BBT filing — read by section

Item 9A. Controls and Procedures

ITEM 9A. CONTROLS AND PROCEDURES 
 
 
 The Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a and 15(d) -15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) as of December 31, 2021. Based upon their evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of that date, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”): (1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms; and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. 
 
 
 CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING 
 The Company evaluated changes in its internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the last fiscal quarter. The Company determined that there were no changes that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting. Management’s report on internal control over financial reporting and the independent registered public accounting firm’s report on the Company’s internal control over financial reporting are contained in “Item 8 — Consolidated Financial Statements and Supplementary Data.” 
 
 
 
 
 
 ITEM 9B. OTHER INFORMATION 
 
 
 None. 
 
 
 
 ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS 
 
 
 Not applicable. 
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 PART III 
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 ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND CORPORATE GOVERNANCE 
 
 
 For information concerning the directors of the Company, the information contained under the sections captioned “Proposal 1 - Election of Directors for a One-Year Term” in Berkshire’s Proxy Statement for the 2022 Annual Meeting of Stockholders (“Proxy Statement”) is incorporated by reference. The following table sets forth certain information regarding the executive officers of the Company. 
 
 Name Age Position 
 Nitin J. Mhatre 51 President and Chief Executive Officer of the Company; Chief Executive Officer - Berkshire Bank; Director of Berkshire Hills Bancorp and Berkshire Bank 
 Sean A. Gray 45 Senior Executive Vice President of the Company; President - Berkshire Bank 
 Subhadeep Basu 51 Senior Executive Vice President, Chief Financial Officer of the Company and the Bank 
 George F. Bacigalupo 67 Senior Executive Vice President, Head of Commercial Banking - Berkshire Bank 
 Gregory D. Lindenmuth 54 Senior Executive Vice President, Chief Risk Officer – Berkshire Bank 
 Deborah A. Stephenson 51 Senior Executive Vice President, Regulatory & Compliance- -Berkshire Bank 
 Lucia “Lucy” Bellomia 56 Executive Vice President, Head of Retail Banking – Berkshire Bank 
 Jennifer M. Carmichael 44 Executive Vice President, Chief Internal Audit Officer - Berkshire Bank 
 Jacqueline Courtwright 58 Executive Vice President, Chief Human Resources and Culture Officer – Berkshire Bank 
 Georgia Melas 58 Executive Vice President, Chief Credit Officer – Berkshire Bank 
 Wm. Gordon Prescott 60 Executive Vice President, General Counsel and Corporate Secretary - Berkshire Bank; Corporate Secretary – Berkshire Hills Bancorp 
 
 Ellen Steinfeld 60 Executive Vice President, Head of Consumer Lending & Payments 
 Jason T. White 46 Executive Vice President , Chief Information Officer – Berkshire Bank 

 
 
 The executive officers are elected annually and hold office until their successors have been elected and qualified or until they are removed or replaced. 
 
 
 BIOGRAPHICAL INFORMATION 
 
 
 
 
 Nitin J. Mhatre. Age 51. Mr. Mhatre was appointed to the role of President and Chief Executive Officer of the Company and Chief Executive Officer of the Bank in January 2021. He was also appointed as a Director of the Company and the Bank. Prior to joining the Company, Mr. Mhatre was Executive Vice President, Community Banking, at Webster Bank, where he led consumer and business banking businesses. Before joining Webster in 2009, Mr. Mhatre spent 13 years at Citi Group in various leadership roles across consumer-related businesses globally. 
 
 
 Sean A. Gray. Age 45. Mr. Gray was appointed to the role of Senior Executive Vice President and Chief Operating Officer of the Company and President of the Bank in November 2018. He was previously Senior Executive Vice President of the Company and Chief Operating Officer of the Bank since 2015. Mr. Gray joined the Company in retail banking in 2007 and attained the position of Executive Vice President, Retail Banking. Previously, he was Vice President and Consumer Market Manager at Bank of America, in Waltham, Massachusetts. 

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 Subhadeep Basu, Age 51. Mr. Basu joined the Company in March 2021 as Senior Executive Vice President, Chief Financial Officer. He is responsible for the accounting, treasury, tax, investor relations, procurement/facilities, and capital markets functions. Prior to joining Berkshire, Mr. Basu served as Senior Vice President of Global Institutional Services at State Street. Before joining State Street, he spent more than 15 years at Citigroup, Bank of America, and Ally Financial in various leadership roles across Finance, Treasury, Risk, and Consumer and Commercial Banking. 
 
 
 George F. Bacigalupo. Age 67. Mr. Bacigalupo was promoted to Senior Executive Vice President, Head of Commercial Banking, Berkshire Bank in September 2015, having previously served as an Executive Vice President since October 2013 and Senior Vice President, Chief Credit Officer since 2011. Previously, Mr. Bacigalupo was EVP of Specialty Lending at TD Banknorth, where he established the ABL and other middle-market lending groups. Subsequently, at TD Bank, he was the Senior Lender for New England. 
 
 
 Gregory D. Lindenmuth. Age 54. Mr. Lindenmuth is Senior Executive Vice President, Chief Risk Officer of the Bank, a position he was promoted to in October 2018. Mr. Lindenmuth joined Berkshire in 2016 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. With the FDIC, Mr. Lindenmuth was also a Capital Markets, Mortgage Banking, and Fraud Specialist. 
 
 
 Deborah A. Stephenson. Age 51. Ms. Stephenson is Senior Executive Vice President, Compliance and Regulatory of Berkshire Bank, a position she was promoted to in 2018. Ms. Stephenson joined the Company in 2014. She was previously Senior Vice President at Country Bank where she managed retail banking and human resources. She started her career at the FDIC as a Safety and Soundness and Compliance Examiner. Subsequently, she has held various leadership roles in Compliance, CRA, BSA/AML, Retail Sales/Branch Administration, Human Resources and Training. 
 
 
 Lucia “Lucy” Bellomia, Age 56. Ms. Bellomia is Executive Vice President and Head of Retail Banking. She oversees the retail branch network, branch training, the MyBanker program, Call Center, Branch Operations, Retail Sales and Service Delivery. Prior to joining Berkshire in September 2021, she served as the Executive SVP, PM, Community Banking, Northeast Region, for Bank of America. She previously held positions at the Police and Fire Credit Union in Philadelphia, Santander Bank, PNC Bank, Sun National Bank, and Pioneer Savings and Loans. 
 
 
 Jennifer M. Carmichael, Age 44. Ms. Carmichael was promoted to Executive Vice President, Chief Internal Audit Officer of Berkshire Bank in November 2020. She reports to the Audit Committee of the Board and administratively to the CEO. Ms. Carmichael previously served as Senior Vice President and Audit Manager. She joined the Bank in 2016 from Accume Partners where she served as Senior Audit Manager to several clients in the New York and New England regions, including Berkshire. 
 

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 Jacqueline Courtwright, Age 58. Ms. Courtwright was promoted in September 2020 to Executive Vice President, Chief Human Resources and Culture Officer at Berkshire Bank. She had been appointed as Senior Vice President, Chief Human Resources Officer in July 2019. Prior to joining Berkshire in 2012, Ms. Courtwright was VP, Human Resources Business Partner at Citizen Bank and also held senior human resource roles during her 20 years at KeyBank. 
 
 
 Georgia Melas. Age 58. Ms. Melas is Executive Vice President, Chief Credit Officer of Berkshire Bank, a position she was promoted to in October 2018. Ms. Melas joined Berkshire as Senior Vice President, Chief Credit Officer in 2015 from Key Bank where she held multiple positions including Senior Credit Officer, Commercial Banking. 
 
 
 Wm. Gordon Prescott, Age 60. Mr. Prescott is Executive Vice President, General Counsel and Corporate Secretary of the Bank, a position he was promoted to in October 2018. Mr. Prescott joined Berkshire in 2008 as VP, General Counsel and Corporate Secretary. Mr. Prescott has 30 plus years of experience in the legal profession, including extensive experience as in-house corporate counsel, most recently with KB Toys Inc. prior to joining the Bank. 
 
 
 Ellen Steinfeld, Age 60. Ms. Steinfeld is Executive Vice President and Head of Consumer Lending & Payments. She is responsible for Mortgage Banking sales and operations, Home Equity, Consumer Lending and Payments. Prior to joining Berkshire in September 2021, she was President of Innovative Lending Strategic Solutions LLC. Before her consulting role, she was Managing Director and US Consumer Lending Executive for TIAA-CREF, where she managed Mortgage Lending, Small Business Lending, Consumer Lending. She has also held management positions at Hudson City Savings, Citizens Bank, RBC Wealth Management, and E*TRADE Financial. (Note: Ms. Steinfeld’s stock ownership reports to the SEC are filed under her legal name of Ellen Tulchiner). 
 
 
 Jason T. White, Age 46. Mr. White was promoted to Executive Vice President, Chief Information Officer of Berkshire Bank in November 2020. He previously served as Senior Vice President, Chief Technology Officer since May 2019 when he joined the Bank following the acquisition of Savings Institute Bank & Trust, where he served as Chief Information Officer and Information Security Officer. 
 

 
 
 
 
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 Reference is made to the cover page of this report and to the section captioned “Additional Information - Other Information Relating to Directors and Executive Officers - Delinquent Section 16(a) Reports” in the Proxy Statement for information regarding compliance with Section 16(a) of the Exchange Act. For information concerning the audit committee and the audit committee financial expert, reference is made to the section captioned “Proposal 1 - Election of Directors for a One-Year Term", "Proposal 1 - Election of Directors for One Year Term - Corporate Governance - Committees of the Board of Directors”, and “Proposal 1 - Election of Directors for a One Year Term - Board Committees and Responsibilities" in the Proxy Statement. 
 
 
 For information concerning the Company’s code of ethics, the information contained under the section captioned “Proposal 1 - Election of Directors for a One Year Term - Corporate Governance - Code of Business Conduct and Anonymous Reporting Line Policy” in the Proxy Statement is incorporated herein by reference. 
 
 
 A copy of the Company’s code of ethics is available to stockholders on the Company’s website at: 
 berkshirebank.com under the Investor Relations tab. 
 
 
 
 
 
 ITEM 11. EXECUTIVE COMPENSATION 
 
 
 For information regarding executive compensation, the sections captioned “Proposal 1 - Election of Directors for a One-Year Term”, “Proposal 1 - Election of Directors of a One Year Term - Corporate Governance - Committees of the Board of Directors”, and “Proposal 1 - Election of Directors for a One Year Term - Board Committees and Responsibilities” in the Proxy Statement are incorporated herein by reference. 
 
 
 For information regarding the Compensation Committee Report, the section captioned “Compensation Discussion and Analysis” in the Proxy Statement is incorporated herein by reference. 
 
 
 
 
 
 
 
 ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS 
 
 (a) Security Ownership of Certain Beneficial Owners 
 Information required by this item is incorporated herein by reference to the section captioned “Additional Information - Stock Ownership” in the Proxy Statement. 
 
 (b) Security Ownership of Management 
 Information required by this item is incorporated herein by reference to the section captioned “Additional Information - Stock Ownership” in the Proxy Statement. 
 
 
 (c) Changes in Control 
 Management of Berkshire knows of no arrangements, including any pledge by any person of securities of Berkshire, the operation of which may at a subsequent date result in a change in control of the registrant. 
 
 (d) Equity Compensation Plan Information 
 The following table sets forth information, as of December 31, 2021, about Company common stock that may be issued upon exercise of options under stock-based benefit plans maintained by the Company, as well as the number of securities available for issuance under equity compensation plans: 
 
 Plan category Number of securities
to be issued upon
exercise of
outstanding options, warrants and rights Weighted-average
exercise price of
outstanding options, warrants and rights Number of securities
remaining available for
future issuance under
equity compensation plans
(excluding securities reflected in the first column) 
 Equity compensation plans approved by security holders 
 80,400 $ 25.21 536,469 
 Equity compensation plans not approved by security holders 
 — — — 
 
 Total 80,400 $ 25.21 536,469 

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 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE 
 
 
 The information required by this item is incorporated herein by reference to the sections captioned “Additional Information - Other Information Relating to Directors and Executive Officers - Transactions with Related Persons" and “Additional Information - Other Information Relating to Directors and Executive Officers - Procedures Governing Related Persons Transactions” in the Proxy Statement. Information regarding director independence is incorporated herein by reference to the section “Proposal 1 - Election of Directors for a One Year Term” in the Proxy Statement. 
 
 
 
 
 
 ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 
 
 
 The information required by this item is incorporated herein by reference to the section captioned “Proposal 3 — Ratification of the Appointment of the Independent Registered Public Accounting Firm” in the Proxy Statement. 
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 PART IV 
 
 
 
 ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES 
 
 
 (a) [1] Consolidated Financial Statements 
 • Report of Independent Registered Public Accounting Firm 
 • Consolidated Balance Sheets as of December 31, 2021 and 2020 
 • Consolidated Statements of Operations for the Years Ended December 31, 2021, 2020, and 2019 
 • Consolidated Statements of Comprehensive Income/(Loss) for the Years Ended December 31, 2021, 2020, and 2019 
 • Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2021, 2020, and 2019 
 • Consolidated Statements of Cash Flows for the Years Ended December 31, 2021, 2020, and 2019 
 • Notes to Consolidated Financial Statements 
 The Consolidated Financial Statements required to be filed in our Annual Report on Form 10-K are included in Part II, Item 8 hereof. 
 
 
 [2] Financial Statement Schedules 
 
 
 All financial statement schedules are omitted because the required information is either included or is not applicable. 
 
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 [3] Exhibits 
 
 3.1 Certificate of Incorporation of Berkshire Hills Bancorp, Inc. (1) 
 
 3.2 Amended and Restated Bylaws of Berkshire Hills Bancorp, Inc. (2) 
 
 3.3 Certificate of Amendment to the Certificate of Incorporation of Berkshire Hills Bancorp, Inc. (3) 
 
 3.4 Certificate of Designations of the Series B Non-Voting Preferred Stock (4) 
 
 4.1 Form of Common Stock Certificate of Berkshire Hills Bancorp, Inc. (1) 
 
 4.2 Note Subscription Agreement by and among Berkshire Hills Bancorp, Inc. and certain subscribers dated September 20, 2012 (5) 
 
 4.3 Description of Berkshire Hills Bancorp, Inc. Securities ( 6) 
 
 10.1 Three-Year Employment Agreement by and among Berkshire Hills Bancorp, Inc., Berkshire Bank and Nitin J. Mhatre ( 7 ) 
 
 10.2 Berkshire Bank Supplemental Executive Retirement Agreement entered into with Nitin J. Mhatre ( 8 ) 
 
 10.3 Amended and Restated Three Year Change in Control Agreement by and among Berkshire Hills Bancorp, Inc., Berkshire Bank and Sean A. Gray (9) 
 
 10.4 Supplemental Executive Retirement Agreement between Berkshire Bank and Sean A. Gray ( 10 ) 
 
 10.5 Three Year Executive Change in Control Agreement by and among Berkshire Hills Bancorp, Inc. Berkshire Bank and George F. Bacigalupo (11) 
 
 10.6 Berkshire Bank Enhanced Change in Control Severance Plan (Gregory D. Lindenmuth and Deborah Stephenson) (12) 
 
 10.7 Form of Split Dollar Agreement entered into with Sean A. Gray (13) 
 
 10.8 Berkshire Bank Executive Long-Term Care Insurance Plan (14) 
 
 10.9 Berkshire Hills Bancorp, Inc. 2018 Equity Incentive Plan (15) 
 
 10.10 Senior Executive Short Term Incentive Plan (16) 
 
 21.0 Subsidiary Information 
 
 23.1 Consent of Crowe LLP 
 
 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 
 
 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 
 
 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 
 
 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 
 
 101 Interactive data files pursuant to Rule 405 of Regulation S-T: (i) the Consolidated Statements of Condition, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income, (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements tagged as blocks of text and in detail 

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

 
 
 
 
 
 
 
 ITEM 16. FORM 10-K SUMMARY 
 
 
 None. 
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 SIGNATURES 
 
 
 Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. 
 
 Berkshire Hills Bancorp, Inc. 
 Date: March 1, 2022 By: /s/ Nitin J. Mhatre 
 Nitin J. Mhatre 
 President & Chief Executive Officer 

 Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. 
 
 /s/ Nitin J. Mhatre Director, President, & Chief Executive Officer March 1, 2022 
 Nitin J. Mhatre (principal executive officer) 
 /s/ Subhadeep Basu Senior Executive Vice President, Chief Financial Officer March 1, 2022 
 Subhadeep Basu (principal financial and accounting officer) 
 /s/ David M. Brunelle Chairperson March 1, 2022 
 David M. Brunelle 
 /s/ Baye Adofo-Wilson Director March 1, 2022 
 Baye Adofo-Wilson 
 /s/ Rheo A. Brouillard Director March 1, 2022 
 Rheo A. Brouillard 
 /s/ Nina A. Charnley Director March 1, 2022 
 Nina A. Charnley 
 /s/ John B. Davies Director March 1, 2022 
 John B. Davies 
 /s/ William H. Hughes, III Director March 1, 2022 
 William H. Hughes, III 
 /s/ Jeffrey W. Kip Director March 1, 2022 
 Jeffrey W. Kip 
 /s/ Sylvia Maxfield Director March 1, 2022 
 Sylvia Maxfield 
 /s/ Laurie Norton Moffatt Director March 1, 2022 
 Laurie Norton Moffatt 
 /s/ Jonathan I. Shulman Director March 1, 2022 
 Jonathan I. Shulman 
 /s/ Michael A. Zaitzeff Director March 1, 2022 
 Michael A. Zaitzeff 

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 ITEM 8. CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 
 
 
 
 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING 
 
 
 The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting is a process designed under the supervision of the Company’s Chief Executive Officer and Chief Financial Officer to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the Company’s Consolidated Financial Statements for external reporting purposes in accordance with generally accepted accounting principles. 
 
 
 As of December 31, 2021, management conducted an assessment of the effectiveness of the Company’s internal control over financial reporting based on the framework established in Internal Control—Integrated Framework issued in 2013, by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2021 was effective. 
 
 
 The Company’s internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements. 
 
 
 The effectiveness of the Company’s internal control over financial reporting as of December 31, 2021 has been audited by Crowe LLP, an independent registered public accounting firm, as stated in their report, which follows. This report expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021. 
 
 
 
 
 /s/ Nitin J. Mhatre /s/ Subhadeep Basu 
 Nitin J. Mhatre Subhadeep Basu 
 President & Chief Executive Officer Senior Executive Vice President & Chief Financial Officer 
 March 1, 2022 March 1, 2022 

 
 
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 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 
 
 
 
 
 
 
 Shareholders and the Board of Directors 
 of Berkshire Hills Bancorp, Inc. 
 Boston, Massachusetts 
 
 
 
 
 Opinions on the Financial Statements and Internal Control over Financial Reporting 
 
 
 We have audited the accompanying consolidated balance sheets of Berkshire Hills Bancorp, Inc. (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income/(loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2021, and the related notes (collectively referred to as the "financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework: (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 
 
 
 In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO. 
 
 
 Change in Accounting Principle 
 
 
 As discussed in Note 1 to the consolidated financial statements, the Company has changed its method of accounting for credit losses effective January 1, 2020 due to the adoption of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification No. 326, Financial Instruments – Credit Losses (“ASC 326”). The Company adopted the new credit loss standard using the modified retrospective method such that prior period amounts are not adjusted and continue to be reported in accordance with previously applicable generally accepted accounting principles. 
 
 
 Basis for Opinions 
 
 
 The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 
 
 
 
 
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material 
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 misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. 
 
 
 Our audits of the financial statements included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. 
 
 
 Definition and Limitations of Internal Control Over Financial Reporting 
 
 
 A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 
 
 
 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 
 
 
 Critical Audit Matter 
 
 
 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 
 
 
 Allowance for Credit Losses for loans 
 
 
 The estimate of expected credit losses is based on relevant information about current conditions, past events, and reasonable and supportable forward-looking forecasts regarding collectability of the reported amounts. In order to estimate the expected credit losses for loans evaluated on a pooled basis, the Company utilizes a static pool migration methodology which calculates a historical loss rate for each of the identified loan segments. The historical loss rates are then adjusted for current and asset specific characteristics (also referred to as qualitative adjustments) and for expected changes to current conditions over the reasonable and supportable forecast period (also referred to as forecast). Each of these key components of the allowance for credit loss calculation is complex and requires a high volume of data input. 
 
 
 
 
 Auditing the allowance for credit losses was especially challenging and identified by us as a critical audit matter given the high volume of data inputs and judgements made by management. Auditing the allowance for credit loss calculation involved significant audit effort, including the involvement of experienced audit personnel. 
 
 
 The primary procedures we performed to address this critical audit matter included: 
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 Testing the effectiveness of internal controls over management’s allowance for credit loss calculation including the design and operating effectiveness to address: 
 
 
 • Completeness and accuracy of the reports utilized within the allowance for credit loss calculation. 
 • The mathematical accuracy of the allowance for credit loss calculation. 
 • The accuracy of application of information within the allowance for credit loss calculation. 
 • Significant assumptions and judgements applied within the allowance for credit loss calculation. 
 
 
 Substantively testing management’s process to estimate the allowance for credit loss calculation included: 
 
 
 • Testing the completeness and accuracy of the underlying internal data utilized to prepare the calculation. 
 • Evaluating the relevance and reliability of the underlying external data utilized to prepare the calculation. 
 • Testing the mathematical accuracy, including the application of data and assumptions, of the allowance for credit loss calculation. 
 • The reasonableness of the significant judgements and assumptions utilized within the allowance for credit loss calculation. 
 
 
 
 
 
 
 /s/ Crowe LLP 
 
 
 We have served as the Company's auditor since 2017. 
 
 
 New York, New York 
 March 1, 2022 
 
 
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 BERKSHIRE HILLS BANCORP, INC. 
 CONSOLIDATED BALANCE SHEETS 

 
 December 31, 
 (In thousands, except share data) 2021 2020 
 Assets 
 Cash and due from banks $ 109,350 $ 91,219 
 Short-term investments 1,518,457 1,466,656 
 Total cash and cash equivalents 1,627,807 1,557,875 
 
 Trading security 8,354 9,708 
 Marketable equity securities, at fair value 15,453 18,513 
 Securities available for sale, at fair value 1,877,585 1,695,232 
 Securities held to maturity (fair values of $ 647,236 in 2021 and $ 491,855 in 2020) 
 636,503 465,091 
 Federal Home Loan Bank stock and other restricted securities 10,800 34,873 
 Total securities 2,548,695 2,223,417 
 Less: Allowance for credit losses on investment ( 105 ) ( 104 ) 
 Net Securities 2,548,590 2,223,313 
 
 Loans held for sale 6,110 17,748 
 
 
 
 
 
 Total loans 6,825,847 8,081,519 
 Less: Allowance for credit losses on loans ( 106,094 ) ( 127,302 ) 
 Net loans 6,719,753 7,954,217 
 
 Premises and equipment, net 94,383 112,663 
 Other real estate owned — 149 
 
 Other intangible assets 29,619 34,819 
 Cash surrender value of bank-owned life insurance 235,690 232,695 
 
 Other assets 288,384 387,230 
 Assets held for sale 4,577 317,304 
 
 Total assets $ 11,554,913 $ 12,838,013 
 
 Liabilities 
 Demand deposits $ 3,008,461 $ 2,484,249 
 NOW and other deposits 976,401 1,003,005 
 Money market deposits 3,293,526 3,371,353 
 Savings deposits 1,111,625 972,116 
 Time deposits 1,678,940 2,385,085 
 Total deposits 10,068,953 10,215,808 
 Short-term debt — 40,000 
 Long-term Federal Home Loan Bank advances 13,331 434,357 
 Subordinated notes 97,513 97,280 
 Total borrowings 110,844 571,637 
 Other liabilities 192,681 232,730 
 Liabilities held for sale — 630,065 
 
 Total liabilities 10,372,478 11,650,240 
 
 
 

 (continued) 
 
 December 31, 
 (In thousands, except share data) 2021 2020 
 Shareholders’ equity 
 
 Common stock ($ 0.01 par value; 100,000,000 shares authorized and 51,903,190 shares issued and 48,667,110 shares outstanding in 2021; 100,000,000 shares authorized; 51,903,190 shares issued, and 50,833,087 shares outstanding in 2020) 
 $ 528 $ 528 
 Additional paid-in capital - common stock 1,423,445 1,427,239 
 Unearned compensation ( 9,056 ) ( 6,245 ) 
 Retained (deficit) ( 139,383 ) ( 233,344 ) 
 Accumulated other comprehensive income/(loss) ( 3,243 ) 30,871 
 Treasury stock, at cost ( 3,236,080 shares in 2021 and 1,070,103 shares in 2020) 
 ( 89,856 ) ( 31,276 ) 
 Total shareholders’ equity 1,182,435 1,187,773 
 Total liabilities and shareholders’ equity $ 11,554,913 $ 12,838,013 

 The accompanying notes are an integral part of these consolidated financial statements. 
 F-5 

 
 Table of Contents 
 BERKSHIRE HILLS BANCORP, INC. 
 CONSOLIDATED STATEMENTS OF OPERATIONS 

 
 Years Ended December 31, 
 (In thousands) 2021 2020 2019 
 Interest and dividend income 
 Loans $ 282,164 $ 358,015 $ 448,927 
 Securities and other 46,901 51,767 60,586 
 Total interest and dividend income 329,065 409,782 509,513 
 Interest expense 
 Deposits 27,236 72,715 115,193 
 Borrowings and subordinated notes 10,663 20,285 29,062 
 Total interest expense 37,899 93,000 144,255 
 Net interest income 291,166 316,782 365,258 
 Non-interest income 
 Deposit related fees 29,813 27,905 31,352 
 Loan fees and revenue 35,060 16,840 24,374 
 Insurance commissions and fees 7,003 10,770 10,957 
 Wealth management fees 10,530 9,285 9,353 
 Mortgage banking income 2,056 5,190 788 
 Total fee income 84,462 69,990 76,824 
 Other 6,631 2,597 1,438 
 (Loss)/gain on securities, net ( 787 ) ( 7,520 ) 4,389 
 Gain on sale of business operations and assets, net 52,942 1,240 1,351 
 
 Total non-interest income 143,248 66,307 84,002 
 Total net revenue 434,414 383,089 449,260 
 Provision (benefit) for credit losses ( 500 ) 75,878 35,419 
 Non-interest expense 
 Compensation and benefits 150,589 147,840 140,906 
 Occupancy and equipment 41,782 43,359 39,586 
 Technology and communications 33,803 32,364 26,523 
 Marketing and promotion 2,749 3,703 4,474 
 Professional services 15,860 11,907 10,798 
 FDIC premiums and assessments 3,759 5,876 3,861 
 Other real estate owned and foreclosures 17 125 154 
 Amortization of intangible assets 5,200 6,181 5,783 
 Goodwill impairment — 553,762 — 
 Merger, restructuring and conversion related expenses 5,781 5,839 28,046 
 Other 26,353 29,283 29,726 
 Total non-interest expense 285,893 840,239 289,857 
 Income/(loss) from continuing operations before income taxes 149,021 ( 533,028 ) 123,984 
 Income tax expense/(benefit) from continuing operations 30,357 ( 19,853 ) 22,463 
 Net income/(loss) from continuing operations 118,664 ( 513,175 ) 101,521 
 
 (Loss) from discontinued operations before income taxes — ( 26,855 ) ( 5,539 ) 
 Income tax (benefit) from discontinued operations — ( 7,013 ) ( 1,468 ) 
 Net (loss) from discontinued operations — ( 19,842 ) ( 4,071 ) 
 
 Net income/(loss) $ 118,664 $ ( 533,017 ) $ 97,450 
 Preferred stock dividend — 313 960 
 Income/(loss) available to common shareholders $ 118,664 $ ( 533,330 ) $ 96,490 
 
 Years Ended December 31, 
 (in thousands, except per share data) 2021 2020 2019 
 Basic earnings/(loss) per share: 
 Continuing Operations $ 2.41 $ ( 10.21 ) $ 2.06 
 Discontinued operations — ( 0.39 ) ( 0.08 ) 
 Total basic earnings/(loss) per share $ 2.41 $ ( 10.60 ) $ 1.98 
 
 Diluted earnings/(loss) per share: 
 Continuing Operations $ 2.39 $ ( 10.21 ) $ 2.05 
 Discontinued operations — ( 0.39 ) ( 0.08 ) 
 Total diluted earnings/(loss) per share $ 2.39 $ ( 10.60 ) $ 1.97 
 
 Weighted average common shares outstanding: 
 Basic 49,240 50,270 49,263 
 Diluted 49,554 50,270 49,421 

 The accompanying notes are an integral part of these consolidated financial statements. 
 F-6 

 
 Table of Contenets 
 BERKSHIRE HILLS BANCORP, INC. 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS) 

 
 Years Ended December 31, 
 (In thousands) 2021 2020 2019 
 Net income/(loss) $ 118,664 $ ( 533,017 ) $ 97,450 
 Other comprehensive (loss)/income, before tax: 
 Changes in unrealized gains and losses on securities available-for-sale ( 46,794 ) 25,726 34,530 
 
 
 Changes in unrealized gains and losses on pension 993 ( 489 ) ( 270 ) 
 Total other comprehensive (loss)/income, before tax ( 45,801 ) 25,237 34,260 
 Income taxes related to other comprehensive (loss)/income: 
 Changes in unrealized gains and losses on securities available-for-sale 11,937 ( 6,471 ) ( 8,873 ) 
 
 
 Changes in unrealized gains and losses on pension ( 250 ) 112 76 
 Total income tax benefit/(expense) related to other comprehensive income (loss) 11,687 ( 6,359 ) ( 8,797 ) 
 Total other comprehensive (loss)/income ( 34,114 ) 18,878 25,463 
 Total comprehensive income/(loss) $ 84,550 $ ( 514,139 ) $ 122,913 

 The accompanying notes are an integral part of these consolidated financial statements. 
 
