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Capital Requirements | 12 Months Ended
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Dec. 31, 2019
Capital Requirements |
Capital Requirements | (16) 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 began being 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 increased 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. At December 31, 2019, the capital conservation buffer of 2.5%, effectively raised 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, 2019 and December 31, 2018, 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:
|  |  |  |  |  |  | Minimum Capital |  | Required to be |
|  |  |  |  |  |  | Required - Basel III |  | Considered Well- |
|  | Actual |  | Fully Phased-In * |  | Capitalized |
(in thousands) |  | Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total Capital (to risk-weighted assets): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | $ | 179,430 |  | 14.89 | % | $ | 126,511 |  | 10.50 | % | $ | — |  | N.A | %
Bank |  |  | 175,459 |  | 14.60 |  |  | 126,165 |  | 10.50 |  |  | 120,158 |  | 10.00 |
Tier 1 Capital (to risk-weighted assets): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | $ | 157,139 |  | 13.04 | % | $ | 102,414 |  | 8.50 | % | $ | — |  | N.A | %
Bank |  |  | 162,822 |  | 13.55 |  |  | 102,134 |  | 8.50 |  |  | 96,126 |  | 8.00 |
Common Equity Tier 1 Capital (to risk-weighted assets): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | $ | 118,793 |  | 9.86 | % | $ | 84,341 |  | 7.00 | % | $ | — |  | N.A | %
Bank |  |  | 162,822 |  | 13.55 |  |  | 84,110 |  | 7.00 |  |  | 78,102 |  | 6.50 |
Tier 1 leverage ratio (to adjusted average assets): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | $ | 157,139 |  | 10.73 | % | $ | 58,562 |  | 4.00 | % | $ | — |  | N.A | %
Bank |  |  | 162,822 |  | 11.18 |  |  | 58,280 |  | 4.00 |  |  | 72,850 |  | 5.00 |
* At December 31, 2019 the Basel III capital conservation buffer requirement of 2.5% had been fully phased-in.
|  |  |  |  |  |  | Minimum Capital |  | Minimum Capital |  | Required to be |
|  |  |  |  |  |  | Required Under |  | Required - Basel III |  | Considered Well- |
|  | Actual |  | Basel III Phase-In |  | Fully Phased-In |  | Capitalized |
(in thousands) |  | Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio |  | Amount |  | Ratio |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total Capital (to risk-weighted assets): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | $ | 165,325 |  | 13.28 | % | $ | 122,916 |  | 9.875 | % | $ | 130,696 |  | 10.50 | % | $ | — |  | N.A. | %
Bank |  |  | 163,814 |  | 13.19 |  |  | 122,607 |  | 9.875 |  |  | 130,367 |  | 10.50 |  |  | 124,159 |  | 10.00 |
Tier 1 Capital (to risk-weighted assets): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | $ | 139,532 |  | 11.21 | % | $ | 98,022 |  | 7.875 | % | $ | 105,802 |  | 8.50 | % | $ | — |  | N.A. | %
Bank |  |  | 152,002 |  | 12.24 |  |  | 97,775 |  | 7.875 |  |  | 105,535 |  | 8.50 |  |  | 99,327 |  | 8.00 |
Common Equity Tier 1 Capital (to risk-weighted assets) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | $ | 105,513 |  | 8.48 | % | $ | 79,351 |  | 6.375 | % | $ | 87,131 |  | 7.00 | % | $ | — |  | N.A. | %
Bank |  |  | 152,002 |  | 12.24 |  |  | 79,151 |  | 6.375 |  |  | 86,911 |  | 7.00 |  |  | 80,703 |  | 6.50 |
Tier 1 leverage ratio (to adjusted average assets): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Company |  | $ | 139,532 |  | 9.55 | % | $ | 58,467 |  | 4.000 | % | $ | 58,467 |  | 4.00 | % | $ | — |  | N.A. | %
Bank |  |  | 152,002 |  | 10.43 |  |  | 58,272 |  | 4.000 |  |  | 58,272 |  | 4.00 |  |  | 72,839 |  | 5.00 |

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- Definition The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1C -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958572-112826 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1D -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958573-112826 Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1B -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958570-112826 Reference 4: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1A -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958569-112826 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1G -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958577-112826 Reference 6: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1F -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958575-112826 Reference 7: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1E -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958574-112826 Reference 8: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=117337116&loc=SL5958568-112826 Reference 9: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 505 -Section 50 -Paragraph 1H -URI http://asc.fasb.org/extlink&oid=117337116&loc=d3e65071-112826 + Details
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