v3.26.1
Note 12 - Regulatory Capital
 6 Months Ended
Jun. 30, 2026
Notes to Financial Statements  
Regulatory Capital Requirements under Banking Regulations [Text Block]

NOTE 12 – REGULATORY CAPITAL

 

The Bank is subject to various regulatory capital requirements administered by the Federal Reserve and the FDIC. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a material effect on the Company’s consolidated financial statements. Under capital adequacy guidelines of the regulatory framework for prompt corrective action, the Bank must meet specific capital adequacy guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank’s capital classification is also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

 

Under capital adequacy guidelines of the regulatory framework for prompt corrective action, quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the table below) of Tier 1 capital (as defined in the regulations) to total average assets (as defined in the regulations), and minimum ratios of Tier 1 total capital (as defined in the regulations) and common equity Tier 1 (“CET1”) capital to risk-weighted assets (as defined).

 

The Bank must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage, and CET1 capital ratios as set forth in the table below to be categorized as “well capitalized”. At  June 30, 2026, the Bank was categorized as “well capitalized” under applicable regulatory requirements. There were no conditions or events since that date that management believes have changed the Bank’s category. Management believes, at  June 30, 2026, that the Bank met all capital adequacy requirements.

 

The following tables compare the Bank’s actual capital amounts and ratios to their minimum regulatory capital requirements and well capitalized regulatory capital at the dates indicated:

 

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

To be Well Capitalized

 

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

For Capital

 

 

Under Prompt

 

 

 

 

 

​

 

 

 

​

 

For Capital

 

 

Adequacy With

 

 

Corrective

 

 

 

Actual

 

 

Adequacy Purposes

 

 

Capital Buffer

 

 

Action Provisions

 

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

 

Amount

 

 

Ratio

 

At June 30, 2026

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Total risk-based capital (to risk-weighted assets)

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Consolidated

 

$

393,122

 

 

 

13.87

%

 

$

226,733

 

 

 

8.00

%

 

$

297,587

 

 

 

10.50

%

 

 

N/A

 

 

 

N/A

 

Bank Only

 

 

397,094

 

 

 

14.01

%

 

 

226,733

 

 

 

8.00

%

 

 

297,587

 

 

 

10.50

%

 

 

283,416

 

 

 

10.00

%

Tier 1 risk-based capital (to risk-weighted assets)

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Consolidated

 

 

319,951

 

 

 

11.29

%

 

 

170,050

 

 

 

6.00

%

 

$

240,904

 

 

 

8.50

%

 

 

N/A

 

 

 

N/A

 

Bank Only

 

 

363,923

 

 

 

12.84

%

 

 

170,050

 

 

 

6.00

%

 

 

240,904

 

 

 

8.50

%

 

 

226,733

 

 

 

8.00

%

Tier 1 leverage capital (to average assets)

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Consolidated

 

 

319,951

 

 

 

10.05

%

 

 

127,364

 

 

 

4.00

%

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

Bank Only

 

 

363,923

 

 

 

11.43

%

 

 

127,364

 

 

 

4.00

%

 

 

N/A

 

 

 

N/A

 

 

 

159,205

 

 

 

5.00

%

CET1 capital (to risk-weighted assets)

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Consolidated

 

 

319,951

 

 

 

11.29

%

 

 

127,537

 

 

 

4.50

%

 

$

198,391

 

 

 

7.00

%

 

 

N/A

 

 

 

N/A

 

Bank Only

 

 

363,923

 

 

 

12.84

%

 

 

127,537

 

 

 

4.50

%

 

 

198,391

 

 

 

7.00

%

 

 

184,220

 

 

 

6.50

%

 

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

At December 31, 2025

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Total risk-based capital (to risk-weighted assets)

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Consolidated

 

$

393,396

 

 

 

14.25

%

 

$

220,788

 

 

 

8.00

%

 

$

289,785

 

 

 

10.50

%

 

 

N/A

 

 

 

N/A

 

Bank Only

 

 

385,215

 

 

 

13.96

%

 

 

220,788

 

 

 

8.00

%

 

 

289,785

 

 

 

10.50

%

 

 

275,986

 

 

 

10.00

%

Tier 1 risk-based capital (to risk-weighted assets)

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Consolidated

 

 

309,413

 

 

 

11.21

%

 

 

165,591

 

 

 

6.00

%

 

 

234,588

 

 

 

8.50

%

 

 

N/A

 

 

 

N/A

 

Bank Only

 

 

351,232

 

 

 

12.73

%

 

 

165,591

 

 

 

6.00

%

 

 

234,588

 

 

 

8.50

%

 

 

220,788

 

 

 

8.00

%

Tier 1 leverage capital (to average assets)

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Consolidated

 

 

309,413

 

 

 

9.66

%

 

 

128,160

 

 

 

4.00

%

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

 

 

N/A

 

Bank Only

 

 

351,232

 

 

 

10.96

%

 

 

128,160

 

 

 

4.00

%

 

 

N/A

 

 

 

N/A

 

 

 

160,200

 

 

 

5.00

%

CET1 capital (to risk-weighted assets)

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

 

 

 

​

Consolidated

 

 

309,413

 

 

 

11.21

%

 

 

124,194

 

 

 

4.50

%

 

 

193,190

 

 

 

7.00

%

 

 

N/A

 

 

 

N/A

 

Bank Only

 

 

351,232

 

 

 

12.73

%

 

 

124,194

 

 

 

4.50

%

 

 

193,190

 

 

 

7.00

%

 

 

179,391

 

 

 

6.50

%

 

In addition to the minimum CET1, Tier 1, total capital and leverage ratios, the Bank is required to maintain a capital conservation buffer consisting of additional CET1 capital equal to at least 2.5% of risk-weighted assets above the required minimum capital levels.  Failure to maintain the required buffer could result in limitations on the Bank's ability to pay dividends, repurchase shares, and pay discretionary bonuses, based on specified percentages of eligible retained income.  At  June 30, 2026, the Bank’s capital exceeded the conservation buffer.

 

As a bank holding company registered with the Federal Reserve, the Company is subject to the capital adequacy requirements of the Federal Reserve. Bank holding companies with $3.0 billion or more in assets must comply with the Federal Reserve’s capital regulations, which are generally the same as the capital regulations applicable to the Bank. The Federal Reserve has a policy requiring a bank holding company to serve as a source of financial and managerial strength to the holding company’s subsidiary bank and the Federal Reserve expects the holding company’s subsidiary bank to be well capitalized under the prompt corrective action regulations.