BANK OF MONTREAL FINANCIAL HIGHLIGHTS (Canadian $ in millions - - PDF document

Bank of Montreal Second Quarter Report 2000

Page 1

BANK OF MONTREAL FINANCIAL HIGHLIGHTS

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

Apr 30, 2000 Jan 31, 2000 Apr 30, 1999 Change from Apr 30,1999 Apr 30, 2000 Apr 30, 1999 Change from Apr 30,1999 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 $ 1,084 1,200 2,284 100 1,348 322 5 509 12 497 35 $ 1,081 1,042 2,123 100 1,254 279 4 486 12 474 31 $ 1,112 849 1,961 80 1,271 231 5 374 10 364 35 (2.5)% 41.4 16.5 25.0 6.2 39.2 (9.6) 35.9 12.3 36.6 (0.9) $ 2,165 2,242 4,407 200 2,602 601 9 995 24 971 66 $ 2,201 1,694 3,895 160 2,503 472 12 748 22 726 71 (1.6)% 32.4 13.2 25.0 4.0 27.2 (27.2) 33.1 13.5 33.7 (6.8) 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) $ 1.81 1.79 1.76 1.75 0.50 37.45 53.75 14.4 $ 1.72 1.71 1.68 1.66 0.50 35.77 48.15 12.9 $ 1.30 1.29 1.26 1.25 0.47 33.53 60.80 16.2 $ 0.51 0.50 0.50 0.50 0.03 3.92 (7.05) (1.8) $ 3.53 3.50 3.44 3.41 1.00 37.45 53.75 14.4 $ 2.59 2.57 2.51 2.49 0.94 33.53 60.80 16.2 $ 0.94 0.93 0.93 0.92 0.06 3.92 (7.05) (1.8) As at Apr 30, 2000 Jan 31, 2000 Apr 30, 1999 Change from Apr 30,1999 Balance Sheet Summary Assets Loans Deposits Capital funds Common equity Net impaired loans and acceptances Average Balances Loans Assets $ 238,414 136,697 162,067 16,428 10,037 (283) 136,536 233,354 $ 228,525 133,148 154,469 15,920 9,571 (240) 135,659 230,195 $ 219,653 132,984 146,965 15,479 8,916 (212) 134,806 224,762 8.5% 2.8 10.3 6.1 12.6 (33.3) 1.3 3.8 For the three months ended For the six months ended Apr 30, 2000 Jan 31, 2000 Apr 30, 1999 Apr 30, 2000 Apr 30, 1999 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 18.2 226 40.0 19.8 16.5 59.1 0.28 8.71 30.1 8.06 AA- 17.5 201 33.9 19.0 9.8 59.0 0.28 8.89 29.9 7.84 AA- 23.4 132 (5.3) 15.5 2.7 64.8 0.23 8.36 28.3 7.73 AA- 18.2 427 36.9 19.4 13.2 59.1 0.28 8.71 30.1 8.06 AA- 23.4 262 (3.9) 15.3 4.1 64.3 0.22 8.36 28.3 7.73 AA- 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 (1.0) 4.2 9.4 1.44 1.83 21.8 0.87 1.89 52.5 6.2 7.67 11.13 5.1 (12.0) 3.3 9.3 1.35 1.74 21.0 0.82 1.87 49.1 1.8 7.63 10.99 5.1 (0.8) 2.9 13.2 1.81 1.32 17.4 0.66 2.03 43.3 6.3 7.38 10.85 5.1 (1.0) 3.4 9.4 1.44 3.57 21.4 0.84 1.88 50.9 4.0 7.67 11.13 5.1 (0.8) 2.9 13.2 1.81 2.64 17.2 0.64 1.95 43.5 6.2 7.38 10.85 5.1 (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 Second Quarter Report 2000

