CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2019

CAPITAL REQUIREMENTS

CAPITAL REQUIREMENTS

NOTE 20 - CAPITAL REQUIREMENTS

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. The net unrealized gain or loss on available for sale securities and cashflow hedges are not included in computing regulatory capital.  Management believes as of December 31, 2019, the Company and Bank meet all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2019 and 2018, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

The Bank’s actual amounts and ratios, exclusive of the capital conservation buffer, are presented below as of December 31, 2019 and December 31, 2018:

									To Be Well
									Capitalized
									Under Prompt
					For Capital				Corrective
	Actual				Adequacy Purposes				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
December 31, 2019
Bank Only
Total Capital (to Risk-Weighted Assets)	$	111,294	14.7	%	$	60,584	8.0	%	$	75,731	10.0	%
Tier I Capital (to Risk-Weighted Assets)		102,759	13.6			45,438	6.0			60,584	8.0
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		102,759	13.6			34,079	4.5			49,225	6.5
Tier I Capital (to Average Assets)		102,759	9.3			44,164	4.0			55,206	5.0
December 31, 2018
Bank Only
Total Capital (to Risk-Weighted Assets)	$	105,345	14.7	%	$	57,496	8.0	%	$	71,870	10.0	%
Tier I Capital (to Risk-Weighted Assets)		97,143	13.5			43,122	6.0			57,496	8.0
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		97,143	13.5			32,341	4.5			46,715	6.5
Tier I Capital (to Average Assets)		97,143	9.2			42,348	4.0			53,047	5.0