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NOTE 9 - REGULATORY CAPITAL REQUIREMENTS

6 Months Ended

Jun. 30, 2021

NOTE 9 – REGULATORY CAPITAL REQUIREMENTS

The Company (on a consolidated basis) and the subsidiary banks are subject to various 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 and subsidiary banks' financial statements.

Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the subsidiary banks must meet specific capital guidelines that involve quantitative measures of their assets, liabilities, and certain OBS 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. Quantitative measures established by regulation to ensure capital adequacy require the Company and the subsidiary banks to maintain minimum amounts and ratios (set forth in the following table) of total common equity Tier 1 and Tier 1 capital to risk-weighted assets and of Tier 1 capital to average assets, each as defined by regulation. Management believes, as of June 30, 2021 and December 31, 2020, that the Company and the subsidiary banks met all capital adequacy requirements to which they are subject.

Under the regulatory framework for prompt corrective action, to be categorized as “well capitalized,” an institution must maintain minimum total risk-based, Tier 1 risk-based, Tier 1 leverage and common equity Tier 1 ratios as set forth in the following tables. The Company and the subsidiary banks’ actual capital amounts and ratios as of June 30, 2021 and

December 31, 2020 are presented in the following tables (dollars in thousands). As of June 30, 2021 and December 31, 2020, each of the subsidiary banks met the requirements to be “well capitalized”.


										For Capital					To Be Well
										Adequacy Purposes					Capitalized Under
					For Capital					With Capital					Prompt Corrective
	Actual				Adequacy Purposes					Conservation Buffer					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio		Amount			Ratio
As of June 30, 2021:
Company:
Total risk-based capital	$	760,593	14.72	%	$	413,445	>	8.00	%	$	542,647	>	10.50	%	$	516,806	>	10.00	%
Tier 1 risk-based capital		581,919	11.26			310,084	>	6.00			439,285	>	8.50			413,445	>	8.00
Tier 1 leverage		581,919	10.29			226,250	>	4.00			226,250	>	4.00			282,812	>	5.00
Common equity Tier 1		543,852	10.52			232,563	>	4.50			361,764	>	7.00			335,924	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	228,180	13.15	%	$	138,799	>	8.00	%	$	182,174	>	10.50	%	$	173,499	>	10.00	%
Tier 1 risk-based capital		206,355	11.89			104,099	>	6.00			147,474	>	8.50			138,799	>	8.00
Tier 1 leverage		206,355	9.75			84,699	>	4.00			84,699	>	4.00			105,874	>	5.00
Common equity Tier 1		206,355	11.89			78,075	>	4.50			121,449	>	7.00			112,774	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	243,211	13.86	%	$	140,431	>	8.00	%	$	184,316	>	10.50	%	$	175,539	>	10.00	%
Tier 1 risk-based capital		221,202	12.60			105,323	>	6.00			149,208	>	8.50			140,431	>	8.00
Tier 1 leverage		221,202	11.95			74,072	>	4.00			74,072	>	4.00			92,590	>	5.00
Common equity Tier 1		221,202	12.60			78,992	>	4.50			122,877	>	7.00			114,100	>	6.50
Community State Bank:
Total risk-based capital	$	114,512	11.99	%	$	76,389	>	8.00	%	$	100,261	>	10.50	%	$	95,487	>	10.00	%
Tier 1 risk-based capital		102,521	10.74			57,292	>	6.00			81,164	>	8.50			76,389	>	8.00
Tier 1 leverage		102,521	9.78			41,943	>	4.00			41,943	>	4.00			52,429	>	5.00
Common equity Tier 1		102,521	10.74			42,969	>	4.50			66,841	>	7.00			62,066	>	6.50
Springfield First Community Bank:
Total risk-based capital	$	91,663	12.60	%	$	58,189	>	8.00	%	$	76,373	>	10.50	%	$	72,736	>	10.00	%
Tier 1 risk-based capital		82,554	11.35			43,641	>	6.00			61,825	>	8.50			58,189	>	8.00
Tier 1 leverage		82,554	10.53			31,351	>	4.00			31,351	>	4.00			39,189	>	5.00
Common equity Tier 1		82,554	11.35			32,731	>	4.50			50,915	>	7.00			47,278	>	6.50


										For Capital					To Be Well
										Adequacy Purposes					Capitalized Under
					For Capital					With Capital					Prompt Corrective
	Actual				Adequacy Purposes					Conservation Buffer					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio		Amount			Ratio
As of December 31, 2020:
Company:
Total risk-based capital	$	721,004	14.95	%	$	385,832	>	8.00	%	$	506,404	>	10.50	%	$	482,290	>	10.00	%
Tier 1 risk-based capital		546,729	11.34			289,374	>	6.00			409,946	>	8.50			385,832	>	8.00
Tier 1 leverage		546,729	9.49			230,345	>	4.00			230,345	>	4.00			287,931	>	5.00
Common equity Tier 1		508,736	10.55			217,030	>	4.50			337,603	>	7.00			313,488	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	213,608	12.24	%	$	139,581	>	8.00	%	$	183,200	>	10.50	%	$	174,477	>	10.00	%
Tier 1 risk-based capital		191,693	10.99			104,686	>	6.00			148,305	>	8.50			139,581	>	8.00
Tier 1 leverage		191,693	8.48			90,430	>	4.00			90,430	>	4.00			113,038	>	5.00
Common equity Tier 1		191,693	10.99			78,514	>	4.50			122,134	>	7.00			113,410	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	217,227	13.14	%	$	132,269	>	8.00	%	$	173,603	>	10.50	%	$	165,336	>	10.00	%
Tier 1 risk-based capital		196,438	11.88			99,202	>	6.00			140,536	>	8.50			132,269	>	8.00
Tier 1 leverage		196,438	10.01			78,535	>	4.00			78,535	>	4.00			98,169	>	5.00
Common equity Tier 1		196,438	11.88			74,401	>	4.50			115,735	>	7.00			107,469	>	6.50
Community State Bank:
Total risk-based capital	$	108,040	12.69	%	$	68,117	>	8.00	%	$	89,404	>	10.50	%	$	85,146	>	10.00	%
Tier 1 risk-based capital		97,350	11.43			51,088	>	6.00			72,374	>	8.50			68,117	>	8.00
Tier 1 leverage		97,350	10.27			37,930	>	4.00			37,930	>	4.00			47,412	>	5.00
Common equity Tier 1		97,350	11.43			38,316	>	4.50			59,602	>	7.00			55,345	>	6.50
Springfield First Community Bank:
Total risk-based capital	$	90,334	14.35	%	$	50,357	>	8.00	%	$	66,094	>	10.50	%	$	62,947	>	10.00	%
Tier 1 risk-based capital		77,668	12.34			37,768	>	6.00			53,505	>	8.50			50,357	>	8.00
Tier 1 leverage		77,668	10.87			28,575	>	4.00			28,575	>	4.00			35,719	>	5.00
Common equity Tier 1		77,668	12.34			28,326	>	4.50			44,063	>	7.00			40,915	>	6.50

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

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