Table of our competitors have substantially greater resources and higher lending limits than we do and may offer products and services that we do not, or cannot, provide. There is also increased competition by out-of-market competitors through the internet. The ability of non-banking financial institutions to provide services previously limited to commercial banks has intensified competition. Because non-banking financial institutions are not subject to the same regulatory restrictions as banks and bank holding companies, they can often operate with greater flexibility and lower cost structures. Securities firms and insurance companies that elect to become financial holding companies may acquire banks and other financial institutions. This may significantly change the competitive environment in which we conduct our business. As a result of these various sources of competition, we could lose business to competitors or could be forced to price products and services on less advantageous terms to retain or attract clients, either of which would adversely affect our profitability.Contents

~~Market changes may adversely affect demand for our services and impact results of operations.~~

Channels for servicing our customers are evolving rapidly, with less reliance on traditional branch facilities, more use of online and mobile banking, and increased demand for universal bankers and other relationship managers who can service multiples product lines. We compete with larger providers who are rapidly evolving their service channels and escalating the costs of evolving the service process. We have a process for evaluating the profitability of our branch system and other office and operational facilities. The identification of unprofitable operations and facilities can lead to restructuring charges and introduce the risk of disruptions to revenues and customer relationships.

Our securities portfolio performance in difficult market conditions could have adverse effects on our results of operations.

Unrealized losses on investment securities result from changes in credit spreads and liquidity issues in the marketplace, along with changes in the credit profile of individual securities issuers. Under GAAP, we are required to review our investment portfolio periodically for the presence of ~~other-than-temporary~~ impairment of our securities, taking into consideration current and future market conditions, the extent and nature of changes in fair value, issuer rating changes and trends, volatility of earnings, current analysts' evaluations, our ability and intent to hold investments until a recovery of fair value, as well as other factors. Adverse developments with respect to one or more of the foregoing factors may require us to deem particular securities to be ~~other-than-temporarily~~ impaired, with the credit-related portion of the reduction in the value recognized as a charge to our ~~earnings.~~earnings through an allowance. Subsequent valuations, in light of factors prevailing at that time, may result in significant changes in the values of these securities in future periods. Any of these factors could require us to recognize further impairments in the value of our securities portfolio, which may have an adverse effect on our results of operations in future periods.

Potential downgrades of U.S. government securities by one or more of the credit ratings agencies could have a material adverse effect on our operations, earnings and financial condition.

A possible future downgrade of the sovereign credit ratings of the U.S. government and a decline in the perceived creditworthiness of U.S. government-related obligations could impact our ability to obtain funding that is collateralized by affected instruments, as well as affect the pricing of that funding when it is available. A downgrade may also adversely affect the market value of such instruments. We cannot predict if, when or how any changes to the credit ratings or perceived creditworthiness of these organizations will affect economic conditions. Such ratings actions could result in a significant adverse impact on us. Among other things, a downgrade in the U.S. government’s credit rating could adversely impact the value of our securities portfolio and may trigger requirements that the Company post additional collateral for trades relative to these securities. A downgrade of the sovereign credit ratings of the U.S. government or the credit ratings of related institutions, agencies or instruments would significantly exacerbate the other risks to which we are subject and any related adverse effects on the business, financial condition and results of operations.

Uncertainty about the future of LIBOR may adversely affect our business.

LIBOR is used extensively in the United States as a benchmark for various commercial and financial contracts, including funding sources, adjustable rate mortgages, corporate debt, interest rate swaps and other derivatives. LIBOR is set based on interest rate information reported by certain banks, which will stop reporting such information after 2021. It is uncertain at this time whether LIBOR will change or cease to exist or the extent to which those entering into financial contracts will transition to any other particular benchmark. Other benchmarks may perform differently than LIBOR or may have other consequences that cannot currently be anticipated. It is also uncertain what will happen with instruments that rely on LIBOR for future interest rate adjustments and which of those instruments may remain outstanding or be renegotiated if LIBOR ceases to exist. The uncertainty regarding the future of LIBOR as well as the transition from LIBOR to another benchmark rate or rates could have adverse impacts on our funding costs or net interest margins, as well as any floating-rate obligations, loans, deposits, derivatives, and other financial instruments that currently use LIBOR as a benchmark rate and, ultimately, adversely affect our financial condition and results of operations.

We are subject to liquidity risk, which could negatively affect our funding levels.

Market conditions or other events could negatively affect our access to or the cost of funding, affecting our ongoing ability to accommodate liability maturities and deposit withdrawals, meet contractual obligations, or fund asset growth and new business initiatives at a reasonable cost, in a timely manner and without adverse consequences.

