Regulatory Capital

6 Months Ended

Jun. 30, 2013

Regulatory Capital

Regulatory Capital

NOTE (10) –Regulatory Capital

The Bank is subject to regulatory capital requirements now administered by the Office of the Comptroller of the Currency, or OCC, which is the statutory successor under the Dodd-Frank Act to the former Office of Thrift Supervision, or OTS.  The capital requirements, which remain the same as when administered by the OTS, involve quantitative measures of assets, liabilities, and certain off balance sheet items calculated under regulatory accounting practices.  Capital amounts and classifications are also subject to qualitative judgments by the OCC.  Failure to meet capital requirements can result in regulatory action.

Prompt corrective action regulations also administered by the OCC provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If only adequately capitalized, regulatory approval is required to accept brokered deposits.  If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required.

The Bank met the minimum capital requirements under the cease and desist order at June 30, 2013 and December 31, 2012.  Actual required capital amounts and ratios at June 30, 2013 and December 31, 2012, together with the higher capital requirements that the Bank is required to meet under the cease and desist order applicable to it, are presented below.

	Actual		Required for Capital Adequacy Purposes		Capital Requirements under Cease and Desist Order
	Amount	Ratio	Amount	Ratio	Amount	Ratios
	(Dollars in thousands)
June 30, 2013:
Tangible Capital to adjusted total assets	$ 32,749	9.48%	$   5,179	1.50%	N/A	N/A
Tier 1(Core) Capital to adjusted total assets	$ 32,749	9.48%	$ 13,812	4.00%	$ 27,624	8.00%
Tier 1(Core) Capital to risk weighted assets	$ 32,749	14.98%	N/A	N/A	N/A	N/A
Total Capital to risk weighted assets	$ 35,579	16.27%	$ 17,494	8.00%	$ 26,240	12.00%
December 31, 2012:
Tangible Capital to adjusted total assets	$ 32,936	8.82%	$  5,603	1.50%	N/A	N/A
Tier 1(Core) Capital to adjusted total assets	$ 32,936	8.82%	$ 14,940	4.00%	$ 29,881	8.00%
Tier 1(Core) Capital to risk weighted assets	$ 32,936	13.12%	N/A	N/A	N/A	N/A
Total Capital to risk weighted assets	$ 36,183	14.41%	$ 20,090	8.00%	$ 30,135	12.00%