Shareholders’ Equity and Minimum Regulatory Capital Requirements

The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements results in certain discretionary and required actions by regulators that could have an effect on the Company’s operations. The regulations require the Company and the Bank to meet specific capital adequacy guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

To be considered well capitalized or adequately capitalized as defined under the regulatory framework for prompt corrective action, the Bank must maintain minimum Tier 1 leverage, Tier 1 common, Tier 1 risk-based and Total Risk-based ratios. At March 31, 2016 and December 31, 2015 the Bank maintained capital ratios exceeding the requirement to be considered well capitalized. These minimum ratios along with the actual ratios for the Company and the Bank are presented in the following tables:



(Dollars in thousands)	Well Capitalized Requirement			Adequately Capitalized Requirement			Actual
March 31, 2016	Amount		Ratio	Amount		Ratio	Amount		Ratio
Tier 1 Leverage Capital
(to Average Assets)
CBF Consolidated	N/A		N/A	$	291,361	≥ 4.0%	$	910,379	12.5%
Bank	$	363,835	≥ 5.0%	291,068		≥ 4.0%	807,988		11.1%
Tier 1 Common Equity Capital
(to Risk-weighted Assets)
CBF Consolidated	N/A		N/A	$	280,855	≥ 4.5%	$	835,401	13.4%
Bank	$	405,383	≥ 6.5%	280,650		≥ 4.5%	807,988		13.0%
Tier 1 Risk-based Capital
(to Risk-weighted Assets)
CBF Consolidated	N/A		N/A	$	374,472	≥ 6.0%	$	910,379	14.6%
Bank	$	498,933	≥ 8.0%	374,200		≥ 6.0%	807,988		13.0%
Total Risk-based Capital
(to Risk-weighted Assets)
CBF Consolidated	N/A		N/A	$	499,297	≥ 8.0%	$	956,066	15.3%
Bank	$	623,666	≥ 10.0%	498,933		≥ 8.0%	855,711		13.7%



(Dollars in thousands)	Well Capitalized Requirement			Adequately Capitalized Requirement			Actual
December 31, 2015	Amount		Ratio	Amount		Ratio	Amount		Ratio
Tier 1 Capital
(to Average Assets)
CBF Consolidated	N/A		N/A	$	286,742	≥ 4.0%	$	908,600	12.7%
Bank	$	357,761	≥ 5.0%	$	286,209	≥ 4.0%	$	793,722	11.1%
Tier 1 Common Equity Capital
(to Risk-weighted Assets)
CBF Consolidated	N/A		N/A	$	277,532	≥ 4.5%	$	840,681	13.6%
Bank	$	400,338	≥ 6.5%	$	277,157	≥ 4.5%	$	793,722	12.9%
Tier 1 Capital
(to Risk-weighted Assets)
CBF Consolidated	N/A		N/A	$	370,042	≥ 6.0%	$	908,600	14.7%
Bank	$	492,724	≥ 8.0%	$	369,543	≥ 6.0%	$	793,722	12.9%
Total Capital
(to Risk-weighted Assets)
CBF Consolidated	N/A		N/A	$	493,390	≥ 8.0%	$	954,065	15.5%
Bank	$	615,905	≥ 10.0%	$	492,724	≥ 8.0%	$	842,581	13.7%

In August 2010, the Bank entered into an Operating Agreement with the Office of the Comptroller of the Currency (the “OCC Operating Agreement”). The OCC Operating Agreement required the Bank to maintain total capital equal to at least 12% of risk-weighted assets, Tier 1 Capital equal to at least 11% of risk-weighted assets and a minimum leverage ratio of 10% (Tier 1 Capital ratio). On August 31, 2015, the OCC terminated this agreement and as a result the Bank is no longer subject to special de novo capital requirements and other restrictions.

As of March 31, 2016 and December 31, 2015, the Company and the Bank met all capital requirements to which they were subject. Tier 1 Capital for the Company includes trust preferred securities to the extent allowable.

