Quarterly report pursuant to Section 13 or 15(d)

SHAREHOLDERS' EQUITY

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SHAREHOLDERS' EQUITY
 3 Months Ended
Mar. 31, 2015
SHAREHOLDERS' EQUITY [Abstract]  
SHAREHOLDERS' EQUITY
NOTE 12 – SHAREHOLDERS' EQUITY

Regulatory Capital

The Company and the Bank are subject to regulatory capital requirements administered by federal banking agencies. Capital adequacy guidelines and prompt corrective action regulations involve quantitative measures of assets, liabilities, and certain off-balance-sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators about components, risk weightings, and other factors, and the regulators can lower classifications in certain cases. Failure to meet various capital requirements can initiate regulatory action that could have a direct material effect on the financial statements.

The prompt corrective action regulations provide five categories, including well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized, and critically undercapitalized, although these terms are not used to represent overall financial condition. If a bank is only adequately capitalized, regulatory approval is required to, among other things, accept, renew or roll-over brokered deposits. If a bank is undercapitalized, capital distributions and growth and expansion are limited, and plans for capital restoration are required.

In July 2013, the Board of Governors of the Federal Reserve Board and the FDIC approved the final rules implementing the Basel Committee on Banking Supervision's capital guidelines for U.S. banks (commonly known as Basel III). Under the final rules, which began for the Company and the Bank on January 1, 2015 and are subject to a phase-in period through January 1, 2019, minimum requirements will increase for both the quantity and quality of capital held by the Company and the Bank. The rules include a new common equity Tier 1 capital to risk-weighted assets ratio (CET1 ratio) of 4.5% and a capital conservation buffer of 2.5% of risk-weighted assets, which when fully phased-in, effectively results in a minimum CET1 ratio of 7.0%. Basel III raises the minimum ratio of Tier 1 capital to risk-weighted assets from 4.0% to 6.0% (which, with the capital conservation buffer, effectively results in a minimum Tier 1 capital ratio of 8.5% when fully phased-in), effectively results in a minimum total capital to risk-weighted assets ratio of 10.5% (with the capital conservation buffer fully phased-in), and requires a minimum leverage ratio of 4.0%. Basel III also makes changes to risk weights for certain assets and off-balance-sheet exposures. Management expects that the capital ratios for the Company and the Bank under Basel III will continue to exceed the well capitalized minimum capital requirements.
At March 31, 2015 and December 31, 2014, actual capital levels and minimum required levels were (dollars in thousands):
 
   
Actual
    
Minimum Required
For Capital
Adequacy Purposes
    
To Be Well
Capitalized Under
Prompt Corrective
Action Regulations
  
   
Amount
    
Ratio
    
Amount
    
Ratio
    
Amount
    
Ratio
  
March 31, 2015
                        
CET1 capital (to risk weighted assets)
                        
Consolidated
  
$
144,341
      
10.7
%
  
$
60,487
      
4.5
%
    
N/
A
    
N/
A
Bank
    
178,932
      
13.3
      
60,477
      
4.5
    
$
87,355
      
6.5
%
Tier 1 capital (to risk weighted assets)
                                                
Consolidated
    
184,341
      
13.7
      
80,650
      
6.0
      
N/
A
    
N/
A
Bank
    
178,932
      
13.3
      
80,636
      
6.0
      
107,514
      
8.0
  
Total capital (to risk weighted assets)
                                                
Consolidated
    
201,173
      
15.0
      
107,533
      
8.0
      
N/
A
    
N/
A
Bank
    
195,761
      
14.6
      
107,514
      
8.0
      
134,393
      
10.0
  
Tier 1 capital (to average assets)
                                                
Consolidated
    
184,341
      
11.9
      
61,969
      
4.0
      
N/
A
    
N/
A
Bank
    
178,932
      
11.6
      
61,885
      
4.0
      
77,356
      
5.0
  
                                                 
December 31, 2014
                                                
Tier 1 capital (to risk weighted assets)
                                                
Consolidated
  
$
174,084
      
14.3
%
  
$
48,706
      
4.0
%
    
N/
A
    
N/
A
Bank
    
170,983
      
14.0
      
48,788
      
4.0
    
$
73,182
      
6.0
%
Total capital (to risk weighted assets)
                                                
Consolidated
    
189,353
      
15.6
      
97,420
      
8.0
      
N/
A
    
N/
A
Bank
    
186,276
      
15.3
      
97,575
      
8.0
      
121,969
      
10.0
  
Tier 1 capital (to average assets)
                                                
Consolidated
    
174,084
      
11.6
      
59,998
      
4.0
      
N/
A
    
N/
A
Bank
    
170,983
      
11.4
      
59,923
      
4.0
      
74,904
      
5.0
  

Approximately $40.0 million of trust preferred securities outstanding at March 31, 2015 and December 31, 2014, respectively, qualified as Tier 1 capital. Refer to our 2014 Form 10-K for more information on the trust preferred securities.

The Bank was categorized as "well capitalized" at March 31, 2015 and December 31, 2014.