Bank Directors Seminar, Coeur d'Alene, ID, September 15-17, 2019

CURRENT PCA FRAMEWORK VS. CBLR PCA FRAMEWORK

Risk-Based Capital Ratios

Leverage Ratio

PCA Threshold

CBLR

Common Equity Tier 1 Capital

Total Capital

Tier 1 Capital

Tier 1 Capital

Well-Capitalized

≥ 9%

≥ 10%

≥ 8%

≥ 6.5%

≥ 5%

Adequately Capitalized

≥ 7.5%

≥ 8%

≥ 6%

≥ 4.5%

≥ 4%

Undercapitalized

< 7.5%

< 8%

< 6%

< 4.5%

< 4%

Significantly Undercapitalized

< 6%

< 6%

< 4%

< 3%

< 3%

Critically Undercapitalized

Tangible equity (defined as Tier 1 capital plus non-Tier 1 perpetual preferred stock) to total assets ≤ 2%

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Fed Faster Payments

• Federal Reserve recently announced their plans to create a real-time payments systems called FedNow.

• The FedNow Service will run continuously at all times of the day, every day of the week, consistent with the needs of faster payments and will be designed to process large volumes of payments rapidly.

• A Federal-Reserve Real-Time Payments System would allow for: • Increased Competition

• Financial Stability • Economic Fairness

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