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Regulatory Matters
 12 Months Ended
Dec. 31, 2019
Banking and Thrift [Abstract]  
Regulatory Matters Regulatory Matters

We are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements as set forth in the following tables can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on our consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that involve quantitative measures of our assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and the Bank’s prompt corrective action classification are also subject to qualitative judgments by the regulators about components of capital, risk weightings and other factors.
 
Management reviews capital ratios on a regular basis to ensure that capital exceeds the prescribed regulatory minimums and is adequate to meet our anticipated future needs.  For all periods presented, the Bank’s ratios exceed the regulatory definition of “well capitalized” under the regulatory framework for prompt corrective action and Bancorp’s ratios exceed the required minimum ratios to be considered a well capitalized bank holding company. In addition, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action as of December 31, 2019. There are no conditions or events since that notification that Management believes have changed the Bank’s categories and we expect the Bank to remain well capitalized for prompt corrective action purposes.

In July 2013, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency ("Agencies") finalized regulatory capital rules known as “Basel III.” Fully phased in on January 1, 2019, Basel III required the Bank to maintain (i) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 8.5%, and (ii) a minimum ratio of common equity Tier 1 capital to risk-weighted assets of at least 7.0%, both inclusive of a 2.50% “capital conservation buffer." The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and was phased in over a four-year period (increasing by 0.625% each subsequent January 1, until it reached 2.50% on January 1, 2019). In August 2018, the Board of Governors of the Federal Reserve System changed the definition of a "Small Bank Holding Company" by increasing the asset threshold from $1.0 billion to $3.0 billion. As a result, Bancorp is no longer subject to separate minimum capital requirements. However, we disclose comparative capital ratios for Bancorp, which would have exceeded well-capitalized levels had Bancorp been subject to the same minimum capital requirements.

The Bancorp’s and Bank's capital adequacy ratios as of December 31, 2019 and 2018 are presented in the following tables. Bancorp's Tier 1 capital includes the subordinated debentures, which are not included at the Bank level.
Capital Ratios for Bancorp
(dollars in thousands)
Actual Ratio
 
Adequately Capitalized Threshold 1
 
Ratio to be a Well Capitalized Bank Holding Company
December 31, 2019
Amount

Ratio

 
Amount

Ratio

 
Amount

Ratio

Total Capital (to risk-weighted assets)
$
319,317

15.07
%
 
≥ $
222,430

≥ 10.500
%
 
≥ $
211,838

≥ 10.000
%
Tier 1 Capital (to risk-weighted assets)
$
301,553

14.24
%
 
≥ $
180,063

≥ 8.500
%
 
≥ $
169,471

≥ 8.000
%
Tier 1 Capital (to average assets)
$
301,553

11.66
%
 
≥ $
103,489

≥ 4.000
%
 
≥ $
129,361

≥ 5.000
%
Common Equity Tier 1 (to risk-weighted assets)
$
298,845

14.11
%
 
≥ $
148,287

≥ 7.000
%
 
≥ $
137,695

≥ 6.500
%
December 31, 2018
 

 

 
 

 

 
 

 

Total Capital (to risk-weighted assets)
$
305,224

14.93
%
 
≥ $
201,943

≥ 9.875
%
 
≥ $
204,499

≥ 10.000
%
Tier 1 Capital (to risk-weighted assets)
$
288,445

14.10
%
 
≥ $
161,043

≥ 7.875
%
 
≥ $
163,599

≥ 8.000
%
Tier 1 Capital (to average assets)
$
288,445

11.54
%
 
≥ $
100,011

≥ 4.000
%
 
≥ $
125,013

≥ 5.000
%
Common Equity Tier 1 (to risk-weighted assets)
$
285,805

13.98
%
 
≥ $
130,368

≥ 6.375
%
 
≥ $
132,925

≥ 6.500
%
1 The adequately capitalized threshold includes the capital conservation buffer that was effective in 2018 and fully phased-in on January 1, 2019.
Capital Ratios for the Bank  (dollars in thousands)
Actual Ratio
 
Adequately Capitalized Threshold 1
 
Ratio to be Well Capitalized under Prompt Corrective Action Provisions
December 31, 2019
Amount

Ratio

 
Amount

Ratio

 
Amount

Ratio

Total Capital (to risk-weighted assets)
$
309,875

14.63
%
 
≥ $
222,437

≥ 10.500
%
 
≥ $
211,844

≥ 10.000
%
Tier 1 Capital (to risk-weighted assets)
$
292,111

13.79
%
 
≥ $
180,068

≥ 8.500
%
 
≥ $
169,476

≥ 8.000
%
Tier 1 Capital (to average assets)
$
292,111

11.29
%
 
≥ $
103,488

≥ 4.000
%
 
≥ $
129,360

≥ 5.000
%
Common Equity Tier 1 (to risk-weighted assets)
$
292,111

13.79
%
 
≥ $
148,291

≥ 7.000
%
 
≥ $
137,699

≥ 6.500
%
December 31, 2018
 

 

 
 

 

 
 

 

Total Capital (to risk-weighted assets)
$
285,969

13.98
%
 
≥ $
201,927

≥ 9.875
%
 
≥ $
204,483

≥ 10.000
%
Tier 1 Capital (to risk-weighted assets)
$
269,191

13.16
%
 
≥ $
161,031

≥ 7.875
%
 
≥ $
163,587

≥ 8.000
%
Tier 1 Capital (to average assets)
$
269,191

10.77
%
 
≥ $
99,994

≥ 4.000
%
 
≥ $
124,992

≥ 5.000
%
Common Equity Tier 1 (to risk-weighted assets)
$
269,191

13.16
%
 
≥ $
130,358

≥ 6.375
%
 
≥ $
132,914

≥ 6.500
%
1 The adequately capitalized threshold includes the capital conservation buffer that was effective in 2018 and fully phased-in on January 1, 2019.