Regulatory Restrictions

12 Months Ended

Dec. 31, 2025

The Company is regulated by the Federal Reserve and is subject to securities registration and public reporting regulations of the Securities and Exchange Commission. The Bank is regulated by the Federal Reserve and the North Carolina Commissioner of Banks.

The primary source of funds for the payment of dividends by the Company is dividends received from its subsidiary, the Bank. The Bank, as a North Carolina banking corporation, may declare dividends so long as such dividends do not reduce its capital below its applicable required capital (typically, the level of capital required to be deemed “adequately capitalized”). As of December 31, 2025, approximately $1.1 billion of the Company’s investment in the Bank was restricted as to transfer to the Company without obtaining prior regulatory approval.

There was no average reserve balance requirement under the requirements of the Federal Reserve at December 31, 2025.

The Company and the Bank must comply with regulatory capital requirements established by the Federal Reserve. 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 Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s assets, liabilities, and certain off-balance sheet items as calculated under regulatory accounting practices. The Company’s and Bank’s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

The Company’s and the Bank’s respective regulatory capital ratios as of December 31, 2025 and 2024, along with the minimum amounts required for capital adequacy purposes and to be well capitalized under prompt corrective action in effect at such times are presented below. There are no conditions or events since year-end that management believes have changed the Company’s or the Bank's classification.


	Actual				Fully Phased-In Regulatory Guidelines Minimum				To Be Well Capitalized Under Current Prompt Corrective Action Provisions
($ in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
					(must equal or exceed)				(must equal or exceed)
As of December 31, 2025
Common Equity Tier I Capital Ratio
Company	$	1,319,899	14.10	%	$	655,116	7.00	%	N/A		N/A
Bank	$	1,373,033	14.69	%	$	654,306	7.00	%	$	607,570	6.50	%
Total Capital Ratio
Company	$	1,508,594	16.12	%	$	982,675	10.50	%	N/A		N/A
Bank	$	1,490,092	15.94	%	$	981,461	10.50	%	$	934,725	10.00	%
Tier I Capital Ratio
Company	$	1,391,392	14.87	%	$	795,498	8.50	%	N/A		N/A
Bank	$	1,373,033	14.69	%	$	794,514	8.50	%	$	747,778	8.00	%
Leverage Ratio
Company	$	1,391,392	11.21	%	$	496,292	4.00	%	N/A		N/A
Bank	$	1,373,033	11.08	%	$	495,836	4.00	%	$	619,796	5.00	%

As of December 31, 2024
Common Equity Tier I Capital Ratio
Company	$	1,239,980	14.35	%	$	604,868	7.00	%	N/A		N/A
Bank	$	1,315,671	15.23	%	$	604,708	7.00	%	$	561,514	6.50	%
Total Capital Ratio
Company	$	1,437,050	16.63	%	$	907,338	10.50	%	N/A		N/A
Bank	$	1,423,966	16.48	%	$	907,260	10.50	%	$	864,057	10.00	%
Tier I Capital Ratio
Company	$	1,311,128	15.17	%	$	734,647	8.50	%	N/A		N/A
Bank	$	1,315,671	15.23	%	$	734,288	8.50	%	$	691,094	8.00	%
Leverage Ratio
Company	$	1,311,128	11.15	%	$	470,360	4.00	%	N/A		N/A
Bank	$	1,315,671	11.19	%	$	470,302	4.00	%	$	587,878	5.00	%

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

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