REGULATORY MATTERS

12 Months Ended

Dec. 31, 2024

Banking and Thrift, Other Disclosure [Abstract]

REGULATORY MATTERS

REGULATORY MATTERS

On January 15, 2022, The First, A National Banking Association, a subsidiary of the Company, converted from a national banking association to a Mississippi state-chartered bank and changed its name to The First Bank. The First Bank is a member of the Federal Reserve System through the Federal Reserve Bank of Atlanta.

The Company and its subsidiary bank are subject to 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 financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and its subsidiary 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. Capital amounts and classifications are also subject to qualitative judgment by regulators about components, risk weightings, and other related factors.

To ensure capital adequacy, quantitative measures have been established by regulators, and these require the Company and its subsidiary bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined) to risk-weighted assets (as defined), Tier 1 capital to adjusted total assets (leverage) and common equity Tier 1.

Management believes, as of December 31, 2024, that the Company met all capital adequacy requirements to which they are subject. Under Basel III requirements, a financial institution is considered to be well-capitalized if it has a total risk-based capital ratio of 10% or more, has a Tier 1 risk-based capital ratio of 8% or more, has a common equity Tier 1 of 6.5%, and has a Tier 1 leverage capital ratio of 5% or more.

The actual capital amounts and ratios, excluding unrealized losses, at December 31, 2024 and 2023 are presented in the following table. No amount was deducted from capital for interest-rate risk exposure.

($ in thousands)
December 31, 2024	Company (Consolidated)				Subsidiary The First
	Amount		Ratio		Amount		Ratio
Total risk-based	$	960,381	15.6	%	$	946,568	15.4	%
Common equity Tier 1	781,326		12.7	%	890,438		14.5	%
Tier 1 risk-based	805,633		13.1	%	890,438		14.5	%
Tier 1 leverage	805,633		10.5	%	890,438		11.6	%
December 31, 2023	Amount		Ratio		Amount		Ratio
Total risk-based	$	892,310	15.0	%	$	875,071	14.8	%
Common equity Tier 1	715,858		12.1	%	821,246		13.8	%
Tier 1 risk-based	740,113		12.5	%	821,246		13.8	%
Tier 1 leverage	740,113		9.7	%	821,246		10.7	%

The minimum amounts of capital and ratios, not including Accumulated Other Comprehensive Income, as established by banking regulators at December 31, 2024, and 2023, were as follows:

($ in thousands)
December 31, 2024	Company (Consolidated)				Subsidiary The First
	Amount		Ratio		Amount		Ratio
Total risk-based	$	493,306	8.0	%	$	492,551	8.0	%
Common equity Tier 1	277,485		4.5	%	277,060		4.5	%
Tier 1 risk-based	369,979		6.0	%	369,413		6.0	%
Tier 1 leverage	246,653		4.0	%	246,276		4.0	%

December 31, 2023	Amount		Ratio		Amount		Ratio
Total risk-based	$	475,183	8.0	%	$	474,679	8.0	%
Common equity Tier 1	267,291		4.5	%	267,007		4.5	%
Tier 1 risk-based	356,387		6.0	%	356,009		6.0	%
Tier 1 leverage	237,592		4.0	%	237,339		4.0	%

The principal sources of funds to the Company to pay dividends are the dividends received from the Bank. Consequently, dividends are dependent upon The First’s earnings, capital needs, regulatory policies, as well as statutory and regulatory limitations. Federal Reserve regulations limit dividends, stock repurchases and discretionary bonuses to executive officers if the Company’s regulatory capital is below the level of regulatory minimums plus the applicable capital conservation buffer. Federal and state banking laws and regulations restrict the amount of dividends and loans a bank may make to its parent company. Approval by the Company’s regulators is required if the total of all dividends declared in any calendar year exceed the total of its net income for that year combined with its retained net income of the preceding two years. In 2024, the Bank had available $125.3 million to pay dividends.