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, 2023. 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 2024 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 53 President and Chief Executive Officer of the Company; Chief Executive Officer - Berkshire Bank; Director of Berkshire Hills Bancorp and Berkshire Bank 
 Sean A. Gray 47 Senior Executive Vice President, Chief Operating Officer; President - Berkshire Bank 
 David Rosato 62 Senior Executive Vice President, Chief Financial Officer 
 James Brown 58 Senior Executive Vice President, Head of Commercial Banking 
 Jacqueline Courtwright 60 Senior Executive Vice President, Chief Human Resources and Culture Officer 
 Ashlee Flores 39 Executive Vice President, Chief Compliance Officer 
 Philip Jurgeleit 54 Executive Vice President, Chief Credit Officer 
 Gregory D. Lindenmuth 56 Senior Executive Vice President, Chief Risk Officer 
 Andrew Plumridge 51 Executive Vice President, Chief Internal Audit Officer 
 Wm. Gordon Prescott 62 Senior Executive Vice President, General Counsel and Corporate Secretary 
 Sumant Pustake 39 Executive Vice President, Chief Transformation & Strategy Officer 
 Ellen Steinfeld 62 Senior Executive Vice President, Head of Consumer Lending & Payments 
 Jason T. White 48 Senior 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 53. 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 47. Mr. Gray was appointed to the role of Senior Executive Vice President, Chief Operating Officer; 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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 David Rosato. Age 62. Mr. Rosato joined the Company in February 2023 as Senior Executive Vice President, Chief Financial Officer. He spent the last 15 years with People’s United Financial, Inc., eight of which as Chief Financial Officer. Prior to joining People’s United, Mr. Rosato worked at Webster Financial Corporation, including serving as its Treasurer, and M&T Bank Corporation. Mr. Rosato is a former board member of the Federal Home Loan Bank of Boston. 
 
 
 James Brown. Age 58. Mr. Brown joined the Company in January 2023 as Senior Executive Vice President, Commercial Banking. Mr. Brown is responsible for all aspects of commercial banking operations, including the middle-market, business banking and asset based lending teams. Previously, he spent more than 20 years at Boston Private Bank & Trust Company in multiple senior executive roles including Co-President, EVP, Head of Commercial Banking and Credit Administration, and Chief Lending Officer. He served with Silicon Valley Bank as Head of Specialty Commercial within the Private Bank, following the acquisition of Boston Private in 2021. 
 
 
 Jacqueline Courtwright. Age 60. Ms. Courtwright is Senior Executive Vice President, Chief Human Resources and has served as Culture Officer since September 2020. 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. 
 
 
 Ashlee Flores. Age 39. Ms. Flores was promoted to Executive Vice President, Chief Compliance Officer in September 2022. She oversees all aspects of the compliance risk management program, including compliance with the Bank Secrecy Act, Community Reinvestment Act, consumer protection laws and regulations, as well as the Security and Fraud Investigations functions. Ms. Flores previously served as SVP, Compliance, where she oversaw Berkshire Bank's compliance program. Prior to joining Berkshire Bank, Ms. Flores was a compliance officer at Hampden Bank in Springfield, MA where she managed the compliance and audit program. 
 
 
 Philip Jurgeleit. Age 54. Mr. Jurgeleit joined the Company in January 2023 as Executive Vice President, Chief Credit Officer. He oversees all aspects of the company's credit underwriting, policy, and approval processes. Mr. Jurgeleit most recently served as SVP and Senior Director of Credit Risk at Santander Bank where he was responsible for all aspects of credit risk management including credit approval, asset quality, underwriting guidelines, and credit policies for the Middle Market, Mid-Corporate, Asset Based Lending, and Healthcare/Not-for-Profit business units. He also held senior leadership roles at Citizens Bank, Webster Bank and Bank of America. 
 
 
 Gregory D. Lindenmuth. Age 56. 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. 
 

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 Andrew Plumridge. Age 51 . Mr. Plumridge joined the Company in July 2023 as Executive Vice President, Chief Internal Audit Officer. He reports to the Audit Committee of the Board and administratively to the CEO. Mr. Plumridge previously served as Senior Vice President and General Auditor of Boston Private Financial Holdings, Inc. Prior to joining Boston Private, Plumridge held senior audit and consulting positions with State Street Corporation and PwC. 
 
 
 Wm. Gordon Prescott, Age 62. Mr. Prescott is Senior Executive Vice President, General Counsel and Corporate Secretary, 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. 
 
 
 Sumant Pustake. Age 39. Mr. Pustake was promoted to Executive Vice President in February 2023 and has served as Chief Transformation and Strategy Officer since June 2021. Mr. Pustake previously oversaw Berkshire's corporate development efforts, where he served as the development leader and helped define and realize Berkshire’s vision and growth strategy. Prior to joining Berkshire Bank, he served as Vice President, Head of Corporate Credit for Commerce Bank and Trust at the time of its acquisition by Berkshire in 2017. 
 
 
 Ellen Steinfeld, Age 62. Ms. Steinfeld is Senior 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 48. Mr. White is Senior Executive Vice President and was named 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, 2023, 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 
 49,200 $ 26.46 1,158,196 
 Equity compensation plans not approved by security holders 
 — — — 
 
 Total 49,200 $ 26.46 1,158,196 

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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, 2023 and 2022 
 • Consolidated Statements of Income for the Years Ended December 31, 2023, 2022, and 2021 
 • Consolidated Statements of Comprehensive Income/(Loss) for the Years Ended December 31, 2023, 2022, and 2021 
 • Consolidated Statements of Changes in Stockholders' Equity for the Years Ended December 31, 2023, 2022, and 2021 
 • Consolidated Statements of Cash Flows for the Years Ended December 31, 2023, 2022, and 2021 
 • 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 Amended Certificate of Incorporation of Berkshire Hills Bancorp, Inc. (1) 
 
 3.2 Amended and Restated Bylaws of Berkshire Hills Bancorp, Inc. (2) 
 
 3.4 Certificate of Designations of the Series B Non-Voting Preferred Stock (3) 
 
 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 Brett Brbovic (12) 
 
 10.7 Form of Split Dollar Agreement entered into with Sean A. Gray (13) 
 
 10.8 Berkshire Bank Executive Long-Term Care Insurance Plan (14) 
 
 10.9 Berkshire Hills Bancorp, Inc. 2018 Equity Incentive Plan (15) 
 
 10.10 Senior Executive Short Term Incentive Plan (16) 
 
 10.11 Berkshire Hills Bancorp, Inc. 2022 Equity Incentive Plan (17) 
 
 21.0 Subsidiary Information 
 
 23.1 Consent of Crowe LLP 
 
 31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 
 
 31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 
 
 32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 
 
 32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 
 
 97 Berkshire Hills Bancorp, Inc. Clawback Policy 
 
 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/(Loss), (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements tagged as blocks of text and in detail 
 

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 (1) Incorporated herein by reference from the Exhibits to Form 10-Q as filed on August 9, 2018 
 (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 Form S-1, Registration Statement and amendments thereto, initially filed on March 10, 2000, Registration No. 333-32146. 
 (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. 
 (17) Incorporated herein by reference from the Appendix to the Proxy Statement as filed on April 8, 2022. 

 
 
 
 
 
 
 
 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: February 28, 2024 
 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 February 28, 2024 
 Nitin J. Mhatre (principal executive officer) 
 /s/ R. David Rosato Senior Executive Vice President, Chief Financial Officer February 28, 2024 
 R. David Rosato (principal financial officer) 
 /s/ David M. Brunelle Chairperson February 28, 2024 
 David M. Brunelle 
 /s/ Baye Adofo-Wilson Director February 28, 2024 
 Baye Adofo-Wilson 
 /s/ Mary Anne Callahan 
 Director February 28, 2024 
 Mary Anne Callahan 
 /s/ Nina A. Charnley Director February 28, 2024 
 Nina A. Charnley 
 /s/ Mihir A. Desai Director February 28, 2024 
 Mihir A. Desai 
 /s/ William H. Hughes, III Director February 28, 2024 
 William H. Hughes, III 
 /s/ Jeffrey W. Kip Director February 28, 2024 
 Jeffrey W. Kip 
 /s/ Sylvia Maxfield Director February 28, 2024 
 Sylvia Maxfield 
 /s/ Laurie Norton Moffatt Director February 28, 2024 
 Laurie Norton Moffatt 
 /s/ Karyn Polito Director February 28, 2024 
 Karyn Polito 
 /s/ Eric S. Rosengren 
 Director February 28, 2024 
 Eric S. Rosengren 
 
 /s/ Michael A. Zaitzeff Director February 28, 2024 
 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, 2023, 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, 2023 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, 2023 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, 2023. 
 
 
 
 
 /s/ Nitin J. Mhatre /s/ R. David Rosato 
 Nitin J. Mhatre R. David Rosato 
 President & Chief Executive Officer Senior Executive Vice President & Chief Financial Officer 
 February 28, 2024 February 28, 2024 
 
 
 

 
 
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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, 2023 and 2022, the related consolidated statements of income, comprehensive income/(loss), changes in shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2023, 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, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2023 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, 2023, based on criteria established in Internal Control – Integrated Framework: (2013) issued by COSO. 
 
 
 Basis for Opinions 
 
 
 The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. 
 
 
 We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. 
 
 
 
 
 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. 
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 Definition and Limitations of Internal Control Over Financial Reporting 
 
 
 A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. 
 
 
 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 
 
 
 Critical Audit Matter 
 
 
 The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. 
 
 
 Allowance for Credit Losses on loans 
 
 
 The estimate of expected credit losses is based on relevant information about current conditions, past events, and reasonable and supportable forward-looking forecasts regarding collectability of the reported amounts. In order to estimate the expected credit losses for loans evaluated on a pooled basis, the Company utilizes a static pool migration methodology which calculates a historical loss rate for each of the identified loan segments. The historical loss rates are then adjusted for current and asset specific characteristics (also referred to as qualitative adjustments) and for expected changes to current conditions over the reasonable and supportable forecast period (also referred to as forecast). Each of these key components of the allowance for credit loss calculation is complex and requires a high volume of data input. 
 
 
 Auditing the allowance for credit losses was especially challenging and identified by us as a critical audit matter given the high volume of data inputs and judgements made by management. Auditing the allowance for credit loss calculation involved significant audit effort, including the involvement of experienced audit personnel. 
 
 
 
 
 The primary procedures we performed to address this critical audit matter included: 
 
 
 Testing the effectiveness of internal controls over management’s allowance for credit loss calculation including the design and operating effectiveness to address: 
 
 
 • Completeness and accuracy of the reports utilized within the allowance for credit loss calculation. 
 • The mathematical accuracy of the allowance for credit loss calculation. 
 • The accuracy of application of information within the allowance for credit loss calculation. 
 • Significant assumptions and judgements applied within the allowance for credit loss calculation. 
 
 
 
 
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 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 
 February 28, 2024 
 
 
 
 
 F-4 

 
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 BERKSHIRE HILLS BANCORP, INC. 
 CONSOLIDATED BALANCE SHEETS 

 
 December 31, 
 (In thousands, except share data) 2023 2022 
 Assets 
 Cash and due from banks $ 148,148 $ 145,342 
 Short-term investments 1,055,096 540,013 
 Total cash and cash equivalents 1,203,244 685,355 
 
 Trading security 6,142 6,708 
 Marketable equity securities, at fair value 13,029 12,856 
 Securities available for sale, at fair value 1,022,285 1,423,200 
 Securities held to maturity (fair values of $ 476,228 in 2023 and $ 507,464 in 2022) 
 543,351 583,453 
 Federal Home Loan Bank stock and other restricted securities 22,689 7,219 
 Total securities 1,607,496 2,033,436 
 Less: Allowance for credit losses on investment ( 68 ) ( 91 ) 
 Net Securities 1,607,428 2,033,345 
 
 Loans held for sale 2,237 4,311 
 
 
 
 
 
 Total loans 9,039,686 8,335,309 
 Less: Allowance for credit losses on loans ( 105,357 ) ( 96,270 ) 
 Net loans 8,934,329 8,239,039 
 
 Premises and equipment, net 68,915 85,217 
 
 
 Other intangible assets 19,664 24,483 
 Cash surrender value of bank-owned life insurance 242,309 238,919 
 
 Other assets 341,757 348,935 
 Assets held for sale 10,938 3,260 
 
 Total assets $ 12,430,821 $ 11,662,864 
 
 Liabilities 
 Demand deposits $ 2,469,164 $ 2,852,127 
 NOW and other deposits 858,644 1,054,596 
 Money market deposits 3,565,516 3,723,570 
 Savings deposits 1,053,810 1,063,269 
 Time deposits 2,686,250 1,633,707 
 Total deposits 10,633,384 10,327,269 
 Short-term debt 260,000 — 
 Long-term Federal Home Loan Bank advances 125,223 4,445 
 Subordinated notes 121,363 121,064 
 Total borrowings 506,586 125,509 
 Other liabilities 278,630 256,024 
 
 
 Total liabilities 11,418,600 10,708,802 
 
 
 

 (continued) 
 
 December 31, 
 (In thousands, except share data) 2023 2022 
 Shareholders’ equity 
 
 Common stock ($ 0.01 par value; 100,000,000 shares authorized and 51,903,190 shares issued and 43,500,872 shares outstanding in 2023; 100,000,000 shares authorized; 51,903,190 shares issued, and 44,361,222 shares outstanding in 2022) 
 $ 528 $ 528 
 Additional paid-in capital - common stock 1,423,273 1,424,183 
 Unearned compensation ( 10,109 ) ( 8,598 ) 
 Retained (deficit) ( 33,136 ) ( 71,428 ) 
 Accumulated other comprehensive (loss) ( 143,016 ) ( 181,052 ) 
 Treasury stock, at cost ( 8,402,318 shares in 2023 and 7,541,968 shares in 2022) 
 ( 225,319 ) ( 209,571 ) 
 Total shareholders’ equity 1,012,221 954,062 
 Total liabilities and shareholders’ equity $ 12,430,821 $ 11,662,864 

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

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

 
 Years Ended December 31, 
 (In thousands) 2023 2022 2021 
 Interest and dividend income 
 Loans $ 512,535 $ 335,312 $ 282,164 
 Securities and other 63,764 51,945 46,901 
 Total interest and dividend income 576,299 387,257 329,065 
 Interest expense 
 Deposits 158,913 33,437 27,236 
 Borrowings and subordinated notes 48,339 9,223 10,663 
 Total interest expense 207,252 42,660 37,899 
 Net interest income 369,047 344,597 291,166 
 Non-interest income 
 Deposit related fees 34,155 32,026 29,813 
 Loan related fees 10,595 9,467 16,427 
 Gain on SBA loan sales 10,334 12,494 20,689 
 Insurance commissions and fees — — 7,003 
 Wealth management fees 10,197 10,008 10,530 
 Total fee income 65,281 63,995 84,462 
 Other 2,045 6,973 6,631 
 Fair value adjustments on securities 513 ( 2,037 ) ( 787 ) 
 (Loss)/gain on sale of AFS securities ( 25,057 ) 6 — 
 Gain on sale of business operations and assets, net — — 52,942 
 
 Total non-interest income 42,782 68,937 143,248 
 Total net revenue 411,829 413,534 434,414 
 Provision expense/(benefit) for credit losses 31,999 11,000 ( 500 ) 
 Non-interest expense 
 Compensation and benefits 159,281 152,741 150,589 
 Occupancy and equipment 35,718 37,638 41,782 
 Technology and communications 41,878 35,586 33,803 
 Marketing and promotion 5,377 5,103 2,749 
 Professional services 11,643 12,043 15,860 
 FDIC premiums and assessments 7,019 3,105 3,759 
 Other real estate owned and foreclosures 15 36 17 
 Amortization of intangible assets 4,820 5,134 5,200 
 
 Merger, restructuring and conversion related expenses 6,261 8,909 5,781 
 Other 29,496 28,421 26,353 
 Total non-interest expense 301,508 288,716 285,893 
 Income before income taxes 78,322 113,818 149,021 
 Income tax expense 8,724 21,285 30,357 
 Net income $ 69,598 $ 92,533 $ 118,664 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Basic earnings per share $ 1.61 $ 2.03 $ 2.41 
 
 
 
 
 Diluted earnings per share $ 1.60 $ 2.02 $ 2.39 
 
 Weighted average common shares outstanding: 
 Basic 43,288 45,564 49,240 
 Diluted 43,504 45,914 49,554 

 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) 2023 2022 2021 
 Net income $ 69,598 $ 92,533 $ 118,664 
 Other comprehensive income/(loss), before tax: 
 Changes in unrealized gains and losses on securities available-for-sale 47,960 ( 235,081 ) ( 46,794 ) 
 Changes in unrealized gains and losses on cash flow hedges 2,402 ( 6,667 ) — 
 
 Changes in unrealized gains and losses on pension 316 1,674 993 
 Total other comprehensive income/(loss), before tax 50,678 ( 240,074 ) ( 45,801 ) 
 Income taxes related to other comprehensive income/(loss): 
 Changes in unrealized gains and losses on securities available-for-sale ( 11,928 ) 60,922 11,937 
 Changes in unrealized gains and losses on cash flow hedges ( 630 ) 1,789 — 
 
 Changes in unrealized gains and losses on pension ( 84 ) ( 446 ) ( 250 ) 
 Total income tax (expense)/benefit related to other comprehensive income/(loss) ( 12,642 ) 62,265 11,687 
 Total other comprehensive income/(loss) 38,036 ( 177,809 ) ( 34,114 ) 
 Total comprehensive income/(loss) $ 107,634 $ ( 85,276 ) $ 84,550 

 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 

 
 Common Stock Additional paid-in Unearned Retained
(deficit) Accumulated other comprehensive Treasury 
 (In thousands, except per share data) Shares Amount capital compensation earnings (loss) income stock Total 
 Balance at January 1, 2021 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 on 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 
 
 Comprehensive (loss): 
 Net income — — — — 92,533 — — 92,533 
 Other net comprehensive (loss) — — — — — ( 177,809 ) — ( 177,809 ) 
 Total comprehensive (loss) — — — — 92,533 ( 177,809 ) — ( 85,276 ) 
 Cash dividends declared on common shares ($ 0.54 per share) 
 — — — — ( 24,527 ) — — ( 24,527 ) 
 
 Treasury stock purchased ( 4,485 ) — — — — — ( 124,519 ) ( 124,519 ) 
 Forfeited shares ( 98 ) — 189 2,560 — — ( 2,749 ) — 
 Exercise of stock options 12 — — — ( 51 ) — 321 270 
 Restricted stock grants 328 — 537 ( 9,440 ) — — 8,903 — 
 Stock-based compensation — — — 7,338 — — — 7,338 
 Other, net ( 63 ) — 12 — — — ( 1,671 ) ( 1,659 ) 
 Balance at December 31, 2022 44,361 $ 528 $ 1,424,183 $ ( 8,598 ) $ ( 71,428 ) $ ( 181,052 ) $ ( 209,571 ) $ 954,062 
 
 Comprehensive income: 
 Net income — — — — 69,598 — — 69,598 
 Other net comprehensive income — — — — — 38,036 — 38,036 
 Total comprehensive income — — — — 69,598 38,036 — 107,634 
 Impact of ASU No. 2022-02 Adoption — — — — 401 — — 401 
 
 Cash dividends declared common shares ($ 0.72 per share) 
 — — — — ( 31,707 ) — — ( 31,707 ) 
 
 Treasury stock purchased ( 1,135 ) — — — — — ( 23,844 ) ( 23,844 ) 
 Forfeited shares ( 103 ) — ( 184 ) 2,657 — — ( 2,473 ) — 
 Exercise of stock options — — — — — — — — 
 Restricted stock grants 446 — ( 568 ) ( 11,666 ) — — 12,234 — 
 Stock-based compensation — — — 7,498 — — — 7,498 
 Other, net ( 68 ) — ( 158 ) — — — ( 1,665 ) ( 1,823 ) 
 Balance at December 31, 2023 43,501 $ 528 $ 1,423,273 $ ( 10,109 ) $ ( 33,136 ) $ ( 143,016 ) $ ( 225,319 ) $ 1,012,221 

