Regulatory Matters

12 Months Ended

Dec. 31, 2014

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’s regulatory capital ratios as of December 31, 2014 and December 31, 2013 (Dollars in Thousands):

December 31, 2014
	Actual					Minimum Required for Adequately Capitalized					Minimum Required for Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tier 1 Capital (1)
Consolidated	$	250,847		11.89	%	$	84,397		4.0	%		N/A		N/A
First Federal	$	238,221		11.31	%	$	84,278		4.0	%	$	105,347		5.0	%
Tier 1 Capital (to Risk Weighted Assets) (1)
Consolidated	$	250,847		13.89	%	$	72,213		4.0	%		N/A		N/A
First Federal	$	238,221		13.21	%	$	72,136		4.0	%	$	108,204		6.0	%
Total Capital (to Risk Weighted Assets) (1)
Consolidated	$	273,441		15.15	%	$	144,426		8.0	%		N/A		N/A
First Federal	$	260,791		14.46	%	$	144,272		8.0	%	$	180,340		10.0	%

(1) Core capital is computed as a percentage of adjusted total assets of $2.11 billion and $2.11 billion for consolidated and the bank, respectively. Risk-based capital is computed as a percentage of total risk-weighted assets of $1.81 billion and $1.80 billion for consolidated and the bank, respectively.

	December 31, 2013
	Actual					Minimum Required for Adequately Capitalized					Minimum Required for Well Capitalized
	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tier 1 Capital (1)
Consolidated	$	246,258		11.86	%	$	83,045		4.0	%		N/A		N/A
First Federal	$	235,699		11.36	%	$	82,978		4.0	%	$	103,722		5.0	%
Tier 1 Capital (to Risk Weighted Assets) (1)
Consolidated	$	246,258		13.98	%	$	70,473		4.0	%		N/A		N/A
First Federal	$	235,699		13.39	%	$	70,418		4.0	%	$	105,627		6.0	%
Total Capital (to Risk Weighted Assets) (1)
Consolidated	$	268,317		15.23	%	$	140,947		8.0	%		N/A		N/A
First Federal	$	257,741		14.64	%	$	140,836		8.0	%	$	176,046		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, 2014, First Federal was “well capitalized” based on the ratios presented above. There are no conditions or events since the most recent notification from any of the regulatory agencies regarding those capital standards that management believes have changed any of the well capitalized categorizations of First Federal.

First Federal is subject to the regulatory capital requirements administered by the OCC and FDIC. Regulatory authorities can initiate certain mandatory actions if First Federal 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, 2014, that First Federal 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 does not have prompt corrective action capital requirements as of December 31, 2014.

Dividend Restrictions - Dividends paid by First Federal to First Defiance are subject to various regulatory restrictions. First Federal paid $21.0 million in dividends to First Defiance in 2014 and $3.0 million in 2013. First Federal can initiate dividend payments equal to its net profits (as defined by statute) for 2013 and 2014 plus 2015 net profits. During 2015, First Federal can declare dividends in the amount of $23.1 million from its earnings in 2013 and 2014 and from any of its 2015 net profits to First Defiance. First Insurance paid $1.2 million in dividends to First Defiance in 2014 and $1.5 million in dividends in 2013.