What changed in this filing

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Item 1A. Risk Factors

2026-03-02 compared with 2025-02-27 · 164 added, 161 removed, 500 unchanged (39% of the section changed)

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You should consider this summary together with the more detailed information provided below.

There are various risks associated with our acquisition growth strategy, any of which could have a material adverse effect on our business.

• We may be unsuccessful in realizing the expected benefits of the Cambridge acquisition or other acquired businesses, including failure to retain key employees or customers, incurrence of unexpected difficulty or expense in integrating operations, technologies or customers, assumption of significant (and potentially unknown) liabilities, and inexperience with the products and/or geographies offered by the acquired business, all of which could divert our management’s attention and/or negatively impact our financial results.

• When we acquire a business, a portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable intangible assets.

The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired determines the amount of the purchase price that is allocated to goodwill acquired.

Under current accounting guidance, if we determine that goodwill or intangible assets are impaired, we would be required to write down the value of these assets.

• We operate in a competitive market and may be unable to successfully identify additional acquisition opportunities or compete for attractive acquisition targets.

Various risks, including risks associated with changes in interest rates, loan losses, cybersecurity and regulatory compliance, are inherent in our business and our industry generally.

• Increases in interest rates have had and in the future may have a material adverse effect on many areas of our business, including net interest income, the earnings and volume of interest-earning assets and interest-bearing liabilities, and loan delinquency, and increases in interest rates may have a material adverse effect on our operating results.

• Increases in interest rates have had and in the future could have a material adverse effect on many areas of our business, including net interest income, the earnings and volume of interest-earning assets and interest-bearing liabilities, and loan delinquency, and increases in interest rates may have a material adverse effect on our operating results.

• If our allowance for loan losses is insufficient to cover actual loan losses, our earnings and capital could decrease.

• The geographic concentration of our loan portfolio and lending activities in eastern Massachusetts and southern and coastal New Hampshire makes us vulnerable to a downturn in our local economy.

• The geographic concentration of our loan portfolio and lending activities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island makes us vulnerable to a downturn in our local economy.

• We face security risks to our information databases, including information we maintain relating to our customers, as precautions taken by us and our vendors may not be completely effective to prevent unauthorized access, human error, phishing attacks or other events that could impact the security, reliability, confidentiality, integrity and availability of our systems or those of our vendors.

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• We may be unable to successfully execute on our strategic plan or performance targets, including through a failure to attract or retain the necessary highly skilled and qualified personnel.

• The fair value of our investments, including our securities portfolio, has declined due to increases in interest rates beginning in March 2022 and may decline further in the future.

• Actions of activist shareholders could cause us to incur substantial costs, divert management’s attention and resources and have an adverse effect on our business.

• The fair value of our investments, including our securities portfolio, has declined due to increases in interest rates beginning in March 2022 and could decline further in the future due to increases in interest rates.

Unrealized gains and losses, net of tax, in the estimated fair value of the available-for-sale portfolio is recorded as other comprehensive income, which has the effect of reducing our shareholders’ equity and therefore our tangible book value per share, which is a metric many investors in our common stock consider.

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• We may be unable to disclose some restrictions or limitations on our operations imposed by our regulators.

• Our stock-based benefit plan, which we adopted in 2021, has increased and is expected to continue to increase our annual compensation and benefit expenses.

There are various risks associated with acquisitions, any of which could have a material adverse effect on our business.

• We may be unsuccessful in realizing the expected benefits of the HarborOne acquisition or other acquired businesses, including failure to retain key employees or customers, incurrence of unexpected difficulty or expense in integrating operations, technologies or customers, assumption of significant (and potentially unknown) liabilities, and inexperience with the products and/or geographies offered by the acquired business, all of which could divert our management’s attention and/or negatively impact our financial results.

• When we acquire a business, a portion of the purchase price of the acquisition typically is allocated to goodwill and other identifiable intangible assets.

Under current accounting guidance, if we determine that goodwill or intangible assets are impaired, we would be required to write down the value of these assets.

• We operate in a competitive market and may be unable to successfully identify additional acquisition opportunities or compete for attractive acquisition targets.

Certain provisions of our articles of organization, as well as state and federal banking laws, may make our stock a less attractive investment compared to the stock of peer companies.

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The following risks are not the only risks we face.

Additional risks that are not presently known or that we presently deem to be immaterial also could have a material adverse effect on our financial condition, results

of operations and business.

Additional risks that are not presently known or that we presently deem to be immaterial also could have a material adverse effect on our financial condition, results of operations and business.

Please refer to the note at the beginning of this section for important caveats related to the following risk factors.

Risks Related to Our Acquisition Strategy

The Company may fail to realize all of the anticipated benefits of Cambridge or other acquired businesses, particularly if the integration of the acquired businesses is more difficult than expected.

The Company may fail to realize some or all of the anticipated benefits of Cambridge or other acquired businesses if the integration process takes longer or is more costly than expected.

Risks Related to Acquisitions

The Company may fail to realize all of the anticipated benefits of HarborOne or other acquired businesses, particularly if the integration of the acquired businesses is more difficult than expected.

The Company may fail to realize some or all of the anticipated benefits of HarborOne or other acquired businesses if the integration process takes longer or is more costly than expected.

Furthermore, any number of unanticipated adverse occurrences for either the acquired business or the Company may cause us to fail to realize some or all of the expected benefits.

The integration process, which is ongoing for Cambridge, could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that could adversely affect our ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits of the merger.

The integration process, which is ongoing for HarborOne, could result in the loss of key employees, the disruption of ongoing businesses or inconsistencies in standards, controls, procedures and policies that could adversely affect our ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits of the merger.

Each of these issues might adversely affect the Company during the transition period, resulting in adverse effects on the Company following the merger.

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As a result, revenues may be lower than expected or costs may be higher than expected and the overall benefits of the merger may not be as great as anticipated, any of which could materially and adversely affect our business, financial condition, results of operations, and future prospects.

The Company may be unsuccessful in retaining our personnel or the personnel of the company we acquire.

The success of any merger or other acquisition that we pursue will depend in part on the Company’s ability to retain the talents and dedication of key employees currently employed by the Company and employees who join the Company from the acquired company.

If the Company is unable to retain key employees, including management, who are critical to the successful integration and future operations of the combined company, the Company could face disruptions in its operations, loss of existing customers, loss of key information, expertise or know-how and unanticipated additional recruitment costs.

In addition, if key employees terminate their employment, the Company’s business activities may be adversely affected, and management’s attention may be diverted from successfully integrating the Company and the acquired company to hiring suitable replacements, all of which may cause the Company’s business to suffer.

In addition, the Company may not be able to locate or retain suitable replacements for any key employees who leave the combined company.

The Company has incurred and expects to continue to incur costs related to the acquisition and integration of Cambridge and other businesses.

The Company routinely incurs significant, non-recurring costs when it agrees to acquire other businesses.

The Company may be unsuccessful in retaining personnel.

The success of the acquisition of HarborOne or other previously acquired companies depends in part on the Company’s ability to retain key employees currently employed by the Company and employees who join the Company from the acquired company.

If the Company is unable to retain key employees, including management, who are critical to the successful integration and future operations of the combined company, the Company could face disruptions in its business and operations, loss of existing customers, loss of key information and, expertise and unanticipated additional recruitment costs.

