Note 11 - Regulatory Restrictions

9 Months Ended

Sep. 30, 2015

Disclosure Text Block [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

11. REGULATORY RESTRICTIONS

Dividends payable by the Company and the Bank are subject to various limitations imposed by statutes, regulations and policies adopted by both State and Federal 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 bank regulatory agencies. Failure to meet minimum capital requirements can initiate actions by regulators that could have an effect on the financial statements and the amount of dividens that can be paid to shareholders. 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, 2015, that the Company and the Bank met capital adequacy requirements to which they were subject.

The Bank is presently considered it to be “well capitalized” under the regulatory framework. To be categorized as well capitalized, the Company and the Bank must maintain minimum ratios as set forth in the following table.

	Capital levels
	Actual					Minimum required					Well capitalized
As of September 30, 2015	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (to risk-weighted assets):
Consolidated	$	97,163		13.01	%	$	59,765		8.00	%	$	74,706		10.00	%
Bank		89,971		12.40			58,057		8.00			72,571		10.00
Tier I capital (to risk-weighted assets):
Consolidated		89,435		11.97			44,824		6.00			44,824		6.00
Bank		82,243		11.33			43,543		6.00			58,057		8.00
Common equity tier 1 capital (to risk-weighted assets):
Consolidated		89,435		11.97			33,618		4.50			N/A		N/A
Bank		82,243		11.33			32,657		4.50			47,171		6.50
Tier I capital (to average assets):
Consolidated		89,435		8.99			39,811		4.00			N/A		N/A
Bank		82,243		8.32			39,522		4.00			49,403		5.00

	Capital levels
	Actual					Adequately capitalized					Well capitalized
As of December 31, 2014	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total risk-based capital (to risk-weighted assets):
Consolidated	$	93,927		14.06	%	$	53,425		8.00	%		N/A		N/A
Bank		86,884		13.14			52,891		8.00		$	66,114		10.00	%
Tier I capital (to risk-weighted assets):
Consolidated		85,439		12.79			26,713		4.00			N/A		N/A
Bank		78,824		11.92			26,446		4.00			39,669		6.00
Tier I capital (to average assets):
Consolidated		85,439		8.65			39,501		4.00			N/A		N/A
Bank		78,824		8.04			39,237		4.00			49,047		5.00