Berkshire Hills Bancorp (BHLB) 10-K 2024 FY Annual report

0001108134FALSE2024FYhttp://fasb.org/us-gaap/2024#AccountingStandardsUpdate202202Member120http://fasb.org/us-gaap/2024#AccountingStandardsUpdate202202MemberP4Yhttp://fasb.org/us-gaap/2024#NoninterestIncomehttp://fasb.org/us-gaap/2024#NoninterestIncomeP1YP1Yhttp://fasb.org/us-gaap/2024#OtherAssetshttp://fasb.org/us-gaap/2024#OtherAssetshttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2024#PropertyPlantAndEquipmentNethttp://fasb.org/us-gaap/2024#OtherLiabilitieshttp://fasb.org/us-gaap/2024#OtherLiabilitieshttp://fasb.org/us-gaap/2024#OtherLiabilitieshttp://fasb.org/us-gaap/2024#OtherLiabilitieshttp://fasb.org/us-gaap/2024#IncomeTaxExpenseBenefithttp://fasb.org/us-gaap/2024#IncomeTaxExpenseBenefithttp://fasb.org/us-gaap/2024#IncomeTaxExpenseBenefithttp://fasb.org/us-gaap/2024#IncomeTaxExpenseBenefithttp://fasb.org/us-gaap/2024#OtherNoncashIncomeExpensehttp://fasb.org/us-gaap/2024#OtherNoncashIncomeExpensehttp://fasb.org/us-gaap/2024#NoninterestExpensehttp://fasb.org/us-gaap/2024#NoninterestExpensehttp://www.berkshirebank.com/20241231#GainLossOnDispositionOfBusinessAndAssets

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

☒     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2024

☐        TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from           to           

Commission File Number: 001-15781

BERKSHIRE HILLS BANCORP, INC.

(Exact name of registrant as specified in its charter)

Delaware	04-3510455
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

60 State Street	Boston	Massachusetts	02109
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (617) 641-9206,

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of Exchange on which registered
Common stock, par value $0.01 per share	BHLB	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ý

No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definition of “large accelerated filer,” “accelerated filer”, “smaller reporting company”, and "emerging growth company" in Rule 12b-2 of the Exchange Act.  (Check one)

Large Accelerated Filer	x	Accelerated Filer	☐
Non-Accelerated Filer	o	Smaller Reporting Company	☐
		Emerging Growth Company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of

the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15

U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐

The aggregate market value of the voting and non-voting common equity held by non-affiliates was approximately $1.0 billion, based upon the closing price of $22.80 as quoted on the New York Stock Exchange as of the last business day of the registrant’s most recently completed second fiscal quarter.

The number of shares outstanding of the registrant’s common stock as of February 24, 2025 was 46,404,929.

DOCUMENTS INCORPORATED BY REFERENCE: None.

INDEX

PART I		4
ITEM 1.	BUSINESS	4
ITEM 1A.	RISK FACTORS	25
ITEM 1B.	UNRESOLVED STAFF COMMENTS	40
ITEM 1C.	CYBERSECURITY	41
ITEM 2.	PROPERTIES	43
ITEM 3.	LEGAL PROCEEDINGS	44
ITEM 4.	MINE SAFETY DISCLOSURES	44
PART II		45
ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	45
ITEM 6.	[RESERVED]	47
ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	48
ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	67
ITEM 8.	CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	69
ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	69
ITEM 9A.	CONTROLS AND PROCEDURES	69
ITEM 9B.	OTHER INFORMATION	69
ITEM 9C.	DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS	69
PART III		70
ITEM 10.	DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE	70
ITEM 11.	EXECUTIVE COMPENSATION	70

2

ITEM 12.		SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS	70
ITEM 13.		CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	70
ITEM 14.		PRINCIPAL ACCOUNTING FEES AND SERVICES	70
PART IV			71
ITEM 15.		EXHIBITS AND FINANCIAL STATEMENT SCHEDULES	71
ITEM 16.		FORM 10-K SUMMARY	73
SIGNATURES			74
TABLE INDEX
PART I			4
ITEM 1.			4
	ITEM 1 TABLE 1 — LOAN PORTFOLIO ANALYSIS		6
	ITEM 1 TABLE 2 — MATURITY AND SENSITIVITY OF LOAN PORTFOLIO		9
	ITEM 1 TABLE 3 — CREDIT QUALITY RATIOS		11
	ITEM 1 TABLE 4 — ALLOCATION OF ALLOWANCE BY LOAN CATEGORY		12
	ITEM 1 TABLE 5 — WEIGHTED AVERAGE YIELD ON SECURITIES		13
	ITEM 1 TABLE 6 — AVERAGE BALANCE AND WEIGHTED AVERAGE RATES FOR DEPOSITS		15
	ITEM 1 TABLE 7 — MATURITY OF DEPOSITS > $250,000		15
PART II			45
ITEMS 7-7A.			48
	ITEM 7 TABLE 1 — AVERAGE BALANCES, INTEREST AND AVERAGE YIELD COSTS		50
	ITEM 7 TABLE 2 — RATE VOLUME ANALYSIS		52
	ITEM 7 — 7A TABLE 3 — QUALITATIVE ASPECTS OF MARKET RISK		68

3

PART I

ITEM 1. BUSINESS

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (referred to as the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (referred to as the Securities Exchange Act), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions.

These forward-looking statements are subject to significant risks, assumptions and uncertainties, including among other things, factors related to the pending merger between Berkshire Hills Bancorp, Inc. (“Berkshire” or “the Company”) and Brookline Bancorp, Inc., including delays or impediments to completing the transaction, legal proceedings that may be instituted against the Company, expenses associated with the transaction, restrictions on Berkshire’s business during the pendency of the transaction, diversion of management’s attention from other business operations and opportunities, reactions of customers and employees to the transaction, challenges integrating the companies, and any failure to realize anticipated benefits of the transaction, and other factors such as changes in general economic and business conditions, increased competitive pressures, changes in the interest rate environment and inflation, legislative and regulatory change, changes in the financial markets, and other risks and uncertainties disclosed from time to time in documents that Berkshire files with the Securities and Exchange Commission, including the Risk Factors in Item 1A of this report.

Because of these and other uncertainties, Berkshire’s actual results, performance or achievements, or industry results, may be materially different from the results indicated by these forward-looking statements. In addition, Berkshire’s past results of operations do not necessarily indicate Berkshire’s combined future results. You should not place undue reliance on any of the forward-looking statements, which speak only as of the dates on which they were made. Berkshire is not undertaking an obligation to update forward-looking statements, even though its situation may change in the future, except as required under federal securities law. Berkshire qualifies all of its forward-looking statements by these cautionary statements.

GENERAL

Berkshire Hills Bancorp, Inc. is headquartered in Boston, Massachusetts. Berkshire is a Delaware corporation and the holding company for Berkshire Bank (“the Bank”). The Bank provides Commercial Banking, Retail Banking, Consumer Lending, Private Banking and Wealth Management services. At year-end 2024, the Bank had $12.3 billion in assets and 83 full-service financial centers in its New England and New York footprint.

On December 16, 2024, the Company entered into a definitive agreement (“the Agreement”) for a merger of equals with Brookline Bancorp, Inc. (“Brookline”) the parent company of Brookline Bank, Bank Rhode Island, and PCSB Bank. Pursuant to the Agreement, Brookline will merge with and into Berkshire in an all-stock transaction valued at approximately $1.1 billion, or $12.68 per share of Brookline common stock, based on the $30.20 closing price of Berkshire common stock on December 13, 2024.

Under the terms of the Agreement, each outstanding share of Brookline common stock will be exchanged for the right to receive 0.42 shares of Berkshire common stock. As a result of the transaction and a $100 million Berkshire common stock offering conducted to support the transaction, Berkshire shareholders will own approximately 55% (including the investors in the Berkshire common stock offering) and Brookline shareholders will own approximately 45% of the outstanding shares of the combined company.

The combined company will trade on the New York Stock Exchange and will announce a new name and ticker symbol prior to closing. The combined bank will also operate under a new name to be announced prior to closing. The executive headquarters for the combined company will be located at 131 Clarendon Street in Boston, MA, with operations centers located throughout the Northeast. The transaction is expected to close by the end of the second half of 2025, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approvals from Berkshire and Brookline shareholders.

4

FILINGS

Information regarding the Company is available through the Investor Relations tab at berkshirebank.com. The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge at sec.gov and, as soon as reasonably practicable after we electronically file such material with the Securities and Exchange Commission, at berkshirebank.com under the Investor Relations tab. Information on the website is not incorporated by reference and is not a part of this annual report on Form 10-K.

COMPETITION

The Company is subject to strong competition from banks and other financial institutions and financial service providers. Its competition includes national and super-regional banks. Non-bank competitors include credit unions, brokerage firms, insurance providers, financial planners, and the mutual fund industry. New technology is reshaping customer interaction with financial service providers and the increase of internet-accessible financial institutions increases competition for the Company’s customers. The Company generally competes on the basis of customer service, relationship management, and the fair pricing of its products. The location and convenience of branch offices is also a significant competitive factor, particularly regarding new offices. The Company is pursuing a “banker heavy, branch light” model in newer markets, and uses its mobile MyBanker teams which provide personalized service to customers with committed relationships. Due to recent mergers of in-market bank competitors, the Company is pursuing opportunities to expand its market share and talent recruitment. The Company seeks to differentiate itself with its DigitouchSM approach to personal service and user-friendly technology, as well as its commitment to corporate responsibility. The Company's brand theme of “Where You Bank Matters” is targeted to highlight these differentiating factors.

LENDING ACTIVITIES

General. The Bank originates loans in the basic portfolio categories discussed below. Lending activities are limited by federal and state laws and regulations. Loan interest rates and other key loan terms are affected principally by the Bank’s credit policy, asset/liability strategy, loan demand, competition, and the supply of money available for lending purposes. These factors, in turn, are affected by general and economic conditions, monetary policies of the federal government, including the Federal Reserve, legislative tax policies, and governmental budgetary matters. Most of the Bank’s loans held for investment are made in its market areas and are secured by real estate located in its market areas. Lending is therefore affected by activity in these real estate markets. The Bank monitors and manages the amount of long-term fixed-rate lending volume. Adjustable-rate loan products generally reduce interest rate risk but may produce higher loan losses in the event of sustained rate increases. The Bank generally originates loans for investment except for residential mortgages, which are sometimes originated for sale on a servicing released basis. Additionally, the Bank also originates Small Business Administration ("SBA") 7A loans for sale to investors. The Bank also conducts loan participations generally with other banks doing business in its markets, including selected national banks.

5

Loan Portfolio Analysis. The following table sets forth the year-end composition of the Bank’s loan portfolio in dollar amounts and as a percentage of the portfolio at the dates indicated. Further information about the composition of the loan portfolio is contained in Note 5 – Loans and Related Allowances for Credit Losses.

Item 1 – Table 1 –– Loan Portfolio Analysis

	2024				2023				2022
(In millions)	Amount		Percent of Total		Amount		Percent of Total		Amount		Percent of Total
Loans:
Construction	$	726	7.8	%	$	640	7.1	%	$	320	3.9	%
Commercial multifamily	637		6.8		599		6.6		620		7.5
Commercial real estate owner occupied	695		7.4		629		7.0		641		7.7
Commercial real estate non-owner occupied	2,770		29.5		2,607		28.8		2,496		29.9
Commercial and industrial	1,439		15.3		1,359		15.1		1,445		17.3
Residential real estate	2,772		29.5		2,760		30.5		2,312		27.7
Home equity	230		2.5		224		2.5		227		2.7
Consumer other	116		1.2		221		2.4		274		3.3
Total	$	9,385	100.0	%	$	9,039	100.0	%	$	8,335	100.0	%
Allowance for credit losses	(115)				(105)				(96)
Net loans	$	9,270			$	8,934			$	8,239

There is further information about the above components of the loan portfolio, and the risk characteristics relevant to each portfolio segment, in the “Loans and Related Allowance for Credit Losses” footnote to the financial statements referenced in Item 8 of this report. There is also information about the loan portfolio and changes in the portfolio during 2024 in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this report. There is reference made to Commercial and Retail Loans, as well as to Commercial Real Estate loans. Commercial Real Estate loans include Construction, Commercial Multi-Family, Commercial Real Estate Owner Occupied, and Commercial Real Estate Non-Owner Occupied. Commercial loans include Commercial Real Estate loans and Commercial and Industrial Loans. Retail loans include Residential Real Estate loans and Consumer loans, which are comprised of Home Equity loans and Consumer other loans.

6

Commercial Real Estate. The Bank originates commercial real estate loans on properties used for business purposes such as retail, multifamily, office, healthcare, hospitality, industrial, and manufacturing facilities. Commercial real estate loans are provided on owner-occupied properties and on investor-owned properties and also include construction loans. Loans may generally be made with amortizations of up to 30 years and with final maturities of 10 years or less. As part of its business activities, the Bank also enters into commercial loan participations and interest rate swaps.

The Bank originates construction loans to developers and commercial borrowers in its footprint. The maximum loan to value limits for construction loans follow Federal Deposit Insurance Corporation ("FDIC") supervisory limits, up to a maximum of 85 percent. The Bank commits to provide the permanent mortgage financing on many of its construction loans on income-producing property. Advances on construction loans are made in accordance with a schedule reflecting the cost of the improvements. Construction loans include land acquisition loans up to a maximum 50 percent loan to value on raw land. Construction loans may have greater credit risk due to the dependence on completion of construction and other real estate improvements, as well as the sale or rental of the improved property. The Bank generally mitigates these risks with presale or preleasing requirements and phasing of construction.

Commercial and Industrial Loans ("C&I"). C&I loans are mostly managed through the Bank’s commercial middle market banking organization, as well as its Asset Based Lending Group, its Small Business Banking Group, and 44 Business Capital. The Bank offers secured commercial term loans with repayment terms which are normally limited to the expected useful life of the asset being financed, and generally not exceeding ten years. The Bank also offers revolving loans, lines of credit, letters of credit, time notes and SBA guaranteed loans. Business lines of credit have interest rates that adjust, and are generally subject to annual review and renewal. Commercial and industrial loans are generally secured by a variety of collateral such as accounts receivable, inventory and equipment, and are generally supported by personal guarantees. Loan-to-value ratios depend on the collateral type and generally do not exceed 80 percent of orderly liquidation value or net book value as reported on the borrower’s financial statements. Some commercial loans may also be secured by liens on real estate. The Bank generally does not make unsecured commercial loans.

Commercial and industrial loans are of higher risk and are made primarily on the basis of the borrower’s ability to make repayment from the cash flows of its business. Further, any collateral securing such loans may depreciate over time, may be difficult to monitor and appraise and may fluctuate in value. The Bank gives additional consideration to the borrower’s credit history and the guarantor’s capacity to help mitigate these risks. Additionally, the Bank uses loan structures including shorter terms, amortizations, and advance rate limitations to additionally mitigate credit risk. Credit enhancements in the form of additional collateral or guarantees are normally considered for start-up businesses without a qualifying cash flow history.

The Company considers commercial and industrial loans, together with its owner-occupied commercial real estate loans, as constituting the primary relationship based component of its commercial lending activities. Commercial and industrial loans are commonly structured as variable rate loans, and are accordingly impacted by the recent environment of rising interest rates.

The Asset Based Lending Group serves the commercial middle market in New England, as well as the Bank’s market in northeastern New York. The group expands the Bank’s business lending offerings to include revolving lines of credit and term loans secured by accounts receivable, inventory, and other assets to manufacturers, distributors and select service companies experiencing seasonal working capital needs, rapid sales growth, a turnaround, buyout or recapitalization with credit needs generally ranging from $2 million to $25 million. Asset based lending involves monitoring loan collateral so that outstanding balances are properly margined by business asset collateral, which reduces the risks associated with these loans.

Small Business Banking Group handles most business relationships which are smaller than the middle market category. Additionally, some smaller business needs are handled through the Bank’s retail branch system. Berkshire Bank also owns Firestone Financial LLC. ("Firestone"), which originated loans secured by business-essential equipment throughout the U.S. Key customer segments included the fitness, carnival, gaming, and entertainment industries. The origination of loans by Firestone was terminated in mid-2022 and the remaining portfolio totaled $41 million at December 31, 2024.

7

44 Business Capital is a dedicated SBA 7A program lending team based in the Philadelphia area. This team originates loans in the Northeast, Mid-Atlantic and nationally. 44 Business Capital also works with business banking and small business teams to provide SBA guaranteed loans to Business Banking Customers in Berkshire’s footprint. This team generally sells the guaranteed portions of these loans with servicing retained and the Bank retains the unguaranteed portions of the loans in its C&I loan portfolio. The unguaranteed loan balances are participated pari-passu with the SBA and are generally collateralized and supported by recourse to business principals. The Bank is a preferred SBA lender and closely manages the servicing portfolio pursuant to SBA requirements. This team is the Bank’s largest source of commercial lending fee revenue.

Residential Mortgages. Through its mortgage banking operations, the Bank offers fixed-rate and adjustable-rate residential mortgage loans to individuals with maturities of up to 30 years that are fully amortizing with monthly loan payments. The majority of loans have been originated for investment. The Bank does not offer subprime mortgage lending programs. The Bank buys and sells seasoned mortgages primarily with smaller financial institutions operating in its markets.

Mortgage loan originations often include rate lock features intended to cover normal processing times. These rate locks introduce price risk into the Company’s operations and cause mortgage origination yields to lag market interest rates. The Bank does not offer interest-only or negative amortization mortgage loans. Adjustable rate mortgage loan interest rates may rise as interest rates rise, thereby increasing the potential for default. The Bank also originates construction loans which generally provide 15-month construction periods followed by a permanent mortgage loan, and follow the Bank’s normal mortgage underwriting guidelines. Mortgage banking also requires flexible and scalable operations due to the volatility of mortgage demand over time. Investor management is integral to maintaining the secondary market support that is a component for these operations.

Consumer Loans. The Bank engages in prime home equity lending, following its conforming mortgage underwriting guidelines with more streamlined verifications and documentation. Most of these outstanding loans are prime based home equity lines with a maximum combined loan-to-value of 85 percent. Home equity line credit risks include the risk that higher interest rates will affect repayment and possible compression of collateral coverage on second lien home equity lines. The Company exited its prime indirect auto originations business in 2019 and has a remaining portfolio in runoff. The Company previously originated consumer loans through a third party relationship with financial technology company Upstart which originates unsecured consumer loans through the internet using artificial intelligence technology in combination with the Bank’s underwriting criteria. The Bank suspended originating loans through this partnership in mid-2022 and the remaining portfolio totaled $7 million at December 31, 2024.

8

Maturity and Sensitivity of Loan Portfolio. The following table shows contractual final maturities of loans at year-end 2024. The contractual maturities do not reflect premiums, discounts, deferred costs, or prepayments.

Item 1 - Table 2A - Loan Contractual Maturity - Scheduled loan amortizations are not included in the maturities presented.

Contractual Maturity	One Year		One to		Five to		More Than
(In thousands)	or Less		Five Years		Fifteen Years		Fifteen Years		Total
Loans:
Construction	$	226,597	$	372,565	$	122,696	$	4,486	$	726,344
Commercial multifamily	44,855		298,067		290,263		3,620		636,805
Commercial real estate owner occupied	87,341		213,585		306,569		87,835		695,330
Commercial real estate non-owner occupied	435,963		1,649,267		673,356		10,861		2,769,447
Commercial and industrial	363,851		747,410		312,243		15,671		1,439,175
Residential real estate	1,709		29,154		178,223		2,562,683		2,771,769
Home equity	168		1,174		66,430		162,593		230,365
Consumer other	3,278		57,174		48,394		6,913		115,759
Total	$	1,163,762	$	3,368,396	$	1,998,174	$	2,854,662	$	9,384,994

Item 1 - Table 2B - Total loans due after one year as of December 31, 2024 - fixed and variable interest rates

(In thousands)	Fixed Interest Rate		Variable Interest Rate		Total
Loans:
Construction	$	84,347	$	415,400	$	499,747
Commercial multifamily	98,202		493,748		591,950
Commercial real estate owner occupied	195,268		412,721		607,989
Commercial real estate non-owner occupied	992,582		1,340,902		2,333,484
Commercial and industrial	298,814		776,510		1,075,324
Residential real estate	1,723,851		1,046,209		2,770,060
Home equity	4,780		225,417		230,197
Consumer other	111,881		600		112,481
Total	$	3,509,725	$	4,711,507	$	8,221,232

Loan Administration. Lending activities are governed by a loan policy approved by the Board’s Risk Management, Capital, and Compliance Committee. Internal staff perform and monitor post-closing loan documentation review, quality control, and commercial loan administration. The lending staff assigns a risk rating to all commercial loans, excluding point scored small business loans. Management primarily relies on internal risk management staff to review the risk ratings of the majority of commercial loan balances.

The Bank’s lending activities follow written, non-discriminatory underwriting standards and loan origination procedures established by the Risk Management, Capital and Compliance Committee and Management, under the leadership of the Chief Risk Officer. The Bank’s loan underwriting is based on a review of certain factors including risk ratings, repayment capacity, recourse, loan-to-value ratios, and material policy exceptions. The Risk Management, Capital and Compliance Committee has established individual and combined loan limits and lending approval authorities. Management’s Executive Loan Committee is responsible for commercial loan approvals in accordance with these standards and procedures. Generally, pass rated secured commercial loans can be approved jointly up to $7 million by the business line Managing Director and Credit Director. Loans up to $12.5 million can be approved with the additional signature of the Chief Credit Officer. Loans in excess of this amount, and designated lower rated loans are approved by the Executive Loan Committee. The Bank tracks loan underwriting exceptions and exception reports are actively monitored by executive lending management.

9

The Company's administrative monitoring of the commercial real estate portfolio, the largest segment of the loan portfolio, reflects its risk based focus. The Company periodically reviews the larger exposures of all commercial real estate loans maturing in the next five years, including reviewing debt service coverage. It has expanded its monitoring of portfolio-level lease expirations and continued its review of trends in commercial real estate appraisals. The Company is reviewing trends in large loan originations and has increased its monitoring of portfolio components and trends, with a focus on office loans and multifamily. Trends in lease maturities and renewals are updated periodically. Upcoming loan maturities and larger variable and adjustable rate loans are being monitored.

The Bank’s lending activities are conducted by its salaried and commissioned loan personnel. Designated salaried branch staff originate conforming residential mortgages and receive bonuses based on overall performance. Additionally, the Bank employs commissioned residential mortgage originators. Commercial lenders receive salaries and are eligible for bonuses based on individual and overall performance. The Bank purchases whole loans and participations in loans from banks headquartered in its market and from outside of its market. These loans are underwritten according to the Bank’s underwriting criteria and procedures and are generally serviced by the originating lender under terms of the applicable agreement. The Bank routinely sells newly originated, fixed-rate residential mortgages in the secondary market. Customer rate locks are offered without charge and rate locked applications are generally committed for forward sale or hedged with derivative financial instruments to minimize interest rate risk pending delivery of the loans to the investors. The Bank also sells interest rate derivatives to larger commercial borrowers desiring to fix their interest rates through interest rate swaps, and includes these derivatives in its underwriting and administrative procedures.

The Bank also sells residential mortgages and commercial loan participations on a non-recourse basis. The Bank issues loan commitments to its prospective borrowers conditioned on the occurrence of certain events. Loan origination commitments are made in writing on specified terms and conditions and are generally honored for up to 60 days from approval and may be honored for up to six months; some commercial commitments are made for longer terms. The Company also monitors pipelines of loan applications and has processes for issuing letters of interest for commercial loans and pre-approvals for residential mortgages, all of which are generally conditional on completion of underwriting prior to the issuance of formal commitments.

The loan policy sets certain limits on concentrations of credit and requires periodic reporting of concentrations to the Risk Management, Capital and Compliance Committee. The Bank has heightened monitoring of its 25 largest borrower relationships. Commercial real estate is generally managed within federal regulatory monitoring guidelines of 300% of risk based capital for non-owner occupied commercial real estate and 100% for construction loans. The Bank has hold limits for numerous categories of commercial specialty lending including healthcare, hospitality, designated franchises, and leasing, as well as hold limits for designated commercial loan participations purchased. In most cases, these limits are below 100% of risk based capital for all outstanding loans in each monitored category. Based on the supervisory definition of commercial real estate loans which excludes owner-occupied properties, the supervisory measure of commercial real estate loans to total bank regulatory capital measured 292% at period-end, compared to 286% at year-end 2023. The supervisory measure of construction loans to bank regulatory capital measured 54% and 51% at the above respective dates.

Problem Assets. The Bank prefers to work with borrowers to resolve problems rather than proceeding to foreclosure. The Company monitors modifications of loans to borrowers in financial distress and tracks the subsequent performance of these loans. For residential mortgage loans, the Bank generally follows FDIC guidelines to attempt a restructuring that will enable owner-occupants to remain in their home. However, if these processes fail to result in a performing loan, then the Bank generally will initiate foreclosure or other proceedings no later than the 90th day of a delinquency, as necessary, to minimize any potential loss. Management reports delinquent loans and non-performing assets to the Board quarterly. Loans are generally removed from accruing status when they reach 90 days delinquent, except for certain loans which are well secured and in the process of collection. The Company’s ongoing quarterly process of reviewing larger criticized loans evaluates risk ratings and accrual status based on updated information about loan performance and related risk management issues at the loan level. Loan collections are managed by a combination of the related business units and the Bank’s special assets group, which focuses on larger, riskier collections and the recovery of purchased credit deteriorated loans.

Real estate obtained by the Bank as a result of loan collections, including foreclosures, is classified as real estate owned until sold. When property is acquired it is recorded at fair market value less estimated selling costs at the date of foreclosure, establishing a new cost basis. Holding costs and decreases in fair value after acquisition are expensed.

10

Asset Classification and Delinquencies. The Bank performs an internal analysis of its commercial loan portfolio and assets to classify such loans and assets in a manner similar to that employed by federal banking regulators. There are four classifications for loans with higher than normal risk: Loss, Doubtful, Substandard, and Special Mention. Usually an asset classified as Loss is fully charged-off. Substandard assets have one or more defined weaknesses and are characterized by the distinct possibility that the insured institution will sustain some loss if the deficiencies are not corrected. Doubtful assets have the weaknesses of substandard assets with the additional characteristic that the weaknesses make collection or liquidation in full on the basis of currently existing facts, conditions, and values questionable, and there is a high possibility of loss. Special mention are assets that do not currently expose the insured institution to sufficient risk to warrant classification in one of the aforementioned categories, but possess weaknesses. Please see the additional discussion of non-accruing and potential problem loans in Item 7 and additional information in notes to the financial statements.

Allowance for Credit Losses on Loans. The Bank’s loan portfolio is regularly reviewed by management to evaluate the adequacy of the allowance for credit losses on loans. Management makes estimates of future economic conditions over the life of the loan portfolio and other future conditions and arrives at a reasonable estimate of expected loan losses. Different banks may use different estimates and arrive at different expectations, and therefore, comparisons between banks may be difficult. The accounting is based on future projections and our estimates may change significantly from period to period, and accordingly, the amounts of the allowance and provision may vary between periods. Further information about the allowance is discussed further in Note 1 - Summary of Significant Accounting Policies of the Consolidated Financial Statements.

Management believes that it uses the best information available to establish the allowance. However, future adjustments to the allowance for credit losses on loans may be necessary, and results of operations could be adversely affected if circumstances differ substantially from the assumptions used in making its determinations. There can be no assurance that the existing allowance for credit losses is adequate or that increases will not be necessary should the quality of any loan or loan portfolio category deteriorate. Regulatory agencies may require the Bank to make additional provisions for credit losses based upon judgments different from those of management. Any material increase in the allowance may adversely affect the Bank’s financial condition and results of operations.

Item 1 - Table 3 - Credit Quality Ratios

	2024		2023		2022
Ratios:
Allowance for credit losses on loans/total loans	1.22	%	1.17	%	1.15	%
Nonaccrual loans/total loans	0.26	%	0.24	%	0.37	%
Allowance for credit losses/nonaccruing loans	469.18	%	492.47	%	309.41	%
Net charge-offs/average loans	0.16	%	0.26	%	0.27	%

Item 1 - Table 3.a - Net charge-offs to average loans for each loan category

	2024		2023		2022
Net charge-offs to average loans:
Construction	—	%	—	%	—	%
Commercial multifamily	0.01		—		—
Commercial real estate owner occupied	—		(0.01)		—
Commercial real estate non-owner occupied	—		—		0.06
Commercial and industrial	0.06		0.17		0.20
Residential real estate	(0.01)		—		(0.01)
Home equity	—		—		—
Consumer other	0.10		0.10		0.02

11

The following tables present year-end data for the approximate allocation of the allowance for credit losses on loans by loan categories at the dates indicated (including an apportionment of any unallocated amount). The first table shows for each category the amount of the allowance allocated to that category as a percentage of the outstanding loans in that category. The second table shows the allocated allowance together with the percentage of loans in each category to total loans. Management believes that the allowance can be allocated by category only on an approximate basis. The allocation of the allowance to each category is not indicative of future losses and does not restrict the use of any of the allowance to absorb losses in any category.

Item 1 - Table 4A - Allocation of Allowance for Credit Losses on Loans by Category (as of year-end) 

	2024				2023				2022
(Dollars in thousands)	Amount Allocated		Percent  Allocated to Total Loans in Each Category		Amount Allocated		Percent  Allocated to Total Loans in Each Category		Amount Allocated		Percent  Allocated to Total Loans in Each Category
Construction	$	4,463	0.6	%	$	2,885	0.5	%	$	1,227	0.4	%
Commercial multifamily	4,084		0.6		2,475		0.4		1,810		0.3
Commercial real estate owner occupied	11,303		1.6		9,443		1.5		10,739		1.7
Commercial real estate non-owner occupied	38,520		1.4		38,221		1.5		30,724		1.2
Commercial and industrial	25,549		1.8		18,602		1.4		18,743		1.3
Residential real estate	22,479		0.8		19,622		0.7		18,666		0.8
Home equity	2,392		1.0		2,015		0.9		2,173		1.0
Consumer other	5,910		5.1		12,094		5.5		12,188		4.5
Total	$	114,700	1.2	%	$	105,357	1.2	%	$	96,270	1.2	%

Item 1 - Table 4B - Allocation of Allowance for Credit Losses on Loans (as of year-end)

	2024				2023				2022
(Dollars in thousands)	Amount Allocated		Percent  of Loans in Each Category to Total Loans		Amount Allocated		Percent  of Loans in Each Category to Total Loans		Amount Allocated		Percent  of Loans in Each Category to Total Loans
Construction	$	4,463	7.7	%	$	2,885	7.1	%	$	1,227	3.8	%
Commercial multifamily	4,084		6.8		2,475		6.6		1,810		7.4
Commercial real estate owner occupied	11,303		7.4		9,443		7.0		10,739		7.7
Commercial real estate non-owner occupied	38,520		29.5		38,221		28.8		30,724		30.0
Commercial and industrial	25,549		15.4		18,602		15.0		18,743		17.4
Residential real estate	22,479		29.5		19,622		30.5		18,666		27.7
Home equity	2,392		2.5		2,015		2.5		2,173		2.7
Consumer other	5,910		1.2		12,094		2.5		12,188		3.3
Total	$	114,700	100.0	%	$	105,357	100.0	%	$	96,270	100.0	%

12

INVESTMENT SECURITIES ACTIVITIES

The securities portfolio provides a source of liquidity, income and interest rate risk management. Decisions are made in accordance with the Company’s investment policy which is reviewed and approved by the Board and includes consideration of risk, return, duration, and portfolio concentrations.

The Company has historically maintained a high-quality portfolio of managed duration residential and commercial mortgage-backed securities, together with a portfolio of state and municipal bonds and obligations of national and local issuers. All of the mortgage-backed securities are issued by Fannie Mae, Ginnie Mae, or Freddie Mac. The Company generally designates debt securities as available for sale, but sometimes designates securities as held to maturity based on its intent. The Company periodically invests in corporate bonds, investment grade and non-rated fixed-income capital instruments issued by local and regional financial institutions, and funds financing community reinvestment projects. Investment securities were sold in the fourth quarter of 2023 and first quarter of 2024. This allowed the Company to reposition its balance sheet to improve net interest income and to fund the branch sale. The securities were carried at fair value on the Company’s balance sheet and the non-operating losses on sale therefore had no effect on shareholders’ equity.

Due to elevated market interest rates, the net fair value of the investment securities portfolio was below amortized costs at year-end 2024. Please see Note 4 – Securities in the financial statement for more information. The Company’s ability and intent to hold the portfolio at year-end 2024 was consistent with its liquidity and capital resources as discussed in Item 7 of this report.

The following table summarizes year-end 2024 amortized cost, weighted average yields, and contractual maturities of debt securities. Yields are shown on a fully taxable-equivalent basis and are based on amortized cost. A proportion of the mortgage-backed securities are planned amortization class bonds. The contractual maturities of mortgage-backed securities shown below reflect the maturities of the underlying mortgage collateral based on final maturities and do not include scheduled amortization. Yields include amortization and accretion of premiums and discounts.

Item 1 - Table 5 - Weighted Average Yield

	One Year or Less				More than One Year to Five Years				More than Five Years to Ten Years				More than Ten Years				Total
(In millions)	Amortized Cost		Weighted Average Yield		Amortized Cost		Weighted Average Yield		Amortized Cost		Weighted Average Yield		Amortized Cost		Weighted Average Yield		Amortized Cost		Weighted Average Yield
Municipal bonds and obligations	$	1.0	0.3	%	$	8.3	1.4	%	$	77.9	2.4	%	$	212.6	0.8	%	$	299.8	1.0	%
Mortgage-backed securities	7.9		1.2	%	4.0		0.2	%	58.5		0.9	%	888.1		1.4	%	958.5		1.3	%
Other bonds and obligations	7.0		0.4	%	15.8		5.9	%	23.6		0.6	%	0.8		—	%	47.2		0.2	%
Total	$	15.9	2.0	%	$	28.1	7.4	%	$	160.0	3.9	%	$	1,101.5	2.2	%	$	1,305.5	2.5	%

13

DEPOSIT ACTIVITIES AND OTHER SOURCES OF FUNDS

Deposits are the major source of funds for the Bank’s lending and investment activities. The Bank serves personal, commercial, non-profit, and municipal deposit customers. The Bank offers a wide variety of deposit accounts with a range of interest rates and terms. The Bank may also periodically offer promotional interest rates and terms for limited periods of time. The Bank’s deposit accounts consist of demand deposits (non-interest-bearing checking), NOW (interest-bearing checking), regular savings, money market savings, and time certificates of deposit. Additionally, the Bank offers a variety of retirement deposit accounts to personal and business customers.

The Bank emphasizes its transaction deposits – checking and NOW accounts – for personal accounts and checking accounts promoted to businesses. These accounts have the lowest marginal cost to the Bank and are also often a core account for a customer relationship. The Bank offers a courtesy overdraft program to improve customer service, and also provides debit cards and other electronic fee producing payment services to transaction account customers. The Bank offers targeted online and mobile deposit account opening capabilities for personal accounts. The Bank promotes remote deposit capture devices so that commercial accounts can make deposits from their place of business.

Deposit related fees include overdraft fees, interchange fees related to debit card usage, service charges, and other miscellaneous transactions and convenience services sold to customers through the branch system as part of an overall service relationship. The Bank offers compensating balance arrangements for larger business customers as an alternative to fees charged for checking account services.

In addition to providing service through its branches, Berkshire provides services to deposit customers through its private bankers, MyBankers, commercial/small business relationship managers, and call center representatives. Commercial cash management services are an important commercial service offered to commercial and governmental depositors and a fee income source to the bank. The Bank also operates a commercial payment processing business that serves regional and national payroll service bureau customers. These payroll deposits often fluctuate daily by hundreds of millions of dollars depending on payroll cycles.

Online banking and mobile banking functionality is increasingly important as a component of deposit account access and service delivery. The Bank has partnered with a third party fintech company to provide enhanced online deposit account opening services and new online and mobile banking platform developed in partnership with this provider as an important milestone in its DigitouchSM strategy. The Company also is monitoring the development of payment services which are growing in their importance in the personal and commercial deposit markets. In 2024, the Bank introduced the Berkshire One offering, an innovative suite of digital-first banking solutions developed by strategically integrating advanced technology to enhance customer satisfaction and operational efficiency.

14

The following table presents information concerning average balances and weighted average interest rates on the Bank’s interest-bearing deposit accounts for the years indicated.

Item 1 - Table 6 - Average Balance and Weighted Average Rates for Deposits

	2024						2023						2022
(In millions)	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
Demand	$	2,283.7	24	%	—	%	$	2,584.6	27	%	—	%	$	2,914.9	30	%	—	%
NOW and other	767.4		8		0.5		1,048.9		11		0.6		1,416.7		14		0.4
Money market	2,993.1		31		2.8		2,727.3		28		3.4		2,809.1		29		0.5
Savings	1,011.8		11		1.1		1,067.2		11		1.0		1,114.8		11		0.1
Time	2,480.2		26		3.3		2,275.8		23		4.0		1,541.7		16		0.9
Total	$	9,536.2	100	%	2.0	%	$	9,703.8	100	%	2.4	%	$	9,797.2	100	%	0.9	%

Estimated uninsured deposits were $5.0 billion and $4.6 billion at December 31, 2024 and 2023, respectively. Estimated uninsured deposits are based on the same methodologies and assumptions used for the Bank's regulatory reporting requirements. Estimated uninsured deposits adjusted to exclude internal accounts and collateralized deposits were $4.0 billion and $3.7 billion at December 31, 2024 and 2023, respectively. At year-end 2024, time deposits in excess of the FDIC insurance limit and estimated time deposits that are otherwise uninsured by maturity were as follows:

Item 1 - Table 7 - Maturity of Deposits >$250,000

Maturity Period	Time Deposits that Meet or Exceed the FDIC Insurance Limit		Estimated Portion of Time Deposits in Excess of the FDIC Insurance Limit		Estimated Aggregate Time Deposits in Excess of the FDIC Insurance Limit and Otherwise Uninsured Time Deposits
(In thousands)
Three months or less	$	373,572	$	124,844	$	124,844
Over 3 months through 6 months	228,142		62,443		62,443
Over 6 months through 12 months	64,707		24,130		24,130
Over 12 months	45,098		19,026		19,026
Total	$	711,519	$	230,443	$	230,443

The Bank’s deposits are insured by the FDIC. The Bank utilizes brokered certificates of deposits (CDs) to diversify its funding base, augment its interest rate risk management positioning, and to support loan growth. Brokered CDs are sourced through select approved brokers and are managed as a component of the Bank's Liquidity Policy. The Bank also offers brokered reciprocal money market arrangements to provide additional deposit protection to certain large commercial and institutional accounts. These balances are viewed as part of overall relationship balances with regional customers.

The Bank is a member of the Federal Home Loan Bank (‘‘FHLB’’) of Boston, which provides a source of funding for member institutions and is a tool to manage liquidity and interest rate risk. The Bank is subject to the rules and requirements of the FHLB, including the requirement to acquire and hold shares of capital stock in the FHLB. The Bank was in compliance with FHLB rules and requirements as of December 31, 2024. The Bank also has access to borrowings from the Federal Reserve Bank of Boston.

The Company had $100 million in subordinated notes, a $15 million trust preferred obligation and a $7 million trust preferred obligation outstanding at year-end 2024. The Company’s common stock is listed on the New York Stock Exchange under the ticker “BHLB”. Subject to certain limitations, the Company can also choose to issue common stock, preferred stock, subordinated debt, or senior debt in public stock offerings or private placements. The Company maintains a shelf registration as part of its routine capital management.

15

DERIVATIVE FINANCIAL INSTRUMENTS

The Company offers interest rate swaps to commercial loan customers who wish to fix the interest rate on their loans, and concurrently enters into offsetting positions with third-party financial institutions. The Company may also enter into risk participation agreements with other lending institutions for customer related positions. On a limited basis, the Company offers foreign exchange services to customers on both a spot and forward basis. The Company may also use derivative financial instruments to manage its interest rate risk associated with the Company’s loan portfolios and borrowings. All derivative financial instruments eligible for clearing are cleared through the Chicago Mercantile Exchange (“CME”).

WEALTH MANAGEMENT SERVICES

The Company’s Wealth Management Group provides consultative investment management, trust administration, and financial planning to individuals, businesses, and institutions, with an emphasis on personal investment management. The Wealth Management Group has built a track record over more than a decade with its dedicated in-house investment management team. The Bank also provides a full line of investment products, financial planning, and brokerage services through BerkshireBanc Investment Services utilizing Commonwealth Financial Network as the broker/dealer. The Bank is integrating with its growing private banking and MyBanker teams to further develop wealth management account generation. The Wealth Management Group reported $1.6 billion in total assets under management and $2.0 billion in assets under supervision at year-end 2024. The comparable totals at year-end 2023 were $1.5 billion and $1.9 billion, respectively.

HUMAN CAPITAL MANAGEMENT

Berkshire’s people are the driving force behind its progress on its strategic goals and ability to deliver tailored financial solutions for its clients. The Company’s approach to human capital management is grounded in its corporate values, business strategy and focuses on:

•Strong oversight and risk management practices

•Recruitment

•Compensation & Benefits

•Professional Development, Engagement & Retention

•Health & Wellness

In 2024, the company realigned its workforce to ensure its organizational structure supported its operating needs and strategic objectives while it continued to build on successful strategies to recruit, develop, engage and retain top talent. At year-end 2024, the Company had 1,216 full time equivalent staff, including 1,193 full-time positions and 45 part-time positions.

OVERSIGHT

The Compensation Committee of the Board of Directors oversees executive compensation, and the Corporate Responsibility & Culture committee oversees company culture and related human capital matters. The SEVP, Chief Human Resources & Culture Officer provides management oversight on human capital matters. The Company proactively identifies potential human capital related risks, such as the labor market shortage, skills gap, rising labor and health care costs, and employee retention and designs strategies to mitigate those risks. Strong human capital management is viewed as integral to the Company's ability to meet its strategic objectives, deliver a superior client experience and drive sustainable shareholder returns.

RECRUITMENT

Berkshire operates in a highly competitive labor market with strong competition for top talent. The Company relies on and continues to recruit employees with the right mix of skills, expertise and experiences. The Company forecasts its hiring needs based on attrition, skills assessments, market conditions, resource availability and strategic objectives. This helps inform corporate strategies to fill current and future open positions. The Company leverages several strategies to support its talent pipeline and talent acquisition activities including formal advertising, postings on targeted career sites, career events, internship placements, affinity group relationships, and the use of experienced external recruiters for key management and specialized positions. Berkshire also maintains a small internal team of talent recruitment professionals.

16

COMPENSATION & BENEFITS

The Company continually evaluates its compensation strategies and benefits programs, benchmarks to industry and peers and surveys the landscape of best practices to develop compensation and benefits packages that reward performance and retain top talent at all levels of the Company. Berkshire provides a robust incentive plan to reward performance, comprehensive medical coverage, paid vacation, personal and sick time, paid protective leave for gender-based violence, a 401(k) plan with employer match, long-term disability insurance, and group term life insurance. In addition, Berkshire offers a day care reimbursement program, a dependent care expense account, family and medical leave along with flexible work arrangements, including the ability to work remote dependent on the duties of one’s job. In addition to its compensation and health benefits, Berkshire offers a rewards and recognition program, wellness day, volunteer-time off, a matching-gift program, an employee assistance program, regular performance reviews, professional development and the You FIRST Fund to help employees impacted by personal financial hardships.

PROFESSIONAL DEVELOPMENT, ENGAGEMENT & RETENTION

Training and development programs provide employees with the knowledge and skills to succeed and have upward career mobility. They are critical components, along with competitive compensation and benefits programs, to having an engaged workforce. Ultimately an engaged workforce drives high levels of productivity and retention which reduces human capital risks, expense, and advances Berkshire’s performance.

The Company provides learning programs consistent with one’s job responsibilities, professional goals, and development plans. Employees have regular performance assessments to identify strengths, areas for further growth and career interests. Berkshire reskills and upskills employees from across the Company helping them advance along career paths by taking on expanded responsibilities and roles. The Company offers a mentoring program for high potential employees and encourages employees to pursue appropriate educational opportunities. Berkshire remains committed to providing pathways for its bankers to grow and maintains succession plans for key leadership positions.

Berkshire monitors the progress of its efforts to evaluate the effectiveness of programs and strategies through a comprehensive employee engagement survey and regular forums between employees and management. The Company believes that its programs and strategies have been a differentiator in the market. Further information on Berkshire Human Capital Management practices can be found in the Company’s most recent Sustainability Report.

