Annual report pursuant to Section 13 and 15(d)

Federal Funds Sold or Purchased, Securities Financing Agreements, Short-term Borrowings and Restricted Cash

v3.10.0.1
Federal Funds Sold or Purchased, Securities Financing Agreements, Short-term Borrowings and Restricted Cash
12 Months Ended
Dec. 31, 2018
Federal Funds Sold, Securities Borrowed or Purchased Under Agreements to Resell and Short-term Borrowings [Abstract]  
Federal Funds Sold or Purchased, Securities Financing Agreements, Short-term Borrowings and Restricted Cash Federal Funds Sold or Purchased, Securities Financing Agreements, Short-term Borrowings and Restricted Cash
The table below presents federal funds sold or purchased, securities financing agreements (which include securities borrowed or purchased under agreements to resell and securities loaned or sold under agreements to repurchase) and short-term borrowings. The Corporation elects to account for certain securities financing agreements and short-term borrowings under the fair value option. For more information on the fair value option, see Note 21 – Fair Value Option.
 
 
 
 
 
 
 
 
 
Amount
 
Rate
 
Amount
 
Rate
(Dollars in millions)
2018
 
2017
Federal funds sold and securities borrowed or purchased under agreements to resell
 
 
 
 
 
 
 
Average during year
$
251,328

 
1.26
%
 
$
222,818

 
0.81
%
Maximum month-end balance during year
279,350

 
n/a

 
237,064

 
n/a

Federal funds purchased and securities loaned or sold under agreements to repurchase
 
 
 
 
 
 
 
Average during year
$
193,681

 
1.80
%
 
$
199,501

 
1.30
%
Maximum month-end balance during year
201,089

 
n/a

 
218,017

 
n/a

Short-term borrowings
 
 
 
 
 
 
 
Average during year
36,021

 
2.69

 
37,337

 
2.48

Maximum month-end balance during year
52,480

 
n/a

 
46,202

 
n/a

n/a = not applicable
Bank of America, N.A. maintains a global program to offer up to a maximum of $75 billion outstanding at any one time, of bank notes with fixed or floating rates and maturities of at least seven days from the date of issue. Short-term bank notes outstanding under this program totaled $12.1 billion and $14.2 billion at December 31, 2018 and 2017. These short-term bank notes, along with FHLB advances, U.S. Treasury tax and loan notes, and term federal funds purchased, are included in short-term borrowings on the Consolidated Balance Sheet.
Offsetting of Securities Financing Agreements
The Corporation enters into securities financing agreements to accommodate customers (also referred to as “matched-book transactions”), obtain securities to cover short positions, and to finance inventory positions. Substantially all of the Corporation’s securities financing activities are transacted under legally enforceable master repurchase agreements or legally enforceable master securities lending agreements that give the Corporation,
in the event of default by the counterparty, the right to liquidate securities held and to offset receivables and payables with the same counterparty. The Corporation offsets securities financing transactions with the same counterparty on the Consolidated Balance Sheet where it has such a legally enforceable master netting agreement and the transactions have the same maturity date.
The Securities Financing Agreements table presents securities financing agreements included on the Consolidated Balance Sheet in federal funds sold and securities borrowed or purchased under agreements to resell, and in federal funds purchased and securities loaned or sold under agreements to repurchase at December 31, 2018 and 2017. Balances are presented on a gross basis, prior to the application of counterparty netting. Gross assets and liabilities are adjusted on an aggregate basis to take into consideration the effects of legally enforceable master netting agreements. For more information on the offsetting of derivatives, see Note 3 – Derivatives.
 
 
 
 
 
 
 
 
 
 
Securities Financing Agreements
 
 
 
 
 
 
 
 
 
 
 
Gross Assets/Liabilities (1)
 
Amounts Offset
 
Net Balance Sheet Amount
 
Financial Instruments (2)
 
Net Assets/Liabilities
(Dollars in millions)
December 31, 2018
Securities borrowed or purchased under agreements to resell (3)
$
366,274

 
$
(106,865
)
 
$
259,409

 
$
(240,790
)
 
$
18,619

Securities loaned or sold under agreements to repurchase
$
293,853

 
$
(106,865
)
 
$
186,988

 
$
(176,740
)
 
$
10,248

Other (4)
19,906

 

 
19,906

 
(19,906
)
 

Total
$
313,759


$
(106,865
)

$
206,894


$
(196,646
)

$
10,248

 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
Securities borrowed or purchased under agreements to resell (3)
$
348,472

 
$
(135,725
)
 
$
212,747

 
$
(165,720
)
 
$
47,027

Securities loaned or sold under agreements to repurchase
$
312,582

 
$
(135,725
)
 
$
176,857

 
$
(146,205
)
 
$
30,652

Other (4)
22,711

 

 
22,711

 
(22,711
)
 

Total
$
335,293


$
(135,725
)

