[PPT] - Q1 10 Institutional Investor Presentation Forward Looking PowerPoint Presentation

SLIDE 1

Institutional Investor Presentation

Q1 10

SLIDE 2

1

Institutional Investor Presentation • Q1 2010

Forward Looking Statements

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 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 2010 and beyond, our strategies or future actions,
ur 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. 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

ur 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. 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 32 and 33 of BMO’s 2009 Annual Report, which outlines in detail certain key factors that may affect BMO’s 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

rganization 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. Assumptions about the performance of the Canadian and U.S. economies as well as overall market conditions and their combined effect on the bank’s business, including those described under the heading Economic Outlook and Review in our First Quarter 2010 Report to Shareholders, 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. Non-GAAP Measures 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 Montreal’s First Quarter 2010 Report to Shareholders and 2009 Annual Report to Shareholders all of which are available on

ur website at www.bmo.com/investorrelations.

Examples of non-GAAP amounts or measures include: cash earnings, cash productivity and cash operating leverage measures, and cash earnings per share; revenue and other measures presented on a taxable equivalent basis (teb); amounts presented net of applicable taxes; net economic profit and core results and measures that exclude items that are not considered reflective of ongoing operations. For example, core measures and results which exclude the impact of impaired loans, Visa litigation accruals, acquisition integration costs. Bank of Montreal provides supplemental information on combined business segments to facilitate comparisons to peers.

SLIDE 3

2

Institutional Investor Presentation • Q1 2010

Bank of Montreal (BMO Financial Group)

4th largest bank in Canada measured by total assets as at January 31, 2010 100% ownership of Chicago-based Harris Bank

1 Balances reported in Canadian dollars. Exchange rates are: F2009 average: Cdn/U.S. $1.1648 / As at October 31, 2009: Cdn/U.S. $1.0819 / As at January 31, 2010: $1.0693

Revenue C$11.1 billion (US$9.51 billion) Net Income C$1.8 billion (US$1.51 billion) Cash EPS (reported) C$3.14 (US$2.70) PCL C$1.6 billion (US$1.41 billion) Average Assets C$439 billion (US$3771 billion) Capital Ratios Tier 1 - 12.24% TCE/RWA – 9.21% Listings NYSE, TSX (Ticker: BMO) Share Price Oct 31/09: NYSE – US$46.37 TSX – C$50.06 Jan 31/10: NYSE – US$48.71 TSX – C$52.00 Market Cap Oct 31/09: C$28 billion (US$26 billion1) Jan 31/10: C$29 billion (US$27 billion1) # of Employees 36,000 Over 10 million personal, commercial, corporate and institutional customers

(Fiscal Year-end)

F2009 Results

SLIDE 4

3

Institutional Investor Presentation • Q1 2010

Reasons to Invest in BMO

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

Strong financial position

Balanced approach to capital management
Tier 1 Capital Ratio of 12.53% at January 31, 2010
Tangible common equity to risk-weighted assets ratio of 9.5% at

January 31, 2010

Strong senior debt ratings

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
Financial performance and consistent dividend payment track record
Strategic approach to corporate responsibility and sustainability

1.85 2.26 2.71 2.80 2.80 2005 2006 2007 2008 2009

Annual Dividend Declared (C$/share)

24.1 (5.8) (27.9) 25.1 3.7 2005 2006 2007 2008 2009

Twelve Month Average Total Shareholder Return (%)

CAGR = 12.0%

SLIDE 5

4

Institutional Investor Presentation • Q1 2010

0.74 0.82 0.88 0.94 1.00 1.12 1.20 1.34 1.59 1.85 2.26 2.71 2.80 2.80 2.

2.80 80

2.53 2.53 2.51 2.30 1.95 1.72 1.45 1.15 1.06 0.59 0.63 0.71 0.74 0.84 0.96

96 96 97 97 98 98 99 99 00 00 01 01 02 02 03 03 04 04 05 05 06 06 07 07 08 08 09 09 10 10

Annual Dividends Declared Per Share (C$)

Annual Dividend

CAGR = 10. CAGR = 10.1% 1% BMO 15- BMO 15-Year ear2

Target Payout Ratio 45% - 55%

BMO Canadian peer group average 1 1 1Estimate based on the assumption that current dividend level continues for the rest of the year 2CAGR based on dividends declared 1995 - 2010

SLIDE 6

5

Institutional Investor Presentation • Q1 2010

U.S. U.S.

