The Company and the Bank are subject to various regulatory capital requirements administered by state and 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 about components, risk weighting and other factors.

The Basel III Capital Rules became effective for the Company and the Bank on January 1, 2015, subject to a phase-in period for certain provisions. Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the maintenance of minimum amounts and ratios of Common Equity Tier 1 capital, Tier 1 capital and Total capital, as defined in the regulations, to risk-weighted assets, and of Tier 1 capital to adjusted quarterly average assets (“Leverage Ratio”).

The Basel III Capital Rules were fully phased in on January 1, 2019 and require the Company and the Bank to maintain: 1) a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 4.5%, plus a 2.5% “capital conservation buffer” (resulting in a minimum ratio of Common Equity Tier 1 capital to risk-weighted assets of 7.0%); 2) a minimum ratio of Tier 1 capital to risk-weighted assets of 6.0%, plus the capital conservation buffer (resulting in a minimum Tier 1 capital ratio of 8.5%); 3) a minimum ratio of Total capital to risk-weighted assets of 8.0%, plus the capital conservation buffer (resulting in a minimum Total capital ratio of 10.5%); and 4) a minimum Leverage Ratio of 4.0%.

The capital conservation buffer is designed to absorb losses during periods of economic stress. Failure to maintain the minimum Common Equity Tier 1 capital ratio plus the capital conservation buffer will result in potential restrictions on a banking institution’s ability to pay dividends, repurchase stock and/or pay discretionary compensation to its employees.

The following tables present actual and required capital ratios as of December 31, 2025 and 2024 for the Company and the Bank under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum required capital levels as of December 31, 2025 and 2024 based on the Basel III Capital Rules. Capital levels required to be considered well capitalized are based upon prompt corrective action regulations, as amended to reflect the changes under the Basel III Capital Rules.

As permitted by the federal banking regulatory agencies, the Company has elected the option to delay the impact of the day one adoption of ASC 326. The transition adjustment of $4.5 million is phased into the regulatory capital calculations over a three-year period, with 25% of the adjustment recognized in 2023, 50% of the adjustment recognized in 2024, 75% of the adjustment recognized in 2025 and 100% of the adjustment recognized in 2026.


	Actual				Minimum Capital Required - Basel III			Minimum Required to be Considered Well Capitalized
	Capital Amount		Ratio			Capital Amount		Ratio		Capital Amount		Ratio
As of December 31, 2025:
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	350,350	8.97	%		$	273,335	7.00	%	N/A		N/A
Bank	420,963		10.83	%		272,045		7.00	%	$	252,613	6.50	%
Tier 1 capital to risk-weighted assets
Consolidated	350,350		8.97	%		331,907		8.50	%	N/A		N/A
Bank	420,963		10.83	%		330,340		8.50	%	310,908		8.00	%
Total capital to risk-weighted assets
Consolidated	488,170		12.50	%		410,003		10.50	%	N/A		N/A
Bank	469,649		12.08	%		408,067		10.50	%	388,635		10.00	%
Leverage ratio
Consolidated	350,350		6.24	%		224,566		4.00	%	N/A		N/A
Bank	420,963		7.53	%		223,717		4.00	%	279,646		5.00	%


	Actual				Minimum Capital Required - Basel III			Minimum Required to be Considered Well Capitalized
	Capital Amount		Ratio			Capital Amount		Ratio		Capital Amount		Ratio
As of December 31, 2024:
Common equity tier 1 capital to risk-weighted assets
Consolidated	$	400,100	9.30	%		$	301,052	7.00	%	N/A		N/A
Bank	475,793		11.11	%		299,774		7.00	%	$	278,362	6.50	%
Tier 1 capital to risk-weighted assets
Consolidated	400,100		9.30	%		365,563		8.50	%	N/A		N/A
Bank	475,793		11.11	%		364,012		8.50	%	342,599		8.00	%
Total capital to risk-weighted assets
Consolidated	542,808		12.62	%		451,578		10.50	%	N/A		N/A
Bank	520,610		12.16	%		449,662		10.50	%	428,249		10.00	%
Leverage ratio
Consolidated	400,100		6.90	%		232,011		4.00	%	N/A		N/A
Bank	475,793		8.23	%		231,331		4.00	%	289,164		5.00	%