What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2021-11-04 compared with 2021-08-04 · 140 added, 117 removed, 1294 unchanged (17% of the section changed)

57 unchanged sentences

issued and outstanding:

33,037,859 shares at June 30, 2021 and 32,965,692 shares at December 31, 2020 (includes 137,005 and 135,205 shares of unvested participating restricted stock awards, respectively)

33,043,812 shares at September 30, 2021 and 32,965,692 shares at December 31, 2020 (includes 135,485 and 135,205 shares of unvested participating restricted stock awards, respectively)

Value of shares held in rabbi trust at cost:

83,634 shares at June 30, 2021 and 84,126 shares at December 31, 2020

84,207 shares at September 30, 2021 and 84,126 shares at December 31, 2020

( 3,157 ) ( 3,066 )

9 unchanged sentences

(Unaudited—Dollars in thousands, except per share data)

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

29 unchanged sentences

FDIC assessment 980 1,034 2,805 1,537

Advertising 884 1,215 2,949 3,107

Consulting expense 1,560 1,305 5,443 4,244

Core deposit amortization 1,293 1,433 2,685 2,964

Amortization of intangible assets 1,310 1,449 4,037 4,704

Debit card expense 1,347 1,105 3,693 3,312

Loss on termination of derivatives — 684 — 684

Merger and acquisition expense 1,943 — 3,674 —

15 unchanged sentences

(Unaudited—Dollars in thousands)

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

9 unchanged sentences

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Three Months Ended June 30, 2021 and 2020

Three Months Ended September 30, 2021 and 2020

(Unaudited—Dollars in thousands, except per share data)

1 unchanged sentence

Comprehensive Income Total

Balance March 31, 2021 33,024,882 $ 329 $ ( 3,080 ) $ 3,080 $ 946,002 $ 741,883 $ 27,157 $ 1,715,371

Balance June 30, 2021 33,037,859 $ 329 $ ( 3,116 ) $ 3,116 $ 948,130 $ 763,596 $ 29,567 $ 1,741,622

Net income — — — — — 40,007 — 40,007

Other comprehensive income — — — — — — 2,410 2,410

Other comprehensive loss — — — — — — ( 11,000 ) ( 11,000 )

Common dividend declared ($ 0.48 per share)

4 unchanged sentences

Deferred compensation and other retirement benefit obligations — — ( 41 ) 41 — — — —

Balance September 30, 2021 33,043,812 $ 329 $ ( 3,157 ) $ 3,157 $ 949,316 $ 787,742 $ 18,567 $ 1,755,954

Balance June 30, 2020 32,942,110 $ 328 $ ( 4,649 ) $ 4,649 $ 942,685 $ 676,834 $ 51,845 $ 1,671,692

Balance March 31, 2020 33,260,005 $ 331 $ ( 4,604 ) $ 4,604 $ 962,513 $ 667,084 $ 49,728 $ 1,679,656

Net income — — — — — 34,873 — 34,873

6 unchanged sentences

Shares issued under direct stock purchase plan 8,480 — — — 528 — — 528

Shares repurchased under share repurchase program ( 333,077 ) ( 3 ) ( 21,862 ) ( 21,865 )

Deferred compensation and other retirement benefit obligations — — ( 63 ) 63 — — — —

Balance June 30, 2020 32,942,110 $ 328 $ ( 4,649 ) $ 4,649 $ 942,685 $ 676,834 $ 51,845 $ 1,671,692

Balance September 30, 2020 32,955,547 $ 328 $ ( 4,712 ) $ 4,712 $ 944,218 $ 696,546 $ 48,632 $ 1,689,724

INDEPENDENT BANK CORP.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Six Months Ended June 30, 2021 and 2020

Nine Months Ended September 30, 2021 and 2020

(Unaudited—Dollars in thousands, except per share data)

11 unchanged sentences

Deferred compensation and other retirement benefit obligations — — ( 91 ) 91 — — — —

Balance June 30, 2021 33,037,859 329 ( 3,116 ) 3,116 948,130 763,596 29,567 1,741,622

Balance September 30, 2021 33,043,812 $ 329 $ ( 3,157 ) $ 3,157 $ 949,316 $ 787,742 $ 18,567 $ 1,755,954

Balance December 31, 2019 34,377,388 $ 342 $ ( 4,735 ) $ 4,735 $ 1,035,450 $ 654,182 $ 18,169 $ 1,708,143

10 unchanged sentences

Deferred compensation and other retirement benefit obligations — — 23 ( 23 ) — — — —

Balance June 30, 2020 32,942,110 328 ( 4,649 ) 4,649 942,685 676,834 51,845 1,671,692

Balance September 30, 2020 32,955,547 $ 328 $ ( 4,712 ) $ 4,712 $ 944,218 $ 696,546 $ 48,632 $ 1,689,724

(1) Represents adjustment needed to reflect the cumulative impact on retained earnings pursuant to the Company's adoption of Accounting Standards Update 2016-13.

