Regulatory Matters

12 Months Ended

Dec. 31, 2015

Regulatory Capital Requirements [Abstract]

Regulatory Matters

Regulatory Matters

Capital Requirements

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. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, both the Company and Webster Bank must meet specific capital guidelines that 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.

Basel III rules enhanced the comprehensive methodology for calculating risk-weighted assets which vary by asset class previously established under Basel I rules. Under Basel III, total risk-based capital is comprised of three categories: Common Equity Tier 1 capital ("CET1 capital"); additional Tier 1 capital; and Tier 2 capital. CET1 capital includes common shareholders' equity, less deductions for goodwill, other intangibles, and certain deferred tax losses. Webster's common shareholders' equity, for purposes of CET1, excludes accumulated other comprehensive components as permitted by the opt-out election taken by Webster upon adoption of Basel III. Tier 1 capital is comprised of CET1 capital plus perpetual preferred stock, while Tier 2 capital includes qualifying subordinated debt and qualifying allowance for credit losses, that together equal total capital. Basel III became effective on January 1, 2015 for non-advanced approach banks as defined, and all prior period data is based on Basel I rules.

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

	Actual (1)				Capital Requirements (1)
					Minimum				Well Capitalized
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
At December 31, 2015
Webster Financial Corporation
Common equity tier 1 risk-based capital	$	1,825,717	10.7	%	$	766,928	4.5	%	$	1,107,785	6.5	%
Total risk-based capital	2,201,928		12.9		1,363,427		8.0		1,704,284		10.0
Tier 1 risk-based capital	1,966,829		11.5		1,022,570		6.0		1,363,427		8.0
Tier 1 leverage capital	1,966,829		8.2		954,403		4.0		1,193,004		5.0
Webster Bank, N.A.
Common equity tier 1 risk-based capital	$	1,870,852	11.0	%	$	765,232	4.5	%	$	1,105,335	6.5	%
Total risk-based capital	2,047,961		12.0		1,360,412		8.0		1,700,515		10.0
Tier 1 risk-based capital	1,870,852		11.0		1,020,309		6.0		1,360,412		8.0
Tier 1 leverage capital	1,870,852		7.9		953,371		4.0		1,191,714		5.0
At December 31, 2014
Webster Financial Corporation
Total risk-based capital	$	2,096,772	14.1	%	$	1,192,651	8.0	%	$	1,490,814	10.0	%
Tier 1 risk-based capital	1,931,276		13.0		596,326		4.0		894,488		6.0
Tier 1 leverage capital	1,931,276		9.0		859,241		4.0		1,074,051		5.0
Webster Bank, N.A.
Total risk-based capital	$	1,939,229	13.0	%	$	1,190,242	8.0	%	$	1,487,803	10.0	%
Tier 1 risk-based capital	1,774,814		11.9		595,121		4.0		892,682		6.0
Tier 1 leverage capital	1,774,814		8.3		858,197		4.0		1,072,746		5.0

(1) Calculated under the Basel III capital standard at December 31, 2015 and under the Basel I capital standard at December 31, 2014.

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 $110 million and $100 million during the years ended December 31,2015 and 2014, respectively.

Cash Restrictions

Webster Bank is required by FRB regulations to hold cash reserve balances on hand or with the Federal Reserve Banks. Pursuant to this requirement, the Bank held $109.4 million and $38.3 million at December 31, 2015 and 2014, respectively.