2024 Journal of Community Bank Case Studies

FIRST PLACE: Commonwealth University of Pennsylvania

Figure 3: Asset Growth FCCB vs PG4

2019

2020

FCCB PG4

2021

2022

2023

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

Source: FFIEC UBPR Call Reports, FCCB. PGAR, PG4.

three branches across New York, Pennsylvania, and Delaware (FCCB). In summary, FCCB grew significantly over the period, outperforming its peers due to the acquisitions of two banks. Part I.5: Capital Levels FCCB operates under the capital framework outlined by Basel III. Through this framework, regulators mandate banks to maintain minimum capital ratios for total, tier 1, leverage, and common equity tier I capital to risk-weighted assets. The Federal Deposit Insurance Corporation Improvement Act introduced

Figure 4 displays FCCB’s leverage, tier 1, and total capital ratios over the past five years compared to PG4. According to FCCB’s BHC’s most recent 10-K report, “an institution is deemed to be ‘well-capitalized’ if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a leverage ratio of 5.0% or greater and a common equity Tier 1 ratio of 6.5% or greater.” According to Figure 4, FCCB exceeds the benchmarks and has been categorized as a well-capitalized bank for the past five years.

five capital classifications for banks: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically under-capitalized. Failure to meet the criteria for at least adequate capitalization subjects a bank to regulatory scrutiny.

Figure 4: Capital Adequacy and Growth

0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00%

Leverage Tier 1 Total

FCCB PG4 FCCB PG4 FCCB PG4 FCCB PG4 FCCB PG4 2019 2020 2021 2022 2023

Source: FFIEC UBPR Call Reports, FCCB. PGAR, PG4; 2023 SEC 10-K report, CZFS.

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