REGULATORY MATTERS

6 Months Ended

Jun. 30, 2011

Regulatory Capital Requirements Under Banking Regulations [Abstract]

REGULATORY MATTERS

NOTE 12 - REGULATORY MATTERS

     The Bank and the Company 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.  The regulations require the Bank and the Company to meet specific capital adequacy guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices.  The capital classification is also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

     Quantitative measures established by regulation to ensure capital adequacy require the maintenance of minimum amounts and ratios (set forth in the tables below) of Tier 1 capital to adjusted total assets (Leverage Capital ratio) and minimum ratios of Tier 1 and total capital to risk-weighted assets.  To be considered adequately capitalized under the regulatory framework for prompt corrective action, the Company and the Bank must maintain minimum Tier 1 leverage, Tier 1 risk-based and total risked-based ratios as set forth in the tables below.  The Company’s and the Bank's actual capital ratios are presented in the tables below as of June 30, 2011 (Dollar amounts in thousands):

Company
			For
			Capital adequacy
			Purposes
	Actual		Minimum
	Amount	Ratio	Amount	Ratio
Total Capital (to risk weighted assets)	$93,750	17.22%	$43,552	8.0%
Tier 1 Capital (to risk weighted assets)	86,880	15.96	21,776	4.0
Tier 1 Capital (to average assets)	86,880	9.37	37,083	4.0

Bank					To be
					Well capitalized
			For		under prompt
			Capital adequacy		corrective action
			Purposes		provisions
	Actual		Minimum		Minimum
	Amount	Ratio	Amount	Ratio	Amount	Ratio
Total Capital (to risk weighted assets)	$93,327	17.14%	$43,549	8.0%	$54,436	10.0%
Tier 1 Capital (to risk weighted assets)	86,457	15.88	21,774	4.0	32,662	6.0
Tier 1 Capital (to average assets)	86,457	9.33	37,082	4.0	46,352	5.0

     In addition to the regulatory capital requirements shown above, the Bank is currently required to maintain individual minimum capital ratios by the OCC.  Those required ratios are:  Tier 1 capital to average assets – 8.5%; Tier 1 capital to risk weighted assets – 12.0%; and total capital to risk weighted assets – 14.0%.