Regulatory Capital

9 Months Ended

Sep. 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 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.

The Bank met the minimum capital requirements under the cease and desist order at September 30, 2013 and December 31, 2012.  Actual required capital amounts and ratios at September 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)
September 30, 2013:
Tangible Capital to adjusted total assets	$33,670	9.75%	$   5,182	1.50%	N/A	N/A
Tier 1(Core) Capital to adjusted total assets	$33,670	9.75%	$ 13,819	4.00%	$ 27,637	8.00%
Tier 1(Core) Capital to risk weighted assets	$33,670	14.79%	N/A	N/A	N/A	N/A
Total Capital to risk weighted assets	$36,608	16.08%	$ 18,208	8.00%	$ 27,312	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%

On October 30, 2013, the Bank entered into a Consent Order with the OCC that superseded the cease and desist order that had been in effect since September 2010.  The Consent Order raises the minimum capital requirements to 9% for Tier 1 (Core) Capital and 13% for Total Capital to risk weighted assets.  The Bank’s regulatory capital exceeded both ratios as of September 30, 2013.