Equity and Regulatory Matters

6 Months Ended

Jun. 30, 2020

Equity and Regulatory Matters

Equity and Regulatory Matters

NOTE 10 – Equity and Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by federal banking agencies. 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 financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The 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 to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1, Tier 1 and Total capital to risk-weighted assets and of Tier 1 capital to average assets. It is management’s opinion, as of June 30, 2020, that the Bank meet all applicable capital adequacy requirements.

As of June 30, 2020, the Bank is categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum regulatory capital ratios as set forth in the table. There are no conditions or events since June 30, 2020 that management believes have changed the category.

The Bank’s actual capital amounts and ratios are presented in the following tables:

To Be Well

Capitalized

Under Prompt

For Capital Adequacy

Corrective

Actual

Purposes

Action Provisions

Amount

Ratio

Amount

Ratio

Amount

Ratio

June 30, 2020

Common Equity Tier 1 capital (to risk‑weighted assets)

$

72,831

32.7

%

$

≥ 10,030

≥ 4.5

%

$

≥ 14,487

≥   6.5

%

Tier 1 capital (to risk‑weighted assets)

72,831

32.7

≥ 13,373

≥ 6.0

≥ 17,831

≥   8.0

Total capital (to risk‑weighted assets)

75,373

33.8

≥ 17,831

≥ 8.0

≥ 22,288

≥ 10.0

Tier 1 capital (to average assets)

72,831

25.4

≥ 11,488

≥ 4.0

≥ 14,360

≥   5.0

December 31, 2019

Common Equity Tier 1 capital (to risk‑weighted assets)

$

50,446

23.7

%

$

≥   9,591

≥ 4.5

%

$

≥ 13,854

≥   6.5

%

Tier 1 capital (to risk‑weighted assets)

50,446

23.7

≥ 12,788

≥ 6.0

≥ 17,051

≥   8.0

Total capital (to risk‑weighted assets)

52,710

24.7

≥ 17,051

≥ 8.0

≥ 21,313

≥ 10.0

Tier 1 capital (to average assets)

50,446

19.4

≥ 10,400

≥ 4.0

≥ 13,000

≥   5.0