Note 17 - Regulatory Matters and Restrictions on Dividens

12 Months Ended

Dec. 31, 2022

Notes to Financial Statements

Regulatory Capital Requirements under Banking Regulations [Text Block]

(17) Regulatory Matters and Restrictions on Dividends

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 December 31, 2022, the Bank and the Company met 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, 2022, and 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 December 31, 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.

											For Classification Under
						Minimum					Corrective Action Plan
	Actual					Capital Adequacy					as Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(dollars in thousands)
December 31, 2022
Total capital to risk weighted assets:
Consolidated	$	512,025		13.5	%	$	303,440		8.0	%	$	379,300		10.0	%
Wilson Bank		509,169		13.4			303,334		8.0			379,168		10.0
Tier 1 capital to risk weighted assets:
Consolidated		466,076		12.3			227,580		6.0			303,440		8.0
Wilson Bank		463,220		12.2			227,500		6.0			303,333		8.0
Common equity Tier 1 capital to risk weighted assets:
Consolidated		466,061		12.3			170,685		4.5			N/A		N/A
Wilson Bank		463,205		12.2			170,625		4.5			246,458		6.5
Tier 1 capital to average assets:
Consolidated		466,076		11.2			166,712		4.0			N/A		N/A
Wilson Bank		463,220		11.1			166,648		4.0			208,310		5.0

											For Classification Under
						Minimum					Corrective Action Plan
	Actual					Capital Adequacy					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.