Brookline Bancorp
Annual Report 2024

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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
Commission File Number: 0-23695
BROOKLINE BANCORP, INC.
(Exact name of registrant as specified in its charter)
Delaware
04-3402944
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer Identification No.)
 
131 Clarendon Street
Boston
MA
02116
(Address of principal executive offices)
(Zip Code)
(617) 425-4600
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol(s)
Name of Each Exchange on Which Registered
Common Stock, par value of $0.01 per share
BRKL
Nasdaq Global Select Market
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 of 1934. Yes ☐    No ☒
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Act of 1934. Yes ☐    No ☒
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 requirement
for the past 90 days. Yes ☒    No ☐
Indicate by check mark whether the registrant (1) has submitted electronically every Interactive Data File required to be submitted 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 such
files). Yes ☒    No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or
emerging growth company. See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" in
Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
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. ☐
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 if the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐    No ☒

As of June 30, 2024, the last business day of the registrant's most recently completed second fiscal quarter, the aggregate market value of the shares of
common stock held by nonaffiliates, based upon the closing price per share of the registrant's common stock as reported on Nasdaq, was approximately $729.0
million.
As of February 27, 2025, there were 96,998,075 and 89,104,605 shares of the registrant's common stock, par value $0.01 per share, issued and outstanding,
respectively.
DOCUMENTS INCORPORATED BY REFERENCE
None.

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
2024 FORM 10-K
Table of Contents
Page
Part I
Item 1.
Business
1
Item 1A.
Risk Factors
11
Item 1B.
Unresolved Staff Comments
24
Item 1C.
Cybersecurity
24
Item 2.
Properties
26
Item 3.
Legal Proceedings
26
Item 4.
Mine Safety Disclosures
26
Part II
Item 5.
Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
27
Item 6.
Reserved
28
Item 7.
Management's Discussion and Analysis of Financial Condition and Results of Operations
28
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
65
Item 8.
Financial Statements and Supplementary Data
68
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
70
Part III
Item 10.
Directors, Executive Officers and Corporate Governance
70
Item 11.
Executive Compensation
70
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
70
Item 13.
Certain Relationships and Related Transactions, and Director Independence
71
Item 14.
Principal Accounting Fees and Services
71
Part IV
Item 15.
Exhibits and Financial Statement Schedules
72
Item 16.
Form 10-K Summary
73
Signatures
74

Table of Contents
Glossary of Acronyms and Terms
2014 Plan
Brookline Bancorp, Inc. 2014 Equity Incentive Plan
2021 Plan
Brookline Bancorp, Inc. 2021 Stock Option and Incentive Plan
ACL
Allowance for Credit Losses
AFX
American Financial Exchange
ALCO
Asset/Liability Committee
BankRI
Bank Rhode Island
Banks
Brookline Bank, Bank Rhode Island, and PCSB Bank
BSA
Bank Secrecy Act
BHCA
Bank Holding Company Act of 1956, as amended
C&I
Commercial and industrial
CECL
Current Expected Credit Losses
CFPB
Consumer Financial Protection Bureau
CISO
Chief Information Security Officer
Clarendon Private
Clarendon Private, LLC
CMOs
Collateralized mortgage obligations
CODM
Chief Operating Decision Maker
Commissioner
Massachusetts Commissioner of Banks
Company
Brookline Bancorp, Inc. and its subsidiaries
CRA
Community Reinvestment Act
CRE
Commercial real estate
DCF
Discounted Cash Flow
Eastern Funding
Eastern Funding, LLC
Economic Growth Act
Economic Growth, Regulatory Relief, and Consumer Protection Act
EPS
Earnings per Share
ESOP
Employee Stock Ownership Plan
EVE
Economic Value of Equity
Exchange Act
Securities Exchange Act of 1934
FACT Act
Fair and Accurate Credit Transactions Act of 2003
FASB
Financial Accounting Standards Board
FDIA
Federal Deposit Insurance Act
FDIC
Federal Deposit Insurance Corporation
FFIEC
Federal Financial Institutions Examination Council
FHLB
Federal Home Loan Bank of Boston and New York
FHLMC
Federal Home Loan Mortgage Corporation
FNMA
Federal National Mortgage Association
FRB
Board of Governors of the Federal Reserve System
GAAP
U.S generally accepted accounting principles
GDP
Gross Domestic Product
GLBA
Gramm-Leach-Bliley Act of 1999
GNMA
Government National Mortgage Association
GSEs
U.S. Government-sponsored enterprises
IBORs
Interbank Offered Rates

Table of Contents
Glossary of Acronyms and Terms (continued)
ITC
Investment tax credits
LEP
Loss emergence period
LEQ
Loan equivalency
MBSs
Mortgage-backed securities
MDOB
Massachusetts Division of Banks
NIST
National Institute of Standards and Technology
Nonqualified Plan
Nonqualified Deferred Compensation Plan
NYDFS
New York State Department of Financial Services
OAEM
Other Assets Especially Mentioned
OCI
Other comprehensive income
OFAC
U.S. Treasury's Office of Foreign Assets Control
OREO
Other Real Estate Owned
Plans
The 2014 Plan and the 2021 Plan
Program
Brookline Bancorp, Inc.'s Cybersecurity Risk Management Program
RIBD
Banking Division of the Rhode Island Department of Business Regulation
SBA
Small Business Administration
SEC
U.S. Securities and Exchange Commission
SERPs
Supplemental Executive Retirement Plans
SOC
System and Organization Controls
SOFR
Secured Overnight Financing Rate
TILA
Truth in Lending Act
USA PATRIOT Act
Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism
Act of 2001

Table of Contents
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Annual Report on Form 10-K that are not historical facts may constitute forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by
the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements,
which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, can generally be identified by the use of the words
"may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions.
These statements include, among others, statements regarding the Company's intent, belief or expectations with respect to economic conditions, trends affecting the
Company's financial condition or results of operations, and the Company's exposure to market, liquidity, interest-rate and credit risk.
Forward-looking statements are based on the current assumptions underlying the statements and other information with respect to the beliefs, plans,
objectives, goals, expectations, anticipations, estimates and intentions of management and the financial condition, results of operations, future performance and
business are only expectations of future results. Although the Company believes that the expectations reflected in the Company’s forward-looking statements are
reasonable, the Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other important
factors, changes in interest rates; general economic conditions (including inflation and concerns about liquidity) on a national basis or in the local markets in which
the Company operates; turbulence in the capital and debt markets; competitive pressures from other financial institutions; changes in consumer behavior due to
changing political, business and economic conditions, or legislative or regulatory initiatives; changes in the value of securities and other assets in the Company’s
investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels that
necessitate increases in borrowing to fund loans and investments; failure to complete
the proposed merger with Berkshire Hills Bancorp, Inc. (“Berkshire”) or unexpected delays related to the merger or
either party’s inability to satisfy closing conditions required to complete the merger; failure to obtain necessary
regulatory approvals (and the risk that such approvals may result in the imposition of conditions that could adversely
affect the combined company or the expected benefits of the proposed merger); certain restrictions during the pendency
of the proposed merger with Berkshire that may impact the Company’s ability to pursue certain business opportunities
or strategic transactions; the diversion of management’s attention from ongoing business operations and opportunities; operational risks including, but not limited to,
cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; the possibility that future credit losses may be higher than currently
expected due to changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial
statements will become impaired; and changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in
Item 1A, "Risk Factors." Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update
any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
PART I
Item 1.    Business
General
Brookline Bancorp, Inc., a Delaware corporation, is the holding company for Brookline Bank and its subsidiaries, BankRI and its subsidiaries, PCSB Bank
and its subsidiaries, and Clarendon Private. Brookline Securities Corp, previously a subsidiary of Brookline Bancorp, Inc., was dissolved in November 2023.
Brookline Bank, headquartered in Boston, Massachusetts, has three wholly-owned subsidiaries, Longwood Securities Corp., First Ipswich Insurance Agency,
and Eastern Funding, and operates 27 full-service banking offices and three lending offices in the Greater Boston metropolitan area.
BankRI, headquartered in Providence, Rhode Island, has three direct subsidiaries, Acorn Insurance Agency, BRI Realty Corp., and BRI Investment Corp. and
its wholly-owned subsidiary, BRI MSC Corp., and operates 22 full-service banking offices in the Greater Providence, Rhode Island, area. Macrolease Corporation,
previously a subsidiary of BankRI, was merged into Eastern Funding LLC in the second quarter of 2022.
PCSB Bank, headquartered in Yorktown Heights, New York, has one wholly-owned subsidiary, UpCounty Realty Corp., and operates 14 banking offices
throughout the Lower Hudson Valley of New York.
The Company, through the Banks, offers a wide range of commercial, business and retail banking services, including a full complement of cash management
products, on-line banking services, and consumer and residential loans and investment services, designed to meet the financial needs of small- to mid-sized
businesses and individuals throughout Central New
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Table of Contents
England and the Lower Hudson Valley in New York. Specialty lending activities, including equipment financing, are focused in the New York and New Jersey
metropolitan area, with services offered throughout the United States. As full-service financial institutions, the Banks and their subsidiaries focus on the continued
addition of well-qualified customers, the deepening of long-term banking relationships through a full complement of products and excellent customer service, and
strong risk management. Clarendon Private is a registered investment advisor with the SEC. Through Clarendon Private, the Company offers a wide range of wealth
management services to individuals, families, endowments and foundations to help these clients meet their long-term financial goals.
The Company's headquarters and executive management are located at 131 Clarendon Street, Boston, Massachusetts 02116, and its telephone number is 617-
425-4600.
Proposed Transaction
On December 16, 2024, the Company, Berkshire, and Commerce Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Berkshire
formed solely to facilitate the merger (“Merger Sub”), 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 the Company, with the Company as the surviving entity, and
immediately thereafter, the Company will merge with and into Berkshire, with Berkshire as the surviving entity (collectively, the “Merger”). As a result of the
Merger, the separate corporate existence of the Company will cease, and Berkshire will continue as the surviving corporation. Upon closing of the Merger, the
successor company’s board of directors will be comprised of sixteen members, eight from each of the Company and Berkshire.
Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of both companies, each outstanding share of the
Company’s common stock will be exchanged for the right to receive 0.42 shares of Berkshire common stock. Holders of Company common stock will receive cash
in lieu of fractional shares of Berkshire common stock. As a result of the transaction and a $100 million common stock offering by Berkshire to support the
transaction, Berkshire stockholders will own approximately 51%, Company stockholders will own approximately 45%, and investors in new shares will own
approximately 4% of the outstanding shares of the combined company.
The Merger Agreement also provides that, immediately following the Merger, Berkshire Bank, BankRI and PCSB Bank will merge with and into Brookline
Bank (the “Bank Merger”), with Brookline Bank continuing as the surviving bank. Upon closing of the Bank Merger, the successor bank’s board of directors will be
comprised of sixteen members, eight from each of Berkshire Bank and Brookline Bank.
The combined company will trade on the New York Stock Exchange and will announce a new name and ticker symbol before closing. The combined bank will
also operate under a new name to be announced before closing. The executive headquarters for the combined company will be located at 131 Clarendon Street in
Boston, Massachusetts, 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 Company stockholders.
Overview of Results
The loan and lease portfolio increased $137.7 million, or 1.4%, to $9.8 billion at December 31, 2024 from $9.6 billion at December 31, 2023. The Company's
commercial loan portfolios, which totaled $8.2 billion, or 84.1% of total loans and leases, as of December 31, 2024, increased $58.6 million, or 0.7%, from $8.2
billion, or 84.7% of total loans and leases, as of December 31, 2023.
Total deposits increased $353.5 million, or 4.1%, to $8.9 billion at December 31, 2024 from $8.5 billion as of December 31, 2023. Core deposits, which
include demand checking, NOW, money market and savings accounts, increased 0.9% to $6.1 billion as of December 31, 2024 from $6.1 billion at December 31,
2023. The Company's core deposits were 69.1% of total deposits at December 31, 2024, a decrease from 71.3% at December 31, 2023.
The allowance for loan and lease losses increased $7.6 million, or 6.4%, to $125.1 million as of December 31, 2024 from $117.5 million as of December 31,
2023. The ratio of the allowance for loan and lease losses to total loans and leases was 1.28% as of December 31, 2024 compared to 1.22% as of December 31,
2023. Nonperforming assets as of December 31, 2024 were $70.5 million, up from $45.3 million at the end of 2023. Nonperforming assets were 0.59% and 0.40%
of total assets as of December 31, 2024 and December 31, 2023, respectively.
Net interest income decreased $10.1 million, or 3.0%, to $329.6 million in 2024 compared to $339.7 million in 2023. Net interest margin decreased 18 basis
points to 3.06% in 2024 from 3.24% in 2023. Net income for 2024 decreased $6.3 million, or 8.4%, to $68.7 million from $75.0 million for 2023. Basic and fully
diluted earnings per common share ("EPS") decreased to
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Table of Contents
$0.77 for 2024 from $0.85 for 2023. See Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations.”
Competition
The Company provides banking services in the Greater Boston, Massachusetts, Providence, Rhode Island, and New York, New York, metropolitan
marketplaces, each of which is dominated by several large national banking institutions. The Company faces considerable competition from banking and non-
banking organizations, including traditional banks, online banks, financial technology companies, wealth management companies and others, in its market area for
all aspects of banking and related service activities. Competitive factors considered for loan generation include product offerings, interest rates, terms offered,
services provided and geographic locations. Competitive factors considered in attracting and retaining deposits include product offerings and rate of return,
convenient branch locations and automated teller machines and online access to accounts.
Market Area and Credit Risk Concentration
As of December 31, 2024, the Company, through its Banks, operated 63 full-service banking offices in Greater Boston, Massachusetts, Rhode Island and New
York. The Banks' deposits are gathered from the general public, primarily in the communities in which the banking offices are located. Based on June 30, 2024,
Federal Deposit Insurance Corporation ("FDIC") statistics, the five largest banks in Massachusetts have an aggregate market share of approximately 69%, the three
largest banks in Rhode Island have an aggregate deposit market share of approximately 69%, and the three largest banks in New York have an aggregate deposit
market share of approximately 52%. The Banks' lending activities are concentrated primarily in the Greater Boston, Massachusetts, and Providence, Rhode Island,
metropolitan areas, eastern Massachusetts, southern New Hampshire, other Rhode Island areas and the Lower Hudson Valley in New York. In addition, the
Company, through Eastern Funding, conducts equipment financing activities in the greater New York and New Jersey metropolitan area and elsewhere in the United
States.
Commercial real estate loans. Multi-family and commercial real estate mortgage loans typically generate higher yields, but also involve greater credit risk. In
addition, many of the Banks' borrowers have more than one multi-family or commercial real estate loan outstanding. The Banks manage this credit risk by prudent
underwriting with conservative debt service coverage and loan-to-value ratios at origination; lending to seasoned real estate owners/managers, frequently with
personal guarantees of repayment; using reasonable appraisal practices; cross-collateralizing loans to one borrower when deemed prudent; and limiting the amount
and types of construction lending. As of December 31, 2024, the largest commercial real estate relationship in the Company's portfolio was $61.3 million.
Commercial loans and equipment leasing. Brookline Bank originates commercial loans and leases for working capital and other business-related purposes,
and concentrate such lending to companies located primarily in Massachusetts, and, in the case of Eastern Funding, on a nationwide basis. BankRI and PCSB Bank
originate commercial loans and lines of credit for various business-related purposes, for businesses located primarily in Rhode Island and the Lower Hudson Valley
of New York, respectively.
Because commercial loans are typically made on the basis of the borrower's ability to repay from the cash flow of the business, the availability of funds for the
repayment of commercial and industrial loans may be significantly dependent on the success of the business itself. Further, the collateral securing the loans may be
difficult to value, may fluctuate in value based on the success of the business and may deteriorate over time. For this reason, these loans and leases involve greater
credit risk. Loans and leases originated by Eastern Funding generally earn higher yields because the borrowers are typically small businesses with limited capital
such as laundries, fitness centers and tow truck operators. The Banks manage the credit risk inherent in commercial lending by requiring strong debt service
coverage ratios; limiting loan-to-value ratios; securing personal guarantees from borrowers; and limiting industry concentrations, franchisee concentrations and the
duration of loan maturities. As of December 31, 2024, the largest commercial relationship in the Company's portfolio was $65.3 million.
Consumer loans. Retail customers of Brookline Bank typically live and work in the Boston metropolitan area and eastern Massachusetts. Retail customers of
BankRI typically live and work throughout Rhode Island. Retail customers of PCSB Bank typically live and work throughout New York. Our consumers value
personalized service, local community knowledge and engagement and the choice between branch access and technology solutions. The Banks' consumer loan
portfolios, which include residential mortgage loans, home equity loans and lines of credit, and other consumer loans, cater to the borrowing needs of this customer
base. Credit risk in these portfolios is managed by limiting loan-to-value ratios at loan origination and by requiring borrowers to demonstrate strong credit histories.
As of December 31, 2024, the largest consumer relationship in the Company's portfolio was $76.5 million.
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Economic Conditions and Governmental Policies
Repayment of multi-family and commercial real estate loans are generally dependent on the properties generating sufficient income to cover operating
expenses and debt service. Repayment of commercial loans and leases generally are dependent on the demand for the borrowers' products or services and the ability
of borrowers to compete and operate on a profitable basis. Repayment of residential mortgage loans and home equity loans generally are dependent on the financial
well-being of the borrowers and their capacity to service their debt levels. The asset quality of the Company's loan and lease portfolio, therefore, is greatly affected
by the economy. Should there be any setback in the economy or increase in the unemployment rates in the Boston, Providence, or New York, metropolitan areas, the
resulting negative consequences could affect occupancy rates in the properties financed by the Company and cause certain individual and business borrowers to be
unable to service their debt obligations.
Personnel and Human Capital Resources
As of December 31, 2024, the Company had 951 full-time employees and 49 part-time employees. The employees are not represented by a collective
bargaining unit and the Company considers its relationship with its employees to be good.
We encourage and support the growth and development of our employees. Continual learning and career development is advanced through ongoing
performance and development conversations with employees, internally developed training programs, customized corporate training engagements and educational
reimbursement programs.
The safety, health and wellness of our employees is a top priority. On an ongoing basis, we promote the health and wellness of our employees by strongly
encouraging work-life balance, offering flexible work schedules, keeping the employee portion of health care premiums to a minimum and sponsoring various
wellness programs.
We believe our commitment to living out our core values, actively prioritizing concern for our employees' well-being, supporting our employees' career goals,
offering competitive wages and providing valuable fringe benefits aids in retention of our top-performing employees.
Access to Available Information
As a public company, Brookline Bancorp, Inc. is subject to the informational requirements of the Exchange Act, and in accordance therewith, files reports,
proxy and information statements and other information with the SEC. The Company makes available on or through its internet website,
www.brooklinebancorp.com, without charge, its annual reports on Form 10-K, proxy statements, quarterly reports on Form 10-Q, current reports on Form 8-K and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are
electronically filed with, or furnished to, the SEC. The Company's reports filed with, or furnished to, the SEC are also available at the SEC's website at
www.sec.gov. Press releases are also maintained on the Company's website. Additional information for Brookline Bank, BankRI, PCSB Bank, Eastern Funding, and
Clarendon Private can be found at www.brooklinebank.com, www.bankri.com, www.pcsb.com, www.easternfunding.com, and www.clarendonprivate.com,
respectively. Information on the Company's and any subsidiary's website is not incorporated by reference into this document and should not be considered part of
this Report.
The Company's common stock is traded on the Nasdaq Global Select Market
 under the symbol “BRKL”.
Supervision and Regulation
The following discussion addresses elements of the regulatory framework applicable to bank holding companies and their subsidiaries. This regulatory
framework is intended primarily for the protection of the safety and soundness of depository institutions, the federal deposit insurance system, and depositors, rather
than for the protection of shareholders of a bank holding company such as the Company.
As a bank holding company, the Company is subject to regulation, supervision and examination by the Board of Governors of the FRB under the BHCA, and
by the Commissioner under Massachusetts General Laws Chapter 167A. The FRB is also the primary federal regulator of the Banks. In addition, Brookline Bank is
subject to regulation, supervision and examination by the MDOB, BankRI is subject to regulation, supervision and examination by the RIBD, and PCSB Bank is
subject to regulation, supervision and examination by the NYDFS.
The following is a summary of certain aspects of various statutes and regulations applicable to the Company and its subsidiaries. This summary is not a
comprehensive analysis of all applicable law, and is qualified by reference to the full text of the statutes and regulations referenced below, which may be modified
or amended from time to time.
SM
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Table of Contents
Regulation of the Company
The Company is subject to regulation, supervision and examination by the FRB, which has the authority, among other things, to order bank holding companies
to cease and desist from unsafe or unsound banking practices; to assess civil money penalties; and to order termination of non-banking activities or termination of
ownership and control of a non-banking subsidiary by a bank holding company.
Source of Strength
Under the BHCA, as amended by the Dodd-Frank Act, the Company is required to serve as a source of financial strength for the Banks in the event of the
financial distress of the Banks. This provision of the Dodd-Frank Act codifies the longstanding policy of the FRB. This support may be required at times when the
bank holding company may not have the resources to provide the additional financial support required by its subsidiary banks. In the event of a bank holding
company's bankruptcy, any commitment by the bank holding company to a federal bank regulatory agency to maintain the capital of a bank subsidiary will be
assumed by the bankruptcy trustee and entitled to priority of payment.
Acquisitions and Activities
The BHCA prohibits a bank holding company, without prior approval of the FRB, from acquiring all or substantially all the assets of a bank, acquiring control
of a bank, merging or consolidating with another bank holding company, or acquiring direct or indirect ownership or control of any voting shares of another bank or
bank holding company if, after such acquisition, the acquiring bank holding company would control more than 5% of any class of the voting shares of such other
bank or bank holding company. Further, as a Massachusetts bank holding company, the Company generally must obtain the prior approval of the Massachusetts
Board of Bank Incorporation to acquire ownership or control of more than 5% of any voting stock in any other banking institution, acquire substantially all the
assets of a bank, or merge with another bank holding company. However, there is an exemption from this approval requirement in certain cases in which the banking
institution to be acquired, simultaneously with the acquisition, merges with a banking institution subsidiary of the Company in a transaction approved by the
Commissioner.
The BHCA also generally prohibits a bank holding company from engaging directly or indirectly in activities other than those of banking, managing or
controlling banks or furnishing services to its subsidiary banks. However, among other permitted activities, a bank holding company may engage in and may own
shares of companies engaged in certain activities that the FRB has determined to be so closely related to banking as to be a proper incident thereto, subject to certain
notification requirements.
Limitations on Acquisitions of Company Common Stock
The Change in Bank Control Act prohibits a person or group of persons from acquiring “control” of a bank holding company unless the FRB has been
notified and has not objected to the transaction. Under rebuttable presumptions of control established by the FRB, the acquisition of control of voting securities of a
bank holding company constitutes an acquisition of control under the Change in Bank Control Act, requiring prior notice to the FRB, if, immediately after the
transaction, the acquiring person (or persons acting in concert) will own, control, or hold with power to vote 10% or more of any class of voting securities of the
bank holding company, and if either (i) the bank holding company has registered securities under Section 12 of the Securities Exchange Act of 1934, or (ii) no other
person will own, control, or hold the power to vote a greater percentage of that class of voting securities immediately after the transaction. On July 30, 2024, the
FDIC approved a notice of proposed rulemaking to amend the FDIC’s rules implementing the Change in Bank Control Act. If adopted, the proposed rule would
eliminate an exemption from prior notice to the FDIC for a proposed change in control involving the acquisition of voting securities of a depository institution
holding company for which the FRB reviews a notice pursuant to the Change in Bank Control Act. As a result, if the proposed rule is adopted, the acquisition of
control of a bank holding company for an insured state nonmember bank would require prior notice to both the FDIC and the FRB.
In addition, the BHCA prohibits any company from acquiring control of a bank or bank holding company without first having obtained the approval of the
FRB. Among other circumstances, under the BHCA, a company has control of a bank or bank holding company if the company owns, controls or holds with power
to vote 25% or more of a class of voting securities of the bank or bank holding company; controls in any manner the election of a majority of directors or trustees of
the bank or bank holding company; or the FRB has determined, after notice and opportunity for hearing, that the company has the power to exercise a controlling
influence over the management or policies of the bank or bank holding company. The FRB has established presumptions of control under which the acquisition of
control of 5% or more of a class of voting securities of a bank holding company, together with other factors enumerated by the FRB, could constitute the acquisition
of control of a bank holding company for purposes of the BHCA.
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Regulation of the Banks
Brookline Bank is subject to regulation, supervision and examination by the MDOB and the FRB. BankRI is subject to regulation, supervision and
examination by the RIBD and the FRB. PCSB Bank is subject to regulation, supervision and examination by the NYDFS and the FRB. The enforcement powers
available to federal and state banking regulators include, among other things, the ability to issue cease and desist or removal orders to terminate insurance of
deposits; to assess civil money penalties; to issue directives to increase capital; to place the bank into receivership; and to initiate injunctive actions against banking
organizations and institution-affiliated parties.
Deposit Insurance
Deposit obligations of the Banks are insured by the FDIC's Deposit Insurance Fund up to $250,000 per separately insured depositor for deposits held in the
same right and capacity.
Deposit insurance premiums are based on assets. For the year ending December 31, 2024, the Banks' FDIC insurance assessments costs were approximately
$8.0 million.
The FDIC has the authority to adjust deposit insurance assessment rates at any time.
In addition, under the FDIA, the FDIC may terminate deposit insurance, among other circumstances, upon a finding that the institution has engaged in unsafe
and unsound practices; is in an unsafe or unsound condition to continue operations; or has violated any applicable law, regulation, rule, order or condition imposed
by the FDIC.
Cross-Guarantee
Under the cross-guarantee provisions of the FDIA, the FDIC can hold any FDIC-insured depository institution liable for any loss suffered or anticipated by
the FDIC in connection with (i) the “default” of a commonly controlled FDIC-insured depository institution; or (ii) any assistance provided by the FDIC to a
commonly controlled FDIC-insured depository institution “in danger of default.”
Acquisitions and Branching
The Banks must seek prior approval from the FRB to acquire another bank or establish a new branch office. Brookline Bank must also seek prior approval
from the MDOB to acquire another bank or establish a new branch office, BankRI must also seek prior approval from the RIBD to acquire another bank or establish
a new branch office, and PCSB Bank must also seek prior approval from the NYDFS to acquire another bank or establish a new branch office. Well capitalized and
well managed banks may acquire other banks in any state, subject to certain deposit concentration limits and other conditions, pursuant to the Riegle-Neal Interstate
Banking and Branching Efficiency Act of 1994, as amended by the Dodd-Frank Act. In addition, the Dodd-Frank Act authorizes a state-chartered bank to establish
new branches on an interstate basis to the same extent a bank chartered by the host state may establish branches.
Activities and Investments of Insured State-Chartered Banks
The FDIA generally limits the types of equity investments that FDIC-insured state-chartered member banks, such as the Banks, may make and the kinds of
activities in which such banks may engage, as a principal, to those that are permissible for national banks. Further, the GLBA permits state banks, to the extent
permitted under state law, to engage through “financial subsidiaries” in certain activities which are permissible for subsidiaries of a financial holding company. In
order to form a financial subsidiary, a state-chartered bank must be well capitalized, and must comply with certain capital deduction, risk management and affiliate
transaction rules, among other requirements. In addition, the Federal Reserve Act provides that state member banks are subject to the same restrictions with respect
to purchasing, selling, underwriting, and holding of investment securities as national banks.
Brokered Deposits
The FDIA and federal regulations generally limit the ability of an insured depository institution to accept, renew or roll over any brokered deposit unless the
institution's capital category is “well capitalized” or, with regulatory approval, “adequately capitalized.” Certain depository institutions that have brokered deposits
in excess of 10% of total assets will be subject to increased FDIC deposit insurance premium assessments. Additionally, depository institutions considered
“adequately capitalized” that need regulatory approval to accept, renew or roll over any brokered deposits are subject to additional restrictions on the interest rate
they may pay on deposits. As of December 31, 2024, none of the Banks had brokered deposits in excess of 10% of total assets.
Section 202 of the Economic Growth Act, which was enacted in 2018, amended the FDIA to exempt a capped amount of reciprocal deposits from treatment as
brokered deposits for certain insured depository institutions.
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The Community Reinvestment Act
The CRA requires the FRB to evaluate each of the Banks with regard to their performance in helping to meet the credit needs of the communities each of the
Banks serve, including low and moderate-income neighborhoods, consistent with safe and sound banking operations, and to take this record into consideration when
evaluating certain applications. The FRB's CRA regulations are generally based upon objective criteria of the performance of institutions under three key assessment
tests: (i) a lending test, to evaluate the institution's record of making loans in its service areas; (ii) an investment test, to evaluate the institution's record of investing
in community development projects, affordable housing, and programs benefiting low- or moderate-income individuals and businesses; and (iii) a service test, to
evaluate the institution's delivery of services through its branches, ATMs, and other offices. Failure of an institution to receive at least a “satisfactory” rating could
inhibit the Banks or the Company from undertaking certain activities, including engaging in activities permitted as a financial holding company under GLBA and
acquisitions of other financial institutions. Each Bank has achieved a rating of “satisfactory” on its most recent CRA examination. Massachusetts, Rhode Island and
New York have adopted specific community reinvestment requirements which are substantially similar to those of the FRB. On October 23, 2023, the FDIC
approved changes to its CRA regulations, maintaining the existing CRA ratings but modifying the evaluation framework to replace the existing tests generally
applicable to banks with at least $2 billion in assets (the lending, investment, and service tests) with four new tests and associated performance metrics. On February
5, 2024, the American Bankers Association, the U.S. Chamber of Commerce, the Independent Community Bankers of America, along with four state trade
associations jointly sued the FRB, FDIC, and Office of Comptroller of the Currency for exceeding their statutory authority in adopting revised regulations to
implement the Community Reinvestment Act. The lawsuit filed in the U.S. District Court for the Northern District of Texas requested the regulatory agencies vacate
the rule and sought a preliminary injunction pausing the new rules while the court decided the merits of the case. On March 29, 2024, the district court judge
granted a temporary injunction to pause the implementation of CRA final rule with respect to the plaintiff trade associations while the case moves forward. The
banking agencies have appealed the issuance of the injunction to the U.S. Court of Appeals for the Fifth Circuit. However, the new CRA regulations are currently
expected to become effective on January 1, 2026.
Lending Restrictions
Federal law limits a bank's authority to extend credit to directors and executive officers of the bank or its affiliates and persons or companies that own, control
or have power to vote more than 10% of any class of securities of a bank or an affiliate of a bank, as well as to entities controlled by such persons. Among other
things, extensions of credit to insiders are required to be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less
stringent than, those prevailing for comparable transactions with unaffiliated persons. Also, the terms of such extensions of credit may not involve more than the
normal risk of repayment or present other unfavorable features and may not exceed certain limitations on the amount of credit extended to such persons,
individually and in the aggregate, which limits are based, in part, on the amount of the bank's capital.
Capital Adequacy and Safety and Soundness
Regulatory Capital Requirements
The FRB has issued risk-based and leverage capital rules applicable to U.S. banking organizations such as the Company and the Banks. These rules are
intended to reflect the relationship between the banking organization's capital and the degree of risk associated with its operations based on transactions recorded
on-balance sheet as well as off-balance sheet items. The FRB may from time to time require that a banking organization maintain capital above the minimum levels
discussed below, due to the banking organization's financial condition or actual or anticipated growth.
The capital adequacy rules define qualifying capital instruments and specify minimum amounts of capital as a percentage of assets that banking organizations
are required to maintain. Common equity Tier 1 capital generally includes common stock and related surplus, retained earnings and, in certain cases and subject to
certain limitations, minority interest in consolidated subsidiaries, less goodwill, other non-qualifying intangible assets and certain other deductions. Tier 1 capital for
banks and bank holding companies generally consists of the sum of common equity Tier 1 elements, non-cumulative perpetual preferred stock, and related surplus
in certain cases and subject to limitations, minority interests in consolidated subsidiaries that do not qualify as common equity Tier 1 capital, less certain deductions.
Tier 2 capital generally consists of hybrid capital instruments, perpetual debt and mandatory convertible debt securities, cumulative perpetual preferred stock, term
subordinated debt and intermediate-term preferred stock, and, subject to limitations, allowances for loan losses. The sum of Tier 1 and Tier 2 capital less certain
required deductions represents qualifying total risk-based capital. Prior to the effectiveness of certain provisions of the Dodd-Frank Act, bank holding companies
were permitted to include trust preferred securities and cumulative perpetual preferred stock in Tier 1 capital, subject to limitations. However, the FRB's capital rule
applicable to bank holding companies permanently grandfathers nonqualifying capital instruments, including trust preferred securities, issued before May 19, 2010
by depository institution holding companies with less than $15 billion in total assets as of December 31, 2009, subject to a limit of
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25% of Tier 1 capital. In addition, under rules that became effective January 1, 2015, accumulated other comprehensive income (positive or negative) must be
reflected in Tier 1 capital; however, the Company was permitted to make a one-time, permanent election to continue to exclude accumulated other comprehensive
income from capital. The Company has made this election.
Under the capital rules, risk-based capital ratios are calculated by dividing common equity Tier 1, Tier 1, and total risk capital, respectively, by risk-weighted
assets. Assets and off-balance sheet credit equivalents are assigned to one of several categories of risk-weights, based primarily on relative risk. Under the FRB's
rules, the Company and the Banks are each required to maintain a minimum common equity Tier 1 capital ratio requirement of 4.5%, a minimum Tier 1 capital ratio
requirement of 6.0%, a minimum total capital requirement of 8.0% and a minimum leverage ratio requirement of 4.0%. Additionally, these rules require an
institution to establish a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements for
"adequately capitalized" institutions of more than 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses,
and to engaged in share repurchases.
A bank holding company, such as the Company, is considered "well capitalized" if the bank holding company (i) has a total risk based capital ratio of at least
10.0%, (ii) has a Tier 1 risk-based capital ratio of at least 6.0%, and (iii) is not subject to any written agreement order, capital directive or prompt corrective action
directive to meet and maintain a specific capital level for any capital measure. In addition, under the FRB's prompt corrective action rules, a state member bank is
considered “well capitalized” if it (i) has a total risk-based capital ratio of 10.0% or greater; (ii) a Tier 1 risk-based capital ratio of 8.0% or greater; (iii) a common
Tier 1 equity ratio of at least 6.5% or greater, (iv) a leverage capital ratio of 5.0% or greater; and (v) is not subject to any written agreement, order, capital directive,
or prompt corrective action directive to meet and maintain a specific capital level for any capital measure. The FRB also considers: (i) concentrations of credit risk;
(ii) interest rate risk; and (iii) risks from non-traditional activities, as well as an institution's ability to manage those risks. When determining the adequacy of an
institution's capital, this evaluation is a part of the institution's regular safety and soundness examination. Each of the Banks is currently considered well-capitalized
under all regulatory definitions.
Generally, a bank, upon receiving notice that it is not adequately capitalized (i.e., that it is “undercapitalized”), becomes subject to the prompt corrective
action provisions of Section 38 of FDIA that, for example, (i) restrict payment of capital distributions and management fees, (ii) require that its federal bank
regulator monitor the condition of the institution and its efforts to restore its capital, (iii) require submission of a capital restoration plan, (iv) restrict the growth of
the institution's assets, and (v) require prior regulatory approval of certain expansion proposals. A bank that is required to submit a capital restoration plan must
concurrently submit a performance guarantee by each company that controls the bank. A bank that is “critically undercapitalized” (i.e., has a ratio of tangible equity
to total assets that is equal to or less than 2.0%) will be subject to further restrictions, and generally will be placed in conservatorship or receivership within 90 days.
The Banks are considered “well capitalized” under the FRB's prompt corrective action rules and the Company is considered “well capitalized” under the
FRB's rules applicable to bank holding companies.
Safety and Soundness Standards
Guidelines adopted by the federal bank regulatory agencies pursuant to the FDIA establish general standards relating to internal controls and information
systems, internal audit systems, loan documentation, credit underwriting, interest rate exposure, asset growth, asset quality, earnings and compensation, fees and
benefits. In general, these guidelines require, among other things, appropriate systems and practices to identify and manage the risk and exposures specified in the
guidelines. The guidelines prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are
unreasonable or disproportionate to the services performed by an executive officer, employee, director or principal stockholder. In addition, the federal banking
agencies adopted regulations that authorize, but do not require, an agency to order an institution that has been given notice by an agency that it is not satisfying any
of such safety and soundness standards to submit a compliance plan. If, after being so notified, an institution fails to submit an acceptable compliance plan or fails in
any material respect to implement an acceptable compliance plan, the agency must issue an order directing action to correct the deficiency and may issue an order
restricting asset growth, requiring an institution to increase its ratio of tangible equity to assets or directing other actions of the types to which an undercapitalized
institution is subject under the “prompt corrective action” provisions of FDIA. See “- Regulatory Capital Requirements” above. If an institution fails to comply with
such an order, the agency may seek to enforce such order in judicial proceedings and to impose civil money penalties.
Dividend Restrictions
The Company is a legal entity separate and distinct from the Banks. The revenue of the Company (on a parent company only basis) is derived primarily from
dividends paid to it by the Banks. The right of the Company, and consequently the right of shareholders of the Company, to participate in any distribution of the
assets or earnings of the Banks through the payment of
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such dividends or otherwise is subject to the prior claims of creditors of the Banks (including depositors), except to the extent that certain claims of the Company in
a creditor capacity may be recognized.
Restrictions on Bank Holding Company Dividends
The FRB has authority to prohibit bank holding companies from paying dividends if such payment is deemed to be an unsafe or unsound practice. The FRB
has indicated generally that it may be an unsafe or unsound practice for bank holding companies to pay dividends unless the bank holding company's net income for
the prior year is sufficient to fund the dividends and the expected rate of earnings retention is consistent with the organization's capital needs, asset quality and
overall financial condition. Further, under the FRB's capital rules, the Company's ability to pay dividends will be restricted if it does not maintain the required
capital conservation buffer. See “Capital Adequacy and Safety and Soundness-Regulatory Capital Requirements” above.
Restrictions on Bank Dividends
The FRB has the authority to use its enforcement powers to prohibit a bank from paying dividends if, in its opinion, the payment of dividends would
constitute an unsafe or unsound practice. Federal law also prohibits the payment of dividends by a bank that will result in the bank failing to meet its applicable
capital requirements on a pro forma basis. In addition, a state member bank may not declare or pay a dividend: (i) if the total of all dividends declared during the
calendar year, including the proposed dividend, exceeds the sum of the bank's net income during the current calendar year and the retained net income of the prior
two calendar years; or (ii) that would exceed its undivided profits; in either case, unless the dividend has been approved by the FRB. Payment of dividends by a
bank is also restricted pursuant to various state regulatory limitations.
Certain Transactions by Bank Holding Companies with their Affiliates
There are various statutory restrictions on the extent to which bank holding companies and their non-bank subsidiaries may borrow, obtain credit from or
otherwise engage in “covered transactions” with their insured depository institution subsidiaries. An insured depository institution (and its subsidiaries) may not
lend money to, or engage in covered transactions with, its non-depository institution affiliates if the aggregate amount of covered transactions outstanding involving
the bank, plus the proposed transaction, exceeds the following limits: (i) in the case of any one such affiliate, the aggregate amount of covered transactions of the
insured depository institution and its subsidiaries cannot exceed 10% of the capital stock and surplus of the insured depository institution; and (ii) in the case of all
affiliates, the aggregate amount of covered transactions of the insured depository institution and its subsidiaries cannot exceed 20% of the capital stock and surplus
of the insured depository institution. For this purpose, “covered transactions” are defined by statute to include a loan or extension of credit to an affiliate, a purchase
of or investment in securities issued by an affiliate, a purchase of assets from an affiliate unless exempted by the FRB, the acceptance of securities issued by an
affiliate as collateral for a loan or extension of credit to any person or company, the issuance of a guarantee, acceptance or letter of credit on behalf of an affiliate,
securities borrowing or lending transactions with an affiliate that creates a credit exposure to such affiliate, or a derivatives transaction with an affiliate that creates a
credit exposure to such affiliate. Covered transactions are also subject to certain collateral security requirements. Covered transactions as well as other types of
transactions between a bank and a bank holding company must be conducted under terms and conditions, including credit standards, that are at least as favorable to
the bank as prevailing market terms. Section 106 of the Bank Holding Company Act Amendment of 1970 provides that, to further competition, a bank holding
company and its subsidiaries are prohibited from engaging in certain tying arrangements in connection with any extension of credit, lease or sale of property of any
kind, or the furnishing of any service. As of and for the year ending December 31, 2024, there were no such transactions.
Enhanced Prudential Supervision
None of the Banks currently have $10 billion or more of total consolidated assets, but it is possible that one of them may in the near future. In addition, with
the merger of PCSB Financial Corporation ("PCSB") with and into the Company effective January 1, 2023, the Banks, together with their affiliates, had assets
exceeding $10 billion. The Dodd-Frank Act and other federal banking laws subject companies with $10 billion or more of consolidated assets to additional
regulatory requirements. Section 1075 of the Dodd-Frank Act, commonly known as the “Durbin Amendment”, amended the Electronic Fund Transfer Act to restrict
the amount of interchange fees that may be charged and prohibit network exclusivity for debit card transactions. The Banks were required to begin complying with
the restrictions on interchange fees by July 1, 2024, which have negatively impacted payment network fees and is expected to continue to negatively impact future
payment network fees.
In addition, Section 619 of the Dodd-Frank Act, commonly known as the “Volcker Rule”, which generally prohibits banking entities from engaging in
proprietary trading and from acquiring or retaining an ownership interest in or sponsoring certain types of investment funds, does not apply to an insured depository
institution if it, and every company that controls it, has total consolidated assets of $10 billion or less and consolidated trading assets and liabilities that are 5% or
less of consolidated assets. While each Bank had total consolidated assets of less than $10 billion as of December 31, 2024, the
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Company, which controls the Banks, has total consolidated assets in excess of $10 billion as of December 31, 2024. The Banks were subject to the Volcker Rule in
2023, and they remain subject to it now. However, we do not anticipate that becoming subject to the Volcker Rule will significantly impact the operations of the
Company and the Banks.
Finally, Section 1025 of the Dodd-Frank Act provides that the CFPB has authority to examine any insured depository institution with total assets of more than
$10 billion and any affiliate thereof. None of the Banks had, as of December 31, 2024, or has total assets of more than $10 billion.
Consumer Protection Regulation
The Company and the Banks are subject to a number of federal and state laws designed to protect consumers and prohibit unfair or deceptive business
practices. These laws include the Equal Credit Opportunity Act, Fair Housing Act, Home Ownership Protection Act, Fair Credit Reporting Act, as amended by the
FACT Act, GLBA, TILA, the CRA, the Home Mortgage Disclosure Act, Real Estate Settlement Procedures Act, National Flood Insurance Act and various state law
counterparts. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must interact with
customers when taking deposits, making loans, collecting loans and providing other services. Further, the CFPB also has a broad mandate to prohibit unfair,
deceptive or abusive acts and practices and is specifically empowered to require certain disclosures to consumers and draft model disclosure forms. Failure to
comply with consumer protection laws and regulations can subject financial institutions to enforcement actions, fines and other penalties. The FRB examines the
Banks for compliance with CFPB rules and enforces CFPB rules with respect to the Banks.
The Dodd-Frank Act prescribes certain standards that mortgage lenders must consider before making a residential mortgage loan, including verifying a
borrower's ability to repay such mortgage loan, and allows borrowers to assert violations of certain provisions of the TILA as a defense to foreclosure proceedings.
Additionally, the CFPB's qualified mortgage rule requires creditors, such as the Banks, to make a reasonable good faith determination of a consumer's ability to
repay any consumer credit transaction secured by a dwelling prior to making the loan. 
Privacy and Customer Information Security
The GLBA requires financial institutions to implement policies and procedures regarding the disclosure of nonpublic personal information about consumers to
nonaffiliated third parties. In general, the Banks must provide their customers with an annual disclosure that explains their policies and procedures regarding the
disclosure of such nonpublic personal information and, except as otherwise required or permitted by law, the Banks are prohibited from disclosing such information
except as provided in such policies and procedures. If the financial institution only discloses information under exceptions from the GLBA that do not require an opt
out to be provided and if there has been no change in the financial institutions privacy policies and procedures since its most recent disclosures provide to
customers, an annual disclosure is not required to be provided by the financial institution. The GLBA also requires that the Banks develop, implement and maintain
a comprehensive written information security program designed to ensure the security and confidentiality of customer information (as defined under GLBA), to
protect against anticipated threats or hazards to the security or integrity of such information and to protect against unauthorized access to or use of such information
that could result in substantial harm or inconvenience to any customer. The Banks are also required to send a notice to customers whose “sensitive information” has
been compromised if unauthorized use of this information is “reasonably possible.” Most of the states, including the states where the Banks operate, have enacted
legislation concerning breaches of data security and the duties of the Banks in response to a data breach. Congress continues to consider federal legislation that
would require consumer notice of data security breaches. Pursuant to the FACT Act, the Banks must also develop and implement a written identity theft prevention
program to detect, prevent, and mitigate identity theft in connection with the opening of certain accounts or certain existing accounts. Additionally, the FACT Act
amended the Fair Credit Reporting Act to generally prohibit a person from using information received from an affiliate to make a solicitation for marketing purposes
to a consumer, unless the consumer is given notice and a reasonable opportunity and method to opt out of the making of such solicitations.
Anti-Money Laundering
The Bank Secrecy Act
Under the BSA, a financial institution is required to have systems in place to detect certain transactions, based on the size and nature of the transaction.
Financial institutions are generally required to report to the United States Treasury any cash transactions involving at least $10,000. In addition, financial institutions
are required to file suspicious activity reports for any transaction or series of transactions that involve more than $5,000 and which the financial institution knows,
suspects or has reason to suspect involves illegal funds, is designed to evade the requirements of the BSA or has no lawful purpose. The USA PATRIOT Act, which
amended the BSA, is designed to deny terrorists and others the ability to obtain anonymous access to the U.S. financial system. The USA PATRIOT Act, together
with the implementing regulations of various federal regulatory agencies, has caused financial institutions, such as the Banks, to adopt and implement additional
policies or amend existing
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policies and procedures with respect to, among other things, anti-money laundering compliance, suspicious activity, currency transaction reporting, customer
identity verification and customer risk analysis. In evaluating an application to acquire a bank or to merge banks or effect a purchase of assets and assumption of
deposits and other liabilities, the applicable federal banking regulator must consider the anti-money laundering compliance record of both the applicant and the
target. In addition, under the USA PATRIOT Act, financial institutions are required to take steps to monitor their correspondent banking and private banking
relationships as well as, if applicable, their relationships with “shell banks.”
Office of Foreign Assets Control
The U.S. has imposed economic sanctions that affect transactions with designated foreign countries, nationals and others. These sanctions, which are
administered by OFAC, take many different forms. Generally, however, they contain one or more of the following elements: (i) restrictions on trade with or
investment in a sanctioned country, including prohibitions against direct or indirect imports from and exports to a sanctioned country and prohibitions on “U.S.
persons” engaging in financial or other transactions relating to a sanctioned country or with certain designated persons and entities; (ii) a blocking of assets in which
the government or specially designated nationals of the sanctioned country have an interest, by prohibiting transfers of property subject to U.S. jurisdiction
(including property in the possession or control of U.S. persons); and (iii) restrictions on transactions with or involving certain persons or entities. Blocked assets
(for example, property and bank deposits) cannot be paid out, withdrawn, set off or transferred in any manner without a license from OFAC. Failure to comply with
these sanctions could have serious legal and reputational consequences for the Company. As of December 31, 2024, the Company did not have any transactions with
sanctioned countries, nationals, and others.
Item 1A.    Risk Factors
Before deciding to invest in us or deciding to maintain or increase your investment, you should carefully consider the risks described below, in addition to the
other information contained in this report and in our other filings with the SEC. The risks and uncertainties described below and in our other filings are not the only
ones facing us. Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect our business. If any of these
known or unknown risks or uncertainties actually occur, our business, financial condition and results of operations could be seriously harmed. In that event, the
market price for our common stock could decline and you may lose your investment.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY
Inflationary pressures and increases in market interest rates may affect our results of operations and financial condition.
Inflation continued at elevated levels 2024 and may remain elevated in 2025. In response to a pronounced rise in inflation, the FRB raised the federal funds
rate several times in 2023. While the FRB cut the federal funds rate in 2024, we cannot predict whether or when the FRB may increase or decrease the federal funds
rate in the future. Moreover, while the inflation rate has decreased, prices remain high. Small to medium-sized businesses may be impacted by higher costs as they
are not able to leverage economies of scale to mitigate cost pressures compared to larger businesses. Consequently, the ability of our business customers to repay
their loans may deteriorate, and in some cases this deterioration may occur quickly. Sustained higher interest rates by the FRB, changes to fiscal policy, including
expansion of U.S. federal deficit spending and resultant debt issuance, could also affect market interest rates, push down asset prices and weaken economic activity.
A deterioration in economic conditions in the United States and our markets could result in an increase in loan delinquencies and non-performing assets, decreases
in loan collateral values and a decrease in demand for our products and services, any of which, could adversely impact our business, financial condition and results
of operations. Further, continued high market interest rates may reduce our loan origination volume, particularly refinance volume, and/or reduce our interest rate
spread, which could have an adverse effect on our profitability and results of operations.
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Changes to interest rates could adversely affect our results of operations and financial condition.
Our consolidated results of operations depend, on a large part, on net interest income, which is the difference between
(i) interest income on interest-earning assets, such as loans, leases and securities, and (ii) interest expense on interest-bearing liabilities, such as deposits and
borrowed funds. As a result, our earnings and growth are significantly affected by interest rates, which are subject to the influence of economic conditions generally,
both domestic and foreign, to events in the capital markets and also to the monetary and fiscal policies of the United States and its agencies, particularly the FRB.
The nature and timing of any changes in such policies or general economic conditions and their effect on us cannot be controlled and are extremely difficult to
predict. An increase in interest rates could also have a negative impact on our results of operations by reducing the ability of borrowers to repay their current loan
obligations, which could not only result in increased loan defaults, foreclosures and charge-offs, but also necessitate further increases to our allowances for loan
losses. A decrease in interest rates may trigger loan prepayments, which may serve to reduce net interest income if we are unable to lend those funds to other
borrowers or invest the funds at the same or higher interest rates.
We may be adversely affected by volatility in U.S. and global economic conditions and changes in fiscal, monetary, trade
and regulatory policies.
The economy in the U.S. and globally has experienced volatility in recent years and may continue to experience such volatility for the foreseeable future.
Unfavorable or uncertain economic conditions can be caused by declines in economic growth, business activity, or investor or business confidence; limitations on
the availability of or increases in the cost of credit and capital; increases in inflation or interest rates; uncertainties regarding fiscal and monetary policies; the timing
and impact of changing governmental policies, including changes in guidance and interpretation by regulatory authorities; changes in trade policies by the U.S. or
other countries, such as tariffs or retaliatory tariffs as those proposed by the incoming U.S. Administration; supply chain disruptions; consumer spending;
employment levels; labor shortages; challenging labor market conditions; wage stagnation; federal government shutdowns; energy prices; home prices; commercial
property values; bankruptcies and a default by a significant market participant or class of counterparties; natural disasters; climate change; epidemics; pandemics;
terrorist attacks; acts of war; or a combination of these or other factors.
Volatile business and economic conditions could have adverse effects on our business, including the following:
•
investors may have less confidence in the equity markets in general and in financial services industry stocks in particular, which could place downward
pressure on our stock price and resulting market valuation;
•
economic and market developments may further affect consumer and business confidence levels and may cause declines in credit usage and adverse
changes in payment patterns, causing increases in delinquencies and default rates;
•
our ability to assess the creditworthiness of our customers may be impaired if the models and approaches we use to select, manage, and underwrite loans
become less predictive of future behaviors;
•
we could suffer decreases in demand for loans or other financial products and services or decreased deposits or other investments in accounts with us;
•
competition in the financial services industry could intensify as a result of the increasing consolidation of financial services companies in connection with
current market conditions or otherwise; and
•
the value of loans and other assets or collateral securing loans may decrease.
Our business may be adversely affected by changes in economic conditions in our market area.
We primarily serve individuals and businesses located in the Greater Boston metropolitan area, eastern Massachusetts, Rhode Island, the Lower Hudson Valley
in New York, and the Greater New York and New Jersey metropolitan area. Our success is largely dependent on local and regional economic conditions. Unlike
other larger institutions, we are not able to spread the risks of unfavorable local economic conditions across a large number of diversified economies. An economic
downturn could, therefore, result in losses that materially and adversely affect our business. Recessionary economic conditions, increased unemployment, inflation,
a decline in real estate values or other factors beyond our control may adversely affect the ability of our borrowers to repay their loans, and could result in higher
loan and lease losses and lower net income for us.
In addition, deterioration or defaults made by issuers of the underlying collateral of our investment securities may cause additional credit-related charges to
our income statement. Our ability to borrow from other financial institutions or to access the debt or equity capital markets on favorable terms or at all could be
adversely affected by disruptions in the capital markets or other events, including actions by rating agencies and deteriorating investor expectations.
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Increased market volatility and adverse changes in financial or capital market conditions may increase our market risk.
Our liquidity, competitive position, business, results of operations and financial condition are affected by market risks such as changes in interest rates,
fluctuations in equity, commodity and futures prices, the implied volatility of interest rates and credit spreads and other economic and business factors. These
market risks may adversely affect, among other things, the value of our securities, the cost of debt capital and our access to credit markets, customer allocation of
capital among investment alternatives, and our competitiveness with respect to deposit pricing. In times of market stress or other unforeseen circumstances,
previously uncorrelated indicators may become correlated, which may limit the effectiveness of our strategies to manage these risks.
If we are unable to access the capital markets, have prolonged net deposit outflows, or our borrowing costs increase, our
liquidity and competitive position will be negatively affected.
Liquidity is essential to our business. We must maintain sufficient funds to respond to the needs of depositors and borrowers. To manage liquidity, we draw
upon a number of funding sources in addition to in-market deposit growth and repayments and maturities of loans and investments. Any inability to access the
capital markets, illiquidity or volatility in the capital markets, the decrease in value of eligible collateral or increased collateral requirements (including as a result of
credit concerns for short-term borrowing), changes to our relationships with our funding providers based on real or perceived changes in our risk profile, prolonged
federal government shutdowns, or changes in regulations or regulatory guidance, or other events could negatively affect our access to or cost of funding, affecting
our ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, or fund asset growth and new business initiatives at a
reasonable cost, in a timely manner and without adverse consequences. Additionally, our liquidity or cost of funds may be negatively impacted by the unwillingness
or inability of the FRB to act as lender of last resort, unexpected simultaneous draws on lines of credit or deposits, the withdrawal of or failure to attract customer
deposits, or increased regulatory liquidity, capital and margin requirements.
Although we maintain a liquid asset portfolio and have implemented strategies to maintain sufficient and diverse sources of funding to accommodate planned,
as well as unanticipated, changes in assets, liabilities, and off-balance sheet commitments under various economic conditions, a substantial, unexpected, or
prolonged change in the level or cost of liquidity could have a material adverse effect on us. If the cost effectiveness or the availability of supply in these credit
markets is reduced for a prolonged period of time, our funding needs may require us to access funding and manage liquidity by other means. These alternatives may
include generating client deposits, extending the maturity of wholesale borrowings, borrowing under certain secured borrowing arrangements, using relationships
developed with a variety of fixed income investors, selling or securitizing loans, and further managing loan growth and investment opportunities. These alternative
means of funding may result in an increase to the overall cost of funds and may not be available under stressed conditions, which would cause us to liquidate a
portion of our liquid asset portfolio to meet any funding needs.
We face significant and increasing competition in the financial services industry.
We operate in a highly competitive environment that includes financial and non-financial services firms, including traditional banks, online banks, financial
technology companies, wealth management companies and others. These companies compete on the basis of, among other factors, size, quality and type of products
and services offered, price, technology and reputation. Emerging technologies have the potential to intensify competition and accelerate disruption in the financial
services industry. In recent years, non-financial services firms, such as financial technology companies, have begun to offer services traditionally provided by
financial institutions. These firms attempt to use technology and mobile platforms to enhance the ability of companies and individuals to borrow money, save and
invest. Our ability to compete successfully depends on a number of factors, including our ability to develop and execute strategic plans and initiatives; to develop
competitive products and technologies; and to attract, retain and develop a highly skilled employee workforce. If we are not able to compete successfully, we could
be placed at a competitive disadvantage, which could result in the loss of customers and market share, and our business, results of operations and financial condition
could suffer.
Our business may be adversely affected if we fail to adapt our products and services to evolving industry standards and consumer preferences.
The financial services industry is undergoing rapid technological changes with frequent introductions of new technology driven products and services. The
widespread adoption of new technologies, including payment systems, could require substantial expenditures to modify or adapt our existing products and services
as the introduction of new or modified products and services can entail significant time and resources. We might not be successful in developing or introducing new
products and services, integrating new products or services into our existing offerings, responding or adapting to changes in consumer behavior, preferences,
spending, investing and/or saving habits, achieving market acceptance of our products and services,
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reducing costs in response to pressures to deliver products and services at lower prices or sufficiently developing and maintaining loyal customers.
Development of new products services and technologies may impose additional costs on us and may expose us to increased operational risk.
The introduction of new products and services can entail significant time and resources, including regulatory approvals. Substantial risks and uncertainties are
associated with the introduction of new products and services, including technical and control requirements that may need to be developed and implemented, rapid
technological change in the industry, our ability to access technical and other information from its clients, the significant and ongoing investments required to bring
new products and services to market in a timely manner at competitive prices and the preparation of marketing, sales and other materials that fully and accurately
describe the product or service and its underlying risks. Our failure to manage these risks and uncertainties also exposes it to enhanced risk of operational lapses
which may result in the recognition of financial statement liabilities. Regulatory and internal control requirements, capital requirements, competitive alternatives,
vendor relationships and shifting market preferences may also determine if such initiatives can be brought to market in a manner that is timely and attractive to our
clients. Products and services relying on internet and mobile technologies may expose us to fraud and cybersecurity risks. Implementation of certain new
technologies, such as those related to artificial intelligence, automation and algorithms, may have unintended consequences due to their limitations, potential
manipulation, or our failure to use them effectively. Failure to successfully manage these risks in the development and implementation of new products or services
could have a material adverse effect on our business and reputation, as well as on its consolidated results of operations and financial condition.
If our allowance for credit losses is not sufficient to cover actual loan and lease losses, our earnings may decrease.
We periodically make a determination of an allowance for credit losses based on available information, including, but not limited to, the quality of the loan and
lease portfolio as indicated by trends in loan risk ratings, payment performance, economic conditions, the value of the underlying collateral and the level of
nonaccruing and criticized loans and leases. Management relies on its loan officers and credit quality reviews, its experience and its evaluation of economic
conditions, among other factors, in determining the amount of provision required for the allowance for credit losses. Provisions to this allowance result in an
expense for the period. If, as a result of general economic conditions, previously incorrect assumptions, or an increase in defaulted loans or leases, we determine that
additional increases in the allowance for credit losses are necessary, additional expenses may be incurred.
Determining the allowance for credit losses inherently involves a high degree of subjectivity and requires us to make significant estimates of current credit
risks and trends, all of which may undergo material changes. We cannot be sure that we will be able to identify deteriorating credits before they become
nonperforming assets or that we will be able to limit losses on those loans and leases that are identified. We have in the past been, and in the future may be, required
to increase our allowance for credit losses for any of several reasons. State and federal regulators, in reviewing our loan and lease portfolio as part of a regulatory
examination, may request that we increase the allowance for credit losses. Changes in economic conditions or individual business or personal circumstances
affecting borrowers, new information regarding existing loans and leases, identification of additional problem loans and leases and other factors, both within and
outside of our control, may require an increase in the allowance for credit losses. Any increases in the allowance for credit losses may result in a decrease in our net
income and, possibly, our capital, and could have an adverse effect on our financial condition and results of operations.
Our loan and lease portfolios include commercial real estate mortgage loans and commercial loans and leases, including equipment leases, which are generally
riskier than other types of loans.
Our commercial real estate and commercial loan and lease portfolios, including equipment leases, currently comprise 84.1% of total loans and leases.
Payments on loans secured by commercial real estate are often dependent on the income produced by the underlying properties which, in turn, depends on the
successful operation and management of the properties and the businesses that operate within them. Accordingly, repayment of these loans is subject to conditions
in the real estate market or the local economy. The COVID-19 pandemic has had a long-term negative impact on certain commercial real estate assets due to the risk
that tenants may reduce the office space they lease as some portion of the workforce continues to work remotely on a hybrid or full-time basis. Commercial loans
and leases generally carry larger balances and involve a higher risk of nonpayment or late payment than residential mortgage loans. Most commercial loans and
leases are secured by borrower business assets such as accounts receivable, inventory, equipment and other fixed assets. Compared to real estate, these types of
collateral are more difficult to monitor, harder to value, may depreciate more rapidly and may not be as readily saleable if repossessed. Repayment of commercial
loans and leases is largely dependent on the business and financial condition of borrowers. Business cash flows are dependent on the demand for the products and
services offered by the borrower's business. Such demand may be reduced when economic conditions are weak or when the products and services offered are
viewed as less valuable than those offered by competitors. Because of the risks associated with commercial real estate and commercial loans and leases, including
equipment leases, we may experience higher rates of default than if the portfolio were more heavily
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weighted toward residential mortgage loans. While we seek to minimize these risks in a variety of ways, there can be no assurance that these measures will protect
against credit-related losses.
Environmental liability associated with our lending activities could result in losses.
In the course of business, we may acquire, through foreclosure, properties securing loans originated or purchased that are in default. Particularly in
commercial real estate lending, there is a risk that material environmental violations could be discovered on these properties. In this event, we might be required to
remedy these violations at the affected properties at our sole cost and expense. The cost of remedial action could substantially exceed the value of affected
properties. We may not have adequate remedies against the prior owner or other responsible parties and could find it difficult or impossible to sell the affected
properties. These events could have an adverse effect on our financial condition and results of operations.
Our securities portfolio performance in difficult market conditions could have adverse effects on our results of operations.
Unrealized losses on investment securities result from changes in credit spreads and liquidity issues in the marketplace, along with changes in the credit profile
of individual securities issuers. Under GAAP, we are required to review our investment portfolio periodically for the presence of impairment of our securities,
taking into consideration current and future market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings,
current analysts' evaluations, our ability and intent to hold investments until a recovery of fair value, as well as other factors. Adverse developments with respect to
one or more of the foregoing factors may require us to deem particular securities to be impaired, with the credit-related portion of the reduction in the value
recognized as a charge to our earnings through an allowance. Subsequent valuations, in light of factors prevailing at that time, may result in significant changes in
the values of these securities in future periods. Any of these factors could require us to recognize further impairments in the value of our securities portfolio, which
may have an adverse effect on our results of operations in future periods.
The fair value of our investment securities can fluctuate due to factors outside of our control.
Factors beyond our control can significantly influence the fair value of securities in our portfolio and can cause potential adverse changes to the fair value of
these securities. These factors include, but are not limited to, rating agency actions with respect to individual securities, defaults by the issuer or with respect to the
underlying securities, and changes in market interest rates and continued instability in the capital markets. For example, in 2023, inflation and rapid increases in
interest rates led to a decline in the trading value of previously issued government securities with interest rates below current market interest rates. Any of these
factors, among others, could cause impairments and realized and/or unrealized losses in future periods and declines in other comprehensive income, which could
materially and adversely affect our business, results of operations, financial condition and prospects. The process for determining whether a security is impaired
usually requires complex, subjective judgments about the future financial performance and liquidity of the issuer and any collateral underlying the security in order
to assess the probability of receiving all contractual principal and interest payments on the security. Significant negative changes to valuations could result in
impairments in the value of our securities portfolio, which could have an adverse effect on our financial condition or results of operations.
Potential downgrades of U.S. government securities by one or more of the credit ratings agencies could have a material adverse effect on our operations,
earnings and financial condition.
A possible future downgrade of the sovereign credit ratings of the U.S. government and a decline in the perceived creditworthiness of U.S. government-related
obligations could impact our ability to obtain funding that is collateralized by affected instruments, as well as affect the pricing of that funding when it is available.
A downgrade may also adversely affect the market value of such instruments. We cannot predict if, when or how any changes to the credit ratings or perceived
creditworthiness of these organizations will affect economic conditions. Such ratings actions could result in a significant adverse impact on us. Among other things,
a downgrade in the U.S. government’s credit rating could adversely impact the value of our securities portfolio and may trigger requirements that we post additional
collateral for trades relative to these securities. A downgrade of the sovereign credit ratings of the U.S. government or the credit ratings of related institutions,
agencies or instruments could significantly exacerbate the other risks to which we are subject and any related adverse effects on the business, financial condition and
results of operations.
Loss of deposits or a change in deposit mix could increase our cost of funding.
Deposits are a low cost and stable source of funding. We compete with banks and other financial institutions for deposits. Funding costs may increase if we
lose deposits and are forced to replace them with more expensive sources of funding, if clients shift their deposits into higher cost products or if we need to raise
interest rates to avoid losing deposits. Higher funding costs reduce our net interest margin, net interest income and net income.
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Wholesale funding sources may prove insufficient to replace deposits at maturity and support our operations and future growth.
We and our banking subsidiaries must maintain sufficient funds to respond to the needs of depositors and borrowers. To manage liquidity, we draw upon a
number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. These sources include Federal Home Loan
Bank advances, proceeds from the sale of investments and loans, and liquidity resources at the holding company. Our ability to manage liquidity will be severely
constrained if we are unable to maintain access to funding or if adequate financing is not available to accommodate future growth at acceptable costs. In addition, if
we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs.
In this case, operating margins and profitability would be adversely affected. Turbulence in the capital and credit markets may adversely affect our liquidity and
financial condition and the willingness of certain counterparties and customers to do business with us.
Potential deterioration in the performance or financial position of the FHLB of Boston and New York might restrict our funding needs and may adversely
impact our financial condition and results of operations.
Significant components of our liquidity needs are met through our access to funding pursuant to our membership in the FHLB. The FHLB is a cooperative that
provides services to its member banking institutions. The primary reason for joining the FHLB is to obtain funding. The purchase of stock in the FHLB is a
requirement for a member to gain access to funding. Any deterioration in the FHLB’s performance or financial condition may affect our ability to access funding
and/or require us to deem the required investment in FHLB stock to be impaired. If we are not able to access funding through the FHLB, we may not be able to
meet our liquidity needs, which could have an adverse effect on our results of operations or financial condition. Similarly, if we deem all or part of our investment in
FHLB stock impaired, such action could have an adverse effect on our financial condition or results of operations.
The soundness of other financial institutions could adversely affect us.
Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions.
Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships. Actual events involving limited liquidity, defaults,
non-performance or other adverse developments that affect financial institutions, transactional counterparties or other companies in the financial services industry or
the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, have in the past and may in the future lead to
market-wide liquidity problems. If such events were to occur again in the future and result in the receivership of financial institutions, there is no guarantee that the
systemic risk exception would be invoked to allow the FDIC to complete its resolution of such financial institutions in a manner that fully protects depositors or
counterparties.
We have exposure to a number of different counterparties, and we routinely execute transactions with counterparties in the financial industry, including
brokers and dealers, other commercial banks, investment banks, and other financial institutions. Many of these transactions expose us to credit risk in the event of
default of our counterparty or customer. In addition, our credit risk may be exacerbated when the collateral held by us cannot be liquidated or is liquidated at prices
not sufficient to recover the full amount of the financial instrument exposure due to us. There is no assurance that any such losses would not materially and
adversely affect our results of operations.
Damage to our reputation could significantly harm our business, including our competitive position and business prospects.
We are dependent on our reputation within our market area, as a trusted and responsible financial services company, for all aspects of our business with
customers, employees, vendors, third-party service providers, and others, with whom we conduct business or potential future businesses. Negative public opinion
about the financial services industry generally (including the types of banking and other services that we provide) or us specifically could adversely affect our
reputation and our ability to keep and attract customers and employees. Our actual or perceived failure to address various issues could give rise to negative public
opinion and reputational risk that could cause harm to us and our business prospects. These issues include, but are not limited to, legal and regulatory requirements;
properly maintaining customer and employee personal information; record keeping; money-laundering; sales and trading practices; ethical issues; appropriately
addressing potential conflicts of interest; and the proper identification of the legal, reputational, credit, liquidity and market risks inherent in our products. Failure to
appropriately address any of these issues could also give rise to additional regulatory restrictions and legal risks, which could, among other consequences, increase
the size and number of litigation claims and damages asserted or subject us to enforcement actions, fines and penalties and cause us to incur related costs and
expenses.
The proliferation of social media websites utilized by us and other third parties, as well as the personal use of social media by our employees and others,
including personal blogs and social network profiles, also may increase the risk that negative, inappropriate or unauthorized information may be posted or released
publicly that could harm our reputation or have other negative consequences, including as a result of our employees interacting with our customers in an
unauthorized manner in
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various social media outlets. Any damage to our reputation could affect our ability to retain and develop the business relationships necessary to conduct business,
which in turn could negatively impact our financial condition, results of operations, and the market price of our common stock.
We may be unable to attract and retain qualified key employees, which could adversely affect our business prospects, including our competitive position and
results of operations.
Our success is dependent upon our ability to attract and retain highly skilled individuals. There is significant competition for those individuals with the
experience and skills required to conduct many of our business activities. We may not be able to hire or retain the key personnel that we depend upon for success.
The unexpected loss of services of one or more of these or other key personnel could have a material adverse impact on our business because of their skills,
knowledge of the markets in which we operate, years of industry experience and the difficulty of promptly finding qualified replacement personnel. Frequently, we
compete in the market for talent with entities that are not subject to comprehensive regulation, including with respect to the structure of incentive compensation. Our
inability to attract new employees and retain and motivate our existing employees could adversely impact our business.
Our ability to service our debt and pay dividends is dependent on capital distributions from our subsidiary banks, and these distributions are subject to
regulatory limits and other restrictions.
We are a legal entity that is separate and distinct from the Banks. Our revenue (on a parent company only basis) is derived primarily from dividends paid to us
by the Banks. Our right, and consequently the right of our shareholders, to participate in any distribution of the assets or earnings of the Banks through the payment
of such dividends or otherwise is necessarily subject to the prior claims of creditors of the Banks (including depositors), except to the extent that certain claims of
ours in a creditor capacity may be recognized. It is possible, depending upon the financial condition of our subsidiary banks and other factors, that applicable
regulatory authorities could assert that payment of dividends or other payments is an unsafe or unsound practice. If one or more of our subsidiary banks is unable to
pay dividends to us, we may not be able to service our debt or pay dividends on our common stock. Further, our ability to pay dividends on our common stock or
service our debt could be restricted if we do not maintain a capital conservation buffer of common equity Tier 1 capital. A reduction or elimination of dividends
could adversely affect the market price of our common stock and would adversely affect our business, financial condition, results of operations and prospects. See
Item 1, “Business-Supervision and Regulation-Dividend Restrictions” and “Business-Supervision and Regulation-Capital Adequacy and Safety and Soundness-
Regulatory Capital Requirements.”
We face continuing and growing security risks to our information base, including the information we maintain relating to our customers.
In the ordinary course of business, we rely on electronic communications and information systems to conduct our business and to store sensitive data,
including financial information regarding customers. Our electronic communications and information systems infrastructure, as well as the systems infrastructures
of the vendors we use to meet our data processing and communication needs, could be susceptible to cyber-attacks, such as denial of service attacks, hacking,
terrorist activities or identity theft. Financial services institutions and companies engaged in data processing have reported breaches in the security of their websites
or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data,
disable or degrade service or sabotage systems, often through the introduction of computer viruses or malware, cyber-attacks and other means. Denial of service
attacks have been launched against a number of large financial services institutions. Hacking and identity theft risks, in particular, could cause serious reputational
harm. Cyber threats are rapidly evolving and we may not be able to anticipate or prevent all such attacks. Although to date we have not experienced any material
losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future. No matter how well
designed or implemented our controls are, we will not be able to anticipate all security breaches of these types, and we may not be able to implement effective
preventive measures against such security breaches in a timely manner. A failure or circumvention of our security systems could have a material adverse effect on
our business operations and financial condition.
We regularly assess and test our security systems and disaster preparedness, including back-up systems, but the risks are substantially escalating. As a result,
cyber-security and the continued enhancement of our controls and processes to protect our systems, data and networks from attacks, unauthorized access or
significant damage remain a priority. Accordingly, we may be required to expend additional resources to enhance our protective measures or to investigate and
remediate any information security vulnerabilities or exposures. Any breach of our system security could result in disruption of our operations, unauthorized access
to confidential customer information, significant regulatory costs, litigation exposure and other possible damages, loss or liability. Such costs or losses could exceed
the amount of available insurance coverage, if any, and would adversely affect our earnings. Also, any failure to prevent a security breach or to quickly and
effectively deal with such a breach could negatively impact customer confidence, damaging our reputation and undermining our ability to attract and keep
customers.
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We may not be able to successfully implement future information technology system enhancements, which could adversely affect our business operations and
profitability.
We invest significant resources in information technology system enhancements in order to provide functionality and security at an appropriate level. We may
not be able to successfully implement and integrate future system enhancements, which could adversely impact the ability to provide timely and accurate financial
information in compliance with legal and regulatory requirements, which could result in sanctions from regulatory authorities. Such sanctions could include fines
and suspension of trading in our stock, among others. In addition, future system enhancements could have higher than expected costs and/or result in operating
inefficiencies, which could increase the costs associated with the implementation as well as ongoing operations.
Failure to properly utilize system enhancements that are implemented in the future could result in impairment charges that adversely impact our financial
condition and results of operations and could result in significant costs to remediate or replace the defective components. In addition, we may incur significant
training, licensing, maintenance, consulting and amortization expenses during and after systems implementations, and any such costs may continue for an extended
period of time.
We rely on other companies to provide key components of our business infrastructure.
Third party vendors provide key components of our business infrastructure such as internet connections, network access and core application processing.
While we have selected these third party vendors carefully, we do not control them or their actions. Any problems caused by these third parties, including as a result
of their not providing us their services for any reason or their performing their services poorly, could adversely affect our ability to deliver products and services to
our customers or otherwise conduct our business efficiently and effectively. Replacing these third party vendors could also entail significant delay and expense.
We may incur significant losses as a result of ineffective risk management processes and strategies.
We seek to monitor and control our risk exposure through a risk and control framework encompassing a variety of separate but complementary financial,
credit, operational, compliance, and legal reporting systems; internal controls; management review processes; and other mechanisms. In some cases, management of
our risks depends upon the use of analytical and/or forecasting tools and techniques, which, in turn, rely on assumptions and estimates. If these tools and techniques
used to mitigate these risks are inadequate, or the assumption or estimates are inaccurate or otherwise flawed, we may fail to adequately protect against risks and
may incur losses. While we believe that we have adopted appropriate management and compliance programs, compliance risks will continue to exist, particularly as
we anticipate and adapt to new and evolving laws, rules and regulations and evolving interpretations by regulatory authorities. In addition there may be risks that
exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated, which could lead to unexpected losses and our results of
operations or financial condition could be materially adversely affected.
Our internal controls, procedures and policies may fail or be circumvented.
Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any
system of controls, however well-designed and operated, is based in part on certain assumptions and can provide only reasonable, not absolute, assurances that the
objectives of the system are met. Any failure or circumvention of the controls and procedures or failure to comply with regulations related to controls and
procedures could have a material adverse effect on our business, results of operations and financial condition.
Natural disasters, acts of terrorism, future pandemics and other external events could harm our business.
Natural disasters can disrupt our operations, result in damage to our properties, reduce or destroy the value of the collateral for our loans and negatively affect
the economies in which we operate, which could have a material adverse effect on our results of operations and financial condition. A significant natural disaster,
such as a tornado, hurricane, earthquake, fire or flood, could have a material adverse impact on our ability to conduct business, and our insurance coverage may be
insufficient to compensate for losses that may occur. Acts of terrorism, war, civil unrest or future pandemics could cause disruptions to our business or the economy
as a whole. While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our
business, operations and financial condition.
Our financial statements are based in part on assumptions and estimates, which, if wrong, could cause unexpected losses in the future.
Pursuant to U.S. GAAP, we are required to use certain assumptions and estimates in preparing our financial statements, including in determining loan loss and
litigation reserves, goodwill impairment and the fair value of certain assets and liabilities, among other items. If assumptions or estimates underlying our financial
statements are incorrect, we may experience
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material losses. See the "Critical Accounting Policies" section in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."
Changes in accounting standards can be difficult to predict and can materially impact how we record and report our financial condition and results of
operations.
Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. From time to time, the
Financial Accounting Standards Board, or "FASB", changes the financial accounting and reporting principles that govern the preparation of our financial statements.
These changes can be hard to anticipate and implement, and can materially impact how we record and report our financial condition and results of operations. In
some cases, we could be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements. Additionally,
significant changes to accounting standards may require costly technology changes, additional training and personnel, and other expense that will negatively impact
our results of operations.
Changes in tax laws and regulations and differences in interpretation of tax laws and regulations may adversely impact our financial statements.
From time to time, local, state or federal tax authorities change tax laws and regulations, which may result in a decrease or increase to our net deferred tax
assets. Local, state or federal tax authorities may interpret tax laws and regulations differently than we do and challenge tax positions that we have taken on tax
returns. This may result in differences in the treatment of revenues, deductions, credits and/or differences in the timing of these items. The differences in treatment
may result in payment of additional taxes, interest or penalties that could have a material adverse effect on our results.
Future capital offerings may adversely affect the market price of our common stock.
In the future, we may attempt to increase our capital resources or, if our banking subsidiaries' capital ratios fall below required minimums, we could be forced
to raise additional capital by making additional offerings of debt, common or preferred stock, trust preferred securities, and senior or subordinated notes. Upon
liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive distributions of our available assets
prior to the holders of our common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common
stock, or both. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot
predict or estimate the amount, timing or nature of our future offerings. Moreover, we cannot assure you that such capital will be available to us on acceptable terms
or at all. Our inability to raise sufficient additional capital on acceptable terms when needed could adversely affect our businesses, financial condition and results of
operations.
The market price and trading volume of our common stock may be volatile.
The market price of our common stock may be volatile. In addition, the trading volume in our common stock may fluctuate and cause significant price
variations to occur. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future. Some of the factors that
could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:
•
quarterly variations in our operating results or the quality of our assets;
•
operating results that vary from the expectations of management, securities analysts and investors;
•
changes in expectations as to our future financial performance;
•
announcements of innovations, new products, strategic developments, significant contracts, acquisitions and other material events by us or our competitors;
•
the operating and securities price performance of other companies that investors believe are comparable to us;
•
our past and future dividend practices;
•
future sales of our equity or equity-related securities; and
•
changes in global financial markets and global economies and general market conditions, such as interest rates, stock, commodity or real estate valuations
or volatility.
We may be required to write down goodwill and other acquisition-related identifiable intangible assets.
When we acquire a business, a portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable intangible assets. The excess
of the purchase price over the fair value of the net identifiable tangible and intangible
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assets acquired determines the amount of the purchase price that is allocated to goodwill acquired. As of December 31, 2024, goodwill and other identifiable
intangible assets were $258.7 million. Under current accounting guidance, if we determine that goodwill or intangible assets are impaired, we would be required to
write down the value of these assets. We conduct an annual review to determine whether goodwill and other identifiable intangible assets are impaired. We conduct
a quarterly review for indicators of impairment of goodwill and other identifiable intangible assets. Our management recently completed these reviews and
concluded that no impairment charge was necessary for the year ended December 31, 2024. We cannot provide assurance whether we will be required to take an
impairment charge in the future. Any impairment charge would have a negative effect on stockholders' equity and financial results and may cause a decline in our
stock price.
RISKS RELATED TO OUR REGULATORY ENVIRONMENT
We operate in a highly regulated industry, and laws and regulations, or changes in them, could limit or restrict our activities and could have a material adverse
effect on our operations.
We and our banking subsidiaries are subject to extensive state and federal regulation and supervision. Federal and state laws and regulations govern numerous
matters affecting us, including changes in the ownership or control of banks and bank holding companies, maintenance of adequate capital and the financial
condition of a financial institution, permissible types, amounts and terms of extensions of credit and investments, permissible non-banking activities, the level of
reserves against deposits and restrictions on dividend payments. The FRB and the state banking regulators have the power to issue cease and desist orders to prevent
or remedy unsafe or unsound practices or violations of law by banks subject to their regulation, and the FRB possesses similar powers with respect to bank holding
companies. Further, we expect to become subject to future laws, rules and regulations beyond those currently proposed, adopted or contemplated in the U.S., as well
as evolving interpretations of existing and future laws, rules and regulations. These and other restrictions limit the manner in which we and our banking subsidiaries
may conduct business and obtain financing.
The laws, rules, regulations, and supervisory guidance and policies applicable to us are subject to regular modification and change. These changes could,
among other things, subject us to additional costs, including costs of compliance; limit the types of financial services and products we may offer; and/or increase the
ability of non-banks to offer competing financial services and products. Failure to comply with laws, regulations, policies, or supervisory guidance could result in
enforcement and other legal actions by federal or state authorities, including criminal and civil penalties, the loss of FDIC insurance, revocation of a banking
charter, other sanctions by regulatory agencies, civil money penalties, and/or reputational damage, which could have a material adverse effect on our business,
financial condition, and results of operations. See the "Supervision and Regulation" section of Item 1, "Business."
We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with
these laws could lead to a wide variety of sanctions.
The CRA, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations impose community investment and
nondiscriminatory lending requirements on financial institutions. The CFPB, the Department of Justice and other federal agencies are responsible for enforcing
these laws and regulations. A successful regulatory challenge to an institution’s performance under the CRA, the Equal Credit Opportunity Act, the Fair Housing Act
or other fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on
mergers and acquisitions, restrictions on expansion and restrictions on entering new business lines. Private parties may also have the ability to challenge an
institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial
condition and results of operations.
We may become subject to enforcements actions even though noncompliance was inadvertent or unintentional.
The financial services industry is subject to intense scrutiny from bank supervisors in the examination process and aggressive enforcement of federal and state
regulations, particularly with respect to mortgage-related practices and other consumer compliance matters, and compliance with anti-money laundering, BSA and
OFAC regulations, and economic sanctions against certain foreign countries and nationals. Enforcement actions may be initiated for violations of laws and
regulations and unsafe or unsound practices. We maintain systems and procedures designed to ensure that we comply with applicable laws and regulations;
however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or
unintentional and even though there was in place at the time systems and procedures designed to ensure compliance. Failure to comply with these and other
regulations, and supervisory expectations related thereto, may result in fines, penalties, lawsuits, regulatory sanctions, reputation damage, or restrictions on our
business.
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We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us.
As a participant in the financial services industry, many aspects of our business involve substantial risk of legal liability. From time to time, customers and
others make claims and take legal action pertaining to the performance of our responsibilities. Whether customer claims and legal action related to the performance
of our responsibilities are founded or unfounded, if such claims and legal actions are not resolved in a manner favorable to us, they may result in significant
expenses, attention from management and financial liability. Any financial liability or reputational damage could have a material adverse effect on our business,
which, in turn, could have a material adverse effect on our financial condition and results of operations. There is no assurance that litigation with private parties will
not increase in the future. Actions currently pending against us may result in judgments, settlements, fines, penalties or other results adverse to us, which could
materially adversely affect our business, financial condition or results of operations, or cause serious reputational harm to us.
The FRB may require us to commit capital resources to support the Banks.
Federal law requires that a holding company act as a source of financial and managerial strength to its subsidiary bank and to commit resources to support
such subsidiary bank. Under the “source of strength” doctrine, the FRB may require a holding company to make capital injections into a troubled subsidiary bank
and may charge the holding company with engaging in unsafe and unsound practices for failure to commit resources to a subsidiary bank. A capital injection may be
required at times when the holding company may not have the resources to provide it and therefore may require the holding company to borrow the funds or raise
capital. Any loans by a holding company to its subsidiary bank are subordinate in right of payment to deposits and to certain other indebtedness of such subsidiary
bank. In the event of a holding company’s bankruptcy, the bankruptcy trustee will assume any commitment by the holding company to a federal bank regulatory
agency to maintain the capital of a subsidiary bank. Moreover, bankruptcy law provides that claims based on any such commitment will be entitled to a priority of
payment over the claims of the institution’s general unsecured creditors, including the holders of its note obligations. Thus, any borrowing that must be done by us
to make a required capital injection becomes more difficult and expensive and could have an adverse effect on our business, financial condition and results of
operations.
We are subject to stringent capital requirements which may adversely impact return on equity, require additional capital raises, or limit the ability to pay
dividends or repurchase shares.
Federal regulations establish minimum capital requirements for insured depository institutions, including minimum risk-based capital and leverage ratios, and
define “capital” for calculating these ratios. The minimum capital requirements are: (i) a common equity Tier 1 capital ratio of 4.5%; (ii) a Tier 1 to risk-based assets
capital ratio of 6%; (iii) a total capital ratio of 8%; and (iv) a Tier 1 leverage ratio of 4%. The regulations also establish a “capital conservation buffer” of 2.5%,
which if complied will result in the following minimum ratios: (i) a common equity Tier 1 capital ratio of 7.0%; (ii) a Tier 1 to risk-based assets capital ratio of
8.5%; and (iii) a total capital ratio of 10.5%. An institution will be subject to limitations on paying dividends, engaging in share repurchases and paying
discretionary bonuses if its capital level falls below the capital conservation buffer amount. The application of these capital requirements could, among other things,
require us to maintain higher capital resulting in lower returns on equity, and we may be required to obtain additional capital to comply or result in regulatory
actions if we are unable to comply with such requirements. See Item 1, “Business-Supervision and Regulation-Capital Adequacy and Safety and Soundness-
Regulatory Capital Requirements.”
RISKS RELATED TO OUR PROPOSED MERGER WITH BERKSHIRE
The need for regulatory approvals may delay the date of completion of the Merger or may diminish the benefits of the Merger.
Approvals of certain regulatory agencies are required before completing the Merger. Satisfying any requirements of these regulatory agencies may delay the
date of completion of the Merger. The requisite regulatory approvals may not be received at all (in which case the Merger could not be completed), may not be
received in a timely fashion, or may contain conditions or restrictions on completion of the Merger 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 Merger, which might
have an adverse effect on the combined company following the Merger. 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 Merger to the combined company or otherwise have an adverse effect on the combined company following the Merger.
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Litigation against us, or the members of our board of directors, could prevent or delay the completion of the Merger.
Our stockholders may file lawsuits against the Company and/or our board of directors in connection with the Merger. Such legal proceedings could delay or
prevent the Merger from being completed in a timely manner. The existence of litigation related to the Merger could affect the likelihood of obtaining the required
regulatory and stockholders approvals. Moreover, any litigation could be time-consuming and expensive and could divert our management’s attention away from
their regular business and their focus on a successful integration of the two companies. Any lawsuit adversely resolved against the Company or members of our
board of directors could have a material adverse effect on our business, financial condition and results of operations.
Moreover, one of the conditions to the completion of the Merger 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 Merger, 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 Merger 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 Agreement (including the Merger), then such
injunctive or other relief may prevent the Merger from becoming effective in a timely manner or at all.
We will be subject to business uncertainties and contractual restrictions while the Merger is pending.
Uncertainty about the effect of the Merger on employees and customers may have an adverse effect on the Company. These uncertainties may impair our
ability to attract, retain and motivate key personnel until the Merger is completed, and could cause customers and others who deal with the Company to seek to
change existing business relationships with us. In addition, the Merger Agreement requires that we conduct our business in the ordinary course of business
consistent with past practice and restricts us from taking certain actions prior to the effective time or termination of the Merger Agreement without Berkshire’s
consent in writing. These restrictions may prevent us from pursuing attractive business opportunities that may arise prior to the completion of the Merger.
The announcement of the proposed Merger could disrupt our relationships with our customers, suppliers, business partners and others, as well as their
operating results and businesses generally.
Whether or not the Merger is ultimately consummated, as a result of uncertainty related to the Merger, risks relating to the impact of the announcement of the
merger on our business includes the following:
• our employees may experience uncertainty about their future roles, which might adversely affect our ability to retain and hire key personnel and other
employees;
• customers, suppliers, business partners and other parties with which we maintain business relationships may experience uncertainty about their respective
futures and seek alternative relationships with third parties, seek to alter their business relationships with us or fail to extend an existing relationship with us; and
• We have expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the
proposed Merger.
If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact each party’s results of operations and financial
condition.
The Merger Agreement limits our ability to pursue alternatives to the Merger and may discourage other companies from trying to acquire us.
The Merger Agreement contains “no shop” covenants that restrict our 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 our 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 the Company from considering or making that acquisition proposal. If the Merger Agreement is terminated in
certain circumstances, a termination fee of $45.0 million will be payable by either Company or Berkshire, as applicable.
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The combined company will incur significant transaction and merger-related costs in connection with the Merger.
We and Berkshire will incur costs to combine the operations of the two companies. We and Berkshire are collecting information to formulate detailed
integration plans to deliver planned synergies. Additional unanticipated costs may be incurred in the integration of our business and Berkshire’s business. Whether
or not the Merger is consummated, we will incur substantial expenses, such as legal, accounting, printing and financial advisory fees, in pursuing the Merger.
Although we expect 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 Merger is not completed, we will have incurred substantial expenses without our stockholders realizing the expected benefits of the Merger.
We have incurred and will incur further substantial expenses in connection with the Merger, 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 Merger is not completed, these expenses will still be charged to earnings even though
we would not have realized the expected benefits of the Merger. There can be no assurance that the Merger will be completed.
The Company and Berkshire may not be able to successfully integrate the two companies or to realize the anticipated benefits of the Merger.
The Merger involves the combination of two companies that previously have operated independently. A successful combination of the operations of the two
entities will depend substantially on our ability to consolidate cultures, personnel, operations, systems and procedures and to eliminate redundancies and reduce
costs of the combined operations. The combined company may not be able to combine our operations with the operations of Berkshire 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
• 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 the two companies.
We entered into the Merger Agreement with the expectation that the Merger 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 Merger is subject to a number of uncertainties, including whether the Company and Berkshire 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 our 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 Merger may not be completed.
The Merger Agreement is subject to a number of conditions that must be fulfilled to complete the Merger. Those conditions include, among others, certain
regulatory and stockholder approvals, the absence of orders prohibiting the completion of the Merger, the effectiveness of a registration statement to be filed by
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 Merger may not be fulfilled, and as a result the Merger may not be completed.
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The future results of the combined company following the Merger may suffer if the combined company does not effectively manage its expanded operations.
Following the Merger, the size of the business of the combined company will increase beyond the current size of either the Company’s or Berkshire’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 Merger.
The results of operations of the combined company and the market price of the combined company’s common stock after the completion of the Merger may be
affected by factors different from those currently affecting the independent results of operations of each of the Company and Berkshire. In addition, the issuance of
shares of the Company’s common stock in the Merger could depress the market price for the combined company’s common stock. For example, some of our
stockholders may decide not to hold the shares of the combined company’s common stock they receive as a result of the Merger. Other Company stockholders, such
as funds with limitations on their permitted holdings of stock in individual issuers, may be required to sell the shares of the combined company’s common stock
they receive as a result of the Merger. Any such sales of the combined company’s common stock could depress the market price for the combined company’s
common stock.
Current holders of the our common stock will have a significantly reduced ownership and voting interest in the combined company after the Merger and will
therefore have less voting influence over the combined company.
In the Merger, each of our stockholders will become a holder of common stock of the combined company. Upon completion of the Merger, we estimate that
the Company’s stockholders will collectively own approximately 45% and Berkshire’s stockholders as of immediately before the Merger will own approximately
51% of the outstanding shares of common stock of the combined company (in each case, on an as-converted and fully diluted basis and without regard to the fact
that immediately before the Merger, certain holders may own both Company and Berkshire stock), and investors in new shares from Berkshire’s private placement
will own approximately 4% of the outstanding shares of the combined company. As a result, the Company’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 over the Company.
Because the market price of Berkshire’s common stock may fluctuate, our stockholders cannot be certain of the precise value of the merger consideration they
may receive in our proposed Merger with Berkshire.
At the time the Merger is completed, each issued and outstanding share of our common stock will be converted into the right to receive a combination of 0.42
shares of Berkshire’s common stock. There will be a time lapse between each of the date of the proxy statement/prospectus for the special stockholders’ meetings to
approve the Merger Agreement and the issuance of the merger consideration, the date on which our and Berkshire’s stockholders vote to approve the Merger
Agreement (with regard to the Company) and the issuance of the merger consideration (with regard to Berkshire), and the date on which our stockholders entitled to
receive shares of Berkshire’s common stock actually receive such shares. The market value of Berkshire’s common stock may fluctuate during these periods as a
result of a variety of factors, including general market and economic conditions, changes in Berkshire’s and our businesses, operations and prospects, the volatility
in the prices of securities in global financial markets and regulatory considerations. Many of these factors are outside of both our and Berkshire’s control. The actual
value of the shares of Berkshire’s common stock received by our stockholders will depend on the market value of shares of Berkshire’s common stock at the time
the Merger is completed.
Item 1B.    Unresolved Staff Comments
None.
Item 1C.    Cybersecurity
As a financial services company, we face cybersecurity risks and threats, and our customers, suppliers, and third-party service providers face cybersecurity
risks and threats. As part of the operation of our business, the Company uses, stores, and processes data for our customers, employees, partners, and suppliers. A
cybersecurity incident impacting any of these entities could materially adversely affect our operations, performance, or results of operations. In addition, as a
financial services company we are subject to extensive regulatory compliance requirements, including those established by the FRB, MDOB, RIDBR, and NYDFS.
To address these risks and regulatory requirements, the Company implemented the Program that is designed to identify, assess and mitigate risks from cybersecurity
threats to the data and our systems. The Program adheres to regulatory requirements and the tenets of the FFIEC handbook and the NIST Cybersecurity Framework.
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Risk Management Oversight and Governance
Our CISO, assisted by our Information Security team, has primary responsibility for assessing and managing the Program and reporting on cybersecurity
matters to the Company’s Board of Directors and members of executive management. Our CISO has extensive experience managing information technology
systems and information security systems, previously served as the Company’s Chief Information Officer, and holds the Certified Information Systems Security
Professional (“CISSP”) and Certified Information Security Manager (“CISM”) certifications. Our CISO regularly updates members of executive management on
developments surrounding cybersecurity. The CISO reports to the Risk Committee of the Board of Directors and provides regular reports to the Board of Directors
and Risk Committee on emerging cybersecurity issues and the Company’s cybersecurity infrastructure.
Our Program is overseen by the Company’s Board of Directors, which has delegated certain responsibilities to the Audit Committee and the Risk Committee.
The Chairs of the Audit Committee and Risk Committee, in turn, report to the Board of Directors a summary of the presentations they have received relative to the
Program. The Board of Directors oversees management’s processes for identifying and mitigating risks, including cyber risks, to assist in the alignment of our risk
exposure with our overall strategic business objectives. The Board of Directors has also engaged an experienced information security advisor to assist them with
cybersecurity and data privacy oversight responsibilities. This advisor provides the Board of Directors with independent updates on external market cybersecurity
threats and emerging risks on a regular basis.
The Risk Committee, Audit Committee, and the Board of Directors are active in understanding and evaluating cybersecurity risks. The Risk Committee
receives and reviews a quarterly Enterprise Risk Management (“ERM”) report from the Chief Risk Officer that is the cumulation of a process that involves
discussions with leaders across the Company and incorporates a number of enterprise risk factors, including those related to cybersecurity threats. The Audit
Committee receives the results of internal and external penetration testing as well as any other audits applicable to the Company’s information security programs.
The Audit Committee actively engages management in discussions surrounding the outcome of these audits.
At least annually, the Board of Directors receives a report from the CISO covering the Company’s information security program. This report includes a review
of enhancements to the Company’s programs, a discussion of management’s actions to identify and detect threats and planned action steps in the event of an
incident, and an overview of employee training and engagement efforts. In addition, separately, on at least an annual basis, the Board of Directors receives updates
from the CISO on the Company’s Incident Response Plan, which outlines steps to be followed in the event of an incident including detection, mitigation, recovery,
and notification (including notification to senior management, the Board of Directors, and functional business areas), and remediation.
Cybersecurity Risk Management Program
The Program is designed to identify, assess, manage, mitigate, and respond to cyber threats with the goal of preventing cybersecurity incidents to the extent
feasible, while also increasing our system resilience to minimize business disruption in the event we experience a cyber event. Our program is structured to be
nimble and adaptable to changes in cybersecurity threats over time and to respond to emerging threats in a timely and efficient manner. Our Program consists of a
layered cybersecurity approach and is incorporated into our overall ERM program.
Our Information Security team, led by our CISO, is responsible for monitoring our information systems for vulnerabilities and mitigating any issues. The
Information Security team works collaboratively across the Company to understand the potential impacts of a cybersecurity incident and prioritize mitigation and
other measures based on, among other things, the materiality to our business. The Information Security team has established processes designed to monitor threats
in the cybersecurity landscape which include interacting with intelligence networks, working with researchers, discussions with peers at other companies,
monitoring social media, reviewing government alerts and other news items and attending industry specific security conferences and trainings. The team regularly
monitors our internal network and customer-facing network to identify any security issues. In addition, the Company augments the team’s monitoring via the
engagement of external vendors who provide continuous threat monitoring services of the Company’s environment.
As part of our assessment of the risks to our Company, the Information Security team conducts annual cybersecurity risk assessments to evaluate the inherent
risk of our applications and the strength of our controls, and identify the residual risk for each application. In addition, we conduct regular reviews and testing of
critical network and application systems to monitor their security. We have adopted internal Company-wide Information Technology and Information Security
policies which are reviewed and updated annually and approved by our Board of Directors. Our employees and the Board of Directors attend annual trainings that
are designed to raise awareness about cybersecurity threats, reduce our vulnerability, and encourage consideration of cybersecurity threats across the Company.
Additional trainings are required for employees in certain roles; these additional trainings are tailored to the employees’ specific duties.
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We regularly review and update our investments in information technology security to identify and protect critical assets, provide monitoring and alerts, and,
as needed, engage third-party experts. To assess the effectiveness of our Program, we have engaged consultants to conduct penetration testing and other
vulnerability assessments. Additionally, our Internal Audit department and external auditors conduct assessments of different systems to provide the Audit
Committee with information on our risk management processes, including cybersecurity risk management. We also test our defenses internally and conduct regular
cybersecurity simulations and tabletop exercises with members of executive management present. These tests and assessments provide useful insights into the
strengths and weaknesses of our cybersecurity framework.
Our cybersecurity framework is designed to protect our customers, employees, investors, and our intellectual property. Before purchasing third-party
technology or other solutions that could expose the Company’s assets and electronic information, our Information Security and Information Technology teams
complete security reviews on the vendors. We also conduct ongoing reviews of cybersecurity risks associated with our third-party service providers. As part of the
Company’s Vendor Management Program, annual reviews are conducted for certain third-party vendors. Members of our Information Security team work with our
Vendor Management team to review SOC 1 or SOC 2 reports. In the event a third-party vendor is unable to provide either a SOC 1 or SOC 2 report, this group
conducts additional reviews to assess the cybersecurity preparedness of the specific vendor. This assessment of the risks associated with the use of third-party
service providers is part of our overall vendor management and cybersecurity risk management framework.
Our Company faces a number of cybersecurity risks in connection with the operation of our business which could have a material adverse effect on our
business financial condition, results of operations, cash flows, or reputation. Although, to date, such risks have not materially affected us, we have, from time to
time, experienced threats and breaches to our data and systems. For more information about the cybersecurity risks we face, see the risk factors entitled “We face
continuing and growing security risks to our information base, including the information we maintain relating to our customers.” and “We rely on other companies
to provide key components of our business infrastructure.” in Item 1A- Risk Factors.
Item 2.    Properties
The Company’s executive administration offices are located at 131 Clarendon Street, Boston, Massachusetts, which is owned by Brookline Bank, as well as its
corporate operations center in Lincoln, Rhode Island, which is owned by BankRI, with other administrative and operations functions performed at several different
locations. Clarendon Private conducts its business from a portion of the Company's executive administration offices which it leases.
Brookline Bank conducts its business from 27 banking offices, six of which are owned and 21 of which are leased. Brookline Bank's main banking office is
leased and located in Brookline, Massachusetts. Brookline Bank also has three additional lending offices and one remote ATM location, all of which are leased.
Eastern Funding conducts its business from leased premises in New York City, New York, in Melville, New York, and in Plainview, New York.
BankRI conducts its business from 22 banking offices, six of which are owned and 16 of which are leased. BankRI's main banking office is leased and located
in Providence, Rhode Island. BankRI also has two remote ATM locations, all of which are leased.
PCSB Bank conducts its business from 14 banking offices, four of which are owned and 10 of which are leased. PCSB bank's main banking office is leased
and located in Yorktown Heights, New York.
Refer to Note 13, "Commitments and Contingencies," to the consolidated financial statements for information regarding the Company's lease commitments as
of December 31, 2024.
Item 3.    Legal Proceedings
During the fiscal year ended December 31, 2024, the Company was not involved in any legal proceedings other than routine legal proceedings occurring in
the ordinary course of business. Management believes that those routine legal proceedings involve, in the aggregate, amounts that are immaterial to the Company's
financial condition and results of operations.
Item 4.    Mine Safety Disclosures
Not applicable.
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PART II
Item 5.    Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
(a)
The common stock of the Company is traded on Nasdaq under the symbol BRKL. The number of registered holders of common stock as of March 3, 2025
was 2,583. The Company currently pays quarterly cash dividends in the amount of $0.135 per share. The Company expects comparable cash dividends will
be paid in the future.
Equity Compensation Plan Information
Refer to Note 20, "Employee Benefit Plans" for a discussion of the Company's equity compensation plans.
Five-Year Performance Comparison
The following graph compares total shareholder return on the Company's common stock over the last five years with the S&P 500 Index, the Russell 2000
Index and the KBW Regional Banking Index. Index values are as of December 31 of each of the indicated years.
At December 31,
Index
2019
2020
2021
2022
2023
2024
Brookline Bancorp, Inc.
100.00 
73.15 
98.36 
85.97 
66.28 
71.69 
Russell 2000 Index
100.00 
118.36 
134.57 
105.56 
121.49 
133.66 
KBW Regional Banking Index
100.00 
87.90 
117.08 
106.01 
101.77 
111.52 
S&P 500 Index
100.00 
116.26 
147.52 
118.84 
147.64 
182.05 
The graph assumes $100 invested on December 31, 2019 in each of the Company's common stock, the S&P 500 Index, the Russell 2000 Index and the KBW
Regional Banking Index. The graph also assumes reinvestment of all dividends.
(b)
Not applicable.
(c)    Not applicable.
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Item 6.    [Reserved]
Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations
Introduction
The Company, a Delaware corporation, operates as a multi-bank holding company for Brookline Bank and its subsidiaries; BankRI; PCSB Bank and its
subsidiaries; and Clarendon Private, LLC. Brookline Securities Corp, previously a subsidiary of Brookline Bancorp, Inc., was dissolved in November 2023.
As a commercially-focused financial institution with 63 full-service banking offices throughout Greater Boston, Rhode Island and New York, the Company,
through the Banks offers a wide range of commercial, business and retail banking services, including a full complement of cash management products, foreign
exchange services, on-line and mobile banking services, consumer and residential loans and investment advisory services, designed to meet the financial needs of
small- to mid-sized businesses and individuals throughout central New England and the Lower Hudson Valley in New York. The Banks and their subsidiaries lend
primarily in all New England states and New York, with the exception of equipment financing, 29.5% of which is in the greater New York and New Jersey
metropolitan area and 70.5% of which is in other areas in the United States of America as of December 31, 2024. Clarendon Private is a registered investment
advisor with the SEC. Through Clarendon Private, the Company offers a wide range of wealth management services to individuals, families, endowments and
foundations to help these clients meet their long-term financial goals.
The Company focuses its business efforts on profitably growing its commercial lending businesses, both organically and through acquisitions. The Company’s
customer focus, multi-bank structure, and risk management are integral to its organic growth strategy and serve to differentiate the Company from its competitors.
As full-service financial institutions, the Banks and their subsidiaries focus their efforts on developing and deepening long-term banking relationships with qualified
customers through a full complement of products and excellent customer service, and strong risk management.
The Company manages the Banks under uniform strategic objectives, with one set of uniform policies consistently applied by one executive management
team. Within this environment, the Company believes that the ability to make customer decisions locally enhances management's motivation, service levels and, as a
consequence, the Company's financial results. As such, while most back-office functions are consolidated at the holding company level, branding and decision-
making, including credit decisions and pricing, remain largely local in order to better meet the needs of bank customers and further motivate the Banks’ commercial,
business and retail bankers. These credit decisions, at the local level, are executed through corporate policies overseen by the Company's credit department.
The competition for loans and leases and deposits remains strong, with growth and pricing influenced by the Federal Reserve's interest rate-setting actions.
Management's scenario analysis of deposit sensitivity to the current rate environment and customer demand for non-depository investment alternatives suggests
further deposit mix migration and increased sensitivity to interest rates.
As the interest rate environment resets to a more normal, upward-sloping yield curve with shorter-term interest rates lower than longer-term interest rates,
management expects net interest margin to increase. This is due to deposit and wholesale funding costs repricing, while legacy loans do not reprice down with the
same magnitude.
However, if both short- and long-term interest rates fall, net interest income models, using a projected flat balance
sheet with stable deposit balances and an average sensitivity of deposit rates of approximately 40% to market rates, forecast that
a parallel decrease in rates will negatively affect the Company's net interest income, net interest spread, and net interest margin.
Note, while our long term historical sensitivity of deposit rates approximates 40%, more recently, deposit rate sensitivity has
been higher, which if that continues in the future would have a more neutral or positive impact on net interest income.
As discussed above, changes in interest rates could also precipitate a change in the mix and volume of the Company's deposits and loans. The future operating
results of the Company will depend on its ability to maintain or increase the current net interest income, manage credit risk, increase sources of non-interest income,
while managing non-interest expenses.
The Company’s common stock is traded on the Nasdaq Global Select Market
 under the symbol “BRKL.”
Executive Overview
Balance Sheet
Total assets increased $0.5 billion, or 4.6%, to $11.9 billion as of December 31, 2024 from $11.4 billion as of December 31, 2023. The increase was primarily
driven by cash and cash equivalents, and loans and leases.
SM
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Cash and cash equivalents increased $410.6 million, or 308.7%, to $543.7 million as of December 31, 2024 from $133.0 million as of December 31, 2023.
Total loans and leases increased $137.7 million, or 1.4%, to $9.8 billion as of December 31, 2024 from $9.6 billion as of December 31, 2023. The Company's
commercial loan portfolios, which are comprised of commercial real estate loans and commercial loans and leases, totaled $8.2 billion, or 84.1% of total loans and
leases as of December 31, 2024, an increase of $58.6 million, or 0.7%, from $8.2 billion, or 84.7% of total loans and leases, as of December 31, 2023.
Total deposits increased $353.5 million, or 4.1%, to $8.9 billion as of December 31, 2024 from $8.5 billion as of December 31, 2023. Core deposits, which
include demand checking, NOW, money market and savings accounts, totaled $6.1 billion, or 69.1% of total deposits, as of December 31, 2024, an increase of $55.2
million, or 0.9%, from $6.1 billion, or 71.3% of total deposits, as of December 31, 2023. Certificate of deposit balances totaled $1.9 billion, or 21.2% of total
deposits, as of December 31, 2024, an increase of $310.6 million, or 19.7%, from $1.6 billion, or 18.4% of total deposits, as of December 31, 2023. Brokered
deposit balances totaled $0.9 billion, or 9.8% of total deposits as of December 31, 2024, a decrease of $12.2 million, or 1.4%, from $0.9 billion, or 10.3% of total
deposits, as of December 31, 2023.
Total borrowed funds increased $143.2 million, or 10.4%, to $1.5 billion as of December 31, 2024 from $1.4 billion as of December 31, 2023.
Asset Quality
Nonperforming assets as of December 31, 2024 totaled $70.5 million, or 0.59% of total assets, compared to $45.3 million, or 0.40% of total assets, as of
December 31, 2023. Total net charge-offs for the year ended December 31, 2024 were $28.2 million, or 0.29% of average loans and leases, compared to $19.7
million, or 0.21% of average loans and leases, for the year ended December 31, 2023. The increase of $25.2 million in nonperforming assets was primarily driven
by increases of $16.5 million in nonperforming equipment financing loans, $10.8 million in nonperforming commercial loans, $6.6 million in nonperforming multi-
family loans, respectively, offset by a decrease of $8.1 million in nonperforming commercial real estate loans during the year ended December 31, 2024.
The ratio of the allowance for loan and lease losses to total loans and leases was 1.28% as of December 31, 2024, compared to 1.22% as of December 31,
2023.
The ratio of the allowance for loan and lease losses to nonaccrual loans and leases was 180.37% as of December 31, 2024, compared to 269.36% as of
December 31, 2023.
Capital Strength
The Company is a "well-capitalized" bank holding company as defined in the FRB's Regulation Y. The Company's common equity Tier 1 capital ratio was
10.46% as of December 31, 2024, compared to 10.25% as of December 31, 2023. The Company's Tier 1 leverage ratio was 9.06% as of December 31, 2024,
compared to 9.02% as of December 31, 2023. As of December 31, 2024, the Company's Tier 1 risk-based ratio was 10.56%, compared to 10.35% as of
December 31, 2023. The Company's total risk-based ratio was 12.42% as of December 31, 2024, compared to 12.37% as of December 31, 2023.
The Company's ratio of stockholders' equity to total assets was 10.26% and 10.53% as of December 31, 2024 and December 31, 2023, respectively. The
Company's tangible equity ratio was 8.27% and 8.39% as of December 31, 2024 and December 31, 2023, respectively.
Net Income
For the year ended December 31, 2024, the Company reported net income of $68.7 million, or $0.77 per basic and diluted share, a decrease of $6.3 million, or
8.4%, from $75.0 million, or $0.85 per basic and diluted share for the year ended December 31, 2023. The decrease in net income is primarily the result of a
decrease in net interest income of $10.1 million, a decrease in non-interest income of $6.3 million, an increase in the provision for income taxes of $4.1 million, and
an increase in non-interest expense of $2.3 million, partially offset by a decrease in the provision for credit losses on loans of $15.9 million and a decrease in
provision for investment losses of $0.7 million.
The return on average assets was 0.60% for the year ended December 31, 2024, compared to 0.67% for the year ended December 31, 2023. The return on
average stockholders' equity was 5.67% for the year ended December 31, 2024, compared to 6.42% for the year ended December 31, 2023.
Net interest margin was 3.06% for the year ended December 31, 2024, down from 3.24% for the year ended December 31, 2023. The decrease in net interest
margin is a result of an increase of 59 basis points in the Company's cost of interest bearing
29