 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) 2023 2022 2021 
 Cash flows from operating activities: 
 
 
 Net income $ 69,598 $ 92,533 $ 118,664 
 Adjustments to reconcile net income to net cash provided by operating activities: 
 Provision expense/(benefit) for credit losses 31,999 11,000 ( 500 ) 
 Net amortization of securities 1,451 2,886 1,939 
 Change in unamortized net loan origination costs and premiums 764 3,312 ( 1,918 ) 
 Premises and equipment depreciation and amortization expense 8,445 9,576 11,035 
 Stock-based compensation expense 7,498 7,338 4,170 
 Accretion of purchase accounting entries, net ( 716 ) ( 1,637 ) ( 6,577 ) 
 Amortization of other intangibles 4,820 5,134 5,200 
 
 Income from cash surrender value of bank-owned life insurance policies ( 5,392 ) ( 5,540 ) ( 5,561 ) 
 Securities losses/(gains), net 24,544 2,031 787 
 (Gain) on SBA loan sales ( 10,334 ) ( 12,494 ) ( 20,689 ) 
 Net change in loans held-for-sale 2,074 5,168 5,775 
 
 
 Loss on disposition of assets — — 2,811 
 Loss on sale of real estate — — 6 
 Amortization of interest in tax-advantaged projects 8,018 3,508 3,444 
 
 
 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 14,387 ( 12,076 ) 18,282 
 
 
 Net cash provided by operating activities $ 157,156 $ 110,739 $ 84,788 
 
 Cash flows from investing activities: 
 Net decrease in trading security 860 818 776 
 
 Proceeds from sales of marketable equity securities — — 2,880 
 Purchases of securities available for sale ( 44,586 ) ( 478,940 ) ( 804,616 ) 
 Proceeds from sales of securities available for sale 267,199 149,994 — 
 Proceeds from maturities, calls, and prepayments of securities available for sale 201,624 548,423 575,538 
 Purchases of securities held to maturity ( 700 ) ( 807 ) ( 219,470 ) 
 Proceeds from maturities, calls, and prepayments of securities held to maturity 39,193 51,961 46,061 
 Net change in loans ( 716,591 ) ( 1,546,518 ) 1,283,210 
 Net change in Mid-Atlantic region loans held for sale — — 50,914 
 
 Proceeds from surrender of bank-owned life insurance 2,002 2,311 2,566 
 
 Purchase of Federal Home Loan Bank stock ( 494,159 ) ( 124,331 ) — 
 Proceeds from sales of Federal Home Loan Bank stock 478,689 127,912 24,078 
 Net investment in limited partnership tax credits ( 16,172 ) ( 14,537 ) ( 2,878 ) 
 Purchase of premises and equipment, net ( 1,820 ) ( 1,495 ) ( 1,606 ) 
 Proceeds from sales of seasoned commercial loan portfolios — 24,323 16,417 
 
 Proceeds from sales of other real estate owned — — 187 
 Cash outflows from sale of business operations and other assets — — ( 352,814 ) 
 
 Net cash (used)/provided by investing activities $ ( 284,461 ) $ ( 1,260,886 ) $ 621,243 
 
 (Continued) 

 F-9 

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

 
 Years Ended December 31, 
 (In thousands) 2023 2022 2021 
 Cash flows from financing activities: 
 Net increase in deposits $ 306,115 $ 258,316 $ ( 154,052 ) 
 Net change in Mid-Atlantic region deposits held for sale — — 20,953 
 Proceeds from Federal Home Loan Bank advances and other borrowings 10,450,979 51,275 — 
 Repayments of Federal Home Loan Bank advances and other borrowings ( 10,070,200 ) ( 60,196 ) ( 462,059 ) 
 
 Proceeds from issuance of subordinated debt — 98,032 — 
 Repayment from calling of subordinated debt — ( 75,000 ) — 
 Purchase of treasury stock ( 23,844 ) ( 124,519 ) ( 68,712 ) 
 Exercise of stock options — 270 417 
 Common and preferred stock cash dividends paid ( 31,707 ) ( 24,527 ) ( 24,553 ) 
 Settlement of derivative contracts with financial institution counterparties 13,851 84,044 51,907 
 
 Net cash provided/(used) by financing activities $ 645,194 $ 207,695 $ ( 636,099 ) 
 
 Net change in cash and cash equivalents 517,889 ( 942,452 ) 69,932 
 
 Cash and cash equivalents at beginning of year 685,355 1,627,807 1,557,875 
 
 Cash and cash equivalents at end of year 1,203,244 685,355 1,627,807 
 
 Supplemental cash flow information: 
 Interest paid on deposits $ 148,313 $ 32,782 $ 29,606 
 Interest paid on borrowed funds 46,584 9,043 11,385 
 Income taxes paid, net 
 12,307 28,439 14,816 
 
 
 
 
 
 Other non-cash changes: 
 Other net comprehensive income/(loss) 
 $ 38,036 $ ( 177,809 ) $ ( 34,114 ) 
 Impact to retained earnings from adoption of ASU 2022-02 401 — — 
 
 
 Premises and equipment reclassified to held-for-sale 8,714 1,380 4,577 
 Mid-Atlantic loans held-for-sale reclassified to portfolio loans, net — — 29,418 
 Mid-Atlantic deposits held-for-sale reclassified to deposits, net — — 7,197 
 Seasoned loan portfolios reclassified to held-for-sale, net — 3,369 11,660 
 Held-for-sale loans reclassified to held-for-investment, net — 606 — 
 
 Premium payable on cash flow hedges — 2,296 — 
 

 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, 2023, 2022, and 2021 
 
 
 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 
 
 
 Basis of Presentation and Consolidation 
 The Consolidated Financial Statements (the “financial statements”) of Berkshire Hills Bancorp, Inc. and its subsidiaries (the “Company” or “Berkshire”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). The Company is a Delaware corporation, headquartered in Boston, Massachusetts, and the holding company for Berkshire Bank (the “Bank”), a Massachusetts-chartered trust company headquartered in Pittsfield, Massachusetts. These financial statements include the accounts of the Company, its wholly-owned subsidiaries and the Bank’s consolidated subsidiaries. In consolidation, all significant intercompany accounts and transactions are eliminated. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly-owned and majority-owned subsidiaries are consolidated unless GAAP requires otherwise. 
 
 
 The Company has evaluated subsequent events for potential recognition and/or disclosure through the date these financial statements were issued. 
 
 
 Reclassification 
 Certain items in prior financial statements have been reclassified to conform to the current presentation. 
 
 
 Use of Estimates 
 The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements. Actual results could differ from those estimates. 
 
 
 Cash and Cash equivalents 
 Cash and cash equivalents include cash, balances due from banks, and short-term investments, all of which had an original maturity within 90 days. Due to the nature of cash and cash equivalents and the near term maturity, the Company estimated that the carrying amount of such instruments approximated fair value. The nature of the Bank’s business requires that it maintain amounts due from banks which at times, may exceed federally insured limits. The Bank has not experienced any losses on such amounts and all amounts are maintained with well-capitalized institutions. 
 
 
 Trading Security 
 The Company accounts for a tax advantaged economic development bond originated in 2008 at fair value, in accordance with Financial Accounting Standards Board’s (“FASB”) Accounting Standards Codification (“ASC”) 320. The bond has been designated as a trading account security and is recorded at fair value, with changes in unrealized gains and losses recorded through earnings each period as part of non-interest income. 
 F-11 

 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 and unsecured consumer loans, is generally not accrued on loans which are ninety days or more past due unless the loan is well-secured and in the process of collection. Past due status is based on contractual terms of the loan. Automobile and unsecured consumer loans generally continue accruing until one hundred and twenty days delinquent, at which time they are charged off. All interest accrued but not collected for loans that are placed on nonaccrual or charged-off is reversed against interest income, except for certain loans designated as well-secured. The interest on nonaccrual loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. 
 
 
 Purchase Credit Deteriorated ("PCD") Loans 
 Loans that the Company acquired in acquisitions include some loans that have experienced more than insignificant credit deterioration since origination. PCD loans are recorded at the amount paid. An allowance for credit losses is determined using the same methodology as other loans held for investment. The initial allowance for credit losses determined on a collective basis is allocated to individual loans. The sum of the loan’s purchase price and allowance for credit losses becomes its initial amortized cost basis. The difference between the initial amortized cost basis and the par value of the loan is a noncredit discount or premium, which is amortized into interest income over the life of the loan. Subsequent changes to the allowance for credit losses are recorded through provision expense. 
 
 
 Allowance for Credit Losses on Loans 
 The allowance for credit losses on loans (“ACLL”) is comprised of the allowance for credit losses on loans. The ACLL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed. Accrued interest receivable is excluded from the estimate of credit losses. 
 
 
 The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. The 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).) The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liability on the Consolidated Balance Sheets), with adjustments to the reserve recognized in other noninterest expense in the Consolidated Statements of Operations. 
 
 
 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: 
 
 
 F-13 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 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 may be more adversely affected by conditions in the real estate markets or in the general economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans. 
 
 
 Commercial and industrial loans – Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality of this segment. 
 
 
 Residential real estate – All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. 
 
 
 Home equity and other consumer loans – Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. 
 
 
 Loans that do not share risk characteristics are evaluated on an individual basis and are not also included in the collective evaluation. Estimates of specific allowance may be determined by the present value of anticipated future cash flows or the loan’s observable fair market value, or the fair value of the collateral less costs to sell, if the loan is collateral dependent. However, for collateral dependent loans, the amount of the amortized cost in a loan that exceeds the fair value of the collateral is charged-off against the allowance for credit losses on loans in lieu of an allocation of a specific allowance amount when such an amount has been identified definitively as uncollectible. 
 
 
 Bank-Owned Life Insurance 
 Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at the amount that can be realized under the insurance contract at the balance sheet date which is the cash surrender value. Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in non-interest income on the Consolidated Statements of 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 from loans to other real estate owned or repossessed collateral is charged to the allowance for credit losses on loans. Subsequent to transfer, the asset is carried at lower of cost or fair value less cost to sell and periodically evaluated for impairment. The shortfall, if any, of the loan balance over the fair value of the collateral comprised of taxi medallions at the time of transfer from loans to repossessed collateral is charged to non-interest income. Subsequent impairments in the fair value of other real estate owned and repossessed collateral are charged to expense in the period incurred. Net operating income or expense related to other real estate owned and repossessed collateral is included in operating expenses in the accompanying Consolidated Statements of Income. Because of changing market conditions, there are inherent uncertainties in the assumptions with respect to the estimated fair value of other real estate owned and repossessed collateral. Because of these inherent uncertainties, the amount ultimately realized on other real estate owned and repossessed collateral may differ from the amounts reflected in the financial statements. 
 
 
 Capitalized Servicing Rights 
 F-14 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Capitalized servicing rights are included in “other assets” in the Consolidated Balance Sheets. Servicing assets are initially recognized as separate assets at fair value when rights are acquired through purchase or through sale of financial assets with servicing retained. 
 
 
 The Company's servicing rights accounted for under the fair value method are carried on the Consolidated Balance Sheets at fair value with changes in fair value recorded in income in the period in which the change occurs. Changes in the fair value of servicing rights are primarily due to changes in valuation assumptions, such as discount rates and prepayment speeds, and the collection and realization of expected cash flows. 
 
 
 The Company’s servicing rights accounted for under the amortization method are initially recorded at fair value. Under that method, capitalized servicing rights are charged to expense in proportion to and over the period of estimated net servicing income. Fair value of the servicing rights is based on a valuation model that calculates the present value of estimated future net servicing income. The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, prepayment speeds and default rates and losses. Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranches. If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income. 
 
 
 Premises and Equipment 
 Land is carried at cost. Buildings, improvements, and equipment are carried at cost less accumulated depreciation and amortization computed on the straight-line method over the estimated useful lives of the assets. Leasehold improvements are amortized on the straight-line method over the shorter of the lease term, plus optional terms if certain conditions are met, or the estimated useful life of the asset. 
 
 
 Other Intangibles 
 Intangible assets are acquired assets that lack physical substance but can be distinguished from goodwill because of contractual or other legal rights or the asset is capable of being sold or exchanged either on its own or in combination with a related contract, asset or liability. 
 
 
 The fair values of these assets are generally determined based on appraisals and are subsequently amortized on a straight-line basis or an accelerated basis over their estimated lives. Management assesses the recoverability of these intangible assets at least annually or whenever events or changes in circumstances indicate that their carrying value may not be recoverable. If the carrying amount exceeds fair value, an impairment charge is recorded to income. 
 
 
 Transfers of Financial Assets 
 Transfers of an entire financial asset, group of entire financial assets, or a participating interest in an entire financial asset are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets. 
 
 
 Income Taxes 
 Deferred income taxes are recognized for the tax consequences of temporary differences by applying enacted statutory tax rates applicable for future years to differences between financial statement and tax bases of existing assets and liabilities. The effect of tax rate changes on deferred taxes is recognized in the income tax provision in the period that includes the enactment date. A tax valuation allowance is established, as needed, to reduce net deferred tax assets to the amount expected to be realized. In the event it becomes more likely than not that some or all of the deferred tax asset allowances will not be needed, the valuation allowance will be adjusted. 
 
 
 In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax 
 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 
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 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. 
 
 
 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 in 2021, which is included in gain on sale of business operations and assets on the Consolidated Statements of Income. 
 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Stock-Based Compensation 
 The Company measures and recognizes compensation cost relating to share-based payment transactions based on the grant-date fair value of the equity instruments issued. The fair value of restricted stock is recorded as unearned compensation. The deferred expense is amortized to compensation expense based on one of several permitted attribution methods over the longer of the required service period or performance period. For performance-based restricted stock awards, the Company estimates the degree to which performance conditions will be met to determine the number of shares that will vest and the related compensation expense. Compensation expense is adjusted in the period such estimates change. 
 
 
 Income tax benefits and/or tax deficiencies related to stock compensation determined as the difference between compensation cost recognized for financial reporting purposes and the deduction for tax, are recognized in the income statement as income tax expense or benefit in the period in which they occur. 
 
 
 Wealth Management 
 Wealth management assets held in a fiduciary or agent capacity are not included in the accompanying Consolidated 
 Balance Sheets because they are not assets of the Company. 
 
 
 Wealth management fees is primarily comprised of fees earned from consultative investment management, trust administration, tax return preparation, and financial planning. The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based on the daily accrual of the market value of the investment accounts and the applicable fee rate. 
 
 
 Derivative Instruments and Hedging Activities 
 The Company enters into interest rate swap agreements as part of the Company’s interest rate risk management strategy for certain assets and liabilities and not for speculative purposes. Based on the Company’s intended use for the interest rate swap at inception, the Company designates the derivative as either an economic hedge of an asset or liability or a hedging instrument subject to the hedge accounting provisions of ASC 815, “Derivatives and Hedging.” 
 
 
 Interest rate swaps designated as economic hedges are recorded at fair value within other assets or liabilities. Changes in the fair value of these derivatives are recorded directly through earnings. 
 
 
 For interest rate swaps that management intends to apply the hedge accounting provisions of ASC 815, the Company formally documents at inception all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the various hedges. Additionally, the Company uses dollar offset or regression analysis at the hedge’s inception and for each reporting period thereafter, to assess whether the derivative used in its hedging transaction is expected to be and has been highly effective in offsetting changes in the fair value or cash flows of the hedged item. The Company discontinues hedge accounting when it is determined that a derivative is not expected to be or has ceased to be highly effective as a hedge, and then reflects changes in fair value of the derivative in earnings after termination of the hedge relationship. 
 
 
 The Company enters into commitments to lend with borrowers, and forward commitments to sell loans or to-be-announced mortgage-backed bonds to investors to hedge against the inherent interest rate and pricing risk associated with selling loans. The commitments to lend generally terminate once the loan is funded, the lock period expires or the borrower decides not to contract for the loan. The forward commitments generally terminate once the loan is sold, the commitment period expires or the borrower decides not to contract for the loan. These commitments are considered derivatives which are accounted for by recognizing their estimated fair value on the Consolidated Balance Sheets as either a freestanding asset or liability. See Note 14 - Derivative Instruments and Hedging Activities to the financial statements for more information on commitments to lend and forward commitments. 
 
 
 Off-Balance Sheet Financial Instruments 
 In the ordinary course of business, the Company enters into off-balance sheet financial instruments, consisting primarily of credit related financial instruments. These financial instruments are recorded in the financial statements when they are funded or related fees are incurred or received. 
 
 
 
 
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 Fair Value Hierarchy 
 The Company groups assets and liabilities that are measured at fair value in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value. 
 
 
 Level 1 - Valuation is based on quoted prices in active markets for identical assets or liabilities. Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities. 
 
 
 Level 2 - Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. 
 
 
 Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Level 3 assets and liabilities include financial instruments whose value is determined using unobservable techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation. 
 
 
 Employee Benefits 
 The Company maintains an employer sponsored 401(k) plan to which participants may make contributions in the form of salary deferrals and the Company provides matching contributions in accordance with the terms of the plan. Contributions due under the terms of the defined contribution plans are accrued as earned by employees. 
 
 
 Due to the Rome Bancorp acquisition in 2011, the Company inherited a noncontributory, qualified, defined benefit pension plan for certain employees who met age and service requirements; as well as other post-retirement benefits, principally health care and group life insurance. The Rome pension plan and postretirement benefits that were acquired in connection with the whole-bank acquisition were frozen prior to the close of the transaction. The pension benefit in the form of a life annuity is based on the employee’s combined years of service, age, and compensation. The Company also has a long-term care post-retirement benefit plan for certain executives where upon disability, associated benefits are funded by insurance policies or paid directly by the Company. 
 
 
 In order to measure the expense associated with the Plans, various assumptions are made including the discount rate, expected return on plan assets, anticipated mortality rates, and expected future healthcare costs. The assumptions are based on historical experience as well as current facts and circumstances. The Company uses a December 31 measurement date for its plans. As of the measurement date, plan assets are determined based on fair value, generally representing observable market prices. The projected benefit obligation is primarily determined based on the present value of projected benefit distributions at an assumed discount rate. 
 
 
 Net periodic pension benefit costs include interest costs based on an assumed discount rate, the expected return on plan assets based on actuarially derived market-related values, and the amortization of net actuarial losses. Net periodic postretirement benefit costs include service costs, interest costs based on an assumed discount rate, and the amortization of prior service credits and net actuarial gains. Differences between expected and actual results in each year are included in the net actuarial gain or loss amount, which is recognized in other comprehensive income. The net actuarial gain or loss in excess of a 10% corridor is amortized in net periodic benefit cost over the average remaining service period of active participants in the Plans. The prior service credit is amortized over the average remaining service period to full eligibility for participating employees expected to receive benefits. 
 
 
 The Company recognizes in its consolidated balance sheets an asset for a plan’s overfunded status or a liability for a plan’s underfunded status. The Company also measures the Plans’ assets and obligations that determine its funded status as of the end of the fiscal year and recognizes those changes in other comprehensive income/(loss), net of tax. 
 
 
 
 
 
 
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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. 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 
 Effective January 1, 2023, the Company adopted ASU No. 2022-02, “Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures.” The adoption did not have a material impact on the Company’s Consolidated Financial Statements. 
 
 
 The ASU eliminates the troubled debt restructuring (“TDR”) accounting model that was adopted with Topic 326, “Financial Instruments – Credit Losses” and enhances disclosure requirements for certain loan refinancings and restructurings when a borrower is experiencing financial difficulty. The ASU requires prospective disclosure of current-period gross write-offs by year of origination. Refer to Note 5 – Loans and Related Allowance for Credit Losses for the new financial statement disclosures applicable under this update. 
 