 
 F-7 

 
 Table of Contents 
 BERKSHIRE HILLS BANCORP, INC. 
 CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY 

 
 Preferred Stock Common Stock Additional paid-in Unearned Retained
(deficit) Accumulated other comprehensive Treasury 
 (In thousands, except per share data) Shares Amount Shares Amount capital compensation earnings (loss) income stock Total 
 Balance at January 1, 2019 522 $ 40,633 45,417 $ 460 $ 1,245,013 $ ( 6,594 ) $ 308,839 $ ( 13,470 ) $ ( 21,963 ) $ 1,552,918 
 
 Comprehensive income: 
 Net income — — — — — — 97,450 — — 97,450 
 Other net comprehensive (loss) — — — — — — — 25,463 — 25,463 
 Total comprehensive income — — — — — — 97,450 25,463 — 122,913 
 Acquisition of SI Financial Group, Inc. — — 5,691 57 176,655 — — — — 176,712 
 Cash dividends declared on common shares ($ 0.92 per share) 
 — — — — — — ( 44,147 ) — — ( 44,147 ) 
 Cash dividends declared on preferred shares ($ 1.84 per share) 
 — — — — — — ( 960 ) — — ( 960 ) 
 Treasury stock purchased — — ( 1,726 ) — — — — — ( 52,746 ) ( 52,746 ) 
 Forfeited shares — — ( 65 ) — ( 251 ) 2,160 — — ( 1,909 ) — 
 Exercise of stock options — — 11 — — — ( 100 ) — 288 188 
 Restricted stock grants — — 299 — 932 ( 8,843 ) — — 7,911 — 
 Stock-based compensation — — — — — 4,812 — — — 4,812 
 
 Other, net — — ( 42 ) — 92 — — — ( 1,218 ) ( 1,126 ) 
 Balance at December 31, 2019 522 $ 40,633 49,585 $ 517 $ 1,422,441 $ ( 8,465 ) $ 361,082 $ 11,993 $ ( 69,637 ) $ 1,758,564 
 
 Comprehensive income: 0 
 Net (loss) — — — — — — ( 533,017 ) — — ( 533,017 ) 
 Other net comprehensive income — — — — — — — 18,878 — 18,878 
 Total comprehensive (loss) — — — — — — ( 533,017 ) 18,878 — ( 514,139 ) 
 Impact of ASC 326 Adoption — — — — — — ( 24,380 ) — — ( 24,380 ) 
 Conversion of preferred stock to common stock ( 522 ) ( 40,633 ) 1,043 11 10,395 — — — 30,227 — 
 Cash dividends declared on common shares ($ 0.72 per share) 
 — — — — — — ( 36,251 ) — — ( 36,251 ) 
 Cash dividends declared on preferred shares ($ 1.20 per share) 
 — — — — — — ( 313 ) — — ( 313 ) 
 Treasury stock purchased — — ( 14 ) — — — — — ( 473 ) ( 473 ) 
 Forfeited shares — — ( 91 ) — ( 1,570 ) 2,727 — — ( 1,157 ) — 
 Exercise of stock options — — 37 — — — ( 465 ) — 1,129 664 
 Restricted stock grants — — 314 — ( 4,121 ) ( 5,234 ) — — 9,355 — 
 Stock-based compensation — — — — — 4,727 — — — 4,727 
 Other, net — — ( 41 ) — 94 — — — ( 720 ) ( 626 ) 
 Balance at December 31, 2020 — $ — 50,833 $ 528 $ 1,427,239 $ ( 6,245 ) $ ( 233,344 ) $ 30,871 $ ( 31,276 ) $ 1,187,773 
 
 Comprehensive income: 
 Net income — — — — — — 118,664 — — 118,664 
 Other net comprehensive (loss) — — — — — — — ( 34,114 ) — ( 34,114 ) 
 Total comprehensive income — — — — — — 118,664 ( 34,114 ) — 84,550 
 
 
 Cash dividends declared common shares ($ 0.48 per share) 
 — — — — — — ( 24,553 ) — — ( 24,553 ) 
 
 Treasury stock purchased — — ( 2,500 ) — — — — — ( 68,712 ) ( 68,712 ) 
 Forfeited shares — — ( 113 ) — 90 2,644 — — ( 2,734 ) — 
 Exercise of stock options — — 20 — — — ( 150 ) — 567 417 
 Restricted stock grants — — 476 — ( 3,898 ) ( 9,625 ) — — 13,523 — 
 Stock-based compensation — — — — — 4,170 — — — 4,170 
 Other, net — — ( 49 ) — 14 — — — ( 1,224 ) ( 1,210 ) 
 Balance at December 31, 2021 — $ — 48,667 $ 528 $ 1,423,445 $ ( 9,056 ) $ ( 139,383 ) $ ( 3,243 ) $ ( 89,856 ) $ 1,182,435 

 The accompanying notes are an integral part of these consolidated financial statements. 
 F-8 

 
 Table of Contents 
 BERKSHIRE HILLS BANCORP, INC. 
 CONSOLIDATED STATEMENTS OF CASH FLOWS 

 
 Years Ended December 31, 
 (In thousands) 2021 2020 2019 
 Cash flows from operating activities: 
 Net income/(loss) from continuing operations 118,664 ( 513,175 ) 101,521 
 Net (loss) from discontinued operations — ( 19,842 ) ( 4,071 ) 
 Net income/(loss) $ 118,664 $ ( 533,017 ) $ 97,450 
 Adjustments to reconcile net income to net cash provided by operating activities: 
 Provision (benefit) for credit losses ( 500 ) 75,878 35,419 
 Net amortization of securities 1,939 2,513 2,407 
 Change in unamortized net loan origination costs and premiums ( 1,918 ) 21,856 12,759 
 Premises and equipment depreciation and amortization expense 11,035 11,919 10,921 
 Stock-based compensation expense 4,170 4,727 4,812 
 Accretion of purchase accounting entries, net ( 6,577 ) ( 10,377 ) ( 14,813 ) 
 Amortization of other intangibles 5,200 6,181 5,783 
 
 Income from cash surrender value of bank-owned life insurance policies ( 5,561 ) ( 5,354 ) ( 5,349 ) 
 Securities losses/(gains), net 787 7,576 ( 4,389 ) 
 Net change in loans held-for-sale 5,775 ( 4,267 ) ( 5,137 ) 
 
 
 Loss on disposition of assets 2,811 327 3,443 
 Loss on sale of real estate 6 13 5 
 Amortization of interest in tax-advantaged projects 3,444 3,645 6,455 
 
 Goodwill impairment — 553,762 — 
 Gain on sale of business operations and other assets ( 52,942 ) — — 
 Prepayment penalties on repayment of Federal Home Loan Bank advances 862 — — 
 Net change in other 18,282 ( 31,247 ) ( 23,418 ) 
 Net cash provided by operating activities of continuing operations 105,477 123,977 130,419 
 Net cash provided/(used) by operating activities of discontinued operations — 103,664 ( 18,894 ) 
 Net cash provided by operating activities 105,477 227,641 111,525 
 
 Cash flows from investing activities: 
 Net decrease in trading security 776 734 701 
 Purchases of marketable equity securities — ( 17,631 ) ( 23,841 ) 
 Proceeds from sales of marketable equity securities 2,880 33,928 43,075 
 Purchases of securities available for sale ( 804,616 ) ( 885,182 ) ( 119,671 ) 
 Proceeds from sales of securities available for sale — 69,337 136,229 
 Proceeds from maturities, calls, and prepayments of securities available for sale 575,538 457,586 240,586 
 Purchases of securities held to maturity ( 219,470 ) ( 144,651 ) ( 7,260 ) 
 Proceeds from maturities, calls, and prepayments of securities held to maturity 46,061 35,331 21,602 
 Net change in loans 1,262,521 1,054,029 694,657 
 Net change in Mid-Atlantic region loans held for sale 50,914 — — 
 Acquisitions, net of cash paid — — 110,774 
 Proceeds from surrender of bank-owned life insurance 2,566 553 2,451 
 
 Purchase of Federal Home Loan Bank stock — ( 6,741 ) ( 112,208 ) 
 Proceeds from sales of Federal Home Loan Bank stock 24,078 19,887 149,455 
 Net investment in limited partnership tax credits ( 2,878 ) ( 7,280 ) ( 4,387 ) 
 Purchase of premises and equipment, net ( 1,606 ) ( 7,208 ) ( 10,565 ) 
 (Continued) 

 F-9 

 Table of Contents 
 BERKSHIRE HILLS BANCORP, INC. 
 CONSOLIDATED STATEMENTS OF CASH FLOWS (CONCLUDED) 
 
 

 
 Years ended December 31, 
 (In thousands) 2021 2020 2019 
 Proceeds from sales of seasoned commercial loan portfolios 16,417 37,988 81,147 
 
 Proceeds from sales of other real estate owned 187 171 150 
 Cash outflows from sale of business operations and other assets ( 352,814 ) — — 
 Net investing cash flows provided/(used) by discontinued operations — 252 ( 313 ) 
 Net cash provided by investing activities 600,554 641,103 1,202,582 
 
 Cash flows from financing activities: 
 Net increase in deposits $ ( 154,052 ) $ 499,657 $ 23,996 
 Net change in Mid-Atlantic region deposits held for sale 20,953 — — 
 Proceeds from Federal Home Loan Bank advances and other borrowings — 326,277 5,384,982 
 Repayments of Federal Home Loan Bank advances and other borrowings ( 462,059 ) ( 582,648 ) ( 6,228,780 ) 
 
 Purchase of treasury stock ( 68,712 ) ( 473 ) ( 52,746 ) 
 Exercise of stock options 417 664 188 
 Common and preferred stock cash dividends paid ( 24,553 ) ( 36,564 ) ( 45,107 ) 
 Settlement of derivative contracts with financial institution counterparties 51,907 ( 97,611 ) — 
 
 Net cash (used)/provided by financing activities ( 636,099 ) 109,302 ( 917,467 ) 
 
 Net change in cash and cash equivalents 69,932 978,046 396,640 
 
 Cash and cash equivalents at beginning of year 1,557,875 579,829 183,189 
 
 Cash and cash equivalents at end of year $ 1,627,807 $ 1,557,875 $ 579,829 
 
 Supplemental cash flow information: 
 Interest paid on deposits $ 29,606 $ 82,319 $ 119,695 
 Interest paid on borrowed funds 11,385 21,277 33,406 
 Income taxes (refunded)/paid, net 14,816 ( 13,864 ) 19,818 
 
 Acquisition of non-cash assets and liabilities: 
 Assets acquired — — 1,595,054 
 Liabilities assumed — — ( 1,530,010 ) 
 
 Other non-cash changes: 
 Other net comprehensive income/(loss) ( 34,114 ) 18,878 25,463 
 Impact to retained earnings from adoption of ASC 326, net of tax — 24,380 — 
 Mid-Atlantic assets reclassified to held for sale — 317,304 — 
 Mid- Atlantic liabilities reclassified to held for sale — 630,065 — 
 Reclass of Mid-Atlantic loans held-for-sale to portfolio loans, net 29,418 — — 
 Reclass of Mid-Atlantic deposits held-for-sale to deposits, net 7,197 — — 
 Reclass of seasoned loan portfolios to held-for-sale, net 11,660 14,845 120,307 
 Reclass of premises and equipment to held-for-sale 4,577 — — 
 Real estate owned acquired in settlement of loans — 224 — 
 

 The accompanying notes are an integral part of these consolidated financial statements. 
 F-10 

 
 Table of Contents 
 
 

 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 
 
 Years Ended December 31, 2021, 2020, and 2019 
 
 
 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
 
 Basis of Presentation and Consolidation 
 The Consolidated Financial Statements (the “financial statements”) of Berkshire Hills Bancorp, Inc. and its subsidiaries (the “Company” or “Berkshire”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Delaware corporation, headquartered in Boston, Massachusetts, and the holding company for Berkshire Bank (the “Bank”), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts. These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank’s consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise. 
 
 
 The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued. 
 
 
 Reclassifications 
 Certain items in prior financial statements have been reclassified to conform to the current presentation. 
 
 
 Use of Estimates 
 The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates. 
 
 
 Refer to Note 18 – Other Commitments, Contingencies, and Off-Balance Sheet Activities for pandemic related risks and uncertainties. 
 
 
 Business Combinations 
 Business combinations are accounted for using the acquisition method of accounting. Under this method, the accounts of an acquired entity are included with the acquirer’s accounts as of the date of acquisition with any excess of purchase price over the fair value of the net assets acquired (including identifiable intangibles) capitalized as goodwill. 
 
 
 To consummate an acquisition, the Company will typically issue common stock and/or pay cash, depending on the terms of the acquisition agreement. The value of common shares issued is determined based upon the market price of the stock as of the closing of the acquisition. 
 
 
 Cash and Cash equivalents 
 Cash and cash equivalents include cash, balances due from banks, and short-term investments, all of which had an original maturity within 90 days. Due to the nature of cash and cash equivalents and the near term maturity, the Company estimated that the carrying amount of such instruments approximated fair value. The nature of the Bank’s business requires that it maintain amounts due from banks which at times, may exceed federally insured limits. The Bank has not experienced any losses on such amounts and all amounts are maintained with well-capitalized institutions. 
 
 
 Trading Security 
 The Company accounts for a tax advantaged economic development bond originated in 2008 at fair value, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 320. The bond has been designated as a trading account security and is recorded at fair value, with changes in unrealized gains and losses recorded through earnings each period as part of non-interest income. 
 F-11 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Securities 
 Debt securities that management has the intent and ability to hold to maturity are classified as held to maturity and carried at amortized cost. All other debt securities are classified as available for sale and carried at fair value, with unrealized gains and losses reported as a component of other net comprehensive income. Equity securities are carried at fair value, with changes in fair value reported in net income. Management determines the appropriate classification of securities at the time of purchase. Restricted equity securities, such as stock in the Federal Home Loan Bank of Boston (“FHLBB”) are carried at cost. There are no quoted market prices for the Company’s restricted equity securities. The Bank is a member of the FHLBB, which requires that members maintain an investment in FHLBB stock, which may be redeemed based on certain conditions. The Bank reviews for impairment based on the ultimate recoverability of the cost bases in the FHLBB stock. 
 
 
 Purchase premiums and discounts are recognized in interest income using the interest method, without anticipating prepayments, except mortgage-backed securities where prepayments are anticipated, over the terms of the securities. Premiums on callable debt securities are amortized to their earliest call date. Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific identification method. 
 
 
 The Company measures expected credit losses on held to maturity debt securities on a collective basis. Accrued interest receivable on held to maturity debt securities is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. 
 
 
 The Company evaluates available for sale debt securities in an unrealized loss position by first assessing whether it intends to sell or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For available for sale debt securities that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, the Company considers the extent to which fair value is less than amortized cost, any changes to the rating of security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security are compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, a credit loss exists and an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. 
 
 
 Loans Held for Sale 
 Loans originated with the intent to be sold in the secondary market are accounted for under the fair value option. Non-refundable fees and direct loan origination costs related to residential mortgage loans held for sale are recognized in non-interest income or non-interest expense as earned or incurred. Fair value is primarily determined based on quoted prices for similar loans in active markets. Gains and losses on sales of residential mortgage loans (sales proceeds minus carrying value) are recorded in non-interest income. 
 
 
 Loans that were previously held for investment that the Company has an active plan to sell are transferred to loans held for sale at the lower of cost or market (fair value). The market price is primarily determined based on quoted prices for similar loans in active markets or agreed upon sales prices. Gains are recorded in non-interest income at sale to the extent that the sale price of the loan exceeds carrying value. Any reduction in the loan’s value, prior to being transferred to loans held for sale, is reflected as a charge-off of the recorded investment in the loan resulting in a new cost basis, with a corresponding reduction in the allowance for credit losses. Further decreases in the fair value of the loan are recognized in non-interest expense. 
 F-12 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Loans 
 Loans are reported at their amortized cost. Amortized cost is the principal balance outstanding, net of the unamortized balance of any deferred fees or costs and the unamortized balance of any premiums or discounts on loans purchased or acquired through mergers. Interest income is accrued on the unpaid principal balance. Interest income includes net accretion or amortization of deferred fees or costs and of premiums or discounts. Direct loan origination costs, net of any origination fees, in addition to premiums and discounts on loans, are deferred and recognized as an adjustment of the related loan yield using the interest method. Interest on loans, excluding automobile loans, is generally not accrued on loans which are ninety days or more past due unless the loan is well-secured and in the process of collection. Past due status is based on contractual terms of the loan. Automobile loans generally continue accruing until one hundred and twenty days delinquent, at which time they are charged off. All interest accrued but not collected for loans that are placed on non-accrual or charged-off is reversed against interest income, except for certain loans designated as well-secured. The interest on non-accrual loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. 
 
 
 Purchase Credit Deteriorated (PCD) Loans 
 Loans that the Company acquired in acquisitions include some loans that have experienced more than insignificant credit deterioration since origination. PCD loans are recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through provision expense . 
 
 
 Allowance for Credit Losses for Loans 
 The allowance for credit losses for loans (“ACLL”) is comprised of the allowance for loan losses and the allowance for unfunded commitments which is accounted for as a separate liability in other liabilities on the consolidated balance sheet. The ACLL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectibility of a loan balance is confirmed. Accrued interest receivable is excluded from the estimate of credit losses. 
 
 
 The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The Company uses a static pool migration analysis method, applying expected historical loss trend and observed economic metrics. The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period. The ACLL reserve is overlaid with qualitative factors based upon: 
 • the existence and growth of concentrations of credit; 
 • the volume and severity of past due financial assets, including nonaccrual assets; 
 • the institutions lending and credit review as well as the experience and ability of relevant management and staff and; 
 • the effect of other external factors such as regulatory, competition, regional market conditions, legal and technological environment and other events such as natural disasters; 
 • the effect of other economic factors such as economic stimulus and customer forbearance programs. 
 
 
 The allowance for unfunded commitments is maintained at a level by the Company to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit). 
 
 
 F-13 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 The ACLL is measured on a collective (pool) basis when similar risk characteristics exist. The Company evaluates its risk characteristics of loans based on regulatory call report code with sub-segmentation based on underlying collateral for certain loan types. Risk characteristics relevant to each portfolio segment are as follows: 
 
 
 Construction – Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions. 
 
 
 Commercial real estate multifamily, owner occupied and non-owner – Loans in this segment are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans. 
 
 
 Commercial and industrial loans – Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality of this segment. 
 
 
 Residential real estate – All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. 
 
 
 Home equity and other consumer loans – Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. 
 
 
 Loans that do not share risk characteristics are evaluated on an individual basis, which the Company has determined to be non-accrual loans over a certain threshold, loans that were determined to be Troubled Debt Restructurings (“TDRs”) and PCD loans. Loans evaluated individually are not also included in the collective evaluation. Estimates of specific allowance may be determined by the present value of anticipated future cash flows or the loan’s observable fair market value, or the fair value of the collateral less costs to sell, if the loan is collateral dependent. However, for collateral dependent loans, the amount of the amortized cost in a loan that exceeds the fair value of the collateral is charged-off against the allowance for loan losses in lieu of an allocation of a specific allowance amount when such an amount has been identified definitively as uncollectible. 
 
 
 Prior to the adoption of ASC 326 on January 1, 2020, the Company calculated allowance for loan losses using incurred losses methodology. 
 
 
 Bank-Owned Life Insurance 
 Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at the amount that can be realized under the insurance contract at the balance sheet date which is the cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in non-interest income on the Consolidated Statements of Operations and are not subject to income taxes. 
 
 
 Foreclosed and Repossessed Assets 
 Other real estate owned is comprised of real estate acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure. Repossessed collateral is primarily comprised of taxi medallions. Both other real estate owned and repossessed collateral are held for sale and are initially recorded at the fair value less estimated costs to sell at the date of foreclosure or repossession, establishing a new cost basis. The shortfall, if any, of the loan balance over the fair value of the property or collateral (excluding taxi medallions), less cost to sell, at the time of transfer 
 F-14 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 from loans to other real estate owned or repossessed collateral is charged to the allowance for loan losses. Subsequent to transfer, the asset is carried at lower of cost or fair value less cost to sell and periodically evaluated for impairment. The shortfall, if any, of the loan balance over the fair value of the collateral comprised of taxi medallions at the time of transfer from loans to repossessed collateral is charged to non-interest income. Subsequent impairments in the fair value of other real estate owned and repossessed collateral are charged to expense in the period incurred. Net operating income or expense related to other real estate owned and repossessed collateral is included in operating expenses in the accompanying Consolidated Statements of Operations. Because of changing market conditions, there are inherent uncertainties in the assumptions with respect to the estimated fair value of other real estate owned and repossessed collateral. Because of these inherent uncertainties, the amount ultimately realized on other real estate owned and repossessed collateral may differ from the amounts reflected in the financial statements. 
 
 
 Capitalized Servicing Rights 
 Capitalized servicing rights are included in “other assets” in the Consolidated Balance Sheets. Servicing assets are initially recognized as separate assets at fair value when rights are acquired through purchase or through sale of financial assets with servicing retained. 
 
 
 The Company's servicing rights accounted for under the fair value method are carried on the Consolidated Balance Sheets at fair value with changes in fair value recorded in income in the period in which the change occurs. Changes in the fair value of servicing rights are primarily due to changes in valuation assumptions, such as discount rates and prepayment speeds, and the collection and realization of expected cash flows. 
 
 
 The Company’s servicing rights accounted for under the amortization method are initially recorded at fair value. Under that method, capitalized servicing rights are charged to expense in proportion to and over the period of estimated net servicing income. Fair value of the servicing rights is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, prepayment speeds and default rates and losses. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranches. If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income. 
 
 
 Premises and Equipment 
 Land is carried at cost. Buildings, improvements, and equipment are carried at cost less accumulated depreciation and amortization computed on the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on the straight-line method over the shorter of the lease term, plus optional terms if certain conditions are met, or the estimated useful life of the asset. 
 
 
 Goodwill 
 Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is assessed annually for impairment, and more frequently if events or changes in circumstances indicate that there may be an impairment. Adverse changes in the economic environment, declining operations, unanticipated competition, loss of key personnel, or other factors could result in a decline in the implied fair value of goodwill. Subsequent reversals of goodwill impairment are prohibited. 
 
 
 Other Intangibles 
 Intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. 
 
 
 The fair values of these assets are generally determined based on appraisals and are subsequently amortized on a straight-line basis or an accelerated basis over their estimated lives. Management assesses the recoverability of these intangible assets at least annually or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. If the carrying amount exceeds fair value, an impairment charge is recorded to income. 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 
 
 
 
 Transfers of Financial Assets 
 Transfers of an entire financial asset, group of entire financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets. 
 
 
 Income Taxes 
 Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable for future years to differences between financial statement and tax bases of existing assets and liabilities. The effect of tax rate changes on deferred taxes is recognized in the income tax provision in the period that includes the enactment date. A tax valuation allowance is established, as needed, to reduce net deferred tax assets to the amount expected to be realized. In the event it becomes more likely than not that some or all of the deferred tax asset allowances will not be needed, the valuation allowance will be adjusted. 
 
 
 In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax 
 positions. Income tax positions and recorded tax benefits are based upon management’s evaluation of the facts, circumstances, and information available at the reporting date. For those tax positions where it is more likely than not that a tax benefit will be sustained, we have determined the amount of the tax benefit to be recognized by estimating the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information. For those income tax positions where it is more-likely-than-not that a tax benefit will not be sustained, no tax benefit has been recognized in the financial statements. Where applicable, associated interest and penalties have also been recognized. We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense. 
 
 
 Insurance Commissions 
 Commission revenue is recognized as of the effective date of the insurance policy or the date the customer is billed, whichever is later, net of return commissions related to policy cancellations. Policy cancellation is a variable consideration that is not deemed significant and thus, does not impact the amount of revenue recognized. 
 