Although we maintain a liquid asset portfolio and have implemented strategies to maintain sufficient and diverse sources of funding to accommodate planned, as well as unanticipated, changes in assets, liabilities, and off-balance sheet commitments under various economic conditions, a substantial, unexpected, or prolonged change in the level or cost of liquidity could have a material adverse effect on us. If the cost effectiveness or the availability of supply in these credit markets is reduced for a prolonged period of time, our funding needs may require us to access funding and manage liquidity by other means. These alternatives may include generating client deposits, securitizing or selling loans, extending the maturity of wholesale borrowings, borrowing under certain secured borrowing arrangements, using relationships developed with a variety of fixed income investors, and further managing loan growth and investment opportunities. These alternative means of funding may result in an increase to the overall cost of funds and may not be available under stressed conditions, which would cause us to liquidate a portion of our liquid asset portfolio to meet any funding needs.

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Loss of deposits or a change in deposit mix could increase our cost of funding.

Deposits are a low cost and stable source of funding. We compete with banks and other financial institutions for deposits. Funding costs may increase if we lose deposits and are forced to replace them with more expensive sources of funding, if clients shift their deposits into higher cost products or if we need to raise interest rates to avoid losing deposits. Higher funding costs reduce our net interest margin, net interest income and net income.

Wholesale funding sources may prove insufficient to replace deposits at maturity and support our operations and future growth.

We and our banking subsidiaries must maintain sufficient funds to respond to the needs of depositors and borrowers. To manage liquidity, we draw upon a number of funding sources in addition to core deposit growth and repayments and maturities of loans and investments. These sources include Federal Home Loan Bank advances, proceeds from the sale of investments and loans, and liquidity resources at the holding company. Our ability to manage liquidity will be severely constrained if we are unable to maintain access to funding or if adequate financing is not available to accommodate future growth at acceptable costs. In addition, if we are required to rely more heavily on more expensive funding sources to support future growth, our revenues may not increase proportionately to cover our costs. In this case, operating margins and profitability would be adversely affected. Turbulence in the capital and credit markets may adversely affect our liquidity and financial condition and the willingness of certain counterparties and customers to do business with us.

Potential deterioration in the performance or financial position of the FHLBB might restrict our funding needs and may adversely impact our financial condition and results of operations.

Significant components of our liquidity needs are met through our access to funding pursuant to our membership in the FHLBB. The FHLBB is a cooperative that provides services to its member banking institutions. The primary reason for joining the FHLBB is to obtain funding. The purchase of stock in the FHLBB is a requirement for a member to gain access to funding. Any deterioration in the FHLBB’s performance or financial condition may affect our ability to access funding and/or require the Company to deem the required investment in FHLBB stock to be impaired. If we are not able to access funding through the FHLBB, we may not be able to meet our liquidity needs, which could have an adverse effect on our results of operations or financial condition. Similarly, if we deem all or part of our investment in FHLBB stock impaired, such action could have an adverse effect on our financial condition or results of operations.

The soundness of other financial institutions could adversely affect us.

Our ability to engage in routine funding transactions could be adversely affected by the actions and commercial soundness of other financial institutions. Financial services institutions are interrelated as a result of trading, clearing, counterparty and other relationships. We have exposure to many different counterparties, and we routinely execute transactions with counterparties in the financial industry, including brokers and dealers, other commercial banks, investment banks, mutual and hedge funds, and other financial institutions. As a result, defaults by, or even rumors or questions about, one or more financial services institutions, or the financial services industry generally, could lead to market-wide liquidity problems and losses or defaults by us or by other institutions and organizations. Many of these transactions expose us to credit risk in the event of default of our counterparty or client. In addition, our credit risk may be exacerbated when the collateral held by us cannot be liquidated or is liquidated at prices not sufficient to recover the full amount of the financial instrument exposure due to us. There is no assurance that any such losses would not materially and adversely affect our results of operations.

~~Loss of deposits or a change in deposit mix could increase our cost of funding.~~

Damage to our reputation could significantly harm our business, including our competitive position and business prospects.

