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What changed in Beacon Financial Corp's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Beacon Financial Corp's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+721 added−682 removedSource: 10-K (2026-03-02) vs 10-K (2025-03-03)

Top changes in Beacon Financial Corp's 2025 10-K

721 paragraphs added · 682 removed · 78 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

17 edited+124 added−241 removed0 unchanged
Biggest changeGenerally, Section 23A limits the extent to which the institution or its subsidiaries may engage with any one affiliate in “covered transactions,” such as loans, to 10% of such institution’s capital stock and surplus. There is also an aggregate limit on all such “covered transactions” with all affiliates to 20% of the institution’s capital stock and surplus.
Biggest changeAn 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, 10% of the capital stock and surplus of the insured depository institution; and (ii) in the case of all affiliates, 20% of the capital stock and surplus of the insured depository institution.
Loan interest rates and other key loan terms are affected principally by the Bank’s credit policy, asset/liability strategy, loan demand, competition, and the supply of money available for lending purposes. These factors, in turn, are affected by general and economic conditions, monetary policies of the federal government, including the Federal Reserve, legislative tax policies, and governmental budgetary matters.
Loan interest rates and other key loan terms are affected principally by the Bank’s credit policy, asset/liability strategy, loan demand, competition, and the supply of money available for lending purposes. These factors, in turn, are affected by general and economic conditions, monetary policies of the federal government, including the FRB, legislative tax policies, and governmental budgetary matters.
Most of the Bank’s loans held for investment are made in its market areas and are secured by real estate located in its market areas. Lending is therefore affected by activity in these real estate markets. The Bank monitors and manages the amount of long-term fixed-rate lending volume.
Most of the Bank’s loans held for investment are made in its market areas and are secured by real estate located in its market areas. Lending is therefore affected by activity in these real estate markets.
Insurance of deposits may be terminated by the FDIC upon a finding that the institution has engaged in unsafe or unsound practices, is in an unsafe or unsound condition to continue operations or has violated any applicable law, regulation, order or condition imposed by a regulator.
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.
The Federal Deposit Insurance Act generally limits the types of equity investments an FDIC-insured state-chartered bank, such as the Bank, may make and the kinds of activities in which such a bank may engage, as a principal, to those that are permissible for national banks. 19 Table of Contents Interstate Banking and Branching .
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. 5 Table of Contents 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 Bank, may make and the kinds of activities in which such banks may engage, as a principal, to those that are permissible for national banks.
The Company’s annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and any amendments to those reports filed pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge at sec.gov and, as soon as reasonably practicable after we electronically file such material with the Securities and Exchange Commission, at berkshirebank.com under the Investor Relations tab.
The Company makes available on or through its internet website, www.beaconfinancialcorporation.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 Bank also operates a commercial payment processing business that serves regional and national payroll service bureau customers. These payroll deposits often fluctuate daily by hundreds of millions of dollars depending on payroll cycles. Online banking and mobile banking functionality is increasingly important as a component of deposit account access and service delivery.
The Company's core deposits were 67.0% of total deposits at December 31, 2025, a decrease from 69.1% at December 31, 2024. The Bank also operates a commercial payment processing business that serves regional and national payroll service bureau customers. These payroll deposits, included in money market often fluctuate daily by hundreds of millions of dollars depending on payroll cycles.
Federal regulations require FDIC insured depository institutions to meet several minimum capital standards: a common equity Tier 1 capital to risk-based assets ratio of 4.5%, a Tier 1 capital to risk-based assets ratio of 6.0%, a total capital to risk-based assets ratio of 8.0%, and a 4.0% Tier 1 capital to total assets leverage ratio.
Under the FRB's rules, the Company and the Bank 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%.
An institution is deemed to be “well capitalized” if it has a total risk-based capital ratio of 10.0% or greater, a Tier 1 risk-based capital ratio of 8.0% or greater, a common equity Tier 1 ratio of 6.5% or greater, and a leverage ratio of 5.0% or greater.
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 equity 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.
Prior Federal Reserve Board approval would be required for the Company to acquire direct or indirect ownership or control of any voting securities of any bank or bank holding company if, after such acquisition, it would, directly or indirectly, own or control more than five percent of any class of voting shares of the bank or bank holding company.
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.
The Company's brand theme of “Where You Bank Matters” is targeted to highlight these differentiating factors. LENDING ACTIVITIES General. The Bank originates loans in the basic portfolio categories discussed below. Lending activities are limited by federal and state laws and regulations.
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 The Bank originates loans in the basic portfolio categories discussed below. Lending activities are limited by federal and state laws and regulations.
Commercial and industrial loans are of higher risk and are made primarily on the basis of the borrower’s ability to make repayment from the cash flows of its business. Further, any collateral securing such loans may depreciate over time, may be difficult to monitor and appraise and may fluctuate in value.
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.
The Bank is subject to extensive regulation by the Massachusetts Commissioner of Banks (the “Commissioner”), as its chartering agency, and by the FDIC, as its primary regulator and deposit insurer.
As a bank holding company, the Company is subject to regulation, supervision and examination by 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 Bank.
Information on the website is not incorporated by reference and is not a part of this annual report on Form 10-K. COMPETITION The Company is subject to strong competition from banks and other financial institutions and financial service providers. Its competition includes national and super-regional banks.
“Management's Discussion and Analysis of Financial Condition and Results of Operations.” Competition The Company is subject to strong competition from banks and other financial institutions and financial service providers.
The Company is subject to examination, regulation, and periodic reporting as a bank holding company under the Bank Holding Company Act of 1956, as amended. The Company is required to obtain the prior approval of the Federal Reserve Board to acquire all, or substantially all, of the assets of any other bank or bank holding company.
Additionally, an existing bank holding company must obtain prior approval of the FRB to acquire 5% or more of a class of voting securities of a bank or bank holding company. Regulation of the Bank The Bank is subject to regulation, supervision and examination by the MDOB and the FRB.
An institution is considered to be “critically undercapitalized” if it has a ratio of tangible equity (as defined in the regulations) to total assets that is equal to or less than 2.0%. “Undercapitalized” banks must adhere to growth, capital distribution (including dividend), and other limitations and are required to submit a capital restoration plan.
A bank 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 Community Reinvestment Act (“CRA”) establishes a requirement for federal banking agencies that, in connection with examinations of depository institutions within their jurisdiction, the agencies evaluate the record of the depository institutions in meeting the credit needs of their local communities, including low- and moderate-income neighborhoods, consistent with the safe and sound operation of those institutions.
The Community Reinvestment Act The CRA requires the FRB to evaluate the Bank with regard to its performance in helping to meet the credit needs of the communities the Bank serves, including low and moderate-income neighborhoods, consistent with safe and sound banking operations, and to take this record into consideration when evaluating certain applications.
Removed
BUSINESS FORWARD-LOOKING STATEMENTS Certain statements contained in this document that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (referred to as the Securities Act), and Section 21E of the Securities Exchange Act of 1934, as amended (referred to as the Securities Exchange Act), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Added
Item 1. Business General Beacon Financial Corporation, a Delaware corporation, is the holding company for Beacon Bank & Trust and its subsidiaries and Clarendon Private.
Removed
You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including among other things, factors related to the pending merger between Berkshire Hills Bancorp, Inc.
Added
The Company 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 wealth management services. Clarendon Private is a registered investment advisor with the SEC.
Removed
(“Berkshire” or “the Company”) and Brookline Bancorp, Inc., including delays or impediments to completing the transaction, legal proceedings that may be instituted against the Company, expenses associated with the transaction, restrictions on Berkshire’s business during the pendency of the transaction, diversion of management’s attention from other business operations and opportunities, reactions of customers and employees to the transaction, challenges integrating the companies, and any failure to realize anticipated benefits of the transaction, and other factors such as changes in general economic and business conditions, increased competitive pressures, changes in the interest rate environment and inflation, legislative and regulatory change, changes in the financial markets, and other risks and uncertainties disclosed from time to time in documents that Berkshire files with the Securities and Exchange Commission, including the Risk Factors in Item 1A of this report.
Added
Through Clarendon Private and the Trust and Investments Division of the Bank, 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.
Removed
Because of these and other uncertainties, Berkshire’s actual results, performance or achievements, or industry results, may be materially different from the results indicated by these forward-looking statements. In addition, Berkshire’s past results of operations do not necessarily indicate Berkshire’s combined future results.
Added
As a full-service financial institution with 147 banking offices throughout New England and New York, the Bank and its subsidiaries focus their efforts on developing and deepening long-term banking relationships with qualified customers through a full complement of products, excellent customer service, and strong risk management.
Removed
You should not place undue reliance on any of the forward-looking statements, which speak only as of the dates on which they were made. Berkshire is not undertaking an obligation to update forward-looking statements, even though its situation may change in the future, except as required under federal securities law.
Added
The Company's headquarters and executive management are located at 131 Clarendon Street, Boston, Massachusetts 02116, and its telephone number is 617-425-4600. Completion of Merger of Equals On September 1, 2025, the Company completed its merger of equals with Brookline Bancorp, Inc.
Removed
Berkshire qualifies all of its forward-looking statements by these cautionary statements. GENERAL Berkshire Hills Bancorp, Inc. is headquartered in Boston, Massachusetts. Berkshire is a Delaware corporation and the holding company for Berkshire Bank (“the Bank”). The Bank provides Commercial Banking, Retail Banking, Consumer Lending, Private Banking and Wealth Management services.
Added
(“Legacy Brookline”), pursuant to the Agreement and Plan of Merger, dated as of December 16, 2024, by and among the Company, Commerce Acquisition Sub, Inc. and Legacy Brookline (the “Merger Agreement”).
Removed
At year-end 2024, the Bank had $12.3 billion in assets and 83 full-service financial centers in its New England and New York footprint. On December 16, 2024, the Company entered into a definitive agreement (“the Agreement”) for a merger of equals with Brookline Bancorp, Inc. (“Brookline”) the parent company of Brookline Bank, Bank Rhode Island, and PCSB Bank.
Added
On September 1, 2025, Commerce Acquisition Sub, Inc. merged with and into Legacy Brookline (the “Merger”), immediately followed by the merger of Legacy Brookline with and 1 Table of Contents into the Company (the “Holdco Merger”), with the Company as the resulting corporation.
Removed
Pursuant to the Agreement, Brookline will merge with and into Berkshire in an all-stock transaction valued at approximately $1.1 billion, or $12.68 per share of Brookline common stock, based on the $30.20 closing price of Berkshire common stock on December 13, 2024.
Added
The Company also changed its name from Berkshire Hills Bancorp, Inc. to Beacon Financial Corporation and changed the New York Stock Exchange ticker symbol for its common stock from “BHLB” to “BBT.” Immediately following the Holdco Merger, Berkshire Bank, a wholly owned subsidiary of the Company, Bank Rhode Island, a wholly owned subsidiary of Legacy Brookline, and PCSB Bank, a wholly owned subsidiary of Legacy Brookline, each merged with and into Brookline Bank, a wholly owned subsidiary of Legacy Brookline, with Brookline Bank as the surviving bank (the “Bank Mergers” and, together with the Merger and the Holdco Merger, the “Transaction”).
Removed
Under the terms of the Agreement, each outstanding share of Brookline common stock will be exchanged for the right to receive 0.42 shares of Berkshire common stock.
Added
In connection with the Bank Mergers, Brookline Bank changed its name to Beacon Bank & Trust. The Transaction was treated as a business combination under ASC 805 and was accounted for as a reverse merger using the acquisition method of accounting. Therefore, Legacy Brookline was deemed the acquirer for financial reporting purposes even though Legacy Berkshire was the legal acquirer.
Removed
As a result of the transaction and a $100 million Berkshire common stock offering conducted to support the transaction, Berkshire shareholders will own approximately 55% (including the investors in the Berkshire common stock offering) and Brookline shareholders will own approximately 45% of the outstanding shares of the combined company.
Added
As such, the historical financial statements of Legacy Brookline became the historical financial statements of the combined company. Overview of Results The loan and lease portfolio increased $8.3 billion, or 84.4%, to $18.0 billion at December 31, 2025 from $9.8 billion at December 31, 2024.
Removed
The combined company will trade on the New York Stock Exchange and will announce a new name and ticker symbol prior to closing. The combined bank will also operate under a new name to be announced prior to closing.
Added
The Company's commercial loan portfolios, which totaled $14.0 billion, or 77.4% of total loans and leases, as of December 31, 2025, increased $5.7 billion, or 69.8%, from $8.2 billion, or 84.1% of total loans and leases, as of December 31, 2024.
Removed
The executive headquarters for the combined company will be located at 131 Clarendon Street in Boston, MA, with operations centers located throughout the Northeast.
Added
Total deposits increased $10.6 billion, or 119.2%, to $19.5 billion at December 31, 2025 from $8.9 billion as of December 31, 2024. Core deposits, which include demand checking, NOW, non-payroll money market and savings accounts, increased 112.6% to $13.1 billion as of December 31, 2025 from $6.1 billion at December 31, 2024.
