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REGULATORY CAPITAL
 12 Months Ended
Dec. 31, 2019
REGULATORY CAPITAL  
Regulatory Capital

25.  REGULATORY CAPITAL

The Company is subject to various capital requirements administered by the federal banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. 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. For a more detailed discussion see the Capital Resources section of Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A).

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets. Additionally, under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. As of December 31, 2019 and 2018, the Company was categorized as Well Capitalized under the regulatory framework for prompt corrective action promulgated by the Federal Reserve. The Company believes that no conditions or events have occurred that would change this conclusion. To be categorized as well capitalized, the Company must maintain minimum total risk-based, common equity Tier 1 risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AT DECEMBER 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TO BE WELL

 

 

 

 

 

 

 

 

 

 

 

 

 

MINIMUM

 

CAPITALIZED

 

 

 

 

 

 

 

 

 

 

 

 

 

REQUIRED

 

UNDER

 

 

 

 

 

 

 

 

 

 

 

 

 

FOR

 

PROMPT

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL

 

CORRECTIVE

 

 

 

 

 

 

 

 

 

 

 

 

 

ADEQUACY

 

ACTION

 

 

 

COMPANY

 

BANK

 

PURPOSES

 

REGULATIONS*

 

 

    

AMOUNT

    

RATIO

    

AMOUNT

    

RATIO

    

RATIO

    

RATIO

 

 

 

(IN THOUSANDS, EXCEPT RATIOS)

 

Total Capital (To Risk Weighted Assets)

 

$

132,544

 

13.49

%  

$

119,477

 

12.23

%  

8.00

%  

10.00

%

Tier 1 Common Equity (To Risk Weighted Assets)

 

 

102,841

 

10.47

 

 

109,173

 

11.17

 

4.50

 

6.50

 

Tier 1 Capital (To Risk Weighted Assets)

 

 

114,729

 

11.68

 

 

109,173

 

11.17

 

6.00

 

8.00

 

Tier 1 Capital (To Average Assets)

 

 

114,729

 

9.87

 

 

109,173

 

9.50

 

4.00

 

5.00

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

AT DECEMBER 31, 2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TO BE WELL

 

 

 

 

 

 

 

 

 

 

 

 

 

MINIMUM

 

CAPITALIZED

 

 

 

 

 

 

 

 

 

 

 

 

 

REQUIRED

 

UNDER

 

 

 

 

 

 

 

 

 

 

 

 

 

FOR

 

PROMPT

 

 

 

 

 

 

 

 

 

 

 

 

 

CAPITAL

 

CORRECTIVE

 

 

 

 

 

 

 

 

 

 

 

 

 

ADEQUACY

 

ACTION

 

 

 

COMPANY

 

BANK

 

PURPOSES

 

REGULATIONS*

 

 

    

AMOUNT

    

RATIO

    

AMOUNT

    

RATIO

    

RATIO

    

RATIO

 

 

 

(IN THOUSANDS, EXCEPT RATIOS)

 

Total Capital (To Risk Weighted Assets)

 

$

129,178

 

13.53

%  

$

115,451

 

12.14

%  

8.00

%  

10.00

%

Tier 1 Common Equity (To Risk Weighted Assets)

 

 

100,258

 

10.50

 

 

105,891

 

11.14

 

4.50

 

6.50

 

Tier 1 Capital (To Risk Weighted Assets)

 

 

112,130

 

11.74

 

 

105,891

 

11.14

 

6.00

 

8.00

 

Tier 1 Capital (To Average Assets)

 

 

112,130

 

9.71

 

 

105,891

 

9.28

 

4.00

 

5.00

 

*Applies to the Bank only.

Additionally, while not a regulatory capital ratio, the Company’s tangible common equity ratio (non-GAAP) was 7.48% and 7.49% for 2019 and 2018, respectively. See the discussion of the tangible common equity ratio under the Balance Sheet section of the MD&A.