Note 20 - Regulatory Requirements and Restrictions

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note 20. Regulatory Requirements and Restrictions 

The Company and the Bank are subject to various regulatory capital requirements administered by state and federal 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 the capital adequacy guidelines and the regulatory framework for prompt corrective action, which applies only to the Bank, the Bank must meet specific capital guidelines that involve quantitative measures of the entity’s balance sheet assets and 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. In addition, the Company and the Bank are subject to various regulatory restrictions related to the payment of dividends, including requirements to maintain capital at or above regulatory minimums.

The current risk-based capital requirements, based on the international capital standards known as Basel III, requires the Company and the Bank to maintain minimum amounts and ratios of Common Equity Tier 1 capital, Tier 1 capital, and total capital to risk-weighted assets, and of Tier 1 capital to average consolidated assets (“Tier 1 leverage ratio”), as defined in the regulations.  Basel III’s capital conservation buffer (“CCB”), which is intended to absorb losses during periods of economic stress, increased those minimum ratios by 2.5% on January 1, 2019).

The following tables present actual and required capital ratios, under Basel III capital rules, as of the dates indicated:

	December 31, 2022
	Actual					Minimum Basel III Requirement					Minimum Basel III Requirement - with CCB					Well Capitalized Requirement(1)
(Amounts in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
The Company
Common equity Tier 1 ratio	$	303,963		13.37	%	$	102,332		4.50	%	$	159,183		7.00	%		N/A		N/A
Tier 1 risk-based capital ratio		303,963		13.37	%		136,443		6.00	%		193,294		8.50	%		N/A		N/A
Total risk-based capital ratio		332,430		14.62	%		181,924		8.00	%		238,775		10.50	%		N/A		N/A
Tier 1 Leverage ratio		303,963		10.17	%		119,499		4.00	%		N/A		N/A			N/A		N/A
The Bank
Common equity Tier 1 ratio	$	264,185		11.69	%	$	101,712		4.50	%	$	158,218		7.00	%	$	146,917		6.50	%
Tier 1 risk-based capital ratio		264,185		11.69	%		135,616		6.00	%		192,122		8.50	%		180,821		8.00	%
Total risk-based capital ratio		292,481		12.94	%		180,821		8.00	%		237,327		10.50	%		226,026		10.00	%
Tier 1 Leverage ratio		264,185		8.79	%		120,248		4.00	%		N/A		N/A			150,310		5.00	%

(1) Based on prompt corrective action provisions

	December 31, 2021
	Actual					Minimum Basel III Requirement					Minimum Basel III Requirement - with CCB					Well Capitalized Requirement(1)
(Amounts in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
The Company
Common equity Tier 1 ratio	$	294,207		14.39	%	$	91,983		4.50	%	$	143,084		7.00	%		N/A		N/A
Tier 1 risk-based capital ratio		294,207		14.39	%		122,644		6.00	%		173,745		8.50	%		N/A		N/A
Total risk-based capital ratio		319,795		15.65	%		163,525		8.00	%		214,626		10.50	%		N/A		N/A
Tier 1 Leverage ratio		294,207		9.65	%		121,892		4.00	%		N/A		N/A			N/A		N/A
The Bank
Common equity Tier 1 ratio	$	271,806		13.37	%	$	91,499		4.50	%	$	142,332		7.00	%	$	132,166		6.50	%
Tier 1 risk-based capital ratio		271,806		13.37	%		121,999		6.00	%		172,832		8.50	%		162,666		8.00	%
Total risk-based capital ratio		297,261		14.62	%		162,666		8.00	%		213,499		10.50	%		203,332		10.00	%
Tier 1 Leverage ratio		271,806		8.94	%		121,623		4.00	%		N/A		N/A			152,028		5.00	%

(1) Based on prompt corrective action provisions