5 unchanged sentences

(Unaudited—Dollars in thousands)

Six Months Ended

Nine Months Ended

Cash flow from operating activities

7 unchanged sentences

Net loss on bank premises and equipment 32 363

Loss on termination of derivatives — 684

Realized gain on sale leaseback transaction ( 433 ) ( 433 )

11 unchanged sentences

Total adjustments 37,505 ( 75,703 )

Net cash provided by (used in) operating activities 117,753 ( 13,362 )

Net cash provided by operating activities 156,795 10,823

Cash flows used in investing activities

9 unchanged sentences

Proceeds from life insurance policies 576 2,629

Net (increase) decrease in loans 468,901 ( 481,372 )

Net decrease (increase) in loans 603,773 ( 525,626 )

Purchases of bank premises and equipment ( 16,114 ) ( 8,283 )

Proceeds from the sale of bank premises and equipment 78 283

Payments on early termination of hedging relationship — ( 684 )

Net cash used in investing activities ( 641,859 ) ( 450,362 )

23 unchanged sentences

The Company is the sole stockholder of Rockland Trust Company (“Rockland Trust” or the “Bank”), a Massachusetts trust company chartered in 1907.

As announced on April 22, 2021, the Company has signed a definitive merger agreement under which the Company will acquire Meridian Bancorp, Inc.

(“Meridian”), with the Company as the surviving entity, and East Boston Savings Bank will merge with and into Rockland trust.

The Company anticipates the merger to close during the fourth quarter of 2021.

All material intercompany balances and transactions have been eliminated in consolidation.

3 unchanged sentences

In the opinion of management, all adjustments considered necessary for a fair presentation of the financial statements, primarily consisting of normal recurring adjustments, have been included.

Results for the six months ended June 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any other interim period.

Results for the nine months ended September 30, 2021 are not necessarily indicative of the results that may be expected for the year ending December 31, 2021 or any other interim period.

For further information, refer to the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission (the "2020 Form 10-K").

7 unchanged sentences

2021-01 was subsequently issued in January 2021 and expanded application of the optional expedients to derivative transactions affected by the discounting transition.

The Company has not yet adopted the amendments in these updates and is currently in the process of reviewing its contracts and existing processes in order to assess the risks and potential impact of the transition away from LIBOR.

The Company has not yet adopted the amendments in these updates, but has established a working group to guide the Company’s transition from LIBOR and has begun efforts to transition off the LIBOR index consistent with industry timelines.

The working group has identified its products that utilize LIBOR and has implemented fallback language to facilitate the transition to alternative rates.

The Company is also evaluating existing platforms and systems as well as alternative indices in its preparation to offer new products tied to the alternative indices.

NOTE 3 - SECURITIES

Trading Securities

The Company had trading securities of $ 3.4 million and $ 2.8 million as of June 30, 2021 and December 31, 2020, respectively.

The Company had trading securities of $ 3.5 million and $ 2.8 million as of September 30, 2021 and December 31, 2020, respectively.

These securities are held in a rabbi trust and will be used for future payments associated with the Company’s non-qualified 401(k) Restoration Plan and Non-qualified Deferred Compensation Plan.

Equity Securities

The Company had equity securities of $ 23.0 million and $ 22.1 million as of June 30, 2021 and December 31, 2020, respectively.

The Company had equity securities of $ 22.8 million and $ 22.1 million as of September 30, 2021 and December 31, 2020, respectively.

These securities consist primarily of mutual funds held in a rabbi trust and will be used for future payments associated with the Company’s supplemental executive retirement plans.

The following table represents a summary of the gains and losses recognized within non-interest income and non-interest expense within the consolidated statements of income that relate to equity securities for the periods indicated:

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

5 unchanged sentences

The following table summarizes the amortized cost, allowance for credit losses, and fair value of available for sale securities and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) as of the dates indicated:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Gains Gross Unrealized

14 unchanged sentences

Total available for sale securities $ 1,425,392 $ 12,228 $ ( 10,410 ) $ — $ 1,427,210 $ 395,453 $ 17,869 $ ( 462 ) $ — $ 412,860

The Company did not record a provision for estimated credit losses on any available for sale securities during the three and six months ended June 30, 2021 and 2020.

Excluded from the table above is accrued interest on available for sale securities of $ 2.1 million and $ 1.2 million as of June 30, 2021 and December 31, 2020, respectively, which is included within other assets on the consolidated balance sheets.

Additionally, the Company did not record any write-offs of accrued interest income on available for sale securities during the three and six months ended June 30, 2021 and 2020.

Furthermore, no

securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status as of June 30, 2021 and December 31, 2020.

The Company did not record a provision for estimated credit losses on any available for sale securities during the three and nine months ended September 30, 2021 and 2020.

Excluded from the table above is accrued interest on available for sale securities of $ 3.3 million and $ 1.2 million as of September 30, 2021 and December 31, 2020, respectively, which is included within other assets on the consolidated balance sheets.

Additionally, the Company did not record any write-offs of accrued interest income on available for sale securities during the three and nine months ended September 30, 2021 and 2020.

