Regulatory Matters

12 Months Ended

Dec. 31, 2017

NOTE 22 – Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and Bank’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 the 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.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the table below) of Total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. Total capital includes Tier 1 and Tier 2 capital. Tier 2 capital consists of the allowance for loan losses subject to certain limitations. Management believes, as of December 31, 2017, that the Company and Bank exceed all well capitalized requirements to which they are subject.

The following table summarizes the capital amounts and ratios of the Bank and the Company and the regulatory minimum requirements at December 31, 2017 and 2016.


									To be well
									capitalized
					For capital				under prompt
					adequacy purposes				corrective action
	Actual					minimum		provisions minimum
(dollars in thousands)		Amount		Ratio	Amount		Ratio	Amount		Ratio
As of December 31, 2017
The Bank
Total Capital (to risk weighted assets)		$	175,016	12.99%	$	107,749	8.00%	$	134,686	10.00%
Tier 1 Capital (to risk weighted assets)			159,493	11.84%		80,812	6.00%		107,749	8.00%
Common Equity Tier 1 Capital (to risk weighted assets)			159,493	11.84%		60,609	4.50%		87,546	6.50%
Tier 1 Capital (to average assets)			159,493	10.04%		63,573	4.00%		79,466	5.00%

The Company
Total Capital (to risk weighted assets)			178,665	13.27%		107,749	8.00%		n/a	n/a
Tier 1 Capital (to risk weighted assets)			163,142	12.11%		80,812	6.00%		n/a	n/a
Common Equity Tier 1 Capital (to risk weighted assets)			150,142	11.15%		60,609	4.50%		n/a	n/a
Tier 1 Capital (to average assets)			163,142	10.26%		63,573	4.00%		n/a	n/a


								To be well
								capitalized
					For capital			under prompt
					adequacy purposes			corrective action
			Actual		minimum			provisions minimum
(dollars in thousands)	Amount		Ratio		Amount	Ratio		Amount	Ratio
As of December 31, 2016
The Bank
Total Capital (to risk weighted assets)	$	132,839	11.69	%	$90,910	8.00	%	$113,628	10.00	%
Tier 1 Capital (to risk weighted assets)		118,626	10.44	%	68,183	6.00	%	90,910	8.00	%
Common Equity Tier 1 Capital (to risk weighted assets)		118,626	10.44	%	51,137	4.50	%	73,864	6.50	%
Tier 1 Capital (to average assets)		118,626	9.08	%	52,273	4.00	%	65,342	5.00	%

The Company
Total Capital (to risk weighted assets)		137,588	12.11	%	90,910	8.00	%	n/a	n/a
Tier 1 Capital (to risk weighted assets)		123,375	10.86	%	68,183	6.00	%	n/a	n/a
Common Equity Tier 1 Capital (to risk weighted assets)		110,375	9.71	%	51,137	4.50	%	n/a	n/a
Tier 1 Capital (to average assets)		123,375	9.42	%	52,392	4.00	%	n/a	n/a

- Definition

The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1G
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958577-112826

Reference 2: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1C
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958572-112826

Reference 3: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1E
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958574-112826

Reference 4: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1H
-URI http://asc.fasb.org/extlink&oid=84167132&loc=d3e65071-112826

Reference 5: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1A
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958569-112826

Reference 6: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1B
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958570-112826

Reference 7: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1F
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958575-112826

Reference 8: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958568-112826

Reference 9: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 942
-SubTopic 505
-Section 50
-Paragraph 1D
-URI http://asc.fasb.org/extlink&oid=84167132&loc=SL5958573-112826

+ Details