(a) Capital conservation and countercyclical capital buffer. (1) From January 1, 2014, through December 31, 2015, an FDIC-supervised institution is not subject to limits on distributions and discretionary bonus payments under Sec. 324.11 notwithstanding the amount of its capital conservation buffer or any applicable countercyclical capital buffer amount.
(1) From January 1, 2014, through December 31, 2015, an FDIC-supervised institution is not subject to limits on distributions and discretionary bonus payments under Sec. 324.11 notwithstanding the amount of its capital conservation buffer or any applicable countercyclical capital buffer amount.
(2) Beginning January 1, 2016, through December 31, 2018, an FDIC-supervised institution's maximum payout ratio shall be determined as set forth in Table 1 to Sec. 324.300.
Table 1 to Sec. 324.300----------------------------------------------------------------------------------------------------------------
Maximum payout ratio (as a
Transition period Capital conservation buffer percentage of eligible
retained income)----------------------------------------------------------------------------------------------------------------Calendar year 2016...................... Greater than 0.625 percent (plus 25 No payout ratio limitation
percent of any applicable countercyclical applies under this
capital buffer amount). section.
Less than or equal to 0.625 percent (plus 60 percent.
25 percent of any applicable
countercyclical capital buffer amount),
and greater than 0.469 percent (plus
17.25 percent of any applicable
countercyclical capital buffer amount).
Less than or equal to 0.469 percent (plus 40 percent.
17.25 percent of any applicable
countercyclical capital buffer amount),
and greater than 0.313 percent (plus 12.5
percent of any applicable countercyclical
capital buffer amount).
Less than or equal to 0.313 percent (plus 20 percent.
12.5 percent of any applicable
countercyclical capital buffer amount),
and greater than 0.156 percent (plus 6.25
percent of any applicable countercyclical
capital buffer amount).
Less than or equal to 0.156 percent (plus 0 percent.
6.25 percent of any applicable
countercyclical capital buffer amount).Calendar year 2017...................... Greater than 1.25 percent (plus 50 percent No payout ratio limitation
of any applicable countercyclical capital applies under this
buffer amount). section.
Less than or equal to 1.25 percent (plus 60 percent.
50 percent of any applicable
countercyclical capital buffer amount),
and greater than 0.938 percent (plus 37.5
percent of any applicable countercyclical
capital buffer amount).
Less than or equal to 0.938 percent (plus 40 percent.
37.5 percent of any applicable
countercyclical capital buffer amount),
and greater than 0.625 percent (plus 25
percent of any applicable countercyclical
capital buffer amount).
Less than or equal to 0.625 percent (plus 20 percent.
25 percent of any applicable
countercyclical capital buffer amount),
and greater than 0.313 percent (plus 12.5
percent of any applicable countercyclical
capital buffer amount).
Less than or equal to 0.313 percent (plus 0 percent.
12.5 percent of any applicable
countercyclical capital buffer amount).Calendar year 2018...................... Greater than 1.875 percent (plus 75 No payout ratio limitation
percent of any applicable countercyclical applies under this
capital buffer amount). section.
Less than or equal to 1.875 percent (plus 60 percent.
75 percent of any applicable
countercyclical capital buffer amount),
and greater than 1.406 percent (plus
56.25 percent of any applicable
countercyclical capital buffer amount).
Less than or equal to 1.406 percent (plus 40 percent.
56.25 percent of any applicable
countercyclical capital buffer amount),
and greater than 0.938 percent (plus 37.5
percent of any applicable countercyclical
capital buffer amount).
Less than or equal to 0.938 percent (plus 20 percent.
37.5 percent of any applicable
countercyclical capital buffer amount),
and greater than 0.469 percent (plus
18.75 percent of any applicable
countercyclical capital buffer amount).
Less than or equal to 0.469 percent (plus 0 percent.
18.75 percent of any applicable
countercyclical capital buffer amount).----------------------------------------------------------------------------------------------------------------
(b) Regulatory capital adjustments and deductions. Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution must make the capital adjustments and deductions in Sec. 324.22 in accordance with the transition requirements in this paragraph (b). Beginning January 1, 2018, an FDIC-supervised institution must make all regulatory capital adjustments and deductions in accordance with Sec. 324.22.
(1) Transition deductions from common equity tier 1 capital. Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution, must make the deductions required under Sec. 324.22(a)(1)--(7) from common equity tier 1 or tier 1 capital elements in accordance with the percentages set forth in Tables 2 and 3 to Sec. 324.300.