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liabilities to 3.59% in 2024 from 3.00% in 2023, partially offset by an increase in the yield on interest-earning assets of 33 basis points to 5.83% in 2024 from
5.50% in 2023.
Results for 2024 included a provision for credit losses of $22.0 million, as discussed in the "Allowance for Credit Losses—Allowance for Loan and Lease
Losses" section below.
Non-interest income decreased $6.3 million to $25.6 million for the year ended December 31, 2024 from $31.9 million for the year ended December 31, 2023.
Several factors contributed to the year over year decrease, including decreases of $2.2 million in loan level derivative income, net, $1.7 million in gain on sales of
investment securities, net, $1.6 million in gain on sales of loans and leases, and $1.1 million in deposit fees, partially offset by an increase of $0.4 million in loan
fees.
Non-interest expense increased $2.3 million to $241.9 million for the year ended December 31, 2024 from $239.5 million for the year ended December 31,
2023. The increase was largely attributable to increases of $4.8 million in compensation and employee benefits expense, $1.9 million in occupancy expense, $0.5
million in advertising and marketing expense, and $0.4 million in equipment and data processing expense, partially offset by decreases of $3.2 million in merger
and restructuring expense, $1.1 million in amortization of identified intangible assets, and $1.0 million in other non-interest expense.
Critical Accounting Policies and Estimates
The accounting policies described below are considered critical to understanding the Company's financial condition and operating results. Such accounting
policies are considered to be especially important because they involve a higher degree of complexity and require management to make difficult and subjective
judgments which often require assumptions or estimates about matters that are inherently uncertain. The use of different judgments, assumptions and estimates
could result in material differences in the Company's operating results or financial condition.
Allowance for Credit Losses
Description. The allowance for credit losses represents management's estimate of expected losses over the life of the loan and lease portfolio. The allowance
for credit losses consists of the allowance for loan and lease losses and reserve for unfunded commitments, which are classified as a contra-asset and liability within
other liabilities, respectively, on the Consolidated Balance Sheets. Additions to the allowance for credit losses are made by charges to the provision for credit losses.
Losses on loans and leases are deducted from the allowance when all or a portion of a loan or lease is considered uncollectible. The determination of the loans on
which full collectability is not reasonably assured, the estimates of the fair value of the underlying collateral, and the assessment of economic and other conditions
are subject to assumptions and judgments by management. Valuation allowances could differ materially as a result of changes in, or different interpretations of,
these assumptions and judgments.
Management evaluates the adequacy of the allowance on a quarterly basis and reviews its conclusion as to the amount to be established with the Audit
Committee and the Board of Directors.
Judgments and Uncertainties. In estimating the allowance for credit losses, the Company relies on models and economic forecasts developed by external
parties as the primary driver of the allowance for credit losses. These models and forecasts are based on nationwide sets of data. As a result, the Company has
calibrated the output of these models to match the performance of a relevant set of peer institutions during the development dataset in order to make the results more
relevant to the Company. Additionally, economic forecasts can change significantly over an economic cycle and have a significant level of uncertainty associated
with them. The performance of the models is dependent on the variables used in the models being reasonable proxies for the portfolio’s performance; however, these
variables may not capture all sources of risk within the portfolio. As a result, management reviews the results and makes qualitative adjustments to the models to
capture limitations of the models as necessary. Such qualitative factors may include adjustments to better capture the risk of specialty lending portfolios, the
imprecision associated with the economic forecasts, and the ability of the models to capture emerging risks within the portfolio that may not be represented in the
historical dataset. These judgments are thoroughly evaluated through management’s review process, and revised on a quarterly basis to account for changes in the
facts and circumstances of the portfolio.
Effect if Actual Results Differ From Assumptions. The allowance for credit losses is a reflection of the Company’s best estimate of loss based on a forecast of
future conditions as of a point in time. Conditions in the future may vary from those forecasts, causing realized losses to be either higher or lower than forecasted,
which will result in either additional provisions from income or a benefit to income based on the performance of the portfolio.
Recent Accounting Developments
In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from
Contracts with Customers" which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in
accordance with Topic 606, Revenue from Contracts with
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Customers. At the acquisition date, an acquirer should account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts.
The Company adopted ASU 2021-08 as of January 1, 2023 on a prospective basis. The adoption did not have a material impact on the Company's consolidated
financial statements.
In March 2022, the FASB issued ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures"
which addresses concerns regarding the complex accounting for loans modified as troubled debt restructurings and also the disclosure of gross writeoff information
included in required vintage disclosures. The Company adopted ASU 2022-02 as of January 1, 2023. The enhanced disclosure requirements provided for by ASU
2022-02 were adopted on a prospective basis. Reporting periods prior to the adoption of ASU 2022-02 are presented in accordance with the applicable GAAP. The
adoption did not have a material impact on the Company’s consolidated financial statements.
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which improves
reportable segment disclosure requirements, particularly regarding a reportable segment’s expenses. This update is effective for fiscal years beginning after
December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 as of January 1, 2024. The
adoption did not have a material impact on the Company's consolidated financial statements.
See Note 2, “Recent Accounting Pronouncements” in the notes to the consolidated financial statements for additional information regarding recent accounting
developments.
Non-GAAP Financial Measures and Reconciliation to GAAP
In addition to evaluating the Company’s results of operations in accordance with GAAP, management periodically supplements this evaluation with an
analysis of certain non-GAAP financial measures, such as the operating earnings metrics, the return on average tangible assets, return on average tangible equity, the
tangible stockholders' equity, tangible equity ratio, tangible book value per share and dividend payout ratio. Management believes that these non-GAAP financial
measures provide information useful to investors in understanding the Company’s underlying operating performance and trends, and facilitates comparisons with
the performance assessment of financial performance, including non-interest expense control, while the tangible equity ratio and tangible book value per share are
used to analyze the relative strength of the Company’s capital position.
The methodologies used by the Company for determining the non-GAAP financial measures discussed above may differ from those used by other financial
institutions.
Operating Earnings
Operating earnings exclude the after-tax impact of securities gains, the day 1 CECL provision and merger and restructuring expense. By excluding such items,
the Company's results can be measured and assessed on a more consistent basis from period to period. Items excluded from operating earnings are also excluded
when calculating the operating return and operating efficiency ratios.
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The following table summarizes the Company's operating earnings and operating earnings per share ("EPS") for the periods indicated:
Year Ended December 31,
2024
2023
2022
2021
2020
(Dollars in Thousands, Except Per Share Data)
Net income, as reported
$
68,715 
$
74,999 
$
109,744 
$
115,440 
$
47,635 
Less:
Security (losses) gains (after-tax)
— 
1,361 
252 
(28)
1,511 
Add:
Day 1 PCSB CECL provision (after tax)
— 
13,372 
— 
— 
— 
Merger and restructuring expense (after-tax) 
3,697 
5,918 
1,763 
— 
— 
Operating earnings
$
72,412 
$
92,928 
$
111,255 
$
115,468 
$
46,124 
Earnings per share, as reported
$
0.77 
$
0.85 
$
1.42 
$
1.48 
$
0.60 
Less:
Security gains (after-tax)
— 
0.02 
— 
— 
0.02 
Add:
Day 1 PCSB CECL provision (after tax)
— 
0.15 
— 
— 
— 
Merger and restructuring expense (after-tax) 
0.04 
0.07 
0.02 
— 
— 
Operating earnings per share
$
0.81 
$
1.05 
$
1.44 
$
1.48 
$
0.58 
_________________________________________________________________________
(1) The 2022 and 2023 merger and restructuring expense was related to the acquisition of PCSB in the first quarter of 2023. The 2024 merger and restructuring expense was related to the exit of the specialty
vehicle business at Eastern Funding in the second quarter of 2024, and the proposed merger transaction with Berkshire Hills Bancorp, Inc. expected to close by the end of the second half of 2025.
The following table summarizes the Company's operating return on average assets, operating return on average tangible assets, operating return on average
stockholders' equity and operating return on average tangible stockholders' equity for the periods indicated:
(1)
(1)
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Year Ended December 31,
2024
2023
2022
2021
2020
(Dollars in Thousands)
Operating earnings
$
72,412 
$
92,928 
$
111,255 
$
115,468 
$
46,124 
Average total assets
$
11,473,424 
$
11,214,371 
$
8,623,403 
$
8,518,200 
$
8,683,569 
Less: Average goodwill and average identified intangible
assets, net
262,011 
270,637 
162,447 
163,122 
164,227 
Average tangible assets
$
11,211,413 
$
10,943,734 
$
8,460,956 
$
8,355,078 
$
8,519,342 
Return on average assets
0.60 %
0.67 %
1.27 %
1.36 %
0.55 %
Less:
Security gains (after-tax)
— %
0.01 %
— %
— %
0.02 %
Add:
Day 1 PCSB CECL provision (after tax)
— %
0.12 %
— %
— %
— %
Merger and restructuring expense (after-tax)
0.03 %
0.05 %
0.02 %
— %
— %
Operating return on average assets
0.63 %
0.83 %
1.29 %
1.36 %
0.53 %
Return on average tangible assets
0.61 %
0.69 %
1.30 %
1.38 %
0.56 %
Less:
Security gains (after-tax)
— %
0.01 %
— %
— %
0.02 %
Add:
Day 1 PCSB CECL provision (after tax)
— %
0.12 %
— %
— %
— %
Merger and restructuring expense (after-tax)
0.03 %
0.05 %
0.02 %
— %
— %
Operating return on average tangible assets
0.64 %
0.85 %
1.32 %
1.38 %
0.54 %
Average total stockholders' equity
$
1,211,036 
$
1,168,106 
$
984,237 
$
967,538 
$
936,075 
Less: Average goodwill and average identified intangible
assets, net
262,011 
270,637 
162,447 
163,122 
164,227 
Average tangible stockholders' equity
$
949,025 
$
897,469 
$
821,790 
$
804,416 
$
771,848 
Return on average stockholders' equity
5.67 %
6.42 %
11.15 %
11.93 %
5.09 %
Less:
Security gains (after-tax)
— %
0.12 %
0.03 %
— %
0.16 %
Add:
Day 1 PCSB CECL provision (after tax)
— %
1.14 %
— %
— %
— %
Merger and restructuring expense (after-tax)
0.26 %
0.51 %
0.18 %
— %
— %
Operating return on average stockholders' equity
5.93 %
7.95 %
11.30 %
11.93 %
4.93 %
Return on average tangible stockholders' equity
7.24 %
8.36 %
13.35 %
14.35 %
6.17 %
Less:
Security gains (after-tax)
— %
0.15 %
0.03 %
— %
0.20 %
Add:
Day 1 PCSB CECL provision (after tax)
— %
1.49 %
— %
— %
— %
Merger and restructuring expense (after-tax)
0.33 %
0.66 %
0.21 %
— %
— %
Operating return on average tangible stockholders'
equity
7.57 %
10.36 %
13.53 %
14.35 %
5.97 %
33

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The following table summarizes the Company’s return on average tangible assets and return on average tangible stockholders’ equity for the periods indicated:
Year Ended December 31,
2024
2023
2022
2021
2020
(Dollars in Thousands)
Net income, as reported
$
68,715 
$
74,999 
$
109,744 
$
115,440 
$
47,635 
Average total assets
$
11,473,424 
$
11,214,371 
$
8,623,403 
$
8,518,200 
$
8,683,569 
Less: Average goodwill and average identified intangible
assets, net
262,011 
270,637 
162,447 
163,122 
164,227 
Average tangible assets
$
11,211,413 
$
10,943,734 
$
8,460,956 
$
8,355,078 
$
8,519,342 
Return on average tangible assets
0.61 %
0.69 %
1.30 %
1.38 %
0.56 %
Average total stockholders' equity
$
1,211,036 
$
1,168,106 
$
984,237 
$
967,538 
$
936,075 
Less: Average goodwill and average identified intangible
assets, net
262,011 
270,637 
162,447 
163,122 
164,227 
Average tangible stockholders' equity
$
949,025 
$
897,469 
$
821,790 
$
804,416 
$
771,848 
Return on average tangible stockholders' equity
7.24 %
8.36 %
13.35 %
14.35 %
6.17 %
The following table summarizes the Company's tangible equity ratio for the periods indicated:
At December 31,
2024
2023
2022
2021
2020
(Dollars in Thousands)
Total stockholders' equity
$
1,221,939 
$
1,198,644 
$
992,125 
$
995,342 
$
941,778 
Less: Goodwill and identified intangible assets, net
258,683 
265,429 
162,208 
162,703 
163,579 
Tangible stockholders' equity
$
963,256 
$
933,215 
$
829,917 
$
832,639 
$
778,199 
Total assets
$
11,905,326 
$
11,382,256 
$
9,185,836 
$
8,602,622 
$
8,942,424 
Less: Goodwill and identified intangible assets, net
258,683 
265,429 
162,208 
162,703 
163,579 
Tangible assets
$
11,646,643 
$
11,116,827 
$
9,023,628 
$
8,439,919 
$
8,778,845 
Tangible equity ratio
8.27 %
8.39 %
9.20 %
9.87 %
8.86 %
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The following table summarizes the Company's tangible book value per share for the periods indicated:
Year Ended December 31,
2024
2023
2022
2021
2020
(Dollars in Thousands)
Tangible stockholders' equity
$
963,256 
$
933,215 
$
829,917 
$
832,639 
$
778,199 
Common shares issued
96,998,075 
96,998,075 
85,177,172 
85,177,172 
85,177,172 
Less:
Treasury shares
7,019,384 
7,354,399 
7,731,445 
7,037,464 
6,525,783 
Unallocated ESOP
— 
— 
— 
24,660 
51,114 
Unvested restricted stock
880,248 
749,099 
601,495 
500,098 
458,800 
Common shares outstanding
89,098,443 
88,894,577 
76,844,232 
77,614,950 
78,141,475 
Tangible book value per share
$
10.81 
$
10.50 
$
10.80 
$
10.73 
$
9.96 
The following table summarizes the Company's dividend payout ratio for the periods indicated:
Year Ended December 31,
2024
2023
2022
2021
2020
(Dollars in Thousands)
Dividends paid
$
48,058 
$
47,926 
$
40,077 
$
37,463 
$
36,396 
Net income, as reported
$
68,715 
$
74,999 
$
109,744 
$
115,440 
$
47,635 
Dividend payout ratio
69.94 %
63.90 %
36.52 %
32.45 %
76.41 %
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Financial Condition
Loans and Leases
The following table summarizes the Company's portfolio of loan and lease receivables as of the dates indicated:
At December 31,
2024
2023
2022
2021
2020
Balance
Percent
of Total
Balance
Percent
of Total
Balance
Percent
of Total
Balance
Percent
of Total
Balance
Percent
of Total
(Dollars in Thousands)
Commercial real estate
loans:
Commercial real
estate
$
4,027,265 
41.1 %
$
4,047,288 
42.0 %
$
3,046,746 
39.9 %
$
2,842,791 
39.6 %
$
2,578,773 
35.4 %
Multi-family
mortgage
1,387,796 
14.2 %
1,415,191 
14.7 %
1,150,597 
15.1 %
1,099,818 
15.4 %
1,013,432 
13.9 %
Construction
301,053 
3.1 %
302,050 
3.1 %
206,805 
2.7 %
160,431 
2.2 %
231,621 
3.2 %
Total commercial real
estate loans
5,716,114 
58.4 %
5,764,529 
59.8 %
4,404,148 
57.7 %
4,103,040 
57.2 %
3,823,826 
52.5 %
Commercial loans and
leases:
 
 
 
 
 
Commercial
1,164,052 
11.9 %
984,441 
10.2 %
752,948 
9.9 %
734,388 
10.3 %
1,131,668 
15.6 %
Equipment financing
1,294,950 
13.2 %
1,370,648 
14.2 %
1,216,585 
15.9 %
1,105,611 
15.5 %
1,092,461 
15.0 %
Condominium
association
47,662 
0.5 %
44,579 
0.5 %
46,966 
0.6 %
47,137 
0.7 %
50,770 
0.7 %
Total commercial loans
and leases
2,506,664 
25.6 %
2,399,668 
24.9 %
2,016,499 
26.4 %
1,887,136 
26.5 %
2,274,899 
31.3 %
Consumer loans:
 
 
 
 
 
 
 
 
 
Residential mortgage
1,114,732 
11.4 %
1,082,804 
11.2 %
844,614 
11.0 %
799,737 
11.2 %
791,317 
10.9 %
Home equity
377,411 
3.9 %
344,182 
3.6 %
322,622 
4.2 %
324,156 
4.5 %
346,652 
4.8 %
Other consumer
64,367 
0.7 %
50,406 
0.5 %
56,505 
0.7 %
40,388 
0.6 %
32,859 
0.5 %
Total consumer loans
1,556,510 
16.0 %
1,477,392 
15.3 %
1,223,741 
15.9 %
1,164,281 
16.3 %
1,170,828 
16.2 %
Total loans and
leases
9,779,288 
100.0 %
9,641,589 
100.0 %
7,644,388 
100.0 %
7,154,457 
100.0 %
7,269,553 
100.0 %
Allowance for loan and
lease losses
(125,083)
(117,522)
(98,482)
(99,084)
(114,379)
Net loans and
leases
$
9,654,205 
$
9,524,067 
$
7,545,906 
$
7,055,373 
$
7,155,174 
The following table sets forth the growth in the Company’s loan and lease portfolios during the year ending December 31, 2024:
 
At December 31,
2024
At December 31,
2023
Dollar Change
Percent Change
(Annualized)
 
(Dollars in Thousands)
Commercial real estate
$
5,716,114 
$
5,764,529 
$
(48,415)
-0.8 %
Commercial
2,506,664 
2,399,668 
106,996 
4.5 %
Consumer
1,556,510 
1,477,392 
79,118 
5.4 %
Total loans and leases
$
9,779,288 
$
9,641,589 
$
137,699 
1.4 %
Total core loans and leases
$
9,779,288 
$
9,641,332 
$
137,956 
1.4 %
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The following table presents the maturity distribution of the Company's loan portfolio as of December 31, 2024.
At December 31, 2024
 
1 Year or Less
After 1-5 Years
After 5-15 Years
After 15 Years
Total
 
(Dollars in Thousands)
Commercial real estate
$
2,244,999 
$
2,730,579 
$
733,470 
$
7,066 
$
5,716,114 
Commercial
572,741 
1,357,553 
507,365 
69,005 
2,506,664 
Consumer
297,413 
248,433 
186,060 
824,603 
1,556,509 
Total
$
3,115,153 
$
4,336,565 
$
1,426,895 
$
900,674 
$
9,779,287 
The following table presents the distribution of the Company's loans that were due after one year between fixed and variable interest rates as of December 31,
2024.
At December 31, 2024
 
Fixed
Variable
Total
 
(Dollars in Thousands)
Commercial real estate
$
1,593,676 
$
1,877,438 
$
3,471,114 
Commercial
1,220,673 
713,251 
1,933,924 
Consumer
691,602 
567,495 
1,259,097 
Total
$
3,505,951 
$
3,158,184 
$
6,664,135 
The Company's loan portfolio consists primarily of first mortgage loans secured by commercial, multi-family and residential real estate properties located in
the Company's primary lending area, loans to business entities, including commercial lines of credit, loans to condominium associations and loans and leases used
to finance equipment used by small businesses. The Company also provides financing for construction and development projects, home equity and other consumer
loans.
The Company employs seasoned commercial lenders and retail bankers who rely on community and business contacts as well as referrals from customers,
attorneys and other professionals to generate loans and deposits. Existing borrowers are also an important source of business since many of them have more than
one loan outstanding with the Company. The Company's ability to originate loans depends on the strength of the economy, trends in interest rates, and levels of
customer demand and market competition.
The Company's current policy is that the total credit exposure to one obligor relationship may not exceed $60.0 million unless approved by the Credit
Committee, a committee of the Company's Board of Directors. As of December 31, 2024, there were four borrowers with commitments over $60.0 million. The
total of those commitments was $267.3 million or 2.3% of total loans and commitments as of December 31, 2024. As of December 31, 2023, there were four
borrowers with loans and commitments over $60.0 million. The total of those loans and commitments was $259.5 million, or 2.2% of total loans and commitments,
as of December 31, 2023.
The Company has written underwriting policies to control the inherent risks in loan origination. The policies address approval limits, loan-to-value ratios,
appraisal requirements, debt service coverage ratios, loan concentration limits and other matters relevant to loan underwriting.
Commercial Real Estate Loans
The commercial real estate portfolio is comprised of commercial real estate loans, multi-family mortgage loans, and construction loans and is the largest
component of the Company's overall loan portfolio, representing 58.4% of total loans and leases outstanding as of December 31, 2024.
Typically, commercial real estate loans are larger in size and involve a greater degree of risk than owner-occupied residential mortgage loans. Loan repayment
is usually dependent on the successful operation and management of the properties and the value of the properties securing the loans. Economic conditions can
greatly affect cash flows and property values.
A number of factors are considered in originating commercial real estate and multi-family mortgage loans. The qualifications and financial condition of the
borrower (including credit history), as well as the potential income generation and the value and condition of the underlying property, are evaluated. When
evaluating the qualifications of the borrower, the Company considers the financial resources of the borrower, the borrower's experience in owning or managing
similar property and the borrower's payment history with the Company and other financial institutions. Factors considered in evaluating the underlying property
include the net operating income of the mortgaged premises before debt service and depreciation, the debt
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service coverage ratio (the ratio of cash flow before debt service to debt service), the use of conservative capitalization rates, and the ratio of the loan amount to the
appraised value. Generally, personal guarantees are obtained from commercial real estate loan borrowers.
Commercial real estate and multi-family mortgage loans are typically originated for terms of five to fifteen years with amortization periods of 20 to 30 years.
Many of the loans are priced at inception on a fixed-rate basis generally for periods ranging from two to five years with repricing periods for longer-term loans.
When possible, prepayment penalties are included in loan covenants on these loans. For commercial customers who are interested in loans with terms longer than
five years, the Company offers loan level derivatives to accommodate customer need.
The Company's urban and suburban market area is characterized by a large number of apartment buildings, condominiums and office buildings. As a result,
commercial real estate and multi-family mortgage lending has been a significant part of the Company's activities for many years. These types of loans typically
generate higher yields, but also involve greater credit risk. Many of the Company's borrowers have more than one multi-family or commercial real estate loan
outstanding with the Company.
The commercial real estate portfolio was composed primarily of loans secured by multi-family buildings ($1.4 billion), office buildings ($767.3 million),
retail stores ($942.1 million), industrial properties ($822.0 million), mixed-use properties ($493.8 million), lodging services ($203.7 million) and food services
($78.3 million) as of December 31, 2024. As of that date, approximately 77.5% of the commercial real estate loans outstanding were secured by properties located
in New England; primarily in the Greater Boston and Greater Providence markets, with additional exposure of approximately 16.5% of the commercial real estate
loans outstanding were also secured by properties in the State of New York, nearly all of which is in the Lower Hudson Valley region.
The following table presents the percentage of the Company's commercial real estate loan portfolio by borrower type that is owner and non-owner occupied as
of December 31, 2024.
At December 31, 2024
 
Owner Occupied
Non-Owner Occupied
Total
Borrower type:
Multi-family buildings
— %
23.95 %
23.95 %
Office buildings
1.15 %
12.28 %
13.43 %
Retail stores
2.14 %
14.34 %
16.48 %
Industrial properties
2.59 %
11.79 %
14.38 %
Mixed-use properties
0.81 %
7.83 %
8.64 %
Lodging services
0.14 %
3.42 %
3.56 %
Food Services
0.75 %
0.62 %
1.37 %
Other
9.74 %
8.45 %
18.19 %
Total
17.32 %
82.68 %
100.00 %
The following table presents the percentage of the Company's commercial real estate loan portfolio by geographic concentration that is owner and non-owner
occupied as of December 31, 2024.
At December 31, 2024
 
Owner Occupied
Non-Owner Occupied
Total
Geographic concentration:
New England
11.55 %
67.14 %
78.69 %
New York
3.09 %
13.60 %
16.69 %
Other
1.88 %
2.74 %
4.62 %
Total
16.52 %
83.48 %
100.00 %
Construction and development financing is generally considered to involve a higher degree of risk than long-term financing on improved, occupied real estate
and thus has lower concentration limits than do other commercial credit classes. Risk of loss on a construction loan is largely dependent upon the accuracy of the
initial estimate of construction costs, the estimated time to sell or rent the completed property at an adequate price or rate of occupancy, and market conditions. If
the
38