Fragmented market
Multiple regulators
Choice of State vs. National Charter

allows flexibility in choosing regulatory environment and structuring operations

Bank Holding Companies provide flexibility

in structuring business activities

Branch restrictions in U.S. and various

limits on interstate expansion

More likely to securitize residential

mortgages as prepayment penalties borne by the bank

Consolidation continues

Canada Canada

Mature oligopoly: 6 chartered banks Single regulator – OSFI Almost no subprime in this market Governed by the Bank Act Foreign ownership limits in place Integrated business model: customers purchase multiple products from one institution Residential mortgages are lower risk due to:

No lending with loan to value above 80%

without government backed insurance

Shorter terms
Prepayment penalties borne by the individual
Lack of interest deductibility from income taxes
Significant portion of mortgages generally

retained on balance sheet

Current government not permitting bank mergers amongst big banks

Systemic Differences Between Canadian & U.S. Banks

SLIDE 7

6

Institutional Investor Presentation • Q1 2010

Canada has the “soundest and healthiest” banking system in the world based on a recent survey by the World Economic Forum No bailouts by the Canadian government have been needed in the downturn Canadian banks remain among the best capitalized banks in the world

BMO Tier 1 Capital Ratio is 12.53% vs. CAD peer average of 12.2% BMO TCE / RWA1 Ratio is 9.51% vs. CAD peer average of 8.95%

The market for residential secured borrowing in Canada is typically of high

quality. Approximately 5% of mortgage borrowers are considered to be

non-prime and the large banks are generally not significant players in this space

BMO ‘s exposure to U.S. subprime lending is not material

More diversified by product and client type, business line and geography BMO was ranked in the top 10 for market cap in North America as of March 10th, 20102

Performance ... Canadian versus U.S. Banks

1 Tangible Common Equity to Risk Weighted Assets Ratio 2 Source: Bloomberg

SLIDE 8

7

Institutional Investor Presentation • Q1 2010

Canadians in Better Financial Shape Than Americans

0.6 0.8 1.0 1.2 1.4 1.6 1.8 1995 1996 1998 2000 2002 2003 2005 2007 2009 3.6 4.0 4.4 4.8 5.2 5.6 6.0 1995 1996 1998 2000 2002 2003 2005 2007 2009 30 37 44 51 58 65 72 79 1995 1996 1998 2000 2002 2003 2005 2007 2009

Household Liabilities Household Liabilities1

(ratio to personal income) Canada Canada US US US US Canada Canada

Tech. Stock

Bubble Housing Bubble

Net Worth Net Worth

(ratio to personal income) Canada Canada US US

Homeo Homeowner Equity ner Equity

(% of real estate values)

1Household liabilities includes unincorporated businesses Source: Statistics Canada, US Federal Reserve, US Bureau of Economic Analysis *As of March 10, 2010

SLIDE 9

8

Institutional Investor Presentation • Q1 2010

40
20

20 40 60 80 2000 2001 2002 2004 2005 2006 2008 2009

20
10

10 20 2000 2001 2002 2004 2005 2006 2008 2009

Sales Sales Prices Prices

Housing Strong In Canada…Steadier in U.S.

Existing Existing Homes (Y/Y % change Homes (Y/Y % change; 3 month moving average) ; 3 month moving average)

The housing market has made a full

recovery in Canada, and is stabilizing in the U.S.

The market in Canada is enjoying

strong sales and record high prices

U.S. and Chicago house prices have

stabilized.1

Canada Canada US US Canada Canada US US

1Case-Shiller: December 2009 Source: Canadian Real Estate Association, National Association of Realtors *As of March 10, 2010

SLIDE 10

9

Institutional Investor Presentation • Q1 2010

Soft Recovery in a Low Interest Rate Environment

8
6
4
2

2 4 6 8 2005 2006 2007 2008 2009 2010 2011 1 2 3 4 5 6 2005 2006 2007 2008 2009 2010 2011 3.0 3.0 10 3.1 (2.4) US 3.2 (2.6) Canada 11 09 Forecast

Canada Canada US US

Real G Real GDP

(Q/Q % change: annualized rate)

Cana Canadian dian Interest Rates Interest Rates

(%: as of March 10, 2010)

Forecast

10-yea 10-year Bo Bond nd Over Overnight night Rate Rate 3.26% 0.25%

Source: Statistics Canada, US Bureau of Economic Analysis, Bank of Canada, US Federal Reserve *As of March 10, 2010

Subdued inflation will

support a low interest-rate environment for some time

Recession Over, Moderate

Recovery Beginning

SLIDE 11

10

Institutional Investor Presentation • Q1 2010

Economic Outlook

* Outlook as at March 10, 2010

Canada Canada

The economy is turning up after a three-quarter recession, with modest growth in 2009Q3 and

strong growth in Q4. Record-low interest rates and unprecedented fiscal stimulus are fostering the

recovery. We expect the expansion to gain traction in the year ahead.
The housing market continues to strengthen due to record-low mortgage rates and improving

consumer confidence, and should remain healthy this year amid low interest rates.

