- Filing of certain prospectuses and communications in connection with business combination transactions (425)
March 04 2011 - 3:16PM
Edgar (US Regulatory)
Filed by Bank of Montreal
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12 under the
Securities Exchange Act of 1934
Subject Company: Marshall & Ilsley Corporation
SEC Registration Statement No.: 333-172012
This filing, which includes a March 2011 investor presentation by Bank of Montreal, may contain
forward-looking statements within the meaning of the Private Securities Litigation Reform Act of
1995 and comparable safe harbour provisions of applicable Canadian legislation, including, but
not limited to, statements relating to anticipated financial and operating results, the companies
plans, objectives, expectations and intentions, cost savings and other statements, including words
such as anticipate, believe, plan, estimate, expect, intend, will, should, may,
and other similar expressions. Such statements are based upon the current beliefs and expectations
of our management and involve a number of significant risks and uncertainties. Actual results may
differ materially from the results anticipated in these forward-looking statements. Such factors
include, but are not limited to: the possibility that the proposed transaction does not close when
expected or at all because required regulatory, shareholder or other approvals and other conditions
to closing are not received or satisfied on a timely basis or at all; the terms of the proposed
transaction may need to be modified to satisfy such approvals or conditions; the anticipated
benefits from the proposed transaction such as it being accretive to earnings, expanding our North
American presence and synergies are not realized in the time frame anticipated or at all as a
result of changes in general economic and market conditions, interest and exchange rates, monetary
policy, laws and regulations (including changes to capital requirements) and their enforcement, and
the degree of competition in the geographic and business areas in which M&I operates; the ability
to promptly and effectively integrate the businesses of M&I and BMO; reputational risks and the
reaction of M&Is customers to the transaction; diversion of management time on merger-related
issues; increased exposure to exchange rate fluctuations; and those other factors set out on pages
29, 30, 61 and 62 of BMOs 2010 Annual Report. A significant amount of M&Is business involves
making loans or otherwise committing resources to specific companies, industries or geographic
areas. Unforeseen events affecting such borrowers, industries or geographic areas could have a
material adverse effect on the performance of our integrated U.S. operations. Additional factors
that could cause BMO Financial Groups and Marshall & Ilsley Corporations results to differ
materially from those described in the forward-looking statements can be found in the 2010 Annual
Report on Form 40-F for BMO Financial Group and the 2010 Annual Report on Form 10-K of Marshall &
Ilsley Corporation filed with the Securities and Exchange Commission and available at the
Securities and Exchange Commissions Internet site (http://www.sec.gov).
In connection with the proposed merger transaction, BMO has filed with the Securities and Exchange
Commission a Registration Statement on Form F-4 that includes a preliminary Proxy Statement of M&I,
and a preliminary Prospectus of Bank of Montreal, as well as other relevant documents concerning
the proposed transaction.
Shareholders are urged to read the Registration Statement and the
preliminary Proxy Statement/Prospectus regarding the merger, the definitive Proxy
Statement/Prospectus when it becomes available and any other relevant documents filed with the SEC,
as well as any amendments or supplements to
those documents, because they will contain important information.
A free copy of the preliminary
Proxy Statement/Prospectus, as well as other filings containing information about BMO and M&I, may
be obtained at the SECs Internet site (http://www.sec.gov). You can also obtain these documents,
free of charge, from BMO at www.BMO.com under the tab About BMO
- Investor Relations and then
under the heading Frequently Accessed Documents, from BMO Investor Relations, Senior
Vice-President at (416) 867-6656, from M&I by accessing M&Is website at www.MICorp.com under the
tab Investor Relations and then under the heading SEC Filings, or from M&I at (414) 765-7814.
BMO and M&I and certain of their directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders of M&I in connection with the proposed merger.
Information about the directors and executive officers of BMO is set forth in the proxy statement
for BMOs 2011 annual meeting of shareholders, as filed with the SEC on Form 6-K on February 25,
2011. Information about the directors and executive officers of M&I is set forth in the proxy
statement for M&Is 2010 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on
March 12, 2010. Additional information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be obtained by reading the
above-referenced preliminary Proxy Statement/Prospectus and the definitive Proxy
Statement/Prospectus when it becomes available. Free copies of this document may be obtained as
described in the preceding paragraph.
