REGULATORY CAPITAL REQUIREMENTS

12 Months Ended

Dec. 31, 2019

Banking and Thrift [Abstract]

REGULATORY CAPITAL REQUIREMENTS

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, 2019 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, 2019 and 2018, 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, 2019 and 2018 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, 2019
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	1,352,341	14.83	%	$	729,291	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	1,171,963	12.86	%	$	410,226	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	1,232,963	13.53	%	$	546,969	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets) leverage	$	1,232,963	11.28	%	$	437,271	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	1,275,611	14.00	%	$	728,868	≥	8.0	%	$	911,085	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	1,205,740	13.23	%	$	409,988	≥	4.5	%	$	592,205	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	1,205,740	13.23	%	$	546,651	≥	6.0	%	$	728,868	≥	8.0	%
Tier 1 capital (to average assets) leverage	$	1,205,740	11.06	%	$	435,886	≥	4.0	%	$	544,857	≥	5.0	%
	December 31, 2018
	(Dollars in thousands)
Independent Bank Corp.
Total capital (to risk weighted assets)	$	992,454	14.45	%	$	549,297	≥	8.0	%	N/A			N/A
Common equity tier 1 capital (to risk weighted assets)	$	818,176	11.92	%	$	308,980	≥	4.5	%	N/A			N/A
Tier 1 capital (to risk weighted assets)	$	892,176	12.99	%	$	411,973	≥	6.0	%	N/A			N/A
Tier 1 capital (to average assets)	$	892,176	10.69	%	$	333,754	≥	4.0	%	N/A			N/A
Rockland Trust Company
Total capital (to risk weighted assets)	$	937,574	13.66	%	$	549,036	≥	8.0	%	$	686,295	≥	10.0	%
Common equity tier 1 capital (to risk weighted assets)	$	872,024	12.71	%	$	308,833	≥	4.5	%	$	446,092	≥	6.5	%
Tier 1 capital (to risk weighted assets)	$	872,024	12.71	%	$	411,777	≥	6.0	%	$	549,036	≥	8.0	%
Tier 1 capital (to average assets)	$	872,024	10.46	%	$	333,595	≥	4.0	%	$	416,994	≥	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, 2019 and 2018.

Dividend Restrictions

In the ordinary course of business, the Company is dependent upon dividends from the Bank to provide funds for the payment of dividends to shareholders and to provide for other cash requirements. Banking regulations may limit the amount of dividends that may be paid. Approval by regulatory authorities is required if the effect of dividends declared would cause the regulatory capital of the Bank to fall below specified minimum levels. Approval is also required if dividends declared exceed the

net profits for that year combined with the retained net profits for the preceding two years. Under the foregoing dividend restrictions and while maintaining its "well capitalized" status, dividends paid by the Bank to the Company for the year ended December 31, 2019 and 2018 totaled $181.7 million and $71.2 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. At December 31, 2019 and 2018, there was $61.0 million and $74.0 million, respectively, in trust preferred securities that have been included in the Tier 1 capital of the Company for regulatory reporting purposes pursuant to the Federal Reserve's capital adequacy guidelines. The decrease in 2019 was due to the redemption of trust preferred securities of $13.0 million during the year.