Removed
The transaction is expected to close by the end of the second half of 2025, subject to satisfaction of customary closing conditions, including receipt of required regulatory approvals and approvals from Berkshire and Brookline shareholders. 4 Table of Contents FILINGS Information regarding the Company is available through the Investor Relations tab at berkshirebank.com.
Added
Payroll deposits, included in money market accounts in the accompanying consolidated balance sheets, totaled $1.9 billion as of December 31, 2025, all of which was assumed in the Transaction. The allowance for loan and lease losses increased $127.8 million, or 102.1%, to $252.8 million as of December 31, 2025 from $125.1 million as of December 31, 2024.
Removed
Non-bank competitors include credit unions, brokerage firms, insurance providers, financial planners, and the mutual fund industry. New technology is reshaping customer interaction with financial service providers and the increase of internet-accessible financial institutions increases competition for the Company’s customers. The Company generally competes on the basis of customer service, relationship management, and the fair pricing of its products.
Added
The ratio of the allowance for loan and lease losses to total loans and leases was 1.40% as of December 31, 2025 compared to 1.28% as of December 31, 2024. Nonperforming assets as of December 31, 2025 were $116.7 million, up from $70.5 million at the end of 2024.
Removed
The location and convenience of branch offices is also a significant competitive factor, particularly regarding new offices. The Company is pursuing a “banker heavy, branch light” model in newer markets, and uses its mobile MyBanker teams which provide personalized service to customers with committed relationships.
Added
Nonperforming assets were 0.50% and 0.59% of total assets as of December 31, 2025 and December 31, 2024, respectively. Net interest income increased $173.5 million, or 52.6%, to $503.1 million in 2025 compared to $329.6 million in 2024. Net interest margin increased 50 basis points to 3.56% in 2025 from 3.06% in 2024.
Removed
Due to recent mergers of in-market bank competitors, the Company is pursuing opportunities to expand its market share and talent recruitment. The Company seeks to differentiate itself with its Digitouch SM approach to personal service and user-friendly technology, as well as its commitment to corporate responsibility.
Added
Net income for 2025 increased $21.6 million, or 31.4%, to $90.3 million from $68.7 million for 2024. Basic and fully diluted earnings per common share ("EPS") increased to $1.03 for 2025 from $0.77 for 2024. See Item 7.
Removed
Adjustable-rate loan products generally reduce interest rate risk but may produce higher loan losses in the event of sustained rate increases. The Bank generally originates loans for investment except for residential mortgages, which are sometimes originated for sale on a servicing released basis. Additionally, the Bank also originates Small Business Administration ("SBA") 7A loans for sale to investors.
Added
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.
Removed
The Bank also conducts loan participations generally with other banks doing business in its markets, including selected national banks. 5 Table of Contents Loan Portfolio Analysis. The following table sets forth the year-end composition of the Bank’s loan portfolio in dollar amounts and as a percentage of the portfolio at the dates indicated.
Added
Additionally, the Bank also originates Small Business Administration ("SBA") 7A loans for sale to investors. 2 Table of Contents The Bank also conducts loan participations generally with other banks doing business in its markets, including selected national banks. Commercial real estate loans. Multi-family and commercial real estate mortgage loans typically generate higher yields, but also involve greater credit risk.
Removed
Further information about the composition of the loan portfolio is contained in Note 5 – Loans and Related Allowances for Credit Losses.
Added
In addition, many of the Bank's borrowers have more than one multi-family or commercial real estate loan outstanding.
Removed
Item 1 – Table 1 – – Loan Portfolio Analysis 2024 2023 2022 (In millions) Amount Percent of Total Amount Percent of Total Amount Percent of Total Loans: Construction $ 726 7.8 % $ 640 7.1 % $ 320 3.9 % Commercial multifamily 637 6.8 599 6.6 620 7.5 Commercial real estate owner occupied 695 7.4 629 7.0 641 7.7 Commercial real estate non-owner occupied 2,770 29.5 2,607 28.8 2,496 29.9 Commercial and industrial 1,439 15.3 1,359 15.1 1,445 17.3 Residential real estate 2,772 29.5 2,760 30.5 2,312 27.7 Home equity 230 2.5 224 2.5 227 2.7 Consumer other 116 1.2 221 2.4 274 3.3 Total $ 9,385 100.0 % $ 9,039 100.0 % $ 8,335 100.0 % Allowance for credit losses (115) (105) (96) Net loans $ 9,270 $ 8,934 $ 8,239 There is further information about the above components of the loan portfolio, and the risk characteristics relevant to each portfolio segment, in the “Loans and Related Allowance for Credit Losses” footnote to the financial statements referenced in Item 8 of this report.
Added
The Bank manages 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. Commercial loans and equipment leasing.
Removed
There is also information about the loan portfolio and changes in the portfolio during 2024 in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of this report. There is reference made to Commercial and Retail Loans, as well as to Commercial Real Estate loans.
Added
The Bank originates commercial loans, leases and lines of credit for working capital and other business related purposes.
Removed
Commercial Real Estate loans include Construction, Commercial Multi-Family, Commercial Real Estate Owner Occupied, and Commercial Real Estate Non-Owner Occupied. Commercial loans include Commercial Real Estate loans and Commercial and Industrial Loans. Retail loans include Residential Real Estate loans and Consumer loans, which are comprised of Home Equity loans and Consumer other loans. 6 Table of Contents Commercial Real Estate.
Added
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.
Removed
The Bank originates commercial real estate loans on properties used for business purposes such as retail, multifamily, office, healthcare, hospitality, industrial, and manufacturing facilities. Commercial real estate loans are provided on owner-occupied properties and on investor-owned properties and also include construction loans.
Added
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.
Removed
Loans may generally be made with amortizations of up to 30 years and with final maturities of 10 years or less. As part of its business activities, the Bank also enters into commercial loan participations and interest rate swaps. The Bank originates construction loans to developers and commercial borrowers in its footprint.
Added
The Bank manages 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. Consumer loans. Our consumers value personalized service, local community knowledge and engagement and the choice between branch access and technology solutions.
Removed
The maximum loan to value limits for construction loans follow Federal Deposit Insurance Corporation ("FDIC") supervisory limits, up to a maximum of 85 percent. The Bank commits to provide the permanent mortgage financing on many of its construction loans on income-producing property. Advances on construction loans are made in accordance with a schedule reflecting the cost of the improvements.
Added
The Bank's 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.
Removed
Construction loans include land acquisition loans up to a maximum 50 percent loan to value on raw land. Construction loans may have greater credit risk due to the dependence on completion of construction and other real estate improvements, as well as the sale or rental of the improved property.
Added
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.
Removed
The Bank generally mitigates these risks with presale or preleasing requirements and phasing of construction. Commercial and Industrial Loans ("C&I"). C&I loans are mostly managed through the Bank’s commercial middle market banking organization, as well as its Asset Based Lending Group, its Small Business Banking Group, and 44 Business Capital.
Added
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.
Removed
The Bank offers secured commercial term loans with repayment terms which are normally limited to the expected useful life of the asset being financed, and generally not exceeding ten years. The Bank also offers revolving loans, lines of credit, letters of credit, time notes and SBA guaranteed loans.
Added
Should there be any setback in the economy or increase in the unemployment rates in the areas in which the Company operates, 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.
Removed
Business lines of credit have interest rates that adjust, and are generally subject to annual review and renewal. Commercial and industrial loans are generally secured by a variety of collateral such as accounts receivable, inventory and equipment, and are generally supported by personal guarantees.
Added
Personnel and Human Capital Resources As of December 31, 2025, the Company had 1,972 full-time employees and 78 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.
Removed
Loan-to-value ratios depend on the collateral type and generally do not exceed 80 percent of orderly liquidation value or net book value as reported on the borrower’s financial statements. Some commercial loans may also be secured by liens on real estate. The Bank generally does not make unsecured commercial loans.
Added
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.
Removed
The Bank gives additional consideration to the borrower’s credit history and the guarantor’s capacity to help mitigate these risks. Additionally, the Bank uses loan structures including shorter terms, amortizations, and advance rate limitations to additionally mitigate credit risk. Credit enhancements in the form of additional collateral or guarantees are normally considered for start-up businesses without a qualifying cash flow history.
Added
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.
Removed
The Company considers commercial and industrial loans, together with its owner-occupied commercial real estate loans, as constituting the primary relationship based component of its commercial lending activities. Commercial and industrial loans are commonly structured as variable rate loans, and are accordingly impacted by the recent environment of rising interest rates.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

37 edited+167 added−163 removed3 unchanged
Biggest changeThe combined company may also face increased scrutiny from governmental authorities as a result of the increased size of its business. There can be no assurances that the combined company will be successful or that it will realize the expected operating efficiencies, revenue enhancement or other benefits currently anticipated from the Mergers.
Biggest changeThere can be no assurances that we will be successful or that we will realize the expected operating efficiencies, revenue enhancement or other benefits currently anticipated from the Transaction. RISKS RELATED TO OWNING OUR COMMON STOCK The market price and trading volume of our common stock may be volatile. The market price of our common stock may be volatile.
These provisions include: limitations on voting rights of beneficial owners of more than 10 percent of common stock; supermajority voting requirements for certain business combinations; the election of directors to terms of one year; and advance notice requirements for nominations for election to the Company's Board of Directors and for proposing matters that stockholders may act on at stockholder meetings.
These provisions include: limitations on voting rights of beneficial owners of more than 10 percent of common stock; supermajority voting requirements for certain business combinations; the election of directors to terms of one year; and advance notice requirements for nominations for election to the Board of Directors and for proposing matters that stockholders may act on at stockholder meetings.
Substantial risks and uncertainties are associated with the introduction of new products and services, including technical and control requirements that may need to be developed and implemented, rapid technological change in the industry, the Company’s ability to access technical and other information from its clients, the significant and ongoing investments required to bring new products and services to market in a timely manner at competitive prices and the preparation of marketing, sales and other materials that fully and accurately describe the product or service and its underlying risks.
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.
If any of these representations and warranties are invalid, the Company may be required to refund premiums, indemnify the purchaser for any related costs or losses, or it may be required to repurchase part or all of the affected loans.
If any of these representations and warranties are invalid, we may be required to refund premiums, indemnify the purchaser for any related costs or losses, or it may be required to repurchase part or all of the affected loans.
Provisions in the Company's certificate of incorporation and bylaws, the corporate law of the State of Delaware, and state and federal regulations could delay, defer or prevent a third party from acquiring us, despite the possible 38 Table of Contents benefit stockholders, or otherwise adversely affect the price of its common stock.
Provisions in the Company's certificate of incorporation and bylaws, the corporate law of the State of Delaware, and state and federal regulations could delay, defer, or prevent a third party from acquiring us, despite the possible benefit stockholders, or otherwise adversely affect the price of its common stock.
The Company’s failure to manage these risks and uncertainties also exposes it to enhanced risk of operational lapses which may result in the recognition of financial statement liabilities.
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.
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.
Implementation of certain new technologies, such as those related to artificial intelligence, automation and algorithms, may have unintended consequences, including fraud or cybersecurity risk, due to their limitations, potential manipulation, or our failure to use them effectively.
Financial services institutions and companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to sensitive information, destroy data, steal financial assets, disable or degrade service, or sabotage systems, 33 Table of Contents often through the introduction of computer viruses or malware, cyber-attacks and other means.
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.
The Company may also be required to repurchase loans as a result of borrower fraud or in the event of early payment default by the borrower on a loan it has sold.
We may also be required to repurchase loans as a result of borrower fraud or in the event of early payment default by the borrower on a loan we have sold.
Failure to successfully manage these risks in the development and implementation of new products or services could have a material adverse effect on the Company’s business and reputation, as well as on its consolidated results of operations and financial condition. The Soundness of Other Financial Institutions Could Adversely Affect Us.
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 our consolidated results of operations and financial condition.
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.
Our future success will depend, in part, upon our 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. We may also face increased scrutiny from governmental authorities as a result of the increased size of our business.
Regulatory and internal control requirements, capital requirements, competitive alternatives, vendor relationships and shifting market preferences may also determine if such initiatives can be brought to market in a manner that is timely and attractive to the Company’s clients. Products and services relying on internet and mobile technologies may expose the Company to fraud and cybersecurity risks.
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.
Denial of service attacks have been launched against a number of large financial services institutions. As a growing regional bank, the Company may be subject to similar attacks in the future. Hacking and identity theft risks could cause serious reputational harm and possible financial loss to the Company.
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.
It is possible, depending upon the financial condition of the Bank and other factors, that the applicable regulatory authorities could assert that payment of dividends from the Bank to the Company or other types of payments are considered an unsafe or unsound practice.
It is possible, depending upon the financial condition of the Bank and other factors, that applicable regulatory authorities could assert that payment of dividends or other payments is an unsafe or unsound practice. If the Bank is unable to pay dividends to us, we may not be able to service our debt or pay dividends on our common stock.
The Company's Wholesale Funding Sources May Prove Insufficient to Replace Deposits at Maturity and Support Operations and Future Growth. The Company must maintain sufficient funds to respond to the needs of depositors and borrowers.
