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Note 17 - Regulatory Capital Requirements and Restrictions on Dividends. | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Regulatory Capital Requirements and Restrictions on Dividends | Note 17. Regulatory Capital Requirements and Restrictions on Dividends The Company (on a consolidated basis) and the subsidiary banks are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and subsidiary banks’ financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the subsidiary banks must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also 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 subsidiary banks to maintain minimum amounts and ratios (set forth in the following table) of total common equity Tier 1 and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets, each as defined by regulation. Management believes, as of December 31, 2019 and 2018, that the Company and the subsidiary banks met all capital adequacy requirements to which they are subject. Under the regulatory framework for prompt corrective action, to be categorized as “well capitalized,” an institution must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage and common equity Tier 1 ratios as set forth in the following tables. The Company and the subsidiary banks’ actual capital amounts and ratios as of December 31, 2019 and 2018 are also presented in the following table (dollars in thousands). As of December 31, 2019 and 2018, the subsidiary banks met the requirements to be “well capitalized”. Note 17. Regulatory Capital Requirements and Restrictions on Dividends (continued)
|  |  |  |  |  |  |  |  |  |  |  | For Capital |  | To Be Well |
|  |  |  |  |  |  |  |  |  |  |  | Adequacy Purposes |  | Capitalized Under |
|  |  |  |  |  |  | For Capital |  | With Capital |  | Prompt Corrective |
|  | Actual |  | Adequacy Purposes |  | Conservation Buffer* |  | Action Provisions |
|  | Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio |
As of December 31, 2019: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 581,234 |  | 13.33 | % | $ | 348,937 | > | 8.00 | % | $ | 457,980 | > | 10.50 | % | $ | 436,171 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 481,702 |  | 11.04 |  |  | 261,703 | > | 6.00 |  |  | 370,746 | > | 8.50 |  |  | 348,937 | > | 8.00 |
Tier 1 leverage |  |  | 481,702 |  | 9.53 |  |  | 202,207 | > | 4.00 |  |  | 202,207 | > | 4.00 |  |  | 252,758 | > | 5.00 |
Common equity Tier 1 |  |  | 443,864 |  | 10.18 |  |  | 196,277 | > | 4.50 |  |  | 305,320 | > | 7.00 |  |  | 283,511 | > | 6.50 |
Quad City Bank & Trust: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 183,855 |  | 11.83 | % | $ | 124,362 | > | 8.00 | % | $ | 163,225 | > | 10.50 | % | $ | 155,452 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 170,137 |  | 10.94 |  |  | 93,271 | > | 6.00 |  |  | 132,134 | > | 8.50 |  |  | 124,362 | > | 8.00 |
Tier 1 leverage |  |  | 170,137 |  | 9.94 |  |  | 68,479 | > | 4.00 |  |  | 68,479 | > | 4.00 |  |  | 85,598 | > | 5.00 |
Common equity Tier 1 |  |  | 170,137 |  | 10.94 |  |  | 69,953 | > | 4.50 |  |  | 108,817 | > | 7.00 |  |  | 101,044 | > | 6.50 |
Cedar Rapids Bank & Trust: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 175,498 |  | 11.90 | % | $ | 117,953 | > | 8.00 | % | $ | 154,813 | > | 10.50 | % | $ | 147,441 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 162,127 |  | 11.00 |  |  | 88,465 | > | 6.00 |  |  | 125,325 | > | 8.50 |  |  | 117,953 | > | 8.00 |
Tier 1 leverage |  |  | 162,127 |  | 10.41 |  |  | 62,286 | > | 4.00 |  |  | 62,286 | > | 4.00 |  |  | 77,857 | > | 5.00 |
Common equity Tier 1 |  |  | 162,127 |  | 11.00 |  |  | 66,349 | > | 4.50 |  |  | 103,209 | > | 7.00 |  |  | 95,837 | > | 6.50 |
Community State Bank: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 92,095 |  | 12.32 | % | $ | 59,813 | > | 8.00 | % | $ | 78,504 | > | 10.50 | % | $ | 74,766 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 85,437 |  | 11.43 |  |  | 44,860 | > | 6.00 |  |  | 63,551 | > | 8.50 |  |  | 59,813 | > | 8.00 |
