Banking Without Borders Product Training

1. Banking Without Borders Product Training Last Revised: June 2012

2. Contents • Banking Without Borders (BWB) Program Overview • What is it? • How does it compare to competitor’s offerings • Target Market • Value Proposition • Offering • Program Support • Product Training • Accounts • Concentrator Deposit Receivables Service • FCCS • Online Banking for Business • Electronic Funds Transfer • Wholesale Lockbox • DirectCheque • Tax and Bill Payments • File Connectivity • Appendices

3. Program Overview

4. What is the Banking Without Borders (BWB) Program? • BMO sells its Canadian Treasury Management product suite to Correspondent Banks headquartered in US, Canada, Europe or Asia • The Correspondent Bank then “resells” these cash management products to their client base to enable these clients to bank in Canada, while maintaining one single banking relationship with them, their primary provider • The Correspondent Bank controls the account and remains the primary contact with their client • BMO has been working with correspondent banking partners for over 20 years and currently have over a 12 partners on the BWB Program • Our program is flexible - we work with our partners to tailor our offer to their needs • Demonstrated success at driving value for correspondent banks and their clients

5. Competitor’s Offerings • Of the 6 major financial institutions in Canada only a few offer a similar program to BMO’s Banking without Borders • Their offerings are typically a more standard offering that does not allow them the flexibility of the Banking without Borders Program • BMO has a dedicated group that has been trained to deal specifically with Financial Institutions on the program. This enables them to have the experience to troubleshoot issues effectively and make recommendations • BMO offers a training program to the sales groups of our partners so that they can develop their understanding of the program and the benefit to their clients

6. Target Market The BWB Program will meet the needs of a Bank who has clients that: • Have branches, offices or sales activities in Canada • Have business dealings in Canada but manage treasury functions from their head-office • Regularly deposit Canadian dollar instruments to their account with you • Want to collect funds, make payments and receive information from Canada – quickly and easily • Prefer a trusted source with whom they already have a local banking relationship • Do not want the complexity of managing new, multi-national banking relationships

7. Value Proposition – Differentiation Based on Relationship and Convenience More Capabilities:Protected and enhanced relationships with your clients More Resources: Minimal investment and effort More Solutions: Provide leading edge cross-border cash management and treasury solutionsto your clients New sources of Revenue For You – Deeper Relationships For Your Clients – Convenience • Convenience:Maintain their banking relationship with you – their trusted banker • Seamless access to robust Canadian cash management and treasury solutions • Improved cash management • Value: Reduced cost and complexity • Service: Reduced complexity associated with other international banking relationships 6

8. Overview of Different Models BMO supports several models within our Banking Without Borders program 7

9. Team Approach with Dedicated Resources Team Model: Manage our relationship and the success of your program Partnership:Work closely with you to meet your needs Program: Strategic focus on today and future Expertise:Dedicated POD with Banking Without Borders program training Relationship & Sales Management PODTeam Program Management Your Dedicated Team Sales Manager:Marcia Cowan Senior Sales Associate: Rebecca Patton Program Manager:Sarah Cairns Senior Product Manager: Jay Pickett Client Service: Munira Gohill, Brian Liu Help Desk:Adam Hewitt, Maria Kadomtseva, Yousouf Mohoboob Implementation:Khatra Haji, Frank Morelli Documentation: Stephanie Chan 8

10. Program Support - Web Site • Pitch Book Template • White labelled marketing materials • Fact sheets • Legal forms • Learning tools • Process Flows

11. Our End-to-End Program Management Approach Strategic Alignment • A flexible program tailored to suit the needs of you and your clients • A collaborative relationship to deliver on your strategy and promise to your client’s Program and Products • We work with you, our banking partner, to determine the ideal solution to offer your client • Our delivery model is customized based on your client delivery strategy • The entire BMO Treasury Management product suite is available to you Sales Support and Training • Tailored training for your team • Dedicated sales support for complex deals and RFPs Implementation • Dedicated implementation support • Dedicated documentation and account opening support • All your customer implementations are handled by people who understand your strategy and are aligned to our partnership After Sales Support • Dedicated Customer Service and Help Desk support • Dedicated 1-800 number and e-mail for our partner banks

12. Product Training

13. BWB: Full suite of world class treasury management solutions • BMO offers the full suite of treasury management services to our Correspondent Bank partners • There are no restrictions on what Canadian services we can offer Receivables Solutions: Lockbox Incoming Wire Payments

