Regulatory Capital Matters

6 Months Ended

Jun. 30, 2020

Banking And Thrift Disclosure [Abstract]

Regulatory Capital Matters

Regulatory Capital Matters

The amount of dividends payable to the parent company from the subsidiary bank is limited by various banking regulatory agencies. Upon approval by regulatory authorities, the Bank may pay cash dividends to the parent company in excess of regulatory limitations.

The Company is subject to various regulatory capital 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 Company’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s capital amounts and classifications 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 Company to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets.  As of June 30, 2020, the interim final Basel III rules (“Basel III”) require the Company to also maintain minimum amounts and ratios of common equity Tier 1 capital to risk-weighted assets.  These amounts and ratios as defined in regulations are presented hereafter.  Management believes, as of June 30, 2020, the Company meets all capital adequacy requirements to which it is subject under the regulatory framework for prompt corrective action.  In the opinion of management, there are no events or conditions since prior notification of capital adequacy from the regulators that have changed the institution’s category.

The Basel III rules also require the implementation of a new capital conservation buffer comprised of common equity Tier 1 capital.  The capital conservation buffer was phased in beginning January 1, 2016 at 0.625% of risk-weighted assets and increase each subsequent year by 0.625% until reaching its final level of 2.5% on January 1, 2019.

The Bank is participating in the PPP and the PPPLF to fund PPP Loans. In accordance with regulatory guidance, PPP loans pledged as collateral for PPPLF, and PPPLF advances, are excluded from leverage capital ratios. PPP loans will also carry a 0% risk-weight for risk-based capital rules.

The Board of Governors of the Federal Reserve raised the threshold for determining applicable of the Small Bank Holding Company and Savings and Loan Company Policy Statement in August 2018 from $1 billion to $3 billion in consolidated total assets to provide regulatory burden relief, therefore, the Company is no longer subject to the minimum capital requirements.

The following table summarizes regulatory capital information as of June 30, 2020 and December 31, 2019 on a consolidated basis and for the subsidiary, as defined.  Regulatory capital ratios for June 30, 2020 and December 31, 2019 were calculated in accordance with the Basel III rules.

(dollars in thousands)	Actual				For Capital Adequacy Purposes				To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of June 30, 2020
Total Capital to Risk-Weighted Assets
Consolidated	$	146,711	13.32	%	$	88,115	8.00	%	N/A		N/A
Colony Bank	153,745		13.92		88,359		8.00		$	110,449	10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated	136,423		12.39		66,064		6.00		N/A		N/A
Colony Bank	143,456		12.99		66,261		6.00		88,349		8.00
Common Equity Tier I Capital to Risk-Weighted Assets
Consolidated	112,923		10.26		49,528		4.50		N/A		N/A
Colony Bank	143,456		12.99		49,696		4.50		71,783		6.50
Tier I Capital to Average Assets
Consolidated	136,423		9.23		59,122		4.00		N/A		N/A
Colony Bank	143,456		9.70		59,157		4.00		73,946		5.00

(dollars in thousands)	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
Total Capital to Risk-Weighted Assets
Consolidated	$	140,973	13.17	%	$	85,661	8.00	%	N/A		N/A
Colony Bank	151,444		14.19		85,407		8.00		$	106,758	10.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated	134,110		12.52		64,246		6.00		N/A		N/A
Colony Bank	144,581		13.54		64,055		6.00		8,547		8.00
Common Equity Tier I Capital to Risk-Weighted Assets
Consolidated	110,610		10.33		48,185		4.50		N/A		N/A
Colony Bank	144,581		13.54		48,041		4.50		69,393		6.50
Tier I Capital to Average Assets
Consolidated	134,110		8.92		60,141		4.00		N/A		N/A
Colony Bank	144,581		9.77		59,977		4.00		74,972		5.00