~~Volcker Rule Restrictions on Proprietary Trading and Sponsorship of Hedge Funds and Private Equity Funds~~

The Dodd-Frank Act prohibits banking organizations, such as the Company and the Banks, from engaging in proprietary trading and from sponsoring and investing in hedge funds and private equity funds, except as permitted under certain limited circumstances, in a provision commonly referred to as the “Volcker Rule.” Under the Dodd-Frank Act, proprietary trading generally means trading by a banking entity or its affiliate for its trading account. Hedge funds and private equity funds are described by the Dodd-Frank Act as funds that would be registered under the Investment Company Act but for certain enumerated exemptions. The Volcker Rule restrictions apply to the Company, the Banks and all of their subsidiaries and affiliates.

Item 1A. Risk Factors

Before deciding to invest in us or deciding to maintain or increase your investment, you should carefully consider the risks described below, in addition to the other information contained in this report and in our other filings with the SEC. The risks and uncertainties described below and in our other filings are not the only ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business. If any of these known or unknown risks or uncertainties actually occur, our business, financial condition and results of operations could be seriously harmed. In that event, the market price for our common stock could decline and you may lose your investment.

~~Deterioration~~RISKS RELATED TO OUR BUSINESS AND INDUSTRY

The possibility of the economy’s return to recessionary conditions and the possibility of further turmoil or volatility in ~~local economies~~the financial markets would likely have an adverse effect on our business, financial position, and results of operations.

The economy in the United States and globally has experienced volatility in recent years and may continue to experience such volatility for the foreseeable future. There can be no assurance that economic conditions will not worsen. Unfavorable or ~~real estate~~uncertain economic conditions can be caused by declines in economic growth, business activity, or investor or business confidence, limitations on the availability or increases in the cost of credit and capital, increases in inflation or interest rates, the timing and impact of changing governmental policies, natural disasters, climate change, epidemics, future pandemics, terrorist attacks, acts of war, or a combination of these or other factors. A worsening of business and economic conditions could have adverse effects on our business, including the following:

•investors may have less confidence in the equity markets in general and in financial services industry stocks in particular, which could place downward pressure on our stock price and resulting market valuation;

•economic and market developments may further affect consumer and business confidence levels and may cause declines in credit usage and adverse changes in payment patterns, causing increases in delinquencies and default rates;

•our ability to assess the creditworthiness of our customers may be impaired if the models and approaches we use to select, manage, and underwrite loans become less predictive of future behaviors;

•we could suffer decreases in demand for loans or other financial products and services or decreased deposits or other investments in accounts with us;

•competition in the financial services industry could intensify as a result of the increasing consolidation of financial services companies in connection with current market conditions or otherwise; and

•the value of loans and other assets or collateral securing loans may decrease.

Our business may be adversely ~~affect~~affected by changes in economic conditions in our ~~business.~~market area.

We primarily serve individuals and businesses located in the ~~greater~~Greater Boston metropolitan area, eastern Massachusetts, Rhode Island, the Lower Hudson Valley in New York, and the Greater New York and New Jersey ~~and Rhode Island.~~metropolitan area. Our success is largely dependent on local and regional economic conditions. Unlike other larger institutions, we are not able to spread the risks of unfavorable local economic conditions ~~including employment levels, population growth, income levels, savings trends~~across a large number of diversified economies. An economic downturn could, therefore, result in losses that materially and ~~government policies, in those market areas. Weaker~~adversely affect our business. Recessionary economic conditions, ~~caused by recession,~~increased unemployment, inflation, a decline in real estate values or other factors beyond our control may adversely affect the ability of our borrowers to ~~service~~repay their ~~debt obligations,~~loans, and could result in higher loan and lease losses and lower net income for us.

~~Our business may be adversely affected by conditions in the financial markets and by economic conditions generally.~~

Weakness in the U.S. economy may adversely affect our business. While in recent years there has been a gradual improvement in the U.S. economy, the outlook remains uncertain amid concerns about short- and long-term interest rates, debt and equity capital markets and financial market conditions generally. AIn addition, deterioration of business and economic conditions could adversely affect the credit quality of our loans, results of operations and financial condition. Increases in loan delinquencies and default rates could adversely impact our loan charge-offs and provision for loan and lease losses. Deterioration or defaults made by issuers of the underlying collateral of our investment securities may cause additional credit-related other-than-temporary impairment charges to our income statement. Our ability to borrow from other financial institutions or to access the debt or equity capital markets on favorable terms or at all could be adversely affected by disruptions in the capital markets or other events, including actions by rating agencies and deteriorating investor expectations.

Changes to interest rates could adversely affect our results of operations and financial condition.

Our consolidated results of operations depend, on a large part, on net interest income, which is the difference between (i) interest income on interest-earning assets, such as loans, leases and securities, and (ii) interest expense on interest-bearing liabilities, such as deposits and borrowed funds. As a result, our earnings and growth are significantly affected by interest rates, which are subject to the influence of economic conditions generally, both domestic and foreign, to events in the capital markets and also to the monetary and fiscal policies of the United States and its agencies, particularly the FRB. The nature and timing of any changes in such policies or general economic conditions and their effect on us cannot be controlled and are extremely difficult to predict. An increase in interest rates could also have a negative impact on our results of operations by reducing the ability of borrowers to repay their current loan obligations, which could not only result in increased loan defaults, foreclosures

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and charge-offs, but also necessitate further increases to our allowances for loan losses. A decrease in interest rates may trigger loan prepayments, which may serve to reduce net interest income if we are unable to lend those funds to other borrowers or invest the funds at the same or higher interest rates.

Inflationary pressures and rising prices may affect our results of operations and financial condition.

Inflation continued at elevated levels in 2023. Inflationary pressures, including the impact of recent increases in inflation, may remain elevated in 2024. Small to medium-sized businesses may be impacted more during periods of high inflation as they are not able to leverage economics of scale to mitigate cost pressures compared to larger businesses. Consequently, the ability of our business customers to repay their loans may deteriorate, and in some cases this deterioration may occur quickly, which would adversely impact our results of operations and financial condition. Furthermore, a prolonged period of inflation could cause wages and other costs increase, which could adversely affect our results of operations and financial condition.

We face significant and increasing competition in the financial services industry.

We operate in a highly ~~regulated industry,~~competitive environment that includes financial and ~~laws~~non-financial services firms, including traditional banks, online banks, financial technology companies, wealth management companies and ~~regulations, or changes in them, could limit or restrict our activities~~others. These companies compete on the basis of, among other factors, size, quality and ~~could~~type of products and services offered, price, technology and reputation. Emerging technologies have ~~a material adverse effect on our operations.~~

Wethe potential to intensify competition and our banking subsidiaries are subject to regulation and supervision by the FRB. Our banking subsidiaries are also subject to regulation and supervision by state banking regulators and the FRB. Federal and state laws and regulations govern numerous matters affecting us, including changesaccelerate disruption in the ~~ownership or control~~financial services industry. In recent years, non-financial services firms, such as financial technology companies, have begun to offer services traditionally provided by financial institutions. These firms attempt to use technology and mobile platforms to enhance the ability of ~~banks~~companies and ~~bank holding companies, maintenance~~individuals to borrow money, save and invest. Our ability to compete successfully depends on a number of ~~adequate capital~~factors, including our ability to develop and ~~the financial condition of a financial institution, permissible types, amounts~~execute strategic plans and ~~terms of extensions of credit~~initiatives; to develop competitive products and ~~investments, permissible non-banking activities, the level of reserves against deposits~~technologies; and ~~restrictions on dividend payments. The FRB~~to attract, retain and the state banking regulators have the power to issue cease and desist orders to prevent or remedy unsafe or unsound practices or violations of law by banks subject to their regulation, and the FRB possesses similar powers with respect to bank holding companies. These and other restrictions limit the manner in which we and our banking subsidiaries may conduct business and obtain financing.

Asdevelop a highly ~~regulated business, the laws, rules, regulations, and supervisory guidance and policies applicable~~skilled employee workforce. If we are not able to ~~us are subject to regular modification and change. Changes to statutes, regulations, or regulatory policies, including changes~~compete successfully, we could be placed at a competitive disadvantage, which could result in interpretation or implementation of statutes, regulations, or policies, or supervisory guidance could affect in enforcement and other legal actions by federal or state authorities, including criminal and civil penalties, the loss of ~~FDIC insurance, revocation~~customers and market share, and our business, results of ~~a banking charter, other sanctions by regulatory agencies, civil money penalties,~~operations and financial condition could suffer.

Our business may be adversely affected if we fail to adapt our products and services to evolving industry standards and consumer preferences.

The financial services industry is undergoing rapid technological changes with frequent introductions of new technology driven products and services. The widespread adoption of new technologies, including payment systems, could require substantial expenditures to modify or adapt our existing products and services as the introduction of new or modified products and services can entail significant time and resources. We might not be successful in developing or introducing new products and services, integrating new products or services into our existing offerings, responding or adapting to changes in consumer behavior, preferences, spending, investing and/or ~~reputational damage,~~saving habits, achieving market acceptance of our products and services, reducing costs in response to pressures to deliver products and services at lower prices or sufficiently developing and maintaining loyal customers.

Development of new products services and technologies may impose additional costs on us and may expose us to increased operational risk.

The introduction of new products and services can entail significant time and resources, including regulatory approvals. Substantial risks and uncertainties are associated with the introduction of new products and services, including technical and control requirements that may need to be developed and implemented, rapid technological change in the industry, our ability to access technical and other information from its clients, the significant and ongoing investments required to bring new products and services to market in a timely manner at competitive prices and the preparation of marketing, sales and other materials that fully and accurately describe the product or service and its underlying risks. Our failure to manage these risks and uncertainties also exposes it to enhanced risk of operational lapses which may result in the recognition of financial statement liabilities. Regulatory and internal control requirements, capital requirements, competitive alternatives, vendor relationships and shifting market preferences may also determine if such initiatives can be brought to market in a manner that is timely and attractive to our clients. Products and services relying on internet and mobile technologies may expose us to fraud and cybersecurity risks. Implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, may have unintended consequences due to their limitations, potential manipulation, or our failure to use them effectively. Failure to successfully manage these risks in the development and implementation of new products or services could have a material adverse effect on our business ~~financial condition,~~ and ~~results of operations. See the "Supervision and Regulation" section of Item 1, "Business."~~

~~We are subject to capital and liquidity standards that require banks and bank holding companies to maintain more and higher quality capital and greater liquidity than has historically been the case~~.

We became subject to new capital requirements in 2015. These new standards, which now apply and will be fully phased-in over the next several years, force bank holding companies and their bank subsidiaries to maintain substantially higher levels of capital as a percentage of their assets, with a greater emphasis on common equity as opposed to other components of capital. The need to maintain more and higher quality capital,reputation, as well as greater liquidity, and generally increased regulatory scrutiny with respect to capital levels, may at some point limit our business activities, including lending, and our ability to expand. It could also result in our being required to take steps to increase our regulatory capital and may dilute shareholder value or limit our ability to pay dividends or otherwise return capital to our investors through stock repurchases. Pursuant to the Dodd-Frank Act, we were permitted to make a one-time, permanent election to continue to exclude accumulated other comprehensive income from capital. The Company made this election.

We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.

The Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations impose community investment and nondiscriminatory lending requirements on financial institutions. The Consumer Financial Protection Bureau, the Department of Justice and other federal agencies are responsible for enforcing these laws and regulations. A successful regulatory challenge to an institution’s performance under the Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Housing Act or other fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions, restrictions on expansion and restrictions on entering new business lines. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results of operations.

~~We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us.~~

From time to time we are named as a defendant or are otherwise involved in various legal proceedings, including class actions and other litigation or disputes with third parties. There is no assurance that litigation with private parties will not increase in the future. Actions against us may result in judgments, settlements, fines, penalties or other results adverse to us, which could materially adversely affect our business, financial condition orits consolidated results of operations ~~or cause serious reputational harm to us. As a participant in the~~and financial ~~services industry, it is likely that we could continue to experience a high level of litigation related to our businesses and operations.~~

Our businesses and operations are also subject to increasing regulatory oversight and scrutiny, which may lead to additional regulatory investigations or enforcement actions. These and other initiatives from federal and state officials may subject us to further judgments, settlements, fines or penalties, or cause us to be required to restructure our operations and activities, all of which could lead to reputational issues, or higher operational costs, thereby reducing our revenue.

~~We may incur fines, penalties and other negative consequences from regulatory violations, possibly even inadvertent or unintentional violations.~~

The financial services industry is subject to intense scrutiny from bank supervisors in the examination process and aggressive enforcement of federal and state regulations, particularly with respect to mortgage-related practices and other consumer compliance matters, and compliance with anti-money laundering, Bank Secrecy Act and Office of Foreign Assets Control regulations, and economic sanctions against certain foreign countries and nationals. Enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices. We maintain systems and procedures designed to ensure that we comply with applicable laws and regulations; however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there was in place at the time systems and procedures designed to ensure compliance. Failure to comply with these and other regulations, and supervisory expectations related thereto, may result in fines, penalties, lawsuits, regulatory sanctions, reputation damage, or restrictions on our business.condition.

If our allowance for ~~loan and lease~~credit losses is not sufficient to cover actual loan and lease losses, our earnings may decrease.

We are exposed to the risk that our borrowers may default on their obligations. A borrower's default on its obligations under one or more loans or leases may result in lost principal and interest income and increased operating expenses as a result of the allocation of management time and resources to the collection and work-out of the loan or lease. In certain situations, where collection efforts are unsuccessful or acceptable work-out arrangements cannot be reached, we may have to write off the loan or lease in whole or in part. In such situations, we may acquire real estate or other assets, if any, that secure the loan or lease through foreclosure or other similar available remedies, and often the amount owed under the defaulted loan or lease exceeds the value of the assets acquired.

We periodically make a determination of an allowance for ~~loan and lease~~credit losses based on available information, including, but not limited to, the quality of the loan and lease portfolio as indicated by trends in loan risk ratings, payment performance, economic conditions, the value of the underlying collateral and the level of nonaccruing and criticized loans and leases. Management

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relies on its loan officers and credit quality reviews, its experience and its evaluation of economic conditions, among other factors, in determining the amount of provision required for the allowance for ~~loan and lease~~credit losses. Provisions to this allowance result in an expense for the period. If, as a result of general economic conditions, previously incorrect assumptions, or an increase in defaulted loans or leases, we determine that additional increases in the allowance for ~~loan and lease~~credit losses are necessary, additional expenses may be incurred.

Determining the allowance for ~~loan and lease~~credit losses inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit risks and trends, all of which may undergo material changes. ~~At any time, there are likely to be loans and/or leases in our portfolio that will result in losses but that have not been identified as nonperforming or potential problem credits.~~ We cannot be sure that we will be able to identify deteriorating credits before they become nonperforming assets or that we will be able to limit losses on those loans and leases that are identified. We have in the past been, and in the future may be, required to increase our allowance for ~~loan and lease~~credit losses for any of several reasons. State and federal regulators, in reviewing our loan and lease portfolio as part of a regulatory examination, may request that we increase the allowance for ~~loan and lease~~credit losses. Changes in economic conditions or individual business or personal circumstances affecting borrowers, new information regarding existing loans and leases, identification of additional problem loans and leases and other factors, both within and outside of our control, may require an increase in the allowance for ~~loan and lease losses. In addition, if charge-offs in future periods exceed the allowance for loan and lease losses, we will need additional increases in its allowance for loan and lease~~credit losses. Any increases in the allowance for ~~loan and lease~~credit losses may result in a decrease in our net income and, possibly, our capital, and could have an adverse effect on our financial condition and results of operations.

Our loan and lease portfolios include commercial real estate mortgage loans and commercial loans and leases, including equipment leases, which are generally riskier than other types of loans.

Our commercial real estate and commercial loan and lease portfolios, including equipment leases, currently comprise ~~80.8%~~84.7% of total loans and leases. Payments on loans secured by commercial real estate are often dependent on the income produced by the underlying properties which, in turn, depends on the successful operation and management of the properties and the businesses that operate within them. Accordingly, repayment of these loans is subject to conditions in the real estate market or the local economy. The COVID-19 pandemic has had a potentially long-term negative impact on certain commercial real estate assets due to the risk that tenants may reduce the office space they lease as some portion of the workforce continues to work remotely on a hybrid or full-time basis. Commercial loans and leases generally carry larger balances and involve a higher risk of nonpayment or late payment than residential mortgage loans. Most ~~of the~~ commercial loans and leases are secured by borrower business assets such as accounts receivable, inventory, equipment and other fixed assets. Compared to real estate, these types of collateral are more difficult to monitor, harder to value, may depreciate more rapidly and may not be as readily saleable if repossessed. Repayment of commercial loans and leases is largely dependent on the business and financial condition of borrowers. Business cash flows are dependent on the demand for the products and services offered by the borrower's business. Such demand may be reduced when economic conditions are weak or when the products and services offered are viewed as less valuable than those offered by competitors. Because of the risks associated with commercial real estate and commercial loans and leases, including equipment leases, we may experience higher rates of default than if the portfolio were more heavily weighted toward residential mortgage loans. ~~Higher rates~~While we seek to minimize these risks in a variety of ~~default could have an adverse effect on our financial condition and results of operations.~~

ways, there can be no assurance that these measures will protect against credit-related losses.

Environmental liability associated with our lending activities could result in losses.

In the course of business, we may acquire, through foreclosure, properties securing loans originated or purchased that are in default. Particularly in commercial real estate lending, there is a risk that material environmental violations could be discovered on these properties. In this event, we might be required to remedy these violations at the affected properties at our sole cost and expense. The cost of remedial action could substantially exceed the value of affected properties. We may not have adequate remedies against the prior owner or other responsible parties and could find it difficult or impossible to sell the affected properties. These events could have an adverse effect on our financial condition and results of operations.

~~Competition in the financial services industry could make it difficult for us to sustain adequate profitability.~~

We face significant competition for loans, leases and deposits from other banks and financial institutions both within and beyond our local marketplace. Many of our competitors have substantially greater resources and higher lending limits than we do and may offer products and services that we do not, or cannot, provide. There is also increased competition by out-of-market competitors through the internet. The ability of non-banking financial institutions to provide services previously limited to commercial banks has intensified competition. Because non-banking financial institutions are not subject to the same regulatory restrictions as banks and bank holding companies, they can often operate with greater flexibility and lower cost structures. Securities firms and insurance companies that elect to become financial holding companies may acquire banks and other financial institutions. This may significantly change the competitive environment in which we conduct our business. As a result of these various sources of competition, we could lose business to competitors or could be forced to price products and services on less advantageous terms to retain or attract clients, either of which would adversely affect our profitability.

~~Market changes may adversely affect demand for our services and impact results of operations.~~

Channels for servicing our customers are evolving rapidly, with less reliance on traditional branch facilities, more use of online and mobile banking, and increased demand for universal bankers and other relationship managers who can service multiples product lines. We compete with larger providers who are rapidly evolving their service channels and escalating the costs of evolving the service process. We have a process for evaluating the profitability of our branch system and other office and operational facilities. The identification of unprofitable operations and facilities can lead to restructuring charges and introduce the risk of disruptions to revenues and customer relationships.

Our securities portfolio performance in difficult market conditions could have adverse effects on our results of operations.

Unrealized losses on investment securities result from changes in credit spreads and liquidity issues in the marketplace, along with changes in the credit profile of individual securities issuers. Under GAAP, we are required to review our investment portfolio periodically for the presence of ~~other-than-temporary~~ impairment of our securities, taking into consideration current and future market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, current analysts' evaluations, our ability and intent to hold investments until a recovery of fair value, as well as other factors. Adverse developments with respect to one or more of the foregoing factors may require us to deem particular securities to be ~~other-than-temporarily~~ impaired, with the credit-related portion of the reduction in the value recognized as a charge to our ~~earnings.~~earnings through an allowance. Subsequent valuations, in light of factors prevailing at that time, may result in significant changes in the values of these securities in future periods. Any of these factors could require us to recognize further impairments in the value of our securities portfolio, which may have an adverse effect on our results of operations in future periods.

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The fair value of our investment securities can fluctuate due to factors outside of our control.

Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of these securities. These factors include, but are not limited to, rating agency actions with respect to individual securities, defaults by the issuer or with respect to the underlying securities, and changes in market interest rates and continued instability in the capital markets. For example, in 2023, inflation and rapid increases in interest rates led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. Any of these factors, among others, could cause other-than-temporary impairments and realized and/or unrealized losses in future periods and declines in other comprehensive income, which could materially and adversely affect our business, results of operations, financial condition and prospects. The process for determining whether impairment of a security is other than-temporary usually requires complex, subjective judgments about the future financial performance and liquidity of the issuer and any collateral underlying the security in order to assess the probability of receiving all contractual principal and interest payments on the security. Significant negative changes to valuations could result in impairments in the value of our securities portfolio, which could have an adverse effect on our financial condition or results of operations.

Potential downgrades of U.S. government securities by one or more of the credit ratings agencies could have a material adverse effect on our operations, earnings and financial condition.

A possible future downgrade of the sovereign credit ratings of the U.S. government and a decline in the perceived creditworthiness of U.S. government-related obligations could impact our ability to obtain funding that is collateralized by affected instruments, as well as affect the pricing of that funding when it is available. A downgrade may also adversely affect the market value of such instruments. We cannot predict if, when or how any changes to the credit ratings or perceived creditworthiness of these organizations will affect economic conditions. Such ratings actions could result in a significant adverse impact on us. Among other things, a downgrade in the U.S. government’s credit rating could adversely impact the value of our securities portfolio and may trigger requirements that ~~the Company~~we post additional collateral for trades relative to these securities. A downgrade of the sovereign credit ratings of the U.S. government or the credit ratings of related institutions, agencies or instruments ~~would~~could significantly exacerbate the other risks to which we are subject and any related adverse effects on the business, financial condition and results of operations.

The replacement of LIBOR may adversely affect our business, financial condition and results of operations.

LIBOR has been used extensively in the United States as a benchmark for various commercial and financial contracts, including funding sources, adjustable rate mortgages, corporate debt, interest rate swaps and other derivatives. LIBOR was set based on interest rate information reported by certain banks, which stopped reporting such information after June 30, 2023 (although certain U.S. dollar LIBOR settings will continue to be published using a synthetic methodology until September 2024). Other benchmarks may perform differently than LIBOR or may have other consequences that cannot currently be anticipated. The transition from LIBOR to another benchmark rate or rates, such as the Secured Overnight Financing Rate, or "SOFR", could have adverse impacts on our funding costs or net interest margins, as well as any floating-rate obligations, loans, deposits, derivatives, and other financial instruments that currently use LIBOR as a benchmark rate and, ultimately, adversely affect our financial condition and results of operations.

We are subject to liquidity risk, which could negatively affect our funding levels.

Market conditions or other events could negatively affect our access to or the cost of funding, affecting our ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, or fund asset growth and new business initiatives at a reasonable cost, in a timely manner and without adverse consequences.

Although we maintain a liquid asset portfolio and have implemented strategies to maintain sufficient and diverse sources of funding to accommodate planned, as well as unanticipated, changes in assets, liabilities, and off-balance sheet commitments under various economic conditions, a substantial, unexpected, or prolonged change in the level or cost of liquidity could have a material adverse effect on us. If the cost effectiveness or the availability of supply in these credit markets is reduced for a prolonged period of time, our funding needs may require us to access funding and manage liquidity by other means. These alternatives may include generating client deposits, securitizing or selling loans, extending the maturity of wholesale borrowings, borrowing under certain secured borrowing arrangements, using relationships developed with a variety of fixed income investors, and further managing loan growth and investment opportunities. These alternative means of funding may result in an increase to the overall cost of funds and may not be available under stressed conditions, which would cause us to liquidate a portion of our liquid asset portfolio to meet any funding needs.

Loss of deposits or a change in deposit mix could increase our cost of funding.

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Deposits are a low cost and stable source of funding. We compete with banks and other financial institutions for deposits. Funding costs may increase if we lose deposits and are forced to replace them with more expensive sources of funding, if clients shift their deposits into higher cost products or if we need to raise interest rates to avoid losing deposits. Higher funding costs reduce our net interest margin, net interest income and net income.

Wholesale funding sources may prove insufficient to replace deposits at maturity and support our operations and future growth.

We and our banking subsidiaries must maintain sufficient funds to respond to the needs of depositors and borrowers. To manage liquidity, we draw upon a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. These sources include Federal Home Loan Bank advances, proceeds from the sale of investments and loans, and liquidity resources at the holding company. Our ability to manage liquidity will be severely constrained if we are unable to maintain access to funding or if adequate financing is not available to accommodate future growth at acceptable costs. In addition, if we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs. In this case, operating margins and profitability would be adversely affected. Turbulence in the capital and credit markets may adversely affect our liquidity and financial condition and the willingness of certain counterparties and customers to do business with us.

Potential deterioration in the performance or financial position of the Federal Home Loan Bank ("FHLB") of Boston and New York might restrict our funding needs and may adversely impact our financial condition and results of operations.

Significant components of our liquidity needs are met through our access to funding pursuant to our membership in the FHLB. The FHLB is a cooperative that provides services to its member banking institutions. The primary reason for joining the FHLB is to obtain funding. The purchase of stock in the FHLB is a requirement for a member to gain access to funding. Any deterioration in the FHLB’s performance or financial condition may affect our ability to access funding and/or require us to deem the required investment in FHLB stock to be impaired. If we are not able to access funding through the FHLB, we may not be able to meet our liquidity needs, which could have an adverse effect on our results of operations or financial condition. Similarly, if we deem all or part of our investment in FHLB stock impaired, such action could have an adverse effect on our financial condition or results of operations.

Adverse developments affecting the financial services industry, such as actual events or concerns involving liquidity, defaults, or non-performance by financial institutions or transactional counterparties, could adversely affect our financial condition and results of operations.

Actual events involving limited liquidity, defaults, non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to market-wide liquidity problems. For example, on May 1, 2023, First Republic Bank went into receivership and its deposits and substantially all of its assets were acquired by JPMorgan Chase Bank, National Association. Similarly, on March 10, 2023, Silicon Valley Bank went into receivership, and on March 12, 2023, Signature Bank went into receivership. On March 12, 2023, the Secretary of the Treasury invoked the systemic risk exception to allow the FDIC to complete its resolution of both Silicon Valley Bank and Signature Bank in a manner that fully protected depositors.

Inflation and rapid increases in interest rates led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. The FRB announced a program to provide loans to FDIC-insured depository institutions and certain U.S. branches and agencies of foreign banks secured by certain of such government securities to mitigate the risk of potential losses on the sale of such instruments. Currently new advances (with terms up to one year) under the program can only be made through March 11, 2024. There is no guarantee that the Secretary of the Treasury, FDIC and/or FRB, as applicable, will take such actions in the future in the event of the closure of other banks or financial institutions, that they would do so in a timely fashion or that such actions, if taken, would have their intended effect.

The soundness of other financial institutions could adversely affect us.

Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships. We have exposure to many different counterparties, and we routinely execute transactions with counterparties in the financial industry, including brokers and dealers, other commercial banks, investment banks, mutual and hedge funds, and other financial institutions. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, could lead to market-wide liquidity problems and losses or defaults by us or by other institutions and organizations. Many of these transactions expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be

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liquidated or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due to us. There is no assurance that any such losses would not materially and adversely affect our results of operations.

~~Loss of deposits or a change in deposit mix could increase our cost of funding.~~

Damage to our reputation could significantly harm our business, including our competitive position and business prospects.

We are dependent on our reputation within our market area, as a trusted and responsible financial services company, for all aspects of our ~~relationships~~business with customers, employees, vendors, third-party service providers, and others, with whom we conduct business or potential future ~~business. Our~~businesses. Negative public opinion about the financial services industry generally (including the types of banking and other services that we provide) or us specifically could adversely affect our reputation and our ability to ~~attract~~keep and ~~retain~~attract customers and ~~employees could be adversely affected if our reputation is damaged.~~employees. Our actual or perceived failure to address various issues could give rise to negative public opinion and reputational risk that could cause harm to us and our business prospects. These issues ~~also~~ include, but are not limited to, legal and regulatory requirements; properly maintaining customer and employee personal information; record keeping; money-laundering; sales and trading practices; ethical issues; appropriately addressing potential conflicts of interest; and the proper identification of the legal, reputational, credit, liquidity and market risks inherent in our products. Failure to appropriately address any of these issues could also give rise to additional regulatory restrictions and legal risks, which could, among other consequences, increase the size and number of litigation claims and damages asserted or subject us to enforcement actions, fines and penalties and cause us to incur related costs and expenses.

The proliferation of social media websites utilized by us and other third parties, as well as the personal use of social media by our employees and others, including personal blogs and social network profiles, also may increase the risk that negative, inappropriate or unauthorized information may be posted or released publicly that could harm our reputation or have other negative consequences, including as a result of our employees interacting with our customers in an unauthorized manner in various social media outlets. Any damage to our reputation could affect our ability to retain and develop the business relationships necessary to conduct business, which in turn could negatively impact our financial condition, results of operations, and the market price of our common stock.

We may be unable to attract and retain qualified key employees, which could adversely affect our business prospects, including our competitive position and results of operations.

Our success is dependent upon our ability to attract and retain highly skilled individuals. There is significant competition for those individuals with the experience and skills required to conduct many of our business activities. We may not be able to hire or retain the key personnel that we depend upon for success. The unexpected loss of services of one or more of these or other key personnel could have a material adverse impact on our business because of their skills, knowledge of the markets in which we operate, years of industry experience and the difficulty of promptly finding qualified replacement personnel. Frequently, we compete in the market for talent with entities that are not subject to comprehensive regulation, including with respect to the structure of incentive compensation. Our inability to attract new employees and retain and motivate our existing employees could adversely impact our business.

Our ability to service our debt and pay dividends is dependent on capital distributions from our subsidiary banks, and these distributions are subject to regulatory limits and other restrictions.

We are a legal entity that is separate and distinct from the Banks. Our revenue (on a parent company only basis) is derived primarily from dividends paid to us by the Banks. Our right, and consequently the right of our shareholders, to participate in any distribution of the assets or earnings of the Banks through the payment of such dividends or otherwise is necessarily subject to the prior claims of creditors of the Banks (including depositors), except to the extent that certain claims of ours in a creditor capacity may be recognized. It is possible, depending upon the financial condition of our subsidiary banks and other factors, that applicable regulatory authorities could assert that payment of dividends or other payments is an unsafe or unsound practice. If one or more of our subsidiary banks is unable to pay dividends to us, we may not be able to service our debt or pay dividends on our common stock. Further, ~~as a result of the capital conservation buffer requirement of the Final Capital Rule,~~ our ability to pay dividends on our common stock or service our debt could be restricted if we do not maintain a capital conservation ~~buffer.~~buffer of common equity Tier 1 capital. A reduction or elimination of dividends could adversely affect the market price of our common stock and would adversely affect our business, financial condition, results of operations and prospects. See Item 1, “Business-Supervision

and Regulation-Dividend Restrictions” and “Business-Supervision and Regulation-Capital Adequacy and Safety and Soundness-Regulatory Capital Requirements.”

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We face continuing and growing security risks to our information base, including the information we maintain relating to our customers.

In the ordinary course of business, we rely on electronic communications and information systems to conduct our business and to store sensitive data, including financial information regarding customers. Our electronic communications and information systems infrastructure, as well as the systems infrastructures of the vendors we use to meet our data processing and communication needs, could be susceptible to cyber-attacks, such as denial of service attacks, hacking, terrorist activities or identity theft. Financial services institutions and companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disable or degrade service or sabotage systems, often through the introduction of computer viruses or malware, cyber-attacks and other means. Denial of service attacks have been launched against a number of large financial services institutions. Hacking and identity theft risks, in particular, could cause serious reputational harm. Cyber threats are rapidly evolving and we may not be able to anticipate or prevent all such attacks. Although to date we have not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future. No matter how well designed or implemented our controls are, we will not be able to anticipate all security breaches of these types, and we may not be able to implement effective preventive measures against such security breaches in a timely manner. A failure or circumvention of our security systems could have a material adverse effect on our business operations and financial condition.

We regularly assess and test our security systems and disaster preparedness, including back-up systems, but the risks are substantially escalating. As a result, cyber-security and the continued enhancement of our controls and processes to protect our systems, data and networks from attacks, unauthorized access or significant damage remain a priority. Accordingly, we may be required to expend additional resources to enhance our protective measures or to investigate and remediate any information security vulnerabilities or exposures. Any breach of our system security could result in disruption of our operations, unauthorized access to confidential customer information, significant regulatory costs, litigation exposure and other possible damages, loss or liability. Such costs or losses could exceed the amount of available insurance coverage, if any, and would adversely affect our earnings. Also, any failure to prevent a security breach or to quickly and effectively deal with such a breach could negatively impact customer confidence, damaging our reputation and undermining our ability to attract and keep customers.

We may not be able to successfully implement future information technology system enhancements, which could adversely affect our business operations and profitability.

We invest significant resources in information technology system enhancements in order to provide functionality and security at an appropriate level. We may not be able to successfully implement and integrate future system enhancements, which could adversely impact the ability to provide timely and accurate financial information in compliance with legal and regulatory requirements, which could result in sanctions from regulatory authorities. Such sanctions could include fines and suspension of trading in our stock, among others. In addition, future system enhancements could have higher than expected costs and/or result in operating inefficiencies, which could increase the costs associated with the implementation as well as ongoing operations.

Failure to properly utilize system enhancements that are implemented in the future could result in impairment charges that adversely impact our financial condition and results of operations and could result in significant costs to remediate or replace the defective components. In addition, we may incur significant training, licensing, maintenance, consulting and amortization expenses during and after systems implementations, and any such costs may continue for an extended period of time.

We rely on other companies to provide key components of our business infrastructure.

Third party vendors provide key components of our business infrastructure such as internet connections, network access and core application processing. While we have selected these third party vendors carefully, we do not control them or their actions. Any problems caused by these third parties, including as a result of their not providing us their services for any reason or their performing their services poorly, could adversely affect our ability to deliver products and services to our customers or otherwise conduct our business efficiently and effectively. Replacing these third party vendors could also entail significant delay and expense.

We may incur significant losses as a result of ineffective risk management processes and strategies.

We seek to monitor and control our risk exposure through a risk and control framework encompassing a variety of separate but complementary financial, credit, operational, compliance, and legal reporting systems; internal controls; management review processes; and other mechanisms. While we employ a broad and diversified set of risk monitoring and risk mitigation techniques, those techniques and the judgments that accompany their application may not be effective and may not anticipate every economic and financial outcome in all market environments or the specifics and timing of such outcomes.

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Our internal controls, procedures and policies may fail or be circumvented.

Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well-designed and operated, is based in part on certain

assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of the controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations and financial condition.

~~If our risk management framework does not effectively identify or mitigate our risks, we could suffer losses.~~

Our risk management framework seeks to mitigate risk and appropriately balance risk and return. We have established processes and procedures intended to identify, measure, monitor and report the types of risk to which we are subject, including credit risk, operations risk, compliance risk, reputation risk, strategic risk, market risk, and liquidity risk. We seek to monitor and control our risk exposure through a framework of policies, procedures and reporting requirements. Management of our risks in some cases depends upon the use of analytical and/or forecasting models. If the models used to mitigate these risks are inadequate, we may incur losses. In addition, there may be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated. If our risk management framework does not effectively identify or mitigate our risks, we could suffer unexpected losses and could be materially adversely affected.

~~We may be unable to attract and retain qualified key employees, which could adversely affect our business prospects, including our competitive position and results of operations.~~

Natural disasters, acts of terrorism, pandemics and other external events could harm our business.

Natural disasters can disrupt our operations, result in damage to our properties, reduce or destroy the value of the collateral for our loans and negatively affect the economies in which we operate, which could have a material adverse effect on our results of operations and financial condition. A significant natural disaster, such as a tornado, hurricane, earthquake, fire or flood, could have a material adverse impact on our ability to conduct business, and our insurance coverage may be insufficient to compensate for losses that may occur. Acts of terrorism, war, civil unrest ~~violence~~ or ~~human error~~future pandemics could cause disruptions to our business or the economy as a whole. While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition.

Our financial statements are based in part on assumptions and estimates, which, if wrong, could cause unexpected losses in the future.

Pursuant to ~~accounting principles generally accepted in the~~ U.S., GAAP, we are required to use certain assumptions and estimates in preparing our financial statements, including in determining loan loss and litigation reserves, goodwill impairment and the fair value of certain assets and liabilities, among other items. If assumptions or estimates underlying our financial statements are incorrect, we may experience material losses. See the "Critical Accounting Policies" section in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

Changes in accounting standards can be difficult to predict and can materially impact how we record and report our financial condition and results of operations.

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. From time to time, the Financial Accounting Standards Board, or "FASB", changes the financial accounting and reporting principles that govern the preparation of our financial statements. These changes can be hard to anticipate and implement, and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements. Additionally, significant changes to accounting standards may require costly technology changes, additional training and personnel, and other expense that will negatively impact our results of operations.

~~A new accounting standard may require us to increase our allowance for loan losses and may have a material adverse effect on our financial condition and results of operations.~~

The Financial Accounting Standards Board has issued Accounting Standards Update 2016-13, which will be effective for the Company for the first quarter of the fiscal year ending December 31, 2020. This standard, often referred to as “CECL” (reflecting a current expected credit loss model), will require companies to recognize an allowance for credit losses based on estimates of losses expected to be realized over the contractual lives of the loans. Under current U.S. GAAP, companies generally recognize credit losses only when it is probable that a loss has been incurred as of the balance sheet date. This new standard will require us to collect and review increased types and amounts of data for us to determine the appropriate

level of the allowance for loan losses, and may require us to increase our allowance for loan losses. Any increase in our allowance for loan losses or expenses incurred to determine the appropriate level of the allowance for loan losses may have a material adverse effect on our financial condition and results of operations. We are currently evaluating the impact of adopting this standard on our consolidated financial statements.

Changes in tax laws and regulations and differences in interpretation of tax laws and regulations may adversely impact our financial statements.

From time to time, local, state or federal tax authorities change tax laws and regulations, which may result in a decrease or increase to our net deferred tax assets. ~~In December 2017, we recognized a write-down of $8.6 million in net deferred tax assets in connection with the adoption of the H.R. 1, the Tax Cuts and Jobs Act.~~ Local, state or federal tax authorities may interpret tax laws and regulations differently than we do and challenge tax positions that we have taken on tax returns. This may result in differences in the treatment of revenues, deductions, credits and/or differences in the timing of these items. The differences in treatment may result in payment of additional taxes, interest or penalties that could have a material adverse effect on our results.

Future capital offerings may adversely affect the market price of our common stock.

In the future, we may attempt to increase our capital resources or, if our banking subsidiaries' capital ratios fall below required minimums, we could be forced to raise additional capital by making additional offerings of debt, common or preferred stock, trust preferred securities, and senior or subordinated notes. Upon liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Moreover, we cannot assure you that such capital will be available to us on acceptable terms or at all. Our inability to raise sufficient additional capital on acceptable terms when needed could adversely affect our businesses, financial condition and results of operations.

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The market price and trading volume of our common stock may be volatile.

The market price of our common stock may be volatile. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:

•quarterly variations in our operating results or the quality of our assets;

•operating results that vary from the expectations of management, securities analysts and investors;

•changes in expectations as to our future financial performance;

•announcements of innovations, new products, strategic developments, significant contracts, acquisitions and other material events by us or our competitors;

•the operating and securities price performance of other companies that investors believe are comparable to us;

•our past and future dividend practices;

•future sales of our equity or equity-related securities; and

•changes in global financial markets and global economies and general market conditions, such as interest rates, stock, commodity or real estate valuations or volatility.

Anti-takeover provisions could negatively impact our stockholders.

Provisions of Delaware law and provisions of our certificate of incorporation and by-laws could make it more difficult for a third party to acquire control of us or have the effect of discouraging a third party from attempting to acquire control of us, even if a merge might be in the best interest of our stockholders.

~~There is no assurance when or even if the merger with First Commons Bank will~~ Our articles of organization authorize our Board of Directors to issue preferred stock without stockholder approval and such preferred stock could be ~~completed.~~

~~We have entered into the Merger Agreement pursuant to which First Commons Bank will merge with and into Brookline Bank with Brookline Bank~~issued as ~~the surviving bank (the “Merger”). The Merger Agreement is subject~~a defensive measure in response to a ~~number of conditions which must be fulfilled in order~~takeover proposal. These and other provisions could make it more difficult for a third party to ~~complete the Merger. Those conditions include:~~acquire us.

~~the receipt of required regulatory approvals;~~

~~absence of orders prohibiting the completion of the merger; and~~

~~the continued accuracy of the representations and warranties by both parties and the performance by both parties of their covenants and agreements.~~

There can be no assurance that the parties will be able to satisfy the closing conditions or that closing conditions beyond their control will be satisfied or waived. In addition, as in any transaction, it is possible that, among other things, restrictions on the combined operations of the two companies may be sought by governmental agencies as a condition to obtaining the required regulatory approvals. This may diminish the benefits of the merger to us or have an adverse effect on us following the merger and prevent us from achieving the expected benefits of the merger.

In addition, the parties to the Merger Agreement can agree at any time to terminate the Merger Agreement even after First Commons Bank’s stockholders have provided their approval. The parties can also terminate the Merger Agreement under other specified circumstances. First Commons Bank may choose to terminate the merger agreement if the 10-day volume weighted average stock price of our common stock as reported on NASDAQ during the ten trading day period ending on the fifth trading day immediately preceding the closing date is less than $11.40 per share and our common stock underperforms the NASDAQ Bank Index by more than 20%. Any such termination would be subject to our right to increase the amount of our common stock and, if applicable, cash to be provided to First Commons Bank stockholders pursuant to the formula prescribed in the Merger Agreement.

~~We may be unable to successfully integrate First Commons Bank’s operations.~~

~~The merger with First Commons Bank involves the integration of two companies that previously operated independently. The difficulties of combining the companies’ operations include:~~

~~integrating personnel with diverse business backgrounds;~~

~~integrating departments, systems, operating procedures and information technologies;~~

~~combining different corporate cultures;~~

~~retaining existing customers and attracting new customers; and~~

~~retaining key employees.~~

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of the combined company’s businesses and the loss of key personnel. The diversion of management’s attention and any delays or difficulties encountered in connection with the merger and the integration of the two companies’ operations could have a material adverse effect on the business and results of operations of the combined company.

~~The success of the merger will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining our business with the business of First Commons Bank.~~ If we ~~are unable~~acquire or seek to successfully integrate First Commons Bank, the anticipated benefits and cost savings of the Merger may not be realized fully or may take longer to realize than expected. For example, we may fail to realize the anticipated increase in earnings and cost savings anticipated to be derived from the acquisition. In addition, as with regard to any Merger, a significant change in interest rates or economic conditions or decline in asset valuations may also cause us not to realize expected benefits and result in the merger not being as accretive as expected.

~~Unanticipated costs relating to the merger could reduce our future earnings per share.~~

We believe that we have reasonably estimated the likely costs of integrating our operations with the operations of First Commons Bank, and the incremental costs of operating as a combined company. However, it is possible that we could incur unexpected transaction costs such as taxes, fees or professional expenses or unexpected future operating expenses such as increased personnel costs or increased taxes, which could result in the merger not being as accretive as expected or having a dilutive effect on the combined company’s earnings per share.

~~To the extent that we~~ acquire other companies, our business may be negatively impacted by certain risks inherent with such acquisitions.

We have acquired and will continue to consider the acquisition of other financial services companies. To the extent that we acquire other companies in the future, our business may be negatively impacted by certain risks inherent with such acquisitions. Some of these risks include the following:

•We may incur substantial expenses in pursuing potential acquisitions;

•Management may divert its attention from other aspects of our business;

•We may assume potential and unknown liabilities of the acquired company as a result of an acquisition;

•The ~~risk that the~~ acquired business will not perform in accordance with management's ~~expectations;~~expectations, including because we may lose key clients or employees of the acquired business as a result of the change in ownership;

~~The risk that difficulties will~~•Difficulties may arise in connection with the integration of the operations of the acquired business with the operations of our businesses; and

~~The risk that management will divert its attention from other aspects of our business;~~

~~The risk that we~~•We may lose key employees of the combined ~~business; and~~

~~The risks associated with entering into geographic and product markets in which we have limited or no direct prior experience.~~business.

We may be required to write down goodwill and other acquisition-related identifiable intangible assets.

When we acquire a business, ~~such as First Commons Bank,~~ a portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable intangible assets. The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired determines the amount of the purchase price that is allocated to goodwill acquired. As of December 31, ~~2017,~~2023, goodwill and other identifiable intangible assets were ~~$143.9~~$265.4 million. ~~We expect to record approximately $20.0 million in additional goodwill in connection with the acquisition of First Commons Bank.~~ Under current accounting guidance, if we determine that goodwill or intangible assets are impaired, we would be required to write down the value of these assets. We conduct an annual review to determine whether goodwill and other identifiable intangible assets are impaired. We conduct a quarterly review for indicators of impairment of goodwill and other identifiable intangible assets. Our management recently completed these reviews and concluded that no impairment charge was necessary for the year ended December 31, ~~2017.~~2023. We cannot provide assurance whether we will be required to take an impairment charge in the future. Any impairment charge would have a negative effect on stockholders' equity and financial results and may cause a decline in our stock price.

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Attractive acquisition opportunities may not be available to us in the future, which could limit the growth of our business.

We may not be able to sustain a positive rate of growth or expand our business. We expect that other banking and financial service companies, many of which have significantly greater resources than us, will compete with us in acquiring other financial institutions if we pursue such acquisitions. This competition could increase prices for potential acquisitions that we believe are attractive. Also, acquisitions are subject to various regulatory approvals. If we fail to receive the appropriate regulatory approvals for a transaction, we will not be able to consummate such transaction which we believe to be in our best interests. Among other things, our regulators consider our capital, liquidity, profitability, regulatory compliance and levels of goodwill and intangibles when considering acquisition and expansion proposals. Other factors, such as economic conditions and legislative considerations, may also impede or prohibit our ability to expand our market presence. If we are not able to successfully grow our business, our financial condition and results of operations could be adversely affected.

RISKS RELATED TO OUR REGULATORY ENVIRONMENT

We operate in a highly regulated industry, and laws and regulations, or changes in them, could limit or restrict our activities and could have a material adverse effect on our operations.

We and our banking subsidiaries are subject to extensive state and federal regulation and supervision. Federal and state laws and regulations govern numerous matters affecting us, including changes in the ownership or control of banks and bank holding companies, maintenance of adequate capital and the financial condition of a financial institution, permissible types, amounts and terms of extensions of credit and investments, permissible non-banking activities, the level of reserves against deposits and restrictions on dividend payments. The FRB and the state banking regulators have the power to issue cease and desist orders to prevent or remedy unsafe or unsound practices or violations of law by banks subject to their regulation, and the FRB possesses similar powers with respect to bank holding companies. These and other restrictions limit the manner in which we and our banking subsidiaries may conduct business and obtain financing.

The laws, rules, regulations, and supervisory guidance and policies applicable to us are subject to regular modification and change. Such changes could, among other things, subject us to additional costs, including costs of compliance; limit the types of financial services and products we may offer; and/or increase the ability of non-banks to offer competing financial services and products. Failure to comply with laws, regulations, policies, or supervisory guidance could result in enforcement and other legal actions by federal or state authorities, including criminal and civil penalties, the loss of FDIC insurance, revocation of a banking charter, other sanctions by regulatory agencies, civil money penalties, and/or reputational damage, which could have a material adverse effect on our business, financial condition, and results of operations. See the "Supervision and Regulation" section of Item 1, "Business."

The CRA, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations impose community investment and nondiscriminatory lending requirements on financial institutions. The CFPB, the Department of Justice and other federal agencies are responsible for enforcing these laws and regulations. A successful regulatory challenge to an institution’s performance under the CRA, the Equal Credit Opportunity Act, the Fair Housing Act or other fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions, restrictions on expansion and restrictions on entering new business lines. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results of operations.

We may become subject to enforcements actions even though noncompliance was inadvertent or unintentional.

The financial services industry is subject to intense scrutiny from bank supervisors in the examination process and aggressive enforcement of federal and state regulations, particularly with respect to mortgage-related practices and other consumer compliance matters, and compliance with anti-money laundering, BSA and OFAC regulations, and economic sanctions against certain foreign countries and nationals. Enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices. We maintain systems and procedures designed to ensure that we comply with applicable laws and regulations; however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there was in place at the time systems and procedures designed to ensure compliance. Failure to comply with these and other regulations, and supervisory expectations related thereto, may result in fines, penalties, lawsuits, regulatory sanctions, reputation damage, or restrictions on our business.

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We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us.

As a participant in the financial services industry, many aspects of our business involve substantial risk of legal liability. From time to time, customers and others make claims and take legal action pertaining to the performance of our responsibilities. Whether customer claims and legal action related to the performance of our responsibilities are founded or unfounded, if such claims and legal actions are not resolved in a manner favorable to us, they may result in significant expenses, attention from management and financial liability. Any financial liability or reputational damage could have a material adverse effect on our business, which, in turn, could have a material adverse effect on our financial condition and results of operations. There is no assurance that litigation with private parties will not increase in the future. Actions currently pending against us may result in judgments, settlements, fines, penalties or other results adverse to us, which could materially adversely affect our business, financial condition or results of operations, or cause serious reputational harm to us.

The FRB may require us to commit capital resources to support the Banks.

Federal law requires that a holding company act as a source of financial and managerial strength to its subsidiary bank and to commit resources to support such subsidiary bank. Under the “source of strength” doctrine, the FRB may require a holding company to make capital injections into a troubled subsidiary bank and may charge the holding company with engaging in unsafe and unsound practices for failure to commit resources to a subsidiary bank. A capital injection may be required at times when the holding company may not have the resources to provide it and therefore may require the holding company to borrow the funds or raise capital. Any loans by a holding company to its subsidiary bank are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary bank. In the event of a holding company’s bankruptcy, the bankruptcy trustee will assume any commitment by the holding company to a federal bank regulatory agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of payment over the claims of the institution’s general unsecured creditors, including the holders of its note obligations. Thus, any borrowing that must be done by us to make a required capital injection becomes more difficult and expensive and could have an adverse effect on our business, financial condition and results of operations.

We are subject to stringent capital requirements which may adversely impact return on equity, require additional capital raises, or limit the ability to pay dividends or repurchase shares.

Federal regulations establish minimum capital requirements for insured depository institutions, including minimum risk-based capital and leverage ratios, and define “capital” for calculating these ratios. The minimum capital requirements are: (i) a common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 to risk-based assets capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%. The regulations also establish a “capital conservation buffer” of 2.5%, which if complied will result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) a Tier 1 to risk-based assets capital ratio of 8.5%; and (iii) a total capital ratio of 10.5%. An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying discretionary bonuses if its capital level falls below the capital conservation buffer amount. The application of these capital requirements could, among other things, require us to maintain higher capital resulting in lower returns on equity, and we may be required to obtain additional capital to comply or result in regulatory actions if we are unable to comply with such requirements. See Item 1, “Business-Supervision and Regulation-Capital Adequacy and Safety and Soundness-Regulatory Capital Requirements.”

Item 1B. Unresolved Staff Comments

None.

Item 1C. Cybersecurity

As a financial services company, we face cybersecurity risks and threats, and our customers, suppliers, and third-party service providers face cybersecurity risks and threats. As part of the operation of our business, the Company uses, stores, and processes data for our customers, employees, partners, and suppliers. A cybersecurity incident impacting any of these entities could materially adversely affect our operations, performance, or results of operations. In addition, as a financial services company we are subject to extensive regulatory compliance requirements, including those established by the FRB, MDOB, RIDBR, and NYDFS. To address these risks and regulatory requirements, the Company implemented a Cybersecurity Risk Management Program (the “Program”) that is designed to identify, assess and mitigate risks from cybersecurity threats to the data and our systems. The Program adheres to regulatory requirements and the tenets of the Federal Financial Institutions Examination Council (“FFIEC”) handbook and the National Institute of Standards and Technology (“NIST”) Cybersecurity Framework (“CSF”).

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Risk Management Oversight and Governance

Our Chief Information Security Officer (“CISO”), assisted by our Information Security team, has primary responsibility for assessing and managing the Program and reporting on cybersecurity matters to the Company’s Board of Directors and members of executive management. Our CISO has extensive experience managing information technology systems and information security systems, previously served as the Company’s Chief Information Officer, and holds the Certified Information Systems Security Professional (“CISSP”) and Certified Information Security Manager (“CISM”) certifications. Our CISO regularly updates members of executive management on developments surrounding cybersecurity. The CISO reports to the Risk Committee of the Board of Directors and provides regular reports to the Board of Directors and Risk Committee on emerging cybersecurity issues and the Company’s cybersecurity infrastructure.

Our Program is overseen by the Company’s Board of Directors, which has delegated certain responsibilities to the Audit Committee and the Risk Committee. The Chairs of the Audit Committee and Risk Committee, in turn, report to the Board of Directors a summary of the presentations they have received relative to the Program. The Board of Directors oversees management’s processes for identifying and mitigating risks, including cyber risks, to assist in the alignment of our risk exposure with our overall strategic business objectives. The Board of Directors has also engaged an experienced information security advisor to assist them with cybersecurity and data privacy oversight responsibilities. This advisor provides the Board of Directors with independent updates on external market cybersecurity threats and emerging risks on a regular basis.

