Note 14 - Stockholders' Equity and Regulatory Requirements

12 Months Ended

Dec. 31, 2023

Notes to Financial Statements

Equity [Text Block]

Note 14 – Stockholders’ Equity and Regulatory Requirements

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. The accumulated other comprehensive gain or loss on securities and derivatives is not included in computing regulatory capital. Management believes as of December 31, 2023, the Bank and the Parent Corporation meet all capital adequacy requirements to which they are 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 an institution is classified as adequately capitalized or lower, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is growth and expansion, and capital restoration plans are required. As of December 31, 2023, and 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 institution’s category.

The following is a summary of the Bank’s and the Parent Corporation’s actual capital amounts and ratios as of December 31, 2023 and 2022, compared to the FRB and FDIC minimum capital adequacy requirements and the FDIC requirements for classification as a well-capitalized institution.

											For Classification
											Under Corrective
						Minimum					Action Plan
						Capital Adequacy					as Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
The Bank						(dollars in thousands)
December 31, 2023
Leverage (Tier 1) capital	$	1,074,204		11.20	%	$	383,619		4.00	%	$	479,524		5.00	%
Risk-Based Capital:
CET 1	$	1,074,204		12.31		$	392,643		4.50		$	567,151		6.50
Tier 1		1,074,204		12.31			523,524		6.00			698,032		8.00
Total		1,158,572		13.28			698,032		8.00			872,540		10.00
December 31, 2022
Leverage (Tier 1) capital	$	996,013		10.64	%	$	374,553		4.00	%	$	468,191		5.00	%
Risk-Based Capital:
CET 1	$	996,013		11.60		$	386,289		4.50		$	557,972		6.50
Tier 1		996,013		11.60			515,051		6.00			686,735		8.00
Total		1,117,733		13.02			686,735		8.00			858,419		10.00

						Minimum Capital					For Classification
						Adequacy					as Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
The Company	(dollars in thousands)
December 31, 2023
Leverage (Tier 1) capital	$	1,042,481		10.86	%	$	383,900		4.00	%		N/A		N/A
Risk-Based Capital:
CET 1	$	926,399		10.62		$	392,650		4.50			N/A		N/A
Tier 1		1,042,481		11.95			523,533		6.00			N/A		N/A
Total		1,201,849		13.77			698,044		8.00			N/A		N/A
December 31, 2022
Leverage (Tier 1) capital	$	1,000,577		10.68	%	$	374,729		4.00	%		N/A		N/A
Risk-Based Capital:
CET 1	$	884,495		10.30		$	386,295		4.50			N/A		N/A
Tier 1		1,000,577		11.66			515,061		6.00			N/A		N/A
Total		1,240,047		14.45			686,748		8.00			N/A		N/A

As of December 31, 2023, both the Company and Bank satisfy the capital conservation buffer requirements applicable to them. The lowest ratio at the Company is the Total Risk Capital Ratio which was 3.27% above the minimum buffer ratio and, at the Bank, the lowest ratio was the Total Risk Based Capital Ratio which was 2.78% above the minimum buffer ratio.