BANK OF MONTREAL BANK OF MONTREAL BANK OF MONTREAL BANK OF - - PDF document

Bank of Montreal First Quarter Report 2000

Page Page Page Page 1 1 1 1

BANK OF MONTREAL BANK OF MONTREAL BANK OF MONTREAL BANK OF MONTREAL FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS FINANCIAL HIGHLIGHTS

(Canadian $ in millions except as noted) For the three months ended

January 31, January 31, January 31, January 31, 2000 2000 2000 2000 October 31, 1999 January 31, 1999 Change from January 31, 1999 Net Income Statement Net Income Statement Net Income Statement Net Income Statement Net interest income (TEB) (a) Other income Total revenue (TEB) (a) Provision for credit losses Non-interest expense Provision for income taxes (TEB) (a) Non-controlling interest in subsidiaries Net income before goodwill Amortization of goodwill, net of applicable income tax Net income Taxable equivalent adjustment $ 1,081 $ 1,081 $ 1,081 $ 1,081 1,042 1,042 1,042 1,042 2,123 2,123 2,123 2,123 100 100 100 100 1,254 1,254 1,254 1,254 279 279 279 279 4 4 4 4 486 486 486 486 12 12 12 12 474 474 474 474 31 31 31 31 $ 1,124 884 2,008 80 1,501 153 4 270 12 258 33 $ 1,089 845 1,934 80 1,232 243 7 372 10 362 36 (0.7)% 23.3 9.8 25.0 1.8 15.6 (39.3) 30.2 11.2 30.8 (12.6) Per Common Share ($) Per Common Share ($) Per Common Share ($) Per Common Share ($) Net income before goodwill

• basic
• fully diluted

Net income

• basic
• fully diluted

Dividends declared Book value per share Market value per share Total market value of common shares ($ billions) $ 1.72 $ 1.72 $ 1.72 $ 1.72 1.71 1.71 1.71 1.71 1.68 1.68 1.68 1.68 1.66 1.66 1.66 1.66 0.50 0.50 0.50 0.50 35.77 35.77 35.77 35.77 48.15 48.15 48.15 48.15 12.9 12.9 12.9 12.9 $ 0.91 0.90 0.87 0.86 0.47 34.87 56.65 15.1 $ 1.29 1.28 1.25 1.24 0.47 33.09 66.75 17.7 $ 0.43 0.43 0.43 0.42 0.03 2.68 (18.60) (4.8) As at January 31, January 31, January 31, January 31, 2000 2000 2000 2000 October 31, 1999 January 31, 1999 Change from January 31, 1999 Balance Sheet Summary Balance Sheet Summary Balance Sheet Summary Balance Sheet Summary Assets Loans Deposits Capital funds Common equity Net impaired loans and acceptances Average Balances Average Balances Average Balances Average Balances Loans Assets $ 228,525 $ 228,525 $ 228,525 $ 228,525 133,148 133,148 133,148 133,148 154,469 154,469 154,469 154,469 15,920 15,920 15,920 15,920 9,571 9,571 9,571 9,571 (240) (240) (240) (240) 135,659 135,659 135,659 135,659 230,195 230,195 230,195 230,195 $ 230,615 138,001 156,874 15,693 9,313 (256) 134,362 225,321 $ 224,919 134,481 146,577 15,413 8,785 (319) 136,226 230,169 1.6% (1.0) 5.4 3.3 8.9 24.8 (0.4) 0.0 January 31, January 31, January 31, January 31, 2000 2000 2000 2000 October 31, 1999 January 31, 1999 Three Three Three Three Months Months Months Months Twelve Months Three Months Primary Financial Measures (%) (b) Primary Financial Measures (%) (b) Primary Financial Measures (%) (b) Primary Financial Measures (%) (b) 5 year total shareholder return Net economic profit ($ millions) Earnings per share growth Return on equity Revenue growth Expense-to-revenue ratio Provision for credit losses as a % of average loans and acceptances Gross impaired loans and acceptances as a % of equity and allowance for credit losses Liquidity ratio Tier 1 capital ratio Credit rating 17.5 17.5 17.5 17.5 201 201 201 201 33.9 33.9 33.9 33.9 19.0 19.0 19.0 19.0 9.8 9.8 9.8 9.8 59.0 59.0 59.0 59.0 0.28 0.28 0.28 0.28 8.89 8.89 8.89 8.89 29.9 29.9 29.9 29.9 7.84 7.84 7.84 7.84 AA- AA- AA- AA- 22.0 401 1.3 14.1 9.0 66.7 0.22 8.53 29.2 7.72 AA- 21.6 130 (2.4) 15.1 5.6 63.7 0.22 7.28 28.6 7.41 AA- Other Financial Ratios (% except as noted) (b) Other Financial Ratios (% except as noted) (b) Other Financial Ratios (% except as noted) (b) Other Financial Ratios (% except as noted) (b) Total shareholder return Dividend yield Price-to-earnings ratio (times) Market-to-book value (times) Cash earnings per share – basic ($) Cash return on common shareholders’ equity Return on average assets Net interest margin Other income as a % of total revenue Expense growth Tier 1 capital ratio - U.S. basis Total capital ratio Equity-to-assets ratio (12.0) (12.0) (12.0) (12.0) 3.3 3.3 3.3 3.3 9.3 9.3 9.3 9.3 1.35 1.35 1.35 1.35 1.74 1.74 1.74 1.74 21.0 21.0 21.0 21.0 0.82 0.82 0.82 0.82 1.87 1.87 1.87 1.87 49.1 49.1 49.1 49.1 1.8 1.8 1.8 1.8 7.63 7.63 7.63 7.63 10.99 10.99 10.99 10.99 5.1 5.1 5.1 5.1 (7.4) 2.9 11.9 1.62 5.01 15.9 0.61 1.95 44.3 10.5 7.42 10.77 4.9 8.7 2.8 14.3 2.02 1.32 17.1 0.62 1.88 43.7 6.0 7.15 10.53 4.9

