Regulatory Capital |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Regulatory Capital | |
| Regulatory Capital | 11. Regulatory Capital The Company qualifies as a small bank holding company under the Federal Reserve’s Small Bank Holding Company Policy Statement, which exempts bank holding companies with less than $3 billion in assets from reporting consolidated regulatory capital ratios and from minimum regulatory capital requirements. However, the Bank is subject to various capital requirements administered by the federal banking agencies. Under the Basel III capital adequacy rules and the regulatory framework for prompt corrective action, there are specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Such quantitative measures involve the maintenance of minimum amounts and ratios of common tier 1, tier 1, and total capital to risk-weighted assets and tier 1 capital to average assets. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by the federal regulators. In 2019, the federal banking agencies issued a final rule establishing the community bank leverage ratio (CBLR), which is an optional framework designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. The criteria to be considered a qualifying community banking organization includes a leverage ratio greater than 9%, less than $10 billion in average total assets, off-balance sheet exposures of 25% or less of total assets, and trading assets/liabilities of 5% or less of total assets. It should be noted that effective July 1, 2026, the federal banking agencies revised the CBLR framework to reduce the minimum leverage ratio to 8%. The Bank has elected to opt into the CBLR framework and had ratios of 9.46% and 9.32% as of June 30, 2026 and December 31, 2025, respectively. Therefore, the Bank is considered to have satisfied the risk-based and leverage capital requirements in the federal banking agencies’ capital rules. Additionally, the Bank is considered to have met the well-capitalized ratio requirements under the regulatory framework for prompt corrective action promulgated by the Federal Reserve. |