Regulatory Matters

12 Months Ended

Dec. 31, 2013

Regulatory Matters

NOTE 18: REGULATORY MATTERS

The Company is subject to examination, regulation, and periodic reporting under the Bank Holding Company Act of 1956, as amended, which is administered by the Federal Reserve Board of Governors (the “FRB”). The FRB has adopted capital adequacy guidelines for bank holding companies (on a consolidated basis) that are substantially similar to those of the FDIC for the Banks.

The following tables present the regulatory capital ratios for the Company at December 31, 2013 and 2012, in comparison with the minimum amounts and ratios required by the FRB for capital adequacy purposes:

						Risk-Based Capital
At December 31, 2013	Leverage Capital					Tier 1					Total
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total regulatory capital	$	3,664,082		8.39	%	$	3,664,082		12.84	%	$	3,870,921		13.56	%
Minimum for capital adequacy purposes		1,745,857		4.00			1,141,644		4.00			2,283,287		8.00
Excess	$	1,918,225		4.39	%	$	2,522,438		8.84	%	$	1,587,634		5.56	%

						Risk-Based Capital
At December 31, 2012	Leverage Capital					Tier 1					Total
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total regulatory capital	$	3,605,671		8.84	%	$	3,605,671		13.38	%	$	3,800,221		14.11	%
Minimum for capital adequacy purposes		1,631,267		4.00			1,077,615		4.00			2,155,230		8.00
Excess	$	1,974,404		4.84	%	$	2,528,056		9.38	%	$	1,644,991		6.11	%

The Banks are subject to regulation, examination, and supervision by the NYDFS and the FDIC (the “Regulators”). The Banks are also governed by numerous federal and state laws and regulations, including the FDIC Improvement Act of 1991, which established five categories of capital adequacy ranging from well capitalized to critically undercapitalized. Such classifications are used by the FDIC to determine various matters, including prompt corrective action and each institution’s FDIC deposit insurance premium assessments. Capital amounts and classifications are also subject to the Regulators’ qualitative judgments about the components of capital and risk weightings, among other factors.

The quantitative measures established to ensure capital adequacy require that banks maintain minimum amounts and ratios of leverage capital to average assets, and of Tier 1 and total risk-based capital to risk-weighted assets (as such measures are defined in the regulations). At December 31, 2013, the Banks exceeded all the capital adequacy requirements to which they were subject.

As of December 31, 2013, the most recent notifications from the FDIC categorized the Community Bank and the Commercial Bank as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as well capitalized, a bank must maintain a minimum leverage capital ratio of 5.00%; a minimum Tier 1 risk-based capital ratio of 6.00%; and a minimum total risk-based capital ratio of 10.00%. In the opinion of management, no conditions or events have transpired since said notification to change these capital adequacy classifications.

The following tables present the actual capital amounts and ratios for the Community Bank at December 31, 2013 and 2012 in comparison to the minimum amounts and ratios required for capital adequacy purposes:

						Risk-Based Capital
At December 31, 2013	Leverage Capital					Tier 1					Total
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total regulatory capital	$	3,196,870		7.86	%	$	3,196,870		12.22	%	$	3,391,944		12.96	%
Minimum for capital adequacy purposes		1,627,696		4.00			1,046,793		4.00			2,093,586		8.00
Excess	$	1,569,174		3.86	%	$	2,150,077		8.22	%	$	1,298,358		4.96	%

						Risk-Based Capital
At December 31, 2012	Leverage Capital					Tier 1					Total
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total regulatory capital	$	3,156,127		8.33	%	$	3,156,127		12.50	%	$	3,338,196		13.22	%
Minimum for capital adequacy purposes		1,514,709		4.00			1,010,199		4.00			2,020,397		8.00
Excess	$	1,641,418		4.33	%	$	2,145,928		8.50	%	$	1,317,799		5.22	%

The following tables present the actual capital amounts and ratios for the Commercial Bank at December 31, 2013 and 2012 in comparison to the minimum amounts and ratios required for capital adequacy purposes:

						Risk-Based Capital
At December 31, 2013	Leverage Capital					Tier 1					Total
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total regulatory capital	$	354,423		11.49	%	$	354,423		14.84	%	$	366,076		15.33	%
Minimum for capital adequacy purposes		123,393		4.00			95,517		4.00			191,033		8.00
Excess	$	231,030		7.49	%	$	258,906		10.84	%	$	175,043		7.33	%

						Risk-Based Capital
At December 31, 2012	Leverage Capital					Tier 1					Total
(dollars in thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Total regulatory capital	$	345,111		11.59	%	$	345,111		16.64	%	$	357,504		17.24	%
Minimum for capital adequacy purposes		119,132		4.00			82,966		4.00			165,932		8.00
Excess	$	225,979		7.59	%	$	262,145		12.64	%	$	191,572		9.24	%