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Regulatory Capital Requirements
 12 Months Ended
Dec. 31, 2017
Regulatory Capital Requirements [Abstract]  
Regulatory Capital Requirements

Note 21—Regulatory Capital Requirements

The Company and the Bank are subject to various regulatory capital requirements administered by their respective banking 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 financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off‑balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of Common Equity Tier 1 capital (“CET1”), Tier 1 capital and total capital to risk‑weighted assets and of Tier 1 capital to average consolidated assets, as defined in the regulations.

As of December 31, 2017, the most recent notification from the FDIC categorized the Bank as well‑capitalized under the framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank’s category.

The required regulatory capital ratios are set forth in the following tables along with the minimum capital amounts required for the Company and the Bank and well capitalized with respect to the Bank. The Company’s and the Bank’s actual capital amounts and ratios as of December 31, 2017 and 2016 are also presented.

 

 

 

Actual

 

 

Minimum Capital

Required

 

 

Required to be

Considered

Well Capitalized

 

2017

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

Total capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

410,831

 

 

 

15.98

%

 

$

205,661

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Bank

 

 

367,972

 

 

 

14.28

%

 

 

206,083

 

 

 

8.00

%

 

 

257,604

 

 

 

10.00

%

Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

392,520

 

 

 

15.27

%

 

$

154,246

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Bank

 

 

349,662

 

 

 

13.57

%

 

 

154,562

 

 

 

6.00

%

 

 

206,083

 

 

 

8.00

%

Common Equity Tier 1 (CET1) to risk weighted

   assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

353,995

 

 

 

13.77

%

 

$

115,684

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Bank

 

 

349,662

 

 

 

13.57

%

 

 

115,922

 

 

 

4.50

%

 

 

167,442

 

 

 

6.50

%

Tier 1 capital to average assets:

 

 

 

 

 

.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

392,520

 

 

 

12.25

%

 

$

128,178

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Bank

 

 

349,662

 

 

 

10.89

%

 

 

128,409

 

 

 

4.00

%

 

 

160,511

 

 

 

5.00

%

 


 

Note 21—Regulatory Capital Requirements (continued)

 

 

 

Actual

 

 

Minimum Capital

Required

 

 

Required to be

Considered

Well Capitalized

 

2016

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

Total capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

316,314

 

 

 

13.28

%

 

$

190,257

 

 

 

8.00

%

 

N/A

 

 

N/A

 

Bank

 

 

325,465

 

 

 

13.61

%

 

 

191,267

 

 

 

8.00

%

 

 

239,084

 

 

 

10.00

%

Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

304,324

 

 

 

12.78

%

 

$

142,895

 

 

 

6.00

%

 

N/A

 

 

N/A

 

Bank

 

 

313,474

 

 

 

13.11

%

 

 

143,450

 

 

 

6.00

%

 

 

191,267

 

 

 

8.00

%

Common Equity Tier 1 (CET1) to risk weighted

   assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

266,760

 

 

 

11.20

%

 

$

107,171

 

 

 

4.50

%

 

N/A

 

 

N/A

 

Bank

 

 

313,474

 

 

 

13.11

%

 

 

107,588

 

 

 

4.50

%

 

 

155,404

 

 

 

6.50

%

Tier 1 capital to average assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Company

 

$

304,324

 

 

 

10.07

%

 

$

120,850

 

 

 

4.00

%

 

N/A

 

 

N/A

 

Bank

 

 

313,474

 

 

 

10.35

%

 

 

121,169

 

 

 

4.00

%

 

 

151,461

 

 

 

5.00

%

The Company and Byline Bank must maintain a capital conservation buffer consisting of 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, repurchasing shares, and paying discretionary bonuses. The capital conservation buffer requirement began to be phased in on January 1, 2016 when a buffer greater than 0.625% of risk-weighted assets was required, which amount increases each year until the buffer requirement is fully implemented on January 1, 2019. As of January 1, 2017 the capital conservation buffer requirement was 1.25%. The conservation buffers for the Company and Byline Bank exceed the fully phased in minimum capital requirement as of December 31, 2017.

Provisions of state and federal banking regulations may limit, by statute, the amount of dividends that may be paid to the Company by Byline Bank without prior approval of Byline Bank’s regulatory agencies. The Company is economically dependent on the cash dividends received from Byline Bank. These dividends represent the primary cash flow from operating activities used to service obligations. For the year ended December 31, 2017, the Company received $2.8 million in cash dividends from Byline Bank to pay the line of credit interest; the trust preferred securities interest and preferred dividends. There were no cash dividends received by the Company from Byline Bank for the year ended December 31, 2016.