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Item 7. Management’s Discussion and Analysis

2026-02-27 compared with 2025-02-28 · 284 added, 243 removed, 694 unchanged (43% of the section changed)

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

Certain amounts in prior year financial statements have been reclassified to conform to the current year’s presentation, including the following:

• the Company reclassified its portfolio of loans secured by owner-occupied commercial real estate to the commercial and industrial loan category to more appropriately reflect the variation in the management and underlying risk profile of such loans compared with investor-owned commercial real estate loans;

• the Company combined the presentation of “Software maintenance” and “Subscriptions” costs into “Software and subscriptions” costs within Non-interest expense within the Consolidated Statements of Income.

Previously, “Subscriptions” costs were included within “Other noninterest expenses”.

Certain previously reported amounts have been reclassified to conform to the current year’s presentation, including a reclassification of the Company’s small business portfolio, with the majority of the portfolio reclassified into the commercial and industrial category, and the remainder of the portfolio, consisting of loans secured by non-owner occupied real estate, reclassified to the commercial real estate category.

The following should be read in conjunction with the Consolidated Financial Statements and related notes.

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These metrics are used by management to make key decisions regarding the Company’s balance sheet, liquidity, interest rate sensitivity, and capital resources and assist with identifying opportunities for improving the Company’s financial position or operating results.

The Company focuses on organic growth, but will also consider growth through acquisition.

Any potential acquisition opportunities are evaluated for the potential to provide a satisfactory financial return as well as other criteria (ease of integration, synergies, geographical location).

On December 9, 2024, the Company announced the signing of a definitive merger agreement with Enterprise Bancorp, Inc.

(“Enterprise”), which is currently expected to close in the second half of 2025.

The closing of the Enterprise acquisition is subject to certain conditions including approval of the transaction by Enterprise shareholders, receipt of required regulatory approvals, and other customary conditions.

Net income for the year ended December 31, 2024 was $192.1 million, or $4.52 on a diluted earnings per share basis, as compared to $239.5 million, or $5.42, on a diluted earnings per share basis for the year ended December 31, 2023, representing decreases of 19.8% and 16.6%, respectively.

Financial results for 2024 also reflected pre-tax merger-related costs of $1.9 million associated with the Company’s pending acquisition of Enterprise.

Excluding these merger-related costs and the related tax effects, full year 2024 operating net income was $193.4 million, or $4.55, on a diluted earnings per share basis.

No such adjustments were included in the Company’s full year 2023 results.

The Company is focused on organic growth, but will also consider acquisition opportunities that are expected to provide a satisfactory financial return, including the recent acquisition of Enterprise, which closed on July 1, 2025.

The transaction included the acquisition of $3.9 billion in loans and $4.4 billion in deposits, each at fair value, and resulted in the addition of twenty-seven branch locations in northern Massachusetts and southern New Hampshire.

Net income for the year ended December 31, 2025 was $205.1 million, or $4.44 on a diluted earnings per share basis, as compared to $192.1 million, or $4.52, on a diluted earnings per share basis for the year ended December 31, 2024, representing increases of 6.8% and a decrease of 1.8%, respectively.

Financial results for 2025 and 2024 also reflected pre-tax merger-related costs of $39.6 million and a $34.5 million provision for credit losses on non-PCD loans attributable to the closing of the Enterprise acquisition.

Excluding these merger-related expenses and provision for credit losses on non-PCD loans, and their related tax effects, full year 2025 operating net income was $260.4 million, or $5.64, on a diluted earnings per share basis compared to full year 2024 operating net income of $193.4 million, or $4.55, on a diluted earnings per share basis.

See “Non-GAAP Measures” below for a reconciliation of non-GAAP measures.

Full year 2025 results reflected the following key drivers:

• Net interest margin compression of 26 basis points as compared to the full year 2023;

• Loan growth of 1.6%;

• Deposit growth of 3.0%;

• Provision for credit loss primarily impacted by loss exposure in the commercial portfolios;

• Strong fee income;

with wealth assets under administration surpassing the $7.0 billion mark;

• Successful close of Enterprise acquisition on July 1, 2025

• Net interest margin increase of 29 basis points to 3.57% as compared to the full year 2024;

• Loan growth of 27.5% mainly due to the Enterprise acquisition, robust organic commercial and industrial loan growth;

• Deposit growth of 31.5%, mainly due to the Enterprise acquisition, organic growth in the demand deposit and money market categories;

• Total loan loss provision was $65.5 million for the year, inclusive of $34.5 million recognized for non-PCD loans acquired from Enterprise;

• Wealth assets under administration increased to $9.2 billion;

• Focused expense management;

• Strong capital levels, with tangible book value growth of $2.83 for the year.

• Tangible book value per share of $47.55, grew by $0.59 for the year;

• Repurchase of approximately 936,000 shares for $62.4 million.

Interest-Earning Assets

The results depicted in the following table reflect the trend of the Company’s interest-earning assets over the past five years and reflect a longer term overall strategy that typically emphasizes loan growth commensurate with overall economic growth.

Compared to the prior year, the composition of interest-earning assets at December 31, 2024 primarily reflects growth in the residential real estate and commercial loan portfolios, as well as decreased securities balances reflecting paydowns, calls and maturities.

The following table summarizes the Company’s average interest-earning assets for each year presented:

The results depicted in the following table reflect the trend of the Company’s interest-earning assets over the past five years.

The Company employs a longer term strategy that typically emphasizes loan growth commensurate with overall economic growth.

For the year-ended 2025, the increase in interest-earning assets was driven primarily the Enterprise acquisition, which included the addition of $3.9 billion in loans and $590.3 million in available for sale securities.

The following table summarizes the Company’s period end interest-earning assets for each year presented:

Management strives to be disciplined about loan pricing and considers interest rate sensitivity when generating loan assets.

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The Company’s overall sources of funding reflect strong business and retail deposit growth with a management emphasis on core deposit growth to fund loans.

In conjunction with deposit growth, total borrowings decreased by $517.0 million at December 31, 2024 as compared to December 31, 2023, driven by a reduction in Federal Home Loan Bank borrowings, along with the full redemption of $50.0 million in subordinated debentures during the first quarter of 2024.

For further details surrounding the Company’s liquidity risks and related strategy, see “Risk Management – Liquidity Risk” section below within Item 7 Management’s Discussion and Analysis of Financial Condition and Results of Operations within this Report.

The increase in funding sources during 2025 were driven primarily by the addition of $4.4 billion in deposits acquired from Enterprise during the third quarter of 2025.

The following chart shows the period end balances of the Company’s funding sources for each of the trailing five years:

The Company’s ratio of core deposits to total deposits decreased during 2023 and 2024, primarily attributable to the broader industry demand shift from core deposits to higher yielding time deposits.

The following chart shows the percentage of core deposits to total deposits for the trailing five years:

(1) The percentage of core deposits to total deposits presented above is inclusive of reciprocal money market deposits collected through the Company’s participation in the IntraFi Network.

The following table shows the net interest margin and cost of deposits trends for the trailing five year period, reflecting the 2024 impact from overall increases in deposit rates and the correlating direct impact on net interest margin:

Noninterest Income

Noninterest income is primarily comprised of deposit account fees, interchange and ATM fees, investment management fees and mortgage banking income.

The following chart shows the components of noninterest income over the past five years:

The net interest margin of 3.57% increased 29 basis points when compared to the prior year, including an 8 basis point lift from acquired loan purchase accounting accretion.

The remaining increase was driven by the acquisition of a slightly higher adjusted margin from Enterprise and continued benefit from long term asset repricing .

The following table shows the net interest margin and cost of deposits trends for the trailing five year period:

Non-interest Income

Non-interest income is primarily comprised of deposit account fees, interchange and ATM fees, investment management fees and mortgage banking income.

The increases in non-interest income during 2025 were driven primarily by the impact of the Enterprise acquisition.

The following chart shows the components of non-interest income over the past five years:

Expense Control

Management seeks to take a balanced approach to noninterest expense control by monitoring ongoing operating expenses while making needed capital expenditures and prudently investing in growth initiatives.

Management seeks to take a balanced approach to non-interest expense control by monitoring ongoing operating expenses while making needed capital expenditures and prudently investing in growth initiatives.

The Company’s primary expenses arise from Rockland Trust’s employee salaries and benefits, as well as expenses associated with buildings and equipment.

The following chart depicts the Company’s efficiency ratio on a GAAP basis (calculated by dividing noninterest expense by the sum of noninterest income and net interest income), as well as the Company’s efficiency ratio on a non-GAAP operating basis, (calculated by dividing noninterest expense, excluding certain noncore items, by the sum of noninterest income, excluding certain noncore items, and net interest income) over the past five years:

The following chart depicts the Company’s efficiency ratio on a GAAP basis (calculated by dividing non-interest expense by the sum of non-interest income and net interest income), as well as the Company’s efficiency ratio on a non-GAAP operating basis, (calculated by dividing non-interest expense, excluding certain non-core items, by the sum of non-interest income, excluding certain non-core items, and net interest income), over the past five years:

*See “Non-GAAP Measures” below for a reconciliation to GAAP financial measures.

The Company’s approach with respect to revenue and expense is designed to promote long-term earnings growth, which in turn contributes to capital growth.

Capital balances during 2024 were impacted primarily by earnings retention, dividends, changes in other comprehensive income, and opportunistic share repurchases.

Capital is primarily impacted by earnings retention, dividends, changes in other comprehensive income, and opportunistic share repurchases.

In addition, during 2025 capital results were impacted by the closing of the Enterprise acquisition.

The following chart shows the Company’s book value and tangible book value per share over the past five years:

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Cash dividends declared by the Company increased from an aggregate of $2.28 per share in 2024 to $2.36 per share in 2025, representing an increase of 3.5%.

During the first quarter of 2024, the Company repurchased 532,266 shares of its common stock for $31.0 million at an average price per share of $58.22, marking the completion of a $100 million buyback program announced in October 2023.

Additionally, during 2025, the Company repurchased approximately 936,000 shares of its common stock for $62.4 million.

Non-GAAP Measures

When management assesses the Company’s financial performance for purposes of making day-to-day and strategic decisions, it does so based upon the performance of its core banking business, which is primarily derived from the combination of net interest income and noninterest or fee income, reduced by operating expenses, the provision for credit losses, and the impact of income taxes and other noncore items shown in the table that follows.