 
 In addition, the Company may receive additional performance commissions based on achieving certain sales and loss experience measures. Such commissions are recognized when determinable, which is generally when such commissions are received or when the Company receives data from the insurance companies that allows the reasonable estimation of these amounts. 
 
 
 Stock-Based Compensation 
 The Company measures and recognizes compensation cost relating to share-based payment transactions based on the grant-date fair value of the equity instruments issued. The fair value of restricted stock is recorded as unearned compensation. The deferred expense is amortized to compensation expense based on one of several permitted attribution methods over the longer of the required service period or performance period. For performance-based restricted stock awards, the Company estimates the degree to which performance conditions will be met to determine the number of shares that will vest and the related compensation expense. Compensation expense is adjusted in the period such estimates change. 
 
 
 Income tax benefits and/or tax deficiencies related to stock compensation determined as the difference between compensation cost recognized for financial reporting purposes and the deduction for tax, are recognized in the income statement as income tax expense or benefit in the period in which they occur. 
 
 
 
 
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 Wealth Management 
 Wealth management assets held in a fiduciary or agent capacity are not included in the accompanying Consolidated 
 Balance Sheets because they are not assets of the Company. 
 
 
 Wealth management fees is primarily comprised of fees earned from consultative investment management, trust administration, tax return preparation, and financial planning. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based on the daily accrual of the market value of the investment accounts and the applicable fee rate. 
 
 
 Derivative Instruments and Hedging Activities 
 The Company enters into interest rate swap agreements as part of the Company’s interest rate risk management strategy for certain assets and liabilities and not for speculative purposes. Based on the Company’s intended use for the interest rate swap at inception, the Company designates the derivative as either an economic hedge of an asset or liability or a hedging instrument subject to the hedge accounting provisions of ASC 815, “Derivatives and Hedging.” 
 
 
 Interest rate swaps designated as economic hedges are recorded at fair value within other assets or liabilities. Changes in the fair value of these derivatives are recorded directly through earnings. 
 
 
 For interest rate swaps that management intends to apply the hedge accounting provisions of ASC 815, the Company formally documents at inception all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the various hedges. Additionally, the Company uses dollar offset or regression analysis at the hedge’s inception and for each reporting period thereafter, to assess whether the derivative used in its hedging transaction is expected to be and has been highly effective in offsetting changes in the fair value or cash flows of the hedged item. The Company discontinues hedge accounting when it is determined that a derivative is not expected to be or has ceased to be highly effective as a hedge, and then reflects changes in fair value of the derivative in earnings after termination of the hedge relationship. 
 
 
 The Company enters into commitments to lend with borrowers, and forward commitments to sell loans or to-be-announced mortgage-backed bonds to investors to hedge against the inherent interest rate and pricing risk associated with selling loans. The commitments to lend generally terminate once the loan is funded, the lock period expires or the borrower decides not to contract for the loan. The forward commitments generally terminate once the loan is sold, the commitment period expires or the borrower decides not to contract for the loan. These commitments are considered derivatives which are accounted for by recognizing their estimated fair value on the Consolidated Balance Sheets as either a freestanding asset or liability. See Note 15 - Derivative Instruments and Hedging Activities to the financial statements for more information on commitments to lend and forward commitments. 
 
 
 Off-Balance Sheet Financial Instruments 
 In the ordinary course of business, the Company enters into off-balance sheet financial instruments, consisting primarily of credit related financial instruments. These financial instruments are recorded in the financial statements when they are funded or related fees are incurred or received. 
 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Fair Value Hierarchy 
 The Company groups assets and liabilities that are measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. 
 
 
 Level 1 - Valuation is based on quoted prices in active markets for identical assets or liabilities. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. 
 
 
 Level 2 - Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. 
 
 
 Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using unobservable techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. 
 
 
 Employee Benefits 
 The Company maintains an employer sponsored 401(k) plan to which participants may make contributions in the form of salary deferrals and the Company provides matching contributions in accordance with the terms of the plan. Contributions due under the terms of the defined contribution plans are accrued as earned by employees. 
 
 
 Due to the Rome Bancorp acquisition in 2011, the Company inherited a noncontributory, qualified, defined benefit pension plan for certain employees who met age and service requirements; as well as other post-retirement benefits, principally health care and group life insurance. The Rome pension plan and postretirement benefits that were acquired in connection with the whole-bank acquisition were frozen prior to the close of the transaction. The pension benefit in the form of a life annuity is based on the employee’s combined years of service, age, and compensation. The Company also has a long-term care post-retirement benefit plan for certain executives where upon disability, associated benefits are funded by insurance policies or paid directly by the Company. 
 
 
 In order to measure the expense associated with the Plans, various assumptions are made including the discount rate, expected return on plan assets, anticipated mortality rates, and expected future healthcare costs. The assumptions are based on historical experience as well as current facts and circumstances. The Company uses a December 31 measurement date for its plans. As of the measurement date, plan assets are determined based on fair value, generally representing observable market prices. The projected benefit obligation is primarily determined based on the present value of projected benefit distributions at an assumed discount rate. 
 
 
 Net periodic pension benefit costs include interest costs based on an assumed discount rate, the expected return on plan assets based on actuarially derived market-related values, and the amortization of net actuarial losses. Net periodic postretirement benefit costs include service costs, interest costs based on an assumed discount rate, and the amortization of prior service credits and net actuarial gains. Differences between expected and actual results in each year are included in the net actuarial gain or loss amount, which is recognized in other comprehensive income. The net actuarial gain or loss in excess of a 10% corridor is amortized in net periodic benefit cost over the average remaining service period of active participants in the Plans. The prior service credit is amortized over the average remaining service period to full eligibility for participating employees expected to receive benefits. 
 
 
 The Company recognizes in its statement of condition an asset for a plan’s overfunded status or a liability for a plan’s underfunded status. The Company also measures the Plans’ assets and obligations that determine its funded status as of the end of the fiscal year and recognizes those changes in other comprehensive income, net of tax. 
 
 
 
 
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 Due to the SI Financial acquisition in 2019, the Company inherited a tax-qualified defined benefit pension plan. The plan was frozen effective September 6, 2013 and SI Financial recorded a contingent obligation to settle the plan at a future date, which was assumed by the Company. The plan is a single plan under the Internal Revenue Code and, as a result, all of the assets stand behind all of liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers. 
 
 
 Operating Segments 
 The Company operates as one consolidated reportable segment. The chief operating decision-maker evaluates consolidated results and makes decisions for resource allocation on this same data. Management periodically reviews and redefines its segment reporting as internal reporting practices evolve and components of the business change. The financial statements reflect the financial results of the Company's one reportable operating segment. 
 
 
 Recently Adopted Accounting Principles 
 In August 2018, the FASB issued ASU No. 2018-14, “Compensation - Retirement Benefits - Defined Benefit Plans - General (Subtopic 715-20): Disclosure Framework - Changes to the Disclosure Requirements for Defined Benefit Plans.” This ASU amends and modifies the disclosure requirements for employers that sponsor defined benefit pension or other post-retirement plans. The amendments in this update remove disclosures that no longer are considered cost beneficial, clarify the specific requirements of disclosures, and add disclosure requirements identified as relevant. As ASU No. 2018-14 only revises disclosure requirements, the adoption did not have a material impact on the Company’s Consolidated Financial Statements. 
 
 
 In December 2019, the FASB issued ASU No. 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” ASU No. 2019-12 removes specific exceptions to the general principles in FASB ASC Topic 740. It eliminates the need for an organization to analyze whether the following apply in a given period: (1) exception to the incremental approach for intraperiod tax allocation; (2) exceptions to accounting for basis differences when there are ownership changes in foreign investments; and (3) exception in interim period income tax accounting for year-to-date losses that exceed anticipated losses. ASU 2019-12 also improves financial statement preparers’ application of income tax-related guidance and simplifies: (1) franchise taxes that are partially based on income; (2) transactions with a government that result in a step up in the tax basis of goodwill; (3) separate financial statements of legal entities that are not subject to tax; and (4) enacted changes in tax laws in interim periods. The adoption of ASU No. 2019-12 did not have a material impact on the Company's Consolidated Financial Statements. 
 
 
 In January 2020, the FASB issued ASU No. 2020-01, “Investments - Equity Securities (Topic 321), Investments - Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815): Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 (a consensus of the FASB Emerging Issues Task Force)”. ASU No. 2020-01 clarifies the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. The amendments clarify that an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting for the purposes of applying the measurement alternative in accordance with Topic 321 immediately before applying or upon discontinuing the equity method. In addition, this ASU provides direction that a company should not consider whether the underlying securities would be accounted for under the equity method or the fair value option when it is determining the accounting for certain forward contracts and purchased options, upon either settlement or exercise. The amendments are to be applied prospectively. The adoption of ASU No. 2020-01 did not have a material impact on the Company's Consolidated Financial Statements. 
 
 
 In January 2021, the FASB issued ASU No. 2021-01, “Reference Rate Reform (Topic 848): Scope.” ASU No. 2021-01 clarifies that certain optional expedients and exceptions in ASC 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. ASU No. 2021-01 also amends the expedients and exceptions in ASC 848 to capture the incremental consequences of the scope clarification and to tailor the existing guidance to derivative instruments affected by the discounting transition. ASU No. 2021-01 was effective upon issuance and generally can be applied through December 31, 2022. The adoption of ASU 2021-01 did not significantly impact the Company’s Consolidated Financial Statements. 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 
 
 
 
 Future Application of Accounting Pronouncements 
 In March 2020, the FASB issued ASU No. 2020-04, “Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” ASU No. 2020-04 provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. For instance, entities can elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. An entity that makes this election would not have to remeasure the contracts at the modification date or reassess a previous accounting determination. Entities can also elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. Finally, entities can make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform. It is anticipated that this ASU will simplify any modifications that are executed before December 31, 2022 that are directly related to LIBOR transition by allowing prospective recognition of the continuation of the contract, rather than extinguishment of the old contract resulting in writing off unamortized fees/costs. ASU No. 2020-04 was effective upon issuance and generally can be applied through December 31, 2022. The adoption of ASU 2020-04 did not significantly impact the Company’s Consolidated Financial Statements. 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 2. DISCONTINUED OPERATIONS 
 
 
 During the first quarter of 2019, the Company reached the decision to pursue the sale of the national mortgage banking operations of First Choice Loan Services, Inc. (“FCLS”) – a subsidiary of the Bank. The decision was based on a number of strategic priorities and other factors, including the competitiveness of the mortgage industry. As a result of these actions, the Company classified the operations of FCLS as discontinued under ASC 205-20. The Consolidated Balance Sheets, Consolidated Statements of Operations, and Consolidated Statements of Cash Flows present discontinued operations retrospectively for current and prior periods. 
 
 
 On May 7, 2020, the Company completed a transaction to sell certain assets and liabilities related to the operations of FCLS. During the fourth quarter of 2020, the Company completed the final wind-down of the operations of FCLS. Operating results for the year ended December 31, 2020, included expenses related to the wind-down of operations. 
 
 
 At year-end 2021 and 2020, there were no assets or liabilities related to the discontinued operations of FCLS. 
 
 
 The following presents operating results of the discontinued operations of FCLS for the years ended December 31, 2021, 2020, and 2019: 
 
 Years Ended December 31, 
 (in thousands) 2021 2020 2019 
 Interest income $ — $ 1,525 $ 6,085 
 Interest expense — 391 3,372 
 Net interest income — 1,134 2,713 
 Non-interest (loss)/income — ( 4,740 ) 38,517 
 Total net revenue — ( 3,606 ) 41,230 
 Non-interest expense — 23,249 46,769 
 (Loss) from discontinued operations before income taxes — ( 26,855 ) ( 5,539 ) 
 Income tax (benefit) — ( 7,013 ) ( 1,468 ) 
 Net (loss) from discontinued operations $ — $ ( 19,842 ) $ ( 4,071 ) 

 
 
 FCLS also originated mortgages designated as held-for-investment. This component of FCLS’s operations was not considered discontinued, since the Company expects to continue to originate mortgages designated as held-for-investment in its footprint on a small scale through processes considered as continuing operations. 
 
 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 3. BRANCH SALE AND SALE OF INSURANCE OPERATIONS 
 
 
 Mid-Atlantic Branch Sale 
 
 
 On August 27, 2021 the Company completed the sale of eight Mid-Atlantic branches to Investors Bank of Short Hills, New Jersey. This sale was made pursuant to a purchase and assumption agreement entered into by the banks on December 2, 2020. 
 
 
 The sale included all branch premises and equipment, and Investors also assumed related operations and the employment of associated staff. The branch sale is not expected to impact Berkshire’s growing Mid-Atlantic specialized commercial lending operations, including SBA lending at its 44 Business Capital Division and its asset-based lending relationships. 
 
 
 The sale involved the assignment of deposits which totaled $ 631 million and loans which totaled $ 220 million as of August 27, 2021. These instruments were classified as held for sale in the financial statements and were not included in total deposits and total loans reported by the Company at December 31, 2020. Investors Bank paid a premium of 3.0 % of the deposit balance transferred. The Company provided a settlement cash payment of $ 391 million as part of the sale for the assumption of covered deposit liabilities by Investors. The Company recorded a $ 14.7 million pre-tax gain related to this branch sale. 
 
 
 The following is a summary of the assets and liabilities held for sale related to the branch sale at December 31, 2021 and 2020: 
 
 (in thousands) December 31, 2021 December 31, 2020 
 Assets 
 Loans $ — $ 300,599 
 Other assets — 16,705 
 
 
 
 Total assets $ — $ 317,304 
 Liabilities 
 Deposits $ — $ 617,377 
 Other liabilities — 12,688 
 Total liabilities $ — $ 630,065 

 
 
 Berkshire Insurance Group Sale of Operations 
 On September 1, 2021, the Company completed the sale of substantially all of the assets, and the assumption of certain liabilities, of Berkshire Insurance Group, Inc. (“BIG”) to Brown & Brown of Massachusetts, LLC ("Buyer"), a Massachusetts limited liability company. This sale was made pursuant to the Asset Purchase Agreement dated August 24, 2021. The Buyer paid BIG an aggregate purchase price of $ 41.5 million, minus $ 1.6 million for executive goodwill purchase price payments paid by the Buyer at the Closing to certain executives of BIG. The Company recorded a $ 37.2 million pre-tax gain related to this sale. 
 F-22 

 
 Table of Contents 
 
 

 NOTE 4. CASH AND CASH EQUIVALENTS 
 
 Cash and cash equivalents include cash on hand, amounts due from banks, and short-term investments with original maturities of 90 days or less. Short-term investments included $ 43.7 million and $ 75.1 million pledged as collateral support for derivative financial contracts at year-end 2021 and 2020, respectively. The Federal Reserve Bank requires the Bank to maintain certain reserve requirements of vault cash and/or deposits. As of December 31, 2021 and 2020, the reserve requirement was zero . 
 
 
 
 
 
 NOTE 5. TRADING SECURITY 
 
 The Company holds a tax advantaged economic development bond that is being accounted for at fair value. The security had an amortized cost of $ 7.9 million and $ 8.7 million and a fair value of $ 8.4 million and $ 9.7 million at year-end 2021 and 2020, respectively. Unrealized losses recorded through income on this security totaled $ 0.6 million, $ 0.3 million, and $ 0.3 million for 2021, 2020, and 2019, respectively. As discussed further in Note 16 - Derivative Instruments and Hedging Activities, the Company has entered into a swap contract to swap-out the fixed rate of the security in exchange for a variable rate. The Company does not purchase securities with the intent of selling them in the near term, and there are no other debt securities in the trading portfolio at year-end 2021 and 2020 . 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 6. SECURITIES 
 
 
 The following is a summary of securities available for sale (“AFS”) , held to maturity (“HTM”), and marketable equity securities: 
 
 (In thousands) Amortized
Cost Gross
Unrealized
Gains Gross
Unrealized
Losses Fair Value Allowance 
 December 31, 2021 
 Securities available for sale 
 Debt securities: 
 Municipal bonds and obligations $ 71,822 $ 5,355 $ — $ 77,177 $ — 
 Agency collateralized mortgage obligations 693,782 5,566 ( 11,012 ) 688,336 — 
 Agency mortgage-backed securities 711,154 2,347 ( 7,642 ) 705,859 — 
 Agency commercial mortgage-backed securities 282,958 2,996 ( 3,620 ) 282,334 — 
 Corporate bonds 44,824 950 ( 114 ) 45,660 — 
 
 Other bonds and obligations 77,273 954 ( 8 ) 78,219 — 
 Total securities available for sale 1,881,813 18,168 ( 22,396 ) 1,877,585 — 
 Securities held to maturity 
 Municipal bonds and obligations 281,515 16,151 ( 693 ) 296,973 70 
 Agency collateralized mortgage obligations 149,195 3,203 ( 3,513 ) 148,885 — 
 Agency mortgage-backed securities 57,327 95 ( 1,498 ) 55,924 — 
 Agency commercial mortgage-backed securities 145,573 266 ( 3,289 ) 142,550 — 
 Tax advantaged economic development bonds 2,728 26 ( 15 ) 2,739 35 
 Other bonds and obligations 165 — — 165 — 
 Total securities held to maturity 636,503 19,741 ( 9,008 ) 647,236 105 
 
 Marketable equity securities 15,689 67 ( 303 ) 15,453 — 
 Total $ 2,534,005 $ 37,976 $ ( 31,707 ) $ 2,540,274 $ 105 
 
 December 31, 2020 
 Securities available for sale 
 Debt securities: 
 Municipal bonds and obligations $ 90,273 $ 7,530 $ — $ 97,803 $ — 
 Agency collateralized mortgage obligations 740,225 16,836 ( 235 ) 756,826 — 
 Agency mortgage-backed securities 433,311 4,954 ( 133 ) 438,132 — 
 Agency commercial mortgage-backed securities 278,990 9,835 ( 175 ) 288,650 — 
 Corporate bonds 59,098 942 ( 10 ) 60,030 — 
 
 Other bonds and obligations 52,080 1,719 ( 8 ) 53,791 — 
 Total securities available for sale 1,653,977 41,816 ( 561 ) 1,695,232 — 
 Securities held to maturity 
 Municipal bonds and obligations 246,520 20,106 — 266,626 64 
 Agency collateralized mortgage-backed securities 153,561 5,989 ( 171 ) 159,379 — 
 Agency mortgage-backed securities 35,865 198 ( 29 ) 36,034 — 
 Agency commercial mortgage-backed securities 25,481 590 ( 12 ) 26,059 — 
 Tax advantaged economic development bonds 3,369 93 — 3,462 40 
 Other bonds and obligations 295 — — 295 — 
 Total securities held to maturity 465,091 26,976 ( 212 ) 491,855 104 
 
 Marketable equity securities 18,061 767 ( 315 ) 18,513 — 
 Total $ 2,137,129 $ 69,559 $ ( 1,088 ) $ 2,205,600 $ 104 

 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 At year-end 2021 and 2020, accumulated net unrealized (losses)/gains on AFS securities included in accumulated other comprehensive income were losses of $ 4.2 million and gains of $ 41.3 million, respectively. At year-end 2021 and 2020, accumulated net unrealized gains on the securities reclassified from AFS to HTM included in accumulated other comprehensive income/(loss) were $ 2.4 million and $ 3.7 million, respectively. The year-end 2021 and 2020 related income tax benefit/(liability) of $ 0.4 million and $( 11.5 ) million, respectively, was also included in accumulated other comprehensive income/(loss). 
 
 
 The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the years ended December 31, 2021 and 2020: 
 
 (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total 
 Balance at December 31, 2020 $ 64 $ 40 $ 104 
 
 Provision (benefit) for credit losses 6 ( 5 ) 1 
 Balance at December 31, 2021 $ 70 $ 35 $ 105 

 
 
 
 (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total 
 Balance at December 31, 2019 $ — $ — $ — 
 Impact of ASC 326 adoption 83 226 309 
 Provision (benefit) for credit losses ( 19 ) ( 186 ) ( 205 ) 
 Balance at December 31, 2020 $ 64 $ 40 $ 104 

 
 
 Credit Quality Information 
 The Company monitors the credit quality of held to maturity securities through credit ratings from various rating agencies. Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions. Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk. Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities. For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying municipality, agency, or organization. 
 
 
 As of December 31, 2021, none of the Company's investment securities were delinquent or in non-accrual status. 
 
 
 The amortized cost and estimated fair value of AFS and HTM securities, segregated by contractual maturity at year-end 2021 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities and collateralized mortgage obligations are shown in total, as their maturities are highly variable. 
 
 Available for sale Held to maturity 
 (In thousands) Amortized
Cost Fair
Value Amortized
Cost Fair
Value 
 Within 1 year $ 61,424 $ 61,435 $ 1,623 $ 1,625 
 Over 1 year to 5 years 4,085 4,146 3,101 3,129 
 Over 5 years to 10 years 52,374 53,644 24,196 24,961 
 Over 10 years 76,036 81,831 255,488 270,162 
 Total bonds and obligations 193,919 201,056 284,408 299,877 
 Mortgage-backed securities 1,687,894 1,676,529 352,095 347,359 
 Total $ 1,881,813 $ 1,877,585 $ 636,503 $ 647,236 

 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 At year-end 2021 and 2020, the Company had pledged securities as collateral for certain municipal deposits and for interest rate swaps with certain counterparties. The total amortized cost and fair values of these pledged securities follows. Additionally, there is a blanket lien on certain securities to collateralize borrowings from the FHLBB, as discussed further in Note 12 - Borrowed Funds. 
 
 2021 2020 
 (In thousands) Amortized
Cost Fair
Value Amortized
Cost Fair
Value 
 Securities pledged to swap counterparties $ 34,773 $ 34,896 $ 37,532 $ 37,815 
 Securities pledged for municipal deposits 183,408 189,535 156,047 166,570 
 
 Total $ 218,181 $ 224,431 $ 193,579 $ 204,385 

 
 
 During 2021, there were no sales of AFS securities. Proceeds from the sale of AFS securities totaled $ 69 million and $ 136 million in 2020 and 2019, respectively. The amounts for the sale of AFS securities were reclassified out of accumulated other comprehensive income and into earnings. The components of net recognized gains and losses on the sale of AFS securities and the fair value change of marketable equities are as follows: 
 
 (In thousands) 2021 2020 2019 
 Gross recognized gains $ 108 $ 4,602 $ 7,492 
 Gross recognized losses ( 550 ) ( 11,133 ) ( 3,103 ) 
 
 Net recognized (losses)/gains $ ( 442 ) $ ( 6,531 ) $ 4,389 

 
 
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 Debt securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows: 
 
 Less Than Twelve Months Over Twelve Months Total 
 (In thousands) Gross
Unrealized 
Losses Fair 
Value Gross
Unrealized 
Losses Fair 
Value Gross
Unrealized 
Losses Fair 
Value 
 December 31, 2021 
 
 Securities available for sale 
 Debt securities: 
 
 Agency collateralized mortgage obligations 
 $ 9,626 $ 375,132 $ 1,386 $ 27,025 $ 11,012 $ 402,157 
 Agency mortgage-backed securities 
 3,179 222,887 4,463 175,941 7,642 398,828 
 Agency commercial mortgage-back securities 1,609 103,354 2,011 48,619 3,620 151,973 
 Corporate bonds 114 11,115 — — 114 11,115 
 
 Other bonds and obligations — — 8 694 8 694 
 
 
 Total securities available for sale $ 14,528 $ 712,488 $ 7,868 $ 252,279 $ 22,396 $ 964,767 
 
 Securities held to maturity 
 Municipal bonds and obligations 
 693 36,981 — — 693 36,981 
 Agency collateralized mortgage obligations 
 1,808 49,308 1,705 36,212 3,513 85,520 
 Agency mortgage-backed securities 
 839 26,656 659 26,025 1,498 52,681 
 Agency commercial mortgage-back securities 1,255 80,406 2,034 51,654 3,289 132,060 
 Tax advantaged economic development bonds 
 15 1,255 — — 15 1,255 
 Total securities held to maturity 4,610 194,606 4,398 113,891 9,008 308,497 
 
 Total $ 19,138 $ 907,094 $ 12,266 $ 366,170 $ 31,404 $ 1,273,264 
 
 December 31, 2020 
 Securities available for sale 
 Debt securities: 
 
 Agency collateralized mortgage obligations 
 $ 235 $ 77,898 $ — $ — $ 235 $ 77,898 
 Agency mortgage-backed securities 
 131 39,939 2 256 133 40,195 
 Agency commercial mortgage-backed securities 
 175 51,435 — — 175 51,435 
 Corporate bonds 10 4,875 — — 10 4,875 
 
 Other bonds and obligations — — 8 1,030 8 1,030 
 
 
 Total securities available for sale $ 551 $ 174,147 $ 10 $ 1,286 $ 561 $ 175,433 
 
 Securities held to maturity 
 
 Agency collateralized mortgage obligations 
 171 25,048 — — 171 25,048 
 Agency mortgage-backed securities 
 29 20,710 — — 29 20,710 
 Agency commercial mortgage-back securities 
 12 10,216 — — 12 10,216 
 
 Total securities held to maturity 212 55,974 — — 212 55,974 
 
 Total $ 763 $ 230,121 $ 10 $ 1,286 $ 773 $ 231,407 

 
 
 Debt Securities 
 The Company expects to recover its amortized cost basis on all debt securities in its AFS and HTM portfolios. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of December 31, 2021, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions. 
 
 
 The following summarizes, by investment security type, the basis for the conclusion that the debt securities in an unrealized loss position within the Company’s AFS and HTM portfolios did not maintain other-than-temporary impairment ("OTTI") at year-end 2021: 
 
 
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 AFS collateralized mortgage obligations 
 At year-end 2021, 45 out of 250 securities in the Company’s portfolio of AFS collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 2.7 % of the amortized cost of securities in unrealized loss positions. The Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), and Government National Mortgage Association ("GNMA") guarantee the contractual cash flows of all of the Company's collateralized residential mortgage obligations. The securities are investment grade rated and there were no material underlying credit downgrades during 2021. All securities are performing. 
 
 
 AFS commercial and residential mortgage-backed securities 
 At year-end 2021, 28 out of 133 securities in the Company’s portfolio of AFS mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 2.0 % of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during 2021. All securities are performing. 
 
 
 AFS corporate bonds 
 At year-end 2021, 5 out of 15 securities in the Company’s portfolio of AFS corporate bonds were in unrealized loss positions. The aggregate unrealized loss represents 1.0 % of the amortized cost of bonds in unrealized loss positions. The Company reviews the financial strength of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities. 
 
 
 AFS other bonds and obligations 
 At year-end 2021, 2 out of 6 securities in the Company’s portfolio of other bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 1.1 % of the amortized cost of securities in unrealized loss positions. The securities are all investment grade rated, and there were no material underlying credit downgrades during 2021. All securities are performing. 
 
