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Item 9A. Controls and Procedures

2026-03-02 compared with 2025-03-03 · 2713 added, 2425 removed, 325 unchanged (94% of the section changed)

Controls and Procedures

The Company’s management, including the Company’s Principal Executive Officer and Principal Financial Officer, have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a and 15(d) -15(e) promulgated under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) as of December 31, 2024.

Based upon their evaluation, the Principal Executive Officer and Principal Financial Officer concluded that, as of that date, the Company’s disclosure controls and procedures were effective for the purpose of ensuring that the information required to be disclosed in the reports that the Company files or submits under the Exchange Act with the Securities and Exchange Commission (the “SEC”):

(1) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms;

and (2) is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure.

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

The Company evaluated changes in its internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934) that occurred during the last fiscal quarter.

The Company determined that there were no changes that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

Management’s report on internal control over financial reporting and the independent registered public accounting firm’s report on the Company’s internal control over financial reporting are contained in “Item 8 — Consolidated Financial Statements and Supplementary Data.”

Under the supervision and with the participation of the Company's management, including the Company's Chief Executive Officer (Principal Executive Officer) and Chief Financial and Strategy Officer (Principal Financial Officer and Principal Accounting Officer), the Company has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report.

Based upon that evaluation, the Chief Executive Officer and Chief Financial and Strategy Officer concluded that, as of the end of the period covered by this report, the Company's disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and (ii) accumulated and communicated to the Company's management, including its Chief Financial and Strategy Officer, as appropriate to allow timely decisions regarding required disclosure.

The Company's management reviews its internal control over financial reporting on an ongoing basis and makes changes intended to ensure the quality of its financial reporting.

As a result of the Transaction, management commenced the evaluation of the Company's controls and designed and implemented new controls as needed.

The evaluation of the changes to processes, information technology systems and other components of internal control over financial reporting as a result of the Transaction is ongoing.

Otherwise, there were no changes in the Company’s internal control over financial reporting as of December 31, 2025 that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.

As further discussed below, management has elected to exclude the operations of Berkshire Hills Bancorp, Inc.

from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025.

The completed integration of systems and processes as a result of the Transaction could cause changes to the Company's internal control over financial reporting in future periods.

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f).

The Company's internal control system was designed to provide reasonable assurance to its management and the Board of Directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed have inherent limitations.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

The Company's management assessed the effectiveness of its internal control over financial reporting as of the end of the period covered by this report.

In addition, the effectiveness of the Company's internal control over financial reporting as of the end of the period covered by this report has been audited by KPMG LLP, an independent registered public accounting firm as stated in its report which is included in Item 8 of this Annual Report on Form 10-K.

Management's Report on Internal Control Over Financial Reporting as of December 31, 2025 appears on page F-1 herein and the related Report of Independent Registered Public Accounting Firm thereon appears on page F-2 herein.

Other Information

During the three months ended December 31, 2025, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted , terminated or modified a Rule 10b5-1 trading arrangement or non Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

1 unchanged sentence

Directors, Executive Officers and Corporate Governance

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

The information required by this item is incorporated herein by reference to the Company's Proxy Statement to be filed in connection with the Annual Meeting of Stockholders (the "Proxy Statement").

Executive Compensation

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

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS

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

The information required by this item is incorporated herein by reference to the Proxy Statement, except as to information disclosed therein pursuant to Item 402(v) of Regulation S-K relating to pay versus performance.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Refer to Note 20, "Employee Benefit Plans," to the consolidated financial statements for a discussion of the Company's equity compensation plans.

Certain Relationships and Related Transactions, and Director Independence

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

The information required by this item is incorporated herein by reference to the Proxy Statement.

Principal Accounting Fees and Services

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

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

EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) [1] Consolidated Financial Statements

• Report of Independent Registered Public Accounting Firm

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

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

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

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

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

• Notes to Consolidated Financial Statements

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

Our independent registered public accounting firm is KPMG LLP , Boston, MA , Auditor Firm ID:

The information required by this item is incorporated herein by reference to the Proxy Statement.

Exhibits, Financial Statement Schedules

(a) Financial Statements

All financial statements are included in Item 8 of Part II of this Annual Report on Form 10-K.

(2) Financial Statement Schedules

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

All financial statement schedules have been omitted because they are not required, not applicable or are included in the consolidated financial statements or related notes.

The exhibits listed in paragraph (b) below are filed herewith or incorporated herein by reference to other filings.

EXHIBIT INDEX

Exhibit Description

2.1 Agreement and Plan of Merger, dated as of December 16, 2024, by and among Berkshire Hills Bancorp, Inc., Commerce Acquisition Sub, Inc., and Brookline Bancorp, Inc.

3.1 Amended Certificate of Incorporation of Berkshire Hills Bancorp, Inc.

(incorporated by reference to Exhibit 2.1 of the Company's Current Report on Form 8-K filed on December 16, 2024).

3.1* Amended Certificate of Incorporation of Beacon Financial Corporation

3.2 Amended and Restated Bylaws of Berkshire Hills Bancorp, Inc.

3.4 Certificate of Designations of the Series B Non-Voting Preferred Stock ( 4 )

(incorporated by reference from Exhibits to the Form 8-K as filed on June 26, 2017)

3.3* Amendment to the Amended and Restated Bylaws of Beacon Financial Corporation

3.4 Certificate of Designations of the Series B Non-Voting Preferred Stock (incorporated herein by reference from the Exhibits to Form S-1, Registration Statement and amendments thereto, initially filed on March 10, 2000, Registration No.

4.1 Form of Common Stock Certificate of Berkshire Hills Bancorp, Inc.

(incorporated herein by reference from the Exhibits to Form 10-Q as filed on August 9, 2018)

4.2 Note Subscription Agreement by and among Berkshire Hills Bancorp, Inc.

and certain subscribers dated September 20, 2012 (5)

and certain subscribers dated September 20, 2012 (incorporated herein by reference from the Exhibits to the Form 8-K as filed on September 26, 2012)

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.

10.2 Berkshire Bank Supplemental Executive Retirement Agreement entered into with Nitin J.

Securities (incorporated herein by reference from Exhibit 4.3 to the Form 10-K as filed on February 28, 2020)

4.4 Subordinated Indenture, dated as of September 16, 2014, between Brookline Bancorp, Inc.

Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of Brookline Bancorp, Inc.’s Current Report on Form 8-K filed on September 17, 2014) (File No.

4.5 First Supplemental Indenture, dated as of September 16, 2014, between Brookline Bancorp, Inc.

Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 of Brookline Bancorp, Inc.’s Current Report on Form 8-K filed on September 17, 2014) (File No.

4.6 Second Supplemental Indenture, dated as of September 1, 2025, by and among U.S.

Bank Trust Company, National Association, as Trustee, Berkshire Hills Bancorp, Inc.

and Brookline Bancorp, Inc

10.3 Amended and Restated Three Year Change in Control Agreement by and among Berkshire Hills Bancorp, Inc., Berkshire Bank and Sean A.

Gray (incorporated herein by reference from the Exhibits to the Form 10-K as filed on March 16, 2011)

10.4 Supplemental Executive Retirement Agreement between Berkshire Bank and Sean A.

Gray (incorporated herein by reference from the Exhibits to the Form 8-K as filed on February 22, 2019)

10.5 Employment Agreement, dated December 16, 2024, by and among Berkshire Hills Bancorp, Inc., Berkshire Bank, Brookline Bank and Sean A.

10.6 Berkshire Bank Enhanced Change in Control Severance Plan (Brett J .

Brbovic, James C.

Brown, Gregory D.

Lindenmuth)(12 )*

10.7 Form of Split Dollar Agreement entered into with Sean A.

10.8 Berkshire Bank Executive Long-Term Care Insurance Plan (14 )*

Gray (incorporated herein by reference from the Exhibit to the Form 8-K as filed on January 19, 2011)

10.8 Berkshire Bank Executive Long-Term Care Insurance Plan (incorporated herein by reference from the Exhibits to the Form 8-K as filed on January 23, 2015)

10.9 Berkshire Hills Bancorp, Inc.

2018 Equity Incentive Plan (15 )*

10.10 Senior Executive Short Term Incentive Plan (16 )*

2018 Equity Incentive Plan (incorporated herein by reference from the Appendix to the Proxy Statement as filed on April 6, 2018)

10.11 Berkshire Hills Bancorp, Inc.

2022 Equity Incentive Plan (17 )*

2022 Equity Incentive Plan (incorporated herein by reference from the Appendix to the Proxy Statement as filed on April 8, 2022)

Exhibit Description

10.12 Form of Securities Purchase Agreement, dated December 16, 2024, by and among Berkshire Hills Bancorp, Inc., and the other parties identified therein.

(incorporated herein by reference from the Form 8-K as filed on December 16, 2024)

10.13 Form of Registration Rights Agreement, dated December 16, 2024, by and among Berkshire Hills Bancorp, Inc., and the other parties identified therein.

19.0 Berkshire Hills Bancorp, Inc.

Policy Regarding Insider Trading

21.0 Subsidiary Information

23.1 Consent of Crowe LLP

31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2 Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

97 Berkshire Hills Bancorp, Inc.

Clawback Polic y (18)

101 Interactive data files pursuant to Rule 405 of Regulation S-T:

(i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Income, (iii) the Consolidated Statements of Comprehensive Income/(Loss), (iv) the Consolidated Statements of Changes in Shareholders’ Equity, (v) the Consolidated Statements of Cash Flows, and (vi) the Notes to Consolidated Financial Statements tagged as blocks of text and in detail

(incorporated herein by reference from the Form 8-K as filed on December 16, 2024)

Incorporated herein by reference from the Exhibits to Form 10-Q as filed on August 9, 2018

Incorporated herein by reference from the Exhibits to the Form 8-K as filed on June 26, 2017.

Incorporated herein by reference from the Exhibits to Form S-1, Registration Statement and amendments thereto, initially filed on March 10, 2000, Registration No.

Incorporated herein by reference from the Exhibits to the Form 8-K as filed on September 26, 2012.

Incorporated herein by reference from Exhibit 4.3 to the Form 10-K as filed on February 28, 2020.

Incorporated herein by reference from the Exhibit to the Form 8-K as filed on March 22, 2024.

Incorporated herein by reference from the Exhibit to the Form 8-K as filed on April 2, 2021.

Incorporated herein by reference from the Exhibits to the Form 10-K as filed on March 16, 2011.

Incorporated herein by reference from the Exhibits to the Form 8-K as filed on February 22, 2019.

Incorporated herein by reference from the Exhibits to the Form 10-K as filed on March 17, 2014.

Incorporated herein by reference from the Exhibits to the Form 10-K as filed on February 28, 2020.

Incorporated herein by reference from the Exhibit to the Form 8-K as filed on January 19, 2011.

Incorporated herein by reference from the Exhibits to the Form 8-K as filed on January 23, 2015.

Incorporated herein by reference from the Appendix to the Proxy Statement as filed on April 6, 2018.

Incorporated herein by reference from the Exhibits to the Form 10-Q as filed on May 10, 2019.

Incorporated herein by reference from the Appendix to the Proxy Statement as filed on April 8, 2022.

Incorporated herein by reference from the Exhibits to the Form 10-K as filed on February 28, 2024.

* Denotes a management contract or compensatory plan or arrangement.

10.14 Retention Agreement, dated as of December 15, 2024, by and among Berkshire Hills Bancorp, Inc., Berkshire Bank and Jacqueline Courtwright (incorporated by reference from Exhibits of the Form 8-K filed on September 2, 2025)

10.15 Retention Agreement, dated as of December 15, 2024, by and among Berkshire Hills Bancorp, Inc., Berkshire Bank and Wm.

Gordon Prescott (incorporated by reference from Exhibits of the Form 8-K filed on September 2, 2025)

10.16 Beacon Financial Corporation 2025 Stock Option And Incentive Plan (incorporated by reference from Exhibits of the Form S-8 filed on September 10, 2025)

10.17 Form of Restricted Stock Award Agreement under the Beacon Financial Corporation 2025 Stock Option And Incentive Plan (incorporated by reference from Exhibits of the Form S-8 filed on September 10, 2025)

10.18 Form of Restricted Stock Unit Award Agreement under the Beacon Financial Corporation 2025 Stock Option And Incentive Plan (incorporated by reference from Exhibits of the Form S-8 filed on September 10, 2025)

10.19 Form of Incentive Stock Option Agreement under the Beacon Financial Corporation 2025 Stock Option And Incentive Plan (incorporated by reference from Exhibits of the Form S-8 filed on September 10, 2025)

10.2 Form of Non-Qualified Stock Option Agreement under the Beacon Financial Corporation 2025 Stock Option And Incentive Plan (incorporated by reference from Exhibits of the Form S-8 filed on September 10, 2025)

10.21 Employment Agreement, dated as of April 11, 2011, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A.

Perrault (incorporated by reference from Exhibits of the Form 10-Q filed on November 10, 2025)

10.22 Amendment to the Employment Agreement, dated July 25, 2018, by and among the Brookline Bancorp, Inc., Brookline Bank and Paul Perrault (incorporated by reference from Exhibits of the Form 10-Q filed on November 10, 2025)

10.23 Second Amendment to the Employment Agreement, dated March 10, 2021, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A.

Perrault (incorporated by reference from Exhibits of the Form 10-Q filed on November 10, 2025)

10.24 Third Amendment to the Employment Agreement, dated September 22, 2021, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A.

Perrault (incorporated by reference from Exhibits of the Form 10-Q filed on November 10, 2025)

10.25 Fourth Amendment to the Employment Agreement, dated April 28, 2023, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A.

Perrault (incorporated by reference from Exhibits of the Form 10-Q filed on November 10, 2025)

10.26 Employment Agreement, dated September 22, 2021, by and among Brookline Bancorp, Inc., Brookline Bank, Bank Rhode Island and Carl M.

Carlson (incorporated by reference from Exhibits of the Form 10-Q filed on November 10, 2025)

10.27 Retention Bonus Agreement, dated February 26, 2025, by and between Brookline Bancorp, Inc.

Carlson (incorporated by reference from Exhibits of the Form 10-Q filed on November 10, 2025)

10.28* Employment Agreement, dated September 22, 2021, by and among Brookline Bancorp, Inc., Brookline Bank, Bank Rhode Island and Michael W.

10.29* Retention Bonus Agreement, dated February 26, 2025, by and between Brookline Bancorp, Inc.

and Michael W.

10.3* Employment Agreement, dated February 26, 2025, by and among Berkshire Hills Bancorp, Inc., Brookline Bank, and Mark J.

19* Beacon Financial Corporation Policy Regarding Insider Trading

21* Subsidiary Information

23* Consent of Independent Registered Public Accounting Firm

31.1* Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2* Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1** Rule 13a-14(b) Certifications of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2** Rule 13a-14(b) Certifications of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Exhibit Description

97* Beacon Financial Corporation Clawback Policy

101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

101.SCH XBRL Taxonomy Extension Schema Document

101.CAL XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF XBRL Taxonomy Extension Definition Linkbase Document

101.LAB XBRL Taxonomy Extension Label Linkbase Document

101.PRE XBRL Taxonomy Extension Presentation Linkbase Document

104 Cover Page Interactive Data File (formatted in Inline XBRL and included in Exhibit 101)

_______________________________________________________________________________

* Filed herewith

** Furnished herewith

+ Management contract or compensatory plan or agreement

Not applicable.

Form 10-K Summary

Not applicable.

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.

March 3, 2025 By:

President & Chief Executive Officer

March 2, 2026 BEACON FINANCIAL CORPORATION

President and Chief Executive Officer

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

Mhatre Director, President, & Chief Executive Officer March 3, 2025

Mhatre (principal executive officer)

Brbovic Executive Vice President, Chief Financial Officer

President and Chief Executive Officer

(Principal Executive Officer)

Chief Financial and Strategy Officer

(Principal Financial Officer and

Principal Accounting Officer)

March 2, 2026 Date:

March 2, 2026

Brbovic (principal financial officer)

Brunelle Chairperson March 3, 2025

/s/ Mary Anne Callahan

Director March 3, 2025

Mary Anne Callahan

Charnley Director March 3, 2025

Desai Director March 3, 2025

/s/ WILLIAM H.

Hughes, III Director March 3, 2025

/s/ Jeffrey W.

Kip Director March 3, 2025

/s/ Sylvia Maxfield Director March 3, 2025

Lead Director

March 2, 2026 Date:

March 2, 2026

/s/ MARY ANNE CALLAHAN By:

/s/ SYLVIA MAXFIELD

Mary Anne Callahan,

Sylvia Maxfield,

/s/ Laurie Norton Moffatt Director March 3, 2025

Laurie Norton Moffatt

/s/ Karyn Polito Director March 3, 2025

Director March 3, 2025

CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

The management of the Company is responsible for establishing and maintaining adequate internal control over financial reporting.

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

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

Based on this assessment, management has determined that the Company’s internal control over financial reporting as of December 31, 2024 was effective.

The Company’s internal control over financial reporting includes policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on the financial statements.

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

This report expresses an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024.

Mhatre /s/ Brett J.

Mhatre Brett J.

President & Chief Executive Officer Executive Vice President & Chief Financial Officer

March 3, 2025 March 3, 2025

March 2, 2026 Date:

March 2, 2026

/s/ JOANNE CHANG By:

/s/ BOGDAN NOWAK

Joanne Chang,

Bogdan Nowak,

March 2, 2026 Date:

March 2, 2026

March 2, 2026 Date:

March 2, 2026

/s/ KARYN POLITO

Karyn Polito,

March 2, 2026 Date:

March 2, 2026

/s/ MARGARET BOLES FITZGERALD By:

Margaret Boles Fitzgerald,

March 2, 2026 Date:

March 2, 2026

/s/ WILLARD I.

/s/ MERRILL W.

March 2, 2026 Date:

March 2, 2026

/s/ THOMAS J.

