2021 Annual Report

of the offering exercised in full their option to purchase 360,000 additional depositary shares to cover over-allotments. As a result, the gross proceeds from the offering totaled $69.0 million. Dividends on the Series A Preferred Stock will be non-cumulative and, if declared, accrue and are payable quarterly, in arrears, at a rate of 5.875% per annum. The Series A Preferred Stock qualifies as additional Tier 1 capital for the purposes of the regulatory capital calculations. The net proceeds from the issuance and sale of the depositary shares, each representing a 1/100 th ownership interest in our Series A Preferred Stock, after deducting $2.5 million of issuance costs, including the underwriting discount and professional service fees, were $66.5 million. Note 20: Regulatory Capital The Company and the Bank are subject to various regulatory requirements administered by 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’s financial statements. Under capital adequacy guidelines, 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 Bank must also meet certain specific capital guidelines under the regulatory framework for prompt corrective action. The capital amounts and classifications 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 Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, Tier 1 capital and total capital to risk-weighted assets and of Tier 1 capital to average consolidated assets (referred to as the “leverage ratio”), as defined under the applicable regulatory capital rules. The following tables present the capital amounts and ratios for the Company, on a consolidated basis, and the Bank as of December 31, 2021 and 2020:

Minimum Required For Capital Adequacy

For Capital Adequacy Purposes Plus Capital Conservation Buffer

To be Well Capitalized Under Prompt Corrective Action Regulations

Actual

Purposes

(dollars in thousands)

Amount Ratio

Ratio Amount Ratio

Amount

Ratio

Amount

December 31, 2021 Company (Consolidated): Total Risk-based Capital. . . . . . $ 499,554 15.55 % $ 256,966 8.00 % $ 337,268 10.50 %

N/A N/A N/A N/A

N/A N/A N/A N/A

367,161 11.43 300,647 9.36 367,161 10.82

192,725 6.00 273,027 144,543 4.50 224,845 135,723 4.00 135,723

8.50 7.00 4.00

Tier 1 Risk-based Capital . . . . . Common Equity Tier 1 Capital . Tier 1 Leverage Ratio. . . . . . . .

Bank: Total Risk-based Capital. . . . . . $ 415,848 12.94 % $ 257,005 8.00 % $ 337,319 10.50 % $

321,256 257,005 208,816 169,386

10.00 %

375,688 11.69 375,688 11.69 375,688 11.09

192,754 6.00 273,068 144,565 4.50 224,879 135,508 4.00 135,508

8.50 7.00 4.00

8.00 6.50 5.00

Tier 1 Risk-based Capital . . . . . Common Equity Tier 1 Capital . Tier 1 Leverage Ratio. . . . . . . .

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