In addition, if key employees terminate their employment, management’s attention may be diverted from successfully integrating the acquired company to hiring suitable replacements, all of which may cause the Company’s business to suffer.

The Company has incurred and expects to continue to incur costs related to the acquisition and integration of HarborOne and other businesses.

The Company incurs significant, non-recurring costs when it agrees to acquire other businesses.

In addition, the Company incurs integration costs following the completion of acquisitions as it integrates the acquired business, including facilities and systems consolidation costs and employment-related costs.

The Company may also incur additional costs to retain key employees of the Company and the acquired business.

The Company may also incur additional costs to retain key employees.

There can be no assurances that the expected benefits and efficiencies related to the integration of the acquired businesses will be realized to offset these transaction and integration costs over time.

Regulatory approvals related to proposed business acquisitions may not be received, may take longer to receive than expected, or may impose burdensome conditions, which could impose additional costs and could delay or prevent completion of the acquisition.

Regulatory approvals required for future business acquisitions, if any, may not be received, may take longer to receive than expected, or may impose burdensome conditions, which could impose additional costs and could delay or prevent completion of the acquisition.

Before a merger or other acquisition may be completed, certain approvals or consents must be obtained from various bank regulatory and other authorities of the United States, the Commonwealth of Massachusetts and the State of New Hampshire.

These governmental entities, including the Federal Reserve Board, the FDIC, the Massachusetts Division of Banks and the New Hampshire Banking Department, may impose conditions on the completion of the transaction or require changes to the terms of the transaction, require divestitures or place restrictions on our conduct after the completion of the transaction.

These governmental entities, including the Federal Reserve Board, the FDIC, the Massachusetts Division of Banks, the New Hampshire Banking Department, and Rhode Island Department of Business Regulation, may impose conditions on the completion of the transaction or require changes to the terms of the transaction, require divestitures or place restrictions on our conduct after the completion of the transaction.

Any such conditions or changes could have the effect of delaying completion of the transaction or imposing additional costs on or limiting the revenues of the Company following the completion of the transaction, any of which might have a material adverse effect on the Company.

The degree of scrutiny that our regulators give to mergers and other acquisitions can change from time to time.

In general, we anticipate that as the Company increases in size and complexity, our proposed mergers and other acquisitions will receive greater regulatory scrutiny and the time that regulators will take to process the applications will increase.

In September 2024, the Department of Justice’s Antitrust Division and the FDIC announced that each respective agency has withdrawn the 1995 Bank Merger Competitive Review Guidelines (the “1995 Guidelines”).

The Department of Justice’s Antitrust Division announced that it will instead evaluate the bank mergers using its 2023 Merger Guidelines that

apply across all industries.

As of the date of this Annual Report on Form 10-K, the Federal Reserve Board has not released any new guidance on its approach to bank merger reviews, nor has it withdrawn from the 1995 Guidelines.

Past statements from the Federal Reserve Board staff indicate that the Federal Reserve Board is not actively planning to alter its approach to bank merger reviews.

The 2023 Merger Guidelines set forth more stringent concentration limits than the 1995 Bank Merger Guidelines.

The 2023 Merger Guidelines provide additional, largely qualitative grounds on which the Department of Justice could object to a transaction beyond traditional local market concentration.

At this time, we are unable to predict whether the actions taken by the FDIC and the Department of Justice will have a material adverse effect on our ability to acquire or merge with banking companies in our market area.

To the extent that we acquire other companies, our business may be negatively impacted by certain risks inherent with such acquisitions.

A significant component of our business strategy is to grow through acquisitions of other financial institutions or business lines as opportunities arise.

Although we have been successful with this strategy in the past, we may not be able to grow our business in the future through acquisitions for a number of reasons, including:

• Competition with other prospective buyers resulting in our inability to complete an acquisition or in our paying a substantial premium over the fair value of the net assets of the acquired business;

Though we are not focused on acquisitions, if in the future we acquire other companies, our business may be negatively impacted by certain risks inherent with such acquisitions.

A significant component of our historic growth has been through acquisitions of other financial institutions or business lines.

We may not be able to grow our business in the future through acquisitions for a number of reasons, including:

• Market conditions and the attractiveness of acquisition opportunities compared to other uses of capital;

• Competition with other prospective buyers resulting in our inability to undertake an acquisition at an acceptable price or in our paying a substantial premium over the fair value of the net assets of the acquired business;

• Inability to obtain regulatory or shareholder approvals, delays in obtaining regulatory approvals;

or the imposition of costly or burdensome conditions to regulatory approvals;

• Potential difficulties and/or unexpected expenses relating to the integration of the operations, technologies, products and the key employees of the acquired business, resulting in the diversion of resources from the operation of our existing business;

• Acquisitions of new lines of business may present risks that are different in kind or degree compared to those that we are accustomed to managing, requiring us to implement new or enhance existing procedures and controls and diverting resources from the operation of our existing business;

• Potential difficulties relating to the integration of the operations, technologies, products and the key employees or management of the acquired business, resulting in the diversion of resources from the operation of our existing business;

• Acquisitions of new lines of business may present risks that are different from those that we are accustomed to managing, requiring us to implement new or enhanced procedures and controls and diverting resources from the operation of our existing business;

• Inability to maintain existing customers of the acquired business or to sell the products and services of the acquired business to our existing customers;

• Inability to retain key management of the acquired business;

• Assumption of or potential exposure to significant liabilities of the acquired business, some of which may be unknown or contingent at the time of acquisition, including, without limitation, liabilities for regulatory and compliance issues;

• Assumption of or potential exposure to significant liabilities of the acquired business, some of which may be unknown or contingent at the time of acquisition;

• Exposure to potential asset quality issues of the acquired business;

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Moreover, acquisitions typically involve the payment of a premium over book and market values, and therefore, some dilution of our tangible book value and net income per share may occur in connection with any future transaction.

We may be unsuccessful identifying and competing for acquisitions.

We regularly look for acquisition opportunities of banks and financial institutions that meet our criteria, some of which may be material to our business and financial performance and could involve significant cash expenditures or result in a material increase in the number of shares of our common stock that are outstanding.

We face competition from other financial services institutions, some of which may have greater financial resources than us, when considering acquisition opportunities.

Accordingly, attractive opportunities may not be available to us, and there can be no assurance that we will be successful in identifying, completing or integrating future acquisitions.

We may not be able to acquire other institutions on acceptable terms.

The ability to grow may be limited if we are unable to successfully make acquisitions in the future.

Risks Related to Our Business and Our Industry Generally

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Our net interest income and our earnings would be similarly affected if the interest rates on our interest earning assets declined at a faster pace than the interest rates on our interest-bearing liabilities.

The fair values of our investment portfolio can be adversely affected by changes in interest rates or expectations of changes, and inflation rates or expectations of inflation, among other factors.

The FOMC may and often does change its view as to whether the federal funds rate target band should increase or decrease and the rate at which such change should occur.

The FOMC decreased the federal funds rate by 50 basis points to a target range of 4.75% to 5.00% in September 2024 and by 25 basis points in November and December, reducing the federal funds rate target band at year end to 4.25% from 4.50%.

