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Regulatory Capital Requirements
 12 Months Ended
Dec. 31, 2017
Banking and Thrift [Abstract]  
Regulatory Capital Requirements
Regulatory Capital Requirements
FDIC regulations require banks to maintain minimum levels of regulatory capital. Under the regulations in effect at December 31, 2017, the Bank is required to maintain: (1) a Tier 1 capital to total assets leverage ratio of 4.0%; (2) a common equity Tier 1 capital to risk-based assets ratio of 4.5%; (3) a Tier 1 capital to risk-based assets ratio of 6.0%; and (4) a total capital to risk-based assets ratio of 8.0%. In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted asset above the amount necessary to meet its minimum risk-based capital requirements. The capital conservation buffer requirement was effective on January 1, 2016 at 0.625% of risk-weighted assets and will increase each year until fully implemented at 2.5% on January 1, 2019. The capital conservation buffer during the calendar year 2017 was 1.25% and increased to 1.875% on January 1, 2018.
Under its prompt corrective action regulations, the FDIC is required to take certain supervisory actions (and may take additional discretionary actions) with respect to an undercapitalized institution. Such actions could have a direct material effect on an institution’s financial statements. The regulations establish a framework for the classification of savings institutions into five categories: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized. Generally, an institution is considered well capitalized if it has: a leverage (Tier 1) capital ratio of at least 5.00%; a common equity Tier 1 risk-based capital ratio of 6.50%; a Tier 1 risk-based capital ratio of at least 8.00%; and a total risk-based capital ratio of at least 10.00%.
The foregoing capital ratios are based in part on specific quantitative measures of assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by the FDIC about capital components, risk weightings and other factors.
As of December 31, 2017 and 2016, the Bank exceeded all minimum capital adequacy requirements to which it is subject. Further, the most recent FDIC notification categorized the Bank as a well-capitalized institution under the prompt corrective action regulations. There have been no conditions or events since that notification that management believes have changed the Bank’s capital classification.
The Company is regulated as a bank holding company, and as such, is subject to examination, regulation and periodic reporting under the Bank Holding Company Act, as administered by the Federal Reserve Board (“FRB”). The FRB has adopted capital adequacy guidelines for bank holding companies on a consolidated basis substantially similar to those of the FDIC for the Bank. As of December 31, 2017 and 2016, the Company was “well capitalized” under FRB guidelines. Regulations of the FRB provide that a bank holding company must serve as a source of strength to any of its subsidiary banks and must not conduct its activities in an unsafe or unsound manner. Under the prompt corrective action provisions discussed above, a bank holding company parent of an undercapitalized subsidiary bank would be directed to guarantee, within limitations, the capital restoration plan that is required of such an undercapitalized bank. If the undercapitalized bank fails to file an acceptable capital restoration plan or fails to implement an accepted plan, the FRB may prohibit the bank holding company parent of the undercapitalized bank from paying any dividend or making any other form of capital distribution without the prior approval of the FRB.
The following table shows the Company’s actual capital amounts and ratios as of December 31, 2017 and 2016, compared to the FRB minimum capital adequacy requirements and the FRB requirements for classification as a well-capitalized institution (dollars in thousands).
 
Actual capital
 
FRB minimum capital
adequacy requirements
 
FRB minimum capital
adequacy requirements with capital conservation buffer
 
To be well-capitalized
under prompt corrective
action provisions
 
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount    
 
Ratio    
 
Amount    
 
Ratio    
As of December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 leverage capital
$
887,924

 
9.65
%
 
$
367,999

 
4.00
%
 
$
367,999

 
4.00
%
 
$
459,999

 
5.00
%
Common equity Tier 1 risk-based capital
887,924

 
11.87

 
336,736

 
4.50
%
 
430,260

 
5.75

 
486,381

 
6.50

Tier 1 risk-based capital
887,924

 
11.87

 
448,981

 
6.00
%
 
542,502

 
7.25

 
598,623

 
8.00

Total risk-based capital
948,119

 
12.67

 
598,642

 
8.00
%
 
692,157

 
9.25

 
748,278

 
10.00

 
Actual capital
 
FRB minimum capital
adequacy requirements
 
FRB minimum capital
adequacy requirements with capital conservation buffer
 
To be well-capitalized
under prompt corrective
action provisions
 
Amount
 
Ratio
 
Amount    
 
Ratio    
 
Amount    
 
Ratio    
 
Amount    
 
Ratio    
As of December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 leverage capital
$
835,282

 
9.25
%
 
$
361,183

 
4.00
%
 
$
361,183

 
4.00
%
 
$
451,479

 
5.00
%
Common equity Tier 1 risk-based capital
835,282

 
11.64

 
323,048

 
4.50

 
367,916

 
5.13
%
 
466,625

 
6.50

Tier 1 risk-based capital
835,282

 
11.64

 
430,731

 
6.00

 
475,599

 
6.63
%
 
574,308

 
8.00

Total risk-based capital
897,165

 
12.50

 
574,308

 
8.00

 
619,176

 
8.63
%
 
717,885

 
10.00



The following table shows the Bank’s actual capital amounts and ratios as of December 31, 2017 and 2016, compared to the FDIC minimum capital adequacy requirements and the FDIC requirements for classification as a well-capitalized institution (dollars in thousands).
 
Actual capital
 
FDIC minimum capital
adequacy requirements
 
FDIC minimum capital
adequacy requirements with Capital Conservation buffer
 
To be well-capitalized
under prompt corrective
action provisions
 
Amount
 
Ratio
 
Amount    
 
Ratio    
 
Amount    
 
Ratio    
 
Amount    
 
Ratio    
As of December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 leverage capital
$
834,084

 
9.07
%
 
$
367,986

 
4.00
%
 
$
367,986

 
4.00
%
 
$
459,983

 
5.00
%
Common equity Tier 1 risk-based capital
834,084

 
11.15

 
336,721

 
4.50
%
 
430,254

 
5.75

 
486,374

 
6.50

Tier 1 risk-based capital
834,084

 
11.15

 
448,961

 
6.00
%
 
542,494

 
7.25

 
598,615

 
8.00

Total risk-based capital
894,430

 
11.95

 
598,615

 
8.00
%
 
692,148

 
9.25

 
748,268

 
10.00

 
 
Actual capital
 
FDIC minimum capital
adequacy requirements
 
FRB minimum capital
adequacy requirements with capital conservation buffer
 
To be well-capitalized
under prompt corrective
action provisions
 
Amount
 
Ratio
 
Amount    
 
Ratio    
 
Amount    
 
Ratio    
 
Amount    
 
Ratio    
As of December 31, 2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier 1 leverage capital
$
760,708

 
8.42
%
 
$
361,172

 
4.00
%
 
$
361,172

 
4.00
%
 
$
451,465

 
5.00
%
Common equity Tier 1 risk-based capital
760,708

 
10.60

 
323,040

 
4.50

 
367,907

 
5.13
%
 
466,613

 
6.50

Tier 1 risk-based capital
760,708

 
10.60

 
430,720

 
6.00

 
475,587

 
6.63
%
 
574,293

 
8.00

Total risk-based capital
822,743

 
11.46

 
574,293

 
8.00

 
619,160

 
8.63
%
 
717,867

 
10.00