Regulatory Capital Requirements and Other Regulatory Matters

12 Months Ended

Dec. 31, 2016

Banking and Thrift [Abstract]

Regulatory Capital Requirements and Other Regulatory Matters

Regulatory Capital Requirements and Other Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by 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 and the Bank’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 the Company’s and the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.  The Company’s and the Bank’s 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 Bank to maintain capital in order to meet certain capital ratios to be considered adequately capitalized or well capitalized under the regulatory framework for prompt corrective action.  As of the most recent formal notification from the Federal Reserve, the Bank was categorized as “well capitalized.”  There are no conditions or events since that notification that management believes have changed the Bank’s categorization.

New comprehensive regulatory capital rules for U.S. banking organizations pursuant to the capital framework of the Basel Committee on Banking Supervision, generally referred to as “Basel III”, became effective for the Company and the Bank on January 1, 2015, subject to phase-in periods for certain of their components and other provisions, and fully phased in by January 1, 2019. The most significant of the provisions of the New Capital Rules which applied to the Company and the Bank were as follows: the phase-out of trust preferred securities from Tier 1 capital, the higher risk-weighting of high volatility and past due real estate loans and the capital treatment of deferred tax assets and liabilities above certain thresholds. Under the Basel III rules, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is being phased in from 0.00% for 2015 to 2.50% by 2019. The capital conservation buffer for 2016 is 0.625%.

As defined in applicable regulations and set forth in the table below, at December 31, 2016 and 2015, the Company and the Bank continue to exceed the “well capitalized” standards:

	Actual				Minimum Required for Capital Adequacy Purposes				Required to be Well Capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
At December 31, 2016
Tier 1 leverage ratio
Bank	$	410,524	10.94	%	$	150,107	4.00	%	$	187,634	5.00	%
Consolidated	366,658		9.78	%	150,027		4.00	%	N/A		N/A
Common equity tier 1 risk-based capital ratio
Bank	410,524		11.70	%	157,840		4.50	%	227,991		6.50	%
Consolidated	356,658		10.17	%	157,878		4.50	%	N/A		N/A
Tier 1 risk-based capital ratio
Bank	410,524		11.70	%	210,453		6.00	%	280,605		8.00	%
Consolidated	366,658		10.45	%	210,503		6.00	%	N/A		N/A
Total risk-based capital ratio
Bank	432,943		12.34	%	280,605		8.00	%	350,756		10.00	%
Consolidated	448,150		12.77	%	280,671		8.00	%	N/A		N/A
At December 31, 2015
Tier 1 leverage ratio
Bank	$	304,442	11.41	%	$	106,684	4.00	%	$	133,354	5.00	%
Consolidated	254,280		9.52	%	106,886		4.00	%	N/A		N/A
Common equity tier 1 risk-based capital ratio
Bank	304,442		12.35	%	110,954		4.50	%	160,267		6.50	%
Consolidated	245,224		9.91	%	111,336		4.50	%	N/A		N/A
Tier 1 risk-based capital ratio
Bank	304,442		12.35	%	147,938		6.00	%	197,251		8.00	%
Consolidated	254,280		10.28	%	148,448		6.00	%	N/A		N/A
Total risk-based capital ratio
Bank	322,361		13.07	%	197,251		8.00	%	246,564		10.00	%
Consolidated	332,200		13.43	%	197,931		8.00	%	N/A		N/A