Investor Presentation March 2011
Bill Downe President and Chief Executive Officer Viki Lazaris
Senior Vice President, Investor Relations
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Forward Looking Statements & Non-GAAP Measures
|
Caution Regarding Forward-Looking Statements
|
Bank of Montreals 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
2011 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.
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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.
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With respect to the M&I transaction, such factors include, but are not limited to: the possibility
that the proposed transaction does not close when expected or at all because required regulatory,
shareholder or other approvals and other conditions to closing are not received or satisfied on a
timely basis or at all; the terms of the proposed transaction may need to be modified to satisfy
such approvals or conditions; the anticipated benefits from the proposed transaction such as it
being accretive to earnings, expanding our North American presence and synergies are not realized
in the time frame anticipated or at all as a result of changes in general economic and market
conditions, interest and exchange rates, monetary policy, laws and regulations (including changes
to capital requirements) and their enforcement, and the degree of competition in the geographic and
business areas in which M&I operates; the ability to promptly and effectively integrate the
businesses of M&I and BMO; reputational risks and the reaction of M&Is customers to the
transaction; diversion of management time on merger-related issues; and increased exposure to
exchange rate fluctuations. A significant amount of M&Is business involves making loans or
otherwise committing resources to specific companies, industries or geographic areas. Unforeseen
events affecting such borrowers, industries or geographic areas could have a material adverse
effect on the performance of our integrated U.S. operations.
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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 29, 30, 61
and 62 of BMOs 2010 Annual Report, which outlines in detail certain key factors that may affect
BMOs 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.
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In calculating the pro-forma impact of Basel III on our regulatory capital and regulatory capital
ratios, we have assumed our interpretation of the proposed rules announced by the Basel Committee
on Banking Supervision (BCBS) as of this date and our models used to assess those requirements are
consistent with the final requirements that will be promulgated by BCBS and the Office of the
Superintendent of Financial Institutions Canada (OSFI). We have also assumed that the proposed
changes affecting capital deductions, risk-weighted assets, the regulatory capital treatment for
non-common share capital instruments (i.e. grandfathered capital instruments) and the minimum
regulatory capital ratios are adopted as proposed by BCBS and OSFI. We also assumed that existing
capital instruments that are non-Basel III compliant but are Basel II compliant can be fully
included in such estimates. The full impact of the Basel III proposals has been quantified based on
our financial and risk positions at January 31 or as close to January 31 as was practical. The
impact of IFRS conversion on our capital ratios is based on the analysis completed as of October
31, 2010. In calculating the impact of M&I and LGM on our capital position, our estimates reflect
expected RWA and capital deductions at closing based on anticipated balances outstanding and credit
quality at closing and our estimate of their fair value. It also reflects our assessment of
goodwill, intangibles and deferred tax asset balances that would arise at closing. The Basel rules
could be subject to further change, which may impact the results of our analysis. In setting out
the expectation that we will be able to refinance certain capital instruments in the future, as and
when necessary to meet regulatory capital requirements, we have assumed that factors beyond our
control, including the state of the economic and capital markets environment, will not impair our
ability to do so.
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Assumptions about the performance of the Canadian and U.S. economies as well as overall market
conditions and their combined effect on the banks business 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.
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Bank of Montreal uses both GAAP and non-GAAP measures to assess performance. Readers are cautioned
that earnings and other measures adjusted to a basis other than GAAP do not have standardized
meanings under GAAP and are unlikely to be comparable to similar measures used by other companies.
Reconciliations of GAAP to non-GAAP measures as well as the rationale for their use can be found in
Bank of Montreals First Quarter 2011 Report to Shareholders and 2010 Annual Report, all of which
are available on our website at
www.bmo.com/investorrelations
.
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Examples of non-GAAP amounts or measures include: cash earnings per share, cash productivity and
cash operating leverage; revenue and other measures presented on a taxable equivalent basis (teb);
amounts presented net of applicable taxes, earnings which exclude the impact of provision for
credit losses and taxes, and core earnings which exclude non recurring items such as acquisition
integration costs.
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Bank of Montreal provides supplemental information on combined business segments to facilitate
comparisons to peers.
