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All of the above adjusting items were recorded in Corporate Services except the amortization of acquisition-related intangible assets, which is charged to the operating groups.
The impact of adjusting items for comparative periods is summarized in the Non-GAAP Measures section.
Caution
The foregoing sections contain forward-looking statements. Please see the Caution Regarding Forward-Looking Statements that follows.
The foregoing sections contain adjusted results and measures, which are non-GAAP. Please see the Non-GAAP Measures section.
Management's Discussion and Analysis
Management's Discussion and Analysis (MD&A) commentary is as of February 26, 2013. Unless otherwise indicated, all amounts are in Canadian dollars and have been derived from financial statements prepared in accordance with International Financial Reporting Standards (IFRS). References to GAAP mean IFRS, unless indicated otherwise. The MD&A should be read in conjunction with the unaudited interim consolidated financial statements for the period ended January 31, 2013, as well as the audited consolidated financial statements for the year ended October 31, 2012, and Management's Discussion and Analysis for fiscal 2012. The material that precedes this section comprises part of this MD&A.
The annual MD&A includes a comprehensive discussion of our businesses, strategies and objectives, and can be accessed on our website at www.bmo.com/investorrelations. Readers are also encouraged to visit the site to view other quarterly financial information.
----------------------------------------------------------------------------Summary Data - Reported Table 1---------------------------------------------------------------------------- % Increase % Increase(Unaudited) (Canadian $ in Q1- Q1- (Decrease) Q4- (Decrease) millions, except as noted) 2013 2012 vs Q1-2012 2012 vs Q4-2012----------------------------------------------------------------------------Summary Income StatementNet interest income 2,216 2,318 (4) 2,145 3Non-interest revenue 1,865 1,799 4 2,031 (8)----------------------------------------------------------------------------Revenue 4,081 4,117 (1) 4,176 (2)----------------------------------------------------------------------------Specific provision for credit losses 178 122 46 216 (18)Collective provision for (recovery of) credit losses - 19 (100) (24) 100----------------------------------------------------------------------------Total provision for credit losses 178 141 26 192 (8)Non-interest expense 2,590 2,554 1 2,701 (4)Provision for income taxes 265 313 (15) 201 32----------------------------------------------------------------------------Net income 1,048 1,109 (5) 1,082 (3)-------------------------------------------------------------------------------------------------------------------------------------------------------- Attributable to bank shareholders 1,030 1,090 (6) 1,064 (3) Attributable to non- controlling interest in subsidiaries 18 19 (4) 18 -----------------------------------------------------------------------------Net income 1,048 1,109 (5) 1,082 (3)--------------------------------------------------------------------------------------------------------------------------------------------------------Common Share Data ($ except as noted)Earnings per share 1.53 1.63 (6) 1.59 (4)Dividends declared per share 0.72 0.70 3 0.72 -Book value per share 40.87 37.85 8 40.25 2Closing share price 62.99 58.29 8 59.02 7Total market value of common shares ($ billions) 41.1 37.3 10 38.4 7Dividend yield (%) 4.6 4.8 nm 4.9 nmPrice-to-earnings ratio (times) 10.4 11.3 nm 9.6 nmMarket-to-book value (times) 1.5 1.5 nm 1.5 nm----------------------------------------------------------------------------Financial Measures and Ratios (%)Return on equity 14.9 17.2 (2.3) 15.6 (0.7)Efficiency ratio 63.5 62.0 1.5 64.7 (1.2)Operating leverage (2.3) (5.4) nm (1.7) nmNet interest margin on earning assets 1.85 2.05 (0.20) 1.83 0.02Effective tax rate 20.2 22.0 (1.8) 15.7 4.5Return on average assets 0.74 0.81 (0.07) 0.77 (0.03)Provision for credit losses-to- average loans and acceptances (annualized) 0.28 0.23 0.05 0.31 (0.03)Gross impaired loans and acceptances-to-equity and allowance for credit losses 8.98 8.74 0.24 9.30 (0.32)----------------------------------------------------------------------------Value Measures (% except as