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REGULATORY CAPITAL REQUIREMENTS | 12 Months Ended
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Dec. 31, 2017
REGULATORY CAPITAL REQUIREMENTS |
REGULATORY CAPITAL REQUIREMENTS | 18. REGULATORY CAPITAL REQUIREMENTS The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital requirements that involve quantitative measures of the Company’s and Bank’s assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classifications also are subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of total and tier 1 capital to risk weighted assets and of tier 1 capital to average assets. Tier 1 capital, risk weighted assets and average assets are as defined by regulation. The required minimums for the Company and Bank are set forth in the tables that follow. The Company and the Bank met all capital adequacy requirements at December 31, 2017 and 2016. On January 1, 2015, the Basel III Capital Rules became effective and include transition provisions through January 1, 2019. These rules provide for the following minimum capital to risk-weighted assets ratios as of January 1, 2015: a) 4.5% based on common equity tier 1 capital ("CET1"); b) 6.0% based on tier 1 capital; and c) 8.0% based on total regulatory capital. A minimum leverage ratio (tier 1 capital as a percentage of total average assets) of 4.0% is also required under the Basel III Capital Rules. When fully phased in, the Basel III Capital Rules will additionally require institutions to retain a capital conservation buffer, composed of CET1, of 2.5% above these required minimum capital ratio levels. The capital conservation buffer requirement is being phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increasing by 0.625% each subsequent January 1, until it reaches 2.5% on January 1, 2019. When the capital conservation buffer is fully phased in on January 1, 2019, the Company and the Bank will effectively have the following minimum capital to risk-weighted assets ratios: a) 7.0% based on CET1; b) 8.5% based on tier 1 capital; and c) 10.5% based on total regulatory capital. The Company and the Bank made the one-time, permanent election to continue to exclude the effects of accumulated other comprehensive income or loss items included in stockholders' equity for the purposes of determining the regulatory capital ratios. As of December 31, 2017, the most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized,” the Bank must maintain minimum total risk-based, tier 1 risk-based and tier 1 leverage ratios as set forth in the tables below. Since that notification, there are no conditions or events that management believes have changed the institution’s category. The following tables present actual capital levels and minimum required levels for the Company and the Bank under Basel III rules at December 31, 2017 and 2016:
|  | December 31, 2017 |
|  |  |  |  |  |  |  | Minimum Capital |  |  | Minimum To Be Well |
|  |  |  |  | Minimum Capital |  |  | Adequacy Requirement with |  |  | Capitalized Under Prompt |
|  | Actual Capital |  |  | Adequacy Requirement |  |  | Capital Conservation Buffer |  |  | Corrective Action Provisions |
(Dollars in thousands) |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
Common equity tier 1 capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 336,393 |  |  |  | 10.0 | % |  | $ | 152,011 |  |  |  | 4.5 | % |  | $ | 194,237 |  |  |  | 5.75 | % |  |  | n/a |  |  |  | n/a |
Bank |  |  | 408,089 |  |  |  | 12.1 |  |  |  | 152,002 |  |  |  | 4.5 |  |  |  | 194,224 |  |  |  | 5.75 |  |  | $ | 219,558 |  |  |  | 6.5 | %
Total capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 448,376 |  |  |  | 13.3 |  |  |  | 270,242 |  |  |  | 8.0 |  |  |  | 312,468 |  |  |  | 9.25 |  |  |  | n/a |  |  |  | n/a |
Bank |  |  | 440,072 |  |  |  | 13.0 |  |  |  | 270,225 |  |  |  | 8.0 |  |  |  | 312,448 |  |  |  | 9.25 |  |  |  | 337,781 |  |  |  | 10.0 |
Tier 1 capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 336,393 |  |  |  | 10.0 |  |  |  | 202,682 |  |  |  | 6.0 |  |  |  | 244,907 |  |  |  | 7.25 |  |  |  | n/a |  |  |  | n/a |
Bank |  |  | 408,089 |  |  |  | 12.1 |  |  |  | 202,669 |  |  |  | 6.0 |  |  |  | 244,892 |  |  |  | 7.25 |  |  |  | 270,225 |  |  |  | 8.0 |
Tier 1 capital to average assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 336,393 |  |  |  | 7.9 |  |  |  | 170,440 |  |  |  | 4.0 |  |  |  | n/a |  |  |  | n/a |  |  |  | n/a |  |  |  | n/a |
Bank |  |  | 408,089 |  |  |  | 9.6 |  |  |  | 170,441 |  |  |  | 4.0 |  |  |  | n/a |  |  |  | n/a |  |  |  | 213,051 |  |  |  | 5.0 |
|  | December 31, 2016 |
|  |  |  |  |  |  |  |  |  |  | Minimum Capital |  |  | Minimum To Be Well |
|  |  |  |  |  |  |  | Minimum Capital |  |  | Adequacy Requirement with |  |  | Capitalized Under Prompt |
|  | Actual Capital |  |  | Adequacy Requirement |  |  | Capital Conservation Buffer |  |  | Corrective Action Provisions |
(Dollars in thousands) |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
Common equity tier 1 capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 312,731 |  |  |  | 10.8 | % |  | $ | 130,065 |  |  |  | 4.5 | % |  | $ | 148,129 |  |  |  | 5.125 | % |  |  | n/a |  |  |  | n/a |
Bank |  |  | 378,352 |  |  |  | 13.1 |  |  |  | 130,054 |  |  |  | 4.5 |  |  |  | 148,117 |  |  |  | 5.125 |  |  | $ | 187,856 |  |  |  | 6.5 | %
Total capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 434,184 |  |  |  | 15.0 |  |  |  | 231,226 |  |  |  | 8.0 |  |  |  | 249,290 |  |  |  | 8.625 |  |  |  | n/a |  |  |  | n/a |
Bank |  |  | 404,532 |  |  |  | 14.0 |  |  |  | 231,208 |  |  |  | 8.0 |  |  |  | 249,271 |  |  |  | 8.625 |  |  |  | 289,010 |  |  |  | 10.0 |
Tier 1 capital to risk weighted assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 328,004 |  |  |  | 11.3 |  |  |  | 173,419 |  |  |  | 6.0 |  |  |  | 191,484 |  |  |  | 6.625 |  |  |  | n/a |  |  |  | n/a |
Bank |  |  | 378,352 |  |  |  | 13.1 |  |  |  | 173,406 |  |  |  | 6.0 |  |  |  | 191,469 |  |  |  | 6.625 |  |  |  | 231,208 |  |  |  | 8.0 |
Tier 1 capital to average assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 328,004 |  |  |  | 8.6 |  |  |  | 152,391 |  |  |  | 4.0 |  |  |  | n/a |  |  |  | n/a |  |  |  | n/a |  |  |  | n/a |
Bank |  |  | 378,352 |  |  |  | 9.9 |  |  |  | 152,382 |  |  |  | 4.0 |  |  |  | n/a |  |  |  | n/a |  |  |  | 190,478 |  |  |  | 5.0 |

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- Definition The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1G -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958577-112826 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1C -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958572-112826 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1E -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958574-112826 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1H -URI http://asc.fasb.org/extlink&oid=84167132&loc=d3e65071-112826 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958569-112826 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958570-112826 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1F -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958575-112826 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958568-112826 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1D -URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958573-112826 + Details
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