CASH 2018 Annual Report

42 The following table provides certain non-GAAP financial measures used to compute certain of the ratios included in the table above, as well as a reconciliation of such non-GAAP financial measures to the most directly comparable financial measure in accordance with GAAP. Reconciliation: Standardized Approach (1) September 30, 2018 (Dollars in Thousands) Total stockholders' equity $ 747,726 Adjustments: LESS: Goodwill, net of associated deferred tax liabilities 299,456 LESS: Certain other intangible assets 64,716 LESS: Net unrealized gains (losses) on available-for-sale securities (33,114) LESS: Non-controlling interest 3,574 LESS: Unrealized currency gains (losses) 3 Common Equity Tier 1 (1) 413,091 Long-term debt and other instruments qualifying as Tier 1 13,661 Tier 1 minority interest not included in common equity tier 1 capital 2,118 Total Tier 1 capital 428,870 Allowance for loan and lease losses 13,185 Subordinated debentures (net of issuance costs) 73,491 Total qualifying capital 515,546 (1) Capital ratios were determined using the Basel III Capital Rules that became effective on January 1, 2015. Basel III revised the definition of capital, increased minimum capital ratios, and introduced a minimum CET1 ratio; those changes are being fully phased in through the end of 2021. The following table provides a reconciliation of tangible common equity used in calculating tangible book value data. September 30, 2018 (Dollars in Thousands) Total Stockholders' Equity $ 747,726 Less: Goodwill 303,270 Less: Intangible assets 70,719 Tangible common equity 373,737 Less: AOCI (33,111) Tangible common equity excluding AOCI 406,848 Due to the predictable, quarterly cyclicality of MPS deposits in connection with tax season business activity,management believes that a six-month capital calculation is a useful metric to monitor the Company’s overall capital management process. As such, the Bank’s six-month average Tier 1 leverage ratio, CET1 capital ratio, Tier 1 capital ratio, and Total qualifying capital ratio as of September 30, 2018 were 10.64%, 16.84%, 16.92%, and 17.37%, respectively. Recent Releases Related to Capital Rules In November 2017, the federal banking agencies, including the OCC, the FDIC, and the Federal Reserve, issued a final rule that simplifies certain aspects of the agencies’ capital rules as they relate to small federal savings banks and savings and loan holding companies. The rule, which is intended to reduce the regulatory burden on smaller, less complex banking organizations like the Company and the Bank, has transitional provisions for the regulatory treatment of certain components of capital. The rule went into effect on January 1, 2018.