REGULATORY MATTERS

12 Months Ended

Dec. 31, 2019

REGULATORY MATTERS

REGULATORY MATTERS

NOTE 16 — REGULATORY MATTERS

The Corporation is subject to various regulatory capital requirements administered by the 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 Corporation’s consolidated financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation must meet specific capital guidelines that involve quantitative measures of the Corporation’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.  The Corporation’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 to ensure capital adequacy require the Corporation to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets.  Management has determined that, as of December 31, 2019, the Corporation is well capitalized.

The tables below do not include the 2.5% capital conservation buffer requirement.  A bank with a capital conservation buffer greater than 2.5% of risk-weighted assets would not be restricted by payout limitations.  However, if the 2.5% threshold is not met, the Bank would be subject to increasing limitations on capital distributions and discretionary bonus payments to executive officers as the capital conservation buffer approaches zero.  The Corporation’s and the Bank’s actual capital and ratios compared to generally applicable regulatory requirements as of December 31, 2019 are as follows (dollars in thousands):

					Minimum for Capital
	Actual				Adequacy Purposes					Well-Capitalized
	Amount		Ratio		Amount			Ratio		Amount		Ratio
Total capital to risk weighted assets:
Consolidated	$	138,263	13.2%	>	$	83,696	>	8.0%	>		N/A	N/A
mBank	$	136,578	13.1%	>	$	83,681	>	8.0%	>	$	104,601	10.0%
Tier 1 capital to risk weighted assets:
Consolidated	$	132,955	12.7%	>	$	62,772	>	6.0%	>		N/A	N/A
mBank	$	131,311	12.6%	>	$	62,761	>	6.0%	>	$	83,681	8.0%
Common equity Tier 1 capital to risk weighted assets
Consolidated	$	132,955	12.7%	>	$	47,079	>	4.5%	>		N/A	N/A
mBank	$	131,311	12.6%	>	$	47,071	>	4.5%	>	$	67,991	6.5%
Tier 1 capital to average assets:
Consolidated	$	132,955	10.1%	>	$	52,724	>	4.0%	>		N/A	N/A
mBank	$	131,311	10.0%	>	$	52,728	>	4.0%	>	$	65,910	5.0%

The Corporation’s and the Bank’s actual capital and ratios compared to generally applicable regulatory requirements as of December 31, 2018 are as follows (dollars in thousands):

					Minimum for Capital
	Actual				Adequacy Purposes					Well-Capitalized
	Amount		Ratio		Amount			Ratio		Amount		Ratio
Total capital to risk weighted assets:
Consolidated	$	124,207	12.5%	>	$	79,705	>	8.0%	>		N/A	N/A
mBank	$	121,406	12.2%	>	$	79,464	>	8.0%	>	$	99,329	10.0%
Tier 1 capital to risk weighted assets:
Consolidated	$	119,024	12.0%	>	$	59,779	>	6.0%	>		N/A	N/A
mBank	$	116,264	11.7%	>	$	59,598	>	6.0%	>	$	79,464	8.0%
Common equity Tier 1 capital to risk weighted assets
Consolidated	$	119,024	12.0%	>	$	44,834	>	4.5%	>		N/A	N/A
mBank	$	116,264	11.7%	>	$	44,698	>	4.5%	>	$	64,564	6.5%
Tier 1 capital to average assets:
Consolidated	$	119,024	9.2%	>	$	51,552	>	4.0%	>		N/A	N/A
mBank	$	116,264	9.0%	>	$	51,556	>	4.0%	>	$	64,445	5.0%