Bank of America 2015 Annual Report Download - page 56

54 Bank of America 2015
Table 13 Bank of America Corporation Regulatory Capital under Basel 3 (1)
December 31, 2015
Transition Fully Phased-in
(Dollars in millions)
Standardized
Approach
Advanced
Approaches
Regulatory
Minimum
Well-
capitalized (2)
Standardized
Approach
Advanced
Approaches (3)
Regulatory
Minimum (4)
Risk-based capital metrics:
Common equity tier 1 capital $ 163,026 $ 163,026 $ 154,084 $ 154,084
Tier 1 capital 180,778 180,778 175,814 175,814
Total capital (5) 220,676 210,912 211,167 201,403
Risk-weighted assets (in billions) 1,403 1,602 1,427 1,575
Common equity tier 1 capital ratio 11.6% 10.2% 4.5% n/a 10.8% 9.8% 10.0%
Tier 1 capital ratio 12.9 11.3 6.0 6.0% 12.3 11.2 11.5
Total capital ratio 15.7 13.2 8.0 10.0 14.8 12.8 13.5
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (6) $ 2,103 $ 2,103 $ 2,102 $ 2,102
Tier 1 leverage ratio 8.6% 8.6% 4.0 n/a 8.4% 8.4% 4.0
SLR leverage exposure (in billions) $ 2,728 $ 2,728 $ 2,727 $ 2,727
SLR 6.6% 6.6% 5.0 n/a 6.4% 6.4% 5.0
December 31, 2014
Risk-based capital metrics:
Common equity tier 1 capital $ 155,361 n/a $ 141,217 $ 141,217
Tier 1 capital 168,973 n/a 160,480 160,480
Total capital (5) 208,670 n/a 196,115 185,986
Risk-weighted assets (in billions) (7) 1,262 n/a 1,415 1,465
Common equity tier 1 capital ratio 12.3% n/a 4.0% n/a 10.0% 9.6% 10.0%
Tier 1 capital ratio 13.4 n/a 5.5 6.0% 11.3 11.0 11.5
Total capital ratio 16.5 n/a 8.0 10.0 13.9 12.7 13.5
Leverage-based metrics:
Adjusted quarterly average assets (in billions) (6) $ 2,060 $ 2,060 $ 2,057 $ 2,057
Tier 1 leverage ratio 8.2% 8.2% 4.0 n/a 7.8% 7.8% 4.0
SLR leverage exposure (in billions) $ 2,732 $ 2,732 $ 2,728 $ 2,728
SLR 6.2% 6.2% 5.0 n/a 5.9% 5.9% 5.0
(1) We received approval to begin using the Advanced approaches capital framework to determine risk-based capital requirements in the fourth quarter of 2015. With the approval to exit parallel run,
we are required to report regulatory capital risk-weighted assets and ratios under both the Standardized and Advanced approaches. The approach that yields the lower ratio is to be used to assess
capital adequacy and was the Advanced approaches at December 31, 2015. Prior to exiting parallel run, we were required to report regulatory capital risk-weighted assets and ratios under the
Standardized approach only. As previously disclosed, with the approval to exit parallel run, U.S. banking regulators requested modifications to certain internal analytical models including the wholesale
(e.g., commercial) credit models which increased our risk-weighted assets in the fourth quarter of 2015.
(2) To be “well capitalized” under the current U.S. banking regulatory agency definitions, a bank holding company must maintain these or higher ratios and not be subject to a Federal Reserve order or
directive to maintain higher capital levels.
(3) Basel 3 fully phased-in Advanced approaches estimates assume approval by U.S. banking regulators of our internal analytical models, including approval of the internal models methodology (IMM).
As of December 31, 2015, we had not received IMM approval.
(4) Fully phased-in regulatory minimums assume a capital conservation buffer of 2.5 percent and estimated G-SIB surcharge of 3.0 percent. The estimated fully phased-in countercyclical capital buffer
is zero. We will be subject to fully phased-in regulatory minimums on January 1, 2019.
(5) Total capital under the Advanced approaches differs from the Standardized approach due to differences in the amount permitted in Tier 2 capital related to the qualifying allowance for credit losses.
(6) Reflects adjusted average total assets for the three months ended December 31, 2015 and 2014.
(7) On a pro-forma basis, under Basel 3 Standardized – Transition as measured at January 1, 2015, the December 31, 2014 risk-weighted assets would have been $1,392 billion.
n/a = not applicable
Common equity tier 1 capital under Basel 3 Advanced –
Transition was $163.0 billion at December 31, 2015, an increase
of $7.7 billion compared to December 31, 2014 driven by
earnings, partially offset by dividends, common stock repurchases
and the impact of certain transition provisions under Basel 3 rules.
For more information on Basel 3 transition provisions, see Table
12. During 2015, Total capital increased $2.2 billion primarily
driven by the same factors that drove the increase in Common
equity tier 1 capital as well as issuances of preferred stock and
subordinated debt, partially offset by lower eligible credit reserves
included in additional Tier 2 capital. The decrease in eligible credit
reserves included in additional Tier 2 capital is due to the change
in the calculation of eligible credit reserves under the Advanced
approaches. The Corporation began using the Advanced
approaches capital framework to determine risk-based capital
requirements in the fourth quarter of 2015. For additional
information, see Table 14.
Risk-weighted assets increased $341 billion during 2015 to
$1,602 billion primarily due to the change in the calculation of
risk-weighted assets from the general risk-based approach at
December 31, 2014 to the Basel 3 Advanced approaches.