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Investor Presentation | March 2011 1
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Additional Information for Stockholders
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Additional Information for Stockholders
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In connection with the proposed merger transaction, BMO has filed with the Securities and Exchange
Commission a Registration Statement on Form F-4 that includes a preliminary Proxy Statement of M&I,
and a preliminary Prospectus of Bank of Montreal, as well as other relevant documents concerning
the proposed transaction. Shareholders are urged to read the Registration Statement and the
preliminary Proxy Statement/Prospectus regarding the merger, the definitive Proxy
Statement/Prospectus when it becomes available and any other relevant documents filed with the SEC,
as well as any amendments or supplements to those documents, because they will contain important
information. A free copy of the preliminary Proxy Statement/Prospectus, as well as other filings
containing information about BMO and M&I, may be obtained at the SECs Internet site
(http://www.sec.gov). You can also obtain these documents, free of charge, from BMO at www.BMO.com
under the tab About BMO Investor Relations and then under the heading Frequently Accessed
Documents, from BMO Investor Relations at investor.relations@bmo.com or 416-867-6642, from M&I by
accessing M&Is website at www.MICorp.com under the tab Investor Relations and then under the
heading SEC Filings, or from M&I at (414) 765-7814.
|
BMO and M&I and certain of their directors and executive officers may be deemed to be participants
in the solicitation of proxies from the shareholders of M&I in connection with the proposed merger.
Information about the directors and executive officers of BMO is set forth in the proxy statement
for BMOs 2011 annual meeting of shareholders, as filed with the SEC on Form 6-K on February 25,
2011. Information about the directors and executive officers of M&I is set forth in the proxy
statement for M&Is 2010 annual meeting of shareholders, as filed with the SEC on a Schedule 14A on
March 12, 2010. Additional information regarding the interests of those participants and other
persons who may be deemed participants in the transaction may be obtained by reading the
above-referenced preliminary Proxy Statement/Prospectus and the definitive Proxy
Statement/Prospectus when it becomes available. Free copies of this document may be obtained as
described in the preceding paragraph.
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Investor Presentation | March 2011 2
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Bank of Montreal (BMO Financial Group)
4
th
largest bank
1
in Canada measured by total assets
|
9
th
largest bank
1
in North America measured by market capitalization
100% ownership of Chicago-based Harris Bank
Listings
|
NYSE, TSX (Ticker: BMO)
Share Price
1
Oct 31/10: NYSE US$59.25
(Fiscal Year-end) TSX C$60.23
Feb 28/11: NYSE US$63.83
TSX C$61.96
Market Cap
1
Oct 31/10: C$34 billion (US$33 billion)
Feb 28/11: C$35 billion (US$36 billion)
# of Employees
38,100
11 million personal, commercial, corporate and institutional customers
Q1 F2011 Results
2
Revenue
C$3.3 billion (US$3.3 billion)
Net Income
C$776 million (US$770 million)
Cash EPS
C$1.32 (US$1.31)
PCL
C$248 million (US$246 million)
Average Assets
C$418 billion (US$415 billion)
Capital Ratios (Basel II)
Tier 1 13.02%
Common Equity Ratio 10.15%
1
Published by Bloomberg; Asset and market capitalization rankings as at February 28,
2011
2
Balances reported in Canadian dollars. Cdn/U.S. exchange rate: Q1 2011 average
$1.0074
Investor Presentation | March 2011 3
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Reasons to Invest in BMO
Uniquely clear investor proposition
Clear growth strategy
Consistent and focused North American growth strategy
Strong Canadian and U.S. customer base
Growing global presence to support our customers
Commitment to our medium-term financial objectives
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Basel II Tier 1 Ratio of 13.02% and Common Equity Ratio of
10.15% as at January 31, 2011
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Basel III Common Equity Ratio and Tier 1 Ratio as at January
31, 2011 are estimated to be 8.2%
1
and 10.7%
1
respectively
Disciplined approach to capital management
Proactive risk management
Independent risk oversight across the enterprise
Disciplined credit risk management capabilities and processes
Group and individual performance assessments that reflect
risk-adjusted returns and align with shareholder interests
Commitment to stakeholders
Clear brand promise that delivers real benefit for customers
Engaged employees committed to exceeding customers expectations
Consistent dividend payment and longest-running dividend
payout record of any company in Canada
Sound corporate governance
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Twelve Month
Total Shareholder Return (%)
2006 24.1
2007 (5.8)
2008 (27.9)
2009 25.1
2010 26.4
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1 BMOs Basel III Ratios as at January 31, 2011 are estimated based on announced Basel III 2019
rules, the impact of adoption of IFRS, and assumes no additional capital raise for M&I.
