Bank of Montreal 1999 Annual Report Download - page 91

Bank of Montreal Group of Companies 1999 Annual Report 85
Demand deposits are comprised primarily of our customers’
chequing accounts, some of which we pay interest on. Our cus-
tomers need not notify us prior to withdrawing money from their
chequing accounts.
Deposits payable after notice are comprised primarily of our
customers’ savings accounts, on which we pay interest. Our cus-
tomers are often required to give us notice prior to withdrawing
money from these accounts.
Deposits payable on a fixed date are comprised primarily of
various investment instruments purchased by our customers,
such as term deposits and guaranteed investment certificates, to
earn interest over a fixed period. The term of these deposits can
vary from one day to ten years.
Deposits include federal funds purchased, which are overnight
borrowings of other banks’ excess reserve funds at a United
States Federal Reserve Bank. As at October 31, 1999 we had pur-
chased $3,677 and $3,461 as at October 31, 1998.
Deposits include commercial paper totalling $649 as at
October 31, 1999 and $615 as at October 31, 1998.
Included in our deposits are $28,180 of individual deposits
greater than $100,000.00 in Canada and $52,109 outside Canada
as at October 31, 1999 and $26,025 in Canada and $44,686 outside
Canada as at October 31, 1998. Of the total deposits booked in
Canada $18,590 related to deposits maturing within six months
or less as at October 31, 1999 and $19,856 as at October 31, 1998.
Individual deposits greater than $100,000.00 outstanding that are
payable on a fixed date totalled $80,289 as at October 31, 1999 and
$70,711 as at October 31, 1998.
Note 11 Other Liabilities
Note 12 Subordinated Debt
Acceptances
Acceptances represent a form of negotiable short-term debt that is
issued by our customers and which we guarantee for a fee. We have an
offsetting claim, equal to the amount of the acceptances, against our
customers when the instrument matures. The amount due under accep-
tances is recorded as a liability and our corresponding claim is recorded
as an asset in our Consolidated Balance Sheet.
Securities Sold but not yet Purchased
Securities sold but not yet purchased represent our obligation to deliver
securities which we did not own at the time of sale. These obligations
are recorded at their market value. Adjustments to the market value
as at the balance sheet date and gains and losses on the settlement of
these obligations are recorded as interest, dividend and fee income from
securities in our Consolidated Statement of Income.
Securities Sold under Repurchase Agreements
Securities sold under repurchase agreements represent short-term fund-
ing transactions where we sell securities that we already own and
simultaneously commit to repurchase the same securities at a specified
price on a specified date in the future. These securities are recorded at
their original cost. The interest expense related to these liabilities is
recorded on an accrual basis.
Subordinated debt represents our direct unsecured obligations
to our debt holders and forms part of our regulatory capital.
The rights of the holders of our notes and debentures are subor-
dinate to the claims of depositors and certain other creditors. We
require prior approval from the Superintendent of Financial
Institutions Canada before we can redeem any part of the subor-
dinated debt.
Our subordinated debt consists of notes and debentures with
interest rates ranging from 5.49% to 10.85%. The maturity dates
extend from May 2002 to August 2089.
The interest rates on certain debenture series are variable
based on various indices. In addition, certain series of subordi-
nated debt are redeemable at our option on various dates prior to
February 2012.
1999 1998
Acceptances $ 6,753 $ 6,944
Securities sold but not yet purchased 10,450 7,843
Securities sold under repurchase agreements 24,177 29,758
$ 41,380 $ 44,545
Accounts payable, accrued expenses
and other items $ 3,044 $ 3,150
Liabilities of subsidiaries, other than deposits 2,715 1,433
Accrued interest payable 1,382 1,298
Unrealized losses and amounts
payable on derivative contracts 9,029 12,133
Deferred loan fees 104 132
Non-controlling interest in subsidiaries 394 517
Other $ 16,668 $ 18,663
Total $ 58,048 $ 63,208
Included in liabilities of subsidiaries, other than deposits are
other short-term borrowings totalling $2,568 as at October 31,
1999 and $1,279 as at October 31, 1998.
Included in subordinated debt are debentures and subordi-
nated notes denominated in U.S. dollars totalling US$950 as
at October 31, 1999 and October 31, 1998. The Canadian dollar
equivalent of these is $1,398 as at October 31, 1999 and $1,466 as
at October 31, 1998.
Repayments of our subordinated debt required over the next
five years and thereafter are:
2000 $ –
2001 –
2002 150
2003 250
2004
–
Thereafter 4,312
Total $ 4,712