Regulatory Restrictions

9 Months Ended

Sep. 30, 2012

Regulatory Restrictions [Abstract]

REGULATORY RESTRICTIONS

11. REGULATORY RESTRICTIONS

Dividends payable by the Company and the Bank are subject to various limitations imposed by statutes, regulations and policies adopted by bank regulatory agencies. Under Pennsylvania banking law, the Bank is subject to certain restrictions on the amount of dividends that it may declare without prior regulatory approval. Under Federal Reserve regulations, the Bank is limited as to the amount it may lend affiliates, including QNB Corp., unless such loans are collateralized by specific obligations.

Both the Company and the Bank are subject to regulatory capital requirements administered by Federal banking agencies. Failure to meet minimum capital requirements can initiate actions by regulators that could have an effect on the financial statements. Under the framework for prompt corrective action, both the Company and the Bank must meet capital guidelines that involve quantitative measures of their assets, liabilities, and certain off-balance-sheet items. The capital amounts and classification are also subject to qualitative judgments by the regulators. Management believes, as of September 30, 2012, that the Company and the Bank met capital adequacy requirements to which they were subject.

As of the most recent notification, the primary regulator of the Bank considered it to be "well capitalized" under the regulatory framework. There are no conditions or events since that notification that management believes have changed the classification. To be categorized as well capitalized, the Company and the Bank must maintain minimum ratios as set forth in the table below.

The Company and the Bank's actual capital amounts and ratios are presented as follows:

	Capital Levels
	Actual		Adequately capitalized		Well capitalized
As of September 30, 2012	Amount	Ratio	Amount	Ratio	Amount	Ratio
Total Risk-Based Capital (to Risk Weighted Assets)
Consolidated	$79,114	13.44%	$ 47,103	8.00%	N/A	N/A
Bank	74,524	12.74	46,782	8.00	$ 58,477	10.00%
Tier I Capital (to Risk Weighted Assets)
Consolidated	71,534	12.15	23,552	4.00	N/A	N/A
Bank	67,185	11.49	23,391	4.00	35,086	6.00
Tier I Capital (to Average Assets)
Consolidated	71,534	7.80	36,662	4.00	N/A	N/A
Bank	67,185	7.36	36,506	4.00	45,633	5.00

	Capital Levels
	Actual		Adequately capitalized		Well capitalized
As of December 31, 2011	Amount	Ratio	Amount	Ratio	Amount	Ratio
Total Risk-Based Capital (to Risk Weighted Assets)
Consolidated	$73,694	12.71%	$ 46,371	8.00%	N/A	N/A
Bank	69,480	12.06	46,074	8.00	$ 57,593	10.00%
Tier I Capital (to Risk Weighted Assets)
Consolidated	66,176	11.42	23,185	4.00	N/A	N/A
Bank	62,256	10.81	23,037	4.00	34,556	6.00
Tier I Capital (to Average Assets)
Consolidated	66,176	7.61	34,805	4.00	N/A	N/A
Bank	62,256	7.18	34,662	4.00	43,328	5.00