(a) Reported on a taxable equivalent basis (TEB). (b) For the period ended or as at, as appropriate. (c) All ratios in this report are based on unrounded numbers.

Bank of Montreal First Quarter Report 2000

Page Page Page Page 2 2 2 2

BANK OF MONTREAL BANK OF MONTREAL BANK OF MONTREAL BANK OF MONTREAL

CONSOLIDATED STATEMENT OF INCOME

CONSOLIDATED STATEMENT OF INCOME CONSOLIDATED STATEMENT OF INCOME CONSOLIDATED STATEMENT OF INCOME

(Unaudited) (Canadian $ in millions except number of common shares) For the three months ended January 31, 2000 January 31, 2000 January 31, 2000 January 31, 2000 October 31, 1999 January 31, 1999 Interest, Dividend and Fee Income Interest, Dividend and Fee Income Interest, Dividend and Fee Income Interest, Dividend and Fee Income Loans Securities Deposits with banks $ 2,449 $ 2,449 $ 2,449 $ 2,449 701 701 701 701 231 231 231 231 $ 2,364 632 274 $ 2,566 637 277 3,381 3,381 3,381 3,381 3,270 3,480 Interest Expense Interest Expense Interest Expense Interest Expense Deposits Subordinated debt Other liabilities 1,754 1,754 1,754 1,754 86 86 86 86 491 491 491 491 1,571 85 523 1,730 86 611 2,331 2,331 2,331 2,331 2,179 2,427 Net Interest Income Net Interest Income Net Interest Income Net Interest Income Provision for credit losses 1,050 1,050 1,050 1,050 100 100 100 100 1,091 80 1,053 80 Net Interest Income After Provision for Credit Losses Net Interest Income After Provision for Credit Losses Net Interest Income After Provision for Credit Losses Net Interest Income After Provision for Credit Losses 950 950 950 950 1,011 973 Other Income Other Income Other Income Other Income Deposit and payment service charges Lending fees Capital market fees Card services Investment management and custodial fees Mutual fund revenues Trading revenues Securitization revenues Other fees and commissions 164 164 164 164 80 80 80 80 224 224 224 224 53 53 53 53 104 104 104 104 52 52 52 52 77 77 77 77 70 70 70 70 218 218 218 218 165 91 265 55 103 60 52 84 9 146 78 184 48 104 49 65 75 96 1,042 1,042 1,042 1,042 884 845 Net Interest and Other Income Net Interest and Other Income Net Interest and Other Income Net Interest and Other Income 1,992 1,992 1,992 1,992 1,895 1,818 Non-Interest Expense Non-Interest Expense Non-Interest Expense Non-Interest Expense Salaries and employee benefits Premises and equipment Communications Other expenses 734 734 734 734 257 257 257 257 65 65 65 65 194 194 194 194 749 295 72 239 668 274 66 218 Amortization of intangible assets 1,250 1,250 1,250 1,250 4 4 4 4 1,355 5 1,226 6 Restructuring charge 1,254 1,254 1,254 1,254

