Note 13 - Regulatory Matters

6 Months Ended

Jun. 30, 2015

Disclosure Text Block [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

13. REGULATORY MATTERS

We are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations 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 regulators about components, risk weightings, and other factors, and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on our financial statements.

The prompt corrective action regulations provide five classifications, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If an institution is not well capitalized, regulatory approval is required to accept brokered deposits. Subject to limited exceptions, no institution may make a capital distribution if, after making the distribution, it would be undercapitalized. If an institution is undercapitalized, it is subject to close monitoring by its principal federal regulator, its asset growth and expansion are restricted, and plans for capital restoration are required. In addition, further specific types of restrictions may be imposed on the institution at the discretion of the federal regulator. At June 30, 2015 and December 31, 2014, our bank was in the well capitalized category under the regulatory framework for prompt corrective action. There are no conditions or events since June 30, 2015 that we believe have changed our bank’s categorization.

Our actual capital levels (dollars in thousands) and the minimum levels required to be categorized as adequately and well capitalized were:

											Minimum Required
											to be Well
						Minimum Required					Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
June 30, 2015
Total capital (to risk weighted assets)
Consolidated	$	341,865		13.6	%	$	200,721		8.0	%	$	NA		NA
Bank		345,719		13.8			200,822		8.0			251,028		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		325,304		13.0			150,541		6.0			NA		NA
Bank		329,158		13.1			150,617		6.0			200,822		8.0
Common equity tier 1 (to risk weighted assets)
Consolidated		274,601		10.9			112,997		4.5			NA		NA
Bank		329,158		13.1			112,963		4.5			163,168		6.5
Tier 1 capital (to average assets)
Consolidated		325,304		11.6			112,364		4.0			NA		NA
Bank		329,158		11.7			112,487		4.0			140,608		5.0

											Minimum Required
											to be Well
						Minimum Required					Capitalized Under
						for Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Regulations
	Amount		Ratio			Amount		Ratio			Amount		Ratio
December 31, 2014
Total capital (to risk weighted assets)
Consolidated	$	334,793		14.4	%	$	185,553		8.0	%	$	NA		NA
Bank		332,749		14.4			185,309		8.0			231,636		10.0	%
Tier 1 capital (to risk weighted assets)
Consolidated		314,752		13.6			92,777		4.0			NA		NA
Bank		312,708		13.5			92,655		4.0			138,982		6.0
Tier 1 capital (to average assets)
Consolidated		314,752		11.2			112,949		4.0			NA		NA
Bank		312,708		11.1			112,856		4.0			141,070		5.0

Our consolidated capital levels as of June 30, 2015 and December 31, 2014 include $52.7 million and $52.4 million, respectively, of trust preferred securities subject to certain limitations. Under applicable Federal Reserve guidelines, the trust preferred securities constitute a restricted core capital element. The guidelines provide that the aggregate amount of restricted core elements that may be included in our Tier 1 capital must not exceed 25% of the sum of all core capital elements, including restricted core capital elements, net of goodwill less any associated deferred tax liability. Our ability to include the trust preferred securities in Tier 1 capital in accordance with the guidelines is not affected by the provision of the Dodd-Frank Act generally restricting such treatment, because (i) the trust preferred securities were issued before May 19, 2010, and (ii) our total consolidated assets as of December 31, 2009 were less than $15.0 billion. As of June 30, 2015 and December 31, 2014, all $52.7 million and $52.4 million, respectively, of the trust preferred securities were included in our consolidated Tier 1 capital.

Our regulatory capital calculations and the minimum requirements to be categorized as well capitalized and adequately capitalized under the prompt corrective action regulations were impacted by BASEL III, which became effective January 1, 2015 and are included in the June 30, 2015 table above. The net impact on our regulatory capital ratios and our overall capital position was not material.

Our and our bank’s ability to pay cash and stock dividends is subject to limitations under various laws and regulations and to prudent and sound banking practices. On January 15, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.14 per share that was paid on March 25, 2015 to shareholders of record as of March 13, 2015. On April 16, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.14 per share that was paid on June 24, 2015 to shareholders of record as of June 12, 2015. On July 16, 2015, our Board of Directors declared a cash dividend on our common stock in the amount of $0.15 per share that will be paid on September 23, 2015 to shareholders of record as of September 11, 2015.

In addition, on January 30, 2015, we announced that our Board of Directors had authorized a new program to repurchase up to $20.0 million of our common stock from time to time in open market transactions at prevailing market prices or by other means in accordance with applicable regulations. We expect to fund a majority of such repurchases from cash dividends paid to us from our Bank. During the first six months of 2015, we purchased approximately 463,000 shares of common stock at an average price of $19.67, totaling about $9.1 million, under the stock repurchase program. The purchased shares were retired effective on the acquisition date.