SELECT HUMAN CAPITAL METRICS

Number of Employees	1,238
Number of Full-Time Employees	1,193
Number of Part-Time Employees	45
Turnover Rate	19.5%
Retention Rate	80%

*Workforce metrics reported are as of or for the year ended December 31, 2024

SUBSIDIARY ACTIVITIES

The Company wholly-owns Berkshire Bank. The Bank operates as a commercial bank under a Massachusetts trust company charter. Berkshire Bank owns Firestone Financial, LLC which is a Massachusetts limited liability company, as well as consolidated subsidiaries operated as Massachusetts securities corporations and other subsidiary entities. The Company also owns all of the common stock of Delaware statutory business trusts, Berkshire Hills Capital Trust I and SI Capital Trust II. The capital trusts are unconsolidated and their only material assets are trust preferred securities related to the junior subordinated debentures reported in the Company’s Consolidated Financial Statements. Additional information about the subsidiaries is contained in Exhibit 21 to this report.

17

REGULATION AND SUPERVISION

The Company is a Delaware corporation and a bank holding company that has elected financial holding company status within the meaning of the Bank Holding Company Act of 1956, as amended. It is registered with, supervised by and required to comply with the rules and regulations of the Federal Reserve Board. The Federal Reserve Board requires the Company to file various reports and also conducts examinations of the Company. The Company must receive the approval of the Federal Reserve Board to engage in certain transactions, such as acquisitions of additional banks and savings associations, and the Company must seek nonobjection for various capital actions, including stock repurchases.

The Bank is a Massachusetts-chartered trust company and its deposits are insured up to applicable limits by the FDIC. The Bank is subject to extensive regulation by the Massachusetts Commissioner of Banks (the “Commissioner”), as its chartering agency, and by the FDIC, as its primary regulator and deposit insurer. The Bank is required to file reports with the Commissioner and the FDIC concerning its activities and financial condition in addition to obtaining regulatory approvals prior to entering into certain transactions such as mergers with, or acquisitions of, other depository institutions or branches of other institutions. Under specified conditions, the Bank must also seek regulatory approval of capital distributions to the Company, its sole shareholder.

The Commissioner and the FDIC conduct periodic examinations to test the Bank’s safety and soundness and compliance with various regulatory requirements. The regulatory structure gives the regulatory authorities extensive discretion in connection with supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate loan loss reserves for regulatory purposes. Any change in such regulatory requirements and policies, whether by the Commissioner, the Massachusetts legislature, the FDIC, the Federal Reserve Board, or Congress, could have a material adverse impact on the Company, the Bank, and their operations.

Certain regulatory requirements applicable to the Company and the Bank are referred to below. The description of statutory provisions and regulations applicable to financial institutions and their holding companies set forth in this Form 10-K does not purport to be a complete description of such statutes and regulations and their effects on the Company and the Bank and is qualified in its entirety by reference to the actual laws and regulations. A summary of the regulatory requirements referred to below is as follows:

•Massachusetts Banking Laws and Supervision        

•Federal Banking Regulations

•Enforcement

•Holding Company Regulation

•Mergers and Acquisitions

•Other Regulations

•Taxation

Massachusetts Banking Laws and Supervision

General. As a Massachusetts-chartered depository institution, the Bank is subject to various Massachusetts statutes and regulations which govern, among other things, investment powers, lending and deposit-taking activities, borrowings, maintenance of surplus and reserve accounts, distribution of earnings and payment of dividends. In addition, the Bank is subject to Massachusetts consumer protection and civil rights laws and regulations. The approval of the Commissioner is required for a Massachusetts-chartered institution to establish or close branches, merge with other financial institutions, issue stock, and undertake certain other activities.

Massachusetts law and regulations generally allow Massachusetts institutions to engage in activities permissible for federally chartered banks or banks chartered by another state. There is a 30-day notice procedure to the Commissioner in order to engage in such activities. Massachusetts law also authorizes Massachusetts institutions to engage in activities determined to be “financial in nature,” or incidental or complementary to such a financial activity, subject to a 30-day notice to the Commissioner.

18

Dividends. Under Massachusetts law, the Bank may declare cash dividends from net profits not more frequently than quarterly and non-cash dividends at any time. No dividends may be declared, credited, or paid if the institution’s capital stock is impaired. An institution with outstanding preferred stock may not, without the prior approval of the Commissioner, declare dividends to the common stock without also declaring dividends to the preferred stock. The approval of the Commissioner is generally required if the total of all dividends declared in any calendar year exceeds the total of its net profits for that year combined with its retained “net profits,” as defined, over the preceding two years. The Bank was required to obtain the approval of the Commissioner to pay Bank dividends to the Company in 2024.

Loans to One Borrower Limitations. Massachusetts banking law grants broad lending authority. However, with certain limited exceptions, total obligations of one borrower to an institution may not exceed 20.0% of the total of the institution’s capital, which is defined under Massachusetts law as the sum of the institution’s capital stock, surplus account and undivided profits.

Regulatory Enforcement Authority. Any Massachusetts-chartered institution that does not operate in accordance with the regulations, policies, and directives of the Commissioner may be sanctioned for non-compliance, including seizure of the property and business of the institution and suspension or revocation of its charter. The Commissioner may, under certain circumstances, suspend or remove officers or directors who have violated the law, conducted the institution’s business in a manner which is unsafe, unsound or contrary to the depositors’ interests, or been negligent in the performance of their duties. In addition, upon finding that an institution has engaged in an unfair or deceptive act or practice, the Commissioner may issue an order to cease and desist and impose a fine on the institution concerned. Finally, Massachusetts consumer protection and civil rights statutes applicable to the Bank permit private individual and class action lawsuits and provide for the rescission of consumer transactions, including loans, and the recovery of statutory and punitive damages and attorney’s fees in the case of certain violations of those statutes.

Massachusetts has other statutes or regulations that are similar to the federal provisions discussed below.

Federal Regulations

Capital Requirements. Federal regulations require FDIC insured depository institutions to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets ratio of 8.0%, and a 4.0% Tier 1 capital to total assets leverage ratio. The definitions of these capital categories and the ratio metrics are set out in federal regulations. In addition to establishing the minimum regulatory capital requirements, the regulations limit capital distributions and certain discretionary bonus payments to management if the institution does not hold a “capital conservation buffer” consisting of 2.5% of common equity Tier 1 capital to risk-weighted assets above the amount necessary to meet its minimum risk-based capital requirements.

In assessing an institution’s capital adequacy, the FDIC takes into consideration not only these numeric factors, but qualitative factors as well, and has the authority to establish higher capital requirements for individual institutions where deemed necessary. As a bank holding company, the Company is also subject to regulatory capital requirements, as described in a subsequent section.

The approval of the FDIC is required for the Bank to pay a dividend to the Company from its surplus account. FDIC approval was required for Bank dividend payments in 2024 and such approval is expected to be required in 2025.

Investment Activities. The Federal Deposit Insurance Act generally limits the types of equity investments an FDIC-insured state-chartered bank, such as the Bank, may make and the kinds of activities in which such a bank may engage, as a principal, to those that are permissible for national banks.

19

Interstate Banking and Branching. Federal law permits an institution, such as the Bank, to acquire another institution by merger in a state other than Massachusetts unless the other state has opted out. Federal law, as amended by the Dodd-Frank Act, authorizes de novo branching into another state to the extent that the target state allows its state-chartered banks to establish branches within its borders. As of December 31, 2024, the Bank operated branches in New York, Vermont, Connecticut and Rhode Island, as well as Massachusetts. At its interstate branches, the Bank may conduct any activity authorized under Massachusetts law that is permissible either for an institution chartered in that state (subject to applicable federal restrictions) or a branch in that state of an out-of-state national bank. The New York State Superintendent of Financial Services, the Vermont Commissioner of the Department of Financial Regulation, the Connecticut Commissioner of Banking and the Director of the Rhode Island Department of Business Regulation may exercise certain regulatory authority over the Bank’s branches in their respective states.

Prompt Corrective Regulatory Action. Federal law requires that federal bank regulatory authorities take “prompt corrective action” with respect to banks that do not meet minimum capital requirements.

The law establishes three categories of capital deficient institutions: undercapitalized, significantly undercapitalized, and critically undercapitalized. The FDIC regulations implementing the prompt corrective action law were amended to incorporate the previously discussed increased regulatory capital standards that were effective January 1, 2015. An institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a common equity Tier 1 ratio of 6.5% or greater, and a leverage ratio of 5.0% or greater. An institution is deemed to be “adequately capitalized” if it has a total risk-based capital ratio of 8.0% or greater, a Tier 1 risk-based capital ratio of 6.0% or greater, a common equity Tier 1 ratio of 4.5% or greater, and a leverage ratio of 4.0% or greater. An institution is deemed to be “undercapitalized” if it has a total risk-based capital ratio of less than 8.0%, a Tier 1 risk-based capital ratio of less than 6.0%, a common equity Tier 1 ratio of less than 4.5%, or a leverage ratio of less than 4.0%. An institution is deemed to be “significantly undercapitalized” if it has a total risk-based capital ratio of less than 6.0%, a Tier 1 risk-based capital ratio of less than 4.0%, a common equity Tier 1 ratio of less than 3.0%, or a leverage ratio of less than 3.0%. An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2.0%.

“Undercapitalized” banks must adhere to growth, capital distribution (including dividend), and other limitations and are required to submit a capital restoration plan. A bank’s compliance with such a capital restoration plan must be guaranteed by its holding company in an amount equal to the lesser of 5% of the institution’s total assets when deemed “undercapitalized” or the amount needed to comply with regulatory capital requirements. If an “undercapitalized” bank fails to submit an acceptable plan, it is treated as if it is “significantly undercapitalized.” “Significantly undercapitalized” banks must comply with one or more of a number of additional restrictions, including but not limited to an order by the FDIC to sell sufficient voting stock to become “adequately capitalized,” requirements to reduce assets and cease receipt of deposits from correspondent banks or dismiss directors or officers, and restrictions on interest rates paid on deposits, compensation of executive officers, and capital distributions by the holding company. “Critically undercapitalized” institutions must comply with additional sanctions including, subject to a narrow exception, the appointment of a receiver or conservator within 270 days after they obtain such status.

At December 31, 2024, the Bank met the criteria for being considered “well capitalized” as defined in the prompt corrective action regulations.

20

Transactions with Affiliates and Loans to Insiders. Transactions between depository institutions and their affiliates are governed by Sections 23A and 23B of the Federal Reserve Act and the Act’s implementing regulation, Regulation W. In a holding company context, at a minimum, the parent holding company of an institution and any companies which are controlled by the holding company are affiliates of the institution. Generally, Section 23A limits the extent to which the institution or its subsidiaries may engage with any one affiliate in “covered transactions,” such as loans, to 10% of such institution’s capital stock and surplus. There is also an aggregate limit on all such “covered transactions” with all affiliates to 20% of the institution’s capital stock and surplus. Loans to affiliates and certain other specified transactions must comply with specified collateralization requirements. Section 23B generally requires that transactions with affiliates be on terms and under circumstances that are substantially the same, or at least as favorable to the institution or its subsidiary, as comparable transactions with or involving non-affiliates.

Federal law also restricts an institution with respect to loans to the institution’s or its affiliates’ directors, executive officers, and principal stockholders (“insiders”). Loans to insiders and their related interests may not exceed, together with all other outstanding loans to such insiders and their related interests, the institution’s unimpaired capital and surplus. Loans to insiders above specified amounts must receive the prior approval of the majority of the Board of Directors. Further, loans to insiders must be made on terms substantially the same as offered in comparable transactions to non-insiders, although insiders may receive loans made under a benefit or compensation program that is widely available to the institution’s employees and does not give preference to the insider over other employees. Federal law places additional limitations on loans to executive officers. Massachusetts law previously had a separate law regarding insider transactions, but that law was amended in 2015 to generally incorporate the federal restrictions.

Insurance of Deposit Accounts. The Bank’s deposit accounts are insured by the Deposit Insurance Fund of the FDIC up to applicable limits. The FDIC insures deposits up to the standard maximum deposit insurance amount (“SMDIA”) of $250,000 per depositor for each account ownership category.

The FDIC charges insured depository institutions premiums to maintain the Deposit Insurance Fund. Under the risk-based assessment system, institutions deemed less risky of failure pay lower assessments. The FDIC has authority to increase insurance assessments and adopted a final rule in October 2022 to increase initial base deposit insurance assessment rates by two basis points beginning in the first quarterly assessment period of 2023. As a result, effective assessment rates for institutions of the Bank’s size range from 2.5 to 42 basis points.

Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order or condition imposed by a regulator. Management does not know of any practice, condition or violation that might lead to termination of FDIC deposit insurance.

Federal Home Loan Bank System. The Bank is a member of the Federal Home Loan Bank system, which consists of 11 regional Federal Home Loan Banks that provide a central credit facility primarily for member institutions. The Bank, as a member, is required to acquire and hold shares of capital stock in the FHLBB.

The Federal Home Loan Banks are required to provide funds for certain purposes including contributing funds for affordable housing programs. These requirements, and general financial results, could reduce the amount of dividends that the Federal Home Loan Banks pay to their members and result in the Federal Home Loan Banks imposing a higher rate of interest on advances to their members.

Enforcement

The FDIC has primary federal enforcement responsibility over state-chartered banks that are not members of Federal Reserve System, which includes the Bank. The FDIC has authority to bring enforcement actions against such institutions and their “institution-related parties,” including officers, directors, certain shareholders, and attorneys, appraisers and accountants who knowingly or recklessly participate in prescribed types of misconduct which caused or were likely to cause more than a minimal loss to, or a significant adverse effect on, an insured institution. Formal enforcement action may range from the issuance of a capital directive or cease and desist order to removal of officers and/or directors of the institution or receivership or conservatorship in certain circumstances.

Potential civil money penalties can be assessed for a wide range of legal and regulatory violations and for unsafe or unsound practices, and are adjusted annually for inflation. Such penalties currently range up to more than $12 thousand per day or, in extreme cases, as high as $2.51 million per day.

21

Holding Company Regulation

General. The Company is subject to examination, regulation, and periodic reporting as a bank holding company under the Bank Holding Company Act of 1956, as amended. The Company is required to obtain the prior approval of the Federal Reserve Board to acquire all, or substantially all, of the assets of any other bank or bank holding company. Prior Federal Reserve Board approval would be required for the Company to acquire direct or indirect ownership or control of any voting securities of any bank or bank holding company if, after such acquisition, it would, directly or indirectly, own or control more than five percent of any class of voting shares of the bank or bank holding company.

A bank holding company is generally prohibited from engaging in non-banking activities, or acquiring direct or indirect control of more than five percent of the voting securities of any company engaged in non-banking activities. The Federal Reserve Board has allowed by regulation some exceptions based on activities closely related to banking including: (i) making or servicing loans; (ii) performing certain data processing services; (iii) providing discount brokerage services; (iv) acting as fiduciary, investment or financial advisor; and (v) acquiring a savings and loan association whose direct and indirect activities are limited to those permitted for bank holding companies.

The Gramm-Leach-Bliley Act of 1999 authorized a bank holding company that meets specified conditions, including being “well capitalized” and “well managed” as defined in the regulations, to opt to become a “financial holding company” and thereby engage in a broader array of financial activities. Such activities can include insurance and investment banking. The Company has elected to become a financial holding company.

The Company is subject to the Federal Reserve Board’s capital adequacy requirements for bank holding companies. The Dodd-Frank Act required the Federal Reserve Board to promulgate consolidated capital requirements for depository institution holding companies that are no less stringent, both quantitatively and in terms of components of capital, than those applicable to institutions themselves. Consolidated regulatory capital requirements identical to those applicable to the Bank apply also to the Company.

Federal Reserve Board policy requires that a bank holding company serve as a source of financial and managerial strength to its subsidiary banks by standing ready to use available resources to provide adequate capital funds to those banks during periods of financial stress or adversity and by maintaining the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks where necessary. The Dodd-Frank Act codified the source of strength doctrine.

The Federal Reserve Board has issued a policy statement regarding the payment of dividends and the repurchase of shares of common stock by bank holding companies. In general, the policy provides that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition. Regulatory guidance provides for prior consultation with and nonobjection of the Federal Reserve Board with respect to dividends in certain circumstances, such as where the company’s net income for the past four quarters, net of dividends previously paid over that period, is insufficient to fully fund the dividend or the company’s overall rate of earnings retention is inconsistent with the company’s capital needs and overall financial condition. The Federal Reserve Board guidance also provides for consultation and nonobjection for material increases in the amount of a bank holding company’s common stock dividend. The ability of a holding company to pay dividends may be restricted if a subsidiary bank becomes undercapitalized.

Federal regulations require a bank holding company to give the Federal Reserve Board prior written notice of any repurchase or redemption of then outstanding equity securities if the gross consideration for the repurchase or redemption, when combined with the net consideration paid for all such repurchases or redemptions during the preceding 12 months, is equal to 10% or more of the company’s consolidated net worth. The Federal Reserve Board may disapprove such a purchase or redemption under certain circumstances. There is an exception to this approval requirement for well-capitalized bank holding companies that meet certain other conditions. Federal Reserve guidance provides for regulatory consultation and nonobjection under specified circumstances prior to a holding company redeeming or repurchasing regulatory capital instruments, including common stock, regardless of the applicability of the previously referenced notification requirement. Pursuant to regulatory policies, such circumstances include repurchasing common stock that would result in a net reduction as of the end of the quarter in the amount of such equity instruments outstanding compared with the beginning of the quarter. In these

22

circumstances, Federal Reserve nonobjection is required. The Company obtained such nonobjection for its repurchase program in 2024.

These regulatory policies could affect the ability of the Company to pay dividends, repurchase shares of its stock, or otherwise engage in capital distributions.

The status of the Company as a registered bank holding company under the Bank Holding Company Act does not exempt it from certain federal and state laws and regulations applicable to corporations generally, including, without limitation, certain provisions of the federal securities laws.

Acquisition of the Company. Under the Change in Bank Control Act, no person may acquire control of a bank holding company such as the Company unless the Federal Reserve Board has been given 60 days’ prior written notice and has not issued a notice disapproving the proposed acquisition, taking into consideration certain factors, including the financial and managerial resources of the acquirer and the competitive effects of the acquisition. Control, as defined for this purpose, means the power, directly or indirectly, to direct the management or policies of an insured depository institution, or the ownership, control of or power to vote 25% or more of any class of voting stock. Acquisition of more than 10% of any class of a bank holding company’s voting stock constitutes a rebuttable presumption of control under the Change in Bank Control Act’s regulations under certain circumstances including where, as is the case with the Company, the issuer has registered securities under Section 12 of the Securities Exchange Act of 1934.

Massachusetts Holding Company Regulation. In addition to the federal bank holding company regulations, a bank holding company organized or doing business in Massachusetts must comply with requirements under Massachusetts law. Approval of the Massachusetts regulatory authorities is generally required for the Company to acquire 25 percent or more of the voting stock of another depository institution. Similarly, prior regulatory approval would be necessary for any person or company to acquire 25 percent or more of the voting stock of the Company.

Mergers and Acquisitions

The Company and the Bank have authority to engage, and have engaged, in acquisitions of other depository institutions. Such transactions are subject to a variety of conditions including, but not limited to, required stockholder approvals and the receipt of all necessary regulatory approvals. Necessary regulatory approvals include those required by the federal Bank Holding Company Act and/or Bank Merger Act, Massachusetts law and, if the target institution is located in a state other than Massachusetts, the law of that state. When considering merger applications, the federal regulators must evaluate such factors as the financial and managerial resources and future prospects of the parties, the convenience and needs of the communities to be served (including performance of the parties under the Community Reinvestment Act (“CRA”)), competitive factors, any risk to the stability of the United States banking or financial system and the effectiveness of the institutions involved in combating money laundering activities. Both the Bank Holding Company Act and the Bank Merger Act provide for a waiting period of 15 to 30 days following approval by the federal banking regulator within which the United States Department of Justice may file objections to the merger under the federal antitrust laws. Massachusetts law requires the Commissioner (or Board of Bank Incorporation in certain cases) to consider such factors as whether competition among banking institutions will be unreasonably affected and whether public convenience and advantage will be promoted (including whether the merger will result in net new benefits).

Other Regulations

Consumer Protection Laws. The Bank is subject to federal and state consumer protection statutes and regulations applicable to depository institutions. These include the Truth-In-Lending Act, governing disclosures of credit terms to consumer borrowers; the Home Mortgage Disclosure Act, requiring financial institutions to provide certain information about home mortgage and refinance loans; the Equal Credit Opportunity Act, prohibiting discrimination on the basis of race, creed or other prohibited bases in extending credit; the Fair Credit Reporting Act, governing the provision of consumer information to credit reporting agencies and the use of consumer information; the Fair Debt Collection Act, governing the manner in which consumer debts may be collected by collection agencies; and the Electronic Funds Transfer Act, governing automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services. Since the Bank has exceeded $10 billion of consolidated assets, compliance with such federal consumer protection statutes and regulations is examined for and enforced by the Consumer Finance Protection Bureau.

23

The Bank also is subject to Massachusetts and federal laws protecting the confidentiality of consumer financial records, and limiting the ability of the institution to share non-public personal information with third parties.

The Community Reinvestment Act (“CRA”) establishes a requirement for federal banking agencies that, in connection with examinations of depository institutions within their jurisdiction, the agencies evaluate the record of the depository institutions in meeting the credit needs of their local communities, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of those institutions. These factors are also considered in evaluating mergers, acquisitions and applications to open a branch or new facility. Under the CRA, institutions are assigned a rating of “outstanding,” “satisfactory,” “needs to improve,” or “substantial non-compliance.” A less than “satisfactory” rating would result in the suspension of any growth of the Bank through acquisitions or opening de novo branches until the rating is improved. As of the most recent CRA examination by the FDIC, the Bank’s CRA rating was “satisfactory.” On October 24, 2023, the FDIC, the Federal Reserve Board, and the Office of the Comptroller of the Currency issued a final rule to strengthen and modernize the CRA regulations. Under the final rule, banks with assets of at least $2 billion as of December 31 in both of the prior two calendar years will be a “large bank.” The agencies will evaluate large banks under four performance tests: the Retail Lending Test, the Retail Services and Products Test, the Community Development Financing Test, and the Community Development Services Test. Under the CRA regulations, the applicability date for the majority of the provisions is January 1, 2026, and additional requirements will be applicable under the regulations on January 1, 2027. On March 29, 2024, a federal court in the Northern District of Texas issued a preliminary injunction of the new CRA regulations, enjoining the federal banking agencies from enforcing the regulations against the plaintiff bank industry trade groups, and extending the regulations’ implementation dates day-for-day for each day the injunction is in place.

Cybersecurity and Protection of Customers’ Personal Information. The provisions of Gramm-Leach-Bliley Act (GLBA) regarding privacy generally prohibit financial institutions from disclosing nonpublic personal financial information of consumer customers to third parties for certain purposes unless those customers have the opportunity to opt out. The Fair Credit Reporting Act (FCRA) restricts information sharing among affiliates for marketing purposes. Both the FCRA and Regulation V, the implementing regulation administered by the Consumer Financial Protection Bureau, govern the use and provision of information to consumer reporting agencies. In addition, federal banking regulators regularly issue guidance concerning cybersecurity standards to help enhance cyber risk management among financial institutions. Under these statutory frameworks and guidance, financial institutions such as ours are expected to implement layers of security controls designed to establish multiple lines of defense and to provide for risk management processes that address the risks posed by compromised customer credentials, including security measures to reliably authenticate customers when they access the financial institution’s internet-based services. Moreover, management of the financial institution is responsible for maintaining disaster and business continuity planning and processes designed to ensure speedy recovery and resumption of the institution’s operations after an intrusive cyber-attack or other type of compromise of customer data or information technology systems, including appropriate processes to address data and network restoration, if needed. The financial institution is also responsible for accounting for the disaster recovery and business continuity plans and processes of its critical third party service providers. Failing to observe its obligations under regulatory guidance could subject the Bank to regulatory sanctions such as financial penalties. For a further discussion of risks related to cybersecurity, see Item 1A “Risk Factors.”

As a banking organization, the Bank is required to notify its primary federal regulator as soon as possible but no later than 36 hours after the Bank’s discovery of a computer-security incident that has materially disrupted or degraded, or is reasonably likely to materially disrupt or degrade, the Bank’s: (1) ability to carry out banking operations, activities, or processes, or deliver banking products and services to a material portion of its customer base, in the ordinary course of business; (2) business lines, including associated operations, services, functions, and support, that upon failure would result in a material loss of revenue, profit, or franchise value; or (3) operations, including associated services, functions, and support, as applicable, the failure or discontinuance of which would pose a threat to the financial stability of the United States.

The Company also notes that in August 2023, the Securities and Exchange Commission adopted a final rule that requires registrants such as the Company to file a Form 8-K to disclose any material cybersecurity incident it suffers. If an event requiring disclosure under the final rule were to occur, the Company’s disclosure would need to include the impact of the incident on the Company, as well as the material aspects of the nature, scope, and timing of the incident. The final rule also requires registrants such as the Company to describe, on Form 10-K, their processes for assessing, identifying and managing material risks from cybersecurity threats and whether those risks

24

have materially affected the registrant. The final rule also requires registrants such as the Company to describe Board oversight of risks emanating from cybersecurity threats and management’s role and expertise in assessing and managing material risks from cybersecurity threats. See Item 1C “Cybersecurity” for more information.

Finally, the Company notes that there has been a recent uptick in activity among state legislatures and regulators with respect to implementing privacy and cybersecurity standards and regulations. Some states have adopted laws and regulations requiring financial institutions to maintain cybersecurity programs and make details available regarding those programs. Also, some states have either implemented, or modified, their data breach notification and/or data privacy rules. While the Company cannot predict future legislative or regulatory actions of the various states, the Company expects continued activity in this area and will continue to monitor for developments in the states in which it and the Bank operate.

Anti-Money Laundering Laws. The Bank is subject to extensive anti-money laundering and countering the financing of terrorism (“AML/CFT”) statutes and regulations, which require the institution to have in place an AML/CFT compliance program and procedures and a customer identification program, among other things. These laws and regulations also prohibit depository institutions from engaging in business with foreign shell banks; require depository institutions to have due diligence procedures and, in some cases, enhanced due diligence procedures for foreign correspondent and private banking accounts; and require information sharing with the U.S. government in certain circumstances. The Bank has established policies and procedures intended to comply with these statutes and regulations.

Taxation

The Company reports its income on a calendar year basis using the accrual method of accounting. This discussion of tax matters is only a summary and is not a comprehensive description of the tax rules applicable to the Company and its subsidiaries. Further discussion of income taxation is contained in a note to the financial statements. The federal income tax laws apply to the Company in the same manner as to other corporations with some exceptions. The Company reports income on a calendar year basis to the Commonwealth of Massachusetts. Massachusetts tax law generally permits special tax treatment for a qualifying limited purpose “securities corporation.” The Bank’s securities corporations all qualify for this treatment, and are taxed at a 1.3% rate on their gross income.

Inflation Reduction Act of 2022. The Inflation Reduction Act, which was signed into law on August 16, 2022, among other things, implements a new alternative minimum tax of 15% on corporations with profits in excess of $1 billion, a 1% excise tax on stock repurchases, and several tax incentives to promote clean energy and climate initiatives. These provisions were effective beginning January 1, 2023.

ITEM 1A. RISK FACTORS

The risks set forth below, in addition to the other risks described in this Annual Report on Form 10-K, may adversely affect the Company's business, financial condition, strategic objectives, and operating results. In addition to the risks set forth below and the other risks described in this annual report, there may be additional risks and uncertainties that are not currently known to the Company or that the Company currently deems to be immaterial that could materially and adversely affect the Company's business, financial condition, strategic objectives, or operating results. As a result, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods. Further, to the extent that any of the information contained in this Annual Report on Form 10-K constitutes forward-looking statements, the risk factors set forth below also are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company.

25

Risk Factors Summary

Merger-Related Risks

•Berkshire Will Be Subject to Business Uncertainties and Contractual Restrictions While the Mergers Are Pending.

•The Announcement of the Proposed Mergers Could Disrupt Berkshire’s Relationships with its Customers, Suppliers, Business Partners and Others, As Well As Its Operating Results and Business Generally.

•The Merger Agreement Limits Berkshire’s Ability to Pursue Alternatives to the Mergers and May Discourage Other Companies from Trying to Acquire Berkshire.

•In Connection with the Mergers, Berkshire Will Assume Brookline’s Outstanding Debt Obligations, and the Combined Company’s Level Of Indebtedness Following the Completion of the Mergers Could Adversely Affect the Combined Company’s Ability to Raise Additional Capital and Meet Its Obligations Under Existing Indebtedness.

•The Combined Company Will Incur Significant Transaction and Merger-Related Costs In Connection with the Mergers.

•If the Mergers Are Not Completed, Berkshire Will Have Incurred Substantial Expenses Without Its Stockholders Realizing The Expected Benefits of the Mergers.

•Berkshire and Brookline May Not Be Able to Successfully Integrate the Two Companies or to Realize the Anticipated Benefits of the Mergers.

•The Merger Agreement May Be Terminated In Accordance With Its Terms, and the Mergers May Not Be Completed.

•The Need for Regulatory Approvals May Delay the Date of Completion of the Mergers or May Diminish the Benefits of the Mergers.

•Litigation Against Berkshire or Brookline, or the Members of Berkshire’s or Brookline’s Board of Directors, Could Prevent or Delay the Completion of the Mergers.

•The Future Results of the Combined Company Following the Mergers May Suffer if the Combined Company Does Not Effectively Manage Its Expanded Operations.

•The Market Price of Berkshire’s Common Stock After the Mergers May Be Affected By Factors Different from Those Currently Affecting Berkshire’s Common Stock.

•Current Holders of Berkshire’s Common Stock Will Have a Significantly Reduced Ownership and Voting Interest in the Combined Company After the Mergers and Will Therefore Have Less Voting Influence Over the Combined Company.

•The Market Price of Berkshire Common Stock May Decline in the Future as a Result of the Mergers.

Lending Risks

•Deterioration in the Housing Sector, Commercial Real Estate, and Related Markets May Adversely Affect Business and Financial Results.

•The Company’s Emphasis on Commercial Lending May Expose the Company to Increased Lending Risks, Which Could Hurt Profits.

•The Company is Subject to a Variety of Risks in Connection With Any Sale of Loans it May Conduct.

•The Company is Exposed to Risk of Environmental Liability When It Takes Title to Property.

Operating Risks

•General Economic Conditions, Either Nationally or in Our Market Areas, Which May Be Affected by Macroeconomic Factors, Including Inflation, Unemployment, Government Policies, Supply Chain Issues, and Geopolitical Risks Associated with International Conflict, May Be Worse Than Expected.

•The Effects of any Public Health Emergencies and Pandemic Disease, Natural Disaster, War, Acts of Terrorism, Accident, or Similar Action or Event (collectively, "an Event") May Adversely Affect, the Company’s Business, Financial Condition, Liquidity, and Results of Operations.

•The Company is Subject to Security and Operational Risks Relating to the Use of Technology that Could Damage the Company's Reputation and Business.

•The Company Faces Cybersecurity Risks, Including Denial of Service Attacks, Ransomware, Hacking and Identity Theft that Could Result in the Disclosure of Sensitive Information or the Creation of Unauthorized Transactions, Which Could Adversely Affect the Company’s Business or Reputation and Create Significant Legal and Financial Exposure.

•Counterparties and Correspondents Expose the Company to Risks.

•The Company’s Business is Reliant on Outside Vendors.

26

•Tailoring The Bank's Delivery Model to Respond to Customer Preferences in Banking May Negatively Affect Earnings

•Development of New Products and Services May Impose Additional Costs on the Company and May Expose It to Increased Operational Risk.

•The Soundness of Other Financial Institutions Could Adversely Affect Us.

•Legal and Regulatory Proceedings and Related Matters Could Adversely Affect Us and the Banking Industry in General.

•Loss of Key Employees Could Disrupt Relationships With Certain Customers.

•Mergers, Acquisitions and Dispositions Involve Numerous Risks and Uncertainties.

Interest Rate Risks

•Market Interest Rate Conditions Could Adversely Affect Results of Operations and Financial Condition.

Liquidity Risks

•Liquidity is Essential to the Company’s Business and a Lack of Liquidity Could Adversely Affect the Company’s Financial Condition and Results of Operations.

•Bank Failures and Stresses May Lead to Negative Depositor Confidence in Depository Institutions. Systemic Impacts May Have a Material Adverse Effect on our Financial Condition and Results of Operations and Stock Price.

•The Company's Wholesale Funding Sources May Prove Insufficient to Support Operations and Future Growth.

•The Company's Ability to Service Its Debt, Pay Dividends, and Otherwise Pay Obligations as They Come Due Is Substantially Dependent on Capital Distributions from the Bank, and These Distributions Are Subject to Regulatory Limits and Other Restrictions. The Company’s Stock Repurchase Program is also Dependent on These Distributions.

•Secondary Mortgage Market Conditions Could Have a Material Impact on the Company’s Financial Condition and Results of Operations.

Securities Market Value Risks

•Declines in the Value of Certain Investment Securities Could Require Write-Downs, Which Would Reduce Earnings.

Regulatory Matters Risks

•Legislative and Regulatory Initiatives May Affect Business Activities and Increase Operating Costs.

•Provisions of the Company's Certificate of Incorporation, Bylaws, and Delaware Law, as Well as State and Federal Banking Regulations, Could Delay or Prevent a Takeover of Us by a Third Party.

•Changes in Tax Laws and Accounting Policies and Practices.

Significant Accounting Estimates Risks

•Various Factors May Cause Our Allowance for Credit Losses on Loans to Increase.

•Fair Value Measurements May Be Affected by Inherent Uncertainties.

Trading of the Company's Common Stock

•The Trading History of the Company’s Common Stock is Characterized By Low Trading Volume. The Value of Shareholder Investments May be Subject to Sudden Decreases Due to the Volatility of the Price of the Common Stock.

Other Risks

• Negative Public Opinion Could Damage the Company’s Reputation and Impact Business Operations and         Revenues.

27

Merger-Related Risks

Berkshire Will Be Subject to Business Uncertainties and Contractual Restrictions While the Mergers Are Pending.

On December 16, 2024, Berkshire, Commerce Acquisition Sub, Inc., a direct, wholly-owned subsidiary of Berkshire (“Merger Sub”) and Brookline entered into a merger agreement (the “Merger Agreement”) pursuant to which Berkshire and Brookline have agreed to combine their respective businesses in a merger of equals. Under the Merger Agreement, Merger Sub will merge with and into Brookline, with Brookline as the surviving corporation (the “Merger”), immediately followed by the merger of Brookline with and into Berkshire, with Berkshire as the surviving corporation (the “Holdco Merger”). Immediately following the Merger and the Holdco Merger (collectively, the “Mergers”), Berkshire Bank, the wholly-owned subsidiary of Berkshire, as well as Brookline’s two other banking subsidiaries, PCSB Bank and Bank Rhode Island, will merge with and into Brookline Bank, the wholly-owned subsidiary of Brookline, with Brookline Bank as the surviving corporation (collectively, the “Bank Merger”).

Uncertainty about the effect of the Mergers on employees and customers may have an adverse effect on Berkshire. These uncertainties may impair Berkshire’s ability to attract, retain and motivate key personnel until the Mergers are completed, and could cause customers and others who deal with Berkshire to seek to change existing business relationships with Berkshire. In addition, the Merger Agreement requires that Berkshire conduct its business in the ordinary course of business consistent with past practice and restricts Berkshire from taking certain actions prior to the effective time or termination of the Merger Agreement without Brookline’s consent in writing. These restrictions may prevent Berkshire from pursuing attractive business opportunities that may arise prior to the completion of the Mergers.

The Announcement of the Proposed Mergers Could Disrupt Berkshire’s Relationships with its Customers, Suppliers, Business Partners and Others, As Well As its Operating Results and Business Generally.

Whether or not the Mergers are ultimately consummated, as a result of uncertainty related to the Mergers, risks relating to the impact of the announcement of the Mergers on Berkshire’s business include the following:

•employees may experience uncertainty about their future roles, which might adversely affect Berkshire’s ability to retain and hire key personnel and other employees;

•customers, suppliers, business partners and other parties with which Berkshire maintains business relationships may experience uncertainty about their respective futures and seek alternative relationships with third parties, seek to alter their business relationships with Berkshire or fail to extend an existing relationship with Berkshire; and

•Berkshire has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Mergers.

If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact Berkshire’s results of operations and financial condition.

The Merger Agreement Limits Berkshire’s Ability to Pursue Alternatives to the Mergers and May Discourage Other Companies from Trying to Acquire Berkshire.

The Merger Agreement contains “no shop” covenants that restrict Berkshire’s ability to, directly or indirectly, among other things initiate, solicit, knowingly encourage or knowingly facilitate, inquiries or proposals with respect to, or, subject to certain exceptions generally related to the exercise of fiduciary duties by Berkshire’s board of directors, engage in any negotiations concerning, or provide any confidential or non-public information or data relating to, any alternative acquisition proposals. These provisions, which include a $45.0 million termination fee payable under certain circumstances, may discourage a potential third-party acquirer that might have an interest in acquiring all or a significant part of Berkshire from considering or making that acquisition proposal.

28

In Connection with the Mergers, Berkshire Will Assume Brookline’s Outstanding Debt Obligations, and the Combined Company’s Level Of Indebtedness Following the Completion of the Mergers Could Adversely Affect the Combined Company’s Ability to Raise Additional Capital and Meet its Obligations Under Existing Indebtedness.

In connection with the Mergers, Berkshire has agreed to assume, or to cause its subsidiary to assume, Brookline’s outstanding indebtedness. Berkshire’s existing debt, together with any future incurrence of additional indebtedness, and the assumption of Brookline’s outstanding indebtedness, could have important consequences for the combined company’s creditors and the combined company’s stockholders. For example, it could:

•limit the combined company’s ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;

•restrict the combined company from making strategic acquisitions or cause the combined company to make non-strategic divestitures;

•restrict the combined company from paying dividends to its stockholders;

•increase the combined company’s vulnerability to general economic and industry conditions; and

•require a substantial portion of cash flow from operations to be dedicated to the payment of principal and interest on the combined company’s indebtedness, thereby reducing the combined company’s ability to use cash flows to fund its operations, capital expenditures and future business opportunities.

The Combined Company Will Incur Significant Transaction and Merger-Related Costs In Connection with the Mergers.

Berkshire and Brookline will incur costs to combine the operations of the two companies. Berkshire and Brookline are collecting information to formulate detailed integration plans to deliver planned synergies. Additional unanticipated costs may be incurred in the integration of the businesses of Berkshire and Brookline. Whether or not the Mergers are consummated, Berkshire will incur substantial expenses, such as legal, accounting, printing and financial advisory fees, in pursuing the Mergers. Although Berkshire expects that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transactions and merger-related costs over time, this net benefit may not be achieved in the near term, or at all.

If the Mergers Are Not Completed, Berkshire Will Have Incurred Substantial Expenses Without Its Stockholders Realizing The Expected Benefits of the Mergers.

Berkshire has incurred and will incur further substantial expenses in connection with the Mergers, which are charged to earnings as incurred. These costs include legal, financial advisory, accounting, consulting and other advisory fees, severance/employee benefit-related costs, public company filing fees and other regulatory fees, financial printing and other printing costs and other related costs. If the Mergers are not completed, these expenses will still be charged to earnings even though Berkshire would not have realized the expected benefits of the Mergers. There can be no assurance that the Mergers will be completed.

Berkshire and Brookline May Not Be Able to Successfully Integrate the Two Companies or to Realize the Anticipated Benefits of the Mergers.

The Mergers involve the combination of two companies that previously have operated independently. A successful combination of the operations of the two entities will depend substantially on both parties’ ability to consolidate cultures, personnel, operations, systems and procedures and to eliminate redundancies and reduce costs of the combined operations. Berkshire may not be able to combine the operations of Brookline with Berkshire’s operations without encountering difficulties, such as:

•the loss of key employees and customers;

•the disruption of operations and business;

•the inability to maintain and increase competitive presence;

•those associated with entering a new geographic market;

•deposit attrition, customer loss and revenue loss;

•possible inconsistencies in standards, control procedures and policies;

•unexpected problems with costs, operations, personnel, technology and credit; and/or

29

•problems with the assimilation of new operations, sites or personnel, which could divert resources from regular banking operations.

Additionally, general market and economic conditions or governmental actions affecting the financial industry generally may inhibit the successful integration of Brookline.

Berkshire entered into the Merger Agreement with the expectation that the Mergers will result in various benefits including, among other things, enhanced revenues, a strengthened market position for the combined company, cross selling opportunities, improved technology, cost savings and operating efficiencies. Achieving the anticipated benefits of the Mergers are subject to a number of uncertainties, including whether Berkshire and Brookline integrate in an efficient and effective manner, and general competitive factors in the marketplace. Failure to achieve these anticipated benefits could result in increased costs, decreases in the amount of expected revenues and diversion of management’s time and energy and could materially adversely impact Berkshire’s business, financial condition and operating results. Finally, any cost savings that are realized may be offset by losses in revenues or other charges to earnings.

The Merger Agreement May Be Terminated In Accordance With Its Terms, and the Mergers May Not Be Completed.

The Merger Agreement is subject to a number of conditions that must be fulfilled to complete the Mergers. Those conditions include, among others, certain regulatory and stockholder approvals, the absence of orders prohibiting the completion of the Mergers, the effectiveness of a registration statement to be filed Berkshire, which will include a Joint Proxy Statement/Prospectus, the continued accuracy of the representations and warranties by both parties, the performance by both parties of their covenants and agreements, and the receipt by both parties of legal opinions from their respective tax counsels. Any of these conditions to closing of the Mergers may not be fulfilled, and as a result the Mergers may not be completed.

The Need for Regulatory Approvals May Delay the Date of Completion of the Mergers or May Diminish the Benefits of the Mergers.

Berkshire is required to obtain the approvals of certain regulatory agencies before completing the Mergers. Satisfying any requirements of these regulatory agencies may delay the date of completion of the Mergers. The requisite regulatory approvals may not be received at all (in which case the Mergers could not be completed), may not be received in a timely fashion, or may contain conditions or restrictions on completion of the Mergers that cannot be satisfied. In addition, any conditions or restrictions imposed could have the effect of imposing additional costs on or limiting the revenues of the combined company following the Mergers, which might have an adverse effect on the combined company following the Mergers. Further, it is possible that, among other things, restrictions on the combined operations of the two companies, including divestitures, may be sought by governmental agencies as a condition to obtaining the required regulatory approvals. This may diminish the benefits of the Mergers to the combined company or otherwise have an adverse effect on the combined company following the Mergers.

Litigation Against Berkshire or Brookline, or the Members of Berkshire’s or Brookline’s Board of Directors, Could Prevent or Delay the Completion of the Mergers.

Berkshire’s stockholders or Brookline’s stockholders may file lawsuits against Brookline, Berkshire, and/or the boards of directors of either company in connection with the Mergers. Such legal proceedings could delay or prevent the Mergers from being completed in a timely manner. The existence of litigation related to the Mergers could affect the likelihood of obtaining the required regulatory and stockholders approvals. Moreover, any litigation could be time-consuming and expensive and could divert Berkshire’s and Brookline’s management’s attention away from their regular business and their focus on a successful integration of the two companies. Any lawsuit adversely resolved against Brookline, Berkshire or members of their respective boards of directors could have a material adverse effect on each company’s business, financial condition and results of operations.

Moreover, one of the conditions to the completion of the Mergers is the absence of any restraining order, injunction or decree issued by a court of competent jurisdiction or other legal restraint or prohibition preventing the consummation of the Mergers, and that no governmental authority or regulatory authority of competent jurisdiction shall have enacted, promulgated or enforced any statute, rule, regulation, judgment, decree, injunction or other order prohibiting consummation of the transactions contemplated by the Merger Agreement or making the Mergers illegal. Consequently, if a settlement or other resolution is not reached in any lawsuit that is filed or any regulatory proceeding and a claimant secures injunctive or other relief or a governmental authority issues an order or other directive restricting, prohibiting or making illegal the consummation of the transactions contemplated by the Merger

30

Agreement (including the Mergers), then such injunctive or other relief may prevent the Mergers from becoming effective in a timely manner or at all.

The Future Results of the Combined Company Following the Mergers May Suffer if the Combined Company Does Not Effectively Manage Its Expanded Operations.

Following the Mergers, the size of the business of the combined company will increase beyond the current size of either Berkshire’s or Brookline’s business. The combined company’s future success will depend, in part, upon its ability to manage this expanded business, which may pose challenges for management, including challenges related to the management and monitoring of new operations and associated increased costs and complexity. The combined company may also face increased scrutiny from governmental authorities as a result of the increased size of its business. There can be no assurances that the combined company will be successful or that it will realize the expected operating efficiencies, revenue enhancement or other benefits currently anticipated from the Mergers.