• 1,360

141 1,232

• Total non-interest expense

1,254 1,254 1,254 1,254 1,501 1,232 Income Before Provision for Income Taxes, Non-Controlling Interest in Income Before Provision for Income Taxes, Non-Controlling Interest in Income Before Provision for Income Taxes, Non-Controlling Interest in Income Before Provision for Income Taxes, Non-Controlling Interest in Subsidiaries and Goodwill Subsidiaries and Goodwill Subsidiaries and Goodwill Subsidiaries and Goodwill Income taxes 738 738 738 738 248 248 248 248 394 120 586 207 Non-controlling interest 490 490 490 490 4 4 4 4 274 4 379 7 Net Income Before Goodwill Net Income Before Goodwill Net Income Before Goodwill Net Income Before Goodwill Amortization of goodwill, net of applicable income tax 486 486 486 486 12 12 12 12 270 12 372 10 Net Income Net Income Net Income Net Income $ 474 $ 474 $ 474 $ 474 $ 258 $ 362 Dividends Declared Dividends Declared Dividends Declared Dividends Declared - preferred shares

• common shares

$ 25 $ 25 $ 25 $ 25 $ 134 $ 134 $ 134 $ 134 $ 27 $ 125 $ 30 $ 125 Average Number of Common Shares Outstanding Average Number of Common Shares Outstanding Average Number of Common Shares Outstanding Average Number of Common Shares Outstanding Average Assets Average Assets Average Assets Average Assets 267,248,718 267,248,718 267,248,718 267,248,718 $ 230,195 $ 230,195 $ 230,195 $ 230,195 266,761,950 $ 225,321 264,952,530 $ 230,169

Note: Reporting under United States generally accepted accounting principles would have resulted in Consolidated Net Income of $456 basic earnings per share of $1.61 and fully diluted earnings per share of $1.59 for the three months ended January 31, 2000.

Bank of Montreal First Quarter Report 2000

Page Page Page Page 3 3 3 3

BANK OF MONTREAL BANK OF MONTREAL BANK OF MONTREAL BANK OF MONTREAL CONDENSED CONSOLIDATED BALANCE SHEET CONDENSED CONSOLIDATED BALANCE SHEET CONDENSED CONSOLIDATED BALANCE SHEET CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited) (Canadian $ in millions) As at January 31, 2000 January 31, 2000 January 31, 2000 January 31, 2000 October 31, 1999 January 31, 1999 Cash resources Securities $ 23,441 $ 23,441 $ 23,441 $ 23,441 44,913 44,913 44,913 44,913 $ 24,036 43,273 $ 23,823 40,420 68,354 68,354 68,354 68,354 67,309 64,243 Loans Residential mortgages Consumer instalment and other personal loans Credit card loans Loans to businesses and governments Securities purchased under resale agreements 38,598 38,598 38,598 38,598 17,052 17,052 17,052 17,052 1,217 1,217 1,217 1,217 59,727 59,727 59,727 59,727 17,958 17,958 17,958 17,958 38,189 16,912 1,160 57,998 25,090 36,349 15,817 882 50,658 31,996 Allowance for credit losses 134,552 134,552 134,552 134,552 (1,404) (1,404) (1,404) (1,404) 139,349 (1,348) 135,702 (1,221) 133,148 133,148 133,148 133,148 138,001 134,481 Customers' liability under acceptances Other assets 8,195 8,195 8,195 8,195 18,828 18,828 18,828 18,828 6,753 18,552 6,649 19,546 Total Assets Total Assets Total Assets Total Assets $ 228,525 $ 228,525 $ 228,525 $ 228,525 $ 230,615 $ 224,919 Deposits Banks Businesses and governments Individuals $ 27,869 $ 27,869 $ 27,869 $ 27,869 64,564 64,564 64,564 64,564 62,036 62,036 62,036 62,036 $ 30,398 65,459 61,017 $ 28,926 56,968 60,683 154,469 154,469 154,469 154,469 156,874 146,577 Acceptances Securities sold but not yet purchased Securities sold under repurchase agreements Other liabilities 8,195 8,195 8,195 8,195 14,161 14,161 14,161 14,161 19,504 19,504 19,504 19,504 16,276 16,276 16,276 16,276 6,753 10,450 24,177 16,668 6,649 8,038 31,655 16,587 58,136 58,136 58,136 58,136 58,048 62,929 Subordinated debt 4,688 4,688 4,688 4,688 4,712 4,750 Shareholders' equity Share capital Preferred shares Common shares Retained earnings 1,661 1,661 1,661 1,661 3,205 3,205 3,205 3,205 6,366 6,366 6,366 6,366 1,668 3,190 6,123 1,878 3,138 5,647 11,232 11,232 11,232 11,232 10,981 10,663 Total Liabilities and Shareholders' Equity Total Liabilities and Shareholders' Equity Total Liabilities and Shareholders' Equity Total Liabilities and Shareholders' Equity $ 228,525 $ 228,525 $ 228,525 $ 228,525 $ 230,615 $ 224,919 Note: These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles, including the accounting requirements of the Superintendent of Financial Institutions Canada.

