XML 31 R17.htm IDEA: XBRL DOCUMENT v3.3.1.900
Regulatory Capital
 12 Months Ended
Dec. 31, 2015
Banking and Thrift [Abstract]  
Regulatory Capital
Regulatory Capital
The Company and Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.
Qualitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of common equity tier 1 ("CET1"), tier 1 capital, total regulatory capital and tier 1 leverage. As of January 1, 2015, the requirements are:
•
4.5% based upon CET1 capital
•
6.0% based upon tier 1 capital
•
8.0% based on total regulatory capital
•
Leverage ratio of tier 1 Capital assets equal to 4.0%
The following table summarizes the Company’s and Bank capital ratios:
 
December 31, 2015
 
December 31, 2014
 
Ratio
 
To be Adequately Capitalized
 
To be Well Capitalized
 
Ratio
 
To be Adequately Capitalized
 
To be Well Capitalized
Common equity tier 1 ratio (1)
 
 
 
 
 
 
 
 
 
 
 
Anchor Bancorp
18.66
%
 
4.50
%
 
N/A

 
N/A

 
N/A

 
N/A

AnchorBank, fsb
17.04
%
 
4.50
%
 
6.50
%
 
N/A

 
N/A

 
N/A

Tier 1 capital ratio (2)
 
 
 
 
 
 
 
 
 
 
 
Anchor Bancorp
18.66
%
 
6.00
%
 
N/A

 
N/A

 
N/A

 
N/A

AnchorBank, fsb
17.04
%
 
6.00
%
 
8.00
%
 
16.97
%
 
4.00
%
 
6.00
%
Total capital ratio (3)
 
 
 
 
 
 
 
 
 
 
 
Anchor Bancorp
19.95
%
 
8.00
%
 
N/A

 
N/A

 
N/A

 
N/A

AnchorBank, fsb
18.33
%
 
8.00
%
 
10.00
%
 
18.25
%
 
8.00
%
 
10.00
%
Tier 1 leverage ratio (4)
 
 
 
 
 
 
 
 
 
 
 
Anchor Bancorp
13.52
%
 
4.00
%
 
N/A

 
N/A

 
N/A

 
N/A

AnchorBank, fsb
12.35
%
 
4.00
%
 
5.00
%
 
10.43
%
 
4.00
%
 
5.00
%

(1)
CET1 capital divided by total risk-weighted assets
(2)
Tier 1 capital divided by total risk-weighted assets
(3)
Total risk-based capital divided by total risk-weighted assets
(4)
Tier 1 capital divided by adjusted average total assets
The following table reconciles the Bank's stockholders' equity to regulatory capital:
 
December 31, 2015
 
December 31, 2014
 
(In thousands)
Stockholders’ equity of the Bank
$
336,194

 
$
216,030

Less: disallowed servicing assets
—

 
(1,773
)
Disallowed deferred tax assets
(69,254
)
 
—

Accumulated other comprehensive loss
3,250

 
2,402

Common equity tier 1 capital
270,190

 
N/A

Additional tier 1 capital
—

 
N/A

Tier 1 capital
270,190

 
216,659

Plus: allowable allowance for loan losses
20,426

 
16,373

Total risk-based capital
$
290,616

 
$
233,032


Prior to January 1, 2015, the Company as a Savings & Loan Holding Company ("SLHC") was not subject to calculating regulatory capital ratios, as required under the Basel III Capital Rules. For December 31, 2014, regulatory capital ratios were calculated under Basel I rules.
In July 2013, the federal banking agencies published final rules (the “Basel III Capital Rules”) that revised their risk-based and leverage capital requirements and their method for calculating risk-weighted assets to implement, in part, agreements reached by the Basel Committee and certain provisions of the Dodd-Frank Act. The Basel III Capital Rules apply to banking organizations, including the Company and the Bank.
Among other things, the Basel III Capital Rules: (i) introduce a new capital measure entitled CET1; (ii) specify that tier 1 capital consist of CET1 and additional financial instruments satisfying specified requirements that permit inclusion in tier 1 capital; (iii) define CET1 narrowly by requiring that most deductions or adjustments to regulatory capital measures be made to CET1 and not to the other components of capital; and (iv) expand the scope of the deductions or adjustments from capital as compared to the existing regulations.
A minimum leverage ratio (tier 1 capital as a percentage of adjusted average total assets) of 4.0% is also required under the Basel III Capital Rules (even for highly rated institutions). The Basel III Capital Rules additionally require institutions to retain a capital conservation buffer of 2.5% above these required minimum capital ratio levels. Banking organizations that fail to maintain the minimum 2.5% capital conservation buffer could face restrictions on capital distributions or discretionary bonus payments to executive officers.
The Basel III Capital Rules became effective as applied to the Company and the Bank on January 1, 2015, with a phase in period that generally extends from January 1, 2015 through January 1, 2019.