Regulatory Matters

9 Months Ended

Sep. 30, 2019

Regulatory Matters

Regulatory Matters

NOTE 18 Regulatory Matters

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 Company’s and the Bank’s consolidated financial statements.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of common equity tier 1, tier 1, and total capital (as defined in the regulations) to risk weighted assets (as defined) and of tier 1 capital (as defined) to average assets (as defined). Management believes as of September 30, 2019 and December 31, 2018, the Bank had met all of the capital adequacy requirements to which it is subject and would be considered well capitalized under the regulatory framework for prompt corrective action.

The following table presents the Company’s and  the Bank’s actual capital amounts and ratios as of September 30, 2019 and December 31, 2018:

	September 30, 2019
								Minimum to be
					Requirements			Well Capitalized
					for Capital			Under Prompt
	Actual				Adequacy Purposes			Corrective Action
(dollars in thousands)	Amount		Ratio		Amount	Ratio		Amount	Ratio
Common equity tier 1 capital to risk weighted assets
Consolidated	$	233,030	12.38	%	84,705	4.50	%	N/A	N/A
Bank		222,600	11.84	%	84,594	4.50	%	122,192	6.50	%
Tier 1 capital to risk weighted assets								.
Consolidated		241,197	12.81	%	112,940	6.00	%	N/A	N/A
Bank		222,600	11.84	%	112,792	6.00	%	150,390	8.00	%
Total capital to risk weighted assets
Consolidated		313,700	16.67	%	150,587	8.00	%	N/A	N/A
Bank		245,585	13.06	%	150,390	8.00	%	187,987	10.00	%
Tier 1 capital to average assets
Consolidated		241,197	11.33	%	85,152	4.00	%	N/A	N/A
Bank		222,600	10.47	%	85,009	4.00	%	106,261	5.00	%

	December 31, 2018
								Minimum to be
					Requirements			Well Capitalized
					for Capital			Under Prompt
	Actual				Adequacy Purposes			Corrective Action
(dollars in thousands)	Amount		Ratio		Amount	Ratio		Amount	Ratio
Common equity tier 1 capital to risk weighted assets
Consolidated	$	151,745	8.43	%	N/A	N/A		N/A	N/A
Bank		204,680	11.39	%	80,866	4.50	%	116,806	6.50	%
Tier 1 capital to risk weighted assets
Consolidated		159,774	8.87	%	N/A	N/A		N/A	N/A
Bank		204,680	11.39	%	107,821	6.00	%	143,761	8.00	%
Total capital to risk weighted assets
Consolidated		231,510	12.86	%	N/A	N/A		N/A	N/A
Bank		226,854	12.62	%	143,806	8.00	%	179,758	10.00	%
Tier 1 capital to average assets
Consolidated		159,774	7.51	%	N/A	N/A		N/A	N/A
Bank		204,680	9.63	%	85,018	4.00	%	106,272	5.00	%

The Bank is subject to certain restrictions on the amount of dividends that it may pay without prior regulatory approval. In addition, the Company must adhere to various U.S. Department of Housing and Urban Development (“HUD”) regulatory guidelines including required minimum capital and liquidity to maintain their Federal Housing Administration approval status. Failure to comply with the HUD guidelines could result in withdrawal of this certification. As of September 30, 2019, and December 31, 2018, the Company was in compliance with HUD guidelines.