Regulatory matters

3 Months Ended

Mar. 31, 2026

14. Regulatory matters

The Company’s ability to pay dividends to its shareholders is largely dependent on The Bank’s ability to pay dividends to the Company. Regulations with respect to the banking industry limit the amount of dividends that may be paid without prior approval of The Bank’s regulatory agency.

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 adverse effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and The Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and The Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Management believes, as of March 31, 2026 and December 31, 2025, that the Company and The Bank met all applicable capital adequacy requirements.

Current quantitative measures established by regulation to ensure capital adequacy require The Bank to maintain minimum amounts and ratios (set forth in the tables below) of Total capital, Tier 1 capital, and Tier 1 common equity (as defined in the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as defined) to average assets (as defined). The following tables present summary information regarding the Company’s and Bank’s risk-based capital and related ratios at March 31, 2026 and December 31, 2025:


	March 31, 2026
									Minimum to be Well
									Capitalized under
					Minimum For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Provisions
(Dollars in thousands, except percents)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Common equity Tier 1 capital to risk-weighted assets:
Company	$	450,966	10.96	%	$	185,296	4.50	%		NA	NA
Bank		532,086	12.95			184,882	4.50		$	267,051	6.50	%
Tier 1 capital to risk-weighted assets:
Company		460,966	11.20			247,062	6.00			NA	NA
Bank		532,086	12.95			246,509	6.00			328,679	8.00
Total capital to risk-weighted assets:
Company		582,785	14.16			329,416	8.00			NA	NA
Bank		570,616	13.89			328,679	8.00			410,848	10.00
Tier 1 capital to average assets:
Company		460,966	9.03			204,234	4.00			NA	NA
Bank		532,086	10.42			204,233	4.00			255,292	5.00
NA = not applicable


	December 31, 2025
									Minimum to be Well
									Capitalized under
					Minimum For Capital				Prompt Corrective
	Actual				Adequacy Purposes				Action Provisions
(Dollars in thousands, except percents)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Common equity Tier 1 capital to risk-weighted assets:
Company	$	440,852	11.03	%	$	179,784	4.50	%		NA	NA
Bank		520,587	13.06			179,427	4.50		$	259,172	6.50	%
Tier 1 capital to risk-weighted assets:
Company		450,852	11.28			239,712	6.00			NA	NA
Bank		520,587	13.06			239,236	6.00			318,981	8.00
Total capital to risk-weighted assets:
Company		571,887	14.31			319,617	8.00			NA	NA
Bank		558,435	14.01			318,981	8.00			398,726	10.00
Tier 1 capital to average assets:
Company		450,852	8.84			204,039	4.00			NA	NA
Bank		520,587	10.22			203,726	4.00			254,658	5.00
NA = not applicable

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

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