 
 HTM municipal bonds and obligations 
 At year-end 2021, 26 out of 209 securities in the Company’s portfolio of HTM municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 1.8 % of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for that risk. There were no material underlying credit downgrades during the quarter. All securities are performing. 
 
 
 HTM collateralized mortgage obligations 
 At year-end 2021, 6 out of 14 securities in the Company’s portfolio of HTM collateralized mortgage obligations were in an unrealized loss position. Aggregate unrealized losses represented 4.0 % of the amortized cost of the security in an unrealized loss position. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company's collateralized residential mortgage obligations. The securities are investment grade rated, and there were no material underlying credit downgrades during 2021. All securities are performing. 
 
 
 HTM commercial and residential mortgage-backed securities 
 At year-end 2021, 15 out of 17 securities in the Company’s portfolio of HTM mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 2.5 % of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during 2021. All securities are performing. 
 
 
 HTM tax-advantaged economic development bonds 
 At year-end 2021, 1 out of 3 securities in the Company’s portfolio of tax-advantaged economic development 
 bonds were in an unrealized loss position. Aggregate unrealized losses represented 1.2 % of the amortized cost of the 
 security in an unrealized loss position. The Company believes that more likely than not all the principal outstanding 
 will be collected. All securities are performing. 
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 NOTE 7. LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES 
 
 
 The following is a summary of total loans by regulatory call report code with sub-segmentation based on underlying collateral for certain loan types: 
 
 (In thousands) December 31, 2021 December 31, 2020 
 Construction $ 324,282 $ 454,513 
 Commercial multifamily 515,817 483,350 
 Commercial real estate owner occupied 606,477 552,413 
 Commercial real estate non-owner occupied 2,156,929 2,119,263 
 Commercial and industrial 1,284,429 1,943,164 
 
 Residential real estate 1,489,248 1,931,681 
 Home equity 252,366 293,981 
 Consumer other 196,299 303,154 
 Total loans $ 6,825,847 $ 8,081,519 
 
 Allowance for credit losses 106,094 127,302 
 Net loans $ 6,719,753 $ 7,954,217 

 
 
 As of December 31, 2021 and 2020, outstanding loans originated under the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") totaled $ 29.9 million and $ 633.3 million, respectively. These loans are 100% guaranteed by the SBA and the full principal amount of the loan may qualify for forgiveness. These loans are included in commercial and industrial. 
 
 
 In 2021, the Company purchased loans aggregating $ 211 million and sold loans aggregating $ 560 million. In 2020, the Company purchased loans aggregating $ 98 million and sold loans aggregating $ 415 million. Net gains on sales of loans were $ 20.7 million, $ 10.6 million, and $ 12.0 million for the years 2021, 2020, and 2019, respectively. These amounts are included in Loan Related Income on the Consolidated Statements of Operations. 
 
 
 Most of the Company’s lending activity occurs within its primary markets in Massachusetts, Southern Vermont, and Northeastern New York. Most of the loan portfolio is secured by real estate, including residential mortgages, commercial mortgages, and home equity loans. Year-end loans to operators of non-residential buildings totaled $ 1.6 billion, or 24.0 %, and $ 1.5 billion, or 19.0 % of total loans in 2021 and 2020, respectively. There were no other concentrations of loans related to any single industry in excess of 10% of total loans at year-end 2021 or 2020. 
 
 
 As of December 31, 2021, the Company had no foreclosed residential real estate property. As of December 31, 2020, the Company maintained foreclosed residential real estate property with fair value of $ 149 thousand. Additionally, residential mortgage loans collateralized by real estate property that are in the process of foreclosure as of December 31, 2021 and December 31, 2020 totaled $ 1.4 million and $ 3.3 million, respectively, including sold loans serviced by the Company. 
 
 
 At year-end 2021, the Company had pledged loans totaling $ 0.7 billion to the Federal Reserve Bank of Boston as collateral for certain borrowing arrangements. Also, residential first mortgage loans are subject to a blanket lien for FHLBB advances. See Note 12 - Borrowed Funds. 
 
 
 At year-end 2021 and 2020, the Company’s commitments outstanding to related parties totaled $ 1.7 million and $ 2.0 million, respectively, and the loans outstanding against these commitments totaled $ 1.0 million and $ 1.1 million, respectively. Related parties include directors and executive officers of the Company and its subsidiaries, as well as their respective affiliates in which they have a controlling interest and immediate family members. For the years 2021 and 2020, all related party loans were performing. 
 
 
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 Risk characteristics relevant to each portfolio segment are as follows: 
 Construction - Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions. 
 
 
 Commercial real estate multifamily, owner occupied and non-owner - Loans in these segments are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans. 
 
 
 Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment and which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment. 
 
 
 Residential real estate - All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. 
 
 
 Home equity and other consumer loans - Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. 
 
 
 Allowance for Credit Losses for Loans 
 The Allowance for Credit Losses for Loans (“ACLL”) is comprised of the allowance for loan losses, and the allowance for unfunded commitments is accounted for as a separate liability in other liabilities on the balance sheet. The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The Company uses a static pool migration analysis method, applying expected historical loss trend and observed economic metrics. The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period. The ACLL reserve is overlaid with qualitative factors based upon: 
 • the existence and growth of concentrations of credit; 
 • the volume and severity of past due financial assets, including nonaccrual assets; 
 • the institutions lending and credit review as well as the experience and ability of relevant management and staff and; 
 • the effect of other external factors such as regulatory, competition, regional market conditions, legal and technological environment and other events such as natural disasters; 
 • the effect of other economic factors such as economic stimulus and customer forbearance programs. 
 The allowance for unfunded commitments is maintained at a level by the Company to be sufficient to absorb 
 expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of 
 credit). 
 
 
 
 
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 The Company’s activity in the allowance for credit losses for loans for the years ended December 31, 2021 and December 31, 2020 was as follows: 
 
 (In thousands) Balance at Beginning of Period Impact of Adopting ASC 326 Sub-total Charge-offs Recoveries Provision for Credit Losses Balance at End of Period 
 Year ended December 31, 2021 
 Construction $ 5,111 $ — $ 5,111 $ — $ — $ ( 1,905 ) $ 3,206 
 Commercial multifamily 5,916 — 5,916 ( 404 ) 157 451 6,120 
 Commercial real estate owner occupied 12,380 — 12,380 ( 1,640 ) 204 1,808 12,752 
 Commercial real estate non-owner occupied 35,850 — 35,850 ( 14,557 ) 2,522 8,291 32,106 
 Commercial and industrial 25,013 — 25,013 ( 10,841 ) 4,565 3,847 22,584 
 
 Residential real estate 28,491 — 28,491 ( 1,664 ) 1,767 ( 6,188 ) 22,406 
 Home equity 6,482 — 6,482 ( 334 ) 335 ( 2,477 ) 4,006 
 Consumer other 8,059 — 8,059 ( 1,578 ) 761 ( 4,328 ) 2,914 
 Total allowance for credit losses $ 127,302 $ — $ 127,302 $ ( 31,018 ) $ 10,311 $ ( 501 ) $ 106,094 

 
 
 
 (In thousands) Balance at Beginning of Period Impact of Adopting ASC 326 Sub-total Charge-offs Recoveries Provision for Credit Losses Balance at End of Period 
 Year ended December 31, 2020 
 Construction $ 2,713 $ ( 342 ) $ 2,371 $ ( 834 ) $ — $ 3,574 $ 5,111 
 Commercial multifamily 4,413 ( 1,842 ) 2,571 ( 100 ) 100 3,345 5,916 
 Commercial real estate owner occupied 4,880 6,062 10,942 ( 8,686 ) 1,053 9,071 12,380 
 Commercial real estate non-owner occupied 16,344 11,201 27,545 ( 11,653 ) 307 19,651 35,850 
 Commercial and industrial 20,099 ( 2,189 ) 17,910 ( 19,328 ) 4,285 22,146 25,013 
 
 Residential real estate 9,970 6,799 16,769 ( 2,285 ) 1,359 12,648 28,491 
 Home equity 1,470 4,884 6,354 ( 347 ) 292 183 6,482 
 Consumer other 3,686 861 4,547 ( 2,562 ) 609 5,465 8,059 
 Total allowance for credit losses $ 63,575 $ 25,434 $ 89,009 $ ( 45,795 ) $ 8,005 $ 76,083 $ 127,302 

 
 
 The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liability on consolidated balance sheet), with adjustments to the reserve recognized in other noninterest expense in the Consolidated Statements of Operations. The Company’s activity in the allowance for credit losses on unfunded commitments for the years ended December 31, 2021 and December 31, 2020 was as follows: 
 
 (In thousands) Total 
 Balance at December 31, 2020 $ 7,629 
 Impact of adopting ASC 326 — 
 Sub-Total 7,629 
 Release of expense for credit losses ( 586 ) 
 Balance at December 31, 2021 $ 7,043 

 
 
 
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 (In thousands) Total 
 Balance at December 31, 2019 $ 100 
 Impact of adopting ASC 326 7,993 
 Sub-Total 8,093 
 Release of expense for credit losses ( 464 ) 
 Balance at December 31, 2020 $ 7,629 

 
 
 Credit Quality Information 
 The Company monitors the credit quality of its portfolio by using internal risk ratings that are based on regulatory guidance. Loans that are given a Pass rating are not considered a problem credit. Loans that are classified as Special Mention loans are considered to have potential weaknesses and are evaluated closely by management. Substandard, including non-accruing loans, are loans for which a definitive weakness has been identified and which may make full collection of contractual cash flows questionable. Doubtful loans are those with identified weaknesses that make full collection of contractual cash flows, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. 
 
 
 For commercial credits, the Company assigns an internal risk rating at origination and reviews the rating annually, semiannually, or quarterly depending on the risk rating. The rating is also reassessed at any point in time when management becomes aware of information that may affect the borrower’s ability to fulfill their obligations. 
 
 
 The Company risk rates its residential mortgages, including 1-4 family and residential construction loans, based on a three rating system: Pass, Special Mention, and Substandard. Loans that are current within 59 days are rated Pass. Residential mortgages that are 60-89 days delinquent are rated Special Mention. Loans delinquent for 90 days or greater are rated Substandard and generally placed on non-accrual status. 
 
 
 
 
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 The following table presents the Company’s loans by risk category: 
 
 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total 
 As of December 31, 2021 
 Construction 
 Risk rating 
 Pass $ 71,784 $ 52,725 $ 117,784 $ 66,950 $ 3,839 $ 1,721 $ 50 $ — $ 314,853 
 Special Mention — — — — — — — — — 
 Substandard — — — 9,429 — — — — 9,429 
 Total $ 71,784 $ 52,725 $ 117,784 $ 76,379 $ 3,839 $ 1,721 $ 50 $ — $ 324,282 
 
 Commercial multifamily: 
 Risk rating 
 Pass $ 63,630 $ 28,172 $ 98,455 $ 59,720 $ 76,699 $ 176,020 $ 457 $ — $ 503,153 
 Special Mention — 2,700 — 5,598 — — — — 8,298 
 Substandard — — — — — 4,230 136 — 4,366 
 Total $ 63,630 $ 30,872 $ 98,455 $ 65,318 $ 76,699 $ 180,250 $ 593 $ — $ 515,817 
 
 Commercial real estate owner occupied: 
 Risk rating 
 Pass $ 154,434 $ 50,236 $ 85,687 $ 91,316 $ 45,995 $ 157,346 $ 3,206 $ — $ 588,220 
 Special Mention — 525 869 1,668 1,405 1,157 — — 5,624 
 Substandard — — 2,113 1,593 838 8,089 — — 12,633 
 Total $ 154,434 $ 50,761 $ 88,669 $ 94,577 $ 48,238 $ 166,592 $ 3,206 $ — $ 606,477 
 
 Commercial real estate non-owner occupied: 
 Risk rating 
 Pass $ 426,086 $ 176,172 $ 296,985 $ 349,947 $ 204,043 $ 585,044 $ 19,511 $ — $ 2,057,788 
 Special Mention — 221 3,472 7,632 2,302 27,268 — — 40,895 
 Substandard — 7,588 — 2,784 33,472 14,303 99 — 58,246 
 Total $ 426,086 $ 183,981 $ 300,457 $ 360,363 $ 239,817 $ 626,615 $ 19,610 $ — $ 2,156,929 
 
 Commercial and industrial: 
 Risk rating 
 Pass $ 187,257 $ 130,520 $ 114,153 $ 156,443 $ 54,190 $ 136,837 $ 424,393 $ — $ 1,203,793 
 Special Mention 661 1,691 10,824 5,092 1,433 488 22,468 — 42,657 
 Substandard 211 2,494 9,609 3,145 2,020 2,330 17,935 — 37,744 
 Doubtful — — — — — 15 220 — 235 
 Total $ 188,129 $ 134,705 $ 134,586 $ 164,680 $ 57,643 $ 139,670 $ 465,016 $ — $ 1,284,429 
 
 
 
 
 
 
 
 
 
 Residential real estate 
 Risk rating 
 Pass $ 214,306 $ 114,536 $ 86,997 $ 169,537 $ 189,980 $ 697,401 $ 293 $ — $ 1,473,050 
 Special Mention — — — 120 502 1,557 — — 2,179 
 Substandard 1,239 — 142 1,849 2,161 8,628 — — 14,019 
 Total $ 215,545 $ 114,536 $ 87,139 $ 171,506 $ 192,643 $ 707,586 $ 293 $ — $ 1,489,248 

 
 
 F-33 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 
 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total 
 As of December 31, 2020 
 Construction 
 Risk rating 
 Pass $ 38,374 $ 255,377 $ 114,690 $ 28,474 $ 9,519 $ 2,766 $ 1,000 $ — $ 450,200 
 Special Mention — — 313 — — — — — 313 
 Substandard — — — 4,000 — — — — 4,000 
 Total $ 38,374 $ 255,377 $ 115,003 $ 32,474 $ 9,519 $ 2,766 $ 1,000 $ — $ 454,513 
 
 Commercial multifamily: 
 Risk rating 
 Pass $ 31,438 $ 57,659 $ 74,932 $ 77,746 $ 81,066 $ 153,818 $ 20 $ — $ 476,679 
 Special Mention — — — — — — — — — 
 Substandard — — — — 47 6,479 145 — 6,671 
 Total $ 31,438 $ 57,659 $ 74,932 $ 77,746 $ 81,113 $ 160,297 $ 165 $ — $ 483,350 
 
 Commercial real estate owner occupied: 
 Risk rating 
 Pass $ 58,327 $ 84,839 $ 104,797 $ 64,693 $ 44,300 $ 169,197 $ 1,194 $ — $ 527,347 
 Special Mention 535 2,569 1,136 1,009 800 2,579 — — 8,628 
 Substandard — 1,266 3,597 1,685 1,439 8,451 — — 16,438 
 Total $ 58,862 $ 88,674 $ 109,530 $ 67,387 $ 46,539 $ 180,227 $ 1,194 $ — $ 552,413 
 
 Commercial real estate non-owner occupied: 
 Risk rating 
 Pass $ 180,520 $ 292,386 $ 435,440 $ 223,935 $ 303,221 $ 497,066 $ 15,393 $ — $ 1,947,961 
 Special Mention — 279 2,068 6,958 11,798 44,961 1,068 — 67,132 
 Substandard 7,804 3,529 4,235 19,632 2,124 66,651 195 — 104,170 
 Total $ 188,324 $ 296,194 $ 441,743 $ 250,525 $ 317,143 $ 608,678 $ 16,656 $ — $ 2,119,263 
 
 Commercial and industrial: 
 Risk rating 
 Pass $ 754,260 $ 159,046 $ 205,651 $ 130,985 $ 48,326 $ 148,222 $ 368,769 $ — $ 1,815,259 
 Special Mention 1,467 5,753 5,267 2,851 1,601 65 12,408 — 29,412 
 Substandard 7,392 39,822 24,951 7,765 3,504 5,630 9,099 — 98,163 
 Doubtful — — — — — — 330 — 330 
 Total $ 763,119 $ 204,621 $ 235,869 $ 141,601 $ 53,431 $ 153,917 $ 390,606 $ — $ 1,943,164 
 
 
 
 
 
 
 
 
 
 Residential real estate 
 Risk rating 
 Pass $ 150,583 $ 146,142 $ 272,399 $ 320,384 $ 333,159 $ 691,078 $ 3,281 $ — $ 1,917,026 
 Special Mention 384 — 454 1,430 — 362 — — 2,630 
 Substandard 991 39 703 902 417 8,964 9 — 12,025 
 Total $ 151,958 $ 146,181 $ 273,556 $ 322,716 $ 333,576 $ 700,404 $ 3,290 $ — $ 1,931,681 

 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 For home equity and consumer other loan portfolio segments, Berkshire evaluates credit quality based on the aging status of the loan and by payment activity. The performing or nonperforming status is updated on an ongoing basis dependent upon improvement and deterioration in credit quality. The following table presents the amortized cost based on payment activity: 
 
 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total 
 As of December 31, 2021 
 Home equity: 
 Payment performance 
 Performing $ 125 $ 469 $ — $ — $ — $ 24 $ 249,590 $ — $ 250,208 
 Nonperforming — — — — — — 2,158 — 2,158 
 Total $ 125 $ 469 $ — $ — $ — $ 24 $ 251,748 $ — $ 252,366 
 
 Consumer other: 
 Payment performance 
 Performing $ 37,994 $ 11,189 $ 21,548 $ 55,577 $ 30,632 $ 28,797 $ 7,505 $ — $ 193,242 
 Nonperforming 8 46 290 797 746 1,139 31 — 3,057 
 Total $ 38,002 $ 11,235 $ 21,838 $ 56,374 $ 31,378 $ 29,936 $ 7,536 $ — $ 196,299 

 
 
 
 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total 
 As of December 31, 2020 
 Home equity: 
 Payment performance 
 Performing $ 2,445 $ 1,960 $ 316 $ 1,859 $ 499 $ 1,882 $ 282,123 $ — $ 291,084 
 Nonperforming — — 1 — — — 2,896 — 2,897 
 Total $ 2,445 $ 1,960 $ 317 $ 1,859 $ 499 $ 1,882 $ 285,019 $ — $ 293,981 
 
 Consumer other: 
 Payment performance 
 Performing $ 15,193 $ 35,317 $ 101,730 $ 69,366 $ 35,421 $ 31,327 $ 9,339 $ — $ 297,693 
 Nonperforming 39 316 1,511 1,599 1,585 407 4 — 5,461 
 Total $ 15,232 $ 35,633 $ 103,241 $ 70,965 $ 37,006 $ 31,734 $ 9,343 $ — $ 303,154 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 The following table summarizes information about total loans rated Special Mention or lower at December 31, 2021 and December 31, 2020. The table below includes consumer loans that are Special Mention and Substandard accruing that are classified as performing based on payment activity. 
 
 (In thousands) December 31, 2021 December 31, 2020 
 Non-Accrual $ 35,326 $ 64,948 
 Substandard Accruing 106,560 185,207 
 Total Classified 141,886 250,155 
 Special Mention 100,071 109,299 
 Total Criticized 
 $ 241,957 $ 359,454 

 
 
 The following is a summary of loans by past due status at December 31, 2021 and December 31, 2020: 
 
 (In thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due Total Past Due Current Total Loans 
 December 31, 2021 
 Construction $ — $ — $ — $ — $ 324,282 $ 324,282 
 Commercial multifamily 82 306 187 575 515,242 515,817 
 Commercial real estate owner occupied — 400 4,221 4,621 601,856 606,477 
 Commercial real estate non-owner occupied 25,420 653 9,049 35,122 2,121,807 2,156,929 
 Commercial and industrial 2,700 709 6,836 10,245 1,274,184 1,284,429 
 
 Residential real estate 5,529 2,015 13,264 20,808 1,468,440 1,489,248 
 Home equity 258 108 2,158 2,524 249,842 252,366 
 Consumer other 1,363 320 2,882 4,565 191,734 196,299 
 Total $ 35,352 $ 4,511 $ 38,597 $ 78,460 $ 6,747,387 $ 6,825,847 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 
 (In thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due Total Past Due Current Total Loans 
 December 31, 2020 
 Construction $ — $ — $ — $ — $ 454,513 $ 454,513 
 Commercial multifamily — — 757 757 482,593 483,350 
 Commercial real estate owner occupied 809 631 4,894 6,334 546,079 552,413 
 Commercial real estate non-owner occupied 315 168 38,389 38,872 2,080,391 2,119,263 
 Commercial and industrial 3,016 3,259 12,982 19,257 1,923,907 1,943,164 
 
 Residential real estate 2,068 2,630 11,115 15,813 1,915,868 1,931,681 
 Home equity 244 284 2,897 3,425 290,556 293,981 
 Consumer other 2,109 777 5,364 8,250 294,904 303,154 
 Total $ 8,561 $ 7,749 $ 76,398 $ 92,708 $ 7,988,811 $ 8,081,519 

 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 The following is a summary of loans on nonaccrual status and loans past due 90 days or more and still accruing as of December 31, 2021 and December 31, 2020: 
 
 December 31, 2021 
 (In thousands) Nonaccrual Amortized Cost Nonaccrual With No Related Allowance Past Due 90 Days or Greater and Accruing Interest Income Recognized on Nonaccrual 
 Construction $ — $ — $ — $ — 
 Commercial multifamily 187 187 — — 
 Commercial real estate owner occupied 4,221 2,413 — — 
 Commercial real estate non-owner occupied 8,877 8,412 172 — 
 Commercial and industrial 6,747 1,506 89 — 
 
 Residential real estate 10,698 6,511 2,566 — 
 Home equity 1,901 141 257 — 
 Consumer other 2,695 4 187 — 
 Total $ 35,326 $ 19,174 $ 3,271 $ — 

 The commercial and industrial loans nonaccrual amortized cost as of December 31, 2021 included medallion loans with a fair value of $ 1.2 million and a contractual balance of $ 31.4 million. 
 
 
 
 
 
 December 31, 2020 
 (In thousands) Nonaccrual Amortized Cost Nonaccrual With No Related Allowance Past Due 90 Days or Greater and Accruing Interest Income Recognized on Nonaccrual 
 Construction $ — $ — $ — $ — 
 Commercial multifamily 757 591 — — 
 Commercial real estate owner occupied 4,509 2,290 385 — 
 Commercial real estate non-owner occupied 29,572 13,912 8,817 — 
 Commercial and industrial 12,441 4,725 541 — 
 
 Residential real estate 9,711 5,739 1,404 — 
 Home equity 2,654 159 243 — 
 Consumer other 5,304 2 60 — 
 Total $ 64,948 $ 27,418 $ 11,450 $ — 

 The commercial and industrial loans nonaccrual amortized cost as of December 31, 2020 included medallion loans with a fair value of $ 2.3 million and a contractual balance of $ 53.9 million. 
 
 
 
 
 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. Expected credit losses for collateral-dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following table presents the amortized cost basis of individually analyzed collateral-dependent loans by loan portfolio segment: 
 
 Type of Collateral 
 (In thousands) Real Estate Investment Securities/Cash Other 
 December 31, 2021 
 Construction $ 9,429 $ — $ — 
 Commercial multifamily 188 — — 
 Commercial real estate owner occupied 4,466 — — 
 Commercial real estate non-owner occupied 9,501 — — 
 Commercial and industrial 526 — 1,040 
 
 Residential real estate 7,035 — — 
 Home equity 262 — — 
 Consumer other 2 — — 
 Total loans $ 31,409 $ — $ 1,040 

 
 
 
 
 Type of Collateral 
 (In thousands) Real Estate Investment Securities/Cash Other 
 December 31, 2020 
 Construction $ — $ — $ — 
 Commercial multifamily 591 — — 
 Commercial real estate owner occupied 5,714 — — 
 Commercial real estate non-owner occupied 30,950 — — 
 Commercial and industrial 973 36 3,758 
 
 Residential real estate 5,081 — — 
 Home equity 145 — — 
 Consumer other 51 — — 
 Total loans $ 43,505 $ 36 $ 3,758 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Troubled Debt Restructuring Loans 
 The Company’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring ("TDR"), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as nonperforming at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. TDRs are evaluated individually for impairment and may result in a specific allowance amount allocated to an individual loan. 
 
 
 The following table presents activity in TDRs for the years ended December 31, 2021 and December 31, 2020: 
 
 (In thousands) Balance at Beginning of Period Principal Payments TDR Status Change Other Additions/(Reductions) Newly Identified TDRs Balance at End of Period 
 Year ended December 31, 2021 
 Construction $ — $ — $ — $ — $ 9,429 $ 9,429 
 Commercial multifamily 754 ( 51 ) — — — 703 
 Commercial real estate owner occupied 1,731 ( 96 ) — ( 168 ) 1,266 2,733 
 Commercial real estate non-owner occupied 13,684 ( 14,562 ) — ( 791 ) 10,979 9,310 
 Commercial and industrial 2,686 ( 3,916 ) — ( 199 ) 5,085 3,656 
 
 Residential real estate 1,524 ( 233 ) — ( 174 ) — 1,117 
 Home equity 133 ( 12 ) — — — 121 
 Consumer other 36 ( 8 ) — 5 — 33 
 Total $ 20,548 $ ( 18,878 ) $ — $ ( 1,327 ) $ 26,759 $ 27,102 

 
 (In thousands) Balance at Beginning of Period Principal Payments TDR Status Change Other Additions/(Reductions) Newly Identified TDRs Balance at End of Period 
 Year ended December 31, 2020 
 Construction $ — $ — $ — $ — $ — $ — 
 Commercial multifamily 793 ( 39 ) — — — 754 
 Commercial real estate owner occupied 13,331 ( 5,734 ) — ( 5,884 ) 18 1,731 
 Commercial real estate non-owner occupied 1,373 ( 1 ) — 1,719 10,593 13,684 
 Commercial and industrial 1,449 ( 289 ) — ( 60 ) 1,586 2,686 
 
 Residential real estate 2,045 ( 160 ) — ( 361 ) — 1,524 
 Home equity 277 ( 22 ) — ( 122 ) — 133 
 Consumer other 48 ( 12 ) — — — 36 
 Total $ 19,316 $ ( 6,257 ) $ — $ ( 4,708 ) $ 12,197 $ 20,548 

 
 
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 The following table presents loans modified as TDRs that occurred during the years ended December 31, 2021, 2020, and 2019: 
 
 (dollars in thousands) Total 
 Year ended December 31, 2021 
 TDR: 
 Number of loans 18 
 Pre-modification outstanding recorded investment $ 26,759 
 Post-modification outstanding recorded investment $ 26,759 
 
 Year ended December 31, 2020 
 TDR: 
 Number of loans 16 
 Pre-modification outstanding recorded investment $ 12,197 
 Post-modification outstanding recorded investment $ 12,197 
 
 Year ended December 31, 2019 
 TDR: 
 Number of loans 13 
 Pre-modification outstanding recorded investment $ 2,063 
 Post-modification outstanding recorded investment $ 2,063 

 
 
 The following table discloses the modifications for TDRs where a concession has been made within the previous 12 months, that then defaulted in the respective reporting period. For the year ended 2021, there were four loans restructured that had subsequently defaulted during the reporting period. There were no TDRs for which there was a payment default within twelve months following the modification during the year ended 2020. For the year 
 ended 2019, there was one loan that was restructured that had subsequently defaulted during the reporting period. 
 
