Shareholders' Equity

9 Months Ended

Sep. 30, 2021

Broker-Dealer, Net Capital Requirement, SEC Regulation [Abstract]

Shareholders' Equity

Shareholders' Equity

Stock Repurchase Program

The Corporation’s Stock Repurchase Program adopted on December 1, 2020 (the “2020 Repurchase Program”) authorizes the repurchase of up to 850,000 shares, or approximately 5%, of the Corporation’s outstanding common stock. This authority may be exercised from time to time and in such amounts as market conditions warrant, and subject to regulatory considerations. The timing and actual number of shares repurchased depend on a variety of factors including price, corporate and regulatory requirements, market conditions, and other corporate liquidity requirements and priorities. The 2020 Repurchase Program expired on October 31, 2021 and no shares were repurchased under this program.

Regulatory Capital Requirements

Capital levels at September 30, 2021 exceeded the regulatory minimum levels to be considered “well capitalized.”

The following table presents the Corporation’s and the Bank’s actual capital amounts and ratios, as well as the corresponding minimum and well capitalized regulatory amounts and ratios that were in effect during the respective periods:

(Dollars in thousands)	Actual			For Capital Adequacy Purposes			To Be “Well Capitalized” Under Prompt Corrective Action Provisions
	Amount	Ratio		Amount	Ratio		Amount	Ratio
September 30, 2021
Total Capital (to Risk-Weighted Assets):
Corporation	$569,424	13.83	%	$329,407	8.00	%	N/A	N/A
Bank	559,605	13.59		329,378	8.00		$411,723	10.00	%
Tier 1 Capital (to Risk-Weighted Assets):
Corporation	535,552	13.01		247,055	6.00		N/A	N/A
Bank	525,733	12.77		247,034	6.00		329,378	8.00
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
Corporation	513,553	12.47		185,291	4.50		N/A	N/A
Bank	525,733	12.77		185,275	4.50		267,620	6.50
Tier 1 Capital (to Average Assets): (1)
Corporation	535,552	9.12		234,803	4.00		N/A	N/A
Bank	525,733	8.96		234,722	4.00		293,403	5.00
December 31, 2020
Total Capital (to Risk-Weighted Assets):
Corporation	539,496	13.51		319,532	8.00		N/A	N/A
Bank	534,288	13.38		319,503	8.00		399,379	10.00
Tier 1 Capital (to Risk-Weighted Assets):
Corporation	503,791	12.61		239,649	6.00		N/A	N/A
Bank	498,583	12.48		239,627	6.00		319,503	8.00
Common Equity Tier 1 Capital (to Risk-Weighted Assets):
Corporation	481,792	12.06		179,737	4.50		N/A	N/A
Bank	498,583	12.48		179,721	4.50		259,596	6.50
Tier 1 Capital (to Average Assets): (1)
Corporation	503,791	8.95		225,209	4.00		N/A	N/A
Bank	498,583	8.86		225,126	4.00		281,407	5.00

(1)    Leverage ratio.

In addition to the minimum regulatory capital required for capital adequacy purposes outlined in the table above, the Corporation is required to maintain a minimum capital conservation buffer, in the form of common equity, of 2.50% in order to avoid restrictions on capital distributions and discretionary bonuses. The Corporation’s capital levels exceeded the minimum regulatory capital requirements plus the capital conservation buffer at September 30, 2021 and December 31, 2020.

The Bancorp owns the common stock of two capital trusts, which have issued trust preferred securities. In accordance with GAAP, the capital trusts are treated as unconsolidated subsidiaries. At both September 30, 2021 and December 31, 2020, $22.0 million in trust preferred securities were included in the Tier 1 capital of the Corporation for regulatory capital reporting purposes pursuant to the FRB’s capital adequacy guidelines.

In accordance with regulatory capital rules, the Corporation elected the option to delay the estimated impact of Accounting Standards Codification (“ASC”) 326 on its regulatory capital over a two-year deferral and subsequent three-year transition period ending December 31, 2024. As a result, capital ratios and amounts as of September 30, 2021 and December 31, 2020 exclude the impact of the increased ACL on loans and unfunded loan commitments attributed to the adoption of ASC 326, which was effective January 1, 2020, adjusted for an approximation of the after-tax provision for credit losses attributable to

ASC 326 relative to the incurred loss methodology during the deferral period. The cumulative difference at the end of the deferral period will be phased-in to regulatory capital over a three-year transition period beginning in 2022.