Regulatory Matters

12 Months Ended

Dec. 31, 2012

Regulatory Capital Requirements [Abstract]

Regulatory Capital Requirements under Banking Regulations [Text Block]

17. Regulatory Matters

First Federal is subject to minimum capital adequacy guidelines.  Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators, which could have a material impact on First Federal’s financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, First Federal must maintain capital amounts in excess of specified minimum ratios based on quantitative measures of First Federal’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices.

Quantitative measures to ensure capital adequacy require First Federal to maintain minimum amounts and ratios (as set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets, and Tier 1 capital to adjusted total assets.

The following schedule presents First Defiance consolidated and First Federal Bank’s regulatory capital ratios as of December 31, 2012 and December 31, 2011:

December 31, 2012
	Actual					Minimum Required for Adequately Capitalized					Minimum Required for Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tier 1 Capital (1)
Consolidated	$	226,931		11.48	%	$	79,056		4.0	%		N/A		N/A
First Federal Bank	$	215,432		10.92	%	$	78,914		4.0	%	$	98,642		5.0	%
Tier 1 Capital (to Risk Weighted Assets) (1)
Consolidated	$	226,931		13.41	%	$	67,715		4.0	%		N/A		N/A
First Federal Bank	$	215,432		12.74	%	$	67,632		4.0	%	$	101,448		6.0	%
Total Capital (to Risk Weighted Assets) (1)
Consolidated	$	248,161		14.66	%	$	135,430		8.0	%		N/A		N/A
First Federal Bank	$	236,635		14.00	%	$	135,264		8.0	%	$	169,080		10.0	%

(1) Core capital is computed as a percentage of adjusted total assets of $1.98 billion and $1.97 billion for consolidated and the bank, respectively. Risk-based capital is computed as a percentage of total risk-weighted assets of $1.69 billion and $1.69 billion for consolidated and the bank, respectively.

December 31, 2011
	Actual					Minimum Required for Adequately Capitalized					Minimum Required for Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tier 1 Capital (1)
Consolidated	$	245,458		12.30	%	$	79,848		4.0	%		N/A		N/A
First Federal Bank	$	231,787		11.62	%	$	79,757		4.0	%	$	99,697		5.0	%
Tier 1 Capital (to Risk Weighted Assets) (1)
Consolidated	$	245,458		14.97	%	$	65,573		4.0	%		N/A		N/A
First Federal Bank	$	231,787		14.16	%	$	65,492		4.0	%	$	98,238		6.0	%
Total Capital (to Risk Weighted Assets) (1)
Consolidated	$	265,949		16.22	%	$	131,147		8.0	%		N/A		N/A
First Federal Bank	$	252,411		15.42	%	$	130,984		8.0	%	$	163,730		10.0	%

(1) Core capital is computed as a percentage of adjusted total assets of $2.00 billion and $1.99 billion for consolidated and the bank, respectively. Risk-based capital is computed as a percentage of total risk-weighted assets of $1.64 billion and $1.64 billion for consolidated and the bank, respectively.

Management believes that, as of December, 31, 2012, First Federal Bank was “well capitalized” based on the ratios presented above. First Defiance does not have capital requirements at this time.

First Federal Bank is subject to the regulatory capital requirements administered by the OCC and FDIC. Regulatory authorities can initiate certain mandatory actions if First Federal Bank fails to meet the minimum capital requirements, which could have a direct material effect on the Corporation’s financial statements. Management believes, as of December 31, 2012, that First Federal Bank meets all capital adequacy requirements to which they are subject.

First Defiance is a unitary thrift holding company and is regulated by the Federal Reserve. First Defiance is subject to regulatory capital requirements under the Federal Reserve.

Dividend Restrictions - Dividends paid by First Federal to First Defiance are subject to various regulatory restrictions. First Federal paid $37.0 million in dividends in 2012 and did not pay dividends in 2011. First Federal can initiate dividend payments equal to its net profits (as defined by statute) for 2011 and 2012 plus 2013 net profits. During 2013, First Federal can’t declare any dividends from its earnings in 2011 and 2012 but can from its 2013 net profits to First Defiance. First Insurance paid $300,000 in dividends in 2012 and did not pay dividends to First Defiance in 2011.