Regulatory Capital Matters

3 Months Ended

Mar. 31, 2012

Regulatory Capital Matters [Abstract]

Regulatory Capital Matters [Text Block]

Note L – Regulatory Capital Matters

The following table summarizes the amounts (in $1,000s) and related ratios of Capitol's consolidated regulatory capital position:

	March 31,				December 31,
	2012				2011
Tier 1 capital to average adjusted total assets:
Minimum required amount	≥	$	84,709		≥	$	92,356
Actual amount		$	(121,513	)		$	(109,146	)
Ratio			(5.74	)%			(4.73	)%
Tier 1 capital to risk-weighted assets:
Minimum required amount(1)	≥	$	63,789		≥	$	68,615
Actual amount		$	(121,513	)		$	(109,146	)
Ratio			(7.62	)%			(6.36	)%
Combined Tier 1 and Tier 2 capital to risk-    weighted assets:
Minimum required amount(2)	≥	$	127,578		≥	$	137,231
Actual amount		$	(121,513	)		$	(109,146	)
Ratio			(7.62	)%			(6.36	)%

(1)	The minimum required ratio of Tier 1 capital to risk-weighted assets to be considered "adequately-capitalized" is 4%.
(2)	The minimum required ratio of Tier 1 and Tier 2 capital to risk-weighted assets to be considered "adequately-capitalized" is 8%.

Capitol's total risk-based capital ratio at March 31, 2012 and December 31, 2011 was materially and adversely impacted by the exclusion of approximately $169.9 million and $171.5 million, respectively, of previously-qualifying Tier 2 capital, inasmuch as Tier 2 capital is limited to 100% of Tier 1 capital, primarily trust-preferred securities and a portion of the allowance for loan losses.  The Tier 1 capital deficit resulted primarily from operating losses.  Capitol's Tier 1 capital will need to increase to a positive level in order to allow for the inclusion of trust-preferred securities in Tier 2 capital for regulatory capital computation purposes.

The preceding summary indicates that Capitol, on a consolidated basis, was classified as less than "adequately-capitalized" at March 31, 2012 for regulatory purposes.  In addition, several of its bank subsidiaries had capital levels resulting in classification as "undercapitalized" or "significantly-undercapitalized" at that date.  Banks and bank holding companies which are less than "adequately-capitalized" are subject to increased regulatory oversight, requirements and limitations.  Regarding banks classified as "undercapitalized" or "significantly-undercapitalized," or otherwise noncompliant with formal regulatory agreements, management is taking appropriate action to improve such capital classifications and related compliance in the future.

Regulatory capital ratios of the banks are set forth on page 44 on this document.