Wholesale funding sources may prove insufficient to replace deposits at maturity and support our operations and future growth. We and the Bank 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.
Provisions of the Company's Certificate of Incorporation, Bylaws, and Delaware Law, as Well as State and Federal Banking Regulations, Could Delay or Prevent a Takeover of Us by a Third Party.
Our inability to raise sufficient additional capital on acceptable terms when needed could adversely affect our businesses, financial condition, and results of operations. Provisions of the Company's Certificate of Incorporation, Bylaws, and Delaware Law, as Well as State and Federal Banking Regulations, Could Delay or Prevent a Takeover of Us by a Third Party.
Financial services institutions are interrelated as a result of clearing, trading, counterparty, or other relationships. We have exposure to many different counterparties and industries, and we routinely execute transactions with counterparties in the financial services industry, including brokers and dealers, commercial banks, investment banks, and other institutional clients.
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.
The Company’s ability to maintain seller/servicer relationships with government agencies and government backed entities may be jeopardized in the event of the emergence of one or more of the above risks. Demand for the Company’s loans in the secondary markets could also be affected by these risks, which could lead to a reduction in related business activities.
Our ability to maintain seller/servicer relationships with government agencies and government backed entities may be jeopardized in the event of the emergence of one or more of the above risks.
The determination of the appropriate level of the allowance inherently involves a degree of subjectivity and requires that we make significant estimates of current credit risks and current trends and reasonable and supportable forecasts of future economic conditions, all of which may undergo frequent and material changes.
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.
The Company routinely sells newly originated residential mortgage loans and SBA guaranteed business loans, and may also sell other loans or loans portfolios. It may make certain representations and warranties to the purchaser concerning the loans sold and the procedures under which those loans have been originated and serviced.
We may make certain representations and warranties to the purchaser concerning the loans sold and the procedures under which those loans have been originated and serviced.
Turbulence in the capital and credit markets may adversely affect liquidity and financial condition and the willingness of certain counterparties and customers to do business with the Company.
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. 14 Table of Contents Potential deterioration in the performance or financial position of the FHLB might restrict our funding needs and may adversely impact our financial condition and results of operations.
Many of these transactions expose us to credit risk in the event of a default by our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be realized or is liquidated at prices not sufficient to recover the full amount of the credit or derivative exposure due us.
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.
These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors other than the candidates nominated by the Board. Changes in Tax Laws and Accounting Policies and Practices. We are subject to income taxes and complex tax regimes in the United States.
These provisions could also discourage proxy contests and make it more difficult for stockholders to elect directors other than the candidates nominated by the Board of Directors. Item 1B. Unresolved Staff Comments None.
The Company’s financial flexibility will be severely constrained if the Company is unable to maintain access to wholesale funding or if adequate financing is not available to accommodate future growth at acceptable costs.
These sources include FHLB 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.
The Company's Ability to Service Our Debt, Pay Dividends, and Otherwise Pay Obligations as They Come Due Is Substantially Dependent on Capital Distributions from the Bank, and These Distributions Are Subject to Regulatory Limits and Other Restrictions.
Our ability to service our debt and pay dividends is dependent on capital distributions from the Bank, and these distributions are subject to regulatory limits and other restrictions. We are a legal entity that is separate and distinct from the Bank. Our revenue (on a parent company only basis) is derived primarily from dividends paid to us by the Bank.
There can be no assurance that other proceedings, which may have a material adverse effect on our business, results of operations or financial condition will not arise in the near or long-term future. 35 Table of Contents Loss of Key Employees Could Disrupt Relationships With Certain Customers.
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.
The Company’s computer systems and network infrastructure are subject to security risks and could be susceptible to cyber-attacks, such as denial of service attacks, hacking, terrorist activities or identity theft.
Our electronic communications and information systems infrastructure, as well as the systems infrastructures of the third-party vendors we use to meet our data processing and communication needs, could be susceptible to cyberattacks, such as denial of service attacks, hacking, terrorist activities or identity theft.
Commercial real estate mortgage loans generally involve a greater degree of credit risk than residential real estate mortgage loans because they typically have larger balances and are more affected by adverse conditions in the economy.
Accordingly, repayment of these loans is subject to conditions in the real estate market and the local economy. Commercial loans and leases generally carry larger balances and involve a higher risk of nonpayment or late payment than residential mortgage loans.
Additionally, from time to time, the regulatory agencies and other authoritative bodies, such as the Financial Accounting Standards Board ("FASB"), change the financial accounting and reporting standards that govern the preparation of the Company's financial statements. These changes can be hard to predict and can materially impact how management records and reports the Company's financial condition and results of operations.
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.
In addition to the risks set forth below and the other risks described in this annual report, there may be additional risks and uncertainties that are not currently known to the Company or that the Company currently deems to be immaterial that could materially and adversely affect the Company's business, financial condition, strategic objectives, or operating results.
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.
Interest Rate Risks Market Interest Rate Conditions Could Adversely Affect Results of Operations and Financial Condition Net interest income is the Company's largest source of income.
RISKS RELATED TO OUR BUSINESS AND INDUSTRY Changes to interest rates could adversely affect our results of operations and financial condition.
The Future Results of the Combined Company Following the Mergers May Suffer if the Combined Company Does Not Effectively Manage Its Expanded Operations. Following the Mergers, the size of the business of the combined company will increase beyond the current size of either Berkshire’s or Brookline’s business.
In addition, we may not be able to locate or retain suitable replacements for any key employees who leave. Our future results following our recently completed Transaction may suffer if the combined company does not effectively manage its expanded operations. The size of our business increased significantly as a result of the Transaction.
Changes in interest rates also affect the fair value of the securities portfolio. Generally, the value of securities moves inversely with changes in interest rates. Any substantial, unexpected or prolonged change in market interest rates could have a material adverse effect on our financial condition and results of operations.
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. Changes in tax laws and regulations and differences in interpretation of tax laws and regulations may adversely impact our financial statements.
The benefits of this strategy will depend on our ability to realize expected benefits without experiencing significant customer attrition, unexpected costs, or unanticipated disruptions to operations. Development of New Products and Services May Impose Additional Costs on the Company and May Expose It to Increased Operational Risk.
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.
Changes in economic and other conditions affecting borrowers, including inflation and interest rates, along with new information regarding existing loans other factors, may indicate the need for a future increase in the allowance.
Changes in economic conditions or 12 Table of Contents 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.
For more information, see “Regulation and Supervision” in Item 1 of this report. With total assets over $10 billion, the Company and the Bank are subject to closer supervision by their primary regulators and, as to compliance with consumer protection laws and regulations, the Consumer Financial Protection Bureau.
In addition, banks with total assets of at least $10 billion are primarily examined by the CFPB with respect to federal consumer protection laws and regulations. As of December 31, 2025, the Company and the Bank had total assets of $23.2 billion and $23.1 billion, respectively.
Any decline in available funding could adversely impact the Company’s ability to originate loans, invest in securities, meet expenses, or to fulfill obligations such as meeting deposit withdrawal demands, any of which could have a material adverse impact on its liquidity, business, financial condition and results of operations.
In addition, any default by the U.S. government on its obligations or any prolonged government shutdown could, among other things, impede our ability to originate SBA loans or sell such loans in the secondary market, which could materially and adversely affect our business, financial condition, and results of operations.
Removed
ITEM 1A. RISK FACTORS The risks set forth below, in addition to the other risks described in this Annual Report on Form 10-K, may adversely affect the Company's business, financial condition, strategic objectives, and operating results.
Added
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.
Removed
As a result, past financial performance may not be a reliable indicator of future performance, and historical trends should not be used to anticipate results or trends in future periods.
Added
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.
Removed
Further, to the extent that any of the information contained in this Annual Report on Form 10-K constitutes forward-looking statements, the risk factors set forth below also are cautionary statements identifying important factors that could cause actual results to differ materially from those expressed in any forward-looking statements made by or on behalf of the Company. 25 Table of Contents Risk Factors Summary Merger-Related Risks • Berkshire Will Be Subject to Business Uncertainties and Contractual Restrictions While the Mergers Are Pending. • The Announcement of the Proposed Mergers Could Disrupt Berkshire’s Relationships with its Customers, Suppliers, Business Partners and Others, As Well As Its Operating Results and Business Generally. • The Merger Agreement Limits Berkshire’s Ability to Pursue Alternatives to the Mergers and May Discourage Other Companies from Trying to Acquire Berkshire. • In Connection with the Mergers, Berkshire Will Assume Brookline’s Outstanding Debt Obligations, and the Combined Company’s Level Of Indebtedness Following the Completion of the Mergers Could Adversely Affect the Combined Company’s Ability to Raise Additional Capital and Meet Its Obligations Under Existing Indebtedness. • The Combined Company Will Incur Significant Transaction and Merger-Related Costs In Connection with the Mergers. • If the Mergers Are Not Completed, Berkshire Will Have Incurred Substantial Expenses Without Its Stockholders Realizing The Expected Benefits of the Mergers. • Berkshire and Brookline May Not Be Able to Successfully Integrate the Two Companies or to Realize the Anticipated Benefits of the Mergers. • The Merger Agreement May Be Terminated In Accordance With Its Terms, and the Mergers May Not Be Completed. • The Need for Regulatory Approvals May Delay the Date of Completion of the Mergers or May Diminish the Benefits of the Mergers. • Litigation Against Berkshire or Brookline, or the Members of Berkshire’s or Brookline’s Board of Directors, Could Prevent or Delay the Completion of the Mergers. • The Future Results of the Combined Company Following the Mergers May Suffer if the Combined Company Does Not Effectively Manage Its Expanded Operations. • The Market Price of Berkshire’s Common Stock After the Mergers May Be Affected By Factors Different from Those Currently Affecting Berkshire’s Common Stock. • Current Holders of Berkshire’s Common Stock Will Have a Significantly Reduced Ownership and Voting Interest in the Combined Company After the Mergers and Will Therefore Have Less Voting Influence Over the Combined Company. • The Market Price of Berkshire Common Stock May Decline in the Future as a Result of the Mergers.
Added
Our consolidated results of operations depend in 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.
Removed
Lending Risks • Deterioration in the Housing Sector, Commercial Real Estate, and Related Markets May Adversely Affect Business and Financial Results. • The Company’s Emphasis on Commercial Lending May Expose the Company to Increased Lending Risks, Which Could Hurt Profits. • The Company is Subject to a Variety of Risks in Connection With Any Sale of Loans it May Conduct. • The Company is Exposed to Risk of Environmental Liability When It Takes Title to Property.
Added
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 U.S. and the FRB.
Removed
Operating Risks • General Economic Conditions, Either Nationally or in Our Market Areas, Which May Be Affected by Macroeconomic Factors, Including Inflation, Unemployment, Government Policies, Supply Chain Issues, and Geopolitical Risks Associated with International Conflict, May Be Worse Than Expected. • The Effects of any Public Health Emergencies and Pandemic Disease, Natural Disaster, War, Acts of Terrorism, Accident, or Similar Action or Event (collectively, "an Event") May Adversely Affect, the Company’s Business, Financial Condition, Liquidity, and Results of Operations. • The Company is Subject to Security and Operational Risks Relating to the Use of Technology that Could Damage the Company's Reputation and Business. • The Company Faces Cybersecurity Risks, Including Denial of Service Attacks, Ransomware, Hacking and Identity Theft that Could Result in the Disclosure of Sensitive Information or the Creation of Unauthorized Transactions, Which Could Adversely Affect the Company’s Business or Reputation and Create Significant Legal and Financial Exposure. • Counterparties and Correspondents Expose the Company to Risks. • The Company’s Business is Reliant on Outside Vendors. 26 Table of Contents • Tailoring The Bank's Delivery Model to Respond to Customer Preferences in Banking May Negatively Affect Earnings • Development of New Products and Services May Impose Additional Costs on the Company and May Expose It to Increased Operational Risk. • The Soundness of Other Financial Institutions Could Adversely Affect Us. • Legal and Regulatory Proceedings and Related Matters Could Adversely Affect Us and the Banking Industry in General. • Loss of Key Employees Could Disrupt Relationships With Certain Customers. • Mergers, Acquisitions and Dispositions Involve Numerous Risks and Uncertainties.
Added
The nature and timing of any changes in such policies and their effect on us cannot be controlled and are extremely difficult to predict.
Removed
Interest Rate Risks • Market Interest Rate Conditions Could Adversely Affect Results of Operations and Financial Condition. Liquidity Risks • Liquidity is Essential to the Company’s Business and a Lack of Liquidity Could Adversely Affect the Company’s Financial Condition and Results of Operations. • Bank Failures and Stresses May Lead to Negative Depositor Confidence in Depository Institutions.
Added
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.
Removed
Systemic Impacts May Have a Material Adverse Effect on our Financial Condition and Results of Operations and Stock Price. • The Company's Wholesale Funding Sources May Prove Insufficient to Support Operations and Future Growth. • The Company's Ability to Service Its Debt, Pay Dividends, and Otherwise Pay Obligations as They Come Due Is Substantially Dependent on Capital Distributions from the Bank, and These Distributions Are Subject to Regulatory Limits and Other Restrictions.