Furthermore, no securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status as of September 30, 2021 and December 31, 2020.

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale.

The Company had no sales of securities available for sale during the three or six months ended June 30, 2021 and 2020, and therefore no gains or losses were realized during the periods presented.

The Company had no sales of securities available for sale during the three or nine months ended September 30, 2021 and 2020, and therefore no gains or losses were realized during the periods presented.

The following tables show the gross unrealized losses and fair value of the Company’s available for sale securities in an unrealized loss position, and for which the Company has not recorded a provision for credit losses, as of the dated indicated.

These available for sale securities are aggregated by major security type and length of time that individual securities have been in a continuous unrealized loss position:

June 30, 2021

September 30, 2021

Less than 12 months 12 months or longer Total

24 unchanged sentences

In addition, management does not believe that any of the securities are impaired due to reasons of credit quality.

As a result, the Company did not recognize a provision for credit losses on these investments during the three and six months ended June 30, 2021 and 2020.

As a result, the Company did not recognize a provision for credit losses on these investments during the three and nine months ended September 30, 2021 and 2020.

The Company made this determination by reviewing various qualitative and quantitative factors regarding each investment category, such as current market conditions, extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, and current analysts’ evaluations.

As a result of the Company’s review of these qualitative and quantitative factors, the causes of the impairments listed in the table above by category were as follows at June 30, 2021:

As a result of the Company’s review of these qualitative and quantitative factors, the causes of the impairments listed in the table above by category were as follows at September 30, 2021:

Government Agency Securities, U.S.

11 unchanged sentences

The following table summarizes the amortized cost, fair value and allowance for credit losses of held to maturity securities and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive income (loss) as of the dates indicated:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

Gains Gross Unrealized

11 unchanged sentences

Total held to maturity securities $ 865,249 $ 17,167 $ ( 7,110 ) $ — $ 875,306 $ 724,512 $ 28,007 $ ( 342 ) $ — $ 752,177

The Company did not record a provision for estimated credit losses on any held to maturity securities during the three and six months ended June 30, 2021 and 2020.

Excluded from the table above is accrued interest on held to maturity securities of $ 1.6 million and $ 1.5 million as of June 30, 2021 and December 31, 2020, respectively, which is included within other assets on the consolidated balance sheets.

Additionally, the Company did not record any write-offs of accrued interest income on held to maturity securities during the three and six months ended June 30, 2021 and 2020.

Furthermore, no securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status as of June 30, 2021 and December 31, 2020.

The Company did not record a provision for estimated credit losses on any held to maturity securities during the three and nine months ended September 30, 2021 and 2020.

Excluded from the table above is accrued interest on held to maturity securities of $ 2.2 million and $ 1.5 million as of September 30, 2021 and December 31, 2020, respectively, which is included within other assets on the consolidated balance sheets.

Additionally, the Company did not record any write-offs of accrued interest income on held to maturity securities during the three and nine months ended September 30, 2021 and 2020.

Furthermore, no securities held by the Company were delinquent on contractual payments nor were any securities placed on non-accrual status as of September 30, 2021 and December 31, 2020.

When securities are sold, the adjusted cost of the specific security sold is used to compute the gain or loss on the sale.

The Company had no sales of held to maturity securities during the three and six months ended June 30, 2021 and 2020, and therefore no gains or losses were realized during the periods presented.

The Company had no sales of held to maturity securities during the three and nine months ended September 30, 2021 and 2020, and therefore no gains or losses were realized during the periods presented.

The Company monitors the credit quality of held to maturity securities through the use of credit ratings.

Credit ratings are monitored by the Company on at least a quarterly basis.

As of June 30, 2021, all held to maturity securities held by the Company were rated investment grade or higher.

As of September 30, 2021, all held to maturity securities held by the Company were rated investment grade or higher.

The actual maturities of certain available for sale or held to maturity securities may differ from the contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.

A schedule of the contractual maturities of available for sale and held to maturity securities as of June 30, 2021 is presented below:

A schedule of the contractual maturities of available for sale and held to maturity securities as of September 30, 2021 is presented below:

Due in one year or less Due after one year to five years Due after five to ten years Due after ten years Total

23 unchanged sentences

Total $ 15,365 $ 15,467 $ 690,802 $ 690,436 $ 624,951 $ 621,521 $ 959,523 $ 975,092 $ 2,290,641 $ 2,302,516

Included in the table above are $ 3.3 million of callable securities at June 30, 2021.

The carrying value of securities pledged to secure public funds, trust deposits, and for other purposes, as required or permitted by law, was $ 447.4 million and $ 419.6 million at June 30, 2021 and December 31, 2020, respectively.

At June 30, 2021 and December 31, 2020, the Company had no investments in obligations of individual states, counties, or municipalities which exceeded 10% of consolidated stockholders’ equity.

Included in the table above are $ 3.2 million of callable securities at September 30, 2021.

The carrying value of securities pledged to secure public funds, trust deposits, and for other purposes, as required or permitted by law, was $ 678.4 million and $ 419.6 million at September 30, 2021 and December 31, 2020, respectively.

