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Regulatory Matters
 12 Months Ended
Dec. 31, 2021
Regulatory Assets and Liabilities Disclosure [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, 2021. 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 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. Bancorp's total assets were $4.3 billion and $2.9 billion at December 31, 2021 and 2020, respectively. As a result, Bancorp was only subject to separate minimum capital requirements for year ending December 31, 2021; however, we disclosed comparative capital ratios for Bancorp, which would have exceeded well-capitalized levels had Bancorp been subject to the same minimum capital requirements as of December 31, 2020.

The Bancorp’s and Bank's capital adequacy ratios as of December 31, 2021 and 2020 are presented in the following tables. The decrease in capital ratios as of December 31, 2021 from December 31, 2020 was largely attributable to shares repurchased totaling $40.7 million during 2021. Tier 1 Capital to average assets was also reduced by an increase in cash driven by deposit growth over and above that attributable to the Merger. In addition, as of December 31, 2020, Bancorp's Tier 1 capital included a subordinated debenture, which was not included at the Bank level. On March 15, 2021, Bancorp redeemed in full our last subordinated debenture due to NorCal Community Bancorp Trust II. Partially offsetting those factors, the Merger served to increase capital ratios as the proportion of risk-weighted assets to total assets was lower for ARB.
Capital Ratios for Bancorp
(dollars in thousands)
Actual RatioAdequately Capitalized ThresholdRatio to be a Well Capitalized Bank Holding Company
December 31, 2021AmountRatioAmountRatioAmountRatio
Total Capital (to risk-weighted assets)$397,101 14.58 %≥  $286,035 ≥ 10.50 %≥  $272,414 ≥ 10.00 %
Tier 1 Capital (to risk-weighted assets)$373,286 13.70 %≥  $231,552 ≥ 8.50 %≥  $217,931 ≥ 8.00 %
Tier 1 Capital (to average assets)$373,286 8.85 %≥  $168,750 ≥ 4.00 %≥  $210,937 ≥ 5.00 %
Common Equity Tier 1 (to risk-weighted assets)$373,286 13.70 %≥  $190,690 ≥ 7.00 %≥  $177,069 ≥ 6.50 %
December 31, 2020      
Total Capital (to risk-weighted assets)$339,544 16.03 %≥  $222,393 ≥ 10.50 %≥  $211,802 ≥ 10.00 %
Tier 1 Capital (to risk-weighted assets)$313,891 14.82 %≥  $180,032 ≥ 8.50 %≥  $169,442 ≥ 8.00 %
Tier 1 Capital (to average assets)$313,891 10.80 %≥  $116,224 ≥ 4.00 %≥  $145,280 ≥ 5.00 %
Common Equity Tier 1 (to risk-weighted assets)$311,114 14.69 %≥  $148,262 ≥ 7.00 %≥  $137,672 ≥ 6.50 %
Capital Ratios for the Bank (dollars in thousands)
Actual RatioAdequately Capitalized ThresholdRatio to be Well Capitalized under Prompt Corrective Action Provisions
December 31, 2021AmountRatioAmountRatioAmountRatio
Total Capital (to risk-weighted assets)$390,924 14.35 %≥  $286,009 ≥ 10.50 %≥  $272,390 ≥ 10.00 %
Tier 1 Capital (to risk-weighted assets)$367,109 13.48 %≥  $231,531 ≥ 8.50 %≥  $217,912 ≥ 8.00 %
Tier 1 Capital (to average assets)$367,109 8.70 %≥  $168,724 ≥ 4.00 %≥  $210,905 ≥ 5.00 %
Common Equity Tier 1 (to risk-weighted assets)$367,109 13.48 %≥  $190,673 ≥ 7.00 %≥  $177,053 ≥ 6.50 %
December 31, 2020      
Total Capital (to risk-weighted assets)$334,686 15.80 %≥  $222,391 ≥ 10.50 %≥  $211,801 ≥   10.00 %
Tier 1 Capital (to risk-weighted assets)$309,033 14.59 %≥  $180,031 ≥ 8.50 %≥  $169,441 ≥   8.00 %
Tier 1 Capital (to average assets)$309,033 10.64 %≥  $116,224 ≥ 4.00 %≥  $145,280 ≥   5.00 %
Common Equity Tier 1 (to risk-weighted assets)$309,033 14.59 %≥  $148,261 ≥ 7.00 %≥  $137,671 ≥   6.50 %