XML 62 R23.htm IDEA: XBRL DOCUMENT v3.20.1
Regulatory Matters
 12 Months Ended
Dec. 31, 2019
Banking and Thrift [Abstract]  
Regulatory Matters Regulatory Matters
The Bank is subject to regulatory capital requirements administered by the OCC. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, 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 action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.
In July 2013, the Federal bank regulatory agencies issued a final rule that revised their risk-based capital requirements and the method for calculating components of capital and of computing risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. The rule established a common equity Tier 1 minimum capital requirement, increased the minimum capital ratios and assigned a higher risk weight to certain assets based on the risk associated with these assets. The final rule also included a capital conservation buffer which was phased in over a five-year period until it reached 2.5% on January 1, 2019.
Dividends paid by the Bank are the primary source of funds available to the Company. Banking regulations limit the amount of dividends that may be paid without prior approval of the regulatory authorities.
Quantitative measures established by regulation to ensure capital adequacy requires the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 risk-based capital (as defined) to average assets and risk-weighted assets (as defined). Management believes, as of December 31, 2019 and 2018, that the Bank met all capital adequacy requirements to which it was subject.
As of December 31, 2019 and 2018, the most recent notification from the OCC categorized the Bank as “well capitalized” under the OCC regulatory classification framework. To be categorized as “well capitalized,” the Bank must maintain minimum Total risk-based, Tier 1 risk-based, Tier 1 leverage and common equity Tier 1 ratios as set forth in the following table. There are no conditions or events since that notification that management believes have changed the Bank’s category.
The following table presents actual and required capital ratios for the the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of December 31, 2019 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules were fully phased-in. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

ActualMinimum Capital
Required – Basel III
Fully Phased-In		To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
(dollars in thousands)AmountRatioAmountRatioAmountRatio
December 31, 2019
Bank:
Common equity Tier 1 capital
$240,176  14.22 %$118,213  7.00 %$109,769  6.50 %
Tier 1 risk-based capital
240,176  14.22  143,545  8.50  135,101  8.00  
Total risk-based capital
258,044  15.28  177,320  10.50  168,876  10.00  
Tier 1 leverage capital
240,176  11.17  86,004  4.00  107,506  5.00  

ActualMinimum Capital
Required – Basel III
Fully Phased-In		To Be Well
Capitalized Under
Prompt Corrective
Action Provisions
(dollars in thousands)AmountRatioAmountRatioAmountRatio
December 31, 2018
Bank:
Common equity Tier 1 capital
$230,708  14.55 %$110,962  7.00 %$103,036  6.50 %
Tier 1 risk-based capital
230,708  14.55  134,740  8.50  126,814  8.00  
Total risk-based capital
247,056  15.59  166,443  10.50  158,517  10.00  
Tier 1 leverage capital
230,708  11.15  82,744  4.00  103,430  5.00