REGULATORY CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2014

Regulatory Capital Requirements [Abstract]

REGULATORY CAPITAL REQUIREMENTS

14. Regulatory Capital Requirements

Current quantitative measures established by regulation to ensure capital adequacy require that we maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulation) to risk-weighted assets (as defined) and to average assets. We believe, as of December 31, 2014, that the Company and the Bank meet all capital adequacy requirements to which they are subject.

At December 31, 2014 and 2013, 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 Company and the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios of 10%, 6% and 5%, respectively, and to be categorized as “adequately capitalized,” the Company and the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios of 8%, 4%, and 4%, respectively. There are no current conditions or events that management believes would change the Company’s or the Bank’s category.

	December 31, 2014
			Actual					For Capital Adequacy Purposes			To Be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in Thousands)			Amount		Ratio			Amount	Ratio		Amount		Ratio
Total capital to risk-weighted assets:
Company		$		38,752	14.98	%	$	20,694	8.00	%	$	N/A	N/A
Bank		$		38,459	14.88	%	$	20,676	8.00	%	$	25,845	10.00	%
Tier 1 capital to risk-weighted assets:
Company		$		35,517	13.73	%	$	10,347	4.00	%	$	N/A	N/A
Bank		$		35,227	13.63	%	$	10,338	4.00	%	$	15,507	6.00	%
Tier 1 capital to average assets:
Company		$		35,517	9.44	%	$	15,042	4.00	%	$	N/A	N/A
Bank		$		35,227	9.37	%	$	15,033	4.00	%	$	18,792	5.00	%

	December 31, 2013
			Actual					For Capital Adequacy Purposes			To Be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in Thousands)			Amount		Ratio			Amount	Ratio		Amount		Ratio
Total capital to risk-weighted assets:
Company		$		36,932	14.67	%	$	20,140	8.00	%	$	N/A	N/A
Bank		$		36,653	14.57	%	$	20,126	8.00	%	$	25,157	10.00	%
Tier 1 capital to risk-weighted assets:
Company		$		33,783	13.42	%	$	10,070	4.00	%	$	N/A	N/A
Bank		$		33,506	13.32	%	$	10,063	4.00	%	$	15,094	6.00	%
Tier 1 capital to average assets:
Company		$		33,783	9.81	%	$	13,799	4.00	%	$	N/A	N/A
Bank		$		33,506	9.73	%	$	13,772	4.00	%	$	17,215	5.00	%

On July 2, 2013, the Federal Reserve Board approved the final rules implementing the Basel Committee on Banking Supervision’s (“BCBS”) capital guidelines for US banks. Under the final rules, minimum requirements will increase for our quantity and quality of the capital. The rules include a new common equity Tier 1 capital to risk-weighted assets ratio of 4.5% and a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets. The final rule also raises the minimum ratio of Tier 1 capital to risk-weighted assets from 4% to 6% and requires a minimum leverage ratio of 4%. The final rule also implements strict eligibility criteria for regulatory capital instruments and improves the methodology for calculating risk-weighted assets to enhance risk sensitivity.

On July 9, 2013 the FDIC also approved, as an interim final rule, the regulatory capital requirements for US banks, following the actions of the Federal Reserve Bank. The FDIC’s rule is identical in substance to the final rules issued by the Federal Reserve Bank.

The phase-in-period for the final rules will begin on January 1, 2015, with full compliance with all of the final rule requirements phased in over a multi-year schedule. Management believes that as of December 31, 2014, the Company and the Bank would remain “well capitalized” under the new rules.