Regulatory Capital

12 Months Ended

Dec. 31, 2011

Regulatory Capital [Abstract]

Regulatory Capital

(15)    Regulatory Capital

The Corporation and the Bank are subject to risk-based capital guidelines issued by the Board of Governors of the Federal Reserve Board and the Office of Comptroller of Currency. These guidelines are used to evaluate capital adequacy and include required minimums as discussed below. The Corporation and the Bank are subject to the FDIC Improvement Act. The FDIC Improvement Act established five capital categories ranging from “well capitalized” to “critically undercapitalized.” These five capital categories are used by the Federal Deposit Insurance Corporation to determine prompt corrective action and an institution’s semi-annual FDIC deposit insurance premium assessments.

Capital adequacy guidelines and 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 about components, risk weightings, and other factors and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the consolidated financial statements.

The prompt corrective action regulations provide for five categories which in declining order are: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized,” and “critically under-capitalized.” To be considered “well capitalized”, an institution must generally have a leverage capital ratio of at least five percent, a Tier I risk-based capital ratio of at least six percent, and a total risk-based capital ratio of at least ten percent.

At December 31, 2011 and 2010, the capital ratios for the Corporation and the Bank exceeded the ratios required to be “well capitalized.” The “well capitalized” status affords the Bank the ability to operate with the greatest flexibility under current laws and regulations. The Comptroller of the Currency’s most recent notification categorized the Bank as “well capitalized” under the regulatory framework for prompt corrective action. Management believes that there are no conditions or events that have arisen since that notification that have changed the Bank’s category. Analysis of the Corporation’s and the Bank’s Regulatory Capital and Regulatory Capital Requirements follows:

	December 31, 2011					December 31, 2010
	Amount		Ratio			Amount		Ratio
	(Dollars in thousands)
Total capital (risk weighted)
Consolidated	$	123,461		14.01	%	$	119,458		13.82	%
Bank		113,005		12.84			111,091		12.86
Tier 1 capital (risk weighted)
Consolidated		100,368		11.39			95,408		11.04
Bank		101,925		11.58			96,227		11.14
Tier 1 capital (average assets)
Consolidated		100,368		8.80			95,408		8.44
Bank		101,925		8.94			96,227		8.59
Well Capitalized:
Total capital (risk weighted)
Consolidated	$	88,123		10.00	%	$	86,438		10.00	%
Bank		88,010		10.00			86,385		10.00
Tier 1 capital (risk weighted)
Consolidated		52,872		6.00			51,852		6.00
Bank		52,811		6.00			51,828		6.00
Tier 1 capital (average assets)
Consolidated		57,027		5.00			56,521		5.00
Bank		57,005		5.00			56,011		5.00
Minimum Required:
Total capital (risk weighted)
Consolidated	$	70,499		8.00	%	$	69,151		8.00	%
Bank		70,408		8.00			69,108		8.00
Tier 1 capital (risk weighted)
Consolidated		35,248		4.00			34,568		4.00
Bank		35,207		4.00			34,552		4.00
Tier 1 capital (average assets)
Consolidated		45,622		4.00			45,217		4.00
Bank		45,604		4.00			44,809		4.00