Consumer spending is strengthening, though business investment is lagging the recovery.
The Bank of Canada is expected to keep interest rates near zero until July 2010 because of low

inflation and relatively high unemployment.

The Canadian dollar is expected to strengthen towards parity with the U.S. dollar in coming

months as a result of firmer commodity prices and superior Canadian fiscal finances.

U.S. U.S.

The economy is growing after the worst recession in seven decades, supported by aggressive

monetary policy and fiscal stimulus programs. The recovery is expected to continue in 2010, albeit at a moderate rate of about 3% as consumers rebuild savings.

The housing market is recovering and prices are stabilizing after a three-year slump. Though

weakening recently, existing home sales have generally trended higher in response to very good affordability and the first-time home buyer tax credit.

The Fed is expected to keep rates near zero until September to encourage a durable recovery.

SLIDE 12

11

Institutional Investor Presentation • Q1 2010

Economy … Recession Over

Sources: BMO Economics, Haver Analytics 1Annual average *Forecasts as of March 10, 2010

Eurozone United States Canada (6.5) (9.2) (9.9) (1.6) (3.1) (3.5) Budget Surplus / GDP (3.2) (3.3) (3.0) (2.5) (2.5) (2.7) Current Account Balance / GDP 9.8 10.3 9.4 8.6 9.6 9.3 7.9 8.2 8.3 Unemployment Rate 2.4 0.9 1.2 2.1 0.3 0.2 2.5 0.6 0.3 Interest Rate (3mth Tbills)1 (1.0) 2.9 2.2 (0.6) 3.5 3.2 0.2 Private Consumption Growth 2.1 1.4 0.3 1.8 2.3 (0.3) 1.8 2.1 0.3 Inflation 2.4 1.3 (4.0) 3.1 3.0 (2.4) 3.2 3.0 (2.6) GDP Growth 2011E 2010E 2009 2011E 2010E 2009 2011E 2010E 2009 Economic Indicators (%)

SLIDE 13

12

Institutional Investor Presentation • Q1 2010

1

BMO’s Strategic Priorities

Maximize earnings growth across all North American personal and commercial banking businesses, focusing on industry- leading customer experience and sales force productivity.

2

Accelerate the growth in our wealth management business by providing our clients with exceptional advice, emphasizing retirement and financial planning.

3

Deliver strong, stable returns in our capital markets business by providing highly targeted solutions to our core clients, everywhere we compete, from a single integrated platform.

4

Grow our business in select global markets to meet our customers’ expanding needs.

5

Sustain a culture that focuses on customers, high performance and our people.

SLIDE 14

13

Institutional Investor Presentation • Q1 2010

U.S. Growth Potential

Chicago is the hub of Midwest region

Population base of 60 million people, almost

double that of Canada’s population

GDP of $2.6 trillion U.S.

Harris is a well known brand in the attractive U.S. Midwest market Uniquely positioned between smaller community banks and larger network banks New opportunities for organic growth due to the erosion of big network banks in the Midwest Current market conditions may provide

pportunities

Minnesota Wisconsin Michigan Ohio Indiana Illinois Missouri Iowa

SLIDE 15

14

Institutional Investor Presentation • Q1 2010

Acquisition History

U.S. Retail Acquisitions Year Amount (US $MM) Harris Bank 1984 547 Barrington 1985 32

St. Charles & Batavia

1988 26 Libertyville 1990 6 Frankfort 1990 17 Suburban Bancorp 1994 222 Household Int’l 1996 277 Joliet 2001 221 Lakeland 2004 37 New Lenox State Bank (NLSB) 2004 235 Mercantile 2004 161 Edville (Villa Park) 2005 66 First National Bank and Trust 2006 290 Merchants & Manufacturers 2008 135 Ozaukee 2008 180 Total 2,452