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BANK OF MONTREAL

CONSOLIDATED STATEMENT OF INCOME

(Unaudited) (Canadian $ in millions except number of common shares) For the three months ended For the six months ended Apr 30, 2000 Jan 31, 2000 Apr 30, 1999 Apr 30, 2000 Apr 30, 1999 Interest, Dividend and Fee Income Loans Securities Deposits with banks $ 2,654 673 263 $ 2,449 701 231 $ 2,321 611 260 $ 5,103 1,374 494 $ 4,887 1,248 537 3,590 3,381 3,192 6,971 6,672 Interest Expense Deposits Subordinated debt Other liabilities 1,905 83 553 1,754 86 491 1,482 83 550 3,659 169 1,044 3,212 169 1,161 2,541 2,331 2,115 4,872 4,542 Net Interest Income Provision for credit losses 1,049 100 1,050 100 1,077 80 2,099 200 2,130 160 Net Interest Income After Provision for Credit Losses 949 950 997 1,899 1,970 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 159 72 341 47 100 57 140 81 203 164 80 224 53 104 52 77 70 218 150 71 185 46 101 46 92 68 90 323 152 565 100 204 109 217 151 421 296 149 369 94 205 95 157 143 186 1,200 1,042 849 2,242 1,694 Net Interest and Other Income 2,149 1,992 1,846 4,141 3,664 Non-Interest Expense Salaries and employee benefits Premises and equipment Communications Other expenses 805 272 64 201 734 257 65 194 698 274 68 226 1,539 529 129 395 1,366 548 134 444 Amortization of intangible assets 1,342 6 1,250 4 1,266 5 2,592 10 2,492 11 Total non-interest expense 1,348 1,254 1,271 2,602 2,503 Income Before Provision for Income Taxes, Non- Controlling Interest in Subsidiaries and Goodwill Income taxes 801 287 738 248 575 196 1,539 535 1,161 401 Non-controlling interest 514 5 490 4 379 5 1,004 9 760 12 Net Income Before Goodwill Amortization of goodwill, net of applicable income tax 509 12 486 12 374 10 995 24 748 22 Net Income $ 497 $ 474 $ 364 $ 971 $ 726 Dividends Declared - preferred shares

• common shares

$ 26 $ 134 $ 25 $ 134 $ 30 $ 125 $ 51 $ 268 $ 60 $ 250 Average Number of Common Shares Outstanding Average Assets 267,820,009 $ 233,354 267,248,718 $ 230,195 265,695,473 $ 224,762 267,531,225 $ 231,757 265,317,845 $ 227,510 Net Income Per Common Share Before Goodwill Basic Fully Diluted Net Income Per Common Share Basic Fully Diluted $ 1.81 1.79 1.76 1.75 $ 1.72 1.71 1.68 1.66 $ 1.30 1.29 1.26 1.25 $ 3.53 3.50 3.44 3.41 $ 2.59 2.57 2.51 2.49 Note: Reporting under United States generally accepted accounting principles would have resulted in consolidated net income of $479, basic earnings per share of $1.69 and fully diluted earnings per share of $1.68 for the three months and $935, $3.31 and $3.27, respectively, for the six months ended April 30, 2000.

Bank of Montreal Second Quarter Report 2000

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BANK OF MONTREAL CONDENSED CONSOLIDATED BALANCE SHEET

(Unaudited) (Canadian $ in millions) As at April 30, 2000 January 31, 2000 October 31, 1999 April 30, 1999 Cash resources Securities $ 23,257 48,398 $ 23,441 44,913 $ 24,036 43,273 $ 23,215 39,035 71,655 68,354 67,309 62,250 Loans Residential mortgages Consumer instalment and other personal loans Credit card loans Loans to businesses and governments Securities purchased under resale agreements 39,190 17,589 1,275 58,887 21,228 38,598 17,052 1,217 59,727 17,958 38,189 16,912 1,160 57,998 25,090 36,196 16,226 919 51,999 28,903 Allowance for credit losses 138,169 (1,472) 134,552 (1,404) 139,349 (1,348) 134,243 (1,259) 136,697 133,148 138,001 132,984 Customers' liability under acceptances Other assets 8,227 21,835 8,195 18,828 6,753 18,552 6,530 17,889 Total Assets $ 238,414 $ 228,525 $ 230,615 $ 219,653 Deposits Banks Businesses and governments Individuals $ 30,248 68,253 63,566 $ 27,869 64,564 62,036 30,398 65,459 61,017 $ 27,930 58,199 60,836 162,067 154,469 156,874 146,965 Acceptances Securities sold but not yet purchased Securities sold under repurchase agreements Other liabilities 8,227 14,334 18,425 18,933 8,195 14,161 19,504 16,276 6,753 10,450 24,177 16,668 6,530 9,181 26,526 14,972 59,919 58,136 58,048 57,209 Subordinated debt 4,721 4,688 4,712 4,699 Shareholders' equity Share capital Preferred shares Common shares Retained earnings 1,670 3,219 6,818 1,661 3,205 6,366 1,668 3,190 6,123 1,864 3,152 5,764 11,707 11,232 10,981 10,780 Total Liabilities and Shareholders' Equity $ 238,414 $ 228,525 $ 230,615 $ 219,653 Notes:

