§ 10.3. Minimum leverage capital requirement.
(a) The minimum leverage capital for an institution or association shall be a ratio of Tier 1 capital to total assets of 4%.
(b) Notwithstanding the provisions of subsection (a), the Secretary may establish for an institution or association a minimum ratio of Tier 1 capital to total assets of more than 4% based upon inadequate or substandard performance in the following categories, as determined by examination by the Department, and following an opportunity for response by the institution or association:
(1) The financial history and condition of the institution or association.
(2) The earnings prospects of the institution or association.
(3) The managerial resources of the institution or association.
(4) The liquidity ratio standards applicable to the institution or association.
(5) The interest rate risk exposure rating applicable to the institution or association.
(6) The concentration of assets, including limitations on or amount of loans to one borrower or group of borrowers, either related or unrelated, of the institution or association.
(7) The volume of classified assets.
(c) If the Secretary establishes, under subsection (b), a minimum capital ratio for an institution or association, the minimum capital ratio shall be imposed under section 501 of the Department of Banking and Securities Code (71 P. S. § 733-501), section 1404 of the Savings Association Code (7 P. S. § 6020-224), or by other means agreed to by the institution or association.
Cross References This section cited in 10 Pa. Code § 10.5 (relating to unsafe operations).
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