We are dependent on our reputation within our market area, as a trusted and responsible financial company, for all aspects of our relationships with customers, employees, vendors, third-party service providers, and others, with whom we conduct business or potential future business. Our ability to attract and retain customers and employees could be adversely affected if our reputation is damaged. Our actual or perceived failure to address various issues could give rise to reputational risk that could cause harm to us and our business prospects. These issues also include, but are not limited to, legal and regulatory requirements; properly maintaining customer and employee personal information; record keeping; money-laundering; sales and trading practices; ethical issues; appropriately addressing potential conflicts of interest; and the proper identification of the legal, reputational, credit, liquidity and market risks inherent in our products. Failure to appropriately address any of these issues could also give rise to additional regulatory restrictions and legal risks, which could, among other consequences, increase the size and number of litigation claims and damages asserted or subject us to enforcement actions, fines and penalties and incur related costs and expenses. In addition, our businesses are dependent on the integrity of our employees. If an employee were to misappropriate any client funds or client information, our reputation could be negatively affected, which may result in the loss of accounts and have an adverse effect on our results of operations and financial condition.

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We may be unable to attract and retain qualified key employees, which could adversely affect our business prospects, including our competitive position and results of operations.

Our success is dependent upon our ability to attract and retain highly skilled individuals. There is significant competition for those individuals with the experience and skills required to conduct many of our business activities. We may not be able to hire or retain the key personnel that we depend upon for success. The unexpected loss of services of one or more of these or other key personnel could have a material adverse impact on our business because of their skills, knowledge of the markets in which we operate, years of industry experience and the difficulty of promptly finding qualified replacement personnel. Frequently, we compete in the market for talent with entities that are not subject to comprehensive regulation, including with respect to the structure of incentive compensation. Our inability to attract new employees and retain and motivate our existing employees could adversely impact our business.

Our ability to service our debt and pay dividends is dependent on capital distributions from our subsidiary banks, and these distributions are subject to regulatory limits and other restrictions.

We are a legal entity that is separate and distinct from the Banks. Our revenue (on a parent company only basis) is derived primarily from dividends paid to us by the Banks. Our right, and consequently the right of our shareholders, to participate in any distribution of the assets or earnings of the Banks through the payment of such dividends or otherwise is necessarily subject to the prior claims of creditors of the Banks (including depositors), except to the extent that certain claims of ours in a creditor capacity may be recognized. It is possible, depending upon the financial condition of our subsidiary banks and other factors, that applicable regulatory authorities could assert that payment of dividends or other payments is an unsafe or unsound practice. If one or more of our subsidiary banks is unable to pay dividends to us, we may not be able to service our debt or pay dividends on our common stock. Further, as a result of the capital conservation buffer requirement of the Final Capital Rule, our ability to pay dividends on our common stock or service our debt could be restricted if we do not maintain a capital conservation buffer. A reduction or elimination of dividends could adversely affect the market price of our common stock and would adversely affect our business, financial condition, results of operations and prospects. See Item 1, “Business-Supervision

and Regulation-Dividend Restrictions” and “Business-Supervision and Regulation-Capital Adequacy and Safety and Soundness-Regulatory Capital Requirements.”

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

In the ordinary course of business, we rely on electronic communications and information systems to conduct our business and to store sensitive data, including financial information regarding customers. Our electronic communications and information systems infrastructure, as well as the systems infrastructures of the vendors we use to meet our data processing and communication needs, could be susceptible to cyber-attacks, such as denial of service attacks, hacking, terrorist activities or identity theft. Financial services institutions and companies engaged in data processing have reported breaches in the security of their websites or other systems, some of which have involved sophisticated and targeted attacks intended to obtain unauthorized access to confidential information, destroy data, disable or degrade service or sabotage systems, often through the introduction of computer viruses or malware, cyber-attacks and other means. Denial of service attacks have been launched against a number of large financial services institutions. Hacking and identity theft risks, in particular, could cause serious reputational harm. Cyber threats are rapidly evolving and we may not be able to anticipate or prevent all such attacks. Although to date we have not experienced any material losses relating to cyber-attacks or other information security breaches, there can be no assurance that we will not suffer such losses in the future. No matter how well designed or implemented our controls are, we will not be able to anticipate all security breaches of these types, and we may not be able to implement effective preventive measures against such security breaches in a timely manner. A failure or circumvention of our security systems could have a material adverse effect on our business operations and financial condition.

We regularly assess and test our security systems and disaster preparedness, including back-up systems, but the risks are substantially escalating. As a result, cyber-security and the continued enhancement of our controls and processes to protect our systems, data and networks from attacks, unauthorized access or significant damage remain a priority. Accordingly, we may be required to expend additional resources to enhance our protective measures or to investigate and remediate any information security vulnerabilities or exposures. Any breach of our system security could result in disruption of our operations, unauthorized access to confidential customer information, significant regulatory costs, litigation exposure and other possible damages, loss or liability. Such costs or losses could exceed the amount of available insurance coverage, if any, and would adversely affect our earnings. Also, any failure to prevent a security breach or to quickly and effectively deal with such a breach could negatively impact customer confidence, damaging our reputation and undermining our ability to attract and keep customers.

