BMO Financial Group Reports Net Income of $1.25 Billion for Second Quarter of 2017

Financial Results Highlights:

Second Quarter 2017 Compared with Second Quarter 2016:

- Net income of $1.25 billion, up 28%; adjusted net income1 of $1.29
billion, up 12%
- EPS2 of $1.84, up 27%; adjusted EPS1,2 of $1.92, up 11%
- ROE of 12.6%, compared with 10.1%; adjusted ROE1 of 13.1%, compared
with 12.1%
- Provisions for credit losses of $259 million, compared with $201
million
- Common Equity Tier 1 Ratio of 11.3%
- Dividend increased by $0.02 to $0.90, up 5% from the prior year

Year-to-Date 2017 Compared with Year-to-Date 2016:

- Net income of $2.74 billion, up 34%; adjusted net income1 of $2.83
billion, up 21%
- EPS2 of $4.06, up 34%; adjusted EPS1,2 of $4.20, up 21%
- ROE of 13.8%, compared with 10.5%; adjusted ROE1 of 14.2%, compared
with 12.1%
- Provisions for credit losses of $432 million, compared with $384
million

Toronto (ots/PRNewswire) - For the second quarter ended April 30,
2017, BMO Financial Group (TSX:BMO) (NYSE:BMO) reported net income of
$1,248 million or $1.84 per share on a reported basis, and net income
of $1,295 million or $1.92 per share on an adjusted basis.

"BMO delivered good results in the quarter with adjusted net
income of $1.3 billion and adjusted earnings per share of $1.92.
Earnings growth reflects the benefits and resilience of our
diversified business model, with strong contributions from our Wealth
Management and BMO Capital Markets businesses, and consistent
continuing investment in technology and our employees," said Bill
Downe, Chief Executive Officer, BMO Financial Group.

"Personal and Commercial Banking in Canada continues to grow in
customers, loans and deposits. Business and consumer confidence is
strong, and while there has been a moderation in loan and deposit
growth in the United States reflective of slower than anticipated
business activity in the first calendar quarter, we are
well-positioned to continue to build on the strength of our U.S.
franchise.

"We remain confident in our ability to grow and create value in an
evolving environment," concluded Mr. Downe.

Return on tangible common equity (ROTCE) was 15.7% compared with
12.8% in the prior year, and adjusted ROTCE was 15.9% compared with
14.8%.

Concurrent with the release of results, BMO announced a third
quarter 2017 dividend of $0.90 per common share, up $0.02 per share
and 2% from the preceding quarter, and up $0.04 per share and 5% from
a year ago. The quarterly dividend of $0.90 per common share is
equivalent to an annual dividend of $3.60 per common share.

Our complete Second Quarter 2017 Report to Shareholders, including
our unaudited interim consolidated financial statements for the
period ended April 30, 2017, is available online at
www.bmo.com/investorrelations and at www.sedar.com.

(1) 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.
Adjusted
results and
measures are
non-GAAP and
are detailed
for all
reported
periods in the
Non-GAAP
Measures
section, where
such non-GAAP
measures and
their closest
GAAP
counterparts
are disclosed.
(2) 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
document
are based
on
unrounded
numbers.

Operating Segment Overview

Canadian P&C

Reported and adjusted net income of $531 million increased $6
million or 1% from a year ago due to higher balances across most
products and increased non-interest revenue, largely offset by higher
expenses and lower net interest margin.

During the quarter, we continued to build capabilities and enhance
service offerings that enable customers to complete banking
activities in their channel of choice, including launching free
unlimited e-transfers, credit card alerts and the ability to view
pending transactions. We were recognized by the global research and
advisory firm Celent with the 2017 Model Bank Award for our work in
advancing process automation through the effective deployment of new
technology.

U.S. P&C

Reported net income of $248 million and adjusted net income of
$260 million both decreased 7% from a year ago. Adjusted net income
excludes the amortization of acquisition-related intangible assets.

Reported net income of US$185 million and adjusted net income of
US$194 million both decreased 10% from a year ago mainly due to
higher provisions for credit losses, as lower revenue was largely
offset by lower expenses.

