XML 69 R23.htm IDEA: XBRL DOCUMENT v2.4.0.6
REGULATORY MATTERS
 12 Months Ended
Dec. 31, 2012
REGULATORY MATTERS [Abstract]  
REGULATORY MATTERS
15. REGULATORY MATTERS
 
Dividend Restrictions:
 
The approval of the Federal Reserve Board is required for a bank to pay dividends up to the Company if the total of all dividends declared in any calendar year exceeds the Bank's net income (as defined) for that year combined with its retained net income for the preceding two calendar years. Under this formula, the Bank can declare dividends in 2013 without approval of the FRB or PDB of approximately $19,165,000, plus the Bank's net income for 2013.
 
Loans:
 
The Bank is subject to regulatory restrictions which limit its ability to loan funds to the Company.  At December 31, 2012, the regulatory lending limit amounted to approximately $13,148,000.
 
Regulatory Capital Requirements:
 
Federal regulations require the Company and the Bank to maintain minimum amounts of capital. Specifically, each is required to maintain certain minimum dollar amounts and ratios of Total and Tier I capital to risk-weighted assets and of Tier I capital to average total assets.
 
In addition to the capital requirements, the Federal Deposit Insurance Corporation Improvement Act (FDICIA) established five capital categories ranging from "well capitalized" to "critically under-capitalized." Should any institution fail to meet the requirements to be considered "adequately capitalized", it would become subject to a series of increasingly restrictive regulatory actions.
 
As of December 31, 2012 and 2011, the FRB categorized the Company and the Bank as well capitalized, under the regulatory framework for prompt corrective action.  To be categorized as a well capitalized financial institution, Total risk-based, Tier I risk-based and Tier I leverage capital ratios must be at least 10%, 6% and 5%, respectively.
 
The following table reflects the Company's capital ratios at December 31 (dollars in thousands):
 
 
 
2012
 
 
2011
 
Total capital (to risk-weighted assets)
 
Amount
 
 
Ratio
 
 
Amount
 
 
Ratio
 
Company
 
$
90,889
 
 
 
17.50
%
 
$
82,050
 
 
 
16.23
%
For capital adequacy purposes
 
 
41,546
 
 
 
8.00
%
 
 
40,432
 
 
 
8.00
%
To be well capitalized
 
 
51,932
 
 
 
10.00
%
 
 
50,540
 
 
 
10.00
%
Tier I capital (to risk-weighted assets)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company
 
$
84,166
 
 
 
16.21
%
 
$
75,541
 
 
 
14.95
%
For capital adequacy purposes
 
 
20,773
 
 
 
4.00
%
 
 
20,216
 
 
 
4.00
%
To be well capitalized
 
 
31,159
 
 
 
6.00
%
 
 
30,324
 
 
 
6.00
%
Tier I capital (to average assets)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Company
 
$
84,166
 
 
 
9.70
%
 
$
75,541
 
 
 
8.83
%
For capital adequacy purposes
 
 
34,692
 
 
 
4.00
%
 
 
34,223
 
 
 
4.00
%
To be well capitalized
 
 
43,366
 
 
 
5.00
%
 
 
42,779
 
 
 
5.00
%
 
The following table reflects the Bank's capital ratios at December 31 (dollars in thousands):
 
 
 
2012
 
 
2011
 
Total capital (to risk-weighted assets)
 
Amount
 
 
Ratio
 
 
Amount
 
 
Ratio
 
Bank
 
$
87,215
 
 
 
16.84
%
 
$
77,051
 
 
 
15.29
%
For capital adequacy purposes
 
 
41,425
 
 
 
8.00
%
 
 
40,326
 
 
 
8.00
%
To be well capitalized
 
 
51,781
 
 
 
10.00
%
 
 
50,408
 
 
 
10.00
%
Tier I capital (to risk-weighted assets)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bank
 
$
80,702
 
 
 
15.59
%
 
$
70,729
 
 
 
14.03
%
For capital adequacy purposes
 
 
20,713
 
 
 
4.00
%
 
 
20,163
 
 
 
4.00
%
To be well capitalized
 
 
31,069
 
 
 
6.00
%
 
 
30,245
 
 
 
6.00
%
Tier I capital (to average assets)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Bank
 
$
80,702
 
 
 
9.32
%
 
$
70,729
 
 
 
8.28
%
For capital adequacy purposes
 
 
34,634
 
 
 
4.00
%
 
 
34,166
 
 
 
4.00
%
To be well capitalized
 
 
43,293
 
 
 
5.00
%
 
 
42,708
 
 
 
5.00
%
 
This annual report has not been reviewed, or confirmed for accuracy or relevance, by the Federal Deposit Insurance Corporation.