REGULATORY CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2013

REGULATORY CAPITAL REQUIREMENTS [Abstract]

REGULATORY CAPITAL REQUIREMENTS

(17)REGULATORY CAPITAL REQUIREMENTS

The Corporation 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 consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank's assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The 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 Corporation and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital to risk-weighted assets, and of Tier 1 capital to average assets (all as defined in the applicable regulations).  Management believes that, as of December 31, 2013 and 2012, the Corporation and the Bank met all capital adequacy requirements to which they were subject.

As of December 31, 2013, the most recent notification from the Federal Reserve Bank of New York 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 1 risk-based and Tier 1 leverage ratios as set forth in the table below.  There have been no conditions or events since that notification that management believes have changed the Bank's or the Corporation's capital category.

The Corporation’s principal source of funds for dividend payments is dividends received from the Bank.  Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies.  Under these regulations, the amount of dividends that may be paid in any calendar year is limited to the current year’s net income, combined with the retained net income of the preceding two years, subject to the capital requirements in the table below.  During 2014, the Bank could, without prior approval, declare dividends of approximately $8.5 million plus any 2014 net income retained to the date of the dividend declaration.

The actual capital amounts and ratios of the Corporation and the Bank are presented in the following table:

	Actual					Required To Be Adequately Capitalized					Required To Be Well Capitalized
As of December 31, 2013	Amount		Ratio			Amount		Ratio			Amount			Ratio
Total Capital (to Risk Weighted Assets):
Consolidated	$	126,298,617		12.10	%	$	83,483,686		8.00	%		N/	A		N/	A
Bank	$	121,221,937		11.63	%	$	83,368,967		8.00	%	$	104,211,209			10.00	%
Tier 1 Capital (to Risk Weighted Assets):
Consolidated	$	110,260,258		10.57	%	$	41,741,843		4.00	%		N/	A		N/	A
Bank	$	105,239,348		10.10	%	$	41,684,484		4.00	%	$	62,526,725			6.00	%
Tier 1 Capital (to Average Assets):
Consolidated	$	110,260,258		8.08	%	$	40,940,320		3.00	%		N/	A		N/	A
Bank	$	105,239,348		7.72	%	$	40,900,388		3.00	%	$	68,167,313			5.00	%

As of December 31, 2012
Total Capital (to Risk Weighted Assets):
Consolidated	$	119,894,319	13.10	%	$	73,208,463	8.00	%		N/	A	N/	A
Bank	$	115,391,331	12.64	%	$	73,044,522	8.00	%	$	91,305,653		10.00	%
Tier 1 Capital (to Risk Weighted Assets):
Consolidated	$	106,924,553	11.68	%	$	36,604,232	4.00	%		N/	A	N/	A
Bank	$	102,459,917	11.22	%	$	36,522,261	4.00	%	$	54,783,392		6.00	%
Tier 1 Capital (to Average Assets):
Consolidated	$	106,924,553	8.74	%	$	36,701,105	3.00	%		N/	A	N/	A
Bank	$	102,459,917	8.39	%	$	36,630,566	3.00	%	$	61,050,944		5.00	%