Viki A. Lazaris - Senior Vice President of Investor Relations William A. Downe - Chief Executive Officer, President, Director, Chief Executive Officer of BMO Financial Group and President of BMO Financial Group Thomas E. Flynn - Chief Financial Officer, Principal Accounting Officer and Executive Vice President Surjit S. Rajpal - Chief Risk Officer and Executive Vice-President Frank J. Techar - Chief Executive Officer of Personal & Commercial Banking for Canada Bmo and President of Personal & Commercial Banking for Canada Bmo Mark F. Furlong - Chairman, Chief Executive Officer, President, Treasurer of M&I Capital Markets Group Llc, Vice President of M&I Capital Markets Group Llc, Chief Executive Officer of M&I Marshall & Ilsley Bank, Chairman of M&I Marshall & Ilsley Bank, Director of M&I Marshall & Ilsley Bank, Director of M&I Capital Markets Group Llc and Director of Marshall & Ilsley Trust Company Thomas V. Milroy - Chief Executive Officer

Steve Theriault - BofA Merrill Lynch, Research Division Sumit Malhotra - Macquarie Research John Aiken - Barclays Capital, Research Division Mario Mendonca - Canaccord Genuity, Research Division John Reucassel - BMO Capital Markets Canada J. Bradley Smith Darko Mihelic - Cormark Securities Inc., Research Division Cheryl Pate - Morgan Stanley, Research Division Gabriel Dechaine - Crédit Suisse AG, Research Division Peter D. Routledge - National Bank Financial, Inc., Research Division Brian Klock - Keefe, Bruyette, & Woods, Inc., Research Division