14. Standard Product Suite Account (CAD & USD) Check writing capabilities Information Solutions: Online Banking for Business Platform White Label Capabilities File Connectivity MT940/BAI solutions Payables Solutions: Directcheque + Enhanced Positive Pay Electronic Funds Transfer Tax and Bill Payments Receivables Solutions: Wholesale Lockbox (WLBX) Note: Although this is our standard offering, all products and services are available to your clients 13

15. Other Product Offerings • FirstBank Automated Clearing Services (FACS) • Wire Payments • FirstBank Cash Concentrator Service (FCCS) • Credit Cards – Referral, not through the program As our offering includes all products and services available our team is readily available to assist with RFP’s that you may receive from your clients. We can offer assistance with responding to questions or can also participate in calls with the prospective client as needed.

16. Current Accounts

17. Current Account Characteristics • Available on BMO’s International platform (CBDS Accounts) or Domestic platform (Mech accounts) • Provides access to Canadian banking services • Both available in Canadian and US Dollars (domestic) • Credit and Terms and Conditions • On default, no overdraft limits will be made available on the checking accounts, i.e. operations take place on a “pre-funded” basis • Accounts will be interest bearing, however interest paying arrangements should be typically offered to customers on a defensive basis

18. Account Features

19. Account Features

20. Agreements Without Trigger Lender retains complete authority and control over the operation of the Blocked Account Borrower is not allowed to debit account End of Business day all balances will be transferred to the Collection Account Agreements With Trigger Blocked Account operates within the normal parameters established within the Agreement. Borrower maintains authority on Blocked Account Written notice in the form of Trigger Notice from Lender is supplied to Bank of Montreal Upon receipt of Trigger Notice, Bank of Montreal will require up to two (2) business days – as per Section 4. of Blocked Account Agreement- to implement the necessary changes required by the Trigger Notice. Accordingly Bank of Montreal will act upon the received notice and instruct their processing center to block all debit transactions relating to the Blocked account Processing center will block all debit transactions and allow credit transactions to the Blocked Account Bank of Montreal will transfer account balance to Collection Account. Client waives all authority to Debit Blocked Account Borrower loses authority on the operational management of the Blocked Account and Lender acquires operational authority and control Block Account Agreements • Similarities: • Standard Agreements will be discussed and agreed upon by BMO and yourselves • Changes to the standard forms are not allowed • Blocked Account Agreement between all respective parties is duly executed

21. Concentrator Deposit Receivables Services (CDRS)

22. Concentrator Deposit Receivable Services (CDRS): Features • Deposits to the account available through SWIFT MT 940 statements or via the Client Direct Access (CDA) site • Information can flow from field locations through the use of 16 character alpha-numeric customer ID and 35 character alpha-numeric customer description field. • Specialized deposit forms (CR 72) allow for the deposit at any BMO branch location in Canada

23. Concentrator Deposit Receivable Services (CDRS): Benefits Improved cash flow • Provide immediate access to funds • Enable businesses to minimize excess balances and streamline reconciliation Detailed, online information reporting • Provides transaction details online via CDA • Allow businesses to monitor each of their outlet’s daily deposits Increased security and control • Allow businesses to monitor each of their outlet’s deposit activity

24. FirstBank® Cash Concentrator Services (FCCS)

25. FCCS: Features • Daily reports identify the office making the deposit, division number, branch transit numbers, value date, amounts deposited and a message field • Data File available in both 80 and 1464 bit files • Reports are available via our Online Banking for Business platform or through hard copy with at the branch of account • Information can flow from field locations through the use of 25 character alpha-numeric message field • A special concentrator number is assigned for making deposits and generating reports

26. FCCS: Benefits Improved cash flow • Provide immediate access to funds • Enable businesses to minimize excess balances and streamline reconciliation Detailed, online information reporting • Provide real-time transaction details online via our Online Banking for Business platform • Allow businesses to monitor each of their outlet’s daily deposits Increased security and control • Allow customers to monitor each outlet’s deposit activity • Prevent outlets from having access to sensitive account information

27. FCCS: Complimentary Service • Drawcheque Service • A deposit management and transfer service • Canadian dollar deposits made at any Canadian FI can be transferred to the customers BMO consolidation account and receive same day value • Can be used as a complimentary service to FCCS or as a payment collection service • Online • IVR

