CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2014

CAPITAL REQUIREMENTS

CAPITAL REQUIREMENTS

NOTE 19 — CAPITAL REQUIREMENTS

The Company and the Bank are 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 financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  The Company and Bank capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios (set forth in the following table) of Total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital to average assets (as defined).  Management believes, as of December 31, 2014 and 2013, that the Company and the Bank meet all capital adequacy requirements to which they are subject.

The most recent notification from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action.  To be categorized as well capitalized, the Bank must maintain minimum Total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the following table.  There are no conditions or events since that notification that management believes have changed the institution’s category.

The Company’s and the Bank’s actual amounts and ratios are presented in the table below:

										To Be Well
										Capitalized
										Under Prompt
				For Capital						Corrective
	Actual				Adequacy Purposes					Action Provisions
	Amount		Ratio		Amount			Ratio		Amount		Ratio
	(Dollars in Thousands)
2014
Consolidated
Total Capital (to Risk-Weighted Assets)	$	77,016	13.1	%		$	47,208	8	%	N/A		N/A
Tier I Capital (to Risk-Weighted Assets)	70,917		12.0			23,604		4		N/A		N/A
Tier I Capital (to Average Assets)	70,917		8.7			32,497		4		N/A		N/A
Bank Only
Total Capital (to Risk-Weighted Assets)	$	74,575	12.6	%		$	47,184	8	%	$	58,980	10	%
Tier I Capital (to Risk-Weighted Assets)	68,476		11.6			23,592		4		35,388		6
Tier I Capital (to Average Assets)	68,476		8.4			32,442		4		40,553		5
2013
Consolidated
Total Capital (to Risk-Weighted Assets)	$	71,993	14.1	%		$	40,872	8	%	N/A		N/A
Tier I Capital (to Risk-Weighted Assets)	66,468		13.0			20,436		4		N/A		N/A
Tier I Capital (to Average Assets)	66,468		8.8			30,079		4		N/A		N/A
Bank Only
Total Capital (to Risk-Weighted Assets)	$	70,827	13.9	%		$	40,859	8	%	$	51,073	10	%
Tier I Capital (to Risk-Weighted Assets)	65,302		12.8			20,429		4		30,644		6
Tier I Capital (to Average Assets)	65,302		8.7			30,070		4		37,588		5