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

We invest significant resources in information technology system enhancements in order to provide functionality and security at an appropriate level. We may not be able to successfully implement and integrate future system enhancements, which could adversely impact the ability to provide timely and accurate financial information in compliance with legal and regulatory requirements, which could result in sanctions from regulatory authorities. Such sanctions could include fines and suspension of trading in our stock, among others. In addition, future system enhancements could have higher than expected costs and/or result in operating inefficiencies, which could increase the costs associated with the implementation as well as ongoing operations.

Failure to properly utilize system enhancements that are implemented in the future could result in impairment charges that adversely impact our financial condition and results of operations and could result in significant costs to remediate or replace the defective components. In addition, we may incur significant training, licensing, maintenance, consulting and amortization expenses during and after systems implementations, and any such costs may continue for an extended period of time.

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

Third party vendors provide key components of our business infrastructure such as internet connections, network access and core application processing. While we have selected these third party vendors carefully, we do not control their actions. Any problems caused by these third parties, including as a result of their not providing us their services for any reason or their performing their services poorly, could adversely affect our ability to deliver products and services to our customers or otherwise conduct our business efficiently and effectively. Replacing these third party vendors could also entail significant delay and expense.

We may incur significant losses as a result of ineffective risk management processes and strategies.

We seek to monitor and control our risk exposure through a risk and control framework encompassing a variety of separate but complementary financial, credit, operational, compliance, and legal reporting systems; internal controls; management review processes; and other mechanisms. While we employ a broad and diversified set of risk monitoring and risk mitigation techniques, those techniques and the judgments that accompany their application may not be effective and may not anticipate every economic and financial outcome in all market environments or the specifics and timing of such outcomes.

Our internal controls, procedures and policies may fail or be circumvented.

Management regularly reviews and updates our internal controls, disclosure controls and procedures, and corporate governance policies and procedures. Any system of controls, however well-designed and operated, is based in part on certain

assumptions and can provide only reasonable, not absolute, assurances that the objectives of the system are met. Any failure or circumvention of the controls and procedures or failure to comply with regulations related to controls and procedures could have a material adverse effect on our business, results of operations and financial condition.

~~If our risk management framework does not effectively identify or mitigate our risks, we could suffer losses.~~

Our risk management framework seeks to mitigate risk and appropriately balance risk and return. We have established processes and procedures intended to identify, measure, monitor and report the types of risk to which we are subject, including credit risk, operations risk, compliance risk, reputation risk, strategic risk, market risk, and liquidity risk. We seek to monitor and control our risk exposure through a framework of policies, procedures and reporting requirements. Management of our risks in some cases depends upon the use of analytical and/or forecasting models. If the models used to mitigate these risks are inadequate, we may incur losses. In addition, there may be risks that exist, or that develop in the future, that we have not appropriately anticipated, identified or mitigated. If our risk management framework does not effectively identify or mitigate our risks, we could suffer unexpected losses and could be materially adversely affected.

~~We may be unable to attract and retain qualified key employees, which could adversely affect our business prospects, including our competitive position and results of operations.~~

Natural disasters, acts of terrorism, pandemics and other external events could harm our business.

Natural disasters can disrupt our operations, result in damage to our properties, reduce or destroy the value of the collateral for our loans and negatively affect the economies in which we operate, which could have a material adverse effect on our results of operations and financial condition. A significant natural disaster, such as a tornado, hurricane, earthquake, fire or flood, could have a material adverse impact on our ability to conduct business, and our insurance coverage may be insufficient to compensate for losses that may occur. Acts of terrorism, war, civil unrest ~~violence~~ or ~~human error~~pandemics could cause disruptions to our business or the economy as a whole. While we have established and regularly test disaster recovery procedures, the occurrence of any such event could have a material adverse effect on our business, operations and financial condition.

Our financial statements are based in part on assumptions and estimates, which, if wrong, could cause unexpected losses in the future.

Pursuant to ~~accounting principles generally accepted in the~~ U.S., GAAP, we are required to use certain assumptions and estimates in preparing our financial statements, including in determining loan loss and litigation reserves, goodwill impairment and the fair value of certain assets and liabilities, among other items. If assumptions or estimates underlying our financial statements are incorrect, we may experience material losses. See the "Critical Accounting Policies" section in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations."

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Changes in accounting standards can be difficult to predict and can materially impact how we record and report our financial condition and results of operations.

