Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2019

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

Regulatory Capital Requirements

The Company (on a consolidated basis) and Union are 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 Company's and Union's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Union 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 Company's and Union's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Under the current guidelines, banking organizations must have a minimum total risk-based capital ratio of 8.0%, a minimum Tier I risk-based capital ratio of 6.0%, a minimum common equity Tier I risk-based capital ratio of 4.5%, and a minimum leverage ratio of 4.0% in order to be "adequately capitalized." In addition to these requirements, banking organizations must maintain a 2.5% capital conservation buffer consisting of common Tier I equity, increasing the minimum required total risk-based capital, Tier I risk-based and common equity Tier I capital to risk-weighted assets they must maintain to avoid limits on capital distributions and certain bonus payments to executive officers and similar employees.

The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018 directed the federal banking regulators to adopt rules providing for a simplified regulatory capital framework for qualifying community banking organizations. In September 2019, the banking regulators finalized a rule that introduced the community bank leverage ratio (CBLR) framework as an optional simplified measure of capital adequacy for qualifying institutions. A banking organization with a Tier I leverage ratio greater than 9.0%, less than $10 billion in average consolidated assets, and limited amounts of off-balance sheet exposures and trading assets and liabilities may opt into the CBLR framework and will be deemed "well capitalized" and will not be required to report or calculate risk-based capital. A qualifying community bank may utilize the CBLR framework beginning with the March 31, 2020 regulatory capital calculation. A community banking organization that does not meet the requirements for use of the simplified CBLR framework will continue to calculate its regulatory capital ratios under existing guidelines. As of December 31, 2019, the Tier I leverage ratio was 8.09% and 8.06% for the Company and Union, respectively.

The Company and Bank's risk-based capital ratios exceeded regulatory guidelines at December 31, 2019 and December 31, 2018, and, specifically, the Bank was "well capitalized" under Prompt Corrective Action provisions for each period. There were no conditions or events that occurred subsequent to December 31, 2019 that would change the Company or Bank's regulatory capital categorization.

Union's and the Company's regulatory capital amounts and ratios as of the balance sheet dates are presented in the following tables:

	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
As of December 31, 2019	Amount		Ratio		Amount		Ratio		Amount		Ratio
Company:	(Dollars in thousands)
Total capital to risk weighted assets	$	74,510	13.02	%	$	45,782	8.00	%	N/A		N/A
Tier 1 capital to risk weighted assets	68,388		11.95	%	34,337		6.00	%	N/A		N/A
Common Equity Tier 1 to risk weighted assets	68,388		11.95	%	25,753		4.50	%	N/A		N/A
Tier 1 capital to average assets	68,388		8.09	%	33,814		4.00	%	N/A		N/A
Union:
Total capital to risk weighted assets	$	74,167	12.98	%	$	45,712	8.00	%	$	57,139	10.00	%
Tier 1 capital to risk weighted assets	68,045		11.91	%	34,280		6.00	%	45,706		8.00	%
Common Equity Tier 1 to risk weighted assets	68,045		11.91	%	25,710		4.50	%	37,136		6.50	%
Tier 1 capital to average assets	68,045		8.06	%	33,769		4.00	%	42,212		5.00	%

	Actual				For Capital Adequacy Purposes				To be Well Capitalized Under Prompt Corrective Action Provisions
As of December 31, 2018	Amount		Ratio		Amount		Ratio		Amount		Ratio
Company:	(Dollars in thousands)
Total capital to risk weighted assets	$	68,616	12.86	%	$	42,685	8.00	%	N/A		N/A
Tier 1 capital to risk weighted assets	62,877		11.78	%	32,026		6.00	%	N/A		N/A
Common Equity Tier 1 to risk weighted assets	62,877		11.78	%	24,019		4.50	%	N/A		N/A
Tier 1 capital to average assets	62,877		8.03	%	31,321		4.00	%	N/A		N/A
Union:
Total capital to risk weighted assets	$	68,305	12.82	%	$	42,624	8.00	%	$	53,280	10.00	%
Tier 1 capital to risk weighted assets	62,566		11.75	%	31,949		6.00	%	42,598		8.00	%
Common Equity Tier 1 to risk weighted assets	62,566		11.75	%	23,961		4.50	%	34,611		6.50	%
Tier 1 capital to average assets	62,566		8.00	%	31,283		4.00	%	39,104		5.00	%

Dividends paid by Union are the primary source of funds available to the Company for payment of dividends to its stockholders. Union is subject to certain requirements imposed by federal banking laws and regulations, which among other things, establish minimum levels of capital and restrict the amount of dividends that may be distributed by Union to the Company.