For further details regarding assumptions and factors used in our calculations refer to pages 5, 14
and 15 of Bank of Montreals First Quarter 2011 Report to Shareholders.
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Investor Presentation | March 2011 4
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Capital Overview
Demonstrated ability to build capital, grow the business and increase dividends when appropriate
|
Basel II Q1 10 Q4 10 Q1 11
Tier 1 Capital Ratio (%) 12.53 13.45 13.02
Common Equity Ratio (%) 9.21 10.26 10.15
Total Capital Ratio (%) 14.82 15.91 15.17
RWA ($B) 165.7 161.2 165.3
Total As At Assets ($B) 398.6 411.6 413.2
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Basel II Tier 1 Capital Ratio and Common Equity Ratio on a pro forma basis at January 31, 2011,
after including the impact of both the Marshall & Ilsley and Lloyd George Management acquisitions
announced in Q1 11, are estimated to be 11.0% and 8.8% respectively
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Annual Dividends Declared Per Share (C$)
Compound Annual Growth Rate
10.1% 8.6%
BMO 15-Year BMO 5-Year 2.80 2.80 2.80
2.71
2.26 2.53 2.53
2.51
2.30
1.85
1.95
1.20 1.72
0.94 1.00 1.12 1.45
0.82 0.88
0.74 1.06 1.15
0.96
0.84 BMO
0.71 0.74
0.59 0.63
Canadian peer group average
96 97 98 99 00 01 02 03 04 05 06 07 08 09 10
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As at January 31, 2011, based on fully implemented Basel III 2019 rules, our Common Equity Ratio
and Tier 1 Ratio are estimated to be 8.2%
1
and 10.7%
1
respectively; and
6.4%
1
and 8.4%
1
respectively after including the impact of both the M&I and
LGM acquisitions announced in Q1 11
|
BMOs Basel III Ratios as at January 31, 2011 are estimated based on announced Basel III 2019
rules, the impact of adoption of IFRS, and assumes no additional capital raise for M&I. For further
details regarding assumptions and factors used in our calculations refer to pages 5, 14 and 15 of
Bank of Montreals First Quarter 2011 Report to Shareholders.
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Investor Presentation | March 2011 5
|
Moderate Economic Recovery
Outlook Canada
Canada United States
Economic Indicators (%) 2010 2011E 2012E 2010 2011E 2012E
GDP Growth 3.1 3.0 2.4 2.8 3.2 2.2
Unemployment Rate 8.0 7.5 7.8 9.6 9.0 9.3
* Forecasts as of March 1, 2011
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Expect expansion to continue in 2011 at a moderately strong pace, with support from low interest
rates, high resource prices and firmer U.S. demand tempered by the high Canadian dollar. The
unemployment rate should ease slightly by year end
|
Consumer spending is expected to moderate somewhat as households manage their debts, while business
investment should remain strong, especially in the resource sector
|
Home sales have turned up recently, and prices have returned to record highs. However, minimal
growth in sales and fairly steady prices are anticipated in 2011, with restraint stemming from
tighter mortgage rules and higher interest rates
|
The U.S. economy continues to improve. Consumer spending rose 4.1% in Q4, the fastest pace in
almost five years, and exports and business investment remained strong. Housing activity is slowly
improving but remains depressed because of the high number of foreclosures, and prices have
softened.
|
Continued growth will reduce the U.S. unemployment rate to 8.6% by year end. However, it could take
several years before the jobless rate returns to a more normal level of around 6%.
Despite higher energy and food costs, inflation is expected to remain low in 2011 in response to
the sizeable amount of slack in the labour market and economy.