Please be advised that this conference call is being recorded. Good afternoon, and welcome to the BMO Financial Group's First Quarter 2012 Conference Call for February 28, 2012. Your host for today is Viki Lazaris, Senior Vice President of Investor Relations. Ms. Lazaris, please go ahead. Viki A. Lazaris: Thank you. Good afternoon, everyone, and thanks for joining us today. Our agenda for today's Investor Presentation is as follows: we'll begin the call with remarks from Bill Downe, BMO's CEO; followed by presentations from Tom Flynn, the bank's Chief Financial Officer; and Surjit Rajpal, our Chief Risk Officer. After their presentations, we'll have a short question-and-answer period where we'll take questions from prequalified analysts. To give everyone an opportunity to participate, please keep it to 1 or 2 questions and then re-queue. The call is scheduled to run for one hour. Also with us this afternoon to take questions are BMO's business unit heads: Tom Milroy from BMO Capital Markets; Gilles Ouellette from the Private Client Group; Frank Techar, Head of P&C Canada; and Mark Furlong, from P&C U.S. At this time, I caution our listeners by stating the following on behalf of those speaking today. Forward-looking statements may be made during this call. They are subject to risks and uncertainties. Actual results could differ materially from forecasts, projections or inclusions in the forward-looking statements. Information about material factors that could cause results to differ and the material factors and the assumptions underlying these forward-looking statements can be found in our annual MD&A and in our first quarter report to shareholders. With that said, I'll hand things over to Bill. William A. Downe: Thank you, Viki, and good afternoon, everyone. As noted, my comments may include forward-looking statements. BMO produced record first quarter net income of $1.1 billion, kicking off the year with very strong earnings. Our focus on customers and investing prudently in the business is serving us well, and this is reflected in both our financial results and the momentum of the bank. Operating group performance in the first quarter was better than initially expected as markets recovered from the depths of early December. The Capital Markets-related businesses, which were particularly impacted by negative market sentiment early in the quarter, experienced improved market conditions in January. And credit performance, a long historic strength of BMO, contributed to earnings growth. We continue to make steady progress on the integration of the acquired M&I business, and the benefits evidenced so far confirm that we're on track. We remain focused on living up to our reputation for treating customers extremely well and ensuring our new customers can draw on the strengths and abilities of the whole company. The largest of the platform conversions will take place at the end of the year, and we're pleased with the synergies obtained to date, reflecting the work of a focused and capable integration team. The combination of our 2 banks has created a competitive platform from which to grow personal, commercial and wealth business in the United States. Turning to the financial results. Reported net income increased 34% year-over-year to $1.1 billion or $1.63 per share. Adjusted net income was up 19% to $972 million, representing $1.42, 8% ahead of last year. Adjusted revenue growth was 9%. BMO's ROE on an adjusted basis was 15%, improved from 13.9% in the fourth quarter. Improving the bank's productivity is an area of broad focus and the entire BMO organization is participating in this effort. You'll note, the charge taken this quarter for restructuring in our Capital Markets business. Innovation and productivity are themes we're stressing with our customers and we believe will be important contributors to North American competitiveness, and it's an area of focus for the bank. Core credit performance improved in the quarter with provision for credit loss down substantially, and we were effective in the collection of impaired loans. Surjit will take you through our credit performance in detail later in the call. BMO continues to be well capitalized with a pro forma Basel III common equity ratio of 7.2%. I'll now take you through the highlights of our operating groups. P&C Canada's reported net income for Q1 was $446 million, and on an actual loss basis, up 5.4% from the fourth quarter. This business continues to perform well with volumes higher across most products, and we continue to innovate in the execution of our strategy, achieving higher net promoter scores and increasing share of wallet. We're also confirming our confidence in business growth by committing to increase the credit we make available to small- and medium-sized businesses so they in turn can innovate, expand and create jobs. For consumers, especially homebuyers, we're actively encouraging them to borrow smartly by considering a mortgage with a shorter amortization period. Our low rate mortgage was recognized by the Canadian Mortgage Trends as 2011 Mortgage of the Year. This product, which carries a maximum amortization of 25 years, is unique in the market place and rewards customers who make responsible borrowing decisions. Moreover, it will help Canadians enter retirement without the burden of mortgage debt. In P&C U.S., reported net income was $135 million in source currency. On an adjusted basis, net income was $152 million and reflects a good contribution from the acquired business and solid organic revenue growth. These results were impacted as anticipated considering new interchange regulations, higher credit losses under BMO's expected loss methodology and margin pressure. Commercial business, a key area of future growth, experienced a good quarter. We're very encouraged with Commercial banking business loan growth of $1.1 billion since the third quarter, up 14% annualized. This growth in key segments was partially offset by pay-downs and declines, and CRE and other runoff as expected. Our market position in the U.S. and leading customer loyalty is a competitive advantage. BMO Harris Bank is taking an active role in the marketplace, providing original products that are relevant and matter to customers. For example, our consumer insights identified that parents are searching for help in providing financial education to their children, and in the fall we launched Helpful Steps for Parents addressing this need. This initiative marked the first time we utilized the BMO Harris Bank brand across our entire footprint. In the Midwest region, we've positioned for the uptick in the economic environment. Midwest economy continues to grow at a higher rate than the national average. The unemployment rate, 8.1% in December, is expected to decline gradually this year, which should continue to outperform the national average. Overall, we believe that the recovery underway in the United States will lead to gradually more favorable economic and market conditions throughout North America. Our businesses, customers and shareholders will benefit from this. Private Client Group's first quarter net income of $105 million reflects solid growth in our traditional wealth business, offset by the impact of unfavorable movements and long-term interest rates in our insurance business. Performance this quarter was dampened by softer equity market conditions. We continue to attract new client assets with AUM and AUA of $435 billion, up 2.3% quarter-over-quarter. Our customers continue to value insurance as a part of our total wealth offering, and we're generating higher premiums and sales of life insurance products, which represent a strong source of future growth and profitability. Last week, we announced the expansion of our wealth management capability in China with an agreement to acquire the maximum allowable interest in China's COFCO Trust Co. With AUM of approximately USD $5.7 billion, COFCO Trust provides BMO with a leading entry point and greater flexibility to offer a wide variety of wealth management products directly or through third parties in a market that is large and growing. Further, this purchase complements our investment management capabilities with Fullgoal in Shanghai and Lloyd George Management in Hong Kong. BMO Capital Markets delivered first quarter net income of $198 million, improved from Q4, although down from a very strong quarter a year ago. The current quarter signaled a return to more normal levels of volatility in client flows in many parts of our business, particularly in the latter part of the quarter. The pipeline for advisory and fee business remains very healthy. Global Finance Magazine recently named BMO Capital Markets the Best Investment Bank in Canada, and for the third consecutive year, the World's Best Metals and Mining Investment Bank. To wrap up, each of our businesses is well positioned. Our balance sheet is strong, a source of confidence for our customers. And we are confident that our customer-focused strategy will continue to differentiate BMO. At the same time, we're working hard to improve operating leverage and ensure a competitive cost base and direct spending to support our highest priority, our front line employees and every interaction we have with our customers. Before I pass it over to Tom, I'd like to acknowledge Viki Lazaris, BMO's Head of Investor Relations. Effective April 1, Viki will be leaving IR to assume the leadership of BMO InvestorLine. During her 6 years at the head of Investor Relations, she's raised our level of professionalism, earning the respect of colleagues and the Street alike. I know that you're all going to join me in thanking her both for her contribution and to encourage her, let her know that we have a great deal of confidence in her success coming at BMO InvestorLine. And with that, Tom, I'll turn it over to you to go through the Q1 results in a little more detail. Thomas E. Flynn: Thanks, Bill, and good afternoon. Some of my comments may be forward-looking. Please note the caution regarding forward-looking statements at the beginning of the presentation. I'll start on Slide 7. BMO had a strong quarter with results benefiting from our businesses executing on our strategies, improved credit performance and acquisitions. Reported net income of $1.1 billion was up 34% from last year. Adjusted net income was $972 million, up 19% year-over-year and adjusted EPS was $1.42, up 7.6%. Adjusted ROE was 15%, and our capital position strengthened in the quarter. Adjusted revenue was up 8.5% from last year and 2% from last quarter. BMO Capital Markets drove the quarter-over-quarter increase with improved trading revenue. Adjusted results absorbed a negative impact in our insurance operations from lower long-term interest rates of $47 million after tax or $0.07 per share. Lower adjusted provisions for credit losses reflected improved performance across portfolios, including a recovery of $88 million after tax for M&I-purchased credit impaired loans. Results in the quarter also benefited from a lower effective tax rate. Adjusting items in the quarter reduced income by $137 million or $0.21 per share. Adjustments all on an after-tax basis include a $114 million credit mark-related benefit on the acquired M&I performing loan portfolio, cost of $43 million for acquisition integrations, a $136 million gain from runoff structured credit activities. These activities are consolidated now under IFRS and the results primarily reflect market-driven valuation, changes that are included in trading revenue. Improved credit market conditions in Q1 resulted in a gain being recognized compared to a charge in Q4 of '11. The next item is a restructuring charge of $46 million related to our Capital Markets business, which was taken to better align the cost structure with the current and future business environment. As Bill mentioned, this is part of the broader effort underway in the bank to improve productivity. And lastly, amortization of acquisition-related intangibles of $24 million. All adjusting items are recorded in Corporate Services except to the amortization of intangibles. Moving to Slide 8. Adjusted revenue was $3.7 billion, an increase of 8.5% year-over-year, largely driven by acquisitions. Quarter-over-quarter, adjusted revenue was up 2% from higher trading, partly offset by lower long-term interest rates impacting insurance results. As shown on the graph on the right, the adjusted total bank margin, excluding trading, was 221 basis points, up 8 basis points sequentially, driven mainly by Private Client Group and Corporate, partially offset by P&C U.S., where the benefits of increased deposit balances were more than offset by spread compression. Turning to Slide 9. Adjusted expenses of $2.4 billion were up $37 million or 1.6% quarter-over-quarter. Q1 expense includes $71 million of stock-based compensation in respect of employees eligible to retire, which is expensed in Q1 of each year. Excluding these stock-based compensation costs, adjusted expenses declined 1%. Adjusted expenses were up $329 million from a year ago, largely due to acquired businesses that added $317 million. Turning to Slide 10. We show the income contribution from M&I. The acquisition added adjusted earnings of $215 million in total and $100 million to operating groups. As previously mentioned, Corporate Services' adjusted net income includes an $88 million after-tax recovery on the M&I-purchased credit impaired loan portfolio. This recovery was primarily due to the gain from the repayment of loans that amounts in excess of their recorded value. The after-tax benefit to reported earnings of the credit mark on acquired performing loans was $114 million as reviewed last quarter and shown in the table. Accounting for the performing loan credit mark involves the portion of the credit mark being reflected in net interest income over time, specific provisions being booked as incurred and adjustments to the collective allowance. Reported income from this in Q1 was similar to Q4. As shown on Slide 11, capital ratios remain strong with a common equity ratio at 9.6%, and Tier 1 ratio at 11.7%. Capital impact of IFRS will be phased in over 5 quarters. Impact was under 10 basis points in Q1 and is approximately 60 basis points in total. Risk-weighted assets were largely unchanged quarter-over-quarter as higher RWA under Basel 2.5 rules were primarily offset by lower RWA due to the transition to IFRS, improved risk assessments and lower Basel II market risk RWA. Our Basel III common equity ratio strengthened to 7.2% in the quarter, and we remain well positioned for the Basel III regime. Moving to Slide 13. P&C Canada net income was $446 million. On an actual loss basis, net income was up 5% quarter-over-quarter. Revenue and net income was down year-over-year, mainly due to a one-time securities gain in the prior year under IFRS. Net interest margin of 290 basis points was relatively flat quarter-over-quarter. Year-over-year expenses were higher due to 2011 initiative spending, including higher frontline staffing levels. Quarter-over-quarter expenses were up due to stock-based compensation from employees eligible to retire. Moving to Slide 14. P&C U.S. Q1 revenue and net income more than doubled from a year ago, reflecting good contribution from the acquired business. Adjusted net income was USD $152 million. Revenue of $771 million declined quarter-over-quarter due in part to the expected impact of lower interchange revenue. Revenue was also impacted by spreads. NIM was down 9 basis points quarter-over-quarter as the benefit of increased deposit balances was offset by spread compression. In addition, provisions for credit losses under BMO's expected loss methodology were higher in Q1 than in Q4. Turning to Slide 15. Private Client Group net income was $105 million, down $39 million from a year ago. Insurance results were impacted by a $56 million net income decline year-over-year due to lower long-term interest rates. Excluding insurance, Private Client Group revenue growth was 20% year-over-year, with good contribution from acquisitions and higher-than-usual asset management revenue from a strategic investment. As Bill mentioned, performance this quarter was dampened by softer equity markets. Looking forward, we expect conditions improve, driving better volumes. Turning to Slide 16. BMO Capital Markets' net income of $198 million was up 39% from Q4, and lower than a very strong Q1 a year ago. Stronger revenue was mainly driven by higher trading revenue primarily in interest and equity trading as market conditions improved through the quarter. Expenses were down 1.2% year-over-year and 0.5% quarter-over-quarter. On Slide 17, Corporate had reported net income of $223 million and adjusted net income of $62 million. Quarter-over-quarter adjusted net income was better by $129 million. Adjusted revenue and expenses were fairly stable quarter-over-quarter. The stronger credit results reflect a recovery on M&I-purchased credit impaired loans and better performance in other portfolios. To conclude, we're pleased with the strong start to the year and feel good about how our businesses are positioned looking ahead. And with that, I'll turn it over to Surjit. Surjit S. Rajpal: Thanks, Tom, and good afternoon. Before I begin, I'd like to draw your attention to the caution regarding forward-looking statements at the beginning of this presentation. Today, I'll focus my remarks on a few areas of interest and will refer you to pages of the deck for further details. I would like to start with our first quarter provision for credit losses, which is outlined on Slide 25. As Tom and Bill both mentioned, our provisions that you see on that page, are $141 million or $91 million on an adjusted basis. To better understand our performance, I'll differentiate between our legacy and our acquired book. Our legacy book, which is shown in the top portion of the table, continues to perform well, the declining trend in provisions over the last 18 months. First quarter provision was $233 million, down from $281 million in the fourth quarter. We are now almost down to pre-recession levels with virtually all business lines contributing to the improvement. The acquired portfolio can be broken down into 2 segments such as impaired segment and the performing segment. For the purchase credit impaired or PCI segment, there was a reversal of $142 million. The strong performance of this portfolio was largely driven by early repayments of both commercial and consumer loans. Going forward, there will be variability in this segment as we work through these PCI loans. The purchased performing portfolio had losses of $31 million in the current quarter. We expect formations and losses to continue in this part of the portfolio, but we believe these are adequately provided for to the mark taken at acquisition. There, of course, will be timing differences between when the losses occur and when we recognize the mark to income, as Tom explained. And finally, as shown at the bottom of the table, we also have an increase of our collective allowance, at $19 million this quarter, largely to support building of the allowance for the U.S. acquisition. Clearly, we are encouraged by the resiliency of the U.S. economy and the recent signs of improvement. Our formations, which are shown on Slide 27, have reduced this quarter and our legacy portfolio formations are down from quarter 4 and in line with formations in earlier quarters of last year. The purchased portfolio contributed $259 million to formations this quarter. $27 million of these formations are covered by an 80-20 FDIC loss share agreement. The remainder is roughly evenly split between consumer and commercial, and as I mentioned earlier, these loans are adequately provided for by the mark we took at acquisition. We have improved our formations disclosure to provide retail formations on a gross basis, with clear segregation of the retail and commercial drivers. Next, I would like to talk briefly about the Canadian household debt levels and housing market. We touched on this last quarter but I think it's appropriate to revisit. We are closely monitoring and remain attentive to potential interest rate increases in the medium term, slow wage growth, slight edging up in the unemployment rate, strong overseas investor participation in the housing market, the sizable condo pipeline in key markets like Davis [ph], Toronto and Vancouver. However, we believe the risks in our consumer book are manageable. Our prudent underwriting standards have been maintained through the cycle, and we continue to outperform peers on loss ratios across every consumer product portfolio. Our residential markets portfolio long run loss rate is less than 2 basis points. Our Canadian consumer portfolio for $122 billion is well secured, with 78% secured by residential real estate. With the total mortgage portfolio 70% is insured, the average loan-to-value of the segment is about 63% after adjusting for current house prices based on Canadian house price indices. On the uninsured portfolio, the average loan-to-value is 54%. In our HELOC portfolios, the average loan-to-value is 54%, and 94% of our loans are in first position. The majority of the remaining are behind the BMO first mortgage. The installment portion of our HELOCs, which is more comparable to mortgages, is about 1/2 of our portfolio. The remainder of the consumer portfolio is split between cars, auto finance and other personal loan products. These portfolios have been performing very well, and the unsecured portion is only 13% of the Canadian consumer portfolio. As part of our ongoing management discipline, we stress test our portfolios using different scenarios ranging from moderate to extreme. In our extreme stress scenario, with high unemployment rates, significant decline in housing prices, rapid increase in interest rates, the resulting GDP reduction of all our losses would increase but remain well within our ability to absorb. We continue to monitor the risks facing the Canadian real estate and credit markets, but overall, we are comfortable with our Canadian consumer exposures. Before I wrap up, you will notice that in the quarterly MD&A, we have expanded our disclosure on our European exposure including gross exposures and structured investment vehicles. While there continues to be uncertainty and economic strain in Europe, we believe our exposure is not outside, is well secured and manageable. Our geographic exposure is subject to solid country-to-stream [ph] book, incorporating economic and political assessments, limits on exposures, regular monitoring and we are mindful of second audit impacts in our assessment of individual transactions. We provide a summary of the European exposures on Slide 28. Our net debt exposure to the 5 high-risk countries of Greece, Ireland, Italy, Portugal and Spain is quite modest at just under $200 million, including unfunded commitments of $48 million. It primarily consists of exposures to banks for trade finance and trading products. Net direct exposure to the remaining 12 Eurozone countries is $4.7 billion, and for the rest of Europe another $3.6 billion. The majority of the exposure is to highly-rated countries and consists primarily of tradable cash products, short-term trading instruments and derivative products. In closing, I would say that I'm very pleased with our performance this quarter. The underlying credit trends have moved in a positive direction although we remain cautious in our outlook in light of several factors that are contributing to global economic uncertainty. Thank you. We will now turn over to the operator for question-and-answer portion of today's presentation.

