CASH 2017 Annual Report

134 Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum ratios (set forth in the table below) of total risk-based capital and Tier 1 capital (as defined in the regulations) to risk- weighted assets (as defined), and a leverage ratio consisting of Tier 1 capital (as defined) to average assets (as defined). At September 30, 2017, both the Bank and the Company exceeded federal regulatory minimum capital requirements to be classified as well-capitalized under the prompt corrective action requirements. The Company and the Bank took the accumulated other comprehensive income (“AOCI”) opt-out election; under the rule, non-advanced approach banking organizations were given a one-time option to exclude certain AOCI components. The table below includes certain non-GAAP financial measures that are used by investors, analysts and bank regulatory agencies to assess the capital position of financial services companies. Management reviews these measures along with other measures of capital as part of its financial analyses and has included this non-GAAP financial information, and the corresponding reconciliation to total equity. Company Bank Minimum Requirement For Capital Adequacy Purposes Minimum Requirement To Be Well Capitalized Under Prompt Corrective Action Provisions September 30, 2017 Tier 1 leverage ratio 7.64% 9.64% 4.00% 5.00% Common equity Tier 1 capital ratio 13.97 18.22 4.50 6.50 Tier 1 capital ratio 14.46 18.22 6.00 8.00 Total qualifying capital ratio 18.41 18.59 8.00 10.00 September 30, 2016 Tier 1 leverage ratio 8.35% 10.35% 4.00% 5.00% Common equity Tier 1 capital ratio 17.28 21.95 4.50 6.50 Tier 1 capital ratio 17.82 21.95 6.00 8.00 Total qualifying capital ratio 23.17 22.35 8.00 10.00 The following table provides a reconciliation of the amounts included in the table above for the Company. Standardized Approach (1) September 30, 2017 (Dollars in Thousands) Total equity $ 434,496 Adjustments: LESS: Goodwill, net of associated deferred tax liabilities 95,332 LESS: Certain other intangible assets 41,743 LESS: Net deferred tax assets from operating loss and tax credit carry-forwards 1,495 LESS: Net unrealized gains (losses) on available-for-sale securities 9,166 Common Equity Tier 1 (1) 286,760 Long-term debt and other instruments qualifying as Tier 1 10,310 LESS: Additional tier 1 capital deductions 374 Total Tier 1 capital 296,696 Allowance for loan losses 7,718 Subordinated debentures (net of issuance costs) 73,347 Total qualifying capital 377,761