REGULATORY CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2014

REGULATORY CAPITAL REQUIREMENTS

REGULATORY CAPITAL REQUIREMENTS

NOTE 14.  REGULATORY 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 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 must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  The Company’s 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 to maintain minimum amounts and ratios of Total and Tier I capital to risk-weighted assets, and of Tier I capital to average assets, as defined.  As of December 31, 2014 and 2013, the Company meets all capital adequacy requirements to which it is 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 table below.   Both the Company’s and the Bank’s actual capital amounts and ratios are presented in the table below.

									MINIMUM
					MINIMUM				FOR CAPITAL
					TO BE WELL				ADEQUACY
	ACTUAL				CAPITALIZED				PURPOSES
(Dollars in thousands)	AMOUNT		RATIO		AMOUNT		RATIO		AMOUNT		RATIO
As of December 31, 2014
Total Capital (to risk-weighted assets)
Consolidated	$	133,780	16.4	%		N/A	N/A		$	65,249	8.0	%
Subsidiary Bank	$	124,725	15.4	%	$	81,125	10.0	%	$	64,900	8.0	%
Tier I Capital (to risk-weighted assets)
Consolidated	$	98,158	12.0	%		N/A	N/A		$	32,625	4.0	%
Subsidiary Bank	$	118,503	14.6	%	$	48,675	6.0	%	$	32,450	4.0	%
Tier I Capital (to average assets)
Consolidated	$	98,158	9.0	%		N/A	N/A		$	41,480	4.0	%
Subsidiary Bank	$	118,503	10.8	%	$	54,682	5.0	%	$	43,746	4.0	%
As of December 31, 2013
Total Capital (to risk-weighted assets)
Consolidated	$	84,361	12.9	%		N/A	N/A		$	52,175	8.0	%
Subsidiary Bank	$	86,028	13.2	%	$	65,262	10.0	%	$	52,209	8.0	%
Tier I Capital (to risk-weighted assets)
Consolidated	$	79,342	12.2	%		N/A	N/A		$	26,087	4.0	%
Subsidiary Bank	$	81,009	12.4	%	$	39,157	6.0	%	$	26,105	4.0	%
Tier I Capital (to average assets)
Consolidated	$	79,342	8.9	%		N/A	N/A		$	35,840	4.0	%
Subsidiary Bank	$	81,009	9.0	%	$	44,800	5.0	%	$	35,840	4.0	%