Regulatory Capital Matters

3 Months Ended

Mar. 31, 2013

Regulatory Capital Matters [Abstract]

REGULATORY CAPITAL MATTERS

NOTE 11 – REGULATORY CAPITAL MATTERS

CFBank is subject to regulatory capital requirements administered by federal banking agencies.  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.  Failure to meet capital requirements can initiate regulatory action. 

Prompt corrective action regulations 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 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 CFBank Order required CFBank to have by September 30, 2011, and maintain thereafter, 8% Tier 1 (Core) Capital to adjusted total assets and 12% Total Capital to risk weighted assets. CFBank met the capital requirement at March31, 2013 and December 31, 2012 as a result of a $13,500 capital contribution from the Holding Company using net proceeds of the stock offering. However, CFBank will not be considered “well-capitalized” under applicable regulatory capital standards as long as it is subject to individual minimum capital requirements under the CFBank Order.

Actual and required capital amounts and ratios of CFBank are presented below:

							To Be Well
							Capitalized Under			Required
				For Capital			Prompt Corrective			By Terms Of
	Actual			Adequacy Purposes			Action Regulations			CFBank Order
	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio
March 31, 2013
Total Capital to risk
weighted assets	$	24,552	14.26%	$	13,778	8.00%	$	17,223	10.00%	$	20,668	12.00%
Tier 1 (Core) Capital to risk
weighted assets		22,356	12.98%		6,889	4.00%		10,334	6.00%		N/A	N/A
Tier 1 (Core) Capital to
adjusted total assets		22,356	10.60%		8,440	4.00%		10,550	5.00%		16,880	8.00%
Tangible Capital to
adjusted total assets		22,356	10.60%		3,165	1.50%		N/A	N/A		N/A	N/A

							To Be Well
							Capitalized Under			Required
				For Capital			Prompt Corrective			By Terms Of
	Actual			Adequacy Purposes			Action Regulations			CFBank Order
	Amount		Ratio	Amount		Ratio	Amount		Ratio	Amount		Ratio
December 31,2012
Total Capital to risk
weighted assets	$	25,002	15.53%	$	12,878	8.00%	$	16,098	10.00%	$	19,317	12.00%
Tier 1 (Core) Capital to risk
weighted assets		22,950	14.26%		6,439	4.00%		9,659	6.00%		N/A	N/A
Tier 1 (Core) Capital to
adjusted total assets		22,950	10.97%		8,372	4.00%		10,465	5.00%		16,744	8.00%
Tangible Capital to
adjusted total assets		22,950	10.97%		3,139	1.50%		N/A	N/A		N/A	N/A

The Qualified Thrift Lender test requires at least 65% of assets be maintained in housing‑related finance and other specified areas.  If this test is not met, limits are placed on growth, branching, new investments, FHLB advances and dividends, or CFBank must convert to a commercial bank charter.  Management believes that this test has been metat March 31, 2013 and December 31, 2012.

CFBank converted from a mutual to a stock institution in 1998, and a “liquidation account” was established in the amount of  $14,300, which was the net worth reported in the conversion prospectus.  The liquidation account represents a calculated amount for the purposes described below, and it does not represent actual funds included in the consolidated financial statements of the Company.  Eligible depositors who have maintained their accounts, less annual reductions to the extent they have reduced their deposits, would receive a distribution from this account if CFBank liquidated and its assets exceeded its liabilities.  Dividends may not reduce CFBank’s stockholder’s equity below the required liquidation account balance.

Dividend Restrictions

Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year's net profits, combined with the retained net profits of the preceding two years, subject to the capital requirements described above. CFBank must receive regulatory approval prior to any dividend payments.