However, in December 2024, the FOMC revised its outlook for rate cuts in 2025, indicating that FOMC members anticipated two reductions in 2025 instead of the four reductions that the FOMC members anticipated in September 2024.

Powell, Chairman of the Board of Governors of the Federal Reserve System, stated in December 2024 that after the FOMC decreased the federal funds rate target band in 2024 by a total of 100 basis points, the FOMC could be more cautious as it considers further adjustments, emphasizing that in considering the extent and timing of additional adjustments to the target range for the federal funds rate, the FOMC will assess future economic data.

Chairman Powell further explained in December 2024 that if the United States economy remains strong and inflation does not continue to move sustainably toward the FOMC’s 2% target, the FOMC could decide to slow the pace at which it chooses to reduce the federal funds rate target band, but alternatively if the labor market were to weaken unexpectedly or inflation were to decline more quickly than anticipated, the FOMC could choose to accelerate the pace at which it chooses to reduce the federal funds rate target band.

Higher interest rates generally are associated with a lower volume of loan originations and refinancings, while lower interest rates are usually associated with higher loan originations and refinancings.

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Generally, in rising interest rate environments, loan prepayment rates are likely to decline, and in falling interest rate environments, loan prepayment rates are likely to increase.

A significant amount of our commercial and industrial and commercial real estate, including multi-family residential real estate loans, are adjustable-rate loans and an increase in the general level of interest rates may adversely affect the ability of borrowers, especially those with adjustable rate loans, to pay their loan obligations.

their loan obligations.

Changes in interest rates, prepayment speeds and other factors may also cause the value of our loans held for sale to change.

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The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in the local economy.

We primarily serve individuals, businesses and municipalities located in eastern and central Massachusetts, including the greater Boston metropolitan area, southern New Hampshire, including its coastal region, and northern Rhode Island.

At December 31, 2025, approximately $16.7 billion, or 89.6% of our total loans secured by real estate were secured by real estate located in this market area.

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In addition, deflationary pressures, if present, while possibly lowering our operating costs, could have a significant negative effect on our borrowers, especially our business borrowers, and the values of underlying collateral securing loans, which could negatively affect our financial performance.

If economic conditions worsen or volatility increases, our business, financial condition and results of operations could be materially adversely affected.

If economic conditions worsen or volatility increases,

our business, financial condition and results of operations could be materially adversely affected.

For more information about our market area, please see the “Business” section included in Part I, Item 1 in this Annual Report on Form 10-K.

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This is done, in part, by recruiting, hiring and retaining employees who share our core values of being an integral part of the communities we serve, delivering superior service to our customers and caring about our customers and associates.

If our reputation is negatively affected by the actions of our employees, by our inability to conduct our

operations in a manner that is appealing to current or prospective customers, or by events beyond our control, our business and operating results may be adversely affected.

If our reputation is negatively affected by the actions of our employees, by our inability to conduct our operations in a manner that is appealing to current or prospective customers, or by events beyond our control, our business and operating results may be adversely affected.

Threats to our reputation can come from many sources, including adverse sentiment about financial institutions generally, the perception of unethical practices, employee misconduct, failure to deliver minimum standards of service or quality, compliance deficiencies, cybersecurity breaches and questionable or fraudulent activities of our customers.

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In its report, the Financial Stability Board noted that the repetition of information in social media, which users experience through the re-posting or liking of other people’s posts, can reinforce a message and may make the message more believable.

We face continuing and growing security risks to our information data bases, including information we maintain relating to our customers.

We face continuing and growing security risks to our information systems including information we maintain relating to our customers.

We are subject to certain operational risks, including data processing system failures and errors, inadequate or failed internal processes, customer or employee fraud and catastrophic failures resulting from terrorist acts or natural disasters.

We rely on electronic communications and information systems to conduct our business and to store sensitive data, including financial information regarding customers.

Our electronic communications and information systems infrastructure, as well as the systems infrastructures of the vendors we use, are inherently vulnerable to unauthorized access, human error, computer viruses, denial-of-service attacks, malicious code, spam attacks, phishing, ransomware or other forms of social engineering and other events that could impact the security, reliability, confidentiality, integrity and availability of our systems or those of our vendors.

Financial services institutions and companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disable or degrade service or sabotage systems, often through the introduction of computer viruses or malware, cyber-attacks and other means.

Our electronic communications and information systems infrastructure, as well as the systems infrastructures of the vendors we use, may be vulnerable to unauthorized access, human error, computer viruses, denial-of-service attacks, malicious code, spam attacks, phishing, ransomware or other forms of social engineering and other events that could impact the security, reliability, confidentiality, integrity and availability of our systems or those of our vendors.

Financial services institutions and companies engaged in data processing have reported breaches in the security of their systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disable or degrade service or sabotage systems.

Denial of service attacks have been launched against a number of large financial services institutions.

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Cyber threats are rapidly evolving, and we may not be able to anticipate or prevent all such attacks.

For example, a type of artificial intelligence program (AI) known as “Agentic AI” has further exacerbated risks by allowing bad actors to more easily use sophisticated and iterative methods of facilitating fraud through the creation of synthetic identities and “deepfake” images and documentation.

Although to date we have not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future.

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A failure or circumvention of our security systems could have a material adverse effect on our business operations and financial condition.

We regularly assess and test our security systems and disaster preparedness, including back-up systems, but the risks are substantially escalating.

We are not able to fully protect against these events given the rapid evolution of new vulnerabilities, the complex and distributed nature of our systems, our interdependence on the systems of other companies and the increased sophistication of potential attack vectors and methods against our systems.

We regularly assess and test our security systems and disaster preparedness, including back-up systems, but the risks are continually escalating.

We may not be able to fully protect against these events given the rapid evolution of new vulnerabilities, the complex and distributed nature of our systems, our interdependence on the systems of other companies and the increased sophistication of potential attack vectors and methods against our systems.

As a result, cybersecurity and the continued enhancement of our controls and processes to protect our systems, data and networks from attacks, unauthorized access or significant damage remain a priority.

Accordingly, we may be required to expend additional resources to enhance our protective measures or to investigate and remediate any information security vulnerabilities or exposures.

Any breach of our system security could result in disruption of our operations, unauthorized access to confidential customer information, significant regulatory costs, such as enforcement actions and/or the imposition of civil money penalties, litigation exposure and other possible damages, loss or liability.

other possible damages, loss or liability.

Such costs or losses could exceed the amount of available insurance coverage, if any, and would adversely affect our earnings.

Also, any failure to prevent a security breach or to quickly and effectively deal with such a breach could cause reputational harm, negatively impact customer confidence, undermine our ability to attract and keep customers, and possibly result in regulatory sanctions.

Technology has lowered barriers to entry and made it possible for non-banks to offer products and services that traditionally were banking products, and made it possible for technology companies to compete with financial institutions in providing electronic, internet-based, and mobile phone-based financial solutions.

Competition with non-banks, including technology companies, to provide financial products and services is intensifying.

In particular, the activity of fintechs has grown significantly over recent years and is expected to continue to grow.

Fintechs have and may continue to offer bank or bank-like products.

Federal and state bank regulatory agencies have demonstrated a willingness to permit non-traditional bank charters for fintechs, which increases competition in the industry.

