Equity and Regulatory Matters

6 Months Ended

Jun. 30, 2024

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Equity and Regulatory Matters

NOTE 13 – EQUITY AND REGULATORY MATTERS

PyraMax Bank is subject to various regulatory capital requirements administered by federal and state 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 consolidated 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 the Bank's 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 their components, risk weightings and other factors. The Company is exempt from consolidated capital requirements as those requirements do not apply to certain small bank holding companies with consolidated assets under $3 billion.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Common Equity Tier 1, Tier 1 and Total capital to risk-weighted assets, and of Tier 1 capital to average assets. It is management's opinion that the Bank met all applicable capital adequacy requirements as of June 30, 2024 and December 31, 2023.

As of June 30, 2024, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum regulatory capital ratios as set forth in the table below. There are no conditions or events since June 30, 2024 that management believes have changed the capital category of the Bank.

The Bank’s actual and required capital amounts and ratios are presented below:

	June 30, 2024
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
PyraMax Bank
Leverage (Tier 1)	$	62,979		11.2	%	$	22,591		4.0	%	$	28,239		5.0	%
Risk-based:
Common Equity Tier 1		62,979		14.7	%		19,332		4.5	%		27,924		6.5	%
Tier 1		62,979		14.7	%		25,776		6.0	%		34,368		8.0	%
Total		67,852		15.8	%		34,368		8.0	%		42,960		10.0	%

	December 31, 2023
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
PyraMax Bank
Leverage (Tier 1)	$	63,101		11.2	%	$	22,574		4.0	%	$	28,217		5.0	%
Risk-based:
Common Equity Tier 1		63,101		15.1	%		18,751		4.5	%		27,085		6.5	%
Tier 1		63,101		15.1	%		25,002		6.0	%		33,336		8.0	%
Total		67,710		16.2	%		33,336		8.0	%		41,670		10.0	%

On July 29, 2022, the Company adopted a stock repurchase program. On August 26, 2022, the Company received a non-objection letter from the Federal Reserve Bank of Chicago ("FRB") permitting the Company to repurchase 319,766 shares of its common stock, which represented 5% of the shares outstanding at the time. The Company began purchasing shares on September 1, 2022 and as of June 7, 2023, the Company had repurchased all 319,766 shares for a total purchase price of $3.4 million.

On April 28, 2023, the Company adopted a second stock repurchase program. On June 9, 2023, the Company received a non-objection letter from the FRB permitting the Company to repurchase 621,522 shares of its common stock, which represented 10% of the shares outstanding at the time. The Company began purchasing shares on June 15, 2023 and as of June 30, 2024, the Company had repurchased 207,433 shares for a total purchase price of $1.5 million.