 
 
 (dollars in thousands) Number of Loans Recorded Investment 
 Year ended December 31, 2021 
 Commercial real estate non-owner occupied 2 $ 18,746 
 Commercial and industrial 2 $ 71 
 Total 4 $ 18,817 

 
 (dollars in thousands) Number of Loans Recorded Investment 
 Year ended December 31, 2019 
 Commercial and industrial 1 $ 195 
 Total 1 $ 195 

 
 
 Beginning in March 2020, the Company has offered three-month payment deferrals for customers with a current payment status who were negatively impacted by economic disruption caused by the COVID-19 pandemic. Refer to Note 18 - Other Commitments, Contingencies, and Off-Balance Sheet Activities for more information regarding these modifications. 
 
 
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 Prior to the adoption of ASC 326 on January 1, 2020, the Company calculated allowance for loan losses using incurred losses methodology. The following tables are disclosures related to year end 2019. 
 
 
 The following table summarizes activity in the accretable yield for the acquired loan portfolio that falls under the purview of ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality : 
 
 (In thousands) 2019 
 Balance at beginning of period $ 2,840 
 Acquisitions 4,200 
 Accretion ( 9,619 ) 
 Net reclassification from nonaccretable difference 7,430 
 Payments received, net ( 837 ) 
 Reclassification to TDR 9 
 Disposals — 
 Balance at end of period 4,023 

 
 
 The following is a summary of the average recorded investment and interest income recognized on impaired loans 
 as of December 31, 2019: 
 
 Business Activities Loans 
 
 December 31, 2019 
 (in thousands) Average Recorded
Investment Cash Basis Interest
Income Recognized 
 With no related allowance: 
 
 
 Other commercial real estate $ 19,805 $ 586 
 Other commercial and industrial 3,165 523 
 Residential mortgages - 1-4 family 185 17 
 Consumer-home equity 148 3 
 Consumer-other — — 
 
 With an allowance recorded: 
 
 
 Other commercial real estate $ 374 $ 107 
 Other commercial and industrial 2,533 793 
 Residential mortgages - 1-4 family 2,427 150 
 Consumer-home equity 349 32 
 Consumer - other 11 1 
 
 Total 
 Commercial real estate $ 20,179 $ 693 
 Commercial and industrial 5,698 1,316 
 Residential mortgages 2,612 167 
 Consumer loans 508 36 
 Total impaired loans $ 28,997 $ 2,212 

 
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 Acquired Loans 
 
 December 31, 2019 
 (in thousands) Average Recorded
Investment Cash Basis Interest
Income Recognized 
 With no related allowance: 
 
 
 Other commercial real estate $ 1,603 $ 117 
 Other commercial and industrial 441 51 
 Residential mortgages - 1-4 family 241 11 
 Consumer - home equity 475 23 
 Consumer - other — — 
 
 With an allowance recorded: 
 
 
 Other commercial real estate $ 1,005 $ 59 
 Other commercial and industrial 29 2 
 Residential mortgages - 1-4 family 88 7 
 Consumer - home equity 68 6 
 Consumer - other 41 2 
 
 Total 
 Commercial real estate $ 2,608 $ 176 
 Commercial and industrial 470 53 
 Residential mortgages 329 18 
 Consumer loans 584 31 
 Total impaired loans $ 3,991 $ 278 

 
 
 No additional funds are committed to be advanced in connection with impaired loans. 
 
 
 The following table presents the Company’s TDR activity in 2019: 
 
 (In thousands) 2019 
 Balance at beginning of year $ 27,415 
 Principal payments ( 6,086 ) 
 TDR status change (1) — 
 Other reductions (2) ( 4,076 ) 
 Newly identified TDRs 2,063 
 Balance at end of year $ 19,316 

 _____________________ 
 (1) TDR status change classification represents TDR loans with a specified interest rate equal to or greater than the rate that the Company was willing to accept at the time of the restructuring for a new loan with comparable risk and the loan was on current payment status and not impaired based on the terms specified by the restructuring agreement. 
 (2) Other reductions classification consists of transfer to other real estate owned, charge-offs to loans, and other loan sale payoffs. 
 
 
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 Allowance for Loan Losses 
 Prior to the adoption of ASC 326 on January 1, 2020, the Company calculated allowance for loan losses using incurred losses methodology. The following tables are disclosures related to the allowance for loan losses for year end 2019. 
 
 
 Activity in the allowance for loan losses for 2019 was as follows: 
 
 Business Activities Loans 
 
 (In thousands) Commercial
real estate Commercial and
industrial loans Residential
mortgages Consumer Total 
 Balance at beginning of period $ 21,732 $ 16,504 $ 10,535 $ 7,368 $ 56,139 
 Charged-off loans 6,577 23,799 635 3,322 34,333 
 Recoveries on charged-off loans 570 1,012 57 253 1,892 
 Provision/(releases) for loan losses 9,033 25,404 ( 1,417 ) 458 33,478 
 Balance at end of period $ 24,758 $ 19,121 $ 8,540 $ 4,757 $ 57,176 
 
 Individually evaluated for impairment 20 122 109 43 294 
 Collectively evaluated 24,738 18,999 8,431 4,714 56,882 
 Total $ 24,758 $ 19,121 $ 8,540 $ 4,757 $ 57,176 
 
 
 

 
 
 
 Acquired Loans 
 (In thousands) Commercial
real estate Commercial and
industrial loans Residential
mortgages Consumer Total 
 Balance at beginning of period $ 3,153 $ 1,064 $ 630 $ 483 $ 5,330 
 Charged-off loans 830 571 263 557 2,221 
 Recoveries on charged-off loans 672 438 116 123 1,349 
 Provision/(releases) for loan losses 1,111 126 365 339 1,941 
 Balance at end of period $ 4,106 $ 1,057 $ 848 $ 388 $ 6,399 
 
 Individually evaluated for impairment 97 1 8 12 118 
 Collectively evaluated 4,009 1,056 840 376 6,281 
 Total $ 4,106 $ 1,057 $ 848 $ 388 $ 6,399 
 
 
 

 
 
 
 
 
 NOTE 8. PREMISES AND EQUIPMENT 
 
 Year-end premises and equipment are summarized as follows: 
 
 (In thousands) 2021 2020 Estimated Useful
Life 
 Land $ 15,786 $ 17,716 N/A 
 Buildings and improvements 104,327 113,853 5 - 39 years 
 
 Furniture and equipment 62,420 63,590 3 - 7 years 
 
 Construction in process 703 4,035 
 Premises and equipment, gross 183,236 199,194 
 Accumulated depreciation and amortization ( 88,853 ) ( 86,531 ) 
 
 Premises and equipment, net $ 94,383 $ 112,663 
 
 

 
 Depreciation and amortization expense including discontinued operations for the years 2021, 2020, and 2019 amounted to $ 11.0 million, $ 12.5 million, and $ 11.8 million, respectively. 
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 NOTE 9. GOODWILL AND OTHER INTANGIBLES 
 
 
 Goodwill and other intangible assets are presented in the tables below. The Company had no acquisition during 2021 or 2020. In accordance with applicable accounting guidance, the Company allocated the amount paid to the fair value of the net assets acquired, with any excess amounts recorded as goodwill. The goodwill balance is allocated to the consolidated Company. The activity impacting goodwill in 2021 and 2020 is as follows: 
 
 (In thousands) 2021 2020 
 Balance, beginning of the period $ — $ 553,762 
 Goodwill acquired and adjusted: 
 
 
 
 
 
 
 Impairment — ( 553,762 ) 
 Balance, end of the period $ — $ — 

 ______________________________________________________________________________________________________ 
 
 
 Goodwill represents the excess of the purchase price over the fair value of the net assets acquired in a business combination. Goodwill is assessed annually for impairment and more frequently if events or changes in circumstances indicate that there may be an impairment. The Company tests goodwill impairment annually as of June 30 using second quarter data. 
 
 
 The Company compares the fair value of the reporting unit with its carrying amount, including goodwill. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess. The fair value of the reporting unit was determined using the guideline public company method. As a result of the assessment, the Company recognized a full goodwill impairment during the year ended December 31, 2020. 
 
 
 The primary causes of the goodwill impairment were economic and industry conditions resulting from the COVID-19 pandemic that caused volatility and reductions in the market capitalization of the Company and its peer banks, increased loan provision estimates, increased discount rates and other changes in variables driven by the uncertain macro-environment that resulted in the estimated fair value of the reporting unit being less than the reporting unit’s carrying value. 
 
 
 
 
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 The components of other intangible assets are as follows: 
 
 (In thousands) Gross Intangible
Assets Accumulated
Amortization Net Intangible
Assets 
 December 31, 2021 
 Non-maturity deposits (core deposit intangible) $ 77,213 $ ( 49,963 ) $ 27,250 
 Insurance contracts 7,558 ( 7,558 ) — 
 All other intangible assets 7,866 ( 5,497 ) 2,369 
 Total $ 92,637 $ ( 63,018 ) $ 29,619 
 
 December 31, 2020 
 Non-maturity deposits (core deposit intangible) (1) 
 $ 77,213 $ ( 45,257 ) $ 31,956 
 Insurance contracts 7,558 ( 7,558 ) — 
 All other intangible assets 7,866 ( 5,003 ) 2,863 
 Total $ 92,637 $ ( 57,818 ) $ 34,819 

 (1) As of December 31, 2020, the Company reclassified $ 4.6 million of net core deposit intangible to held-for-sale related to the assets and liabilities associated with the Mid-Atlantic branch sale. 
 
 
 Other intangible assets are amortized on a straight-line or accelerated basis over their estimated lives, which range from four to fifteen years . Amortization expense related to intangibles totaled $ 5.2 million in 2021, $ 6.2 million in 2020, and $ 5.8 million in 2019. 
 
 
 The estimated aggregate future amortization expense for intangible assets remaining at year-end 2021 is as follows: 2022- $ 5.1 million; 2023- $ 4.8 million; 2024- $ 4.6 million; 2025- $ 4.5 million; 2026- $ 4.5 million; and thereafter- $ 6.0 million. For the years 2021, 2020, and 2019, no impairment charges were identified for the Company’s intangible assets. 
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 NOTE 10. OTHER ASSETS 
 
 
 Year-end other assets are summarized as follows: 
 
 (In thousands) 2021 2020 
 Capitalized servicing rights $ 16,022 $ 16,348 
 Accrued interest receivable 33,534 46,919 
 Accrued federal and state tax receivable 30,614 40,751 
 Right-of-use assets 52,180 60,018 
 Derivative assets 79,528 160,071 
 
 Deferred tax asset 52,620 46,370 
 Other 23,886 16,753 
 Total other assets $ 288,384 $ 387,230 
 
 

 
 
 The Bank sells loans in the secondary market and retains the right to service many of these loans. The Bank earns fees for the servicing provided. At year end 2021, loans sold and serviced for others amounted to $ 1.6 billion. For years ended 2020 and 2019, loans sold and serviced for others from continuing operations amounted to $ 1.5 billion, and $ 1.7 billion, respectively. For years ended 2020 and 2019, loans sold and serviced for others from discontinued operations amounted to $ 0.6 billion, and $ 1.4 billion, respectively. Loans serviced for others are not included in the accompanying Consolidated Balance Sheets. The risks inherent in servicing assets relate primarily to changes in prepayments that result from shifts in interest rates. For the year 2021, contractually specified servicing fees were $ 8.0 million and are included as a component of loan related fees within non-interest income. For the years 2020 and 2019, contractually specified servicing fees from continuing operations were $ 5.5 million and $ 5.6 million, respectively and are included as a component of loan related fees within non-interest income. For the years 2020 and 2019, contractually specified servicing fees from discontinued operations were $ 2.1 million and $ 1.9 million, respectively, and are included as a component of other income in Note 2 - Discontinued Operations. Refer to Note 21 - Fair Value Measurements for significant assumptions and inputs used in the valuation at year-end 2021. 
 
 
 Servicing rights activity was as follows: 
 
 (In thousands) 2021 2020 
 Balance at beginning of year $ 16,348 $ 26,451 
 
 
 Additions 4,568 3,875 
 Amortization ( 4,921 ) ( 3,761 ) 
 Change in fair value ( 723 ) ( 9,266 ) 
 Allowance adjustment 750 ( 951 ) 
 Balance at end of year $ 16,022 $ 16,348 

 (1) As of December 31, 2021 and December 31, 2020, the servicing rights included in the total balance accounted for at fair value were $ 2.0 million and $ 3.0 million, respectively. 
 
 
 At December 31, 2021, the fair value of servicing rights was $ 16.6 million. At December 31, 2020, the fair value of servicing rights was $ 16.0 million. 
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 NOTE 11. DEPOSITS 
 
 A summary of year-end time deposits is as follows: 
 
 (In thousands) 2021 2020 
 Maturity date: 
 Within 1 year $ 1,228,874 $ 1,582,492 
 Over 1 year to 2 years 280,403 545,100 
 Over 2 years to 3 years 81,391 171,810 
 Over 3 years to 4 years 52,000 32,358 
 Over 4 years to 5 years 34,605 51,073 
 Over 5 years 1,667 2,252 
 Total $ 1,678,940 $ 2,385,085 
 Account balances: 
 Less than $100,000 $ 676,979 $ 663,324 
 $100,000 through $250,000 610,174 1,219,210 
 $250,000 or more 391,787 502,551 
 Total $ 1,678,940 $ 2,385,085 

 
 Included in total deposits on the Consolidated Balance Sheets are brokered deposits of $ 228.1 million and $ 610.6 million at December 31, 2021 and December 31, 2020, respectively. Also included in total deposits are reciprocal deposits of $ 89.2 million and $ 119.0 million at December 31, 2021 and December 31, 2020, respectively, as well as related party deposits of $ 146.4 million and $ 177.2 million at December 31, 2021 and December 31, 2020, respectively. 
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 NOTE 12. BORROWED FUNDS 
 
 Borrowed funds at December 31, 2021 and 2020 are summarized, as follows: 
 
 2021 2020 
 (in thousands, except rates) Principal Weighted
Average
Rate Principal Weighted
Average
Rate 
 Short-term borrowings: 
 Advances from the FHLBB $ — — % $ 40,000 1.05 % 
 
 Total short-term borrowings: — — 40,000 1.05 
 Long-term borrowings: 
 Advances from the FHLBB 13,331 1.75 434,357 1.89 
 Paycheck Protection Program Liquidity Facility ("PPPLF") — — — — 
 Subordinated notes 74,590 7.00 74,411 7.00 
 Junior subordinated borrowing - Trust I 15,464 2.01 15,464 2.06 
 Junior subordinated borrowing - Trust II 7,459 1.90 7,405 1.92 
 Total long-term borrowings: 110,844 5.33 531,637 2.61 
 Total $ 110,844 5.33 % $ 571,637 2.50 % 

 
 Short-term debt includes Federal Home Loan Bank of Boston (“FHLBB”) advances with an original maturity of less than one year. The Bank maintains a $ 3.0 million secured line of credit with the FHLBB that bears a daily adjustable rate calculated by the FHLBB. There was no outstanding balance on the FHLBB line of credit for the periods ended December 31, 2021 and December 31, 2020. The Bank's available borrowing capacity with the FHLB was $ 1.5 billion and $ 1.0 billion for the periods ended December 31, 2021 and December 31, 2020, respectively. The Company was in compliance with all debt covenants as of December 31, 2021. 
 
 The Bank is approved to borrow on a short-term basis from the Federal Reserve Bank of Boston as a non-member bank. The Bank has pledged certain loans and securities to the Federal Reserve Bank to support this arrangement. No borrowings with the Federal Reserve Bank of Boston took place for the periods ended December 31, 2021 and December 31, 2020. As a participant in the SBA Paycheck Protection Program ("PPP"), the Bank may pledge originated loans as collateral at face value to the Federal Reserve Bank of Boston for term financings. As of December 31, 2021, the Bank had no pledged PPP loans. The Bank's available borrowing capacity with the Federal Reserve Bank was $ 511.0 million and $ 815.6 million for the periods ended December 31, 2021 and December 31, 2020, respectively. 
 
 
 Long-term FHLBB advances consist of advances with an original maturity of more than one year and are subject to 
 prepayment penalties. The advances outstanding at December 31, 2021 included callable advances totaling $ 10 million and amortizing advances totaling $ 3.4 million. The advances outstanding at December 31, 2020 included callable advances totaling $ 10 million and amortizing advances totaling $ 5.2 million. All FHLBB borrowings, including the line of credit, are secured by a blanket security agreement on certain qualified collateral, principally all residential first mortgage loans and certain securities. 
 
 
 
 
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 A summary of maturities of FHLBB advances at year-end 2021 is as follows: 
 
 2021 
 (In thousands) Amount Weighted
Average Rate 
 Fixed rate advances maturing: 
 2022 $ 4,001 2.04 % 
 2023 — — 
 2024 39 — 
 2025 5,969 1.99 
 2026 and beyond 3,322 4.57 
 
 
 
 
 
 
 
 
 
 
 Total FHLBB advances $ 13,331 1.75 % 

 
 
 The Company did no t have variable-rate FHLB advances for the period ended December 31, 2021 and December 31, 2020. 
 
 
 In September 2012, the Company issued fifteen year subordinated notes in the amount of $ 75.0 million at a discount of 1.15 %. The interest rate is fixed at 6.875 % for the first ten years . After ten years , the notes become callable and convert to an interest rate of three month LIBOR plus 5.113 %. The subordinated note includes reduction to the note principal balance of $ 92 thousand and $ 215 thousand for unamortized debt issuance costs as of December 31, 2021 and December 31, 2020, respectively. 
 
 The Company holds 100 % of the common stock of Berkshire Hills Capital Trust I (“Trust I”) which is included in other assets with a cost of $ 0.5 million. The sole asset of Trust I is $ 15.5 million of the Company’s junior subordinated debentures due in 2035. These debentures bear interest at a variable rate equal to LIBOR plus 1.85 % and had a rate of 2.01 % and 2.06 % at December 31, 2021 and December 31, 2020, respectively. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value on each quarterly payment date. Trust I is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust I is not consolidated into the Company’s financial statements. 
 
 
 The Company holds 100 % of the common stock of SI Capital Trust II (“Trust II”) which is included in other assets 
 with a cost of $ 0.2 million. The sole asset of Trust II is $ 8.2 million of the Company’s junior subordinated 
 debentures due in 2036. These debentures bear interest at a variable rate equal to LIBOR plus 1.70 % and had a rate 
 of 1.90 % and 1.92 % at December 31, 2021 and December 31, 2020. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust II is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust II is not consolidated into the Company’s financial statements. 
 
 
 
 
 
 
 
 
 
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 NOTE 13. OTHER LIABILITIES 
 
 
 Year-end other liabilities are summarized as follows: 
 
 (In thousands) 2021 2020 
 Derivative liabilities $ 35,194 $ 65,758 
 Capital and financing lease obligations 9,862 10,383 
 
 Employee benefits liability 45,498 38,830 
 Operating lease liabilities 55,674 63,894 
 Accrued interest payable 775 3,867 
 Customer transaction clearing accounts 5,718 11,261 
 Other 39,960 38,737 
 Total other liabilities $ 192,681 $ 232,730 
 
 

 
 
 
 
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 NOTE 14. EMPLOYEE BENEFIT PLANS 
 
 Pension Plan 
 The Company maintains a legacy, employer-sponsored defined benefit pension plan (the “Plan”) for which participation and benefit accruals were frozen on January 1, 2003. The Plan was assumed in connection with the Rome Bancorp acquisition in 2011. Accordingly, no employees are permitted to commence participation in the Plan and future salary increases and years of credited service are not considered when computing an employee’s benefits under the Plan. As of December 31, 2021, all minimum Employee Retirement Income Security Act (“ERISA”) funding requirements have been met. 
 
 
 Information regarding the pension plan is as follows: 
 
 December 31, 
 (In thousands) 2021 2020 
 Change in projected benefit obligation: 
 Projected benefit obligation at beginning of year $ 6,121 $ 5,848 
 Service Cost 59 66 
 Interest cost 140 178 
 Actuarial loss ( 211 ) 519 
 Benefits paid ( 321 ) ( 337 ) 
 Settlements ( 460 ) ( 153 ) 
 Projected benefit obligation at end of year 5,328 6,121 
 
 Accumulated benefit obligation 5,328 6,121 
 
 Change in fair value of plan assets: 
 Fair value of plan assets at plan beginning of year 6,049 5,799 
 Actual return on plan assets 694 740 
 Contributions by employer — — 
 Benefits paid ( 321 ) ( 337 ) 
 Settlements ( 460 ) ( 153 ) 
 Fair value of plan assets at end of year 5,962 6,049 
 
 (Overfunded)/underfunded status $ ( 634 ) $ 72 

 
 Amounts Recognized on Consolidated Balance Sheets 
 Other assets $ 634 $ — 
 Other liabilities — 72 

 
 
 
 Net periodic pension cost is comprised of the following: 
 
 December 31, 
 (In thousands) 2021 2020 
 Service Cost $ 59 $ 66 
 Interest Cost 140 178 
 Expected return on plan assets ( 410 ) ( 393 ) 
 Amortization of unrecognized actuarial loss 103 94 
 Net periodic pension (credit) $ ( 108 ) $ ( 55 ) 

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 Changes in plan assets and benefit obligations recognized in accumulated other comprehensive income are as follows: 
 
 December 31, 
 (In thousands) 2021 2020 
 Amortization of actuarial (loss) $ ( 103 ) $ ( 94 ) 
 Actuarial (gain) loss ( 495 ) 171 
 Settlement charge ( 58 ) — 
 Total recognized in accumulated other comprehensive income ( 656 ) 77 
 Total recognized in net periodic pension cost recognized and other comprehensive income $ ( 764 ) $ 22 

 
 
 The amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost are a net loss of $ 0.7 million and $ 1.3 million in 2021 and 2020, respectively. 
 
 
 The Company did not make any cash contributions to the pension trust during 2021 and 2020. The Company does no t expect to make any cash contributions in 2022. The amount expected to be amortized from other comprehensive income into net periodic pension cost over the next fiscal year is $ 11 thousand. 
 
 
 The principal actuarial assumptions used are as follows: 
 
 December 31, 
 2021 2020 
 Projected benefit obligation 
 Discount rate 2.73 % 2.35 % 
 Net periodic pension cost 
 Discount rate 2.35 % 3.15 % 
 Long term rate of return on plan assets 7.00 % 7.00 % 

 
 The discount rate that is used in the measurement of the pension obligation is determined by comparing the expected future retirement payment cash flows of the pension plan to the Above Median FTSE Pension Discount Curve as of the measurement date. The expected long-term rate of return on Plan assets reflects long-term earnings expectations on existing Plan assets and those contributions expected to be received during the current plan year. In estimating that rate, appropriate consideration was given to historical returns earned by Plan assets in the fund and the rates of return expected to be available for reinvestment. The rates of return were adjusted to reflect current capital market assumptions and changes in investment allocations. 
 
 
 The Company’s overall investment strategy with respect to the Plan’s assets is primarily for preservation of capital and to provide regular dividend and interest payments. The Plan’s targeted asset allocation is 65 % equity securities via investment in the Long-Term Growth - Equity Portfolio ("LTGE"), 34 % intermediate-term investment grade bonds via investment in the Long-Term Growth - Fixed-Income Portfolio ("LTGFI"), and 1 % in cash equivalents portfolio (for liquidity). Equity securities include investments in a diverse mix of equity funds to gain exposure in the US and international markets. The fixed income portion of the Plan assets is a diversified portfolio that primarily invests in intermediate-term bond funds. The overall rate of return is based on the historical performance of the assets applied against the Plan’s target allocation, and is adjusted for the long-term inflation rate. 
 
 
 The fair values for investment securities are determined by quoted prices in active markets, if available (Level 1). For securities where quoted prices are not available, fair values are calculated based on market prices of similar securities (Level 2). For securities where quoted prices or market prices of similar securities are not available, fair values are calculated using discounted cash flows or other market indicators (Level 3). 
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 The fair value of the Plan’s assets by category within the fair value hierarchy are as follows at December 31, 2021 and December 31, 2020. The Plan did not hold any assets classified as Level 3, nor were there any transfers. 
 
 December 31, 2021 
 Asset Category (In thousands) Total Level 1 Level 2 
 Equity Mutual Funds: 
 Large-Cap $ 1,914 $ — $ 1,914 
 Mid-Cap 509 — 509 
 Small-Cap 421 — 421 
 International 1,026 — 1,026 
 
 Fixed Income - US Core 1,446 — 1,446 
 Intermediate Duration 482 — 482 
 Cash Equivalents - money market 164 62 102 
 Total $ 5,962 $ 62 $ 5,900 

 
 December 31, 2020 
 Asset Category (In thousands) Total Level 1 Level 2 
 Equity Mutual Funds: 
 Large-Cap $ 1,996 $ — $ 1,996 
 Mid-Cap 519 — 519 
 Small-Cap 500 — 500 
 International 1,049 — 1,049 
 
 Fixed Income - US Core 1,403 — 1,403 
 Intermediate Duration 470 — 470 
 Cash Equivalents - money market 112 38 74 
 Total $ 6,049 $ 38 $ 6,011 

 
 Estimated benefit payments under the pension plans over the next 10 years at December 31, 2021 are as follows: 
 
 Year Payments (In thousands) 
 2022 358 
 2023 344 
 2024 332 
 2025 317 
 2026 - 2031 1,727 
 

 
 
 Multi-Employer Pension Plan 
 As a result of the Company's acquisition of SI Financial Group, Inc. (“SIFI”), the Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (the “Plan”), a tax-qualified defined benefit pension plan. The Plan operates as a multiple-employer plan under ERISA and the Internal Revenue Code, and as a multi-employer plan for accounting purposes. The Plan was frozen effective September 6, 2013. The Company made contributions of $ 149 thousand in 2021. As of July 1, 2021, the Plan held assets with a market value of $ 4.8 million and liabilities with a market value of $ 7.4 million. The funded status (market value of plan assets divided by funding target) of the Plan, was greater than 80% as of July 1, 2021, as required by federal and state regulations. Market value of the Plan's assets reflects contributions received through June 30, 2021. There are no collective bargaining agreements in place that require contributions to the Plan by the Company. The Plan is a single plan under the Internal Revenue Code and, as a result, all of the assets stand behind all of the liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers. 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Postretirement Benefits 
 The Company maintains an unfunded postretirement medical plan assumed in connection with the Rome Bancorp acquisition in 2011. The postretirement plan has been modified so that participation is closed to those employees who did not meet the retirement eligibility requirements by March 31, 2011. The Company contributes partially to medical benefits and life insurance coverage for retirees. Such retirees and their surviving spouses are responsible for the remainder of the medical benefits, including increases in premiums levels, between the total premium and the Company’s contribution. 
 
