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Note 17 - Regulatory Capital
 12 Months Ended
Dec. 31, 2018
Notes to Financial Statements  
Regulatory Capital Requirements under Banking Regulations [Text Block]
17.
REGULATORY CAPITAL
 
The Bank and Company are subject to regulatory capital requirements administered by banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements. As of
December 31, 2018,
the Bank and Company have met all capital adequacy requirements to which they are subject.
 
The prompt corrective action regulations provide
five
classifications, including well capitalized, adequately capitalized, under-capitalized, significantly undercapitalized, and critically undercapitalized, although these terms are
not
used to represent overall financial condition. If an institution is adequately capitalized, regulatory approval is required before the institution
may
accept brokered deposits. If an institution is undercapitalized, capital distributions are limited, as is asset growth and expansion, and plans for capital restoration are required.
 
The Basel III Capital Rules became effective for the Bank on
January 1, 2015
and certain provisions are subject to a phase-in period. The implementation of the capital conservation buffer began
January 1, 2016
at the
0.625%
level and has been fully phased in over a
four
-year period (increasing by that amount on each subsequent
January 1,
until it reached
2.5%
on
January 1, 2019).
The capital conservation buffer is designed to absorb losses during periods of economic stress. Banking institutions with a ratio of Common Equity Tier
1
capital to risk-weighted assets above the minimum but below the conservation buffer (or below the combined capital conservation buffer and countercyclical capital buffer, when the latter is applied) will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall.
 
The following tables present actual and required capital ratios as of
December 31, 2018
and
2017,
under the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.
 
   
As of December 31, 2018
  
           
Tier 1 Risk
    
Common
    
Total Risk
  
   
Leverage
     Based     Equity Tier 1     Based  
The Middlefield Banking Company
    
9.60
 %    
11.09
 %    
11.09
 %    
11.83
 %
Middlefield Banc Corp.
    
10.55
 %    
10.35
 %    
9.65
 %    
11.00
 %
Adequately capitalized ratio
    
4.00
 %    
6.00
 %    
4.50
 %    
8.00
 %
Adequately capitalized ratio plus fully phased-in capital conservation buffer
    
4.00
 %    
8.50
 %    
7.00
 %    
10.50
 %
Well-capitalized ratio (Bank only)
    
5.00
 %    
8.00
 %    
6.50
 %    
10.00
 %
 
   
As of December 31, 2017
  
           
Tier 1 Risk
    
Common
    
Total Risk
  
   
Leverage
     Based     Equity Tier 1     Based  
The Middlefield Banking Company
    
9.47
 %    
10.88
 %    
10.88
 %    
11.64
 %
Middlefield Banc Corp.
    
10.20
 %    
11.64
 %    
10.79
 %    
12.41
 %
Adequately capitalized ratio
    
4.00
 %    
6.00
 %    
4.50
 %    
8.00
 %
Adequately capitalized ratio plus fully phased-in capital conservation buffer
    
4.00
 %    
8.50
 %    
7.00
 %    
10.50
 %
Well-capitalized ratio (Bank only)
    
5.00
 %    
8.00
 %    
6.50
 %    
10.00
 %