Bank of America 2014 Annual Report Download - page 208

206 Bank of America 2014
NOTE 10 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.
2014 2013 2012
(Dollars in millions) Amount Rate Amount Rate Amount Rate
Federal funds sold
At December 31 $——% $ — —% $ 600 0.54%
Average during year 30.90 7 0.69 351 0.43
Maximum month-end balance during year 12 n/a 35 n/a 600 n/a
Securities borrowed or purchased under agreements to resell
At December 31 191,823 0.47 190,328 0.60 219,324 0.92
Average during year 222,480 0.47 224,324 0.55 235,691 0.64
Maximum month-end balance during year 240,110 n/a 249,791 n/a 252,985 n/a
Federal funds purchased
At December 31 14 — 186 — 1,151 0.17
Average during year 147 0.05 191 0.06 384 0.11
Maximum month-end balance during year 213 n/a 195 n/a 1,211 n/a
Securities loaned or sold under agreements to repurchase
At December 31 201,263 0.98 197,920 0.92 292,108 1.11
Average during year 215,645 0.99 257,409 0.81 281,516 0.98
Maximum month-end balance during year 239,984 n/a 319,608 n/a 319,401 n/a
Short-term borrowings
At December 31 31,172 1.47 45,999 1.55 30,731 3.08
Average during year 41,886 1.08 43,816 1.89 36,500 2.22
Maximum month-end balance during year 51,409 n/a 48,387 n/a 40,129 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 $14.6 billion and $15.1 billion at
December 31, 2014 and 2013. These short-term bank notes,
along with Federal Home Loan Bank (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
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
December 31, 2014 and 2013. 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.