The Risk Committee, Audit Committee, and the Board of Directors are active in understanding and evaluating cybersecurity risks. The Risk Committee receives and reviews a quarterly Enterprise Risk Management (“ERM”) report from the Chief Risk Officer that is the cumulation of a process that involves discussions with leaders across the Company and incorporates a number of enterprise risk factors, including those related to cybersecurity threats. The Audit Committee receives the results of internal and external penetration testing as well as any other audits applicable to the Company’s information security programs. The Audit Committee actively engages management in discussions surrounding the outcome of these audits.

At least annually, the Board of Directors receives a report from the CISO covering the Company’s information security program. This report includes a review of enhancements to the Company’s programs, a discussion of management’s actions to identify and detect threats and planned action steps in the event of an incident, and an overview of employee training and engagement efforts. In addition, separately, on at least an annual basis, the Board of Directors receives updates from the CISO on the Company’s Incident Response Plan, which outlines steps to be followed in the event of an incident including detection, mitigation, recovery, and notification (including notification to senior management, the Board of Directors, and functional business areas), and remediation.

Cybersecurity Risk Management Program

The Program is designed to identify, assess, manage, mitigate, and respond to cyber threats with the goal of preventing cybersecurity incidents to the extent feasible, while also increasing our system resilience to minimize business disruption in the event we experience a cyber event. Our program is structured to be nimble and adaptable to changes in cybersecurity threats over time and to respond to emerging threats in a timely and efficient manner. Our Program consists of a layered cybersecurity approach and is incorporated into our overall ERM program.

Our Information Security team, led by our CISO, is responsible for monitoring our information systems for vulnerabilities and mitigating any issues. The Information Security team works collaboratively across the Company to understand the potential impacts of a cybersecurity incident and prioritize mitigation and other measures based on, among other things, the materiality to our business. The Information Security team has established processes designed to monitor threats in the cybersecurity landscape which include interacting with intelligence networks, working with researchers, discussions with peers at other companies, monitoring social media, reviewing government alerts and other news items and attending industry specific security conferences and trainings. The team regularly monitors our internal network and customer-facing network to identify any security issues. In addition, the Company augments the team’s monitoring via the engagement of external vendors who provide continuous threat monitoring services of the Company’s environment.

As part of our assessment of the risks to our Company, the Information Security team conducts annual cybersecurity risk assessments to evaluate the inherent risk of our applications and the strength of our controls, and identify the residual risk for each application. In addition, we conduct regular reviews and testing of critical network and application systems to monitor their security. We have adopted internal Company-wide Information Technology and Information Security policies which are reviewed and updated annually and approved by our Board of Directors. Our employees and the Board of Directors attend annual trainings that are designed to raise awareness about cybersecurity threats, reduce our vulnerability, and encourage consideration of cybersecurity threats across the Company. Additional trainings are required for employees in certain roles; these additional trainings are tailored to the employees’ specific duties.

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We regularly review and update our investments in information technology security to identify and protect critical assets, provide monitoring and alerts, and, as needed, engage third-party experts. To assess the effectiveness of our Program, we have engaged consultants to conduct penetration testing and other vulnerability assessments. Additionally, our Internal Audit department and external auditors conduct assessments of different systems to provide the Audit Committee with information on our risk management processes, including cybersecurity risk management. We also test our defenses internally and conduct regular cybersecurity simulations and tabletop exercises with members of executive management present. These tests and assessments provide useful insights into the strengths and weaknesses of our cybersecurity framework.

Our cybersecurity framework is designed to protect our customers, employees, investors, and our intellectual property. Before purchasing third-party technology or other solutions that could expose the Company’s assets and electronic information, our Information Security and Information Technology teams complete security reviews on the vendors. We also conduct ongoing reviews of cybersecurity risks associated with our third-party service providers. As part of the Company’s Vendor Management Program, annual reviews are conducted for certain third-party vendors. Members of our Information Security team work with our Vendor Management team to review System and Organization Controls (“SOC”) 1 or SOC 2 reports. In the event a third-party vendor is unable to provide either a SOC 1 or SOC 2 report, this group conducts additional reviews to assess the cybersecurity preparedness of the specific vendor. This assessment of the risks associated with the use of third-party service providers is part of our overall vendor management and cybersecurity risk management framework.

Our Company faces a number of cybersecurity risks in connection with the operation of our business which could have a material adverse effect on our business financial condition, results of operations, cash flows, or reputation. Although, to date, such risks have not materially affected us, we have, from time to time, experienced threats and breaches to our data and systems. For more information about the cybersecurity risks we face, see the risk factors entitled “We face continuing and growing security risks to our information base, including the information we maintain relating to our customers.” and “We rely on other companies to provide key components of our business infrastructure.” in Item 1A- Risk Factors.

Item 2. Properties

The Company’s executive administration offices are located at 131 Clarendon Street, Boston, Massachusetts, which is owned by Brookline Bank, as well as its corporate operations center in Lincoln, Rhode Island, which is owned by BankRI, with other administrative and operations functions performed at several different locations. Clarendon Private conducts its business from a portion of the Company's executive administration offices which it leases.

Brookline Bank conducts its business from 2529 banking offices, 5six of which are owned, ~~and 20~~22 of which are ~~leased.~~leased, and one of which is subleased. Brookline Bank's main banking office is leased and located in Brookline, Massachusetts. Brookline Bank also has 2two additional lending offices and one remote ATM ~~locations, both~~location, all of which are leased. Eastern Funding conducts its business from leased premises in New York City, New York, in Melville, New York, and in ~~Melville,~~Plainview, New York.

BankRI conducts its business from 2022 banking offices, 6six of which are owned and 1416 of which are leased. BankRI's main banking office is leased and located in Providence, Rhode Island. BankRI also has 2two remote ATM locations, all of which are leased. ~~Macrolease~~

PCSB Bank conducts its business from ~~leased premises in Plainview, New York.~~

~~First Ipswich conducts its business from 6~~14 banking offices, ~~1 of which is owned, 4~~four of which are ~~leased~~owned and 110 of which ~~is subleased. First Ipswich's~~are leased. PCSB bank's main banking office is ~~owned~~leased and located in ~~Ipswich, Massachusetts. First Ipswich also has 2 remote ATM locations, both of which are leased.~~Yorktown Heights, New York.

Refer to Note 13, "Commitments and Contingencies," to the consolidated financial statements for information regarding the Company's lease commitments as of December 31, ~~2017.~~2023.

Item 3. Legal Proceedings

During the fiscal year ended December 31, ~~2017,~~2023, the Company was not involved in any legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Management believes that those routine legal proceedings involve, in the aggregate, amounts that are immaterial to the Company's financial condition and results of operations.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities


~~(a)~~	The common stock of the Company is traded on NASDAQ under the symbol BRKL. The approximate number of registered holders of common stock as of February 28, 2018 was 1,828. Market prices for the Company's common stock and dividends paid per quarter during 2017 and 2016 follow.

Market Prices
Dividend Paid
Per Share
High Low
2017
First Quarter $ 16.75
$ 14.50
$ 0.09
Second Quarter 15.95
13.75
0.09
Third Quarter 15.50
13.75
0.09
Fourth Quarter 16.35
14.50
0.09
2016
First Quarter $ 11.21
$ 10.23
$ 0.09
Second Quarter 11.69
10.44
0.09
Third Quarter 12.19
10.71
0.09
Fourth Quarter 16.60
12.05
0.09

(a)The common stock of the Company is traded on Nasdaq under the symbol BRKL. The number of registered holders of common stock as of February 27, 2024 was 2,693. The Company currently pays quarterly cash dividends in the amount of $0.135 per share. The Company expects comparable cash dividends will be paid in the future.

Equity Compensation Plan Information

Refer to Note 20, "Employee Benefit Plans" for a discussion of the Company's equity compensation plans.

Five-Year Performance Comparison

The following graph compares total shareholder return on the Company's common stock over the last five years with the ~~the~~ S&P 500 Index, the Russell 2000 Index and the ~~SNL Index of Banks with assets between $5 billion and $10 billion.~~KBW Regional Banking Index. Index values are as of December 31 of each of the indicated years.


	At December 31,
Index	2018	2019	2020	2021	2022	2023
Brookline Bancorp, Inc.	100.00	122.59	93.59	129.84	117.57	95.86
Russell 2000 Index	100.00	125.52	150.55	172.80	137.36	160.62
KBW Regional Banking Index	100.00	123.87	113.11	154.43	143.71	143.14
S&P 500 Index	100.00	131.49	155.67	200.31	163.91	207.08

At December 31,
Index 2012 2013 2014 2015 2016 2017
Brookline Bancorp, Inc. 100.00
116.65
127.15
150.69
221.86
217.62
Russell 2000 100.00
138.82
145.62
139.19
168.85
193.58
SNL Bank $5B-$10B 100.00
154.28
158.92
181.04
259.37
258.40
S&P 500 100.00
132.39
150.51
152.59
170.84
208.14

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The graph assumes $100 invested on December 31, ~~2012~~2018 in each of the Company's common stock, the S&P 500 Index, the Russell 2000 Index and the ~~SNL Index of Banks with assets between $5 billion and $10 billion.~~KBW Regional Banking Index. The graph also assumes reinvestment of all dividends.

(b)Not applicable.

~~(b)~~

~~Not applicable.~~

~~(c)~~

There were no purchases made during the year ended December 31, 2017 by or on behalf of the Company of the Company's common stock. As of January 31, 2017, the Company had no authorizations to repurchase outstanding shares.

Item 6. ~~Selected Financial Data~~[Reserved]

The selected financial and other data of the Company set forth below are derived in part from, and should be read in conjunction with, the Consolidated Financial Statements of the Company and Notes thereto presented elsewhere herein.

At or for the year ended December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands, Except Per Share Data)
FINANCIAL CONDITION DATA
Total assets (*) $ 6,780,249
$ 6,438,129
$ 6,042,338
$ 5,800,948
$ 5,325,651
Total loans and leases 5,730,679
5,398,864
4,995,540
4,822,607
4,362,465
Allowance for loan and lease losses 58,592
53,666
56,739
53,659
48,473
Investment securities held-to-maturity 109,730
87,120
93,757
500
500
Investment securities available-for-sale 540,124
523,634
513,201
550,761
492,428
Goodwill and identified intangible assets 143,934
146,023
148,523
151,434
154,777
Total deposits 4,871,343
4,611,076
4,306,018
3,958,106
3,835,006
Core deposits ⁽¹⁾
3,663,873
3,570,054
3,218,146
3,011,398
2,900,338
Certificates of deposit 1,207,470
1,041,022
1,087,872
946,708
934,668
Total borrowed funds 1,020,819
1,044,086
983,029
1,126,404
812,555
Stockholders' equity (*) 803,830
695,544
667,485
641,818
614,412
Tangible stockholders' equity (*)(**) 659,896
549,521
518,962
490,384
459,635
Nonperforming loans and leases ⁽²⁾
27,272
40,077
19,333
13,714
16,501
Nonperforming assets ⁽³⁾
31,691
41,476
20,676
15,170
18,079
EARNINGS DATA
Interest and dividend income $ 263,050
$ 239,648
$ 226,910
$ 218,482
$ 206,384
Interest expense 39,869
35,984
32,545
29,414
30,166
Net interest income 223,181
203,664
194,365
189,068
176,218
Provision for credit losses 18,988
10,353
7,451
8,477
10,929
Non-interest income (*) 32,173
22,667
20,184
20,180
15,619
Non-interest expense (*) 139,111
130,362
125,377
129,160
122,442
Provision for income taxes (*) 43,636
30,392
29,353
26,286
20,664
Net income (*) 50,518
52,362
49,782
43,288
36,015
Operating earnings (**) 59,747
52,362
49,782
43,288
36,610
PER COMMON SHARE DATA
Earnings per share - Basic (*) $ 0.68
$ 0.74
$ 0.71
$ 0.62
$ 0.52
Earnings per share - Diluted (*) 0.68
0.74
0.71
0.62
0.52
Operating earnings per share (*)(**) 0.80
0.74
0.71
0.62
0.53
Dividends paid per common share 0.36
0.36
0.355
0.34
0.34
Book value per share (end of period) (*) 10.49
9.88
9.51
9.16
8.79
Tangible book value per share (*)(**) 8.61
7.81
7.39
7.00
6.58
Stock price (end of period) 15.70
16.40
11.50
10.03
9.55
PERFORMANCE RATIOS
Net interest margin 3.57 % 3.44 % 3.54 % 3.61 % 3.64 %
Return on average assets (*) 0.76 % 0.83 % 0.85 % 0.78 % 0.70 %
Operating return on average assets (*)(**) 0.90 % 0.83 % 0.85 % 0.78 % 0.71 %
Return on average tangible assets (*)(**) 0.78 % 0.85 % 0.87 % 0.80 % 0.72 %
Operating return on average tangible assets (*)(**) 0.92 % 0.85 % 0.87 % 0.80 % 0.73 %
Return on average stockholders' equity (*) 6.53 % 7.59 % 7.57 % 6.86 % 5.84 %

At or for the year ended December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands, Except Per Share Data)
Operating return on average stockholders' equity (*)(**) 7.73 % 7.59 % 7.57 % 6.86 % 5.94 %
Return on average tangible stockholders' equity (*)(**) 8.04 % 9.66 % 9.80 % 9.06 % 7.84 %
Operating return on average tangible stockholders' equity (*)(**) 9.51 % 9.66 % 9.80 % 9.06 % 7.97 %
Dividend payout ratio (*)(**) 53.52 % 48.44 % 50.15 % 55.16 % 66.20 %
Efficiency ratio (*) ⁽⁴⁾
54.48 % 57.60 % 58.44 % 61.73 % 63.83 %
GROWTH RATIOS
Total loan and lease growth ⁽⁵⁾
6.15 % 8.07 % 3.59 % 10.55 % 4.47 %
Total deposit growth ⁽⁵⁾
5.64 % 7.08 % 8.79 % 3.21 % 6.05 %
ASSET QUALITY RATIOS
Net loan and lease charge-offs as a percentage of average loans and leases 0.25 % 0.25 % 0.09 % 0.07 % 0.08 %
Nonperforming loans and leases as a percentage of total loans and leases 0.48 % 0.74 % 0.39 % 0.28 % 0.38 %
Nonperforming assets as a percentage of total assets (*) 0.47 % 0.64 % 0.34 % 0.26 % 0.34 %
Total allowance for loan and lease losses as a percentage of total loans and leases 1.02 % 0.99 % 1.14 % 1.11 % 1.11 %
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (**) 1.05 % 1.03 % 1.20 % 1.20 % 1.32 %
CAPITAL RATIOS
Stockholders' equity to total assets (*) 11.86 % 10.80 % 11.05 % 11.06 % 11.54 %
Tangible equity ratio (*)(**) 9.94 % 8.73 % 8.81 % 8.68 % 8.89 %
Tier 1 leverage capital ratio 10.43 % 9.16 % 9.37 % 9.01 % 9.36 %
Common equity Tier 1 capital ratio (***) 12.02 % 10.48 % 10.62 % N/A
N/A
Tier 1 risk-based capital ratio 12.34 % 10.79 % 10.91 % 10.55 % 11.01 %
Total risk-based capital ratio 14.75 % 13.20 % 13.54 % 13.24 % 12.15 %

~~(1) Core deposits consist of demand checking, NOW, money market and savings accounts.~~

~~(2) Nonperforming loans and leases consist of nonaccrual loans and leases.~~

~~(3) Nonperforming assets consist of nonperforming loans and leases, other real estate owned and other repossessed assets.~~

~~(4) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest income for the period.~~

~~(5) Total growth is calculated by dividing the change in the balance during the period by the balance at the beginning of the period.~~

(*) Previously reported amounts prior to January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01. Refer to Note 10, "Other Assets".

~~(**) Refer to Non-GAAP Financial Measures and Reconciliation to GAAP.~~

(***) Common equity tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets. The ratio was established as part of the implementation of Basel III, effective January 1, 2015.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The Company, a Delaware corporation, operates as a multi-bank holding company for Brookline Bank and its subsidiaries; ~~BankRI~~Bank Rhode Island and its ~~subsidiaries; First Ipswich~~subsidiaries ("BankRI"); PCSB Bank and its subsidiaries; and Clarendon Private, LLC. Brookline Securities ~~Corp.~~Corp, previously a subsidiary of Brookline Bancorp, Inc., was dissolved in November 2023.

As a commercially-focused financial institution with 5165 full-service banking offices throughout ~~greater~~Greater Boston, ~~the north shore of Massachusetts~~Rhode Island and ~~Rhode Island,~~New York, the Company, through Brookline Bank, BankRI and PCSB Bank (collectively referred to as the ~~Banks,~~"Banks') offers a wide range of commercial, business and retail banking services, including a full complement of cash management products, foreign exchange services, on-line and mobile banking services, consumer and residential loans and investment advisory services, designed to meet the financial needs of small- to mid-sized businesses and individuals throughout central New ~~England. Specialty lending activities include~~England and the Lower Hudson Valley in New York. The Banks and their subsidiaries lend primarily in all New England states and New York, with the exception of equipment financing, ~~primarily~~29% of which is in the greater New York and New Jersey metropolitan ~~area.~~area and 71% of which is in other areas in the United States of America as of December 31, 2023. Clarendon Private is a registered investment advisor with the SEC. Through Clarendon Private, the Company offers a wide range of wealth management services to individuals, families, endowments and foundations to help these clients meet their long-term financial goals.

The Company focuses its business efforts on profitably growing its commercial lending businesses, both organically and through acquisitions. The Company’s customer focus, multi-bank structure, and risk management are integral to its organic growth strategy and serve to differentiate the Company from its competitors. As full-service financial institutions, the Banks and their subsidiaries focus their efforts on ~~the continued acquisition of well-qualified customers, the~~developing and deepening of long-term banking relationships with qualified customers through a full complement of products and excellent customer service, and strong risk management.

The Company manages the Banks under uniform strategic objectives, with one set of uniform policies consistently applied by one executive management team. Within this environment, the Company believes that the ability to make customer decisions locally enhances management's motivation, service levels and, as a consequence, the Company's financial results. As such, while most back-office functions are consolidated at the holding company level, branding and decision-making, including credit decisions and pricing, remain largely local in order to better meet the needs of bank customers and further motivate the Banks’ commercial, business and retail bankers. These credit decisions, at the local level, are executed through corporate policies overseen by the Company's credit department.

The competition for loans and leases and deposits remains intense. While the economy improved in 2017, the Company expects the operating environment in 2018 to remain challenging. The volume of loan and lease originations and loan and lease losses will depend, to a large extent, on how the economy performs.strong. Loan ~~and lease growth~~ and deposit growth are also ~~greatly~~ influenced by the rate-setting actions of the ~~FRB. A sustained, low interest~~Board of Governors of the Federal Reserve System (the "FRB"). Based on management's scenario analysis of deposit sensitivity to the current rate environment ~~with a flat~~and customer's demand for non-depository investment alternatives, management expects that there will be further deposit mix migration and increased deposit sensitivity to interest ~~rate curve may~~rates which will negatively impact ~~on the Company's yields~~net interest income and net interest margin. ~~While~~

Management expects pressure on the ~~company~~net interest margin to continue for a quarter or two after the Federal Reserve stops increasing rates, after which the net interest margin is ~~slightly asset sensitive~~expected to stabilize and ~~should benefit from rising~~then increase as loans continue to reprice into the higher rate environment faster than time deposits and other funding sources. Net interest income models, using a projected flat balance sheet with stable deposit balances and an average sensitivity of deposit rates ~~these rate increases~~of approximately 39% to market rates, forecast that a short-term increase in rates will positively affect the Company's net interest income, net interest spread, and net interest margin.

As discussed above, changes in interest rates could also precipitate a change in the mix and volume of the Company's deposits and loans. The future operating results of the Company will depend on its ability to maintain or increase the current net interest ~~margin, while minimizing exposure to~~income, manage credit risk, ~~along with increasing~~increase sources of non-interest income, while ~~controlling the growth of~~managing non-interest ~~or operating~~ expenses.

The Company and the Banks are supervised, examined and regulated by the FRB. As a Massachusetts-chartered savings bank and trust company, respectively, Brookline Bank and First Ipswich are also subject to regulation under the laws of the Commonwealth of Massachusetts and the jurisdiction of the Massachusetts Division of Banks. As a Rhode Island-chartered financial institution, BankRI is also subject to regulation under the laws of the State of Rhode Island and the jurisdiction of the Banking Division of the Rhode Island Department of Business Regulation. The FDIC continues to insure each of the Banks’ deposits up to $250,000 per depositor. Additionally, as a Massachusetts-chartered savings bank, Brookline Bank is also insured by the Depositors Insurance Fund (“DIF”), a private industry-sponsored company. The DIF insures savings bank deposits in excess of the FDIC insurance limits. As such, Brookline Bank offers 100% insurance on all deposits as a result of a combination of insurance from the FDIC and the DIF.

The Company’s common stock is traded on the Nasdaq Global Select Market^SM under the symbol “BRKL.”

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Selected Financial Data


	At or for the year ended December 31,
	2023			2022			2021			2020			2019
	(Dollars in Thousands, Except Per Share Data)
FINANCIAL CONDITION DATA
Total assets	$	11,382,256		$	9,185,836		$	8,602,622		$	8,942,424		$	7,856,853
Total loans and leases	9,641,589			7,644,388			7,154,457			7,269,553			6,737,816
Allowance for loan and lease losses (6)	117,522			98,482			99,084			114,379			61,082
Allowance for investment security losses	441			102			—			—			—
Investment securities available-for-sale	916,601			656,766			720,866			745,822			498,995
Investment securities held-to-maturity	—			—			—			—			86,780
Equity securities held-for-trading	—			—			—			526			3,581
Goodwill and identified intangible assets	265,429			162,208			162,703			163,579			164,850
Total deposits	8,548,125			6,522,146			7,049,906			6,910,696			5,830,072
Core deposits (1)	6,092,097			5,283,859			5,766,669			4,826,789			3,808,430
Certificates of deposit	1,574,855			928,143			1,117,695			1,389,998			1,671,738
Brokered deposits	881,173			310,144			165,542			693,909			349,904
Total borrowed funds	1,376,670			1,432,652			357,321			820,247			902,749
Stockholders' equity	1,198,644			992,125			995,342			941,778			945,606
Tangible stockholders' equity (*)	933,215			829,917			832,639			778,199			780,756
Nonperforming loans and leases (2)	43,630			14,894			32,459			38,448			19,461
Nonperforming assets (3)	45,324			15,302			33,177			44,963			22,092
EARNINGS DATA
Interest and dividend income	$	577,287		$	345,186		$	311,529		$	326,817		$	347,626
Interest expense	237,576			45,415			29,156			66,654			94,326
Net interest income	339,711			299,771			282,373			260,163			253,300
Provision (credit) for credit losses on loans	37,868			8,525			(7,837)			61,886			9,583
Provision (credit) for credit losses on investments	339			102			—			—			—
Non-interest income	31,934			28,347			26,989			24,644			29,793
Non-interest expense	239,524			179,542			162,608			160,844			157,481
Provision for income taxes	18,915			30,205			39,151			14,442			28,269
Net income	74,999			109,744			115,440			47,635			87,717
Operating earnings (*)	92,928			111,255			115,468			46,124			88,184
PER COMMON SHARE DATA
Earnings per share - Basic	$	0.85		$	1.42		$	1.48		$	0.60		$	1.10
Earnings per share - Diluted	0.85			1.42			1.48			0.60			1.10
Operating earnings per share (*)	1.05			1.44			1.48			0.58			1.10
Dividends paid per common share	0.540			0.520			0.480			0.460			0.440
Book value per share (end of period)	13.48			12.91			12.82			12.05			11.87
Tangible book value per share (*)	10.50			10.80			10.73			9.96			9.80
Stock price (end of period)	10.91			14.15			16.19			12.04			16.46
PERFORMANCE RATIOS
Net interest margin	3.24		%	3.67		%	3.49		%	3.17		%	3.51		%
Return on average assets	0.67		%	1.27		%	1.36		%	0.55		%	1.15		%

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	At or for the year ended December 31,
	2023		2022		2021		2020		2019
	(Dollars in Thousands, Except Per Share Data)
Operating return on average assets (*)	0.83	%	1.29	%	1.36	%	0.53	%	1.15	%
Return on average tangible assets (*)	0.69	%	1.30	%	1.38	%	0.56	%	1.17	%
Operating return on average tangible assets (*)	0.85	%	1.32	%	1.38	%	0.54	%	1.17	%
Return on average stockholders' equity	6.42	%	11.15	%	11.93	%	5.09	%	9.56	%
Operating return on average stockholders' equity (*)	7.95	%	11.30	%	11.93	%	4.93	%	9.61	%
Return on average tangible stockholders' equity (*)	8.36	%	13.35	%	14.35	%	6.17	%	11.67	%
Operating return on average tangible stockholders' equity (*)	10.36	%	13.53	%	14.35	%	5.97	%	11.73	%
Dividend payout ratio (*)	63.90	%	36.52	%	32.45	%	76.41	%	40.03	%
Efficiency ratio (4)	64.45	%	54.72	%	52.56	%	56.47	%	55.63	%

GROWTH RATIOS
Total loan and lease growth (5)	26.13	%	6.85	%	(1.58)	%	7.89	%	6.89	%

Total deposit growth (5)	31.06	%	(7.49)	%	2.01	%	18.54	%	6.89	%

ASSET QUALITY RATIOS
Net loan and lease charge-offs as a percentage of average loans and leases	0.21	%	0.05	%	0.08	%	0.18	%	0.11	%
Nonperforming loans and lease losses as a percentage of total loans and leases	0.45	%	0.19	%	0.45	%	0.53	%	0.29	%
Nonperforming assets as a percentage of total assets	0.40	%	0.17	%	0.39	%	0.50	%	0.28	%
Total allowance for loan and leases losses as a percentage of total loans and leases	1.22	%	1.29	%	1.38	%	1.57	%	0.91	%
CAPITAL RATIOS
Stockholders' equity to total assets	10.53	%	10.80	%	11.57	%	10.53	%	12.04	%
Tangible equity ratio (*)	8.39	%	9.20	%	9.87	%	8.86	%	10.15	%
Tier 1 leverage capital ratio	9.02	%	10.26	%	10.15	%	8.92	%	10.28	%
Common equity Tier 1 capital ratio (**)	10.25	%	12.05	%	11.86	%	11.04	%	11.44	%
Tier 1 risk-based capital ratio	10.35	%	12.18	%	11.99	%	11.18	%	11.58	%
Total risk-based capital ratio	12.37	%	14.44	%	14.30	%	13.51	%	13.59	%

(1) Core deposits consist of demand checking, NOW, money market and savings accounts.

(2) Nonperforming loans and leases consist of nonaccrual loans and leases.

(3) Nonperforming assets consist of nonperforming loans and leases, other real estate owned and other repossessed assets.

(4) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest income for the period.

(5) Total growth is calculated by dividing the change in the balance during the period by the balance at the beginning of the period.

(6) The allowance for loan and lease losses for the years ending after December 31, 2019 reflect the adoption of CECL.

(*) Refer to Non-GAAP Financial Measures and Reconciliation to GAAP.

(**) Common equity tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets. The ratio was established as part of the implementation of Basel III, effective January 1, 2015.

Executive Overview

~~Growth~~Balance Sheet

Total assets ~~of $6.8~~increased $2.2 billion, or 23.9%, to $11.4 billion as of December 31, ~~2017 increased $342.1 million, or 5.3%,~~2023 from $9.2 billion as of December 31, ~~2016.~~2022. The increase was primarily driven by ~~increases in loans and leases and investment securities, partly offset by decreases in cash~~the acquisition of PCSB.

Cash and cash ~~equivalents.~~equivalents decreased $249.9 million, or 65.3%, to $133.0 million as of December 31, 2023 from $383.0 million as of December 31, 2022.

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Total loans and leases ~~of $5.7~~increased $2.0 billion, or 26.1%, to $9.6 billion as of December 31, ~~2017 increased $331.8 million, or 6.1%,~~2023 from $7.6 billion as of December 31, ~~2016.~~2022. The Company's commercial loan portfolios, which are comprised of commercial real estate loans and commercial loans and leases, totaled ~~$4.7~~$8.2 billion, or ~~82.0%~~84.7% of total loans and leases as of December 31, ~~2017,~~2023, an increase of ~~$285.9 million,~~$1.7 billion, or ~~6.5%~~27.2%, from ~~$4.4~~$6.4 billion, or ~~81.8%~~84.0% of total loans and leases, as of December 31, ~~2016.~~

2022.

Total deposits ~~of $4.9~~increased $2.0 billion, or 31.1%, to $8.5 billion as of December 31, ~~2017 increased $260.3 million, or 5.6%,~~2023 from ~~$4.6~~$6.5 billion as of December 31, ~~2016.~~2022, primarily driven by the completion of the PCSB acquisition. Core deposits, which include demand checking, NOW, money market and savings accounts, totaled ~~$3.7~~$6.1 billion, or ~~75.2%~~71.3% of total deposits as of December 31, ~~2017,~~2023, an increase of ~~$93.8 million,~~$0.8 billion, or ~~2.6%~~15.3%, from ~~$3.6~~$5.3 billion, or ~~77.4%~~81.0% of total deposits as of December 31, ~~2016.~~2022. Certificate of deposit balances totaled $1.6 billion, or 18.4% of total deposits as of December 31, 2023, an increase of $0.6 billion, or 69.7%, from $0.9 billion, or 14.2% of total deposits, as of December 31, 2022. Brokered deposit balances totaled $0.9 billion, or 10.3% of total deposits as of December 31, 2023, an increase of $0.6 billion, or 184.1%, from $0.3 billion, or 4.8% of total deposits, as of December 31, 2022.

Total borrowed funds decreased $56.0 million, or 3.9%, to $1.38 billion as of December 31, 2023 from $1.43 billion as of December 31, 2022.

Asset Quality

Nonperforming assets as of December 31, ~~2017~~2023 totaled ~~$31.7~~$45.3 million, or ~~0.47%~~0.40% of total assets, compared to ~~$41.5~~$15.3 million, or ~~0.64%~~0.17% of total assets, as of December 31, ~~2016.~~2022. Net charge-offs for the year ended December 31, ~~2017~~2023 were ~~$13.9~~$19.7 million, or ~~0.25%~~0.21% of average loans and leases, compared to ~~$13.3~~$3.3 million, or ~~0.25%~~0.05% of average loans and leases, for the year ended December 31, ~~2016.The decrease~~2022. The increase of $30.0 million in ~~nonperforming loans and leases and~~ nonperforming assets was primarily driven by increases of $19.0 million in nonperforming commercial real estate loans, $5.4 million in nonperforming equipment financing loans, $3.4 million in nonperforming commercial loans, and $1.6 million in nonperforming residential loans during the ~~partial charge offs and pay downs on certain taxi medallion loans.~~year ended December 31, 2023.

The ratio of the allowance for loan and lease losses to total loans and leases was ~~1.02%~~1.22% as of December 31, ~~2017,~~2023, compared to ~~0.99%~~1.29% as of December 31, ~~2016. Excluding the loans acquired from BankRI and First Ipswich,~~2022.

The ratio of the allowance for loan and lease losses ~~related~~ to ~~originated~~nonaccrual loans and leases ~~as a percentage of the total originated loan and lease portfolio~~ was ~~1.05%~~269.36% as of December 31, ~~2017,~~2023, compared to ~~1.03%~~661.22% as of December 31, ~~2016. The Company continued to employ its historical underwriting methodology throughout the twelve month period ended December 31, 2017.~~2022.

Capital Strength

The Company is a "well-capitalized" bank holding company as defined in the FRB's Regulation Y. The Company's common equity Tier 1 ~~Capital Ratio~~capital ratio was ~~12.02%~~10.25% as of December 31, ~~2017,~~2023, compared to ~~10.48%~~12.05% as of December 31, ~~2016.~~2022. The Company's Tier 1 ~~Leverage Ratio~~leverage ratio was ~~10.43%~~9.02% as of December 31, ~~2017,~~2023, compared to ~~9.16%~~10.26% as of December 31, ~~2016.~~2022. As of December 31, ~~2017,~~2023, the Company's Tier 1 ~~Risk-Based Ratio~~risk-based ratio was ~~12.34%~~10.35%, compared to ~~10.79%~~12.18% as of December 31, ~~2016.~~2022. The Company's ~~Total Risk-Based Ratio~~total risk-based ratio was ~~14.75%~~12.37% as of December 31, ~~2017,~~2023, compared to ~~13.20%~~14.44% as of December 31, ~~2016.~~2022.

The Company's ratio of stockholders' equity to total assets was ~~11.86%~~10.53% and 10.80% as of December 31, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively. The Company's tangible equity ratio was ~~9.94%~~8.39% and ~~8.73%~~9.20% as of December 31, ~~2017~~2023 and December 31, ~~2016,~~2022, respectively.

Net Income

For the year ended December 31, ~~2017,~~2023, the Company reported net income of ~~$50.5~~$75.0 million, or ~~$0.68~~$0.85 per basic and diluted share, a decrease of ~~$1.8~~$34.7 million, or ~~3.5%~~31.7%, from ~~$52.4~~$109.7 million, or ~~$0.74~~$1.42 per basic and diluted share for the year ended December 31, ~~2016. Excluding the impact of the Tax Reform Act, net income would have been $59.7 million, with an EPS of $0.80 per basic and diluted share, for the year ended December 31, 2017.~~2022. The decrease in net income is primarily the result of ~~the impact~~an increase in non-interest expense of ~~the Tax Reform Act,~~$60.0 million and an increase in the provision for credit losses of ~~$8.6~~$29.3 million ~~an increase in non-interest expense~~which includes $16.7 million attributable to the closing of ~~$8.7 million and an increase in provision for income taxes of $13.2 million,~~the PCSB Bank acquisition, partially offset by an increase in net interest income of ~~$19.5~~$39.9 million, a decrease in the provision for income taxes of $11.3 million, and an increase in non-interest income of ~~$9.5~~$3.6 million.

The return on average assets was ~~0.76%~~0.67% for the year ended December 31, ~~2017,~~2023, compared to ~~0.83%~~1.27% for the year ended December 31, ~~2016.~~2022. The return on average stockholders' equity was ~~6.53%~~6.42% for the year ended December 31, ~~2017,~~2023, compared to ~~7.59%~~11.15% for the year ended December 31, ~~2016.~~2022.

The net interest margin was ~~3.57%~~3.24% for the year ended December 31, ~~2017 up~~2023, down from ~~3.44%~~3.67% for the year ended December 31, ~~2016.~~2022. The ~~increase~~decrease in the net interest margin is a result of an increase of 218 basis points in the Company's cost of funds to 3.00% in 2023 from 0.82% in 2022, partially offset by an increase in the yield on interest-earning assets ~~by 16~~of 128 basis points to ~~4.20%~~5.50% in ~~2017~~2023 from ~~4.04%~~4.22% in ~~2016, partially offset by an increase~~2022.

Table of ~~4 basis points in the Company's overall cost of funds to 0.69% in 2017 from 0.65% in 2016.~~Contents

Results for ~~2017~~2023 included a ~~$19.0 million~~ provision for credit losses of $37.9 million, as discussed in the "Allowance for Credit Losses—Allowance for Loan and Lease Losses" section below.

Non-interest income increased ~~$9.5~~$3.6 million to ~~$32.2~~$31.9 million for the year ended December 31, ~~2017~~2023 from ~~$22.7~~$28.3 million for the year ended December 31, ~~2016.~~2022. Several factors contributed to the year over year increase, including ~~an increase~~increases of ~~$11.4~~$3.6 million in other non-interest income, $1.4 million in gain on sales of investment securities, ~~recorded~~net, and $0.7 million in ~~the first quarter of 2017,~~deposit fees, partially offset by ~~a $1.8~~decreases of $1.6 million ~~decrease~~in gain on sales of loans and leases, $0.4 million in loan level derivative ~~income.~~income, net., and $0.2 million in loan fees.

Non-interest expense increased ~~$8.7~~$60.0 million to ~~$139.1~~$239.5 million for the year ended December 31, ~~2017~~2023 from ~~$130.4~~$179.5 million for the year ended December 31, ~~2016.~~2022, primarily driven the completion of the PCSB acquisition. The increase was largely attributable to ~~an increase~~increases of ~~$4.6~~$25.4 million in compensation ~~an increase of $0.7~~and employee benefits expense, $7.3 million in ~~occupancy, an increase~~amortization of ~~$1.4~~identified intangible assets, $6.2 million in equipment and data processing expense, $5.2 million in merger and ~~an increase of $1.7~~acquisition expense, $5.1 million in other non-interest expense, $4.7 million in FDIC insurance expense, $4.2 million in occupancy expense, and $2.2 million in professional services expense, partially offset by a decrease of $0.3 million in advertising and marketing expense.

Critical Accounting Policies and Estimates

The accounting policies described below are considered critical to understanding the Company's financial condition and operating results. Such accounting policies are considered to be especially important because they involve a higher degree of complexity and require management to make difficult and subjective judgments which often require assumptions or estimates about matters that are inherently uncertain. The use of different judgments, assumptions and estimates could result in material differences in the Company's operating results or financial condition.

~~Valuation of Investment Securities~~Allowance for Credit Losses

~~Investment securities classified as available-for-sale are carried at estimated fair value, with any unrealized gains and~~Description. The allowance for credit losses net of taxes, reported as accumulated other comprehensive income or loss in stockholders' equity. Debt securities that the Company has the positive intent and ability to hold to maturity are classified as "held-to-maturity" and are carried at amortized cost.

The market values of the Company's investment securities, particularly its fixed-rate securities, are affected by changes in market interest rates as determined by the term structure of risk-free rates and the credit spreads associated with different investment categories. In general, as interest rates rise, the fair value of fixed-rate securities will decrease; as interest rates fall, the fair value of fixed-rate securities will increase. On a quarterly basis, the Company reviews and evaluates fair value based on market data obtained from independent sources or, in the absence of active market data, from model-derived valuations based on market assumptions. If the Company deems any decline to be other-than-temporary, the amount of impairment loss recorded in earnings for a debt security is the entire difference between the security's cost and its fair value if the Company intends to sell the debt security prior to recovery or it is more likely than not that the Company will have to sell the debt security prior to recovery. If, however, the Company does not intend to sell the debt security or it concludes that it is more likely than not that the Company will not have to sell the debt security prior to recovery, the credit loss component of an other-than-temporary impairment of a debt security is recognized as a charge to earnings and the remaining portion of the impairment loss is recognized as a reduction in comprehensive income. The credit loss component of an other-than-temporary loss is determined based on the Company's bestrepresents management's estimate of ~~cash flows~~ expected ~~to be collected. There were no impairment~~ losses ~~charged to earnings in 2017, 2016 and 2015.~~

~~See Note 21, "Fair Value of Financial Instruments" to~~over the ~~consolidated financial statements for additional information on how management determines the fair value of its financial instruments.~~

~~Valuation of Acquired Loans~~

~~Loans that the Company acquired are initially recorded at fair value with no carryover~~life of the ~~related allowance for~~ loan and lease ~~losses. Determining the fair value~~portfolio. The allowance for credit losses consists of the acquired loans involves estimating the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest. The Company continues to evaluate the reasonableness of expectations for the timing and the amount of cash to be collected. Subsequent decreases in expected cash flows may result in changes in the amortization or accretion of fair market value adjustments, and in some cases may result in a loan being considered impaired.

~~Allowance for Loan and Lease Losses~~

~~The~~ allowance for loan and lease losses ~~represents management's estimate of probable losses inherent in~~and reserve for unfunded commitments, which are classified as a contra-asset and liability within other liabilities, respectively, on the ~~loan and lease portfolio.~~Consolidated Balance Sheets. Additions to the allowance for ~~loan and lease~~credit losses are made by charges to the provision for credit losses. Losses on loans and leases are deducted from the allowance when all or a portion of a loan or lease is considered ~~uncollectable.~~uncollectible. The determination of the loans on which full collectability is not reasonably assured, the estimates of the fair value of the underlying collateral, and the assessment of economic and other conditions are subject to assumptions and judgments by management. Valuation allowances could differ materially as a result of changes in, or different interpretations of, these assumptions and judgments.

Management evaluates the adequacy of the allowance on a quarterly basis and reviews its conclusion as to the amount to be established with the Audit Committee and the Board of Directors.

~~See Note 7, "Allowance~~As a result of the adoption of ASU 2016-13 effective January 1, 2020, the Company updated its critical accounting policy for ~~Loan~~the allowance for credit losses. The updates in this standard replace the incurred loss impairment GAAP methodology with the Current Expected Credit Losses ("CECL") methodology. The CECL methodology incorporates current condition, and ~~Lease Losses,"~~"reasonable and supportable" forecasts, as well as prepayments, to estimate credit losses over the ~~consolidated financial statements~~life of the loan.

Judgments and Uncertainties. In estimating the allowance for ~~additional information~~credit losses, the Company relies on ~~how management determines~~models and economic forecasts developed by external parties as the ~~balance~~primary driver of the allowance for ~~loan~~credit losses. These models and ~~lease~~forecasts are based on nationwide sets of data. As a result, the Company has calibrated the output of these models to match the performance of a relevant set of peer institutions during the development dataset in order to make the results more relevant to the Company. Additionally, economic forecasts can change significantly over an economic cycle and have a significant level of uncertainty associated with them. The performance of the models is dependent on the variables used in the models being reasonable proxies for the portfolio’s performance; however, these variables may not capture all sources of risk within the portfolio. As a result, management reviews the results and makes qualitative adjustments to the models to capture limitations of the models as necessary. Such qualitative factors may include adjustments to better capture the risk of specialty lending portfolios, the imprecision associated with the economic forecasts, and the ability of the models to capture emerging risks within the portfolio that may not be represented in the historical dataset. These judgments are thoroughly evaluated through management’s review process, and revised on a quarterly basis to account for changes in the facts and circumstances of the portfolio.

Effect if Actual Results Differ From Assumptions. The allowance for credit losses ~~for each portfolio and class~~is a reflection of ~~loans.~~the Company’s best estimate of loss based on a forecast of future conditions as of a point in time. Conditions in the future may vary from those forecasts, causing realized losses to be either higher or lower than forecasted, which will result in either additional provisions from income or a benefit to income based on the performance of the portfolio.

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Impairment of Goodwill

Description. Goodwill is presumed to have an indefinite useful life and is tested at least annually for impairment. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. If fair value exceeds the carrying amount at the time of testing, goodwill is not considered impaired. Quoted market prices in active markets are the best evidence of fair value and are

considered to be used as the basis for measurement, when available. Other acceptable valuation methods include present-value measurements based on multiples of earnings or revenues, or similar performance measures. Differences in valuation techniques could result in materially different evaluations of impairment. In September 2011, the FASB issued Accounting Standards Update ("ASU") 2011-08 which provides guidance for companies when testing goodwill for impairment. The objective of the ASU is to simplify how entities test goodwill for impairment. Pursuant to the ASU, entities may now assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the ~~two-step~~one-step goodwill impairment test. The ~~more-likely-than-not~~more likely than not threshold is defined as having a likelihood of more than 50%.

To determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, an entity should consider the extent to which each of the adverse events or circumstances identified could affect the comparison of a reporting unit's fair value with its carrying amount.

Pursuant to the ASU, an entity should place more weight on the events and circumstances that have the greatest impact on a reporting unit's fair value or the carrying amount of its net assets; and may affect its determination of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

~~Qualitative factors that have been assessed~~In accordance with ASC 350-20-35-3B, an entity can bypass the qualitative assessment and perform the quantitative impairment test. Given the current economic environment, a quantitative analysis was performed where management selected a sample of comparable acquisitions and calculated the control premium associated with each sale. The Company’s market capitalization times the sampled control premium allowed management to compare the calculated market capitalization to the Company’s current book value to determine ~~whether it~~if an adjustment to goodwill is more likely than not that the fair value of a reporting unit is less than its carrying amount including goodwill: general economic conditions, regulatory environment, share price, real estate values, lending concentrations, interest-rate environment, asset quality, capital, financial performance, integration of acquired companies and conversion to a new data processing system.

warranted. The Company ~~has evaluated the qualitative factors discussed above~~did not have any impairment of Goodwill and ~~assessed the effect~~other identified ~~adverse events or circumstances could have, and based on this analysis has concluded there was no indication of goodwill impairment~~intangible assets as of December 31, ~~2017.~~ 2023. Further analysis of the Company’s goodwill can be found in Note 9 “Goodwill and Other IntangibleAssets” within the notes to the consolidated financial statements.

Judgments and Uncertainties. The determination of fair value is based on valuations using management’s assumptions of comparable transactions including announcement or completion date, industry, asset size, region, or other relevant factors.

Effect if Actual Results Differ From Assumptions. Changes in these quantitative factors, as well as downturns in economic or business conditions, could have a significant adverse impact on the fair value of the reporting unit in relation to the carrying value of goodwill and could result in an impairment loss affecting our consolidated financial statements as a whole.

Business Combinations

Business combinations are generally accounted for under the acquisition method of accounting whereby assets acquired and liabilities assumed in business combinations are recorded at their estimated fair value as of the acquisition date. The determination of fair value may involve the use of internal or third-party valuation specialists to assist in the determination of the fair value of certain assets and liabilities at the acquisition date, including loans and leases, core deposit intangibles and time deposits. The excess of the cost of acquisition over these fair values is recognized as goodwill. A description of the valuation methodologies used to estimate the fair values of the significant assets acquired and liabilities assumed from the acquisition of PCSB can be found in Note 2 "Acquisitions" within the notes to the consolidated financial statements.

~~Identified Intangible Assets~~Recent Accounting Developments

~~Identified intangible assets~~In March 2020, the Financial Accounting Standards Board ("FASB") issued ASU 2020-04, "Reference Rate Reform (Topic 848)-Facilitation of the Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04") to provide optional expedients and exceptions for applying GAAP to certain contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are ~~assets resulting from acquisitions~~met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships existing as of December 31, 2022, for which an entity has elected certain optional expedients provided that those elections are retained through the end of the hedging relationship. The amendments in this update are effective for all entities as of March 12, 2020 through December 31, 2022 and do not apply to contract modifications made after December 31, 2022.

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In January 2021, the FASB issued ASU 2021-01, "Reference Rate Reform (Topic 848)" an update to address concerns around structural risk of interbank offered rates ("IBORs"), particularly, the risk of cessation of the LIBOR. The amendments in this update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are ~~being amortized over their estimated useful lives.~~affected by the discounting transition. In December 2022, FASB issued ASU 2022-06, "Reference Rate Reform (Topic 848)" which deferred the sunset date of Topic 848 to December 31, 2024, to allow for a transition period after the sunset of LIBOR. The ~~recoverability~~Company has adopted the amendments in these updates and established a LIBOR transition committee to guide the Company’s transition from LIBOR. The Company has completed much of the work to transition off the LIBOR index consistent with industry timelines. The working group has identified ~~intangible assets is~~its products that utilize LIBOR and has implemented fallback language to facilitate the transition to alternative rates. The Company has also evaluated ~~for impairment at least annually. If impairment is deemed~~its infrastructure and identified fallback rates as well as started offering alternative indices and new products tied to these alternative indices. The Company does not anticipate the adoption of these standards to have ~~occurred,~~a material impact to the ~~amount~~consolidated financial statements.

In August 2021, the FASB issued ASU 2021-06, "Presentation of ~~impairment~~Financial Statements (Topic 205), Financial Services – Depository and Lending (Topic 942), and Financial Services – Investment Companies (Topic 946)" which updated guidance to align with new SEC regulations with regards to statistical disclosures for banking and savings and loan institutions. This ASU is ~~charged to expense when identified.~~effective for fiscal years ending on or after December 15, 2021. The Company has adopted ASU 2021-06 as of December 31, 2021. The adoption did not have a material impact on the Company’s consolidated financial statements.

~~Income Taxes~~

~~Certain areas of accounting~~In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805), Accounting for ~~income taxes require management's judgment, including determining the expected realization of deferred tax~~Contract Assets and Contract Liabilities from Contracts with Customers" which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. At the ~~adequacy~~acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. The Company adopted ASU 2021-08 as of liabilities for uncertain tax positions. Judgments are made regarding various tax positions, which are often subjective and involve assumptions about items that are inherently uncertain. If actual factors and conditions differ materially from estimates made by management, the actual realization of the net deferred tax assets or liabilities for uncertain tax positions could vary materially from the amounts previously recorded.

~~Deferred tax assets arise from items that may be claimed as~~January 1, 2023 on a ~~tax deduction or credit in future income tax returns, for which~~prospective basis. The adoption did not have a financial statement tax benefit has been recognized. The Company’s realization of the deferred tax asset depends upon future levels of its taxable income and the existence of prior years' taxable income for which claims for refunds can be carried back. Where necessary, valuation allowances are recorded against those deferred tax assets which a Company has determined will not be realized. Deferred tax liabilities represent items that will require a future tax payment. Deferred tax liabilities generally represent tax expense recognized in the Company's financial statements for which payment has been deferred, or a deduction claimedmaterial impact on the Company's ~~tax return but~~consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures" which addresses concerns regarding the complex accounting for loans modified as troubled debt restructurings (“TDRs”) and also the disclosure of gross writeoff information included in required vintage disclosures. The Company adopted ASU 2022-02 as of January 1, 2023. The enhanced disclosure requirements provided for by ASU 2022-02 were adopted on a prospective basis. Reporting periods prior to the adoption of ASU 2022-02 are presented in accordance with the applicable GAAP. The adoption did not ~~yet recognized as an expense in~~have a material impact on the ~~Company's~~Company’s consolidated financial statements. ~~Deferred tax liabilities are also recognized~~Additional details can be found in Note 7, "Allowance for ~~certain non-cash items such as goodwill.~~Credit Losses".

See Note ~~17, “Income Taxes” within~~1, “Basis of Presentation” in the notes to the consolidated financial statements for ~~information regarding income taxes and the impact the enactment of the Tax Reform Act on the Company's consolidated financial statements as of December 31, 2017.~~

~~Recent Accounting Developments~~

~~See Note 1, “Basis of Presentation” within notes to the consolidated financial statements for~~additional information regarding recent accounting developments.

Non-GAAP Financial Measures and Reconciliation to GAAP

In addition to evaluating the ~~Company's~~Company’s results of operations in accordance with GAAP, management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures, such as the operating earnings metrics, the

return on average tangible assets, orreturn on average tangible equity, the tangible stockholders' equity, tangible equity ratio, ~~tangible stockholders' equity,~~ tangible book value per share and dividend payout ~~ratio and the ratio of the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases.~~ratio. Management believes that these non-GAAP financial measures provide information useful ~~information~~ to investors ~~for~~in understanding the ~~Company's~~Company’s underlying operating performance and ~~trends. These non-GAAP financial measures may also aid investors in facilitating~~trends, and facilitates comparisons with the performance assessment of ~~the Company's~~ financial performance, including non-interest expense control, while the tangible equity ratio and tangible book value per share are used to analyze the relative strength of the ~~Company's~~Company’s capital position.

~~In light of diversity in presentation among financial institutions, the~~The methodologies used by the Company for determining the non-GAAP financial measures discussed above may differ from those used by other financial institutions.

Operating Earnings

Operating earnings exclude ~~compensation-related~~the after-tax impact of securities gains, the day 1 CECL provision and ~~acquisition-related items from net income.~~merger and acquisition expense. By excluding such items, the Company's results can be measured and assessed on a more consistent basis from period to period. Items excluded from operating earnings are also excluded when calculating the operating return and operating efficiency ratios.

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The following table summarizes the Company's operating earnings and operating earnings per share ("EPS") for the periods indicated:

Year Ended December 31,
2017
2016
2015
2014
2013
(Dollars in Thousands, Except Per Share Data)
Net income, as reported (*) $ 50,518
$ 52,362
$ 49,782
$ 43,288
$ 36,015
Adjustments to arrive at operating earnings:
Compensation-related expenses ⁽¹⁾
—
—
—
—
911
Total pre-tax adjustments —
—
—
—
911
Tax effect:
Compensation-related expenses ⁽¹⁾
—
—
—
—
(316 )
Merger and acquisition expense ⁽²⁾
264
—
—
—
—
Impact of Tax Reform Act 8,965
—
—
—
—
Total adjustments, net of tax 9,229
—
—
—
595
Operating earnings (*) $ 59,747
$ 52,362
$ 49,782
$ 43,288
$ 36,610

Earnings per share, as reported (*) $ 0.68
$ 0.74
$ 0.71
$ 0.62
$ 0.52
Adjustments to arrive at operating earnings per share:
Compensation-related expenses ⁽¹⁾
—
—
—
—
0.01
Merger and acquisition expense ⁽²⁾
—
—
�� —
—
—
Impact of Tax Reform Act 0.12
—
—
—
—
Total adjustments per share 0.12
—
—
—
0.01
Operating earnings per share (*) $ 0.80
$ 0.74
$ 0.71
$ 0.62
$ 0.53


	Year Ended December 31,
	2023		2022		2021		2020		2019
	(Dollars in Thousands, Except Per Share Data)
Net income, as reported	$	74,999	$	109,744	$	115,440	$	47,635	$	87,717




Less:
Security (losses) gains (after-tax)	1,361		252		(28)		1,511		384
Add:

Day 1 PCSB CECL provision (after tax)	13,372		—		—		—		—
Merger and acquisition expense (after-tax) (1)	5,918		1,763		—		—		851


Operating earnings	$	92,928	$	111,255	$	115,468	$	46,124	$	88,184

Earnings per share, as reported	$	0.85	$	1.42	$	1.48	$	0.60	$	1.10

Less:
Security gains (after-tax)	0.02		—		—		0.02		—
Add:

Day 1 PCSB CECL provision (after tax)	0.15		—		—		—		—
Merger and acquisition expense (after-tax) (1)	0.07		0.02		—		—		—


Operating earnings per share	$	1.05	$	1.44	$	1.48	$	0.58	$	1.10

_________________________________________________________________________

(1) ~~Compensation-related expenses include expense related to the departure of the Company's Chief Financial Officer in 2013.~~

~~(2)~~ Merger and acquisition expense related to the ~~acquisition~~purchase of ~~First Commons Bank~~the remaining minority interest of Eastern Funding in the first quarter of ~~2018.~~2019 and the acquisition of PCSB in the first quarter of 2023.