March 2, 2026

MANAGEMENT'S REPORT ON INTERNAL CONTROL

OVER FINANCIAL REPORTING

The management of Beacon Financial Corporation is responsible for establishing and maintaining adequate internal control over financial reporting.

Beacon Financial Corporation's internal control system was designed to provide reasonable assurance to the Company's management and Board of Directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well-designed, have inherent limitations.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Beacon Financial Corporation's management assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2025.

In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework (2013).

Based on our assessment, we believe that, as of December 31, 2025, the Company's internal control over financial reporting is effective based on those criteria.

The merger of Brookline Bancorp, Inc.

and Berkshire Hills Bancorp, Inc.

was completed on September 1, 2025.

The Company acquired certain assets and assumed certain liabilities of Berkshire Hills Bancorp, Inc on September 1, 2025.

As permitted by the guidance issued by the Office of the Chief Accountant and the Division of Corporate Finance of the SEC, the scope of management’s assessment of the effectiveness of the Company’s internal controls over financial reporting as of December 31, 2025, excludes the internal control over financial reporting associated with total acquired assets of approximately $12.1 billion and total revenues associated with the acquired assets and liabilities assumed of approximately $152 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2025.

See Note 2, Business Combinations, to the consolidated financial statements for further information.

Beacon Financial Corporation's independent registered public accounting firm has issued an audit report on the effectiveness of the Company's internal control over financial reporting.

This report appears on page F-2.

PERRAULT /s/ CARL M.

Perrault Carl M.

President and Chief Executive Officer

(Principal Executive Officer) Chief Financial and Strategy Officer

(Principal Financial Officer and

Principal Accounting Officer)

Report of Independent Registered Public Accounting Firm

Shareholders and the Board of Directors

of Berkshire Hills Bancorp, Inc.

Boston, Massachusetts

Opinions on the Financial Statements and Internal Control over Financial Reporting

We have audited the accompanying consolidated balance sheets of Berkshire Hills Bancorp, Inc.

(the "Company") as of December 31, 2024 and 2023, the related consolidated statements of income, comprehensive income/loss, shareholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2024, and the related notes (collectively referred to as the "financial statements").

We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2024 in conformity with accounting principles generally accepted in the United States of America.

Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control – Integrated Framework:

(2013) issued by COSO.

Basis for Opinions

The Company’s management is responsible for these financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control over Financial Reporting.

Our responsibility is to express an opinion on the Company’s financial statements and an opinion on the Company’s internal control over financial reporting based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S.

To the Stockholders and Board of Directors

Beacon Financial Corporation:

Opinion on Internal Control Over Financial Reporting

We have audited Beacon Financial Corporation and subsidiaries' (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements), and our report dated March 2, 2026 expressed an unqualified opinion on those consolidated financial statements.

The Company acquired Berkshire Hills Bancorp, Inc.

during 2025, and management excluded from its assessment of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2025, Berkshire Hills Bancorp, Inc.’s internal control over financial reporting associated with total assets of $12.1 billion and total revenues of $152 million included in the consolidated financial statements of the Company as of and for the year ended December 31, 2025.

Our audit of internal control over financial reporting of the Company also excluded an evaluation of the internal control over financial reporting of Berkshire Hills Bancorp, Inc.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our 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.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.

Our 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.

Our audit also included performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

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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.

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.

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

Boston, Massachusetts

March 2, 2026

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

Beacon Financial Corporation:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Beacon Financial Corporation and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of income, comprehensive income, changes in stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes (collectively, the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated March 2, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Fair value measurement of loans and the core deposit intangible asset acquired in the business combination

As discussed in Note 2 to the consolidated financial statements, on September 1, 2025, the Company completed the merger of equals between Brookline Bancorp, Inc.

and Berkshire Hills Bancorp.

The transaction was treated as a business combination and was accounted for as a reverse merger.

Accordingly, the purchase price was allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the merger date.

As part of the merger, the Company acquired loans with a fair value of $9.1 billion and a core deposit intangible (CDI) asset with a fair value of $174.4 million.

The fair value of the loan portfolio was estimated using a discounted cash flow methodology, with assumptions applied based on pools of loans with similar characteristics.

The valuation was based on the remaining maturity and repricing characteristics of the loans and considered assumptions related to prepayment rates, expected credit losses, and the discount rate.

Expected credit losses were estimated using probability of default (PD) and loss given default (LGD) assumptions.

Projected cash flows were discounted to present value using market based risk adjusted rates reflective of interest rate, servicing, credit, liquidity risk, and required equity return for similar loans.

The fair value of the CDI asset was estimated using a discounted cash flow methodology, with assumptions applied based on groupings of core deposits with similar characteristics.

The valuation considered expected customer attrition, net maintenance costs, interest costs on deposits, and the alternative cost of funds to estimate net cost savings

over the economic life of the deposit relationship discounted to present value, and aggregated to determine the fair value of the CDI asset.

We identified the evaluation of the fair value measurements of the acquired loans and CDI asset as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment of the fair value measurements due to significant measurement uncertainty.

Specifically, the assessment of the fair value measurements involved an evaluation of the (1) fair value measurement methodologies, and (2) acquired loan fair value measurement key assumptions, including discount rate, PD and LGD;

and (3) CDI asset fair value measurement key assumptions, including the discount rate and expected customer attrition.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s fair value measurements of acquired loans and the CDI asset including controls over the (1) development of the overall fair value methodologies, and (2) determination of the key assumptions including the discount rate, PD and LGD for the acquired loans, and (3) determination of the key assumptions including the discount rate and expected customer attrition for the CDI asset.

We evaluated the Company’s process to develop the fair values of the acquired loans and the CDI asset by testing certain sources of data and assumptions that the Company used and considered the relevance and reliability of such data and assumptions.

We involved valuation professionals with specialized skills and knowledge, who assisted in:

• evaluating the appropriateness of the valuation methodologies used by management to estimate the fair value of certain acquired loans and the CDI asset for compliance with U.S.

generally accepted accounting principles.

• evaluating the discount rate used to discount projected loan cash flows by comparing the inputs and risk adjustments used to derive risk adjusted market rates to relevant external market information and assessing whether the assumption was applied consistently within the valuation model.

• evaluating the PD and LGD used to adjust projected loan cash flows by comparing management’s assumptions to relevant external market information and assessing whether the assumptions were consistent with market participant expectations and applied consistently across loan pools.

• evaluating the CDI asset discount rate by independently assessing key market based inputs used in developing the cost of equity and comparing management’s selected discount rate to an independently developed expectation range for the cost of equity.

• evaluating the expected customer attrition used in the CDI asset valuation by comparing management’s attrition assumptions to relevant industry and market information and assessing whether the assumption was applied consistently in the valuation model.

Assessment of the collective allowance for credit losses

As discussed in Notes 1 and 7 to the consolidated financial statements, the Company’s total allowance for credit losses as of December 31, 2025 was $252.8 million, of which a portion related to the allowance for credit losses for the Company’s core commercial real estate (CRE) and commercial (C&I) loans and leases and for the Legacy Berkshire loans and leases evaluated on a collective basis (the collective ACL).

The collective ACL is determined using multiple quantitative models developed by third party vendors.

For the Company’s core loan portfolios, expected credit losses are estimated using lifetime loss rate models (core CRE and C&I models), which calculate the expected losses over the life of the loan based on the exposure at default, loan attributes, prepayment assumptions, and reasonable and supportable economic forecasts.

The core CRE and C&I models segment the portfolios by loan level attributes, such as loan type, loan size, date of origination, delinquency status, and risk ratings to create loan pools with similar risk characteristics in estimating expected losses.

In addition, for loan portfolios acquired in connection with the merger, the Company estimates expected credit losses using a historical loss rate model based on the historical performance of various loan segments, which are segmented primarily by FDIC code, estimates of each segment’s weighted average life, and a statistical model to capture the impact of future economic conditions on the base loss rates (Legacy Berkshire model).

The core CRE and C&I models and Legacy Berkshire model incorporate reasonable and supportable forecasts of various macro-economic variables using multiple probability weighted economic forecast scenarios.

For the core CRE and C&I models, reasonable and supportable economic forecasts and reversion to long-term economic conditions are embedded within the vendor provided economic forecast scenarios applied over the remaining life of the loans.

Reversion towards long-term expectations generally begins two to three years from the forecast start date and largely completes within the first five years.

For the Legacy Berkshire model, the Company applies an explicit reasonable and supportable forecast period of seven quarters, after which economic assumptions revert, using a straight-line reversion method over four quarters, to long term historical averages.

The Company further calibrates expected losses for each of the core CRE and C&I models using a scalar, which is determined by examining the loss rates of peer banks that have similar operations and asset

bases to the Company and comparing these peer group loss rates to the model results.

In addition, adjustments are made to the quantitative model outputs for relevant qualitative factors designed to address model limitations.

We identified the assessment of the collective ACL as a critical audit matter.

A high degree of audit effort, including specialized skills and knowledge, and subjective and complex auditor judgment was involved in the assessment due to measurement uncertainty.

Specifically, the assessment encompassed the evaluation of the collective ACL methodology , including the methods and models used to estimate (1) the loss rates and their significant assumptions, including the weighting of the economic forecast scenarios, (2) the scalar applied to the core CRE and C&I models, and (3) certain qualitative factors, including the significant assumptions used in the measurement of the qualitative factors.

The assessment also included an evaluation of the conceptual soundness and performance of the core CRE and C&I models and conceptual soundness of the Legacy Berkshire model.

In addition, auditor judgment was required to evaluate the sufficiency of audit evidence obtained.

The following are the primary procedures we performed to address this critical audit matter.

We evaluated the design and tested the operating effectiveness of certain internal controls related to the Company’s measurement of the collective ACL estimate, including over the:

• evaluation of the collective ACL methodology

• continued use and conceptual soundness of the core CRE and C&I models and Legacy Berkshire model

• identification and determination of the significant assumptions used in the core CRE and C&I models and Legacy Berkshire model

• performance monitoring of the core CRE and C&I models

• evaluation of the qualitative factors, including the significant assumptions used in the measurement of the qualitative factors for the core CRE and C&I models and Legacy Berkshire model

• analysis of the collective ACL results and trends.

We evaluated the Company’s process to develop the collective ACL estimate by testing certain sources of data and assumptions that the Company used and considered the relevance and reliability of such data and assumptions.

In addition, we involved credit risk professionals with specialized skills and knowledge, who assisted in:

• evaluating the Company’s collective ACL methodology for compliance with U.S.

generally accepted accounting principles

• evaluating judgments made by the Company relative to the performance testing of the core CRE and C&I models by comparing them to relevant Company-specific metrics and trends and the applicable industry and regulatory practices

• assessing the conceptual soundness of the core CRE and C&I models and Legacy Berkshire model by inspecting the model documentation to determine whether the models are suitable for their intended use

• evaluating the methodology utilized to incorporate reasonable and supportable economic forecast scenarios and related weightings used for each macro-economic variable by comparing it to the Company’s business environment and relevant industry practices

• assessing the scalar used to calibrate the core CRE and C&I models by evaluating the appropriateness of the peer group based on similar operations and asset bases to the Company and comparing to specific portfolio risk characteristics

• evaluating the methodology used to develop certain qualitative factors and their significant assumptions and the effect of those factors on the collective ACL compared with relevant credit risk factors and consistency with credit trends and identified limitations of the core CRE and C&I models and Legacy Berkshire model.

We also assessed the sufficiency of the audit evidence obtained related to the collective ACL estimate by evaluating the cumulative results of the audit procedures, qualitative aspects of the Company’s accounting practices, and potential bias in the accounting estimate.

We have served as the Company’s auditor since 2003.

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March 2, 2026

BERKSHIRE HILLS BANCORP, INC.

BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

At December 31,

(In Thousands Except Share Data)

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Total cash and cash equivalents 2,041,745 543,670

Trading security, at fair value 5,258 6,142

Equity securities, at fair value 655 13,029

Securities available for sale, at fair value 655,723 1,022,285

Securities held to maturity (fair values of $ 433,382 in 2024 and $ 476,228 in 2023)

Investment securities available-for-sale 1,688,768 895,034

Total investment securities 1,688,768 895,034

Allowance for investment security losses ( 94 ) ( 82 )

Net investment securities 1,688,674 894,952

Loans and leases:

Commercial real estate loans 10,012,094 5,716,114

Commercial loans and leases 3,947,363 2,506,664

Consumer loans 4,070,095 1,556,510

Total loans and leases 18,029,552 9,779,288

Allowance for loan and lease losses ( 252,839 ) ( 125,083 )

Net loans and leases 17,776,713 9,654,205

Restricted equity securities 87,438 83,155

Premises and equipment, net of accumulated depreciation of $ 112,926 and $ 103,466 , respectively

162,474 86,781

Federal Home Loan Bank stock and other restricted securities 19,565 22,689

Total securities 1,188,859 1,607,496

Allowance for credit losses on securities held to maturity ( 64 ) ( 68 )

Net Securities 1,188,795 1,607,428

Loans held for sale 3,076 2,237

Total loans 9,384,994 9,039,686

Allowance for credit losses on loans ( 114,700 ) ( 105,357 )

Net loans 9,270,294 8,934,329

Premises and equipment, net 56,609 68,915

Other intangible assets 15,064 19,664

Cash surrender value of bank-owned life insurance 245,789 242,309

Right-of-use asset operating leases 82,817 43,527

Deferred tax asset 149,487 56,620

Goodwill 351,613 241,222

Identified intangible assets, net of accumulated amortization of $ 29,118 and $ 16,526 , respectively

189,562 17,461

OREO and repossessed assets, net 2,591 1,103

Cash surrender value of bank-owned life insurance policies 334,442 84,448

Other assets 352,816 198,182

Assets held for sale 6,930 10,938

Total assets $ 23,220,372 $ 11,905,326

Demand deposits $ 2,324,879 $ 2,469,164

NOW and other deposits 841,406 858,644

Money market deposits 3,610,521 3,565,516

Savings deposits 1,021,716 1,053,810

Time deposits 2,576,682 2,686,250

LIABILITIES AND STOCKHOLDERS' EQUITY

Non-interest-bearing deposits:

Demand checking accounts $ 4,032,529 $ 1,692,394

Interest-bearing deposits:

NOW accounts 1,445,894 617,246

Savings accounts 2,954,029 1,721,247

Money market accounts 6,515,306 2,116,360

Certificate of deposit accounts 4,156,540 1,885,444

Brokered deposit accounts 410,359 868,953

Total interest-bearing deposits 15,482,128 7,209,250

Total deposits 19,514,657 8,901,644

Short-term debt 103,500 260,000

Long-term Federal Home Loan Bank advances 212,982 125,223

Subordinated notes 121,612 121,363

Total borrowings 438,094 506,586

Other liabilities 292,686 278,630

Borrowed funds:

Advances from the FHLB 555,788 1,355,926

Subordinated debentures and notes 198,572 84,328

Other borrowed funds 34,000 79,592

Total borrowed funds 788,360 1,519,846

Operating lease liabilities 90,713 44,785

Mortgagors' escrow accounts 15,508 15,875

Reserve for unfunded credits 13,746 5,981

Accrued expenses and other liabilities 301,327 195,256

Total liabilities 20,724,311 10,683,387

(In thousands, except share data) 2024 2023

Shareholders’ equity

Commitments and contingencies (Note 13)

Stockholders' Equity:

Common stock, $ 0.01 par value;

100,000,000 shares authorized and 51,903,190 shares issued and 46,424,016 shares outstanding in 2024;

200,000,000 shares authorized;

51,903,190 shares issued, and 43,500,872 shares outstanding in 2023)

Additional paid-in capital - common stock 1,430,532 1,423,273

Unearned compensation ( 10,106 ) ( 10,109 )

Retained (deficit) ( 3,080 ) ( 33,136 )

Accumulated other comprehensive (loss) ( 106,343 ) ( 143,016 )

Treasury stock, at cost ( 5,479,174 shares in 2024 and 8,402,318 shares in 2023)

89,576,403 shares issued and 96,998,075 shares issued, respectively

Additional paid-in capital 2,171,885 902,584

Retained earnings 485,862 458,943

Accumulated other comprehensive (loss) income ( 20,002 ) ( 52,882 )

Treasury stock, at cost;

5,545,511 shares and 7,019,384 shares, respectively

( 142,580 ) ( 87,676 )

Total shareholders’ equity 1,167,424 1,012,221

Total liabilities and shareholders’ equity $ 12,273,408 $ 12,430,821

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

BERKSHIRE HILLS BANCORP, INC.

Total stockholders' equity 2,496,061 1,221,939

Total liabilities and stockholders' equity $ 23,220,372 $ 11,905,326

See accompanying notes to consolidated financial statements.

BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Income

Years Ended December 31,

(In thousands) 2024 2023 2022

Year Ended December 31,

2025 2024 2023

(In Thousands Except Share Data)

Interest and dividend income:

Loans $ 556,527 $ 512,535 $ 335,312

Securities and other 57,411 63,764 51,945

Loans and leases $ 767,554 $ 587,929 $ 533,739

Debt securities 40,775 26,252 29,648

Restricted equity securities 4,891 5,786 5,571

Short-term investments 19,568 8,554 8,329

Total interest and dividend income 832,788 628,521 577,287

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Deposits 280,500 232,963 175,665

Borrowings and subordinated notes 34,337 48,339 9,223

Borrowed funds 49,182 65,973 61,911

Total interest expense 329,682 298,936 237,576

Net interest income 503,106 329,585 339,711

Provision for credit losses on loans and unfunded commitments 41,380 22,003 37,868

Provision (recovery) for credit losses on investments 12 ( 359 ) 339

Net interest income after provision for credit losses 461,714 307,941 301,504

Non-interest income:

Deposit related fees 33,759 34,155 32,026

Loan related fees 11,280 10,595 9,467

Gain on SBA loan sales 12,648 10,334 12,494

Deposit fees 19,681 10,548 11,611

Loan fees 4,058 2,394 2,036

Loan level derivative income, net 1,422 1,658 3,890

Gain on sales of investment securities, net — — 1,704

Gain on sales of loans and leases 5,617 951 2,581

Wealth management fees 9,748 5,990 4,624

Total fee income 68,527 65,281 63,995

Other 9,367 4,074 5,488

Fair value adjustments on securities 7 513 ( 2,037 )

(Loss)/gain on sale of securities ( 49,937 ) ( 25,057 ) 6

Gain on sale of business operations and assets, net 16,241 — —

Total non-interest income 49,893 25,615 31,934

Total net revenue 400,000 411,829 413,534

Provision expense for credit losses 23,999 31,999 11,000

Non-interest expense:

Compensation and benefits 160,453 159,281 152,741

Occupancy and equipment 31,469 35,718 37,638

Technology 40,395 41,878 35,586

Compensation and employee benefits 191,203 143,723 138,895

Occupancy 29,868 22,056 20,203

Equipment and data processing 44,717 27,374 27,004

Professional services 8,089 7,133 7,226

Regulatory expenses 7,395 7,019 3,105

Amortization of intangible assets 4,601 4,820 5,134

Marketing 4,522 5,377 5,103

Merger, restructuring and other non-operating expenses 9,493 6,261 8,909

FDIC insurance 7,812 8,044 7,844

Advertising and marketing 5,979 5,240 4,724

Amortization of identified intangible assets 15,225 6,746 7,840

Merger and restructuring expense 61,697 4,201 7,411

Other 25,155 17,348 18,377

Total non-interest expense 389,745 241,865 239,524

Income before income taxes 79,515 78,322 113,818

Income tax expense 18,512 8,724 21,285

Income before provision for income taxes 121,862 91,691 93,914

Provision for income taxes 31,591 22,976 18,915

Net income 90,271 68,715 74,999

Basic earnings per share $ 1.44 $ 1.61 $ 2.03

Diluted earnings per share $ 1.43 $ 1.60 $ 2.02

Weighted average common shares outstanding:

Earnings per common share:

Basic $ 1.03 $ 0.77 $ 0.85

Diluted 1.03 0.77 0.85

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

Table of Cont e n ts

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME/(LOSS)

Years Ended December 31,

Weighted average common shares outstanding during the year:

Basic 87,377,933 88,983,248 88,230,681

Diluted 87,701,567 89,302,304 88,450,646

Dividends declared per common share $ 0.728 $ 0.540 $ 0.540

See accompanying notes to consolidated financial statements.

BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

Year Ended December 31,

2025 2024 2023

(In Thousands)

Net income $ 90,271 $ 68,715 $ 74,999

Other comprehensive income/(loss), before tax:

Changes in unrealized gains and losses on securities available-for-sale 46,800 47,960 ( 235,081 )

Changes in unrealized gains and losses on cash flow hedges 1,228 2,402 ( 6,667 )

Changes in unrealized gains and losses on pension 893 316 1,674

Total other comprehensive income/(loss), before tax 48,921 50,678 ( 240,074 )

Income taxes related to other comprehensive income/(loss):

Changes in unrealized gains and losses on securities available-for-sale ( 11,685 ) ( 11,928 ) 60,922

Changes in unrealized gains and losses on cash flow hedges ( 321 ) ( 630 ) 1,789

Changes in unrealized gains and losses on pension ( 242 ) ( 84 ) ( 446 )

Total income tax (expense)/benefit related to other comprehensive income/(loss) ( 12,248 ) ( 12,642 ) 62,265

Total other comprehensive income/(loss) 36,673 38,036 ( 177,809 )

Total comprehensive income/(loss) $ 97,676 $ 107,634 $ ( 85,276 )

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

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Common Stock Additional paid-in Unearned Retained

(deficit) Accumulated other comprehensive Treasury

(In thousands, except per share data) Shares Amount capital compensation earnings (loss) income stock Total

Balance at January 1, 2022 48,667 $ 528 $ 1,423,445 $ ( 9,056 ) $ ( 139,383 ) $ ( 3,243 ) $ ( 89,856 ) $ 1,182,435

Investment securities available-for-sale:

Unrealized securities holding gains (losses) 41,905 ( 1,704 ) 9,560

Income tax (expense) benefit ( 8,780 ) 532 ( 1,913 )

Net unrealized securities holding gains (losses) before reclassification adjustments, net of taxes 33,125 ( 1,172 ) 7,647

Cash flow hedges:

Change in fair value of cash flow hedges 189 ( 3,620 ) ( 2,829 )

Income tax (expense) benefit ( 209 ) 876 803

Net change in fair value of cash flow hedges, net of taxes ( 20 ) ( 2,744 ) ( 2,026 )

Less reclassification adjustment for change in fair value of cash flow hedges:

Gain (loss) on change in fair value of cash flow hedges ( 1,875 ) ( 4,036 ) ( 3,632 )

Income tax (expense) benefit 480 1,034 945

Net reclassification adjustment for change in fair value of cash flow hedges ( 1,395 ) ( 3,002 ) ( 2,687 )

Net change in fair value of cash flow hedges 1,375 $ 258 661

Postretirement benefits:

Adjustment of accumulated obligation for postretirement benefits ( 2,119 ) 1,127 1,135

Income tax (expense) benefit 499 ( 297 ) ( 294 )

Net adjustment of accumulated obligation for postretirement benefits ( 1,620 ) 830 841

Other comprehensive gain (loss), net of taxes 32,880 ( 84 ) 9,149

Comprehensive income 123,151 68,631 84,148

See accompanying notes to consolidated financial statements.

BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity

Year Ended December 31, 2025, 2024 and 2023

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

Stock Total Stockholders'

(In Thousands)

Balance at December 31, 2024 $ 970 $ 902,584 $ 458,943 $ ( 52,882 ) $ ( 87,676 ) $ 1,221,939

Net income — — 90,271 — — 90,271

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)

Impact of Merger between Brookline and Berkshire ( 74 ) 1,268,308 82 — ( 53,320 ) 1,214,996

Other comprehensive income (loss) — — — 32,880 — 32,880

Common stock dividends of $ 0.728 per share

— — ( 63,119 ) — — ( 63,119 )

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 )

Restricted stock awards, net of awards surrendered — ( 5,226 ) — — ( 1,837 ) ( 7,063 )

Options exercised — — ( 15 ) — 253 238

Compensation under recognition and retention plans — 6,219 ( 300 ) — — 5,919

Balance at December 31, 2025 $ 896 $ 2,171,885 $ 485,862 $ ( 20,002 ) $ ( 142,580 ) $ 2,496,061

Comprehensive (loss):

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

Stock Total Stockholders'

(In Thousands)

Balance at December 31, 2023 $ 970 $ 902,659 $ 438,722 $ ( 52,798 ) $ ( 90,909 ) $ 1,198,644

Net income — — 68,715 — — 68,715

Other net comprehensive income — — — — — 38,036 — 38,036

Total comprehensive income — — — — 69,598 38,036 — 107,634

Impact of ASU No.

2022-02 Adoption — — — — 401 — — 401

Cash dividends declared on common shares ($ 0.72 per share)

Other comprehensive income (loss) — — — ( 84 ) — ( 84 )

Common stock dividends of $ 0.540 per share

— — ( 48,058 ) — — ( 48,058 )

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 )

Restricted stock awards, net of awards surrendered — ( 3,891 ) — — 3,233 ( 658 )

Compensation under recognition and retention plans — 3,816 ( 436 ) — — 3,380

Balance at December 31, 2024 $ 970 $ 902,584 $ 458,943 $ ( 52,882 ) $ ( 87,676 ) $ 1,221,939

Comprehensive income:

Stock Additional

Capital Retained

Earnings Accumulated

Comprehensive

Income (Loss) Treasury

Stock Total Stockholders'

(In Thousands)

Balance at December 31, 2022 $ 852 $ 736,074 $ 412,019 $ ( 61,947 ) $ ( 94,873 ) $ 992,125

Net income — — 74,999 — — 74,999

Other net comprehensive income — — — — — 36,673 — 36,673

Total comprehensive income — — — — 61,003 36,673 — 97,676

Stock Issuance 3,448 34 9,276 — — — 90,690 100,000

Cash dividends declared common shares ($ 0.72 per share)

PCSB acquisition 118 167,212 — — — 167,330

Other comprehensive income (loss) — — — 9,149 — 9,149

Common stock dividends of $ 0.540 per share

— — ( 47,926 ) — — ( 47,926 )

Treasury stock purchased ( 794 ) — — — — — ( 17,536 ) ( 17,536 )

Forfeited shares ( 130 ) — ( 366 ) 3,313 — — ( 2,947 ) —

Exercise of stock options 5 — — — ( 7 ) — 126 119

Restricted stock grants 500 — ( 1,645 ) ( 11,628 ) — — 13,273 —

Stock-based compensation — — — 8,318 — — — 8,318

Other, net ( 106 ) — ( 6 ) — — — ( 2,428 ) ( 2,434 )

Restricted stock awards, net of awards surrendered — ( 4,720 ) — — 3,964 ( 756 )

Compensation under recognition and retention plans — 4,093 ( 370 ) — — 3,723

Balance at December 31, 2023 $ 970 $ 902,659 $ 438,722 $ ( 52,798 ) $ ( 90,909 ) $ 1,198,644

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

BERKSHIRE HILLS BANCORP, INC.

See accompanying notes to consolidated financial statements.

BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

Years Ended December 31,

Year Ended December 31,

2025 2024 2023

(In Thousands)

1 unchanged sentence

Net income $ 90,271 $ 68,715 $ 74,999

Adjustments to reconcile net income to net cash provided by operating activities:

Provision expense for credit losses 23,999 31,999 11,000

Net amortization of securities ( 62 ) 1,451 2,886

Change in unamortized net loan origination costs and premiums 5,542 764 3,312

Premises and equipment depreciation and amortization expense 6,984 8,445 9,576

Stock-based compensation expense 8,318 7,498 7,338

Accretion of purchase accounting entries, net ( 1,287 ) ( 716 ) ( 1,637 )

Amortization of other intangibles 4,601 4,820 5,134

Income from cash surrender value of bank-owned life insurance policies ( 6,152 ) ( 5,392 ) ( 5,540 )

Securities losses, net 49,930 24,544 2,031

(Gain) on SBA loan sales ( 12,648 ) ( 10,334 ) ( 12,494 )

Net change in loans held-for-sale 805 2,074 5,168

Amortization of interest in tax-advantaged projects ( 2,508 ) 8,018 3,508

Gain on sale of business operations and other assets ( 16,241 ) — —

Net change in other 2,922 14,387 ( 12,076 )

Net cash provided by operating activities $ 125,206 $ 157,156 $ 110,739

Adjustments to reconcile net income to net cash provided from operating activities:

Provision for credit losses 41,392 21,644 38,207

Proceeds from sales of loans and leases held-for-sale, net 83,330 — —

Deferred income tax expense 22,348 409 16,167

Depreciation of premises and equipment 9,553 7,890 8,159

Accretion of investment securities deferred, net ( 9,953 ) ( 5,657 ) ( 8,658 )

Accretion of premiums and discounts and deferred loan and lease origination costs, net ( 20,885 ) ( 6,682 ) ( 4,708 )

Amortization of identified intangible assets 15,225 6,746 7,840

Amortization of debt issuance costs 100 100 100

Amortization (accretion) of other acquisition fair value adjustments, net ( 1,749 ) 1,313 ( 1,611 )

Gain on sales of investment securities, net — — ( 1,704 )

Gain on sales of loans and leases ( 5,617 ) ( 951 ) ( 2,581 )

Loss on sales of OREO and other repossessed assets 153 — 4

Write-down of OREO and other repossessed assets 412 574 181

Compensation under recognition and retention plans 5,919 3,380 3,723

Net change in:

Cash surrender value of bank-owned life insurance ( 3,015 ) ( 2,017 ) ( 1,269 )

Impairment of BankRI trade name 1,089 — —

Other assets 85,243 6,590 13,758

Accrued expenses and other liabilities ( 89,372 ) 2,900 ( 26,010 )

Net cash provided from operating activities 224,444 104,954 116,597

Cash flows from investing activities:

Net decrease in trading security 905 860 818

Proceeds from sales of equity securities 12,863 — —

Purchases of securities available for sale ( 86,546 ) ( 44,586 ) ( 478,940 )

Proceeds from sales of securities available for sale 361,871 267,199 149,994

Proceeds from maturities, calls, and prepayments of securities available for sale 88,192 201,624 548,423

Purchases of securities held to maturity ( 600 ) ( 700 ) ( 807 )

Proceeds from maturities, calls, and prepayments of securities held to maturity 36,611 39,193 51,961

Net change in loans ( 493,724 ) ( 716,591 ) ( 1,546,518 )

Net change in New York branch loans held for sale 1,146 — —

Proceeds from surrender of bank-owned life insurance 2,672 2,002 2,311

Purchase of Federal Home Loan Bank stock ( 164,145 ) ( 494,159 ) ( 124,331 )

Proceeds from sales of Federal Home Loan Bank stock 167,269 478,689 127,912

Net investment in limited partnership tax credits ( 13,717 ) ( 16,172 ) ( 14,537 )

Proceeds from sales of investment securities available-for-sale 176,312 — 229,981

Proceeds from maturities, calls, and principal repayments of investment securities available-for-sale 189,964 173,996 272,419

Purchases of investment securities available-for-sale ( 33,126 ) ( 148,476 ) ( 362,905 )

Proceeds from redemption/sales of restricted equity securities 83,643 32,834 48,489

Purchase of restricted equity securities ( 60,488 ) ( 38,394 ) ( 50,775 )

Proceeds from sales of loans and leases held-for-investment, net 300,822 109,742 244,133

Net decrease (increase) in loans and leases 570,003 ( 265,919 ) ( 955,593 )

Net cash and cash equivalents acquired in acquisition 1,084,095 — ( 80,209 )

Purchase of premises and equipment, net ( 12,288 ) ( 4,985 ) ( 12,357 )

Proceeds from sales of seasoned loan portfolios 89,233 — 24,323

Cash outflows from sale of business operations and other assets ( 314,712 ) — —

Net cash (used) by investing activities $ ( 317,250 ) $ ( 284,461 ) $ ( 1,260,886 )

BERKSHIRE HILLS BANCORP, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONCLUDED)

Years Ended December 31,

Proceeds from sales of OREO and other repossessed assets 1,473 1,599 1,552

Net cash provided from (used for) investing activities 2,300,410 ( 139,603 ) ( 665,265 )

See accompanying notes to consolidated financial statements.

Year Ended December 31,

2025 2024 2023

(In Thousands)

Cash flows from financing activities:

Net increase in deposits $ 160,143 $ 306,115 $ 258,316

Net change in NY branch deposits held for sale ( 34,896 ) — —

Proceeds from Federal Home Loan Bank advances and other borrowings 1,208,500 10,450,979 51,275

Repayments of Federal Home Loan Bank advances and other borrowings ( 1,277,241 ) ( 10,070,200 ) ( 60,196 )

Issuance of common stock 100,000 — —

Proceeds from issuance of subordinated debt — — 98,032

Repayment from calling of subordinated debt — — ( 75,000 )

Purchase of treasury stock ( 17,536 ) ( 23,844 ) ( 124,519 )

Exercise of stock options 119 — 270

Common and preferred stock cash dividends paid ( 30,940 ) ( 31,707 ) ( 24,527 )

Settlement of derivative contracts with financial institution counterparties 9,060 13,851 84,044

Net cash provided by financing activities

$ 117,209 $ 645,194 $ 207,695

Net change in cash and cash equivalents ( 74,835 ) 517,889 ( 942,452 )

Increase (decrease) in demand checking, NOW, savings and money market accounts 1,061,533 5,424 ( 402,552 )

(Decrease) increase in certificates of deposit and brokered certificates of deposit ( 733,392 ) 347,057 859,866

Proceeds from FHLB advances 1,057,750 1,643,100 6,155,000

Repayment of FHLB advances ( 2,300,715 ) ( 1,510,516 ) ( 6,222,735 )

(Decrease) increase in other borrowed funds, net ( 46,469 ) 10,336 ( 41,529 )

Decrease in mortgagors' escrow accounts, net ( 367 ) ( 1,364 ) ( 678 )

Payment of dividends on common stock ( 63,119 ) ( 48,058 ) ( 47,926 )

Payment of income taxes for shares withheld in share based activity ( 2,000 ) ( 687 ) ( 710 )

Net cash (used for) provided from financing activities ( 1,026,779 ) 445,292 298,736

Net increase (decrease) in cash and cash equivalents 1,498,075 410,643 ( 249,932 )

Cash and cash equivalents at beginning of year 543,670 133,027 382,959

Cash and cash equivalents at end of year $ 2,041,745 $ 543,670 $ 133,027

Supplemental cash flow information:

Interest paid on deposits $ 232,314 $ 148,313 $ 32,782

Interest paid on borrowed funds 34,798 46,584 9,043

Income taxes (refunded)/paid, net

( 1,425 ) 12,307 28,439

Other non-cash changes:

Other net comprehensive income/(loss)

$ 36,673 $ 38,036 $ ( 177,809 )

Seasoned loan portfolios reclassified to held-for-sale, net 91,754 — 3,369

Held-for-sale loans reclassified to held-for-investment, net 878 — 606

Reclassification of New York branch loans from portfolio loans to assets held-for-sale, net 58,455 — —

Reclassification of New York branch assets to assets held-for-sale 13,936 — —

Reclassification of New York branch deposits to liabilities held-for-sale, net

Reclassification of New York branch liabilities to liabilities held-for-sale 12,929 — —

Reclassification of New York branch loans held-for-sale to held-for investment, net 7,183 — —

Reclassification of liabilities held-for-sale to deposits, net 66,207 — —

Premises and equipment reclassified to held-for-sale — 8,714 1,380

Impact to retained earnings from adoption of ASU 2022-02 — 401 —

Premium payable on cash flow hedges — — 2,296

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

Supplemental disclosure of cash flow information:

Cash paid during the year for:

Interest on deposits, borrowed funds and subordinated debt $ 328,862 $ 291,428 $ 238,396

Income taxes 14,968 13,085 8,632

Non-cash investing activities:

Transfer from loans and leases to loan and leases held-for-sale $ ( 79,859 ) $ — $ —

Transfer from loans to OREO and other repossessed assets 1,142 1,582 3,023

Acquisitions of Berkshire Hills Bancorp, Inc.

in 2025 and PCSB Financial Corporation in 2023:

Fair value of assets acquired, net of cash and cash equivalents acquired $ 11,170,597 $ — $ 1,931,528

Fair value of liabilities assumed 11,044,057 — 1,676,110

Common stock issued — — 118

See accompanying notes to consolidated financial statements.

BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

Years Ended December 31, 2024, 2023, and 2022

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.

(1) Basis of Presentation

The Company is a bank holding company (within the meaning of the Bank Holding Company Act of 1956, as amended) and the parent of Beacon Bank & Trust, a Massachusetts-chartered trust company.

The Bank is a member of the Federal Reserve System.

The Company's primary business is to provide commercial, business and retail banking services to its corporate, municipal and retail customers through the Bank and its non-bank subsidiaries.

The Company is also the parent of Clarendon Private.

Clarendon Private is a registered investment advisor with the SEC.

Through Clarendon Private and the Trust and Investments Division of the Bank, the Company offers a wide range of wealth management services to individuals, families, endowments and foundations to help these clients meet their long-term financial goals.

Beacon Bank & Trust operates 147 full-service banking offices in New England and New York with three additional lending offices.

The Bank's activities include acceptance of commercial, municipal and retail deposits, origination of mortgage loans on commercial and residential real estate located principally in New England and New York, origination of commercial loans and leases, investment in debt and equity securities, and the offering of cash management and wealth, trust and investment advisory services.

The Company also provides specialty equipment financing through its subsidiary Eastern Funding and provides small business lending through its subsidiary 44 Business Capital, both of which operate as national business lines.

The Company and the Bank are supervised, examined and regulated by the FRB.

As a Massachusetts-chartered trust company, the Bank is subject to supervision, examination and regulation by Massachusetts Division of Banks.

Clarendon Private is also subject to regulation by the SEC.

The FDIC offers insurance coverage on all deposits up to $250,000 per depositor.

As FDIC-insured depository institution, the Bank is also subject to supervision, examination and regulation by the FDIC.

Basis of Financial Statement Presentation

The Company's consolidated financial statements have been prepared in conformity with U.S.

GAAP as set forth by the FASB in its Accounting Standards Codification and through the rules and interpretive releases of the SEC under the authority of federal securities laws.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries.

All significant intercompany transactions and balances are eliminated in consolidation.

In preparing these consolidated financial statements, management is required to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, income, expenses and disclosure of assets and liabilities.

Actual results could differ from those estimates based upon changing conditions, including economic conditions and future events.

Material estimates that are particularly susceptible to significant changes in the near-term include the determination of the ACL and the determination of fair market values of assets and liabilities.

The judgments used by management in applying these significant estimates may be affected by a further and prolonged deterioration in the economic environment, which may result in changes to future financial results.

For example, subsequent evaluations of the loan and lease portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for loan and lease losses in future periods, and the inability to collect outstanding principal may result in increased loan and lease losses.

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.

Certain previously reported amounts have been reclassified to conform to the current year's presentation.

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 historical loss rates are then adjusted for current and asset specific characteristics (also referred to as qualitative adjustments) and for expected changes to current conditions over the reasonable and supportable forecast period (also referred to as forecast).The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period.

The ACLL reserve is overlaid with qualitative factors based upon:

• the existence and growth of concentrations of credit;

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

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The ACLL is measured on a collective (pool) basis when similar risk characteristics exist.

The Company evaluates its risk characteristics of loans based on regulatory call report code with sub-segmentation based on underlying collateral for certain loan types.

Risk characteristics relevant to each portfolio segment are as follows:

Construction – Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion.

Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions.

Commercial real estate multifamily, owner occupied and non-owner – Loans in this segment are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York.

The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment.

Management monitors the cash flows of these loans.

Commercial and industrial loans – Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets.

Repayment is expected from the cash flows of the business.

Loans in this segment include asset based loans which generally have no scheduled repayment which are closely monitored against formula based collateral advance ratios.

A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality of this segment.

Residential real estate – All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower.

The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Home equity and other consumer loans – Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans.

The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Loans that do not share risk characteristics are evaluated on an individual basis and are not also included in the collective evaluation.

Estimates of specific allowance may be determined by the present value of anticipated future cash flows or the loan’s observable fair market value, or the fair value of the collateral less costs to sell, if the loan is collateral dependent.

However, for collateral dependent loans, the amount of the amortized cost in a loan that exceeds the fair value of the collateral is charged-off against the allowance for credit losses on loans in lieu of an allocation of a specific allowance amount when such an amount has been identified definitively as uncollectible.

Bank-Owned Life Insurance

Bank-owned life insurance policies are reflected on the Consolidated Balance Sheets at the amount that can be realized under the insurance contract at the balance sheet date which is the cash surrender value.

Changes in the net cash surrender value of the policies, as well as insurance proceeds received, are reflected in non-interest income on the Consolidated Statements of Income and are not subject to income taxes.

Foreclosed and Repossessed Assets

Other real estate owned is comprised of real estate acquired through foreclosure proceedings or acceptance of a deed in lieu of foreclosure.

Repossessed collateral is primarily comprised of taxi medallions.

Both other real estate owned and repossessed collateral are held for sale and are initially recorded at the fair value less estimated costs to sell at the date of foreclosure or repossession, establishing a new cost basis.

The shortfall, if any, of the loan balance over the fair value of the property or collateral (excluding taxi medallions), less cost to sell, at the time of transfer from loans to other real estate owned or repossessed collateral is charged to the allowance for credit losses on loans.

Subsequent to transfer, the asset is carried at lower of cost or fair value less cost to sell and periodically evaluated for impairment.

The shortfall, if any, of the loan balance over the fair value of the collateral comprised of taxi medallions at the time of transfer from loans to repossessed collateral is charged to non-interest income.

Subsequent impairments in the fair value of other real estate owned and repossessed collateral are charged to expense in the period incurred.

Net operating income or expense related to other real estate owned and repossessed collateral is included in operating expenses in the accompanying Consolidated Statements of Income.

Because of changing market conditions, there are inherent uncertainties in the assumptions with respect to the estimated fair value of other real estate owned and repossessed collateral.

Because of these inherent uncertainties, the amount ultimately

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

Capitalized Servicing Rights

Capitalized servicing rights are included in “other assets” in the Consolidated Balance Sheets.

Servicing assets are initially recognized as separate assets at fair value when rights are acquired through purchase or through sale of financial assets with servicing retained.

The Company's servicing rights accounted for under the fair value method are carried on the Consolidated Balance Sheets at fair value with changes in fair value recorded in income in the period in which the change occurs.

Changes in the fair value of servicing rights are primarily due to changes in valuation assumptions, such as discount rates and prepayment speeds, and the collection and realization of expected cash flows.

The Company’s servicing rights accounted for under the amortization method are initially recorded at fair value.

Under that method, capitalized servicing rights are charged to expense in proportion to and over the period of estimated net servicing income.

Fair value of the servicing rights is based on a valuation model that calculates the present value of estimated future net servicing income.

The valuation model incorporates assumptions that market participants would use in estimating future net servicing income, such as the cost to service, the discount rate, prepayment speeds and default rates and losses.

Impairment is recognized through a valuation allowance for an individual tranche, to the extent that fair value is less than the capitalized amount for the tranches.

If the Company later determines that all or a portion of the impairment no longer exists for a particular tranche, a reduction of the allowance may be recorded as an increase to income.

For purposes of reporting asset balances and cash flows, cash and cash equivalents includes cash on hand and due from banks (including cash items in process of clearing), interest-bearing deposits with banks, federal funds sold, money market mutual funds and other short-term investments with original maturities of three months or less.

Cash and cash equivalents are held at major institutions and are subject to credit risk to the extent those balances exceed applicable FDIC or Securities Investor Protection Corporation limitations.

Table of Content s

BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Investment Securities

Investment securities, other than those reported as short-term investments, are classified at the time of purchase as "available-for-sale," "held-to-maturity," or "held-for-trading." Classification is periodically re-evaluated for consistency with the Company's goals and objectives.

Equity investments in the FHLB of Boston, the Federal Reserve Bank of Boston, and other restricted equities are discussed in more detail in Note 5, "Restricted Equity Securities."

Investment Securities Available-for-Sale, Held-to-Maturity, and Held-for-Trading

Investment securities for which the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and carried at amortized cost.

As of December 31, 2025 and 2024, the Company did not hold any securities as held-to-maturity.

Those investment securities held for indefinite periods of time but not necessarily to maturity are classified as available-for-sale.

Investment securities held for indefinite periods of time include investment securities that management intends to use as part of its asset/liability, liquidity, and/or capital management strategies and may be sold in response to changes in interest rates, maturities, asset/liability mix, liquidity needs, regulatory capital needs or other business factors.

Investment securities available-for-sale are carried at estimated fair value, primarily obtained from a third-party pricing service, with unrealized gains and losses reported on an after-tax basis in stockholders' equity as accumulated other comprehensive income or loss.

Investment securities expected to be held for very short term duration, used for hedging, or are marketable equity securities are typically designated held-for-trading.

Held-for-trading securities are carried at estimated fair value principally based on market prices and dealer quotes received from third-party and nationally-recognized pricing services.

Gains and losses for held-for-trading are reported on the income statement as gains on investment securities, net.

As of December 31, 2025 and 2024, the Company did not hold any securities as held-for-trading.

As of December 31, 2025 and 2024, the Company did not make any adjustments to the prices provided by the third-party pricing service.

Security transactions are recorded on the trade date.

Realized gains and losses are determined using the specific identification method and are recorded in non-interest income.

Interest and dividends on securities are recorded using the accrual method.

Premiums and discounts on securities are amortized or accreted into interest income using the level-yield method over the remaining period to contractual maturity, adjusted for the effect of actual prepayments in the case of MBSs and CMOs.

These estimates of prepayment assumptions are made based upon the actual performance of the underlying security, current interest rates, the general market consensus regarding changes in mortgage interest rates, the contractual repayment terms of the underlying loans, the priority rights of the investors to the cash flows from the mortgage securities and other economic conditions.

When differences arise between anticipated prepayments and actual prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments.

Unamortized premium or discount is adjusted to the amount that would have existed had the new effective yield been applied since purchase, with a corresponding charge or credit to interest income.

Restricted Equity Securities

The Company invests in the stock of the FHLB of Boston, the Federal Reserve Bank of Boston, and a small amount of other restricted securities.

No ready market exists for these stocks, and they have no quoted market values.

The Bank, as a member of the FHLB, is required to maintain investments in the capital stock of the FHLB equal to its membership base investments plus an activity-based investment determined according to the Banks level of outstanding FHLB advances.

The Company has also purchased Federal Reserve Bank of Boston stock which is redeemable at par.

The Company reviews for impairment of these securities based on the ultimate recoverability of the cost basis in the stock.

As of December 31, 2025 and 2024, no impairment has been recognized.

Loans and Leases

Loans the Company originates for the portfolio, and for which it has the intent and ability to hold to maturity, are reported at amortized cost, inclusive of deferred loan origination fees and expenses, less unadvanced funds due to borrowers on loans and the allowance for loan and lease losses.

Interest income on loans and leases originated for the portfolio is accrued on unpaid principal balances as earned.

Loan origination fees and direct loan origination costs are deferred, and the net fee or cost is recognized in interest income using the interest method.

Deferred amounts are recognized for fixed-rate loans over the contractual life of the loans and for adjustable-rate loans over the period of time required to adjust the contractual interest rate to a yield approximating a market rate at the

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Notes to Consolidated Financial Statements (Continued)

origination date.

If a loan is prepaid, the unamortized portion of the loan origination costs, including third party referral related costs not subject to rebate from the dealer, is charged to income.

Loans and Leases Held-for-Sale

Management identifies and designates certain newly originated loans and leases for sale to specific financial institutions, subject to the underwriting criteria of those financial institutions.

These loans and leases are held for sale and are carried at the lower of cost or market as determined in the aggregate.

Deferred loan fees and costs are included in the determination of the gain or loss on sale.

The Company had no loans and leases held-for-sale as of December 31, 2025 and 2024.

Nonperforming Loans

Nonaccrual Loans

Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's judgment, reasonable doubt exists as to the full timely collection of interest.

Exceptions may be made if the loan has matured and is in the process of renewal or is well-secured and in the process of collection.

When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current interest income.

Interest payments on nonaccrual loans are generally applied to principal.

If collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis.

Loans are generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six consecutive months of performance has been achieved.

Impaired Loans

A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due (both interest and principal) according to the contractual terms of the loan agreement.

Smaller-balance, homogeneous loans that are evaluated collectively for impairment, such as residential, home equity and other consumer loans are specifically excluded from the impaired loan portfolio.

The Company has defined the population of impaired loans to include nonaccrual loans.

When the ultimate collectability of the total principal of an impaired loan or lease is in doubt and the loan is on nonaccrual status, all payments are applied to principal, under the cost recovery method.

When the ultimate collectability of the total principal of an impaired loan or lease is not in doubt and the loan or lease is on nonaccrual status, contractual interest is credited to interest income when received, under the cash basis method.

The value of an impaired loan is measured based upon the present value of expected future cash flows discounted at the loan's effective interest rate, or the fair value of the collateral if the loan is collateral-dependent and its payment is expected solely based on the underlying collateral.

For impaired loans deemed collateral dependent, where impairment is measured using the fair value of the collateral, the Company will either obtain a new appraisal or use another available source of collateral assessment to determine a reasonable estimate of the fair value of the collateral.

Interest collected on impaired loans is either applied against principal or reported as income according to management's judgment as to the collectability of principal.

If management does not consider a loan ultimately collectible within an acceptable time frame, payments are applied as principal to reduce the loan balance.

If full collection of the remaining recorded investment should subsequently occur, interest receipts are recorded as interest income on a cash basis.

Loan Modifications

In determining whether a debtor is experiencing financial difficulties, the Company considers, among other factors, whether the debtor is in payment default or is likely to be in payment default in the foreseeable future without the modification, if the debtor declared or is in the process of declaring bankruptcy, there is substantial doubt that the debtor will continue as a going concern, the debtor's entity-specific projected cash flows will not be sufficient to service its debt, if the debtor has securities that have been delisted or are in the process of being delisted, or the debtor cannot obtain funds from sources other than the existing creditors at market terms for debt with similar risk characteristics.

Disclosable modifications under current guidance include principal forgiveness, interest rate reductions, significant payment delays, maturity extensions, or any combination of the aforementioned modifications.

The Company tracks and discloses the performance of these modifications with respect to delinquency and re-modification status.

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The current guidance also eliminates the requirement to measure the allowance using a DCF methodology, and allows for a portfolio-based methodology for modified loans to troubled borrowers.

If the DCF approach is still utilized for individually evaluated loans, the discount rate used must be the modified effective interest rate, rather than the original effective interest rate.

Typically, modified loans to troubled borrowers are Substandard credits and are already evaluated for impairment on an individual basis.

Allowance for Credit Losses Methodology

Management has established a methodology to determine the adequacy of the ACL that assesses the risks and losses expected on the loan and lease portfolio and unfunded commitments.

Additions to the ACL are made by charges to the provision for credit losses.

Losses on loans and leases are charged off against the allowance when all or a portion of a loan or lease is considered uncollectible.

Subsequent recoveries on loans previously charged off, if any, are credited to the allowance when realized.

To calculate the allowance for loans collectively evaluated, management uses models developed by a third party.

The Bank’s core ACL process uses CRE, C&I, and retail lifetime loss rate models (core models) to calculate a lifetime loss rate based on loan attributes and reasonable and supportable economic forecasts.

This lifetime loss rate is then applied to exposure at default.

The exposure at default considers the current unpaid balance and expected utilization assumptions for unfunded commitments.

Key assumptions used in the models include portfolio segmentation, prepayments, and the expected utilization of unfunded commitments, among others.

The portfolios are segmented by loan level attributes such as loan type, loan size, date of origination, delinquency status, and risk ratings to create loan pools with similar risk characteristics.

Prepayment assumptions are embedded within the models and are based on the same data used for model development and incorporate adjustments for reasonable and supportable forecasts.

The historical data used to develop the model, including the observation period vary by model, but all use at least ten years of historical data and capture at least one recessionary period.

Expected utilization is based on current utilization and a LEQ factor.

LEQ varies by current utilization and provides a reasonable estimate of expected draws and borrower behavior.

Assumptions and model inputs are reviewed in accordance with model monitoring practices and as information becomes available.

Loans acquired in connection with the Transaction have losses estimated using a historical loss rate model (Legacy Berkshire model) based on the historical performance of various loan segments, which are segmented primarily by FDIC code, estimates of each segment’s weighted average life, and a statistical model to capture the impact of reasonable and supportable economic forecasts on the base loss rates.

The ACL estimate for both the Banks core models and Legacy Berkshire model incorporates reasonable and supportable forecasts of various macro-economic variables using multiple probability weighted economic scenarios.

For the Bank’s core models, reasonable and supportable economic forecasts and reversion to long-term economic conditions are embedded within the vendor provided economic scenarios applied over the remaining life of the loans.

Reversion towards long-term expectations generally begins two to three years from the forecast start date and largely completes within the first five years .

For the Legacy Berkshire model, management applies an explicit reasonable and supportable forecast period of seven quarters, using a straight-line reversion method over four quarters, after which economic assumptions revert to long term historical averages.

The Bank elected to use multiple economic forecasts in determining the reserve to account for economic uncertainty.

