Bank Of Montreal · TSX:BMO
Bank Of Montreal — Merger or Acquisition (December 2021)
22 slides from Bank Of Montreal's merger presentation, Dec 20, 2021
Slide 1: BMO to Acquire Bank of the West from BNP Paribas
BMO to Acquire Bank of the West from BNP Paribas December 20, 2021 oO
Slide 2: Forward looking statements & non-GAAP measures
Forward looking statements & non-GAAP measures Caution Regarding Forward-Looking Statements Certain statements contained in this document are forward-looking statements. All such statements are made pursuant to the “safe harbor” provisions of, and are intended to be forward-looking statements under,
Slide 3: Strong Strategic Fit
• • Strong • Strategic Fit • • • • • • • • • • • • • •
Slide 4: Transaction Overview
Financially compelling allocation of capital Immediately accretive and fuels future growth Transaction Overview + Fixed purchase price paid by BMO to BNP Paribas of US$16.30B (C$20.95B) - Includes ~US$2.9B (C$3.8B) of estimated excess capital’ at Bank of the West . - Utilizes C$13.5B of BMO’s estima
Slide 5: Transaction builds on proven track record of U.S. growth
Transaction builds on proven track record of U.S. growth Organic growth supplemented by highly successful acquisitions BMO U.S. Segment! Strong execution and «60% from organic growth | welt-tested playbook for Le eed ! $4,419 U.S. expansion 93,250 * Deposit share improved to % PPPT #3 in core market
Slide 6: Combined U.S. footprint map
WA WI MT ND MN OR ID MA WY SD IA MI NY * NV NE IL OH NJ CT * UT MD KS IN CO VA MO CA AZ OK NM GA * TX * FL * New branch market entered
Slide 7: Immediate scale in highly attractive California market
Immediate scale in highly attractive California market California has the largest population and economy in the U.S., and a highly attractive banking market 14% of total U.S. GDP and 12% of national population’ $77k median household income, 15% above national average" 885k affluent households? - #1
Slide 8: Bank of the West: Strong west coast franchise
Bank of the West: Strong west coast franchise Bank of the West Overview + Founded in 1874 and wholly owned by BNP Paribas * 514 branches and ~875 ATMs across the mid-west and western U.S. with ~1.8 million customers — 4th largest regional bank in CA (~70% of deposit franchise) — Top 5 market positio
Slide 9: Maintains BMO's balanced and attractive business mix
Maintains BMO’s balanced and attractive business mix Bank of the West! BMO2 Pro Forma BMO Other Consumer Other Other 18% Consumer § Consumer, 19% =] 29% a 3 ($70B cal ($4758 ia cai ~ ~ of E 44% 44% 44% 2 residential Residential oO ‘esidential . . Mortgage & | mortgage / \ Residential | \ ah 13% Mort
Slide 10: High quality loan portfolio
High quality loan portfolio Bank of the West! Residential Mortgage 13% CRE 14%, ~US$56B other Consumer 29% Service Industries 35% Agriculture ~US$25B 11% Wholesale Trade Manufacturing 11% 21% Soi pany Note: Financial 1 Bank of the W y flings, SNL Financial a as of most 1 loan composition a: ted nclu
Slide 11: Robust integration plan unlocks meaningful synergies
Robust integration plan unlocks meaningful synergies Highly Achievable Cost Synergies * Highly achievable cost synergies of estimated US$670MM (~C$860MM) (pre-tax) identified - ~35% of Bank of the West non-interest expenses * Expect cost savings initiatives to be fully executed by the end of the fir
Slide 12: Transaction assumptions
Transaction assumptions Purchase Price & + Fixed purchase price paid by BMO to BNP Paribas of US$16.30B (~C$20.95B) Consideration - Includes ~US$2.9B (C$3.8B) of estimated excess capital at Bank of the West above 11% CET1 at close + Transaction primarily funded via excess capital * Introducing 2% di
Slide 13: Financially compelling acquisition
Financially compelling acquisition Transaction Multiples Strong Returns & Profitability 1.5x! 10% ~14% P / TBV at Close 2024 Adjusted EPS IRR Accretion? 10.7x P / 2022E Synergized ~120bps ~150bps Earnings Adjusted ROE Adjusted Efficiency Ratio (Capital Adjusted)? Improvement34 Improvement4 Attractiv
Slide 14: Winning formula for future growth
Winning formula for future growth “One Bank” approach Integrated go-to-market strategy across commercial, wealth, and . retail driving expanded customer relationships across BMO’s capabilities: — #4 Commercial Bank’ in North America, pro forma — Leading capital markets advisory, trading, FX, underwr
Slide 15: Coming together to boldly grow the good
Coming together to boldly grow the good BMO oO Financial Group fal 2S] BANK#:WEST 27 BNP PARIBAS Outstanding CRA ratings for meeting credit & community development needs in low- to moderate-income communities For a Thriving Economy stil Nearly C$25B in commitments to increase support for small busin
Slide 16: Strategically and financially attractive acquisition
Strategically and financially attractive acquisition Further establishes BMO as a leading North American bank * Strengthens BMO's U.S. business by meaningfully enhancing scale and access to new and attractive markets with significant growth potential * Proven track record and winning formula to inte
Slide 17: Appendix
Slide 18: BMO U.S. Segment on a reported basis
BMO U.S. Segment on a reported basis BMO U.S. Segment! $4,343 $3,174 % PPPT Contribution to (*) BMO $1,435 $988 Reported PPPT $636 (USSMM) F2010 F2014 F2017 F2021 PF F202 Reported Net Income (UssMM) $60 $765 $920 $2,593 $3,534 Reported Efficiency Ratio (%) 74.9% 79.1% 73.3% 56.9% ~52%3 Assets*(US$B)
Slide 19: Reconciliation of reported and adjusted results (BMO)
Reconciliation of reported and adjusted results (BMO) (CAD $ in millions, except as noted) F2010 F2014 F2017 F2021 Reported Results Revenue 13,264 18,223 22,107 27,186 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) (1,025) (1,505) (1,538) (1,399) Revenue, net of CCPB
Slide 20: Reconciliation of reported and adjusted results (U.S. segment)
Reconciliation of reported and adjusted results (U.S. segment) (United states $ in millions, except as noted) F2010 F2014 F2017 F2021 Reported Results Revenue 2,532 4728 5,368 7,362 Insurance claims, commissions and changes in policy benefit liabilities (CCPB) : - : - Revenue, net of CCPB 2532 4728
Slide 21: Glossary of Financial Terms
Glossary of Financial Terms + Adjusted Net Income is calculated as net income excluding the impact of certain nonrecurring items, as set out in the Non-GAAP and Other Financial Measures section of the 2021 Annual MD&A + Pre-Provision, Pre-Tax Earnings (PPPT) is calculated as income before income tax
Slide 22: Contact Information
Contact Information bmo.com/investorrelations E-mail: investor.relations@bmo.com
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