Regulatory Matters

6 Months Ended

Jun. 30, 2024

Regulatory Matters

Regulatory Matters

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 June 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 June 30, 2024 and December 31, 2023:

	June 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)	$	391,268	11.66	%	$	150,986	4.50	%	$	N/A	N/A
Bank		375,208	11.23	%		150,305	4.50	%		217,108	6.50	%
Tier 1 capital to risk weighted assets										.
Consolidated (1)		400,281	11.93	%		201,315	6.00	%		N/A	N/A
Bank		375,208	11.23	%		200,407	6.00	%		267,209	8.00	%
Total capital to risk weighted assets
Consolidated (1)		492,264	14.67	%		268,420	8.00	%		N/A	N/A
Bank		417,004	12.48	%		267,209	8.00	%		334,012	10.00	%
Tier 1 capital to average assets
Consolidated (1)		400,281	9.44	%		169,612	4.00	%		N/A	N/A
Bank		375,208	9.05	%		165,909	4.00	%		207,386	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 June 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 June 30, 2024 and December 31, 2023, the Company was in compliance with the aforementioned guidelines.