Regulatory Matters

12 Months Ended

Dec. 31, 2014

Regulatory Matters [Abstract]

Regulatory Capital Requirements under Banking Regulations

Regulatory Matters

The following is a summary of certain regulatory matters affecting Peoples and its subsidiaries:

Federal Reserve Requirements

Peoples Bank is required to maintain a minimum level of reserves, consisting of cash on hand and non-interest-bearing balances with the FRB, based on the amount of deposit liabilities. Average required reserve balances were approximately $12.2 million and $11.2 million in 2014 and 2013, respectively.

Limits on Dividends

The primary source of funds for the dividends paid by Peoples is dividends received from Peoples Bank. The payment of dividends by Peoples Bank is subject to various banking regulations. The most restrictive provision requires regulatory approval if dividends declared in any calendar year exceed the total net profits of that year plus the retained net profits of the preceding two years. At December 31, 2014, Peoples Bank had approximately $4.8 million of net profits available for distribution to Peoples as dividends without regulatory approval.

Capital Requirements

Peoples and Peoples Bank are subject to various regulatory capital guidelines administered by the banking regulatory agencies. Under capital adequacy requirements and the regulatory framework for prompt corrective action, Peoples and Peoples Bank must meet specific capital guidelines that involve quantitative measures of each entity's assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. Peoples' and Peoples Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Failure to meet future minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by the regulators that, if undertaken, could have a material effect on Peoples' financial results.

Quantitative measures established by regulation to ensure capital adequacy, and in effect at December 31, 2014, required Peoples and Peoples Bank to maintain minimum amounts and ratios 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). Peoples and Peoples Bank met all capital adequacy requirements at December 31, 2014.

As of December 31, 2014, the most recent notifications from the banking regulatory agencies categorized Peoples and Peoples Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, Peoples and Peoples Bank must maintain minimum Total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table below. There are no conditions or events since these notifications that management believes have changed Peoples or Peoples Bank's category.

Peoples and Peoples Bank's actual capital amounts and ratios as of December 31 are also presented in the following table:

	2014				2013
(Dollars in thousands)	Amount		Ratio		Amount		Ratio
PEOPLES
Total Capital (1)
Actual	$	261,371	15.5	%	$	184,457	13.8	%
For capital adequacy	135,037		8.0	%	107,105		8.0	%
To be well capitalized	168,797		10.0	%	133,881		10.0	%
Tier 1 (2)
Actual	$	241,707	14.3	%	$	166,217	12.4	%
For capital adequacy	67,519		4.0	%	53,552		4.0	%
To be well capitalized	101,278		6.0	%	80,329		6.0	%
Tier 1 Leverage (3)
Actual	$	241,707	9.9	%	$	166,217	8.5	%
For capital adequacy	97,470		4.0	%	78,080		4.0	%
To be well capitalized	121,837		5.0	%	97,600		5.0	%
Net Risk-Weighted Assets	$	1,687,968			$	1,338,811
PEOPLES BANK
Total Capital (1)
Actual	$	223,591	13.3	%	$	188,814	14.1	%
For capital adequacy	134,928		8.0	%	106,961		8.0	%
To be well capitalized	168,660		10.0	%	133,701		10.0	%
Tier 1 (2)
Actual	$	205,710	12.2	%	$	172,097	12.9	%
For capital adequacy	67,464		4.0	%	53,480		4.0	%
To be well capitalized	101,196		6.0	%	80,220		6.0	%
Tier 1 Leverage (3)
Actual	$	205,710	8.5	%	$	172,097	8.8	%
For capital adequacy	97,333		4.0	%	77,830		4.0	%
To be well capitalized	121,666		5.0	%	97,288		5.0	%
Net Risk-Weighted Assets	$	1,686,603			$	1,337,008
(1) Ratio represents total capital to net risk-weighted assets
(2) Ratio represents Tier 1 capital to net risk-weighted assets
(3) Ratio represents Tier 1 capital to average assets