The forecasts include various projections of gross domestic product, interest rates, property price indices, and employment measures.

Scenario weighting and model parameters are updated to reflect facts and circumstances as of the financial statement date.

For the core models, the Bank calibrates expected losses for each model using a scalar, which is determined by examining the loss rates of peer banks that have similar operations and asset bases to the Bank and comparing these peer group loss rates to the model results.

As of December 31, 2025, management continued to apply qualitative adjustments to the Company’s models.

These adjustments are designed to address model limitations and are generally targeted to specific risks within certain portfolios (e.g., office and specialty vehicle) based on recent collateral valuations and performance trends.

Additionally, portfolio level metrics such as delinquency, population of adversely graded loans, non-accruals, etc.

are used to inform management’s evaluation of the credit risk in the portfolio and adjustments are made as appropriate.

These adjustments included both positive and negative adjustments with a total impact to the provision of $ 24.8 million at December 31, 2025, of which $ 5.6 million is related to the Legacy Berkshire portfolio.

Management reviews these factors on a quarterly basis as market conditions and segment performance evolve.

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Notes to Consolidated Financial Statements (Continued)

An ACL on loans individually evaluated for impairment is established when amortized cost basis is greater than the discounted present value of expected future cash flows or, in the case of collateral-dependent loans, when there is an excess of a loan's amortized cost basis over the fair value of its underlying collateral.

When loans and leases do not share risk characteristics with other financial assets they are evaluated individually.

Individually evaluated loans are reviewed quarterly with adjustments made to the calculated reserve as necessary.

Liability for Unfunded Commitments

In the ordinary course of business, the Company enters into commitments to extend credit, commercial letters of credit, and standby letters of credit.

Such financial instruments are recorded in the financial statements when they become payable.

The credit risk associated with these commitments is evaluated in a manner similar to the allowance for loan and lease losses.

Premises and Equipment

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.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Income tax positions and recorded tax benefits are based upon management’s evaluation of the facts, circumstances, and information available at the reporting date.

For those tax positions where it is more likely than not that a tax benefit will be sustained, we have determined the amount of the tax benefit to be recognized by estimating the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with a taxing authority that has full knowledge of all relevant information.

For those income tax positions where it is more-likely-than-not that a tax benefit will not be sustained, no tax benefit has been recognized in the financial statements.

Where applicable, associated interest and penalties have also been recognized.

We recognize accrued interest and penalties related to unrecognized tax benefits as a component of income tax expense.

Stock-Based Compensation

The Company measures and recognizes compensation cost relating to share-based payment transactions based on the grant-date fair value of the equity instruments issued.

The fair value of restricted stock is recorded as unearned compensation.

The deferred expense is amortized to compensation expense based on one of several permitted attribution methods over the longer of the required service period or performance period.

For performance-based restricted stock awards, the Company estimates the degree to which performance conditions will be met to determine the number of shares that will vest and the related compensation expense.

Compensation expense is adjusted in the period such estimates change.

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

Wealth Management

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

Balance Sheets because they are not assets of the Company.

Wealth management fees is primarily comprised of fees earned from consultative investment management, trust administration, tax return preparation, and financial planning.

The Company’s performance obligation is generally satisfied over time and the resulting fees are recognized monthly, based on the daily accrual of the market value of the investment accounts and the applicable fee rate.

Derivative Instruments and Hedging Activities

The Company enters into interest rate swap agreements as part of the Company’s interest rate risk management strategy for certain assets and liabilities and not for speculative purposes.

Based on the Company’s intended use for the interest rate swap at inception, the Company designates the derivative as either an economic hedge of an asset or liability or a hedging instrument subject to the hedge accounting provisions of ASC 815, “Derivatives and Hedging.”

Interest rate swaps designated as economic hedges are recorded at fair value within other assets or liabilities.

Changes in the fair value of these derivatives are recorded directly through earnings.

For interest rate swaps that management intends to apply the hedge accounting provisions of ASC 815, the Company formally documents at inception all relationships between hedging instruments and hedged items, as well as its risk management objectives and strategies for undertaking the various hedges.

Additionally, the Company uses dollar offset or regression analysis at the hedge’s inception and for each reporting period thereafter, to assess whether the derivative used in its hedging transaction is expected to be and has been highly effective in offsetting changes in the fair value or cash flows of the hedged item.

The Company discontinues hedge accounting when it is determined that a derivative is not expected to be or has ceased to be highly effective as a hedge, and then reflects changes in fair value of the derivative in earnings after termination of the hedge relationship.

The Company enters into commitments to lend with borrowers, and forward commitments to sell loans or to-be-announced mortgage-backed bonds to investors to hedge against the inherent interest rate and pricing risk associated with selling loans.

The commitments to lend generally terminate once the loan is funded, the lock period expires or the borrower decides not to contract for the loan.

The forward commitments generally terminate once the loan is sold, the commitment period expires or the borrower decides not to contract for the loan.

These commitments are considered derivatives which are accounted for by recognizing their estimated fair value on the Consolidated

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Balance Sheets as either a freestanding asset or liability.

See Note 14 - Derivative Instruments and Hedging Activities to the financial statements for more information on commitments to lend and forward commitments.

Off-Balance Sheet Financial Instruments

In the ordinary course of business, the Company enters into off-balance sheet financial instruments, consisting primarily of credit related financial instruments.

These financial instruments are recorded in the financial statements when they are funded or related fees are incurred or received.

Fair Value Hierarchy

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

Level 1 - Valuation is based on quoted prices in active markets for identical assets or liabilities.

Valuations are obtained from readily available pricing sources for market transactions involving identical assets or liabilities.

Level 2 - Valuation is based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities;

quoted prices in markets that are not active;

or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Valuation is based on unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Level 3 assets and liabilities include financial instruments whose value is determined using unobservable techniques, as well as instruments for which the determination of fair value requires significant management judgment or estimation.

Premises and equipment are carried at cost less accumulated depreciation and amortization, except for land which is carried at cost.

Premises and equipment are depreciated using the straight-line method over the estimated useful life of the assets.

Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the improvements.

Costs related to internal-use software development projects that provide significant new functionality are capitalized.

Internal-use software is software acquired or modified solely to meet the Company's needs and for which there is no plan to market the software externally.

Direct and indirect costs associated with the application development stage of internal use software are capitalized until such time that the software is substantially complete and ready for its intended use.

Capitalized costs are amortized on a straight-line basis over the remaining estimated life of the software.

Computer software and development costs incurred in the preliminary project stage, as well as training and maintenance costs, are expensed as incurred.

The Company leases certain office space under various noncancellable operating leases as well as certain other assets.

These leases have terms ranging from 1 year to over 18 years.

Certain leases contain renewal options and escalation clauses which can increase rental expenses based principally on the consumer price index and fair market rental value provisions.

Right-of-use lease assets are carried on the balance sheet at amortized cost and corresponding lease liabilities are carried on the balance sheet at present value of the future minimum lease payments, adjusted for any initial direct costs and incentives.

All of the Company's current outstanding leases are classified as operating leases.

Bank-Owned Life Insurance

BOLI represents life insurance on the lives of certain current and former employees who have provided positive consent allowing their employer to be the beneficiary of such policies.

The Bank utilizes BOLI as tax-efficient financing for its benefit obligations to its employees, including its retirement obligations and SERPs.

Since the Bank is the primary beneficiary of the insurance policies, increases in the cash value of the policies, as well as insurance proceeds received, are recorded in non-interest income and are not subject to income taxes.

BOLI is recorded at the cash value of the policies, less any applicable cash surrender charges, and is reflected as an asset in the accompanying consolidated balance sheets.

Cash proceeds, if any, are classified as cash flows from investing activities.

The Company reviews the financial strength of the insurance carriers prior to the purchase of BOLI to ensure minimum credit ratings of at least investment grade.

The financial strength of the carriers is reviewed at least annually, and BOLI with any individual carrier is limited to 10 % of the Company's capital.

Total BOLI is limited to 25 % of the Company's capital.

Goodwill and Other Identified Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired.

Goodwill and indefinite-lived identified intangible assets are not subject to amortization.

Definite-lived identified intangible assets are assets resulting from acquisitions that are being amortized over their estimated useful lives.

The recoverability of goodwill and identified intangible assets is evaluated for impairment at least annually.

A Company can perform a qualitative assessment of whether it is more likely than not that the fair value of an acquired asset is greater than its carrying amount.

If the Company qualitatively concludes that it is more likely than not that the fair value of an acquired asset is greater than its carrying amount, no further testing is necessary.

If, however, the Company qualitatively concludes that the fair value of an acquired asset is less

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Notes to Consolidated Financial Statements (Continued)

than its carrying value, or, if for any other reason the Company determines it to be appropriate, then a quantitative assessment will be performed.

If a quantitative analysis were performed, management would select a sample of comparable acquisitions and calculate the control premium associated with each sale.

The Company’s market capitalization would then be times by the sampled control premium allowing management to compare the calculated fair value to the Company’s current book value to determine if an adjustment to goodwill is warranted.

During the year ended December 31, 2025, the Company wrote off the trade name associated with BankRI in connection with the Bank Mergers.

There were no impairment losses relating to other intangible assets recorded during the years ended December 31, 2025 and 2024.

Further analysis of the Company’s goodwill can be found in Note 9 “Goodwill and Other Intangible Assets” within notes to the consolidated financial statements.

OREO and Other Repossessed Assets

OREO and other repossessed assets consists of properties acquired through foreclosure, real estate acquired through acceptance of a deed in lieu of foreclosure and loans determined to be substantively repossessed.

Real estate loans that are substantively repossessed include only those loans for which the Company has taken possession of the collateral.

OREO and other repossessed assets which consist of vehicles and equipment, if any, are recorded initially at estimated fair value less costs to sell, resulting in a new cost basis.

The amount by which the recorded investment in the loan exceeds the fair value (net of estimated cost to sell) of the foreclosed or repossessed asset is charged to the allowance for loan and lease losses.

Such evaluations are based on an analysis of individual properties/assets as well as a general assessment of current real estate market conditions.

Subsequent declines in the fair value of the foreclosed or repossessed asset below the new cost basis are recorded through the use of a valuation allowance.

Subsequent increases in the fair value are recorded as reductions in the allowance, but not below zero.

Rental revenue received on foreclosed or repossessed assets is included in other non-interest income, whereas operating expenses and changes in the valuation allowance relating to foreclosed and repossessed assets are included in other non-interest expense.

Certain costs used to improve such properties are capitalized.

Gains and losses from the sale of OREO and other repossessed assets are reflected in non-interest expense when realized.

Together with nonperforming loans, OREO and repossessed assets comprise nonperforming assets.

The Company utilizes loan level derivatives which consists of interest rate contracts (swaps, caps and floors), and risk participation agreements as part of the Company's interest-rate risk management strategy for certain assets and liabilities and not for speculative purposes.

Based on the Company's intended use for the loan level derivatives at inception, the Company designates the derivative as either an economic hedge of an asset or liability, or a hedging instrument subject to the hedge accounting provisions of FASB ASC Topic 815, "Derivatives and Hedging".

These derivatives designated as cash flow hedges involve the receipt of fixed rate amounts from a counterparty in exchange for the Company making variable rate payments.

Loan level derivatives and foreign exchange contracts entered into on behalf of our customers are designated as economic hedges and are recorded at fair value within other assets or liabilities.

Changes in the fair value of these non hedging derivatives are recorded directly through earnings at each reporting period.

Transfer of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered.

Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Employee Benefits

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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Due to the SI Financial acquisition in 2019, the Company inherited a tax-qualified defined benefit pension plan.

The plan was frozen effective September 6, 2013.

The plan is a single plan under the Internal Revenue Code and, as a result, all of the assets stand behind all of liabilities.

Accordingly, contributions made by a participating employer may be used to provide benefits to participants of other participating employers.

Operating Segments

The Company's reportable segment is determined by the Chief Executive Officer, who is designated the chief operating decision maker ("CODM"), based upon information provided about the Company's products and services offered, primarily banking operations.

Consolidated net income of the company is the primary performance metric utilized by the CODM.

The segment is also distinguished by the level of information provided to the CODM, who uses such information to review performance of various components of the business, which are then aggregated if operating performance, products/services, and customers are similar.

The CODM will evaluate the financial performance of the Company's business components such as by evaluating revenue streams, significant expenses, and budget to actual results in assessing the Company's segment and in the determination of allocating resources.

The CODM uses revenue streams to evaluate product pricing and significant expenses to assess performance and evaluate return on assets.

The CODM uses consolidated net income to benchmark the Company against its competitors.

The benchmarking analysis coupled with monitoring of budget to actual results are used in assessment performance and in establishing compensation.

Loans, investments, and deposits provide the revenues in the banking operation.

Interest expense, provisions for credit losses, and payroll provide the significant expenses in the banking operation.

No other expenses meet the threshold of significant.

While the Company has assigned certain management responsibilities by business lines, the Company’s CODM monitors and evaluates financial performance on a Company-wide basis.

The majority of the Company’s revenue is from the business of banking.

Accordingly, all of the Company’s operations are considered by management to be aggregated in one reportable operating segment.

All operations are domestic.

Recently Adopted Accounting Principles

Effective January 1, 2024, the Company adopted the provisions of Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) No.

2023-02, "Investments-Equity Method and Joint Ventures (Topic 323):

Accounting for Investments in Tax Credit Structures Using the Proportional Amortization Method (a consensus of the Emerging Issues Task Force)" (ASU 2023-02).

ASU 2023-02 expanded the permitted use of the proportional amortization method (PAM), which was previously only available to low-income housing tax credit investments, to other tax equity investments if certain conditions are met.

Under PAM, the initial cost of an investment is amortized in proportion to the income tax benefits received and both the amortization of the investment and the income tax benefits received are recognized as a component of income tax expense.

Under this ASU, an entity has the option to apply PAM to applicable investments on a tax-credit-program-by-tax-credit-program basis.

The Company has elected PAM for its public welfare investments which consist of Affordable Housing and New Market tax credit investments.

In addition, the amendments in this ASU require that all tax equity investments accounted for using PAM use the delayed equity contribution guidance in paragraph ASC 323-740-25-3, requiring a liability be recognized for delayed equity contributions that are unconditional and legally binding or for equity contributions that are contingent upon a future event when that contingent event becomes probable.

The amendments in this ASU also require additional disclosures in interim and annual periods concerning investments for which PAM is applied, including (i) the nature of tax equity investments, and (ii) the effect of tax equity investments and related income tax credits and other income tax benefits on the financial position and results of operations.

The provisions of this ASU became effective for the Company for interim and annual periods beginning January 1, 2024.

Refer to Note 24 – Tax Equity Investments for additional information.

The adoption of this ASU did not have a material impact on the Company's Consolidated Financial Statements.

Future Application of Accounting Pronouncements

In December 2023, the FASB issued ASU No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures.” The ASU requires disclosure in the rate reconciliation table of additional categories of information and more details about the reconciling items in some categories if items meet a quantitative threshold.

The ASU also requires all entities to disclose income taxes paid, net of refunds, disaggregated by federal, state and foreign taxes for annual periods and to disaggregate the information by jurisdiction based on a quantitative threshold, among other things.

The amendments in this ASU are effective for annual periods beginning after December 15, 2024.

Early adoption is permitted.

The Company is still evaluating;

however, the adoption is not expected to have a material impact on the Company’s Consolidated Financial Statements.

CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash on hand, amounts due from banks, and short-term investments with original maturities of 90 days or less.

At year-end 2024 and 2023, there were no short-term investments pledged as collateral support for derivative financial contracts.

The Federal Reserve Bank requires the Bank to maintain certain reserve requirements of vault cash and/or deposits.

As of December 31, 2024 and 2023, the reserve requirement was zero .

TRADING SECURITY

The Company holds a tax advantaged economic development bond that is being accounted for at fair value.

The security had an amortized cost of $ 5.3 million and $ 6.2 million and a fair value of $ 5.3 million and $ 6.1 million at year-end 2024 and 2023, respectively.

Unrealized gains/(losses) recorded through income on this security totaled $ 21 thousand, $ 294 thousand, and ($ 830 ) thousand for 2024, 2023, and 2022, respectively.

As discussed further in Note 14 - Derivative Instruments and Hedging Activities, the Company has entered into a swap contract to swap-out the fixed rate of the security in exchange for a variable rate.

The Company does not purchase securities with the intent of selling them in the near term, and there are no other debt securities in the trading portfolio at year-end 2024 and 2023.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(In thousands) Amortized

Losses Fair Value Allowance

December 31, 2024

Securities available for sale

Debt securities:

U.S Treasuries $ 6,986 $ 3 $ — $ 6,989 $ —

Municipal bonds and obligations 63,952 10 ( 3,098 ) 60,864 —

Agency collateralized mortgage obligations 328,569 146 ( 64,153 ) 264,562 —

Agency mortgage-backed securities 273,969 4 ( 53,733 ) 220,240 —

Agency commercial mortgage-backed securities 85,686 — ( 18,975 ) 66,711 —

Corporate bonds 38,689 30 ( 2,362 ) 36,357 —

Total securities available for sale 797,851 193 ( 142,321 ) 655,723 —

Securities held to maturity

Municipal bonds and obligations 235,883 129 ( 22,619 ) 213,393 44

Agency collateralized mortgage obligations 101,163 — ( 17,884 ) 83,279 —

Agency mortgage-backed securities 43,644 — ( 8,707 ) 34,937 —

Agency commercial mortgage-backed securities 125,547 — ( 25,153 ) 100,394 —

Tax advantaged economic development bonds 1,144 — ( 42 ) 1,102 20

Other bonds and obligations 277 — — 277 —

Total securities held to maturity 507,658 129 ( 74,405 ) 433,382 64

Equity securities 655 67 ( 67 ) 655 —

Costs related to the Company's 401(k) plan are recognized in current earnings.

Costs related to the Company's nonqualified deferred compensation plan, SERPs and postretirement benefits are recognized over the vesting period or the related service periods of the participating employees.