 
 Future Application of Accounting Pronouncements 
 In March 2023, the FASB issued ASU No. 2023-02, “Investments – Equity Method and Joint Ventures (Topic 323): Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force).” The guidance is intended to improve the accounting and disclosures for investments in tax credit structures. The ASU allows entities to elect to account for qualifying tax equity investments using the proportional amortization method, regardless of the program giving rise to the related income tax credits. Previously, this method was only available for qualifying investments in low-income housing tax credit structures. The amendments in this ASU are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted. The Company is still evaluating; however, the adoption removes amortization expense from non-interest income and moves to tax expense resulting in an increase to the effective tax rate. 
 
 
 In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU requires disclosure in the rate reconciliation table of additional categories of information and more details about the reconciling items in some categories if items meet a quantitative threshold. The ASU also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things. The amendments in this ASU are effective for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is still evaluating; however, the adoption is not expected to have a material impact on the Company’s Consolidated Financial Statements. 
 F-19 

 
 Table of Contents 
 
 

 NOTE 2. CASH AND CASH EQUIVALENTS 
 
 Cash and cash equivalents include cash on hand, amounts due from banks, and short-term investments with original maturities of 90 days or less. At year-end 2023 and 2022, there were no short-term investments pledged as collateral support for derivative financial contracts. The Federal Reserve Bank requires the Bank to maintain certain reserve requirements of vault cash and/or deposits. As of December 31, 2023 and 2022, the reserve requirement was zero . 
 
 
 
 
 
 NOTE 3. TRADING SECURITY 
 
 The Company holds a tax advantaged economic development bond that is being accounted for at fair value. The security had an amortized cost of $ 6.2 million and $ 7.1 million and a fair value of $ 6.1 million and $ 6.7 million at year-end 2023 and 2022, respectively. Unrealized gains/(losses) recorded through income on this security totaled $ 0.3 million, ($ 0.8 ) million, and ($ 0.6 ) million for 2023, 2022, and 2021, respectively. As discussed further in Note 14 - Derivative Instruments and Hedging Activities, the Company has entered into a swap contract to swap-out the fixed rate of the security in exchange for a variable rate. The Company does not purchase securities with the intent of selling them in the near term, and there are no other debt securities in the trading portfolio at year-end 2023 and 2022. 
 F-20 

 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 4. 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, 2023 
 Securities available for sale 
 Debt securities: 
 U.S Treasuries $ 7,980 $ 1 $ — $ 7,981 $ — 
 Municipal bonds and obligations 64,788 494 ( 1,429 ) 63,853 — 
 Agency collateralized mortgage obligations 426,986 — ( 79,112 ) 347,874 — 
 Agency mortgage-backed securities 492,633 2 ( 75,155 ) 417,480 — 
 Agency commercial mortgage-backed securities 174,879 — ( 29,553 ) 145,326 — 
 Corporate bonds 43,291 34 ( 4,210 ) 39,115 — 
 
 Other bonds and obligations 655 67 ( 66 ) 656 — 
 Total securities available for sale 1,211,212 598 ( 189,525 ) 1,022,285 — 
 Securities held to maturity 
 Municipal bonds and obligations 251,046 698 ( 16,987 ) 234,757 48 
 Agency collateralized mortgage obligations 112,929 — ( 18,360 ) 94,569 — 
 Agency mortgage-backed securities 47,379 — ( 8,052 ) 39,327 — 
 Agency commercial mortgage-backed securities 130,169 — ( 24,368 ) 105,801 — 
 Tax advantaged economic development bonds 1,540 6 ( 60 ) 1,486 20 
 Other bonds and obligations 288 — — 288 — 
 Total securities held to maturity 543,351 704 ( 67,827 ) 476,228 68 
 
 Marketable equity securities 15,035 — ( 2,006 ) 13,029 — 
 Total $ 1,769,598 $ 1,302 $ ( 259,358 ) $ 1,511,542 $ 68 
 
 December 31, 2022 
 Securities available for sale 
 Debt securities: 
 U.S Treasuries $ 11,972 $ 1 $ — $ 11,973 $ — 
 Municipal bonds and obligations 65,943 422 ( 3,030 ) 63,335 — 
 Agency collateralized mortgage obligations 631,732 — ( 99,787 ) 531,945 — 
 Agency mortgage-backed securities 643,308 1 ( 96,996 ) 546,313 — 
 Agency commercial mortgage-backed securities 264,218 — ( 35,750 ) 228,468 — 
 Corporate bonds 43,368 80 ( 2,938 ) 40,510 — 
 
 Other bonds and obligations 655 67 ( 66 ) 656 — 
 Total securities available for sale 1,661,196 571 ( 238,567 ) 1,423,200 — 
 Securities held to maturity 
 Municipal bonds and obligations 266,793 691 ( 23,704 ) 243,780 66 
 Agency collateralized mortgage-backed securities 128,136 — ( 20,420 ) 107,716 — 
 Agency mortgage-backed securities 50,958 — ( 9,240 ) 41,718 — 
 Agency commercial mortgage-backed securities 135,206 — ( 23,203 ) 112,003 — 
 Tax advantaged economic development bonds 2,069 8 ( 121 ) 1,956 25 
 Other bonds and obligations 291 — — 291 — 
 Total securities held to maturity 583,453 699 ( 76,688 ) 507,464 91 
 
 Marketable equity securities 15,035 — ( 2,179 ) 12,856 — 
 Total $ 2,259,684 $ 1,270 $ ( 317,434 ) $ 1,943,520 $ 91 

 
 
 ` 
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 At year-end 2023 and 2022, accumulated net unrealized (losses) on AFS securities included in accumulated other comprehensive income/(loss) were losses of $ 188.9 million and $ 238.0 million, respectively. At year-end 2023, there was no accumulated net unrealized gain on securities reclassified from AFS to HTM included in accumulated other comprehensive income/(loss). At year-end 2022, accumulated net unrealized gains on the securities reclassified from AFS to HTM included in accumulated other comprehensive income/(loss) was $ 1.1 million. The year-end 2023 and 2022 related income tax benefit of $ 49.4 million and $ 61.3 million, respectively, was also included in accumulated other comprehensive (loss). 
 
 
 The following table summarizes the activity in the allowance for credit losses for debt securities held to maturity by security type for the years ended December 31, 2023, 2022 and 2021: 
 
 (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total 
 Balance at December 31, 2022 $ 66 $ 25 $ 91 
 
 Provision (benefit) for credit losses ( 18 ) ( 5 ) ( 23 ) 
 Balance at December 31, 2023 $ 48 $ 20 $ 68 

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

 
 
 
 (In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total 
 Balance at December 31, 2020 $ 64 $ 40 $ 104 
 
 Provision expense/(benefit) for credit losses 
 6 ( 5 ) 1 
 Balance at December 31, 2021 $ 70 $ 35 $ 105 

 
 
 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, 2023, none of the Company's investment securities were delinquent or in nonaccrual status. 
 
 
 
 
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 The amortized cost and estimated fair value of AFS and HTM securities, segregated by contractual maturity at year-end 2023 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 $ 8,290 $ 8,292 $ 410 $ 410 
 Over 1 year to 5 years 11,205 11,083 1,802 1,797 
 Over 5 years to 10 years 55,843 51,922 35,956 35,883 
 Over 10 years 41,376 40,308 214,706 198,441 
 Total bonds and obligations 116,714 111,605 252,874 236,531 
 Mortgage-backed securities 1,094,498 910,680 290,477 239,697 
 Total $ 1,211,212 $ 1,022,285 $ 543,351 $ 476,228 

 
 
 
 At year-end 2023 and 2022, the Company had pledged securities as collateral for certain municipal deposits and for interest rate swaps with certain counterparties. The total amortized cost and fair values of these pledged securities follows. Additionally, there is a blanket lien on certain securities to collateralize borrowings from the FHLBB and Federal Reserve Bank of Boston, as discussed further in Note 10 - Borrowed Funds. 
 
 2023 2022 
 (In thousands) Amortized
Cost Fair
Value Amortized
Cost Fair
Value 
 Securities pledged to swap counterparties $ 9,780 $ 9,633 $ 11,972 $ 11,973 
 Securities pledged for municipal deposits 289,740 250,979 304,741 276,804 
 
 Total $ 299,520 $ 260,612 $ 316,713 $ 288,777 

 
 Proceeds from the sale of AFS securities totaled $ 267 million in 2023. Proceeds from the sale of AFS securities totaled $ 150 million in 2022. During 2021, there were no sales of AFS securities. The (loss)/gain for the sale of AFS securities were reclassified out of accumulated other comprehensive (loss) and into earnings. The components of net recognized gains and losses on the sale of AFS securities and the fair value change of marketable equities are as follows: 
 
 (In thousands) 2023 2022 2021 
 Gross recognized gains $ 1,199 $ 72 $ 108 
 Gross recognized losses ( 26,083 ) ( 2,009 ) ( 550 ) 
 
 Net recognized (losses) $ ( 24,884 ) $ ( 1,937 ) $ ( 442 ) 

 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Debt securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows: 
 
 Less Than Twelve Months Over Twelve Months Total 
 (In thousands) Gross
Unrealized 
Losses Fair 
Value Gross
Unrealized 
Losses Fair 
Value Gross
Unrealized 
Losses Fair 
Value 
 December 31, 2023 
 Securities available for sale 
 Debt securities: 
 Municipal bonds and obligations $ 76 $ 9,326 $ 1,353 $ 22,739 $ 1,429 $ 32,065 
 Agency collateralized mortgage obligations 
 — — 79,112 347,874 79,112 347,874 
 Agency mortgage-backed securities 
 1 22 75,154 417,151 75,155 417,173 
 Agency commercial mortgage-back securities — — 29,553 145,326 29,553 145,326 
 Corporate bonds 457 6,543 3,753 31,690 4,210 38,233 
 
 Other bonds and obligations — — 66 295 66 295 
 
 
 Total securities available for sale $ 534 $ 15,891 $ 188,991 $ 965,075 $ 189,525 $ 980,966 
 
 Securities held to maturity 
 Municipal bonds and obligations 
 229 28,895 16,758 92,063 16,987 120,958 
 Agency collateralized mortgage obligations 
 1 21 18,359 94,548 18,360 94,569 
 Agency mortgage-backed securities 
 — — 8,052 39,327 8,052 39,327 
 Agency commercial mortgage-back securities — — 24,368 105,801 24,368 105,801 
 Tax advantaged economic development bonds 
 — — 60 922 60 922 
 Total securities held to maturity 230 28,916 67,597 332,661 67,827 361,577 
 
 Total $ 764 $ 44,807 $ 256,588 $ 1,297,736 $ 257,352 $ 1,342,543 
 
 December 31, 2022 
 Securities available for sale 
 Debt securities: 
 Municipal bonds and obligations $ 2,406 $ 36,696 $ 624 $ 2,763 $ 3,030 $ 39,459 
 Agency collateralized mortgage obligations 
 23,052 247,509 76,735 284,434 99,787 531,943 
 Agency mortgage-backed securities 
 3,124 37,540 93,872 508,683 96,996 546,223 
 Agency commercial mortgage-backed securities 
 9,885 96,396 25,865 132,043 35,750 228,439 
 Corporate bonds 1,709 25,657 1,229 9,929 2,938 35,586 
 
 Other bonds and obligations — — 66 295 66 295 
 
 
 Total securities available for sale $ 40,176 $ 443,798 $ 198,391 $ 938,147 $ 238,567 $ 1,381,945 
 
 Securities held to maturity 
 Municipal bonds and obligations 
 5,476 125,494 18,228 38,341 23,704 163,835 
 Agency collateralized mortgage obligations 2,734 49,539 17,686 58,177 20,420 107,716 
 Agency mortgage-backed securities 300 2,419 8,940 39,299 9,240 41,718 
 Agency commercial mortgage-back securities 447 9,713 22,756 102,290 23,203 112,003 
 Tax advantaged economic development bonds 1 142 120 1,008 121 1,150 
 Total securities held to maturity 8,958 187,307 67,730 239,115 76,688 426,422 
 
 Total $ 49,134 $ 631,105 $ 266,121 $ 1,177,262 $ 315,255 $ 1,808,367 

 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Debt Securities 
 The Company expects to recover its amortized cost basis on all debt securities in its AFS and HTM portfolios. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of December 31, 2023, 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 2023: 
 
 
 AFS municipal bonds and obligations 
 At year-end 2023, 35 out of 92 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 4.3 % 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 2023. All securities are performing. 
 
 
 AFS collateralized mortgage obligations 
 At year-end 2023, 197 out of 199 securities in the Company’s portfolio of AFS collateralized mortgage obligations were in unrealized loss positions. Aggregate unrealized losses represented 18.5 % 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 2023. All securities are performing. 
 
 
 AFS commercial and residential mortgage-backed securities 
 At year-end 2023, 119 out of 123 securities in the Company’s portfolio of AFS mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 15.7 % 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 2023. All securities are performing. 
 
 
 AFS corporate bonds 
 At year-end 2023, 14 out of 15 securities in the Company’s portfolio of AFS corporate bonds were in unrealized loss positions. The aggregate unrealized loss represents 9.9 % of the amortized cost of bonds in unrealized loss positions. The Company reviews the financial strength of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities. All securities are performing. 
 
 
 AFS other bonds and obligations 
 At year-end 2023, 2 out of 3 securities in the Company’s portfolio of other bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 18.3 % 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 2023. All securities are performing. 
 
 
 HTM municipal bonds and obligations 
 At year-end 2023, 96 out of 173 securities in the Company’s portfolio of HTM municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 12.3 % 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 2023. All securities are performing. 
 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 HTM collateralized mortgage obligations 
 At year-end 2023, 12 out of 12 securities in the Company’s portfolio of HTM collateralized mortgage obligations were in an unrealized loss position. Aggregate unrealized losses represented 16.3 % 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 2023. All securities are performing. 
 
 
 HTM commercial and residential mortgage-backed securities 
 At year-end 2023, 17 out of 17 securities in the Company’s portfolio of HTM mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 18.3 % of the amortized cost of securities in unrealized loss positions. The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities. The securities are investment grade rated and there were no material underlying credit downgrades during 2023. All securities are performing. 
 
 
 HTM tax-advantaged economic development bonds 
 At year-end 2023, 1 out of 2 securities in the Company’s portfolio of tax-advantaged economic development 
 bonds was in an unrealized loss position. Aggregate unrealized losses represented 6.1 % of the amortized cost of 
 securities in unrealized loss position. The Company believes that more likely than not all the principal outstanding 
 will be collected. All securities are performing. 
 
 
 
 NOTE 5. LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES 
 
 
 The following is a summary of total loans by regulatory call report code with sub-segmentation based on underlying collateral for certain loan types: 
 
 (In thousands) December 31, 2023 December 31, 2022 
 Construction $ 640,371 $ 319,452 
 Commercial multifamily 599,145 620,088 
 Commercial real estate owner occupied 628,646 640,489 
 Commercial real estate non-owner occupied 2,606,409 2,496,237 
 Commercial and industrial 1,359,249 1,445,236 
 
 Residential real estate 2,760,312 2,312,447 
 Home equity 224,223 227,450 
 Consumer other 221,331 273,910 
 Total loans $ 9,039,686 $ 8,335,309 
 
 Allowance for credit losses 105,357 96,270 
 Net loans $ 8,934,329 $ 8,239,039 

 
 
 As of December 31, 2023 and 2022, outstanding loans originated under the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") totaled $ 3.0 million and $ 5.8 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 2023, the Company purchased loans aggregating $ 649 million and sold loans aggregating $ 255 million. In 2022, the Company purchased loans aggregating $ 718 million and sold loans aggregating $ 366 million. In 2021, the Company purchased loans aggregating $ 211 million and sold loans aggregating $ 560 million. Net gains on sales of loans were $ 10.3 million, $ 12.5 million, and $ 20.7 million for the years 2023, 2022, and 2021, respectively. 
 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Most of the Company’s lending activity occurs within its primary markets in Massachusetts, Southern Vermont, and Northeastern New York. Most of the loan portfolio is secured by real estate, including residential mortgages, commercial mortgages, and home equity loans. Year-end loans to operators of non-residential buildings totaled $ 2.2 billion, or 24.0 %, and $ 1.9 billion, or 22.7 % of total loans in 2023 and 2022, respectively. There were no other concentrations of loans related to any single industry in excess of 10% of total loans at year-end 2023 or 2022. 
 
 
 As of December 31, 2023 and December 31, 2022, the Company had no foreclosed residential real estate property. Additionally, residential mortgage loans collateralized by real estate property that are in the process of foreclosure as of December 31, 2023 and December 31, 2022 totaled $ 3.8 million and $ 3.0 million, respectively, including sold loans serviced by the Company. 
 
 
 At year-end 2023 and 2022, the Company had pledged loans totaling $ 1.3 billion and $ 0.8 billion, respectively, to the Federal Reserve Bank of Boston as collateral for certain borrowing arrangements. Also, residential first mortgage loans are subject to a blanket lien for FHLBB advances. See Note 10 - Borrowed Funds. 
 
 
 At year-end 2023 and 2022, the Company’s commitments outstanding to related parties totaled $ 1.5 million and $ 1.5 million, respectively, and the loans outstanding against these commitments totaled $ 0.8 million and $ 0.8 million, respectively. Related parties include directors and executive officers of the Company and its subsidiaries, as well as their respective affiliates in which they have a controlling interest and immediate family members. For the years 2023 and 2022, all related party loans were performing. 
 
 
 Risk characteristics relevant to each portfolio segment are as follows: 
 Construction - Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion. Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions. 
 
 
 Commercial real estate multifamily, owner occupied and non-owner - Loans in these segments are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York. The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment. Management monitors the cash flows of these loans. 
 
 
 Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Repayment is expected from the cash flows of the business. Loans in this segment include asset based loans which generally have no scheduled repayment and which are closely monitored against formula based collateral advance ratios. A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment. 
 
 
 Residential real estate - All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. 
 
 
 Home equity and other consumer loans - Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans. The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment. 
 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Allowance for Credit Losses on Loans 
 The Allowance for Credit Losses on Loans (“ACLL”) is comprised of the allowance for credit losses on loans, and the allowance for unfunded commitments is accounted for as a separate liability in other liabilities on the Consolidated Balance Sheets. 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 (when applicable). 
 The allowance for unfunded commitments is maintained at a level by the Company to be sufficient to absorb expected lifetime losses related to unfunded credit facilities (including unfunded loan commitments and letters of credit) and is included in other liabilities on the consolidated balance sheets. 
 
