Bank of America 2002 Annual Report Download - page 87

BANK OF AMERICA 2002 85
At December 31, 2002, net unrealized gains on available-for-sale debt
securities and marketable equity securities included in shareholders’
equity were $494 million, net of the related income tax expense of
$266 million. At December 31, 2001, net unrealized losses on these
securities were $480 million, net of the related income tax benefit of
$311 million.
Excluding securities issued by the U.S. government and its
agencies and corporations, there were no investments in securities
from one issuer that exceeded 10 percent of consolidated share-
holders’ equity at December 31, 2002 or 2001.
Securities are pledged or assigned to secure borrowed funds,
government and trust deposits and for other purposes. The carrying
value of pledged securities was $32.9 billion and $37.4 billion at
December 31, 2002 and 2001, respectively.
The expected maturity distribution and yields of the Corporation’s securities portfolio at December 31, 2002 are summarized below. Actual
maturities may differ from the contractual or expected maturities shown below since borrowers may have the right to prepay obligations with or
without prepayment penalties.
Due After 1Due After 5
Due in 1 Year Year Through Years Through Due After
or Less 5 Years 10 Years 10 Years Total
(Dollars in millions) Amount Yield Amount Yield Amount Yield Amount Yield Amount Yield
Fair value of available-for-sale
debt securities
U.S. Treasury securities and
agency debentures $ 85 2.77% $ 551 3.40% $ 53 4.61% $ 22 5.66% $ 711 3.49%
Mortgage-backed securities 4 6.41 27,394 5.37 30,536 5.83 1,721 6.12 59,655 5.63
Foreign sovereign securities 680 2.63 430 8.57 – – 1,052 5.01 2,162 4.97
Other taxable securities 188 3.42 803 5.50 89 7.18 1,598 5.95 2,678 5.68
Total taxable 957 2.81 29,178 5.38 30,678 5.83 4,393 5.79 65,206 5.59
Tax-exempt securities(1) 6 7.32 20 6.89 1,059 6.31 1,831 6.85 2,916 6.66
Total $ 963 2.84% $29,198 5.38% $31,737 5.85% $ 6,224 6.10% $68,122 5.63%
Amortized cost of available-
for-sale debt securities $ 976 $28,788 $31,340 $ 6,150 $67,254
Amortized cost of held-to-
maturity debt securities
Mortgage-backed securities $ – –% $ 3 1.87% $ – –% $ – –% $ 3 2.42%
Foreign sovereign securities 6 2.54 14 3.47 9 2.40 759 7.12 788 6.96
Other taxable securities – – – – – – 45 3.68 45 3.69
Total taxable 6 2.54 17 3.19 9 2.40 804 6.93 836 6.77
Tax-exempt securities(1) 30 11.13 71 9.41 49 8.10 40 6.12 190 8.66
Total $ 36 9.60% $ 88 8.21% $ 58 7.18% $ 844 6.89% $ 1,026 7.12%
Fair value of held-to-
maturity debt securities $ 37 $ 93 $ 61 $ 810 $ 1,001
(1) Yield of tax-exempt securities calculated on a taxable-equivalent basis.
The components of gains and losses on sales of securities for the
years ended December 31, 2002, 2001 and 2000 were:
(Dollars in millions) 2002 2001 2000
Gross gains $ 1,035 $ 1,074 $ 123
Gross losses 405 599 98
Net gains on sales of securities $630 $ 475 $ 25
The income tax expense attributable to realized net gains on securities
sales was $220 million, $166 million and $9 million in 2002, 2001 and
2000, respectively.
NOTE 4 Trading Activities
Trading-Related Revenue
Trading account profits represent the net amount earned from the
Corporation’s trading positions, which include trading account assets
and liabilities as well as derivative positions and mortgage banking
certificates. Trading account profits, as reported in the Consolidated
Statement of Income, does not include the net interest income recog-
nized on trading positions or the related funding charge or benefit.