Annual report pursuant to Section 13 and 15(d)

SHAREHOLDERS' EQUITY

v3.22.0.1
SHAREHOLDERS' EQUITY
12 Months Ended
Dec. 31, 2021
SHAREHOLDERS' EQUITY [Abstract]  
SHAREHOLDERS' EQUITY
NOTE 19 – SHAREHOLDERS' EQUITY
 
Regulatory Capital
 
The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements.
 
The prompt corrective action regulations provide five categories, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If a bank is only adequately capitalized, regulatory approval is required to, among other things, accept, renew or roll-over brokered deposits. If a bank is undercapitalized, capital distributions and growth and expansion are limited, and plans for capital restoration are required.
 
In July 2013, the Board of Governors of the Federal Reserve Board and the FDIC approved the rules implementing the Basel Committee on Banking Supervision's capital guidelines for U.S. banks (commonly known as Basel III). The rules include a common equity Tier 1 capital to risk-weighted assets ratio (CET1 ratio) of 4.5% and a capital conservation buffer of 2.5% of risk-weighted assets, which effectively results in a minimum CET1 ratio of 7.0%. The minimum ratio of Tier 1 capital to risk-weighted assets is 6.0% (which, with the capital conservation buffer, effectively results in a minimum Tier 1 capital ratio of 8.5%), which effectively results in a minimum total capital to risk-weighted assets ratio of 10.5% (with the capital conservation buffer), and requires a minimum leverage ratio of 4.0%.
 
NOTE 19 – SHAREHOLDERS' EQUITY (Continued)
 
Actual capital levels (dollars in thousands) and minimum required levels were as follows at year-end:

   
Actual
   
Minimum
Capital
Adequacy
   
Minimum Capital
Adequacy With
Capital Buffer
   
To Be Well
Capitalized Under
Prompt Corrective
Action Regulations
 
   
Amount
   
Ratio
   
Amount
   
Ratio
   
Amount
   
Ratio
   
Amount
   
Ratio
 
December 31, 2021
                                               
CET1 capital (to risk weighted
assets)
                                               
Consolidated
 
$
254,302
     
17.2
%
 
$
66,381
     
4.5
%
 
$
103,259
     
7.0
%
   
N/A
     
N/A
 
Bank
   
246,239
     
16.7
     
66,370
     
4.5
     
103,242
     
7.0
   
$
95,867
     
6.5
%
Tier 1 capital (to risk weighted
assets)
                                                               
Consolidated
   
254,302
     
17.2
     
88,508
     
6.0
     
125,386
     
8.5
     
N/A
     
N/A
 
Bank
   
246,239
     
16.7
     
88,493
     
6.0
     
125,365
     
8.5
     
117,991
     
8.0
 
Total capital (to risk weighted
assets)
                                                               
Consolidated
   
270,191
     
18.3
     
118,011
     
8.0
     
154,889
     
10.5
     
N/A
     
N/A
 
Bank
   
262,128
     
17.8
     
117,991
     
8.0
     
154,863
     
10.5
     
147,488
     
10.0
 
Tier 1 capital (to average
assets)
                                                               
Consolidated
   
254,302
     
8.7
     
116,664
     
4.0
     
N/A
     
N/A
     
N/A
     
N/A
 
Bank
   
246,239
     
8.4
     
116,654
     
4.0
     
N/A
     
N/A
     
145,818
     
5.0
 
                                                                 
December 31, 2020
                                                               
CET1 capital (to risk weighted
assets)
                                                               
Consolidated
 
$
235,629
     
15.8
%
 
$
67,170
     
4.5
%
 
$
104,487
     
7.0
%
   
N/A
     
N/A
 
Bank
   
248,829
     
16.7
     
67,161
     
4.5
     
104,473
     
7.0
   
$
97,010
     
6.5
%
Tier 1 capital (to risk weighted
assets)
                                                               
Consolidated
   
255,629
     
17.1
     
89,561
     
6.0
     
126,877
     
8.5
     
N/A
     
N/A
 
Bank
   
248,829
     
16.7
     
89,548
     
6.0
     
126,860
     
8.5
     
119,397
     
8.0
 
Total capital (to risk weighted
assets)
                                                               
Consolidated
   
273,037
     
18.3
     
119,414
     
8.0
     
156,731
     
10.5
     
N/A
     
N/A
 
Bank
   
266,237
     
17.8
     
119,397
     
8.0
     
156,709
     
10.5
     
149,247
     
10.0
 
Tier 1 capital (to average
assets)
                                                               
Consolidated
   
255,629
     
9.9
     
103,420
     
4.0
     
N/A
     
N/A
     
N/A
     
N/A
 
Bank
   
248,829
     
9.6
     
103,391
     
4.0
     
N/A
     
N/A
     
129,238
     
5.0
 

The full $20.0 million of trust preferred securities outstanding at December 31, 2020 qualified as Tier 1 capital.
 
The Bank was categorized as "well capitalized" at December 31, 2021 and 2020.