Regulatory Capital

12 Months Ended

Dec. 31, 2011

Regulatory Capital

Note 19: Regulatory Capital

The Bank is subject to various regulatory capital requirements administered by 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 the Bank’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Furthermore, the Bank’s regulators could require adjustments to regulatory capital not reflected in these financial statements.

Effective in 2012, the Company will be subject to new holding company capital requirements due to the transition to a bank holding company.

Quantitative measures established by regulation to ensure capital adequacy require 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 to average assets (as defined). Management believes, as of December 31, 2011 and 2010, that the Bank meets all capital adequacy requirements to which it is subject.

The Bank’s actual capital amounts and ratios are presented in the table below.

	Actual					Required for Adequate  Capital					To Be Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2011
Total risk-based capital (to risk-weighted assets)	$	130,450		14.3	%	$	72,905		8.0	%	$	91,131		10.0	%
Tier 1 risk-based capital (to risk-weighted assets)		125,782		13.1	%		36,452		4.0	%		54,679		6.0	%
Core capital (to adjusted total assets)		125,782		9.0	%		56,200		4.0	%		70,250		5.0	%
Core capital (to adjusted tangible assets)		125,782		9.0	%		28,100		2.0	%		N/A		N/A
Tangible capital (to adjusted total assets)		125,782		9.0	%		21,075		1.5	%		N/A		N/A
As of December 31, 2010
Total risk-based capital (to risk-weighted assets)	$	132,998		13.8	%	$	77,128		8.0	%	$	96,410		10.0	%
Tier 1 risk-based capital (to risk-weighted assets)		127,812		12.5	%		38,564		4.0	%		57,846		6.0	%
Core capital (to adjusted total assets)		127,812		9.2	%		55,713		4.0	%		69,641		5.0	%
Core capital (to adjusted tangible assets)		127,812		9.2	%		27,856		2.0	%		N/A		N/A
Tangible capital (to adjusted total assets)		127,812		9.2	%		20,892		1.5	%		N/A		N/A