The Bank is 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. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under U.S. GAAP, regulatory reporting requirements and regulatory capital standards. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, the Bank’s regulators could require adjustment to regulatory capital not reflected in these consolidated financial statements.

Quantitative measures established by regulatory reporting standards ensure capital adequacy require the 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), common equity Tier I capital (as defined) to total risk-weighted assets (as defined) and of Tier 1 capital (as defined) to average assets (as defined).

Management believes, as of June 30, 2025 and December 31, 2024, that the Bank meets all capital adequacy requirements to which it is subject. As of June 30, 2025, the most recent notification from regulatory agencies categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum capital ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed the Bank’s category.


									Minimum to Be Well
									Capitalized Under
									Prompt
					Minimum Capital				Corrective Action
	Actual				Requirement				Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of June 30, 2025:

Leverage ratio (to average assets)	$	32,426	15.6	%	$	8,324	4.0	%	$	10,406	5.0	%
Common Equity Tier 1 (to risk weighted assets)	$	32,426	31.2	%	$	4,680	4.5	%	$	6,760	6.5	%
Tier 1 Capital ratio (to risk weighted assets)	$	32,426	31.2	%	$	6,240	6.0	%	$	8,320	8.0	%
Total Capital (to risk-weighted assets)	$	33,256	32.0	%	$	8,320	8.0	%	$	10,401	10.0	%

As of December 31, 2024:

Leverage ratio (to average assets)	$	31,662	15.9	%	$	7,972	4.0	%	$	9,965	5.0	%
Common Equity Tier 1 (to risk weighted assets)	$	31,662	33.0	%	$	4,318	4.5	%	$	6,238	6.5	%
Tier 1 Capital ratio (to risk-weighted assets)	$	31,662	33.0	%	$	5,758	6.0	%	$	7,677	8.0	%
Total Capital (to risk-weighted assets)	$	32,379	33.7	%	$	7,677	8.0	%	$	9,596	10.0	%

The net unrealized gain or loss on available-for-sale securities, net of tax is not included in computing regulatory capital.