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Regulatory Restrictions and Capital Ratios
12 Months Ended
Dec. 31, 2020
Regulatory Capital Requirements [Abstract]  
Regulatory Capital Requirements under Banking Regulations [Text Block]
NOTE 17: REGULATORY
 
RESTRICTIONS AND CAPITAL
 
RATIOS
 
As required by the Economic Growth, Regulatory Relief, and Consumer
 
Protection Act in August 2018, the Federal
Reserve Board issued an interim final rule that expanded applicability
 
of the Board’s small bank holding
 
company policy
statement. The interim final rule raised the policy statement’s
 
asset threshold from $1 billion to $3 billion in total
consolidated assets for a bank holding company or savings and
 
loan holding company that: (1) is not engaged in significant
nonbanking activities; (2) does not conduct significant off
 
-balance sheet activities; and (3) does not have a material amount
of debt or equity securities, other than trust-preferred securities,
 
outstanding. The interim final rule provides that, if
warranted for supervisory purposes, the Federal Reserve may exclude
 
a company from the threshold increase. Management
believes the Company meets the conditions of the Federal Reserve’s
 
small bank holding company policy statement and is
therefore excluded from consolidated capital requirements at
 
December 31, 2020.
 
The Bank remains subject to regulatory capital requirements
 
administered by the federal banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory
 
- and possibly additional discretionary - actions by regulators
that, if undertaken, could have a direct material effect
 
on the Company’s financial statements.
 
Under capital adequacy
guidelines and the regulatory framework for prompt corrective action,
 
the Bank must meet specific capital guidelines that
involve quantitative measures of their assets, liabilities and certain
 
off-balance sheet items as calculated under regulatory
accounting practices. The capital amounts and classification are
 
also subject to qualitative judgments by the regulators
about components, risk weightings and other factors.
 
As of December 31, 2020, the Bank is “well capitalized” under
 
the regulatory framework for prompt corrective action. To
be categorized as “well capitalized,” the Bank must maintain minimum
 
common equity Tier 1, total risk-based,
 
Tier 1 risk-
based, and Tier 1 leverage ratios as set forth
 
in the table. Management has not received any notification from the
 
Bank's
regulators that changes the Bank’s
 
regulatory capital status.
 
The actual capital amounts and ratios for the Bank and the aforementioned
 
minimums as of December 31, 2020 and 2019
are presented below.
Minimum for capital
Minimum to be
 
Actual
adequacy purposes
well capitalized
(Dollars in thousands)
Amount
Ratio
Amount
Ratio
Amount
Ratio
At December 31, 2020:
Tier 1 Leverage Capital
$
96,096
10.32
%
$
37,263
4.00
%
$
46,579
5.00
%
Common Equity Tier 1 Capital
96,096
17.27
25,042
4.50
36,171
6.50
Tier 1 Risk-Based Capital
96,096
17.27
33,389
6.00
44,519
8.00
Total Risk-Based Capital
101,906
18.31
44,519
8.00
55,648
10.00
At December 31, 2019:
Tier 1 Leverage Capital
$
92,778
11.23
%
$
33,043
4.00
%
$
41,303
5.00
%
Common Equity Tier 1 Capital
92,778
17.28
24,162
4.50
34,901
6.50
Tier 1 Risk-Based Capital
92,778
17.28
32,216
6.00
42,955
8.00
Total Risk-Based Capital
97,291
18.12
42,955
8.00
53,693
10.00
Dividends paid by the Bank are a principal source of funds available
 
to the Company for payment of dividends to its
stockholders and for other needs. Applicable federal and state
 
statutes and regulations impose restrictions on the amounts
 
of
dividends that may be declared by the subsidiary bank. State
 
law and Federal Reserve policy restrict the Bank from
declaring dividends in excess of the sum of the current year’s
 
earnings plus the retained net earnings from the preceding
two years without prior approval. In addition to the formal statutes
 
and regulations, regulatory authorities also consider the
adequacy of the Bank’s total capital
 
in relation to its assets, deposits, and other such items. Capital adequacy
 
considerations
could further limit the availability of dividends from the Bank. At
 
December 31,
 
2020, the Bank could have declared
additional dividends of approximately $
6.8
 
million without prior approval of regulatory authorities. As a result of this
limitation, approximately $
96.9
 
million of the Company’s investment
 
in the Bank was restricted from transfer in the form
of dividends.