$
199,568


$
(168,916
)

$
30,652


(1) 
Includes activity where uncertainty exists as to the enforceability of certain master netting agreements under bankruptcy laws in some countries or industries.
(2) 
Includes securities collateral received or pledged under repurchase or securities lending agreements where there is a legally enforceable master netting agreement. These amounts are not offset on the Consolidated Balance Sheet, but are shown as a reduction to derive a net asset or liability. Securities collateral received or pledged where the legal enforceability of the master netting agreements is uncertain is excluded from the table.
(3) 
Excludes repurchase activity of $11.5 billion and $10.2 billion reported in loans and leases on the Consolidated Balance Sheet at December 31, 2018 and 2017.
(4) 
Balance is reported in accrued expenses and other liabilities on the Consolidated Balance Sheet and relates to transactions where the Corporation acts as the lender in a securities lending agreement and receives securities that can be pledged as collateral or sold. In these transactions, the Corporation recognizes an asset at fair value, representing the securities received, and a liability, representing the obligation to return those securities.
Repurchase Agreements and Securities Loaned Transactions Accounted for as Secured Borrowings
The following tables present securities sold under agreements to repurchase and securities loaned by remaining contractual term to maturity and class of collateral pledged. Included in “Other” are transactions where the Corporation acts as the lender
in a securities lending agreement and receives securities that can be pledged as collateral or sold. Certain agreements contain a right to substitute collateral and/or terminate the agreement prior to maturity at the option of the Corporation or the counterparty. Such agreements are included in the table below based on the remaining contractual term to maturity.
 
 
 
 
 
 
 
 
 
 
Remaining Contractual Maturity
 
 
 
 
 
 
 
 
 
 
 
Overnight and Continuous
 
30 Days or Less
 
After 30 Days Through 90 Days
 
Greater than
90 Days (1)
 
Total
(Dollars in millions)
December 31, 2018
Securities sold under agreements to repurchase
$
139,017

 
$
81,917

 
$
34,204

 
$
21,476

 
$
276,614

Securities loaned
7,753

 
4,197

 
1,783

 
3,506

 
17,239

Other
19,906

 

 

 

 
19,906

Total
$
166,676


$
86,114


$
35,987


$
24,982


$
313,759

 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
Securities sold under agreements to repurchase
$
125,956

 
$
79,913

 
$
46,091

 
$
38,935

 
$
290,895

Securities loaned
9,853

 
5,658

 
2,043

 
4,133

 
21,687

Other
22,711

 

 

 

 
22,711

Total
$
158,520


$
85,571


$
48,134


$
43,068


$
335,293

(1) 
No agreements have maturities greater than three years.
 
 
 
 
 
 
 
 
Class of Collateral Pledged
 
 
 
 
 
 
 
 
 
Securities Sold Under Agreements to Repurchase
 
Securities
Loaned
 
Other
 
Total
(Dollars in millions)
December 31, 2018
U.S. government and agency securities
$
164,664

 
$

 
$

 
$
164,664

Corporate securities, trading loans and other
11,400

 
2,163

 
287

 
13,850

Equity securities
14,090

 
10,869

 
19,572

 
44,531

Non-U.S. sovereign debt
81,329

 
4,207

 
47

 
85,583

Mortgage trading loans and ABS
5,131

 

 

 
5,131

Total
$
276,614


$
17,239


$
19,906


$
313,759

 
 
 
 
 
 
 
 
 
December 31, 2017
U.S. government and agency securities
$
158,299

 
$

 
$
409

 
$
158,708

Corporate securities, trading loans and other
12,787

 
2,669

 
624

 
16,080

Equity securities
23,975

 
13,523

 
21,628

 
59,126

Non-U.S. sovereign debt
90,857

 
5,495

 
50

 
96,402

Mortgage trading loans and ABS
4,977

 

 

 
4,977

Total
$
290,895


$
21,687


$
22,711


$
335,293


Under repurchase agreements, the Corporation is required to post collateral with a market value equal to or in excess of the principal amount borrowed. For securities loaned transactions, the Corporation receives collateral in the form of cash, letters of credit or other securities. To determine whether the market value of the underlying collateral remains sufficient, collateral is generally valued daily, and the Corporation may be required to deposit additional collateral or may receive or return collateral pledged when appropriate. Repurchase agreements and securities loaned transactions are generally either overnight, continuous (i.e., no stated term) or short-term. The Corporation manages liquidity risks related to these agreements by sourcing funding from a diverse
group of counterparties, providing a range of securities collateral and pursuing longer durations, when appropriate.
Restricted Cash
At December 31, 2018 and 2017, the Corporation held restricted cash included within cash and cash equivalents on the Consolidated Balance Sheet of $22.6 billion and $18.8 billion, predominantly related to cash held on deposit with the Federal Reserve Bank and non-U.S. central banks to meet reserve requirements and cash segregated in compliance with securities regulations.