Harris Bank

Recognized and respected bank, in

business for 126 years

Established strengths in both personal

and commercial businesses, serving

ver 1 million customers

Distribution network

279 branches

188 in Illinois 39 in Wisconsin 52 in Indiana

634 ATM’s
Internet & telephone banking

Chicago

Solid growth in population and median

household incomes

Highly diversified economy
Banking industry still fragmented

SLIDE 16

15

Institutional Investor Presentation • Q1 2010 As reported Items of Note

Long-Term Financial Trends

11.1 10.2 9.3 10.0 9.8 9.3 9.0 8.6 8.6 8.4 7.7 11.6 10.6 10.3

99 00 01 02 03 04 05 06 07 08 09

Revenue ($B) Net Income ($B) & Return on Equity (%) BMO has delivered positive financial results over the last ten years, with compounded

annual Net Income growth of 5.8%1

4.2% CAGR1

1.8 2.0 2.1 2.7 2.4 2.3 1.8 1.4 1.4 1.8 1.3 2.3 2.4 2.8

14.1 18.0 13.8 13.4 16.4 19.4 18.8 19.2 14.4 13.0 9.9

99 00 01 02 03 04 05 06 07 08 09

5.8% CAGR1 As reported Items of Note ROE

(as reported) 1 Excluding items of note As reported results: Revenue CAGR of 3.7% Net Income CAGR of 3.3%

SLIDE 17

16

Institutional Investor Presentation • Q1 2010

2.40 2.66 2.13 1.98 1.79 2.77 2.40 2.26 2005 2006 2007 2008 2009 9.9 13.0 14.4 19.2 18.8 18.8 16.0 12.7 2005 2006 2007 2008 2009

Fiscal 2009 Financial Highlights

Net Income $1.8 billion, ROE 9.9% (as reported) Excluding items of note1

Net Income $2.3 billion
ROE 12.7%

Results reflect strength and diversity of core business in challenging market

ROE (%) Net Income ($B)

1 Items of note include: F2007: Commodities losses, capital markets environment charges, increase to the general allowance, and restructuring charges F2008: Capital markets environment charges and increase to the general allowance F2009: Capital markets environment charges, severance costs and increase to the general allowance

As reported Items of Note

SLIDE 18

17

Institutional Investor Presentation • Q1 2010 PC PCG $2,012 17% P&C P&C $6,420 54% BM BMO C CM $3,466 29%

Operating Groups

Personal & Commercial Banking (P&C)

Over 8 million customers across Canada & the U.S.
Almost 1,200 branches in Canada & the U.S.
Access to over 2,600 automated banking machines

in Canada and the U.S.

Private Client Group (PCG)

Full-service and direct investing, private banking,

investment products

BMO Life Insurance

BMO Capital Markets (BMO CM)

Bulge bracket firm in Canada, mid-market niche

player in the U.S.

Capital raising, M&A and restructuring advisory

services

Industry leading research, sales and trading

capability F2009 Revenue by Operating Group (C$MM) F2009 Net Income by Operating Group (C$MM)

P&C : $ 6,420 PCG : $ 2,012 CM : $ 3,987 Corp : $ (834)

Total Total $11,898 $11,898

BM BMO C O CM $1,056 36% P&C P&C $1,518 52% PCG PCG $359, 12%

Total Total $2,933 $2,933

Re Reve venue nues Exc Excludi luding Ite g Items of s of Note ( Note ($MM)1 P&C : $1,518 PCG : $ 359 CM : $ 1,411 Corp : $ (1,027) Net I Net Inco come me Exc Excludi luding Ite g Items of s of Note ( Note ($MM)1

1 Items of note include capital markets environment charges in BMO CM, as well as a severance costs and increase to the general allowance in the corporate segment * BMO employs a methodology for segmented reporting purposes whereby expected credit losses are charged to the operating groups quarterly based on their share of expected credit losses. The difference between quarterly charges based on expected losses and required quarterly provisions based on actual losses, as well as changes in the general allowance are charged (or credited) to Corporate Services.

SLIDE 19

18

Institutional Investor Presentation • Q1 2010

Highlights of BMO in Canada

F2009 Non-U.S. Operating Group Revenue (C$MM)

Large, full service universal bank
BMO continues to rank 2nd in business banking

market share for business loans $5MM and below

Strong performance in combined Personal &

Commercial (P&C) / Private Client Group (PCG) businesses

BMO Capital Markets (BMO CM) Ranked Top

Overall Equity Research Team in Canada for the 29th consecutive year

BMO InvestorLine was recognized as Canada’s

best of the bank-owned brokerages by The Globe and Mail in 2009 F2009 Non-U.S. Operating Group Net Income (C$MM)