Our accounting policies and methods are fundamental to how we record and report our financial condition and results of operations. From time to time, the Financial Accounting Standards Board, or "FASB", changes the financial accounting and reporting principles that govern the preparation of our financial statements. These changes can be hard to anticipate and implement, and can materially impact how we record and report our financial condition and results of operations. In some cases, we could be required to apply a new or revised standard retroactively, resulting in our restating prior period financial statements. Additionally, significant changes to accounting standards may require costly technology changes, additional training and personnel, and other expense that will negatively impact our results of operations.

~~A new accounting standard may require us to increase our allowance for loan losses and may have~~As a ~~material adverse effect on our financial condition and results~~result of ~~operations.~~

~~The Financial Accounting Standards Board has issued Accounting Standards Update~~the adoption of ASU 2016-13 ~~which will be~~ effective ~~for~~January 1, 2020, the Company ~~for~~updated its critical accounting policy to the ~~first quarter of the fiscal year ending December 31, 2020. This standard, often referred to as “CECL” (reflecting a current expected credit loss model), will require companies to recognize an~~ allowance for credit ~~losses based on estimates of losses expected~~losses. The updates in this standard replace the incurred loss impairment methodology GAAP with the CECL methodology. The CECL methodology incorporates current condition, and "reasonable and supportable" forecasts, as well as prepayments, to ~~be realized~~estimate loan losses over the ~~contractual lives~~life of the ~~loans. Under current U.S. GAAP, companies generally recognize credit losses only when it is probable that a loss has been incurred as of~~loan. See Note 7, "Allowance for Credit Losses" for further discussion on the ~~balance sheet date. This~~ new ~~standard will require us to collect~~policy and ~~review increased types and amounts of data for us to determine the appropriate~~

level of the allowance for loan losses, and may require us to increase our allowance for loan losses. Any increase in our allowance for loan losses or expenses incurred to determine the appropriate level of the allowance for loan losses may have a material adverse effect on our financial condition and results of operations. We are currently evaluating the impact of adopting this standard on our consolidated financial statements.processes.

Changes in tax laws and regulations and differences in interpretation of tax laws and regulations may adversely impact our financial statements.

From time to time, local, state or federal tax authorities change tax laws and regulations, which may result in a decrease or increase to our net deferred tax assets. ~~In December 2017, we recognized a write-down of $8.6 million in net deferred tax assets in connection with the adoption of the H.R. 1, the Tax Cuts and Jobs Act.~~ Local, state or federal tax authorities may interpret tax laws and regulations differently than we do and challenge tax positions that we have taken on tax returns. This may result in differences in the treatment of revenues, deductions, credits and/or differences in the timing of these items. The differences in treatment may result in payment of additional taxes, interest or penalties that could have a material adverse effect on our results.

Future capital offerings may adversely affect the market price of our common stock.

In the future, we may attempt to increase our capital resources or, if our banking subsidiaries' capital ratios fall below required minimums, we could be forced to raise additional capital by making additional offerings of debt, common or preferred stock, trust preferred securities, and senior or subordinated notes. Upon liquidation, holders of our debt securities and shares of preferred stock and lenders with respect to other borrowings will receive distributions of our available assets prior to the holders of our common stock. Additional equity offerings may dilute the holdings of our existing stockholders or reduce the market price of our common stock, or both. Because our decision to issue securities in any future offering will depend on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. Moreover, we cannot assure you that such capital will be available to us on acceptable terms or at all. Our inability to raise sufficient additional capital on acceptable terms when needed could adversely affect our businesses, financial condition and results of operations.

The market price and trading volume of our common stock may be volatile.

The market price of our common stock may be volatile. In addition, the trading volume in our common stock may fluctuate and cause significant price variations to occur. We cannot assure you that the market price of our common stock will not fluctuate or decline significantly in the future. Some of the factors that could negatively affect our share price or result in fluctuations in the price or trading volume of our common stock include:

•quarterly variations in our operating results or the quality of our assets;

•operating results that vary from the expectations of management, securities analysts and investors;

•changes in expectations as to our future financial performance;

•announcements of innovations, new products, strategic developments, significant contracts, acquisitions and other material events by us or our competitors;

•the operating and securities price performance of other companies that investors believe are comparable to us;

•our past and future dividend practices;

•future sales of our equity or equity-related securities; and

•changes in global financial markets and global economies and general market conditions, such as interest rates, stock, commodity or real estate valuations or volatility.

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Anti-takeover provisions could negatively impact our stockholders.

Provisions of Delaware law and provisions of our certificate of incorporation and by-laws could make it more difficult for a third party to acquire control of us or have the effect of discouraging a third party from attempting to acquire control of us, even if a merge might be in the best interest of our stockholders.