When management assesses the Company’s financial performance for purposes of making day-to-day and strategic decisions, it does so based upon the performance of its core banking business, which is primarily derived from the combination of net interest income and non-interest or fee income, reduced by operating expenses, the provision for credit losses, and the impact of income taxes and other non-core items shown in the table that follows.

There are items that impact the Company’s results that management believes are unrelated to its core banking business such as gains or losses on the sales of securities, merger and acquisition expenses, provision for credit losses on acquired portfolios, loss on extinguishment of debt, impairment and other items.

Management, therefore, excludes items management considers to be noncore when computing the Company’s non-GAAP operating earnings and operating EPS, noninterest income on an operating basis and efficiency ratio on an operating basis.

Management, therefore, excludes items management considers to be non-core when computing the Company’s non-GAAP operating earnings and operating EPS, non-interest income on an operating basis, non-interest expense on an operating basis, and efficiency ratio on an operating basis.

Management believes excluding these items facilitates greater visibility into the Company’s core banking business and underlying trends that may, to some extent, be obscured by inclusion of such items.

Management also supplements its evaluation of financial performance with an analysis of tangible book value per share (which is computed by dividing stockholders’ equity less goodwill and identifiable intangible assets, or tangible common equity, by common shares outstanding) and with the Company’s tangible common equity ratio (which is computed by dividing tangible common equity by tangible assets) which are non-GAAP measures.

The Company has included information on these tangible ratios because management believes that investors may find it useful to have access to the same analytical tools used by management to assess performance and identify trends.

The Company has recognized goodwill and other intangible assets in conjunction with merger and acquisition activities.

Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, facilitates comparison of the capital adequacy of the Company to other companies in the financial services industry.

These non-GAAP measures should not be viewed as a substitute for financial results determined in accordance with GAAP.

An item which management deems to be noncore and excludes when computing these non-GAAP measures can be of

substantial importance to the Company’s results for any particular period.

The Company’s non-GAAP performance measures are not necessarily comparable to similarly named non-GAAP performance measures which may be presented by other companies.

The following table summarizes the impact of noncore items on net income and reconciles non-GAAP net operating earnings to net income available to common shareholders for the periods indicated:

Management also supplements its evaluation of financial performance with analysis of tangible book value per share (which is computed by dividing stockholders’ equity less goodwill and identifiable intangible assets, or “tangible common equity,” by common shares outstanding), the tangible common equity ratio (which is computed by dividing tangible common equity by “tangible assets,” defined as total assets less goodwill and other intangibles), and return on average tangible common equity (which is computed by dividing net income by average tangible common equity).

The Company has included information on tangible book value per share, the tangible common equity ratio and return on average tangible common equity because management believes that investors may find it useful to have access to the same analytical tools used by management.

As a result of merger and acquisition activity, the Company has recognized goodwill and other intangible assets in conjunction with business combination accounting principles.

Excluding the impact of goodwill and other intangibles in measuring asset and capital values for the ratios provided, along with other bank standard capital ratios, provides a framework to compare the capital adequacy of the Company to other companies in the financial services industry.

These non-GAAP measures should not be viewed as a substitute for operating results and other financial measures determined in accordance with GAAP.

An item which management excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular quarter or year.

The Company’s non-GAAP performance measures, including operating net income, operating EPS, operating return on average assets, operating return on average common equity, adjusted margin, tangible book value per share and the tangible common equity ratio, are not necessarily comparable to non-GAAP performance measures which may be presented by other companies.

The following table summarizes the impact of non-core items on net income and reconciles non-GAAP net operating earnings to net income available to common shareholders for the periods indicated:

Years Ended December 31

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Non-GAAP adjustments

Noninterest expense components

Provision for non-PCD acquired loans 34,519 — 0.75 —

Non-interest expense components

merger and acquisition expenses 39,635 1,902 0.86 0.04

Noncore increases to income before taxes 1,902 — 0.04 —

Net tax benefit associated with noncore items (1) (535) — (0.01) —

Noncore increases to net income 1,367 — 0.03 —

Non-core increases to income before taxes 74,154 1,902 1.61 0.04

Net tax benefit associated with non-core items (1)

(19,239) (535) (0.42) (0.01)

Add - adjustments for tax effect of previously incurred merger and acquisition expenses 381 — 0.01 —

Total tax impact (18,858) (535) (0.41) (0.01)

Non-core increases to net income 55,296 1,367 1.20 0.03

Net operating earnings (Non-GAAP) $ 260,418 $ 193,448 $ 5.64 $ 4.55

(1) The net tax benefit associated with noncore items is determined by assessing whether each noncore item is included or excluded from net taxable income and applying the Company’s combined marginal tax rate only to those items included in net taxable income.

The following table summarizes the impact of noncore items with respect to the Company’s total revenue, noninterest income as a percentage of total revenue, and the efficiency ratio for the periods indicated:

(1) The net tax benefit associated with non-core items is determined by assessing whether each non-core item is included or excluded from net taxable income and applying the Company’s combined marginal tax rate only to those items included in net taxable income.

The following table summarizes the impact of non-core items with respect to the Company’s total revenue, non-interest income as a percentage of total revenue, and the efficiency ratio for the periods indicated:

Years Ended December 31

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Net interest income (GAAP) $ 708,831 $ 561,729 $ 606,521 $ 613,249 $ 401,559 (a)

Noninterest income (GAAP) $ 128,014 $ 124,609 $ 114,667 $ 105,850 $ 111,440 (b)

Noninterest expense (GAAP) $ 406,366 $ 392,746 $ 373,662 $ 332,529 $ 273,832 (c)

Loss on termination of derivatives — — — — 684

Non-interest income (GAAP) $ 148,689 $ 128,014 $ 124,609 $ 114,667 $ 105,850 (b)

Non-interest expense (GAAP) $ 529,881 $ 406,366 $ 392,746 $ 373,662 $ 332,529 (c)

Merger and acquisition expenses 39,635 1,902 — 7,100 40,840

Noninterest expense on an operating basis (Non-GAAP) $ 404,464 $ 392,746 $ 366,562 $ 291,689 $ 273,148 (d)

Non-interest expense on an operating basis (Non-GAAP) $ 490,246 $ 404,464 $ 392,746 $ 366,562 $ 291,689 (d)

Total revenue (GAAP) $ 857,520 $ 689,743 $ 731,130 $ 727,916 $ 507,409 (a+b)

Noninterest income as a % of total revenue (GAAP) (calculated by dividing total noninterest income by total revenue) 18.56 % 17.04 % 15.75 % 20.86 % 23.26 % (b/(a+b))

Efficiency ratio (GAAP) (calculated by dividing total noninterest expense by total revenue) 58.92 % 53.72 % 51.33 % 65.53 % 57.15 % (c/(a+b))

Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total noninterest expense on an operating basis by total revenue) 58.64 % 53.72 % 50.36 % 57.49 % 57.00 % (d/(a+b))

Non-interest income as a % of total revenue (GAAP) (calculated by dividing total non-interest income by total revenue) 17.34 % 18.56 % 17.04 % 15.75 % 20.86 % (b/(a+b))

Non-interest income as a % of total revenue on an operating basis (Non-GAAP) (calculated by dividing total non-interest income on an operating basis by total revenue) 17.34 % 18.56 % 17.04 % 15.75 % 20.86 % (c/(a+c))

Efficiency ratio (GAAP) (calculated by dividing total non-interest expense by total revenue) 61.79 % 58.92 % 53.72 % 51.33 % 65.53 % (c/(a+b))

Efficiency ratio on an operating basis (Non-GAAP) (calculated by dividing total non-interest expense on an operating basis by total revenue) 57.17 % 58.64 % 53.72 % 50.36 % 57.49 % (d/(a+b))

The following table summarizes the calculation of the Company’s tangible common equity ratio and tangible book value per share for the periods indicated:

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Stockholders’ equity 3,565,728 2,993,120 2,895,251 2,886,701 3,018,449

Nonperforming loans 101,529 54,383 54,881 27,820 66,861

Nonperforming assets 101,529 54,493 54,881 27,820 66,861

Non-performing loans 83,557 101,529 54,383 54,881 27,820

Non-performing assets 85,657 101,529 54,493 54,881 27,820

Operating data

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Provision for credit losses 65,469 36,250 23,250 6,500 18,205

Noninterest income 128,014 124,609 114,667 105,850 111,440

Noninterest expenses 406,366 392,746 373,662 332,529 273,832

Non-interest income 148,689 128,014 124,609 114,667 105,850

Non-interest expenses 529,881 406,366 392,746 373,662 332,529

Net income 205,122 192,081 239,502 263,813 120,992

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Asset quality ratios

Nonperforming loans as a percent of gross loans 0.70 % 0.38 % 0.39 % 0.20 % 0.71 %

Nonperforming assets as a percent of total assets 0.52 % 0.28 % 0.28 % 0.14 % 0.51 %

Non-performing loans as a percent of gross loans 0.45 % 0.70 % 0.38 % 0.39 % 0.20 %

Non-performing assets as a percent of total assets 0.34 % 0.52 % 0.28 % 0.28 % 0.14 %

Allowance for credit losses as a percent of total loans 1.03 % 1.17 % 1.00 % 1.09 % 1.08 %

Allowance for credit losses as a percent of nonperforming loans 167.42 % 261.52 % 277.73 % 528.12 % 169.59 %

Allowance for credit losses as a percent of non-performing loans 227.24 % 167.42 % 261.52 % 277.73 % 528.12 %

Capital ratios

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Tangible equity to tangible assets (1)

9.88 % 10.86 % 10.31 % 10.26 % 10.31 %

Tier 1 leverage capital ratio 10.15 % 11.32 % 10.96 % 10.99 % 12.03 %

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Treasury, U.S.

government agency securities, agency mortgage-backed securities, agency collateralized mortgage obligations, and small business administration pooled securities.

government agency securities, agency mortgage-backed securities, agency collateralized mortgage obligations, taxable and non-taxable municipal securities and small business administration pooled securities.

Also included in the Company’s securities portfolio are trading and equity securities related to certain employee benefit programs.

The majority of these securities are investment grade debt obligations with average lives of five years or less.

government agency securities entail a lesser degree of risk than loans made by the Bank by virtue of the guarantees that back them, require less capital under risk-based capital rules than noninsured or nonguaranteed mortgage loans, are more liquid than individual mortgage loans, and may be used to collateralize borrowings or other obligations of the Bank.

government agency securities entail a lesser degree of risk than loans made by the Bank by virtue of the guarantees that back them, require less capital under risk-based capital rules than non-insured or non-guaranteed mortgage loans, are more liquid than individual mortgage loans, and may be used to collateralize borrowings or other obligations of the Bank.

