REGULATORY MATTERS

9 Months Ended

Sep. 30, 2018

Banking and Thrift [Abstract]

REGULATORY MATTERS

REGULATORY MATTERS

As a bank holding company, the Company is subject to regulation and supervision by the FRB. The primary subsidiaries of the Company are its two insured depository institutions CBNA, a national banking association whose primary federal regulator is the OCC, and CBPA, a Pennsylvania-chartered savings bank regulated by the Department of Banking of the Commonwealth of Pennsylvania and supervised by the FDIC, its primary federal regulator. Under the U.S. Basel III capital framework, the Company and its banking subsidiaries must meet specific minimum requirements for the following ratios: common equity tier 1 capital, tier 1 capital, total capital, and tier 1 leverage. In addition, the Company must not be subject to a written agreement, order or capital directive with any of its regulators. Failure to meet minimum capital requirements can result in the initiation of certain actions that, if undertaken, could have a material effect on the Company’s Consolidated Financial Statements.

The following table presents the Company’s capital and capital ratios under U.S. Basel III Standardized rules. The Company has declared itself as an “AOCI opt-out” institution, which means the Company is not required to recognize in regulatory capital the impacts of net unrealized gains and losses included within AOCI for securities that are available for sale or held to maturity, accumulated net gains and losses on cash-flow hedges, and certain defined benefit pension plan assets.

	Actual				Minimum Capital Adequacy
(in millions, except ratio data)	Amount		Ratio		Amount		Ratio(5)
September 30, 2018
Common equity tier 1 capital(1)		$14,435	10.8	%		$8,495	6.375	%
Tier 1 capital(2)	14,978		11.2		10,493		7.875
Total capital(3)	17,810		13.4		13,158		9.875
Tier 1 leverage(4)	14,978		9.9		6,029		4.000
December 31, 2017
Common equity tier 1 capital(1)		$14,309	11.2	%		$7,342	5.750	%
Tier 1 capital(2)	14,556		11.4		9,258		7.250
Total capital(3)	17,781		13.9		11,812		9.250
Tier 1 leverage(4)	14,556		10.0		5,824		4.000

⁽¹⁾ “Common equity tier 1 capital ratio” represents CET1 capital divided by total risk-weighted assets as defined under U.S. Basel III Standardized approach.

⁽²⁾ “Tier 1 capital ratio” is tier 1 capital, which includes CET1 capital plus non-cumulative perpetual preferred equity that qualifies as additional tier 1 capital, divided by total risk-weighted assets as defined under U.S. Basel III Standardized approach.

⁽³⁾ “Total capital ratio” is total capital divided by total risk-weighted assets as defined under U.S. Basel III Standardized approach.

⁽⁴⁾ “Tier 1 leverage ratio” is tier 1 capital divided by quarterly average total assets as defined under U.S. Basel III Standardized approach.

⁽⁵⁾ “Minimum Capital ratio” includes capital conservation buffer of 1.875% for 2018 and 1.250% for 2017; N/A to Tier 1 leverage.

Under the FRB’s Capital Plan Rule, the Company may only make capital distributions, including payment of dividends and share repurchases, in accordance with a capital plan that has been reviewed by the FRB with no objection. In accordance with federal and state banking regulations, dividends paid by the Company’s banking subsidiaries to the Parent Company are generally limited to the retained earnings of the respective banking subsidiaries unless specifically approved by the appropriate bank regulator.

On April 5, 2018, the Company submitted its 2018 Capital Plan, Capital Policy and annual stress test results to the FRB as part of the 2018 CCAR process. On June 28, 2018, the FRB did not object to the Company’s 2018 Capital Plan including its proposed capital actions in the period beginning July 1, 2018 and ending June 30, 2019. The Company’s 2018 Capital Plan includes an increase in quarterly common dividends from $0.22 to $0.27 per share in the third quarter of 2018, with the potential to raise quarterly common dividends to $0.32 per share beginning in 2019, and common share repurchases of up to $1.02 billion through the second quarter of 2019. All future capital distributions are subject to consideration and approval by the Board of Directors prior to execution. The timing and exact amount of future dividends and share repurchases will depend on various factors, including the Company’s capital position, financial performance and market conditions.

During the three months ended September 30, 2018 and 2017, the Company declared and paid dividends on common stock of $129 million and $90 million, respectively, and declared semi-annual preferred dividends of $7 million for both periods. During the nine months ended September 30, 2018 and 2017, the Company declared and paid dividends on common stock of $344 million and $233 million, respectively, and declared semi-annual preferred dividends of $14 million for both periods.

During the three months ended September 30, 2018 and 2017, theParent Company repurchased $400 million and $225 million of its outstanding common stock, respectively. During the nine months ended September 30, 2018 and 2017, the Parent Company repurchased $725 million and $485 million of its outstanding common stock, respectively.