At September 30, 2021 and December 31, 2020, the Company had no investments in obligations of individual states, counties, or municipalities which exceeded 10% of consolidated stockholders’ equity.

NOTE 4 - LOANS, ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

1 unchanged sentence

The following table summarizes the change in allowance for credit losses by loan category, and bifurcates the amount of loans allocated to each loan category for the period indicated:

Three Months Ended June 30, 2021

Three Months Ended September 30, 2021

(Dollars in thousands)

11 unchanged sentences

Ending balance (1) $ 16,014 $ 37,798 $ 4,468 $ 3,667 $ 11,047 $ 18,868 $ 384 $ 92,246

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

(Dollars in thousands)

11 unchanged sentences

Ending balance (1) $ 28,219 $ 39,386 $ 5,210 $ 4,593 $ 14,163 $ 23,572 $ 482 $ 115,625

Six Months Ended June 30, 2021

Nine Months Ended September 30, 2021

(Dollars in thousands)

11 unchanged sentences

Ending balance (1) $ 16,014 $ 37,798 $ 4,468 $ 3,667 $ 11,047 $ 18,868 $ 384 $ 92,246

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

(Dollars in thousands)

13 unchanged sentences

Ending balance (1) $ 28,219 $ 39,386 $ 5,210 $ 4,593 $ 14,163 $ 23,572 $ 482 $ 115,625

(1) Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $ 29.9 million and $ 32.9 million as of June 30, 2021 and June 30, 2020, respectively.

(1) Balances of accrued interest receivable excluded from amortized cost and the calculation of allowance for credit losses amounted to $ 29.1 million and $ 36.7 million as of September 30, 2021 and September 30, 2020, respectively.

(2) Represents adjustment needed to reflect the cumulative day one impact pursuant to the Company's adoption of Accounting Standards Update 2016-13.

2 unchanged sentences

The adjustment represents a $ 1.2 million increase to the allowance resulting from the day one reclassification.

The balance of allowance for credit losses of $ 102.4 million as of June 30, 2021 represents a decrease of $ 5.2 million, or 4.8 %, compared to March 31, 2021.

The decrease in the allowance was primarily driven by $ 5.0 million of negative provision recorded during the quarter, reflecting improvements in overall macro-economic forecast assumptions, continued strong asset quality metrics, and modest overall loan growth (excluding the PPP loan activity.) While management is unable to know with certainty the direct, indirect, and future impacts of the COVID-19 pandemic, it is expected that the pandemic could have a significant adverse impact on future losses across a broad range of loan segments.

As such, the allowance for credit losses at June 30, 2021 continues to reflect increased reserve allocations to loan segments that are considered to have elevated loss exposure associated with the COVID-19 pandemic.

The balance of allowance for credit losses of $ 92.2 million as of September 30, 2021 represents a decrease of $ 10.1 million, or 9.9 %, compared to June 30, 2021.

The decrease in the allowance was primarily driven by a release of the provision for credit losses of $ 10.0 million recorded during the quarter, reflecting improvements in expected overall macro-economic forecast assumptions and continued strong asset quality metrics, along with lower loan levels.

While management is unable to know with certainty the direct, indirect, and future impacts of the COVID-19 pandemic, it is expected that the pandemic could have a significant adverse impact on future losses across a broad range of loan segments.

As such, the allowance for credit losses at September 30, 2021 continues to reflect increased reserve allocations to loan segments that are considered to have elevated loss exposure associated with the COVID-19 pandemic, in addition to other economic uncertainties, including labor and supply shortages, as well as inflationary factors.

These loan segments primarily include commercial relationships within industries that have been subject to mandated closures and capacity limits that have impeded and could potentially impede the borrowers’ ability to make loan payments, including loans in the following industry sections:

79 unchanged sentences

The independent loan review process achieves significant penetration into the commercial loan portfolio and reports the results of these reviews to the Audit Committee of the Board of Directors on a quarterly basis.

Commercial loan modifications granted by the Company allowing payment deferrals for qualifying borrowers in accordance with the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") have been assessed for potential downgrades of risk ratings.

Commercial loan modifications granted by the Company allowing payment deferrals for qualifying borrowers in accordance with the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") were assessed for potential downgrades of risk ratings.

For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower.

3 unchanged sentences

The following table details the amortized cost balances of the Company's loan portfolios, presented by credit quality indicator and origination year as of the dates indicated below:

June 30, 2021

September 30, 2021

2021 2020 2019 2018 2017 Prior Revolving Loans Revolving converted to Term Total (1)

40 unchanged sentences

Total $ 1,845,455 $ 1,787,591 $ 1,003,302 $ 627,225 $ 670,687 $ 1,518,865 $ 1,349,078 $ 5,810 $ 8,808,013

June 30, 2020

September 30, 2020

2020 2019 2018 2017 2016 Prior Revolving Loans Revolving converted to Term Total (1)

42 unchanged sentences

(2) Loans originated as part of the Paycheck Protection Program ("PPP") established by the CARES Act are included within commercial and industrial under the 2021 and 2020 vintage year and "pass" category as these loans are 100% guaranteed by the U.S.

