Regulatory Captial Requirements

12 Months Ended

Dec. 31, 2011

Regulatory Capital Requirements Under Banking Regulations Disclosure [Abstract]

Regulatory Capital Requirements Under Banking Regulations [Text Block]

NOTE 18 - REGULATORY CAPITAL REQUIREMENTS

The Company and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and discretionary actions by 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, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Capital amounts and classification 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 Company and the Bank to maintain minimum ratios of Total and Tier I capital to risk-weighted assets, and of Tier I capital to average assets.

On January 15, 2010, UBT entered into a Memorandum of Understanding with the Federal Deposit Insurance Corporation (“FDIC”) and the Michigan Office of Financial and Insurance Regulation (“OFIR”). On January 11, 2011, we entered into a revised Memorandum of Understanding (“MOU”) with substantially the same requirements as the MOU dated January 15, 2010. The MOU is not a “written agreement” for purposes of Section 8 of the Federal Deposit Insurance Act. The MOU documents an understanding among UBT, the FDIC and OFIR, that, among other things, (i) UBT will not declare or pay any dividend to the Company without the prior consent of the FDIC and OFIR; and (ii) UBT will have and maintain its Tier 1 capital ratio at a minimum of 9% for the duration of the MOU, and will maintain its ratio of total capital to risk-weighted assets at a minimum of 12% for the duration of the MOU.

In December 2010, the Company closed its public offering of common stock. The net proceeds to the Company, after deducting underwriting discounts and commissions and offering expenses, were approximately $17.1 million. The Company has contributed $12.0 million of the net proceeds of the offering to the capital of the Bank to increase the Bank's capital and regulatory capital ratios. As a result of the additional capital, the Bank was in compliance with the capital requirements of its MOU with the FDIC and OFIR at December 31, 2011 and 2010 At December 31, 2011, the Bank’s Tier 1 leverage capital ratio was 9.20%, and its ratio of total capital to risk-weighted assets was 15.49%.

The following table shows information about the Company's and the Banks' capital levels compared to regulatory requirements at year-end 2011 and 2010.

	Actual					Regulatory Minimum for Capital Adequacy (1)					Regulatory Minimum to be Well Capitalized (2)					Required by MOU (3)
As of December 31, 2011		$000	%				$000	%				$000	%				$000	%
Tier 1 Capital to Average Assets
Consolidated	$	86,430		9.9	%	$	35,031		4.0	%		N/A		N/A			N/A		N/A
Bank		80,388		9.2	%		34,950		4.0	%		43,688		5.0	%		78,638		9.0	%
Tier 1 Capital to Risk Weighted Assets
Consolidated		86,430		15.3	%		22,675		4.0	%		N/A		N/A			N/A		N/A
Bank		80,388		14.2	%		22,628		4.0	%		33,942		6.0	%		N/A		N/A
Total Capital to Risk Weighted Assets
Consolidated		93,683		16.5	%		45,349		8.0	%		N/A		N/A			N/A		N/A
Bank		87,627		15.5	%		45,256		8.0	%		56,570		10.0	%		67,884		12.0	%

As of December 31, 2010
Total Capital to Risk Weighted Assets
Consolidated		$	88,022	10.2	%	$	34,380	4.0	%	N/A	N/A		N/A	N/A
Bank			78,806	9.2	%		34,232	4.0	%	42,791	5.0	%	77,023	9.0	%
Tier 1 Capital to Risk Weighted Assets
Consolidated			88,022	15.0	%		23,510	4.0	%	N/A	N/A		N/A	N/A
Bank			78,806	13.4	%		23,491	4.0	%	35,237	6.0	%	N/A	N/A
Total Capital to Risk Weighted Assets
Consolidated			95,589	16.3	%		47,020	8.0	%	N/A	N/A		N/A	N/A
Bank			86,367	14.7	%		46,982	8.0	%	58,728	10.0	%	70,474	12.0	%
(1)	Represents minimum required to be categorized as adequately capitalized under Federal regulatory requirements.
(2)	Represents minimum generally required to be categorized as well-capitalized under Federal regulatory prompt corrective action provisions. The Memorandum of Understanding described above in Note 18 subjects the Bank to higher requirements.
(3)	Represents requirements by the Bank's regulators under terms of the MOU.