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estimates and projections prove to be inaccurate, the Company may be confronted with a project which, upon completion, has a value that is insufficient to assure
full loan repayment.
Criteria applied in underwriting construction loans for which the primary source of repayment is the sale of the property is different from the criteria applied
in underwriting construction loans for which the primary source of repayment is the stabilized cash flow from the completed project. For those loans where the
primary source of repayment is from resale of the property, in addition to the normal credit analysis performed for other loans, the Company also analyzes project
costs, the attractiveness of the property in relation to the market in which it is located and demand within the market area. For those construction loans where the
source of repayment is the stabilized cash flow from the completed project, the Company analyzes not only project costs but also how long it might take to achieve
satisfactory occupancy and the reasonableness of projected rental rates in relation to market rental rates.
Commercial Loans
The commercial loan and lease portfolio is comprised of commercial loans, equipment financing loans and leases and condominium association loans
representing 25.6% of total loans outstanding as of December 31, 2024.
The commercial loan and lease portfolio is composed primarily of loans in the following sectors: small businesses ($890.3 million), transportation services
($302.3 million), food services ($298.9 million), recreation services ($126.8 million), rental and leasing services ($90.0 million), manufacturing ($150.6 million),
and retail ($144.3 million) as of December 31, 2024.
The Company provides commercial banking services to companies in its market area. Approximately 41.7% of the commercial loans outstanding as of
December 31, 2024 were made to borrowers located in New England; primarily in the Greater Boston and Greater Providence markets. The remaining 58.3% of the
commercial loans outstanding were made to borrowers in other areas in the United States of America, primarily by the Company's equipment financing divisions.
Product offerings include lines of credit, term loans, letters of credit, deposit services and cash management. These types of credit facilities have as their primary
source of repayment cash flows from the operations of a business. Interest rates offered are available on a floating basis tied to the prime rate or a similar index or
on a fixed-rate basis referenced on the Federal Home Loan Bank of Boston index.
Credit extensions are made to established businesses on the basis of loan purpose and assessment of capacity to repay as determined by an analysis of their
financial statements, the nature of collateral to secure the credit extension and, in most instances, the personal guarantee of the owner of the business as well as
industry and general economic conditions.
The Company’s equipment financing divisions focus on market niches in which its lenders have deep experience and industry contacts, and on making loans
to customers with business experience. An important part of the Company’s equipment financing loan origination volume comes from equipment manufacturers,
distributors, and owner-operated start-ups as well as existing customers that are expanding their operations. The equipment financing portfolio is composed
primarily of loans to finance vended-laundry, and to a lesser degree larger industrial laundries, tow trucks, fitness, and convenience/grocery store equipment.
Approximately 10.1% of all loans outstanding made by the equipment financing divisions were made to finance assets located in the State of New York. Typically,
the loans are priced at a fixed rate of interest and require monthly payments over their five- to ten-year life. The yields earned on equipment financing loans are
higher than those earned on the commercial loans made by the Banks because they involve a higher degree of credit risk. Equipment financing customers are
typically small-business owners who operate with limited financial resources and who face greater risks when the economy weakens or unforeseen adverse events
arise. Because of these characteristics, personal guarantees of borrowers are usually obtained along with liens on available assets. The size of loan is determined by
an analysis of cash flow and other characteristics pertaining to the business and the equipment to be financed, based on detailed revenue and profitability data of
similar operations.
Loans to condominium associations are for the purpose of funding capital improvements, are made for five- to ten-year terms and are secured by a general
assignment of condominium association revenues. Among the factors considered in the underwriting of such loans are the level of owner occupancy, the financial
condition and history of the condominium association, the attractiveness of the property in relation to the market in which it is located and the reasonableness of
estimates of the cost of capital improvements to be made. Depending on loan size, funds are advanced as capital improvements are made and, in more complex
situations, after completion of engineering inspections.
Consumer Loans
The consumer loan portfolio is comprised of residential mortgage loans, home equity loans and lines of credit, and other consumer loans representing, 16.0%
of total loans outstanding as of December 31, 2024. The Company focuses its mortgage and home equity lending on existing and new customers within its branch
networks in its urban and suburban marketplaces in the Greater Boston and Providence metropolitan areas along with the Lower Hudson Valley area of New York.
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The Company originates adjustable and fixed rate residential mortgage loans secured by one- to four-family residences. Each residential mortgage loan
granted is subject to a satisfactorily completed application, employment verification, credit history and a demonstrated ability to repay the debt. Generally, loans are
not made when the loan-to-value ratio exceeds 80% unless private mortgage insurance is obtained and/or there is a financially strong guarantor. Appraisals are
performed by outside independent appraisers.
Underwriting guidelines for home equity loans and lines of credit are similar to those for residential mortgage loans. Home equity loans and lines of credit are
limited to no more than 80% of the appraised value of the property securing the loan including the amount of any existing first mortgage liens.
Other consumer loans have historically been a modest part of the Company's loan originations. As of December 31, 2024, other consumer loans equaled $64.4
million, or 0.7% of total loans outstanding.
Asset Quality
Criticized and Classified Assets
The Company's management rates certain loans and leases as OAEM, "substandard" or "doubtful" based on criteria established under banking regulations.
These loans and leases are collectively referred to as "criticized" assets. Loans and leases rated OAEM have potential weaknesses that deserve management's close
attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects of the loan or lease at some future date. Loans and
leases rated as substandard are inadequately protected by the payment capacity of the obligor or of the collateral pledged, if any. Substandard loans and leases have
a well-defined weakness or weaknesses that jeopardize the liquidation of debt and are characterized by the distinct possibility that the Company will sustain some
loss if existing deficiencies are not corrected. Loans and leases rated as doubtful have well-defined weaknesses that jeopardize the orderly liquidation of debt and
partial loss of principal is likely. As of December 31, 2024, the Company had $252.7 million of total assets that were designated as criticized. This compares to
$128.0 million of assets designated as criticized as of December 31, 2023. The increase of $128.0 million in criticized assets was primarily driven by increases in
commercial real estate, multi-family, and equipment financing relationships, offset by decreases in commercial and construction relationships, for the year ended
December 31, 2024.
Nonperforming Assets
"Nonperforming assets" consist of nonaccrual loans and leases, OREO and other repossessed assets. Under certain circumstances, the Company may
restructure the terms of a loan or lease as a concession to a borrower, except for acquired loans and leases which are individually evaluated against expected
performance on the date of acquisition. These restructured loans and leases are generally considered "nonperforming loans and leases" until a history of collection of
at least six months on the restructured terms of the loan or lease has been established. OREO consists of real estate acquired through foreclosure proceedings and
real estate acquired through acceptance of a deed in lieu of foreclosure. Other repossessed assets consist of assets that have been acquired through foreclosure that
are not real estate and are included in other assets on the Company's consolidated balance sheets.
Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's
judgment, reasonable doubt exists as to the full timely collection of interest. When a loan is placed on nonaccrual status, interest accruals cease and all previously
accrued and uncollected interest is reversed and charged against current interest income. Interest payments on nonaccrual loans are generally applied to principal. If
collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when
principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six months of
performance has been achieved.
In cases where a borrower experiences financial difficulties and the Company makes or reasonably expects to make certain concessionary modifications to
contractual terms, the loan is classified as a modified loan. In determining whether a debtor is experiencing financial difficulties, the Company considers, among
other factors, if the debtor is in payment default or is likely to be in payment default in the foreseeable future without the modification, the debtor declared or is in
the process of declaring bankruptcy, there is substantial doubt that the debtor will continue as a going concern, the debtor's entity-specific projected cash flows will
not be sufficient to service its debt, or the debtor cannot obtain funds from sources other than the existing creditors at market terms for debt with similar risk
characteristics.
As of December 31, 2024, the Company had nonperforming assets of $70.5 million, representing 0.59% of total assets, compared to nonperforming assets of
$45.3 million, or 0.40% of total assets as of December 31, 2023. The increase of $25.2 million was primarily driven by increases of $16.5 million in nonperforming
equipment financing loans, $10.8 million in nonperforming commercial loans, $6.6 million in nonperforming multi-family loans, respectively, offset by a decrease
of $8.1 million in nonperforming commercial real estate loans during the year ended December 31, 2024.
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Table of Contents
The Company evaluates the underlying collateral of each nonaccrual loan and lease and continues to pursue the collection of interest and principal.
Management believes that the current level of nonperforming assets remains manageable relative to the size of the Company's loan and lease portfolio. If economic
conditions were to worsen or if the marketplace were to experience prolonged economic stress, it is likely that the level of nonperforming assets would increase, as
would the level of charged-off loans.        
Past Due and Accruing
As of December 31, 2024 ,the Company had $0.8 million loans and leases greater than 90 days past due and accruing, compared to minimal as of
December 31, 2023.
The following table sets forth information regarding nonperforming assets for the periods indicated:
At December 31,
2024
2023
2022
2021
2020
(Dollars in Thousands)
Nonperforming loans and leases:
Nonaccrual loans and leases:
Commercial real estate
$
11,525 
$
19,608 
$
607 
$
10,848 
$
3,300 
Multi-family mortgage
6,596 
— 
— 
— 
— 
Construction
— 
— 
707 
— 
3,853 
Total commercial real estate loans
18,121 
19,608 
1,314 
10,848 
7,153 
Commercial
14,676 
3,886 
464 
2,318 
7,702 
Equipment financing
31,509 
14,984 
9,653 
15,014 
16,757 
Condominium association
— 
— 
58 
84 
112 
Total commercial loans and leases
46,185 
18,870 
10,175 
17,416 
24,571 
Residential mortgage
3,999 
4,292 
2,680 
3,909 
5,587 
Home equity
1,043 
860 
723 
285 
1,136 
Other consumer
1 
— 
2 
1 
1 
Total consumer loans
5,043 
5,152 
3,405 
4,195 
6,724 
Total nonaccrual loans and leases
69,349 
43,630 
14,894 
32,459 
38,448 
Other real estate owned
700 
780 
— 
— 
5,415 
Other repossessed assets
403 
914 
408 
718 
1,100 
Total nonperforming assets
$
70,452 
$
45,324 
$
15,302 
$
33,177 
$
44,963 
Loans and leases past due greater than 90 days and
accruing
$
811 
$
228 
$
33 
$
1 
$
11,975 
Total delinquent loans and leases 61-90 days past due
6,119 
5,300 
2,218 
6,081 
16,129 
Total nonaccrual loans and leases as a percentage of
total loans and leases
0.71 %
0.45 %
0.19 %
0.45 %
0.53 %
Total nonperforming assets as a percentage of total
assets
0.59 %
0.40 %
0.17 %
0.39 %
0.50 %
Total delinquent loans and leases 61-90 days past due
as a percentage of total loans and leases
0.06 %
0.05 %
0.03 %
0.08 %
0.22 %
41

Table of Contents
Allowances for Credit Losses
The allowance for credit losses consists of general and specific allowances and reflects management's estimate of expected loan and lease losses over the life
of the loan or lease. Management uses a consistent and systematic process and methodology to evaluate the adequacy of the allowance for credit losses on a
quarterly basis. Management continuously evaluates and challenges inputs and assumptions in the allowance for credit losses.
While management evaluates currently available information in establishing the allowance for credit losses, future adjustments to the allowance for loan and
lease losses may be necessary if conditions differ substantially from the assumptions used in making the evaluations. Management performs a comprehensive
review of the allowance for credit losses on a quarterly basis. In addition, various regulatory agencies, as an integral part of their examination process, periodically
review a financial institution's allowance for credit losses and carrying amounts of other real estate owned. Such agencies may require the financial institution to
recognize additions or reductions to the allowance based on their judgments about information available to them at the time of their examination.
The Company’s allowance methodology provides a quantification of probable losses in the portfolio. Under the current methodology, management estimates
losses over the life of the loan using reasonable and supportable forecasts. Forecasts, loan data, and model documentation are extensively analyzed and reviewed
throughout the quarter to ensure estimated losses are appropriate at quarter end. Qualitative adjustments are applied when model output does not align with
management expectations. These adjustments are thoroughly reviewed and documented to provide clarity and a reasonable basis for any deviations from the model.
For December 31, 2024, qualitative adjustments were applied to the commercial real estate, commercial, and consumer portfolios resulting in a net addition in total
reserves compared to modeled calculations.
The following tables present the changes in the allowance for loans and lease losses by portfolio category for the years ended December 31, 2024, 2023, 2022,
2021, and 2020, respectively.
Year Ended December 31, 2024
Commercial
Real Estate
Commercial
Consumer
Total
(In Thousands)
Balance at December 31, 2023
$
81,410 
$
29,557 
$
6,555 
$
117,522 
Charge-offs
(4,425)
(22,345)
(40)
(26,810)
Recoveries
— 
2,241 
41 
2,282 
Provision (credit) for loan and lease losses
(2,814)
34,716 
187 
32,089 
Balance at December 31, 2024
$
74,171 
$
44,169 
$
6,743 
$
125,083 
Total loans and leases
$
5,716,114 
$
2,506,664 
$
1,556,510 
$
9,779,288 
Total allowance for loan and lease losses as a percentage of total loans
and leases
1.30 %
1.76 %
0.43 %
1.28 %
Year Ended December 31, 2023
Commercial
Real Estate
Commercial
Consumer
Total
(In Thousands)
Balance at December 31, 2022
$
68,154 
$
26,604 
$
3,724 
$
98,482 
Charge-offs
(1,204)
(19,990)
(41)
(21,235)
Recoveries
132 
1,406 
34 
1,572 
Provision (credit) for loan and lease losses
14,328 
21,537 
2,838 
38,703 
Balance at December 31, 2023
$
81,410 
$
29,557 
$
6,555 
$
117,522 
Total loans and leases
$
5,764,529 
$
2,399,668 
$
1,477,392 
$
9,641,589 
Total allowance for loan and lease losses as a percentage of total loans
and leases
1.41 %
1.23 %
0.44 %
1.22 %
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Table of Contents
Year Ended December 31, 2022
Commercial
Real Estate
Commercial
Consumer
Total
(In Thousands)
Balance at December 31, 2021
$
69,213 
$
27,055 
$
2,816 
$
99,084 
Charge-offs
(37)
(5,068)
(28)
(5,133)
Recoveries
24 
1,725 
64 
1,813 
Provision (credit) for loan and lease losses
(1,046)
2,892 
872 
2,718 
Balance at December 31, 2022
$
68,154 
$
26,604 
$
3,724 
$
98,482 
Total loans and leases
$
4,404,148 
$
2,016,499 
$
1,223,741 
$
7,644,388 
Allowance for loan and lease losses as a percentage of total loans and
leases
1.55 %
1.32 %
0.30 %
1.29 %
Year Ended December 31, 2021
Commercial
Real Estate
Commercial
Consumer
Total
(In Thousands)
Balance at December 31, 2020
$
80,132 
$
29,498 
$
4,749 
$
114,379 
Charge-offs
(28)
(7,464)
(34)
(7,526)
Recoveries
12 
1,541 
239 
1,792 
Provision (credit) for loan and lease losses
(10,903)
3,480 
(2,138)
(9,561)
Balance at December 31, 2021
$
69,213 
$
27,055 
$
2,816 
$
99,084 
Total loans and leases
$
4,103,040 
$
1,887,136 
$
1,164,281 
$
7,154,457 
Allowance for loan and lease losses as a percentage of total loans and
leases
1.69 %
1.43 %
0.24 %
1.38 %
Year Ended December 31, 2020
Commercial
Real Estate
Commercial
Consumer
Total
(In Thousands)
Balance at December 31, 2019
$
30,285 
$
24,826 
$
5,971 
$
61,082 
Adoption of ASU 2016-13 (CECL)
11,694 
(2,672)
(2,390)
6,632 
Balance at beginning of period, adjusted
41,979 
22,154 
3,581 
67,714 
Charge-offs
(3,514)
(11,113)
(36)
(14,663)
Recoveries
94 
1,407 
201 
1,702 
Provision (credit) for loan and lease losses
41,573 
17,050 
1,003 
59,626 
Balance at December 31, 2020
$
80,132 
$
29,498 
$
4,749 
$
114,379 
Total loans and leases
$
3,823,826 
$
2,274,899 
$
1,170,828 
$
7,269,553 
Allowance for loan and lease losses as a percentage of total loans and
leases
2.10 %
1.30 %
0.41 %
1.57 %
At December 31, 2024, the allowance for loan and lease losses increased to $125.1 million, or 1.28% of total loans and leases outstanding. This compared to
an allowance for loan and lease losses of $117.5 million, or 1.22% of total loans and leases outstanding, as of December 31, 2023.
Net charge-offs in the loans and leases portfolio for the years ending December 31, 2024 and 2023 were $24.5 million and $19.7 million, respectively. The
$4.8 million increase in net charge-offs was primarily driven by net charge-off increases of $11.9 million in equipment financing loans and $3.4 million in
commercial real estate loans, offset by a decrease of $10.4 million in commercial loans.
Management believes that the allowance for loan and lease losses as of December 31, 2024 is appropriate based on the facts and circumstances discussed
further below.
43

Table of Contents
The following tables set forth the Company's percent of allowance for loan and lease losses to the total allowance for loan and lease losses and the percent of
loans to total loans for each of the categories listed at the dates indicated.
At December 31,
2024
2023
2022
Amount
Percent of
Allowance
to Total
Allowance
Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance
Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance
Percent of
Loans
in Each
Category to
Total
Loans
(Dollars in Thousands)
Commercial real
estate
$
52,638 
42.0 %
41.1 %
$
53,633 
45.7 %
42.0 %
$
44,536 
45.3 %
39.9 %
Multi-family
mortgage
15,234 
12.2 %
14.2 %
16,626 
14.1 %
14.7 %
16,885 
17.1 %
15.1 %
Construction
6,299 
5.0 %
3.1 %
11,151 
9.5 %
3.1 %
6,733 
6.8 %
2.7 %
Total commercial
real estate loans
74,171 
59.2 %
58.4 %
81,410 
69.3 %
59.8 %
68,154 
69.2 %
57.7 %
Commercial
15,436 
12.3 %
11.9 %
15,527 
13.2 %
10.2 %
12,190 
12.4 %
9.9 %
Equipment financing
28,614 
22.9 %
13.2 %
13,869 
11.8 %
14.2 %
14,315 
14.5 %
15.9 %
Condominium
association
119 
0.1 %
0.5 %
161 
0.1 %
0.5 %
99 
0.1 %
0.6 %
Total commercial
loans and leases
44,169 
35.3 %
25.6 %
29,557 
25.1 %
24.9 %
26,604 
27.0 %
26.4 %
Residential mortgage
3,067 
2.5 %
11.4 %
3,669 
3.2 %
11.2 %
1,894 
1.9 %
11.0 %
Home equity
2,851 
2.3 %
3.9 %
2,255 
1.9 %
3.6 %
1,478 
1.5 %
4.2 %
Other consumer
825 
0.7 %
0.7 %
631 
0.5 %
0.5 %
352 
0.4 %
0.7 %
Total consumer
loans
6,743 
5.5 %
16.0 %
6,555 
5.6 %
15.3 %
3,724 
3.8 %
15.9 %
Total
$
125,083 
100.0 %
100.0 %
$
117,522 
100.0 %
100.0 %
$
98,482 
100.0 %
100.0 %
44

Table of Contents
At December 31,
2021
2020
Amount
Percent of
Allowance
to Total
Allowance
Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance
Percent of
Loans
in Each
Category to
Total
Loans
(Dollars in Thousands)
Commercial real estate
$
44,843 
45.3 %
39.6 %
$
46,357 
40.6 %
35.4 %
Multi-family mortgage
17,474 
17.6 %
15.4 %
22,559 
19.7 %
13.9 %
Construction
6,896 
7.0 %
2.2 %
11,216 
9.8 %
3.2 %
Total commercial real estate loans
69,213 
69.9 %
57.2 %
80,132 
70.1 %
52.5 %
Commercial
9,068 
9.2 %
10.3 %
8,089 
7.1 %
15.6 %
Equipment financing
17,907 
18.0 %
15.5 %
21,292 
18.6 %
15.0 %
Condominium association
80 
0.1 %
0.7 %
117 
0.1 %
0.7 %
Total commercial loans and leases
27,055 
27.3 %
26.5 %
29,498 
25.8 %
31.3 %
Residential mortgage
1,297 
1.3 %
11.2 %
1,967 
1.7 %
10.9 %
Home equity
1,335 
1.3 %
4.5 %
2,504 
2.2 %
4.8 %
Other consumer
184 
0.2 %
0.6 %
278 
0.2 %
0.5 %
Total consumer loans
2,816 
2.8 %
16.3 %
4,749 
4.1 %
16.2 %
Total
$
99,084 
100.0 %
100.0 %
$ 114,379 
100.0 %
100.0 %
Investment Securities and Restricted Equity Securities
The investment portfolio exists primarily for liquidity purposes, and secondarily as sources of interest and dividend income, interest-rate risk management and
tax planning as a counterbalance to loan and deposit flows. Investment securities are utilized as part of the Company's asset/liability management and may be sold in
response to, or in anticipation of, factors such as changes in market conditions and interest rates, deposit outflows, liquidity concentrations and regulatory capital
requirements.
The investment policy of the Company, which is reviewed and approved by the Board of Directors on an annual basis, specifies the types of investments that
are acceptable, required investment ratings by at least one nationally recognized rating agency, concentration limits and duration guidelines. Compliance with the
investment policy is monitored on a regular basis. In general, the Company seeks to maintain a high degree of liquidity and targets cash, cash equivalents and
investment securities available-for-sale balances between 8% and 12% of total assets.
Cash, cash equivalents, and investment securities increased $389.1 million, or 37.1%, to $1.4 billion as of December 31, 2024 compared to $1.0 billion as of
December 31, 2023. Cash, cash equivalents, and investment securities were 12.1% of total assets as of December 31, 2024, compared to 9.2% of total assets at
December 31, 2023.
45

Table of Contents
The following table sets forth certain information regarding the amortized cost and market value of the Company's investment securities at the dates indicated:
 
At December 31,
 
2024
2023
2022
 
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
Amortized
Cost
Fair Value
 
(In Thousands)
Investment securities available-for-sale:
 
 
 
 
 
 
GSE debentures
$
195,099 
$
176,294 
$
220,604 
$
201,127 
$
176,751 
$
152,422 
GSE CMOs
62,567 
55,543 
66,463 
61,617 
19,977 
18,220 
GSE MBSs
166,843 
148,285 
186,614 
169,997 
159,824 
140,576 
Municipal obligations
20,526 
20,254 
18,785 
18,922 
— 
— 
Corporate debt obligations
12,140 
12,287 
20,521 
19,716 
14,076 
13,764 
U.S. Treasury bonds
506,714 
481,872 
470,764 
444,737 
362,850 
331,307 
Foreign government obligations
500 
499 
500 
485 
500 
477 
Total investment securities available-for-sale $
964,389 
$
895,034 
$
984,251 
$
916,601 
$
733,978 
$
656,766 
Restricted equity securities:
 
 
 
 
 
 
FHLB stock
$
61,108 
 
$
55,548 
 
$
52,914 
 
FRB stock
21,881 
 
21,881 
 
18,241 
 
Other
166 
 
166 
 
152 
 
Total restricted equity securities
$
83,155 
 
$
77,595 
 
$
71,307 
 
Total investment securities and restricted equity securities primarily consist of investment securities available-for-sale, stock in the FHLB and stock in the
FRB. The total securities portfolio decreased $16.0 million, or 1.6% since December 31, 2023. As of December 31, 2024, the total securities portfolio was 8.22% of
total assets, compared to 8.73% of total assets as of December 31, 2023.
The fair value of investment securities is based principally on market prices and dealer quotes received from third-party, nationally-recognized pricing services
for identical investment securities such as U.S. Treasury and agency securities. The Company's equity securities held-for-trading, if any, are priced this way and are
included in Level 1. These prices are validated by comparing the primary pricing source with an alternative pricing source when available. When quoted market
prices for identical securities are unavailable, the Company uses market prices provided by independent pricing services based on recent trading activity and other
observable information, including but not limited to market interest-rate curves, referenced credit spreads and estimated prepayment speeds where applicable. These
investments include certain U.S. and government agency debt securities, municipal and corporate debt securities, GSEs, MBSs and CMOs, trust preferred securities,
and equity securities held-for-trading, all of which are included in Level 1, 2 and 3.
Additionally, management reviews changes in fair value from period to period and performs testing to ensure that prices received from the third parties are
consistent with their expectation of the market. Changes in the prices obtained from the pricing service are analyzed from month to month, taking into consideration
changes in market conditions including changes in mortgage spreads, changes in U.S. Treasury security yields and changes in generic pricing of 15-year and 30-year
securities. Additional analysis may include a review of prices provided by other independent parties, a yield analysis, a review of average life changes using
Bloomberg analytics and a review of historical pricing for the particular security.
As of December 31, 2024, the fair value of all investment securities available-for-sale was $895.0 million and carried a total of $69.4 million of net unrealized
losses, compared to a fair value of $916.6 million and net unrealized losses of $67.7 million as of December 31, 2023. As of December 31, 2024, $705.3 million, or
78.8%, of the portfolio, had gross unrealized losses of $70.2 million. This compares to $717.2 million, or 77.8%, of the portfolio with gross unrealized losses of
$69.0 million as of December 31, 2023. The Company's increased unrealized loss position in 2024 was primarily driven by higher interest rates year over year. In
2024, U.S. Treasury yields rose across the the 3-to-10 year part of the curve which negatively impacted the value of the Company's longer duration primarily in the
GSE CMOs and GSE MBS security portfolios. For additional discussion on investment securities available-for-sale by security type, see Note 4, "Investment
Securities."
46

Table of Contents
The Company reviews its debt securities portfolio on a quarterly basis in accordance with ASC 326. This analysis is done using probability of default and loss
given default assumptions where a model is created to determine CECL for the remaining life of the securities. For the year ended December 31, 2024, the
Company recognized $0.1 million as an allowance for credit loss. For additional discussion on how the Company validates fair values provided by the third-party
pricing service, see Note 21, “Fair Value of Financial Instruments.”
Maturities, calls and principal repayments for investment securities available-for-sale totaled $174.0 million for the year ended December 31, 2024 compared
to $272.4 million for the same period in 2023. For the year ended December 31, 2024, the Company did not sell any investment securities available-for-sale,
compared to $230.0 million for the same period in 2023. For the year ended December 31, 2024, the Company purchased $148.5 million of investment securities
available-for-sale, compared to $362.9 million for the same period in 2023.
Restricted Equity Securities
FHLB Stock—The Company invests in the stock of the FHLB of Boston and FHLB of New York as a requirement to borrow funds from the FHLB. As of
December 31, 2024 and 2023, the Company did not have excess balance of capital stock.
As of December 31, 2024, the Company owned stock in the FHLB of Boston and New York with a carrying value of $61.1 million, an increase of $5.6 million
from $55.5 million as of December 31, 2023. The Company continually reviews its investment to determine if impairment exists. The Company reviews recent
public filings, rating agency analysis and other factors when making its determination. See Note 5, "Restricted Equity Securities" to the consolidated financial
statements for further information about the FHLB.
Federal Reserve Bank Stock—The Company invests in the stock of the Federal Reserve Bank of Boston and New York, as a condition of the membership for
the Banks in the Federal Reserve System. The Federal Reserve Bank is the primary federal regulator for the Company and the Banks.
Carrying Value, Weighted Average Yields, and Contractual Maturities of Investment and Restricted Equity Securities
The table below sets forth certain information regarding the carrying value, weighted average yields and contractual maturities of the Company's investment and
restricted equity securities portfolio at the date indicated.
 
Balance at December 31, 2024
 
One Year or Less
After One Year
Through Five Years
After Five Years
Through Ten Years
After Ten Years
Total
 
Carrying
Value
Weighted
Average
Yield (1)
Carrying
Value
Weighted
Average
Yield (1)
Carrying
Value
Weighted
Average
Yield (1)
Carrying
Value
Weighted
Average
Yield (1)
Carrying
Value
Weighted
Average
Yield (1)
 
(Dollars in Thousands)
Investment securities available-
for-sale:
 
 
 
 
 
 
 
 
GSE debentures
$
5,946 
2.65 %
$
91,806 
3.71 %
$
70,394 
1.24 %
$
8,148 
2.39 %
$
176,294 
2.63 %
GSE CMOs
— 
— %
468 
2.68 %
7,377 
3.55 %
47,698 
3.79 %
55,543 
3.75 %
GSE MBSs
47 
— %
6,654 
2.35 %
23,425 
2.58 %
118,158 
2.92 %
148,285 
2.84 %
Municipal obligations
7,659 
4.09 %
4,912 
3.04 %
4,089 
3.58 %
3,595 
3.21 %
20,254 
3.71 %
Corporate debt obligations
— 
— %
— 
— %
12,287 
4.62 %
— 
— %
12,287 
4.62 %
U.S. Treasury bonds
88,306 
3.19 %
330,768 
3.23 %
62,798 
1.16 %
— 
— %
481,872 
2.95 %
Foreign government
obligations
499 
1.97 %
— 
— %
— 
— %
— 
— %
499 
1.97 %
Total investment securities
available-for-sale
$
102,457 
3.22 %
$
434,608 
3.32 %
$
180,370 
1.77 %
$
177,599 
3.13 %
$
895,034 
2.96 %
Restricted equity
securities (2):
 
 
 
 
 
 
 
 
 
FHLB stock
$
— 
— %
$
— 
— %
$
— 
— %
$
61,108 
8.45 %
$
61,108 
8.45 %
FRB stock
— 
— %
— 
— %
— 
— %
21,881 
6.00 %
21,881 
6.00 %
Other stock
— 
— %
— 
— %
— 
— %
166 
— %
166 
— %
Total restricted equity
securities
$
— 
— %
$
— 
— %
$
— 
— %
$
83,155 
7.79 %
$
83,155 
7.79 %
_______________________________________________________________________________
(1) Yields have been calculated on a pre-tax basis. The Company holds no investment securities available-for-sale that are tax-exempt.
(2) Equity securities have no contractual maturity, therefore they are reported above in the over ten year maturity column.
47

Table of Contents
Deposits
The following table presents the Company's deposit mix at the dates indicated.
 
At December 31,
 
2024
2023
2022
 
Amount
Percent
of Total
Weighted
Average
Rate
Amount
Percent
of Total
Weighted
Average
Rate
Amount
Percent
of Total
Weighted
Average
Rate
 
(Dollars in Thousands)
Non-interest-bearing
deposits:
Demand checking
accounts
$
1,692,394 
19.0 %
— %
$
1,678,406 
19.6 %
— %
$
1,802,518 
27.6 %
— %
Interest-bearing deposits:
 
 
 
 
 
NOW accounts
617,246 
6.9 %
0.57 %
661,863 
7.8 %
0.60 %
544,118 
8.3 %
0.18 %
Savings accounts
1,721,247 
19.3 %
4.40 %
1,669,018 
19.5 %
2.63 %
762,271 
11.7 %
0.70 %
Money market accounts
2,116,360 
23.8 %
2.58 %
2,082,810 
24.4 %
3.07 %
2,174,952 
33.4 %
1.63 %
Certificate of deposit
accounts
1,885,444 
21.2 %
4.30 %
1,574,855 
18.4 %
3.88 %
928,143 
14.2 %
1.68 %
Brokered deposit
accounts
868,953 
9.8 %
4.42 %
881,173 
10.3 %
4.36 %
310,144 
4.8 %
3.00 %
Total interest-bearing
deposits
7,209,250 
81.0 %
3.51 %
6,869,719 
80.4 %
3.08 %
4,719,628 
72.4 %
1.41 %
Total deposits
$
8,901,644 
100.0 %
2.85 %
$
8,548,125 
100.0 %
2.48 %
$
6,522,146 
100.0 %
1.02 %
The Company seeks to increase its core deposits and decrease its loan-to-deposit ratio over time, while continuing to increase deposits as a percentage of total
funding sources. The Company's loan-to-deposit ratio was 109.9% as of December 31, 2024, compared to 112.8% as of December 31, 2023.
Total deposits increased $353.5 million, or 4.1%, to $8.9 billion as of December 31, 2024, compared to $8.5 billion as of December 31, 2023. Deposits as a
percentage of total assets decreased from 75.1% as of December 31, 2023 to 74.8% as of December 31, 2024. The decrease in deposits as a percentage of total
assets is due to an increase in total assets driven by increases in cash and cash equivalents and net loans and leases year over year.
In 2024, core deposits increased $55.2 million. The ratio of core deposits to total deposits decreased from 71.3% as of December 31, 2023 to 69.1% as of
December 31, 2024, as a result of increases in certificate of deposit accounts.
Certificate of deposit accounts increased $310.6 million to $1.9 billion as of December 31, 2024, compared to $1.6 billion as of December 31, 2023.
Certificate of deposit accounts increased as a percentage of total deposits to 21.2% as of December 31, 2024 from 18.4% as of December 31, 2023.
Brokered deposits decreased $12.2 million to $869.0 million as of December 31, 2024, compared to $881.2 million as of December 31, 2023. Brokered
deposits decreased as a percentage of total deposits to 9.8% as of December 31, 2024 from 10.3% as of December 31, 2023. The decrease in brokered deposits was
primarily driven by an increase in internal customer deposits allowing for less reliance on brokered deposits. Brokered deposits allow the Company to seek
additional funding by attracting deposits from outside the Company's core market. The Company's investment policy limits the amount of brokered deposits to 15%
of total assets.
The following table sets forth the distribution of the average balances of the Company's deposit accounts for the years indicated and the weighted average
interest rates on each category of deposits presented. Averages for the years presented are based on daily balances.
48

Table of Contents
Year Ended December 31,
2024
2023
2022
Average
Balance
Percent
of Total
Average
Deposits
Weighted
Average
Rate
Average
Balance
Percent
of Total
Average
Deposits
Weighted
Average
Rate
Average
Balance
Percent
of Total
Average
Deposits
Weighted
Average
Rate
(Dollars in Thousands)
Core deposits:
Non-interest-bearing
demand checking
accounts
$
1,657,922 
19.1 %
— %
$
1,823,759 
21.7 %
— %
$
1,879,620 
27.3 %
— %
NOW accounts
650,225 
7.5 %
0.70 %
720,572 
8.5 %
0.59 %
598,267 
8.7 %
0.14 %
Savings accounts
1,726,504 
19.8 %
2.68 %
1,439,293 
17.1 %
1.94 %
882,881 
12.8 %
0.25 %
Money market accounts
2,056,066 
23.6 %
2.96 %
2,205,430 
26.1 %
2.64 %
2,387,670 
34.6 %
0.64 %
Total core deposits
6,090,717 
70.0 %
1.83 %
6,189,054 
73.4 %
1.46 %
5,748,438 
83.4 %
0.32 %
Certificate of deposit
accounts
1,737,697 
20.0 %
4.38 %
1,428,727 
16.9 %
3.09 %
998,580 
14.5 %
0.82 %
Brokered deposit
accounts
873,182 
10.0 %
5.18 %
819,419 
9.7 %
5.02 %
146,038 
2.1 %
1.99 %
Total deposits
$
8,701,596 
100.0 %
2.68 %
$
8,437,200 
100.0 %
2.08 %
$
6,893,056 
100.0 %
0.43 %
As of December 31, 2024 and 2023, the Company had outstanding certificate of deposit of $250,000 or more, maturing as follows:
At December 31,
2024
2023
Amount
Weighted
Average Rate
Amount
Weighted
Average Rate
(Dollars in Thousands)
Maturity period:
Six months or less
$
443,944 
4.63 %
$
291,049 
4.02 %
Over six months through 12 months
143,238 
4.22 %
163,277 
4.59 %
Over 12 months
26,044 
3.86 %
29,637 
3.91 %
Total certificate of deposit of $250,000 or more
$
613,226 
4.50 %
$
483,963 
4.21 %
The following table presents the Company's insured and uninsured deposit mix at the date indicated.
At December 31, 2024
(Dollars in Millions)
Commercial
Consumer
Municipal
Brokered
Total
%
Insured or Collateralized
$
2,224 
$
3,117 
$
163 
$
869 
$
6,373 
72 %
Uninsured
1,377 
1,054 
98 
— 
2,529 
28 %
Total
$
3,601 
$
4,171 
$
261 
$
869 
$
8,902 
100 %
Composition
40 %
47 %
3 %
10 %
100 %
As of December 31, 2024, the Company had uninsured municipal deposits requiring collateral of $79.1 million, included in Insured or Collateralized in the
table above, which are covered by specific collateral and FHLB letters of credit. The remaining deposits, included in Insured or Collateralized in the table above, are
insured with the FDIC.
49

Table of Contents
Borrowed Funds
The following table sets forth certain information regarding FHLB advances, subordinated debentures and notes and other borrowed funds for the periods
indicated:
Year Ended December 31,
2024
2023
2022
(Dollars in Thousands)
Borrowed funds:
Average balance outstanding
$
1,287,549 
$
1,301,905 
$
542,923 
Maximum amount outstanding at any month end during the year
1,519,846 
1,630,102 
1,432,652 
Balance outstanding at end of year
1,519,846 
1,376,670 
1,432,652 
Weighted average interest rate for the period
5.04 %
4.69 %
2.87 %
Weighted average interest rate at end of period
4.88 %
5.01 %
4.41 %
Advances from the FHLB of Boston and FHLB of New York
On a long-term basis, the Company intends to continue to grow its core deposits. The Company also uses FHLB borrowings and other wholesale borrowings
as part of the Company's overall strategy to fund loan growth and manage interest-rate risk and liquidity. The advances are secured by a blanket security agreement
which requires the Banks to maintain certain qualifying assets as collateral, principally mortgage loans and securities in an aggregate amount at least equal to
outstanding advances. The maximum amount that the FHLBs will advance to member institutions, including the Company, fluctuates from time to time in
accordance with the policies of the FHLBs. The Company may also borrow from the FRB's "discount window" as necessary.
FHLB borrowings increased $132.7 million to $1.4 billion as of December 31, 2024 from $1.2 billion as of December 31, 2023. The increase in FHLB
borrowings was primarily due to higher liquidity needs. The Company's remaining borrowing capacity from the FHLB of Boston and FHLB of New York for
advances and repurchase agreements was $1.3 billion as of December 31, 2024.
Other Borrowed Funds
In addition to advances from the FHLB and subordinated debentures and notes, the Company utilizes other funding
sources as part of the overall liquidity strategy. Those funding sources include repurchase agreements and committed and uncommitted lines of credit with several
financial institutions.
As of December 31, 2024, the Banks also have access to funding through certain uncommitted lines via AFX as well as committed and uncommitted lines
from other large financial institutions. As of December 31, 2024, the Company had no borrowings outstanding with these committed and uncommitted lines.
The Company has access to the Federal Reserve Discount Window to supplement its liquidity. The Company has $359.5 million of borrowing capacity at the
FRB as of December 31, 2024. As of December 31, 2024, the Company did not have any borrowings with the FRB outstanding.
As of December 31, 2024, the Company had $79.6 million in interest-bearing cash on hold from dealer counterparties. This compares to $60.0 million
outstanding as of December 31, 2023. This cash collateralizes the fair value of the dealer side of derivative transactions. The Company did not have any repurchase
agreements with customers as of December 31, 2024. As of December 31, 2023, the Company had repurchase agreements with customers of $9.3 million.
Subordinated Debentures and Notes
In connection with the acquisition of Bancorp Rhode Island, Inc., the Company assumed three subordinated debentures issued by a subsidiary of Bancorp
Rhode Island, Inc.
On September 15, 2014, the Company offered $75.0 million of 6.0% fixed-to-floating subordinated notes due September
15, 2029. The Company was obligated to pay 6.0% interest semiannually between September 2014 and September 2024. Currently, the Company is obligated to pay
3-month CME term SOFR plus spread adjustment of 0.26% plus 3.32% quarterly until the notes mature in September 2029. As of December 31, 2024, the Company
had capitalized costs of $0.5 million in relation to the issuance of these subordinated notes.
50

Table of Contents
The following table summarizes the Company's subordinated debentures and notes at the dates indicated.
Carrying Amount
Issue Date
Rate
Maturity Date
Next Call Date
December 31, 2024
December 31, 2023
 
(Dollars in Thousands)
June 26, 2003
Variable;
3-month CME term SOFR + spread
adjustment of 0.26% + 3.10%
June 26, 2033
March 25, 2025
$
4,920 
$
4,904 
March 17, 2004
Variable;
3-month CME term SOFR + spread
adjustment of 0.26%  + 2.79%
March 17, 2034
March 16, 2025
4,880 
4,857 
September 15, 2014
Variable;
3-month CME term SOFR + spread
adjustment of 0.26% + 3.32%
September 15, 2029
March 17, 2025
74,528 
74,427 
Total
$
84,328 
$
84,188 
Derivative Financial Instruments
The Company has entered into loan level derivatives, risk participation agreements, and foreign exchange contracts with certain commercial customers and
concurrently enters into offsetting swaps with third-party financial institutions. The Company may also, from time to time, enter into risk participation agreements.
The Company uses interest rate futures that are designated and qualify as cash flow hedging instruments.
The following table summarizes certain information concerning the Company's loan level derivatives, risk participation agreements, and foreign exchange
contracts at December 31, 2024 and 2023:
At December 31, 2024
At December 31, 2023
(Dollars in Thousands)
Interest rate derivatives (Notional amounts):
$
225,000 
$
225,000 
Loan level derivatives (Notional Amount):
Receive fixed, pay variable
$
1,672,948 
$
1,733,198 
Pay fixed, receive variable
1,672,948 
1,733,198 
Risk participation-out agreements
539,731 
542,387 
Risk participation-in agreements
102,198 
100,313 
Foreign exchange contracts (Notional Amount)
Buys foreign currency, sells U.S. currency
$
5,849 
$
3,262 
Sells foreign currency, buys U.S. currency
5,408 
3,895 
Fixed weighted average interest rate of the swap portfolio
3.03 %
2.96 %
Floating weighted average interest rate of the swap portfolio
4.81 %
5.70 %
Weighted average remaining term to maturity (in months)
68 
75 
Fair value:
 
Recognized as an asset:
Interest rate derivatives
$
18 
$
234 
Loan level derivatives
102,608 
99,876 
Risk participation-out agreements
495 
1,238 
Foreign exchange contracts
482 
139 
Recognized as a liability:
Interest rate derivatives
$
2,051 
$
2,842 
Loan level derivatives
102,608 
99,876 
Risk participation-in agreements
137 
310 
Foreign exchange contracts
459 
132 
51

Table of Contents
Stockholders' Equity and Dividends
The Company's total stockholders' equity was $1,221.9 million as of December 31, 2024, representing a $23.3 million increase compared to $1,198.6 million
at December 31, 2023. The increase for the twelve months ended December 31, 2024, primarily reflects net income of $68.7 million and compensation under
recognition and retention plans of $3.4 million partially offset by dividends paid by the Company of $48.1 million and unrealized gain on securities available-for-
sale of $1.2 million.
For the year ended December 31, 2024, the dividend payout ratio was 69.9%, compared to 63.9% for the year ended December 31, 2023. The dividends paid
in the fourth quarter of 2024 represented the Company's 103th consecutive quarter of dividend payments. The Company's quarterly dividend distribution was $0.135
per share for each quarter of 2024.
Stockholders' equity represented 10.26% of total assets as of December 31, 2024 and 10.53% of total assets as of December 31, 2023. Tangible stockholders'
equity (total stockholders' equity less goodwill and identified intangible assets, net) represented 8.27% of tangible assets (total assets less goodwill and identified
intangible assets, net) as of December 31, 2024 and 8.39% as of December 31, 2023.
Results of Operations
The primary drivers of the Company's net income are net interest income, which is strongly affected by the net yield on and growth of interest-earning assets
and liabilities ("net interest margin"), the quality of the Company's assets, its levels of non-interest income and non-interest expense, and its tax provision.
The Company's net interest income represents the difference between interest income earned on its investments, loans and leases, and its cost of funds.
Interest income is dependent on the amount of interest-earning assets outstanding during the period and the yield earned thereon. Cost of funds is a function of the
average amount of deposits and borrowed money outstanding during the year and the interest rates paid thereon. Net interest margin is calculated by dividing net
interest income by average interest-earning assets. Net interest spread is the difference between the average rate earned on interest-earning assets and the average
rate paid on interest-bearing liabilities. The increases or decreases, as applicable, in the components of interest income and interest expense, expressed in terms of
fluctuation in average volume and rate, are summarized under "Rate/Volume Analysis" below. Information as to the components of interest income, interest expense
and average rates is provided under "Average Balances, Net Interest Income, Interest-Rate Spread and Net Interest Margin" below.
Because the Company's assets and liabilities are not identical in duration and in repricing dates, the differential between the two is vulnerable to changes in
market interest rates as well as the overall shape of the yield curve. These vulnerabilities are inherent to the business of banking and are commonly referred to as
"interest-rate risk." How interest-rate risk is measured and, once measured, how much interest-rate risk is taken are based on numerous assumptions and other
subjective judgments. See the discussion in the "Measuring Interest-Rate Risk" section of Item 7A, "Quantitative and Qualitative Disclosures about Market Risk"
below.
The quality of the Company's assets also influences its earnings. Loans and leases that are not paid on a timely basis and exhibit other weaknesses can result
in the loss of principal and/or interest income. Additionally, the Company must make timely provisions to the allowance for loan and lease losses based on estimates
of probable losses inherent in the loan and lease portfolio. These additions, which are charged against earnings, are necessarily greater when greater probable losses
are expected. Further, the Company incurs expenses as a result of resolving troubled assets. These variables reflect the "credit risk" that the Company takes on in the
ordinary course of business and are further discussed under "Financial Condition—Asset Quality" above.
Average Balances, Net Interest Income, Interest-Rate Spread and Net Interest Margin
The following table sets forth information about the Company's average balances, interest income and interest rates earned on average interest-earning assets,
interest expense and interest rates paid on average interest-bearing liabilities, interest-rate spread and net interest margin for the years ended December 31, 2024,
2023 and 2022. Average balances are derived from daily average balances and yields include fees, costs and purchase-accounting-related premiums and discounts
which are considered adjustments to coupon yields in accordance with GAAP.
52

Table of Contents
Year Ended December 31,
2024
2023
2022
Average
Balance
Interest (1)
Average
Yield/
Cost
Average
Balance
Interest (1)
Average
Yield/
Cost
Average
Balance
Interest (1)
Average
Yield/
Cost
(Dollars in Thousands)
Assets:
Interest-earning assets:
Debt securities
$
862,381 
$
26,416 
3.06 %
$
947,782 
$
29,891 
3.15 %
$
706,580 
$
13,079 
1.85 %
Restricted equity securities
74,788 
5,786 
7.74 %
72,264 
5,572 
7.71 %
36,813 
1,898 
5.15 %
Short-term investments
164,445 
8,554 
5.20 %
158,718 
8,329 
5.25 %
104,288 
1,440 
1.38 %
Total investments
1,101,614 
40,756 
3.70 %
1,178,764 
43,792 
3.72 %
847,681 
16,417 
1.94 %
Commercial real estate loans 
5,760,432 
327,221 
5.59 %
5,654,385 
307,652 
5.37 %
4,238,960 
172,811 
4.02 %
Commercial loans 
1,086,460 
73,369 
6.65 %
929,077 
59,110 
6.28 %
744,972 
34,105 
4.52 %
Equipment financing 
1,352,993 
106,329 
7.86 %
1,277,224 
92,112 
7.21 %
1,148,673 
75,767 
6.60 %
Consumer loans 
1,501,626 
82,273 
5.47 %
1,470,677 
75,098 
5.10 %
1,199,804 
46,295 
3.86 %
Total loans and leases
9,701,511 
589,192 
6.07 %
9,331,363 
533,972 
5.72 %
7,332,409 
328,978 
4.49 %
Total interest-earning assets
10,803,125 
629,948 
5.83 %
10,510,127 
577,764 
5.50 %
8,180,090 
345,395 
4.22 %
Allowance for loan and lease losses
(121,628)
(120,613)
(95,542)
Non-interest-earning assets
791,927 
824,857 
538,855 
Total assets
$
11,473,424 
$
11,214,371 
$
8,623,403 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts
$
650,225 
4,543 
0.70 %
$
720,572 
4,275 
0.59 %
$
598,267 
853 
0.14 %
Savings accounts
1,726,504 
46,220 
2.68 %
1,439,293 
27,974 
1.94 %
882,881 
2,228 
0.25 %
Money market accounts
2,056,066 
60,796 
2.96 %
2,205,430 
58,153 
2.64 %
2,387,670 
15,392 
0.64 %
Certificate of deposit accounts
1,737,697 
76,134 
4.38 %
1,428,727 
44,122 
3.09 %
998,580 
8,210 
0.82 %
Brokered deposit accounts
873,182 
45,270 
5.18 %
819,419 
41,141 
5.02 %
146,038 
2,909 
1.99 %
Total interest-bearing deposits 
7,043,674 
232,963 
3.31 %
6,613,441 
175,665 
2.66 %
5,013,436 
29,592 
0.59 %
Advances from the FHLB
1,124,432 
55,851 
4.89 %
1,092,996 
52,467 
4.73 %
340,569 
9,355 
2.71 %
Subordinated debentures and notes
84,258 
6,074 
7.21 %
84,116 
5,476 
6.51 %
83,971 
5,133 
6.11 %
Other borrowed funds
78,859 
4,048 
5.13 %
124,793 
3,968 
3.18 %
118,383 
1,335 
1.13 %
Total borrowed funds
1,287,549 
65,973 
5.04 %
1,301,905 
61,911 
4.69 %
542,923 
15,823 
2.87 %
Total interest-bearing liabilities
8,331,223 
298,936 
3.59 %
7,915,346 
237,576 
3.00 %
5,556,359 
45,415 
0.82 %
Non-interest-bearing liabilities:
 
 
 
 
 
 
 
 
 
Non-interest-bearing demand checking accounts
1,657,922 
 
 
1,823,759 
 
 
1,879,620 
 
 
Other non-interest-bearing liabilities
273,243 
 
 
307,160 
 
 
203,187 
 
 
Total liabilities
10,262,388 
 
 
10,046,265 
 
 
7,639,166 
 
 
Stockholders' equity
1,211,036 
 
 
1,168,106 
 
 
984,237 
 
 
Total liabilities and equity
$
11,473,424 
 
 
$
11,214,371 
 
 
$
8,623,403 
 
 
Net interest income (tax-equivalent basis) /
Interest-rate spread 
 
331,012 
2.24 %
 
340,188 
2.50 %
 
299,980 
3.40 %
Less adjustment of tax-exempt income
 
1,427 
 
 
477 
 
 
209 
 
Net interest income
 
$
329,585 
 
 
$
339,711 
 
 
$
299,771 
 
Net interest margin 
 
 
3.06 %
 
 
3.24 %
 
 
3.67 %
_________________________________________________________________________
(1) Tax-exempt income on debt securities, equity securities and industrial revenue bonds are included in commercial real estate loans on a tax-equivalent basis.
(2) Loans on nonaccrual status are included in the average balances.
(3) Including non-interest-bearing checking accounts, the average interest rate on total deposits was 2.68%, 2.08% and 0.43% in the years ended December 31, 2024, 2023 and 2022, respectively.
(4) Interest-rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax equivalent basis) divided by average interest-earning assets.
See "Comparison of Years Ended December 31, 2024 and December 31, 2023" and "Comparison of Years Ended December 31, 2023 and December 31, 2022" below for a discussion of average assets and liabilities, net interest income,
interest-rate spread and net interest margin.
(2)
(2)
(2)
(2)
(3)
(3)
(4)
(5)
53

Table of Contents
Rate/Volume Analysis
The following table presents, on a tax-equivalent basis, the extent to which changes in interest rates and changes in volume of interest-earning assets and
interest-bearing liabilities have affected the Company's interest income and interest expense during the periods indicated. Information is provided in each category
with respect to: (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in
rate multiplied by prior volume), and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to
the changes due to volume and the changes due to rate.
Year Ended 
 
December 31, 2024 
 
Compared to Year Ended 
 
December 31, 2023
Year Ended 
 
December 31, 2023 
 
Compared to Year Ended 
 
December 31, 2022
Increase
(Decrease) Due To
Increase
(Decrease) Due To
Volume
Rate
Net Change
Volume
Rate
Net Change
(In Thousands)
Interest and dividend income:
Investments:
Debt securities
$
(2,638)
$
(837)
$
(3,475)
$
5,497 
$
11,315 
$
16,812 
Restricted equity securities
193 
21 
214 
2,423 
1,251 
3,674 
Short-term investments
304 
(79)
225 
1,081 
5,808 
6,889 
Total investments
(2,141)
(895)
(3,036)
9,001 
18,374 
27,375 
Loans and leases:
Commercial real estate loans
6,145 
13,424 
19,569 
67,228 
67,613 
134,841 
Commercial loans and leases
10,579 
3,680 
14,259 
9,708 
15,297 
25,005 
Equipment financing
5,642 
8,575 
14,217 
8,952 
7,393 
16,345 
Consumer loans
1,645 
5,530 
7,175 
11,098 
17,705 
28,803 
Total loans
24,011 
31,209 
55,220 
96,986 
108,008 
204,994 
Total change in interest and dividend income
21,870 
30,314 
52,184 
105,987 
126,382 
232,369 
Interest expense:
Deposits:
NOW accounts
(453)
721 
268 
205 
3,217 
3,422 
Savings accounts
6,267 
11,979 
18,246 
2,196 
23,550 
25,746 
Money market accounts
(4,112)
6,755 
2,643 
(1,258)
44,019 
42,761 
Certificate of deposit accounts
10,924 
21,088 
32,012 
4,836 
31,076 
35,912 
Brokered deposit accounts
2,779 
1,350 
4,129 
28,741 
9,491 
38,232 
Total deposits
15,405 
41,893 
57,298 
34,720 
111,353 
146,073 
Borrowed funds:
Advances from the FHLB
1,555 
1,829 
3,384 
32,236 
10,876 
43,112 
Subordinated debentures and notes
9 
589 
598 
9 
334 
343 
Other borrowed funds
(1,796)
1,876 
80 
76 
2,557 
2,633 
Total borrowed funds
(232)
4,294 
4,062 
32,321 
13,767 
46,088 
Total change in interest expense
15,173 
46,187 
61,360 
67,041 
125,120 
192,161 
Change in tax-exempt income
950 
— 
950 
268 
— 
268 
Change in net interest income
$
5,747 
$
(15,873)
$
(10,126)
$
38,678 
$
1,262 
$
39,940 
See "Comparison of Years Ended December 31, 2024 and December 31, 2023" and "Comparison of Years Ended December 31, 2023 and December 31, 2022" below for a discussion of changes in
interest income, interest-rate spread and net interest margin resulting from changes in rates and volumes.
54

Table of Contents
Comparison of Years Ended December 31, 2024 and December 31, 2023
Net Interest Income
Net interest income decreased $10.1 million to $329.6 million for the year ended December 31, 2024 from $339.7 million for the year ended December 31,
2023. The decrease year over year reflects a $61.4 million increase in interest expense on deposits and borrowings, along with a $3.0 million decrease in interest
income on debt securities, short term investments and restricted equity securities, partially offset by a $54.2 million increase in interest income on loans and leases
which is reflective of the increase in volume and interest rate environment.
Net interest margin decreased 18 basis points to 3.06% in 2024 from 3.24% in 2023. The Company's weighted average interest rate on loans increased to
6.07% for the year ended December 31, 2024 from 5.72% for the year ended December 31, 2023.
The yield on interest-earning assets increased to 5.83% for the year ended December 31, 2024 from 5.50% for the year ended December 31, 2023. The
increase is the result of higher yields on loans and leases and investments. The Company recorded $3.4 million in prepayment penalties and late charges, which
contributed 3 basis points to yields on interest-earning assets for the year ended December 31, 2024 compared to $2.9 million, or 3 basis points, for the year ended
December 31, 2023.
The cost of interest-bearing liabilities increased 59 basis points to 3.59% for the year ended December 31, 2024 from 3.00% for the year ended December 31,
2023. Refer to "Financial Condition - Borrowed Funds" above for more details.
Management aims to position the balance sheet to be neutral to changes in interest rates. As a result of the Federal
Reserve's rate cut which began in September and continued into the fourth quarter, the Treasury yield curve has become less inverted in recent months, with shorter-
term interest rates decreasing.
This trend positively impacts the Company's net interest income, net interest spread, and net interest margin. Management anticipates that net interest margin
will increase as deposit and wholesale funding costs decrease more rapidly than loan yields. If the Federal Reserve cuts rates in the near term, net interest income
and net interest margin will be highly dependent on the Company's ability and timing to reduce deposit pricing as well as the overall mix of funding.
Interest Income—Loans and Leases
Year Ended
December 31,
Dollar
Change
Percent
Change
2024
2023
(Dollars in Thousands)
Interest income—loans and leases:
Commercial real estate loans
$
326,877 
$
307,652 
$
19,225 
6.2 %
Commercial loans
72,450 
58,878 
13,572 
23.1 %
Equipment financing
106,329 
92,112 
14,217 
15.4 %
Residential mortgage loans
51,171 
46,350 
4,821 
10.4 %
Other consumer loans
31,102 
28,747 
2,355 
8.2 %
Total interest income—loans and leases
$
587,929 
$
533,739 
$
54,190 
10.2 %
Interest income from loans and leases was $587.9 million for 2024, and represented a yield on total loans of 6.07%. This compares to $533.7 million of
interest on loans and leases and a yield of 5.72% for 2023. The $54.2 million increase in interest income from loans and leases was primarily due to an increase of
$31.2 million related to interest rates changes, and an increase of $23.0 million in origination volume.
55

Table of Contents
Interest Income—Investments
Year Ended
December 31,
Dollar
Change
Percent
Change
2024
2023
(Dollars in Thousands)
Interest income—investments:
Debt securities
$
26,252 
$
29,648 
$
(3,396)
(11.5)%
Marketable and restricted equity securities
5,786 
5,571 
215 
3.9 %
Short-term investments
8,554 
8,329 
225 
2.7 %
Total interest income—investments
$
40,592 
$
43,548 
$
(2,956)
(6.8)%
Total investment income was $40.6 million for the year ended December 31, 2024 compared to $43.5 million for the year ended December 31, 2023. As of
December 31, 2024, the yield on total investments was 3.70% compared to 3.72% as of December 31, 2023. This year over year decrease in total investment income
of $3.0 million, or 6.8%, was driven by a $2.1 million decrease due to volume and a $0.9 million decrease due to rates.
Interest Expense—Deposits and Borrowed Funds
Year Ended
December 31,
Dollar
Change
Percent
Change
2024
2023
(Dollars in Thousands)
Interest expense:
Deposits:
NOW accounts
$
4,543 
$
4,275 
$
268 
6.3 %
Savings accounts
46,220 
27,974 
18,246 
65.2 %
Money market accounts
60,796 
58,153 
2,643 
4.5 %
Certificate of deposit accounts
76,134 
44,122 
32,012 
72.6 %
Brokered deposit accounts
45,270 
41,141 
4,129 
10.0 %
Total interest expense—deposits
232,963 
175,665 
57,298 
32.6 %
Borrowed funds:
Advances from the FHLB
55,851 
52,467 
3,384 
6.4 %
Subordinated debentures and notes
6,074 
5,476 
598 
10.9 %
Other borrowed funds
4,048 
3,968 
80 
2.0 %
Total interest expense—borrowed funds
65,973 
61,911 
4,062 
6.6 %
Total interest expense
$
298,936 
$
237,576 
$
61,360 
25.8 %
Deposits
In 2024, interest paid on deposits increased $57.3 million, or 32.6%, compared to 2023. The increase in interest expense on deposits was driven by an increase
of $41.9 million due to higher interest rates and an increase of $15.4 million primarily driven by the growth in volume of certificate of deposit balances and savings
accounts. For the year ended December 31, 2024, purchase accounting amortization was $1.0 million on acquired deposits and one basis point, compared to $1.3
million and one basis point for the year ended December 31, 2023.
Borrowed Funds
As of December 31, 2024, the Company's borrowed funds include $1.4 billion in FHLB borrowings, $84.3 million in subordinated debentures and notes, and
$79.6 million in other borrowed funds. In 2024, the average balance of FHLB borrowings increased $31.4 million, or 2.9%, the average balance of other borrowed
funds, which includes repurchase agreements and other borrowings, decreased $45.9 million, or 36.8%, and the average balance of subordinated debentures and
notes increased $142.0 thousand, or 0.2%, for the year ended December 31, 2024.
For the year ended December 31, 2024, interest paid on borrowed funds increased $4.1 million, or 6.6%, year over year. The cost of borrowed funds increased
to 5.04% for the year ended December 31, 2024 from 4.69% for the year ended December 31, 2023. The increase in interest expense was driven by an increase of
$4.3 million due to borrowing rates partially
56