[Operator Instructions] First question is from Steve Theriault of Merrill Lynch. Steve Theriault - BofA Merrill Lynch, Research Division: A couple of quick questions on the quick side, I think, first for Frank. Frank, last quarter, you said you'd be working hard to deliver positive operating leverage for the full year 2012, and appreciating full well that Q1 is a bit of a tough quarter seasonally. As we sit here, roughly 4 months into 2012, is that still an achievable goal for the full year? And then separately, I noted some pretty good growth in commercial deposits this quarter. Are you taking share there that's offsetting some of the loss in share in personal? Frank J. Techar: On your first question, with respect to expenses and productivity, we're not standing aside from what I said last quarter. We're working really hard to get to positive operating leverage in all subsequent quarters this year. And the expectation is that if we don't hit positive operating leverage by the end of the year for the full year, we're going to be very close. So we think that the trends that I was expecting last quarter are going to hold. We're going to see our revenue growth improve as we go through the remainder of the year. My expectation is we're going to end up in the low- to mid-single-digit range on revenue growth. We're managing our expenses tightly. Obviously, this first quarter, as you mentioned, was a little anomalous because of the compensation impact in Q1, and we have had some flow-through of some of the investments that we've made in previous quarters that hit in Q1 as well. We are going to continue to invest in our front-line capabilities but at a more moderate pace. We think we can manage that. We're going to try to hold our sales forces -- the investment in our sales forces that we've made over the course of the last year or so, and we think there's a way forward to get to that objective that we set. So all I can say is stay tuned on that front. Relative to commercial deposits, it's one of those areas that we have been focused on over the last year or so. We've been strong, as you know, from a commercial lending perspective for a long time. Our market share in commercial deposits is not commensurate with our natural share. So we put some initiatives in place over the course of the last few years, including adding some sales force in our cash management segment. And when I look at our growth over the last year or so, it has been very strong as you noted, and the share performance year-over-year is strong. We're #2 in our commercial deposits share performance year-over-year, and we think we're on the right track. So I'm optimistic that we're going to continue to improve in that product category. Steve Theriault - BofA Merrill Lynch, Research Division: And just one quick one, if I might, for Tom. You mentioned some -- you mentioned that asset management revenue benefited from a strategic investment. Can you talk to us quickly on the size and nature of that please? Thomas E. Flynn: Sure. That was revenue that we recorded in our PCG division. It relates to an equity investment that we have in a company. And a few years ago, we sold part of our U.S. mutual fund business, took back equity as a part of that transaction and have done well through that. And in the quarter, the net income impact from an unusually high level of income in the company that we have the investment in was about $20 million. Steve Theriault - BofA Merrill Lynch, Research Division: It is somewhat recurring? Thomas E. Flynn: There's absolutely a recurring equity pick-up but their income was unusually high this quarter.

