Note 22 - Regulatory Matters

12 Months Ended

Dec. 31, 2016

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

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,

2016

and

2015,

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,

2016

and

2015

are presented in the table below:

	Company					Bank								To Be Well Capitalized Under
	Actual					Actual					Minimum Required For			Prompt Corrective Action
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Capital Adequacy Purposes			Regulations *
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	%

As of December 31, 2015
CET1 capital (to risk weighted assets)	$	632,408	10.68	%	$	620,879	10.52	%	4.50	%	6.5	%
Total capital (to risk weighted assets)		755,212	12.75	%		673,442	11.41	%	8.00	%	10.0	%
Tier 1 capital (to risk weighted assets)		632,408	10.68	%		620,879	10.52	%	6.00	%	8.0	%
Tier 1 capital (to average assets)		632,408	10.90	%		620,879	10.74	%	4.00	%	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,

2016,

the Bank could pay dividends to the parent to the extent of its earnings so long as it maintained required capital ratios.