REGULATORY CAPITAL

6 Months Ended

Dec. 31, 2024

REGULATORY CAPITAL

REGULATORY CAPITAL

16.     REGULATORY CAPITAL

The Bank is 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 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 2024 and 2023.

As of December 31, 2024, the Bank met all capital adequacy requirements which it was subject to. Further, the most recent OCC and FDIC notifications categorized the Bank as a well capitalized institution under the prompt corrective action regulations. There have been no conditions or events since the notification that management believes have changed the Bank’s capital classification. As of June 30, 2024 and 2023, the Bank and Pioneer Commercial Bank met all capital adequacy requirements to which they were subject.

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, National Association:
As of December 31, 2024
Tier 1 (leverage) capital	$	231,140	12.07	%	$	76,623	4.00	%		N/A	N/A		$	95,779	5.00	%
Risk-based capital
Common Tier 1	$	231,140	17.99	%	$	57,833	4.50	%	$	89,962	7.00	%	$	83,536	6.50	%
Tier 1	$	231,140	17.99	%	$	77,110	6.00	%	$	109,240	8.50	%	$	102,814	8.00	%
Total	$	247,305	19.24	%	$	102,814	8.00	%	$	134,943	10.50	%	$	128,517	10.00	%
As of June 30, 2024
Tier 1 (leverage) capital	$	221,549	11.65	%	$	76,051	4.00	%		N/A	N/A		$	95,064	5.00	%
Risk-based capital
Common Tier 1	$	221,549	18.40	%	$	54,171	4.50	%	$	84,265	7.00	%	$	78,246	6.50	%
Tier 1	$	221,549	18.40	%	$	72,227	6.00	%	$	102,322	8.50	%	$	96,303	8.00	%
Total	$	236,706	19.66	%	$	96,303	8.00	%	$	126,398	10.50	%	$	120,379	10.00	%
As of June 30, 2023
Tier 1 (leverage) capital	$	208,576	11.47	%	$	72,733	4.00	%		N/A	N/A		$	90,916	5.00	%
Risk-based capital
Common Tier 1	$	208,576	18.85	%	$	49,795	4.50	%	$	77,459	7.00	%	$	71,926	6.50	%
Tier 1	$	208,576	18.85	%	$	66,393	6.00	%	$	94,057	8.50	%	$	88,524	8.00	%
Total	$	222,513	20.11	%	$	88,524	8.00	%	$	116,188	10.50	%	$	110,655	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, 2024
Tier 1 (leverage) capital	$	52,658	9.56	%	$	22,039	4.00	%		N/A	N/A		$	27,549	5.00	%
Risk-based capital
Common Tier 1	$	52,658	56.09	%	$	4,224	4.50	%	$	6,571	7.00	%	$	6,102	6.50	%
Tier 1	$	52,658	56.09	%	$	5,633	6.00	%	$	7,979	8.50	%	$	7,510	8.00	%
Total	$	52,658	56.09	%	$	7,510	8.00	%	$	9,857	10.50	%	$	9,388	10.00	%
As of June 30, 2023
Tier 1 (leverage) capital	$	46,284	9.39	%	$	19,709	4.00	%		N/A	N/A		$	24,636	5.00	%
Risk-based capital
Common Tier 1	$	46,284	54.81	%	$	3,800	4.50	%	$	5,911	7.00	%	$	5,489	6.50	%
Tier 1	$	46,284	54.81	%	$	5,067	6.00	%	$	7,178	8.50	%	$	6,756	8.00	%
Total	$	46,284	54.81	%	$	6,756	8.00	%	$	8,867	10.50	%	$	8,444	10.00	%