Capital Requirements

12 Months Ended

Dec. 31, 2019

Regulatory Capital Requirements [Abstract]

Capital Requirements

Note 21. Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. 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 financial condition and results of operations. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

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 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 the Bank to comply with the minimum capital ratios set forth in the table 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 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.  At December 31, 2019, the most recent notification from the Federal Reserve Bank of Richmond categorized the Bank as well capitalized under the prompt corrective action regulations.  To be considered “well capitalized” under these regulations, the Bank must have the capital ratios set forth in the table below.

	Actual					Minimum Capital Requirement					Well Capitalized Under Prompt Corrective Action Provisions
(Dollars In thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2019
Total capital (to risk-weighted assets)	$	74,090		13.5	%	$	43,776		8.0	%	$	54,720		10.0	%
Common equity Tier 1 capital (to risk-weighted assets)	$	68,863		12.6	%	$	24,624		4.5	%	$	35,568		6.5	%
Tier 1 capital (to risk-weighted assets)	$	68,863		12.6	%	$	32,832		6.0	%	$	43,776		8.0	%
Tier 1 capital (to average assets)	$	68,863		9.4	%	$	29,298		4.0	%	$	36,622		5.0	%
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	%