Note 11 - Regulatory Restrictions

9 Months Ended

Sep. 30, 2019

Banking And Thrift [Abstract]

Regulatory Restrictions

11. REGULATORY RESTRICTIONS

Dividends payable by QNB Corp. and the Bank are subject to various limitations imposed by statutes, regulations and policies adopted by bank regulatory agencies. Under Federal and Pennsylvania banking law, the Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval. Under Federal Reserve regulations, the Bank is limited as to the amount it may lend affiliates, including QNB Corp., unless such loans are collateralized by specific obligations.

Both the Company and the Bank are subject to regulatory capital requirements administered by Federal banking agencies. Failure to meet minimum capital requirements can initiate actions by regulators that could have an effect on the financial statements. Under the framework for prompt corrective action, both the Company and the Bank must meet capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items.

The capital amounts and classification are also subject to qualitative judgments by the regulators. Management believes, as of September 30, 2019, that the Company and the Bank met capital adequacy requirements to which they were subject.

As of the most recent notification, the primary regulator of the Bank considered it to be “well capitalized” under the regulatory framework. There are no conditions or events since that notification that management believes have changed the classification. To be categorized as well capitalized, the Company and the Bank must maintain minimum ratios as set forth in the following table below.

The Company and the Bank’s actual capital amounts and ratios are presented as follows:

	Capital levels
	Actual					Adequately capitalized					Well capitalized
September 30, 2019	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (to risk-weighted assets):
The Company	$	128,004		13.62	%	$	75,199		8.00	%	$	93,998		10.00	%
Bank		116,583		12.64			73,796	8.00				92,245	10.00
Tier I capital (to risk-weighted assets):
The Company		118,437		12.60			56,399	6.00				56,399	6.00
Bank		107,016		11.60			55,347	6.00				73,796	8.00
Common equity tier 1 capital (to risk-weighted    assets):
The Company		118,437		12.60			42,299	4.50			N/A		N/A
Bank		107,016		11.60			41,510	4.50				59,959	6.50
Tier I capital (to average assets):
The Company		118,437		9.66			49,031	4.00			N/A		N/A
Bank		107,016		8.81			48,581	4.00				60,726	5.00

	Capital levels
	Actual				Adequately capitalized					Well capitalized
As of December 31, 2018	Amount		Ratio		Amount		Ratio			Amount		Ratio
Total risk-based capital (to risk-weighted assets):
The Company	$	120,379	13.21%		$	72,910		8.00	%	$	91,137		10.00	%
Bank		110,508		12.52		70,619	8.00				88,273	10.00
Tier I capital (to risk-weighted assets):
The Company		111,472		12.23		54,682	6.00				54,682	6.00
Bank		101,601		11.51		52,964	6.00				70,619	8.00
Common equity tier 1 capital (to risk-weighted    assets):
The Company		111,472		12.23		41,012	4.50			N/A		N/A
Bank		101,601		11.51		39,723	4.50				57,378	6.50
Tier I capital (to average assets):
The Company		111,472		9.40		47,458	4.00			N/A		N/A
Bank		101,601		8.64		47,045	4.00				58,807	5.00