Shareholders' Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Shareholders' Equity

Shareholders' Equity

Stock Repurchase Program

The 2023 Repurchase Program authorizes the repurchase of up to 850,000 shares, or approximately 5%, of the Corporation’s outstanding common stock. This authority may be exercised from time to time and in such amounts as market conditions warrant, and subject to regulatory considerations. The timing and actual numbers of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The 2023 Repurchase Program commenced on January 1, 2023 and expires on December 31, 2023, and may be modified, suspended, or discontinued at any time. During the nine months ended September 30, 2023, the Corporation repurchased 200,000 shares, at an average price of $43.70 and a total cost of $8.7 million, all of which was repurchased in January and February.

Regulatory Capital Requirements

Capital levels at September 30, 2023 exceeded the regulatory minimum levels to be considered “well capitalized.”

The following table presents the Corporation’s and the Bank’s actual capital amounts and ratios, as well as the corresponding minimum and well capitalized regulatory amounts and ratios that were in effect during the respective periods:

(Dollars in thousands)	Actual			For Capital Adequacy Purposes			To Be “Well Capitalized” Under Prompt Corrective Action Provisions
	Amount	Ratio		Amount	Ratio		Amount	Ratio
September 30, 2023
Total Capital (to Risk-Weighted Assets):
Corporation	$606,512	11.48	%	$422,709	8.00	%	N/A	N/A
Bank	600,123	11.36		422,574	8.00		$528,217	10.00	%
Tier 1 Capital (to Risk-Weighted Assets):
Corporation	569,046	10.77		317,032	6.00		N/A	N/A
Bank	562,657	10.65		316,930	6.00		422,574	8.00
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
Corporation	547,050	10.35		237,774	4.50		N/A	N/A
Bank	562,657	10.65		237,698	4.50		343,341	6.50
Tier 1 Capital (to Average Assets): (1)
Corporation	569,046	7.87		289,211	4.00		N/A	N/A
Bank	562,657	7.78		289,117	4.00		361,397	5.00
December 31, 2022
Total Capital (to Risk-Weighted Assets):
Corporation	605,005	12.37		391,363	8.00		N/A	N/A
Bank	588,090	12.02		391,260	8.00		489,074	10.00
Tier 1 Capital (to Risk-Weighted Assets):
Corporation	571,794	11.69		293,522	6.00		N/A	N/A
Bank	554,879	11.35		293,445	6.00		391,260	8.00
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
Corporation	549,798	11.24		220,142	4.50		N/A	N/A
Bank	554,879	11.35		220,083	4.50		317,898	6.50
Tier 1 Capital (to Average Assets): (1)
Corporation	571,794	8.65		264,295	4.00		N/A	N/A
Bank	554,879	8.40		264,177	4.00		330,222	5.00

(1)    Leverage ratio.

In addition to the minimum regulatory capital required for capital adequacy purposes outlined in the table above, the Corporation is required to maintain a minimum capital conservation buffer, in the form of common equity, of 2.50% in order to avoid restrictions on capital distributions and discretionary bonuses. The Corporation’s capital levels exceeded the minimum regulatory capital requirements plus the capital conservation buffer at September 30, 2023 and December 31, 2022.

The Bancorp owns the common stock of two capital trusts, which have issued trust preferred securities. In accordance with GAAP, the capital trusts are treated as unconsolidated subsidiaries. At both September 30, 2023 and December 31, 2022, $22.0 million in trust preferred securities were included in the Tier 1 capital of the Corporation for regulatory capital reporting purposes pursuant to the capital adequacy guidelines of the Federal Reserve.

In accordance with regulatory capital rules, the Corporation elected the option to delay the estimated impact of ASC 326 on its regulatory capital over a two-year deferral and subsequent three-year transition period ending December 31, 2024. As a result, capital ratios exclude the full impact of the increased ACL on loans and unfunded loan commitments attributed to the adoption of ASC 326, adjusted for an approximation of the after-tax provision for credit losses attributable to ASC 326

relative to the incurred loss methodology during the two-year deferral period. The cumulative difference at the end of the deferral period is being phased-in to regulatory capital over the three-year transition period, which began January 1, 2022.