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Regulatory Matters | 12 Months Ended
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Dec. 31, 2016
Regulatory Matters [Abstract] |
Regulatory Matters | (11.) REGULATORY MATTERS General The supervision and regulation of financial and bank holding companies and their subsidiaries is intended primarily for the protection of depositors, the deposit insurance funds regulated by the FDIC and the banking system as a whole, and not for the protection of shareholders or creditors of bank holding companies. The various bank regulatory agencies have broad enforcement power over financial holding companies and banks, including the power to impose substantial fines, operational restrictions and other penalties for violations of laws and regulations and for safety and soundness considerations. Capital Banks and bank holding companies are subject to various regulatory capital requirements administered by state and federal banking agencies. Capital adequacy guidelines and, additionally for banks, 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 about components, risk weighting and other factors. The Basel III Capital Rules, a new comprehensive capital framework for U.S. banking organizations, became effective for the Company and the Bank on January 1, 2015 (subject to a phase-in period for certain provisions). Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the table that follows) of Common Equity Tier 1 capital ("CET1"), Tier 1 capital and Total capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to adjusted quarterly average assets (as defined). The Company's and the Bank's Common Equity Tier 1 capital includes common stock and related paid-in capital, net of treasury stock, and retained earnings. In connection with the adoption of the Basel III Capital Rules, we elected to opt-out of the requirement to include most components of accumulated other comprehensive income in Common Equity Tier 1. Common Equity Tier 1 for both the Company and the Bank is reduced by goodwill and other intangible assets, net of associated deferred tax liabilities, and subject to transition provisions. Tier 1 capital includes Common Equity Tier 1 capital and additional Tier 1 capital. For the Company, additional Tier 1 capital at December 31, 2016 includes, subject to limitation, $17.3 million of preferred stock. Total capital includes Tier 1 capital and Tier 2 capital. Tier 2 capital for both the Company and the Bank includes a permissible portion of the allowance for loan losses. Tier 2 capital for the Company also includes qualified subordinated debt. At December 31, 2016, the Company's Tier 2 capital included $39.1 million of Subordinated Notes. The Common Equity Tier 1, Tier 1 and Total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. Risk-weighted assets are calculated based on regulatory requirements and include total assets, with certain exclusions, allocated by risk weight category, and certain off-balance-sheet items, among other things. The leverage ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets, which exclude goodwill and other intangible assets, among other things. When fully phased in on January 1, 2019, the Basel III Capital Rules will require the Company and the Bank to maintain (i) a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of at least 4.5%, plus a 2.5% "capital conservation buffer" (which is added to the 4.5% Common Equity Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of at least 7.0% upon full implementation), (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (which is added to the 6.0% Tier 1 capital ratio as that buffer is phased in, effectively resulting in a minimum Tier 1 capital ratio of 8.5% upon full implementation), (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (which is added to the 8.0% total capital ratio as that buffer is phased in, effectively resulting in a minimum total capital ratio of 10.5% upon full implementation) and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average quarterly assets. The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and be phased in over a four-year period (increasing by that amount on each subsequent January 1, until it reaches 2.5% on January 1, 2019). The Basel III Capital Rules also provide for a "countercyclical capital buffer" that is applicable to only certain covered institutions and does not have any current applicability to the Company or the Bank. The capital conservation buffer is designed to absorb losses during periods of economic stress and, as detailed above, effectively increases the minimum required risk-weighted capital ratios. Banking institutions with a ratio of Common Equity Tier 1 capital to risk-weighted assets below the effective minimum (4.5% plus the capital conservation buffer and, if applicable, the countercyclical capital buffer) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall. The following table presents actual and required capital ratios as of December 31, 2016 and 2015 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of December 31, 2016 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules (in thousands):