Added
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.
Removed
The Company’s Stock Repurchase Program is also Dependent on These Distributions. • Secondary Mortgage Market Conditions Could Have a Material Impact on the Company’s Financial Condition and Results of Operations. Securities Market Value Risks • Declines in the Value of Certain Investment Securities Could Require Write-Downs, Which Would Reduce Earnings.
Added
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.
Removed
Regulatory Matters Risks • Legislative and Regulatory Initiatives May Affect Business Activities and Increase Operating Costs. • Provisions of the Company's Certificate of Incorporation, Bylaws, and Delaware Law, as Well as State and Federal Banking Regulations, Could Delay or Prevent a Takeover of Us by a Third Party. • Changes in Tax Laws and Accounting Policies and Practices.
Added
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; fluctuations 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; supply chain disruptions; consumer spending; employment levels; labor shortages; challenging labor market conditions; wage stagnation; U.S. 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.
Removed
Significant Accounting Estimates Risks • Various Factors May Cause Our Allowance for Credit Losses on Loans to Increase. • Fair Value Measurements May Be Affected by Inherent Uncertainties. Trading of the Company's Common Stock • The Trading History of the Company’s Common Stock is Characterized By Low Trading Volume.
Added
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; 10 Table of Contents • 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.
Removed
The Value of Shareholder Investments May be Subject to Sudden Decreases Due to the Volatility of the Price of the Common Stock .
Added
Inflation can have an adverse impact on our business and on our customers. The future rate of inflation and other economic factors remain uncertain, and the FRB may decrease or increase interest rates slower or faster than anticipated.
Removed
Other Risks • Negative Public Opinion Could Damage the Company’s Reputation and Impact Business Operations and Revenues. 27 Table of Contents Merger-Related Risks Berkshire Will Be Subject to Business Uncertainties and Contractual Restrictions While the Mergers Are Pending.
Added
If inflation increases and interest rates rise, the value of our investment securities, particularly those with longer maturities, will decrease, although this effect is less pronounced for floating rate instruments.
Removed
On December 16, 2024, Berkshire, Commerce Acquisition Sub, Inc., a direct, wholly-owned subsidiary of Berkshire (“Merger Sub”) and Brookline entered into a merger agreement (the “Merger Agreement”) pursuant to which Berkshire and Brookline have agreed to combine their respective businesses in a merger of equals.
Added
Prolonged periods of elevated inflation also may impact our profitability by negatively impacting our costs and expenses, including increasing funding costs and expenses related to talent acquisition and retention, and negatively impacting the demand for our products and services.
Removed
Under the Merger Agreement, Merger Sub will merge with and into Brookline, with Brookline as the surviving corporation (the “Merger”), immediately followed by the merger of Brookline with and into Berkshire, with Berkshire as the surviving corporation (the “Holdco Merger”).
Added
Moreover, our customers are affected by inflation and the rising costs of goods and services used in their households and businesses, which could have a negative impact on their ability to repay their loans. Our business may be adversely affected by changes in economic conditions in our market area.
Removed
Immediately following the Merger and the Holdco Merger (collectively, the “Mergers”), Berkshire Bank, the wholly-owned subsidiary of Berkshire, as well as Brookline’s two other banking subsidiaries, PCSB Bank and Bank Rhode Island, will merge with and into Brookline Bank, the wholly-owned subsidiary of Brookline, with Brookline Bank as the surviving corporation (collectively, the “Bank Merger”).
Added
An economic downturn could 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.
Removed
Uncertainty about the effect of the Mergers on employees and customers may have an adverse effect on Berkshire. These uncertainties may impair Berkshire’s ability to attract, retain and motivate key personnel until the Mergers are completed, and could cause customers and others who deal with Berkshire to seek to change existing business relationships with Berkshire.
Added
In addition, deterioration, or defaults by issuers of the underlying collateral of our investment securities may cause additional credit-related charges to our income statement.
Removed
In addition, the Merger Agreement requires that Berkshire conduct its business in the ordinary course of business consistent with past practice and restricts Berkshire from taking certain actions prior to the effective time or termination of the Merger Agreement without Brookline’s consent in writing.
Added
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.
Removed
These restrictions may prevent Berkshire from pursuing attractive business opportunities that may arise prior to the completion of the Mergers. The Announcement of the Proposed Mergers Could Disrupt Berkshire’s Relationships with its Customers, Suppliers, Business Partners and Others, As Well As its Operating Results and Business Generally.
Added
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.
Removed
Whether or not the Mergers are ultimately consummated, as a result of uncertainty related to the Mergers, risks relating to the impact of the announcement of the Mergers on Berkshire’s business include the following: • employees may experience uncertainty about their future roles, which might adversely affect Berkshire’s ability to retain and hire key personnel and other employees; • customers, suppliers, business partners and other parties with which Berkshire maintains business relationships may experience uncertainty about their respective futures and seek alternative relationships with third parties, seek to alter their business relationships with Berkshire or fail to extend an existing relationship with Berkshire; and • Berkshire has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the proposed Mergers.
Added
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.
Removed
If any of the aforementioned risks were to materialize, they could lead to significant costs which may impact Berkshire’s results of operations and financial condition. The Merger Agreement Limits Berkshire’s Ability to Pursue Alternatives to the Mergers and May Discourage Other Companies from Trying to Acquire Berkshire.
Added
Any inability to access the capital markets, illiquidity or volatility in the capital markets, a decrease in value of eligible collateral or an increase in 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.
Removed
The Merger Agreement contains “no shop” covenants that restrict Berkshire’s ability to, directly or indirectly, among other things initiate, solicit, knowingly encourage or knowingly facilitate, inquiries or proposals with respect to, or, subject to certain exceptions generally related to the exercise of fiduciary duties by Berkshire’s board of directors, engage in any negotiations concerning, or provide any confidential or non-public information or data relating to, any alternative acquisition proposals.
Added
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.
Removed
These provisions, which include a $45.0 million termination fee payable under certain circumstances, may discourage a potential third-party acquirer that might have an interest in acquiring all or a significant part of Berkshire from considering or making that acquisition proposal. 28 Table of Contents In Connection with the Mergers, Berkshire Will Assume Brookline’s Outstanding Debt Obligations, and the Combined Company’s Level Of Indebtedness Following the Completion of the Mergers Could Adversely Affect the Combined Company’s Ability to Raise Additional Capital and Meet its Obligations Under Existing Indebtedness.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

9 edited+17 added−8 removed1 unchanged
Biggest changeThe Company maintains a robust Third-Party Risk Management program to manage risks related to third-party relationships in a manner that is consistent with the Company’s strategic goals, organizational objectives, and risk appetite. This includes comprehensive risk and control assessments to ensure sensitive information is safeguarded appropriately.
Biggest changeThe Program is evaluated on a regular basis, at least annually, and adjustments to the Program are made based on the results of these evaluations and changes to industry standards. The Company maintains a Third-Party Risk Management program to manage risks related to third-party relationships in a manner that is consistent with the Company’s risk appetite.
This includes providing the Company with a detailed outline of how to respond to a security incident, team responsibilities, contact information for key resources, definitions for determining the severity and escalation of security incidents, and pre-built playbooks to respond to the most common types of security incidents including ransomware.
This includes providing the Company with a detailed outline of how 22 Table of Contents to respond to a security incident, team responsibilities, contact information for key resources, definitions for determining the severity and escalation of security incidents, and pre-built playbooks to respond to the most common types of security incidents including ransomware.
The Company uses or adheres to relevant standards and frameworks from the Federal Financial Institutions Examination Council (FFIEC) and National Institute of Standards and Technology (NIST), among others, to assess information security risks and controls, as well as to assess the maturity and effectiveness of the Information Security Program.
The Company uses or adheres to relevant standards and frameworks from the FFFIEC and NIST, among others, to assess information security risks and controls, as well as to assess the maturity and effectiveness of the Program.
All employees are required to complete privacy and information security awareness training upon joining the Company and on an annual basis.
All employees are required to complete privacy and information security awareness training upon joining the Company and on an annual basis. This includes incident response training on how to communicate potential or actual incidents.
Although such risks have not materially affected us, we have experienced threats to and breaches of our data, including breaches caused by human error or breaches affecting third parties of the Company. For more information about the cybersecurity risks we face, see Item 1A-Risk Factors.
Although, to date, such risks have not materially affected us, we have, from time to time, experienced threats to and breaches of our data, including breaches caused by human error or breaches affecting third parties of the Company.
Threat intelligence is used with contextual risk approaches to identify threats and prioritize response. Threat hunts operate both proactively and reactively to look for relevant behaviors and indicators of compromise from cybersecurity events or zero-day vulnerabilities. An Incident Response Plan is in place to ensure the timely and effective handing of security incidents.
Log sources are mapped to the MITRE ATT&CK framework to ensure appropriate security monitoring and gap analysis to detect and respond to attacks. Threat intelligence is used with contextual risk approaches to identify threats and prioritize response. Threat hunts operate both proactively and reactively to look for relevant behaviors and indicators of compromise from cybersecurity events or zero-day vulnerabilities.
The Company has a dedicated internal Security Operations Center ("SOC") and a Managed Detection and Response ("MDR") third party service that provides 24/7/365 monitoring of its environment to investigate and respond to security alerts. Log sources are mapped to the MITRE ATT&CK framework to ensure appropriate security monitoring and gap analysis to detect and respond to attacks.
This includes risk and control assessments to provide for the appropriate safeguarding of sensitive information. The Company has a dedicated internal Security Operations Center ("SOC") and a Managed Detection and Response ("MDR") third party service that provides 24/7/365 monitoring of its environment to investigate and respond to security alerts.
ITEM 1C. CYBERSECURITY The Company maintains a robust Information Security Program that sets forth the Company’s commitment to the continual review and improvement of policies, processes, procedures, and standards for evaluating electronic and physical methods of accessing, collecting, storing, using, transmitting, disposing, and protecting sensitive information including customer information under guidelines established as part of the Gramm Leach-Bliley Act (GLBA).
The Program establishes a regular cadence for review and update to the then current standards for evaluating electronic and physical methods of accessing, collecting, storing, using, 21 Table of Contents transmitting, disposing, and protecting sensitive information including customer information under guidelines established as part of GLBA.
This includes incident response training on how to communicate potential or actual incidents. 41 Table of Contents 42 Table of Contents The Company continues to face risks from cybersecurity threats that could have a material adverse effect on its business, financial condition, results of operations, or reputation.
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.
Removed
The Board of Directors and Executive Management are responsible for ensuring that the Information Security Program within Enterprise Risk Management identifies, measures, monitors, controls, and reports risk according to significance.
Added
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.
Removed
If risks are determined to be undesired and beyond stated and aggregated Risk Appetites, the Board of Directors and Executive Management take appropriate action to ensure that excessive risk is mitigated or eliminated, which may include reducing risk exposure.
Added
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 and MDOB.
Removed
The Board of Directors has final responsibility, after consultation with management, for ensuring the Information Security Program aligns with the overall business strategy and provides oversight to protect the Company from ongoing and emerging threats, including those related to cybersecurity.
Added
The Company maintains a robust Information Security Program (the “Program”) that is designed to identify, assess and mitigate risks from cybersecurity threats to the data and our systems.
Removed
The Information Security Program is overseen by the Company’s Information Security Officer ("ISO"), who reports directly to the Chief Risk Officer. The ISO has held this position with the Company since May, 2024, and has worked at the Company in cybersecurity for almost 12 years and in the information technology industry for more than 16 years.
Added
Risk Management Oversight and Governance The Company’s Chief Security Officer ("CSO") has primary responsibility for assessing and managing the Program and reporting on cybersecurity matters to the Board of Directors. The CSO reports directly to the Chief Information Officer. The CSO is responsible for the implementation, maintenance, and enforcement of the Program.
Removed
The Chief Risk Officer has held the position at the Company since October 2016, when he joined the Company from the FDIC where he was employed for 24 years and held multiple positions including Senior Risk Examiner for the Division of Risk Management Supervision and Acting Regional Manager for the Division of Insurance and Research.
Added
The CSO has extensive experience managing information security systems and holds the Certification Information Systems Manager (CISM) designation. Our CSO regularly updates members of executive management on developments surrounding cybersecurity. The CSO reports to the Risk Committee of the Board of Directors and provides regular reports to the Risk Committee on emerging cybersecurity issues and the Company’s cybersecurity infrastructure.
Removed
During his tenure with the FDIC, the CRO served from time to time as the Examiner-in-Charge for Berkshire Bank and numerous other banks throughout New England. The ISO is responsible for the implementation, maintenance, and enforcement of the Information Security Program and related policies and standards.
Added
The Program is overseen by the Board of Directors which has delegated certain responsibilities to the Risk Committee. The Board of Directors oversees management’s processes for identifying and mitigating risks, including cyber risks, to assist in the alignment of the Company’s risk exposure with the Company’s overall risk tolerances.
Removed
The program is evaluated and adjusted at least annually based on the results of testing, monitoring, and the adoption of best practices. Reporting occurs annually on the status of the Information Security Program to the Board’s Risk Management, Capital & Compliance Committee.
