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Regulatory Matters | 12 Months Ended
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Dec. 31, 2019
Regulatory Capital Requirements [Abstract] |
Regulatory Matters | NOTE 16 – REGULATORY MATTERS Banks and bank 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) were being phased in and began on January 1, 2015 and was fully implemented on 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 that as of December 31, 2019, 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 phased in beginning January 1, 2016 and increased each year until it was fully implemented at 2.5% on January 1, 2019. The capital conservation buffer is 2.5% for the year of 2019 and was 1.875% during 2018. The buffer required an additional capital amount of $47.8 million at year end 2019 and an additional $34.4 million at year end 2018. Excluding the additional 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 2019 and 2018, 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 and Farmers Trust. 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. At the conclusion of 2019, the Bank could, without prior approval, declare dividends of approximately $25.2 million plus any 2020 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 $273 thousand plus any 2020 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 |
2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Common equity tier 1 capital ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  | $ | 247,395 |  |  |  | 12.94 | % |  | $ | 86,039 |  |  |  | 4.5 | % |  | N/A |  |  | N/A |
Bank |  |  | 213,507 |  |  |  | 11.19 | % |  |  | 85,854 |  |  |  | 4.5 | % |  |  | 124,011 |  |  |  | 6.5 | %
Total risk based capital ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 264,188 |  |  |  | 13.82 | % |  |  | 152,958 |  |  |  | 8.0 | % |  | N/A |  |  | N/A |
Bank |  |  | 227,994 |  |  |  | 11.95 | % |  |  | 152,629 |  |  |  | 8.0 | % |  |  | 190,787 |  |  |  | 10.0 | %
Tier I risk based capital ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 249,701 |  |  |  | 13.06 | % |  |  | 114,719 |  |  |  | 6.0 | % |  | N/A |  |  | N/A |
Bank |  |  | 213,507 |  |  |  | 11.19 | % |  |  | 114,472 |  |  |  | 6.0 | % |  |  | 152,629 |  |  |  | 8.0 | %
Tier I leverage ratio |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Consolidated |  |  | 249,701 |  |  |  | 10.69 | % |  |  | 93,406 |  |  |  | 4.0 | % |  | N/A |  |  | N/A |
Bank |  |  | 213,507 |  |  |  | 9.06 | % |  |  | 94,304 |  |  |  | 4.0 | % |  |  | 117,881 |  |  |  | 5.0 | %
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 | %

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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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