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CAPITAL REQUIREMENTS AND OTHER REGULATORY MATTERS

12 Months Ended

Dec. 31, 2021

CAPITAL REQUIREMENTS AND OTHER REGULATORY MATTERS

CAPITAL REQUIREMENTS AND OTHER REGULATORY MATTERS

NOTE 10. CAPITAL REQUIREMENTS AND OTHER REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the Office of the Comptroller of the Currency (“OCC”). Failure to meet minimum regulatory capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Bank’s financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgements by the regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of: total risk-based capital, Tier 1 Capital to risk-weighted assets, and Tier 1 Capital to adjusted total assets. As of December 31, 2021 and 2020, the Bank met all of the capital adequacy requirements to which it is subject.

At December 31, 2021 and 2020, the Bank was categorized as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the most recent notification that management believes have changed the Bank’s prompt corrective action category. The following table presents actual and required capital ratios for the Bank.


	Actual				To be Well Capitalized under the Prompt Corrective Action Provision
(Dollars in thousands)	Amount		Ratio		Amount		Ratio
As of December 31, 2021
Common Equity Tier 1 Capital	$	77,819	63.51	%	$	7,965	>6.5	%
Tier 1 Risk-Based Capital		77,819	63.51			9,803	>8.0
Total Risk-Based Capital		79,360	64.77			12,253	>10.0
Tier 1 Leverage Capital		77,819	27.38			14,210	>5.0

As of December 31, 2020
Common Equity Tier 1 Capital	$	50,426	40.92	%	$	8,010	>6.5	%
Tier 1 Risk-Based Capital		50,426	40.92			9,858	>8.0
Total Risk-Based Capital		52,118	42.29			12,323	>10.0
Tier 1 Leverage Capital		50,426	21.06			11,970	>5.0

- 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 + Details