Bank of America 2015 Annual Report Download - page 4

None of these accomplishments would have been possible
without a strong financial foundation. We ended 
with record liquidity of more than half-a-trillion dollars.
What does that mean? In a time of financial stress, we
could fund our company for more than three years without
tapping the markets.
We also have strong capital. At the end of , our common
equity tier  ratio, on a Basel  fully phased-in basis, was
. percent, meaning we are well on our way to meeting the
 percent requirement that goes into effect in . Part
of that requirement is a buffer, enacted this year, that is
equivalent to holding $ billion of our $ billion in capital
to ensure we make it through any downturn. That is a strong
insurance policy.
In the meantime, we continue to improve the qualitative and
quantitative measures the Federal Reserve evaluates during its
annual stress test, which determines the pace at which we can
continue increasing the return of capital to shareholders.
Another focus has been on managing expenses, which were
down $ billion in , mostly due to lower litigation costs
and lower operating costs in Legacy Assets and Servicing
(LAS). Even excluding those items, our core expenses keep
coming down due to our efficiency efforts.
At the same time, we have been steadily investing in
technology, expanding our sales force and making other
infrastructure improvements that are helping us better
serve our clients and grow our business.
Responsible Growth
When we look at where we stand today, our company is
stronger, simpler, and better positioned to deliver long-term
value to our shareholders, thanks to the straightforward way
in which we serve our customers and clients. The path forward
is clearly one of responsible growth.
Responsible growth has four pillars:
• We must grow and win in the market — no excuses.
• We must grow with our customer-focused strategy. We aren’t
going to grow by buying assets where we do not have an
underlying relationship with the customer, such as mortgages
originated by another company. Our growth will come through
knowing our customers and clients, and being able to do
more for them.
• We must grow within our Risk Framework. This is the
foundation of everything we do.
• We must grow in a sustainable manner. This means having
the right business model, which sustains investments in
growth and innovation while producing good, consistent
returns. Sustainable also means having rigorous governance
practices, and making decisions that are right for the customer,
strengthen the brand and treat our employees well.
Our Risk Framework
sets clear roles,
responsibilities and
accountability for how
we manage risk and
provides a blueprint for
how the Board, through
delegation of authority
to committees and
executive officers,
establishes the risk
appetite and associated
limits for our activities.
In , we increased
our tangible common
equity to a record
$ billion. This is more
than double what we had
before the financial crisis
and shows how much
stronger we are now.
Excess capital that
we cannot return to
shareholders remains
on our balance sheet
for our investors and is
reflected in book value.
2