XML 38 R23.htm IDEA: XBRL DOCUMENT v3.3.1.900
Capital Resources
 12 Months Ended
Dec. 31, 2015
Capital Resources [Abstract]  
Capital Resources

Note 14: Capital Resources

Regulatory Capital Requirements: The Company and Bank 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 Companys financial statements. Under capital adequacy guidelines and the regulatory frameworks for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Banks assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Parent Company, like all bank holding companies, is not subject to the prompt corrective action provisions. The Company's and Bank's capital amounts and classification are also subject to qualitative judgment by the regulators about components, risk weightings and other factors.

On July 2, 2013, the Board of Governors of the Federal Reserve Bank issued a final rule implementing a revised regulatory capital framework for U.S. banks in accordance with the Basel III international accord and satisfying related mandates under the Dodd-Frank Wall Street Reform and Consumer Protection Act. The revised regulatory capital framework (the "Basel III Capital Rules") substantially revised the risk based capital requirements applicable to bank holding companies and depository institutions by defining the components of capital and addressing other issues affecting the numerator in banking institutions' regulatory capital ratios, addressing risk weights and other issues affecting the denominator in banking institutions' regulatory capital ratios and replacing the existing risk weighting approach with a more risk sensitive approach. The final rules also established a "capital conservation buffer" of 2.5% above new regulatory minimum capital ratios, and when fully effective in 2019, will result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) a Tier 1 risk-based capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%. The new capital conservation buffer requirement will be phased in beginning in January 2016 at 0.625% of risk-weighted assets and increases each year until fully implemented in January 2019. An institution is subject to limitations on paying dividends, engaging in share repurchase, and paying discretionary bonuses if its capital level falls below the buffer amount. These limitations will establish a maximum percentage of eligible retained income that can be utilized for such activities. The Basel III Capital Rules became effective for the Company on January 1, 2015.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios as set forth in the table below. As of December 31, 2015, the Company and the Bank exceeded all capital adequacy requirements to which they are subject. As of December 31, 2015, the most recent notification from the federal regulators categorized the Bank as well-capitalized. The rules also added a new risk-weighted capital measure Common Equity Tier 1 ("CET1"). The new Basel III capital adequacy guidelines require all banks and bank holding companies to maintain minimum capital ratios depicted in the table below:

            Adequately     Adequately          
            Capitalized     Capitalized          
            Basel III     Basel III          
    Actual     Phase-In Schedule     Fully Phased-In     Well Capitalized  
As of December 31, 2015   Amount Ratio     Amount Ratio     Amount Ratio     Amount Ratio  
Total Capital                                
(To Risk-Weighted Assets)                                
Consolidated $ 160,042 17.12 % $ 74,793 8.0 % $ 98,166 10.5 %   N/A    
Bank $ 161,905 17.34 % $ 74,713 8.0 % $ 98,060 10.5 % $ 93,391 10.0 %
 
Common Equity Tier 1                                
(To Risk-Weighted Assets)                                
Consolidated $ 145,400 15.55 % $ 42,071 4.5 % $ 65,444 7.0 %   N/A    
Bank $ 147,263 15.77 % $ 42,026 4.5 % $ 65,374 7.0 % $ 60,704 6.5 %
 
Tier 1 Capital                                
(To Risk-Weighted Assets)                                
Consolidated $ 145,400 15.55 % $ 56,095 6.0 % $ 79,468 8.5 %   N/A    
Bank $ 147,263 15.77 % $ 56,035 6.0 % $ 79,382 8.5 % $ 74,713 8.0 %
 
Leverage Capital Ratio                                
Total Capital                                
(To Total Assets for Leverage Ratio)                                
Consolidated $ 145,400 9.37 % $ 62,087 4.0 % $ 62,087 4.0 %   N/A    
Bank $ 147,263 9.49 % $ 62,050 4.0 % $ 62,050 4.0 % $ 77,563 5.0 %
 
            Adequately                  
    Actual     Capitalized     Well Capitalized          
As of December 31, 2014   Amount Ratio     Amount Ratio     Amount Ratio          
Total Capital                                
(To Risk-Weighted Assets)                                
Consolidated $ 148,188 17.24 % $ 68,766 8.0 %   N/A            
Bank $ 149,546 17.42 % $ 68,697 8.0 % $ 85,871 10.0 %        
Tier 1 Capital                                
(To Risk-Weighted Assets)                                
Consolidated $ 134,099 15.60 % $ 34,383 4.0 %   N/A            
Bank $ 135,457 15.77 % $ 34,348 4.0 % $ 51,522 6.0 %        
Tier 1 Capital                                
(To Average Assets)                                
Consolidated $ 134,099 9.30 % $ 57,689 4.0 %   N/A            
Bank $ 135,457 9.40 % $ 57,656 4.0 % $ 72,070 5.0 %    

 

Dividend Limitations: Dividends paid by the Bank are the primary source of funds available to the Company for payment of dividends to its shareholders. The Bank is subject to certain requirements imposed by federal banking laws and regulations. These requirements, among other things, establish minimum levels of capital and restrict the amount of dividends that may be distributed by the Bank to the Company. At December 31, 2015, the Bank had $68,514 available for dividends that could be paid without prior regulatory approval.

Stock Repurchase Plan: In August 2008, the Company's Board of Directors approved a program to repurchase up to 450,000 shares of the Company's common stock, or approximately 10.2% of the shares then currently outstanding. The stock repurchase program became effective as of August 21, 2008, and was authorized to continue for a period of up to twenty-four consecutive months. In August of 2010, the Company's Board of Directors authorized the continuance of this program through August 17, 2012. In August of 2012, the Company's Board of Directors authorized the continuance of this program through August 17, 2014. In July of 2014, the Company's Board of Directors authorized the continuance of this program through August 17, 2016. Depending on market conditions and other factors, these purchases may be commenced or suspended at any time, or from time to time, without prior notice and may be made in the open market or through privately negotiated transactions.

As of December 31, 2015, the Company had repurchased 158,413 shares of stock under this plan, at a total cost of $2,968 and an average price of $18.74 per share. During 2015, the Company repurchased 656 shares under the plan. The Company records repurchased shares as treasury stock.