Note 7 - Regulatory Capital

9 Months Ended

Sep. 30, 2022

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note 7. Regulatory Capital

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 net unrealized gain or loss on available for sale securities is not included in computing regulatory capital. Management believes as of September 30, 2022, the Bank and the Company 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 September 30, 2022 and December 31, 2021, 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 Company’s and Wilson Bank’s actual capital amounts and ratios as of  September 30, 2022 and  December 31, 2021 are presented in the following tables. The capital conservation buffer of 2.5% is not included in the required minimum ratios of the tables presented below.

	Actual					Minimum Capital Adequacy					For Classification Under Corrective Action Plan as Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
September 30, 2022
Total capital to risk weighted assets:
Consolidated	$	497,360		13.5	%	$	294,682		8.0	%	$	368,352		10.0	%
Wilson Bank		494,996		13.4			294,680		8.0			368,350		10.0
Tier 1 capital to risk weighted assets:
Consolidated		452,928		12.3			221,011		6.0			294,681		8.0
Wilson Bank		450,564		12.2			221,011		6.0			294,681		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		452,928		12.3			165,758		4.5			N/A		N/A
Wilson Bank		450,564		12.2			165,758		4.5			239,429		6.5
Tier 1 capital to average assets:
Consolidated		452,928		11.0			165,284		4.0			N/A		N/A
Wilson Bank		450,564		10.9			165,229		4.0			206,537		5.0

	Actual					Minimum Capital Adequacy					For Classification Under Corrective Action Plan as Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2021
Total capital to risk weighted assets:
Consolidated	$	455,813		13.9	%	$	261,404		8.0	%	$	326,755		10.0	%
Wilson Bank		452,130		13.8			261,317		8.0			326,646		10.0
Tier 1 capital to risk weighted assets:
Consolidated		415,226		12.7			196,052		6.0			261,403		8.0
Wilson Bank		411,543		12.6			195,987		6.0			261,316		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		415,226		12.7			147,039		4.5			N/A		N/A
Wilson Bank		411,543		12.6			146,990		4.5			212,319		6.5
Tier 1 capital to average assets:
Consolidated		415,226		10.8			154,280		4.0			N/A		N/A
Wilson Bank		411,543		10.7			154,230		4.0			192,787		5.0

Dividend Restrictions

The Company and the Bank are subject to dividend restrictions set forth by the Tennessee Department of Financial Institutions and federal banking agencies, as applicable. Additional restrictions may be imposed by the Tennessee Department of Financial Institutions and federal banking agencies under the powers granted to them by law.