In March, BMO Harris Bank announced our consumer and small
business deposit customers will now have free access to over 43,000
automated teller machines (ATMs) in the United States and 12,000
international ATMs as part of a new partnership with the Allpoint®
ATM network.

Wealth Management

Reported net income was $251 million, up $117 million or 86% from
a year ago. Adjusted net income, which excludes the amortization of
acquisition-related intangible assets and acquisition integration
costs, was $272 million, up $114 million or 72% from a year ago.
Results were strong in both traditional wealth and insurance with
continued benefit from productivity initiatives. Traditional wealth
reported net income of $178 million increased $112 million or 166%
from a year ago. Traditional wealth adjusted net income of $199
million increased $109 million or 121%, due to the impact of an
investment write-down in the prior year, growth across most of our
businesses and the benefit of improved equity markets. Insurance
income of $73 million increased $5 million or 8% from a year ago
mainly due to business growth, partially offset by favourable market
movements in the prior year with no impact in the current quarter.

BMO Private Bank was named Best Private Bank for Entrepreneurs in
North America by Global Finance magazine, recognizing our
understanding of North American client needs and our ability to
deliver the highest level of client service.

BMO Capital Markets

Reported net income of $321 million and adjusted net income of
$322 million both increased 12% from a year ago. Results were driven
by higher revenue with strong performance in our Investment and
Corporate Banking business, partially offset by lower revenue in our
Trading Products business, higher non-interest expenses and higher
taxes.

BMO Capital Markets was named the World's Best Metals & Mining
Investment Bank by Global Finance magazine for the 8th year in a row
and awarded the Best Bank for the Canadian Dollar by FX Week for the
6th consecutive year.

Corporate Services

Corporate Services net loss for the quarter was $103 million
compared with a net loss of $241 million a year ago. Corporate
Services adjusted net loss for the quarter was $90 million compared
with an adjusted net loss of $98 million a year ago. Adjusted results
in both periods exclude acquisition integration costs and the prior
year also excluded a restructuring charge of $132 million after-tax.
Adjusted results increased due to above-trend revenue excluding teb
(tax equivalent basis) in the current quarter, largely offset by
higher expenses compared to below-trend expenses in the prior year,
and lower credit recoveries. Reported results increased due to the
net impact of drivers noted above, in addition to the restructuring
charge in the prior year.

Adjusted results in this Operating Segment Overview section are
non-GAAP amounts or non-GAAP measures. Please see the Non-GAAP
Measures section.

Capital

BMO's Common Equity Tier 1 (CET1) Ratio was 11.3% at April 30,
2017. The CET1 Ratio increased from 11.1% at the end of the first
quarter due largely to higher capital, partially offset by higher
risk-weighted assets.

Provision for Credit Losses

The total provision for credit losses was $259 million, an
increase of $58 million from the prior year due to higher provisions
in U.S. P&C and lower credit recoveries in Corporate Services.

Caution

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

Regulatory Filings

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

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, together with its subsidiaries.

Non-GAAP Measures

Results and measures in this document are presented on a GAAP
basis. Unless otherwise indicated, all amounts are in Canadian
dollars and have been derived from financial statements prepared in
accordance with International Financial Reporting Standards (IFRS).
References to GAAP mean IFRS. They are also presented on an adjusted
basis that excludes the impact of certain items as set out in the
table below. Results and measures that exclude the impact of
Canadian/U.S. dollar exchange rate movements on our U.S. segment are
non-GAAP measures (please see the Foreign Exchange section for a
discussion of the effects of changes in exchange rates on our
results). Management assesses performance on a reported basis and on
an adjusted basis and considers both to be useful in assessing
underlying ongoing business performance. Presenting results on both
bases provides readers with a better understanding of how management
assesses results. It also permits readers to assess the impact of
certain specified items on results for the periods presented and to
better assess results excluding those items if they consider the
items to not be reflective of ongoing results. As such, the
presentation may facilitate readers' analysis of trends, as well as
comparisons with our competitors. Except as otherwise noted,
management's discussion of changes in adjusted results in this
document applies equally to changes in corresponding reported
results. Adjusted results and measures are non-GAAP and as such do
not have standardized meaning under GAAP. They are unlikely to be
comparable to similar measures presented by other companies and
should not be viewed in isolation from or as a substitute for GAAP
results.

