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REGULATORY CAPITAL MATTERS
 12 Months Ended
Dec. 31, 2019
Banking and Thrift [Abstract]  
REGULATORY CAPITAL MATTERS REGULATORY CAPITAL MATTERS
The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believes as of December 31, 2019, the Company and the Bank met all capital adequacy requirements to which they were then subject. With respect to the Bank, prompt corrective action regulations provide five classifications: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and a capital restoration plan is required. At December 31, 2019, the most recent regulatory notification categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.
In addition to the minimum CET1, Tier 1, total capital and leverage ratios, the Company and the Bank must maintain a capital conservation buffer consisting of additional CET1 capital greater than 2.5% of risk-weighted assets above the required minimum risk-based capital levels in order to avoid limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses. Inclusive of the fully phased-in capital conservation buffer, the common equity Tier 1 capital, Tier 1 risk-based capital and total risk-based capital ratio minimums are 7.0%, 8.5% and 10.5%, respectively.
The following table presents the regulatory capital amounts and ratios for the Company and the Bank as of dates indicated:
 
 
 
 
Minimum Capital Requirements
 
Minimum Required to Be Well-Capitalized Under Prompt Corrective Action Provisions
($ in thousands)
 
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
Banc of California, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
Total risk-based capital
 
$
921,892

 
15.90
%
 
$
463,950

 
8.00
%
 
 N/A

 
N/A

Tier 1 risk-based capital
 
860,179

 
14.83
%
 
347,963

 
6.00
%
 
 N/A

 
N/A

Common equity tier 1 capital
 
670,355

 
11.56
%
 
260,972

 
4.50
%
 
 N/A

 
N/A

Tier 1 leverage
 
860,179

 
10.89
%
 
315,825

 
4.00
%
 
 N/A

 
N/A

Banc of California, NA
 
 
 
 
 
 
 
 
 
 
 
 
Total risk-based capital
 
$
1,007,762

 
17.46
%
 
$
461,843

 
8.00
%
 
$
577,304

 
10.00
%
Tier 1 risk-based capital
 
946,049

 
16.39
%
 
346,382

 
6.00
%
 
461,843

 
8.00
%
Common equity tier 1 capital
 
946,049

 
16.39
%
 
259,787

 
4.50
%
 
375,247

 
6.50
%
Tier 1 leverage
 
946,049

 
12.02
%
 
314,707

 
4.00
%
 
393,383

 
5.00
%
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
Banc of California, Inc.
 
 
 
 
 
 
 
 
 
 
 
 
Total risk-based capital
 
$
977,342

 
13.71
%
 
$
570,368

 
8.00
%
 
 N/A

 
N/A

Tier 1 risk-based capital
 
910,528

 
12.77
%
 
427,776

 
6.00
%
 
 N/A

 
N/A

Common equity tier 1 capital
 
679,400

 
9.53
%
 
320,832

 
4.50
%
 
 N/A

 
N/A

Tier 1 leverage
 
910,528

 
8.95
%
 
407,145

 
4.00
%
 
 N/A

 
N/A

Banc of California, NA
 
 
 
 
 
 
 
 
 
 
 
 
Total risk-based capital
 
$
1,120,122

 
15.71
%
 
$
570,382

 
8.00
%
 
$
712,977

 
10.00
%
Tier 1 risk-based capital
 
1,053,308

 
14.77
%
 
427,786

 
6.00
%
 
570,382

 
8.00
%
Common equity tier 1 capital
 
1,053,308

 
14.77
%
 
320,840

 
4.50
%
 
463,435

 
6.50
%
Tier 1 leverage
 
1,053,308

 
10.36
%
 
406,694

 
4.00
%
 
508,368

 
5.00
%

Dividend Restrictions
The Company’s principal source of funds for dividend payments is dividends received from the Bank. Federal banking laws and regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. Under these regulations, in the case of the Bank, the amount of dividends that may be paid in any calendar year is limited to the current year’s net profits, combined with the retained net profits of the preceding two years, subject to the capital requirements described above. However, any dividend granted by the Bank would be limited by the need to maintain its well capitalized
status plus the capital conservation buffer in order to avoid additional dividend restrictions. In addition to dividends on our preferred stock, we declared and paid dividends on our common stock of $0.13, $0.06, $0.06 and $0.06 per share for the quarters ended March 31, 2019, June 30, 2019, September 30, 2019 and December 31, 2019. During April 2019, our Board of Directors approved a plan to reduce the quarterly dividend from $0.13 to $0.06 per common share. The Bank paid dividends of $142.5 million to Banc of California, Inc. during the year ended December 31, 2019. On August 23, 2019, we completed the repurchase of Series D and E Series preferred stock for total consideration of $19.4 million and $26.6 million, respectively. In connection with these repurchases, the Bank paid a dividend of $88.5 million to Banc of California, Inc. Because the dividend exceeded the Bank’s eligible amount pursuant to applicable law, the dividend required OCC approval. Any other dividends from the Bank to the holding company in excess of the statutory eligible amount will require prior OCC approval.