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Regulatory Matters | 12 Months Ended
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Dec. 31, 2018
Regulatory Capital Requirements [Abstract] |
Regulatory Matters | NOTE 15 – REGULATORY MATTERS Banks and financial holding companies are subject to various regulatory capital requirements administered by the 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. The new minimum capital requirements associated with the Basel Committee on capital and liquidity regulation (Basel III) was phased in beginning on January 1, 2015 and continued through January 1, 2019. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action by regulators that, if undertaken, could have a direct material effect on the financial statements. Management believes as of December 31, 2018, the Company and the Bank meet all capital adequacy requirements to which they are subject. The FDIC and other federal banking regulators revised the risk-based capital requirements applicable to financial holding companies and insured depository institutions, including the Company and the Bank, to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision (“Basel III”). The common equity tier 1 capital, tier 1 capital and total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. The leverage ratio is calculated by dividing tier 1 capital by adjusted average total assets. Basel III limits capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital, tier 1 capital and total capital to risk-weighted assets in addition to the amount necessary to meet minimum risk-based capital requirements. The capital conservation buffer began the phase in January 1, 2016 and increased each year and was fully implemented at 2.5% on January 1, 2019. The capital conservation buffer was 1.875% during 2018 and was 1.25% during 2017. The buffer required an additional capital amount of $34.4 million at year end 2018 and an additional $21.0 million at year end 2017. Excluding the additional capital conservation buffer, Basel III requires the Company and the Bank to maintain (i) a minimum ratio of common equity tier 1 capital to risk-weighted assets of at least 4.5%, (ii) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%, (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0% and (iv) a minimum leverage ratio of at least 4.0%. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2018 and 2017, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category. Dividend Restrictions: The Company’s principal source of funds for dividend payments is dividends received from the Bank, Farmers Trust and NAI. The Bank and Farmers Trust are subject to the dividend restrictions set forth by the Comptroller of the Currency and Ohio Department of Commerce – Division of Financial Institutions, respectively. The respective regulatory agency must approve declaration of any dividends in excess of the sum of profits for the current year and retained net profits for the preceding two years. During 2019, the Bank could, without prior approval, declare dividends of approximately $39.0 million plus any 2019 net profits retained to the date of the dividend declaration. In order to practice trust powers, Farmers Trust must maintain a minimum capital of $3 million. Farmers Trust would also be able to, without prior approval, declare dividends of $603 thousand plus any 2019 net profits retained to the date of the dividend declaration. Actual and required capital amounts (not including the capital conservation buffer) and ratios are presented below at year-end:
|  | Actual |  |  | Requirement For Capital Adequacy Purposes: |  |  | To be Well Capitalized Under Prompt Corrective Action Provisions: |
|  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common equity tier 1 capital ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 222,892 |  |  |  | 12.16 | % |  | $ | 82,478 |  |  |  | 4.5 | % |  | N/A |  |  | N/A |
Bank |  |  | 210,409 |  |  |  | 11.51 | % |  |  | 82,242 |  |  |  | 4.5 | % |  |  | 118,795 |  |  |  | 6.5 | %
Total risk based capital ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 238,742 |  |  |  | 13.03 | % |  |  | 146,628 |  |  |  | 8.0 | % |  | N/A |  |  | N/A |
Bank |  |  | 224,001 |  |  |  | 12.26 | % |  |  | 146,209 |  |  |  | 8.0 | % |  |  | 182,761 |  |  |  | 10.0 | %
Tier I risk based capital ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 225,150 |  |  |  | 12.28 | % |  |  | 109,971 |  |  |  | 6.0 | % |  | N/A |  |  | N/A |
Bank |  |  | 210,409 |  |  |  | 11.51 | % |  |  | 109,656 |  |  |  | 6.0 | % |  |  | 146,209 |  |  |  | 8.0 | %
Tier I leverage ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 225,150 |  |  |  | 9.91 | % |  |  | 90,900 |  |  |  | 4.0 | % |  | N/A |  |  | N/A |
Bank |  |  | 210,409 |  |  |  | 9.32 | % |  |  | 90,324 |  |  |  | 4.0 | % |  |  | 112,905 |  |  |  | 5.0 | %
2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common equity tier 1 capital ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 199,201 |  |  |  | 11.86 | % |  | $ | 75,573 |  |  |  | 4.5 | % |  | N/A |  |  | N/A |
Bank |  |  | 192,080 |  |  |  | 11.45 | % |  |  | 75,462 |  |  |  | 4.5 | % |  |  | 109,001 |  |  |  | 6.5 | %
Total risk based capital ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 213,725 |  |  |  | 12.73 | % |  |  | 134,352 |  |  |  | 8.0 | % |  | N/A |  |  | N/A |
Bank |  |  | 204,395 |  |  |  | 12.19 | % |  |  | 134,155 |  |  |  | 8.0 | % |  |  | 167,694 |  |  |  | 10.0 | %
Tier I risk based capital ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 201,410 |  |  |  | 11.99 | % |  |  | 100,764 |  |  |  | 6.0 | % |  | N/A |  |  | N/A |
Bank |  |  | 192,080 |  |  |  | 11.45 | % |  |  | 100,616 |  |  |  | 6.0 | % |  |  | 134,155 |  |  |  | 8.0 | %
Tier I leverage ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 201,410 |  |  |  | 9.50 | % |  |  | 84,800 |  |  |  | 4.0 | % |  | N/A |  |  | N/A |
Bank |  |  | 192,080 |  |  |  | 9.12 | % |  |  | 84,253 |  |  |  | 4.0 | % |  |  | 105,316 |  |  |  | 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://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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&loc=d3e65071-112826 + Details
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