Non-GAAP Measures
(Canadian $ in Q2-2017 Q1-2017 Q2-2016 YTD-2017 YTD-2016
millions, except as
noted)
Reported Results
Revenue 5,741 5,405 5,101 11,146 10,176
Insurance claims, (708) (4) (407) (712) (773)
commissions and
changes in policy
benefit liabilities
(CCPB)
Revenue, net of 5,033 5,401 4,694 10,434 9,403
CCPB
Provision for (259) (173) (201) (432) (384)
credit losses
Non-interest (3,276) (3,379) (3,312) (6,655) (6,582)
expense
Income before 1,498 1,849 1,181 3,347 2,437
income taxes
Provision for (250) (361) (208) (611) (396)
income taxes
Net Income 1,248 1,488 973 2,736 2,041
EPS ($) 1.84 2.22 1.45 4.06 3.03
Adjusting Items
(Pre-tax)
Amortization of (43) (37) (40) (80) (83)
acquisition-related
intangible assets
(1)
Acquisition (21) (22) (24) (43) (46)
integration costs
(2)
Cumulative - - - - (85)
accounting
adjustment (3)
Restructuring cost - - (188) - (188)
(4)
Adjusting items (64) (59) (252) (123) (402)
included in
reported pre-tax
income
Adjusting Items
(After tax)
Amortization of (34) (28) (31) (62) (64)
acquisition-related
intangible assets
(1)
Acquisition (13) (14) (16) (27) (31)
integration costs
(2)
Cumulative - - - - (62)
accounting
adjustment (3)
Restructuring cost - - (132) - (132)
(4)
Adjusting items (47) (42) (179) (89) (289)
included in
reported net income
after tax
Impact on EPS ($) (0.08) (0.06) (0.28) (0.14) (0.45)
Adjusted Results
Revenue 5,741 5,405 5,101 11,146 10,260
Insurance claims, (708) (4) (407) (712) (773)
commissions and
changes in policy
benefit liabilities
(CCPB)
Revenue, net of 5,033 5,401 4,694 10,434 9,487
CCPB
Provision for (259) (173) (201) (432) (384)
credit losses
Non-interest (3,212) (3,320) (3,060) (6,532) (6,264)
expense
Income before 1,562 1,908 1,433 3,470 2,839
income taxes
Provision for (267) (378) (281) (645) (509)
income taxes
Net income 1,295 1,530 1,152 2,825 2,330
EPS ($) 1.92 2.28 1.73 4.20 3.48

(1) These expenses
were charged
to the
non-interest
expense of the
operating
groups. Before
and after-tax
amounts for
each operating
group are
provided on
pages 13, 14,
15, 16, and 18
of our Second
Quarter 2017
Report to
Shareholders.
(2) Acquisition
integration
costs related
to F&C Asset
Management plc
(F&C) are
charged to
Wealth
Management.
Acquisition
integration
costs related
to the
acquired BMO
Transportation
Finance
business are
charged to
Corporate
Services,
since the
acquisition
impacts both
Canadian and
U.S. P&C
businesses.
Acquisition
costs are
primarily
recorded in
non-interest
expense.
(3) Cumulative
accounting
adjustment
recognized in
other
non-interest
revenue
related to
foreign
currency
translation
that largely
impacted prior
periods.
(4) Restructuring
cost is
recorded in
non-interest
expense.
Adjusted
results
and
measures
in this
table are
non-GAAP
amounts
or
non-GAAP
measures.

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 harbor" 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 fiscal 2017 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, U.S. and international 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;
weak, volatile or illiquid capital and/or credit markets; interest
rate and currency value fluctuations; changes in monetary, fiscal,
tax or economic policy; the level of competition in the geographic
and business areas in which we operate; changes in laws or in
supervisory expectations or requirements, including capital, interest
rate and liquidity requirements and guidance and the effect of such
changes on funding costs; 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, including
obtaining regulatory approvals; critical accounting estimates and the
effect of changes to accounting standards, rules and interpretations
on these estimates; operational and infrastructure risks; changes to
our credit ratings; political conditions, including changes relating
to or affecting economic or trade matters; global capital markets
activities; the possible effects on our business of war or terrorist
activities; outbreaks of disease or illness that affect local,
national or international economies; natural disasters and
disruptions to public infrastructure, such as transportation,
communications, power or water supply; technological changes;
information and cyber-security; and our ability to anticipate and
effectively manage risks arising from all of the foregoing factors.

