Regulatory Restrictions

12 Months Ended

Dec. 31, 2023

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, 2023, 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, 2023.

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, 2023 and 2022, 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, 2023
Common Equity Tier I Capital Ratio
Company	$	1,187,027	13.20	%	629,376	7.00	%	N/A	N/A
Bank	1,291,074		14.36	%	629,256	7.00	%	584,309	6.50	%
Total Capital Ratio
Company	1,397,502		15.54	%	944,064	10.50	%	N/A	N/A
Bank	1,403,551		15.61	%	943,884	10.50	%	898,938	10.00	%
Tier I Capital Ratio
Company	1,257,834		13.99	%	764,242	8.50	%	N/A	N/A
Bank	1,291,074		14.36	%	764,097	8.50	%	719,150	8.00	%
Leverage Ratio
Company	1,257,834		10.91	%	461,312	4.00	%	N/A	N/A
Bank	1,291,074		11.20	%	461,248	4.00	%	576,560	5.00	%

As of December 31, 2022
Common Equity Tier I Capital Ratio
Company	$	1,010,369	13.02	%	543,403	7.00	%	N/A	N/A
Bank	1,077,526		13.88	%	543,301	7.00	%	504,494	6.50	%
Total Capital Ratio
Company	1,171,084		15.09	%	815,104	10.50	%	N/A	N/A
Bank	1,174,634		15.13	%	814,951	10.50	%	776,144	10.00	%
Tier I Capital Ratio
Company	1,073,958		13.83	%	659,846	8.50	%	N/A	N/A
Bank	1,077,526		13.88	%	659,723	8.50	%	620,915	8.00	%
Leverage Ratio
Company	1,073,958		10.51	%	408,623	4.00	%	N/A	N/A
Bank	1,077,526		10.55	%	408,569	4.00	%	510,712	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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