The Market Price of Berkshire’s Common Stock After the Mergers May Be Affected By Factors Different from Those Currently Affecting Berkshire’s Common Stock.

The results of operations of the combined company and the market price of Berkshire’s common stock after the completion of the Mergers may be affected by factors different from those currently affecting the independent results of operations of each of Berkshire and Brookline. In addition, the issuance of shares of Berkshire’s common stock in the Mergers could depress the market price for Berkshire’s common stock. For example, some Brookline stockholders may decide not to hold the shares of Berkshire’s common stock they receive as a result of the Mergers. Other Brookline stockholders, such as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of Berkshire’s common stock they receive as a result of the Mergers. Any such sales of Berkshire’s common stock could depress the market price for Berkshire’s common stock.

Current Holders of Berkshire’s Common Stock Will Have a Significantly Reduced Ownership and Voting Interest in the Combined Company After the Mergers and Will Therefore Have Less Voting Influence Over the Combined Company.

In the Mergers, each Brookline stockholder will become a holder of common stock of the combined company. As a result of the transaction and the $100 million common stock offering to support the transaction, Berkshire estimates that Berkshire shareholders will own approximately 55% and Brookline shareholders will own approximately 45% of the outstanding shares of the combined company. As a result, Brookline’s current stockholders will have less voting influence on the combined company and may have less influence on its management and policies than they now have.

The Market Price of Berkshire Common Stock May Decline in the Future as a Result of the Mergers.

The market price of Berkshire common stock may decline in the future as a result of the Mergers for a number of reasons, including:

•the unsuccessful integration of Brookline and Berkshire; and

•the failure of the combined company to achieve the perceived benefits of the Mergers, including financial results, as rapidly as or to the extent anticipated by financial or industry analysts.

Many of these factors are beyond the control of Berkshire. As a consequence, Berkshire stockholders could lose the value of their investment in Berkshire common stock.

Lending Risks

Deterioration in the Housing Sector, Commercial Real Estate, and Related Markets May Adversely Affect Business and Financial Results.

Real estate lending is a major business activity for the Company. Real estate market conditions affect the value and marketability of real estate collateral, and they also affect the cash flows, liquidity, and net worth of many borrowers whose operations and finances depend on real estate market conditions. We have a geographic concentration of loans in our market areas. Adverse conditions in the Company's market areas could reduce growth rates, affect the ability of our customers to repay their loans and increase loan losses, and generally affect the Company's financial condition and results of operations. Potential increases in interest rates can lead to increased capitalization rates over time which could adversely affect commercial property appraisals and collateral value. Residential property values may be similarly adversely impacted.

31

As of December 31, 2024, commercial real estate loans comprised approximately 51% of our loan portfolio. Commercial real estate mortgage loans generally involve a greater degree of credit risk than residential real estate mortgage loans because they typically have larger balances and are more affected by adverse conditions in the economy. Because payments on loans secured by commercial real estate often depend upon the successful operation and management of the properties and the businesses which operate from within them, repayment of such loans may be affected by factors outside the borrower’s control, such as adverse conditions in the real estate market or the economy, changes in government regulations and fiscal policy, or changes in the level of interest rates. Failures in our risk management policies, procedures and controls could adversely affect our ability to manage this portfolio going forward and could result in an increased rate of delinquencies in, and increased losses from, this portfolio, which, accordingly, could have a material adverse effect on our business, financial condition and results of operations.

The Company’s Emphasis on Commercial Lending May Expose the Company to Increased Lending Risks, Which Could Hurt Profits.

The Company emphasizes commercial lending, which generally exposes the Company to a greater risk of nonpayment and loss because repayment of such loans often depends on the successful operations and income stream of the borrowers. Commercial loans are historically more susceptible to delinquency, default, fraud, and loss during economic downturns. Commercial lending involves larger loan sizes and larger relationship exposures, with greater potential impact on profits in the event of adverse loan performance. The majority of the Company’s commercial loans are secured by real estate and subject to the previously discussed real estate risk factors, as well as risks specific to individual properties and property types.

The Company is Subject to a Variety of Risks in Connection With Any Sale of Loans it May Conduct.

The Company routinely sells newly originated residential mortgage loans and SBA guaranteed business loans, and may also sell other loans or loans portfolios. It may make certain representations and warranties to the purchaser concerning the loans sold and the procedures under which those loans have been originated and serviced. If any of these representations and warranties are invalid, the Company may be required to refund premiums, indemnify the purchaser for any related costs or losses, or it may be required to repurchase part or all of the affected loans. The Company may also be required to repurchase loans as a result of borrower fraud or in the event of early payment default by the borrower on a loan it has sold. The Company’s ability to maintain seller/servicer relationships with government agencies and government backed entities may be jeopardized in the event of the emergence of one or more of the above risks. Demand for the Company’s loans in the secondary markets could also be affected by these risks, which could lead to a reduction in related business activities.

The Company is Exposed to Risk of Environmental Liability When It Takes Title to Property.

In the course of its business, the Company may foreclose on and take title to real estate. As a result, the Company could be subject to environmental liabilities with respect to these properties for property damage, personal injury, investigation and clean-up costs. The costs associated with investigation or remediation activities could be substantial. The Company may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination emanating from the property.

Operating Risks

General Economic Conditions, Either Nationally or in Our Market Areas, Which May Be Affected by Macroeconomic Factors, Including Inflation, Unemployment, Government Policies, Supply Chain Issues, and Geopolitical Risks Associated with International Conflict, May Be Worse Than Expected.

Generally, our financial performance, and in particular the ability of borrowers to pay interest on and repay principal of outstanding loans and the value of the collateral securing those loans, as well as demand for loans and other products and services we offer, is very dependent on the business environment in the markets we operate in locally and the United States as a whole. Adverse economic conditions may result from a variety of factors, including domestic and global economic and political developments, such as plateauing or decreasing economic growth and business activity, high unemployment rates, recessions, fluctuations in interest rates, inflation, pressures on the commercial real estate market, uncertainty regarding the U.S. government's debt limit, U.S. Government fiscal and monitory policy, a potential U.S. government shutdown, recent stress in the banking sector, international conflict, civil unrest, and natural disasters. A favorable business environment is generally characterized by, among other factors, economic growth, efficient capital markets, low inflation, low unemployment, high business and investor confidence, and strong business earnings. The occurrence of any of these conditions could have a material adverse effect on our financial condition and results of operations.

32

The Effects of any Public Health Emergencies and Pandemic Disease, Natural Disaster, War, Acts of Terrorism, Accident, or Similar Action or Event (Collectively, "an Event") May Adversely Affect, the Company’s Business, Financial Condition, Liquidity, and Results of Operations.

Some of the risks the Company faces from an Event include, but are not limited to: the health and availability of our colleagues, the supply of labor, inflationary impacts on operating costs, the financial condition of our clients and the demand for our products and services, changes in interest rates, recognition of credit losses and increases in the allowance for credit losses, impacts if customers draw on their lines of credit or draw down deposits or seek additional loans to help finance their businesses, and a significant deterioration of business conditions in our markets. Sustained adverse effects may also increase our cost of capital, prevent us from satisfying our minimum regulatory capital ratios and other supervisory requirements, or result in downgrades in our credit rating. The extent to which an Event impacts our business, financial condition, liquidity and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including the scope and duration of an Event, the continued effectiveness of our business continuity plan, the direct and indirect impact of an Event on our customers, colleagues, counterparties and service providers, and actions taken by governmental authorities and other third parties in response to an Event.

The length of a pandemic and the effectiveness of the measures being put in place to address it are unknown and we face possible continued impacts on liquidity, operating revenues, and credit performance. To the extent a pandemic adversely affects our business, financial condition, liquidity, or results of operations, it may also have the effect of heightening many of the other risks described in this Annual Report on Form 10-K.

The Company is Subject to Security and Operational Risks Relating to the Use of Technology that Could Damage the Company's Reputation and Business.

Security breaches of sensitive information in our technology platforms could expose the Company to possible liability and damage its reputation. Any compromise of data security could also deter customers from using the Company's services. The Company relies on industry standard internet security and authentication systems to effect secure transmission of data. These precautions may not protect the Company's security systems from compromises or breaches and could result in damage to its reputation and business. The Company utilizes third party core banking software, in addition to other outsourced data processing. If third party providers encounter difficulties or if the Company has difficulty in communicating and/or transmitting with such third parties, it could significantly affect its ability to adequately process and account for customer transactions, which could significantly affect its business operations. The Company interfaces with electronic payments systems which are subject to security and operational risks. The Company utilizes file encryption in designated internal systems and networks and is subject to certain state and federal regulations regarding how the Company manages data security. The Company's enterprise governance risk and compliance function includes a framework of controls, policies and technologies to monitor and protect information from cyberattacks, mishandling, and loss, together with safeguards related to the confidentiality, integrity, and availability of information. Natural disasters and disaster recovery risks could affect its operating systems, which could affect its reputation. The Company's business continuity program addresses crisis management, business impact, and data and systems recovery. Potential problems with the management of technology security and operational risks may affect regulatory compliance, which could affect operating costs and expansion plans. 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.

The Company Faces Cybersecurity Risks, Including Denial of Service Attacks, Ransomware, Hacking and Identity Theft that Could Result in the Disclosure of Sensitive Information or the Creation of Unauthorized Transactions, Which Could Adversely Affect the Company’s Business or Reputation and Create Significant Legal and Financial Exposure.

Increased levels of remote access resulting from more work from home employees may create additional opportunities for cybercriminals to exploit vulnerabilities, and employees may be more susceptible to phishing and social engineering attempts due to work responsibilities at home. In addition, technological resources may be strained due to the number of remote users.

The Company’s computer systems and network infrastructure are subject to security risks and 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 sensitive information, destroy data, steal financial assets, disable or degrade service, or sabotage systems,

33

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. As a growing regional bank, the Company may be subject to similar attacks in the future. Hacking and identity theft risks could cause serious reputational harm and possible financial loss to the Company. Cyber threats are rapidly evolving and the Company may not be able to anticipate or prevent all such attacks. Advancements in the use of artificial intelligence could lead to adversarial attacks by exploiting vulnerabilities to manipulate model outputs or bypass security controls.

The Company may incur increasing costs in an effort to minimize these risks and could be held liable for any security breach or loss. Despite efforts to ensure the integrity of its systems, the Company will not be able to anticipate all security breaches of these types, and the Company may not be able to implement effective preventive measures against such security breaches. The techniques used by cyber criminals change frequently and can originate from a wide variety of sources, including outside groups such as external service providers, organized crime affiliates, terrorist organizations or hostile foreign governments. Those parties may also attempt to fraudulently induce employees, customers or other users of the Company’s systems to disclose sensitive information in order to gain access to its data or that of its clients or to conduct unauthorized financial transactions.

These risks may increase in the future as the Company continues to increase its mobile-payment and other internet-based product offerings and expands its internal usage of web-based products and applications. A successful penetration or circumvention of system security could cause serious negative consequences to the Company, including significant disruption of operations, misappropriation of sensitive information of the Company or that of its customers, or damage to computers or systems of the Company or those of its customers and counterparties. A security breach could result in violations of applicable privacy and other laws, financial loss to the Company or to its customers, loss of confidence in the Company’s security measures, significant litigation exposure, and harm to the Company’s reputation, all of which could have a material adverse effect on the Company.

Counterparties and Correspondents Expose the Company to Risks.

The Company's use of derivative financial instruments exposes us to financial and contractual risks with counterparties. The Company maintains correspondent bank relationships, purchase loans, manages certain loan participations, engage in securities and funding transactions, and undergo other activities with financial counterparties that are customary to its industry. The Company also utilizes services from major vendors of technology, telecommunications, and other essential operating services. There is financial, reputational, and operational risk in these relationships, which the Company seeks to manage through internal controls and procedures, but there are no assurances that the Company will not experience loss or interruption of its business as a result of unforeseen events with these providers. The Company's mortgage banking operations have exposed us to counterparty transactions including the use of third parties to participate in the management of interest rate risk and mortgage sales and hedging, as well as mortgage servicing. Financial, reputational, and operational risks are inherent in these counterparty and correspondent relationships. The Company could experience losses if there are failures in the controls or accounting, including those related to derivatives activities or if there are performance failures by any counterparties. The risk of loss is increased when interest rates change suddenly and if the intended hedging objectives are not achieved as a result of market or counterparty behaviors.

The Company’s Business is Reliant on Outside Vendors.

The Company’s business is highly dependent on the use of certain outside vendors for its day-to-day operations. The Company’s operations and reputation are exposed to risk that a vendor may not perform in accordance with established performance standards required in its agreements for any number of reasons including a change in their senior management, their financial condition, their product line or mix and how they support existing customers, or a simple change in their strategic focus. While the Company has comprehensive programs, policies and procedures in place to mitigate risk at all phases of vendor management from selection, to performance monitoring and renewals, the failure of a vendor to perform in accordance with contractual agreements could be disruptive to its business, which could have a material adverse effect on its financial condition, strategic objectives, and results of operations.

Tailoring The Bank’s Retail Delivery Model to Respond to Consumer Preferences in Banking May Negatively Affect Earnings.

The Company’s branch network continues to be a very significant source of new business generation, however, consumers continue to migrate much of their routine banking to self-service channels. In recognition of this shift in consumer patterns, we regularly review the branch network, which has resulted in branch consolidation accompanied by the enhancement of the Bank’s capabilities to serve its customers through alternate delivery

34

channels. The benefits of this strategy will depend on our ability to realize expected benefits without experiencing significant customer attrition, unexpected costs, or unanticipated disruptions to operations.

Development of New Products and Services May Impose Additional Costs on the Company and May Expose It to Increased Operational Risk.

The Company’s financial performance depends, in part, on its ability to develop and market new and innovative services and to adopt or develop new technologies that differentiate its products or provide cost efficiencies, while avoiding increased related expenses. This dependency is exacerbated in the current “FinTech” environment, where financial institutions are investing significantly in evaluating new technologies, such as artificial intelligence, blockchain applications, and developing potentially industry-changing new products, services and industry standards. 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, the Company’s 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. The Company’s 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 the Company’s clients. Products and services relying on internet and mobile technologies may expose the Company to fraud and cybersecurity risks. Failure to successfully manage these risks in the development and implementation of new products or services could have a material adverse effect on the Company’s business and reputation, as well as on its consolidated results of operations and financial condition.

The Soundness of Other Financial Institutions Could Adversely Affect Us.

Financial services institutions are interrelated as a result of clearing, trading, counterparty, or other relationships. We have exposure to many different counterparties and industries, and we routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, and other institutional clients. Many of these transactions expose us to credit risk in the event of a default by our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the credit or derivative exposure due us. Any such losses could have a material adverse effect on our financial condition and results of operations.

Additionally, in early 2023, the failures of Silicon Valley Bank, Signature Bank, and First Republic Bank resulted in decreased confidence in banks among depositors, other counterparties and investors. Such events and developments could materially and adversely affect our business or financial condition, including through declines in deposits, increased costs of funds, potential liquidity pressures, increased regulation and enforcement activity, and declines and volatility in the price of our common stock.

Legal and Regulatory Proceedings and Related Matters Could Adversely Affect Us and the Banking Industry in General.

The Company has been, and in the future could be, subject to various regulatory and legal proceedings, including class action litigation. It is inherently difficult to gauge the result of these matters, and there can be no guarantee that we will prevail in any litigation or proceeding. Legal and regulatory matters of any degree of significance could result in significant costs and diversion of our efforts could have a material adverse effect on our financial condition and operating results.

As disclosed in Part I, Item 3, “Legal Proceedings,” we currently have ongoing proceedings. If we settle these claims or the litigation is not resolved in our favor, we could suffer reputational damage, incur legal costs, and settlements or judgments that may exceed amounts covered by our existing insurance policies. We cannot provide assurances that our insurer will cover all legal costs, settlements or judgments we incur. If we are not successful in defending ourselves from these claims, or if our insurer does not cover the full amount of legal costs we incur, the outcome could materially adversely affect our business, results of operations and financial condition. Furthermore, adverse determinations in such matters could result in actions by our regulators that could materially adversely affect our business, financial condition or results of operations. There can be no assurance that other proceedings, which may have a material adverse effect on our business, results of operations or financial condition will not arise in the near or long-term future.

35

Loss of Key Employees Could Disrupt Relationships With Certain Customers.

Our customer relationships are crucial to the success of our business, and the loss of key employees with significant customer relationships could lead to the loss of business if the customers were to follow that employee to a competitor. While we believe our relationships with key personnel are strong, we cannot guarantee that all of our key personnel will remain with us, which could result in the loss of some customers, which may have a negative impact on our business, financial condition, and results of operations.

Mergers, Acquisitions and Dispositions Involve Numerous Risks and Uncertainties.

In addition to the proposed Mergers, the Company has in the past and may in the future pursue mergers, acquisitions and disposition opportunities involving financial institutions and financial services companies. Mergers, acquisitions and dispositions involve a number of risks and challenges. Acquisition related risks include the expenses involved; potential diversion of management’s attention from other strategic matters; integration of branches and operations acquired; outflow of customers from the acquired branches; retention of personnel from acquired companies or branches; competing effectively in geographic areas not previously served; managing growth resulting from the transaction; and dilution in the acquirer's book and tangible book value per share. The Company continually looks to optimize its branch network and real estate. The disposition of branches or business operations could result in the loss of some customers or unanticipated costs related to deconversion and transfer. Such dispositions may have an unanticipated adverse impact on operations, earnings or liquidity.

Interest Rate Risks

Market Interest Rate Conditions Could Adversely Affect Results of Operations and Financial Condition

Net interest income is the Company's largest source of income. Changes in interest rates can affect the amount of interest we receive on loans and investments and the amount of interest we pay on deposits and borrowings, which may affect our net interest margins and other elements of net income. The Company’s interest rate sensitivity is discussed in more detail in Item 7A of this report and is the primary market risk to its condition and operations.

Changes in interest rates can also affect the demand for the Company’s products and services, supply conditions in the U.S. financial and capital markets, loan prepayments, the Company’s ability to originate loans, the value of its assets, its ability to realize gains from the sale of assets, and loan delinquencies and defaults, all of which ultimately affect earnings. Changes in interest rates may also affect the market value of the Company’s investment securities portfolio, which may affect the level and adequacy of its regulatory capital.

During 2022 and 2023, in response to accelerated inflation, the Federal Reserve implemented monetary tightening policies, resulting in significantly increased interest rates. In 2024, however, the Federal Reserve implemented several decreased in the Federal Funds rate, resulting in an aggregate decrease of 100 basis points in the latter part of the year. Changes in interest rates are beyond the Company's control and may not be anticipated.

If the interest rates paid on deposits and other borrowings increase at a faster rate than the interest rates received on loans and other investments, our net interest income, and therefore earnings, could be adversely affected. In a rising rate environment, demand for loans may decrease and loans with adjustable interest rates are more likely to experience a higher rate of default. Conversely, if the interest rates received on loans and other investments decline faster than rates paid on deposits and other borrowings, our net interest income, and therefore earnings, could be similarly adversely affected. Changes in interest rates also affect the fair value of the securities portfolio. Generally, the value of securities moves inversely with changes in interest rates.

Any substantial, unexpected or prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations. Also, our interest rate risk modeling techniques and assumptions likely may not fully predict or capture the impact of actual interest rate changes on our balance sheet.

Liquidity Risks

Liquidity is Essential to the Company’s Business and a Lack of Liquidity Could Adversely Affect the Company’s Financial Condition and Results of Operations.

Liquidity is essential to the Company’s business. The Company relies on its ability to generate deposits and effectively manage the repayment of its liabilities to ensure that there is adequate liquidity to fund operations. An inability to raise funds through deposits, borrowings, the sale and maturities of loans and securities and other sources could have a substantial negative effect on liquidity. The Company’s most important source of funds is its deposits. Deposit balances can decrease when customers perceive alternative investments as providing a better risk

36

adjusted return, which are strongly influenced by such external factors as the direction of interest rates, local and national economic conditions and the availability and attractiveness of alternative investments. Further, the demand for deposits may be reduced due to a variety of factors such as negative trends in the banking sector, the level of and/or composition of our uninsured deposits, demographic patterns, changes in customer preferences, reductions in consumers’ disposable income, the monetary policy of the Federal Reserve or regulatory actions that decrease customer access to particular products. If customers move money out of bank deposits and into other investments such as money market funds, the Company would lose a relatively low-cost source of funds, which would increase its funding costs and reduce net interest income. Any changes made to the rates offered on deposits to remain competitive with other financial institutions may also adversely affect profitability and liquidity. Other primary sources of funds consist of cash flows from operations, maturities and sales of investment securities and/or loans, brokered deposits, borrowings from the FHLB and/or and the Federal Reserve Bank of Boston discount window, and unsecured borrowings. The Company also may borrow funds from third-party lenders, such as other financial institutions. The Company’s access to funding sources in amounts adequate to finance or capitalize its activities, or on terms that are acceptable, could be impaired by factors that affect the Company directly or the financial services industry or economy in general, such as disruptions in the financial markets or negative views and expectations about the prospects for the financial services industry, a decrease in the level of the Company’s business activity as a result of a downturn in markets or by one or more adverse regulatory actions against the Company or the financial sector in general. Any decline in available funding could adversely impact the Company’s ability to originate loans, invest in securities, meet expenses, or to fulfill obligations such as meeting deposit withdrawal demands, any of which could have a material adverse impact on its liquidity, business, financial condition and results of operations.

Bank Failures and Stresses May Lead to Negative Depositor Confidence in Depository Institutions. Systemic Impacts May have a Material Adverse Effect on our Financial Condition and Results of Operations and Stock Price.

In 2023, several large regional banks failed due to deposit runs and liquidity issues. These banks also had elevated levels of uninsured deposits, which may be less likely to remain at the bank over time and less stable as a source of funding than insured deposits. These failures led to volatility and declines in the market for bank stocks and questions about depositor confidence in depository institutions. In 2024, elevated commercial real estate losses at a large bank led to industry stock price declines.

Recent events have led to a greater focus by institutions, investors and regulators on the on-balance sheet liquidity of and funding sources for financial institutions, the composition of its deposits, including the amount of uninsured deposits, the amount of accumulated other comprehensive loss, capital levels and interest rate risk management. Impacts on our liquidity, deposits, capital levels and interest rate risk may have a material adverse effect on our financial condition and results of operations.

The premiums of the FDIC’s deposit insurance program are subject to increases based on claims on the fund related to bank failures. Banking regulators have signaled further review of regulatory requirements and the potential for changes to laws or regulations governing banks and bank holding companies. Changes resulting from these events could include increased regulatory oversight, higher capital requirements or changes in the way regulatory capital is calculated, and the impositions of additional restrictions through regulatory changes or supervisory or enforcement activities, each of which could have a material impact on our business.

The Company's Wholesale Funding Sources May Prove Insufficient to Replace Deposits at Maturity and Support Operations and Future Growth.

The Company must maintain sufficient funds to respond to the needs of depositors and borrowers. As a part of its liquidity management, the Company uses a number of funding sources in addition to deposit growth and cash flows from loans and investments. These sources include Federal Home Loan Bank advances, issuance of brokered certificates of deposit, proceeds from the sale of loans, and liquidity resources at the holding company. The Company’s financial flexibility will be severely constrained if the Company is unable to maintain access to wholesale funding or if adequate financing is not available to accommodate future growth at acceptable costs. Turbulence in the capital and credit markets may adversely affect liquidity and financial condition and the willingness of certain counterparties and customers to do business with the Company.

The Company's Ability to Service Our Debt, Pay Dividends, and Otherwise Pay Obligations as They Come Due Is Substantially Dependent on Capital Distributions from the Bank, and These Distributions Are Subject to Regulatory Limits and Other Restrictions. The Company’s Stock Repurchase Program is also Dependent on These Distributions.

37

A substantial source of holding company income is the receipt of dividends from the Bank, from which the Company services debt, pays obligations, and pays shareholder dividends. The availability of dividends from the Bank is limited by various statutes and regulations. It is possible, depending upon the financial condition of the Bank and other factors, that the applicable regulatory authorities could assert that payment of dividends from the Bank to the Company or other types of payments are considered an unsafe or unsound practice. If the Bank is unable to pay dividends, the Company may not be able to service debt, pay debt obligations, or pay dividends on its common stock. The Company may also be unable to repurchase common stock under a then outstanding stock repurchase program.

Secondary Mortgage Market Conditions Could Have a Material Impact on the Company’s Financial Condition and Results of Operations.

In addition to being affected by interest rates, the secondary mortgage markets are also subject to investor demand for residential mortgage loans and increased investor yield requirements for these loans. These conditions may fluctuate or worsen in the future. As a result, a prolonged period of secondary market illiquidity may reduce the Company’s loan production volumes and operating results.

Secondary markets are significantly affected by Fannie Mae, Freddie Mac and Ginnie Mae (collectively, the “Agencies”) for loan purchases that meet their conforming loan requirements. These agencies could limit purchases of conforming loans due to capital constraints, a change in the criteria for conforming loans or other factors. Proposals to reform mortgage finance could affect the role of the Agencies and the market for conforming loans which comprise the majority of the Company’s mortgage lending and related originations income.

Securities Market Values

Declines in the Value of Certain Investment Securities Could Require Write-Downs, Which Would Reduce Earnings.

Declines in the value of investment securities due to market conditions and/or issuer impairment could result in losses that can reduce capital and earnings. Such declines can result from changes in interest rates and inflation. The Company’s investment in equity securities and non-investment grade or unrated debt securities present heightened credit and price risks. Under applicable accounting standards, equity gains and losses are recorded to current period operating results. The Company has an investment in the stock of the Federal Home Loan Bank of Boston ("FHLBB") which could result in write-down in the event of impairment.

Regulatory Matters

Legislative and Regulatory Initiatives May Affect Business Activities and Increase Operating Costs.

New federal or state laws and regulations could affect lending, funding practices, capital, and liquidity standards. New laws, regulations, and other regulatory changes may also increase compliance costs and affect business and operations. Moreover, the FDIC sets the cost of FDIC insurance premiums, which can affect profitability.

Regulatory capital requirements and their impact on the Company may change. The Company may need to raise additional capital in the future to support operations and continued growth. The Company's ability to raise capital, if needed, will depend on its condition and performance, and on market conditions.

New laws, regulations, and other regulatory changes, along with negative developments in the financial industry and the domestic and international credit markets, may significantly affect the markets in which the Company does business, the markets for and value of its loans and investments, and ongoing operations, costs and profitability. For more information, see “Regulation and Supervision” in Item 1 of this report.

With total assets over $10 billion, the Company and the Bank are subject to closer supervision by their primary regulators and, as to compliance with consumer protection laws and regulations, the Consumer Financial Protection Bureau. The Company and the Bank are subject to capital stress testing expectations which require significant resources and infrastructure. If the Company’s compliance with the enhanced supervision and requirements is insufficient, there can be significant negative consequences for its operations, profitability, and ability to further pursue its strategic growth plan.

Provisions of the Company's Certificate of Incorporation, Bylaws, and Delaware Law, as Well as State and Federal Banking Regulations, Could Delay or Prevent a Takeover of Us by a Third Party.

Provisions in the Company's certificate of incorporation and bylaws, the corporate law of the State of Delaware, and state and federal regulations could delay, defer or prevent a third party from acquiring us, despite the possible

38

benefit stockholders, or otherwise adversely affect the price of its common stock. These provisions include: limitations on voting rights of beneficial owners of more than 10 percent of common stock; supermajority voting requirements for certain business combinations; the election of directors to terms of one year; and advance notice requirements for nominations for election to the Company's Board of Directors and for proposing matters that stockholders may act on at stockholder meetings. In addition, the Company is subject to Delaware laws, including one that prohibits engaging in a business combination with any interested stockholder for a period of three years from the date the person became an interested stockholder unless certain conditions are met. These provisions may discourage potential takeover attempts, discourage bids for the Company's common stock at a premium over market price or adversely affect the market price of, and the voting and other rights of the holders of, its common stock. These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors other than the candidates nominated by the Board.

Changes in Tax Laws and Accounting Policies and Practices.

We are subject to income taxes and complex tax regimes in the United States. We cannot predict future changes in the tax regulations that we are subject to, and any changes could have a material impact on our tax liability or result in increased costs of our tax compliance obligations. Additionally, from time to time, the regulatory agencies and other authoritative bodies, such as the Financial Accounting Standards Board ("FASB"), change the financial accounting and reporting standards that govern the preparation of the Company's financial statements. These changes can be hard to predict and can materially impact how management records and reports the Company's financial condition and results of operations.

Significant Accounting Estimates

Various Factors May Cause our Allowance for Credit Losses on Loans to Increase.

The Company has an allowance for current expected credit losses on loans maintained through a provision for credit losses charged to expense. This represents our estimate of current expected credit losses based on an evaluation of risks within the portfolio of loans. The level of the allowance represents management’s estimate of current expected credit losses over the contractual life of the existing loan portfolio. The determination of the appropriate level of the allowance inherently involves a degree of subjectivity and requires that we make significant estimates of current credit risks and current trends and reasonable and supportable forecasts of future economic conditions, all of which may undergo frequent and material changes. Changes in economic and other conditions affecting borrowers, including inflation and interest rates, along with new information regarding existing loans other factors, may indicate the need for a future increase in the allowance.

Fair Value Measurements May Be Affected by Inherent Uncertainties

The Company uses fair value measurements to determine fair value disclosures and to record fair value adjustments to certain assets and liabilities, such as interest rate swaps, securities available for sale, and derivatives. Additionally, from time to time, the Company may be required to record certain assets at fair value on a non-recurring basis, such as individually evaluated loans held for investment and capitalized servicing rights. Whenever there is no readily available market data, management uses its best estimate and assumptions in determining fair value, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if other assumptions had been used, our recorded earnings or disclosures could have been materially different from those reflected in these financial statements.

Trading of the Company's Common Stock

The Trading History of the Company’s Common Stock is Characterized By Low Trading Volume. The Value of Shareholder Investments May be Subject to Sudden Decreases Due to the Volatility of the Price of the Common Stock.

The level of interest and trading in the Company’s stock depends on many factors beyond the Company's control. The market price of the Company's common stock may be highly volatile and subject to wide fluctuations in response to numerous factors, including, but not limited to, the factors discussed in other risk factors and the following: actual or anticipated fluctuations in operating results; changes in interest rates and inflation; changes in the legal or regulatory environment; press releases, announcements or publicity relating to the Company or its competitors or relating to trends in its industry; changes in expectations as to future financial performance, including financial estimates or recommendations by securities analysts and investors; future sales of its common stock; changes in economic conditions in the marketplace, general conditions in the U.S. economy, financial markets or the banking industry; and other developments. These factors may adversely affect the trading price of the Company's common stock, regardless of actual operating performance, and could prevent stockholders from selling their common stock at a desirable price.

39

In the past, stockholders have brought securities class action litigation against a company following periods of volatility in the market price of their securities. The Company could be the target of similar litigation in the future, which could result in substantial costs and divert management’s attention and resources.

Other Risks

Negative Public Opinion Could Damage the Company’s Reputation and Impact Business Operations and Revenues.

As a financial institution, the Company’s earnings and capital are subject to risk associated with negative public opinion. Negative public opinion could result from the Company’s actual or alleged conduct in any number of activities, including but not limited to lending practices, failure to meet customer expectations, regulatory or legal issues, corporate governance, merger and acquisitions activity, social media and other marketing activities, or actions taken by government regulators and community organizations in response to any of the foregoing. Negative public opinion could adversely affect the Company’s ability to attract or retain clients, expose the Company to litigation and regulatory action, and have a material adverse effect on the Company’s stock price, result in heightened volatility or hinder efforts to raise capital or pursue strategic transactions.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

40

ITEM 1C. CYBERSECURITY

The Company maintains a robust Information Security Program that sets forth the Company’s commitment to the continual review and improvement of policies, processes, procedures, and standards for evaluating electronic and physical methods of accessing, collecting, storing, using, transmitting, disposing, and protecting sensitive information including customer information under guidelines established as part of the Gramm Leach-Bliley Act (GLBA). The Company uses or adheres to relevant standards and frameworks from the Federal Financial Institutions Examination Council (FFIEC) and National Institute of Standards and Technology (NIST), among others, to assess information security risks and controls, as well as to assess the maturity and effectiveness of the Information Security Program.

The Board of Directors and Executive Management are responsible for ensuring that the Information Security Program within Enterprise Risk Management identifies, measures, monitors, controls, and reports risk according to significance. If risks are determined to be undesired and beyond stated and aggregated Risk Appetites, the Board of Directors and Executive Management take appropriate action to ensure that excessive risk is mitigated or eliminated, which may include reducing risk exposure. The Board of Directors has final responsibility, after consultation with management, for ensuring the Information Security Program aligns with the overall business strategy and provides oversight to protect the Company from ongoing and emerging threats, including those related to cybersecurity.

The Information Security Program is overseen by the Company’s Information Security Officer ("ISO"), who reports directly to the Chief Risk Officer. The ISO has held this position with the Company since May, 2024, and has worked at the Company in cybersecurity for almost 12 years and in the information technology industry for more than 16 years. The Chief Risk Officer has held the position at the Company since October 2016, when he joined the Company from the FDIC where he was employed for 24 years and held multiple positions including Senior Risk Examiner for the Division of Risk Management Supervision and Acting Regional Manager for the Division of Insurance and Research. During his tenure with the FDIC, the CRO served from time to time as the Examiner-in-Charge for Berkshire Bank and numerous other banks throughout New England. The ISO is responsible for the implementation, maintenance, and enforcement of the Information Security Program and related policies and standards. The program is evaluated and adjusted at least annually based on the results of testing, monitoring, and the adoption of best practices. Reporting occurs annually on the status of the Information Security Program to the Board’s Risk Management, Capital & Compliance Committee. Reporting includes the overall status of the program, material matters related to the program, Key Risk Indicators ("KRIs"), cyber risk assessments results, emerging risks, risk management and control decisions, control testing results, third party security assessments, penetration test results, security breaches or violations, and recommendations for changes to the program.

The Company maintains a robust Third-Party Risk Management program to manage risks related to third-party relationships in a manner that is consistent with the Company’s strategic goals, organizational objectives, and risk appetite. This includes comprehensive risk and control assessments to ensure sensitive information is safeguarded appropriately.

The Company has a dedicated internal Security Operations Center ("SOC") and a Managed Detection and Response ("MDR") third party service that provides 24/7/365 monitoring of its environment to investigate and respond to security alerts. Log sources are mapped to the MITRE ATT&CK framework to ensure appropriate security monitoring and gap analysis to detect and respond to attacks. Threat intelligence is used with contextual risk approaches to identify threats and prioritize response. Threat hunts operate both proactively and reactively to look for relevant behaviors and indicators of compromise from cybersecurity events or zero-day vulnerabilities. An Incident Response Plan is in place to ensure the timely and effective handing of security incidents. This includes providing the Company with a detailed outline of how to respond to a security incident, team responsibilities, contact information for key resources, definitions for determining the severity and escalation of security incidents, and pre-built playbooks to respond to the most common types of security incidents including ransomware. Incident response and escalation plans are tested and reviewed for improvements at least annually. An incident response retainer with an approved third party is contracted to assist in responding to security incidents and to conduct forensic investigations involving the potential compromise of sensitive data or information assets. All employees are required to complete privacy and information security awareness training upon joining the Company and on an annual basis. This includes incident response training on how to communicate potential or actual incidents.

41

42

The Company continues to face risks from cybersecurity threats that could have a material adverse effect on its business, financial condition, results of operations, or reputation. Although such risks have not materially affected us, we have experienced threats to and breaches of our data, including breaches caused by human error or breaches affecting third parties of the Company. For more information about the cybersecurity risks we face, see Item 1A-Risk Factors.

ITEM 2. PROPERTIES

The Company's headquarters are located at 60 State Street in leased property in Boston, MA. The Bank's headquarters are located in owned and leased facilities located in Pittsfield, MA. The Company also owns or leases other facilities within its primary market areas: Greater Boston (including Worcester, MA); Pioneer Valley (Springfield area), Massachusetts; Berkshire County, Massachusetts; Southern Vermont; the Capital Region (Albany area), New York; Central New York; Central and Eastern Connecticut; and Southern Rhode Island. As of December 31, 2024 the Company had 83 full-service financial centers in Massachusetts, New York, Connecticut, Rhode Island, and Vermont.

The Company also has regional locations which are full-service commercial offices located in Boston, MA.; Pittsfield, MA.; Springfield, MA.; Albany, N.Y.; Glastonbury, CT.; Willimantic, CT. Worcester, MA.; Burlington, MA, and Providence RI. The Bank's 44 Business Capital lending division is headquartered in Blue Bell, Pennsylvania.

The Bank has made its workplace more flexible as certain designated functions are approved for telecommuting arrangements. As a result of its efficiency initiatives, the Bank has been in the process of identifying and reducing real estate utilized for its operations.

Due to the pandemic, the Company adapted its infrastructure and protocols to accommodate the shift of back office operations out of the office and continues to support this expanded capability and flexibility in pursuit of its strategies and human capital management.

43

ITEM 3. LEGAL PROCEEDINGS

As of December 31, 2024, neither the Company nor the Bank was involved in any pending legal proceedings believed by management to be material to the Company’s financial condition or results of operations. Periodically, there have been various claims and lawsuits involving the Bank, such as claims to enforce liens, condemnation proceedings on properties in which the Bank holds security interests, claims involving the making and servicing of real property loans, and other issues incident to the Bank’s business. A summary of certain legal matters involving unsettled litigation or pertaining to pending transactions are as follows:

On February 4, 2020, the Bank filed a complaint in the New York State Supreme Court for the County of Albany against Pioneer Bank (“Pioneer”) seeking damages of approximately $16.0 million. The complaint alleges that Pioneer is liable to the Bank for a credit loss of approximately $16.0 million suffered by the Bank in the third quarter of 2019 as a result of Pioneer’s breaches of a series of loan participation agreements executed in 2017, 2018 and 2019 in which it served as the lead bank, as well as constructive fraud, fraudulent concealment and/or negligent misrepresentation. Pioneer filed a motion to dismiss aspects of the Bank’s complaint, which motion was allowed in part by the court to dismiss the Bank’s negligent misrepresentation claim, and denied in part by the court to allow all other claims by the Bank to proceed. The Company wrote down the underlying credit loss in its entirety in the third quarter of 2019, but recognized a partial recovery of $1.7 million early in the second quarter of 2020. The Company has not accrued for any additional anticipated recovery at this time. Extensive discovery has taken place in this action. On November 30, 2022, the Bank filed an amended complaint in its action against Pioneer setting forth more detailed allegations of Pioneer’s breaches of the loan participation agreements and stating additional claims for fraudulent inducement to cause Berkshire to join the loan participation agreements, constructive fraud and fraudulent concealment. On January 30, 2023, as part of its response to the Bank’s amended complaint, Pioneer filed a counterclaim against the Bank alleging (i) certain breaches by the Bank of the 2019 loan participation agreement stemming from actions that the Bank took to protect its interests after it learned of the facts and circumstances that caused the underlying credit loss, and (ii) that as a result of accepting the partial recovery of approximately $1.7 million in the second quarter of 2020 the Bank should be deemed to have ratified the 2019 loan participation agreement and mooted its claims against Pioneer. Further discovery is continuing between the parties, and the Bank continues to actively build its case in this matter

On or about August 10, 2020, a former employee of the Bank’s subsidiary First Choice Loan Services Inc. (“FCLS”) filed a complaint in the Court of Common Pleas, Bucks County Pennsylvania against FCLS and two of its former senior corporate officers generally alleging wrongful termination as a result of purported whistleblower retaliation and other violations of New Jersey state employment law. The complaint also purports to name the Bank and the Company as additional defendants, even though neither entity ever employed, paid wages to or contracted with the plaintiff. On November 16, 2020, the plaintiff filed a First Amended Complaint reiterating the same claims against the same defendants. The Company's liability insurer has provided outside litigation counsel to defend the Company and the Bank in this matter, as well as FCLS and its former senior corporate officers. On December 7, 2020, defense counsel filed Preliminary Objections on behalf of the Company, the Bank, FCLS and FCLS’s former senior corporate officers denying the plaintiff’s claims and seeking dismissal of the case and an order that the plaintiff’s claims must proceed through arbitration in accordance with contractual obligations set forth in plaintiff’s previous employment agreement with FCLS. On June 30, 2021, the court dismissed the plaintiff’s complaint without prejudice in support of FCLS’s petition to compel arbitration. The parties are preparing for arbitration proceedings that are expected to occur no earlier than the second quarter of 2025. Discovery is continuing between the parties in preparation for final arbitration.

On or about May 13, 2024, a complaint was filed against the Bank in the United States District Court for the Northern District of New York, Syracuse Division by an individual who claims to have filed the complaint on behalf of a purported class of victims of an alleged Ponzi scheme perpetrated by a former Berkshire Bank customer. On October 31, 2024, the court dismissed the plaintiff’s complaint with prejudice for failure to state a claim upon which relief could be granted under Federal Rules of Civil Procedure 12(b)(6) and 9(b). In connection with bankruptcy proceedings involving the former customer and his operating entities, the Bank has received a Rule 2004 subpoena from the bankruptcy trustee seeking information related to the Ponzi scheme. At this time, no claim has been asserted against the Bank in the bankruptcy proceedings, nor has the trustee threatened to pursue litigation.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

44

PART II 

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Information

The common shares of the Company trade on the New York Stock Exchange under the symbol “BHLB”.

The Company had approximately 3,504 holders of record of common stock at February 24, 2025.

Dividends

The Company intends to pay regular cash dividends to common shareholders; however, there is no assurance as to future dividends because they are dependent on the Company’s future earnings, capital requirements, financial condition, and regulatory environment. Dividends from the Bank have been a source of cash used by the Company to pay its dividends, and these dividends from the Bank are dependent on the Bank’s future earnings, capital requirements, and financial condition. Dividends from the Bank are allowed within statutory limits under Massachusetts statutes and are currently subject to approval by the FDIC. Further information about dividend restrictions is disclosed in Note 17 - Shareholders’ Equity and Earnings per Common Share of the Consolidated Financial Statements.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

The Company occasionally issues unregistered shares of common stock to vendors or as consideration in contracts for the purchase of assets, services, or operations. During 2024 and 2023, there were no shares transferred.

Purchases of Equity Securities by the Issuer and Affiliated Purchases

On January 25, 2024, the Company announced that its Board of Directors approved a stock repurchase program pursuant to which the Company is authorized to repurchase shares of Company common stock at a total cost of up to $40 million through December 31, 2024.

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Maximum number of shares that may yet be purchased under the plans or programs
October 1-31, 2024	—	$	—	—	839,589
November 1-30, 2024	—	—		—	839,589
December 1-31, 2024	—	—		—	—
Total	—	$	—	—	—

45

Common Stock Performance Graph

The performance graph compares the Company’s cumulative shareholder return on its common stock over the last five years to the cumulative return of the NYSE Composite Index and the KBW NASDAQ Regional Banking Index. Total shareholder return is measured by dividing total dividends (assuming dividend reinvestment) for the measurement period plus share price change for a period by the share price at the beginning of the measurement period. The Company’s cumulative shareholder return over a five-year period is based on an initial investment of $100 on December 31, 2019. The performance graph represents past performance and should not be considered to be an indication of future performance. Information used on the graph and table was obtained from a third party provider, a source believed to be reliable, but the Company is not responsible for any errors or omissions in such information.

	Period Ending
Index	12/31/19	12/31/20	12/31/21	12/31/22	12/31/23	12/31/24
Berkshire Hills Bancorp, Inc.	100.00	54.79	92.70	99.34	85.10	100.31
NYSE Composite Index	100.00	106.99	129.11	117.04	133.16	154.19
KBW NASDAQ Regional Banking Index	100.00	91.29	124.74	116.10	115.64	130.90

Source: S&P Global Market Intelligence

Shown below is the annual total shareholder return by year based on the above data.

	Annual Total Shareholder Return
	Year Ending
Index	12/31/20	12/31/21	12/31/22	12/31/23	12/31/24
Berkshire Hills Bancorp, Inc.	(45.21)	69.20	7.17	(14.33)	17.87
NYSE Composite Index	6.99	20.68	(9.35)	13.77	15.79
KBW NASDAQ Regional Banking Index	(8.71)	36.64	(6.93)	(0.40)	13.20

46

ITEM 6. RESERVED

47

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SELECTED FINANCIAL DATA

The following summary data is based in part on the Consolidated Financial Statements and accompanying notes, and other schedules appearing elsewhere in this Form 10-K. Historical data is also based in part on, and should be read in conjunction with, prior filings with the SEC.