We caution that the foregoing list is not exhaustive of all
possible factors. Other factors and risks could adversely affect our
results. For more information, please see the Enterprise-Wide Risk
Management section on pages 79 to 112 of BMO's 2016 Annual Report,
which outlines certain key factors and risks that may affect Bank of
Montreal's future results. Investors and others should carefully
consider these factors and risks, 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 statements, 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, as well as 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 our business, are material factors we consider when
determining our strategic priorities, objectives and expectations for
our business. In determining our expectations for economic growth and
financial services, we primarily consider historical economic data
provided by the Canadian and U.S. governments, historical
relationships between economic and financial variables, and the risks
to the domestic and global economy. See the Economic Review and
Outlook section of our Second Quarter 2017 Report to Shareholders.

INVESTOR AND MEDIA PRESENTATION

Investor Presentation Materials

Interested parties are invited to visit our website at
www.bmo.com/investorrelations to review our 2016 Annual Report,
quarterly presentation materials and supplementary financial
information package.

Quarterly Conference Call and Webcast Presentations

Interested parties are also invited to listen to our quarterly
conference call on Wednesday, May 24, 2017, 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 416-641-2144 (from within
Toronto) or 1-888-789-9572 (toll-free outside Toronto) Passcode:
5126346. A replay of the conference call can be accessed until
Monday, August 28, 2017, by calling 905-694-9451 (from within
Toronto) or 1-800-408-3053 (toll-free outside Toronto) and entering
passcode 5740558.

A live webcast of the call can be accessed on our website at
www.bmo.com/investorrelations. A replay can also be accessed on the
site.

Shareholder Dividend For other shareholder
Reinvestment and Share information, including the
Purchase notice for our normal course
issuer bid, please contact
Plan (the Plan) Bank of Montreal
Average market price as Shareholder Services
defined under the Plan
February 2017: $100.66 Corporate Secretary's
($98.65*) Department
March 2017: $99.67 One First Canadian Place,
21st Floor
April 2017: $99.17 Toronto, Ontario M5X 1A1
*Reflects 2% discount for Telephone: (416) 867-6786
dividend reinvestment
Fax: (416) 867-6793
E-mail:
corp.secretary@bmo.com
For dividend information,
change in shareholder
addressor to advise of
duplicate mailings,
please contact
Computershare Trust For further information on
Company of Canada this document, please contact
100 University Avenue, Bank of Montreal
9th Floor
Toronto, Ontario M5J 2Y1 Investor Relations Department
Telephone: 1-800-340-5021 P.O. Box 1, One First
(Canada and the United Canadian Place, 10th Floor
States)
Telephone: (514) 982-7800 Toronto, Ontario M5X 1A1
(international)
Fax: 1-888-453-0330
(Canada and the United
States)
Fax: (416) 263-9394 To review financial results
(international) online, please visit our
website at www.bmo.com.
E-mail: To review regulatory filings
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please visit our website at
www.bmo.com/investorrelations
.

Our 2016 Annual MD&A, audited annual consolidated financial
statements and annual report on Form 40-F (filed with the U.S.
Securities and Exchange Commission) are available online at
www.bmo.com/investorrelations and at www.sedar.com. Printed copies of
the bank's complete 2016 audited financial statements are available
free of charge upon request at 416-867-6785 or
corp.secretary@bmo.com.

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Media Relations Contacts: Paul Gammal, Toronto,
paul.gammal@bmo.com, 416-867-3996; Frédéric Tremblay, Montreal,
frederic1.tremblay@bmo.com, 514-877-1873; Investor Relations
Contacts: Jill Homenuk, Head, Investor Relations,
jill.homenuk@bmo.com, 416-867-4770; Christine Viau, Director,
Investor Relations, christine.viau@bmo.com, 416-867-6956

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