v3.25.2
REGULATORY MATTERS
 6 Months Ended
Jun. 30, 2025
Banking And Thrift Disclsoure [Abstract]  
REGULATORY MATTERS REGULATORY MATTERS
Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet capital requirements can initiate regulatory action. Management believes that the Bank met all capital adequacy requirements to which it was subject at June 30, 2025 and December 31, 2024.
Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At June 30, 2025 and December 31, 2024, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s classification.
In February 2019, the federal bank regulatory agencies issued a final rule that revised certain capital regulations under ASU 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, and included a transition option that allows banking organizations to phase in, over a three year period, the day one adverse effects of adoption on their regulatory capital ratios (three year transition option). In connection with the adoption of ASC 326 on January 1, 2023, the Company recognized an after-tax cumulative effect reduction to retained earnings. The Company elected to adopt the three year transition option and the deferral has been applied in capital ratios presented below. Actual and required capital amounts and ratios for the Bank are presented below at June 30, 2025:
Actual
Required for Capital
Adequacy Purposes
To be Well
Capitalized Under
Prompt Corrective
Action Regulations
AmountRatioAmount
Ratio
AmountRatio
Total Capital
(to Risk Weighted Assets)
$120,052 11.23%$85,513 8.00%$106,891 10.00%
Tier 1 Capital
(to Risk Weighted Assets)
$106,646 9.98%$64,135 6.00%$85,513 8.00%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)
$106,646 9.98%$48,101 4.50%$69,479 6.50%
Tier 1 Capital
(to Average Assets)
$106,646 8.11%$52,582 4.00%$65,728 5.00%
Actual and required capital amounts and ratios for the Bank are presented below at December 31, 2024:
Actual
Required for Capital
Adequacy Purposes
To be Well
Capitalized Under
Prompt Corrective
Action Regulations
AmountRatioAmountRatioAmountRatio
Total Capital
(to Risk Weighted Assets)
$124,420 12.14%$81,985 8.00%$102,482 10.00%
Tier 1 Capital
(to Risk Weighted Assets)
$111,586 10.89%$61,489 6.00%$81,985 8.00%
Common Equity Tier 1 Capital
(to Risk Weighted Assets)
$111,586 10.89%$46,117 4.50%$66,613 6.50%
Tier 1 Capital
(to Average Assets)
$111,586 8.82%$50,579 4.00%$63,224 5.00%
Dividend Restrictions
Banking regulations limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the net profits of the Bank for that year combined with the retained net profits for the preceding two years.