	At or For the Years Ended December 31,
(In thousands, except per share data)	2024			2023			2022			2021			2020
Per Common Share Data:
Net earnings/(loss), diluted - continuing operations	$	1.43		$	1.60		$	2.02		$	2.39		$	(10.21)
Net (loss), diluted - discontinued operations	—			—			—			—			(0.39)
Net earnings/(loss), diluted	$	1.43		$	1.60		$	2.02		$	2.39		$	(10.60)
Total book value per common share	25.15			23.27			21.51			24.30			23.37
Dividends	0.72			0.72			0.54			0.48			0.72
Common stock price:
High	32.36			31.52			31.78			29.16			33.04
Low	20.50			18.07			23.62			16.35			8.55
Close	28.43			24.83			29.90			28.43			17.12
Performance Ratios: (1)
Return on assets	0.52		%	0.59		%	0.82		%	0.98		%	(4.15)		%
Return on equity	5.84			7.07			8.70			9.96			37.15
Return on tangible common equity (2)	6.27			7.60			9.29			10.57			(46.88)
Net interest margin, fully taxable equivalent ("FTE") (3)	3.16			3.27			3.26			2.60			2.72
Growth Ratios:
Total commercial loans	7.32		%	5.66		%	12.99		%	(12.09)		%	(4.58)		%
Total loans	3.82			8.45			22.11			(15.54)			14.95
Total deposits	(2.43)			2.96			2.57			(1.44)			(1.16)
Earnings per share, (compared to prior year)	(10.63)			(20.79)			(15.48)			122.55			(638.07)
Selected Financial Data:
Total assets	$	12,273,408		$	12,430,821		$	11,662,864		$	11,554,913		$	12,838,013
Total earning assets	11,522,562			11,704,515			10,913,069			10,899,109			12,089,939
Securities	1,188,859			2,033,436			2,033,436			2,548,590			2,223,417
Total loans	9,384,994			9,039,686			8,335,309			6,825,847			8,081,519
Allowance for credit losses	(114,700)			(105,357)			(96,270)			(106,094)			(127,302)
Total intangible assets	15,064			19,664			24,483			26,619			34,819
Total deposits	10,375,204			10,633,384			10,327,269			10,068,953			10,215,808
Total borrowings	438,094			125,509			125,509			110,844			571,637
Total shareholders’ equity	1,167,424			1,012,221			954,062			1,182,435			1,187,773

48

	At or For the Years Ended December 31,
	2024			2023			2022			2021			2020
Selected Operating Data:
Total interest and dividend income	$	613,938		$	576,299		$	387,257		$	329,065		$	409,782
Total interest expense	262,352			207,252			42,660			37,899			93,000
Net interest income	351,586			369,047			344,597			291,166			316,782
Fee income	68,527			65,281			63,995			84,462			69,990
All other non-interest income/(loss)	(20,113)			(22,499)			4,942			58,786			(3,683)
Total net revenue	400,000			411,829			413,534			434,414			383,089
Provision for credit losses	23,999			31,999			11,000			(500)			75,878
Total non-interest expense	296,486			301,508			288,716			285,893			840,239
Income/(loss) from continuing operations before income taxes	79,515			78,322			113,818			149,021			(533,028)
Income tax expense/(benefit) from continuing operations	18,512			8,724			21,285			30,357			(19,853)
Net income/(loss) from continuing operations	61,003			69,598			92,533			118,664			(513,175)
(Loss)/income from discontinued operations before income taxes	—			—			—			—			(26,855)
Income tax (benefit)/expense from discontinued operations	—			—			—			—			(7,013)
Net (loss)/income from discontinued operations	—			—			—			—			(19,842)
Net income/(loss)	$	61,003		$	69,598		$	92,533		$	118,664		$	(533,017)
Basic earnings/(loss) per common share:
Continuing operations	$	1.44		$	1.61		$	2.03		$	2.41		$	(10.21)
Discontinued operations	—			—			—			—			(0.39)
Total basic earnings/(loss) per share	$	1.44		$	1.61		$	2.03		$	2.41		$	(10.60)
Diluted earnings/(loss) per common share:
Continuing operations	$	1.43		$	1.60		$	2.02		$	2.39		$	(10.21)
Discontinued operations	—			—			—			—			(0.39)
Total diluted earnings/(loss) per share	$	1.43		$	1.60		$	2.02		$	2.39		$	(10.60)
Weighted average common shares outstanding - basic	42,508			43,288			45,564			49,240			50,270
Weighted average common shares outstanding - diluted	42,761			43,504			45,914			49,554			50,270
Dividends per preferred share	$	—		$	—		$	—		$	1.20		$	1.84
Dividends per common share	$	0.72		$	0.72		$	0.54		$	0.48		$	0.72
Asset Quality and Condition Ratios:
Net loans charged-off/average loans	0.16		%	0.26		%	0.27		%	0.29		%	0.41		%
Allowance for credit losses/total loans	1.22			1.17			1.15			1.55			1.58
Loans/deposits	90			85			81			68			79
Capital Ratios:
Tier 1 capital to average assets - Company	10.97		%	9.65		%	10.18		%	10.49		%	9.38		%
Total capital to risk-weighted assets - Company	15.45			14.36			14.60			17.32			16.10
Tier 1 capital to risk-weighted assets - Company	13.22			12.27			12.60			15.30			14.06
Shareholders’ equity/total assets	9.51			8.14			8.18			10.23			9.25

___________________________________

(1)  All performance ratios are annualized and are based on average balance sheet amounts, where applicable.

(2) Non-GAAP financial measure. Refer to "Reconciliation of Non-GAAP Financial Measures" for additional information.

(3)    Fully taxable equivalent considers the impact of tax advantaged investment securities and loans.

49

Average Balances, Interest and Average Yields/Cost

The following table presents an analysis of average rates and yields on a fully taxable equivalent basis for the years presented. Tax exempt interest revenue is shown on a tax-equivalent basis for proper comparison.

Item 7 - Table 1 - Average Balance, Interest and Average Yields / Costs

	2024						2023						2022
(Dollars in millions)	Average Balance		Interest		Average Yield/ Rate		Average Balance		Interest		Average Yield/ Rate		Average Balance		Interest		Average Yield/ Rate
Assets
Loans: (1)(2)
Commercial real estate	$	4,673.2	$	307.6	6.48	%	$	4,326.8	$	272.5	6.30	%	$	3,836.2	$	167.6	4.37	%
Commercial and industrial loans	1,388.6		106.9		7.57		1,455.9		107.9		7.41		1,435.3		74.7		5.20
Residential loans	2,691.2		114.3		4.25		2,512.3		98.1		3.91		1,784.2		63.3		3.55
Consumer loans	423.0		30.3		7.13		518.5		37.8		7.29		556.8		32.1		5.77
Total loans	9,176.0		559.1		6.04		8,813.5		516.3		5.86		7,612.5		337.7		4.44
Investment securities (2)(3)	1,435.7		35.7		2.49		2,186.6		50.8		2.32		2,489.7		51.2		2.06
Short-term investments and loans held for sale (4)	528.7		25.7		4.86		372.4		17.1		4.59		569.1		4.9		0.86
New York branch loans held for sale	26.3		1.5		5.71		—		—		—		—		—		—
Total interest-earning assets	11,166.7		622.0		5.51		11,372.5		584.2		5.14		10,671.3		393.8		3.69
Intangible assets	17.1						21.9						26.8
Other non-interest earning assets (4)	499.3						443.2						518.2
Total assets	$	11,683.1					$	11,837.6					$	11,216.3
Liabilities and shareholders' equity
Deposits:
Non-interest-bearing demand deposits	$	2,283.7	$	—	—	%	$	2,584.6	$	—	—	%	$	2,914.9	$	—	—	%
NOW and other	767.4		11.1		1.45	%	1,048.9		14.9		1.42	%	1,416.7		6.1		0.43	%
Money market	2,993.1		96.8		3.23		2,727.3		65.6		2.40		2,809.1		13.8		0.49
Savings	1,011.8		10.9		1.07		1,067.2		6.1		0.57		1,114.8		0.4		0.03
Certificates of deposit	2,480.2		104.3		4.20		2,275.8		72.4		3.18		1,541.7		13.1		0.85
Total deposits	9,536.2		223.1		2.39		9,703.8		159.0		1.64		9,797.2		33.4		0.34
Borrowings and notes (4)	624.9		34.3		5.42		913.6		48.3		5.29		176.1		9.2		5.24
New York branch non-interest-bearing deposits held for sale	45.4		—		—		—		—		—		—		—		—
New York branch interest-bearing deposits held for sale	181.6		5.0		2.75		—		—		—		—		—		—
Total funding liabilities	10,388.1		262.4		2.52		10,617.4		207.3		1.95		9,973.3		42.6		0.43
Other non-interest-bearing liabilities	250.8						236.3						180.1
Total liabilities	10,638.9						10,853.7						10,153.4
Total shareholders' equity	1,044.2						983.9						1,062.9
Total liabilities and equity	$	11,683.1					$	11,837.6					$	11,216.3
Net interest margin (5)					3.16						3.27						3.26
Supplementary data
Net Interest Income, non FTE	$	351.6					$	369.0					$	344.6
FTE income adjustment	8.0						7.9						6.6
Net Interest Income, FTE	359.6						376.9						351.2

50

_________________________________

Notes:

(1) The average balances of loans include nonaccrual loans, and deferred fees and costs.

(2) The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 27%.

(3) The average balance of investment securities is based on amortized cost.

(4) The average balances of borrowings and notes include the finance lease obligation presented under other liabilities on the consolidated balance sheets.

(5) Purchase accounting accretion totaled $1.3 million, $0.7 million, and $2.0 million for the years-ended December 31, 2024, 2023, and 2022, respectively. The effect of purchase accounting accretion on the net interest margin was an increase in all years, which is shown sequentially as follows beginning with the most recent year and ending with the earliest year: 0.01%, 0.01%, and 0.02%.

51

Rate/Volume Analysis

The following table presents the effects of rate and volume changes on the fully taxable equivalent net interest income. Tax exempt interest revenue is shown on a tax-equivalent basis for proper comparison. For each category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to (1) changes in rate (change in rate multiplied by prior year volume), (2) changes in volume (change in volume multiplied by prior year rate), and (3) changes in volume/rate (change in rate multiplied by change in volume) have been allocated proportionately based on the absolute value of the change due to the rate and the change due to volume. There are no out-of-period adjustments included in the rate/volume analysis in the following table.

Item 7 - Table 2 - Rate Volume Analysis

	2024 Compared with 2023						2023 Compared with 2022
	(Decrease) Increase Due to						(Decrease) Increase Due to
(In thousands)	Rate		Volume		Net		Rate		Volume		Net
Interest income:
Commercial real estate	$	9,222	$	25,933	$	35,155	$	81,238	$	23,568	$	104,806
Commercial and industrial loans	2,872		(3,865)		(993)		32,105		1,086		33,191
Residential loans	8,845		7,261		16,106		6,883		27,931		34,814
Consumer loans	(773)		(6,757)		(7,530)		8,004		(2,329)		5,675
Total loans	20,166		22,572		42,738		128,230		50,256		178,486
Investment securities	3,309		(18,450)		(15,141)		6,239		(6,628)		(389)
Short-term investments and loans held for sale	1,078		7,551		8,629		14,416		(2,244)		12,172
New York branch loans held for sale	—		1,527		1,527		—		—		—
Total interest income	$	24,553	$	13,200	$	37,753	$	148,885	$	41,384	$	190,269
Interest expense:
NOW accounts	$	751	$	(4,500)	$	(3,749)	$	6,380	$	2,324	$	8,704
Money market accounts	25,195		6,039		31,234		59,450		(7,713)		51,737
Savings accounts	4,280		476		4,756		5,299		453		5,752
Certificates of deposit	30,455		1,408		31,863		60,555		(1,271)		59,284
Total deposits	60,681		3,423		64,104		131,684		(6,207)		125,477
Borrowings	2,189		(16,193)		(14,004)		8		39,111		39,119
New York branch interest-bearing deposits	—		4,998		4,998		—		(1,820)		(1,820)
Total interest expense	$	62,870	$	(7,772)	$	55,098	$	131,692	$	32,904	$	164,596
Change in net interest income	$	(38,317)	$	20,972	$	(17,345)	$	17,193	$	8,480	$	25,673

52

NON-GAAP FINANCIAL MEASURES

This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”). These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is provided below. In all cases, it should be understood that non-GAAP measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management excludes when computing non-GAAP operating earnings can be of substantial importance to the Company’s results for any particular quarter or year. The Company’s non-GAAP operating earnings information set forth is not necessarily comparable to non-GAAP information which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company’s GAAP financial information.

The Company utilizes the non-GAAP measure of operating earnings in evaluating operating trends, including components for operating revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations. These items primarily include securities gains/losses, merger costs, and restructuring costs.

In 2024, adjustments were primarily related to the pending merger, branch sales and consolidations, and loss on sale of AFS securities.

In 2023, adjustments were primarily related to branch consolidations, severance charges related to a workforce reduction, and loss on sale of AFS securities. Starting in 2023, fair value adjustments on securities are included in operating income.

In 2022, the restructuring expense adjustment primarily related to the termination of leasehold interests and the write-down of related right of use assets and leasehold improvements in conjunction with branch consolidations and real estate reductions.

The Company calculates certain profitability measures based on its operating revenue, expenses, and earnings. The Company also calculates operating earnings per share based on its measure of adjusted earnings. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to merger and acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company’s performance. Management also believes that the computation of non-GAAP operating earnings and operating earnings per share may facilitate the comparison of the Company to other companies in the financial services industry.

Due to the anticipated earnings volatility resulting from loan loss provisions reflecting changes in estimates of uncertain future economic conditions under the CECL accounting standard, many users of bank financial statements are focusing on Pre-Provision Net Revenue (“PPNR”). This is a measure of revenue less expenses, and is calculated before the loan loss provision and income tax expense. This measure gives clearer visibility of the operations of the company during the periods presented in the income statements, without the impact of period-end estimates of future uncertain events. This measure also enhances comparisons of operations across different banks, which might have significantly different period-end estimates of uncertain future economic conditions that affect the loan loss provision. Consistent with its previous practices measuring results on an adjusted basis before the impacts of acquisitions, divestitures, and other designated items, the Company has introduced the measure of Operating Pre-Provision Net Revenue (“Operating PPNR”) which measures PPNR excluding adjustments for items not viewed as related to ongoing operations. This measure is now integral to the Company’s analysis of its operations, and is not viewed as a substitute for GAAP measures of net income. Analysts also use this measure in assessing the Company’s operations and in making comparisons across banks. The Company and analysts also measure Operating PPNR/Assets in order to utilize the PPNR measure in assessing its comparative operating profitability. This measure primarily relies on the measures of operating revenue and operating expense already used in the Company’s calculation of its efficiency ratio.

The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community.

53

The following table summarizes the reconciliation of non-GAAP items recorded for the time periods indicated:

	At or For the Years Ended
(Dollars in thousands)		December 31, 2024		December 31, 2023		December 31, 2022
GAAP Net income		$	61,003	$	69,598	$	92,533
Non-GAAP measures
Adj: Fair value adjustments on securities (1)		—		—		2,037
Adj: Loss/(gain) on sale of securities		49,937		25,057		(6)
Adj: Net gains on sale of business operations		(16,241)		—		—
Adj: Merger, restructuring, conversion, and other related expenses (2)		9,493		6,261		8,909
Adj: Income taxes		(9,319)		(7,723)		(2,940)
Net non-operating charges		33,870		23,595		8,000
Operating net income (non-GAAP)		$	94,873	$	93,193	$	100,533
GAAP Total revenue from continuing operations		$	400,000	$	411,829	$	413,534
Adj: Fair value adjustments on securities		—		—		2,037
Adj: Loss/(gain) on sale of AFS securities		49,937		25,057		(6)
Adj: Net gains on sale of business operations		(16,241)		—		—
Operating revenue (non-GAAP)		$	433,696	$	436,886	$	415,565
GAAP Total non-interest expense from continuing operations		$	296,486	$	301,508	$	288,716
Less: Total non-operating expense (see above)		(9,493)		(6,261)		(8,909)
Operating non-interest expense (non-GAAP)		$	286,993	$	295,247	$	279,807
Pre-tax, pre-provision net revenue (PPNR)		$	103,514	$	110,321	$	124,818
Operating pre-tax, pre-provision net revenue (PPNR)		146,703		141,639		135,758
(in millions, except per share data)
Total average assets		$	11,683	$	11,838	$	11,216
Total average shareholders' equity		1,044		984		1,063
Total average tangible shareholders' equity		1,027		962		1,036
Total tangible shareholders’ equity, period-end		1,152		993		930
Total tangible assets, period-end		12,258		12,411		11,638
Total common shares outstanding, period-end (thousands)		46,424		43,501		44,361
Average diluted shares outstanding (thousands)		42,761		43,504		45,914
Earnings per share, diluted		$	1.43	$	1.60	$	2.02
Plus: Net adjustments per share, diluted		0.79		0.54		0.17
Operating earnings per share, diluted		2.22		2.14		2.19
Book value per common share, period-end		25.15		23.27		21.51
Tangible book value per common share, period-end		24.82		22.82		20.95
Total shareholders' equity/total assets		9.51		8.14		8.18
Total tangible shareholders' equity/total tangible assets		9.40		8.00		7.99

54

	At or For the Years Ended
(Dollars in thousands)		December 31, 2024		December 31, 2023			December 31, 2022
Performance Ratios (5)
Return on equity		5.84	%	7.07		%	8.70		%
Operating return on equity		9.09		9.47			9.46
Return on tangible common equity (3)		6.27		7.60			9.29
Operating return on tangible common equity (3)		9.56		10.05			10.07
Return on assets		0.52		0.59			0.82
Operating return on assets		0.81		0.79			0.90
Efficiency ratio (4)		63.94		63.88			64.31
Supplementary Data (in thousands)
Tax benefit on tax-credit investments		N/M		$	9,863		$	4,880
Non-interest income charge on tax-credit investments		N/M		(8,018)			(3,508)
Net income on tax-credit investments		N/M		1,845			1,372
Intangible amortization		4,601		4,820			5,134
Fully taxable equivalent income adjustment		7,985		7,870			6,644

____________________________________

(1)Starting in 2023, fair value adjustments on securities are included in operating income.

(2)Merger, restructuring, conversion, and other related expenses included $6.6 million of merger expenses for the year ended December 31, 2024. Merger, restructuring, conversion, and other related expenses included no merger and acquisition expenses for the years ended December 31, 2023 and 2022.

(3)Amortization of intangible assets is adjusted assuming a 27% marginal tax rate.

(4)Efficiency ratio is computed by dividing total core tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total operating non-interest income adjusted to include tax credit benefit of tax shelter investments. The Company uses this non-GAAP measure to provide important information regarding its operational efficiency.

(5)Return on tangible common equity excluding AFS unrealized losses was 5.45%, 6.07%, and 8.26% for the years ended December 31, 2024, 2023, and 2022, respectively. Operating return on tangible common equity excluding AFS unrealized losses was 8.32%, 8.03%, and 8.94% for the years ended December 31, 2024, 2023, and 2022, respectively.

55

GENERAL

This discussion is intended to assist readers in understanding the financial condition and results of operations of the Company, the changes in key items in the Company’s Consolidated Financial Statements (“financial statements”) from year to year, and the primary reasons for those changes.

The objectives of this section are:

•To provide a narrative explanation of the Company’s financial statements that enables investors to see the company through the eyes of management;

•To enhance the financial disclosure and provide the context within which financial information should be analyzed; and

•To provide information about the quality of, and potential future variability of, the Company’s earnings and cash flow.

This discussion includes the following sections:

•Summary

•Comparison of Operating Results for the Years Ended December 31, 2024 and 2023

•Comparison of Financial Condition at December 31, 2024 and 2023

•Liquidity and Cash Flows

•Capital Resources

•Application of Critical Accounting Policies

•Enterprise Risk Management

•Corporate Responsibility and Sustainability

The following discussion and analysis should be read in conjunction with the Company’s financial statements and the notes thereto appearing in Item 8 of this document. In the following discussion, income statement comparisons are against the previous year and balance sheet comparisons are against the previous fiscal year-end, unless otherwise noted. Operating results discussed herein are not necessarily indicative of the results for the year 2025 or any future period. In management’s discussion and analysis of financial condition and results of operations, certain reclassifications have been made to make prior periods comparable. Tax-equivalent adjustments are the result of increasing income from tax-advantaged loans and securities by an amount equal to the taxes that would be paid if the income were fully taxable based on a 27% marginal rate (including state income taxes net of federal benefit). In the discussion, unless otherwise specified, references to earnings per share and "EPS" refer to diluted earnings per common share.

Berkshire is a Delaware corporation headquartered in Boston and the holding company for the Bank. Established in 1846, the Bank operates as a commercial bank under a Massachusetts trust company charter. On December 16, 2024, the Company entered into a definitive agreement for a merger of equals with Brookline Bancorp, Inc., a Boston-based multi-bank holding company with $11.9 billion in assets and branches in Massachusetts, Rhode Island, and New York. This merger is targeted to be completed in the second half of 2025, subject to customary shareholder and regulatory approvals, and closing conditions.

56

SUMMARY

Berkshire reported 2024 net income of $61 million, or $1.43 per share, compared to $70 million, or $1.60 per share, in 2023. The decrease in 2024 was due primarily to higher non-operating losses on the sale of securities.

The Company’s non-GAAP measure of operating income totaled $95 million, or $2.22 per share in 2024, compared to $93 million, or $2.14 per share in 2023. The 4% increase in operating EPS included the benefit of lower credit loss provision expense and lower non-interest expense, together with a 2% reduction in average diluted shares due to ongoing share repurchases.

Berkshire’s 2024 return on assets was 0.52%; the operating return on assets was 0.81%. The return on tangible common equity was 6.3%; the operating return on tangible common equity was 9.6%. The efficiency ratio measured 63.9%. The 2024 shareholder dividend was $0.72 per share in 2024. Period-end book value per share increased 8% to $25.15 and the non-GAAP measure of tangible equity to tangible assets increased 9% to $24.82 for the year.

Operating income and profitability improved sequentially in every quarter of the year, reflecting the cumulative benefit of the Company’s ongoing growth initiatives together with strategic optimization programs. Results also benefited from strong credit discipline, rigorous expense management, investments in new client-facing bankers and enhancements to the digital platform and consumer product offerings. Strategic initiatives included:

•Network Optimization: The Company consolidated four branches in 2023 and three branches in 2024, and additionally exited surplus back-office premises. Staff count was reduced through a workforce realignment in the first half of 2024. The sale of ten New York branches was completed in the third quarter of 2024. The sale concentrated the Bank’s overall geographic footprint and reduced certain expenses. With the branch sale and consolidations, Berkshire’s total branch count was reduced to 83 offices in New England and New York, including 16 offices in its Albany and Rome/Utica markets.

•Sales of Securities: Investment securities were sold in the fourth quarter of 2023 and first quarter of 2024. This allowed the Company to reposition its balance sheet to improve net interest income and to fund the branch sale. The securities were carried at fair value on the Company’s balance sheet and the non-operating losses on sale therefore had no effect on shareholders’ equity.

•Sales of Targeted Loan Portfolios: The Company sold most of its remaining Upstart consumer loan portfolio, which was in run-off mode. In addition to this, the Company also sold a package of $47 million of seasoned residential mortgages.

•Growth Initiatives: During 2024, the Company announced the recruitment of commercial deposit relationship managers and private bankers. Additionally, it announced the planned move and expansion of a Boston branch to bolster its commercial and private banking teams serving the Greater Boston market.

•Digital Enhancements: In the third quarter, the Bank launched Berkshire One, its innovative suite of digital-first banking solutions to complement its branch and concierge banking channels.

Including the impact of branch and loan sales, in 2024 the Company recorded 4% loan growth and a 2% deposit decrease. Excluding the impact of these sales, Berkshire produced 5% loan growth and 1% deposit growth in 2024.

Measures of asset quality remained favorable in 2024. Delinquent and non-performing loans were 0.52% of total period-end loans; this was the lowest quarterly level in nearly two decades. Net loan charge-offs measured 0.16% of average total loans in 2024, compared to 0.26% in the prior year.

Liquidity remained satisfactory in 2024, with the year-end loans to deposits ratio measuring 90% in 2024 compared to 85% in 2023. Total shareholders’ equity increased by $155 million, or 15%, to $1.2 billion during the year, including the proceeds of a $100 million common stock placement in December in conjunction with the merger agreement. The common equity Tier 1 capital ratio stood at 13.0% at year-end 2024.

In response to persistent high inflation, the Federal Reserve Board increased the maximum target federal funds rate beginning in the first quarter of 2022. The rate increased from 0.25% in the first quarter of 2022 to 5.50% in the third quarter of 2023, increasing in each sequential quarter. The target rate remained unchanged until September

57

2024 and then was reduced by 1.00% in three steps to 4.50% at year-end. Some of the Bank’s loans are indexed to market rates and are the most immediately sensitive to rate changes. The upward move in federal funds in 2022 and 2023 contributed to inversion of the yield curve, which can negatively impact the net interest margin. This inversion began to correct in the second half of 2024, bringing more positive slope to portions of the yield curve.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023

GAAP net income decreased $9 million, or 12%, year-over-year to $61 million in 2024 from $70 million in 2023. This was primarily due to a $25 million increase in non-operating securities losses offset in part by $16 million in non-operating gains on branch sales.

Berkshire improved operating profitability in 2024, with consecutive quarter-over-quarter improvement in operating results throughout the year. The non-GAAP measure of operating income increased $2 million, or 2%, to $95 million in 2024 from $93 million in 2023. A $17 million decrease in net interest income was mostly offset by an $8 million decrease in credit loss provision expense and an $8 million decrease in operating non-interest expense. The additional benefit of a $3 million increase in loan and SBA related revenue contributed to the $2 million increase in total operating income.

Effective January 1, 2024, the Company elected the proportional amortization method for its tax credit equity investments in public welfare investment projects which consist of Affordable Housing and New Market tax credit investments. This election had no material impact on net income. As a result of this election, certain noncash charges which had been posted to non-interest income are now posted to income tax expense. Therefore, non-interest income, total revenue, and tax expense are not comparable on a year-over-year basis. The amount charged against non-interest income in 2023 was $8.0 million compared to $2.5 million credited to non-interest income in 2024.

Year-to-year comparisons of revenue and expense were also impacted by the sale of ten branches toward the end of the third quarter and the sale of investment securities and reinvestment of proceeds into short-term investments in the first quarter to help fund the branch sale. The fourth quarter of 2024 was the first full quarter subsequent to completion of the branch sale.

Due to the change in tax accounting, the efficiency ratio was unchanged at 63.9% in both years. Excluding the impact of tax credits in 2023, the adjusted efficiency ratio was 65.3% in 2023. The improvement in 2024 compared to this adjusted ratio included the benefit of reinvestments of proceeds from securities sales and the reduction in operating expenses in 2024.

Net Interest Income

Net interest income and net interest margin may be affected by many factors, including: changes in average balances; interest rate fluctuations and the slope of the yield curve; sales of loans and securities; residential mortgage loan and mortgage-backed security prepayment rates; product pricing; competitive forces; the relative mix, repricing characteristics and maturity of interest-earning assets and interest-bearing liabilities; non-interest-bearing sources of funds; hedging activities; and asset quality.

Net interest income decreased in 2024 by $17 million, or 5%, to $352 million. The net interest margin decreased by 11 basis points, or 3%, to 316 basis points in 2024 from 327 basis points in 2023. Average earning assets decreased by $0.2 billion, or 2%, to $11.2 billion. The decrease in average earning assets was primarily due to the sale of lower yielding investment securities to fund the branch sales and to pay down higher cost borrowings.

The 11 basis point decrease in the net interest margin was primarily due to the 57 basis point increase in the cost of funds, partially offset by the 37 basis point increase in the yield on earning assets. These changes resulted from the ongoing impact of repricings following federal funds rate increases in the period from January 2022 to July 2024.

The increase in the cost of funds was driven by the 75 basis point increase in the cost of deposits. This reflected ongoing repricings in the higher rate and competitive market conditions, and mix shifts from lower cost transaction accounts into higher cost money market and time deposit accounts.

58

The increase in the yield on earning assets was primarily due to a mix shift from lower yield investment securities to higher yielding loans and short term investments. The loan yield increased 18 basis points as a result of upward repricings of loans.

The net interest margin decreased sequentially on a quarterly basis in 2023, from 3.84% in the fourth quarter of 2022 to 3.11% in the fourth quarter of 2023. This primarily reflected deposit repricings catching up with loan repricings in 2022. It improved to 3.20% in the second quarter of 2024, including the benefit of securities sales and related balance sheet changes. The margin declined to 3.14% in the fourth quarter of 2024 as loan repricings adjusted quickly to the 100 basis reduction in the federal funds rate beginning in September. The margin measured 3.18% in December 2024, as deposit repricings began to accelerate. For the full year 2024, the net interest margin averaged 3.16%, down from 3.27% in 2023 due primarily to deposit repricings in the higher rate and competitive marketplace.

Non-Interest Income

Non-interest income was $48 million in 2024 and $43 million in 2023. As previously noted, due to the tax accounting methodology change, total non-interest income is not comparable between these years. This change is included in the category of other non-interest income, which increased by $12 million. Operating results benefited from a $3 million increase in revenues from loan related fees and gains on SBA loans. Non-interest income in 2024 included the $16 million gain on the branch sale and the $50 million loss on the first quarter sale of securities. In 2023, non-interest income included the $25 million loss on the fourth quarter sale of securities. The securities losses had no impact on total shareholders’ equity. These gains and losses are viewed by the Company as non-operating.

Provision for Credit Losses

Provision expense decreased year-over-year by $8 million, or 25%, to $24 million from $32 million. In part, this reflected a decrease in loan growth to 4% in 2024 from 8% in 2023. Additionally, it reflected an increase in the coverage ratio of the allowance for credit losses on loans to 1.22% at year-end 2024 compared to 1.17% at the prior year-end. Net loan charge-offs totaled $15 million in 2024 compared to $23 million in the prior year.

Non-Interest Expense

Non-interest expense decreased year-over year by $5 million, or 2%, to $296 million. The non-GAAP measure of operating non-interest expense decreased by $8 million, or 3%, to $287 million. This primarily reflected lower operating expenses due to branch sales and consolidations. Non-operating expenses of $9 million in 2024 and $6 million in 2023 included branch and facilities consolidations in both years, and 2024 expenses related to the pending merger.

The largest decrease in operating expense was occupancy and equipment expense, which decreased $4 million or 12%. This included the impact of four branch consolidations in 2023, three branch consolidations in 2024, and ten branches sold in 2024, together with dispositions of other excess properties. Of note, the sales of eight of the branches sold were completed near the end of the third quarter of 2024. All major categories of operating expenses declined year-over-year except for regulatory expense and compensation expense. The Company is focused on efficiencies to reduce overhead and to deepen its investment in frontline staff and customer engagement technology. Full year compensation expense increased 1% year-over-year. Fourth quarter compensation expense decreased 3% year-over-year. Year-end full time equivalent staff totaled 1,216 positions in 2024, a decrease of 124 positions, or 9%, from 1,340 positions at year-end 2023. This decrease included 40 positions which were transferred in the branch sale. All staff related to the ten branches sold were offered employment by the branch buyers. FTE staff was also reduced based on a workforce realignment in the first quarter of the year.

Income Tax Expense

As previously noted, income tax expense in 2024 is not comparable to 2023 and prior years due to the change in the accounting method for certain equity tax credit investments. In 2024, the effective income tax rate was 23%. Differences arising between Berkshire’s effective income tax rate and the U.S. federal statutory rate of 21% are primarily attributable to: (i) tax-exempt interest earned on certain investments; (ii) tax-exempt income from BOLI; (iii) non-deductible merger costs; and (iv) state income taxes.

59

COMPARISON OF FINANCIAL CONDITION AT DECEMBER 31, 2024 AND DECEMBER 31, 2023

General

Total assets decreased $0.2 billion, or 1%, to $12.3 billion in 2024. A $0.4 billion decrease in investment securities primarily funded the $0.4 billion sale of deposits. Loan growth of $0.2 billion from business activities was primarily funded by deposit growth from business activities. A $100 million common stock issuance offset a decrease in borrowings. With the stock offering and reduction in assets, the ratio of equity to assets increased to 9.5% from 8.1%. Primarily as a result of the deposit sale, the ratio of loans/deposits increased to 90% from 85%

Investment Securities

Investment securities decreased $419 million, or 26%, to $1.2 billion during 2024. This was primarily due to the sale of lower yielding securities near the end of the first quarter. This improved the Company’s liquidity in advance of the branch sale and benefited earnings as the sale proceeds were used to pay down higher cost funds. The yield on the securities portfolio was 2.66% in the fourth quarter of 2024 compared to 2.40% in the fourth quarter of 2023, reflecting the sale of lower coupon securities and the benefit of higher interest rates in the second half of 2024. The unrealized loss on available for sale securities decreased by $47 million in 2024 to $142 million at year-end 2024 due to the $50 million loss realized on the sale of securities in the first quarter.

Loans

Total loans increased $345 million, or 4%, to $9.4 billion in 2024, including commercial loan growth totaling $433 million, or 7%, which was partially offset by a $99 million, or 22%, reduction in consumer loans. During the year, the Company sold $47 million in seasoned residential mortgages and $47 million in consumer loans. Additionally, the Company sold $50 million in residential mortgage and consumer loans as part of the branch sale. Adjusted for these loans sold, total loans increased 5% for the year 2024. The yield on total loans was 5.88% in the most recent quarter, compared to 5.97% in the final quarter of 2023. At year-end 2024, loans repricing within three months were 43% of total loans.

Year-end commercial loans were 67% of total loans at year-end 2024 compared to 65% in 2023. Commercial loan growth was recorded in all major categories of commercial loans, including a 13% increase in construction loans and an 11% increase in owner-occupied commercial real estate loans. Based on the supervisory definition of commercial real estate loans which excludes owner-occupied properties, the supervisory measure of commercial real estate loans to total bank regulatory capital measured 292% at period-end, compared to 286% at year-end 2023. The supervisory measure of construction loans to bank regulatory capital measured 54% and 51% at the above respective dates.

The Company has a diversified commercial real estate portfolio primarily located in suburban markets in its footprint. The commercial real estate loan portfolio increased $353 million, or 8%, to $4.8 million in 2024, and constituted 51% of the total loan portfolio at period-end. There were $1.2 million in net charge-offs of commercial real estate loans in 2024, compared to net recoveries of $0.8 million in 2023. Non-accruing loans were 0.22% of total commercial real estate loans at period-end compared to 0.10% at year-end 2023. For commercial real estate loans, year-end loans rated as criticized increased to 2.93% from 2.44% while loans rated as classified decreased to 1.19% from 1.94% of total loans.

At period-end, the largest property type concentrations (over 5% of the portfolio and excluding construction loans) were retail trade (21%), multifamily (13%), office (10%), healthcare (9%), and hospitality (7%). The largest category, retail trade, was primarily comprised of properties anchored by strong grocery and big box tenants in suburban areas – with no significant tenant concentrations, and negligible indoor mall exposure. The $507 million office portfolio was approximately 71% composed of Class A properties and approximately 79% of the office portfolio was maturing after 2025. Boston properties were approximately 16% of the office portfolio, with no high-rise office buildings. Construction loans consisted primarily of multifamily (approximately 49%) and health care (approximately 13%) at period-end.

60

Residential mortgage loans comprised 30% of year-end 2024 loans and were up $11 million to $2.8 billion during the year. Consumer loans comprised 4% of loans and decreased 22% to $0.3 billion during the year. This was largely due to targeted run-off and sales of unsecured consumer installment loans.

Allowance for Credit Losses on Loans

Loan performance indicators remained at historically favorable levels in 2024. Total delinquent and non-performing loans measured 0.52% of loans at period-end, the lowest level in nearly two decades. It included non-performing loans measuring 0.26% of total loans at that date.

Net loan charge-offs totaled $15 million, measuring 0.16% of average loans in 2024 and totaled $23 million, measuring 0.26% of average loans in 2023. Consumer loan net charge-offs totaled $9 million in 2024 and $8 million in 2023. Excluding consumer loans, charge-offs of all other loans totaled $5 million and $14 million, measuring 0.06% and 0.17% of all other average loans in those respective years.

Year-end criticized loans/total loans decreased to 2.62% of total loans from in 2024 from 2.71% in 2023, including a reduction in classified loans to 1.20% of loans from 1.69%. Potential problems loans, which are defined as accruing classified loans, decreased to $88 million from $132 million. Improvements in borrower risk ratings have generally reflected borrowers adjusting operations to mitigate the impact of higher interest rates on variable rate loans and to the impact of changing supply/demand conditions.

The allowance for credit losses on loans increased by $9 million, or 9%, to $115 million during 2024. In addition to reflecting the 4% loan growth, this also reflected an increase in the ratio of the allowance to total loans to 1.22% from 1.17%. The increase in reserve coverage reflected increases in all major loan categories except non-owner occupied commercial real estate and other consumer loans. Regarding the former, coverage decreased to 1.39% from 1.47%. Regarding other consumer loans, coverage decreased to 5.11% from 5.46% and the total other consumer allowance decreased by $6 million to $3 million primarily as a result of the sale of Upstart loans. The remaining Upstart loan balance was $7.5 million at year-end 2024. The major contributor to the increase in the total allowance was the commercial and industrial loan portfolio, which accounted for $13 million, or 53%, of the total $24 million credit loss provision expense in 2024. Reflecting higher net loan losses of $6 million in this portfolio, the year-end allowance coverage of these loans was 1.78% at year-end 2024 compared to 1.37% at year-end 2023. Factors contributing to higher coverage in most portfolios included longer expected loan lives and increased qualitative reserves related to macroeconomic and federal policy uncertainties.

Deposits and Borrowings

For the year 2024, total deposits decreased by $258 million, or 2%, to $10.4 billion. This included the sale of $383 million in deposits due to the sale of ten branches in the third quarter. Average deposits in the fourth quarter of 2024 were $9.7 billion, decreasing $277 million, or 3%, from the same quarter of 2023 due to lower average transaction account balances. Excluding the deposits sold, average fourth quarter deposits increased $106 million, or 1%, year-over-year. In recent years, year-end balances included higher overnight balances related to the Company’s payroll deposit service.

The branch sale included $383 million in deposits, consisting of $77 million of non-interest bearing deposits, $25 million of NOW deposits, $77 million of money market deposits, $45 million of savings deposits, and $159 million of time deposits.

Fourth quarter average non-interest bearing deposits were 24% of average deposits in 2024 compared to 25% in 2023. All major categories of average deposits decreased between these two periods, primarily in transaction deposits. The fourth quarter cost of deposits was 2.30% in 2024 compared to 2.11% in 2023. The fourth quarter of 2024 marked the first decline in the cost of deposits since the first quarter of 2022, reflecting market changes following the reduction in the federal funds rate and other market interest rates beginning in the third quarter of 2024.

Total borrowings decreased year-over year by $68 million, or 14%, to $438 million at year-end 2024. The fourth quarter cost of borrowings was 5.20% in 2024 compared to 5.45% in 2023.

61

Derivative Financial Instruments

The notional amount of derivative financial instruments totaled $4.9 billion at period-end, compared to $4.8 billion at year-end 2023. The net fair value of these instruments at period-end was a liability of $31 million, compared to $30 million at year-end 2023. Included in derivative financial instruments are $800 million in cash flow hedges on commercial loans, of which $275 million mature in 2025, $425 million mature in 2026, and $100 million mature in 2027. The Company recorded a $632 thousand charge to interest expense for the realized loss on cash flow hedging instruments in both 2024 and 2023.

Shareholders’ Equity and Dividends

Total shareholders' equity increased $155 million, or 15%, to $1.2 billion in 2024. This included the benefit of the $100 million common stock placement in December 2024. Equity also benefited from operating income of $95 million and was reduced by $31 million in dividends declared and $18 million in stock repurchases. The $50 million loss on securities recorded in the first quarter of 2024 had no impact on shareholders’ equity, as the after-tax impact on retained earnings was offset by a reduction in the accumulated other comprehensive loss component of equity.

Book value per share increased in 2024 by $1.88, or 8%, to $25.15 at year-end 2024 compared to $23.27 at year-end 2023. The non-GAAP measure of tangible book value per share increased by $2.00, or 9%, to $24.82 from $22.82. Share repurchases in 2024 were accretive to book value measures, based on the average repurchase price of approximately $21.94. The share issuance in December was priced at $29.00 per share.

Reflecting primarily the increase in equity, the year-end ratio of equity to assets increased to 9.5% from 8.1% and the non-GAAP measure of tangible common equity to tangible assets increased to 9.4% from 8.0%. The common equity Tier 1 capital ratio increased to 13.0% from 12.0%.

LIQUIDITY AND CASH FLOWS

Liquidity is defined as the ability to generate sufficient cash flows to meet all present and future funding requirements at reasonable costs for the Company, including the Bank. Liquidity management addresses both the Company’s ability to fund new loans and investments pursuant to commitments and as opportunities arise, to meet customer deposit withdrawals and to repay borrowings and subordinated notes as they mature. The Company views its liquidity as satisfactory for current conditions as well as for stressed scenarios in its liquidity testing models.

At year-end 2024, liquid assets totaling $1.8 billion included cash and equivalents totaling $1.1 billion and securities available for sale totaling $0.7 billion. At year-end 2023 liquid assets were $2.2 billion, including $1.2 billion in cash and equivalents and $1.0 billion in securities available for sale. Year-end liquidity is elevated due to overnight payroll related deposit balances. Securities include assets pledged to support borrowings.

At year-end 2024 wholesale funds, consisting of borrowings and brokered deposits, totaled $0.9 billion, compared to $1.0 billion at year-end 2023.

Unused borrowing availability at period-end from the Federal Home Loan Bank of Boston “FHLBB” and the Federal Reserve Bank of Boston (“FRB”) totaled $4.1 billion at year-end 2024, compared to $4.0 billion at year-end 2023. Borrowings from these sources are supported by collateral, to the extent utilized. Cash balances at the holding company totaled $164 million at period-end.

During 2024, total cash and equivalents decreased to $1.1 billion from $1.2 billion. The primary sources of funds were securities sales, together with operating activities and the stock issuance. The primary uses of funds were the branch sale and loan growth.

CAPITAL RESOURCES

Please see the Note 17 - Shareholders’ Equity and Earnings per Common Share of the Comparison of Financial Condition for a discussion of shareholders’ equity together with the note on Shareholders' Equity in the consolidated financial statements.

62

Additional information about capital resources and regulatory capital is contained in the notes to the consolidated financial statements and in Item 1 of this report.

The Company’s goal is to maintain sound capitalization and use capital generation to support organic growth and shareholder distributions in the form of dividends and stock repurchases. The Company’s goal is to maintain a “well-capitalized” regulatory designation under projected and stressed financial projections.

As a result of rising interest rates, available for sale bond portfolios in banks are generally subject to unrealized losses which result in charges against accumulated other comprehensive income (“AOCI”) and reduce the book value of shareholders’ equity. Like many of its peers, the Company utilizes an option in reporting its regulatory equity which excludes changes in AOCI in the calculation of regulatory capital. Reductions in bond valuations due to changes in market interest rates are reversed as bonds approach maturity. These reversals are accreted to AOCI over time, restoring the book value of equity. The balance of AOCI was a loss of $106 million at period-end, compared to a loss of $143 million at year-end 2023. This reduction was primarily due to the after-tax realization of $50 million in losses with the securities sale in the first quarter of 2024.

While the Company monitors the book value of equity and related metrics, it primarily manages capital based on regulatory capital measures, with a focus on the common equity Tier 1 capital ratio. This ratio measured 13.0% at year-end 2024 compared to 12.0% at year-end 2023. This improvement included the benefit of the $100 million capital placement in December 2024.

In acting as a source of strength for the Bank, the Company relies in the long term on capital distributions from the Bank in order to provide operating and capital service for the Company, which in turn can access national financial markets to provide financial support to the Bank. Capital distributions from the Bank to the parent company presently require approval by the FDIC.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The Company’s significant accounting policies and modifications to significant accounting policies made during the year are described in Note 1 to the financial statements. The preparation of the financial statements is in accordance with GAAP and general practices applicable to the financial services industry. This preparation requires management to make estimates, assumptions, and judgements that affect the amounts reported in the financial statements and accompanying notes. The judgment and assumptions made are based upon historical experience, future forecasts, or other factors that management believes to be reasonable under the circumstances. Actual results could differ from those estimates, assumptions, and judgements.

