Note 7 - Regulatory Capital Requirements

3 Months Ended

Mar. 31, 2017

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

NOTE

7

– REGULATORY CAPITAL REQUIREMENTS

The Company (on a consolidated basis) and the subsidiary banks are 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 and subsidiary banks

’ financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the subsidiary banks must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification 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 and the subsidiary banks to maintain minimum amounts and ratios (set forth in the following table) of total common equity Tier

1

and Tier

1

capital to risk-weighted assets and of Tier

1

capital to average assets, each as defined by regulation. Management believes, as of

March

31,

2017

and

December

31,

2016,

that the Company and the subsidiary banks met all capital adequacy requirements to which they are subject.

Under the regulatory framework for prompt corrective action, to be categorized as “well capitalized,” an institution must maintain minimum total risk-based, Tier

1

risk-based, Tier

1

leverage and common equity Tier

1

ratios as set forth in the following tables. The Company and the subsidiary banks

’ actual capital amounts and ratios as of

March

31,

2017

and

December

31,

2016

are also presented in the following table (dollars in thousands). As of

March

31,

2017

and

December

31,

2016,

each of the subsidiary banks met the requirements to be “well capitalized”.

						For Capital					To Be Well
						Adequacy Purposes					Capitalized Under
						With Capital					Prompt Corrective
	Actual					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2017:
Company:
Total risk-based capital	$	336,993		11.90	%	$	262,053	>	9.25	%	$	283,300	>	10.0	%
Tier 1 risk-based capital		304,594		10.75	%		205,393	>	7.25			226,640	>	8.0
Tier 1 leverage		304,594		9.37	%		129,996	>	4.00			162,495	>	5.0
Common equity Tier 1		273,076		9.64	%		162,898	>	5.75			184,145	>	6.5
Quad City Bank & Trust:
Total risk-based capital	$	145,432		12.61	%	$	106,664	>	9.25	%	$	115,312	>	10.0	%
Tier 1 risk-based capital		131,860		11.44	%		83,601	>	7.25			92,250	>	8.0
Tier 1 leverage		131,860		9.25	%		57,045	>	4.00			71,306	>	5.0
Common equity Tier 1		131,860		11.44	%		66,304	>	5.75			74,953	>	6.5
Cedar Rapids Bank & Trust:
Total risk-based capital	$	107,776		12.79	%	$	77,956	>	9.25	%	$	84,277	>	10.0	%
Tier 1 risk-based capital		97,230		11.54	%		61,101	>	7.25			67,421	>	8.0
Tier 1 leverage		97,230		10.74	%		36,206	>	4.00			45,257	>	5.0
Common equity Tier 1		97,230		11.54	%		48,459	>	5.75			54,780	>	6.5
Community State Bank:
Total risk-based capital	$	66,300		13.50	%	$	45,426	>	9.25	%	$	49,109	>	10.0	%
Tier 1 risk-based capital		64,052		13.04	%		35,604	>	7.25			39,287	>	8.0
Tier 1 leverage		64,052		10.99	%		23,317	>	4.00			29,146	>	5.0
Common equity Tier 1		64,052		13.04	%		28,238	>	5.75			31,921	>	6.5
Rockford Bank & Trust:
Total risk-based capital	$	42,916		12.31	%	$	32,256	>	9.25	%	$	34,871	>	10.0	%
Tier 1 risk-based capital		38,548		11.05	%		25,282	>	7.25			27,897	>	8.0
Tier 1 leverage		38,548		9.82	%		15,707	>	4.00			19,634	>	5.0
Common equity Tier 1		38,548		11.05	%		20,051	>	5.75			22,666	>	6.5

						For Capital					To Be Well
						Adequacy Purposes					C apitalized Under
						With Capital					Prompt Corrective
	Actual					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2016:
Company:
Total risk-based capital	$	327,440		11.56	%	$	244,289	>	8.625	%	$	283,233	>	10.0	%
Tier 1 risk-based capital		296,366		10.46	%		187,642	>	6.625			226,587	>	8.0
Tier 1 leverage		296,366		9.10	%		130,229	>	4.000			162,787	>	5.0
Common equity Tier 1		266,419		9.41	%		145,157	>	5.125			184,102	>	6.5
Quad City Bank & Trust:
Total risk-based capital	$	142,990		12.27	%	$	100,494	>	8.625	%	$	116,515	>	10.0	%
Tier 1 risk-based capital		129,524		11.12	%		77,191	>	6.625			93,212	>	8.0
Tier 1 leverage		129,524		9.18	%		56,445	>	4.000			70,556	>	5.0
Common equity Tier 1		129,524		11.12	%		59,714	>	5.125			75,735	>	6.5
Cedar Rapids Bank & Trust:
Total risk-based capital	$	106,791		12.82	%	$	71,828	>	8.625	%	$	83,279	>	10.0	%
Tier 1 risk-based capital		96,369		11.57	%		55,173	>	6.625			66,623	>	8.0
Tier 1 leverage		96,369		10.69	%		36,061	>	4.000			45,076	>	5.0
Common equity Tier 1		96,369		11.57	%		42,681	>	5.125			54,132	>	6.5
Community State Bank:
Total risk-based capital	$	68,216		13.81	%	$	42,609	>	8.625	%	$	49,402	>	10.0	%
Tier 1 risk-based capital		66,746		13.51	%		32,729	>	6.625			39,522	>	8.0
Tier 1 leverage		66,746		11.75	%		22,726	>	4.000			28,408	>	5.0
Common equity Tier 1		66,746		13.51	%		25,319	>	5.125			32,111	>	6.5
Rockford Bank & Trust:
Total risk-based capital	$	42,007		12.26	%	$	29,551	>	8.625	%	$	34,262	>	10.0	%
Tier 1 risk-based capital		37,716		11.01	%		22,699	>	6.625			27,410	>	8.0
Tier 1 leverage		37,716		9.57	%		15,772	>	4.000			19,716	>	5.0
Common equity Tier 1		37,716		11.01	%		17,559	>	5.125			22,270	>	6.5

*The minimums under Basel III increase by

.625%

(the capital conservation buffer) annually until

2019.

The fully phased-in minimums are

10.5%

(Total risk-based capital),

8.5%

(Tier

1

risk-based capital), and

7.0%

(Common equity Tier

1).