REGULATORY MATTERS

12 Months Ended

Dec. 31, 2019

REGULATORY MATTERS [Abstract]

REGULATORY MATTERS

NOTE P: REGULATORY MATTERS

The Company and the Bank are 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 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 the Company’s and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  The Company’s and the Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.  Management believes, as of December 31, 2019, that the Company and Bank meet all applicable capital adequacy requirements.

Basel III Transitional rules became effective for the Company on January 1, 2015 with all of the requirements being phased in over a multi-year schedule, and fully phased in by January 1, 2019.  Beginning in 2016, the Company and the Bank are required to maintain a “capital conservation buffer,” composed entirely of common equity Tier 1 capital, in addition to minimum risk-based capital ratios.  The required capital conservation buffer is 2.50% for 2019 and 1.875% for 2018.  Therefore, to satisfy both the minimum risk-based capital ratios and the capital conservation buffer in 2019, the Company and the Bank must maintain: (i) Common equity Tier 1 capital to total risk-weighted assets of at least 7.0%, (ii) Tier 1 capital to total risk-weighted assets of at least 8.5%, and (iii) Total capital (Tier 1 capital plus Tier 2 capital) to total risk-weighted assets of at least 10.5%.  To satisfy both the minimum risk-based capital ratios and the capital conservation buffer in 2018, the Company and the Bank must maintain: (i) Common equity Tier 1 capital to total risk-weighted assets of at least 6.375%, (ii) Tier 1 capital to total risk-weighted assets of at least 7.875%, and (iii) Total capital (Tier 1 capital plus Tier 2 capital) to total risk-weighted assets of at least 9.875%. As of December 31, 2019 and 2018, the amounts, ratios and requirements for the Company are presented below calculated under the Basel III Standardized Transitional Approach. As of December 31, 2019, the OCC categorized the Company and Bank as “well capitalized” under the regulatory framework for prompt corrective action.

	Actual					For capital adequacy purposes					For capital adequacy purposes plus Capital Conservation Buffer					To be well-capitalized under prompt corrective action
(000’s omitted)	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
Community Bank System, Inc.:
2019
Tier 1 Leverage ratio	$	1,148,336		10.80	%	$	425,431		4.00	%						$	531,788		5.00	%
Tier 1 risk-based capital		1,148,336		17.23	%		399,834		6.00	%	$	566,432		8.50	%		533,112		8.00	%
Total risk-based capital		1,198,724		17.99	%		533,112		8.00	%		699,710		10.50	%		666,390		10.00	%
Common equity tier 1 capital		1,073,281		16.11	%		299,876		4.50	%		466,473		7.00	%		433,154		6.50	%
2018
Tier 1 Leverage ratio	$	1,093,166		11.08	%	$	394,700		4.00	%						$	493,375		5.00	%
Tier 1 risk-based capital		1,093,166		18.23	%		359,747		6.00	%	$	472,168		7.875	%		479,662		8.00	%
Total risk-based capital		1,142,927		19.06	%		479,662		8.00	%		592,083		9.875	%		599,578		10.00	%
Common equity tier 1 capital		998,111		16.65	%		269,810		4.50	%		382,231		6.375	%		389,726		6.50	%
Community Bank, N.A.:
2019
Tier 1 Leverage ratio	$	910,364		8.61	%	$	422,882		4.00	%						$	528,603		5.00	%
Tier 1 risk-based capital		910,364		13.79	%		396,064		6.00	%	$	561,091		8.50	%		528,086		8.00	%
Total risk-based capital		960,752		14.55	%		528,086		8.00	%		693,113		10.50	%		660,107		10.00	%
Common equity tier 1 capital		910,309		13.79	%		297,048		4.50	%		462,075		7.00	%		429,070		6.50	%
2018
Tier 1 Leverage ratio	$	912,995		9.32	%	$	391,953		4.00	%						$	489,941		5.00	%
Tier 1 risk-based capital		912,995		15.35	%		356,973		6.00	%	$	468,527		7.875	%		475,964		8.00	%
Total risk-based capital		962,756		16.18	%		475,964		8.00	%		587,518		9.875	%		594,955		10.00	%
Common equity tier 1 capital		912,940		15.35	%		267,730		4.50	%		379,284		6.375	%		386,721		6.50	%