Regulatory Capital Matters

9 Months Ended

Sep. 30, 2023

Regulatory Capital Requirements under Banking Regulations [Abstract]

Regulatory Capital Matters

Regulatory Capital Matters

Banks and bank holding companies are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and, additionally for banks, 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. Failure to meet capital requirements can initiate regulatory action.

Under the Basel III rules, the Parent Company and the Bank must hold a capital conservation buffer above the adequately capitalized risk-based capital ratios. The fully phased in capital conservation buffer is 2.50% for all periods presented.

The net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. As of September 30, 2023, both the Parent Company and the Bank met all capital adequacy requirements to which they were subject.

Prompt corrective action regulations provide five classifications: well-capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. As of September 30, 2023 and December 31, 2022, the most recent regulatory notifications categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank’s category.

Actual and required capital amounts for the Parent Company are as follows as of:

	Actual				For Capital Adequacy Purposes				To be Well- Capitalized under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount	Ratio
September 30, 2023
Total risk-based capital to risk-weighted assets:	$	925,781	12.93	%	$	572,594	8.00	%	N/A	N/A
Tier 1 risk-based capital to risk-weighted assets:	$	772,583	10.79	%	$	429,446	6.00	%	N/A	N/A
Common Equity Tier 1 (CET 1) to risk-weighted assets:	$	772,583	10.79	%	$	322,084	4.50	%	N/A	N/A
Tier 1 leverage capital to average assets:	$	772,583	10.37	%	$	298,033	4.00	%	N/A	N/A
December 31, 2022
Total risk-based capital to risk-weighted assets:	$	829,712	11.99	%	$	553,440	8.00	%	N/A	N/A
Tier 1 risk-based capital to risk-weighted assets:	$	687,602	9.94	%	$	415,080	6.00	%	N/A	N/A
Common Equity Tier 1 (CET 1) to risk-weighted assets:	$	687,602	9.94	%	$	311,310	4.50	%	N/A	N/A
Tier 1 leverage capital to average assets:	$	687,602	9.71	%	$	283,353	4.00	%	N/A	N/A

Actual and required capital amounts for the Bank are as follows as of:

	Actual				For Capital Adequacy Purposes				To be Well- Capitalized under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2023
Total risk-based capital to risk-weighted assets:	$	889,647	12.46	%	$	571,423	8.00	%	$	714,279	10.00	%
Tier 1 risk-based capital to risk-weighted assets:	$	811,628	11.36	%	$	428,568	6.00	%	$	571,423	8.00	%
Common Equity Tier 1 (CET 1) to risk-weighted assets:	$	811,628	11.36	%	$	321,426	4.50	%	$	464,281	6.50	%
Tier 1 leverage capital to average assets:	$	811,628	10.89	%	$	298,059	4.00	%	$	372,573	5.00	%
December 31, 2022
Total risk-based capital to risk-weighted assets:	$	815,335	11.81	%	$	552,237	8.00	%	$	690,296	10.00	%
Tier 1 risk-based capital to risk-weighted assets:	$	748,105	10.84	%	$	414,177	6.00	%	$	552,237	8.00	%
Common Equity Tier 1 (CET 1) to risk-weighted assets:	$	748,105	10.84	%	$	310,633	4.50	%	$	448,692	6.50	%
Tier 1 leverage capital to average assets:	$	748,105	10.56	%	$	283,245	4.00	%	$	354,056	5.00	%