Outstanding PPP loans totaled $ 482.7 million as of June 30, 2021, including $ 112.2 million and $ 370.5 million originated in 2020 and 2021, respectively, while outstanding PPP loans as of June 30, 2020 totaled $ 793.0 million.

Outstanding PPP loans totaled $ 383.6 million as of September 30, 2021, including $ 16.3 million and $ 367.3 million originated in 2020 and 2021, respectively, while outstanding PPP loans as of September 30, 2020 totaled $ 811.7 million .

For the Company’s consumer portfolio, the quality of the loan is best indicated by the repayment performance of an individual borrower.

1 unchanged sentence

Current FICO data is purchased and appended to all consumer loans on a regular basis.

In addition, automated valuation services and broker opinions of value are used to supplement original value data for the residential and home equity portfolios, periodically.

In addition, automated valuation services and broker opinions of value are used to supplement original value data for the residential real estate and home equity portfolios, periodically.

The following table shows the weighted average FICO scores and the weighted average combined LTV ratios at the dates indicated below:

2021 December 31

Residential portfolio

Residential real estate portfolio

FICO score (re-scored)(1) 750 749

3 unchanged sentences

LTV (re-valued)(2)(3) 43.3 % 46.0 %

(1) The average FICO scores at June 30, 2021 are based upon rescores from June 2021, as available for previously originated loans, or origination score data for loans booked in June 2021.

(1) The average FICO scores at September 30, 2021 are based upon rescores from September 2021, as available for previously originated loans, or origination score data for loans booked in September 2021.

The average FICO scores at December 31, 2020 were based upon rescores available from December 2020, as available for previously originated loans, or origination score data for loans booked in December 2020.

(2) The combined LTV ratios for June 30, 2021 are based upon updated automated valuations as of May 2021, when available, and/or the most current valuation data available.

(2) The combined LTV ratios for September 30, 2021 are based upon updated automated valuations as of August 2021, when available, and/or the most current valuation data available.

The combined LTV ratios for December 31, 2020 were based upon updated automated valuations as of November 2020, when available, and/or the most current valuation data available as of such date.

4 unchanged sentences

Management evaluates the need for a reserve on unfunded lending commitments in a manner consistent with loans held for investment.

At each of June 30, 2021, and December 31, 2020 the Company's estimated reserve for unfunded commitments amounted to $ 1.2 million.

At September 30, 2021 and December 31, 2020, the Company's estimated reserve for unfunded commitments amounted to $ 1.3 million and $ 1.2 million, respectively.

Asset Quality

4 unchanged sentences

In response to the COVID-19 pandemic, the Company has granted loan modifications to allow deferral of payments for borrowers negatively impacted by the pandemic.

The balance of loans with active deferrals as of June 30, 2021 and December 31, 2020 was $ 233.8 million and $ 173.6 million, respectively.

The majority of these loans with active deferrals as of June 30, 2021 continue to be characterized as current loans.

The balance of loans with active deferrals as of September 30, 2021 and December 31, 2020 was $ 222.9 million and $ 173.6 million, respectively.

The majority of these loans with active deferrals as of September 30, 2021 continue to be characterized as current loans.

In accordance with regulatory guidance, these modifications are not considered to be troubled debt restructures ("TDRs") if they were performing as of December 31, 2019.

Additionally, a majority of these are modified loans are characterized as current and therefore are not impacting nonaccrual or delinquency totals as of June 30, 2021 and December 31, 2020.

Additionally, a majority of these modified loans are characterized as current and therefore are not impacting nonaccrual or delinquency totals as of September 30, 2021 and December 31, 2020.

The Company does, however, consider all active deferrals when estimating loss reserves.

2 unchanged sentences

Nonaccrual Balances

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

With Allowance for Credit Losses Without Allowance for Credit Losses Total With Allowance for Credit Losses Without Allowance for Credit Losses Total

7 unchanged sentences

Total nonaccrual loans (1) $ 22,370 $ 23,440 $ 45,810 $ 31,332 $ 35,528 $ 66,860

(1) Included in these amounts were $ 20.2 million and $ 22.2 million of nonaccruing TDRs at June 30, 2021 and December 31, 2020, respectively.

It is the Company's policy to reverse any accrued interest when a loan is put on nonaccrual status, and, as such, the Company did not record any interest income on nonaccrual loans during the six months ended June 30, 2021 and June 30, 2020.

In accordance with government moratorium orders established in response to the COVID-19 pandemic, new foreclosures pursued by the Company have been on hold through June 30, 2021, and all loan foreclosures in process as of June 30, 2021 were in compliance with the orders.

(1) Included in these amounts were $ 21.1 million and $ 22.2 million of nonaccruing TDRs at September 30, 2021 and December 31, 2020, respectively.

In accordance with government moratorium orders established in response to the COVID-19 pandemic, new foreclosures pursued by the Company were on hold through August 31, 2021, at which point such orders were lifted.

