Regulatory Matters

6 Months Ended

Jun. 30, 2025

Note 5.

Regulatory Matters

The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the OCC. Failure to meet the minimum regulatory capital requirements can initiate certain mandatory, and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s consolidated financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices. The Bank’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table below) of common equity Tier I capital, Tier I capital and total capital to risk-weighted assets and Tier I capital to average assets. The final rules implementing Basel Committee on Banking Supervision’s capital guidelines for U.S. banks (Basel Ill rules) became fully effective for the Company on January 1, 2019. Management believes, as of June 30, 2025 and December 31, 2024, that the Company meets all capital adequacy requirements to which it is subject.

As of June 30, 2025 and December 31, 2024, the most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum total ratios as disclosed in the table below. There are no conditions or events since the notification that management believes have changed the Bank’s prompt corrective action category.

The Bank’s actual capital amounts and ratios as of June 30, 2025 and December 31, 2024 are also presented in the table below (dollar amounts in thousands):


									Required to Be Well-
					Required for				Capitalized Under
					Capital Adequacy				Prompt Corrective
	Actual				Purposes				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
June 30, 2025
Tier 1 Capital to Average Assets	$	113,998	21.00	%	$	21,720	4.00	%	$	27,150	5.00	%
Common Equity Tier 1 Capital to Risk-Weighted Assets		113,998	41.68			12,308	4.50			17,778	6.50
Tier 1 Capital to Risk-Weighted Assets		113,998	41.68			16,411	6.00			21,881	8.00
Total Capital to Risk-Weighted Assets		115,711	42.31			21,881	8.00			27,352	10.00

December 31, 2024
Tier 1 Capital to Average Assets	$	110,777	20.78	%	$	21,322	4.00	%	$	26,653	5.00	%
Common Equity Tier 1 Capital to Risk-Weighted Assets		110,777	43.24			11,529	4.50			16,654	6.50
Tier 1 Capital to Risk-Weighted Assets		110,777	43.24			15,373	6.00			20,497	8.00
Total Capital to Risk-Weighted Assets		112,491	43.91			20,497	8.00			25,621	10.00

- 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.

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