~~There is no assurance when or even if the merger with First Commons Bank will~~ Our articles of organization authorize our Board of Directors to issue preferred stock without stockholder approval and such preferred stock could be ~~completed.~~

~~We have entered into the Merger Agreement pursuant to which First Commons Bank will merge with and into Brookline Bank with Brookline Bank~~issued as ~~the surviving bank (the “Merger”). The Merger Agreement is subject~~a defensive measure in response to a ~~number of conditions which must be fulfilled in order~~takeover proposal. These and other provisions could make it more difficult for a third party to ~~complete the Merger. Those conditions include:~~acquire us.

~~the receipt of required regulatory approvals;~~

~~absence of orders prohibiting the completion of the merger; and~~

~~the continued accuracy of the representations and warranties by both parties and the performance by both parties of their covenants and agreements.~~

There can be no assurance that the parties will be able to satisfy the closing conditions or that closing conditions beyond their control will be satisfied or waived. In addition, as in any transaction, it is possible that, among other things, restrictions on the combined operations of the two companies may be sought by governmental agencies as a condition to obtaining the required regulatory approvals. This may diminish the benefits of the merger to us or have an adverse effect on us following the merger and prevent us from achieving the expected benefits of the merger.

In addition, the parties to the Merger Agreement can agree at any time to terminate the Merger Agreement even after First Commons Bank’s stockholders have provided their approval. The parties can also terminate the Merger Agreement under other specified circumstances. First Commons Bank may choose to terminate the merger agreement if the 10-day volume weighted average stock price of our common stock as reported on NASDAQ during the ten trading day period ending on the fifth trading day immediately preceding the closing date is less than $11.40 per share and our common stock underperforms the NASDAQ Bank Index by more than 20%. Any such termination would be subject to our right to increase the amount of our common stock and, if applicable, cash to be provided to First Commons Bank stockholders pursuant to the formula prescribed in the Merger Agreement.

~~We may be unable to successfully integrate First Commons Bank’s operations.~~

~~The merger with First Commons Bank involves the integration of two companies that previously operated independently. The difficulties of combining the companies’ operations include:~~

~~integrating personnel with diverse business backgrounds;~~

~~integrating departments, systems, operating procedures and information technologies;~~

~~combining different corporate cultures;~~

~~retaining existing customers and attracting new customers; and~~

~~retaining key employees.~~

The process of integrating operations could cause an interruption of, or loss of momentum in, the activities of one or more of the combined company’s businesses and the loss of key personnel. The diversion of management’s attention and any delays or difficulties encountered in connection with the merger and the integration of the two companies’ operations could have a material adverse effect on the business and results of operations of the combined company.

~~The success of the merger will depend, in part, on our ability to realize the anticipated benefits and cost savings from combining our business with the business of First Commons Bank.~~ If we ~~are unable~~acquire or seek to successfully integrate First Commons Bank, the anticipated benefits and cost savings of the Merger may not be realized fully or may take longer to realize than expected. For example, we may fail to realize the anticipated increase in earnings and cost savings anticipated to be derived from the acquisition. In addition, as with regard to any Merger, a significant change in interest rates or economic conditions or decline in asset valuations may also cause us not to realize expected benefits and result in the merger not being as accretive as expected.

~~Unanticipated costs relating to the merger could reduce our future earnings per share.~~

We believe that we have reasonably estimated the likely costs of integrating our operations with the operations of First Commons Bank, and the incremental costs of operating as a combined company. However, it is possible that we could incur unexpected transaction costs such as taxes, fees or professional expenses or unexpected future operating expenses such as increased personnel costs or increased taxes, which could result in the merger not being as accretive as expected or having a dilutive effect on the combined company’s earnings per share.

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

We have acquired and will continue to consider the acquisition of other financial services companies. To the extent that we acquire other companies in the future, our business may be negatively impacted by certain risks inherent with such acquisitions. Some of these risks include the following:

•We may incur substantial expenses in pursuing potential acquisitions;

•Management may divert its attention from other aspects of our business;

•We may assume potential and unknown liabilities of the acquired company as a result of an acquisition;

•The ~~risk that the~~ acquired business will not perform in accordance with management's ~~expectations;~~expectations, including because we may lose key clients or employees of the acquired business as a result of the change in ownership;

~~The risk that difficulties will~~•Difficulties may arise in connection with the integration of the operations of the acquired business with the operations of our businesses; and

~~The risk that management will divert its attention from other aspects of our business;~~

~~The risk that we~~•We may lose key employees of the combined ~~business; and~~

~~The risks associated with entering into geographic and product markets in which we have limited or no direct prior experience.~~business.