The Bank views its securities portfolio as a source of income and liquidity.

Interest and principal payments generated from securities provide a source of liquidity to fund loans and meet short-term cash needs.

Total securities decreased by $219.5 million, or 7.5%, at December 31, 2024 as compared to December 31, 2023, as new purchases of $130.4 million and $22.6 million in unrealized gains related to the available for sale portfolio were offset by calls, paydowns, and maturities.

Total securities increased by $598.2 million, or 22.1%, at December 31, 2025 as compared to December 31, 2024, primarily attributable to the acquisition of the Enterprise available for sale securities portfolio.

During the twelve months ended December 31, 2025, new purchases of $426.2 million and $55.4 million in unrealized gains in the available for sale portfolio were offset by sales, maturities, calls, and paydowns in the combined available for sale and held to maturity portfolios.

The ratio of securities to total assets decreased to 13.3% at December 31, 2025 as compared to 14.0% at December 31, 2024.

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Agency collateralized mortgage obligations 269,576 13.4 % 28,995 2.3 %

State, county and municipal securities 194 — % 190 — %

Non-taxable municipal securities 12,558 0.6 % 194 — %

Taxable municipal securities 220,520 11.0 % — — %

Pooled trust preferred securities issued by banks and insurers 1,042 0.1 % 1,095 0.1 %

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Amortized cost of securities held to maturity

government agency securities — — % 29,521 1.9 %

treasury securities $ 100,872 7.9 % $ 100,791 7.0 %

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Agency collateralized mortgage obligations 370,698 29.0 % 422,827 29.5 %

Single issuer trust preferred securities issued by banks — — % 1,500 0.1 %

Small business administration pooled securities 112,554 8.8 % 122,868 8.6 %

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Agency collateralized mortgage obligations — 4.2 % 2.1 % 4.3 % 4.3 %

State, county, and municipal securities — 3.0 % — — 3.0 %

Non-taxable municipal securities 3.9 % 3.7 % 4.1 % — 3.8 %

Taxable municipal securities — 4.2 % 4.4 % 2.8 % 4.3 %

Pooled trust preferred securities issued by banks and insurers — — — 4.4 % 4.4 %

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The Company incurred no material losses related to mortgage repurchases during the years ended December 31, 2025, 2024, and 2023.

The Company experienced a lower volume of residential real estate loan sales for the years ended December 31, 2024 and 2023, as compared to 2022, driven primarily by reduced customer demand in the higher interest rate environment.

The volume of residential real estate loan sales fluctuate based on customer demands, which is often driven by the interest rate environment.

The following table shows the total residential loans that were closed and whether the amounts were held in the portfolio or sold (or held for sale) in the secondary market for the periods indicated:

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Total closed loans $ 549,794 $ 462,040 $ 592,656

During 2024, a larger portion of new originations were sold in the secondary market versus retained in the Company’s portfolio as compared to the same prior year periods, reflecting the Company’s strategy to shift its residential production to the saleable market.

When a loan is sold, the Company may decide to also sell the servicing of sold loans for a servicing release premium, simultaneously with the sale of the loan, or the Company may opt to sell the loan and retain the servicing.

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Sold with servicing rights retained (1)

1,953 8,333 649

Total loans sold $ 262,768 $ 254,599 $ 76,197

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See Note 10, “Derivatives and Hedging Activities,” within the Notes to Consolidated Financial Statements included in Item 8 of this Report for more information on mortgage activity and mortgage related derivatives.

Loan Portfolio The Company’s loan portfolio at December 31, 2024 increased by $230.3 million, or 1.6%, when compared to December 31, 2023.

Total commercial loans increased by $145.2 million, or 1.4%, fueled primarily by the commercial and industrial portfolio, which increased by $121.8 million, or 4.2%, along with steady growth in the small business portfolio, which increased by $29.8 million, or 11.8%, during the period, while the combined commercial real estate and construction portfolios remained relatively flat.

The total consumer portfolio increased $85.1 million, or 2.4%, reflecting solid growth in both the home equity and residential real estate portfolios, which increased by $42.5 million, or 3.9%, and $35.8 million, or 1.5%, respectively.

Loan Portfolio The Company’s total loan portfolio at December 31, 2025 increased $4.0 billion, or 27.5%, when compared to December 31, 2024, primarily due to the Enterprise acquisition.

On the commercial side, the commercial and industrial portfolio increased organically by 9.1% but was offset by a decline in the commercial real estate and commercial construction portfolios.

Organically, the consumer real estate portfolio increased by 1.2%, driven by growth within the home equity portfolio.

The following table summarizes loan growth/decline during the periods indicated:

Table 8 - Components of Loan Growth/(Decline)

December 31 December 31 Enterprise Organic Growth/ Organic Growth/

2025 2024 Acquisition (Decline) $ (Decline) %

(Dollars in thousands)

Commercial and industrial $ 4,611,789 $ 3,246,455 $ 979,072 $ 386,262 9.14 %

Commercial real estate 8,275,408 6,839,705 1,742,275 (306,572) (3.57) %

Commercial construction 1,399,193 782,078 664,281 (47,166) (3.26) %

Total commercial 14,286,390 10,868,238 3,385,628 32,524 0.23 %

Residential real estate 2,873,443 2,460,600 425,695 (12,852) (0.45) %

Home equity 1,297,662 1,140,168 95,096 62,398 5.05 %

Total Consumer real estate 4,171,105 3,600,768 520,791 49,546 1.20 %

Total other consumer 46,282 39,372 6,693 217 0.47 %

Total loans $ 18,503,777 $ 14,508,378 $ 3,913,112 $ 82,287 0.45 %

The following table sets forth information concerning the composition of the Bank’s loan portfolio by loan type at the dates indicated:

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Commercial construction 1,399,193 7.6 % 782,078 5.4 %

Small business 281,781 1.9 % 251,956 1.8 %

Residential real estate 2,873,443 15.5 % 2,460,600 17.0 %

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Commercial construction (1)

Small business 32,114 96,773 12,342 57,692 198,921

83,195 97,075 18,051 112,282 310,603

Residential real estate 57,166 292,475 672,803 773,103 1,795,547

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Commercial construction (1)

Small business 23,365 27,479 9,126 22,890 82,860

395,423 229,371 41,389 422,407 1,088,590

Residential real estate 26,942 200,485 203,528 646,941 1,077,896

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Asset Quality The Company continually monitors the asset quality of the loan portfolio using all available information.

Based on this assessment, loans demonstrating certain payment issues or other weaknesses may be categorized as delinquent, nonperforming and/or put on nonaccrual status.

Based on this assessment, loans demonstrating certain payment issues or other weaknesses may be categorized as delinquent, non-performing and/or put on non-accrual status.

Further details surrounding relevant asset quality categories are summarized below:

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The Company seeks to make arrangements to resolve any delinquent or default situation over the shortest possible time frame.

Generally, the Company requires that a delinquency notice be mailed to a borrower upon expiration of a grace period (typically no longer than 15 days beyond the due

Generally, the Company requires that a delinquency notice be mailed to a borrower upon expiration of a grace period (typically no longer than 15 days beyond the due date).

Reminder notices may be sent and telephone calls may be made prior to the expiration of the grace period.

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The borrower’s needs are considered as much as reasonably possible without jeopardizing the Bank’s position.

A late charge is usually assessed on loans upon expiration of the grace period.

Nonaccrual Loans As a general rule, loans 90 days or more past due with respect to principal or interest are classified as nonaccrual loans.

A late charge is usually assessed on loans upon expiration of the grace period as permitted by loan agreements.

Non-accrual Loans As a general rule, loans 90 days or more past due with respect to principal or interest are classified as non-accrual loans, or sooner if management considers such action to be prudent.

However, certain loans that are 90 days or more past due may be kept on an accruing status if the loans are well secured and in the process of collection.

Income accruals are suspended on all nonaccrual loans and all previously accrued and uncollected interest is reversed against current income.

A loan remains on nonaccrual status until it becomes current with respect to principal and interest and remains current for a minimum period of six months, the loan is liquidated, or when the loan is determined to be uncollectible and is charged-off against the allowance for credit losses.

Income accruals are suspended on all non-accrual loans and all previously accrued and uncollected interest is reversed against current income.

A loan remains on non-accrual status until it becomes current with respect to principal and interest and remains current for a minimum period of six months, the loan is liquidated, or when the loan is determined to be uncollectible and is charged-off against the allowance for credit losses.

Loan Modifications In the course of resolving problem loans, the Company may choose to modify the contractual terms of certain loans.

The Company attempts to work out an alternative payment schedule with the borrower in order to avoid or cure a default.

Terms may be modified to fit the ability of the borrower to repay in line with its current financial status and may include adjustments to term extensions, interest rates, other than insignificant payment delays and/or a combination thereof.

Terms may be modified to fit the ability of the borrower to repay in line with its current financial status and may include adjustments to term extensions, interest rates, and accommodations for other than insignificant payment delays and/or a combination thereof.

These actions are intended to minimize economic loss and avoid foreclosure or repossession of collateral.

If such efforts by the Bank do not result in satisfactory performance, the loan is referred to legal counsel, at which time foreclosure proceedings are initiated.

At any time prior to a sale of the property at foreclosure, the Bank may terminate foreclosure proceedings if the borrower is able to work out a satisfactory payment plan.

If such efforts by the Company do not result in satisfactory performance, the loan is referred to legal counsel, at which time foreclosure proceedings are initiated.

At any time prior to a sale of the property at foreclosure, the Company may terminate foreclosure proceedings if the borrower is able to work out a satisfactory payment plan.

All loan modifications are reviewed by the Company to identify if a borrower is deemed to be experiencing financial difficulty at time of the modification.

1 unchanged sentence

PCD loans are recorded at amortized cost with an allowance for credit losses recorded upon purchase.

Nonperforming Assets Nonperforming assets are typically comprised of nonperforming loans and other real estate owned (“OREO”).

Nonperforming loans consist of nonaccrual loans and loans that are 90 days or more past due but still accruing interest.

Non-performing Assets Non-performing assets are typically comprised of non-performing loans and other real estate owned (“OREO”).

Non-performing loans consist of non-accrual loans and loans that are 90 days or more past due but still accruing interest.

