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Regulatory Capital
 9 Months Ended
Sep. 30, 2019
Banking and Thrift [Abstract]  
Regulatory Capital
Note 14 – Regulatory Capital
Horizon and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. These capital requirements implement changes arising from the Dodd-Frank Wall Street Reform and Consumer Protection Act and the U.S. Basel Committee on Banking Supervision’s capital framework (known as “Basel III”). Failure to meet the minimum regulatory capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators, which if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective actions, the Company and Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities, and certain
off-balance-sheet
items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
The Company and Bank are subject to minimum regulatory capital requirements as defined and calculated in accordance with the Basel
III-based
regulations. As allowed under Basel III rules, the Company made the decision to
opt-out
of including accumulated other comprehensive income in regulatory capital. The minimum regulatory capital requirements are set forth in the table below.
In addition, to be categorized as well capitalized, the Company and Bank must maintain Total risk-based, Tier I risk-based, common equity Tier I risk-based and Tier I leverage ratios as set forth in the table below. As of September 30, 2019 and December 31, 2018, the Company and Bank met all capital adequacy requirements to be considered well capitalized. There have been no conditions or events since the end of the third quarter of 2019 that management believes have changed the Bank’s classification as well capitalized. There is no threshold for well-capitalized status for bank holding companies.
Horizon and the Bank’s actual and required capital ratios as of September 30, 2019 and December 31, 2018 were as follows:
 
Actual
   
Required for Capital
1

Adequacy Purposes
   
Required For Capital
1

Adequacy Purposes
with Capital Buffer
   
Well Capitalized 
Under
 
Prompt
1

Corrective Action
Provisions
 
  
Amount
 
  
Ratio
 
  
Amount
 
 
  
Ratio
 
  
Amount
 
  
Ratio
 
  
Amount
 
  
Ratio
 
September 30, 2019
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
Total capital
1
(to risk-weighted assets)
   
     
     
     
     
     
     
     
 
Consolidated
  $
534,701
      
13.53
 %    
316,157
     
8.00
 %    
414,956
     
10.50
 %    
N/A
     
N/A
 
Bank
   
477,150
      
12.08
 %    
316,012
     
8.00
 %    
414,765
     
10.50
 %  
$
395,015
     
10.00
 %
Tier 1 capital
1
(to risk-weighted assets)
   
     
     
     
     
     
     
     
 
Consolidated
   
516,692
      
13.07
 %    
237,196
     
6.00
 %    
336,028
     
8.50
 %    
N/A
     
N/A
 
Bank
   
459,140
      
11.62
 %    
237,010
     
6.00
 %    
335,764
     
8.50
 %    
316,014
     
8.00
 %
Common equity tier 1 capital
1
(to risk-weighted assets)
   
     
     
     
     
     
     
     
 
Consolidated
   
459,162
      
11.61
 %    
177,970
     
4.50
 %    
276,842
     
7.00
 %    
N/A
     
N/A
 
Bank
   
459,140
      
11.62
 %    
177,758
     
4.50
 %    
276,512
     
7.00
 %    
256,761
     
6.50
 %
Tier 1 capital
1
(to average assets)
   
     
     
     
     
     
     
     
 
Consolidated
   
516,692
      
10.51
 %    
196,648
     
4.00
 %    
196,648
     
4.00
 %    
N/A
     
N/A
 
Bank
   
459,140
      
9.35
 %    
196,489
     
4.00
 %    
196,489
     
4.00
 %    
245,611
     
5.00
 %
December 31, 2018
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
Total capital
1
(to risk-weighted assets)
   
     
     
     
     
     
     
     
 
Consolidated
  $
  427,616
     
13.39
 %   $
 
 
255,419
     
8.00
 %   $
  315,283
     
9.875
 %    
N/A
     
N/A
 
Bank
   
396,755
     
12.43
 %    
255,419
     
8.00
 %    
315,283
     
9.875
 %   $
319,274
     
10.00
 %
Tier 1 capital
1
(to risk-weighted assets)
   
     
     
     
     
     
     
     
 
Consolidated
   
409,760
     
12.83
 %    
191,565
     
6.00
 %    
251,429
     
7.875
 %    
N/A
     
N/A
 
Bank
   
378,899
     
11.87
 %    
191,565
     
6.00
 %    
251,429
     
7.875
 %    
255,420
     
8.00
 %
Common equity tier 1 capital
1
(to risk-weighted assets)
   
     
     
     
     
     
     
     
 
Consolidated
   
371,297
     
11.63
 %    
143,673
     
4.50
 %    
203,537
     
6.375
 %    
N/A
     
N/A
 
Bank
   
378,899
     
11.87
 %    
143,674
     
4.50
 %    
203,537
     
6.375
 %    
207,528
     
6.50
 %
Tier 1 capital
1
(to average assets)
   
     
     
     
     
     
     
     
 
Consolidated
   
409,760
     
10.12
 %    
162,033
     
4.00
 %    
162,033
     
4.000
 %    
N/A
     
N/A
 
Bank
   
378,899
     
9.34
 %    
162,327
     
4.00
 %    
162,327
     
4.000
 %    
202,908
     
5.00
 %
In October 2019, the federal banking agencies finalized a new rule that will simplify capital requirements for qualified community banks that opt into the new community bank leverage ratio framework. The new framework will be available to use in March 31, 2020 Call Reports or Forms
FRY-9C
(as applicable) for depository institutions and depository institution holding companies that have less than $10 billion in total consolidated assets, among other qualifying criteria. Horizon is currently evaluating the impact of the new community bank leverage ratio framework.