Note 7 - Regulatory Capital Requirements

3 Months Ended

Mar. 31, 2018

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, 2018

and

December 31, 2017,

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, 2018

and

December 31, 2017

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

March 31, 2018

and

December 31, 2017,

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

											For Capital					To Be Well
											Adequacy Purposes					Capitalized Under
						For Capital					With Capital					Prompt Corrective
	Actual					Adequacy Purposes					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of March 31, 2018:
Company:
Total risk-based capital	$	395,160		11.25	%	$	281,109	>	8.00	%	$	346,994	>	9.875	%	$	351,386	>	10.00	%
Tier 1 risk-based capital		358,627		10.21	%		210,832	>	6.00			276,717	>	7.875			281,109	>	8.00
Tier 1 leverage		358,627		9.08	%		157,993	>	4.00			157,993	>	4.000			197,491	>	5.00
Common equity Tier 1		321,093		9.14	%		158,124	>	4.50			224,009	>	6.375			228,401	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	160,996		12.32	%	$	104,544	>	8.00	%	$	129,047	>	9.875	%	$	130,680	>	10.00	%
Tier 1 risk-based capital		147,618		11.30	%		78,408	>	6.00			102,911	>	7.875			104,544	>	8.00
Tier 1 leverage		147,618		9.63	%		61,343	>	4.00			61,343	>	4.000			76,678	>	5.00
Common equity Tier 1		147,618		11.30	%		58,806	>	4.50			83,309	>	6.375			84,942	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	142,034		11.96	%	$	94,998	>	8.00	%	$	117,264	>	9.875	%	$	118,748	>	10.00	%
Tier 1 risk-based capital		129,507		10.91	%		71,249	>	6.00			93,514	>	7.875			94,998	>	8.00
Tier 1 leverage		129,507		9.87	%		52,483	>	4.00			52,483	>	4.000			65,603	>	5.00
Common equity Tier 1		129,507		10.91	%		53,437	>	4.50			75,702	>	6.375			77,186	>	6.50
Community State Bank:
Total risk-based capital	$	67,996		11.39	%	$	47,738	>	8.00	%	$	58,926	>	9.875	%	$	59,672	>	10.00	%
Tier 1 risk-based capital		63,105		10.58	%		35,803	>	6.00			46,992	>	7.875			47,738	>	8.00
Tier 1 leverage		63,105		9.35	%		27,010	>	4.00			27,010	>	4.000			33,763	>	5.00
Common equity Tier 1		63,105		10.58	%		26,853	>	4.50			38,041	>	6.375			38,787	>	6.50
Rockford Bank & Trust:
Total risk-based capital	$	46,567		11.07	%	$	33,644	>	8.00	%	$	41,530	>	9.875	%	$	42,055	>	10.00	%
Tier 1 risk-based capital		41,305		9.82	%		25,233	>	6.00			33,119	>	7.875			33,644	>	8.00
Tier 1 leverage		41,305		8.93	%		18,498	>	4.00			18,498	>	4.000			23,123	>	5.00
Common equity Tier 1		41,305		9.82	%		18,925	>	4.50			26,810	>	6.375			27,336	>	6.50

											For Capital					To Be Well
											Adequacy Purposes					Capitalized Under
						For Capital					With Capital					Prompt Corrective
	Actual					Adequacy Purposes					Conservation Buffer*					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2017:
Company:
Total risk-based capital	$	383,282		11.15	%	$	275,090	>	8.00	%	$	318,073	>	9.25	%	$	343,862	>	10.00	%
Tier 1 risk-based capital		348,530		10.14	%		206,317	>	6.00			249,300	>	7.25			275,090	>	8.00
Tier 1 leverage		348,530		8.98	%		155,256	>	4.00			155,256	>	4.00			194,070	>	5.00
Common equity Tier 1		313,012		9.10	%		154,738	>	4.50			197,721	>	5.75			223,510	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	160,112		12.35	%	$	103,711	>	8.00	%	$	119,916	>	9.25	%	$	129,639	>	10.00	%
Tier 1 risk-based capital		147,472		11.38	%		77,783	>	6.00			93,988	>	7.25			103,711	>	8.00
Tier 1 leverage		147,472		9.52	%		61,985	>	4.00			61,985	>	4.00			77,481	>	5.00
Common equity Tier 1		147,472		11.38	%		58,337	>	4.50			74,542	>	5.75			84,265	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	138,492		11.88	%	$	93,272	>	8.00	%	$	107,846	>	9.25	%	$	116,590	>	10.00	%
Tier 1 risk-based capital		126,601		10.86	%		69,954	>	6.00			84,528	>	7.25			93,272	>	8.00
Tier 1 leverage		126,601		11.68	%		43,348	>	4.00			43,348	>	4.00			54,185	>	5.00
Common equity Tier 1		126,601		10.86	%		52,465	>	4.50			67,039	>	5.75			75,783	>	6.50
Community State Bank:
Total risk-based capital	$	66,271		11.71	%	$	45,293	>	8.00	%	$	52,370	>	9.25	%	$	56,616	>	10.00	%
Tier 1 risk-based capital		61,941		10.94	%		33,970	>	6.00			41,047	>	7.25			45,293	>	8.00
Tier 1 leverage		61,941		9.77	%		25,354	>	4.00			25,354	>	4.00			31,693	>	5.00
Common equity Tier 1		61,941		10.94	%		25,477	>	4.50			32,554	>	5.75			36,801	>	6.50
Rockford Bank & Trust:
Total risk-based capital	$	45,684		11.28	%	$	32,413	>	8.00	%	$	37,477	>	9.25	%	$	40,516	>	10.00	%
Tier 1 risk-based capital		40,615		10.02	%		24,310	>	6.00			29,374	>	7.25			32,413	>	8.00
Tier 1 leverage		40,615		8.94	%		18,177	>	4.00			18,177	>	4.00			22,721	>	5.00
Common equity Tier 1		40,615		10.02	%		18,232	>	4.50			23,297	>	5.75			26,335	>	6.50

*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

).