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Regulatory Requirements and Restrictions
 12 Months Ended
Dec. 31, 2016
Regulatory Requirements and Restrictions
Note 21. Regulatory Requirements and Restrictions

The Company and the Bank are subject to various regulatory capital requirements administered by state and federal 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 consolidated financial statements. Under the capital adequacy guidelines and the regulatory framework for prompt corrective action, which applies only to the Bank, the Bank must meet specific capital guidelines that involve quantitative measures of the entity’s balance sheet assets and off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. In addition, the Company and the Bank are subject to various regulatory restrictions related to the payment of dividends, including requirements to maintain capital at or above regulatory minimums.

The current risk-based capital requirements, based on the international capital standards known as Basel III, requires the Company and the Bank to maintain minimum amounts and ratios of Common Equity Tier 1 capital, Tier 1 capital, and total capital to risk-weighted assets, and of Tier 1 capital to average consolidated assets (“Tier 1 leverage ratio”), as defined in the regulations. On January 1, 2016, Basel III’s capital conservation buffer, which is intended to absorb losses during periods of economic stress, became effective at 0.625%, and will be phased in over a four-year period (increasing by an additional 0.625% each year until it reaches 2.5% on January 1, 2019). As of December 31, 2016, the capital conservation buffer was 5.29% for the Company and 3.48% for the Bank, which exceeds the required capital conservation buffer on a fully phased-in basis.

The following tables present actual and required capital ratios, under Basel III capital rules, as of the dates indicated:

 

     December 31, 2016  
     Actual     Minimum Basel III
Requirement		     Minimum Basel III
Requirement - Fully
Phased-In		     Well Capitalized
Requirement(1)		  
(Amounts in thousands)    Amount      Ratio     Amount      Ratio     Amount      Ratio     Amount      Ratio  

The Company

                     

Common equity Tier 1 ratio

    $ 241,671        13.88 %    $ 78,362        4.50 %    $ 121,897        7.00 %      N/A        N/A  

Tier 1 risk-based capital ratio

      256,671        14.74 %      104,483        6.00 %      148,018        8.50 %      N/A        N/A  

Total risk-based capital ratio

      274,953        15.79 %      139,311        8.00 %      182,846        10.50 %      N/A        N/A  

Tier 1 Leverage ratio

      256,671        11.07 %      92,742        4.00 %      92,742        4.00 %      N/A        N/A  

The Bank

                     

Common equity Tier 1 ratio

    $ 223,944        12.93 %    $ 77,956        4.50 %    $ 121,264        7.00 %    $ 112,603        6.50 % 

Tier 1 risk-based capital ratio

      223,944        12.93 %      103,941        6.00 %      147,249        8.50 %      138,588        8.00 % 

Total risk-based capital ratio

      242,218        13.98 %      138,588        8.00 %      181,897        10.50 %      173,235        10.00 % 

Tier 1 Leverage ratio

      223,944        9.71 %      92,274        4.00 %      92,274        4.00 %      115,343        5.00 % 

 

(1) Based on prompt corrective action provisions

 

     December 31, 2015  
     Actual     Minimum Basel III
Requirement		     Minimum Basel III
Requirement - Fully
Phased-In		     Well Capitalized
Requirement(1)		  
(Amounts in thousands)    Amount      Ratio     Amount      Ratio     Amount      Ratio     Amount      Ratio  

The Company

                     

Common equity Tier 1 ratio

    $ 246,237        14.54 %    $ 76,196        4.50 %    $ 118,527        7.00 %      N/A        N/A  

Tier 1 risk-based capital ratio

      249,436        14.73 %      101,595        6.00 %      143,926        8.50 %      N/A        N/A  

Total risk-based capital ratio

      269,998        15.95 %      135,459        8.00 %      177,791        10.50 %      N/A        N/A  

Tier 1 Leverage ratio

      249,436        10.62 %      93,935        4.00 %      93,935        4.00 %      N/A        N/A  

The Bank

                     

Common equity Tier 1 ratio

    $ 228,669        13.60 %    $ 75,682        4.50 %    $ 117,728        7.00 %    $ 109,319        6.50 % 

Tier 1 risk-based capital ratio

      228,669        13.60 %      100,910        6.00 %      142,955        8.50 %      134,546        8.00 % 

Total risk-based capital ratio

      249,228        14.82 %      134,546        8.00 %      176,592        10.50 %      168,183        10.00 % 

Tier 1 Leverage ratio

      228,669        9.77 %      93,616        4.00 %      93,616        4.00 %      117,020        5.00 % 

 

(1) Based on prompt corrective action provisions