Not all significant accounting policies require management to make difficult, subjective or complex judgments. Certain estimates inherently have a greater reliance on the use of assumptions and judgments and, as such, have a greater possibility of producing results that could be materially different than originally reported. The following significant accounting policies are considered most critical in that they are important to the Company’s financial condition and results, and they require management’s subjective and complex judgment as a result of the need to make estimates about the effects of matters that are inherently uncertain. Both of these most critical accounting policies were significant in determining income and financial condition based on events in 2024.

63

Allowance for Credit Losses on Loans

The allowance for credit losses on loans (“ACLL”) represents management’s estimate of expected credit losses over the expected contractual life of our loan portfolio. Determining the appropriateness of the ACLL is complex and requires judgment by management about the effect of matters that are inherently uncertain. Subsequent evaluations of the then-existing loan portfolio, in light of the factors then prevailing, may result in significant changes in the ACLL in those future periods.

The estimate of expected credit losses is based on relevant information about current conditions, past events, and reasonable and supportable forward-looking forecasts regarding collectability of the reported amounts. In order to estimate the expected credit losses for loans evaluated on a pooled basis, the Company utilizes a static pool migration methodology which calculates a historical loss rate for each of the identified loan segments. The historical loss rates are then adjusted for current and asset specific characteristics (also referred to as qualitative adjustments) and for expected changes to current conditions over the reasonable and supportable forecast period (also referred to as forecast). The appropriateness of the ACLL could change significantly because current economic conditions and forecasts can change and future events are inherently difficult to predict. It is difficult to estimate how potential changes in any one economic factor or input might affect the overall allowance because a wide variety of factors and inputs are considered in estimating the allowance and changes in those factors and inputs considered may not occur at the same rate and may not be consistent across all product types. Additionally, changes in factors and inputs may be directionally inconsistent, such that improvement in one factor may offset deterioration in others. One of the most significant judgments used in determining the allowance for credit losses is the macroeconomic forecast provided by a third party. Changes in the macroeconomic forecast, especially for the national unemployment rate, could significantly impact the calculated estimated credit losses.

While management utilizes its best judgment and information available, the ultimate adequacy of our ACLL is dependent upon a variety of factors beyond our control, including the performance of our portfolios, the economy, and changes in interest rates. For detailed information on the ACLL see Note 1- Summary of Significant Accounting Policies and Note 5 – Loans and Related Allowance for Credit Losses.

Fair Value Measurements

The Company uses fair value measurements to determine fair value disclosures and to record fair value adjustments to certain assets and liabilities, such as interest rate swaps, individually evaluated loans, securities available for sale, and derivatives. Our fair values are based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Additionally, from time to time, the Company may be required to record certain assets at fair value on a non-recurring basis, such as certain individually evaluated loans held for investment and capitalized servicing rights. These non-recurring fair value adjustments typically involve write-downs of individual assets due to application of lower-of-cost or market accounting or other accounting standards.

Management has established and documented a process for determining fair value. The use of observable inputs is maximized and the use of unobservable inputs is minimized when developing fair value measurements. Whenever there is no readily available market data, management uses its best estimate and assumptions in determining fair value, but these estimates involve inherent uncertainties and the application of management’s judgment. As a result, if other assumptions had been used, our recorded earnings or disclosures could have been materially different from those reflected in these financial statements. For detailed information on our use of fair value measurements and our related valuation methodologies, see Note 1 – Summary of Significant Accounting Policies and Note 19 – Fair Value Measurements for more information.

64

ENTERPRISE RISK MANAGEMENT

Other sections of this report on Form 10-K include discussion of market risk and risk factors. Risk management is overseen by the Company’s Chief Risk Officer, who reports directly to the CEO. This position oversees risk management, credit, loan review, compliance, data governance, and information security. Enterprise risk assessments are brought to the Company’s Enterprise Risk Management Committee, and then are reported to the Board’s Risk Management, Capital & Compliance Committee.

The Company includes recessionary/inflationary risk overlays on all of the material business risks to capture the uncertainties of the economic environment. The Company has also developed recession toolkits and playbooks that outline mitigating factors and actions that strive to minimize losses under such scenarios. Both of these items are addressed throughout the assessments and dashboards provided to the above Committees.

The high level corporate risk assessment focuses on the following material business risks: credit risk, interest rate risk, price risk, liquidity risk, operational risk, compliance risk, strategic risk, and reputation risk, with the credit risk category having the highest weighting. For all material business risks, residual risk was viewed as medium/low to medium due to mitigating controls functioning in the Company. In 2024, price risk remained elevated in relation to the corporate appetite due to the impact of higher interest rates on the behavior and value of various interest sensitive instruments. Residual price risk was viewed as medium including the impact of mitigating factors and management actions in the risk management environment. Emerging risks affecting business risks included merger execution risk, fraud risk due to rising thefts targeting electronic platforms, and IT and cyber risks due to rising external threats and the emergence of artificial intelligence technology.

CORPORATE RESPONSIBILITY & SUSTAINABILITY

The Company’s longstanding commitment to operating responsibly and sustainably is interwoven into the company’s vision, mission, business practices, and strategic goals. Berkshire’s integrated approach to strong governance and managing environmental and social externalities helps reduce risk and unlock new business opportunities to create an ecosystem of positive impact and value, which in turn supports Berkshire’s commercial performance, creating capacity to invest more in its business, employees, customers, shareholders and communities.

The Company maintains a comprehensive governance system to oversee sustainability matters including a dedicated committee of its Board of Directors and a dedicated management committee, along with a network of policies including its Responsible & Sustainable Business Policy and Climate Risk Management Program. Berkshire was one of the first banks in the country to establish a dedicated committee of its Board of Directors to oversee these matters and became the first public U.S. community bank holding company with under $150 billion in assets to issue and successfully allocate a Sustainability Bond with a $100 million issuance.

Berkshire remains a leader among community banks in sustainability performance and regularly engages directly with its stakeholders to share information about its progress. The Company’s annual Sustainability Report, which is aligned with disclosure standards from Sustainability Accounting Standards Board (“SASB”) and Task Force on Climate-Related Financial Disclosure ("TCFD"), detail the Company's programs and performance.

Climate Impact

Climate change manifesting in the form of both physical or transition risks along with the Company’s mitigating practices could adversely, either directly or indirectly, affect Berkshire’s operations, businesses, customers, communities, and its stakeholders. As the transition to a low-carbon economy continues, new policy emerges, and market dynamics shift, Berkshire expects that its efforts to manage its environmental footprint, mitigate the risks associated with climate change, and support the transition will allow it to strengthen its long-term positioning. The Company’s Board of Directors Corporate Responsibility & Culture Committee provides oversight of sustainability and climate matters. Management and the board evaluate climate related risks and opportunities and incorporate the results of risk assessments and discussions into strategic planning, product development, programming and relevant risk mitigating measures. The Company expects to evolve its practices to align with risks, current and expected regulations as well as the size, scope, and complexity of its operations. Further details on Berkshire’s practices can be found in its most recent Sustainability Report.

65

Opportunity for All

Maintaining an inclusive workplace is essential to business success and an important enabler to advancing the Company’s strategic goals. By embracing and leveraging diverse backgrounds, cultures, skills, ideas and experiences, Berkshire is driving innovation, better decision-making and enhancing the bank’s ability to serve the evolving needs of its customers and communities. Berkshire remains committed to creating a culture of inclusivity in its workplace where every employee feels respected, valued and empowered to contribute their unique talents to the Company’s success.

Berkshire seeks to attract, engage and retain individuals, businesses and suppliers from a wide range of backgrounds, and experiences so that the workforce, clients and supplier base reflect the communities in which it operates. The Company approaches its efforts with strong governance practices, provides professional development for its employees, engages with its communities and offers employee resource groups, all aimed at ensuring accessibility and opportunity for all.

Awards & Recognition

Berkshire is proud to be recognized for its performance with local, regional, national, and international awards including:

•American Bankers Association Community Commitment Award

•America’s Most Trustworthy Companies – Newsweek

•America’s Best Regional Banks – Newsweek

•America’s Greatest Workplaces – Newsweek

•America’s Best Mid-Size Companies – TIME

•Communitas Award for Leadership in Corporate Social Responsibility

•Boston Business Journal Top Charitable Contributor

•Human Rights Campaign Equality 100

66

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss to earnings, capital and the economic values of certain assets and liabilities resulting from changes in interest rates and equity prices. The only significant market risk exposure for the Company is Interest Rate Risk (“IRR”). This is a result of the Company’s core business activities of making loans and accepting deposits, as well as investments and funding activities.

The effective management of IRR is essential to achieving the Company’s financial objectives. This responsibility resides with the Asset Liability Committee (“ALCO”). The ALCO’s role is to establish an effective asset/liability decision-making process to aid in managing risk exposures and achieving strategic objectives and corporate financial goals. The Company manages IRR by using two primary risk measurement techniques: simulation of net interest income and simulation of economic value of equity. These two measurements are complementary and provide both short-term and long-term risk profiles of the Company.

Net Interest Income (“NII”) at Risk Simulation is used to measure the sensitivity of net interest income to changes in market rates over a 12 month period assuming a static balance sheet. This simulation captures underlying product behaviors, such as asset and liability repricing dates, balloon dates, interest rate indices and spreads, rate caps and floors, as well as other behavioral attributes. The simulation of net interest income also requires a number of key assumptions such as (i) prepayment projections for loans and securities; (ii) new business loan spreads; and (iii) deposit pricing assumptions. Combined, these assumptions can be inherently uncertain, and as a result, actual results may differ from simulation forecasts due to the timing, magnitude and frequency of interest rate changes, future business conditions, as well as unanticipated changes in management strategies.

The Company uses two sets of standard scenarios to measure NII Sensitivity. Parallel shock scenarios assume instantaneous parallel movements in the yield curve compared to a flat yield curve scenario, while twist scenarios assume the shape of the curve flattens or steepens instantaneously.

The following tables set forth the estimated percent change in the Company’s NII Sensitivity compared to the flat rate scenario over one-year simulation periods beginning December 31, 2024 and December 31, 2023.

67

ITEM 7 - 7A TABLE 3 - QUALITATIVE ASPECTS OF MARKET RISK

Parallel Interest Rate Shock (basis points)
	Estimated Percent Change in Net Interest Income
	December 31, 2024		December 31, 2023
+200	2.2	%	0.5	%
+100	1.2		0.3
-100	(1.4)		(0.6)
-200	(2.9)		(2.1)
Yield Curve Twist Interest Rate Shock	December 31, 2024		December 31, 2023
Short End +100	(0.4)	%	(0.5)	%
Short End -100	0.3		(0.5)
Long End +100	1.6		1.1
Long End -100	(1.7)		(1.1)

The Company’s NII sensitivity results at period-end were mostly little changed from the start of the year, with modest asset sensitivity in parallel shock simulations. The slight increase in asset sensitivity year-over-year was due to the impact of the December 2024 $100 million equity raise along with the approaching maturities of some fixed rate hedges in 2025.

Yield curve twist simulations were mostly little changed from the prior year-end, with slight liability sensitivity in the short end of the yield curve and modest asset sensitivity on the long end. In the situation of a normalization of the yield curve to a positive slope due to both lower short-term rates and higher long-term rates, the result is modeled to be positive to net interest income in the framework of a static balance sheet.

Economic Value of Equity ("EVE") Sensitivity is conducted to ascertain a longer-term view of the Company’s exposure to changes in interest rates. As with NII modeling, EVE Sensitivity captures product characteristics such as loan resets, repricing terms, maturity and amortization dates, rate caps and floors. Key assumptions include loan prepayment speeds, deposit pricing elasticity and non-maturity deposit attrition rates. These assumptions can have significant impacts on valuation results as the assumptions remain in effect for the entire life of each asset and liability. All key assumptions are subject to periodic review.

Base case EVE Sensitivity is calculated by estimating the net present value of all future cash flows from existing assets and liabilities using current interest rates. The current spot interest rate curve is shocked up and down. These new interest rate curves are then used to recalculate EVE Sensitivity for rate shock scenarios.

The following table sets forth the estimated percent change in the Company’s EVE Sensitivity from the base case scenario, assuming various instantaneous parallel shocks in interest rates.

	Estimated Percent Change in Economic Value of Equity
Parallel Shock Rate Change (basis points	12/31/2024		12/31/2023
+200	(1.4)	%	(3.9)	%
+100	(0.6)		(1.8)
-100	0.2		1.2
-200	(0.1)		1.3

The Company’s EVE Sensitivity profile indicates that at December 31, 2024 the balance sheet was modestly liability sensitive, with this sensitivity decreasing compared to December 31, 2023.

68

ITEM 8.  CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Consolidated Financial Statements and supplementary data required by this item are presented elsewhere in this report beginning on page F-1, in the order shown below:

Report of Independent Registered Public Accounting Firm (PCAOB ID 173)

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

ITEM 9A. CONTROLS AND PROCEDURES

The Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a and 15(d) -15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) as of December 31, 2024. Based upon their evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of that date, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”): (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company evaluated changes in its internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the last fiscal quarter. The Company determined that there were no changes that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting. Management’s report on internal control over financial reporting and the independent registered public accounting firm’s report on the Company’s internal control over financial reporting are contained in “Item 8 — Consolidated Financial Statements and Supplementary Data.”

ITEM 9B. OTHER INFORMATION

None.

ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

Not applicable.

69

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE

The information required by this item will be provided within 120 days of December 31, 2024.

ITEM 11. EXECUTIVE COMPENSATION

The information required by this item will be provided within 120 days of December 31, 2024.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

The information required by this item will be provided within 120 days of December 31, 2024.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this item will be provided within 120 days of December 31, 2024.

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES

Our independent registered public accounting firm is Crowe LLP, Boston, MA, Auditor Firm ID is 173.

The information required by this item will be provided within 120 days of December 31, 2024.

70

PART IV

ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)    [1]    Consolidated Financial Statements

•Report of Independent Registered Public Accounting Firm

•Consolidated Balance Sheets as of December 31, 2024 and 2023

•Consolidated Statements of Income for the Years Ended December  31, 2024, 2023, and 2022

•Consolidated Statements of Comprehensive Income/(Loss) for the Years Ended December 31, 2024, 2023, and 2022

•Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2024, 2023, and 2022

•Consolidated Statements of Cash Flows for the Years Ended December 31, 2024, 2023, and 2022

•Notes to Consolidated Financial Statements

The Consolidated Financial Statements required to be filed in our Annual Report on Form 10-K are included in Part II, Item 8 hereof.

[2]    Financial Statement Schedules

All financial statement schedules are omitted because the required information is either included or is not applicable.

71

[3]     Exhibits

2.1	Agreement and Plan of Merger, dated as of December 16, 2024, by and among Berkshire Hills Bancorp, Inc, Commerce Acquisition Sub, Inc., and Brookline Bancorp, Inc. (1)
3.1	Amended Certificate of Incorporation of Berkshire Hills Bancorp, Inc. (2)
3.2	Amended and Restated Bylaws of Berkshire Hills Bancorp, Inc. (3)
3.4	Certificate of Designations of the Series B Non-Voting Preferred Stock (4)
4.1	Form of Common Stock Certificate of Berkshire Hills Bancorp, Inc. (2)
4.2	Note Subscription Agreement by and among Berkshire Hills Bancorp, Inc. and certain subscribers dated September 20, 2012 (5)
4.3	Description of Berkshire Hills Bancorp, Inc. Securities (6)
10.1	Three-Year Employment Agreement by and among Berkshire Hills Bancorp, Inc., Berkshire Bank and Nitin J. Mhatre (7)*
10.2	Berkshire Bank Supplemental Executive Retirement Agreement entered into with Nitin J. Mhatre (8)*
10.3	Amended and Restated Three Year Change in Control Agreement by and among Berkshire Hills Bancorp, Inc., Berkshire Bank and Sean A. Gray (9) *
10.4	Supplemental Executive Retirement Agreement between Berkshire Bank and Sean A. Gray (10)*
10.5	Employment Agreement, dated December 16, 2024, by and among Berkshire Hills Bancorp, Inc., Berkshire Bank, Brookline Bank and Sean A. Gray (11)*
10.6	Berkshire Bank Enhanced Change in Control Severance Plan (Brett J. Brbovic, James C. Brown, Gregory D. Lindenmuth)(12)*
10.7	Form of Split Dollar Agreement entered into with Sean A. Gray (13)*
10.8	Berkshire Bank Executive Long-Term Care Insurance Plan (14)*
10.9	Berkshire Hills Bancorp, Inc. 2018 Equity Incentive Plan (15)*
10.10	Senior Executive Short Term Incentive Plan (16)*
10.11	Berkshire Hills Bancorp, Inc. 2022 Equity Incentive Plan (17)*
10.12	Form of Securities Purchase Agreement, dated December 16, 2024, by and among Berkshire Hills Bancorp, Inc., and the other parties identified therein. (1)
10.13	Form of Registration Rights Agreement, dated December 16, 2024, by and among Berkshire Hills Bancorp, Inc., and the other parties identified therein. (1)
19.0	Berkshire Hills Bancorp, Inc. Policy Regarding Insider Trading
21.0	Subsidiary Information
23.1	Consent of Crowe LLP
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97	Berkshire Hills Bancorp, Inc. Clawback Policy (18)
101	Interactive data files pursuant to Rule 405 of Regulation S-T:  (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income/(Loss), (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements tagged as blocks of text and in detail

72

(1)	Incorporated herein by reference from the Form 8-K as filed on December 16, 2024.
(2)	Incorporated herein by reference from the Exhibits to Form 10-Q as filed on August 9, 2018
(3)	Incorporated herein by reference from the Exhibits to the Form 8-K as filed on June 26, 2017.
(4)	Incorporated herein by reference from the Exhibits to Form S-1, Registration Statement and amendments thereto, initially filed on March 10, 2000, Registration No. 333-32146.
(5)	Incorporated herein by reference from the Exhibits to the Form 8-K as filed on September 26, 2012.
(6)	Incorporated herein by reference from Exhibit 4.3 to the Form 10-K as filed on February 28, 2020.
(7)	Incorporated herein by reference from the Exhibit to the Form 8-K as filed on March 22, 2024.
(8)	Incorporated herein by reference from the Exhibit to the Form 8-K as filed on April 2, 2021.
(9)	Incorporated herein by reference from the Exhibits to the Form 10-K as filed on March 16, 2011.
(10)	Incorporated herein by reference from the Exhibits to the Form 8-K as filed on February 22, 2019.
(11)	Incorporated herein by reference from the Exhibits to the Form 10-K as filed on March 17, 2014.
(12)	Incorporated herein by reference from the Exhibits to the Form 10-K as filed on February 28, 2020.
(13)	Incorporated herein by reference from the Exhibit to the Form 8-K as filed on January 19, 2011.
(14)	Incorporated herein by reference from the Exhibits to the Form 8-K as filed on January 23, 2015.
(15)	Incorporated herein by reference from the Appendix to the Proxy Statement as filed on April 6, 2018.
(16)	Incorporated herein by reference from the Exhibits to the Form 10-Q as filed on May 10, 2019.
(17)	Incorporated herein by reference from the Appendix to the Proxy Statement as filed on April 8, 2022.
(18)	Incorporated herein by reference from the Exhibits to the Form 10-K as filed on February 28, 2024.
*	Denotes a management contract or compensatory plan or arrangement.

ITEM 16. FORM 10-K SUMMARY

None.

73

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Berkshire Hills Bancorp, Inc.
Date: March 3, 2025	By:	/s/ Nitin J. Mhatre
		Nitin J. Mhatre
		President & Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

/s/ Nitin J. Mhatre	Director, President, & Chief Executive Officer	March 3, 2025
Nitin J. Mhatre	(principal executive officer)
/s/ Brett J. Brbovic	Executive Vice President, Chief Financial Officer	March 3, 2025
Brett J. Brbovic	(principal financial officer)
/s/ David M. Brunelle	Chairperson	March 3, 2025
David M. Brunelle
/s/ Mary Anne Callahan	Director	March 3, 2025
Mary Anne Callahan
/s/ Nina A. Charnley	Director	March 3, 2025
Nina A. Charnley
/s/ Mihir A. Desai	Director	March 3, 2025
Mihir A. Desai
/s/ William H. Hughes, III	Director	March 3, 2025
William H. Hughes, III
/s/ Jeffrey W. Kip	Director	March 3, 2025
Jeffrey W. Kip
/s/ Sylvia Maxfield	Director	March 3, 2025
Sylvia Maxfield
/s/ Laurie Norton Moffatt	Director	March 3, 2025
Laurie Norton Moffatt
/s/ Karyn Polito	Director	March 3, 2025
Karyn Polito
/s/ Eric S. Rosengren	Director	March 3, 2025
Eric S. Rosengren

74

ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s Consolidated Financial Statements for external reporting purposes in accordance with generally accepted accounting principles.

As of December 31, 2024, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control—Integrated Framework issued in 2013, by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO"). Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2024 was effective.

The Company’s internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2024 has been audited by Crowe LLP, an independent registered public accounting firm, as stated in their report, which follows. This report expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.

/s/ Nitin J. Mhatre	/s/ Brett J. Brbovic
Nitin J. Mhatre	Brett J. Brbovic
President & Chief Executive Officer	Executive Vice President & Chief Financial Officer
March 3, 2025	March 3, 2025

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Shareholders and the Board of Directors

of Berkshire Hills Bancorp, Inc.

Boston, Massachusetts

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Berkshire Hills Bancorp, Inc. (the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income/loss, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.

F-2

Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Allowance for Credit Losses on loans

The estimate of expected credit losses is based on relevant information about current conditions, past events, and reasonable and supportable forward-looking forecasts regarding collectability of the reported amounts. In order to estimate the expected credit losses for loans evaluated on a pooled basis, the Company utilizes a static pool migration methodology which calculates a historical loss rate for each of the identified loan segments. The historical loss rates are then adjusted for current and asset specific characteristics (also referred to as qualitative adjustments) and for expected changes to current conditions over the reasonable and supportable forecast period (also referred to as forecast). Each of these key components of the allowance for credit loss calculation is complex and requires a high volume of data input.

Auditing the allowance for credit losses was especially challenging and identified by us as a critical audit matter given the high volume of data inputs and judgements made by management. Auditing the allowance for credit loss calculation involved significant audit effort, including the involvement of experienced audit personnel.

F-3

The primary procedures we performed to address this critical audit matter included:

Testing the effectiveness of internal controls over management’s allowance for credit loss calculation including the design and operating effectiveness to address:

•Completeness and accuracy of the reports utilized within the allowance for credit loss calculation.

•The mathematical accuracy of the allowance for credit loss calculation.

•The accuracy of application of information within the allowance for credit loss calculation.

•Significant assumptions and judgements applied within the allowance for credit loss calculation.

Substantively testing management’s process to estimate the allowance for credit loss calculation included:

•Testing the completeness and accuracy of the underlying internal data utilized to prepare the calculation.

•Evaluating the relevance and reliability of the underlying external data utilized to prepare the calculation.

•Testing the mathematical accuracy, including the application of data and assumptions, of the allowance for credit loss calculation.

•The reasonableness of the significant judgements and assumptions utilized within the allowance for credit loss calculation.

/s/ Crowe LLP

We have served as the Company's auditor since 2017.

Boston, Massachusetts

March 3, 2025

F-4

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED BALANCE SHEETS

	December 31,
(In thousands, except share data)	2024		2023
Assets
Cash and due from banks	$	182,776	$	148,148
Short-term investments	945,633		1,055,096
Total cash and cash equivalents	1,128,409		1,203,244
Trading security, at fair value	5,258		6,142
Equity securities, at fair value	655		13,029
Securities available for sale, at fair value	655,723		1,022,285
Securities held to maturity (fair values of $433,382 in 2024 and $476,228 in 2023)	507,658		543,351
Federal Home Loan Bank stock and other restricted securities	19,565		22,689
Total securities	1,188,859		1,607,496
Less: Allowance for credit losses on securities held to maturity	(64)		(68)
Net Securities	1,188,795		1,607,428
Loans held for sale	3,076		2,237
Total loans	9,384,994		9,039,686
Less: Allowance for credit losses on loans	(114,700)		(105,357)
Net loans	9,270,294		8,934,329
Premises and equipment, net	56,609		68,915
Other intangible assets	15,064		19,664
Cash surrender value of bank-owned life insurance	245,789		242,309
Other assets	358,442		341,757
Assets held for sale	6,930		10,938
Total assets	$	12,273,408	$	12,430,821
Liabilities
Demand deposits	$	2,324,879	$	2,469,164
NOW and other deposits	841,406		858,644
Money market deposits	3,610,521		3,565,516
Savings deposits	1,021,716		1,053,810
Time deposits	2,576,682		2,686,250
Total deposits	10,375,204		10,633,384
Short-term debt	103,500		260,000
Long-term Federal Home Loan Bank advances	212,982		125,223
Subordinated notes	121,612		121,363
Total borrowings	438,094		506,586
Other liabilities	292,686		278,630
Total liabilities	11,105,984		11,418,600

(continued)

	December 31,
(In thousands, except share data)	2024		2023
Shareholders’ equity
Common stock ($0.01 par value; 100,000,000 shares authorized and 51,903,190 shares issued and 46,424,016 shares outstanding in 2024; 100,000,000 shares authorized; 51,903,190 shares issued, and 43,500,872 shares outstanding in 2023)	$	562	$	528
Additional paid-in capital - common stock	1,430,532		1,423,273
Unearned compensation	(10,106)		(10,109)
Retained (deficit)	(3,080)		(33,136)
Accumulated other comprehensive (loss)	(106,343)		(143,016)
Treasury stock, at cost (5,479,174 shares in 2024 and 8,402,318 shares in 2023)	(144,141)		(225,319)
Total shareholders’ equity	1,167,424		1,012,221
Total liabilities and shareholders’ equity	$	12,273,408	$	12,430,821

The accompanying notes are an integral part of these consolidated financial statements.

F-5

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF INCOME

	Years Ended December 31,
(In thousands)	2024		2023		2022
Interest and dividend income
Loans	$	556,527	$	512,535	$	335,312
Securities and other	57,411		63,764		51,945
Total interest and dividend income	613,938		576,299		387,257
Interest expense
Deposits	228,015		158,913		33,437
Borrowings and subordinated notes	34,337		48,339		9,223
Total interest expense	262,352		207,252		42,660
Net interest income	351,586		369,047		344,597
Non-interest income
Deposit related fees	33,759		34,155		32,026
Loan related fees	11,280		10,595		9,467
Gain on SBA loan sales	12,648		10,334		12,494
Wealth management fees	10,840		10,197		10,008
Total fee income	68,527		65,281		63,995
Other	13,576		2,045		6,973
Fair value adjustments on securities	7		513		(2,037)
(Loss)/gain on sale of securities	(49,937)		(25,057)		6
Gain on sale of business operations and assets, net	16,241		—		—
Total non-interest income	48,414		42,782		68,937
Total net revenue	400,000		411,829		413,534
Provision expense for credit losses	23,999		31,999		11,000
Non-interest expense
Compensation and benefits	160,453		159,281		152,741
Occupancy and equipment	31,469		35,718		37,638
Technology	40,395		41,878		35,586
Professional services	10,307		11,643		12,043
Regulatory expenses	7,395		7,019		3,105
Amortization of intangible assets	4,601		4,820		5,134
Marketing	4,522		5,377		5,103
Merger, restructuring and other non-operating expenses	9,493		6,261		8,909
Other	27,851		29,511		28,457
Total non-interest expense	296,486		301,508		288,716
Income before income taxes	79,515		78,322		113,818
Income tax expense	18,512		8,724		21,285
Net income	$	61,003	$	69,598	$	92,533
Basic earnings per share	$	1.44	$	1.61	$	2.03
Diluted earnings per share	$	1.43	$	1.60	$	2.02
Weighted average common shares outstanding:
Basic	42,508		43,288		45,564
Diluted	42,761		43,504		45,914

The accompanying notes are an integral part of these consolidated financial statements.

F-6

Table of Contents

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

	Years Ended December 31,
(In thousands)	2024		2023		2022
Net income	$	61,003	$	69,598	$	92,533
Other comprehensive income/(loss), before tax:
Changes in unrealized gains and losses on securities available-for-sale	46,800		47,960		(235,081)
Changes in unrealized gains and losses on cash flow hedges	1,228		2,402		(6,667)
Changes in unrealized gains and losses on pension	893		316		1,674
Total other comprehensive income/(loss), before tax	48,921		50,678		(240,074)
Income taxes related to other comprehensive income/(loss):
Changes in unrealized gains and losses on securities available-for-sale	(11,685)		(11,928)		60,922
Changes in unrealized gains and losses on cash flow hedges	(321)		(630)		1,789
Changes in unrealized gains and losses on pension	(242)		(84)		(446)
Total income tax (expense)/benefit related to other comprehensive income/(loss)	(12,248)		(12,642)		62,265
Total other comprehensive income/(loss)	36,673		38,036		(177,809)
Total comprehensive income/(loss)	$	97,676	$	107,634	$	(85,276)

The accompanying notes are an integral part of these consolidated financial statements.

F-7

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

	Common Stock		Additional paid-in		Unearned		Retained (deficit)		Accumulated other comprehensive		Treasury
(In thousands, except per share data)		Shares	Amount		capital		compensation		earnings		(loss) income		stock		Total
Balance at January 1, 2022		48,667	$	528	$	1,423,445	$	(9,056)	$	(139,383)	$	(3,243)	$	(89,856)	$	1,182,435
Comprehensive income:
Net income		—	—		—		—		92,533		—		—		92,533
Other net comprehensive (loss)		—	—		—		—		—		(177,809)		—		(177,809)
Total comprehensive (loss)		—	—		—		—		92,533		(177,809)		—		(85,276)
Cash dividends declared on common shares ($0.54 per share)		—	—		—		—		(24,527)		—		—		(24,527)
Treasury stock purchased		(4,485)	—		—		—		—		—		(124,519)		(124,519)
Forfeited shares		(98)	—		189		2,560		—		—		(2,749)		—
Exercise of stock options		12	—		—		—		(51)		—		321		270
Restricted stock grants		328	—		537		(9,440)		—		—		8,903		—
Stock-based compensation		—	—		—		7,338		—		—		—		7,338
Other, net		(63)	—		12		—		—		—		(1,671)		(1,659)
Balance at December 31, 2022		44,361	$	528	$	1,424,183	$	(8,598)	$	(71,428)	$	(181,052)	$	(209,571)	$	954,062
Comprehensive (loss):
Net income		—	—		—		—		69,598		—		—		69,598
Other net comprehensive income		—	—		—		—		—		38,036		—		38,036
Total comprehensive income		—	—		—		—		69,598		38,036		—		107,634
Impact of ASU No. 2022-02 Adoption		—	—		—		—		401		—		—		401
Cash dividends declared on common shares ($0.72 per share)		—	—		—		—		(31,707)		—		—		(31,707)
Treasury stock purchased		(1,135)	—		—		—		—		—		(23,844)		(23,844)
Forfeited shares		(103)	—		(184)		2,657		—		—		(2,473)		—
Exercise of stock options		—	—		—		—		—		—		—		—
Restricted stock grants		446	—		(568)		(11,666)		—		—		12,234		—
Stock-based compensation		—	—		—		7,498		—		—		—		7,498
Other, net		(68)	—		(158)		—		—		—		(1,665)		(1,823)
Balance at December 31, 2023		43,501	$	528	$	1,423,273	$	(10,109)	$	(33,136)	$	(143,016)	$	(225,319)	$	1,012,221
Comprehensive income:
Net income		—	—		—		—		61,003		—		—		61,003
Other net comprehensive income		—	—		—		—		—		36,673		—		36,673
Total comprehensive income		—	—		—		—		61,003		36,673		—		97,676
Stock Issuance		3,448	34		9,276		—		—		—		90,690		100,000
Cash dividends declared common shares ($0.72 per share)		—	—		—		—		(30,940)		—		—		(30,940)
Treasury stock purchased		(794)	—		—		—		—		—		(17,536)		(17,536)
Forfeited shares		(130)	—		(366)		3,313		—		—		(2,947)		—
Exercise of stock options		5	—		—		—		(7)		—		126		119
Restricted stock grants		500	—		(1,645)		(11,628)		—		—		13,273		—
Stock-based compensation		—	—		—		8,318		—		—		—		8,318
Other, net		(106)	—		(6)		—		—		—		(2,428)		(2,434)
Balance at December 31, 2024		46,424	$	562	$	1,430,532	$	(10,106)	$	(3,080)	$	(106,343)	$	(144,141)	$	1,167,424

The accompanying notes are an integral part of these consolidated financial statements.

F-8

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
(In thousands)	2024		2023		2022
Cash flows from operating activities:
Net income	$	61,003	$	69,598	$	92,533
Adjustments to reconcile net income to net cash provided by operating activities:
Provision expense for credit losses	23,999		31,999		11,000
Net amortization of securities	(62)		1,451		2,886
Change in unamortized net loan origination costs and premiums	5,542		764		3,312
Premises and equipment depreciation and amortization expense	6,984		8,445		9,576
Stock-based compensation expense	8,318		7,498		7,338
Accretion of purchase accounting entries, net	(1,287)		(716)		(1,637)
Amortization of other intangibles	4,601		4,820		5,134
Income from cash surrender value of bank-owned life insurance policies	(6,152)		(5,392)		(5,540)
Securities losses, net	49,930		24,544		2,031
(Gain) on SBA loan sales	(12,648)		(10,334)		(12,494)
Net change in loans held-for-sale	805		2,074		5,168
Amortization of interest in tax-advantaged projects	(2,508)		8,018		3,508
Gain on sale of business operations and other assets	(16,241)		—		—
Net change in other	2,922		14,387		(12,076)
Net cash provided by operating activities	$	125,206	$	157,156	$	110,739
Cash flows from investing activities:
Net decrease in trading security	905		860		818
Proceeds from sales of equity securities	12,863		—		—
Purchases of securities available for sale	(86,546)		(44,586)		(478,940)
Proceeds from sales of securities available for sale	361,871		267,199		149,994
Proceeds from maturities, calls, and prepayments of securities available for sale	88,192		201,624		548,423
Purchases of securities held to maturity	(600)		(700)		(807)
Proceeds from maturities, calls, and prepayments of securities held to maturity	36,611		39,193		51,961
Net change in loans	(493,724)		(716,591)		(1,546,518)
Net change in New York branch loans held for sale	1,146		—		—
Proceeds from surrender of bank-owned life insurance	2,672		2,002		2,311
Purchase of Federal Home Loan Bank stock	(164,145)		(494,159)		(124,331)
Proceeds from sales of Federal Home Loan Bank stock	167,269		478,689		127,912
Net investment in limited partnership tax credits	(13,717)		(16,172)		(14,537)
Purchase of premises and equipment, net	(4,568)		(1,820)		(1,495)
Proceeds from sales of seasoned loan portfolios	89,233		—		24,323
Cash outflows from sale of business operations and other assets	(314,712)		—		—
Net cash (used) by investing activities	$	(317,250)	$	(284,461)	$	(1,260,886)
(Continued)

F-9

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONCLUDED)

	Years Ended December 31,
(In thousands)	2024		2023		2022
Cash flows from financing activities:
Net increase in deposits	$	160,143	$	306,115	$	258,316
Net change in NY branch deposits held for sale	(34,896)		—		—
Proceeds from Federal Home Loan Bank advances and other borrowings	1,208,500		10,450,979		51,275
Repayments of Federal Home Loan Bank advances and other borrowings	(1,277,241)		(10,070,200)		(60,196)
Issuance of common stock	100,000		—		—
Proceeds from issuance of subordinated debt	—		—		98,032
Repayment from calling of subordinated debt	—		—		(75,000)
Purchase of treasury stock	(17,536)		(23,844)		(124,519)
Exercise of stock options	119		—		270
Common and preferred stock cash dividends paid	(30,940)		(31,707)		(24,527)
Settlement of derivative contracts with financial institution counterparties	9,060		13,851		84,044
Net cash provided by financing activities	$	117,209	$	645,194	$	207,695
Net change in cash and cash equivalents	(74,835)		517,889		(942,452)
Cash and cash equivalents at beginning of year	1,203,244		685,355		1,627,807
Cash and cash equivalents at end of year	1,128,409		1,203,244		685,355
Supplemental cash flow information:
Interest paid on deposits	$	232,314	$	148,313	$	32,782
Interest paid on borrowed funds	34,798		46,584		9,043
Income taxes (refunded)/paid, net	(1,425)		12,307		28,439
Other non-cash changes:
Other net comprehensive income/(loss)	$	36,673	$	38,036	$	(177,809)
Seasoned loan portfolios reclassified to held-for-sale, net	91,754		—		3,369
Held-for-sale loans reclassified to held-for-investment, net	878		—		606
Reclassification of New York branch loans from portfolio loans to assets held-for-sale, net	58,455		—		—
Reclassification of New York branch assets to assets held-for-sale	13,936		—		—
Reclassification of New York branch deposits to liabilities held-for-sale, net	484,530		—		—
Reclassification of New York branch liabilities to liabilities held-for-sale	12,929		—		—
Reclassification of New York branch loans held-for-sale to held-for investment, net	7,183		—		—
Reclassification of liabilities held-for-sale to deposits, net	66,207		—		—
Premises and equipment reclassified to held-for-sale	—		8,714		1,380
Impact to retained earnings from adoption of ASU 2022-02	—		401		—
Premium payable on cash flow hedges	—		—		2,296

The accompanying notes are an integral part of these consolidated financial statements.

F-10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Years Ended December 31, 2024, 2023, and 2022

NOTE 1.    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Consolidation

The Consolidated Financial Statements (the “financial statements”) of Berkshire Hills Bancorp, Inc. and its subsidiaries (the “Company” or “Berkshire”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Delaware corporation, headquartered in Boston, Massachusetts, and the holding company for Berkshire Bank (the “Bank”), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts. These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank’s consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise.

The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued.

Reclassification

Certain items in prior financial statements have been reclassified to conform to the current presentation.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates.

Cash and Cash equivalents

Cash and cash equivalents include cash, balances due from banks, and short-term investments, all of which had an original maturity within 90 days. Due to the nature of cash and cash equivalents and the near term maturity, the Company estimated that the carrying amount of such instruments approximated fair value. The nature of the Bank’s business requires that it maintain amounts due from banks which at times, may exceed federally insured limits. The Bank has not experienced any losses on such amounts and all amounts are maintained with well-capitalized institutions.

Trading Security

The Company accounts for a tax advantaged economic development bond originated in 2008 at fair value, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 320. The bond has been designated as a trading account security and is recorded at fair value, with changes in unrealized gains and losses recorded through earnings each period as part of non-interest income.

F-11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Securities

Debt securities that management has the intent and ability to hold to maturity are classified as held to maturity and carried at amortized cost. All other debt securities are classified as available for sale and carried at fair value, with unrealized gains and losses reported as a component of other net comprehensive income. Equity securities are carried at fair value, with changes in fair value reported in net income. Management determines the appropriate classification of securities at the time of purchase. Restricted equity securities, such as stock in the Federal Home Loan Bank of Boston (“FHLBB”) are carried at cost. There are no quoted market prices for the Company’s restricted equity securities. The Bank is a member of the FHLBB, which requires that members maintain an investment in FHLBB stock, which may be redeemed based on certain conditions. The Bank reviews for impairment based on the ultimate recoverability of the cost bases in the FHLBB stock.

Purchase premiums and discounts are recognized in interest income using the interest method, without anticipating prepayments, except mortgage-backed securities where prepayments are anticipated, over the terms of the securities. Premiums on callable debt securities are amortized to their earliest call date. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method.

The Company measures expected credit losses on held to maturity debt securities on a collective basis. Accrued interest receivable on held to maturity debt securities is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

The Company evaluates available for sale debt securities in an unrealized loss position by first assessing whether it intends to sell or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Loans Held for Sale

Loans originated with the intent to be sold in the secondary market are accounted for under the fair value option. Non-refundable fees and direct loan origination costs related to residential mortgage loans held for sale are recognized in non-interest income or non-interest expense as earned or incurred. Fair value is primarily determined based on quoted prices for similar loans in active markets. Gains and losses on sales of residential mortgage loans (sales proceeds minus carrying value) are recorded in non-interest income.

Loans that were previously held for investment that the Company has an active plan to sell are transferred to loans held for sale at the lower of cost or market (fair value). The market price is primarily determined based on quoted prices for similar loans in active markets or agreed upon sales prices. Gains are recorded in non-interest income at sale to the extent that the sale price of the loan exceeds carrying value. Any reduction in the loan’s value, prior to being transferred to loans held for sale, is reflected as a charge-off of the recorded investment in the loan resulting in a new cost basis, with a corresponding reduction in the allowance for credit losses. Further decreases in the fair value of the loan are recognized in non-interest expense.

F-12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans

Loans are reported at their amortized cost. Amortized cost is the principal balance outstanding, net of the unamortized balance of any deferred fees or costs and the unamortized balance of any premiums or discounts on loans purchased or acquired through mergers. Interest income is accrued on the unpaid principal balance. Interest income includes net accretion or amortization of deferred fees or costs and of premiums or discounts. Direct loan origination costs, net of any origination fees, in addition to premiums and discounts on loans, are deferred and recognized as an adjustment of the related loan yield using the interest method. Interest on loans, excluding automobile and unsecured consumer loans, is generally not accrued on loans which are ninety days or more past due unless the loan is well-secured and in the process of collection. Past due status is based on contractual terms of the loan. Automobile and unsecured consumer loans generally continue accruing until one hundred and twenty days delinquent, at which time they are charged off. All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income, except for certain loans designated as well-secured. The interest on nonaccrual loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

Purchase Credit Deteriorated ("PCD") Loans

Loans that the Company acquired in acquisitions include some loans that have experienced more than insignificant credit deterioration since origination. PCD loans are recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through provision expense.

Allowance for Credit Losses on Loans

The allowance for credit losses on loans (“ACLL”) is comprised of the allowance for credit losses on loans. The ACLL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed. Accrued interest receivable is excluded from the estimate of credit losses.

The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The estimate of expected credit losses is based on relevant information about current conditions, past events, and reasonable and supportable forward-looking forecasts regarding collectability of the reported amounts. In order to estimate the expected credit losses for loans evaluated on a pooled basis, the Company utilizes a static pool migration methodology which calculates a historical loss rate for each of the identified loan segments. The historical loss rates are then adjusted for current and asset specific characteristics (also referred to as qualitative adjustments) and for expected changes to current conditions over the reasonable and supportable forecast period (also referred to as forecast).The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period. The ACLL reserve is overlaid with qualitative factors based upon:

•the existence and growth of concentrations of credit;

•the volume and severity of past due financial assets, including nonaccrual assets;

•the institutions lending and credit review as well as the experience and ability of relevant management and staff and;

•the effect of other external factors such as regulatory, competition, regional market conditions, legal and technological environment and other events such as natural disasters;

The allowance for unfunded commitments is maintained at a level by the Company to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit).) The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liability on the Consolidated Balance Sheets), with adjustments to the reserve recognized in other noninterest expense in the Consolidated Statements of Income.

F-13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The ACLL is measured on a collective (pool) basis when similar risk characteristics exist. The Company evaluates its risk characteristics of loans based on regulatory call report code with sub-segmentation based on underlying collateral for certain loan types. Risk characteristics relevant to each portfolio segment are as follows:

Construction – Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions.

Commercial real estate multifamily, owner occupied and non-owner – Loans in this segment are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans.

Commercial and industrial loans – Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality of this segment.

Residential real estate – All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Home equity and other consumer loans – Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Loans that do not share risk characteristics are evaluated on an individual basis and are not also included in the collective evaluation. Estimates of specific allowance may be determined by the present value of anticipated future cash flows or the loan’s observable fair market value, or the fair value of the collateral less costs to sell, if the loan is collateral dependent. However, for collateral dependent loans, the amount of the amortized cost in a loan that exceeds the fair value of the collateral is charged-off against the allowance for credit losses on loans in lieu of an allocation of a specific allowance amount when such an amount has been identified definitively as uncollectible.

Bank-Owned Life Insurance

Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at the amount that can be realized under the insurance contract at the balance sheet date which is the cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in non-interest income on the Consolidated Statements of Income and are not subject to income taxes.