Bank of Montreal First Quarter Report 2000

Page Page Page Page 4 4 4 4

BANK OF MONTREAL BANK OF MONTREAL BANK OF MONTREAL BANK OF MONTREAL CONDENSED CONSOLIDATED STATEME CONDENSED CONSOLIDATED STATEME CONDENSED CONSOLIDATED STATEME CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW NT OF CASH FLOW NT OF CASH FLOW NT OF CASH FLOW

(Unaudited) (Canadian $ in millions) For the three months ended January 31, 2000 January 31, 2000 January 31, 2000 January 31, 2000 January 31, 1999 Cash Flows From (Used in) Operating Activities Cash Flows From (Used in) Operating Activities Cash Flows From (Used in) Operating Activities Cash Flows From (Used in) Operating Activities Net income Adjustments to determine net cash flows $ 474 $ 474 $ 474 $ 474 (4,228) (4,228) (4,228) (4,228) $ 362 2,816 (3,754) (3,754) (3,754) (3,754) 3,178 Cash Flows From (Used in) Financing Activities Cash Flows From (Used in) Financing Activities Cash Flows From (Used in) Financing Activities Cash Flows From (Used in) Financing Activities Deposits Other liabilities Debt and share capital Dividends paid (2,405) (2,405) (2,405) (2,405) (1,351) (1,351) (1,351) (1,351) 15 15 15 15 (152) (152) (152) (152) 2,594 2,429 (78) (155) (3,893) (3,893) (3,893) (3,893) 4,790 Cash Flows From (Used in) Investing Activities Cash Flows From (Used in) Investing Activities Cash Flows From (Used in) Investing Activities Cash Flows From (Used in) Investing Activities Investment securities Loans Premises and equipment – net purchases Interest bearing deposits with banks 2,334 2,334 2,334 2,334 4,753 4,753 4,753 4,753 (35) (35) (35) (35) 1,041 1,041 1,041 1,041 1,046 (4,837) (84) (4,273) 8,093 8,093 8,093 8,093 (8,148) Net Net Net Net Increase Increase Increase Increase (Decrease) in Cash and Cash Equivalents (Decrease) in Cash and Cash Equivalents (Decrease) in Cash and Cash Equivalents (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Cash and Cash Equivalents at Beginning of Cash and Cash Equivalents at Beginning of Cash and Cash Equivalents at Beginning of Period Period Period Period 446 446 446 446 2,419 2,419 2,419 2,419 (180) 2,962 Cash and Cash Equivalents at End of Cash and Cash Equivalents at End of Cash and Cash Equivalents at End of Cash and Cash Equivalents at End of Period Period Period Period $ 2,865 $ 2,865 $ 2,865 $ 2,865 $ 2,782

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited) (Canadian $ in millions) For the three months ended January 31, 2000 January 31, 2000 January 31, 2000 January 31, 2000 January 31, 1999 Balance at Beginning of Period Balance at Beginning of Period Balance at Beginning of Period Balance at Beginning of Period Net income Dividends - Preferred shares

• Common shares

Preferred share redemption Common share issues Translation adjustment on preferred shares issued in a foreign currency Unrealized gain (loss) on translation of net investment in foreign operations, net of hedging activities and applicable income taxes Costs of proposed merger, net of applicable income taxes $ 10,981 $ 10,981 $ 10,981 $ 10,981 474 474 474 474 (25) (25) (25) (25) (134) (134) (134) (134)

• 15

15 15 15 (7) (7) (7) (7) (72) (72) (72) (72)

• $ 10,608

362 (30) (125) (72) 43 (8) (90) (25) Balance at End of Period Balance at End of Period Balance at End of Period Balance at End of Period $ 11,232 $ 11,232 $ 11,232 $ 11,232 $ 10,663