REGULATORY MATTERS

12 Months Ended

Dec. 31, 2014

REGULATORY MATTERS [Abstract]

REGULATORY MATTERS

19. REGULATORY MATTERS

The Company and the Bank are 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 financial statements.  Under capital adequacy guidelines, the Company and the Bank must meet specific capital guidelines that involve quantitative measures of assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  The capital amounts and classification 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 and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and to average assets (as defined).

As of December 31, 2014, the most recent notifications from the Federal Deposit Insurance Corporation categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized the Bank must maintain minimum total risk‑based, Tier I risk‑based, and Tier I leverage capital ratios as set forth in the table (in thousands). There are no conditions or events since those notifications that management believes has changed the Bank’s category.

The Company’s and the Bank’s actual capital amounts and ratios are presented in the table below (in thousands):

	Actual					Required for Minimum Capital Adequacy Purposes					To be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2014:
Total capital to risk-weighted assets:
Company	$	190,060		13.73	%	$	110,758		8.00	%		N/A		N/A
Bank	$	179,225		12.94	%	$	110,842		8.00	%	$	138,552		10.00	%
Tier I capital to risk-weighted assets:
Company	$	178,649		12.90	%	$	55,379		4.00	%		N/A		N/A
Bank	$	167,814		12.11	%	$	55,421		4.00	%	$	83,131		6.00	%
Tier I capital to average assets:
Company	$	178,649		9.52	%	$	75,029		4.00	%		N/A		N/A
Bank	$	167,814		8.95	%	$	74,994		4.00	%	$	112,492		5.00	%

	Actual					Required for Minimum Capital Adequacy Purposes					To be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2013:
Total capital to risk-weighted assets:
Company	$	178,343		14.19	%	$	100,536		8.00	%		N/A		N/A
Bank	$	170,262		13.56	%	$	100,466		8.00	%	$	125,582		10.00	%
Tier I capital to risk-weighted assets:
Company	$	169,242		13.47	%	$	50,268		4.00	%		N/A		N/A
Bank	$	161,283		12.84	%	$	50,233		4.00	%	$	75,349		6.00	%
Tier I capital to average assets:
Company	$	169,242		9.35	%	$	72,405		4.00	%		N/A		N/A
Bank	$	161,283		8.91	%	$	72,384		4.00	%	$	108,576		5.00	%

In July 2013, the Federal bank regulatory agencies issued a final rule that will revise their risk-based capital requirements and the method for calculating components of capital and of computing risk-weighted assets to make them consistent with agreements that were reached by the Basel Committee on Banking Supervision and certain provisions of the Dodd-Frank Act. The final rule applies to all depository institutions, top-tier bank holding companies with total consolidated assets of $500 million or more and top-tier savings and loan holding companies. The rule establishes a new common equity Tier 1 minimum capital requirement, increases the minimum capital ratios and assigns a higher risk weight to certain assets based on the risk associated with these assets. The final rule includes transition periods that generally implement the new regulations over a five year period. These changes will be phased in beginning in January 2015, and while management continues to evaluate this final rule and its potential impact, preliminary assessments indicate that the Bank and the Company will continue to exceed all regulatory capital requirements under the new rule.