 
 The Company also has an executive long-term care (“LTC”) postretirement benefit plan which started August 1, 2014. The LTC plan reimburses executives for certain costs in the event of a future chronic illness. Funding of the plan comes from Company paid insurance policies or direct payments. At plan’s inception, a $ 558 thousand benefit obligation was recorded against equity representing the prior service cost of plan participants. 
 
 Information regarding the postretirement plans is as follows: 
 
 December 31, 
 (In thousands) 2021 2020 
 Change in accumulated postretirement benefit obligation: 
 Accumulated post-retirement benefit obligation at beginning of year $ 4,641 $ 4,039 
 
 Service Cost 13 39 
 Interest cost 113 129 
 Participant contributions — — 
 Actuarial loss ( 198 ) 507 
 Benefits paid ( 48 ) ( 73 ) 
 
 Accumulated post-retirement benefit obligation at end of year $ 4,521 $ 4,641 
 
 Change in plan assets: 
 Fair value of plan assets at beginning of year $ — $ — 
 Contributions by employer 48 73 
 Contributions by participant — — 
 Benefits paid ( 48 ) ( 73 ) 
 Fair value of plan assets at end of year $ — $ — 

 
 Amounts Recognized on Consolidated Balance Sheets 
 Other Liabilities $ 4,521 $ 4,641 

 
 
 
 Net periodic post-retirement cost is comprised of the following: 
 
 December 31, 
 (In thousands) 2021 2020 
 Service cost $ 13 $ 39 
 Interest costs 113 129 
 Amortization of net prior service credit 83 84 
 Amortization of net actuarial loss 55 12 
 Net periodic post-retirement costs $ 264 $ 264 

 
 
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 Changes in benefit obligations recognized in accumulated other comprehensive income are as follows: 
 
 December 31, 
 (In thousands) 2021 2020 
 
 Amortization of prior service credit $ ( 83 ) $ ( 84 ) 
 Net actuarial (gain)/loss ( 253 ) 496 
 Total recognized in accumulated other comprehensive income ( 336 ) 412 
 Accrued post-retirement liability recognized $ 4,521 $ 4,641 

 
 The amounts in accumulated other comprehensive income that have not yet been recognized as components of net periodic benefit cost are as follows: 
 
 December 31, 
 (In thousands) 2021 2020 
 Net prior service cost $ 1,242 $ 1,325 
 Net actuarial loss 615 869 
 Total recognized in accumulated other comprehensive income $ 1,857 $ 2,194 

 
 The amount expected to be amortized from other comprehensive income into net periodic postretirement cost over the next fiscal year is $ 83 thousand. 
 
 
 The discount rates used in the measurement of the postretirement plan obligations are determined by comparing the expected future retirement payment cash flows of the plans to the Above Median FTSE Pension Discount Curve as of the measurement date. 
 
 
 The assumed discount rates on a weighted-average basis were 2.30 % and 2.16 % as of December 31, 2021 and December 31, 2020, respectively. The Company has fixed contributions, therefore, the annual rate of increase in healthcare costs is not used in measuring the accumulated post-retirement benefit medical obligation. 
 
 
 For participants in the LTC plan covered by insurance policies, no increase in annual premiums is assumed based on the history of the corresponding insurance provider. 
 
 
 Estimated benefit payments under the post-retirement benefit plan over the next ten years at December 31, 2021 are as follows: 
 
 Year Payments (In thousands) 
 2022 126 
 2023 122 
 2024 121 
 2025 117 
 2026 - 2031 624 
 

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 401(k) Plan 
 The Company provides a 401(k) Plan in which most eligible employees participate. Expense related to the plan was $ 3.2 million in 2021, $ 3.5 million in 2020, and $ 4.1 million in 2019. 
 
 
 Employee Stock Ownership Plan (“ESOP”) 
 As part of the SI Financial acquisition in 2019, the Company acquired an ESOP plan that was frozen and terminated prior to the completion of the transaction. On acquisition date, all amounts in the plan were vested and the loan under the plans was repaid from the sale proceeds of unallocated shares. 
 
 
 Other Plans 
 The Company maintains supplemental executive retirement plans (“SERPs”) for select current and former executives. Benefits generally commence no earlier than age sixty-two and are payable either as an annuity or as a lump sum at the executive’s option. Most of these SERPs were assumed in connection with acquisitions. At year-end 2021 and 2020, the accrued liability for these SERPs was $ 20.0 million and $ 20.1 million, respectively. SERP expense was $ 2.0 million in 2021, $ 2.0 million in 2020, and $ 0.9 million in 2019, and is recognized over the required service period. 
 
 
 The Company has endorsement split-dollar arrangements pertaining to certain current and former executives and directors. Under these arrangements, the Company purchased policies insuring the lives of the executives and directors, and separately entered into agreements to split the policy benefits with the individuals. There are no post-retirement benefits associated with these policies. The Company also assumed split-dollar life insurance agreements from multiple prior acquisitions. The accrued liability for these split-dollar arrangements was $ 7.8 million as of year-end 2021 and $ 7.9 million as of year-end 2020. 
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 NOTE 15. INCOME TAXES 
 
 Provision for Income Taxes 
 The components of the Company’s provision for income taxes for the years ended December 31, 2021, 2020, and 2019 were, as follows: 
 
 (In thousands) 2021 2020 2019 
 Current: 
 Federal tax expense/(benefit) $ 17,340 $ ( 19,889 ) $ 16,576 
 State tax expense/(benefit) 7,580 ( 3,976 ) 5,323 
 Total current tax expense/(benefit) (1) 
 24,920 ( 23,865 ) 21,899 
 Deferred: 
 Federal tax expense 5,125 2,048 908 
 State tax expense/(benefit) 112 1,964 ( 344 ) 
 Total deferred tax expense 5,237 4,012 564 
 Change in valuation allowance 200 — — 
 Income tax expense/(benefit) from continuing operations $ 30,357 $ ( 19,853 ) $ 22,463 
 Income tax (benefit) from discontinued operations — ( 7,013 ) ( 1,468 ) 
 Total $ 30,357 $ ( 26,866 ) $ 20,995 

 (1) On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was signed into law. The CARES Act includes several provisions that temporarily modify the corporate net operating loss (“NOL”) carryback rules for federal income tax purposes. Specifically, the CARES Act allows a five-year carryback of any NOL generated in a taxable year beginning after December 31, 2017, and before January 1, 2021. The Company recorded a $ 6 million federal income tax benefit in 2020, and an additional $ 500 thousand benefit in 2021 resulting from the carryback of its 2020 NOL to recover federal income taxes paid in 2015 through 2018 at a 35% federal income tax rate. 
 
 
 Effective Tax Rate 
 The following is a reconciliation of the statutory federal income tax rate to the Company’s effective tax rate for the years ended December 31, 2021, 2020, and 2019: 
 
 2021 2020 2019 
 (In thousands, except rates) Amount Rate Amount Rate Amount Rate 
 Statutory tax rate $ 31,294 21.0 % $ ( 111,936 ) 21.0 % $ 26,037 21.0 % 
 Increase (decrease) resulting from: 
 State taxes, net of federal tax benefit 6,077 4.1 ( 1,589 ) 0.3 3,641 2.9 
 Tax exempt income - investments, net ( 3,475 ) ( 2.3 ) ( 3,184 ) 0.6 ( 3,527 ) ( 2.8 ) 
 Bank-owned life insurance ( 1,348 ) ( 0.9 ) ( 1,283 ) 0.3 ( 1,305 ) ( 1.1 ) 
 Goodwill impairment — — 103,912 ( 19.5 ) — — 
 Non-deductible merger costs — — — — 122 0.1 
 
 Tax credits, net of basis reduction ( 2,881 ) ( 1.9 ) ( 1,812 ) 0.3 ( 3,531 ) ( 2.8 ) 
 Change in valuation allowance 200 0.1 — — — — 
 Tax rate benefit on net operating loss carryback ( 493 ) ( 0.3 ) ( 6,040 ) 1.1 — — 
 Other, net 983 0.6 2,079 ( 0.4 ) 1,026 0.8 
 
 Effective tax rate $ 30,357 20.4 % $ ( 19,853 ) 3.7 % $ 22,463 18.1 % 

 
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 Deferred Tax Assets and Liabilities 
 As of December 31, 2021 and 2020, significant components of the Company’s deferred tax assets and liabilities were, as follows: 
 
 (In thousands) 2021 2020 
 Deferred tax assets: 
 Allowance for credit losses $ 30,441 $ 35,650 
 
 Unrealized capital loss on tax credit investments 1,451 2,360 
 Net unrealized loss on securities available for sale and pension in OCI 1,085 — 
 Employee benefit plans 8,435 7,607 
 Purchase accounting adjustments 4,829 8,843 
 Net operating loss carryforwards 1,139 1,753 
 Deferred loan fees 2,449 — 
 Lease liability 14,940 20,119 
 Premises and equipment 1,850 1,097 
 Nonaccrual interest 1,722 1,780 
 Other 1,845 1,733 
 Deferred tax assets, net before valuation allowances 70,186 80,942 
 Valuation allowance ( 400 ) ( 200 ) 
 Deferred tax assets, net of valuation allowances $ 69,786 $ 80,742 
 
 Deferred tax liabilities: 
 
 Net unrealized gain on securities available for sale and pension in OCI $ — $ ( 10,602 ) 
 
 
 Loan servicing rights ( 1,488 ) ( 1,674 ) 
 Deferred loan fees — ( 368 ) 
 Intangible amortization ( 545 ) ( 2,277 ) 
 Unamortized tax credit reserve ( 1,075 ) ( 1,086 ) 
 Right-of-use asset ( 14,058 ) ( 18,365 ) 
 Deferred tax liabilities $ ( 17,166 ) $ ( 34,372 ) 
 Deferred tax assets, net $ 52,620 $ 46,370 
 
 
 

 
 The Company’s net deferred tax asset increased by $ 6.3 million during 2021. 
 
 Deferred tax assets, net of valuation allowances, are expected to be realized through the reversal of existing taxable temporary differences and future taxable income. 
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 Valuation Allowances 
 The components of the Company’s valuation allowance on its deferred tax asset, net as of December 31, 2021 and 2020 were, as follows: 
 
 (in thousands) 2021 2020 
 
 
 State valuation allowances $ ( 400 ) $ ( 200 ) 

 
 
 The state tax basis difference, net of Federal benefit, was originally recorded in 2012, due to management’s assessment that it is more likely than not that certain deferred tax assets recorded for the difference between the book basis and the state tax basis in certain tax credit limited partnership investments (LPs) will not be realized. Management anticipates that the remaining excess state tax basis will be realized as a capital loss upon disposition, and that it is unlikely that the Company will have capital gains against which to offset such capital losses. The Company has established an additional $ 200 thousand valuation allowance in 2021 as management anticipates that a portion of the state net operating loss carryforwards may not be utilized. 
 
 
 The valuation allowance as of December 31, 2021 is subject to change in the future as the Company continues to periodically assess the likelihood of realizing its deferred tax assets. 
 
 
 Tax Attributes 
 At December 31, 2021, the Company has $ 2.5 million of federal net operating loss carryforwards, the utilization of which are limited under Internal Revenue Code Section 382. These net operating losses begin to expire in 2029. The related deferred tax asset is $ 527 thousand. 
 
 
 State net operating loss carryforwards, net of valuation allowance described above, are expected to be utilized in the future and begin to expire in 2023. The related gross deferred tax asset is $ 612 thousand. 
 
 
 Unrecognized Tax Benefits 
 On a periodic basis, the Company evaluates its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This evaluation takes into consideration the status of taxing authorities’ current examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment in relation to uncertain tax positions. 
 
 
 The following table presents changes in unrecognized tax benefits for the years ended December 31, 2021, 2020, and 2019: 
 
 (In thousands) 2021 2020 2019 
 Unrecognized tax benefits at January 1 $ 516 $ 238 $ 467 
 Increase in gross amounts of tax positions related to prior years 509 309 26 
 Decrease in gross amounts of tax positions related to prior years — — — 
 Decrease due to settlement with taxing authority — — ( 185 ) 
 
 Decrease due to lapse in statute of limitations — ( 31 ) ( 70 ) 
 Unrecognized tax benefits at December 31 $ 1,025 $ 516 $ 238 

 
 
 It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may change from the reevaluation of uncertain tax positions arising in examinations, in appeals, or in the courts, or from the closure of tax statutes. The Company does not expect any significant changes in unrecognized tax benefits during the next twelve months. 
 
 
 All of the Company’s unrecognized tax benefits, if recognized, would be recorded as a component of income tax expense, therefore, affecting the effective tax rate. The Company recognizes interest and penalties, if any, related to the liability for uncertain tax positions as a component of income tax expense. The accrual for interest and penalties was not material for all years presented. 
 
 
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 The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states. In the normal course of business, the Company is subject to U.S. federal, state, and local income tax examinations by tax authorities. The Company is no longer subject to examination for tax years prior to 2018 including any related income tax filings from its recent acquisitions. The Company has been selected for a limited scope audit in the state of New York for tax year 2020. 
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 NOTE 16. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES 
 
 
 At year-end 2021, the Company held derivatives with a total notional amount of $ 3.7 billion. The Company had economic hedges and non-hedging derivatives totaling $ 3.7 billion and $ 8.2 million, respectively, which are not designated as hedges for accounting purposes and are therefore recorded at fair value with changes in fair value recorded directly through earnings. Economic hedges included interest rate swaps totaling $ 3.4 billion, risk participation agreements with dealer banks of $ 321.0 million, and $ 6.4 million in forward commitment contracts. 
 
 
 As part of the Company’s risk management strategy, the Company enters into interest rate swap agreements to mitigate the interest rate risk inherent in certain of the Company’s assets and liabilities. Interest rate swap agreements involve the risk of dealing with both Bank customers and institutional derivative counterparties and their ability to meet contractual terms. The agreements are entered into with counterparties that meet established credit standards and contain master netting and collateral provisions protecting the at-risk party. The derivatives program is overseen by the Risk Management Committee of the Company’s Board of Directors. Based on adherence to the Company’s credit standards and the presence of the netting and collateral provisions, the Company believes that the credit risk inherent in these contracts was not significant at December 31, 2021. 
 
 
 The Company pledged collateral to derivative counterparties in the form of cash totaling $ 43.7 million and securities with an amortized cost of $ 34.8 million and a fair value of $ 34.9 million at year-end 2021. At December 31, 2020, the Company pledged cash collateral of $ 75.1 million and securities with an amortized cost of $ 37.5 million and a fair value of $ 37.8 million. The Company does not typically require its commercial customers to post cash or securities as collateral on its program of back-to-back economic hedges. However certain language is written into the International Swaps Dealers Association, Inc. (“ISDA”) and loan documents where, in default situations, the Bank is allowed to access collateral supporting the loan relationship to recover any losses suffered on the derivative asset or liability. The Company may need to post additional collateral in the future in proportion to potential increases in unrealized loss positions. 
 
 
 Information about interest rate swap agreements and non-hedging derivative assets and liabilities at December 31, 2021 follows: 
 
 Notional
Amount Weighted
Average
Maturity Weighted Average Rate Estimated
Fair Value
Asset (Liability) 
 December 31, 2021 Received Contract pay rate 
 (In thousands) (In years) (In thousands) 
 
 
 
 
 
 Economic hedges: 
 Interest rate swap on tax advantaged economic development bond $ 7,879 7.9 0.47 % 5.09 % $ ( 1,158 ) 
 Interest rate swaps on loans with commercial loan customers 1,684,238 5.8 3.99 % 1.91 % 74,348 
 Reverse interest rate swaps on loans with commercial loan customers (1) 1,684,238 5.8 1.91 % 3.99 % ( 30,454 ) 
 Risk participation agreements with dealer banks 320,981 5.8 432 
 Forward sale commitments 6,377 0.2 134 
 Total economic hedges 3,703,713 43,302 
 
 Non-hedging derivatives: 
 Commitments to lend 8,192 0.2 124 
 Total non-hedging derivatives 8,192 124 
 
 Total $ 3,711,905 $ 43,426 

 (1) Fair value estimates include the impact of $ 45.7 million settled to market contract agreements. 
 
 
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 Information about interest rate swap agreements and non-hedging derivative asset and liabilities at December 31, 2020 follows: 
 
 Notional
Amount Weighted
Average
Maturity Weighted Average Rate Estimated
Fair Value
Asset (Liability) 
 December 31, 2020 Received Contract pay rate 
 (In thousands) (In years) (In thousands) 
 
 
 
 
 Economic hedges: 
 Interest rate swap on tax advantaged economic development bond $ 8,654 8.9 0.52 % 5.09 % $ ( 1,778 ) 
 Interest rate swaps on loans with commercial loan customers 1,734,978 6.1 4.15 % 1.95 % 159,016 
 Reverse interest rate swaps on loans with commercial loan customers (1) 1,734,978 6.1 1.95 % 4.15 % ( 64,645 ) 
 Risk participation agreements with dealer banks 326,862 8.0 665 
 Forward sale commitments 11,544 0.2 320 
 Total economic hedges 3,817,016 93,578 
 
 Non-hedging derivatives: 
 Commitments to lend 40,099 0.2 735 
 Total non-hedging derivatives 40,099 735 
 
 Total $ 3,857,115 $ 94,313 

 (1) Fair value estimates include the impact of $ 97.6 million settled to market contract agreements. 
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 Economic hedges 
 As of December 31, 2021 the Company has an interest rate swap with a $ 7.9 million notional amount to swap out the fixed rate of interest on an economic development bond bearing a fixed rate of 5.09 %, currently within the Company’s trading portfolio under the fair value option, in exchange for a LIBOR-based floating rate. The intent of the economic hedge is to improve the Company’s asset sensitivity to changing interest rates in anticipation of favorable average floating rates of interest over the 21 -year life of the bond. The fair value changes of the economic development bond are mostly offset by fair value changes of the related interest rate swap. 
 
 The Company also offers certain derivative products directly to qualified commercial borrowers. The Company economically hedges derivative transactions executed with commercial borrowers by entering into mirror-image, offsetting derivatives with third-party financial institutions. The transaction allows the Company’s customer to convert a variable-rate loan to a fixed rate loan. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts mostly offset each other in earnings. Credit valuation loss adjustments arising from the difference in credit worthiness of the commercial loan and financial institution counterparties totaled $ 0.9 million at year-end 2021. The interest income and expense on these mirror image swaps exactly offset each other. 
 
 The Company has risk participation agreements with dealer banks. Risk participation agreements occur when the Company participates on a loan and a swap where another bank is the lead. The Company earns a fee to take on the risk associated with having to make the lead bank whole on Berkshire’s portion of the pro-rated swap should the borrower default. 
 
 The Company utilizes forward sale commitments to hedge interest rate risk and the associated effects on the fair value of interest rate lock commitments and loans held for sale. The forward sale commitments are accounted for as derivatives with changes in fair value recorded in current period earnings. Forward sale commitments are 
 included in discontinued operations. 
 
 The company uses the following types of forward sale commitments contracts: 
 • Best efforts loan sales, 
 • Mandatory delivery loan sales, and 
 • To be announced (TBA) mortgage-backed securities sales. 
 
 A best efforts contract refers to a loan sales agreement where the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. The Company may enter into a best efforts contract once the price is known, which is shortly after the potential borrower’s interest rate is locked. 
 
 A mandatory delivery contract is a loan sales agreement where the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. Generally, the Company may enter into mandatory delivery contracts shortly after the loan closes with a customer. 
 
 The Company may sell to-be-announced mortgage-backed securities to hedge the changes in fair value of interest rate lock commitments and held for sale loans, which do not have corresponding best efforts or mandatory delivery contracts. These security sales transactions are closed once mandatory contracts are written. On the closing date the price of the security is locked-in, and the sale is paired-off with a purchase of the same security. Settlement of the security purchase/sale transaction is done with cash on a net-basis. 
 
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 Non-hedging derivatives 
 The Company enters into commitments to lend for residential mortgage loans, which commit the Company to lend funds to a potential borrower at a specific interest rate and within a specified period of time. Commitments that relate to the origination of mortgage loans that will be held for sale are considered derivative financial instruments under applicable accounting guidance. Outstanding commitments expose the Company to the risk that the price of the mortgage loans underlying the commitments may decline due to increases in mortgage interest rates from inception of the rate lock to the funding of the loan. The commitments are free-standing derivatives which are carried at fair value with changes recorded in non-interest income in the Company’s Consolidated Statements of Operations. Changes in the fair value of commitments subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time. Commitments to lend are included in discontinued operations. 
 
 
 Amounts included in the Consolidated Statements of Operations related to economic hedges and non-hedging derivatives were as follows: 
 
 Years Ended December 31, 
 (In thousands) 2021 2020 2019 
 
 Economic hedges 
 Interest rate swap on industrial revenue bond: 
 Unrealized gain/(loss) recognized in other non-interest income $ 619 $ ( 289 ) $ ( 248 ) 
 
 Interest rate swaps on loans with commercial loan customers: 
 Unrealized (loss)/gain recognized in other non-interest income ( 86,099 ) 85,206 65,098 
 Favorable/(unfavorable) change in credit valuation adjustment recognized in other non-interest income 1,431 ( 1,516 ) ( 1,214 ) 
 Reverse interest rate swaps on loans with commercial loan customers: 
 Unrealized gain/(loss) recognized in other non-interest income 86,099 ( 85,206 ) ( 65,098 ) 
 
 
 Risk Participation Agreements: 
 
 Unrealized (loss)/gain recognized in other non-interest income ( 233 ) 345 83 
 
 Forward Commitments: 
 
 Unrealized (loss)/gain recognized in discontinued operations ( 186 ) 547 507 
 Realized (loss) in discontinued operations — ( 8,205 ) ( 9,195 ) 
 
 
 
 Non-hedging derivatives 
 Commitments to lend: 
 Unrealized (loss)/gain recognized in discontinued operations $ ( 611 ) $ ( 1,893 ) $ ( 1,299 ) 
 Realized gain in discontinued operations — 15,672 57,699 
 Realized gain in other non-interest income 2,854 — — 

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 Assets and Liabilities Subject to Enforceable Master Netting Arrangements 
 
 
 Interest Rate Swap Agreements (“Swap Agreements”) 
 The Company enters into swap agreements to facilitate the risk management strategies for commercial banking customers. The Company mitigates this risk by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s Consolidated Balance Sheets. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral generally in the form of marketable securities is received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds. 
 
 
 The Company had net asset positions with its financial institution counterparties totaling $ 2.2 million and $ 1.0 million as of December 31, 2021 and December 31, 2020, respectively. The Company had net asset positions with its commercial banking counterparties totaling $ 76.8 million and $ 159.0 million as of December 31, 2021 and December 31, 2020, respectively. 
 
 
 The Company had net liability positions with its financial institution counterparties totaling $ 33.3 million and $ 66.8 million as of December 31, 2021 and December 31, 2020, respectively. The Company had net liability positions with its commercial banking counterparties totaling $ 2.5 million as of December 31, 2021. The Company had no net liability positions with its commercial banking counterparties as of December 31, 2020. The Company has collateral pledged to cover this liability. 
 
 The following table presents the assets and liabilities subject to an enforceable master netting arrangement as of December 31, 2021 and December 31, 2020: 
 
 Offsetting of Financial Assets and Derivative Assets 
 
 Gross
Amounts of
Recognized
Assets Gross Amounts
Offset in the
Statements of
Condition Net Amounts of Assets
Presented in the Statements of
Condition Gross Amounts Not Offset in the Statements
of Condition 
 Financial
Instruments Cash
Collateral Received 
 (in thousands) Net Amount 
 As of December 31, 2021 
 Interest Rate Swap Agreements: 
 Institutional counterparties $ 2,223 $ ( 75 ) $ 2,148 $ — $ — $ 2,148 
 Commercial counterparties 76,809 — 76,809 — — 76,809 
 Total $ 79,032 $ ( 75 ) $ 78,957 $ — $ — $ 78,957 

 
 
 
 
 Offsetting of Financial Liabilities and Derivative Liabilities 
 
 Gross
Amounts of
Recognized
Liabilities Gross Amounts
Offset in the
Statements of
Condition Net Amounts of Liabilities
Presented in the Statement of
Condition Gross Amounts Not Offset in the Statements
of Condition 
 Financial
Instruments Cash
Collateral Received 
 (in thousands) Net Amount 
 As of December 31, 2021 
 Interest Rate Swap Agreements: 
 Institutional counterparties $ ( 78,146 ) $ 44,814 $ ( 33,332 ) $ 34,896 $ 43,694 $ 45,258 
 Commercial counterparties ( 2,461 ) — ( 2,461 ) — — ( 2,461 ) 
 Total $ ( 80,607 ) $ 44,814 $ ( 35,793 ) $ 34,896 $ 43,694 $ 42,797 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Offsetting of Financial Assets and Derivative Assets 
 
 Gross
Amounts of
Recognized
Assets Gross Amounts
Offset in the
Statements of
Condition Net Amounts of Assets
Presented in the Statements of
Condition Gross Amounts Not Offset in the Statements
of Condition 
 Financial
Instruments Cash
Collateral Received 
 (in thousands) Net Amount 
 As of December 31, 2020 
 Interest Rate Swap Agreements: 
 Institutional counterparties $ 1,124 $ ( 78 ) $ 1,046 $ — $ — $ 1,046 
 Commercial counterparties 159,016 — 159,016 — — 159,016 
 Total $ 160,140 $ ( 78 ) $ 160,062 $ — $ — $ 160,062 

 
 
 
 
 Offsetting of Financial Liabilities and Derivative Liabilities 
 
 Gross
Amounts of
Recognized
Liabilities Gross Amounts
Offset in the
Statements of
Condition Net Amounts of Liabilities
Presented in the Statement of
Condition Gross Amounts Not Offset in the Statements
of Condition 
 Financial
Instruments Cash
Collateral Received 
 (in thousands) Net Amount 
 As of December 31, 2020 
 Interest Rate Swap Agreements: 
 Institutional counterparties $ ( 164,543 ) $ 97,740 $ ( 66,803 ) $ 37,815 $ 75,070 $ 46,082 
 Commercial counterparties — — — — — — 
 Total $ ( 164,543 ) $ 97,740 $ ( 66,803 ) $ 37,815 $ 75,070 $ 46,082 

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 NOTE 17. LEASES 
 
 
 Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches, ATM locations, and office space. Most of the Company’s leases are classified as operating leases. At December 31, 2021 lease expiration dates ranged from 1 month to 18 years. 
 