Added
The Board of Directors has also engaged an experienced information security advisor to assist 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.
Removed
Reporting includes the overall status of the program, material matters related to the program, Key Risk Indicators ("KRIs"), cyber risk assessments results, emerging risks, risk management and control decisions, control testing results, third party security assessments, penetration test results, security breaches or violations, and recommendations for changes to the program.
Added
The Risk Committee, the Audit Committee, and the Board of Directors are active in understanding and evaluating cybersecurity risks.
Added
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.
Added
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 Risk Committee receives a report from the CSO covering the Company’s Program.
Added
This report includes a review of the overall status of the Program, any material matters related to the Program, enhancements made or recommended to be made to the Program, a discussion of management’s actions to identify and detect threats, Key Risk Indicators and planned action steps in the event of an incident, an overview of the results of testing, any security breaches or violations, and an overview of employee training and engagement efforts.
Added
The Chair of the Risk Committee reports to the Board of Directors on this presentation.
Added
In addition, separately, on at least an annual basis, the Risk Committee receives updates from the CSO 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.
Added
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.
Added
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.
Added
The Company maintains an Incident Response Plan that is designed to timely and effectively address the handing of security incidents.
Added
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

Properties — owned and leased real estate

3 edited+4 added−2 removed0 unchanged
Biggest changeAs of December 31, 2024 the Company had 83 full-service financial centers in Massachusetts, New York, Connecticut, Rhode Island, and Vermont. The Company also has regional locations which are full-service commercial offices located in Boston, MA.; Pittsfield, MA.; Springfield, MA.; Albany, N.Y.; Glastonbury, CT.; Willimantic, CT. Worcester, MA.; Burlington, MA, and Providence RI.
Biggest changeThe Company also has regional locations which are full-service commercial offices located in Boston, MA; Pittsfield, MA; Springfield, MA; Albany, NY; Glastonbury, CT; Willimantic, CT; Worcester, MA; Burlington, MA, and Providence RI. 44 Business Capital's lending division is headquartered in Blue Bell, Pennsylvania.
The Company also owns or leases other facilities within its primary market areas: Greater Boston (including Worcester, MA); Pioneer Valley (Springfield area), Massachusetts; Berkshire County, Massachusetts; Southern Vermont; the Capital Region (Albany area), New York; Central New York; Central and Eastern Connecticut; and Southern Rhode Island.
The Company also owns or leases other facilities within its primary market areas: Greater Boston (including Worcester, Massachusetts); Pioneer Valley (Springfield area), Massachusetts; Berkshire County, Massachusetts; Southern Vermont; the Capital Region (Albany area), New York; Central New York; Lower Hudson Valley region of New York; Central and Eastern Connecticut; and Rhode Island.
ITEM 2. PROPERTIES The Company's headquarters are located at 60 State Street in leased property in Boston, MA. The Bank's headquarters are located in owned and leased facilities located in Pittsfield, MA.
Item 2. Properties The Company's headquarters are located at 131 Clarendon Street in Boston, Massachusetts which is owned by the Bank.
Removed
The Bank's 44 Business Capital lending division is headquartered in Blue Bell, Pennsylvania. The Bank has made its workplace more flexible as certain designated functions are approved for telecommuting arrangements. As a result of its efficiency initiatives, the Bank has been in the process of identifying and reducing real estate utilized for its operations.
Added
As of December 31, 2025, the Company had 147 full-service financial centers in Massachusetts, New York, Connecticut, Rhode Island, and Vermont.
Removed
Due to the pandemic, the Company adapted its infrastructure and protocols to accommodate the shift of back office operations out of the office and continues to support this expanded capability and flexibility in pursuit of its strategies and human capital management. 43 Table of Contents
Added
Eastern Funding conducts its business from leased premises in New York City, New York, in Melville, New York, and in Plainview, New York. Clarendon Private conducts its business from a portion of the Company's headquarters which it leases.
Added
Refer to Note 13, "Commitments and Contingencies," to the consolidated financial statements for information regarding the Company's lease commitments as of December 31, 2025. Item 3.
Added
Legal Proceedings Information required by this Item is set forth in the “Legal Proceedings” discussion in Note 13, “Commitments and Contingencies” in the Notes to Consolidated Financial Statements, which discussion is incorporated herein by reference. Item 4. Mine Safety Disclosures Not applicable. 23 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+3 added−9 removed0 unchanged
Biggest changePeriod Total number of shares purchased Average price paid per share Total number of shares purchased as part of publicly announced plans or programs Maximum number of shares that may yet be purchased under the plans or programs October 1-31, 2024 — $ — — 839,589 November 1-30, 2024 — — — 839,589 December 1-31, 2024 — — — — Total — $ — — — 45 Table of Contents Common Stock Performance Graph The performance graph compares the Company’s cumulative shareholder return on its common stock over the last five years to the cumulative return of the NYSE Composite Index and the KBW NASDAQ Regional Banking Index.
Biggest changeFive-Year Performance Comparison The following graph compares total shareholder return on the Company's common stock over the last five years with the NYSE Composite Index and the KBW NASDAQ Regional Banking Index. Index values are as of December 31 of each of the indicated years.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information The common shares of the Company trade on the New York Stock Exchange under the symbol “BHLB”. The Company had approximately 3,504 holders of record of common stock at February 24, 2025.
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 the New York Stock Exchange under the symbol "BBT". The number of registered holders of common stock as of March 2, 2026 was 5,356.
Removed
Dividends The Company intends to pay regular cash dividends to common shareholders; however, there is no assurance as to future dividends because they are dependent on the Company’s future earnings, capital requirements, financial condition, and regulatory environment.
Added
The number of record-holders may not reflect the number of persons or entities holding stock in nominee name through banks, brokerage firms or other nominee. The Company currently pays quarterly cash dividends in the amount of $0.3225 per share. The Company expects comparable cash dividends will be paid in the future.
Removed
Dividends from the Bank have been a source of cash used by the Company to pay its dividends, and these dividends from the Bank are dependent on the Bank’s future earnings, capital requirements, and financial condition. Dividends from the Bank are allowed within statutory limits under Massachusetts statutes and are currently subject to approval by the FDIC.
Added
At December 31, Index 2020 2021 2022 2023 2024 2025 Beacon Financial Corporation 100.00 138.76 125.71 102.50 117.00 115.12 NYSE Composite Index 100.00 120.68 109.39 124.46 144.12 169.62 KBW NASDAQ Regional Banking Index 100.00 136.64 127.17 126.67 143.39 152.71 The graph assumes $100 invested on December 31, 2020 in each of the Company's common stock, the NYSE Composite Index and the KBW NASDAQ Regional Banking Index.
Removed
Further information about dividend restrictions is disclosed in Note 17 - Shareholders’ Equity and Earnings per Common Share of the Consolidated Financial Statements. Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities The Company occasionally issues unregistered shares of common stock to vendors or as consideration in contracts for the purchase of assets, services, or operations.
Added
The graph also assumes reinvestment of all dividends. (b) Not applicable. (c) Not applicable. 24 Table of Contents
Removed
During 2024 and 2023, there were no shares transferred.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Purchases On January 25, 2024, the Company announced that its Board of Directors approved a stock repurchase program pursuant to which the Company is authorized to repurchase shares of Company common stock at a total cost of up to $40 million through December 31, 2024.
Removed
Total shareholder return is measured by dividing total dividends (assuming dividend reinvestment) for the measurement period plus share price change for a period by the share price at the beginning of the measurement period. The Company’s cumulative shareholder return over a five-year period is based on an initial investment of $100 on December 31, 2019.
Removed
The performance graph represents past performance and should not be considered to be an indication of future performance. Information used on the graph and table was obtained from a third party provider, a source believed to be reliable, but the Company is not responsible for any errors or omissions in such information.
Removed
Period Ending Index 12/31/19 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Berkshire Hills Bancorp, Inc. 100.00 54.79 92.70 99.34 85.10 100.31 NYSE Composite Index 100.00 106.99 129.11 117.04 133.16 154.19 KBW NASDAQ Regional Banking Index 100.00 91.29 124.74 116.10 115.64 130.90 Source: S&P Global Market Intelligence Shown below is the annual total shareholder return by year based on the above data.
Removed
Annual Total Shareholder Return Year Ending Index 12/31/20 12/31/21 12/31/22 12/31/23 12/31/24 Berkshire Hills Bancorp, Inc. (45.21) 69.20 7.17 (14.33) 17.87 NYSE Composite Index 6.99 20.68 (9.35) 13.77 15.79 KBW NASDAQ Regional Banking Index (8.71) 36.64 (6.93) (0.40) 13.20 46 Table of Contents ITEM 6. RESERVED 47 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

7 edited+298 added−166 removed0 unchanged
Biggest changeFor each category of interest-earning assets and interest-bearing liabilities, information is provided with respect to changes attributable to (1) changes in rate (change in rate multiplied by prior year volume), (2) changes in volume (change in volume multiplied by prior year rate), and (3) changes in volume/rate (change in rate multiplied by change in volume) have been allocated proportionately based on the absolute value of the change due to the rate and the change due to volume.
Biggest changeInformation 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 following significant accounting policies are considered most critical in that they are important to the Company’s financial condition and results, and they require management’s subjective and complex judgment as a result of the need to make estimates about the effects of matters that are inherently uncertain.
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.
(5) Purchase accounting accretion totaled $1.3 million, $0.7 million, and $2.0 million for the years-ended December 31, 2024, 2023, and 2022, respectively.
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.
Net interest income decreased in 2024 by $17 million, or 5%, to $352 million. The net interest margin decreased by 11 basis points, or 3%, to 316 basis points in 2024 from 327 basis points in 2023. Average earning assets decreased by $0.2 billion, or 2%, to $11.2 billion.
Net interest margin decreased 18 basis points to 3.06% in 2024 from 3.24% in 2023.
A $17 million decrease in net interest income was mostly offset by an $8 million decrease in credit loss provision expense and an $8 million decrease in operating non-interest expense. The additional benefit of a $3 million increase in loan and SBA related revenue contributed to the $2 million increase in total operating income.
The increase in interest expense was driven by an increase of $4.3 million due to borrowing rates partially offset by a decrease of $0.2 million due to volume.
Both of these most critical accounting policies were significant in determining income and financial condition based on events in 2024. 63 Table of Contents Allowance for Credit Losses on Loans The allowance for credit losses on loans (“ACLL”) represents management’s estimate of expected credit losses over the expected contractual life of our loan portfolio.
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.
COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 2024 AND 2023 GAAP net income decreased $9 million, or 12%, year-over-year to $61 million in 2024 from $70 million in 2023. This was primarily due to a $25 million increase in non-operating securities losses offset in part by $16 million in non-operating gains on branch sales.
This represents an effective tax rate of 25.9% and 25.1% for 2025 and 2024, respectively. 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.
Removed
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SELECTED FINANCIAL DATA The following summary data is based in part on the Consolidated Financial Statements and accompanying notes, and other schedules appearing elsewhere in this Form 10-K.
Added
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Introduction Beacon Financial Corporation, a Delaware corporation, is the holding company for Beacon Bank & Trust and its subsidiaries and Clarendon Private.
Removed
Historical data is also based in part on, and should be read in conjunction with, prior filings with the SEC.
Added
The Company 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. Clarendon Private is a registered investment advisor with the SEC.
