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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.