The following table shows information regarding foreclosed residential real estate property at the dates indicated:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Dollars in thousands)

2 unchanged sentences

The following tables show the age analysis of past due financing receivables as of the dates indicated:

June 30, 2021

September 30, 2021

30-59 days 60-89 days 90 days or more Total Past Due Total

46 unchanged sentences

The following table shows the Company’s total TDRs and other pertinent information as of the dates indicated:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Dollars in thousands)

6 unchanged sentences

Additionally, loans classified as TDRs are adjusted to reflect the changes in value of the recorded investment in the loan, if any, resulting from the granting of a concession.

For all residential loan modifications, the borrower must perform during a 90 day trial period before the modification is finalized.

For all residential real estate loan modifications, the borrower must perform during a 90 day trial period before the modification is finalized.

The following table shows the TDRs which occurred during the periods indicated and the change in the recorded investment subsequent to the modifications occurring:

Three Months Ended Six Months Ended

June 30, 2021 June 30, 2021

Three Months Ended Nine Months Ended

September 30, 2021 September 30, 2021

Contracts Pre-Modification

9 unchanged sentences

Total (1) — $ — $ — 8 $ 18,301 $ 18,301

Three Months Ended Six Months Ended

June 30, 2020 June 30, 2020

Three Months Ended Nine Months Ended

September 30, 2020 September 30, 2020

Contracts Pre-Modification

11 unchanged sentences

(1) The pre-modification and post-modification balances represent the legal principal balance of the loan.

Activity presented in the tables above includes no modifications on existing TDRs during the three months ended June 30, 2021, $ 14.3 million of modifications on existing TDRs during the six months ended June 30, 2021, and $ 510,000 and $ 1.4 million of modifications on existing TDRs during the three and six months ended June 30, 2020, respectively.

Activity presented in the tables above includes no modifications on existing TDRs during the three months ended September 30, 2021, $ 14.3 million of modifications on existing TDRs during the nine months ended September 30, 2021, and $ 83,000 and $ 1.5 million of modifications on existing TDRs during the three and nine months ended September 30, 2020, respectively.

The following table shows the Company’s post-modification balance of TDRs listed by type of modification for the periods indicated:

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

6 unchanged sentences

The Company considers a loan to have defaulted when it reaches 90 days past due.

During the six months ended June 30, 2021 and June 30, 2020, there were no loans modified during the prior twelve months that subsequently defaulted during the respective periods.

There was one commercial real estate loan modified during the preceding twelve months with a recorded investment of $ 3.2 million, which subsequently defaulted during the nine month period ended September 30, 2021.

There were no defaults on such loans modified during the prior twelve months for the three and nine month periods ended September 30, 2020, respectively.

The Company determines the amount of allowance on TDRs in accordance with CECL methodology using a discounted cash flow approach, or a fair value of collateral approach if the loan is determined to be individually evaluated.

NOTE 5 - STOCK BASED COMPENSATION

During the six months ended June 30, 2021, the Company had the following activity related to stock based compensation:

During the nine months ended September 30, 2021, the Company had the following activity related to stock based compensation:

Time Vested Restricted Stock Awards

3 unchanged sentences

5/25/2021 7,680 2018 Non-Employee Director Stock Plan $ 78.18 Shares vested immediately

9/1/2021 640 2018 Non-Employee Director Stock Plan $ 76.78 Shares vested immediately

Performance-Based Restricted Stock Awards

19 unchanged sentences

The following tables reflect the Company's derivative positions as of the dates indicated below for interest rate derivatives which qualify as cash flow hedges for accounting purposes:

June 30, 2021

September 30, 2021

Weighted Average Rate

24 unchanged sentences

The Company expects approximately $ 19.0 million (pre-tax) to be reclassified as an increase to interest income and $ 509,000 (pre-tax) to be reclassified as an increase to interest expense, from OCI related to the Company’s cash flow hedges in the next twelve months.

This reclassification is due to anticipated payments that will be made and/or received on the swaps based upon the forward curve as of June 30, 2021.

The Company had no fair value hedges as of June 30, 2021 or December 31, 2020.

This reclassification is due to anticipated payments that will be made and/or received on the swaps based upon the forward curve as of September 30, 2021.

The Company had no fair value hedges as of September 30, 2021 or December 31, 2020.

Customer Related Positions

17 unchanged sentences

(1) Less than 1 year Less than 2 years Less than 3 years Less than 4 years Thereafter Total Fair Value

June 30, 2021

September 30, 2021

(Dollars in thousands)

31 unchanged sentences

The change in fair value of loans held for sale is recorded in current period earnings as a component of mortgage banking income in accordance with the Company's fair value election.

The fair value of loans held for sale increased by $ 305,000 and $ 583,000 for the three month periods ended June 30, 2021 and 2020, respectively.

The fair value of loans held for sale decreased by $ 1.5 million and increased by $ 839,000 for the six month periods ended June 30, 2021 and 2020, respectively.