Sources: BMO Economics, Haver Analytics
Investor Presentation | March 2011 6
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Strong Financial Performance
A highly stable foundation with visible momentum across all our businesses
C$ billions unless otherwise indicated
Pre-Provision, Pre-Tax Earnings (C$B)
F2009 F2010
Revenue 11.1 12.2
Provision for Credit Losses 1.6 1.0
Expense 7.4 7.6
1.8 2.8
3.3
4.6
3.7
Net Income
ROE (%) 9.9 14.9
Cash Productivity Ratio
1
(%) 66.3 61.9
|
F2008 F2009 F2010
Revenue growth of 10.4%
Cash productivity improved 440 bps
Significant improvement in credit with provision for credit losses declining 35% year-over-year
Annual pre-tax pre-provision earnings
up $937 million
1
Non-GAAP measure, see slide 1 and page 25 of BMOs First Quarter 2011 Report to
Shareholders; Productivity ratios: F2010 62.2%, F2009 66.7%
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Investor Presentation | March 2011 7
|
Long-Term Financial Trends
BMO has delivered positive financial results over the last ten years, with compounded annual Net
Income growth of 4.8%
Revenue ($B)
3.8% CAGR 11.6 12.2
10.0 10.3 10.6
9.0 9.3 9.8 11.1
8.6
8.4 8.6 10.2
9.3
00 01 02 03 04 05 06 07 08 09 10
As reported Items of Note
Net Income ($B) & Return on Equity (%)
18.0 16.4 19.4 18.8 19.2 14.9
13.8 14.4
13.4
13.0
9.9
4.8% CAGR
2.7 2.8 2.4 2.8
2.4
2.3 2.3
1.8 1.4 1.4 1.8 2.1 2.0
1.8
00 01 02 03 04 05 06 07 08 09 10
As reported Items of Note ROE
(as reported)
|
Investor Presentation | March 2011 8
|
Credit Performance Measure
Historical Specific PCL average
BMO Canadian
Competitors
Specific PCL as a % of Average Net Loans and
F2010 0.61 0.58
Acceptances
F2009 0.85 0.72
(excluding Reverse Repos)
1.8 1.69% Historical avg.* 0.44 0.61
High
* Historical avg.: 1991 to 2010
1.6 Low 1.16%
1.4 1.24%
1.2 High
Low 0.64%
1.0
0.8
0.6 0.61%
0.56%
0.58%
0.4
0.44%
0.2
0.0
91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
BMO Cdn Competitors Weighted Average YTD
Historical Average (BMO)* Historical Cdn Competitors Average
BMOs Canadian competitors include: BNS, CM, NA, RY, TD
Competitor average excludes the impact of TDs sectoral provisions
Competitor Q1 results not available until March 8
th
, 2011
Investor Presentation | March 2011 9
|
Q1 2011 Financial Results
Strong first quarter results with good growth in each operating group
C$ billions unless otherwise indicated
Q1 11 Q4 10 Q1 10
Revenue 3.3 3.2 3.0
PCL 0.25 0.25 0.33 Net income 18% above last year
Expense 2.0 2.0 1.8 Strong revenue growth of 10.6%
Net Income (C$ millions) 776 739 657 Pre-tax pre-provision earnings
1 1.32 1.26 1.13 $1.3 billion
Cash EPS ($)
ROE (%) 15.7 15.1 14.3 ROE continues to increase
Cash Productivity Ratio
1
(%) 60.9 62.3 60.5
Common Equity Ratio
2
(%) 10.15 10.26 9.21
Tier 1 Capital Ratio
2
(%) 13.02 13.45 12.53
1
Non-GAAP measures, see slide 1 and page 25 of BMOs First Quarter 2011 Report to
Shareholders;
Productivity ratios: Q1 11 61.2%, Q4 10 62.6%, Q1 10 60.8%; EPS: Q1 11 $1.30, Q4 10
$1.24, Q1 10 $1.12
2
As reported Basel II Ratios
Investor Presentation | March 2011 10
|
Operating Group Performance
Over 70% of revenue and net income from retail businesses in Canada and the US (P&C and PCG)
Q1 11 Revenue by Operating
Group (C$MM) PCG
P&C
(Wealth
(Personal &
Management)
Commercial)
19%
54%
P&C US, 362
Canada -
Commercial, PCG, 661
573
Total
3,514MM
Trading
Canada Products, 595
