Regulatory Capital Requirements
The Company (on a consolidated basis) and the Bank are subject to various regulatory
requirements administered by the federal banking agencies.
Failure to meet minimum capital requirements can initiate certain
mandatory and possible additional discretionary actions by regulators that,
if undertaken, could have a direct material effect on
the Company and Bank’s financial statements.
the Company and 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.
Prompt corrective action provisions are not applicable to bank holding
A detailed description of these regulatory
capital requirements is provided in the section captioned “Regulatory
Considerations – Capital Regulations” section on page 15.
Management believes, at December 31, 2021 and 2020, that the Company
and the Bank meet all capital adequacy requirements to
which they are subject.
At December 31, 2021, the most recent notification from the Federal Deposit Insurance
categorized the Bank as well capitalized under the regulatory framework for prompt
To be categorized as well
capitalized, an institution must maintain minimum common equity
Tier 1, total risk-based, Tier
1 risk based and Tier 1 leverage
ratios as set forth in the following tables.
There are not conditions or events since the notification that management believes have
changed the Bank’s category.
The Company and Bank’s actual capital
amounts and ratios at December 31, 2021 and 2020 are
presented in the following table.
In the ordinary course of business, the Company is dependent upon dividends
from its banking subsidiary
to provide funds for the payment of dividends to shareowners and to provide
for other cash requirements.
may limit the amount of dividends that may be paid.
Approval by regulatory authorities is required if the effect of dividends
declared would cause the regulatory capital of the Company’s
banking subsidiary to fall below specified minimum levels.
Approval is also required if dividends declared exceed the net profits of
the banking subsidiary for that year combined with the
retained net profits for proceeding two years.
In 2022, the bank subsidiary may declare dividends without regulatory approval
million plus an additional amount equal to net profits of the Company’s
subsidiary bank for 2022 up to the date of any such