Note 9 - Regulatory Capital

12 Months Ended

Dec. 31, 2021

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note 9: Regulatory Capital

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can result in regulatory action. The Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules) require the Company to maintain a capital conservation buffer of 2.5% above the adequately capitalized risk-based capital ratios to avoid restrictions on dividends and equity repurchases and other payments such as discretionary bonuses to executive officers. The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of December 31, 2021 and December 31, 2020, the Company and Bank met all capital adequacy requirements to which they are subject.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At year-end 2021 and 2020, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

The capital ratios for the Company and the Bank as of the dates indicated are presented in the table below. For Common Equity Tier 1 Capital, Tier 1 Capital and Total Capital, the required percentages for capital adequacy purposes include the 2.5% capital conservation buffer.

	At December 31, 2021					Required for Capital Adequacy Purposes					To Be Well-capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	($ in thousands)
Common Equity Tier 1 Capital
Company	$	653,026		14.93	%	$	306,277		7.00	%		N/A		N/A
Bank		540,538		12.48	%		303,111		7.00	%	$	281,460		6.50	%
Tier 1 Capital
Company		653,026		14.93	%		371,908		8.50	%		N/A		N/A
Bank		540,538		12.48	%		368,063		8.50	%		346,412		8.00	%
Total Capital
Company		676,749		15.47	%		459,416		10.50	%		N/A		N/A
Bank		570,260		13.17	%		454,666		10.50	%		433,016		10.00	%
Leverage Ratio (1)
Company		653,026		9.06	%		288,423		4.00	%		N/A		N/A
Bank		540,538		7.55	%		286,432		4.00	%		358,040		5.00	%

⁽¹⁾ The leverage ratio consists of Tier 1capital divided by the most recent quarterly average total assets, excluding certain intangible assets.

	At December 31, 2020					Required for Capital Adequacy Purposes					To Be Well-capitalized Under Prompt Corrective Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	($ in thousands)
Common Equity Tier 1 Capital
Company	$	604,833		16.04	%	$	263,903		7.00	%		N/A		N/A
Bank		484,270		13.00	%		260,755		7.00	%	$	242,130		6.50	%
Tier 1 Capital
Company		604,833		16.04	%		320,454		8.50	%		N/A		N/A
Bank		484,270		13.00	%		316,632		8.50	%		298,006		8.00	%
Total Capital
Company		628,797		16.68	%		395,855		10.50	%		N/A		N/A
Bank		514,234		13.80	%		391,133		10.50	%		372,508		10.00	%
Leverage Ratio (1)
Company		604,833		9.40	%		257,488		4.00	%		N/A		N/A
Bank		484,270		7.58	%		255,560		4.00	%		319,451		5.00	%

⁽¹⁾ The leverage ratio consists of Tier 1capital divided by the most recent quarterly average total assets, excluding certain intangible assets.