Personal, 955 Inv & Corp
Banking &
Other, 368
BMO CM
(Investment Banking)
27%
* Corporate Services revenue $(168MM)
Q1 11 Net Income by Operating
Group (C$MM)
P&C PCG
(Personal &
(Wealth
Commercial)
Management)
54%
P&C US 17%
42
P&C Canada PCG
153
444
Total
896MM
BMO CM
257
BMO CM
(Investment Banking)
29%
* Corporate Services
net loss $120MM
* Operating segment results reported on an Expected Loss (EL) basis; see Note 26 on page 157 of
BMOs 2010 Annual Report
Investor Presentation | March 2011 11
|
Personal & Commercial Banking Canada
Flagship business has been performing very strongly...and were not standing still
Q1 2011 revenue and net income increased 8.3% and 10% respectively year-over-year
Maintaining strong margin while volume growth continues
Maintaining cash productivity
1
in the low 50 per cent range
Expanding distribution by investing in branch network, customer contact centre and increasing our
specialized sales force
Opportunity to outperform in commercial and continue to support our customers with tools like BMO
Smartsteps for Business and BMO Business Essentials
Revenue and Net Income
(C$MM) 5,831
5,289
1,412 1,528 1,641
1,429
403 444
Q1 10 Q1 11 F2009 F2010
Net Income Revenue
1 Non-GAAP measure, see slide 1 and page 25 of BMOs First Quarter 2011 Report to
Shareholders
* Operating segment results reported on an Expected Loss (EL) basis; see Note 26 on page 157 of
BMOs 2010 Annual Report.
Investor Presentation | March 2011 12
|
Personal & Commercial Banking U.S.
Continued focus on increasing our presence and visibility in all markets where we compete
Q1 2011 revenue growth of US$29MM or 8.8% from AMCORE
1
transaction, improved loan
spreads and deposit balance growth
Personal business seeing good household growth and new checking account openings
Commercial momentum reflected in strong pipelines for new deposit balances and loan originations
that is expected to lift loan utilization
Retail Net Promoter Score of 41 remains very strong compared to the scores of our major competitors
You can see it. You can see it.
Harris can help make it happen. Harris can help make it happen.
Revenue and Net Income
(US$MM) 1,342 1,366
330 359 243
169
48 42
Q1 10 Q1 11 F2009 F2010
Net Income Revenue
TNS Choice Award
Retail Banking
Metro Chicago
1 On April 23, 2010, acquired certain assets and liabilities of AMCORE Bank N.A. from
the Federal Deposit Insurance Corporation (FDIC) * Operating segment results reported on an
Expected Loss (EL) basis; see Note 26 on page 157 of BMOs 2010 Annual Report.
Investor Presentation | March 2011 13
|
Private Client Group
Continue to differentiate by delivering a client experience anchored in financial and retirement
planning
Excellent results with net income of $153MM up 38%Y/Y and 19% Q/Q; Revenue increased 20% Y/Y and
12% Q/Q with growth across all businesses
Assets under management and administration increased 10% over the prior year; 12% in source
currency
Cash productivity
1
of 69.2% improved 350 basis points from a year ago
Revenue and Net Income
(C$MM) 2,245
2,012
661
550 460
153 361
111
Q1 10 Q1 11 F2009 F2010
Net Income Revenue
AUM
AUA
1
Non-GAAP measure, see slide 1 and page 25 of BMOs First Quarter 2011 Report to
Shareholders; Q1 11 productivity ratio 69.5%, 340 bps better Y/Y * Operating segment results
reported on an Expected Loss (EL) basis; see Note 26 on page 157 of BMOs 2010 Annual Report.
