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Regulatory Matters
 12 Months Ended
Dec. 31, 2017
Regulatory Matters  
Regulatory Matters

Note 22 — Regulatory Matters

 

The Company and Bank are subject to various regulatory capital requirements administered by the 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 financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of 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 weighting, and other factors.

 

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain amounts and ratios (set forth in the table below) of Total capital, Tier 1 capital and CET1 (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined), referred to as the Leverage Ratio. Management believes, as of December 31, 2017 and 2016, that the Company and Bank met all capital adequacy requirements to which they are subject. 

 

The actual capital amounts and ratios for the Company and Bank as of December 31, 2017 and 2016 are presented in the table below:

 

 

 

Company

 

Bank

 

 

 

To Be Well
Capitalized Under

Prompt Corrective

 

 

 

Actual

 

Actual

 

Minimum Required For

 

Action

 

(dollars in thousands)

 

Amount

 

Ratio

 

Amount

 

Ratio

 

Capital Adequacy Purposes

 

Regulations *

 

As of December 31, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

CET1 capital (to risk weighted aseets)

 

$

845,123

 

11.23

%

$

969,250

 

12.91

%

5.750

%

6.5

%

Total capital (to risk weighted assets)

 

1,129,954

 

15.02

%

1,033,554

 

13.76

%

9.250

%

10.0

%

Tier 1 capital (to risk weighted assets)

 

845,123

 

11.23

%

969,250

 

12.91

%

7.250

%

8.0

%

Tier 1 capital (to average assets)

 

845,123

 

11.45

%

969,250

 

13.15

%

5.000

%

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2016

 

 

 

 

 

 

 

 

 

 

 

 

 

CET1 capital (to risk weighted aseets)

 

$

737,512

 

10.80

%

$

854,226

 

12.55

%

5.125

%

6.5

%

Total capital (to risk weighted assets)

 

1,016,712

 

14.89

%

913,100

 

13.41

%

8.625

%

10.0

%

Tier 1 capital (to risk weighted assets)

 

737,512

 

10.80

%

854,226

 

12.55

%

6.625

%

8.0

%

Tier 1 capital (to average assets)

 

737,512

 

10.72

%

854,226

 

12.44

%

5.000

%

5.0

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

* Applies to Bank only

 

Bank and holding company regulations, as well as Maryland law, impose certain restrictions on dividend payments by the Bank, as well as restricting extensions of credit and transfers of assets between the Bank and the Company.  At December 31, 2017, the Bank could pay dividends to the parent to the extent of its earnings so long as it maintained required capital ratios.