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Regulatory Capital Requirements | 6 Months Ended
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Jun. 30, 2025
Regulatory Capital Requirements |
11. | Regulatory Capital Requirements
Banks and bank holding companies, such as the Company, are subject to regulatory capital requirements administered by 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. Failure to meet capital requirements can initiate regulatory action. Management believed that as of June 30, 2025 and December 31, 2024, the Company and the Bank met all capital adequacy requirements to which they were subject at that time. Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. Banking organizations are required to maintain minimum capital levels as follows: a ratio of common equity Tier 1 capital equal to 4.5% of risk-weighted assets , a ratio of Tier 1 capital equal to 6.0% of risk-weighted assets, a ratio of total capital equal to 8.0% of risk-weighted assets, and a leverage ratio of Tier 1 capital to total quarterly average assets equal to 4.0% in all circumstances. As of June 30, 2025 and December 31, 2024, the most recent regulatory notifications categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action then in effect. There are no conditions or events since that notification that management believes have changed the institution’s category. Regulations include a capital conservation buffer of 2.5% that is added to these minimum requirements for capital adequacy purposes. A banking organization with a conservation buffer of less than the required amount is subject to limitations on capital distributions, including the amount of dividends that it may pay without prior regulatory approval, stock repurchases and certain discretionary bonus payments to executive officers. At June 30, 2025 and December 31, 2024, the ratios for the Company and the Bank were sufficient to meet the conservation buffer. The following is a comparison of the Company’s regulatory capital ratios to minimum capital ratio requirements as of June 30, 2025 and December 31, 2024: Schedule of Compliance with Regulatory Capital Requirements for Mortgage Companies
|  |  |  |  |  |  |  | For capital |
|  | Actual |  |  | adequacy purposes |
(Dollars in thousands) |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio (1) |
As of June 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leverage |  | $ | 146,600 |  |  |  | 9.32 | % |  | $ | 62,904 |  |  |  | 4.0 | %
Common Equity Tier 1 Capital |  |  | 125,600 |  |  |  | 10.57 | % |  |  | 83,178 |  |  |  | 7.0 | %
Tier 1 Capital |  |  | 146,600 |  |  |  | 12.34 | % |  |  | 101,002 |  |  |  | 8.5 | %
Total Risk Based Capital |  |  | 160,302 |  |  |  | 13.49 | % |  |  | 124,767 |  |  |  | 10.5 | %
As of December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leverage |  | $ | 139,657 |  |  |  | 9.02 | % |  | $ | 61,964 |  |  |  | 4.0 | %
Common Equity Tier 1 Capital |  |  | 118,657 |  |  |  | 10.49 | % |  |  | 79,164 |  |  |  | 7.0 | %
Tier 1 Capital |  |  | 139,657 |  |  |  | 12.35 | % |  |  | 96,128 |  |  |  | 8.5 | %
Total Risk Based Capital |  |  | 152,121 |  |  |  | 13.45 | % |  |  | 118,746 |  |  |  | 10.5 | %
(1) | The required ratios for capital adequacy purposes include a capital conservation buffer of 2.5%.
The following is a comparison of the Bank’s regulatory capital to minimum capital requirements as of June 30, 2025 and December 31, 2024: Schedule of Compliance with Regulatory Capital Requirements Under Banking Regulations
|  |  |  |  |  |  |  |  |  |  | To be well-capitalized |
|  |  |  |  |  |  |  |  |  |  | under prompt |
|  |  |  |  | For capital |  |  | corrective |
|  | Actual |  |  | adequacy purposes |  |  | action provisions |
(Dollars in thousands) |  | Amount |  |  | Ratio |  |  | Amount |  |  | Ratio (1) |  |  | Amount |  |  | Ratio |
As of June 30, 2025 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leverage |  | $ | 146,219 |  |  |  | 9.33 | % |  | $ | 62,710 |  |  |  | 4.0 | % |  | $ | 78,388 |  |  |  | 5.0 | %
Common Equity Tier 1 Capital |  |  | 146,219 |  |  |  | 12.31 | % |  |  | 83,132 |  |  |  | 7.0 | % |  |  | 77,194 |  |  |  | 6.5 | %
Tier 1 Capital |  |  | 146,219 |  |  |  | 12.31 | % |  |  | 100,946 |  |  |  | 8.5 | % |  |  | 95,008 |  |  |  | 8.0 | %
Total Risk Based Capital |  |  | 159,921 |  |  |  | 13.47 | % |  |  | 124,697 |  |  |  | 10.5 | % |  |  | 118,760 |  |  |  | 10.0 | %
As of December 31, 2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Leverage |  | $ | 140,523 |  |  |  | 9.10 | % |  | $ | 61,770 |  |  |  | 4.0 | % |  | $ | 77,213 |  |  |  | 5.0 | %
Common Equity Tier 1 Capital |  |  | 140,523 |  |  |  | 12.43 | % |  |  | 79,146 |  |  |  | 7.0 | % |  |  | 73,493 |  |  |  | 6.5 | %
Tier 1 Capital |  |  | 140,523 |  |  |  | 12.43 | % |  |  | 96,106 |  |  |  | 8.5 | % |  |  | 99,453 |  |  |  | 8.0 | %
Total Risk Based Capital |  |  | 152,987 |  |  |  | 13.53 | % |  |  | 118,719 |  |  |  | 10.5 | % |  |  | 113,066 |  |  |  | 10.0 | %
(1) | The required ratios for capital adequacy purposes include a capital conservation buffer of 2.5%.

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- 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. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(1) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (b) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (c)(2) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (e) -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1D -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1D Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1A -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1A Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Topic 942 -SubTopic 505 -Name Accounting Standards Codification -Section 50 -Paragraph 1F -Publisher FASB -URI https://asc.fasb.org/1943274/2147477270/942-505-50-1F + Details
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