PCG PCG $365, 16% P&C P&C $1,415 62% BM BMO C CM $509 22%

Total Total $2,289 $2,289

PCG PCG $1,771 20% P&C P&C $5,287 60% BM BMO C O CM $1,700 20%

Total Total $8,758 $8,758

P&C : $ 5,287 PCG : $ 1,771 CM : $ 2,221 Corp : $ (514) P&C : $ 1,415 PCG : $ 365 CM : $ 864 Corp : $ (317) Re Reve venue nues Exc Excludi luding Ite g Items of s of Note ( Note ($MM)1 Net I Net Inco come me Exc Excludi luding Ite g Items of s of Note ( Note ($MM)1

1 Items of note include capital markets environment charges in BMO CM, as well as a severance costs and increase to the general allowance in the corporate segment * BMO employs a methodology for segmented reporting purposes whereby expected credit losses are charged to the operating groups quarterly based on their share of expected credit losses. The difference between quarterly charges based on expected losses and required quarterly provisions based on actual losses, as well as changes in the general allowance are charged (or credited) to Corporate Services.

SLIDE 20

19

Institutional Investor Presentation • Q1 2010

Our Presence in the U.S.

F2009 U.S. Operating Group Revenue (US$MM) F2009 U.S. Operating Group Net Income2 (US$MM) Personal & Commercial (P&C) Personal & Commercial (P&C)

Brand image and reputation Well-positioned branch distribution

and access

Strong sales management &

marketing capabilities

Superior risk management capabilities Strong customer orientation and

culture

PCG PCG $208, 8% P&C P&C $973 36% BM BMO C CM $1,505 56%

Total Total $2,686 $2,686

BM BMO C CM $460 84% P& P&C $88 16%

Total Total $548 $548

P&C : $ 973 PCG : $ 208 CM : $ 1,505 Corp : $ (265) P&C : $ 88 PCG : $ (4) CM : $ 460 Corp : $ (604) Net I Net Inco come me Exc Excludi luding Ite g Items of s of Note ( Note ($US M US MM)1 Re Reve venue nues Exc Excludi luding Ite g Items of s of Note ( Note ($US M US MM)1

1 Items of note includes severance costs and increase to the general allowance in the corporate segment 2 PCG had a net loss of US$4MM as reported for F2009 * BMO employs a methodology for segmented reporting purposes whereby expected credit losses are charged to the operating groups quarterly based on their share of expected credit losses. The difference between quarterly charges based on expected losses and required quarterly provisions based on actual losses, as well as changes in the general allowance are charged (or credited) to Corporate Services.

Privat Private Clie Client nt Group ( Group (PCG) CG)

Industry-recognized leadership in

client service

High retention, strong product

ffering

Strategic presence in select high-

growth wealth management markets

Harris distribution and brand

BMO Capital Markets (BMO CM) BMO Capital Markets (BMO CM)

Attractive client base, strong long-term relationships Primary focus on mid-market Full service, integrated investment & corporate bank Cross-border capabilities Sector specialties Top-tier equity research capabilities Strong position in the municipal bond market

SLIDE 21

20

Institutional Investor Presentation • Q1 2010

Financial Highlights

Very good first quarter results Strong net income with fourth consecutive quarter of higher revenues Continuing commitment to expense control in all operating groups P&C Canada continues to achieve high year-over-year growth in revenue and net income Improved ROE while capital levels remain elevated Tier 1 capital ratio remains strong

60.5% Cash Productivity Q1 10 23.9% Cash Operating Leverage 12.53% Tier 1 Capital Ratio

(Basel II)

Net Income EPS Cash EPS ROE Total PCL $657MM $1.12 $1.13 14.3% $333MM

SLIDE 22

21

Institutional Investor Presentation • Q1 2010

Operating Group Performance

Q1 10 Revenue by Operating Group (C$MM)

P&C (Personal & Commercial) 54%

Total 3,137MM

P&C (Personal & Commercial) 53% BMO CM (Investment Banking) 29% PCG (Wealth Management) 18%

* Corporate Services revenue $(112MM)

Over 70% of revenues from retail businesses in Canada and the US (P&C and PCG) Q1 10 Net Income by Operating Group (C$MM)

BMO CM (Investment Banking) 32% PCG (Wealth Management) 14%

* Corporate Services net income $(124MM)

Total 781MM

BMO CM, 248 PCG 113 P&C US 17 P&C Canada 403

Canada - Cards 335 P&C US 256 Canada - Personal & Other 673 Canada - Commercial 403 PCG 550 Trading Products 509 Inv & Corp Banking and Other 411

