BMO Capital Markets Significantly Expands U.S. Municipal Bond Capability with Acquisition of Griffin, Kubik, Stephens & Thompson, Inc.

BMO becomes one of the largest muni-bond dealers in the Midwest

BMO Capital Markets, the investment and corporate banking arm of BMO Financial Group (TSX, NYSE: BMO), announced a definitive agreement today to acquire Chicago-based Griffin, Kubik, Stephens & Thompson Inc. (GKST). The acquisition will make BMO Capital Markets the sixth-largest bank qualified municipal bond dealer in the United States and the largest in Illinois, greatly accelerating BMO’s national presence in the municipal bond market.

GKST is an independent, full-service registered investment dealer specializing in debt securities, including municipal bonds, U.S. Treasury debt, agencies and mortgage-backed securities. The company employs more than 100 people and caters to institutional and individual investors as well as U.S. government agencies, schools and non-profit issuers. Services include fixed income trading, underwriting, portfolio analysis and research.

“This acquisition allows us to grow our U.S. fixed income business by broadening our scope and more than doubling the size of our municipal bond business,” said Tom Milroy, Chief Executive Officer, BMO Capital Markets.

“We have been in the municipal banking business for more than 125 years in Illinois. GKST’s national presence in municipal banking along with a strong and well diversified investor base positions us very well for the future as more U.S. municipalities seek to finance their infrastructure needs. Municipal bonds are a client-driven business that fit well with our overall strategy and we believe the outlook for this business is favorable going forward,” Mr. Milroy added.

“GKST will bolster BMO Capital Markets’ reach into markets that we are already focused on such as the Healthcare, Education and Financial Institutions sectors. Likewise, the acquisition creates an opportunity for us to pursue new markets such as the growing infrastructure market and to offer additional services such as fixed income portfolio analysis and asset liability systems for banks,” said Charlie Piermarini, Executive Managing Director and Head of Debt Products & Securitization, BMO Capital Markets.

“We see this partnership as a natural fit,” said David Thompson, President and founding Principal of GKST. “BMO Capital Markets provides a strong platform to combine our operations. They have the longstanding presence and dedication to the Midwest marketplace as well as the shared knowledge and technical expertise necessary to meet the goals of our clients.”

GKST has offices in Chicago, Monticello, Illinois and Milwaukee, Wisconsin and serves clients in 47 states and Puerto Rico.

BMO Capital Markets is one of the largest investment banking employers in Chicago. Over the last two years, BMO Capital Markets and affiliate Harris have been steadily adding professionals to strengthen its ability to serve customers and clients across the Midwest and nationally. In February, BMO Capital Markets hired five municipal bond sales and trading professionals in Chicago. The group was formerly with LaSalle Financial Services.

The acquisition is anticipated to close in June 2008, subject to approvals from U.S. and Canadian regulators. The terms of the deal are not being disclosed.