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Capital Ratios | 6 Months Ended
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Jun. 30, 2019
Capital Ratios [Abstract] |
Capital Ratios | Note 11. Capital Ratios Capital adequacy is currently defined by regulatory agencies through the use of several minimum required ratios. In July 2013, Federal banking regulators approved the final rules from the Basel Committee on Banking Supervision for the regulation of capital requirements for bank holding companies and U.S banks, generally referred to as “Basel III.” The Basel III standards were effective for the Corporation and the Bank, effective January 1, 2015 (subject to a phase-in period for certain provisions). Basel III imposes significantly higher capital requirements and more restrictive leverage and liquidity ratios than those previously in place. The capital ratios to be considered “well capitalized” under Basel III are: (1) Common Equity Tier 1 (CET1) of 6.5%, (2) Tier 1 Leverage of 5%, (3) Tier 1 Risk-Based Capital of 8%, and (4) Total Risk-Based Capital of 10%. The CET1 ratio is a new capital ratio under Basel III and the Tier 1 risk-based capital ratio of 8% has been increased from 6%. The rules also include changes in the risk weights of certain assets to better reflect credit and other risk exposures. In addition, a capital conservation buffer was phased-in beginning January 1, 2016 at 0.625%, 1.25% for 2017, 1.875% for 2018 and 2.50% for 2019 and thereafter. The capital conservation buffer will be applicable to all of the capital ratios except for the Tier1 Leverage ratio. The capital conservation buffer is equal to the lowest value of the three applicable capital ratios less the regulatory minimum for each respective capital measurement. The Bank’s capital conservation buffer at June 30, 2019 was 7.19% (total risk-based capital 15.19% less 8.00%) compared to the 2019 regulatory buffer of 2.50%. Compliance with the capital conservation buffer is required in order to avoid limitations to certain capital distributions and is in addition to the Basel III capital requirements. As of June 30, 2019, the Bank was “well capitalized’ under the Basel III requirements. The following table summarizes the Basel III regulatory capital requirements and results as of June 30, 2019 and December 31, 2018 for the Corporation and the Bank: ﻿
﻿ |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  | Regulatory Ratios
﻿ |  |  |  |  |  | Adequately |  | Well
﻿ |  | June 30, |  | December 31, |  | Capitalized |  | Capitalized
﻿(Dollars in thousands) |  | 2019 |  | 2018 |  | Minimum |  | Minimum
﻿ |  |  |  |  |  |  |  |
﻿Common Equity Tier 1 Risk-based Capital Ratio (1) |  |  |  |  |  |  |  |
﻿Franklin Financial Services Corporation |  | 13.93% |  | 13.96% |  | 4.500% |  | N/A
﻿Farmers & Merchants Trust Company |  | 13.77% |  | 13.80% |  | 4.500% |  | 6.50%
﻿ |  |  |  |  |  |  |  |
﻿Tier 1 Risk-based Capital Ratio (2) |  |  |  |  |  |  |  |
﻿Franklin Financial Services Corporation |  | 13.93% |  | 13.96% |  | 6.000% |  | N/A
﻿Farmers & Merchants Trust Company |  | 13.77% |  | 13.80% |  | 6.000% |  | 8.00%
﻿ |  |  |  |  |  |  |  |
﻿Total Risk-based Capital Ratio (3) |  |  |  |  |  |  |  |
﻿Franklin Financial Services Corporation |  | 15.19% |  | 15.21% |  | 8.000% |  | N/A
﻿Farmers & Merchants Trust Company |  | 15.02% |  | 15.06% |  | 8.000% |  | 10.00%
﻿ |  |  |  |  |  |  |  |
﻿Tier 1 Leverage Ratio (4) |  |  |  |  |  |  |  |
﻿Franklin Financial Services Corporation |  | 9.63% |  | 9.78% |  | 4.000% |  | N/A
﻿Farmers & Merchants Trust Company |  | 9.52% |  | 9.68% |  | 4.000% |  | 5.00%
﻿ |  |  |  |  |  |  |  |
﻿(1) Common equity Tier 1 capital/ total risk-weighted assets (2) Tier 1 capital / total risk-weighted assets
﻿(3) Total risk-based capital / total risk-weighted assets, (4) Tier 1 capital / average quarterly assets

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- 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://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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&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=84167132&loc=d3e65071-112826 + Details
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