SLIDE 23

22

Institutional Investor Presentation • Q1 2010

Group Performance

Net Income Revenue 1,787 (1,146) 1,056 359 1,518 103 1,415 F2009 F2008 10,205 (165) 2,440 2,146 5,784 990 4,794 As Reported

($MM)

F2009 F09/F08

B/(W)

F2008 F09/F08

B/(W)

P&C Canada 5,287 10% 1,153 23% P&C U.S. 1,133 14% 96 7% Total P&C 6,420 11% 1,249 21% PCG 2,012 (6)% 426 (16)% BMO Capital Markets 3,466 42% 714 48% Corporate Services (834) (+100)% (411) (+100)% Total Bank 11,064 8% 1,978 (10)% Net Income Revenue 2,261 (1,027) 1,411 359 1,518 103 1,415 F2009 10,593 (165) 2,828 2,146 5,784 990 4,794 F2008

Excl. Notable Items

($MM)

F2009 F09/F08

B/(W)

F2008 F09/F08

B/(W)

P&C Canada 5,287 10% 1,153 23% P&C U.S. 1,133 14% 96 7% Total P&C 6,420 11% 1,249 21% PCG 2,012 (6)% 426 (16)% BMO Capital Markets 3,987 41% 974 45% Corporate Services (834) (+100)% (245) (+100)% Total Bank 11,585 9% 2,404 (6)%

* BMO employs a methodology for segmented reporting purposes whereby expected credit losses are charged to the operating groups quarterly based on their share of expected credit losses. The difference between quarterly charges based on expected losses and required quarterly provisions based on actual losses, as well as changes in the general allowance are charged (or credited) to Corporate Services.

SLIDE 24

23

Institutional Investor Presentation • Q1 2010

Group Net Income

225 (369) 177 68 349 34 315 Q1 09 358 (323) 247 72 362 22 340 Q2 09 As Reported

($MM)

Q3 09 Q4 09 Q1 10 Q/Q

B/(W)

Y/Y

B/(W)

P&C Canada 362 398 403 1% 28% P&C U.S. 24 23 17 (26)% (50)% Total P&C 386 421 420

%

20% PCG 113 106 113 7% 66% BMO Capital Markets 344 288 248 (14)% 40% Corporate Services (286) (168) (124) 26% 66% Total Bank 557 647 657 1% +100%

nm – not meaningful

394 (369) 346 68 349 34 315 Q1 09 585 (243) 394 72 362 22 340 Q2 09 Excluding Items of Note

($MM)

Q3 09 Q4 09 Q1 10 Q/Q

B/(W)

Y/Y

B/(W)

P&C Canada 362 398 403 1% 28% P&C U.S. 24 23 17 (26)% (50)% Total P&C 386 421 420

%

20% PCG 113 106 113 7% 66% BMO Capital Markets 349 322 248 (23)% (28)% Corporate Services (247) (168) (124) 26% (66)% Total Bank 601 681 657 (4)% 67%

* BMO employs a methodology for segmented reporting purposes whereby expected credit losses are charged to the operating groups quarterly based on their share of expected credit losses. The difference between quarterly charges based on expected losses and required quarterly provisions based on actual losses, as well as changes in the general allowance are charged (or credited) to Corporate Services.

SLIDE 25

24

Institutional Investor Presentation • Q1 2010 0.43% 43%

0. 0.0 0. 0.2 0. 0.4 0. 0.6 0. 0.8 1. 1.0 1. 1.2 1. 1.4 1. 1.6 1. 1.8 91 91 92 93 93 94 95 95 96 97 97 98 99 99 00 01 01 02 03 03 04 05 05 06 07 07 08 09 09 10 BM BMO Cdn C Competitor

rs W

Weighted ed Av Aver erage Historical al A Averag age ( (BMO)* Hist storical C Cdn C Competitors' s' Average

Credit Performance Measure

Specific PCL as a % of Average Ne Specific PCL as a % of Average Net Loans a t Loans and d Acceptances Acceptances

(exclu (excluding ding Revers Reverse Repo e Repos)

0.79% 79% 0.61% 61% Percent Percent

BMO’s Canadian competitors include: BNS, CM, NA, RY, TD Competitor average excludes the impact of TD’s sectoral provisions * Historical avg.: 1991 to 2009

0.66 0.79 F2010 YTD 0.61 0.43 Historical avg.* 0.72 0.85 F2009 Canadian Competitors BMO