The next question is from Sumit Malhotra of Macquarie Capital Markets. Sumit Malhotra - Macquarie Research: My first question is regarding Slide 21 of the presentation. It could be for Surjit or Tom. Just looking at the commercial loan balance in the U.S., there's a comment -- your second comment under commercial that says that growth was offset by pay-downs and declines in CRE and runoff portfolios. Can you give me an idea how much of the $30.1 billion balance would you say relates to what you would call portfolios that you're expecting to run off? I know you had placed some of the CRE-impaired portfolio in Corporate -- or is housed in Corporate. So how much of the $30.1 billion relates to portfolios you expect to run off? Surjit S. Rajpal: Sumit, this is Surjit. I will answer the last part of your question and then I'll ask others to perhaps deal with other segments. With respect to the real estate portfolio, when we -- at the time of acquisition, that portfolio was roughly $10 million and through the mark and through pay-downs, as well as loans sales that we've undertaken, that number is now down to $7 million. But that includes the mark [ph], let me tell you. So there has been a reduction as a consequence of that. There have been other pay-downs well and perhaps Mark or Tom want to talk about those. Mark F. Furlong: Okay. This is Mark Furlong. The -- so we have kind of a lower market portfolio. It's down about $500 million in the quarter and that was kind of an intended shrinkage. The big part of the portfolio, a little over $17 billion, is the kind of the core commercial banking business, and that portfolio continues to show some very nice growth. And that's the comment, up $1.1 billion. Sumit Malhotra - Macquarie Research: I guess what I just want to get clear here is that -- and correct me if I'm wrong -- when the M&I transaction closed, I believe the bank told us that the bulk of the impaired CRE book that you were looking to run-off was being housed in Corporate Services such that we'd be able to see the true trend in how the book you want to grow is actually performing. So what I just want to be clear of is when we look at this number every quarter, do you think that represents the base we should be looking at to see what kind of growth the bank is achieving in commercial or is there more of this portfolio that you expect to run off? Mark F. Furlong: I think it's a pretty good base. There'll probably be some commercial real estate out of here that we'll continue to let some refinance out, some opportunities where we think that's a good risk diversification strategy. But this is pretty close to a good base to look at. Now in here, we have a portfolio that we call runoff that is performing but that we think, over a period of time, will wind down or restructure or something, but currently performing. So this is the portfolio that we run through P&C that we watch closely and that we're trying to grow, and the bulk of the portfolio's related to relationships we want to grow. Sumit Malhotra - Macquarie Research: Fair enough. And then last one for me. Mark, you might get involved here again, and also directed to Tom. If I look at your non-compensation expenses in the quarter on an all-bank level, obviously I appreciate the increase that you have in Q1 for the benefits. So if we look at non-compensation, usually we see a peak from the bank in Q4 and then a decline to begin the new year. You were down about 2% but Mark's segment had an increase as to some of the others. Is there -- would you say, and you'd referenced this last quarter, Tom -- should we expect a level of non-compensation expenses at the bank to continue to trend lower as the year goes forward or do you expect we'll see the normal pattern of growth? Thomas E. Flynn: I'll say a few things in response to that. The first is that in the P&C U.S. segment, we did have a litigation provision in the quarter that was about $15 million so that item basically accounted for the increase in expense that you see. It was largely offset by a securities gain so not a big impact on the bottom line, but it does explain the expense change. In terms of the total bank compensation-related expense, I wouldn't say that we're expecting any fundamental changes in the trend. We had the $71 million in the quarter as we do every quarter, give or take -- or sorry, every first quarter. So that inflates the Q1 expenses but there's nothing else unusual going on other than the focus on productivity. And we talked about that last quarter and we talked about it this quarter as well. So we expect over time that that will show some benefits that you'll see in the compensation-related expenses and generally in expenses. Sumit Malhotra - Macquarie Research: I'm right to say it's $100 million you've talked about, of the $300 million in synergies target, that you expect the run rate by the end of this year will be $100 million for the U.S. business? Mark F. Furlong: Yes, that's correct.

