Regulatory Matters

12 Months Ended

Dec. 31, 2011

Regulatory Matters

Note 11: Regulatory Matters

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 and the Bank’s 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 assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, the Company and the Bank’s regulators could require adjustments to regulatory capital not reflected in these financial statements.

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 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). Management believes, as of December 31, 2011, that the Company and the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2011, the most recent notification from 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 capital ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the Bank’s category.

The Company’s and Bank’s actual capital amounts and ratios are presented in the following table.

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
As of December 31, 2011
Total Capital (to Risk-Weighted Assets)
Consolidated	$	42,176		14.0	%	$	24,172		8.0	%	$	N/A		N/A
Citizens		40,387		13.4			24,120		8.0			30,150		10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	$	39,250		13.0	%	$	12,086		4.0	%	$	N/A		N/A
Citizens		37,461		12.4			12,060		4.0			18,090		6.0	%
Tier I Capital (to Average Assets)
Consolidated	$	39,250		9.3	%	$	16,972		4.0	%	$	N/A		N/A
Citizens		37,461		9.0			16,623		4.0			20,779		5.0	%
As of December 31, 2010
Total Capital (to Risk-Weighted Assets)
Consolidated	$	41,672		13.9	%	$	24,052		8.0	%	$	N/A		N/A
Citizens		40,049		13.3			24,022		8.0			30,028		10.0	%
Tier I Capital (to Risk-Weighted Assets)
Consolidated	$	38,932		13.0	%	$	12,026		4.0	%	$	N/A		N/A
Citizens		37,309		12.4			12,011		4.0			18,017		6.0	%
Tier I Capital (to Average Assets)
Consolidated	$	38,932		8.7	%	$	17,891		4.0	%	$	N/A		N/A
Citizens		37,309		8.6			17,392		4.0			21,740		5.0	%