Note 17 - Regulatory Matters

3 Months Ended

Mar. 31, 2015

Disclosure Text Block [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

17. REGULATORY MATTERS

The Company and the Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. The Office of the Comptroller of the Currency (“OCC”) is the primary regulator for the Bank. The Federal Reserve Bank is the primary regulator for the Company. Failure to meet minimum capital requirements can result in certain mandatory—and possible additional discretionary—actions by regulators that, if undertaken, could have a direct and material effect on the Company’s or the Bank’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’s and the Bank’s 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 Bank to maintain minimum amounts and ratios (set forth in the following table) of tier 1 capital (as defined by regulation) to average assets (as defined by regulation) and common equity tier 1 capital, tier 1 capital and total capital (as defined by regulation) to risk-weighted assets (as defined by regulation). Management believes that the Company and the Bank meet all capital adequacy requirements to which they are subject.

As of the most recent notification from regulatory authorities, the Company and the Bank were categorized as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Bank must maintain minimum ratios as set forth in the table below. There are no conditions or events since that notification that management believes have changed any of the Bank’s categorizations.

The actual and required capital amounts (in thousands) and ratios of the Company (Consolidated) and the Bank as of March 31, 2015 are presented in the following table:

											To be Categorized
											as Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tier 1 Capital to Adjusted Average Assets
Consolidated	$	131,131		8.96	%	$	58,531		4.00	%	$	73,164		5.00	%
Bear State		148,052		10.12	%		58,542		4.00	%		73,177		5.00	%
Common Equity Tier 1 to Risk-Weighted Assets
Consolidated	$	131,131		11.39	%	$	51,817		4.50	%	$	74,847		6.50	%
Bear State		148,052		12.86	%		51,787		4.50	%		74,803		6.50	%
Tier I Capital to Risk-Weighted Assets
Consolidated	$	131,131		11.39	%	$	69,090		6.00	%	$	92,119		8.00	%
Bear State		148,052		12.86	%		69,049		6.00	%		92,065		8.00	%
Total Capital to Risk-Weighted Assets
Consolidated	$	144,893		12.58	%	$	92,119		8.00	%	$	115,149		10.00	%
Bear State		161,814		14.06	%		92,065		8.00	%		115,082		10.00	%

The actual and required capital amounts (in thousands) and ratios of the Company (Consolidated) and First Federal Bank (“First Federal”), First National Bank (“FNB”) and Heritage Bank (“Heritage”) as of December 31, 2014 are presented in the following table:

											To be Categorized
											as Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tangible Capital to Tangible Assets
First Federal	$	54,215		9.21	%	$	8,825		1.50	%	N/A		N/A
Tier 1 Capital to Average Assets
Consolidated	$	122,537		8.29	%	$	59,146		4.00	%	N/A		N/A
First Federal (1)		54,215		9.21	%		23,534		4.00	%	$	29,417		5.00	%
FNB		56,245		9.40	%		17,951		3.00	%		29,919		5.00	%
Heritage		29,086		9.76	%		11,925		4.00	%		14,906		5.00	%
Tier I Capital to Risk-Weighted Assets
Consolidated	$	122,537		10.89	%	$	45,001		4.00	%	N/A		N/A
First Federal		54,215		11.42	%	N/A		N/A			$	28,488		6.00	%
FNB		56,245		13.14	%		17,117		4.00	%		25,675		6.00	%
Heritage		29,086		13.35	%		8,716		4.00	%		13,074		6.00	%
Total Capital to Risk-Weighted Assets
Consolidated	$	136,197		12.11	%	$	90,002		8.00	%	N/A		N/A
First Federal		60,226		12.68	%		37,984		8.00	%	$	47,480		10.00	%
FNB		57,100		13.34	%		34,234		8.00	%		42,792		10.00	%
Heritage		29,786		13.67	%		17,432		8.00	%		21,790		10.00	%

(1) In the case of First Federal, the ratio is calculated based on adjusted assets at period end.

Dividends. The Company may not declare or pay cash dividends on its shares of common stock if the effect thereof would cause the Company’s stockholders’ equity to be reduced below applicable regulatory capital maintenance requirements for insured institutions or below the special liquidation account established by the Company in connection with First Federal’s conversion from the mutual holding company structure on May 3, 1996. In addition, federal regulations, as currently applied to the Bank, impose limitations upon payment of capital distributions to the Company. No dividends were available for distribution at March 31, 2015, without prior regulatory approval.

The principal source of the Company’s revenues is dividends from the Bank. Our ability to pay dividends to our stockholders depends to a large extent upon the dividends we receive from the Bank.

On October 22, 2014, the Company’s Board of Directors declared an 11% stock dividend per common share payable on December 15, 2014, to stockholders of record at the close of business on December 1, 2014. Stockholders received 1 additional share of Company common stock for every 9 shares owned. They also received the cash equivalent of any fractional shares to which they were entitled, since no fractional shares were issued.

Repurchase Program. During the first quarter of 2015, the Company repurchased 2,100 shares of its common stock under a share repurchase program that was approved by the Board of Directors on March 13, 2015, whereby the Company is permitted to repurchase up to $1 million of its common stock. The 2015 repurchase program will expire March 13, 2016 and can be renewed annually by the Board of Directors.