The OCC Operating Agreement required prior approval from the OCC before paying a dividend to the Company. Dividends that may be paid by a national bank are limited to that bank’s retained net profits for the preceding two years plus retained net profits up to the date of any dividend declaration in the current calendar year. Subsequent to receiving approval from the OCC, the Company received dividends from the bank totaling $199.4 million, $56.0 million and $105.0 million on January 30, 2015, July 15, 2014 and September 24, 2013, respectively. The Company may use these dividends for general corporate purposes including acquisitions, or as a return of capital to shareholders through future share repurchases or dividends.

In July 2013, the U.S. banking regulators adopted a final rule which implements the Basel III regulatory capital reforms from the Basel Committee on Banking Supervision, and certain changes required by the Dodd-Frank Act. The final rule established an integrated regulatory capital framework and introduces the “Standardized Approach” for risk-weighted assets, which replaces the Basel I risk-based guidance for determining risk-weighted assets as of January 1, 2015, the date the Company became subject to the new rules. Based on the Company's current capital composition and levels, the Company believes it is in compliance with the requirements as set forth in the final rules.

The rules include new risk-based capital and leverage ratios, which will be phased in from 2015 to 2019, and refine the definition of what constitutes “capital” for purposes of calculating those ratios. The new minimum capital level requirements applicable to the Company and the Bank under the final rules are as follows: (i) a new common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 capital ratio of 6% (increased from 4%); (iii) a total capital ratio of 8% (unchanged from previous rules); and (iv) a Tier 1 leverage ratio of 4% for all institutions. The final rules also establish a “capital conservation buffer” above the new regulatory minimum capital requirements. The capital conservation buffer will be phased-in over four years beginning on January 1, 2016, as follows: the maximum buffer will be 0.625% of risk-weighted assets for 2016, 1.25% for 2017, 1.875% for 2018, and 2.5% for 2019 and thereafter. This will result in the following minimum ratios beginning in 2019: (i) a common equity Tier 1 capital ratio of 7.0%, (ii) a Tier 1 capital ratio of 8.5%, and (iii) a total capital ratio of 10.5%. Under the final rules, institutions are subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations establish a maximum percentage of eligible retained income that could be utilized for such actions. As of March 31, 2016, our capital buffer would be 5.7%; exceeding the 2.5% 2019 requirement.

The final rules also contain revisions to the prompt corrective action framework, which is designed to place restrictions on insured depository institutions if their capital levels begin to show signs of weakness. Under the prompt corrective action requirements, which are designed to complement the capital conservation buffer, insured depository institutions are required to meet the following increased capital level requirements in order to qualify as “well capitalized:” (i) a new common equity Tier 1 capital ratio of 6.5%; (ii) a Tier 1 capital ratio of 8% (increased from 6%); (iii) a total capital ratio of 10% (unchanged from previous rules); and (iv) a Tier 1 leverage ratio of 5% (unchanged from previous rules).

Dividend Program

On April 21, 2016, the Company's board of directors approved a quarterly common dividend of $0.10 per share payable on May 25, 2016, to shareholders of record as of May 11, 2016.

Share Repurchases

The Company’s Board of Directors has authorized stock repurchases of up to $400.0 million. Stock repurchases may be made from time to time, on the open market or in privately negotiated transactions. The approved stock repurchase program does not obligate the Company to repurchase any particular amount of shares, and the program may be extended, modified, suspended, or discontinued at any time.

During the three months ended March 31, 2016, the Company repurchased $4.4 million, or 148,300 common shares at an average price of $29.61. As of March 31, 2016, the Company has repurchased a total of $298.6 million, or 12,344,660 common shares at an average price of $24.19 per share with $101.4 million remaining under the current board authorized stock repurchase program.

The Company accounts for treasury stock using the cost method as a reduction of shareholders’ equity in the accompanying Consolidated Balance Sheets and Statements of Changes in Shareholders’ Equity.