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Regulatory Capital Requirements and Restrictions
 12 Months Ended
Dec. 31, 2015
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 balance sheet assets and 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.

Basel III Capital Rules became effective on January 1, 2015, subject to a four-year phase-in period. Quantitative measures established by the Basel III Capital Rules to ensure capital adequacy require the Company and the Bank to maintain minimum amounts and ratios of common equity Tier 1 capital, total capital, and Tier 1 capital, as defined in the regulations, to risk-weighted assets, as defined, and of Tier 1 capital to adjusted quarterly average assets, as defined.

The following table presents actual and required capital ratios as of December 31, 2015, under the Basel III Capital Rules. The minimum required capital amounts presented include the minimum capital levels as of December 31, 2015, based on the phase-in provisions of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019, when the Basel III Capital Rules are fully phased in. A detailed description of the Basel III Capital Rules is included in Item 1, “Capital Adequacy Requirements” in Part I of this report.

 

     December 31, 2015  
     Actual     Minimum Capital
Required-Basel III
Phase-In Schedule		     Minimum Capital
Required-Basel III
Fully Phased-In		     To Be Well
Capitalized Under
Prompt Corrective
Action Provisions		  
(Amounts in thousands)    Amount      Ratio     Amount      Ratio     Amount      Ratio     Amount      Ratio  

Common Equity Tier 1 Ratio

                     

First Community Bancshares, Inc.

    $ 246,237         14.54 %    $ 76,196         4.50 %    $ 118,527         7.00 %      NA         NA   

First Community Bank

      228,669         13.60 %      75,682         4.50 %      117,728         7.00 %      109,319         6.50 % 

Total Capital to Risk-Weighted Assets

                     

First Community Bancshares, Inc.

      269,998         15.95 %      135,459         8.00 %      177,791         10.50 %      NA         NA   

First Community Bank

      249,228         14.82 %      134,546         8.00 %      176,592         10.50 %      168,183         10.00 % 

Tier 1 Capital to Risk-Weighted Assets

                     

First Community Bancshares, Inc.

      249,436         14.73 %      101,595         6.00 %      143,926         8.50 %      NA         NA   

First Community Bank

      228,669         13.60 %      100,910         6.00 %      142,955         8.50 %      134,546         8.00 % 

Tier 1 Capital to Average Assets (Leverage)

                     

First Community Bancshares, Inc.

      249,436         10.62 %      93,935         4.00 %      93,935         4.00 %      NA         NA   

First Community Bank

      228,669         9.77 %      93,616         4.00 %      93,616         4.00 %      117,020         5.00 % 

 

The following table presents the Company’s and the Bank’s actual and required capital ratios as of December 31, 2014, under the regulatory capital rules then in effect.

 

     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 % 

As of December 31, 2015, the Company and the Bank continued to meet all capital adequacy requirements. As of December 31, 2015, 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. Additionally, our capital ratios were in excess of the minimum standards under the Basel III Capital Rules on a fully phased-in basis, if such requirements were in effect, as of December 31, 2015.

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.