The following table summarizes the Company's operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity and operating return on average tangible stockholders' equity for the periods indicated:

Year Ended December 31,
2017
2016
2015
2014
2013
(Dollars in Thousands)
Operating earnings (*) $ 59,747
$ 52,362
$ 49,782
$ 43,288
$ 36,610

Average total assets (*) $ 6,607,234
$ 6,279,722
$ 5,840,749
$ 5,556,224
$ 5,174,232
Less: Average goodwill and average identified intangible assets, net 145,000
147,308
150,020
153,170
157,187
Average tangible assets (*) $ 6,462,234
$ 6,132,414
$ 5,690,729
$ 5,403,054
$ 5,017,045

Return on average assets (*) 0.76 % 0.83 % 0.85 % 0.78 % 0.70 %
Add:
Compensation-related expenses — % — % — % — % 0.01 %
Impact of Tax Reform Act 0.14 % — % — % — % — %
Operating return on average assets (*) 0.90 % 0.83 % 0.85 % 0.78 % 0.71 %

Return on average tangible assets (*) 0.78 % 0.85 % 0.87 % 0.80 % 0.72 %
Add:
Compensation-related expenses — % — % — % — % 0.01 %
Impact of Tax Reform Act 0.14 % — % — % — % — %
Operating return on average tangible assets (*) 0.92 % 0.85 % 0.87 % 0.80 % 0.73 %

Average total stockholders' equity (*) $ 773,244
$ 689,556
$ 657,841
$ 630,966
$ 616,473
Less: Average goodwill and average identified intangible assets, net 145,000
147,308
150,020
153,170
157,187
Average tangible stockholders' equity (*) $ 628,244
$ 542,248
$ 507,821
$ 477,796
$ 459,286

Return on average stockholders' equity (*) 6.53 % 7.59 % 7.57 % 6.86 % 5.84 %
Add:
Compensation-related expenses — % — % — % — % 0.10 %
Merger and acquisition expense 0.03 % — % — % — % — %
Impact of Tax Reform Act 1.17 % — % — % — % — %
Operating return on average stockholders' equity (*) 7.73 % 7.59 % 7.57 % 6.86 % 5.94 %

Return on average tangible stockholders' equity (*) 8.04 % 9.66 % 9.80 % 9.06 % 7.84 %
Add:
Compensation-related expenses — % — % — % — % 0.13 %
Merger and acquisition expense 0.04 % — % — % — % — %
Impact of Tax Reform Act 1.43 % — % — % — % — %
Operating return on average tangible stockholders' equity (*) 9.51 % 9.66 % 9.80 % 9.06 % 7.97 %

Table of Contents


	Year Ended December 31,
	2023			2022			2021			2020			2019
	(Dollars in Thousands)
Operating earnings	$	92,928		$	111,255		$	115,468		$	46,124		$	88,184

Average total assets	$	11,214,371		$	8,623,403		$	8,518,200		$	8,683,569		$	7,654,634
Less: Average goodwill and average identified intangible assets, net	270,637			162,447			163,122			164,227			165,697
Average tangible assets	$	10,943,734		$	8,460,956		$	8,355,078		$	8,519,342		$	7,488,937

Return on average assets	0.67		%	1.27		%	1.36		%	0.55		%	1.15		%
Less:
Security gains (after-tax)	0.01		%	—		%	—		%	0.02		%	0.01		%
Add:

Day 1 PCSB CECL provision (after tax)	0.12		%	—		%	—		%	—		%	—		%
Merger and acquisition expense (after-tax)	0.05		%	0.02		%	—		%	—		%	0.01		%

Operating return on average assets	0.83		%	1.29		%	1.36		%	0.53		%	1.15		%

Return on average tangible assets	0.69		%	1.30		%	1.38		%	0.56		%	1.17		%
Less:
Security gains (after-tax)	0.01		%	—		%	—		%	0.02		%	0.01		%
Add:

Day 1 PCSB CECL provision (after tax)	0.12		%	—		%	—		%	—		%	—		%
Merger and acquisition expense (after-tax)	0.05		%	0.02		%	—		%	—		%	0.01		%

Operating return on average tangible assets	0.85		%	1.32		%	1.38		%	0.54		%	1.17		%

Average total stockholders' equity	$	1,168,106		$	984,237		$	967,538		$	936,075		$	917,286
Less: Average goodwill and average identified intangible assets, net	270,637			162,447			163,122			164,227			165,697
Average tangible stockholders' equity	$	897,469		$	821,790		$	804,416		$	771,848		$	751,589

Return on average stockholders' equity	6.42		%	11.15		%	11.93		%	5.09		%	9.56		%
Less:
Security gains (after-tax)	0.12		%	0.03		%	—		%	0.16		%	0.04		%
Add:

Day 1 PCSB CECL provision (after tax)	1.14		%	—		%	—		%	—		%	—		%
Merger and acquisition expense (after-tax)	0.51		%	0.18		%	—		%	—		%	0.09		%

Operating return on average stockholders' equity	7.95		%	11.30		%	11.93		%	4.93		%	9.61		%

Return on average tangible stockholders' equity	8.36		%	13.35		%	14.35		%	6.17		%	11.67		%
Less:
Security gains (after-tax)	0.15		%	0.03		%	—		%	0.20		%	0.05		%
Add:

Day 1 PCSB CECL provision (after tax)	1.49		%	—		%	—		%	—		%	—		%
Merger and acquisition expense (after-tax)	0.66		%	0.21		%	—		%	—		%	0.11		%

Operating return on average tangible stockholders' equity	10.36		%	13.53		%	14.35		%	5.97		%	11.73		%

Table of Contents

The following table summarizes the Company’s return on average tangible assets and return on average tangible stockholders’ equity for the periods indicated:


	Year Ended December 31,
	2023			2022			2021			2020			2019
	(Dollars in Thousands)
Net income, as reported	$	74,999		$	109,744		$	115,440		$	47,635		$	87,717

Average total assets	$	11,214,371		$	8,623,403		$	8,518,200		$	8,683,569		$	7,654,634
Less: Average goodwill and average identified intangible assets, net	270,637			162,447			163,122			164,227			165,697
Average tangible assets	$	10,943,734		$	8,460,956		$	8,355,078		$	8,519,342		$	7,488,937

Return on average tangible assets	0.69		%	1.30		%	1.38		%	0.56		%	1.17		%

Average total stockholders' equity	$	1,168,106		$	984,237		$	967,538		$	936,075		$	917,286
Less: Average goodwill and average identified intangible assets, net	270,637			162,447			163,122			164,227			165,697
Average tangible stockholders' equity	$	897,469		$	821,790		$	804,416		$	771,848		$	751,589

Return on average tangible stockholders' equity	8.36		%	13.35		%	14.35		%	6.17		%	11.67		%

Year Ended December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands)
Net income, as reported (*) $ 50,518
$ 52,362
$ 49,782
$ 43,288
$ 36,015

Average total assets (*) $ 6,607,234
$ 6,279,722
$ 5,840,749
$ 5,556,224
$ 5,174,232
Less: Average goodwill and average identified intangible assets, net 145,000

147,308

150,020

153,170

157,187
Average tangible assets (*) $ 6,462,234
$ 6,132,414
$ 5,690,729
$ 5,403,054
$ 5,017,045

Return on average tangible assets (*) 0.78 % 0.85 % 0.87 % 0.80 % 0.72 %

Average total stockholders' equity (*) $ 773,244
$ 689,556
$ 657,841
$ 630,966
$ 616,473
Less: Average goodwill and average identified intangible assets,net 145,000
147,308
150,020
153,170
157,187
Average tangible stockholders' equity (*) $ 628,244
$ 542,248
$ 507,821
$ 477,796
$ 459,286

Return on average tangible stockholders' equity (*) 8.04 % 9.66 % 9.80 % 9.06 % 7.84 %

The following ~~tables summarize~~table summarizes the Company's tangible equity ratio for the periods indicated:

At December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands)
Total stockholders' equity (*) $ 803,830
$ 695,544
$ 667,485
$ 641,818
$ 614,412
Less: Goodwill and identified intangible assets, net 143,934
146,023
148,523
151,434
154,777
Tangible stockholders' equity (*) $ 659,896
$ 549,521
$ 518,962
$ 490,384
$ 459,635

Total assets (*) $ 6,780,249
$ 6,438,129
$ 6,042,338
$ 5,800,948
$ 5,325,651
Less: Goodwill and identified intangible assets, net 143,934
146,023
148,523
151,434
154,777
Tangible assets (*) $ 6,636,315
$ 6,292,106
$ 5,893,815
$ 5,649,514
$ 5,170,874

Tangible equity ratio (*) 9.94 % 8.73 % 8.81 % 8.68 % 8.89 %


	At December 31,
	2023			2022			2021			2020			2019
	(Dollars in Thousands)
Total stockholders' equity	$	1,198,644		$	992,125		$	995,342		$	941,778		$	945,606
Less: Goodwill and identified intangible assets, net	265,429			162,208			162,703			163,579			164,850
Tangible stockholders' equity	$	933,215		$	829,917		$	832,639		$	778,199		$	780,756

Total assets	$	11,382,256		$	9,185,836		$	8,602,622		$	8,942,424		$	7,856,853
Less: Goodwill and identified intangible assets, net	265,429			162,208			162,703			163,579			164,850
Tangible assets	$	11,116,827		$	9,023,628		$	8,439,919		$	8,778,845		$	7,692,003

Tangible equity ratio	8.39		%	9.20		%	9.87		%	8.86		%	10.15		%

Table of Contents

The following ~~tables summarize~~table summarizes the Company's tangible book value per share for the periods indicated:

Year Ended December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands)
Tangible stockholders' equity (*) $ 659,896
$ 549,521
$ 518,962
$ 490,384
$ 459,635

Common shares issued 81,695,695
75,744,445
75,744,445
75,744,445
75,744,445
Less:
Treasury shares 4,440,665
4,707,096
4,861,554
5,040,571
5,171,985
Unallocated ESOP 142,332
176,688
213,066
251,382
291,666
Unvested restricted stocks 455,283
476,854
486,035
419,702
409,068
Common shares outstanding 76,657,415
70,383,807
70,183,790
70,032,790
69,871,726

Tangible book value per share (*) $ 8.61
$ 7.81
$ 7.39
$ 7.00
$ 6.58


	Year Ended December 31,
	2023		2022		2021		2020		2019
	(Dollars in Thousands)
Tangible stockholders' equity	$	933,215	$	829,917	$	832,639	$	778,199	$	780,756

Common shares issued	96,998,075		85,177,172		85,177,172		85,177,172		85,177,172
Less:
Treasury shares	7,354,399		7,731,445		7,037,464		6,525,783		5,003,127
Unallocated ESOP	—		—		24,660		51,114		79,548
Unvested restricted stock	749,099		601,495		500,098		458,800		406,450
Common shares outstanding	88,894,577		76,844,232		77,614,950		78,141,475		79,688,047

Tangible book value per share	$	10.50	$	10.80	$	10.73	$	9.96	$	9.80

The following table summarizes the Company's dividend payout ratio for the periods indicated:

Year Ended December 31,
2017
2016
2015
2014
2013
(Dollars in Thousands)
Dividends paid $ 27,035
$ 25,366
$ 24,967
$ 23,876
$ 23,841

Net income, as reported (*) $ 50,518
$ 52,362
$ 49,782
$ 43,288
$ 36,015

Dividend payout ratio (*) 53.52 % 48.44 % 50.15 % 55.16 % 66.20 %


	Year Ended December 31,
	2023			2022			2021			2020			2019
	(Dollars in Thousands)
Dividends paid	$	47,926		$	40,077		$	37,463		$	36,396		$	35,110

Net income, as reported	$	74,999		$	109,744		$	115,440		$	47,635		$	87,717

Dividend payout ratio	63.90		%	36.52		%	32.45		%	76.41		%	40.03		%

The following table summarizes the Company’s allowance for loan and lease losses related to originated loans and leases as a percentage of total originated loans and leases for the periods indicated:

Year Ended December 31,
2017 2016 2015 2014 2013

Allowance for loan and lease losses $ 58,592
$ 53,666
$ 56,739
$ 53,659
$ 48,473
Less: Allowance for acquired loan and lease losses 1,040
1,253
1,752
2,848
1,629
Allowance for originated loan and lease losses $ 57,552

$ 52,413

$ 54,987

$ 50,811

$ 46,844

Total loans and leases $ 5,730,679
$ 5,398,864
$ 4,995,540
$ 4,822,607
$ 4,362,465
Less: Total acquired loans and leases 240,057
315,304
422,652
590,654
815,412
Total originated loan and leases $ 5,490,622

$ 5,083,560

$ 4,572,888

$ 4,231,953

$ 3,547,053

Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loan and leases 1.05 %
1.03 %
1.20 %
1.20 %
1.32 %

Table of Contents

Financial Condition

Loans and Leases

The following table summarizes the Company's portfolio of ~~loans~~loan and ~~leases~~lease receivables as of the dates indicated:


	At December 31,
	2023				2022				2021				2020				2019
	Balance		Percent of Total		Balance		Percent of Total		Balance		Percent of Total		Balance		Percent of Total		Balance		Percent of Total
	(Dollars in Thousands)
Commercial real estate loans:
Commercial real estate	$	4,047,288	42.0	%	$	3,046,746	39.9	%	$	2,842,791	39.6	%	$	2,578,773	35.4	%	$	2,491,011	37.0	%
Multi-family mortgage	1,415,191		14.7	%	1,150,597		15.1	%	1,099,818		15.4	%	1,013,432		13.9	%	932,163		13.8	%
Construction	302,050		3.1	%	206,805		2.7	%	160,431		2.2	%	231,621		3.2	%	246,048		3.7	%
Total commercial real estate loans	5,764,529		59.8	%	4,404,148		57.7	%	4,103,040		57.2	%	3,823,826		52.5	%	3,669,222		54.5	%
Commercial loans and leases:
Commercial	984,441		10.2	%	752,948		9.9	%	666,677		10.3	%	642,452		15.6	%	729,502		10.8	%
Equipment financing	1,370,648		14.2	%	1,216,585		15.9	%	1,105,611		15.5	%	1,092,461		15.0	%	1,052,408		15.6	%
Condominium association	44,579		0.5	%	46,966		0.6	%	47,137		0.7	%	50,770		0.7	%	56,838		0.8	%

Total commercial loans and leases	2,399,668		24.9	%	2,016,499		26.4	%	1,887,136		26.5	%	2,274,899		31.3	%	1,838,748		27.2	%
Consumer loans:
Residential mortgage	1,082,804		11.2	%	844,614		11.0	%	799,737		11.2	%	791,317		10.9	%	814,245		12.1	%
Home equity	344,182		3.6	%	322,622		4.2	%	324,156		4.5	%	346,652		4.8	%	376,819		5.6	%
Other consumer	50,406		0.5	%	56,505		0.7	%	40,388		0.6	%	32,859		0.5	%	38,782		0.6	%
Total consumer loans	1,477,392		15.3	%	1,223,741		15.9	%	1,164,281		16.3	%	1,170,828		16.2	%	1,229,846		18.3	%
Total loans and leases	9,641,589		100.0	%	7,644,388		100.0	%	7,154,457		100.0	%	7,269,553		100.0	%	6,737,816		100.0	%
Allowance for loan and lease losses	(117,522)				(98,482)				(99,084)				(114,379)				(61,082)
Net loans and leases	$	9,524,067			$	7,545,906			$	7,055,373			$	7,155,174			$	6,676,734

The following table sets forth the growth in the Company’s loan and lease portfolios during the year ending December 31, 2023:


	At December 31, 2023		At December 31, 2022		Dollar Change		Percent Change (Annualized)
	(Dollars in Thousands)
Commercial real estate	$	5,764,529	$	4,404,148	$	1,360,381	30.9	%
Commercial	2,399,668		2,016,499		383,169		19.0	%
Consumer	1,477,392		1,223,741		253,651		20.7	%
Total loans and leases	$	9,641,589	$	7,644,388	$	1,997,201	26.1	%

Total core loans and leases	$	9,641,589	$	7,644,131	$	1,997,458	26.1	%

Table of Contents

At December 31,
2017 2016 2015 2014 2013
Balance
Percent
of Total
Balance
Percent
of Total
Balance
Percent
of Total
Balance
Percent
of Total
Balance
Percent
of Total
(Dollars in Thousands)
Commercial real estate loans:
Commercial real estate $ 2,174,969
38.0 % $ 2,050,382
38.1 % $ 1,875,592
37.5 % $ 1,680,082
34.8 % $ 1,461,985
33.5 %
Multi-family mortgage 760,670
13.3 % 731,186
13.5 % 658,480
13.2 % 639,706
13.2 % 627,933
14.4 %
Construction 140,138
2.4 % 136,999
2.5 % 130,322
2.6 % 148,013
3.1 % 113,705
2.6 %
Total commercial real estate loans 3,075,777
53.7 % 2,918,567
54.1 % 2,664,394
53.3 % 2,467,801
51.1 % 2,203,623
50.5 %
Commercial loans and leases:
Commercial 705,004
12.3 % 635,426
11.8 % 592,531
11.9 % 514,077
10.7 % 407,792
9.3 %
Equipment financing 866,488
15.1 % 799,860
14.8 % 721,890
14.5 % 601,424
12.5 % 513,024
11.8 %
Condominium association 52,619
0.9 % 60,122
1.1 % 59,875
1.2 % 51,593
1.1 % 44,794
1.0 %
Total commercial loans and leases 1,624,111
28.3 % 1,495,408
27.7 % 1,374,296
27.6 % 1,167,094
24.3 % 965,610
22.1 %
Consumer loans:
Residential mortgage 660,065
11.5 % 624,349
11.6 % 616,449
12.3 % 571,920
11.9 % 528,185
12.1 %
Home equity 355,954
6.2 % 342,241
6.3 % 314,553
6.3 % 287,058
5.9 % 257,461
5.9 %
Other consumer 14,772
0.3 % 18,299
0.3 % 25,848
0.5 % 328,734
6.8 % 407,586
9.4 %
Total consumer loans 1,030,791
18.0 % 984,889
18.2 % 956,850
19.1 % 1,187,712
24.6 % 1,193,232
27.4 %
Total loans and leases 5,730,679
100.0 % 5,398,864
100.0 % 4,995,540
100.0 % 4,822,607
100.0 % 4,362,465
100.0 %
Allowance for loan and lease losses (58,592 ) (53,666 ) (56,739 ) (53,659 ) (48,473 )
Net loans and leases $ 5,672,087
$ 5,345,198
$ 4,938,801
$ 4,768,948
$ 4,313,992

The following table presents the maturity distribution of the Company's loan portfolio as of December 31, 2023.


	At December 31, 2023
	1 Year or Less		After 1-5 Years		After 5-15 Years		After 15 Years		Total
	(Dollars in Thousands)
Commercial real estate	$	2,136,221	$	2,690,355	$	929,177	$	8,776	$	5,764,529
Commercial	452,905		1,383,267		504,184		59,312		2,399,668
Consumer	270,343		233,372		219,442		754,235		1,477,392
Total	$	2,859,469	$	4,306,994	$	1,652,803	$	822,323	$	9,641,589

The following table presents the distribution of the Company's loans that were due after one year between fixed and variable interest rates as of December 31, 2023.


	At December 31, 2023
	Fixed		Variable		Total
	(Dollars in Thousands)
Commercial real estate	$	1,735,003	$	1,893,305	$	3,628,308
Commercial	1,188,281		758,482		1,946,763
Consumer	674,915		532,134		1,207,049
Total	$	3,598,199	$	3,183,921	$	6,782,120

The Company's loan portfolio consists primarily of first mortgage loans secured by commercial, multi-family and residential real estate properties located in the Company's primary lending area, loans to business entities, including commercial lines of credit, loans to condominium associations and loans and leases used to finance equipment used by small businesses. The Company also provides financing for construction and development projects, home equity and other consumer loans.

The Company employs seasoned commercial lenders and retail bankers who rely on community and business contacts as well as referrals from customers, attorneys and other professionals to generate loans and deposits. Existing borrowers are also an important source of business since many of them have more than one loan outstanding with the Company. The Company's ability to originate loans depends on the strength of the economy, trends in interest rates, and levels of customer demand and market competition.

The Company's current policy is that the ~~aggregate amount of loans outstanding~~total credit exposure to ~~any~~ one ~~borrower or related entities~~obligor relationship may not exceed ~~$35.0~~$60.0 million unless approved by the ~~Board~~ Credit Committee, a committee of the Company's Board of Directors.

As of December 31, ~~2017,~~2023, there were ~~twelve~~four borrowers with commitments over ~~$35.0~~$60.0 million. The total of those commitments was ~~$537.1~~$259.5 million or ~~8.0%~~2.2% of total loans and commitments as of December 31, ~~2017.~~2023. As of December 31, 2022, there were three borrowers with loans and commitments over $60.0 million. The total of those loans and commitments was $208.5 million, or 2.2% of total loans and commitments, as of December 31, 2022.

The Company has written underwriting policies to control the inherent risks in loan origination. The policies address approval limits, loan-to-value ratios, appraisal requirements, debt service coverage ratios, loan concentration limits and other matters relevant to loan underwriting.

Commercial Real Estate Loans

The commercial real estate portfolio is comprised of commercial real estate loans, multi-family mortgage loans, and construction loans and is the largest component of the Company's overall loan portfolio, representing ~~53.7%~~59.8% of total loans and leases outstanding as of December 31, ~~2017.~~2023.

Typically, commercial real estate loans are larger in size and involve a greater degree of risk than owner-occupied residential mortgage loans. Loan repayment is usually dependent on the successful operation and management of the properties and the value of the properties securing the loans. Economic conditions can greatly affect cash flows and property values.

A number of factors are considered in originating commercial real estate and multi-family mortgage loans. The qualifications and financial condition of the borrower (including credit history), as well as the potential income generation and the value and condition of the underlying property, are evaluated. When evaluating the qualifications of the borrower, the Company considers the financial resources of the borrower, the borrower's experience in owning or managing similar property and the borrower's payment history with the Company and other financial institutions. Factors considered in evaluating the underlying property include the net operating income of the mortgaged premises before debt service and depreciation, the debt

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service coverage ratio (the ratio of cash flow before debt service to debt service), the use of conservative capitalization rates, and the ratio of the loan amount to the appraised value. Generally, personal guarantees are obtained from commercial real estate loan borrowers.

Commercial real estate and multi-family mortgage loans are typically originated for terms of five to fifteen years with amortization periods of 20 to 30 years. Many of the loans are priced at inception on a fixed-rate basis generally for periods ranging from two to five years with repricing periods for longer-term loans. When possible, prepayment penalties are included in loan covenants on these loans. For commercial customers who are interested in loans with ~~fixed rate~~ terms longer than five years, the Company offers loan level derivatives to accommodate customer need.

The Company's urban and suburban market area is characterized by a large number of apartment buildings, condominiums and office ~~buildings, retail stores, among others.~~buildings. As a result, commercial real estate and multi-family mortgage lending has been a significant part of the Company's activities for many years. These types of loans typically generate higher yields, but also involve greater credit risk. Many of the Company's borrowers have more than one multi-family or commercial real estate loan outstanding with the Company. ~~The Company monitors the commercial real estate portfolio for tenant exposures; both by company and industry.~~

The ~~permanent~~ commercial real estate portfolio was composed primarily of loans secured by ~~apartment~~multi-family buildings ($~~750.3 million)~~1.3 billion), office buildings ($~~636.3~~876.4 million), retail stores ($~~495.4~~960.2 million), industrial properties ($~~367.1~~765.2 million), mixed-use properties ($~~204.9~~507.0 million), lodging services ($~~109.9~~203.4 million) and to food services ($~~53.0~~77.9 million) as of December 31, ~~2017. At~~2023. As of that date, ~~97.2%~~approximately 78.2% of the commercial real estate loans outstanding were secured by properties located in New ~~England.~~England; primarily in the Greater Boston and Greater Providence markets, with additional exposure of approximately 16.5% of the commercial real estate loans outstanding were also secured by properties in the State of New York, nearly all of which is in the Lower Hudson Valley region.

The following table presents the percentage of the Company's commercial real estate loan portfolio by borrower type that is owner and non-owner occupied as of December 31, 2023.


	At December 31, 2023
	Owner Occupied		Non-Owner Occupied		Total

Borrower type:
Multi-family buildings	—	%	23.33	%	23.33	%
Office buildings	1.30	%	13.90	%	15.20	%
Retail stores	1.95	%	14.71	%	16.66	%
Industrial properties	2.66	%	10.61	%	13.27	%
Mixed-use properties	0.70	%	8.09	%	8.79	%
Lodging services	0.14	%	3.39	%	3.53	%
Food Services	0.80	%	0.55	%	1.35	%
Other	9.65	%	8.22	%	17.87	%
Total	17.20	%	82.80	%	100.00	%

The following table presents the percentage of the Company's commercial real estate loan portfolio by geographic concentration that is owner and non-owner occupied as of December 31, 2023.


	At December 31, 2023
	Owner Occupied		Non-Owner Occupied		Total

Geographic concentration:
New England	11.55	%	66.66	%	78.21	%
New York	3.20	%	13.26	%	16.46	%
Other	2.87	%	2.46	%	5.33	%
Total	17.62	%	82.38	%	100.00	%

Construction and development financing is generally considered to involve a higher degree of risk than long-term financing on improved, occupied real estate and thus has lower concentration limits than do other commercial credit classes. Risk of loss on a construction loan is largely dependent upon the accuracy of the initial estimate of construction costs, the estimated time to sell or rent the completed property at an adequate price or rate of occupancy, and market conditions. If the

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estimates and projections prove to be inaccurate, the Company may be confronted with a project which, upon completion, has a value that is insufficient to assure full loan repayment.

Criteria applied in underwriting construction loans for which the primary source of repayment is the sale of the property ~~are~~is different from the criteria applied in underwriting construction loans for which the primary source of repayment is the stabilized cash flow from the completed project. For those loans where the primary source of repayment is from resale of the property, in addition to the normal credit analysis performed for other loans, the Company also analyzes project costs, the attractiveness of the property in relation to the market in which it is located and demand within the market area. For those construction loans where the source of repayment is the stabilized cash flow from the completed project, the Company analyzes not only project costs but also how long it might take to achieve satisfactory occupancy and the reasonableness of projected rental rates in relation to market rental rates.

Commercial Loans

The commercial loan and lease portfolio is comprised of commercial loans, equipment financing loans and leases and condominium association loans ~~and represented 28.3%~~representing 24.9% of total loans outstanding as of December 31, ~~2017.~~2023.

The commercial loan and lease portfolio is composed primarily of loans toin the following sectors: small businesses ($~~507.6~~852.6 million), transportation services ($~~344.5~~368.4 million), food services ($238.7 million), recreation services ($~~149.7 million), food services ($113.2 million), manufacturing ($90.4~~142.6 million), rental and leasing services ($~~82.1~~68.3 million), manufacturing ($139.7 million), and retail ($~~69.5~~149.4 million) as of December 31, ~~2017.~~2023.

The Company provides commercial banking services to companies in its market area. Approximately ~~46.2%~~39.6% of the commercial loans outstanding as of December 31, ~~2017~~2023 were made to borrowers located in New ~~England.~~England; primarily in the Greater Boston and Greater Providence markets. The remaining ~~53.8%~~60.4% of the commercial loans outstanding were made to borrowers in other areas in the United States of America, primarily by the Company's equipment financing divisions. Product offerings include lines of credit, term loans, letters of credit, deposit services and cash management. These types of credit facilities have as their primary source of repayment cash flows from the operations of a business. Interest rates offered are available on a floating basis tied to the prime rate or a similar index or on a fixed-rate basis referenced on the Federal Home Loan Bank of Boston ~~("FHLBB")~~ index.

Credit extensions are made to established businesses on the basis of loan purpose and assessment of capacity to repay as determined by an analysis of their financial statements, the nature of collateral to secure the credit extension and, in most instances, the personal guarantee of the owner of the business as well as industry and general economic conditions. ~~The Company also participates in U.S. Government programs such as the Small Business Administration (the "SBA") in both the 7A program and as an SBA preferred lender.~~

The Company’s equipment financing divisions focus on market niches in which its lenders have deep experience and industry contacts, and on making loans to customers with business experience. An important part of the Company’s equipment financing loan origination volume comes from equipment manufacturers and existing customers as they expand their operations. The equipment financing portfolio is composed primarily of loans to finance laundry, tow trucks, fitness, dry cleaning and convenience store equipment. Approximately ~~16.2%~~11.0% of the commercial loans outstanding were made by the equipment financing divisions to borrowers located ~~primarily~~ in the ~~greater~~State of New ~~York and New Jersey metropolitan area.~~York. Typically, the loans are priced at a fixed rate of interest and require monthly payments over their three- to seven-year life. The yields earned on equipment financing loans are higher than those earned on the commercial loans made by the Banks because they involve a higher degree of credit risk. Equipment financing customers are typically small-business owners who operate with limited financial resources and who face greater risks when the economy weakens or unforeseen adverse events arise. Because of these characteristics, personal guarantees of borrowers are usually obtained along with liens on available assets. The size of loan is determined by an analysis of cash flow and other characteristics pertaining to the business and the equipment to be financed, based on detailed revenue and profitability data of similar operations.

Loans to condominium associations are for the purpose of funding capital improvements, are made for five- to ten-year terms and are secured by a general assignment of condominium association revenues. Among the factors considered in the underwriting of such loans are the level of owner occupancy, the financial condition and history of the condominium association, the attractiveness of the property in relation to the market in which it is located and the reasonableness of estimates of the cost of capital improvements to be made. Depending on loan size, funds are advanced as capital improvements are made and, in more complex situations, after completion of engineering inspections.

Consumer Loans

The consumer loan portfolio is comprised of residential mortgage loans, home equity loans and lines of credit, and other consumer loans ~~and represented 18.0%~~representing, 15.3% of total loans outstanding as of December 31, ~~2017.~~2023. The Company focuses its mortgage and home equity lending on existing and new customers within its branch networks in its urban and suburban marketplaces in the ~~greater~~Greater Boston and Providence metropolitan ~~areas.~~areas along with the Lower Hudson Valley area of New York.

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The Company originates ~~adjustable-~~adjustable and ~~fixed-rate~~fixed rate residential mortgage loans secured by one- to four-family residences. Each residential mortgage loan granted is subject to a satisfactorily completed application, employment verification, credit history and a demonstrated ability to repay the debt. Generally, loans are not made when the loan-to-value ratio exceeds 80% unless private mortgage insurance is obtained and/or there is a financially strong guarantor. Appraisals are performed by outside independent ~~fee~~ appraisers.

In general, the Company maintains three-, five- and seven-year adjustable-rate mortgage loans and ten-year fixed-rate fully amortizing mortgage loans in its portfolio. Fixed-rate mortgage loans with maturities beyond ten years, such as 15- and 30-year fixed-rate mortgages, are generally sold into the secondary market on a servicing-released basis. The Banks act as correspondent banks in these secondary-market transactions. Loan sales in the secondary market provide funds for additional lending and other banking activities.

Underwriting guidelines for home equity loans and lines of credit are similar to those for residential mortgage loans. Home equity loans and lines of credit are limited to no more than 80% of the appraised value of the property securing the loan including the amount of any existing first mortgage liens.

Other consumer loans have historically been a modest part of the Company's loan originations. As of December 31, ~~2017,~~2023, other consumer loans equaled ~~$14.8~~$50.4 million, or ~~0.3%~~0.5% of total loans outstanding. ~~Consumer equity and debt securities were pledged as collateral for a substantial part of the total of those loans.~~

~~Loans to Insiders~~

~~Refer to Note 6, “Loans and Leases” within Notes to Consolidated Financial Statements for information regarding loans to insiders.~~

~~Loan Maturities and Repricing~~

The following table shows the contractual maturity and repricing dates of the Company's loans as of December 31, 2017. The table does not include projected prepayments or scheduled principal amortization.

Amount due at December 31, 2017

Within One
Year

More than
One Year to
Three Years

More than
Three Years
to Five Years

More than
Five Years to
Fifteen Years

More than
Fifteen Years

Total after
One Year
Total
(In Thousands)
Commercial real estate $ 838,864
$ 541,051
$ 589,739
$ 201,476
$ 3,839
$ 1,336,105
$ 2,174,969
Multi-family mortgage 353,630
133,559
170,345
101,037
2,099
407,040
760,670
Construction 106,738
8,863
20,382
3,957
198
33,400
140,138
Commercial 217,858
137,103
166,433
94,136
89,474
487,146
705,004
Equipment financing 77,542
210,175
438,624
140,147
—
788,946
866,488
Condominium association 6,334
13,986
15,705
16,594
—
46,285
52,619
Residential mortgage 173,447
125,112
209,647
116,557
35,302
486,618
660,065
Home equity 220,546
1,345
5,554
45,118
83,391
135,408
355,954
Other consumer 7,126
2,055
84
—
5,507
7,646
14,772
Total $ 2,002,085
$ 1,173,249
$ 1,616,513
$ 719,022
$ 219,810
$ 3,728,594
$ 5,730,679

The following table sets forth as of December 31, 2017 the dollar amount of loans contractually due or scheduled to reprice after one year and whether such loans have fixed interest rates or adjustable interest rates.

Due after One Year
Fixed Adjustable Total
(In Thousands)
Originated:
Commercial real estate $ 435,781
$ 825,762
$ 1,261,543
Multi-family mortgage 144,448
241,305
385,753
Construction 2,405
30,994
33,399
Commercial 277,409
203,728
481,137
Equipment financing 595,974
188,958
784,932
Condominium association 25,878
20,407
46,285
Residential mortgage 48,218
407,016
455,234
Home equity 26,479
67,524
94,003
Other consumer 2,172
5,475
7,647
Total originated 1,558,764
1,991,169
3,549,933
Acquired:
Commercial real estate 9,614
64,949
74,563
Multi-family mortgage 10,822
10,465
21,287
Commercial 317
5,691
6,008
Equipment financing 4,015
—
4,015
Residential mortgage 19,490
11,893
31,383
Home equity 23,398
18,007
41,405
Total acquired 67,656
111,005
178,661
Total loans $ 1,626,420
$ 2,102,174
$ 3,728,594

Asset Quality

Criticized and Classified Assets

The Company's management rates certain loans and leases as "other assets especially ~~mentioned~~mentioned" ("OAEM")", "substandard" or "doubtful" based on criteria established under banking regulations. ~~Refer to Note 7, "Allowance for Loan and Lease Losses," to the consolidated financial statements for more information on the Company's risk rating system.~~ These loans and leases are collectively referred to as "criticized" assets. Loans and leases rated OAEM have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects of the loan or lease at some future date. Loans and leases rated as substandard are inadequately protected by the payment capacity of the obligor or of the collateral pledged, if any. Substandard loans and leases have a well-defined weakness or weaknesses that jeopardize the liquidation of debt and are characterized by the distinct possibility that the Company will sustain some loss if existing deficiencies are not corrected. Loans and leases rated as doubtful have well-defined weaknesses that jeopardize the orderly liquidation of debt and partial loss of principal is likely. As of December 31, ~~2017,~~2023, the Company had ~~$68.2~~$128.0 million of total ~~assets, including acquired~~ assets that were designated as criticized. This compares to ~~$70.4~~$108.2 million of assets designated as criticized as of December 31, ~~2016.~~2022. The increase of $19.8 million in criticized assets was primarily driven by $11.9 million in equipment financing loans, $8.4 million in commercial real estate loans, and $3.4 million in construction loans becoming criticized during the year ended December 31, 2023. This was partially offset by $4.6 million in multi-family loans being paid off during the year ending December 31, 2023.

Nonperforming Assets

"Nonperforming assets" consist of ~~nonperforming~~nonaccrual loans and leases, other real estate owned ("OREO") and other repossessed assets. Under certain circumstances, the Company may restructure the terms of a loan or lease as a concession to a borrower, except for acquired loans and leases which are individually evaluated against expected performance on the date of acquisition. These restructured loans and leases are generally considered "nonperforming loans and leases" until a history of collection of at least six months on the restructured terms of the loan or lease has been established. OREO consists of real estate acquired through foreclosure proceedings and real estate acquired through acceptance of a deed in lieu of foreclosure. Other repossessed assets consist of assets that have been acquired through foreclosure that are not real estate and are included in other assets on the Company's consolidated balance sheets.

Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's judgment, reasonable doubt exists as to the full timely collection of interest. When a loan is placed on nonaccrual status, interest accruals cease and all previously accrued and uncollected interest is reversed and charged against current interest income. Interest payments on nonaccrual loans are generally applied to principal. If collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six months of performance has been achieved.

In cases where a borrower experiences financial difficulties and the Company makes or reasonably expects to make certain concessionary modifications to contractual terms, the loan is classified as a ~~troubled debt restructured~~modified loan. In determining whether a debtor is experiencing financial difficulties, the Company considers, among other factors, if the debtor is in payment default or is likely to be in payment default in the foreseeable future without the modification, the debtor declared or is in the process of declaring bankruptcy, there is substantial doubt that the debtor will continue as a going concern, the debtor's entity-specific projected cash flows will not be sufficient to service its debt, or the debtor cannot obtain funds from sources other than the existing creditors at market terms for debt with similar risk characteristics.

~~Nonperforming assets are composed of nonaccrual loans and leases, OREO and other repossessed assets.~~ As of December 31, ~~2017,~~2023, the Company had nonperforming assets of ~~$31.7~~$45.3 million, representing ~~0.47%~~0.40% of total assets, compared to nonperforming assets of ~~$41.5~~$15.3 million, or ~~0.64%~~0.17% of total assets as of December 31, ~~2016.~~2022. The ~~decrease~~increase of $30.0 million was primarily driven by increases of $19.0 million in nonperforming ~~assets was primarily due to the partial charge-off~~commercial real estate loans, $5.4 million in

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nonperforming equipment financing loans, ~~secured by taxi medallions~~$3.4 million in nonperforming commercial loans, and $1.6 million in nonperforming residential loans during the year ~~ending~~ended December 31, ~~2017.~~2023.

The Company evaluates the underlying collateral of each ~~nonperforming~~nonaccrual loan and lease and continues to pursue the collection of interest and principal. Management believes that the current level of nonperforming assets remains manageable relative to the size of the Company's loan and lease portfolio. If economic conditions were to worsen or if the marketplace were to experience prolonged economic stress, ~~management believes~~ it is likely that the level of nonperforming assets would increase, as would the level of charged-off loans.

Past Due and Accruing

Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's judgment, reasonable doubt exists as to the full timely collection of interest. Exceptions may be made if the loan has matured and is in the process of renewal or is well-secured and in the process of collection. When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current interest income. Interest payments on nonaccrual loans are generally applied to principal. If collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six consecutive months of performance has been achieved.

As of December 31, ~~2017,~~2023 and December 31, 2022, the Company had minimal loans and leases greater than 90 days past due and ~~accruing~~accruing.

Table of ~~$3.0 million, or 0.05% of total loans and leases, compared to $7.1 million, or 0.13% of total loans and leases, as of December 31, 2016, representing an decrease of $4.1 million.~~Contents

The following table sets forth information regarding nonperforming assets for the periods indicated:


	At December 31,
	2023			2022			2021			2020			2019
	(Dollars in Thousands)
Nonperforming loans and leases:
Nonaccrual loans and leases:
Commercial real estate	$	19,608		$	607		$	10,848		$	3,300		$	2,845
Multi-family mortgage	—			—			—			—			84
Construction	—			707			—			3,853			—
Total commercial real estate loans	19,608			1,314			10,848			7,153			2,929

Commercial	3,886			464			2,318			7,702			4,909
Equipment financing	14,984			9,653			15,014			16,757			9,822
Condominium association	—			58			84			112			151
Total commercial loans and leases	18,870			10,175			17,416			24,571			14,882

Residential mortgage	4,292			2,680			3,909			5,587			753
Home equity	860			723			285			1,136			896
Other consumer	—			2			1			1			1
Total consumer loans	5,152			3,405			4,195			6,724			1,650

Total nonaccrual loans and leases	43,630			14,894			32,459			38,448			19,461

Other real estate owned	780			—			—			5,415			—
Other repossessed assets	914			408			718			1,100			2,631
Total nonperforming assets	$	45,324		$	15,302		$	33,177		$	44,963		$	22,092

Loans and leases past due greater than 90 days and accruing	$	228		$	33		$	1		$	11,975		$	10,109
Total delinquent loans and leases 61-90 days past due	5,300			2,218			6,081			16,129			4,978
Restructured loans and leases not included in nonperforming assets	—			16,385			12,580			11,483			17,076

Total nonaccrual loans and leases as a percentage of total loans and leases	0.45		%	0.19		%	0.45		%	0.53		%	0.29		%
Total nonperforming assets as a percentage of total assets	0.40		%	0.17		%	0.39		%	0.50		%	0.28		%
Total delinquent loans and leases 61-90 days past due as a percentage of total loans and leases	0.05		%	0.03		%	0.08		%	0.22		%	0.07		%

At December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands)
Nonperforming loans and leases:
Nonaccrual loans and leases:
Commercial real estate $ 3,313
$ 5,340
$ 5,482
$ 1,009
$ 1,098
Multi-family mortgage 608
1,404
291
—
—
Construction 860
—
—
—
—
Total commercial real estate loans 4,781
6,744
5,773
1,009
1,098

Commercial 11,619
22,974
6,264
5,196
6,148
Equipment financing 8,106
6,758
2,610
3,223
4,115
Condominium association —
—
—
—
1
Total commercial loans and leases 19,725
29,732
8,874
8,419
10,264

Residential mortgage 1,979
2,501
2,225
1,682
2,875
Home equity 744
951
1,757
1,918
1,987
Other consumer 43
149
704
686
277
Total consumer loans 2,766
3,601
4,686
4,286
5,139

Total nonaccrual loans and leases 27,272
40,077
19,333
13,714
16,501

Other real estate owned 3,235
618
729
953
577
Other repossessed assets 1,184
781
614
503
1,001
Total nonperforming assets $ 31,691
$ 41,476
$ 20,676
$ 15,170
$ 18,079

Loans and leases past due greater than 90 days and accruing $ 3,020
$ 7,077
$ 8,690
$ 6,008
$ 10,913

Total nonperforming loans and leases as a percentage of total loans and leases 0.48 % 0.74 % 0.39 % 0.28 % 0.38 %
Total nonperforming assets as a percentage of total assets 0.47 % 0.64 % 0.34 % 0.26 % 0.34 %

~~Troubled Debt Restructured Loans and Leases~~

As of December 31, 2017, restructured loans included $5.0 million of commercial real estate loans, $0.6 million of multi-family mortgage loans, $13.9 million of commercial loans, $4.0 million of equipment financing loans and leases, $1.1 million of residential mortgage loans and $1.4 million of home equity loans. As of December 31, 2016, restructured loans included $4.9 million of commercial real estate loans, $2.0 million of multi-family mortgage loans, $13.7 million of commercial loans, $2.1 million of equipment financing loans and leases, $1.3 million of residential mortgage loans and $1.8 million of home equity loans. A restructured loan is a loan for which the maturity date was extended, the principal was reduced, and/or the interest rate was modified to reduce the required monthly payment to a more manageable amount for the borrower.

~~The following table sets forth information regarding troubled debt restructured loans and leases at the dates indicated:~~

At December 31, 2017 At December 31, 2016
(Dollars in Thousands)
Troubled debt restructurings:

On accrual $ 16,241
$ 13,883
On nonaccrual 9,770
11,919
Total troubled debt restructurings $ 26,011
$ 25,802

~~Changes in troubled debt restructured loans and leases were as follows for the periods indicated:~~

Year ended December 31,
2017 2016
(Dollars in Thousands)
Balance at beginning of period $ 25,802
$ 22,918
Additions 7,001
12,027
Net charge-offs (4,723 ) (4,335 )
Repayments (1,147 ) (4,808 )
Other reductions ⁽¹⁾
(922 ) —
Balance at end of period $ 26,011
$ 25,802

^{__________________________________________________________________________________}

^{(1) Includes loans and leases that were removed from TDR status}

Allowances for Credit Losses

~~Allowance for Loan and Lease Losses~~

The allowance for ~~loan and lease~~credit losses consists of general and specific allowances and reflects management's estimate of ~~probable~~expected loan and lease losses ~~inherent in~~over the life of the loan ~~portfolio at the balance sheet date.~~or lease. Management uses a consistent and systematic process and methodology to evaluate the adequacy of the allowance for ~~loan and lease~~credit losses on a quarterly basis. The allowance is calculated by loan type: commercial real estate loans, commercial loans and leases, and consumer loans, each category of which is further segregated. A formula-based credit evaluation approach is applied to each group that is evaluated collectively, primarily by loss factors, which includes estimates of incurred losses over an estimated loss emergence period ("LEP"), assigned to each risk rating by type, coupled with an analysis of certain loans individually evaluated for impairment. Management continuously evaluates and challenges inputs and assumptions in the allowance for ~~loan and lease loss.~~credit losses.

The process to determine the allowance for loan and lease losses requires management to exercise considerable judgment regarding the risk characteristics of the loan portfolios and the effect of relevant internal and external factors. While management evaluates currently available information in establishing the allowance for ~~loan and lease~~credit losses, future adjustments to the allowance for loan and lease losses may be necessary if conditions differ substantially from the assumptions used in making the evaluations. Management performs a comprehensive review of the allowance for ~~loan and lease~~credit losses on a quarterly basis. In addition, various regulatory agencies, as an integral part of their examination process, periodically review a financial

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institution's allowance for ~~loan and lease~~credit losses and carrying amounts of other real estate owned. Such agencies may require the financial institution to recognize additions or reductions to the allowance based on their judgments about information available to them at the time of their examination. See Note 1, "Basis of Presentation," and Note 7, "Allowance for Loan and Lease Losses," to the consolidated financial statements for descriptions of how management determines the balance of the allowance for loan and lease losses for each portfolio and class of loans.

~~During the third quarter of 2015, the Company enhanced and refined its general~~The Company’s allowance methodology ~~to provide further~~provides a quantification of probable losses in the portfolio. Under the ~~enhanced~~current methodology, management ~~combined~~estimates losses over the ~~historical loss histories~~life of the ~~Banks~~loan using reasonable and supportable forecasts. Forecasts, loan data, and model documentation are extensively analyzed and reviewed throughout the quarter to ~~generate~~ensure estimated losses are appropriate at quarter end. Qualitative adjustments are applied when model output does not align with management expectations. These adjustments are thoroughly reviewed and documented to provide clarity and a ~~single set of ratios. Management believes it is appropriate to aggregate~~reasonable basis for any deviations from the ratios as the Banks share common environmental factors, operate in similar geographic markets, and utilize common underwriting standards in accordance with the Company's Credit Policy. In prior periods, a historical loss history applicable to each Bank was used.

Management employed a similar analysis for the consolidation of the qualitative factors as it did for the quantitative factors. Again, management believes the combination of the existing nine qualitative factors used at each of the Banks into a single group of nine factors used across the Company is appropriate based on the commonality of environmental factors, markets and underwriting standards among the Banks. In prior periods each of the Banks utilized a set of qualitative factors applicable to each Bank.

~~As of~~model. For December 31, ~~2017,~~2023, qualitative adjustments were applied to the ~~Company had a portfolio of approximately $19.7 million in loans secured by taxi medallions issued by the cities of Boston~~commercial real estate, commercial, and Cambridge. As of December 31, 2016, this portfolio was approximately $31.1 million. Application-based mobile ride services, such as Uber and Lyft, have generated increased competition in the transportation sector,consumer portfolios resulting in a ~~reduction~~net addition in taxi utilization and, as a result, a reduction in the collateral value and credit quality of taxi medallion loans. This has increased the likelihood that loans secured by taxi medallions may default, or that the borrowers may be unabletotal reserves compared to repay these loans according to terms, resulting in an increase in past due loans, troubled debt restructurings, and charge-offs. Therefore, beginning with the three months ended September 30, 2015, the Company’s allowance calculation included a further segmentation of the commercial loans and leases to reflect the increased risk in the Company’s taxi medallion portfolio. This allowance calculation segmentation represents management’s estimations of the special risks associated with the taxi portfolio.

Based on the refinements to the Company’s allowance methodology discussed above, management determined that the potential risks anticipated by the unallocated allowance are now incorporated into the qualitative and quantitative components, making the unallocated allowance unnecessary. In prior years, the unallocated allowance was used to recognize the estimated risk associated with the allocated general and specific allowances. It incorporated management’s evaluation of existing conditions that were not included in the allocated allowance determinations and provided for losses that arise outside of the ordinary course of business.modeled calculations.

The following tables present the changes in the allowance for ~~loan~~loans and lease losses by portfolio category for the years ended December 31, ~~2017, 2016, 2015, 2014,~~2023, 2022, 2021, 2020, and ~~2013,~~2019, respectively.


