The new Community Bank Leverage Ratio (“CBLR”) optional framework was effective for Q1 2020 Call Reports.

The framework provided Community Banks with the option of continuing the current risk-based capital framework and reporting or opt-in for the new CBLR framework and maintain a minimum Leverage Ratio of 9.0%. We discussed that this CBLR election would be attractive to some Community Banks but not others in Capital Planning Issues.

With Q1 2020 Call Reports filed, approximately one-third of Community Banks elected to opt-in and utilize the new CBLR framework.

There was some differentiation among Community Banks by size. Smaller Community Banks opted-in at a higher level than larger Community Banks. Approximately 40 percent of Community Banks with less than $250 million in Total Assets opted-in. This opt-in percentage for Community Banks between $500 million and $1 billion was 29 percent; and Community Banks between $1 billion and $10 billion opted-in at only 17.5 percent.