Shareholders' Equity

12 Months Ended

Dec. 31, 2014

Equity [Abstract]

Shareholders' Equity

NOTE J – SHAREHOLDERS’ EQUITY:

Shareholders’ equity of the Company includes the undistributed earnings of the bank subsidiary. Dividends to the Company’s shareholders can generally be paid only from dividends paid to the Company by its bank subsidiary. Consequently, dividends are dependent upon the earnings, capital needs, regulatory policies and statutory limitations affecting the bank subsidiary. Dividends paid by the bank subsidiary are subject to the written approval of the Commissioner of Banking and Consumer Finance of the State of Mississippi and the Federal Deposit Insurance Corporation (the “FDIC”). At December 31, 2014, $15,403,607 of undistributed earnings of the bank subsidiary included in consolidated surplus and retained earnings was available for future distribution to the Company as dividends. Dividends paid by the Company are subject to the written approval of the Federal Reserve Bank (“FRB”).

On February 25, 2009, the Board approved the repurchase of up to 3% of the outstanding shares of the Company’s common stock. As a result of this repurchase plan, 47,756 shares have been repurchased and retired through December 31, 2014.

The Company and the bank subsidiary 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 the regulators that, if undertaken, could have a direct material effect on the financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, specific capital guidelines must be met that involve quantitative measures of the assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification of the bank subsidiary and the Company are 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 bank subsidiary to maintain minimum amounts and ratios of Total and Tier 1 capital to risk-weighted assets, and Tier 1 capital to average assets.

As of December 31, 2014, the most recent notification from the FDIC categorized the bank subsidiary as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the bank subsidiary must have a Total risk-based capital ratio of 10.00% or greater, a Tier 1 risk-based capital ratio of 6.00% or greater and a Leverage capital ratio of 5.00% or greater. There are no conditions or events since that notification that Management believes have changed the bank subsidiary’s category.

The Company’s actual capital amounts and ratios and required minimum capital amounts and ratios for 2014, 2013 and 2012, are as follows (in thousands):

	Actual			For Capital Adequacy Purposes
		Amount	Ratio		Amount	Ratio
December 31, 2014:
Total Capital (to Risk Weighted Assets)	$	100,243	21.95%	$	36,528	8.00%
Tier 1 Capital (to Risk Weighted Assets)		94,493	20.70%		18,264	4.00%
Tier 1 Capital (to Average Assets)		94,493	13.29%		28,437	4.00%
December 31, 2013:
Total Capital (to Risk Weighted Assets)	$	111,141	22.79%	$	39,022	8.00%
Tier 1 Capital (to Risk Weighted Assets)		105,009	21.54%		19,511	4.00%
Tier 1 Capital (to Average Assets)		105,009	13.48%		31,170	4.00%
December 31, 2012:
Total Capital (to Risk Weighted Assets)	$	112,342	21.29%	$	42,216	8.00%
Tier 1 Capital (to Risk Weighted Assets)		105,728	20.04%		21,108	4.00%
Tier 1 Capital (to Average Assets)		105,728	13.07%		32,361	4.00%

The bank subsidiary’s actual capital amounts and ratios and required minimum capital amounts and ratios and capital amounts and ratios to be well capitalized for 2014, 2013 and 2012, are as follows (in thousands):

	Actual			For Capital Adequacy Purposes			To Be Well Capitalized
		Amount	Ratio		Amount	Ratio		Amount	Ratio
December 31, 2014:
Total Capital (to Risk Weighted Assets)	$	96,427	21.28%	$	36,247	8.00%	$	45,309	10.00%
Tier 1 Capital (to Risk Weighted Assets)		90,720	20.02%		18,124	4.00%		27,186	6.00%
Tier 1 Capital (to Average Assets)		90,720	13.15%		27,599	4.00%		34,499	5.00%
December 31, 2013:
Total Capital (to Risk Weighted Assets)	$	106,870	21.94%	$	38,968	8.00%	$	48,711	10.00%
Tier 1 Capital (to Risk Weighted Assets)		100,746	20.69%		19,484	4.00%		29,227	6.00%
Tier 1 Capital (to Average Assets)		100,746	13.02%		30,958	4.00%		38,697	5.00%
December 31, 2012:
Total Capital (to Risk Weighted Assets)	$	107,885	20.47%	$	42,148	8.00%	$	52,685	10.00%
Tier 1 Capital (to Risk Weighted Assets)		101,241	19.22%		21,074	4.00%		31,611	6.00%
Tier 1 Capital (to Average Assets)		101,241	12.62%		32,086	4.00%		40,108	5.00%

In July 2013, the Federal bank regulatory agencies issued a final rule that will revise their risk-based capital requirements and the method for calculating components of capital and of computing risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. The final rule applies to all depository institutions, top-tier bank holding companies with total consolidated assets of $500 million or more and top-tier savings and loan holding companies. The rule establishes a new

common equity Tier 1 minimum capital requirement, increases the minimum capital ratios and assigns a higher risk weight to certain assets based on the risk associated with these assets. The final rule includes transition periods that generally implement the new regulations over a five year period. These changes will be phased in beginning in January 2015, and while management continues to evaluate this final rule and its potential impact, preliminary assessments indicate that the Bank and the Company will continue to exceed all regulatory capital requirements under the new rule.