High 1 1.69% 69% Low 1 1.16% 16% High 1 1.24% 24% Low 0.64% 64% 0.66% 66%

Historical Specific PCL average

YTD YTD

SLIDE 26

25

Institutional Investor Presentation • Q1 2010

Loan Portfolio Distribution

Commercial Mort gages Commercial Real Est at e Const ruct ion Ret ail Trade Wholesale Trade Agricult ure Communicat ions Manufact uring Mining Oil & Gas Transport at ion Ut ilit ies Forest Product s Service Indust ries Financial Services Government Ot her

Commercial and Corporate

Gross Loans and Acceptances by Industry ($B)

As at January 31, 2010

100% 172 10 38 124 Total 19% 32 10 13 9 Corporate 26% 45

8

37 Commercial 55% 95

17

78 Total Consumer 2% 3

3

Cards 28% 48

11

37 Consumer Loans 25% 44

6

38 Residential Mortgage Consumer

Total Other U.S. Canada

($B)

Total Gross Loans and Acceptances Total Gross Loans and Acceptances

As at January 31, 2010

SLIDE 27

26

Institutional Investor Presentation • Q1 2010

Structured Investment Vehicles

Book Value of Subordinated Capital Notes exceeds future expected losses.

Senior ranked BMO liquidity facility provided to facilitate an orderly

windup of each vehicle. It is well protected – has benefit of asset quality and significant subordinated capital beneath it. Links has $757MM (11% of asset book value) subordinated capital; this percentage is higher for Parkland.

Strategy to sell assets in an “orderly” manner unchanged.
Asset quality remains strong – 90%/91% of Links assets (by market

value) are investment grade by Moody’s/S&P; 50% rated Aa3 or better by Moody’s, 44% rated AA- or better by S&P. Parkland has a greater percentage of highly rated assets. Portfolio mix largely unchanged in quarter.

Senior Ranked Liquidity Facility stands at US$5.8B (US$5.6B

funded), and €617MM (€587MM funded) for Links and Parkland

respectively. Fair value of assets is US$5.5B for Links and €634MM

for Parkland.

Assuming no asset sales and that assets are repaid as anticipated

the Liquidity Facility drawn amount is forecast to be US$5.0B and €537MM as at 31/10/10 and US$1.5B and €96MM by 31/10/13.

Sales and asset maturities generated book value reductions in Q1 ‘10
f:

Links – US$72MM sales, US$137MM maturities Parkland - €3MM sales, €13MM maturities

Credit Protection Vehicle & Structured Investment Vehicle Update

Credit Protection Vehicle

Risk of realized loss is considered remote.

The vehicle has 12 tranches of diversified credit pools, each with first

loss protection in place.

Hedges result in BMO’s residual risk of loss being modest:
During Q3 ‘09 we entered into a transaction that hedges the first

$515MM of losses on our committed exposure under the senior funding facility.

During Q4 ‘09 we entered into a transaction that hedges our

exposure to $815MM of Notes.

Cumulative default rate would need to exceed ~20% for BMO to have

realized loss given hedges.

The likelihood of losses exceeding the level of protection provided by

the hedges is considered remote given the level of first-loss protection

n the tranches and the strength of the underlying credits with ~70%

rated investment grade.

Significant first loss protection on all but two tranches (with hedges

BMO has essentially no exposure to credit losses in these tranches).

The attachment point on the weakest tranche of $875MM is 3.2%; the

second weakest tranche of $342MM has an attachment point of 10.0%. BMO’s ~$450MM exposure to these tranches is effectively fully hedged. Approximately $8B in 7 tranches have first loss protection of between 13% and 15%; the remaining $12B in 3 tranches have greater than 23%.

SLIDE 28

27

Institutional Investor Presentation • Q1 2010

Liquidity and Funding Strategy

Additional Sources:

Securitization: Mortgages (Canada Mortgage Bond participation and MBS) and Credit Card ABS ($3bn shelf) Canadian & US Senior (unsecured) deposits

Liquidity Ratio (%) Core Deposits (in billions)

33.9 31.9 29.1 33.1 27.2 26.5 26.0 2004 2005 2006 2007 2008 2009 2010 73.4 72.3 73.3 75.9 85.8 95.4 95.5 23.4 22.6 22.4 25.1 32.8 27.7 32.0 2004 2005 2006 2007 2008 2009 2010

Canadian $ US$ and other currency in US$

Programs: Current program size:

European Note Issuance Program: US $20bn Canadian MTN Program: $8bn Covered Bond Program: €7bn US MTN Program: US$6bn

BMO's has access to diversified funding sources, including: BMO’s large base of core and customer deposits, along with our strong capital base, reduces reliance on wholesale funding. Our wholesale funding principles seek to match the term of assets with the term of funding (e.g. to fund loans with longer term funds). In addition, we diversify our sources of funding by market, instrument and term.

