Regulatory Capital

12 Months Ended

Dec. 31, 2015

Banking and Thrift [Abstract]

Regulatory Capital

Regulatory Capital

The Federal Reserve has adopted capital adequacy guidelines that are used to assess the adequacy of capital in supervising a bank holding company. Prior to 2015, the regulatory capital requirements effective for the Company followed the Capital Accord of the Basel Committee on Banking Supervision (“Basel I”). The federal banking agencies implemented final rules (the “Final Rules”) to establish a new comprehensive regulatory capital framework with a phase-in period beginning on January 1, 2015 and ending on January 1, 2019. The Final Rules implemented the third installment of the Basel Accords (“Basel III”) regulatory capital reforms and changes required by the Dodd-Frank Act and substantially amend the regulatory risk-based capital rules applicable to the Company. Basel III redefines the regulatory capital elements and minimum capital ratios, introduces regulatory capital buffers above those minimums, revises rules for calculating risk-weighted assets and adds a new component of Tier 1 capital called Common Equity Tier 1, which includes common equity and retained earnings and excludes preferred equity.

Note 11. Regulatory Capital (continued)

Prompt corrective action regulations provide the following classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. If undercapitalized, capital distributions (including payment of a dividend) are generally restricted, as is paying management fees to its bank holding company. Failure to meet minimum capital requirements set forth in the table below can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s financial condition. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

At December 31, 2015 and 2014, the most recent regulatory notifications categorized the Company and Bank as well capitalized under the regulatory framework for prompt corrective action. To be well capitalized, the Bank must maintain minimum total capital, Tier 1 capital, Common Tier 1 capital and Tier 1 Leverage ratios as set forth in the table below. There are no conditions or events since December 31, 2015 that management believes have changed the Company’s or Bank’s risk-based capital category.

The following tables illustrate the FRB’s adequacy guidelines and the Company’s and the Bank’s compliance with those guidelines:

	December 31, 2015
	Actual				Required for Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Regulations
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk-weighted assets)
Consolidated	$	1,131,460	17.17	%	$	527,160	8.00	%	N/A		N/A
Glacier Bank	1,093,669		16.66	%	525,228		8.00	%	656,535		10.00	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	1,048,505	15.91	%	$	395,370	6.00	%	N/A		N/A
Glacier Bank	1,010,981		15.40	%	393,921		6.00	%	525,228		8.00	%
Common Equity Tier 1 (to risk-weighted assets)
Consolidated	$	926,523	14.06	%	$	296,528	4.50	%	N/A		N/A
Glacier	1,010,981		15.40	%	295,441		4.50	%	426,748		6.50	%
Tier 1 capital (to average assets)
Consolidated	$	1,048,505	12.01	%	$	349,066	4.00	%	N/A		N/A
Glacier Bank	1,010,981		11.66	%	346,715		4.00	%	$	433,394	5.00	%

	December 31, 2014
	Actual				Required for Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Regulations
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk-weighted assets)
Consolidated	$	1,065,282	18.93	%	$	450,240	8.00	%	$	562,800	10.00	%
Glacier Bank	1,023,669		18.25	%	448,739		8.00	%	560,924		10.00	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	994,197	17.67	%	$	225,120	4.00	%	$	337,680	6.00	%
Glacier Bank	952,815		16.99	%	224,370		4.00	%	336,554		6.00	%
Tier 1 capital (to average assets)
Consolidated	$	994,197	12.45	%	$	319,505	4.00	%	N/A		N/A
Glacier Bank	952,815		12.03	%	316,938		4.00	%	$	396,173	5.00	%

__________

N/A - Not applicable

Current guidance from the Federal Reserve provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per share, measured over the previous four fiscal quarters. The Bank is also subject to Montana state law and cannot declare a dividend greater than the previous two years’ net earnings without providing notice to the state.