Foreclosed and Repossessed Assets

Other real estate owned is comprised of real estate acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. Repossessed collateral is primarily comprised of taxi medallions. Both other real estate owned and repossessed collateral are held for sale and are initially recorded at the fair value less estimated costs to sell at the date of foreclosure or repossession, establishing a new cost basis. The shortfall, if any, of the loan balance over the fair value of the property or collateral (excluding taxi medallions), less cost to sell, at the time of transfer from loans to other real estate owned or repossessed collateral is charged to the allowance for credit losses on loans. Subsequent to transfer, the asset is carried at lower of cost or fair value less cost to sell and periodically evaluated for impairment. The shortfall, if any, of the loan balance over the fair value of the collateral comprised of taxi medallions at the time of transfer from loans to repossessed collateral is charged to non-interest income. Subsequent impairments in the fair value of other real estate owned and repossessed collateral are charged to expense in the period incurred. Net operating income or expense related to other real estate owned and repossessed collateral is included in operating expenses in the accompanying Consolidated Statements of Income. Because of changing market conditions, there are inherent uncertainties in the assumptions with respect to the estimated fair value of other real estate owned and repossessed collateral. Because of these inherent uncertainties, the amount ultimately

F-14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

realized on other real estate owned and repossessed collateral may differ from the amounts reflected in the financial statements.

Capitalized Servicing Rights

Capitalized servicing rights are included in “other assets” in the Consolidated Balance Sheets. Servicing assets are initially recognized as separate assets at fair value when rights are acquired through purchase or through sale of financial assets with servicing retained.

The Company's servicing rights accounted for under the fair value method are carried on the Consolidated Balance Sheets at fair value with changes in fair value recorded in income in the period in which the change occurs. Changes in the fair value of servicing rights are primarily due to changes in valuation assumptions, such as discount rates and prepayment speeds, and the collection and realization of expected cash flows.

The Company’s servicing rights accounted for under the amortization method are initially recorded at fair value. Under that method, capitalized servicing rights are charged to expense in proportion to and over the period of estimated net servicing income. Fair value of the servicing rights is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, prepayment speeds and default rates and losses. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranches. If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income.

Premises and Equipment

Land is carried at cost. Buildings, improvements, and equipment are carried at cost less accumulated depreciation and amortization computed on the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on the straight-line method over the shorter of the lease term, plus optional terms if certain conditions are met, or the estimated useful life of the asset.

Other Intangibles

Intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability.

The fair values of these assets are generally determined based on appraisals and are subsequently amortized on a straight-line basis or an accelerated basis over their estimated lives. Management assesses the recoverability of these intangible assets at least annually or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. If the carrying amount exceeds fair value, an impairment charge is recorded to income.

Transfers of Financial Assets

Transfers of an entire financial asset, group of entire financial assets, or a participating interest in an entire financial asset 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 to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets.

Income Taxes

Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable for future years to differences between financial statement and tax bases of existing assets and liabilities. The effect of tax rate changes on deferred taxes is recognized in the income tax provision in the period that includes the enactment date. A tax valuation allowance is established, as needed, to reduce net deferred tax assets to the amount expected to be realized. In the event it becomes more likely than not that some or all of the deferred tax asset allowances will not be needed, the valuation allowance will be adjusted.

In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax

F-15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

positions. Income tax positions and recorded tax benefits are based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have determined the amount of the tax benefit to be recognized by estimating the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is more-likely-than-not that a tax benefit will not be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest and penalties have also been recognized. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Stock-Based Compensation

The Company measures and recognizes compensation cost relating to share-based payment transactions based on the grant-date fair value of the equity instruments issued. The fair value of restricted stock is recorded as unearned compensation. The deferred expense is amortized to compensation expense based on one of several permitted attribution methods over the longer of the required service period or performance period. For performance-based restricted stock awards, the Company estimates the degree to which performance conditions will be met to determine the number of shares that will vest and the related compensation expense. Compensation expense is adjusted in the period such estimates change.

Income tax benefits and/or tax deficiencies related to stock compensation determined as the difference between compensation cost recognized for financial reporting purposes and the deduction for tax, are recognized in the income statement as income tax expense or benefit in the period in which they occur.

Wealth Management

Wealth management assets held in a fiduciary or agent capacity are not included in the accompanying Consolidated

Balance Sheets because they are not assets of the Company.

Wealth management fees is primarily comprised of fees earned from consultative investment management, trust administration, tax return preparation, and financial planning. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based on the daily accrual of the market value of the investment accounts and the applicable fee rate.

Derivative Instruments and Hedging Activities

The Company enters into interest rate swap 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 interest rate swap 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 ASC 815, “Derivatives and Hedging.”

Interest rate swaps designated as economic hedges are recorded at fair value within other assets or liabilities. Changes in the fair value of these derivatives are recorded directly through earnings.

For interest rate swaps that management intends to apply the hedge accounting provisions of ASC 815, the Company formally documents at inception all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the various hedges. Additionally, the Company uses dollar offset or regression analysis at the hedge’s inception and for each reporting period thereafter, to assess whether the derivative used in its hedging transaction is expected to be and has been highly effective in offsetting changes in the fair value or cash flows of the hedged item. The Company discontinues hedge accounting when it is determined that a derivative is not expected to be or has ceased to be highly effective as a hedge, and then reflects changes in fair value of the derivative in earnings after termination of the hedge relationship.

The Company enters into commitments to lend with borrowers, and forward commitments to sell loans or to-be-announced mortgage-backed bonds to investors to hedge against the inherent interest rate and pricing risk associated with selling loans. The commitments to lend generally terminate once the loan is funded, the lock period expires or the borrower decides not to contract for the loan. The forward commitments generally terminate once the loan is sold, the commitment period expires or the borrower decides not to contract for the loan. These commitments are considered derivatives which are accounted for by recognizing their estimated fair value on the Consolidated

F-16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheets as either a freestanding asset or liability. See Note 14 - Derivative Instruments and Hedging Activities to the financial statements for more information on commitments to lend and forward commitments.

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Company enters into off-balance sheet financial instruments, consisting primarily of credit related financial instruments. These financial instruments are recorded in the financial statements when they are funded or related fees are incurred or received.

Fair Value Hierarchy

The Company groups assets and liabilities that are measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.

Level 1 - Valuation is based on quoted prices in active markets for identical assets or liabilities. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 - Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using unobservable techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Employee Benefits

The Company maintains an employer sponsored 401(k) plan to which participants may make contributions in the form of salary deferrals and the Company provides matching contributions in accordance with the terms of the plan. Contributions due under the terms of the defined contribution plans are accrued as earned by employees.

Due to the Rome Bancorp acquisition in 2011, the Company inherited a noncontributory, qualified, defined benefit pension plan for certain employees who met age and service requirements; as well as other post-retirement benefits, principally health care and group life insurance. The Rome pension plan and postretirement benefits that were acquired in connection with the whole-bank acquisition were frozen prior to the close of the transaction. The pension benefit in the form of a life annuity is based on the employee’s combined years of service, age, and compensation. The Company also has a long-term care post-retirement benefit plan for certain executives where upon disability, associated benefits are funded by insurance policies or paid directly by the Company.

In order to measure the expense associated with the Plans, various assumptions are made including the discount rate, expected return on plan assets, anticipated mortality rates, and expected future healthcare costs. The assumptions are based on historical experience as well as current facts and circumstances. The Company uses a December 31 measurement date for its plans. As of the measurement date, plan assets are determined based on fair value, generally representing observable market prices. The projected benefit obligation is primarily determined based on the present value of projected benefit distributions at an assumed discount rate.

Net periodic pension benefit costs include interest costs based on an assumed discount rate, the expected return on plan assets based on actuarially derived market-related values, and the amortization of net actuarial losses. Net periodic postretirement benefit costs include service costs, interest costs based on an assumed discount rate, and the amortization of prior service credits and net actuarial gains. Differences between expected and actual results in each year are included in the net actuarial gain or loss amount, which is recognized in other comprehensive income. The net actuarial gain or loss in excess of a 10% corridor is amortized in net periodic benefit cost over the average remaining service period of active participants in the Plans. The prior service credit is amortized over the average remaining service period to full eligibility for participating employees expected to receive benefits.

The Company recognizes in its consolidated balance sheets an asset for a plan’s overfunded status or a liability for a plan’s underfunded status. The Company also measures the Plans’ assets and obligations that determine its funded status as of the end of the fiscal year and recognizes those changes in other comprehensive income/(loss), net of tax.

F-17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Due to the SI Financial acquisition in 2019, the Company inherited a tax-qualified defined benefit pension plan. The plan was frozen effective September 6, 2013. The plan is a single plan under the Internal Revenue Code and, as a result, all of the assets stand behind all of liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers.

Operating Segments

The Company's reportable segment is determined by the Chief Executive Officer, who is designated the chief operating decision maker ("CODM"), based upon information provided about the Company's products and services offered, primarily banking operations. Consolidated net income of the company is the primary performance metric utilized by the CODM. The segment is also distinguished by the level of information provided to the CODM, who uses such information to review performance of various components of the business, which are then aggregated if operating performance, products/services, and customers are similar. The CODM will evaluate the financial performance of the Company's business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the Company's segment and in the determination of allocating resources. The CODM uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets. The CODM uses consolidated net income to benchmark the Company against its competitors. The benchmarking analysis coupled with monitoring of budget to actual results are used in assessment performance and in establishing compensation. Loans, investments, and deposits provide the revenues in the banking operation. Interest expense, provisions for credit losses, and payroll provide the significant expenses in the banking operation. No other expenses meet the threshold of significant. While the Company has assigned certain management responsibilities by business lines, the Company’s CODM monitors and evaluates financial performance on a Company-wide basis. The majority of the Company’s revenue is from the business of banking. Accordingly, all of the Company’s operations are considered by management to be aggregated in one reportable operating segment. All operations are domestic.

Recently Adopted Accounting Principles

Effective January 1, 2024, the Company adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No. 2023-02, "Investments-Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)" (ASU 2023-02). ASU 2023-02 expanded the permitted use of the proportional amortization method (PAM), which was previously only available to low-income housing tax credit investments, to other tax equity investments if certain conditions are met. Under PAM, the initial cost of an investment is amortized in proportion to the income tax benefits received and both the amortization of the investment and the income tax benefits received are recognized as a component of income tax expense. Under this ASU, an entity has the option to apply PAM to applicable investments on a tax-credit-program-by-tax-credit-program basis. The Company has elected PAM for its public welfare investments which consist of Affordable Housing and New Market tax credit investments. In addition, the amendments in this ASU require that all tax equity investments accounted for using PAM use the delayed equity contribution guidance in paragraph ASC 323-740-25-3, requiring a liability be recognized for delayed equity contributions that are unconditional and legally binding or for equity contributions that are contingent upon a future event when that contingent event becomes probable. The amendments in this ASU also require additional disclosures in interim and annual periods concerning investments for which PAM is applied, including (i) the nature of tax equity investments, and (ii) the effect of tax equity investments and related income tax credits and other income tax benefits on the financial position and results of operations. The provisions of this ASU became effective for the Company for interim and annual periods beginning January 1, 2024. Refer to Note 24 – Tax Equity Investments for additional information. The adoption of this ASU did not have a material impact on the Company's Consolidated Financial Statements.

Future Application of Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU requires disclosure in the rate reconciliation table of additional categories of information and more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating; however, the adoption is not expected to have a material impact on the Company’s Consolidated Financial Statements.

F-18

NOTE 2.    CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, amounts due from banks, and short-term investments with original maturities of 90 days or less. At year-end 2024 and 2023, there were no short-term investments pledged as collateral support for derivative financial contracts. The Federal Reserve Bank requires the Bank to maintain certain reserve requirements of vault cash and/or deposits. As of December 31, 2024 and 2023, the reserve requirement was zero.

NOTE 3.    TRADING SECURITY

The Company holds a tax advantaged economic development bond that is being accounted for at fair value. The security had an amortized cost of $5.3 million and $6.2 million and a fair value of $5.3 million and $6.1 million at year-end 2024 and 2023, respectively. Unrealized gains/(losses) recorded through income on this security totaled $21 thousand, $294 thousand, and ($830) thousand for 2024, 2023, and 2022, respectively. As discussed further in Note 14 - Derivative Instruments and Hedging Activities, the Company has entered into a swap contract to swap-out the fixed rate of the security in exchange for a variable rate. The Company does not purchase securities with the intent of selling them in the near term, and there are no other debt securities in the trading portfolio at year-end 2024 and 2023.

F-19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4.    SECURITIES

The following is a summary of securities available for sale (“AFS”) , held to maturity (“HTM”), and equity securities:

(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Fair Value		Allowance
December 31, 2024
Securities available for sale
Debt securities:
U.S Treasuries	$	6,986	$	3	$	—	$	6,989	$	—
Municipal bonds and obligations	63,952		10		(3,098)		60,864		—
Agency collateralized mortgage obligations	328,569		146		(64,153)		264,562		—
Agency mortgage-backed securities	273,969		4		(53,733)		220,240		—
Agency commercial mortgage-backed securities	85,686		—		(18,975)		66,711		—
Corporate bonds	38,689		30		(2,362)		36,357		—
Total securities available for sale	797,851		193		(142,321)		655,723		—
Securities held to maturity
Municipal bonds and obligations	235,883		129		(22,619)		213,393		44
Agency collateralized mortgage obligations	101,163		—		(17,884)		83,279		—
Agency mortgage-backed securities	43,644		—		(8,707)		34,937		—
Agency commercial mortgage-backed securities	125,547		—		(25,153)		100,394		—
Tax advantaged economic development bonds	1,144		—		(42)		1,102		20
Other bonds and obligations	277		—		—		277		—
Total securities held to maturity	507,658		129		(74,405)		433,382		64
Equity securities	655		67		(67)		655		—
Total	$	1,306,164	$	389	$	(216,793)	$	1,089,760	$	64
December 31, 2023
Securities available for sale
Debt securities:
U.S Treasuries	$	7,980	$	1	$	—	$	7,981	$	—
Municipal bonds and obligations	64,788		494		(1,429)		63,853		—
Agency collateralized mortgage obligations	426,986		—		(79,112)		347,874		—
Agency mortgage-backed securities	492,633		2		(75,155)		417,480		—
Agency commercial mortgage-backed securities	174,879		—		(29,553)		145,326		—
Corporate bonds	43,291		34		(4,210)		39,115		—
Other bonds and obligations	655		67		(66)		656		—
Total securities available for sale	1,211,212		598		(189,525)		1,022,285		—
Securities held to maturity
Municipal bonds and obligations	251,046		698		(16,987)		234,757		48
Agency collateralized mortgage-backed securities	112,929		—		(18,360)		94,569		—
Agency mortgage-backed securities	47,379		—		(8,052)		39,327		—
Agency commercial mortgage-backed securities	130,169		—		(24,368)		105,801		—
Tax advantaged economic development bonds	1,540		6		(60)		1,486		20
Other bonds and obligations	288		—		—		288		—
Total securities held to maturity	543,351		704		(67,827)		476,228		68
Equity securities	15,035		—		(2,006)		13,029		—
Total	$	1,769,598	$	1,302	$	(259,358)	$	1,511,542	$	68

`    

F-20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

At year-end 2024 and 2023, accumulated net unrealized (losses) on AFS securities included in accumulated other comprehensive income/(loss) were losses of $142.1 million and $188.9 million, respectively. The year-end 2024 and 2023 related income tax benefit of $37.7 million and $49.4 million, respectively, was also included in accumulated other comprehensive (loss).

The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the years ended December 31, 2024, 2023 and 2022:

(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2023	$	48	$	20	$	68
Provision (benefit) for credit losses	(4)		—		(4)
Balance at December 31, 2024	$	44	$	20	$	64

(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2022	$	66	$	25	$	91
Provision (benefit) for credit losses	(18)		(5)		(23)
Balance at December 31, 2023	$	48	$	20	$	68

(In thousands)	Municipal bonds and obligations		Tax advantaged economic development bonds		Total
Balance at December 31, 2021	$	70	$	35	$	105
Provision expense/(benefit) for credit losses	(4)		(10)		(14)
Balance at December 31, 2022	$	66	$	25	$	91

Credit Quality Information

The Company monitors the credit quality of held to maturity securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying municipality, agency, or organization.

As of December 31, 2024, none of the Company's investment securities were delinquent or in nonaccrual status.

F-21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amortized cost and estimated fair value of AFS and HTM securities, segregated by contractual maturity at year-end 2024 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities and collateralized mortgage obligations are shown in total, as their maturities are highly variable. 

	Available for sale				Held to maturity
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Within 1 year	$	7,640	$	7,640	$	346	$	346
Over 1 year to 5 years	21,117		20,782		2,980		2,930
Over 5 years to 10 years	47,244		44,631		54,191		53,032
Over 10 years	33,626		31,157		179,787		158,464
Total bonds and obligations	109,627		104,210		237,304		214,772
Mortgage-backed securities	688,224		551,513		270,354		218,610
Total	$	797,851	$	655,723	$	507,658	$	433,382

At year-end 2024 and 2023, the Company had pledged securities as collateral for certain municipal deposits and for interest rate swaps with certain counterparties. The total amortized cost and fair values of these pledged securities follows. Additionally, there is a blanket lien on certain securities to collateralize borrowings from the FHLBB and Federal Reserve Bank of Boston, as discussed further in Note 10 - Borrowed Funds.

	2024				2023
(In thousands)	Amortized Cost		Fair Value		Amortized Cost		Fair Value
Securities pledged to swap counterparties	$	9,574	$	9,078	$	9,780	$	9,633
Securities pledged for municipal deposits	286,183		218,665		289,740		250,979
Total	$	295,757	$	227,743	$	299,520	$	260,612

Proceeds from the sale of AFS securities totaled $362 million, $267 million, and $150 million in 2024, 2023, and 2022, respectively. The (loss)/gain for the sale of AFS securities were reclassified out of accumulated other comprehensive (loss) and into earnings. The components of net recognized gains and losses on the sale of AFS securities and the fair value change of equities are as follows:

(In thousands)	2024		2023		2022
Gross recognized gains	$	21,488	$	1,199	$	72
Gross recognized losses	(71,566)		(26,083)		(2,009)
Net recognized (losses)	$	(50,078)	$	(24,884)	$	(1,937)

F-22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:

	Less Than Twelve Months				Over Twelve Months				Total
(In thousands)	Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value		Gross Unrealized Losses		Fair Value
December 31, 2024
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	773	$	30,299	$	2,325	$	25,916	$	3,098	$	56,215
Agency collateralized mortgage obligations	403		45,954		63,750		200,038		64,153		245,992
Agency mortgage-backed securities	113		3,706		53,620		215,822		53,733		219,528
Agency commercial mortgage-back securities	—		—		18,975		66,711		18,975		66,711
Corporate bonds	—		—		2,362		32,538		2,362		32,538
Total securities available for sale	$	1,289	$	79,959	$	141,032	$	541,025	$	142,321	$	620,984
Securities held to maturity
Municipal bonds and obligations	1,614		73,453		21,005		111,228		22,619		184,681
Agency collateralized mortgage obligations	—		—		17,884		83,279		17,884		83,279
Agency mortgage-backed securities	—		—		8,707		34,937		8,707		34,937
Agency commercial mortgage-back securities	—		—		25,153		100,394		25,153		100,394
Tax advantaged economic development bonds	—		—		42		1,102		42		1,102
Total securities held to maturity	1,614		73,453		72,791		330,940		74,405		404,393
Total	$	2,903	$	153,412	$	213,823	$	871,965	$	216,726	$	1,025,377
December 31, 2023
Securities available for sale
Debt securities:
Municipal bonds and obligations	$	76	$	9,326	$	1,353	$	22,739	$	1,429	$	32,065
Agency collateralized mortgage obligations	—		—		79,112		347,874		79,112		347,874
Agency mortgage-backed securities	1		22		75,154		417,151		75,155		417,173
Agency commercial mortgage-backed securities	—		—		29,553		145,326		29,553		145,326
Corporate bonds	457		6,543		3,753		31,690		4,210		38,233
Other bonds and obligations	—		—		66		295		66		295
Total securities available for sale	$	534	$	15,891	$	188,991	$	965,075	$	189,525	$	980,966
Securities held to maturity
Municipal bonds and obligations	229		28,895		16,758		92,063		16,987		120,958
Agency collateralized mortgage obligations	1		21		18,359		94,548		18,360		94,569
Agency mortgage-backed securities	—		—		8,052		39,327		8,052		39,327
Agency commercial mortgage-back securities	—		—		24,368		105,801		24,368		105,801
Tax advantaged economic development bonds	—		—		60		922		60		922
Total securities held to maturity	230		28,916		67,597		332,661		67,827		361,577
Total	$	764	$	44,807	$	256,588	$	1,297,736	$	257,352	$	1,342,543

F-23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt Securities

The Company expects to recover its amortized cost basis on all debt securities in its AFS and HTM portfolios. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of December 31, 2024, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions.

The following summarizes, by investment security type, the basis for the conclusion that the debt securities in an unrealized loss position within the Company’s AFS and HTM portfolios did not maintain other-than-temporary impairment ("OTTI") at year-end 2024:

AFS municipal bonds and obligations

At year-end 2024, 77 out of 91 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 5.2% of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for that risk. There were no material underlying credit downgrades during 2024. All securities are performing.

AFS collateralized mortgage obligations

At year-end 2024, 41 out of 43 securities in the Company’s portfolio of AFS collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 20.7% of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), and Government National Mortgage Association ("GNMA") guarantee the contractual cash flows of all of the Company's collateralized residential mortgage obligations. The securities are investment grade rated and there were no material underlying credit downgrades during 2024. All securities are performing.

AFS commercial and residential mortgage-backed securities

At year-end 2024, 28 out of 28 securities in the Company’s portfolio of AFS mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 20.3% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during 2024. All securities are performing.

AFS corporate bonds

At year-end 2024, 12 out of 14 securities in the Company’s portfolio of AFS corporate bonds were in unrealized loss positions. The aggregate unrealized loss represents 6.8% of the amortized cost of bonds in unrealized loss positions. The Company reviews the financial strength of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities. All securities are performing.

HTM municipal bonds and obligations

At year-end 2024, 137 out of 159 securities in the Company’s portfolio of HTM municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 10.9% of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for that risk. There were no material underlying credit downgrades during 2024. All securities are performing.

F-24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

HTM collateralized mortgage obligations

At year-end 2024, 12 out of 12 securities in the Company’s portfolio of HTM collateralized mortgage obligations were in an unrealized loss position. Aggregate unrealized losses represented 17.7% of the amortized cost of the security in an unrealized loss position. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company's collateralized residential mortgage obligations. The securities are investment grade rated, and there were no material underlying credit downgrades during 2024. All securities are performing.

HTM commercial and residential mortgage-backed securities

At year-end 2024, 17 out of 17 securities in the Company’s portfolio of HTM mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 20.0% of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during 2024. All securities are performing.

HTM tax-advantaged economic development bonds

At year-end 2024, 2 out of 2 securities in the Company’s portfolio of tax-advantaged economic development

bonds were in unrealized loss positions. Aggregate unrealized losses represented 3.7% of the amortized cost of

securities in unrealized loss position. The Company believes that more likely than not all the principal outstanding

will be collected. All securities are performing.

NOTE 5. LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

The following is a summary of total loans by regulatory call report code with sub-segmentation based on underlying collateral for certain loan types:

(In thousands)	December 31, 2024		December 31, 2023
Construction	$	726,344	$	640,371
Commercial multifamily	636,805		599,145
Commercial real estate owner occupied	695,330		628,646
Commercial real estate non-owner occupied	2,769,447		2,606,409
Commercial and industrial	1,439,175		1,359,249
Residential real estate	2,771,769		2,760,312
Home equity	230,365		224,223
Consumer other	115,759		221,331
Total loans	$	9,384,994	$	9,039,686
Allowance for credit losses	114,700		105,357
Net loans	$	9,270,294	$	8,934,329

As of December 31, 2024 and 2023, outstanding loans originated under the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") totaled $1.4 million and $3.0 million, respectively. These loans are 100% guaranteed by the SBA and the full principal amount of the loan may qualify for forgiveness. These loans are included in commercial and industrial.

In 2024, the Company purchased loans aggregating $76 million and sold loans aggregating $178 million. In 2023, the Company purchased loans aggregating $649 million and sold loans aggregating $255 million. In 2022, the Company purchased loans aggregating $718 million and sold loans aggregating $366 million. Net gains on sales of loans were $12.6 million, $10.3 million, and $12.5 million for the years 2024, 2023, and 2022, respectively.

F-25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Most of the Company’s lending activity occurs within its primary markets in Massachusetts, Southern Vermont, and Northeastern New York. Most of the loan portfolio is secured by real estate, including residential mortgages, commercial mortgages, and home equity loans. Year-end loans to operators of non-residential buildings totaled $2.3 billion, or 24.6%, and $2.2 billion, or 24.0% of total loans in 2024 and 2023, respectively. There were no other concentrations of loans related to any single industry in excess of 10% of total loans at year-end 2024 or 2023.

As of December 31, 2024 and December 31, 2023, the Company had no foreclosed residential real estate property. Additionally, residential mortgage loans collateralized by real estate property that are in the process of foreclosure as of December 31, 2024 and December 31, 2023 totaled $1.1 million and $3.8 million, respectively, including sold loans serviced by the Company.

At year-end 2024 and 2023, the Company had pledged loans totaling $1.6 billion and $1.3 billion, respectively, to the Federal Reserve Bank of Boston as collateral for certain borrowing arrangements. Also, residential first mortgage loans are subject to a blanket lien for FHLBB advances. See Note 10 - Borrowed Funds.

At year-end 2024 and 2023, the Company’s commitments outstanding to related parties totaled $2.2 million and $1.5 million, respectively, and the loans outstanding against these commitments totaled $1.6 million and $0.8 million, respectively. Related parties include directors and executive officers of the Company and its subsidiaries, as well as their respective affiliates in which they have a controlling interest and immediate family members. For the years 2024 and 2023, all related party loans were performing.

Risk characteristics relevant to each portfolio segment are as follows:

Construction - Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions.

Commercial real estate multifamily, owner occupied and non-owner - Loans in these segments are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans.

Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment and which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Residential real estate - All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Home equity and other consumer loans - Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

F-26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Credit Losses on Loans

The Allowance for Credit Losses for Loans (“ACLL”) is comprised of the allowance for credit losses, and the allowance for unfunded commitments is accounted for as a separate liability in other liabilities on the balance sheet. The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The Company uses a static pool migration analysis method, applying expected historical loss trend and observed economic metrics. The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period. The ACLL reserve is overlaid with qualitative factors based upon:

•the existence and growth of concentrations of credit;

•the volume and severity of past due financial assets, including nonaccrual assets;

•the institutions lending and credit review as well as the experience and ability of relevant management and staff and;

•the effect of other external factors such as regulatory, competition, regional market conditions, legal and technological environment and other events such as natural disasters.

The allowance for unfunded commitments is maintained at a level by the Company to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit) and is included in other liabilities on the Consolidated Balance Sheets.

F-27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s activity in the allowance for credit losses on loans for the years ended December 31, 2024, December 31, 2023 and December 31, 2022 was as follows:

(In thousands)	Balance at Beginning of Period		Charge-offs		Recoveries		Provision for Credit Losses		Balance at End of Period
Year ended December 31, 2024
Construction	$	2,885	$	—	$	—	$	1,578	$	4,463
Commercial multifamily	2,475		(1,164)		—		2,773		4,084
Commercial real estate owner occupied	9,443		(403)		231		2,032		11,303
Commercial real estate non-owner occupied	38,221		(36)		249		86		38,520
Commercial and industrial	18,602		(7,820)		1,984		12,783		25,549
Residential real estate	19,622		(76)		1,425		1,508		22,479
Home equity	2,015		—		250		127		2,392
Consumer other	12,094		(11,026)		1,726		3,116		5,910
Total allowance for credit losses	$	105,357	$	(20,525)	$	5,865	$	24,003	$	114,700

(In thousands)	Balance at Beginning of Period		Adoption of ASU No. 2022-02		Charge-offs		Recoveries		Provision for Credit Losses		Balance at End of Period
Year ended December 31, 2023
Construction	$	1,227	$	—	$	(1)	$	—	$	1,659	$	2,885
Commercial multifamily	1,810		—		—		6		659		2,475
Commercial real estate owner occupied	10,739		24		(489)		1,139		(1,970)		9,443
Commercial real estate non-owner occupied	30,724		—		(65)		204		7,358		38,221
Commercial and industrial	18,743		(23)		(17,872)		2,659		15,095		18,602
Residential real estate	18,666		2		(313)		610		657		19,622
Home equity	2,173		—		(88)		519		(589)		2,015
Consumer other	12,188		(404)		(10,429)		1,586		9,153		12,094
Total allowance for credit losses	$	96,270	$	(401)	$	(29,257)	$	6,723	$	32,022	$	105,357

(In thousands)	Balance at Beginning of Period		Charge-offs		Recoveries		Provision for Credit Losses		Balance at End of Period
Year ended December 31, 2022
Construction	$	3,206	$	—	$	—	$	(1,979)	$	1,227
Commercial multifamily	6,120		(94)		112		(4,328)		1,810
Commercial real estate owner occupied	12,752		(687)		702		(2,028)		10,739
Commercial real estate non-owner occupied	32,106		(5,894)		1,549		2,963		30,724
Commercial and industrial	22,584		(18,447)		3,050		11,556		18,743
Residential real estate	22,406		(555)		1,019		(4,204)		18,666
Home equity	4,006		(166)		283		(1,950)		2,173
Consumer other	2,914		(2,215)		505		10,984		12,188
Total allowance for credit losses	$	106,094	$	(28,058)	$	7,220	$	11,014	$	96,270

F-28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liability on the Consolidated Balance Sheets), with adjustments to the reserve recognized in other noninterest expense in the Consolidated Statements of Income. The Company’s activity in the allowance for credit losses on unfunded commitments for the years ended December 31, 2024, December 31, 2023, and December 31, 2022 was as follows:

(In thousands)	Total
Balance at December 31, 2023	$	9,256
Expense for credit losses	565
Balance at December 31, 2024	$	9,821

(In thousands)	Total
Balance at December 31, 2022	$	8,588
Expense for credit losses	668
Balance at December 31, 2023	$	9,256

(In thousands)	Total
Balance at December 31, 2021	$	7,043
Release of expense for credit losses	1,545
Balance at December 31, 2022	$	8,588

Credit Quality Information

The Company monitors the credit quality of its portfolio by using internal risk ratings that are based on regulatory guidance. Loans that are given a Pass rating are not considered a problem credit. Loans that are classified as Special Mention loans are considered to have potential weaknesses and are evaluated closely by management. Substandard, including non-accruing loans, are loans for which a definitive weakness has been identified and which may make full collection of contractual cash flows questionable. Doubtful loans are those with identified weaknesses that make full collection of contractual cash flows, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

For commercial credits, the Company assigns an internal risk rating at origination and reviews the rating annually, semiannually, or quarterly depending on the risk rating. The rating is also reassessed at any point in time when management becomes aware of information that may affect the borrower’s ability to fulfill their obligations.

The Company risk rates its residential mortgages, including 1-4 family and residential construction loans, based on a three rating system: Pass, Special Mention, and Substandard. Loans that are current within 59 days are rated Pass. Residential mortgages that are 60-89 days delinquent are rated Special Mention. Loans delinquent for 90 days or greater are rated Substandard and generally placed on nonaccrual status. 

F-29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the Company’s loans by risk category:

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2024
Construction
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Risk rating
Pass	$	40,549	$	138,925	$	436,850	$	74,718	$	—	$	1,336	$	—			$	692,378
Special Mention	—		—		15,374		—		—		—		—		—		15,374
Substandard	—		—		—		18,592		—		—		—		—		18,592
Total	$	40,549	$	138,925	$	452,224	$	93,310	$	—	$	1,336	$	—	$	—	$	726,344
Commercial multifamily:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	1,164	$	—	$	—	$	1,164
Risk rating
Pass	$	85,160	$	17,598	$	203,001	$	52,235	$	38,211	$	233,145	$	428	$	—	$	629,778
Special Mention	—		—		—		—		—		421		—		—		421
Substandard	—		—		—		—		2,477		4,129		—		—		6,606
Total	$	85,160	$	17,598	$	203,001	$	52,235	$	40,688	$	237,695	$	428	$	—	$	636,805
Commercial real estate owner occupied:
Current period gross write-offs	$	—	$	—	$	45	$	232	$	—	$	126	$	—	$	—	$	403
Risk rating
Pass	$	122,082	$	83,269	$	112,718	$	94,937	$	67,652	$	177,684	$	2,947	$	—	$	661,289
Special Mention	1,852		9,637		1,839		7,215		221		5,207		—		—		25,971
Substandard	—		—		411		595		37		7,027		—		—		8,070
Total	$	123,934	$	92,906	$	114,968	$	102,747	$	67,910	$	189,918	$	2,947	$	—	$	695,330
Commercial real estate non-owner occupied:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	36	$	—	$	—	$	36
Risk rating
Pass	$	246,619	$	426,882	$	591,563	$	413,459	$	142,739	$	874,454	$	5,961	$	1,500	$	2,703,177
Special Mention	—		—		—		1,038		223		40,763		—		—		42,024
Substandard	—		—		368		2,782		—		18,840		2,256		—		24,246
Total	$	246,619	$	426,882	$	591,931	$	417,279	$	142,962	$	934,057	$	8,217	$	1,500	$	2,769,447
Commercial and industrial:
Current period gross write-offs	$	324	$	868	$	1,564	$	940	$	816	$	1,745	$	1,563	$	—	$	7,820
Risk rating
Pass	$	205,831	$	91,152	$	126,327	$	93,441	$	18,613	$	112,620	$	689,036	$	11,478	$	1,348,498
Special Mention	164		1,122		22,091		1,305		1,705		2,957		16,723		100		46,167
Substandard	—		2,422		1,740		10,825		929		12,075		16,314		205		44,510
Total	$	205,995	$	94,696	$	150,158	$	105,571	$	21,247	$	127,652	$	722,073	$	11,783	$	1,439,175

F-30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Residential real estate
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	76	$	—	$	—	$	76
Risk rating
Pass	$	291,826	$	531,873	$	908,916	$	247,551	$	77,706	$	703,572	$	136	$	—	$	2,761,580
Special Mention	—		—		649		468		—		1,501		—		—		2,618
Substandard	—		—		124		188		374		6,885		—		—		7,571
Total	$	291,826	$	531,873	$	909,689	$	248,207	$	78,080	$	711,958	$	136	$	—	$	2,771,769

F-31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2023
Construction
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	1	$	—	$	—	$	1
Risk rating
Pass	$	104,507	$	346,419	$	138,802	$	29,176	$	2,545	$	1,098	$	—	$	—	$	622,547
Special Mention	—		—		512		—		—		—		—		—		512
Substandard	—		—		17,312		—		—		—		—		—		17,312
Total	$	104,507	$	346,419	$	156,626	$	29,176	$	2,545	$	1,098	$	—	$	—	$	640,371
Commercial multifamily:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Risk rating
Pass	$	16,020	$	216,477	$	56,817	$	26,566	$	94,733	$	179,923	$	377	$	—	$	590,913
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		242		2,554		—		5,436		—		—		8,232
Total	$	16,020	$	216,477	$	57,059	$	29,120	$	94,733	$	185,359	$	377	$	—	$	599,145
Commercial real estate owner occupied:
Current period gross write-offs	$	—	$	—	$	—	$	380	$	—	$	109	$	—	$	—	$	489
Risk rating
Pass	$	97,271	$	120,327	$	122,151	$	37,914	$	70,393	$	165,224	$	2,653	$	—	$	615,933
Special Mention	—		—		424		222		—		788		—		—		1,434
Substandard	—		—		81		47		4,703		6,448		—		—		11,279
Total	$	97,271	$	120,327	$	122,656	$	38,183	$	75,096	$	172,460	$	2,653	$	—	$	628,646
Commercial real estate non-owner occupied:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	65	$	—	$	—	$	65
Risk rating
Pass	$	404,687	$	591,897	$	385,247	$	135,134	$	277,870	$	736,566	$	4,553	$	—	$	2,535,954
Special Mention	—		—		—		229		19,465		726		—		—		20,420
Substandard	—		—		—		6,814		13,483		29,738		—		—		50,035
Total	$	404,687	$	591,897	$	385,247	$	142,177	$	310,818	$	767,030	$	4,553	$	—	$	2,606,409
Commercial and industrial:
Current period gross write-offs	$	—	$	1,154	$	863	$	2,763	$	1,496	$	9,283	$	2,313	$	—	$	17,872
Risk rating
Pass	$	142,946	$	203,126	$	118,191	$	69,722	$	39,437	$	112,770	$	554,153	$	—	$	1,240,345
Special Mention	526		23,149		3,735		1,621		610		1,353		35,244		—		66,238
Substandard	432		761		11,702		1,135		3,785		12,538		22,313		—		52,666
Total	$	143,904	$	227,036	$	133,628	$	72,478	$	43,832	$	126,661	$	611,710	$	—	$	1,359,249

F-32

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Residential real estate
Current period gross write-offs	$	—	$	50	$	—	$	50	$	174	$	39	$	—	$	—	$	313
Risk rating
Pass	$	599,124	$	973,031	$	266,055	$	88,302	$	66,837	$	755,372	$	81	$	—	$	2,748,802
Special Mention	—		—		—		—		140		664		—		—		804
Substandard	—		129		1,176		379		574		8,448		—		—		10,706
Total	$	599,124	$	973,160	$	267,231	$	88,681	$	67,551	$	764,484	$	81	$	—	$	2,760,312

F-33

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For home equity and consumer other loan portfolio segments, Berkshire evaluates credit quality based on the aging status of the loan and by payment activity. The performing or nonperforming status is updated on an ongoing basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost based on payment activity:

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2024		2023		2022		2021		2020		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2024
Home equity:
Current period gross write-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Payment performance
Performing	$	—	$	—	$	—	$	—	$	423	$	2,529	$	226,822	$	—	$	229,774
Nonperforming	—		—		—		—		—		—		591		—		591
Total	$	—	$	—	$	—	$	—	$	423	$	2,529	$	227,413	$	—	$	230,365
Consumer other:
Current period gross write-offs	$	—	$	214	$	9,723	$	760	$	2	$	113	$	214	$	—	$	11,026
Payment performance
Performing	$	30,524	$	33,849	$	23,397	$	10,072	$	3,718	$	3,825	$	10,066	$	—	$	115,451
Nonperforming	—		1		43		121		—		107		36		—		308
Total	$	30,524	$	33,850	$	23,440	$	10,193	$	3,718	$	3,932	$	10,102	$	—	$	115,759

	Term Loans Amortized Cost Basis by Origination Year
(In thousands)	2023		2022		2021		2020		2019		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2023
Home equity:
Current period gross write-offs	$	—	$	—	$	—	$	70	$	—	$	—	$	18	$	—	$	88
Payment performance
Performing	$	—	$	—	$	—	$	439	$	—	$	2,614	$	220,209	$	—	$	223,262
Nonperforming	—		—		—		—		—		—		961		—		961
Total	$	—	$	—	$	—	$	439	$	—	$	2,614	$	221,170	$	—	$	224,223
Consumer other:
Current period gross write-offs	$	109	$	8,843	$	1,149	$	11	$	78	$	239	$	—	$	—	$	10,429
Payment performance
Performing	$	49,588	$	108,284	$	19,679	$	5,843	$	7,054	$	19,587	$	10,614	$	—	$	220,649
Nonperforming	77		104		47		26		110		284		34		—		682
Total	$	49,665	$	108,388	$	19,726	$	5,869	$	7,164	$	19,871	$	10,648	$	—	$	221,331

F-34

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table summarizes information about total loans rated Special Mention or lower at December 31, 2024 and December 31, 2023. The table below includes consumer loans that are Special Mention and Substandard accruing that are classified as performing based on payment activity.

(In thousands)	December 31, 2024		December 31, 2023
Nonaccrual	$	24,447	$	21,407
Substandard Accruing	88,009		131,689
Total Classified	112,456		153,096
Special Mention	133,408		91,502
Total Criticized	$	245,864	$	244,598

The following is a summary of loans by past due status at December 31, 2024 and December 31, 2023:

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
December 31, 2024
Construction	$	—	$	—	$	594	$	594	$	725,750	$	726,344
Commercial multifamily	421		—		4,129		4,550		632,255		636,805
Commercial real estate owner occupied	484		456		2,330		3,270		692,060		695,330
Commercial real estate non-owner occupied	295		—		3,532		3,827		2,765,620		2,769,447
Commercial and industrial	2,613		1,116		9,823		13,552		1,425,623		1,439,175
Residential real estate	8,571		1,969		7,570		18,110		2,753,659		2,771,769
Home equity	629		519		1,491		2,639		227,726		230,365
Consumer other	884		327		1,395		2,606		113,153		115,759
Total	$	13,897	$	4,387	$	30,864	$	49,148	$	9,335,846	$	9,384,994

(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans
December 31, 2023
Construction	$	—	$	—	$	—	$	—	$	640,371	$	640,371
Commercial multifamily	5,436		187		—		5,623		593,522		599,145
Commercial real estate owner occupied	581		286		804		1,671		626,975		628,646
Commercial real estate non-owner occupied	139		251		3,798		4,188		2,602,221		2,606,409
Commercial and industrial	2,749		689		8,769		12,207		1,347,042		1,359,249
Residential real estate	5,669		943		10,687		17,299		2,743,013		2,760,312
Home equity	707		498		1,281		2,486		221,737		224,223
Consumer other	2,363		1,642		1,606		5,611		215,720		221,331
Total	$	17,644	$	4,496	$	26,945	$	49,085	$	8,990,601	$	9,039,686

F-35

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following is a summary of loans on nonaccrual status and loans past due 90 days or more and still accruing as of December 31, 2024 and December 31, 2023:

	December 31, 2024
(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
Construction	$	594	$	594	$	—	$	—
Commercial multifamily	4,129		4,129		—		—
Commercial real estate owner occupied	2,330		2,330		—		—
Commercial real estate non-owner occupied	3,532		3,532		—		—
Commercial and industrial	8,964		8,614		859		—
Residential real estate	3,999		3,999		3,571		—
Home equity	591		591		900		—
Consumer other	308		308		1,087		—
Total	$	24,447	$	24,097	$	6,417	$	—

The commercial and industrial loans nonaccrual amortized cost as of December 31, 2024 included medallion loans with a fair value of $0.3 million and a contractual balance of $6.5 million.

	December 31, 2023
(In thousands)	Nonaccrual Amortized Cost		Nonaccrual With No Related Allowance		Past Due 90 Days or Greater and Accruing		Interest Income Recognized on Nonaccrual
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	—		—		—		—
Commercial real estate owner occupied	605		285		199		—
Commercial real estate non-owner occupied	3,798		45		—		—
Commercial and industrial	8,665		5,586		104		—
Residential real estate	6,696		2,796		3,991		—
Home equity	961		122		320		—
Consumer other	682		—		924		—
Total	$	21,407	$	8,834	$	5,538	$	—

The commercial and industrial loans nonaccrual amortized cost as of December 31, 2023 included medallion loans with a fair value of $0.4 million and a contractual balance of $8.8 million.

F-36

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Expected credit losses for collateral-dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of individually analyzed collateral-dependent loans by loan portfolio segment:

	Type of Collateral
(In thousands)	Real Estate		Investment Securities/Cash		Other
December 31, 2024
Construction	$	594	$	—	$	—
Commercial multifamily	4,129		—		—
Commercial real estate owner occupied	1,562		—		—
Commercial real estate non-owner occupied	294		—		—
Commercial and industrial	4,828		—		700
Residential real estate	1,243		—		—
Home equity	49		—		—
Consumer other	—		—		—
Total loans	$	12,699	$	—	$	700

	Type of Collateral
(In thousands)	Real Estate		Investment Securities/Cash		Other
December 31, 2023
Construction	$	—	$	—	$	—
Commercial multifamily	—		—		—
Commercial real estate owner occupied	650		—		—
Commercial real estate non-owner occupied	342		—		—
Commercial and industrial	4,788		—		944
Residential real estate	5,035		—		—
Home equity	135		—		—
Consumer other	40		—		—
Total loans	$	10,990	$	—	$	944

F-37

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Modified Loans

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For the loans included in the "combination" columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension and principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction.

The following table presents the amortized cost basis of loans at December 31, 2024 and December 31, 2023 that were both experiencing financial difficulty and modified during the year ended December 31, 2024 and December 31, 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below:

(In thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Year ended December 31, 2024
Construction	$	—	$	—	$	—	$	—	$	—	$	—	—	%
Commercial multifamily	—		—		—		—		—		—		—
Commercial real estate owner occupied	—		—		—		—		—		—		—
Commercial real estate non-owner occupied	—		—		12,356		—		—		645		0.47
Commercial and industrial	—		87		12,236		—		—		—		0.86
Residential real estate	—		—		—		—		—		—		—
Home equity	—		—		—		—		—		—		—
Consumer other	—		—		—		—		—		—		—
Total	$	—	$	87	$	24,592	$	—	$	—	$	645	0.27	%

The Company has committed to lend additional amounts totaling $8.8 million to the borrowers included in the previous table.

