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Capital Ratios | 9 Months Ended
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Sep. 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 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 at 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 September 30, 2019 was 7.80% (total risk-based capital 15.80% 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 September 30, 2019, the Bank was “well capitalized’ under the Basel III requirements. The consolidated asset limit on small bank holding companies is $3 billion and a company with assets under that limit is not subject to the consolidated capital rules, but may file reports that include capital amounts and ratios. The Corporation has elected to file those reports. ﻿ The following table summarizes the Basel III regulatory capital requirements and results as of September 30, 2019 and December 31, 2018 for the Corporation and the Bank: ﻿
﻿ |  |  |  |  |  |  |  |
﻿ |  |  |  |  |  | Regulatory Ratios
﻿ |  |  |  |  |  | Adequately |  | Well
﻿ |  | September 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 |  | 14.53% |  | 13.96% |  | N/A |  | N/A
﻿Farmers & Merchants Trust Company |  | 14.27% |  | 13.80% |  | 4.500% |  | 6.50%
﻿ |  |  |  |  |  |  |  |
﻿Tier 1 Risk-based Capital Ratio (2) |  |  |  |  |  |  |  |
﻿Franklin Financial Services Corporation |  | 14.53% |  | 13.96% |  | N/A |  | N/A
﻿Farmers & Merchants Trust Company |  | 14.27% |  | 13.80% |  | 6.000% |  | 8.00%
﻿ |  |  |  |  |  |  |  |
﻿Total Risk-based Capital Ratio (3) |  |  |  |  |  |  |  |
﻿Franklin Financial Services Corporation |  | 15.80% |  | 15.21% |  | N/A |  | N/A
﻿Farmers & Merchants Trust Company |  | 15.52% |  | 15.06% |  | 8.000% |  | 10.00%
﻿ |  |  |  |  |  |  |  |
﻿Tier 1 Leverage Ratio (4) |  |  |  |  |  |  |  |
﻿Franklin Financial Services Corporation |  | 9.45% |  | 9.78% |  | N/A |  | N/A
﻿Farmers & Merchants Trust Company |  | 9.28% |  | 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 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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