Regulatory Capital Matters

9 Months Ended

Sep. 30, 2013

Regulatory Capital Matters [Abstract]

Regulatory Capital Matters

(12) Regulatory Capital Matters

The amount of dividends payable to the parent company from the subsidiary bank is limited by various banking regulatory agencies.  Upon approval by regulatory authorities, the Bank may pay cash dividends to the parent company in excess of regulatory limitations.  Additionally, in the third quarter of 2009, the Company suspended the payment of dividends to common shareholders.  At September 30, 2013, the Company is subject to certain regulatory restrictions that preclude the declaration of or payment of any dividends to its common stockholders, without prior approval from the Federal Reserve Bank.

The Company is subject to various regulatory capital requirements administered by 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 Company’s consolidated financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices.  The Company’s capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company to maintain minimum amounts and ratios of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets.  The amounts and ratios as defined in regulations are presented hereafter.  Management believes, as of September 30, 2013, the Company meets all capital adequacy requirements to which it is subject under the regulatory framework for prompt corrective action.  In the opinion of management, there are no conditions or events since prior notification of capital adequacy from the regulators that have changed the institution’s category.

The following table summarizes regulatory capital information as of September 30, 2013 and December 31, 2012 on a consolidated basis and for each significant subsidiary, as defined.

											To Be Well Capitalized
						For Capital					Under Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of September 30, 2013
Total Capital to Risk-Weighted Assets
Consolidated	$	124,581		16.66	%	$	59,824		8.00	%	NA		NA
Colony Bank		125,567		16.82			59,722		8.00		$	74,653		10.00	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		115,189		15.40			29,912		4.00		NA		NA
Colony Bank		116,191		15.56			29,861		4.00			44,792		6.00
Tier 1 Capital to Average Assets
Consolidated		115,189		10.40			44,283		4.00		NA		NA
Colony Bank		116,191		10.51			44,205		4.00			55,256		5.00

											To Be Well Capitalized
						For Capital					Under Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2012
Total Capital to Risk-Weighted Assets
Consolidated	$	122,630		16.47	%	$	59,548		8.00	%	NA		NA
Colony Bank		123,463		16.61			59,474		8.00		$	74,342		10.00	%
Tier 1 Capital to Risk-Weighted Assets
Consolidated		113,283		15.22			29,774		4.00		NA		NA
Colony Bank		114,128		15.35			29,737		4.00			44,605		6.00
Tier 1 Capital to Average Assets
Consolidated		113,283		10.22			44,343		4.00		NA		NA
Colony Bank		114,128		10.31			44,282		4.00			55,352		5.00

At September 30, 2013, the Bank continued to be subject to a memorandum of understanding (MOU) which requires, among other things, that the Bank maintain minimum capital ratios at specified levels higher than those otherwise required by applicable regulations as follows:  Tier 1 capital to total average assets of 8% and total risk-based capital to total risk-weighted assets of 10% during the life of the MOU.  The MOU also requires that, prior to declaring or paying any cash dividend to the Company, the Bank must obtain written consent of its regulators.  As of October 4, 2013, the bank received written communication from regulators that the MOU was released, effective immediately; however, the bank is still required to obtain written consent of its regulators to declare or pay any cash dividends.