Regulatory Matters

12 Months Ended

Dec. 31, 2024

Regulatory Matters

Regulatory Matters

Note 10. Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the OCC. Failure to meet the minimum regulatory capital requirements can initiate certain mandatory, and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications 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 (set forth in the table below) of common equity Tier I capital, Tier I capital and total capital to risk-weighted assets and Tier I capital to average assets. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel Ill rules) became fully effective for the Company on January 1, 2019. Management believes, as of December 31, 2024 and 2023, that the Bank meets all capital adequacy requirements to which it is subject.

As of December 31, 2024 and 2023, the most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total ratios as disclosed in the table below. There are no conditions or events since the notification that management believes have changed the Bank’s prompt corrective action category.

The Bank’s regulatory capital amounts and ratios as of December 31, 2024 and 2023 are also presented in the table below (dollar amounts in thousands):

									Required to Be Well-
					Required for				Capitalized Under
					Capital Adequacy				Prompt Corrective
	Actual				Purposes				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2024
Tier 1 Capital to Average Assets	$	110,739	20.77	%	$	21,322	4.00	%	$	26,653	5.00	%
Common Equity Tier 1 Capital to Risk-Weighted Assets		110,739	43.22			11,529	4.50			16,654	6.50
Tier 1 Capital to Risk-Weighted Assets		110,739	43.22			15,373	6.00			20,497	8.00
Total Capital to Risk-Weighted Assets		112,453	43.89			20,497	8.00			25,621	10.00
December 31, 2023
Tier 1 Capital to Average Assets	$	84,771	17.41	%	$	19,476	4.00	%	$	24,345	5.00	%
Common Equity Tier 1 Capital to Risk-Weighted Assets		84,771	34.15			11,170	4.50			16,135	6.50
Tier 1 Capital to Risk-Weighted Assets		84,771	34.15			14,894	6.00			19,859	8.00
Total Capital to Risk-Weighted Assets		87,698	35.33			19,858	8.00			24,823	10.00