In addition, other fintechs, through commercials relationships with existing banks, offer deposit-like products to their customers under current and proposed interagency guidelines on third party relationships.

In addition, large technology companies have begun to make efforts toward providing financial services directly to their customers and are expected to continue to explore new ways to do so.

Many of these companies have fewer regulatory constraints, and some have lower cost structures, in part due to the lack of physical locations and regulatory compliance costs.

Some of these companies also have greater resources to invest in technological improvements than we currently have.

In addition to external competition, as described below, the financial services industry, including the banking sector, is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.

New, unexpected technological changes could have a disruptive effect on the way banks offer products and services.

We believe our success depends on our ability to use technology to offer products and services that provide convenience to customers and to create additional efficiencies in our operations.

However, we may not be able to keep up with the rapid pace of technological changes or be successful in marketing these products and services to our customers.

As a result, our ability to compete effectively to attract or retain new business may be impaired, and our business, financial condition or results of operations may be adversely affected.

We may not be able to successfully implement future information technology system enhancements, or such implementations could be delayed materially, which could adversely affect our business operations and profitability.

We invest significant resources in information technology system enhancements in order to provide functionality and security at an appropriate level.

We may not be able to successfully implement and integrate future system enhancements, or such implementations could be delayed materially, or could become obsolete quickly due to the increasing rates of technological innovation, which could adversely impact our ability to meet our legal and regulatory requirements, which could result in regulatory fines.

In addition, future system enhancements could have higher than expected costs and/or result in operating inefficiencies, which could increase implementation and ongoing operational costs.

Failure to optimize future system enhancements could result in impairment charges that adversely impact our financial condition and results of operations.

In addition, we may incur significant training, licensing, maintenance, consulting and amortization expenses during and after systems enhancements or implementations.

References in this Annual Report to “AI” refer to both Generative AI and Agentic AI, unless otherwise specified.

Generative AI, sometimes called gen AI, is a type of AI that can create original content in response to a user’s prompt or request.

AI is an emerging technology that presents both opportunities and risks to our business.

While the use of AI is not currently material to our operations, its increasing use is subject to risks that algorithms and datasets are flawed or may be insufficient, poorly suited to purpose or contain biased information.

The models used and results generated by AI and machine learning are not always transparent, which could increase the risk of unintended deficiencies.

These deficiencies could result in inaccurate or ineffective decisions, predictions or analyses, which could subject our business to competitive harm, legal liability, increased regulatory scrutiny, reputational harm or other consequences that we may not be able to predict, any of which could negatively affect our business, financial condition and results of operations.

Governmental regulation of AI is rapidly evolving as federal and state legislators and regulators are increasingly focused on these powerful emerging technologies.

The technologies underlying AI are subject to a variety of laws and regulations, including but not limited to intellectual property, data privacy and cybersecurity, and are expected to be subject to new laws and regulations or new applications of existing laws and regulations.

AI is the subject of ongoing review by various U.S.

governmental and regulatory agencies, and various U.S.

states are applying, or are considering applying, existing laws and regulations to AI or are considering general legal frameworks for AI.

To the extent technology that we utilize now or in the future does or will incorporate AI, we may not be able to anticipate how to respond to these evolving frameworks, and we may need to expend resources to adjust our operations or offerings in certain jurisdictions if the legal frameworks are inconsistent across jurisdictions.

Moreover, because AI technology itself is highly complex and rapidly developing, it is not possible to predict all of the legal, operational or technological risks that may arise relating to the use of AI.

Our failure to keep pace with technological innovation, to successfully implement enhanced and emerging technologies or to fully realize their benefits could have a material adverse impact on our business, financial condition and results of operations.

We rely on third-party vendors, which could expose us to additional cybersecurity risks.

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Although we require third-party providers to maintain certain levels of information security, such providers may remain vulnerable to operational and technology vulnerabilities, including cyber-attacks, security breaches, unauthorized access, breaches, fraud, phishing attacks, misuse, computer viruses, or other malicious attacks, which could result in unauthorized access, misuse, loss or destruction of data, an interruption in service or other similar events that may impact our business.

Although we may contractually limit

liability in connection with attacks against third-party providers, we remain exposed to the risk of loss associated with such vendors.

Although we may contractually limit liability in connection with attacks against third-party providers, we remain exposed to the risk of loss associated with such vendors.

In addition, a number of our vendors are large national entities with dominant market presence in their respective fields.

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Failures of certain vendors to provide contracted services could adversely affect our ability to deliver products and services to customers and cause us to incur significant expenses.

We also expect our third-party service providers to increasingly incorporate AI capabilities into their product offerings;

our third-party risk management framework may be inadequate to fully mitigate the associated risks.

Industry competition may adversely affect our degree of success.

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As a result, our ability to effectively compete to retain or acquire new business may be impaired, and our business, financial condition or results of operations may be adversely affected.

Technology has lowered barriers to entry and made it possible for non-banks to offer products and services, that traditionally were banking products, and made it possible for technology companies to compete with financial institutions in providing electronic, internet-based, and mobile phone-based financial solutions.

Competition with non-banks, including technology companies, to provide financial products and services is intensifying.

In particular, the activity of fintechs has grown significantly over recent years and is expected to continue to grow.

Fintechs have and may continue to offer bank or bank-like products.

The federal and state bank regulatory agencies have demonstrated a willingness to charter non-traditional bank charter applicants, such as fintechs, which increases competition in the industry.

In addition, other fintechs have partnered with existing banks to allow them to offer deposit products to their customers under current and proposed interagency guidelines on third party relationships.

Regulatory changes, such as revisions to the FDIC’s rules on brokered deposits intended to reflect recent technological changes and innovations, may also make it easier for fintechs to partner with banks and offer deposit products.

In addition to fintechs, the large technology companies have begun to make efforts toward providing financial services directly to their customers and are expected to continue to explore new ways to do so.

Many of these companies, including our competitors, have fewer regulatory constraints, and some have lower cost structures, in part due to lack of physical locations and regulatory compliance costs.

Some of these companies also have greater resources to invest in technological improvements than we currently have.

In addition to external competition, the financial services industry, including the banking sector, is continually undergoing rapid technological change with frequent introductions of new technology-driven products and services.

In addition, new, unexpected technological changes could have a disruptive effect on the way banks offer products and services.

We believe our success depends, to a great extent, on our ability to use technology to offer products and services that provide convenience to customers and to create additional efficiencies in our operations.

However, we may not be able to, among other things, keep up with the rapid pace of technological changes, effectively implement new technology-driven products and services or be successful in marketing these products and services to our customers.

As a result, our ability to compete effectively to attract or retain new business may be impaired, and our business, financial condition or results of operations may be adversely affected.

We may not be able to successfully execute our strategic plan or achieve our performance targets.

An important goal of our strategic plan is expanding our profitable loan and deposit market share through both organic growth and opportunistic strategic transactions.

An important goal of our strategic plan is expanding our profitable loan and deposit market share through organic growth and if appropriate, opportunistic transactions.

(For a more complete discussion of our strategic plan, please see the “Business” section included in Part I, Item 1 in this Annual Report on Form 10-K.) It is possible that one or more factors, including factors outside of our control, may hinder or prevent us from achieving our growth objectives.

