Regulatory Matters

6 Months Ended

Jun. 30, 2020

Disclosure Of Regulatory Matters [Abstract]

Regulatory Matters

10. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below). Management believes that, as of June 30, 2020 and December 31, 2019, the Bank met all capital adequacy requirements to which it is subject, including the capital conservation buffer, at those dates.

As fully phased in on January 1, 2019, the Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (“Basel III Capital Rules”) require the Bank to maintain (i) a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of at least 4.5%, plus a 2.5% “capital conservation buffer” (effectively resulting in a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of at least 7.0%), (ii) a minimum ratio of Tier 1 capital to risk-weighted assets of at least 6.0%, plus the capital conservation buffer (effectively resulting in a minimum Tier 1 capital ratio of 8.5%), (iii) a minimum ratio of Total capital (that is, Tier 1 plus Tier 2) to risk-weighted assets of at least 8.0%, plus the capital conservation buffer (effectively resulting in a minimum total capital ratio of 10.5%) and (iv) a minimum leverage ratio of 4.0%, calculated as the ratio of Tier 1 capital to average quarterly assets. The capital conservation buffer is designed to absorb losses during periods of economic stress and effectively increases the minimum required risk-weighted capital ratios. Banking institutions with a ratio of Common Equity Tier 1 capital to risk-weighted assets below the effective minimum will face constraints on dividends, equity repurchases and compensation based on the amount of the shortfall.

The following table presents actual and required capital ratios as of June 30, 2020 and December 31, 2019 for the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of June 30, 2020 and December 31, 2019 based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019, when the Basel III Capital Rules were fully phased-in. 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.

						Minimum Capital					Minimum Capital Required For Capital Adequacy Plus Capital Conservation Buffer
	Actual					Requirement					Fully Phased-In
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of June 30, 2020
Total Capital (to risk- weighted assets)	$	50,295		17.26	%	$	23,313		8.00	%	$	30,599		10.50	%
Tier I Capital (to risk- weighted assets)		47,100		16.16			17,485		6.00			24,770		8.50
Tier I Capital (to average assets)		47,100		10.62			17,742		4.00			17,742		4.00
Common Equity Tier 1 (to risk-weighted assets)		47,100		16.16			13,114		4.50			20,399		7.00

						Minimum Capital					Minimum To Be Well Capitalized Under Prompt Corrective
	Actual					Requirement					Action Provisions
(Dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2019
Total Capital (to risk-weighted assets)	$	49,259		18.52	%	$	21,278		8.00	%	$	27,928		10.50	%
Tier I Capital (to risk-weighted assets)		46,321		17.41			15,961		6.00			22,611		8.50
Tier I Capital (to average assets)		46,321		11.41			16,236		4.00			16,236		4.00
Common Equity Tier 1 (to risk-weighted assets)		46,321		17.41			11,971		4.50			18,621		7.00