STOCKHOLDERS' EQUITY

Minimum regulatory capital requirements

The Company (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. 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 effect on the Company’s and the Bank’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Federal banking regulations include minimum capital ratios as displayed in the following table. Additionally, community banking institutions must maintain a capital conservation buffer of common equity Tier 1 capital in an amount greater than 2.5% of total risk-weighted assets to avoid being subject to limitations on capital distributions and discretionary bonuses. The capital conservation buffer is being phased in over multiple years, with an initial phase-in of 0.625%. Beginning on January 1, 2018, the capital conservation buffer is 1.875%. Also, certain deductions from and adjustments to regulatory capital are being phased in over several years. Management believes that the Company will remain characterized as “well capitalized” throughout the phase-in periods. The application of the capital conservation buffer resulted in no limitations to payout of retained earnings as of March 31, 2018.

As of March 31, 2018, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed the Bank's category. Management believes, as of March 31, 2018 and December 31, 2017, that the Company and the Bank meet all capital adequacy requirements to which they are subject. The Company's and the Bank's actual capital amounts and ratios as of March 31, 2018 and December 31, 2017 are also presented in the following table.



	Actual				Minimum Capital Requirement				Minimum To Be Well Capitalized
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
Blue Hills Bancorp, Inc.:
March 31, 2018
Total capital (to risk weighted assets)	$	408,223	19.4	%	$	167,942	8.0	%	$	209,928	10.0	%
Tier 1 capital (to risk weighted assets)	388,039		18.5		125,957		6.0		167,942		8.0
Common equity Tier 1 (to risk weighted assets)	388,039		18.5		94,468		4.5		136,453		6.5
Tier 1 capital (to average assets)	388,039		14.7		105,730		4.0		132,162		5.0
December 31, 2017
Total capital (to risk weighted assets)	$	410,088	19.7	%	$	166,635	8.0	%	$	208,294	10.0	%
Tier 1 capital (to risk weighted assets)	389,211		18.7		124,977		6.0		166,635		8.0
Common equity Tier 1 (to risk weighted assets)	389,211		18.7		93,732		4.5		135,391		6.5
Tier 1 capital (to average assets)	389,211		14.9		104,278		4.0		130,348		5.0
Blue Hills Bank:
March 31, 2018
Total capital (to risk weighted assets)	$	349,045	16.6	%	$	167,751	8.0	%	$	209,689	10.0	%
Tier 1 capital (to risk weighted assets)	328,860		15.7		125,813		6.0		167,751		8.0
Common equity Tier 1 (to risk weighted assets)	328,860		15.7		94,360		4.5		136,298		6.5
Tier 1 capital (to average assets)	328,860		12.5		105,603		4.0		132,004		5.0
December 31, 2017
Total capital (to risk weighted assets)	$	341,175	16.4	%	$	166,391	8.0	%	$	207,988	10.0	%
Tier 1 capital (to risk weighted assets)	320,298		15.4		124,793		6.0		166,391		8.0
Common equity Tier 1 (to risk weighted assets)	320,298		15.4		93,595		4.5		135,192		6.5
Tier 1 capital (to average assets)	320,298		12.3		104,137		4.0		130,171		5.0