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Regulatory Matters | 3 Months Ended
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Mar. 31, 2020
Banking and Thrift [Abstract] |
Regulatory Matters | Regulatory Matters Regulatory Capital Requirements: The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgements by regulators. Failure to meet capital requirements can initiate regulatory action. Under Basel III rules, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is 2.50%. At March 31, 2020, and 2019, the Company and the Bank exceeded the minimum regulatory requirements and exceeded the threshold for the "well capitalized" regulatory classification. Regulatory Restrictions on Dividends: Pursuant to Tennessee banking law, the Bank may not, without the prior consent of the Commissioner of the Tennessee Department of Financial Institutions (TDFI), pay any dividends to the Company in a calendar year in excess of the total of the Bank's retained net income for that year plus the retained net income for the preceding two years. Under Tennessee corporate law, the Company is not permitted to pay dividends if, after giving effect to such payment, it would not be able to pay its debts as they become due in the usual course of business or its total assets would be less than the sum of its total liabilities plus any amounts needed to satisfy any preferential rights if it were dissolving. In addition, in deciding whether or not to declare a dividend of any particular size, the Company's board of directors must consider its and the Bank's current and prospective capital, liquidity, and other needs. In addition to state law limitations on the Company's ability to pay dividends, the Federal Reserve imposes limitations on the Company's ability to pay dividends. Federal Reserve regulations limit dividends, stock repurchases and discretionary bonuses to executive officers if the Company's regulatory capital is below the level of regulatory minimums plus the applicable capital conservation buffer. During the three months ended March 31, 2020, the Bank paid $7.5 million in dividends to the Company. As of March 31, 2020, the Bank could pay approximately $52.0 million of additional dividends to the Company without prior approval of the Commissioner of the TDFI. Since the fourth quarter of 2019, the Company has paid a quarterly common stock dividend of $0.05 per share. The amount and timing of all future dividend payments by the Company, if any, is subject to discretion of the Company's board of directors and will depend on the Company's earnings, capital position, financial condition and other factors, including new regulatory capital requirements, as they become known to the Company. Regulatory Capital Levels: Actual and required capital levels at March 31, 2020, and December 31, 2019 are presented below (dollars in thousands):
|  | Actual |  |  |  | Minimum for capital adequacy purposes |  |  |  | Minimum to be well capitalized under prompt corrective action provisions1 |  |
|  | Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio
March 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |
SmartFinancial: |  |  |  |  |  |  |  |  |  |  |  |
Total Capital (to Risk Weighted Assets) |  | $ | 306,982 |  |  | 13.13 | % |  | $ | 187,099 |  |  | 8.00 | % |  | N/A |  |  | N/A |
Tier 1 Capital (to Risk Weighted Assets) |  | 254,268 |  |  | 10.87 | % |  | 140,324 |  |  | 6.00 | % |  | N/A |  |  | N/A |
Common Equity Tier 1 Capital (to Risk Weighted Assets) |  | 254,268 |  |  | 10.87 | % |  | 105,243 |  |  | 4.50 | % |  | N/A |  |  | N/A |
Tier 1 Capital (to Average Assets)2 |  | 254,268 |  |  | 10.28 | % |  | 98,934 |  |  | 4.00 | % |  | N/A |  |  | N/A |
SmartBank: |  |  |  |  |  |  |  |  |  |  |  |
Total Capital (to Risk Weighted Assets) |  | $ | 295,105 |  |  | 12.62 | % |  | $ | 187,077 |  |  | 8.00 | % |  | $ | 233,847 |  |  | 10.00 | %
Tier 1 Capital (to Risk Weighted Assets) |  | 281,674 |  |  | 12.05 | % |  | 140,308 |  |  | 6.00 | % |  | 187,077 |  |  | 8.00 | %
Common Equity Tier 1 Capital (to Risk Weighted Assets) |  | 281,674 |  |  | 12.05 | % |  | 105,231 |  |  | 4.50 | % |  | 152,000 |  |  | 6.50 | %
Tier 1 Capital (to Average Assets)2 |  | 281,674 |  |  | 11.42 | % |  | 98,636 |  |  | 4.00 | % |  | 123,295 |  |  | 5.00 | %
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |
SmartFinancial: |  |  |  |  |  |  |  |  |  |  |  |
Total Capital (to Risk Weighted Assets) |  | $ | 287,937 |  |  | 14.02 | % |  | $ | 164,313 |  |  | 8.00 | % |  | N/A |  |  | N/A |
Tier 1 Capital (to Risk Weighted Assets) |  | 238,433 |  |  | 11.61 | % |  | 123,235 |  |  | 6.00 | % |  | N/A |  |  | N/A |
Common Equity Tier 1 Capital (to Risk Weighted Assets) |  | 238,433 |  |  | 11.61 | % |  | 92,426 |  |  | 4.50 | % |  | N/A |  |  | N/A |
Tier 1 Capital (to Average Assets) |  | 238,433 |  |  | 10.34 | % |  | 92,258 |  |  | 4.00 | % |  | N/A |  |  | N/A |
SmartBank: |  |  |  |  |  |  |  |  |  |  |  |
Total Capital (to Risk Weighted Assets) |  | $ | 273,432 |  |  | 13.31 | % |  | $ | 164,305 |  |  | 8.00 | % |  | $ | 205,382 |  |  | 10.00 | %
Tier 1 Capital (to Risk Weighted Assets) |  | 263,189 |  |  | 12.81 | % |  | 123,229 |  |  | 6.00 | % |  | 164,305 |  |  | 8.00 | %
Common Equity Tier 1 Capital (to Risk Weighted Assets) |  | 263,189 |  |  | 12.81 | % |  | 92,422 |  |  | 4.50 | % |  | 133,498 |  |  | 6.50 | %
Tier 1 Capital (to Average Assets) |  | 263,189 |  |  | 11.41 | % |  | 92,254 |  |  | 4.00 | % |  | 115,317 |  |  | 5.00 | %
1The prompt corrective action provisions are applicable at the Bank level only. 2Average assets for the above calculations were based on the most recent quarter.

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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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