The next question is from John Aiken of Barclays Capital. John Aiken - Barclays Capital, Research Division: Just a quick clarification for Surjit on the home equity line of credit. Surjit, I think that you stated that the loan-to-value on the HELOCs currently is at 54%? Surjit S. Rajpal: Sorry. Yes, I did. John Aiken - Barclays Capital, Research Division: Okay, and Surjit, do you have any back-of-the-envelope or quick calculation as to how much of the commitments are actually drawn on the HELOCs? So I'm assuming that they're not all at 100% drawn. Surjit S. Rajpal: Yes. I think the number -- quite roughly, about 1/2 of it, I would say, is drawn. John Aiken - Barclays Capital, Research Division: Okay. And I'm actually surprised it's taken this long to get to this question, but on the Corporate segment, Viki did an excellent job walking me through on the cash component of the recoveries in the impaired portfolio. But what was it in the quarter that actually drove these repayments? And is this something that might actually be recurring going forward or is the experience in the first quarter a bit of an anomaly in terms of the repayments that were received? Surjit S. Rajpal: So let me start. The repayments that we received were -- a lot of them, as you know -- the $142 million is entirely with the purchased credit impaired portfolio, and a lot of the $142 million relates to repayments. And I think the way you got to look at it is it is very difficult to predict pay-downs. And while we were quite happy with the pay-downs, typically in distressed pools, I think the early repayments come from clients who have the ability to refinance. And so that tells you that, I don't know that the pace may not be sustainable, but clearly, it helped us this quarter. Does that answer your question? John Aiken - Barclays Capital, Research Division: Yes, it does.

The next question is from Mario Mendonca of Canaccord Genuity. Mario Mendonca - Canaccord Genuity, Research Division: A question probably for Tom Milroy. The trading number was obviously pretty good. I think it was characterized by Bill as returning to normalized conditions. How would you characterize Q2 if you can? Does it feel normal again or -- what I'm really trying to get at is was there anything in this quarter either from a mark-to-market perspective like CVA or DVA that would have benefited the quarter? Thomas V. Milroy: Mario, we actually do think the trading revenues this quarter were probably back to levels we would expect to, in that range, see for the rest of the year. There was -- it was negative mark-to-market in Q4, which we didn't experience in Q1, which was -- obviously that's helpful. Which really -- the quarter was characterized -- the latter half, of seeing the high levels of volatility and the stress generally in the market leave, and so that enabled us to actually get back to business. We saw improved client flows, instances of wider bid-ask spreads, active new issue flows or stable funding costs and generally better overall market conditions. And so as I look at it -- in every quarter, we have mark-to-market activity but this felt, to us, like it was a quarter where we're coming back to more normal ranges. Mario Mendonca - Canaccord Genuity, Research Division: Helpful. Question for Surjit. You talked about the stress testing you did on the, I think on all your books, HELOC and what-have-you. And your comment was that you think that the bank is -- that the losses, while higher, will be well within your ability to absorb. And I need a little more clarification. When you say absorb, do you mean absorb without having to raise capital, or absorb in your earnings without earnings declining in a material way? I'm not sure what absorb means. Is it absorb from a debt perspective -- a debt holder's perspective or from a common equity holder's perspective? Surjit S. Rajpal: Let me put this in some perspective for you. I think -- let me give you a scenario that shall give you some sense of what I mean by what I said. If unemployment rates, for example, went up by -- to 9.5%. If housing prices declined by 25% and interest rates moved up by, let's say, 50 basis points and the GDP declined a little over 2.5%. In that scenario, our losses would, over a period of 2 years, double the base. And so that's what I mean by it would be totally manageable. So it would go up from, let's say, something like 40, 41 basis points to about 85, 87 basis points in that scenario. Mario Mendonca - Canaccord Genuity, Research Division: And just to be clear, that was unemployment 9.5%, housing down 25%, rates up 50 basis points and GDP down 2.5%? Surjit S. Rajpal: That's correct. Mario Mendonca - Canaccord Genuity, Research Division: And this is all over what, a 12-month period? Surjit S. Rajpal: This is over a 24-month period.

