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Regulatory Matters
 12 Months Ended
Dec. 31, 2012
Regulatory Matters [Abstract]  
Regulatory Matters

Note 17 - Regulatory matters

The Bank is 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 Company’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’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 Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier I capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I capital to average assets (as defined). Management believes, as of December 31, 2012 that the Bank meets all capital adequacy requirements to which it is subject.  The Bank’s actual regulatory capital amounts and ratios for December 31, 2012 and 2011 are also presented in the table below.

 

As of December 31, 2012, the most recent notification from the Federal Reserve Bank of Richmond categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. 

 

 

 

To be categorized as well capitalized, the Bank must maintain minimum total risk-based, Tier I risk-based and Tier I leverage ratios as set forth in the following table.  There are no conditions or events since that notification that management believes have changed the Bank’s category.

 

The capital ratios for the Bank for 2012 and 2011 are set forth in the following table:

 

 

December 31, 2012

 

 

 

 

 

 

 

 

 

To Be Well

 

 

 

 

 

 

 

 

 

Capitalized Under

 

 

 

 

For Capital

 

Prompt Corrective

 

 

Actual

 

Adequacy Purposes

 

Action Provisions

 

 

Amount

 

Ratio

 

Amount

 

Ratio

 

Amount

 

Ratio

Total capital

 

 

 

 

 

 

 

 

 

 

 

 

(to risk-weighted assets)
$
40,137 

 
12.40% 

 
$
25,892 

 

> 8.00%

 
$
32,366 

 

> 10.00%

Tier I capital

 

 

 

 

 

 

 

 

 

 

 

 

(to risk-weighted assets)
$
36,073 

 
11.15% 

 
$
12,946 

 

> 4.00%

 
$
19,419 

 

> 6.00%

Tier I capital (leverage)

 

 

 

 

 

 

 

 

 

 

 

 

(to average assets)
$
36,073 

 
8.41% 

 
$
17,154 

 

> 4.00%

 
$
21,443 

 

> 5.00%

 

 

 

December 31, 2011

 

 

 

 

 

 

 

 

 

 

To Be Well

 

 

 

 

 

 

 

 

 

 

Capitalized Under

 

 

 

 

For Capital

 

Prompt Corrective

 

 

Actual

 

Adequacy Purposes

 

Action Provisions

 

 

Amount

 

Ratio

 

Amount

 

Ratio

 

Amount

 

Ratio

Total capital

 

 

 

 

 

 

 

 

 

 

 

 

(to risk-weighted assets)
$
37,452 

 
11.79% 

 
$
25,415 

 

> 8.00%

 
$
31,768 

 

> 10.00%

Tier I capital

 

 

 

 

 

 

 

 

 

 

 

 

(to risk-weighted assets)
$
33,461 

 
10.53% 

 
$
12,707 

 

> 4.00%

 
$
19,061 

 

> 6.00%

Tier I capital (leverage)

 

 

 

 

 

 

 

 

 

 

 

 

(to average assets)
$
33,461 

 
7.82% 

 
$
17,107 

 

> 4.00%

 
$
21,384 

 

> 5.00%

 

 

The above tables set forth the capital position and analysis for the Bank only.  Because total assets on a consolidated basis are less than $500,000, Financial is not subject to the consolidated capital requirements imposed by the Bank Holding Company Act.  Consequently, Financial does not calculate its financial ratios on a consolidated basis.  If calculated, the capital ratios for the Company on a consolidated basis would no longer be comparable to the capital ratios of the Bank because the proceeds of the private placement do not qualify as equity capital on a consolidated basis.