	Year Ended December 31, 2023
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2022	$	68,154		$	26,604		$	3,724		$	98,482


Charge-offs	(1,204)			(19,990)			(41)			(21,235)
Recoveries	132			1,406			34			1,572
Provision (credit) for loan and lease losses	14,328			21,537			2,838			38,703
Balance at December 31, 2023	$	81,410		$	29,557		$	6,555		$	117,522

Total loans and leases	$	5,764,529		$	2,399,668		$	1,477,392		$	9,641,589
Total allowance for loan and lease losses as a percentage of total loans and leases	1.41		%	1.23		%	0.44		%	1.22		%


	Year Ended December 31, 2022
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2021	$	69,213		$	27,055		$	2,816		$	99,084


Charge-offs	(37)			(5,068)			(28)			(5,133)
Recoveries	24			1,725			64			1,813
Provision (credit) for loan and lease losses	(1,046)			2,892			872			2,718
Balance at December 31, 2022	$	68,154		$	26,604		$	3,724		$	98,482

Total loans and leases	$	4,404,148		$	2,016,499		$	1,223,741		$	7,644,388
Total allowance for loan and lease losses as a percentage of total loans and leases	1.55		%	1.32		%	0.30		%	1.29		%

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Year Ended December 31, 2017

Commercial
Real Estate
Commercial Consumer Total
(In Thousands)
Balance at December 31, 2016 $ 27,645
$ 20,906
$ 5,115
$ 53,666
Charge-offs (494 ) (14,914 ) (403 ) (15,811 )
Recoveries 476
1,158
319
1,953
(Credit) provision for loan and lease losses (515 ) 19,183
116
�� 18,784
Balance at December 31, 2017 $ 27,112
$ 26,333
$ 5,147
$ 58,592

Total loans and leases $ 3,075,777
$ 1,624,111
$ 1,030,791
$ 5,730,679
Total allowance for loan and lease losses as a percentage of total loans and leases 0.88 % 1.62 % 0.50 % 1.02 %


	Year Ended December 31, 2021
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2020	$	80,132		$	29,498		$	4,749		$	114,379


Charge-offs	(28)			(7,464)			(34)			(7,526)
Recoveries	12			1,541			239			1,792
Provision (credit) for loan and lease losses	(10,903)			3,480			(2,138)			(9,561)
Balance at December 31, 2021	$	69,213		$	27,055		$	2,816		$	99,084

Total loans and leases	$	4,103,040		$	1,887,136		$	1,164,281		$	7,154,457
Allowance for loan and lease losses as a percentage of total loans and leases	1.69		%	1.43		%	0.24		%	1.38		%


	Year Ended December 31, 2020
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2019	$	30,285		$	24,826		$	5,971		$	61,082
Adoption of ASU 2016-13 (CECL)	11,694			(2,672)			(2,390)			6,632
Balance at beginning of period, adjusted	41,979			22,154			3,581			67,714
Charge-offs	(3,514)			(11,113)			(36)			(14,663)
Recoveries	94			1,407			201			1,702
Provision (credit) for loan and lease losses	41,573			17,050			1,003			59,626
Balance at December 31, 2020	$	80,132		$	29,498		$	4,749		$	114,379

Total loans and leases	$	3,823,826		$	2,274,899		$	1,170,828		$	7,269,553
Allowance for loan and lease losses as a percentage of total loans and leases	2.10		%	1.30		%	0.41		%	1.57		%


	Year Ended December 31, 2019
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2018	$	28,187		$	25,283		$	5,222		$	58,692
Charge-offs	—			(8,911)			(127)			(9,038)
Recoveries	—			1,688			179			1,867
Provision (credit) for loan and lease losses	2,098			6,766			697			9,561
Balance at December 31, 2019	$	30,285		$	24,826		$	5,971		$	61,082

Total loans and leases	$	3,669,222		$	1,838,748		$	1,229,846		$	6,737,816
Allowance for loan and lease losses as a percentage of total loans and leases	0.83		%	1.35		%	0.49		%	0.91		%

Year Ended December 31, 2016

Commercial
Real Estate
Commercial Consumer Unallocated Total
(In Thousands)
Balance at December 31, 2015 $ 30,151
$ 22,018
$ 4,570
$ —
$ 56,739
Charge-offs (2,169 ) (10,516 ) (1,982 ) —
(14,667 )
Recoveries —
642
750
—
1,392
(Credit) provision for loan and lease losses (337 ) 8,762
1,777
—
10,202
Balance at December 31, 2016 $ 27,645
$ 20,906
$ 5,115
$ —
$ 53,666

Total loans and leases $ 2,918,567
$ 1,495,408
$ 984,889
N/A
$ 5,398,864
Total allowance for loan and lease losses as a percentage of total loans and leases 0.95 % 1.40 % 0.52 % N/A
0.99 %

Year Ended December 31, 2015

Commercial
Real Estate
Commercial Consumer Unallocated Total
(In Thousands)
Balance at December 31, 2014 $ 29,594
$ 15,957
$ 5,690
$ 2,418
$ 53,659
Charge-offs (550 ) (3,634 ) (2,370 ) —
(6,554 )
Recoveries —
667
1,544
—
2,211
Provision (credit) for loan and lease losses 1,107
9,028
(294 ) (2,418 ) 7,423
Balance at December 31, 2015 $ 30,151
$ 22,018
$ 4,570
$ —
$ 56,739

Total loans and leases $ 2,664,394
$ 1,374,296
$ 956,850
N/A
$ 4,995,540
Allowance for loan and lease losses as a percentage of total loans and leases 1.13 % 1.60 % 0.48 % N/A
1.14 %

Year Ended December 31, 2014

Commercial
Real Estate
Commercial Consumer Unallocated Total
(In Thousands)
Balance at December 31, 2013 $ 23,022
$ 15,220
$ 7,299
$ 2,932
$ 48,473
Charge-offs (130 ) (2,507 ) (1,813 ) —
(4,450 )
Recoveries 4
801
592
—
1,397
Provision (credit) for loan and lease losses 6,698
2,443
(388 ) (514 ) 8,239
Balance at December 31, 2014 $ 29,594
$ 15,957
$ 5,690
$ 2,418
$ 53,659

Total loans and leases $ 2,467,801
$ 1,167,094
$ 1,187,712
N/A
$ 4,822,607
Allowance for loan and lease losses as a percentage of total loans and leases 1.20 % 1.37 % 0.48 % N/A
1.11 %

Year Ended December 31, 2013

Commercial
Real Estate
Commercial Consumer Unallocated Total
(In Thousands)
Balance at December 31, 2012 $ 20,018
$ 10,655
$ 7,849
$ 2,630
$ 41,152
Charge-offs (88 ) (2,077 ) (2,623 ) —
(4,788 )
Recoveries 13
657
764
—
1,434
Provision for loan and lease losses 3,079
5,985
1,309
302
10,675
Balance at December 31, 2013 $ 23,022
$ 15,220
$ 7,299
$ 2,932
$ 48,473

Total loans and leases $ 2,203,623
$ 965,610
$ 1,193,232
N/A
$ 4,362,465
Allowance for loan and lease losses as a percentage of total loans and leases 1.04 % 1.58 % 0.61 % N/A
1.11 %

~~The~~At December 31, 2023, the allowance for loan and lease losses ~~was $58.6~~increased to $117.5 million, ~~as of December 31, 2017,~~ or ~~1.02%~~1.22% of total loans and leases outstanding. This compared to an allowance for loan and lease losses of ~~$53.7~~$98.5 million, or ~~0.99%~~1.29% of total loans and leases outstanding, as of December 31, ~~2016. The increase~~2022.

Net charge-offs in the ~~allowance for loan and lease losses and in the allowance for loan and lease losses as a percentage of total~~ loans and leases ~~from~~portfolio for the years ending December 31, ~~2016 to December 31, 2017 is~~2023 and 2022 were $19.7 million and $3.3 million, respectively. The $16.4 million increase in net charge-offs was primarily ~~due to loan growth~~driven by net charge-off increases of ~~$331.8~~$13.1 million ~~during the year, offset by the charge-off of~~in commercial loans, ~~which had specific reserve during the year.~~$2.2 million in equipment financing loans, and $1.1 million in commercial real estate loans.

Management believes that the allowance for loan and lease losses as of December 31, ~~2017~~2023 is appropriate based on the facts and circumstances discussed further below.

~~Commercial Real Estate Loans~~

~~The allowance for commercial real estate loan losses was $27.1 million, or 0.88%~~

Table of total commercial real estate loans outstanding, as of December 31, 2017. This compared to an allowance for commercial real estate loan losses of $27.6 million, or 0.95% of total commercial real estate loans outstanding, as of December 31, 2016. Specific reserves on commercial real estate loans were zero and $28.0 thousand as of December 31, 2017 and December 31, 2016, respectively. The $0.5 million decrease in the allowance for commercial real estate loan losses during 2017 was primarily driven by the decrease in specific reserve on commercial real estate loans which had a charge-off during the year and the decrease in historical loss factors, partially offset by the originated loan growth of $200.0 million, or 7.3% from December 31, 2016.Contents

The ratio of total criticized and classified commercial real estate loans to total commercial real estate loans increased to 0.91% as of December 31, 2017 from 0.74% as of December 31, 2016. The ratio of originated commercial real estate loans on nonaccrual to total originated commercial real estate loans decreased to 0.16% as of December 31, 2017 from 0.23% as of December 31, 2016. The increase in total criticized and classified commercial real estate loans had a minimal impact on the allowance for commercial real estate loan losses as these loans are adequately collateralized over the loan carrying balance.

Net charge-offs decreased $2.2 million to $18.0 thousand, or 0.001% of average commercial real estate loans, for the year ended December 31, 2017, compared with net charge-offs of $2.2 million, or 0.08% of average commercial real estate loans, for the year ended December 31, 2016. The decrease in net charge-offs was primarily due to the 2016 charge-off of a commercial real estate relationship which had a specific reserve in prior period. Provisions for commercial real estate loans recorded in these periods more than adequately covered charge-offs during those periods. See the ~~"Results of Operations—Provision for Credit Losses"~~ ~~section below for additional information.~~

~~Commercial Loans and Leases~~

The allowance for commercial loan and lease losses was $26.3 million, or 1.62% of total commercial loans and leases outstanding, as of December 31, 2017, compared to $20.9 million, or 1.40% of total commercial loans and leases outstanding, as of December 31, 2016. Specific reserves on commercial loans and leases increased from $0.1 million as of December 31, 2016 to $3.1 million as of December 31, 2017. The $5.4 million increase in the allowance for commercial loans and lease losses during 2017 was primarily driven by the increase in specific reserve on taxi medallion loans, the increase in historical loss factors, along with the originated loan growth of $136.3 million, or 9.2% from December 31, 2016.

The ratio of total criticized and classified commercial loans and leases to total commercial loans and leases decreased to 2.47% as of December 31, 2017, from 3.27% as of December 31, 2016. The ratio of originated commercial loans and leases on nonaccrual to total originated commercial loans and leases decreased to 1.15% as of December 31, 2017 from 1.85% as of December 31, 2016. The decreases in the ratio of total criticized and classified commercial loans and leases to total commercial

loans and leases and the ratio of originated commercial loans and leases on nonaccrual to total originated commercial loans and leases was primarily due to the partial charge-offs of loans secured by taxi medallions in 2017.

Net charge-offs increased $3.9 million to $13.8 million, or 0.88% of average commercial loans and leases, for the year ended December 31, 2017, compared with net charge-offs of $9.9 million, or 0.69% of average commercial loans and leases, for the year ended December 31, 2016. The increase in net charge-offs was primarily due to the charge-offs of the taxi medallion and commercial loans which had a specific reserve in prior period. Provisions for commercial loans recorded in these periods more than adequately covered charge-offs during those periods. See the ~~"Results of Operations—Provision for Credit Losses"~~ ~~section below for additional information.~~

~~Consumer Loans~~

The allowance for consumer loan losses, including residential loans and home equity loans and lines of credit, was $5.1 million, or 0.50% of total consumer loans outstanding, as of December 31, 2017, compared to $5.1 million, or 0.52% of consumer loans outstanding, as of December 31, 2016. Specific reserves on consumer loans were $22.0 thousand and $27.0 thousand as of December 31, 2017 and December 31, 2016, respectively. The allowance for consumer loans remained steady during 2017 despite of the originated loan growth of $70.8 million, or 8.2%, from December 31, 2016.

The ratio of originated consumer loans on nonaccrual to total originated consumer loans increased to 0.23% as of December 31, 2017 from 0.32% as of December 31, 2016. The risk of loss on a home equity loan is higher since the property securing the loan has often been previously pledged as collateral for a first mortgage loan. The Company gathers and analyzes delinquency data, to the extent that data are available on these first liens, for purposes of assessing the collectability of the second liens held by the Company even if these home equity loans are not delinquent. This data are further analyzed for performance differences between amortizing and non-amortizing home equity loans, the percentage borrowed to total loan commitment and by the amount of payments made by the borrowers. The loss exposure is not considered to be high due to the combination of current property values, the historically low loan-to-value ratios, the low level of losses experienced in the past few years and the low level of loan delinquencies as of December 31, 2017. If the local economy weakens, however, a rise in losses in those loan classes could occur. Historically, losses in these classes have been low.

Net charge-offs in the consumer loan portfolio totaled $0.1 million, or 0.01% of average consumer loans, for the year ended December 31, 2017, compared with net charge-offs of $1.2 million, or 0.13% of average consumer loans, for the year ended December 31, 2016. Provisions for consumer loans recorded in these periods more than adequately covered charge-offs during those periods. See the ~~"Results of Operations—Provision for Credit Losses"~~ ~~section below for additional information.~~

The following ~~table sets~~tables set forth the Company's percent of allowance for loan and lease losses to the total allowance for loan and lease losses and the percent of loans to total loans for each of the categories listed at the dates indicated.


	At December 31,
	2023						2022						2021
	Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans
	(Dollars in Thousands)
Commercial real estate	$	53,633	45.7	%	42.0	%	$	44,536	45.3	%	39.9	%	$	44,843	45.3	%	39.6	%
Multi-family mortgage	16,626		14.1	%	14.7	%	16,885		17.1	%	15.1	%	17,474		17.6	%	15.4	%
Construction	11,151		9.5	%	3.1	%	6,733		6.8	%	2.7	%	6,896		7.0	%	2.2	%
Total commercial real estate loans	81,410		69.3	%	59.8	%	68,154		69.2	%	57.7	%	69,213		69.9	%	57.2	%
Commercial	15,527		13.2	%	10.2	%	12,190		12.4	%	9.9	%	9,068		9.2	%	10.3	%
Equipment financing	13,869		11.8	%	14.2	%	14,315		14.5	%	15.9	%	17,907		18.0	%	15.5	%
Condominium association	161		0.1	%	0.5	%	99		0.1	%	0.6	%	80		0.1	%	0.7	%
Total commercial loans and leases	29,557		25.1	%	24.9	%	26,604		27.0	%	26.4	%	27,055		27.3	%	26.5	%
Residential mortgage	3,669		3.2	%	11.2	%	1,894		1.9	%	11.0	%	1,297		1.3	%	11.2	%
Home equity	2,255		1.9	%	3.6	%	1,478		1.5	%	4.2	%	1,335		1.3	%	4.5	%
Other consumer	631		0.5	%	0.5	%	352		0.4	%	0.7	%	184		0.2	%	0.6	%
Total consumer loans	6,555		5.6	%	15.3	%	3,724		3.8	%	15.9	%	2,816		2.8	%	16.3	%

Total	$	117,522	100.0	%	100.0	%	$	98,482	100.0	%	100.0	%	$	99,084	100.0	%	100.0	%

Table of Contents

At December 31,
2017 2016 2015
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
(Dollars in Thousands)
Commercial real estate $ 20,089
34.3 % 38.0 % $ 19,354
36.1 % 38.1 % $ 21,100
37.3 % 37.5 %
Multi-family mortgage 5,667
9.7 % 13.3 % 5,528
10.3 % 13.5 % 6,376
11.2 % 13.2 %
Construction 1,356
2.3 % 2.4 % 2,763
5.1 % 2.5 % 2,675
4.7 % 2.6 %
Total commercial real estate loans 27,112
46.3 % 53.7 % 27,645
51.5 % 54.1 % 30,151
53.2 % 53.3 %
Commercial 15,366
26.2 % 12.3 % 10,096
18.8 % 11.8 % 12,745
22.5 % 11.9 %
Equipment financing 10,586
18.1 % 15.1 % 10,345
19.3 % 14.8 % 8,809
15.5 % 14.5 %
Condominium association 381
0.7 % 0.9 % 465
0.9 % 1.1 % 464
0.8 % 1.2 %
Total commercial loans and leases 26,333
45.0 % 28.3 % 20,906
39.0 % 27.7 % 22,018
38.8 % 27.6 %
Residential mortgage 2,743
4.7 % 11.5 % 2,587
4.8 % 11.6 % 2,069
3.6 % 12.3 %
Home equity 2,219
3.8 % 6.2 % 2,356
4.4 % 6.3 % 2,149
3.8 % 6.3 %
Other consumer 185
0.2 % 0.3 % 172
0.3 % 0.3 % 352
0.6 % 0.5 %
Total consumer loans 5,147
8.7 % 18.0 % 5,115
9.5 % 18.2 % 4,570
8.0 % 19.1 %
Total $ 58,592
100.0 % 100.0 % $ 53,666
100.0 % 100.0 % $ 56,739
100.0 % 100.0 %


	At December 31,
	2020						2019
	Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans
	(Dollars in Thousands)
Commercial real estate	$	46,357	40.6	%	35.4	%	$	21,519	35.3	%	37.0	%
Multi-family mortgage	22,559		19.7	%	13.9	%	6,436		10.5	%	13.8	%
Construction	11,216		9.8	%	3.2	%	2,330		3.8	%	3.7	%
Total commercial real estate loans	80,132		70.1	%	52.5	%	30,285		49.6	%	54.5	%
Commercial	8,089		7.1	%	15.6	%	12,849		21.0	%	10.8	%
Equipment financing	21,292		18.6	%	15.0	%	11,595		19.0	%	15.6	%
Condominium association	117		0.1	%	0.7	%	382		0.6	%	0.8	%
Total commercial loans and leases	29,498		25.8	%	31.3	%	24,826		40.6	%	27.2	%
Residential mortgage	1,967		1.7	%	10.9	%	3,717		6.1	%	12.1	%
Home equity	2,504		2.2	%	4.8	%	2,132		3.5	%	5.6	%
Other consumer	278		0.2	%	0.5	%	122		0.2	%	0.6	%
Total consumer loans	4,749		4.1	%	16.2	%	5,971		9.8	%	18.3	%

Total	$	114,379	100.0	%	100.0	%	$	61,082	100.0	%	100.0	%

The following table sets forth the Company's percent of allowance for loan and lease losses to the total allowance for loan and lease losses and the percent of loans to total loans for each of the categories listed at the dates indicated.

At December 31,
2014 2013
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
(Dollars in Thousands)
Commercial real estate $ 20,858
38.9 % 34.8 % $ 14,883
30.7 % 33.5 %
Multi-family mortgage 5,057
9.4 % 13.2 % 4,890
10.1 % 14.4 %
Construction 3,679
6.9 % 3.1 % 3,249
6.7 % 2.6 %
Total commercial real estate loans 29,594
55.2 % 51.1 % 23,022
47.5 % 50.5 %
Commercial 7,463
13.9 % 10.7 % 6,724
13.9 % 9.3 %
Equipment financing 8,112
15.1 % 12.5 % 8,161
16.8 % 11.8 %
Condominium association 382
0.7 % 1.1 % 335
0.7 % 1.0 %
Total commercial loans and leases 15,957
29.7 % 24.3 % 15,220
31.4 % 22.1 %
Residential mortgage 1,392
2.6 % 11.9 % 1,431
3.0 % 12.1 %
Home equity 1,846
3.5 % 5.9 % 1,324
2.7 % 5.9 %
Other consumer 2,452
4.5 % 6.8 % 4,544
9.4 % 9.4 %
Total consumer loans 5,690
10.6 % 24.6 % 7,299
15.1 % 27.4 %
Unallocated 2,418
4.5 % — % 2,932
6.0 % — %
Total $ 53,659
100.0 % 100.0 % $ 48,473
100.0 % 100.0 %

~~Liability for Unfunded Credit Commitments~~

The liability for unfunded credit commitments, which is included in other liabilities, was $1.7 million, and $1.5 million, as of December 31, 2017, and 2016, respectively. The changes in the liability for unfunded credit commitments reflect changes in the estimate of loss exposure associated with certain credit unfunded credit commitments.

~~See the subsections~~ ~~"Comparison of Years Ended December 31, 2017 and December 31, 2016—Provision for Credit Losses"~~ ~~and "Comparison of Years Ended December 31, 2016 and December 31, 2015—Provision for Credit Losses"~~ appearing elsewhere in this report for a discussion of the provision for loan and lease losses and loan and lease charge-offs recognized in the Company's consolidated financial statements during the past three years.

Investment Securities and Restricted Equity Securities

The investment portfolio exists primarily for liquidity purposes, and secondarily as sources of interest and dividend income, interest-rate risk management and tax planning as a counterbalance to loan and deposit flows. Investment securities are utilized as part of the Company's asset/liability management and may be sold in response to, or in anticipation of, factors such as changes in market conditions and interest rates, security prepayment rates, deposit outflows, liquidity concentrations and regulatory capital requirements.

The investment policy of the Company, which is reviewed and approved by the Board of Directors on an annual basis, specifies the types of investments that are acceptable, required investment ratings by at least one nationally recognized rating agency, concentration limits and duration guidelines. Compliance with the investment policy is monitored on a regular basis. In general, the Company seeks to maintain a high degree of liquidity and targets cash, cash equivalents and investment securities available-for-sale balances between 10% and 30% of total assets.

Cash, cash equivalents, and investment securities increased ~~$32.4~~$9.9 million, or ~~4.8%~~1.0%, to ~~$710.9 million~~$1.05 billion as of December 31, ~~2017 from $678.4 million~~2023 compared to $1.04 billion as of December 31, ~~2016.~~2022. The increase was primarily driven by ana increase in ~~deposit balances, offset by growth in loans and leases and~~ investment ~~securities.~~securities available-for-sale. Cash, cash equivalents, and investment securities were ~~10.48%~~9.22% of total assets as of December 31, ~~2017,~~2023, compared to ~~10.54%~~11.32% of total assets at December 31, ~~2016.~~2022.

Table of Contents

The following table sets forth certain information regarding the amortized cost and market value of the Company's investment securities at the dates indicated:


	At December 31,													At December 31,
	2017				2016				2015					2023			2022						2021
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value			Amortized Cost		Fair Value		Amortized Cost				Fair Value		Amortized Cost				Fair Value
	(In Thousands)													(In Thousands)
Investment securities available-for-sale:													Investment securities available-for-sale:
GSE debentures	$	151,483	$	149,924	$	98,122	$	97,020	$	40,658	$	40,627
GSE CMOs	131,082		127,022		161,483		158,040		198,000		193,816
GSE MBSs	191,281		189,313		214,946		212,915		230,213		229,881
SBA commercial loan asset- backed securities	73		72		107		107		148		147

Municipal obligations

Municipal obligations

Municipal obligations
Corporate debt obligations	62,811		62,683		48,308		48,485		46,160		46,486
U.S. Treasury bonds	8,785		8,730		4,801		4,737		—		—
Trust preferred securities	1,471		1,398		1,469		1,358		1,466		1,267
Marketable equity securities	978		982		966		972		956		977

Foreign government obligations

Foreign government obligations

Foreign government obligations
Total investment securities available-for-sale	$	547,964	$	540,124	$	530,202	$	523,634	$	517,601	$	513,201
Investment securities held-to-maturity:
GSE debentures	$	41,612	$	40,801	$	14,735	$	14,101	$	34,915	$	34,819
GSE MBSs	13,923		13,705		17,666		17,479		19,291		18,986
Municipal obligations	53,695		53,517		54,219		53,204		39,051		39,390
Foreign government obligations	500		500		500		487		500		500
Total investment securities held-to-maturity	$	109,730	$	108,523	$	87,120	$	85,271	$	93,757	$	93,695

Restricted equity securities:
FHLBB stock	$	42,427			$	47,284			$	48,890

Restricted equity securities:

Restricted equity securities:
FHLB stock													FHLB stock	$	55,548			$	52,914					$	10,488
FRB stock	16,842				16,752				16,752				FRB stock	21,881						18,241						18,241
Other	100				475				475				Other	166						152						252
Total restricted equity securities	$	59,369			$	64,511			$	66,117			Total restricted equity securities	$	77,595					$	71,307					$	28,981

Total investment securities and restricted equity securities primarily consist of investment securities available-for-sale, ~~investment securities held-to-maturity,~~ stock in the ~~FHLBB~~FHLB and stock in the FRB. The total securities portfolio increased ~~$34.0~~$266.1 million, or ~~5.0%~~36.6% since December 31, ~~2016.~~2022. As of December 31, ~~2017,~~2023, the total securities portfolio was ~~10.46%~~8.73% of total assets, compared to ~~10.49%~~7.93% of total assets as of December 31, ~~2016.~~2022.

The fair value of investment securities is based principally on market prices and dealer quotes received from third-party, nationally-recognized pricing services for identical investment securities such as U.S. Treasury and agency securities. The Company's ~~marketable~~ equity securities held-for-trading are priced this way and are included in Level 1. These prices are validated by comparing the primary pricing source with an alternative pricing source when available. When quoted market prices for identical securities are unavailable, the Company uses market prices provided by independent pricing services based on recent trading activity and other observable information, including but not limited to market interest-rate curves, referenced credit spreads and estimated prepayment speeds where applicable. These investments include certain U.S. and government agency debt securities, municipal and corporate debt securities, ~~GSE~~U.S. Government-sponsored enterprises ("GSE") residential ~~MBSs~~mortgage backed securities ("MBSs") and ~~CMOs, and~~collateralized mortgage obligations ("CMOs"), trust preferred securities, ~~all of which are included in Level 2. Certain fair values are estimated using pricing models (such as auction-rate municipal securities)~~ and ~~are included in Level 3.~~equity securities held-for-trading.

Additionally, management reviews changes in fair value from period to period and performs testing to ensure that prices received from the third parties are consistent with their expectation of the market. Changes in the prices obtained from the pricing service are analyzed from month to month, taking into consideration changes in market conditions including changes in mortgage spreads, changes in U.S. Treasury security yields and changes in generic pricing of 15-year and 30-year securities.

Additional analysis may include a review of prices provided by other independent parties, a yield analysis, a review of average life changes using Bloomberg analytics and a review of historical pricing for the particular security.

Maturities, calls and principal repayments for investment securities available-for-sale and investment securities held-to-maturity totaled $75.4 million for the year ended December 31, 2017 compared to $143.4 million for the same period in 2016. There were no sales of investment securities available-for-sale in 2017 or 2016. For the year ended December 31, 2017, the Company purchased $91.0 million of investment securities available-for-sale and $26.9 million of investment securities held-to-maturity, compared to $115.4 million of investment securities available-for-sale and $36.2 million of investment securities held-to-maturity in 2016.

As of December 31, ~~2017,~~2023, the fair value of all investment securities available-for-sale was ~~$540.1~~$916.6 million and carried a total of ~~$7.8~~$67.7 million of net unrealized losses, compared to a fair value of ~~$523.6~~$656.8 million and net unrealized losses of ~~$6.6~~$77.2 million as of December 31, ~~2016.~~2022. As of December 31, ~~2017, $469.2~~2023, $717.2 million, or ~~86.9%~~77.8%, of the portfolio, had gross unrealized losses of ~~$8.4~~$69.0 million. This compares to ~~$389.0~~$630.5 million, or ~~74.3%~~96.0%, of the portfolio with gross unrealized losses of ~~$8.0~~$77.5 million as of December 31, ~~2016.~~2022. The Company's unrealized loss position ~~increased~~decreased in ~~2017~~2023 driven by ~~higher year over year interest rates and~~ a change in the portfolio mix from shorter duration MBS to longer duration ~~agency debentures~~U.S. Treasury bonds. For additional discussion on investment securities available-for-sale by security type, see Note 4, "Investment Securities."

Table of Contents

The Company reviews its debt securities portfolio on a quarterly basis in accordance with ASC 326. This analysis is done using probability of default and ~~municipal~~loss given default assumptions where a model is created to determine CECL for the remaining life of the securities.

~~Management believes that these negative differences between amortized cost and fair value do not include credit losses, but rather differences in interest rates between~~ For the ~~time of purchase and the time of measurement. It is more likely than not that~~year ended December 31, 2023, the Company ~~will not sell the investment securities before recovery, and,~~recognized $0.4 million as a result, it will recover the amortized cost basis of the investment securities. As such, management has determined that the securities are not other-than-temporarily impaired as of December 31, 2017. If market conditionsan allowance for ~~securities worsen or the creditworthiness of the underlying issuers deteriorates, it is possible that the Company may recognize additional other-than-temporary impairments in future periods.~~credit loss. For additional discussion on how the Company validates fair values provided by the third-party pricing service, see Note 21, “Fair Value of Financial Instruments.”

~~Investment Securities Available-for-Sale~~

~~U.S. Government-Sponsored Enterprises~~

~~The Company invests in~~Maturities, calls and principal repayments for investment securities issued by U.S. Government-sponsored enterprises ("GSEs"), including GSE debentures, mortgage-backed securities ("MBSs"), and collateralized mortgage obligations ("CMOs"). GSE securities include obligations issued by the Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC"), the Government National Mortgage Association ("GNMA"), the Federal Home Loan Banks ("FHLB") and the Federal Farm Credit Bank. As of December 31, 2017, only GNMA MBSs and CMOs, and Small Business Administration ("SBA") commercial loan asset-backed securities in our available-for-sale ~~portfolio with an estimated fair value of $23.7~~totaled $272.4 million ~~were backed explicitly by the full faith and credit of the U.S. Government, compared to $26.2 million as of December 31, 2016.~~

GSE securities are considered attractive investments because they (1) generate positive yields with minimal administrative expense, (2) impose minimal credit risk as a result of the guarantees usually provided, (3) can be utilized as collateral for ~~borrowings, (4) generate cash flows useful for liquidity management and (5) are ‘‘qualified investments’’ as designated for regulatory purposes that the Company is obligated to meet.~~

As of December 31, 2017, the Company owned 48 GSE debentures with a total fair value of $149.9 million, and a net unrealized loss of $1.6 million. As of December 31, 2016, the Company held 29 GSE debentures with a total fair value of $97.0 million, and a net unrealized loss of $1.1 million. As of December 31, 2017, 43 of the 48 securities in this portfolio were in an unrealized loss position. As of December 31, 2016, 21 of the 29 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA/SBA) guarantee of the U.S. Government. During the year ended December 31, ~~2017, the Company purchased a total of $54.2~~2023 compared to $98.6 million ~~GSE debentures. This compares to $65.7 million purchased during~~for the same period in ~~2016.~~

As of December 31, 2017, the Company owned 62 GSE CMOs with a total fair value of $127.0 million and a net unrealized loss of $4.1 million. As of December 31, 2016, the Company held 62 GSE CMOs with a total fair value of $158.0 million with a net unrealized loss of $3.4 million. As of December 31, 2017, 47 of the 62 securities in this portfolio were in an unrealized loss position. As of December 31, 2016, 47 of the 62 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S. Government. During the year ended December 31, 2017, the Company did not purchase any GSE CMOs. During the year ended December 31, 2016, the Company purchased a total of $3.1 million of GSE CMOs.

As of December 31, 2017, the Company owned 194 GSE MBSs with a total fair value of $189.3 million and a net unrealized loss of $2.0 million. As of December 31, 2016, the Company held 195 GSE MBSs with a total fair value of $212.9 million with a net unrealized loss of $2.0 million. As of December 31, 2017, 82 of the 194 securities in this portfolio were in an unrealized loss position. As of December 31, 2016, 60 of the 195 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S. Government. During the years ended December 31, 2017 and 2016, the Company purchased a total of $18.3 million and $36.6 million, respectively, of GSE MBSs.

~~SBA Commercial Loan Asset-Backed Securities~~

As of December 31, 2017 and December 31, 2016, the Company owned SBA securities with a total fair value of $0.1 million, which approximated amortized cost. As of December 31, 2017, four of the five securities in this portfolio were in an unrealized loss position. As of December 31, 2016, four of the six securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the explicit (SBA) guarantee of the U.S Government.

Mortgage-related securities are created by the pooling of mortgages and the issuance of a security with an interest rate that is less than the average interest rate on the underlying mortgages. Mortgage related securities purchased by the Company generally are comprised of a pool of single-family mortgages. The issuers of such securities are generally GSEs such as FNMA, FHLMC and GNMA, which pool and resell participation interests in the form of securities to investors and guarantee the payment of principal and interest to the investors.

Investments in mortgage-related securities issued and guaranteed by GSEs generally do not entail significant credit risk. Such investments, however, are susceptible to significant interest rate and cash flow risks when actual cash flows from the investments differ from cash flows estimated at the time of purchase. Additionally, the market value of such securities can be affected adversely by market changes in interest rates. Prepayments that are faster than anticipated may shorten the life of a security and result in the accelerated expensing of any premiums paid, thereby reducing the net yield earned on the

security. Although prepayments of underlying mortgages depend on many factors, the difference between the interest rates on the underlying mortgages and prevailing mortgage interest rates generally is the most significant determinant of the rate of prepayments. During periods of declining interest rates, refinancing generally increases and accelerates the prepayment of underlying mortgages and the related security. Such an occurrence can also create reinvestment risk because of the unavailability of other investments with a comparable rate of return in relation to the nature and maturity of the alternative investment. Conversely, in a rising interest-rate environment, prepayments may decline, thereby extending the estimated life of the security and depriving the Company of the ability to reinvest cash flows at the higher market rates of interest.

~~Corporate Obligations~~

From time to time, the Company may invest in high-quality corporate obligations to provide portfolio diversification and improve the overall yield on the portfolio. The Company owned nineteen corporate obligation securities with a total fair value of $62.7 million and a net unrealized gain of $0.1 million as of December 31, 2017. This compares to sixteen corporate obligation securities with a total fair value of $48.5 million and a net unrealized gain of $0.2 million as of December 31, 2016. As of December 31, 2017, nine of the nineteen securities in this portfolio were in an unrealized loss position. As of December 31, 2016, three of the sixteen securities in this portfolio were in an unrealized loss position. Full collection of the obligations is expected because the financial condition of the issuers is sound, and the issuers have not defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the ability and intent to hold the obligations for a period of time to recover the amortized cost. During the year ended December 31, 2017, the Company purchased $14.5 million in corporate obligations compared to $5.1 million in the same period in 2016.

~~U.S. Treasury Bonds~~

The Company invests in securities issued by the U.S. government. As of December 31, 2017, the Company owned two U.S. Treasury bonds with a total fair value of $8.7 million and a net unrealized loss of $0.1 million. As of December 31, 2016, the Company owned one U.S. Treasury bond with a total fair value of $4.7 million and a net unrealized loss of $0.1 million. As of December 31, 2017 and 2016, all of the securities in this portfolio were in an unrealized loss position.2022. For the year ended December 31, ~~2017,~~2023, the Company ~~purchased $4.0~~sold $230.0 million ~~in U.S. Treasury bonds,~~of investment securities available for sale, compared to ~~$4.8~~$78.8 million ~~during~~for the same period in ~~2016.~~

~~Trust Preferred Securities~~

Trust preferred securities represent subordinated debt issued by financial institutions. As of December 31, 2017 and December 31, 2016, the Company owned two trust preferred securities with a total fair value of $1.4 million and a net unrealized loss of $0.1 million. As of December 31, 2017 and 2016, both of the securities in this portfolio were in an unrealized loss position. Full collection of the obligations is expected because the financial condition of the issuers is sound, neither of the

~~issuers has defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the ability and~~

~~intent to hold the obligations for a period of time to recover the amortized cost.~~

~~Marketable Equity Securities~~

As of December 31, 2017 and 2016, the Company owned marketable equity securities with a fair value of $1.0 million, which approximated amortized cost. As of December 31, 2017 and 2016, one of the two securities in this portfolio was in an unrealized loss position.

~~Investment Securities Held-to-Maturity~~

~~U.S. Government-Sponsored Enterprises~~

As of December 31, 2017, the Company owned fourteen GSE debentures with a total fair value of $40.8 million and a net unrealized loss of $0.8 million. As of December 31, 2016, the Company owned five GSE debentures with a total fair value of $14.1 million and a net unrealized loss of $0.6 million. As of December 31, 2017, all securities in this portfolio were in an unrealized loss position. At December 31, 2016, all of the securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S Government. During the years ended December 31, 2017 and December 31, 2016, the Company purchased a total of $26.9 million and $17.7 million in GSE debentures, respectively.

As of December 31, 2017, the Company owned eleven GSE MBSs with a total fair value of $13.7 million and a net unrealized loss of $0.2 million. As of December 31, 2016, the Company owned eleven GSE MBSs with a total fair value of $17.5 million and an unrealized loss of $0.2 million. As of December 31, 2017, eight of the eleven securities in this portfolio were in an unrealized loss position as compared to December 31, 2016, when eight of the eleven securities were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S. Government. During2022. For the year ended December 31, ~~2017,~~2023, the Company ~~did not purchase any GSE MBSs,~~purchased $362.9 million of investment securities available-for-sale, compared to $197.6 million for the same period in ~~2016 when the Company purchased $2.3 million in GSE MBSs.~~2022.

~~Municipal Obligations~~

As of December 31, 2017, the Company owned 100 municipal obligation securities with a total fair value and total amortized cost of $53.5 million and $53.7 million, respectively. As of December 31, 2016, the Company owned 100 municipal obligation securities with a total fair value and total amortized cost of $53.2 million and $54.2 million, respectively. As of December 31, 2017, 69 of the 100 securities in this portfolio were in an unrealized loss position as compared to December 31, 2016, when 93 of the 100 securities were in an unrealized loss position. During the year ended December 31, 2017, the Company did not purchase any municipal obligations. During the year ended December 31, 2016, the Company purchased $15.6 million in municipal obligations.

~~Foreign Government Obligations~~

As of December 31, 2017 and December 31, 2016, the Company owned one foreign government obligation security with a fair value and amortized cost of $0.5 million. As of December 31, 2017, the security was in an unrealized loss position. This security was in an unrealized loss position at December 31, 2016. During the year ended December 31, 2017, the Company did not purchase any foreign government obligation securities. During the year ended December 31, 2016, the Company repurchased the foreign government obligation security that matured during the first quarter of 2016.

Restricted Equity Securities

~~FHLBB~~FHLB Stock—The Company invests in the stock of the ~~FHLBB~~FHLB of Boston and New York as one of the requirements to borrow. ~~The~~As of December 31, 2023 on 2022, the Company ~~maintains an~~did not have excess balance of capital ~~stock, which allows for additional borrowing capacity at each of the Banks. On December 30th, the FHLBB initiated a stock buyback which reduced the Company's excess balance to zero.~~stock.

As of December 31, ~~2017,~~2023, the Company owned stock in the ~~FHLBB~~FHLB of Boston and New York with a carrying value of ~~$42.4~~$55.5 million, ~~a decrease~~an increase of ~~$4.9~~$2.6 million from ~~$47.3~~$52.9 million as of December 31, ~~2016. As of December 31, 2017, the FHLBB had total assets of $60.4 billion~~2022. The Company continually reviews its investment to determine if impairment exists. The Company reviews recent public filings, rating agency analysis and total capital of $3.3 billion, of which $1.3 billion was retained earnings. The FHLBB stated that it remained in compliance with all regulatory capital ratios as of December 31, 2017 and was classified as "adequately capitalized" byother factors when making its ~~regulator, based on the FHLBB's financial information as of September 30, 2017.~~determination. See Note 5, "Restricted Equity Securities" to the consolidated financial statements for further information about the ~~FHLBB.~~FHLB.

Federal Reserve Bank Stock—The Company invests in the stock of the Federal Reserve Bank of Boston and New York, as a condition of the membership for the Banks in the Federal Reserve System. In ~~2017,~~2023, the Company maintained its investment in the stock

of the Federal Reserve ~~Bank of Boston~~Banks to adjust for deposit growth. The FRB is the primary federal regulator for the Company and the Banks.

~~Other Stock—The Company invests in a small number~~

Table of other restricted securities which included Northeast Retirement Services, Inc. ("NRS"). The Company, through its wholly owned subsidiary, Brookline Securities Corp. ("Brookline Securities"), held 9,721 shares of restricted equity securities of NRS. This investment was recorded at cost of $122 thousand as no readily determinable fair value was available. On December 5, 2016, Community Bank Systems, Inc. ("CBU") announced entry into a merger agreement to acquire NRS. After receiving stockholder and regulatory approvals, CBU completed the acquisition of NRS on February 3, 2017. The Company exchanged the 9,721 shares of NRS and received $319.04 in cash and 14.876 shares of CBU common stock for each share of NRS held. As part of the merger agreement, the Company was restricted to selling 5,071 shares per day in the open market and a portion of the merger consideration was held in escrow to be used for indemnification claims, if any, within the 12 month period following the merger. The Company completed the sale of all CBU shares during the first quarter of 2017. The Company recognized a gain on the sale of securities of $11.4 million for the quarter ending March 31, 2017.Contents

Brookline Securities held one Class A Common Stock share and 2,070 Class B Common Stock shares of the Savings Bank Life Insurance Company of Massachusetts ("SBLI"). In July 2017, SBLI converted from a Massachusetts stock insurance company to a Massachusetts mutual insurance company and, as a result, Brookline Securities received $500 for one share of Class A Common Stock and $128 per share for its 2,070 shares of Class B Common Stock of SBLI, or gross proceeds of $265.5 thousand in cash. Brookline Securities recognized a nominal gain on the exchange.

Carrying Value, Weighted Average Yields, and Contractual Maturities of Investment and Restricted Equity Securities

The table below sets forth certain information regarding the carrying value, weighted average yields and contractual maturities of the Company's investment and restricted equity securities portfolio at the date indicated.

Balance at December 31, 2017
One Year or Less
After One Year
Through Five Years

After Five Years
Through Ten Years
After Ten Years Total

Carrying
Value

Weighted
Average
Yield (1)

Carrying
Value

Weighted
Average
Yield (1)

Carrying
Value

Weighted
Average
Yield (1)

Carrying
Value

Weighted
Average
Yield (1)

Carrying
Value

Weighted
Average
Yield (1)
(Dollars in Thousands)
Investment securities available-for-sale:
GSE debentures $ —
— % $ 95,330
1.97 % $ 54,594
2.14 % $ —
— % $ 149,924
2.03 %
GSE CMOs 1,196
1.53 % 19
6.90 % 6,151
1.55 % 119,656
1.85 % 127,022
1.83 %
GSE MBSs 378
3.40 % 16,420
2.19 % 54,617
1.91 % 117,898
2.26 % 189,313
2.16 %
SBA commercial loan asset- backed securities —
— % 27
2.26 % 45
1.60 % —
— % 72
1.85 %
Corporate debt obligations 22,078
2.29 % 26,269
2.26 % 14,336
2.60 % —
— % 62,683
2.35 %
U.S. Treasury bonds —
— % 3,964
2.24 % 4,766
2.02 % —
— % 8,730
2.12 %
Trust preferred securities —
— % —
— % 469
2.10 % 929
2.23 % 1,398
2.19 %
Marketable equity securities (2) —
— % —
— % —
— % 982
2.06 % 982
2.06 %
Total investment securities available-for-sale $ 23,652
2.27 % $ 142,029
2.05 % $ 134,978
2.06 % $ 239,465
2.06 % $ 540,124
2.07 %
Investment securities held-to-maturity:

GSE debentures $ —
— % $ 26,867
2.15 % $ 14,745
1.90 % $ —
— % $ 41,612
2.06 %
GSE MBSs 35
1.98 % —
— % —
— % 13,888
1.98 % 13,923
1.98 %
Municipal obligations 883
0.81 % 30,968
1.38 % 21,844
1.72 % —
— % 53,695
1.51 %
Foreign government obligations —
— % 500
2.15 % —
— % —
— % 500
2.15 %
Total investment securities held-to-maturity $ 918
0.85 % $ 58,335
1.74 % $ 36,589
1.79 % $ 13,888
1.98 % $ 109,730
1.78 %
Restricted equity securities (2):
FHLBB stock $ —
— % $ —
— % $ —
— % $ 42,427
4.27 % $ 42,427
4.27 %
FRB stock —
— % —
— % —
— % 16,842
6.00 % 16,842
6.00 %
Other stock —
— % —
— % —
— % 100
33.45 % 100
33.45 %
Total restricted equity securities $ —
— % $ —
— % $ —
— % $ 59,369
4.81 % $ 59,369
4.81 %


	Balance at December 31, 2023
	One Year or Less				After One Year Through Five Years				After Five Years Through Ten Years				After Ten Years				Total
	Carrying Value		Weighted Average Yield (1)		Carrying Value		Weighted Average Yield (1)		Carrying Value		Weighted Average Yield (1)		Carrying Value		Weighted Average Yield (1)		Carrying Value		Weighted Average Yield (1)
	(Dollars in Thousands)
Investment securities available-for-sale:
GSE debentures	$	24,655	3.02	%	$	80,240	4.18	%	$	87,684	1.23	%	$	8,548	2.46	%	$	201,127	2.68	%


GSE CMOs	—		—	%	768		2.79	%	8,125		3.40	%	52,724		4.88	%	61,617		4.66	%
GSE MBSs	53		1.72	%	9,195		2.44	%	20,084		2.69	%	140,665		2.82	%	169,997		2.78	%
Municipal obligations	9,553		4.43	%	921		3.29	%	916		2.66	%	7,532		3.47	%	18,922		3.91	%
Corporate debt obligations	8,420		3.53	%	—		—	%	11,297		4.62	%	—		—	%	19,716		4.15	%
U.S. Treasury bonds	98,660		4.63	%	241,126		2.84	%	104,952		1.42	%	—		—	%	444,737		2.90	%

Foreign government obligations	—		—	%	485		1.97	%	—		—	%	—		—	%	485		1.97	%

Total investment securities available-for-sale	$	141,341	4.27	%	$	332,735	3.15	%	$	233,058	1.69	%	$	209,469	3.35	%	$	916,601	3.00	%







Restricted equity securities (2):
FHLB stock	$	—	—	%	$	—	—	%	$	—	—	%	$	55,548	8.27	%	$	55,548	8.27	%
FRB stock	—		—	%	—		—	%	—		—	%	21,881		6.00	%	21,881		6.00	%
Other stock	—		—	%	—		—	%	—		—	%	166		—	%	166		—	%
Total restricted equity securities	$	—	—	%	$	—	—	%	$	—	—	%	$	77,595	7.61	%	$	77,595	7.61	%

_______________________________________________________________________________

(1) Yields have been calculated on a ~~tax-equivalent~~pre-tax basis.

The Company holds no investment securities available-for-sale that are tax-exempt.

(2) Equity securities have no contractual maturity, therefore they are reported above in the over ten year maturity column.

Table of Contents

Deposits

The following table presents the Company's deposit mix at the dates indicated.


	At December 31,																			At December 31,
	2017						2016						2015							2023										2022								2021
	Amount		Percent of Total		Weighted Average Rate		Amount		Percent of Total		Weighted Average Rate		Amount		Percent of Total		Weighted Average Rate			Amount			Percent of Total				Weighted Average Rate				Amount				Percent of Total				Weighted Average Rate			Amount					Percent of Total				Weighted Average Rate
	(Dollars in Thousands)																			(Dollars in Thousands)
Non-interest-bearing deposits:
Demand checking accounts	$	942,583	19.3	%	—	%	$	900,474	19.5	%	—	%	$	799,117	18.6	%	—	%
Demand checking accounts
Demand checking accounts																				$	1,678,406		19.6		%		—		%		$	1,802,518			27.6	%			—	%		$	1,888,462				26.8	%			—	%
Interest-bearing deposits:																			Interest-bearing deposits:
NOW accounts	350,568		7.2	%	0.07	%	323,160		7.0	%	0.07	%	283,972		6.6	%	0.07	%	NOW accounts	661,863		7.8		7.8		%		0.60		%		544,118		8.3		8.3	%			0.18	%			604,097		8.6			8.6	%			0.08	%
Savings accounts	646,359		13.3	%	0.25	%	613,061		13.3	%	0.20	%	540,788		12.6	%	0.25	%	Savings accounts	1,669,018		19.5		19.5		%		2.63		%		762,271		11.7		11.7	%			0.70	%			915,804		13.0			13.0	%			0.09	%
Money market accounts	1,724,363		35.4	%	0.56	%	1,733,359		37.6	%	0.47	%	1,594,269		37.0	%	0.44	%	Money market accounts	2,082,810		24.4		24.4		%		3.07		%		2,174,952		33.4		33.4	%			1.63	%			2,358,306		33.5			33.5	%			0.26	%
Certificate of deposit accounts	1,207,470		24.8	%	1.27	%	1,041,022		22.6	%	1.04	%	1,087,872		25.2	%	0.93	%	Certificate of deposit accounts	1,574,855		18.4		18.4		%		3.88		%		928,143		14.2		14.2	%			1.68	%			1,117,695		15.9			15.9	%			0.71	%
Brokered deposit accounts																			Brokered deposit accounts	881,173			10.3		%		4.36		%		310,144				4.8	%			3.00	%		165,542					2.3	%			0.04	%
Total interest-bearing deposits	3,928,760		80.7	%	0.68	%	3,710,602		80.5	%	0.55	%	3,506,901		81.4	%	0.53	%	Total interest-bearing deposits	6,869,719		80.4		80.4		%		3.08		%		4,719,628		72.4		72.4	%			1.41	%			5,161,444		73.2			73.2	%			0.30	%
Total deposits	$	4,871,343	100.0	%	0.55	%	$	4,611,076	100.0	%	0.44	%	$	4,306,018	100.0	%	0.43	%	Total deposits	$	8,548,125	100.0		100.0		%		2.48		%		$	6,522,146	100.0		100.0	%			1.02	%			$	7,049,906	100.0			100.0	%			0.22	%

The Company seeks to increase its core ~~(non-certificate of deposit)~~ deposits and decrease its loan-to-deposit ratio over time, while continuing to increase deposits as a percentage of total funding sources. The Company's loan-to-deposit ratio ~~increased to 117.6%~~was 112.8% as of December 31, ~~2017, from 117.1%~~2023, compared to 117.2% as of December 31, ~~2016.~~2022.

Total deposits increased ~~$0.3~~$2.0 billion, or ~~5.6%~~31.1%, to ~~$4.9~~$8.5 billion as of December 31, ~~2017,~~2023, compared to ~~$4.6~~$6.5 billion as of December 31, ~~2016.~~2022. Deposits as a percentage of total assets increased from ~~71.6%~~71.0% as of December 31, ~~2016~~2022 to ~~71.8%~~75.1% as of December 31, ~~2017.~~2023. The increase in deposits as a percentage of total assets is ~~primarily~~ due to ~~the growth~~increases in all deposit accounts, except money market accounts.

In 2023, core deposits ~~primarily demand accounts, NOW accounts and MMDA accounts.~~

Asincreased $0.8 billion. The ratio of core deposits to total deposits decreased from 81.0% as of December 31, ~~2017, the Company had $274.7~~2022 to 71.3% as of December 31, 2023, as a result of increases in certificate of deposit and brokered deposit accounts.

Certificate of deposit accounts increased $646.7 million to $1.6 billion as of ~~brokered deposits~~December 31, 2023, compared to ~~$203.4~~$0.9 billion as of December 31, 2022. Certificate of deposit accounts increased as a percentage of total deposits to 18.4% as of December 31, 2023 from 14.2% as of December 31, 2022.

Brokered deposits increased $571.0 million to $881.2 million as of December 31, ~~2016.~~2023, compared to $310.1 million as of December 31, 2022. Brokered deposits increased as a percentage of total deposits to 10.3% as of December 31, 2023 from 4.8% as of December 31, 2022. The increase in brokered deposits was primarily driven by the purchase of brokered certificate of deposits. Brokered deposits allow the Company to seek additional funding by attracting deposits from outside the Company's core market. The Company's investment policy limits the amount of brokered deposits to 15% of total assets. Brokered deposits are included in the certificate of deposit balance, which increased $166.4 million, or 16.0%, during 2017. Certificates of deposit have also increased as a percentage of total deposits to 24.8% as of December 31, 2017 from 22.6% as of December 31, 2016.

In 2017, core deposits increased $93.8 million, or 2.6%. The ratio of core deposits to total deposits decreased from 77.4% as of December 31, 2016 to 75.2% as of December 31, 2017, primarily due to the shift in deposit mix and increase in brokered deposits.

The Company's growth in deposits and the shift in the mix of deposits in 2017 and 2016 were due in part to expansion of the Company's cash management services and increased efforts in seeking deposits from existing customer relationships. A rise in interest rates could cause a shift from core deposit accounts to certificate of deposit accounts with longer maturities. Generally, the rates paid on certificates of deposit are higher than those paid on core deposit accounts.

The following table sets forth the distribution of the average balances of the Company's deposit accounts for the years indicated and the weighted average interest rates on each category of deposits presented. Averages for the years presented are based on daily balances.

Table of Contents


	Year Ended December 31,
	2017						2016						2015
	Average Balance		Percent of Total Average Deposits		Weighted Average Rate		Average Balance		Percent of Total Average Deposits		Weighted Average Rate		Average Balance		Percent of Total Average Deposits		Weighted Average Rate
	(Dollars in Thousands)
	Year Ended December 31,																																																			Year Ended December 31,
	2023																															2023													2022													2021
	Average Balance																								Average Balance						Percent of Total Average Deposits						Weighted Average Rate						Average Balance				Percent of Total Average Deposits				Weighted Average Rate							Average Balance						Percent of Total Average Deposits					Weighted Average Rate
	(Dollars in Thousands)																																																			(Dollars in Thousands)
Core deposits:
Non-interest-bearing demand checking accounts
Non-interest-bearing demand checking accounts
Non-interest-bearing demand checking accounts	$	912,743	19.3	%	—	%	$	849,672	18.9	%	—	%	$	770,045	18.5	%	—	%	$	1,823,759			21.7			21.7		%				—		%				$	1,879,620			27.3		27.3	%			—	%				$	1,787,959			25.8				25.8		%			—		%
NOW accounts	322,681		6.8	%	0.07	%	294,318		6.5	%	0.07	%	249,204		6.0	%	0.07	%	NOW accounts		720,572			8.5				8.5		%				0.59		%				598,267			8.7		8.7	%			0.14	%					502,189				7.3				7.3	%				0.10	%
Savings accounts	620,757		13.1	%	0.21	%	578,855		12.9	%	0.23	%	532,496		12.8	%	0.21	%	Savings accounts		1,439,293			17.1				17.1		%				1.94		%				882,881			12.8		12.8	%			0.25	%					793,141				11.5				11.5	%				0.12	%
Money market accounts	1,761,112		37.2	%	0.50	%	1,670,609		37.2	%	0.45	%	1,560,437		37.6	%	0.44	%	Money market accounts		2,205,430			26.1				26.1		%				2.64		%				2,387,670			34.6		34.6	%			0.64	%					2,288,740				33.1				33.1	%				0.27	%
Total core deposits	3,617,293		76.4	%	0.29	%	3,393,454		75.5	%	0.27	%	3,112,182		74.9	%	0.26	%	Total core deposits		6,189,054			73.4				73.4		%				1.46		%				5,748,438			83.4		83.4	%			0.32	%					5,372,029				77.6				77.6	%				0.14	%
Certificate of deposit accounts	1,116,909		23.6	%	1.16	%	1,102,110		24.5	%	1.00	%	1,045,328		25.1	%	0.78	%	Certificate of deposit accounts		1,428,727			16.9				16.9		%				3.09		%				998,580			14.5		14.5	%			0.82	%					1,210,451				17.5				17.5	%				0.97	%
Brokered deposit accounts																			Brokered deposit accounts		819,419						9.7		%				5.02		%				146,038					2.1	%			1.99	%				338,734							4.9		%			0.38		%
Total deposits	$	4,734,202	100.0	%	0.49	%	$	4,495,564	100.0	%	0.44	%	$	4,157,510	100.0	%	0.44	%	Total deposits		$	8,437,200		100.0				100.0		%				2.08		%				$	6,893,056		100.0		100.0	%			0.43	%					$	6,921,214			100.0				100.0	%				0.30	%

As of December 31, ~~2017~~2023 and ~~2016,~~2022, the Company had outstanding certificate of deposit of ~~$100,000~~$250,000 or more, maturing as follows:


	At December 31,
	2023				2022
	Amount		Weighted Average Rate		Amount		Weighted Average Rate
	(Dollars in Thousands)
Maturity period:
Six months or less	$	291,049	4.02	%	$	108,100	1.32	%
Over six months through 12 months	163,277		4.59	%	62,489		1.82	%
Over 12 months	29,637		3.91	%	101,654		2.96	%
Total certificate of deposit of $250,000 or more	$	483,963	4.21	%	$	272,243	2.05	%

The following table presents the Company's insured and uninsured deposit mix at the date indicated.


