ISABELLA BANK Corp - 10-K filing on 2014-03-10

Minimum Regulatory Capital Requirements

12 Months Ended

Dec. 31, 2013

Note 16 – Minimum Regulatory Capital Requirements

The Corporation (on a consolidated basis) and the Bank are subject to various regulatory capital requirements administered by the FRB and the FDIC. Failure to meet minimum capital requirements can initiate mandatory and possibly additional discretionary actions by the FRB and the FDIC that if undertaken, could have a material effect on our financial statements. Under regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, we must meet specific capital guidelines that include quantitative measures of assets, liabilities, capital, and certain off-balance-sheet items, as calculated under regulatory accounting standards. Our capital amounts and classifications are also subject to qualitative judgments by the FRB and the FDIC about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.

Quantitative measures established by regulation to ensure capital adequacy require us to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and Tier 1 capital to average assets (as defined). We believe, as of December 31, 2013 and 2012, that we met all capital adequacy requirements.

As of December 31, 2013, the most recent notifications from the FRB and the FDIC categorized us as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, an institution must maintain total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notifications that we believe has changed our categories. Our actual capital amounts and ratios are also presented in the table.



	Actual				Minimum Capital Requirement				Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2013
Total capital to risk weighted assets
Isabella Bank	$	120,067	13.84	%	$	69,390	8.00	%	$	86,738	10.00	%
Consolidated	131,398		14.92		70,452		8.00		N/A		N/A
Tier 1 capital to risk weighted assets
Isabella Bank	109,217		12.59		34,695		4.00		52,043		6.00
Consolidated	120,384		13.67		35,226		4.00		N/A		N/A
Tier 1 capital to average assets
Isabella Bank	109,217		7.75		56,403		4.00		70,504		5.00
Consolidated	120,384		8.46		56,932		4.00		N/A		N/A



	Actual				Minimum Capital Requirement				Minimum To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2012
Total capital to risk weighted assets
Isabella Bank	$	112,498	13.40	%	$	67,150	8.00	%	$	83,937	10.00	%
Consolidated	123,388		14.48		68,161		8.00		N/A		N/A
Tier 1 capital to risk weighted assets
Isabella Bank	101,988		12.15		33,575		4.00		50,362		6.00
Consolidated	112,722		13.23		34,080		4.00		N/A		N/A
Tier 1 capital to average assets
Isabella Bank	101,988		7.57		53,916		4.00		67,395		5.00
Consolidated	112,722		8.29		54,411		4.00		N/A		N/A