 
 The following table represents the Consolidated Balance Sheets classification of the Company’s right-of-use (“ROU”) assets and lease liabilities: 
 
 (In thousands) December 31, 2021 December 31, 2020 
 Lease Right-of-Use Assets Classification 
 Operating lease right-of-use assets Other assets $ 52,180 $ 60,018 
 Finance lease right-of-use assets Premises and equipment, net 6,674 7,197 
 Total Lease Right-of-Use Assets $ 58,854 $ 67,215 
 
 Lease Liabilities 
 Operating lease liabilities Other liabilities $ 55,674 $ 63,894 
 Finance lease liabilities Other liabilities 9,862 10,383 
 Total Lease Liabilities $ 65,536 $ 74,277 

 
 
 
 
 Supplemental information related to leases was as follows: 
 
 December 31, 2021 December 31, 2020 
 Weighted-Average Remaining Lease Term (in years) 
 Operating leases 9.5 9.8 
 Finance leases 12.8 13.8 
 
 Weighted-Average Discount Rate 
 Operating leases 2.77 % 2.81 % 
 Finance leases 5.00 % 5.00 % 

 
 
 The Company has lease agreements with lease and non-lease components, which are generally accounted for separately. For real estate leases, non-lease components and other non-components, such as common area maintenance charges, real estate taxes, and insurance are not included in the measurement of the lease liability since they are generally able to be segregated. 
 
 
 The Company does not have any material sub-lease agreements. 
 
 
 Lease expense for operating leases for the year ended December 31, 2021 was $ 10.9 million. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities. 
 
 
 Lease expense for operating leases for the year ended December 31, 2020 was $ 13.5 million, of which $ 1.2 million was related to FCLS and is reported as discontinued operations. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities. 
 
 
 
 
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 Supplemental cash flow information related to leases was as follows: 
 
 (In thousands) December 31, 2021 December 31, 2020 
 Cash paid for amounts included in the measurement of lease liabilities: 
 Operating cash flows from operating leases (1) 
 $ 10,897 $ 13,750 
 Operating cash flows from finance leases 503 530 
 Financing cash flows from finance leases 528 500 
 
 Right-of-use assets obtained in exchange for lease obligations: 
 Operating leases (1) 
 2,976 7,083 
 Finance leases — — 

 (1) Includes operating cash flows from operating leases related to discontinued operations of $ 1.2 million at December 31, 2020. 
 
 
 The following table presents a maturity analysis of the Company’s lease liability by lease classification at December 31, 2021: 
 
 (In thousands) Operating Leases Finance Leases 
 2021 $ 9,774 $ 1,031 
 2022 8,569 1,037 
 2023 7,546 1,037 
 2024 5,859 1,037 
 2025 4,639 1,037 
 Thereafter 27,568 8,185 
 Total undiscounted lease payments 63,955 13,364 
 Less amounts representing interest ( 8,281 ) ( 3,502 ) 
 Lease liability $ 55,674 $ 9,862 

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 NOTE 18. OTHER COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE SHEET ACTIVITIES 
 
 
 In December 2019, a novel strain of coronavirus (“COVID-19”) was reported to have surfaced in China and has since spread to a number of other countries, including the United States. In March 2020, the World Health Organization declared COVID-19 a global pandemic and the United States declared a National Public Health Emergency. The impact of the COVID-19 pandemic is fluid and continues to evolve, which is adversely affecting some of the Company’s clients. The COVID-19 pandemic and its associated impacts on trade (including supply chains and export levels), travel, employee productivity, unemployment, consumer spending, and other economic activities has resulted in less economic activity, lower equity market valuations and significant volatility and disruption in financial markets and has had an adverse effect on the Company’s business, financial condition and results of operations. The ultimate extent of the impact of the COVID-19 pandemic on the Company’s business, financial condition and results of operations is currently uncertain and will depend on various developments and other factors, including, among others, the duration and scope of the pandemic, as well as governmental, regulatory and private sector responses to the pandemic, and the associated impacts on the economy, financial markets, and our clients, employees, and vendors. 
 
 
 The Company’s business, financial condition and results of operations generally rely upon the ability of the Company’s borrowers to repay their loans, the value of collateral underlying the Company’s secured loans, and demand for loans and other products and services the Company offers, which are highly dependent on the business environment in the Company’s primary markets where it operates and in the United States as a whole. During 2020, the Company’s results of operations were negatively impacted by full impairment of the Company's goodwill, an increase in its provision for credit losses and related allowance for credit losses, a decline in the fair value of its equity portfolio, and a decline in valuation of assets. 
 
 
 These circumstances could cause the Company to experience a material adverse effect on our business operations, asset valuations, financial condition, results of operations and prospects. Material adverse impacts may include all or a combination of valuation impairments on the Company’s intangible assets, investments, loans, loan servicing rights, deferre d tax assets, lease right-of-use assets, or counter-party risk derivatives. 
 
 
 Beginning in March 2020, the Company has offered three-month payment deferrals for customers with a current payment status who were negatively impacted by economic disruption caused by the COVID-19 pandemic. As of December 31, 2021, the Company had modified 19 loans with a carrying value of $ 14.4 million. As of December 31, 2020, the Company had 746 active modified loans outstanding with a carrying value of $ 316.1 million, which excluded loans returning to payment or awaiting evaluation for further deferral. The Company continues to accrue interest on these loans during the deferral period. In accordance with interagency guidance issued in March 2020 and Section 4013 (Temporary Relief from Troubled Debt Restructurings) of the CARES Act, these short-term deferrals are not considered troubled debt restructurings (“TDRs”) unless the borrower was previously experiencing financial difficulty. In addition, the risk-ratings on COVID-19 modified loans did not automatically change as a result of payment deferrals, and these loans will not be considered past due until after the deferral period is over and scheduled payments resume. 
 
 
 
 
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 Credit Related Financial Instruments. The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit, and interest rate risk in excess of the amount recognized in the accompanying Consolidated Balance Sheets. 
 
 
 The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. A summary of financial instruments outstanding whose contract amounts represent credit risk is as follows at year-end: 
 
 (In thousands) 2021 2020 
 Commitments to originate new loans $ 588,034 $ 211,485 
 Unused funds on commercial and other lines of credit 902,598 944,678 
 Unadvanced funds on home equity lines of credit 334,784 371,080 
 Unadvanced funds on construction and real estate loans 340,336 226,736 
 Standby letters of credit 14,475 24,501 
 Total $ 2,180,227 $ 1,778,480 

 
 
 
 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require payment of a fee. The commitments for lines of credit may expire without being drawn upon. Therefore, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s creditworthiness on a case-by-case basis. 
 
 
 Standby letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. These letters of credit are primarily issued to support borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. The Company considers standby letters of credit to be guarantees and the amount of the recorded liability related to such guarantees was not material at year-end 2021 and 2020. 
 
 
 Employment and Change in Control Agreements. The Company and the Bank have change in control agreements with several officers which provide a severance payment in the event employment is terminated in conjunction with a defined change in control. 
 
 
 Legal Claims. Various legal claims arise from time to time in the normal course of business. As of December 31, 2021, neither the Company nor the Bank was involved in any pending legal proceedings believed by management to be material, that are not accrued for, to the Company’s financial condition or results of operations. 
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 NOTE 19. SHAREHOLDERS’ EQUITY AND EARNINGS PER COMMON SHARE 
 
 
 Minimum Regulatory Capital Requirements 
 The Company and Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if imposed, could have a direct material impact on the Company’s Consolidated Financial Statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors. 
 
 
 Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital to average assets (as defined). As of year-end 2021 and 2020, the Bank and the Company met the capital adequacy requirements. Regulators may set higher expected capital requirements in some cases based on their examinations. 
 
 
 At December 31, 2021, the capital levels of both the Company and the Bank exceeded all regulatory capital requirements and their regulatory capital ratios were above the minimum levels. The capital levels of both the Company and the Bank at December 31, 2021 also exceeded the minimum capital requirements including the currently applicable BASEL III capital conservation buffer of 1.875%. 
 
 
 As of year-end 2021 and 2020, the Bank met the conditions to be classified as “well capitalized” under the relevant regulatory framework. To be categorized as well capitalized, an institution must maintain minimum total risk-based, Tier 1 risk-based, and Tier 1 leverage ratios as set forth in the following tables. 
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 The Company and Bank’s actual and required capital amounts were as follows: 
 
 Minimum
Capital
Requirement 
 Actual 
 (Dollars in thousands) Amount Ratio Amount Ratio 
 December 31, 2021 
 Company (Consolidated) 
 Total capital to risk-weighted assets $ 1,359,470 17.32 % $ 628,026 8.00 % 
 Common Equity Tier 1 Capital to risk weighted assets 1,178,497 15.01 353,265 4.50 
 Tier 1 capital to risk-weighted assets 1,200,732 15.30 471,020 6.00 
 Tier 1 capital to average assets 1,200,732 10.49 314,013 4.00 
 Total risk-weighted assets 7,850,331 N/A N/A N/A 
 
 December 31, 2020 
 Company (Consolidated) 
 Total capital to risk-weighted assets $ 1,337,008 16.10 % $ 664,239 8.00 % 
 Common Equity Tier 1 Capital to risk weighted assets 1,145,329 13.79 373,634 4.50 
 Tier 1 capital to risk-weighted assets 1,167,512 14.06 498,179 6.00 
 Tier 1 capital to average assets 1,167,512 9.38 332,119 4.00 
 Total risk-weighted assets 8,302,987 N/A N/A N/A 

 
 
 
 Minimum
Capital
Requirement Minimum to be Well
Capitalized Under
Prompt Corrective
Action Provisions 
 Actual 
 (Dollars in thousands) Amount Ratio Amount Ratio Amount Ratio 
 December 31, 2021 
 Bank 
 Total capital to risk-weighted assets $ 1,244,604 15.87 % $ 627,478 8.00 % $ 784,348 10.00 % 
 Common Equity Tier 1 Capital to risk weighted assets 1,160,458 14.80 35,956 4.50 509,826 6.50 
 Tier 1 capital to risk-weighted assets 1,160,458 14.80 470,609 6.00 627,478 8.00 
 Tier 1 capital to average assets 1,160,458 10.13 313,739 4.00 392,174 5.00 
 Total risk-weighted assets 7,843,477 N/A N/A N/A N/A N/A 
 
 December 31, 2020 
 Bank 
 Total capital to risk-weighted assets $ 1,243,287 14.99 % $ 663,429 8.00 % $ 961,659 10.00 % 
 Common Equity Tier 1 Capital to risk weighted assets 1,148,205 13.85 373,179 4.50 625,079 6.50 
 Tier 1 capital to risk-weighted assets 1,148,205 13.85 497,572 6.00 769,327 8.00 
 Tier 1 capital to average assets 1,148,205 9.23 331,715 4.00 480,830 5.00 
 Total risk-weighted assets 8,292,863 N/A N/A N/A N/A N/A 

 
 
 
 
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 Common stock 
 The Bank is subject to dividend restrictions imposed by various regulators, including a limitation on the total of all dividends that the Bank may pay to the Company in any calendar year. The total of all dividends shall not exceed the Bank’s net income for the current year (as defined by statute), plus the Bank’s net income retained for the two previous years, without regulatory approval. Dividends from the Bank are an important source of funds to the Company to make dividend payments on its common and preferred stock, to make payments on its borrowings, and for its other cash needs. The ability of the Company and the Bank to pay dividends is dependent on regulatory policies and regulatory capital requirements. The ability to pay such dividends in the future may be adversely affected by new legislation or regulations, or by changes in regulatory policies relating to capital, safety and soundness, and other regulatory concerns. 
 
 
 The payment of dividends by the Company is subject to Delaware law, which generally limits dividends to an amount equal to an excess of the net assets of a company (the amount by which total assets exceed total liabilities) over statutory capital, or if there is no excess, to the Company’s net profits for the current and/or immediately preceding fiscal year. 
 
 
 Accumulated other comprehensive income 
 Year-end components of accumulated other comprehensive income are as follows: 
 
 (In thousands) 2021 2020 
 Other accumulated comprehensive income/(loss), before tax: 
 Net unrealized holding (loss)/gain on AFS securities $ ( 1,806 ) $ 44,988 
 
 
 Net unrealized holding (loss) on pension plans ( 2,518 ) ( 3,511 ) 
 
 Income taxes related to items of accumulated other comprehensive (loss)/income: 
 Net unrealized holding loss/(gain) on AFS securities 407 ( 11,530 ) 
 
 
 Net unrealized holding loss on pension plans 674 924 
 Accumulated other comprehensive (loss)/income $ ( 3,243 ) $ 30,871 

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 The following table presents the components of other comprehensive (loss)/income for the years ended December 31, 2021, 2020, and 2019: 
 
 (In thousands) Before Tax Tax Effect Net of Tax 
 Year Ended December 31, 2021 
 Net unrealized holding (loss) on AFS securities: 
 Net unrealized (loss) arising during the period $ ( 46,794 ) $ 11,937 $ ( 34,857 ) 
 Less: reclassification adjustment for (losses) realized in net income — — — 
 Net unrealized holding (loss) on AFS securities ( 46,794 ) 11,937 ( 34,857 ) 
 
 
 
 
 
 
 
 
 
 
 
 Net unrealized holding (loss) on pension plans 
 Net unrealized gain arising during the period 993 ( 250 ) 743 
 Less: reclassification adjustment for (losses) realized in net income — — — 
 Net unrealized holding (loss) on pension plans 993 ( 250 ) 743 
 Other comprehensive loss $ ( 45,801 ) $ 11,687 $ ( 34,114 ) 

 
 (In thousands) Before Tax Tax Effect Net of Tax 
 Year Ended December 31, 2020 
 Net unrealized holding gain on AFS securities: 
 Net unrealized gain arising during the period $ 25,721 $ ( 6,470 ) $ 19,251 
 Less: reclassification adjustment for gains realized in net income ( 5 ) 1 ( 4 ) 
 Net unrealized holding gain on AFS securities 25,726 ( 6,471 ) 19,255 
 
 Net unrealized holding (loss) on pension plans 
 Net unrealized (loss) arising during the period ( 489 ) 112 ( 377 ) 
 Less: reclassification adjustment for (losses) realized in net income — — — 
 Net unrealized holding (loss) on pension plans ( 489 ) 112 ( 377 ) 
 
 
 
 
 
 
 
 
 
 
 Other comprehensive gain $ 25,237 $ ( 6,359 ) $ 18,878 
 
 
 

 
 (In thousands) Before Tax Tax Effect Net of Tax 
 Year Ended December 31, 2019 
 Net unrealized holding (loss) on AFS securities: 
 Net unrealized gain arising during the period $ 34,591 $ ( 8,890 ) $ 25,701 
 Less: reclassification adjustment for gains realized in net income 61 ( 17 ) 44 
 Net unrealized holding gain on AFS securities 34,530 ( 8,873 ) 25,657 
 
 Net unrealized holding (loss) on pension plans 
 Net unrealized (loss) arising during the period ( 270 ) 76 ( 194 ) 
 Less: reclassification adjustment for (losses) realized in net income — — — 
 Net unrealized holding loss on pension plans ( 270 ) 76 ( 194 ) 
 
 
 
 
 
 Other comprehensive income $ 34,260 $ ( 8,797 ) $ 25,463 
 
 
 

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 The following table presents the changes in each component of accumulated other comprehensive /income(loss), for the years ended December 31, 2021, 2020, and 2019: 
 
 (in thousands) Net unrealized holding gain (loss) on AFS Securities Net unrealized holding gain (loss) on pension plans Total 
 Year Ended December 31, 2021 
 Balance at Beginning of Year $ 33,459 $ ( 2,588 ) $ 30,871 
 Other comprehensive (loss)/income before reclassifications ( 34,857 ) 743 ( 34,114 ) 
 Amounts reclassified from accumulated other comprehensive income — — — 
 Total other comprehensive (loss)/income ( 34,857 ) 743 ( 34,114 ) 
 Balance at End of Period $ ( 1,398 ) $ ( 1,845 ) $ ( 3,243 ) 
 
 Year Ended December 31, 2020 
 Balance at Beginning of Year $ 14,204 $ ( 2,211 ) $ 11,993 
 Other comprehensive income/(loss) before reclassifications 19,251 ( 377 ) 18,874 
 Amounts reclassified from accumulated other comprehensive income ( 4 ) — ( 4 ) 
 Total other comprehensive income/(loss) 19,255 ( 377 ) 18,878 
 Balance at End of Period $ 33,459 $ ( 2,588 ) $ 30,871 
 
 Year Ended December 31, 2019 
 Balance at Beginning of Year $ ( 11,453 ) $ ( 2,017 ) $ ( 13,470 ) 
 Other comprehensive income/(loss) before reclassifications 25,701 ( 194 ) 25,507 
 Amounts reclassified from accumulated other comprehensive income 44 — 44 
 Total other comprehensive income/(loss) 25,657 ( 194 ) 25,463 
 
 Balance at End of Period $ 14,204 $ ( 2,211 ) $ 11,993 

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 The following table presents the amounts reclassified out of each component of accumulated other comprehensive (loss)/income for the years ended December 31, 2021, 2020, and 2019: 
 
 Affected Line Item in the
Statement Where Net Income
Is Presented 
 Years Ended December 31, 
 (in thousands) 2021 2020 2019 
 Realized (losses)/gains on AFS securities: 
 $ — $ ( 5 ) $ 61 Non-interest income 
 — 1 ( 17 ) Tax expense 
 — ( 4 ) 44 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Realized (losses) on pension plans 
 — — — Non-interest expense 
 — — — Tax expense 
 — — — 
 Total reclassifications for the period $ — $ ( 4 ) $ 44 

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 Earnings/(Loss) Per Common Share 
 Basic earnings/(loss) per common share (“EPS”) excludes dilution and is computed by dividing net income applicable to common stock by the weighted average number of common shares outstanding for the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock options) were exercised or converted into additional common shares that would then share in the earnings of the entity. Diluted EPS is computed by dividing net income applicable to common stock by the weighted average number of common shares outstanding for the year, plus an incremental number of common-equivalent shares computed using the treasury stock method. 
 
 
 Earnings/(loss) per common share has been computed based on the following (average diluted shares outstanding is calculated using the treasury stock method): 
 
 Years Ended December 31, 
 (In thousands, except per share data) 2021 2020 2019 
 Net income/(loss) from continuing operations $ 118,664 $ ( 513,175 ) $ 101,521 
 Net (loss) from discontinued operations — ( 19,842 ) ( 4,071 ) 
 Net income/(loss) $ 118,664 $ ( 533,017 ) $ 97,450 
 
 Average number of common shares issued 51,903 51,903 49,782 
 Less: average number of treasury shares 1,951 1,569 1,142 
 Less: average number of unvested stock award shares 712 505 420 
 Plus: average participating preferred shares — 441 1,043 
 Average number of basic common shares outstanding 49,240 50,270 49,263 
 Plus: dilutive effect of unvested stock award shares 309 — 122 
 Plus: dilutive effect of stock options outstanding 5 — 36 
 Average number of diluted common shares outstanding 49,554 50,270 49,421 
 
 Basic earnings/(loss) per share: 
 Continuing Operations $ 2.41 $ ( 10.21 ) $ 2.06 
 Discontinued operations — ( 0.39 ) ( 0.08 ) 
 Basic earnings/(loss) per common share $ 2.41 $ ( 10.60 ) $ 1.98 
 
 Diluted earnings/(loss) per share: 
 Continuing Operations $ 2.39 $ ( 10.21 ) $ 2.05 
 Discontinued operations — ( 0.39 ) ( 0.08 ) 
 Diluted earnings/(loss) per common share $ 2.39 $ ( 10.60 ) $ 1.97 

 
 For the year ended 2021, 88 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations. Due to the net loss in 2020, all unvested restricted stock and options were considered anti-dilutive and therefore excluded from the earnings per share calculations. For the year ended 2019, 61 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations. 
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 NOTE 20. STOCK-BASED COMPENSATION PLANS 
 
 
 The 2018 Equity Incentive Plan (the “2018 Plan”) permits the granting of a combination of Restricted Stock awards and incentive and non-qualified stock options (“Stock Options”) to employees and directors. A total of 1.0 million shares was authorized under the Plan. Awards may be granted as either Restricted Stock or Stock Options provided that any shares that are granted as Restricted Stock are counted against the share limit set forth as (1) one for every one share of Restricted Stock granted and (2) one for every one share of Stock Option granted. As of the 2018 Plan's effective date, all expired, canceled, and forfeited shares under the 2013 Plan are included in the 2018 Plan's available shares. As of year-end 2021, the Company had the ability to grant approximately 0.5 million shares under this plan. 
 
 
 A summary of activity in the Company’s stock compensation plans is shown below: 
 
 Non-vested Stock
Awards Outstanding Stock Options Outstanding 
 (Shares in thousands) Number of Shares Weighted- Average
Grant Date
Fair Value Number of Shares Weighted- Average Exercise Price 
 Balance, December 31, 2020 517 $ 28.35 112 $ 22.95 
 Granted 476 20.22 — — 
 Acquired — — — — 
 Stock options exercised — — ( 20 ) 20.66 
 Stock awards vested ( 170 ) 24.75 — — 
 Forfeited ( 113 ) 23.48 ( 2 ) 24.71 
 Expired — — ( 10 ) 17.46 
 Balance, December 31, 2021 710 $ 20.16 80 $ 25.21 
 

 
 
 Stock Awards 
 The total compensation cost for stock awards recognized as expense was $ 4.2 million, $ 4.7 million, and $ 4.8 million, in the years 2021, 2020, and 2019, respectively. The total recognized tax benefit associated with this compensation cost was $ 1.0 million, $ 1.2 million, and $ 1.3 million, respectively. 
 
 
 The weighted average fair value of stock awards granted was $ 20.22 , $ 16.69 , and $ 29.47 in 2021, 2020, and 2019, respectively. Stock awards vest over periods up to five years and are valued at the closing price of the stock on the grant date. Certain awards vest based on the Company's performance over established measurement periods. The total fair value of stock awards vested during 2021, 2020, and 2019 was $ 4.3 million, $ 5.2 million, and $ 4.8 million respectively. The unrecognized stock-based compensation expense related to unvested stock awards was $ 9.1 million as of year-end 2021. This amount is expected to be recognized over a weighted average period of two years . 
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 Option Awards 
 Option awards are granted with an exercise price equal to the market price of the Company’s stock at the date of grant, and vest over periods up to five years . The options grant the holder the right to acquire a share of the Company’s common stock for each option held, and have a contractual life of ten years . As of year-end 2021, the weighted average remaining contractual term for options outstanding is three years . 
 
 
 The Company generally issues shares from treasury stock as options are exercised. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model. The expected dividend yield and expected term are based on management estimates. The expected volatility is based on historical volatility. The risk-free interest rates for the expected term are based on the U.S. Treasury yield curve in effect at the time of the grant. The Company did not grant options during 2021 and 2020. The Company acquired options in the SI Financial Group transaction in 2019, but did not grant additional options during 2019. 
 
 
 The total intrinsic value of options exercised was $ 102 thousand, $ 246 thousand, and $ 149 thousand for the years 2021, 2020, and 2019, respectively. The expense pertaining to options vesting was $ 14 thousand, $ 96 thousand, and $ 93 thousand for the years 2021, 2020, and 2019, respectively. The tax benefit associated with stock option expense for 2021 was $ 4 thousand. The tax benefit associated with stock option expense for both 2020 and 2019 was $ 25 thousand. The unrecognized stock-based compensation expense related to unvested stock options as of year-end 2021, 2020 and 2019 was $ 14 thousand, $ 27 thousand, and $ 124 thousand, respectively. 
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 NOTE 21. FAIR VALUE MEASUREMENTS 
 
 
 A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities that are carried at fair value, including assets classified as discontinued operations on the consolidated balance sheets. 
 
 
 Recurring Fair Value Measurements of Financial Instruments 
 The following table summarizes assets and liabilities measured at fair value on a recurring basis as of year-end 2021 and 2020 segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: 
 
 December 31, 2021 
 (In thousands) Level 1
Inputs Level 2
Inputs Level 3
Inputs Total
Fair Value 
 
 Trading security $ — $ — $ 8,354 $ 8,354 
 Available-for-sale securities: 
 Municipal bonds and obligations — 77,177 — 77,177 
 Agency collateralized mortgage obligations — 688,336 — 688,336 
 Agency residential mortgage-backed securities — 705,859 — 705,859 
 Agency commercial mortgage-backed securities — 282,334 — 282,334 
 Corporate bonds — 41,630 4,030 45,660 
 
 Other bonds and obligations — 78,219 — 78,219 
 Marketable equity securities 14,798 655 — 15,453 
 Loans held for investment — — 1,200 1,200 
 Loans held for sale — 6,110 — 6,110 
 Derivative assets — 79,270 258 79,528 
 Capitalized servicing rights — — 1,966 1,966 
 Derivative liabilities — 35,194 — 35,194 

 
 December 31, 2020 
 (In thousands) Level 1
Inputs Level 2
Inputs Level 3
Inputs Total
Fair Value 
 
 Trading security $ — $ — $ 9,708 $ 9,708 
 Available-for-sale securities: 
 Municipal bonds and obligations — 97,803 — 97,803 
 Agency collateralized mortgage obligations — 756,826 — 756,826 
 Agency residential mortgage-backed securities — 438,132 — 438,132 
 Agency commercial mortgage-backed securities — 288,650 — 288,650 
 Corporate bonds — 45,030 15,000 60,030 
 
 Other bonds and obligations — 53,791 — 53,791 
 Marketable equity securities 17,841 672 — 18,513 
 Loans held for investment — — 2,265 2,265 
 Loans held for sale — 12,992 4,756 17,748 
 Derivative assets — 159,016 1,055 160,071 
 Capitalized servicing rights — — 3,033 3,033 
 Derivative liabilities — 65,758 — 65,758 

 
 
 
 
 
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 During the year ended December 31, 2021, the Company had one transfer totaling $ 4.0 million in corporate bonds from Level 2 to Level 3 based on recent inactivity in the market related to pricing information for similar bonds. During the year ended December 31, 2020, there were no transfers between Level 1, 2 and 3. During the year ended December 31, 2019, the Company had four transfers totaling $ 44.0 million in corporate bonds from Level 2 to Level 3 based on recent inactivity in the market related to pricing information for similar bonds. 
 
 
 Trading Security at Fair Value. The Company holds one security designated as a trading security. It is a tax advantaged economic development bond issued to the Company by a local nonprofit which provides wellness and health programs. The determination of the fair value for this security is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable and there is little to no market activity in the security; therefore, the security meets the definition of a Level 3 security. The discount rate used in the valuation of the security is sensitive to movements in the 3-month LIBOR rate. 
 
 Securities Available for Sale and Marketable Equity Securities . Marketable equity securities classified as Level 1 consist of publicly-traded equity securities for which the fair values can be obtained through quoted market prices in active exchange markets. Marketable equity securities classified as Level 2 consist of securities with infrequent trades in active exchange markets, and pricing is primarily sourced from third party pricing services. AFS securities classified as Level 2 include most of the Company’s debt securities. The pricing on Level 2 and Level 3 was primarily sourced from third party pricing services, overseen by management, and is based on models that consider standard input factors such as dealer quotes, market spreads, cash flows, the U.S. Treasury yield curve, live trading levels, trade execution data, market consensus prepayment speeds, credit information and the bond’s terms and condition, among other things. Level 3 pricing includes inputs unobservable to market participants. 
 
