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Qualified, experienced BKD client service professionals write the contents of these articles. We urge you to carefully consider all of the facts and circumstances of your situation before applying specific information in our articles. Consult your BKD advisor before acting on any matter covered in these articles.
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April 2009
The Federal Reserve System board of governors recently ruled to delay the effective date for limits on bank holding company’s (BHCs) Tier 1 capital related to trust preferred securities and other restricted core capital elements. Changed from March 31, 2009, to March 31, 2011, the board decided on the delay to provide BHCs more flexibility to satisfy the board’s risk-based and leverage capital guidelines during current stressed market conditions. Under current limits, BHCs may include in Tier 1 capital cumulative perpetual preferred stock and trust preferred securities up to 25 percent of the sum of core capital elements (including cumulative perpetual preferred stock and trust preferred securities). The new rule limits restricted core capital elements included in the Tier 1 capital to 25 percent of the sum of core capital elements (including restricted core capital elements), net of goodwill less any associated deferred tax liability. 
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