Note 20 - Regulatory Matters

9 Months Ended

Sep. 30, 2024

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

NOTE 20 Regulatory Matters

The Company and the Bank are subject to various regulatory capital requirements administered by the 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.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of common equity tier 1, tier 1, and total capital (as defined in the regulations) to risk weighted assets (as defined) and of tier 1 capital (as defined) to average assets (as defined). Management believes that, at September 30, 2024 and December 31, 2023, each of the Company and the Bank had met all of the capital adequacy requirements to which it was subject.

The following tables present the Company’s and the Bank’s actual capital amounts and ratios as of September 30, 2024 and December 31, 2023:

	September 30, 2024
											Minimum to be
						Minimum Required					Well Capitalized
						for Capital					Under Prompt
	Actual					Adequacy Purposes					Corrective Action (1)
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Common equity tier 1 capital to risk weighted assets
Consolidated (1)	$	394,381		11.12	%	$	159,542		4.50	%		N/A		N/A
Bank		379,074		10.73	%		158,974		4.50	%		229,629		6.50	%
Tier 1 capital to risk weighted assets												.
Consolidated (1)		403,422		11.38	%		212,722		6.00	%		N/A		N/A
Bank		379,074		10.73	%		211,966		6.00	%		282,621		8.00	%
Total capital to risk weighted assets
Consolidated (1)		497,768		14.04	%		283,629		8.00	%		N/A		N/A
Bank		423,265		11.98	%		282,621		8.00	%		353,276		10.00	%
Tier 1 capital to average assets
Consolidated (1)		403,422		9.30	%		173,498		4.00	%		N/A		N/A
Bank		379,074		8.90	%		170,336		4.00	%		212,920		5.00	%

(1) “Minimum to be Well Capitalized Under Prompt Corrective Action” is not formally defined under applicable banking regulations for bank holding companies.

	December 31, 2023
											Minimum to be
						Minimum Required					Well Capitalized
						for Capital					Under Prompt
	Actual					Adequacy Purposes					Corrective Action (1)
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Common equity tier 1 capital to risk weighted assets
Consolidated (1)	$	382,578		11.82	%	$	145,605		4.50	%	$	N/A		N/A
Bank		367,445		11.40	%		145,101		4.50	%		209,590		6.50	%
Tier 1 capital to risk weighted assets												.
Consolidated (1)		391,534		12.10	%		194,139		6.00	%		N/A		N/A
Bank		367,445		11.40	%		193,468		6.00	%		257,957		8.00	%
Total capital to risk weighted assets
Consolidated (1)		477,590		14.76	%		258,853		8.00	%		N/A		N/A
Bank		403,501		12.51	%		257,957		8.00	%		322,446		10.00	%
Tier 1 capital to average assets
Consolidated (1)		391,534		10.57	%		148,111		4.00	%		N/A		N/A
Bank		367,445		9.92	%		148,186		4.00	%		185,232		5.00	%

(1) “Minimum to be Well Capitalized Under Prompt Corrective Action” is not formally defined under applicable banking regulations for bank holding companies.

The Bank is subject to certain restrictions on the amount of dividends that it may pay without prior regulatory approval. The Company and the Bank are subject to the rules of the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act rules. The rules include a 2.5 percent capital conservation buffer that is added to the minimum requirements for capital adequacy purposes. A banking organization with a conservation buffer of less than the required amount will be subject to the limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. As of September 30, 2024, the capital ratios for the Company and the Bank were sufficient to meet the conservation buffer. In addition, the Company must adhere to various U.S. Department of Housing and Urban Development, or HUD, regulatory guidelines including required minimum capital and liquidity to maintain their Federal Housing Administration approval status. Failure to comply with the HUD guidelines could result in withdrawal of this certification. As of September 30, 2024 and December 31, 2023, the Company was in compliance with the aforementioned guidelines.