Regulatory Capital Requirements

9 Months Ended

Sep. 30, 2020

Disclosure Of Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements

Note 14. Regulatory Capital Requirements

The Company, the Bank and Mortgage World are subject to various regulatory capital requirements administered by the Federal Reserve Board, the OCC, the U.S. Department of Housing and Urban Development, and the NYS Department of Financial Services, respectively. 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 operations and financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company'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 require the maintenance of minimum amounts and ratios (set forth in the table below) of total risk-based and Tier 1 capital to risk-weighted assets (as defined), common equity Tier 1 capital (as defined), and Tier 1 capital to adjusted total assets (as defined) adjusted total assets (as defined). As of September 30, 2020 and December 31, 2019, all applicable capital adequacy requirements have been met.

The below minimum capital requirements exclude the capital conservation buffer required to avoid limitations on capital distributions including dividend payments and certain discretionary bonus payments to executive officers. The capital conservation buffer was phased in to 2.5% by 2019. The applicable capital buffer was 8.9% at September 30, 2020 and 10.6% at December 31, 2019.

The most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company and the Bank must maintain minimum total risk-based, common equity risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. There were no conditions or events since then that have changed the Bank's category.

Note 14. Regulatory Capital Requirements (Continued)

The Company's and the Bank’s actual capital amounts and ratios as of September 30, 2020 and December 31, 2019 as compared to regulatory requirements are as follows:

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
September 30, 2020
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	169,512		18.81	%	$	72,089		8.00	%	$	90,111		10.00	%
Tier 1 Capital to Risk-Weighted Assets		158,208		17.56	%		54,067		6.00	%		72,089		8.00	%
Common Equity Tier 1 Capital Ratio		158,208		17.56	%		40,550		4.50	%		58,572		6.50	%
Tier 1 Capital to Total Assets		158,208		13.61	%		46,505		4.00	%		58,131		5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	151,968		16.93	%	$	71,806		8.00	%	$	89,758		10.00	%
Tier 1 Capital to Risk-Weighted Assets		140,707		15.68	%		53,855		6.00	%		71,806		8.00	%
Common Equity Tier 1 Capital Ratio		140,707		15.68	%		40,391		4.50	%		58,343		6.50	%
Tier 1 Capital to Total Assets		140,707		11.46	%		49,115		4.00	%		61,393		5.00	%

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2019
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	168,268		21.35	%	$	63,044		8.00	%	$	78,805		10.00	%
Tier 1 Capital to Risk-Weighted Assets		158,382		20.10	%		47,283		6.00	%		63,044		8.00	%
Common Equity Tier 1 Capital Ratio		158,382		20.10	%		35,462		4.50	%		51,223		6.50	%
Tier 1 Capital to Total Assets		158,382		14.97	%		42,334		4.00	%		52,917		5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	146,451		18.62	%	$	62,923		8.00	%	$	78,654		10.00	%
Tier 1 Capital to Risk-Weighted Assets		136,584		17.37	%		47,192		6.00	%		62,923		8.00	%
Common Equity Tier 1 Capital Ratio		136,584		17.37	%		35,394		4.50	%		51,125		6.50	%
Tier 1 Capital to Total Assets		136,584		12.92	%		42,275		4.00	%		52,843		5.00	%

Mortgage World is subject to various net worth requirements in connection with regulatory authorities and lending agreements that Mortgage World has entered with purchase facility lenders. Failure to maintain minimum capital requirements could result in Mortgage World’s inability to originate and service loans, and, therefore, could have a direct material effect on the Company’s consolidated financial statements.

Mortgage World’s minimum net worth requirements as of September 30, 2020 are reflected below:

	Minimum
	Requirement
HUD	$	1,000
Warehouse Line of Credit #1		2,500
Warehouse Line of Credit #2		500
New York Department of Financial Services		250
Other State Banking Departments		250

As of September 30, 2020, Mortgage World is in compliance with all minimum capital requirements.