	At December 31, 2023
	(Dollars in Millions)
	Commercial			Consumer			Municipal			Brokered			Total			%
Insured or Collateralized	$	2,048		$	3,085		$	239		$	881		$	6,253		73	%
Uninsured	1,315			958			22			—			2,295			27	%
Total	$	3,363		$	4,043		$	261		$	881		$	8,548		100	%
Composition	39		%	47		%	3		%	10		%	100		%

As of December 31, 2023, the Company had uninsured municipal deposits requiring collateral of $148.1 million, included in Insured or Collateralized in the table above, which are covered by specific collateral and FHLB letters of credit. The remaining deposits, included in Insured or Collateralized in the table above, are insured with the FDIC or via reciprocal products.

At December 31,
2017 2016
Amount
Weighted
Average Rate
Amount
Weighted
Average Rate
(Dollars in Thousands)
Maturity period:
Six months or less $ 157,263
0.96 % $ 134,783
0.82 %
Over six months through 12 months 134,297
1.08 % 79,543
0.92 %
Over 12 months 244,348
1.73 % 222,342
1.44 %
Total certificate of deposit of $100,000 or more $ 535,908
1.34 % $ 436,668
1.15 %

Table of Contents

Borrowed Funds

The following table sets forth certain information regarding ~~FHLBB~~FHLB advances, subordinated debentures and notes and other borrowed funds for the periods indicated:

Year Ended December 31,
2017 2016 2015
(Dollars in Thousands)
Borrowed funds:
Average balance outstanding $ 1,013,360
$ 1,006,200
$ 957,437
Maximum amount outstanding at any month end during the year 1,093,693
1,059,885
1,094,459
Balance outstanding at end of year 1,020,819
1,044,086
983,029
Weighted average interest rate for the period 1.61 % 1.56 % 1.55 %
Weighted average interest rate at end of period 1.82 % 1.58 % 1.55 %


	Year Ended December 31,
	2023			2022			2021
	(Dollars in Thousands)
Borrowed funds:
Average balance outstanding	$	1,301,905		$	542,923		$	404,814
Maximum amount outstanding at any month end during the year	1,630,102			1,432,652			686,346
Balance outstanding at end of year	1,376,670			1,432,652			357,321
Weighted average interest rate for the period	4.69		%	2.87		%	2.06		%
Weighted average interest rate at end of period	5.01		%	4.41		%	1.70		%

Advances from the ~~FHLBB~~FHLB of Boston and FHLB of New York

On a long-term basis, the Company intends to continue to increase its core deposits. The Company also uses ~~FHLBB~~FHLB borrowings and other wholesale borrowings as part of the Company's overall strategy to fund loan growth and manage interest-rate risk and liquidity. The advances are secured by a blanket security agreement which requires the Banks to maintain certain qualifying assets as collateral, principally mortgage loans and securities in an aggregate amount at least equal to outstanding advances. The maximum amount that the ~~FHLBB~~FHLBs will advance to member institutions, including the Company, fluctuates from time to time in accordance with the policies of the ~~FHLBB.~~FHLBs. The Company may also borrow from the FRB's "discount window" as necessary.

~~FHLBB~~FHLB borrowings decreased ~~by $20.9~~$14.6 million to ~~$889.9 million~~$1.22 billion as of December 31, ~~2017~~2023 from ~~the~~$1.24 billion as of December 31, ~~2016 balance of $910.8 million.~~2022. The decrease in ~~FHLBB~~FHLB borrowings was primarily due to ~~maturing advances~~lower liquidity needs. The Company's remaining borrowing capacity from the ~~FHLBB.~~FHLB of Boston and FHLB of New York for advances and repurchase agreements was $1.3 billion as of December 31, 2023.

Other Borrowed Funds

In addition to advances from the ~~FHLBB~~FHLB and subordinated debentures and notes, the Company utilizes other funding

sources as part of the overall liquidity strategy. Those funding sources include repurchase agreements and committed and uncommitted lines of credit with several financial institutions.

The Company periodically enters into repurchase agreements with its larger deposit and commercial customers as part of its cash management services which are typically overnight borrowings. Repurchase agreements with customers decreased

$~~12.6 million~~42.7 million to ~~$37.6 million~~$9.3 million as of December 31, ~~2017~~2023 from ~~$50.2~~$52.0 million as of December 31, ~~2016.~~2022.

As of December 31, 2023, the Banks also have access to funding through certain uncommitted lines via American Financial Exchange ("AFX") as well as other large financial institution specific lines.

The Company has access to ~~a $12.0~~the FRB's "discount window" to supplement its liquidity. The Company has $273.0 million ~~committed line~~ of ~~credit~~borrowing capacity at the FRB as of December 31, ~~2017.~~2023. As of December 31, ~~2017 and December 31, 2016,~~2023, the Company did not have any borrowings ~~on this committed line~~with the FRB outstanding. As of ~~credit outstanding.~~

~~The Banks also have access to funding through several uncommitted lines of credit of $203.0 million. As of~~

December 31, ~~2017~~2023, the Company had ~~$10.0 million in~~no borrowings on outstanding with these committed and uncommitted ~~lines as compared to December 31, 2016, when the Company did not have any borrowings on these uncommitted lines of credit.~~lines.

Subordinated Debentures and Notes

In connection with the acquisition of Bancorp Rhode Island, Inc., the Company assumed three subordinated debentures issued by a subsidiary of Bancorp Rhode Island, Inc. ~~One of these subordinated debenture in the amount of $3.0 million was called in the first quarter of 2013 due to its high fixed rate.~~

On September 15, 2014, the Company offered $75.0 million of 6.0% fixed-to-floating subordinated notes due September

15, 2029. The Company is obligated to pay 6.0% interest semiannually between September 2014 and September 2024. Subsequently, the Company is obligated to pay 3-month LIBOR plus 3.315% quarterly until the notes mature in September 2029. As of December 31, ~~2017,~~2023, the Company had capitalized costs of ~~$1.2~~$0.6 million in relation to the issuance of these subordinated notes.

Table of Contents

The following table summarizes the Company's subordinated debentures and notes at the dates indicated.

Carrying Amount

Issue Date

Rate

Maturity Date

Next Call Date

December 31, 2023

December 31, 2022

(Dollars in Thousands)

June 26, 2003

Variable;
3-month SOFR + 3.10%

June 26, 2033

March 25, 2024

4,904

4,887

March 17, 2004

Variable;
3-month CME term SOFR + tenor spread adjustment + 2.79%

March 17, 2034

March 17, 2024

4,857

4,830

September 15, 2014

6.0% Fixed-to-Variable;
3-month LIBOR + 3.315%

September 15, 2029

September 15, 2024

74,427

74,327

Total

84,188

84,044

Carrying Amount
Issue Date Rate Maturity Date Next Call Date December 31, 2017 December 31, 2016
(Dollars in Thousands)
June 26, 2003
Variable;
3-month LIBOR + 3.10%
June 26, 2033 March 26, 2018 $ 4,778
$ 4,752
March 17, 2004
Variable;
3-month LIBOR + 2.79%
March 17, 2034 March 19, 2018 4,668
4,628
September 15, 2014
6.0% Fixed-to-Variable;
3-month LIBOR + 3.315%
September 15, 2029 September 15, 2024 73,825
73,725
Total $ 83,271
$ 83,105

Derivative Financial Instruments

The Company has entered into loan level derivatives, risk participation agreements, and foreign exchange contracts with certain ~~of its~~ commercial customers and concurrently enters into offsetting swaps with third-party financial institutions. The Company may also, from time to time, enter into risk participation agreements. The Company ~~did not have derivative fair value hedges or derivative~~uses interest rate futures that are designated and qualify as cash flow ~~hedges at December 31, 2017 or 2016.~~ hedging instruments.

The following table summarizes certain information concerning the Company's loan level derivatives, risk participation agreements, and foreign exchange contracts at

December 31, ~~2017~~2023 and ~~2016:~~2022:


	At December 31, 2023			At December 31, 2022
	(Dollars in Thousands)
Interest rate derivatives (Notional amounts):	$	225,000		$	150,000
Loan level derivatives (Notional Amount):
Receive fixed, pay variable	$	1,733,198		$	1,489,709
Pay fixed, receive variable	1,733,198			1,489,709
Risk participation-out agreements	542,387			393,624
Risk participation-in agreements	100,313			75,223
Foreign exchange contracts (Notional Amount)
Buys foreign currency, sells U.S. currency	$	3,262		$	2,383
Sells foreign currency, buys U.S. currency	3,895			2,400
Fixed weighted average interest rate of the swap portfolio	2.96		%	2.65		%
Floating weighted average interest rate of the swap portfolio	5.70		%	4.68		%
Weighted average remaining term to maturity (in months)	75			69
Fair value:
Recognized as an asset:
Interest rate derivatives	$	234		$	34
Loan level derivatives	99,876			108,963
Risk participation-out agreements	1,238			347
Foreign exchange contracts	139			130
Recognized as a liability:
Interest rate derivatives	$	2,842		$	3,170
Loan level derivatives	99,876			108,963
Risk participation-in agreements	310			31
Foreign exchange contracts	132			112

At December 31, 2017 At December 31, 2016
(Dollars in Thousands)
Loan level derivatives:
Receive fixed, pay variable $ 494,659
$ 383,780
Pay fixed, receive variable 494,659
383,780
Risk participation-out agreements 36,627
16,961
Risk participation-in agreements 3,825
—
Foreign exchange contracts (Notional Amount)
Buys foreign currency, sells U.S. currency $ 1,495
$ 195
Sells foreign currency, buys U.S. currency 1,502
195
Fixed weighted average interest rate from the Company to counterparty 4.17 % 4.13 %
Floating weighted average interest rate from counterparty to the Company 3.19 % 2.77 %
Weighted average remaining term to maturity (in months) 81
91
Fair value:
Recognized as an asset:
Loan level derivatives $ 8,865
$ 9,738
Risk participation-out agreements 65
20
Foreign exchange contracts 72
—
Recognized as a liability:
Loan level derivatives $ 8,865
$ 9,738
Risk participation-in agreements 10
—
Foreign exchange contracts 65
—

Table of ~~December 31, 2016, the Company held no risk participation-in agreements and the fair value of the foreign exchange contracts was nominal.~~Contents

Stockholders' Equity and Dividends

The Company's total stockholders' equity was ~~$803.8~~$1,198.6 million as of December 31, ~~2017,~~2023, representing a ~~$108.3~~$206.5 million increase compared to ~~$695.5~~$992.1 million at December 31, ~~2016.~~2022. The increase ~~is due to net income of $50.5 million~~ for the ~~year~~twelve months ended December 31, ~~2017, issuance~~2023, primarily reflects the acquisition of ~~common stock~~PCSB of ~~$81.9~~$167 million, ~~an increase~~net income attributable to the Company of ~~$3.4~~$75.0 million, ~~related to stock-based compensation, which was~~unrealized gain on securities available-for-sale of $7.6 million, partially offset by dividends paid by the Company of ~~$27.0 million in 2017.~~

On, April 27, 2017, the Company entered into an underwriting agreement with Piper Jaffray & Co., as representative of the underwriters named therein (collectively, the “Underwriters”), to offer and sell 5,175,000 shares of the Company’s common stock, $0.01 par value per share at a public offering price of $14.50 per share in an underwritten public offering (the “Offering”). In conjunction with the Offering, the Company granted the Underwriters a 30-day option to purchase up to an additional 776,250 shares of its common stock. On May 2, 2017, the Company and the Underwriters closed the Offering. The Underwriters exercised their option resulting in a new issuance in the aggregate of 5,951,250 shares of the Company’s common stock at a price to the public of $14.50 per share. The Company received net proceeds of $82.0 million after deductions for underwriting discounts, commissions, and expenses.$47.9 million.

For the year ended December 31, ~~2017,~~2023, the dividend payout ratio was ~~53.5%~~63.9%, compared to ~~48.4%~~36.5% for the year ended December 31, ~~2016.~~2022. The dividends paid in the fourth quarter of ~~2017~~2023 represented the Company's 7599th consecutive quarter of dividend payments. The Company's quarterly dividend distribution was ~~$0.09~~$0.135 per share ~~in 2017.~~

~~In 2017, 2016 and 2015, no shares~~for each quarter of the Company's common stock were repurchased by the Company. On February 4, 2016, the Company's Board of Directors authorized a stock repurchase program to acquire up to $10.0 million of total outstanding shares of the Company's common stock over a period of twelve months ending on January 31, 2017. Repurchases may be made from time to time depending on market conditions and other factors, and will be conducted through open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with the Securities and Exchange Commission Rule 10b5-1. There is no guarantee as to the exact number of shares, if any, to be repurchased by the Company. As of December 31, 2017, no shares of stock were repurchased under the stock repurchase program.

2023.

Stockholders' equity represented ~~11.86%~~10.53% of total assets as of December 31, ~~2017~~2023 and 10.80% of total assets as of December 31, ~~2016.~~2022. Tangible stockholders' equity (total stockholders' equity less goodwill and identified intangible assets, net) represented ~~9.94%~~8.39% of tangible assets (total assets less goodwill and identified intangible assets, net) as of December 31, ~~2017~~2023 and ~~8.73%~~9.20% as of December 31, ~~2016.~~2022.

On November 10, 2021, the Company's Board of Directors (the "Board") approved a stock repurchase program authorizing management to repurchase up to $20.0 million of the Company's common stock, commencing on November 15, 2021 and ending on December 31, 2022. On June 24, 2022, the Company suspended the program. As of June 24, 2022, 956,341 shares of the Company's common stock were repurchased by the Company at the weighted average price of $14.41.

Results of Operations

The primary drivers of the Company's net income are net interest income, which is strongly affected by the net yield on and growth of interest-earning assets and liabilities ("net interest margin"), the quality of the Company's assets, its levels of non-interest income and non-interest expense, and its tax provision.

The Company's net interest income represents the difference between interest income earned on its investments, loans and leases, and its cost of funds. Interest income is dependent on the amount of interest-earning assets outstanding during the period and the yield earned thereon. Cost of funds is a function of the average amount of deposits and borrowed money outstanding during the year and the interest rates paid thereon. The net interest margin is calculated by dividing net interest income by average interest-earning assets. Net interest spread is the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. The increases or decreases, as applicable, in the components of interest income and interest expense, expressed in terms of fluctuation in average volume and rate, are summarized under "Rate/Volume Analysis" below. Information as to the components of interest income, interest expense and average rates is provided under "Average Balances, Net Interest Income, Interest-Rate Spread and Net Interest Margin" below.

Because the Company's assets and liabilities are not identical in duration and in repricing dates, the differential between the two is vulnerable to changes in market interest rates as well as the overall shape of the yield curve. These vulnerabilities are inherent to the business of banking and are commonly referred to as "interest-rate risk." How interest-rate risk is measured and, once measured, how much interest-rate risk is taken are based on numerous assumptions and other subjective judgments. See the discussion in the "Measuring Interest-Rate Risk" section of Item 7A, "Quantitative and Qualitative Disclosures about Market Risk" below.

The quality of the Company's assets also influences its earnings. Loans and leases that are not paid on a timely basis and exhibit other weaknesses can result in the loss of principal and/or interest income. Additionally, the Company must make timely provisions to the allowance for loan and lease losses based on estimates of probable losses inherent in the loan and lease portfolio. These additions, which are charged against earnings, are necessarily greater when greater probable losses are expected. Further, the Company incurs expenses as a result of resolving troubled assets. These variables reflect the "credit risk" that the Company takes on in the ordinary course of business and are further discussed under "Financial Condition—Asset Quality" above.

Average Balances, Net Interest Income, Interest-Rate Spread and Net Interest Margin

The following table sets forth information about the Company's average balances, interest income and interest rates earned on average interest-earning assets, interest expense and interest rates paid on average interest-bearing liabilities, interest-rate spread and net interest margin for the years ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015.~~2021. Average balances are derived from daily average balances and yields include fees, costs and purchase-accounting-related premiums and discounts which are considered adjustments to coupon yields in accordance with GAAP. ~~Certain amounts previously reported have been reclassified to conform to the current presentation.~~

Table of Contents


	Year Ended December 31,
	2017							2016							2015
	Average Balance			Interest (1)		Average Yield/ Cost		Average Balance			Interest (1)		Average Yield/ Cost		Average Balance			Interest (1)		Average Yield/ Cost
	(Dollars in Thousands)
	Year Ended December 31,																																																																		Year Ended December 31,
	2023																																			2023																				2022																	2021
	Average Balance																										Average Balance								Interest (1)							Average Yield/ Cost									Average Balance							Interest (1)						Average Yield/ Cost									Average Balance									Interest (1)								Average Yield/ Cost
	(Dollars in Thousands)																																																																		(Dollars in Thousands)
Assets:
Interest-earning assets:
Interest-earning assets:
Interest-earning assets:
Debt securities
Debt securities
Debt securities	$	634,930		$	12,964	2.04	%	$	605,097		$	12,055	1.99	%	$	583,921		$	11,521	1.97	%	$	947,782		$			$	29,891			3.15				3.15		%							$	706,580			$				$	13,079			1.85			1.85	%							$	729,147			$					$	12,178			1.67					1.67		%
Marketable and restricted equity securities	65,992			3,065		4.64	%	66,738			3,017		4.52	%	73,808			2,793		3.78	%	Marketable and restricted equity securities		72,264		5,572					5,572				7.71				7.71		%							36,813				1,898					1,898		5.15				5.15		%							34,074				1,172						1,172			3.44						3.44	%
Short-term investments	40,847			442		1.08	%	54,205			242		0.45	%	56,520			128		0.23	%	Short-term investments		158,718		8,329					8,329				5.25				5.25		%							104,288				1,440					1,440		1.38				1.38		%							217,784				252						252			0.12						0.12	%
Total investments	741,769			16,471		2.22	%	726,040			15,314		2.11	%	714,249			14,442		2.02	%	Total investments		1,178,764		43,792					43,792				3.72				3.72		%							847,681				16,417					16,417		1.94				1.94		%							981,005				13,602						13,602			1.39						1.39	%
Commercial real estate loans ⁽²⁾	2,968,673			123,000		4.09	%	2,811,487			113,910		3.99	%	2,529,566			106,447		4.21	%	Commercial real estate loans (2)		5,654,385		307,652					307,652				5.37				5.37		%							4,238,960				172,811					172,811		4.02				4.02		%							3,854,357				139,451						139,451			3.57						3.57	%
Commercial loans ⁽²⁾	739,369			30,904		4.13	%	695,057			27,509		3.90	%	636,084			26,590		4.13	%	Commercial loans (2)		929,077		59,110					59,110				6.28				6.28		%							744,972				34,105					34,105		4.52				4.52		%							1,020,627				47,647						47,647			4.61						4.61	%
Equipment financing ⁽²⁾	830,755			55,164		6.64	%	748,626			48,217		6.44	%	650,376			44,468		6.84	%	Equipment financing (2)		1,277,224		92,112					92,112				7.21				7.21		%							1,148,673				75,767					75,767		6.60				6.60		%							1,081,287				71,906						71,906			6.65						6.65	%
Residential mortgage loans ⁽²⁾	645,925			23,593		3.65	%	624,994			22,217		3.55	%	600,072			21,455		3.58	%
Other consumer loans ⁽²⁾	366,713			15,328		4.18	%	353,600			13,864		3.91	%	395,073			14,478		3.66	%
Consumer loans (2)																						Consumer loans (2)		1,470,677						75,098							5.10		%							1,199,804								46,295						3.86	%							1,157,940									39,142								3.38		%
Total loans and leases	5,551,435			247,989		4.47	%	5,233,764			225,717		4.31	%	4,811,171			213,438		4.44	%	Total loans and leases		9,331,363		533,972					533,972				5.72				5.72		%							7,332,409				328,978					328,978		4.49				4.49		%							7,114,211				298,146						298,146			4.19						4.19	%
Total interest-earning assets	6,293,204			264,460		4.20	%	5,959,804			241,031		4.04	%	5,525,420			227,880		4.12	%	Total interest-earning assets		10,510,127		577,764					577,764				5.50				5.50		%							8,180,090				345,395					345,395		4.22				4.22		%							8,095,216				311,748						311,748			3.85						3.85	%
Allowance for loan and lease losses	(62,972		)					(58,071		)					(55,950		)
Non-interest-earning assets	377,002							377,989							371,279
Non-interest-earning assets
Non-interest-earning assets
Total assets
Total assets
Total assets	$	6,607,234						$	6,279,722						$	5,840,749
Liabilities and Stockholders' Equity:
Liabilities and Stockholders' Equity:
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing liabilities:
Interest-bearing liabilities:
Interest-bearing deposits:
Interest-bearing deposits:
Interest-bearing deposits:
NOW accounts
NOW accounts
NOW accounts	$	322,681		225		0.07	%	$	294,318		209		0.07	%	$	249,204		179		0.07	%	$	720,572		4,275				4,275				0.59				0.59		%							$	598,267			853					853			0.14			0.14		%							$	502,189			493						493				0.10					0.10		%
Savings accounts	620,757			1,297		0.21	%	578,855			1,322		0.23	%	532,496			1,094		0.21	%	Savings accounts		1,439,293		27,974					27,974				1.94				1.94		%							882,881				2,228					2,228		0.25				0.25		%							793,141				950						950			0.12						0.12	%
Money market accounts	1,761,112			8,863		0.50	%	1,670,609			7,549		0.45	%	1,560,437			6,935		0.44	%	Money market accounts		2,205,430		58,153					58,153				2.64				2.64		%							2,387,670				15,392					15,392		0.64				0.64		%							2,288,740				6,214						6,214			0.27						0.27	%
Certificate of deposit	1,116,909			12,903		1.16	%	1,102,110			10,990		1.00	%	1,045,328			9,272		0.89	%
Certificate of deposit accounts																						Certificate of deposit accounts		1,428,727						44,122							3.09		%							998,580								8,210						0.82	%							1,210,451									11,758								0.97		%
Brokered deposit accounts																						Brokered deposit accounts		819,419						41,141							5.02		%							146,038								2,909						1.99	%							338,734									1,298								0.38		%
Total interest-bearing deposits ⁽³⁾	3,821,459			23,288		0.61	%	3,645,892			20,070		0.55	%	3,387,465			17,480		0.52	%	Total interest-bearing deposits (3)		6,613,441		175,665					175,665				2.66				2.66		%							5,013,436				29,592					29,592		0.59				0.59		%							5,133,255				20,713						20,713			0.40						0.40	%
Advances from the FHLBB	884,266			11,330		1.26	%	879,650			10,760		1.20	%	840,123			9,950		1.17	%
Advances from the FHLB																						Advances from the FHLB		1,092,996						52,467							4.73		%							340,569								9,355						2.71	%							232,175									3,302								1.40		%
Subordinated debentures and notes	83,186			5,081		6.11	%	83,017			5,038		6.07	%	82,846			5,001		6.04	%	Subordinated debentures and notes		84,116		5,476					5,476				6.51				6.51		%							83,971				5,133					5,133		6.11				6.11		%							83,821				4,967						4,967			5.93						5.93	%
Other borrowed funds	45,908			170		0.37	%	43,533			116		0.27	%	34,468			114		0.33	%	Other borrowed funds		124,793		3,968					3,968				3.18				3.18		%							118,383				1,335					1,335		1.13				1.13		%							88,818				174						174			0.20						0.20	%
Total borrowed funds	1,013,360			16,581		1.61	%	1,006,200			15,914		1.56	%	957,437			15,065		1.55	%	Total borrowed funds		1,301,905		61,911					61,911				4.69				4.69		%							542,923				15,823					15,823		2.87				2.87		%							404,814				8,443						8,443			2.06						2.06	%
Total interest-bearing liabilities	4,834,819			39,869		0.82	%	4,652,092			35,984		0.77	%	4,344,902			32,545		0.75	%	Total interest-bearing liabilities		7,915,346		237,576					237,576				3.00				3.00		%							5,556,359				45,415					45,415		0.82				0.82		%							5,538,069				29,156						29,156			0.53						0.53	%
Non-interest-bearing liabilities:																						Non-interest-bearing liabilities:
Non-interest-bearing demand checking accounts ⁽³⁾	912,743							849,672							770,045							Non-interest-bearing demand checking accounts (3)		1,823,759																					1,879,620																					1,787,959
Other non-interest-bearing liabilities	78,965							82,073							62,914							Other non-interest-bearing liabilities		307,160																					203,187																					224,634
Total liabilities	5,826,527							5,583,837							5,177,861							Total liabilities		10,046,265																					7,639,166																					7,550,662
Brookline Bancorp, Inc. stockholders' equity	773,244							689,556							657,841
Noncontrolling interest in subsidiary	7,463							6,329							5,047
Stockholders' equity																						Stockholders' equity		1,168,106																			984,237																			967,538

Total liabilities and equity
Total liabilities and equity
Total liabilities and equity	$	6,607,234						$	6,279,722						$	5,840,749						$	11,214,371																				$	8,623,403																				$	8,518,200
Net interest income (tax-equivalent basis) / Interest-rate spread ⁽⁴⁾				224,591		3.38	%				205,047		3.27	%				195,335		3.37	%	Net interest income (tax-equivalent basis) / Interest-rate spread (4)								340,188				2.50				2.50		%															299,980			3.40			3.40		%																282,592				3.32					3.32		%
Less adjustment of tax-exempt income				1,410							1,383							970				Less adjustment of tax-exempt income								477																										209																									219
Net interest income				$	223,181						$	203,664						$	194,365			Net interest income								$	339,711																						$	299,771																					$	282,373
Net interest margin ⁽⁵⁾						3.57	%						3.44	%						3.54	%	Net interest margin (5)															3.24		%																					3.67	%																								3.49		%

(1) Tax-exempt income on debt securities, equity securities and industrial revenue bonds are included in commercial real estate loans on a tax-equivalent basis.

(2) Loans on nonaccrual status are included in the average balances.

(3) Including non-interest-bearing checking accounts, the average interest rate on total deposits was ~~0.49%~~2.08%, ~~0.45%~~0.43% and ~~0.42%~~0.30% in the years ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015,~~2021, respectively.

(4) Interest-rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.

(5) Net interest margin represents net interest income (tax equivalent basis) divided by average interest-earning assets.

See "Comparison of Years Ended December 31, ~~2017~~2023 and December 31, ~~2016"~~2022" and "Comparison of Years Ended December 31, ~~2016~~2022 and December 31, ~~2015"~~2021" below for a discussion of average assets and liabilities, net interest income, interest-rate spread and net interest margin.

Table of Contents

Rate/Volume Analysis

The following table presents, on a tax-equivalent basis, the extent to which changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities have affected the Company's interest income and interest expense during the periods indicated. Information is provided in each category with respect to: (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.


	Year Ended December 31, 2023 Compared to Year Ended December 31, 2022						Year Ended December 31, 2022 Compared to Year Ended December 31, 2021
	Increase (Decrease) Due To						Increase (Decrease) Due To
	Volume		Rate		Net Change		Volume		Rate		Net Change
	(In Thousands)
Interest and dividend income:
Investments:
Debt securities	$	5,497	$	11,315	$	16,812	$	(385)	$	1,286	$	901
Marketable and restricted equity securities	2,423		1,251		3,674		101		625		726
Short-term investments	1,081		5,808		6,889		(203)		1,391		1,188
Total investments	9,001		18,374		27,375		(487)		3,302		2,815
Loans and leases:
Commercial real estate loans	67,228		67,613		134,841		14,740		18,620		33,360
Commercial loans and leases	9,708		15,297		25,005		(12,629)		(913)		(13,542)
Equipment financing	8,952		7,393		16,345		4,410		(549)		3,861

Consumer loans	11,098		17,705		28,803		1,454		5,699		7,153
Total loans	96,986		108,008		204,994		7,975		22,857		30,832
Total change in interest and dividend income	105,987		126,382		232,369		7,488		26,159		33,647
Interest expense:
Deposits:
NOW accounts	205		3,217		3,422		116		244		360
Savings accounts	2,196		23,550		25,746		121		1,157		1,278
Money market accounts	(1,258)		44,019		42,761		281		8,897		9,178
Certificate of deposit accounts	4,836		31,076		35,912		(1,884)		(1,664)		(3,548)
Brokered deposit accounts	28,741		9,491		38,232		(1,100)		2,711		1,611
Total deposits	34,720		111,353		146,073		(2,466)		11,345		8,879
Borrowed funds:
Advances from the FHLB	32,236		10,876		43,112		2,015		4,038		6,053
Subordinated debentures and notes	9		334		343		9		157		166
Other borrowed funds	76		2,557		2,633		78		1,083		1,161
Total borrowed funds	32,321		13,767		46,088		2,102		5,278		7,380
Total change in interest expense	67,041		125,120		192,161		(364)		16,623		16,259
Change in tax-exempt income	268		—		268		(10)		—		(10)
Change in net interest income	$	38,678	$	1,262	$	39,940	$	7,862	$	9,536	$	17,398

Year Ended
December 31, 2017
Compared to Year Ended
December 31, 2016 Year Ended
December 31, 2016
Compared to Year Ended
December 31, 2015

Increase
(Decrease) Due To

Increase
(Decrease) Due To

Volume Rate Net Change Volume Rate Net Change
(In Thousands)
Interest and dividend income:
Investments:
Debt securities $ 602
$ 307
$ 909
$ 417
$ 117
$ 534
Marketable and restricted equity securities (33 ) 81
48
(267 ) 491
224
Short-term investments (72 ) 272
200
(5 ) 119
114
Total investments 497
660
1,157
145
727
872
Loans and leases:
Commercial real estate loans 6,276
2,814
9,090
11,869
(4,406 ) 7,463
Commercial loans and leases 1,764
1,631
3,395
2,436
(1,517 ) 919
Equipment financing 5,414
1,533
6,947
6,720
(2,971 ) 3,749
Residential mortgage loans 747
629
1,376
892
(130 ) 762
Other consumer loans 512
952
1,464
(1,162 ) 548
(614 )
Total loans 14,713
7,559
22,272
20,755
(8,476 ) 12,279
Total change in interest and dividend income 15,210
8,219
23,429
20,900
(7,749 ) 13,151
Interest expense:
Deposits:
NOW accounts 16
—
16
32
(2 ) 30
Savings accounts 94
(119 ) (25 ) 97
131
228
Money market accounts 431
883
1,314
485
129
614
Certificate of deposit 148
1,765
1,913
326
1,392
1,718
Total deposits 689
2,529
3,218
940
1,650
2,590
Borrowed funds:
Advances from the FHLBB 54
516
570
462
348
810
Subordinated debentures and notes 10
33
43
10
27
37
Other borrowed funds 7
47
54
30
(28 ) 2
Total borrowed funds 71
596
667
502
347
849
Total change in interest expense 760
3,125
3,885
1,442
1,997
3,439
Change in tax-exempt income 27
—
27
—
413
413
Change in net interest income $ 14,423
$ 5,094
$ 19,517
$ 19,458
$ (9,333 ) $ 10,125

See "Comparison of Years Ended December 31, ~~2017~~2023 and December 31, ~~2016"~~2022" and "Comparison of Years Ended December 31, ~~2016~~2022 and December 31, ~~2015"~~2021" below for a discussion of changes in interest income, interest-rate spread and net interest margin resulting from changes in rates and volumes.

Table of Contents

Comparison of Years Ended December 31, ~~2017~~2023 and December 31, ~~2016~~2022

Net Interest Income

Net interest income increased ~~$19.5~~$39.9 million to ~~$223.2~~$339.7 million for the year ended December 31, ~~2017~~2023 from ~~$203.7~~$299.8 million for the year ended December 31, ~~2016.~~2022. The increase year over year reflects a ~~$22.3~~$205.0 million increase in interest income on loans and leases, ~~and~~along with a ~~$0.8~~$27.1 million increase in interest income on debt securities, ~~partially~~short term investments and restricted equity securities, offset by a ~~$3.9~~$192.2 million increase in interest expense on ~~deposit~~deposits and borrowings, which is reflective of the ~~various portfolios repricing~~increase in volume and ~~replacing balances into the current low~~rising interest rate environment.

Net interest margin ~~increased~~decreased by 1343 basis points to ~~3.57%~~3.24% in ~~2017~~2023 from ~~3.44%~~3.67% in ~~2016.~~2022. The Company's weighted average interest rate on loans (prior to purchase accounting adjustments) increased to ~~4.47%~~5.72% for the year ended December 31, ~~2017~~2023 from ~~4.31%~~4.49% for the year ended December 31, 2016. Interest amortization and accretion on acquired loans totaled $0.8 million and contributed 1 basis point to 2017 loan yields, compared to $1.5 million and 3 basis points in 2016. The increase in the net interest margin is the result of repricing and originating interest-earning assets in a higher rate environment, partially offset by an increase in funding costs.2022.

The yield on interest-earning assets increased to ~~4.20%~~5.50% for the year ended December 31, ~~2017~~2023 from ~~4.04%~~4.22% for the year ended December 31, ~~2016.~~2022. The increase is the result of higher yields on loans and leases and investments. The Company recorded $2.9 million in prepayment penalties and late charges, which contributed 3 basis points to yields on interest-earning assets for the year ended December 31, 2023 compared to $4.8 million, or 6 basis points, for the year ended December 31, 2022.

The cost of funds increased 218 basis points to 3.00% for the year ended December 31, 2023 from 0.82% for the year ended December 31, 2022. Refer to "Financial Condition - Borrowed Funds" above for more details.

Management seeks to position the balance sheet to be neutral to assets sensitive changes in interest rates. From 2017 through 2019, short term interest rates rose while at the same time net interest income, net interest spread, and net interest margin also increased. During 2020, interest rates declined sharply in response to the economic impact of the COVID-19 pandemic, and began to increase in the first quarter of 2022. In recent months, the Treasury yield curve has inverted and flattened at the long end. Short term rates have risen sharply due to multiple rate hikes implemented by the FRB. The shape of the curve indicates rates will begin to decline within a year and flatten around the 7-year mark. The short term increase in rates positively affected the Company's net interest income, net interest spread, and net interest margin initially. As is expected in the near term, the net interest margin is compressing as deposit pricing "catches up" and investable funds migrate among depository and non-depository categories. Management expects this to persist for a quarter or two after the FRB stops increasing rates, after which time net interest margin is expected to stabilize and then increase as loans continue to reprice into the higher rate environment. To the extent that the FRB cuts rates in the near term, net interest income and net interest margin will be highly dependent on the ability to move deposit pricing down in the same magnitude of the cuts to achieve margin expansion.

Interest Income—Loans and Leases


	Year Ended December 31,				Dollar Change		Percent Change
	2023		2022
	(Dollars in Thousands)
Interest income—loans and leases:
Commercial real estate loans	$	307,652	$	172,811	$	134,841	78.0	%
Commercial loans	58,878		33,896		24,982		73.7	%
Equipment financing	92,112		75,767		16,345		21.6	%
Residential mortgage loans	46,350		29,726		16,624		55.9	%
Other consumer loans	28,747		16,569		12,178		73.5	%
Total interest income—loans and leases	$	533,739	$	328,769	$	204,970	62.3	%

Interest income from loans and leases was $533.7 million for 2023, and represented a yield on total loans of 5.72%. This compares to $328.8 million of interest on loans and leases and a yield of 4.49% for 2022. The $205.0 million increase in interest income from loans and leases was driven by the acquisition of PCSB Bank, along with an increase of $97.0 million in origination volume, and an increase of $108.0 million in interest rates changes.

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Interest Income—Investments


	Year Ended December 31,				Dollar Change		Percent Change
	2023		2022
	(Dollars in Thousands)
Interest income—investments:
Debt securities	$	29,648	$	13,079	$	16,569	126.7	%
Marketable and restricted equity securities	5,571		1,898		3,673		193.5	%
Short-term investments	8,329		1,440		6,889		478.4	%
Total interest income—investments	$	43,548	$	16,417	$	27,131	165.3	%

Total investment income was $43.5 million for the year ended December 31, 2023 compared to $16.4 million for the year ended December 31, 2022. As of December 31, 2023, the yield on total investments was 3.72% compared to 1.94% as of December 31, 2022. This year over year increase in total investment income of $27.1 million, or 165.3%, was driven by a $18.4 million increase due to rates and a $9.0 million increase due to volume.

Interest Expense—Deposits and Borrowed Funds


	Year Ended December 31,				Dollar Change		Percent Change
	2023		2022
	(Dollars in Thousands)
Interest expense:
Deposits:
NOW accounts	$	4,275	$	853	$	3,422	401.2	%
Savings accounts	27,974		2,228		25,746		1155.6	%
Money market accounts	58,153		15,392		42,761		277.8	%
Certificate of deposit accounts	44,122		8,210		35,912		437.4	%
Brokered deposit accounts	41,141		2,909		38,232		1,314.3	%
Total interest expense—deposits	175,665		29,592		146,073		493.6	%
Borrowed funds:
Advances from the FHLB	52,467		9,355		43,112		460.8	%
Subordinated debentures and notes	5,476		5,133		343		6.7	%
Other borrowed funds	3,968		1,335		2,633		197.2	%
Total interest expense—borrowed funds	61,911		15,823		46,088		291.3	%
Total interest expense	$	237,576	$	45,415	$	192,161	423.1	%

Deposits

In 2023, interest paid on deposits increased $146.1 million, or 493.6%, compared to 2022. The increase in interest expense on deposits was driven by an increase of $111.4 million due to higher interest rates and an increase of $34.7 million primarily driven by the growth in volume of average brokered deposits and certificate of deposit balances. For the year ended December 31, 2023, purchase accounting amortization was $1.3 million on acquired deposits and one basis point. The Company did not record any purchase accounting amortization in 2022.

Borrowed Funds

As of December 31, 2023, the Company's borrowed funds include $1.2 billion in FHLB borrowings, $84.2 million in subordinated debentures and notes, and $69.3 million in other borrowed funds. In 2023, the average balance of FHLB borrowings increased $752.4 million, or 220.9%, the average balance of other borrowed funds, which includes repurchase agreements and other borrowings, increased $6.4 million, or 5.4%, and the average balance of subordinated debentures and notes increased $145.0 thousand, or 0.2%, for the year ended December 31, 2023.

For the year ended December 31, 2023, interest paid on borrowed funds increased $46.1 million, or 291.3% year over year. The cost of borrowed funds increased to 4.69% for the year ended December 31, 2023 from 2.87% for the year ended December 31, 2022. The increase in interest expense was driven by an increase of $32.3 million due to volume and an increase of $13.8 million due to borrowing rates. For the year ended December 31, 2023, purchase accounting amortization was $0.3

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million on acquired borrowed funds compared to amortization of $0.1 million for the year ended December 31, 2022. Purchase accounting amortization had no impact on the Company's net interest margin.

Provision for Credit Losses

The provisions for credit losses are set forth below:


	Year Ended December 31,
			2023		2022
		(In Thousands)
Provision (credit) for credit losses:
Commercial real estate			$	14,328	$	(1,046)
Commercial			21,537		2,892
Consumer			2,838		872

Total provision (credit) for loan and lease losses			38,703		2,718
Unfunded credit commitments			(835)		5,807
Investment securities available-for-sale			339		102
Total provision (credit) for credit losses			$	38,207	$	8,627

For the year ended December 31, 2023, the provision for credit losses increased $29.6 million to $38.2 million from $8.6 million for the year ended December 31, 2022. This increase in the provision for 2023 is largely driven by a $16 million increase in acquired loans as a result of the PCSB acquisition.

See management’s discussion of “Financial Condition — Allowance for Loan and Lease Losses” and Note 7, “Allowance for Credit Losses,” to the audited consolidated financial statements for a description of how management determined the allowance for loan and lease losses for each portfolio and class of loans.

Non-Interest Income

The following table sets forth the components of non-interest income:


	Year Ended December 31,				Dollar Change		Percent Change
	2023		2022
	(Dollars in Thousands)
Deposit fees	$	11,611	$	10,919	$	692	6.3	%
Loan fees	2,036		2,208		(172)		(7.8)	%
Loan level derivative income, net	3,890		4,246		(356)		(8.4)	%
Gain (loss) on sales of investment securities, net	1,704		321		1,383		430.8	%
Gain on sales of loans and leases	2,581		4,136		(1,555)		(37.6)	%

Other	10,112		6,517		3,595		55.2	%
Total non-interest income	$	31,934	$	28,347	$	3,587	12.7	%

For the year ended December 31, 2023, non-interest income increased $3.6 million, or 12.7%, to $31.9 million compared to $28.3 million for the same period in 2022. The increase was primarily driven by increases of $3.6 million in other income and $1.4 million in gain on sales of investment securities, net, partially offset by a decrease of $1.6 million in gain on sales of loans and leases.

Other income increased $3.6 million, or 55.2%, to $10.1 million for the year ended December 31, 2023 from $6.5 million for the same period in 2022, primarily driven by higher gain on interest rate derivatives, BOLI income, and wealth management income.

Gain on sales of loans and leases decreased $1.6 million, or 37.6%, to $2.6 million for the year ended December 31, 2023 from $4.1 million for the same period in 2022, primarily driven by a decrease in loan participations in 2023.

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For the year ended December 31, 2023, gain on sales of investment securities increased $1.4 million, or 430.8%, to $1.7 million, compared to a gain of $0.3 million for the same period in 2022, primarily driven by a $1.7 million gain on sales of investments from the repositioning of the PCSB portfolio.

Non-Interest Expense

The following table sets forth the components of non-interest expense:


	Year Ended December 31,				Dollar Change		Percent Change
	2023		2022
	(Dollars in Thousands)
Compensation and employee benefits	$	138,895	$	113,487	$	25,408	22.4	%
Occupancy	20,203		16,002		4,201		26.3	%
Equipment and data processing	27,004		20,833		6,171		29.6	%
Professional services	7,226		5,060		2,166		42.8	%
FDIC insurance	7,844		3,177		4,667		146.9	%
Advertising and marketing	4,724		4,980		(256)		(5.1)	%
Amortization of identified intangible assets	7,840		494		7,346		1487.0	%
Merger and acquisition expense	7,411		2,249		5,162		229.5	%
Other	18,377		13,260		5,117		38.6	%
Total non-interest expense	$	239,524	$	179,542	$	59,982	33.4	%

For the year ended December 31, 2023, non-interest expense increased $60.0 million, or 33.4%, to $239.5 million compared to $179.5 million for the same period in 2022. The increase was primarily driven by increases of $25.4 million in compensation and employee benefits, $7.3 million in amortization of identified intangible assets, $6.2 million in equipment and data processing, $5.2 million in merger and acquisition expense, $5.1 million in other expense, $4.7 million in FDIC insurance, $4.2 million in occupancy, and $2.2 million in professional services.

The efficiency ratio increased to 64.45% for the year ended December 31, 2023 from 54.72% for the same period in 2022. The increase year over year was primarily driven by higher non-interest expense, partially offset by higher net interest income and non-interest income in 2023.

Compensation and employee benefits expense increased $25.4 million, or 22.4%, to $138.9 million for the year ended December 31, 2023 from $113.5 million for the same period in 2022. The increase was primarily driven by an increase in employee headcount, predominantly from the PCSB acquisition, driving increases in salaries, retirement plan and health care benefits, partially offset by a decrease in incentive/bonus.

Amortization of identified intangible assets expense increased $7.3 million to $7.8 million for the year ended December 31, 2023 from $0.5 million for the same period in 2022. The increase in 2023 was primarily driven by intangible core deposit valuation for the PCSB acquisition.

Equipment and data processing expense increased $6.2 million, or 29.6%, to $27.0 million for the year ended December 31, 2023 from $20.8 million for the same period in 2022. The increase was primarily driven by higher software expenses.

Merger and acquisition expense increased $5.2 million to $7.4 million for the year ended December 31, 2023 from $2.2 million for the same period in 2022. The increase was driven by merger-related expenses related to the PCSB acquisition.

Other expense increased $5.1 million, or 38.6%, to $18.4 million for the year ended December 31, 2023 from $13.3 million for the same period in 2022. The increase was primarily driven by lower deferred loan expenses, higher directors' fees and higher miscellaneous expenses.

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Provision for Income Taxes


	Year Ended December 31,						Dollar Change		Percent Change
	2023			2022
	(Dollars in Thousands)
Income before provision for income taxes	$	93,914		$	139,949		$	(46,035)	(32.9)	%
Provision for income taxes	18,915			30,205			(11,290)		(37.4)	%
Net income,	$	74,999		$	109,744		$	(34,745)	(31.7)	%
Effective tax rate	20.1		%	21.6		%	N/A		(6.9)	%

The Company recorded income tax expense of $18.9 million for 2023, compared to $30.2 million for 2022. This represents an effective tax rate of 20.1% and 21.6% for 2023 and 2022, respectively. The decrease in the Company's effective tax rate is due to continued participation in energy tax credit investments, and increased benefits in the Company's investments in affordable housing projects.

Comparison of Years Ended December 31, 2022 and December 31, 2021

Net Interest Income

Net interest income increased $17.4 million to $299.8 million for the year ended December 31, 2022 from $282.4 million for the year ended December 31, 2021. The increase year over year reflects a $30.8 million increase in interest income on loans and leases, along with a $2.8 million increase in interest income on investment securities and short term investments, offset by a $16.3 million increase in interest expense on deposit and borrowings, which is reflective of the rising interest rate environment.

Net interest margin increased by 18 basis points to 3.67% in 2022 from 3.49% in 2021. Excluding the Paycheck Protection Program ("PPP") loans, net interest margin increased by 31 basis points to 3.65% in 2022 from 3.34% in 2021. The Company's weighted average interest rate on loans (prior to purchase accounting adjustments) increased to 4.49% for the year ended December 31, 2022 from 4.19% for the year ended December 31, 2021.

The yield on interest-earning assets increased to 4.22% for the year ended December 31, 2022 from 3.85% for the year ended December 31, 2021. This increase is the result of higher yields on loans and ~~leases. During the year ended December 31, 2017, the~~leases and investments, partially offset by lower fee income from PPP loans. The Company recorded ~~$3.7~~$4.8 million in prepayment penalties and late charges, which contributed 6 basis points to yields on interest-earning assets infor the year ended December 31, ~~2017~~2022 compared to ~~$3.5~~$5.9 million, or 67 basis points, for the year ended December 31, ~~2016.~~2021.

The overall cost of funds (including non-interest-bearing demand checking accounts) increased 529 basis points to 0.82% for the year ended December 31, ~~2017~~2022 from ~~0.77%~~0.53% for the year ended December 31, ~~2016.~~2021. Refer to "Financial Condition - Borrowed Funds" above for more details.

Management seeks to position the balance sheet to be neutral to ~~asset~~assets sensitive to changes in interest rates. ~~Since the end of 2016,~~From 2017 through 2019, short term interest rates ~~have risen~~rose while at the same time net interest income, net interest spread, and net interest margin ~~have~~ also increased. During 2020, interest rates declined sharply in response to the economic impact of the COVID-19 pandemic, and started to rise in the first quarter of 2022. In ~~general,~~recent months, the ~~Company's balance sheet position should respond~~yield curve has begun to invert and flatten on the long end. Short term rates are continuing to rise due to multiple rate hikes imposed by the FRB. The shape of the curve indicates rates will begin to fall within a year and flatten around the 7-year mark. This type of curve positively ~~in a rising interest rate environment and when~~effects the ~~rate curves are steepening, resulting in a positive impact to~~Company’s net interest income, net interest spread, and ~~the~~ net interest ~~margin. A declining interest rate or flattening yield curve environment is expected to~~margin in the short term but will have a negative ~~impact on~~effect in the ~~Company's yields and net interest margin. Additional risk factors include, but are not limited to:~~long term. Due to, among other things, ongoing pricing pressures in ~~both~~ the loan and deposit portfolios, ~~the ability to increase the Company's core deposits, decrease its loan-to-deposit ratio, and decrease its reliance on FHLBB advances. Net~~net interest income may also be negatively affected by changes in the amount of accretion on acquired loans and leases, deposits and borrowed funds, which ~~are~~is included in interest income and interest expense, respectively.

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Interest Income—Loans and Leases

Year Ended
December 31,

Dollar
Change

Percent
Change
2017 2016
(Dollars in Thousands)
Interest income—loans and leases:
Commercial real estate loans $ 123,000
$ 113,910
$ 9,090
8.0 %
Commercial loans 29,936
26,513
3,423
12.9 %
Equipment financing 55,164
48,217
6,947
14.4 %
Residential mortgage loans 23,593
22,217
1,376
6.2 %
Other consumer loans 15,329
13,864
1,465
10.6 %
Total interest income—loans and leases $ 247,022
$ 224,721
$ 22,301
9.9 %


	Year Ended December 31,				Dollar Change		Percent Change
	2022		2021
	(Dollars in Thousands)
Interest income—loans and leases:
Commercial real estate loans	$	172,811	$	139,451	$	33,360	23.9	%
Commercial loans	33,896		47,426		(13,530)		(28.5)	%
Equipment financing	75,767		71,906		3,861		5.4	%
Residential mortgage loans	29,726		27,933		1,793		6.4	%
Other consumer loans	16,569		11,211		5,358		47.8	%
Total interest income—loans and leases	$	328,769	$	297,927	$	30,842	10.4	%

Interest income from loans and leases was ~~$247.0~~$328.8 million for ~~2017,~~2022, and represented a yield on total loans of ~~4.47%~~4.49%. This compares to ~~$224.7~~$297.9 million of interest on loans and leases and a yield of ~~4.31%~~4.19% for ~~2016. This $22.3~~2021. The $30.8 million increase in interest income from loans and leases was ~~attributable~~primarily due to ~~$14.7~~an increase of $8.0 million ~~of increased~~in origination volume, and an increase of ~~$7.6~~$22.8 million ~~due~~related to ~~the changes in~~ interest ~~rates.~~rates changes.

Accretion on acquired loans and leases of $0.8 million contributed 1 basis point to the Company's net interest margin for the year ended December 31, 2017, compared to $1.5 million and 3 basis points for the year ended December 31, 2016. The decrease was due to the continued paydowns of acquired loans and the recognition of related purchase accounting accretion.

Interest Income—Investments


	Year Ended December 31,					Dollar Change		Percent Change
	2017			2016
	(Dollars in Thousands)
	Year Ended December 31,																			Year Ended December 31,										Dollar Change				Percent Change
	2022
			(Dollars in Thousands)
			(Dollars in Thousands)
			(Dollars in Thousands)
Interest income—investments:
Debt securities
Debt securities
Debt securities	$	12,524		$	11,710	$	814	7.0	%	$	13,079			$		$	12,178			$			$	901			7.4			7.4	%
Marketable and restricted equity securities	3,062			2,975		87		2.9	%	Marketable and restricted equity securities		1,898			1,172				1,172			726					726		61.9			61.9	%
Short-term investments	442			242		200		82.6	%	Short-term investments		1,440			252				252			1,188					1,188		471.4			471.4	%
Total interest income—investments	$	16,028		$	14,927	$	1,101	7.4	%	Total interest income—investments		$	16,417		$			$	13,602		$				$	2,815		20.7			20.7	%

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income


	Year Ended December 31,
	2023		2022		2021
	(In Thousands)
Net income	$	74,999	$	109,744	$	115,440



Investment securities available-for-sale:
Unrealized securities holding gains (losses)	9,560		(77,303)		(21,542)

Income tax (expense) benefit	(1,913)		17,038		4,747
Net unrealized securities holding gains (losses) before reclassification adjustments, net of taxes	7,647		(60,265)		(16,795)
Less reclassification adjustments for securities gains (losses) included in net income:
Gain (loss) on sales of securities, net	—		(327)		(38)
Income tax (expense) benefit	—		72		8
Net reclassification adjustments for securities gains (losses) included in net income	—		(255)		(30)
Net unrealized securities holding gains (losses)	7,647		(60,010)		(16,765)

Cash flow hedges:
Change in fair value of cash flow hedges	(2,829)		(2,899)		37
Reclassification adjustment for (income) expense recognized in earnings	—		(168)		(7)
Income tax (expense) benefit	803		788		—
Net change in fair value of cash flow hedges, net of taxes	(2,026)		(2,279)		30

Less reclassification adjustment for change in fair value of cash flow hedges:
Gain (loss) on change in fair value of cash flow hedges	(3,632)		—		—
Income tax (expense) benefit	945		—		—
Net reclassification adjustment for change in fair value of cash flow hedges	(2,687)		—		—

Net change in fair value of cash flow hedges	661

Postretirement benefits:
Adjustment of accumulated obligation for postretirement benefits	1,135		611		183
Income tax (expense) benefit	(294)		(159)		(48)
Net adjustment of accumulated obligation for postretirement benefits	841		452		135

Other comprehensive gain (loss), net of taxes	9,149		(61,837)		(16,600)

Comprehensive income	84,148		47,907		98,840

See accompanying notes to consolidated financial statements.

