REGULATORY CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2015

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 consolidated 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.

Capital adequacy guidelines have recently changed as a result of the Dodd-Frank Act and a separate, international capital initiative known as “Basel III.” Regulators have issued rules implementing these requirements (“Revised Capital Rules”). Among other things, the Revised Capital Rules raise the minimum thresholds for required capital and revise certain aspects of the definitions and elements of the capital that can be used to satisfy these required minimum thresholds. While the rules became effective on January 1, 2014 for certain large banking organizations, most banking organizations, including MVB Financial Corp and the Bank, were required to begin complying with these new requirements on January 1, 2015. 

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of Total capital, Tier I capital and Tier I common equity to risk-weighted assets, and of Tier I capital to average assets, as defined.  As of December 31, 2015 and 2014, 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, Tier 1 common equity 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, 2015
Total Capital (to risk-weighted assets)
Consolidated	$	140,376	13.0	%		N/A	N/A		$	86,357	8.0	%
Subsidiary Bank	$	132,013	12.3	%	$	107,518	10.0	%	$	86,014	8.0	%
Tier I Capital (to risk-weighted assets)
Consolidated	$	102,952	9.5	%		N/A	N/A		$	64,768	6.0	%
Subsidiary Bank	$	123,989	11.5	%	$	86,014	8.0	%	$	64,511	6.0	%
Common Equity Tier I Capital (to risk-weighted assets)
Consolidated	$	82,494	7.6	%		N/A	N/A		$	48,576	4.5	%
Subsidiary Bank	$	123,989	11.5	%	$	69,887	6.5	%	$	48,383	4.5	%
Tier I Capital (to average assets)
Consolidated	$	102,952	7.8	%		N/A	N/A		$	53,023	4.0	%
Subsidiary Bank	$	123,989	9.5	%	$	65,238	5.0	%	$	52,191	4.0	%
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	%