Capital Requirements

3 Months Ended

Mar. 31, 2012

Capital Requirements [Abstract]

Capital Requirements

Note 8—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 March 31, 2012, the Bank’s capital ratios categorized the Bank as adequately capitalized under the regulatory framework for prompt corrective action.

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 Action Plans 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 March 31, 2012, the Bank was not in compliance with these capital requirements. The Bank’s actual capital amounts, ratios and minimum capital requirements per the Action Plans are presented in the table below. Dollar amounts are presented in thousands.

	Actual					To Comply With Minimum  Capital Requirements Per Consent Order					Excess (Deficit) To Comply With Requirements Per Consent Order
March 31, 2012	Amount		Ratio			Amount		Ratio			Amount			Ratio
Total Capital to Risk Weighted Assets	$	6,814		8.64	%	$	9,469		12.00	%	$	(4,677	)		(3.36	)%
Tier 1 Capital to Risk Weighted Assets	$	5,807		7.36	%	$	7,891		10.00	%	$	(2,084	)		(2.64	)%
Tier 1 Capital to Average Assets—Leverage	$	5,807		4.43	%	$	10,484		8.00	%	$	(4,677	)		(3.57	)%

	Actual					To Comply With Minimum Capital Requirements Per Consent Order					Excess (Deficit) To Comply With Requirements Per Consent 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 2012 or 2011. The Company’s principal source of funds is dividends received from the Bank. In accordance with the Action Plans 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 debt.