONTARIO--(Marketwire - December 5, 2012) - BMO Financial Group (TSX:BMO)(NYSE:BMO) and BMO Bank of Montreal -

Financial Results Highlights(1):

Fiscal 2012 Compared with Fiscal 2011:

· Net income of $4,189 million, up $1,075 million or 35%

· Adjusted net income(2)of $4,092 million, up $817 million or 25%

· EPS(3)of $6.15, up 27%

· Adjusted EPS(2)(3) of $6.00, up 18%

· Provisions for credit losses of $765 million; adjusted provisions of $471 million, down $637 million

· Common Equity Ratio increases to 10.5% using a Basel II approach

Fourth Quarter 2012 Compared with Fourth Quarter 2011:

· Net income of $1,082 million, up $314 million or 41%

· Adjusted net income(2)of $1,125 million, up $293 million or 35%

· EPS(3)of $1.59, up 43%

· Adjusted EPS(2)(3) of $1.65, up 38%

· ROE of 15.6%, compared with 12.7%

· Adjusted ROE(2)of 16.3%, compared with 13.9%

· Provisions for credit losses of $192 million; adjusted provisions of $113 million, down $168 million

For the fourth quarter ended October 31, 2012, BMO Financial Group reported strong net income of $1,082 million or $1.59 per share. On an adjusted basis, net income was $1,125 million or $1.65 per share. For fiscal 2012, net income was $4,189 million and EPS was $6.15. Adjusted net income was $4,092 million and adjusted EPS was $6.00.

(1) Effective the first quarter of 2012, BMO''s consolidated financial statements and the accompanying Interim Management''s Discussion and Analysis (MD&A) or Financial Review are prepared in accordance with International Financial Reporting Standards (IFRS), as described in Note 1 to the audited consolidated financial statements for the year ended October 31, 2012. Amounts in respect of comparative periods for 2011 have been restated to conform to the current presentation. References to GAAP mean IFRS, unless indicated otherwise.

(2) Results and measures in this document are presented on a GAAP basis. They are also presented on an adjusted basis that excludes the impact of certain items. Items excluded from fourth quarter 2012 results in the determination of adjusted results totalled a charge of $43 million after tax, comprised of a $35 million after tax net benefit of credit-related items in respect of the acquired Marshall &Ilsley Corporation (M&I) performing loan portfolio; costs of $153 million ($95 million after tax) for the integration of the acquired business; a $34 million ($24 million after tax) charge for amortization of acquisition-related intangible assets on all acquisitions; a benefit on run-off structured credit activities of $67 million ($67 million after tax); a restructuring charge of $74 million ($53 million after tax) to align our cost structure for the current and future business environment; and a decrease in the collective allowance for credit losses of $49 million ($27 million after tax). Adjusted results and measures are non-GAAP and are detailed in the Adjusted Net Income section, and (for all reported periods) in the Non-GAAP Measures section of the Financial Review, where such non-GAAP measures and their closest GAAP counterparts are disclosed.

(3) All Earnings per Share (EPS) measures in this document refer to diluted EPS unless specified otherwise. EPS is calculated using net income after deductions for net income attributable to non-controlling interest in subsidiaries and preferred share dividends.

Note: All ratios and percentage changes in this report are based on unrounded numbers.

"BMO''s fourth quarter results mark a strong finish to a pivotal year for the bank," said Bill Downe, President and Chief Executive Officer, BMO Financial Group. "In the quarter we successfully completed the conversion of the core banking platform in the U.S. and turned the page on the purchase of M&I, announced 24 months ago. Since the fourth quarter of 2010, we have generated reported earnings of $7.3 billion and increased BMO''s book value from $19.3 billion to $26.2 billion - an increase of 18%. During the year we increased the dividend and grew net loans and acceptances by 7.4% and deposits by 7.1%. A concerted focus on efficiency was reflected in a reduction of 700 full-time employees.

"P&C Canada experienced good quarter-over-quarter balance sheet growth - with loans and deposits up. We continue to see growth in residential mortgage market share, and believe the changes to Canada''s mortgage market announced earlier this year, which are aligned with BMO''s risk practices and ongoing efforts to encourage Canadians to borrow smartly, are having the desired moderating effect on housing prices in most markets.

"Over the past two years, with the acquisition of Marshall &Ilsley Corporation, we have fundamentally transformed the bank, changed its growth trajectory, and enhanced long-term value for shareholders. BMO Harris Bank has strong deposit market share positions in our core Midwest markets, and our U.S. footprint has doubled in size.

"During the year over 600 U.S. bank branches have been refreshed; high visibility BMO signage and promotion have been put in place; and 1,370 bank machines were raised to a new standard. Our reputation as a consistent commercial lender continues to grow. The core commercial and industrial portfolio in the U.S. has now increased in four sequential quarters - up 15 per cent from a year ago.

"Our efforts to attract new client assets in our wealth businesses have been effective. Of note, our U.S. wealth segment, which has an advantaged private banking and asset management platform, delivered over $100 million in adjusted earnings in 2012. In Canada, we continue to innovate as a leader in the ETF market and BMO InvestorLine''s introduction of adviceDirect means that even if you are a do-it-yourself investor, you can get specific investment recommendations to help you manage your portfolio so you don''t have to feel like you''re on your own.

"BMO Capital Markets continues to deliver very good earnings with strong ROE. Our reputation as experienced advisors who help clients navigate emerging opportunities continues to grow.

"We are confident that each of our U.S. businesses - personal and commercial, wealth, and capital markets - has the scale to compete for new customers. We are well-positioned to leverage the investments we have made in each of these businesses and focus on organic growth.

"I would like to thank our customers for the trust they place in the bank and in particular acknowledge the customers who were part of the conversion of the core banking platform in the U.S. for their continuing loyalty. We recognize that critical to the bank''s success is our ability to serve customers exceptionally well - and help them succeed. The bank''s employees are at the heart of our differentiation strategy; they continuously drive forward our vision to define great customer experience - and I would like to acknowledge them for their hard work and the great improvements being made in the way work gets done more efficiently for our customers.

"As we look ahead to 2013, we are confident that each of our businesses is positioned to deliver high quality sustained earnings growth against a high standard of customer experience," concluded Mr. Downe.

Concurrent with the release of results, BMO announced a first quarter 2013 dividend of $0.72 per common share, unchanged from the preceding quarter and equivalent to an annual dividend of $2.88 per common share. BMO''s capital position is strong. We announced our intention, subject to the approval of OSFI and the Toronto Stock Exchange (TSX), to initiate a normal course issuer bid for up to 15,000,000 of the bank''s own common shares.

BMO''s 2012 audited annual consolidated financial statements and accompanying management''s discussion & analysis (MD&A) will be available today at www.bmo.com, along with the supplementary financial information report.

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Contact Information

Media Relations Contacts

Ralph Marranca, Toronto

416-867-3996

ralph.marranca@bmo.com

Valerie Doucet, Montreal

514-877-8224

valerie.doucet@bmo.com

Investor Relations Contacts

Sharon Haward-Laird