Regulatory Capital

9 Months Ended

Sep. 30, 2015

Banking and Thrift [Abstract]

Regulatory Capital

Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by federal banking authorities. 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 adverse effect on our financial condition. Under the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.

As of the first quarter 2015, the Bank was required by federal banking authorities to report regulatory capital and ratios based on the U.S. Basel III rule. U.S. Basel III implemented changes to capital, risk-weighted assets, and “well capitalized” definitions and added a reporting requirement of Common Equity Tier 1 Capital (to risk-weighted assets). Regulatory capital reported as of December 31, 2014 was calculated according to regulatory guidelines in effect at that date.

“Well capitalized” regulatory requirements are the quantitative measures established by regulation to ensure capital adequacy. The Bank is required to maintain minimum amounts and ratios (set forth in the table below) of Total and Tier I Capital to risk-weighted assets, Common Equity Tier I Capital to risk-weighted assets, and Tier I Capital to average assets, as defined by the regulation. The following amounts and ratios are based upon the Bank's assets.

					Well Capitalized Regulatory Requirements
	Amount		Ratio		Amount			Ratio
As of September 30, 2015:
Tier I Capital (to Average Assets)	$	1,639,235	12.2	%	$	674,490	>	5.0	%
Tier I Capital (to Risk-Weighted Assets)	$	1,639,235	13.3	%	$	989,333	>	8.0	%
Total Capital (to Risk-Weighted Assets)	$	1,743,438	14.1	%	$	1,236,667	>	10.0	%
Common Equity Tier I Capital (to Risk-Weighted Assets)	$	1,639,235	13.3	%	$	803,833	>	6.5	%
As of December 31, 2014:
Tier I Capital (to Average Assets)	$	1,413,988	11.5	%	$	614,709	>	5.0	%
Tier I Capital (to Risk-Weighted Assets)	$	1,413,988	15.0	%	$	565,148	>	6.0	%
Total Capital (to Risk-Weighted Assets)	$	1,497,830	15.9	%	$	941,913	>	10.0	%

Bank Dividends

The Bank is chartered under the laws of the State of Utah and its deposits are insured by the Federal Deposit Insurance Corporation (“FDIC”). The Bank’s ability to pay dividends is subject to the laws of Utah and the regulations of the FDIC. Generally, under Utah’s industrial bank laws and regulations as well as FDIC regulations, the Bank may pay dividends from its net profits without regulatory approval if, following the payment of the dividends, the Bank’s capital and surplus would not be impaired. The Bank paid no dividends for the three and nine months ended September 30, 2015 and September 30, 2014.