28. Online Banking for Business

29. OLBB supports full single sign on and private label functionality enhancing the end client experience Online Banking for Business: Product Overview • Online Banking for Business is a web-based cash management solution • Real-time account information (mech accounts only) • Single source for all treasury management products and reports • Flexible administration tools • Ability to designate multiple users and approvers • Receive Alerts • Make timely and informed business decisions • Save time with easy, anywhere access • Gain added security and control • Only need a PC and an Internet connection • A modular platform: your customers can choose the services they need today and add modules as their business needs change

30. Online Banking for Business: Benefits Increased control • Timely information allows customers to make informed business decisions • Customers can control their own administration by setting up and deleting users in seconds, as well as resetting user passwords Convenience • Allows customers to access their account information and perform transactions around the clock - from their own PC • Customers can receive all of their cash management reports electronically through the file transfer facility Flexibility • Tailor services to match their specific needs • Choose only the modules they need today and add modules as their business grows Security • Online Banking for Business uses 256-bit encryption, the strongest form of encryption generally available in Web browsers today • Requires 2 levels of user IDs and passwords • Ability to limit user access by account, report template, transaction type and dollar amount

31. STANDARD MODULES Image Search Customer Self Administration OPTIONAL MODULES Electronic fund transfers (EFT) File Transfer Facility (FTF) DirectCheque Inquiries & Stop Payments Wholesale Lockbox Lockbox Imaging Tax and Bill Payments Wire Payments Online Banking for Business: Features

32. Electronic Funds Transfer (EFT/ACH)

33. EFT – Product Overview • EFT is an electronic funds transfer service that provides our customers the ability to electronically process transactions in CAD or USD through any Canadian financial institution. • EFT is of benefit to any customers that need to be able to process debit or credit transactions electronically for collections or disbursements could be interested in EFT. The higher the transaction volume your customer has, the more cost effective EFT’s are (versus issuing checks). It is for customers who need to: • Pay employees • Pay suppliers, utilities, etc. • Receive payments from customers via pre-authorized debits (PAD) • Improve security by eliminating lost, stolen and forged checks • Eliminate reliance on the postal system • Eliminate embarrassing late payments and associated charges

34. EFT: Features • Payment Files • Customer Released • Fixed Frequency • File creation and transmission

35. EFT: Features • Post delivery functions • Corrections • Resubmissions • Recall • Verify • Tracing • File Status

36. EFT: Features

37. EFT: Benefits • Reduced Costs • Enhanced Customer/Vendor Relations • Improved Cash Management • Reduced risk of check fraud

38. Wholesale Lockbox (WLBX)

39. Wholesale Lockbox (WLBX) • BMO has a Wholesale Lockbox solution with national coverage. We have processing centres located in Halifax, Montreal, Toronto, Winnipeg, Calgary and Vancouver • Enables businesses to receive mail payments at strategically located post office boxes for same-day processing and deposit into their BMO Bank of Montreal account • Wholesale Lockbox is one of the most efficient ways to collect, process and consolidate paper-based deposits into a single account • Cash flow and cash application process enhanced by increasing the speed of the collection of receivables and the flow of information • Primary targets are larger Commercial and Corporate customers, although smaller companies also find value in the Wholesale Lockbox service • Any customer with the following needs could be interested in Wholesale Lockbox: • They receive low-volume, high-dollar paper payments from customers • They wish to maximize cash flow and funds availability, and improve the speed with which information is received

40. Wholesale Lockbox (WLBX) • Wholesale Lockbox allows customer’s customers to mail invoice payments directly to a strategically located lockbox. The lockboxes are cleared daily and credits are made to the customer’s account • Wholesale Lockbox typically handles a low transaction volume, with a relatively high dollar value per transaction • They are usually business-to-business payments and the paper invoices processed could vary in size and format • Wholesale Lockbox is an extremely manual process, that results in a lot of keystrokes

