Bank of America 2015 Annual Report Download - page 27

Bank of America 2015 25
Balance Sheet Overview
Table 7 Selected Balance Sheet Data
December 31
(Dollars in millions) 2015 2014 % Change
Assets
Cash and cash equivalents $ 159,353 $138,589 15%
Federal funds sold and securities borrowed or purchased under agreements to resell 192,482 191,823 —
Trading account assets 176,527 191,785 (8)
Debt securities 407,005 380,461 7
Loans and leases 903,001 881,391 2
Allowance for loan and lease losses (12,234) (14,419) (15)
All other assets 318,182 334,904 (5)
Total assets $ 2,144,316 $ 2,104,534 2
Liabilities
Deposits $ 1,197,259 $ 1,118,936 7
Federal funds purchased and securities loaned or sold under agreements to repurchase 174,291 201,277 (13)
Trading account liabilities 66,963 74,192 (10)
Short-term borrowings 28,098 31,172 (10)
Long-term debt 236,764 243,139 (3)
All other liabilities 184,736 192,347 (4)
Total liabilities 1,888,111 1,861,063 1
Shareholders’ equity 256,205 243,471 5
Total liabilities and shareholders’ equity $ 2,144,316 $ 2,104,534 2
Assets
At December 31, 2015, total assets were approximately $2.1
trillion, up $39.8 billion from December 31, 2014. The increase
in assets was primarily driven by an increase in debt securities
due to the deployment of deposit inflows, an increase in loans and
leases driven by strong demand for commercial loans outpacing
consumer loan sales and run-off, and higher cash and cash
equivalents from strong deposit inflows. These increases were
partially offset by a decrease in trading account assets due to
repositioning activity on the balance sheet, and a decrease in all
other assets.
The Corporation took certain actions in 2015 to further
strengthen liquidity in response to the Basel 3 Liquidity Coverage
Ratio (LCR) requirements. Most notably, we exchanged residential
mortgage loans supported by long-term standby agreements with
Fannie Mae (FNMA) and Freddie Mac (FHLMC) into debt securities
guaranteed by FNMA and FHLMC, which further improved liquidity
in the asset and liability management (ALM) portfolio.
Cash and Cash Equivalents
Cash and cash equivalents increased $20.8 billion primarily due
to strong deposit inflows driven by growth in customer and client
activity, partially offset by commercial loan growth.
Federal Funds Sold and Securities Borrowed or
Purchased Under Agreements to Resell
Federal funds transactions involve lending reserve balances on a
short-term basis. Securities borrowed or purchased under
agreements to resell are collateralized lending transactions
utilized to accommodate customer transactions, earn interest rate
spreads, and obtain securities for settlement and for collateral.
Federal funds sold and securities borrowed or purchased under
agreements to resell remained relatively unchanged compared to
December 31, 2014, as an increase in securities borrowed of $3.3
billion was offset by a decrease in reverse repurchase agreements
of $2.6 billion.
Trading Account Assets
Trading account assets consist primarily of long positions in equity
and fixed-income securities including U.S. government and agency
securities, corporate securities and non-U.S. sovereign debt.
Trading account assets decreased $15.3 billion primarily due to
balance sheet repositioning activity driven by client demand within
Global Markets.
Debt Securities
Debt securities primarily include U.S. Treasury and agency
securities, mortgage-backed securities (MBS), principally agency
MBS, non-U.S. bonds, corporate bonds and municipal debt. We
use the debt securities portfolio primarily to manage interest rate
and liquidity risk and to take advantage of market conditions that
create economically attractive returns on these investments. Debt
securities increased $26.5 billion primarily driven by the
deployment of deposit inflows and the exchange of certain loans
into debt securities. For more information on debt securities, see
Note 3 – Securities to the Consolidated Financial Statements.
Loans and Leases
Loans and leases increased $21.6 billion driven by strong demand
for commercial loans, outpacing consumer loan sales and run-off.
For more information on the loan portfolio, see Credit Risk
Management on page 63.
Allowance for Loan and Lease Losses
Allowance for loan and lease losses decreased $2.2 billion
primarily due to the impact of improvements in credit quality from
the improving economy. For additional information, see Allowance
for Credit Losses on page 86.