The fair value of loans held for sale decreased by $ 75,000 and increased by $ 413,000 for the three month periods ended September 30, 2021 and 2020, respectively.

The fair value of loans held for sale decreased by $ 1.5 million and increased by $ 1.3 million for the nine month periods ended September 30, 2021 and 2020, respectively.

These amounts were offset in earnings by the change in the fair value of mortgage derivatives.

17 unchanged sentences

The Company expects that these best efforts forward loan sale commitments will experience a net neutral shift in fair value with related derivative loan commitments.

The aggregate amount of net realized gains or losses on sales of such loans included within mortgage banking income was $ 4.2 million and $ 6.1 million for the three month periods ended June 30, 2021 and 2020, respectively, and $ 12.3 million and $ 10.6 million for the six months ended June 30, 2021 and 2020, respectively.

The aggregate amount of net realized gains or losses on sales of such loans included within mortgage banking income was $ 4.9 million and $ 10.0 million for the three month periods ended September 30, 2021 and 2020, respectively, and $ 17.2 million and $ 20.7 million for the nine months ended September 30, 2021 and 2020, respectively.

Balance Sheet Offsetting

9 unchanged sentences

2021 December 31

2020 September 30

2021 December 31

20 unchanged sentences

(2) All liability derivatives are located in other liabilities on the balance sheet.

(3) Approximately $ 1.2 million and $ 1.6 million of accrued interest receivable is included in the fair value of the interest rate and loan level asset derivatives, respectively, as of June 30, 2021.

Accrued interest receivable of approximately and $ 1.2 million and $ 2.0 million is included in the fair value of the interest rate and loan level asset derivatives, respectively, as of December 31, 2020.

(4) Approximately $ 58,000 and $ 1.6 million of accrued interest payable is included in the fair value of the interest rate and loan level liability derivatives, respectively, as of June 30, 2021.

Accrued interest receivable of approximately $ 1.2 million and $ 2.0 million is included in the fair value of the interest rate and loan level asset derivatives, respectively, as of December 31, 2020.

(4) Approximately $ 60,000 and $ 1.6 million of accrued interest payable is included in the fair value of the interest rate and loan level liability derivatives, respectively, as of September 30, 2021.

Accrued interest payable of approximately $ 81,000 and $ 2.0 million is included in the fair value of the interest rate and loan level derivative liabilities, respectively, as of December 31, 2020.

(5) Netting adjustments represent the amounts recorded to convert derivative assets and liabilities cleared through CME from a gross basis to a net basis, inclusive of the variation margin payments, in accordance with applicable accounting guidance.

As displayed in the table above, derivatives that cleared through the CME were either in a net asset position or a net liability position as of June 30, 2021.

As displayed in the table above, derivatives that cleared through the CME were either in a net asset position or a net liability position as of September 30, 2021.

(6) Reflects offsetting derivative positions with the same counterparty that are not netted on the balance sheet.

The table below presents the effect of the Company’s derivative financial instruments included in OCI and current earnings for the periods indicated:

Three Months Ended Six Months Ended

June 30 June 30

Three Months Ended Nine Months Ended

September 30 September 30

2021 2020 2021 2020

16 unchanged sentences

If the Company fails to meet these conditions, the counterparties could request the Company make immediate payment or demand that the Company provide immediate and ongoing full collateralization on derivative positions in net liability positions.

The aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a net liability position was $ 42.2 million and $ 79.8 million at June 30, 2021 and December 31, 2020, respectively.

Although none of the contingency provisions have applied as of June 30, 2021 and December 31, 2020, the Company has posted collateral to offset the net liability exposure with institutional counterparties.

The aggregate fair value of all derivative instruments with credit-risk related contingent features that were in a net liability position was $ 35.9 million and $ 79.8 million at September 30, 2021 and December 31, 2020, respectively.

Although none of the contingency provisions have applied as of September 30, 2021 and December 31, 2020, the Company has posted collateral to offset the net liability exposure with institutional counterparties.

By using derivatives, the Company is exposed to credit risk to the extent that counterparties to the derivative contracts do not perform as required.

3 unchanged sentences

As such, management believes the risk of incurring credit losses on derivative contracts with institutional counterparties is remote.

The Company's exposure relating to institutional counterparties was $ 40.5 million and $ 48.8 million at June 30, 2021 and December 31, 2020, respectively.

The Company’s exposure relating to customer counterparties was approximately $ 81.7 million and $ 127.2 million at June 30, 2021 and December 31, 2020, respectively.

The Company's exposure relating to institutional counterparties was $ 37.1 million and $ 48.8 million at September 30, 2021 and December 31, 2020, respectively.

The Company’s exposure relating to customer counterparties was approximately $ 71.8 million and $ 127.2 million at September 30, 2021 and December 31, 2020, respectively.

Credit exposure may be reduced by the value of collateral pledged by the counterparty.

18 unchanged sentences

Valuation Techniques

There have been no changes in the valuation techniques used during the six months ended June 30, 2021.

There have been no changes in the valuation techniques used during the nine months ended September 30, 2021.

