Regulatory Matters

12 Months Ended

Dec. 31, 2014

Regulatory Matters [Abstract]

Regulatory Matters

NOTE 16 - REGULATORY MATTERS

The Company and the Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s 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 amounts and ratios (set forth in the following table) of tangible and core capital (as defined in the regulations) to total adjusted assets (as defined) and of risk-based capital (as defined) to risk-weighted assets (as defined). Management believes, as of December 31, 2014, that the Company and the Bank meet all capital adequacy requirements to which they are subject.

As of December 31, 2014, the Bank was well-capitalized under the regulatory framework for prompt corrective action (as defined). To be categorized as well-capitalized, the Bank must maintain minimum total risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table. There are no conditions or events that management believes have changed the Company’s or the Bank’s category. The Company’s and the Bank’s actual regulatory capital amounts and ratios for 2014 and 2013 are presented in the following tables.

	At December 31, 2014
(dollars in thousands)	Actual		Required for Capital Adequacy Purposes		To be Considered Well Capitalized Under Prompt Corrective Action
Total Capital (to risk weighted assets)
The Company	$ 137,474	15.21%	$ 72,314	8.00%
The Bank	$ 135,753	15.05%	$ 72,171	8.00%	$ 90,214	10.00%
Tier 1 Capital (to risk weighted assets)
The Company	$ 128,937	14.26%	$ 36,157	4.00%
The Bank	$ 127,216	14.10%	$ 36,085	4.00%	$ 54,128	6.00%
Tier 1 Capital (to average assets)
The Company	$ 128,937	12.24%	$ 42,133	4.00%
The Bank	$ 127,216	12.10%	$ 42,065	4.00%	$ 52,581	5.00%

	At December 31, 2013
(dollars in thousands)	Actual		Required for Capital Adequacy Purposes		To be Considered Well Capitalized Under Prompt Corrective Action
Total Capital (to risk weighted assets)
The Company	$ 131,936	15.62%	$ 67,561	8.00%
The Bank	$ 131,216	15.57%	$ 67,433	8.00%	$ 84,292	10.00%
Tier 1 Capital (to risk weighted assets)
The Company	$ 123,787	14.66%	$ 33,781	4.00%
The Bank	$ 123,067	14.60%	$ 33,717	4.00%	$ 50,575	6.00%
Tier 1 Capital (to average assets)
The Company	$ 123,787	12.50%	$ 39,597	4.00%
The Bank	$ 123,067	12.45%	$ 39,537	4.00%	$ 49,422	5.00%

In October 2013, the Company added $27.4 million in additional common capital after commissions and related offering expenses and immediately downstreamed $27.2 million of the net proceeds raised to the Bank.

On January 1, 2015, the Company and Bank will be subject to the Basel III Capital Rules. In July 2013, the Company’s primary federalregulator, the Federal Reserve, published final rules (the “Basel III Capital Rules”) establishing a new comprehensivecapital framework for U.S. banking organizations. The rules implement the Basel Committee’s December 2010framework known as “Basel III” for strengthening international capital standards as well as certain provisions of theDodd-Frank Act. The Basel III Capital Rules substantially revise the risk-based capital requirements applicable to bankholding companies and depository institutionscompared to the current U.S. risk-based capital rules. The Basel III Capital Rules define the components of capital and address other issues affecting thenumerator in banking institutions’ regulatory capital ratios. The Basel III Capital Rules also address risk weights and otherissues affecting the denominator in banking institutions’ regulatory capital ratios and replace the existing risk-weightingapproach, which was derived from the Basel I capital accords of the Basel Committee, with a more risk-sensitive approach based, in part, on the standardized approach in the Basel Committee’s 2004 “Basel II” capital accords. The Basel IIICapital Rules also implement the requirements of Section 939A of the Dodd-Frank Act to remove references to credit ratings from the federal banking agencies’ rules. The Basel III Capital Rules are effective on January 1, 2015 (subject to a phase-in period for certain provisions).