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REGULATORY MATTERS
 12 Months Ended
Dec. 31, 2015
REGULATORY MATTERS [Abstract]  
REGULATORY MATTERS
14. REGULATORY MATTERS
 
Dividend Restrictions:
 
The approval of the Federal Reserve Board is required for a bank to pay dividends up to the Company if the total of all dividends declared in any calendar year exceeds the Bank’s net income (as defined) for that year combined with its retained net income for the preceding two calendar years. Under this formula, the Bank can declare dividends in 2016 without approval of the FRB or PDB of approximately $6,340,000, plus the Bank’s 2016 year-to-date net income at the time of the dividend declaration.
 
Loans:
 
The Bank is subject to regulatory restrictions which limit its ability to loan funds to the Company.  At December 31, 2015, the Bank’s regulatory lending limit amounted to approximately $16,235,000.
 
Regulatory Capital Requirements:
 
Federal regulations require the Company and the Bank to maintain minimum amounts of capital. Specifically, each is required to maintain certain minimum dollar amounts and ratios of Total, Tier I and Common Equity Tier I capital to risk-weighted assets and of Tier I capital to average total assets.
 
In addition to the capital requirements, the Federal Deposit Insurance Corporation Improvement Act (FDICIA) established five capital categories ranging from “well capitalized” to “critically under-capitalized.” Should any institution fail to meet the requirements to be considered “adequately capitalized”, it would become subject to a series of increasingly restrictive regulatory actions.
 
As of December 31, 2015 and 2014, the FRB categorized the Company and the Bank as well capitalized, under the regulatory framework for prompt corrective action.  To be categorized as a well capitalized financial institution, Total risk-based, Tier I risk-based, Common Equity Tier I risk based and Tier I leverage capital ratios must be at least 10%, 8%, 6.5% and 5%, respectively.
 
The Company and Bank’s computed risk-based capital ratios are as follows as of December 31, 2015 and 2014 (dollars in thousands):
 
 
Actual
For Capital Adequacy
Purposes
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
2015
Amount
Ratio
Amount
Ratio
Amount
Ratio
Total Capital (to Risk Weighted Assets):
Company
 $         114,886
16.23%
 $            56,630
8.00%
 $      70,787
10.00%
  Bank
 $         108,232
15.34%
 $            56,443
8.00%
 $      70,554
10.00%
             
Tier 1 Capital (to Risk Weighted Assets):
Company
 $         107,612
15.20%
 $            42,472
6.00%
 $      56,630
8.00%
  Bank
 $         100,958
14.31%
 $            42,332
6.00%
 $      56,443
8.00%
             
Common Equity Tier 1 Capital (to Risk Weighted Assets):
Company
 $         100,112
14.14%
 $            31,854
4.50%
 $      46,012
6.50%
  Bank
 $         100,958
14.31%
 $            31,749
4.50%
 $      45,860
6.50%
             
Tier 1 Capital (to Average Assets):
Company
 $         107,612
11.01%
 $            39,083
4.00%
 $      48,854
5.00%
  Bank
 $         100,958
10.35%
 $            39,006
4.00%
 $      48,757
5.00%
             
 
 
Actual
For Capital Adequacy
Purposes
To Be Well Capitalized
Under Prompt Corrective
Action Provisions
2014
Amount
Ratio
Amount
Ratio
Amount
Ratio
Total Capital (to Risk Weighted Assets):
Company
 $         106,891
18.55%
 $            46,105
8.00%
 $      57,631
10.00%
  Bank
 $           97,498
16.97%
 $            45,969
8.00%
 $      57,462
10.00%
             
Tier 1 Capital (to Risk Weighted Assets):
Company
 $           99,692
17.30%
 $            23,053
4.00%
 $      34,579
6.00%
  Bank
 $           90,500
15.75%
 $            22,985
4.00%
 $      34,477
6.00%
             
Common Equity Tier 1 Capital (to Risk Weighted Assets):
Company
 N/A
 N/A
 N/A
 N/A
 N/A
 N/A
  Bank
 N/A
 N/A
 N/A
 N/A
 N/A
 N/A
             
Tier 1 Capital (to Average Assets):
Company
 $           99,692
10.99%
 $            36,272
4.00%
 $      45,341
5.00%
  Bank
 $           90,500
10.00%
 $            36,218
4.00%
 $      45,273
5.00%
 
This annual report has not been reviewed, or confirmed for accuracy or relevance, by the Federal Deposit Insurance Corporation.