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Minimum Regulatory Capital Requirements

12 Months Ended

Jun. 30, 2024

Minimum Regulatory Capital Requirements

Note 17 - Minimum Regulatory Capital Requirements

Bank regulatory authorities in the United States issue risk-based capital standards. These capital standards relate a banking company’s capital to the risk profile of its assets and provide the basis by which all banking companies and banks are evaluated in terms of capital adequacy.

The risk-based capital standards require financial institutions to maintain: (a) a minimum ratio of common equity tier 1 (“CET1”) to risk weighted assets of at least 4.5%, (b) a minimum ratio of tier 1 capital to risk-weighted assets of at least minimum leverage ratio of 3.0%, calculated as the ratio of tier 1 capital balance sheet exposures plus certain off-balance

sheet exposures (computed as the average for each quarter of the month-end ratios for the quarter). In addition, the rules also limit a banking organization’s capital distributions and certain discretionary bonus payments if the banking organization does not hold a “capital conservation buffer” of 2.5% above the minimum standards stated in (a) - (c) above.

In September 2019, the FDIC finalized a rule to simplify the capital calculation for qualifying community banking organizations (i.e., the community bank leverage ratio (“CBLR”)), as required by the Economic Growth, Regulatory Relief and Consumer Protection Act. The CBLR framework is designed to reduce burden by removing the requirements for calculating and reporting risk-based capital ratios for qualifying community banking organizations that opt into the framework. A qualifying community bank may elect to utilize the CBLR in lieu of the general capital requirements and will be considered well capitalized if it exceeds the minimum CBLR of 9.0%. The CBLR framework also provides a two-quarter grace period for qualifying banks whose leverage ratio falls no more than 1.00% below the required ratio for that reporting quarter. The Bank opted into the CBLR framework as of June 30, 2024 and June 30, 2023.

As of June 30, 2024 and June 30, 2023, management believes the Bank has met all capital adequacy requirements to which it is subject. As of June 30, 2024 and June 30, 2023, the most recent notification from the FDIC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since the notification that management believes have changed the Bank’s category.

The Bank’s actual capital amounts and ratios are presented in the following table (dollars in thousands):


										Minimum To Be Well
										Capitalized Under
					Minimum Capital					Prompt Corrective
	Actual				Requirements					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio

June 30, 2024		(Dollars in thousands)
Tier I Capital to Average Assets	$	29,380	13.04	%	$	18,025	>	8.0	%	$	20,278	>	9.0	%


										Minimum To Be Well
										Capitalized Under
					Minimum Capital					Prompt Corrective
	Actual				Requirements					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio

June 30, 2023		(Dollars in thousands)
Tier I Capital to Average Assets	$	29,030	12.02	%	$	19,321	>	8.0	%	$	21,736	>	9.0	%

A Wisconsin state-chartered savings bank is required by state law to maintain minimum net worth in an amount equal to at least 6.0% of its total assets. At June 30, 2024, the Bank’s net worth was $28,955,130 and general loan loss reserve was $1,797,116, totaling 13.91% of total assets, which meets the state of Wisconsin’s minimum net worth requirements. At June 30, 2023, the Bank’s net worth was $28,246,139 and general loan loss reserve was $2,158,590 totaling 12.67% of total assets, which meets the state of Wisconsin’s minimum net worth requirements.

- 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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