Regulatory Capital

12 Months Ended

Dec. 31, 2013

Banking And Thrift [Abstract]

Regulatory Capital

NOTE 22. REGULATORY CAPITAL

The Company and the Bank are subject to various regulatory capital requirements administered by the federal and state 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 and the regulatory framework for prompt corrective action, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of their assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.

The capital amounts and the Bank’s prompt corrective action classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies. 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 total and Tier 1 capital (as defined in the regulations) to risk-weighted assets and of Tier 1 capital to average assets. Management believes as of December 31, 2013 that the Company and the Bank met all capital adequacy requirements to which they are subject.

As of December 31, 2013, the most recent notification from the FDIC categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the following table. There are no conditions or events since that notification that management believes have changed the Bank’s category. The Company’s and the Bank’s actual capital amounts and ratios as of December 31, 2013 and 2012 are presented in the following table.

(Dollars in thousands)	Actual					For Capital Adequacy Purposes					To be Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
At December 31, 2013:
Company
Leverage capital (to average assets)	$	120,661		12.80	%	$	37,720		4.00	%		n/a		n/a
Tier 1 capital (to risk-weighted assets)	$	120,661		15.94	%	$	30,280		4.00	%		n/a		n/a
Total capital (to risk-weighted assets)	$	130,191		17.20	%	$	60,559		8.00	%		n/a		n/a
Bank
Leverage capital (to average assets)	$	117,354		12.49	%	$	37,595		4.00	%	$	46,994		5.00	%
Tier 1 capital (to risk-weighted assets)	$	117,354		15.56	%	$	30,173		4.00	%	$	45,260		6.00	%
Total capital (to risk-weighted assets)	$	126,850		16.82	%	$	60,347		8.00	%	$	75,433		10.00	%
At December 31, 2012:
Company
Leverage capital (to average assets)	$	125,935		13.13	%	$	38,354		4.00	%		n/a		n/a
Tier 1 capital (to risk-weighted assets)	$	125,935		14.53	%	$	34,664		4.00	%		n/a		n/a
Total capital (to risk-weighted assets)	$	136,777		15.78	%	$	69,329		8.00	%		n/a		n/a
Bank
Leverage capital (to average assets)	$	121,325		12.65	%	$	38,354		4.00	%	$	47,943		5.00	%
Tier 1 capital (to risk-weighted assets)	$	121,325		14.06	%	$	34,518		4.00	%	$	51,777		6.00	%
Total capital (to risk-weighted assets)	$	132,122		15.31	%	$	69,036		8.00	%	$	86,295		10.00	%

The principal sources of cash for the Holding Company are dividends from the Bank. Dividends from the Bank to the Holding Company are restricted under California law to the lesser of the Bank’s retained earnings or the Bank’s net income for the latest three fiscal years, less dividends previously declared during that period, or, with the approval of the California Superintendent of Banks, to the greater of the retained earnings of the Bank, the net income of the Bank for its last fiscal year, or the net income of the Bank for its current fiscal year. As of December 31, 2013, the maximum amount available for dividend distribution under this restriction was approximately $6,319,363.

The Bank is subject to certain restrictions under the Federal Reserve Act, including restrictions on the extension of credit to affiliates. In particular, it is prohibited from lending to an affiliated company unless the loans are secured by specific types of collateral. Such secured loans and other advances from the subsidiaries are limited to 10% of the Bank’s Tier 1 and Tier 2 capital.