Regulatory Matters

3 Months Ended

Mar. 31, 2026

Capital guidelines adopted by federal and state regulatory agencies and restrictions imposed by law limit the amount of cash dividends our Bank can pay to us. Under these guidelines, the amount of dividends that may be paid in any calendar year is limited to the Bank’s current year net profits, combined with the retained net profits of the preceding two years. Further, the Bank cannot pay a dividend at any time that it has negative undivided profits. As of March 31, 2026, the Bank had positive undivided profits of $232.7 million. It is not our intent to have dividends paid in amounts that would reduce the capital of our Bank to levels below those which we consider prudent or that would not be in accordance with guidelines of regulatory authorities.

We are also subject to various regulatory capital requirements. The prompt corrective action regulations establish quantitative measures to ensure capital adequacy and require minimum amounts and ratios of total, Tier 1, and common equity Tier 1 capital to risk-weighted assets and Tier 1 capital to average assets. Failure to meet minimum capital requirements can result in certain mandatory, and possibly discretionary, actions by regulators that could have a material effect on our interim condensed consolidated financial statements. In addition, capital adequacy rules include a common equity Tier 1 capital conservation buffer of 2.5% of risk-weighted assets that applies to all supervised financial institutions. To avoid limits on capital distributions and certain discretionary bonus payments we must meet the minimum ratio for adequately capitalized institutions plus the buffer. Under capital adequacy guidelines, we must meet specific capital requirements that involve quantitative measures as well as qualitative judgments by the regulators. The most recent regulatory filings as of March 31, 2026 and December 31, 2025, categorized our Bank as well capitalized and exceeding the minimum ratio for adequately capitalized institutions plus the capital conservation buffer. Management is not aware of any conditions or events that would have changed the most recent Federal Deposit Insurance Corporation (“FDIC”) categorization.

Our actual capital amounts and ratios follow (1):


	Actual				Minimum for Adequately Capitalized Institutions				Minimum for Well-Capitalized Institutions
	Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in thousands)
March 31, 2026
Total capital to risk-weighted assets
Consolidated	$	632,742	13.79	%	$	367,024	8.00	%	NA		NA
Independent Bank	581,090		12.68		366,515		8.00		$	458,144	10.00	%

Tier 1 capital to risk-weighted assets
Consolidated	$	575,250	12.54	%	$	275,268	6.00	%	NA		NA
Independent Bank	523,676		11.43		274,886		6.00		$	366,515	8.00	%

Common equity tier 1 capital to risk-weighted assets
Consolidated	$	536,593	11.70	%	$	206,451	4.50	%	NA		NA
Independent Bank	523,676		11.43		206,165		4.50		$	297,793	6.50	%

Tier 1 capital to average assets
Consolidated	$	575,250	10.34	%	$	222,477	4.00	%	NA		NA
Independent Bank	523,676		9.43		222,243		4.00		$	277,803	5.00	%

December 31, 2025
Total capital to risk-weighted assets
Consolidated	$	621,506	13.59	%	$	365,958	8.00	%	NA		NA
Independent Bank	570,750		12.49		365,463		8.00		$	456,829	10.00	%

Tier 1 capital to risk-weighted assets
Consolidated	$	564,180	12.33	%	$	274,468	6.00	%	NA		NA
Independent Bank	513,500		11.24		274,098		6.00		$	365,463	8.00	%

Common equity tier 1 capital to risk-weighted assets
Consolidated	$	525,540	11.49	%	$	205,851	4.50	%	NA		NA
Independent Bank	513,500		11.24		205,573		4.50		$	296,939	6.50	%

Tier 1 capital to average assets
Consolidated	$	564,180	10.27	%	$	219,663	4.00	%	NA		NA
Independent Bank	513,500		9.36		219,422		4.00		$	274,278	5.00	%

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(1)			These ratios do not reflect a capital conservation buffer of 2.50% at March 31, 2026 and December 31, 2025.

NA - Not applicable

The components of our regulatory capital are as follows:


	Consolidated				Independent Bank
	March 31, 2026		December 31, 2025		March 31, 2026		December 31, 2025
	(In thousands)
Total shareholders' equity	$	510,553	$	502,951	$	497,636	$	490,911
Add (deduct)
Accumulated other comprehensive loss for regulatory purposes	55,226		51,890		55,226		51,890
Goodwill and other intangibles	(29,186)		(29,301)		(29,186)		(29,301)
Common equity tier 1 capital	536,593		525,540		523,676		513,500
Qualifying trust preferred securities	38,657		38,640		—		—
Tier 1 capital	575,250		564,180		523,676		513,500
Allowance for credit losses and allowance for unfunded lending commitments limited to 1.25% of total risk-weighted assets	57,492		57,326		57,414		57,250
Total risk-based capital	$	632,742	$	621,506	$	581,090	$	570,750

- 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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