Regulatory Capital

3 Months Ended

Mar. 31, 2020

Regulatory Capital

Regulatory Capital

14.  Regulatory Capital

The Company is subject to various capital requirements administered by the federal banking agencies. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. 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 consolidated financial statements. For a more detailed discussion see the Capital Resources section of Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A).

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of total, common equity tier 1, and tier 1 capital to risk-weighted assets (as defined) and tier 1 capital to average assets. Additionally, under Basel III rules, the decision was made to opt-out of including accumulated other comprehensive income in regulatory capital. As of March 31, 2020, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action promulgated by the Federal Reserve. The Company believes that no conditions or events have occurred that would change this conclusion as of such date. To be categorized as well capitalized, the Bank must maintain minimum total capital, common equity tier 1 capital, tier 1 capital, and tier 1 leverage ratios as set forth in the table (in thousands, except ratios).

	At March 31, 2020
									MINIMUM		TO BE WELL
									REQUIRED		CAPITALIZED
									FOR		UNDER PROMPT
									CAPITAL		CORRECTIVE
									ADEQUACY		ACTION
	COMPANY				BANK				PURPOSES		REGULATIONS*
	AMOUNT		RATIO		AMOUNT		RATIO		RATIO		RATIO
Total Capital (To Risk Weighted  Assets)	$	133,286	13.41	%	$	120,917	12.23	%	8.00	%	10.00	%
Common Equity Tier 1 (To Risk  Weighted Assets)		103,726	10.44			110,766	11.20		4.50		6.50
Tier 1 Capital (To Risk Weighted  Assets)		115,618	11.64			110,766	11.20		6.00		8.00
Tier 1 Capital (To Average Assets)		115,618	9.94			110,766	9.64		4.00		5.00

	At December 31, 2019
									MINIMUM		TO BE WELL
									REQUIRED		CAPITALIZED
									FOR		UNDER PROMPT
									CAPITAL		CORRECTIVE
									ADEQUACY		ACTION
	COMPANY				BANK				PURPOSES		REGULATIONS*
	AMOUNT		RATIO		AMOUNT		RATIO		RATIO		RATIO
Total Capital (To Risk Weighted  Assets)	$	132,544	13.49	%	$	119,477	12.23	%	8.00	%	10.00	%
Common Equity Tier 1 (To Risk  Weighted Assets)		102,841	10.47			109,173	11.17		4.50		6.50
Tier 1 Capital (To Risk Weighted  Assets)		114,729	11.68			109,173	11.17		6.00		8.00
Tier 1 Capital (To Average Assets)		114,729	9.87			109,173	9.50		4.00		5.00

*Applies to the Bank only.

Additionally, while not a regulatory capital ratio, the Company’s tangible common equity ratio was 7.69% (non-GAAP) at March 31, 2020. See the discussion of the tangible common equity ratio under the Balance Sheet section of the MD&A.