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Minimum Regulatory Capital Requirements
 12 Months Ended
Dec. 31, 2014
Banking and Thrift [Abstract]  
Regulatory Capital Requirements under Banking Regulations [Text Block]
Note 16.
Minimum Regulatory Capital Requirements
 
Cornerstone (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the Tennessee Department of Financial Institutions and 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 Cornerstone’s and the Bank's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, Cornerstone and the Bank must meet specific capital guidelines that involve quantitative measures of Cornerstone’s and the Bank's assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. Cornerstone’s and the Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.
 
Quantitative measures established by regulation to ensure capital adequacy require Cornerstone and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital (as defined) to average assets (as defined). Management believes, as of December 31, 2014 and 2013, that Cornerstone and the Bank meet all capital adequacy requirements to which they are subject.
 
During 2013, the Federal Reserve released final United States Basel III regulatory capital rules implementing the global regulatory capital reforms of Basel III and certain changes required by the Dodd-Frank Wall Street Reform and Consumer Protection Act. The FDIC and OCC also approved the final rule during 2013. The rule applies to all banking organizations that are currently subject to regulatory capital requirements, as well as certain savings and loan holding companies. The rule strengthens the definition of regulatory capital, increases risk-based capital requirements, and makes selected changes to the calculation of risk-weighted assets. The rule becomes effective January 1, 2015, for Cornerstone and most banking organizations subject to a transition period for several aspects of the rule including the new minimum capital ratio requirements, the capital conservation buffer, and the regulatory capital adjustments and deductions.
 
As of December 31, 2014, the most recent notification from the Federal Deposit Insurance Corporation (FDIC) categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain minimum total-risk based, Tier I risk-based, and Tier I leverage ratios as set forth in the following tables. There are no conditions or events since that notification that management believes have changed the Bank's prompt corrective action category. Cornerstone’s and the Bank's capital amounts and ratios are also presented in the table. Dollar amounts are presented in thousands.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
To be Well
Capitalized Under
 
 
 
 
 
 
 
 
 
For Capital
 
Prompt Corrective
 
 
 
Actual
 
Adequacy Purposes
 
Action Provisions
 
 
 
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
 
As of December 31, 2014:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total capital to risk-weighted assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated
 
$
36,107
 
 
11.6
%
$
24,817
 
 
8.0
%
 
N/A
 
 
N/A
 
Cornerstone Community Bank
 
 
41,670
 
 
13.5
%
 
24,784
 
 
8.0
%
$
30,981
 
 
10.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier I capital to risk-weighted assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated
 
 
32,612
 
 
10.5
%
 
12,408
 
 
4.0
%
 
N/A
 
 
N/A
 
Cornerstone Community Bank
 
 
38,175
 
 
12.3
%
 
12,392
 
 
4.0
%
 
18,588
 
 
6.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier I capital to average assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated
 
 
32,612
 
 
8.0
%
 
16,304
 
 
4.0
%
 
N/A
 
 
N/A
 
Cornerstone Community Bank
 
 
38,175
 
 
9.4
%
 
16,287
 
 
4.0
%
 
20,359
 
 
5.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
To be Well
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Capitalized Under
 
 
 
 
 
 
 
 
 
For Capital
 
Prompt Corrective
 
 
 
Actual
 
Adequacy Purposes
 
Action Provisions
 
 
 
Amount
 
Ratio
 
Amount
 
Ratio
 
Amount
 
Ratio
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of December 31, 2013:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total capital to risk-weighted assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated
 
$
34,820
 
 
11.3
%
$
24,634
 
 
8.0
%
 
N/A
 
 
N/A
 
Cornerstone Community Bank
 
 
39,342
 
 
12.8
%
 
24,552
 
 
8.0
%
$
30,691
 
 
10.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier I capital to risk-weighted assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated
 
 
31,617
 
 
10.3
%
 
12,317
 
 
4.0
%
 
N/A
 
 
N/A
 
Cornerstone Community Bank
 
 
36,139
 
 
11.8
%
 
12,276
 
 
4.0
%
 
18,414
 
 
6.0
%
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Tier I capital to average assets:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Consolidated
 
 
31,617
 
 
7.5
%
 
16,885
 
 
4.0
%
 
N/A
 
 
N/A
 
Cornerstone Community Bank
 
 
36,139
 
 
8.6
%
 
16,870
 
 
4.0
%
 
21,087
 
 
5.0
%