The next question is from John Reucassel of BMO Capital Markets. John Reucassel - BMO Capital Markets Canada: And a question maybe for Tom Flynn or Frank. Just to understand the CMHC decision to ration bulk insurance. Is it your understanding -- is this a temporary or is this a permanent shift in that? And how is that going to impact the way you manage the balance sheet or not? And what is the potential impact on funding costs or your ability to absorb loan growth or other things? Thomas E. Flynn: It's Tom, John. A few comments on that. The first would be that we don't see this as having a big impact in the near term on our business. There are other providers in the market who are able to offer insurance, and under existing insurance that we have, we have the ability to substitute new product in as existing product matures and rolls over. So not expecting a big impact in the near term. Obviously, I can't speak to CMHC's plans for future actions. And ultimately, our expectation would be that if there's a higher cost to funding for some portion of the portfolio, there would be an adjustment to market pricing that would, we would hope, offset that. John Reucassel - BMO Capital Markets Canada: Okay, okay, that's helpful. And then just for Surjit, just, when you talk about the losses going up, you're talking about the entire portfolio? It's not just the personal side of the -- it's the commercial lending, personal lending, the whole bit? Is that -- when you talk about these losses? Surjit S. Rajpal: You're referring to the stress? John Reucassel - BMO Capital Markets Canada: Yes. Surjit S. Rajpal: The stress is entirely on the consumer portfolio. John Reucassel - BMO Capital Markets Canada: Okay. So what would happen -- presumably, in those scenarios, there'd be some commercial losses. What would you expect on that? Surjit S. Rajpal: I don't have an estimate offhand of that one. But clearly, the scenario would result in losses elsewhere as well.

The next question is from Brad Smith of Stonecap Securities. J. Bradley Smith: Just 2 quick ones. On Slide 25, the $142 million negative provision related to the credit-impaired purchased loans. Would I be correct in assuming that the other side of that transaction or that entry would've been an increase of $142 million in the carried value of those loans? Thomas E. Flynn: No. The majority of the $140 million comes from payoffs of loans, so in effect it would be cash. J. Bradley Smith: So it would have been to cash. Okay, great. Then my second question relates to the sub-pack on Page 39. When we're looking at the changes in the allowance, consolidated allowance for credit. The recoveries there are $223 million. In the quarter, they were up about fourfold. And the write-offs were elevated from the fourth quarter and are at the highest level that they've been since I can remember. Can you talk a little bit about what led to that increase in recoveries, what the likelihood of it repeating itself would be, and what happened that caused write-offs in a quarter where otherwise it sounds like credit was improving to go up so much?

The next question is from Darko Mihelic of Cormark Securities. Darko Mihelic - Cormark Securities Inc., Research Division: How about I wait for the answer first? Viki A. Lazaris: Thanks, Darko. We're just taking a minute here. Surjit S. Rajpal: I'm trying to focus on the page you pointed out. Why don't we move to the next question and I'll get back to you. Viki A. Lazaris: Okay. Darko, if you want to ask your question, we'll get back to Brad's question. Darko Mihelic - Cormark Securities Inc., Research Division: Okay. I guess my question is regarding Slide 8. It's probably a question for Tom Flynn. Can you walk me through the mechanics of the increase in the net interest margin on an adjusted basis to 221 from 213? When we go through the sub-pack and through your written materials, it looks like it's coming from 2 areas. PCG -- now first of all, that equity investment, is that being recorded through the net interest income line? And more importantly, I suppose my question drills down to what's happened in Corporate? How did you get such a big increase in the margin quarter-over-quarter? One of the things that we noted in the balance sheet is an awful lot of Federal Reserve deposits. That's typically not something that would have margin associated with it. So any help on the margin improving and what the outlook for the margin would be very beneficial for my model. Thomas E. Flynn: Sure, it's Tom. I'll take that. So on Slide 8, we showed the adjusted margin x trading up 8 basis points to the 221. The biggest single driver of that relates to the higher investment asset management revenue in P&C Canada that we referred to earlier. And the accounting for this is a little counterintuitive but we do take that income through net interest income, and that increased the margin by about 4 basis points in the quarter. The Canadian Retail business, including the P&C business and the wealth business, increased the margin by 2 basis points quarter-over-quarter, and so the residual piece in Corporate wasn't that big. And I'd say, more than anything, just reflected random activities in the quarter that weren't individually significant. There was nothing really unusual going on from a Corporate perspective. Looking forward, next quarter we won't have the benefit of the PCG higher investment pick-up. So that was 4 basis points, so that number, all else equal, will drop by about 4. And in terms of the margin outlook in the retail businesses, for the last few quarters, we've talked about some pressure on margins in both Canada and the U.S. Canada reversed this quarter on that front, but we think the longer-term trend is intact, and so we'd expect some pressure on margins in the retail businesses over the next few quarters.