41. Wholesale Lockbox - Features • The deposit advice package (may include original invoice, check copies, envelopes, and detail deposit listing) is mailed directly to the customer's office • A duplicate deposit advice can be dispatched to an alternative customer addresses • A copy of each check deposited can be provided with the deposit advice and a second copy can be included with the duplicate advice • Specialized sorts and match and staple combinations of the invoice, check images and envelopes can be provided • Imaging available through Online Banking for Business or via CD-ROM and bulk file image delivery • Notification and payment details can be provided via fax report or data transmission. Data entry of invoice information and capture of check MICR line is available. Standard reporting time is at end of day (16:00 ET) • Lockboxes are offered in Canadian or USD currency • Lockboxes offer a post date feature up to 365 days

42. Wholesale Lockbox: Features

43. Wholesale Lockbox - Imaging • WLBX Imaging via Online Banking for Business allows your customers to access images and view lockbox documents including all correspondence (envelopes, invoices, etc.) • Web • Search and view lockbox documents • End-of-day • Intraday • Specified date • View Lockbox deposit activity report • Up to 90 day history • CD-ROM • Lockbox images available via CD-ROM and can be provided daily, weekly, monthly after 48 hours of the end of processing • CDs are encrypted to provide enhanced security • Lockbox document images from all lockboxes can be consolidated into one CD or a separate CD can be created for each lockbox • Software used for CD-ROM viewing is loaded onto each and every CD and is automatically launched from the disk when loaded into the CD-ROM drive • Alternatively we are able to deliver lockbox images via bulk file image delivery

44. DirectCheque (DCH)

45. DirectCheque - Product Overview • DirectCheque is a low cost, fully automated check processing and reconciliation service designed for high volume check issuers • DirectCheque provides consistent, readily accessible disbursement information, including a computer-generated printout of cancelled checks coinciding with a statement cycle • The service lowers check processing costs, while providing automatic tracing and the flexibility to quickly issue stop payments • This account reconcilement product is ideal for any small, mid-market, commercial and corporate businesses that issue a considerable volume of checks. • Any customer with the following needs could be interested in DirectCheque (DCH): • Customers who are looking for an economical and flexible check processing and reconciliation solution • Customers who require processing and reporting of paid checks based on their preferred accounting or statement cycle • Customers who wish to manage check fraud risk • Customers who issue a significant volume of checks (i.e., a minimum 500 checks per account, per reconciliation) • Customers who want to save time, money or resources internally reconciling checks cashed with check issued

46. DirectCheque - Basics Pseudo Accounts A unique number assigned to a DirectCheque customer. Pseudo accounts cannot be accessed through Online Banking for Business for account information and transfers. Posting Accounts A BMO internal suspense account used for posting and balancing. Funding Accounts Account is owned by the customer and is used to fund the check cleared the previous day. A zero balancing transaction is automatically established between the posting account and funding account as required

47. DirectCheque - Basics • A unique branch number is encoded on the checks. • Funded through the customer’s account • Electronic Reports are available. • Online check status inquiry and stop payment placement/removal is available via Online Banking for Business. • Check images for DirectCheque accounts are available online (Online Banking for Business), CD-ROMs, DVD-ROMs and Bulk File Image Delivery.

48. DirectCheque - Benefits and Features Benefits • Reduced Costs • Increased Control • Faster, More Reliable Data Exchange • Fraud Risk Reduction with Check Validation service which can include option of payee name verification. Features • Two basic reconciliation plans • Return of paid checks • Bypass branch processing • Daily status of stop payments • Optional critical value report • Online check status inquiry • Check Validation service with the option of payee name verification

49. DirectCheque - Reconciliation Plans • DirectCheque (DCH) is specifically designed for high volume check issuers. • Two basic reconciliation plans are available: • Partial Reconciliation - Paid check list • A hard copy reconciliation report is provided. The report lists paid checks in serial number order, showing serial number, dollar amount and paid date. Paid checks are sorted and returned to the customer in convenient storage boxes. • Full Reconciliation • Includes the features of the plan listed above • The customer supplies BMO with check issue data via electronic transmission for MICR Positive Pay or Payee name verification. customer to send honour/dishonour instructions to Symcor prior to 2:00 pm Eastern Standard Time. • Options for Positive Pay: • Match to Issue MICR • Payee Name Verification • Critical Value

50. DirectCheque - Reconciliation Plans Sort Returned Account Reconciliation Report Paid check Data Print-out of all issued and paid checks Customer supplied check issue information Account Plan Plan 1    Paper Plan 2    FTF Plan 5    Hard copy FTF Plan 2 & 5 Positive Pay Match to Issue    FTF Hard copy FTF