 
 
 
 F-28 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 The Company’s activity in the allowance for credit losses on loans for the years ended December 31, 2023, December 31, 2022 and December 31, 2021 was as follows: 
 
 (In thousands) Balance at Beginning of Period Adoption of
ASU No.
2022-02 Charge-offs Recoveries Provision for Credit Losses Balance at End of Period 
 Year ended December 31, 2023 
 Construction $ 1,227 $ — $ ( 1 ) $ — $ 1,659 $ 2,885 
 Commercial multifamily 1,810 — — 6 659 2,475 
 Commercial real estate owner occupied 10,739 24 ( 489 ) 1,139 ( 1,970 ) 9,443 
 Commercial real estate non-owner occupied 30,724 — ( 65 ) 204 7,358 38,221 
 Commercial and industrial 18,743 ( 23 ) ( 17,872 ) 2,659 15,095 18,602 
 
 Residential real estate 18,666 2 ( 313 ) 610 657 19,622 
 Home equity 2,173 — ( 88 ) 519 ( 589 ) 2,015 
 Consumer other 12,188 ( 404 ) ( 10,429 ) 1,586 9,153 12,094 
 Total allowance for credit losses $ 96,270 $ ( 401 ) $ ( 29,257 ) $ 6,723 $ 32,022 $ 105,357 

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

 
 
 
 (In thousands) Balance at Beginning of Period Charge-offs Recoveries Provision for Credit Losses Balance at End of Period 
 Year ended December 31, 2021 
 Construction $ 5,111 $ — $ — $ ( 1,905 ) $ 3,206 
 Commercial multifamily 5,916 ( 404 ) 157 451 $ 6,120 
 Commercial real estate owner occupied 12,380 ( 1,640 ) 204 1,808 $ 12,752 
 Commercial real estate non-owner occupied 35,850 ( 14,557 ) 2,522 8,291 $ 32,106 
 Commercial and industrial 25,013 ( 10,841 ) 4,565 3,847 $ 22,584 
 
 Residential real estate 28,491 ( 1,664 ) 1,767 ( 6,188 ) $ 22,406 
 Home equity 6,482 ( 334 ) 335 ( 2,477 ) $ 4,006 
 Consumer other 8,059 ( 1,578 ) 761 ( 4,328 ) 2,914 
 Total allowance for credit losses $ 127,302 $ ( 31,018 ) $ 10,311 $ ( 501 ) $ 106,094 

 
 
 The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liability on the Consolidated Balance Sheets), with adjustments to the reserve recognized in other noninterest expense in the Consolidated Statements of Income. The Company’s activity in the allowance for credit losses on unfunded commitments for the years ended December 31, 2023, December 31, 2022, and December 31, 2021 was as follows: 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

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

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

 
 
 
 (In thousands) Total 
 Balance at December 31, 2020 $ 7,629 
 Release of expense for credit losses ( 586 ) 
 Balance at December 31, 2021 $ 7,043 

 
 
 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 nonaccruing loans, are loans for which a definitive weakness has been identified and which may make full collection of contractual cash flows questionable. Doubtful loans are those with identified weaknesses that make full collection of contractual cash flows, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. 
 
 
 For commercial credits, the Company assigns an internal risk rating at origination and reviews the rating annually, semiannually, or quarterly depending on the risk rating. The rating is also reassessed at any point in time when management becomes aware of information that may affect the borrower’s ability to fulfill their obligations. 
 
 
 The Company risk rates its residential mortgages, including 1-4 family and residential construction loans, based on a three rating system: Pass, Special Mention, and Substandard. Loans that are current within 59 days are rated Pass. Residential mortgages that are 60-89 days delinquent are rated Special Mention. Loans delinquent for 90 days or greater are rated Substandard and generally placed on nonaccrual status. 
 
 
 
 
 F-30 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

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

 F-31 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 
 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total 
 Residential real estate 
 Current period gross write-offs $ — $ 50 $ — $ 50 $ 174 $ 39 $ — $ — $ 313 
 Risk rating 
 Pass $ 599,124 $ 973,031 $ 266,055 $ 88,302 $ 66,837 $ 755,372 $ 81 $ — $ 2,748,802 
 Special Mention — — — — 140 664 — — 804 
 Substandard — 129 1,176 379 574 8,448 — — 10,706 
 Total $ 599,124 $ 973,160 $ 267,231 $ 88,681 $ 67,551 $ 764,484 $ 81 $ — $ 2,760,312 

 
 
 F-32 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 
 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total 
 As of December 31, 2022 
 Construction 
 Risk rating 
 Pass $ 153,393 $ 133,708 $ 25,634 $ 3,432 $ 1,361 $ 1,924 $ — $ — $ 319,452 
 Special Mention — — — — — — — — — 
 Substandard — — — — — — — — — 
 Total $ 153,393 $ 133,708 $ 25,634 $ 3,432 $ 1,361 $ 1,924 $ — $ — $ 319,452 
 
 Commercial multifamily: 
 Risk rating 
 Pass $ 205,124 $ 61,032 $ 27,583 $ 100,696 $ 67,675 $ 149,633 $ 205 $ — $ 611,948 
 Special Mention — — 2,628 — — — — — 2,628 
 Substandard — — — — 5,512 — — — 5,512 
 Total $ 205,124 $ 61,032 $ 30,211 $ 100,696 $ 73,187 $ 149,633 $ 205 $ — $ 620,088 
 
 Commercial real estate owner occupied: 
 Risk rating 
 Pass $ 131,096 $ 127,270 $ 58,835 $ 82,576 $ 75,322 $ 154,056 $ 3,464 $ — $ 632,619 
 Special Mention — — 387 — — — — — 387 
 Substandard 1,003 122 31 282 1,056 4,989 — — 7,483 
 Total $ 132,099 $ 127,392 $ 59,253 $ 82,858 $ 76,378 $ 159,045 $ 3,464 $ — $ 640,489 
 
 Commercial real estate non-owner occupied: 
 Risk rating 
 Pass $ 621,685 $ 410,359 $ 175,456 $ 333,783 $ 313,124 $ 530,322 $ 17,846 $ — $ 2,402,575 
 Special Mention — — — — 20,000 18,462 — — 38,462 
 Substandard — — 7,237 13,623 15,610 18,730 — — 55,200 
 Total $ 621,685 $ 410,359 $ 182,693 $ 347,406 $ 348,734 $ 567,514 $ 17,846 $ — $ 2,496,237 
 
 Commercial and industrial: 
 Risk rating 
 Pass $ 282,781 $ 147,070 $ 56,880 $ 67,975 $ 83,223 $ 99,367 $ 648,956 $ — $ 1,386,252 
 Special Mention — 5,811 1,290 1,332 11,502 912 2,632 — 23,479 
 Substandard 204 496 3,640 8,139 1,981 2,799 10,581 — 27,840 
 Doubtful — — — — — 56 7,609 — 7,665 
 Total $ 282,985 $ 153,377 $ 61,810 $ 77,446 $ 96,706 $ 103,134 $ 669,778 $ — $ 1,445,236 
 
 
 
 
 
 
 
 
 
 Residential real estate 
 Risk rating 
 Pass $ 997,981 $ 280,308 $ 96,548 $ 70,845 $ 138,894 $ 713,744 $ 165 $ — $ 2,298,485 
 Special Mention — 364 — 861 202 707 — — 2,134 
 Substandard — 284 448 267 1,857 8,972 — — 11,828 
 Total $ 997,981 $ 280,956 $ 96,996 $ 71,973 $ 140,953 $ 723,423 $ 165 $ — $ 2,312,447 

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

 
 
 
 Term Loans Amortized Cost Basis by Origination Year 
 (In thousands) 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total 
 As of December 31, 2022 
 Home equity: 
 Payment performance 
 Performing $ — $ 114 $ 454 $ — $ — $ 17 $ 224,746 $ — $ 225,331 
 Nonperforming — — — — — — 2,119 — 2,119 
 Total $ — $ 114 $ 454 $ — $ — $ 17 $ 226,865 $ — $ 227,450 
 
 Consumer other: 
 Payment performance 
 Performing $ 161,157 $ 28,279 $ 8,312 $ 12,670 $ 27,608 $ 24,682 $ 9,070 $ — $ 271,778 
 Nonperforming 588 137 44 280 477 567 39 — 2,132 
 Total $ 161,745 $ 28,416 $ 8,356 $ 12,950 $ 28,085 $ 25,249 $ 9,109 $ — $ 273,910 

 F-34 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 The following table summarizes information about total loans rated Special Mention or lower at December 31, 2023 and December 31, 2022. 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, 2023 December 31, 2022 
 Nonaccrual 
 $ 21,407 $ 31,114 
 Substandard Accruing 131,689 88,665 
 Total Classified 153,096 119,779 
 Special Mention 91,502 68,127 
 Total Criticized 
 $ 244,598 $ 187,906 

 
 
 The following is a summary of loans by past due status at December 31, 2023 and December 31, 2022: 
 
 (In thousands) 30-59 Days Past Due 60-89 Days Past Due 90 Days or Greater Past Due Total Past Due Current Total Loans 
 December 31, 2023 
 Construction $ — $ — $ — $ — $ 640,371 $ 640,371 
 Commercial multifamily 5,436 187 — 5,623 593,522 599,145 
 Commercial real estate owner occupied 581 286 804 1,671 626,975 628,646 
 Commercial real estate non-owner occupied 139 251 3,798 4,188 2,602,221 2,606,409 
 Commercial and industrial 2,749 689 8,769 12,207 1,347,042 1,359,249 
 
 Residential real estate 5,669 943 10,687 17,299 2,743,013 2,760,312 
 Home equity 707 498 1,281 2,486 221,737 224,223 
 Consumer other 2,363 1,642 1,606 5,611 215,720 221,331 
 Total $ 17,644 $ 4,496 $ 26,945 $ 49,085 $ 8,990,601 $ 9,039,686 

 
 (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, 2022 
 Construction $ — $ — $ — $ — $ 319,452 $ 319,452 
 Commercial multifamily — 214 — 214 619,874 620,088 
 Commercial real estate owner occupied 122 — 3,302 3,424 637,065 640,489 
 Commercial real estate non-owner occupied 143 — 191 334 2,495,903 2,496,237 
 Commercial and industrial 1,173 1,438 18,658 21,269 1,423,967 1,445,236 
 
 Residential real estate 3,694 2,134 11,724 17,552 2,294,895 2,312,447 
 Home equity 168 57 2,119 2,344 225,106 227,450 
 Consumer other 1,990 1,028 2,158 5,176 268,734 273,910 
 Total $ 7,290 $ 4,871 $ 38,152 $ 50,313 $ 8,284,996 $ 8,335,309 

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 Table of Contents 
 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, 2023 and December 31, 2022: 
 
 December 31, 2023 
 (In thousands) Nonaccrual Amortized Cost Nonaccrual With No Related Allowance Past Due 90 Days or Greater and Accruing Interest Income Recognized on Nonaccrual 
 Construction $ — $ — $ — $ — 
 Commercial multifamily — — — — 
 Commercial real estate owner occupied 605 285 199 — 
 Commercial real estate non-owner occupied 3,798 45 — — 
 Commercial and industrial 8,665 5,586 104 — 
 
 Residential real estate 6,696 2,796 3,991 — 
 Home equity 961 122 320 — 
 Consumer other 682 — 924 — 
 Total $ 21,407 $ 8,834 $ 5,538 $ — 

 The commercial and industrial loans nonaccrual amortized cost as of December 31, 2023 included medallion loans with a fair value of $ 0.4 million and a contractual balance of $ 8.8 million. 
 
 
 
 
 
 December 31, 2022 
 (In thousands) Nonaccrual Amortized Cost Nonaccrual With No Related Allowance Past Due 90 Days or Greater and Accruing Interest Income Recognized on Nonaccrual 
 Construction $ — $ — $ — $ — 
 Commercial multifamily — — — — 
 Commercial real estate owner occupied 2,202 1,411 1,100 — 
 Commercial real estate non-owner occupied 191 73 — — 
 Commercial and industrial 16,992 14,223 1,666 — 
 
 Residential real estate 8,901 5,307 2,823 — 
 Home equity 1,568 388 551 — 
 Consumer other 1,260 2 898 — 
 Total $ 31,114 $ 21,404 $ 7,038 $ — 

 The commercial and industrial loans nonaccrual amortized cost as of December 31, 2022 included medallion loans with a fair value of $ 0.6 million and a contractual balance of $ 10.9 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, 2023 
 Construction $ — $ — $ — 
 Commercial multifamily — — — 
 Commercial real estate owner occupied 650 — — 
 Commercial real estate non-owner occupied 342 — — 
 Commercial and industrial 4,788 — 944 
 
 Residential real estate 5,035 — — 
 Home equity 135 — — 
 Consumer other 40 — — 
 Total loans $ 10,990 $ — $ 944 

 
 
 
 Type of Collateral 
 (In thousands) Real Estate Investment Securities/Cash Other 
 December 31, 2022 
 Construction $ — $ — $ — 
 Commercial multifamily — — — 
 Commercial real estate owner occupied 2,793 — — 
 Commercial real estate non-owner occupied 384 — — 
 Commercial and industrial 288 — 16,931 
 
 Residential real estate 3,910 — — 
 Home equity 501 — — 
 Consumer other 2 — — 
 Total loans $ 7,878 $ — $ 16,931 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Modified Loans 
 Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. 
 
 
 In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For the loans included in the "combination" columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension and principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction. 
 
 
 The following table presents the amortized cost basis of loans at December 31, 2023 that were both experiencing financial difficulty and modified during the year ended December 31, 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below: 
 
 
 
 (In thousands) Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combination Term Extension and Principal Forgiveness Combination Term Extension and Interest Rate Reduction Total Class of Financing Receivable 
 Year ended December 31, 2023 
 Construction $ — $ — $ — $ — $ — $ — — % 
 Commercial multifamily — — — — — — — 
 Commercial real estate owner occupied — — 222 — — — 0.04 
 Commercial real estate non-owner occupied — — 11,454 — — 3,600 0.58 
 Commercial and industrial — 34 16,005 — — 9 1.18 % 
 Residential real estate — — — — — — — 
 Home equity — — — — — — — 
 Consumer other — — — — — — — 
 Total $ — $ 34 $ 27,681 $ — $ — $ 3,609 0.35 % 

 
 
 The Company has committed to lend additional amounts totaling $ 7.8 million to the borrowers included in the previous table. 
 
 
 
 
 F-38 

 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the last 12 months. 
 
 (In thousands) 30 - 59 Days Past Due 60 - 89 Days Past Due Greater Than 89 Days Past Due Total Past Due 
 December 31, 2023 
 Construction $ — $ — $ — $ — 
 Commercial multifamily — — — — 
 Commercial real estate owner occupied — — — — 
 Commercial real estate non-owner occupied — — — — 
 Commercial and industrial 34 — — 34 
 Residential real estate — — — — 
 Home equity — — — — 
 Consumer other — — — — 
 Total $ 34 $ — $ — $ 34 

 
 
 
 
 The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the year ended December 31, 2023: 
 
 (In thousands) Principal Forgiveness Weighted Average Interest Rate Reduction Weighted Average Term Extension (months) 
 Years ended December 31, 2023 
 Construction $ — — % 0 
 Commercial multifamily — — 0 
 Commercial real estate owner occupied — — 120 
 Commercial real estate non-owner occupied — 0.05 16 
 Commercial and industrial — 1.25 23 
 Residential real estate — — 0 
 Home equity — — 0 
 Consumer other — — 0 
 

 
 
 There were no loans that had a payment default during the years ended December 31, 2023 that were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. 
 
 
 Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. 
 
 
 
 
 F-39 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 
 
 
 
 
 NOTE 6. PREMISES AND EQUIPMENT 
 
 Year-end premises and equipment are summarized as follows: 
 
 (In thousands) 2023 2022 Estimated Useful
Life 
 Land $ 12,525 $ 15,536 N/A 
 Buildings and improvements 89,222 99,977 5 - 39 years 
 
 Furniture and equipment 64,290 63,554 3 - 7 years 
 
 Construction in process 327 1,147 
 Premises and equipment, gross 166,364 180,214 
 Accumulated depreciation and amortization ( 97,449 ) ( 94,997 ) 
 
 Premises and equipment, net $ 68,915 $ 85,217 
 
 

 
 Depreciation and amortization expense for the years 2023, 2022, and 2021 amounted to $ 8.4 million, $ 9.6 million, and $ 11.0 million, respectively. 
 F-40 

 
 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 7. OTHER INTANGIBLES 
 
 
 The components of other intangible assets are as follows: 
 
 (In thousands) Gross Intangible
Assets Accumulated
Amortization Net Intangible
Assets 
 December 31, 2023 
 Non-maturity deposits (core deposit intangible) $ 77,213 $ ( 58,965 ) $ 18,248 
 
 All other intangible assets 7,866 ( 6,450 ) 1,416 
 Total $ 85,079 $ ( 65,415 ) $ 19,664 
 
 December 31, 2022 
 Non-maturity deposits (core deposit intangible) $ 77,213 $ ( 54,618 ) $ 22,595 
 
 All other intangible assets 7,866 ( 5,978 ) 1,888 
 Total $ 85,079 $ ( 60,596 ) $ 24,483 

 
 
 Other intangible assets are amortized on a straight-line or accelerated basis over their estimated lives, which range from four to fifteen years . Amortization expense related to intangibles totaled $ 4.8 million in 2023, $ 5.1 million in 2022, and $ 5.2 million in 2021. 
 
 
 The estimated aggregate future amortization expense for intangible assets remaining at year-end 2023 is as follows: 2024- $ 4.6 million; 2025- $ 4.5 million; 2026- $ 4.5 million; 2027- $ 3.6 million; 2028 - $ 1.8 million; and thereafter- $ 0.7 million. For the years 2023, 2022, and 2021, no impairment charges were identified for the Company’s intangible assets. 
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 NOTE 8. OTHER ASSETS 
 
 
 Year-end other assets are summarized as follows: 
 
 (In thousands) 2023 2022 
 Capitalized servicing rights $ 12,095 $ 13,047 
 Accrued interest receivable 53,096 46,868 
 Accrued federal and state tax receivable 33,564 34,386 
 Right-of-use assets 47,348 46,411 
 Derivative assets 45,668 54,241 
 
 Deferred tax asset 110,068 118,331 
 Other 39,918 35,651 
 Total other assets $ 341,757 $ 348,935 
 
 

 
 
 The Bank sells loans in the secondary market and retains the right to service many of these loans. The Bank earns fees for the servicing provided. At years end 2023, 2022, and 2021, loans sold and serviced for others amounted to $ 1.4 billion, $ 1.5 billion, and $ 1.6 billion, respectively. Loans serviced for others are not included in the accompanying Consolidated Balance Sheets. The risks inherent in servicing assets relate primarily to changes in prepayments that result from shifts in interest rates. For the years 2023, 2022, and 2021, contractually specified servicing fees were $ 6.7 million, $ 5.5 million, and $ 8.0 million, respectively, and are included as a component of loan related fees within non-interest income . Refer to Note 19 - Fair Value Measurements for significant assumptions and inputs used in the valuation at year-end 2023. 
 
 
 Servicing rights activity was as follows: 
 
 (In thousands) 2023 2022 2021 
 Balance at beginning of year $ 13,047 $ 16,022 $ 16,348 
 
 
 Additions 2,892 3,119 4,568 
 Amortization ( 4,330 ) ( 4,590 ) ( 4,921 ) 
 Payoffs ( 952 ) ( 958 ) — 
 
 Allowance adjustment 1,438 ( 546 ) 27 
 
 Balance at end of year $ 12,095 $ 13,047 $ 16,022 

 (1) As of December 31, 2023 and December 31, 2022, the servicing rights included in the total balance accounted for at fair value were $ 1.5 million and $ 1.8 million, respectively. 
 