Removed
At or For the Years Ended December 31, (In thousands, except per share data) 2024 2023 2022 2021 2020 Per Common Share Data: Net earnings/(loss), diluted - continuing operations $ 1.43 $ 1.60 $ 2.02 $ 2.39 $ (10.21) Net (loss), diluted - discontinued operations — — — — (0.39) Net earnings/(loss), diluted $ 1.43 $ 1.60 $ 2.02 $ 2.39 $ (10.60) Total book value per common share 25.15 23.27 21.51 24.30 23.37 Dividends 0.72 0.72 0.54 0.48 0.72 Common stock price: High 32.36 31.52 31.78 29.16 33.04 Low 20.50 18.07 23.62 16.35 8.55 Close 28.43 24.83 29.90 28.43 17.12 Performance Ratios: (1) Return on assets 0.52 % 0.59 % 0.82 % 0.98 % (4.15) % Return on equity 5.84 7.07 8.70 9.96 37.15 Return on tangible common equity (2) 6.27 7.60 9.29 10.57 (46.88) Net interest margin, fully taxable equivalent ("FTE") (3) 3.16 3.27 3.26 2.60 2.72 Growth Ratios: Total commercial loans 7.32 % 5.66 % 12.99 % (12.09) % (4.58) % Total loans 3.82 8.45 22.11 (15.54) 14.95 Total deposits (2.43) 2.96 2.57 (1.44) (1.16) Earnings per share, (compared to prior year) (10.63) (20.79) (15.48) 122.55 (638.07) Selected Financial Data: Total assets $ 12,273,408 $ 12,430,821 $ 11,662,864 $ 11,554,913 $ 12,838,013 Total earning assets 11,522,562 11,704,515 10,913,069 10,899,109 12,089,939 Securities 1,188,859 2,033,436 2,033,436 2,548,590 2,223,417 Total loans 9,384,994 9,039,686 8,335,309 6,825,847 8,081,519 Allowance for credit losses (114,700) (105,357) (96,270) (106,094) (127,302) Total intangible assets 15,064 19,664 24,483 26,619 34,819 Total deposits 10,375,204 10,633,384 10,327,269 10,068,953 10,215,808 Total borrowings 438,094 125,509 125,509 110,844 571,637 Total shareholders’ equity 1,167,424 1,012,221 954,062 1,182,435 1,187,773 48 Table of Contents At or For the Years Ended December 31, 2024 2023 2022 2021 2020 Selected Operating Data: Total interest and dividend income $ 613,938 $ 576,299 $ 387,257 $ 329,065 $ 409,782 Total interest expense 262,352 207,252 42,660 37,899 93,000 Net interest income 351,586 369,047 344,597 291,166 316,782 Fee income 68,527 65,281 63,995 84,462 69,990 All other non-interest income/(loss) (20,113) (22,499) 4,942 58,786 (3,683) Total net revenue 400,000 411,829 413,534 434,414 383,089 Provision for credit losses 23,999 31,999 11,000 (500) 75,878 Total non-interest expense 296,486 301,508 288,716 285,893 840,239 Income/(loss) from continuing operations before income taxes 79,515 78,322 113,818 149,021 (533,028) Income tax expense/(benefit) from continuing operations 18,512 8,724 21,285 30,357 (19,853) Net income/(loss) from continuing operations 61,003 69,598 92,533 118,664 (513,175) (Loss)/income from discontinued operations before income taxes — — — — (26,855) Income tax (benefit)/expense from discontinued operations — — — — (7,013) Net (loss)/income from discontinued operations — — — — (19,842) Net income/(loss) $ 61,003 $ 69,598 $ 92,533 $ 118,664 $ (533,017) Basic earnings/(loss) per common share: Continuing operations $ 1.44 $ 1.61 $ 2.03 $ 2.41 $ (10.21) Discontinued operations — — — — (0.39) Total basic earnings/(loss) per share $ 1.44 $ 1.61 $ 2.03 $ 2.41 $ (10.60) Diluted earnings/(loss) per common share: Continuing operations $ 1.43 $ 1.60 $ 2.02 $ 2.39 $ (10.21) Discontinued operations — — — — (0.39) Total diluted earnings/(loss) per share $ 1.43 $ 1.60 $ 2.02 $ 2.39 $ (10.60) Weighted average common shares outstanding - basic 42,508 43,288 45,564 49,240 50,270 Weighted average common shares outstanding - diluted 42,761 43,504 45,914 49,554 50,270 Dividends per preferred share $ — $ — $ — $ 1.20 $ 1.84 Dividends per common share $ 0.72 $ 0.72 $ 0.54 $ 0.48 $ 0.72 Asset Quality and Condition Ratios: Net loans charged-off/average loans 0.16 % 0.26 % 0.27 % 0.29 % 0.41 % Allowance for credit losses/total loans 1.22 1.17 1.15 1.55 1.58 Loans/deposits 90 85 81 68 79 Capital Ratios: Tier 1 capital to average assets - Company 10.97 % 9.65 % 10.18 % 10.49 % 9.38 % Total capital to risk-weighted assets - Company 15.45 14.36 14.60 17.32 16.10 Tier 1 capital to risk-weighted assets - Company 13.22 12.27 12.60 15.30 14.06 Shareholders’ equity/total assets 9.51 8.14 8.18 10.23 9.25 ___________________________________ (1) All performance ratios are annualized and are based on average balance sheet amounts, where applicable.
Added
Through Clarendon Private and the Trust and Investments Division of the Bank, 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.
Removed
(2) Non-GAAP financial measure. Refer to "Reconciliation of Non-GAAP Financial Measures" for additional information. (3) Fully taxable equivalent considers the impact of tax advantaged investment securities and loans. 49 Table of Contents Average Balances, Interest and Average Yields/Cost The following table presents an analysis of average rates and yields on a fully taxable equivalent basis for the years presented.
Added
As a full-service financial institution with 147 banking offices throughout New England and New York, the Bank and its subsidiaries focus their efforts on developing and deepening long-term banking relationships with qualified customers through a full complement of products, excellent customer service, and strong risk management.
Removed
Tax exempt interest revenue is shown on a tax-equivalent basis for proper comparison.
Added
The competition for loans and leases and deposits remains strong, with growth and pricing influenced by the FRB'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.
Removed
Item 7 - Table 1 - Average Balance, Interest and Average Yields / Costs 2024 2023 2022 (Dollars in millions) Average Balance Interest Average Yield/ Rate Average Balance Interest Average Yield/ Rate Average Balance Interest Average Yield/ Rate Assets Loans: (1)(2) Commercial real estate $ 4,673.2 $ 307.6 6.48 % $ 4,326.8 $ 272.5 6.30 % $ 3,836.2 $ 167.6 4.37 % Commercial and industrial loans 1,388.6 106.9 7.57 1,455.9 107.9 7.41 1,435.3 74.7 5.20 Residential loans 2,691.2 114.3 4.25 2,512.3 98.1 3.91 1,784.2 63.3 3.55 Consumer loans 423.0 30.3 7.13 518.5 37.8 7.29 556.8 32.1 5.77 Total loans 9,176.0 559.1 6.04 8,813.5 516.3 5.86 7,612.5 337.7 4.44 Investment securities (2)(3) 1,435.7 35.7 2.49 2,186.6 50.8 2.32 2,489.7 51.2 2.06 Short-term investments and loans held for sale (4) 528.7 25.7 4.86 372.4 17.1 4.59 569.1 4.9 0.86 New York branch loans held for sale 26.3 1.5 5.71 — — — — — — Total interest-earning assets 11,166.7 622.0 5.51 11,372.5 584.2 5.14 10,671.3 393.8 3.69 Intangible assets 17.1 21.9 26.8 Other non-interest earning assets (4) 499.3 443.2 518.2 Total assets $ 11,683.1 $ 11,837.6 $ 11,216.3 Liabilities and shareholders' equity Deposits: Non-interest-bearing demand deposits $ 2,283.7 $ — — % $ 2,584.6 $ — — % $ 2,914.9 $ — — % NOW and other 767.4 11.1 1.45 % 1,048.9 14.9 1.42 % 1,416.7 6.1 0.43 % Money market 2,993.1 96.8 3.23 2,727.3 65.6 2.40 2,809.1 13.8 0.49 Savings 1,011.8 10.9 1.07 1,067.2 6.1 0.57 1,114.8 0.4 0.03 Certificates of deposit 2,480.2 104.3 4.20 2,275.8 72.4 3.18 1,541.7 13.1 0.85 Total deposits 9,536.2 223.1 2.39 9,703.8 159.0 1.64 9,797.2 33.4 0.34 Borrowings and notes (4) 624.9 34.3 5.42 913.6 48.3 5.29 176.1 9.2 5.24 New York branch non-interest-bearing deposits held for sale 45.4 — — — — — — — — New York branch interest-bearing deposits held for sale 181.6 5.0 2.75 — — — — — — Total funding liabilities 10,388.1 262.4 2.52 10,617.4 207.3 1.95 9,973.3 42.6 0.43 Other non-interest-bearing liabilities 250.8 236.3 180.1 Total liabilities 10,638.9 10,853.7 10,153.4 Total shareholders' equity 1,044.2 983.9 1,062.9 Total liabilities and equity $ 11,683.1 $ 11,837.6 $ 11,216.3 Net interest margin (5) 3.16 3.27 3.26 Supplementary data Net Interest Income, non FTE $ 351.6 $ 369.0 $ 344.6 FTE income adjustment 8.0 7.9 6.6 Net Interest Income, FTE 359.6 376.9 351.2 50 Table of Contents _________________________________ Notes: (1) The average balances of loans include nonaccrual loans, and deferred fees and costs.
Added
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 the net interest margin to increase modestly.
Removed
(2) The yield on tax-exempt loans and securities is computed on a fully tax-equivalent basis using a tax rate of 27%. (3) The average balance of investment securities is based on amortized cost. (4) The average balances of borrowings and notes include the finance lease obligation presented under other liabilities on the consolidated balance sheets.
Added
This is due to deposit and wholesale funding costs repricing at lower rates, while loans do not reprice at the same magnitude, as well as the accretions from the purchase accounting marks.
Removed
The effect of purchase accounting accretion on the net interest margin was an increase in all years, which is shown sequentially as follows beginning with the most recent year and ending with the earliest year: 0.01%, 0.01%, and 0.02%. 51 Table of Contents Rate/Volume Analysis The following table presents the effects of rate and volume changes on the fully taxable equivalent net interest income.
Added
If both short- and long-term interest rates fall, net interest income models, using a projected flat balance sheet with stable deposit balances, forecast that a parallel decrease in rates will have a negative impact on the Company's net interest income, net interest spread, and net interest margin.
Removed
Tax exempt interest revenue is shown on a tax-equivalent basis for proper comparison.
Added
While the Company's current asset sensitivity rate is approximately 40%, shifting to a more asset sensitive balance sheet could have additional pressure on interest margins. As discussed above, changes in interest rates could also precipitate a change in the mix and volume of the Company's deposits and loans.
Removed
There are no out-of-period adjustments included in the rate/volume analysis in the following table.
Added
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.
Removed
Item 7 - Table 2 - Rate Volume Analysis 2024 Compared with 2023 2023 Compared with 2022 (Decrease) Increase Due to (Decrease) Increase Due to (In thousands) Rate Volume Net Rate Volume Net Interest income: Commercial real estate $ 9,222 $ 25,933 $ 35,155 $ 81,238 $ 23,568 $ 104,806 Commercial and industrial loans 2,872 (3,865) (993) 32,105 1,086 33,191 Residential loans 8,845 7,261 16,106 6,883 27,931 34,814 Consumer loans (773) (6,757) (7,530) 8,004 (2,329) 5,675 Total loans 20,166 22,572 42,738 128,230 50,256 178,486 Investment securities 3,309 (18,450) (15,141) 6,239 (6,628) (389) Short-term investments and loans held for sale 1,078 7,551 8,629 14,416 (2,244) 12,172 New York branch loans held for sale — 1,527 1,527 — — — Total interest income $ 24,553 $ 13,200 $ 37,753 $ 148,885 $ 41,384 $ 190,269 Interest expense: NOW accounts $ 751 $ (4,500) $ (3,749) $ 6,380 $ 2,324 $ 8,704 Money market accounts 25,195 6,039 31,234 59,450 (7,713) 51,737 Savings accounts 4,280 476 4,756 5,299 453 5,752 Certificates of deposit 30,455 1,408 31,863 60,555 (1,271) 59,284 Total deposits 60,681 3,423 64,104 131,684 (6,207) 125,477 Borrowings 2,189 (16,193) (14,004) 8 39,111 39,119 New York branch interest-bearing deposits — 4,998 4,998 — (1,820) (1,820) Total interest expense $ 62,870 $ (7,772) $ 55,098 $ 131,692 $ 32,904 $ 164,596 Change in net interest income $ (38,317) $ 20,972 $ (17,345) $ 17,193 $ 8,480 $ 25,673 52 Table of Contents NON-GAAP FINANCIAL MEASURES This document contains certain non-GAAP financial measures in addition to results presented in accordance with Generally Accepted Accounting Principles (“GAAP”).
Added
The Company’s common stock is traded on the New York Stock Exchange under the symbol “BBT.” Executive Overview Balance Sheet Total assets increased $11.3 billion, or 95.0%, to $23.2 billion as of December 31, 2025 from $11.9 billion as of December 31, 2024. The increase was primarily due to the assets assumed in the Transaction.
Removed
These non-GAAP measures are intended to provide the reader with additional supplemental perspectives on operating results, performance trends, and financial condition. Non-GAAP financial measures are not a substitute for GAAP measures; they should be read and used in conjunction with the Company’s GAAP financial information. A reconciliation of non-GAAP financial measures to GAAP measures is provided below.
Added
The Transaction created a $23 billion Northeast franchise by combining Legacy Berkshire’s stable, more rural funding base with Legacy Brookline’s commercial lending focus in metro markets. The highly-complementary geographic footprints had minimal branch overlap ensuring minimal market disruption while also providing business diversification, fee income opportunities and improved competitive positioning.
Removed
In all cases, it should be understood that non-GAAP measures do not depict amounts that accrue directly to the benefit of shareholders. An item which management excludes when computing non-GAAP operating earnings can be of substantial importance to the Company’s results for any particular quarter or year.
Added
The Transaction also created meaningful near-term cost synergies while positioning the Company to benefit from future economies of scale. Total loans and leases increased $8.3 billion, or 84.4%, to $18.0 billion as of December 31, 2025 from $9.8 billion as of December 31, 2024.
Removed
The Company’s non-GAAP operating earnings information set forth is not necessarily comparable to non-GAAP information which may be presented by other companies. Each non-GAAP measure used by the Company in this report as supplemental financial data should be considered in conjunction with the Company’s GAAP financial information.
