Regulatory Matters

3 Months Ended

Mar. 31, 2020

Regulatory Matters

Regulatory Matters

Note 6 – Regulatory Matters -

The Bank is subject to various regulatory capital requirements administered by its primary Federal regulator, the Office of the Comptroller of the Currency (OCC). Failure to meet the minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and the financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory reporting requirements. The Bank’s capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total capital, tier 1 capital, and common equity tier 1 capital to risk-weighted assets (as defined in the regulations), and leverage capital, which is tier 1 capital to adjusted average total assets (as defined). Management believes, as of March 31, 2020 and December 31, 2019, that the Bank meets all the capital adequacy requirements to which it is subject.

As of March 31, 2020 and December 31, 2019, the most recent notifications from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To remain categorized as well capitalized, the Bank will have to maintain minimum total capital, common equity tier 1 capital, tier 1 capital, and leveraged capital ratios as disclosed in the table below. There are no conditions or events since the most recent notification that management believes have changed the Bank’s category. The Bank’s actual and required capital amounts and ratios are as follows:

									To be Well
									Capitalized Under
					For Capital				Prompt Corrective
March 31, 2020:	Actual				Adequacy Purposes				Action Provisions
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital
(to Risk Weighted Assets)	$	19,589	41.23	%	$	3,800	8.00	%	$	4,751	10.00	%
Tier 1 Capital
(to Risk Weighted Assets)	$	18,993	39.98	%	$	2,850	6.00	%	$	3,800	8.00	%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)	$	18,993	39.98	%	$	2,138	4.50	%	$	3,088	6.50	%
Tier 1 Leverage Capital
(to Adjusted Total Assets)	$	18,993	18.00	%	$	4,221	4.00	%	$	5,276	5.00	%

									To be Well
									Capitalized Under
					For Capital				Prompt Corrective
December 31, 2019:	Actual				Adequacy Purposes				Action Provisions
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Capital
(to Risk Weighted Assets)	$	19,568	38.94	%	$	4,020	8.00	%	$	5,026	10.00	%
Tier 1 Capital
(to Risk Weighted Assets)	$	18,938	37.68	%	$	3,015	6.00	%	$	4,020	8.00	%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)	$	18,938	37.68	%	$	2,262	4.50	%	$	3,267	6.50	%
Tier 1 Leverage Capital
(to Adjusted Total Assets)	$	18,938	17.47	%	$	4,336	4.00	%	$	5,420	5.00	%

A reconciliation of the Bank’s capital determined under GAAP to Total Capital, Tier 1 Capital, Common Equity Tier 1 Capital and Tier 1 Leverage Capital for March 31, 2020 and December 31, 2019, is as follows:

	March 31, 2020		December 31, 2019
(in thousands)	2020		2019
Total Equity (Bank Only)	$	19,022	$	18,920
Unrealized Losses on Securities
Available-for-Sale, Net		(29)		18
Tangible, Tier 1 Capital and Common Equity Tier 1		18,993		18,938
Allowance for Loan Losses Included in Capital		596		630
Total Capital	$	19,589	$	19,568

The specific reserves included in the Allowance for Loan Losses were not significant as of March 31, 2020 and December 31, 2019.