 
 At December 31, 2023, the fair value of servicing rights was $ 16.6 million. At December 31, 2022, the fair value of servicing rights was $ 16.7 million. 
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 NOTE 9. DEPOSITS 
 
 A summary of year-end time deposits is as follows: 
 
 (In thousands) 2023 2022 
 Maturity date: 
 Within 1 year $ 2,364,280 $ 912,756 
 Over 1 year to 2 years 270,630 606,856 
 Over 2 years to 3 years 26,039 68,984 
 Over 3 years to 4 years 9,020 28,441 
 Over 4 years to 5 years 9,864 15,835 
 Over 5 years 6,417 835 
 Total $ 2,686,250 $ 1,633,707 
 Account balances: 
 Less than $100,000 $ 724,911 $ 549,265 
 $100,000 through $250,000 1,276,175 642,600 
 $250,000 or more 685,164 441,842 
 Total $ 2,686,250 $ 1,633,707 

 
 Included in total deposits on the Consolidated Balance Sheets are brokered deposits of $ 524.4 million and $ 120.9 million at December 31, 2023 and December 31, 2022, respectively. Also included in total deposits are reciprocal deposits of $ 110.2 million and $ 71.1 million at December 31, 2023 and December 31, 2022, respectively, as well as related party deposits of $ 25.0 million and $ 22.3 million at December 31, 2023 and December 31, 2022, respectively. 
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 NOTE 10. BORROWED FUNDS 
 
 
 Borrowed funds at December 31, 2023 and 2022 are summarized, as follows: 
 
 2023 2022 
 (in thousands, except rates) Principal Weighted
Average
Rate Principal Weighted
Average
Rate 
 Short-term borrowings: 
 Advances from the FHLBB $ 260,000 5.54 % $ — — % 
 
 Total short-term borrowings: 260,000 5.54 — — 
 Long-term borrowings: 
 Advances from the FHLBB 125,223 4.80 4,445 0.71 
 
 Subordinated notes 98,335 5.50 98,089 5.50 
 Junior subordinated borrowing - Trust I 15,464 7.49 15,464 6.54 
 Junior subordinated borrowing - Trust II 7,564 7.35 7,511 6.47 
 Total long-term borrowings: 246,586 5.33 125,509 5.52 
 Total $ 506,586 5.44 % $ 125,509 5.52 % 

 
 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, 2023 and December 31, 2022. The Bank's available borrowing capacity with the FHLB was $ 2.5 billion and $ 1.5 billion for the periods ended December 31, 2023 and December 31, 2022, respectively. The Company was in compliance with all debt covenants as of December 31, 2023. 
 
 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, 2023 and December 31, 2022. The Bank's available borrowing capacity with the Federal Reserve Bank was $ 1.5 billion and $ 0.6 billion for the periods ended December 31, 2023 and December 31, 2022, respectively. 
 
 
 Long-term FHLBB advances consist of advances with an original maturity of more than one year and are subject to 
 prepayment penalties. There were no callable advances outstanding at December 31, 2023. The advances outstanding at December 31, 2023 included amortizing advances totaling $ 4.2 million. There were no callable advances outstanding at December 31, 2022. The advances outstanding at December 31, 2022 included amortizing advances totaling $ 4.4 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 2023 is as follows: 
 
 2023 
 (In thousands) Amount Weighted
Average Rate 
 Fixed rate advances maturing: 
 2024 $ 290,010 5.48 % 
 2025 90,000 5.01 
 2026 521 2.20 
 2027 158 2.00 
 2028 and beyond 4,534 0.34 
 
 
 
 
 
 
 
 
 
 
 Total FHLBB advances $ 385,223 5.30 % 

 
 
 The Company did no t have variable-rate FHLB advances for the period ended December 31, 2023 and December 31, 2022. 
 
 
 In June 2022, the Company issued ten year subordinated notes in the amount of $ 100.0 million. The interest rate is fixed at 5.50 % for the first five years . After five years , the notes become callable and will bear interest at a floating rate per annum equal to a benchmark rate (which is expected to be Three-Month Term SOFR), plus 249 basis points. The subordinated note includes reduction to the note principal balance of $ 1.7 million for unamortized debt issuance costs as of December 31, 2023. 
 
 
 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 7.49 % and 6.54 % at December 31, 2023 and December 31, 2022, 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 7.35 % and 6.47 % at December 31, 2023 and December 31, 2022. 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 11. OTHER LIABILITIES 
 
 
 Year-end other liabilities are summarized as follows: 
 
 (In thousands) 2023 2022 
 Derivative liabilities $ 75,957 $ 97,030 
 Collateral on interest rate swaps 25,520 — 
 Finance lease liabilities 8,681 9,306 
 
 Employee benefits liability 43,042 45,175 
 Operating lease liabilities 53,026 53,736 
 Accrued interest payable 13,766 1,610 
 Customer transaction clearing accounts 12,366 5,758 
 Allowance for credit losses on unfunded commitments 9,256 8,588 
 Other 37,016 34,821 
 Total other liabilities $ 278,630 $ 256,024 
 
 

 
 
 
 
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 NOTE 12. EMPLOYEE BENEFIT PLANS 
 
 Pension Plan 
 The Company maintains a legacy, employer-sponsored defined benefit pension plan (the “Plan”) for which participation and benefit accruals were frozen on January 1, 2003. The Plan was assumed in connection with the Rome Bancorp acquisition in 2011. Accordingly, no employees are permitted to commence participation in the Plan and future salary increases and years of credited service are not considered when computing an employee’s benefits under the Plan. As of December 31, 2023, 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) 2023 2022 
 Change in projected benefit obligation: 
 Projected benefit obligation at beginning of year $ 3,729 $ 5,328 
 Service Cost 59 68 
 Interest cost 186 141 
 Actuarial loss ( 20 ) ( 1,508 ) 
 Benefits paid ( 250 ) ( 263 ) 
 Settlements ( 62 ) ( 37 ) 
 Projected benefit obligation at end of year 3,642 3,729 
 
 Accumulated benefit obligation 3,642 3,729 
 
 Change in fair value of plan assets: 
 Fair value of plan assets at plan beginning of year 4,683 5,962 
 Actual return on plan assets 628 ( 979 ) 
 Contributions by employer — — 
 Benefits paid ( 250 ) ( 263 ) 
 Settlements ( 62 ) ( 37 ) 
 Fair value of plan assets at end of year 4,999 4,683 
 
 (Overfunded) status $ ( 1,357 ) $ ( 954 ) 

 
 Amounts Recognized on Consolidated Balance Sheets 
 Other assets $ 1,357 $ 954 
 Other liabilities — — 

 
 
 Net periodic pension cost is comprised of the following: 
 
 December 31, 
 (In thousands) 2023 2022 2021 
 Service Cost $ 59 $ 68 $ 59 
 Interest Cost 186 141 140 
 Expected return on plan assets ( 295 ) ( 376 ) ( 410 ) 
 Amortization of unrecognized actuarial loss 6 11 103 
 Net periodic pension (credit) $ ( 44 ) $ ( 156 ) $ ( 108 ) 

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 Changes in plan assets and benefit obligations recognized in accumulated other comprehensive income are as follows: 
 
 December 31, 
 (In thousands) 2023 2022 2021 
 Amortization of actuarial (loss) $ ( 6 ) $ ( 11 ) $ ( 103 ) 
 Actuarial (gain) ( 353 ) ( 154 ) ( 495 ) 
 Settlement charge — — ( 58 ) 
 Total recognized in accumulated other comprehensive income ( 359 ) ( 165 ) ( 656 ) 
 Total recognized in net periodic pension cost recognized and other comprehensive income $ ( 403 ) $ ( 321 ) $ ( 764 ) 

 
 
 The amounts in accumulated other comprehensive income/(loss) that have not yet been recognized as components of net periodic benefit cost are a net loss of $ 0.1 million, $ 0.5 million, and $ 0.7 million in 2023, 2022 and 2021, respectively. 
 
 
 The Company did not make any cash contributions to the pension trust during 2023 and 2022. The Company does no t expect to make any cash contributions in 2024. There is no gain/loss expected to be amortized from other comprehensive income into net periodic pension cost over the next fiscal year. 
 
 
 The principal actuarial assumptions used are as follows: 
 
 December 31, 
 2023 2022 2021 
 Projected benefit obligation 
 Discount rate 4.99 % 5.21 % 2.73 % 
 Net periodic pension cost 
 Discount rate 5.21 % 2.73 % 2.35 % 
 Long term rate of return on plan assets 6.50 % 6.50 % 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, 2023 and December 31, 2022. During 2023, the Plan's equity mutual funds and fixed income mutual funds were transferred to Level 1 from Level 2 because they are actively traded and quoted prices were available. The Plan did not hold any assets classified as Level 3. 
 
 December 31, 2023 
 Asset Category (In thousands) Total Level 1 Level 2 
 Equity Mutual Funds: 
 Large-Cap $ 1,357 $ 1,357 $ — 
 Mid-Cap 364 364 — 
 Small-Cap 386 386 — 
 International 828 828 — 
 
 
 Fixed Income Mutual Funds: 
 Intermediate Duration 1,674 1,674 — 
 Equity Common/Collective Trusts: 
 Large-Cap 336 — 336 
 Cash Equivalents - money market 54 54 — 
 Total $ 4,999 $ 4,663 $ 336 

 
 December 31, 2022 
 Asset Category (In thousands) Total Level 1 Level 2 
 Equity Mutual Funds: 
 Large-Cap $ 1,441 $ — $ 1,441 
 Mid-Cap 383 — 383 
 Small-Cap 318 — 318 
 International 814 — 814 
 
 Fixed Income - US Core 1,167 — 1,167 
 Intermediate Duration 396 — 396 
 Cash Equivalents - money market 164 72 92 
 Total $ 4,683 $ 72 $ 4,611 

 
 Estimated benefit payments under the pension plans over the next 10 years at December 31, 2023 are as follows: 
 
 Year Payments (In thousands) 
 2024 277 
 2025 271 
 2026 264 
 2027 258 
 2028 - 2033 1,551 
 

 
 
 Multi-Employer Pension Plan 
 As a result of the Company's acquisition of SI Financial Group, Inc. (“SIFI”), the Company participates in the Pentegra Defined Benefit Plan for Financial Institutions (the “DB Plan”), a tax-qualified defined benefit pension plan. The DB Plan operates as a multiple-employer plan under ERISA and the Internal Revenue Code, and as a multi-employer plan for accounting purposes. The DB Plan was frozen effective September 6, 2013. The Company made contributions of $ 136 thousand in 2023. As of July 1, 2023, the DB Plan held assets with a market value of $ 4.1 million and liabilities with a market value of $ 5.4 million. The funded status (market value of plan assets divided by funding target) of the DB Plan, was 80 % as of July 1, 2023, as required by federal and state regulations. Market value of the DB Plan's assets reflects contributions received through June 30, 2023. There are no collective bargaining agreements in place that require contributions to the DB Plan by the Company. The DB Plan is a single plan under the Internal Revenue Code and, as a result, all of the assets stand behind all of the liabilities. Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers. 
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 Postretirement Benefits 
 The Company maintains an unfunded postretirement medical plan assumed in connection with the Rome Bancorp acquisition in 2011. The postretirement plan has been modified so that participation is closed to those employees who did not meet the retirement eligibility requirements by March 31, 2011. The Company contributes partially to medical benefits and life insurance coverage for retirees. Such retirees and their surviving spouses are responsible for the remainder of the medical benefits, including increases in premiums levels, between the total premium and the Company’s contribution. 
 
 
 The Company also has an executive long-term care (“LTC”) postretirement benefit plan which started August 1, 2014. The LTC plan reimburses executives for certain costs in the event of a future chronic illness. Funding of the plan comes from Company paid insurance policies or direct payments. At the plan’s inception, a $ 558 thousand benefit obligation was recorded against equity representing the prior service cost of plan participants. 
 
 Information regarding the postretirement plans is as follows: 
 
 December 31, 
 (In thousands) 2023 2022 
 Change in accumulated postretirement benefit obligation: 
 Accumulated post-retirement benefit obligation at beginning of year $ 3,215 $ 4,521 
 
 Service Cost 7 12 
 Interest cost 166 122 
 Participant contributions — — 
 Actuarial loss 58 ( 1,396 ) 
 Benefits paid ( 140 ) ( 44 ) 
 
 Accumulated post-retirement benefit obligation at end of year $ 3,306 $ 3,215 
 
 Change in plan assets: 
 Fair value of plan assets at beginning of year $ — $ — 
 Contributions by employer 140 44 
 Contributions by participant — — 
 Benefits paid ( 140 ) ( 44 ) 
 Fair value of plan assets at end of year $ — $ — 

 
 Amounts Recognized on Consolidated Balance Sheets 
 Other Liabilities $ 3,306 $ 3,215 

 
 
 Net periodic post-retirement cost is comprised of the following: 
 
 December 31, 
 (In thousands) 2023 2022 2021 
 Service cost $ 7 $ 12 $ 13 
 Interest costs 166 122 113 
 Amortization of net prior service credit 83 83 83 
 Amortization of net actuarial loss ( 64 ) 30 55 
 Net periodic post-retirement costs $ 192 $ 247 $ 264 

 
 
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 Changes in benefit obligations recognized in accumulated other comprehensive income are as follows: 
 
 December 31, 
 (In thousands) 2023 2022 2021 
 
 Amortization of prior service credit $ ( 83 ) $ ( 83 ) $ ( 83 ) 
 Net actuarial (gain) ( 1,148 ) ( 1,426 ) ( 253 ) 
 Total recognized in accumulated other comprehensive income ( 1,231 ) ( 1,509 ) ( 336 ) 
 Accrued post-retirement liability recognized $ 3,306 $ 3,215 $ 4,521 

 
 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) 2023 2022 2021 
 Net prior service cost $ 1,075 $ 1,159 $ 1,242 
 Net actuarial (gain)/loss ( 690 ) ( 812 ) 615 
 Total recognized in accumulated other comprehensive income $ 385 $ 347 $ 1,857 

 
 The amount expected to be amortized from other comprehensive income/(loss) into net periodic postretirement cost over the next fiscal year is $ 60 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 4.98 % and 5.12 % as of December 31, 2023 and December 31, 2022, 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, 2023 are as follows: 
 
 Year Payments (In thousands) 
 2024 115 
 2025 112 
 2026 108 
 2027 111 
 2028 - 2033 1,140 
 

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 401(k) Plan 
 The Company provides a 401(k) Plan in which most eligible employees participate. Expenses related to the plan were $ 3.1 million in 2023, $ 2.9 million in 2022, and $ 3.2 million in 2021. 
 
 
 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 2023 and 2022, the accrued liability for these SERPs was $ 16.7 million and $ 19.4 million, respectively. SERP (benefit)/expense was $( 1.0 ) million in 2023, $ 2.0 million in 2022, and $ 2.0 million in 2021, 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 $ 7.0 million as of year-end 2023 and $ 7.9 million as of year-end 2022. 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 13. INCOME TAXES 
 
 Provision for Income Taxes 
 The components of the Company’s provision for income taxes for the years ended December 31, 2023, 2022, and 2021 were, as follows: 
 
 (In thousands) 2023 2022 2021 
 Current: 
 Federal tax expense $ 5,596 $ 17,915 $ 17,340 
 State tax expense 7,497 6,831 7,580 
 Total current tax expense (1) 
 13,093 24,746 24,920 
 Deferred: 
 Federal tax (benefit)/expense ( 2,658 ) ( 2,274 ) 5,125 
 State tax (benefit)/expense ( 1,711 ) ( 1,187 ) 112 
 Total deferred tax (benefit)/expense ( 4,369 ) ( 3,461 ) 5,237 
 Change in valuation allowance — — 200 
 Income tax expense $ 8,724 $ 21,285 $ 30,357 
 
 

 (1) The Company recorded 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 for years 2015 through 2017). 
 
 
 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, 2023, 2022, and 2021: 
 
 2023 2022 2021 
 (In thousands, except rates) Amount Rate Amount Rate Amount Rate 
 Statutory tax rate $ 16,448 21.0 % $ 23,902 21.0 % $ 31,294 21.0 % 
 Increase (decrease) resulting from: 
 State taxes, net of federal tax benefit 4,570 5.8 4,459 3.9 6,077 4.1 
 Tax exempt income - investments, net ( 3,611 ) ( 4.6 ) ( 3,515 ) ( 3.1 ) ( 3,475 ) ( 2.3 ) 
 Bank-owned life insurance ( 1,568 ) ( 2.0 ) ( 1,258 ) ( 1.1 ) ( 1,348 ) ( 0.9 ) 
 
 
 
 Tax credits, net of basis reduction ( 7,804 ) ( 10.0 ) ( 2,129 ) ( 1.9 ) ( 2,881 ) ( 1.9 ) 
 Change in valuation allowance — — — — 200 0.1 
 Tax rate benefit on net operating loss carryback — — — — ( 493 ) ( 0.3 ) 
 Other, net 689 0.9 ( 174 ) ( 0.1 ) 983 0.6 
 
 Effective tax rate $ 8,724 11.1 % $ 21,285 18.7 % $ 30,357 20.4 % 

 
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 Deferred Tax Assets and Liabilities 
 As of December 31, 2023 and 2022, significant components of the Company’s deferred tax assets and liabilities were, as follows: 
 
 (In thousands) 2023 2022 
 Deferred tax assets: 
 Allowance for credit losses $ 31,181 $ 28,312 
 
 Unrealized capital loss on tax credit investments 2,688 1,603 
 Net unrealized loss on securities available for sale, swaps, and pension in OCI 50,704 63,335 
 Employee benefit plans 12,102 11,659 
 Purchase accounting adjustments 4,587 4,342 
 Net operating loss carryforwards 202 503 
 Deferred loan fees 5,654 4,049 
 Lease liability 13,583 14,148 
 Premises and equipment 1,188 2,630 
 Nonaccrual interest 890 1,069 
 Intangible amortization 1,020 659 
 Other 2,337 1,778 
 Deferred tax assets, net before valuation allowances 126,136 134,087 
 Valuation allowance ( 400 ) ( 400 ) 
 Deferred tax assets, net of valuation allowances $ 125,736 $ 133,687 
 
 Deferred tax liabilities: 
 
 
 
 
 Loan servicing rights $ ( 1,133 ) $ ( 1,212 ) 
 
 
 Unamortized tax credit reserve ( 1,661 ) ( 1,687 ) 
 Right-of-use asset ( 12,874 ) ( 12,457 ) 
 Deferred tax liabilities $ ( 15,668 ) $ ( 15,356 ) 
 Deferred tax assets, net $ 110,068 $ 118,331 
 
 
 

 
 
 The Company’s net deferred tax asset decreased by $ 8.3 million during 2023 and $ 12.6 million of this change is related to unrealized losses in OCI. 
 
 Deferred tax assets, net of valuation allowances, are expected to be realized through the reversal of existing taxable temporary differences and future taxable income. 
 
 
 Valuation Allowances 
 The components of the Company’s valuation allowance on its deferred tax asset, net as of December 31, 2023 and 2022 were, as follows: 
 
 (in thousands) 2023 2022 
 
 
 State valuation allowances $ ( 400 ) $ ( 400 ) 

 
 
 The state tax valuation allowance, net of Federal benefit, was originally recorded in 2012, due to management's assessment that it is more likely than not that certain deferred tax assets recorded for the difference between the book basis and the state tax basis in certain tax credit limited partnership investments (LPs) will not be realized. Management anticipates that the remaining excess state tax basis realized upon termination of these partnerships will be a capital loss upon disposition, and that capital loss may not be deductible in some of the Company's state tax jurisdictions. 
 
 
 The valuation allowance as of December 31, 2023 is subject to change in the future as the Company continues to periodically assess the likelihood of realizing its deferred tax assets. 
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 Tax Attributes 
 At December 31, 2023, the Company has $ 491 thousand 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 $ 103 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 $ 99 thousand. 
 
 
 Unrecognized Tax Benefits 
 On a periodic basis, the Company evaluates its income tax positions based on tax laws and regulations and financial reporting considerations, and records adjustments as appropriate. This evaluation takes into consideration the status of taxing authorities’ current examinations of the Company’s tax returns, recent positions taken by the taxing authorities on similar transactions, if any, and the overall tax environment in relation to uncertain tax positions. 
 
 
 The following table presents changes in unrecognized tax benefits for the years ended December 31, 2023, 2022, and 2021: 
 
 (In thousands) 2023 2022 2021 
 Unrecognized tax benefits at January 1 $ 1,042 $ 1,025 $ 516 
 Increase in gross amounts of tax positions related to prior years 782 17 509 
 Decrease in gross amounts of tax positions related to prior years — — — 
 Decrease due to settlement with taxing authority — — — 
 
 Decrease due to lapse in statute of limitations — — — 
 Unrecognized tax benefits at December 31 $ 1,824 $ 1,042 $ 1,025 

 
 
 It is reasonably possible that over the next twelve months the amount of unrecognized tax benefits may change from the reevaluation of uncertain tax positions arising in examinations, in appeals, or in the courts, or from the closure of tax statutes. The Company does not expect any significant changes in unrecognized tax benefits during the next twelve months. 
 