F-8

Year Ended December 31,
2017 2016 2015
(In Thousands)
Net income before noncontrolling interest in subsidiary $ 53,619
$ 55,224
$ 52,368

Other comprehensive loss, net of taxes:

Investment securities available-for-sale:
Unrealized securities holding losses (1,274 ) (2,167 ) (1,573 )
Income tax benefit 457
781
479
Net unrealized securities holding losses before reclassification adjustments (817 ) (1,386 ) (1,094 )

Postretirement benefits:
Adjustment of accumulated obligation for postretirement benefits (422 ) 69
353
Income tax benefit (expense) 170
(25 ) (113 )
Net adjustment of accumulated obligation for postretirement benefits (252 ) 44
240

Other comprehensive loss, net of taxes (1,069 ) (1,342 ) (854 )

Comprehensive income 52,550
53,882
51,514
Net income attributable to noncontrolling interest in subsidiary 3,101
2,862
2,586
Comprehensive income attributable to Brookline Bancorp, Inc. $ 49,449
$ 51,020
$ 48,928

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity

Year Ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015~~2021


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Unallocated Common Stock Held by ESOP		Total Stockholders' Equity
	(In Thousands)
Balance at December 31, 2022	$	852	$	736,074	$	412,019	$	(61,947)	$	(94,873)	$	—	$	992,125

Net income	—		—		74,999		—		—		—		74,999
PCSB acquisition	118		167,212		—		—		—		—		167,330
Other comprehensive income (loss)	—		—		—		9,149		—		—		9,149



Common stock dividends of $0.54 per share	—		—		(47,926)		—		—		—		(47,926)


Restricted stock awards, net of awards surrendered	—		(4,720)		—		—		3,964		—		(756)
Compensation under recognition and retention plans	—		4,093		(370)		—		—		—		3,723



Balance at December 31, 2023	$	970	$	902,659	$	438,722	$	(52,798)	$	(90,909)	$	—	$	1,198,644

See accompanying notes to consolidated financial statements.

F-9

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Treasury
Stock

Unallocated
Common Stock
Held by ESOP

Total Brookline
Bancorp, Inc.
Stockholders'
Equity

Noncontrolling
Interest in
Subsidiary

Total Stockholders'
Equity
(In Thousands)
Balance at December 31, 2016 $ 757
$ 616,734
$ 136,671
$ (3,818 ) $ (53,837 ) $ (963 ) $ 695,544
$ 7,205
$ 702,749
Reclassification due to the adoption of ASU No. 2018-02 —
—
1,063
(1,063 ) —
—
—
—
—
Net income attributable to Brookline Bancorp, Inc. —
—
50,518
—
—
—
50,518
—
50,518
Net income attributable to noncontrolling interest in subsidiary —
—
—
—
—
—
—
3,101
3,101
Issuance of common stock 60
81,883
—
—
—
—
81,943
—
81,943
Issuance of noncontrolling units —
—
—
—
—
—
—
118
118
Other comprehensive income —
—
—
(1,069 ) —
—
(1,069 ) —
(1,069 )
Common stock dividends of $0.36 per share —
—
(27,035 ) —
—
—
(27,035 ) —
(27,035 )
Dividend distribution to owners of noncontrolling interest in subsidiary —
—
—
—
—
—
—
(1,671 ) (1,671 )
Compensation under recognition and retention plan —
1,045
—
—
2,383
—
3,428
—
3,428
Common stock held by ESOP committed to be released (34,356 shares) —
314
—
—
—
187
501
—
501
Balance at December 31, 2017 $ 817
$ 699,976
$ 161,217
$ (5,950 ) $ (51,454 ) $ (776 ) $ 803,830
$ 8,753
$ 812,583

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Continued)

Year Ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015~~2021


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Unallocated Common Stock Held by ESOP		Total Stockholders' Equity
	(In Thousands)
Balance at December 31, 2021	$	852	$	736,826	$	342,639	$	(110)	$	(84,718)	$	(147)	$	995,342

Net income	—		—		109,744		—		—		—		109,744



Other comprehensive income (loss)	—		—		—		(61,837)		—		—		(61,837)
Common stock dividends of $0.53 per share	—		—		(40,077)		—		—		—		(40,077)


Restricted stock awards, net of awards surrendered	—		(4,310)		—		—		3,625		—		(685)
Compensation under recognition and retention plans	—		3,349		(287)		—		—		—		3,062
Treasury stock, repurchase shares	—		—		—		—		(13,780)		—		(13,780)
Common stock held by ESOP committed to be released (24,660 shares)	—		209		—		—		—		147		356

Balance at December 31, 2022	$	852	$	736,074	$	412,019	$	(61,947)	$	(94,873)	$	—	$	992,125

See accompanying notes to consolidated financial statements.

F-10

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Treasury
Stock

Unallocated
Common Stock
Held by ESOP

Total Brookline
Bancorp, Inc.
Stockholders'
Equity

Noncontrolling
Interest in
Subsidiary

Total Stockholders'
Equity
(In Thousands)
Balance at December 31, 2015 $ 757
$ 616,899
$ 109,675
$ (2,476 ) $ (56,208 ) $ (1,162 ) $ 667,485
$ 6,001
$ 673,486
Net income attributable to Brookline Bancorp, Inc. —
—
52,362
—
—
—
52,362
—
52,362
Net income attributable to noncontrolling interest in subsidiary —
—
—
—
—
—
—
2,862
2,862
Issuance of non-controlling interest —
—
—
—
—
—
—
76
76
Other comprehensive loss —
—

(1,342 ) —
—
(1,342 ) —
(1,342 )
Common stock dividends of $0.36 per share —
—
(25,366 ) —

—
(25,366 ) —
(25,366 )
Dividend distribution to owners of noncontrolling interest in subsidiary —
—
—
—
—
—
—
(1,734 ) (1,734 )
Compensation under recognition and retention plans —
(361 ) —
—
2,371
—
2,010
—
2,010
Common stock held by ESOP committed to be released (36,372 shares) —
196
—
—
—
199
395
—
395
Balance at December 31, 2016 $ 757
$ 616,734
$ 136,671
$ (3,818 ) $ (53,837 ) $ (963 ) $ 695,544
$ 7,205
$ 702,749

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Continued)

Year Ended December 31, ~~2017, 2016~~2023, 2022 and ~~2015~~2021


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Unallocated Common Stock Held by ESOP		Total Stockholders' Equity
	(In Thousands)
Balance at December 31, 2020	$	852	$	737,178	$	264,892	$	16,490	$	(77,343)	$	(291)	$	941,778

Net income	—		—		115,440		—		—		—		115,440



Other comprehensive income (loss)	—		—		—		(16,600)		—		—		(16,600)
Common stock dividends of $0.480 per share	—		—		(37,463)		—		—		—		(37,463)


Restricted stock awards, net of awards surrendered	—		(3,192)		—		—		2,604		—		(588)
Compensation under recognition and retention plans	—		2,603		(230)		—		—		—		2,373
Treasury stock, repurchase shares	—		—		—		—		(9,979)		—		(9,979)
Common stock held by ESOP committed to be released (26,454 shares)	—		237		—		—		—		144		381

Balance at December 31, 2021	$	852	$	736,826	$	342,639	$	(110)	$	(84,718)	$	(147)	$	995,342

See accompanying notes to consolidated financial statements.

F-11

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Treasury
Stock

Unallocated
Common Stock
Held by ESOP

Total Brookline
Bancorp, Inc.
Stockholders'
Equity

Noncontrolling
Interest in
Subsidiary

Total Stockholders'
Equity
(In Thousands)
Balance at December 31, 2014 $ 757
$ 617,475
$ 84,860
$ (1,622 ) $ (58,282 ) $ (1,370 ) $ 641,818
$ 4,787
$ 646,605
Net income attributable to Brookline Bancorp, Inc. —
—
49,782
—
—
—
49,782
—
49,782
Net income attributable to noncontrolling interest in subsidiary —
—
—
—
—
—
—
2,586
2,586
Issuance of non-controlling interest —
—
—
—
—
—
—
65
65
Other comprehensive income —
—
—
(854 ) —
—
(854 ) —
(854 )
Common stock dividends of $0.355 per share —
—
(24,967 ) —
—
—
(24,967 ) —
(24,967 )
Dividend distribution to owners of noncontrolling interest in subsidiary —
—
—
—
—
—
—
(1,437 ) (1,437 )
Compensation under recognition and retention plans —
(763 ) —
—
2,074
—
1,311
—
1,311
Common stock held by ESOP committed to be released (38,316 shares) —
187
—
—
—
208
395
—
395
Balance at December 31, 2015 $ 757
$ 616,899
$ 109,675
$ (2,476 ) $ (56,208 ) $ (1,162 ) $ 667,485
$ 6,001
$ 673,486

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows


	Year Ended December 31,
	2023		2022		2021
	(In Thousands)
Cash flows from operating activities:
Net income	$	74,999	$	109,744	$	115,440
Adjustments to reconcile net income to net cash provided from operating activities:

Provision (credit) for credit losses	38,207		8,627		(7,837)


Deferred income tax expense	16,167		4,357		5,833
Depreciation of premises and equipment	8,159		6,027		5,789
(Accretion) amortization of investment securities deferred, net	(8,658)		1,631		3,162
(Accretion) amortization of premiums and discounts and deferred loan and lease origination costs, net	(4,708)		4,934		6,278
Amortization of identified intangible assets	7,840		494		876
Amortization of debt issuance costs	100		101		100
(Accretion) amortization of acquisition fair value adjustments, net	(1,611)		41		(80)
(Gain) loss on investment securities, net	(1,704)		(321)		38
Gain on sales of loans and leases	(2,581)		(4,136)		(3,737)

(Loss) gain on sales of OREO	4		—		(2,231)

Write-down of OREO and other repossessed assets	181		178		239
Compensation under recognition and retention plans	3,723		3,062		2,373
ESOP shares committed to be released	—		356		381
Net change in:
Cash surrender value of bank-owned life insurance	(1,269)		(1,025)		(691)
Equity securities held-for-trading	—		—		520
Other assets	13,758		(48,725)		74,662
Accrued expenses and other liabilities	(26,010)		35,416		(67,903)
Net cash provided from operating activities	116,597		120,761		133,212

Cash flows from investing activities:
Proceeds from sales of investment securities available-for-sale	229,981		78,778		39,132
Proceeds from maturities, calls, and principal repayments of investment securities available-for-sale	272,419		98,572		184,199
Purchases of investment securities available-for-sale	(362,905)		(197,632)		(223,073)



Proceeds from redemption/sales of restricted equity securities	48,489		29,923		28,473
Purchase of restricted equity securities	(50,775)		(66,153)		(7,668)
Proceeds from sales of loans and leases held-for-investment, net	244,133		463,937		387,529
Net increase in loans and leases	(955,593)		(959,561)		(282,304)
Acquisitions, net of cash and cash equivalents acquired	(80,209)		—		—



Purchase of premises and equipment, net	(12,357)		(7,388)		(4,789)
Proceeds from sales of OREO and other repossessed assets	1,552		1,831		9,615
Net cash (used for) provided from investing activities	(665,265)		(557,693)		131,114




					(Continued)

See accompanying notes to consolidated financial statements.

F-12

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Year Ended December 31,
2017 2016 2015
(In Thousands)
Cash flows from operating activities:
Net income attributable to Brookline Bancorp, Inc. $ 50,518
$ 52,362
$ 49,782
Adjustments to reconcile net income to net cash provided from operating activities:
Net income attributable to noncontrolling interest in
subsidiary
3,101
2,862
2,586
Provision for credit losses 18,988
10,353
7,451
Origination of loans and leases held-for-sale (27,425 ) (56,080 ) (74,841 )
Proceeds from sales of loans and leases held-for-sale, net 32,073
55,636
64,398
Deferred income tax expense 10,798
2,322
1,239
Depreciation of premises and equipment 7,232
7,080
7,074
Amortization of investment securities premiums and discounts, net 2,042
2,158
1,841
Amortization of deferred loan and lease origination costs, net 6,695
5,883
4,775
Amortization of identified intangible assets 2,089
2,500
2,911
Amortization of debt issuance costs 100
101
100
Accretion of acquisition fair value adjustments, net (1,583 ) (3,960 ) (7,242 )
Gain on sales of investment securities, net (11,393 ) —
—
Gain on sales of loans and leases held-for-sale (2,644 ) (3,256 ) (2,208 )
Loss on sales of OREO and other repossessed assets, net (79 ) (84 ) 102
Write-down of OREO and other repossessed assets 458
190
229
Compensation under recognition and retention plans 2,308
1,844
1,276
ESOP shares committed to be released 501
395
395
Net change in:
Cash surrender value of bank-owned life insurance (1,041 ) (1,050 ) (1,049 )
Other assets (2,413 ) (287 ) (5,135 )
Accrued expenses and other liabilities (5,378 ) (1,039 ) 10,920
Net cash provided from operating activities 84,947
77,930
64,604

Cash flows from investing activities:
Proceeds from maturities, calls, and principal repayments of investment securities available-for-sale 71,611
100,957
97,771
Purchases of investment securities available-for-sale (90,971 ) (115,403 ) (63,615 )
Proceeds from maturities, calls, and principal repayments of investment securities held to maturity 3,817
42,492
9,579
Purchases of investment securities held-to-maturity (26,873 ) (36,167 ) (102,847 )
Proceeds from redemption/sales of restricted equity securities 24,462
5,623
9,924
Purchase of restricted equity securities (7,927 ) (4,017 ) (1,237 )
Proceeds from sales of loans and leases held-for-investment, net 28,608
45,979
273,688
Net increase in loans and leases (378,906 ) (465,527 ) (457,460 )
Purchase of premises and equipment, net (11,557 ) (5,262 ) (4,775 )
Proceeds from sales of OREO and other repossessed assets 3,762
3,530
7,152
Net cash used for investing activities (383,974 ) (427,795 ) (231,820 )
(Continued)


	Year Ended December 31,
	2023		2022		2021
	(In Thousands)
Cash flows from financing activities:
(Decrease) increase in demand checking, NOW, savings and money market accounts	(402,552)		(532,446)		605,121
Increase (decrease) in certificates of deposit and brokered certificates of deposit	859,866		4,686		(465,867)
Proceeds from FHLB advances	6,155,000		8,608,609		377,682
Repayment of FHLB advances	(6,222,735)		(7,518,693)		(878,624)



(Decrease) increase in other borrowed funds, net	(41,529)		(14,732)		37,865
(Decrease) increase in mortgagors' escrow accounts, net	(678)		(689)		395

Repurchases of common stock	—		(13,780)		(9,979)


Payment of dividends on common stock	(47,926)		(40,077)		(37,463)
Payment of income taxes for shares withheld in share based activity	(710)		(724)		(636)




Net cash provided from (used for) financing activities	298,736		492,154		(371,506)
Net increase (decrease) in cash and cash equivalents	(249,932)		55,222		(107,180)
Cash and cash equivalents at beginning of year	382,959		327,737		434,917
Cash and cash equivalents at end of year	$	133,027	$	382,959	$	327,737

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest on deposits, borrowed funds and subordinated debt	$	238,396	$	41,040	$	30,294
Income taxes	8,632		22,554		27,797
Non-cash investing activities:

Transfer from loans to other real estate owned and other repossessed assets	$	3,023	$	1,699	$	1,826
Acquisition of PCSB Financial Corporation
Fair value of assets acquired, net of cash and cash equivalents acquired	$	1,931,528	—		—
Fair value of liabilities assumed	1,676,110		—		—
Common stock issued	118		—		—

See accompanying notes to consolidated financial statements.

F-13

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
Year Ended December 31,
2017 2016 2015
(In Thousands)
Cash flows from financing activities:
Increase in demand checking, NOW, savings and money market accounts 93,819
351,908
206,748
(Decrease) increase in certificates of deposit 166,448
(46,752 ) 141,338
Proceeds from FHLBB advances 4,685,706
5,905,511
4,018,000
Repayment of FHLBB advances (4,705,543 ) (5,854,019 ) (4,157,392 )
Increase (decrease) in other borrowed funds, net (2,568 ) 11,980
(1,388 )
Increase (decrease) in mortgagors' escrow accounts, net 41
129
(985 )
Proceeds from exercise of stock options 1,469
300
—
Proceeds from issuance of common stock 81,943
—
—
Payment of dividends on common stock (27,035 ) (25,366 ) (24,967 )
Payment of income taxes for shares withheld in share based activity (352 ) —
—
Proceeds from issuance of noncontrolling units 118
76
65
Payment of dividends to owners of noncontrolling interest in subsidiary (1,671 ) (1,734 ) (1,437 )
Net cash provided from financing activities 292,375
342,033
179,982
Net (decrease) increase in cash and cash equivalents (6,652 ) (7,832 ) 12,766
Cash and cash equivalents at beginning of year 67,657
75,489
62,723
Cash and cash equivalents at end of year $ 61,005
$ 67,657
$ 75,489

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest on deposits, borrowed funds and subordinated debt $ 40,785
$ 38,620
$ 35,522
Income taxes 34,026
29,770
26,694
Non-cash investing activities:
Transfer from loans and leases to loan and leases held-for-sale $ 7,500
$ 2,500
$ —
Transfer from loans to other real estate owned 7,161
3,692
7,370

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

~~December 31, 2017, 2016 and 2015~~

(1) Basis of Presentation

Overview

Brookline Bancorp, Inc. (the "Company") is a bank holding company (within the meaning of the Bank Holding Company Act of 1956, as amended) and the parent of Brookline Bank, a Massachusetts-chartered ~~savings bank;~~trust company, Bank Rhode Island ("BankRI"), a Rhode Island-chartered financial ~~institution;~~institution, and ~~First Ipswich~~PCSB Bank, ~~("First Ipswich"),~~ a ~~Massachusetts-chartered trust company~~New York-chartered commercial bank (collectively referred to as the "Banks"). The Banks are all members of the Federal Reserve System. The Company is also the parent of ~~Brookline Securities Corp.~~Clarendon Private, LLC ("~~BSC"~~Clarendon Private"). The Company's primary business is to provide commercial, business and retail banking services to its corporate, municipal and retail customers through the Banks and its ~~banks and~~ non-bank subsidiaries. Until February 14, 2020 (the "Merger Closing Date"), the Company was also the parent of First Ipswich Bank ("First Ipswich"), a Massachusetts-chartered trust company. Effective upon the Merger Closing Date, First Ipswich was merged with and into Brookline Bank, with Brookline as the surviving institution. Brookline Securities Corp. ("BSC"), previously a subsidiary of the Company was dissolved in November 2023.

Brookline Bank, which includes its wholly-owned subsidiaries ~~BBS Investment Corp.,~~ Longwood Securities Corp. ~~and its 84.2%-owned subsidiary,~~, Eastern Funding LLC ("Eastern Funding"), and First Ipswich Insurance Agency, operates 2529 full-service banking offices in the ~~greater~~Greater Boston metropolitan ~~area.~~area with two additional lending offices. BankRI, which includes its wholly-owned subsidiaries, Acorn Insurance Agency, BRI Realty Corp., ~~Macrolease Corporation ("Macrolease"),~~ BRI Investment Corp. and its wholly-owned subsidiary, BRI MSC Corp., operates 2022 full-service banking offices in the ~~greater~~Greater Providence, ~~area,~~ Rhode Island area. ~~First Ipswich,~~Macrolease Corporation ("Macrolease"), previously a subsidiary of BankRI, was merged into Eastern Funding LLC in the second quarter of 2022. PCSB Bank, which includes its wholly-owned ~~subsidiaries, First Ipswich Insurance Agency and First Ipswich Securities II~~subsidiary, UpCounty Realty Corp., operates ~~six~~14 full-service banking offices onin the ~~north shore~~Lower Hudson Valley of ~~eastern Massachusetts.~~New York. Clarendon Private is a registered investment advisor with the Securities and Exchange Commission ("SEC"). Through Clarendon Private, the Company offers a wide range of wealth management services to individuals, families, endowments and foundations to help these clients meet their long-term financial goals.

The Company's activities include acceptance of commercial, municipal and retail deposits, origination of mortgage loans on commercial and residential real estate located principally in ~~Massachusetts~~Central New England and ~~Rhode Island,~~the Lower Hudson Valley of New York, origination of commercial loans and leases to small- and mid-sized businesses, investment in debt and equity securities, and the offering of cash management and wealth and investment advisory services. The Company also provides specialty equipment financing through its ~~subsidiaries~~subsidiary Eastern Funding, which is based in New York City, New York, and ~~Macrolease, which is based in~~ Plainview, New York.

The Company and the Banks are supervised, examined and regulated by the Board of Governors of the Federal Reserve System ("FRB"). As a Massachusetts-chartered ~~savings bank and~~ trust company, Brookline Bank ~~and First Ipswich, respectively, are~~is also subject to supervision, examination and regulation ~~under the laws of the Commonwealth of Massachusetts and the jurisdiction of the~~by Massachusetts Division of Banks. As a Rhode Island-chartered financial institution, BankRI is subject to regulation, ~~under the laws of the State of Rhode Island~~examination and ~~the jurisdiction of~~regulation by the Banking Division of the Rhode Island Department of Business Regulation. As a New York chartered commercial bank, PCSB Bank is subject to supervision, examination and regulation by the New York State Department of Financial Services. Clarendon Private is also subject to regulation by the SEC.

The Federal Deposit Insurance Corporation ("FDIC") offers insurance coverage on all deposits up to $250,000 per depositor at each of the Banks. As FDIC-insured depository institutions, the Banks are also secondarily subject to supervision, examination and regulation by the FDIC. Additionally, as a Massachusetts-chartered savings bank, Brookline Bank is also insured by the Depositors Insurance Fund ("DIF"), a private industry-sponsored insurance company. The DIF insures savings bank deposits in excess of the FDIC insurance limits. As such, Brookline Bank offers 100% insurance on all deposits as a result of a combination of insurance from the FDIC and the DIF. Brookline Bank is required to file reports with the DIF.

Basis of Financial Statement Presentation

The Company's consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") as set forth by the Financial Accounting Standards Board ("FASB") in its Accounting Standards Codification and through the rules and interpretive releases of the ~~Securities and Exchange Commission ("SEC")~~SEC under the authority of federal securities laws.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances are eliminated in consolidation.

In preparing these consolidated financial statements, management is required to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, income, expenses and disclosure of ~~contingent~~ assets and liabilities. Actual results could differ from those estimates based upon changing conditions, including economic conditions and future events. Material estimates that are particularly susceptible to significant ~~change~~changes in the near-term include the determination of

F-14

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

the allowance for loan and lease losses, the determination of fair market values of assets and liabilities, including acquired loans, the review of goodwill and intangibles for impairment and the review of deferred tax assets for valuation allowance.

~~F-12~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

The judgments used by management in applying these ~~critical accounting policies~~significant estimates may be affected by a further and prolonged deterioration in the economic environment, which may result in changes to future financial results. For example, subsequent evaluations of the loan and lease portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for loan and lease losses in future periods, and the inability to collect outstanding principal may result in increased loan and lease losses.

~~Reclassification~~

~~Certain previously reported amounts have been reclassified to conform to the current year's presentation.~~

Cash and Cash Equivalents

For purposes of reporting asset balances and cash flows, cash and cash equivalents includes cash on hand and due from banks (including cash items in process of clearing), interest-bearing deposits with banks, federal funds sold, money market mutual funds and other short-term investments with original maturities of three months or less.

Investment Securities

Investment securities, other than those reported as short-term investments, are classified at the time of purchase as "available-for-sale," "held-to-maturity," or ~~"held-to-maturity.~~"held-for-trading." Classification is periodically re-evaluated for consistency with the Company's goals and objectives. Equity investments in the Federal Home Loan Bank ("FHLB") of Boston ~~("FHLBB"),~~and New York, the Federal Reserve Bank of Boston, the Federal Reserve Bank of New York, and other restricted equities are discussed in more detail in Note 5, "Restricted Equity Securities."

Investment Securities Available-for-Sale, Held-to-Maturity, and ~~Held-to-Maturity~~Held-for-Trading

Investment securities for which the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and carried at amortized cost. Those investment securities held for indefinite periods of time but not necessarily to maturity are classified as available-for-sale. Investment securities held for indefinite periods of time include investment securities that management intends to use as part of its asset/liability, liquidity, and/or capital management strategies and may be sold in response to changes in interest rates, maturities, asset/liability mix, liquidity needs, regulatory capital needs or other business factors. Investment securities available-for-sale are carried at estimated fair value, primarily obtained from a third-party pricing service, with unrealized gains and losses reported on an after-tax basis in stockholders' equity as accumulated other comprehensive income or loss. Investment securities expected to be held for very short term duration, used for hedging, or are marketable equity securities are typically designated held-for-trading. Held-for-trading securities are carried at estimated fair value principally based on market prices and dealer quotes received from third-party and nationally-recognized pricing services. Gains and losses for held-for-trading are reported on the income statement as gains on investment securities, net. As of December 31, ~~2017~~2023 and ~~2016,~~2022, the Company did not make any adjustments to the prices provided by the third-party pricing service.

Security transactions are recorded on the trade date. Realized gains and losses are determined using the specific identification method and are recorded in non-interest income. Interest and dividends on securities are recorded using the accrual method. Premiums and discounts on securities are amortized or accreted into interest income using the level-yield method over the remaining period to contractual maturity, adjusted for the effect of actual prepayments in the case of mortgage-backed securities ("MBSs") and collateralized mortgage obligations ("CMOs"). These estimates of prepayment assumptions are made based upon the actual performance of the underlying security, current interest rates, the general market consensus regarding changes in mortgage interest rates, the contractual repayment terms of the underlying loans, the priority rights of the investors to the cash flows from the mortgage securities and other economic conditions. When differences arise between anticipated prepayments and actual prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. Unamortized premium or discount is adjusted to the amount that would have existed had the new effective yield been applied since purchase, with a corresponding charge or credit to interest income.

Management evaluates securities for other-than-temporary impairment ("OTTI") on a periodic basis. Factors considered in determining whether an impairment is OTTI include: (1) the length of time and the extent to which the fair value has been less than amortized cost, (2) projected future cash flows, (3) the financial condition and near-term prospects of the issuers, and (4) the intent and ability of the Company to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. The Company records an OTTI loss in an amount equal to the entire difference between the fair value and amortized cost if: (1) the Company intends to sell an impaired investment security, (2) it is more likely than not that the Company will be required to sell the investment security before its amortized cost, or (3) for debt securities, the present value of expected future cash flows is not sufficient to recover the entire amortized cost basis. If an investment security is determined to be OTTI but the Company does not intend to sell the investment security, only the credit portion of the estimated loss is recognized in earnings, with the non credit portion of the loss recognized in other comprehensive income.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

~~December 31, 2017, 2016 and 2015~~

Restricted Equity Securities

The Company invests in the stock of the ~~FHLBB,~~FHLB, the Federal Reserve Bank of Boston and the Federal Reserve Bank of New York, and a small amount of other restricted securities. No ready market exists for these stocks, and they have no quoted market values. The Banks, as members of the ~~FHLBB,~~FHLB, are required to maintain investments in the capital stock of the ~~FHLBB~~FHLB equal to their membership base investments plus an activity-based investment determined according to the Banks' level of outstanding ~~FHLBB~~FHLB advances. The Company has also purchased Federal Reserve Bank of Boston and Federal Reserve Bank of New York stock ~~was purchased and~~which is redeemable at par. The Company reviews for impairment of these securities based on the ultimate recoverability of the cost basis in the stock. As of December 31, ~~2017~~2023 and ~~2016,~~2022, no impairment has been recognized.

Loans

~~Originated~~ Loans and Leases Held-to-Maturity

Loans the Company originates for the portfolio, and for which it has the intent and ability to hold to maturity, are reported at amortized cost, inclusive of deferred loan origination fees and expenses, less unadvanced funds due to borrowers on loans and the allowance for loan and lease losses.

Interest income on loans and leases originated for the portfolio is accrued on unpaid principal balances as earned. Loan origination fees and direct loan origination costs are deferred, and the net fee or cost is recognized in interest income using the interest method. Deferred amounts are recognized for fixed-rate loans over the contractual life of the loans and for adjustable-rate loans over the period of time required to adjust the contractual interest rate to a yield approximating a market rate at the origination date. If a loan is prepaid, the unamortized portion of the loan origination costs, including third party referral related costs not subject to rebate from the dealer, is charged to income.

Loans and Leases Held-for-Sale

Management identifies and designates certain newly originated loans and leases for sale to specific financial institutions, subject to the underwriting criteria of those financial institutions. These loans and leases are held for sale and are carried at the lower of cost or market as determined in the aggregate. Deferred loan fees and costs are included in the determination of the gain or loss on sale.

~~Acquired Loans~~

~~Acquired~~ The Company had no loans ~~that have evidence~~and leases held-for-sale as of ~~deterioration of credit quality since origination~~December 31, 2023 and for which it is probable, at acquisition, that the Company will be unable to collect all contractually required payments receivable are initially recorded at fair value (as determined by the present value of expected future cash flows) with no valuation allowance. The difference between the undiscounted cash flows expected at acquisition and the recorded fair value of the loan, or the “accretable yield,” is recognized as interest income on a level-yield method over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “nonaccretable difference,” are not recognized as a yield adjustment or as a loss accrual or a valuation allowance. Increases in expected cash flows subsequent to the initial investment are recognized prospectively through adjustment of the yield on the loan over its remaining life. Decreases in expected cash flows are recognized as impairment. Valuation allowances on these impaired loans reflect only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately are not to be received).2022.

Nonperforming Loans

Nonaccrual Loans

Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's judgment, reasonable doubt exists as to the full timely collection of interest. Exceptions may be made if the loan has matured and is in the process of renewal or is well-secured and in the process of collection. When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current interest income. Interest payments on nonaccrual loans are generally applied to principal. If collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six consecutive months of performance has been achieved.

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Impaired Loans

A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due (both interest and principal) according to the contractual terms of the loan agreement. Smaller-balance, homogeneous loans that are evaluated collectively for impairment, such as residential, home equity and other consumer loans are specifically excluded from the impaired loan portfolio except where the loan is ~~classified as a troubled debt restructuring.~~modified. The Company has defined the population of impaired loans to include nonaccrual loans and ~~troubled debt restructured ("TDR")~~modified loans.

When the ultimate collectability of the total principal of an impaired loan or lease is in doubt and the loan is on nonaccrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan or lease is not in doubt and the loan or lease is on nonaccrual status, contractual interest is credited to interest income when received, under the cash basis method.

The value of an impaired loan is measured based upon the present value of expected future cash flows discounted at the loan's effective interest rate, or the fair value of the collateral if the loan is collateral-dependent and its payment is expected

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

solely based on the underlying collateral. For impaired loans deemed collateral dependent, where impairment is measured using the fair value of the collateral, the Company will either obtain a new appraisal or use another available source of collateral assessment to determine a reasonable estimate of the fair value of the collateral.

Interest collected on impaired loans is either applied against principal or reported as income according to management's judgment as to the collectability of principal. If management does not consider a loan ultimately collectible within an acceptable time frame, payments are applied as principal to reduce the loan balance. If full collection of the remaining recorded investment should subsequently occur, interest receipts are recorded as interest income on a cash basis.

~~Troubled Debt Restructured Loans~~Loan Modifications

~~In cases where a borrower experiences financial difficulties and the Company makes certain concessionary modifications to contractual terms, the loan is classified as a TDR loan.~~ In determining whether a debtor is experiencing financial difficulties, the Company considers, among other factors, whether the debtor is in payment default or is likely to be in payment default in the foreseeable future without the modification, if the debtor declared or is in the process of declaring bankruptcy, there is substantial doubt that the debtor will continue as a going concern, the debtor's entity-specific projected cash flows will not be sufficient to service its debt, if the debtor has securities that have been delisted or are in the process of being delisted, or the debtor cannot obtain funds from sources other than the existing creditors at market terms for debt with similar risk characteristics.

~~Large groups~~Disclosable modifications under current guidance include principal forgiveness, interest rate reductions, significant payment delays, maturity extensions, or any combination of ~~small-balance homogeneous~~the aforementioned modifications. The Company tracks and discloses the performance of these modifications with respect to delinquency and re-modification status.

The current guidance also eliminates the requirement to measure the allowance using a Discounted Cash Flow (“DCF”) methodology, and allows for a portfolio-based methodology for modified loans ~~such as residential real estate, residential construction, home equity~~to troubled borrowers. If the DCF approach is still utilized for individually evaluated loans, the discount rate used must be the modified effective interest rate, rather than the original effective interest rate. Typically, modified loans to troubled borrowers are Substandard credits and ~~other consumer portfolios~~ are ~~collectively~~already evaluated for impairment. As such, the Company does not typically identify individual loans within these groupings as impaired loans or for impairment evaluation and disclosure. However, the Company evaluates all TDRs for impairment on an individual ~~loan basis regardless of loan type.~~

Modifications may include interest-rate reductions, short-term (defined as one year or less) changes in payment structure to interest-only payments, short-term extensions of the loan's original contractual term, or less frequently, principal forgiveness, interest capitalization, forbearance and other actions intended to minimize economic loss and avoid foreclosure or repossession of collateral. Typically, TDRs are placed on nonaccrual status and reported as nonperforming loans. Generally, a nonaccrual loan that is restructured remains on nonaccrual for a period of six months to demonstrate that the borrower can meet the restructured terms; however, performance prior to the restructuring, or significant events that coincide with the restructuring, are considered in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of restructuring or after a shorter performance period. If the borrower's ability to meet the revised payment schedule is not reasonably assured, the loan remains classified as a nonaccrual loan.

Loans restructured at an interest rate equal to or greater than that of a new loan with comparable risk at the time the loan agreement is modified may be excluded from restructured loan disclosures in years subsequent to the restructuring if they are in compliance with the modified terms.

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

basis.

Allowance for ~~Loan and Lease~~Credit Losses

Management has established a methodology to determine the adequacy of the allowance for ~~loan and lease~~credit losses that assesses the risks and losses ~~inherent in~~expected on the loan and lease ~~portfolio.~~portfolio and unfunded commitments. Additions to the allowance for ~~loan and lease~~credit losses are made by charges to the provision for credit losses. Losses on loans and leases are charged off against the allowance when all or a portion of a loan or lease is considered uncollectible. Subsequent recoveries on loans previously charged off, if any, are credited to the allowance when realized.

~~Management uses a consistent and systematic process and methodology to evaluate the adequacy of~~To calculate the allowance for loans collectively evaluated, management uses models developed by a third party. The Commercial real estate ("CRE"), Commercial and industrial ("C&I"), and Retail lifetime loss rate models calculate the expected losses over the life of the loan based on exposure at default loan attributes and ~~lease losses~~reasonable, supportable economic forecasts. The exposure at default considers the current unpaid balance, prepayment assumptions and utilization of expected utilization assumptions. The expected loss estimates for two small commercial portfolios and a runoff auto portfolio are based on ~~a quarterly basis. For purposes of determining the allowance for loan and lease losses, the Company has segmented certain loans and leases~~historical loss rates.

Key assumptions used in the models include portfolio segmentation, prepayments, the expected utilization of unfunded commitments, risk rating and a scalar, among others. The portfolios are segmented by ~~product~~loan level attributes such as loan type, ~~into~~loan size, date of origination, and delinquency status to create homogenous loan pools. Pool level metrics are calculated and loss rates are subsequently applied to the ~~following segments: (1) commercial real estate~~pools as the loans ~~(2) commercial loans~~have like characteristics. Prepayment assumptions are embedded within the models and ~~leases, (3) and consumer loans. Portfolio segments~~ are ~~further disaggregated into classes~~ based on the ~~associated risks within~~same data used for model development and incorporate adjustments for reasonable and supportable forecasts. Model development data and developmental time periods vary by model, but all use at least ten years of historical data and capture at least one recessionary period. Expected utilization is based on current utilization and a loan equivalency ("LEQ") factor. LEQ varies by current utilization and provides a reasonable estimate of expected draws and borrower behavior. Assumptions and model inputs are reviewed in accordance with model monitoring practices and as information becomes available.

Historical loss rate models apply a loss rate to the ~~segments. Commercial real estate~~outstanding balance of the loan. Management uses historical loss rates for condominium association, auto, and government lease portfolio segments because these loans have distinct, historical, or expected loss patterns and a de minimus effect on the overall allowance and provision.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Management elected to use multiple economic forecasts in determining the reserve to account for economic uncertainty. The forecasts include various projections of Gross Domestic Product ("GDP"), interest rates, property price indices, and employment measures. The forecasts are ~~divided into three classes: commercial real estate mortgage~~probability-weighted based on available information at the time of the calculation execution. Scenario weighting and model parameters are reviewed for each calculation and are subject to change. The models recognize that the life of a loan may exceed the economic forecast, therefore, the models employ mean reversion techniques at the input level to predict credit losses for loans ~~multi-family mortgage loans,~~that are expected to mature beyond the forecast period. The forecasts utilized at December 31, 2023 reflect the immediate and ~~construction loans. Commercial loans~~longer-term effects of a rising interest rate environment and ~~leases~~inflationary conditions.

The CRE lifetime loss rate, C&I lifetime loss rate, and Retail lifetime loss rate models were developed using the historical loss experience of all banks in the model’s developmental dataset. Banks in the model’s developmental dataset may have different loss experiences due to geography and portfolio as well as variances in operational and underwriting procedures from the Company, and therefore, the Company calibrates expected losses using a scalar for each model. Each scalar was calculated by examining the loss rates of peer banks that have similar operations and asset bases to the Company and comparing these peer group loss rates to the model results. Peer group loss rates were used in the scalar calculation because management believes the peer group’s historical losses provide a better reflection of the Company’s current portfolio and operating procedures than the Company’s historical losses. Qualitative adjustments are divided into three classes: commercial loans which includes taxi medallion loans, equipment financing, and loans to condominium associations. Consumer loans are divided into three classes: residential mortgage loans, home equity loans, and other consumer loans. A formula-based credit evaluation approach isalso applied to ~~each group, coupled with an analysis~~select segments of ~~certain loans~~the loan portfolio where applicable.

For December 31, 2023, management applied qualitative adjustments to the CRE lifetime loss rate and C&I lifetime loss rate. These adjustments were made based on historical loss patterns, current loan and portfolio metrics, and expert judgment based on professional experience. These qualitative adjustments resulted in additions to reserves for ~~impairment.~~the CRE and C&I portfolio, as compared to the model output.

The general allowance related to loans collectively evaluated for impairment iswas determined using a formula-based approach utilizing the risk ratings of individual credits and loss factors derived from historic portfolio loss rates over a lookback period, which include estimates of incurred losses over an estimated loss emergence period (“LEP”). The LEP was generated utilizing a charge-off look-back analysis which studied the time from the first indication of elevated risk of repayment (or other early event indicating a problem) to eventual charge-off to support the LEP considered in the allowance calculation. This

reserving methodology established the approximate number of months of LEP that ~~represents~~represented incurred losses for each portfolio.

In addition to quantitative measures, relevant qualitative factors ~~include,~~included, but ~~are~~were not limited to: (1) levels and trends in past due and impaired loans, (2) levels and trends in charge-offs, (3) changes in underwriting standards, policy exceptions, and credit policy, (4) experience of lending management and staff, (5) economic trends, (6) industry conditions, (7) effects of changes in credit concentrations, (8) interest rate environment, and (9) regulatory and other changes. The general allowance related to the acquired loans collectively evaluated for impairment iswere determined based upon the degree, if any, of deterioration in the pooled loans subsequent to acquisition. The qualitative factors used in the determination ~~are~~was the same as those used for originated loans.

During 2015, the Company enhanced and refined its general allowance methodology. Under the enhanced methodology, management combined the historical loss histories of the Banks to generate a single set of historical loss ratios. Management believes it is appropriate to aggregate the ratios as the Banks share common environmental factors, operate in similar geographic markets, and utilize common underwriting standards in accordance with the Company's Credit Policy. In prior periods, a historical loss history applicable to each Bank was used.

Management employed a similar analysis for the consolidation of the qualitative factors as it did for the quantitative factors. Again, management believes the realignment of the existing nine qualitative factors used at each of the Banks into a single group of factors used for the Company is appropriate based on the commonality of environmental factors, markets and underwriting standards among the Banks. Prior to 2015, each of the Banks utilized a set of qualitative factors applicable to each Bank.

The Company’s December 31, 2017 allowance calculation included a further segmentation of the commercial loans and leases to reflect the increased risk in the Company’s taxi medallion portfolio. As of December 31, 2017, this portfolio is approximately $19.7 million. Based on industry conditions, management established a loss factor for this portfolio that best represents the changing risks associated with it.

Based on the refinements to the Company’s allowance methodology discussed above, management determined that the potential risks anticipated by the unallocated allowance are now incorporated into the allowance methodology, making the unallocated allowance unnecessary. Prior to 2015, the unallocated allowance was used to recognize the estimated risk associated with the allocated general and specific allowances. It incorporated management’s evaluation of existing conditions that were not included in the allocated allowance determinations and provided for losses that arise outside of the ordinary course of business.

Specific ~~valuation allowances~~reserves are established for ~~impaired originated~~ loans ~~with book values~~individually evaluated for impairment when amortized cost basis is greater than the discounted present value of expected future cash flows or, in the case of collateral-dependent ~~impaired~~ loans, ~~for any~~when there is an excess of a loan's

~~F-16~~

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

~~book balance and~~ amortized cost basis over the fair value of its underlying collateral. ~~Specific valuation allowances~~When loans and leases do not share risk characteristics with other financial assets they are established for acquired loans with deterioration in the discounted present value of expected future cash flows since acquisitions or, in the case of collateral dependent impaired loans, for any increase in the excess of a loan's book balance greater than the fair value of its underlying collateral. A specific valuation allowance for losses on TDR loans is determined by comparing the net carrying amount of the troubled debt restructured loan with the restructured loan's cash flows discounted at the original effective rate. Impairedevaluated individually. Individually evaluated loans are reviewed quarterly with adjustments made to the calculated reserve as necessary.

As of December 31, 2017, management believes that the methodology for calculating the allowance is sound and that the allowance provides a reasonable basis for determining and reporting on probable losses in the Company’s loan portfolios.

Liability for Unfunded Commitments

In the ordinary course of business, the Company enters into commitments to extend credit, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. The credit risk associated with these commitments is evaluated in a manner similar to the allowance for loan and lease losses.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Premises and Equipment

Premises and equipment are carried at cost less accumulated depreciation and amortization, except for land which is carried at cost. Premises and equipment are depreciated using the straight-line method over the estimated useful life of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the improvements.

Costs related to internal-use software development projects that provide significant new functionality are capitalized. Internal-use software is software acquired or modified solely to meet the Company's needs and for which there is no plan to market the software externally. Direct and indirect costs associated with the application development stage of internal use software are capitalized until such time that the software is substantially complete and ready for its intended use. Capitalized costs are amortized on a straight-line basis over the remaining estimated life of the software. Computer software and development costs incurred in the preliminary project stage, as well as training and maintenance costs, are expensed as incurred.

Leases

The Company leases ~~properties for offices and branches in the states of Massachusetts, Rhode Island and New York. Lease~~certain office space under various noncancellable operating leases as well as certain other assets. These leases have terms ~~range~~ranging from ~~five years~~1 year to over ~~25 years with~~20 years. Certain leases contain renewal options ~~to renew. Management performs an analysis to determine proper~~and escalation clauses which can increase rental expenses based principally on the consumer price index and fair market rental value provisions. Right-of-use lease ~~accounting~~assets are carried on the balance sheet at amortized cost and corresponding lease ~~inception and for each renewal. If a lease meets any of~~liabilities are carried on the ~~following four criteria, the lease is classified as capital lease. The four criteria are: transfer of ownership by the end of lease term; contains bargain purchase option; lease term is~~balance sheet at ~~least 75% of the property’s estimated remaining economic life; or~~ present value of the future minimum lease ~~payment is at least 90%~~payments, adjusted for any initial direct costs and incentives. All of the ~~fair value of the leased property. All~~Company's current outstanding leases are classified as operating ~~leases and rental payments are expensed as incurred. Certain leases contain rent escalation clauses which are amortized over the life of the lease under the straight-line method.~~leases.

Bank-Owned Life Insurance

The Company acquired bank-owned life insurance ("BOLI") plans as part of its acquisitions of PCSB Bank, First Ipswich Bank and BankRI. BOLI represents life insurance on the lives of certain current and former employees who have provided positive consent allowing their employer to be the beneficiary of such policies. BankRI and Brookline Bank as successor in interest to First Ipswich Bank, are the beneficiaries of their respective policies. ~~BankRI and First Ipswich~~The Banks utilize BOLI as tax-efficient financing for their benefit obligations to their employees, including their retirement obligations and Supplemental Executive Retirement Plans ("SERPs").

Since ~~BankRI and First Ipswich~~the Banks are the primary beneficiaries of their respective insurance policies, increases in the cash value of the policies, as well as insurance proceeds received, are recorded in non-interest income and are not subject to income taxes. BOLI is recorded at the cash value of the policies, less any applicable cash surrender charges, and is reflected as an asset in the accompanying consolidated balance sheets. Cash proceeds, if any, are classified as cash flows from investing activities.

The Company reviews the financial strength of the insurance carriers prior to the purchase of BOLI to ensure minimum credit ratings of at least investment grade. The financial strength of the carriers is reviewed at least annually, and BOLI with any individual carrier is limited to 10% of the Company's capital. Total BOLI is limited to 25% of the Company's capital.

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~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Goodwill and Other Identified Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill andindefinite-lived identified intangible assets are not subject to amortization. Definite-lived identified intangible assets are assetsresulting from acquisitions that are being amortized over their estimated useful lives. The recoverability of goodwill and identified intangible assets is evaluated for impairment at least annually. ~~As part of this evaluation, the~~A Company ~~makes~~can perform a qualitative assessment of whether it is more likely than not that the fair value of an acquired asset is greater than its carrying amount. If the Company qualitatively concludes that it is more likely than not that the fair value of an acquired asset is greater than its carrying amount, no further testing is necessary. If, however, the Company qualitatively concludes that the fair value of an acquired asset is less than its carrying value, the Company should recognize an impairment charge for the amount by which the carrying amount exceeds the fair value. However, in accordance with ASC 350-20-35-3B, an entity can bypass the qualitative assessment and perform the quantitative impairment test. Given the current economic environment, a quantitative analysis was performed where management selected a sample of comparable acquisitions and calculated the control premium associated with each sale. The Company’s market capitalization times the sampled control premium allowed management to compare the calculated fair value to the Company’s current book value to determine if an adjustment to goodwill is warranted. The Company did not have any impairment of Goodwill and other identified intangible assets as of December 31, ~~2017~~2023 and ~~2016.~~2022. Further analysis of the Company’s goodwill can be found in Note 9 “Goodwill and Other IntangibleAssets” within notes to the consolidated financial statements.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

OREO and Other Repossessed Assets

OREO and other repossessed assets consists of properties acquired through foreclosure, real estate acquired through acceptance of a deed in lieu of foreclosure and loans determined to be substantively repossessed. Real estate loans that are substantively repossessed include only those loans for which the Company has taken possession of the collateral. OREO and other repossessed assets which consist of vehicles and equipment, if any, are recorded initially at estimated fair value less costs to sell, resulting in a new cost basis. The amount by which the recorded investment in the loan exceeds the fair value (net of estimated cost to sell) of the foreclosed or repossessed asset is charged to the allowance for loan and lease losses. Such evaluations are based on an analysis of individual properties/assets as well as a general assessment of current real estate market conditions. Subsequent declines in the fair value of the foreclosed or repossessed asset below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value are recorded as reductions in the allowance, but not below zero. Rental revenue received on foreclosed or repossessed assets is included in other non-interest income, whereas operating expenses and changes in the valuation allowance relating to foreclosed and repossessed assets are included in other non-interest expense. Certain costs used to improve such properties are capitalized. Gains and losses from the sale of OREO and other repossessed assets are reflected in non-interest expense when realized. Together with nonperforming loans, OREO and repossessed assets comprise nonperforming assets.

Derivatives

The Company utilizes loan level derivatives which consists of interest rate ~~swap agreements~~contracts (swaps, caps and floors), and risk participation agreements as part of the Company's interest-rate risk management strategy for certain assets and liabilities and not for speculative purposes. Based on the Company's intended use for the loan level derivatives at inception, the Company designates the derivative as either an economic hedge of an asset or liability, or a hedging instrument subject to the hedge accounting provisions of FASB ASC Topic 815, "Derivatives and ~~Hedging."~~Hedging". These derivatives designated as cash flow hedges involve the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable rate payments.

Loan level derivatives and foreign exchange contracts entered into on behalf of our customers are designated as economic hedges and are recorded at fair value within other assets or liabilities. Changes in the fair value of these non hedging derivatives are recorded directly through earnings at each reporting period.

Transfer of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Securities Sold under Agreements to Repurchase

The Company enters into sales of securities under agreements to repurchase with the Banks' commercial customers. These agreements are treated as financings, and the obligations to repurchase securities sold are reflected as a liability in the consolidated balance sheets. Securities pledged as collateral under agreements to repurchase are reflected as assets in the accompanying consolidated balance sheets.

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~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Employee Benefits

Costs related to the Company's 401(k) plan are recognized in current earnings. Costs related to the Company's nonqualified deferred compensation plan, SERPs and postretirement benefits are recognized over the vesting period or the related service periods of the participating employees. Changes in the funded status of postretirement benefits are recognized through comprehensive income in the year in which changes occur.

~~Compensation expense for the Company's~~The Company previously maintained an Employee Stock Ownership ~~Program~~Plan ("ESOP") is recorded at an amount equal to the shares allocated by the ESOP multiplied by the average fair market value of the shares during the year. The Company recognizes compensation expense ratably over the year based upon the Company's estimate of the number of shares expected to be allocated by the ESOP. The difference between the average fair market valuewhich was closed pending final regulatory and ~~the cost of the shares allocated by the ESOP is recorded as an adjustment to additional paid-in capital.~~government approval.

The fair value of restricted stock awards and stock option grants are determined as of the grant date and are recorded as compensation expense over the period in which the shares of restricted stock awards and stock options vest. Forfeitures are accounted for as they occur.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Fair Value Measurements

ASC 820-10, "Fair Value Measurements and Disclosures," defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities. It is not a forced transaction. Market participants are buyers and sellers in the principal market that are independent, knowledgeable, able to transact, and willing to transact.

A fair-value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs are included in ASC 820. The fair value hierarchy is as follows:

Level 1: Inputs are unadjusted quoted prices in active markets for assets and liabilities identical to those reported at fair value.

Level 2: Inputs other than quoted prices included within Level 1. Level 2 inputs are observable either directly or indirectly. These inputs might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Level 3: Inputs are unobservable inputs for an asset or liability that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. These inputs are used to determine fair value only when observable inputs are not available.

Earnings per Common Share

Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares of common stock outstanding for the applicable period, exclusive of Treasury shares ~~unearned ESOP shares~~ and unvested shares of restricted stock. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potential dilutive common shares outstanding during the period. The dilutive effects of options and unvested restricted stock awards are computed using the "treasury stock" method. Management evaluated the "two class" method and concluded that the method did not apply to the Company's EPS calculation.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Tax positions that are more likely than not to be sustained upon a tax examination are recognized in the Company's financial statements to the extent that the benefit is greater than 50% likely of being recognized. Interest resulting from underpayment of income taxes is classified as income tax expense in the first period the interest would begin accruing according to the provision of the relevant tax law. Penalties resulting from underpayment of income taxes are classified as income tax expense in the period for which the Company claims or expects to claim an uncertain tax position or in the period in which the Company's judgment changes regarding an uncertain tax position.

For new investment tax credits ("ITC"), the Company chose to apply the flow-through method and immediately recognize the ITC benefit in income tax expense, as opposed to deferring.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Business Combinations

Treasury Stock

Any shares repurchased under the Company's share repurchase programs were purchased in open-market transactions and are held as treasury stock. Treasury stock also consists of common stock withheld to satisfy federal, state and local income tax withholding requirements for employee restricted stock awards upon vesting. All treasury stock is held at cost.

Segment Reporting

An operating segment is defined as a component of a business for which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and evaluate performance. The Company is a bank holding company with subsidiaries engaged in the business of banking and activities closely related to banking. The Company's banking business provided substantially all of its total revenues and pre-tax income in ~~2017, 2016~~2023, 2022 and ~~2015.~~2021. Therefore, the Company has determined to be a single segment.

