14. Employment Agreements 15. Salary Continuation Plan 16. Regulatory Matters 35 A comparison of the Bank’ s actual capital amounts to the regulatory requirements as of December 31 is presented below:  Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios ( set forth below) of total and Tier 1 capital ( as defined in the regulations) to risk -  weighted assets and of Tier 1 capital to average assets. Management believes, as of December 31,  2013, that the Bank meets all capital adequacy requirements to which it is subject, to be considered well capitalized.  The Bank entered into salary continuation agreements with its President and its Managing Director and Chief Financial Officer in March 2012.  This is an unfunded plan that provides for target retirement benefits beginning at age 65. The agreements also provide for benefits in the event of early retirement, disability, death during active service or change in control of the Bank. At December 31,  2013 and 2012,  the Bank’ s total accrued liability under these agreements was 106, 000 and $ 47, 000, respectively. Total expense related to this plan as provided for in these agreements amounted to $ 59, 000 and $ 47, 000 for the years ended December 31, 2013 and 2012,  respectively.  The Bank entered into a new three -year employment agreement in January 2007 with its President, which includes minimum annual salary commitments and change of control provisions.  The agreement contains rolling -term options to renew for additional one -year periods.  Additionally, the Bank has entered into change of control agreements with its Managing Director and Chief Financial Officer, its Managing Director and Chief Lending Officer, and its Managing Director of Personal Banking.  Upon resignation after a change in the control of the Bank, as defined in the agreement, the individuals will receive monetary compensation in the amount set forth in the agreements, subject to the Emergency Economic Stabilization Act of 2008.  To be Well Capitalized under Prompt Corrective Action December 31, 2013 Actual For Capital Adequacy Purposes Provisions Amount Ratio Amount Ratio Amount Ratio Total capital (to risk weighted assets) $  32, 751 14. 16% $  218, 507 28. 0% $  223, 134 210.0%  Tier 1 capital (to risk -  weighted assets)  30, 446 13. 16%  2 9, 251 24. 0%  213, 876 2 6. 0%  Tier 1 capital (to average assets)  30, 446 10. 84%  211, 233 24. 0%  214,042 2 5. 0%  The Bank is subject to various regulatory capital requirements administered by its primary federal regulator, the Federal Deposit Insurance Corporation. Failure to meet the minimum capital requirements can initiate certain mandatory and possibly additional discretionary- actions by regulators that, if undertaken,  could have a direct material effect on the Bank’ s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’ s assets, liabilities and certain off -  balance sheet items as calculated under regulatory accounting practices. The Bank’ s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk - weightings and other factors. 