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Note 15 - Regulatory Capital Matters

3 Months Ended

Mar. 31, 2025

Regulatory Capital Requirements under Banking Regulations [Text Block]

Regulatory Capital Matters:

Banks and bank holding companies are subject to various regulatory capital requirements administered by the 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 by regulators that, if undertaken, could have a direct material effect on the financial statements. Management believes that as of March 31, 2025, the Company and the Bank meet all capital adequacy requirements to which they are subject.

The FDIC and other federal banking regulators revised the risk-based capital requirements applicable to financial holding companies and insured depository institutions, including the Company and the Bank, to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision (“Basel III”).

The common equity tier 1 capital, tier 1 capital and total capital ratios are calculated by dividing the respective capital amounts by risk-weighted assets. The leverage ratio is calculated by dividing tier 1 capital by adjusted average total assets.

Basel III limits capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” consisting of 2.5% of common equity tier 1 capital, tier 1 capital and total capital to risk-weighted assets in addition to the amount necessary to meet minimum risk-based capital requirements. Excluding the additional buffer, Basel III requires the Company and the Bank to maintain (i) a minimum ratio of common equity tier 1 capital to risk-weighted assets of at least 4.5%, (ii) a minimum ratio of tier 1 capital to risk-weighted assets of at least 6.0%, (iii) a minimum ratio of total capital to risk-weighted assets of at least 8.0% and (iv) a minimum leverage ratio of at least 4.0%.

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 only 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 March 31, 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 category.

Actual and required capital amounts and ratios, which do not include the capital conservation buffer, are presented below at March 31, 2025 and December 31, 2024:

											To be Well Capitalized
						Requirement For Capital					Under Prompt Corrective
	Actual					Adequacy Purposes:					Action Provisions:
	Amount		Ratio			Amount		Ratio			Amount		Ratio
March 31, 2025
Common equity tier 1 capital ratio
Consolidated	$	423,362		11.44	%	$	166,563		4.5	%		N/A		N/A
Bank		456,814		12.36	%		166,311		4.5	%		240,227		6.5	%
Total risk based capital ratio
Consolidated		550,247		14.87	%		296,112		8.0	%		N/A		N/A
Bank		493,699		13.36	%		295,664		8.0	%		369,581		10.0	%
Tier 1 risk based capital ratio
Consolidated		441,362		11.92	%		222,084		6.0	%		N/A		N/A
Bank		456,814		12.36	%		221,748		6.0	%		295,664		8.0	%
Tier 1 leverage ratio
Consolidated		441,362		8.52	%		207,122		4.0	%		N/A		N/A
Bank		456,814		8.85	%		206,544		4.0	%		258,180		5.0	%

December 31, 2024
Common equity tier 1 capital ratio
Consolidated	$	415,825		11.14	%	$	167,991		4.5	%		N/A		N/A
Bank		442,747		11.88	%		167,712		4.5	%	$	242,251		6.5	%
Total risk based capital ratio
Consolidated		543,250		14.55	%		298,651		8.0	%		N/A		N/A
Bank		480,173		12.88	%		298,155		8.0	%		372,694		10.0	%
Tier 1 risk based capital ratio
Consolidated		433,825		11.62	%		223,988		6.0	%		N/A		N/A
Bank		442,747		11.88	%		223,616		6.0	%		298,155		8.0	%
Tier 1 leverage ratio
Consolidated		433,825		8.36	%		207,544		4.0	%		N/A		N/A
Bank		442,747		8.55	%		207,066		4.0	%		258,832		5.0	%

- 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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