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Regulatory Capital Requirements and Dividends From Subsidiaries | 12 Months Ended
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Dec. 31, 2021
Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract] |
Regulatory Capital Requirements and Dividends From Subsidiaries | REGULATORY REQUIREMENTS, DIVIDENDS FROM SUBSIDIARIES BancShares and FCB are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the BancShares’ Consolidated Financial Statements. Certain activities, such as the ability to undertake new business initiatives, including acquisitions, the access to and cost of funding for new business initiatives, the ability to pay dividends, the ability to repurchase shares or other capital instruments, the level of deposit insurance costs, and the level and nature of regulatory oversight, largely depend on a financial institution’s capital strength. Federal banking agencies approved regulatory capital guidelines (“Basel III”) aimed at strengthening previous capital requirements for banking organizations. Basel III became effective for BancShares on January 1, 2015 and the associated capital conservation buffers of 2.5% were fully phased in by January 1, 2019. The following table includes the Basel III requirements for regulatory capital ratios.
|  | Basel III Minimums |  | Basel III Conservation Buffers |  | Basel III Requirements
Regulatory capital ratios |  |  |  |  |  |
Total risk-based capital |  | 8.00 | % |  | 2.50 | % |  | 10.50 | %
Tier 1 risk-based capital |  | 6.00 |  |  | 2.50 |  |  | 8.50 |
Common equity Tier 1 |  | 4.50 |  |  | 2.50 |  |  | 7.00 |
Tier 1 leverage |  | 4.00 |  |  | — |  |  | 4.00 |
The FDIC also has Prompt Corrective Action (“PCA”) thresholds for regulatory capital ratios. The regulatory capital ratios for BancShares and FCB are calculated in accordance with the guidelines of the federal banking authorities. The regulatory capital ratios for BancShares and FCB exceed the Basel III requirements and the PCA well-capitalized thresholds as of December 31, 2021 and 2020 as summarized in the following table.
|  |  |  | December 31, 2021 |  | December 31, 2020
(Dollars in thousands) | Basel III Requirements | PCA well-capitalized thresholds |  | Amount |  | Ratio |  | Amount |  | Ratio
BancShares |  |  |  |  |  |  |  |  |  |
Total risk-based capital | 10.50 | % | 10.00 | % |  | $ | 5,041,686 |  |  | 14.35 | % |  | $ | 4,577,212 |  |  | 13.81 | %
Tier 1 risk-based capital | 8.50 |  | 8.00 |  |  | 4,380,452 |  |  | 12.47 |  |  | 3,856,086 |  |  | 11.63 |
Common equity Tier 1 | 7.00 |  | 6.50 |  |  | 4,040,515 |  |  | 11.50 |  |  | 3,516,149 |  |  | 10.61 |
Tier 1 leverage | 4.00 |  | 5.00 |  |  | 4,380,452 |  |  | 7.59 |  |  | 3,856,086 |  |  | 7.86 |
FCB |  |  |  |  |  |  |  |  |  |
Total risk-based capital | 10.50 | % | 10.00 |  |  | 4,857,960 |  |  | 13.85 |  |  | 4,543,496 |  |  | 13.72 |
Tier 1 risk-based capital | 8.50 |  | 8.00 |  |  | 4,651,226 |  |  | 13.26 |  |  | 4,276,870 |  |  | 12.92 |
Common equity Tier 1 | 7.00 |  | 6.50 |  |  | 4,651,226 |  |  | 13.26 |  |  | 4,276,870 |  |  | 12.92 |
Tier 1 leverage | 4.00 |  | 5.00 |  |  | 4,651,226 |  |  | 8.07 |  |  | 4,276,870 |  |  | 8.72 |
At December 31, 2021, BancShares and FCB had total risk-based capital ratio conservation buffers of 6.35% and 5.85%, respectively, which are in excess of the fully phased in Basel III conservation buffer of 2.50%. The capital ratio conservation buffers represent the excess of the regulatory capital ratio as of December 31, 2021 over the Basel III minimum. At December 31, 2021, Tier 2 capital of BancShares included $128.1 million of trust preferred capital securities and $350.0 million of qualifying subordinated debentures, compared to $128.5 million of trust preferred capital securities and $377.5 million of qualifying subordinated debentures included at December 31, 2020. BancShares has Class A and Class B common stock. Class A common shares have one vote per share, while Class B common shares have 16 votes per share. Preferred Stock On March 12, 2020, the Parent Company issued and sold an aggregate of 13,800,000 depositary shares (the “Depositary Shares”), each representing a 1/40th interest in a share of 5.375% Non-Cumulative Perpetual Preferred Stock, Series A, par value $0.01 per share (the “Series A Preferred Stock”), with a liquidation preference of $25 per Depositary Share (equivalent to $1,000 per share of the Series A Preferred Stock) for a total of $345 million. The Series A Preferred Stock qualifies as Tier 1 regulatory capital. Dividends on the Series A Preferred Stock will be paid when, as, and if declared by the Board of Directors of the Parent Company, or a duly authorized committee thereof, to the extent that the Parent Company has lawfully available funds to pay dividends. If declared, dividends will accrue and be payable from the date of issuance at a rate of 5.375% per annum, payable quarterly in arrears on March 15, June 15, September 15, and December 15 of each year, beginning on June 15, 2020. Dividends on the Series A Preferred Stock will not be cumulative. BancShares may redeem the Series A Preferred Stock at its option, and subject to any required regulatory approval, at a redemption price equal to $1,000 per share (equivalent to $25 per depositary share), plus any declared and unpaid dividends to, but excluding, the redemption date, (i) in whole or in part, from time to time, on any dividend payment date on or after March 15, 2025, or (ii) in whole but not in part, at any time within 90 days following a regulatory capital treatment event (as defined in the Certificate of Designation for the Series A Preferred Stock). Dividends FCB to the Parent Company Dividends paid from FCB to the Parent Company are the primary source of funds available to the Parent Company for payment of dividends to its shareholders. The Board of Directors of FCB may approve distributions, including dividends, as it deems appropriate, subject to the requirements of the FDIC and the General Statutes of North Carolina, provided that the distributions do not reduce the regulatory capital ratios below the applicable requirements. FCB could have paid additional dividends to the Parent Company in the amount of $1.35 billion while continuing to meet the requirements for well-capitalized banks at December 31, 2021. Dividends declared by FCB and paid to the Parent Company amounted to $173.1 million in 2021, $229.7 million in 2020 and $149.8 million in 2019. Payment of dividends is made at the discretion of FCB’s Board of Directors and is contingent upon satisfactory earnings as well as projected capital needs. Restrictions on Cash and Overnight Investments Effective March 26, 2020, the Federal Reserve Board suspended the cash reserve requirement. BancShares’ overnight investments of $75 million in U.S. Bank Money Market accounts require a 30-day notice for withdrawal.

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- Definition The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1F -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958575-112826 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (c)(2) -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958569-112826 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (a)(2) -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (a)(1) -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1D -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958573-112826 + Details
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