We may be required to write down goodwill and other acquisition-related identifiable intangible assets.

When we acquire a business, ~~such as First Commons Bank,~~ a portion of the purchase price of the acquisition may be allocated to goodwill and other identifiable intangible assets. The excess of the purchase price over the fair value of the net identifiable tangible and intangible assets acquired determines the amount of the purchase price that is allocated to goodwill acquired. As of December 31, ~~2017,~~2020, goodwill and other identifiable intangible assets were ~~$143.9~~$163.6 million. ~~We expect to record approximately $20.0 million in additional goodwill in connection with the acquisition of First Commons Bank.~~ Under current accounting guidance, if we determine that goodwill or intangible assets are impaired, we would be required to write down the value of these assets. We conduct an annual review to determine whether goodwill and other identifiable intangible assets are impaired. We conduct a quarterly review for indicators of impairment of goodwill and other identifiable intangible assets. Our management recently completed these reviews and concluded that no impairment charge was necessary for the year ended December 31, ~~2017.~~2020. We cannot provide assurance whether we will be required to take an impairment charge in the future. Any impairment charge would have a negative effect on stockholders' equity and financial results and may cause a decline in our stock price.

RISKS RELATED TO OUR REGULATORY ENVIRONMENT

We operate in a highly regulated industry, and laws and regulations, or changes in them, could limit or restrict our activities and could have a material adverse effect on our operations.

We and our banking subsidiaries are subject to extensive state and federal regulation and supervision. Federal and state laws and regulations govern numerous matters affecting us, including changes in the ownership or control of banks and bank holding companies, maintenance of adequate capital and the financial condition of a financial institution, permissible types, amounts and terms of extensions of credit and investments, permissible non-banking activities, the level of reserves against deposits and restrictions on dividend payments. The FRB and the state banking regulators have the power to issue cease and desist orders to prevent or remedy unsafe or unsound practices or violations of law by banks subject to their regulation, and the FRB possesses similar powers with respect to bank holding companies. These and other restrictions limit the manner in which we and our banking subsidiaries may conduct business and obtain financing.

The laws, rules, regulations, and supervisory guidance and policies applicable to us are subject to regular modification and change. Such changes could, among other things, subject us to additional costs, including costs of compliance; limit the types of financial services and products we may offer; and/or increase the ability of non-banks to offer competing financial services and products. Failure to comply with laws, regulations, policies, or supervisory guidance could result in enforcement and other legal actions by federal or state authorities, including criminal and civil penalties, the loss of FDIC insurance, revocation of a banking charter, other sanctions by regulatory agencies, civil money penalties, and/or reputational damage, which could have a material adverse effect on our business, financial condition, and results of operations. See the "Supervision and Regulation" section of Item 1, "Business."

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We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions.

The Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Housing Act, and other fair lending laws and regulations impose community investment and nondiscriminatory lending requirements on financial institutions. The Consumer Financial Protection Bureau, the Department of Justice and other federal agencies are responsible for enforcing these laws and regulations. A successful regulatory challenge to an institution’s performance under the Community Reinvestment Act, the Equal Credit Opportunity Act, the Fair Housing Act or other fair lending laws and regulations could result in a wide variety of sanctions, including damages and civil money penalties, injunctive relief, restrictions on mergers and acquisitions, restrictions on expansion and restrictions on entering new business lines. Private parties may also have the ability to challenge an institution’s performance under fair lending laws in private class action litigation. Such actions could have a material adverse effect on our business, financial condition and results of operations.

We may become subject to enforcements actions even though noncompliance was inadvertent or unintentional.

The financial services industry is subject to intense scrutiny from bank supervisors in the examination process and aggressive enforcement of federal and state regulations, particularly with respect to mortgage-related practices and other consumer compliance matters, and compliance with anti-money laundering, Bank Secrecy Act and Office of Foreign Assets Control regulations, and economic sanctions against certain foreign countries and nationals. Enforcement actions may be initiated for violations of laws and regulations and unsafe or unsound practices. We maintain systems and procedures designed to ensure that we comply with applicable laws and regulations; however, some legal/regulatory frameworks provide for the imposition of fines or penalties for noncompliance even though the noncompliance was inadvertent or unintentional and even though there was in place at the time systems and procedures designed to ensure compliance. Failure to comply with these and other regulations, and supervisory expectations related thereto, may result in fines, penalties, lawsuits, regulatory sanctions, reputation damage, or restrictions on our business.

We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us.

