Regulatory Matters

9 Months Ended

Sep. 30, 2014

Regulatory Matters Disclosure [Abstract]

Regulatory Matters

Regulatory Matters

Regulatory Capital Requirements. Banks and bank holding companies are subject to various regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. These quantitative measures, to ensure capital adequacy, require minimum amounts and ratios.

As defined in the regulations, the Total risk-based and Tier 1 capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. Risk-weighted assets are calculated based on regulatory requirements and include total assets, excluding goodwill and other intangible assets, allocated by risk-weight category, and certain off-balance sheet items, primarily loan commitments. As defined in the regulations, the Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by adjusted quarterly average total assets. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk-weighting, and other factors.

The following table provides information on the capital ratios for Webster Financial Corporation and Webster Bank, N.A.:

	Capital				Capital Requirements
	Actual				Minimum				Well Capitalized
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
At September 30, 2014
Webster Financial Corporation
Total risk-based capital	$	2,060,208	14.2	%	$	1,163,206	8.0	%	$	1,454,008	10.0	%
Tier 1 capital	1,898,704		13.1		581,603		4.0		872,405		6.0
Tier 1 leverage capital	1,898,704		9.0		840,727		4.0		1,050,909		5.0
Webster Bank, N.A.
Total risk-based capital	$	1,901,130	13.1	%	$	1,161,080	8.0	%	$	1,451,350	10.0	%
Tier 1 capital	1,739,626		12.0		580,540		4.0		870,810		6.0
Tier 1 leverage capital	1,739,626		8.3		839,728		4.0		1,049,660		5.0
At December 31, 2013
Webster Financial Corporation
Total risk-based capital	$	1,965,171	14.2	%	$	1,106,203	8.0	%	$	1,382,754	10.0	%
Tier 1 capital	1,807,642		13.1		553,101		4.0		829,652		6.0
Tier 1 leverage capital	1,807,642		9.0		801,535		4.0		1,001,919		5.0
Webster Bank, N.A.
Total risk-based capital	$	1,815,423	13.2	%	$	1,104,200	8.0	%	$	1,380,250	10.0	%
Tier 1 capital	1,658,466		12.0		552,100		4.0		828,150		6.0
Tier 1 leverage capital	1,658,466		8.3		800,063		4.0		1,000,079		5.0

Webster is subject to regulatory capital requirements administered by the Federal Reserve, while Webster Bank is subject to regulatory capital requirements administered by the Office of the Comptroller of the Currency ("OCC"). Regulatory authorities can initiate certain mandatory actions if Webster or Webster Bank fail to meet minimum capital requirements, which could have a direct material effect on the Company’s financial statements.

Dividend Restrictions. In the ordinary course of business, Webster is dependent upon dividends from Webster Bank to provide funds for its cash requirements, including payments of dividends to shareholders. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of Webster Bank to fall below specified minimum levels, or if dividends declared exceed the net income for that year combined with the undistributed net income for the preceding two years. In addition, the OCC has discretion to prohibit any otherwise permitted capital distribution on general safety and soundness grounds. Dividends paid by Webster Bank to Webster totaled $80.0 million and $70.0 million during the nine months ended September 30, 2014 and 2013, respectively.

Trust Preferred Securities. The Company owns the common stock of a trust which has issued trust preferred securities. The trust is a VIE of which the Company is not the primary beneficiary and, therefore, is not consolidated. At September 30, 2014 and December 31, 2013, $75.0 million of trust preferred securities have been included in the Tier 1 capital of Webster for regulatory reporting purposes pursuant to the Federal Reserve's capital adequacy guidelines. Certain provisions of the Basel III capital framework require the Company to phase out trust preferred securities from Tier 1 capital beginning January 1, 2015. Excluding trust preferred securities from the Tier 1 capital will not affect Webster's ability to meet all capital adequacy requirements to which it is subject.