And with that, let me turn it over to Brian.
Brian T. Moynihan
Thank you, Kevin. Before Bruce discusses the results in detail, I just want to take a minute and provide some additional thoughts on the quarter. On our last call, I listed following areas of focus for our company during 2012: We want to focus on our capital levels, we want to focus on our risk, we want to focus on the cost base in the company, and we also need to drive the core business improvement.
In the first quarter of 2012, we have made progress in each of these areas. As you can see, our capital and liquidity are at record levels in our company. Our credit costs continue to decline, and our cost structure is coming down, and many of the business, customer and profit metrics have improved.So first from capital perspective. We entered 2012 with increasing strength in our balance sheet position. We managed through the CCAR test and made significant progress on our regulatory capital ratios again in this quarter. Our Tier 1 common ratio reached 10.78% at the end of -- at March 31, 2012.We continue to make progress on capital at a faster pace than we expected. When we turn to risk, our credit costs fell to the lowest level in nearly 5 years. Reserve levels cover 3.6% of our loans and leases and 2x our current level of annualized credit losses.The improvement in delinquent and nonperforming assets bodes well for further improvement in net losses as we go forward. As you know, we continue to take opportunities to reduce the remaining legacy assets in the capital markets business, and we believe we have the strong litigation and rep and warranty reserves in the mortgage area.On a day-to-day basis, the average value at risk or VaR is lower in our trading business than has been some time. Yet, we managed to make similar levels of sales and trading revenue, excluding DVA as we did last year. The continued cost reduction remains at the forefront of our thinking at Bank of America. We continue to streamline our company. Our priority is to make our company work better for our customers, our teammates and our clients and in the process reduce costs.
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