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Note 13 - Regulatory Matters
 6 Months Ended
Jun. 30, 2021
Notes to Financial Statements  
Regulatory Capital Requirements under Banking Regulations [Text Block]

13.

Regulatory Matters

 

On March 31, 2020, the Banks qualified for and elected to use the community bank leverage ratio (CBLR) framework. In order to qualify for the CBLR framework, a community banking organization must have a tier 1 leverage ratio of greater than 8%, less than $10 billion in total consolidated assets, and limited amounts of off-balance-sheet exposures and trading assets and liabilities. On January 1, 2021 the CBLR increased to 8.5% for the calendar year and will again increase to 9% beginning January 1, 2022. A qualifying community banking organization that opts into the CBLR framework and meets all requirements under the framework will be considered to have met the well-capitalized ratio requirements under the Prompt Corrective Action regulations and will not be required to report or calculate risk-based capital. If an electing banking organization fails to satisfy one or more of the qualifying criteria but maintains a leverage ratio of greater than 8%, that banking organization would have a “grace period” of up to two quarters during which it could continue to use the community bank leverage ratio framework and be deemed to meet the “well capitalized” capital ratio requirements. As long as the banking organization is able to return to compliance with all the qualifying criteria within two quarters, it continues to be deemed to meet the “well capitalized” ratio requirements and be in compliance with the generally applicable capital rule. State Bank & Trust was below 8.5% but greater than 8% as of June 30, 2021 and has until September 30, 2021 to return to compliance with all qualifying criteria of the CBLR. First National Bank was below 8.5% but greater than 8% as of June 30, 2021 and has until December 31, 2021 to return to compliance with all qualifying criteria of the CBLR.

 

The Company and the Banks’ capital amounts and ratios as of June 30, 2021 and December 31, 2020 are as follows (dollars in thousands):

 

          

To Be Well

 
          

Capitalized Under

 
          

Prompt Corrective

 
  

Actual

  

Action Provisions

 
  

Amount

  

Ratio

  

Amount

  

Ratio

 
                 

As of June 30, 2021:

                

Community Bank Leverage Ratio:

                

(Tier 1 capital to average assets for leverage ratio):

                
                 

Boone Bank & Trust

 $14,345   9.0% $13,542   8.5%

First National Bank

  90,457   8.5   90,814   8.5 

Iowa State Savings Bank

  22,305   9.0   20,949   8.5 

Reliance State Bank

  24,146   9.0   22,885   8.5 

State Bank & Trust

  17,950   8.3   18,390   8.5 

United Bank & Trust

  10,720   8.8   10,355   8.5 

 

          

To Be Well

 
          

Capitalized Under

 
          

Prompt Corrective

 
  

Actual

  

Action Provisions

 
  

Amount

  

Ratio

  

Amount

  

Ratio

 
                 

As of December 31, 2020:

                

Community Bank Leverage Ratio:

                

(Tier 1 capital to average assets for leverage ratio):

                
                 

Boone Bank & Trust

 $13,967   9.2% $12,170   8.0%

First National Bank

  86,071   8.6   80,393   8.0 

Iowa State Savings Bank

  21,610   9.4   18,321   8.0 

Reliance State Bank

  23,278   9.4   19,741   8.0 

State Bank & Trust

  16,564   8.5   15,657   8.0 

United Bank & Trust

  10,539   9.2   9,180   8.0