Dividend Restrictions

12 Months Ended

Dec. 31, 2018

Dividends [Abstract]

Dividend Restrictions

Dividend Restrictions

The Bank is subject to the Pennsylvania Banking Code of 1965 (the “Code”), as amended, and is restricted in the amount of dividends that can be paid to its sole shareholder, the Corporation. The Code restricts the payment of dividends by the Bank to the amount of its net income during the current calendar year and the retained net income of the prior two calendar years, unless the dividend has been approved by the Board of Governors of the Federal Reserve System. Accordingly, the dividend payable by the Bank to the Corporation beginning on January 1, 2019 is limited to net income not yet earned in 2019 plus the Bank’s total retained net income for the combined two years ended December 31, 2017 and 2018 of $55.1 million. The Bank issued $26.0 million of dividends to the Corporation during the year ended December 31, 2018, and did not issue any dividends to the Corporation during the year ended December 31, 2017. The amount of dividends paid by the Bank may not exceed a level that reduces capital levels to below levels that would cause the Bank to be considered less than adequately capitalized as detailed in Note 27 – “Regulatory Capital Requirements.”