AUM / AUA
(C$B)
250 275 238 264
101 108 104
99
149 167 139 160
Q1 10 Q1 11 F2009 F2010
Investor Presentation | March 2011 14
|
BMO Capital Markets
Concentrated on delivering sustainable quality earnings and improving returns
Q1 2011 revenue growth of 14.3% reflecting solid trading results and an increase in our investment
banking activity
Net income up 21% Y/Y and 20% Q/Q with ROE of 21.9%
Ranked 1st in Equity
1
and 1st in M&A
2
in 2010 for announced and completed
transactions involving a Canadian company
BMO CM U.S. on a positive trajectory with increased investment banking fee revenue supported by
improved M&A activity and a strong pipeline
Revenue and Net Income
(C$MM)
3,085 3,278
963
843 870 816
212 257
Q1 10 Q1 11 F2009 F2010
Net Income Revenue
1
Source: Thomson Reuters;
2
Source: Bloomberg
* Operating segment results reported on an Expected Loss (EL) basis; see Note 26 on page 157 of
BMOs 2010 Annual Report.
Investor Presentation | March 2011 15
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BMO Moving With Our Customers
Strategic Priorities
Maximize earnings growth across all North
1 American personal and commercial banking businesses, focusing on industry-leading
customer experience and sales force productivity.
Accelerate the growth of our wealth
2 management business through client-focused financial planning and by investing for
future growth.
Deliver strong, stable returns in our capital
markets business by providing highly targeted solutions to our core clients from a single
integrated platform.
to grow with our clients, expand our capabilities and reach new customers.
Sustain a culture that focuses on customers, high performance and our people.
Relentless Customer Focus
Remain focused on our strategy and our customers
Concentrate on where customers are going and foster progressive innovation
Brand Underpins Customer Strategy
Maximize the strength of our brand to drive growth
Sustain a Culture of Excellence
Sustain a culture that supports our strategic agenda and is deeply rooted across the organization
Investor Presentation | March 2011 16
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Strengthened North American Platform
Greater Edmonton 37
Greater Vancouver 74
Greater Calgary 42
Halifax / Saint John 22
Greater Winnipeg 27
Greater Montreal 94
Greater Toronto 202
Greater Phoenix 48
Greater Chicago 225
Greater Minneapolis 30
Florida 39
Greater Milwaukee 83
Greater Indianapolis 42
BMO Branches 908 locations
Harris Bank Branches 310 locations
Harris Private Banking (Wealth Management)
BMO Capital Markets
M&I (Marshall & Ilsley) Branches 374 locations
Source: SNL Financial and Company Disclosure
Investor Presentation | March 2011 17
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M&I: Broadening Our Footprint
M&I Branches
Source: SNL Financial and Company Disclosure
Harris already a market leading bank in Illinois
Post-Transaction
Strengthens foundation with top 5 or better retail deposit market share in attractive, contiguous
Midwest markets Indiana, Wisconsin, Minnesota and Missouri and added beach-head in Kansas
Enhanced U.S. distribution capability while building critical mass in U.S. wealth management and
private client business
Top M&I Markets by Deposits
Number of Deposits
Metropolitan Service Area Rank Branches (US$ billions) Population
Milwaukee-Waukesha-West
Allis, WI 1 62 $15.0 1,560,515
Saint Louis, MO-IL 5 18 4.3 2,851,619
Minneapolis-St.
Paul-Bloomington, MN-WI 4 37 2.8 3,328,053
Madison, WI 1 18 2.3 576,264
Phoenix-Mesa-Glendale, AZ 5 45 2.1 4,441,244
Indianapolis, IN 5 31 1.8 1,755,797
Investor Presentation | March 2011 18
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Looking Ahead...
We have the business platform, balance sheet and expertise to generate sustainable growth
Changes to the economy, regulatory environment and North American banking industry are rapid and
ongoing
BMO has emerged as a bank with visible momentum across all of our businesses and a strong capital
position
BMO is well positioned for the future:
Brand Promise stands out and gains relevance in the new environment
P&C Canada, PCG and BMO Capital Markets are producing strong financial results and demonstrating
good market momentum
P&C U.S. continues to focus on the customer experience and increasing our presence and visibility
in the market
Good business opportunities available in the U.S. and each of our businesses is well positioned
Investor Presentation | March 2011 19
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Investor Relations
Contact Information
www.bmo.com/investorrelations
E-mail: investor.relations@bmo.com
Fax: 416.867.3367
VIKI LAZARIS TERRY GLOFCHESKIE ANDREW CHIN
Senior Vice President Director Senior Manager
416.867.6656 416.867.5452 416.867.7019
viki.lazaris@bmo.com terry.glofcheskie@bmo.com andrew.chin@bmo.com
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