Regulatory Capital

12 Months Ended

Dec. 31, 2024

Regulatory Capital

Regulatory Capital

13.  Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by 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 capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors.

The minimum capital level requirements include: (i) a Tier 1 leverage ratio of 4% (ii) common equity Tier 1 capital ratio of 4.5%; (iii) a Tier 1 capital ratio of 6%; and (iv) a total capital ratio of 8% for all institutions. The Bank is also required to maintain a “capital conservation buffer” of 2.5% above the regulatory minimum capital ratios which results in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) a Tier 1 capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%. An institution will be subject to limitations on paying dividends, engaging in share repurchases, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations will establish a maximum percentage of eligible retained income that could be utilized for such actions.

The following table shows information regarding the Company’s and the Bank’s regulatory capital levels at December 31, 2024 and at December 31, 2023, as if the Company were subject to consolidated capital requirements. As of December 31, 2024, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, common equity Tier 1 risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notification that Management believes have changed the Bank’s category. Management believes that the Company and the Bank meet all capital adequacy requirements to which they are subject. Due to a Federal Reserve policy applicable to bank holding companies with less than $3 billion in consolidated assets, the Company is not subject to consolidated capital requirements:

		Actual			Required for Capital Adequacy Purposes				To be Well Capitalized Under Prompt Corrective Action Regulations *
		Amount	Ratio		Amount		Ratio		Amount		Ratio
		(Dollars in thousands)
As of December 31, 2024
Total risk-based capital (to risk-weighted assets)
Company Consolidated	$	332,700	15.62	%	$	170,364	8.00	%	$	212,955	10.00	%
Bank		324,763	15.37			169,013	8.00			211,266	10.00
Common equity tier 1 (to risk-weighted assets)
Company Consolidated		296,071	13.90			95,830	4.50			138,421	6.50
Bank		298,342	14.12			95,070	4.50			137,323	6.50
Tier 1 capital (to risk-weighted assets)
Company Consolidated		306,071	14.37			127,773	6.00			170,364	8.00
Bank		298,342	14.12			126,760	6.00			169,013	8.00
Tier 1 capital (to average total  assets)
Company Consolidated		306,071	12.22			100,150	4.00			125,187	5.00
Bank		298,342	11.95			99,844	4.00			124,806	5.00
As of December 31, 2023 (1)
Total risk-based capital (to risk-weighted assets)
Company Consolidated	$	298,293	14.43	%	$	165,370	8.00	%	$	206,712	10.00	%
Bank		287,206	14.02			163,911	8.00			204,889	10.00
Common equity tier 1 (to risk-weighted assets)
Company Consolidated		262,454	12.70			93,020	4.50			134,363	6.50
Bank		261,584	12.76			92,200	4.50			133,178	6.50
Tier 1 capital (to risk-weighted assets)
Company Consolidated		272,454	13.18			124,027	6.00			165,370	8.00
Bank		261,584	12.76			122,934	6.00			163,911	8.00
Tier 1 capital (to average total  assets)
Company Consolidated		272,454	11.14			97,800	4.00			122,250	5.00
Bank		261,584	10.74			97,355	4.00			121,693	5.00

*Prompt Corrective Action requirements only apply to the Bank

(1) The Bank elected to cease being subject to the CBLR effective December 31, 2023 and to report its capital ratios using standard regulatory measures.