XML 39 R21.htm IDEA: XBRL DOCUMENT v3.7.0.1
Capital Requirements
 12 Months Ended
Dec. 31, 2016
Capital Requirements  
Capital Requirements
(14)   Capital Requirements
The Company and the Bank are subject to various regulatory capital requirements administered by federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification of the Company and the Bank are subject to qualitative judgments by the regulators about components, risk-weightings, and other factors.
In July 2013, the federal banking agencies issued final rules to implement the Basel III regulatory capital reforms and changes required by the Dodd-Frank Act. The phase-in period for the Company began on January 1, 2015. The Federal Reserve System’s (FRB) capital adequacy guidelines require that bank holding companies maintain a Common Equity Tier 1 risk-based capital ratio equal to at least 4.5% of its risk-weighted assets, a Tier 1 risk-based capital ratio equal to at least 6% of its risk-weighted assets and a total risk-based capital ratio equal to at least 8% of its risk-weighted assets. In addition, bank holding companies generally are required to maintain a Tier 1 leverage ratio of at least 4%.
In addition, the final rules establish a common equity tier 1 capital conservation buffer of 2.5% of risk-weighted assets applicable to all banking organizations. Institutions that do not maintain the required capital buffer will become subject to progressively more stringent limitations on the percentage of earnings that can be paid out in dividends or used for stock repurchases and on the payment of discretionary bonuses to senior executive management. The capital conservation buffer requirement will be phased in over four years beginning in 2016. On January 1, 2016, the first phase of the requirement went into effect at 0.625% of risk-weighted assets, and the requirement will increase each subsequent year by an additional 0.625 percentage points, to reach its final level of 2.5% of risk weighted assets on January 1, 2019. Once fully phase in , the capital conservation buffer requirement effectively raises the minimum required risk-based capital ratios to 7% Common Equity Tier 1 Capital, 8.5% Tier 1 Capital and 10.5% Total Capital on a fully phased-in basis.
Under the Basel III requirements, at December 31, 2016 and December 31, 2015, the Company met all capital adequacy requirements and had regulatory capital ratios in excess of the levels established for well-capitalized institutions, as shown in the following table as of periods indicated:
     
Actual
    
Required for Capital 
Adequacy Purposes
    
Well-Capitalized Under 
Prompt Corrective Action 
Provision
  
(in thousands)
    
Amount
    
Ratio
    
Amount
    
Ratio
    
Amount
    
Ratio
  
December 31, 2016  
Total Capital (to risk-weighted assets):              
Company       $  152,864           13.72%         $  89,118           8.00%         $  N.A.           N.A.%    
Bank         148,304           13.36           88,804           8.00           111,005           10.00    
Tier I Capital (to risk-weighted assets):              
Company       $ 125,779           11.29%         $ 66,839           6.00%         $ N.A.           N.A.%    
Bank         138,258           12.46           66,603           6.00           88,804           8.00    
Common Equity Tier I Capital (to risk-weighted assets)
              
Company       $ 94,818           8.51%         $ 50,129           4.50%         $ N.A.           N.A.%    
Bank         138,258           12.46           49,952           4.50           72,153           6.50    
Tier I leverage ratio:              
Company       $ 125,779           9.87%         $ 50,998           4.00%         $ N.A.           N.A.%    
Bank         138,258           10.88           50,810           4.00           63,513           5.00    
(in thousands)  
December 31, 2015  
Total Capital (to risk-weighted assets):              
Company       $ 146,068           14.78%         $ 79,066           8.00%         $ N.A.           N.A.%    
Bank         137,572           13.98           78,718           8.00           98,398           10.00    
Tier I Capital (to risk-weighted assets):              
Company       $ 118,875           12.03%         $ 59,299           6.00%         $ N.A.           N.A.%    
Bank         128,808           13.09           59,039           6.00           78,718           8.00    
Common Equity Tier I Capital (to risk-weighted assets)
              
Company       $ 89,304           9.04%         $ 44,475           4.50%         $ N.A.           N.A.%    
Bank         128,808           13.09           44,279           4.50           63,959           6.50    
Tier I leverage ratio:              
Company       $ 118,875           9.84%         $ 48,314           4.00%         $ N.A.           N.A.%    
Bank         128,808           10.73           48,025           4.00           60,031           5.00