~~Recent~~ Accounting ~~Pronouncements~~Standards Adopted in 2023, 2022 and 2021

In ~~February 2018,~~March 2020, the FASB issued ~~Accounting Standards Update (ASU) No. 2018-02, "Income Statement-Reporting Comprehensive Income~~ASU 2020-04, " Reference Rate Reform (Topic ~~220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income" was issued to address a narrow-scope financial reporting issue that arose as a consequence~~848)-Facilitation of the ~~change~~Effects of Reference Rate Reform on Financial Reporting" ("ASU 2020-04") to provide optional expedients and exceptions for applying GAAP to certain contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference the ~~tax law. On~~London Interbank Offered Rate ("LIBOR") or another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract modifications made and hedging relationships existing as of December ~~22, 2017,~~31, 2022, for which an entity has elected certain optional expedients provided that those elections are retained through the ~~U.S. federal government enacted a tax bill, H.R.1, An Act to Provide for Reconciliation Pursuant to Titles II and V~~end of the ~~Concurrent Resolution on the Budget for Fiscal Year 2018 (the “Tax Reform Act”).~~hedging relationship. The ASU No. 2018-02 requires a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the newly enacted federal corporate income tax rate. The amount of the reclassification would be the difference between the historical corporate income tax rate of 35 percent and the newly enacted 21 percent corporate income tax rate. The ASU No. 2018-02 isamendments in this update are effective for all entities ~~for fiscal years beginning~~as of March 12, 2020 through December 31, 2022 and do not apply to contract modifications made after December 15, 2018, and interim periods within those fiscal years with early adoption permitted, including adoption in any interim period, for (i) public business entities for reporting periods for which financial statements have not yet been31, 2022.

In January 2021, FASB issued ~~and (ii) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The changes are required~~ASU 2021-01, "Reference Rate Reform (Topic 848)" an update to ~~be applied retrospectively to each period (or periods) in which~~address concerns around structural risk of interbank offered rates ("IBORs"), particularly, the ~~effect~~risk of cessation of the ~~change~~LIBOR. The amendments in this update clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the ~~U.S. federal corporate income tax rate in~~discounting transition. In December 2022, FASB issued ASU 2022-06, "Reference Rate Reform (Topic 848)" which deferred the ~~Tax Cuts and Jobs Act~~sunset date of ~~2017 is recognized. Management early adopted this ASU as of~~Topic 848 to December 31, ~~2017, which resulted~~2024, to allow for a transition period after the sunset of LIBOR. The Company has adopted the amendments in these updates and established a LIBOR transition committee to guide the ~~reclassification~~Company’s transition from ~~accumulated other comprehensive loss~~LIBOR. The Company has completed much of the work to ~~retained earnings totaling $1.1 million, reflected in~~transition off the ~~Consolidated Statements~~LIBOR index consistent with industry timelines. The working group has identified its products that utilize LIBOR and has implemented fallback language to facilitate the transition to alternative rates. The Company has also evaluated its infrastructure and identified fallback rates as well as started offering alternative indices and new products tied to these alternative indices. The Company does not anticipate the adoption of ~~Changes in Shareholders' Equity.~~these standards to have a material impact to the consolidated financial statements.

In ~~November 2017,~~August 2021, the FASB issued ASU ~~2017-14, Income Statement-Reporting Comprehensive Income~~2021-06, "Presentation of Financial Statements (Topic ~~220)~~205), ~~Revenue Recognition~~Financial Services – Depository and Lending (Topic ~~605)~~942), and ~~Revenue from Contracts~~Financial Services – Investment Companies (Topic 946) which updated guidance to align with ~~Customers (Topic 606): Amendments~~new SEC regulations with regards to ~~SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 116~~statistical disclosures for banking and ~~SEC Release No. 33-10403. This ASU was issued to amend certain SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No.116~~savings and SEC Release No. 33-10403, which bring existing guidance into conformity with Topic 606, Revenue from Contract with Customers. The ASU was effective for annual periods beginning after December 15, 2017. Management has determined that this ASU does apply as of December 31, 2017 and has determined the impact to be immaterial. The standard will be adopted on January 1, 2018.

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. FASB issued this Update to address the diversity in practice as well as the cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. For public entities, this ASU is effective for annual reporting periods beginning after December 15, 2017. Management has evaluated this ASU and has determined that ASU 2017-09 does apply as of December 31, 2017.

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

In March 2017, the FASB issued Accounting Standards Update ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). This ASU was issued primarily to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost.loan institutions. This ASU is effective for ~~annual reporting periods beginning~~fiscal years ending on or after December 15, ~~2017. Management has determined that this~~2021. The Company adopted ASU ~~does apply~~2021-06 as of December 31, ~~2017 and has determined the impact to be immaterial.~~2021. The ~~standard will be adopted on January 1, 2018.~~

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This ASU was issued to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. For public entities, this ASU is effective for the fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted and application should be on a prospective basis. Management has evaluated this ASU and as of December 31, 2017, the Company has adopted the ASU and determined the impact to be immaterial.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This ASU was issued to provide clarification and uniformity on the presentation and classification of certain cash receipts and cash payments in the statement of cash flows under Topic 230. Early adoption is permitted as of the fiscal years beginning after December 15, 2017, for public entities that file with the SEC. The Company adopted ASU 2016-15 effective January 1, 2017 and the adoption did not have a material impact on the Company’s consolidated financial statements.

In ~~June 2016,~~October 2021, the FASB issued ASU ~~2016-13,~~2021-08, "Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers" which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue from Contracts with Customers. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial ~~instruments~~Statements (Continued)

as if it had originated the contracts. The Company adopted ASU 2021-08 as of January 1, 2023 on a prospective basis. The adoption did not have a material impact on the Company's consolidated financial statements.

In March 2022, the FASB issued ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326)~~: Measurement~~, Troubled Debt Restructurings and Vintage Disclosures" which addresses concerns regarding the complex accounting for loans modified as troubled debt restructurings (“TDRs”) and also the disclosure of ~~Credit Losses on Financial Instruments.~~gross writeoff information included in required vintage disclosures. The ~~intent of this~~Company adopted ASU is to replace the current GAAP method of calculating credit losses. Current GAAP uses a higher threshold at which likely losses can be calculated and recorded. The new process will require institutions to account for likely losses that originally would not have been part of the calculation. The calculation will incorporate future forecasting in addition to historical and current measures. For public entities that file with the SEC, this ASU is effective for the fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This ASU must be applied prospectively to debt securities marked as other than temporarily impaired. A retrospective approach will be applied cumulatively to retained earnings. Early adoption is permitted2022-02 as of ~~the fiscal years beginning after December 15, 2018. Management has determined that~~January 1, 2023. The enhanced disclosure requirements provided for by ASU ~~2016-13 does apply, but has not determined the impact, if any, as of December 31, 2017. In preparation for the adoption in 2019 of this ASU, management formed~~2022-02 were adopted on a ~~steering committee~~prospective basis. Reporting periods prior to ~~oversee~~ the adoption of ASU ~~2016-13.~~2022-02 are presented in accordance with the applicable GAAP. The steering committee along with a project team has developed an approach for implementation and has selected a third party software service provider. The project team is in the testing phase of the third party software.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The intention of this ASU is to provide additional clarification on specific issues brought forth by the FASB and the International Accounting Standards Board Joint Transition Resource Group for Revenue Recognition in relation to Topic 606 and revenue recognition. The ASU was effective for annual periods beginning after December 15, 2017. Management has determined that ASU 2016-12 does apply as of December 31, 2017. Management assembled a project team to address the changes pursuant to Topic 606. The work has been completed on the contracts and management believes there will be no material impact or significant changes in the timing of revenue recognition when considering the amended accounting guidance. The standard will be adopted on January 1, 2018.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU was issued as part of the FASB Simplification Initiative which intends to reduce the complexity of GAAP while improving usefulness to users. The ASU was effective for annual periods beginning after December 15, 2016, and interim periods within those annual reporting periods with early adoption available. The Company adopted ASU 2016-09 effective January 1, 2017 and the adoption did not have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This ASU was issued to clarify how to recognize revenue depending on an entities position, Additional details can be found in ~~relation to another entity involved, on contracts with customers. The entity can either be a principal party or an agent, and must record revenue accordingly. The ASU was effective~~Note 5, "Allowance for annual periods beginning after December 15, 2017. Management has determined that ASU 2016-08 does apply as of December 31, 2017. Management assembled a project team to address the changes pursuant to Topic 606. The work has been completed on the contracts and management believes there will be no material impact or significant changes in the timing of revenue recognition when considering the amended accounting guidance. The standard will be adopted on January 1, 2018Credit Losses".

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(2) Acquisitions

PCSB Financial Corporation

On January 1, 2023, the Company completed its previously announced acquisition (the “merger”) of PCSB Financial Corporation (“PCSB”). Pursuant to the merger agreement, each share of PCSB common stock outstanding at the effective time of the merger was converted into the right to receive, at the holder’s election, either $22.00 in cash consideration or 1.3284 shares of Company common stock for each share of PCSB common stock, subject to allocation procedures to ensure that 60% of the outstanding shares of PCSB common stock was converted to Company common stock. PCSB’s bank subsidiary, PCSB Bank, operates as a separate subsidiary of the Company and has 14 banking offices throughout the Lower Hudson Valley of New York State.

The transaction was accounted for as a business combination. Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their fair values as of the merger effective date. The determination of fair value required management to make estimates about discount rates, future expected cash flows, market conditions, and other future events that are highly subjective in nature and are subject to change. Fair value estimates of the assets acquired and liabilities assumed may be adjusted for a period up to one year (the measurement period) from the closing date of the merger if new information is obtained about facts and circumstances that existed as of the merger effective date that, if known, would have affected the measurement of the amounts recognized as of that date.

During the year ended December 31, ~~2017, 2016~~2023, the Company incurred merger-related expenses totaling $7.4 million.

The following table summarizes the preliminary purchase price allocation to the estimated fair value of the assets acquired and ~~2015~~

liabilities assumed as of the date of the acquisition:


	Net Assets Acquired at Fair Value
	(In Thousands)
Purchase price consideration	$	297,791
ASSETS
Cash	42,373
Investments	366,790
Loans (1)	1,336,737
Allowance for credit losses on PCD loans	(2,344)
Premises and equipment	14,631
Core deposit and other intangibles	30,265
Other assets	104,654
Total assets acquired	$	1,893,106
LIABILITIES
Deposits	$	1,570,563
Borrowings	52,923
Other liabilities	52,624
Total liabilities assumed	$	1,676,110
Net assets acquired	216,996
Goodwill	$	80,795

______________________________________________________________________

(1) Includes approximately $16.5 million of Bond Anticipation Notes ("BANs") and Tax Anticipation Notes ("TANs") that were subsequently reclassified as investments.

In February 2016, FASB issued ASU 2016-02, Leases. This ASU requires lessees to put most leases on their balance sheet but recognize expenses on their income statements in a manner similar to current accounting. This ASU also eliminates current real estate-specific provisions for all companies. For lessors, this ASU modifiesconnection with the ~~classification criteria and~~merger, the accounting for sales-type and direct financing leases. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods therein. Early adoption is permitted. Management believes that this ASU applies and has not determinedCompany recorded $80.8 million of goodwill, which represents the ~~impact, if any, as~~excess of ~~December 31, 2017. Management has met to discuss~~ the ~~impact and will assemble a project team to assess steps required for adoption. The steps will include a review of third party lease software service providers.~~

In January 2016, the FASB issued ASU 2016-01, Financial Instruments. This ASU significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated withpurchase price over the fair value of financial instruments. This ASU is effective for fiscal years beginning after December 15, 2017, including interim periods therein. Management has determined that ASU 2016-01 does apply as of December 31, 2017 and management believes the ~~impact to be immaterial.~~

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This ASU was issued to defer the effective date of ASU 2014-09 for all entities by one year. In effect, public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods (including interim reporting periods within those period) beginning after December 15, 2017. Management has determined that ASU 2015-14 does apply as of December 31, 2017. Management assembled a project team to address the changes pursuant to Topic 606. The work has been completed on the contracts and management believes there will be no material impact or significant changes in the timing of revenue recognition when considering the amended accounting guidance. The standard will be adopted on January 1, 2018.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU was issued to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS that would: remove inconsistencies and weaknesses in revenue requirements, provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices across entities industries, jurisdictions, and capital markets, provide more useful information to users of financial statements through improved disclosure requirements and simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. The main provisions in this ASU are 1) Identify the contract(s) with a customer, 2) Identify the performance obligations in the contract, 3) Determine the transaction price, 4) Allocate the transaction price to the performance obligations in the contract and 5) Recognize revenue when (or as) the entity satisfies a performance obligation. The ASU was effective for annual periods beginning after December 15, 2017. Management has determined that this ASU 2014-09 does apply as of December 31, 2017. Management assembled a project team to address the changes pursuant to Topic 606. The work has been completed on the contracts and management believes there will be no material impact or significant changes in the timing of revenue recognition when considering the amended accounting guidance. The standard will be adopted on January 1, 2018.

~~(2) Acquisitions~~

~~First Commons Bank, N.A.~~

On September 20, 2017, the Company and First Commons Bank, N.A. (“First Commons Bank”) entered into a definitive agreement and plan of merger (the “Merger Agreement”) pursuant to which First Commons Bank will merge with and into Brookline Bank. The Company expects to consummate the transaction during the first quarter of 2018, subject to approval by First Commons Bank shareholders, the Board of Governors of the Federal Reserve System and the Massachusetts Division of Banks.

Under the terms of the Merger Agreement, the Company will pay $16.70 per share for the outstanding shares and warrants of First Commons Bank representing a total transaction value of approximately $56.0 million. First Commons Bank stockholders will receive 1.171 shares of the Company's common stock for each First Commons Bank share they own, subject to adjustment based on Company's ten-day, volume-weighted average stock price between $13.19 and $15.33.

First Commons Bank is a national banking association which was organized in 2009 and is headquartered in Newton and Wellesley, Massachusetts. First Commons Bank operates its business from two banking offices located in Massachusetts. First Commons Bank is engaged principally in the business of attracting deposits from the general public and investing those deposits in residential, commercial real estate loans, consumer and small business loans.

net assets acquired.

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Notes to Consolidated Financial Statements (Continued)

~~December 31, 2017, 2016~~Fair values of the major categories of assets acquired and ~~2015~~

liabilities assumed were determined as follows:

Cash and Cash Equivalents

~~At December 31, 2017, First Commons Bank had total~~The fair values of cash and cash equivalents approximate the respective carrying amounts because the instruments are payable on demand or have short-term maturities.

Investments

The fair values for investment securities available-for-sale were based on quoted market prices, where available. If quoted market prices were not available, fair value estimates are based on observable inputs, including quoted market prices for similar instruments. Investment securities held-to-maturity were reclassified to investment securities available-for-sale based on the Company's intent at closing.

In 2023, the Company restructured the investment portfolio acquired from PCSB. The Company sold approximately 75% of the portfolio which equates to $228.3 million of book value of predominantly longer dated Agency mortgage-backed securities ("MBS"), Agency collateralized mortgage obligations ("CMOs"), corporate and municipal securities. The weighted average duration of these securities was 6.1 years with an average risk weighting of assets of ~~approximately $324.8~~33%. The Company recognized a $1.7 million ~~(unaudited),~~gain from selling these securities.

Proceeds from the sale and additional cash on hand was used to purchase $379.5 million of short duration securities, the majority of which are US Treasuries, Agency debt and Agency MBS, and a small position of short term Municipal Bond Anticipation Notes. Additional details can be found in Note 3, "Investment Securities".

The weighted average duration of these securities was 2.1 years with an average risk weighting of assets of 8%.

Loans

The fair value of the loan portfolio was calculated on an individual loan basis using discounted cash flow analysis, with results presented and assumptions applied on a summary basis based on pools in which the loans were classified. This analysis took into consideration the contractual terms of ~~approximately $263.0 million (unaudited), deposits~~the loans and assumptions related to the discount rate, including cost of ~~approximately $282.8 million (unaudited)~~debt, cost of equity, servicing cost and ~~stockholders’ equity~~other liquidity/risk premium considerations to estimate the projected cash flows and prepayment rate. The loss rates for the loans were estimated using Probability of ~~approximately $35.7 million (unaudited).~~Default (cumulative) and Loss Given Default assumptions. The assumptions used in determining the fair value of the loan portfolio were considered reasonable from a market-participant viewpoint.

The Company recorded ~~$411.0 thousand~~a $49.8 million discount from the results of the loan accounting valuation.

Deposits - Core Deposits Intangible ("CDI")

Accounts included in the CDI include demand deposits, NOW accounts, money market accounts and savings accounts. The fair value of the CDI was derived from using a financial institution-specific income approach, specifically the after-tax cost savings method. Assumptions used in the valuation of the CDI include customer attrition, deposit interest rates, service charge income, overhead expense, discount rate, and costs of alternative funding.

The Company recorded a $30.3 million CDI from the results of the deposit valuation. The CDI is being amortized at an accelerated rate over 7 years using the sum-of-the-years method.

Certificates of Deposits

The certificates of deposits were recorded at fair value. The determination of the fair value was calculated using discounted cash flow analysis, which involved present valuing the contractual payments over the remaining life of the certificate of deposit at market based-rates.

The Company recorded a $3.2 million discount from the results of the certificate of deposit valuation.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Borrowings

The fair value of the FHLB advances were ascertained by using discounted cash flow analysis of the contractual payments over the remaining life of the advances at market-based interest rates. The FHLB advances were disaggregated on an individual advance basis and management used FHLB of New York rates as of December 30, 2022 as the market rate in the present value calculation.

The Company recorded a $0.3 million discount on the assumed FHLB advances.

PCD Loans and Leases

Purchased loans and leases that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchase credit deteriorated ("PCD"). For PCD loans and leases, the initial estimate of expected credit losses was established through an adjustment to the unpaid principal balance and non-credit discount at acquisition.

The following table reconciles the unpaid principal balance to the fair value of PCD loans and leases:


(In Thousands)
Total unpaid principal balance	$	16,824
Allowance for credit losses at acquisition	(2,344)
Non-credit discount	(974)
Fair value	$	13,506

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Supplemental Pro Forma Financial Information

The following table summarizes supplemental pro forma financial information giving effect to the merger as if it had been completed on January 1, 2022:


	At December 31,
			2023	2022
		(In Thousands)
Net interest income			339,711	362,773
Non-interest income			30,230	32,290
Net income			94,073	104,558

The supplemental pro forma financial information does not necessarily reflect the results of operations that would have occurred had Brookline Bancorp, Inc. merged with PCSB on January 1, 2022. The supplemental pro forma financial information includes the impact of (i) accreting and ~~acquisition expense in connection~~amortizing the discounts and premiums associated with the ~~proposed acquisition~~estimated fair value adjustments to acquired loans and leases, investment securities, deposits, and borrowings, (ii) the amortization of ~~First Commons Bank~~recognized intangible assets, (iii) accreting and amortizing the discounts and premiums associated with acquired premises and leases, and (iv) the related estimated income tax effects. Costs savings and other business synergies related to the merger are not included in the supplemental pro forma financial information.

In addition, the supplemental pro forma financial information was adjusted to include the $7.4 million of merger-related expenses recognized during the twelve months ended December 31, 2023, as summarized in the following table:


	At December 31,
	2023
	(In Thousands)
Compensation and benefits (1)	$	1,750
Technology and equipment (2)	1,857
Professional and outside services (3)	3,563
Other expense (4)	242
Total merger-related expenses	$	7,412

______________________________________________________________________

(1) Comprised primarily of severance and employee retention costs.

(2) Comprised primarily of technology contract termination fees.

(3) Comprised primarily of advisory, legal, accounting, and other professional fees.

(4) Comprised primarily of costs of travel and other miscellaneous expenses.

Brookline Bancorp, Inc.’s operating results for the year ended December 31, ~~2017.~~2023 include the operating results of acquired assets and assumed liabilities of PCSB subsequent to the merger on January 1, 2023. The amount of net interest income, non-interest income and net income of $63.2 million, $4.5 million and $3.3 million, respectively, attributable to the acquisition of PCSB were included in Brookline Bancorp, Inc.’s Consolidated Statement of Income for the year ended December 31, 2023. PCSB’s net interest income, non-interest income and net income noted above reflect management’s best estimates, based on information available at the reporting date.

(3) Cash, Cash Equivalents and Short-Term Investments

The Banks are required to maintain average reserve balances with the FRB based upon a percentage of certain of the Banks' deposits. As of December 31, 2017 and 2016, the average amount required to be held before a credit for vault cash was $5.9 million and $6.9 million, respectively. Aggregate reserve balances included in cash and cash equivalents were ~~$40.0~~$108.3 million and ~~$30.9~~$301.2 million, respectively, as of December 31, ~~2017~~2023 and ~~2016.~~2022.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Short-term investments are summarized as follows:


	At December 31,				At December 31,
	2017		2016		2023	2022
	(In Thousands)				(In Thousands)
FRB interest bearing reserve	$	28,263	$	19,952
FHLB overnight deposits	4,676		2,142
Federal funds sold	2,444		9,508

Total short-term investments	$	35,383	$	31,602

Total short-term investments

Total short-term investments

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Year Ended December 31, 2016

Investment
Securities
Available-for-Sale

Postretirement
Benefits

Accumulated Other
Comprehensive
Loss
(In Thousands)
Balance at December 31, 2015 $ (2,827 ) $ 351
$ (2,476 )
Other comprehensive (loss) income

(1,386 ) 44
(1,342 )
Balance at December 31, 2016 $ (4,213 ) $ 395
$ (3,818 )

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

~~December 31, 2017, 2016 and 2015~~


	Year Ended December 31, 2022
	Investment Securities Available-for-Sale		Net Change in Fair Value of Cash Flow Hedges		Postretirement Benefits		Accumulated Other Comprehensive Income (Loss)
	(In Thousands)
Balance at December 31, 2021	$	(183)	$	37	$	36	$	(110)
Other comprehensive income (loss)	(60,265)		(2,111)		452		(61,924)
Reclassification adjustment for (income) expense recognized in earnings	255		(168)		—		87
Balance at December 31, 2022	$	(60,193)	$	(2,242)	$	488	$	(61,947)


	Year Ended December 31, 2021
	Investment Securities Available-for-Sale		Net Change in Fair Value of Cash Flow Hedges		Postretirement Benefits		Accumulated Other Comprehensive Income (Loss)
	(In Thousands)
Balance at December 31, 2020	$	16,582	$	7	$	(99)	$	16,490
Other comprehensive income (loss)	(16,795)		37		183		(16,575)
Reclassification adjustment for (income) expense recognized in earnings	30		(7)		(48)		(25)
Balance at December 31, 2021	$	(183)	$	37	$	36	$	(110)

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Year Ended December 31, 2015

Investment
Securities
Available-for-Sale

Postretirement
Benefits

Accumulated Other
Comprehensive
Loss
(In Thousands)
Balance at December 31, 2014 $ (1,733 ) $ 111
$ (1,622 )
Other comprehensive (loss) income (1,094 ) 240
(854 )
Balance at December 31, 2015 $ (2,827 ) $ 351
$ (2,476 )
Notes to Consolidated Financial Statements (Continued)

(16) Derivatives and Hedging Activities

The Company utilizes loan level derivatives which consist of interest-rate contracts (swaps, caps and floors), and risk participation agreements as part of the Company's interest-rate risk management strategy for certain assets and liabilities and not for speculative purposes. Based on the Company's intended use for the loan level derivatives at inception, the Company designates the derivative as either an economic hedge of an asset or liability, or a hedging instrument subject to the hedge accounting provisions of FASB ASC Topic 815, "Derivatives and Hedging".

Interest-rate swap, cap and floor agreements are entered into as hedges against future interest-rate fluctuations on specifically identified assets or liabilities. The Company did not have derivative fair value hedges or derivative cash flow hedges as of December 31, 2017 or 2016.

~~Derivatives not designated as hedges are not speculative, but rather, result from a service the Company provides to certain customers for a fee.~~ The Company executes loan level derivative products such as ~~interest-rate~~interest rate swap agreements with commercial banking customers to aid them in managing their ~~interest-rate~~interest rate risk. The ~~interest-rate~~interest rate swap contracts allow the commercial banking customers to convert ~~floating-rate~~floating rate loan payments to ~~fixed-rate~~fixed rate loan payments. The Company concurrently enters into offsetting swaps with a third party financial institution, effectively minimizing its net risk exposure resulting from such transactions. The ~~third-party~~third party financial institution exchanges the customer's ~~fixed-rate~~fixed rate loan payments for ~~floating-rate~~floating rate loan payments. As the ~~interest-rate~~interest rate swap agreements associated with this program do not meet hedge accounting requirements, changes in the fair value are recognized directly in earnings.

The Company believes using interest rate derivatives adds stability to interest income and expense and allows the Company to manage its exposure to interest rate movements. The Company enters into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable rate payments. The Company enters into interest rate swaps as hedging instruments against the interest rate risk associated with the Company's FHLB borrowings. For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of other comprehensive income, and is reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

The following table reflects the Company's derivative positions as of the date indicated below for interest rate derivatives which qualify as cash flow hedges for accounting purposes. The Company's cash flow hedges are subject to the hedge accounting provisions of FASB ASC Topic 815, "Derivatives and Hedging".


	At December 31, 2023
	Notional Amount		Average Maturity	Weighted Average Rate				Fair Value
				Current Rate Paid		Received Fixed Swap Rate
	(in thousands)		(in years)					(in thousands)
Interest rate swaps on loans	$	225,000	2.90	5.35	%	3.39	%	$	(2,608)


	At December 31, 2022
	Notional Amount		Average Maturity	Weighted Average Rate				Fair Value
				Current Rate Paid		Received Fixed Swap Rate
	(in thousands)		(in years)					(in thousands)
Interest rate swaps on loans	$	150,000	3.77	4.11	%	3.26	%	$	(3,030)

The Company utilizes risk participation agreements with other banks participating in commercial loan arrangements. Participating banks guarantee the performance on borrower-related interest rate swap contracts. Risk participation agreements are derivative financial instruments and are recorded at fair value. These derivatives are not designated as hedges and therefore, changes in fair value are recorded directly through earnings at each reporting period.

Under a risk participation-out agreement, a derivative asset, the Company participates out a portion of the credit risk associated with the interest rate swap position executed with the commercial borrower, for a fee paid to the participating bank. Under a risk participation-in agreement, a derivative liability, the Company assumes, or participates in, a portion of the credit risk associated with the interest rate swap position with the commercial borrower, for a fee received from the other bank.

The Company offers foreign exchange contracts to commercial borrowers to accommodate their business needs. These foreign exchange contracts do not qualify as hedges for accounting purposes. To mitigate the market and liquidity risk associated with these foreign exchange contracts, the Company enters into similar offsetting ~~positions.~~positions with a third party financial institution.

Asset derivatives and liability derivatives are included in other assets and accrued expenses and other liabilities on the consolidated balance sheets.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

The following tables ~~presents~~present the Company's customer related derivative positions for the periods indicated below for those derivatives not designated as ~~hedging.~~hedging:


	Notional Amount Maturing
	Number of Positions	Less than 1 year		Less than 2 years		Less than 3 years		Less than 4 years		Thereafter		Total		Fair Value
	December 31, 2023
	(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable	153	$	69,135	$	156,567	$	66,330	$	244,615	$	1,196,551	$	1,733,198	$	80,118
Pay fixed, receive variable	153	69,135		156,567		66,330		244,615		1,196,551		1,733,198		80,118
Risk participation-out agreements	67	22,979		33,409		6,038		64,875		415,086		542,387		1,238
Risk participation-in agreements	9	—		—		23,155		3,577		73,581		100,313		310

Foreign exchange contracts
Buys foreign currency, sells U.S. currency	23	$	3,262	$	—	$	—	$	—	$	—	$	3,262	$	139
Sells foreign currency, buys U.S. currency	28	3,895		—		—		—		—		3,895		132


	Notional Amount Maturing
	Number of Positions	Less than 1 year		Less than 2 years		Less than 3 years		Less than 4 years		Thereafter		Total		Fair Value
	December 31, 2022
	(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable	132	$	71,547	$	69,454	$	141,498	$	68,140	$	1,139,070	$	1,489,709	$	103,640
Pay fixed, receive variable	132	71,547		69,454		141,498		68,140		1,139,070		1,489,709		103,640
Risk participation-out agreements	54	38,931		22,979		27,508		6,222		297,984		393,624		347
Risk participation-in agreements	8	18,421		—		—		23,766		33,036		75,223		31

Foreign exchange contracts
Buys foreign currency, sells U.S. currency	12	$	2,383	$	—	$	—	$	—	$	—	$	2,383	$	130
Sells foreign currency, buys U.S. currency	12	2,400		—		—		—		—		2,400		112

~~F-62~~

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

~~December 31, 2017, 2016 and 2015~~

~~The following tables presents the Company's customer related derivative positions for the periods indicated below for those derivatives not designated as hedging.~~

Notional Amount Maturing
Number of Positions Less than 1 year Less than 2 years Less than 3 years Less than 4 years Thereafter Total Fair Value
December 31, 2017
(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable 66
$ 3,903
$ 2,036
$ 27,992
$ —
$ 460,728
$ 494,659
$ 8,865
Pay fixed, receive variable 66
3,903
2,036
27,992
—
460,728
494,659
8,865
Risk participation-out agreements 8
—
—
8,613
—
28,014
36,627
65
Risk participation-in agreements 1
—
—
—
—
3,825
3,825
10

Foreign exchange contracts
Buys foreign currency, sells U.S. currency 22
$ 1,495
$ —
$ —
$ —
$ —
$ 1,495
$ 65
Sells foreign currency, buys U.S. currency 44
1,502
—
—
—
—
1,502
72

Notional Amount Maturing
Number of Positions Less than 1 year Less than 2 years Less than 3 years Less than 4 years Thereafter Total Fair Value
December 31, 2016
(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable 54
$ —
$ 4,025
$ 2,141
$ 29,501
$ 348,113
$ 383,780
$ 9,738
Pay fixed, receive variable 54
—
4,025
2,141
29,501
348,113
383,780
9,738
Risk participation-out agreements 5
—
—
—
9,078
7,883
16,961
20

Foreign exchange contracts
Buys foreign currency, sells U.S. currency 3
$ 195
$ —
$ —
$ —
$ —
$ 195
$ —
Sells foreign currency, buys U.S. currency 3
195
—
—
—
—
195
—

As of December 31, 2016, the Company held no risk participation-in agreements and the fair value of the foreign exchange contracts was nominal. Refer also to Note 21, "Fair Value of Financial Instruments."

Changes in the fair value are recognized directly in the Company's consolidated statements of income and are included in other non-interest income in the consolidated statements of income. The table below presents the net gain (loss) recognized in income due to changes in the fair value for the year ended December 31, ~~2017. There were no gains (losses) recognized in income due to changes in the fair value for the year ended December 31, 2016.~~2023 and 2022.

~~F-63~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Year Ended December 31,
2017
(In Thousands)
Gain recognized in income on:
Loan level derivatives $ —
Risk participation-out agreements 55
Foreign exchange contracts 7
Total $ 62


	Year Ended December 31,
	2023		2022
	(In Thousands)
Net (loss) gain recognized in income on:

Net risk participation agreements	$	612	$	(714)
Foreign exchange contracts	(11)		16
Total	$	601	$	(698)

By using derivative financial instruments, the Company exposes itself to credit risk which is the risk of failure by the counterparty to perform under the terms of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company. When the fair value of a derivative is negative, the Company owes the counterparty and, therefore, it does not possess credit risk. The credit risk in derivative instruments is mitigated by entering into transactions with highly-rated counterparties that management believes to be creditworthy and by limiting the amount of exposure to each counterparty by either cross collateralizing the underlying hedged loan or through bilateral posting of collateral to cover exposure. As the swaps are subject to master netting agreements, the Company had limited exposure relating to loan level derivatives with institutional counterparties as of December 31, ~~2017~~2023 and ~~2016.~~2022. The estimated net credit risk exposure for derivative financial instruments was zero as of December 31, ~~2017,~~2023, and ~~2016.~~2022.

Certain derivative agreements contain provisions that require the Company to post collateral if the derivative exposure exceeds a threshold amount. The Company posted collateral of ~~$26.7~~$81.5 million and ~~$34.5~~$2.4 million in the normal course of business as of December 31, ~~2017~~2023 and ~~2016,~~2022, respectively.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

The tables below present the offsetting of derivatives and amounts subject to master netting agreements not offset in the consolidated balance sheet at the dates ~~indicated.~~indicated:


	At December 31, 2023
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position				Net Amount
							Financial Instruments Pledged		Cash Collateral Pledged
	(In Thousands)
Asset derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives	$	234	$	—	$	234	$	—	$	—	$	234
Derivatives not designated as hedging instruments:
Loan level derivatives	$	99,876	$	—	$	99,876	$	—	$	—	$	99,876
Risk participation-out agreements	1,238		—		1,238		—		—		1,238
Foreign exchange contracts	139		—		139		—		—		139
Total	$	101,487	$	—	$	101,487	$	—	$	—	$	101,487

Liability derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives	$	2,842	$	—	$	2,842	$	—	$	—	$	2,842
Derivatives not designated as hedging instruments:
Loan level derivatives	$	99,876	$	—	$	99,876	$	20,353	$	61,153	$	18,370
Risk participation-in agreements	310		—		310		—		—		310
Foreign exchange contracts	132		—		132		—		—		132
Total	$	103,160	$	—	$	103,160	$	20,353	$	61,153	$	21,654

F-62

At December 31, 2017
Gross
Amounts Recognized
Gross Amounts
Offset in the
Statement of Financial Position
Net Amounts Presented in the Statement of Financial Position
Gross Amounts Not Offset in the
Statement of Financial Position
Net Amount
Financial Instruments Pledged Cash Collateral Pledged
(In Thousands)
Asset derivatives
Loan level derivatives $ 8,865
$ —
$ 8,865
$ —
$ —
$ 8,865
Risk participation-out agreements 65
—
65
—
—
65
Foreign exchange contracts 72
—
72
—
—
72
Total $ 9,002
$ —
$ 9,002
$ —
$ —
$ 9,002

Liability derivatives
Loan level derivatives $ 8,865
$ —
$ 8,865
$ 25,159
$ 1,510
$ —
Risk participation-in agreements 10
—
10
—
—
—
Foreign exchange contracts 65
—
65
—
—
—
Total $ 8,940
$ —
$ 8,940
$ 25,159
$ 1,510
$ —

~~F-64~~

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

~~December 31, 2017, 2016 and 2015~~

At December 31, 2016
Gross
Amounts Recognized
Gross Amounts
Offset in the
Statement of Financial Position
Net Amounts Presented in the Statement of Financial Position
Gross��Amounts Not Offset in the
Statement of Financial Position
Net Amount
Financial Instruments Pledged Cash Collateral Pledged
(In Thousands)
Asset derivatives
Loan level derivatives $ 9,738
$ —
$ 9,738
$ —
$ —
$ 9,738
Risk participation-out agreements 20
—
20
—
—
20
Total $ 9,758
$ —
$ 9,758
$ —
$ —
$ 9,758

Liability derivatives
Loan level derivatives $ 9,738
$ —
$ 9,738
$ 33,744
$ 720
$ —
Total $ 9,738
$ —
$ 9,738
$ 33,744
$ 720
$ —

~~As of December 31, 2016, the Company held no risk participation-in agreements and the fair value of the foreign exchange contracts was nominal.~~


	At December 31, 2022
	Gross Amounts Recognized		Gross Amounts Offset in the Statement of Financial Position		Net Amounts Presented in the Statement of Financial Position		Gross Amounts Not Offset in the Statement of Financial Position				Net Amount
							Financial Instruments Pledged		Cash Collateral Pledged
	(In Thousands)
Asset derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives	$	34	$	—	$	34	$	—	$	—	$	34
Derivatives not designated as hedging instruments:
Loan level derivatives	$	108,963	$	—	$	108,963	$	—	$	—	$	108,963
Risk participation-out agreements	347		—		347		—		—		347
Foreign exchange contracts	130		—		130		—		—		130
Total	$	109,474	$	—	$	109,474	$	—	$	—	$	109,474

Liability derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives	$	3,170	$	—	$	3,170	$	—	$	—	$	3,170
Derivatives not designated as hedging instruments:
Loan level derivatives	$	108,963	$	—	$	108,963	$	2,393	$	—	$	106,570
Risk participation-in agreements	31		—		31		—		—		31
Foreign exchange contracts	112		—		112		—		—		112
Total	$	112,276	$	—	$	112,276	$	2,393	$	—	$	109,883

The Company has agreements with certain of its derivative counterparties that contain credit-risk-related contingent provisions. These provisions provide the counterparty with the right to terminate its derivative positions and require the Company to settle its obligations under the agreements if the Company defaults on certain of its indebtedness or if the Company fails to maintain its status as a well-capitalized institution.


	Fair Value
	Year Ended December 31, 2023		Year Ended December 31, 2022
	(Dollars in Thousands)
Derivatives designated as hedges	$	(2,608)	$	(3,136)
(Loss) in OCI on derivatives (effective portion), net of tax	$	(1,582)	$	(2,242)
Gain (loss) reclassified from OCI into interest income or interest expense (effective portion)	$	(3,632)	$	61

The guidance in ASU 2017-12 requires that amounts in accumulated other comprehensive income that are included in the assessment of effectiveness should be reclassified into earnings in the same period in which the hedged forecasted transactions impact earnings. A portion of the balance reported in accumulated other comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made or received on the Company’s interest rate swaps. The Company monitors the risk of counterparty default on an ongoing basis.

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Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(17) Income Taxes

Income tax expense is comprised of the following amounts:


	Year Ended December 31,							Year Ended December 31,
	2017		2016		2015			2023	2022	2021
	(In Thousands)							(In Thousands)
Current provision:							Current provision:
Federal	$	27,825	$	22,954	$	23,340
State	5,013		5,116		4,774
Total current provision	32,838		28,070		28,114
Deferred provision:
Deferred provision (benefit)							Deferred provision (benefit)
Federal	10,209		2,271		679
State	589		51		560
Total deferred provision	10,798		2,322		1,239
Total deferred provision (benefit)
Total provision for income taxes	$	43,636	$	30,392	$	29,353

Total provision for income taxes differed from the amounts computed ~~by applying~~due to the ~~statutory U.S. federal income~~following:


	Year Ended December 31,
	2023			2022			2021
	(Dollars In Thousands)
Expected income tax expense at statutory federal tax rate	$	19,722		$	29,390		$	32,464
State taxes, net of federal income tax benefit	3,977			6,950			7,561
Bank-owned life insurance	(443)			(215)			(261)
Tax-exempt interest income	(307)			(163)			(171)


Merger and acquisition expense	159			302			—
Energy tax credits	(4,504)			(6,082)			—
Investments in affordable housing projects	(917)			(544)			(565)
Other, net	1,228			567			123
Total provision for income taxes	$	18,915		$	30,205		$	39,151
Effective income tax rate	20.1		%	21.6		%	25.3		%

The Company's effective tax rate ~~35.0%~~was 20.1% as of December 31, 2023 compared to ~~income before~~21.6% as of December 31, 2022. The Company's effective tax ~~expense as a result of~~rate was lower in 2023 due to the ~~following:~~

Company's continued participation in energy tax credit investments, and increased benefits in the Company's investments in affordable housing projects.

~~F-65~~

F-64

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

~~December 31, 2017, 2016 and 2015~~

Year Ended December 31,
2017 2016 2015
(Dollars In Thousands)
Expected income tax expense at statutory federal tax rate $ 34,039
$ 29,965
$ 28,603
State taxes, net of federal income tax benefit 3,641
3,358
3,467
Bank-owned life insurance (364 ) (368 ) (367 )
Tax-exempt interest income (873 ) (826 ) (622 )
Income attributable to noncontrolling interest in subsidiary (870 ) (1,163 ) (994 )
Merger and acquisition expense 138
—
—
Tax Reform Act Adjustment 8,965
—
—
Investments in affordable housing projects (653 ) (640 ) (526 )
Other, net (387 ) 66
(208 )
Total provision for income taxes $ 43,636
$ 30,392
$ 29,353
Effective income tax rate 44.9 % 35.5 % 35.9 %

The Company's effective tax rate was 44.9% as of December 31, 2017 compared to 35.5% as of December 31, 2016. The increase in the Company's effective tax rate from 2016 was primarily driven by $9.0 million related to the enactment of the Tax Reform Act and $138.0 thousand of nondeductible merger and acquisition expenses.

On December 22, 2017, the Tax Reform Act was enacted, which represents the most comprehensive reform to the U.S. tax code in over thirty years. The majority of the provisions of the Tax Reform Act takes effect on January 1, 2018. The Tax Reform Act lowers the Company’s federal tax rate from 35% to 21%. The Tax Reform Act also contains other provisions that may affect the Company currently or in future years. Among these are changes to the deductibility of meals and entertainment, the deductibility of executive compensation, accelerated expensing of depreciable property for assets placed in service after September 27, 2017 and before 2023, limits the deductibility of net interest expense, eliminated the corporate alternative minimum tax, limited net operating loss carryforwards to 80% of taxable income and other provisions.

As a result of the Tax Reform Act, management re-valued the carrying value of our net deferred tax asset and investments in low income housing tax credits. The impact of the Tax Reform Act resulted in a write down of the carrying balance of net deferred tax assets and investments in affordable housing projects of $8.6 million and $0.3 million, respectively.

~~F-66~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at the dates indicated are as follows:

At December 31,
2017 2016
(In Thousands)
Deferred tax assets:
Allowance for loan and lease losses $ 15,618
$ 21,655
Deferred compensation 1,032
5,659
Supplemental Executive Retirement Plans 2,805
4,127
Unrealized loss on investment securities available-for-sale 1,728
2,355
Net operating loss carryforwards 415
999
Postretirement benefits 400
465
Nonaccrual interest 551
621
Accrued expense 563
828
Restricted stock and stock option plans 621
573
Employee stock ownership plan 124
147
Other 67
61
Total gross deferred tax assets 23,924
37,490
Deferred tax liabilities:
Identified intangible assets and goodwill 2,778
4,660
Deferred loan origination costs, net 2,918
3,370
Depreciation 1,866
2,193
Prepaid expense 109
1,045
Acquisition fair value adjustments 1,192
975
Total gross deferred tax liabilities 8,863
12,243
Net deferred tax asset $ 15,061
$ 25,247

As of December 31, 2017, the Company had net operating loss carryforwards for federal income tax purposes of $0.4 million which are available to offset future federal taxable income, if any, through 2020. According to Section 382 of the Internal Revenue Code, the net operating loss carryforwards and credit are subject to an annual limitation of $0.9 million.


	At December 31,
	2023		2022
	(In Thousands)
Deferred tax assets:
Allowance for credit losses	$	36,168	$	30,901
Right-of-use asset - operating leases	8,153		5,048
Deferred compensation	3,022		5,669
Identified intangible assets and goodwill	5,138		5,462
Supplemental Executive Retirement Plans	2,522		2,493

Net operating loss carryforwards	83		—
Postretirement benefits	1,071		1,187
Nonaccrual interest	678		558

Restricted stock and stock option plans	1,039		770
Unrealized loss on investment securities available-for-sale	15,107		17,019


Acquisition fair value adjustments	14,735		—

Other	218		569
Total gross deferred tax assets	87,934		69,676
Deferred tax liabilities:
Operating leases - liability	8,448		5,048
Identified intangible assets and goodwill	8,361		1,910
Deferred loan origination costs, net	3,583		3,507
Depreciation	249		277

Prepaid expense	1,581		290

Accrued Expense	8,756		5,463
Acquisition fair value adjustments	—		944

Other	4		—
Total gross deferred tax liabilities	30,982		17,439
Net deferred tax asset	$	56,952	$	52,237

The Company has determined that a valuation allowance is not required for any of its deferred tax assets because it believes that it is more likely than not that these assets will reverse against future taxable income.

For federal income tax purposes, the Company has a $1.8 million reserve for credit losses which remains subject to recapture. If any portion of the reserve is used for purposes other than to absorb the losses for which it was established, approximately 150% of the amount actually used (limited to the amount of the reserve) would be subject to taxation in the year in which used. As the Company intends to use the reserve only to absorb credit losses, no provision has been made for the $0.5 million liability that would result if 100% of the reserve were recaptured.

The Company did not have any unrecognized tax benefits accrued as income tax payables, receivables or as deferred tax items as of December 31, ~~2017~~2023 and ~~2016.~~2022. The Company files U.S. federal and state income tax returns. During the third quarter of 2017, the Company was notified by the Internal Revenue Service of its intent to examine the Company's 2015 consolidated federal income tax return. Management believes that this examination will conclude during the next 12 months. As of December 31, ~~2017,~~2023, the Company is subject to potential examination by the Massachusetts, Rhode Island, New York and several other state ~~tax~~taxing authorities, along with the Internal Revenue Service ("IRS") for tax years after December 31, ~~2013.~~2020.

~~F-67~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

(18) Stockholders' Equity

Preferred Stock

The Company is authorized to issue 50,000,000 shares of serial preferred stock, par value $0.01 per share, from time to time in one or more series subject to limitations of law. The Board of Directors is authorized to fix the designations, powers, preferences, limitations and rights of the shares of each such series. As of December 31, ~~2017,~~2023, there were no shares of preferred stock issued.

F-65

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Capital Distributions and Restrictions Thereon

The Company is a legal entity separate and distinct from each of the Banks and ~~Brookline Securities Corp.~~Clarendon Private. The Company's primary source of revenue is dividends paid to it by the Banks and ~~Brookline Securities Corp.~~Clarendon Private.

The FRB has authority to prohibit the Company from paying dividends to the Company's shareholders if such payment is deemed to be an unsafe or unsound practice. The FRB has indicated generally that it may be an unsafe or unsound practice for bank holding companies to pay dividends unless the bank holding company's net income over the preceding year is sufficient to fund the dividends and the expected rate of earnings retention is consistent with the organization's capital needs, asset quality and overall financial condition.

The FRB also has the authority to use its enforcement powers to prohibit the Banks from paying dividends to the Company if, in its opinion, the payment of dividends would constitute an unsafe or unsound practice. Federal law also prohibits the payment of dividends by a bank that will result in the bank failing to meet its applicable capital requirements on a pro forma basis. In addition, a state bank that is a member of the Federal Reserve System may not declare or pay a dividend if the total of all dividends declared during the calendar year, including the proposed dividend, exceeds the sum of the bank's net income (as reportable in its Reports of Condition and Income) during the current calendar year and the retained net income of the prior two calendar years, unless the dividend has been approved by the FRB. Payment of dividends by a bank is also restricted pursuant to various state regulatory limitations, including those enforced by the Massachusetts Division of Banks in the case of Brookline Bank, ~~and First Ipswich, and~~ the Banking Division of the Rhode Island Department of Business Regulation in the case of ~~BankRI.~~BankRI and New York State Department of Financial Services in the case of PCSB.

Common Stock Repurchases

~~In 2017, 2016~~On January 27, 2021, the Company's Board of Directors (the "Board") approved a stock repurchase program authorizing management to repurchase up to $10.0 million of the Company's common stock commencing on February 1, 2021 and ~~2015, no~~ending on December 31, 2021. As of September 30, 2021, 690,253 shares of the Company's common stock were repurchased by the ~~Company.~~ Company at a weighted average price of $14.46.

On ~~February 4, 2016,~~November 10, 2021, the ~~Company's~~ Board ~~of Directors authorized~~approved a stock repurchase program authorizing management to ~~acquire~~repurchase up to ~~$10.0~~$20.0 million of ~~total outstanding~~the Company's common stock, commencing on November 15, 2021 and ending on December 31, 2022. On June 24, 2022 the Company suspended the program. As of June 24, 2022, 956,341 shares of the Company's common stock ~~over~~were repurchased by the Company at a ~~period~~weighted average price of ~~twelve months ending on January 31, 2017.~~ $14.41.

Repurchases may be made from time to time depending on market conditions and other factors, and will be conducted through open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with the Securities and Exchange Commission Rule 10b5-1. There is no guarantee as to the exact number of shares, if any, to be repurchased by the Company. ~~As of December 31, 2017, no shares of stock were repurchased under the stock repurchase program.~~

~~Common Stock Issuance~~

Restricted Retained Earnings

As part of the stock offering in 2002 and as required by regulation, Brookline Bank established a liquidation account for the benefit of eligible account holders and supplemental eligible account holders who maintain their deposit accounts at Brookline Bank after the stock offering. In the unlikely event of a complete liquidation of Brookline Bank (and only in that event), eligible depositors who continue to maintain deposit accounts at Brookline Bank shall be entitled to receive a distribution from the liquidation account.

~~F-68~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Accordingly, retained earnings of the Company are deemed to be restricted up to the balance of the liquidation account. The liquidation account balance is reduced annually to the extent that eligible depositors have reduced their qualifying deposits as of each anniversary date. Subsequent increases in deposit account balances do not restore an account holder's interest in the liquidation ~~account~~account.

The liquidation account totaled ~~$15.1~~$8.9 million (unaudited), ~~$15.2~~$9.9 million (unaudited), and ~~$16.6~~$11.3 million (unaudited) at

December 31, ~~2017, 2016~~2023, 2022 and ~~2015,~~2021, respectively.

F-66

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(19) Regulatory Capital Requirements

The Company's primary source of cash is dividends from the ~~Banks and Brookline Securities Corp.~~Banks. The Banks are subject to certain restrictions on the amount of dividends that they may declare without prior regulatory approval. In addition, the dividends declared cannot be in excess of the amount which would cause the Banks to fall below the minimum required for capital adequacy purposes.

The Company is a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended ~~(the "BHCA")~~ and as such, must comply with the capital requirements of the ~~Federal Reserve Bank (the "FRB")~~FRB at the consolidated level. As member banks of the FRB, Brookline Bank, BankRI and ~~First Ipswich~~PCSB Bank are also required to comply with the regulatory capital requirement of the FRB.

The FRB has promulgated regulations imposing minimum capital requirements for bank holding companies and state member banks as well as prompt corrective action regulations for state member banks that implement the system of prompt corrective action established by Section 38 of the Federal Deposit Insurance Act, as amended (the "FDIA"). Under the prompt corrective action regulations in effect as of December 31, ~~2017,~~2023, a bank is "well-capitalized" if it has: (1) a total risk-based capital ratio of 10.0% or greater; (2) a Tier 1 risk-based capital ratio of 8.0% or greater; (3) a common equity Tier 1 capital ratio of 6.5% or greater; (4) a Tier 1 leverage ratio of 5.0% or greater; and (5) is not subject to any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital measure.

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, the Company and each of the Banks must meet specific capital guidelines that involve quantitative measures of the Company's and the Banks' assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. In addition, the prompt corrective action rules applicable to state member banks establish a framework of supervisory actions for state member banks that are not at least adequately capitalized. The Company's and the Banks' 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.~~ Bank holding companies are not subject to prompt corrective action requirements. However, a bank holding company is considered "well capitalized" for purpose of the FRB's Regulation Y ~~(which can affect eligibility for expedited application processes to make acquisitions and engage in new activities)~~ if the bank holding company maintains on a consolidated basis a total risk-based capital ratio of 10.0% or greater and a Tier 1 risk-based capital ratio of 6.0% or greater and is not subject to any written agreement under capital directive or prompt correction action directive issued by the FRB to meet and maintain a specific capital level for any capital measure.

~~F-69~~

~~Table~~The Company and the Banks are required to maintain a capital conservation buffer composed of ~~Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes~~common equity Tier 1 capital equal to ~~Consolidated Financial Statements (Continued)~~

2.5% of risk-weighted assets above the amounts required to be adequately capitalized in order to avoid limitations on capital distributions, including dividend payments and certain discretionary bonus payments to executive officers. Capital ratios required to be considered well-capitalized exceed the ratios required under the capital conservation buffer requirement at December 31, ~~2017, 2016 and 2015~~

2023.

As of December 31, ~~2017, the Company and the Banks are each under the primary regulation of, and must comply with, the capital requirements of the FRB. As of December 31, 2017,~~2023, the Company and the Banks exceeded all regulatory capital requirements and were considered “well-capitalized” under ~~prompt corrective action regulations, as amended to reflect the changes under Basel III Capital Rules.~~applicable rules. The following table presents actual and required capital ratios as of December 31, ~~2017~~2023 for the Company and the Banks under the Basel III Capital Rules based on the phase-in provision of the Basel III Capital Rules and the minimum required capital levels as of January 1, 2019 when the Basel III Capital Rules have been fully phased in.Banks.