Added
The increase was primarily due to the loans assumed in the Transaction partially offset by the sales of $332.6 million of purchased mortgage loans acquired in the Transaction.
Removed
The Company utilizes the non-GAAP measure of operating earnings in evaluating operating trends, including components for operating revenue and expense. These measures exclude amounts which the Company views as unrelated to its normalized operations. These items primarily include securities gains/losses, merger costs, and restructuring costs.
Added
The Company's commercial loan portfolios, which are comprised of commercial real estate loans and commercial loans and leases, totaled $14.0 billion, or 77.4% of total loans and leases as of December 31, 2025, an increase of $5.7 billion, or 69.8%, from $8.2 billion, or 84.1% of total loans and leases, as of December 31, 2024.
Removed
In 2024, adjustments were primarily related to the pending merger, branch sales and consolidations, and loss on sale of AFS securities. In 2023, adjustments were primarily related to branch consolidations, severance charges related to a workforce reduction, and loss on sale of AFS securities. Starting in 2023, fair value adjustments on securities are included in operating income.
Added
Total investment securities increased $0.8 billion, or 88.7%, to $1.7 billion as of December 31, 2025 from $0.9 billion as of December 31, 2024, primarily due to investment securities assumed in the Transaction partially offset by the sale of $176.4 million of the Legacy Berkshire's investment portfolio during the third quarter.
Removed
In 2022, the restructuring expense adjustment primarily related to the termination of leasehold interests and the write-down of related right of use assets and leasehold improvements in conjunction with branch consolidations and real estate reductions. The Company calculates certain profitability measures based on its operating revenue, expenses, and earnings.
Added
Cash and cash equivalents increased $1.5 billion, or 275.5%, to $2.0 billion as of December 31, 2025 from $0.5 billion as of December 31, 2024.
Removed
The Company also calculates operating earnings per share based on its measure of adjusted earnings. The Company views these amounts as important to understanding its operating trends, particularly due to the impact of accounting standards related to merger and acquisition activity. Analysts also rely on these measures in estimating and evaluating the Company’s performance.
Added
The increase was primarily due to cash and equivalents assumed in the Transaction and an increased payroll deposit balance at December 31, 2025. 25 Table of Contents Total deposits increased $10.6 billion, or 119.2%, to $19.5 billion as of December 31, 2025 from $8.9 billion as of December 31, 2024, primarily due to the deposits assumed in the Transaction.
Removed
Management also believes that the computation of non-GAAP operating earnings and operating earnings per share may facilitate the comparison of the Company to other companies in the financial services industry.
Added
Core deposits, which include demand checking, NOW, non-payroll money market and savings accounts, totaled $13.1 billion, or 67.0% of total deposits, as of December 31, 2025, an increase of $6.9 billion, or 112.6%, from $6.1 billion, or 69.1% of total deposits, as of December 31, 2024.
Removed
Due to the anticipated earnings volatility resulting from loan loss provisions reflecting changes in estimates of uncertain future economic conditions under the CECL accounting standard, many users of bank financial statements are focusing on Pre-Provision Net Revenue (“PPNR”). This is a measure of revenue less expenses, and is calculated before the loan loss provision and income tax expense.
Added
Payroll deposits totaled $1.9 billion as of December 31, 2025, all of which was assumed in the Transaction. Certificate of deposit balances totaled $4.2 billion, or 21.3% of total deposits, as of December 31, 2025, an increase of $2.3 billion, or 120.5%, from $1.9 billion, or 21.2% of total deposits, as of December 31, 2024.
Removed
This measure gives clearer visibility of the operations of the company during the periods presented in the income statements, without the impact of period-end estimates of future uncertain events. This measure also enhances comparisons of operations across different banks, which might have significantly different period-end estimates of uncertain future economic conditions that affect the loan loss provision.
Added
Brokered deposit balances totaled $0.4 billion, or 2.1% of total deposits as of December 31, 2025, a decrease of $0.5 billion, or 52.8%, from $0.9 billion, or 9.8% of total deposits, as of December 31, 2024.
Removed
Consistent with its previous practices measuring results on an adjusted basis before the impacts of acquisitions, divestitures, and other designated items, the Company has introduced the measure of Operating Pre-Provision Net Revenue (“Operating PPNR”) which measures PPNR excluding adjustments for items not viewed as related to ongoing operations.
Added
Total borrowed funds decreased $731.5 million, or 48.1%, to $788.4 million as of December 31, 2025 from $1.5 billion as of December 31, 2024 as combined liquidity as a result of the Transaction and the increase in deposits allowed for reduction in borrowings.
Removed
This measure is now integral to the Company’s analysis of its operations, and is not viewed as a substitute for GAAP measures of net income. Analysts also use this measure in assessing the Company’s operations and in making comparisons across banks.
Added
Asset Quality Nonperforming assets as of December 31, 2025 totaled $116.7 million, or 0.50% of total assets, compared to $70.5 million, or 0.59% of total assets, as of December 31, 2024.
Removed
The Company and analysts also measure Operating PPNR/Assets in order to utilize the PPNR measure in assessing its comparative operating profitability. This measure primarily relies on the measures of operating revenue and operating expense already used in the Company’s calculation of its efficiency ratio.
Added
Total net charge-offs for the year ended December 31, 2025 were $37.6 million, or 0.30% of average loans and leases, compared to $28.2 million, or 0.29% of average loans and leases, for the year ended December 31, 2024. The increase of $46.2 million in nonperforming assets was primarily driven by the Transaction.
Removed
The Company also adjusts certain equity related measures to exclude intangible assets due to the importance of these measures to the investment community. 53 Table of Contents The following table summarizes the reconciliation of non-GAAP items recorded for the time periods indicated: At or For the Years Ended (Dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2022 GAAP Net income $ 61,003 $ 69,598 $ 92,533 Non-GAAP measures Adj: Fair value adjustments on securities (1) — — 2,037 Adj: Loss/(gain) on sale of securities 49,937 25,057 (6) Adj: Net gains on sale of business operations (16,241) — — Adj: Merger, restructuring, conversion, and other related expenses (2) 9,493 6,261 8,909 Adj: Income taxes (9,319) (7,723) (2,940) Net non-operating charges 33,870 23,595 8,000 Operating net income (non-GAAP) $ 94,873 $ 93,193 $ 100,533 GAAP Total revenue from continuing operations $ 400,000 $ 411,829 $ 413,534 Adj: Fair value adjustments on securities — — 2,037 Adj: Loss/(gain) on sale of AFS securities 49,937 25,057 (6) Adj: Net gains on sale of business operations (16,241) — — Operating revenue (non-GAAP) $ 433,696 $ 436,886 $ 415,565 GAAP Total non-interest expense from continuing operations $ 296,486 $ 301,508 $ 288,716 Less: Total non-operating expense (see above) (9,493) (6,261) (8,909) Operating non-interest expense (non-GAAP) $ 286,993 $ 295,247 $ 279,807 Pre-tax, pre-provision net revenue (PPNR) $ 103,514 $ 110,321 $ 124,818 Operating pre-tax, pre-provision net revenue (PPNR) 146,703 141,639 135,758 (in millions, except per share data) Total average assets $ 11,683 $ 11,838 $ 11,216 Total average shareholders' equity 1,044 984 1,063 Total average tangible shareholders' equity 1,027 962 1,036 Total tangible shareholders’ equity, period-end 1,152 993 930 Total tangible assets, period-end 12,258 12,411 11,638 Total common shares outstanding, period-end (thousands) 46,424 43,501 44,361 Average diluted shares outstanding (thousands) 42,761 43,504 45,914 Earnings per share, diluted $ 1.43 $ 1.60 $ 2.02 Plus: Net adjustments per share, diluted 0.79 0.54 0.17 Operating earnings per share, diluted 2.22 2.14 2.19 Book value per common share, period-end 25.15 23.27 21.51 Tangible book value per common share, period-end 24.82 22.82 20.95 Total shareholders' equity/total assets 9.51 8.14 8.18 Total tangible shareholders' equity/total tangible assets 9.40 8.00 7.99 54 Table of Contents At or For the Years Ended (Dollars in thousands) December 31, 2024 December 31, 2023 December 31, 2022 Performance Ratios (5) Return on equity 5.84 % 7.07 % 8.70 % Operating return on equity 9.09 9.47 9.46 Return on tangible common equity (3) 6.27 7.60 9.29 Operating return on tangible common equity (3) 9.56 10.05 10.07 Return on assets 0.52 0.59 0.82 Operating return on assets 0.81 0.79 0.90 Efficiency ratio (4) 63.94 63.88 64.31 Supplementary Data (in thousands) Tax benefit on tax-credit investments N/M $ 9,863 $ 4,880 Non-interest income charge on tax-credit investments N/M (8,018) (3,508) Net income on tax-credit investments N/M 1,845 1,372 Intangible amortization 4,601 4,820 5,134 Fully taxable equivalent income adjustment 7,985 7,870 6,644 ____________________________________ (1) Starting in 2023, fair value adjustments on securities are included in operating income.
Added
The ratio of the allowance for loan and lease losses to total loans and leases was 1.40% as of December 31, 2025, compared to 1.28% as of December 31, 2024. The ratio of the allowance for loan and lease losses to nonaccrual loans and leases was 221.49% as of December 31, 2025, compared to 180.37% as of December 31, 2024.
Removed
(2) Merger, restructuring, conversion, and other related expenses included $6.6 million of merger expenses for the year ended December 31, 2024. Merger, restructuring, conversion, and other related expenses included no merger and acquisition expenses for the years ended December 31, 2023 and 2022. (3) Amortization of intangible assets is adjusted assuming a 27% marginal tax rate.
Added
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 10.95% as of December 31, 2025, compared to 10.46% as of December 31, 2024.
Removed
(4) Efficiency ratio is computed by dividing total core tangible non-interest expense by the sum of total net interest income on a fully taxable equivalent basis and total operating non-interest income adjusted to include tax credit benefit of tax shelter investments. The Company uses this non-GAAP measure to provide important information regarding its operational efficiency.
Added
The Company's Tier 1 leverage ratio was 9.25% as of December 31, 2025, compared to 9.06% as of December 31, 2024. As of December 31, 2025, the Company's Tier 1 risk-based ratio was 11.12%, compared to 10.56% as of December 31, 2024.
Removed
(5) Return on tangible common equity excluding AFS unrealized losses was 5.45%, 6.07%, and 8.26% for the years ended December 31, 2024, 2023, and 2022, respectively.
Added
The Company's total risk-based ratio was 13.01% as of December 31, 2025, compared to 12.42% as of December 31, 2024. The Company's ratio of stockholders' equity to total assets was 10.75% and 10.26% as of December 31, 2025 and December 31, 2024, respectively.
Removed
Operating return on tangible common equity excluding AFS unrealized losses was 8.32%, 8.03%, and 8.94% for the years ended December 31, 2024, 2023, and 2022, respectively. 55 Table of Contents GENERAL This discussion is intended to assist readers in understanding the financial condition and results of operations of the Company, the changes in key items in the Company’s Consolidated Financial Statements (“financial statements”) from year to year, and the primary reasons for those changes.
Added
The Company's tangible equity ratio was 8.62% and 8.27% as of December 31, 2025 and December 31, 2024, respectively.
Removed
The objectives of this section are: • To provide a narrative explanation of the Company’s financial statements that enables investors to see the company through the eyes of management; • To enhance the financial disclosure and provide the context within which financial information should be analyzed; and • To provide information about the quality of, and potential future variability of, the Company’s earnings and cash flow.
Added
Net Income For the year ended December 31, 2025, the Company reported net income of $90.3 million, or $1.03 per basic and diluted share, an increase of $21.6 million, or 31.4%, from $68.7 million, or $0.77 per basic and diluted share for the year ended December 31, 2024.
Removed
This discussion includes the following sections: • Summary • Comparison of Operating Results for the Years Ended December 31, 2024 and 2023 • Comparison of Financial Condition at December 31, 2024 and 2023 • Liquidity and Cash Flows • Capital Resources • Application of Critical Accounting Policies • Enterprise Risk Management • Corporate Responsibility and Sustainability The following discussion and analysis should be read in conjunction with the Company’s financial statements and the notes thereto appearing in Item 8 of this document.
Added
The increase in net income is primarily the result of an increase in net interest income of $173.5 million and an increase in non-interest income of $24.3 million, partially offset by an increase in non-interest expense of $147.9 million driven by merger costs, an increase in the provision for credit losses on loans of $19.4 million, and an increase in the provision for income taxes of $8.6 million.
Removed
In the following discussion, income statement comparisons are against the previous year and balance sheet comparisons are against the previous fiscal year-end, unless otherwise noted. Operating results discussed herein are not necessarily indicative of the results for the year 2025 or any future period.
Added
The return on average assets was 0.59% for the year ended December 31, 2025, compared to 0.60% for the year ended December 31, 2024. The return on average stockholders' equity was 5.44% for the year ended December 31, 2025, compared to 5.67% for the year ended December 31, 2024.
Removed
In management’s discussion and analysis of financial condition and results of operations, certain reclassifications have been made to make prior periods comparable.
