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Regulatory Matters
 12 Months Ended
Dec. 31, 2015
Regulatory Capital Requirements [Abstract]  
Regulatory Matters
Regulatory Matters
The Company is subject to various regulatory capital requirements administered by the Federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Capital amounts and classification are 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 Company to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets. The Company believes that it meets all capital adequacy requirements to which it is subject.
The most recent notification from the Federal bank regulators categorized 1st Source Bank, the largest of its subsidiaries, as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized” the Bank must maintain minimum total risk-based, Tier 1 risk-based, common equity Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table below. There are no conditions or events since that notification that the Company believes will have changed the institution’s category.
As discussed in Note 12, the capital securities held by the Capital Trusts qualify as Tier 1 capital under Federal Reserve Board guidelines. The following table shows the actual and required capital amounts and ratios for 1st Source Corporation and 1st Source Bank as of December 31, 2015 and 2014.
 
 
Actual
 
Minimum Capital Adequacy
 
To Be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in thousands) 
 
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
2015
 
 

 
 

 
 

 
 

 
 

 
 

Total Capital (to Risk-Weighted Assets):
 
 

 
 

 
 

 
 

 
 

 
 

1st Source Corporation
 
$
676,007

 
14.97
%
 
$
361,267

 
8.00
%
 
$
451,584

 
10.00
%
1st Source Bank
 
636,592

 
14.13
%
 
360,402

 
8.00
%
 
450,502

 
10.00
%
Tier 1 Capital (to Risk-Weighted Assets):
 
 

 
 

 
 

 
 

 
 

 
 

1st Source Corporation
 
616,577

 
13.65
%
 
270,951

 
6.00
%
 
361,267

 
8.00
%
1st Source Bank
 
579,833

 
12.87
%
 
270,301

 
6.00
%
 
360,402

 
8.00
%
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
 
 
 
 
 
 
 
 
 
 
 
 
1st Source Corporation
 
559,577

 
12.39
%
 
203,213

 
4.50
%
 
293,530

 
6.50
%
1st Source Bank
 
579,833

 
12.87
%
 
202,726

 
4.50
%
 
292,826

 
6.50
%
Tier 1 Capital (to Average Assets):
 
 

 
 

 
 

 
 

 
 

 
 
1st Source Corporation
 
616,577

 
12.21
%
 
201,921

 
4.00
%
 
252,401

 
5.00
%
1st Source Bank
 
579,833

 
11.50
%
 
201,701

 
4.00
%
 
252,126

 
5.00
%
2014
 
 

 
 

 
 

 
 

 
 

 
 

Total Capital (to Risk-Weighted Assets):
 
 

 
 

 
 

 
 

 
 

 
 

1st Source Corporation
 
$
629,023

 
15.89
%
 
$
316,704

 
8.00
%
 
$
395,880

 
10.00
%
1st Source Bank
 
598,038

 
15.15
%
 
315,886

 
8.00
%
 
394,857

 
10.00
%
Tier 1 Capital (to Risk-Weighted Assets):
 
 

 
 

 
 

 
 

 
 

 
 

1st Source Corporation
 
576,692

 
14.57
%
 
158,352

 
4.00
%
 
237,528

 
6.00
%
1st Source Bank
 
548,094

 
13.88
%
 
157,943

 
4.00
%
 
236,914

 
6.00
%
Tier 1 Capital (to Average Assets):
 
 

 
 

 
 

 
 

 
 

 
 

1st Source Corporation
 
576,692

 
12.16
%
 
189,718

 
4.00
%
 
237,147

 
5.00
%
1st Source Bank
 
548,094

 
11.57
%
 
189,412

 
4.00
%
 
236,765

 
5.00
%

The Bank was not required to maintain noninterest bearing cash balances with the Federal Reserve Bank as of December 31, 2015 and 2014.
Dividends that may be paid by a subsidiary bank to the parent company are subject to certain legal and regulatory limitations and also may be affected by capital needs, as well as other factors.
Due to the Company’s mortgage activities, 1st Source Bank is required to maintain minimum net worth capital requirements established by various governmental agencies. 1st Source Bank’s net worth requirements are governed by the Department of Housing and Urban Development and GNMA. As of December 31, 2015, 1st Source Bank met its minimum net worth capital requirements.