Stockholders' Equity

12 Months Ended

Dec. 31, 2019

15.	Stockholders’ Equity

DIVIDENDS

Holders of the Class A common stock may not vote in the election of directors but may vote as a class to approve certain extraordinary corporate transactions. Holders of Class B common stock may vote in the election of directors. Class A common stockholders are entitled to receive dividends per share equal to at least 200% per share of that paid, if any, on each share of Class B common stock. Class A common stock is publicly traded. Class B common stock is not publicly traded; however, it can be converted on a per share basis to Class A common stock at any time at the option of the holder. Dividend payments by the Company are dependent in part on the dividends it receives from the Bank, which are subject to certain regulatory restrictions.

STOCK OPTION PLAN

During 2000 and 2004, common stockholders of the Company approved stock option plans (the “Option Plans”) that provide for granting of options for not more than 150,000 shares of Class A common stock per plan. Under the Option Plans, all officers and key employees of the Company are eligible to receive nonqualified and incentive stock options to purchase shares of Class A common stock. The Option Plans are administered by the Compensation Committee of the Board of Directors, whose members are ineligible to participate in the Option Plans. Based on management’s recommendations, the Committee submits its recommendations to the Board of Directors as to persons to whom options are to be granted, the number of shares granted to each, the option price (which may not be less than 85% of the fair market value for nonqualified stock options, or the fair market value for incentive stock options, of the shares on the date of grant) and the time period over which the options are exercisable (not more than ten years from the date of grant). There were no options outstanding at December 31, 2019 and December 31, 2018.

CAPITAL RATIOS

The Bank and the Company are subject to various regulatory requirements administered by 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 Bank and Company’s financial statements. Under capital adequacy guidelines and regulatory framework for prompt corrective action, the Bank and Company must meet specific capital guidelines that involve quantitative measures of the Bank and Company’s assets and liabilities, and certain

off-balance-sheet

items as calculated under regulatory accounting practices. The Bank and Company’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 Bank and the Company to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulation) to risk-weighted assets (as defined) and Tier 1 capital (as defined) to average assets (as defined). Management believes, as of December 31, 2019, that the Bank and the Company meet all capital adequacy requirements to which they are subject.

The Basel Committee has issued capital standards entitled “Basel III: A global framework for more resilient banks and banking systems” (Basel III). The Federal Reserve has finalized its rule implementing the Basel III regulatory capital framework. The rule was effective in January 2015 and sets the Basel III minimum Regulatory capital requirements. To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Common Equity tier 1, tier 1 risk-based, and Tier 1 leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes would cause a change in the Bank’s categorization.

The Bank’s actual capital amounts and ratios are presented in the following table:


	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2019 (Basel III)
Total Capital (to Risk-Weighted Assets)	$	401,850		13.57	%	$	236,830		8.00	%	$	296,037		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)		372,265		12.57	%		177,622		6.00	%		236,830		8.00	%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		372,265		12.57	%		133,217		4.50	%		192,424		6.50	%
Tier 1 Capital (to 4th Qtr. Average Assets)		372,265		7.01	%		212,549		4.00	%		265,686		5.00	%

As of December 31, 2018 (Basel III)
Total Capital (to Risk-Weighted Assets)	$	364,744		13.24	%	$	220,335		8.00	%	$	275,419		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)		336,201		12.21	%		165,251		6.00	%		220,335		8.00	%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		336,201		12.21	%		123,938		4.50	%		179,022		6.50	%
Tier 1 Capital (to 4th Qtr. Average Assets)		336,201		6.68	%		201,228		4.00	%		251,535		5.00	%

The Company’s actual capital amounts and ratios are presented in the following table:


	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2019 (Basel III)
Total Capital (to Risk-Weighted Assets)	$	415,863		13.97	%	$	238,132		8.00	%	$	297,665		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)		386,308		12.98	%		178,599		6.00	%		238,132		8.00	%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		351,308		11.80	%		133,949		4.50	%		193,482		6.50	%
Tier 1 Capital (to 4th Qtr. Average Assets)		386,308		7.25	%		213,222		4.00	%		266,528		5.00	%

As of December 31, 2018 (Basel III)
Total Capital (to Risk-Weighted Assets)	$	377,359		13.62	%	$	221,690		8.00	%	$	277,113		10.00	%
Tier 1 Capital (to Risk-Weighted Assets)		348,816		12.59	%		166,268		6.00	%		221,690		8.00	%
Common Equity Tier 1 Capital (to Risk-Weighted Assets)		313,816		11.32	%		124,701		4.50	%		180,123		6.50	%
Tier 1 Capital (to 4th Qtr. Average Assets)		348,816		6.91	%		201,913		4.00	%		252,391		5.00	%