OREO consists of real estate properties, which have primarily served as collateral to secure loans, that are controlled or owned by the Bank.

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

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

All costs incurred thereafter in maintaining the property are generally charged to noninterest expense.

In the event the real estate is utilized as a rental property, net rental income and expenses are recorded as incurred within noninterest expense.

The following table sets forth information regarding nonperforming assets held by the Bank at the dates indicated:

Table 10 - Nonperforming Assets

Subsequent increases in the

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

All costs incurred thereafter in maintaining the property are generally charged to non-interest expense.

In the event the real estate is utilized as a rental property, net rental income and expenses are recorded as incurred within non-interest expense.

The following table sets forth information regarding non-performing assets held by the Bank at the dates indicated:

Table 11 - Non-performing Assets

(Dollars in thousands)

Loans accounted for on a nonaccrual basis

Loans accounted for on a non-accrual basis

Commercial and industrial $ 9,160 $ 14,454

Commercial real estate 50,515 74,343

Small business 302 398

Commercial construction 3,693 —

Residential real estate 15,043 10,243

1 unchanged sentence

Other consumer 44 10

Total nonperforming loans 101,529 54,383

Total non-performing loans 83,557 101,529

Other real estate owned 2,100 —

Total nonperforming assets $ 101,529 $ 54,493

Nonperforming loans as a percent of gross loans 0.70 % 0.38 %

Nonperforming assets as a percent of total assets 0.52 % 0.28 %

The following table summarizes the changes in nonperforming assets for the periods indicated:

Table 11 - Activity in Nonperforming Assets

Total non-performing assets $ 85,657 $ 101,529

Non-performing loans as a percent of gross loans 0.45 % 0.70 %

Non-performing assets as a percent of total assets 0.34 % 0.52 %

The following table summarizes the changes in non-performing assets for the periods indicated:

Table 12 - Activity in Non-performing Assets

(Dollars in thousands)

Nonperforming assets beginning balance $ 54,493 $ 54,881

New to nonperforming 87,721 58,712

Non-performing assets beginning balance $ 101,529 $ 54,493

Acquired non-performing loans 22,918 —

New to non-performing 101,329 87,721

Loans charged-off (56,804) (10,347)

4 unchanged sentences

Sale of other real estate owned — (110)

Nonperforming assets ending balance $ 101,529 $ 54,493

Other (556) 69

Non-performing assets ending balance $ 85,657 $ 101,529

Allowance for Credit Losses The allowance for credit losses is maintained at a level that management considers appropriate to provide for the Company’s current estimate of expected lifetime credit losses on loans measured at amortized cost.

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In accordance with its Allowance for Credit Losses Program, the Company uses the Current Expected Credit Losses (or “CECL”) model methodology to estimate credit losses for financial assets on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output.

The model estimates expected credit losses using loan level data over the contractual life of the exposure, which is adjusted for estimated prepayments.

Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period of one year, beyond which is a reversion to the Company’s historical long-run average over a period of six months.

The Company’s qualitative assessment is structured based upon nine qualitative risk factors impacting the expected risk of loss within the loan portfolio, with an additional factor

designed to capture model imprecision.

The model estimates expected credit losses using loan

level data over the contractual life of the exposure, which is adjusted for estimated prepayments.

Economic forecasts are incorporated into the estimate over a reasonable and supportable forecast period of 12 months, beyond which is a reversion to the Company’s historical long-run average over a period of six months.

The Company’s qualitative assessment is structured based upon nine qualitative risk factors impacting the expected risk of loss within the loan portfolio, with an additional factor designed to capture model imprecision.

Loans that do not share similar risk characteristics with any pools of assets are subject to individual assessment and are removed from the collectively assessed pools to avoid double counting.

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The latter approach is used for loans deemed to be collateral dependent or when foreclosure is probable.

Management’s allowance for credit loss estimate incorporates an economic forecast over a reasonable and supportable period of 12 months.

As of December 31, 2024, the forecast selected by management assumes that the Federal Reserve will make two 25 basis point cuts to the policy rate in 2025 and gradually reduce rates to a neutral level of 3% by late 2026, that progress toward inflation normalization will be slowed as a result of expected fiscal, tariff and immigration policies implemented by the new U.S.

presidential administration, and that the 10-year treasury yield will remain elevated near 4% through 2025 and will only gradually decline by the end of the decade.

Additionally, the allowance for credit losses is qualitatively adjusted on a quarterly basis in order to ensure coverage for relatio nships that are deemed to be more at risk within certain industries, specific collateral types, or other specific characteristics that may be highly impacted by the current economic environment.

Management’s allowance for credit loss estimate inco rporates an economic forecast over a reasonable and supportable period of 12 months.

As of December 31, 2025, management utilized the Moody’s Baseline forecast to estimate the effect of anticipated current and future economic conditions on the Company’s allowance for credit losses.

This scenario selected by management assumes that general economic conditions will reflect a slight increase in momentum in the near term, that monetary policy will be impacted by a gradual reduction in Federal Reserve policy rates, and that progress toward inflation will be slowed as a result of changes in international trade policies.

A dditionally, the allowance for credit losses is qualitatively adjusted on a quarterly basis in order to ensure coverage for relationships that are deemed to be more at risk within certain industries, specific collateral types, or other specific characteristics that may be highly impacted by the current economic environment.

The balance of allowance for credit losses increased by $19.9 million to $189.9 million as of December 31, 2025, as compared to $170.0 million at December 31, 2024.

The increase was driven primarily by $43.5 million in initial allowance reserves recorded on the acquired Enterprise portfolio, including $34.5 million and $9.0 million attributable to non-PCD and PCD loans, respectively, as well as additional specific reserve allocations on certain commercial loans during 2025.

These increases were partially offset by charge-offs on several classified commercial loans which had been previously reserved for.

The following table summarizes the ratio of net charge-offs to average loans outstanding within each major loan category for the periods presented:

6 unchanged sentences

Commercial construction — 1,112,459 — %

Small business 595 267,212 0.22 %

Residential real estate — 2,688,113 — %

1 unchanged sentence

Other consumer (1)

2,524 39,286 6.42 %

Total $ 54,596 $ 16,484,816 0.33 %

3 unchanged sentences

Commercial construction — 800,254 — %

Small business 392 235,108 0.17 %

Residential real estate — 2,434,114 — %

1 unchanged sentence

Other consumer (1)

2,052 33,761 6.08 %

Total $ 8,488 $ 14,362,280 0.06 %

3 unchanged sentences

Commercial construction — 1,019,871 — %

Small business 47 204,982 0.02 %

Residential real estate — 2,217,971 — %

1 unchanged sentence

Other consumer (1)

1,796 31,202 5.76 %

Total $ 33,447 $ 14,084,113 0.24 %

(1) Other consumer portfolio is inclusive of deposit account overdrafts recorded as loan balances and the associated net charge-offs.

Net charge-offs were $54.6 million for the year ended December 31, 2025, compared to $8.5 million for the year ended December 31, 2024.

The elevated charge-off activity for the year ended December 31, 2025 was primarily attributable to charge-offs recognized on several classified commercial loans during the year.

For purposes of the allowance for credit losses, management segregates the portfolio based upon loans sharing similar risk characteristics.

The allocation of the allowance for credit losses is made to each loan category using the analytical techniques and estimation methods described in this Report.

While these amounts represent management’s best estimate of credit losses at the evaluation dates, they are not necessarily indicative of either the categories in which actual losses may occur or the extent of such actual losses that may be recognized within each category.

While these amounts represent management’s best estimate of credit losses at the evaluation dates, they are not necessarily indicative of either the categories in which actual losses may occur or the extent of actual losses that may be recognized within each category.

Each of these loan categories possess unique risk characteristics that are considered when determining the appropriate level of allowance for each segment.

8 unchanged sentences

Commercial construction 14,254 7.5 % 7.6 % 8,166 4.8 % 5.4 %

Small business 4,182 2.5 % 1.9 % 3,963 2.8 % 1.8 %

Residential real estate 29,254 15.4 % 15.5 % 25,238 14.8 % 17.0 %

3 unchanged sentences

To determine if a loan should be charged-off, all possible sources of repayment are analyzed.

Possible sources of repayment include the potential for future cash flows, the value of the Bank’s collateral, and the strength of co-makers or guarantors, if applicable.

Possible sources of repayment include the potential for future cash flows, the value of the Bank’s collateral, and the strength of co-makers or guarantors.

When available information confirms that specific loans or portions thereof are uncollectible, these amounts are promptly charged-off against the allowance for credit losses and any recoveries of such previously charged-off amounts are credited to the allowance.

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The Company views the holdings as a necessary long-term investment for the purpose of balance sheet liquidity and not for investment return.

The Company’s investments in FHLB of Boston stock decreased to $31.6 million at December 31, 2024 compared to $43.6 million at December 31, 2023, reflecting reduced levels of outstanding FHLB borrowings, which decreased by $467.0 million, or 42.2%, from $1.1 billion at December 31, 2023 to $638.5 million at December 31, 2024, largely attributable to growth in deposit balances experienced during 2024.

Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets were $997.4 million and $1.0 billion at December 31, 2024 and December 31, 2023.

The Company’s investments in FHLB of Boston stock decreased to $21.8 million at December 31, 2025 compared to $31.6 million at December 31, 2024 in conjunction with paydowns of FHLB term borrowings during the twelve months of 2025, including the paydown of approximately $50.0 million of FHLB borrowings assumed from the Enterprise acquisition.

Goodwill and Other Intangible Assets Goodwill and Other Intangible Assets were $1.2 billion and $1.0 billion at December 31, 2025 and December 31, 2024.

The Company typically performs its annual goodwill impairment testing during the third quarter of the year, unless certain indicators suggest earlier testing to be warranted, using a combined qualitative and quantitative approach.

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If the carrying amount of the reporting unit exceeds its fair value, an impairment loss will be recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit.

The Company’s annual impairment test was performed as of August 31, 2024 using a quantitative impairment test which leveraged a combination of income and market valuation approaches to determine the implied fair value of the reporting unit.

The income valuation approach utilized a discounted cash flow analysis, while the market approach utilized a combination of the guideline public company and comparative transactions approaches, whereby market multiples used to estimate fair values were derived from market stock prices of, and comparable transactions announced by public companies that are engaged in the same or similar lines of business.

The results of the annual assessment determined that the Company’s goodwill was not impaired and that the fair value of its reporting unit was in excess of its carrying value by greater than 10%.

