Capital Requirements

12 Months Ended

Dec. 31, 2018

Banking and Thrift [Abstract]

Capital Requirements

Capital Requirements

The Bank is subject to various regulatory capital requirements administered by the 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 financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Effective January 1, 2015, the Federal Reserve issued a final rule that made technical changes to its market risk capital rules to align them with the BASEL III regulatory capital framework and meet certain requirements of the Dodd-Frank Act. The phase-in period for the final rules began January 1, 2015 with full compliance with the final rules phased in by January 1, 2019. As a part of this final rule, the Bank was required to begin calculating and disclosing Common Equity Tier 1 Capital to risk weighted assets in 2015. In addition to the minimum regulatory capital required for capital adequacy purposes , the Bank is required to maintain a minimum Capital Conservation Buffer, in the form of common equity, in order to avoid restrictions on capital distributions and discretionary bonuses. The required amount of the Capital Conservation Buffer was 0.625% on January 1, 2016 and has increased by 0.625% each year until it reached 2.5% on January 1, 2019. The Capital Conservation Buffer is applicable to all ratios except the leverage ratio, which is noted below as Tier 1 Capital to Average Assets. The Bank's institution specific capital conservation buffer at December 31, 2018 was 6.88%.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total capital, Tier 1 capital, and common equity Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital to average assets (as defined). Management believes the Bank met all capital adequacy requirements to which it was subject at December 31, 2018 and 2017.

At December 31, 2018, the most recent notification from the Federal Reserve categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and common equity Tier 1 ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed the Bank’s category.

The following table presents the Company’s and the Bank’s actual capital amounts and ratios at December 31, 2018 and 2017:

									Minimum To Be Well
					Minimum Capital				Capitalized Under Prompt Corrective
	Actual				Requirement				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
December 31, 2018:
Common Equity Tier 1 Capital to Risk
Weighted Assets
Bank of Clarke County	$	85,763	13.99	%	$	27,596	4.50	%	$	39,861	6.50	%
Total Capital to Risk Weighted Assets
Bank of Clarke County	$	91,237	14.88	%	$	49,060	8.00	%	$	61,325	10.00	%
Tier 1 Capital to Risk Weighted Assets
Bank of Clarke County	$	85,763	13.99	%	$	36,795	6.00	%	$	49,060	8.00	%
Tier 1 Capital to Average Assets
Bank of Clarke County	$	85,763	10.92	%	$	31,424	4.00	%	$	39,280	5.00	%
December 31, 2017:
Common Equity Tier 1 Capital to Risk
Weighted Assets
Bank of Clarke County	$	80,150	14.08	%	$	25,622	4.50	%	$	37,009	6.50	%
Total Capital to Risk Weighted Assets
Bank of Clarke County	$	84,583	14.86	%	$	45,550	8.00	%	$	56,938	10.00	%
Tier 1 Capital to Risk Weighted Assets
Bank of Clarke County	$	80,150	14.08	%	$	34,163	6.00	%	$	45,550	8.00	%
Tier 1 Capital to Average Assets
Bank of Clarke County	$	80,150	10.86	%	$	29,511	4.00	%	$	36,889	5.00	%