Regulatory Matters

12 Months Ended

Dec. 31, 2014

Banking and Thrift [Abstract]

Regulatory Matters

20.REGULATORY MATTERS

The Company is subject to the dividend restrictions imposed by the FRB and the OCC.  Under such restrictions, the Company may not, without the prior approval of the FRB and the OCC, declare dividends in excess of the sum of the current year’s earnings (as defined in FRB regulations) plus the retained earnings (as defined in FRB regulations) from the prior two years.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios (set forth in the table that follows) of total and Tier I capital (as defined in FRB regulations) to risk-weighted assets (as defined in FRB regulations), and of Tier I capital (as defined in FRB regulations) to average assets (as defined in FRB regulations).  Management believes that as of December 31, 2014 and 2013, the Company and the Bank met all capital adequacy requirements to which they are subject. 

The most recent notification from their regulators categorized the Company and the Bank as well capitalized under the regulatory framework for prompt corrective action.  To be categorized as well capitalized, the Company and the Bank must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table.  There are no conditions or events since that notification that management believes have changed the Company’s or Bank’s category rating.

The Company’s and the Bank’s actual capital amounts and ratios were as follows:

	December 31, 2014
	(dollars in thousands)
	Company				Bank				Minimum for Capital Adequacy Purposes				Minimum to be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Risk-Based Capital
(to Risk Weighted Assets)	$	98,782	14.9	%	$	98,317	14.9	%	$	53,227	8.0	%	$	66,533	10.0	%
Tier I Capital
(to Risk Weighted Assets)	$	90,473	13.6	%	$	90,021	13.7	%	$	26,613	4.0	%	$	39,920	6.0	%
Tier I Capital
(to Average Assets)	$	90,473	10.8	%	$	90,021	10.8	%	$	33,726	4.0	%	$	42,157	5.0	%

	December 31, 2013
	(dollars in thousands)
	Company				Bank				Minimum for Capital Adequacy Purposes				Minimum to be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
Total Risk-Based Capital
(to Risk Weighted Assets)	$	92,879	14.9	%	$	86,757	13.9	%	$	49,864	8.0	%	$	62,330	10.0	%
Tier I Capital
(to Risk Weighted Assets)	$	85,044	13.6	%	$	78,932	12.7	%	$	24,932	4.0	%	$	37,398	6.0	%
Tier I Capital
(to Average Assets)	$	85,044	10.4	%	$	78,932	9.6	%	$	32,823	4.0	%	$	41,029	5.0	%

Additionally, new minimum capital ratios became effective for us on January 1, 2015 and will be fully phased-in on January 1, 2019.  Management believes that, as of December 31, 2014, the Company and the Bank would have met all applicable capital adequacy requirements under the Basel III Capital Rules on a fully phased-in basis as if such requirements had been in effect on that date.

Dividends are paid as declared by the Board of Directors.  The Company may pay dividends only if it is solvent and would not be rendered insolvent by the dividend payment and only from unrestricted and unreserved earned surplus and under some circumstances capital surplus.  The Bank’s dividend restrictions apply indirectly to the Company since cash available for dividend distribution will initially come from dividends paid to the Company by the Bank.

Dividends may be paid by the Bank only if it would not impair the Bank’s capital structure, if the Bank’s surplus is at least equal to its common capital and if the dividends declared in any year do not exceed the total of net profits in that year combined with undivided profits of the preceding two years less any required transfers to surplus, and if no losses have been sustained equal to or exceeding its undivided profits.

In addition, federal regulators have the ability to restrict dividend payments.  If the Bank or the Company approaches well-capitalized or minimum capital adequacy levels, regulators could restrict or forbid dividend payments.