Annual report pursuant to Section 13 and 15(d)

REGULATORY MATTERS AND CAPITAL

v3.3.1.900
REGULATORY MATTERS AND CAPITAL
 12 Months Ended
Dec. 31, 2015
REGULATORY MATTERS AND CAPITAL [Abstract]  
REGULATORY MATTERS AND CAPITAL

12.REGULATORY MATTERS AND CAPITAL

 

Capital resources represent funds, earned or obtained, over which financial institutions can exercise greater or longer control in comparison with deposits and borrowed funds.  Management seeks to maintain a capital structure that will assure an adequate level of capital to support anticipated asset growth and to absorb potential losses, yet allow management to effectively leverage its capital to maximize return to shareholders.  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 financial statements of the Company and the Bank.  Under capital adequacy guidelines and the regulatory framework for PCA, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.  PCA provisions are not applicable to financial holding companies and bank holding companies, but only to their bank subsidiaries. 

As of December 31, 2015, the most recent notification from the Federal Reserve Bank categorized the Bank as “well capitalized” under the regulatory framework for PCA.  To be categorized as “well-capitalized,” an institution must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and common equity Tier 1 ratios as set forth in the following tables.  There are no conditions or events since that notification that management believes have changed the Bank’s category.

The Company and the Bank’s capital amounts and ratios are also presented in the following table at December 31, 2015 and 2014 (dollars in thousands): 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Actual

 

Required for Capital Adequacy Purposes

 

Required in Order to Be Well Capitalized Under PCA

 

 

Amount

 

Ratio

 

 

Amount

 

Ratio

 

 

Amount

 

Ratio

As of December 31, 2015

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Common equity Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

$

 691,195 

 

 10.55% 

 

$

 294,823 

 

 4.50% 

 

$

         NA

 

NA

Union Bank & Trust

 

 751,992 

 

 11.52% 

 

 

 293,747 

 

 4.50% 

 

 

 424,301 

 

 6.50% 

Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 781,695 

 

 11.93% 

 

 

 393,141 

 

 6.00% 

 

 

        NA

 

NA

Union Bank & Trust

 

 751,992 

 

 11.52% 

 

 

 391,663 

 

 6.00% 

 

 

 522,217 

 

 8.00% 

Total capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 816,041 

 

 12.46% 

 

 

 523,943 

 

 8.00% 

 

 

        NA

 

NA

Union Bank & Trust

 

 786,339 

 

 12.05% 

 

 

 522,051 

 

 8.00% 

 

 

 652,563 

 

 10.00% 

Tier 1 capital to average adjusted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 781,695 

 

 10.68% 

 

 

 292,770 

 

 4.00% 

 

 

         NA

 

NA

Union Bank & Trust

 

 751,992 

 

 10.31% 

 

 

 291,752 

 

 4.00% 

 

 

 364,691 

 

 5.00% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of December 31, 2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier 1 capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

$

 734,755 

 

 12.76% 

 

$

 230,331 

 

 4.00% 

 

$

        NA

 

NA

Union Bank & Trust

 

 708,453 

 

 12.36% 

 

 

 229,273 

 

 4.00% 

 

 

 343,909 

 

 6.00% 

Total capital to risk weighted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 770,585 

 

 13.38% 

 

 

 460,738 

 

 8.00% 

 

 

        NA

 

NA

Union Bank & Trust

 

 744,269 

 

 12.98% 

 

 

 458,717 

 

 8.00% 

 

 

 573,397 

 

 10.00% 

Tier 1 capital to average adjusted assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consolidated

 

 734,755 

 

 10.62% 

 

 

 276,744 

 

 4.00% 

 

 

         NA

 

NA

Union Bank & Trust

 

 708,453 

 

 10.29% 

 

 

 275,395 

 

 4.00% 

 

 

 344,243 

 

 5.00% 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In July 2013, the FRB issued a final rule that makes technical changes to its market risk capital rules to align them with the Basel III regulatory capital framework and meet certain requirements of the Dodd-Frank Act. The phase-in period for the final rules began on January 1, 2015, with full compliance with the final rules to be phased in by January 1, 2019.  Refer to “Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations,” section “Capital Resources” in this Form 10-K for additional information.

 

On January 30, 2014, the Company’s Board of Directors authorized a share repurchase program to purchase up to $65.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions. The repurchase program was authorized through December 31, 2015.  On October 29, 2015, the Company’s Board of Directors authorized a new share repurchase program to purchase up to $25.0 million worth of the Company’s common stock on the open market or in privately negotiated transactions.  The repurchase program is authorized through December 31, 2016.  The new stock repurchase authorization was in addition to the existing stock repurchase program approved by the Board of Directors on January 30, 2014.  All shares were repurchased under the program authorized on January 30, 2014 prior to repurchasing shares under the program authorized on October 29, 2015. At December 31, 2015, approximately $21.1 million remained available under the current repurchase program.