Annual report pursuant to Section 13 and 15(d)

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

v3.20.4
Federal Funds Sold or Purchased, Securities Financing Agreements, Short-term Borrowings and Restricted Cash
 12 Months Ended
Dec. 31, 2020
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) 2020 2019
Federal funds sold and securities borrowed or purchased under agreements to resell
Average during year $ 309,945  0.29  % $ 279,610  1.73  %
Maximum month-end balance during year 451,179  n/a 281,684  n/a
Federal funds purchased and securities loaned or sold under agreements to repurchase
Average during year $ 192,479  0.69  % $ 201,797  2.31  %
Maximum month-end balance during year 206,493  n/a 203,063  n/a
Short-term borrowings
Average during year 22,486  0.54  24,301  2.42 
Maximum month-end balance during year 30,118  n/a 36,538  n/a
n/a = not applicable
Bank of America, N.A. maintains a global program to offer up to a maximum of $75.0 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 $3.9 billion and $11.7 billion at December 31, 2020 and 2019. These short-term bank notes, along with Federal Home Loan Bank 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 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, 2020 and 2019. 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, 2020
Securities borrowed or purchased under agreements to resell (3)
$ 492,387  $ (188,329) $ 304,058  $ (272,351) $ 31,707 
Securities loaned or sold under agreements to repurchase $ 358,652  $ (188,329) $ 170,323  $ (158,867) $ 11,456 
Other (4)
16,210  —  16,210  (16,210) — 
Total $ 374,862  $ (188,329) $ 186,533  $ (175,077) $ 11,456 
December 31, 2019
Securities borrowed or purchased under agreements to resell (3)
$ 434,257  $ (159,660) $ 274,597  $ (244,486) $ 30,111 
Securities loaned or sold under agreements to repurchase $ 324,769  $ (159,660) $ 165,109  $ (141,482) $ 23,627 
Other (4)
15,346  —  15,346  (15,346) — 
Total $ 340,115  $ (159,660) $ 180,455  $ (156,828) $ 23,627 
(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 $14.7 billion and $12.9 billion reported in loans and leases on the Consolidated Balance Sheet at December 31, 2020 and 2019.
(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, 2020
Securities sold under agreements to repurchase $ 158,400  $ 122,448  $ 32,149  $ 22,684  $ 335,681 
Securities loaned 19,140  271  1,029  2,531  22,971 
Other 16,210  —  —  —  16,210 
Total $ 193,750  $ 122,719  $ 33,178  $ 25,215  $ 374,862 
December 31, 2019
Securities sold under agreements to repurchase $ 129,455  $ 122,685  $ 25,322  $ 21,922  $ 299,384 
Securities loaned 18,766  3,329  1,241  2,049  25,385 
Other 15,346  —  —  —  15,346 
Total $ 163,567  $ 126,014  $ 26,563  $ 23,971  $ 340,115 
(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, 2020
U.S. government and agency securities $ 195,167  $ 5  $ —  $ 195,172 
Corporate securities, trading loans and other 8,633  1,628  1,217  11,478 
Equity securities 14,752  21,125  14,931  50,808 
Non-U.S. sovereign debt 113,142  213  62  113,417 
Mortgage trading loans and ABS 3,987  —  —  3,987 
Total $ 335,681  $ 22,971  $ 16,210  $ 374,862 
December 31, 2019
U.S. government and agency securities $ 173,533  $ 1  $ —  $ 173,534 
Corporate securities, trading loans and other 10,467  2,014  258  12,739 
Equity securities 14,933  20,026  15,024  49,983 
Non-U.S. sovereign debt 96,576  3,344  64  99,984 
Mortgage trading loans and ABS 3,875  —  —  3,875 
Total $ 299,384  $ 25,385  $ 15,346  $ 340,115 
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, 2020 and 2019, the Corporation held restricted cash included within cash and cash equivalents on the Consolidated Balance Sheet of $7.0 billion and $24.4 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.