(i) An FDIC-supervised institution must deduct the following items from common equity tier 1 and additional tier 1 capital in accordance with the percentages set forth in Table 2 to Sec. 324.300: Goodwill (Sec. 324.22(a)(1)), DTAs that arise from net operating loss and tax credit carryforwards (Sec. 324.22(a)(3)), a gain-on-sale in connection with a securitization exposure (Sec. 324.22(a)(4)), defined benefit pension fund assets (Sec. 324.22(a)(5)), expected credit loss that exceeds eligible credit reserves (for advanced approaches FDIC-supervised institutions that have completed the parallel run process and that have received notifications from the FDIC pursuant to Sec. 324.121(d) of subpart E) (Sec. 324.22(a)(6)), and financial subsidiaries (Sec. 324.22(a)(7)).
Table 2 to Sec. 324.300----------------------------------------------------------------------------------------------------------------
Transition deductions Transition deductions under Sec.
under Sec. 324.22(a)(3)-(6)
324.22(a)(1), (a)(7), ---------------------------------------------
(a)(8), and (a)(9)
(8), and (a)(9)
Transition period ----------------------- Percentage of the Percentage of the
Percentage of the deductions from deductions from tier
deductions from common equity tier 1 1 capital
common equity tier 1 capital
capital----------------------------------------------------------------------------------------------------------------Calendar year 2014......................... 100 20 80Calendar year 2015......................... 100 40 60Calendar year 2016......................... 100 60 40Calendar year 2017......................... 100 80 20Calendar year 2018, and thereafter......... 100 100 0----------------------------------------------------------------------------------------------------------------
(ii) An FDIC-supervised institution must deduct from common equity tier 1 capital any intangible assets other than goodwill and MSAs in accordance with the percentages set forth in Table 3 to Sec. 324.300.
(iii) An FDIC-supervised institution must apply a 100 percent risk-weight to the aggregate amount of intangible assets other than goodwill and MSAs that are not required to be deducted from common equity tier 1 capital under this section.
Table 3 to Sec. 324.300------------------------------------------------------------------------
Transition deductions under Sec.
324.22(a)(2)--Percentage of the deductions
Transition period from common equity tier 1 capital
------------------------------------------------------------------------Calendar year 2014.......... 20Calendar year 2015.......... 40Calendar year 2016.......... 60Calendar year 2017.......... 80Calendar year 2018, and 100
thereafter.................------------------------------------------------------------------------
(2) Transition adjustments to common equity tier 1 capital. Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution, must allocate the regulatory adjustments related to changes in the fair value of liabilities due to changes in the FDIC-supervised institution's own credit risk (Sec. 324.22(b)(1)(iii)) between common equity tier 1 capital and tier 1 capital in accordance with the percentages set forth in Table 4 to Sec. 324.300.
(i) If the aggregate amount of the adjustment is positive, the FDIC-supervised institution must allocate the deduction between common equity tier 1 and tier 1 capital in accordance with Table 4 to Sec. 324.300.
(ii) If the aggregate amount of the adjustment is negative, the FDIC-supervised institution must add back the adjustment to common equity tier 1 capital or to tier 1 capital, in accordance with Table 4 to Sec. 324.300.
Table 4 to Sec. 324.300--------------------------------------------------------------------------------------------------------------------------------------------------------
Transition adjustments under Sec. 324.22(b)(2)
-------------------------------------------------------------------------------------
Transition period Percentage of the adjustment applied to Percentage of the adjustment applied to
common equity tier 1 capital tier 1 capital--------------------------------------------------------------------------------------------------------------------------------------------------------Calendar year 2014................................................ 20 80Calendar year 2015................................................ 40 60Calendar year 2016................................................ 60 40Calendar year 2017................................................ 80 20Calendar year 2018, and thereafter................................ 100 0--------------------------------------------------------------------------------------------------------------------------------------------------------
(3) Transition adjustments to AOCI for an advanced approaches FDIC-supervised institution and an FDIC-supervised institution that has not made an AOCI opt-out election under Sec. 324.22(b)(2). Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution and that has not made an AOCI opt-out election under Sec. 324.22(b)(2), and in each case through December 31, 2017, an FDIC-supervised institution must adjust common equity tier 1 capital with respect to the transition AOCI adjustment amount (transition AOCI adjustment amount):
(i) The transition AOCI adjustment amount is the aggregate amount of an FDIC-supervised institution's:
(A) Unrealized gains on available-for-sale securities that are preferred stock classified as an equity security under GAAP or available-for-sale equity exposures, plus
(B) Net unrealized gains or losses on available-for-sale securities that are not preferred stock classified as an equity security under GAAP or available-for-sale equity exposures, plus
(C) Any amounts recorded in AOCI attributed to defined benefit postretirement plans resulting from the initial and subsequent application of the relevant GAAP standards that pertain to such plans (excluding, at the FDIC-supervised institution's option, the portion relating to pension assets deducted under Sec. 324.22(a)(5)), plus
(D) Accumulated net gains or losses on cash flow hedges related to items that are reported on the balance sheet at fair value included in AOCI, plus
(E) Net unrealized gains or losses on held-to-maturity securities that are included in AOCI.