Events or circumstances that could negatively impact the fair value of the Company’s reporting unit in the future include a sustained decrease in the Company’s stock price, continued decline in industry peer multiples, and further deterioration of the Company’s financial projections.

The quantitative impairment test relied upon certain key assumptions, including projected financial information deemed by management to be reasonable based on the Company’s past and expected future performance, as well as a discount rate consistent with the Company’s cost of capital.

Additionally, management performed sensitivity analyses over various financial assumptions used in the model noting results which further corroborated the conclusions reached.

The Company’s annual impairment test was performed as of August 31, 2025 and it was determined that the Company’s goodwill was not impaired.

Other intangible assets are also reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable.

2 unchanged sentences

Cash Surrender Value of Life Insurance Policies The Bank holds life insurance policies for the purpose of offsetting its future obligations to its employees under its retirement and benefits plans.

The cash surrender value of life insurance policies was $304.0 million and $297.4 million at December 31, 2024 and December 31, 2023, respectively.

The cash surrender value of life insurance policies was $378.6 million and $304.0 million at December 31, 2025 and December 31, 2024, respectively, reflecting approximately $68.4 million of policies obtained from the Enterprise acquisition.

The Company recorded tax exempt income from life insurance policies in the amounts of $9.4 million, $8.1 million, and $7.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.

The Company also recorded gains on life insurance benefits of $2.0 million, $457,000, and $2.3 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Deposits At December 31, 2024, total deposits were $15.3 billion, representing a $440.4 million, or 3.0% increase compared to $14.9 billion at December 31, 2023, reflecting continued consumer demand for higher cost time deposits, along with strong business and municipal deposit inflows.

The total cost of deposits was 1.63% for the year ended December 31, 2024, representing an increase of 67 basis points from the prior year, reflecting an overall higher rate environment in 2024 as compared to the prior year.

Deposits At December 31, 2025, total deposits were $20.1 billion, representing a $4.8 billion, or 31.5% increase compared to $15.3 billion at December 31, 2024.

Total non-interest bearing demand deposits comprised 27.8% of total deposits at December 31, 2025, down only slightly from 28.7% at December 31, 2024.

The total cost of deposits was 1.53% for the year ended December 31, 2025, representing a decrease of 10 bas is points from the prior year.

The Company’s deposits are comprised primarily of core deposits (demand, savings and money market), as well as time deposits.

The Company’s ratio of core deposits, inclusive of reciprocal money market deposits, to total deposits represented 81.7% at December 31, 2024 compared to 84.6% at December 31, 2023, with the decrease driven primarily by core deposit outflows in conjunction with growth in time deposits.

The 2025 growth in deposit balances was driven primarily by $4.4 billion in balances acquired from Enterprise, as well as organic growth of $458.1 million, or 2.3%, during the twelve months ended 2025.

The Company’s ratio of core deposits, inclusive of reciprocal money market deposits, to total deposits represented 83.7% at December 31, 2025 compared to 81.7% at December 31, 2024.

In addition, the Company may also utilize brokered deposit sources, as needed, with balances of $6.0 million and $61.2 million outstanding at December 31, 2025 and December 31, 2024, respectively.

The Company’s deposit accounts are insured to the maximum extent permitted by the Deposit Insurance Fund (“DIF”) which is administered by the Federal Deposit Insurance Corporation (“FDIC”).

The decrease was due to the maturity of $55.3 million of brokered certificates of deposit during 2025.

Excluding the effects of the Enterprise acquisition, the Company’s deposits have increased on a net organic basis as compared to the prior year end as summarized in the table below:

Table 15 - Components of Deposit Growth/(Decline)

2025 December 31

2024 Enterprise Bancorp Acquisition Organic Growth/(Decline) $ Organic Growth/(Decline) %

(Dollars in thousands)

Non-interest-bearing demand deposits $ 5,600,955 $ 4,390,703 $ 1,040,758 $ 169,494 3.1 %

Savings and interest checking 6,482,970 5,207,548 1,170,875 104,547 1.6 %

Money market 4,774,645 2,960,381 1,411,120 403,144 9.2 %

Time certificates of deposits 3,268,220 2,747,346 739,957 (219,083) (6.3) %

Total $ 20,126,790 $ 15,305,978 $ 4,362,710 $ 458,102 2.3 %

The Company’s deposit accounts are insured to the maximum extent permitted by the Deposit Insurance Fund which is administered by the Federal Deposit Insurance Corporation ( “ FDIC”).

The FDIC offers insurance coverage on deposits up to the federally insured limit of $250,000.

The Company participates in the IntraFi Network, allowing it to provide

easy access to multi-million dollar FDIC deposit insurance protection on certificate of deposit and money market investments for consumers, businesses and public entities.

This channel allows the Company to access a reciprocal deposit exchange that can be used to benefit customers seeking increased FDIC insurance protection, and amounted to $1.1 billion and $959.1 million in deposits, at December 31, 2024 and December 31, 2023, respectively.

The Company participates in the IntraFi Network, allowing it to provide easy access to multi-million dollar FDIC deposit insurance protection on certificate of deposit and money market investments for consumers, businesses and public entities.

This channel allows the Company to access a reciprocal deposit exchange that can be used to benefit customers seeking increased FDIC insurance protection, and amounted to $1.6 billion and $1.1 billion in deposits, at December 31, 2025 and December 31, 2024, respectively.

The estimated balance of uninsured deposits at the Bank were $6.5 billion and $5.0 billion as of December 31, 2025 and December 31, 2024, respectively.

Included in these amounts are $814.0 million and $720.5 million of collateralized deposits, which offer additional protection to the customer.

Included in these amounts are $932.0 million and $814.0 million of collateralized deposits, which offer additional protection.

Scheduled maturities of time deposits not covered by deposit insurance at December 31, 2025, were as follows:

10 unchanged sentences

Maintaining available borrowing capacity provides the Bank with a contingent source of liquidity.

Borrowings were $701.4 million at December 31, 2024, representing a decrease of $517.0 million, compared to December 31, 2023.

The decrease was experienced primarily within Federal Home Loan Bank borrowings, which decreased $467.0 million in conjunction with deposit balance growth during 2024.

In addition, the Company fully redeemed its outstanding subordinated debentures with an aggregate principal amount of $50.0 million during the first quarter of 2024.

Borrowings were $825.8 million at December 31, 2025, representing an increase of $124.5 million, compared to December 31, 2024.

The increase was driven primarily by a $300.0 million subordinated debt raise completed by the Company in March 2025, as well as a $50.0 million line of credit advance during the fourth quarter of 2025.

These increases were partially offset by $237.0 million in paydowns on FHLB borrowings during the twelve months ended December 31, 2025.

Additionally, at the July 15, 2025 call date, the Company redeemed in full $60.0 million in subordinated notes assumed as part of the Enterprise merger.

The Company also paid down approximately $50.0 million in FHLB borrowings acquired from Enterprise.

See Note 8, “Borrowings” within the Notes to Consolidated Financial Statements included in Item 8 of this Report for more information regarding borrowings.

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The Company’s Investment Management Group provides investment management and trust services to individuals, institutions, small businesses, and charitable institutions.

Accounts maintained by the Investment Management Group consist of managed and nonmanaged accounts.

Managed accounts are those for which the Bank is responsible for administration and investment management and/or investment advice, while nonmanaged accounts are those for which the Bank acts solely as a custodian or directed trustee.

The Bank receives fees dependent upon the level and type of service(s) provided.

Accounts maintained by the Investment Management Group consist of managed and non-managed accounts.

Managed accounts are those for which the Bank is responsible for administration and investment management and/or investment advice, while non-managed accounts are those for which the Bank acts solely as a custodian or directed trustee.

The Bank receives fees

dependent upon the level and type of service(s) provided.

The Investment Management Group generated gross fee revenues of $45.0 million, $38.3 million, and $34.6 million for the years ended December 31, 2025, 2024, and 2023, respectively.

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The Trust Committee has delegated administrative responsibilities to three committees, one for investments, one for administration, and one for operations, all of which are comprised of Investment Management Group officers who meet no less than quarterly.

The Bank has an agreement with LPL and its affiliates and their insurance subsidiary, LPL Insurance Associates, Inc., to offer the sale of mutual fund shares, unit investment trust shares, general securities, advisory platforms, fixed and variable annuities and life insurance.

Registered representatives who are both employed by the Bank and licensed and contracted with LPL are onsite to offer these products to the Bank’s customer base.

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Net Interest Income The amount of net interest income is affected by changes in interest rates and by the volume, mix, and interest rate sensitivity of interest-earning assets and interest-bearing liabilities.

On a fully tax-equivalent basis, net interest income was $566.5 million for the year ended December 31, 2024, representing a 7.3% decrease from net interest income of $611.0 million for the year ended December 31, 2023.

The 2024 decrease in net interest income was attributable to rising deposit costs, resulting in a 26 basis point reduction in net margin to 3.28%, as compared to 3.54% for the prior year.

On a fully tax-equivalent basis, net interest income was $713.9 million for the year ended December 31, 2025, representing a 26.0% increase from net interest income of $566.5 million for the year ended December 31, 2024.

The 2025 increase in net interest income was primarily attributable to increased average interest earning assets obtained from the Enterprise acquisition, as well as higher yields on interest earning assets, which were positively impacted by the accretion of purchase accounting marks from the Enterprise acquisition, and decreased funding costs.

These factors resulted in a net interest margin of 3.57%, representing an increase of 29 basis point, as compared to 3.28% for the prior year.

The following table presents the Company’s average balances, net interest income, interest rate spread, and net interest margin for the years ended December 31, 2025, 2024 and 2023.

Nontaxable income from loans and securities is presented on a fully tax-equivalent basis by adjusting tax-exempt income upward by an amount equivalent to the prevailing federal income taxes that would have been paid if the income had been fully taxable.

Non-taxable income from loans and securities is presented on a fully tax-equivalent basis by adjusting tax-exempt income upward by an amount equivalent to the prevailing federal income taxes that would have been paid if the income had been fully taxable.