Trading and Equity Securities

34 unchanged sentences

Although the Company has determined that the majority of the inputs used to value its interest rate derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with its interest rate derivatives and risk participation agreements may also utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by the Company and its counterparties.

However, as of June 30, 2021 and December 31, 2020, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

However, as of September 30, 2021 and December 31, 2020, the Company has assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative positions and has determined that the credit valuation adjustments are not significant to the overall valuation of its derivatives.

As a result, the Company has determined that its derivative valuations in their entirety are properly classified as Level 2.

22 unchanged sentences

(Level 2) Significant

June 30, 2021

September 30, 2021

(Dollars in thousands)

50 unchanged sentences

(Level 2) Significant

June 30, 2021

September 30, 2021

(Dollars in thousands)

67 unchanged sentences

The following table presents the revenue streams that the Company has disaggregated as of the periods indicated:

Three Months Ended Six Months Ended

Three Months Ended Nine Months Ended

2021 September 30

2020 September 30

2021 September 30

(Dollars in thousands)

47 unchanged sentences

The following table provides the amount of investment management revenue earned but not received as of the dates indicated:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Dollars in thousands)

28 unchanged sentences

Three Months Ended

June 30, 2021 Six Months Ended

June 30, 2021

September 30, 2021 Nine Months Ended

September 30, 2021

Amount Tax (Expense)

14 unchanged sentences

Net change in other comprehensive income for defined benefit postretirement plans (1) 390 ( 110 ) 280 1,821 ( 512 ) 1,309

Total other comprehensive income (loss) $ 3,184 $ ( 774 ) $ 2,410 $ ( 15,197 ) $ 4,069 $ ( 11,128 )

Total other comprehensive loss $ ( 14,654 ) $ 3,654 $ ( 11,000 ) $ ( 29,851 ) $ 7,723 $ ( 22,128 )

Three Months Ended

June 30, 2020 Six Months Ended

June 30, 2020

September 30, 2020 Nine Months Ended

September 30, 2020

Amount Tax (Expense)

9 unchanged sentences

net cash flow hedge gains reclassified into interest income or interest expense 4,339 ( 1,220 ) 3,119 9,901 ( 2,784 ) 7,117

loss on termination of hedge reclassified into noninterest expense ( 684 ) 192 ( 492 ) ( 684 ) 192 ( 492 )

Net change in fair value of cash flow hedges ( 3,798 ) 1,069 ( 2,729 ) 28,457 ( 8,005 ) 20,452

13 unchanged sentences

Ending balance:

June 30, 2021 $ 9,274 $ 25,100 $ ( 4,807 ) $ 29,567

September 30, 2021 $ 1,377 $ 21,717 $ ( 4,527 ) $ 18,567

Beginning balance:

2 unchanged sentences

Ending balance:

June 30, 2020 $ 15,440 $ 39,660 $ ( 3,255 ) $ 51,845

September 30, 2020 $ 14,731 $ 36,931 $ ( 3,030 ) $ 48,632

NOTE 10 - COMMITMENTS AND CONTINGENCIES

17 unchanged sentences

The following table summarizes the above financial instruments at the dates indicated:

June 30, 2021 December 31, 2020

September 30, 2021 December 31, 2020

(Dollars in thousands)

11 unchanged sentences

Other Contingencies

At June 30, 2021, the Bank was involved in pending lawsuits that arose in the ordinary course of business.

At September 30, 2021, the Bank was involved in pending lawsuits that arose in the ordinary course of business.

Management has reviewed these pending lawsuits with legal counsel and has taken into consideration the view of counsel as to their outcome.

In the opinion of management, the final disposition of pending lawsuits is not expected to have a material adverse effect on the Company’s financial position or results of operations.

Historically, the Bank was required to maintain certain reserve requirements of vault cash and/or deposits with the Federal Reserve Bank of Boston, however the reserve requirement was reduced to zero by the Federal Reserve during the first quarter of 2020 in response to the COVID-19 pandemic, and as such, there was no reserve requirement at June 30, 2021 or at December 31, 2020.

NOTE 11 - LOW INCOME HOUSING PROJECT INVESTMENTS

8 unchanged sentences

Tax credits and benefits 14,251 (1) 9,404

Discrete tax adjustment 1,572 (2) n/a

Adjusted tax credits and benefits 15,823 9,404

Amortization of investments 12,437 (1) 7,552

Net income tax benefit 3,386 (1) 1,852

(1) Amounts shown represent the full year impact for the year ended December 31 , 2021.

(1) Amounts shown represent the estimated full year impact for the year ended December 31 , 2021.

(2) Discrete adjustment recognized for difference in actual benefits as reported on Schedule K-1 versus estimated benefits for the year ended December 31, 2020.

NOTE 12 - SUBSEQUENT EVENTS

On October 29, 2021, the Company sold one large commercial and industrial loan relationship, the aggregate balance of which totaled $ 15.8 million as of September 30, 2021 and was included within non-performing assets.

The Company expects to recognize a gain of approximately $ 2.5 million based on proceeds from the sale.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements