Regulatory Capital

6 Months Ended

Jun. 30, 2018

Banking and Thrift [Abstract]

Regulatory Capital

REGULATORY CAPITAL

The Bank and the Bancorp are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet the minimum capital requirements can result in certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on Customers' financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank and the Bancorp must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items, as calculated under the regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require the Bank and the Bancorp to maintain minimum amounts and ratios (set forth in the following table) of common equity Tier 1, Tier 1, and total capital to risk-weighted assets, and Tier 1 capital to average assets (as defined in the regulations). At June 30, 2018 and December 31, 2017, the Bank and the Bancorp satisfied all capital requirements to which they were subject.

Generally, to comply with the regulatory definition of adequately capitalized, or well capitalized, respectively, or to comply with the Basel III capital requirements, an institution must at least maintain the common equity Tier 1, Tier 1 and total risk-based capital ratios and the Tier 1 leverage ratio in excess of the related minimum ratios as set forth in the following table:

					Minimum Capital Levels to be Classified as:
	Actual				Adequacy Capitalized				Well Capitalized				Basel III Compliant
(amounts in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
As of June 30, 2018:
Common equity Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc.	$	735,609	8.611	%	$	384,418	4.500	%	N/A		N/A		$	544,591	6.375	%
Customers Bank	$	1,054,613	12.351	%	$	384,232	4.500	%	$	555,002	6.500	%	$	544,329	6.375	%
Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc.	$	953,025	11.156	%	$	512,557	6.000	%	N/A		N/A		$	672,731	7.875	%
Customers Bank	$	1,054,613	12.351	%	$	512,309	6.000	%	$	683,079	8.000	%	$	672,406	7.875	%
Total capital (to risk-weighted assets)
Customers Bancorp, Inc.	$	1,072,072	12.550	%	$	683,409	8.000	%	N/A		N/A		$	843,583	9.875	%
Customers Bank	$	1,202,070	14.078	%	$	683,079	8.000	%	$	853,849	10.000	%	$	843,176	9.875	%
Tier 1 capital (to average assets)
Customers Bancorp, Inc.	$	953,025	8.866	%	$	429,963	4.000	%	N/A		N/A		$	429,963	4.000	%
Customers Bank	$	1,054,613	9.822	%	$	429,471	4.000	%	$	536,839	5.000	%	$	429,471	4.000	%
As of December 31, 2017:
Common equity Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc.	$	689,494	8.805	%	$	352,368	4.500	%	N/A		N/A		$	450,248	5.750	%
Customers Bank	$	1,023,564	13.081	%	$	352,122	4.500	%	$	508,621	6.500	%	$	449,934	5.750	%
Tier 1 capital (to risk-weighted assets)
Customers Bancorp, Inc.	$	906,963	11.583	%	$	469,824	6.000	%	N/A		N/A		$	567,704	7.250	%
Customers Bank	$	1,023,564	13.081	%	$	469,496	6.000	%	$	625,994	8.000	%	$	567,307	7.250	%
Total capital (to risk-weighted assets)
Customers Bancorp, Inc.	$	1,021,601	13.047	%	$	626,432	8.000	%	N/A		N/A		$	724,313	9.250	%
Customers Bank	$	1,170,666	14.961	%	$	625,994	8.000	%	$	782,493	10.000	%	$	723,806	9.250	%
Tier 1 capital (to average assets)
Customers Bancorp, Inc.	$	906,963	8.937	%	$	405,949	4.000	%	N/A		N/A		$	405,949	4.000	%
Customers Bank	$	1,023,564	10.092	%	$	405,701	4.000	%	$	507,126	5.000	%	$	405,701	4.000	%

The risk-based capital rules adopted effective January 1, 2015 require that banks and holding companies maintain a "capital conservation buffer" of 250 basis points in excess of the "minimum capital ratio" or certain elective distributions would be limited. The minimum capital ratio is equal to the prompt corrective action adequately capitalized threshold ratio. The capital conservation buffer is being phased in over four years beginning on January 1, 2016, with a maximum buffer of 0.625% of risk weighted assets for 2016, 1.25% for 2017, 1.875% for 2018, and 2.5% for 2019 and thereafter.

Effective January 1, 2018, the capital level required to avoid limitation on elective distributions applicable to the Bancorp and the Bank were as follows:

(i) a common equity Tier 1 risk-based capital ratio of 6.375%;

(ii) a Tier 1 risk-based capital ratio of 7.875%; and

(iii) a Total risk-based capital ratio of 9.875%.

Failure to maintain the required capital conservation buffer will result in limitations on capital distributions and on discretionary bonuses to executive officers.