Changes in the funded status of postretirement benefits and defined pension plans are recognized through comprehensive income in the year in which changes occur.

The fair value of restricted stock awards and stock option grants are determined as of the grant date and are recorded as compensation expense over the period in which the shares of restricted stock awards and stock options vest.

Forfeitures are accounted for as they occur.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Fair Value Measurements

ASC 820-10, "Fair Value Measurements and Disclosures," defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants.

A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability.

The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs.

An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities.

It is not a forced transaction.

Market participants are buyers and sellers in the principal market that are independent, knowledgeable, able to transact, and willing to transact.

A fair-value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs are included in ASC 820.

The fair value hierarchy is as follows:

Inputs are unadjusted quoted prices in active markets for assets and liabilities identical to those reported at fair value.

Inputs other than quoted prices included within Level 1.

Level 2 inputs are observable either directly or indirectly.

These inputs might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Inputs are unobservable inputs for an asset or liability that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

These inputs are used to determine fair value only when observable inputs are not available.

Earnings per Common Share

EPS is computed by dividing net income by the weighted average number of shares of common stock outstanding for the applicable period, exclusive of Treasury shares and unvested shares of restricted stock.

Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all potential dilutive common shares outstanding during the period.

The dilutive effects of options and unvested restricted stock awards are computed using the "treasury stock" method.

Management evaluated the "two class" method and concluded that the method did not apply to the Company's EPS calculation.

Income taxes are accounted for under the asset and liability method.

Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled.

The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Tax positions that are more likely than not to be sustained upon a tax examination are recognized in the Company's financial statements to the extent that the benefit is greater than 50% likely of being recognized.

Interest resulting from underpayment of income taxes is classified as income tax expense in the first period the interest would begin accruing according to the provision of the relevant tax law.

Penalties resulting from underpayment of income taxes are classified as income tax expense in the period for which the Company claims or expects to claim an uncertain tax position or in the period in which the Company's judgment changes regarding an uncertain tax position.

For new ITCs, the Company chose to apply the flow-through method and immediately recognize the ITC benefit in income tax expense, as opposed to deferring.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Business Combinations

Business combinations are generally accounted for under the acquisition method of accounting whereby assets acquired and liabilities assumed in business combinations are recorded at their estimated fair value as of the acquisition date.

The determination of fair value may involve the use of internal or third-party valuation specialists to assist in the determination of the fair value of certain assets and liabilities at the acquisition date, including loans and leases and core deposit intangible.

The excess of the cost of acquisition over these fair values is recognized as goodwill.

Treasury Stock

Any shares repurchased under the Company's share repurchase programs were purchased in open-market transactions and are held as treasury stock.

Treasury stock also consists of common stock withheld to satisfy federal, state and local income tax withholding requirements for employee restricted stock awards upon vesting.

All treasury stock is held at cost.

Segment Reporting

An operating segment is defined as a component of a business for which separate financial information is available that is evaluated regularly by the CODM in deciding how to allocate resources and evaluate performance.

The Company is a bank holding company operating through a single business segment, which derives interest income on loan and lease products the Company offers to customers.

The President and Chief Executive Officer of the Company acts as the Company’s CODM.

The CODM regularly reviews comprehensive financial information with the reported measures focused on net interest income and net income.

This financial information reviewed is consistent with the information presented within the Company’s financial statements.

The CODM uses the reported measures of net interest income and net income to assess performance by comparing to and monitoring against budget and prior year results.

This information is used to manage resources to drive business and net earnings growth, including investment in key strategic priorities, as well as determine the Company's ability to return capital to shareholders.

The Company's banking business provided substantially all of its total revenues and pre-tax income in 2025, 2024 and 2023.

Therefore, the Company has determined to be a single segment.

Recent Accounting Developments

In December 2023, the FASB issued ASU 2023-09, "Income Taxes (Topic 740):

Improvements to Income Tax Disclosures" to enhance the annual income tax disclosure requirements.

This update is effective for annual periods beginning after December 15, 2024.

The Company adopted ASU 2023-09 as of January 1, 2025.

The adoption did not have a material impact on the Company's consolidated financial statements.

In November 2025, the FASB issued ASU 2025-08, "Financial Instruments - Credit Losses (Topic 326):

Purchased Loans" ("ASU 2025-08").

This ASU aligns the initial recognition of the allowance for loan losses on purchased loans between PCD and non‑PCD assets by applying the gross‑up approach previously required only for PCD loans.

The Company elected to adopt this ASU effective January 1, 2025, and applied it to the Transaction (as defined below) completed in the third quarter, as permitted under the guidance.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(2) Business Combinations

On September 1, 2025 (the “Merger Date”), the Company completed its previously announced merger of equals with Brookline Bancorp, Inc., a Delaware corporation (“Legacy Brookline”), pursuant to the Agreement and Plan of Merger, dated as of December 16, 2024, by and among the Company, Commerce Acquisition Sub, Inc.

and Legacy Brookline (the “Merger Agreement”).

On September 1, 2025, Commerce Acquisition Sub, Inc.

merged with and into Legacy Brookline (the “Merger”), immediately followed by the merger of Legacy Brookline with and into the Company (the “Holdco Merger”), with the Company as the resulting corporation.

The Company also changed its name from Berkshire Hills Bancorp, Inc.

to Beacon Financial Corporation (“Beacon”).

Immediately following the closing of the Holdco Merger, the Company changed its New York Stock Exchange ticker symbol for its common stock, par value $ 0.01 per share, from “BHLB” to “BBT.”

Pursuant to the terms of the Merger Agreement, as of the closing of the Holdco Merger, each share of Legacy Brookline common stock, par value $ 0.01 per share, was converted into the right to receive 0.42 shares (the “Exchange Ratio”) of Company Common Stock, with cash to be paid in lieu of fractional shares.

Immediately following the Holdco Merger, Berkshire Bank, a wholly owned subsidiary of the Company, Bank Rhode Island, a wholly owned subsidiary of Legacy Brookline, and PCSB Bank, a wholly owned subsidiary of Legacy Brookline, each merged with and into Brookline Bank, a wholly owned subsidiary of Legacy Brookline, with Brookline Bank as the surviving bank (the “Bank Mergers” and, together with the Merger and the Holdco Merger, the “Transaction”).

In connection with the Bank Mergers, Brookline Bank changed its name to Beacon Bank & Trust.

The Transaction was treated as a business combination under ASC 805 and was accounted for as a reverse merger using the acquisition method of accounting.

Therefore, Legacy Brookline was deemed the acquirer for financial reporting purposes even though the Company was the legal acquirer.

As such, the historical financial statements of Legacy Brookline became the historical financial statements of the combined company.

In addition, the assets acquired, including identified intangible assets, and assumed liabilities of the Company as of the Merger Date, have been recorded at their estimated fair value.

As the legal acquirer, the Company issued 37.7 million shares of common stock in connection with the merger, which represented approximately 45 % of the voting interests upon completion of the merger.

In accordance with U.S.

GAAP, the purchase price in a reverse acquisition is determined based on the number of equity interests the legal acquiree would have had to issue to give the owners of the legal acquirer the same percentage equity interest in the combined entity that results from the reverse acquisition.

Therefore, the first step in calculating the purchase price of the Merger is to determine the ownership of the combined company following the Merger.

The following table summarizes the ownership of the combined Company, as well as the market capitalization of the combined company using shares of the Company and Legacy Brookline outstanding at August 31, 2025 and the Company’s closing price on August 31, 2025:

Number of Company Outstanding Shares Percentage Ownership Market Value at $ 26.14 Company Share Price (in thousands)

Company Stockholders 46,389,917 55.18 % $ 1,212,169

Legacy Brookline Stockholders 37,673,213 44.82 % 984,401

Total 84,063,130 100.00 % $ 2,196,570

December 31, 2023

Securities available for sale

Debt securities:

U.S Treasuries $ 7,980 $ 1 $ — $ 7,981 $ —

Municipal bonds and obligations 64,788 494 ( 1,429 ) 63,853 —

Agency collateralized mortgage obligations 426,986 — ( 79,112 ) 347,874 —

Agency mortgage-backed securities 492,633 2 ( 75,155 ) 417,480 —

Agency commercial mortgage-backed securities 174,879 — ( 29,553 ) 145,326 —

Corporate bonds 43,291 34 ( 4,210 ) 39,115 —

Other bonds and obligations 655 67 ( 66 ) 656 —

Total securities available for sale 1,211,212 598 ( 189,525 ) 1,022,285 —

Securities held to maturity

Municipal bonds and obligations 251,046 698 ( 16,987 ) 234,757 48

Agency collateralized mortgage-backed securities 112,929 — ( 18,360 ) 94,569 —

Agency mortgage-backed securities 47,379 — ( 8,052 ) 39,327 —

Agency commercial mortgage-backed securities 130,169 — ( 24,368 ) 105,801 —

Tax advantaged economic development bonds 1,540 6 ( 60 ) 1,486 20

Other bonds and obligations 288 — — 288 —

Total securities held to maturity 543,351 704 ( 67,827 ) 476,228 68

Equity securities 15,035 — ( 2,006 ) 13,029 —

The following table summarizes the hypothetical number of shares Legacy Brookline would have to issue to give the Company’s owners the same percentage ownership in the combined company (based on shares of Legacy Brookline common stock outstanding at August 31, 2025):

Number of Legacy Brookline Outstanding Shares Percentage Ownership

Company Stockholders 110,452,183 55.18 %

Legacy Brookline Stockholders 89,698,126 44.82 %

Total 200,150,309 100.00 %

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

The year-end 2024 and 2023 related income tax benefit of $ 37.7 million and $ 49.4 million, respectively, was also included in accumulated other comprehensive (loss).

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

(In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total

Balance at December 31, 2023 $ 48 $ 20 $ 68

Provision (benefit) for credit losses ( 4 ) — ( 4 )

Balance at December 31, 2024 $ 44 $ 20 $ 64

(In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total

Balance at December 31, 2022 $ 66 $ 25 $ 91

Provision (benefit) for credit losses

( 18 ) ( 5 ) ( 23 )

Balance at December 31, 2023 $ 48 $ 20 $ 68

(In thousands) Municipal bonds and obligations Tax advantaged economic development bonds Total

Balance at December 31, 2021 $ 70 $ 35 $ 105

Provision expense/(benefit) for credit losses

( 4 ) ( 10 ) ( 14 )

Balance at December 31, 2022 $ 66 $ 25 $ 91

Credit Quality Information

The Company monitors the credit quality of held to maturity securities through credit ratings from various rating agencies.

Credit ratings express opinions about the credit quality of a security and are utilized by the Company to make informed decisions.

Investment grade securities are rated BBB-/Baa3 or higher and generally considered by the rating agencies and market participants to be of low credit risk.

Conversely, securities rated below investment grade are considered to have distinctively higher credit risk than investment grade securities.

For securities without credit ratings, the Company utilizes other financial information indicating the financial health of the underlying municipality, agency, or organization.

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The amortized cost and estimated fair value of AFS and HTM securities, segregated by contractual maturity at year-end 2024 are presented below.

Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations.

Mortgage-backed securities and collateralized mortgage obligations are shown in total, as their maturities are highly variable.

Available for sale Held to maturity

(In thousands) Amortized

Value Amortized

The purchase price was calculated based on the number of hypothetical shares of Legacy Brookline common stock issued to Company stockholders multiplied by the share price, as summarized in the following table (amounts in thousands):

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Number of hypothetical Brookline shares issued to Company Stockholders 110,452,183

Brookline market price per share as of August 31, 2025 $ 10.95

Purchase price determination of hypothetical Brookline shares issued to Company Stockholders 1,209,451

Value of Company stock options hypothetically converted to options to acquire shares of Brookline common stock 1,147

Fraction share payments 49

Purchase price consideration $ 1,210,647

The following table provides the purchase price allocation as of the Merger Date and the assets acquired and liabilities assumed at their estimated fair value as of the Merger Date as recorded by the Company.

The Company recorded the estimate of fair value based on initial valuations available at the Merger Date and these estimates were considered preliminary as of December 31, 2025, and subject to adjustment for up to one year after the Merger Date.

While the Company believes the information available on the Merger Date provided a reasonable basis for estimating fair value, the Company expects it may obtain additional information and evidence during the measurement period that would result in changes to the estimated fair value amounts.

The measurement period ends on the earlier of one year after the Merger Date or the date the Company is able to determine all necessary information about the facts and circumstances that existed as of the Merger Date has been obtained.

As of December 31, 2025, all of the fair value determinations are preliminary with the exception of those assets and liabilities where carrying value has been determined to reasonably represent fair value.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(In Thousands)

Fair value of consideration transferred:

Value of hypothetical legacy Brookline shares transferred $ 1,209,451

Conversion of Company stock options 1,147

Cash paid for fractional shares 49

Total purchase consideration 1,210,647

Fair value of assets acquired:

Cash and due from banks 105,440

Short-term investments 978,667

Investment securities available-for-sale 1,102,464

Loans held for sale 3,471

Loans held for investment 9,081,447

Premises and equipment 73,368

Bank owned life insurance 246,979

Accrued interest receivable 49,717

Core deposit intangible asset 174,415

Customer relationships intangible asset 14,000

Other assets 314,345

Total assets acquired 12,144,313

Fair value of liabilities assumed:

Deposits 10,287,573

Borrowings 559,402

Accrued expenses and other liabilities 197,082

Total liabilities assumed 11,044,057

Net assets acquired 1,100,256

Goodwill $ 110,391

The Company recorded $ 110.4 million of goodwill in connection with the Transaction, none of which is deductible for tax purposes.

The amount of goodwill recorded reflects the synergies and operational efficiencies that are expected to result from the Transaction.

The descriptions below describe the methods used to determine the fair value of significant assets acquired and liabilities assumed, as presented above:

Cash and due from banks – The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets.

Short-term investments – The carrying amount of these assets is a reasonable estimate of fair value based on the short-term nature of these assets.

Investment Securities available-for-sale – Fair values for investment securities were based on the market value of the securities on the date of the merger and, for any securities that were sold shortly after the merger, the actual sales prices of the securities when they were sold.

Loans held for sale – The loans held for sale portfolio was recorded at fair value based on quotes or bids from third party investors and/or recent sale prices.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Loans, net – The fair value of the acquired loan portfolio was estimated using a discounted cash flow methodology, with assumptions applied based on pools of loans with similar characteristics.

The valuation was based on the remaining maturity and repricing characteristics of the loans and considered assumptions related to prepayment rates, expected credit losses, and the discount rate.

Expected credit losses were estimated using probability of default and loss given default assumptions.

Projected cash flows were discounted to present value using market‑based risk‑adjusted rates reflective of interest rate, servicing, credit, liquidity risk, and required equity return for similar loans.

Premises and equipment – The fair values of premises are based on a market approach, by obtaining third-party appraisals and broker opinions of value for land, office and branch space.

For other assets included in premises and equipment, the carrying value of the assets was determined to approximate fair value.

Core deposit intangible – The core deposit intangible represents the economic benefit derived from the acquired core deposits due to their lower cost of funding relative to the Company’s marginal cost of funds.

The fair value was estimated using a discounted cash flow methodology, with assumptions applied based on groupings of core deposits with similar characteristics.

The valuation considered expected customer attrition, net maintenance costs associated with servicing the deposit base, interest costs on customer deposits, and the alternative cost of funds.

The cash flows from estimated net cost savings derived from the acquired core deposits were projected over the estimated economic life of the deposit relationships, discounted to present value, and aggregated to determine the fair value of the core deposit intangible.

The intangible asset is being amortized over 12 years using the sum‑of‑the‑years‑digits method, based upon the period over which the estimated economic benefits are expected to be realized.

Customer relationship intangible – The customer relationship intangible asset was valued using the multi-period excess earnings method under the income approach.

The intangible asset is being amortized over 12 years using the sum of years digits, based upon the period over which estimated economic benefits are estimated to be received.

Other assets, bank owned life insurance, and accrued interest receivable – The carrying amount of these assets is a reasonable estimate of fair value.

Deposits – The fair values used for the demand and savings deposits equal the amount payable on demand at the Merger Date.

The fair values for time deposits are estimated using a discounted cash flow calculation that applies interest rates currently being offered to the contractual interest rates on such time deposits.

Borrowings – The fair values of FHLB advances and long-term debt instruments are estimated based on quoted market prices for the instrument if available, or for similar instruments if not available, or by using discounted cash flow analyses, based on current incremental borrowing rates for similar types of instruments.

Other liabilities – The carrying amount of these liabilities is a reasonable estimate of fair value.

The following table provides a reconciliation between the unpaid principal balance of acquired Purchased-credit deteriorated loans (“PCD”) loans and the purchase price:

(In Thousands)

Unpaid principal balance $ 595,614

PCD allowance for credit losses ( 64,510 )

Non-credit (discount) premium on acquired loans ( 15,761 )

Fair value of PCD loans $ 515,343

Loans acquired are recorded at fair value with no carryover of the related allowance for credit losses.

PCD are loans that have experienced more than insignificant credit deterioration since origination.

The allowance for credit losses is determined on a collective basis and is allocated to the individual loans.

The sum of the loan’s purchase price and the 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.

Non-PCD loans are given the same treatment as PCD loans as a result of the Company adopting ASU 2025-08 as of January 1, 2025.

The Company's operating results for the year ended December 31, 2025 include the operating results of the acquired assets and assumed liabilities of the Company subsequent to the Merger Date.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

The Company recorded merger related expenses of $ 61.7 million during the year ended December 31, 2025.

The following table presents unaudited pro forma information as if the Transaction had occurred on January 1, 2024.

The pro forma adjustments give effect to any change in interest income due to the accretion of the discount (premium) associated with the fair value adjustments to acquired loans, any change in interest expense due to estimated premium amortization/discount accretion associated with the fair value adjustment to acquired interest-bearing deposits and long-term debt and the amortization of the core deposit intangible that would have resulted had the deposits been acquired as of January 1, 2024.