Tier 1 leverage |  |  | 85,437 |  | 10.39 |  |  | 32,902 | > | 4.00 |  |  | 32,902 | > | 4.00 |  |  | 41,128 | > | 5.00 |
Common equity Tier 1 |  |  | 85,437 |  | 11.43 |  |  | 33,645 | > | 4.50 |  |  | 52,336 | > | 7.00 |  |  | 48,598 | > | 6.50 |
Springfield First Community Bank: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 71,074 |  | 12.72 | % | $ | 44,704 | > | 8.00 | % | $ | 58,674 | > | 10.50 | % | $ | 55,880 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 63,956 |  | 11.45 |  |  | 33,528 | > | 6.00 |  |  | 47,498 | > | 8.50 |  |  | 44,704 | > | 8.00 |
Tier 1 leverage |  |  | 63,956 |  | 9.70 |  |  | 26,379 | > | 4.00 |  |  | 26,379 | > | 4.00 |  |  | 32,974 | > | 5.00 |
Common equity Tier 1 |  |  | 63,956 |  | 11.45 |  |  | 25,146 | > | 4.50 |  |  | 39,116 | > | 7.00 |  |  | 36,322 | > | 6.50 |
|  |  |  |  |  |  |  |  |  |  |  | For Capital |  | To Be Well |
|  |  |  |  |  |  |  |  |  |  |  | Adequacy Purposes |  | Capitalized Under |
|  |  |  |  |  |  | For Capital |  | With Capital |  | Prompt Corrective |
|  | Actual |  | Adequacy Purposes |  | Conservation Buffer |  | Action Provisions |
|  | Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio |
As of December 31, 2018: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 460,416 |  | 10.69 | % | $ | 344,551 | > | 8.00 | % | $ | 425,305 | > | 9.875 | % | $ | 430,689 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 420,569 |  | 9.77 |  |  | 258,413 | > | 6.00 |  |  | 339,168 | > | 7.875 |  |  | 344,551 | > | 8.00 |
Tier 1 leverage |  |  | 420,569 |  | 8.87 |  |  | 189,858 | > | 4.00 |  |  | 189,858 | > | 4.000 |  |  | 237,322 | > | 5.00 |
Common equity Tier 1 |  |  | 382,899 |  | 8.89 |  |  | 193,810 | > | 4.50 |  |  | 274,564 | > | 6.375 |  |  | 279,948 | > | 6.50 |
Quad City Bank & Trust: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 162,009 |  | 11.38 | % | $ | 113,900 | > | 8.00 | % | $ | 140,596 | > | 9.875 | % | $ | 142,376 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 148,529 |  | 10.43 |  |  | 85,425 | > | 6.00 |  |  | 112,121 | > | 7.875 |  |  | 113,900 | > | 8.00 |
Tier 1 leverage |  |  | 148,529 |  | 9.04 |  |  | 65,744 | > | 4.00 |  |  | 65,744 | > | 4.000 |  |  | 82,180 | > | 5.00 |
Common equity Tier 1 |  |  | 148,529 |  | 10.43 |  |  | 64,069 | > | 4.50 |  |  | 90,764 | > | 6.375 |  |  | 92,544 | > | 6.50 |
Cedar Rapids Bank & Trust: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 146,292 |  | 11.55 | % | $ | 101,310 | > | 8.00 | % | $ | 125,054 | > | 9.875 | % | $ | 126,637 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 133,982 |  | 10.58 |  |  | 75,982 | > | 6.00 |  |  | 99,727 | > | 7.875 |  |  | 101,310 | > | 8.00 |
Tier 1 leverage |  |  | 133,982 |  | 9.98 |  |  | 53,682 | > | 4.00 |  |  | 53,682 | > | 4.000 |  |  | 67,103 | > | 5.00 |
Common equity Tier 1 |  |  | 133,982 |  | 10.58 |  |  | 56,987 | > | 4.50 |  |  | 80,731 | > | 6.375 |  |  | 82,314 | > | 6.50 |
Community State Bank: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 75,233 |  | 11.24 | % | $ | 53,567 | > | 8.00 | % | $ | 66,122 | > | 9.875 | % | $ | 66,959 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 69,101 |  | 10.32 |  |  | 40,175 | > | 6.00 |  |  | 52,730 | > | 7.875 |  |  | 53,567 | > | 8.00 |
Tier 1 leverage |  |  | 69,101 |  | 9.19 |  |  | 30,070 | > | 4.00 |  |  | 30,070 | > | 4.000 |  |  | 37,588 | > | 5.00 |
Common equity Tier 1 |  |  | 69,101 |  | 10.32 |  |  | 30,131 | > | 4.50 |  |  | 42,686 | > | 6.375 |  |  | 43,523 | > | 6.50 |
Springfield First Community Bank: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 57,051 |  | 12.24 | % | $ | 37,278 | > | 8.00 | % | $ | 46,016 | > | 9.875 | % | $ | 46,598 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 51,279 |  | 11.00 |  |  | 27,959 | > | 6.00 |  |  | 36,696 | > | 7.875 |  |  | 37,278 | > | 8.00 |
Tier 1 leverage |  |  | 51,279 |  | 9.39 |  |  | 21,849 | > | 4.00 |  |  | 21,849 | > | 4.000 |  |  | 27,312 | > | 5.00 |
