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Regulatory Capital | 12 Months Ended
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Dec. 31, 2019
Regulatory Capital |
Regulatory Capital | Note 20 – Regulatory Capital ChoiceOne and the Banks are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. Depending upon the capital category to which an institution is assigned, the regulators’ corrective powers include: prohibiting the acceptance of brokered deposits; requiring the submission of a capital restoration plan; placing limits on asset growth and restrictions on activities; requiring the institution to issue additional capital stock (including additional voting stock) or to be acquired; restricting transactions with affiliates; restricting the interest rate the institution may pay on deposits; ordering a new election of directors of the institution; requiring that senior executive officers or directors be dismissed; prohibiting the institution from accepting deposits from correspondent banks; requiring the institution to divest certain subsidiaries; prohibiting the payment of principal or interest on subordinated debt; and ultimately, appointing a receiver for the institution. At year-end 2019 and 2018, the Banks were categorized as well capitalized under the regulatory framework for prompt corrective action. Actual capital levels and minimum required levels for ChoiceOne and the Banks were as follows:
|  |  |  |  |  |  |  | Minimum Required |
|  |  |  |  |  |  |  | to be Well |
|  |  |  |  | Minimum Required |  |  | Capitalized Under |
|  |  |  |  | for Capital |  |  | Prompt Corrective |
(Dollars in thousands) |  | Actual |  |  | Adequacy Purposes |  |  | Action Regulations |
|  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ChoiceOne Financial Services Inc. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total capital (to risk weighted assets) |  | $ | 135,836 |  |  |  | 14.2 | % |  | $ | 76,288 |  |  |  | 8.0 | % |  |  | N/A |  |  |  | N/A |
Common equity Tier 1 capital (to risk weighted assets) |  |  | 131,785 |  |  |  | 13.8 |  |  |  | 42,912 |  |  |  | 4.5 |  |  |  | N/A |  |  |  | N/A |
Tier 1 capital (to risk weighted assets) |  |  | 131,785 |  |  |  | 13.8 |  |  |  | 57,216 |  |  |  | 6.0 |  |  |  | N/A |  |  |  | N/A |
Tier 1 capital (to average assets) |  |  | 131,785 |  |  |  | 9.6 |  |  |  | 54,646 |  |  |  | 4.0 |  |  |  | N/A |  |  |  | N/A |
ChoiceOne Bank |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total capital (to risk weighted assets) |  | $ | 69,412 |  |  |  | 13.2 | % |  | $ | 42,039 |  |  |  | 8.0 | % |  | $ | 52,549 |  |  |  | 10.0 | %
Common equity Tier 1 capital (to risk weighted assets) |  |  | 65,362 |  |  |  | 12.4 |  |  |  | 23,647 |  |  |  | 4.5 |  |  |  | 34,157 |  |  |  | 6.5 |
Tier 1 capital (to risk weighted assets) |  |  | 65,362 |  |  |  | 12.4 |  |  |  | 31,530 |  |  |  | 6.0 |  |  |  | 42,039 |  |  |  | 8.0 |
Tier 1 capital (to average assets) |  |  | 65,362 |  |  |  | 10.0 |  |  |  | 26,179 |  |  |  | 4.0 |  |  |  | 32,724 |  |  |  | 5.0 |
Lakestone Bank & Trust |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total capital (to risk weighted assets) |  | $ | 63,885 |  |  |  | 15.0 | % |  | $ | 34,056 |  |  |  | 8.0 | % |  | $ | 42,570 |  |  |  | 10.0 | %
Common equity Tier 1 capital (to risk weighted assets) |  |  | 63,885 |  |  |  | 15.0 |  |  |  | 19,156 |  |  |  | 4.5 |  |  |  | 27,670 |  |  |  | 6.5 |
Tier 1 capital (to risk weighted assets) |  |  | 63,885 |  |  |  | 15.0 |  |  |  | 25,542 |  |  |  | 6.0 |  |  |  | 34,056 |  |  |  | 8.0 |
Tier 1 capital (to average assets) |  |  | 63,885 |  |  |  | 9.0 |  |  |  | 28,338 |  |  |  | 4.0 |  |  |  | 35,423 |  |  |  | 5.0 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ChoiceOne Financial Services Inc. |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total capital (to risk weighted assets) |  | $ | 72,148 |  |  |  | 13.8 | % |  | $ | 41,811 |  |  |  | 8.0 | % |  |  | N/A |  |  |  | N/A |
Common equity Tier 1 capital (to risk weighted assets) |  |  | 67,481 |  |  |  | 12.9 |  |  |  | 23,519 |  |  |  | 4.5 |  |  |  | N/A |  |  |  | N/A |
Tier 1 capital (to risk weighted assets) |  |  | 67,481 |  |  |  | 12.9 |  |  |  | 31,359 |  |  |  | 6.0 |  |  |  | N/A |  |  |  | N/A |
Tier 1 capital (to average assets) |  |  | 67,481 |  |  |  | 10.5 |  |  |  | 25,658 |  |  |  | 4.0 |  |  |  | N/A |  |  |  | N/A |
ChoiceOne Bank |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total capital (to risk weighted assets) |  | $ | 66,976 |  |  |  | 12.9 | % |  | $ | 41,599 |  |  |  | 8.0 | % |  | $ | 51,999 |  |  |  | 10.0 | %
Common equity Tier 1 capital (to risk weighted assets) |  |  | 62,309 |  |  |  | 12.0 |  |  |  | 23,399 |  |  |  | 4.5 |  |  |  | 33,799 |  |  |  | 6.5 |
Tier 1 capital (to risk weighted assets) |  |  | 62,309 |  |  |  | 12.0 |  |  |  | 31,199 |  |  |  | 6.0 |  |  |  | 41,599 |  |  |  | 8.0 |
Tier 1 capital (to average assets) |  |  | 62,309 |  |  |  | 9.8 |  |  |  | 25,512 |  |  |  | 4.0 |  |  |  | 31,890 |  |  |  | 5.0 |
Banking regulations limit capital distributions by state-chartered banks. Generally, capital distributions are limited to undistributed net income for the current and prior two years. At December 31, 2019, approximately $12.9 million was available for the Banks to pay dividends to ChoiceOne. ChoiceOne’s ability to pay dividends to shareholders is dependent on the payment of dividends from the Banks, which is restricted by state law and regulations.

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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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