Bank of America 2002 Annual Report Download - page 41

BANK OF AMERICA 2002 39
TABLE 6 Average Deposits
(Dollars in millions) 2002 2001
Deposits by type
Domestic interest-bearing:
Savings $ 21,691 $ 20,208
NOW and money market accounts 131,841 114,657
Consumer CDs & IRAs 67,695 74,458
Negotiable CDs & other time deposits 4,237 5,848
Total domestic interest-bearing 225,464 215,171
Foreign interest-bearing:
Banks located in foreign countries 15,464 23,397
Governments & official institutions 2,316 3,615
Time, savings & other 18,769 22,940
Total foreign interest-bearing 36,549 49,952
Total interest-bearing 262,013 265,123
Noninterest-bearing 109,466 97,529
Total deposits $ 371,479 $ 362,652
Core and market-based deposits
Core deposits $ 330,693 $ 306,852
Market-based deposits 40,786 55,800
Total deposits $ 371,479 $ 362,652
Additional sources of funds include short-term borrowings, long-term
debt and shareholders’ equity. Short-term borrowings, a relatively
low-cost source of funds, were up as proceeds from repurchase
agreements were used to fund asset growth. Long-term debt of $9.4
billion was issued during the year. Repayments of long-term debt
were $14.5 billion in 2002.
Obligations and Commitments
The Corporation has contractual obligations to make future payments on
debt and lease agreements. These types of obligations are more fully dis-
cussed in Notes 11, 12 and 13 of the consolidated financial statements.
Table 7 presents total debt and lease obligations at Decem-
ber 31, 2002.
TABLE 7 Debt and Lease Obligations
December 31, 2002
Due in
1 Year
(Dollars in millions) or Less Thereafter Total
Debt and capital leases(1) $ 8,219 $ 52,926 $ 61,145
Trust preferred securities(1) – 6,031 6,031
Operating lease obligations 1,166 6,212 7,378
Total $ 9,385 $ 65,169 $ 74,554
(1) Includes principal payments only.
Many of our lending relationships contain both funded and unfunded
elements. The funded portion is represented by the average balance
sheet levels. The unfunded component of these commitments is not
recorded on our balance sheet until a draw is made under the loan
facility. Loan commitments declined as a reduction in commercial com-
mitments of $13.2 billion was partially offset by a $4.4 billion increase
in consumer commitments.
These commitments, as well as guarantees, are more fully dis-
cussed in Note 13 of the consolidated financial statements.
The following table summarizes the total unfunded, or off-bal-
ance sheet, credit extension commitment amounts by expiration date.
TABLE 8 Credit Extension Commitments
December 31, 2002
Expires in
1 Year
(Dollars in millions) or Less Thereafter Total
Loan commitments(1) $ 98,101 $ 114,603 $ 212,704
Standby letters of credit
and financial guarantees 20,002 10,835 30,837
Commercial letters of credit 2,674 435 3,109
Legally binding
commitments 120,777 125,873 246,650
Credit card lines 73,779 – 73,779
Total $ 194,556 $ 125,873 $320,429
(1) Equity commitments of $2.2 billion and $2.5 billion primarily related to obligations
to fund existing venture capital equity investments were included in loan commit-
ments at December 31, 2002 and 2001, respectively.
Off-Balance Sheet Financing Entities
In addition to traditional lending, we also support our customers’
financing needs by facilitating their access to the commercial paper
markets. These markets provide an attractive, lower-cost financing
alternative for our customers. Our customers sell assets, such as
high-grade trade or other receivables or leases, to a commercial
paper financing entity, which in turn issues high-grade short-term
commercial paper that is collateralized by the assets sold.
Additionally, some customers receive the benefit of commercial
paper financing rates related to certain lease arrangements. We facil-
itate these transactions and collect fees from the financing entity for
the services it provides (including administration, trust services and
marketing the commercial paper).
We receive fees for providing combinations of liquidity, standby
letters of credit (SBLCs) or similar loss protection commitments, and
derivatives to the commercial paper financing entities. These forms of
asset support are senior to the first layer of asset support provided by
customers through over-collateralization. The rating agencies
require that a certain percentage of the commercial paper entity’s
assets be supported by both the seller’s over-collateralization and
our SBLC in order to receive their respective investment rating. The
SBLC would be drawn on only when the over-collateralization pro-
vided by the seller is not sufficient to cover losses of the related
asset. Liquidity commitments made to the commercial paper entity are
designed to fund scheduled redemptions of commercial paper if there
is a market disruption or the new commercial paper cannot be issued
to fund the redemption of the maturing commercial paper. The liquid-
ity facility has the same legal priority as the commercial paper. We do
not enter into any other form of guarantee with these entities.