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Minimum Regulatory Capital Requirements
 12 Months Ended
Dec. 31, 2021
Regulatory Matters [Abstract]  
Minimum Regulatory Capital Requirements

Note 15. Minimum Regulatory Capital Requirements

 

Banks and bank holding companies are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, 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, financial institutions must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. A financial

institution's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

 

The Basel III Capital Rules phased-in over a multi-year schedule and were fully phased-in on January 1, 2019. Under the Basel III rules, banks must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios of 2.50% for all ratios, except the tier 1 leverage ratio. If a banking organization dips into its capital conservation buffer, it is subject to limitations on certain activities, including payment of dividends, share repurchases, and discretionary compensation to certain officers. Management believes as of December 31, 2021 and 2020, the Bank met all capital adequacy requirements to which it is subject.

 

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 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 December 31, 2021, the most recent regulatory notification categorized the Bank as well capitalized under the regulatory framework. There are no conditions or events since that notification that management believes have changed the institution's category.

Federal and state banking regulations place certain restrictions on dividends paid by the Company. The total amount of dividends that may be paid at any date is generally limited to retained earnings of the Company. Pursuant to the EGRRCPA, regulators have provided for an optional, simplified measure of capital adequacy, the community bank leverage ratio ("CBLR") framework, for qualifying community bank organizations. Banks that qualify may opt in to the CBLR framework beginning January 1, 2020 or any time thereafter. The CBLR framework eliminates the four required capital ratios disclosed below and requires the disclosure of a single leverage ratio, with a minimum requirement of 9%. The Company has not opted into the CBLR framework.

The following tables present capital ratios for the Bank as of the dates stated. Adequately capitalized ratios include the conversation buffer.

 

 

 

December 31, 2021

 

 

 

Actual

 

 

For Capital
Adequacy
Purposes

 

 

To Be Well
Capitalized

 

(Dollars in thousands)

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

Total risk based capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(To risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

273,978

 

 

 

13.11

%

 

$

219,393

 

 

 

10.50

%

 

$

208,946

 

 

 

10.00

%

Tier 1 capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(To risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

260,896

 

 

 

12.49

%

 

$

177,604

 

 

 

8.50

%

 

$

167,157

 

 

 

8.00

%

Common equity tier 1 capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(To risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

260,896

 

 

 

12.49

%

 

$

146,262

 

 

 

7.00

%

 

$

135,815

 

 

 

6.50

%

Tier 1 leverage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(To average assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

260,896

 

 

 

10.05

%

 

$

103,883

 

 

 

4.00

%

 

$

129,853

 

 

 

5.00

%

 

 

 

 

December 31, 2020

 

 

 

Actual

 

 

For Capital
Adequacy
Purposes

 

 

To Be Well
Capitalized

 

(Dollars in thousands)

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

Total risk based capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(To risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

109,219

 

 

 

13.10

%

 

$

87,574

 

 

 

10.50

%

 

$

83,404

 

 

 

10.00

%

Tier 1 capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(To risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

98,751

 

 

 

11.84

%

 

$

70,893

 

 

 

8.50

%

 

$

66,723

 

 

 

8.00

%

Common equity tier 1 capital

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(To risk-weighted assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

98,751

 

 

 

11.84

%

 

$

58,383

 

 

 

7.00

%

 

$

54,213

 

 

 

6.50

%

Tier 1 leverage

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(To average assets)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Blue Ridge Bank, N.A.

 

$

98,751

 

 

 

8.34

%

 

$

47,363

 

 

 

4.00

%

 

$

59,180

 

 

 

5.00

%