REGULATORY CAPITAL

6 Months Ended

Jun. 30, 2023

10. REGULATORY CAPITAL

The Bank is subject to various regulatory capital 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’s consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities, and certain off-balance-sheet items, as calculated under regulatory accounting practices.

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 Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, total and Tier 1 capital to risk-weighted assets, and Tier 1 capital to average assets, as defined in the regulations. As of June 30, 2023, and December 31, 2022, the Bank exceeded all capital adequacy requirements to which it was subject (see tables below). There were no conditions or events since June 30, 2023 that management believes have changed the Bank’s capital ratings.

The following table presents the Bank’s actual capital positions and ratios at the dates indicated:

											To be Well					To be Well
											Capitalized Under					Capitalized With
						Minimum Capital					Prompt Corrective					Capital Conservation
	Actual					Requirements					Action Provisions					Buffer
	Amount		Ratio			Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in Thousands)

June 30, 2023

Tangible Capital	$	13,414		16.46	%	$	1,222		1.50	%		N/A		N/A			N/A		N/A
Total Risked-based Capital		13,534		29.41	%		4,831		10.50	%	$	4,601		10.00	%	$	4,831		10.50	%
Common Equity Tier 1 Capital		13,414		29.15	%		3,221		7.00	%		2,991		6.50	%		3,221		7.00	%
Tier 1 Risk-based Capital		13,414		29.15	%		3,911		8.50	%		3,681		8.00	%		3,911		8.50	%
Tier 1 Leverage Capital		13,414		16.46	%		3,259		4.00	%		4,074		5.00	%		N/A		N/A

December 31, 2022

Tangible Capital	$	11,278		13.04	%	$	1,298		1.50	%		N/A		N/A			N/A		N/A
Total Risked-based Capital		11,357		24.67	%		4,834		10.50	%	$	4,604		10.00	%	$	4,834		10.50	%
Common Equity Tier 1 Capital		11,278		24.50	%		3,223		7.00	%		2,992		6.50	%		3,223		7.00	%
Tier 1 Risk-based Capital		11,278		24.50	%		3,913		8.50	%		3,683		8.00	%		3,913		8.50	%
Tier 1 Leverage Capital		11,278		13.04	%		3,460		4.00	%		4,325		5.00	%		N/A		N/A

- 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.

+ References + Details

VECTA INC. 10-Q