30. Regulatory Requirements

Holding Company Requirements

Doral Financial is a bank holding company subject to supervision and regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) under the Bank Holding Company Act of 1956 (the “BHC Act”), as amended by the Gramm-Leach-Bliley Act of 1999 (the “Gramm-Leach-Bliley Act”). As a bank holding company, Doral Financial's activities and those of its banking and non-banking subsidiaries are limited to banking activities and such other activities the Federal Reserve has determined to be closely related to the business of banking.

Banking Charter

Doral Bank is a commercial bank chartered under the laws of the Commonwealth of Puerto Rico regulated by the Office of the Commissioner of Financial Institutions (the “Office of the Commissioner”), pursuant to the Puerto Rico Banking Act of 1933, as amended, and subject to supervision and examination by the Federal Deposit Insurance Corporation. Doral Bank's deposits are insured by the FDIC up to $250,000.

Regulatory Capital Requirements

Doral Bank is subject to various regulatory capital requirements prescribed by the FDIC. Failure to meet minimum capital requirements may result in certain mandatory actions against Doral Financial's banking subsidiary, as well as additional discretionary actions by regulators that, if undertaken, may have a direct material effect on the Company. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and its banking subsidiary, Doral Bank, must meet specific capital guidelines that involve quantitative measures of its assets, liabilities, and certain off-balance sheet items. The Company's and its banking subsidiary's capital amounts and classifications are also subject to qualitative judgments by the regulators regarding components, risk weightings and other factors.

Quantitative measures, established by regulation to ensure capital adequacy, require Doral 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), and of Tier 1 capital (as defined) to average assets (as defined).

As of December 31, 2013, Doral Bank exceeded the thresholds for well-capitalized banks as set forth in the prompt corrective action regulations adopted by the FDIC pursuant to the Federal Deposit Insurance Corporation Improvement Act of 1991; however, as a result of the Consent Order, Doral Bank is considered adequately capitalized. In addition, Doral exceeded the capital ratios set forth as appropriate for Doral Bank by the FDIC Consent Order. The Consent Order required Doral Bank to develop a capital plan that details the manner in which Doral Bank will meet and maintain a Tier 1 Capital Ratio of at least 8.0%, a Tier 1 Risk-Based Capital Ratio of at least 10.0%, and a Total Risk-Based Capital Ratio of at least 12.0%. The Written Agreement with the FRBNY does not provide for any specific capital ratios for Doral Financial Corporation.

Failure to meet minimum regulatory capital requirements could result in the initiation of certain mandatory and additional discretionary actions by banking regulators against Doral Financial and its banking subsidiary that, if undertaken, could have a material adverse effect on Doral Financial, such as a variety of enforcement remedies, including, with respect to an insured bank, the termination of deposit insurance by the FDIC, and certain restrictions on its business.

During the years December 31, 2013 and 2012, the Board of Directors of Doral Financial approved capital contributions to Doral Bank totaling $131.4 million and $95.0 million, respectively. During 2011, no capital contributions were made by Doral Financial to Doral Bank.

As of December 31, 2013, approximately $59.3 million and $23.5 million, representing non-qualifying perpetual preferred stock and non-allowable assets such as deferred tax assets, goodwill and other intangible assets, were deducted from the capital of Doral Financial and Doral Bank, respectively, when calculating the capital balances and ratios.

As of December 31, 2012, approximately $55.3 million and $22.5 million, representing non-qualifying perpetual preferred stock and non-allowable assets such as deferred tax assets, goodwill and other intangible assets, were deducted from the capital of Doral Financial and Doral Bank, respectively, when calculating the capital balances and ratios.

As of December 31, 2013 and 2012, Doral Bank was in compliance with all regulatory capital requirements that were applicable to it as a state non-member bank as well as those minimums related to the Consent Order and the Written Agreement.

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• Tier 1 capital to average assets.

Housing and Urban Development Requirements

The Company's mortgage operation is a U.S. Department of Housing and Urban Development approved non-supervised mortgagee and is required to maintain an excess of current assets over current liabilities and minimum net worth, as defined by the various regulatory agencies. Such equity requirements are tied to the size of the Company's servicing portfolio and range up to $1.0 million plus an additional net worth of one percent of the total volume in excess of $25.0 million of FHA single family insured mortgages originated, underwritten, purchased, or serviced up to a maximum required net worth of $2.5 million. The Company is also required to maintain fidelity bonds and errors and omissions insurance coverage based on the balance of its servicing portfolio. Non-compliance with these requirements could result in actions from the regulatory agencies such as monetary penalties and the suspension of the license to originate loans, among others.

As of December 31, 2013 and December 31, 2012, Doral Mortgage maintained $24.8 million and $35.3 million, respectively, in excess of the required minimum level for adjusted net worth required by HUD.