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Regulatory Restrictions and Capital Ratios
12 Months Ended
Dec. 31, 2021
Regulatory Capital Requirements [Abstract]  
Regulatory Capital Requirements under Banking Regulations [Text Block]
NOTE 16: REGULATORY
 
RESTRICTIONS AND CAPITAL
 
RATIOS
As required by the Economic Growth, Regulatory Relief, and Consumer Protection
 
Act in August 2018, the Federal
Reserve Board issued an interim final rule that expanded applicability of the Board’s
 
small bank holding company policy
statement. The interim final rule raised the policy statement’s
 
asset threshold from $1 billion to $3 billion in total
consolidated assets for a bank holding company or savings and loan holding company that:
 
(1) is not engaged in significant
nonbanking activities; (2) does not conduct significant off-balance sheet
 
activities; and (3) does not have a material amount
of debt or equity securities, other than trust-preferred securities, outstanding. The
 
interim final rule provides that, if
warranted for supervisory purposes, the Federal Reserve may exclude a company from
 
the threshold increase. Management
believes the Company meets the conditions of the Federal Reserve’s
 
small bank holding company policy statement and is
therefore excluded from consolidated capital requirements at December 31,
 
2021.
 
The Bank remains subject to regulatory capital requirements administered by the
 
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
 
financial statements. Under capital adequacy
guidelines and the regulatory framework for prompt corrective action, the Bank
 
must meet specific capital guidelines that
involve quantitative measures of their 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.
As of December 31, 2021, the Bank is “well capitalized” under the regulatory framework
 
for prompt corrective action. To
be categorized as “well capitalized,” the Bank must maintain minimum common equit
 
y
 
Tier 1, total risk-based, Tier
 
1 risk-
based, and Tier 1 leverage ratios as set forth in the table. Management
 
has not received any notification from the Bank's
regulators that changes the Bank’s regulatory capital
 
status.
The actual capital amounts and ratios for the Bank and the aforementioned minimums as
 
of December 31, 2021 and 2020
are presented below.
Minimum for capital
Minimum to be
 
Actual
adequacy purposes
well capitalized
(Dollars in thousands)
Amount
Ratio
Amount
Ratio
Amount
Ratio
At December 31, 2021:
Tier 1 Leverage Capital
$
100,059
9.35
%
$
42,808
4.00
%
$
53,509
5.00
%
Common Equity Tier 1 Capital
100,059
16.23
27,742
4.50
40,072
6.50
Tier 1 Risk-Based Capital
100,059
16.23
36,990
6.00
49,320
8.00
Total Risk-Based Capital
105,163
17.06
49,320
8.00
61,649
10.00
At December 31, 2020:
Tier 1 Leverage Capital
$
96,096
10.32
%
$
37,263
4.00
%
$
46,579
5.00
%
Common Equity Tier 1 Capital
96,096
17.27
25,042
4.50
36,171
6.50
Tier 1 Risk-Based Capital
96,096
17.27
33,389
6.00
44,519
8.00
Total Risk-Based Capital
101,906
18.31
44,519
8.00
55,648
10.00
Dividends paid by the Bank are a principal source of funds available to the Company for
 
payment of dividends to its
stockholders and for other needs. Applicable federal and state statutes and regulations impose
 
restrictions on the amounts of
dividends that may be declared by the subsidiary bank. State law and Federal Reserve policy
 
restrict the Bank from
declaring dividends in excess of the sum of the current year’s earnings
 
plus the retained net earnings from the preceding
two years without prior approval. In addition to the formal statutes and regulations,
 
regulatory authorities also consider the
adequacy of the Bank’s total capital in relation to its assets,
 
deposits, and other such items. Capital adequacy considerations
could further limit the availability of dividends from the Bank. At December 31,
 
2021, the Bank could have declared
additional dividends of approximately $
8.3
 
million without prior approval of regulatory authorities. As a result of this
limitation, approximately $
92.6
 
million of the Company’s investment in the Bank
 
was restricted from transfer in the form
of dividends.