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Note 15 - Shareholders' Equity
 12 Months Ended
Dec. 31, 2016
Notes to Financial Statements  
Stockholders' Equity Note Disclosure [Text Block]
15.
SHAREHOLDERS
’ EQUITY
 
Dividends are paid at the discretion of the Company
’s Board of Directors, based on the Company’s operating performance and financial position, including earnings, capital and liquidity. Dividends from the Bank are the Company’s primary source of funds for the payment of dividends to shareholders. In addition, federal and state regulatory agencies have the authority to prevent the Company from paying a dividend to shareholders. During each of the years ended
December
31,
2016
and
2015,
the Company declared dividends of
$0.5
million, or
$0.08
per share.
 
Regulatory Capital
 
As of
January
1,
2015,
the Bank was subject to revised capital requirements as described in the section captioned “
Capital Adequacy Guidelines” included in Part I, Item I of this report.  Under the revised requirements, the Bank is subject to minimum risk-based capital and leverage capital requirements, which are administered by the federal bank regulatory agencies. These capital requirements, as defined by federal regulations, involve quantitative and qualitative measures of assets, liabilities and certain off-balance sheet instruments.  Failure to meet minimum capital requirements can result in certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the financial statements of the Bank and Bancshares, and could impact Bancshares’ ability to pay dividends. Effective
January
1,
2016,
the Bank's minimum risk-based capital requirements include the year
one
phased-in capital conservation buffer of
0.625%.
 As of
December
31,
2016,
the Bank exceeded all applicable minimum capital standards.  In addition, the Bank met applicable regulatory guidelines to be considered well-capitalized as of
December
31,
2016.
  To be categorized in this manner, the Bank maintained common equity Tier
1
risk-based capital, Tier
1
risk-based capital, total risk-based capital and Tier
1
leverage ratios as set forth in the table below.  In addition, the Bank was not subject to any written agreement, order or capital directive or prompt corrective action directive issued by its primary federal regulator to meet and maintain a specific level for any capital measures.  
 
The following table provides the Bank
’s actual regulatory capital amounts and ratios under regulatory capital standards in effect (Basel III) at
December
31,
2016
and
December
31,
2015:
 
   
2016
  
   
Actual Regulatory Capital
    
 
 
 
  
 
 
 
   
Amount
    
Ratio
    
Minimum
Requirement
    
To Be Well
Capitalized
  
   
(Dollars in Thousands)
  
Common equity Tier 1 capital (to risk-weighted assets)
   $
73,433
      
19.01
%
    
5.125
%
    
6.50
%
Tier 1 capital (to risk-weighted assets)
    
73,433
      
19.01
%
    
6.625
%
    
8.00
%
Total capital (to risk-weighted assets)
    
78,279
      
20.26
%
    
8.625
%
    
10.00
%
Tier 1 leverage (to average assets)
    
73,433
      
12.27
%
    
4.00
%
    
5.00
%
 
   
2015
  
   
Actual
Regulatory Capital
    
 
 
 
  
 
 
 
   
Amount
    
Ratio
    
Minimum
Requirement
    
To Be Well
Capitalized
  
   
(Dollars in Thousands)
  
Common equity Tier 1 capital (to risk-weighted assets)
   $
71,887
      
22.19
 %    
4.50
 %    
6.50
 %
Tier 1 capital (to risk-weighted assets)
    
71,887
      
22.19
%
    
6.00
%
    
8.00
%
Total capital (to risk-weighted assets)
    
75,668
      
23.35
%
    
8.00
%
    
10.00
%
Tier 1 leverage (to average assets)
    
71,887
      
13.02
%
    
4.00
%
    
5.00
%
 
No significant conditions or events have occurred since
December
31,
2016
that management believes have affected the Bank
’s classification as “well capitalized.” Because of the size of the Company’s balance sheet, there is currently no requirement for separate reporting of capital amounts and ratios for Bancshares.  Accordingly, such amounts and ratios are not included herein.
 
The FDIC
issued a final rule that took effect in
2016
that sets forth several sign
ificant proposed changes to the methodology for calculating deposit insurance assessments for banks with less than
$10
billion in assets. Under the rule, the rate is determined based on a
number of factors, including the bank
’s CAMELS ratings, leverage ratio, net income, non-performing loan ratios, OREO ratios, core deposit ratios,
one
-year organic asset growth and a loan mix index. The CAMELS rating system is a supervisory rating system developed to classify a bank’s overall condition by taking into account capital adequacy, assets, management capability, earnings, liquidity and sensitivity to market and interest rate risk. The loan mix index component of the assessment model requires banks to calculate each of their loan categories as a percentage of assets and then multiply each category by a standardized historical charge-off rate percentage provided by the FDIC, with a higher index leading to a higher assessment rate. The proposal would implement maximum assessment rates for institutions with a composite CAMELS rating of
1
or
2
and minimum rates for institutions with a rating of
3,
4
or
5.
 
Dividend R
estrictions
 
Under applicable Delaware law, dividends
may
be paid only out of “
surplus,” defined as an amount equal to the present fair value of the total assets of the corporation, minus the present fair value of the total liabilities of the corporation, minus the capital of the corporation as determined in accordance with the Delaware General Corporation Law. In the event that there is no surplus, dividends
may
be paid out of the net profits of the corporation for the fiscal year in which the dividend is declared and/or the immediately preceding fiscal year. Dividends
may
not be paid, however, out of net profits of the corporation if the capital represented by the issued and outstanding stock of all classes having a preference on the distribution of assets is impaired. Further, it is the policy of the Federal Reserve that bank holding companies should pay dividends only out of current earnings and only if future retained earnings would be consistent with the company’s capital, asset quality and financial condition.
 
Since it has no significant independent sources of income, Bancshares
’ ability to pay dividends depends on its ability to receive dividends from the Bank. Under Alabama law, a state-chartered bank must annually transfer to surplus at least
10%
of its “net earnings” (defined as the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets, less all current operating expenses, actual losses, accrued dividends on preferred stock, and all federal, state and local taxes) until the bank’s surplus is at least
20%
of its capital. Until the bank’s surplus reaches this level, a bank
may
not declare a dividend in excess of
90%
of its net earnings. Once a bank’s surplus equals or exceeds
20%
of its capital, if the total of all dividends declared by the bank in a calendar year will exceed the sum of its net earnings for that year and its retained net earnings for the preceding
two
years (less any required transfers to surplus), then the bank must obtain prior written approval from the Superintendent of the Alabama State Banking Department. The bank
may
not pay any dividends or make any withdrawals or transfers from surplus without the prior written approval of the Superintendent. The FDIC prohibits the payment of cash dividends if (i) as a result of such payment, the bank would be undercapitalized or (ii) the bank is in default with respect to any assessment due to the FDIC, including a deposit insurance assessment. These restrictions could materially influence the Bank’s, and therefore Bancshares’, ability to pay dividends.