A “fortress balance sheet” of a bank or a company is one that shows sufficient capital to withstand a downturn in business conditions (or “attacks on the fortress”). The term “fortress balance sheet” has been cited in print since at least 1987 and was popularly used by J.P. Morgan Chase’s Jamie Dimon to describe his firm’s balance sheet during the financial crisis of 1987-88.
 
One person’s financial opinion (especially a company executive’s stated opinion) of a “fortress balance sheet” can differ with another person’s opinion. A seemingly impenetrable financial “fortress” can be quickly destroyed. In 2002 (see the citation below), it was said that “‘A.I.G. has a fortress balance sheet.‘When it comes time to a claim in five or 10 years, A.I.G. will be there. A lot of other companies may not.’‘
 
 
New York (NY) Times
Market Place; Regional Bank Issues Favored
By Phillip H. Wiggins
Published: August 25, 1987
(...)
Kathleen Smythe de Urquieta of Montgomery Securities’ financial services group in San Francisco said she favored smaller California regional banks in general because they are ‘‘well positioned to survive the ongoing industry transition where there currently is a lot of consolidation.’‘
 
Ms. Smythe’s firm has a thesis it refers to as Darwinian banking. ‘‘It basically says that those banks, either large or small, with fortress balance sheets and income statements that are extremely well disciplined in the areas of cost control, losses and acquisitions, and in addition have some form of throughput - or ability to originate loans - are those that will survive,’’ Ms. Smythe said. ‘‘Many regionals fit this definition and in addition have no exposure to foreign loans.’‘
   
19 February 1988, Cleveland (OH) Plain Dealer, pg. 11B, col. 1:
Some question banks’ revised credit ratings
Third World loans blamed for downgrading of debt
REUTERS
NEW YORK—Banking analysts yesterday were puzzled by Moody’s Investors Service’s surprising decision to downgrade J. P. Morgan & Co.‘s long-term debt, and some flatly disagreed with it.
 
“It makes no sense. Everything Morgan does is Aaa. I think Moody’s made a mistake,” said Richard Fredericks, an analyst with Montgomery Securities.
 
“The action doesn’t entirely make sense,” concurred RobertAlbertson, an analyst with Goldman Sachs. “The holding company has a fortress balance sheet in terms of capital and capital ratios.”
 
New York (NY) Times
Japan’s Banks: Top 10 in Deposits
By NATHANIEL C. NASH, Special to the New York Times
Published: July 20, 1988
(...)
Though Mr. Simmons agreed that profitability is a more important indicator of bank health than size, he said: ‘‘It is not totally the case. A lot of people think that a fortress balance sheet, reflecting essentially no risk because of a broad stable deposit base, is equally important.’‘
 
7 December 1989, Mobile (AL) Register, “Recession starting, economist says here” by Adline Clarke (Press Register Business Editor), pg. 35A, col. 4:
He urged businessmen to build a “fortress balance sheet” and “I urge people to be cautious in terms of their borrowing. If we are correct in this recession, the good news is that interest rates will come down precipitously.”

Google Books
Overdrawn:
The Bailout of American Savings
By Michael A. Robinson
New York, NY: Dutton
1990
Pg. 11:
...member, had a fortress balance sheet.
   
New York (NY) Times
In Search of a Good Borrower
By N. R. KLEINFIELD
Published: May 19, 1991
(...)
Get rid of the money. That is usually what bankers do. Theodore H. Silbert, at 86 perhaps the country’s oldest active banker, knows that. Bankers are supposed to loan money. But Ted Silbert is rattled easily. Which is why for quite a few years the bank he runs has clung furiously to so many of its dollars.
 
Mr. Silbert is the chairman of Sterling Bancorp, which has as its principal business the Sterling National Bank & Trust Company of New York, one of the city’s tiniest and more mysterious banks. In these parlous days for the banking business, it also appears to be one of the steadiest. It likes to call attention to its “fortress” balance sheet, constructed on being wary of giving anybody money.
   
Google Books
Beating the Street
By Peter Lynch with John Rothchild
New York, NY: FiresideBooks
1993
Pg. 209:
“We have a very boring story,” said the CEO, Martin Kleppe, when I reached him by phone. This was just the kind of story he must have known I liked. “We also have a fortress balance sheet. When we get in trouble, other guys are walking the plank.”
 
Google Books
The Bankers:
the next generation
By Martin Mayer
New York, NY: Truman Talley Books
1997
Pg. 257:
First Chicago merged with National Bank of Detroit, which had a fortress balance sheet, which First Chicago did not (in the first quarter of the merger, the combined bank took a $210 million loan loss reserve).
 