|  |  |  |  |  | Minimum Capital |  |  | Minimum Capital |  |  | Required to be |
|  |  |  |  |  | Required – Basel III |  |  | Required – Basel III |  |  | Considered Well |
|  | Actual |  |  | Phase-in Schedule |  |  | Fully Phased-in |  |  | Capitalized |
|  | Amount | Ratio |  |  | Amount | Ratio |  |  | Amount | Ratio |  |  | Amount | Ratio |
2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tier 1 leverage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company | $ | 265,246 | 7.36 | % | $ | 144,095 | 4.00 | % | $ | 144,095 | 4.00 | % | $ | 180,119 | 5.00 | %
Bank |  | 284,765 | 7.92 |  |  | 143,862 | 4.00 |  |  | 143,862 | 4.00 |  |  | 179,828 | 5.00 |
CET1 capital: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | 247,906 | 9.59 |  |  | 132,438 | 5.13 |  |  | 180,891 | 7.00 |  |  | 167,970 | 6.50 |
Bank |  | 284,765 | 11.06 |  |  | 132,014 | 5.13 |  |  | 180,312 | 7.00 |  |  | 167,432 | 6.50 |
Tier 1 capital: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | 265,246 | 10.26 |  |  | 171,201 | 6.63 |  |  | 219,654 | 8.50 |  |  | 206,733 | 8.00 |
Bank |  | 284,765 | 11.06 |  |  | 170,652 | 6.63 |  |  | 218,950 | 8.50 |  |  | 206,070 | 8.00 |
Total capital: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | 335,241 | 12.97 |  |  | 222,884 | 8.63 |  |  | 271,337 | 10.50 |  |  | 258,416 | 10.00 |
Bank |  | 315,699 | 12.26 |  |  | 222,170 | 8.63 |  |  | 270,467 | 10.50 |  |  | 257,588 | 10.00 |
2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Tier 1 leverage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company | $ | 243,452 | 7.41 | % | $ | 131,506 | 4.00 | % | $ | 131,506 | 4.00 | % | $ | 164,382 | 5.00 | %
Bank |  | 265,487 | 8.09 |  |  | 131,188 | 4.00 |  |  | 131,188 | 4.00 |  |  | 163,985 | 5.00 |
CET1 capital: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | 226,413 | 9.77 |  |  | 104,334 | 4.50 |  |  | 162,297 | 7.00 |  |  | 150,705 | 6.50 |
Bank |  | 265,487 | 11.49 |  |  | 103,971 | 4.50 |  |  | 161,733 | 7.00 |  |  | 150,180 | 6.50 |
Tier 1 capital: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | 243,452 | 10.50 |  |  | 139,112 | 6.00 |  |  | 197,076 | 8.50 |  |  | 185,483 | 8.00 |
Bank |  | 265,487 | 11.49 |  |  | 138,628 | 6.00 |  |  | 196,389 | 8.50 |  |  | 184,837 | 8.00 |
Total capital: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | 309,527 | 13.35 |  |  | 185,483 | 8.00 |  |  | 243,446 | 10.50 |  |  | 231,854 | 10.00 |
Bank |  | 292,572 | 12.66 |  |  | 184,837 | 8.00 |  |  | 242,599 | 10.50 |  |  | 231,046 | 10.00 |
As of December 31, 2016, the Company and Bank were considered "well capitalized" under all regulatory capital guidelines. Such determination has been made based on the Tier 1 leverage, CET1capital, Tier 1 capital and total capital ratios. Federal Reserve Requirements The Bank is required to maintain a reserve balance at the FRB of New York. The reserve requirement for the Bank totaled $629 thousand as of December 31, 2016. As of December 31, 2015 and 2014, the Bank was not required to maintain a reserve balance at the FRB of New York. In the ordinary course of business, the Company is dependent upon dividends from the Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits for that year combined with the retained net profits for the preceding two years.

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- Definition The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1G -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958577-112826 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1C -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958572-112826 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1E -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958574-112826 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1H -URI http://asc.fasb.org/extlink&oid=35709795&loc=d3e65071-112826 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958569-112826 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958570-112826 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1F -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958575-112826 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958568-112826 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1D -URI http://asc.fasb.org/extlink&oid=35709795&loc=SL5958573-112826 + Details
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