The pro forma information is not indicative of what would have occurred had the merger occurred as of the beginning of the year prior to the Merger Date.

The pro forma amounts below do not reflect the Company's expectations as of the date of the pro forma information of further operating cost savings and other business synergies expected to be achieved, including revenue growth as a result of the merger and the effects of the balance sheet repositioning completed subsequent to the merger.

As a result, actual amounts differed from the unaudited pro forma information presented.

Unaudited Pro Forma

(In Thousands)

Net interest income 796,797 742,222

Non-interest income 105,425 74,029

Net income before income taxes 176,008 52,178

(3) Cash, Cash Equivalents and Short-Term Investments

Aggregate reserve balances included in cash and cash equivalents were $ 1.9 billion and $ 0.5 billion, respectively, as of December 31, 2025 and 2024.

Short-term investments are summarized as follows:

At December 31,

(In Thousands)

FRB interest bearing reserve $ 1,823,591 $ 470,706

FHLB overnight deposits 16,597 8,291

Total short-term investments $ 1,840,188 $ 478,997

Short-term investments are stated at cost which approximates market value.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(4) Investment Securities

The following tables set forth investment securities available-for-sale at the dates indicated:

At December 31, 2025

Losses Estimated

(In Thousands)

Investment securities available-for-sale:

GSE debentures $ 185,449 $ 512 $ 12,284 $ 173,677

GSE CMOs 500,446 2,784 6,660 496,570

GSE MBSs 334,476 3,009 11,740 325,745

Municipal obligations 231,924 8,305 13 240,216

Corporate debt obligations 39,209 863 49 40,023

Treasury bonds 424,214 1,727 13,904 412,037

Foreign government obligations 500 — — 500

Total investment securities available-for-sale $ 1,716,218 $ 17,200 $ 44,650 $ 1,688,768

At December 31, 2024

Losses Estimated

(In Thousands)

Investment securities available-for-sale:

GSE debentures $ 195,099 $ 225 $ 19,030 $ 176,294

GSE CMOs 62,567 4 7,028 55,543

GSE MBSs 166,843 63 18,621 148,285

Municipal obligations 20,526 19 291 20,254

Corporate debt obligations 12,140 225 78 12,287

Treasury bonds 506,714 331 25,173 481,872

Foreign government obligations 500 — 1 499

Total investment securities available-for-sale $ 964,389 $ 867 $ 70,222 $ 895,034

As of December 31, 2025, the fair value of all investment securities available-for-sale was $ 1.7 billion, with net unrealized losses of $ 27.5 million, compared to a fair value of $ 895.0 million and net unrealized losses of $ 69.4 million as of December 31, 2024.

As of December 31, 2025, $ 552.9 million, or 32.7 % of the portfolio, had gross unrealized losses of $ 44.7 million, compared to $ 705.3 million, or 78.8 % of the portfolio, with gross unrealized losses of $ 70.2 million as of December 31, 2024.

As of December 31, 2025 and 2024, the Company did not hold any securities as held to maturity;

all securities were held as available-for-sale.

Investment Securities as Collateral

As of December 31, 2025 and 2024, respectively, $ 1.2 billion and $ 792.0 million of investment securities were pledged as collateral for repurchase agreements;

municipal deposits;

treasury, tax and loan deposits ("TT&L");

swap agreements;

Federal Reserve Bank borrowings;

and FHLB borrowings.

The Bank did no t have any outstanding Federal Reserve Bank borrowings as of December 31, 2025 and 2024.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Allowance for Credit Losses-Available-for-Sale Securities

For available-for-sale securities in an unrealized loss position, management first assesses whether (i) the Company intends to sell the security, or (ii) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis.

If either criterion is met, any previously recognized allowances are charged-off and the security's amortized cost is written down to fair value through income.

If neither criterion is met, the security is evaluated to determine whether the decline in fair value has resulted from credit losses or other factors.

In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and any adverse conditions specifically related to the security, among other factors.

If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security.

If the present value of cash flows expected to be collected is less than the amortized cost basis, an allowance for credit loss is recorded, limited by the amount that the fair value is less than the amortized cost basis.

Any impairment that has not been recorded through an ACL is recognized in other comprehensive income.

Adjustments to the allowance are reported as a component of credit loss expense.

Available-for-sale securities are charged-off against the allowance or, in the absence of any allowance, written down through income when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met.

The Company has made the accounting policy election to exclude accrued interest receivable on available-for-sale securities from the estimate of credit losses.

Accrued interest receivables associated with debt securities available-for-sale totaled $ 7.2 million as of December 31, 2025, compared to $ 4.1 million as of December 31, 2024.

A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain.

Accrued interest for a debt security placed on nonaccrual is reversed against interest income.

There were no debt securities on nonaccrual status and therefore there was no accrued interest related to debt securities reversed against interest income for the years ended December 31, 2025 and 2024.

Assessment for Available-for-Sale Securities for Impairment

Investment securities as of December 31, 2025 and 2024 that have been in a continuous unrealized loss position for less than twelve months or twelve months or longer are as follows:

At December 31, 2025

Twelve Months Twelve Months

or Longer Total

Fair Value Unrealized

Losses Estimated

Fair Value Unrealized

Losses Estimated

Fair Value Unrealized

(In Thousands)

Investment securities available-for-sale:

GSE debentures $ 32 $ 1 $ 103,884 $ 12,283 $ 103,916 $ 12,284

GSE CMOs 68,184 460 45,145 6,200 113,329 6,660

GSE MBSs 79 1 114,594 11,739 114,673 11,740

Municipal obligations 9,721 11 391 2 10,112 13

Corporate debt obligations 4,943 41 2,666 8 7,609 49

Treasury bonds — — 203,283 13,904 203,283 13,904

Foreign government obligations — — — — — —

Temporarily impaired investment securities available-for-sale 82,959 514 469,963 44,136 552,922 44,650

Total temporarily impaired investment securities $ 82,959 $ 514 $ 469,963 $ 44,136 $ 552,922 $ 44,650

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

At December 31, 2024

Twelve Months Twelve Months

or Longer Total

Fair Value Unrealized

Losses Estimated

Fair Value Unrealized

Losses Estimated

Fair Value Unrealized

(In Thousands)

Investment securities available-for-sale:

GSE debentures $ 30,753 $ 281 $ 107,750 $ 18,749 $ 138,503 $ 19,030

GSE CMOs 4,664 107 50,334 6,921 54,998 7,028

GSE MBSs 11,128 596 131,481 18,025 142,609 18,621

Municipal obligations 3,616 74 3,568 217 7,184 291

Corporate debt obligations — — 2,550 78 2,550 78

Treasury bonds 67,290 285 291,641 24,888 358,931 25,173

Foreign government obligations — — 499 1 499 1

Temporarily impaired investment securities available-for-sale 117,451 1,343 587,823 68,879 705,274 70,222

Total temporarily impaired investment securities $ 117,451 $ 1,343 $ 587,823 $ 68,879 $ 705,274 $ 70,222

The Company performs regular analysis on the investment securities available-for-sale portfolio to determine whether a decline in fair value indicates that an investment security is impaired.

In making these impairment determinations, management considers, among other factors, projected future cash flows;

credit subordination and the creditworthiness;

capital adequacy and near-term prospects of the issuers.

Management also considers the Company's capital adequacy, interest-rate risk, liquidity and business plans in assessing whether it is more likely than not that the Company will sell or be required to sell the investment securities before recovery.

If the Company determines that a security investment is impaired and that it is more likely than not that the Company will not sell or be required to sell the investment security before recovery of its amortized cost, the credit portion of the impairment loss is recognized in the Company's consolidated statement of income and the noncredit portion is recognized in accumulated other comprehensive income.

The credit portion of the impairment represents the difference between the amortized cost and the present value of the expected future cash flows of the investment security.

If the Company determines that a security is impaired and it is more likely than not that it will sell or be required to sell the investment security before recovery of its amortized cost, the entire difference between the amortized cost and the fair value of the security will be recognized in the Company's consolidated statement of income.

Investment Securities Available-For-Sale Impairment Analysis

The following discussion summarizes, by investment security type, the basis for evaluating if the applicable investment securities within the Company’s available-for-sale portfolio were impaired as of December 31, 2025.

The Company has determined it is more likely than not that the Company will not sell or be required to sell the investment securities before recovery of its amortized cost.

The Company's ability and intent to hold these investment securities until recovery is supported by the Company's strong capital and liquidity positions as well as its historically low portfolio turnover.

As such, management has determined that the investment securities are not impaired as of December 31, 2025.

If market conditions for investment securities worsen or the creditworthiness of the underlying issuers deteriorates, it is possible that the Company may recognize additional impairment in future periods.

Government-Sponsored Enterprises

The Company invests in securities issued by GSEs, including GSE debentures, MBSs, and CMOs.

GSE securities include obligations issued by the FNMA, the FHLMC, the GNMA, the FHLB and the Federal Farm Credit Bank.

As of December 31, 2025, the Company held GNMA MBSs and CMOs, and SBA commercial loan asset-backed securities in its available-for-sale portfolio with an estimated fair value of $ 285.4 million, all of which were backed explicitly by the full faith and credit of the U.S.

Government, compared to $ 36.9 million as of December 31, 2024.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

As of December 31, 2025, the Company owned 38 GSE debentures with a total fair value of $ 173.7 million, and a net unrealized loss of $ 11.8 million.

As of December 31, 2024, the Company held 34 GSE debentures with a total fair value of $ 176.3 million, and a net unrealized loss of $ 18.8 million.

As of December 31, 2025, 17 of the 38 securities in this portfolio were in an unrealized loss position.

As of December 31, 2024, 23 of the 34 securities in this portfolio were in an unrealized loss position.

All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA/SBA) guarantee of the U.S.

During the twelve months ended December 31, 2025 and 2024, the Company did not purchase any GSE debentures securities.

As of December 31, 2025, the Company owned 136 GSE CMOs with a total fair value of $ 496.6 million and a net unrealized loss of $ 3.9 million.

As of December 31, 2024, the Company held 59 GSE CMOs with a total fair value of $ 55.5 million with a net unrealized loss of $ 7.0 million.

As of December 31, 2025, 57 of the 136 securities in this portfolio were in an unrealized loss position.

As of December 31, 2024, 57 of 59 of the securities in this portfolio were in an unrealized loss position.

All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S.

During the twelve months ended December 31, 2025, the Company purchased $ 19.9 million of GSE CMOs compared to the same period in 2024, when the Company did not purchase any GSE CMOs.

As of December 31, 2025, the Company owned 194 GSE MBSs with a total fair value of $ 325.7 million and a net unrealized loss of $ 8.7 million.

As of December 31, 2024, the Company held 141 GSE MBSs with a total fair value of $ 148.3 million with a net unrealized loss of $ 18.6 million.

As of December 31, 2025, 85 of the 194 securities in this portfolio were in an unrealized loss position.

As of December 31, 2024, 92 of the 141 securities in this portfolio were in an unrealized loss position.

All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S.

During the twelve months ended December 31, 2025, the Company did not purchase any GSE MBS securities compared to the same period in 2024, when the Company purchased $ 4.1 million of GSE MBS securities.

Municipal Obligations

The Company invests in certain state and municipal securities with high credit ratings for portfolio diversification and tax

planning purposes.

Full collection of the obligations is expected because the financial conditions of the issuing municipalities

are sound, they have not defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the

ability and intent to hold the obligations for a period of time to recover the amortized cost..

As of December 31, 2025, the Company owned 242 municipal obligation securities with a total fair value of $ 240.2 million and a net unrealized gain of $ 8.3 million.

As of December 31, 2024, the Company owned 39 municipal obligation securities with a total fair value of $ 20.3 million and a net unrealized loss of $ 0.3 million.

As of December 31, 2025, 12 of the 242 securities in this portfolio were in an unrealized loss position.

During the twelve months ended December 31, 2025, the Company purchased $ 2.8 million of municipal securities compared to the same period in 2024 when the Company purchased $ 11.7 million of municipal securities.

Corporate Obligations

The Company may invest in high-quality corporate obligations to provide portfolio diversification and improve the overall yield on the portfolio.

As of December 31, 2025, the Company owned 16 corporate obligation securities with a total fair value of $ 40.0 million and a net unrealized gain of $ 0.8 million.

As of December 31, 2024, the Company held 4 corporate obligation securities with a total fair value of $ 12.3 million and a net unrealized gain of $ 0.1 million.

As of December 31, 2025, 2 of the 16 securities in this portfolio were in an unrealized loss position.

As of December 31, 2024, 1 of the 4 securities in this portfolio was in an unrealized loss position.

Full collection of the obligations is expected because the financial condition of the issuers is sound, they have not defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the ability and intent to hold the obligations for a period of time to recover the amortized cost.

During the twelve months ended December 31, 2025 and 2024, the Company did no t purchase any corporate obligations.

Treasury Bonds

The Company invests in securities issued by the U.S.

As of December 31, 2025, the Company owned 54 U.S.

Treasury bonds with a total fair value of $ 412.0 million and a net unrealized loss of $ 12.2 million.

As of December 31, 2024, the Company owned 65 U.S.

Treasury bonds with a total fair value of $ 481.9 million and a net unrealized loss of $ 24.8 million.

As of December 31, 2025, 25 of the 54 securities in this portfolio were in an unrealized loss position.

As of December 31, 2024, 50 of the 65 securities in this portfolio were in unrealized loss positions.

During the twelve months ended December 31, 2025 the Company purchased $ 9.9 million U.S.

Treasury bonds compared to the same period in 2024 when the Company purchased $ 132.7 million, of U.S.

Treasury bonds.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Foreign Government Obligations

As of December 31, 2025 and 2024, the Company owned 1 foreign government obligation security with a fair value and amortized cost of $ 0.5 million.

As of December 31, 2025, the security was held at par.

As of December 31, 2024, the security was in an unrealized loss position.

During the twelve months ended December 31, 2025 the Company repurchased the same type of foreign government obligation securities.

Portfolio Maturities

The final stated maturities of the debt securities are as follows for the periods indicated:

At December 31,

Cost Estimated

Fair Value Weighted

Rate Amortized

Cost Estimated

Fair Value Weighted

(Dollars in Thousands)

Investment securities available-for-sale:

Within 1 year $ 145,787 $ 146,092 3.89 % $ 103,337 $ 102,457 3.22 %

Over 1 year to 5 years 21,117 20,782 2,980 2,930

Over 5 years to 10 years 47,244 44,631 54,191 53,032

After 1 year through 5 years 472,284 454,138 2.76 % 449,289 434,608 3.32 %

After 5 years through 10 years 246,784 242,931 3.56 % 207,980 180,370 1.77 %

Over 10 years 851,363 845,607 4.18 % 203,783 177,599 3.13 %

Total bonds and obligations 109,627 104,210 237,304 214,772

Mortgage-backed securities 688,224 551,513 270,354 218,610

Total $ 797,851 $ 655,723 $ 507,658 $ 433,382

At year-end 2024 and 2023, the Company had pledged securities as collateral for certain municipal deposits and for interest rate swaps with certain counterparties.

The total amortized cost and fair values of these pledged securities follows.

Additionally, there is a blanket lien on certain securities to collateralize borrowings from the FHLBB and Federal Reserve Bank of Boston, as discussed further in Note 10 - Borrowed Funds.

(In thousands) Amortized

Value Amortized

Securities pledged to swap counterparties $ 9,574 $ 9,078 $ 9,780 $ 9,633

Securities pledged for municipal deposits 286,183 218,665 289,740 250,979

Total $ 295,757 $ 227,743 $ 299,520 $ 260,612

Proceeds from the sale of AFS securities totaled $ 362 million, $ 267 million, and $ 150 million in 2024, 2023, and 2022, respectively.

The (loss)/gain for the sale of AFS securities were reclassified out of accumulated other comprehensive (loss) and into earnings.

The components of net recognized gains and losses on the sale of AFS securities and the fair value change of equities are as follows:

(In thousands) 2024 2023 2022

Gross recognized gains $ 21,488 $ 1,199 $ 72

Gross recognized losses ( 71,566 ) ( 26,083 ) ( 2,009 )

Net recognized (losses) $ ( 50,078 ) $ ( 24,884 ) $ ( 1,937 )

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

December 31, 2024

Securities available for sale

Debt securities:

Municipal bonds and obligations $ 773 $ 30,299 $ 2,325 $ 25,916 $ 3,098 $ 56,215

Agency collateralized mortgage obligations

$ 1,716,218 $ 1,688,768 3.69 % $ 964,389 $ 895,034 2.96 %

Agency mortgage-backed securities

113 3,706 53,620 215,822 53,733 219,528

Agency commercial mortgage-back securities — — 18,975 66,711 18,975 66,711

Corporate bonds — — 2,362 32,538 2,362 32,538

Total securities available for sale $ 1,289 $ 79,959 $ 141,032 $ 541,025 $ 142,321 $ 620,984

Securities held to maturity

Municipal bonds and obligations

1,614 73,453 21,005 111,228 22,619 184,681

Agency collateralized mortgage obligations

— — 17,884 83,279 17,884 83,279

Agency mortgage-backed securities

— — 8,707 34,937 8,707 34,937

Agency commercial mortgage-back securities — — 25,153 100,394 25,153 100,394

Tax advantaged economic development bonds

— — 42 1,102 42 1,102

Total securities held to maturity 1,614 73,453 72,791 330,940 74,405 404,393

Total $ 2,903 $ 153,412 $ 213,823 $ 871,965 $ 216,726 $ 1,025,377

December 31, 2023

Securities available for sale

Debt securities:

Municipal bonds and obligations $ 76 $ 9,326 $ 1,353 $ 22,739 $ 1,429 $ 32,065

Agency collateralized mortgage obligations

— — 79,112 347,874 79,112 347,874

Agency mortgage-backed securities

1 22 75,154 417,151 75,155 417,173

Agency commercial mortgage-backed securities

— — 29,553 145,326 29,553 145,326

Corporate bonds 457 6,543 3,753 31,690 4,210 38,233

Other bonds and obligations — — 66 295 66 295

Total securities available for sale $ 534 $ 15,891 $ 188,991 $ 965,075 $ 189,525 $ 980,966

Securities held to maturity

Municipal bonds and obligations

Actual maturities of debt securities will differ from those presented above since certain obligations amortize and may also provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty.

