Bank of America 2009 Annual Report Download - page 36

Balance Sheet Analysis
Table 5 Selected Balance Sheet Data
December 31 Average Balance
(Dollars in millions) 2009 2008 2009 2008
Assets
Federal funds sold and securities borrowed or purchased under agreements to resell $ 189,933 $ 82,478 $ 235,764 $ 128,053
Trading account assets 182,206 134,315 217,048 186,579
Debt securities 311,441 277,589 271,048 250,551
Loans and leases 900,128 931,446 948,805 910,878
All other assets
(1)
639,591 392,115 764,852 367,918
Total assets $2,223,299 $1,817,943 $ 2,437,517 $1,843,979
Liabilities
Deposits $ 991,611 $ 882,997 $ 980,966 $ 831,144
Federal funds purchased and securities loaned or sold under agreements to repurchase 255,185 206,598 369,863 272,981
Trading account liabilities 65,432 51,723 72,207 72,915
Commercial paper and other short-term borrowings 69,524 158,056 118,781 182,729
Long-term debt 438,521 268,292 446,634 231,235
All other liabilities 171,582 73,225 204,421 88,144
Total liabilities 1,991,855 1,640,891 2,192,872 1,679,148
Shareholders’ equity 231,444 177,052 244,645 164,831
Total liabilities and shareholders’ equity $2,223,299 $1,817,943 $ 2,437,517 $1,843,979
(1) All other assets are presented net of allowance for loan and lease losses for the year-end and average balances.
At December 31, 2009, total assets were $2.2 trillion, an increase of
$405.4 billion, or 22 percent, from December 31, 2008. Average total
assets in 2009 increased $593.5 billion, or 32 percent, from 2008. The
increases in year-end and average total assets were primarily attributable
to the acquisition of Merrill Lynch, which impacted virtually all categories,
but particularly federal funds sold and securities borrowed or purchased
under agreements to resell, trading account assets, and debt securities.
Cash and cash equivalents, which are included in all other assets in the
table above, increased due to our strengthened liquidity and capital posi-
tion. Partially offsetting these increases was a decrease in year-end loans
and leases primarily attributable to customer payments, reduced demand
and charge-offs.
At December 31, 2009, total liabilities were $2.0 trillion, an increase
of $351.0 billion, or 21 percent, from December 31, 2008. Average total
liabilities for 2009 increased $513.7 billion, or 31 percent, from 2008.
The increases in year-end and average total liabilities were attributable to
the acquisition of Merrill Lynch which impacted virtually all categories, but
particularly federal funds purchased and securities loaned or sold under
agreements to repurchase, long-term debt and other liabilities. In addition
to the impact of Merrill Lynch, deposits increased as we benefited from
higher savings and movement into more liquid products due to the low
rate environment. Partially offsetting these increases was a decrease in
commercial paper and other short-term borrowings due in part to lower
Federal Home Loan Bank (FHLB) borrowings.
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 and securities purchased under agree-
ments to resell are utilized to accommodate customer transactions, earn
interest rate spreads and obtain securities for settlement. Year-end and
average federal funds sold and securities borrowed or purchased under
agreements to resell increased $107.5 billion and $107.7 billion in
2009, attributable primarily to the acquisition of Merrill Lynch.
Trading Account Assets
Trading account assets consist primarily of fixed income securities
(including government and corporate debt), equity and convertible instru-
ments. Year-end and average trading account assets increased $47.9
billion and $30.5 billion in 2009, attributable primarily to the acquisition
of Merrill Lynch.
Debt Securities
Debt securities include U.S. Treasury and agency securities, MBS, princi-
pally agency MBS, foreign 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 more
economically attractive returns on these investments. The year-end and
average balances of debt securities increased $33.9 billion and $20.5
billion from 2008 due to net purchases of securities and the impact of
the acquisition of Merrill Lynch. For additional information on our AFS debt
securities, see Market Risk Management – Securities beginning on page
96 and Note 5 – Securities to the Consolidated Financial Statements.
Loans and Leases
Year-end loans and leases decreased $31.3 billion to $900.1 billion in
2009 compared to 2008 primarily due to lower commercial loans as the
result of customer payments and reduced demand, lower customer
merger and acquisition activity, and net charge-offs, partially offset by the
addition of Merrill Lynch. Average loans and leases increased $37.9 bil-
lion to $948.8 billion in 2009 compared to 2008 primarily due to the
addition of Merrill Lynch, and the full-year impact of Countrywide. The
average consumer loan portfolio increased $24.4 billion due to the addi-
tion of Merrill Lynch domestic and foreign securities-based lending margin
loans, Merrill Lynch consumer real estate balances, and the full-year
impact of Countrywide, partially offset by lower balance sheet retention,
sales and conversions of residential mortgages into retained MBS and
net charge-offs. The average commercial loan and lease portfolio
increased $13.5 billion primarily due to the acquisition of Merrill Lynch.
For a more detailed discussion of the loan portfolio, see Credit Risk
Management beginning on page 66, and Note 6 – Outstanding Loans and
Leases to the Consolidated Financial Statements.
34 Bank of America 2009