Common equity Tier 1 |  |  | 51,279 |  | 11.00 |  |  | 20,969 | > | 4.50 |  |  | 29,706 | > | 6.375 |  |  | 30,289 | > | 6.50 |
Rockford Bank & Trust |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total risk-based capital |  | $ | 50,648 |  | 10.89 | % | $ | 37,208 | > | 8.00 | % | $ | 45,929 | > | 9.875 | % | $ | 46,511 | > | 10.00 | %
Tier 1 risk-based capital |  |  | 44,821 |  | 9.64 |  |  | 27,906 | > | 6.00 |  |  | 36,627 | > | 7.875 |  |  | 37,208 | > | 8.00 |
Tier 1 leverage |  |  | 44,821 |  | 8.93 |  |  | 20,081 | > | 4.00 |  |  | 20,081 | > | 4.000 |  |  | 25,101 | > | 5.00 |
Common equity Tier 1 |  |  | 44,821 |  | 9.64 |  |  | 20,930 | > | 4.50 |  |  | 29,650 | > | 6.375 |  |  | 30,232 | > | 6.50 |
* December 31, 2019 minimums reflect the fully phased-in ratios (including the capital conservation buffer). Note 17. Regulatory Capital Requirements and Restrictions on Dividends (continued) The Company’s ability to pay dividends to its stockholders may be affected by both general corporate law considerations and policies of the Federal Reserve applicable to bank holding companies. The payment of dividends by any financial institution or its holding company is affected by the requirement to maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations, and a financial institution generally is prohibited from paying any dividends if, following payment thereof, the institution would be undercapitalized. Notwithstanding the availability of funds for dividends, however, the Federal Reserve may prohibit the payment of any dividends by the subsidiary banks if the Federal Reserve determines such payment would constitute an unsafe or unsound practice. The Company also has certain contractual restrictions on its ability to pay dividends. The Company has issued junior subordinated debentures in four private placements and assumed three issues of junior subordinated debentures in connection with the acquisitions. Under the terms of the debentures, the Company may be prohibited, under certain circumstances, from paying dividends on shares of its common stock. These circumstances did not exist at December 31, 2019 or 2018. In February 2019, the Company completed a subordinated notes offering. See Note 12 of the Consolidated Financial Statements for further information on this subordinated notes offering. On February 18, 2020, the Company announced a share repurchase program, permitting the repurchase of up to 800,000 shares of its outstanding common stock, or approximately 5% of the outstanding shares as of December 31, 2019. The repurchase program permits shares to be repurchased in open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with Rules 10b5-1 and 10b-18 of the SEC. The timing, manner, price and amount of any repurchases will be determined by the Company in its discretion and will be subject to economic and market conditions, stock price, applicable legal requiremets and other factors. The repurchase program does not obligate the Company to purchase any particular number of shares.

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- Definition The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1C -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958572-112826 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1D -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958573-112826 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958570-112826 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958569-112826 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1G -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958577-112826 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1F -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958575-112826 Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1E -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958574-112826 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1H -URI http://asc.fasb.org/extlink&oid=117337116&loc=d3e65071-112826 + Details
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