Regulatory Capital

6 Months Ended

Jun. 30, 2016

Regulatory Capital Requirements [Abstract]

Regulatory Capital

Regulatory Capital

Under federal banking regulations that apply to all United States based bank holding companies and federally insured banks, the Company (on a consolidated basis) and the Bank (on a stand-alone basis) must meet specific capital adequacy requirements that, for the most part, involve quantitative measures, primarily in terms of the ratios of their capital to their assets, liabilities, and certain off-balance sheet items, calculated under regulatory accounting practices. Under those regulations, each bank holding company must meet a minimum capital ratio and each federally insured bank is determined by its primary federal bank regulatory agency to come within one of the following capital adequacy categories on the basis of its capital ratios:

• well capitalized

• adequately capitalized

• undercapitalized

• significantly undercapitalized; or

• critically undercapitalized

Certain qualitative assessments also are made by a banking institution’s primary federal regulatory agency that could lead the agency to determine that the banking institution should be assigned to a lower capital category than the one indicated by the quantitative measures used to assess the institution’s capital adequacy. At each successive lower capital category, a banking institution is subject to greater operating restrictions and increased regulatory supervision by its federal bank regulatory agency.

The following table sets forth the capital and capital ratios of the Company (on a consolidated basis) and the Bank (on a stand-alone basis) at June 30, 2016, as compared to the respective regulatory requirements applicable to them.

					Applicable Federal Regulatory Requirement
					For Capital Adequacy Purposes			To be Categorized As Well Capitalized
	Amount		Ratio		Amount		Ratio	Amount		Ratio
	(Dollars in thousands)
Total Capital to Risk Weighted Assets:
Company	$	148,592	15.0	%	$	79,034	At least 8.0	N/A		N/A
Bank	130,121		13.5	%	77,180		At least 8.0	$	96,475	At least 10.0
Common Equity Tier 1 Capital to Risk Weighted Assets:
Company	$	123,818	12.5	%	$	44,457	At least 4.5	N/A		N/A
Bank	117,942		12.2	%	43,414		At least 4.5	$	62,709	At least 6.5
Tier 1 Capital to Risk Weighted Assets:
Company	$	136,126	13.8	%	$	59,275	At least 6.0	N/A		N/A
Bank	117,942		12.2	%	57,885		At least 6.0	$	77,180	At least 8.0
Tier 1 Capital to Average Assets:
Company	$	136,126	12.4	%	$	43,970	At least 4.0	N/A		N/A
Bank	117,942		10.9	%	43,369		At least 4.0	$	54,211	At least 5.0

In early July 2013, the Federal Reserve Board and the FDIC issued final rules implementing the Basel III regulatory capital framework and related Dodd-Frank Wall Street Reform and Consumer Protection Act changes.  The rules revise minimum capital requirements and adjust prompt correct action thresholds.  The final rules revise the regulatory capital elements, add a new common equity Tier 1 capital ratio, increase the minimum Tier 1 capital ratio requirement, and implement a new capital conservation buffer.  The rules also permit certain banking organizations to retain, through a one-time election, the existing treatment for accumulated other comprehensive income.  The final rules took effect for community banks on January 1, 2015, subject to a transition period for certain parts of the rules.  At June 30, 2016, the Bank (on a stand-alone basis) continued to qualify as a well-capitalized institution, and the Company continued to exceed the minimum required capital ratios applicable to it, under the capital adequacy guidelines described above.