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offset by a decrease of $0.2 million due to volume. For the year ended December 31, 2024, purchase accounting amortization was $0.2 million on acquired
borrowed funds compared to amortization of $0.3 million for the year ended December 31, 2023.
Provision for Credit Losses
The provisions for credit losses are set forth below:
Year Ended
December 31,
2024
2023
(In Thousands)
Provision (credit) for credit losses:
Commercial real estate
$
(2,814)
$
14,328 
Commercial
34,716 
21,537 
Consumer
187 
2,838 
Total provision (credit) for loan and lease losses
32,089 
38,703 
Unfunded credit commitments
(10,086)
(835)
Investment securities available-for-sale
(359)
339 
Total provision (credit) for credit losses
$
21,644 
$
38,207 
For the year ended December 31, 2024, the provision for credit losses decreased $16.6 million to $21.6 million from $38.2 million for the year ended
December 31, 2023. The decrease in the provision for 2024 was largely driven by the lack of a day one provision of $16.7 million in acquired loans as a result of the
PCSB acquisition.
See management’s discussion of “Financial Condition — Allowance for Loan and Lease Losses” and Note 7, “Allowance for Credit Losses,” to the audited
consolidated financial statements for a description of how management determined the allowance for loan and lease losses for each portfolio and class of loans.
Non-Interest Income
The following table sets forth the components of non-interest income:
Year Ended
December 31,
Dollar
Change
Percent
Change
2024
2023
(Dollars in Thousands)
Deposit fees
$
10,548 
$
11,611 
$
(1,063)
(9.2)%
Loan fees
2,394 
2,036 
358 
17.6 %
Loan level derivative income, net
1,658 
3,890 
(2,232)
(57.4)%
Gain (loss) on sales of investment securities, net
— 
1,704 
(1,704)
(100.0)%
Gain on sales of loans and leases
951 
2,581 
(1,630)
(63.2)%
Other
10,064 
10,112 
(48)
(0.5)%
Total non-interest income
$
25,615 
$
31,934 
$
(6,319)
(19.8)%
For the year ended December 31, 2024, non-interest income decreased $6.3 million, or 19.8%, to $25.6 million compared to $31.9 million for the same period
in 2023. The decrease was primarily driven by decreases of $2.2 million in loan level derivative income, net, $1.7 million in gain on sales of investment securities,
net, and $1.6 million in gain on sales of loans and leases.
Loan level derivative income, net, decreased $2.2 million, or 57.4%, to $1.7 million for the year ended December 31, 2024 from $3.9 million for the same
period in 2023, driven by lower levels of swap deals in 2024.
There was no gain on sales of investment securities for the year ended December 31, 2024 compared to a gain of $1.7 million for the same period in 2023,
driven by a $1.7 million gain on sales of investments from the repositioning of the PCSB portfolio in 2023 and no sales of investment securities in 2024.
Gain on sales of loans and leases decreased $1.6 million, or 63.2%, to $1.0 million for the year ended December 31, 2024 from $2.6 million for the same
period in 2023, driven by a decrease in loan participations in 2024.
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Non-Interest Expense
The following table sets forth the components of non-interest expense:
Year Ended
December 31,
Dollar
Change
Percent
Change
2024
2023
(Dollars in Thousands)
Compensation and employee benefits
$
143,723 
$
138,895 
$
4,828 
3.5 %
Occupancy
22,056 
20,203 
1,853 
9.2 %
Equipment and data processing
27,374 
27,004 
370 
1.4 %
Professional services
7,133 
7,226 
(93)
(1.3)%
FDIC insurance
8,044 
7,844 
200 
2.5 %
Advertising and marketing
5,240 
4,724 
516 
10.9 %
Amortization of identified intangible assets
6,746 
7,840 
(1,094)
(14.0)%
Merger and restructuring expense
4,201 
7,411 
(3,210)
(43.3)%
Other
17,348 
18,377 
(1,029)
(5.6)%
Total non-interest expense
$
241,865 
$
239,524 
$
2,341 
1.0 %
For the year ended December 31, 2024, non-interest expense increased $2.3 million, or 1.0%, to $241.9 million compared to $239.5 million for the same
period in 2023. The increase was primarily driven by increases of $4.8 million in compensation and employee benefits and $1.9 million in occupancy expense,
partially offset by decreases of $3.2 million in merger and restructuring expense, $1.1 million in amortization of identified intangible assets, and $1.0 million in
other expenses.
The efficiency ratio increased to 68.09% for the year ended December 31, 2024 from 64.45% for the same period in 2023. The increase year over year was
primarily driven by lower net interest income and non-interest income, and higher non-interest expense in 2024.
Compensation and employee benefits expense increased $4.8 million, or 3.5%, to $143.7 million for the year ended December 31, 2024 from $138.9 million
for the same period in 2023. The increase was primarily driven by higher incentive/bonus, salaries, and health care benefits expenses.
Occupancy expense increased $1.9 million, or 9.2%, to $22.1 million for the year ended December 31, 2024 from $20.2 million for the same period in 2023.
The increase was primarily driven by higher building maintenance, leasehold improvement depreciation, and rent expenses.
Merger and restructuring expense decreased $3.2 million, or 43.3%, to $4.2 million for the year ended December 31, 2024 from $7.4 million for the same
period in 2023. The decrease was driven by higher merger-related expenses due to the PCSB acquisition in 2023, compared to Berkshire Hills Bancorp merger-
related expenses and restructuring costs at Eastern Funding in 2024.
Provision for Income Taxes
Year Ended
December 31,
Dollar
Change
Percent
Change
2024
2023
(Dollars in Thousands)
Income before provision for income taxes
$
91,691 
$
93,914 
$
(2,223)
(2.4)%
Provision for income taxes
22,976 
18,915 
4,061 
21.5 %
Net income,
$
68,715 
$
74,999 
$
(6,284)
(8.4)%
Effective tax rate
25.1 %
20.1 %
N/A
24.9 %
The Company recorded income tax expense of $23.0 million for 2024, compared to $18.9 million for 2023. This represents an effective tax rate of 25.1% and
20.1% for 2024 and 2023, respectively. The increase in the Company's effective tax rate was due to the lack of participation in energy tax credit investments in 2024
compared to 2023 as well as an increase in merger and restructuring expenses which were not tax deductible during the period.
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Comparison of Years Ended December 31, 2023 and December 31, 2022
Net Interest Income
Net interest income increased $39.9 million to $339.7 million for the year ended December 31, 2023 from $299.8 million for the year ended December 31,
2022. The increase year over year reflects a $205.0 million increase in interest income on loans and leases, along with a $27.1 million increase in interest income on
debt securities, short term investments and restricted equity securities, offset by a $192.2 million increase in interest expense on deposits and borrowings, which is
reflective of the increase in volume and rising interest rate environment.
Net interest margin decreased by 43 basis points to 3.24% in 2023 from 3.67% in 2022. The Company's weighted average
interest rate on loans (prior to purchase accounting adjustments) increased to 5.72% for the year ended December 31, 2023
from 4.49% for the year ended December 31, 2022.
The yield on interest-earning assets increased to 5.50% for the year ended December 31, 2023 from 4.22% for the year
ended December 31, 2022. The increase is the result of higher yields on loans and leases and investments. The Company
recorded $2.9 million in prepayment penalties and late charges, which contributed 3 basis points to yields on interest-earning
assets for the year ended December 31, 2023 compared to $4.8 million, or 6 basis points, for the year ended December 31,
2022.
The cost of funds increased 218 basis points to 3.00% for the year ended December 31, 2023 from 0.82% for the year
ended December 31, 2022. Refer to "Financial Condition - Borrowed Funds" above for more details.
Management seeks to position the balance sheet to be neutral to assets sensitive changes in interest rates. From 2017
through 2019, short term interest rates rose while at the same time net interest income, net interest spread, and net interest
margin also increased. During 2020, interest rates declined sharply in response to the economic impact of the COVID-19
pandemic, and began to increase in the first quarter of 2022. In recent months, the Treasury yield curve has inverted and
flattened at the long end. Short term rates have risen sharply due to multiple rate hikes implemented by the FRB. The shape of
the curve indicates rates will begin to decline within a year and flatten around the 7-year mark. The short term increase in rates
positively affected the Company's net interest income, net interest spread, and net interest margin initially. As is expected in the
near term, the net interest margin is compressing as deposit pricing "catches up" and investable funds migrate among depository
and non-depository categories. Management expects this to persist for a quarter or two after the FRB stops increasing rates,
after which time net interest margin is expected to stabilize and then increase as loans continue to reprice into the higher rate
environment. To the extent that the FRB cuts rates in the near term, net interest income and net interest margin will be highly
dependent on the ability to move deposit pricing down in the same magnitude of the cuts to achieve margin expansion.
Interest Income—Loans and Leases
Year Ended
December 31,
Dollar
Change
Percent
Change
2023
2022
(Dollars in Thousands)
Interest income—loans and leases:
Commercial real estate loans
$
307,652 
$
172,811 
$
134,841 
78.0 %
Commercial loans
58,878 
33,896 
24,982 
73.7 %
Equipment financing
92,112 
75,767 
16,345 
21.6 %
Residential mortgage loans
46,350 
29,726 
16,624 
55.9 %
Other consumer loans
28,747 
16,569 
12,178 
73.5 %
Total interest income—loans and leases
$
533,739 
$
328,769 
$
204,970 
62.3 %
Interest income from loans and leases was $533.7 million for 2023, and represented a yield on total loans of 5.72%. This compares to $328.8 million of
interest on loans and leases and a yield of 4.49% for 2022. The $205.0 million increase in interest income from loans and leases was driven by the acquisition of
PCSB Bank, along with an increase of $97.0 million in origination volume, and an increase of $108.0 million in interest rates changes.
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Interest Income—Investments
Year Ended
December 31,
Dollar
Change
Percent
Change
2023
2022
(Dollars in Thousands)
Interest income—investments:
Debt securities
$
29,648 
$
13,079 
$
16,569 
126.7 %
Marketable and restricted equity securities
5,571 
1,898 
3,673 
193.5 %
Short-term investments
8,329 
1,440 
6,889 
478.4 %
Total interest income—investments
$
43,548 
$
16,417 
$
27,131 
165.3 %
Total investment income was $43.5 million for the year ended December 31, 2023 compared to $16.4 million for the year ended December 31, 2022. As of
December 31, 2023, the yield on total investments was 3.72% compared to 1.94% as of December 31, 2022. This year over year increase in total investment income
of $27.1 million, or 165.3%, was driven by a $18.4 million increase due to rates and a $9.0 million increase due to volume.
Interest Expense—Deposits and Borrowed Funds
Year Ended
December 31,
Dollar
Change
Percent
Change
2023
2022
(Dollars in Thousands)
Interest expense:
Deposits:
NOW accounts
$
4,275 
$
853 
$
3,422 
401.2 %
Savings accounts
27,974 
2,228 
25,746 
1155.6 %
Money market accounts
58,153 
15,392 
42,761 
277.8 %
Certificate of deposit accounts
44,122 
8,210 
35,912 
437.4 %
Brokered deposit accounts
41,141 
2,909 
38,232 
1,314.3 %
Total interest expense—deposits
175,665 
29,592 
146,073 
493.6 %
Borrowed funds:
Advances from the FHLB
52,467 
9,355 
43,112 
460.8 %
Subordinated debentures and notes
5,476 
5,133 
343 
6.7 %
Other borrowed funds
3,968 
1,335 
2,633 
197.2 %
Total interest expense—borrowed funds
61,911 
15,823 
46,088 
291.3 %
Total interest expense
$
237,576 
$
45,415 
$
192,161 
423.1 %
Deposits
In 2023, interest paid on deposits increased $146.1 million, or 493.6%, compared to 2022. The increase in interest expense on deposits was driven by an
increase of $111.4 million due to higher interest rates and an increase of $34.7 million primarily driven by the growth in volume of average brokered deposits and
certificate of deposit balances. For the year ended December 31, 2023, purchase accounting amortization was $1.3 million on acquired deposits and one basis point.
The Company did not record any purchase accounting amortization in 2022.
Borrowed Funds
As of December 31, 2023, the Company's borrowed funds include $1.2 billion in FHLB borrowings, $84.2 million in subordinated debentures and notes, and
$69.3 million in other borrowed funds. In 2023, the average balance of FHLB borrowings increased $752.4 million, or 220.9%, the average balance of other
borrowed funds, which includes repurchase agreements and other borrowings, increased $6.4 million, or 5.4%, and the average balance of subordinated debentures
and notes increased $145.0 thousand, or 0.2%, for the year ended December 31, 2023.
For the year ended December 31, 2023, interest paid on borrowed funds increased $46.1 million, or 291.3%, year over year. The cost of borrowed funds
increased to 4.69% for the year ended December 31, 2023 from 2.87% for the year ended December 31, 2022. The increase in interest expense was driven by an
increase of $32.3 million due to volume and an increase
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of $13.8 million due to borrowing rates. For the year ended December 31, 2023, purchase accounting amortization was $0.3 million on acquired borrowed funds
compared to amortization of $0.1 million for the year ended December 31, 2022. Purchase accounting amortization had no impact on the Company's net interest
margin.
Provision for Credit Losses
The provisions for credit losses are set forth below:
Year Ended
December 31,
2023
2022
(In Thousands)
Provision (credit) for loan and lease losses:
Commercial real estate
$
14,328 
$
(1,046)
Commercial
21,537 
2,892 
Consumer
2,838 
872 
Total provision (credit) for loan and lease losses
38,703 
2,718 
Unfunded credit commitments
(835)
5,807 
Investment securities available-for-sale
$
339 
$
102 
Total provision (credit) for credit losses
$
38,207 
$
8,627 
For the year ended December 31, 2023, the provision for credit losses increased $29.6 million to $38.2 million from $8.6 million for the year ended December 31, 2022. This increase in the
provision for 2023 is largely driven by a $16 million increase in acquired loans as a result of the PCSB acquisition.
For the year ended December 31, 2023, the provision for credit losses increased $29.6 million to $38.2 million from $8.6 million for the year ended December
31, 2022. This increase in the provision for 2023 was largely driven by a $16 million increase in acquired loans as a result of the PCSB acquisition.
See management’s discussion of “Financial Condition — Allowance for Loan and Lease Losses” and Note 7, “Allowance for Credit Losses,” to the audited
consolidated financial statements for a description of how management determined the allowance for loan and lease losses for each portfolio and class of loans.
Non-Interest Income
The following table sets forth the components of non-interest income:
Year Ended
December 31,
Dollar
Change
Percent
Change
2023
2022
(Dollars in Thousands)
Deposit fees
$
11,611 
$
10,919 
$
692 
6.3 %
Loan fees
2,036 
2,208 
(172)
(7.8)%
Loan level derivative income, net
3,890 
4,246 
(356)
(8.4)%
Gain (loss) on sales of investment securities, net
1,704 
321 
1,383 
430.8 %
Gain on sales of loans and leases
2,581 
4,136 
(1,555)
(37.6)%
Other
10,112 
6,517 
3,595 
55.2 %
Total non-interest income
$
31,934 
$
28,347 
$
3,587 
12.7 %
For the year ended December 31, 2023, non-interest income increased $3.6 million, or 12.7%, to $31.9 million compared to $28.3 million for the same period
in 2022. The increase was primarily driven by increases of $3.6 million in other income and $1.4 million in gain on sales of investment securities, net, partially
offset by a decrease of $1.6 million in gain on sales of loans and leases.
Other income increased $3.6 million, or 55.2%, to $10.1 million for the year ended December 31, 2023 from $6.5 million for the same period in 2022,
primarily driven by higher gain on interest rate derivatives, BOLI income, and wealth management income.
Gain on sales of loans and leases decreased $1.6 million, or 37.6%, to $2.6 million for the year ended December 31, 2023 from $4.1 million for the same
period in 2022, primarily driven by a decrease in loan participations in 2023.
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For the year ended December 31, 2023, gain on sales of investment securities increased $1.4 million, or 430.8%, to $1.7 million, compared to a gain of $0.3
million for the same period in 2022, primarily driven by a $1.7 million gain on sales of investments from the repositioning of the PCSB portfolio.
Non-Interest Expense
The following table sets forth the components of non-interest expense:
Year Ended
December 31,
Dollar
Change
Percent
Change
2023
2022
(Dollars in Thousands)
Compensation and employee benefits
$
138,895 
$
113,487 
$
25,408 
22.4 %
Occupancy
20,203 
16,002 
4,201 
26.3 %
Equipment and data processing
27,004 
20,833 
6,171 
29.6 %
Professional services
7,226 
5,060 
2,166 
42.8 %
FDIC insurance
7,844 
3,177 
4,667 
146.9 %
Advertising and marketing
4,724 
4,980 
(256)
(5.1)%
Amortization of identified intangible assets
7,840 
494 
7,346 
1487.0 %
Merger and acquisition expense
7,411 
2,249 
5,162 
229.5 %
Other
18,377 
13,260 
5,117 
38.6 %
Total non-interest expense
$
239,524 
$
179,542 
$
59,982 
33.4 %
For the year ended December 31, 2023, non-interest expense increased $60.0 million, or 33.4%, to $239.5 million compared to $179.5 million for the same
period in 2022. The increase was primarily driven by increases of $25.4 million in compensation and employee benefits, $7.3 million in amortization of identified
intangible assets, $6.2 million in equipment and data processing, $5.2 million in merger and acquisition expense, $5.1 million in other expense, $4.7 million in
FDIC insurance, $4.2 million in occupancy, and $2.2 million in professional services.
The efficiency ratio increased to 64.45% for the year ended December 31, 2023 from 54.72% for the same period in 2022. The increase year over year was
primarily driven by higher non-interest expense, partially offset by higher net interest income and non-interest income in 2023.
Compensation and employee benefits expense increased $25.4 million, or 22.4%, to $138.9 million for the year ended December 31, 2023 from $113.5 million
for the same period in 2022. The increase was primarily driven by an increase in employee headcount, predominantly from the PCSB acquisition, driving increases
in salaries, retirement plan and health care benefits, partially offset by a decrease in incentive/bonus.
Amortization of identified intangible assets expense increased $7.3 million to $7.8 million for the year ended December 31, 2023 from $0.5 million for the
same period in 2022. The increase in 2023 was primarily driven by intangible core deposit valuation for the PCSB acquisition.
Equipment and data processing expense increased $6.2 million, or 29.6%, to $27.0 million for the year ended December 31, 2023 from $20.8 million for the
same period in 2022. The increase was primarily driven by higher software expenses.
Merger and acquisition expense increased $5.2 million to $7.4 million for the year ended December 31, 2023 from $2.2 million for the same period in 2022.
The increase was driven by merger-related expenses related to the PCSB acquisition.
Other expense increased $5.1 million, or 38.6%, to $18.4 million for the year ended December 31, 2023 from $13.3 million for the same period in 2022. The
increase was primarily driven by lower deferred loan expenses, higher directors' fees and higher miscellaneous expenses.
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Provision for Income Taxes
Year Ended
December 31,
Dollar
Change
Percent
Change
2023
2022
(Dollars in Thousands)
Income before provision for income taxes
$
93,914 
$
139,949 
$
(46,035)
(32.9)%
Provision for income taxes
18,915 
30,205 
(11,290)
(37.4)%
Net income,
$
74,999 
$
109,744 
$
(34,745)
(31.7)%
Effective tax rate
20.1 %
21.6 %
N/A
(6.9)%
The Company recorded income tax expense of $18.9 million for 2023, compared to $30.2 million for 2022. This represents an effective tax rate of 20.1% and
21.6% for 2023 and 2022, respectively. The decrease in the Company's effective tax rate is due to continued participation in energy tax credit investments, and
increased benefits in the Company's investments in affordable housing projects.
Liquidity and Capital Resources
Liquidity
Liquidity is defined as the ability to meet current and future financial obligations of a short-term nature. The Company further defines liquidity as the ability
to respond to the needs of depositors and borrowers, as well as to earnings enhancement opportunities, in a changing marketplace. Liquidity management is
monitored by an ALCO, consisting of members of management, which is responsible for establishing and monitoring liquidity targets as well as strategies and
tactics to meet these targets. The primary source of funds for the payment of dividends and expenses by the Company are dividends paid to it by the Banks. The
primary sources of liquidity for the Banks consist of deposit inflows, loan repayments, borrowed funds, maturing investment securities and net income.
In the fourth quarter, the Company operated with increased liquidity. During the year, the Company shifted its balance sheet asset mix to include additional
cash. Management will continue to monitor the economic conditions and evaluate changes to the Company’s liquidity position.
The Company held higher levels of on balance sheet liquidity in the form of cash and available-for sale securities in the fourth quarter. Cash and equivalents
at the end of the quarter were $543.6 million, or 4.6% of the balance sheet, compared to $133.0 million, or 1.2% of the balance sheet, as of December 31, 2023. In
general, in a normal operating environment, the Company seeks to maintain liquidity levels of cash, cash equivalents and investment securities available-for-sale of
between 8% and 12% of total assets. As of December 31, 2024, cash, cash equivalents and investment securities available-for-sale totaled $1.4 billion, or 12.1% of
total assets. This compares to $1.0 billion, or 9.2% of total assets, as of December 31, 2023.
Deposits, which are considered the most stable source of liquidity, totaled $8.9 billion as of December 31, 2024 and represented 85.4% of total funding (the
sum of total deposits and total borrowings), compared to deposits of $8.5 billion, or 86.1% of total funding, as of December 31, 2023. Core deposits, which consist
of demand checking, NOW, savings and money market accounts, totaled $6.1 billion as of December 31, 2024 and represented 69.1% of total deposits, compared to
core deposits of $6.1 billion, or 71.3% of total deposits, as of December 31, 2023. Additionally, the Company had $869.0 million of brokered deposits as of
December 31, 2024, which represented 9.8% of total deposits, compared to $881.2 million or 10.3% of total deposits, as of December 31, 2023. The Company
offers attractive interest rates based on market conditions to increase deposits balances, while managing cost of funds.
Borrowings are used to diversify the Company's funding mix and to support asset growth. When profitable lending and investment opportunities exist, access
to borrowings provides a means to grow the balance sheet. Borrowings totaled $1.5 billion as of December 31, 2024, representing 14.6% of total funding, compared
to $1.4 billion, or 13.9% of total funding, as of December 31, 2023. The growth in the balance sheet is driven by the current operating environment, management
will continue to monitor economic conditions and make adjustments to the balance sheet mix as appropriate.
As members of the FHLB of Boston and FHLB of New York, the Banks have access to both short- and long-term borrowings. The Company's remaining
borrowing capacity from the FHLB of Boston and FHLB of New York for advances and repurchase agreements was $1.3 billion as of December 31, 2024 and
December 31, 2023, respectively, based on the level of qualifying collateral available for these borrowings.
As of December 31, 2024, the Banks also have access to funding through certain uncommitted lines via AFX as well as other large financial institution
specific lines.
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The Company had a $30.0 million committed line of credit for contingent liquidity as of December 31, 2024.
The Company has access to the Federal Reserve Discount Window to supplement its liquidity. The Company has $359.5 million of borrowing capacity at the
FRB as of December 31, 2024.
As of December 31, 2024, the Company did not have any borrowings outstanding with the FRB nor with these committed and uncommitted lines.
Additionally, the Banks have access to liquidity through repurchase agreements and brokered deposits.
While management believes that the Company has adequate liquidity to meet its commitments, and to fund the Banks' lending and investment activities, the
availabilities of these funding sources are subject to broad economic conditions and could be restricted in the future. Such restrictions would impact the Company's
immediate liquidity and/or additional liquidity needs.
Capital Resources
As of December 31, 2024 and 2023, the Company and the Banks were under the primary regulation of and required to comply with the capital requirements
of the FRB. At those dates, the Company and the Banks exceeded all regulatory capital requirements and the banks were considered "well-capitalized." See
"Supervision and Regulation" in Item 1 and Note 19, "Regulatory Capital Requirements", for the Company's and the Banks' actual and required capital amounts and
ratios.
Off-Balance-Sheet Arrangements
The Company is party to off-balance sheet financial instruments in the normal course of business to meet the financing needs of its customers and to reduce
its own exposure to fluctuations in interest rates. These financial instruments include loan commitments, standby and commercial letters of credit and loan level
derivatives. According to GAAP, these financial instruments are not recorded in the financial statements until they are funded or related fees are incurred or
received. The effect of such activity on the Company's financial condition and results of operations, such as recorded liability for unfunded credit commitment, is
immaterial. See Note 13, "Commitments and Contingencies," to the consolidated financial statements for a description of off-balance-sheet financial instruments.
Contractual Obligations
A summary of contractual obligations by the expected payment period for the date indicated follows.
Payment Due by Period
Less Than
One Year
One to
Three Years
More than Three
Years to
Five Years
Over Five
Years
Total
(In Thousands)
At December 31, 2024:
Advances from the FHLB
$
1,278,372 
$
70,316 
$
2,577 
$
4,661 
$
1,355,926 
Subordinated debentures and notes
— 
— 
74,528 
9,800 
84,328 
Other borrowed funds
79,592 
— 
— 
— 
79,592 
Loan commitments 
2,181,044 
— 
— 
— 
2,181,044 
Occupancy lease commitments 
9,156 
16,423 
10,301 
16,665 
52,545 
Purchase obligations 
39,825 
18,970 
1,220 
— 
60,015 
Employee postretirement obligations
1,725 
3,643 
3,976 
20,222 
29,566 
$
3,589,714 
$
109,352 
$
92,602 
$
51,348 
$
3,843,016 
_______________________________________________________________________________
(1) These amounts represent commitments made by the Company to extend credit to borrowers as long as there is no violation of any condition established in the contract. Commitments generally have
fixed expiration dates or other termination clauses. Since some of the commitments are expected to expire without being drawn upon, the total commitment amount does not necessarily represent future cash
requirements.
(2) The Company leases certain office space under various noncancellable operating leases. These leases have terms ranging from 1 year to over 19 years. Certain leases contain renewal options and
escalation clauses for real estate taxes and other expenditures which can increase rental expenses based principally on the consumer price index and fair market rental value provisions.
(3) Purchase obligations represent agreements to purchase goods or services that are enforceable and legally binding and specify all significant terms.
(1)
(2)
(3)
64

Table of Contents
Item 7A.    Quantitative and Qualitative Disclosures about Market Risk
Market Risk
Market risk is the risk that the market value or estimated fair value of the Company's assets, liabilities, and derivative financial instruments will decline as a
result of changes in interest rates or financial market volatility, or that the Company's net income will be significantly reduced by interest-rate changes.
The principal market risk facing the Company is interest-rate risk, which can occur in a variety of forms, including repricing risk, yield-curve risk, basis risk,
and prepayment risk. Repricing risk occurs when the change in the average yield of either interest-earning assets or interest-bearing liabilities is more sensitive than
the other to changes in market interest rates. Such a change in sensitivity could reflect a number of possible mismatches in the repricing opportunities of the
Company's assets and liabilities. Yield-curve risk reflects the possibility that changes in the shape of the yield curve could have different effects on the Company's
assets and liabilities. Basis risk occurs when different parts of the balance sheet are subject to varying base rates reflecting the possibility that the spread from those
base rates will deviate. Prepayment risk is associated with financial instruments with an option to prepay before the stated maturity, often a disadvantage to person
selling the option; this risk is most often associated with the prepayment of loans, callable investments, and callable borrowings.
Asset/Liability Management
Market risk and interest-rate risk management is governed by the Company's ALCO. The ALCO establishes exposure limits that define the Company's
tolerance for interest-rate risk. The ALCO and the Company's Treasury Group measure and manage the composition of the balance sheet over a range of possible
changes in interest rates while remaining responsive to market demand for loan and deposit products. The ALCO monitors current exposures versus limits and
reports those results to the Board of Directors. The policy limits and guidelines serve as benchmarks for measuring interest-rate risk and for providing a framework
for evaluation and interest-rate risk-management decision-making. The Company measures its interest-rate risk by using an asset/liability simulation model. The
model considers several factors to determine the Company's potential exposure to interest-rate risk, including measurement of repricing gaps, duration, convexity,
value-at-risk, market value of portfolio equity under assumed changes in the level of interest rates, the shape of yield curves, and general market volatility.
Management controls the Company's interest-rate exposure using several strategies, which include adjusting the maturities of securities in the Company's
investment portfolio, limiting or expanding the terms of loans originated, limiting fixed-rate deposits with terms of more than five years, and adjusting maturities of
FHLB advances. The Company limits this risk by restricting the types of MBSs it invests into those with limited average life changes under certain interest-rate-
shock scenarios, or securities with embedded prepayment penalties. The Company enters into interest rate swaps as part of its interest rate risk management strategy.
These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for the Company
making fixed payments.
Measuring Interest-Rate Risk
As noted above, interest-rate risk can be measured by analyzing the extent to which the repricing of assets and liabilities are mismatched to create an interest-
rate sensitivity gap. An asset or liability is said to be interest-rate sensitive within a specific period if it will mature or reprice within that period. The interest-rate
sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of
interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest-rate-sensitive assets exceeds
the amount of interest-rate-sensitive liabilities. A gap is considered negative when the amount of interest-rate-sensitive liabilities exceeds the amount of interest-
rate-sensitive assets. During a period of falling interest rates, therefore, a positive gap would tend to adversely affect net interest income. Conversely, during a
period of rising interest rates, a positive gap position would tend to result in an increase in net interest income.
The Company's interest-rate risk position is measured using both income simulation and interest-rate sensitivity "gap" analysis. Income simulation is the
primary tool for measuring the interest-rate risk inherent in the Company's balance sheet at a given point in time by showing the effect on net interest income, over a
twelve-month period, of a variety of interest-rate shocks. These simulations take into account repricing, maturity, and prepayment characteristics of individual
products. The ALCO reviews simulation results to determine whether exposure resulting from changes in market interest rates remains within established tolerance
levels over a twelve-month horizon, and develops appropriate strategies to manage this exposure. The Company's interest-rate risk analysis remains modestly asset-
sensitive as of December 31, 2024.
The assumptions used in the Company’s interest-rate sensitivity simulation discussed above are inherently uncertain and, as a result, the simulations cannot
precisely measure net interest income or precisely predict the impact of changes in interest rates.
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Table of Contents
As of December 31, 2024, net interest income simulation indicated that the Company's exposure to changing interest rates was within tolerance. The ALCO
reviews the methodology utilized for calculating interest-rate risk exposure and may periodically adopt modifications to this methodology. The following table
presents the estimated impact of interest-rate changes on the Company's estimated net interest income over the twelve-month periods indicated while maintaining a
flat balance sheet.
Estimated Exposure to Net Interest Income
over Twelve-Month Horizon Beginning
December 31, 2024
December 31, 2023
Gradual Change in Interest Rate Levels
Dollar
Change
Percent
Change
Dollar
Change
Percent
Change
 
(Dollars in Thousands)
Up 300 basis points shock
$
10,017 
2.7 %
$
13,318 
3.9 %
Up 200 basis points ramp
7,911 
2.1 %
7,068 
2.1 %
Up 100 basis points ramp
4,431 
1.2 %
3,389 
1.0 %
Down 100 basis points ramp
(3,537)
(1.0)%
(5,042)
(1.5)%
The estimated impact of a 300 basis points increase in market interest rates on the Company's estimated net interest income over a twelve-month horizon was a
positive 2.7% as of December 31, 2024, compared to a positive 3.9% as of December 31, 2023. The balance sheet became less asset sensitive as loans reprice
slower than deposits.
EVE at Risk Simulation is conducted in tandem with net interest income simulations to ascertain a longer term view of the Company’s interest-rate risk position
by capturing longer-term repricing risk and options risk embedded in the balance sheet. It measures the sensitivity of the economic value of equity to changes in
interest rates. The EVE at Risk Simulation values only the current balance sheet and does not incorporate growth assumptions. As with the net interest income
simulation, this simulation captures product characteristics such as loan resets, repricing terms, maturity dates, and 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. The Company conducts non-maturity deposit behavior studies on a periodic basis to
support deposit assumptions used in the valuation process. All key assumptions are subject to a periodic review.
EVE at Risk is calculated by estimating the net present value of all future cash flows from existing assets and liabilities using current interest rates as well as
parallel shocks to the current interest-rate environment. The following table sets forth the estimated percentage change in the Company’s EVE at Risk, assuming
various shifts in interest rates.
Estimated Percent Change in Economic Value of Equity
Parallel Shock in Interest Rate Levels
At December 31, 2024
At December 31, 2023
Up 300 basis points
(5.5)%
(6.3)%
Up 200 basis points
(4.1)%
(4.4)%
Up 100 basis points
(1.3)%
(2.2)%
Down 100 basis points
(0.8)%
2.1 %
The Company's EVE asset sensitivity decreased from December 31, 2023 to December 31, 2024 driven by change in deposit mix and loan growth.
The Company also uses interest-rate sensitivity "gap" analysis to provide a more general overview of its interest-rate risk profile. The interest-rate sensitivity
gap is defined as the difference between interest-earning assets and interest-bearing liabilities maturing or repricing within a given time period. The table below
shows the Company's interest-rate sensitivity gap position as of December 31, 2024.
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Table of Contents
One Year
or Less
More than
One Year to
Two Years
More than
Two Years
to Three
Years
More than
Three Years
to Five Years
More than
Five Years
Total
(Dollars in Thousands)
Interest-earning assets :
Short-term investments
$
478,997 
$
— 
$
— 
$
— 
$
— 
$
478,997 
Weighted average rate
4.33 %
— %
— %
— %
— %
4.33 %
Investment securities 
149,753 
182,918 
132,879 
197,908 
231,575 
895,033 
Weighted average rate
2.03 %
2.70 %
2.65 %
2.83 %
2.43 %
2.54 %
Commercial real estate loans 
2,623,203 
801,344 
763,564 
1,105,816 
422,188 
5,716,115 
Weighted average rate
6.01 %
4.46 %
4.83 %
5.21 %
5.39 %
5.43 %
Commercial loans and leases 
1,125,818 
465,215 
344,964 
402,310 
168,358 
2,506,665 
Weighted average rate
7.12 %
7.32 %
7.80 %
7.54 %
7.24 %
7.33 %
Consumer loans 
703,762 
136,235 
126,475 
194,800 
395,237 
1,556,509 
Weighted average rate
6.54 %
4.22 %
4.39 %
4.82 %
5.36 %
5.65 %
Total interest-earning assets
5,081,533 
1,585,712 
1,367,882 
1,900,834 
1,217,358 
11,153,319 
Weighted average rate
6.05 %
5.07 %
5.32 %
5.41 %
5.07 %
5.61 %
Interest-bearing liabilities :
 
 
 
 
 
 
NOW accounts
$
— 
$
— 
$
— 
$
— 
$
617,246 
$
617,246 
Weighted average rate
— %
— %
— %
— %
0.57 %
0.57 %
Savings accounts
— 
— 
— 
— 
1,721,247 
1,721,247 
Weighted average rate
— %
— %
— %
— %
2.35 %
2.35 %
Money market savings accounts
2,116,360 
— 
— 
— 
— 
2,116,360 
Weighted average rate
2.50 %
— %
— %
— %
— %
2.50 %
Certificates of deposit 
1,773,258 
78,153 
13,188 
20,844 
— 
1,885,443 
Weighted average rate
4.38 %
3.34 %
2.13 %
2.03 %
— %
4.30 %
Brokered deposits
786,026 
83,486 
— 
(559)
— 
868,953 
Weighted average rate
4.55 %
4.34 %
— %
— %
— %
4.53 %
Borrowed funds 
1,443,760 
70,820 
780 
3,247 
1,238 
1,519,845 
Weighted average rate
4.90 %
4.24 %
2.96 %
1.47 %
4.86 %
4.86 %
Total interest-bearing liabilities
6,119,404 
232,459 
13,968 
23,532 
2,339,731 
8,729,094 
Weighted average rate
3.88 %
3.97 %
2.18 %
2.00 %
1.88 %
3.20 %
Interest sensitivity gap 
$
(1,037,871)
$
1,353,253 
$
1,353,914 
$
1,877,302 
$
(1,122,373)
$
2,424,225 
Cumulative interest sensitivity gap
$
(1,037,871)
$
315,382 
$
1,669,296 
$
3,546,598 
$
2,424,225 
 
Cumulative interest sensitivity gap as a percentage of
total assets
(8.72)%
2.65 %
14.02 %
29.79 %
20.36 %
 
Cumulative interest sensitivity gap as a percentage of
total interest-earning assets
(9.31)%
2.83 %
14.97 %
31.80 %
21.74 %
 
_______________________________________________________________________________
(1) Interest-earning assets and interest-bearing liabilities are included in the period in which the balances are expected to be redeployed and/or repriced as a result of anticipated prepayments, scheduled rate
adjustments and contractual maturities.
(2) Interest sensitivity gap represents the difference between interest-earning assets and interest-bearing liabilities.
(3) Investment securities include all debt, equity and restricted equity securities and unrealized gains and losses on investment securities.
(1)
(1) (3)
(1)
(1)
(1)
(1)
(1)
(1)
(2)
67

Table of Contents
As of December 31, 2024, interest-earning assets maturing or repricing within one year amounted to $5.1 billion and interest-bearing liabilities maturing or
repricing within one year amounted to $6.1 billion, resulting in a cumulative one-year negative gap position of $1.0 billion or 9.31% of total interest-earning assets.
As of December 31, 2023, the Company had a cumulative one-year negative gap position of $521.4 million, or 4.89% of total interest-earning assets. The change in
the cumulative one-year gap position from December 31, 2023 was due to an increase of borrowed funds and non-maturity deposits.
Interest rates paid on NOW accounts, savings accounts and money market accounts are subject to change at any time and such deposits are available for
immediate withdrawal. A review of rates paid on these deposit categories over the last several years indicated that the amount and timing of rate changes did not
coincide with the amount and timing of rate changes on other deposits when the FRB adjusted its benchmark federal funds rate.
Management views NOW and savings accounts to be less sensitive to interest rates than money market accounts and these accounts are therefore
characterized as stable long-term funding sensitive beyond five years. Management views money market accounts to be more volatile deposits and these accounts
are therefore characterized as sensitive to changes in interest rates within the first year.
Item 8.    Financial Statements and Supplementary Data
The following financial statements and supplementary data required by this item are presented on the following pages which appear elsewhere herein:
 
Pages
Reports of Independent Registered Public Accounting Firm
F-3
Consolidated Balance Sheets as of December 31, 2024 and 2023
F-6
Consolidated Statements of Income for the years ended December 31, 2024, 2023, and 2022
F-7
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023, and 2022
F-8
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, 2024, 2023, and 2022
F-9 - F-11
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022
F-10 - F-13
Notes to Consolidated Financial Statements
F-12 - F-82
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Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.
Item 9A.    Controls and Procedures
Under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer (Principal Executive
Officer) and Chief Financial and Strategy Officer (Principal Financial Officer), the Company has evaluated the effectiveness of its disclosure controls and
procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the
Chief Executive Officer and Chief Financial and Strategy Officer concluded that, as of the end of the period covered by this report, the Company's disclosure
controls and procedures were effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is
(i) recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the
Company's management, including its Chief Financial and Strategy Officer, as appropriate to allow timely decisions regarding required disclosure.
There has been no change in the Company's internal control over financial reporting identified in connection with the quarterly evaluation that occurred
during the Company's last fiscal quarter that has materially and detrimentally affected, or is reasonably likely to materially and detrimentally affect, the Company's
internal control over financial reporting.
The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in
Exchange Act Rule 13a-15(f). The Company's internal control system was designed to provide reasonable assurance to its management and the Board of Directors
regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed have inherent
limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and
presentation. The Company's management assessed the effectiveness of its internal control over financial reporting as of the end of the period covered by this report.
In addition, the effectiveness of the Company's internal control over financial reporting as of the end of the period covered by this report has been audited by
KPMG LLP, an independent registered public accounting firm as stated in its report which is included in Item 8 of this Annual Report on Form 10-K.
Management's Report on Internal Control Over Financial Reporting as of December 31, 2024 appears on page F-1 herein and the related Report of
Independent Registered Public Accounting Firm thereon appears on page F-2 herein.
Item 9B.    Other Information
(a). Retention Bonus Agreements
On February 26, 2025, the Company entered into retention bonus agreements with each of Carl M. Carlson, the Company’s Co-President and Chief Financial and
Strategy Officer, and Michael W. McCurdy, the Company’s Co-President and Chief Operating Officer (the “Retention Bonus Agreements”). The Retention Bonus
Agreements were entered into in connection with the Merger to incentivize Mr. Carlson and Mr. McCurdy to remain employed with Brookline and, after the closing
of the Merger, Berkshire. Pursuant to the Retention Bonus Agreements, Mr. Carlson’s and Mr. McCurdy’s retention bonuses are each equal to $3 million, payable in
two equal installments with 50% of each retention bonus becoming earned and payable on the first anniversary of the closing of the Merger and 50% of each
retention bonus becoming earned and payable on the second anniversary of the closing of the Merger, in each case, subject to such executive officer’s continued
employment through such date. In the event that Mr. Carlson’s or Mr. McCurdy’s employment is terminated by the Company (or, after the closing of the Merger,
Berkshire) without “cause”, due to their death or disability, or by such executive officer for “good reason” (as each term is defined in each executive officer’s
employment agreement), the full amount of any unpaid retention bonuses shall accelerate and become payable on the first regularly scheduled payroll cycle
following the date of termination. Copies of the Retention Bonus Agreements are filed as Exhibits 10.15 and 10.16 of this Annual Report on Form 10-K and
incorporated herein by reference.
Meiklejohn Agreement
On February 26, 2025, Berkshire, Brookline Bank and Mark J. Meiklejohn entered into an employment agreement (the “Meiklejohn Agreement”). The Meiklejohn
Agreement will become effective as of the closing of the Merger and sets forth the terms of Mr. Meiklejohn’s employment with Berkshire and Brookline Bank
following the Merger. The Meiklejohn Agreement supersedes and replaces Mr. Meiklejohn’s preexisting employment agreement.
Pursuant to the Meiklejohn Agreement, Mr. Meiklejohn will receive a base salary, subject to periodic review by the Berkshire board of directors or compensation
committee, and cash incentive compensation and equity awards as determined by the Berkshire board of directors or compensation committee from time to time. As
of the closing of the Merger, the base salary of Mr. Meiklejohn will be equal to $480,500.00. As of the closing of the Merger, Mr. Meiklejohn’s target annual
incentive
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compensation will continue to be equal to 60% of his base salary and the target value of his annual equity award will have a grant date fair value of 50% of his base
salary. In addition, Mr. Meiklejohn will be eligible to participate in the employee benefit plans generally available to employees of Berkshire and Brookline Bank
after the Merger, subject to the terms of such plans. Mr. Meiklejohn will also continue to receive a car allowance of $500 per month, parking near the bank’s office
in Providence, Rhode Island, and payment of membership dues to the Aurora Civic Association in Providence, Rhode Island.
In the event of a termination of employment after the closing of the merger by Berkshire or Brookline Bank without “cause” or by such executive officer for “good
reason” (as each term is defined in the Meiklejohn Agreement), subject to his execution of a separation agreement and release of claims in favor of Berkshire and
Brookline Bank, Mr. Meiklejohn is entitled to receive severance equal to (i) two times the sum of (A) his then-current base salary (or, in the case of a termination by
Mr. Meiklejohn for good reason due to a reduction in base salary, the base salary in effect immediately prior to such reduction), and (B) his target bonus for the
then-current year; (ii) full acceleration of vesting of all stock options and other stock-based awards held by such executive officer; (iii) subject to the Mr.
Meiklejohn’s proper election to receive benefits under COBRA and copayment of premiums at the applicable active employee’s rate, a monthly payment equal to
the monthly employer contribution that Berkshire would have made to provide health insurance to the executive officer had he remained employed until the earlier
of 24 months from the date of termination or the date that he becomes eligible for group medical benefits under any other employer’s group medical plan; and (iv)
continued life and disability coverage for 24 months following the date of termination.
In lieu of the payments the payments and benefits described in the paragraph above, in the event of a termination of employment on or within 24 months after a
“change in control” (as defined in the employment agreement) by either Berkshire and Brookline Bank without “cause” or by Mr. Meiklejohn for “good reason” (as
each term is defined in Meiklejohn Agreement), subject to his execution of a separation agreement and release of claims in favor of Berkshire and Brookline Bank,
Mr. Meiklejohn is entitled to receive severance equal to (i) two times the sum of (A) Mr. Meiklejohn’s then-current base salary (or the base salary in effect
immediately prior to the change in control, if higher), and (B) Mr. Meiklejohn’s target bonus for the then-current year (or, the target bonus in effect immediately
prior to the change in control, if higher); (ii) full acceleration of vesting of all stock options and other stock-based awards held by Mr. Meiklejohn; (iii) subject to
Mr. Meiklejohn’s proper election to receive benefits under COBRA and copayment of premiums at the applicable active employee’s rate, a monthly payment equal
to the monthly employer contribution that Brookline would have made to provide health insurance to Mr. Meiklejohn had he or she remained employed until the
earlier of 24 months from the date of termination or the date that the executive officer becomes eligible for group medical benefits under any other employer’s group
medical plan; and (iv) continued life and disability coverage for 24 months following the date of termination.
In addition, Mr. Meiklejohn is entitled to voluntary termination benefits in the event that they resign within two years following the closing of the merger, subject to
Mr. Meiklejohn’s execution of a separation agreement and release of claims in favor of Berkshire and Brookline Bank, equal to the severance benefits described
above for a termination that is not in connection with a change in control (excluding equity acceleration). In the event that Mr. Meiklejohn’s disability, Berkshire
and Brookline Bank will continue to pay his base salary (reduced by any benefits he may be entitled to receive under any state or federal disability insurance
program) for a period of six months from the date of disability.
A copy of the Meiklejohn Agreement is filed as Exhibits 10.17 of this Annual Report on Form 10-K and incorporated herein by reference.
(b). During the three months ended December 31, 2024, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of
1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of
Regulation S-K).
Item 9C.    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
Not applicable.
PART III
Item 10.    Directors, Executive Officers and Corporate Governance
Information required by Item 10 shall be included in an amendment to this Annual Report on Form 10-K filed in accordance with General Instructions G(3).
Item 11.    Executive Compensation
Information required by Item 11 shall be included in an amendment to this Annual Report on Form 10-K filed in accordance with General Instructions G(3).
Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
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Information required by Item 12 shall be included in an amendment to this Annual Report on Form 10-K filed in accordance with General Instructions G(3).
Item 13.    Certain Relationships and Related Transactions, and Director Independence
Information required by Item 13 shall be included in an amendment to this Annual Report on Form 10-K filed in accordance with General Instructions G(3).
Item 14.    Principal Accounting Fees and Services
Our independent registered public accounting firm is KPMG LLP, Boston, MA, Auditor Firm ID: 185
Information required by Item 14 shall be included in an amendment to this Annual Report on Form 10-K filed in accordance with General Instructions G(3).
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PART IV
Item 15.    Exhibits, Financial Statement Schedules
(a)
Financial Statements
All financial statements are included in Item 8 of Part II of this Annual Report on Form 10-K.
(2)
Financial Statement Schedules
All financial statement schedules have been omitted because they are not required, not applicable or are included in the consolidated financial
statements or related notes.
(3)
Exhibits
The exhibits listed in paragraph (b) below are filed herewith or incorporated herein by reference to other filings.
(b)
Exhibits
EXHIBIT INDEX
Exhibit
Description
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. (incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K filed on December 16,
2024).
3.1 
Certificate of Incorporation of Brookline Bancorp, Inc.
3.2 
Amended and Restated Bylaws of Brookline Bancorp, Inc. (incorporated by reference to Exhibit 3.02 of the Company's Current Report on
Form 8-K filed on January 10, 2013)
4 
Form of Common Stock Certificate of the Company (incorporated by reference to Exhibit 4 of the Registration Statement on Form S-1 filed by
the Company on April 10, 2002 (Registration No. 333-85980))
4.1
Subordinated Indenture, dated as of September 16, 2014, between Brookline Bancorp, Inc. and U.S. Bank National Association, as Trustee
(incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on September 17, 2014)
4.2
First Supplemental Indenture, dated as of September 16, 2014, between Brookline Bancorp, Inc. and U.S. Bank National Association, as
Trustee (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on September 17, 2014)
4.3
Form of Global Note to represent the 6.000% Fixed-to-Floating Rate Subordinated Notes due September 15, 2029 (contained in the First
Supplemental Indenture included as Exhibit 4.2)
4.4
Description of Registrant’s Securities
10.1+
Brookline Bancorp, Inc. Deferred Compensation Plan effective January 1, 2011, as amended and restated January 1, 2018
10.5+
Brookline Bancorp, Inc. 2021 Stock Option and Incentive Plan (incorporated by reference to the Company's Current Report on Form 8-K filed
on May 13, 2021.
10.5.1+
Form of Restricted Stock Award Agreement under the Brookline Bancorp, Inc. 2021 Stock Option and Incentive Plan (incorporated by
reference to Exhibit 10.2 of the Company's Registration Statement on Form S-8).
10.6+
Employment Agreement, dated as of April 11, 2011, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A. Perrault (incorporated
by reference to Exhibit 10.10 of the Company's Current Report on Form 8-K filed on April 15, 2011)
10.6.1+
Amendment to the Employment Agreement, dated July 25, 2018, by and among the Brookline Bancorp, Inc., Brookline Bank and Paul Perrault.
10.6.2+
Second Amendment to the Employment Agreement, dated March 10, 2021, by and among Brookline Bancorp, Inc., Brookline Bank and Paul
A. Perrault (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on March 10, 2021).
10.6.3+
Third Amendment to the Employment Agreement, dated September 22, 2021, by and among Brookline Bancorp, Inc., Brookline Bank and Paul
A. Perrault.
10.6.4+
Fourth Amendment to the Employment Agreement, dated April 28, 2023, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A.
Perrault
10.6.5+
Fifth Amendment to Employment Agreement, dated as of December 16, 2024, by and among Brookline Bancorp, Inc., Brookline Bank and
Paul A. Perrault (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed on December 16, 2024).
72

Table of Contents
Exhibit
Description
10.8+
Employment Letter Agreement, dated as of April 19, 2011, by and between Brookline Bancorp, Inc. and Mark J. Meiklejohn (incorporated by
reference to Exhibit 10.3 of Pre-effective Amendment No. 2 of the Registration Statement on Form S-4 filed by the Company on July 25, 2011
(Registration Number 333-174731))
10.9+
Form of Amended Change in Control Agreement (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q
filed May 9, 2014)
10.12+
Employment Agreement, dated September 22, 2021, by and among Brookline Bancorp, Inc., Brookline Bank, Bank Rhode Island and Michael
W. McCurdy.
10.13+
 Employment Agreement, dated September 22, 2021, by and among Brookline Bancorp, Inc., Brookline Bank, Bank Rhode Island and Carl M.
Carlson.
10.14+
Employment Agreement, by and among Brookline Bancorp, Inc., PCSB Bank and Michael P. Goldrick, dated as of May 23, 2022 (incorporated
by reference to Exhibit 10.2 of Brookline Bancorp, Inc.’s Form S-4 filed by Brookline Bancorp, Inc. with the Securities and Exchange
Commission on June 27, 2022)
10.15+*
Retention Bonus Agreement, dated February 26, 2025, by and between Brookline Bancorp, Inc. and Carl M. Carlson.
10.16+*
Retention Bonus Agreement, dated February 26, 2025, by and between Brookline Bancorp, Inc. and Michael W. McCurdy.
10.17+*
Employment Agreement, dated February 26, 2025, by and among Berkshire Hills Bancorp, Inc., Brookline Bank, and Mark J. Meiklejohn.
19.1
Brookline Bancorp, Inc. Insider Trading Policy
21
Subsidiaries of the Registrant (incorporated by reference in Part I, Item 1. "Business—General" of this Annual Report on Form 10-K)
23*
Consent of Independent Registered Public Accounting Firm
31.1*
Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**
Rule 13a-14(b) Certifications of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**
Rule 13a-14(b) Certifications of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
97
Clawback Policy
101.INS
XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the
Inline XBRL document
101.SCH
XBRL Taxonomy Extension Schema Document
101.CAL
XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF
XBRL Taxonomy Extension Definition Linkbase Document
101.LAB
XBRL Taxonomy Extension Label Linkbase Document
101.PRE
XBRL Taxonomy Extension Presentation Linkbase Document
104
Cover Page Interactive Data File (formatted in Inline XBRL and included in Exhibit 101)
_______________________________________________________________________________
* Filed herewith
** Furnished herewith
+ Management contract or compensatory plan or agreement
(c)
Other Required Financial Statements and Schedules
Not applicable.
Item 16.    Form 10-K Summary
Not applicable.
73

Table of Contents
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.
Date: March 3, 2025
BROOKLINE BANCORP, INC.
By:
/s/ PAUL A. PERRAULT
Paul A. Perrault
 Chairman and 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.
By:
/s/ PAUL A. PERRAULT
By:
/s/ CARL M. CARLSON
Paul A. Perrault,
 Chairman and Chief Executive Officer
(Principal Executive Officer)
Carl M. Carlson,
 Co-President, Chief Financial and Strategy Officer
(Principal Financial Officer)
Date: March 3, 2025
Date: March 3, 2025
By:
/s/ MARGARET BOLES FITZGERALD
By:
/s/ BOGDAN NOWAK
Margaret Boles Fitzgerald,
 Director
Bogdan Nowak,
Director
Date: March 3, 2025
Date: March 3, 2025
By:
/s/ JOANNE CHANG
By:
/s/ JOHN M. PEREIRA
Joanne Chang,
 Director
John M. Pereira,
 Director
Date: March 3, 2025
Date: March 3, 2025
By:
/s/ WILLARD I. HILL, JR.
By:
/s/ MERRILL W. SHERMAN
Willard I. Hill, Jr.,
 Director
Merrill W. Sherman,
 Director
Date: March 3, 2025
Date: March 3, 2025
By:
/s/ THOMAS J. HOLLISTER
Thomas J. Hollister,
Lead Director
Date: March 3, 2025
74

Table of Contents
MANAGEMENT'S REPORT ON INTERNAL CONTROL
OVER FINANCIAL REPORTING
The management of Brookline Bancorp, Inc. is responsible for establishing and maintaining adequate internal control over financial reporting. Brookline
Bancorp, Inc.'s internal control system was designed to provide reasonable assurance to the Company's management and Board of Directors regarding the
preparation and fair presentation of published financial statements.
All internal control systems, no matter how well-designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only
reasonable assurance with respect to financial statement preparation and presentation.
Brookline Bancorp, Inc.'s management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2024. In making
this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated
Framework (2013). Based on our assessment, we believe that, as of December 31, 2024, the Company's internal control over financial reporting is effective based
on those criteria.
Brookline Bancorp, Inc.'s independent registered public accounting firm has issued an audit report on the effectiveness of the Company's internal control over
financial reporting. This report appears on page F-2.
/s/ PAUL A. PERRAULT
/s/ CARL M. CARLSON
Paul A. Perrault
Carl M. Carlson
Chairman and Chief Executive Officer
(Principal Executive Officer)
Co-President, Chief Financial and Strategy Officer
(Principal Financial Officer)
F-1

Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Brookline Bancorp, Inc.:
Opinion on Internal Control Over Financial Reporting
We have audited Brookline Bancorp, Inc. and subsidiaries' (the Company) 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. 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 the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance
sheets of the Company as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity,
and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively, the consolidated financial statements),
and our report dated March 3, 2025 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible 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 internal control over financial reporting based on our audit. We are a public accounting firm registered with the 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 audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. 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 audit also included performing such other procedures as we considered
necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
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.
                   /s/ KPMG LLP
Boston, Massachusetts
March 3, 2025
F-2

Table of Contents
Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Brookline Bancorp, Inc.:
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Brookline Bancorp, Inc. and subsidiaries (the Company) as of December 31, 2024 and 2023, the
related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period
ended December 31, 2024, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements 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 U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), 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, and our report dated March 3, 2025 expressed an unqualified opinion on the effectiveness of the
Company’s internal control over financial reporting.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits. We are a public accounting firm registered with the 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 audit to obtain reasonable assurance
about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to
assess the risks of material misstatement of the consolidated 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 consolidated 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 consolidated
financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated 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 consolidated financial statements and (2)
involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the
consolidated 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.
Assessment of the collective allowance for credit losses
As discussed in Notes 1 and Note 7 to the consolidated financial statements, the Company’s allowance for credit losses related to loans and leases and unfunded
commitments evaluated on a collective basis as of December 31, 2024 (the collective ACL) was $109.7 million, which consists of an allowance for loan and lease
losses evaluated on a collective basis of $103.7 million and a reserve for unfunded commitments, evaluated on a collective basis of $6.0 million. The collective ACL
is calculated using models developed by a third party, which include Commercial real estate lifetime, Commercial and industrial lifetime, and Retail lifetime models
(collectively, the lifetime loss rate models). Lifetime loss rate models calculate the expected losses over the life of the loan based on the exposure at default, loan
attributes and reasonable and supportable economic forecasts. The exposure at default considers the current unpaid balance, prepayment assumptions and utilization
of unfunded commitment assumptions. In order to capture the unique risk characteristics of the loan and lease portfolios, the lifetime loss rate models segment the
portfolios based on individual loan attributes and credit risk ratings for commercial loans. The economic forecasts include various projections of certain macro-
economic variables. The Company uses multiple economic forecasts, which are probability weighted. The collective ACL estimate incorporates reasonable and
supportable forecasts of various macro-economic variables over the remaining life of loans and leases. The development of the reasonable and supportable forecasts
assumes each macro-economic variable will revert to long-term expectations. The Company calibrates expected losses for each
F-3

Table of Contents
model using a scalar, which is determined by examining the loss rates of peer banks that have similar operations and asset bases to the Company and comparing
these peer group loss rates to the model results. In addition, adjustments are made to the quantitative model outputs for relevant qualitative factors.
We identified the assessment of the collective ACL as a critical audit matter. A high degree of audit effort, including specialized skills and knowledge, and
subjective and complex auditor judgment was involved in the assessment due to measurement uncertainty. Specifically, the assessment encompassed the evaluation
of the collective ACL methodology, including the methods and models used to estimate (1) the lifetime loss rates and their significant assumptions, including the
economic forecasts including the various projections of certain macro-economic variables, the related weighting of the economic forecasts, the scalar applied to
each model, utilization of unfunded commitments assumptions, and credit risk ratings for commercial loans, and (2) the qualitative factors and their significant
assumptions and inputs, including historic loss patterns and the impact of current portfolio metrics. The assessment also included an evaluation of the conceptual
soundness and performance of the models.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of
certain internal controls related to the Company’s measurement of the collective ACL estimates, including over the:
•
design of the collective ACL methodology
•
continued use of the lifetime loss rate models
•
identification and determination of the significant assumptions used in the lifetime loss rate models
•
performance monitoring of the lifetime loss rate models for the collective ACL
•
development of the qualitative factors, including the significant assumptions used in the measurement of the qualitative factors
•
analysis of the collective ACL results and trends.
We evaluated the Company’s process to develop the collective ACL estimate by testing certain sources of data and assumptions that the Company used and
considered the relevance and reliability of such data and assumptions. We also evaluated whether (1) the Company’s collective ACL methodology is in compliance
with U.S. generally accepted accounting principles, and (2) the methodology used to determine the utilization of unfunded commitments assumptions is
conceptually sound by comparing it to relevant Company specific metrics and trends and applicable industry practices. In addition, we involved credit risk
professionals with specialized skills and knowledge, who assisted in:
•
evaluating judgments made by the Company relative to the performance testing of the lifetime loss rate models by comparing them to relevant
Company-specific metrics and trends and the applicable industry and regulatory practices
•
testing the conceptual soundness and performance testing of the lifetime loss rate models by inspecting the model documentation to determine
whether the models are suitable for their intended use
•
evaluating the methodology utilized to incorporate reasonable and supportable forecast scenarios and related weightings used for each macro-
economic variable by comparing it to the Company’s business environment and relevant industry practices
•
assessing the composition of the peer group used in determining the scalar used to calibrate the model results by comparing to specific portfolio
risk characteristics
•
testing individual credit risk ratings for a selection of commercial loans by evaluating the financial performance of the borrower, sources of
repayment, and any relevant guarantees or underlying collateral
•
evaluating the methodology used to develop the qualitative factors and the effect of those factors on the collective ACL compared with relevant
credit risk factors and consistency with credit trends.
F-4

Table of Contents
                   /s/ KPMG LLP
We have served as the Company’s auditor since 2003.
Boston, Massachusetts
March 3, 2025
F-5

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
At December 31,
2024
2023
(In Thousands Except Share Data)
ASSETS
Cash and due from banks
$
64,673 
$
34,514 
Short-term investments
478,997 
98,513 
Total cash and cash equivalents
543,670 
133,027 
Investment securities available-for-sale
895,034 
916,601 
Total investment securities
895,034 
916,601 
Allowance for investment security losses
(82)
(441)
Net investment securities
894,952 
916,160 
Loans and leases:
Commercial real estate loans
5,716,114 
5,764,529 
Commercial loans and leases
2,506,664 
2,399,668 
Consumer loans
1,556,510 
1,477,392 
Total loans and leases
9,779,288 
9,641,589 
Allowance for loan and lease losses
(125,083)
(117,522)
Net loans and leases
9,654,205 
9,524,067 
Restricted equity securities
83,155 
77,595 
Premises and equipment, net of accumulated depreciation of $103,466 and $100,408, respectively
86,781 
89,853 
Right-of-use asset operating leases
43,527 
30,863 
Deferred tax asset
56,620 
56,952 
Goodwill
241,222 
241,222 
Identified intangible assets, net of accumulated amortization of $16,526 and $47,963, respectively
17,461 
24,207 
OREO and repossessed assets, net
1,103 
1,694 
Other assets
282,630 
286,616 
Total assets
$
11,905,326 
$
11,382,256 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
Deposits:
 
 
Non-interest-bearing deposits:
 
 
Demand checking accounts
$
1,692,394 
$
1,678,406 
Interest-bearing deposits:
 
 
NOW accounts
617,246 
661,863 
Savings accounts
1,721,247 
1,669,018 
Money market accounts
2,116,360 
2,082,810 
Certificate of deposit accounts
1,885,444 
1,574,855 
Brokered deposit accounts
868,953 
881,173 
Total interest-bearing deposits
7,209,250 
6,869,719 
Total deposits
8,901,644 
8,548,125 
Borrowed funds:
 
 
Advances from the FHLB
1,355,926 
1,223,226 
Subordinated debentures and notes
84,328 
84,188 
Other borrowed funds
79,592 
69,256 
Total borrowed funds
1,519,846 
1,376,670 
Operating lease liabilities
44,785 
31,998 
Mortgagors' escrow accounts
15,875 
17,239 
Reserve for unfunded credits
5,981 
19,767 
Accrued expenses and other liabilities
195,256 
189,813 
Total liabilities
10,683,387 
10,183,612 
Commitments and contingencies (Note 13)
Stockholders' Equity:
 
 
Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued and 96,998,075 shares issued, respectively
970 
970 
Additional paid-in capital
902,584 
902,659 
Retained earnings
458,943 
438,722 
Accumulated other comprehensive (loss) income
(52,882)
(52,798)
Treasury stock, at cost; 7,019,384 shares and 7,354,399 shares, respectively
(87,676)
(90,909)
Total stockholders' equity
1,221,939 
1,198,644 
Total liabilities and stockholders' equity
$
11,905,326 
$
11,382,256 
See accompanying notes to consolidated financial statements.
F-6

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
Year Ended December 31,
2024
2023
2022
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases
$
587,929 
$
533,739 
$
328,769 
Debt securities
26,252 
29,648 
13,079 
Restricted equity securities
5,786 
5,571 
1,898 
Short-term investments
8,554 
8,329 
1,440 
Total interest and dividend income
628,521 
577,287 
345,186 
Interest expense:
Deposits
232,963 
175,665 
29,592 
Borrowed funds
65,973 
61,911 
15,823 
Total interest expense
298,936 
237,576 
45,415 
Net interest income
329,585 
339,711 
299,771 
Provision for credit losses on loans
22,003 
37,868 
8,525 
(Credit) provision for credit losses on investments
(359)
339 
102 
Net interest income after provision for credit losses
307,941 
301,504 
291,144 
Non-interest income:
Deposit fees
10,548 
11,611 
10,919 
Loan fees
2,394 
2,036 
2,208 
Loan level derivative income, net
1,658 
3,890 
4,246 
Gain on sales of investment securities, net
— 
1,704 
321 
Gain on sales of loans and leases
951 
2,581 
4,136 
Other
10,064 
10,112 
6,517 
Total non-interest income
25,615 
31,934 
28,347 
Non-interest expense:
Compensation and employee benefits
143,723 
138,895 
113,487 
Occupancy
22,056 
20,203 
16,002 
Equipment and data processing
27,374 
27,004 
20,833 
Professional services
7,133 
7,226 
5,060 
FDIC insurance
8,044 
7,844 
3,177 
Advertising and marketing
5,240 
4,724 
4,980 
Amortization of identified intangible assets
6,746 
7,840 
494 
Merger and restructuring expense
4,201 
7,411 
2,249 
Other
17,348 
18,377 
13,260 
Total non-interest expense
241,865 
239,524 
179,542 
Income before provision for income taxes
91,691 
93,914 
139,949 
Provision for income taxes
22,976 
18,915 
30,205 
Net income
68,715 
74,999 
109,744 
Earnings per common share:
Basic
$
0.77 
$
0.85 
$
1.42 
Diluted
0.77 
0.85 
1.42 
Weighted average common shares outstanding during the year:
Basic
88,983,248 
88,230,681 
77,079,278 
Diluted
89,302,304 
88,450,646 
77,351,834 
Dividends declared per common share
$
0.540 
$
0.540 
$
0.530 
See accompanying notes to consolidated financial statements.
F-7

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income
Year Ended December 31,
2024
2023
2022
(In Thousands)
Net income
$
68,715 
$
74,999 
$
109,744 
Investment securities available-for-sale:
Unrealized securities holding gains (losses)
(1,704)
9,560 
(77,303)
Income tax (expense) benefit
532 
(1,913)
17,038 
Net unrealized securities holding gains (losses) before reclassification adjustments, net of
taxes
(1,172)
7,647 
(60,265)
Less reclassification adjustments for securities gains (losses) included in net income:
Gain (loss) on sales of securities, net
— 
— 
(327)
Income tax (expense) benefit
— 
— 
72 
Net reclassification adjustments for securities gains (losses) included in net income
— 
— 
(255)
Net unrealized securities holding gains (losses)
(1,172)
7,647 
(60,010)
Cash flow hedges:
Change in fair value of cash flow hedges
(3,620)
(2,829)
(2,899)
Reclassification adjustment for (income) expense recognized in earnings
— 
— 
(168)
Income tax (expense) benefit
876 
803 
788 
Net change in fair value of cash flow hedges, net of taxes
(2,744)
(2,026)
(2,279)
Less reclassification adjustment for change in fair value of cash flow hedges:
Gain (loss) on change in fair value of cash flow hedges
(4,036)
(3,632)
— 
Income tax (expense) benefit
1,034 
945 
— 
Net reclassification adjustment for change in fair value of cash flow hedges
(3,002)
(2,687)
— 
Net change in fair value of cash flow hedges
258 
$
661 
— 
Postretirement benefits:
Adjustment of accumulated obligation for postretirement benefits
1,127 
1,135 
611 
Income tax (expense) benefit
(297)
(294)
(159)
Net adjustment of accumulated obligation for postretirement benefits
830 
841 
452 
Other comprehensive gain (loss), net of taxes
(84)
9,149 
(61,837)
Comprehensive income
68,631 
84,148 
47,907 
See accompanying notes to consolidated financial statements.
F-8

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity
Year Ended December 31, 2024, 2023 and 2022
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Unallocated
Common Stock
Held by ESOP
Total Stockholders'
Equity
 
(In Thousands)
Balance at December 31, 2023
$
970 
$
902,659 
$
438,722 
$
(52,798)
$
(90,909)
$
— 
$
1,198,644 
Net income
— 
— 
68,715 
— 
— 
— 
68,715 
Other comprehensive income (loss)
— 
— 
— 
(84)
— 
— 
(84)
Common stock dividends of $0.540 per share
— 
— 
(48,058)
— 
— 
— 
(48,058)
Restricted stock awards, net of awards surrendered
— 
(3,891)
— 
— 
3,233 
— 
(658)
Compensation under recognition and retention plans
— 
3,816 
(436)
— 
— 
— 
3,380 
Balance at December 31, 2024
$
970 
$
902,584 
$
458,943 
$
(52,882)
$
(87,676)
$
— 
$
1,221,939 
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Unallocated
Common Stock
Held by ESOP
Total Stockholders'
Equity
 
(In Thousands)
Balance at December 31, 2022
$
852 
$
736,074 
$
412,019 
$
(61,947)
$
(94,873)
$
— 
$
992,125 
Net income
— 
— 
74,999 
— 
— 
— 
74,999 
PCSB acquisition
118 
167,212 
— 
— 
— 
— 
167,330 
Other comprehensive income (loss)
— 
— 
— 
9,149 
— 
— 
9,149 
Common stock dividends of $0.54 per share
— 
— 
(47,926)
— 
— 
— 
(47,926)
Restricted stock awards, net of awards surrendered
— 
(4,720)
— 
— 
3,964 
— 
(756)
Compensation under recognition and retention plans
— 
4,093 
(370)
— 
— 
— 
3,723 
Balance at December 31, 2023
$
970 
$
902,659 
$
438,722 
$
(52,798)
$
(90,909)
$
— 
$
1,198,644 
Common
Stock
Additional
Paid-in
Capital
Retained
Earnings
Accumulated
Other
Comprehensive
Income (Loss)
Treasury
Stock
Unallocated
Common Stock
Held by ESOP
Total Stockholders'
Equity
 
(In Thousands)
Balance at December 31, 2021
$
852 
$
736,826 
$
342,639 
$
(110)
$
(84,718)
$
(147)
$
995,342 
Net income
— 
— 
109,744 
— 
— 
— 
109,744 
Other comprehensive income (loss)
— 
— 
— 
(61,837)
— 
— 
(61,837)
Common stock dividends of $0.530 per share
— 
— 
(40,077)
— 
— 
— 
(40,077)
Restricted stock awards, net of awards surrendered
— 
(4,310)
— 
— 
3,625 
— 
(685)
Compensation under recognition and retention plans
— 
3,349 
(287)
— 
— 
— 
3,062 
Treasury stock, repurchase shares
— 
— 
— 
— 
(13,780)
— 
(13,780)
Common stock held by ESOP committed to be released (24,660
shares)
— 
209 
— 
— 
— 
147 
356 
Balance at December 31, 2022
$
852 
$
736,074 
$
412,019 
$
(61,947)
$
(94,873)
$
— 
$
992,125 
See accompanying notes to consolidated financial statements.
F-9

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Year Ended December 31,
2024
2023
2022
(In Thousands)
Cash flows from operating activities:
Net income
$
68,715 
$
74,999 
$
109,744 
Adjustments to reconcile net income to net cash provided from operating activities:
Provision for credit losses
21,644 
38,207 
8,627 
Deferred income tax expense
409 
16,167 
4,357 
Depreciation of premises and equipment
7,890 
8,159 
6,027 
(Accretion) amortization of investment securities deferred, net
(5,657)
(8,658)
1,631 
(Accretion) amortization of premiums and discounts
and deferred loan and lease origination costs, net
(6,682)
(4,708)
4,934 
Amortization of identified intangible assets
6,746 
7,840 
494 
Amortization of debt issuance costs
100 
100 
101 
Amortization (accretion) of acquisition fair value adjustments, net
1,313 
(1,611)
41 
Gain on investment securities, net
— 
(1,704)
(321)
Gain on sales of loans and leases
(951)
(2,581)
(4,136)
Loss on sales of OREO
— 
4 
— 
Write-down of OREO and other repossessed assets
574 
181 
178 
Compensation under recognition and retention plans
3,380 
3,723 
3,062 
ESOP shares committed to be released
— 
— 
356 
Net change in:
Cash surrender value of bank-owned life insurance
(2,017)
(1,269)
(1,025)
Other assets
6,590 
13,758 
(48,725)
Accrued expenses and other liabilities
2,900 
(26,010)
35,416 
Net cash provided from operating activities
104,954 
116,597 
120,761 
Cash flows from investing activities:
Proceeds from sales of investment securities available-for-sale
— 
229,981 
78,778 
Proceeds from maturities, calls, and principal repayments of investment securities available-
for-sale
173,996 
272,419 
98,572 
Purchases of investment securities available-for-sale
(148,476)
(362,905)
(197,632)
Proceeds from redemption/sales of restricted equity securities
32,834 
48,489 
29,923 
Purchase of restricted equity securities
(38,394)
(50,775)
(66,153)
Proceeds from sales of loans and leases held-for-investment, net
109,742 
244,133 
463,937 
Net increase in loans and leases
(265,919)
(955,593)
(959,561)
Acquisitions, net of cash and cash equivalents acquired
— 
(80,209)
— 
Purchase of premises and equipment, net
(4,985)
(12,357)
(7,388)
Proceeds from sales of OREO and other repossessed assets
1,599 
1,552 
1,831 
Net cash used for investing activities
(139,603)
(665,265)
(557,693)
(Continued)
See accompanying notes to consolidated financial statements.
F-10

Table of Contents
Year Ended December 31,
2024
2023
2022
(In Thousands)
Cash flows from financing activities:
Increase (decrease) in demand checking, NOW, savings and money market accounts
5,424 
(402,552)
(532,446)
Increase in certificates of deposit and brokered certificates of deposit
347,057 
859,866 
4,686 
Proceeds from FHLB advances
1,643,100 
6,155,000 
8,608,609 
Repayment of FHLB advances
(1,510,516)
(6,222,735)
(7,518,693)
Increase (decrease) in other borrowed funds, net
10,336 
(41,529)
(14,732)
Decrease in mortgagors' escrow accounts, net
(1,364)
(678)
(689)
Repurchases of common stock
— 
— 
(13,780)
Payment of dividends on common stock
(48,058)
(47,926)
(40,077)
Payment of income taxes for shares withheld in share based activity
(687)
(710)
(724)
Net cash provided from financing activities
445,292 
298,736 
492,154 
Net increase (decrease) in cash and cash equivalents
410,643 
(249,932)
55,222 
Cash and cash equivalents at beginning of year
133,027 
382,959 
327,737 
Cash and cash equivalents at end of year
$
543,670 
$
133,027 
$
382,959 
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest on deposits, borrowed funds and subordinated debt
$
291,428 
$
238,396 
$
41,040 
Income taxes
13,085 
8,632 
22,554 
Non-cash investing activities:
Transfer from loans to other real estate owned and other repossessed assets
$
1,582 
$
3,023 
$
1,699 
Acquisition of PCSB Financial Corporation
Fair value of assets acquired, net of cash and cash equivalents acquired
$
— 
$
1,931,528 
$
— 
Fair value of liabilities assumed
— 
1,676,110 
— 
Common stock issued
— 
118 
— 
See accompanying notes to consolidated financial statements.
F-11

