DIVIDENDS  EFFECTS OF INFLATION  RECENT ACCOUNTING DEVELOPMENTS  58  In June 2011, the FASB issued ASU No. 2011-05, Comprehensive Income (Topic 220): Presentation of  Comprehensive Income. ASU 2011-05 requires that all nonowner changes in stockholders’ equity be presented either in a  single continuous statement of comprehensive income or in two separate but consecutive statements. In the two-statement  approach, the first statement should present total net income and its components followed consecutively by a second  statement that should present total other comprehensive income, the components of other comprehensive income, and the  total of comprehensive income. The new guidance became effective for interim and annual periods beginning after  In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve  Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting  Standards (“IFRS”). The amendments in ASU No. 2011-04 result in common fair value measurement and disclosure  requirements in U.S. GAAP and IFRS. Consequently, the amendments change the wording used to describe many of the  requirements in U.S. GAAP for measuring fair value and for disclosing information about fair value measurements. The  amendments in ASU No. 2011-04 became effective for interim and annual periods beginning after December 15, 2011. Adoption of ASU 2011-04 did not have a significant impact on the Company’s consolidated financial statements.  In April 2011, the Financial Accounting Standards Board (the “FASB”) issued ASU No. 2011-02, Receivables  (Topic 310): A Creditor’s Determination of Whether a Restructuring Is a Troubled Debt Restructuring. ASU 2011-02  clarifies which loan modifications constitute troubled debt restructurings and is intended to assist creditors in determining  whether a modification of the terms of a receivable meets the criteria to be considered a troubled debt restructuring, both for  purposes of recording an impairment loss and for disclosure of troubled debt restructurings. In evaluating whether a  restructuring constitutes a troubled debt restructuring, a creditor must separately conclude, under the guidance clarified by  ASU 2011-02, that the restructuring constitutes a concession and the debtor is experiencing financial difficulties. Adoption  of ASU 2011-02 did not have a significant impact on the Company’s consolidated financial statements. Our consolidated financial statements and accompanying footnotes have been prepared in accordance with U.S.  generally accepted accounting principles (“U.S. GAAP”), which generally requires the measurement of financial position  and operating results in terms of historical dollars without consideration for changes in the relative purchasing power of  money over time due to inflation. The impact of inflation can be found in the increased cost of our operations because our  assets and liabilities are primarily monetary and interest rates have a greater impact on our performance than do the effects  of inflation.  Additionally, our ability to pay dividends is limited by the subordinated debentures that are held by two business  trusts that we control. Interest payments on the debentures must be paid before we pay dividends on our capital stock,  including our common stock. We have the right to defer interest payments on the debentures for up to 20 consecutive  quarters. However, if we elect to defer interest payments, all deferred interest must be paid before we may pay dividends on  our capital stock.  The payment of dividends by any financial institution or its holding company is affected by the requirement to  maintain adequate capital pursuant to applicable capital adequacy guidelines and regulations. As described above, the Bank  exceeded its minimum capital requirements under applicable guidelines as of December 31, 2012. The National Bank Act  imposes limitations on the amount of dividends that a national bank may pay without prior regulatory approval. Generally,  the amount is limited to the bank's current year's net earnings plus the adjusted retained earnings for the two preceding  years. As of December 31, 2012, approximately $2.0 million was available to be paid as dividends to the Company by the  Bank without prior regulatory approval.  During the year ended December 31, 2012, we paid a quarterly cash dividend of $0.19 per share to our  stockholders. Additionally, we distributed a 5% stock dividend for the twelfth consecutive year in December 2012. The  quarterly cash dividends were $0.181 per share as adjusted to give effect to the 5% stock dividend. 