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Regulatory Matters
 12 Months Ended
Dec. 31, 2017
Banking and Thrift [Abstract]  
Regulatory Matters
19. REGULATORY MATTERS

The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the federal banking regulatory agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct, material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgment by the regulators about components, risk-weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Effective January 1, 2015, the Company and the Bank became subject to a new regulatory capital measure called Common Equity Tier 1 (“CET1”) to risk-weighted assets which was implemented as a result of the “Basel III” regulatory capital reforms and changes required by the Dodd-Frank Act.

Basel III also introduces a new “capital conservation buffer,” composed entirely of CET1, on top of minimum risk-weighted asset ratios. The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of CET1 to risk-weighted assets above the minimum requirement but below the capital conservation buffer will face constraints on dividends, equity repurchases and payment of discretionary bonuses based on the amount of the shortfall. The implementation of the capital conservation buffer began on January 1, 2016 at 0.625% and will be phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). Thus, when fully phased in on January 1, 2019, the Bank will be required to maintain this additional capital conservation buffer of 2.5% of CET1.

 

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier 1 capital and CET1 capital to risk-weighted assets, and of Tier 1 capital to average assets. Management believes that, as of December 31, 2017 and 2016, the Company and the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2017 and 2016, the most recent notifications from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the minimum total risk-based, Tier 1 risk-based, CET1 risk-based, and Tier 1 leverage (tangible Tier 1 capital divided by average total assets) ratios as set forth in the table below must be maintained. There are no conditions or events since said notification that management believes have changed the Bank’s category.

As of December 31, 2017 and 2016, the Company had $25.0 million of trust-preferred securities, which were included in Tier 1 capital for regulatory purposes, respectively. The following table summarizes regulatory capital amounts and ratios for the Company and the Bank as of December 31, 2017 and 2016.

 

    Actual     For Capital
Adequacy Purposes		     To Be Well
Capitalized under Prompt
Corrective Action
Provisions		  
    Amount     Ratio     Amount           Ratio     Amount           Ratio  
    (Dollars in thousands)  

As of December 31, 2017:

                

Total Capital (to Risk-Weighted Assets)

                

Company

     $ 1,039,060         18.01%       $ 461,574         ³       8.00%            N/A   

Bank

     $ 1,029,126         17.86%       $ 461,037         ³       8.00%        $ 576,296      ³       10.00%   

Tier 1 Capital (to Risk-Weighted Assets)

                

Company

     $ 973,169         16.87%       $ 346,180         ³       6.00%            N/A   

Bank

     $ 963,235         16.71%       $ 345,778         ³       6.00%        $ 461,037      ³       8.00%   

Common equity Tier 1 capital ratio

                

Company

     $ 948,210         16.43%       $ 259,635         ³       4.50%            N/A   

Bank

     $ 963,235         16.71%       $ 259,333         ³       4.50%        $ 374,592      ³       6.50%   

Tier 1 Capital (to Average-Assets)

                

Company

     $ 973,169         11.88%       $ 327,680         ³       4.00%            N/A   

Bank

     $ 963,235         11.77%       $ 327,397         ³       4.00%        $ 409,246      ³       5.00%   

As of December 31, 2016:

                

Total Capital (to Risk-Weighted Assets)

                

Company

     $ 982,461         18.19%       $ 432,081         ³       8.00%            N/A   

Bank

     $ 971,681         18.01%       $ 431,576         ³       8.00%        $ 539,471      ³       10.00%   

Tier 1 Capital (to Risk-Weighted Assets)

                

Company

     $ 914,937         16.94%       $ 324,061         ³       6.00%            N/A   

Bank

     $ 904,236         16.76%       $ 323,682         ³       6.00%        $ 431,576      ³       8.00%   

Common equity Tier 1 capital ratio

                

Company

     $ 890,118         16.48%       $ 243,046         ³       4.50%            N/A   

Bank

     $ 904,236         16.76%       $ 242,762         ³       4.50%        $ 350,656      ³       6.50%   

Tier 1 Capital (to Average-Assets)

                

Company

     $ 914,937         11.49%       $ 318,552         ³       4.00%            N/A   

Bank

     $     904,236         11.36%       $     318,305         ³       4.00%        $     397,882      ³       5.00%   

In addition, California Banking Law limits the amount of dividends a bank can pay without obtaining prior approval from bank regulators. Under this law, the Bank could, as of December 31, 2017, declare and pay additional dividends of approximately $158.7 million.