• 1. These consolidated financial statements should be read in conjunction with our consolidated financial statements for the year ended October 31,

1999 as set out on pages 73 to 99 of our 1999 Annual Report. These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles, including the requirements of the Superintendent of Financial Institutions Canada, using the same accounting policies and methods of computation as were used for our consolidated financial statements for the year ended October 31, 1999.

• 2. During the quarter the aggregate consideration for which our shares may be issued was increased to an unlimited amount upon approval by our

shareholders and regulators. For additional information refer to pages 86 and 87 of our Annual Report, and pages 10 to 12 of our Proxy Circular.

Bank of Montreal Second Quarter Report 2000

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BANK OF MONTREAL CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW

(Unaudited) (Canadian $ in millions) For the three months ended For the six months ended April 30, 2000 April 30, 1999 April 30, 2000 April 30, 1999 Cash Flows From (Used in) Operating Activities Net income Adjustments to determine net cash flows $ 497 (520) $ 364 1,286 $ 971 (4,748) $ 726 4,102 (23) 1,650 (3,777) 4,828 Cash Flows From (Used in) Financing Activities Deposits Other liabilities Debt and share capital Dividends paid 7,598 (1,821) 14 (167) 388 (4,118) (51) (155) 5,193 (3,172) 29 (319) 2,982 (1,689) (129) (310) 5,624 (3,936) 1,731 854 Cash Flows From (Used in) Investing Activities Investment securities Loans Premises and equipment – net purchases Interest bearing deposits with banks Acquisition of an interest in a subsidiary (2,049) (3,649) (28) 41 (59) 309 1,417 (48) 611

• 285

1,104 (63) 1,082 (59) 1,355 (3,420) (132) (3,662)

• (5,744)

2,289 2,349 (5,859) Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Period (143) 2,865 3 2,782 303 2,419 (177) 2,962 Cash and Cash Equivalents at End of Period $ 2,722 $ 2,785 $ 2,722 $ 2,785

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY

(Unaudited) (Canadian $ in millions) For the six months ended April 30, 2000 April 30, 1999 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

• perations, net of hedging activities and applicable income taxes

Costs of proposed merger, net of applicable income taxes $ 10,981 971 (51) (268)

• 29

2 43

• $ 10,608

726 (60) (250) (72) 57 (22) (182) (25) Balance at End of Period $ 11,707 $ 10,780 Share Capital Information April 30, 2000 Preferred Shares Number Principal Amount Convertible into… Class B – Series 1 10,000,000 $ 250 common shares 1 Class B – Series 2 10,000,000 370 common shares 1 Class B – Series 3 16,000,000 400 common shares 1 Class B – Series 4 8,000,000 200 common shares 1 Class B – Series 5 8,000,000 200

• Class B – Series 6

10,000,000 250 common shares 1 Common Shares 268,025,702 3,219

• Subordinated Debt – Series 13

n/a 150 common shares 1 Stock options issued for investment in Grupo Financiero Bancomer 9,957,285 n/a 9,957,285 common shares Stock options issued under Stock Option Plan 17,722,050 n/a 17,722,050 common shares

1. The number of shares issuable on conversion is not determinable until the date of conversion. 2. n/a – not applicable 3. For additional information refer to pages 86 and 87 of our 1999 Annual Report.