Note 9 - Regulatory Capital

12 Months Ended

Dec. 31, 2017

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note

9:

Regulatory Capital

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can result in regulatory action. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) became effective for the Company on

January 1, 2015

with full compliance with all of the requirements being phased in over a multi-year schedule, and fully phased in by

January 1, 2019.

Under the Basel III rules, the Company must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The capital conservation buffer is being phased in from

0.0%

for

2015

to

2.50%

by

2019.

The capital conservation buffer for

2017

was

1.25%

and

0.625%

for

2016.

The net unrealized gain or loss on available for sale securities is

not

included in computing regulatory capital. Management believes as of

December 31, 2017,

the Company and Bank met all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide

five

classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are

not

used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end

2017

and

2016,

the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are

no

conditions or events since that notification that management believes have changed the institution’s category.

The capital ratios for the Company and the Bank under the new capital framework as of the dates indicated are presented in the table below.

	At December 31, 2017					Required for Capital Adequacy Purposes Effective January 1, 2017					To Be Well-capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	($ in thousands)
Common Equity Tier 1 Capital
Company	$	479,259		15.36	%	$	179,377		5.75	% (1)		N/A		N/A
Bank		383,796		12.50	%		176,568		5.75	% (1)	$	199,599		6.50	%
Tier 1 Capital
Company		479,259		15.36	%		226,170		7.25	% (1)		N/A		N/A
Bank		383,796		12.50	%		222,630		7.25	% (1)		245,660		8.00	%
Total Capital
Company		504,576		16.17	%		288,562		9.25	% (1)		N/A		N/A
Bank		415,113		13.52	%		284,045		9.25	% (1)		307,076		10.00	%
Leverage Ratio (2)
Company		479,259		8.86	%		216,280		4.000	%		N/A		N/A
Bank		383,796		7.16	%		214,468		4.000	%		268,085		5.00	%

(

1

)

Includes

1.25%

capital conservation buffer.

(

2

)

The leverage ratio consists of Tier

1capital

divided by the most recent quarterly average total assets, excluding certain intangible assets.

	At December 31, 2016					Required for Capital Adequacy Purposes Effective January 1, 2016					To Be Well-capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	($ in thousands)
Common Equity Tier 1 Capital
Company	$	443,574		14.85	%	$	153,126		5.125	% (3)		N/A		N/A
Bank		344,739		11.70	%		150,982		5.125	% (3)	$	191,489		6.50	%
Tier 1 Capital
Company		443,574		14.85	%		197,944		6.625	% (3)		N/A		N/A
Bank		344,739		11.70	%		195,172		6.625	% (3)		235,680		8.00	%
Total Capital
Company		476,595		15.95	%		257,700		8.625	% (3)		N/A		N/A
Bank		383,572		13.02	%		254,092		8.625	% (3)		294,600		10.00	%
Leverage Ratio (2)
Company		443,574		8.46	%		209,702		4.000	%		N/A		N/A
Bank		344,739		6.63	%		208,005		4.000	%		260,006		5.00	%

(

3

)

Includes

0.625%

capital conservation buffer.

(

2

)

The leverage ratio consists of Tier

1capital

divided by the most recent quarterly average total assets, excluding certain intangible assets.