Quarterly report pursuant to Section 13 or 15(d)

SHAREHOLDERS' EQUITY

v3.22.2
SHAREHOLDERS' EQUITY
6 Months Ended
Jun. 30, 2022
SHAREHOLDERS' EQUITY [Abstract]  
SHAREHOLDERS' EQUITY
NOTE 12 – 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.

NOTE 12 – SHAREHOLDERS’ EQUITY (Continued)

The regulatory capital requirements 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). The minimum leverage ratio is 4.0%.

At June 30, 2022  and December 31, 2021, actual capital levels and minimum required levels were (dollars in thousands):

               
Minimum
Capital
   
Minimum Capital
Adequacy With
   
To Be Well
Capitalized Under
Prompt Corrective
 
   
Actual
   
Adequacy
   
Capital Buffer
   
Action Regulations
 
   
Amount
   
Ratio
   
Amount
   
Ratio
   
Amount
   
Ratio
   
Amount
   
Ratio
 
June 30, 2022                                                
CET1 capital (to risk weighted assets)
                                               
Consolidated
 
$
261,788
     
16.5
%
 
$
71,209
     
4.5
%
 
$
110,769
     
7.0
%
   
N/A
     
N/A
 
Bank
   
253,830
     
16.0
     
71,196
     
4.5
     
110,750
     
7.0
   
$
102,839
     
6.5
%
Tier 1 capital (to risk weighted assets)
                                                               
Consolidated
   
261,788
     
16.5
     
94,945
     
6.0
     
134,505
     
8.5
     
N/A
     
N/A
 
Bank
   
253,830
     
16.0
     
94,928
     
6.0
     
134,482
     
8.5
     
126,571
     
8.0
 
Total capital (to risk weighted assets)
                                                               
Consolidated
   
276,419
     
17.5
     
126,593
     
8.0
     
166,154
     
10.5
     
N/A
     
N/A
 
Bank
   
268,461
     
17.0
     
126,571
     
8.0
     
166,124
     
10.5
     
158,214
     
10.0
 
Tier 1 capital (to average assets)
                                                               
Consolidated
   
261,788
     
9.1
     
114,682
     
4.0
     
N/A
     
N/A
     
N/A
     
N/A
 
Bank
   
253,830
     
8.9
     
114,675
     
4.0
     
N/A
     
N/A
     
143,344
     
5.0
 
                                                                 
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
 

The Bank was categorized as “well capitalized” at June 30, 2022 and December 31, 2021.