 
 All of the Company’s unrecognized tax benefits, if recognized, would be recorded as a component of income tax expense, therefore, affecting the effective tax rate. The Company recognizes interest and penalties, if any, related to the liability for uncertain tax positions as a component of income tax expense. The accrual for interest and penalties was not material for all years presented. 
 
 
 The Company and its subsidiaries file income tax returns in the U.S. federal jurisdiction as well as in various states. In the normal course of business, the Company is subject to U.S. federal, state, and local income tax examinations by tax authorities. Other than open statutes of limitation pertaining specifically to the amended returns filed for 2015 through 2018 to claim 2020 NOL carryback refunds, the Company is no longer subject to examination for tax years prior to 2020 including any related income tax filings from its recent acquisitions. The Company has been selected for an income tax audit in the state of Connecticut for tax years 2019, 2020, and 2021, as well as an income tax audit in the state of Wisconsin for tax years 2018, 2019, and 2020 . 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 14. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES 
 
 
 At year-end 2023, the Company held derivatives with a total notional amount of $ 4.8 billion. That amount included $ 0.6 billion in interest rate swap derivatives and $ 0.2 billion in interest rate collars that were designated as cash flow hedges for accounting purposes. The Company had economic hedges and non-hedging derivatives totaling $ 4.0 billion and $ 11.1 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 $ 3.6 billion, risk participation agreements with dealer banks of $ 376.6 million, and $ 2.2 million in forward commitment contracts. 
 
 
 As part of the Company’s risk management strategy, the Company enters into interest rate swap agreements to mitigate the interest rate risk inherent in certain of the Company’s assets and liabilities. Interest rate swap agreements involve the risk of dealing with both Bank customers and institutional derivative counterparties and their ability to meet contractual terms. The agreements are entered into with counterparties that meet established credit standards and contain master netting and collateral provisions protecting the at-risk party. The derivatives program is overseen by the Risk Management, Capital and Compliance Committee of the Company’s Board of Directors. Based on adherence to the Company’s credit standards and the presence of the netting and collateral provisions, the Company believes that the credit risk inherent in these contracts was not significant at December 31, 2023. 
 
 
 The Company had no pledged collateral to derivative counterparties in the form of cash at year-end 2023. The Company had pledged securities to derivative counterparties with an amortized cost of $ 9.8 million and a fair value of $ 9.6 million at year-end 2023. The Company had no pledged collateral to derivative counterparties in the form of cash at year-end 2022. The Company had pledged securities to derivative counterparties with an amortized cost of $ 12.0 million and a fair value of $ 12.0 million at year-end 2022. 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. 
 
 
 
 
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 Information about interest rate swap agreements and non-hedging derivative assets and liabilities at December 31, 2023 follows: 
 
 Notional
Amount Weighted
Average
Maturity Weighted Average Rate Estimated
Fair Value
Asset (Liability) 
 December 31, 2023 Received Contract pay rate 
 (In thousands) (In years) (In thousands) 
 Cash flow hedges: 
 Interest rate swaps on commercial loans (1) $ 600,000 1.9 3.64 % 5.35 % $ — 
 
 Interest rate collars on commercial loans 200,000 2.5 1,658 
 Total cash flow hedges 800,000 1,658 
 
 Economic hedges: 
 Interest rate swap on tax advantaged economic development bond $ 6,202 5.9 5.82 % 5.09 % $ ( 172 ) 
 Interest rate swaps on loans with commercial loan customers (1) 1,795,562 4.9 4.36 % 6.27 % ( 63,865 ) 
 Reverse interest rate swaps on loans with commercial loan customers (1) 1,795,562 4.9 6.27 % 4.36 % 32,053 
 Risk participation agreements with dealer banks 376,553 5.5 ( 18 ) 
 Forward sale commitments 2,207 0.2 21 
 Total economic hedges 3,976,086 ( 31,981 ) 
 
 Non-hedging derivatives: 
 Commitments to lend 11,104 0.2 34 
 Total non-hedging derivatives 11,104 34 
 
 Total $ 4,787,190 $ ( 30,289 ) 

 (1) Fair value estimates include the impact of $ 26.7 million settled to market contract agreements. 
 
 
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 Information about interest rate swap agreements and non-hedging derivative asset and liabilities at December 31, 2022 follows: 
 
 Notional
Amount Weighted
Average
Maturity Weighted Average Rate Estimated
Fair Value
Asset (Liability) 
 December 31, 2022 Received Contract pay rate 
 (In thousands) (In years) (In thousands) 
 Cash flow hedges: 
 Interest rate swaps on commercial loans (1) $ 400,000 2.7 4.09 % 3.51 % $ — 
 Forward-starting interest rate swaps on commercial loans (1) 200,000 3.3 — % 3.90 % — 
 Interest rate collars on commercial loans 200,000 3.5 1,937 
 Total cash flow hedges 800,000 1,937 
 
 Economic hedges: 
 Interest rate swap on tax advantaged economic development bond $ 7,062 6.9 4.49 % 5.09 % $ ( 193 ) 
 Interest rate swaps on loans with commercial loan customers 1,685,263 5.7 4.11 % 5.55 % ( 95,114 ) 
 Reverse interest rate swaps on loans with commercial loan customers (1) 1,685,263 5.7 5.55 % 4.11 % 50,267 
 Risk participation agreements with dealer banks 341,885 6.6 ( 89 ) 
 Forward sale commitments 927 0.2 8 
 Total economic hedges 3,720,400 ( 45,121 ) 
 
 Non-hedging derivatives: 
 Commitments to lend 4,114 0.2 17 
 Total non-hedging derivatives 4,114 17 
 
 Total $ 4,524,514 $ ( 43,167 ) 

 (1) Fair value estimates include the impact of $ 38.3 million settled to market contract agreements. 
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 Cash flow hedges 
 The effective portion of unrealized changes in the fair value of derivatives accounted for as cash flow hedges is reported in other comprehensive income/(loss) and subsequently reclassified to earnings in the same period or periods during which the hedged transaction is forecasted to affect earnings. Each quarter, the Company assesses the effectiveness of each hedging relationship by comparing the changes in cash flows of the derivative hedging instrument with the changes in cash flows of the designated hedged item or transaction. The ineffective portion of changes in the fair value of the derivatives is recognized directly in earnings. All cash flow hedges are considered highly effective. 
 
 
 As of December 31, 2023, the Company had eight interest rate swap contracts with a notional value of $ 600.0 million. The interest rate swaps have durations of two to three years . This hedge strategy converts commercial variable rate loans to fixed interest rates, thereby protecting the Company from floating interest rate variability. 
 
 
 As of December 31, 2023, the Company had two interest rate collars. The first interest rate collar has a 3.00 % floor and a 5.75 % cap with a notional value of $ 100.0 million. The second interest rate collar has a 3.25 % floor and a 5.75 % cap with a notional value of $ 100.0 million. The interest rate collars have durations of three to four years . The structure of these instruments is such that the Company pays the counterparty an incremental amount if the collar index exceeds the cap rate. Conversely, the Company receives an incremental amount if the index falls below the floor rate. No payments are required if the collar index falls between the cap and floor rates. 
 
 
 Amounts included in the Consolidated Statements of Income and in the other comprehensive income/(loss) section of the Consolidated Statements of Comprehensive Income/(Loss) (related to interest rate derivatives designated as hedges of cash flows), were as follows: 
 
 
 
 Years Ended December 31, 
 (In thousands) 2023 2022 2021 
 Interest rate swaps and collars on commercial loans: 
 Unrealized gain/(loss) recognized in accumulated other comprehensive loss $ 1,770 $ ( 6,667 ) $ — 
 
 Less: Reclassification of unrealized (loss) from accumulated other comprehensive loss to interest income 
 ( 632 ) — — 
 
 
 
 Net tax benefit on items recognized in accumulated other comprehensive income ( 630 ) 1,789 — 
 
 Other comprehensive gain/(loss) recorded in accumulated other comprehensive income/(loss), net of reclassification adjustments and tax effects $ 1,772 $ ( 4,878 ) $ — 
 Net interest expense recognized on hedged commercial loans 
 $ 9,026 $ ( 15 ) $ — 

 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Economic hedges 
 As of December 31, 2023 the Company has an interest rate swap with a $ 6.2 million notional amount to swap out the fixed rate of interest on an economic development bond bearing a fixed rate of 5.09 %, currently within the Company’s trading portfolio under the fair value option, in exchange for a SOFR-based floating rate. The intent of the economic hedge is to improve the Company’s asset sensitivity to changing interest rates in anticipation of favorable average floating rates of interest over the 21 -year life of the bond. The fair value changes of the economic development bond are mostly offset by fair value changes of the related interest rate swap. 
 
 The Company also offers certain derivative products directly to qualified commercial borrowers. The Company economically hedges derivative transactions executed with commercial borrowers by entering into mirror-image, offsetting derivatives with third-party financial institutions. The transaction allows the Company’s customer to convert a variable-rate loan to a fixed rate loan. Because the Company acts as an intermediary for its customer, changes in the fair value of the underlying derivative contracts mostly offset each other in earnings. There was no credit valuation loss adjustment arising from the difference in credit worthiness of the commercial loan and financial institution counterparties as of December 31, 2023. The interest income and expense on these mirror image swaps exactly offset each other. 
 
 The Company has risk participation agreements with dealer banks. Risk participation agreements occur when the Company participates on a loan and a swap where another bank is the lead. The Company earns a fee to take on the risk associated with having to make the lead bank whole on Berkshire’s portion of the pro-rated swap should the borrower default. 
 
 The Company utilizes forward sale commitments to hedge interest rate risk and the associated effects on the fair value of interest rate lock commitments and loans held for sale. The forward sale commitments are accounted for as derivatives with changes in fair value recorded in current period earnings. 
 
 The company uses the following types of forward sale commitments contracts: 
 • Best efforts loan sales, 
 • Mandatory delivery loan sales, and 
 • To be announced (TBA) mortgage-backed securities sales. 
 
 A best efforts contract refers to a loan sales agreement where the Company commits to deliver an individual mortgage loan of a specified principal amount and quality to an investor if the loan to the underlying borrower closes. The Company may enter into a best efforts contract once the price is known, which is shortly after the potential borrower’s interest rate is locked. 
 
 A mandatory delivery contract is a loan sales agreement where the Company commits to deliver a certain principal amount of mortgage loans to an investor at a specified price on or before a specified date. Generally, the Company may enter into mandatory delivery contracts shortly after the loan closes with a customer. 
 
 The Company may sell to-be-announced mortgage-backed securities to hedge the changes in fair value of interest rate lock commitments and held for sale loans, which do not have corresponding best efforts or mandatory delivery contracts. These security sales transactions are closed once mandatory contracts are written. On the closing date the price of the security is locked-in, and the sale is paired-off with a purchase of the same security. Settlement of the security purchase/sale transaction is done with cash on a net-basis. 
 
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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 Income. Changes in the fair value of commitments subsequent to inception are based on changes in the fair value of the underlying loan resulting from the fulfillment of the commitment and changes in the probability that the loan will fund within the terms of the commitment, which is affected primarily by changes in interest rates and the passage of time. 
 
 
 Amounts included in the Consolidated Statements of Income related to economic hedges and non-hedging derivatives were as follows: 
 
 Years Ended December 31, 
 (In thousands) 2023 2022 2021 
 
 Economic hedges 
 Interest rate swap on industrial revenue bond: 
 Unrealized gain/(loss) recognized in other non-interest income $ 21 $ 941 $ 619 
 
 Interest rate swaps on loans with commercial loan customers: 
 Unrealized gain/(loss) recognized in other non-interest income 31,310 ( 171,272 ) ( 86,099 ) 
 Favorable/(unfavorable) change in credit valuation adjustment recognized in other non-interest income — 1,809 1,431 
 Reverse interest rate swaps on loans with commercial loan customers: 
 Unrealized (loss)/gain recognized in other non-interest income ( 31,310 ) 171,272 86,099 
 
 
 Risk Participation Agreements: 
 
 Unrealized (loss) recognized in other non-interest income ( 74 ) ( 521 ) ( 233 ) 
 
 Forward Commitments: 
 
 Unrealized gain/(loss) recognized in other non-interest income 13 ( 126 ) ( 186 ) 
 
 
 
 
 
 Non-hedging derivatives 
 Commitments to lend: 
 Unrealized gain/(loss) recognized in other non-interest income $ 17 $ ( 107 ) $ ( 611 ) 
 
 Realized gain in other non-interest income 536 462 2,854 
 
 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Assets and Liabilities Subject to Enforceable Master Netting Arrangements 
 
 
 Interest Rate Swap Agreements (“Swap Agreements”) 
 The Company enters into swap agreements to facilitate the risk management strategies for commercial banking customers. The Company mitigates this risk by entering into equal and offsetting swap agreements with highly rated third party financial institutions. The swap agreements are free-standing derivatives and are recorded at fair value in the Company’s Consolidated Balance Sheets. The Company is party to master netting arrangements with its financial institution counterparties; however, the Company does not offset assets and liabilities under these arrangements for financial statement presentation purposes. The master netting arrangements provide for a single net settlement of all swap agreements, as well as collateral, in the event of default on, or termination of, any one contract. Collateral generally in the form of marketable securities is received or posted by the counterparty with net liability positions, respectively, in accordance with contract thresholds. 
 
 
 The Company had net asset positions with its financial institution counterparties totaling $ 39.8 million and $ 51.2 million as of December 31, 2023 and December 31, 2022, respectively. The Company had net asset positions with its commercial banking counterparties totaling $ 6.0 million and $ 1.0 million as of December 31, 2023 and December 31, 2022, respectively. 
 
 
 The Company had net liability positions with its financial institution counterparties totaling $ 6.1 million and $ 1.2 million as of December 31, 2023 and December 31, 2022, respectively. The Company had net liability positions with its commercial banking counterparties totaling $ 69.8 million and $ 96.1 million as of December 31, 2023 and December 31, 2022, respectively. 
 
 The following table presents the assets and liabilities subject to an enforceable master netting arrangement as of December 31, 2023 and December 31, 2022: 
 
 Offsetting of Financial Assets and Derivative Assets 
 
 Gross
Amounts of
Recognized
Assets Gross Amounts
Offset in the
Statements of
Condition Net Amounts of Assets
Presented in the Statements of
Condition Gross Amounts Not Offset in the Statements
of Condition 
 Financial
Instruments Cash
Collateral Received 
 (in thousands) Net Amount 
 As of December 31, 2023 
 Interest Rate Swap Agreements: 
 Institutional counterparties $ 71,579 $ ( 31,812 ) $ 39,767 $ — $ — $ 39,767 
 Commercial counterparties 5,992 — 5,992 — — 5,992 
 Total $ 77,571 $ ( 31,812 ) $ 45,759 $ — $ — $ 45,759 

 
 
 
 
 Offsetting of Financial Liabilities and Derivative Liabilities 
 
 Gross
Amounts of
Recognized
Liabilities Gross Amounts
Offset in the
Statements of
Condition Net Amounts of Liabilities
Presented in the Statement of
Condition Gross Amounts Not Offset in the Statements
of Condition 
 Financial
Instruments Cash
Collateral Received 
 (in thousands) Net Amount 
 As of December 31, 2023 
 Interest Rate Swap Agreements: 
 Institutional counterparties $ ( 11,277 ) $ 5,142 $ ( 6,135 ) $ 9,633 $ — $ 3,498 
 Commercial counterparties ( 69,796 ) — ( 69,796 ) — — ( 69,796 ) 
 Total $ ( 81,073 ) $ 5,142 $ ( 75,931 ) $ 9,633 $ — $ ( 66,298 ) 

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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, 2022 
 Interest Rate Swap Agreements: 
 Institutional counterparties $ 96,295 $ ( 45,046 ) $ 51,249 $ — $ — $ 51,249 
 Commercial counterparties 975 — 975 — — 975 
 Total $ 97,270 $ ( 45,046 ) $ 52,224 $ — $ — $ 52,224 

 
 
 
 
 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, 2022 
 Interest Rate Swap Agreements: 
 Institutional counterparties $ ( 1,271 ) $ 36 $ ( 1,235 ) $ 11,973 $ — $ 10,738 
 Commercial counterparties ( 102,595 ) 6,507 ( 96,088 ) — — ( 96,088 ) 
 Total $ ( 103,866 ) $ 6,543 $ ( 97,323 ) $ 11,973 $ — $ ( 85,350 ) 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 15. LEASES 
 
 
 Substantially all of the leases in which the Company is the lessee are comprised of real estate property for branches, ATM locations, and office space. Most of the Company’s leases are classified as operating leases. At December 31, 2023, lease expiration dates ranged from 1 month to 16 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, 2023 December 31, 2022 
 Lease Right-of-Use Assets Classification 
 Operating lease right-of-use assets Other assets $ 47,348 $ 46,411 
 Finance lease right-of-use assets Premises and equipment, net 5,597 6,151 
 Total Lease Right-of-Use Assets $ 52,945 $ 52,562 
 
 Lease Liabilities 
 Operating lease liabilities Other liabilities $ 53,026 $ 53,736 
 Finance lease liabilities Other liabilities 8,681 9,306 
 Total Lease Liabilities $ 61,707 $ 63,042 

 
 
 
 
 Supplemental information related to leases was as follows: 
 
 December 31, 2023 December 31, 2022 
 Weighted-Average Remaining Lease Term (in years) 
 Operating leases 8.3 9.3 
 Finance leases 10.8 11.8 
 
 Weighted-Average Discount Rate 
 Operating leases 2.90 % 2.56 % 
 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, 2023 was $ 9.1 million. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities. 
 
 
 Lease expense for operating leases for the year ended December 31, 2022 was $ 9.7 million. Variable lease components, such as consumer price index adjustments, are expensed as incurred and not included in ROU assets and operating lease liabilities. 
 
 
 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. 
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 Supplemental cash flow information related to leases was as follows: 
 
 (In thousands) December 31, 2023 December 31, 2022 December 31, 2021 
 Cash paid for amounts included in the measurement of lease liabilities: 
 Operating cash flows from operating leases $ 9,009 $ 9,438 $ 10,897 
 Operating cash flows from finance leases 446 476 503 
 Financing cash flows from finance leases 593 555 528 
 
 Right-of-use assets obtained in exchange for lease obligations: 
 Operating leases 8,512 5,730 2,976 
 Finance leases — — — 

 
 
 
 
 The following table presents a maturity analysis of the Company’s lease liability by lease classification at December 31, 2023: 
 
 (In thousands) Operating Leases Finance Leases 
 2024 $ 9,519 $ 1,039 
 2025 8,533 1,039 
 2026 7,471 1,039 
 2027 6,589 1,039 
 2028 5,567 1,039 
 Thereafter 21,399 6,036 
 Total undiscounted lease payments 59,078 11,231 
 Less amounts representing interest ( 6,052 ) ( 2,550 ) 
 Lease liability $ 53,026 $ 8,681 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 16. OTHER COMMITMENTS, CONTINGENCIES, AND OFF-BALANCE SHEET ACTIVITIES 
 
 
 Credit Related Financial Instruments. The Company is a party to financial instruments with off-balance-sheet risk in the normal course of business to meet the financing needs of its customers. These financial instruments include commitments to extend credit and standby letters of credit. Such commitments involve, to varying degrees, elements of credit, and interest rate risk in excess of the amount recognized in the accompanying Consolidated Balance Sheets. 
 
