Minimum Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2011

Banking and Thrift [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

Note 18. Minimum Regulatory Capital Requirements

Cornerstone (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the Tennessee Department of Financial Institutions and the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on Cornerstone’s and the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, Cornerstone and the Bank must meet specific capital guidelines that involve quantitative measures of Cornerstone’s and the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Cornerstone’s and the Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require Cornerstone and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined).

As of December 31, 2011, the most recent notification from the Federal Deposit Insurance Corporation (FDIC) categorized the Bank as adequately capitalized under the regulatory framework for prompt corrective action.

Cornerstone’s and the Bank's actual capital amounts and ratios are also presented in the table. Dollar amounts are presented in thousands.

						Minimum					Minimum Capital
						Capital					Requirements per
	Actual					Requirements					the Action Plans
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2011:
Total capital to risk-weighted assets:
Consolidated	$	37,082		12.9	%	$	23,043		8.0	%		N/A		N/A
Cornerstone Community Bank		37,158		13.0	%		22,876		8.0	%		34,313		12.0	%
Tier I capital to risk-weighted assets:
Consolidated		33,435		11.6	%		11,521		4.0	%		N/A		N/A
Cornerstone Community Bank		33,536		11.7	%		11,438		4.0	%		28,594		10.0	%
Tier I capital to average assets:
Consolidated		33,435		8.0	%		16,713		4.0	%		N/A		N/A
Cornerstone Community Bank		33,536		8.0	%		16,686		4.0	%		33,371		8.0	%
As of December 31, 2010:
Total capital to risk-weighted assets:
Consolidated	$	27,477		9.3	%	$	23,572		8.0	%		N/A		N/A
Cornerstone Community Bank		29,592		10.1	%		23,534		8.0	%		35,301		12.0	%
Tier I capital to risk-weighted assets:
Consolidated		23,727		8.1	%		11,786		4.0	%		N/A		N/A
Cornerstone Community Bank		25,882		8.8	%		11,767		4.0	%		29,418		10.0	%
Tier I capital to average assets:
Consolidated		23,727		5.2	%		18,111		4.0	%		N/A		N/A
Cornerstone Community Bank		25,882		5.8	%		17,995		4.0	%		35,990		8.0	%

Management of the Bank has determined it is in compliance with the Action Plans, discussed in Note 17, for total and Tier I capital to risk-weighted assets and Tier 1 capital to average assets requirements at December 31, 2011. The Bank’s board of directors must ensure that the Bank complies with the provisions of the Action Plans and that required quarterly written progress reports are furnished to the FDIC and TDFI.