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(1) Basis of Presentation
Overview
The Company is a bank holding company (within the meaning of the Bank Holding Company Act of 1956, as amended) and the parent of Brookline Bank, a
Massachusetts-chartered trust company, BankRI, a Rhode Island-chartered financial institution, and PCSB Bank, a New York-chartered commercial bank. The
Banks are all members of the Federal Reserve System. The Company is also the parent of Clarendon Private. The Company's primary business is to provide
commercial, business and retail banking services to its corporate, municipal and retail customers through the Banks and its non-bank subsidiaries. Brookline
Securities Corp., previously a subsidiary of the Company was dissolved in November 2023.
Brookline Bank, which includes its wholly-owned subsidiaries Longwood Securities Corp., Eastern Funding and First Ipswich Insurance Agency, operates 27
full-service banking offices in the Greater Boston metropolitan area with three additional lending offices. BankRI, which includes its wholly-owned subsidiaries,
Acorn Insurance Agency, BRI Realty Corp., BRI Investment Corp. and its wholly-owned subsidiary, BRI MSC Corp., operates 22 full-service banking offices in the
Greater Providence, Rhode Island area. PCSB Bank, which includes its wholly-owned subsidiary, UpCounty Realty Corp., operates 14 full-service banking offices
in the Lower Hudson Valley of New York. Clarendon Private is a registered investment advisor with the SEC. Through Clarendon Private, the Company offers a
wide range of wealth management services to individuals, families, endowments and foundations to help these clients meet their long-term financial goals.
The Company's activities include acceptance of commercial, municipal and retail deposits, origination of mortgage loans on commercial and residential real
estate located principally in Central New England and the Lower Hudson Valley of New York, origination of commercial loans and leases to small- and mid-sized
businesses, investment in debt and equity securities, and the offering of cash management and wealth and investment advisory services. The Company also provides
specialty equipment financing through its subsidiary Eastern Funding, which is based in New York City, New York, and Plainview, New York.
The Company and the Banks are supervised, examined and regulated by the FRB. As a Massachusetts-chartered trust company, Brookline Bank is also subject
to supervision, examination and regulation by Massachusetts Division of Banks. As a Rhode Island-chartered financial institution, BankRI is subject to regulation,
examination and regulation by the Banking Division of the Rhode Island Department of Business Regulation. As a New York chartered commercial bank, PCSB
Bank is subject to supervision, examination and regulation by the New York State Department of Financial Services. Clarendon Private is also subject to regulation
by the SEC.
The FDIC offers insurance coverage on all deposits up to $250,000 per depositor at each of the Banks. As FDIC-insured depository institutions, the Banks are
also secondarily subject to supervision, examination and regulation by the FDIC.
Basis of Financial Statement Presentation
The Company's consolidated financial statements have been prepared in conformity with U.S. GAAP as set forth by the FASB in its Accounting Standards
Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws.
The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and
balances are eliminated in consolidation.
In preparing these consolidated financial statements, management is required to make significant estimates and assumptions that affect the reported amounts
of assets, liabilities, income, expenses and disclosure of assets and liabilities. Actual results could differ from those estimates based upon changing conditions,
including economic conditions and future events. Material estimates that are particularly susceptible to significant changes in the near-term include the
determination of the ACL and the determination of fair market values of assets and liabilities.
The judgments used by management in applying these significant estimates may be affected by a further and prolonged deterioration in the economic
environment, which may result in changes to future financial results. For example, subsequent evaluations of the loan and lease portfolio, in light of the factors then
prevailing, may result in significant changes in the allowance for loan and lease losses in future periods, and the inability to collect outstanding principal may result
in increased loan and lease losses.
F-12

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Cash and Cash Equivalents
For purposes of reporting asset balances and cash flows, cash and cash equivalents includes cash on hand and due from banks (including cash items in process
of clearing), interest-bearing deposits with banks, federal funds sold, money market mutual funds and other short-term investments with original maturities of three
months or less. Cash and cash equivalents are held at major institutions and are subject to credit risk to the extent those balances exceed applicable FDIC or
Securities Investor Protection Corporation limitations.
Investment Securities
Investment securities, other than those reported as short-term investments, are classified at the time of purchase as "available-for-sale," "held-to-maturity," or
"held-for-trading." Classification is periodically re-evaluated for consistency with the Company's goals and objectives. Equity investments in the FHLB of Boston,
the FHLB of New York, the Federal Reserve Bank of Boston, the Federal Reserve Bank of New York, and other restricted equities are discussed in more detail in
Note 5, "Restricted Equity Securities."
Investment Securities Available-for-Sale, Held-to-Maturity, and Held-for-Trading
Investment securities for which the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and carried at amortized
cost. As of December 31, 2024 and 2023, the Company did not hold any securities as held-to-maturity. Those investment securities held for indefinite periods of
time but not necessarily to maturity are classified as available-for-sale. Investment securities held for indefinite periods of time include investment securities that
management intends to use as part of its asset/liability, liquidity, and/or capital management strategies and may be sold in response to changes in interest rates,
maturities, asset/liability mix, liquidity needs, regulatory capital needs or other business factors. Investment securities available-for-sale are carried at estimated fair
value, primarily obtained from a third-party pricing service, with unrealized gains and losses reported on an after-tax basis in stockholders' equity as accumulated
other comprehensive income or loss. Investment securities expected to be held for very short term duration, used for hedging, or are marketable equity securities are
typically designated held-for-trading. Held-for-trading securities are carried at estimated fair value principally based on market prices and dealer quotes received
from third-party and nationally-recognized pricing services. Gains and losses for held-for-trading are reported on the income statement as gains on investment
securities, net. As of December 31, 2024 and 2023, the Company did not hold any securities as held-for-trading. As of December 31, 2024 and 2023, the Company
did not make any adjustments to the prices provided by the third-party pricing service.
Security transactions are recorded on the trade date. Realized gains and losses are determined using the specific identification method and are recorded in
non-interest income. Interest and dividends on securities are recorded using the accrual method. Premiums and discounts on securities are amortized or accreted into
interest income using the level-yield method over the remaining period to contractual maturity, adjusted for the effect of actual prepayments in the case of MBSs
and CMOs. These estimates of prepayment assumptions are made based upon the actual performance of the underlying security, current interest rates, the general
market consensus regarding changes in mortgage interest rates, the contractual repayment terms of the underlying loans, the priority rights of the investors to the
cash flows from the mortgage securities and other economic conditions. When differences arise between anticipated prepayments and actual prepayments, the
effective yield is recalculated to reflect actual payments to date and anticipated future payments. Unamortized premium or discount is adjusted to the amount that
would have existed had the new effective yield been applied since purchase, with a corresponding charge or credit to interest income.
Restricted Equity Securities
The Company invests in the stock of the FHLB of Boston, the FHLB of New York, the Federal Reserve Bank of Boston and the Federal Reserve Bank of New
York, and a small amount of other restricted securities. No ready market exists for these stocks, and they have no quoted market values. The Banks, as members of
the FHLB, are required to maintain investments in the capital stock of the FHLB equal to their membership base investments plus an activity-based investment
determined according to the Banks' level of outstanding FHLB advances. The Company has also purchased Federal Reserve Bank of Boston and Federal Reserve
Bank of New York stock which is redeemable at par. The Company reviews for impairment of these securities based on the ultimate recoverability of the cost basis
in the stock. As of December 31, 2024 and 2023, no impairment has been recognized.
F-13

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Loans
Loans and Leases Held-to-Maturity
Loans the Company originates for the portfolio, and for which it has the intent and ability to hold to maturity, are reported at amortized cost, inclusive of
deferred loan origination fees and expenses, less unadvanced funds due to borrowers on loans and the allowance for loan and lease losses.
Interest income on loans and leases originated for the portfolio is accrued on unpaid principal balances as earned. Loan origination fees and direct loan
origination costs are deferred, and the net fee or cost is recognized in interest income using the interest method. Deferred amounts are recognized for fixed-rate
loans over the contractual life of the loans and for adjustable-rate loans over the period of time required to adjust the contractual interest rate to a yield
approximating a market rate at the origination date. If a loan is prepaid, the unamortized portion of the loan origination costs, including third party referral related
costs not subject to rebate from the dealer, is charged to income.
Loans and Leases Held-for-Sale
Management identifies and designates certain newly originated loans and leases for sale to specific financial institutions, subject to the underwriting criteria of
those financial institutions. These loans and leases are held for sale and are carried at the lower of cost or market as determined in the aggregate. Deferred loan fees
and costs are included in the determination of the gain or loss on sale. The Company had no loans and leases held-for-sale as of December 31, 2024 and 2023.
Nonperforming Loans
Nonaccrual Loans
Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's
judgment, reasonable doubt exists as to the full timely collection of interest. Exceptions may be made if the loan has matured and is in the process of renewal or is
well-secured and in the process of collection. When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and
charged against current interest income. Interest payments on nonaccrual loans are generally applied to principal. If collection of the principal is reasonably assured,
interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when principal and interest payments are current, full
collectability of principal and interest is reasonably assured and a consistent record of at least six consecutive months of performance has been achieved.
Impaired Loans
A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due
(both interest and principal) according to the contractual terms of the loan agreement. Smaller-balance, homogeneous loans that are evaluated collectively for
impairment, such as residential, home equity and other consumer loans are specifically excluded from the impaired loan portfolio. The Company has defined the
population of impaired loans to include nonaccrual loans.
When the ultimate collectability of the total principal of an impaired loan or lease is in doubt and the loan is on nonaccrual status, all payments are applied to
principal, under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan or lease is not in doubt and the loan or lease is
on nonaccrual status, contractual interest is credited to interest income when received, under the cash basis method.
The value of an impaired loan is measured based upon the present value of expected future cash flows discounted at the loan's effective interest rate, or the
fair value of the collateral if the loan is collateral-dependent and its payment is expected solely based on the underlying collateral. For impaired loans deemed
collateral dependent, where impairment is measured using the fair value of the collateral, the Company will either obtain a new appraisal or use another available
source of collateral assessment to determine a reasonable estimate of the fair value of the collateral.
Interest collected on impaired loans is either applied against principal or reported as income according to management's judgment as to the collectability of
principal. If management does not consider a loan ultimately collectible within an acceptable time frame, payments are applied as principal to reduce the loan
balance. If full collection of the remaining recorded investment should subsequently occur, interest receipts are recorded as interest income on a cash basis.
F-14

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Loan Modifications
In determining whether a debtor is experiencing financial difficulties, the Company considers, among other factors, whether the debtor is in payment default or
is likely to be in payment default in the foreseeable future without the modification, if the debtor declared or is in the process of declaring bankruptcy, there is
substantial doubt that the debtor will continue as a going concern, the debtor's entity-specific projected cash flows will not be sufficient to service its debt, if the
debtor has securities that have been delisted or are in the process of being delisted, or the debtor cannot obtain funds from sources other than the existing creditors at
market terms for debt with similar risk characteristics.
Disclosable modifications under current guidance include principal forgiveness, interest rate reductions, significant payment delays, maturity extensions, or
any combination of the aforementioned modifications. The Company tracks and discloses the performance of these modifications with respect to delinquency and
re-modification status.
The current guidance also eliminates the requirement to measure the allowance using a DCF methodology, and allows for a portfolio-based methodology for
modified loans to troubled borrowers. If the DCF approach is still utilized for individually evaluated loans, the discount rate used must be the modified effective
interest rate, rather than the original effective interest rate. Typically, modified loans to troubled borrowers are Substandard credits and are already evaluated for
impairment on an individual basis.
Allowance for Credit Losses
Management has established a methodology to determine the adequacy of the allowance for credit losses that assesses the risks and losses expected on the loan
and lease portfolio and unfunded commitments. Additions to the allowance for credit losses are made by charges to the provision for credit losses. Losses on loans
and leases are charged off against the allowance when all or a portion of a loan or lease is considered uncollectible. Subsequent recoveries on loans previously
charged off, if any, are credited to the allowance when realized.
To calculate the allowance for loans collectively evaluated, management uses models developed by a third party. The CRE, C&I, and Retail lifetime loss rate
models calculate the expected losses over the life of the loan based on exposure at default loan attributes and reasonable, supportable economic forecasts. The
exposure at default considers the current unpaid balance, prepayment assumptions and utilization of expected utilization assumptions. The expected loss estimates
for two small commercial portfolios are based on historical loss rates.
Key assumptions used in the models include portfolio segmentation, prepayments, the expected utilization of unfunded commitments, risk rating and a scalar,
among others. The portfolios are segmented by loan level attributes such as loan type, loan size, date of origination, and delinquency status to create homogenous
loan pools. Pool level metrics are calculated and loss rates are subsequently applied to the pools as the loans have like characteristics. Prepayment assumptions are
embedded within the models and are based on the same data used for model development and incorporate adjustments for reasonable and supportable forecasts.
Model development data and developmental time periods vary by model, but all use at least ten years of historical data and capture at least one recessionary period.
Expected utilization is based on current utilization and a LEQ factor. LEQ varies by current utilization and provides a reasonable estimate of expected draws and
borrower behavior. Assumptions and model inputs are reviewed in accordance with model monitoring practices and as information becomes available.
Historical loss rate models apply a loss rate to the outstanding balance of the loan. Management uses historical loss rates for condominium association and
government lease portfolio segments because these loans have distinct, historical, or expected loss patterns and a de minimus effect on the overall allowance and
provision.
Management elected to use multiple economic forecasts in determining the reserve to account for economic uncertainty. The forecasts include various
projections of GDP, interest rates, property price indices, and employment measures. The forecasts are probability-weighted based on available information at the
time of the calculation execution. Scenario weighting and model parameters are reviewed for each calculation and are subject to change. The models recognize that
the life of a loan may exceed the economic forecast, therefore, the models employ mean reversion techniques at the input level to predict credit losses for loans that
are expected to mature beyond the forecast period. The forecasts utilized at December 31, 2024 reflect the immediate and longer-term effects of a higher interest rate
environment relative to the past cycle and the corresponding impacts on employment, GDP growth, and real estate indices.
F-15

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The CRE lifetime loss rate, C&I lifetime loss rate, and Retail lifetime loss rate models were developed using the historical loss experience of all banks in the
model’s developmental dataset. Banks in the model’s developmental dataset may have different loss experiences due to geography and portfolio as well as variances
in operational and underwriting procedures from the Company, and therefore, the Company calibrates expected losses using a scalar for each model. Each scalar
was calculated by examining the loss rates of peer banks that have similar operations and asset bases to the Company and comparing these peer group loss rates to
the model results. Peer group loss rates were used in the scalar calculation because management believes the peer group’s historical losses provide a better reflection
of the Company’s current portfolio and operating procedures than the Company’s historical losses. Qualitative adjustments are also applied to select segments of the
loan portfolio where applicable.
For December 31, 2024, management applied qualitative adjustments based on historical loss patterns, current loan and portfolio metrics, and expert judgment
based on professional experience. These qualitative adjustments result in additions to reserves as compared to the model output. These adjustments included an
adjustment to the economic scenario weighting slightly towards a recessionary environment, as well as specific risks including: office, interest rate risk on maturing
and refinancing loans, non-speculative construction relationships, non-recourse C&I relationships, and higher than average loss severity rates on certain specialty
lending segments.
Specific reserves are established for loans individually evaluated for impairment when amortized cost basis is greater than the discounted present value of
expected future cash flows or, in the case of collateral-dependent loans, when there is an excess of a loan's amortized cost basis over the fair value of its underlying
collateral. When loans and leases do not share risk characteristics with other financial assets they are evaluated individually. Individually evaluated loans are
reviewed quarterly with adjustments made to the calculated reserve as necessary.
Liability for Unfunded Commitments
In the ordinary course of business, the Company enters into commitments to extend credit, commercial letters of credit, and standby letters of credit. Such
financial instruments are recorded in the financial statements when they become payable. The credit risk associated with these commitments is evaluated in a
manner similar to the allowance for loan and lease losses.
Premises and Equipment
Premises and equipment are carried at cost less accumulated depreciation and amortization, except for land which is carried at cost. Premises and equipment
are depreciated using the straight-line method over the estimated useful life of the assets. Leasehold improvements are amortized using the straight-line method over
the shorter of the lease term or the estimated useful life of the improvements.
Costs related to internal-use software development projects that provide significant new functionality are capitalized. Internal-use software is software
acquired or modified solely to meet the Company's needs and for which there is no plan to market the software externally. Direct and indirect costs associated with
the application development stage of internal use software are capitalized until such time that the software is substantially complete and ready for its intended use.
Capitalized costs are amortized on a straight-line basis over the remaining estimated life of the software. Computer software and development costs incurred in the
preliminary project stage, as well as training and maintenance costs, are expensed as incurred.
Leases
The Company leases certain office space under various noncancellable operating leases as well as certain other assets. These leases have terms ranging from 1
year to over 19 years. Certain leases contain renewal options and escalation clauses which can increase rental expenses based principally on the consumer price
index and fair market rental value provisions. Right-of-use lease assets are carried on the balance sheet at amortized cost and corresponding lease liabilities are
carried on the balance sheet at present value of the future minimum lease payments, adjusted for any initial direct costs and incentives. All of the Company's current
outstanding leases are classified as operating leases.
Bank-Owned Life Insurance
The Company acquired BOLI plans as part of its acquisitions of PCSB Bank, First Ipswich Bank and BankRI. BOLI represents life insurance on the lives of
certain current and former employees who have provided positive consent allowing their employer to be the beneficiary of such policies. BankRI, PCSB Bank and
Brookline Bank as successor in interest to First Ipswich Bank, are the beneficiaries of their respective policies. The Banks utilize BOLI as tax-efficient financing for
their benefit obligations to their employees, including their retirement obligations and SERPs.
F-16

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Since the Banks are the primary beneficiaries of their respective insurance policies, increases in the cash value of the policies, as well as insurance proceeds
received, are recorded in non-interest income and are not subject to income taxes. BOLI is recorded at the cash value of the policies, less any applicable cash
surrender charges, and is reflected as an asset in the accompanying consolidated balance sheets. Cash proceeds, if any, are classified as cash flows from investing
activities.
The Company reviews the financial strength of the insurance carriers prior to the purchase of BOLI to ensure minimum credit ratings of at least investment
grade. The financial strength of the carriers is reviewed at least annually, and BOLI with any individual carrier is limited to 10% of the Company's capital. Total
BOLI is limited to 25% of the Company's capital.
Goodwill and Other Identified Intangible Assets
Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill and indefinite-lived identified intangible
assets are not subject to amortization. Definite-lived identified intangible assets are assets resulting from acquisitions that are being amortized over their estimated
useful lives. The recoverability of goodwill and identified intangible assets is evaluated for impairment at least annually. A Company can perform a qualitative
assessment of whether it is more likely than not that the fair value of an acquired asset is greater than its carrying amount. If the Company qualitatively concludes
that it is more likely than not that the fair value of an acquired asset is greater than its carrying amount, no further testing is necessary. If, however, the Company
qualitatively concludes that the fair value of an acquired asset is less than its carrying value, or, if for any other reason the Company determines it to be appropriate,
then a quantitative assessment will be performed. If a quantitative analysis were performed, management would select a sample of comparable acquisitions and
calculate the control premium associated with each sale. The Company’s market capitalization would then be times by the sampled control premium allowing
management to compare the calculated fair value to the Company’s current book value to determine if an adjustment to goodwill is warranted. During 2024,
management performed a qualitative analysis which indicated that the Company did not have any impairment of Goodwill and no quantitative analysis was deemed
necessary. The Company did not have any impairment of goodwill and other identified intangible assets as of December 31, 2024 and 2023. Further analysis of the
Company’s goodwill can be found in Note 9 “Goodwill and Other Intangible Assets” within notes to the consolidated financial statements.
OREO and Other Repossessed Assets
OREO and other repossessed assets consists of properties acquired through foreclosure, real estate acquired through acceptance of a deed in lieu of
foreclosure and loans determined to be substantively repossessed. Real estate loans that are substantively repossessed include only those loans for which the
Company has taken possession of the collateral. OREO and other repossessed assets which consist of vehicles and equipment, if any, are recorded initially at
estimated fair value less costs to sell, resulting in a new cost basis. The amount by which the recorded investment in the loan exceeds the fair value (net of estimated
cost to sell) of the foreclosed or repossessed asset is charged to the allowance for loan and lease losses. Such evaluations are based on an analysis of individual
properties/assets as well as a general assessment of current real estate market conditions. Subsequent declines in the fair value of the foreclosed or repossessed asset
below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value are recorded as reductions in the allowance,
but not below zero. Rental revenue received on foreclosed or repossessed assets is included in other non-interest income, whereas operating expenses and changes
in the valuation allowance relating to foreclosed and repossessed assets are included in other non-interest expense. Certain costs used to improve such properties are
capitalized. Gains and losses from the sale of OREO and other repossessed assets are reflected in non-interest expense when realized. Together with nonperforming
loans, OREO and repossessed assets comprise nonperforming assets.
Derivatives
The Company utilizes loan level derivatives which consists of interest rate contracts (swaps, caps and floors), and risk participation agreements as part of the
Company's interest-rate risk management strategy for certain assets and liabilities and not for speculative purposes. Based on the Company's intended use for the
loan level derivatives at inception, the Company designates the derivative as either an economic hedge of an asset or liability, or a hedging instrument subject to the
hedge accounting provisions of FASB ASC Topic 815, "Derivatives and Hedging". These derivatives designated as cash flow hedges involve the receipt of fixed
rate amounts from a counterparty in exchange for the Company making variable rate payments.
Loan level derivatives and foreign exchange contracts entered into on behalf of our customers are designated as economic hedges and are recorded at fair
value within other assets or liabilities. Changes in the fair value of these non hedging derivatives are recorded directly through earnings at each reporting period.
F-17

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Transfer of Financial Assets
Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be
surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage
of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement
to repurchase them before their maturity.
Employee Benefits
Costs related to the Company's 401(k) plan are recognized in current earnings. Costs related to the Company's nonqualified deferred compensation plan,
SERPs and postretirement benefits are recognized over the vesting period or the related service periods of the participating employees. Changes in the funded status
of postretirement benefits and defined pension plans are recognized through comprehensive income in the year in which changes occur.
The fair value of restricted stock awards and stock option grants are determined as of the grant date and are recorded as compensation expense over the period
in which the shares of restricted stock awards and stock options vest. Forfeitures are accounted for as they occur.
Fair Value Measurements
ASC 820-10, "Fair Value Measurements and Disclosures," defines fair value as the price that would be received to sell an asset or paid to transfer a liability in
an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the
principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal
(or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that
assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving
such assets and liabilities. It is not a forced transaction. Market participants are buyers and sellers in the principal market that are independent, knowledgeable, able
to transact, and willing to transact.
A fair-value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest
priority to unobservable inputs are included in ASC 820. The fair value hierarchy is as follows:
Level 1: Inputs are unadjusted quoted prices in active markets for assets and liabilities identical to those reported at fair value.
Level 2: Inputs other than quoted prices included within Level 1. Level 2 inputs are observable either directly or indirectly. These inputs might include quoted
prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that
are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or
corroborated by market data by correlation or other means.
Level 3: Inputs are unobservable inputs for an asset or liability that reflect an entity's own assumptions about the assumptions that market participants would
use in pricing the assets or liabilities. These inputs are used to determine fair value only when observable inputs are not available.
Earnings per Common Share
EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding for the applicable period, exclusive of
Treasury shares and unvested shares of restricted stock. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all
potential dilutive common shares outstanding during the period. The dilutive effects of options and unvested restricted stock awards are computed using the
"treasury stock" method. Management evaluated the "two class" method and concluded that the method did not apply to the Company's EPS calculation.
Income Taxes
Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.
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BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences
are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the
enactment date.
Tax positions that are more likely than not to be sustained upon a tax examination are recognized in the Company's financial statements to the extent that the
benefit is greater than 50% likely of being recognized. Interest resulting from underpayment of income taxes is classified as income tax expense in the first period
the interest would begin accruing according to the provision of the relevant tax law. Penalties resulting from underpayment of income taxes are classified as income
tax expense in the period for which the Company claims or expects to claim an uncertain tax position or in the period in which the Company's judgment changes
regarding an uncertain tax position.
For new ITCs, the Company chose to apply the flow-through method and immediately recognize the ITC benefit in income tax expense, as opposed to
deferring.
Business Combinations
Business combinations are generally accounted for under the acquisition method of accounting whereby assets acquired and liabilities assumed in business
combinations are recorded at their estimated fair value as of the acquisition date. The determination of fair value may involve the use of internal or third-party
valuation specialists to assist in the determination of the fair value of certain assets and liabilities at the acquisition date, including loans and leases, core deposit
intangibles and time deposits. The excess of the cost of acquisition over these fair values is recognized as goodwill.
Treasury Stock
Any shares repurchased under the Company's share repurchase programs were purchased in open-market transactions and are held as treasury stock. Treasury
stock also consists of common stock withheld to satisfy federal, state and local income tax withholding requirements for employee restricted stock awards upon
vesting. All treasury stock is held at cost.
Segment Reporting
An operating segment is defined as a component of a business for which separate financial information is available that is evaluated regularly by the CODM
in deciding how to allocate resources and evaluate performance. The Company is a bank holding company with subsidiaries engaged in the business of banking and
activities closely related to banking. The Company's banking business provided substantially all of its total revenues and pre-tax income in 2024, 2023 and 2022.
Therefore, the Company has determined to be a single segment.
(2) Recent Accounting Pronouncements
Accounting Standards Adopted in 2024, 2023 and 2022
In October 2021, the FASB issued ASU 2021-08, "Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from
Contracts with Customers" which requires that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in
accordance with Topic 606, Revenue from Contracts with Customers. At the acquisition date, an acquirer should account for the related revenue contracts in
accordance with Topic 606 as if it had originated the contracts. The Company adopted ASU 2021-08 as of January 1, 2023 on a prospective basis. The adoption did
not have a material impact on the Company's consolidated financial statements.
In March 2022, the FASB issued ASU 2022-02, "Financial Instruments - Credit Losses (Topic 326), Troubled Debt Restructurings and Vintage Disclosures"
which addresses concerns regarding the complex accounting for loans modified as troubled debt restructurings and also the disclosure of gross writeoff information
included in required vintage disclosures. The Company adopted ASU 2022-02 as of January 1, 2023. The enhanced disclosure requirements provided for by ASU
2022-02 were adopted on a prospective basis. Reporting periods prior to the adoption of ASU 2022-02 are presented in accordance with the applicable GAAP. The
adoption did not have a material impact on the Company’s consolidated financial statements.
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
In November 2023, the FASB issued ASU 2023-07, "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures" which improves
reportable segment disclosure requirements, particularly regarding a reportable segment’s expenses. This update is effective for fiscal years beginning after
December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted ASU 2023-07 as of January 1, 2024. The
adoption did not have a material impact on the Company's consolidated financial statements and continues to operate as one reportable segment.
(3) Cash, Cash Equivalents and Short-Term Investments
Aggregate reserve balances included in cash and cash equivalents were $480.9 million and $110.9 million, respectively, as of December 31, 2024 and 2023.
Short-term investments are summarized as follows:
 
At December 31,
 
2024
2023
 
(In Thousands)
FRB interest bearing reserve
$
470,706 
$
86,864 
FHLB overnight deposits
8,291 
11,649 
Total short-term investments
$
478,997 
$
98,513 
Short-term investments are stated at cost which approximates market value.
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(4) Investment Securities
The following tables set forth investment securities available-for-sale at the dates indicated:
 
At December 31, 2024
 
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
 
(In Thousands)
Investment securities available-for-sale:
GSE debentures
$
195,099 
$
225 
$
19,030 
$
176,294 
GSE CMOs
62,567 
4 
7,028 
55,543 
GSE MBSs
166,843 
63 
18,621 
148,285 
Municipal obligations
20,526 
19 
291 
20,254 
Corporate debt obligations
12,140 
225
78 
12,287 
U.S. Treasury bonds
506,714 
331 
25,173 
481,872 
Foreign government obligations
500 
— 
1 
499 
Total investment securities available-for-sale
$
964,389 
$
867 
$
70,222 
$
895,034 
 
At December 31, 2023
 
Amortized
Cost
Gross
Unrealized
Gains
Gross
Unrealized
Losses
Estimated
Fair Value
 
(In Thousands)
Investment securities available-for-sale:
GSE debentures
$
220,604 
$
517 
$
19,994 
$
201,127 
GSE CMOs
66,463 
33 
4,879 
61,617 
GSE MBSs
186,614 
62 
16,679 
169,997 
Municipal obligations
18,785 
184 
47 
18,922 
Corporate debt obligations
20,521 
82 
887 
19,716 
U.S. Treasury bonds
470,764 
423 
26,450 
444,737 
Foreign government obligations
500 
— 
15 
485 
Total investment securities available-for-sale
$
984,251 
$
1,301 
$
68,951 
$
916,601 
As of December 31, 2024, the fair value of all investment securities available-for-sale was $895.0 million, with net unrealized losses of $69.4 million,
compared to a fair value of $916.6 million and net unrealized losses of $67.7 million as of December 31, 2023. As of December 31, 2024, $705.3 million, or 78.8%
of the portfolio, had gross unrealized losses of $70.2 million, compared to $717.2 million, or 77.8% of the portfolio, with gross unrealized losses of $69.0 million as
of December 31, 2023.
As of December 31, 2024 and 2023, the Company did not hold any securities as held to maturity; all securities were held as available-for-sale.
Investment Securities as Collateral
As of December 31, 2024 and 2023, respectively, $792.0 million and $791.2 million of investment securities were pledged as collateral for repurchase
agreements; municipal deposits; treasury, tax and loan deposits ("TT&L"); swap agreements; Federal Reserve Bank borrowings; and FHLB of Boston and FHLB of
New York borrowings. The Banks did not have any outstanding Federal Reserve Bank borrowings as of December 31, 2024 and 2023.
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Allowance for Credit Losses-Available-for-Sale Securities
For available-for-sale securities in an unrealized loss position, management first assesses whether (i) the Company intends to sell the security, or (ii) it is more
likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either criterion is met, any previously recognized
allowances are charged-off and the security's amortized cost is written down to fair value through income. If neither criterion is met, the security is evaluated to
determine whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which
fair value is less than amortized cost, any changes to the rating of the security by a rating agency and any 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 is 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, an allowance for credit loss is recorded,
limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an ACL is recognized in other
comprehensive income. Adjustments to the allowance are reported as a component of credit loss expense. Available-for-sale securities are charged-off against the
allowance or, in the absence of any allowance, written down through income when deemed uncollectible or when either of the aforementioned criteria regarding
intent or requirement to sell is met. The Company has made the accounting policy election to exclude accrued interest receivable on available-for-sale securities
from the estimate of credit losses. Accrued interest receivables associated with debt securities available-for-sale totaled $4.1 million, respectively, as of
December 31, 2024 and 2023.
A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of
interest or principal becomes uncertain. Accrued interest for a debt security placed on nonaccrual is reversed against interest income. There were no debt securities
on nonaccrual status and therefore there was no accrued interest related to debt securities reversed against interest income for the years ended December 31,
2024 and 2023.
Assessment for Available-for-Sale Securities for Impairment
Investment securities as of December 31, 2024 and 2023 that have been in a continuous unrealized loss position for less than twelve months or twelve months
or longer are as follows:
 
At December 31, 2024
 
Less than
Twelve Months
Twelve Months
or Longer
Total
 
Estimated
Fair Value
Unrealized
Losses
Estimated
Fair Value
Unrealized
Losses
Estimated
Fair Value
Unrealized
Losses
 
(In Thousands)
Investment securities available-for-sale:
 
 
 
 
 
 
GSE debentures
$
30,753 
$
281 
$
107,750 
$
18,749 
$
138,503 
$
19,030 
GSE CMOs
4,664 
107 
50,334 
6,921 
54,998 
7,028 
GSE MBSs
11,128 
596 
131,481 
18,025 
142,609 
18,621 
Municipal obligations
3,616 
74 
3,568 
217 
7,184 
291 
Corporate debt obligations
— 
— 
2,550 
78 
2,550 
78 
U.S. Treasury bonds
67,290 
285 
291,641 
24,888 
358,931 
25,173 
Foreign government obligations
— 
— 
499 
1 
499 
1 
Temporarily impaired investment securities available-
for-sale
117,451 
1,343 
587,823 
68,879 
705,274 
70,222 
Total temporarily impaired investment securities
$
117,451 
$
1,343 
$
587,823 
$
68,879 
$
705,274 
$
70,222 
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
 
At December 31, 2023
 
Less than
Twelve Months
Twelve Months
or Longer
Total
 
Estimated
Fair Value
Unrealized
Losses
Estimated
Fair Value
Unrealized
Losses
Estimated
Fair Value
Unrealized
Losses
 
(In Thousands)
Investment securities available-for-sale:
 
 
 
 
 
 
GSE debentures
$
10,964 
$
12 
$
121,993 
$
19,982 
$
132,957 
$
19,994 
GSE CMOs
42,057 
3,547 
14,571 
1,332 
56,628 
4,879 
GSE MBSs
34,317 
561 
122,367 
16,118 
156,684 
16,679 
Municipal obligations
3,859 
47 
— 
— 
3,859 
47 
Corporate debt obligations
10,911 
810 
6,427 
77 
17,338 
887 
U.S. Treasury bonds
117,132 
676 
232,074 
25,774 
349,206 
26,450 
Foreign government obligations
— 
— 
485 
15 
485 
15 
Temporarily impaired investment securities
available-for-sale
219,240 
5,653 
497,917 
63,298 
717,157 
68,951 
Total temporarily impaired investment securities $
219,240 
$
5,653 
$
497,917 
$
63,298 
$
717,157 
$
68,951 
The Company performs regular analysis on the investment securities available-for-sale portfolio to determine whether a decline in fair value indicates that an
investment security is impaired. In making these impairment determinations, management considers, among other factors, projected future cash flows; credit
subordination and the creditworthiness; capital adequacy and near-term prospects of the issuers.
Management also considers the Company's capital adequacy, interest-rate risk, liquidity and business plans in assessing whether it is more likely than not that
the Company will sell or be required to sell the investment securities before recovery. If the Company determines that a security investment is impaired and that it is
more likely than not that the Company will not sell or be required to sell the investment security before recovery of its amortized cost, the credit portion of the
impairment loss is recognized in the Company's consolidated statement of income and the noncredit portion is recognized in accumulated other comprehensive
income. The credit portion of the impairment represents the difference between the amortized cost and the present value of the expected future cash flows of the
investment security. If the Company determines that a security is impaired and it is more likely than not that it will sell or be required to sell the investment security
before recovery of its amortized cost, the entire difference between the amortized cost and the fair value of the security will be recognized in the Company's
consolidated statement of income.
Investment Securities Available-For-Sale Impairment Analysis
The following discussion summarizes, by investment security type, the basis for evaluating if the applicable investment securities within the Company’s
available-for-sale portfolio were impaired as of December 31, 2024. The Company has determined it is more likely than not that the Company will not sell or be
required to sell the investment securities before recovery of its amortized cost. The Company's ability and intent to hold these investment securities until recovery is
supported by the Company's strong capital and liquidity positions as well as its historically low portfolio turnover. As such, management has determined that the
investment securities are not impaired as of December 31, 2024. If market conditions for investment securities worsen or the creditworthiness of the underlying
issuers deteriorates, it is possible that the Company may recognize additional impairment in future periods.
U.S. Government-Sponsored Enterprises
The Company invests in securities issued by GSEs, including GSE debentures, MBSs, and CMOs. GSE securities include obligations issued by the FNMA,
the FHLMC, the GNMA, the FHLB and the Federal Farm Credit Bank. As of December 31, 2024, the Company held GNMA MBSs and CMOs, and SBA
commercial loan asset-backed securities in its available-for-sale portfolio with an estimated fair value of $36.9 million, all of which were backed explicitly by the
full faith and credit of the U.S. Government, compared to $33.9 million as of December 31, 2023.
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
As of December 31, 2024, the Company owned 34 GSE debentures with a total fair value of $176.3 million, and a net unrealized loss of $18.8 million. As of
December 31, 2023, the Company held 43 GSE debentures with a total fair value of $201.1 million, and a net unrealized loss of $19.5 million. As of December 31,
2024, 23 of the 34 securities in this portfolio were in an unrealized loss position. As of December 31, 2023, 27 of the 43 securities in this portfolio were in an
unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA/SBA) guarantee of the U.S.
Government. During the twelve months ended December 31, 2024 and 2023, the Company did not purchase any GSE debentures securities.
As of December 31, 2024, the Company owned 59 GSE CMOs with a total fair value of $55.5 million and a net unrealized loss of $7.0 million. As of
December 31, 2023, the Company held 60 GSE CMOs with a total fair value of $61.6 million with a net unrealized loss of $4.8 million. As of December 31, 2024,
57 of the 59 securities in this portfolio were in an unrealized loss position. As of December 31, 2023, 57 of 60 of the securities in this portfolio were in an unrealized
loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S. Government. For the
years ended December 31, 2024 and 2023, the Company did not purchase any GSE CMOs.
As of December 31, 2024, the Company owned 141 GSE MBSs with a total fair value of $148.3 million and a net unrealized loss of $18.6 million. As of
December 31, 2023, the Company held 146 GSE MBSs with a total fair value of $170.0 million with a net unrealized loss of $16.6 million. As of December 31,
2024, 92 of the 141 securities in this portfolio were in an unrealized loss position. As of December 31, 2023, 125 of the 146 securities in this portfolio were in an
unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S. Government.
During the twelve months ended December 31, 2024, the Company purchased $4.1 million of GSE MBS securities compared to the same period in 2023, when the
Company purchased $39.4 million of GSE MBS securities.
Municipal Obligations
The Company invests in certain state and municipal securities with high credit ratings for portfolio diversification and tax
planning purposes. Full collection of the obligations is expected because the financial conditions of the issuing municipalities
are sound, they have not defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the
ability and intent to hold the obligations for a period of time to recover the amortized cost.. As of December 31, 2024, the Company owned 39 municipal obligation
securities with a total fair value of $20.3 million and a net unrealized loss of $0.3 million. As of December 31, 2023, the Company owned 44 municipal obligation
securities with a total fair value of $18.9 million and a net unrealized gain of $0.1 million. As of December 31, 2024, 13 of the 39 securities in this portfolio were in
an unrealized loss position. During the twelve months ended December 31, 2024, the Company purchased $11.7 million of municipal securities compared to the
same period in 2023 when the Company purchased $10.0 million of municipal securities.
Corporate Obligations
The Company may invest in high-quality corporate obligations to provide portfolio diversification and improve the overall yield on the portfolio. As of
December 31, 2024, the Company owned 4 corporate obligation securities with a total fair value of $12.3 million and a net unrealized gain of $0.1 million. As of
December 31, 2023, the Company held 11 corporate obligation securities with a total fair value of $19.7 million and a net unrealized loss of $0.8 million. As of
December 31, 2024, 1 of the 4 securities in this portfolio was in an unrealized loss position. As of December 31, 2023, 9 of the 11 securities in this portfolio were in
an unrealized loss position. Full collection of the obligations is expected because the financial condition of the issuers is sound, they have not defaulted on
scheduled payments, the obligations are rated investment grade, and the Company has the ability and intent to hold the obligations for a period of time to recover
the amortized cost. For the years ended December 31, 2024 and 2023, the Company did not purchase any corporate obligations.
U.S. Treasury Bonds
The Company invests in securities issued by the U.S. government. As of December 31, 2024, the Company owned 65 U.S. Treasury bonds with a total fair
value of $481.9 million and a net unrealized loss of $24.8 million. As of December 31, 2023, the Company owned 66 U.S. Treasury bonds with a total fair value of
$444.7 million and a net unrealized loss of $26.0 million. As of December 31, 2024, 50 of the 65 securities in this portfolio were in an unrealized loss position. As
of December 31, 2023, 53 of the 66 securities in this portfolio were in unrealized loss positions. During the twelves months ended December 31, 2024 the Company
purchased $132.7 million U.S. Treasury bonds compared to the same period in 2023 when the Company purchased $272.7 million, of U.S. Treasury bonds.
F-24

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Foreign Government Obligations
As of December 31, 2024 and 2023, the Company owned 1 foreign government obligation security with a fair value and amortized cost of $0.5 million. As of
December 31, 2024 and 2023, the security was in an unrealized loss position. During the twelves months ended December 31, 2024 and 2023 the Company did not
purchase any foreign government obligation securities.
Portfolio Maturities
The final stated maturities of the debt securities are as follows for the periods indicated:
 
At December 31,
 
2024
2023
 
Amortized
Cost
Estimated
Fair Value
Weighted
Average
Rate
Amortized
Cost
Estimated
Fair Value
Weighted
Average
Rate
 
(Dollars in Thousands)
Investment securities available-for-sale:
 
 
 
 
 
 
Within 1 year
$
103,337 
$
102,457 
3.22%
$
141,989 
$
141,340 
4.27%
After 1 year through 5 years
449,289 
434,608 
3.32%
342,525 
332,734 
3.15%
After 5 years through 10 years
207,980 
180,370 
1.77%
268,182 
233,059 
1.69%
Over 10 years
203,783 
177,599 
3.13%
231,555 
209,468 
3.35%
$
964,389 
$
895,034 
2.96%
$
984,251 
$
916,601 
3.00%
Actual maturities of debt securities will differ from those presented above since certain obligations amortize and may also provide the issuer the right to call
or prepay the obligation prior to scheduled maturity without penalty. MBSs and CMOs are included above based on their final stated maturities; the actual
maturities, however, may occur earlier due to anticipated prepayments and stated amortization of cash flows.
As of December 31, 2024, issuers of debt securities with an estimated fair value of $118.6 million had the right to call or prepay the obligations. Of the $118.6
million, approximately $4.8 million matures in less then 1 year, $67.4 million matures in 1-5 years, $38.9 million matures in 6-10 years, and $7.5 million mature
after ten years. As of December 31, 2023, issuers of debt securities with an estimated fair value of approximately $122.0 million had the right to call or prepay the
obligations. Of the $122.0 million, approximately $6.4 million matures in less than 1 year, $59.7 million matures in 1-5 years, $48.0 million matures in 6-10 years,
and $7.9 million matures after ten years.
Security Sales
The Company did not sell any investment securities available-for-sale during the year ended December 31, 2024. This compares to $230.0 million securities
sold during the year ended December 31, 2023. Securities sales executed during the twelve months ended 2023 were related to the acquisition of PCSB and the
restructuring of the acquired investment portfolio.
 
Year Ended December 31,
 
2024
2023
 
(In Thousands)
Proceeds from sales of investment securities available-for-sale
$
— 
$
229,981 
Gross gains from sales
— 
2,705 
Gross losses from sales
— 
(1,001)
Gain (loss) on sales of securities, net
$
— 
$
1,704 
F-25

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(5) Restricted Equity Securities
Investments in the restricted equity securities of various entities are as follows:
 
At December 31,
 
2024
2023
 
(In Thousands)
FHLB stock
$
61,108 
$
55,548 
FRB stock
21,881 
21,881 
Other restricted equity securities
166 
166 
$
83,155 
$
77,595 
The Company invests in the stock of the FHLB of Boston and the FHLB of New York as one of the requirements to borrow. As of December 31, 2024 and
2023, FHLB stock is recorded at its carrying value, which is equal to cost and which management believes approximates its fair value. As of December 31, 2024,
the Company's investment in FHLB stock met the total stock investment requirement.
The Company invests in the stock of the Federal Reserve Bank of Boston and the Federal Reserve Bank of New York as required by its the Banks'
membership in the Federal Reserve System. As of December 31, 2024 and 2023, Federal Reserve Bank stock is recorded at its carrying value, which is equal to cost
and which management believes approximates its fair value.
(6) Loans and Leases
The following table presents the amortized cost of loans and leases and weighted average coupon rates for the loan and lease portfolios at the dates indicated:
 
At December 31, 2024
At December 31, 2023
 
 
Balance
Weighted
Average
Coupon
Balance
Weighted
Average
Coupon
 
(Dollars In Thousands)
Commercial real estate loans:
 
 
 
 
Commercial real estate
$
4,027,265 
5.40 %
$
4,047,288 
5.47 %
Multi-family mortgage
1,387,796 
5.06 %
1,415,191 
5.14 %
Construction
301,053 
7.00 %
302,050 
6.86 %
Total commercial real estate loans
5,716,114 
5.40 %
5,764,529 
5.46 %
Commercial loans and leases:
 
 
 
 
Commercial
1,164,052 
6.51 %
984,441 
6.83 %
Equipment financing
1,294,950 
8.27 %
1,370,648 
7.76 %
Condominium association
47,662 
5.50 %
44,579 
5.05 %
Total commercial loans and leases
2,506,664 
7.40 %
2,399,668 
7.33 %
Consumer loans:
 
 
 
 
Residential mortgage
1,114,732 
4.69 %
1,082,804 
4.41 %
Home equity
377,411 
7.18 %
344,182 
8.03 %
Other consumer
64,367 
6.67 %
50,406 
7.68 %
Total consumer loans
1,556,510 
5.38 %
1,477,392 
5.36 %
Total loans and leases
$
9,779,288 
5.91 %
$
9,641,589 
5.91 %
F-26

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Accrued interest on loans and leases, which were excluded from the amortized cost of loans and leases totaled $37.5 million and $39.1 million at
December 31, 2024 and December 31, 2023, respectively, and were included in other assets in the accompanying consolidated balance sheets.
The net unamortized deferred loan origination costs and premium and discount on acquired loans included in total loans and leases were $(19.6) million and
$(29.0) million as of December 31, 2024 and 2023, respectively.
The Banks and their subsidiaries lend primarily in New England and New York, with the exception of equipment financing, of which 29.5% is in the Greater
New York and New Jersey metropolitan area and 70.5% of which is in other areas in the United States of America as of December 31, 2024.
 
Related Party Loans
The Banks' authority to extend credit to their respective directors and executive officers, as well as to entities controlled by such persons, is currently governed
by the requirements of the Sarbanes-Oxley Act and Regulation O of the FRB. Among other things, these provisions require that extensions of credit to insiders (1)
be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable
transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features; and (2) not exceed
certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the Banks'
capital. In addition, the extensions of credit to insiders must be approved by the applicable Bank's Board of Directors.
The following table summarizes the change in the total amounts of loans and advances to directors, executive officers and their affiliates for the periods
indicated. All loans were performing as of December 31, 2024 and 2023.
 
Year Ended December 31,
 
2024
2023
 
(Dollars In Thousands)
Balance at beginning of year
$
133,499 
$
123,577 
New loans granted during the year
24,447 
2,942 
Loans no longer classified as insider loans
(68,516)
— 
New loans to existing relationship
17,245 
6,408 
Net (repayments)/additional drawals
886 
572 
Balance at end of year
$
107,561 
$
133,499 
Unfunded commitments on extensions of credit to related parties totaled $5.6 million and $30.1 million as of December 31, 2024 and 2023, respectively.
Loans and Leases Pledged as Collateral
As of December 31, 2024 and 2023, there were $3.6 billion and $3.5 billion, respectively, of loans and leases pledged as collateral for repurchase agreements;
municipal deposits; treasury, tax and loan deposits; swap agreements; Federal Reserve Bank borrowings, and FHLB borrowings. The Banks did not have any
outstanding Federal Reserve Bank borrowings as of December 31, 2024 and 2023.
F-27

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(7) Allowance for Credit Losses
The following tables present the changes in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment for
the periods indicated:
 
Year Ended December 31, 2024
 
Commercial
Real Estate
Commercial
Consumer
Total
 
(In Thousands)
Balance at December 31, 2023
$
81,410 
$
29,557 
$
6,555 
$
117,522 
Charge-offs
(4,425)
(22,345)
(40)
(26,810)
Recoveries
— 
2,241 
41 
2,282 
Provision (credit) for loan and lease losses excluding
unfunded commitments
(2,814)
34,716 
187 
32,089 
Balance at December 31, 2024
$
74,171 
$
44,169 
$
6,743 
$
125,083 
 
Year Ended December 31, 2023
 
Commercial
Real Estate
Commercial
Consumer
Total
 
(In Thousands)
Balance at December 31, 2022
$
68,154 
$
26,604 
$
3,724 
$
98,482 
Charge-offs
(1,204)
(19,990)
(41)
(21,235)
Recoveries
132 
1,406 
34 
1,572 
Provision (credit) for loan and lease losses excluding
unfunded commitments
14,328 
21,537 
2,838 
38,703 
Balance at December 31, 2023
$
81,410 
$
29,557 
$
6,555 
$
117,522 
The allowance for credit losses for unfunded credit commitments was $6.0 million, and $19.8 million at December 31, 2024 and December 31, 2023,
respectively.
Provision for Credit Losses
The (credit) provisions for credit losses are set forth below for the periods indicated:
 
Year Ended December 31,
 
2024
2023
2022
 
(In Thousands)
Provision (credit) for loan and lease losses:
 
 
Commercial real estate
$
(2,814)
$
14,328 
$
(1,046)
Commercial
34,716 
21,537 
2,892 
Consumer
187 
2,838 
872 
Total provision (credit) for loan and lease losses
32,089 
38,703 
2,718 
Unfunded credit commitments
(10,086)
(835)
5,807 
Investment securities available-for-sale
(359)
339 
102 
Total provision (credit) for credit losses
$
21,644 
$
38,207 
$
8,627 
Allowance for Credit Losses Methodology
Management has established a methodology to determine the adequacy of the allowance for credit losses that assesses the risks and losses expected on the loan
and lease portfolio and unfunded commitments. Additions to the allowance for credit losses are made by charges to the provision for credit losses. Losses on loans
and leases are charged off against the allowance when all or a portion of a loan or lease is considered uncollectible. Subsequent recoveries on loans previously
charged off, if any, are credited to the allowance when realized.
F-28

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
To calculate the allowance for loans collectively evaluated, management uses models developed by a third party. CRE, C&I, and retail lifetime loss rate
models calculate the expected losses over the life of the loan based on exposure at default loan attributes and reasonable, supportable economic forecasts. The
exposure at default considers the current unpaid balance, prepayment assumptions and expected utilization assumptions. The expected loss estimates for two small
commercial portfolios are based on historical loss rates.
Key assumptions used in the models include portfolio segmentation, prepayments, and the expected utilization of unfunded commitments, among others. The
portfolios are segmented by loan level attributes such as loan type, loan size, date of origination, and delinquency status to create homogenous loan pools. Pool level
metrics are calculated and loss rates are subsequently applied to the pools as the loans have like characteristics. Prepayment assumptions are embedded within the
models and are based on the same data used for model development and incorporate adjustments for reasonable and supportable forecasts. Model development data
and developmental time periods vary by model, but all use at least ten years of historical data and capture at least one recessionary period. Expected utilization is
based on current utilization and a LEQ factor. LEQ varies by current utilization and provides a reasonable estimate of expected draws and borrower behavior.
Assumptions and model inputs are reviewed in accordance with model monitoring practices and as information becomes available.
The ACL estimate incorporates reasonable and supportable forecasts of various macro-economic variables over the remaining life of loans and leases. The
development of the reasonable and supportable forecast assume each macro-economic variable will revert to long-term expectations, with reversion characteristics
unique to specific economic indicators and forecasts. Reversion towards long-term expectations generally begins two to three years from the forecast start date and
largely completes within the first five years.
Management elected to use multiple economic forecasts in determining the reserve to account for economic uncertainty. The forecasts include various
projections of GDP, interest rates, property price indices, and employment measures. Scenario weighting and model parameters are reviewed for each calculation
and updated to reflect facts and circumstances as of the financial statement date. The forecasts utilized at December 31, 2024 reflect the immediate and longer-term
effects of a rising interest rate environment and inflationary conditions.
As of December 31, 2024, management applied qualitative adjustments to the CRE lifetime loss rate, C&I lifetime loss rate, and retail lifetime loss rate
models. These adjustments addressed model limitations, were based on historical loss patterns, and targeted specific risks within certain portfolios. A general
qualitative adjustment was applied to all models to account for general economic uncertainty by placing a greater probability on negative economic forecasts.
Additional qualitative adjustments were applied to the commercial, multifamily, and commercial real estate (includes owner occupied, non-owner occupied, and
construction) portfolios based on the Company’s historical loss experience and the loss experience of the Company’s peer group. High risk segments of the Eastern
Funding portfolios also received additional qualitative adjustments based on recent loss history and expected liquidation values. These qualitative adjustments
resulted in additions to reserves for all portfolios, as compared to the model output.
Specific reserves are established for loans individually evaluated for impairment when amortized cost basis is greater than the discounted present value of
expected future cash flows or, in the case of collateral-dependent loans, when there is an excess of a loan's amortized cost basis over the fair value of its underlying
collateral. When loans and leases do not share risk characteristics with other financial assets they are evaluated individually. Individually evaluated loans are
reviewed quarterly with adjustments made to the calculated reserve as necessary.
The general allowance for loan and lease losses was $107.5 million as of December 31, 2024, compared to $108.4 million as of December 31, 2023. The
decrease of $0.9 million was primarily driven by the decreases in the general allowance of $5.7 million for commercial real estate loans and $2.3 million for
commercial loans, offset by an increase of $6.9 million in the reserve for equipment financing loans.
The specific allowance for loan and lease losses was $17.5 million as of December 31, 2024, compared to $9.1 million as of December 31, 2023. The increase
of $8.8 million was primarily driven by increases in the specific reserve of $7.8 million in equipment financing relationships and $2.2 million in commercial
relationships, offset by a decrease of $1.2 million in the specific reserve for commercial real estate relationships.
As of December 31, 2024, management believes that the methodology for calculating the allowance is sound and that the allowance provides a reasonable
basis for determining and reporting on expected losses over the lifetime of the Company’s loan portfolio.
F-29

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Credit Quality Assessment
At the time of loan origination, a rating is assigned based on the capacity to pay and general financial strength of the borrower, the value of assets pledged as
collateral, and the evaluation of third party support such as a guarantor. The Company continually monitors the credit quality of the loan portfolio using all available
information. The officer responsible for handling each loan is required to initiate changes to risk ratings when changes in facts and circumstances occur that warrant
an upgrade or downgrade in a loan rating. Based on this information, loans demonstrating certain payment issues or other weaknesses may be categorized as
delinquent, adversely risk-rated, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to
restructure the contractual terms of certain loans to match the borrower's ability to repay the loan based on their current financial condition. If a restructured loan
meets certain criteria, it may be categorized as a modified loan.
The Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For all loans, the Company utilizes an eight-grade loan
rating system, which assigns a risk rating to each borrower based on a number of quantitative and qualitative factors associated with a loan transaction. Factors
considered include industry and market conditions; position within the industry; earnings trends; operating cash flow; asset/liability values; debt capacity; guarantor
strength; management and controls; financial reporting; collateral; and other considerations. In addition, the Company's independent loan review group evaluates the
credit quality and related risk ratings in all loan portfolios. The results of these reviews are reported to the Risk Committee of the Board of Directors on a periodic
basis and annually to the Board of Directors. For the consumer loans, the Company heavily relies on payment status for calibrating credit risk.
The ratings categories used for assessing credit risk in the commercial real estate, multi-family mortgage, construction, commercial, equipment financing,
condominium association and other consumer loan and lease classes are defined as follows:
1 -4 Rating—Pass
Loan rating grades "1" through "4" are classified as "Pass," which indicates borrowers are performing in accordance with the terms of the loan and are less
likely to result in loss due to the capacity of the borrower to pay and the adequacy of the value of assets pledged as collateral.
5 Rating—Other Assets Especially Mentioned ("OAEM")
Borrowers exhibit potential credit weaknesses or downward trends deserving management's attention. If not checked or corrected, these trends will weaken
the Company's asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned.
6 Rating—Substandard
Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Substandard loans may be inadequately protected by the current net
worth and paying capacity of the obligors or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy. Although no loss of principal is
envisioned, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be
inadequate to cover the principal obligation.
7 Rating—Doubtful
Borrowers exhibit well-defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the
debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial
loss of principal is likely.
8 Rating—Definite Loss
Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of
the Company is not warranted.
Assets rated as "OAEM," "substandard" or "doubtful" based on criteria established under banking regulations are collectively referred to as "criticized" assets.
F-30

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Credit Quality Information
The following tables present the recorded investment in loans in each class as of December 31, 2024 and December 31, 2023 by credit quality indicator and
year originated.
December 31, 2024
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Revolving
Loans
Converted to
Term Loans
Total
 
(In Thousands)
Commercial Real
Estate
 
 
 
 
 
 
Pass
$
147,877  $
395,770  $
677,054  $
740,805  $
368,755  $
1,493,198  $
45,933  $
16,620  $
3,886,012 
OAEM
22,505 
— 
21,923 
3,611 
3,210 
41,704 
— 
411 
93,364 
Substandard
— 
— 
3,653 
5,416 
— 
38,820 
— 
— 
47,889 
Total
170,382 
395,770 
702,630 
749,832 
371,965 
1,573,722 
45,933 
17,031 
4,027,265 
Current -period
gross writeoffs
— 
— 
552 
— 
— 
3,874 
— 
— 
4,426 
Multi-Family
Mortgage
Pass
16,197 
67,890 
244,419 
243,977 
153,294 
572,534 
5,937 
38,001 
1,342,249 
OAEM
— 
— 
11,606 
— 
— 
3,855 
— 
— 
15,461 
Substandard
— 
— 
2,863 
11,477 
— 
15,746 
— 
— 
30,086 
Total
16,197 
67,890 
258,888 
255,454 
153,294 
592,135 
5,937 
38,001 
1,387,796 
Construction
Pass
50,569 
24,642 
169,636 
37,832 
1,649 
221 
8,754 
— 
293,303 
OAEM
— 
— 
7,750 
— 
— 
— 
— 
— 
7,750 
Total
50,569 
24,642 
177,386 
37,832 
1,649 
221 
8,754 
— 
301,053 
Commercial
Pass
166,730 
246,370 
132,302 
101,292 
29,561 
78,400 
380,122 
6,851 
1,141,628 
OAEM
— 
— 
— 
48 
— 
284 
1,711 
— 
2,043 
Substandard
— 
4 
— 
392 
1,197 
12,001 
6,091 
365 
20,050 
Doubtful
— 
— 
— 
— 
— 
2 
— 
329 
331 
F-31

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2024
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Revolving
Loans
Converted to
Term Loans
Total
 
(In Thousands)
Total
166,730 
246,374 
132,302 
101,732 
30,758 
90,687 
387,924 
7,545 
1,164,052 
Current-period
gross writeoffs
13 
4 
3,612 
100 
1,523 
1,596 
— 
— 
6,848 
Equipment
Financing
Pass
287,280 
359,803 
289,487 
147,244 
83,664 
85,286 
425 
5,881 
1,259,070 
OAEM
— 
— 
1,572 
930 
— 
— 
— 
— 
2,502 
Substandard
— 
7,681 
3,455 
2,918 
725 
2,771 
— 
11,530 
29,080 
Doubtful
— 
— 
4,283 
— 
— 
15 
— 
— 
4,298 
Total
287,280 
367,484 
298,797 
151,092 
84,389 
88,072 
425 
17,411 
1,294,950 
Current-period
gross writeoffs
840 
2,801 
4,740 
1,430 
5,219 
4,166 
— 
— 
19,196 
Condominium
Association
Pass
5,248 
9,897 
6,644 
7,600 
5,529 
9,030 
3,603 
111 
47,662 
Total
5,248 
9,897 
6,644 
7,600 
5,529 
9,030 
3,603 
111 
47,662 
Other Consumer
Pass
373 
176 
84 
873 
— 
2,057 
60,789 
15 
64,367 
Total
373 
176 
84 
873 
— 
2,057 
60,789 
15 
64,367 
Current-period
gross writeoffs
7 
— 
3 
— 
1 
12 
— 
— 
23 
Total
Pass
674,274 
1,104,548 
1,519,626 
1,279,623 
642,452 
2,240,726 
505,563 
67,479 
8,034,291 
OAEM
22,505 
— 
42,851 
4,589 
3,210 
45,843 
1,711 
411 
121,120 
Substandard
— 
7,685 
9,971 
20,203 
1,922 
69,338 
6,091 
11,895 
127,105 
Doubtful
— 
— 
4,283 
— 
— 
17 
— 
329 
4,629 
Total
$
696,779  $
1,112,233  $
1,576,731  $
1,304,415  $
647,584  $
2,355,924  $
513,365  $
80,114  $
8,287,145 
As of December 31, 2024, there were no loans categorized as definite loss.
December 31, 2023
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Revolving
Loans
Converted to
Term Loans
Total
 
(In Thousands)
Commercial Real
Estate
Pass
$
386,962  $
690,374  $
776,834  $
378,322  $
422,028  $
1,245,148  $
75,746  $
14,882  $
3,990,296 
OAEM
— 
— 
2,529 
3,300 
1,784 
1,674 
— 
— 
9,287 
F-32

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2023
Substandard
— 
— 
— 
— 
22,685 
23,089 
— 
— 
45,774 
Doubtful
— 
— 
— 
— 
— 
1,931 
— 
— 
1,931 
Total
386,962 
690,374 
779,363 
381,622 
446,497 
1,271,842 
75,746 
14,882 
4,047,288 
Current -period
gross writeoffs
— 
4 
942 
— 
— 
258 
— 
— 
1,204 
Multi-Family
Mortgage
Pass
68,963 
217,727 
256,198 
165,770 
193,162 
468,623 
5,947 
36,585 
1,412,975 
Substandard
— 
— 
— 
— 
— 
2,216 
— 
— 
2,216 
Total
68,963 
217,727 
256,198 
165,770 
193,162 
470,839 
5,947 
36,585 
1,415,191 
Construction
Pass
25,691 
212,904 
36,192 
6,292 
1,176 
239 
5,984 
— 
288,478 
Substandard
— 
2,417 
11,155 
— 
— 
— 
— 
— 
13,572 
Total
25,691 
215,321 
47,347 
6,292 
1,176 
239 
5,984 
— 
302,050 
Commercial
Pass
220,563 
137,332 
125,385 
37,601 
23,046 
69,104 
337,316 
3,570 
953,917 
OAEM
— 
— 
79 
2,081 
1,291 
— 
1,827 
8,225 
13,503 
Substandard
4 
— 
9 
— 
12,362 
273 
981 
3,388 
17,017 
Doubtful
— 
— 
— 
— 
1 
1 
— 
2 
4 
Total
220,567 
137,332 
125,473 
39,682 
36,700 
69,378 
340,124 
15,185 
984,441 
Current-period
gross writeoffs
1,000 
3,500 
4,842 
1,164 
673 
2,379 
— 
— 
13,558 
Equipment
Financing
Pass
443,878 
389,083 
205,208 
125,888 
88,465 
74,727 
12,919 
5,740 
1,345,908 
OAEM
— 
2,144 
1,232 
1,033 
159 
— 
— 
— 
4,568 
Substandard
1,250 
8,107 
4,105 
2,181 
2,255 
2,259 
— 
— 
20,157 
Doubtful
— 
— 
— 
— 
— 
15 
— 
— 
15 
Total
445,128 
399,334 
210,545 
129,102 
90,879 
77,001 
12,919 
5,740 
1,370,648 
Current-period
gross writeoffs
498 
1,075 
1,915 
122 
553 
2,275 
— 
— 
6,438 
Condominium
Association
Pass
4,460 
7,569 
9,186 
6,686 
4,414 
9,086 
3,010 
168 
44,579 
Total
4,460 
7,569 
9,186 
6,686 
4,414 
9,086 
3,010 
168 
44,579 
Other Consumer
Pass
408 
200 
516 
5 
21 
2,062 
47,191 
3 
50,406 
Total
408 
200 
516 
5 
21 
2,062 
47,191 
3 
50,406 
Current-period
gross writeoffs
6 
— 
2 
— 
11 
9 
— 
— 
28 
Total
Pass
1,150,925 
1,655,189 
1,409,519 
720,564 
732,312 
1,868,989 
488,113 
60,948 
8,086,559 
OAEM
— 
2,144 
3,840 
6,414 
3,234 
1,674 
1,827 
8,225 
27,358 
F-33

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2023
Substandard
1,254 
10,524 
15,269 
2,181 
37,302 
27,837 
981 
3,388 
98,736 
Doubtful
— 
— 
— 
— 
1 
1,947 
— 
2 
1,950 
Total
$
1,152,179  $
1,667,857  $
1,428,628  $
729,159  $
772,849  $
1,900,447  $
490,921  $
72,563  $
8,214,603 
As of December 31, 2023, there were no loans categorized as definite loss.
For residential mortgage and home equity loans, the borrowers' credit scores at origination contribute as a reserve metric in the retail loss rate model. The
credit scores in the table as follows represent the borrowers' current credit scores.
December 31, 2024
2024
2023
2022
2021
2020
Prior
Revolving
Loans
Revolving
Loans
Converted to
Term Loans
Total
 
(In Thousands)
Residential
 
 
Credit Scores
 
 
Over 700
$
119,843  $
75,397  $
167,352  $
204,738  $
110,663  $
341,746  $
7,936  $
—  $
1,027,675 
661 - 700
6,444 
7,330 
7,734 
6,915 
4,622 
12,583 
— 
— 
45,628 
600 and below
2,040 
1,111 
7,711 
4,976 
5,016 
13,024 
— 
— 
33,878 
Data not available*
31 
537 
1,349 
881 
— 
4,753 
— 
— 
7,551 
Total
$
128,358  $
84,375  $
184,146  $
217,510  $
120,301  $
372,106  $
7,936  $
—  $
1,114,732 
Home Equity
Credit Scores
 
 
Over 700
$
1,696  $
4,686  $
3,492  $
1,402  $
529  $
7,003  $
316,187  $
5,446  $
340,441 
661 - 700
166 
400 
21 
38 
— 
326 
18,700 
505 
20,156 
600 and below
— 
405 
132 
— 
18 
373 
12,121 
1,195 
14,244 
Data not available*
— 
— 
— 
— 
— 
4 
2,566 
— 
2,570 
Total
$
1,862  $
5,491  $
3,645  $
1,440  $
547  $
7,706  $
349,574  $
7,146  $
377,411 
Current-period gross
writeoffs
— 
— 
16 
— 
— 
— 
— 
— 
16 
* Represents loans made to trusts and purchased mortgages.
F-34

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
December 31, 2023
2023
2022
2021
2020
2019
Prior
Revolving
Loans
Revolving
Loans
Converted to
Term Loans
Total
 
(In Thousands)
Residential
 
 
Credit Scores
 
 
Over 700
$
72,022  $
161,491  $
210,338  $
118,752  $
84,792  $
261,474  $
4,998  $
439  $
914,306 
661 - 700
12,200 
20,824 
11,059 
7,970 
4,402 
24,152 
— 
— 
80,607 
600 and below
1,943 
12,108 
7,197 
7,093 
5,449 
23,838 
— 
— 
57,628 
Data not available*
1,353 
2,246 
3,025 
— 
448 
23,163 
28 
— 
30,263 
Total
87,518 
196,669 
231,619 
133,815 
95,091 
332,627 
5,026 
439 
1,082,804 
Current-period gross writeoffs
— 
— 
— 
— 
— 
25 
— 
— 
25 
Home Equity
Credit Scores
 
 
Over 700
5,505 
3,807 
1,667 
769 
1,218 
7,366 
272,169 
4,617 
297,118 
661 - 700
1,005 
310 
— 
36 
— 
671 
21,936 
830 
24,788 
600 and below
148 
143 
41 
— 
39 
402 
17,349 
2,008 
20,130 
Data not available*
23 
— 
1 
— 
— 
45 
2,062 
15 
2,146 
Total
$
6,681  $
4,260  $
1,709  $
805  $
1,257  $
8,484  $
313,516  $
7,470  $
344,182 
* Represents loans made to trusts and purchased mortgages.
F-35

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Age Analysis of Past Due Loans and Leases
The following tables present an age analysis of the recorded investment in total loans and leases as of December 31, 2024 and 2023.
 
