REGULATORY MATTERS

12 Months Ended

Dec. 31, 2011

REGULATORY MATTERS [Abstract]

REGULATORY MATTERS

19.   REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements established by the federal banking agencies.  Failure to satisfy minimum capital requirements may result in certain mandatory, and possibly additional discretionary, actions by regulators that, if undertaken, could have a direct material effect on the Company's consolidated financial statements.  Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must satisfy specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance-sheet items as calculated pursuant to regulatory accounting practices.  The Bank's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

At December 31, 2010, the Bank's primary regulator was the Office of Thrift Supervision ("OTS"), and the Bank was in compliance with all applicable regulatory capital requirements and was considered "well-capitalized" for all regulatory purposes.  Effective July 21, 2011, the Bank's primary regulator transitioned from the OTS to the Office of the Comptroller of the Currency ("OCC').  The regulatory transition did not result in a material change in regulatory capital requirements for the Bank.  Prior to July 21, 2011, the Holding Company was additionally regulated by the OTS, which imposed no formal capital requirements on the Holding Company.  As of July 21, 2011, the Holding Company's primary regulator transitioned to the Federal Reserve Board, which, as of December 31, 2011, had not issued formal minimum capital requirements on the Holding Company.

Quantitative measures that have been established by regulation to ensure capital adequacy require the Bank to maintain minimum capital amounts and ratios (set forth in the table below).  The OTS required, and the OCC currently requires, that the Bank maintain minimum ratios of tangible capital (as defined in the regulations) of 3.0%, and total risk-based capital (as defined in the regulations) of 8%.  In addition, insured institutions in the strongest financial and managerial condition, with a rating of one (the highest rating of the OCC under the Uniform Financial Institutions Rating System) are required to maintain a Leverage Capital Ratio  (the "Leverage Capital Ratio") of not less than 3.0% of total assets.  For all other banks, the minimum Leverage Capital Ratio requirement is 4.0%, unless a higher leverage capital ratio is warranted by the particular circumstances or risk profile of the institution. As of December 31, 2011, the Bank satisfied all capital adequacy requirements to which it was subject.

As of December 31, 2011 and 2010, the Bank satisfied all criteria necessary to be categorized as "well capitalized" under the regulatory framework for prompt corrective action.  To be categorized as "well capitalized," the Bank was required to maintain minimum total risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the following tables:

	Actual					For Capital Adequacy Purposes					To Be Categorized as "Well Capitalized"
As of December 31, 2011	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tangible capital	$	359,838		9.11	%	$	118,561		3.0	%	$	197,602		5.00	%
Leverage capital		359,838		9.11			158,082		4.0	%		197,602		5.00
Total risk-based capital (to risk weighted assets)		368,317		12.24			240,760		8.0	%		300,950		10.00
Tier I risk-based capital (to risk weighted assets)		347,822		11.56			120,380		4.0	%		180,570		6.00

	Actual					For Capital Adequacy Purposes					To Be Categorized as "Well Capitalized"
As of December 31, 2010	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tangible capital	$	326,555		8.23	%	$	59,559		1.5	%	$	198,530		5.00	%
Leverage capital		326,555		8.23			158,824		4.0	%		198,530		5.00
Total risk-based capital (to risk weighted assets)		333,788		11.95			223,507		8.0	%		279,384		10.00
Tier I risk-based capital (to risk weighted assets)		314,214		11.25			111,753		4.0	%		167,630		6.00

The following is a reconciliation of stockholders' equity to regulatory capital for the Bank:

	At December 31, 2011									At December 31, 2010
	Tangible Capital			Leverage Capital			Total Risk-Based Capital			Tangible Capital			Leverage Capital			Total Risk-Based Capital
Stockholders' equity	$	405,403		$	405,403		$	405,403		$	375,533		$	375,533		$	375,533
Non-allowable assets:
MSR		(162	)		(162	)		(162	)		(228	)		(228	)		(228	)
Accumulated other comprehensive loss		10,235			10,235			10,235			6,888			6,888			6,888
Goodwill		(55,638	)		(55,638	)		(55,638	)		(55,638	)		(55,638	)		(55,638	)
Tier 1 risk-based capital		359,838			359,838			359,838			326,555			326,555			326,555
Adjustment for First Loss Position on loans sold with recourse		-			-			(12,016	)		-			-			(12,341	)
General regulatory valuation allowance		-			-			20,495			-			-			19,574
Total (Tier 2) risk based capital		359,838			359,838			368,317			326,555			326,555			333,788
Minimum capital requirement		118,561			158,082			240,760			59,559			158,824			223,507
Regulatory capital excess	$	241,277		$	201,756		$	127,557		$	266,996		$	167,731		$	110,281