Note 18 - Regulatory Matters

9 Months Ended

Sep. 30, 2018

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

( 18 ) Regulatory Matters

Bancorp and the Bank are subject to various capital requirements prescribed by banking regulations and administered by state and federal banking agencies. Under these requirements, Bancorp and the Bank must meet minimum amounts and percentages of Tier

1,

common equity Tier

1,

and total capital, as defined, to risk weighted assets and Tier

1

capital to average assets. Risk weighted assets are determined by applying certain risk weightings prescribed by regulation to various categories of assets and off-balance sheet commitments. Capital and risk weighted assets

may

be further subject to qualitative judgments by regulators as to components, risk weighting and other factors. Failure to meet capital requirements can result in certain mandatory, and possibly discretionary, corrective actions prescribed by regulation or determined to be necessary by regulators, which could materially affect the unaudited consolidated financial statements.

In

2013,

the Federal Reserve Board and the FDIC approved rules that substantially amended regulatory risk-based capital rules applicable to Bancorp and the Bank. The rules implemented regulatory capital reforms of the Basel Committee on Banking Supervision reflected in "Basel III: A Global Regulatory Framework for More Resilient Banks and Banking Systems" (Basel III) and changes required by the Dodd-Frank Act. Basel III regulatory capital reforms became effective for Bancorp and the Bank on

January 1, 2015,

and include new minimum risk-based capital and leverage ratios. Bancorp and the Bank met all capital requirements to which they were subject as of

September 30, 2018.

The following table sets forth consolidated Bancorp’s and the Bank’s risk based capital amounts and ratios as of

September 30, 2018

and

December 31, 2017.

(Dollars in thousands)	Actual					Minimum for adequately capitalized					Minimum for well capitalized
September 30, 2018	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (1)
Consolidated	$	385,647		13.50	%	$	228,532		8.00	%	NA		NA
Bank		375,047		13.15			228,165		8.00		$	285,207		10.00	%
Common equity tier 1 risk-based capital
Consolidated		360,075		12.61			128,496		4.50		NA		NA
Bank		349,475		12.25			128,379		4.50			185,436		6.50
Tier 1 risk-based capital (1)
Consolidated		360,075		12.61			171,328		6.00		NA		NA
Bank		349,475		12.25			171,171		6.00			228,229		8.00
Leverage (2)
Consolidated		360,075		11.40			126,342		4.00		NA		NA
Bank		349,475		11.08			126,164		4.00			157,705		5.00

(Dollars in thousands)	Actual					Minimum for adequately capitalized					Minimum for well capitalized
December 31, 2017	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (1)
Consolidated	$	359,866		13.52	%	$	213,012		8.00	%	NA		NA
Bank		347,840		13.07			212,891		8.00		$	266,114		10.00
Common equity tier 1 risk-based capital
Consolidated		334,631		12.57			119,820		4.50		NA		NA
Bank		322,605		12.12			212,891		4.50			172,974		6.50
Tier 1 risk-based capital (1)
Consolidated		334,631		12.57			159,760		6.00		NA		NA
Bank		322,605		12.12			159,668		6.00			212,891		8.00
Leverage (2)
Consolidated		334,631		10.70			125,122		4.00		NA		NA
Bank		322,605		10.32			125,040		4.00			156,300		5.00

( 1 )	Ratio is computed in relation to risk-weighted assets.
( 2 )	Ratio is computed in relation to average assets.
NA	Not applicable. Regulatory framework does not define well capitalized for holding companies.