 
 Loans Held for Investment. The Company’s held for investment loan portfolio includes loans originated by Company and loans acquired through business combinations. The Company intends to hold these assets until maturity as a part of its business operations. For one acquired portfolio subset, the Company previously accounted for these purchased-credit impaired loans as a pool under ASC 310, as they were determined to have common risk characteristics. These loans were recorded at fair value on acquisition date and subsequently evaluated for impairment collectively. Upon adoption of ASC 326, the Company elected the fair value option on this portfolio, recognizing a $ 11.2 million fair value write-down charged to Retained Earnings, net of deferred tax impact, as of January 1, 2020. The fair value of this loan portfolio is determined based on a discounted cash flow methodology. Certain inputs to the fair value calculation are unobservable; therefore, the loans meet the definition of Level 3 assets. The discount rate used in the valuation is consistent with assets that have significant credit deterioration. The cash flow assumptions include payment schedules for loans with current payment histories and estimated collateral value for delinquent loans. All of these loans were nonperforming as of December 31, 2021. 
 
 Aggregate Fair Value 
 December 31, 2021 Aggregate Aggregate Less Aggregate 
 (In thousands) Fair Value Unpaid Principal Unpaid Principal 
 Loans held for investment at fair value $ 1,200 $ 31,430 $ ( 30,230 ) 

 
 Aggregate Fair Value 
 December 31, 2020 Aggregate Aggregate Less Aggregate 
 (In thousands) Fair Value Unpaid Principal Unpaid Principal 
 Loans held for investment at fair value $ 2,265 $ 53,945 $ ( 51,680 ) 

 Loans held for sale. The Company elected the fair value option for all mortgage loans originated for sale (HFS) that were originated for sale on or after May 1, 2012. Loans HFS are classified as Level 2 as the fair value is based on input factors such as quoted prices for similar loans in active markets. 
 
 Aggregate
Fair Value Aggregate
Unpaid Principal Aggregate Fair Value
Less Aggregate
Unpaid Principal 
 December 31, 2021 (In thousands) 
 Loans held for sale $ 6,110 $ 5,926 $ 184 

 
 Aggregate
Fair Value Aggregate
Unpaid Principal Aggregate Fair Value
Less Aggregate
Unpaid Principal 
 December 31, 2020 (In thousands) 
 Loans held for sale $ 12,992 $ 12,639 $ 353 

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 The changes in fair value of loans held for sale for the year ended December 31, 2021 were losses of $ 169 thousand. The changes in fair value of loans held for sale for the year ended December 31, 2020 were gains of $ 97 thousand from continuing operations and losses of $ 138 thousand from discontinued operations. During 2021, originations of loans held for sale totaled $ 104 million and sales of loans originated for sale totaled $ 108 million. During 2020, originations of loans held for sale from continuing operations totaled $ 150 million and sales of loans originated for sale from continuing operations totaled $ 141 million. During 2020, originations of loans held for sale from discontinued operations totaled $ 624.0 billion and sales of loans originated for sale from discontinued operations totaled $ 755.0 billion. 
 
 
 Interest Rate Swaps. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. 
 
 
 The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings. 
 
 
 Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of year-end 2021, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. 
 
 
 Commitments to Lend. The Company enters into commitments to lend for residential mortgage loans intended for sale, which commit the Company to lend funds to a potential borrower at a certain interest rate and within a specified period of time. The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. However, this value is adjusted by a factor which considers the likelihood that the loan commitment will ultimately close, and by the non-refundable costs of originating the loan. The closing ratio is derived from the Bank’s internal data and is adjusted using significant management judgment. The costs to originate are primarily based on the Company’s internal commission rates that are not observable. As such, these commitments to lend are classified as Level 3 measurements. Commitments to lend are included in discontinued operations. 
 
 
 Forward Sale Commitments . The Company utilizes forward sale commitments as economic hedges against potential changes in the values of the commitments to lend and loans originated for sale. To be announced (TBA) mortgage-backed securities forward commitment sales are used as hedging instruments, are classified as Level 1, and consist of publicly-traded debt securities for which identical fair values can be obtained through quoted market prices in active exchange markets. The fair values of the Company’s best efforts and mandatory delivery loan sale commitments are determined similarly to the commitments to lend using quoted prices in the market place that are observable. However, costs to originate and closing ratios included in the calculation are internally generated and are based on management’s judgment and prior experience, which are considered factors that are not observable. As such, best efforts and mandatory forward sale commitments are classified as Level 3 measurements. Forward sale commitments are included in discontinued operations. 
 
 
 Capitalized Servicing Rights. The Company accounts for certain capitalized servicing rights at fair value in its Consolidated Financial Statements, as the Company is permitted to elect the fair value option for each specific instrument. A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used 
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 in the valuation model are the anticipated rate of the loan prepayments and discount rates. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy. 
 
 The table below presents the changes in Level 3 assets that were measured at fair value on a recurring basis at year-end 2021 and 2020: 
 
 Assets (Liabilities) 
 (In thousands) Trading
Security Securities Available for Sale Loans Held for Investment Commitments to Lend (1) Forward
Commitments (1) Capitalized Servicing Rights (1) 
 
 Balance as of December 31, 2019 $ 10,769 $ 42,966 $ — $ 2,628 $ — $ 12,299 
 Adoption of ASC 326 — — 7,660 — — — 
 Maturities, calls, and prepayments of AFS Security — ( 30,000 ) — — — — 
 Unrealized (loss) gain, net recognized in other non-interest income ( 327 ) — ( 1,283 ) — — ( 822 ) 
 Unrealized gain/(loss), net recognized in discontinued
operations — — — 16,565 320 ( 8,444 ) 
 Unrealized (loss) included in accumulated other comprehensive loss — 2,034 — — — — 
 Transfers to Level 3 — — — — — — 
 Paydown of asset ( 734 ) — ( 4,112 ) — — — 
 Transfers to loans held for sale — — — ( 18,458 ) — — 
 Additions to servicing rights — — — — — — 
 Balance as of December 31, 2020 $ 9,708 $ 15,000 $ 2,265 $ 735 $ 320 $ 3,033 
 
 Maturities, calls, and prepayments of AFS Security — ( 15,000 ) — — — 
 Unrealized (loss) gain, net recognized in other non-interest income ( 578 ) — 1,645 1,995 ( 186 ) ( 1,067 ) 
 
 Unrealized gain included in accumulated other comprehensive loss — 30 — — — — 
 Transfers to Level 3 — 4,000 — — — — 
 Paydown of asset ( 776 ) — ( 2,710 ) — — — 
 Transfers to loans held for sale — — ( 2,606 ) — — 
 Additions to servicing rights — — — — — 
 Balance as of December 31, 2021 $ 8,354 $ 4,030 $ 1,200 $ 124 $ 134 $ 1,966 
 
 Unrealized gains/(losses) relating to instruments still held at December 31, 2021 $ 475 $ 30 $ — $ 124 $ 134 $ — 
 Unrealized gains/(losses) relating to instruments still held at December 31, 2020 $ 1,053 $ 287 $ — $ 735 $ 320 $ — 

 (1) For 2019, these assets were classified as assets from discontinued operations on the consolidated balance sheets. 
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 Quantitative information about the significant unobservable inputs within Level 3 recurring assets/(liabilities) as of December 31, 2021 and 2020 are as follows: 
 
 Fair Value Significant Unobservable Input Value 
 (In thousands) December 31, 2021 Valuation Techniques Unobservable Inputs 
 Assets 
 Trading Security $ 8,354 Discounted Cash Flow Discount Rate 3.35 % 
 Securities Available for Sale 4,030 Indication from Market Maker Price 101.00 % 
 Loans held for investment 1,200 Discounted Cash Flow Discount Rate 25.00 % 
 Collateral Value $ 6.3 - $ 19.8 
 
 Commitments to Lend 124 Historical Trend Closing Ratio 82.09 % 
 Pricing Model Origination Costs, per loan $ 3 
 Forward Commitments 134 Historical Trend Closing Ratio 82.09 % 
 Pricing Model Origination Costs, per loan $ 3 
 Capitalized Servicing Rights 1,966 Discounted cash flow Constant prepayment rate (CPR) 19.41 % 
 Discount rate 9.50 % 
 Total $ 15,808 

 
 
 
 Fair Value Significant
Unobservable Input
Value 
 (In thousands) December 31, 2020 Valuation Techniques Unobservable Inputs 
 Assets 
 Trading Security $ 9,708 Discounted Cash Flow Discount Rate 2.72 % 
 Securities Available for Sale 15,000 Indication from Market Maker Price 102.00 % 
 Loans held for investment 2,265 Discounted Cash Flow Discount Rate 30.00 % 
 Collateral Value $ 8.1 - $ 21.9 
 
 Commitments to Lend 735 Historical Trend Closing Ratio 74.54 % 
 Pricing Model Origination Costs, per loan $ 3 
 Forward Commitments 320 Historical Trend Closing Ratio 74.54 % 
 Pricing Model Origination Costs, per loan $ 3 
 Capitalized Servicing Rights 3,033 Discounted cash flow Constant prepayment rate (CPR) 26.52 % 
 Discount rate 10.00 % 
 
 Total $ 31,061 

 
 
 
 
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 Non-Recurring Fair Value Measurements 
 The Company is required, on a non-recurring basis, to adjust the carrying value or provide valuation allowances for certain assets using fair value measurements in accordance with GAAP. The following is a summary of applicable non-recurring fair value measurements. There are no liabilities measured on a non-recurring basis. 
 
 December 31, 2021 Fair Value Measurements as of December 31, 2021 
 (In thousands) Level 3 
Inputs Level 3 
Inputs 
 Assets 
 Individually evaluated loans $ 12,482 December 2021 
 Capitalized servicing rights 14,056 December 2021 
 Other real estate owned — December 2021 
 
 Total $ 26,538 

 
 December 31, 2020 Fair Value Measurements as of December 31, 2020 
 (In thousands) Level 3
Inputs Level 3
Inputs 
 Assets 
 Individually evaluated loans $ 28,028 December 2020 
 Capitalized servicing rights 13,315 December 2020 
 Other real estate owned 149 December 2020 
 
 Total $ 41,492 

 
 
 Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets as of December 31, 2021 and 2020 are as follows: 
 
 (in thousands) December 31, 2021 Valuation Techniques Unobservable Inputs Range (Weighted Average) (a) 
 Assets 
 Individually evaluated loans $ 12,482 Fair value of collateral Loss severity ( 35.96 )% to 133.09 % ( 49.14 %) 
 
 Appraised value $ 0 to $ 405 ($ 256 ) 
 
 Capitalized servicing rights 14,056 Discounted cash flow Constant prepayment rate (CPR) 6.24 % to 17.73 % ( 13.29 %) 
 
 Discount rate 9.59 % to 13.11 % ( 11.97 %) 
 
 
 Total Assets $ 26,538 

 (a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties. 
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 (in thousands) December 31, 2020 Valuation Techniques Unobservable Inputs Range (Weighted Average) (a) 
 Assets 
 
 Individually evaluated loans $ 28,028 Fair value of collateral Loss severity 0.07 % to 100.00 % ( 46.36 %) 
 
 Appraised value $ 0 to $ 11,432 ($ 9,800 ) 
 
 
 Capitalized servicing rights 13,315 Discounted cash flow Constant prepayment rate (CPR) 14.49 % to 23.29 % ( 16.98 %) 
 
 Discount rate 10.00 % to 11.00 % ( 10.56 %) 
 
 
 Other real estate owned 149 Fair value of collateral Appraised value $ 94 - $ 182 
 
 Total Assets $ 41,492 

 (a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties. 
 
 
 There were no Level 1 or Level 2 nonrecurring fair value measurements for year-end 2021 and 2020. 
 
 Individually evaluated loans. Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records non-recurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Non-recurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, real estate collateral related nonrecurring fair value measurement adjustments have generally been classified as Level 3. Estimates of fair value for other collateral that supports commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. 
 
 
 Capitalized loan servicing rights . A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy. 
 
 
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 Summary of Estimated Fair Values of Financial Instruments 
 The following tables summarize the estimated fair values, which represent exit price, and related carrying amounts, of the Company’s financial instruments. Certain financial instruments and all non-financial instruments are excluded from disclosure requirements. Accordingly, the aggregate fair value amounts presented herein may not necessarily represent the underlying fair value of the Company. Certain assets and liabilities in the following disclosures include balances classified as discontinued operations. 
 
 December 31, 2021 
 Carrying
Amount Fair
Value 
 (In thousands) Level 1 Level 2 Level 3 
 Financial Assets 
 
 Cash and cash equivalents $ 1,627,807 $ 1,627,807 $ 1,627,807 $ — $ — 
 Trading security 8,354 8,354 — — 8,354 
 Marketable equity securities 15,453 15,453 14,798 655 — 
 Securities available for sale 1,877,585 1,877,585 — 1,873,555 4,030 
 Securities held to maturity 636,503 647,236 — 644,497 2,739 
 FHLB stock and restricted equity securities 10,800 N/A N/A N/A N/A 
 Net loans 6,719,753 6,850,975 — — 6,850,975 
 Loans held for sale 6,110 6,110 — 6,110 — 
 Accrued interest receivable 33,534 33,534 — 33,534 — 
 
 Derivative assets 79,528 79,528 — 79,270 258 
 
 
 Financial Liabilities 
 
 Total deposits 10,068,953 10,073,217 — 10,073,217 — 
 Short-term debt — — — — — 
 Long-term FHLB advances 13,331 13,053 — 13,053 — 
 Subordinated notes 97,513 95,006 — 95,006 — 
 Derivative liabilities 35,194 35,194 — 35,194 — 
 

 
 December 31, 2020 
 Carrying
Amount Fair
Value 
 (In thousands) Level 1 Level 2 Level 3 
 
 Financial Assets 
 Cash and cash equivalents $ 1,557,875 $ 1,557,875 $ 1,557,875 $ — $ — 
 Trading security 9,708 9,708 — — 9,708 
 Marketable equity securities 18,513 18,513 17,841 672 — 
 Securities available for sale 1,695,232 1,695,232 — 1,680,232 15,000 
 Securities held to maturity 465,091 491,855 — 488,393 3,462 
 FHLB stock and restricted equity securities 34,873 N/A N/A N/A N/A 
 Net loans 7,954,217 8,243,437 — — 8,243,437 
 Loans held for sale 17,748 17,748 — 12,992 4,756 
 Accrued interest receivable 46,919 46,919 — 46,919 — 
 
 Derivative assets 160,071 160,071 — 159,016 1,055 
 Assets held for sale 317,304 317,304 — 16,705 300,599 
 
 Financial Liabilities 
 Total deposits 10,215,808 10,230,822 — 10,230,822 — 
 Short-term debt 40,000 40,025 — 40,025 — 
 Long-term FHLB advances 434,357 438,064 — 438,064 — 
 Subordinated notes 97,280 95,178 — 95,178 — 
 Derivative liabilities 65,758 65,758 — 65,758 — 
 Liabilities held for sale 630,065 631,268 — 631,268 — 

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 NOTE 22. CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY 
 
 Condensed financial information pertaining only to the Parent, Berkshire Hills Bancorp, is as follows. 
 
 
 CONDENSED BALANCE SHEETS 
 
 December 31, 
 (In thousands) 2021 2020 
 Assets 
 Cash due from Berkshire Bank $ 108,946 $ 83,510 
 Investment in subsidiaries 1,172,439 1,202,755 
 Marketable equity securities, at fair value — 158 
 Other assets 213 188 
 Total assets $ 1,281,598 $ 1,286,611 
 
 Liabilities and Shareholders’ Equity 
 
 Subordinated notes $ 97,513 $ 97,280 
 Accrued expenses 1,650 1,558 
 Shareholders’ equity 1,182,435 1,187,773 
 Total liabilities and shareholders’ equity $ 1,281,598 $ 1,286,611 

 
 CONDENSED STATEMENTS OF OPERATIONS 
 
 Years Ended December 31, 
 (In thousands) 2021 2020 2019 
 Income: 
 Dividends from subsidiaries $ 118,000 $ 46,300 $ 104,700 
 Other 31 ( 2,185 ) 1,258 
 Total income 118,031 44,115 105,958 
 Interest expense 5,393 5,335 5,335 
 Non-interest expenses 2,719 2,866 4,129 
 Total expense 8,112 8,201 9,464 
 Income before income taxes and equity in undistributed income of subsidiaries 109,919 35,914 96,494 
 Income tax (benefit) ( 2,136 ) ( 2,719 ) ( 2,054 ) 
 Income before equity in undistributed income of subsidiaries 112,055 38,633 98,548 
 Equity in undistributed results of operations of subsidiaries 6,609 ( 571,650 ) ( 1,098 ) 
 
 Net income/(loss) 118,664 ( 533,017 ) 97,450 
 Preferred stock dividend — 313 960 
 Income/(loss) available to common shareholders $ 118,664 $ ( 533,330 ) $ 96,490 
 
 Comprehensive income/(loss) $ 84,550 $ ( 514,139 ) $ 122,912 

 
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 CONDENSED STATEMENTS OF CASH FLOWS 
 
 Years Ended December 31, 
 (In thousands) 2021 2020 2019 
 Cash flows from operating activities: 
 Net income/(loss) $ 118,664 $ ( 533,017 ) $ 97,450 
 Adjustments to reconcile net income to net cash (used) provided by operating activities: 
 Equity in undistributed results of operations of subsidiaries ( 6,609 ) 571,650 1,098 
 Other, net 5,816 2,603 ( 4,457 ) 
 Net cash provided by operating activities 117,871 41,236 94,091 
 
 Cash flows from investing activities: 
 Advances to subsidiaries — — — 
 
 Purchase of securities — ( 489 ) — 
 Sale of securities 167 4,658 6,989 
 Other, net — — 987 
 Net cash provided by investing activities 167 4,169 7,976 
 
 Cash flows from financing activities: 
 Proceed from issuance of short term debt 232 231 431 
 Proceed from repayment of long term debt — — — 
 
 Net proceeds from common stock — — — 
 
 
 Payment to repurchase common stock ( 68,712 ) ( 473 ) ( 52,746 ) 
 Common stock cash dividends paid ( 24,553 ) ( 36,251 ) ( 44,147 ) 
 Preferred stock cash dividends paid — ( 313 ) ( 960 ) 
 Other, net 431 758 188 
 Net cash (used) in financing activities ( 92,602 ) ( 36,048 ) ( 97,234 ) 
 
 Net change in cash and cash equivalents 25,436 9,357 4,833 
 
 Cash and cash equivalents at beginning of year 83,510 74,153 69,320 
 
 Cash and cash equivalents at end of year $ 108,946 $ 83,510 $ 74,153 

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 NOTE 23. QUARTERLY DATA (UNAUDITED) 
 
 Quarterly results of operations were as follows: 
 
 2021 2020 
 (In thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter 
 Interest and dividend income $ 75,860 $ 79,688 $ 85,364 $ 88,153 $ 92,131 $ 97,768 $ 103,688 $ 116,195 
 Interest expense 6,548 8,320 9,971 13,060 16,422 20,713 26,098 29,767 
 Net interest income 69,312 71,368 75,393 75,093 75,709 77,055 77,590 86,428 
 Non-interest income 21,409 73,635 22,011 26,193 23,327 19,963 17,381 5,636 
 Total revenue 90,721 145,003 97,404 101,286 99,036 97,018 94,971 92,064 
 Provision (benefit) for credit losses ( 3,000 ) ( 4,000 ) — 6,500 10,000 1,200 29,871 34,807 
 Non-interest expense 69,407 69,460 68,872 78,154 71,796 72,843 624,275 71,325 
 Income/(loss) from continuing operations before income taxes 24,314 79,543 28,532 16,632 17,240 22,975 ( 559,175 ) ( 14,068 ) 
 Income tax expense/(benefit) 4,066 15,794 6,896 3,601 ( 1,659 ) ( 68 ) ( 16,130 ) ( 1,996 ) 
 Net income/(loss) from continuing operations 20,248 63,749 21,636 13,031 18,899 23,043 ( 543,045 ) ( 12,072 ) 
 (Loss)/income from discontinued operations, net of tax — — — — ( 3,890 ) ( 1,818 ) ( 6,336 ) ( 7,798 ) 
 Net income/(loss) $ 20,248 $ 63,749 $ 21,636 $ 13,031 $ 15,009 $ 21,225 $ ( 549,381 ) $ ( 19,870 ) 
 
 Basic earnings/(loss) per share: 
 Continuing operations $ 0.42 $ 1.32 $ 0.43 $ 0.26 $ 0.38 $ 0.46 $ ( 10.80 ) $ ( 0.24 ) 
 Discontinued operations — — — — ( 0.08 ) ( 0.04 ) ( 0.13 ) ( 0.16 ) 
 Basic earnings/(loss) per common share $ 0.42 $ 1.32 $ 0.43 $ 0.26 $ 0.30 $ 0.42 $ ( 10.93 ) $ ( 0.40 ) 
 
 Diluted earnings/(loss) per share: 
 Continuing operations $ 0.42 $ 1.31 $ 0.43 $ 0.26 $ 0.38 $ 0.46 $ ( 10.80 ) $ ( 0.24 ) 
 Discontinued operations — — — — ( 0.08 ) ( 0.04 ) ( 0.13 ) ( 0.16 ) 
 Diluted earnings/(loss) per share $ 0.42 $ 1.31 $ 0.43 $ 0.26 $ 0.30 $ 0.42 $ ( 10.93 ) $ ( 0.40 ) 
 
 Weighted average common shares outstanding: 
 Basic 47,958 48,395 50,321 50,330 50,308 50,329 50,246 50,204 
 Diluted 48,340 48,744 50,608 50,565 50,355 50,329 50,246 50,204 

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 NOTE 24. NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 
 
 Presented below is net interest income after provision for credit losses for the three years ended 2021, 2020, and 2019, respectively: 
 
 Years Ended December 31, 
 (In thousands) 2021 2020 2019 
 Net interest income $ 291,166 $ 316,782 $ 365,258 
 Provision (benefit) for credit losses ( 500 ) 75,878 35,419 
 Net interest income after provision for credit losses 291,666 240,904 329,839 
 Total non-interest income 143,248 66,307 84,002 
 Total non-interest expense 285,893 840,239 289,857 
 Income/(loss) from continuing operations before income taxes 149,021 ( 533,028 ) 123,984 
 Income tax expense/(benefit) 30,357 ( 19,853 ) 22,463 
 Net income/(loss) from continuing operations 118,664 ( 513,175 ) 101,521 
 (Loss) from discontinued operations before income taxes — ( 26,855 ) ( 5,539 ) 
 Income tax (benefit) — ( 7,013 ) ( 1,468 ) 
 Net (loss) from discontinued operations — ( 19,842 ) ( 4,071 ) 
 Net income/(loss) $ 118,664 $ ( 533,017 ) $ 97,450 

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 NOTE 25. REVENUE 
 
 
 Revenue from contracts with customers in the scope of Topic 606 is recognized within noninterest income. The Company does not have any material significant payment terms as payment is received at or shortly after the satisfaction of the performance obligation. The value of unsatisfied performance obligations for contracts with an original expected length of one year or less are not disclosed. The Company recognizes incremental costs of obtaining contracts as an expense when incurred for contracts with a term of one year or less. 
 
 
 Topic 606 does not apply to revenue associated with financial instruments, including revenue from loans and securities. In addition, certain non-interest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of Topic 606. Topic 606 is applicable to non-interest revenue streams such as wealth management fees, insurance commissions and fees, administrative services for customer deposit accounts, interchange fees, and sale of owned real estate properties. 
 
 
 The following presents non-interest income, segregated by revenue streams in-scope and out-of-scope of Topic 606, for the years ended 2021, 2020, and 2019, respectively. 
 
 Years Ended December 31, 
 (In thousands) 2021 2020 2019 
 Non-interest income 
 In-scope of Topic 606: 
 
 Service charges on deposit accounts 
 $ 20,249 $ 19,239 $ 23,122 
 Insurance commissions and fees 
 7,003 10,770 10,957 
 Wealth management fees 
 10,530 9,285 9,353 
 Interchange income 
 8,321 7,559 6,266 
 Non-interest income (in-scope of Topic 606) 
 $ 46,103 $ 46,853 $ 49,698 
 Non-interest income (out-of-scope of Topic 606) 
 97,145 19,454 34,304 
 Total non-interest income from continuing operations $ 143,248 $ 66,307 $ 84,002 

 
 
 Non-interest income streams in-scope of Topic 606 are discussed below. 
 
 
 Service Charges on Deposit Accounts. Service charges on deposit accounts consist of monthly service fees (i.e. business analysis fees and consumer service charges) and other deposit account related fees. The Company's performance obligation for monthly service fees is generally satisfied, and the related revenue recognized, over the period in which the service is provided. Other deposit account related fees are largely transactional based, and therefore, the Company's performance obligation is satisfied, and related revenue recognized, at a point in time. Payment for service charges on deposit accounts is primarily received immediately or in the following month through a direct charge to customers’ accounts. The Company may, from time to time, waive certain fees (e.g., NSF fee) for customers but generally do not reduce the transaction price to reflect variability for future reversals due to the insignificance of the amounts. Waiver of fees reduces the revenue in the period the waiver is granted to the customer. 
 
 
 Insurance Commissions and Fees. Commission revenue is recognized as of the effective date of the insurance policy or the date the customer is billed, whichever is later, net of return commissions related to policy cancellations. Policy cancellation is a variable consideration that is not deemed significant and thus, does not impact the amount of revenue recognized. 
 
 
 In addition, the Company may receive additional performance commissions based on achieving certain sales and loss experience measures. Such commissions are recognized when determinable, which is generally when such commissions are received or when the Company receives data from the insurance companies that allows the reasonable estimation of these amounts. 
 
 
 
 
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 Wealth Management Fees. Wealth management fees are primarily comprised of fees earned from consultative investment management, trust administration, tax return preparation, and financial planning. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based on the daily accrual of the market value of the investment accounts and the applicable fee rate. 
 
 
 Interchange Fees. Interchange fees are transaction fees paid to the card-issuing bank to cover handling costs, fraud and bad debt costs, and the risk involved in approving the payment. Due to the day-to-day nature of these fees they are settled on a daily basis and are accounted for as they are received. 
 
 
 Gains/Losses on Sales of OREO. The sale of OREO and other nonfinancial assets are accounted for with the derecognition of the asset in question once a contract exists and control of the asset has been transferred to the buyer. The gain or loss on the sale is calculated as the difference between the carrying value of the asset and the transaction price. 
 
 
 
 
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Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.
Beacon Financial Corp 10-K

Item 9A. Controls and Procedures
