XML 40 R24.htm IDEA: XBRL DOCUMENT v3.25.0.1
Regulatory Capital Requirements
 12 Months Ended
Dec. 31, 2024
Regulatory Capital Requirements Under Banking Regulations [Abstract]  
Regulatory Capital Requirements Regulatory Capital Requirements
The Company and the Bank are subject to various regulatory capital 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 and the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.
Basel III Capital Requirements
The Company and the Bank are subject to Basel III capital guidelines. Basel III requires the Company and the Bank to maintain certain minimum ratios to meet capital adequacy requirements. It is management’s belief that, as of December 31, 2024, both the Company and the Bank met all capital adequacy requirements under Basel III. Management expects that the capital ratios for the Company and the Bank under Basel III will continue to exceed capital adequacy requirements. Management believes that, as of December 31, 2024, the Bank is well-capitalized under the regulatory framework for prompt corrective action.
Bank holding companies that qualify as “small bank holding companies” under the Policy Statement are exempt from the Federal Reserve’s consolidated capital adequacy ratios at the holding company level and instead are evaluated at the bank level. In May 2018, the Economic Growth Act was enacted. One of the Economic Growth Act’s highlights, with implications for the Company, was the asset threshold under the Policy Statement being increased from $1.0 billion to $3.0 billion, which benefits bank holding companies by, among various other items, allowing for an 18-month safety and soundness examination cycle as opposed to a 12-month examination cycle, changing to scaled biannual regulatory reporting requirements as opposed to quarterly regulatory reporting requirements, and not subjecting bank holding companies to capital adequacy guidelines on a consolidated basis. Effective January 1, 2023, the Company no longer receives any benefits under the Policy Statement and became subject to consolidated capital requirements. As of the June 30, 2024 measurement date, the Company had more than $3.0 billion in assets and remains subject to consolidated capital requirements.
Capital amounts and ratios for the Company as of December 31, 2024 and 2023, are presented in the following table (Basel III Minimum includes the capital conservation buffer):
Actual
Basel III Minimum
(dollars in thousands)AmountRatioAmountRatio
December 31, 2024
Total Risk-Based Capital$400,813 18.13 %$232,161 10.50 %
Tier I Risk-Based Capital$378,440 17.12 %$187,940 8.50 %
Common Equity Tier I Capital$378,440 17.12 %$154,774 7.00 %
Tier I Leverage Capital$378,440 11.86 %$127,615 4.00 %
December 31, 2023
Total Risk-Based Capital$384,577 18.28 %$220,905 10.50 %
Tier I Risk-Based Capital$362,799 17.24 %$178,828 8.50 %
Common Equity Tier I Capital$362,799 17.24 %$147,270 7.00 %
Tier I Leverage Capital$362,799 11.56 %$125,575 4.00 %
Capital amounts and ratios for the Bank as of December 31, 2024 and 2023, are presented in the following table (Basel III Minimum includes the capital conservation buffer):
Regulatory Requirements
Actual
Basel III Minimum
Well-Capitalized(1)
(dollars in thousands)AmountRatioAmountRatioAmountRatio
December 31, 2024
Total Risk-Based Capital$393,743 17.81 %$232,092 10.50 %$221,040 10.00 %
Tier I Risk-Based Capital$371,370 16.80 %$187,884 8.50 %$176,832 8.00 %
Common Equity Tier I Capital$371,370 16.80 %$154,728 7.00 %$143,676 6.50 %
Tier I Leverage Capital$371,370 11.64 %$127,582 4.00 %$159,477 5.00 %
December 31, 2023
Total Risk-Based Capital$378,582 18.00 %$220,850 10.50 %$210,333 10.00 %
Tier I Risk-Based Capital$356,804 16.96 %$178,783 8.50 %$168,266 8.00 %
Common Equity Tier I Capital$356,804 16.96 %$147,233 7.00 %$136,716 6.50 %
Tier I Leverage Capital$356,804 11.37 %$125,538 4.00 %$156,923 5.00 %
(1)This column refers to the prompt corrective action requirements applicable to banks.
Community Bank Leverage Ratio Framework
As part of the directive under the Economic Growth Act, in September 2019, the FDIC and other federal bank regulatory agencies approved the CBLR framework. This optional framework became effective January 1, 2020, and is available to the Company and the Bank as an alternative to the Basel III risk-based capital framework. The CBLR framework provides for a simple measure of capital adequacy for certain community banking organizations. Specifically, depository institutions and depository institution holding companies that have less than $10.0 billion in total consolidated assets and meet other qualifying criteria, including a Tier I leverage ratio of greater than 9.00%, are considered qualifying community banking organizations eligible to opt into the CBLR framework and replace the applicable Basel III risk-based capital requirements.
As of December 31, 2024, the Company and the Bank qualify for the CBLR framework. Management does not intend to utilize the CBLR framework.