Table 19 - Average Balance, Interest Earned/Paid & Average Yields

7 unchanged sentences

Securities - taxable investments 3,017,694 79,268 2.63 % 2,791,246 57,092 2.05 % 3,027,769 60,336 1.99 %

Securities - nontaxable investments (1) 192 7 3.65 % 190 7 3.68 % 196 7 3.57 %

Securities - non-taxable investments (1)

12,410 435 3.51 % 192 7 3.65 % 190 7 3.68 %

Total securities 3,034,746 79,703 2.63 % 2,796,000 57,099 2.04 % 3,032,370 60,343 1.99 %

1 unchanged sentence

Commercial and industrial (1)

3,919,199 243,517 6.21 % 3,166,715 195,751 6.18 % 3,196,129 191,726 6.00 %

Commercial real estate (1)

7,508,938 401,783 5.35 % 6,811,838 354,941 5.21 % 6,525,394 315,040 4.83 %

Commercial construction (1)

Small business 267,212 17,605 6.59 % 235,108 14,428 6.14 % 204,982 10,886 5.31 %

1,112,459 76,301 6.86 % 800,254 58,455 7.30 % 1,019,871 66,440 6.51 %

Total commercial 12,540,596 721,601 5.75 % 10,778,807 609,147 5.65 % 10,741,394 573,206 5.34 %

15 unchanged sentences

Federal Home Loan Bank borrowings 452,675 17,718 3.91 % 840,611 39,048 4.65 % 782,121 37,624 4.81 %

Long-term borrowings — — — % — — — % 2,235 31 1.39 %

Line of credit, net 1,905 116 6.09 % — — — % — — — %

Junior subordinated debentures 62,861 3,867 6.15 % 62,859 4,506 7.17 % 62,857 4,359 6.93 %

2 unchanged sentences

Total interest-bearing liabilities 13,615,546 313,569 2.30 % 11,624,543 291,024 2.50 % 11,131,781 189,206 1.70 %

Noninterest-bearing demand deposits 4,431,303 4,918,787 5,559,997

Non-interest-bearing demand deposits 5,047,869 4,431,303 4,918,787

Other liabilities 325,414 345,286 374,585

3 unchanged sentences

Net interest income (1)

$ 713,901 $ 566,473 $ 611,045

Interest rate spread (2)

2.83 % 2.46 % 2.94 %

Net interest margin (3)

3.57 % 3.28 % 3.54 %

Supplemental Information

4 unchanged sentences

(1) The total amount of adjustment to present interest income and yield on a fully tax-equivalent basis is $5.1 million, $4.7 million, and $4.5 million for 2025, 2024 and 2023, respectively.

(2) Includes average nonaccruing loans.

(2) Interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average costs of interest-bearing liabilities.

11 unchanged sentences

Taxable securities 17,544 4,632 22,176 1,469 (4,713) (3,244) 8,626 1,356 9,982

Nontaxable securities (1) — — — — — — (1) (12) (13)

Non-taxable securities (1)

(17) 445 428 — — — — — —

Total securities 22,604 (3,244) 9,982

3 unchanged sentences

Commercial construction (4,959) 22,805 17,846 6,322 (14,307) (7,985) 16,958 (8,322) 8,636

Small business 1,207 1,970 3,177 1,942 1,600 3,542 350 1,260 1,610

Total commercial 112,454 35,941 100,849

3 unchanged sentences

Total other consumer (384) 414 30 (86) 198 112 356 (52) 304

Loans (1) 59,485 152,570 199,223

133,188 59,485 152,570

Total $ 169,973 $ 57,246 $ 153,371

13 unchanged sentences

(1) The table above reflects income determined on a fully tax equivalent basis.

See footnotes to Table 17 above for the related adjustments.

See footnote to Table 19 above for the related adjustments.

Provision For Credit Losses The provision for credit losses represents the charge to expense that is required to maintain an adequate level of allowance for credit losses.

The Company recorded a provision for credit losses $36.3 million, $23.3 million and $6.5 million for the years ended December 31, 2024, 2023, and 2022, respectively, primarily attributable to idiosyncratic events within the commercial portfolios.

The Company recorded a provision for credit losses of $65.5 million, $36.3 million and $23.3 million for the years ended December 31, 2025, 2024, and 2023, respectively.

The increase in the current period includes $34.5 million related to non-PCD loans acquired from Enterprise.

The increases between 2024 and 2023 are attributable to idiosyncratic events within the commercial portfolios.

The Company’s allowance for credit losses, as a percentage of total loans, was 1.03%, 1.17% and 1.00% at December 31, 2025, 2024 and 2023, respectively.

The decrease from the prior periods is due to charge-offs taken on loans that were specifically reserved for at those periods.

See Note 4, “Loans, Allowance for Credit Losses and Credit Quality” within the Notes to Consolidated Financial Statements included in Item 8 of this Report, for further details surrounding the primary drivers of the provision for credit losses during the period.

Noninterest Income The following table sets forth information regarding noninterest income for the periods shown:

Table 19 - Noninterest Income

Non-interest Income The following table sets forth information regarding non-interest income for the periods shown:

Table 21 - Non-interest Income

Years Ended December 31

8 unchanged sentences

Loan level derivative income 3,564 2,117 1,447 68.4 %

Other noninterest income 24,957 27,012 (2,055) (7.6) %

Other non-interest income 26,020 24,957 1,063 4.3 %

Total $ 148,689 $ 128,014 $ 20,675 16.2 %

The primary reasons for significant variances in the noninterest income categories shown in the preceding table are noted below:

• Deposit account fees increased year-over-year due primarily to increased overdraft and cash management fees.

• Interchange and ATM fees increased year-over-year due to transaction volumes.

• Investment management and advisory income increased year-over-year, driven largely by higher levels of assets under administration, which increased by $497.4 million, or 7.6%, from $6.5 billion at December 31, 2023 to $7.0 billion at December 31, 2024.

The primary reasons for significant variances in the non-interest income categories shown in the preceding table are noted below:

• Deposit account fees were higher than the year ago period as a result of increases in overdraft and cash management fees, as well as increased volume attributable to Enterprise acquisition.

• Interchange and ATM fees increased year-over-year primarily due to increased volume due to the Enterprise acquisition and timing of vendor rebates.

• Investment management and advisory income increased year-over-year, and is primarily attributable to higher asset-based revenue resul ting from higher levels of assets under administration, which increased by $2.2 billion, or 31.0%, from $7.0 billion at December 31, 2024 to $9.2 billion at December 31, 2025, including the addition of $1.5 billion in assets under administration acquired from Enterprise .

This increase was partially offset by lower insurance commissions recognized in 2025 as compared to 2024.

• Mortgage banking income increased year-over-year, driven by a greater portion of new originations being sold in the secondary market versus being retained in the Company’s portfolio in 2024.

• Gain on life insurance benefits decreased year-over-year as the Company received lower levels of proceeds on life insurance policies.

• Loan level derivative decreased year-over-year, reflecting fluctuations in customer demand fueled by changes in the macroeconomic environment.

• Other noninterest income decreased year-over-year, driven primarily by a $1.9 million decrease in discounted purchases of Massachusetts historical tax credits, lower commercial loan fees, and reduced unrealized gains on equity securities.

These decreases were partially offset by increases in FHLB dividend income and equity capital gain distributions.

Noninterest Expense The following table sets forth information regarding noninterest expense for the periods shown:

Table 20 - Noninterest Expense

• Mortgage banking income increased year-over-year, driven by higher origination volume as compared to the same prior year period.

• The increase in cash surrender value of life insurance policies were primarily attributable to policies obtained in connection with the Enterprise acquisition.

• Gain on life insurance benefits increased year-over-year as the Company received higher levels of proceeds on life insurance policies.

• Loan level derivative income increased year-over-year, reflecting fluctuations in customer demand fueled by changes in the macroeconomic environment.

• Other noninterest income increased year-over-year, driven primarily by business owner advisory services of $533,000, credit card fee income of $502,000, checkbook fees of $319,000, and payment processing income of $294,000.

These increases were partially offset by decreases in FHLB dividend income and less equity securities unrealized gains.

Non-interest Expense The following table sets forth information regarding non-interest expense for the periods shown:

Table 22 - Non-interest Expense

Years Ended December 31

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Merger and acquisition expense 39,635 1,902 37,733 (100.0) %

Other noninterest expense 60,078 57,192 2,886 5.0 %

Other non-interest expense 65,240 60,078 5,162 8.6 %

Total $ 529,881 $ 406,366 $ 123,515 30.4 %

The primary reasons for significant variances in the noninterest expense categories shown in the preceding tables are noted below:

• Salaries and employee benefits increased year-over-year primarily attributable to increases in general salaries of $7.6 million, medical plan insurance of $2.0 million, payroll taxes of $1.9 million and incentive programs of approximately $860,000.

These increases were partially offset by the impact of outsized interest rate-driven valuation fluctuations on the Company’s split-dollar bank-owned life insurance policies, which resulted in a $1.0 million decrease in expense for 2024 as compared to 2023.

• Occupancy and equipment expense increased year-over-year, driven primarily by lease termination costs related to the exit of an inactive branch location associated with a previous acquisition, as well as increased cleaning costs and depreciation expense.

The primary reasons for significant variances in the non-interest expense categories shown in the preceding tables are noted below:

• Salaries and employee benefits increased year-over-year primarily attributable to increases in general salaries of $30.4 million, including the impact of an expanded employee base as a result of the Enterprise acquisition, as well as increases in incentive programs of approximately $6.9 million, medical plan insurance of $4.3 million, payroll taxes of $3.5 million and commissions of $2.4 million.

• Occupancy and equipment expense increased year-over-year, primarily attributable to the expanded branch network, real estate and other fixed assets obtained from the Enterprise acquisition.

• Data processing increases reflect overall increased levels of transactional activity in conjunction with the Company’s growth, including the Enterprise acquisition.

• Software and subscriptions increased primarily due to the Company’s continued investment in its technology infrastructure.

• FDIC assessment expense decreased in comparison to the prior year, primarily attributable to an estimated $1.1 million special assessment imposed by the FDIC and recognized by the Company in the fourth quarter of 2023 to recover losses incurred by the DIF during the year.

• Debit card expenses decreased year-over-year, driven primarily by a one-time credit of $1.1 million recognized during the third quarter of 2024, as well as reduced processing costs.

• FDIC assessment expense increased in comparison to the prior year, primarily attributable to an increased assessment rate following the Enterprise acquisition.

• Debit card expenses increased year-over-year, driven primarily by a one-time credit of $1.1 million recognized during 2024.

• Consulting expense decreased year-over-year due primarily to the timing of strategic initiatives.

• During the fourth quarter of 2024, the Company recognized $1.9 million of merger and acquisition expenses related to the pending merger with Enterprise.