At December 31, 2024
 
Past Due
 
 
 Past
Due Greater
Than 90
Days
and
Accruing
Non-
accrual
Non-accrual
with no related
Allowance
 
31-60
Days
61-90
Days
Greater
Than
90 Days
Total
Current
Total Loans
and Leases
 
(In Thousands)
Commercial real estate loans:
Commercial real estate
$
6,570 
$
1,685 
$
12,153 
$
20,408 
$
4,006,857 
$
4,027,265 
$
629 
$
11,525  $
683 
Multi-family mortgage
2,863 
— 
6,469 
9,332 
1,378,464 
1,387,796 
— 
6,596 
6,605 
Construction
— 
— 
— 
— 
301,053 
301,053 
— 
— 
— 
Total commercial real
estate loans
9,433 
1,685 
18,622 
29,740 
5,686,374 
5,716,114 
629 
18,121 
7,288 
Commercial loans and leases:
Commercial
783 
1,693 
695 
3,171 
1,160,881 
1,164,052 
— 
14,676 
326 
Equipment financing
6,140 
2,508 
27,070 
35,718 
1,259,232 
1,294,950 
— 
31,509 
2,180 
Condominium association
— 
— 
— 
— 
47,662 
47,662 
— 
— 
— 
Total commercial loans
and leases
6,923 
4,201 
27,765 
38,889 
2,467,775 
2,506,664 
— 
46,185 
2,506 
Consumer loans:
Residential mortgage
2,015 
— 
2,057 
4,072 
1,110,660 
1,114,732 
130 
3,999 
2,359 
Home equity
818 
233 
135 
1,186 
376,225 
377,411 
52 
1,043 
— 
Other consumer
4 
— 
1 
5 
64,362 
64,367 
— 
1 
— 
Total consumer loans
2,837 
233 
2,193 
5,263 
1,551,247 
1,556,510 
182 
5,043 
2,359 
Total loans and leases
$
19,193 
$
6,119 
$
48,580 
$
73,892 
$
9,705,396 
$
9,779,288 
$
811 
$
69,349  $
12,153 
There is no interest income recognized on non-accrual loans for the year ending December 31, 2024.
F-36

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
 
At December 31, 2023
 
Past Due
 
 
Past
Due Greater
Than 90
Days
and
Accruing
 
 
31-60
Days
61-90
Days
Greater
Than
90 Days
Total
Current
Total Loans
and Leases
Non-
accrual
Non-accrual
with no related
Allowance
 
(In Thousands)
Commercial real estate loans:
Commercial real estate
$
2,578 
$
214 
$
16,915 
$
19,707 
$
4,027,581 
$
4,047,288 
$
227 
$ 19,608  $
740 
Multi-family mortgage
346 
— 
— 
346 
1,414,845 
1,415,191 
— 
— 
— 
Construction
— 
— 
— 
— 
302,050 
302,050 
— 
— 
— 
Total commercial real
estate loans
2,924 
214 
16,915 
20,053 
5,744,476 
5,764,529 
227 
19,608 
740 
Commercial loans and leases:
Commercial
829 
75 
3,808 
4,712 
979,729 
984,441 
— 
3,886 
— 
Equipment financing
3,202 
4,367 
8,984 
16,553 
1,354,095 
1,370,648 
— 
14,984 
2,474 
Condominium association
— 
— 
— 
— 
44,579 
44,579 
— 
— 
— 
Total commercial loans and
leases
4,031 
4,442 
12,792 
21,265 
2,378,403 
2,399,668 
— 
18,870 
2,474 
Consumer loans:
Residential mortgage
934 
600 
3,063 
4,597 
1,078,207 
1,082,804 
— 
4,292 
2,563 
Home equity
1,290 
44 
387 
1,721 
342,461 
344,182 
1 
860 
— 
Other consumer
— 
— 
— 
— 
50,406 
50,406 
— 
— 
— 
Total consumer loans
2,224 
644 
3,450 
6,318 
1,471,074 
1,477,392 
1 
5,152 
2,563 
Total loans and leases
$
9,179 
$
5,300 
$
33,157 
$
47,636 
$
9,593,953 
$
9,641,589 
$
228 
$ 43,630  $
5,777 
There is no interest income recognized on non-accrual loans for the year ending December 31, 2023.
Impaired Loans and Leases
A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due
(both interest and principal) according to the contractual terms of the loan agreement. The loans and leases risk-rated "substandard" or worse are considered
impaired. The Company has also defined the population of impaired loans to include nonaccrual loans and modified loans. Impaired loans and leases which do not
share similar risk characteristics with other loans are individually evaluated for credit losses. Specific reserves are established for loans and leases with deterioration
in the present value of expected future cash flows or, in the case of collateral-dependent loans and leases, any increase in the loan or lease amortized cost basis over
the fair value of the underlying collateral discounted for estimated selling costs. In contrast, the loans and leases which share similar risk characteristics and are not
included in the individually evaluated population are collectively evaluated for credit losses.
The following tables present information regarding individually evaluated and collectively evaluated allowance for loan and lease losses for credit losses on
loans and leases at the dates indicated.
F-37

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
At December 31, 2024
Commercial Real
Estate
Commercial
Consumer
Total
(In Thousands)
Allowance for Loan and Lease Losses:
Individually evaluated
$
3,566 
$
13,967 
$
13 
$
17,546 
Collectively evaluated
70,605 
30,202 
6,730 
107,537 
Total
$
74,171 
$
44,169 
$
6,743 
$
125,083 
Loans and Leases:
Individually evaluated
$
77,983 
$
47,819 
$
2,626 
$
128,428 
Collectively evaluated
5,638,131 
2,458,845 
1,553,884 
9,650,860 
Total
$
5,716,114 
$
2,506,664 
$
1,556,510 
$
9,779,288 
At December 31, 2023
Commercial Real
Estate
Commercial
Consumer
Total
(In Thousands)
Allowance for Loan and Lease Losses:
Individually evaluated
$
5,104 
$
3,947 
$
35 
$
9,086 
Collectively evaluated
76,306 
25,610 
6,520 
108,436 
Total
$
81,410 
$
29,557 
$
6,555 
$
117,522 
Loan and Lease Losses:
Individually evaluated
$
64,953 
$
27,083 
$
4,750 
$
96,786 
Collectively evaluated
5,699,576 
2,372,585 
1,472,642 
9,544,803 
Total
$
5,764,529 
$
2,399,668 
$
1,477,392 
$
9,641,589 
Loan Modifications
The following tables present the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the periods indicated.
At December 31, 2024
Number of Loans
Amortized Cost
% of Total Class of
Loans and Leases
Financial Effect
(In thousands)
Maturity Extension
C&I
2 $
115 
0.01 %
One loan was given 6 months of interest only
payments and 6 months added to the
term of the loan and the other loan was given a 2
month deferment of payments along with 13 months
added to the term of the loan. The financial effect
was deemed "de minimis".
Significant Payment Delays
F-38

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
C&I
14
15,016
1.29 %
Some of these loans and letters of credit were given a
two quarter (6 month) payment forbearance, while
one was given a 30 month term extension, and
another was given one year of payment deferrals.
The financial effect was deemed "de minimis."
Combination - Maturity
Extension and Significant
Payment Delays
C&I
2
1,478
0.13 %
These loans were given
6 month maturity extension and 6 months of interest-
only payments. The financial effect was deemed "de
minimis."
Combination - Maturity
Extension and Interest
Rate Reduction
CRE
1
8,284
0.21 %
This loan was given a maturity extension of 3 years
with a 5.0% pay rate and 7.0% accrue rate. The
financial effect was deemed "de minimis."
C&I
2
92
0.01 %
These loans were given 25 month extensions, and
reductions in their stated interest rates of 7.5%. The
financial effect was deemed "de minimis."
Home Equity
1
269 
0.07 %
This loan was reamortized over 30 years and
extended the prior maturity date 20 years, with a
reduction in rate to 6.8% fixed. The financial effect
was deemed "de minimis."
Combination - Maturity
Extension, Interest Rate
Reduction, and Significant
Payment Delays
CRE
1
604 
0.02 %
Line of credit renewed for one year, interest only,
with a reduction in rate from 10.3% variable to 7.5%
fixed. The financial effect was deemed "de minimis."
Total
23 $
25,858 
At December 31, 2023
Number of Loans
Amortized Cost
% of Total Class of
Loans and Leases
Financial Effect
(In thousands)
Maturity Extension
CRE
1 $
3,195 
0.06 %
The loan was given a one year maturity extension.
The financial effect was deemed "de minimis."
F-39

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
C&I
12
14,463
0.98 %
All 12 loans were given six month maturity
extensions to assist borrowers. The financial effect
was deemed "de minimis."
Significant Payment Delays
C&I
2
16
— %
Both loans were given restructured payment plans to
assist borrowers. The financial effect was deemed "de
minimis."
Combination - Maturity
Extension and Significant
Payment Delays
CRE
2
18,792
0.33 %
Loans were given two year maturity extensions, with
a partial deferral of interest payments. The financial
effect was deemed "de minimis."
C&I
10
4,650
0.30 %
Loans were given one to 30 of payment delays and
three to 30 month term extensions. The financial
effect was deemed "de minimis."
Combination - Maturity
Extension and Interest
Rate Reduction
CRE
C&I
10
985
0.07 %
A portion of loans were given four month maturity
extensions and interest rate reductions. Other loans
were given two year maturity extensions and a 5.00%
fixed rate. The financial effect was deemed "de
minimis."
Total
37 $
42,101 
F-40

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The following tables present the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the periods indicated.
At December 31, 2024
Current
30-60 Days Past Due
61-90 Days Past Due
90+ Days Past Due
Modified
(In thousands)
Total Modifications
$
25,155 
98 
580 
— 
— 
At December 31, 2023
Current
30-60 Days Past Due
61-90 Days Past Due
90+ Days Past Due
Modified
(In thousands)
Total Modifications
$
41,993 
16 
— 
92 
— 
 
(8) Premises and Equipment
Premises and equipment consist of the following:
 
At December 31,
Estimated
Useful Life
 
2024
2023
 
(In Thousands)
(In Years)
Land
$
15,416 
$
15,440 
NA
Fine art
602 
620 
NA
Computer equipment
19,158 
18,810 
3
Vehicles
176 
280 
3
Core processing system and software
27,034 
26,770 
3 to 5
Furniture, fixtures and equipment
15,461 
18,062 
3 to 15
Office building and improvements
112,400 
110,279 
10 to 40
Total
190,247 
190,261 
 
Accumulated depreciation and amortization
103,466 
100,408 
 
Total premises and equipment
$
86,781 
$
89,853 
 
Depreciation and amortization expense is calculated using the straight-line method and is included in occupancy and equipment and data processing expense
in the Consolidated Statements of Income. For the years ended December 31, 2024, and 2023, depreciation and amortization expense related to premises and
equipment totaled $8.0 million, and $8.5 million respectively.
F-41

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(9) Goodwill and Other Intangible Assets
The changes in the carrying value of goodwill for the periods indicated were as follows:
 
Year Ended December 31,
 
2024
2023
 
(In Thousands)
Balance at beginning of year
$
241,222 
$
160,427 
Additions
— 
80,795 
Balance at end of year
$
241,222 
$
241,222 
The following is a summary of the Company's other intangible assets:
 
At December 31, 2024
At December 31, 2023
 
Gross
Amount
Accumulated
Amortization
Carrying
Amount
Gross
Amount
Accumulated
Amortization
Carrying
Amount
 
(In Thousands)
Other intangible assets:
Core deposits
$
32,387 
$
16,015 
$
16,372 
$
68,560 
$
45,442 
$
23,118 
Trade name
1,600 
511 
1,089 
1,600 
511 
1,089 
Trust relationship
— 
— 
— 
1,568 
1,568 
— 
Other intangible
— 
— 
— 
442 
442 
— 
Total other intangible assets
$
33,987 
$
16,526 
$
17,461 
$
72,170 
$
47,963 
$
24,207 
At December 31, 2013, the Company concluded that the BankRI name would continue to be utilized in its marketing strategies; therefore, the trade name with
carrying value of $1.1 million, has an indefinite life and ceased to amortize.
The weighted-average amortization period for the core deposit intangible is 4.96 years. There were no impairment losses relating to other acquisition-related
intangible assets recorded during the years ended December 31, 2024, 2023 and 2022.
The estimated aggregate future amortization expense for other intangible assets for each of the next five years and thereafter is as follows:
Year ended December 31:
Amount
(In Thousands)
2025
$
5,562 
2026
4,324 
2027
3,243 
2028
2,162 
2029
1,081 
Thereafter
— 
Total
$
16,372 
(10) Other Assets
BOLI
BOLI is recorded at the cash surrender value of the policies, less any applicable cash surrender charges, and is recorded in other assets. As of December 31,
2024 and 2023, BankRI owned seven policies with a net cash surrender value of $45.9 million. As of December 31, 2024, PCSB owned four policies with a net cash
surrender value of $37.8 million. As of December 31, 2024 and 2023, Brookline Bank, as successor-in-interest to First Ipswich Bank owned two policies with a net
cash surrender value of $0.7 million, respectively.
F-42

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The Company recorded a total of $2.0 million, $2.1 million, and $1.0 million of tax exempt income from these policies in 2024, 2023, and 2022, respectively.
They are included in the Company’s other non-interest income in the consolidated statements of income. Included in the 2023 income is a death benefit received on
a former employee in the amount $256 thousand.
Affordable Housing Investments
The Company invests in affordable housing projects that benefit low- and moderate-income individuals. As of December 31, 2024, the Company had
investments in 21 of these projects. The project sponsor or general partner controls the project's management. In each case, the Company is a limited partner with
less than 99% of the outstanding equity interest in any single project.
The Company uses the proportional amortization method to account for investments in affordable housing projects. The proportional amortization method
calculation and the operating losses or gains for these investments are included as a component of the provision for income taxes in the Company’s consolidated
statements of income. Under the proportional amortization method, the initial costs of the investment in qualified affordable housing projects is amortized based on
the tax credits and other benefits received.
Further information regarding the Company's investments in affordable housing projects follows:
 
At December 31,
 
2024
2023
 
(In Thousands)
Investments in affordable housing projects included in other assets
$
29,634 
$
30,245 
Unfunded commitments related to affordable housing projects included in other liabilities
9,502 
14,888 
Investment in affordable housing tax credits
3,766 
2,951 
Investment in affordable housing tax benefits
657 
521 
For the year ended December 31,
2024
2023
2022
(In Thousands)
Investment amortization included in provision for income taxes
$
3,925  $
3,237  $
3,268 
Amount recognized as income tax benefit
657 
521 
547 
F-43

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(11) Deposits
A summary of deposits follows:
 
December 31, 2024
December 31, 2023
 
Amount
Weighted
Average
Rate
Amount
Weighted
Average
Rate
 
(Dollars in Thousands)
Demand checking accounts
$
1,692,394 
— %
$
1,678,406 
— %
NOW accounts
617,246 
0.57 %
661,863 
0.60 %
Savings accounts
1,721,247 
4.40 %
1,669,018 
2.63 %
Money market accounts
2,116,360 
2.58 %
2,082,810 
3.07 %
Total core deposit accounts
6,147,247 
2.18 %
6,092,097 
1.84 %
Certificate of deposit accounts maturing:
 
 
 
 
Within six months
$
1,287,280 
4.48 %
$
854,200 
3.62 %
After six months but within 1 year
492,098 
4.06 %
581,937 
4.43 %
After 1 year but within 2 years
78,153 
3.34 %
93,514 
3.69 %
After 2 years but within 3 years
13,188 
2.13 %
17,313 
1.53 %
After 3 years but within 4 years
12,028 
3.27 %
14,830 
1.82 %
After 4 years but within 5 years
2,498 
1.16 %
13,061 
3.15 %
5+ Years
199 
0.50 %
— 
— %
Total certificate of deposit accounts
1,885,444 
4.30 %
1,574,855 
3.88 %
Brokered deposit accounts
868,953 
4.42 %
881,173 
4.36 %
Total deposits
$
8,901,644 
2.85 %
$
8,548,125 
2.48 %
Certificate of deposit accounts issued in amounts of $250,000 or more totaled $613.2 million and $484.0 million as of December 31, 2024 and 2023,
respectively.
Interest expense on deposit balances is summarized as follows:
 
Year Ended December 31,
 
2024
2023
2022
 
(In Thousands)
Interest-bearing deposits:
 
 
 
NOW accounts
$
4,543 
$
4,275 
$
853 
Savings accounts
46,220 
27,974 
2,228 
Money market accounts
60,796 
58,153 
15,392 
Certificate of deposit accounts
76,134 
44,122 
8,210 
Brokered deposit accounts
45,270 
41,141 
2,909 
Total interest-bearing deposits
$
232,963 
$
175,665 
$
29,592 
Related Party Deposits
Deposit accounts of directors, executive officers and their affiliates totaled $89.8 million and $69.3 million as of December 31, 2024 and 2023, respectively.
Collateral Pledged to Deposits
As of December 31, 2024 and 2023, $97.0 million and $262.8 million, respectively, of collateral was pledged for municipal deposits and TT&L.
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BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(12) Borrowed Funds
Borrowed funds are comprised of the following:
 
At December 31,
 
2024
2023
 
(In Thousands)
Advances from the FHLB
$
1,355,926 
$
1,223,226 
Subordinated debentures and notes
84,328 
84,188 
Other borrowed funds
79,592 
69,256 
Total borrowed funds
$
1,519,846 
$
1,376,670 
Interest expense on borrowed funds for the periods indicated is as follows:
 
Year Ended December 31,
 
2024
2023
2022
 
(In Thousands)
Advances from the FHLB
$
55,851 
$
52,467 
$
9,355 
Subordinated debentures and notes
6,074 
5,476 
5,133 
Other borrowed funds
4,048 
3,968 
1,335 
Total interest expense on borrowed funds
$
65,973 
$
61,911 
$
15,823 
Collateral Pledged to Borrowed Funds
As of December 31, 2024 and 2023, $4.4 billion and $4.3 billion, respectively, of investment securities and loans and leases, were pledged as collateral for
repurchase agreements, swap agreements, FHLB/Federal Reserve Bank borrowings, municipal deposits, and TT&L. The Banks did not have any outstanding
Federal Reserve Bank borrowings as of December 31, 2024 and 2023.
Advances from the FHLB of Boston and FHLB of New York
FHLB advances mature as follows :
 
At December 31,
 
2024
2023
 
Amount
Weighted
Average
Rate
Amount
Weighted
Average
Rate
 
(Dollars in Thousands)
Within 1 year
$
1,278,372 
4.74 %
$
742,100 
4.96 %
Over 1 year to 2 years
70,000 
4.25 %
471,322 
4.88 %
Over 2 years to 3 years
316 
0.76 %
3,114 
2.62 %
Over 3 years to 4 years
750 
— %
340 
0.76 %
Over 4 years to 5 years
1,827 
1.05 %
750 
— %
Over 5 years
4,661 
3.35 %
5,716 
3.19 %
$
1,355,926 
4.70 %
$
1,223,342 
4.91 %
_______________________________________________________________________________
(1) Excludes $0.1 million in FHLB borrowings fair value adjustment related to the acquisition of PCSB in 2023.
Actual maturities of the advances may differ from those presented above since the FHLB has the right to call certain advances prior to the scheduled maturity.
The FHLB advances are secured by blanket pledge agreements which require the Banks to maintain certain qualifying assets as collateral. The Company's
remaining borrowing capacity from the FHLB of Boston and FHLB of New York for advances and repurchase agreements was $1.3 billion as of December 31,
2024. The total amount of qualifying collateral for FHLB and Federal Reserve Bank borrowings was $4.3 billion as of December 31, 2024.
(1)
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Other Borrowed Funds
Information concerning other borrowed funds is as follows for the periods indicated below:
 
Year Ended December 31,
 
2024
2023
 
(Dollars In Thousands)
Outstanding at end of year
$
79,592 
$
69,256 
Average outstanding for the year
78,859 
124,793 
Maximum outstanding at any month-end
127,505 
224,020 
Weighted average rate at end of year
4.33 %
4.66 %
Weighted average rate paid for the year
5.13 %
3.18 %
In addition to advances from the FHLB and subordinated debentures and notes, the Company utilizes other funding sources as part of the overall liquidity
strategy. Those funding sources include repurchase agreements and committed and uncommitted lines of credit with several financial institutions.
As of December 31, 2024, the Banks also have access to funding through certain uncommitted lines via AFX as well as committed and uncommitted lines
from other large financial institutions. As of December 31, 2024, the Company had no borrowings outstanding with these committed and uncommitted lines.
The Company has access to the Federal Reserve Discount Window to supplement its liquidity. The Company has $359.5 million of borrowing capacity at the
FRB as of December 31, 2024. As of December 31, 2024, the Company did not have any borrowings with the FRB outstanding.
As of December 31, 2024, the Company had $79.6 million in interest-bearing cash on hold from dealer counterparties. This compares to $60.0 million
outstanding as of December 31, 2023. This cash collateralizes the fair value of the dealer side of derivative transactions. The Company did not have any repurchase
agreements with customers as of December 31, 2024. As of December 31, 2023, the Company had repurchase agreements with customers of $9.3 million.
Subordinated Debentures and Notes
On September 15, 2014, the Company issued $75.0 million of 6.0% fixed-to-floating subordinated notes due September 15, 2029. The Company was
obligated to pay 6.0% interest semiannually between September 2014 and September 2024. Currently, the Company is obligated to pay 3-month CME term SOFR
plus spread adjustment of 0.26% plus 3.32% quarterly until the notes mature in September 2029.
The following table summarizes the Company's subordinated debentures and notes at the dates indicated.
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BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Carrying Amount
Issue Date
Rate
Maturity Date
Next Call Date
December 31, 2024
December 31, 2023
 
(Dollars in Thousands)
June 26, 2003
Variable;
3-month CME term SOFR + spread
adjustment of 0.26% + 3.10%
June 26, 2033
March 25, 2025
$
4,920 
$
4,904 
March 17, 2004
Variable;
3-month CME term SOFR + spread
adjustment of 0.26%  + 2.79%
March 17, 2034
March 16, 2025
4,880 
4,857 
September 15, 2014
Variable;
3-month CME term SOFR + spread
adjustment of 0.26% + 3.32%
September 15, 2029
March 17, 2025
74,528 
74,427 
Total
$
84,328 
$
84,188 
The above carrying amounts of the acquired subordinated debentures included $0.2 million of accretion adjustments and $0.5 million of capitalized debt
issuance costs as of December 31, 2024. This compares to $0.2 million of accretion adjustments and $0.6 million of capitalized debt issuance costs as of
December 31, 2023.
(13) Commitments and Contingencies
Off-Balance Sheet Financial Instruments
The Company is party to off-balance sheet financial instruments in the normal course of business to meet the financing needs of its customers and to reduce
its own exposure to fluctuations in interest rates. These financial instruments include loan commitments, standby and commercial letters of credits, and loan level
derivatives. According to GAAP, these financial instruments are not recorded in the financial statements until they are funded or related fees are incurred or
received.
The contract amounts reflect the extent of the involvement the Company has in particular classes of these instruments. Such commitments involve, to varying
degrees, elements of credit risk and interest-rate risk in excess of the amount recognized in the consolidated balance sheets. The Company's exposure to credit loss
in the event of non-performance by the counterparty is represented by the fair value of the instruments. The Company uses the same policies in making
commitments and conditional obligations as it does for on-balance sheet instruments.
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Financial instruments with off-balance-sheet risk at the dates indicated follow:
 
At December 31,
 
2024
2023
 
(In Thousands)
Financial instruments whose contract amounts represent credit risk:
 
 
Commitments to originate loans and leases:
 
 
Commercial real estate
$
11,126 
$
88,435 
Commercial
144,721 
279,001 
Residential mortgage
14,607 
26,170 
Unadvanced portion of loans and leases
1,076,783 
1,208,553 
Unused lines of credit:
 
 
Home equity
780,214 
762,235 
Other consumer
113,838 
114,816 
Other commercial
398 
475 
Unused letters of credit:
 
 
Financial standby letters of credit
12,702 
8,221 
Performance standby letters of credit
24,325 
29,187 
Commercial and similar letters of credit
2,330 
3,278 
Interest rate derivatives
225,000 
225,000 
Loan level derivatives:
Receive fixed, pay variable
1,672,948 
1,733,198 
Pay fixed, receive variable
1,672,948 
1,733,198 
Risk participation-out agreements
539,731 
542,387 
Risk participation-in agreements
102,198 
100,313 
Foreign exchange contracts:
Buys foreign currency, sells U.S. currency
5,849 
3,262 
Sells foreign currency, buys U.S. currency
5,408 
3,895 
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 the payment of a fee by the customer. Since some of the commitments are
expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each
customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if any, is based on management's credit evaluation of the borrower.
Standby and commercial letters of credits are conditional commitments issued by the Company to guarantee performance of a customer to a third party. These
standby and commercial letters of credit are primarily issued to support the financing needs of the Company's commercial customers. The credit risk involved in
issuing letters of credit is essentially the same as that involved in extending loans to customers.
The reserve for unfunded credit commitments, which is included in other liabilities, was $6.0 million and $19.8 million as of December 31, 2024 and
December 31, 2023, respectively. See Note 7, "Allowance for Credit Losses" for further discussion on the Company's methodology for determining the ACL, which
includes the reserve for unfunded commitments.
From time to time, the Company enters into loan level derivatives, risk participation agreements or foreign exchange contracts with commercial customers
and third-party financial institutions. These derivatives allow the Company to offer long-term fixed-rate commercial loans while mitigating the interest-rate or
foreign exchange risk of holding those loans. In a loan level derivative transaction, the Company lends to a commercial customer on a floating-rate basis and then
enters into a loan level derivative with that customer. Concurrently, the Company enters into offsetting swaps with a third-party financial
F-48

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
institution, effectively minimizing its net interest-rate risk exposure resulting from such transactions. The fair value of these derivatives are presented in Note 16,
"Derivative and Hedging Activities".
Lease Commitments
The Company leases certain office space under various noncancellable operating leases as well as other assets. These leases have terms ranging from 1 year to
over 19 years. Certain leases contain renewal options and escalation clauses which can increase rental expenses based principally on the consumer price index and
fair market rental value provisions. All of the Company's current outstanding leases are classified as operating leases.
The Company considered the following criteria when determining whether a contract contains a lease, the existence of an identifiable asset and the right to
obtain substantially all of the economic benefits from use of the asset through the period. The Company used the FHLB classic advance rates available as of the
lease's start dates as as the discount rate to determine the net present value of the remaining lease payments.
At December 31, 2024
At December 31, 2023
At December 31, 2022
(In Thousands)
The components of lease expense were as follow:
Operating lease cost
$
8,983 
$
8,527 
$
6,305 
Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases
$
9,044 
$
8,901 
$
6,481 
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases assets
$
18,093 
$
15,073 
$
2,082 
Operating leases liabilities
$
18,093 
$
16,672 
$
2,082 
Supplemental balance sheet information related to leases was as follows:
Operating Leases
Operating lease right-of-use assets
$
43,527 
$
30,863 
$
19,484 
Operating lease liabilities
44,785 
31,998 
19,484 
Weighted Average Remaining Lease Term
Operating leases
8.90
8.87
7.39
Weighted Average Discount Rate
Operating leases
4.1 %
4.0 %
3.5 %
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
A summary of future minimum rental payments under such leases at the dates indicated follows:
Year ended December 31,
Minimum Rental Payments
 
(In Thousands)
2025
$
9,156 
2026
8,739 
2027
7,684 
2028
6,129 
2029
4,172 
Thereafter
16,665 
Total
$
52,545 
Less imputed interest
(7,760)
$
44,785 
Certain leases contain escalation clauses for real estate taxes and other expenditures, which are not included above. Total rental expense was $9.0 million in
2024. This compares to total rent expense of $8.5 million and $6.0 million in 2023 and 2022, respectively.
A portion of the Company's headquarters was rented to third-party tenants which generated rental income of $0.2 million in 2024 compared to $0.2 million for
both 2023 and 2022 respectively.
Legal Proceedings
In the normal course of business, there are various outstanding legal proceedings. In the opinion of management, after consulting with legal counsel, the
consolidated financial position and results of operations of the Company are not expected to be affected materially by the outcome of such proceedings.
(14) Earnings per Share ("EPS")
The following table is a reconciliation of basic EPS and diluted EPS:
For the year ended December 31,
 
2024
2023
2022
 
Basic
Fully
Diluted
Basic
Fully
Diluted
Basic
Fully
Diluted
(Dollars in Thousands, Except Per Share Amounts)
Numerator:
Net income
$
68,715 
$
68,715 
$
74,999 
$
74,999 
$
109,744 
$
109,744 
Denominator:
Weighted average shares outstanding
88,983,248 
88,983,248 
88,230,681 
88,230,681 
77,079,278 
77,079,278 
Effect of dilutive securities
— 
319,056 
— 
219,965 
— 
272,556 
Adjusted weighted average shares
outstanding
88,983,248 
89,302,304 
88,230,681 
88,450,646 
77,079,278 
77,351,834 
EPS
$
0.77 
$
0.77 
$
0.85 
$
0.85 
$
1.42 
$
1.42 
(15) Comprehensive Income/(Loss)
Comprehensive income (loss) represents the sum of net income (loss) and other comprehensive income (loss). For the years ended December 31, 2024, 2023
and 2022, the Company’s other comprehensive income (loss) include the following three
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BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
components: (i) unrealized holding gains (losses) on investment securities available-for-sale; (ii) change in the fair value of cash flow hedges and (iii) adjustment of
accumulated obligation for postretirement benefits.
 
Changes in accumulated other comprehensive income (loss) by component, net of tax, were as follows for the periods indicated:
 
Year Ended December 31, 2024
 
Investment
Securities
 Available-for-Sale
Net Change in Fair Value
of Cash Flow Hedges
Postretirement
Benefits
Accumulated Other
Comprehensive
Income (Loss)
 
(In Thousands)
Balance at December 31, 2023
$
(52,546)
$
(1,581) $
1,329 
$
(52,798)
Other comprehensive income (loss)
(1,172)
(2,744)
1,127 
(2,789)
Reclassification adjustment for (income) expense recognized
in earnings
— 
3,002 
(297)
2,705 
Balance at December 31, 2024
$
(53,718)
$
(1,323) $
2,159 
$
(52,882)
 
Year Ended December 31, 2023
 
Investment
Securities
 Available-for-Sale
Net Change in Fair Value
of Cash Flow Hedges
Postretirement
Benefits
Accumulated Other
Comprehensive
Income (Loss)
 
(In Thousands)
Balance at December 31, 2022
$
(60,193)
$
(2,242)
$
488 
$
(61,947)
Other comprehensive income (loss)
7,647 
(2,026)
1,135 
6,756 
Reclassification adjustment for (income) expense recognized
in earnings
— 
2,687 
(294)
2,393 
Balance at December 31, 2023
$
(52,546)
$
(1,581)
$
1,329 
$
(52,798)
 
 
Year Ended December 31, 2022
 
Investment
Securities
 Available-for-Sale
Net Change in Fair Value
of Cash Flow Hedges
Postretirement
Benefits
Accumulated Other
Comprehensive
Income (Loss)
 
(In Thousands)
Balance at December 31, 2021
$
(183)
$
37 
$
36 
$
(110)
Other comprehensive income (loss)
(60,265)
(2,111)
452 
(61,924)
Reclassification adjustment for (income) expense recognized
in earnings
255 
(168)
— 
87 
Balance at December 31, 2022
$
(60,193)
$
(2,242) $
488 
$
(61,947)
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(16) Derivatives and Hedging Activities
The Company executes loan level derivative products such as interest rate swap agreements with commercial banking customers to aid them in managing their
interest rate risk. The interest rate swap contracts allow the commercial banking customers to convert floating rate loan payments to fixed rate loan payments. The
Company concurrently enters into offsetting swaps with a third party financial institution, effectively minimizing its net risk exposure resulting from such
transactions. The third party financial institution exchanges the customer's fixed rate loan payments for floating rate loan payments. As the interest rate swap
agreements associated with this program do not meet hedge accounting requirements, changes in the fair value are recognized directly in earnings. Based on the
Company's intended use for the loan level derivatives at inception, the Company designates the derivative as either an economic hedge of an asset or liability, or a
hedging instrument subject to the hedge accounting provisions of FASB ASC Topic 815, "Derivatives and Hedging".
The Company believes using interest rate derivatives adds stability to interest income and expense and allows the Company to manage its exposure to interest
rate movements. The Company enters into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash
flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed payments. The Company enters into
interest rate swaps as hedging instruments against the interest rate risk associated with the Company's FHLB borrowings and loan portfolio. For derivative
instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of OCI, and is
reclassified into earnings in the period that the hedged forecasted transaction affects earnings.
The following table reflects the Company's derivative positions as of the date indicated below for interest rate derivatives which qualify as cash flow hedges
for accounting purposes.
 
At December 31, 2024
Notional Amount
Average Maturity
Weighted Average Rate
Fair Value
 
Current Rate Paid
Received Fixed Swap
Rate
 
(in thousands)
(in years)
(in thousands)
Interest rate swaps on loans
$
225,000 
1.90
4.53 %
3.39 %
$
(2,033)
 
At December 31, 2023
Notional Amount
Average Maturity
Weighted Average Rate
Fair Value
 
Current Rate Paid
Received Fixed Swap
Rate
 
(in thousands)
(in years)
(in thousands)
Interest rate swaps on loans
$
225,000 
2.90
5.35 %
3.39 %
$
(2,608)
The Company utilizes risk participation agreements with other banks participating in commercial loan arrangements. Participating banks guarantee the
performance on borrower-related interest rate swap contracts. Risk participation agreements are derivative financial instruments and are recorded at fair value.
These derivatives are not designated as hedges and therefore, changes in fair value are recorded directly through earnings in other non-interest income at each
reporting period. Under a risk participation-out agreement, a derivative asset, the Company participates out a portion of the credit risk associated with the interest
rate swap position executed with the commercial borrower, for a fee paid to the participating bank.
The Company offers foreign exchange contracts to commercial borrowers to accommodate their business needs. These foreign exchange contracts do not
qualify as hedges for accounting purposes. To mitigate the market and liquidity risk associated with these foreign exchange contracts, the Company enters into
similar offsetting positions.
Asset derivatives and liability derivatives are included in other assets and accrued expenses and other liabilities on the consolidated balance sheets.
F-52

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The following tables present the Company's customer related derivative positions for the periods indicated below for those derivatives not designated as
hedging:
 
Notional Amount Maturing
 
Number of
Positions
Less than 1
year
Less than 2
years
Less than 3
years
Less than 4
years
Thereafter
Total
Fair Value
December 31, 2024
 
(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable
149 
$
153,724 
$
57,535 
$
237,601 
$
93,027 
$
1,131,061 
$
1,672,948 
$
95,720 
Pay fixed, receive variable
149 
153,724 
57,535 
237,601 
93,027 
1,131,061 
1,672,948 
95,720 
Risk participation-out
agreements
68 
33,305 
5,847 
59,464 
52,828 
388,287 
539,731 
495 
Risk participation-in agreements
10 
— 
22,518 
3,506 
25,346 
50,828 
102,198 
137 
Foreign exchange contracts
Buys foreign currency, sells U.S.
currency
26 
$
5,849 
$
— 
$
— 
$
— 
$
— 
$
5,849 
$
459 
Sells foreign currency, buys U.S.
currency
24 
5,408 
— 
— 
— 
— 
5,408 
482 
 
Notional Amount Maturing
 
Number of
Positions
Less than 1
year
Less than 2
years
Less than 3
years
Less than 4
years
Thereafter
Total
Fair Value
December 31, 2023
(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable
153 
$
69,135 
$
156,567 
$
66,330 
$
244,615 
$
1,196,551 
$
1,733,198 
$
80,118 
Pay fixed, receive variable
153 
69,135 
156,567 
66,330 
244,615 
1,196,551 
1,733,198 
80,118 
Risk participation-out agreements
67 
22,979 
33,409 
6,038 
64,875 
415,086 
542,387 
1,238 
Risk participation-in agreements
9 
— 
— 
23,155 
3,577 
73,581 
100,313 
310 
Foreign exchange contracts
Buys foreign currency, sells U.S.
currency
23 
$
3,262 
$
— 
$
— 
$
— 
$
— 
$
3,262 
$
139 
Sells foreign currency, buys U.S.
currency
28 
3,895 
— 
— 
— 
— 
3,895 
132 
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Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Changes in the fair value are recognized directly in the Company's consolidated statements of income and are included in other non-interest income in the
consolidated statements of income. The table below presents the net gain (loss) recognized in income due to changes in the fair value for the year ended
December 31, 2024 and 2023.
 
Year Ended December 31,
2024
2023
 
(In Thousands)
Net (loss) gain recognized in income on:
Net risk participation agreements
$
(571)
$
612 
Foreign exchange contracts
16 
(11)
Total $
(555)
$
601 
By using derivative financial instruments, the Company exposes itself to credit risk which is the risk of failure by the counterparty to perform under the terms
of the derivative contract. When the fair value of a derivative contract is positive, the counterparty owes the Company, which creates credit risk for the Company.
When the fair value of a derivative is negative, the Company owes the counterparty and, therefore, it does not possess credit risk. The credit risk in derivative
instruments is mitigated by entering into transactions with highly-rated counterparties that management believes to be creditworthy and by limiting the amount of
exposure to each counterparty by either cross collateralizing the underlying hedged loan or through bilateral posting of collateral to cover exposure. As the swaps
are subject to master netting agreements, the Company had limited exposure relating to loan level derivatives with institutional counterparties as of December 31,
2024 and 2023. The estimated net credit risk exposure for derivative financial instruments was zero as of December 31, 2024, and 2023.
Certain derivative agreements contain provisions that require the Company to post collateral if the derivative exposure exceeds a threshold amount. The
Company posted collateral of $0.9 million and $81.5 million in the normal course of business as of December 31, 2024 and 2023, respectively.
F-54

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The tables below present the offsetting of derivatives and amounts subject to master netting agreements not offset in the consolidated balance sheet at the dates
indicated:
 
At December 31, 2024
Gross
Amounts Recognized
Gross Amounts
Offset in the
Statement of
Financial Position
Net Amounts 
Presented in
the Statement of
Financial Position
Gross Amounts Not Offset in the
Statement of Financial Position
Net Amount
 
Financial
Instruments Pledged
Cash Collateral
Received/Paid
 
(In Thousands)
Asset derivatives
Derivatives designated as
hedging instruments:
Interest rate derivatives
$
18 
$
— 
$
18 
$
— 
$
— 
$
18 
Derivatives not designated as
hedging instruments:
Loan level derivatives
$
102,608 
$
— 
$
102,608 
$
— 
$
79,592 
$
23,016 
Risk participation-out
agreements
495 
— 
495 
— 
— 
495 
Foreign exchange contracts
482 
— 
482 
— 
— 
482 
Total $
103,603 
$
— 
$
103,603 
$
— 
$
79,592 
$
24,011 
Liability derivatives
Derivatives designated as
hedging instruments:
Interest rate derivatives
$
2,051 
$
— 
$
2,051 
$
— 
$
— 
$
2,051 
Derivatives not designated as
hedging instruments:
Loan level derivatives
$
102,608 
$
— 
$
102,608 
$
— 
$
870 
$
101,738 
Risk participation-in
agreements
137 
— 
137 
— 
— 
137 
Foreign exchange contracts
459 
— 
459 
— 
— 
459 
Total $
105,255 
$
— 
$
105,255 
$
— 
$
870 
$
104,385 
F-55

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
 
At December 31, 2023
Gross
Amounts Recognized
Gross Amounts
Offset in the
Statement of
Financial Position
Net Amounts 
Presented in
the Statement of
Financial Position
Gross Amounts Not Offset in the
Statement of Financial Position
Net Amount
 
Financial
Instruments Pledged
Cash Collateral
Pledged
 
(In Thousands)
Asset derivatives
Derivatives designated as
hedging instruments:
Interest rate derivatives
$
234 
$
— 
$
234 
$
— 
$
— 
$
234 
Derivatives not designated as
hedging instruments:
Loan level derivatives
$
99,876 
$
— 
$
99,876 
$
— 
$
— 
$
99,876 
Risk participation-out
agreements
1,238 
— 
1,238 
— 
— 
1,238 
Foreign exchange contracts
139 
— 
139 
— 
— 
139 
Total $
101,487 
$
— 
$
101,487 
$
— 
$
— 
$
101,487 
Liability derivatives
Derivatives designated as
hedging instruments:
Interest rate derivatives
$
2,842 
$
— 
$
2,842 
$
— 
$
— 
$
2,842 
Derivatives not designated as
hedging instruments:
Loan level derivatives
$
99,876 
$
— 
$
99,876 
$
20,353 
$
61,153 
$
18,370 
Risk participation-in
agreements
310 
— 
310 
— 
— 
310 
Foreign exchange contracts
132 
— 
132 
— 
— 
132 
Total $
103,160 
$
— 
$
103,160 
$
20,353 
$
61,153 
$
21,654 
The Company has agreements with certain of its derivative counterparties that contain credit-risk-related contingent provisions. These provisions provide the
counterparty with the right to terminate its derivative positions and require the Company to settle its obligations under the agreements if the Company defaults on
certain of its indebtedness or if the Company fails to maintain its status as a well-capitalized institution.
Fair Value
Year Ended December 31,
2024
Year Ended December 31,
2023
 
(Dollars in Thousands)
Derivatives designated as hedges
$
(2,033) $
(2,608)
(Loss) in OCI on derivatives (effective portion), net of tax
$
(1,324) $
(1,582)
Gain (loss) reclassified from OCI into interest income or interest expense (effective portion)
$
(4,036) $
(3,632)
The guidance in ASU 2017-12 requires that amounts in accumulated other comprehensive income that are included in the assessment of effectiveness should
be reclassified into earnings in the same period in which the hedged forecasted transactions impact earnings. A portion of the balance reported in accumulated other
comprehensive income related to derivatives will be reclassified to interest expense as interest payments are made or received on the Company’s interest rate swaps.
The Company monitors the risk of counterparty default on an ongoing basis.
F-56

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(17) Income Taxes
Income tax expense is comprised of the following amounts:
 
Year Ended December 31,
 
2024
2023
2022
 
(In Thousands)
Current provision:
 
 
 
Federal
$
16,464 
$
960 
$
17,414 
State
6,120 
1,788 
8,434 
Total current provision
22,584 
2,748 
25,848 
Deferred provision (benefit)
 
 
 
Federal
912 
12,922 
3,994 
State
(520)
3,245 
363 
Total deferred provision (benefit)
392 
16,167 
4,357 
Total provision for income taxes
$
22,976 
$
18,915 
$
30,205 
Total provision for income taxes differed from the amounts computed due to the following:
 
Year Ended December 31,
 
2024
2023
2022
 
(Dollars In Thousands)
Expected income tax expense at statutory federal tax rate
$
19,255 
$
19,722 
$
29,390 
State taxes, net of federal income tax benefit
4,395 
3,977 
6,950 
Bank-owned life insurance
(424)
(443)
(215)
Tax-exempt interest income
(597)
(307)
(163)
Merger and restructuring expense
528 
159 
302 
Energy tax credits
— 
(4,504)
(6,082)
Investments in affordable housing projects
(607)
(917)
(544)
Other, net
426 
1,228 
567 
Total provision for income taxes
$
22,976 
$
18,915 
$
30,205 
Effective income tax rate
25.1 %
20.1 %
21.6 %
The Company's effective tax rate was 25.1% as of December 31, 2024 compared to 20.1% as of December 31, 2023. The Company's effective tax rate was
higher in 2024 due to the Company's discontinued participation in energy tax credit investments, and decreased benefits in the Company's investments in affordable
housing projects.
F-57

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities at the dates indicated are as follows:
 
At December 31,
 
2024
2023
 
(In Thousands)
Deferred tax assets:
 
 
Allowance for credit losses
$
35,163 
$
36,168 
Right-of-use asset - operating leases
11,591 
8,153 
Deferred compensation
4,088 
3,022 
Identified intangible assets and goodwill
4,666 
5,138 
Supplemental Executive Retirement Plans
2,427 
2,522 
Net operating loss carryforwards
145 
83 
Postretirement benefits
811 
1,071 
Nonaccrual interest
780 
678 
Restricted stock and stock option plans
1,153 
1,039 
Unrealized loss on investment securities available-for-sale
15,629 
15,107 
Acquisition fair value adjustments
11,531 
14,735 
Other
166 
218 
Total gross deferred tax assets
88,150 
87,934 
Deferred tax liabilities:
 
 
Operating leases - liability
11,924 
8,448 
Identified intangible assets and goodwill
6,475 
8,361 
Deferred loan origination costs, net
3,926 
3,583 
Depreciation
723 
249 
Prepaid expense
377 
1,581 
Accrued Expense
8,101 
8,756 
Other
4 
4 
Total gross deferred tax liabilities
31,530 
30,982 
Net deferred tax asset
$
56,620 
$
56,952 
The Company has determined that a valuation allowance is not required for any of its deferred tax assets because it believes that it is more likely than not that
these assets will reverse against future taxable income.
The Company did not have any unrecognized tax benefits accrued as income tax payables, receivables or as deferred tax items as of December 31, 2024 and
2023. The Company files U.S. federal and state income tax returns. As of December 31, 2024, the Company is subject to potential examination by the
Massachusetts, Rhode Island, New York and several other state taxing authorities, along with the Internal Revenue Service for tax years after December 31, 2020.
(18) Stockholders' Equity
Preferred Stock
The Company is authorized to issue 50,000,000 shares of serial preferred stock, par value $0.01 per share, from time to time in one or more series subject to
limitations of law. The Board of Directors is authorized to fix the designations, powers, preferences, limitations and rights of the shares of each such series. As of
December 31, 2024, there were no shares of preferred stock issued.
F-58

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Capital Distributions and Restrictions Thereon
The Company is a legal entity separate and distinct from each of the Banks and Clarendon Private. The Company's primary source of revenue is dividends
paid to it by the Banks and Clarendon Private.
The FRB has authority to prohibit the Company from paying dividends to the Company's shareholders if such payment is deemed to be an unsafe or unsound
practice. The FRB has indicated generally that it may be an unsafe or unsound practice for bank holding companies to pay dividends unless the bank holding
company's net income over the preceding year is sufficient to fund the dividends and the expected rate of earnings retention is consistent with the organization's
capital needs, asset quality and overall financial condition.
The FRB also has the authority to use its enforcement powers to prohibit the Banks from paying dividends to the Company if, in its opinion, the payment of
dividends would constitute an unsafe or unsound practice. Federal law also prohibits the payment of dividends by a bank that will result in the bank failing to meet
its applicable capital requirements on a pro forma basis. In addition, a state bank that is a member of the Federal Reserve System may not declare or pay a dividend
if the total of all dividends declared during the calendar year, including the proposed dividend, exceeds the sum of the bank's net income (as reportable in its Reports
of Condition and Income) during the current calendar year and the retained net income of the prior two calendar years, unless the dividend has been approved by the
FRB. Payment of dividends by a bank is also restricted pursuant to various state regulatory limitations, including those enforced by the Massachusetts Division of
Banks in the case of Brookline Bank, the Banking Division of the Rhode Island Department of Business Regulation in the case of BankRI and New York State
Department of Financial Services in the case of PCSB Bank. In addition, pursuant to the Agreement and Plan of Merger, dated as of December 16, 2024, by and
among Berkshire Hills Bancorp, Inc. ("Berkshire"), Commerce Acquisition Sub, Inc., and the Company, during the pendency of the merger, the consent of Berkshire
would be required before the Company could pay a dividend or distribution on the Company's common stock other than a quarterly cash dividend of no more than
$0.18 per share of common stock. See Note 24, "Business Combination" for a further discussion of the proposed transaction with Berkshire.
Common Stock Repurchases
Repurchases may be made from time to time depending on market conditions and other factors, and will be conducted through open market or private
transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with the Securities and Exchange Commission Rule 10b5-1.
There is no guarantee as to the exact number of shares, if any, to be repurchased by the Company.
Restricted Retained Earnings
As part of the stock offering in 2002 and as required by regulation, Brookline Bank established a liquidation account for the benefit of eligible account holders
and supplemental eligible account holders who maintain their deposit accounts at Brookline Bank after the stock offering. In the unlikely event of a complete
liquidation of Brookline Bank (and only in that event), eligible depositors who continue to maintain deposit accounts at Brookline Bank shall be entitled to receive a
distribution from the liquidation account.
Accordingly, retained earnings of the Company are deemed to be restricted up to the balance of the liquidation account. The liquidation account balance is
reduced annually to the extent that eligible depositors have reduced their qualifying deposits as of each anniversary date. Subsequent increases in deposit account
balances do not restore an account holder's interest in the liquidation account.
The liquidation account totaled $8.2 million (unaudited), $8.9 million (unaudited), and $9.9 million (unaudited) at
December 31, 2024, 2023 and 2022, respectively.
(19) Regulatory Capital Requirements
The Company's primary source of cash is dividends from the Banks. The Banks are subject to certain restrictions on the amount of dividends that they may
declare without prior regulatory approval. In addition, the dividends declared cannot be in excess of the amount which would cause the Banks to fall below the
minimum required for capital adequacy purposes.
F-59

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The Company is a bank holding company within the meaning of the Bank Holding Company Act of 1956, as amended and as such, must comply with the
capital requirements of the FRB at the consolidated level. As member banks of the FRB, Brookline Bank, BankRI and PCSB Bank are also required to comply with
the regulatory capital requirement of the FRB.
The FRB has promulgated regulations imposing minimum capital requirements for bank holding companies and state member banks as well as prompt
corrective action regulations for state member banks that implement the system of prompt corrective action established by Section 38 of the FDIA. Under the
prompt corrective action regulations in effect as of December 31, 2024, a bank is "well-capitalized" if it has: (1) a total risk-based capital ratio of 10.0% or greater;
(2) a Tier 1 risk-based capital ratio of 8.0% or greater; (3) a common equity Tier 1 capital ratio of 6.5% or greater; (4) a Tier 1 leverage ratio of 5.0% or greater; and
(5) is not subject to any written agreement, order, capital directive or prompt corrective action directive to meet and maintain a specific capital level for any capital
measure.
Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken,
could have a direct material effect on the Company's financial statements. Under capital adequacy guidelines, the Company and each of the Banks must meet
specific capital guidelines that involve quantitative measures of the Company's and the Banks' assets, liabilities and certain off-balance sheet items as calculated
under regulatory accounting practices. In addition, the prompt corrective action rules applicable to state member banks establish a framework of supervisory actions
for state member banks that are not at least adequately capitalized. The Company's and the Banks' capital amounts and classification are also subject to qualitative
judgments by the regulators about components, risk weightings, and other factors. Bank holding companies are not subject to prompt corrective action requirements.
However, a bank holding company is considered "well capitalized" for purpose of the FRB's Regulation Y if the bank holding company maintains on a consolidated
basis a total risk-based capital ratio of 10.0% or greater and a Tier 1 risk-based capital ratio of 6.0% or greater and is not subject to any written agreement under
capital directive or prompt correction action directive issued by the FRB to meet and maintain a specific capital level for any capital measure.
The Company and the Banks are required to maintain a capital conservation buffer composed of common equity Tier 1 capital equal to 2.5% of risk-weighted
assets above the amounts required to be adequately capitalized in order to avoid limitations on capital distributions, including dividend payments and certain
discretionary bonus payments to executive officers. Capital ratios required to be considered well-capitalized exceed the ratios required under the capital
conservation buffer requirement at December 31, 2024.
F-60

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
As of December 31, 2024, the Company and the Banks exceeded all regulatory capital requirements and were considered “well-capitalized” under applicable
rules. The following table presents actual and required capital ratios as of December 31, 2024 for the Company and the Banks.
 
Actual
Minimum Required for
Capital Adequacy
Purposes
Minimum Required for
Fully Phased in Capital
Adequacy Purposes plus
Capital Conservation
Buffer
Minimum Required to
be Considered
 “Well-Capitalized” Under
Prompt Corrective Action
Provisions
 
Amount
Ratio
Amount
Ratio
Amount
Ratio
Amount
Ratio
 
(Dollars in Thousands)
At December 31, 2024:
 
 
 
 
 
 
Brookline Bancorp, Inc.
 
 
 
 
 
 
Common equity Tier 1 capital ratio 
$
1,022,454 
10.46 %
$
439,870 
4.50 %
$
684,243 
7.00 %
N/A
N/A
Tier 1 leverage capital ratio 
1,032,255 
9.06 %
455,742 
4.00 %
455,742 
4.00 %
N/A
N/A
Tier 1 risk-based capital ratio 
1,032,255 
10.56 %
586,509 
6.00 %
830,887 
8.50 %
N/A
N/A
Total risk-based capital ratio 
1,214,208 
12.42 %
782,099 
8.00 %
1,026,504 
10.50 %
N/A
N/A
Brookline Bank
 
 
 
 
 
 
Common equity Tier 1 capital ratio 
$
584,420 
10.47 %
$
251,183 
4.50 %
$
390,730 
7.00 %
$
362,820 
6.50 %
Tier 1 leverage capital ratio 
584,420 
9.30 %
251,363 
4.00 %
251,363 
4.00 %
314,204 
5.00 %
Tier 1 risk-based capital ratio 
584,420 
10.47 %
334,911 
6.00 %
474,457 
8.50 %
446,548 
8.00 %
Total risk-based capital ratio 
654,287 
11.73 %
446,232 
8.00 %
585,679 
10.50 %
557,789 
10.00 %
BankRI
 
 
 
 
 
 
Common equity Tier 1 capital ratio 
$
294,573 
10.53 %
$
125,886 
4.50 %
$
195,823 
7.00 %
$
181,835 
6.50 %
Tier 1 leverage capital ratio 
294,573 
8.90 %
132,392 
4.00 %
132,392 
4.00 %
165,490 
5.00 %
Tier 1 risk-based capital ratio 
294,573 
10.53 %
167,848 
6.00 %
237,784 
8.50 %
223,797 
8.00 %
Total risk-based capital ratio 
328,646 
11.75 %
223,759 
8.00 %
293,684 
10.50 %
279,699 
10.00 %
PCSB Bank
Common equity Tier 1 capital ratio 
197,296 
13.73 %
64,664 
4.50 %
100,588 
7.00 %
93,403 
6.50 %
Tier 1 leverage capital ratio 
197,296 
10.11 %
78,060 
4.00 %
78,060 
4.00 %
97,575 
5.00 %
Tier 1 risk-based capital ratio 
197,296 
13.73 %
86,218 
6.00 %
122,142 
8.50 %
114,958 
8.00 %
Total risk-based capital ratio 
214,879 
14.95 %
114,985 
8.00 %
150,918 
10.50 %
143,732 
10.00 %
_______________________________________________________________________________
(1) Common equity Tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets.
(2) Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by average assets.
(3) Tier 1 risk-based capital ratio is calculated by dividing Tier 1 capital by risk-weighted assets.
(4) Total risk-based capital ratio is calculated by dividing total capital by risk-weighted assets.
(1)
(2)
(3)
(4)
(1)
(2)
(3)
(4)
(1)
(2)
(3)
(4)
(1)
(2)
(3)
(4)
F-61

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The following table presents actual and required capital ratios as of December 31, 2023 for the Company and the Banks under the regulatory capital rules then
in effect.
Actual
Minimum Required for
Capital Adequacy
Purposes
Minimum Required for
Fully Phased in Capital
Adequacy Purposes plus
Capital Conservation
Buffer
Minimum Required to
be Considered
 “Well-Capitalized” Under
Prompt Corrective Action
Provisions
Amount
Ratio
Amount
Ratio
Amount
Ratio
Amount
Ratio
(Dollars in Thousands)
At December 31, 2023:
 
 
 
 
 
 
Brookline Bancorp, Inc.
 
 
 
 
 
 
Common equity Tier 1 capital ratio 
$
994,023 
10.25 %
$
436,400 
4.50 %
$
678,845 
7.00 %
N/A
N/A
Tier 1 leverage capital ratio 
1,003,784 
9.02 %
445,137 
4.00 %
445,137 
4.00 %
N/A
N/A
Tier 1 risk-based capital ratio 
1,003,784 
10.35 %
581,904 
6.00 %
824,364 
8.50 %
N/A
N/A
Total risk-based capital ratio 
1,199,686 
12.37 %
775,868 
8.00 %
1,018,327 
10.50 %
N/A
N/A
Brookline Bank
 
 
 
 
 
 
Common equity Tier 1 capital ratio 
$
580,148 
10.39 %
$
251,267 
4.50 %
$
390,860 
7.00 %
$
362,941 
6.50 %
Tier 1 leverage capital ratio 
580,148 
9.46 %
245,306 
4.00 %
245,306 
4.00 %
306,632 
5.00 %
Tier 1 risk-based capital ratio 
580,148 
10.39 %
335,023 
6.00 %
474,616 
8.50 %
446,697 
8.00 %
Total risk-based capital ratio 
650,135 
11.64 %
446,828 
8.00 %
586,462 
10.50 %
558,535 
10.00 %
BankRI
Common equity Tier 1 capital ratio 
$
283,673 
10.20 %
$
125,150 
4.50 %
$
194,678 
7.00 %
$
180,772 
6.50 %
Tier 1 leverage capital ratio 
283,673 
8.89 %
127,637 
4.00 %
127,637 
4.00 %
159,546 
5.00 %
Tier 1 risk-based capital ratio 
283,673 
10.20 %
166,866 
6.00 %
236,394 
8.50 %
222,489 
8.00 %
Total risk-based capital ratio 
318,462 
11.46 %
222,312 
8.00 %
291,785 
10.50 %
277,890 
10.00 %
PCSB
Common equity Tier 1 capital ratio 
185,337 
13.50 %
61,779 
4.50 %
96,101 
7.00 %
89,236 
6.50 %
Tier 1 leverage capital ratio 
185,337 
9.78 %
75,802 
4.00 %
75,802 
4.00 %
94,753 
5.00 %
Tier 1 risk-based capital ratio 
185,337 
13.50 %
82,372 
6.00 %
116,694 
8.50 %
109,829 
8.00 %
Total risk-based capital ratio 
201,314 
14.66 %
109,858 
8.00 %
144,188 
10.50 %
137,322 
10.00 %
_______________________________________________________________________________
(1) Common equity Tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets.
(2) Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by average assets.
(3) Tier 1 risk-based capital ratio is calculated by dividing Tier 1 capital by risk-weighted assets.
(4) Total risk-based capital ratio is calculated by dividing total capital by risk-weighted assets.
(1)
(2)
(3)
(4)
(1)
(2)
(3)
(4)
(1)
(2)
(3)
(4)
(1)
(2)
(3)
(4)
F-62

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(20) Employee Benefit Plans
Postretirement Benefits
Postretirement benefits are provided for part of the annual expense of health insurance premiums for certain retired employees and their dependents. No
contributions are made by the Company to invest in assets allocated for the purpose of funding this benefit obligation. The following table presents the change in
plan assets and change in benefit obligation:
Year Ended
December 31,
2024
2023
2022
(In Thousands)
Change in plan assets:
Fair value of plan assets at beginning of year
$
— 
$
— 
$
— 
Employer contributions
34 
29 
34 
Benefits paid
(34)
(29)
(34)
Fair value of plan assets at end of year
$
— 
$
— 
$
— 
Change in benefit obligation:
Benefit obligation at beginning of year
$
1,557 
$
1,530 
$
2,026 
Service cost
40 
39 
64 
Interest cost
76 
70 
55 
Estimated benefits paid
(34)
(29)
(34)
Actuarial (gain) loss
(422)
(53)
(581)
Benefit obligation at end of year
$
1,217 
$
1,557 
$
1,530 
Funded status at end of year
$
1,217 
$
1,557 
$
1,530 
Accumulated benefit obligation at end of year
$
1,217 
$
1,557 
$
1,530 
The liability for the postretirement benefits included in accrued expenses and other liabilities was $1.2 million, $1.6 million, and $1.5 million as of
December 31, 2024, 2023 and 2022, respectively.
The following table presents the components of net periodic postretirement benefit cost and other amounts recognized in other comprehensive income:
 
Year Ended
December 31,
 
2024
2023
2022
 
(In Thousands)
Net periodic benefit expense:
 
 
 
Service cost
$
40 
$
39 
$
64 
Interest cost
76 
70 
55 
Prior service credit
— 
— 
— 
Actuarial gain
(64)
(85)
— 
Net periodic benefit expense
$
52 
$
24 
$
119 
Changes in postretirement benefit obligation recognized in other comprehensive income:
 
 
 
Net actuarial (loss) gain
64 
$
85 
$
611 
Prior service credit
— 
— 
— 
Total pre-tax changes in postretirement benefit obligation recognized in other comprehensive
income
$
64 
$
85 
$
611 
F-63

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The discount rate used to determine the actuarial present value of projected postretirement benefit obligations was 5.51% in 2024, 4.82% in 2023 and 5.02%
in 2022. There is no estimated prior service credit that will be amortized from accumulated other comprehensive income into net periodic benefit cost in 2025.
The actual health care trend used to measure the accumulated postretirement benefit obligation in 2024 for plan participants below age 65 and for plan
participants over age 65 was 6.8% and (16.2)%, respectively. In 2023, the rate for plan participants below age 65 and for plan participants over age 65 was (1.1)%
and 3.4%, respectively. The health care trend rates for 2023 and 2024 are based on actual changes in medical premium rates for those years. The rates to be used in
2025 through 2028 are expected to be in the range of 8% to 6.5% and to decline gradually thereafter to 4.5%. Assumed health care trend rates may have a significant
effect on the amounts reported for the postretirement benefit plan. A 1% change in assumed health care cost trend rates would have the following effects:
Year Ended 
 
December 31, 2024
1% Increase
1% Decrease
 
(In Thousands)
Effect on total service and interest cost components of net periodic postretirement benefit costs
$
20 
$
(16)
Effect on the accumulated postretirement benefit obligation
191 
(159)
401(k) Plan
The Company administers one 401(k) plan, which is a qualified, tax-exempt profit-sharing plan with a salary deferral feature under Section 401(k) of the
Internal Revenue Code. Each employee, excluding temporary employees, who has attained the age of 21 is eligible to participate in the 401(k) plan by making
voluntary contributions, subject to certain limits based on federal tax laws. The Company makes a matching contribution of the amount contributed by eligible
employees, up to 5% of the employee's yearly compensation. Expenses associated with the plans were $5.0 million in 2024, $4.6 million in 2023, and $3.8 million
in 2022.
Nonqualified Deferred Compensation Plan
The Company also maintains a Nonqualified Plan under which certain participants may contribute the amounts they are precluded from contributing to the
Company's 401(k) plan because of the qualified plan limitations, and additional compensation deferrals that may be advantageous for personal income tax or other
planning reasons. Expenses associated with the Nonqualified Plan in 2024, 2023 and 2022 were $687.6 thousand, $645.8 thousand, and $477.6 thousand,
respectively. Accrued liabilities associated with the Nonqualified Plan in 2024, 2023, and 2022 were $1.3 thousand, $1.3 thousand, and $1.3 thousand, respectively.
Supplemental Executive Retirement Agreements
The Company acquired two SERPs as part of its acquisition of BankRI. The Company maintains the SERPs for certain senior executives who are entitled to an
annual retirement benefit. As of December 31, 2024, there were 14 participants in the SERPs. The Company funded a Rabbi Trust to provide a partial funding
source for the Company's liabilities under the SERPs. In 2016, a portion of the Company's BOLI assets were transferred into the Rabbi Trust as a replacement for
the funds previously held in the Rabbi Trust. In 2020, additional BOLI assets were transferred into the Rabbi Trust. The Company records the liability for the
SERPs based on an actuarial calculation in accordance with GAAP, and no actuarial gains and losses are recognized.
Total expense under the SERPs for the year ended December 31, 2024 was $93 thousand compared to an expense in 2023 of $589.0 thousand and a benefit in
2022 of $2.1 million. Aggregate benefits payable included in accrued expenses and other liabilities as of December 31, 2024 and 2023 were $10.3 million and $10.8
million, respectively.
The nominal discount rate used to determine the actuarial present value of projected benefits under the agreements was 5.50% and 5.00% in the years 2024
and 2023, respectively.
F-64

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Defined Benefit Pension Plan
As part of the acquisition of PCSB, the Company acquired a pension plan covering certain employees (the "PCSB Pension Plan"). The PCSB Pension Plan has
been terminated and the Company has filed a request for a determination letter with the Internal Revenue Service. The PCSB Pension Plan is currently over-funded
with net assets of $7.4 million that are included in other assets in the Company's balance sheet. During the years ended December 31, 2024 and December 31, 2023,
the PCSB Pension Plan had unrealized gains of $544 thousand and $903 thousand, respectively, reflected in other comprehensive income. No contributions were
made to the PCSB Pension Plan in 2024 or 2023.
Employee Stock Ownership Plan
The Company previously maintained an ESOP which was terminated pending final regulatory and government approval. There was no compensation and
employee benefit expense related to ESOP in 2024 or 2023. Compensation and employee benefits expense related to the ESOP was $0.4 million in 2022.
Share-Based Compensation Plans
As of December 31, 2024, the Company had one active equity plan: the 2021 Plan with 1,750,000 authorized shares. As a result of the 2021 Plan having been
approved by the Company's stockholders at the 2021 annual meeting of stockholders, the Company discontinued granting awards under the 2014 Plan, and no
further shares will be granted as awards under the 2014 Plan.
Of the awarded shares, generally 50% vest ratably over three years with one-third of such shares vesting at each of the first, second and third anniversary dates
of the awards. The remaining 50% of each award has a cliff vesting schedule and vest three years after the award date based on the level of the Company's
achievement of identified performance targets in comparison to the level of achievement of such identified performance targets by a defined peer group. The
specific performance measure targets are approved annually by the Compensation Committee and are disclosed in the Company's SEC filings. If a grantee leaves
the Company prior to the vest date of an award, any unvested shares are forfeited. Dividends declared with respect to shares awarded will be held by the Company
and paid to the grantee only when the shares vest.
Shares issued upon vesting may be either authorized but unissued shares or reacquired shares held by the Company as treasury shares. Any shares not issued
because vesting requirements are not met will be retired back to treasury and be made available again for issuance under the 2021 Plan.
Total expense for the 2021 Plan and the 2014 Plan was $3.9 million in 2024, $4.1 million in 2023 and $3.3 million in 2022, respectively. Total income tax
benefits on vested awards was $0.0 million in 2024, $0.0 million in 2023, and $0.0 million in 2022. There were no income tax benefits on the 2024 vesting due to
the stock price at the vesting date being lower overall than the stock price at the grant date. Dividends paid on unvested awards under the 2021 Plan and the 2014
Plan were $0.3 million in 2024, $0.3 million in 2023, and $0.2 million in 2022.
The following table presents information about the Company's restricted stock awards as of and for the year ending December 31, 2024:
Restricted Stock Awards
Outstanding
Weighted Average Price
per Share
 
(Dollars in Thousands, Except Per Share Amounts)
Restricted Stock Awards:
 
 
 
Outstanding at December 31, 2023
749,099 
$
12.06 
 
Granted
432,279 
9.84 
 
Vested
(270,826)
12.65 
 
Forfeited / Canceled
(30,304)
12.19 
 
Outstanding at December 31, 2024
880,248 
$
10.79 
Unrecognized compensation cost
$
5,202 
Weighted average remaining recognition period (months)
21 months
F-65

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The following table presents information about the securities authorized for issuance under the Company's equity compensation plan:
Number of Securities to Be
Issued Upon Exercise of
Outstanding Options,
Warrants, and rights (a)
Weighted Average Exercise
Price of Outstanding Options,
Warrants and Right (b)
Number of
Securities
Remaining
Available for
Future Issuance
(Excluding
Securities in
Column (a))
(c)
Equity compensation plans approved by security holders 
— $
— 
366,368
Equity compensation plans not approved by security holders
—
— 
—
Total
— $
— 
366,368
_______________________________________________________________________________
(1) Consists of the 2021 Plan.
(2) Shares available for issuance under the 2021 Plan. The Company has only issued restricted stock awards under the 2021 Plan.
(21) Fair Value of Financial Instruments
A description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring and non-recurring basis, as well as the
general classification of such instruments pursuant to the valuation hierarchy, is set forth below. There were no changes in the valuation techniques used during
2024 and 2023.
(1)
(2)
F-66

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
The following table set forth the carrying value of assets and liabilities measured at fair value on a recurring basis at December 31, 2024 and 2023:
 
Carrying Value as of December 31, 2024
 
Level 1
Level 2
Level 3
Total
 
(In Thousands)
Assets:
 
 
 
 
Investment securities available-for-sale:
 
 
 
 
GSE debentures
$
— 
$
176,294 
$
— 
$
176,294 
GSE CMOs
— 
55,543 
— 
55,543 
GSE MBSs
— 
148,285 
— 
148,285 
Municipal obligations
— 
3,198 
17,056 
20,254 
Corporate debt obligations
— 
9,853 
2,434 
12,287 
U.S. Treasury bonds
— 
481,872 
— 
481,872 
Foreign government obligations
— 
499 
— 
499 
Total investment securities available-for-sale
$
— 
$
875,544 
$
19,490 
$
895,034 
Interest rate derivatives
— 
$
18 
— 
$
18 
Loan level derivatives
— 
102,608 
— 
102,608 
Risk participation-out agreements
— 
495 
— 
495 
Foreign exchange contracts
— 
482 
— 
482 
Liabilities:
 
 
 
 
Interest rate derivatives
$
— 
$
2,051 
$
— 
$
2,051 
Loan level derivatives
— 
102,608 
— 
102,608 
Risk participation-in agreements
— 
137 
— 
137 
Foreign exchange contracts
— 
459 
— 
459 
F-67

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
 
Carrying Value as of December 31, 2023
 
Level 1
Level 2
Level 3
Total
 
(In Thousands)
Assets:
 
 
 
 
Investment securities available-for-sale:
 
 
 
 
GSE debentures
$
— 
$
201,127 
$
— 
$
201,127 
GSE CMOs
— 
61,617 
— 
61,617 
GSE MBSs
— 
169,997 
— 
169,997 
Municipal obligations
— 
3,398 
15,524 
18,922 
Corporate debt obligations
— 
17,337 
2,379 
19,716 
U.S. Treasury bonds
— 
444,737 
— 
444,737 
Foreign government obligations
— 
485 
— 
485 
Total investment securities available-for-sale
$
— 
$
898,698 
$
17,903 
$
916,601 
Interest rate derivatives
— 
234 
— 
234 
Loan level derivatives
— 
99,876 
— 
99,876 
Risk participation-out agreements
— 
1,238 
— 
1,238 
Foreign exchange contracts
— 
139 
— 
139 
Liabilities:
 
 
 
 
Interest rate derivatives
$
— 
$
2,842 
$
— 
$
2,842 
Loan level derivatives
$
— 
$
99,876 
$
— 
$
99,876 
Risk participation-in agreements
— 
310 
— 
310 
Foreign exchange contracts
— 
132 
— 
132 
Investment Securities Available-for-Sale
The fair value of investment securities is based principally on market prices and dealer quotes received from third-party and nationally-recognized pricing
services for identical investment securities such as U.S. Treasury and agency securities. These prices are validated by comparing the primary pricing source with an
alternative pricing source when available. When quoted market prices for identical securities are unavailable, the Company uses market prices provided by
independent pricing services based on recent trading activity and other observable information, including but not limited to market interest-rate curves, referenced
credit spreads and estimated prepayment speeds where applicable. These investments include GSE debentures, GSE mortgage-related securities, SBA commercial
loan asset backed securities, corporate debt securities, municipal obligations and U.S. Treasury bonds, all of which are included in Level 2. As of December 31,
2024, certain corporate debt securities and municipal obligations were valued using pricing models included in Level 3.
Additionally, management reviews changes in fair value from period to period and performs testing to ensure that prices received from the third parties are
consistent with management's expectation of the market. Changes in the prices obtained from the pricing service are analyzed from month to month, taking into
consideration changes in market conditions including changes in mortgage spreads, changes in U.S. Treasury security yields and changes in generic pricing of 15-
year and 30-year securities. Additional analysis may include a review of prices provided by other independent parties, a yield analysis, a review of average life
changes using Bloomberg analytics and a review of historical pricing for a particular security.
Derivatives and Hedging Instruments
The fair value of interest rate derivatives designated as hedging instruments, loan level derivatives, risk participation agreements (RPA in/out), and foreign
exchange contracts represent a Level 2 valuation and are based on settlement values adjusted for credit risks associated with the counterparties and the Company
and observable market interest rate curves and foreign exchange rates where applicable. Credit risk adjustments consider factors such as the likelihood of default by
the Company and its counterparties, its net exposures and remaining contractual life. To date, the Company has not realized any losses due to a counterparty's
inability to pay any net uncollateralized position. Refer also to Note 16, "Derivatives and Hedging Activities."
F-68

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
There were no transfers between levels for assets and liabilities recorded at fair value on a recurring basis during 2024 or 2023.
The following tables summarize information about significant unobservable inputs related to the Company's categories of Level 3 financial assets and
liabilities measured on a recurring basis.
Quantitative Information About Level 3 Fair Value Measurements - Recurring Basis
Financial Instrument
Estimated Fair Value
Valuation Technique(s)
Significant Unobservable
Inputs
Range of Inputs
Weighted Average
(In Thousands)
December 31, 2024
Assets
Municipal obligations
$
17,056  Discounted Cash Flow
Discount Rate from
Bloomberg BVAL
0.00%-3.46%
1.06 %
Corporate debt obligations
2,434  Observable Bids
Bloomberg TRACE
The following table summarizes the changes in estimated fair value for all assets and liabilities measured at estimated fair value on a recurring basis using
significant unobservable inputs (Level 3).
Changes in Estimated Fair Value of Level 3 Financial Assets and Liabilities - Recurring Basis
Twelve Months Ended December 31, 2024
(In Thousands)
Municipal obligations
Corporate debt obligations
Beginning balance
$
15,524 
$
2,379 
Purchases
11,526 
— 
Unrealized gains (losses) included in comprehensive income
(241)
32 
Transfer in
— 
— 
Transfers out
— 
— 
Sales
— 
— 
Maturities, calls, and paydowns 
(9,753)
23 
Ending balance
$
17,056 
$
2,434 
_______________________________________________________________________________
(1) The $23 thousand includes amortization of purchase discount which exceeded maturities, calls and paydowns during the period resulting in an increase in balance.
(1)
F-69

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis
Assets and liabilities measured at fair value on a non-recurring basis as of December 31, 2024 and 2023 are summarized below:
 
Carrying Value as of December 31, 2024
 
Level 1
Level 2
Level 3
Total
 
(In Thousands)
Assets measured at fair value on a non-recurring basis:
 
 
 
 
Collateral-dependent impaired loans and leases
$
— 
$
— 
$
28,100 
$
28,100 
OREO
— 
— 
700 
700 
Repossessed assets
— 
403 
— 
403 
Total assets measured at fair value on a non-recurring basis
$
— 
$
403 
$
28,800 
$
29,203 
 
Carrying Value as of December 31, 2023
 
Level 1
Level 2
Level 3
Total
 
(In Thousands)
Assets measured at fair value on a non-recurring basis:
 
 
 
 
Collateral-dependent impaired loans and leases
$
— 
$
— 
$
16,720 
$
16,720 
OREO
$
— 
$
— 
$
780 
$
780 
Repossessed assets
— 
914 
— 
914 
Total assets measured at fair value on a non-recurring basis
$
— 
$
914 
$
17,500 
$
18,414 
Collateral-Dependent Impaired Loans and Leases
For nonperforming loans and leases where the credit quality of the borrower has deteriorated significantly, fair values of the underlying collateral were
estimated using purchase and sales agreements (Level 2), or comparable sales or recent appraisals (Level 3), adjusted for selling costs and other expenses.
Other Real Estate Owned
The Company records OREO at the lower of cost or fair value. In estimating fair value, the Company utilizes purchase and sales agreements (Level 2) or
comparable sales, recent appraisals or cash flows discounted at an interest rate commensurate with the risk associated with these cash flows (Level 3), adjusted for
selling costs and other expenses.
Repossessed Assets
Repossessed assets are carried at estimated fair value less costs to sell based on auction pricing (Level 2).
The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a recurring basis at the
dates indicated.
Fair Value
Valuation Technique
At December 31, 2024
At December 31, 2023
 
(Dollars in Thousands)
Collateral-dependent impaired loans and leases
$
28,100 
$
16,720 
Appraisal of collateral 
Other real estate owned
700 
780 
Appraisal of collateral 
_______________________________________________________________________________
 Fair value is generally determined through independent appraisals of the underlying collateral. The Company may also use another available source of collateral assessment to determine a reasonable
estimate of the fair value of the collateral. Appraisals may be adjusted by management for qualitative factors such as economic factors and estimated liquidation expenses. The range of the unobservable
inputs used may vary but is generally 0% - 10% on the discount for costs to sell and 0% - 15% on appraisal adjustments.
(1)
(1)
(1)
F-70

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Summary of Estimated Fair Values of Financial Instruments
The following table presents the carrying amount, estimated fair value, and placement in the fair value hierarchy of the Company's financial instruments at the
dates indicated. This table excludes financial instruments for which the carrying amount approximates fair value. Financial assets for which the fair value
approximates carrying value include cash and cash equivalents, restricted equity securities, and accrued interest receivable. Financial liabilities for which the fair
value approximates carrying value include non-maturity deposits, short-term borrowings, and accrued interest payable. There were no transfers between levels
during 2024.
 
