Regulatory Capital

9 Months Ended

Jun. 30, 2017

Banking and Thrift [Abstract]

Regulatory Capital

12. Regulatory Capital

The Company and Bank are 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 consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the table below) of total, Tier 1 and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and Tier 1 capital (as defined) to average assets (as defined). The final rules implementing the Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (“Basel III rules”) became effective for the Company and the Bank on January 1, 2015, with full compliance with all of the requirements being phased in over a multi-year schedule through 2019. Under the Basel III rules, the Bank must hold a conservation buffer above the adequately capitalized risk-based capital ratios disclosed in the table below. The capital conservation buffer is being phased in from 0.0% for 2015 to 2.5% by 2019. The capital conservation buffer is 1.25% for 2017 and 0.625% for 2016. The Company and Bank met all capital adequacy requirements to which they are subject as of June 30, 2017 and September 30, 2016.

 

As of June 30, 2017, the most recent notification from the Federal Reserve Bank categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based, common equity Tier 1 risk-based and Tier I leverage ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the Bank’s category.

The Company’s and Bank’s actual capital amounts and ratios are also presented in the table. No amount was deducted from capital for interest-rate risk at either period.

											Minimum
											To Be Well
						Minimum					Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes:					Action Provisions:
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2017:
Total capital (to risk-weighted assets):
Consolidated	$	85,783		12.74	%	$	53,863		8.00	%		N/A		N/A
Bank		81,996		12.19			53,791		8.00		$	67,239		10.00	%
Tier I capital (to risk-weighted assets):
Consolidated	$	77,788		11.55	%	$	40,397		6.00	%		N/A		N/A
Bank		74,001		11.01			40,343		6.00		$	53,791		8.00	%
Common equity tier I capital (to risk-weighted assets):
Consolidated	$	77,788		11.55	%	$	30,298		4.50	%		N/A		N/A
Bank		74,001		11.01			30,258		4.50		$	43,705		6.50	%
Tier I capital (to average adjusted total assets):
Consolidated	$	77,788		9.20	%	$	33,838		4.00	%		N/A		N/A
Bank		74,001		8.77			33,743		4.00		$	42,179		5.00	%
As of September 30, 2016:
Total capital (to risk-weighted assets):
Consolidated	$	72,227		11.82	%	$	48,874		8.00	%		N/A		N/A
Bank		69,056		11.33			48,748		8.00		$	60,934		10.00	%
Tier I capital (to risk-weighted assets):
Consolidated	$	65,105		10.66	%	$	36,655		6.00	%		N/A		N/A
Bank		61,934		10.16			36,561		6.00		$	48,748		8.00	%
Common equity tier I capital (to risk-weighted assets):
Consolidated	$	65,105		10.66	%	$	27,491		4.50	%		N/A		N/A
Bank		61,934		10.16			27,420		4.50		$	39,607		6.50	%
Tier I capital (to average adjusted total assets):
Consolidated	$	65,105		8.43	%	$	30,881		4.00	%		N/A		N/A
Bank		61,934		8.09			30,621		4.00		$	38,277		5.00	%