Capital Requirements

12 Months Ended

Dec. 31, 2018

Regulatory Capital Requirements [Abstract]

Capital Requirements

Note 21. Capital Requirements

Federal bank regulators have issued substantially similar guidelines requiring banks and bank holding companies to maintain capital at certain levels.  In addition, regulators may from time to time require that a banking organization maintain capital above the minimum levels because of its financial condition or actual or anticipated growth.  Failure to meet minimum capital requirements can trigger certain mandatory and discretionary actions by regulators that could have a direct material effect on the Company’s financial condition and results of operations.

The Board of Governors of the Federal Reserve System (the “Federal Reserve”) and the Federal Deposit Insurance Corporation have adopted rules to implement the Basel III capital framework as outlined by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Basel III Capital Rules”). The Basel III Capital Rules require banks and bank holding companies to comply with the minimum capital ratios set forth in the tables below, plus a “capital conservation buffer.”  The capital conservation buffer requirement was phased in beginning on January 1, 2016, at 0.625% of risk-weighted assets, and increased by the same amount each year until it was fully implemented at 2.5% on January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress.  The capital conservation buffer is applicable to all ratios except the leverage ratio, which is noted below as “Tier 1 Capital to Average Assets.”

The Company meets the eligibility criteria of a small bank holding company in accordance with the Federal Reserve’s Small Bank Holding Company Policy Statement (the “SBHC Policy Statement”).  Under the SBHC Policy Statement, qualifying bank holding companies, such as the Company, have additional flexibility in the amount of debt they can issue and are also exempt from the Basel III Capital Rules.  The SBHC Policy Statement does not apply to the Bank and the Bank must comply with the Basel III Capital Rules.  The Bank must also comply with the capital requirements set forth in the “prompt corrective action” regulations pursuant to Section 38 of the Federal Deposit Insurance Act.  Management believes that the Bank met all capital adequacy requirements to which they are subject at December 31, 2018 and 2017.  At December 31, 2018, the most recent notification from the Federal Reserve Bank of Richmond categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.  To be considered “well capitalized” under these regulations, the Bank must have the capital ratios set forth in the following tables.

The Bank’s actual capital amounts and ratios are presented in the following table.

	Actual					Minimum Capital Requirement					Well Capitalized Under Prompt Corrective Action Provisions
(Dollars In thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2018
Total capital (to risk-weighted assets)	$	69,295		12.8	%	$	43,134		8.0	%	$	53,918		10.0	%
Common equity Tier 1 capital (to risk-weighted assets)	$	64,119		11.9	%	$	24,263		4.5	%	$	35,047		6.5	%
Tier 1 capital (to risk-weighted assets)	$	64,119		11.9	%	$	32,351		6.0	%	$	43,134		8.0	%
Tier 1 capital (to average assets)	$	64,119		9.4	%	$	27,317		4.0	%	$	34,147		5.0	%
As of December 31, 2017
Total capital (to risk-weighted assets)	$	64,354		12.4	%	$	41,485		8.0	%	$	51,856		10.0	%
Common equity Tier 1 capital (to risk-weighted assets)	$	59,260		11.4	%	$	23,335		4.5	%	$	33,707		6.5	%
Tier 1 capital (to risk-weighted assets)	$	59,260		11.4	%	$	31,114		6.0	%	$	41,485		8.0	%
Tier 1 capital (to average assets)	$	59,260		9.2	%	$	25,862		4.0	%	$	32,328		5.0	%