Capital

The Bank is subject to various regulatory capital requirements administered by the federal banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Corporation’s financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’s assets, liabilities and certain off-balance-sheet items as calculated under 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.

Quantitative measures established by federal regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios (set forth in the following table) of Tier 1 Leverage Capital (as defined) to Total Assets (as defined) and of Tier 1 and Total Risk-Based Capital (as defined in the regulations) to Risk-Weighted Assets (as defined). Management believes, as of June 30, 2013 and 2012, that the Bank met all its capital adequacy requirements.

As of June 30, 2013 and 2012, the Bank was categorized as “well capitalized” under the regulatory framework for prompt corrective action. To be categorized as “well capitalized” the Bank must maintain minimum Tier 1 Leverage Capital (to total assets), Tier 1 Risk-Based Capital (to risk-weighted assets) and Total Risk-Based Capital (to risk-weighted assets), as set forth in the following table. Management is not aware of any conditions or events since the notification that have changed the Bank’s category.

The Bank may not declare or pay cash dividends on or repurchase any of its shares of common stock, if the effect would cause stockholders’ equity to be reduced below applicable regulatory capital maintenance requirements or if such declaration and payment would otherwise violate regulatory requirements. In fiscal 2013 and 2012, the Bank declared $10.0 million and $8.0 million of cash dividends to its parent, the Corporation, respectively; in fiscal 2011, the Bank did not declare cash dividends to its parent.

Federal regulations require that institutions with investments in subsidiaries conducting real estate investment and joint venture activities to maintain sufficient capital over the minimum regulatory requirements. The Bank maintains capital in excess of the minimum requirements.

The Bank’s actual capital amounts and ratios as of June 30, 2013 and 2012 were as follows:



(Dollars in Thousands)	Actual				For Capital Adequacy Purposes			To Be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in Thousands)	Amount		Ratio		Amount		Ratio	Amount		Ratio

As of June 30, 2013
Tier 1 Leverage Capital	$	158,737	13.12	%	$	48,408	> 4.0%	$	60,510	> 5.0%
Tier 1 Risk-Based Capital	$	158,737	21.36	%	N/A		N/A	$	44,582	> 6.0%
Total Risk-Based Capital	$	168,201	22.64	%	$	59,442	> 8.0%	$	74,303	> 10.0%

As of June 30, 2012
Tier 1 Leverage Capital	$	141,831	11.26	%	$	50,400	> 4.0%	$	63,000	> 5.0%
Tier 1 Risk-Based Capital	$	141,831	17.53	%	N/A		N/A	$	48,555	> 6.0%
Total Risk-Based Capital	$	152,087	18.79	%	$	64,740	> 8.0%	$	80,925	> 10.0%