XML 65 R29.htm IDEA: XBRL DOCUMENT v2.4.1.9
Regulatory Capital Requirements and Restrictions
 12 Months Ended
Dec. 31, 2014
Regulatory Capital Requirements and Restrictions
Note 21. Regulatory Capital Requirements and Restrictions

The Company and the Bank are subject to various regulatory capital requirements administered by state and 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 Company’s consolidated financial statements. Under the capital adequacy guidelines and the regulatory framework for prompt corrective action, which applies only to the Bank, the Bank must meet specific capital guidelines that involve quantitative measures of the entity’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 the regulators about components, risk weightings, and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios for total and Tier 1 capital, as defined in the regulations, to risk-weighted assets, as defined, and of Tier 1 capital, as defined, to average assets, as defined.

To be categorized as well capitalized, the Bank must maintain minimum total capital to risk-weighted assets, Tier 1 capital to risk-weighted assets, and Tier 1 capital to average assets (leverage) ratios established by banking regulators. As of December 31, 2014, the Company and the Bank continued to meet all capital adequacy requirements. As of December 31, 2014, the most recent notifications from regulators continued to categorize the Bank as well capitalized under the regulatory framework for prompt corrective action. Management believes there have been no conditions or events since those notifications that would change the Bank’s classification.

The following table presents the Company’s and the Bank’s capital ratios as of the dates indicated:

 

     December 31, 2014  
     Actual     For Capital
Adequacy
Purposes		     To Be Well
Capitalized Under
Prompt Corrective
Action Provisions		  
(Amounts in thousands)    Amount      Ratio     Amount      Ratio     Amount      Ratio  

Total Capital to Risk-Weighted Assets

                

First Community Bancshares, Inc.

    $ 284,999         17.68 %    $ 128,962         8.00 %      N/A         N/A   

First Community Bank

      251,256         15.73 %      127,761         8.00 %    $ 159,701         10.00 % 

Tier 1 Capital to Risk-Weighted Assets

                

First Community Bancshares, Inc.

      264,838         16.43 %      64,481         4.00 %      N/A         N/A   

First Community Bank

      231,286         14.48 %      63,881         4.00 %      95,821         6.00 % 

Tier 1 Capital to Average Assets (Leverage)

                

First Community Bancshares, Inc.

      264,838         10.12 %      104,679         4.00 %      N/A         N/A   

First Community Bank

      231,286         8.87 %      104,330         4.00 %      130,412         5.00 % 

 

     December 31, 2013  
     Actual     For Capital
Adequacy
Purposes		     To Be Well
Capitalized Under
Prompt Corrective
Action Provisions		  
(Amounts in thousands)    Amount      Ratio     Amount      Ratio     Amount      Ratio  

Total Capital to Risk-Weighted Assets

                

First Community Bancshares, Inc.

    $ 270,636         16.44 %    $ 131,694         8.00 %      N/A         N/A   

First Community Bank

      236,699         14.55 %      130,141         8.00 %    $ 162,676         10.00 % 

Tier 1 Capital to Risk-Weighted Assets

                

First Community Bancshares, Inc.

      250,012         15.19 %      65,847         4.00 %      N/A         N/A   

First Community Bank

      216,314         13.30 %      65,070         4.00 %      97,606         6.00 % 

Tier 1 Capital to Average Assets (Leverage)

                

First Community Bancshares, Inc.

      250,012         9.95 %      100,489         4.00 %      N/A         N/A   

First Community Bank

      216,314         8.63 %      100,219         4.00 %      125,274         5.00 % 

 

The primary source of funds for dividends paid by the Company to shareholders is dividends received from the Bank, which are subject to banking regulation restrictions. Approval by regulatory authorities is required to declare dividends if the dividends are to be paid in something other than cash, if the cumulative dividend payment exceeds the net retained income of the current year to date plus the retained net income of the preceding two years, or if payment of the dividend would cause the Bank to become undercapitalized.

The Bank issues mortgages insured by the U.S. Department of Housing and Urban Development (“HUD”) as a HUD-approved Title II Supervised Mortgagee. A Title II Supervised Mortgagee must maintain an adjusted minimum net worth of $1 million. Not complying with this minimum net worth requirement may result in penalties, such as the revocation of the Bank’s license to issue HUD insured mortgages, which may have a material adverse effect on the Company’s financial condition and results of operations. The Bank’s adjusted net worth was $200.00 million as of December 31, 2014, and $201.92 million as of December 31, 2013, which significantly exceeds minimum net worth requirements.