Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2013

Banking And Thrift [Abstract]

Regulatory Capital Requirements

10 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 financial statements of the Company and the Bank. 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. Quantitative measures established by regulation to ensure capital adequacy require the Company and HVB to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined).

Capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prior to October 31, 2013, due to the concentration of commercial real estate loans in our portfolio, the OCC required HVB to maintain a total risk-based capital ratio of at least 12.0 percent (compared to 10.0 percent for a well capitalized bank), a Tier 1 risk-based capital ratio of at least 10.0 percent (compared to 6.0 percent for a well capitalized bank), and a Tier 1 leverage ratio of at least 8.0 percent (compared to 5.0 percent for a well capitalized bank). In October 2013, this requirement was terminated.

The following summarizes the capital requirements and capital position at December 31, 2013 and 2012:

	Actual					Minimum for Capital Adequacy					Minimum to be Well Capitalized Under Prompt Corrective Action
Capital Ratios:	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
HVB Only:
December 31, 2013
Total Capital (To Risk Weighted Assets)	$	295,940		17.1	%	$	138,533		8.0	%	$	173,167		10.0	%
Tier 1 Capital (To Risk Weighted Assets)		274,239		15.8	%		69,267		4.0	%		103,900		6.0	%
Tier 1 Capital (To Average Assets)		274,239		9.3	%		118,062		4.0	%		147,578		5.0	%
December 31, 2012
Total Capital (To Risk Weighted Assets)	$	281,681		17.4	%	$	129,152		8.0	%	$	161,439		10.0	%
Tier 1 Capital (To Risk Weighted Assets)		261,421		16.2	%		64,576		4.0	%		96,864		6.0	%
Tier 1 Capital (To Average Assets)		261,421		9.2	%		114,100		4.0	%		142,625		5.0	%
Consolidated:
December 31, 2013
Total Capital (To Risk Weighted Assets)	$	303,059		17.5	%	$	138,843		8.0	%
Tier 1 Capital (To Risk Weighted Assets)		281,310		16.2	%		69,422		4.0	%
Tier 1 Capital (To Average Assets)		281,310		9.5	%		118,257		4.0	%
December 31, 2012
Total Capital (To Risk Weighted Assets)	$	286,436		17.7	%	$	129,318		8.0	%
Tier 1 Capital (To Risk Weighted Assets)		266,150		16.5	%		64,659		4.0	%
Tier 1 Capital (To Average Assets)		266,150		9.3	%		114,259		4.0	%

Management believes, as of December 31, 2013, that the Bank had capital in excess of the minimum level required to meet the definition of “well capitalized”. At December 31, 2012, the Company and the Bank met all capital adequacy requirements to which they were subject.

In addition, pursuant to Rule 15c3-1 of the Securities and Exchange Commission, ARS as a broker-dealer is required to maintain minimum “net capital” as defined under such rule. As of December 31, 2013 and 2012, ARS exceeded its minimum capital requirement.