Capital Requirements

12 Months Ended

Dec. 31, 2011

Deposits/Federal Home Loan Bank Advances/Capital Requirements/Securities Sold Under Repurchase Agreements [Abstract]

CAPITAL REQUIREMENTS

NOTE 16 – CAPITAL REQUIREMENTS

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s 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 Bank’s capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of Total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital to average assets (as defined).

As of December 31, 2011, the most recent notification from the Federal Deposit Insurance Corporation (FDIC) categorized the Bank as “under-capitalized” under the regulatory framework for prompt corrective action. Undercapitalized depository institutions are subject to restrictions on borrowing from the Federal Reserve System. In addition, undercapitalized depository institutions are subject to growth limitations and are required to submit capital restoration plans.

Failure to meet statutorily mandated capital guidelines or more restrictive ratios separately established for a financial institution (such as those to which the Bank is subject under the Action Plans) could subject a bank or bank holding company to a variety of enforcement remedies, including issuance of a capital directive, the termination of deposit insurance by the FDIC, a prohibition on accepting or renewing brokered deposits, limitations on the rates of interest that the institution may pay on its deposits and other restrictions on its business. As described below, significant additional restrictions can be imposed on FDIC-insured depository institutions that fail to meet applicable capital requirements.

The Order the Bank was issued by regulators requires the Bank to maintain Tier 1 capital to average total assets of 8%, Tier 1 risk based capital to risk-weighted assets of 10% and total risk based capital to total risk weighted assets of 12%. As of December 31, 2011, the Bank was not in compliance with these capital requirements. The Bank’s actual capital amounts, ratios and minimum capital requirements per the Order are presented in the table below. Dollar amounts are presented in thousands.

	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2011	Amount		Ratio			Amount		Ratio			Amount			Ratio
Total Capital to Risk Weighted Assets	$	6,883		7.72	%	$	7,133		8.00	%	$	8,916			10.00	%
Tier 1 Capital to Risk Weighted Assets	$	5,745		6.44	%	$	3,566		4.00	%	$	5,349			6.00	%
Tier 1 Capital to Average Assets—Leverage	$	5,745		4.37	%	$	5,253		4.00	%	$	6,566			5.00	%
	Actual					For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
December 31, 2010	Amount		Ratio			Amount		Ratio			Amount			Ratio
Total Capital to Risk Weighted Assets	$	7,905		8.35	%	$	7,575		8.00	%	$	9,469			10.00	%
Tier 1 Capital to Risk Weighted Assets	$	6,690		7.07	%	$	3,788		4.00	%	$	5,681			6.00	%
Tier 1 Capital to Average Assets—Leverage	$	6,690		4.92	%	$	5,438		4.00	%	$	6,797			5.00	%
	Actual					To Comply With Minimum Capital Requirements Per Order					Excess (Deficit) To Comply With Requirements Per Order
December 31, 2011	Amount		Ratio			Amount		Ratio			Amount			Ratio
Total Capital to Risk Weighted Assets	$	6,883		7.72	%	$	10,699		12.00	%	$	(3,816	)		(4.28	)%
Tier 1 Capital to Risk Weighted Assets	$	5,745		6.44	%	$	8,916		10.00	%	$	(3,171	)		(3.56	)%
Tier 1 Capital to Average Assets—Leverage	$	5,745		4.37	%	$	10,506		8.00	%	$	(4,761	)		(3.63	)%

No cash dividends were paid to stockholders in either 2011 or 2010. The Company’s principal source of funds is dividends received from the Bank. In accordance with the Order with the FDIC and TDFI, no dividend can be paid from the Bank to the holding company without prior approval by the FDIC. In addition, the Company is restricted from paying dividends while deferring interest payments on the subordinated debentures (see Note 11).