(ii) An FDIC-supervised institution must make the following adjustment to its common equity tier 1 capital:
(A) If the transition AOCI adjustment amount is positive, the appropriate amount must be deducted from common equity tier 1 capital in accordance with Table 5 to Sec. 324.300.
(B) If the transition AOCI adjustment amount is negative, the appropriate amount must be added back to common equity tier 1 capital in accordance with Table 5 to Sec. 324.300.
Table 5 to Sec. 324.300------------------------------------------------------------------------
Percentage of the transition AOCI
Transition period adjustment amount to be applied to common
equity tier 1 capital------------------------------------------------------------------------Calendar year 2014.......... 80Calendar year 2015.......... 60Calendar year 2016.......... 40Calendar year 2017.......... 20Calendar year 2018 and 0
thereafter.................------------------------------------------------------------------------
(iii) An FDIC-supervised institution may include in tier 2 capital the percentage of unrealized gains on available-for-sale preferred stock classified as an equity security under GAAP and available-for-sale equity exposures as set forth in Table 6 to Sec. 324.300.
Table 6 to Sec. 324.300------------------------------------------------------------------------
Percentage of unrealized gains on
available-for-sale preferred stock
classified as an equity security under
Transition period GAAP and available-for-sale equity
exposures that may be included in tier 2
capital------------------------------------------------------------------------Calendar year 2014.......... 36Calendar year 2015.......... 27Calendar year 2016.......... 18Calendar year 2017.......... 9Calendar year 2018 and 0
thereafter.................------------------------------------------------------------------------
(4) Additional transition deductions from regulatory capital. (i) Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution must use Table 7 to Sec. 324.300 to determine the amount of investments in capital instruments and the items subject to the 10 and 15 percent common equity tier 1 capital deduction thresholds (Sec. 324.22(d)) (that is, MSAs, DTAs arising from temporary differences that the FDIC-supervised institution could not realize through net operating loss carrybacks, and significant investments in the capital of unconsolidated financial institutions in the form of common stock) that must be deducted from common equity tier 1 capital.
(i) Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution must use Table 7 to Sec. 324.300 to determine the amount of investments in capital instruments and the items subject to the 10 and 15 percent common equity tier 1 capital deduction thresholds (Sec. 324.22(d)) (that is, MSAs, DTAs arising from temporary differences that the FDIC-supervised institution could not realize through net operating loss carrybacks, and significant investments in the capital of unconsolidated financial institutions in the form of common stock) that must be deducted from common equity tier 1 capital.
(ii) Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution must apply a 100 percent risk-weight to the aggregate amount of the items subject to the 10 and 15 percent common equity tier 1 capital deduction thresholds that are not deducted under this section. As set forth in Sec. 324.22(d)(2), beginning January 1, 2018, an FDIC-supervised institution must apply a 250 percent risk-weight to the aggregate amount of the items subject to the 10 and 15 percent common equity tier 1 capital deduction thresholds that are not deducted from common equity tier 1 capital.
Table 7 to Sec. 324.300------------------------------------------------------------------------
Transitions for deductions under Sec.
324.22(c) and (d)--Percentage of
Transition period additional deductions from regulatory
capital------------------------------------------------------------------------Calendar year 2014.......... 20Calendar year 2015.......... 40Calendar year 2016.......... 60Calendar year 2017.......... 80Calendar year 2018 and 100
thereafter.................------------------------------------------------------------------------
(iii) For purposes of calculating the transition deductions in this paragraph (b)(4), beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution's 15 percent common equity tier 1 capital deduction threshold for MSAs, DTAs arising from temporary differences that the FDIC-supervised institution could not realize through net operating loss carrybacks, and significant investments in the capital of unconsolidated financial institutions in the form of common stock is equal to 15 percent of the sum of the FDIC-supervised institution's common equity tier 1 elements, after regulatory adjustments and deductions required under Sec. 324.22(a) through (c) (transition 15 percent common equity tier 1 capital deduction threshold).
