CAPITAL REQUIREMENTS AND OTHER REGULATORY MATTERS

6 Months Ended

Jun. 30, 2022

CAPITAL REQUIREMENTS AND OTHER REGULATORY MATTERS

CAPITAL REQUIREMENTS AND OTHER REGULATORY MATTERS

NOTE 7. CAPITAL REQUIREMENTS AND OTHER REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the Office of the Comptroller of the Currency (“OCC”). Failure to meet minimum regulatory capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements of the Company and the Bank. Under the regulatory 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 Bank’s capital amounts and classification under the prompt corrective action guidelines 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 risk-based capital, Tier 1 Capital to risk-weighted assets, and Tier 1 Capital to adjusted total assets. As of June 30, 2022 and December 31, 2021, the Bank met all of the capital adequacy requirements to which it is subject.

At June 30, 2022 and December 31, 2021, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the most recent notification that management believes have changed the Bank’s prompt corrective action category. The following table presents actual and required capital ratios for the Bank.

	Actual				To be Well Capitalized under the Prompt Corrective Action Provision
(Dollars in thousands)	Amount		Ratio		Amount		Ratio
As of June 30, 2022
Common Equity Tier 1 Capital	$	77,779	58.51	%	$	8,641	>6.5	%
Tier 1 Risk-Based Capital		77,779	58.51			10,635	>8.0
Total Risk-Based Capital		79,445	59.76			13,293	>10.0
Tier 1 Leverage Capital		77,779	28.43			13,681	>5.0
As of December 31, 2021
Common Equity Tier 1 Capital	$	77,819	63.51	%	$	7,965	>6.5	%
Tier 1 Risk-Based Capital		77,819	63.51			9,803	>8.0
Total Risk-Based Capital		79,360	64.77			12,253	>10.0
Tier 1 Leverage Capital		77,819	27.38			14,210	>5.0