noted)Average annual three year total shareholder return 11.8 27.2 (15.4) 10.8 1.0Twelve month total shareholder return 13.5 5.7 7.8 5.2 8.3Net economic profit ($ millions) 318 434 (27) 361 (12)----------------------------------------------------------------------------Balance Sheet (as at $billions)Assets 542 538 1 525 3Net loans and acceptances 259 242 7 254 2Deposits 351 317 11 324 8Common shareholders' equity 26.6 24.2 10 26.2 2Cash and securities-to-total assets ratio (%) 30.6 32.2 (1.6) 29.4 1.2----------------------------------------------------------------------------Capital Ratios (%) Basel Basel Basel III II IICommon Equity Tier 1 Capital Ratio 9.4 9.7 nm 10.5 nmTier 1 Capital Ratio 11.1 11.7 nm 12.6 nmTotal Capital ratio 13.4 14.6 nm 14.9 nm----------------------------------------------------------------------------Net Income by Operating GroupPersonal and Commercial Banking 640 600 7 582 10 P&C Canada 458 441 4 442 3 P&C U.S. 182 159 15 140 31Private Client Group 163 104 56 164 -BMO Capital Markets 310 224 38 314 (2)Corporate Services, including Technology and Operations (T&O) (65) 181 (+100) 22 (+100)----------------------------------------------------------------------------BMO Financial Group net income 1,048 1,109 (5) 1,082 (3)--------------------------------------------------------------------------------------------------------------------------------------------------------nm - not meaningful----------------------------------------------------------------------------Summary Data - Adjusted (1) Table 2---------------------------------------------------------------------------- % Increase % Increase(Unaudited) (Canadian $ in Q1- Q1- (Decrease) Q4- (Decrease) millions, except as noted) 2013 2012 vs Q1-2012 2012 vs Q4-2012----------------------------------------------------------------------------Summary Income StatementAdjusted net interest income 2,004 2,092 (4) 1,956 2Adjusted non-interest revenue 1,857 1,651 13 1,964 (5)----------------------------------------------------------------------------Adjusted revenue 3,861 3,743 3 3,920 (2)----------------------------------------------------------------------------Adjusted specific provision and adjusted total provision for credit losses 96 91 5 113 (16)Adjusted non-interest expense 2,464 2,378 4 2,436 1Adjusted provision for income taxes 260 302 (14) 246 5----------------------------------------------------------------------------Adjusted net income 1,041 972 7 1,125 (7)-------------------------------------------------------------------------------------------------------------------------------------------------------- Attributable to bank shareholders 1,023 953 7 1,107 (8) Attributable to non- controlling interest in subsidiaries 18 19 (4) 18 -----------------------------------------------------------------------------Adjusted net income 1,041 972 7 1,125 (7)--------------------------------------------------------------------------------------------------------------------------------------------------------Common Share Data ($)Adjusted earnings per share 1.52 1.42 7 1.65 (8)Financial Measures and Ratios (%)Adjusted return on equity 14.8 15.0 (0.2) 16.3 (1.5)Adjusted efficiency ratio 63.8 63.5 0.3 62.2 1.6Adjusted operating leverage (0.4) (7.6) nm 2.7 nmAdjusted net interest margin on earning assets 1.67 1.85 (0.18) 1.67 -Adjusted effective tax rate 19.9 23.7 (3.8) 17.9 2.0Adjusted provision for credit losses-to-average loans and acceptances (annualized) 0.16 0.17 (0.01) 0.20 (0.04)----------------------------------------------------------------------------Adjusted net income by operating groupPersonal and Commercial Banking 656 619 6 600 9 P&C Canada 461 443 4 444 3 P&C U.S. 195 176 11 156 26Private Client Group 169 109 54 169 -BMO Capital Markets 310 224 38 315 (2)Corporate Services, including T&O (94) 20 (+100) 41 (+100)----------------------------------------------------------------------------BMO Financial Group adjusted net income 1,041 972 7 1,125 (7)--------------------------------------------------------------------------------------------------------------------------------------------------------(1) The above results and statistics are presented on an adjusted basis. These are non-GAAP amounts or non-GAAP measures. Please see the Non- GAAP Measures section.nm - not meaningful----------------------------------------------------------------------------