No such costs were incurred during 2023.

• Other noninterest expenses increased year-over year, driven primarily by increases in internet banking expense of $1.1 million, telecommunications costs of $762,000, card issuance costs of $599,000, unrealized losses on equity securities of $543,000, examinations and audits of $323,000, along with other miscellaneous expenses.

These increases were partially offset by decreases in recruitment and legal costs.

• Amortization of intangible assets increased, driven by increased amortization attributable to the core deposit intangible, customer list and other intangible assets established as part of the Enterprise acquisition.

• The Company incurred merger and acquisition expenses of $39.6 million and $1.9 million during the years ended 2025 and 2024, respectively, related to the Company’s acquisition of Enterprise.

The majority of the merger expense related to change in control and severance contracts, vendor systems contract terminations, as well as legal and professional fees.

• Other non-interest expenses increased year-over year, driven primarily by increases in internet banking expense of $837,000, examinations and audits of $784,000, loan workout costs of $739,000, director fees of $619,000, telecommunications costs of $592,000, contract labor of $395,000, reciprocal deposit fees of $372,000, business development and customer events of $310,000, along with other miscellaneous expenses.

These increases were partially offset by decreases in card issuance costs, losses on equity securities, defined benefit plan costs, and other losses and change-offs .

Income Taxes The tax effect of all income and expense transactions is recognized by the Company in each year’s consolidated statements of income, regardless of the year in which the transactions are reported for income tax purposes.

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Blended statutory tax rate 27.47 % 27.91 % 27.91 %

The Company’s effective tax rate for 2024 is lower as compared to the year ago period primarily due to lower pre-tax income as well as increased tax benefits from low-income housing tax credits.

The effective tax rates in the table above are lower than the blended statutory tax rates due to the impact of discrete items, including tax benefits related to equity compensation and purchased state tax credits, as well as certain tax preference assets such as life insurance policies, tax exempt bonds, and federal tax credits.

The Company invests in various low income housing projects, which are real estate limited partnerships that acquire, develop, own and operate low and moderate-income housing developments.

As a limited partner in these operating partnerships, the Company will receive tax credits and tax deductions for losses incurred by the underlying properties.

The investments are accounted for using the proportional amortization method and will be amortized over various periods through 2043, which represents the period that the tax credits and other tax benefits will be utilized.

The total committed investment in these partnerships at December 31, 2024 was $275.1 million, of which $203.3 million has been funded.

The Company recognized a net tax benefit of approximately $4.5 million for 2024 and anticipates additional net tax benefits of $42.7 million over the remaining life of the investments from the combination of tax credits and operating losses.

The effective tax rate is impacted by pre-tax income levels, a decrease in the statutory state tax rate, as well as increased tax benefits from low-income housing tax credits.

The effective tax rates in the table are lower than the blended statutory tax rates due to the impact of discrete items, including tax benefits related to equity compensation, as well as certain tax preference assets such as life insurance policies, tax exempt bonds and federal tax credits, such as low income housing tax credits.

For additional information related to the Company’s income taxes see Note 11, “Income Taxes” and Note 12, “Low Income Housing Project Investments” within the Notes to the Consolidated Financial Statements included in Item 8 of this Report.

The One Big Beautiful Bill Act (“OBBBA”) was enacted on July 4, 2025.

Among other things, the new law makes permanent certain expiring business tax provisions of the Tax Cuts and Jobs Act.

These include provisions which allow businesses to immediately expense, for tax purposes, the cost of new investments in certain qualified depreciable assets and the cost of qualified domestic research and development.

The OBBBA also imposes a floor on tax deductions taken on charitable contributions.

Further, the OBBBA significantly changes U.S.

tax law related to foreign operations and certain tax credits;

however, such changes are not anticipated to have a material impact to the Company’s financial statements.

Dividends The Company declared quarterly cash dividends totaling $2.36 per common share in 2025 and $2.28 per common share in 2024.

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Management is responsible for comprehensive enterprise risk management, and continually strives to adopt and implement practices that strike an appropriate balance between risk and reward and permit the achievement of strategic goals in a controlled environment.

The Company has implemented the “three lines of defense” enterprise risk management framework.

The first line of defense are the executives in charge of business units, operational areas, and corporate functions who, sometimes assisted by management committees, teams, and working groups, own and manage risks.

The second line of defense monitors and provides risk management advice across all risk domains, and is comprised of the enterprise risk management department, with oversight from the Chief Risk Officer.

The third line of defense is independent assurance performed by the Chief Internal Auditor, who reports to the Audit Committee of the Company’s Board of Directors, and by the Company’s internal audit department.

The Board, with the assistance of its Risk Committee, oversees management’s enterprise risk management practices.

As risks must be taken to create value, the Board of Directors has approved a Risk Appetite Statement that defines the acceptable residual risk tolerances for the Company and the nine major risk types identified as having the potential to create significant adverse impacts on the Company, such as financial losses, reputational damage, legal or regulatory actions, failure to achieve strategic objectives, diminished customer experience, and/or cultural erosion.

The nine major risk categories identified by the Company and addressed in the Risk Appetite Statement are strategic and emerging risk, culture risk, credit risk, liquidity risk, market and interest rate risk, operational risk, reputation risk, compliance risk, and technology and cyber risk, each of which is discussed below.

The Company has implemented the “three lines of defense” enterprise risk management model .

The first line of defense represents all operating business units, and corporate functions.

Under the purview of the Chief Risk Officer, the second line of defense monitors and provides risk management advice across all risk domains, and is comprised of Enterprise Risk Management/Operational Risk, Enterprise Compliance, and Information Security.

The activities of the second line of defense are overseen by and reported to the Board Risk Committee on a regular basis.

Under the purview of the Chief Internal Auditor, the third line of defense is the independent assurance function primarily executed by the Company’s internal audit department.

Third line of defense audit activities are overseen by and reported to the Company’s Board Audit Committee on a regular basis.

Risk management efforts are further supported and bolstered through a formal and robust risk governance structure comprised of various management level committees that are designed to identify, monitor, report and mitigate top risks faced by the Company based on its risk taxonomy as described below.

The Board of Directors, with the assistance of its Risk Committee, exercised oversight of the Company’s risk management program and practices.

As risks must be taken to create value, the Board of Directors has approved a Risk Appetite Statement that defines the acceptable residual risk appetite for the Company and the nine major risk types identified as having the potential to create significant adverse impacts on the Company, such as financial losses, reputational damage, legal or regulatory actions, failure to achieve strategic objectives, diminished customer experience, and/or cultural erosion.

The nine major risk categories identified by the Company and addressed in the Risk Appetite Statement are strategic and emerging risk, culture risk, credit risk, liquidity risk, market and interest rate risk, operational risk, reputation risk, regulatory and compliance risk, and technology and cyber risk, each of which is discussed below.

Strategic and Emerging Risk Strategic and emerging risk is the risk arising from adverse strategic or business decisions, misalignment of strategic direction with the Company’s mission and values, failure to execute strategies or tactics, or an inadequate adaptation or lack of responsiveness to industry and/or operating environment changes.

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The Company’s primary sources of funds are deposits, borrowings, and the amortization, prepayment, and maturities of loans and securities.

The Bank utilizes its extensive branch network to access retail customers who provide a base of in-market core deposits.

The Bank utilizes its extensive branch network to access retail customers who provide a base of in-market

core deposits.

These funds are principally comprised of demand deposits, interest checking accounts, savings accounts, and money market accounts.

Interest rates, economic conditions, and competitive factors greatly influence deposit levels.

The Company’s primary measure of short-term liquidity is the Total Basic Surplus/Deficit as a percentage of assets.

This ratio, which is an analysis of the relationship between liquid assets plus available FHLB funding, less short-term liabilities relative to total assets, was within policy limits at December 31, 2024.

The Total Basic Surplus/Deficit measure is affected primarily by changes in deposits, securities and short-term investments, loans, and borrowings.

An increase in deposits, without a corresponding increase in nonliquid assets, will improve the Total Basic Surplus/Deficit measure, whereas, an increase in loans, with no increase in deposits, will decrease the measure.

Other factors affecting the Total Basic Surplus/Deficit include FHLB collateral requirements, securities portfolio changes, and the mix of deposits.

The Company measures funds availability and surplus under both stress and non-stress conditions.

In addition, liquidity monitoring ensures appropriate oversight of funding exposures and reliance, as well as available capacity.

The Company continually monitors both on and off balance sheet liquidity sources to understand vulnerabilities and when adjustments to the balance between sources and uses of funds may be necessary.

Management regularly performs liquidity stress testing to assess potential liquidity outflows or funding concerns resulting from economic or industry disruptions, volatility in the financial markets, or unforeseen credit events.

The results of these scenarios are used to inform the Company’s Contingency Funding Plan and help provide the basis for its liquidity needs.

The Company prioritizes core deposits as a primary funding source and continues to maintain a variety of available liquidity sources, including FHLB advances, and Federal Reserve borrowing capacity.

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The amount and type of assets that the Company has available to pledge affects the Company’s FHLB and Federal Reserve borrowing capacity.

For example, a prime one-to-four family residential loan may provide 75 cents of borrowing capacity for every $1.00 pledged, whereas a pledged commercial loan may

increase borrowing capacity in a lower amount.

The Company’s lending decisions, therefore, can also affect its liquidity position.

The Company may also have the ability to raise additional funds through the issuance of equity or unsecured debt privately or publicly and has done so in the past.

Additionally, the Company is able to enter into repurchase agreements or acquire brokered deposits at its discretion.

The Company may also have the ability to raise additional funds through the issuance of equity or unsecured debt privately or publicly, as demonstrated by the $300.0 million subordinated debt issuance completed by the Company during the first quarter of 2025.

Additionally, the Company is able to acquire brokered certificates of deposits at its discretion.

The availability and cost of equity or debt on an unsecured basis is dependent on many factors, including the Company’s financial position, the market environment, and the Company’s credit rating.

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Federal Home Loan Bank borrowings (1)

$ 416,549 $ 2,812,217 638,514 1,992,574

Line of credit, net (2)

49,953 75,000 — —

Federal Reserve Bank of Boston (3)

— 5,472,672 — 3,635,233

Unpledged securities — 576,504 — 564,676

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Junior subordinated debentures (4)

62,862 — 62,860 —

Subordinated debt (4)

Reciprocal deposits (3) 1,062,896 — 959,068 —

296,483 — — —

Brokered deposits (4)

6,000 — 61,236 —

$ 831,847 $ 9,036,393 $ 762,610 $ 6,242,483

(1) Loans and securities with a carrying value of $4.5 billion and $3.8 billion at December 31, 2025 and 2024, respectively, were pledged to the Federal Home Loan Bank of Boston.

