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Regulatory Restrictions and Capital Ratios
12 Months Ended
Dec. 31, 2022
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, the Federal Reserve Board issued
an interim final rule that expanded applicability of the Board’s
 
small bank holding company policy statement (the “Small
BHC Policy Statement”) and its Regulation Q capital and Regulation Y holding company
 
rules in August 2018. The interim
final rule raised the Small BHC Policy Statement’s
 
asset limit 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 that are registered
 
with the SEC. The interim final rule provides
that, if warranted for supervisory purposes, the Federal Reserve may exclude a company
 
from this asset level increase. The
Federal Reserve has treated the Company as a small bank holding company for purposes of
 
the Small BHC Policy
Statement and therefore has considered only the Bank’s
 
capital and not the Company’s consolidated
 
capital.
 
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, 2022, 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 equity 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, 2022 and 2021
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, 2022:
Tier 1 Leverage Capital
$
106,886
10.01
%
$
42,716
4.00
%
$
53,394
5.00
%
Common Equity Tier 1 Capital
106,886
15.39
31,252
4.50
45,142
6.50
Tier 1 Risk-Based Capital
106,886
15.39
41,669
6.00
55,559
8.00
Total Risk-Based Capital
112,851
16.25
55,559
8.00
69,449
10.00
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
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,
 
2022, the Bank could have declared
additional dividends of approximately $
13.9
 
million without prior approval of regulatory authorities. As a result of this
limitation, approximately $
54.1
 
million of the Company’s investment in the Bank
 
was restricted from transfer in the form
of dividends.