Goldman Sachs 2015 Annual Report Download - page 84

THE GOLDMAN SACHS GROUP, INC. AND SUBSIDIARIES
Management’s Discussion and Analysis
A majority of our secured funding for securities not eligible
for inclusion in the GCLA is executed through term
repurchase agreements and securities loaned contracts. We
also raise financing through other types of collateralized
financings, such as secured loans and notes. GS Bank USA
has access to funding from the Federal Home Loan Bank
(FHLB). As of December 2015, our outstanding
borrowings against the FHLB were $2.92 billion.
GS Bank USA also has access to funding through the
Federal Reserve Bank discount window. While we do not
rely on this funding in our liquidity planning and stress
testing, we maintain policies and procedures necessary to
access this funding and test discount window borrowing
procedures.
Unsecured Long-Term Borrowings. We issue unsecured
long-term borrowings as a source of funding for inventory
and other assets and to finance a portion of our GCLA. We
issue in different tenors, currencies and products to
maximize the diversification of our investor base.
The table below presents our quarterly unsecured long-term
borrowings maturity profile as of December 2015.
Unsecured Long-Term Borrowings Maturity Profile
$ in millions
First
Quarter
Second
Quarter
Third
Quarter
Fourth
Quarter Total
2017 $12,618 $3,403 $7,305 $2,036 $ 25,362
2018 8,114 8,258 5,243 3,516 25,131
2019 6,318 663 2,243 6,811 16,035
2020 4,290 7,368 5,455 842 17,955
2021 - thereafter 90,939
Total $175,422
The weighted average maturity of our unsecured long-term
borrowings as of December 2015 was approximately nine
years. To mitigate refinancing risk, we seek to limit the
principal amount of debt maturing on any one day or
during any week or year. We enter into interest rate swaps
to convert a majority of the amount of our unsecured long-
term borrowings into floating-rate obligations in order to
manage our exposure to interest rates. See Note 16 to the
consolidated financial statements for further information
about our unsecured long-term borrowings.
Deposits. We raise deposits mainly through GS Bank USA
and Goldman Sachs International Bank (GSIB). The tables
below present the types and sources of our deposits.
As of December 2015
$ in millions
Savings and
Demand 1Time 2Total
Private bank deposits 3$38,715 $ 2,354 $41,069
Certificates of deposit — 34,375 34,375
Deposit sweep programs 415,791 — 15,791
Institutional 1 6,283 6,284
Total 5$54,507 $43,012 $97,519
As of December 2014
$ in millions
Savings and
Demand 1Time 2Total
Private bank deposits 3$33,590 $ 1,609 $35,199
Certificates of deposit — 25,780 25,780
Deposit sweep programs 415,691 — 15,691
Institutional 12 6,198 6,210
Total 5$49,293 $33,587 $82,880
1. Represents deposits with no stated maturity.
2. Weighted average maturity of approximately three years as of both
December 2015 and December 2014.
3. Substantially all were from overnight deposit sweep programs related to
private wealth management clients.
4. Represents long-term contractual agreements with several U.S. broker-
dealers who sweep client cash to FDIC-insured deposits.
5. Deposits insured by the FDIC as of December 2015 and December 2014
were approximately $55.48 billion and $45.72 billion, respectively.
In August 2015, GS Bank USA entered into an agreement,
subject to regulatory approval, to acquire GE Capital
Bank’s online deposit platform and to assume
approximately $16 billion of deposits, consisting of
approximately $8 billion in online deposit accounts and
approximately $8 billion in brokered certificates of deposit.
Unsecured Short-Term Borrowings. A significant
portion of our unsecured short-term borrowings was
originally long-term debt that is scheduled to mature within
one year of the reporting date. We use unsecured short-term
borrowings to finance liquid assets and for other cash
management purposes. We issue hybrid financial
instruments, commercial paper and promissory notes. In
light of regulatory developments, since the third quarter of
2015, Group Inc. has not issued debt with an original
maturity of less than one year and currently does not expect
to issue short-term debt in the future.
As of December 2015 and December 2014, our unsecured
short-term borrowings, including the current portion of
unsecured long-term borrowings, were $42.79 billion and
$44.54 billion, respectively. See Note 15 to the
consolidated financial statements for further information
about our unsecured short-term borrowings.
72 Goldman Sachs 2015 Form 10-K