Note 11 - Regulatory Restrictions

6 Months Ended

Jun. 30, 2024

Regulated Operations [Abstract]

Regulatory Restrictions

11. REGULATORY RESTRICTIONS

Dividends payable by QNB and the Bank are subject to various limitations imposed by statutes, regulations and policies adopted by bank regulatory agencies. Under Federal and Pennsylvania banking law, the Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval. Under Federal Reserve regulations, the Bank is limited as to the amount it may lend affiliates, including QNB, unless such loans are collateralized by specific obligations.

Both QNB and the Bank are subject to regulatory capital requirements administered by Federal banking agencies. Failure to meet minimum capital requirements can initiate actions by regulators that could have an effect on the financial statements. Under the

framework for prompt corrective action, the Bank must meet capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items. The capital amounts and classification are also subject to qualitative judgments by the regulators. Management believes, as of June 30, 2024, that QNB and the Bank met capital adequacy requirements to which they were subject.

As of the most recent notification, the primary regulator of the Bank considered it to be “well capitalized” under the regulatory framework. There are no conditions or events since that notification that management believes have changed the classification. To be categorized as well capitalized, bank holding companies and insured depository institutions must maintain minimum ratios as set forth in the following table below.

The Company and the Bank’s actual capital amounts and ratios are presented as follows:

	Capital levels
	Actual					Adequately capitalized					Well capitalized
June 30, 2024	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (to risk-weighted assets):
The Company	$	170,668		12.60	%	$	108,377		8.00	%	$	135,471		10.00	%
Bank		156,749		11.73			106,899	8.00				133,624	10.00
Tier 1 capital (to risk-weighted assets):
The Company	$	161,715		11.94			81,283	6.00				81,283	6.00
Bank		147,796		11.06			80,174	6.00				106,899	8.00
Common equity tier 1 capital (to risk-weighted    assets):
The Company		161,715		11.94			60,962	4.50			N/A		N/A
Bank		147,796		11.06			60,131	4.50				86,855	6.50
Tier 1 capital (to average assets):
The Company		161,715		8.99			71,921	4.00			N/A		N/A
Bank		147,796		8.28			71,361	4.00				89,201	5.00

	Capital levels
	Actual					Adequately capitalized					Well capitalized
As of December 31, 2023	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (to risk-weighted assets):
The Company	$	167,711		13.09	%		102,513		8.00	%		128,142		10.00	%
Bank		154,062		12.20			101,032	8.00				126,290	10.00
Tier 1 capital (to risk-weighted assets):
The Company		158,753		12.39			76,885	6.00				76,885	6.00
Bank		145,104		11.49			75,774	6.00				101,032	8.00
Common equity tier 1 capital (to risk-weighted    assets):
The Company		158,753		12.39			57,664	4.50			N/A		N/A
Bank		145,104		11.49			56,830	4.50				82,088	6.50
Tier 1 capital (to average assets):
The Company		158,753		8.92			71,185	4.00			N/A		N/A
Bank		145,104		8.18			70,961	4.00				88,701	5.00