REGULATORY CAPITAL

12 Months Ended

Jun. 30, 2022

REGULATORY CAPITAL

REGULATORY CAPITAL

17.     REGULATORY CAPITAL

The Bank and Pioneer Commercial Bank are subject to various regulatory capital requirements administered by 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 consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, banks must meet specific capital guidelines that involve quantitative measures of the bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank and Pioneer Commercial Bank to maintain minimum capital amounts and ratios (set forth in the table below) of Tier 1 capital (as defined in the regulations) to average assets (as defined), and common equity Tier 1, Tier 1 and total capital (as

defined) to risk-weighted assets (as defined). Under Basel III rules, banks must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The required capital conservation buffer is 2.50% for 2022 and 2021.

As of June 30, 2022 and 2021, the Bank and Pioneer Commercial Bank met all capital adequacy requirements to which they were subject. Further, the most recent FDIC notification categorized the Bank and Pioneer Commercial Bank as well capitalized institutions under the prompt corrective action regulations. There have been no conditions or events since the notification that management believes have changed the Bank’s or Pioneer Commercial Bank’s capital classification.

The actual capital amounts and ratios for the Bank and Pioneer Commercial Bank, are presented in the following table (dollars in thousands):

													To be Well
									For Capital				Capitalized Under
					For Capital				Adequacy Purposes				Prompt
	Actual				Adequacy Purposes				with Capital Buffer				Corrective Action
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Pioneer Bank:
As of June 30, 2022
Tier 1 (leverage) capital	$	185,892	9.48	%	$	78,405	4.00	%		N/A	N/A		$	98,006	5.00	%
Risk-based capital
Common Tier 1	$	185,892	17.98	%	$	46,515	4.50	%	$	72,357	7.00	%	$	67,189	6.50	%
Tier 1	$	185,892	17.98	%	$	62,021	6.00	%	$	87,862	8.50	%	$	82,694	8.00	%
Total	$	198,932	19.25	%	$	82,694	8.00	%	$	108,536	10.50	%	$	103,368	10.00	%
As of June 30, 2021
Tier 1 (leverage) capital	$	177,269	10.00	%	$	70,894	4.00	%		N/A	N/A		$	88,617	5.00	%
Risk-based capital
Common Tier 1	$	177,269	16.82	%	$	47,422	4.50	%	$	73,768	7.00	%	$	68,499	6.50	%
Tier 1	$	177,269	16.82	%	$	63,230	6.00	%	$	89,576	8.50	%	$	84,307	8.00	%
Total	$	190,566	18.08	%	$	84,307	8.00	%	$	110,652	10.50	%	$	105,383	10.00	%

													To be Well
									For Capital				Capitalized Under
					For Capital				Adequacy Purposes				Prompt
	Actual				Adequacy Purposes				with Capital Buffer				Corrective Action
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Pioneer Commercial Bank:
As of June 30, 2022
Tier 1 (leverage) capital	$	39,264	7.65	%	$	20,532	4.00	%		N/A	N/A		$	25,665	5.00	%
Risk-based capital
Common Tier 1	$	39,264	40.43	%	$	4,370	4.50	%	$	6,797	7.00	%	$	6,312	6.50	%
Tier 1	$	39,264	40.43	%	$	5,826	6.00	%	$	8,254	8.50	%	$	7,768	8.00	%
Total	$	39,264	40.43	%	$	7,768	8.00	%	$	10,196	10.50	%	$	9,711	10.00	%
As of June 30, 2021
Tier 1 (leverage) capital	$	30,966	7.53	%	$	16,442	4.00	%		N/A	N/A		$	20,553	5.00	%
Risk-based capital
Common Tier 1	$	30,966	37.65	%	$	3,702	4.50	%	$	5,758	7.00	%	$	5,347	6.50	%
Tier 1	$	30,966	37.65	%	$	4,935	6.00	%	$	6,992	8.50	%	$	6,580	8.00	%
Total	$	30,966	37.65	%	$	6,580	8.00	%	$	8,637	10.50	%	$	8,226	10.00	%