Regulatory Capital

12 Months Ended

Dec. 31, 2015

Banking and Thrift [Abstract]

Regulatory Capital

Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by federal and state 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 Basel III capital framework (“U.S. Basel III”) and the regulatory framework for prompt corrective action, the Bank must meet specific capital standards that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and its classification under the prompt corrective action framework are also subject to qualitative judgments by the regulators about components of capital, risk weightings and other factors.

As of January 1, 2015, the Bank was required to report regulatory capital and ratios in accordance with U.S. Basel III. Among other things, U.S. Basel III establishes Common Equity Tier 1 as a new tier of capital, modifies methods for calculating risk-weighted assets, introduces a new capital conservation buffer, and revises the capital thresholds of the prompt corrective action framework, including the “well capitalized” standard. The Bank’s regulatory capital reported as of December 31, 2014 was calculated according to the regulatory capital framework in effect at that date.

“Well capitalized” regulatory requirements are the quantitative measures established by regulation to ensure capital adequacy. To qualify as “well capitalized,” the Bank must maintain minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1, Tier 1 and Total capital to risk-weighted assets and of Tier 1 capital to average assets. The following capital amounts and ratios are based upon the Bank's assets.

	Actual				"Well Capitalized" Regulatory Requirements
	Amount		Ratio		Amount			Ratio
As of December 31, 2015:
Common Equity Tier 1 Capital (to Risk-Weighted Assets)	$	1,734,315	14.4	%	$	781,638	>	6.5	%
Tier 1 Capital (to Risk-Weighted Assets)	$	1,734,315	14.4	%	$	962,017	>	8.0	%
Total Capital (to Risk-Weighted Assets)	$	1,848,528	15.4	%	$	1,202,521	>	10.0	%
Tier 1 Capital (to Average Assets)	$	1,734,315	12.3	%	$	704,979	>	5.0	%
As of December 31, 2014:
Tier 1 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	%
Tier 1 Capital (to Average Assets)	$	1,413,988	11.5	%	$	614,709	>	5.0	%

Bank Dividends

The Bank is chartered under the laws of the State of Utah and its deposits are insured by the 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 dividend, the Bank’s capital and surplus would not be impaired. The Bank paid no dividends for the years ended December 31, 2015 and 2014, respectively. For the year ended December 31, 2013, the Bank paid dividends of $120.0 million to an entity that is now a subsidiary of Navient. For the foreseeable future, we expect the Bank to only pay dividends to the Company as may be necessary to provide for regularly scheduled dividends payable on the Company’s Series A and Series B Preferred Stock.