F-38

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction		Combination Term Extension and Principal Forgiveness		Combination Term Extension and Interest Rate Reduction		Total Class of Financing Receivable
Year ended December 31, 2023
Construction	$	—	$	—	$	—	$	—	$	—	$	—	—	%
Commercial multifamily	—		—		—		—		—		—		—
Commercial real estate owner occupied	—		—		222		—		—		—		0.04
Commercial real estate non-owner occupied	—		—		11,454		—		—		3,600		0.58
Commercial and industrial	—		34		16,005		—		—		9		1.18	%
Residential real estate	—		—		—		—		—		—		—
Home equity	—		—		—		—		—		—		—
Consumer other	—		—		—		—		—		—		—
Total	$	—	$	34	$	27,681	$	—	$	—	$	3,609	0.35	%

The Company has committed to lend additional amounts totaling $7.8 million to the borrowers included in the previous table.

F-39

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last 12 months.

(In thousands)	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due
December 31, 2024
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	—		—		—		—
Commercial real estate owner occupied	—		—		—		—
Commercial real estate non-owner occupied	—		—		—		—
Commercial and industrial	—		—		—		—
Residential real estate	—		—		—		—
Home equity	—		—		—		—
Consumer other	—		—		—		—
Total	$	—	$	—	$	—	$	—

(In thousands)	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater Than 89 Days Past Due		Total Past Due
December 31, 2023
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	—		—		—		—
Commercial real estate owner occupied	—		—		—		—
Commercial real estate non-owner occupied	—		—		—		—
Commercial and industrial	34		—		—		34
Residential real estate	—		—		—		—
Home equity	—		—		—		—
Consumer other	—		—		—		—
Total	$	34	$	—	$	—	$	34

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the years ended December 31, 2024 and 2023:

(In thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction		Weighted Average Term Extension (months)
Years ended December 31, 2024
Construction	$	—	—	%	0
Commercial multifamily	—		—		0
Commercial real estate owner occupied	—		—		0
Commercial real estate non-owner occupied	—		2.62		26
Commercial and industrial	—		—		28
Residential real estate	—		—		0
Home equity	—		—		0
Consumer other	—		—		0

F-40

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)	Principal Forgiveness		Weighted Average Interest Rate Reduction		Weighted Average Term Extension (months)
Years ended December 31, 2023
Construction	$	—	—	%	0
Commercial multifamily	—		—		0
Commercial real estate owner occupied	—		—		120
Commercial real estate non-owner occupied	—		0.05		16
Commercial and industrial	—		1.25		23
Residential real estate	—		—		0
Home equity	—		—		0
Consumer other	—		—		0

The following table presents the amortized cost basis of loans that had a payment default during the year ended December 31, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

(in thousands)	Principal Forgiveness		Payment Delay		Term Extension		Interest Rate Reduction
Year ended December 31, 2024
Construction	$	—	$	—	$	—	$	—
Commercial multifamily	—		—		—		—
Commercial real estate owner occupied	—		—		—		—
Commercial real estate non-owner occupied	—		—		—		—
Commercial and industrial	—		—		202		—
Residential real estate	—		—		—		—
Home equity	—		—		—		—
Consumer other	—		—		—		—
Total	$	—	$	—	$	202	$	—

There were no loans that had a payment default during the years ended December 31, 2023 that were modified in the twelve months prior to that default to borrowers experiencing financial difficulty.

Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

F-41

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6.    PREMISES AND EQUIPMENT

Year-end premises and equipment are summarized as follows:

(In thousands)	2024		2023		Estimated Useful Life
Land	$	11,828	$	12,525	N/A
Buildings and improvements	72,576		89,222		5 - 39 years
Furniture and equipment	60,597		64,290		3 - 7 years
Construction in process	3,738		327
Premises and equipment, gross	148,739		166,364
Accumulated depreciation and amortization	(92,130)		(97,449)
Premises and equipment, net	$	56,609	$	68,915

Depreciation and amortization expense for the years 2024, 2023, and 2022 amounted to $7.0 million, $8.4 million, and $9.6 million, respectively.

F-42

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7.    OTHER INTANGIBLES

The components of other intangible assets are as follows:

(In thousands)	Gross Intangible Assets		Accumulated Amortization		Net Intangible Assets
December 31, 2024
Non-maturity deposits (core deposit intangible)	$	77,213	$	(63,093)	$	14,120
All other intangible assets	7,866		(6,922)		944
Total	$	85,079	$	(70,015)	$	15,064
December 31, 2023
Non-maturity deposits (core deposit intangible)	$	77,213	$	(58,965)	$	18,248
All other intangible assets	7,866		(6,450)		1,416
Total	$	85,079	$	(65,415)	$	19,664

Other intangible assets are amortized on a straight-line or accelerated basis over their estimated lives, which range from four to fifteen years. Amortization expense related to intangibles totaled $4.6 million in 2024, $4.8 million in 2023, and $5.1 million in 2022.

The estimated aggregate future amortization expense for intangible assets remaining at year-end 2024 is as follows: 2025- $4.5 million; 2026- $4.5 million; 2027- $3.6 million; 2028- $1.8 million; 2029 - $0.7 million; and none thereafter. For the years 2024, 2023, and 2022, no impairment charges were identified for the Company’s intangible assets.

F-43

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.    OTHER ASSETS

Year-end other assets are summarized as follows:

(In thousands)	2024		2023
Capitalized servicing rights	$	11,790	$	12,095
Accrued interest receivable	49,410		53,096
Accrued federal and state tax receivable	36,610		33,564
Right-of-use assets	50,195		47,348
Derivative assets	47,923		45,668
Deferred tax asset	97,449		110,068
Tax credits investments	35,597		16,644
Other	29,468		23,274
Total other assets	$	358,442	$	341,757

The Bank sells loans in the secondary market and retains the right to service many of these loans. The Bank earns fees for the servicing provided. At years end 2024, 2023, and 2022, loans sold and serviced for others amounted to $1.5 billion, $1.4 billion, and $1.5 billion, respectively. Loans serviced for others are not included in the accompanying Consolidated Balance Sheets. The risks inherent in servicing assets relate primarily to changes in prepayments that result from shifts in interest rates. For the years 2024, 2023, and 2022, contractually specified servicing fees were $6.2 million, $6.7 million, and $5.5 million, respectively, and are included as a component of loan related fees within non-interest income. Refer to Note 19 - Fair Value Measurements for significant assumptions and inputs used in the valuation at year-end 2024.

Servicing rights activity was as follows:

(In thousands)	2024		2023		2022
Balance at beginning of year	$	12,095	$	13,047	$	16,022
Additions	3,746		2,892		3,119
Amortization	(3,895)		(4,330)		(4,590)
Payoffs	(1,056)		(952)		(958)
Allowance adjustment	900		1,438		(546)
Balance at end of year	$	11,790	$	12,095	$	13,047

(1)As of December 31, 2024 and December 31, 2023, the servicing rights included in the total balance accounted for at fair value were $1.2 million and $1.5 million, respectively.

At December 31, 2024, the fair value of servicing rights was $17.7 million. At December 31, 2023, the fair value of servicing rights was $16.6 million.

F-44

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 9.    DEPOSITS

A summary of year-end time deposits is as follows:

(In thousands)	2024		2023
Maturity date:
Within 1 year	$	2,295,935	$	2,364,280
Over 1 year to 2 years	252,981		270,630
Over 2 years to 3 years	10,574		26,039
Over 3 years to 4 years	6,800		9,020
Over 4 years to 5 years	3,754		9,864
Over 5 years	6,638		6,417
Total	$	2,576,682	$	2,686,250
Account balances:
Less than $100,000	$	707,936	$	724,911
$100,000 through $250,000	1,157,227		1,276,175
$250,000 or more	711,519		685,164
Total	$	2,576,682	$	2,686,250

Included in total deposits on the Consolidated Balance Sheets are brokered deposits of $440.0 million and $524.4 million at December 31, 2024 and December 31, 2023, respectively. Also included in total deposits are reciprocal deposits of $138.5 million and $110.2 million at December 31, 2024 and December 31, 2023, respectively, as well as related party deposits of $24.4 million and $25.0 million at December 31, 2024 and December 31, 2023, respectively.

F-45

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10.    BORROWED FUNDS

Borrowed funds at December 31, 2024 and 2023 are summarized, as follows:

	2024				2023
(in thousands, except rates)	Principal		Weighted Average Rate		Principal		Weighted Average Rate
Short-term borrowings:
Advances from the FHLBB	$	103,500	5.33	%	$	260,000	5.54	%
Total short-term borrowings:	103,500		5.33		260,000		5.54
Long-term borrowings:
Advances from the FHLBB	212,982		4.48		125,223		4.80
Subordinated notes	98,532		5.50		98,335		5.50
Junior subordinated borrowing - Trust I	15,464		6.63		15,464		7.49
Junior subordinated borrowing - Trust II	7,616		6.32		7,564		7.35
Total long-term borrowings:	334,594		4.92		246,586		5.33
Total	$	438,094	5.02	%	$	506,586	5.44	%

Short-term debt includes Federal Home Loan Bank of Boston (“FHLBB”) advances with an original maturity of less than one year. The Bank maintains a $3.0 million secured line of credit with the FHLBB that bears a daily adjustable rate calculated by the FHLBB. There was no outstanding balance on the FHLBB line of credit for the periods ended December 31, 2024 and December 31, 2023. The Bank's available borrowing capacity with the FHLBB was $2.5 billion for both the periods ended December 31, 2024 and December 31, 2023. The Company was in compliance with all debt covenants as of December 31, 2024.

The Bank is approved to borrow on a short-term basis from the Federal Reserve Bank of Boston as a non-member bank. The Bank has pledged certain loans and securities to the Federal Reserve Bank to support this arrangement. No borrowings with the Federal Reserve Bank of Boston took place for the periods ended December 31, 2024 and December 31, 2023. The Bank's available borrowing capacity with the Federal Reserve Bank was $1.6 billion and $1.5 billion for the periods ended December 31, 2024 and December 31, 2023, respectively.

Long-term FHLBB advances consist of advances with an original maturity of more than one year and are subject to

prepayment penalties. There were no callable advances outstanding at December 31, 2024. The advances outstanding at December 31, 2024 included amortizing advances totaling $6.0 million. There were no callable advances outstanding at December 31, 2023. The advances outstanding at December 31, 2023 included amortizing advances totaling $4.2 million. All FHLBB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally all residential first mortgage loans and certain securities.

F-46

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

A summary of maturities of FHLBB advances at year-end 2024 is as follows:

	2024
(In thousands)	Amount		Weighted Average Rate
Fixed rate advances maturing:
2025	$	258,500	5.08	%
2026	25,484		3.75
2027	25,147		3.65
2028	779		—
2029 and beyond	6,572		0.68
Total FHLBB advances	$	316,482	4.76	%

The Company did not have variable-rate FHLB advances for the period ended December 31, 2024 and December 31, 2023.

In June 2022, the Company issued ten year subordinated notes in the amount of $100.0 million. The interest rate is fixed at 5.50% for the first five years. After five years, the notes become callable and will bear interest at a floating rate per annum equal to a benchmark rate (which is expected to be Three-Month Term SOFR), plus 249 basis points. The subordinated note includes reduction to the note principal balance of $1.5 million for unamortized debt issuance costs as of December 31, 2024.

The Company holds 100% of the common stock of Berkshire Hills Capital Trust I (“Trust I”) which is included in other assets with a cost of $0.5 million. The sole asset of Trust I is $15.5 million of the Company’s junior subordinated debentures due in 2035. These debentures bear interest at a variable rate equal to LIBOR plus 1.85% and had a rate of 6.63% and 7.49% at December 31, 2024 and December 31, 2023, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value on each quarterly payment date. Trust I is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust I is not consolidated into the Company’s financial statements.

The Company holds 100% of the common stock of SI Capital Trust II (“Trust II”) which is included in other assets

with a cost of $0.2 million. The sole asset of Trust II is $8.2 million of the Company’s junior subordinated

debentures due in 2036. These debentures bear interest at a variable rate equal to LIBOR plus 1.70% and had a rate

of 6.32% and 7.35% at December 31, 2024 and December 31, 2023. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust II is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust II is not consolidated into the Company’s financial statements.

F-47

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11.    OTHER LIABILITIES

Year-end other liabilities are summarized as follows:

(In thousands)	2024		2023
Derivative liabilities	$	79,039	$	75,957
Collateral on interest rate swaps	32,500		25,520
Finance lease liabilities	891		8,681
Employee benefits liability	38,772		43,042
Operating lease liabilities	55,986		53,026
Delayed equity contributions	18,743		—
Accrued interest payable	9,005		13,766
Customer transaction clearing accounts	7,931		12,366
Allowance for credit losses on unfunded commitments	9,821		9,256
Other	39,998		37,016
Total other liabilities	$	292,686	$	278,630

F-48

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.    EMPLOYEE BENEFIT PLANS

Pension Plan

The Company maintains a legacy, employer-sponsored defined benefit pension plan (the “Plan”) for which participation and benefit accruals were frozen on January 1, 2003. The Plan was assumed in connection with the Rome Bancorp acquisition in 2011. Accordingly, no employees are permitted to commence participation in the Plan and future salary increases and years of credited service are not considered when computing an employee’s benefits under the Plan. As of December 31, 2024, all minimum Employee Retirement Income Security Act (“ERISA”) funding requirements have been met.

Information regarding the pension plan is as follows:

	December 31,
(In thousands)	2024		2023
Change in projected benefit obligation:
Projected benefit obligation at beginning of year	$	3,642	$	3,729
Service Cost	42		59
Interest cost	175		186
Actuarial loss	(360)		(20)
Benefits paid	(264)		(250)
Settlements	—		(62)
Projected benefit obligation at end of year	3,235		3,642
Accumulated benefit obligation	3,235		3,642
Change in fair value of plan assets:
Fair value of plan assets at plan beginning of year	4,999		4,683
Actual return on plan assets	521		628
Contributions by employer	—		—
Benefits paid	(264)		(250)
Settlements	—		(62)
Fair value of plan assets at end of year	5,256		4,999
(Overfunded) status	$	(2,021)	$	(1,357)

Amounts Recognized on Consolidated Balance Sheets
Other assets	$	2,021	$	1,357
Other liabilities	—		—

Net periodic pension cost is comprised of the following:

	December 31,
(In thousands)	2024		2023		2022
Service Cost	$	42	$	59	$	68
Interest Cost	175		186		141
Expected return on plan assets	(316)		(295)		(376)
Amortization of unrecognized actuarial loss	—		6		11
Net periodic pension (credit)	$	(99)	$	(44)	$	(156)

F-49

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Changes in plan assets and benefit obligations recognized in accumulated other comprehensive income are as follows:

	December 31,
(In thousands)	2024		2023		2022
Amortization of actuarial (loss)	$	—	$	(6)	$	(11)
Actuarial (gain)	(565)		(353)		(154)
Settlement charge	—		—		—
Total recognized in accumulated other comprehensive income	(565)		(359)		(165)
Total recognized in net periodic pension cost recognized and other comprehensive income	$	(664)	$	(403)	$	(321)

The amounts in accumulated other comprehensive income/(loss) that have not yet been recognized as components of net periodic benefit cost are a net (gain)/loss of $(0.4) million, $0.1 million, and $0.5 million in 2024, 2023 and 2022, respectively.

The Company did not make any cash contributions to the pension trust during 2024 and 2023. The Company does not expect to make any cash contributions in 2025. There is no gain/loss expected to be amortized from other comprehensive income into net periodic pension cost over the next fiscal year.

The principal actuarial assumptions used are as follows:

	December 31,
	2024		2023		2022
Projected benefit obligation
Discount rate	5.55	%	4.99	%	5.21	%
Net periodic pension cost
Discount rate	4.99	%	5.21	%	2.73	%
Long term rate of return on plan assets	6.50	%	6.50	%	6.50	%

The discount rate that is used in the measurement of the pension obligation is determined by comparing the expected future retirement payment cash flows of the pension plan to the Above Median FTSE Pension Discount Curve as of the measurement date. The expected long-term rate of return on Plan assets reflects long-term earnings expectations on existing Plan assets and those contributions expected to be received during the current plan year. In estimating that rate, appropriate consideration was given to historical returns earned by Plan assets in the fund and the rates of return expected to be available for reinvestment. The rates of return were adjusted to reflect current capital market assumptions and changes in investment allocations.

The Company’s overall investment strategy with respect to the Plan’s assets is primarily for preservation of capital and to provide regular dividend and interest payments. The Plan’s targeted asset allocation is 65% equity securities via investment in the Long-Term Growth - Equity Portfolio ("LTGE"), 34% intermediate-term investment grade bonds via investment in the Long-Term Growth - Fixed-Income Portfolio ("LTGFI"), and 1% in cash equivalents portfolio (for liquidity). Equity securities include investments in a diverse mix of equity funds to gain exposure in the US and international markets. The fixed income portion of the Plan assets is a diversified portfolio that primarily invests in intermediate-term bond funds. The overall rate of return is based on the historical performance of the assets applied against the Plan’s target allocation, and is adjusted for the long-term inflation rate.

The fair values for investment securities are determined by quoted prices in active markets, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3).

F-50

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The fair value of the Plan’s assets by category within the fair value hierarchy are as follows at December 31, 2024 and December 31, 2023. During 2023, the Plan's equity mutual funds and fixed income mutual funds were transferred to Level 1 from Level 2 because they are actively traded and quoted prices were available. The Plan did not hold any assets classified as Level 3.

	December 31, 2024
Asset Category (In thousands)	Total		Level 1		Level 2
Equity Mutual Funds:
Large-Cap	$	1,615	$	1,615	$	—
Mid-Cap	398		398		—
Small-Cap	413		413		—
International	811		811		—
Fixed Income Mutual Funds:
Intermediate Duration	1,614		1,614		—
Equity Common/Collective Trusts:
Large-Cap	360		—		360
Cash Equivalents - money market	45		45		—
Total	$	5,256	$	4,896	$	360

	December 31, 2023
Asset Category (In thousands)	Total		Level 1		Level 2
Equity Mutual Funds:
Large-Cap	$	1,357	$	1,357	$	—
Mid-Cap	364		364		—
Small-Cap	386		386		—
International	828		828		—
Fixed Income Mutual Funds
Intermediate Duration	1,674		1,674		—
Equity Common/Collective Trusts:
Large-Cap	336		—		336
Cash Equivalents - money market	54		54		—
Total	$	4,999	$	4,663	$	336

Estimated benefit payments under the pension plans over the next 10 years at December 31, 2024 are as follows:

Year	Payments (In thousands)
2025	254
2026	249
2027	244
2028	246
2029 - 2034	1,493

F-51

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Multi-Employer Pension Plan

As a result of the Company's acquisition of SI Financial Group, Inc. (“SIFI”), the Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (the “DB Plan”), a tax-qualified defined benefit pension plan. The DB Plan operates as a multiple-employer plan under ERISA and the Internal Revenue Code, and as a multi-employer plan for accounting purposes. The DB Plan was frozen effective September 6, 2013. The Company made contributions of $345 thousand in 2024. As of July 1, 2024, the DB Plan held assets with a market value of $3.9 million and liabilities with a market value of $5.0 million. The funded status (market value of plan assets divided by funding target) of the DB Plan, was 80% as of July 1, 2024, as required by federal and state regulations. Market value of the DB Plan's assets reflects contributions received through June 30, 2024. There are no collective bargaining agreements in place that require contributions to the DB Plan by the Company. The DB Plan is a single plan under the Internal Revenue Code and, as a result, all of the assets stand behind all of the liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers.

Postretirement Benefits

The Company maintains an unfunded postretirement medical plan assumed in connection with the Rome Bancorp acquisition in 2011. The postretirement plan has been modified so that participation is closed to those employees who did not meet the retirement eligibility requirements by March 31, 2011. The Company contributes partially to medical benefits and life insurance coverage for retirees. Such retirees and their surviving spouses are responsible for the remainder of the medical benefits, including increases in premiums levels, between the total premium and the Company’s contribution.

The Company also has an executive long-term care (“LTC”) postretirement benefit plan which started August 1, 2014. The LTC plan reimburses executives for certain costs in the event of a future chronic illness. Funding of the plan comes from Company paid insurance policies or direct payments. At the plan’s inception, a $558 thousand benefit obligation was recorded against equity representing the prior service cost of plan participants.

Information regarding the postretirement plans is as follows:

	December 31,
(In thousands)	2024		2023
Change in accumulated postretirement benefit obligation:
Accumulated post-retirement benefit obligation at beginning of year	$	3,306	$	3,215
Service Cost	8		7
Interest cost	165		166
Participant contributions	—		—
Actuarial loss	(289)		58
Benefits paid	(108)		(140)
Accumulated post-retirement benefit obligation at end of year	$	3,082	$	3,306
Change in plan assets:
Fair value of plan assets at beginning of year	$	—	$	—
Contributions by employer	108		140
Contributions by participant	—		—
Benefits paid	(108)		(140)
Fair value of plan assets at end of year	$	—	$	—

Amounts Recognized on Consolidated Balance Sheets
Other Liabilities	$	3,082	$	3,306

F-52

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Net periodic post-retirement cost is comprised of the following:

	December 31,
(In thousands)	2024		2023		2022
Service cost	$	8	$	7	$	12
Interest costs	165		166		122
Amortization of net prior service credit	94		83		83
Amortization of net actuarial loss	(51)		(64)		30
Net periodic post-retirement costs	$	216	$	192	$	247

Changes in benefit obligations recognized in accumulated other comprehensive income are as follows:

	December 31,
(In thousands)	2024		2023		2022
Amortization of prior service credit	$	(94)	$	(83)	$	(83)
Net actuarial (gain)	(139)		(1,148)		(1,426)
Total recognized in accumulated other comprehensive income	(233)		(1,231)		(1,509)
Accrued post-retirement liability recognized	$	3,082	$	3,306	$	3,215

The amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost are as follows:

	December 31,
(In thousands)	2024		2023		2022
Net prior service cost	$	981	$	1,075	$	1,159
Net actuarial (gain)/loss	(928)		(690)		(812)
Total recognized in accumulated other comprehensive income	$	53	$	385	$	347

The amount expected to be amortized from other comprehensive income/(loss) into net periodic postretirement cost over the next fiscal year is $61 thousand.

The discount rates used in the measurement of the postretirement plan obligations are determined by comparing the expected future retirement payment cash flows of the plans to the Above Median FTSE Pension Discount Curve as of the measurement date.

The assumed discount rates on a weighted-average basis were 5.52% and 4.98% as of December 31, 2024 and December 31, 2023, respectively. The Company has fixed contributions, therefore, the annual rate of increase in healthcare costs is not used in measuring the accumulated post-retirement benefit medical obligation.

For participants in the LTC plan covered by insurance policies, no increase in annual premiums is assumed based on the history of the corresponding insurance provider.

Estimated benefit payments under the post-retirement benefit plan over the next ten years at December 31, 2024 are as follows:

Year	Payments (In thousands)
2025	99
2026	97
2027	104
2028	101
2029 - 2034	900

F-53

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

401(k) Plan

The Company provides a 401(k) Plan in which most eligible employees participate. Expenses related to the plan were $3.3 million in 2024, $3.1 million in 2023, and $2.9 million in 2022.

Other Plans

The Company maintains supplemental executive retirement plans (“SERPs”) for select current and former executives. Benefits generally commence no earlier than age sixty-two and are payable either as an annuity or as a lump sum at the executive’s option. Most of these SERPs were assumed in connection with acquisitions. At year-end 2024 and 2023, the accrued liability for these SERPs was $14.9 million and $16.7 million, respectively. SERP (benefit)/expense was $(0.4) million in 2024, $(1.0) million in 2023, and $2.0 million in 2022, and is recognized over the required service period.

The Company has endorsement split-dollar arrangements pertaining to certain current and former executives and directors. Under these arrangements, the Company purchased policies insuring the lives of the executives and directors, and separately entered into agreements to split the policy benefits with the individuals. There are no post-retirement benefits associated with these policies. The Company also assumed split-dollar life insurance agreements from multiple prior acquisitions. The accrued liability for these split-dollar arrangements was $6.9 million as of year-end 2024 and $7.0 million as of year-end 2023.

F-54

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 13.    INCOME TAXES

Provision for Income Taxes

The components of the Company’s provision for income taxes for the years ended December 31, 2024, 2023, and 2022 were, as follows: 

(In thousands)	2024		2023		2022
Current:
Federal tax expense	$	11,136	$	5,596	$	17,915
State tax expense	7,001		7,497		6,831
Total current tax expense	18,137		13,093		24,746
Deferred:
Federal tax expense/(benefit)	1,135		(2,658)		(2,274)
State tax (benefit)	(760)		(1,711)		(1,187)
Total deferred tax expense/(benefit)	375		(4,369)		(3,461)
Change in valuation allowance	—		—		—
Income tax expense	$	18,512	$	8,724	$	21,285

Effective Tax Rate

The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2024, 2023, and 2022: 

	2024				2023				2022
(In thousands, except rates)	Amount		Rate		Amount		Rate		Amount		Rate
Statutory tax rate	$	16,698	21.0	%	$	16,448	21.0	%	$	23,902	21.0	%
Increase (decrease) resulting from:
State taxes, net of federal tax benefit	4,722		6.2		4,570		5.8		4,459		3.9
Tax exempt income - investments, net	(3,431)		(4.3)		(3,611)		(4.6)		(3,515)		(3.1)
Bank-owned life insurance	(1,762)		(2.2)		(1,568)		(2.0)		(1,258)		(1.1)
Non-deductible merger costs	1,306		1.6		—		—		—		—
Tax credits, net of basis reduction	325		0.2		(7,804)		(10.0)		(2,129)		(1.9)
Other, net	654		0.8		689		0.9		(174)		(0.1)
Effective tax rate	$	18,512	23.3	%	$	8,724	11.1	%	$	21,285	18.7	%

F-55

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Deferred Tax Assets and Liabilities

As of December 31, 2024 and 2023, significant components of the Company’s deferred tax assets and liabilities were, as follows:

(In thousands)	2024		2023
Deferred tax assets:
Allowance for credit losses	$	34,410	$	31,181
Unrealized capital loss on tax credit investments	275		2,688
Net unrealized loss on securities available for sale, swaps, and pension in OCI	38,459		50,704
Employee benefit plans	11,571		12,102
Purchase accounting adjustments	3,240		4,587
Net operating loss carryforwards	99		202
Deferred loan fees	6,055		5,654
Lease liability	14,701		13,583
Premises and equipment	1,979		1,188
Nonaccrual interest	528		890
Intangible amortization	1,297		1,020
Other	2,176		2,337
Deferred tax assets, net before valuation allowances	114,790		126,136
Valuation allowance	(400)		(400)
Deferred tax assets, net of valuation allowances	$	114,390	$	125,736
Deferred tax liabilities:
Loan servicing rights	$	(1,126)	$	(1,133)
Unamortized tax credit reserve	(1,949)		(1,661)
Right-of-use asset	(13,866)		(12,874)
Deferred tax liabilities	$	(16,941)	$	(15,668)
Deferred tax assets, net	$	97,449	$	110,068

The Company’s net deferred tax asset decreased by $12.6 million during 2024 and $12.2 million of this change is related to unrealized losses in OCI.

Deferred tax assets, net of valuation allowances, are expected to be realized through the reversal of existing taxable temporary differences and future taxable income.

Valuation Allowances

The components of the Company’s valuation allowance on its deferred tax asset, net as of December 31, 2024 and 2023 were, as follows: 

(in thousands)	2024		2023
State valuation allowances	$	(400)	$	(400)

The state tax valuation allowance, net of Federal benefit, was originally recorded in 2012, due to management's assessment that it is more likely than not that certain deferred tax assets recorded for the difference between the book basis and the state tax basis in certain tax credit limited partnership investments (LPs) will not be realized. Management anticipates that the remaining excess state tax basis realized upon termination of these partnerships will be a capital loss upon disposition, and that capital loss may not be deductible in some of the Company's state tax jurisdictions.

The valuation allowance as of December 31, 2024 is subject to change in the future as the Company continues to periodically assess the likelihood of realizing its deferred tax assets.

F-56

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Tax Attributes

At December 31, 2024, the Company has no remaining federal net operating loss carryforwards.

State net operating loss carryforwards, net of valuation allowance described above, are expected to be utilized in the future and begin to expire in 2035. The related gross deferred tax asset is $99 thousand.

Unrecognized Tax Benefits

On a periodic basis, the Company evaluates its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This evaluation takes into consideration the status of taxing authorities’ current examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment in relation to uncertain tax positions.

The following table presents changes in unrecognized tax benefits for the years ended December 31, 2024, 2023, and 2022:

(In thousands)	2024		2023		2022
Unrecognized tax benefits at January 1	$	1,824	$	1,042	$	1,025
Increase in gross amounts of tax positions related to prior years	1,456		782		17
Decrease in gross amounts of tax positions related to prior years	(1,182)		—		—
Unrecognized tax benefits at December 31	$	2,098	$	1,824	$	1,042

It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may change from the reevaluation of uncertain tax positions arising in examinations, in appeals, or in the courts, or from the closure of tax statutes. The Company does not expect any significant changes in unrecognized tax benefits during the next twelve months.

All of the Company’s unrecognized tax benefits, if recognized, would be recorded as a component of income tax expense, therefore, affecting the effective tax rate. The Company recognizes interest and penalties, if any, related to the liability for uncertain tax positions as a component of income tax expense. The accrual for interest and penalties was not material for all years presented.

The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states. In the normal course of business, the Company is subject to U.S. federal, state, and local income tax examinations by tax authorities. Other than open statutes of limitation pertaining specifically to the amended returns filed for 2015 through 2018 to claim 2020 NOL carryback refunds, the Company is no longer subject to examination for tax years prior to 2021 including any related income tax filings from its recent acquisitions. The Company has been selected for a federal income tax audit for the years 2017 through 2020 pertaining to the amended returns filed. The Company has been selected for an income tax audit in the state of Connecticut for tax years 2019, 2020, and 2021, as well as an income tax audit in the state of Wisconsin for tax years 2018, 2019, and 2020.

F-57

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14.    DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

At year-end 2024, the Company held derivatives with a total notional amount of $4.9 billion. That amount included $0.6 billion in interest rate swap derivatives and $0.2 billion in interest rate collars that were designated as cash flow hedges for accounting purposes. The Company had economic hedges and non-hedging derivatives totaling $4.1 billion and $10.5 million, respectively, which are not designated as hedges for accounting purposes and are therefore recorded at fair value with changes in fair value recorded directly through earnings. Economic hedges included interest rate swaps totaling $3.7 billion, risk participation agreements with dealer banks of $345.4 million, and $3.0 million in forward commitment contracts.

As part of the Company’s risk management strategy, the Company enters into interest rate swap agreements to mitigate the interest rate risk inherent in certain of the Company’s assets and liabilities. Interest rate swap agreements involve the risk of dealing with both Bank customers and institutional derivative counterparties and their ability to meet contractual terms. The agreements are entered into with counterparties that meet established credit standards and contain master netting and collateral provisions protecting the at-risk party. The derivatives program is overseen by the Risk Management, Capital and Compliance Committee of the Company’s Board of Directors. Based on adherence to the Company’s credit standards and the presence of the netting and collateral provisions, the Company believes that the credit risk inherent in these contracts was not significant at December 31, 2024.

The Company had no pledged collateral to derivative counterparties in the form of cash at year-end 2024. The Company had pledged securities to derivative counterparties with an amortized cost of $9.6 million and a fair value of $9.1 million at year-end 2024. The Company had no pledged collateral to derivative counterparties in the form of cash at year-end 2023. The Company had pledged securities to derivative counterparties with an amortized cost of $9.8 million and a fair value of $9.6 million at year-end 2023. The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back economic hedges. However certain language is written into the International Swaps Dealers Association, Inc. (“ISDA”) and loan documents where, in default situations, the Bank is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. The Company may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions.

F-58

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Information about interest rate swap agreements and non-hedging derivative assets and liabilities at December 31, 2024 follows:

	Notional Amount		Weighted Average Maturity	Weighted Average Rate				Estimated Fair Value Asset (Liability)
December 31, 2024				Received		Contract pay rate
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Interest rate swaps on commercial loans (1)	$	600,000	0.9	3.64	%	4.53	%	$	—
Interest rate collars on commercial loans	200,000		1.5					193
Total cash flow hedges	800,000							193
Economic hedges:
Interest rate swap on tax advantaged economic development bond	$	5,297	4.9	5.03	%	5.09	%	$	(79)
Interest rate swaps on loans with commercial loan customers (1)	1,859,480		4.5	4.65	%	5.35	%	(72,911)
Reverse interest rate swaps on loans with commercial loan customers (1)	1,859,480		4.5	5.35	%	4.65	%	41,501
Risk participation agreements with dealer banks	345,367		5.1					56
Forward sale commitments	2,991		0.2					34
Total economic hedges	4,072,615							(31,399)
Non-hedging derivatives:
Commitments to lend	10,512		0.2					90
Total non-hedging derivatives	10,512							90
Total	$	4,883,127						$	(31,116)

(1) Fair value estimates include the impact of $28.8 million settled to market contract agreements.

F-59

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Information about interest rate swap agreements and non-hedging derivative asset and liabilities at December 31, 2023 follows:

	Notional Amount		Weighted Average Maturity	Weighted Average Rate				Estimated Fair Value Asset (Liability)
December 31, 2023				Received		Contract pay rate
	(In thousands)		(In years)					(In thousands)
Cash flow hedges:
Interest rate swaps on commercial loans (1)	$	600,000	1.9	3.64	%	5.35	%	$	—
Interest rate collars on commercial loans	200,000		2.5					1,658
Total cash flow hedges	800,000							1,658
Economic hedges:
Interest rate swap on tax advantaged economic development bond	$	6,202	5.9	5.82	%	5.09	%	$	(172)
Interest rate swaps on loans with commercial loan customers	1,795,562		4.9	4.36	%	6.27	%	(63,865)
Reverse interest rate swaps on loans with commercial loan customers (1)	1,795,562		4.9	6.27	%	4.36	%	32,053
Risk participation agreements with dealer banks	376,553		5.5					(18)
Forward sale commitments	2,207		0.2					21
Total economic hedges	3,976,086							(31,981)
Non-hedging derivatives:
Commitments to lend	11,104		0.2					34
Total non-hedging derivatives	11,104							34
Total	$	4,787,190						$	(30,289)

(1) Fair value estimates include the impact of $26.7 million settled to market contract agreements.

F-60

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cash flow hedges

The effective portion of unrealized changes in the fair value of derivatives accounted for as cash flow hedges is reported in other comprehensive income/(loss) and subsequently reclassified to earnings in the same period or periods during which the hedged transaction is forecasted to affect earnings. Each quarter, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged item or transaction. The ineffective portion of changes in the fair value of the derivatives is recognized directly in earnings. All cash flow hedges are considered highly effective.

As of December 31, 2024, the Company had eight interest rate swap contracts with a notional value of $600.0 million. The interest rate swaps have durations of one to two years. This hedge strategy converts commercial variable rate loans to fixed interest rates, thereby protecting the Company from floating interest rate variability.

As of December 31, 2024, the Company had two interest rate collars. The first interest rate collar has a 3.00% floor and a 5.75% cap with a notional value of $100.0 million. The second interest rate collar has a 3.25% floor and a 5.75% cap with a notional value of $100.0 million. The interest rate collars have durations of one to two years. The structure of these instruments is such that the Company pays the counterparty an incremental amount if the collar index exceeds the cap rate. Conversely, the Company receives an incremental amount if the index falls below the floor rate. No payments are required if the collar index falls between the cap and floor rates.

Amounts included in the Consolidated Statements of Income and in the other comprehensive income/(loss) section of the Consolidated Statements of Comprehensive Income/(Loss) (related to interest rate derivatives designated as hedges of cash flows), were as follows:

	Years Ended December 31,
(In thousands)	2024		2023		2022
Interest rate swaps and collars on commercial loans:
Unrealized gain/(loss) recognized in accumulated other comprehensive loss	$	596	$	1,770	$	(6,667)
Less: Reclassification of unrealized (loss) from accumulated other comprehensive loss to interest income	(632)		(632)		—
Net tax benefit/(expense) on items recognized in accumulated other comprehensive income	(321)		(630)		1,789
Other comprehensive gain/(loss) recorded in accumulated other comprehensive income/(loss), net of reclassification adjustments and tax effects	$	907	$	1,772	$	(4,878)
Net interest expense recognized on hedged commercial loans	$	9,889	$	9,026	$	(15)

F-61

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Economic hedges

As of December 31, 2024 the Company has an interest rate swap with a $5.3 million notional amount to swap out the fixed rate of interest on an economic development bond bearing a fixed rate of 5.09%, currently within the Company’s trading portfolio under the fair value option, in exchange for a SOFR-based floating rate. The intent of the economic hedge is to improve the Company’s asset sensitivity to changing interest rates in anticipation of favorable average floating rates of interest over the 21-year life of the bond. The fair value changes of the economic development bond are mostly offset by fair value changes of the related interest rate swap.

The Company also offers certain derivative products directly to qualified commercial borrowers. The Company economically hedges derivative transactions executed with commercial borrowers by entering into mirror-image, offsetting derivatives with third-party financial institutions. The transaction allows the Company’s customer to convert a variable-rate loan to a fixed rate loan. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts mostly offset each other in earnings. There was no credit valuation loss adjustment arising from the difference in credit worthiness of the commercial loan and financial institution counterparties as of December 31, 2024. The interest income and expense on these mirror image swaps exactly offset each other.

The Company has risk participation agreements with dealer banks. Risk participation agreements occur when the Company participates on a loan and a swap where another bank is the lead. The Company earns a fee to take on the risk associated with having to make the lead bank whole on Berkshire’s portion of the pro-rated swap should the borrower default.

The Company utilizes forward sale commitments to hedge interest rate risk and the associated effects on the fair value of interest rate lock commitments and loans held for sale. The forward sale commitments are accounted for as derivatives with changes in fair value recorded in current period earnings.

The company uses the following types of forward sale commitments contracts:

•Best efforts loan sales,

•Mandatory delivery loan sales, and

•To be announced (TBA) mortgage-backed securities sales.

A best efforts contract refers to a loan sales agreement where the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. The Company may enter into a best efforts contract once the price is known, which is shortly after the potential borrower’s interest rate is locked.

A mandatory delivery contract is a loan sales agreement where the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. Generally, the Company may enter into mandatory delivery contracts shortly after the loan closes with a customer.

The Company may sell to-be-announced mortgage-backed securities to hedge the changes in fair value of interest rate lock commitments and held for sale loans, which do not have corresponding best efforts or mandatory delivery contracts. These security sales transactions are closed once mandatory contracts are written. On the closing date the price of the security is locked-in, and the sale is paired-off with a purchase of the same security. Settlement of the security purchase/sale transaction is done with cash on a net-basis.

F-62

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-hedging derivatives

The Company enters into commitments to lend for residential mortgage loans, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time. Commitments that relate to the origination of mortgage loans that will be held for sale are considered derivative financial instruments under applicable accounting guidance. Outstanding commitments expose the Company to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The commitments are free-standing derivatives which are carried at fair value with changes recorded in non-interest income in the Company’s Consolidated Statements of Income. Changes in the fair value of commitments subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time.

Amounts included in the Consolidated Statements of Income related to economic hedges and non-hedging derivatives were as follows:

	Years Ended December 31,
(In thousands)	2024		2023		2022
Economic hedges
Interest rate swap on industrial revenue bond:
Unrealized gain recognized in other non-interest income	$	93	$	21	$	941
Interest rate swaps on loans with commercial loan customers:
Unrealized (loss)/gain recognized in other non-interest income	(9,108)		31,310		(171,272)
Favorable change in credit valuation adjustment recognized in other non-interest income	—		—		1,809
Reverse interest rate swaps on loans with commercial loan customers:
Unrealized gain/(loss) recognized in other non-interest income	9,108		(31,310)		171,272
Risk Participation Agreements:
Unrealized gain/(loss) recognized in other non-interest income	74		(74)		(521)
Forward Commitments:
Unrealized gain/(loss) recognized in other non-interest income	13		13		(126)
Non-hedging derivatives
Commitments to lend:
Unrealized gain/(loss) recognized in other non-interest income	$	56	$	17	$	(107)
Realized gain in other non-interest income	1,509		536		462

F-63

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Assets and Liabilities Subject to Enforceable Master Netting Arrangements

Interest Rate Swap Agreements (“Swap Agreements”)

The Company enters into swap agreements to facilitate the risk management strategies for commercial banking customers. The Company mitigates this risk by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s Consolidated Balance Sheets. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral generally in the form of marketable securities is received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds.

The Company had net asset positions with its financial institution counterparties totaling $44.8 million and $39.8 million as of December 31, 2024 and December 31, 2023, respectively. The Company had net asset positions with its commercial banking counterparties totaling $3.1 million and $6.0 million as of December 31, 2024 and December 31, 2023, respectively.

The Company had net liability positions with its financial institution counterparties totaling $3.1 million and $6.1 million as of December 31, 2024 and December 31, 2023, respectively. The Company had net liability positions with its commercial banking counterparties totaling $76.0 million and $69.8 million as of December 31, 2024 and December 31, 2023, respectively.

The following table presents the assets and liabilities subject to an enforceable master netting arrangement as of December 31, 2024 and December 31, 2023:

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Condition		Net Amounts of Assets Presented in the Statements of Condition		Gross Amounts Not Offset in the Statements of Condition
							Financial Instruments		Cash Collateral Received
(in thousands)											Net Amount
As of December 31, 2024
Interest Rate Swap Agreements:
Institutional counterparties	$	76,242	$	(31,410)	$	44,832	$	—	$	(32,500)	$	12,332
Commercial counterparties	3,092		—		3,092		—		—		3,092
Total	$	79,334	$	(31,410)	$	47,924	$	—	$	(32,500)	$	15,424

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Condition		Net Amounts of Liabilities Presented in the Statement of Condition		Gross Amounts Not Offset in the Statements of Condition
							Financial Instruments		Cash Collateral Received
(in thousands)											Net Amount
As of December 31, 2024
Interest Rate Swap Agreements:
Institutional counterparties	$	(5,741)	$	2,659	$	(3,082)	$	9,078	$	—	$	5,996
Commercial counterparties	(76,003)		—		(76,003)		—		—		(76,003)
Total	$	(81,744)	$	2,659	$	(79,085)	$	9,078	$	—	$	(70,007)

F-64

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Offsetting of Financial Assets and Derivative Assets

	Gross Amounts of Recognized Assets		Gross Amounts Offset in the Statements of Condition		Net Amounts of Assets Presented in the Statements of Condition		Gross Amounts Not Offset in the Statements of Condition
							Financial Instruments		Cash Collateral Received
(in thousands)											Net Amount
As of December 31, 2023
Interest Rate Swap Agreements:
Institutional counterparties	$	71,579	$	(31,812)	$	39,767	$	—	$	—	$	39,767
Commercial counterparties	5,992		—		5,992		—		—		5,992
Total	$	77,571	$	(31,812)	$	45,759	$	—	$	—	$	45,759

Offsetting of Financial Liabilities and Derivative Liabilities

	Gross Amounts of Recognized Liabilities		Gross Amounts Offset in the Statements of Condition		Net Amounts of Liabilities Presented in the Statement of Condition		Gross Amounts Not Offset in the Statements of Condition
							Financial Instruments		Cash Collateral Received
(in thousands)											Net Amount
As of December 31, 2023
Interest Rate Swap Agreements:
Institutional counterparties	$	(11,277)	$	5,142	$	(6,135)	$	9,633	$	—	$	3,498
Commercial counterparties	(69,796)		—		(69,796)		—		—		(69,796)
Total	$	(81,073)	$	5,142	$	(75,931)	$	9,633	$	—	$	(66,298)

F-65

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15.    LEASES

Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches, ATM locations, and office space. Most of the Company’s leases are classified as operating leases. At December 31, 2024, lease expiration dates ranged from 1 month to 15 years.

The following table represents the Consolidated Balance Sheets classification of the Company’s right-of-use (“ROU”) assets and lease liabilities:

(In thousands)		December 31, 2024		December 31, 2023
Lease Right-of-Use Assets	Classification
Operating lease right-of-use assets	Other assets	$	50,195	$	47,348
Finance lease right-of-use assets	Premises and equipment, net	629		5,597
Total Lease Right-of-Use Assets		$	50,824	$	52,945
Lease Liabilities
Operating lease liabilities	Other liabilities	$	55,986	$	53,026
Finance lease liabilities	Other liabilities	891		8,681
Total Lease Liabilities		$	56,877	$	61,707

Supplemental information related to leases was as follows:

	December 31, 2024		December 31, 2023
Weighted-Average Remaining Lease Term (in years)
Operating leases	8.1		8.3
Finance leases	13.0		10.8
Weighted-Average Discount Rate
Operating leases	3.53	%	2.90	%
Finance leases	5.00	%	5.00	%

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated.