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Our business strategy includes projected growth in our core businesses, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively.

Despite recent challenges within the banking sector, we expect to experience growth in the amount of our assets, the level of our deposits and the scale of our operations.

We expect to experience growth in the amount of our assets, the level of our deposits and the scale of our operations.

Achieving our growth targets requires us to attract customers that currently bank at other financial institutions in our market, thereby increasing our share of the market.

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If we do not manage our growth effectively, our financial condition and operating results could be negatively affected.

Actions of activist shareholders could cause us to incur substantial costs, divert management’s attention and resources and have an adverse effect on our business.

Activist shareholders may from time to time engage in proxy solicitations, advance shareholder proposals or otherwise attempt to effect changes or acquire control over us.

For example, on October 20, 2025, HoldCo Asset Management (“HoldCo”), an activist investor, published a presentation in which it criticized the Company’s past capital allocation, financial and operational performance and governance, and reported that it owned approximately 3.1% of our outstanding common stock.

HoldCo published additional presentations critical of the Company, its management team and the Board.

While we value constructive input from investors and regularly engage in dialogue with our shareholders, and we welcome their views and opinions, the actions or proposals from activist shareholders may not align with our business strategy or with the interests of our shareholders.

Because our Board and management team are committed to acting in the best interests of all of our shareholders, there is no assurance that the actions taken by the Board and management in seeking to maintain constructive engagement with certain shareholders will be successful in preventing the occurrence of shareholder activist campaigns.

Campaigns by activist shareholders to effect changes at publicly traded companies often demand that companies undertake or pursue financial restructuring, increase debt, issue special dividends, repurchase shares, or undertake sales of assets or other transactions, including strategic transactions.

Campaigns may also be initiated by activist shareholders advocating for particular social causes.

Activist shareholders who disagree with the composition of a publicly traded company’s board of directors, or with its strategy or management team, often seek to involve themselves in the governance and strategic direction of a company through various activities that range from private engagement to publicity campaigns, proxy contests, efforts to force transactions not supported by the company’s board, and in some instances, litigation.

Responding to any actual or threatened proxy contest , and any other actions by activist shareholders, will be costly and time-consuming and will divert the attention of our Board, management team and employees from the management of our operations and the pursuit of our business strategies.

Further, actions of activist shareholders may cause fluctuations in our stock price based on temporary or speculative market perceptions or other factors that do not necessarily reflect the underlying fundamentals and prospects of our business.

Perceived uncertainties as to our future direction, strategy or leadership created as a consequence of activist shareholder initiatives may result in the loss of potential business opportunities and make it more difficult to attract and retain investors, customers, employees, qualified directors and officers and business partners.

Also, we will be required to incur significant expenses related to any activist shareholder matters (including legal fees, fees for financial advisors, fees for public relation advisors and proxy solicitation expenses).

If individuals with a specific agenda are elected or appointed to our Board, it may adversely affect our ability to effectively and timely implement our strategic plan and maximize value for our shareholders.

Furthermore, if individuals are elected or appointed to our Board who do not agree with our strategic plan, the ability of our Board to function effectively could be adversely affected.

As a result, activist shareholder campaigns could adversely affect our business, liquidity, results of operations, financial condition and share price.

We could fail to attract, retain or motivate highly skilled and qualified personnel, including our senior management, other key employees or members of our Board, which could impair our ability to successfully execute our strategic plan and otherwise adversely affect our business.

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Accordingly, our ability to implement our strategic plan and our future success depends on our ability to attract, retain and motivate highly skilled and qualified personnel, including our senior management and other key employees and directors.

The failure to attract or retain, including as a result of an untimely death or illness of key personnel, or ability to replace a sufficient number of appropriately skilled and key personnel, could place us at a significant competitive disadvantage and prevent us from successfully implementing our strategy, which could impair our ability to implement our strategic plan successfully, achieve our performance targets and otherwise have a material adverse effect on our business, financial condition and results of operations.

Limitations on the manner in which regulated financial institutions, such as us, can compensate their officers and employees may make it more difficult for such institutions to compete for talent with financial institutions and other companies not subject to these or similar limitations.

The failure to attract or retain, including as a result of an untimely death or illness of key personnel, or ability to replace a sufficient number of appropriately skilled key personnel, could place us at a significant competitive disadvantage and prevent us from successfully implementing our strategy, which could impair our ability to implement our strategic plan successfully, achieve

our performance targets and otherwise have a material adverse effect on our business, financial condition and results of operations.

Limitations on the manner in which regulated financial institutions like us can compensate their officers and employees may make it more difficult for such institutions to compete for talent with financial institutions and other companies not subject to these or similar limitations.

If we are unable to compete effectively, our business, financial condition and results of operations could be adversely affected, perhaps materially.

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These balloon payments may require the borrower to either sell or refinance the underlying property in order to make the balloon payment, which may increase the risk of default or non-payment.

In addition, because of the risks associated with commercial loans, including the economic stress in our market due to the COVID-19 pandemic, the increasing prevalence of hybrid and remote work, and a higher interest rate environment than existed when loans were first originated, we may experience higher rates of default than if the portfolio were more heavily weighted toward residential mortgage loans.

In addition, because of the risks associated with commercial loans, including the continued prevalence of hybrid and remote work, and a higher interest rate environment than existed when loans were first originated, as well as changes in the law or regulations that could increase credit risk, such as a proposed ballot initiative in Massachusetts that would cap annual rent increases, we may experience higher rates of default than if the portfolio were more heavily weighted toward residential mortgage loans.

Higher rates of default could have an adverse effect on our financial condition and results of operations.

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At December 31, 2025, loans secured by one- to four-family residential real estate were $7.2 billion, or 31.4% of total loans.

Loans secured by one- to four-family residential real estate include residential real estate mortgages, home equity loans and lines of credit and investment real estate loans secured by one- to four-family residential properties.

Loans secured by one- to four-family residential real estate include residential real estate mortgages, home equity

loans and lines of credit and investment real estate loans secured by one- to four-family residential properties.

At December 31, 2025, $254.9 million of one- to four-family residential real estate loans were part of the commercial loan portfolio.

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When we acquire a business, a portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable intangible assets.

The excess of the purchase price over the fair value of the net identifiable tangible and

intangible assets acquired determines the amount of the purchase price that is allocated to goodwill acquired.

As of December 31, 2025, goodwill and other identifiable intangible assets were $1.3 billion.

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Our ability to raise additional capital will depend, for example, on conditions in the capital markets at that time, which are outside our control, and on our financial condition and our recent operating results at that time and expectations regarding our future operating results.

If we are unable to raise additional capital on terms that are acceptable to us or at all, our operations or our financial condition and liquidity could be materially and adversely affected, and we may be subject to adverse

regulatory action.

Additionally, if we raise capital through the issuance of common stock or other securities, it could adversely impact the ownership interests or create rights senior to those of existing shareholders or dilute the per share value of our common stock.

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As a participant in the financial services industry, it is likely that we could experience a high level of litigation related to our businesses and operations.

There could be substantial cost and management diversion in such litigation and proceedings, and any adverse determination could have a materially adverse effect on our business, brand or image, or our financial condition and results of our operations.

Our businesses and operations are also subject to increasing regulatory oversight and scrutiny, which may lead to additional regulatory investigations or enforcement actions.