Actual
Minimum Required for Capital Adequacy
Purposes
Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer
Minimum Required to be Considered
“Well-Capitalized” Under Prompt Corrective Action Provisions
Amount Ratio Amount Ratio Amount Ratio Amount Ratio
(Dollars in Thousands)
At December 31, 2017:
Brookline Bancorp, Inc.
Common equity Tier 1 capital ratio ⁽¹⁾
$ 669,238
12.02 % $ 250,547
4.50 % $ 389,739

7.00 % N/A
N/A
Tier 1 leverage capital ratio ⁽²⁾
687,299
10.43 % 263,585
4.00 % 263,585

4.00 % N/A
N/A
Tier 1 risk-based capital ratio ⁽³⁾
687,299
12.34 % 334,181
6.00 % 473,423

8.50 % N/A
N/A
Total risk-based capital ratio ⁽⁴⁾
821,373
14.75 % 445,490
8.00 % 584,706

10.50 % N/A
N/A
Brookline Bank

Common equity Tier 1 capital ratio ⁽¹⁾
$ 414,282
11.56 % $ 161,269
4.50 % $ 250,863

7.00 % $ 232,944
6.50 %
Tier 1 leverage capital ratio ⁽²⁾
423,035
10.35 % 163,492
4.00 % 163,492

4.00 % 204,365
5.00 %
Tier 1 risk-based capital ratio ⁽³⁾
423,035
11.81 % 214,920
6.00 % 304,471

8.50 % 286,561
8.00 %
Total risk-based capital ratio ⁽⁴⁾
463,986
12.95 % 286,632
8.00 % 376,205

10.50 % 358,290
10.00 %
BankRI

Common equity Tier 1 capital ratio ⁽¹⁾
$ 193,849
11.38 % $ 76,654
4.50 % $ 119,239

7.00 % $ 110,722
6.50 %
Tier 1 leverage capital ratio ⁽²⁾
193,849
9.16 % 84,650
4.00 % 84,650

4.00 % 105,813
5.00 %
Tier 1 risk-based capital ratio ⁽³⁾
193,849
11.38 % 102,205
6.00 % 144,791

8.50 % 136,273
8.00 %
Total risk-based capital ratio ⁽⁴⁾
210,025
12.33 % 136,269
8.00 % 178,853

10.50 % 170,337
10.00 %
First Ipswich

Common equity Tier 1 capital ratio ⁽¹⁾
$ 37,502
13.38 % $ 12,613
4.50 % $ 19,620

7.00 % $ 18,218
6.50 %
Tier 1 leverage capital ratio ⁽²⁾
37,502
9.44 % 15,891
4.00 % 15,891

4.00 % 19,863
5.00 %
Tier 1 risk-based capital ratio ⁽³⁾
37,502
13.38 % 16,817
6.00 % 23,824

8.50 % 22,423
8.00 %
Total risk-based capital ratio ⁽⁴⁾
40,625
14.50 % 22,414
8.00 % 29,418

10.50 % 28,017
10.00 %

F-67

(1) Common equity Tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets. The ratio was established as part of the implementation of Basel III, effective January 1, 2015.

~~(2) Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by average assets.~~

~~(3) Tier 1 risk-based capital ratio is calculated by dividing Tier 1 capital by risk-weighted assets.~~

~~(4) Total risk-based capital ratio is calculated by dividing total capital by risk-weighted assets.~~

~~F-70~~

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

~~December 31, 2017, 2016 and 2015~~

~~The following table presents actual and required capital ratios as of December 31, 2016 for the Company and the Banks under the regulatory capital rules then in effect.~~


	Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required to be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio			Actual									Minimum Required for Capital Adequacy Purposes								Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer								Minimum Required to be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions
	(Dollars in Thousands)																		Amount					Ratio					Amount					Ratio				Amount						Ratio				Amount						Ratio
At December 31, 2016:
																			(Dollars in Thousands)
At December 31, 2023:																	At December 31, 2023:
Brookline Bancorp, Inc.																	Brookline Bancorp, Inc.
Common equity Tier 1 capital ratio ⁽¹⁾	$	559,644	10.48	%	$	240,305	4.50	%	$	373,808	7.00	%	N/A		N/A		Common equity Tier 1 capital ratio (1)		$	994,023		10.25			10.25	%				$	436,400		4.50			4.50	%		$	678,845		7.00				7.00	%							N/A
Tier 1 leverage capital ratio ⁽²⁾	575,830		9.16	%	251,454		4.00	%	251,454		4.00	%	N/A		N/A		Tier 1 leverage capital ratio (2)		1,003,784			9.02			9.02	%				445,137			4.00			4.00	%		445,137			4.00				4.00	%							N/A
Tier 1 risk-based capital ratio ⁽³⁾	575,830		10.79	%	320,202		6.00	%	453,620		8.50	%	N/A		N/A		Tier 1 risk-based capital ratio (3)		1,003,784			10.35			10.35	%				581,904			6.00			6.00	%		824,364			8.50				8.50	%							N/A
Total risk-based capital ratio ⁽⁴⁾	704,675		13.20	%	427,076		8.00	%	560,537		10.50	%	N/A		N/A		Total risk-based capital ratio (4)		1,199,686			12.37			12.37	%				775,868			8.00			8.00	%		1,018,327			10.50				10.50	%							N/A
Brookline Bank																	Brookline Bank
Common equity Tier 1 capital ratio ⁽¹⁾	$	384,759	11.31	%	$	153,087	4.50	%	$	238,136	7.00	%	$	221,126	6.50	%	Common equity Tier 1 capital ratio (1)		$	580,148		10.39			10.39	%				$	251,267		4.50			4.50	%		$	390,860		7.00				7.00	%			$	362,941		6.50			6.50	%
Tier 1 leverage capital ratio ⁽²⁾	391,964		10.07	%	155,696		4.00	%	155,696		4.00	%	194,620		5.00	%	Tier 1 leverage capital ratio (2)		580,148			9.46			9.46	%				245,306			4.00			4.00	%		245,306			4.00				4.00	%			306,632			5.00			5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	391,964		11.53	%	203,971		6.00	%	288,959		8.50	%	271,961		8.00	%	Tier 1 risk-based capital ratio (3)		580,148			10.39			10.39	%				335,023			6.00			6.00	%		474,616			8.50				8.50	%			446,697			8.00			8.00	%
Total risk-based capital ratio ⁽⁴⁾	428,966		12.61	%	272,143		8.00	%	357,188		10.50	%	340,179		10.00	%	Total risk-based capital ratio (4)		650,135			11.64			11.64	%				446,828			8.00			8.00	%		586,462			10.50				10.50	%			558,535			10.00			10.00	%
BankRI																	BankRI
Common equity Tier 1 capital ratio ⁽¹⁾	$	182,202	10.94	%	$	74,946	4.50	%	$	116,583	7.00	%	$	108,255	6.50	%	Common equity Tier 1 capital ratio (1)		$	283,673		10.20			10.20	%				$	125,150		4.50			4.50	%		$	194,678		7.00				7.00	%			$	180,772		6.50			6.50	%
Tier 1 leverage capital ratio ⁽²⁾	182,202		8.97	%	81,249		4.00	%	81,249		4.00	%	101,562		5.00	%	Tier 1 leverage capital ratio (2)		283,673			8.89			8.89	%				127,637			4.00			4.00	%		127,637			4.00				4.00	%			159,546			5.00			5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	182,202		10.94	%	99,928		6.00	%	141,565		8.50	%	133,237		8.00	%	Tier 1 risk-based capital ratio (3)		283,673			10.20			10.20	%				166,866			6.00			6.00	%		236,394			8.50				8.50	%			222,489			8.00			8.00	%
Total risk-based capital ratio ⁽⁴⁾	197,702		11.87	%	133,245		8.00	%	174,884		10.50	%	166,556		10.00	%	Total risk-based capital ratio (4)		318,462			11.46			11.46	%				222,312			8.00			8.00	%		291,785			10.50				10.50	%			277,890			10.00			10.00	%
First Ipswich
PCSB Bank
Common equity Tier 1 capital ratio (1)
Common equity Tier 1 capital ratio (1)
Common equity Tier 1 capital ratio ⁽¹⁾	$	33,433	12.61	%	$	11,931	4.50	%	$	18,559	7.00	%	$	17,234	6.50	%		185,337			13.50		13.50		%			61,779				4.50		4.50		%		96,101			7.00				7.00	%			89,236			6.50			6.50	%
Tier 1 leverage capital ratio ⁽²⁾	33,433		9.23	%	14,489		4.00	%	14,489		4.00	%	18,111		5.00	%	Tier 1 leverage capital ratio (2)		185,337			9.78			9.78	%				75,802			4.00			4.00	%		75,802			4.00				4.00	%			94,753			5.00			5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	33,433		12.61	%	15,908		6.00	%	22,536		8.50	%	21,210		8.00	%	Tier 1 risk-based capital ratio (3)		185,337			13.50			13.50	%				82,372			6.00			6.00	%		116,694			8.50				8.50	%			109,829			8.00			8.00	%
Total risk-based capital ratio ⁽⁴⁾	36,053		13.60	%	21,208		8.00	%	27,835		10.50	%	26,510		10.00	%	Total risk-based capital ratio (4)		201,314			14.66			14.66	%				109,858			8.00			8.00	%		144,188			10.50				10.50	%			137,322			10.00			10.00	%

(1) Common equity Tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets. ~~The ratio was established as part of the implementation of Basel III, effective January 1, 2015.~~

(2) Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by average assets.

(3) Tier 1 risk-based capital ratio is calculated by dividing Tier 1 capital by risk-weighted assets.

(4) Total risk-based capital ratio is calculated by dividing total capital by risk-weighted assets.

F-68

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

The following table presents actual and required capital ratios as of December 31, 2022 for the Company and the Banks under the regulatory capital rules then in effect.


	Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required to be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
At December 31, 2022:
Brookline Bancorp, Inc.
Common equity Tier 1 capital ratio (1)	$	893,978	12.05	%	$	333,851	4.50	%	$	519,323	7.00	%	N/A		N/A
Tier 1 leverage capital ratio (2)	903,695		10.26	%	352,318		4.00	%	352,318		4.00	%	N/A		N/A
Tier 1 risk-based capital ratio (3)	903,695		12.18	%	445,170		6.00	%	630,657		8.50	%	N/A		N/A
Total risk-based capital ratio (4)	1,071,078		14.44	%	593,395		8.00	%	778,831		10.50	%	N/A		N/A
Brookline Bank
Common equity Tier 1 capital ratio (1)	$	570,530	11.24	%	$	228,415	4.50	%	$	355,312	7.00	%	$	329,933	6.50	%
Tier 1 leverage capital ratio (2)	570,530		9.72	%	234,786		4.00	%	234,786		4.00	%	293,483		5.00	%
Tier 1 risk-based capital ratio (3)	570,530		11.24	%	304,553		6.00	%	431,451		8.50	%	406,071		8.00	%
Total risk-based capital ratio (4)	634,226		12.50	%	405,905		8.00	%	532,750		10.50	%	507,381		10.00	%
BankRI
Common equity Tier 1 capital ratio (1)	$	244,422	10.32	%	$	106,579	4.50	%	$	165,790	7.00	%	$	153,948	6.50	%
Tier 1 leverage capital ratio (2)	244,422		8.13	%	120,257		4.00	%	120,257		4.00	%	150,321		5.00	%
Tier 1 risk-based capital ratio (3)	244,422		10.32	%	142,106		6.00	%	201,317		8.50	%	189,474		8.00	%
Total risk-based capital ratio (4)	274,091		11.57	%	189,518		8.00	%	248,743		10.50	%	236,898		10.00	%

(1) Common equity Tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets.

(2) Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by average assets.

(3) Tier 1 risk-based capital ratio is calculated by dividing Tier 1 capital by risk-weighted assets.

(4) Total risk-based capital ratio is calculated by dividing total capital by risk-weighted assets.

~~F-71~~

F-69

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

~~December 31, 2017, 2016 and 2015~~

(20) Employee Benefit Plans

Postretirement Benefits

Postretirement benefits are provided for part of the annual expense of health insurance premiums for certain retired employees and their dependents. No contributions are made by the Company to invest in assets allocated for the purpose of funding this benefit obligation. The following table presents the change in plan assets and change in benefit obligation:

Year Ended
December 31,
2017 2016 2015
(In Thousands)
Change in plan assets:
Fair value of plan assets at beginning of year $ —
$ —
$ —
Employer contributions 19
21
25
Benefits paid (19 ) (21 ) (25 )
Fair value of plan assets at end of year $ —
$ —
$ —
Change in benefit obligation:
Benefit obligation at beginning of year $ 1,135
$ 1,188
$ 1,562
Service cost 49
48
55
Interest cost 43
45
49
Estimated benefits paid (19 ) (21 ) (25 )
Actuarial loss (gain) 326
(125 ) (453 )
Benefit obligation at end of year $ 1,534
$ 1,135
$ 1,188


	Year Ended December 31,
	2023		2022		2021
	(In Thousands)
Change in plan assets:
Fair value of plan assets at beginning of year	$	—	$	—	$	—
Employer contributions	29		34		35
Benefits paid	(29)		(34)		(35)
Fair value of plan assets at end of year	$	—	$	—	$	—
Change in benefit obligation:
Benefit obligation at beginning of year	$	1,530	$	2,026	$	2,095
Service cost	39		64		67
Interest cost	70		55		50
Estimated benefits paid	(29)		(34)		(35)
Actuarial (gain) loss	(53)		(581)		(151)
Benefit obligation at end of year	$	1,557	$	1,530	$	2,026
Funded status at end of year	$	1,557	$	1,530	$	2,026
Accumulated benefit obligation at end of year	$	1,557	$	1,530	$	2,026

The liability for the postretirement benefits included in accrued expenses and other liabilities was $1.6 million, $1.5 million, ~~$1.1 million,~~ and ~~$1.2~~$2.0 million as of December 31, ~~2017, 2016~~2023, 2022 and ~~2015,~~2021, respectively.

The following table presents the components of net periodic postretirement benefit cost and other amounts recognized in other comprehensive income:


	Year Ended December 31,
	2023		2022		2021
	(In Thousands)
Net periodic benefit expense:
Service cost	$	39	$	64	$	67
Interest cost	70		55		50
Prior service credit	—		—		(2)
Actuarial gain	(85)		—		—
Net periodic benefit expense	$	24	$	119	$	115
Changes in postretirement benefit obligation recognized in other comprehensive income:
Net actuarial (loss) gain	85		$	611	$	185
Prior service credit	—		—		(2)
Total pre-tax changes in postretirement benefit obligation recognized in other comprehensive income	$	85	$	611	$	183

F-70

Year Ended
December 31,
2017
2016
2015
(In Thousands)
Net periodic benefit expense:
Service cost $ 49
$ 48
$ 55
Interest cost 43
45
49
Prior service credit (21 ) (21 ) (21 )
Actuarial gain (47 ) (42 ) (20 )
Net periodic benefit expense $ 24
$ 30
$ 63
Changes in postretirement benefit obligation recognized in other comprehensive income:
Net actuarial (loss) gain (401 ) $ 90
$ 374
Prior service credit (21 ) (21 ) (21 )
Total pre-tax changes in postretirement benefit obligation recognized in other comprehensive income $ (422 ) $ 69
$ 353

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

The discount rate used to determine the actuarial present value of projected postretirement benefit obligations was ~~3.62%~~4.82% in ~~2017, 4.15%~~2023, 5.02% in ~~2016~~2022 and ~~4.35%~~2.77% in ~~2015. The~~2021. There is no estimated prior service credit that will be amortized from accumulated other comprehensive income into net periodic benefit cost in ~~2018 is $0.1 million.~~

~~F-72~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

2024.

The actual health care trend used to measure the accumulated postretirement benefit obligation in ~~2017~~2023 for plan participants below age 65 and for plan participants over age 65 was ~~(14.7)~~(1.1)% and ~~33.9%~~3.4%, respectively. In ~~2016,~~2022, the rate for plan participants below age 65 and for plan participants over age 65 was ~~7.5%~~8.0% and ~~8.3%~~1.6%, respectively. ~~This decrease from 2016 is due to reductions~~The health care trend rates for 2022 and 2023 are based on actual changes in ~~active and retiree head counts in 2017.~~medical premium rates for those years. The rates to be used in ~~2018~~2024 through ~~2022~~2027 are expected to be in the range of ~~6.5%~~8% to ~~5.5%~~6.5% and to decline gradually thereafter to ~~4.9%~~4.5%. Assumed health care trend rates may have a significant effect on the amounts reported for the postretirement benefit plan. A 1% change in assumed health care cost trend rates would have the following effects:


	Year Ended December 31, 2017
	1% Increase		1% Decrease
	Year Ended December 31, 2023							Year Ended December 31, 2023
	1% Increase						1% Increase		1% Decrease
	(In Thousands)					(In Thousands)
Effect on total service and interest cost components of net periodic postretirement benefit costs	$	23	$	(18	)
Effect on the accumulated postretirement benefit obligation	356		(277		)

401(k) Plan

The Company administers one 401(k) plan, ~~(the "Plan"),~~ which is a qualified, tax-exempt profit-sharing plan with a salary deferral feature under Section 401(k) of the Internal Revenue Code. Each employee, excluding temporary employees, who has attained the age of 21 is eligible to participate in the 401(k) plan by making voluntary contributions, subject to certain limits based on federal tax laws. ~~In the Plan, the~~The Company makes a matching contribution of the amount contributed by eligible employees, up to 5% of the employee's yearly compensation. ~~Contributions to the Plan are subject to certain limits based on federal tax laws.~~ Expenses associated with the plans were ~~$2.6~~$4.6 million in ~~2017, $2.8~~2023, $3.8 million in ~~2016,~~2022, and ~~$2.3~~$3.6 million in ~~2015.~~2021.

Nonqualified Deferred Compensation Plan

The Company also maintains a Nonqualified Deferred Compensation Plan (the "Nonqualified Plan") under which certain participants may contribute the amounts they are precluded from contributing to the Company's 401(k) plan because of the qualified plan limitations, and additional compensation deferrals that may be advantageous for personal income tax or other planning reasons. Expenses associated with the Nonqualified Plan in 2023, 2022 and 2021 were ~~nominal in 2017, 2016~~$645.8 thousand, $477.6 thousand, and ~~2015.~~$409.4 thousand, respectively. Accrued liabilities associated with the Nonqualified Plan in ~~2017, 2016,~~2023, 2022, and ~~2015~~2021 were ~~$0.1 million, $0.2 million,~~$1.3 thousand, $1.3 thousand, and ~~$0.2 million,~~$109.5 thousand, respectively.

Supplemental Executive Retirement Agreements

The Company acquired two Supplemental Executive Retirement Plans (the "SERPs") as part of its acquisition of BankRI. The Company maintains the SERPs for certain senior executives ~~under which participants~~who are entitled to an annual retirement benefit. As of December 31, ~~2017,~~2023, there ~~are 13~~were 14 participants in the SERPs. The Company funded a Rabbi Trust to provide a partial funding source for the Company's liabilities under the SERPs. ~~During~~In 2016, a portion of the Company's BOLI assets were transferred into the Rabbi Trust as a replacement for the funds previously held in the Rabbi Trust. In 2020, additional BOLI assets were transferred into the Rabbi Trust. The Company records the liability for the SERPs based on an actuarial calculation in accordance with GAAP, and no actuarial gains and losses are recognized.

Total ~~expenses for benefits payable~~expense under the SERPs for the ~~years~~year ended December 31, ~~2017,~~2023 was $589 thousand compared to a benefit in 2022 of $2.1 million and ~~2016 was $0.8 million.~~an expense in 2021 of $6.0 thousand. Aggregate benefits payable included in accrued expenses and other liabilities as of December 31, ~~2017~~2023 and ~~2016~~2022 were ~~$12.0~~$10.8 million and ~~$11.6~~$10.7 million, respectively.

The nominal discount rate used to determine the actuarial present value of projected benefits under the agreements was ~~4.00%~~5.00% and 5.00% in the ~~year 2017~~years 2023 and ~~2016.~~2022, respectively.

~~F-73~~

F-71

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Defined Benefit Pension Plan

As part of the acquisition of PCSB, the Company acquired a pension plan covering certain employees (the "PCSB Pension Plan"). The PCSB Pension Plan has been terminated and the Company has filed a request for a determination letter with the Internal Revenue Service.The PCSB Pension Plan is currently over-funded with assets of $7.3 million that are included in other assets in the Company's balance sheet. During the year ended December 31, ~~2017, 2016 and 2015~~



Title of Each Class	Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, par value of $0.01 per share		BRKL		Nasdaq Global Select Market



	Page
Part I

Item 1.		Business	1

Item 1A.		Risk Factors	1211

Item 1B.		Unresolved Staff Comments	21

Item 1C.		Cybersecurity	21

Item 2.		Properties	2123

Item 3.		Legal Proceedings	2123

Item 4.		Mine Safety Disclosures	2123

Part II

Item 5.		Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	2224

Item 6.		~~Selected Financial Data~~Reserved	2425

Item 7.		Management's Discussion and Analysis of Financial Condition and Results of Operations	2625

Item 7A.		Quantitative and Qualitative Disclosures About Market Risk	7468

Item 8.		Financial Statements and Supplementary Data	7771

Item 9.		Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	7872

Item 9A.		Controls and Procedures	7872

Item 9B.		Other Information	7872

Item 9C.		Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	72

Part III

Item 10.		Directors, Executive Officers and Corporate Governance	7872

Item 11.		Executive Compensation	7872

Item 12.		Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	7872

Item 13.		Certain Relationships and Related Transactions, and Director Independence	7872

Item 14.		Principal Accounting Fees and Services	7873

Part IV

Item 15.		Exhibits and Financial Statement Schedules	7974

Item 16.		Form 10-K Summary	8075

Signatures			8176



x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934,



o			~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934,~~



	Market Prices				Dividend Paid Per Share
	High		Low		Dividend Paid Per Share
2017
First Quarter	$	16.75	$	14.50	$	0.09
Second Quarter	15.95		13.75		0.09
Third Quarter	15.50		13.75		0.09
Fourth Quarter	16.35		14.50		0.09
2016
First Quarter	$	11.21	$	10.23	$	0.09
Second Quarter	11.69		10.44		0.09
Third Quarter	12.19		10.71		0.09
Fourth Quarter	16.60		12.05		0.09



	At December 31,
Index	2012	2013	2014	2015	2016	2017
Brookline Bancorp, Inc.	100.00	116.65	127.15	150.69	221.86	217.62
Russell 2000	100.00	138.82	145.62	139.19	168.85	193.58
SNL Bank $5B-$10B	100.00	154.28	158.92	181.04	259.37	258.40
S&P 500	100.00	132.39	150.51	152.59	170.84	208.14



	Amount due at December 31, 2017
	Within One Year		More than One Year to Three Years		More than Three Years to Five Years		More than Five Years to Fifteen Years		More than Fifteen Years		Total after One Year		Total
	(In Thousands)
Commercial real estate	$	838,864	$	541,051	$	589,739	$	201,476	$	3,839	$	1,336,105	$	2,174,969
Multi-family mortgage	353,630		133,559		170,345		101,037		2,099		407,040		760,670
Construction	106,738		8,863		20,382		3,957		198		33,400		140,138
Commercial	217,858		137,103		166,433		94,136		89,474		487,146		705,004
Equipment financing	77,542		210,175		438,624		140,147		—		788,946		866,488
Condominium association	6,334		13,986		15,705		16,594		—		46,285		52,619
Residential mortgage	173,447		125,112		209,647		116,557		35,302		486,618		660,065
Home equity	220,546		1,345		5,554		45,118		83,391		135,408		355,954
Other consumer	7,126		2,055		84		—		5,507		7,646		14,772
Total	$	2,002,085	$	1,173,249	$	1,616,513	$	719,022	$	219,810	$	3,728,594	$	5,730,679



	Due after One Year
	Fixed		Adjustable		Total
	(In Thousands)
Originated:
Commercial real estate	$	435,781	$	825,762	$	1,261,543
Multi-family mortgage	144,448		241,305		385,753
Construction	2,405		30,994		33,399
Commercial	277,409		203,728		481,137
Equipment financing	595,974		188,958		784,932
Condominium association	25,878		20,407		46,285
Residential mortgage	48,218		407,016		455,234
Home equity	26,479		67,524		94,003
Other consumer	2,172		5,475		7,647
Total originated	1,558,764		1,991,169		3,549,933
Acquired:
Commercial real estate	9,614		64,949		74,563
Multi-family mortgage	10,822		10,465		21,287
Commercial	317		5,691		6,008
Equipment financing	4,015		—		4,015
Residential mortgage	19,490		11,893		31,383
Home equity	23,398		18,007		41,405
Total acquired	67,656		111,005		178,661
Total loans	$	1,626,420	$	2,102,174	$	3,728,594



	At December 31, 2017		At December 31, 2016
	(Dollars in Thousands)
Troubled debt restructurings:
On accrual	$	16,241	$	13,883
On nonaccrual	9,770		11,919
Total troubled debt restructurings	$	26,011	$	25,802



	Year Ended December 31, 2017
	Commercial Real Estate			Commercial			Consumer				Total
	(In Thousands)
Balance at December 31, 2016	$	27,645		$	20,906		$	5,115			$	53,666
Charge-offs	(494		)	(14,914		)	(403		)		(15,811		)
Recoveries	476			1,158			319				1,953
(Credit) provision for loan and lease losses	(515		)	19,183			116			��	18,784
Balance at December 31, 2017	$	27,112		$	26,333		$	5,147			$	58,592

Total loans and leases	$	3,075,777		$	1,624,111		$	1,030,791			$	5,730,679
Total allowance for loan and lease losses as a percentage of total loans and leases	0.88		%	1.62		%	0.50		%		1.02		%



	Year Ended December 31, 2016
	Commercial Real Estate			Commercial			Consumer			Unallocated		Total
	(In Thousands)
Balance at December 31, 2015	$	30,151		$	22,018		$	4,570		$	—	$	56,739
Charge-offs	(2,169		)	(10,516		)	(1,982		)	—		(14,667		)
Recoveries	—			642			750			—		1,392
(Credit) provision for loan and lease losses	(337		)	8,762			1,777			—		10,202
Balance at December 31, 2016	$	27,645		$	20,906		$	5,115		$	—	$	53,666

Total loans and leases	$	2,918,567		$	1,495,408		$	984,889		N/A		$	5,398,864
Total allowance for loan and lease losses as a percentage of total loans and leases	0.95		%	1.40		%	0.52		%	N/A		0.99		%



	Year Ended December 31, 2015
	Commercial Real Estate			Commercial			Consumer			Unallocated			Total
	(In Thousands)
Balance at December 31, 2014	$	29,594		$	15,957		$	5,690		$	2,418		$	53,659
Charge-offs	(550		)	(3,634		)	(2,370		)	—			(6,554		)
Recoveries	—			667			1,544			—			2,211
Provision (credit) for loan and lease losses	1,107			9,028			(294		)	(2,418		)	7,423
Balance at December 31, 2015	$	30,151		$	22,018		$	4,570		$	—		$	56,739

Total loans and leases	$	2,664,394		$	1,374,296		$	956,850		N/A			$	4,995,540
Allowance for loan and lease losses as a percentage of total loans and leases	1.13		%	1.60		%	0.48		%	N/A			1.14		%



	Year Ended December 31, 2014
	Commercial Real Estate			Commercial			Consumer			Unallocated			Total
	(In Thousands)
Balance at December 31, 2013	$	23,022		$	15,220		$	7,299		$	2,932		$	48,473
Charge-offs	(130		)	(2,507		)	(1,813		)	—			(4,450		)
Recoveries	4			801			592			—			1,397
Provision (credit) for loan and lease losses	6,698			2,443			(388		)	(514		)	8,239
Balance at December 31, 2014	$	29,594		$	15,957		$	5,690		$	2,418		$	53,659

Total loans and leases	$	2,467,801		$	1,167,094		$	1,187,712		N/A			$	4,822,607
Allowance for loan and lease losses as a percentage of total loans and leases	1.20		%	1.37		%	0.48		%	N/A			1.11		%



	Year Ended December 31, 2013
	Commercial Real Estate			Commercial			Consumer			Unallocated		Total
	(In Thousands)
Balance at December 31, 2012	$	20,018		$	10,655		$	7,849		$	2,630	$	41,152
Charge-offs	(88		)	(2,077		)	(2,623		)	—		(4,788		)
Recoveries	13			657			764			—		1,434
Provision for loan and lease losses	3,079			5,985			1,309			302		10,675
Balance at December 31, 2013	$	23,022		$	15,220		$	7,299		$	2,932	$	48,473

Total loans and leases	$	2,203,623		$	965,610		$	1,193,232		N/A		$	4,362,465
Allowance for loan and lease losses as a percentage of total loans and leases	1.04		%	1.58		%	0.61		%	N/A		1.11		%



	Year Ended December 31, 2017 Compared to Year Ended December 31, 2016									Year Ended December 31, 2016 Compared to Year Ended December 31, 2015
	Increase (Decrease) Due To									Increase (Decrease) Due To
	Volume			Rate			Net Change			Volume			Rate			Net Change
	(In Thousands)
Interest and dividend income:
Investments:
Debt securities	$	602		$	307		$	909		$	417		$	117		$	534
Marketable and restricted equity securities	(33		)	81			48			(267		)	491			224
Short-term investments	(72		)	272			200			(5		)	119			114
Total investments	497			660			1,157			145			727			872
Loans and leases:
Commercial real estate loans	6,276			2,814			9,090			11,869			(4,406		)	7,463
Commercial loans and leases	1,764			1,631			3,395			2,436			(1,517		)	919
Equipment financing	5,414			1,533			6,947			6,720			(2,971		)	3,749
Residential mortgage loans	747			629			1,376			892			(130		)	762
Other consumer loans	512			952			1,464			(1,162		)	548			(614		)
Total loans	14,713			7,559			22,272			20,755			(8,476		)	12,279
Total change in interest and dividend income	15,210			8,219			23,429			20,900			(7,749		)	13,151
Interest expense:
Deposits:
NOW accounts	16			—			16			32			(2		)	30
Savings accounts	94			(119		)	(25		)	97			131			228
Money market accounts	431			883			1,314			485			129			614
Certificate of deposit	148			1,765			1,913			326			1,392			1,718
Total deposits	689			2,529			3,218			940			1,650			2,590
Borrowed funds:
Advances from the FHLBB	54			516			570			462			348			810
Subordinated debentures and notes	10			33			43			10			27			37
Other borrowed funds	7			47			54			30			(28		)	2
Total borrowed funds	71			596			667			502			347			849
Total change in interest expense	760			3,125			3,885			1,442			1,997			3,439
Change in tax-exempt income	27			—			27			—			413			413
Change in net interest income	$	14,423		$	5,094		$	19,517		$	19,458		$	(9,333	)	$	10,125



	Originated						Acquired					Total
	Year Ended December 31,						Year Ended December 31,					Year Ended December 31,
	2017			2016			2017			2016		2017			2016
	(In Thousands)
Provision (credit) for loan and lease losses:
Commercial real estate	$	(343	)	$	(750	)	$	(172	)	$	413	$	(515	)	$	(337	)
Commercial	18,899			8,469			284			293		19,183			8,762
Consumer	273			1,263			(157		)	514		116			1,777
Total provision (credit) for loan and lease losses	18,829			8,982			(45		)	1,220		18,784			10,202
Unfunded credit commitments	204			151			—			—		204			151
Total provision (credit) for credit losses	$	19,033		$	9,133		$	(45	)	$	1,220	$	18,988		$	10,353



	Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required to be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
At December 31, 2017:
Brookline Bancorp, Inc.
Common equity Tier 1 capital ratio ⁽¹⁾	$	669,238	12.02	%	$	250,547	4.50	%	$	389,739	7.00	%	N/A		N/A
Tier 1 leverage capital ratio ⁽²⁾	687,299		10.43	%	263,585		4.00	%	263,585		4.00	%	N/A		N/A
Tier 1 risk-based capital ratio ⁽³⁾	687,299		12.34	%	334,181		6.00	%	473,423		8.50	%	N/A		N/A
Total risk-based capital ratio ⁽⁴⁾	821,373		14.75	%	445,490		8.00	%	584,706		10.50	%	N/A		N/A
Brookline Bank
Common equity Tier 1 capital ratio ⁽¹⁾	$	414,282	11.56	%	$	161,269	4.50	%	$	250,863	7.00	%	$	232,944	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	423,035		10.35	%	163,492		4.00	%	163,492		4.00	%	204,365		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	423,035		11.81	%	214,920		6.00	%	304,471		8.50	%	286,561		8.00	%
Total risk-based capital ratio ⁽⁴⁾	463,986		12.95	%	286,632		8.00	%	376,205		10.50	%	358,290		10.00	%
BankRI
Common equity Tier 1 capital ratio ⁽¹⁾	$	193,849	11.38	%	$	76,654	4.50	%	$	119,239	7.00	%	$	110,722	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	193,849		9.16	%	84,650		4.00	%	84,650		4.00	%	105,813		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	193,849		11.38	%	102,205		6.00	%	144,791		8.50	%	136,273		8.00	%
Total risk-based capital ratio ⁽⁴⁾	210,025		12.33	%	136,269		8.00	%	178,853		10.50	%	170,337		10.00	%
First Ipswich
Common equity Tier 1 capital ratio ⁽¹⁾	$	37,502	13.38	%	$	12,613	4.50	%	$	19,620	7.00	%	$	18,218	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	37,502		9.44	%	15,891		4.00	%	15,891		4.00	%	19,863		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	37,502		13.38	%	16,817		6.00	%	23,824		8.50	%	22,423		8.00	%
Total risk-based capital ratio ⁽⁴⁾	40,625		14.50	%	22,414		8.00	%	29,418		10.50	%	28,017		10.00	%



	Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required To Be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
At December 31, 2016:
Brookline Bancorp, Inc.
Common equity Tier 1 capital ratio ⁽¹⁾	$	559,644	10.48	%	$	240,305	4.50	%	$	373,808	7.00	%	N/A		N/A
Tier 1 leverage capital ratio ⁽²⁾	575,830		9.16	%	251,454		4.00	%	251,454		4.00	%	N/A		N/A
Tier 1 risk-based capital ratio ⁽³⁾	575,830		10.79	%	320,202		6.00	%	453,620		8.50	%	N/A		N/A
Total risk-based capital ratio ⁽⁴⁾	704,675		13.20	%	427,076		8.00	%	560,537		10.50	%	N/A		N/A
Brookline Bank
Common equity Tier 1 capital ratio ⁽¹⁾	$	384,759	11.31	%	$	153,087	4.50	%	$	238,136	7.00	%	$	221,126	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	391,964		10.07	%	155,696		4.00	%	155,696		4.00	%	194,620		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	391,964		11.53	%	203,971		6.00	%	288,959		8.50	%	271,961		8.00	%
Total risk-based capital ratio ⁽⁴⁾	428,966		12.61	%	272,143		8.00	%	357,188		10.50	%	340,179		10.00	%
BankRI
Common equity Tier 1 capital ratio ⁽¹⁾	$	182,202	10.94	%	$	74,946	4.50	%	$	116,583	7.00	%	$	108,255	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	182,202		8.97	%	81,249		4.00	%	81,249		4.00	%	101,562		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	182,202		10.94	%	99,928		6.00	%	141,565		8.50	%	133,237		8.00	%
Total risk-based capital ratio ⁽⁴⁾	197,702		11.87	%	133,245		8.00	%	174,884		10.50	%	166,556		10.00	%
First Ipswich
Common equity Tier 1 capital ratio ⁽¹⁾	$	33,433	12.61	%	$	11,931	4.50	%	$	18,559	7.00	%	$	17,234	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	33,433		9.23	%	14,489		4.00	%	14,489		4.00	%	18,111		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	33,433		12.61	%	15,908		6.00	%	22,536		8.50	%	21,210		8.00	%
Total risk-based capital ratio ⁽⁴⁾	36,053		13.60	%	21,208		8.00	%	27,835		10.50	%	26,510		10.00	%


	Payment Due by Period
	Less Than One Year		One to Three Years		More than Three Years to Five Years		Over Five Years		Total
	(In Thousands)
At December 31, 2017:
Advances from the FHLBB	$	514,314	$	295,954	$	64,066	$	15,575	$	889,909
	Payment Due by Period													Payment Due by Period
	Less Than One Year										Less Than One Year	One to Three Years	More than Three Years to Five Years		Over Five Years	Total
	(In Thousands)													(In Thousands)
At December 31, 2023:
Advances from the FHLB
Advances from the FHLB
Advances from the FHLB
Subordinated debentures and notes	—		—		—		83,271		83,271
Other borrowed funds	47,639		—		—		—		47,639
Loan commitments ⁽¹⁾	1,215,744		—		—		—		1,215,744
Occupancy lease commitments ⁽²⁾	4,921		7,550		5,731		10,138		28,340
Service provider contracts ⁽³⁾	22,549		54,896		28,683		14,953		121,081
Postretirement benefit obligations ⁽⁴⁾	425		1,325		1,099		16,849		19,698
	$	1,805,592	$	359,725	$	99,579	$	140,786	$	2,405,682
Purchase obligations (3)
Employee postretirement obligations
	$



	Estimated Exposure to Net Interest Income over Twelve-Month Horizon Beginning
	December 31, 2017					December 31, 2016
Gradual Change in Interest Rate Levels	Dollar Change			Percent Change		Dollar Change			Percent Change
	(Dollars in Thousands)
Up 300 basis points	$	11,494		4.9	%	$	6,403		3.0	%
Up 200 basis points	8,179			3.5	%	4,420			2.1	%
Up 100 basis points	4,434			1.9	%	2,288			1.1	%
Down 100 basis points	(10,512		)	-4.5	%	(5,196		)	-2.5	%


	Estimated Percent Change in Economic Value of Equity
			Estimated Percent Change in Economic Value of Equity								Estimated Percent Change in Economic Value of Equity
Parallel Shock in Interest Rate Levels	At December 31, 2017			At December 31, 2016		Parallel Shock in Interest Rate Levels	At December 31, 2023		At December 31, 2022
Up 300 basis points	-0.7	%		-4.6	%	Up 300 basis points	(6.3)	%	0.3	%
Up 200 basis points	—	%		-4.4	%	Up 200 basis points	(4.4)	%	0.5	%
Up 100 basis points	1.0	%		-1.6	%	Up 100 basis points	(2.2)	%	0.8	%
Down 100 basis points	-7.1	%		-6.4	%	Down 100 basis points	2.1	%	(3.0)	%


	One Year or Less			More than One Year to Two Years			More than Two Years to Three Years			More than Three Years to Five Years			More than Five Years			Total
	(Dollars in Thousands)
	One Year or Less																							One Year or Less					More than One Year to Two Years					More than Two Years to Three Years					More than Three Years to Five Years					More than Five Years			Total
	(Dollars in Thousands)																																							(Dollars in Thousands)
Interest-earning assets ⁽¹⁾:
Short-term investments
Short-term investments
Short-term investments	$	35,383		$	—		$	—		$	—		$	—		$	35,383
Weighted average rate	1.50		%	—		%	—		%	—		%	—		%	1.50		%	Weighted average rate	5.33		%			—		%			—		%			—		%				—		%		5.33	%
Investment securities ^{(1) (3)}	99,803			81,717			68,659			191,128			208,547			649,854
Weighted average rate	2.03		%	1.90		%	1.88		%	2.00		%	2.14		%	2.03		%	Weighted average rate	2.39		%			1.84		%			2.42		%			2.39		%				2.27		%		2.29	%
Commercial real estate loans ⁽¹⁾	1,581,185			428,655			372,345			548,368			145,224			3,075,777
Weighted average rate	3.97		%	4.33		%	4.36		%	4.44		%	4.39		%	4.17		%	Weighted average rate	6.55		%			4.38		%			4.19		%			4.76		%				5.44		%		5.52	%
Commercial loans and leases ⁽¹⁾	756,970			303,303			226,532			263,360			73,946			1,624,111
Weighted average rate	5.72		%	6.14		%	6.10		%	6.22		%	3.39		%	5.83		%	Weighted average rate	7.52		%			—		%			7.03		%			7.41		%				7.25		%		7.32	%
Consumer loans ⁽¹⁾	654,696			138,562			85,419			95,083			57,031			1,030,791
Weighted average rate	4.02		%	3.87		%	3.88		%	3.93		%	3.17		%	3.93		%	Weighted average rate	6.99		%			4.02		%			4.01		%			4.40		%				5.34		%		5.72	%
Total interest-earning assets	3,128,037			952,237			752,955			1,097,939			484,748			6,415,916
Weighted average rate	4.32		%	4.63		%	4.60		%	4.40		%	3.13		%	4.32		%	Weighted average rate	6.64		%			5.01		%			4.79		%			5.05		%				4.85		%		5.67	%

Interest-bearing liabilities ⁽¹⁾:
Interest-bearing liabilities (1):
Interest-bearing liabilities (1):
NOW accounts	$	—		$	—		$	—		$	—		$	350,568		$	350,568
Weighted average rate	—		%	—		%	—		%	—		%	0.06		%	0.06		%	Weighted average rate	—		%			—		%			—		%			—		%				0.60		%		0.60	%
Savings accounts	—			—			—			—			646,359			646,359
Weighted average rate	—		%	—		%	—		%	—		%	0.25		%	0.25		%	Weighted average rate	—		%			—		%			—		%			—		%				2.63		%		2.63	%
Money market savings accounts	1,719,948			—			—			—			4,415			1,724,363
Weighted average rate	0.56		%	—		%	—		%	—		%	—		%	0.56		%	Weighted average rate	3.07		%			—		%			—		%			—		%				—		%		3.07	%
Certificates of deposit ⁽¹⁾	711,364			300,372			90,663			103,392			1,679			1,207,470
Weighted average rate																			Weighted average rate	3.98		%			3.73		%			1.52		%			1.71		%				—		%		3.88	%
Brokered deposits
Weighted average rate	1.00		%	1.48		%	1.87		%	1.99		%	0.03		%	1.27		%	Weighted average rate	4.27		%			5.17		%			—		%			—		%				—		%		4.43	%
Borrowed funds ⁽¹⁾	675,707			240,121			16,589			5,963			82,439			1,020,819
Weighted average rate	1.32		%	1.75		%	0.64		%	2.04		%	5.86		%	1.78		%	Weighted average rate	5.08		%			4.87		%			2.77		%			2.01		%				5.00		%		5.00	%
Total interest-bearing liabilities	3,107,019			540,493			107,252			109,355			1,085,460			4,949,579
Weighted average rate	0.83		%	1.60		%	1.68		%	1.99		%	0.61		%	0.91		%	Weighted average rate	3.85		%			4.79		%			1.60		%			1.76		%				2.06		%		3.28	%
Interest sensitivity gap ⁽²⁾	$	21,018		$	411,744		$	645,703		$	988,584		$	(600,712	)	$	1,466,337
Cumulative interest sensitivity gap	$	21,018		$	432,762		$	1,078,465		$	2,067,049		$	1,466,337					Cumulative interest sensitivity gap	$	(521,440)		$		$	130,053		$		$	1,438,585		$		$	3,408,213		$			$	2,410,317
Cumulative interest sensitivity gap as a percentage of total assets	0.31		%	6.38		%	15.91		%	30.49		%	21.63		%				Cumulative interest sensitivity gap as a percentage of total assets	(4.58)		%			1.14		%			12.64		%			29.94		%				21.18		%
Cumulative interest sensitivity gap as a percentage of total interest-earning assets	0.33		%	6.75		%	16.81		%	32.22		%	22.85		%				Cumulative interest sensitivity gap as a percentage of total interest-earning assets	(4.89)		%			1.22		%			13.50		%			31.98		%				22.62		%



	Pages
Reports of Independent Registered Public Accounting Firm		F-~~F-3~~3
Consolidated Balance Sheets as of December 31, ~~2017~~2023 and ~~2016~~2022		F-~~F-4~~6
Consolidated Statements of Income for the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015~~2021		F-~~F-5~~7
Consolidated Statements of Comprehensive Income for the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015~~2021		F-~~F-6~~8
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, ~~2017, 2016,~~2023, 2022, and ~~2015~~2021		F-~~F-7~~9 - ~~F-9~~F-11
Consolidated Statements of Cash Flows for the years ended December 31, ~~2017, 2016,~~202 3 , 202 2 , and ~~2015~~2021		F-~~F-10~~12 - ~~F-11~~F-13
Notes to Consolidated Financial Statements		F-~~F-12~~14 - ~~F-96~~F-82


Exhibit		Description

~~Exhibit~~		~~Description~~
~~1.1~~3.1		Underwriting Agreement, dated September 11, 2014, by and among Brookline Bancorp, Inc., Sterne, Agee & Leach, Inc. and Sandler O’Neil + Partners, L.P., as representatives of the several underwriters named therein (incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K filed on September 12, 2014)
~~2.1~~	Agreement and Plan of Merger dated as of September 20, 2017 by and among Brookline Bancorp, Inc., Brookline Bank, and First Commons Bank, N.A. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2017)
~~3.1~~	Certificate of Incorporation of Brookline Bancorp, Inc. ~~(incorporated by reference to Exhibit 3.1 (included in Exhibit 2) of the Registration Statement on Form S-1 filed by the Company on April 10, 2002 (Registration No. 333-85980))~~
3.2		Amended and Restated Bylaws of Brookline Bancorp, Inc. (incorporated by reference to Exhibit 3.02 of the Company's Current Report on Form 8-K filed on January 10, 2013)
4		Form of Common Stock Certificate of the Company (incorporated by reference to Exhibit 4 of the Registration Statement on Form S-1 filed by the Company on April 10, 2002 (Registration No. 333-85980))
4.1			Subordinated Indenture, dated as of September 16, 2014, between Brookline Bancorp, Inc. and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on September 17, 2014)
4.2			First Supplemental Indenture, dated as of September 16, 2014, between Brookline Bancorp, Inc. and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on September 17, 2014)
4.3			Form of Global Note to represent the 6.000% Fixed-to-Floating Rate Subordinated Notes due September 15, 2029 ~~(incorporated by reference to~~(contained in the First Supplemental Indenture included as Exhibit ~~4.3 of the Company’s Current Report on Form 8-K filed on September 17, 2014)~~4.2)
~~10.1+~~





4.4		Description of Registrant’s Securities
10.1+		Brookline Bancorp, Inc. Deferred Compensation Plan effective January 1, 2011, ~~(incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 8-K filed on September 16, 2010)~~
~~10.1.1~~	~~Form of Voting Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities~~as amended and ~~Exchange Commission on September 21, 2017)~~restated January 1, 2018
~~10.2+~~			~~Brookline Bancorp, Inc. 2003 Stock Option Plan (incorporated by reference to Exhibit A of the Company's Proxy Statement filed on July 23, 2003)~~
~~10.2.1~~			Consulting Agreement by and between Brookline Bank and Anthony G. Nuzzo dated September 20, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2017)
~~10.3+~~			~~Brookline Bancorp, Inc. 2003 Recognition and Retention Plan (incorporated by reference to Exhibit B of the Company's Proxy Statement filed on July 23, 2003)~~
10.4+			~~Brookline Bancorp, Inc. 2011 Restricted Stock Plan (incorporated by reference to Appendix A of the Company's Proxy Statement filed on March 17, 2011)~~
~~10.5+~~	Brookline Bancorp, Inc. 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on May 9, 2014)



10.4.1+		Form of Restricted Stock Award Agreement under the Brookline Bancorp, Inc. 2014 Equity Incentive Plan
~~Exhibit~~10.5+	~~Description~~ Brookline Bancorp, Inc. 2021 Stock Option and Incentive Plan (incorporated by reference to the Company's Current Report on Form 8-K filed on May 13, 2021.
~~10.6+~~10.5.1+	Form of Restricted Stock Award Agreement under the Brookline Bancorp, Inc. 2021 Stock Option and Incentive Plan (incorporated by reference to Exhibit 10.2 of the Company's Registration Statement on Form S-8).
10.6+	Employment Agreement, dated as of April 11, 2011, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A. Perrault (incorporated by reference to Exhibit 10.10 of the Company's Current Report on Form 8-K filed on April 15, 2011)
~~10.7+~~10.6.1+		~~Retirement~~ Amendment to the Employment Agreement, dated ~~as of December 23, 2010,~~July 25, 2018, by and ~~between~~among the Brookline Bancorp, Inc., Brookline Bank and ~~Charles H. Peck~~Paul Perrault.
10.6.2+	Second Amendment to the Employment Agreement, dated March 10, 2021, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A. Perrault (incorporated by reference to Exhibit ~~10.11~~10.1 of the Company's Current Report on Form 8-K filed on ~~December 27, 2010)~~March 10, 2021).
~~10.8+~~10.6.3+	Third Amendment to the Employment Agreement, dated September 22, 2021, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A. Perrault.
10.6.4	Fourth Amendment to the Employment Agreement, dated April 28, 2023, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A. Perrault


Exhibit		Description
10.8+		Employment Letter Agreement, dated as of April 19, 2011, by and between Brookline Bancorp, Inc. and Mark J. Meiklejohn (incorporated by reference to Exhibit 10.3 of Pre-effective Amendment No. 2 of the Registration Statement on Form S-4 filed by the Company on July 25, 2011 (Registration Number 333-174731))

10.9+				Form of Amended Change in Control Agreement (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q filed May 9, 2014)
~~14.1~~


10.12+		Employment Agreement, dated September 22, 2021, by and among Brookline Bancorp, Inc., Brookline Bank, Bank Rhode Island and Michael W. McCurdy.
10.13+		Employment Agreement, dated September 22, 2021, by and among Brookline Bancorp, Inc., Brookline Bank, Bank Rhode Island and Carl M. Carlson.


10.14+	~~Code~~	Employment Agreement, by and among Brookline Bancorp, Inc., PCSB Bank and Michael P. Goldrick, dated as of ~~Ethics for Financial Professionals~~May 23, 2022 (incorporated by reference to Exhibit ~~14 to~~10.2 of Brookline Bancorp, Inc.’s Form ~~10-K~~S-4 filed by Brookline Bancorp, Inc. with the Securities and Exchange Commission on ~~March 10, 2006)~~June 27, 2022)
21		Subsidiaries of the Registrant (incorporated by reference in Part I, Item 1. "Business—General" of this Annual Report on Form 10-K)
23*			Consent of Independent Registered Public Accounting Firm
31.1*			Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*			Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**			Rule 13a-14(b) Certifications of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**			Rule 13a-14(b) Certifications of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~101~~
97		Clawback Policy
101.INS		XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	~~The following materials from Brookline Bancorp, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2017 were formatted~~	XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted in ~~xBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2017~~Inline XBRL and 2016, (ii) Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015, (iv) Consolidated Statements of Changesincluded in Equity for the years ended December 31, 2017, 2016 and 2015, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015 and (vi) Notes to Consolidated Financial Statements.Exhibit 101)


~~(c)~~	~~Other Required Financial Statements and Schedules~~


Date: March 4, 2024
~~Date: February 28, 2018~~	BROOKLINE BANCORP, INC.
		By:	~~By:~~	/s/ PAUL A. PERRAULT
			Paul A. Perrault ~~President~~Chairman and Chief Executive Officer



/s/ PAUL A. PERRAULT	/s/ CARL M. CARLSON
Paul A. Perrault		Carl M. Carlson
Chairman and Chief Executive Officer (Principal Executive Officer)		Co-President, Chief Financial and Strategy Officer (Principal Financial Officer)


	At December 31, 2023
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Investment securities available-for-sale:

GSE debentures	$	220,604	$	517	$	19,994	$	201,127
GSE CMOs	66,463		33		4,879		61,617
GSE MBSs	186,614		62		16,679		169,997



Municipal obligations	18,785		184		47		18,922
Corporate debt obligations	20,521		82		887		19,716
U.S. Treasury bonds	470,764		423		26,450		444,737

Foreign government obligations	500		—		15		485
Total investment securities available-for-sale	$	984,251	$	1,301	$	68,951	$	916,601



	At December 31, 2017
	Less than Twelve Months				Twelve Months or Longer				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	120,409	$	1,263	$	12,481	$	366	$	132,890	$	1,629
GSE CMOs	2,862		34		123,548		4,053		126,410		4,087
GSE MBSs	94,985		753		74,782		1,569		169,767		2,322
SBA commercial loan asset-backed securities	34		—		33		1		67		1
Corporate debt obligations	30,978		154		2,423		84		33,401		238
U.S. Treasury bonds	4,767		62		—		—		4,767		62
Trust preferred securities	—		—		1,398		73		1,398		73
Marketable equity securities	—		—		503		9		503		9
Temporarily impaired investment securities available-for-sale	254,035		2,266		215,168		6,155		469,203		8,421
Investment securities held-to-maturity:
GSE debentures	26,594		281		14,208		530		40,802		811
GSEs MBSs	1,996		15		11,674		203		13,670		218
Municipal obligations	30,542		235		7,408		102		37,950		337
Foreign government obligations	—		—		500		—		500		—
Temporarily impaired investment securities held-to-maturity	59,132		531		33,790		835		92,922		1,366
Total temporarily impaired investment securities	$	313,167	$	2,797	$	248,958	$	6,990	$	562,125	$	9,787



	At December 31, 2017
	Commercial Real Estate		Multi- Family Mortgage		Construction		Commercial		Equipment Financing		Condominium Association		Other Consumer		Total
	(In Thousands)
Originated:
Loan rating:
Pass	$	2,054,376	$	735,313	$	139,278	$	670,265	$	850,006	$	52,619	$	14,628	$	4,516,485
OAEM	8,889		—		—		7,691		3,630		—		—		20,210
Substandard	5,926		608		860		17,681		5,012		—		39		30,126
Doubtful	201		—		—		1,188		3,326		—		—		4,715
Total originated	2,069,392		735,921		140,138		696,825		861,974		52,619		14,667		4,571,536

Acquired:
Loan rating:
Pass	94,244		24,459		—		6,643		4,501		—		104		129,951
OAEM	9,839		—		—		265		—		—		1		10,105
Substandard	1,494		290		—		1,271		13		—		—		3,068
Doubtful	—		—		—		—		—		—		—		—
Total acquired	105,577		24,749		—		8,179		4,514		—		105		143,124

Total loans	$	2,174,969	$	760,670	$	140,138	$	705,004	$	866,488	$	52,619	$	14,772	$	4,714,660