The Company does not have any material sub-lease agreements.

Lease expense for operating leases for the year ended December 31, 2024 was $8.9 million. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

Lease expense for operating leases for the year ended December 31, 2023 was $9.1 million. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

Lease expense for operating leases for the year ended December 31, 2022 was $9.7 million. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities.

F-66

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Supplemental cash flow information related to leases was as follows:

(In thousands)	December 31, 2024		December 31, 2023		December 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	8,302	$	9,009	$	9,438
Operating cash flows from finance leases	46		446		476
Financing cash flows from finance leases	47		593		555

The following table presents a maturity analysis of the Company’s lease liability by lease classification at December 31, 2024:

(In thousands)	Operating Leases		Finance Leases
2025	$	9,053	$	93
2026	9,194		93
2027	8,507		93
2028	7,400		93
2029	6,494		93
Thereafter	23,250		744
Total undiscounted lease payments	63,898		1,209
Less amounts representing interest	(7,912)		(318)
Lease liability	$	55,986	$	891

F-67

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 16. OTHER COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE SHEET ACTIVITIES

Credit Related Financial Instruments. The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit, and interest rate risk in excess of the amount recognized in the accompanying Consolidated Balance Sheets.

The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. A summary of financial instruments outstanding whose contract amounts represent credit risk is as follows at year-end:

(In thousands)	2024		2023
Commitments to originate new loans	$	308,480	$	256,877
Unused funds on commercial and other lines of credit	1,075,159		1,146,415
Unadvanced funds on home equity lines of credit	335,878		347,543
Unadvanced funds on construction and real estate loans	365,235		467,702
Standby letters of credit	34,042		18,975
Total	$	2,118,794	$	2,237,512

Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis.

Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. These letters of credit are primarily issued to support borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company considers standby letters of credit to be guarantees and the amount of the recorded liability related to such guarantees was not material at year-end 2024 and 2023.

The Company has $10.9 million of commitments remaining for historic tax credit investments as of December 31, 2024.

Employment and Change in Control Agreements. The Company and the Bank have change in control agreements with several officers which provide a severance payment in the event employment is terminated in conjunction with a defined change in control.

Legal Claims. Various legal claims arise from time to time in the normal course of business. As of December 31, 2024, neither the Company nor the Bank was involved in any pending legal proceedings believed by management to be material, that are not accrued for, to the Company’s financial condition or results of operations.

F-68

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17.    SHAREHOLDERS’ EQUITY AND EARNINGS PER COMMON SHARE

Minimum Regulatory Capital Requirements

The Company and Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if imposed, could have a direct material impact on the Company’s Consolidated Financial Statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors.

Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital to average assets (as defined). As of year-end 2024 and 2023, the Bank and the Company met the capital adequacy requirements. Regulators may set higher expected capital requirements in some cases based on their examinations.

At December 31, 2024, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels. The capital levels of both the Company and the Bank at December 31, 2024 also exceeded the minimum capital requirements including the currently applicable BASEL III capital conservation buffer of 1.875%.

As of year-end 2024 and 2023, the Bank met the conditions to be classified as “well capitalized” under the relevant regulatory framework. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the following tables.

F-69

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company and Bank’s actual and required capital amounts were as follows:

					Minimum Capital Requirement
	Actual
(Dollars in thousands)	Amount		Ratio		Amount		Ratio
December 31, 2024
Company (Consolidated)
Total capital to risk-weighted assets	$	1,505,487	15.45	%	$	779,790	8.00	%
Common Equity Tier 1 Capital to risk weighted assets	1,266,641		12.99		438,632		4.50
Tier 1 capital to risk-weighted assets	1,289,029		13.22		584,843		6.00
Tier 1 capital to average assets	1,289,029		10.97		389,895		4.00
Total risk-weighted assets	9,747,379		N/A		N/A		N/A
December 31, 2023
Company (Consolidated)
Total capital to risk-weighted assets	$	1,371,740	14.36	%	$	764,130	8.00	%
Common Equity Tier 1 Capital to risk weighted assets	1,149,620		12.04		429,823		4.50
Tier 1 capital to risk-weighted assets	1,171,957		12.27		573,098		6.00
Tier 1 capital to average assets	1,171,957		9.65		382,065		4.00
Total risk-weighted assets	9,551,627		N/A		N/A		N/A

					Minimum Capital Requirement				Minimum to be Well Capitalized Under Prompt Corrective Action Provisions
	Actual
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
December 31, 2024
Bank
Total capital to risk-weighted assets	$	1,342,307	13.78	%	$	779,226	8.00	%	$	974,032	10.00	%
Common Equity Tier 1 Capital to risk weighted assets	1,225,075		12.58		438,314		4.50		633,121		6.50
Tier 1 capital to risk-weighted assets	1,225,075		12.58		584,419		6.00		779,226		8.00
Tier 1 capital to average assets	1,225,075		10.44		389,613		4.00		487,016		5.00
Total risk-weighted assets	9,740,322		N/A		N/A		N/A		N/A		N/A
December 31, 2023
Bank
Total capital to risk-weighted assets	$	1,268,037	13.29	%	$	763,503	8.00	%	$	954,379	10.00	%
Common Equity Tier 1 Capital to risk weighted assets	1,167,282		12.23		429,470		4.50		620,346		6.50
Tier 1 capital to risk-weighted assets	1,167,282		12.23		572,627		6.00		763,503		8.00
Tier 1 capital to average assets	1,167,282		9.61		381,751		4.00		477,189		5.00
Total risk-weighted assets	9,543,786		N/A		N/A		N/A		N/A		N/A

F-70

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Common stock

The Bank is subject to dividend restrictions imposed by various regulators, including a limitation on the total of all dividends that the Bank may pay to the Company in any calendar year. The total of all dividends shall not exceed the Bank’s net income for the current year (as defined by statute), plus the Bank’s net income retained for the two previous years, without regulatory approval. Dividends from the Bank are an important source of funds to the Company to make dividend payments on its common, to make payments on its borrowings, and for its other cash needs. The ability of the Company and the Bank to pay dividends is dependent on regulatory policies and regulatory capital requirements. The ability to pay such dividends in the future may be adversely affected by new legislation or regulations, or by changes in regulatory policies relating to capital, safety and soundness, and other regulatory concerns.

The payment of dividends by the Company is subject to Delaware law, which generally limits dividends to an amount equal to an excess of the net assets of a company (the amount by which total assets exceed total liabilities) over statutory capital, or if there is no excess, to the Company’s net profits for the current and/or immediately preceding fiscal year.

Accumulated other comprehensive income

Year-end components of accumulated other comprehensive (loss) are as follows:

(In thousands)	2024		2023
Other accumulated comprehensive (loss), before tax:
Net unrealized holding (loss) on AFS securities	$	(142,127)	$	(188,927)
Net (loss) on effective cash flow hedging derivatives	(3,037)		(4,265)
Net unrealized holding (loss) on pension plans	365		(528)
Income taxes related to items of accumulated other comprehensive (loss):
Net unrealized holding loss on AFS securities	37,716		49,401
Net loss on effective cash flow hedging derivatives	838		1,159
Net unrealized holding loss on pension plans	(98)		144
Accumulated other comprehensive (loss)	$	(106,343)	$	(143,016)

F-71

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the components of other comprehensive income/(loss) for the years ended December 31, 2024, 2023, and 2022:

(In thousands)	Before Tax		Tax Effect		Net of Tax
Year Ended December 31, 2024
Net unrealized holding gain on AFS securities:
Net unrealized (loss) arising during the period	$	(3,137)	$	1,878	$	(1,259)
Less: reclassification adjustment for (losses) realized in net income	(49,937)		13,563		(36,374)
Net unrealized holding gain on AFS securities	46,800		(11,685)		35,115
Net gain on cash flow hedging derivatives:
Net unrealized gain arising during the period	596		(149)		447
Less: reclassification adjustment for (losses) realized in net income	(632)		172		(460)
Net gain on cash flow hedging derivatives	1,228		(321)		907
Net unrealized holding gain on pension plans
Net unrealized gain arising during the period	893		(242)		651
Less: reclassification adjustment for (losses) realized in net income	—		—		—
Net unrealized holding gain on pension plans	893		(242)		651
Other comprehensive income	$	48,921	$	(12,248)	$	36,673

(In thousands)	Before Tax		Tax Effect		Net of Tax
Year Ended December 31, 2023
Net unrealized holding gain on AFS securities:
Net unrealized gain arising during the period	$	22,903	$	(5,122)	$	17,781
Less: reclassification adjustment for (losses) realized in net income	(25,057)		6,806		(18,251)
Net unrealized holding gain on AFS securities	47,960		(11,928)		36,032
Net gain on cash flow hedging derivatives:
Net unrealized gain arising during the period	1,770		(458)		1,312
Less: reclassification adjustment for (losses) realized in net income	(632)		172		(460)
Net gain on cash flow hedging derivatives	2,402		(630)		1,772
Net unrealized holding gain on pension plans
Net unrealized gain arising during the period	316		(84)		232
Less: reclassification adjustment for (losses) realized in net income	—		—		—
Net unrealized holding gain on pension plans	316		(84)		232
Other comprehensive income	$	50,678	$	(12,642)	$	38,036

F-72

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(In thousands)	Before Tax		Tax Effect		Net of Tax
Year Ended December 31, 2022
Net unrealized holding (loss) on AFS securities:
Net unrealized (loss) arising during the period	$	(235,075)	$	60,920	$	(174,155)
Less: reclassification adjustment for gains realized in net income	6		(2)		4
Net unrealized holding (loss) on AFS securities	(235,081)		60,922		(174,159)
Net (loss) on cash flow hedging derivatives:
Net unrealized (loss) arising during the period	$	(6,667)	$	1,789	$	(4,878)
Less: reclassification adjustment for (losses) realized in net income	—		—		—
Net (loss) on cash flow hedging derivatives	(6,667)		1,789		(4,878)
Net unrealized holding gain on pension plans
Net unrealized gain arising during the period	1,674		(446)		1,228
Less: reclassification adjustment for (losses) realized in net income	—		—		—
Net unrealized holding gain on pension plans	1,674		(446)		1,228
Other comprehensive (loss)	$	(240,074)	$	62,265	$	(177,809)

F-73

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the changes in each component of accumulated other comprehensive (loss)/income, for the years ended December 31, 2024, 2023, and 2022:

(in thousands)	Net unrealized holding gain (loss) on AFS Securities		Net loss on effective cash flow hedging derivatives		Net unrealized holding gain (loss) on pension plans		Total
Year Ended December 31, 2024
Balance at Beginning of Year	$	(139,525)	$	(3,106)	$	(385)	$	(143,016)
Other comprehensive income before reclassifications	(1,259)		447		651		(161)
Amounts reclassified from accumulated other comprehensive income	(36,374)		(460)		—		(36,834)
Total other comprehensive income	35,115		907		651		36,673
Balance at End of Period	$	(104,410)	$	(2,199)	$	266	$	(106,343)
Year Ended December 31, 2023
Balance at Beginning of Year	$	(175,557)	$	(4,878)	$	(617)	$	(181,052)
Other comprehensive (loss)/income before reclassifications	17,781		1,312		232		19,325
Amounts reclassified from accumulated other comprehensive income	(18,251)		(460)		—		(18,711)
Total other comprehensive (loss)/income	36,032		1,772		232		38,036
Balance at End of Period	$	(139,525)	$	(3,106)	$	(385)	$	(143,016)
Year Ended December 31, 2022
Balance at Beginning of Year	$	(1,398)	$	—	$	(1,845)	$	(3,243)
Other comprehensive (loss)/income before reclassifications	(174,155)		(4,878)		1,228		(177,805)
Amounts reclassified from accumulated other comprehensive income	4		—		—		4
Total other comprehensive (loss)/income	(174,159)		(4,878)		1,228		(177,809)
Balance at End of Period	$	(175,557)	$	(4,878)	$	(617)	$	(181,052)

F-74

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table presents the amounts reclassified out of each component of accumulated other comprehensive income/(loss) for the years ended December 31, 2024, 2023, and 2022:

							Affected Line Item in the Statement Where Net Income Is Presented
	Years Ended December 31,
(in thousands)	2024		2023		2022
Realized (losses)/gains on AFS securities:
	$	(49,937)	$	(25,057)	$	6	Non-interest income
	13,563		6,806		(2)		Tax expense
	(36,374)		(18,251)		4
Realized (losses) on cash flow hedging derivatives:
	(632)		(632)		—		Interest expense
	—		—		—		Non-interest expense
	172		172		—		Tax benefit
	(460)		(460)		—
Realized (losses) on pension plans:
	—		—		—		Non-interest expense
	—		—		—		Tax expense
	—		—		—
Total reclassifications for the period	$	(36,834)	$	(18,711)	$	4

F-75

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Earnings Per Common Share

Basic earnings per common share (“EPS”) excludes dilution and is computed by dividing net income applicable to common stock by the weighted average number of common shares outstanding for the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock options) were exercised or converted into additional common shares that would then share in the earnings of the entity. Diluted EPS is computed by dividing net income applicable to common stock by the weighted average number of common shares outstanding for the year, plus an incremental number of common-equivalent shares computed using the treasury stock method.

Earnings per common share has been computed based on the following (average diluted shares outstanding is calculated using the treasury stock method):

	Years Ended December 31,
(In thousands, except per share data)	2024		2023		2022
Net income	$	61,003	$	69,598	$	92,533
Average number of common shares issued	51,903		51,903		51,903
Less: average number of treasury shares	8,593		7,820		5,577
Less: average number of unvested stock award shares	802		795		762
Average number of basic common shares outstanding	42,508		43,288		45,564
Plus: dilutive effect of unvested stock award shares	253		216		345
Plus: dilutive effect of stock options outstanding	—		—		5
Average number of diluted common shares outstanding	42,761		43,504		45,914
Basic earnings per common share	$	1.44	$	1.61	$	2.03
Diluted earnings per common share	$	1.43	$	1.60	$	2.02

For the year ended 2024, 43 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations. For the year ended 2023, 49 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations. For the year ended 2022, 64 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations.

F-76

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 18.    STOCK-BASED COMPENSATION PLANS

The 2022 Equity Incentive Plan (the “2022 Plan”) permits the granting of a combination of Restricted Stock awards and incentive and non-qualified stock options (“Stock Options”) to employees and directors. A total of 1.2 million shares was authorized under the Plan. Awards may be granted as either Restricted Stock or Stock Options provided that any shares that are granted as Restricted Stock are counted against the share limit set forth as (1) one for every one share of Restricted Stock granted and (2) one for every one share of Stock Option granted. As of the 2022 Plan's effective date, all expired, canceled, and forfeited shares under the 2018 Plan are included in the 2022 Plan's available shares. As of year-end 2024, the Company had the ability to grant approximately 0.8 million shares under this plan.

A summary of activity in the Company’s stock compensation plans is shown below:

	Non-vested Stock Awards Outstanding			Stock Options Outstanding
(Shares in thousands)	Number of Shares	Weighted- Average Grant Date Fair Value		Number of Shares	Weighted- Average Exercise Price
Balance, December 31, 2023	785	$	24.92	49	$	26.46
Granted	500	23.25		—	—
Stock options exercised	—	—		(5)	24.71
Stock awards vested	(359)	12.56		—	—
Forfeited	(130)	25.55		—	—
Expired	—	—		—	—
Balance, December 31, 2024	796	$	24.94	44	$	26.65

Stock Awards

The total compensation cost for stock awards recognized as expense was $8.3 million, $7.5 million, and $7.3 million, in the years 2024, 2023, and 2022, respectively. The total recognized tax benefit associated with this compensation cost was $2.3 million, $2.0 million, and $2.0 million, respectively.

The weighted average fair value of stock awards granted was $23.25, $26.18, and $28.75 in 2024, 2023, and 2022, respectively. Stock awards vest over periods up to five years and are valued at the closing price of the stock on the grant date. Certain awards vest based on the Company's performance over established measurement periods. The total fair value of stock awards vested during 2024, 2023, and 2022 was $4.5 million, $5.6 million, and $5.1 million respectively. The unrecognized stock-based compensation expense related to unvested stock awards was $10.1 million as of year-end 2024. This amount is expected to be recognized over a weighted average period of two years.

F-77

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Option Awards

Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant, and vest over periods up to five years. The options grant the holder the right to acquire a share of the Company’s common stock for each option held, and have a contractual life of ten years. As of year-end 2024, the weighted average remaining contractual term for options outstanding is one year.

The Company generally issues shares from treasury stock as options are exercised. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The expected dividend yield and expected term are based on management estimates. The expected volatility is based on historical volatility. The risk-free interest rates for the expected term are based on the U.S. Treasury yield curve in effect at the time of the grant. The Company did not grant options during 2024 and 2023.

The total intrinsic value of options exercised during 2024 was $31 thousand. There were no options exercised during 2023. The total intrinsic value of options exercised during 2022 was $62 thousand. There was no expense pertaining to options vesting in 2024. The expense pertaining to options vesting was $1 thousand and $13 thousand for the years 2023 and 2022, respectively. The tax benefit associated with stock option expense for 2023 and 2022 was $0.2 thousand and $3 thousand, respectively. As of year-end 2024 and 2023, there was no unrecognized stock-based compensation expense related to unvested stock options. The unrecognized stock-based compensation expense related to unvested stock options as of year-end 2022 was $1 thousand.

F-78

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 19.    FAIR VALUE MEASUREMENTS

A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities that are carried at fair value.

Recurring Fair Value Measurements of Financial Instruments

The following table summarizes assets and liabilities measured at fair value on a recurring basis as of year-end 2024 and 2023 segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value:

	December 31, 2024
(In thousands)	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
Trading security	$	—	$	—	$	5,258	$	5,258
Available-for-sale securities:
U.S Treasuries	6,989		—		—		6,989
Municipal bonds and obligations	—		60,864		—		60,864
Agency collateralized mortgage obligations	—		264,562		—		264,562
Agency residential mortgage-backed securities	—		220,240		—		220,240
Agency commercial mortgage-backed securities	—		66,711		—		66,711
Corporate bonds	—		32,456		3,901		36,357
Marketable equity securities	—		655		—		655
Loans held for investment	—		—		325		325
Loans held for sale	—		3,076		—		3,076
Derivative assets	—		47,799		124		47,923
Capitalized servicing rights	—		—		1,706		1,706
Derivative liabilities	—		79,039		—		79,039

	December 31, 2023
	Level 1 Inputs		Level 2 Inputs		Level 3 Inputs		Total Fair Value
(In thousands)
Trading security	$	—	$	—	$	6,142	$	6,142
Securities available for sale:
U.S Treasuries	7,981		—		—		7,981
Municipal bonds and obligations	—		63,853		—		63,853
Agency collateralized mortgage obligations	—		347,874		—		347,874
Agency residential mortgage-backed securities	—		417,480		—		417,480
Agency commercial mortgage-backed securities	—		145,326		—		145,326
Corporate bonds	—		35,192		3,923		39,115
Other bonds and obligations	—		656				656
Marketable equity securities	13,029		—		—		13,029
Loans held for investment at fair value	—		—		374		374
Loans held for sale	—		2,237		—		2,237
Derivative assets	—		45,613		55		45,668
Capitalized servicing rights	—		—		1,526		1,526
Derivative liabilities	—		75,957		—		75,957

F-79

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

During the years ended December 31, 2024, December 31, 2023 and December 31, 2022, there were no transfers between Level 1, 2 and 3.

Trading Security at Fair Value. The Company holds one security designated as a trading security. It is a tax advantaged economic development bond issued to the Company by a local nonprofit which provides wellness and health programs. The determination of the fair value for this security is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable and there is little to no market activity in the security; therefore, the security meets the definition of a Level 3 security. The discount rate used in the valuation of the security is sensitive to movements in the 3-month SOFR rate.

Securities Available for Sale and Equity Securities. Equity securities classified as Level 1 consist of publicly-traded equity securities for which the fair values can be obtained through quoted market prices in active exchange markets. Equity securities classified as Level 2 consist of securities with infrequent trades in active exchange markets, and pricing is primarily sourced from third party pricing services. AFS securities classified as Level 2 include most of the Company’s debt securities. The pricing on Level 2 and Level 3 was primarily sourced from third party pricing services, overseen by management, and is based on models that consider standard input factors such as dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and condition, among other things. Level 3 pricing includes inputs unobservable to market participants.

Loans Held for Investment. The Company’s held for investment loan portfolio includes loans originated by Company and loans acquired through business combinations. The Company intends to hold these assets until maturity as a part of its business operations. For one acquired portfolio subset, the Company previously accounted for these purchased-credit impaired loans as a pool under ASC 310, as they were determined to have common risk characteristics. These loans were recorded at fair value on acquisition date and subsequently evaluated for impairment collectively. Upon adoption of ASC 326, the Company elected the fair value option on this portfolio, recognizing a $11.2 million fair value write-down charged to Retained Earnings, net of deferred tax impact, as of January 1, 2020. The fair value of this loan portfolio is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable; therefore, the loans meet the definition of Level 3 assets. The discount rate used in the valuation is consistent with assets that have significant credit deterioration. The cash flow assumptions include payment schedules for loans with current payment histories and estimated collateral value for delinquent loans. All of these loans were nonperforming as of December 31, 2024.

					Aggregate Fair Value
December 31, 2024	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for investment at fair value	$	325	$	6,541	$	(6,216)

					Aggregate Fair Value
December 31, 2023	Aggregate		Aggregate		Less Aggregate
(In thousands)	Fair Value		Unpaid Principal		Unpaid Principal
Loans held for investment at fair value	$	374	$	8,809	$	(8,435)

F-80

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Loans held for sale. The Company elected the fair value option for all mortgage loans originated for sale ("HFS") that were originated for sale on or after May 1, 2012. Loans HFS are classified as Level 2 as the fair value is based on input factors such as quoted prices for similar loans in active markets.

	Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal
December 31, 2024 (In thousands)
Loans held for sale	$	3,076	$	3,015	$	61

	Aggregate Fair Value		Aggregate Unpaid Principal		Aggregate Fair Value Less Aggregate Unpaid Principal
December 31, 2023 (In thousands)
Loans held for sale	$	2,237	$	2,205	$	32

The changes in fair value of loans held for sale for the year ended December 31, 2024 were gains of $29 thousand. The changes in fair value of loans held for sale for the year ended December 31, 2023 were gains of $17 thousand. The changes in fair value of loans held for sale for the year ended December 31, 2022 were gains of $169 thousand. During 2024, originations of loans held for sale totaled $184 million and sales of loans originated for sale totaled $182 million. During 2023, originations of loans held for sale totaled $85 million and sales of loans originated for sale totaled $84 million. During 2022, originations of loans held for sale totaled $20 million and sales of loans originated for sale totaled $25 million.

Interest Rate Swaps. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves.

The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings.

Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of year-end 2024, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy.

Commitments to Lend. The Company enters into commitments to lend for residential mortgage loans intended for sale, which commit the Company to lend funds to a potential borrower at a certain interest rate and within a specified period of time. The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. However, this value is adjusted by a factor which considers the likelihood that the loan commitment will ultimately close, and by the non-refundable costs of originating the loan. The closing ratio is derived from the Bank’s internal data and is adjusted using significant management judgment. The costs to originate are primarily based on the Company’s internal commission rates that are not observable. As such, these commitments to lend are classified as Level 3 measurements.

Forward Sale Commitments. The Company utilizes forward sale commitments as economic hedges against potential changes in the values of the commitments to lend and loans originated for sale. To be announced (TBA) mortgage-backed securities forward commitment sales are used as hedging instruments, are classified as Level 1, and consist of publicly-traded debt securities for which identical fair values can be obtained through quoted market prices in active exchange markets. The fair values of the Company’s best efforts and mandatory delivery loan sale commitments are determined similarly to the commitments to lend using quoted prices in the market place that are observable. However, costs to originate and closing ratios included in the calculation are internally generated and

F-81

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

are based on management’s judgment and prior experience, which are considered factors that are not observable. As such, best efforts and mandatory forward sale commitments are classified as Level 3 measurements.

Capitalized Servicing Rights. The Company accounts for certain capitalized servicing rights at fair value in its Consolidated Financial Statements, as the Company is permitted to elect the fair value option for each specific instrument. A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

The table below presents the changes in Level 3 assets that were measured at fair value on a recurring basis at year-end 2024 and 2023:

	Assets (Liabilities)
(In thousands)	Trading Security		Securities Available for Sale		Loans Held for Investment		Commitments to Lend		Forward Commitments		Capitalized Servicing Rights
Balance as of December 31, 2022	$	6,708	$	4,000	$	605	$	17	$	8	$	1,846
Unrealized gain/(loss), net recognized in other non-interest income	294		—		(128)		305		13		(320)
Unrealized (loss) included in accumulated other comprehensive loss	—		(77)		—		—		—		—
Paydown of asset	(860)		—		(103)		—		—		—
Transfers to loans held for sale	—		—		—		(288)		—		—
Balance as of December 31, 2023	$	6,142	$	3,923	$	374	$	34	$	21	$	1,526
Unrealized gain/(loss), net recognized in other non-interest income	21		—		27		1,256		13		180
Unrealized (loss) in included in accumulated other comprehensive loss	—		(22)		—		—		—		—
Paydown of asset	(905)		—		(76)		—		—		—
Transfers to loans held for sale	—		—				(1,200)		—		—
Balance as of December 31, 2024	$	5,258	$	3,901	$	325	$	90	$	34	$	1,706
Unrealized (losses)/gains relating to instruments still held at December 31, 2024	$	(39)	$	(99)	$	—	$	90	$	34	$	—
Unrealized (losses)/gains relating to instruments still held at December 31, 2023	$	(60)	$	(77)	$	—	$	34	$	21	$	—

F-82

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Quantitative information about the significant unobservable inputs within Level 3 recurring assets/(liabilities) as of December 31, 2024 and 2023 are as follows:

	Fair Value				Significant Unobservable Input Value
(In thousands)	December 31, 2024		Valuation Techniques	Unobservable Inputs
Assets
Trading Security	$	5,258	Discounted Cash Flow	Discount Rate	3.36		%
Securities Available for Sale	3,901		Indication from Market Maker	Price	97.53		%
Loans held for investment	325		Discounted Cash Flow	Discount Rate	25.00		%
				Collateral Value	$0.0 - $18.8
Commitments to Lend	90		Historical Trend	Closing Ratio	83.21		%
			Pricing Model	Origination Costs, per loan	$	3
Forward Commitments	34		Historical Trend	Closing Ratio	83.21		%
			Pricing Model	Origination Costs, per loan	$	3
Capitalized Servicing Rights	1,706		Discounted cash flow	Constant prepayment rate (CPR)	7.21		%
				Discount rate	10.09		%
Total	$	11,314

	Fair Value				Significant Unobservable Input Value
(In thousands)	December 31, 2023		Valuation Techniques	Unobservable Inputs
Assets
Trading Security	$	6,142	Discounted Cash Flow	Discount Rate	4.19		%
Securities Available for Sale	3,923		Indication from Market Maker	Price	98.07		%
Loans held for investment	374		Discounted Cash Flow	Discount Rate	25.00		%
				Collateral Value	$0.0 -$18.3
Commitments to Lend	34		Historical Trend	Closing Ratio	84.29		%
			Pricing Model	Origination Costs, per loan	$	3
Forward Commitments	21		Historical Trend	Closing Ratio	84.29		%
			Pricing Model	Origination Costs, per loan	$	3
Capitalized Servicing Rights	1,526		Discounted cash flow	Constant prepayment rate (CPR)	7.63		%
				Discount rate	11.08		%
Total	$	12,020

F-83

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Non-Recurring Fair Value Measurements

The Company is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured on a non-recurring basis.

	December 31, 2024		Fair Value Measurements as of December 31, 2024
(In thousands)	Level 3 Inputs		Level 3 Inputs
Assets
Individually evaluated loans	$	2,195	December 2024
Capitalized servicing rights	10,084		December 2024
Total	$	12,279

	December 31, 2023		Fair Value Measurements as of December 31, 2023
(In thousands)	Level 3 Inputs		Level 3 Inputs
Assets
Individually evaluated loans	$	4,395	December 2023
Capitalized servicing rights	10,569		December 2023
Total	$	14,964

Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets as of December 31, 2024 and 2023 are as follows:

(in thousands)	December 31, 2024		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Individually evaluated loans	$	2,195	Fair value of collateral	Discounted Cash Flow- Loss Severity	(100.00)% to (0.03)% ((66.97)%)
				Appraised value	$0 to $180 ($153)
Capitalized servicing rights	10,084		Discounted cash flow	Constant prepayment rate (CPR)	4.87% to 14.58% (13.33%)
				Discount rate	10.47% to 12.97% (11.56%)
Total Assets	$	12,279

(a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties.

F-84

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands)	December 31, 2023		Valuation Techniques	Unobservable Inputs	Range (Weighted Average) (a)
Assets
Individually evaluated loans	$	4,395	Fair value of collateral	Discounted Cash Flow- Loss Severity	(100.00)% to (0.08)% ((67.00)%)
				Appraised value	$0 to $3,389 ($2,774)
Capitalized servicing rights	10,569		Discounted cash flow	Constant prepayment rate (CPR)	5.43% to 17.15% (12.31%)
				Discount rate	10.09% to 16.59% (13.82%)
Total Assets	$	14,964

(a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties.

There were no Level 1 or Level 2 nonrecurring fair value measurements for year-end 2024 and 2023.

Individually evaluated loans. Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records non-recurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Non-recurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, real estate collateral related nonrecurring fair value measurement adjustments have generally been classified as Level 3. Estimates of fair value for other collateral that supports commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3.

Loans Transferred to Held for Sale. Once a decision has been made to sell loans not previously classified as held for sale, these loans are transferred into the held for sale category and carried at the lower of cost or fair value. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. The choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Nonrecurring fair value measurement adjustments that relate to real estate collateral have generally been classified as Level 3. Estimates of fair value for other collateral that supports commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3.

Capitalized loan servicing rights. A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy.

F-85

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Summary of Estimated Fair Values of Financial Instruments

The following tables summarize the estimated fair values, which represent exit price, and related carrying amounts, of the Company’s financial instruments. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company.

	December 31, 2024
	Carrying Amount		Fair Value
(In thousands)					Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	1,128,409	$	1,128,409	$	1,128,409	$	—	$	—
Trading security	5,258		5,258		—		—		5,258
Marketable equity securities	655		655		—		655		—
Securities available for sale	655,723		655,723		6,989		644,833		3,901
Securities held to maturity	507,658		433,382		—		432,280		1,102
FHLB stock and restricted equity securities	19,565		N/A		N/A		N/A		N/A
Net loans	9,270,294		8,984,103		—		—		8,984,103
Loans held for sale	3,076		3,076		—		3,076		—
Accrued interest receivable	49,410		49,410		—		49,410		—
Derivative assets	47,923		47,923		—		47,799		124
Financial Liabilities
Total deposits	10,375,204		10,367,636		—		10,367,636		—
Short-term debt	103,500		103,635		—		103,635		—
Long-term FHLB advances	212,982		209,736		—		209,736		—
Subordinated notes	121,612		110,447		—		110,447		—
Accrued interest payable	9,005		9,005		—		9,005		—
Derivative liabilities	79,039		79,039		—		79,039		—

	December 31, 2023
	Carrying Amount		Fair Value
(In thousands)					Level 1		Level 2		Level 3
Financial Assets
Cash and cash equivalents	$	1,203,244	$	1,203,244	$	1,203,244	$	—	$	—
Trading security	6,142		6,142		—		—		6,142
Marketable equity securities	13,029		13,029		13,029		—		—
Securities available for sale	1,022,285		1,022,285		7,981		1,010,381		3,923
Securities held to maturity	543,351		476,228		—		474,742		1,486
FHLB stock and restricted equity securities	22,689		N/A		N/A		N/A		N/A
Net loans	8,934,329		8,768,108		—		—		8,768,108
Loans held for sale	2,237		2,237		—		2,237		—
Accrued interest receivable	53,096		53,096		—		53,096		—
Derivative assets	45,668		45,668		—		45,613		55
Financial Liabilities
Total deposits	10,633,384		10,615,655		—		10,615,655		—
Short-term debt	260,000		260,035		—		260,035		—
Long-term FHLB advances	125,223		123,747		—		123,747		—
Subordinated notes	121,363		98,138		—		98,138		—
Accrued interest payable	13,766		13,766		—		13,766		—
Derivative liabilities	75,957		75,957		—		75,957		—

F-86

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 20.    CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY

Condensed financial information pertaining only to the Parent, Berkshire Hills Bancorp, is as follows.

CONDENSED BALANCE SHEETS

	December 31,
(In thousands)	2024		2023
Assets
Cash due from Berkshire Bank	$	163,605	$	98,452
Investment in subsidiaries	1,134,014		1,038,039
Other assets	218		399
Total assets	$	1,297,837	$	1,136,890
Liabilities and Shareholders’ Equity
Subordinated notes	$	121,612	$	121,363
Accrued expenses	8,801		3,306
Shareholders’ equity	1,167,424		1,012,221
Total liabilities and shareholders’ equity	$	1,297,837	$	1,136,890

CONDENSED STATEMENTS OF INCOME

	Years Ended December 31,
(In thousands)	2024		2023		2022
Income:
Dividends from subsidiaries	$	14,000	$	62,000	$	108,000
Other	53		50		23
Total income	14,053		62,050		108,023
Interest expense	5,697		5,697		7,044
Non-interest expenses	9,121		3,702		2,754
Total expense	14,818		9,399		9,798
Income before income taxes and equity in undistributed income of subsidiaries	(765)		52,651		98,225
Income tax (benefit)	(2,463)		(2,500)		(2,586)
Income before equity in undistributed income of subsidiaries	1,698		55,151		100,811
Equity in undistributed results of operations of subsidiaries	59,305		14,447		(8,278)
Net income	61,003		69,598		92,533
Comprehensive income/(loss)	$	97,676	$	107,634	$	(85,276)

F-87

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

CONDENSED STATEMENTS OF CASH FLOWS

	Years Ended December 31,
(In thousands)	2024		2023		2022
Cash flows from operating activities:
Net income	$	61,003	$	69,598	$	92,533
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in undistributed results of operations of subsidiaries	(59,305)		(14,447)		8,278
Other, net	11,569		8,688		5,998
Net cash provided by operating activities	13,267		63,839		106,809
Cash flows from investing activities:
Sale of securities	—		—		—
Net cash provided by investing activities	—		—		—
Cash flows from financing activities:
Proceeds from issuance of long term debt	—		—		98,032
Repayment of long term debt	—		—		(75,000)
Net proceeds from common stock	100,000		—		—
Payment to repurchase common stock	(17,536)		(23,844)		(124,519)
Common stock cash dividends paid	(30,940)		(31,707)		(24,527)
Other, net	362		142		281
Net cash (used) in financing activities	51,886		(55,409)		(125,733)
Net change in cash and cash equivalents	65,153		8,430		(18,924)
Cash and cash equivalents at beginning of year	98,452		90,022		108,946
Cash and cash equivalents at end of year	$	163,605	$	98,452	$	90,022

F-88

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 21.    QUARTERLY DATA (UNAUDITED)

Quarterly results of operations were as follows:

	2024								2023
(In thousands, except per share data)	Fourth Quarter		Third Quarter		Second Quarter		First Quarter		Fourth Quarter		Third Quarter		Second Quarter		First Quarter
Interest and dividend income	$	150,555	$	157,268	$	154,109	$	152,006	$	150,537	$	148,021	$	145,425	$	132,316
Interest expense	63,700		69,209		65,577		63,866		62,116		57,687		52,666		34,783
Net interest income	86,855		88,059		88,532		88,140		88,421		90,334		92,759		97,533
Non-interest income	23,325		37,555		20,133		(32,599)		(8,383)		17,465		17,094		16,606
Total revenue	110,180		125,614		108,665		55,541		80,038		107,799		109,853		114,139
Provision expense for credit losses	6,000		5,500		6,499		6,000		7,000		8,000		8,000		8,999
Non-interest expense	77,575		71,960		70,931		76,020		78,992		76,513		74,048		71,955
Income before income taxes	26,605		48,154		31,235		(26,479)		(5,954)		23,286		27,805		33,185
Income tax expense/(benefit)	6,948		10,645		7,210		(6,291)		(4,509)		3,741		3,944		5,548
Net income	$	19,657	$	37,509	$	24,025	$	(20,188)	$	(1,445)	$	19,545	$	23,861	$	27,637
Basic earnings per share	$	0.46	$	0.89	$	0.57	$	(0.47)	$	(0.03)	$	0.45	$	0.55	$	0.63
Diluted earnings per share	$	0.46	$	0.88	$	0.57	$	(0.47)	$	(0.03)	$	0.45	$	0.55	$	0.63
Weighted average common shares outstanding:
Basic	42,661		42,170		42,437		42,777		42,852		43,164		43,443		43,693
Diluted	43,064		42,454		42,508		43,028		43,101		43,347		43,532		44,036

F-89

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 22.    NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES

Presented below is net interest income after provision for credit losses for the three years ended 2024, 2023 and 2022, respectively:

	Years Ended December 31,
(In thousands)	2024		2023		2022
Net interest income	$	351,586	$	369,047	$	344,597
Provision expense for credit losses	23,999		31,999		11,000
Net interest income after provision for credit losses	327,587		337,048		333,597
Total non-interest income	48,414		42,782		68,937
Total non-interest expense	296,486		301,508		288,716
Income before income taxes	79,515		78,322		113,818
Income tax expense	18,512		8,724		21,285
Net income	61,003		69,598		92,533

F-90

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 23. TAX EQUITY INVESTMENTS

The Company typically accounts for tax equity investments using the proportional amortization method, if certain criteria are met. The election to account for tax equity investments using the proportional amortization method is done so on a tax credit program-by-tax credit program basis. Under the proportional amortization method, the Company amortizes the initial cost of the investment, which is inclusive of any delayed equity contributions, that are unconditional and legally binding or for equity contributions that are contingent on a future event, when that event becomes probable, in proportion to the income tax credits and other income tax benefits that are allocated to the Company over the period of the investment.

Under the proportional amortization method, the Company amortizes the initial cost of the investment, inclusive of delayed equity contributions, in proportion to the income tax credits and other income tax benefits that are allocated to the Company over the period of the investment. The net benefits of these investments, which are comprised of income tax credits and operating loss income tax benefits, net of investment amortization, are recognized in the Consolidated Statements of Income as a component of income tax expense. At December 31, 2024 and December 31, 2023 the carrying value of all tax equity investments was $35.6 million and $16.6 million, respectively, and were included in other assets on the Consolidated Balance Sheets.

The carrying value of the investments accounted for under PAM on December 31, 2024 included $18.7 million of delayed equity contributions described in the chart below. The delayed equity contributions were included in other liabilities on the Consolidated Balance Sheets.

As of December 31, 2024, the Company's delayed equity contributions were estimated to be paid as follows:

(In thousands)	Delayed Equity Contributions
2025	$	11,680
2026	3,921
2027	2,887
2028	18
Thereafter	237
Total delayed equity contributions	$	18,743

The following table presents income tax credits and other income tax benefits, as well as amortization expense, associated with investments where the proportional amortization method of accounting has been applied for the periods indicated.

(In thousands)	Year Ended December 31, 2024
Provision for Income Taxes:
Amortization of tax credit investments	$	(10,420)
Tax credit and other tax benefit/(expense)	11,934
Total provision for income taxes	1,514

There was no material non-income tax related expense associated with these investments recorded outside of income tax expense for the year ended December 31, 2024. The non-income tax related activity associated with these investments recorded outside of the income tax expense for the year ended December 31, 2023 was $8.0 million. There were no impairment losses recorded on tax equity investments during the year ended December 31, 2024 and 2023, respectively.

F-91

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 24.    REVENUE

Revenue from contracts with customers in the scope of Topic 606 is recognized within noninterest income. The Company does not have any material significant payment terms as payment is received at or shortly after the satisfaction of the performance obligation. The value of unsatisfied performance obligations for contracts with an original expected length of one year or less are not disclosed. The Company recognizes incremental costs of obtaining contracts as an expense when incurred for contracts with a term of one year or less.

Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain non-interest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of Topic 606. Topic 606 is applicable to non-interest revenue streams such as wealth management fees, administrative services for customer deposit accounts, interchange fees, and sale of owned real estate properties.

The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the years ended 2024, 2023, and 2022, respectively.

	Years Ended December 31,
(In thousands)	2024		2023		2022
Non-interest income
In-scope of Topic 606:
Service charges on deposit accounts	$	24,084	$	24,160	$	22,396
Wealth management fees	10,840		10,197		10,008
Interchange income	8,298		8,395		8,470
Non-interest income (in-scope of Topic 606)	$	43,222	$	42,752	$	40,874
Non-interest income (out-of-scope of Topic 606)	5,192		30		28,063
Total non-interest income	$	48,414	$	42,782	$	68,937

Non-interest income streams in-scope of Topic 606 are discussed below.

Service Charges on Deposit Accounts. Service charges on deposit accounts consist of monthly service fees (i.e. business analysis fees and consumer service charges) and other deposit account related fees. The Company's performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Other deposit account related fees are largely transactional based, and therefore, the Company's performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. The Company may, from time to time, waive certain fees (e.g., NSF fee) for customers but generally do not reduce the transaction price to reflect variability for future reversals due to the insignificance of the amounts. Waiver of fees reduces the revenue in the period the waiver is granted to the customer.

Wealth Management Fees. Wealth management fees are primarily comprised of fees earned from consultative investment management, trust administration, tax return preparation, and financial planning. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based on the daily accrual of the market value of the investment accounts and the applicable fee rate.

Interchange Fees. Interchange fees are transaction fees paid to the card-issuing bank to cover handling costs, fraud and bad debt costs, and the risk involved in approving the payment. Due to the day-to-day nature of these fees they are settled on a daily basis and are accounted for as they are received.

Gains/Losses on Sales of OREO. The sale of OREO and other nonfinancial assets are accounted for with the derecognition of the asset in question once a contract exists and control of the asset has been transferred to the buyer. The gain or loss on the sale is calculated as the difference between the carrying value of the asset and the transaction price.

F-92

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 25. BRANCH SALE

During the third quarter of 2024, the Company completed the sale of ten of the Bank’s branches in upstate and eastern New York. The sale was made pursuant to definitive agreements entered into on March 4, 2024 with three buyers. The sale consisted of three separate transactions, which were completed during the third quarter of 2024. In the aggregate, the Bank sold $383 million in deposits and $50 million of related residential mortgage and consumer loans, along with all branch premises and equipment. The three buyers also assumed related operations and the employment of all associated staff. The sale excluded the Bank’s commercial banking business. The Company recorded a $16.0 million pre-tax gain related to the branch sale.

NOTE 26. PENDING MERGER

On December 16, 2024, Berkshire Hills Bancorp, Inc., a Delaware corporation (“Berkshire”), Commerce Acquisition Sub, Inc., a Delaware corporation and a wholly owned subsidiary of Berkshire (“Merger Sub”), and Brookline Bancorp, Inc., a Delaware corporation (“Brookline”), entered into an Agreement and Plan of Merger (the “Merger Agreement”). The Merger Agreement provides that, upon the terms and subject to the conditions set forth therein, Merger Sub will merge with and into Brookline, with Brookline as the surviving entity (the “Merger”), and immediately following the Merger, Brookline will merge with and into Berkshire, with Berkshire as the surviving entity (the “Holdco Merger”). The Merger Agreement further provides that immediately following the Merger, Berkshire Bank, a Massachusetts trust company and a wholly owned subsidiary of Berkshire, Bank Rhode Island, a Rhode Island-chartered bank and a wholly owned subsidiary of Brookline, and PCSB Bank, a New York-chartered bank and a wholly owned subsidiary of Brookline, each will merge with and into Brookline Bank, a Massachusetts trust company and a wholly owned subsidiary of Brookline, with Brookline Bank as the surviving bank (the “Bank Mergers” and, together with the Merger and the Holdco Merger, the “Proposed Transaction”).

Upon the terms and subject to the conditions of the Merger Agreement, at the effective time of the Merger (the “Effective Time”), each share of common stock, $0.01 par value, of Brookline (“Brookline Common Stock”) outstanding immediately prior to the Effective Time, other than certain shares held by Brookline or Berkshire, will be converted into the right to receive 0.42 of a share (the “Exchange Ratio”) of common stock, par value $0.01 per share, of Berkshire (“Berkshire Common Stock”). Holders of Brookline Common Stock will receive cash in lieu of fractional shares of Berkshire Common Stock.

F-93