Demonstrating our success at focusing on core clients, during the quarter BMO Capital Markets was named 2012 Best Equity House, Canada in International Financing Review, a Thomson Reuters publication. This award is a testament to our ability to develop innovative solutions for our clients' most complex problems, while executing at a consistently high standard.
BMO Capital Markets participated in 169 new issues in the quarter including 55 corporate debt deals, 48 government debt deals, 58 common equity transactions and eight issues of preferred shares, raising $57 billion.
Corporate Services
Corporate Services net loss for the quarter was $65 million, compared with net income of $181 million a year ago. The decrease in reported results was significantly larger than the decrease in adjusted results. The difference was primarily due to high revenues from run-off structured credit activities in reported results a year ago. On an adjusted basis, the net loss was $94 million, compared with net income of $20 million a year ago. Adjusting items are detailed in the Adjusted Net Income section and in the Non-GAAP Measures section. Adjusted expenses were $80 million higher primarily due to increased benefit costs including pension costs, the timing of technology investment spending and higher severance costs in the current quarter. Adjusted recoveries of credit losses decreased $72 million to a recovery of $51 million, due to an $83 million reduction in the recoveries on the M&I purchased credit impaired loan portfolio. Adjusted revenues decreased $58 million due to lower securities gains, a higher taxable equivalent basis (teb) group offset in the current quarter and lower revenue from a variety of items, including treasury-related items, none of which were individually significant.
Adjusted Net Income
Adjusted net income was $1,041 million for the first quarter of 2013, up $69 million or 7% from a year ago. Adjusted earnings per share were $1.52, up 7% from $1.42 a year ago.
Management has designated certain amounts as adjusting items and has adjusted GAAP results so that we can discuss and present financial results without the effects of adjusting items to facilitate understanding of business performance and related trends. Management assesses performance on a GAAP basis and on an adjusted basis and considers both to be useful in the assessment of underlying business performance. Presenting results on both bases provides readers with a better understanding of how management assesses results. Adjusted results and measures are non-GAAP and, together with items excluded in determining adjusted results, are disclosed in more detail in the Non-GAAP Measures section, along with comments on the uses and limitations of such measures. Items excluded from first quarter 2013 results in the determination of adjusted results totalled $7 million of net income or $0.01 per share and were comprised of:
-- the $79 million after-tax net benefit for credit-related items in respect of the acquired M&I performing loan portfolio, consisting of $210 million for the recognition in net interest income of a portion of the credit mark on the portfolio (including $65 million for the release of the credit mark related to early repayment of loans), net of an $82 million specific provision for credit losses and related income taxes of $49 million. These credit-related items in respect of the acquired M&I performing loan portfolio can significantly impact both net interest income and the provision for credit losses in different periods over the life of the acquired M&I performing loan portfolio;-- costs of $92 million ($57 million after tax) for integration of the acquired business including amounts related to system conversions, restructuring and other employee-related charges, consulting fees and marketing costs related to rebranding activities;-- the $7 million before after-tax benefit from run-off structured credit activities (our credit protection vehicle and structured investment vehicle). These vehicles are consolidated on our balance sheet and results primarily reflect valuation changes associated with these activities that have been included in trading revenue; and-- the amortization of acquisition-related intangible assets of $31 million ($22 million after tax).
