Tangible Equity [Banks & Banking] Law and Legal Definition

According to 12 CFR 208.41 [Title 12 -- Banks And Banking; Chapter Ii -- Federal Reserve System; Subchapter A -- Board Of Governors Of The Federal Reserve System; Part 208 -- Membership Of State Banking Institutions In The Federal Reserve System (Regulation H); Subpart D -- Prompt Corrective Action], tangible equity means “the amount of core capital elements as defined in the Board's Capital Adequacy Guidelines for State Member Banks: Risk-Based Measure, plus the amount of outstanding cumulative perpetual preferred stock (including related surplus), minus all intangible assets except mortgage servicing assets to the extent that the Board determines that mortgage servicing assets may be included in calculating the bank's Tier 1 capital.”

Tier 1 capital means “the amount of Tier 1 capital as defined in the Board's Capital Adequacy Guidelines for State Member Banks: Risk-Based Measure.”