RESTRICTIONS ON RETAINED EARNINGS

12 Months Ended

Dec. 31, 2011

Restrictions On Retained Earnings

RESTRICTIONS ON RETAINED EARNINGS

NOTE 21 RESTRICTIONS ON RETAINED EARNINGS

The Bank is restricted by banking regulations from making dividend distributions above prescribed amounts and is limited in making loans and advances to PSB. At December 31, 2011, management believes that maintaining the regulatory framework of the Bank at the well-capitalized level will effectively restrict potential dividends from the Bank to an amount less than $20,051. Furthermore, any Bank dividend distributions to PSB above customary levels are subject to approval by the FDIC, the Bank’s primary federal regulator.