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REGULATORY MATTERS:
 12 Months Ended
Dec. 31, 2011
REGULATORY MATTERS:  
REGULATORY MATTERS:

 

17.     REGULATORY MATTERS:

 

The Corporation and its bank affiliates are subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory—and possibly additional discretionary—actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s financial statements.

 

Further, the Corporation’s primary source of funds to pay dividends to shareholders is dividends from its subsidiary banks and compliance with these capital requirements can affect the ability of the Corporation and its banking affiliates to pay dividends. At December 31, 2011, approximately $45.3 million of undistributed earnings of the subsidiary banks, included in consolidated retained earnings, were available for distribution to the Corporation without regulatory approval. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation and Banks must meet specific capital guidelines that involve quantitative measures of the Corporation’s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Corporation’s and Banks’ capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

 

Quantitative measures established by regulation to ensure capital adequacy require the Corporation and Banks to maintain minimum amounts and ratios of Total and Tier I Capital to risk-weighted assets, and of Tier I Capital to average assets. Management believes, as of December 31, 2011 and 2010, that the Corporation meets all capital adequacy requirements to which it is subject.

 

As of December 31, 2011, the most recent notification from the respective regulatory agencies categorized the subsidiary banks as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the banks must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the table. There are no conditions or events since that notification that management believes have changed the banks’ category.

 

The following table presents the actual and required capital amounts and related ratios for the Corporation and First Financial Bank, N.A., at year-end 2011 and 2010.

 

 

 

 

 

 

 

 

 

 

 

To Be Well Capitalized

 

 

 

 

 

 

 

For Capital

 

Under Promt Corrective

 

 

 

Actual

 

Adequacy Purposes

 

Action Provisions

 

(Dollar amounts in thousands) 

 

Amount

 

Ratio

 

Amount

 

Ratio

 

Amount

 

Ratio

 

Total risk-based capital

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporation — 2011

 

$

334,414

 

15.08

%

$

177,420

 

8.00

%

N/A

 

N/A

 

Corporation — 2010

 

$

341,965

 

17.82

%

$

153,497

 

8.00

%

N/A

 

N/A

 

First Financial Bank — 2011

 

315,676

 

14.71

%

171,669

 

8.00

%

214,586

 

10.00

%

First Financial Bank — 2010

 

320,247

 

17.29

%

148,185

 

8.00

%

185,231

 

10.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I risk-based capital

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporation — 2011

 

$

315,173

 

14.21

%

$

88,710

 

4.00

%

N/A

 

N/A

 

Corporation — 2010

 

$

319,629

 

16.66

%

$

76,748

 

4.00

%

N/A

 

N/A

 

First Financial Bank — 2011

 

299,578

 

13.96

%

85,835

 

4.00

%

128,752

 

6.00

%

First Financial Bank — 2010

 

301,232

 

16.26

%

74,093

 

4.00

%

111,139

 

6.00

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tier I leverage capital

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporation — 2011

 

$

315,173

 

12.73

%

$

98,999

 

4.00

%

N/A

 

N/A

 

Corporation — 2010

 

$

319,629

 

12.68

%

$

100,847

 

4.00

%

N/A

 

N/A

 

First Financial Bank — 2011

 

299,578

 

12.51

%

95,791

 

4.00

%

119,739

 

5.00

%

First Financial Bank — 2010

 

301,232

 

12.37

%

97,420

 

4.00

%

121,776

 

5.00

%