Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

Regulatory Capital Requirements

Regulatory Capital Requirements

The Company and the Bank are subject to various regulatory capital requirements administered by state and federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weighting and other factors.

The Basel III Capital Rules became effective for the Company and the Bank on January 1, 2015, subject to a phase-in period for certain provisions. Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios of Common Equity Tier 1 capital, Tier 1 capital and Total capital, as defined in the regulations, to risk-weighted assets, and of Tier 1 capital to adjusted quarterly average assets (“Leverage Ratio”).

The Basel III Capital Rules were fully phased in on January 1, 2019 and require the Company and the Bank to maintain: 1) a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 4.5%, plus a 2.5% “capital conservation buffer” (resulting in a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 7.0%); 2) a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, plus the capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.5%); 3) a minimum ratio of Total capital to risk-weighted assets of 8.0%, plus the capital conservation buffer (resulting in a minimum Total capital ratio of 10.5%); and 4) a minimum Leverage Ratio of 4.0%.

The implementation of the capital conservation buffer began on January 1, 2016 at the 0.625% level and was phased in over a four-year period, increasing by increments of that amount on each subsequent January 1 until it reached 2.5% on January 1, 2019. The capital conservation buffer is designed to absorb losses during periods of economic stress. Failure to maintain the minimum Common Equity Tier 1 capital ratio plus the capital conservation buffer will result in potential restrictions on a banking institution’s ability to pay dividends, repurchase stock and/or pay discretionary compensation to its employees.

The following tables present actual and required capital ratios as of December 31, 2019 and 2018 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of December 31, 2019 and 2018 based on the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

	Actual				Minimum Capital Required - Basel III				Minimum Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount	Ratio
As of December 31, 2019:
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	313,803	10.84	%	$	202,661	7.00	%	N/A	N/A
Bank	341,242		11.80	%	202,480		7.00	%	188,017	6.50	%
Tier 1 capital to risk-weighted assets
Consolidated	313,803		10.84	%	246,088		8.50	%	N/A	N/A
Bank	341,242		11.80	%	245,869		8.50	%	231,406	8.00	%
Total capital to risk-weighted assets
Consolidated	405,171		13.99	%	303,991		10.50	%	N/A	N/A
Bank	363,082		12.55	%	303,720		10.50	%	289,257	10.00	%
Leverage ratio
Consolidated	313,803		7.64	%	164,219		4.00	%	N/A	N/A
Bank	341,242		8.32	%	164,121		4.00	%	205,151	5.00	%

	Actual				Minimum Capital Required - Basel III Phase-In Schedule				Minimum Capital Required - Basel III				Minimum Required to be Considered Well Capitalized
	Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount		Ratio		Capital Amount	Ratio
As of December 31, 2018:
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	300,589	12.39	%	$	154,613	6.38	%	$	169,771	7.00	%	N/A	N/A
Bank	286,012		11.81	%	154,407		6.38	%	169,545		7.00	%	157,435	6.50	%
Tier 1 capital to risk-weighted assets
Consolidated	300,589		12.39	%	190,992		7.88	%	206,150		8.50	%	N/A	N/A
Bank	286,012		11.81	%	190,738		7.88	%	205,876		8.50	%	193,766	8.00	%
Total capital to risk-weighted assets
Consolidated	352,360		14.53	%	239,498		9.88	%	254,656		10.50	%	N/A	N/A
Bank	300,908		12.55	%	239,180		9.88	%	254,318		10.50	%	242,207	10.00	%
Leverage ratio
Consolidated	300,589		9.00	%	133,602		4.00	%	133,602		4.00	%	N/A	N/A
Bank	286,012		8.57	%	133,474		4.00	%	133,474		4.00	%	166,843	5.00	%