Regulatory Matters

12 Months Ended

Dec. 31, 2014

Regulatory Capital Requirements [Abstract]

Regulatory Matters

Regulatory Matters

Federal law requires that savings associations, such as Astoria Bank, maintain minimum capital requirements.  These capital standards are required to be no less stringent than standards applicable to national banks.  At December 31, 2014 and 2013, Astoria Bank was in compliance with all regulatory capital requirements.

The Federal Deposit Insurance Corporation Improvement Act of 1991, or FDICIA, established a system of prompt corrective action, or the Prompt Corrective Action Provisions, to resolve the problems of undercapitalized institutions.  The regulators adopted rules which require them to take action against undercapitalized institutions, based upon the five categories of capitalization which FDICIA created: “well capitalized,” “adequately capitalized,” “undercapitalized,” “significantly undercapitalized” and “critically undercapitalized.”  The rules adopted generally provide that an insured institution whose capital ratios exceed the specified targets and is not subject to any written agreement, order, capital directive or prompt corrective action directive issued by the primary federal regulator shall be considered a well capitalized institution.  At December 31, 2014 and 2013, all of Astoria Bank’s ratios were above the minimum levels required to be considered well capitalized.

The following tables set forth information regarding the regulatory capital requirements applicable to Astoria Bank at the dates indicated.

	At December 31, 2014
	Actual				Minimum Capital Requirements					To be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in Thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tangible	$	1,632,390	10.62	%		$	230,633	1.50	%		N/A		N/A
Tier 1 leverage	1,632,390		10.62			615,022		4.00			$	768,777	5.00	%
Tier 1 risk-based	1,632,390		17.55			372,118		4.00			558,177		6.00
Total risk-based	1,744,905		18.76			744,236		8.00			930,295		10.00

	At December 31, 2013
	Actual				Minimum Capital Requirements					To be Well Capitalized Under Prompt Corrective Action Provisions
(Dollars in Thousands)	Amount		Ratio			Amount		Ratio			Amount		Ratio
Tangible	$	1,543,764	9.93	%		$	233,158	1.50	%		N/A		N/A
Tier 1 leverage	1,543,764		9.93			621,755		4.00			$	777,194	5.00	%
Tier 1 risk-based	1,543,764		15.79			391,083		4.00			586,625		6.00
Total risk-based	1,666,637		17.05			782,167		8.00			977,708		10.00

Pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or the Reform Act, in July 2013, the federal bank regulatory agencies issued rules that subjected many savings and loan holding companies, including Astoria Financial Corporation, to consolidated capital requirements. The rules also revised the quantity and quality of required minimum risk-based and leverage capital requirements, consistent with the Reform Act and the Third Basel Accord adopted by the Basel Committee on Banking Supervision.  In doing so, the rules:

• Established a new minimum common equity Tier 1 risk-based capital ratio (common equity Tier 1 capital to total risk-weighted assets) of 4.5% and increased the minimum Tier 1 risk-based capital ratio from 4.0% to 6.0%, while maintaining the minimum Total risk-based capital ratio of 8.0% and the minimum Tier 1 leverage capital ratio of 4.0%.

• Revised the rules for calculating risk-weighted assets to enhance their risk sensitivity.

• Phased out trust preferred securities and cumulative perpetual preferred stock as Tier 1 capital.

• Added a requirement to maintain a minimum Conservation Buffer, composed of common equity Tier 1 capital, of 2.5% of risk-weighted assets, to be applied to the new common equity Tier 1 risk-based capital ratio, the Tier 1 risk-based capital ratio and the Total risk-based capital ratio, which means that banking organizations, on a fully phased in basis no later than January 1, 2019, must maintain a minimum common equity Tier 1 risk-based capital ratio of 7.0%, a minimum Tier 1 risk-based capital ratio of 8.5% and a minimum Total risk-based capital ratio of 10.5%.

• Changed the definitions of capital categories for insured depository institutions for purposes of the Prompt Corrective Action Provisions.  Under these revised definitions, to be considered well-capitalized, Astoria Bank must have a common equity Tier 1 risk-based capital ratio of at least 6.5%, a Tier 1 leverage capital ratio of at least 5.0%, a Tier 1 risk-based capital ratio of at least 8.0% and a Total risk-based capital ratio of at least 10.0%.

The new minimum regulatory capital ratios and changes to the calculation of risk-weighted assets became effective for Astoria Financial Corporation and Astoria Bank on January 1, 2015.  The required minimum Conservation Buffer will be phased in incrementally, starting at 0.625% on January 1, 2016 and increasing to 1.25% on January 1, 2017, 1.875% on January 1, 2018 and 2.5% on January 1, 2019. The rules impose restrictions on capital distributions and certain discretionary cash bonus payments if the minimum Conservation Buffer is not met.