REGULATORY CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2022

REGULATORY MATTERS

Regulatory Capital Requirements

The Company 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 Company and the Bank must meet specific capital guidelines that involve quantitative measures of the Company’s and the Bank’s assets, liabilities and certain off-

balance sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

At December 31, 2022 the most recent notification from the Federal Deposit Insurance Corporation indicated that the Bank's capital levels met or exceeded the minimum levels to be considered "well capitalized" for bank regulatory purposes. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, Common equity Tier 1 risk-based and Tier 1 leverage ratios as set forth in the following tables. There are no conditions or events since the notification that management believes have changed the Bank’s category. Management believes, as of December 31, 2022 and 2021, that the Company and the Bank met all capital adequacy requirements to which they are subject.

The Company’s and the Bank’s actual capital amounts and ratios as of December 31, 2022 and 2021 are also presented in the table that follows:


	Actual				For Capital Adequacy Purposes					To Be Well Capitalized Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount			Ratio		Amount			Ratio
	December 31, 2022
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	2,311,824	16.11	%	$	1,148,328	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	2,057,099	14.33	%	$	645,935	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	2,057,099	14.33	%	$	861,246	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets) leverage	$	2,057,099	10.99	%	$	748,775	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	2,162,752	15.07	%	$	1,148,329	≥	8.0	%	$	1,435,411	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	2,018,912	14.07	%	$	645,935	≥	4.5	%	$	933,017	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	2,018,912	14.07	%	$	861,247	≥	6.0	%	$	1,148,329	≥	8.0	%
Tier 1 capital (to average assets) leverage	$	2,018,912	10.78	%	$	748,828	≥	4.0	%	$	936,036	≥	5.0	%
	December 31, 2021
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	2,262,740	16.04	%	$	1,128,900	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	2,017,497	14.30	%	$	635,006	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	2,017,497	14.30	%	$	846,675	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets)	$	2,017,497	12.03	%	$	670,659	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	2,083,689	14.77	%	$	1,128,536	≥	8.0	%	$	1,410,670	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	1,949,237	13.82	%	$	634,801	≥	4.5	%	$	916,935	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	1,949,237	13.82	%	$	846,402	≥	6.0	%	$	1,128,536	≥	8.0	%
Tier 1 capital (to average assets)	$	1,949,237	11.62	%	$	670,827	≥	4.0	%	$	838,534	≥	5.0	%

In addition to the minimum risk-based capital requirements outlined in the table above, the Company is required to maintain a minimum capital conservation buffer, in the form of common equity, in order to avoid restrictions on capital distributions and discretionary bonuses. The required amount of the capital conservation buffer is 2.5%. The Company's capital levels exceeded the minimum requirement plus the buffer of 2.5% as of December 31, 2022 and 2021.

Dividend Restrictions

The Company is subject to capital and dividend requirements administered by federal and state bank regulators, and the Company will not declare a cash dividend that would cause the Company to violate regulatory requirements. The Company is, in the ordinary course of business, dependent upon the receipt of cash dividends from the Bank to pay cash dividends to shareholders and satisfy the Company’s other cash needs. Federal and state law impose limits on capital distributions by the Bank. Massachusetts-chartered banks, such as the Bank, may declare from net profits cash dividends not more frequently than quarterly and non-cash dividends at any time. No dividends may be declared, credited, or paid if the Bank’s capital stock would be impaired. Massachusetts Bank Commissioner approval is required if the total of all dividends declared by the Bank in any calendar year would exceed the total of its net profits for that year combined with its retained net profits of the preceding two years, less any required transfer to surplus or a fund for the retirement of any preferred stock. Dividends paid by the Bank to the Company for the year ended December 31, 2022 and 2021 totaled $209.2 million and $77.6 million, respectively.

Trust Preferred Securities

In accordance with the applicable accounting standard related to variable interest entities, the common stock of trusts which have issued trust preferred securities have not been included in the consolidated financial statements of the Company. At both December 31, 2022 and 2021, there were $61.0 million in trust preferred securities that have been included within total capital of the Company for regulatory reporting purposes pursuant to the Federal Reserve's capital adequacy guidelines.

For regulatory purposes, bank holding companies are allowed to include trust preferred securities in Tier 1 capital up to a certain limit. Provisions in the Dodd-Frank Act generally exclude trust preferred securities from Tier 1 capital, however, holding companies with consolidated assets of less than $15 billion at December 31, 2009, are able to permanently to include these instruments in Tier 1 capital, unless the Company crosses the consolidated assets threshold as a result of merger and acquisition activity. Accordingly, as the Company’s 2021 acquisition of Meridian resulted in the crossing of $15 billion in its consolidated assets, its trust preferred securities were phased out of Tier 1 capital and included within Tier 2 capital as of December 31, 2021, in accordance with applicable regulatory guidance. All obligations under these trust preferred securities are unconditionally guaranteed by the Company.

- 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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