Regulatory Capital

12 Months Ended

Dec. 31, 2014

Note 20 – Regulatory Capital

Horizon and the Bank are subject to various regulatory capital requirements administered by the federal banking agencies and are assigned to a capital category. The assigned capital category is largely determined by three ratios that are calculated according to the regulations: total risk adjusted capital, Tier I capital and Tier I leverage ratios. The ratios are intended to measure capital relative to assets and credit risk associated with those assets and off-balance sheet exposures of the entity. The capital category assigned to an entity can also be affected by qualitative judgments made by regulatory agencies about the risk inherent in the entity’s activities that are not part of the calculated ratios. Furthermore, the regulators for the Company and the Bank could require adjustments to regulator capital not reflected in these financial statements.

There are five capital categories defined in the regulations, ranging from well capitalized to critically undercapitalized. Classification of a bank in any of the undercapitalized categories can result in actions by regulators that could have a material effect on a bank’s operations. At December 31, 2014 and 2013, Horizon and the Bank were categorized as well capitalized and met all subject capital adequacy requirements.


						For Capital¹					For Well¹
	Actual					Adequacy Purposes					Capitalized Purposes
	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 31, 2014
Total capital¹ (to risk-weighted assets)
Consolidated	$	212,276		14.48	%	$	117,280		8.00	%		N/A		N/A
Bank		192,604		13.08	%		117,801		8.00	%	$	147,251		10.00	%
Tier 1 capital¹ (to risk-weighted assets)
Consolidated		195,775		13.35	%		58,659		4.00	%		N/A		N/A
Bank		176,103		11.96	%		58,897		4.00	%		88,346		6.00	%
Tier 1 capital¹ (to average assets)
Consolidated		195,775		9.76	%		80,236		4.00	%		N/A		N/A
Bank		176,103		8.80	%		80,047		4.00	%		100,059		5.00	%
As of December 31, 2013
Total capital¹ (to risk-weighted assets)
Consolidated	$	192,904		16.33	%	$	94,503		8.00	%		N/A		N/A
Bank		173,634		14.67	%		94,688		8.00	%	$	118,360		10.00	%
Tier 1 capital¹ (to risk-weighted assets)
Consolidated		178,115		15.08	%		47,245		4.00	%		N/A		N/A
Bank		158,827		13.42	%		47,340		4.00	%		71,011		6.00	%
Tier 1 capital¹ (to average assets)
Consolidated		178,115		10.28	%		69,305		4.00	%		N/A		N/A
Bank		158,827		9.18	%		69,206		4.00	%		86,507		5.00	%

¹	As defined by regulatory agencies

- Definition

The entire disclosure for banks, savings institutions, and credit unions, for regulatory capital requirements imposed by the Federal Reserve System (FRB), the Federal Deposit Insurance Corporation (FDIC), the Office of Thrift Supervision (OTS) or for any state imposed capital requirements, as applicable. The disclosure may include (1) a description of regulatory capital requirements (a) for capital adequacy purposes and (b) established by the prompt corrective action provisions of Section 38 of the Federal Depository Insurance Act; (2) the actual or possible material effects of noncompliance with such requirements; (3) whether the entity is in compliance with the regulatory capital requirements including (a) required and actual ratios and amounts of Tier 1 leverage, Tier 1 risk-based, and total risk-based capital, tangible capital (for savings institutions), and Tier 3 capital for market risk (for certain banks and bank holding companies), (b) factors that may significantly affect capital adequacy; (4) the prompt corrective action category in which the entity was classified as of its most recent notification; (5) whether management believes any conditions or events since notification have changed the entity's category. Also may include additional information that might be disclosed in situations where substantial doubt about the entity's ability to continue as a going concern for a reasonable period of time.

+ References

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+ Details