(2) Represents line of credit available to the parent Company.

(3) Loans and securities with a carrying value of $8.3 billion and $4.6 billion at December 31, 2025 and 2024, respectively, were pledged to the Federal Reserve Bank of Boston.

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In addition to customary operational liquidity practices, the Board and management recognize the need to establish reasonable guidelines to manage a heightened liquidity risk environment.

Catalysts for elevated liquidity risk can be Company-specific issues and/or systemic industry-wide events.

Catalysts for elevated liquidity risk can be Company-specific issues and/or systemic macro-economic or industry-wide events.

Management is therefore responsible for instituting systems and controls designed to provide advanced detection of potentially significant funding shortages, establishing methods for assessing and monitoring risk levels, and instituting responses that may alleviate or circumvent a potential liquidity crisis.

Management has established a Liquidity Contingency Plan to provide a framework to detect potential liquidity problems and appropriately address them in a timely manner.

In a period of perceived heightened liquidity risk, the Liquidity Contingency Plan provides for the establishment of a Liquidity Crisis Task Force to monitor the potential for a liquidity crisis and execute an appropriate response.

The Company continually monitors both on and off balance sheet liquidity sources to understand vulnerabilities and when adjustments to the balance between sources and uses of funds may be necessary.

Management regularly performs various liquidity stress testing scenarios and other analyses to assess potential liquidity outflows or funding concerns resulting from economic or industry disruptions, volatility in the financial markets, or unforeseen credit events.

The results of these scenarios are used to inform the Company’s Liquidity Contingency Plan and help provide the basis for its liquidity needs.

Market and Interest Rate Risk Market risk refers to the risk of potential losses arising from changes in interest rates and the value of investments due to market conditions or other external factors or events.

Management has established a Contingency Funding Plan to provide a framework to detect potential liquidity problems and appropriately address them in a timely manner.

Market and Interest Rate Risk Market risk refers to the risk of potential losses arising from changes in interest rates and the value of assets due to market conditions or other external factors or events.

Interest rate risk is the most significant market risk to which the Company has exposure to due to the nature of its operations.

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Interest rate risk arises directly from the Company’s core banking activities.

In addition to directly affecting net interest

income, changes in the level of interest rates can also affect the amount of loans originated, the timing of cash flows on loans and securities, and the fair value of securities and derivatives, and have other effects.

In addition to directly affecting net interest income, changes in the level of interest rates can also affect the amount of loans originated, the timing of cash flows on loans and securities, and the fair value of securities and derivatives, and have other effects.

Management strives to control interest rate risk within limits approved by the Board of Directors that reflect the Company’s tolerance for interest rate risk over short-term and long-term horizons.

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It is the Company’s objective to maintain stability in the growth of net interest income through the maintenance of an appropriate mix of interest-earning assets and interest-bearing liabilities and, when necessary within limits management deems prudent, with hedging instruments such as interest rate swaps, floors, and caps.

The Company quantifies its interest rate exposures using net interest income simulation models, as well as simpler gap analysis, and an Economic Value of Equity analysis.

The Company quantifies its interest rate exposures using net interest income and Economic Value of Equity analysis.

Key assumptions in these analyses relate to behavior of interest rates and behavior of the Company’s deposit and loan customers.

The most material assumptions relate to the prepayment of mortgage assets (including mortgage loans and mortgage-backed securities) and the life and sensitivity of non-maturity deposits ( e.g.

The most material assumptions relate to the prepayment of loans and securities and the life and sensitivity of non-maturity deposits ( e.g.

, demand deposit, savings, and money market accounts).

In the case of prepayment of mortgage assets, assumptions are derived from published median prepayment estimates for comparable mortgage loans.

The risk of prepayment tends to increase when interest rates fall.

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Given the volatility associated with market rates, and the uncertainty surrounding future rate movements, management has continued to maintain a more neutral interest rate risk position.

The Company runs several scenarios to quantify and effectively assist in managing interest rate risk, including instantaneous parallel shifts in market rates as well as gradual (12-24 months) shifts in market rates, and may also include other alternative scenarios as management deems necessary given the interest rate environment.

The results of those scenarios are summarized in the following table:

The Company runs numerous scenarios to quantify and effectively assist in managing interest rate risk, including instantaneous parallel shifts over one and two year horizons, and a series of non-parallel shocks to evaluate the impact of different yield curve shape.

Key highlights of the Company’s net interest income sensitivity is summarized in the following table:

Table 25 - Interest Rate Sensitivity

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+200 0.1% 1.2%

+200 1.2% 0.8%

+300 2.0% (1.0)%

Gradual rate shifts (basis points)

-200 over 12 months (1.1)% (0.1)%

-100 over 12 months (0.4)% —%

+200 over 12 months 0.7% (0.3)%

Alternative scenarios

Steep down 200 basis points scenario (0.7)% 1.2%

The results depicted in the table above are dependent on material assumptions, such as prepayment rates, decay rates, pricing decisions on loans and deposits, and other factors, which management believes are reasonable.

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Management seeks to mitigate technology risk through appropriate security and controls over data and its technological environment.

The Bank manages cybersecurity threats proactively and maintains robust controls to protect its critical systems and data by investing in secure, reliable and resilient technology infrastructure, fostering a culture of technology risk awareness and continuously improving its technology risk management practices.

The Bank manages cybersecurity threats proactively and maintains robust controls to protect its critical systems and information assets by investing in secure, reliable and resilient technology infrastructure, fostering a culture of technology risk awareness and continuously improving its technology risk management practices.

Contractual Obligations, Commitments, Contingencies and Off-Balance Sheet Obligations

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The Company estimates credit losses on a collective basis for loans sharing similar risk characteristics using a quantitative model combined with an assessment of certain qualitative factors designed to address forecast risk and model risk inherent in the quantitative model output.

Management’s judgement is required for the selection and application of these factors which are derived from historical loss experience as well as assumptions surrounding expected future losses and economic forecasts.

Management’s judgment is required for the selection and application of these factors which are derived from historical loss experience as well as assumptions surrounding expected future losses and economic forecasts.

Loans that no longer share similar risk characteristics with any pools of assets are subject to individual assessment and are removed from the collectively assessed pools to avoid double counting.

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The latter approach is used for loans deemed to be collateral dependent or when foreclosure is probable.

Changes in these judgements and assumptions could be due to a number of circumstances which may have a direct impact on the provision for loan losses and may result in changes to the amount of allowance.

Changes in these judgments and assumptions could be due to a number of circumstances which may have a direct impact on the provision for loan losses and may result in changes to the amount of allowance.

The allowance for credit losses is increased by the provision for credit losses and by recoveries of loans previously charged off.

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Deferred tax assets are assessed for recoverability and the Company may record a valuation allowance if it believes based on available evidence that it is more likely than not that the deferred tax assets recognized will not be realized before their expiration.

The amount of the deferred tax asset recognized and considered realizable could be reduced if projected income is not achieved due to various factors such as unfavorable business conditions.

The amount of the deferred

tax asset recognized and considered realizable could be reduced if projected income is not achieved due to various factors such as unfavorable business conditions.

If projected income is not expected to be achieved, the Company may record a valuation allowance to reduce its deferred tax assets to the amount that it believes can be realized in its future tax returns.

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Taxes are discussed in more detail in Note 11, “Income Taxes” within the Notes to the Consolidated Financial Statements included in Item 8 of this Report.

Valuation of Goodwill/Intangible Assets and Analysis for Impairment The Company has increased its market share through the acquisition of entire financial institutions accounted for under the acquisition method of accounting, as well as from the acquisition of branches (not the entire institution) and other nonbanking entities.

Business Combinations In accordance with applicable accounting guidance, the Company recognizes assets acquired and liabilities assumed at their respective fair values as of the date of acquisition, with the related transaction costs expensed in the period incurred.

The Company may use third party valuation specialists to assist in the determination of fair value of certain assets and liabilities at the acquisition date, including loans, core deposit intangibles and time deposits.

While the Company uses its best estimates and assumptions to accurately value assets acquired and liabilities assumed on the acquisition date, the estimates are inherently uncertain.

The allowance for credit losses on PCD loans is recognized within business combination accounting.

The allowance for credit losses on non-PCD loans is recognized as a provision expense in the same period as the business combination.

For further discussion of the Company’s accounting policies for estimating credit losses on acquired loans, see Note 4, “Loans, Allowance for Credit Losses and Credit Quality” within the Notes to Consolidated Financial Statements included in Item 8 of this Report.

For all acquisitions, the Company is required to record assets acquired and liabilities assumed at their fair value, which is an estimate determined by the use of internal or other valuation techniques, which may include the use of third-party specialists.

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The Company completed its annual impairment test as of August 31, 2024, using the quantitative impairment test, and determined that the Company's goodwill was not impaired.

There were no other events or changes during the fourth quarter of 2024 that indicated impairment of goodwill and other intangible assets.

The Company’s goodwill relates to acquisitions that are fully integrated into the retail banking operations, which management does not consider to be at risk of failing step one in the near future.

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When applicable, the Company tests each of the other intangibles by comparing the carrying value of the intangible to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset.

There were no other events or changes during the fourth quarter of 2024 that indicated impairment of goodwill and other intangible assets.

Valuation of Investment Securities Securities that the Company has the ability and intent to hold until maturity are classified as securities held-to-maturity and are accounted for using historical cost, adjusted for amortization of premium and accretion of discount.

Trading and equity securities are carried at fair value, with unrealized gains and losses recorded in other noninterest income.

Trading and equity securities are carried at fair value, with unrealized gains and losses recorded in other non-interest income.

All other securities are classified as securities available-for-sale and are carried at fair market value.

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The third-party service provider performs calibration and testing of the models by comparing anticipated inputs to actual results, on a quarterly basis.

Unrealized gains

and losses on securities available-for-sale are reported, on an after-tax basis, as a separate component of stockholders’ equity in accumulated other comprehensive income.

Unrealized gains and losses on securities available-for-sale are reported, on an after-tax basis, as a separate component of stockholders’ equity in accumulated other comprehensive income.

Recent Accounting Developments

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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-K

Item 7. Management’s Discussion and Analysis