YTD YTD

SLIDE 29

28

Institutional Investor Presentation • Q1 2010

Wholesale Capital Market Term Funding Composition (Total $59.5B) As at Jan 31, 2010

Tier 1 Capital 9% US $ Senior Debt (Issued in Euro & U.S. Markets) 17% Euro Covered Bond 2% C$ Senior Debt 13%

Diversified Wholesale Term Funding Mix

Tier 2 Capital 7% Euro Senior Debt 5%

Wholesale Capital Market Term Funding Maturity Profile (Total $59.5B) As at January 31, 2010 2 4 6 8 10 12

2010 2011 2012 2013 2014 2015 2016 2017 2018 >2018 Term Debt Tier 1 Capital Tier 2 Capital Securitization Issuance CDE ($B) C$ Mortgage & Credit Card Securitization 47%

BMO's wholesale funding principles seek to match the term of assets with the term of funding. Loans for example are funded with customer deposits and capital, with the difference provided by longer-term wholesale funding. BMO has a well diversified wholesale funding platform across markets, products, terms, currencies and maturities. BMO has largely prefunded its fiscal 2010 term-funding requirements. BMO's liquidity position remains sound as reflected by our cash and securities to total asset ratio and level of core deposits.

Q2–Q4

SLIDE 30

29

Institutional Investor Presentation • Q1 2010

Corporate Governance

Comprehensive code of business conduct and ethics provides a framework for directors, officers and employees on the conduct and ethical decision-making integral to their work Governance practices are consistent with, and in many cases exceed, requirements

f the TSX and NYSE. The Bank is also in compliance with applicable rules adopted

by the Canadian Securities Administrators (CSA) and the U.S. Securities and Exchange Commission (SEC) to give effect to the provisions of the Sarbanes-Oxley Act. To ensure non-employee directors’ compensation is aligned with shareholder interests, at least 50% of the annual retainer must be paid in Common Shares of the Bank or Deferred Share Units The Globe and Mail’s Board Games 2009 annual review of corporate governance practices ranked BMO 3rd overall among 180 Canadian reporting issuers

SLIDE 31

30

Institutional Investor Presentation • Q1 2010

Recent Sustainability Initiatives

What is BMO doing? Integrating respect for the environment into our business growth strategies and practices by:

Implementing our Clear Blue Skies™ Initiative, which includes our BMO ECO5 Strategy, designed to

manage the environmental impact of our operations.

Committing to achieve carbon neutrality for energy consumption and transportation emissions across
ur enterprise in 2010. By making operational improvements, retrofitting buildings, using technology

to reduce travel and raising employee awareness we are working towards this goal.

Being a leader in reducing our non-renewable energy consumption.

BMO purchases over 23,800 megawatt hours of emission-free electricity annually from Bullfrog Power, a green electricity retailer that markets energy from clean, renewable sources like wind power and low-impact water power.

Investing $10 million in the new Greening Canada Fund, which provides direct access to credits that
ffset greenhouse gas emissions.
Introducing two environmentally responsible investment funds; BMO Sustainable Climate Class and

BMO Sustainable Opportunities Class.

SLIDE 32

31

Institutional Investor Presentation • Q1 2010

Ongoing Stakeholder Engagement

BMO supports various international environmental initiatives: Signatory to the United Nations’ UNEP Statement by Financial Institutions on the Environment & Sustainable Development, the Carbon Disclosure Project and The Equator Principles External recognition for our sustainability efforts: Included in indices that recognize the sustainability performance of companies across economic, social and environmental dimensions (e.g. FTSE4Good Index, Dow Jones Sustainability North America Index and Jantzi Social Index) Named as one of the highest scoring companies in the world and the only Canadian bank in the Global 500 Carbon Disclosure Leadership Index for 2009.

SLIDE 33

VIKI LAZARIS

Senior Vice President 416.867.6656 viki.lazaris@bmo.com

STEVEN BONIN

Director 416.867.5452 steven.bonin@bmo.com

ANDREW CHIN

Senior Manager 416.867.7019 andrew.chin@bmo.com

Investor Relations Contact Information

E-mail: investor.relations@bmo.com www.bmo.com/investorrelations Fax: 416.867.3367