(iv) Beginning January 1, 2018, an FDIC-supervised institution must calculate the 15 percent common equity tier 1 capital deduction threshold in accordance with Sec. 324.22(d).
(c) Non-qualifying capital instruments. Depository institutions. (1) Beginning on January 1, 2014, a depository institution that is an advanced approaches FDIC-supervised institution, and beginning on January 1, 2015, all other depository institutions may include in regulatory capital debt or equity instruments issued prior to September 12, 2010, that do not meet the criteria for additional tier 1 or tier 2 capital instruments in Sec. 324.20 but that were included in tier 1 or tier 2 capital respectively as of September 12, 2010 (non-qualifying capital instruments issued prior to September 12, 2010) up to the percentage of the outstanding principal amount of such non-qualifying capital instruments as of January 1, 2014 in accordance with Table 8 to Sec. 324.300.
(1) Beginning on January 1, 2014, a depository institution that is an advanced approaches FDIC-supervised institution, and beginning on January 1, 2015, all other depository institutions may include in regulatory capital debt or equity instruments issued prior to September 12, 2010, that do not meet the criteria for additional tier 1 or tier 2 capital instruments in Sec. 324.20 but that were included in tier 1 or tier 2 capital respectively as of September 12, 2010 (non-qualifying capital instruments issued prior to September 12, 2010) up to the percentage of the outstanding principal amount of such non-qualifying capital instruments as of January 1, 2014 in accordance with Table 8 to Sec. 324.300.
(2) Table 8 to Sec. 324.300 applies separately to tier 1 and tier 2 non-qualifying capital instruments.
(3) The amount of non-qualifying capital instruments that cannot be included in additional tier 1 capital under this section may be included in tier 2 capital without limitation, provided that the instruments meet the criteria for tier 2 capital instruments under Sec. 324.20(d).
Table 8 to Sec. 324.300------------------------------------------------------------------------
Percentage of non-qualifying capital
Transition period (calendar instruments includable in additional tier
year) 1 or tier 2 capital------------------------------------------------------------------------Calendar year 2014.......... 80Calendar year 2015.......... 70Calendar year 2016.......... 60Calendar year 2017.......... 50Calendar year 2018.......... 40Calendar year 2019.......... 30Calendar year 2020.......... 20Calendar year 2021.......... 10Calendar year 2022 and 0
thereafter.................------------------------------------------------------------------------
(d) Minority interest--(1) Surplus minority interest. Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution may include in common equity tier 1 capital, tier 1 capital, or total capital the percentage of the common equity tier 1 minority interest, tier 1 minority interest and total capital minority interest outstanding as of January 1, 2014 that exceeds any common equity tier 1 minority interest, tier 1 minority interest or total capital minority interest includable under Sec. 324.21 (surplus minority interest), respectively, as set forth in Table 9 to Sec. 324.300.
(1) Surplus minority interest. Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution may include in common equity tier 1 capital, tier 1 capital, or total capital the percentage of the common equity tier 1 minority interest, tier 1 minority interest and total capital minority interest outstanding as of January 1, 2014 that exceeds any common equity tier 1 minority interest, tier 1 minority interest or total capital minority interest includable under Sec. 324.21 (surplus minority interest), respectively, as set forth in Table 9 to Sec. 324.300.
(2) Non-qualifying minority interest. Beginning January 1, 2014, for an advanced approaches FDIC-supervised institution, and beginning January 1, 2015, for an FDIC-supervised institution that is not an advanced approaches FDIC-supervised institution, and in each case through December 31, 2017, an FDIC-supervised institution may include in tier 1 capital or total capital the percentage of the tier 1 minority interest and total capital minority interest outstanding as of January 1, 2014 that does not meet the criteria for additional tier 1 or tier 2 capital instruments in Sec. 324.20 (non-qualifying minority interest), as set forth in Table 9 to Sec. 324.300.
Table 9 to Sec. 324.300------------------------------------------------------------------------
Percentage of the amount of surplus or non-
qualifying minority interest that can be
Transition period included in regulatory capital during the
transition period------------------------------------------------------------------------Calendar year 2014.......... 80Calendar year 2015.......... 60Calendar year 2016.......... 40Calendar year 2017.......... 20Calendar year 2018 and 0
thereafter.................------------------------------------------------------------------------
(e) Prompt corrective action. For purposes of subpart H of this part, an FDIC-supervised institution must calculate its capital measures and tangible equity ratio in accordance with the transition provisions in this section. Sec. Sec. 324.301-324.399 [Reserved]