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Regulatory Matters
 12 Months Ended
Dec. 31, 2022
Leases [Abstract]  
Regulatory Matters

NOTE 23 – Regulatory Matters

 

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. The capital rules require banks and bank holding companies to maintain a minimum total risked-based capital ratio of at least 8%, a total Tier 1 capital ratio of at least 6%, a minimum common equity Tier 1 capital ratio of at least 4.5%, and a leverage ratio of at least 4%. Bank holding companies and banks are also required to hold a capital conservation buffer of common equity Tier 1 capital of 2.5% to avoid limitations on capital distributions and discretionary executive compensation payments. The capital conservation buffer was phased in incrementally over time, becoming fully effective on January 1, 2019, and consists of an additional amount of common equity equal to 2.5% of risk-weighted assets.

 

To be considered “well-capitalized” for purposes of certain rules and prompt corrective action requirements, the Bank must maintain a minimum total risked-based capital ratio of at least 10%, a total Tier 1 capital ratio of at least 8%, a common equity Tier 1 capital ratio of at least 6.5%, and a leverage ratio of at least 5%. As of December 31, 2022, our capital ratios exceed these ratios and we remain “well capitalized.”

 

The following table summarizes the capital amounts and ratios of the Bank and the Company and the regulatory minimum requirements at December 31, 2022 and 2021.

  

           To be well 
           capitalized 
       For capital   under prompt 
       adequacy purposes  

corrective action

 
   Actual   minimum   provisions minimum 
(dollars in thousands)  Amount   Ratio   Amount   Ratio   Amount   Ratio 
As of December 31, 2022                        
The Bank                              
Total Capital (to risk weighted assets)  $366,988    12.45%  $235,892    8.00%  $294,865    10.00%
Tier 1 Capital (to risk weighted assets)   330,108    11.20%   176,919    6.00%   235,892    8.00%
Common Equity Tier 1 Capital (to risk weighted assets)   330,108    11.20%   132,689    4.50%   191,662    6.50%
Tier 1 Capital (to average assets)   330,108    9.43%   140,040    4.00%   175,050    5.00%
                               
The Company                              
Total Capital (to risk weighted assets)   380,802    12.91%   235,892    8.00%   n/a    n/a 
Tier 1 Capital (to risk weighted assets)   320,922    10.88%   176,919    6.00%   n/a    n/a 
Common Equity Tier 1 Capital (to risk weighted assets)   307,922    10.44%   132,689    4.50%   n/a    n/a 
Tier 1 Capital (to average assets)   320,922    9.17%   140,057    4.00%   n/a    n/a 

 

                   To be well 
                   capitalized 
           For capital   under prompt 
           adequacy purposes   corrective action 
   Actual  minimum  

provisions minimum

 
(dollars in thousands)  Amount   Ratio   Amount   Ratio   Amount   Ratio 
As of December 31, 2021                        
The Bank                              
Total Capital (to risk weighted assets)  $331,052    14.36%  $184,418    8.00%  $230,522    10.00%
Tier 1 Capital (to risk weighted assets)   302,217    13.11%   138,313    6.00%   184,418    8.00%
Common Equity Tier 1 Capital (to risk weighted assets)   302,217    13.11%   103,735    4.50%   149,839    6.50%
Tier 1 Capital (to average assets)   302,217    10.55%   114,537    4.00%   143,172    5.00%
                               
The Company(1)                              
Total Capital (to risk weighted assets)   343,476    14.90%   184,418    8.00%   n/a    n/a 
Tier 1 Capital (to risk weighted assets)   291,641    12.65%   138,313    6.00%   n/a    n/a 
Common Equity Tier 1 Capital (to risk weighted assets)   278,641    12.09%   103,735    4.50%   n/a    n/a 
Tier 1 Capital (to average assets)   291,641    10.18%   114,555    4.00%   n/a    n/a 

 

(1)Under the Federal Reserve’s Small Bank Holding Company Policy Statement, in 2021, the Company was not subject to the minimum capital adequacy and capital conservation buffer capital requirements at the holding company level. Although the minimum regulatory capital requirements were not applicable to the Company in 2021, we calculated these ratios for our own planning and monitoring purposes.