Regulatory Matters

6 Months Ended

Jun. 30, 2011

Regulatory Matters

Regulatory Matters

(16) Regulatory Matters

Bancorp and the Bank are subject to various capital requirements prescribed by banking regulations and administered by federal banking agencies. Under these requirements, Bancorp and the Bank must meet minimum amounts and percentages of Tier I and total capital, as defined, to risk weighted assets and Tier I capital to average assets. Risk weighted assets are determined by applying certain risk weightings prescribed by the regulations to various categories of assets and off-balance sheet commitments. Capital and risk weighted assets may be further subject to qualitative judgments by regulators as to components, risk weighting and other factors. Failure to meet the capital requirements can result in certain mandatory, and possibly discretionary, corrective actions prescribed by the regulations or determined to be necessary by the regulators, which could materially affect the consolidated financial statements. Management believes Bancorp and the Bank met all capital requirements to which they were subject as of June 30, 2011.

The following table sets forth Bancorp’s and the Bank’s risk based capital amounts and ratios as of June 30, 2011 and December 31, 2010.

June 30, 2011	Actual				Minimum For Adequate				Minimum For Well Capitalized
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total risk-based capital (1)
Consolidated	$	234,249	14.12	%	$	132,719	8.00	%	NA		NA
Bank	196,932		11.95	%	131,837		8.00	%	$	164,797	10.00	%
Tier I risk-based capital (1)
Consolidated	$	203,426	12.26	%	$	66,371	4.00	%	NA		NA
Bank	166,248		10.09	%	65,906		4.00	%	$	98,859	6.00	%
Leverage (2)
Consolidated	$	203,426	10.55	%	$	57,846	3.00	%	NA		NA
Bank	166,248		8.66	%	57,592		3.00	%	$	95,986	5.00	%
December 31, 2010	Actual				Minimum For Adequate				Minimum For Well Capitalized
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
Total risk-based capital (1)
Consolidated	$	226,421	13.93	%	$	130,034	8.00	%	NA		NA
Bank	183,562		11.37	%	129,155		8.00	%	$	161,444	10.00	%
Tier I risk-based capital (1)
Consolidated	$	196,040	12.06	%	$	65,022	4.00	%	NA		NA
Bank	153,311		9.49	%	64,620		4.00	%	$	96,930	6.00	%
Leverage (2)
Consolidated	$	196,040	10.31	%	$	57,044	3.00	%	NA		NA
Bank	153,311		8.12	%	56,642		3.00	%	$	94,403	5.00	%

(1)Ratio is computed in relation to risk-weighted assets.

(2)Ratio is computed in relation to average assets.

NA — Not applicable.  Regulatory framework does not define well capitalized for holding companies.

The variance between the consolidated and the Bank’s capital ratios is largely due to the Bancorp’s 2008 issuance of $30 million of trust preferred securities and a special dividend of $25 million from the Bank to Bancorp in December 2009 as part of a strategy to minimize state bank taxes.