Regulatory Matters

12 Months Ended

Dec. 31, 2025

Regulatory Matters

Regulatory Matters

Note 20 – Regulatory Matters

The Company and Bank 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’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of 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 weighting, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain amounts and ratios (set forth in the table below) of Total capital, Tier 1 capital and common equity tier one capital ("CET1") (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined), referred to as the Leverage Ratio. Management believes, as of December 31, 2025 and 2024, that the Company and Bank met all capital adequacy requirements to which they are subject.

The table below displays the actual capital amounts and ratios for the Company and Bank.

	Company				Bank				Minimum Required For Capital Adequacy Purposes (1)		To Be Well Capitalized Under Prompt Corrective Action Regulations (2)
(dollars in thousands)	Actual Amount		Ratio		Actual Amount		Ratio
As of December 31, 2025
CET1 capital (to risk weighted assets)	$	1,170,352	13.07	%	$	1,190,094	13.37	%	7.00	%	6.50	%
Total capital (to risk weighted assets)	1,282,913		14.33	%	1,302,018		14.63	%	10.50	%	10.00	%
Tier 1 capital (to risk weighted assets)	1,170,352		13.07	%	1,190,094		13.37	%	8.50	%	8.00	%
Tier 1 capital (to average assets)	1,170,352		9.72	%	1,190,094		9.92	%	4.00	%	5.00	%
As of December 31, 2024
CET1 capital (to risk weighted assets)	$	1,369,643	14.63	%	$	1,373,857	14.76	%	7.00	%	6.50	%
Total capital (to risk weighted assets)	1,484,420		15.86	%	1,488,635		16.00	%	10.50	%	10.00	%
Tier 1 capital (to risk weighted assets)	1,369,643		14.63	%	1,373,857		14.76	%	8.50	%	8.00	%
Tier 1 capital (to average assets)	1,369,643		10.74	%	1,373,857		10.82	%	4.00	%	5.00	%

(1)The risk-based ratios reflect the minimum requirement plus the capital conservation buffer of 2.50%.

(2)Applies to Bank only.

Federal bank and holding company regulations, as well as Maryland law, impose certain restrictions on capital distributions, including dividend payments and share repurchases by the Bank, as well as restricting extensions of credit and transfers of assets between the Bank and the Company. As of December 31, 2025, the Bank could pay dividends to the parent to the extent of its earnings so long as it maintained capital ratios above the required minimums and the capital conservation buffer. As a result the Company may be restricted in paying dividends.