The next question's from Cheryl Pate of Morgan Stanley. Cheryl Pate - Morgan Stanley, Research Division: A question probably for Frank. I just wondered if you can lay out for us sort of your base case for housing in terms of home price appreciation for the year and how that sort of fits into the expectation for mid- to low-single-digit revenue growth and sort of the composition of mortgage growth within that sort of segregated into sort of new versus renewal activity. Thomas E. Flynn: Cheryl, so sorry, you cut off just a little bit when you were asking your question. This was about the contribution of mortgage growth to our overall revenue expectation. Was that it? Cheryl Pate - Morgan Stanley, Research Division: Right, and how you think about that in relation to sort of your base case for home price appreciation this year. Thomas E. Flynn: Well, I think to start, our expectation is that home price increases are going to moderate over the course of the year. We started to see that, I think, in this quarter. I think we will continue to see that. House price activity, in general our expectation is -- will slow but will still be appropriate for the marketplace. There's going to be growth. I just think it'll be at a slower pace than we've seen in 2011. So we've been -- we were pretty clear about our objective, which is -- we've been at 2% mortgage growth for quite some time now and our expectation is we can grow that a little faster. We're going to have to take some business from others as the market is slowing around us. So that's how I'm thinking about it and I don't think that's changed from the last few quarters. We plan on doing that through the activation of the investment in our sales force, our mortgage specialist sales force, which continues to grow. Obviously, we've been innovative over the last couple of years with respect to some of our products. And in particular, our 5-year fixed-rate, 25-year am [amortization] product, which has been in the marketplace for almost 2 years now, we think that's a product that is good for Canadians. It's good for Canada. It's good for our customers, and we intend to continue to promote it in this environment. I'd say it's a product that we believe addresses all of the risks that are currently being debated about whether or not there are consumer debt levels that are too high in Canada and the possible fallout from economic slowdown and rising interest rates. It helps our customers pay less interest. It mitigates their interest rate risk for 5 years. It helps them retire debt-free by and paying off their balance faster and it works against market price appreciation. In fact, it helps with the issue that you've raised, the house price appreciation, because the shorter amortization reduces the maximum purchase price people can afford. So we think that this product that we've been pushing for the last couple of years fits right into the sweet spot of what we need in the country and it will help our balance grow as we move forward. Cheryl Pate - Morgan Stanley, Research Division: That's helpful. And you can you just give me a sense of sort of where the volumes are coming from, new versus renewal or is it sort of fairly evenly split? Thomas E. Flynn: Yes. New versus renewal this past quarter was a little unusual because we did go out for this limited-time offer on our low rate product, the 2.99% offer. So we saw an increase in new in the first quarter. It was about 50-50 from an application perspective. But there's been a big shift in volumes going to fixed versus floating over the last couple of quarters. It's now 3/4 fixed versus 1/4 floating, and a year ago it was close to being the reverse. So we've seen some change in consumer behavior for sure. Cheryl Pate - Morgan Stanley, Research Division: So how does the current portfolio layout fixed versus floating on a sort of total basis? Thomas E. Flynn: I don't have that number right in front of me, Cheryl. I think it's about 50-50 though. That's my recollection. Maybe we'll just take a break before the next question and go back to Brad Smith's question and Surjit. Surjit S. Rajpal: Brad, on Page 39, I think if you're referring to the large pickup in the recoveries, that recovery number includes the $142 million of the purchased credit-impaired. And that is what is the big difference there. I can go into it in greater detail if you call me offline.

The next question is from Gabriel Dechaine of Credit Suisse. Gabriel Dechaine - Crédit Suisse AG, Research Division: Just on the M&I reversals, I'm just wondering why we should be treating that as core, and then to put that on a positive spin. And it's a reflection of obviously improving credit conditions and just wondering what that says about potentially improvement on the expense line later this year or 2013? Anything related to lower credit adjudication costs or the credit management processes? Has that outlook improved at all? And just a follow-up on Darko's question on the margin there. Just wondering about the Canadian segment. NIM that was up 2 basis points. I understand you're expecting that to maybe reverse in the coming quarters, but what was going on this quarter? How much was the deposit growth outpacing asset growth factoring into that? Thomas E. Flynn: It's Tom. I'll take the first part of the question related to the recovery on the purchased credit-impaired loans. I think the simple reason why we think it makes sense to include that in the core earnings is that impaired loans are accounted for in the same way if you purchase the loans versus if you don't. So there's no fundamental difference in the accounting for impaired purchase loans versus regular impaired loans. In both cases, you look to value the loans and you take any change in value through the P&L. This quarter, as we've talked about, the strong majority of the $142 million relates to actual payoffs on loans that were marked down and so that's a true gain. We do adjust for the credit mark-related accounting on the performing loans, and there are 2 reasons why we do that. The first is there's an inherent mismatch between the timing of the revenue recognition and the PCL expense recognition. We amortize a portion of the credit mark into income over time, more or less on a straight-line basis, and as we've talked about before, we expect the losses will emerge somewhat later. And so the last couple of quarters, we've seen meaningful income coming from that item. Through time, we think that the number will be closer to flat. The other reason we adjust for that is if we didn't, it would distort some of our ratios including revenue growth, productivity and net interest margin. On the question related to expenses on the impaired, I'd say it's too early to expect any pickup on that. We're still working the portfolio. People are doing a very good job realizing on the value, as we saw this quarter, and I think the expense reduction story there will be more one that we'll talk about next year. Now on the Canadian margin, I'll turn it over to Frank. Gabriel Dechaine - Crédit Suisse AG, Research Division: Actually next year, if you can elaborate a bit on that then, for the lower credit costs. Thomas E. Flynn: I think I'd be reluctant to speculate, really, on what the expense might do more than a year out. Assuming the economy continues to recover, and the impaireds go down, both purchased and regular, there will be some savings that will flow, but that's a ways out. Frank J. Techar: Gabriel, it's Frank. Relative to the margins in P&C Canada, the reported number was up 2 basis points. I characterize that as our margins remained relatively flat. And you were on target. The positive in the quarter was we have a favorable product mix. Our deposits grew faster than our loans in the quarter, and that was offset by the continuing competitive pricing pressures and the lower interest rate environment putting pressure on our deposit spreads. So essentially, those 2 things offset. We did have a couple of very small minor, non-core items that weren't correlated to the balance sheet growth that hit also in the knee line. So I characterize it as a quarter where we saw our margins remain relatively flat, and as I said earlier, my expectation is there is pressure, as we go through the remainder of the year, to the downside on margins for us. Gabriel Dechaine - Crédit Suisse AG, Research Division: And the commercial pricing trends are still good or got worse? Frank J. Techar: I'd call them rational. Spotty in places, maybe irrational in places. But overall, nothing systemic that is causing us a big concern at this point.

