Bank of Montreal 1998 Annual Report Download - page 86

The components of goodwill and other valuation intangibles for
each major subsidiary are as follows:
1998 19 97
Goodwill
The Nesbitt Burns Corporation Limited
and subsidiaries $ 217 $ 246
Harris Bankcorp, Inc. and subsidiaries 202 201
Harris Bankmont, Inc. and subsidiaries 75 75
494 522
Other valuation intangibles
Harris Bankcorp, Inc. and subsidiaries 217 230
Harris Bankmont, Inc. and subsidiaries 74 74
Bank of Montreal Mortgage Corporation 811
299 315
To t a l $ 793 $ 837
Amortization of goodwill and other valuation intangibles is recorded
in our Consolidated Statement of Income as:
1998 19 97 199 6
Non-interest expense $72 $ 74 $ 54
Interest expense 11 11 12
To t a l $83 $ 85 $ 66
1998 19 97
Accounts receivable, prepaid expenses
and other items $ 3,736 $ 1,475
Accrued interest receivable 1,633 1,246
Due from clients, dealers and brokers 1,474 744
Unrealized gains and amounts receivable
on derivative contracts 12,552 6,655
Future income taxes 261 277
Goodwill and other valuation intangibles 793 837
To t a l $ 20,449 $ 11,234
Goodwill and Other Valuation Intangibles
When we purchase a subsidiary or a specific investment in a portfolio
of loans or securities we determine the fair value of the net assets
being acquired and compare this to the amount we pay for the invest-
ment. Any excess of the amount paid compared to the fair value is
considered to be goodwill or other valuation intangibles. This excess
amount is deferred and amortized to income over the period that we
believe the investment will benefit us, up to a maximum of 25 years.
The unamortized balance of goodwill and other valuation intangibles
is recorded in other assets and is written down to fair value when the
expected cash flows generated by the acquired subsidiary or asset
no longer support the carrying value and the shortfall is expected to
remain for some time.
78
BANK OF MONTREAL GROUP OF COMPANIES
We conduct our business through operating segments, each of which
has a distinct market, product and geographic mandate. Information
concerning the identification of these operating segments, including
NOTE 11 DEPOSITS
Demand deposits Payable Payable on
Interest bearing Non-interest bearing after notice a fixed date Total
1998 19 97 1998 19 97 19 98 19 97 19 98 19 97 19 98 19 97
Deposits by:
Banks $ 308 $ 186 $ 520 $ 465 $ 169 $ 697 $ 25,259 $ 29,924 $ 26,256 $ 31,272
Businesses and governments 2,966 2,569 8,637 7,875 7,597 7,132 38,864 37,325 58,064 54,901
Individuals 2,065 2,537 1,582 1,394 24,238 22,658 31,778 31,450 59,663 58,039
To t a l $ 5,339 $ 5,292 $ 10,739 $ 9,734 $ 32,004 $ 30,487 $ 95,901 $ 98,699 $ 143,983 $ 144,212
Booked in:
Canada $ 4,036 $ 3,765 $ 5,722 $ 5,358 $ 23,155 $ 23,911 $ 47,232 $ 49,381 $ 80,145 $ 82,415
United States 957 1,443 4,986 4,315 8,694 5,896 28,724 24,000 43,361 35,654
Mexico ––––––––––
Other countries 346 84 31 61 155 680 19,945 25,318 20,477 26,143
To t a l $ 5,339 $ 5,292 $ 10,739 $ 9,734 $ 32,004 $ 30,487 $ 95,901 $ 98,699 $ 143,983 $ 144,212
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 OPERATING AND GEOGRAPHIC SEGMENTATION
NOTE 9 OTHER ASSETS
disclosure of their revenues, expenses, net income, average assets,
loans and deposits, is set out in
the tables on pages 31 to 42 of our
Management Analysis of Operations
.
We record all premises and equipment at cost. Buildings, computer
and other equipment, and leasehold improvements are amortized on
a straight-line basis over the estimated useful life of the asset. The
maximum estimated useful lives we use to amortize our assets are:
■Buildings up to 40 years
■Computer and other equipment up to 10 years
■Leasehold improvements up to 15 years
For the years ended October 31, 1998, 1997 and 1996 amortization
expense amounted to $318 in 1998, $348 in 1997 and $234 in 1996.
Included in land and buildings are the costs for Bank-owned branches
and other properties, located in Canada, the United States and other
countries, of which we owned 530 as at October 31, 1998 and 558 as
at October 31, 1997.
1998 19 97
Land $ 280 $ 269
Buildings 1,282 1,209
Computer and other equipment 2,037 1,679
Leasehold improvements 350 319
3,949 3,476
Accumulated amortization (1,638) (1,418)
To t a l $ 2,311 $ 2,058
NOTE 8 PREMISES AND EQUIPMENT