Note 15:  Capital Requirements and Regulatory Matters

 

We and Bank SNB are subject to various regulatory capital requirements administered by the federal banking agencies.  Failure to meet minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on our and Bank SNB’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, we and Bank SNB must meet specific capital guidelines that involve quantitative measures of our and Bank SNB’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.  Our and Bank SNB’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 us and Bank SNB to maintain minimum amounts of Total and Tier I Capital (as defined in the regulations) to risk-weighted assets (as defined), and of Tier I Capital (as defined) to average assets (as defined). 

 

Management believes that, as of December 31, 2014 and December 31, 2013, we and Bank SNB met all capital adequacy requirements.

 

As of December 31, 2014 and December 31, 2013, Bank SNB was categorized 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.    

 

A summary of actual capital amounts and ratios as of December 31, 2014 are presented below.

 

 

 

A summary of actual capital amounts and ratios as of December 31, 2013 are presented below.

 

 

 

The approval of the Oklahoma State Banking Department and the Federal Reserve Bank is required if the total of all dividends declared by Bank SNB in any calendar year exceeds the total of its net profits of that year combined with its retained net profits of the preceding two years.  In addition, Bank SNB may not pay a dividend if, after paying the dividend, Bank SNB would be undercapitalized.  For the year ended December 31, 2014,  2013, and 2012, Bank SNB declared $18.0 million,  $19.5 million, and $70.0 million in dividends, respectively.