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REGULATORY MATTERS
 12 Months Ended
Dec. 31, 2018
REGULATORY MATTERS [Abstract]  
REGULATORY MATTERS
15. REGULATORY MATTERS
Dividend Restrictions:
The approval of the Federal Reserve Board (FRB) is required for the Bank to pay dividends to the Company if the total of all dividends declared in any calendar year exceeds the Bank’s net income (as defined) for that year combined with its retained net income for the preceding two calendar years. Under this formula, the Bank can declare dividends in 2019 without approval of the FRB or Pennsylvania Department of Banking of approximately $15,681,000, plus the Bank’s 2019 year-to-date net income at the time of the dividend declaration.
Loans:
The Bank is subject to regulatory restrictions which limit its ability to loan funds to the Company.  At December 31, 2018, the Bank’s regulatory lending limit amounted to approximately $21,191,000.
Regulatory Capital Requirements:
Federal regulations require the Company and the Bank to maintain minimum amounts of capital. Specifically, each is required to maintain certain minimum dollar amounts and ratios of Total, Tier I and Common Equity Tier I capital to risk-weighted assets and of Tier I capital to average total assets.
In addition to the capital requirements, the Federal Deposit Insurance Corporation Improvement Act (FDICIA) established five capital categories ranging from “well capitalized” to “critically under-capitalized.” Should any institution fail to meet the requirements to be considered “adequately capitalized”, it would become subject to a series of increasingly restrictive regulatory actions.
As of December 31, 2018 and 2017, the FRB categorized the Company and the Bank as well capitalized, under the regulatory framework for prompt corrective action.  To be categorized as a well capitalized financial institution, Total risk-based, Tier I risk-based, Common Equity Tier I risk based and Tier I leverage capital ratios must be at least 10%, 8%, 6.5% and 5%, respectively.
The Company and Bank’s computed risk‑based capital ratios are as follows as of December 31, 2018 and 2017 (dollars in thousands):
 
 
Actual
  
For Capital Adequacy Purposes
  
To Be Well Capitalized
Under Prompt Corrective Action Provisions
 
2018
 
Amount
  
Ratio
  
Amount
  
Ratio
  
Amount
  
Ratio
 
Total Capital (to Risk Weighted Assets):
 
Company
 
$
141,272
   
13.42
%
 
$
84,227
   
8.00
%
 
$
105,284
   
10.00
%
  Bank
 
$
134,841
   
12.82
%
 
$
84,141
   
8.00
%
 
$
105,176
   
10.00
%
 
                        
Tier 1 Capital (to Risk Weighted Assets):
 
Company
 
$
128,224
   
12.18
%
 
$
63,171
   
6.00
%
 
$
84,227
   
8.00
%
  Bank
 
$
121,792
   
11.58
%
 
$
63,106
   
6.00
%
 
$
84,141
   
8.00
%
 
                        
Common Equity Tier 1 Capital (to Risk Weighted Assets):
 
Company
 
$
120,724
   
11.47
%
 
$
47,378
   
4.50
%
 
$
68,435
   
6.50
%
  Bank
 
$
121,792
   
11.58
%
 
$
47,329
   
4.50
%
 
$
68,364
   
6.50
%
 
                        
Tier 1 Capital (to Average Assets):
 
Company
 
$
128,224
   
9.15
%
 
$
56,041
   
4.00
%
 
$
70,051
   
5.00
%
  Bank
 
$
121,792
   
8.70
%
 
$
56,018
   
4.00
%
 
$
70,023
   
5.00
%

 
 
Actual
  
For Capital Adequacy Purposes
  
To Be Well Capitalized
Under Prompt Corrective Action Provisions
 
2017
 
Amount
  
Ratio
  
Amount
  
Ratio
  
Amount
  
Ratio
 
Total Capital (to Risk Weighted Assets):
 
Company
 
$
128,578
   
13.20
%
 
$
77,906
   
8.00
%
 
$
97,383
   
10.00
%
Bank
 
$
122,469
   
12.58
%
 
$
77,852
   
8.00
%
 
$
97,315
   
10.00
%
Tier 1 Capital (to Risk Weighted Assets):
 
Company
 
$
117,224
   
12.04
%
 
$
58,430
   
6.00
%
 
$
77,906
   
8.00
%
Bank
 
$
111,114
   
11.42
%
 
$
58,389
   
6.00
%
 
$
77,852
   
8.00
%
Common Equity Tier 1 Capital (to Risk Weighted Assets):
 
Company
 
$
109,724
   
11.27
%
 
$
43,822
   
4.50
%
 
$
63,299
   
6.50
%
Bank
 
$
111,114
   
11.42
%
 
$
43,792
   
4.50
%
 
$
63,255
   
6.50
%
Tier 1 Capital (to Average Assets):
 
Company
 
$
117,224
   
9.18
%
 
$
51,085
   
4.00
%
 
$
63,857
   
5.00
%
Bank
 
$
111,114
   
8.71
%
 
$
51,023
   
4.00
%
 
$
63,778
   
5.00
%

This annual report has not been reviewed, or confirmed for accuracy or relevance, by the Federal Deposit Insurance Corporation.