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Regulatory Capital

12 Months Ended

Dec. 31, 2023

Note 21: Regulatory Capital

The Company and the Bank are subject to various regulatory requirements administered by 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 effect on the Company’s financial statements. Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Bank must also meet certain specific capital guidelines under the regulatory framework for prompt corrective action. The capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets (referred to as the “leverage ratio”), as defined under the applicable regulatory capital rules.

The following tables present the capital amounts and ratios for the Company, on a consolidated basis, and the Bank as of December 31, 2023 and 2022:


					Minimum Required				For Capital Adequacy				To be Well Capitalized
					For Capital Adequacy				Purposes Plus Capital				Under Prompt Corrective
	Actual				Purposes				Conservation Buffer				Action Regulations
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2023
Company (Consolidated):
Total Risk-based Capital	$	570,770	13.97	%	$	326,872	8.00	%	$	429,019	10.50	%		N/A	N/A
Tier 1 Risk-based Capital		440,947	10.79			245,154	6.00			347,301	8.50			N/A	N/A
Common Equity Tier 1 Capital		374,433	9.16			183,865	4.50			286,013	7.00			N/A	N/A
Tier 1 Leverage Ratio		440,947	9.57			184,383	4.00			184,383	4.00			N/A	N/A
Bank:
Total Risk-based Capital	$	554,269	13.58	%	$	326,528	8.00	%	$	428,568	10.50	%	$	408,160	10.00	%
Tier 1 Risk-based Capital		503,787	12.34			244,896	6.00			346,936	8.50			326,528	8.00
Common Equity Tier 1 Capital		503,787	12.34			183,672	4.50			285,712	7.00			265,304	6.50
Tier 1 Leverage Ratio		503,787	10.95			184,037	4.00			184,037	4.00			230,047	5.00


					Minimum Required				For Capital Adequacy				To be Well Capitalized
					For Capital Adequacy				Purposes Plus Capital				Under Prompt Corrective
	Actual				Purposes				Conservation Buffer				Action Regulations
(dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2022
Company (Consolidated):
Total Risk-based Capital	$	536,352	13.15	%	$	326,190	8.00	%	$	428,125	10.50	%		N/A	N/A
Tier 1 Risk-based Capital		409,092	10.03			244,643	6.00			346,577	8.50			N/A	N/A
Common Equity Tier 1 Capital		342,578	8.40			183,482	4.50			285,417	7.00			N/A	N/A
Tier 1 Leverage Ratio		409,092	9.55			171,368	4.00			171,368	4.00			N/A	N/A
Bank:
Total Risk-based Capital	$	508,760	12.47	%	$	326,288	8.00	%	$	428,253	10.50	%	$	407,860	10.00	%
Tier 1 Risk-based Capital		460,404	11.29			244,716	6.00			346,681	8.50			326,288	8.00
Common Equity Tier 1 Capital		460,404	11.29			183,537	4.50			285,502	7.00			265,109	6.50
Tier 1 Leverage Ratio		460,404	10.76			171,113	4.00			171,113	4.00			213,891	5.00

The Company and the Bank must maintain a capital conservation buffer as defined by Basel III regulatory capital guidelines, in order to avoid limitations on capital distributions, including dividend payments, stock repurchases and certain discretionary bonus payments to executive officers.

As of December 31, 2023 and 2022, the capital ratios of the Company and the Bank were in excess of the quantitative capital ratio standards applicable on those dates. However, there can be no assurance that the Company and the Bank will continue to maintain such status in the future.

- 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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