 
 The Company’s exposure to credit loss in the event of non-performance by the other party to the financial instrument is represented by the contractual amount of these commitments. The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. A summary of financial instruments outstanding whose contract amounts represent credit risk is as follows at year-end: 
 
 (In thousands) 2023 2022 
 Commitments to originate new loans $ 256,877 $ 305,474 
 Unused funds on commercial and other lines of credit 1,146,415 966,523 
 Unadvanced funds on home equity lines of credit 347,543 336,924 
 Unadvanced funds on construction and real estate loans 467,702 694,091 
 Standby letters of credit 18,975 21,387 
 Total $ 2,237,512 $ 2,324,399 

 
 
 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 2023 and 2022. 
 
 
 The Company has 28.9 million of commitments remaining for tax credit investments as of December 31, 2023. 
 
 
 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, 2023, 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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 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 17. SHAREHOLDERS’ EQUITY AND EARNINGS PER COMMON SHARE 
 
 
 Minimum Regulatory Capital Requirements 
 The Company and Bank are subject to various regulatory capital requirements administered by the federal and state banking agencies. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if imposed, could have a direct material impact on the Company’s Consolidated Financial Statements. Under capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company and Bank must meet specific capital guidelines that involve quantitative measures of its assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weighting and other factors. 
 
 
 Quantitative measures established by regulation to ensure capital adequacy require the Company and Bank to maintain minimum amounts and ratios (set forth in the following table) of total and Tier 1 capital (as defined in the regulations) to risk-weighted assets (as defined) and of Tier 1 capital to average assets (as defined). As of year-end 2023 and 2022, 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, 2023, 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, 2023 also exceeded the minimum capital requirements including the currently applicable BASEL III capital conservation buffer of 1.875%. 
 
 
 As of year-end 2023 and 2022, 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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 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 The Company and Bank’s actual and required capital amounts were as follows: 
 
 Minimum
Capital
Requirement 
 Actual 
 (Dollars in thousands) Amount Ratio Amount Ratio 
 December 31, 2023 
 Company (Consolidated) 
 Total capital to risk-weighted assets $ 1,371,740 14.36 % $ 764,130 8.00 % 
 Common Equity Tier 1 Capital to risk weighted assets 1,149,620 12.04 429,823 4.50 
 Tier 1 capital to risk-weighted assets 1,171,957 12.27 573,098 6.00 
 Tier 1 capital to average assets 1,171,957 9.65 382,065 4.00 
 Total risk-weighted assets 9,551,627 N/A N/A N/A 
 
 December 31, 2022 
 Company (Consolidated) 
 Total capital to risk-weighted assets $ 1,336,029 14.60 % $ 732,070 8.00 % 
 Common Equity Tier 1 Capital to risk weighted assets 1,130,522 12.35 411,789 4.50 
 Tier 1 capital to risk-weighted assets 1,152,808 12.60 549,052 6.00 
 Tier 1 capital to average assets 1,152,808 10.18 366,035 4.00 
 Total risk-weighted assets 9,150,869 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, 2023 
 Bank 
 Total capital to risk-weighted assets $ 1,268,037 13.29 % $ 763,503 8.00 % $ 954,379 10.00 % 
 Common Equity Tier 1 Capital to risk weighted assets 1,167,282 12.23 429,470 4.50 620,346 6.50 
 Tier 1 capital to risk-weighted assets 1,167,282 12.23 572,627 6.00 763,503 8.00 
 Tier 1 capital to average assets 1,167,282 9.61 381,751 4.00 477,189 5.00 
 Total risk-weighted assets 9,543,786 N/A N/A N/A N/A N/A 
 
 December 31, 2022 
 Bank 
 Total capital to risk-weighted assets $ 1,239,722 13.56 % $ 731,259 8.00 % $ 914,074 10.00 % 
 Common Equity Tier 1 Capital to risk weighted assets 1,155,280 12.64 411,333 4.50 594,148 6.50 
 Tier 1 capital to risk-weighted assets 1,155,280 12.64 548,444 6.00 731,259 8.00 
 Tier 1 capital to average assets 1,155,280 10.20 365,629 4.00 457,037 5.00 
 Total risk-weighted assets 9,140,737 N/A N/A N/A N/A N/A 

 
 
 
 
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 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 Common stock 
 The Bank is subject to dividend restrictions imposed by various regulators, including a limitation on the total of all dividends that the Bank may pay to the Company in any calendar year. The total of all dividends shall not exceed the Bank’s net income for the current year (as defined by statute), plus the Bank’s net income retained for the two previous years, without regulatory approval. Dividends from the Bank are an important source of funds to the Company to make dividend payments on its common, to make payments on its borrowings, and for its other cash needs. The ability of the Company and the Bank to pay dividends is dependent on regulatory policies and regulatory capital requirements. The ability to pay such dividends in the future may be adversely affected by new legislation or regulations, or by changes in regulatory policies relating to capital, safety and soundness, and other regulatory concerns. 
 
 
 The payment of dividends by the Company is subject to Delaware law, which generally limits dividends to an amount equal to an excess of the net assets of a company (the amount by which total assets exceed total liabilities) over statutory capital, or if there is no excess, to the Company’s net profits for the current and/or immediately preceding fiscal year. 
 
 
 Accumulated other comprehensive income 
 Year-end components of accumulated other comprehensive (loss) are as follows: 
 
 (In thousands) 2023 2022 
 Other accumulated comprehensive (loss), before tax: 
 Net unrealized holding (loss) on AFS securities $ ( 188,927 ) $ ( 236,887 ) 
 Net (loss) on effective cash flow hedging derivatives ( 4,265 ) ( 6,667 ) 
 
 Net unrealized holding (loss) on pension plans ( 528 ) ( 844 ) 
 
 Income taxes related to items of accumulated other comprehensive (loss): 
 
 Net unrealized holding loss on AFS securities 49,401 61,329 
 Net loss on effective cash flow hedging derivatives 1,159 1,789 
 
 Net unrealized holding loss on pension plans 144 228 
 Accumulated other comprehensive (loss) $ ( 143,016 ) $ ( 181,052 ) 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 The following table presents the components of other comprehensive income/(loss) for the years ended December 31, 2023, 2022, and 2021: 
 
 (In thousands) Before Tax Tax Effect Net of Tax 
 Year Ended December 31, 2023 
 Net unrealized holding gain on AFS securities: 
 
 Net unrealized gain arising during the period $ 22,903 $ ( 5,122 ) $ 17,781 
 Less: reclassification adjustment for (losses) realized in net income ( 25,057 ) 6,806 ( 18,251 ) 
 Net unrealized holding gain on AFS securities 47,960 ( 11,928 ) 36,032 
 
 Net gain on cash flow hedging derivatives: 
 
 Net unrealized gain arising during the period 1,770 ( 458 ) 1,312 
 Less: reclassification adjustment for (losses) realized in net income ( 632 ) 172 ( 460 ) 
 Net gain on cash flow hedging derivatives 2,402 ( 630 ) 1,772 
 
 
 
 
 
 
 Net unrealized holding gain on pension plans 
 
 Net unrealized gain arising during the period 316 ( 84 ) 232 
 Less: reclassification adjustment for (losses) realized in net income — — — 
 Net unrealized holding gain on pension plans 316 ( 84 ) 232 
 Other comprehensive income $ 50,678 $ ( 12,642 ) $ 38,036 

 
 (In thousands) Before Tax Tax Effect Net of Tax 
 Year Ended December 31, 2022 
 Net unrealized holding (loss) on AFS securities: 
 Net unrealized (loss) arising during the period $ ( 235,075 ) $ 60,920 $ ( 174,155 ) 
 Less: reclassification adjustment for gains realized in net income 6 ( 2 ) 4 
 Net unrealized holding (loss) on AFS securities ( 235,081 ) 60,922 ( 174,159 ) 
 
 Net (loss) on cash flow hedging derivatives: 
 Net unrealized (loss) arising during the period ( 6,667 ) 1,789 ( 4,878 ) 
 Less: reclassification adjustment for (losses) realized in net income — — — 
 Net (loss) on cash flow hedging derivatives ( 6,667 ) 1,789 ( 4,878 ) 
 
 Net unrealized holding gain on pension plans 
 
 Net unrealized gain arising during the period 1,674 ( 446 ) 1,228 
 Less: reclassification adjustment for (losses) realized in net income — — — 
 Net unrealized holding gain on pension plans 1,674 ( 446 ) 1,228 
 Other comprehensive (loss) $ ( 240,074 ) $ 62,265 $ ( 177,809 ) 

 
 (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 gains realized in net income — — — 
 Net unrealized holding (loss) on AFS securities ( 46,794 ) 11,937 ( 34,857 ) 
 
 Net unrealized holding gain 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 gain on pension plans 993 ( 250 ) 743 
 
 
 
 
 
 Other comprehensive (loss) $ ( 45,801 ) $ 11,687 $ ( 34,114 ) 
 
 
 
 
 

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 The following table presents the changes in each component of accumulated other comprehensive (loss)/income, for the years ended December 31, 2023, 2022, and 2021: 
 
 (in thousands) Net unrealized holding gain (loss) on AFS Securities Net loss on effective cash flow hedging derivatives Net unrealized holding gain (loss) on pension plans Total 
 Year Ended December 31, 2023 
 Balance at Beginning of Year $ ( 175,557 ) $ ( 4,878 ) $ ( 617 ) $ ( 181,052 ) 
 Other comprehensive income before reclassifications 
 17,781 1,312 232 19,325 
 Amounts reclassified from accumulated other comprehensive income ( 18,251 ) ( 460 ) — ( 18,711 ) 
 Total other comprehensive income 
 36,032 1,772 232 38,036 
 Balance at End of Period $ ( 139,525 ) $ ( 3,106 ) $ ( 385 ) $ ( 143,016 ) 
 
 Year Ended December 31, 2022 
 Balance at Beginning of Year $ ( 1,398 ) $ — $ ( 1,845 ) $ ( 3,243 ) 
 Other comprehensive (loss)/income before reclassifications 
 ( 174,155 ) ( 4,878 ) 1,228 ( 177,805 ) 
 Amounts reclassified from accumulated other comprehensive income 4 — — 4 
 Total other comprehensive (loss)/income ( 174,159 ) ( 4,878 ) 1,228 ( 177,809 ) 
 Balance at End of Period $ ( 175,557 ) $ ( 4,878 ) $ ( 617 ) $ ( 181,052 ) 
 
 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 ) 

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 The following table presents the amounts reclassified out of each component of accumulated other comprehensive income/(loss) for the years ended December 31, 2023, 2022, and 2021: 
 
 Affected Line Item in the
Statement Where Net Income
Is Presented 
 Years Ended December 31, 
 (in thousands) 2023 2022 2021 
 Realized (losses)/gains on AFS securities: 
 
 $ ( 25,057 ) $ 6 $ — Non-interest income 
 6,806 ( 2 ) — Tax expense 
 ( 18,251 ) 4 — 
 
 Realized (losses) on cash flow hedging derivatives: 
 ( 632 ) — — Interest expense 
 
 — — — Non-interest expense 
 172 — — Tax benefit 
 ( 460 ) — — 
 
 
 
 
 
 
 Realized (losses) on pension plans: 
 — — — Non-interest expense 
 — — — Tax expense 
 — — — 
 Total reclassifications for the period $ ( 18,711 ) $ 4 $ — 

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 Earnings Per Common Share 
 Basic earnings per common share (“EPS”) excludes dilution and is computed by dividing net income applicable to common stock by the weighted average number of common shares outstanding for the year. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock (such as stock options) were exercised or converted into additional common shares that would then share in the earnings of the entity. Diluted EPS is computed by dividing net income applicable to common stock by the weighted average number of common shares outstanding for the year, plus an incremental number of common-equivalent shares computed using the treasury stock method. 
 
 
 Earnings per common share has been computed based on the following (average diluted shares outstanding is calculated using the treasury stock method): 
 
 Years Ended December 31, 
 (In thousands, except per share data) 2023 2022 2021 
 
 
 Net income $ 69,598 $ 92,533 $ 118,664 
 
 Average number of common shares issued 51,903 51,903 51,903 
 Less: average number of treasury shares 7,820 5,577 1,951 
 Less: average number of unvested stock award shares 795 762 712 
 
 Average number of basic common shares outstanding 43,288 45,564 49,240 
 Plus: dilutive effect of unvested stock award shares 216 345 309 
 Plus: dilutive effect of stock options outstanding — 5 5 
 Average number of diluted common shares outstanding 43,504 45,914 49,554 
 
 
 
 
 Basic earnings per common share $ 1.61 $ 2.03 $ 2.41 
 
 
 
 
 Diluted earnings per common share $ 1.60 $ 2.02 $ 2.39 

 
 For the year ended 2023, 49 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations. For the year ended 2022, 64 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations. For the year ended 2021, 88 thousand options were anti-dilutive and therefore excluded from the earnings per share calculations. 
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 NOTE 18. STOCK-BASED COMPENSATION PLANS 
 
 
 The 2022 Equity Incentive Plan (the “2022 Plan”) permits the granting of a combination of Restricted Stock awards and incentive and non-qualified stock options (“Stock Options”) to employees and directors. A total of 1.2 million shares was authorized under the Plan. Awards may be granted as either Restricted Stock or Stock Options provided that any shares that are granted as Restricted Stock are counted against the share limit set forth as (1) one for every one share of Restricted Stock granted and (2) one for every one share of Stock Option granted. As of the 2022 Plan's effective date, all expired, canceled, and forfeited shares under the 2018 Plan are included in the 2022 Plan's available shares. As of year-end 2023, the Company had the ability to grant approximately 1.2 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, 2022 704 $ 22.85 49 $ 26.46 
 Granted 446 26.18 — — 
 
 Stock options exercised — — — — 
 Stock awards vested ( 262 ) 21.29 — — 
 Forfeited ( 103 ) 25.67 — — 
 Expired — — — — 
 Balance, December 31, 2023 785 $ 24.92 49 $ 26.46 
 

 
 
 Stock Awards 
 The total compensation cost for stock awards recognized as expense was $ 7.5 million, $ 7.3 million, and $ 4.2 million, in the years 2023, 2022, and 2021, respectively. The total recognized tax benefit associated with this compensation cost was $ 2.0 million, $ 2.0 million, and $ 1.0 million, respectively. 
 
 
 The weighted average fair value of stock awards granted was $ 26.18 , $ 28.75 , and $ 20.22 in 2023, 2022, and 2021, 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 2023, 2022, and 2021 was $ 5.6 million, $ 5.1 million, and $ 4.3 million respectively. The unrecognized stock-based compensation expense related to unvested stock awards was $ 10.1 million as of year-end 2023. 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 2023, the weighted average remaining contractual term for options outstanding is two 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 2023 and 2022. 
 
 
 There were no options exercised during 2023. The total intrinsic value of options exercised was $ 62 thousand and $ 102 thousand for the years 2022 and 2021, respectively. The expense pertaining to options vesting was $ 1 thousand, $ 13 thousand, and $ 14 thousand for the years 2023, 2022, and 2021, respectively. The tax benefit associated with stock option expense for 2023, 2022, and 2021 was $ 0.2 thousand, $ 3 thousand, and $ 4 thousand, respectively. As of December 31, 2023, there was no unrecognized stock-based compensation expense related to unvested stock options. The unrecognized stock-based compensation expense related to unvested stock options as of year-end 2022 and 2021 was $ 1 thousand and $ 14 thousand, respectively. 
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 NOTE 19. FAIR VALUE MEASUREMENTS 
 
 
 A description of the valuation methodologies used for instruments measured at fair value, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. These valuation methodologies were applied to all of the Company’s financial assets and financial liabilities that are carried at fair value. 
 
 
 Recurring Fair Value Measurements of Financial Instruments 
 The following table summarizes assets and liabilities measured at fair value on a recurring basis as of year-end 2023 and 2022 segregated by the level of the valuation inputs within the fair value hierarchy utilized to measure fair value: 
 
 December 31, 2023 
 (In thousands) Level 1
Inputs Level 2
Inputs Level 3
Inputs Total
Fair Value 
 
 Trading security $ — $ — $ 6,142 $ 6,142 
 Available-for-sale securities: 
 U.S Treasuries 7,981 — — 7,981 
 Municipal bonds and obligations — 63,853 — 63,853 
 Agency collateralized mortgage obligations — 347,874 — 347,874 
 Agency residential mortgage-backed securities — 417,480 — 417,480 
 Agency commercial mortgage-backed securities — 145,326 — 145,326 
 Corporate bonds — 35,192 3,923 39,115 
 
 Other bonds and obligations — 656 — 656 
 Marketable equity securities 13,029 — — 13,029 
 Loans held for investment — — 374 374 
 Loans held for sale — 2,237 — 2,237 
 Derivative assets — 45,613 55 45,668 
 Capitalized servicing rights — — 1,526 1,526 
 Derivative liabilities — 75,957 — 75,957 

 
 December 31, 2022 
 Level 1
Inputs Level 2
Inputs Level 3
Inputs Total
Fair Value 
 (In thousands) 
 Trading security $ — $ — $ 6,708 $ 6,708 
 Securities available for sale: 
 U.S Treasuries 11,973 — — 11,973 
 Municipal bonds and obligations — 63,335 — 63,335 
 Agency collateralized mortgage obligations — 531,945 — 531,945 
 Agency residential mortgage-backed securities — 546,313 — 546,313 
 Agency commercial mortgage-backed securities — 228,468 — 228,468 
 Corporate bonds — 36,510 4,000 40,510 
 Other bonds and obligations — 656 656 
 
 
 Marketable equity securities 12,856 — — 12,856 
 Loans held for investment at fair value — — 605 605 
 Loans held for sale — 942 — 942 
 Derivative assets — 54,216 25 54,241 
 Capitalized servicing rights — — 1,846 1,846 
 Derivative liabilities — 97,030 — 97,030 

 
 
 
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 During the years ended December 31, 2023 and December 31, 2022, there were no transfers between Level 1, 2 and 3. 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. 
 
 
 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, 2023. 
 
 Aggregate Fair Value 
 December 31, 2023 Aggregate Aggregate Less Aggregate 
 (In thousands) Fair Value Unpaid Principal Unpaid Principal 
 Loans held for investment at fair value $ 374 $ 8,809 $ ( 8,435 ) 

 
 Aggregate Fair Value 
 December 31, 2022 Aggregate Aggregate Less Aggregate 
 (In thousands) Fair Value Unpaid Principal Unpaid Principal 
 Loans held for investment at fair value $ 605 $ 10,948 $ ( 10,343 ) 

 
 
 
 
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 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, 2023 (In thousands) 
 Loans held for sale $ 2,237 $ 2,205 $ 32 

 
 Aggregate
Fair Value Aggregate
Unpaid Principal Aggregate Fair Value
Less Aggregate
Unpaid Principal 
 December 31, 2022 (In thousands) 
 Loans held for sale $ 942 $ 927 $ 15 

 
 The changes in fair value of loans held for sale for the year ended December 31, 2023 were gains of $ 17 thousand. The changes in fair value of loans held for sale for the year ended December 31, 2022 were losses of $ 169 thousand. The changes in fair value of loans held for sale for the year ended December 31, 2021 were gains of $ 169 thousand. During 2023, originations of loans held for sale totaled $ 85 million and sales of loans originated for sale totaled $ 84 million. During 2022, originations of loans held for sale totaled $ 20 million and sales of loans originated for sale totaled $ 25 million. During 2021, originations of loans held for sale totaled $ 104 million and sales of loans originated for sale totaled $ 108 million. 
 
 
 Interest Rate Swaps. The valuation of the Company’s interest rate swaps is obtained from a third-party pricing service and is determined using a discounted cash flow analysis on the expected cash flows of each derivative. The pricing analysis is based on observable inputs for the contractual terms of the derivatives, including the period to maturity and interest rate curves. 
 
 
 The Company incorporates credit valuation adjustments to appropriately reflect both its own nonperformance risk and the respective counterparty’s nonperformance risk in the fair value measurements. In adjusting the fair value of its derivative contracts for the effect of nonperformance risk, the Company has considered the impact of netting and any applicable credit enhancements, such as collateral postings. 
 
