Bank of America 2010 Annual Report Download - page 6

4
100908
$931,446
$900,128
$940,440
100908
$523,159
$749,851
$643,955
100908
$1,817,943
$2,230,232
$2,264,909
100908
$882,997
$991,611
$1,010,430
Build a fortress balance sheet Maintaining a fortress balance sheet through economic
cycles entails strong liquidity and credit reserve positions, good asset quality, sufficient
capital and a diverse mix of core businesses. We have been improving in all these areas.
Although we held assets relatively flat last year, we significantly reduced risk-weighted assets
while also taking down long-term debt, growing deposits and strengthening global excess
liquidity to more than $336 billion. Most important, we improved tangible common equity
by more than 10 percent to more than $130 billion, and also significantly improved our loan
loss coverage ratios.
A key goal is to strengthen our capital base to meet new regulatory requirements without
having to issue additional shares through the next economic cycle. Basel III rules as currently
proposed will require a common equity Tier 1 ratio of at least 7 percent by 2019, a threshold
we are confident we will exceed.
Pursue operational excellence and manage risk well An important element in our strategy
is achieving operational excellence throughout the organization. This is where the oppor-
tunity to build deeper relationships begins. Getting it right for customers every time is how
we build customer loyalty. With merger transition work largely completed, we now are free
to focus resources on driving operational excellence for our customers by upgrading tech-
nology, increasing training and improving effectiveness and efficiency in all the company’s
core functions.
Operational excellence in risk management is especially important, as we continue to build
on our work to institute new, rigorous risk management controls and procedures through-
out the organization. In combination with the improving economy, this work is contributing
to our improving credit quality results.
Deliver on our shareholder return model Our shareholder return model is not complicated
—
but it requires consistent and disciplined execution. It begins with the fortress balance sheet.
The next steps are achieving reasonable and sustainable revenue growth from our core
consumer businesses in the U.S.; faster growth in our corporate and investment banking and
wealth management businesses in the U.S. and internationally; and tight expense control.
We believe that consistently executing these steps will lead to less volatile earnings per share
growth and steady capital generation. The end result, we believe, will be attractive growth in
tangible book value per share and support for a higher multiple for the stock.
We also believe that the implementation of this model will enable us to put in place a prudent
capital management strategy in the near future that, pending regulatory approvals, includes
a higher dividend and stock repurchases.
Clean up legacy issues related to the economic downturn, primarily in the mortgage
business The recession took a great toll on millions of families. While growth has returned,
we continue to work through issues related to the downturn
— primarily delinquent mortgages.
We are making progress. Bank of America (including Countrywide prior to the acquisition) has
completed nearly 775,000 mortgage modifications since January of 2008 to help customers
remain in their homes.
We reached agreements at the end of last year with Freddie Mac and Fannie Mae to resolve
many of their repurchase claims on mortgages originated by Countrywide before we acquired
Total Loans and Leases
In millions, at year end
Assets Under
Management
In millions, at year end
Total Assets
In millions, at year end
Total Deposits
In millions, at year end
In 2010, approximately 281,000 loan and deposit products
were sold to customers who had an investment relationship
with Merrill Lynch.
Bank of America provided $92 billion in credit to small- and
medium-sized businesses in 2010, exceeding our previously
announced goal by more than 6 percent.