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REGULATORY CAPITAL MATTERS
 12 Months Ended
Dec. 31, 2020
Federal Home Loan Banks [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, 2020, 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. Depending on the regulatory capital levels, banks are subject to limitations such as requiring regulatory approval to accept brokered deposits if an institution is only adequately capitalized or limiting capital distributions or asset growth and expansion and requiring a capital restoration plan if an institution is undercapitalized. At December 31, 2020, 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 CET1, 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 RequirementsMinimum Required to Be Well-Capitalized Under Prompt Corrective Action Provisions
($ in thousands)AmountRatioAmountRatioAmountRatio
December 31, 2020
Banc of California, Inc.
Total risk-based capital$996,466 17.01 %$468,628 8.00 % N/AN/A
Tier 1 risk-based capital840,501 14.35 %351,471 6.00 % N/AN/A
Common equity tier 1 capital655,623 11.19 %263,603 4.50 % N/AN/A
Tier 1 leverage840,501 10.90 %308,555 4.00 % N/AN/A
Banc of California, NA
Total risk-based capital$1,011,587 17.27 %$468,698 8.00 %$585,873 10.00 %
Tier 1 risk-based capital938,346 16.02 %351,524 6.00 %468,698 8.00 %
Common equity tier 1 capital938,346 16.02 %263,643 4.50 %380,817 6.50 %
Tier 1 leverage938,346 12.19 %307,894 4.00 %384,868 5.00 %
December 31, 2019
Banc of California, Inc.
Total risk-based capital$921,892 15.90 %$463,950 8.00 % N/AN/A
Tier 1 risk-based capital860,179 14.83 %347,963 6.00 % N/AN/A
Common equity tier 1 capital670,355 11.56 %260,972 4.50 % N/AN/A
Tier 1 leverage860,179 10.89 %315,825 4.00 % N/AN/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 capital946,049 16.39 %346,382 6.00 %461,843 8.00 %
Common equity tier 1 capital946,049 16.39 %259,787 4.50 %375,247 6.50 %
Tier 1 leverage946,049 12.02 %314,707 4.00 %393,383 5.00 %
Dividend Restrictions
Payment of dividends by the Company are subject to guidance provided by the Federal Reserve. That guidance provides that bank holding companies that plan to pay dividends that exceed net earnings for a given period should first consult with the Federal Reserve. To the extent the Company's future quarterly dividend exceeds net earnings, less prior dividends, over the applicable quarterly time periods, the payment of the Company’s common and preferred stock dividends will be subject to prior consultation and non-objection from the Federal Reserve.
Our 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. Accordingly, any dividend granted by the Bank would be limited by the need to maintain its well capitalized status plus the capital buffer in order to avoid additional dividend restrictions. As described below, any near term dividend by the Bank will require OCC approval. During the year ended December 31, 2020, the Bank received approval from the OCC and paid $37.0 million in dividends to the holding company.
During the year ended December 31, 2020, we declared and paid dividends on our common stock of $0.24 per share, representing a quarterly dividend of $0.06 per share, in addition to dividends on our preferred stock. During the year ended December 31, 2019, we declared and paid dividends on our common stock of $0.31 per share, with the quarterly dividend ranging from $0.13 per share in the first quarter of 2019 to $0.06 per share for each of the subsequent 2019 quarters.