 
 Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its derivatives utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. However, as of year-end 2023, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives. As a result, the Company has determined that its derivative valuations in their entirety are classified in Level 2 of the fair value hierarchy. 
 
 
 Commitments to Lend. The Company enters into commitments to lend for residential mortgage loans intended for sale, which commit the Company to lend funds to a potential borrower at a certain interest rate and within a specified period of time. The estimated fair value of commitments to originate residential mortgage loans for sale is based on quoted prices for similar loans in active markets. However, this value is adjusted by a factor which considers the likelihood that the loan commitment will ultimately close, and by the non-refundable costs of originating the loan. The closing ratio is derived from the Bank’s internal data and is adjusted using significant management judgment. The costs to originate are primarily based on the Company’s internal commission rates that are not observable. As such, these commitments to lend are classified as Level 3 measurements. 
 
 
 Forward Sale Commitments . The Company utilizes forward sale commitments as economic hedges against potential changes in the values of the commitments to lend and loans originated for sale. To be announced (TBA) mortgage-backed securities forward commitment sales are used as hedging instruments, are classified as Level 1, and consist of publicly-traded debt securities for which identical fair values can be obtained through quoted market prices in active exchange markets. The fair values of the Company’s best efforts and mandatory delivery loan sale commitments are determined similarly to the commitments to lend using quoted prices in the market place that are observable. However, costs to originate and closing ratios included in the calculation are internally generated and 
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 are based on management’s judgment and prior experience, which are considered factors that are not observable. As such, best efforts and mandatory forward sale commitments are classified as Level 3 measurements. 
 
 
 Capitalized Servicing Rights. The Company accounts for certain capitalized servicing rights at fair value in its Consolidated Financial Statements, as the Company is permitted to elect the fair value option for each specific instrument. A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy. 
 
 The table below presents the changes in Level 3 assets that were measured at fair value on a recurring basis at year-end 2023 and 2022: 
 
 Assets (Liabilities) 
 (In thousands) Trading
Security Securities Available for Sale Loans Held for Investment Commitments to Lend Forward
Commitments Capitalized Servicing Rights 
 
 Balance as of December 31, 2021 $ 8,354 $ 4,030 $ 1,200 $ 124 $ 134 $ 1,966 
 
 Unrealized (loss) gain, net recognized in other non-interest income ( 828 ) — 314 200 ( 126 ) ( 120 ) 
 Unrealized (loss) included in accumulated other comprehensive loss — ( 30 ) — — — — 
 
 Paydown of asset ( 818 ) — ( 909 ) — — — 
 Transfers to loans held for sale — — — ( 307 ) — — 
 
 Balance as of December 31, 2022 $ 6,708 $ 4,000 $ 605 $ 17 $ 8 $ 1,846 
 
 
 Unrealized gain (loss), net recognized in other non-interest income 294 — ( 128 ) 305 13 ( 320 ) 
 
 Unrealized (loss) in included in accumulated other comprehensive loss — ( 77 ) — — — — 
 
 Paydown of asset ( 860 ) — ( 103 ) — — — 
 Transfers to loans held for sale — — ( 288 ) — — 
 
 Balance as of December 31, 2023 $ 6,142 $ 3,923 $ 374 $ 34 $ 21 $ 1,526 
 
 Unrealized (losses)/gains relating to instruments still held at December 31, 2023 $ ( 60 ) $ ( 77 ) $ — $ 34 $ 21 $ — 
 Unrealized (losses)/gains relating to instruments still held at December 31, 2022 $ ( 354 ) $ — $ — $ 17 $ 8 $ — 

 
 
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 Quantitative information about the significant unobservable inputs within Level 3 recurring assets/(liabilities) as of December 31, 2023 and 2022 are as follows: 
 
 Fair Value Significant Unobservable Input Value 
 (In thousands) December 31, 2023 Valuation Techniques Unobservable Inputs 
 Assets 
 Trading Security $ 6,142 Discounted Cash Flow Discount Rate 4.19 % 
 Securities Available for Sale 3,923 Indication from Market Maker Price 98.07 % 
 Loans held for investment 374 Discounted Cash Flow Discount Rate 25.00 % 
 Collateral Value $ 0.0 - $ 18.3 
 
 Commitments to Lend 34 Historical Trend Closing Ratio 84.29 % 
 Pricing Model Origination Costs, per loan $ 3 
 Forward Commitments 21 Historical Trend Closing Ratio 84.29 % 
 Pricing Model Origination Costs, per loan $ 3 
 Capitalized Servicing Rights 1,526 Discounted cash flow Constant prepayment rate (CPR) 7.63 % 
 Discount rate 11.08 % 
 Total $ 12,020 

 
 
 
 Fair Value Significant
Unobservable Input
Value 
 (In thousands) December 31, 2022 Valuation Techniques Unobservable Inputs 
 Assets 
 Trading Security $ 6,708 Discounted Cash Flow Discount Rate 5.92 % 
 Securities Available for Sale 4,000 Indication from Market Maker Price 100.00 % 
 Loans held for investment 605 Discounted Cash Flow Discount Rate 25.00 % 
 Collateral Value $ 0.0 -$ 20.4 
 
 Commitments to Lend 17 Historical Trend Closing Ratio 80.63 % 
 Pricing Model Origination Costs, per loan $ 2 
 Forward Commitments 8 Historical Trend Closing Ratio 80.63 % 
 Pricing Model Origination Costs, per loan $ 2 
 Capitalized Servicing Rights 1,846 Discounted cash flow Constant prepayment rate (CPR) 11.07 % 
 Discount rate 9.56 % 
 
 Total $ 13,184 

 
 
 
 
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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, 2023 Fair Value Measurements as of December 31, 2023 
 (In thousands) Level 3 
Inputs Level 3 
Inputs 
 Assets 
 Individually evaluated loans $ 4,395 December 2023 
 
 Capitalized servicing rights 10,569 December 2023 
 
 
 Total $ 14,964 

 
 December 31, 2022 Fair Value Measurements as of December 31, 2022 
 (In thousands) Level 3
Inputs Level 3
Inputs 
 Assets 
 Individually evaluated loans $ 14,571 December 2022 
 Loans held for sale $ 3,369 December 2022 
 Capitalized servicing rights 11,201 December 2022 
 
 
 Total $ 29,141 

 
 
 Quantitative information about the significant unobservable inputs within Level 3 non-recurring assets as of December 31, 2023 and 2022 are as follows: 
 
 (in thousands) December 31, 2023 Valuation Techniques Unobservable Inputs Range (Weighted Average) (a) 
 Assets 
 Individually evaluated loans $ 4,395 Fair value of collateral Discounted Cash Flow- Loss Severity ( 100.00 )% to ( 0.08 )% (( 67.00 )%) 
 
 Appraised value $ 0 to $ 3,389 ($ 2,774 ) 
 
 
 Capitalized servicing rights 10,569 Discounted cash flow Constant prepayment rate (CPR) 5.43 % to 17.15 % 12.31 % 
 
 Discount rate 10.09 % to 16.59 % ( 13.82 %) 
 
 Total Assets $ 14,964 

 (a) Where dollar amounts are disclosed, the amounts represent the lowest and highest fair value of the respective assets in the population except for adjustments for market/property conditions, which represents the range of adjustments to individual properties. 
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 (in thousands) December 31, 2022 Valuation Techniques Unobservable Inputs Range (Weighted Average) (a) 
 Assets 
 
 Individually evaluated loans $ 14,571 Fair value of collateral Discounted Cash Flow- Loss Severity ( 100.00 )% to 74.74 % (( 40.02 )%) 
 
 Appraised value $ 0 to $ 2,160 ($ 643 ) 
 
 Loans held for sale 3,369 Fair value of collateral Appraised value $ 3,369 
 Capitalized servicing rights 11,201 Discounted cash flow Constant prepayment rate (CPR) 5.81 % to 13.18 % ( 10.94 %) 
 
 Discount rate 9.59 % to 22.70 % ( 16.83 %) 
 
 Total Assets $ 29,141 

 (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 2023 and 2022. 
 
 Individually evaluated loans. Loans are generally not recorded at fair value on a recurring basis. Periodically, the Company records non-recurring adjustments to the carrying value of loans based on fair value measurements for partial charge-offs of the uncollectible portions of those loans. Non-recurring adjustments can also include certain impairment amounts for collateral-dependent loans calculated when establishing the allowance for credit losses. Such amounts are generally based on the fair value of the underlying collateral supporting the loan and, as a result, the carrying value of the loan less the calculated valuation does not necessarily represent the fair value of the loan. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. However, the choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Additionally, commercial real estate appraisals frequently involve discounting of projected cash flows, which relies inherently on unobservable data. Therefore, real estate collateral related nonrecurring fair value measurement adjustments have generally been classified as Level 3. Estimates of fair value for other collateral that supports commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. 
 
 
 Loans Transferred to Held for Sale. Once a decision has been made to sell loans not previously classified as held for sale, these loans are transferred into the held for sale category and carried at the lower of cost or fair value. Real estate collateral is typically valued using appraisals or other indications of value based on recent comparable sales of similar properties or assumptions generally observable in the marketplace. The choice of observable data is subject to significant judgment, and there are often adjustments based on judgment in order to make observable data comparable and to consider the impact of time, the condition of properties, interest rates, and other market factors on current values. Nonrecurring fair value measurement adjustments that relate to real estate collateral have generally been classified as Level 3. Estimates of fair value for other collateral that supports commercial loans are generally based on assumptions not observable in the marketplace and therefore such valuations have been classified as Level 3. 
 
 
 Capitalized loan servicing rights . A loan servicing right asset represents the amount by which the present value of the estimated future net cash flows to be received from servicing loans exceed adequate compensation for performing the servicing. The fair value of servicing rights is estimated using a present value cash flow model. The most important assumptions used in the valuation model are the anticipated rate of the loan prepayments and discount rates. Adjustments are only recorded when the discounted cash flows derived from the valuation model are less than the carrying value of the asset. Although some assumptions in determining fair value are based on standards used by market participants, some are based on unobservable inputs and therefore are classified in Level 3 of the valuation hierarchy. 
 
 
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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. 
 
 December 31, 2023 
 Carrying
Amount Fair
Value 
 (In thousands) Level 1 Level 2 Level 3 
 Financial Assets 
 
 Cash and cash equivalents $ 1,203,244 $ 1,203,244 $ 1,203,244 $ — $ — 
 Trading security 6,142 6,142 — — 6,142 
 Marketable equity securities 13,029 13,029 13,029 — — 
 Securities available for sale 1,022,285 1,022,285 7,981 1,010,381 3,923 
 Securities held to maturity 543,351 476,228 — 474,742 1,486 
 FHLB stock and restricted equity securities 22,689 N/A N/A N/A N/A 
 Net loans 8,934,329 8,768,108 — — 8,768,108 
 Loans held for sale 2,237 2,237 — 2,237 — 
 Accrued interest receivable 53,096 53,096 — 53,096 — 
 
 Derivative assets 45,668 45,668 — 45,613 55 
 
 
 Financial Liabilities 
 
 Total deposits 10,633,384 10,615,655 — 10,615,655 — 
 Short-term debt 260,000 260,035 — 260,035 — 
 Long-term FHLB advances 125,223 123,747 — 123,747 — 
 Subordinated notes 121,363 98,138 — 98,138 — 
 Accrued interest payable 13,766 13,766 — 13,766 — 
 Derivative liabilities 75,957 75,957 — 75,957 — 
 

 
 December 31, 2022 
 Carrying
Amount Fair
Value 
 (In thousands) Level 1 Level 2 Level 3 
 
 Financial Assets 
 Cash and cash equivalents $ 685,355 $ 685,355 $ 685,355 $ — $ — 
 Trading security 6,708 6,708 — — 6,708 
 Marketable equity securities 12,856 12,856 12,856 — — 
 Securities available for sale 1,423,200 1,423,200 11,973 1,407,227 4,000 
 Securities held to maturity 583,453 507,464 — 505,508 1,956 
 FHLB stock and restricted equity securities 7,219 N/A N/A N/A N/A 
 Net loans 8,239,039 8,194,110 — — 8,194,110 
 Loans held for sale 4,311 4,311 — 942 3,369 
 Accrued interest receivable 46,868 46,868 — 46,868 — 
 
 Derivative assets 54,241 54,241 — 54,216 25 
 
 
 Financial Liabilities 
 Total deposits 10,327,269 10,283,543 — 10,283,543 — 
 Short-term debt — — — — — 
 Long-term FHLB advances 4,445 2,782 — 2,782 — 
 Subordinated notes 121,064 110,853 — 110,853 — 
 Accrued interest payable 1,610 1,610 — 1,610 — 
 Derivative liabilities 97,030 97,030 — 97,030 — 
 
 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 20. CONDENSED FINANCIAL STATEMENTS OF PARENT COMPANY 
 
 Condensed financial information pertaining only to the Parent, Berkshire Hills Bancorp, is as follows. 
 
 
 CONDENSED BALANCE SHEETS 
 
 December 31, 
 (In thousands) 2023 2022 
 Assets 
 Cash due from Berkshire Bank $ 98,452 $ 90,022 
 Investment in subsidiaries 1,038,039 986,805 
 
 Other assets 399 1,445 
 Total assets $ 1,136,890 $ 1,078,272 
 
 Liabilities and Shareholders’ Equity 
 
 Subordinated notes $ 121,363 $ 121,064 
 Accrued expenses 3,306 3,146 
 Shareholders’ equity 1,012,221 954,062 
 Total liabilities and shareholders’ equity $ 1,136,890 $ 1,078,272 

 
 CONDENSED STATEMENTS OF INCOME 
 
 Years Ended December 31, 
 (In thousands) 2023 2022 2021 
 Income: 
 Dividends from subsidiaries $ 62,000 $ 108,000 $ 118,000 
 Other 50 23 31 
 Total income 62,050 108,023 118,031 
 Interest expense 5,697 7,044 5,393 
 Non-interest expenses 3,702 2,754 2,719 
 Total expense 9,399 9,798 8,112 
 Income before income taxes and equity in undistributed income of subsidiaries 52,651 98,225 109,919 
 Income tax (benefit) ( 2,500 ) ( 2,586 ) ( 2,136 ) 
 Income before equity in undistributed income of subsidiaries 55,151 100,811 112,055 
 Equity in undistributed results of operations of subsidiaries 14,447 ( 8,278 ) 6,609 
 
 Net income 69,598 92,533 118,664 
 
 
 
 Comprehensive income/(loss) $ 107,634 $ ( 85,276 ) $ 84,550 

 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 CONDENSED STATEMENTS OF CASH FLOWS 
 
 Years Ended December 31, 
 (In thousands) 2023 2022 2021 
 Cash flows from operating activities: 
 Net income $ 69,598 $ 92,533 $ 118,664 
 Adjustments to reconcile net income to net cash provided by operating activities: 
 Equity in undistributed results of operations of subsidiaries ( 14,447 ) 8,278 ( 6,609 ) 
 Other, net 8,688 5,998 5,816 
 Net cash provided by operating activities 63,839 106,809 117,871 
 
 Cash flows from investing activities: 
 
 
 
 Sale of securities — — 167 
 
 Net cash provided by investing activities — — 167 
 
 Cash flows from financing activities: 
 Proceeds from issuance of short term debt — — 232 
 Proceeds from issuance of long term debt — 98,032 — 
 Repayment of long term debt — ( 75,000 ) — 
 
 
 
 
 Payment to repurchase common stock ( 23,844 ) ( 124,519 ) ( 68,712 ) 
 Common stock cash dividends paid ( 31,707 ) ( 24,527 ) ( 24,553 ) 
 
 Other, net 142 281 431 
 Net cash (used) in financing activities ( 55,409 ) ( 125,733 ) ( 92,602 ) 
 
 Net change in cash and cash equivalents 8,430 ( 18,924 ) 25,436 
 
 Cash and cash equivalents at beginning of year 90,022 108,946 83,510 
 
 Cash and cash equivalents at end of year $ 98,452 $ 90,022 $ 108,946 

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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 21. QUARTERLY DATA (UNAUDITED) 
 
 Quarterly results of operations were as follows: 
 
 2023 2022 
 (In thousands, except per share data) Fourth Quarter Third Quarter Second Quarter First Quarter Fourth Quarter Third Quarter Second Quarter First Quarter 
 Interest and dividend income $ 150,537 $ 148,021 $ 145,425 $ 132,316 $ 121,384 $ 103,671 $ 87,379 $ 74,823 
 Interest expense 62,116 57,687 52,666 34,783 19,292 11,587 6,021 5,760 
 Net interest income 88,421 90,334 92,759 97,533 102,092 92,084 81,358 69,063 
 Non-interest income ( 8,383 ) 17,465 17,094 16,606 15,654 16,251 16,351 20,681 
 Total revenue 80,038 107,799 109,853 114,139 117,746 108,335 97,709 89,744 
 Provision expense/(benefit) for credit losses 7,000 8,000 8,000 8,999 12,000 3,000 — ( 4,000 ) 
 Non-interest expense 78,992 76,513 74,048 71,955 70,014 81,677 68,475 68,550 
 Income before income taxes ( 5,954 ) 23,286 27,805 33,185 35,732 23,658 29,234 25,194 
 Income tax (benefit)/expense ( 4,509 ) 3,741 3,944 5,548 5,227 4,941 6,119 4,998 
 
 
 Net income $ ( 1,445 ) $ 19,545 $ 23,861 $ 27,637 $ 30,505 $ 18,717 $ 23,115 $ 20,196 
 
 
 
 
 Basic earnings per share $ ( 0.03 ) $ 0.45 $ 0.55 $ 0.63 $ 0.69 $ 0.42 $ 0.50 $ 0.42 
 
 
 
 
 Diluted earnings per share $ ( 0.03 ) $ 0.45 $ 0.55 $ 0.63 $ 0.69 $ 0.42 $ 0.50 $ 0.42 
 
 Weighted average common shares outstanding: 
 Basic 42,852 43,164 43,443 43,693 44,105 44,700 45,818 47,668 
 Diluted 43,101 43,347 43,532 44,036 44,484 45,034 46,102 48,067 

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 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 22. NET INTEREST INCOME AFTER PROVISION FOR CREDIT LOSSES 
 
 Presented below is net interest income after provision for credit losses for the three years ended 2023, 2022, and 2021, respectively: 
 
 Years Ended December 31, 
 (In thousands) 2023 2022 2021 
 Net interest income $ 369,047 $ 344,597 $ 291,166 
 Provision expense/(benefit) for credit losses 31,999 11,000 ( 500 ) 
 Net interest income after provision for credit losses 337,048 333,597 291,666 
 Total non-interest income 42,782 68,937 143,248 
 Total non-interest expense 301,508 288,716 285,893 
 Income before income taxes 78,322 113,818 149,021 
 Income tax expense 8,724 21,285 30,357 
 Net income 69,598 92,533 118,664 
 
 
 
 

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 Table of Contents 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 NOTE 23. 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 2023, 2022, and 2021, respectively. 
 
 Years Ended December 31, 
 (In thousands) 2023 2022 2021 
 Non-interest income 
 In-scope of Topic 606: 
 
 Service charges on deposit accounts 
 $ 24,160 $ 22,396 $ 20,249 
 Wealth management fees 
 10,197 10,008 10,530 
 Interchange income 
 8,395 8,470 8,321 
 Insurance commissions and fees 
 — — 7,003 
 Non-interest income (in-scope of Topic 606) 
 $ 42,752 $ 40,874 $ 46,103 
 Non-interest income (out-of-scope of Topic 606) 
 30 28,063 97,145 
 Total non-interest income $ 42,782 $ 68,937 $ 143,248 

 
 
 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. 
 
 
 
 
 
 
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 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

 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. 
 
 
 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. 
 
 
 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. 
 
 
 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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Beacon Financial Corp 10-K

Item 9A. Controls and Procedures