 
 
Fair Value Measurements
 
Carrying
Value
Estimated
Fair Value
Level 1
Inputs
Level 2
Inputs
Level 3
Inputs
 
(In Thousands)
At December 31, 2024
 
 
 
 
 
Financial assets:
 
 
 
 
 
Loans and leases, net
$
9,654,205 
$
9,298,057 
$
— 
$
— 
$
9,298,057 
Financial liabilities:
 
 
 
 
Certificates of deposits and brokered deposits
2,754,397 
2,749,092 
— 
2,749,092 
— 
Borrowed funds
1,519,846 
1,547,183 
— 
1,547,183 
— 
At December 31, 2023
 
 
 
 
 
Financial assets:
 
 
 
 
 
Loans and leases, net
$
9,524,067 
$
9,230,864 
$
— 
$
— 
$
9,230,864 
Financial liabilities:
 
Certificates of deposits and brokered deposits
2,456,028 
2,443,772 
— 
2,443,772 
— 
Borrowed funds
1,376,670 
1,375,506 
— 
1,375,506 
— 
Loans and Leases
The fair values of performing loans and leases was estimated by segregating the portfolio into its primary loan and lease categories—commercial real estate
mortgage, multi-family mortgage, construction, commercial, equipment financing, condominium association, residential mortgage, home equity and other
consumer. These categories were further disaggregated based upon significant financial characteristics such as type of interest rate (fixed / variable) and payment
status (current / past-due). Using the exit price valuation method, the Company discounts the contractual cash flows for each loan category using interest rates
currently being offered for loans with similar terms to borrowers of similar quality and incorporates estimates of future loan prepayments.
Deposits
The fair values of deposit liabilities with no stated maturity (demand, NOW, savings and money market savings accounts) are equal to the carrying amounts
payable on demand. The fair value of certificates of deposit represents contractual cash flows discounted using interest rates currently offered on deposits with
similar characteristics and remaining maturities. The fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by
the Company's core deposit relationships (deposit-based intangibles).
Borrowed Funds
The fair value of federal funds purchased is equal to the amount borrowed. The fair value of FHLB advances and repurchase agreements represents
contractual repayments discounted using interest rates currently available for borrowings with similar characteristics and remaining maturities. The fair values
reported for retail repurchase agreements are based on the discounted value of contractual cash flows. The discount rates used are representative of approximate
rates currently offered on borrowings with similar characteristics and maturities. The fair values reported for subordinated deferrable interest debentures are based
on the discounted value of contractual cash flows. The discount rates used are representative of approximate rates currently offered on instruments with similar
terms and maturities.
F-71

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
(22) Condensed Parent Company Financial Statements
Condensed Parent Company Balance Sheets as of December 31, 2024 and 2023 and Statements of Income for the years ended December 31, 2024, 2023 and
2022 are as follows. The Statement of Stockholders' Equity is not presented below as the parent company's stockholders' equity is that of the consolidated company.
Balance Sheets
 
At December 31,
 
2024
2023
 
(In Thousands)
ASSETS
 
 
Cash and due from banks
$
31,958 
$
22,798 
Short-term investments
35 
33 
Total cash and cash equivalents
31,993 
22,831 
Restricted equity securities
152 
152 
Premises and equipment, net
2,391 
2,701 
Deferred tax asset
3,525 
2,310 
Investment in subsidiaries, at equity
1,241,520 
1,220,425 
Goodwill
35,267 
35,267 
Other assets
26,318 
26,533 
Total assets
$
1,341,166 
$
1,310,219 
LIABILITIES AND STOCKHOLDERS' EQUITY
 
 
Borrowed funds
$
84,328 
$
84,188 
Accrued expenses and other liabilities
34,899 
27,387 
Total liabilities
119,227 
111,575 
 
 
Stockholders' equity:
 
 
Common stock, $0.01 par value; 200,000,000 shares authorized; 96,998,075 shares issued and 96,998,075 shares issued,
respectively
970 
970 
Additional paid-in capital
902,584 
902,659 
Retained earnings
458,943 
438,722 
Accumulated other comprehensive loss
(52,882)
(52,798)
Treasury stock, at cost; 7,019,384 shares and 7,354,399 shares, respectively
(87,676)
(90,909)
Total stockholders' equity
1,221,939 
1,198,644 
Total liabilities and stockholders' equity
$
1,341,166 
$
1,310,219 
F-72

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Statements of Income
 
Year Ended December 31,
 
2024
2023
2022
(In Thousands)
Interest and dividend income:
 
 
 
Dividend income from subsidiaries
$
57,000 
$
46,500 
$
130,500 
Short-term investments
114 
1 
— 
ESOP loan to Brookline Bank
— 
— 
13 
Total interest and dividend income
57,114 
46,501 
130,513 
Interest expense:
 
 
 
Borrowed funds
6,261 
5,503 
5,188 
       Total interest expense
6,261 
5,503 
5,188 
Net interest income
50,853 
40,998 
125,325 
Non-interest income:
Gain on securities, net
— 
— 
6,106 
Other
14 
391 
425 
Total non-interest income
14 
391 
6,531 
Non-interest expense:
 
 
 
Compensation and employee benefits
504 
334 
1,531 
Occupancy
1,623 
1,602 
1,735 
Equipment and data processing 
(1,642)
(1,187)
(255)
Directors' fees
127 
483 
435 
Franchise taxes
251 
251 
250 
Insurance
762 
832 
663 
Professional services 
(733)
(95)
829 
Advertising and marketing
36 
34 
82 
Merger and restructuring expense
3,378 
6,182 
2,249 
Other 
(1,063)
(1,648)
(1,360)
Total non-interest expense
3,243 
6,788 
6,159 
Income before income taxes
47,624 
34,601 
125,697 
Credit for income taxes
(1,912)
(3,124)
(421)
Income before equity in undistributed income of subsidiaries
49,536 
37,725 
126,118 
Equity in undistributed income of subsidiaries
19,179 
37,274 
(16,374)
Net income
$
68,715 
$
74,999 
$
109,744 
_______________________________________________________________________________
(1) The Parent Company received a net benefit in 2024, 2023 and 2022 from the intercompany allocation of expense that is eliminated in consolidation.
(1)
(1)
(1)
F-73

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Statements of Cash Flows
 
Year Ended December 31,
 
2024
2023
2022
(In Thousands)
Cash flows from operating activities:
 
 
 
Net income attributable to parent company
$
68,715 
$
74,999 
$
109,744 
Adjustments to reconcile net income to net cash provided from operating activities:
 
 
 
Equity in undistributed income of subsidiaries
(19,179)
(37,274)
16,374 
Depreciation of premises and equipment
1,477 
1,514 
1,211 
Amortization of debt issuance costs
100 
100 
100 
Other operating activities, net
7,274 
(22,515)
(11,989)
Net cash provided from operating activities
58,387 
16,824 
115,440 
Cash flows from investing activities:
 
 
 
Repayment of ESOP loan by Brookline Bank
— 
— 
252 
Proceeds from sale of restricted equity securities
— 
— 
100 
Purchase of premises and equipment
(1,167)
(48)
(3,257)
Outlays for PCSB acquisition
— 
(107,332)
— 
Net cash used for investing activities
(1,167)
(107,380)
(2,905)
Cash flows from financing activities:
 
 
 
Payment of dividends on common stock
(48,058)
(47,926)
(40,077)
Net cash used for from financing activities
(48,058)
(47,926)
(40,077)
Net increase (decrease) in cash and cash equivalents
9,162 
(138,482)
72,458 
Cash and cash equivalents at beginning of year
22,831 
161,313 
88,855 
Cash and cash equivalents at end of year
$
31,993 
$
22,831 
$
161,313 
(23) Revenue from Contracts with Customers
Overview
Revenue from contracts with customers in the scope of ASC 606 ("Topic 606") is measured based on the consideration specified in the contract with a
customer and excludes amounts collected on behalf of third parties. The Company recognizes revenue from contracts with customers when it satisfies its
performance obligations.
The Company’s performance obligations are generally satisfied as services are rendered and can either be satisfied at a point in time or over time. Unsatisfied
performance obligations at the report date are not material to our consolidated financial statements.
In certain cases, other parties are involved with providing services to our customers. If the Company is a principal in the transaction (providing services itself
or through a third party on its behalf), revenues are reported based on the gross consideration received from the customer and any related expenses are reported in
gross non-interest expense. If the Company is an agent in the transaction (referring to another party to provide services), the Company reports its net fee or
commission retained as revenue.
A substantial portion of the Company’s revenue is specifically excluded from the scope of Topic 606. This exclusion is associated with financial instruments,
including interest income on loans and investment securities, in addition to loan derivative income and gains on loan and investment sales. For the revenue that is
in-scope of Topic 606, the following is a description of principal activities from which the Company generates its revenue from contracts with customers, separated
by the timing of revenue recognition.
F-74

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
Revenue Recognized at a Point in Time
The Company recognizes revenue that is transactional in nature and such revenue is earned at a point in time. Revenue that is recognized at a point in time
includes card interchange fees (fee income related to debit card transactions), ATM fees, wire transfer fees, overdraft charge fees, and stop-payment and returned
check fees. Additionally, revenue is collected from loan fees, such as letters of credit, line renewal fees and application fees. Such revenue is derived from
transactional information and is recognized as revenue immediately as the transactions occur or upon providing the service to complete the customer’s transaction.
Revenue Recognized Over Time
The Company recognizes revenue over a period of time, generally monthly, as services are performed and performance obligations are satisfied. Such revenue
includes commissions on investments, insurance sales and service charges on deposit accounts. Fee revenue from service charges on deposit accounts represents the
service charges assessed to customers who hold deposit accounts at the Banks.
(24) Segment Reporting
An operating segment is defined as a component of a business for which separate financial information is available that is evaluated regularly by the CODM in
deciding how to allocate resources and evaluate performance.
The Company is a bank holding company operating through a single business segment, which derives interest income on loan and lease products the Company
offers to customers. Substantially all of the Company’s total revenues, pre-tax income, and assets is driven by the banking business. While revenue generating
activities are aligned through our bank subsidiaries, expense activities, including funding costs, credit losses and operating expenses, are managed for the Company
as a whole. As a result, detailed profitability for each subsidiary bank is not used by the CODM.
The accounting policies of the segment are the same as those described in Note 1, "Basis of Presentation". The Chairman and Chief Executive Officer of the
Company acts as the Company’s CODM. The CODM regularly reviews comprehensive financial information with the reported measures focused on net interest
income and net income. This financial information reviewed is consistent with the information presented within the Company’s financial statements.
The CODM uses the reported measures of net interest income and net income to assess performance by comparing to and monitoring against budget and prior
year results. This information is used to manage resources to drive business and net earnings growth, including investment in key strategic priorities, as well as
determine the Company's ability to return capital to shareholders.
F-75

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
The following table presents segment information with respect to our single reportable segment:
Year Ended December 31,
2024
2023
2022
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases
$
587,929 
$
533,739 
$
328,769 
Debt securities
26,252 
29,648 
13,079 
Restricted equity securities
5,786 
5,571 
1,898 
Short-term investments
8,554 
8,329 
1,440 
Total interest and dividend income
628,521 
577,287 
345,186 
Interest expense:
Deposits
232,963 
175,665 
29,592 
Borrowed funds
65,973 
61,911 
15,823 
Total interest expense
298,936 
237,576 
45,415 
Net interest income
329,585 
339,711 
299,771 
Provision for credit losses on loans
22,003 
37,868 
8,525 
(Credit) provision for credit losses on investments
(359)
339 
102 
Net interest income after provision for credit losses
307,941 
301,504 
291,144 
Non-interest income:
Deposit fees
10,548 
11,611 
10,919 
Loan fees
2,394 
2,036 
2,208 
Loan level derivative income, net
1,658 
3,890 
4,246 
Gain on sales of investment securities, net
— 
1,704 
321 
Gain on sales of loans and leases
951 
2,581 
4,136 
Other
10,064 
10,112 
6,517 
Total non-interest income
25,615 
31,934 
28,347 
Non-interest expense:
Compensation and employee benefits
143,723 
138,895 
113,487 
Occupancy
22,056 
20,203 
16,002 
Equipment and data processing
27,374 
27,004 
20,833 
Professional services
7,133 
7,226 
5,060 
FDIC insurance
8,044 
7,844 
3,177 
Advertising and marketing
5,240 
4,724 
4,980 
Amortization of identified intangible assets
6,746 
7,840 
494 
Merger and acquisition expense
4,201 
7,411 
2,249 
Other
17,348 
18,377 
13,260 
Total non-interest expense
241,865 
239,524 
179,542 
Income before income taxes
91,691 
93,914 
139,949 
Provision for income taxes
22,976 
18,915 
30,205 
Net income
68,715 
74,999 
109,744 
The Company's segment assets represent total assets as presented on the Consolidated Balance Sheets.
(25) Business Combination
Proposed Transaction with Berkshire Hills Bancorp, Inc.
On December 16, 2024, the Company, Berkshire, and Commerce Acquisition Sub, Inc., a Delaware corporation and wholly-owned subsidiary of the Berkshire
formed solely to facilitate the merger (“Merger Sub”), 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, and
immediately thereafter, Brookline will merge with and into Berkshire, with Berkshire as the surviving entity (collectively, the “Merger”). As a result of the Merger,
the separate corporate existence of the Company will cease, and Berkshire will continue as the surviving
F-76

Table of Contents
BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Continued)
corporation. Under the terms of the Merger Agreement, which was unanimously approved by the Boards of Directors of both companies, each outstanding share of
Company common stock will be exchanged for the right to receive 0.42 shares of Berkshire common stock. Holders of Company common stock will receive cash in
lieu of fractional shares of Berkshire common stock. As a result of the proposed transaction and a $100 million common stock offering by Berkshire to support the
proposed transaction, Berkshire stockholders will own approximately 51%, Brookline stockholders will own approximately 45%, and investors in new shares will
own approximately 4% of the outstanding shares of the combined company. The proposed 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 the Company
stockholders.
F-77

DESCRIPTION OF EQUITY SECURITIES REGISTERED
UNDER SECTION 12 OF THE EXCHANGE ACT
Brookline Bancorp, Inc. (the “Company”) has one class of securities registered under Section 12 of the Securities Exchange Act of 1934, as amended: common
stock, par value $0.01 per share (the “Common Stock”). The Company’s Common Stock is traded on the Nasdaq Global Select Market  under the symbol
“BRKL.”
The following is a description of the material terms and provisions of the Company’s Common Stock. It may not contain all information that is important to you.
You can access complete information by referring to the Company’s certificate of incorporation and bylaws and the Delaware General Corporation Law. The
certificate of incorporation and bylaws are attached as exhibits to the Annual Report on Form 10-K to which this description is an exhibit.
General
Under the certificate of incorporation, the Company has authority, without further shareholder action, to issue up to 200,000,000 shares of Common Stock. The
Company may amend its certificate of incorporation from time to time to increase the number of authorized shares of Common Stock with shareholder approval.
The Company may issue Common Stock from time to time. The Company’s Board of Directors must approve the amount of capital stock the Company sells and the
price for which it is sold. Holders of Common Stock do not have any preferential rights or preemptive rights to buy or subscribe for capital stock or other securities
that the Company may issue. The Company’s Common Stock does not have any redemption rights, sinking fund provisions or any conversion rights.
Dividends
The Company may pay dividends on its Common Stock if, after giving effect to the distribution, it would be able to pay its indebtedness as the indebtedness comes
due in the usual course of business and its total assets exceed the sum of its liabilities and the amount needed, if the Company were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of any holders of capital stock who have preference in the event of dissolution. The holders of
Common Stock are entitled to receive and share equally in dividends as may be declared by the Company’s Board of Directors out of funds legally available
therefor. If the Company issues shares of preferred stock, the holders thereof may have a priority over the holders of the Common Stock with respect to dividends.
Liquidation
In the event of any liquidation, dissolution or winding up of the Company, and subject to the preferential rights of any other class or series of stock, holders of
shares of the Common Stock are entitled to receive all assets of the Company available for distribution, after payment or provision for payment of all debts and
liabilities of the Company, including deposit accounts and accrued interest thereon, and after distribution of the balance in the liquidation account to eligible account
holders.
Voting Rights
Subject to the provisions of the certificate of incorporation, each holder of Common Stock is entitled to one vote per share and has no right to cumulate votes in the
election of directors. Holders of the Company’s Common Stock elect the Company’s Board of Directors and act on all other matters as are required to be presented
to them under Delaware law or as are otherwise presented to them by the Company’s Board of Directors.
Under the certificate of incorporation, any person who beneficially owns more than 10% of the then-outstanding shares of the Company’s Common Stock will not
be entitled or permitted to vote any shares of Common Stock held in excess of the 10% limit.
All matters to be voted on by stockholders, other than a contested election of directors, must be approved by a majority of the votes cast at a meeting of stockholders
duly called and at which a quorum is present, subject to any voting rights granted to holders of any then outstanding preferred stock. In contested elections of
directors, which generally will include any situation in which the Company receives a notice that a stockholder has nominated a person for election to the
Company’s Board of Directors at a meeting of the stockholders of the Company that is not
sm
ACTIVE/102295989.5

withdrawn on or before the tenth day before the Company first mails its notice for such meeting to its stockholders, a plurality voting standard will apply.
ACTIVE/102295989.5

February 26, 2025
Carl M. Carlson
4 Temple Road
Wellesley, MA 02482
Re:    Retention Bonus
Dear Mr. Carlson,
As you know, Brookline Bancorp, Inc. (“Brookline”) has entered into that certain Agreement and Plan of Merger, by and among
Berkshire Hills Bancorp, Inc. (“Berkshire”), Commerce Acquisition Sub, Inc., and Brookline, pursuant to which Brookline and
Berkshire intend to combine in a strategic business combination transaction (the “Merger”). In connection with the Merger, the Company
would like to incentivize you to remain employed with the Company and the combined business following the Merger, and is pleased to
inform you that it has decided to award you a retention bonus in an aggregate amount of $3,000,000 (the “Bonus”), subject to and in
accordance with the terms of this letter agreement (the “Agreement”).
1.
Payment of Bonus. The Bonus shall be earned and become payable in two equal installments, as follows: (i) fifty percent
of the Bonus (the “First Payment”) will become earned and payable to you, for services rendered by you during the First Performance
Period, on the first anniversary of the closing date of the Merger, and (ii) fifty percent of the Bonus (the “Second Payment”, and each of
the First Payment and the Second Payment are a “Payment”) will become earned and payable to you, for services rendered by you
during the Second Performance Period, on the second anniversary of the closing date of the Merger (each, a “Vesting Date”), in each
case, subject to your continued employment through the applicable Vesting Date. If earned, each Payment shall be paid to you in cash on
or within 30 days following the applicable Vesting Date.
Notwithstanding the foregoing, in the event of a termination of your employment by the Company or its affiliates without Cause,
by you for Good Reason, or due to your death or Disability, the Company shall pay you the full amount of any unpaid Payment
(including the full First Payment and full Second Payment to the extent unpaid) in a single lump sum cash payment on the first regularly
scheduled payroll cycle following the date of termination of employment.
For purposes of this Agreement, “Cause”, “Good Reason” and “Disability” shall each have the meanings set forth in your
Employment Agreement and the following terms shall have the meanings set forth below:
“Company” means Brookline, and after the Merger becomes effective, the surviving company in the Merger.
“First Performance Period” means the period commencing on the closing date of the Merger and ending on the day prior
to the first anniversary of the closing date of the Merger.
ACTIVE/133176538.12

Carl M. Carlson
February 26, 2025
Page 2
“Second Performance Period” means the period commencing on the first anniversary of the closing date of the Merger
and ending on the second anniversary of the closing date of the Merger.
2.
Additional Limitation.
(a)
Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any
compensation, payment or distribution by the Company to or for the benefit of you, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”) and the applicable regulations thereunder (the “Aggregate Payments”),
would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not
below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which you become subject to
the excise tax imposed by Section 4999 of the Code; provided, however, that such reduction shall only occur if it would result in
you receiving a higher After Tax Amount (as defined below) than you would receive if the Aggregate Payments were not subject
to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse
chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the
transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash
payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits;
provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation
under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas.
Reg. §1.280G-1, Q&A-24(b) or (c).
(b)
For purposes of this Agreement, the “After Tax Amount” means the amount of the Aggregate Payments
less all federal, state, and local income, excise and employment taxes imposed on you as a result of your receipt of the Aggregate
Payments. For purposes of determining the After Tax Amount, you will be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made,
and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of
the maximum reduction in federal income taxes which could be obtained for the calendar year in which such state and local taxes
are paid from deduction of such state and local taxes.
(c)
The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to this
Section 2 shall be made by a nationally recognized accounting firm selected by the Company, other than the Company’s external
auditor (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and you within 15
business days of the Date of Termination, if
ACTIVE/133176538.12

Carl M. Carlson
February 26, 2025
Page 3
applicable, or at such earlier time as is reasonably requested by the Company or you. Any determination by the Accounting Firm
shall be binding upon the Company and you.
(d)
The Accounting Firm currently retained by the Company, after consultation with you and other Company
executives, for rendering advice on certain tax related considerations and making tax related determinations, such as those
addressed in this Section 2, is Golden Parachute Tax Solutions LLC. If the Company should elect in the future to retain some
other accounting firm to render similar advice and determinations, it will also consult with you, and to the extent that any such
determinations may directly affect and be binding upon you individually, such consultations will be undertaken with you in your
individual, as opposed to executive, capacity.
3.
Amendment and Termination. The Agreement may only be amended by a written instrument executed by the Company
and you.
4.
No Contract for Continuing Services. This Agreement shall not be construed as creating any contract for continued
services between you and the Company or any of its subsidiaries and nothing herein contained shall create and express or implied
contract of employment or alter the terms of your existing Employment Agreement, dated as of September 22, 2021, by and among you,
the Company, Brookline Bank, and Bank Rhode Island (the “Employment Agreement”).
5.
Governing Law. The Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of
Massachusetts, without regard to principles of conflict of laws of such Commonwealth.
6.
Tax Matters. The Company shall have the right to deduct from all payments hereunder any taxes required by law to be
withheld with respect to such payments. The Bonus is intended to be exempt from the requirements of Section 409A of the Code as a
“short-term deferral.”
7.
Integration. This Agreement constitutes the entire agreement between the Company and you concerning the subject matter
hereof and supersedes any written or oral agreement between such parties concerning such subject matter.
8.
Benefits and Burdens. This Agreement shall inure to the benefit of and be binding upon the Company and you, and its and
your respective successors, executors, administrators, heirs and permitted assigns.
9.
Enforceability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a
court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances
other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this
Agreement shall be valid and enforceable to the fullest extent permitted by law.
ACTIVE/133176538.12

Carl M. Carlson
February 26, 2025
Page 4
10.
Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The
failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of
this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
11.
Notices. Any notices, requests, demands, and other communications provided for by this Agreement shall be sufficient if
in writing and delivered in person or sent by registered or certified mail, postage prepaid, to you at the last address you filed in writing
with the Company, or to the Company at its main office, attention of the Board of Directors.
12.
No Transfers. Your right to the Bonus may not be assigned or transferred.
[SIGNATURE PAGE FOLLOWS]
ACTIVE/133176538.12

Carl M. Carlson
February 26, 2025
Page 5
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
BROOKLINE BANCORP, INC.
By: _________________________________
Name: Paul A. Perrault
Title: Chairman and Chief Executive Officer
EXECUTIVE
___________________________________
Carl M. Carlson
Signature Page to the Retention Bonus Agreement
ACTIVE/133176538.12

            Confidential
February 26, 2025
Michael W. McCurdy
8 Sagamore Road
Wellesley, MA 02482
Re:    Retention Bonus
Dear Mr. McCurdy,
As you know, Brookline Bancorp, Inc. (“Brookline”) has entered into that certain Agreement and Plan of Merger, by and among
Berkshire Hills Bancorp, Inc. (“Berkshire”), Commerce Acquisition Sub, Inc., and Brookline, pursuant to which Brookline and
Berkshire intend to combine in a strategic business combination transaction (the “Merger”). In connection with the Merger, the Company
would like to incentivize you to remain employed with the Company and the combined business following the Merger, and is pleased to
inform you that it has decided to award you a retention bonus in an aggregate amount of $3,000,000 (the “Bonus”), subject to and in
accordance with the terms of this letter agreement (the “Agreement”).
1.
Payment of Bonus. The Bonus shall be earned and become payable in two equal installments, as follows: (i) fifty percent
of the Bonus (the “First Payment”) will become earned and payable to you, for services rendered by you during the First Performance
Period, on the first anniversary of the closing date of the Merger, and (ii) fifty percent of the Bonus (the “Second Payment”, and each of
the First Payment and the Second Payment are a “Payment”) will become earned and payable to you, for services rendered by you
during the Second Performance Period, on the second anniversary of the closing date of the Merger (each, a “Vesting Date”), in each
case, subject to your continued employment through the applicable Vesting Date. If earned, each Payment shall be paid to you in cash on
or within 30 days following the applicable Vesting Date.
Notwithstanding the foregoing, in the event of a termination of your employment by the Company or its affiliates without Cause,
by you for Good Reason, or due to your death or Disability, the Company shall pay you the full amount of any unpaid Payment
(including the full First Payment and full Second Payment to the extent unpaid) in a single lump sum cash payment on the first regularly
scheduled payroll cycle following the date of termination of employment.
For purposes of this Agreement, “Cause”, “Good Reason” and “Disability” shall each have the meanings set forth in your
Employment Agreement and the following terms shall have the meanings set forth below:
“Company” means Brookline, and after the Merger becomes effective, the surviving company in the Merger.
ACTIVE/133176538.12

Michael W. McCurdy
February 26, 2025
Page 2
“First Performance Period” means the period commencing on the closing date of the Merger and ending on the day prior
to the first anniversary of the closing date of the Merger.
“Second Performance Period” means the period commencing on the first anniversary of the closing date of the Merger
and ending on the second anniversary of the closing date of the Merger.
2.
Additional Limitation.
(a)
Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any
compensation, payment or distribution by the Company to or for the benefit of you, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”) and the applicable regulations thereunder (the “Aggregate Payments”),
would be subject to the excise tax imposed by Section 4999 of the Code, then the Aggregate Payments shall be reduced (but not
below zero) so that the sum of all of the Aggregate Payments shall be $1.00 less than the amount at which you become subject to
the excise tax imposed by Section 4999 of the Code; provided, however, that such reduction shall only occur if it would result in
you receiving a higher After Tax Amount (as defined below) than you would receive if the Aggregate Payments were not subject
to such reduction. In such event, the Aggregate Payments shall be reduced in the following order, in each case, in reverse
chronological order beginning with the Aggregate Payments that are to be paid the furthest in time from consummation of the
transaction that is subject to Section 280G of the Code: (1) cash payments not subject to Section 409A of the Code; (2) cash
payments subject to Section 409A of the Code; (3) equity-based payments and acceleration; and (4) non-cash forms of benefits;
provided that in the case of all the foregoing Aggregate Payments all amounts or payments that are not subject to calculation
under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any amounts that are subject to calculation under Treas.
Reg. §1.280G-1, Q&A-24(b) or (c).
(b)
For purposes of this Agreement, the “After Tax Amount” means the amount of the Aggregate Payments
less all federal, state, and local income, excise and employment taxes imposed on you as a result of your receipt of the Aggregate
Payments. For purposes of determining the After Tax Amount, you will be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation applicable to individuals for the calendar year in which the determination is to be made,
and state and local income taxes at the highest marginal rates of individual taxation in each applicable state and locality, net of
the maximum reduction in federal income taxes which could be obtained for the calendar year in which such state and local taxes
are paid from deduction of such state and local taxes.
(c)
The determination as to whether a reduction in the Aggregate Payments shall be made pursuant to this
Section 2 shall be made by a nationally recognized accounting firm selected by the Company, other than the Company’s external
ACTIVE/133176538.12

Michael W. McCurdy
February 26, 2025
Page 3
auditor (the “Accounting Firm”), which shall provide detailed supporting calculations both to the Company and you within 15
business days of the Date of Termination, if applicable, or at such earlier time as is reasonably requested by the Company or you.
Any determination by the Accounting Firm shall be binding upon the Company and you.
(d)
The Accounting Firm currently retained by the Company, after consultation with you and other Company
executives, for rendering advice on certain tax related considerations and making tax related determinations, such as those
addressed in this Section 2, is Golden Parachute Tax Solutions LLC. If the Company should elect in the future to retain some
other accounting firm to render similar advice and determinations, it will also consult with you, and to the extent that any such
determinations may directly affect and be binding upon you individually, such consultations will be undertaken with you in your
individual, as opposed to executive, capacity.
3.
Amendment and Termination. The Agreement may only be amended by a written instrument executed by the Company
and you.
4.
No Contract for Continuing Services. This Agreement shall not be construed as creating any contract for continued
services between you and the Company or any of its subsidiaries and nothing herein contained shall create and express or implied
contract of employment or alter the terms of your existing Employment Agreement, dated as of September 22, 2021, by and among you,
the Company, Brookline Bank, and Bank Rhode Island (the “Employment Agreement”).
5.
Governing Law. The Agreement shall be construed in accordance with and governed by the laws of the Commonwealth of
Massachusetts, without regard to principles of conflict of laws of such Commonwealth.
6.
Tax Matters. The Company shall have the right to deduct from all payments hereunder any taxes required by law to be
withheld with respect to such payments. The Bonus is intended to be exempt from the requirements of Section 409A of the Code as a
“short-term deferral.”
7.
Integration. This Agreement constitutes the entire agreement between the Company and you concerning the subject matter
hereof and supersedes any written or oral agreement between such parties concerning such subject matter.
8.
Benefits and Burdens. This Agreement shall inure to the benefit of and be binding upon the Company and you, and its and
your respective successors, executors, administrators, heirs and permitted assigns.
9.
Enforceability. If any portion or provision of this Agreement shall to any extent be declared illegal or unenforceable by a
court of competent jurisdiction, then the remainder of this Agreement, or the application of such portion or provision in circumstances
other than those as to which it is so declared illegal or unenforceable, shall not be affected thereby, and each
ACTIVE/133176538.12

Michael W. McCurdy
February 26, 2025
Page 4
portion and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.
10.
Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The
failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of
this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
11.
Notices. Any notices, requests, demands, and other communications provided for by this Agreement shall be sufficient if
in writing and delivered in person or sent by registered or certified mail, postage prepaid, to you at the last address you filed in writing
with the Company, or to the Company at its main office, attention of the Board of Directors.
12.
No Transfers. Your right to the Bonus may not be assigned or transferred.
[SIGNATURE PAGE FOLLOWS]
ACTIVE/133176538.12

Michael W. McCurdy
February 26, 2025
Page 5
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written above.
BROOKLINE BANCORP, INC.
By: _________________________________
Name: Paul A. Perrault
Title: Chairman and Chief Executive Officer
EXECUTIVE
___________________________________
Michael W. McCurdy
Signature Page to the Retention Bonus Agreement
ACTIVE/133176538.12

EMPLOYMENT AGREEMENT
This Employment Agreement (“Agreement”) is made as of February 26, 2025, by and among Berkshire Hills Bancorp, Inc., a
Delaware corporation with its principal administrative office at 60 State Street, Boston, MA 02109 (the “Holding Company”), Brookline
Bank, a Massachusetts chartered trust company, and Mark J. Meiklejohn (the “Executive”). Collectively the Holding Company and
Brookline Bank shall be referred to herein as the “Company,” and either the Holding Company or Brookline Bank may satisfy the
Company’s obligations under this Agreement.
WHEREAS, the Executive currently serves as the Chief Credit Officer of Brookline Bancorp, Inc.;
WHEREAS, pursuant to that Agreement and Plan of Merger, dated December 16, 2024 (the “Merger Agreement”) by and among
the Holding Company, Commerce Acquisition Sub, Inc., and Brookline Bancorp, Inc., the holding company of Brookline Bank
(“Brookline”), the Holding Company and Brookline intend to combine in a strategic business combination transaction with the Holding
Company being the surviving entity, and immediately thereafter Berkshire Bank, PCSB Bank, and Bank Rhode Island will merge with
and into Brookline Bank, with Brookline Bank being the surviving entity (the surviving entity, the “Bank”);
WHEREAS, following the consummation of the transactions contemplated by the Merger Agreement, the Company desires to
continue to employ the Executive from the Closing Date (as defined in the Merger Agreement) (the “Effective Date”) on the terms
contained herein; and
WHEREAS, the Executive desires to be employed by the Company and to enter into this Agreement with the Company, subject
to the terms set forth herein; and
WHEREAS, the Executive is party to that certain letter agreement, dated April 19, 2011, and that certain Change in Control
Agreement, effective as of May 27, 2014, by and between Brookline and the Executive (the “Prior Agreements”), which the Company
and the Executive intend to replace with this Agreement immediately at and after the Effective Time (as defined in the Merger
Agreement).
NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1.
Employment.
(a)
Term. The Company shall employ the Executive and the Executive shall be employed by the Company pursuant to this
Agreement commencing as of the Effective Date and continuing until such employment is terminated in accordance with the provisions
hereof (the “Term”). The Executive’s employment with the Company shall continue to be “at will,” meaning that the Executive’s
employment may be terminated by the Company or the Executive at any time and for any reason subject to the terms of this Agreement.
1

(b)
Position and Duties. The Executive shall serve as Chief Credit Officer of the Holding Company and the Bank and shall
have such powers and duties as may from time to time be prescribed by the Chief Executive Officer of the Holding Company (the
“CEO”) or other duly authorized executive. The Executive shall devote the Executive’s full working time and efforts to the business and
affairs of the Company. Notwithstanding the foregoing, the Executive may serve on boards of directors of other companies, with the
approval of the Board of Directors of the Holding Company (the “Board”), or engage in religious, charitable or other community
activities as long as such services and activities do not interfere with the Executive’s performance of the Executive’s duties to the Bank.
2.
Compensation and Related Matters.
(a)
Base Salary. The Executive’s initial base salary shall be paid at the rate of $480,500.00 per year. The Executive’s base
salary shall be subject to periodic review by the Board or the Compensation Committee of the Board (the “Compensation Committee”).
The base salary in effect at any given time is referred to herein as “Base Salary.” The Base Salary shall be payable in a manner that is
consistent with the Company’s usual payroll practices for its executive officers.
(b)
Incentive Compensation. The Executive shall be eligible to receive cash incentive compensation as determined by the
Board or the Compensation Committee from time to time. As of the Effective Date, the Executive’s target annual incentive compensation
is sixty percent (60%) of the Executive’s Base Salary. The target annual incentive compensation in effect at any given time is referred to
herein as the “Target Bonus.” The actual amount of the Executive’s annual incentive compensation, if any, shall be determined in the
sole discretion of the Board or the Compensation Committee, subject to the terms of any applicable incentive compensation plan that
may be in effect from time to time. Except as otherwise provided herein, as may be provided by the Board or the Compensation
Committee, or as may otherwise be set forth in the applicable incentive compensation plan, the Executive must be employed by the
Company on the date such incentive compensation is paid to the Company’s eligible executives in order to earn and receive any annual
incentive compensation.
(c)
Expenses. The Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the
Executive during the Term in performing services hereunder, in accordance with the policies and procedures then in effect and
established by the Company for its executive officers.
(d)
Other Benefits. The Executive shall be eligible to participate in or receive benefits under the Company’s employee benefit
plans in effect from time to time, subject to the terms of such plans.
(e)
Club Membership; Automobile. During the Executive’s employment, the Company shall pay for the Executive’s annual
membership to the Aurora Civic Association in Providence, Rhode Island. During the Executive’s employment, the Company shall
provide the Executive with a car allowance equal to Five Hundred Dollars ($500) per month and shall provide the Executive with
parking at or near the Bank’s office in Providence, Rhode Island, consistent with past practice.
(f)
Paid Time Off. The Executive shall be entitled to take paid time off in accordance with the Company’s applicable paid
time off policy for executives, as may be in effect from time to time.
(g)
Equity. The Executive shall be eligible to receive equity awards as determined by the Board or the Compensation
Committee from time to time. As of the Effective Date, the
2

Executive’s target annual equity award shall have a grant date fair value of fifty percent (50%) of the Executive’s Base Salary. The actual
value of the Executive’s annual equity award, if any, shall be determined in the sole discretion of the Board or the Compensation
Committee, subject to the terms of any applicable equity compensation plan that may be in effect from time to time. The equity awards
held by the Executive shall continue to be governed by the terms and conditions of the Holding Company’s applicable equity incentive
plan(s) and the applicable award agreement(s) governing the terms of such equity awards (collectively, the “Equity Documents”).
3.
Termination. The Executive’s employment hereunder may be terminated without any breach of this Agreement under the
following circumstances:
(a)
Death or Disability. In the event of the Executive’s death or disability during the term of employment, the employment
hereunder shall terminate. For purposes of this Agreement, “disability” shall mean the Executive is disabled and unable to perform or
expected to be unable to perform the essential functions of the Executive’s then existing position or positions under this Agreement with
or without reasonable accommodation for a period of 180 days (which need not be consecutive) in any 12-month period. If any question
shall arise as to whether during any period the Executive is disabled so as to be unable to perform the essential functions of the
Executive’s then existing position or positions with or without reasonable accommodation, the Executive may, and at the request of the
Company shall, submit to the Company a certification in reasonable detail by a physician selected by the Company to whom the
Executive or the Executive’s guardian has no reasonable objection as to whether the Executive is so disabled or how long such disability
is expected to continue, and such certification shall for the purposes of this Agreement be conclusive of the issue. The Executive shall
cooperate with any reasonable request of the physician in connection with such certification. If such question shall arise and the
Executive shall fail to submit such certification, the Company’s determination of such issue shall be binding on the Executive. Nothing
in this Section 3(b) shall be construed to waive the Executive’s rights, if any, under existing law including, without limitation, the Family
and Medical Leave Act of 1993, 29 U.S.C. §2601 et seq. and the Americans with Disabilities Act, 42 U.S.C. §12101 et seq. In the event
of the Executive’s disability, the Company shall continue to pay the Executive’s Base Salary (reduced by any benefits the Executive may
be entitled to receive under any state or federal disability insurance program, such as Rhode Island temporary disability insurance or
federal social security) for a period of six (6) months from the date of disability.
(b)
Termination by the Company for Cause. The Company may terminate the Executive’s employment hereunder for Cause.
For purposes of this Agreement, “Cause” shall mean any of the following:
(i)
conduct by the Executive constituting a material act of misconduct in connection with the performance of
the Executive’s duties, including, without limitation, (A) willful failure or refusal to perform material responsibilities that have
been requested by the CEO; (B) dishonesty to the CEO with respect to any material matter; or (C) misappropriation of funds or
property of the Company or any of its subsidiaries or affiliates other than the occasional, customary and de minimis use of
Company property for personal purposes;
(ii)
the commission by the Executive of acts satisfying the elements of (A) any felony or (B) a misdemeanor
involving moral turpitude, deceit, dishonesty or fraud;
(iii)
any misconduct by the Executive, regardless of whether or not in the course of the Executive’s
employment, that would reasonably be expected to result in
3

material injury or reputational harm to the Company or any of its subsidiaries or affiliates if the Executive were to continue to be
employed in the same position;
(iv)
continued failure by the Executive to use his best efforts to perform his duties hereunder (other than by
reason of the Executive’s physical or mental illness, incapacity or disability) which has continued for more than 30 days
following written notice of such failure to use best efforts from the CEO;
(v)
a material breach or repeated breaches by the Executive of any of the provisions contained in Section 9 of
this Agreement or the Restrictive Covenants Agreement (as defined below);
(vi)
a material violation by the Executive of any of the Company’s written employment policies; or
(vii)
the Executive’s failure to cooperate with a bona fide internal investigation or an investigation by regulatory
or law enforcement authorities, after being instructed by the Company to cooperate, or the willful destruction or failure to
preserve documents or other materials known to be relevant to such investigation or the inducement of others to fail to cooperate
or to produce documents or other materials in connection with such investigation.
(c)
Termination by the Company without Cause. The Company may terminate the Executive’s employment hereunder at any
time without Cause. Any termination by the Company of the Executive’s employment under this Agreement which does not constitute a
termination for Cause under Section 3(c) and does not result from the death or disability of the Executive under Section 3(a) or (b) shall
be deemed a termination without Cause.
(d)
Termination by the Executive. The Executive may terminate employment hereunder at any time for any reason, including
but not limited to, Good Reason. For purposes of this Agreement, “Good Reason” shall mean that the Executive has completed all steps
of the Good Reason Process (hereinafter defined) following the occurrence of any of the following events without the Executive’s prior
written consent (each, a “Good Reason Condition”):
(i)
a material diminution in the Executive’s responsibilities, authority or duties;
(ii)
a material diminution in the Executive’s Base Salary, except for across-the-board salary reductions of not
more than ten percent (10%) based on the Company’s financial performance similarly affecting all or substantially all senior
management employees of the Company;
(iii)
a material change in the geographic location of the principal office of the Company to which the Executive
is assigned, such that there is an increase of at least thirty (30) miles of driving distance to such location from the Executive’s
principal residence as of such change; or
(iv)
a material breach of any of the provisions of this Agreement by the Company.
The “Good Reason Process” consists of the following steps:
4

(i)
the Executive reasonably determines in good faith that a Good Reason Condition has occurred;
(ii)
the Executive notifies the Company in writing of the first occurrence of the Good Reason Condition within
60 days of the first occurrence of such condition;
(iii)
the Executive cooperates in good faith with the Company’s efforts, for a period of not less than 30 days
following such notice (the “Cure Period”), to remedy the Good Reason Condition;
(iv)
notwithstanding such efforts, the Good Reason Condition continues to exist at the end of the Cure Period;
and
(v)
the Executive terminates employment within 60 days after the end of the Cure Period.
If the Company cures the Good Reason Condition during the Cure Period, Good Reason shall be deemed not to have occurred with
respect to such Good Reason Condition.
4.
Matters Related to Termination.
(a)
Notice of Termination. Except for termination as specified in Section 3(a), any termination of the Executive’s
employment by the Company or any such termination by the Executive shall be communicated by written Notice of Termination to the
other party hereto. For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon.
(b)
Date of Termination. “Date of Termination” shall mean: (i) if the Executive’s employment is terminated by death, the date
of death; (ii) if the Executive’s employment is terminated on account of disability under Section 3(b) or by the Company for Cause under
Section 3(c), the date on which Notice of Termination is given; (iii) if the Executive’s employment is terminated by the Company
without Cause under Section 3(d), the date on which a Notice of Termination is given or the date otherwise specified by the Company in
the Notice of Termination; (iv) if the Executive’s employment is terminated by the Executive under Section 3(e) other than for Good
Reason, 14 days after the date on which a Notice of Termination is given, and (v) if the Executive’s employment is terminated by the
Executive under Section 3(e) for Good Reason, the date on which a Notice of Termination is given after the end of the Cure Period.
Notwithstanding the foregoing, in the event that the Executive gives a Notice of Termination to the Company, the Company may
unilaterally accelerate the Date of Termination and such acceleration shall not result in a termination by the Company for purposes of
this Agreement.
(c)
Accrued Obligations. If the Executive’s employment with the Company is terminated for any reason, the Company shall
pay or provide to the Executive (or to the Executive’s authorized representative or estate) (i) any Base Salary earned through the Date of
Termination and, if applicable, any accrued but unused vacation through the Date of Termination; (ii) unpaid expense reimbursements
(subject to, and in accordance with, Section 2(c) of this Agreement); and (iii) any vested benefits the Executive may have under any
employee benefit plan of the Company through the Date of Termination, which vested benefits shall be paid and/or provided in
accordance with the terms of such employee benefit plans (collectively, the “Accrued Obligations”).
5

(d)
Resignation of All Other Positions. To the extent applicable, the Executive shall be deemed to have resigned from all
officer and board member positions that the Executive holds with the Company or any of its respective subsidiaries and affiliates upon
the termination of the Executive’s employment for any reason. The Executive shall execute any documents in reasonable form as may be
requested to confirm or effectuate any such resignations.
5.
Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason
Outside the Change in Control Period. If the Executive’s employment is terminated by the Company without Cause as provided in
Section 3(d), or the Executive terminates employment for Good Reason as provided in Section 3(e), in each case outside of the Change
in Control Period (as defined below), then, in addition to the Accrued Obligations, and subject to (i) the Executive signing a separation
agreement and release proposed by the Company that is substantially in the form attached hereto as Exhibit A (the “Separation
Agreement”), and (ii) the Separation Agreement becoming irrevocable, all within 60 days after the Date of Termination (or such shorter
period as set forth in the Separation Agreement), which shall include a seven-day revocation period:
(a)
the Company shall pay the Executive a lump sum payment in cash in an amount equal to two times the sum of (A) the
Executive’s then-current Base Salary (or, in the case of a termination by the Executive for the Good Reason Condition specified in
Section 3(e)(ii), the Base Salary in effect immediately prior to the occurrence of such Good Reason Condition), plus (B) the Executive’s
Target Bonus for the then-current year (the “Severance Amount”);
(b)
notwithstanding anything to the contrary in any applicable equity award, option agreement or stock-based award
agreement, all stock options and other stock-based awards held by the Executive shall immediately accelerate and become fully
exercisable or nonforfeitable as of the later of (i) the Executive’s Date of Termination or (ii) the effective date of the Separation
Agreement; provided that in order to effectuate the accelerated vesting contemplated by this subsection, the forfeiture of the unvested
portion of such awards that would otherwise be forfeited on the Date of Termination will be delayed until the earlier of (A) the effective
date of the Separation Agreement (at which time acceleration will occur), or (B) the date that the Separation Agreement can no longer
become fully effective (at which time the unvested portion of such awards will be forfeited). Notwithstanding the foregoing, no
additional vesting of any such awards shall occur during the period between the Date of Termination and the effective date of the
acceleration. The Executive shall also be entitled to any other rights and benefits with respect to equity awards, options and stock-related
awards, to the extent and upon the terms provided in the employee stock option or incentive plan or any agreement or other instrument
attendant thereto pursuant to which such options or awards were granted;
(c)
subject to the Executive’s copayment of premium amounts at the applicable active employees’ rate and the Executive’s
proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the
Company shall make a monthly payment equal to the monthly employer contribution that the Company would have made to provide
health insurance to the Executive if the Executive had remained employed by the Company until the earlier of (A) the 24-month
anniversary of the Date of Termination; or (B) the date that the Executive becomes eligible for group medical plan benefits under any
other employer’s group medical plan. The Company will make such payments directly to the group health plan provider or the COBRA
provider to the maximum extent possible; provided, however, that if the Company determines that it cannot pay such amounts directly to
the group health plan provider or the COBRA provider (if applicable) for any reason, as determined by the Company in its sole
discretion, (including, without limitation, without potentially violating applicable law (including, without limitation, Section 2716 of the
Public Health Service Act)), then the Company shall convert such payments to payroll payments directly to the Executive for
6

the time period specified above, and such payments to the Executive shall be subject to tax-related deductions and withholdings and paid
on the Company’s regular payroll dates; and
(d)
the Company shall cause to be continued, at the Company’s expense, life insurance and disability coverage substantially
identical to the coverage maintained by the Company for the Executive prior to the Date of Termination for 24 months following the
Date of Termination; provided, however, that in the event that the Company determines, in the reasonable exercise of its discretion, that
it is impossible or impracticable for the Company to continue such coverage, including, but not limited to, by reason of operation of the
plans or applicable law, the Company will convert such benefits to payroll payments directly to the Executive for the time period
specified above which are equal in the aggregate to the amount the Company would have paid for such coverage for the 24 month period
following the Date of Termination based on the cost of such coverage as of the Date of Termination. Any such payroll payments shall be
subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates.
(i)
The amounts payable under this Section 5, to the extent taxable, shall be paid or commence to be paid, as applicable, within 60
days after the Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second
calendar year, such payments, to the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A
of the Internal Revenue Code of 1986, as amended (the “Code”), shall begin to be paid in the second calendar year by the last day of
such 60-day period; provided, further, that the initial payment shall include a catch-up payment to cover amounts retroactive to the day
immediately following the Date of Termination. Each payment pursuant to this Agreement is intended to constitute a separate payment
for purposes of Treasury Regulation Section 1.409A-2(b)(2).
6.
Severance Pay and Benefits Upon Termination by the Company without Cause or by the Executive for Good Reason
within the Change in Control Period. The provisions of this Section 6 shall apply in lieu of, and expressly supersede, the provisions of
Section 5 if (i) the Executive’s employment is terminated either (a) by the Company without Cause as provided in Section 3(d), or (b) by
the Executive for Good Reason as provided in Section 3(e), and (ii) the Date of Termination is on or within 24 months after the
occurrence of the first event constituting a Change in Control (such period, the “Change in Control Period”). These provisions (other
than the provisions applicable after the Change in Control Period to a termination that occurs during the Change in Control Period) shall
terminate and be of no further force or effect after the Change in Control Period.
(a)
If the Executive’s employment is terminated by the Company without Cause as provided in Section 3(d) or the Executive
terminates employment for Good Reason as provided in Section 3(e) and in each case the Date of Termination occurs during the Change
in Control Period, then, in addition to the Accrued Obligations, and subject to the signing of the Separation Agreement and the
Separation Agreement becoming fully effective, all within the time frame set forth in the Separation Agreement but in no event more
than 60 days after the Date of Termination:
(i)
the Company shall pay the Executive a lump sum payment in cash in an amount equal to two (2) times the
sum of (A) the Executive’s then-current Base Salary (or the Executive’s Base Salary in effect immediately prior to the Change in
Control, if higher) plus (B) the Executive’s Target Bonus for the then-current year (or the Executive’s Target Bonus in effect
immediately prior to the Change in Control, if higher) (the “Change in Control Payment”);
7

(ii)
subject to the Executive’s copayment of premium amounts at the applicable active employees’ rate and the
Executive’s proper election to receive benefits under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), the Company shall make a monthly payment equal to the monthly employer contribution that the Company would
have made to provide health insurance to the Executive if the Executive had remained employed by the Company until the earlier
of (A) the 24 month anniversary of the Date of Termination; or (B) the date that the Executive becomes eligible for group
medical plan benefits under any other employer’s group medical plan. The Company will make such payments directly to the
group health plan provider or the COBRA provider to the maximum extent possible; provided, however, that if the Company
determines that it cannot pay such amounts directly to the group health plan provider or the COBRA provider (if applicable) for
any reason, as determined by the Company in its sole discretion, (including, without limitation, without potentially violating
applicable law (including, without limitation, Section 2716 of the Public Health Service Act)), then the Company shall convert
such payments to payroll payments directly to the Executive for the time period specified above. Such payments to the Executive
shall be subject to tax-related deductions and withholdings and paid on the Company’s regular payroll dates;
(iii)
the Company shall cause to be continued, at the Company’s expense, life insurance and disability coverage
substantially identical to the coverage maintained by the Company for the Executive prior to the Date of Termination for 24
months following the Date of Termination; provided, however, that in the event that the Company determines, in the reasonable
exercise of its discretion, that it is impossible or impracticable for the Company to continue such coverage, including, but not
limited to, by reason of operation of the plans or applicable law, the Company will convert such benefits to payroll payments
directly to the Executive for the time period specified above which are equal in the aggregate to the amount the Company would
have paid for such coverage for the 24-month period following the Date of Termination based on the cost of such coverage as of
the Date of Termination. Any such payroll payments shall be subject to tax-related deductions and withholdings and paid on the
Company’s regular payroll dates; and
(iv)
notwithstanding anything to the contrary in any applicable equity award, option agreement or stock-based
award agreement, all stock options and other stock-based awards held by the Executive shall immediately accelerate and become
fully exercisable or nonforfeitable as of the later of (i) the Executive’s Date of Termination or (ii) the effective date of the
Separation Agreement; provided that in order to effectuate the accelerated vesting contemplated by this subsection, the forfeiture
of the unvested portion of such awards that would otherwise be forfeited on the Date of Termination will be delayed until the
earlier of (A) the effective date of the Separation Agreement (at which time acceleration will occur), or (B) the date that the
Separation Agreement can no longer become fully effective (at which time the unvested portion of such awards will be forfeited).
Notwithstanding the foregoing, no additional vesting of any such awards shall occur during the period between the Date of
Termination and the effective date of the acceleration. The Executive shall also be entitled to any other rights and benefits with
respect to equity awards, options and stock-related awards, to the extent and upon the terms provided in the employee stock
option or incentive plan or any agreement or other instrument attendant thereto pursuant to which such options or awards were
granted.
(v)
The amounts payable under this Section 6(a), to the extent taxable, shall be paid or commence to be paid within 60 days after the
Date of Termination; provided, however, that if the 60-day period begins in one calendar year and ends in a second calendar year, such
payments to
8

the extent they qualify as “non-qualified deferred compensation” within the meaning of Section 409A of the Code, shall be paid or
commence to be paid in the second calendar year by the last day of such 60-day period.
(b)
Definitions. For purposes of this Section 6, “Change in Control” shall be deemed to have occurred upon the occurrence of
any one of the following events:
(i)
any “person,” as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the “Act”) (other than the Holding Company, any of its subsidiaries, or any trustee, fiduciary or other person or entity
holding securities under any employee benefit plan or trust of the Holding Company or any of its subsidiaries), together with all
“affiliates” and “associates” (as such terms are defined in Rule 12b-2 under the Act) of such person, shall become the “beneficial
owner” (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Holding Company
representing 25 percent or more of the combined voting power of the Holding Company’s then outstanding securities having the
right to vote in an election of the Board (“Voting Securities”) (in such case other than as a result of an acquisition of securities
directly from the Holding Company); or
(ii)
the consummation of (A) any consolidation or merger of the Holding Company where the stockholders of
the Holding Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in Rule 13d-3 under the Act), directly or indirectly, shares representing in the
aggregate more than 50 percent of the voting shares of the Holding Company issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if any), or (B) any sale or other transfer (in one transaction or a series of
transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Holding
Company and the Bank.
Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred for purposes of the foregoing clause (i)
solely as the result of an acquisition of securities by the Holding Company that, by reducing the number of shares of Voting Securities
outstanding, increases the proportionate number of shares of Voting Securities beneficially owned by any person to 25 percent or more of
the combined voting power of all then outstanding Voting Securities; provided, however, that if any person referred to in this sentence
shall thereafter become the beneficial owner of any additional shares of Voting Securities (other than pursuant to a stock split, stock
dividend, or similar transaction or as a result of an acquisition of securities directly from the Holding Company) and immediately
thereafter beneficially owns 25 percent or more of the combined voting power of all then outstanding Voting Securities, then a “Change
in Control” shall be deemed to have occurred for purposes of the foregoing clause (a). For the avoidance of doubt, the transactions
contemplated in the Merger Agreement shall not be deemed a “Change of Control.”
7.
Voluntary Termination. Notwithstanding anything in this Agreement to the contrary, if the Executive voluntarily resigns
during the period commencing on the Effective Date and ending on the second anniversary of the Effective Date, then, subject to the
Executive’s timely execution of a Separation Agreement and the Separation Agreement becoming irrevocable, all within 60 days after
the Date of Termination (or such shorter period as set forth in the Separation Agreement), which shall include a seven-day revocation
period, the Company shall provide the Executive with the severance paymnents and benefits set forth in Sections 5(a) (c) and (d) of this
Agreement; provided that the Company may delay the payment of the lump sum payment described in Section 5(a) to any date within
sixty (60) days of the Date of Termination, provided, that if the 60-day period begins in one calendar year and ends in a second calendar
year, such payment, to the extent it qualifies as “non-qualified deferred compensation”
9

within the meaning of Section 409A of the Code shall begin to be paid in the second calendar year by the last day of such 60-day period.
Any voluntary resignation shall be subject to the notice obligations applicable to resignations other than for Good Reason pursuant to
Section 4(b)(iv).
8.
Tax Matters.
(a)
Section 280G. Anything in this Agreement to the contrary notwithstanding, in the event that the amount of any
compensation, payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, calculated in a manner consistent with Section 280G of the Code, and
the applicable regulations thereunder (the “Aggregate Payments”), would be subject to the excise tax imposed by Section 4999 of the
Code, then the Aggregate Payments shall be reduced (but not below zero) so that the sum of all of the Aggregate Payments shall be $1.00
less than the amount at which the Executive becomes subject to the excise tax imposed by Section 4999 of the Code. In such event, the
Aggregate Payments shall be reduced in the following order, in each case, in reverse chronological order beginning with the Aggregate
Payments that are to be paid the furthest in time from consummation of the transaction that is subject to Section 280G of the Code: (i)
cash payments not subject to Section 409A of the Code; (ii) cash payments subject to Section 409A of the Code; (iii) equity-based
payments and acceleration; and (iv) non-cash forms of benefits; provided that in the case of all the foregoing Aggregate Payments all
amounts or payments that are not subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c) shall be reduced before any
amounts that are subject to calculation under Treas. Reg. §1.280G-1, Q&A-24(b) or (c).
(b)
Section 409A.
(i)
Anything in this Agreement to the contrary notwithstanding, if at the time of the Executive’s separation
from service within the meaning of Section 409A of the Code, the Company determines that the Executive is a “specified
employee” within the meaning of Section 409A(a)(2)(B)(i) of the Code, then to the extent any payment or benefit that the
Executive becomes entitled to under this Agreement or otherwise on account of the Executive’s separation from service would be
considered deferred compensation otherwise subject to the 20 percent additional tax imposed pursuant to Section 409A(a) of the
Code as a result of the application of Section 409A(a)(2)(B)(i) of the Code, such payment shall not be payable and such benefit
shall not be provided until the date that is the earlier of (A) six months and one day after the Executive’s separation from service,
or (B) the Executive’s death. If any such delayed cash payment is otherwise payable on an installment basis, the first payment
shall include a catch-up payment covering amounts that would otherwise have been paid during the six-month period but for the
application of this provision, and the balance of the installments shall be payable in accordance with their original schedule.
(ii)
All in-kind benefits provided and expenses eligible for reimbursement under this Agreement shall be
provided by the Company or incurred by the Executive during the time periods set forth in this Agreement. All reimbursements
shall be paid as soon as administratively practicable, but in no event shall any reimbursement be paid after the last day of the
taxable year following the taxable year in which the expense was incurred. The amount of in-kind benefits provided or
reimbursable expenses incurred in one taxable year shall not affect the in-kind benefits to be provided or the expenses eligible for
reimbursement in any other taxable year (except for any lifetime or other aggregate limitation applicable to medical expenses).
Such right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.
10