There could be substantial cost and management diversion in such litigation and proceedings, and any adverse determination could have a materially adverse effect on our business, reputation or brand, or our financial condition and results of our operations.

Our businesses and operations are also subject to significant regulatory oversight and scrutiny, which may lead to additional regulatory investigations or enforcement actions.

These and other initiatives from federal and state officials may subject us to further judgments, settlements, fines or penalties, or cause us to be required to restructure our operations and activities, all of which could lead to reputational issues, or higher operational costs, thereby reducing our revenue.

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The loss of deposits or a change in deposit mix could increase our cost of funding and our funding sources may prove insufficient to replace deposits at maturity and support our future growth.

Our funding costs increased materially beginning in 2022 and may continue to increase if our deposits decline and we are forced to replace them with more expensive sources of funding, if clients shift their deposits into higher cost products, or if we raise interest rates to avoid losing deposits.

Increases to the federal funds rate in 2022 and 2023, and competitor and customer responses to those increases, have caused and potentially may cause competitive pressures to provide elevated deposit interest rates.

Our funding costs may increase if our deposits decline and we are forced to replace them with more expensive sources of funding, if clients shift their deposits into higher cost products, or if we raise interest rates to avoid losing deposits.

Changes to the federal funds rate, and competitor and customer responses to those changes, potentially may cause competitive

pressures to increase our deposit interest rates.

The reduction in our overall level of deposits has increased and could continue to increase the extent to which we rely on other, more expensive sources for funding.

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We have undertaken and may continue to undertake measures to mitigate market-wide competitive deposit pressures or interest rate uncertainty or to otherwise manage our liquidity position.

These have included and may

continue to include accessing alternative funding sources, such as FHLBB advances and brokered certificates of deposit, as noted above.

These have included and may continue to include accessing alternative funding sources, such as FHLBB advances and brokered certificates of deposit, as noted above.

Our investment portfolio also provides a potential source of liquidity that we have from time to time elected to and may continue to access.

Due to the increase in interest rates, the fair value of our available for sale investment portfolio has declined in value since our initial purchase, resulting in a net unrealized loss position.

We have in the past elected to sell a significant amount of investment securities with substantial unrealized losses, and we may choose to do so from time to time in the future.

In that event, we would recognize a loss and take a charge to our operating results in the quarter in which a decision to sell such securities is made.

We have in the past elected to sell a significant amount of investment securities with substantial unrealized losses;

in the event we do so in the future, we would recognize a loss and take a charge to our operating results in the quarter in which a decision to sell such securities is made.

Deterioration in the performance or financial position of the Federal Home Loan Bank of Boston might restrict the Federal Home Loan Bank of Boston’s ability to meet the funding needs of its members, cause a suspension of its dividend and cause its stock to be determined to be impaired.

Significant components of Eastern Bank’s liquidity needs are met through its access to funding pursuant to its membership in the Federal Home Loan Bank of Boston.

The Federal Home Loan Bank of Boston is a cooperative that provides services to its member banking institutions.

Any deterioration in the Federal Home Loan Bank of Boston’s performance or financial condition may affect our ability to access funding and/or require us to deem the required investment in Federal Home Loan Bank of Boston stock to be impaired.

If we are not able to access funding through the Federal Home Loan Bank of Boston, we may not be able to meet our liquidity needs, or we may need to rely more heavily on more expensive funding sources, either of which could have an adverse effect on our results of operations or financial condition.

Similarly, if we deem all or part of our investment in Federal Home Loan Bank of Boston stock impaired, such action could have a material adverse effect on our results of operations or financial condition.

We invest significant resources in information technology system enhancements in order to provide functionality and security at an appropriate level.

We may not be able to successfully implement and integrate future system enhancements, or such implementations could be delayed materially, which could adversely impact the ability to provide timely and accurate financial information in compliance with legal and regulatory requirements, which in turn could result in sanctions from regulatory authorities.

Such sanctions could include fines and suspension of trading in our stock, among others.

In addition, future system enhancements could have higher than expected costs and/or result in operating inefficiencies, which could increase the costs associated with the implementation as well as ongoing operations.

Failure to optimize system enhancements that are implemented in the future could result in impairment charges that adversely impact our financial condition and results of operations and could result in significant costs to remediate or replace the defective components.

In addition, we may incur significant training, licensing, maintenance, consulting and amortization expenses during and after systems implementations, and any such costs may continue for an extended period of time.

Significant components of Eastern Bank’s liquidity needs are met through its access to funding pursuant to its membership in the Federal Home Loan Bank of Boston (“FHLBB”).

The FHLBB is a cooperative that provides services to its member banking institutions.

Any deterioration in the FHLBB’s performance or financial condition may affect our ability to access funding and/or require us to deem the required investment in FHLBB stock to be impaired.

If we are not able to access funding through the FHLBB, we may not be able to meet our liquidity needs, or we may need to rely more heavily on more expensive funding sources, either of which could have an adverse effect on our results of operations or financial condition.

Similarly, if we deem all or part of our investment in FHLBB stock impaired, such action could have a material adverse effect on our results of operations or financial condition.

We rely on other companies to provide key components of our business infrastructure.

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We intend to utilize all tax credits, as of December 31, 2025, to offset income tax liability.

Substantially all of these tax credits are related to development projects that are subject to ongoing compliance requirements over certain periods of time to fully realize their value.

If these projects are not operated in full compliance with the required terms, the tax credits could be subject to

recapture or restructuring.

Substantially all of these tax credits are

related to development projects that are subject to ongoing compliance requirements over certain periods of time to fully realize their value.

If these projects are not operated in full compliance with the required terms, the tax credits could be subject to recapture or restructuring.

Further, we may not be able to utilize any future tax credits.

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Third parties have made, and may make, claims of infringement against us with respect to our services or business.

Any claim from third parties may result in a limitation on our ability to use the intellectual property subject to these claims.

Even if we believe that intellectual property related claims are without merit, defending against such claims is time consuming and expensive and could result in the diversion of the time and attention of our management and employees.

Any claim from a third party may result in a limitation on our ability to use the intellectual property subject to that claim.

Even if we believe that any intellectual property related claim is without merit, defending against such claim often is time consuming and expensive and could result in the diversion of the time and attention of our management and employees.

Claims of intellectual property infringement also might require us to redesign affected services, enter into costly settlement or license agreements, pay costly damage awards, or face a temporary or permanent injunction prohibiting us from marketing or selling certain of our services.

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A significant natural disaster, such as a hurricane, earthquake, fire or flood, could have a material adverse impact on our local market area and ability to conduct business, and our insurance coverage may be insufficient to compensate for losses that may occur.

Public health crises, such as pandemics and epidemics (including a possible resurgence of the COVID-19 virus or the possible emergence of the H5 avian influenza), domestic or geopolitical crises, such as terrorism, military conflict, wars or the perception that hostilities may be imminent, political instability or civil unrest, or other conflict, human error or other events outside of our control, could cause disruptions to our business or the United States economy as a whole, and our business and operating results could suffer.

Public health crises, such as pandemics and epidemics, domestic or geopolitical crises, such as terrorism, military conflict, wars or the perception that hostilities may be imminent, political instability or civil unrest, or other conflict, human error or other events outside of our control, could cause disruptions to our business or the United States economy as a whole, and our business and operating results could suffer.

