Bank of America Corporation Quarterly report pursuant to Section 13 or 15(d)

Quarterly report pursuant to Section 13 or 15(d)

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

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

6 Months Ended

Jun. 30, 2015

Federal Funds Sold, Securities Borrowed or Purchased Under Agreements to Resell and Short-term Borrowings [Abstract]

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

NOTE 9 – Federal Funds Sold or Purchased, Securities Financing Agreements and Short-term Borrowings

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.



	Three Months Ended June 30									Six Months Ended June 30
	Amount					Rate				Amount					Rate
(Dollars in millions)	2015		2014			2015		2014		2015		2014			2015		2014
Average during period
Federal funds sold and securities borrowed or purchased under agreements to resell	$	214,326	$	235,393		0.50	%	0.51	%	$	214,130	$	224,012		0.47	%	0.51	%

Federal funds purchased and securities loaned or sold under agreements to repurchase	$	219,946	$	222,524		1.03	%	1.10	%	$	217,348	$	213,714		0.97	%	1.07	%
Short-term borrowings	32,142		48,723			1.49		1.26		30,785		48,447			1.48		1.01
Total	$	252,088	$	271,247		1.09		1.13		$	248,133	$	262,161		1.03		1.06

Maximum month-end balance during period
Federal funds sold and securities borrowed or purchased under agreements to resell	$	224,701	$	240,122						$	226,502	$	240,122

Federal funds purchased and securities loaned or sold under agreements to repurchase	$	227,753	$	240,154						$	227,753	$	240,154
Short-term borrowings	39,903		50,071							39,903		51,409

	June 30, 2015									December 31, 2014
	Amount		Rate							Amount		Rate
Period-end
Federal funds sold and securities borrowed or purchased under agreements to resell	$	199,903	0.51		%					$	191,823	0.47		%

Federal funds purchased and securities loaned or sold under agreements to repurchase	$	213,024	0.92		%					$	201,277	0.98		%
Short-term borrowings	39,903		1.18							31,172		1.47
Total	$	252,927	0.95							$	232,449	1.04

Offsetting of Securities Financing Agreements

Substantially all of the Corporation's repurchase and resale activities are transacted under legally enforceable master repurchase 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 repurchase and resale 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.

Substantially all securities borrowing and lending activities are transacted under 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 borrowing and lending 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 June 30, 2015 and December 31, 2014. 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 2 – Derivatives.

The "Other" amount in the table, which is included on the Consolidated Balance Sheet in accrued expenses and other liabilities, relates to transactions where the Corporation acts as the lender in a securities lending agreement and receives securities that can be pledged or sold as collateral. 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.

Gross assets and liabilities in the table include activity where uncertainty exists as to the enforceability of certain master netting agreements under bankruptcy laws in some countries or industries and, accordingly, these are reported on a gross basis.

The column titled "Financial Instruments" in the table 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 the net balance sheet amount in this table to derive a net asset or liability. Securities collateral received or pledged where the legal enforceability of the master netting agreements is not certain is not included.



Securities Financing Agreements
	June 30, 2015
(Dollars in millions)	Gross Assets/Liabilities		Amounts Offset			Net Balance Sheet Amount		Financial Instruments			Net Assets/Liabilities
Securities borrowed or purchased under agreements to resell ⁽¹⁾	$	337,193	$	(137,290	)	$	199,903	$	(152,072	)	$	47,831

Securities loaned or sold under agreements to repurchase	$	350,306	$	(137,290	)	$	213,016	$	(173,851	)	$	39,165
Other	12,723		—			12,723		(12,723		)	—
Total	$	363,029	$	(137,290	)	$	225,739	$	(186,574	)	$	39,165

	December 31, 2014
Securities borrowed or purchased under agreements to resell ⁽¹⁾	$	316,567	$	(124,744	)	$	191,823	$	(145,573	)	$	46,250

Securities loaned or sold under agreements to repurchase	$	326,007	$	(124,744	)	$	201,263	$	(164,306	)	$	36,957
Other	11,641		—			11,641		(11,641		)	—
Total	$	337,648	$	(124,744	)	$	212,904	$	(175,947	)	$	36,957


⁽¹⁾	Excludes repurchase activity of $9.6 billion and $5.6 billion reported in loans and leases on the Consolidated Balance Sheet at June 30, 2015 and December 31, 2014.

Repurchase Agreements and Securities Loaned Transactions Accounted for as Secured Borrowings

The tables below present securities sold under agreements to repurchase and securities loaned by remaining contractual term to maturity and class of collateral pledged. Also included in "Other" are transactions where the Corporation acts as the lender in a securities lending agreement and receives securities that can be pledged or sold as collateral. 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. At June 30, 2015, the Corporation had no outstanding repurchase-to-maturity transactions.



Remaining Contractual Maturity
	June 30, 2015
(Dollars in millions)	Overnight and Continuous		30 Days or Less		After 30 Days Through 90 Days		After 90 Days through 1 Year		After 1 Year ⁽¹⁾		Total
Securities sold under agreements to repurchase	$	147,401	$	86,117	$	50,447	$	25,439	$	500	$	309,904
Securities loaned	34,615		1,161		2,205		2,229		192		40,402
Other	12,723		—		—		—		—		12,723
Total	$	194,739	$	87,278	$	52,652	$	27,668	$	692	$	363,029


⁽¹⁾	No agreements have maturities greater than three years.



Class of Collateral Pledged ⁽¹⁾
(Dollars in millions)	June 30 2015
U.S. government and agency securities	$	148,102
Corporate securities, trading loans and other	13,684
Equity securities	65,018
Non-U.S. sovereign debt	122,694
Mortgage trading loans and ABS	13,531
Total	$	363,029


⁽¹⁾	Amounts represent the carrying value of securities sold under agreements to repurchase and securities loaned by each class of collateral pledged.

The Corporation is required to post collateral with a market value equal to or in excess of the principal amount borrowed under repurchase agreements. For securities loaned transactions, the Corporation receives collateral in the form of cash, letters of credit or other securities. To ensure that 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.