Regulatory Matters

12 Months Ended

Dec. 31, 2015

Banking and Thrift [Abstract]

Regulatory Matters

REGULATORY MATTERS

The primary source of funds for our dividends paid to our shareholders is dividends received from our subsidiaries.  Dividends paid by the subsidiary bank are subject to restrictions by banking law and regulations and require approval by the bank’s regulatory agency if dividends declared in any year exceed the bank’s current year's net income, as defined, plus its retained net profits of the two preceding years.  During 2016, the Bank will have $12.8 million plus net income for the interim periods through the date of declaration, available for dividends for distribution to us.  

We and our subsidiaries are subject to various regulatory capital requirements administered by the banking regulatory agencies.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we and each of our subsidiaries must meet specific capital guidelines that involve quantitative measures of our and our subsidiaries’ assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.  We and each of our subsidiaries’ capital amounts and classifications 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 us and each of our subsidiaries to maintain minimum amounts and ratios of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined).  We believe, as of December 31, 2015, that we and our subsidiaries met all capital adequacy requirements to which they were subject.

The most recent notifications from the banking regulatory agencies categorized us and each of our subsidiaries as well capitalized under the regulatory framework for prompt corrective action.  To be categorized as well capitalized, we and each of our subsidiaries must maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the table below.

Our subsidiary banks are required to maintain reserve balances with the Federal Reserve Bank.  The required reserve balance was $629,000 at December 31, 2015.

Our actual capital amounts and ratios as well as our subsidiary, Summit Community Bank’s (“Summit Community”) are presented in the following table.

	Actual				Minimum Required Capital - Basel III Fully Phased-in				Minimum Required To Be Well Capitalized
Dollars in thousands	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2015
CET1 (to risk weighted assets)
Summit	$	137,849	11.8	%	$	81,775	7.0	%	$	75,934	6.5	%
Summit Community	158,081		13.6	%	81,365		7.0	%	75,553		6.5	%
Tier I Capital (to risk weighted assets)
Summit	156,849		13.4	%	99,494		8.5	%	93,641		8.0	%
Summit Community	158,081		13.6	%	98,801		8.5	%	92,989		8.0	%
Total Capital (to risk weighted assets)
Summit	168,321		14.4	%	122,734		10.5	%	116,890		10.0	%
Summit Community	169,553		14.5	%	122,780		10.5	%	116,933		10.0	%
Tier I Capital (to average assets)
Summit	156,849		10.7	%	58,635		4.0	%	73,294		5.0	%
Summit Community	158,081		10.8	%	58,549		4.0	%	73,186		5.0	%
As of December 31, 2014
Tier I Capital (to risk weighted assets)
Summit	141,589		13.3	%	42,583		4.0	%	63,875		6.0	%
Summit Community	150,653		14.2	%	42,437		4.0	%	63,656		6.0	%
Total Capital (to risk weighted assets)
Summit	158,196		14.9	%	84,937		8.0	%	106,172		10.0	%
Summit Community	161,820		15.3	%	84,612		8.0	%	105,765		10.0	%
Tier I Capital (to average assets)
Summit	141,589		9.9	%	57,208		4.0	%	71,510		5.0	%
Summit Community	150,653		10.6	%	56,850		4.0	%	71,063		5.0	%