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REGULATORY CAPITAL

12 Months Ended

Dec. 31, 2024

NOTE 16 — REGULATORY CAPITAL

The Company and Bank are subject to various regulatory capital requirements administered by the Federal banking agencies. At December 31, 2024 and 2023, the Company and the Bank met all applicable regulatory capital requirements to be considered “well capitalized” under regulatory guidelines. The Company and Bank manage their capital to comply with their internal planning targets and regulatory capital standards administered by federal banking agencies. The Company and Bank review capital levels on a monthly basis.

The Company and the Bank are subject to the Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel III rules). The minimum required capital conservation buffer was 2.5% at December 31, 2024 and December 31, 2023. As of December 31, 2024 and 2023, the capital conservation buffer for the Company was 5.3% and 4.8%, respectively. As of December 31, 2024 and 2023, the capital conservation buffer for the Bank was 5.0% and 4.5%, respectively. The net unrealized gain or loss on AFS securities is not included in the computation of the regulatory capital. The Company and the Bank meet all capital adequacy requirements, to which they are subject, as of December 31, 2024 and 2023.

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 December 31, 2024 and 2023, the most recent regulatory notifications categorized the Bank and the Company 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 category.

The following is a summary of actual capital amounts and ratios for the Company and the Bank compared to the requirements for minimum capital adequacy and classification as well capitalized. Actual and required capital amounts and ratios are presented below at year end (dollars in thousands):


					For				To be Well				Minimum
					Capital				Capitalized under				Capital
					Adequacy				Prompt Corrective				Conservation
	Actual				Purposes				Action Regulations				Buffer
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Ratio
At December 31, 2024
The Company
Tier 1 leverage ratio (Tier 1 capital to average assets)	$	793,847	10.8	%	$	294,141	4.0	%	$	N/A	N/A		—	%
Tier 1 common equity (to risk-weighted assets)	$	773,227	11.9	%	$	291,450	4.5	%	$	N/A	N/A		2.5	%
Tier 1 capital (to risk-weighted assets)	$	793,847	12.3	%	$	388,600	6.0	%	$	N/A	N/A		2.5	%
Total capital (to risk-weighted assets)	$	859,129	13.3	%	$	518,134	8.0	%	$	N/A	N/A		2.5	%
The Bank
Tier 1 leverage ratio (Tier 1 capital to average assets)	$	775,106	10.6	%	$	293,513	4.0	%	$	366,892	5.0	%	—	%
Tier 1 common equity (to risk-weighted assets)	$	775,106	12.0	%	$	291,421	4.5	%	$	420,942	6.5	%	2.5	%
Tier 1 capital (to risk-weighted assets)	$	775,106	12.0	%	$	388,562	6.0	%	$	518,082	8.0	%	2.5	%
Total capital (to risk-weighted assets)	$	840,387	13.0	%	$	518,082	8.0	%	$	647,603	10.0	%	2.5	%

At December 31, 2023
The Company
Tier 1 leverage ratio (Tier 1 capital to average assets)	$	722,844	10.6	%	$	274,064	4.0	%	$	N/A	N/A		—	%
Tier 1 common equity (to risk-weighted assets)	$	702,224	11.5	%	$	274,867	4.5	%	$	N/A	N/A		2.5	%
Tier 1 capital (to risk-weighted assets)	$	722,844	11.8	%	$	366,490	6.0	%	$	N/A	N/A		2.5	%
Total capital (to risk-weighted assets)	$	781,991	12.8	%	$	488,653	8.0	%	$	N/A	N/A		2.5	%
The Bank
Tier 1 leverage ratio (Tier 1 capital to average assets)	$	703,823	10.3	%	$	274,055	4.0	%	$	342,569	5.0	%	—	%
Tier 1 common equity (to risk-weighted assets)	$	703,823	11.5	%	$	274,838	4.5	%	$	396,989	6.5	%	2.5	%
Tier 1 capital (to risk-weighted assets)	$	703,823	11.5	%	$	366,451	6.0	%	$	488,601	8.0	%	2.5	%
Total capital (to risk-weighted assets)	$	762,969	12.5	%	$	488,601	8.0	%	$	610,752	10.0	%	2.5	%

- 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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