(iii)
To the extent that any payment or benefit described in this Agreement constitutes “non-qualified deferred
compensation” under Section 409A of the Code, and to the extent that such payment or benefit is payable upon the Executive’s
termination of employment, then such payments or benefits shall be payable only upon the Executive’s “separation from
service.” The determination of whether and when a separation from service has occurred shall be made in accordance with the
presumptions set forth in Treasury Regulation Section 1.409A-1(h).
(iv)
The parties intend that this Agreement will be administered in accordance with Section 409A of the Code.
To the extent that any provision of this Agreement is ambiguous as to its compliance with Section 409A of the Code, the
provision shall be read in such a manner so that all payments hereunder comply with Section 409A of the Code. Each payment
pursuant to this Agreement or the Restrictive Covenants Agreement is intended to constitute a separate payment for purposes of
Treasury Regulation Section 1.409A-2(b)(2). The parties agree that this Agreement may be amended, as reasonably requested by
either party, and as may be necessary to fully comply with Section 409A of the Code and all related rules and regulations in order
to preserve the payments and benefits provided hereunder without additional cost to either party.
(v)
The Company makes no representation or warranty and shall have no liability to the Executive or any
other person if any provisions of this Agreement are determined to constitute deferred compensation subject to Section 409A of
the Code but do not satisfy an exemption from, or the conditions of, such Section.
9.
Continuing Obligations.
(a)
As a condition of continued employment, the Executive is required to enter into the Confidentiality, Assignment,
Nonsolicitation and Noncompetition Agreement, attached hereto as Exhibit B (the “Restrictive Covenants Agreement”). For purposes of
this Agreement, the obligations in this Section 9 and those that arise in the Restrictive Covenants Agreement and any other agreement
relating to confidentiality, assignment of inventions, or other restrictive covenants, including without limitation the noncompetition
obligations in the Separation Agreement, shall collectively be referred to as the “Continuing Obligations.”
(b)
Third-Party Agreements and Rights. The Executive hereby confirms that the Executive is not bound by the terms of any
agreement with any previous employer or other party which restricts in any way the Executive’s use or disclosure of information, other
than confidentiality restrictions (if any), or the Executive’s engagement in any business. The Executive represents to the Company that
the Executive’s execution of this Agreement, the Executive’s employment with the Company and the performance of the Executive’s
proposed duties for the Company will not violate any obligations the Executive may have to any such previous employer or other party.
In the Executive’s work for the Company, the Executive will not disclose or make use of any information in violation of any agreements
with or rights of any such previous employer or other party, and the Executive will not bring to the premises of the Company any copies
or other tangible embodiments of non-public information belonging to or obtained from any such previous employment or other party.
(c)
Litigation and Regulatory Cooperation. During and after the Executive’s employment, to the extent permitted by law, the
Executive shall cooperate with the Company in (i) the defense or prosecution of any claims or actions now in existence or which may be
brought in the future against or on behalf of the Company which relate to events or occurrences that transpired while the Executive was
employed by the Company, and (ii) the investigation, whether internal or external, of any matters about which the Company believes the
Executive
11

may have knowledge or information. The Executive’s cooperation in connection with such claims, actions or investigations shall include,
but not be limited to, being available to meet with counsel to answer questions or to prepare for discovery or trial, and to act as a witness
on behalf of the Company, at mutually convenient times and locations, considering the Executive’s availability. During and after the
Executive’s employment, the Executive also shall cooperate with the Company in connection with any investigation or review of any
federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while the
Executive was employed by the Company. The Company shall reimburse the Executive for any reasonable out-of-pocket expenses
incurred in connection with the Executive’s performance of obligations pursuant to this Section 9(c).
(d)
Relief. The Executive agrees that it would be difficult to measure any damages caused to the Company which might result
from any breach by the Executive of the Continuing Obligations, and that in any event money damages would be an inadequate remedy
for any such breach. Accordingly, the Executive agrees that if the Executive breaches, or proposes to breach, any portion of the
Continuing Obligations, the Company shall be entitled, in addition to all other remedies that it may have, to an injunction or other
appropriate equitable relief to restrain any such breach without showing or proving any actual damage to the Company.
10.
Arbitration of Disputes.
(a)
Arbitration Generally. Any controversy or claim arising out of or relating to this Agreement or the breach thereof or
otherwise arising out of the Executive’s employment or the termination of that employment (including, without limitation, any claims of
unlawful employment discrimination or retaliation, whether based on race, religion, national origin, sex, gender, age, disability, sexual
orientation, or any other protected class under applicable law, including without limitation Massachusetts General Laws Chapter 151B)
shall, to the fullest extent permitted by law, be settled by arbitration in any forum and form agreed upon by the parties or, in the absence
of such an agreement, under the auspices of JAMS in Boston, Massachusetts, in accordance with the JAMS Employment Arbitration
Rules, including, but not limited to, the rules and procedures applicable to the selection of arbitrators. The Executive understands that the
Executive may only bring such claims in the Executive’s individual capacity, and not as a plaintiff or class member in any purported
class proceeding or any purported representative proceeding. The Executive further understands that, by signing this Agreement, the
Company and the Executive are giving up any right they may have to a jury trial on all claims they may have against each other.
Judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. This Section 10 shall be
specifically enforceable. Notwithstanding the foregoing, this Section 10 shall not preclude either party from pursuing a court action for
the sole purpose of obtaining a temporary restraining order or a preliminary injunction in circumstances in which such relief is
appropriate, including without limitation relief sought under the Restrictive Covenants Agreement or the Separation Agreement;
provided that any other relief shall be pursued through an arbitration proceeding pursuant to this Section 10.
(b)
Arbitration Fees and Costs. The Executive shall be required to pay an arbitration fee to initiate any arbitration equal to
what the Executive would be charged as a first appearance fee in court. The Company shall advance the remaining fees and costs of the
arbitrator. However, to the extent permissible under the law, and following the arbitrator’s ruling on the matter, the arbitrator may rule
that the arbitrator’s fees and costs be distributed in an alternative manner. Each party shall pay its own costs and attorneys’ fees, if any.
If, however, any party prevails on a statutory claim that affords the prevailing party attorneys’ fees (including pursuant to this
Agreement), the arbitrator may award attorneys’ fees to the prevailing party to the extent permitted by law.
12

11.
Consent to Jurisdiction. To the extent that any court action is permitted consistent with or to enforce Section 10 of this
Agreement, the parties hereby consent to the exclusive jurisdiction of the state and federal courts of the Commonwealth of
Massachusetts.
12.
Waiver of Jury Trial. Each of the Executive and the Company irrevocably and unconditionally WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT BY THE COMPANY OR ANY AFFILIATE OF THE
COMPANY, INCLUDING WITHOUT LIMITATION THE EXECUTIVE’S OR THE COMPANY’S PERFORMANCE UNDER, OR
THE ENFORCEMENT OF, THIS AGREEMENT.
13.
Integration. This Agreement and the Restrictive Covenants Agreement together constitute the entire agreement between
the parties with respect to their subject matters and supersede all prior agreements between the parties concerning such subject matters.
14.
Withholding; Tax Effect. All payments made by the Company to the Executive under this Agreement shall be net of any
tax or other amounts required to be withheld by the Company under applicable law. Nothing in this Agreement shall be construed to
require the Company to make any payments to compensate the Executive for any adverse tax effect associated with any payments or
benefits or for any deduction or withholding from any payment or benefit.
15.
Assignment; Successors and Assigns. Neither the Executive nor the Company may make any assignment of this
Agreement or any interest in it, by operation of law or otherwise, without the prior written consent of the other; provided, however, that
the Company may assign its rights and obligations under this Agreement (including the Restrictive Covenants Agreement) without the
Executive’s consent to any affiliate or to any person or entity with whom the Company shall hereafter effect a reorganization or
consolidation, into which the Company merges or to whom it transfers all or substantially all of its properties or assets; provided, further,
that if the Executive remains employed or becomes employed by the Company, the purchaser or any of their affiliates in connection with
any such transaction, then the Executive shall not be entitled to any payments, benefits or vesting pursuant to Sections 5, 6 or 7of this
Agreement solely as a result of such transaction. This Agreement shall inure to the benefit of and be binding upon the Executive and the
Company, and each of the Executive’s and the Company’s respective successors, executors, administrators, heirs and permitted assigns.
In the event of the Executive’s death after the Executive’s termination of employment but prior to the completion by the Company of all
payments due to the Executive under this Agreement, the Company shall continue such payments to the Executive’s beneficiary
designated in writing to the Company prior to the Executive’s death (or to the Executive’s estate, if the Executive fails to make such
designation).
16.
Enforceability. If any portion or provision of this Agreement (including, without limitation, any portion or provision of
any section of this Agreement) shall to any extent be declared illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each portion and provision of this Agreement shall be valid and
enforceable to the fullest extent permitted by law.
17.
Survival. The provisions of this Agreement shall survive the termination of this Agreement and/or the termination of the
Executive’s employment to the extent necessary to effectuate the terms contained herein.
13

18.
Waiver. No waiver of any provision hereof shall be effective unless made in writing and signed by the waiving party. The
failure of any party to require the performance of any term or obligation of this Agreement, or the waiver by any party of any breach of
this Agreement, shall not prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
19.
Notices. Any notices, requests, demands and other communications provided for by this Agreement shall be sufficient if
in writing and delivered in person or sent by a nationally recognized overnight courier service or by registered or certified mail, postage
prepaid, return receipt requested, to the Executive at the last address the Executive has filed in writing with the Company or, in the case
of the Company, at its main offices, attention of the Board.
20.
Amendment. This Agreement may be amended or modified only by a written instrument signed by the Executive and by a
duly authorized representative of the Company.
21.
Effect on Other Plans and Agreements. An election by the Executive to resign for Good Reason under the provisions of
this Agreement shall not be deemed a voluntary termination of employment by the Executive for the purpose of interpreting the
provisions of any of the Company's benefit plans, programs or policies. Nothing in this Agreement shall be construed to limit the rights
of the Executive under the Company’s benefit plans, programs or policies except as otherwise provided herein, and except that the
Executive shall have no rights to any severance benefits under any Company severance pay plan, offer letter or otherwise. Except for the
Restrictive Covenants Agreement, in the event that the Executive is party to an agreement with the Company providing for payments or
benefits under such plan or agreement and under this Agreement, the terms of this Agreement shall govern and the Executive may
receive payment under this Agreement only and not both. Further, Sections 5, 6 and 7 of this Agreement are mutually exclusive and in no
event shall the Executive be entitled to payments or benefits pursuant to more than one of such Sections of this Agreement.
22.
Governing Law. This is a Rhode Island contract and shall be construed under and be governed in all respects by the laws
of the State of Rhode Island without giving effect to the conflict of laws principles thereof, and in accordance with any applicable federal
laws to which the Bank may be subject as an FDIC-insured institutions and member bank of the Federal Reserve System. With respect to
any disputes concerning federal law, such disputes shall be determined in accordance with the law as it would be interpreted and applied
by the United States Court of Appeals for the First Circuit.
23.
Counterparts. This Agreement may be executed in any number of counterparts, with .pdf and facsimile signatures having
the same effect as the original, each of which when so executed and delivered shall be taken to be an original; but such counterparts shall
together constitute one and the same document.
24.
Allocation of Obligations Between the Companies. The obligations of the Company under this Agreement are intended to
be the joint and several obligations of the Holding Company and the Bank, and each shall, as between themselves, allocate these
obligations in a manner agreed upon by them.
25.
Indemnification. The Company shall provide the Executive (including his heirs, executors and administrators) with
coverage under a standard directors’ and officers’ liability insurance policy at its expense, and shall indemnify the Executive (and his
heirs, executors and administrators) to the fullest extent permitted under federal law against all expenses and liabilities reasonably
incurred by him in connection with or arising out of any action, suit or proceeding in which he may be involved by reason of his having
been a director or officer of the Company (whether or not he continues to be a director or officer at the time of incurring such
14

expenses or liabilities), such expenses and liabilities to include, but not be limited to, judgments, court costs and attorneys’ fees and the
cost of reasonable settlements (such settlements must be approved by the Board). If such action, suit or proceeding is brought against the
Executive in his capacity as an officer or director of the Company, such indemnification shall not extend to matters as to which the
Executive is finally adjudged to be liable for willful misconduct in the performance of his duties.
26.
Clawback. The Executive agrees to be subject to any clawback policy adopted by the Holding Company or the Bank
similarly affecting all or substantially all senior management employees and acknowledges that, to the extent provided therein, he may
be required to repay all or any portion of any incentive compensation previously paid to him on account of inaccurate or erroneous
financial data.
27.
No Mitigation; No Offset. In the event of any termination of the Executive’s employment under this Agreement, the
Executive shall be under no obligation to seek other employment or to mitigate damages, and there shall be no offset against amounts
due to the Executive under this Agreement on account of any remuneration attributable to any subsequent employment that the
Executive may obtain. Any amount due under this Agreement are in the nature of severance payments and are not in the nature of a
penalty.
[Remainder of Page Intentionally Left Blank]
15

IN WITNESS WHEREOF, the parties have executed this Agreement effective on the Effective Date.
BERKSHIRE HILLS BANCORP, INC.
By: _________________________________
Name: David M. Brunelle
Title: Chairman
BROOKLINE BANK
By: _________________________________
Name: Paul A. Perrault
Title: Chairman
EXECUTIVE
_________________________________
Mark J. Meiklejohn
16

Exhibit A
SEPARATION AGREEMENT AND RELEASE
This Separation Agreement and Release (the “Separation Agreement”) is entered into by and among Berkshire Hills Bancorp,
Inc., a Delaware corporation with its principal administrative office at 131 Clarendon Street, Boston, MA 02116 (the “Holding
Company”), Brookline Bank, a Massachusetts chartered trust company (the “Bank”) and Mark J. Meiklejohn (the “Executive”) in
connection with the “Employment Agreement” by and among the Holding Company, Brookline Bank, and the Executive dated
[_______]. Together the Holding Company and the Bank shall be referred to herein as the “Company.” This is the Separation Agreement
referenced in the Employment Agreement. Terms with initial capitalization that are not otherwise defined in this Separation Agreement
have the meanings set forth in the Employment Agreement. The consideration for the Executive’s agreement to this Separation
Agreement consists of the payments pursuant to Section 5, 6 or 7 of the Employment Agreement (as applicable), which are subject to the
terms of the Employment Agreement.
1. Executive’s Release of Claims. The Executive voluntarily releases and forever discharges the Company, its affiliated and
related entities, its and their respective predecessors, successors and assigns, its and their respective employee benefit plans
and fiduciaries of such plans, and the current and former directors, officers, shareholders, employees, attorneys, accountants
and agents of each of the foregoing in their official and personal capacities (collectively referred to as the “Released Parties”)
generally from all claims, demands, debts, damages and liabilities of every name and nature, known or unknown
(collectively, “Claims”) that, as of the date when the Executive signs this Separation Agreement, he has, ever had, now claims
to have or ever claimed to have had against any or all of the Released Parties. This general release of Claims includes,
without implication of limitation, the release of all Claims:
•
relating to the Executive’s employment by and termination of employment with the Company or any related
entity;
•
of wrongful discharge or violation of public policy;
•
of breach of contract;
•
of discrimination or retaliation under federal, state or local law (including, without limitation, Claims of age
discrimination or retaliation under the Age Discrimination in Employment Act, the Americans with Disabilities
Act, and Title VII of the Civil Rights Act of 1964);
•
under any other federal or state statute or constitution or local ordinance;
•
of defamation or other torts;
•
for wages, bonuses, incentive compensation, stock, stock options, vacation pay or any other compensation or
benefits; and
•
for damages or other remedies of any sort, including, without limitation, compensatory damages, punitive
damages, injunctive relief and attorney’s fees.
1

To the fullest extent permitted by law, the Executive agrees not to accept damages of any nature, other equitable or legal remedies for his
own benefit or attorney’s fees or costs from any of the Released Parties with respect to any Claim released by this Separation Agreement.
2. Limitations on Executive’s Release of Claims. Notwithstanding anything in Section 1 of this Separation Agreement to the
contrary:
(a) Employment Agreement. Nothing in this Separation Agreement shall be construed to limit the Executive’s rights under the
Employment Agreement, including without limitation (i) the Accrued Obligations, as defined in Section 4(c) of the
Employment Agreement, (ii) the severance pay and benefits pursuant to Sections 5, 6 or 7 of the Employment Agreement,
whichever is applicable, subject to satisfying the requirements for execution and non-revocation of this Separation
Agreement, as set forth in the Employment Agreement, or (iii) any rights to indemnification to which the Executive is
entitled, including but not limited those described in Section 25 of the Employment Agreement.
(b) Equity. Nothing in this Separation Agreement is intended to affect the Executive’s rights or obligations under the Equity
Documents. The Equity Documents shall continue to be governed by their terms, except as may otherwise be provided in the
Employment Agreement.
(c) Statutory Benefit Rights. Nothing in this Separation Agreement is intended to release or waive the Executive’s right to elect
continuation of group health plan coverage under the law known as COBRA or unemployment insurance benefits.
3. Ongoing Obligations of the Executive. As a condition of receiving the payments pursuant to Section 5, 6 or 7 of the
Employment Agreement, the Executive hereby reaffirms that he remains subject to the Continuing Obligations.
4. Nondisparagement.
(a) The Executive shall not, directly or indirectly, make any statements that disparage or deprecate the Company, any of its
business practices, any of its business activities or any of its officers, directors or employees (provided that, with respect to
any such officer, director or employee, the Executive actually knows or has substantial reason to believe that such person is
an officer, director or employee of the Company) and shall not assist or encourage any other person, firm or entity to do so.
(b) The Company shall direct its directors and executive officers not to directly or indirectly, disparage or deprecate the
Executive, any of his business practices or any of his business activities. In addition, the Company shall not in any authorized
public statement of the Company (a “Company Statement”) disparage or deprecate the Executive, any of his business
practices or any of his business activities.
2

5. Protected Disclosures. Nothing in this Separation Agreement nor any direction pursuant to this Separation Agreement shall be
interpreted or applied to prohibit the Executive or any other person from making any good faith report to any governmental
agency or other governmental entity (a “Government Agency”) concerning any act or omission that the Executive or such
other person reasonably believes constitutes a possible violation of federal or state law or making other disclosures that are
protected under the anti-retaliation or whistleblower provisions of applicable federal or state law or regulation. In addition,
nothing contained in this Separation Agreement nor in any direction pursuant to this Agreement limits the Executive’s or any
other person’s ability to communicate with any Government Agency or otherwise participate in any investigation or
proceeding that may be conducted by any Government Agency, including the Executive’s ability to provide documents or
other information, without notice to the Company, nor does anything contained in this Separation Agreement nor in any
direction pursuant to this Agreement apply to truthful testimony in litigation by the Executive or any other person. If the
Executive files any charge or complaint with any Government Agency and if the Government Agency pursues any claim on
the Executive’s behalf, or if any other third party pursues any claim on the Executive’s behalf, the Executive waives any right
to monetary or other individualized relief (either individually or as part of any collective or class action) to the fullest extent
permitted by law; provided, however, that nothing in this Separation Agreement limits any right the Executive may have to
receive a whistleblower award or bounty for information provided to the Securities and Exchange Commission or any such
award from any other Government Agency pursuant to a whistleblower award or bounty program administered by such
agency.
6. Defend Trade Secrets Act of 2016. The Executive understands that pursuant to the federal Defend Trade Secrets Act of 2016,
the Executive shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a
trade secret that (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to
an attorney; and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a
complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
7. No Assignment. The Executive represents that he has not assigned to any other person or entity any Claims against any
Released Party.
8. Right to Consider and Revoke Separation Agreement. The Executive acknowledges that he has been given the opportunity to
consider this Separation Agreement for a period of 21 days (the “Consideration Period”). In the event the Executive executed
this Separation Agreement before the end of the Consideration Period, he acknowledges that such decision was entirely
voluntary and that he had the opportunity to consider this Separation Agreement until the end of the Consideration Period. To
accept this Separation Agreement, the Executive shall deliver a signed
3

Separation Agreement to the Company’s then most senior Human Resources professional (the “HR Leader”) before the end
of the Consideration Period. For a period of seven days from the date when the Executive executes this Separation Agreement
(the “Revocation Period”), he shall retain the right to revoke this Separation Agreement by written notice that is received by
the HR Leader on or before the last day of the Revocation Period. This Separation Agreement shall take effect only if it is
executed within the Consideration Period as set forth above and if it is not revoked pursuant to the preceding sentence. If the
conditions set forth in this paragraph are satisfied, this Separation Agreement shall become effective and enforceable on the
date immediately following the last day of the Revocation Period (the “Effective Date”).
9. Other Terms.
(a) Legal Representation; Review of Separation Agreement. The Executive acknowledges that he has been advised to discuss all
aspects of this Separation Agreement with his attorney, that he has carefully read and fully understands all of the provisions
of this Separation Agreement and that he is knowingly and voluntarily entering into this Separation Agreement.
(b) Binding Nature of Separation Agreement. This Separation Agreement shall be binding upon the Executive and upon his heirs,
administrators, representatives and executors.
(c) Modification of Separation Agreement; Waiver. This Separation Agreement may be amended only upon a written agreement
executed by the Executive and the Company. No waiver of any provision of this Separation Agreement shall be effective
unless made in writing and signed by the waiving party. The failure of a party to require the performance of any term or
obligation of this Separation Agreement, or the waiver by a party of any breach of this Separation Agreement, shall not
prevent any subsequent enforcement of such term or obligation or be deemed a waiver of any subsequent breach.
(d) Severability. In the event that at any future time it is determined by a court of competent jurisdiction that any covenant,
clause, provision or term of this Separation Agreement is illegal, invalid or unenforceable, the remaining provisions and terms
of this Separation Agreement shall not be affected thereby and the illegal, invalid or unenforceable term or provision shall be
severed from the remainder of this Separation Agreement. In the event of such severance, the remaining covenants shall be
binding and enforceable; provided, however, and for the avoidance of doubt, in no event shall the Company be required to
provide payments or benefits to the Executive pursuant to Section 5, 6 or 7 of the Employment Agreement if all or part of
Section 1 of this Separation Agreement is held to be invalid or unenforceable.
(e) Governing Law and Interpretation. This Separation Agreement shall be deemed to be made and entered into in the State of
Rhode Island, and shall in all respects be
4

interpreted, enforced and governed under the laws of the State of Rhode Island, without giving effect to its conflict of laws
provisions. The language of all parts of this Separation Agreement shall in all cases be construed as a whole, according to its
fair meaning, and not strictly for or against any of the parties.
(f) Arbitration; Jurisdiction. Enforcement of this Separation Agreement shall be subject to the terms of Sections 10 (“Arbitration
of Disputes”) and 11 (“Consent to Jurisdiction”) of the Employment Agreement as if set forth herein.
(g) Remedies. If the Executive breaches any provision of this Separation Agreement or any of the Continuing Obligations, in
addition to all other remedies available to the Company at law, in equity, and under contract, the Executive agrees that the
Company may cease any payments or benefits otherwise due to the Executive or for the Executive’s benefit pursuant to
Sections 5, 6 or 7 of the Employment Agreement.
(h) Entire Agreement; Absence of Reliance. This Separation Agreement constitutes the entire agreement between the Executive
and the Company and supersedes any previous agreements or understandings between the Executive and the Company,
except the Equity Documents, the Continuing Obligations, and any other obligations specifically preserved in this Separation
Agreement. The Executive acknowledges that he is not relying on any promises or representations by the Company or the
agents, representatives or attorneys of any of the entities within the definition of Company regarding any subject matter
addressed in this Separation Agreement.
(i) Counterparts; Copies. This Separation Agreement may be executed in separate counterparts, each of which when so executed
and delivered shall be taken to be an original. Such counterparts shall together constitute one and the same document. PDF
copies shall be equally valid as originals.
[Signature Page Follows]
5

IN WITNESS WHEREOF, the parties have executed this Separation Agreement, to be effective on the Effective Date.
BERKSHIRE HILLS BANCORP, INC.
By: _________________________________
Name: David M. Brunelle
Title: Chairman
BROOKLINE BANK
By: _________________________________
Name: Paul A. Perrault
Title: Chairman
EXECUTIVE
____________________________________
Mark J. Meiklejohn
Date:________________________________
1

Exhibit B
Restrictive Covenants Agreement
Confidentiality, Assignment, Nonsolicitation and Noncompetition Agreement
In consideration and as a condition of my continued employment by Berskhire Hills Bancorp, Inc. (the “Holding Company”),
and, after the Effective Time, Brookline Bank (the “Bank” and, together with the Holding Company and their respective subsidiaries and
other affiliates and their respective successors and assigns, the “Company”), and in exchange for, among other things, benefits to be
provided by the Company under the terms of a new employment agreement, specifically, the Employment Agreement by and among the
Holding Company, Brookline Bank, and me dated [_____] (the “Employment Agreement”), which I acknowledge and agree is fair and
reasonable consideration which is independent from the continuation of my employment, I enter into this Confidentiality, Assignment,
Nonsolicitation and Noncompetition Agreement (this “Agreement”) and agree as follows:
1.
Proprietary Information. I agree that all information, whether or not in writing, concerning the Company’s business,
technology, business relationships or financial affairs that the Company has not released to the general public (collectively, “Proprietary
Information”) and all tangible embodiments thereof are and will be the exclusive property of the Company. By way of illustration,
Proprietary Information may include information or material that has not been made generally available to the public, such as: (a)
corporate information, including plans, strategies, methods, policies, resolutions, negotiations or litigation; (b) marketing information,
including strategies, methods, customer or business partner identities or other information about customers, business partners, prospect
identities or other information about prospects, or market analyses or projections; (c) financial information, including cost and
performance data, debt arrangements, equity structure, investors and holdings, purchasing and sales data and price lists; (d) operational
information, including plans, specifications, manuals, forms, templates, software, strategies, designs, methods, procedures, data, reports,
discoveries, inventions, improvements, concepts, ideas, know-how and trade secrets; and (e) personnel information, including personnel
lists, reporting or organizational structure, resumes, personnel data, performance evaluations and termination arrangements or
documents. Proprietary Information also includes information received in confidence by the Company from its customers, suppliers,
business partners or other third parties.
2.
Recognition of Company’s Rights. I will not, at any time, without the Company’s prior written permission, either during
or after my employment, disclose any Proprietary Information to anyone outside of the Company, or use or permit to be used any
Proprietary Information for any purpose other than the performance of my duties as an employee of the Company. I will cooperate with
the Company and use my reasonable best efforts to prevent the unauthorized disclosure of all Proprietary Information. I will deliver to
the Company all copies and other tangible embodiments of Proprietary Information in my possession or control upon the earlier of a
request by the Company or termination of my employment.
3.
Rights of Others. I understand that the Company is now and may hereafter be subject to nondisclosure or confidentiality
agreements with third persons that require the Company to protect or refrain from use or disclosure of proprietary information. I agree to
be bound by the terms of such agreements in the event I have access to such proprietary information. I understand that the Company
strictly prohibits me from using or disclosing confidential or proprietary information belonging to any other person or entity (including
any
1

employer or former employer), in connection with my employment. In addition, I agree not to bring any confidential information
belonging to any other person or entity onto Company premises or into Company workspaces.
4.
Commitment to Company; Avoidance of Conflict of Interest. While an employee of the Company, I will devote my full-
time efforts to the Company’s business and I will not, directly or indirectly, engage in any other business activity, except as expressly
authorized in writing and in advance by a duly authorized representative of the Company. I will advise an authorized officer of the
Company or his or her designee at such time as any activity of either the Company or another business presents me with a conflict of
interest or the appearance of a conflict of interest as an employee of the Company. I will take whatever action is reasonably requested of
me by the Company to resolve any conflict or appearance of conflict which it finds to exist.
5.
Documents and Other Materials. I will keep and maintain adequate and current records of all Proprietary Information and
Company-related developments developed by me during my employment, which records will be available to and remain the sole
property of the Company at all times. All files, letters, notes, memoranda, reports, records, data, sketches, drawings, notebooks, layouts,
charts, quotations and proposals, or other written, photographic or other tangible material containing Proprietary Information, whether
created by me or others, which come into my custody or possession, are the exclusive property of the Company to be used by me only in
the performance of my duties for the Company. Any property situated on the Company’s premises and owned by the Company, including
without limitation computers, disks and other storage media, filing cabinets or other work areas, is subject to inspection by the Company
at any time with or without notice. In the event of the termination of my employment for any reason, I will deliver to the Company all
Company property and equipment in my possession, custody or control, including all files, letters, notes, memoranda, reports, records,
data, sketches, drawings, notebooks, layouts, charts, quotations and proposals, or other written, photographic or other tangible material
containing Proprietary Information, and other materials of any nature pertaining to the Proprietary Information of the Company and to
my work, and will not take or keep in my possession any of the foregoing or any copies.
6.
Nonsolicitation and Noncompetition. In order to protect the Company’s Proprietary Information and goodwill, during my
employment and for a period of: (i) one year following the date of the cessation of my employment with the Company (the “Last Date of
Employment”) or (ii) two years following the Last Date of Employment if I breach my fiduciary duty to the Company or if I have
unlawfully taken, physically or electronically, property belonging to the Company (in either case the “Restricted Period”):
(a)
I shall not, directly or indirectly, in any manner, other than for the benefit of the Company, solicit or transact any business
with any of the customers of the Company. For purposes of this Agreement, customers shall include (i) then current customers to which
the Company provided products or services during the 12 months prior to the Applicable Date (the “One Year Lookback”) and (ii)
customer prospects that the Company solicited during the One Year Lookback and with which I had significant contact or about which I
learned confidential information in the course of my employment. The “Applicable Date” means (i) as applied to my activities after my
employment ends, the Last Date of Employment and (ii) as applied to my activities during my employment, the date of such activities.
(b)
I shall not, directly or indirectly, in any manner, solicit, entice or attempt to persuade any employee or consultant of the
Company to leave the Company for any reason or otherwise participate in or facilitate the hire, directly or through another entity, of any
person who is then employed or engaged by the Company. I understand that it would be a violation of this Section 6(b) if, other than for
the benefit of the Company during my employment with the
2

Company, I provided information about an employee or consultant to an individual who I know or should know will use such
information for the purpose of soliciting such employee or consultant.
(c)
I shall not, directly or indirectly, whether as owner, partner, shareholder, director, manager, consultant, agent, employee,
co-venturer or otherwise, anywhere in the Applicable Counties, provide any of the types of services that I provided to the Company
during the two years that immediately preceded the Applicable Date, in connection with any business that is, in whole or in part, engaged
in, or actively preparing to be engaged in, the Business. For purposes of this Agreement: “Business” shall mean, as of the Applicable
Date, the business of the Company as previously or currently conducted, or as planned to be conducted in the future, including, without
limitation, the performance of any services related to the foregoing. I acknowledge that this covenant is necessary because the
Company’s legitimate business interests cannot be adequately protected solely by the other covenants in this Agreement. The
“Applicable Counties” shall mean those counties in which the Bank (which shall include for these purposes any direct or indirect
subsidiary of the Banks or any successor or assign of any of the foregoing) maintains a physical office on the Applicable Date.
Notwithstanding anything in the foregoing to the contrary, my obligations under this Section 6(c) shall not apply to any period following
the Last Date of Employment unless I receive the “Severance Amount” pursuant to Section 5(a) or Section 7 of the Employment
Agreement or the “Change in Control Payment” pursuant to Section 6(a) of the Employment Agreement.
7.
Prior Agreements. I hereby represent that, except as I have fully disclosed previously in writing to the Company, I am not
bound by the terms of any agreement with any previous or current employer or other party to refrain from using or disclosing any trade
secret or confidential or proprietary information in the course of my employment with the Company or to refrain from competing,
directly or indirectly, with the business of such employer or any other party. I further represent that my performance of all the terms of
this Agreement as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary
information, knowledge or data acquired by me in confidence or in trust prior to my employment with the Company. I will not disclose
to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous
employer or others.
8.
Remedies Upon Breach. I understand that the restrictions contained in this Agreement are necessary for the protection of
the business and goodwill of the Company and I consider them to be reasonable for such purpose. Any breach of this Agreement is likely
to cause the Company substantial and irreparable harm and therefore, in the event of such breach, the Company, in addition to such other
remedies which may be available, will be entitled to specific performance and other injunctive relief, without the posting of a bond. I
further acknowledge that a court may render an award extending the Restricted Period as one of the remedies in the event of my
violation of this Agreement. In the event of litigation involving a claim of breach of this Agreement, the prevailing party with respect to
such claim shall be entitled to recover his or its reasonable attorney’s fees and costs with respect to such claim from the non-prevailing
party.
9.
Use of Voice, Image and Likeness. I give the Company permission to use any and all of my voice, image and likeness,
with or without using my name, in connection with the products and/or services of the Company, for the purposes of advertising and
promoting such products and/or services and/or the Company, and/or for other purposes deemed appropriate by the Company in its
reasonable discretion, except to the extent prohibited by law.
10.
No Employment Obligation. I understand that this Agreement does not create an obligation on the Company or any other
person to continue my employment. I acknowledge that, unless otherwise agreed in a formal written employment agreement signed on
behalf of the
3

Company by an authorized officer, my employment with the Company is at will and therefore may be terminated by the Company or me
at any time and for any reason, with or without cause.
11.
Survival and Assignment by the Company. I understand that my obligations under this Agreement will continue in
accordance with its express terms regardless of any changes in my title, position, duties, salary, compensation or benefits or other terms
and conditions of employment. I further understand that my obligations under this Agreement will continue following the termination of
my employment regardless of the manner of such termination and will be binding upon my heirs, executors and administrators. The
Company will have the right to assign this Agreement to its affiliates, successors and assigns. I expressly consent to be bound by the
provisions of this Agreement for the benefit of the Company or any parent, subsidiary or affiliate to whose employ I may be transferred
without the necessity that this Agreement be re-signed at the time of such transfer.
12.
Post-Employment Notifications. During the Restricted Period, I will notify the Company of any change in my address and
of each subsequent employment or business activity.
13.
Disclosures During Restricted Period. I will provide a copy of this Agreement to any person or entity with whom I may
enter into a business relationship, whether as an employee, consultant, partner, coventurer or otherwise, prior to entering into such
business relationship during the Restricted Period.
14.
Waiver. No waiver of any of my obligations under this Agreement shall be effective unless made in writing by the
Company. The failure of the Company to require my performance of any term or obligation of this Agreement, or the waiver of any
breach of this Agreement, shall not prevent the Company’s subsequent enforcement of such term or obligation or be deemed a waiver of
any subsequent breach.
15.
Severability. In case any provisions (or portions thereof) contained in this Agreement shall, for any reason, be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect the other provisions of this
Agreement, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein.
If, moreover, any one or more of the provisions contained in this Agreement shall for any reason be held to be excessively broad as to
duration, geographical scope, activity or subject, it shall be modified by limiting and reducing it, so as to be enforceable to the extent
compatible with the applicable law as it shall then appear.
16.
Arbitration; Jurisdiction. Enforcement of this Agreement shall be subject to the terms of Sections 10 (“Arbitration of
Disputes”) and 11 (“Consent to Jurisdiction”) of the Employment Agreement as if set forth herein.
17.
Independence of Obligations. My obligations under this Agreement are independent of any obligation, contractual or
otherwise, the Company has to me. The Company’s breach of any such obligation shall not be a defense against the enforcement of this
Agreement or otherwise limit my obligations under this Agreement.
18.
Protected Disclosures. I understand that nothing contained in this Agreement limits my ability to communicate with any
federal, state or local governmental agency or commission, including to provide documents or other information, without notice to the
Company. I also understand that nothing in this Agreement limits my ability to share compensation information concerning myself or
others, except that this does not permit me to disclose compensation information concerning others that I obtain because my job
responsibilities require or allow access to such information.
4

19.
Defend Trade Secrets Act of 2016. I understand that pursuant to the federal Defend Trade Secrets Act of 2016, I shall not
be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that (a) is made (i) in
confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of
reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other
proceeding, if such filing is made under seal.
20.
Other Agreements; Amendment. This Agreement supplements and does not supersede any other confidentiality,
assignment of inventions or restrictive covenant agreement between the Company and me. To the extent that this Agreement addresses
other subject matters, this Agreement supersedes any other agreements between the Company and me with respect to such subject
matters. This Agreement may be amended only in a written agreement executed by a duly authorized officer of the Company and me.
5

I UNDERSTAND THAT THIS AGREEMENT AFFECTS IMPORTANT RIGHTS. I ACKNOWLEDGE AND AGREE THAT
THE TERMS OF THIS AGREEMENT WILL APPLY TO MY ENTIRE SERVICE RELATIONSHIP WITH THE COMPANY,
INCLUDING WITHOUT LIMITATION ANY PERIOD OF SERVICE PRIOR TO THE DATE OF MY SIGNATURE BELOW.
IN WITNESS WHEREOF, the undersigned parties have executed this Agreement and agree to be bound by it.
EXECUTIVE
Signed: ______________________________
Date: __________________
COMPANY
BERKSHIRE HILLS BANCORP, INC.
By: _________________________________
Name: David M. Brunelle
Title: Chairman
Date: __________________
BROOKLINE BANK
By: _________________________________
Name: Paul A. Perrault
Title: Chairman
Date: __________________
ACTIVE/134951640.3

BROOKLINE BANCORP, INC.
INSIDER TRADING POLICY
Brookline Bancorp, Inc. (the “Company”) has adopted the following policy and procedures for securities trading by Company directors and
employees (our “Insider Trading Policy”). Our Insider Trading Policy is intended to prevent the misuse of material nonpublic information, insider
trading in securities, and the severe consequences associated with violations of insider trading laws. It is your obligation to review, understand, and
comply with this Insider Trading Policy and applicable laws. Our Board of Directors has approved this Insider Trading Policy, and we have appointed
our General Counsel as the Insider Trading Compliance Officer (with their designees, the “Insider Trading Compliance Officer”) to administer the
policy and to be available to answer your questions.
PART I. OVERVIEW
A.    Who Must Comply?
This Insider Trading Policy applies to all of our employees and members of our Board of Directors, including anyone employed by or acting as a
director of any of the Company’s subsidiaries, as well as any other individuals whom the Insider Trading Compliance Officer may designate as
Insiders (defined below) because they have access to material nonpublic information about the Company.
In addition, all of our directors, executive officers (as defined by Section 16 of the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) and other designated employees must comply with the Trading Procedures included in Part II of this Insider Trading Policy (the “Trading
Procedures”); we will refer to these individuals in this policy as “Insiders.” The Trading Procedures provide rules for when Insiders can trade in our
securities and explain the process for mandatory pre-clearance of proposed trades. You will be notified if you are considered to be an Insider who is
required to comply with the Trading Procedures.
This Insider Trading Policy and, for Insiders, the Trading Procedures also apply to the following persons (“Affiliated Persons”):
•
your “Family Members” (“Family Members” are (a) your spouse or domestic partner, children, stepchildren, grandchildren, parents,
stepparents, grandparents, siblings and in-laws who reside in the same household as you, (b) your children or your spouse’s
children who do not reside in the same household as you but are financially dependent on you, (c) any of your other family
members who do not reside in your household but whose transactions are directed by you, and (d) any other individual over whose
account you have control and to whose financial support you materially contribute. Materially contributing to financial support
would include, for example, paying an individual’s rent but not just a phone bill.);
•
all trusts, family partnerships and other types of entities formed for your benefit or for the benefit of a member of your family and
over which you have the ability to influence or direct investment decisions concerning securities;
•
all persons who execute trades on your behalf; and

•
all investment funds, trusts, retirement plans, partnerships, corporations and other types of entities over which you have the ability
to influence or direct investment decisions concerning securities; provided, however, that the Trading Procedures do not apply to
any such entity that engages in the investment of securities in the ordinary course of its business (e.g., an investment fund or
partnership) if the entity has established its own insider trading controls and procedures in compliance with applicable securities
laws and it (or an affiliated entity) has represented to the Company that its affiliated entities: (a) engage in the investment of
securities in the ordinary course of their respective businesses; (b) have established insider trading controls and procedures in
compliance with securities laws; and (c) are aware the securities laws prohibit any person or entity who has material nonpublic
information concerning the Company from purchasing or selling securities of the Company or from communicating such
information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or
sell securities.
You are responsible for ensuring compliance with this Insider Trading Policy, including the Trading Procedures contained herein, by all of your
Affiliated Persons.
B.    What is Prohibited by this Insider Trading Policy?
You and your Affiliated Persons are prohibited from engaging in insider trading and from trading in securities in violation of this Insider Trading
Policy. “Insider trading” is (1) trading (buying or selling) the securities of a company whether for your account or for the account of another, while in
the possession of material nonpublic information (see definition below) about that company or (2) disclosing material nonpublic information about
a company to others who may trade on the basis of that information. Insider trading can result in criminal prosecution, jail time, significant fines
and public embarrassment for you and the Company.
Prohibition on Trading in Company Securities
When you are in possession of material nonpublic information about the Company, whether positive or negative, you are prohibited from trading
(whether for your account of for the account of another) in the Company’s securities, which include common stock, options to purchase common
stock, any other type of securities that the Company may issue (such as preferred stock, convertible debentures, warrants and exchange-traded
options), and any derivative securities that provide the economic equivalent of ownership of any the Company’s securities or an opportunity, direct
or indirect, to profit from any change in the value of the Company’s securities, except for trades made pursuant to plans approved by the Insider
Trading Compliance Officer in accordance with this policy that are intended to comply with Rule 10b5-1 under the Exchange Act.
The trading prohibitions in this Insider Trading Policy do not apply to: (1) an exercise of an employee stock option when payment of the exercise
price is made in cash or (2) the withholding by the Company of shares of stock upon vesting of restricted stock or upon settlement of restricted
stock units to satisfy applicable tax withholding requirements if (a) such withholding is required by the applicable plan or award agreement or (b)
the election to exercise such tax withholding right was made by the Insider in compliance with the Trading Procedures.
The trading prohibitions in this Insider Trading Policy do apply, however, to the use of outstanding Company securities to pay part or all of the
exercise price of a stock option, any sale of stock as part of a
    2

broker-assisted cashless exercise of an option, and any other market sale for the purpose of generating the cash needed to pay the exercise price of
an option.
Prohibition on Tipping
Providing material nonpublic information about the Company to another person who may trade or advise others to trade on the basis of that
information is known as “tipping” and is illegal. You are prohibited from providing material nonpublic information about the Company to a friend,
relative, or anyone else who might buy or sell a security or other financial instrument on the basis of that information, whether or not you intend to
or actually do realize a profit (or any other benefit) from such tipping. Additionally, you are prohibited from recommending to any person that such
person engage in or refrain from engaging in any transaction involving the Company’s securities, or otherwise give trading advice concerning the
Company’s securities, if you are in possession of material nonpublic information about the Company.
Duration of Trading Prohibitions
These trading prohibitions continue whenever and for as long as you know or are in possession of material nonpublic information. Remember,
anyone scrutinizing your transactions will be doing so after the fact, with the benefit of hindsight. As a practical matter, before engaging in any
transaction, you should carefully consider even the appearance of improper insider trading and how enforcement authorities and others might view
the transaction in hindsight.
This Insider Trading Policy applies to you and your Affiliated Persons so long as you are associated with the Company. If you leave the Company for
any reason, this Insider Trading Policy, including, if applicable, the Trading Procedures described in Part III, will continue to apply to you and your
Affiliated Persons until the later of: (1) the first trading day following the public release of earnings for the fiscal quarter in which you leave the
Company or (2) the first trading day after any material nonpublic information known to you has become public or is no longer material.
C.    What is Material Nonpublic Information?
This Insider Trading Policy prohibits you from trading in a company’s securities if you are in possession of information about the company that is
both “material” and “nonpublic.” If you have a question whether certain information you are aware of is material or has been made public, you
should consult with the Insider Trading Compliance Officer.
“Material” Information
Information about our Company or any other company is “material” if it could reasonably be expected to affect the investment decisions of a
stockholder or potential investor or if disclosure of the information could reasonably be expected to significantly alter the total mix of information
in the marketplace about us or any other company. We speak mostly in this Insider Trading Policy about determining whether information about us
is material and nonpublic, but the same analysis applies to information about other companies that would preclude you from trading in their
securities.
In simple terms, material information is any type of information that could reasonably be expected to affect the market price of our securities. Both
positive and negative information may be material. While it is not possible to identify all information that would be deemed “material,” the
following items are examples of the types of information that could be material:
    3

•
projections of future earnings or losses, or other earnings guidance;
•
earnings or revenue that are inconsistent with the consensus expectations of the investment community
•
quarterly financial results that are known but have not been publicly disclosed;
•
potential restatements of the Company’s financial statements, changes in auditors or auditor notification that the Company may no
longer rely on an auditor’s audit report;
•
pending or proposed corporate mergers, acquisitions, tender offers, joint ventures or dispositions of significant assets;
•
changes in senior management or member of our Board of Directors;
•
significant actual or threatened litigation or governmental investigations or major developments in such matters;
•
cybersecurity risks and incidents, including the discovery of significant vulnerabilities or breaches;
•
developments regarding customers (e.g., the acquisition, loss or performance of a loan);
•
changes in auditors or auditor notification that the Company may no longer rely on an auditor’s audit report;
•
changes in dividend policy, declarations of stock splits, or proposed securities offerings or other financings;
•
potential defaults under our credit agreements or indentures or potential material liquidity issues; and
•
bankruptcies or receiverships.
The above items will not always be material. For example, some new products or contracts may clearly be material while others may not be. No
“bright-line” standard or list of items can adequately address the range of situations that may arise; information and events should be carefully
considered in terms of their materiality to the Company.
“Nonpublic” Information
Material information is “nonpublic” if it has not been disseminated in a manner making it available to investors generally.
To demonstrate that information is public, one must be able to point to some fact that establishes that the information has become publicly
available, such as the filing of a report with the SEC, the distribution of a press release, publishing the information on our website or posting on
social media if those are regular ways we communicate with investors, or by other means that are reasonably designed to provide broad public
access. Before a person with material nonpublic information can trade, the market must have adequate time to absorb the information that has
been disclosed. For the purposes of
    4

this Insider Trading Policy, information will be considered public after the completion of two full business days of trading following our public
release of the information. For that purpose, a full day of trading means a session of regular trading hours on the New York Stock Exchange (“NYSE”)
or the Nasdaq Stock Market (“Nasdaq”) between 9:30 a.m. and 4:00 p.m. Eastern Time (or such earlier closing time as has been set by exchange
rules) has occurred.
For example, if the Company publicly discloses material nonpublic information of which you are aware before trading begins on a Tuesday, the first
time you can buy or sell Company securities is the opening of the market on Thursday. However, if the Company publicly discloses material
information after trading begins on a Tuesday, the first time that you can buy or sell Company securities is the opening of the market on Friday.
D.    What are the Penalties for Insider Trading and Noncompliance with this Insider Trading Policy?
Both the U.S. Securities and Exchange Commission (the “SEC”) and the national securities exchanges, through the Financial Industry Regulatory
Authority (“FINRA”), investigate and are very effective at detecting insider trading. The U.S. government pursues insider trading violations
vigorously, successfully prosecuting, for example, trading by employees in foreign accounts, trading by family members and friends of insiders, and
trading involving only a small number of shares.
The penalties for violating rules against insider trading can be severe and include:
•
forfeiting any profit gained or loss avoided by the trading;
•
payment of the loss suffered by the persons who, contemporaneously with the purchase or sale of securities that are subject of a
violation, have purchased or sold securities of the same class;
•
payment of criminal penalties of up to $5,000,000;
•
payment of civil penalties of up to three times the profit made or loss avoided; and
•
imprisonment for up to 20 years.
The Company and/or the supervisors of the person engaged in insider trading may also be required to pay civil penalties or fines of $2 million or
more, up to three times the profit made or loss avoided, as well as criminal penalties of up to $25,000,000, and could under some circumstances be
subject to private lawsuits.
Violation of this Insider Trading Policy or any federal or state insider trading laws may subject you to disciplinary action by the Company, including
termination of your employment or other relationship with the Company. The Company reserves the right to determine, in its own discretion and
on the basis of the information available to it, whether this Insider Trading Policy has been violated. The Company may determine that specific
conduct violates this Insider Trading Policy whether or not it also violates the law. It is not necessary for the Company to await the filing or
conclusion of a civil or criminal action against an alleged violator before taking disciplinary action.
E.    How Do You Report a Violation of this Insider Trading Policy?
If you have a question about this Insider Trading Policy, including whether certain information you are aware of is material or has been made public,
you should consult with the Insider Trading Compliance
    5

Officer. In addition, if you violate this Insider Trading Policy or any federal or state laws governing insider trading or know of any such violation by
any director or employee of the Company, you should report the violation immediately to the Insider Trading Compliance Officer.
PART II. TRADING PROCEDURES
A.    Special Trading Restrictions Applicable to Insiders
In addition to needing to comply with the restrictions on trading in our securities set forth above, Insiders and their Affiliated Persons are subject to
the following special trading restrictions:
1.    No Trading Except During Trading Windows.
The announcement of the Company’s quarterly financial results almost always has the potential to have a material effect on the market for the
Company’s securities. Although an Insider may not know the financial results prior to public announcement, if an Insider engages in a trade before
the financial results are disclosed to the public, such trades may give an appearance of impropriety that could subject the Insider and the Company
to a charge of insider trading. Therefore, subject to limited exceptions described herein, Insiders may trade in Company securities only during four
quarterly trading windows and then only after obtaining pre-clearance from the Insider Trading Compliance Officer in accordance with the
procedures set forth below. Unless otherwise advised, the four trading windows consist of the periods that begin after market close on the second
full trading day following the Company’s issuance of a press release (or other method of broad public dissemination) announcing its quarterly or
annual earnings and end at the close of business on the 15  day before the end of the then-current quarter. For the purposes of the foregoing, a
full trading day means an entire calendar day in which a session of regular trading hours on the NYSE or Nasdaq between 9:30 a.m. and 4:00 p.m.
Eastern Time (or such earlier close time as has been set by exchange rules) has occurred. Insiders may be allowed to trade outside of a trading
window only (a) pursuant to a pre-approved Rule 10b5-1 Plan as described below or (b) if granted a waiver in accordance with the procedure for
granting waivers as described below.
For example, if we release earnings results after the market closes on a Wednesday, the first time an Insider can buy or sell Company securities is
after the market opens on the following Monday.
Of course, if an Insider has material nonpublic information about the Company during one of these trading windows, the Insider may not trade in
the Company’s securities.
2.    Special Closed Trading Periods
The Insider Trading Compliance Officer may designate, from time to time, a “Special Closed Window” during what would be a permitted trading
window. During a Special Closed Window, designated Insiders (which could be all Insiders or a subset of them) may not trade in the Company’s
securities. The Insider Trading Compliance Officer may also impose a Special Closed Window on Insiders or a subset of them to prohibit trading in
the securities of other companies, including specified peers or competitors of the Company. The imposition of a Special Closed Window will not be
announced to the Company generally, should not be communicated to any other person, and may itself be considered under this Insider Trading
Policy to be material nonpublic information about the Company.
th
    6

3.    Prohibited Transactions
•
No Short Sales. You may not at any time sell any securities of the Company that are not owned by you at the time of the sale (a
“short sale”).
•
No Purchases or Sales of Derivative Securities or Hedging Transactions. You may not buy or sell puts, calls, other derivative
securities of the Company or any derivative securities that provide the economic equivalent of ownership of any of the
Company’s securities or an opportunity, direct or indirect, to profit from any change in the value of our securities or engage in
any other hedging transaction with respect to our securities.
•
No Company Securities Subject to Margin Calls. You may not use the Company’s securities as collateral in a margin account.
•
No Pledges. You may not pledge Company securities as collateral for a loan (or modify an existing pledge).
4.    Gifts and Other Distributions in Kind.
No Insider may donate or make any other transfer of Company securities without consideration when the Insider is not permitted to trade unless
the donee agrees not to sell the shares until the Insider is permitted to sell. In addition to charitable donations or gifts to family members, friends,
trusts or others, this prohibition applies to distributions to limited partners by limited partnerships that are subject to this Insider Trading Policy.
5.    No Trading During Retirement Plan Blackout Periods.
If we adopt a policy to allow ownership of Company stock in our 401(k) or other retirement plan, then during a retirement plan “blackout period,”
no Insider may trade in any Company securities that were acquired in connection with the Insider’s service or employment with the Company
except as specifically permitted below. A blackout period includes any period of more than three (3) consecutive business days during which at least
fifty percent (50%) of all participants and beneficiaries under all of the individual account plans maintained by the Company and members of the
Company’s controlled group are prohibited from trading in Company securities through their plan accounts. Insiders will receive advance notice of
any such blackout period from the Insider Trading Compliance Officer.
B.     Pre-Clearance Procedures
No Insider may trade in our securities, even during an open trading window, unless the trade has been approved by the Insider Trading Compliance
Officer in accordance with the procedures described below.Gifts of Company securities are considered a trade in securities for purposes of this Part
II.B. In reviewing trading requests, the Insider Trading Compliance Officer may consult with our other officers and/or outside legal counsel and will
seek approval of their own trades from the Chief Human Resources Officer.
1.
Procedures. No Insider may trade in our securities unless:
•
The Insider has notified the Insider Trading Compliance Officer of the amount and nature of the proposed trade(s) using the
Stock Transaction Request form attached
 
    7

to this Insider Trading Policy. To provide adequate time for the preparation of any required reports under Section 16 of the
Exchange Act, a Stock Transaction Request form should, if practicable, be received by the Insider Trading Compliance Officer at
least two (2) business days before the intended trade date;
•
The Insider has certified to the Insider Trading Compliance Officer in writing before the proposed trade(s) that the Insider does
not possess material nonpublic information concerning the Company;
•
If the Insider is an executive officer or director, the Insider has informed the Insider Trading Compliance Officer, using the Stock
Transaction Request form, whether, to the Insider’s best knowledge, (a) the Insider has (or is deemed to have) engaged in any
opposite way transactions within the previous six months that were not exempt from Section 16(b) of the Exchange Act and (b)
if the transaction involves a sale by an “affiliate” of the Company or of “restricted securities” (as such terms are defined under
Rule 144 under the Securities Act of 1933, as amended (“Rule 144”)), whether the transaction meets all of the applicable
conditions of Rule 144; and
•
The Insider Trading Compliance Officer has approved the trade(s) and has certified their approval in writing (which may be by
email).
The Insider Trading Compliance Officer does not assume responsibility for, and approval by the Insider Trading Compliance Officer does not protect
the Insider from, the consequences of prohibited insider trading.
2.
Additional Information.
Insiders shall provide to the Insider Trading Compliance Officer any documentation the Insider Trading Compliance Officer reasonably requires in
furtherance of the foregoing procedures. Any failure to provide such information will be grounds for the Insider Trading Compliance Officer to deny
approval of the trade request.
3.
Notification of Brokers of Insider Status
Insiders who are required to file reports under Section 16 of the Exchange Act shall inform their broker-dealers that (a) the Insider is subject to
Section 16; (b) the broker shall confirm that any trade by the Insider or any of their affiliates has been precleared by the Company; and (c) the
broker is to provide transaction information to the Insider and/or Insider Trading Compliance Officer on the day of a trade.
4.
No Obligation to Approve Trades.
The foregoing approval procedures do not in any way obligate the Insider Trading Compliance Officer to approve any trade. The Insider Trading
Compliance Officer has sole discretion to reject any trading request.
From time to time, an event may occur that is material to the Company and is known by only by a limited number of directors and employees. The
Insider Trading Compliance Officer may decline an Insider’s request to preclear a proposed trade based on the existence of a material nonpublic
    8

development – even if the Insider is not aware of that material nonpublic development. If any Insider engages in a trade before a material
nonpublic development is disclosed to the public or resolved, the Insider and the Company might be exposed to a charge of insider trading that
could be costly and difficult to refute even if the Insider was unaware of the development. So long as the event remains material and nonpublic, the
Insider Trading Compliance Officer may decide not to approve any transactions in the Company’s securities. The Insider Trading Compliance Officer
will subsequently notify the Insider once the material nonpublic development is disclosed to the public or resolved. If an Insider requests
preclearance of a trade during the pendency of such an event, the Insider Trading Compliance Officer may reject the trading request without
disclosing the reason.
5.
Completion of Trades.
After receiving written clearance to engage in a trade signed by the Insider Trading Compliance Officer, an Insider must complete the proposed
trade within five (5) business days or make a new trading request. Even if an Insider has received clearance, the Insider may not engage in a trade if
(i) such clearance has been rescinded by the Insider Trading Compliance Officer, (ii) the Insider has otherwise received notice that the trading
window has closed or (iii) the Insider has or acquires material nonpublic information.
6.
Post-Trade Reporting.
The details of any transactions in our securities (including transactions effected pursuant to a Rule 10b5-1 Plan) by an Insider (or an Affiliated
Person) who is required to file reports under Section 16 of the Exchange Act must be reported to the Insider Trading Compliance Officer by the
Insider or their brokerage firm on the same day on which a trade order is placed or such a transaction otherwise is entered into. The report shall
include the date of the transaction, quantity of shares, the price and the name of the broker-dealer that effected the transaction. This reporting
requirement may be satisfied by providing (or having the Insider’s broker provide) a trade order confirmation to the Insider Trading Compliance
Officer if the Insider Trading Compliance Officer receives such information by the required date. Compliance by directors and executive officers with
this provision is imperative given the requirement of Section 16 of the Exchange Act that these persons generally report changes in ownership of
Company securities within two (2) business days. The sanctions for noncompliance with this reporting deadline include mandatory disclosure in the
Company’s proxy statement for the next annual meeting of stockholders, as well as possible civil or criminal sanctions for chronic or egregious
violators.
C.    Exemptions
1.
Pre-Approved Rule 10b5-1 Plan.
Transactions made pursuant to an approved Rule 10b5-1 Plan (as defined below) will not be subject to our trading windows, retirement plan
blackout periods (if applicable), or pre-clearance procedures, and Insiders are not required to complete a Stock Transaction Request form for such
transactions. Rule 10b5-1 of the Exchange Act provides an affirmative defense from insider trading liability under the federal securities laws for
trading plans, arrangements or instructions that meet specified requirements. A trading plan, arrangement or instruction that meets the
requirements of the SEC’s Rule 10b5-1 (a
    9

“Rule 10b5-1 Plan”) enables Insiders to trade in Company securities outside of our trading windows, even when in possession of material nonpublic
information.
2.
Employee Equity and Retirement Plans.
Exercise of Stock Options. The trading prohibitions and restrictions set forth in the Trading Procedures do not apply to the exercise for cash of an
option to purchase securities of the Company. However, the exercise is subject to the current reporting requirements of Section 16 of the Exchange
Act and, therefore, Insiders must comply with the post-trade reporting requirement described in Section C above for any such transaction. In
addition, the securities acquired upon the exercise of an option to purchase Company securities are subject to all of the requirements of this Insider
Trading Policy, including the Trading Procedures. Moreover, the Trading Procedures apply to the use of outstanding Company securities to pay part
or all of the exercise price of an option, any net option exercise, any exercise of a stock appreciation right, share withholding and any sale of stock as
part of a broker-assisted cashless exercise of an option or any other market sale for the purpose of generating the cash needed to pay the exercise
price of an option.
Tax Withholding on Restricted Stock/Units. The trading prohibitions and restrictions set forth in the Trading Procedures do not apply to the
withholding by the Company of shares of stock upon vesting of restricted stock or upon settlement of restricted stock units to satisfy tax
withholding requirements if (a) withholding is required by the applicable plan or award agreement or (b) the election to exercise the tax
withholding right was made by the Insider in compliance with the Trading Procedures.
Dividend Reinvestment Plan. The trading prohibitions and restrictions set forth in the Trading Procedures do not apply to purchases of Company
securities under the Company’s Dividend Reinvestment and Stock Purchase Plan (“DRSPP”) resulting from the reinvestment by Insiders of dividends
paid on Company securities. Such prohibitions and restrictions do apply, however, to voluntary purchases of Company securities resulting from
additional contributions by Insiders to the DRSPP (i.e., direct stock purchases) and to elections by Insiders to participate in the plan or change the
level of such participation. The Trading Procedures also apply to sales by Insiders of Company securities purchased pursuant to the plan.
D.    Waivers
A waiver of any provision of this Insider Trading Policy or the Trading Procedures may be authorized in writing by the Insider Trading Compliance
Officer or his or her designee. All waivers shall be reported to the Board of Directors.
PART III. ACKNOWLEDGEMENT
We will deliver a copy of this Insider Trading Policy to all current employees and directors and to future employees and directors at the start of their
employment or relationship with the Company. Each of these individuals must acknowledge that they have received a copy and agree to comply
with the terms of this Insider Trading Policy, and, if applicable, the Trading Procedures contained herein. The attached acknowledgment must be
completed and submitted to the Company within ten days of receipt.
At our request, directors and employees will be required to re-acknowledge and agree to comply with the Insider Trading Policy (including any
amendments or modifications). For that purpose, an individual will be deemed to have acknowledged and agreed to comply with the Insider
Trading Policy, as amended
    10

from time to time, when copies of those items have been delivered by regular or electronic mail (or other delivery option used by the Company) to
the Insider Trading Compliance Officer.
*    *    *
Questions regarding this Insider Trading Policy are encouraged and may be directed to the Insider Trading Compliance Officer.
ADOPTED:             January 29, 2025
EFFECTIVE:            January 29, 2025
    11

EXHIBIT A
STOCK TRANSACTION REQUEST
Pursuant to Brookline Bancorp Inc.’s Insider Trading Policy, I hereby notify Brookline Bancorp, Inc. (the “Company”) of my intent to trade the
securities of the Company as indicated below:
REQUESTER INFORMATION
Insider’s Name:     _________________________________________
INTENT TO PURCHASE
Number of shares:        __________________________
Intended trade date:        __________________________
Means of acquiring shares:
Acquisition through employee benefit plan (please specify):
___________________________________________________________
Purchase through a broker on the open market
Other (please specify): ________________________________________
INTENT TO SELL
Number of shares:        __________________________
Intended trade date:        __________________________
Means of selling shares:
Sale through employee benefit plan (please specify):
___________________________________________________________
Sale through a broker on the open market
Other (please specify): ________________________________________
SECTION 16
RULE 144 (Not applicable if transaction requested involves a purchase)
I am not subject to Section 16.
To the best of my knowledge, I have not (and am not
deemed to have) engaged in an opposite way
transaction within the previous 6 months that was
not exempt from Section 16(b) of the Exchange Act.
None of the above.
I am not an “affiliate” of the Company and the transaction requested above
does not involve the sale of “restricted securities” (as those terms are
defined in Rule 144 under the Securities Act of 1933, as amended).
To the best of my knowledge, the transaction requested above will meet all
of the applicable conditions of Rule 144.
The transaction requested will be made pursuant to an effective registration
statement covering such transaction.
None of the above.
    12

CERTIFICATION
I hereby certify that I am not (1) in possession of any material nonpublic information concerning the Company, as defined in the Company’s
Insider Trading Policy and (2) purchasing any securities of the Company on margin in contravention of the Company’s Trading Procedures. I
understand that, if I trade while possessing such information or in violation of such trading restrictions, I may be subject to severe civil and/or
criminal penalties and may be subject to discipline by the Company including termination of my employment.
Insider’s Signature
Date
APPROVAL
Signature of Compliance Officer (or designee)
Date
*NOTE: Multiple lots must be listed on separate forms or broken out.
    13

EXHIBIT B
ACKNOWLEDGEMENT
I hereby acknowledge that I have read, that I understand, and that I agree to comply with the Insider Trading Policy of Brookline Bancorp, Inc. (the
“Company”). I further acknowledge and agree that I am responsible for ensuring compliance with the Insider Trading Policy and the Trading
Procedures by all of my “Affiliated Persons.” I also understand and agree that I will be subject to sanctions, including termination of employment,
that may be imposed by the Company, in its sole discretion, for violation of the Insider Trading Policy, and that the Company may give stop-transfer
and other instructions to the Company’s transfer agent or any brokerage firm managing the Company’s equity incentive plan(s) against the transfer
of any Company securities that the Company considers to be in contravention of the Insider Trading Policy.
This acknowledgement constitutes consent for the Company to impose sanctions for violation of the Insider Trading Policy, including the Trading
Procedures, and to issue any stop-transfer orders to the Company’s transfer agent that the Company, in its sole discretion, deems appropriate to
ensure compliance.
Date:
Signature:
Name:
Title:
    14

Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the registration statement (No. 333-273248) on Form S-3 and registration statements (Nos. 333-197317 and 333-
256081) on Form S-8 of our reports dated March 3, 2025, with respect to the consolidated financial statements of Brookline Bancorp, Inc. and the effectiveness of
internal control over financial reporting.
                   /s/ KPMG LLP
Boston, Massachusetts
March 3, 2025
    

Exhibit 31.1
Certification of Chief Executive Officer 
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Paul A. Perrault, Chairman and Chief Executive Officer, certify that:
1.    I have reviewed this Annual Report on Form 10-K of Brookline Bancorp, Inc. (the "Registrant"); 
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report; 
3.    Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the Registrant as of, and for, the periods presented in this report; 
4.    The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the Registrant and have: 
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared; 
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; 
c)    Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and 
d)    Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's fourth fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 
5.    The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the
audit committee of Registrant's board of directors (or persons performing the equivalent functions): 
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the Registrant's ability to record, process, summarize and report financial information; and 
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial
reporting.
Date: March 3, 2025
/s/ PAUL A. PERRAULT
Paul A. Perrault
Chairman and Chief Executive Officer
(Principal Executive Officer)

Exhibit 31.2 
Certification of Chief Financial Officer 
PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 
I, Carl M. Carlson, Co-President, Chief Financial and Strategy Officer, certify that:
1.    I have reviewed this Annual Report on Form 10-K of Brookline Bancorp, Inc. (the "Registrant"); 
2.    Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect to the period covered by this report; 
3.    Based on my knowledge, the financial statements and other financial information included in this report, fairly present in all material respects the financial condition, results of
operations and cash flows of the Registrant as of, and for, the periods presented in this report; 
4.    The Registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15(d)-15(f)) for the Registrant and have: 
a)    Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in
which this report is being prepared; 
b)    Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, 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; 
c)    Evaluated the effectiveness of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and 
d)    Disclosed in this report any change in the Registrant's internal control over financial reporting that occurred during the Registrant's fourth fiscal quarter that has
materially affected, or is reasonably likely to materially affect, the Registrant's internal control over financial reporting; and 
5.    The Registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant's auditors and the
audit committee of Registrant's board of directors (or persons performing the equivalent functions): 
a)    All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect
the Registrant's ability to record, process, summarize and report financial information; and 
b)    Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal control over financial
reporting.
Date: March 3, 2025
/s/ CARL M. CARLSON
Carl M. Carlson
Co-President, Chief Financial and Strategy Officer
(Principal Financial Officer)

Exhibit 32.1 
STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002, 18 U.S.C. SECTION 1350 
The undersigned, Paul A. Perrault, is the Chairman and Chief Executive Officer of Brookline Bancorp, Inc. (the "Company").
This statement is being furnished in connection with the filing by the Company of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "Report").
By execution of this statement, I certify that:
A)    the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and 
B)    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods
covered by the Report.
This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and
Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. It is not intended that this statement be deemed to be filed for purposes of
the Securities Exchange Act of 1934, as amended.
Date: March 3, 2025
/s/ PAUL A. PERRAULT
Paul A. Perrault
Chairman and Chief Executive Officer
(Principal Executive Officer)

Exhibit 32.2 
STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002, 18 U.S.C. SECTION 1350 
The undersigned, Carl M. Carlson, is the Co-President, Chief Financial and Strategy Officer of Brookline Bancorp, Inc. (the "Company").
This statement is being furnished in connection with the filing by the Company of the Company's Annual Report on Form 10-K for the year ended December 31, 2024 (the "Report").
By execution of this statement, I certify that:
A)    the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and 
B)    the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods
covered by the Report.
This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and
Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. It is not intended that this statement be deemed to be filed for purposes of
the Securities Exchange Act of 1934, as amended.
Date: March 3, 2025
/s/ CARL M. CARLSON
Carl M. Carlson
Co-President, Chief Financial and Strategy Officer
(Principal Financial Officer)