The next question is from Peter Routledge of National Bank Financial. Peter D. Routledge - National Bank Financial, Inc., Research Division: I just had two. First one is for Bill. It relates to Gabriel's question. On your dividend payout ratio on an adjusted basis, you're at 49%, near the middle range of your target. When the board thinks about the dividend, are they thinking about it in relation to the adjusted number or do you pull out the purchased credit-impaired piece? William A. Downe: Well, the -- I mean, the earnings available to the common [ph] are driven by the reported. And over time, it's our expectation that with the exception of the amortization of intangibles, those 2 numbers are going to converge. And I think that the way we think about it is more conditioned by the work stream that remains in 2012 on the integration than on anything else. That's really the timing. We have a lot of work to do. By the end of the calendar year, we're going to see a lot more clarity. We're going to see a lot more clarity around the earnings level and we'll see that convergence. So I think your question is really pointing towards timing and you're right, the bank's earning power is starting to show up nicely against the dividend and it's reflected in the payout ratio. So all other things being equal, when we're satisfied that we've followed through on the integration the way we're planning to, then we'll be in a position to look at it. Peter D. Routledge - National Bank Financial, Inc., Research Division: Okay. Just one more, perhaps for either Frank or Surjit. Just on the Canadian mortgage business. The CMHC has de-emphasized bulk insurance but, as I understand, there's still -- a high LTV mortgage comes up they'll still write insurance on it. So from BMO's perspective, would you rather have a high LTV mortgage where the consumer is already buying mortgage insurance at the get-go over a low LTV product where you couldn't necessarily get bulk insurance on that? Surjit S. Rajpal: That's an interesting question, I would say. This is Surjit. We have never relied too much on the CMHC from a risk mitigation standpoint. And so my answer to that question would be that we would underwrite to our standards and depending on client's needs. I wouldn't be driven by what can be is insurable or not, and that's the way it would approach it. Frank, anything? Can you help us with this? Frank J. Techar: I would just echo that comment. I think we're indifferent. We're comfortable with our underwriting standards and have been in either category.

The next and final question is from Brian Klock of Keefe, Bruyette, & Woods. Brian Klock - Keefe, Bruyette, & Woods, Inc., Research Division: A quick follow-up on the Canadian mortgage market, and this is for Frank. I guess. Frank, I think you said that you're, I guess, aiming to try to get back to a sort of 2% year-over-year mortgage growth for Canadian mortgage. I guess it sounds like, and maybe I'm thinking too much about the impact of this CMHC hitting its limits and what that could mean, but isn't there also somewhat of a trend given the high debt-to-income ratio for the Canadian consumer, that we should see some slowing in that whole mortgage pipeline? So I'm just wondering, I guess, is there something you're seeing? Are you saying that you think you can hit your targets by just the market takeaway with the innovative products? Frank J. Techar: Yes. I mean, I think, Brian -- I guess, very simply, we saw mortgage balance growth in Canada of about 7% in 2011. Our portfolio grew by about 2%. So all I'm saying is I think we have room to grow in the context of what we think the market growth is going to be in 2012, which might be a little slower than 7% but it's going to be higher than 2%. So we have the opportunity to do more business and that's what we're shooting for. Brian Klock - Keefe, Bruyette, & Woods, Inc., Research Division: Okay. And then last question. I guess we talked about this last quarter at the end of the fourth quarter call. I guess the concern outside is still that the condo market in Canada is somewhat frothy, I guess. Can you talk about the Canadian condo market? Are you guys ready to disclose what your exposure is to the Canadian condos and, I guess -- or even in the major metro markets? Any color you can give us, that'd be great. Surjit S. Rajpal: Yes, why don't I share some of it with you. We are very comfortable with the level we have. Our total condo exposure is $10 billion, and of that, the insured portion is $5.2 billion and the uninsured portion is the balance. I'll tell you why I'm comfortable. When I look at the higher risk segments of the condo market, we are not that -- very much involved in that segment. And I'll go through 3 segments that would cause me concern in particular. One would be the jumbo mortgages, which are greater than $1 billion, and in that segment, we have sub-$300 million of exposure. And as you know, in that segment while there's a higher down payment requirement, there is still the possibility of a larger decline with the higher value condos when actually markets do turn. Having said that, our loan-to-value there is very low, it's 55%. So that gives me comfort from the standpoint of the jumbos. Then the net segment that I think one looks at, which I think I'm not as concerned about but people ask why we should be concerned about it when you compare to the old saying in the U.S. which is the one where there is limited availability of financials or verification of income. In our case, that's largely the non-resident or the new immigrant program. And in that, again, our exposure is roughly -- it's under $1.5 billion and the loan-to-value there is, again, in the mid -- is low- to mid-50s. And in fact, when I look at that portfolio right now, that portfolio actually is performing better than the remaining part of our portfolio from a delinquency standpoint, if that gives you a sense of the selection process that we've gone through in making a determination of getting adjudication. The third segment of the portfolio I think one needs to look at is the investor-owned portion of that portfolio. And there, we are under $3 billion. And our loan-to-value is in the high 50s, it's about 58%, 59% loan-to-value. So when I look at it overall, I don't believe -- be concerned. From a geographic standpoint, I think the portfolio is scattered exactly where you would expect it to be. In the 2 big metropolitan areas where there are more condos and that's largely in Toronto and Vancouver, you have more of those. So it tracks where the condos are.

There are no further questions registered at this time. I would like to return the meeting over to Ms. Lazaris. Viki A. Lazaris: Great. Thanks very much, Jason. I'd like to thank everyone for joining us today. And if you have any further questions, the IR team is available to take your call. Thanks, and have a great afternoon.

Thank you. The conference has now ended. Please disconnect your lines at this time, and we thank you for your participation.