REGULATORY REQUIREMENTS

12 Months Ended

Dec. 31, 2011

REGULATORY REQUIREMENTS [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

REGULATORY REQUIREMENTS

Various regulatory agencies have established guidelines that evaluate capital adequacy based on risk-adjusted assets. An additional capital computation evaluates tangible capital based on tangible assets. Minimum capital requirements set forth by the regulatory agencies require a tier 1 capital ratio of no less than 4 percent of risk-weighted assets, a total capital ratio of no less than 8 percent of risk-weighted assets, and a leverage capital ratio of no less than 3 percent of tangible assets. To meet the FDIC’s well-capitalized standards, the tier 1 and total capital ratios must be at least 6 percent and 10 percent, respectively while the leverage ratio must equal 5 percent. Failure to meet minimum capital requirements may result in certain actions by regulators that could have a direct material effect on the consolidated financial statements.

Based on the most recent notifications from its regulators, FCB is well-capitalized under the regulatory framework for prompt corrective action. Management believes that as of December 31, 2011 BancShares and FCB met all capital adequacy requirements to which they are subject and was not aware of any conditions or events that would affect FCB’s well-capitalized status.

Following is an analysis of capital ratios for BancShares and FCB as of December 31, 2011 and 2010:

	December 31, 2011						December 31, 2010
	Amount		Ratio		Requirement for Well-Capitalized		Amount		Ratio		Requirement for Well-Capitalized
BancShares
Tier 1 capital	$	2,072,610	15.41	%	6.00	%	$	1,935,559	14.86	%	6.00	%
Total capital	2,323,022		17.27		10.00		2,206,890		16.95		10.00
Leverage capital	2,072,610		9.90		5.00		1,935,559		9.18		5.00
FCB
Tier 1 capital	1,968,032		14.75		6.00		1,522,931		14.50		6.00
Total capital	2,211,235		16.57		10.00		1,754,847		16.71		10.00
Leverage capital	1,968,032		9.53		5.00		1,522,931		8.40		5.00

Provisions of the Dodd-Frank Act disallow the inclusion of trust preferred securities, which currently qualify as tier 1 capital, in the capital ratio calculations. Beginning in 2013, one-third of the $243,500 currently included in tier 1 capital will be excluded from capital. Elimination of the trust preferred securities from the December 31, 2011 capital structure would result in a proforma tier 1 leverage ratio of 8.73 percent, a proforma tier 1 risk-based ratio of 13.60 percent and a proforma total risk-based ratio of 15.46 percent. BancShares would continue to remain well-capitalized under current regulatory guidelines.

During 2011, the Board of Directors authorized the purchase of up to 200,000 shares of Class A common stock and 25,000 shares of Class B common stock. The repurchase authorization expires on June 30, 2012. The Board’s action approving share repurchases does not require the purchase of shares, and purchase activity may be suspended or discontinued at any time. Any shares of stock that are repurchased will be retired. BancShares repurchased 112,471 shares of Class A and 37,863 shares of Class B common stock during 2011. BancShares did not issue or sell any Class A or Class B common stock during 2011 or 2010 and did not purchase any Class A or Class B common stock during 2010.

The Board of Directors of FCB may declare a dividend on a portion of its undivided profits as it deems appropriate, subject to the requirements of the FDIC and the General Statutes of North Carolina, without prior regulatory approval. As of December 31, 2011, the amount was $1,769,289. However, to preserve its well-capitalized status, the maximum amount of the dividend was limited to $876,000. Dividends declared by FCB amounted to $82,813 in 2011, $50,424 in 2010 and $60,509 in 2009.

BancShares and FCB are subject to various requirements imposed by state and federal banking statutes and regulations, including regulations requiring the maintenance of noninterest-bearing reserve balances at the Federal Reserve Bank. Banks are allowed to reduce the required balances by the amount of vault cash. For 2011 the requirements averaged $161,585.