Acquisition of Marshall & Ilsley Corp.
Extensive Loan Portfolio Due Diligence Conducted
Credit risks thoroughly analyzed, identified, well-understood and risks prudently addressed
Extensive Due Diligence Process
Overview of Credit Mark
Review of M&I's loan portfolios utilized:
US$ billions
(As at September 30, 2010)
extensive bank resources for internal loan file reviews
and data analysis
M&I
Outstandings
($ billions)
Estimated
Future Losses
Estimated
Future Losses
(%)
($ billions)
C&I
$16.8
6.1%
$1.0
augmented by third party portfolio analyses and
discussions with management
Individual credit files reviewed by approximately 50 BMO and
Harris senior risk professionals to assess risk profile and
credit mark
On-site team conducted extensive review of commercial
portfolio (over 2,500 loan files) providing coverage across all
major asset types, geography and segments
Detailed analysis of consumer portfolios completed
Also engaged two outside specialist firms to provide
independent credit mark assessment
Additional "deep dive" due diligence conducted into
specialized portfolio segments exhibiting higher risks
Home equity & consumer
Total¹
Estimated Future Losses
Losses taken since 12/31/2007
Total Cumulative Losses
Through the cycle losses²
Commercial real estate
6.7
19.6
1.3
Multi-family
2.4
19.2
0.5
Construction & development
3.8
19.9
0.8
1-4 Family mortgages
4.2
12.6
0.5
4.9
12.1
0.6
$38.8
12.1%
$4.7
4.7
4.8
$9.5
21.1%
Note: Portfolio breakdown illustrated here is based on stratification from credit due diligence and may not tie directly to the Q3 2010 call report data on page 9.
1. Total excludes $0.9 billion indirect auto loan sale executed in Q4 2010.
2. Through the cycle losses based on average loan portfolio balance since December 31, 2007 of US$45 billion.
BMO
Financial Group
Acquisition of Marshall & Ilsley Corp. December 17, 2010
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