Note 10 - REGULATORY CAPITAL REQUIREMENTS

3 Months Ended

Mar. 31, 2024

Notes to Financial Statements

REGULATORY CAPITAL REQUIREMENTS

NOTE 10 – 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 the 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, Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets, each as defined by regulation.  Management believes, as of March 31, 2024 and December 31, 2023, 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 March 31, 2024 and

December 31, 2023 are presented in the following tables (dollars in thousands).  As of March 31, 2024 and December 31, 2023, each of the subsidiary banks met such capital 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
	( dollars in thousands)
As of March 31, 2024:
Company:
Total risk-based capital	$	1,181,827	14.30	%	$	660,989	>	8.00	%	$	867,548	>	10.50	%	$	826,237	>	10.00	%
Tier 1 risk-based capital		867,778	10.50			495,742	>	6.00			702,301	>	8.50			660,989	>	8.00
Tier 1 leverage		867,778	10.33			336,048	>	4.00			336,048	>	4.00			420,060	>	5.00
Common equity Tier 1		819,015	9.91			371,806	>	4.50			578,366	>	7.00			537,054	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	305,569	12.77	%	$	191,391	>	8.00	%	$	251,201	>	10.50	%	$	239,239	>	10.00	%
Tier 1 risk-based capital		275,648	11.52			143,543	>	6.00			203,353	>	8.50			191,391	>	8.00
Tier 1 leverage		275,648	11.15			98,876	>	4.00			98,876	>	4.00			123,596	>	5.00
Common equity Tier 1		275,648	11.52			107,658	>	4.50			167,467	>	7.00			155,505	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	398,654	15.53	%	$	205,302	>	8.00	%	$	269,458	>	10.50	%	$	256,627	>	10.00	%
Tier 1 risk-based capital		373,281	14.55			153,976	>	6.00			218,133	>	8.50			205,302	>	8.00
Tier 1 leverage		373,281	16.01			93,236	>	4.00			93,236	>	4.00			116,545	>	5.00
Common equity Tier 1		373,281	14.55			115,482	>	4.50			179,639	>	7.00			166,808	>	6.50
Community State Bank:
Total risk-based capital	$	175,056	12.81	%	$	109,305	>	8.00	%	$	143,463	>	10.50	%	$	136,631	>	10.00	%
Tier 1 risk-based capital		160,919	11.78			81,979	>	6.00			116,136	>	8.50			109,305	>	8.00
Tier 1 leverage		160,919	11.31			56,930	>	4.00			56,930	>	4.00			71,162	>	5.00
Common equity Tier 1		160,919	11.78			61,484	>	4.50			95,642	>	7.00			88,810	>	6.50
Guaranty Bank:
Total risk-based capital	$	273,124	13.11	%	$	166,624	>	8.00	%	$	218,694	>	10.50	%	$	208,280	>	10.00	%
Tier 1 risk-based capital		249,998	12.00			124,968	>	6.00			177,038	>	8.50			166,624	>	8.00
Tier 1 leverage		249,998	11.51			86,845	>	4.00			86,845	>	4.00			108,556	>	5.00
Common equity Tier 1		249,998	12.00			93,726	>	4.50			145,796	>	7.00			135,382	>	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
	( dollars in thousands)
As of December 31, 2023:
Company:
Total risk-based capital	$	1,171,047	14.29	%	$	655,461	>	8.00	%	$	860,293	>	10.50	%	$	819,327	>	10.00	%
Tier 1 risk-based capital		841,052	10.27			491,596	>	6.00			696,428	>	8.50			655,461	>	8.00
Tier 1 leverage		841,052	10.03			335,420	>	4.00			335,420	>	4.00			419,275	>	5.00
Common equity Tier 1		792,321	9.67			368,697	>	4.50			573,529	>	7.00			532,562	>	6.50
Quad City Bank & Trust:
Total risk-based capital	$	300,413	12.67	%	$	189,707	>	8.00	%	$	248,990	>	10.50	%	$	237,133	>	10.00	%
Tier 1 risk-based capital		270,744	11.42			142,280	>	6.00			201,563	>	8.50			189,707	>	8.00
Tier 1 leverage		270,744	11.23			96,425	>	4.00			96,425	>	4.00			120,531	>	5.00
Common equity Tier 1		270,744	11.42			106,710	>	4.50			165,993	>	7.00			154,137	>	6.50
Cedar Rapids Bank & Trust:
Total risk-based capital	$	381,514	15.60	%	$	195,687	>	8.00	%	$	256,840	>	10.50	%	$	244,609	>	10.00	%
Tier 1 risk-based capital		354,940	14.51			146,766	>	6.00			207,918	>	8.50			195,687	>	8.00
Tier 1 leverage		354,940	14.77			96,093	>	4.00			96,093	>	4.00			120,116	>	5.00
Common equity Tier 1		354,940	14.51			110,074	>	4.50			171,227	>	7.00			158,996	>	6.50
Community State Bank:
Total risk-based capital	$	171,747	13.22	%	$	103,903	>	8.00	%	$	136,372	>	10.50	%	$	129,878	>	10.00	%
Tier 1 risk-based capital		156,629	12.06			77,927	>	6.00			110,397	>	8.50			103,903	>	8.00
Tier 1 leverage		156,629	11.19			56,005	>	4.00			56,005	>	4.00			70,007	>	5.00
Common equity Tier 1		156,629	12.06			58,445	>	4.50			90,915	>	7.00			84,421	>	6.50
Guaranty Bank:
Total risk-based capital	$	267,822	12.68	%	$	168,967	>	8.00	%	$	221,770	>	10.50	%	$	211,209	>	10.00	%
Tier 1 risk-based capital		244,506	11.58			126,726	>	6.00			179,528	>	8.50			168,967	>	8.00
Tier 1 leverage		244,506	11.41			85,688	>	4.00			85,688	>	4.00			107,110	>	5.00
Common equity Tier 1		244,506	11.58			95,044	>	4.50			147,847	>	7.00			137,286	>	6.50