The occurrence of any such event could have a material adverse effect on our business, operations and financial condition.

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Chronic results of climate change such as shifting weather patterns could also cause disruption to our business and operations.

Rising sea levels projected for the coastal regions of Massachusetts and New Hampshire could adversely affect our business.

We believe that progressively rising sea levels will be an area of risk over time for the coastal regions of Massachusetts and New Hampshire in our market, both as the frequency and severity of extreme weather events increase and as

currently inhabited property and land parcels are exposed to episodic flooding and routinely higher tides.

The increase in the relative sea level in Boston, as a coastal city, and other coastal regions of Massachusetts and New Hampshire in our market is expected to result in higher coastal surges during storm events and, when considered with projected increases in precipitation intensities, an increase in stormwater flooding.

Rising sea levels projected for the coastal regions of Massachusetts, New Hampshire, and Rhode Island could adversely affect our business.

We believe that progressively rising sea levels will be an area of risk over time for the coastal regions of Massachusetts, New Hampshire, and Rhode Island in our market, both as the frequency and severity of extreme weather events increase and as currently inhabited property and land parcels are exposed to episodic flooding and routinely higher tides.

The increase in the relative sea level in Boston, as a coastal city, and other coastal regions of Massachusetts, New Hampshire, and Rhode Island in our market is expected to result in higher coastal surges during storm events and, when considered with projected increases in precipitation intensities, an increase in stormwater flooding.

These effects in Boston and similar conditions elsewhere in our market area may adversely affect the value of commercial and residential properties that secure some of our loans and may adversely affect economic develop in portions of our market area.

Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers.

Concerns over the long-term impacts of climate change have led and will continue to lead to governmental efforts around the world to mitigate those impacts, and consumers and businesses also may change their behavior as a result of these concerns.

Concerns over the long-term impacts of climate change have led and may continue to lead to governmental efforts around the world to mitigate those impacts, and consumers and businesses also may change their behavior as a result of these concerns.

Eastern Bank and its customers will need to respond to new laws and regulations as well as consumer and business preferences resulting from climate change concerns, which could involve cost increases, asset value reductions, operating process changes, and the like.

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Risks arising from ESG matters may adversely affect, among other things, our reputation and the trading price of our common stock.

As a financial institution with a diverse base of customers, vendors and suppliers, we may face potential negative publicity based on the identity of those we choose to do business with.

As a financial institution with a diverse base of customers, vendors and suppliers, we may face potential negative publicity based on the identity of those we do business with.

If our relationships with our customers, vendors and suppliers were to become the subject of negative publicity, our ability to attract and retain customers and employees may be negatively impacted and our stock price may also be impacted.

Additionally, many investors now consider how corporations are addressing ESG matters when making investment decisions, such as the business risks of climate change and the adequacy of companies’ responses to climate change and other ESG matters.

Additionally, some investors consider how corporations are addressing ESG matters when making investment decisions, such as the business risks of climate change and the adequacy of companies’ responses to climate change and other ESG matters.

These shifts in investing priorities may result in adverse effects on the trading price of our common stock if investors believe that we do not sufficiently address ESG matters in accordance with their or third-party standards for evaluating ESG matters.

Further, our regulators, including the SEC, may adopt regulations related to ESG matters that could require the collection, assessment, and reporting of extensive data, including emissions-related data, in categories and formats that are novel to us.

Although we have begun considering and developing various measures to address potential future regulatory requirements, these measures may not be sufficient in every instance to ensure full compliance with such requirements.

The prevalence of remote and hybrid working arrangements has reduced demand for office space in our market.

The COVID-19 pandemic caused many employers to shift to remote and/or hybrid workforce arrangements in which employees work from their homes instead of going into their employers’ offices.

Remote and/or hybrid work patterns may have long-term implications for how many businesses successfully operate and, in turn, their need for leased office space.

The COVID-19 pandemic caused many employers to shift to remote and/or hybrid workforce arrangements, and, following the COVID-19 pandemic, many employers have since implemented ordinary course remote or hybrid work policies.

This shift to partial or fully remote office and work environments may have long-term implications for how many businesses successfully operate and, in turn, their need for leased office space.

A reduction in the need for office space could result in a reduction in our loan demand and/or in our customers’ ability to repay their loans, which, in turn, may have an adverse effect on our business and results of operations.

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government securities, adjustments of the discount rate and changes in banks’ reserve requirements against bank deposits and the interest rate paid on such reserves.

These instruments are used in varying combinations to influence overall economic growth and the distribution of credit, bank loans, investments and deposits.

These instruments are used in varying combinations to

influence overall economic growth and the distribution of credit, bank loans, investments and deposits.

Their use also affects interest rates charged on loans or paid on deposits.

The monetary and related policies of the Federal Reserve Board have had a significant effect on the operating results of financial institutions in the past and are expected to continue to do so in the future.

Changes in any of these policies are influenced by macroeconomic conditions and other factors that are beyond Eastern Bank’s control and the effects of such policies upon our business, financial condition and results of operations cannot be predicted.

Changes in any of these policies are influenced by macroeconomic conditions and other factors that are beyond Eastern Bank’s control, including the composition of the FOMC.

Members of the Federal Reserve Board serve staggered, 14-year terms, and the Chair and Vice Chairs of the Federal Reserve Board serve 4-year renewable terms.

The effects of monetary and related policies as well as membership of the Federal Reserve Board upon our business cannot be predicted.

Our business is highly regulated, which could limit or restrict our activities and impose financial requirements or limitations on the conduct of our business.

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The Consumer Financial Protection Bureau, the Department of Justice and other federal and state agencies are responsible for enforcing these federal laws and regulations and comparable state provisions.

Various federal banking agencies have recently completed significant changes to their respective Community Reinvestment Act regulations.

Federal, state, or local consumer lending laws may restrict our ability to originate certain mortgage loans or increase our risk of liability with respect to such loans.

A successful regulatory challenge to an institution’s performance under the Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Housing Act or other fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions, restrictions on expansion and restrictions on entering new business lines.

on expansion and restrictions on entering new business lines.

Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation.

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The FDIC has established a long-term deposit insurance reserve ratio of 2% and thus seeks to fund the DIF at 2% of estimated deposits.

In September 2020, the FDIC adopted a restoration plan designed to ensure that the DIF reserve ratio reaches 1.35% by September 2028.

In October 2022, the FDIC increased the initial base deposit insurance assessment rate schedules for all FDIC insured depository institutions by 2 basis points, beginning with the quarterly assessment period ending March 31, 2023.

The new base assessment rate schedules will remain in effect unless and until the DIF reserve ratio meets or exceeds 2%, absent further FDIC action.

The FDIC also imposed a special assessment arising out of the banking crisis in early 2023, for which we expensed approximately $10.8 million in total in the fourth quarter of 2023.

In February 2024, the FDIC updated the estimated loss related to the banking crisis to $20.4 billion, an increase from its original estimate of $16.3 billion.

Accordingly, based on the FDIC’s modified loss estimate, we experienced an increase in special assessment expense in June 2024 of $1.9 million.

