Regulatory matters

12 Months Ended

Dec. 31, 2012

Regulatory matters

23.    Regulatory matters

Payment of dividends by M&T’s banking subsidiaries is restricted by various legal and regulatory limitations. Dividends from any banking subsidiary to M&T are limited by the amount of earnings of the banking subsidiary in the current year and the preceding two years. For purposes of this test, at December 31, 2012, approximately $944 million was available for payment of dividends to M&T from banking subsidiaries. Additionally, the Federal Reserve Board requires bank holding companies with $50 billion or more of total consolidated assets to submit annual capital plans. Such bank holding companies may pay dividends and repurchase stock only in accordance with a capital plan which the Federal Reserve Board has not objected to.

Banking regulations prohibit extensions of credit by the subsidiary banks to M&T unless appropriately secured by assets. Securities of affiliates are not eligible as collateral for this purpose.

The bank subsidiaries are required to maintain noninterest-earning reserves against certain deposit liabilities. During the maintenance periods that included December 31, 2012 and 2011, cash and due from banks included a daily average of $604,789,000 and $382,489,000, respectively, for such purpose.

Federal regulators have adopted capital adequacy guidelines for bank holding companies and banks. Failure to meet minimum capital requirements can result in certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a material effect on the Company’s financial statements. Under the capital adequacy guidelines, the so-called “Tier 1 capital” and “Total capital” as a percentage of risk-weighted assets and certain off-balance sheet financial instruments must be at least 4% and 8%, respectively. In addition to these risk-based measures, regulators also require banking institutions that meet certain qualitative criteria to maintain a minimum “leverage” ratio of “Tier 1 capital” to average total assets, adjusted for goodwill and certain other items, of at least 3% to be considered adequately capitalized. As of December 31, 2012, M&T and each of its banking subsidiaries exceeded all applicable capital adequacy requirements. To be considered “well capitalized,” under the regulatory framework for prompt corrective action, a banking institution must maintain Tier 1 risk-based capital, total risk-based capital and leverage ratios of at least 6%, 10% and 5%, respectively.

The capital ratios and amounts of the Company and its banking subsidiaries as of December 31, 2012 and 2011 are presented below:

	M&T (Consolidated)			M&T Bank			Wilmington Trust, N.A.
	(Dollars in thousands)
December 31, 2012:
Tier 1 capital
Amount	$	7,810,196		$	6,767,774		$	405,469
Ratio(a)		10.22	%		8.92	%		61.02	%
Minimum required amount(b)		3,057,093			3,034,184			26,580
Total capital
Amount		10,230,302			8,981,931			410,873
Ratio(a)		13.39	%		11.84	%		61.83	%
Minimum required amount(b)		6,114,186			6,068,367			53,160
Leverage
Amount		7,810,196			6,767,774			405,469
Ratio(c)		10.07	%		8.84	%		21.62	%
Minimum required amount(b)		2,327,122			2,297,902			56,275
December 31, 2011:
Tier 1 capital
Amount	$	6,926,218		$	6,283,825		$	393,360
Ratio(a)		9.67	%		8.87	%		71.89	%
Minimum required amount(b)		2,864,002			2,832,558			21,887
Total capital
Amount		9,493,124			8,587,360			399,177
Ratio(a)		13.26	%		12.13	%		72.95	%
Minimum required amount(b)		5,728,005			5,665,116			43,774
Leverage
Amount		6,926,218			6,283,825			393,360
Ratio(c)		9.28	%		8.54	%		19.20	%
Minimum required amount(b)		2,239,639			2,206,498			61,478

(a) The ratio of capital to risk-weighted assets, as defined by regulation.

(b) Minimum amount of capital to be considered adequately capitalized, as defined by regulation.

(c) The ratio of capital to average assets, as defined by regulation.