14.

REGULATORY CAPITAL REQUIREMENTS

Home Savings is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on Home Savings and United Community. The regulations require Home Savings to meet specific capital adequacy guidelines in keeping with the regulatory framework for prompt corrective action that involve quantitative measures of Home Savings’ assets, liabilities, and certain off balance sheet items as calculated under regulatory accounting practices. Home Savings’ capital classification is also subject to qualitative judgments by the regulators about components of capital, risk weightings, and other factors.

Quantitative measures established by regulation for capital adequacy require Home Savings to maintain minimum ratios of Tier 1 (or Core) capital (as defined in the regulations) to average total assets (as defined) and of total risk-based capital (as defined) to risk-weighted assets (as defined). Actual and regulatory required capital ratios for Home Savings, along with the dollar amount of capital implied by such ratios, are presented below.


	As of March 31, 2014
	Actual					Minimum Capital Requirements Per Regulation					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(In thousands)
Total risk-based capital to risk-weighted assets	$	203,513		19.68	%	$	82,731		8.00	%	$	103,414		10.00	%
Tier 1 capital to risk-weighted assets		190,492		18.42	%		*		*			62,048		6.00	%
Tier 1 capital to average total assets**		190,492		10.71	%		71,177		4.00	%		88,971		5.00	%


	As of December 31, 2013
	Actual					Minimum Capital Requirements Per Regulation					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
	(In thousands)
Total risk-based capital to risk-weighted assets	$	200,835		19.76	%	$	81,293		8.00	%	$	101,616		10.00	%
Tier 1 capital to risk-weighted assets		188,029		18.50	%		*		*			60,969		6.00	%
Tier 1 capital to average total assets**		188,029		10.50	%		71,611		4.00	%		89,514		5.00	%

*	Ratio is not required under regulations

**	Tier 1 Leverage Capital Ratio

As of March 31, 2014 and December 31, 2013, Home Savings is considered well capitalized.