Quantitative measures established by regulation to ensure capital adequacy require the Corporation and the Bank to maintain minimum amounts and ratios (set forth in the following table) of Total capital, Tier 1 capital and Tier 1 common capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined), or leverage ratio.

In July 2013, the federal bank regulatory agencies adopted final rules revising the agencies’ capital adequacy guidelines and prompt corrective action rules, designed to enhance such requirements and implement the revised standards of the Basel Committee on Banking Supervision, commonly referred to as Basel III. The new minimum capital requirements were effective on January 1, 2015. Under the new rules, in order to avoid limitations on capital distributions (including dividend payments and certain discretionary bonus payments to executive officers), a banking organization must hold a capital conservation buffer comprised of common equity Tier 1 capital above its minimum risk-based capital requirements in an amount greater than 2.50% of total risk-weighted assets. The capital conservation buffer requirements began to be phased in over a four-year period beginning January 1, 2016 with final phase in occurring 2019.

The Corporation adopted the new Basel III regulatory capital rules during the first quarter of 2015 under the transition rules, primarily relating to regulatory deductions and adjustments impacting common equity tier 1 capital and tier 1 capital, to be phased in over a four-year period beginning January 1, 2015. Under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. During 2018, the Corporation and the Bank must hold a capital conservation buffer greater than 1.875% above its minimum risk-based capital requirements in order to avoid limitations on capital distributions. The Corporation's and Bank's intent is to maintain capital levels in excess of the capital conservation buffer which would require Tier 1 Capital to Risk Weighted Assets to exceed 8.50% and Total Capital to Risk Weighted Assets to exceed 10.50% beginning in the first quarter of 2019.

The below table presents the Corporation's and Bank's actual and required capital ratios as of December 31, 2017 and December 31, 2016 under regulatory capital rules.

On December 6, 2017, the Corporation completed its public offering of common stock which increased shareholders' equity by $70.5 million. As of December 31, 2017, the capital raised remained at the Corporation and was not contributed to the Bank. See Note 3, "Common Stock Issuance" for additional information.



(Dollars in thousands)	Actual				For Capital Adequacy Purposes				To Be Well-Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
At December 31, 2017
Total Capital (to Risk-Weighted Assets):
Corporation	$	563,797	14.00	%	$	322,148	8.00	%	$	402,685	10.00	%
Bank	464,851		11.62		320,003		8.00		400,004		10.00
Tier 1 Capital (to Risk-Weighted Assets):
Corporation	447,228		11.11		241,611		6.00		322,148		8.00
Bank	442,613		11.07		240,002		6.00		320,003		8.00
Tier 1 Common Capital (to Risk-Weighted Assets):
Corporation	447,228		11.11		181,208		4.50		261,745		6.50
Bank	442,613		11.07		180,002		4.50		260,002		6.50
Tier 1 Capital (to Average Assets):
Corporation	447,228		10.48		170,753		4.00		213,441		5.00
Bank	442,613		10.45		169,453		4.00		211,816		5.00
At December 31, 2016
Total Capital (to Risk-Weighted Assets):
Corporation	$	462,198	12.44	%	$	297,284	8.00	%	$	371,604	10.00	%
Bank	436,435		11.85		294,679		8.00		368,349		10.00
Tier 1 Capital (to Risk-Weighted Assets):
Corporation	349,942		9.42		222,963		6.00		297,284		8.00
Bank	418,266		11.36		221,010		6.00		294,679		8.00
Tier 1 Common Capital (to Risk-Weighted Assets):
Corporation	349,942		9.42		167,222		4.50		241,543		6.50
Bank	418,266		11.36		165,757		4.50		239,427		6.50
Tier 1 Capital (to Average Assets):
Corporation	349,942		8.84		158,410		4.00		198,013		5.00
Bank	418,266		10.64		157,254		4.00		196,567		5.00