Availability of Funds from Subsidiaries and Capital

12 Months Ended

Dec. 31, 2013

Availability of Funds from Subsidiaries and Capital

Availability of Funds from Subsidiaries and Capital

Note 13. Availability of Funds from Subsidiaries and Capital

        The Corporation is authorized to issue 5,000,000 shares of preferred stock. The Corporation's Board of Directors has the authority to issue the preferred stock in one or more series, and to fix the designations, rights, preferences, privileges, qualifications and restrictions, including dividend rights, conversion rights, voting rights, rights and terms of redemption, liquidation preferences, and sinking fund terms. The Corporation had 275,000 shares and 175,000 shares of preferred stock outstanding at December 31, 2013 and 2012, respectively.

        Historically, the majority of the funds for the payment of dividends by the Corporation have been obtained from the Bank. The Bank may pay dividends to the Corporation without prior regulatory consent subject to certain legal and regulatory limitations, and as long as the dividends do not exceed the Bank's net profits for the current and prior two years less previous dividends and capital distributions. Federal banking law also prohibits the Corporation from borrowing from the Bank on less than a fully secured basis. The Corporation had no borrowings from the Bank at either December 31, 2013 or December 31, 2012.

        The Corporation and the Bank are 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 Company's financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Corporation and the Bank must meet specific capital guidelines that involve quantitative measures of the Corporation's and Bank's assets, liabilities and certain off-balance sheet items as calculated under the regulatory accounting rules. The Corporation's and 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 regulation to ensure capital adequacy require the Corporation and the Bank to maintain minimum amounts and ratios (set forth in the table below) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined). As of December 31, 2013, the Corporation and the Bank met and exceeded all capital adequacy requirements to which either is subject. Additionally, the regulatory agencies are required by law to take specific prompt action with respect to banks that do not meet minimum capital standards. As of December 31, 2013, the Bank was categorized as "well capitalized." There have been no events or circumstances that cause the Company's management to believe that there would be a change in the Corporation's and the Bank's category of "well capitalized."

        The Corporation's capital amounts and ratios are presented in the following table:

	Actual					Adequately Capitalized					Well Capitalized
(in millions)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 2013
Total capital (to risk weighted assets)	$	2,699.2		13.00	%	$	1,661.3		³ 8.0	%	$	2,076.6		³ 10.0	%
Tier 1 capital (to risk weighted assets)		2,095.6		10.09	%		830.6		³ 4.0	%		1,246.0		³ 6.0	%
Tier 1 capital (to average assets)		2,095.6		7.17	%		1,169.5		³ 4.0	%		—		—
As of December 2012
Total capital (to risk weighted assets)	$	2,331.9		12.52	%	$	1,490.2		³ 8.0	%	$	1,862.7		³ 10.0	%
Tier 1 capital (to risk weighted assets)		1,753.3		9.41	%		745.1		³ 4.0	%		1,117.6		³ 6.0	%
Tier 1 capital (to average assets)		1,753.3		6.60	%		1,063.4		³ 4.0	%		—		—

        The Bank's capital amounts and ratios are presented in the following table:

	Actual					Adequately Capitalized					Well Capitalized
(in millions)	Amount		Ratio			Amount		Ratio			Amount		Ratio
As of December 2013
Total capital (to risk weighted assets)	$	2,698.0		13.08	%	$	1,650.7		³ 8.0	%	$	2,063.4		³ 10.0	%
Tier 1 capital (to risk weighted assets)		2,105.2		10.20	%		825.3		³ 4.0	%		1,238.0		³ 6.0	%
Tier 1 capital (to average assets)		2,105.2		7.25	%		1,161.7		³ 4.0	%		1,452.2		³ 5.0	%
As of December 2012
Total capital (to risk weighted assets)	$	2,388.5		12.93	%	$	1,478.2		³ 8.0	%	$	1,847.8		³ 10.0	%
Tier 1 capital (to risk weighted assets)		1,825.5		9.88	%		739.1		³ 4.0	%		1,108.7		³ 6.0	%
Tier 1 capital (to average assets)		1,825.5		6.92	%		1,055.6		³ 4.0	%		1,319.5		³ 5.0	%