REGULATORY MATTERS

3 Months Ended

Mar. 31, 2022

Regulatory Capital Requirements Under Banking Regulations [Abstract]

REGULATORY MATTERS

REGULATORY MATTERS

The Bank is subject to certain restrictions on the amount of dividends that may be declared without prior regulatory approval. At March 31, 2022, approximately $38,082 of retained earnings was available for dividend declaration without regulatory approval.

The Bank is also 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 Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. 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 Bank to maintain minimum amounts and ratios of total capital, Tier 1 capital, and common equity Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets. In addition, the Bank is subject to an institution-specific capital buffer, which must exceed 2.50% to avoid limitations on distributions and discretionary bonus payments. Management believes, as of March 31, 2022 and December 31, 2021, that the Bank meets all capital adequacy requirements to which it is subject.

As of March 31, 2022, the Company and the Bank believe they are each well capitalized on a consolidated basis for bank regulatory purposes as their respective capital ratios exceed minimum total Tier 1 and CET1 risk-based capital ratios and Tier 1 leverage capital ratios as set forth in the following table. As a bank holding company with less than $3 billion in total consolidated assets, the Company is eligible to be treated as a “small bank holding company” under the Federal Reserve’s Small Bank Holding Company and Savings and Loan Holding Company Policy Statement. As a result, the Company’s capital adequacy is evaluated at the bank level and on a parent-only basis, and it is not subject to consolidated capital standards for regulatory purposes. The ratios set forth below as to the Company are for illustrative purposes in the event it were to become subject to consolidated capital standards for regulatory purposes. The column styled “Required for Capital Adequacy Purposes” includes the 2.5% capital conservation buffer.

	Actual				Required for Capital Adequacy Purposes				Minimums To Be “Well Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
As of March 31, 2022
Tier 1 capital (to average assets)
Company	$	154,648	8.75	%	$	70,717	4.00	%	$	—	—
Bank	$	192,383	10.88	%	$	70,717	4.00	%	$	88,396	5.00	%
CET 1 capital (to risk-weighted assets)
Company	$	154,648	9.90	%	$	109,331	7.00	%	$	—	—
Bank	$	192,383	12.32	%	$	109,331	7.00	%	$	101,522	6.50	%
Tier 1 capital (to risk-weighted assets)
Company	$	154,648	9.90	%	$	132,759	8.50	%	$	—	—
Bank	$	192,383	12.32	%	$	132,759	8.50	%	$	124,950	8.00	%
Total capital (to risk-weighted assets)
Company	$	218,140	13.97	%	$	163,997	10.50	%	$	—	—
Bank	$	207,875	13.31	%	$	163,997	10.50	%	$	156,187	10.00	%

	Actual				Required for Capital Adequacy Purposes				Minimums To Be “Well Capitalized” Under Prompt Corrective Action
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(dollars in thousands)
As of December 31, 2021
Tier 1 capital (to average assets)
Company	$	156,723	9.74	%	$	64,376	4.00	%	$	—	—
Bank	$	168,027	10.44	%	$	64,376	4.00	%	$	80,470	5.00	%
CET 1 capital (to risk-weighted assets)
Company	$	156,723	10.35	%	$	106,019	7.00	%	$	—	—
Bank	$	168,027	11.09	%	$	106,019	7.00	%	$	98,446	6.50	%
Tier 1 capital (to risk-weighted assets)
Company	$	156,723	10.35	%	$	128,737	8.50	%	$	—	—
Bank	$	168,027	11.09	%	$	128,737	8.50	%	$	121,164	8.00	%
Total capital (to risk-weighted assets)
Company	$	171,567	11.33	%	$	159,028	10.50	%	$	—	—
Bank	$	182,871	12.07	%	$	159,028	10.50	%	$	151,455	10.00	%