NEW INDEPENDENT BANCSHARES, INC. AND SUBSIDIARY Notes to the Consolidated Financial Statements
NOTE 20.
MINIMUM CAPITAL STANDARDS
The New Washington State Bank is 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 consolidated financial statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines that involve quantitative measures of the Bank’ s assets, liabilities, and certain off-balance-sheet items as calculated under regulatory accounting practices. The Bank’ s capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors. Prompt corrective action provisions are not applicable to bank holding companies.
The Bank has adopted the community bank leverage ratio( CBLR) framework. Under this framework, qualifying community bank organizations that maintain a leverage ratio greater than 9 percent are considered to have satisfied the risk-based and leverage capital requirements in the agencies ' generally applicable capital rule. Additionally, such banks are considered to have met the well-capitalized ratio requirements for purposes of section 38 of the Federal Deposit Act. As of December 31, 2025 and 2024, the Bank had a Tier 1 leverage ratio of 9.6784 % and 10.1200 %, respectively, and was considered a qualifying community bank organization due to having less than $ 10 billion in total consolidated assets, a leverage ratio greater than 9 %, off-balance sheet exposures of less than 25 % of total consolidated assets, and not having any trading assets or liabilities.
Management believes that the Bank met the capital adequacy requirements to which they were subject as of December 31, 2025 and 2024. As of December 31, 2025, the most recent notification from the regulatory agencies categorized the Bank as well-capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the Bank’ s category.
NOTE 21.
DIVIDEND LIMITATIONS
Subsidiary Bank dividends are the principal source of funds for payment of dividends by the Company to its shareholders. The Subsidiary Bank ' s payment of dividends is restricted by state and federal banking regulation. Dividends may not be paid if such payment results in an impairment of capital.
NOTE 22.
SUBSEQUENT EVENTS
Management has evaluated subsequent events through April 30, 2026, the date on which the consolidated financial statements were available to be issued.
54 | 2025 NWSB Annual Report