Regulatory Matters

12 Months Ended

Dec. 31, 2019

Banking And Thrift [Abstract]

Regulatory Matters

Note 15. Regulatory Matters

Dividends

The Bank, as a North Carolina banking corporation, may pay dividends to shareholders provided the bank does not make distributions that reduce its capital below its applicable required capital, pursuant to North Carolina General Statutes Section 53C-4-7. However, regulatory authorities may limit payment of dividends by any bank when it is determined that such a limitation is in the public interest and is necessary to ensure financial soundness of the bank.

Capital Requirements

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies.  The Basel III Capital Rules, a comprehensive capital framework for U.S. banking organizations, became effective for the Company and Bank on January 1, 2015.  The framework’s requirements are phased in over a multi-year schedule, to be fully phased in by January 1, 2019.  Under Basel III, requirements include a common equity Tier 1 ratio minimum of 4.50 percent, Tier 1 risk-based capital minimum of 6.00 percent, total risk-based capital ratio minimum of 8.00 percent and Tier 1 leverage capital ratio minimum of 4.00 percent. Failure to meet minimum capital requirements may result in certain actions by regulators that could have a direct material effect on the consolidated financial statements. A new capital conservation buffer, comprised of common equity Tier 1 capital, was also established by Basel III above the regulatory minimum requirements. This capital conservation buffer was phased in beginning January 1, 2016 at 0.625 percent of risk-weighted assets and increases each subsequent year by an additional 0.625 percent until reaching its final level of 2.50 percent on January 1, 2019.  

Based on the most recent notification from the Federal Deposit Insurance Corporation, the Bank is well capitalized under the regulatory framework for prompt corrective action. As of December 31, 2019, the Company and the Bank met all capital adequacy requirements to which they are subject and were not aware of any conditions or events that would change each entity’s well capitalized status.

Capital amounts and ratios as of December 31, 2019 and 2018, are presented in the following table.

	Actual					Minimum Capital Requirement					Minimum To Be Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Consolidated - December 31, 2019
Common Equity Tier 1
(to Risk-Weighted Assets)	$	499,513		14.85	%	$	151,365		4.50	%	N/A		N/A
Total Capital
(to Risk-Weighted Assets)	$	541,635		16.10	%	$	269,093		8.00	%	N/A		N/A
Tier 1 Capital
(to Risk-Weighted Assets)	$	499,513		14.85	%	$	201,820		6.00	%	N/A		N/A
Tier 1 Capital
(to Average Assets)	$	499,513		10.65	%	$	187,582		4.00	%	N/A		N/A
Bank - December 31, 2019
Common Equity Tier 1
(to Risk-Weighted Assets)	$	451,807		13.61	%	$	149,370		4.50	%	$	215,757		6.50	%
Total Capital
(to Risk-Weighted Assets)	$	493,382		14.86	%	$	265,547		8.00	%	$	331,934		10.00	%
Tier 1 Capital
(to Risk-Weighted Assets)	$	451,807		13.61	%	$	199,161		6.00	%	$	265,547		8.00	%
Tier 1 Capital
(to Average Assets)	$	451,807		9.68	%	$	186,627		4.00	%	$	233,283		5.00	%
Consolidated - December 31, 2018
Common Equity Tier 1
(to Risk-Weighted Assets)	$	467,033		17.10	%	$	122,937		4.50	%	N/A		N/A
Total Capital
(to Risk-Weighted Assets)	$	499,467		18.28	%	$	218,555		8.00	%	N/A		N/A
Tier 1 Capital
(to Risk-Weighted Assets)	$	467,033		17.10	%	$	163,917		6.00	%	N/A		N/A
Tier 1 Capital
(to Average Assets)	$	467,033		13.40	%	$	139,453		4.00	%	N/A		N/A
Bank - December 31, 2018
Common Equity Tier 1
(to Risk-Weighted Assets)	$	385,030		14.35	%	$	120,706		4.50	%	$	174,353		6.50	%
Total Capital
(to Risk-Weighted Assets)	$	417,609		15.57	%	$	214,588		8.00	%	$	268,235		10.00	%
Tier 1 Capital
(to Risk-Weighted Assets)	$	385,030		14.35	%	$	160,941		6.00	%	$	214,588		8.00	%
Tier 1 Capital
(to Average Assets)	$	385,030		11.22	%	$	137,304		4.00	%	$	171,630		5.00	%