Added
Net interest margin was 3.56% for the year ended December 31, 2025, up from 3.06% for the year ended December 31, 2024.
Removed
Tax-equivalent adjustments are the result of increasing income from tax-advantaged loans and securities by an amount equal to the taxes that would be paid if the income were fully taxable based on a 27% marginal rate (including state income taxes net of federal benefit).
Added
The increase in net interest margin is a result of a decrease of 54 basis points in the Company's cost of interest bearing liabilities to 3.05% in 2025 from 3.59% in 2024, and an increase in the yield on interest-earning assets of 4 basis points to 5.87% in 2025 from 5.83% in 2024.
Removed
In the discussion, unless otherwise specified, references to earnings per share and "EPS" refer to diluted earnings per common share. Berkshire is a Delaware corporation headquartered in Boston and the holding company for the Bank. Established in 1846, the Bank operates as a commercial bank under a Massachusetts trust company charter.
Added
Results for 2025 included a provision for credit losses of $41.4 million, as discussed in the "Allowance for Credit Losses—Allowance for Loan and Lease Losses" section below. Non-interest income increased $24.3 million to $49.9 million for the year ended December 31, 2025 from $25.6 million for the year ended December 31, 2024.
Removed
On December 16, 2024, the Company entered into a definitive agreement for a merger of equals with Brookline Bancorp, Inc., a Boston-based multi-bank holding company with $11.9 billion in assets and branches in Massachusetts, Rhode Island, and New York.
Added
The increase was driven by four months of combined Company activity in 2025. 26 Table of Contents Non-interest expense increased $147.9 million to $389.7 million for the year ended December 31, 2025 from $241.9 million for the year ended December 31, 2024.
Removed
This merger is targeted to be completed in the second half of 2025, subject to customary shareholder and regulatory approvals, and closing conditions. 56 Table of Contents SUMMARY Berkshire reported 2024 net income of $61 million, or $1.43 per share, compared to $70 million, or $1.60 per share, in 2023.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+30 added−15 removed0 unchanged
Biggest changeEstimated Percent Change in Economic Value of Equity Parallel Shock Rate Change (basis points 12/31/2024 12/31/2023 +200 (1.4) % (3.9) % +100 (0.6) (1.8) -100 0.2 1.2 -200 (0.1) 1.3 The Company’s EVE Sensitivity profile indicates that at December 31, 2024 the balance sheet was modestly liability sensitive, with this sensitivity decreasing compared to December 31, 2023. 68 Table of Contents ITEM 8.
Biggest changeEstimated Percent Change in Economic Value of Equity Parallel Shock in Interest Rate Levels At December 31, 2025 At December 31, 2024 Up 400 basis points (1.8) % (7.1) % Up 200 basis points (0.7) % (4.1) % Up 100 basis points 0.1 % (1.3) % Down 100 basis points (1.1) % (0.8) % Down 200 basis points (3.2) % (3.2) % Down 400 basis points (10.1) % (10.2) % The Company's EVE asset sensitivity increased from December 31, 2024 to December 31, 2025 driven by change in deposit mix and loan growth related to the Transaction.
Economic Value of Equity ("EVE") Sensitivity is conducted to ascertain a longer-term view of the Company’s exposure to changes in interest rates. As with NII modeling, EVE Sensitivity captures product characteristics such as loan resets, repricing terms, maturity and amortization dates, rate caps and floors. Key assumptions include loan prepayment speeds, deposit pricing elasticity and non-maturity deposit attrition rates.
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. All key assumptions are subject to periodic review. Base case EVE Sensitivity is calculated by estimating the net present value of all future cash flows from existing assets and liabilities using current interest rates.
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.
Removed
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk represents the risk of loss to earnings, capital and the economic values of certain assets and liabilities resulting from changes in interest rates and equity prices. The only significant market risk exposure for the Company is Interest Rate Risk (“IRR”).
Added
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.
Removed
This is a result of the Company’s core business activities of making loans and accepting deposits, as well as investments and funding activities. The effective management of IRR is essential to achieving the Company’s financial objectives. This responsibility resides with the Asset Liability Committee (“ALCO”).
Added
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.
Removed
The ALCO’s role is to establish an effective asset/liability decision-making process to aid in managing risk exposures and achieving strategic objectives and corporate financial goals. The Company manages IRR by using two primary risk measurement techniques: simulation of net interest income and simulation of economic value of equity.
Added
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.
Removed
These two measurements are complementary and provide both short-term and long-term risk profiles of the Company. Net Interest Income (“NII”) at Risk Simulation is used to measure the sensitivity of net interest income to changes in market rates over a 12 month period assuming a static balance sheet.
Added
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.
Removed
This simulation captures underlying product behaviors, such as asset and liability repricing dates, balloon dates, interest rate indices and spreads, rate caps and floors, as well as other behavioral attributes.
Added
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.
Removed
The simulation of net interest income also requires a number of key assumptions such as (i) prepayment projections for loans and securities; (ii) new business loan spreads; and (iii) deposit pricing assumptions.
Added
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.
Removed
Combined, these assumptions can be inherently uncertain, and as a result, actual results may differ from simulation forecasts due to the timing, magnitude and frequency of interest rate changes, future business conditions, as well as unanticipated changes in management strategies. The Company uses two sets of standard scenarios to measure NII Sensitivity.
Added
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.
Removed
Parallel shock scenarios assume instantaneous parallel movements in the yield curve compared to a flat yield curve scenario, while twist scenarios assume the shape of the curve flattens or steepens instantaneously.
Added
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.
Removed
The following tables set forth the estimated percent change in the Company’s NII Sensitivity compared to the flat rate scenario over one-year simulation periods beginning December 31, 2024 and December 31, 2023. 67 Table of Contents ITEM 7 - 7A TABLE 3 - QUALITATIVE ASPECTS OF MARKET RISK Parallel Interest Rate Shock (basis points) Estimated Percent Change in Net Interest Income December 31, 2024 December 31, 2023 +200 2.2 % 0.5 % +100 1.2 0.3 -100 (1.4) (0.6) -200 (2.9) (2.1) Yield Curve Twist Interest Rate Shock December 31, 2024 December 31, 2023 Short End +100 (0.4) % (0.5) % Short End -100 0.3 (0.5) Long End +100 1.6 1.1 Long End -100 (1.7) (1.1) The Company’s NII sensitivity results at period-end were mostly little changed from the start of the year, with modest asset sensitivity in parallel shock simulations.
Added
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.
Removed
The slight increase in asset sensitivity year-over-year was due to the impact of the December 2024 $100 million equity raise along with the approaching maturities of some fixed rate hedges in 2025.
Added
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.
Removed
Yield curve twist simulations were mostly little changed from the prior year-end, with slight liability sensitivity in the short end of the yield curve and modest asset sensitivity on the long end.
Added
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.
Removed
In the situation of a normalization of the yield curve to a positive slope due to both lower short-term rates and higher long-term rates, the result is modeled to be positive to net interest income in the framework of a static balance sheet.
Added
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.
Removed
The current spot interest rate curve is shocked up and down. These new interest rate curves are then used to recalculate EVE Sensitivity for rate shock scenarios. The following table sets forth the estimated percent change in the Company’s EVE Sensitivity from the base case scenario, assuming various instantaneous parallel shocks in interest rates.
Added
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.
Removed
CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA The Consolidated Financial Statements and supplementary data required by this item are presented elsewhere in this report beginning on page F-1, in the order shown below: Management’s Report on Internal Control over Financial Reporting Report of Independent Registered Public Accounting Firm (PCAOB ID 173 ) Consolidated Balance Sheets as of December 31, 2024 and 2023 Consolidated Statements of Income for the years ended December 31, 2024, 2023, and 2022 Consolidated Statements of Comprehensive Income/(Loss) for the years ended December 31, 2024, 2023, and 2022 Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2024, 2023, and 2022 Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022 Notes to Consolidated Financial Statements ITEM 9.
Added
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.
Removed
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.
Added
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.
Added
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, 2025.
Added
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. 62 Table of Contents As of December 31, 2025, net interest income simulation indicated that the Company's exposure to changing interest rates was within tolerance.
Added
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.
Added
Estimated Exposure to Net Interest Income over Twelve-Month Horizon Beginning December 31, 2025 December 31, 2024 Gradual Change in Interest Rate Levels Dollar Change Percent Change Dollar Change Percent Change (Dollars in Thousands) Up 400 basis points shock $ 78,074 9.4 % $ 14,574 3.9 % Up 200 basis points ramp 29,174 3.5 % 7,911 2.1 % Up 100 basis points ramp 14,849 1.8 % 4,431 1.2 % Down 100 basis points ramp (14,389) (1.7) % (3,537) (1.0) % Down 200 basis points ramp (30,008) (3.6) % (8,900) (2.4) % Down 400 basis points shock (58,232) (7.0) % (34,637) (9.3) % The estimated impact of a 400 basis points increase in market interest rates on the Company's estimated net interest income over a twelve-month horizon was a positive 9.4% as of December 31, 2025, compared to a positive 3.9% as of December 31, 2024.
Added
The balance sheet became more asset sensitive due to an increase in cash balances and a higher percentage of floating rate loans primarily driven by the Transaction.
Added
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.
Added
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.
Added
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.
Added
The table below shows the Company's interest-rate sensitivity gap position as of December 31, 2025. 63 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 (1) : Short-term investments $ 1,840,188 $ — $ — $ — $ — $ 1,840,188 Weighted average rate 3.64 % — % — % — % — % 3.64 % Investment securities (1) (3) 285,838 198,372 165,566 342,466 696,526 1,688,768 Weighted average rate 2.73 % 2.84 % 2.75 % 2.50 % 2.53 % 2.62 % Commercial real estate loans (1) 5,814,499 1,319,517 1,167,527 1,171,960 538,592 10,012,094 Weighted average rate 5.80 % 5.04 % 5.18 % 5.71 % 5.55 % 5.60 % Commercial loans and leases (1) 2,453,246 491,226 412,966 444,065 145,862 3,947,363 Weighted average rate 6.62 % 7.47 % 7.37 % 7.58 % 5.46 % 6.87 % Consumer loans (1) 1,483,455 447,789 346,800 745,373 1,046,677 4,070,095 Weighted average rate 5.86 % 4.70 % 4.75 % 4.72 % 4.81 % 5.16 % Total interest-earning assets 11,877,225 2,456,904 2,092,858 2,703,864 2,427,657 21,558,507 Weighted average rate 5.57 % 5.29 % 5.35 % 5.34 % 4.36 % 5.35 % Interest-bearing liabilities (1) : NOW accounts $ — $ — $ — $ — $ 1,445,894 $ 1,445,894 Weighted average rate — % — % — % — % 0.92 % 0.92 % Savings accounts — — — — 2,954,029 2,954,029 Weighted average rate — % — % — % — % 1.83 % 1.83 % Money market savings accounts 6,515,306 — — — — 6,515,306 Weighted average rate 2.65 % — % — % — % — % 2.65 % Certificates of deposit (1) 3,856,195 266,649 21,781 11,649 266 4,156,540 Weighted average rate 3.60 % 3.27 % 2.06 % 0.62 % 0.49 % 3.57 % Brokered deposits 404,773 — — — 5,585 410,359 Weighted average rate 4.28 % — % — % — % 4.00 % 4.28 % Borrowed funds (1) 640,043 27,773 2,343 8,697 109,505 788,360 Weighted average rate 4.52 % 3.63 % 1.10 % 0.57 % 4.86 % 4.48 % Total interest-bearing liabilities 11,416,317 294,422 24,124 20,346 4,515,280 16,270,489 Weighted average rate 3.13 % 3.26 % 1.94 % 0.57 % 1.61 % 2.67 % Interest sensitivity gap (2) $ 460,908 $ 2,162,482 $ 2,068,734 $ 2,683,517 $ (2,087,623) $ 5,288,018 Cumulative interest sensitivity gap $ 460,908 $ 2,623,390 $ 4,692,124 $ 7,375,642 $ 5,288,019 Cumulative interest sensitivity gap as a percentage of total assets 1.98 % 11.30 % 20.21 % 31.76 % 22.77 % Cumulative interest sensitivity gap as a percentage of total interest-earning assets 2.14 % 12.17 % 21.76 % 34.21 % 24.53 % _______________________________________________________________________________ (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.
Added
(2) Interest sensitivity gap represents the difference between interest-earning assets and interest-bearing liabilities.
Added
(3) Investment securities include all debt, equity and restricted equity securities and unrealized gains and losses on investment securities. 64 Table of Contents As of December 31, 2025, interest-earning assets maturing or repricing within one year amounted to $11.9 billion and interest-bearing liabilities maturing or repricing within one year amounted to $11.4 billion, resulting in a cumulative one-year positive gap position of $0.5 billion or 2.14% of total interest-earning assets.
Added
As of December 31, 2024, the Company had a cumulative one-year negative gap position of $1.0 billion, or 9.31% of total interest-earning assets. The change in the cumulative one-year gap position from December 31, 2024 was due to an increase of borrowed funds and non-maturity deposits.
Added
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.
Added
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.
Added
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.

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