Deposit insurance assessment rates are subject to change, and additional increases or modifications to assessments, due to, for example, changes in base or special assessments or downgraded ratings of Eastern Bank, could have a materially adverse effect on our results of operations and financial condition.

Deposit insurance assessment rates are subject to change, and additional increases or modifications to assessments, due to, for example, changes in base or special assessments or downgraded ratings of Eastern Bank, or one or more failures of FDIC-insured banks, could have a materially adverse effect on our results of operations and financial condition.

The FDIC imposed a special assessment arising out of the banking crisis in early 2023, which resulted in an increase in FDIC insurance expense of $10.8 million and $1.9 million for the years ended December 31, 2023 and 2024, respectively.

It is possible an additional assessment could be charged to finalize the loss from the 2023 bank crisis.

We may be unable to disclose some restrictions or limitations on our operations imposed by our regulators.

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to act as a source of financial and managerial strength to their subsidiary banks.

This support may be required by the Federal Reserve Board at times when Eastern Bankshares, Inc.

This support may be required by the Federal Reserve Board at times

when Eastern Bankshares, Inc.

might otherwise determine not to provide it or when doing so might not otherwise be in the interests of the shareholders or creditors of Eastern Bankshares, Inc., and may include one or more of the following:

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Regulations can adversely affect our compliance costs and other non-interest expenses, and failure to comply with regulations could subject us to regulatory actions or litigation, which could have a material adverse effect on our business, results of operations, or financial condition.

New laws, rules and regulations, or changes to the interpretation or enforcement of existing laws, rules or regulations, from time to time could increase our expenses, causing our recent historical expenses not to be indicative of future expenses, and could result in limitations on the lines of business we conduct or plan to conduct, modifications to our current or future business practices, and increased capital requirements.

expenses, and could result in limitations on the lines of business we conduct or plan to conduct, modifications to our current or future business practices, and increased capital requirements.

It is unclear how and whether our regulators, including the SEC, FDIC, other banking regulators and other state insurance regulators may respond to, or enforce elements of, these new regulations or develop their own similar laws and regulations.

The impacts, degree and timing of the effect of applicable laws, future regulations and industry principles on our business cannot now be anticipated and may have further impacts on our products and services and the results of operations.

Our business may be adversely affected by the public policy priorities of the Trump administration.

Our business may be adversely affected by changing public policy priorities.

Changes in the public policy priorities of elected officials and appointed regulators can affect our business directly, including through changes in the regulatory environment in which we and our competitors operate, and the markets that we serve, which could have an indirect impact on our business.

Changes associated with the Trump administration’s emphasis on stablecoins and digital assets could have an adverse impact on our business.

President Trump’s Executive Order entitled “American Leadership in Digital Financial Technology” could result in larger scale adoption of stablecoins and other digital assets, which could potentially impact the number of customers who choose to engage with the traditional banking system and as a result could have a direct or indirect impact on our performance.

The Executive Order includes directives to promote dollar-backed stablecoins worldwide, promote the use of blockchain networks to transact and maintain self-custody of digital assets, and to promote and protect access to banking services for related companies and other law-abiding entities.

If implemented, these directives could result in broader adoption of stablecoins and other digital assets into the bank regulatory perimeter and the U.S.

payment system, which could threaten deposits held at traditional banks, including Eastern Bank.

Risks Related to Stock-Based Benefit Plans

Our stock-based benefit plans have increased and will continue to increase our expenses and reduce our income.

In 2021, we adopted the Equity Plan, which impacts our annual compensation and benefit expenses related to awards granted to participants under such plan.

The actual amount of the stock-related compensation and benefit expenses will depend on the number of awards actually granted under the Equity Plan, the fair market value of the awards on the date of grant, the vesting period, and other factors which we cannot predict at this time.

In addition, we recognize compensation expense monthly for our employee stock ownership plan (which we sometimes refer to as our ESOP) when shares are committed to be released to participants’ accounts, and we recognize compensation expense for restricted stock awards, performance stock units and restricted stock units over the vesting period of awards made to recipients.

Passage of the GENIUS Act could have an adverse impact on our business.

The Guiding and Establishing National Innovation of U.S.

Stablecoins (GENIUS) Act could result in larger scale adoption of stablecoins, which could potentially impact customers who choose to engage with the traditional banking system and as a result could have a direct or indirect impact on our performance.

The GENIUS Act created a federal regulatory framework for stablecoin issuers to operate in the United States.

Stablecoins are a type of cryptocurrency that per the GENIUS Act need to be backed by U.S.

dollars or other low-risk assets.

Broad adoption of stablecoins or other digital assets in general could introduce new risks to the banking industry and could present competitive and other risks for traditional banks, including Eastern Bank.

Risks Related to Our Articles of Organization and State and Federal Banking Laws

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and the required approval of at least 80% of the voting power of the shares then-outstanding entitled to vote for business combination transactions with interested shareholders.

Additionally, our Board of Directors is currently classified, with directors serving three-year staggered terms.

However, the classified structure is being phased out, and by our 2027 annual meeting of stockholders, directors will be elected for annual terms.

Additionally, our Board of Directors is going through a declassification process and, by our 2027 annual meeting of stockholders, all directors will be elected for annual terms.

Furthermore, shares of restricted stock, restricted stock units or stock options that we may grant to employees and directors, stock ownership by our management and directors, employment agreements and/or change in control agreements that we have entered into with our executive officers and other factors may make it more expensive for companies or persons to acquire control of Eastern Bankshares, Inc.

Taken as a whole, these statutory provisions and provisions in our articles of

organization could result in our being less attractive to a potential acquirer and thus could adversely affect the market price of our common stock.

Taken as a whole, these statutory provisions and provisions in our articles of organization could result in our being less attractive to a potential acquirer and thus could adversely affect the market price of our common stock.

The articles of organization of Eastern Bankshares, Inc.

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provide that state and federal courts located in Massachusetts will be the exclusive forum for substantially all disputes between us and our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

The articles of organization further provide that, unless we consent in writing to the selection of an alternative forum, the Business Litigation Session of the Suffolk County Superior Court (the “BLS”) (1) is the sole and exclusive forum for any derivative action or proceeding brought on behalf of Eastern Bankshares, Inc., any action asserting a claim of breach of a fiduciary duty, any action asserting a claim arising pursuant to any provision of Massachusetts corporate law, or any action asserting a claim governed by the internal affairs doctrine, and (2) is a concurrent jurisdiction for any claim arising under the Securities Act of 1933 or the rules and regulations thereunder.

1933 or the rules and regulations thereunder.

The articles of organization also provide that the exclusive forum provision does not apply to any claim for which the federal courts have exclusive jurisdiction, including all suits brought to enforce any liability or duty created by the Exchange Act or the rules and regulations thereunder.

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Our repurchase of shares of common stock is subject to Federal Reserve Board policy related to repurchases of shares by depository institution holding companies.

To date, we have received three notices of non-objection to proposed share repurchase programs, as previously discussed.

Each notice of non-objection has covered an approximately 12-month period.

To date, we have received non-objection to each proposed share repurchase programs, as previously discussed.

There can be no assurance that we will be able to obtain notices of non-objection from the Federal Reserve Board in the future.

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What changed 10-K

Item 1A. Risk Factors