16 April 2002, Chicago (IL) Tribune, Metro, pg. 1:
Bank One builds ‘fortress balance sheet’
By Steve Rynkiewicz, Tribune staff reporter
 
New York (NY) Times
Insurer’s Chief Sees No Relief On Premiums For Businesses
By JOSEPH B. TREASTER
Published: July 26, 2002
(...)
‘A.I.G. has a fortress balance sheet,’’ said Eric J. Holmes, an analyst at Victory Capital Management in Cleveland, which owns seven million shares of the insurance company. ‘‘When it comes time to a claim in five or 10 years, A.I.G. will be there. A lot of other companies may not.’‘
 
Google Books
Bull!:
A History of the Boom and Bust, 1982-2004
By Maggie Mahar  
New York, NY: HarperBusiness
2004      
Pg. 433:
Many of them have come out and said we have no problem with Enron, but they would like to sort of create a fortress balance sheet, completely eliminate this perception of weakness and, as well, perhaps bring in a well-known equity investor to also sort of add another stamp of approval.
       
Seeking Alpha
RadiSys: “Dramatically Undervalued” “Fortress Balance Sheet”—Nierenberg
by: Lon Juricic October 31, 2006  
(...)
Quoting from their amended 13D, filed November 9, 2005, which they said remains true, the firm said:

“RSYS is a dramatically undervalued growth company which possesses a fortress balance sheet, an impressive board of directors, a strong management team, and a business model which generates a stunning amount of positive cash flow.”
 
Google Finance: Microsoft Corporation
From: riskybusiness

Date: Wed, 18 Jul 2007 18:43:03 -0700
Local: Wed, Jul 18 2007 8:43 pm
Subject: Re: Buy before Earnings Suprise

The quality of MSFT is about the “fortress balance sheet” and “cash cow” revenue flow.
     
Forbes.com
Dimon’s Banking Magic
Liz Moyer, 10.17.07, 3:30 PM ET
(...)
Dimon has been a proponent of what he calls the “fortress balance sheet,” loath to go too far out on a limb in risk-taking but conscious of building out businesses in which most of the money on Wall Street has been made in the last year: derivatives, lending, alternative investments and trading.
 
Google Books
Fool’s Gold:
How the Bold Dream of a Small Tribe at J.P. Morgan Was Corrupted by Wall Street Greed and Unleashed a Catastrophe
By Gillian Tett
New York, NY: Free Press
2009
Pg. 112:
He was no fan of leaving the task to a dedicated risk department. one of his favorite phrases was “fortress balance sheet,” shorthand for the idea that a bank should always maintain a large reserve of spare capital in order to cope with unforeseen shocks.
 
Reuters
TOPWRAP 9-U.S. vows bank aid; aims to avoid nationalization
Mon Feb 23, 2009 5:47pm EST
JPMorgan Chase & Co (JPM.N), the second-largest U.S. bank and considered to be among the strongest, slashed its common stock dividend by 87 percent in a surprise move to preserve a “fortress” balance sheet against any worsening of conditions.
 
New York (NY) Times
March 13, 2009, 2:47 pm Investment Banking
The Year That Was for Jamie Dimon
By DEALBOOK
(...)
And while Mr. Dimon has said that he is concerned about what awaits the banking sector this year, analysts think that JPMorgan and its oft-touted “fortress balance sheet” will weather the coming storm fairly well. (He said earlier this week that JPMorgan remained profitable for the first two months of the year.)
 
TheStreet
JPMorgan Defends ‘Fortress’ Balance Sheet
By Christopher Westfall   07/14/11 - 08:31 AM ED
NEW YORK (TheStreet)—JPMorgan Chase (JPM_) beat Wall Street’s earnings expectations by reporting a profit gain of almost 13% compared to the previous year.
 
The banking giant earned net income of $5.4 billion, or $1.27 a share for the second quarter, compared with the $4.8 billion, or $1.09 a share it earned in the same quarter a year-ago. The bank reported revenue at $27.4 billion, up from $25.13 billion during the second quarter of 2010.
     
Bank Director
Return of the Fortress Balance Sheet
By: Jonathan Joseph
June 3rd, 2011
Many regional and independent banks that survived the Great Recession of 2008–2009 did so with well-managed capital cushions and little or no subprime exposure. While the U.S. economy seems to be slowly mending, the risk of significant erosion in commercial real estate and commercial and industrial loan portfolios and other economic trends still represent substantial challenges to banking organizations.
 
In this climate, regulators have been urging banking organizations to essentially become super-well-capitalized or, in other words, to build “fortress balance sheets.”
 
TheStreet
GM Is a ‘Best Idea,’ Morgan Stanley Says
By Jake Lynch   07/07/11 - 07:57 AM EDT
(...)
Still, Morgan Stanley rates Ford “overweight.” It says GM “offers a powerful combination of positive near-term earnings revisions and negative investor sentiment, held up by open-ended questions surrounding the U.S. Treasury hangover, UAW [labor] negotiations and the deployment of GM’s fortress balance sheet.”