Stockholders’ Equity


(a)	Common Stock Repurchase

The Company repurchased no shares during the three and six months ended June 30, 2018 and 2017.


(b)	Regulatory Capital Requirements

The Company and WCF Financial Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements (as shown in the following table) can result in certain mandatory and possibly additional discretionary actions by regulators which, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and WCF Financial 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 Company’s and WCF Financial Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Management believes the Company and WCF Financial Bank met all capital adequacy requirements to which they were subject as of June 30, 2018 and December 31, 2017.

The Company’s and WCF Financial Bank’s capital amounts and ratios are presented in the following table as of June 30, 2018 and December 31, 2017 (dollars in thousands).



	June 30, 2018
					For capital adequacy				To be well-capitalized under
					with capital conservation				prompt corrective action
	Actual				buffer purposes				provisions
	Amount		Percent		Amount		Percent		Amount	Percent
Tangible capital:
Consolidated	$	28,802	22.16	%	$	5,197	4.00	%	N/A	N/A
WCF Financial Bank	19,575		15.97		4,902		4.00		6,127	5.00	%

Common equity tier 1:
Consolidated	28,802		53.29		7,471		6.38		8,446	6.50
WCF Financial Bank	19,575		38.82		7,046		6.38		7,965	6.50

Risk-based capital:
Consolidated	28,795		53.28		5,000		9.88		5,405	10.00
WCF Financial Bank	19,568		39.86		4,662		9.88		5,040	10.00

Tier 1 risk-based capital:
Consolidated	28,802		53.29		3,919		7.88		4,324	8.00
WCF Financial Bank	19,575		38.82		3,654		7.88		4,032	8.00



	December 31, 2017
									To be well-capitalized under
					For capital adequacy				prompt corrective action
	Actual				purposes				provisions
	Amount		Percent		Amount		Percent		Amount	Percent
Tangible capital:
Consolidated	$	28,657	23.40	%	$	4,897	4.00	%	N/A	N/A
WCF Financial Bank	19,117		16.50		4,637		4.00		5,796	5.00	%

Common equity tier 1:
Consolidated	28,657		50.20		3,283		5.75		3,712	6.50
WCF Financial Bank	19,117		34.50		3,191		5.75		3,607	6.50

Risk-based capital:
Consolidated	29,195		51.10		5,282		9.25		5,710	10.00
WCF Financial Bank	19,655		35.40		5,133		9.25		5,549	10.00

Tier 1 risk-based capital:
Consolidated	28,657		50.20		4,140		7.25		4,568	8.00
WCF Financial Bank	19,117		34.50		4,023		7.25		4,439	8.00

In July 2013, the Federal Reserve Board and the OCC issued final rules implementing the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act changes. The rules revised minimum capital requirements and adjusted prompt corrective action thresholds. The final rules revised the regulatory capital elements, added a new common equity Tier 1 capital ratio, increased the minimum Tier 1 capital ratio requirement, and implemented a new capital conservation buffer. The rules also permitted certain banking organizations to retain, through a one-time election, the existing treatment for AOCI. The Company and WCF Financial Bank made the election to retain the existing treatment, which excludes AOCI from regulatory capital amounts. The final rules took effect for the Company and WCF Financial Bank on January 1, 2015, subject to a transition period for certain parts of the rules.

Beginning in 2016, an additional capital conservation buffer was added to the minimum requirements for capital adequacy purposes, subject to a three year phase-in period. The capital conservation buffer will be fully phased-in on January 1, 2019 at 2.50%. A banking organization with a conservation buffer of less than 2.50% (or the required phase-in amount in years prior to 2019) will be subject to limitations on capital distributions, including dividend payments, and certain discretionary bonus payments to executive officers. As of June 30, 2018, the ratios for the Company and WCF Financial Bank were sufficient to meet the fully phased-in conservation buffer.


(c)	Dividends and Restrictions Thereon

The Company declared and paid a $0.05 dividend in the quarter ended June 30, 2018 and declared and paid a $0.05 in the quarter ended June 30, 2017.

Capital Distributions. Federal regulations govern capital distributions by a federal savings association, which include cash dividends, stock repurchases and other transactions charged to the savings association's capital account. A federal savings association must file an application with the Office of the Comptroller of the Currency for approval of a capital distribution if:


•	the total capital distributions for the applicable calendar year exceed the sum of the savings association's net income for that year to date plus the savings association's retained net income for the proceeding two years;


•	the savings association would not be at least adequately capitalized following the distribution;


•	the distribution would violate any applicable statute, regulation, agreement or regulatory condition; or


•	the savings association is not eligible for expedited treatment of its filings.

Even if an application is not otherwise required, every savings association that is a subsidiary of a savings and loan holding company, such as WCF Financial Bank, must file a notice with the Federal Reserve Board at least 30 days before the board of directors declares a dividend.

An application or notice related to a capital distribution may be disapproved if:


•	the federal savings association would be undercapitalized following the distribution;


•	the proposed capital distribution raises safety and soundness concerns; or


•	the capital distribution would violate a prohibition contained in any statute, regulation or agreement.

In addition, the Federal Deposit Insurance Act provides that an insured depository institution shall not make any capital distribution if, after making such distribution, the institution would fail to meet any applicable regulatory capital requirement.