Regulatory Capital Requirements

6 Months Ended

Jun. 30, 2021

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 June 30, 2021 and December 31, 2020, all applicable capital adequacy requirements have been met.

Note 14.Regulatory Capital Requirements (Continued)

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 8.1% at June 30, 2021 and 7.95% at December 31, 2020.

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.

The Company's and the Bank’s actual capital amounts and ratios as of June 30, 2021 and December 31, 2020 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
	(Dollars in thousands)
June 30, 2021
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	184,905		17.93	%	$	82,493	8.00%	$	103,116		10.00	%
Tier 1 Capital to Risk-Weighted Assets		171,976		16.68	%		61,869	6.00%		82,493		8.00	%
Common Equity Tier 1 Capital Ratio		171,976		16.68	%		46,402	4.50%		67,025		6.50	%
Tier 1 Capital to Total Assets		171,976		11.97	%		57,472	4.00%		71,840		5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	164,574		16.10	%	$	81,771	8.00%	$	102,213		10.00	%
Tier 1 Capital to Risk-Weighted Assets		151,756		14.85	%		61,328	6.00%		81,771		8.00	%
Common Equity Tier 1 Capital Ratio		151,756		14.85	%		45,996	4.50%		66,439		6.50	%
Tier 1 Capital to Total Assets		151,756		10.23	%		59,326	4.00%		74,158		5.00	%

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
December 31, 2020
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	171,578		17.68	%	$	77,644		8.00	%	$	97,055		10.00	%
Tier 1 Capital to Risk-Weighted Assets		159,410		16.42	%		58,233		6.00	%		77,644		8.00	%
Common Equity Tier 1 Capital Ratio		159,410		16.42	%		43,675		4.50	%		63,086		6.50	%
Tier 1 Capital to Total Assets		159,410		13.34	%		47,814		4.00	%		59,768		5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	153,951		15.95	%	$	77,213		8.00	%	$	96,516		10.00	%
Tier 1 Capital to Risk-Weighted Assets		141,850		14.70	%		57,909		6.00	%		77,213		8.00	%
Common Equity Tier 1 Capital Ratio		141,850		14.70	%		43,432		4.50	%		62,735		6.50	%
Tier 1 Capital to Total Assets		141,850		11.19	%		50,715		4.00	%		63,394		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.

Note 14. Regulatory Capital Requirements (Continued)

Mortgage World’s minimum net worth requirements as of June 30, 2021 and December 31, 2020 are reflected below:

	Minimum
	Requirement
	(Dollars in thousands)
HUD	$	1,000
New York Department of Financial Services		250
Other State Banking Departments		250

As of June 30, 2021 and December 31, 2020, Mortgage World is in compliance with all minimum capital requirements.