Regulatory Capital

12 Months Ended

Dec. 31, 2016

Banking and Thrift [Abstract]

Regulatory Capital

Regulatory Capital

The Federal Reserve has adopted capital adequacy guidelines that are used to assess the adequacy of capital in supervising a bank holding company. The federal banking agencies implemented final rules (“Final Rules”) to establish a new comprehensive regulatory capital framework with a phase-in period beginning on January 1, 2015 and ending on January 1, 2019. The Final Rules implemented the third installment of the Basel Accords (“Basel III”) regulatory capital reforms and changes required by the Dodd-Frank Act and substantially amended the regulatory risk-based capital rules applicable to the Company. Under Basel III, the Company must hold a conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer for 2016 is 0.625%. In connection with the adoption of Basel III, the Company elected to opt-out of the requirement to include most components of accumulated other comprehensive income. As of December 31, 2016, management believes the Company and Bank meet all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide the following classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized. If undercapitalized, capital distributions (including payment of a dividend) are generally restricted, as is paying management fees to its bank holding company. Failure to meet minimum capital requirements set forth in the table below can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and Bank’s financial condition. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Note 11. Regulatory Capital (continued)

At December 31, 2016 and 2015, the most recent regulatory notifications categorized the Company and Bank as well capitalized under the regulatory framework for prompt corrective action. To be well capitalized, the Bank must maintain minimum total capital, Tier 1 capital, Common Tier 1 capital and Tier 1 Leverage ratios as set forth in the table below. There are no conditions or events since December 31, 2016 that management believes have changed the Company’s or Bank’s risk-based capital category.

The following tables illustrate the FRB’s adequacy guidelines and the Company’s and the Bank’s compliance with those guidelines:

	December 31, 2016
	Actual				Required for Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Regulations
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk-weighted assets)
Consolidated	$	1,179,673	16.38	%	$	576,092	8.00	%	N/A		N/A
Glacier Bank	1,131,949		15.76	%	574,658		8.00	%	$	718,323	10.00	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	1,089,142	15.12	%	$	432,069	6.00	%	N/A		N/A
Glacier Bank	1,041,640		14.50	%	430,994		6.00	%	$	574,658	8.00	%
Common Equity Tier 1 (to risk-weighted assets)
Consolidated	$	966,701	13.42	%	$	324,052	4.50	%	N/A		N/A
Glacier	1,041,640		14.50	%	323,245		4.50	%	$	466,910	6.50	%
Tier 1 capital (to average assets)
Consolidated	$	1,089,142	11.90	%	$	365,994	4.00	%	N/A		N/A
Glacier Bank	1,041,640		11.45	%	363,945		4.00	%	$	454,932	5.00	%

	December 31, 2015
	Actual				Required for Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Regulations
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total capital (to risk-weighted assets)
Consolidated	$	1,131,460	17.17	%	$	527,160	8.00	%	N/A		N/A
Glacier Bank	1,093,669		16.66	%	525,228		8.00	%	$	656,535	10.00	%
Tier 1 capital (to risk-weighted assets)
Consolidated	$	1,048,505	15.91	%	$	395,370	6.00	%	N/A		N/A
Glacier Bank	1,010,981		15.40	%	393,921		6.00	%	$	525,228	8.00	%
Common Equity Tier 1 (to risk-weighted assets)
Consolidated	$	926,523	14.06	%	$	296,528	4.50	%	N/A		N/A
Glacier	1,010,981		15.40	%	295,441		4.50	%	$	426,748	6.50	%
Tier 1 capital (to average assets)
Consolidated	$	1,048,505	12.01	%	$	349,066	4.00	%	N/A		N/A
Glacier Bank	1,010,981		11.66	%	346,715		4.00	%	$	433,394	5.00	%

__________

N/A - Not applicable

Current guidance from the Federal Reserve provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per share, measured over the previous four fiscal quarters. The Bank is also subject to Montana state law and cannot declare a dividend greater than the previous two years’ net earnings without providing notice to the state.