§ 390.453 - Capital measures and capital category definitions.  


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  • § 390.453 Capital measures and capital category definitions.

    (a) Capital measures. For purposes of section 38 and this subpart, the relevant capital measures shall be:

    (1) The total risk-based capital ratio;

    (2) The Tier 1 risk-based capital ratio; and

    (3) The leverage ratio.

    (b) Capital categories. For purposes of section 38 and this subpart, a State savings association shall be deemed to be:

    (1) Well capitalized if the State savings association:

    (i) Has a total risk-based capital ratio of 10.0 percent or greater; and

    (ii) Has a Tier 1 risk-based capital ratio of 6.0 percent or greater; and

    (iii) Has a leverage ratio of 5.0 percent or greater; and

    (iv) Is not subject to any written agreement, order, capital directive, or prompt corrective action directive issued by FDIC under section 8 of the FDI Act, the International Lending Supervision Act of 1983 (12 U.S.C. 3907), the Home Owners' Loan Act (12 U.S.C. 1464(t)(6)), or section 38 of the FDI Act, or any regulation thereunder, to meet and maintain a specific capital level for any capital measure.

    (2) Adequately capitalized if the State savings association:

    (i) Has a total risk-based capital ratio of 8.0 percent or greater; and

    (ii) Has a Tier 1 risk-based capital ratio of 4.0 percent or greater; and

    (iii) Has:

    (A) A leverage ratio of 4.0 percent or greater; or

    (B) A leverage ratio of 3.0 percent or greater if the State savings association is assigned a composite rating of 1, as composite rating is defined in § 390.101(c); and

    (iv) Does not meet the definition of a well capitalized State savings association.

    (3) Undercapitalized if the State savings association:

    (i) Has a total risk-based capital ratio that is less than 8.0 percent; or

    (ii) Has a Tier 1 risk-based capital ratio that is less than 4.0 percent; or

    (iii)

    (A) Except as provided in paragraph (b)(3)(iii)(B) of this section, has a leverage ratio that is less than 4.0 percent; or

    (B) Has a leverage ratio that is less than 3.0 percent if the State savings association is assigned a composite rating of 1, as composite rating is defined in § 390.101(c).

    (4) Significantly undercapitalized if the State savings association has:

    (i) A total risk-based capital ratio that is less than 6.0 percent; or

    (ii) A Tier 1 risk-based capital ratio that is less than 3.0 percent; or

    (iii) A leverage ratio that is less than 3.0 percent.

    (5) Critically undercapitalized if the State savings association has a ratio of tangible equity to total assets that is equal to or less than 2.0 percent.

    (c) Reclassification based on supervisory criteria other than capital. The FDIC may reclassify a well capitalized State savings association as adequately capitalized and may require an adequately capitalized or undercapitalized State savings association to comply with certain mandatory or discretionary supervisory actions as if the State savings association were in the next lower capital category (except that the FDIC may not reclassify a significantly undercapitalized State savings association as critically undercapitalized) (each of these actions are hereinafter referred to generally as “reclassifications”) in the following circumstances:

    (1) Unsafe or unsound condition. The FDIC has determined, after notice and opportunity for hearing pursuant to § 390.457(a), that the State savings association is in an unsafe or unsound condition; or

    (2) Unsafe or unsound practice. The FDIC has determined, after notice and an opportunity for hearing pursuant to § 390.457(a) that the State savings association received a less-than-satisfactory rating for any rating category (other than in a rating category specifically addressing capital adequacy) under the Uniform Financial Institutions Rating System,[1] or an equivalent rating under a comparable rating system adopted by the FDIC; and has not corrected the conditions that served as the basis for the less than satisfactory rating. Ratings under this paragraph (c)(2) refer to the most recent ratings (as determined either on-site or off-site by the most recent examination) of which the State savings association has been notified in writing.