MBSs and CMOs are included above based on their final stated maturities;

the actual maturities, however, may occur earlier due to anticipated prepayments and stated amortization of cash flows.

As of December 31, 2025, issuers of debt securities with an estimated fair value of $ 965.2 million had the right to call or prepay the obligations.

Of the $ 965.2 million, $ 12.4 million matures in less then 1 year, $ 111.4 million matures in 1-5 years, $ 157.1 million matures in 6-10 years, and $ 684.3 million mature after ten years.

As of December 31, 2024, issuers of debt securities with an estimated fair value of $ 118.6 million had the right to call or prepay the obligations.

Of the $ 118.6 million,$ 4.8 million matures in less than 1 year, $ 67.4 million matures in 1-5 years, $ 38.9 million matures in 6-10 years, and $ 7.5 million matures after ten years.

Security Sales

The Company sold investment securities available-for-sale during the twelve months ended December 31, 2025.

Proceeds from the sale of investment securities available-for-sale were $ 176.3 million.

Securities sales executed during the twelve months ended December 31, 2025 were related to the Transaction, resulting in a restructuring of the portfolio.

There was no gain or loss on the sale.

During the twelve months ended December 31, 2024, the Company did not sell any investment securities available-for-sale.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(5) Restricted Equity Securities

Investments in the restricted equity securities of various entities are as follows:

At December 31,

(In Thousands)

FHLB stock $ 29,382 $ 61,108

FRB stock 57,407 21,881

Other restricted equity securities 649 166

$ 87,438 $ 83,155

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Debt Securities

The Company expects to recover its amortized cost basis on all debt securities in its AFS and HTM portfolios.

Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of December 31, 2024, prior to this recovery.

The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions.

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

AFS municipal bonds and obligations

At year-end 2024, 77 out of 91 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions.

Aggregate unrealized losses represented 5.2 % of the amortized cost of securities in unrealized loss positions.

The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market.

At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for that risk.

There were no material underlying credit downgrades during 2024.

All securities are performing.

AFS collateralized mortgage obligations

At year-end 2024, 41 out of 43 securities in the Company’s portfolio of AFS collateralized mortgage obligations were in unrealized loss positions.

Aggregate unrealized losses represented 20.7 % of the amortized cost of securities in unrealized loss positions.

The Federal National Mortgage Association ("FNMA"), Federal Home Loan Mortgage Corporation ("FHLMC"), and Government National Mortgage Association ("GNMA") guarantee the contractual cash flows of all of the Company's collateralized residential mortgage obligations.

The securities are investment grade rated and there were no material underlying credit downgrades during 2024.

All securities are performing.

AFS commercial and residential mortgage-backed securities

At year-end 2024, 28 out of 28 securities in the Company’s portfolio of AFS mortgage-backed securities were in unrealized loss positions.

Aggregate unrealized losses represented 20.3 % of the amortized cost of securities in unrealized loss positions.

The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities.

The securities are investment grade rated and there were no material underlying credit downgrades during 2024.

All securities are performing.

AFS corporate bonds

At year-end 2024, 12 out of 14 securities in the Company’s portfolio of AFS corporate bonds were in unrealized loss positions.

The aggregate unrealized loss represents 6.8 % of the amortized cost of bonds in unrealized loss positions.

The Company reviews the financial strength of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities.

All securities are performing.

HTM municipal bonds and obligations

At year-end 2024, 137 out of 159 securities in the Company’s portfolio of HTM municipal bonds and obligations were in unrealized loss positions.

Aggregate unrealized losses represented 10.9 % of the amortized cost of securities in unrealized loss positions.

The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market.

At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for that risk.

There were no material underlying credit downgrades during 2024.

All securities are performing.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

HTM collateralized mortgage obligations

At year-end 2024, 12 out of 12 securities in the Company’s portfolio of HTM collateralized mortgage obligations were in an unrealized loss position.

Aggregate unrealized losses represented 17.7 % of the amortized cost of the security in an unrealized loss position.

The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of all of the Company's collateralized residential mortgage obligations.

The securities are investment grade rated, and there were no material underlying credit downgrades during 2024.

All securities are performing.

HTM commercial and residential mortgage-backed securities

At year-end 2024, 17 out of 17 securities in the Company’s portfolio of HTM mortgage-backed securities were in unrealized loss positions.

Aggregate unrealized losses represented 20.0 % of the amortized cost of securities in unrealized loss positions.

The FNMA, FHLMC, and GNMA guarantee the contractual cash flows of the Company’s mortgage-backed securities.

The securities are investment grade rated and there were no material underlying credit downgrades during 2024.

All securities are performing.

HTM tax-advantaged economic development bonds

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

bonds were in unrealized loss positions.

Aggregate unrealized losses represented 3.7 % of the amortized cost of

securities in unrealized loss position.

The Company believes that more likely than not all the principal outstanding

will be collected.

All securities are performing.

LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

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

(In thousands) December 31, 2024 December 31, 2023

Construction $ 726,344 $ 640,371

Commercial multifamily 636,805 599,145

Commercial real estate owner occupied 695,330 628,646

Commercial real estate non-owner occupied 2,769,447 2,606,409

Commercial and industrial 1,439,175 1,359,249

Residential real estate 2,771,769 2,760,312

Home equity 230,365 224,223

Consumer other 115,759 221,331

Total loans $ 9,384,994 $ 9,039,686

Allowance for credit losses 114,700 105,357

Net loans $ 9,270,294 $ 8,934,329

As of December 31, 2024 and 2023, outstanding loans originated under the Small Business Administration ("SBA") Paycheck Protection Program ("PPP") totaled $ 1.4 million and $ 3.0 million, respectively.

These loans are 100% guaranteed by the SBA and the full principal amount of the loan may qualify for forgiveness.

These loans are included in commercial and industrial.

In 2024, the Company purchased loans aggregating $ 76 million and sold loans aggregating $ 178 million.

In 2023, the Company purchased loans aggregating $ 649 million and sold loans aggregating $ 255 million.

In 2022, the Company purchased loans aggregating $ 718 million and sold loans aggregating $ 366 million.

Net gains on sales of loans were $ 12.6 million, $ 10.3 million, and $ 12.5 million for the years 2024, 2023, and 2022, respectively.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Most of the Company’s lending activity occurs within its primary markets in Massachusetts, Southern Vermont, and Northeastern New York.

Most of the loan portfolio is secured by real estate, including residential mortgages, commercial mortgages, and home equity loans.

Year-end loans to operators of non-residential buildings totaled $ 2.3 billion, or 24.6 %, and $ 2.2 billion, or 24.0 % of total loans in 2024 and 2023, respectively.

There were no other concentrations of loans related to any single industry in excess of 10% of total loans at year-end 2024 or 2023.

As of December 31, 2024 and December 31, 2023, the Company had no foreclosed residential real estate property.

Additionally, residential mortgage loans collateralized by real estate property that are in the process of foreclosure as of December 31, 2024 and December 31, 2023 totaled $ 1.1 million and $ 3.8 million, respectively, including sold loans serviced by the Company.

At year-end 2024 and 2023, the Company had pledged loans totaling $ 1.6 billion and $ 1.3 billion, respectively, to the Federal Reserve Bank of Boston as collateral for certain borrowing arrangements.

Also, residential first mortgage loans are subject to a blanket lien for FHLBB advances.

See Note 10 - Borrowed Funds.

At year-end 2024 and 2023, the Company’s commitments outstanding to related parties totaled $ 2.2 million and $ 1.5 million, respectively, and the loans outstanding against these commitments totaled $ 1.6 million and $ 0.8 million, respectively.

Related parties include directors and executive officers of the Company and its subsidiaries, as well as their respective affiliates in which they have a controlling interest and immediate family members.

For the years 2024 and 2023, all related party loans were performing.

Risk characteristics relevant to each portfolio segment are as follows:

Construction - Loans in this segment primarily include real estate development loans for which payment is derived from sale of the property or long term financing at completion.

Credit risk is affected by cost overruns, time to sell at an adequate price, and market conditions.

Commercial real estate multifamily, owner occupied and non-owner - Loans in these segments are primarily owner-occupied or income-producing properties throughout New England and Northeastern New York.

The underlying cash flows generated by the properties are adversely impacted by a downturn in the economy, which in turn, will have an effect on the credit quality in this segment.

Management monitors the cash flows of these loans.

Commercial and industrial loans - Loans in this segment are made to businesses and are generally secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets.

Repayment is expected from the cash flows of the business.

Loans in this segment include asset based loans which generally have no scheduled repayment and which are closely monitored against formula based collateral advance ratios.

A weakened economy, and resultant decreased consumer spending, will have an effect on the credit quality in this segment.

Residential real estate - All loans in this segment are collateralized by residential real estate and repayment is dependent on the credit quality of the individual borrower.

The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

Home equity and other consumer loans - Loans in this segment are primarily home equity lines of credit, automobile loans and other consumer loans.

The overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this segment.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Allowance for Credit Losses on Loans

The Allowance for Credit Losses for Loans (“ACLL”) is comprised of the allowance for credit losses, and the allowance for unfunded commitments is accounted for as a separate liability in other liabilities on the balance sheet.

The level of the ACLL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date.

The Company uses a static pool migration analysis method, applying expected historical loss trend and observed economic metrics.

The level of the ACLL is based on management’s ongoing review of all relevant information, from internal and external sources, relating to past and current events, utilizing a 7 quarter reasonable and supportable forecast period with a 1 year reversion period.

The ACLL reserve is overlaid with qualitative factors based upon:

• the existence and growth of concentrations of credit;

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

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

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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

(In thousands) Balance at Beginning of Period Charge-offs Recoveries Provision for Credit Losses Balance at End of Period

Year ended December 31, 2024

The Company invests in the stock of the FHLB of Boston as one of the requirements to borrow.

As of December 31, 2025 and 2024, FHLB stock is recorded at its carrying value, which is equal to cost and which management believes approximates its fair value.

As of December 31, 2025, the Company's investment in FHLB stock met the total stock investment requirement.

The Company invests in the stock of the Federal Reserve Bank of Boston as required by the Banks membership in the Federal Reserve System.

As of December 31, 2025 and 2024, Federal Reserve Bank stock is recorded at its carrying value, which is equal to cost and which management believes approximates its fair value.

Other Stock —The Company invests in a small number of other restricted equity securities.

As of December 31, 2025, the Company owned stock in other restricted equity securities with a carrying value of $ 0.6 million, compared to $ 0.2 million December 31, 2024.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(6) Loans and Leases

The following table presents the amortized cost of loans and leases and weighted average coupon rates for the loan and lease portfolios at the dates indicated:

At December 31, 2025 At December 31, 2024

Balance Weighted

(Dollars In Thousands)

Commercial real estate loans:

Commercial real estate $ 7,235,397 5.58 % $ 4,027,265 5.40 %

Multi-family mortgage 2,155,980 5.29 % 1,387,796 5.06 %

Construction 620,717 6.61 % 301,053 7.00 %

Commercial multifamily 2,475 ( 1,164 ) — 2,773 4,084

Commercial real estate owner occupied 9,443 ( 403 ) 231 2,032 11,303

Commercial real estate non-owner occupied 38,221 ( 36 ) 249 86 38,520

Commercial and industrial 18,602 ( 7,820 ) 1,984 12,783 25,549

Residential real estate 19,622 ( 76 ) 1,425 1,508 22,479

Total commercial real estate loans 10,012,094 5.58 % 5,716,114 5.40 %

Commercial loans and leases:

2,784,152 6.34 % 1,211,714 6.47 %

Equipment financing 1,163,211 8.55 % 1,294,950 8.27 %

Total commercial loans and leases 3,947,363 6.99 % 2,506,664 7.40 %

Consumer loans:

Residential mortgage 3,233,425 4.82 % 1,114,732 4.69 %

Home equity 695,307 6.30 % 377,411 7.18 %

Consumer other 12,094 ( 11,026 ) 1,726 3,116 5,910

Total allowance for credit losses $ 105,357 $ ( 20,525 ) $ 5,865 $ 24,003 $ 114,700

(In thousands) Balance at Beginning of Period Adoption of

2022-02 Charge-offs Recoveries Provision for Credit Losses Balance at End of Period

Other consumer 141,363 5.25 % 64,367 6.67 %

Total consumer loans 4,070,095 5.09 % 1,556,510 5.38 %

Total loans and leases $ 18,029,552 5.78 % $ 9,779,288 5.91 %

_________________________________________________________________________

(1) The weighted average coupon does not include the impact of amortizing premium and discounts on acquired loans.

Accrued interest on loans and leases, which were excluded from the amortized cost of loans and leases totaled $ 77.8 million and $ 37.5 million at December 31, 2025 and December 31, 2024, respectively, and were included in other assets in the accompanying Consolidated Balance Sheets.

The net unamortized deferred loan origination costs and premium and discount on acquired loans included in total loans and leases were $( 237.6 ) million and $( 19.6 ) million as of December 31, 2025 and 2024, respectively.

The $ 218 million increase in 2025 was primarily driven by the discount determined on the loan portfolio assumed in the Transaction.

Related Party Loans

The Bank's authority to extend credit to their respective directors and executive officers, as well as to entities controlled by such persons, is currently governed by the requirements of the Sarbanes-Oxley Act and Regulation O of the FRB.

Among other things, these provisions require that extensions of credit to insiders (1) be made on terms that are substantially the same as, and follow credit underwriting procedures that are not less stringent than, those prevailing for comparable transactions with unaffiliated persons and that do not involve more than the normal risk of repayment or present other unfavorable features;

and (2) not exceed certain limitations on the amount of credit extended to such persons, individually and in the aggregate, which limits are based, in part, on the amount of the Bank's capital.

In addition, the extensions of credit to insiders must be approved by the Bank's Board of Directors.

The following table summarizes the change in the total amounts of loans and advances to directors, executive officers and their affiliates for the periods indicated.

All loans were performing as of December 31, 2025 and 2024.

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Year Ended December 31,

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

(Dollars In Thousands)

Balance at beginning of year $ 107,561 $ 133,499

New loans granted during the year — 24,447

Loans no longer classified as insider loans ( 70,645 ) ( 68,516 )

New loans to existing relationship — 17,245

Net (repayments)/additional drawals ( 1,557 ) 886

Loan reclassified as an insider loan 21 —

Balance at end of year $ 35,380 $ 107,561

Unfunded commitments on extensions of credit to related parties totaled $ 15 thousand and $ 5.6 million as of December 31, 2025 and 2024, respectively.

Loans and Leases Pledged as Collateral

As of December 31, 2025 and 2024, there were $ 6.3 billion and $ 3.6 billion, respectively, of loans and leases pledged as collateral for repurchase agreements;

municipal deposits;

treasury, tax and loan deposits;

swap agreements;

Federal Reserve Bank borrowings, and FHLB borrowings.

The Bank did no t have any outstanding Federal Reserve Bank borrowings as of December 31, 2025 and 2024.

(7) Allowance for Credit Losses

The following tables present the changes in the allowance for loan and lease losses and the recorded investment in loans and leases by portfolio segment for the periods indicated:

Year Ended December 31, 2025

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

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liability on the Consolidated Balance Sheets), with adjustments to the reserve recognized in other noninterest expense in the Consolidated Statements of Income.

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

(In thousands) Total

Balance at December 31, 2023 $ 9,256

Expense for credit losses 565

Balance at December 31, 2024 $ 9,821

(In thousands) Total

Real Estate Commercial Consumer Total

(In Thousands)

Balance at December 31, 2024 $ 74,171 $ 44,169 $ 6,743 $ 125,083

Expense for credit losses 668

Charge-offs ( 11,018 ) ( 31,034 ) ( 199 ) ( 42,251 )

Recoveries 252 3,657 743 4,652

Merger Day 1 allowance on non-PCD loans 31,820 17,891 17,518 67,229

Merger Day 1 allowance on PCD loans 38,744 24,294 1,473 64,511

Provision (credit) for loan and lease losses excluding unfunded commitments 8,422 27,513 ( 2,320 ) 33,615

Balance at December 31, 2025 $ 142,391 $ 86,490 $ 23,958 $ 252,839

(In thousands) Total

Year Ended December 31, 2024

Real Estate Commercial Consumer Total

(In Thousands)

Balance at December 31, 2023 $ 81,410 $ 29,557 $ 6,555 $ 117,522

Release of expense for credit losses 1,545

Charge-offs ( 4,425 ) ( 22,345 ) ( 40 ) ( 26,810 )

Recoveries — 2,241 41 2,282

Provision (credit) for loan and lease losses excluding unfunded commitments ( 2,814 ) 34,716 187 32,089

Balance at December 31, 2024 $ 74,171 $ 44,169 $ 6,743 $ 125,083

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

The allowance for credit losses for unfunded credit commitments was $ 13.7 million, and $ 6.0 million at December 31, 2025 and December 31, 2024, respectively.

Provision for Credit Losses

The provision (credit) for credit losses are set forth below for the periods indicated:

Year Ended December 31,

2025 2024 2023

(In Thousands)

Provision (credit) for loan and lease losses:

Commercial real estate $ 8,422 $ ( 2,814 ) $ 14,328

Commercial 27,513 34,716 21,537

Consumer ( 2,320 ) 187 2,838

Total provision (credit) for loan and lease losses 33,615 32,089 38,703

Unfunded credit commitments 7,765 ( 10,086 ) ( 835 )

Investment securities available-for-sale 12 ( 359 ) 339

Total provision (credit) for credit losses $ 41,392 $ 21,644 $ 38,207