From time to time we are named as a defendant or are otherwise involved in various legal proceedings, including class actions and other litigation or disputes with third parties. There is no assurance that litigation with private parties will not increase in the future. Actions against us may result in judgments, settlements, fines, penalties or other results adverse to us, which could materially adversely affect our business, financial condition or results of operations, or cause serious reputational harm to us. As a participant in the financial services industry, it is likely that we could continue to experience a high level of litigation related to our businesses and operations.

Item 1B. Unresolved Staff Comments

None.

Item 2. Properties

The Company’s executive administration offices are located at 131 Clarendon Street, Boston, Massachusetts, which is owned by Brookline Bank, as well as its corporate operations center in Lincoln, Rhode Island, which is owned by BankRI, with other administrative and operations functions performed at several different locations.

Brookline Bank conducts its business from 2530 banking offices, 56 of which are owned, ~~and 20~~23 of which are ~~leased.~~leased, and 1 of which is subleased. Brookline Bank's main banking office is leased and located in Brookline, Massachusetts. Brookline Bank also has 2 additional lending offices and 2 remote ATM locations, ~~both~~all of which are leased. Eastern Funding conducts its business from leased premises in New York City, New York and in Melville, New York.

BankRI conducts its business from 20 banking offices, 6 of which are owned and 14 of which are leased. BankRI's main banking office is leased and located in Providence, Rhode Island. BankRI also has 2 remote ATM locations, all of which are leased. Macrolease conducts its business from leased premises in Plainview, New York.

First Ipswich conducts its business from 6 banking offices, 1 of which is owned, 4 of which are leased and 1 of which is subleased. First Ipswich's main banking office is owned and located in Ipswich, Massachusetts. First Ipswich also has 2 remote ATM locations, both of which are leased.

Refer to Note 13, "Commitments and Contingencies," to the consolidated financial statements for information regarding the Company's lease commitments as of December 31, ~~2017.~~2020.

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Item 3. Legal Proceedings

During the fiscal year ended December 31, ~~2017,~~2020, the Company was not involved in any legal proceedings other than routine legal proceedings occurring in the ordinary course of business. Management believes that those routine legal proceedings involve, in the aggregate, amounts that are immaterial to the Company's financial condition and results of operations.

Item 4. Mine Safety Disclosures

Not applicable.

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PART II

Item 5. Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

(a)The common stock of the Company is traded on NASDAQ under the symbol BRKL. The approximate number of registered holders of common stock as of February 26, 2021 was 1,682. The Company currently pays quarterly cash dividends in the amount of $0.115 per share. The Company expects comparable cash dividends will be paid in the future.

~~(a)~~

The common stock of the Company is traded on NASDAQ under the symbol BRKL. The approximate number of registered holders of common stock as of February 28, 2018 was 1,828. Market prices for the Company's common stock and dividends paid per quarter during 2017 and 2016 follow.

Market Prices
Dividend Paid
Per Share
High Low
2017
First Quarter $ 16.75
$ 14.50
$ 0.09
Second Quarter 15.95
13.75
0.09
Third Quarter 15.50
13.75
0.09
Fourth Quarter 16.35
14.50
0.09
2016
First Quarter $ 11.21
$ 10.23
$ 0.09
Second Quarter 11.69
10.44
0.09
Third Quarter 12.19
10.71
0.09
Fourth Quarter 16.60
12.05
0.09

Equity Compensation Plan Information

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

Five-Year Performance Comparison

The following graph compares total shareholder return on the Company's common stock over the last five years with the ~~the~~ S&P 500 Index, the Russell 2000 Index and the SNL Index of Banks with assets between $5 billion and $10 billion. Index values are as of December 31 of each of the indicated years.


	At December 31,
Index	2015	2016	2017	2018	2019	2020
Brookline Bancorp, Inc.	100.00	147.24	144.42	130.17	159.57	121.83
Russell 2000 Index	100.00	121.31	139.08	123.76	155.35	186.31
SNL Bank $5B-$10B Index	100.00	143.27	142.73	129.17	160.06	122.43
S&P 500 Index	100.00	111.96	136.40	130.42	171.49	203.02

At December 31,
Index 2012 2013 2014 2015 2016 2017
Brookline Bancorp, Inc. 100.00
116.65
127.15
150.69
221.86
217.62
Russell 2000 100.00
138.82
145.62
139.19
168.85
193.58
SNL Bank $5B-$10B 100.00
154.28
158.92
181.04
259.37
258.40
S&P 500 100.00
132.39
150.51
152.59
170.84
208.14

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The graph assumes $100 invested on December 31, ~~2012~~2015 in each of the Company's common stock, the S&P 500 Index, the Russell 2000 Index and the SNL Index of Banks with assets between $5 billion and $10 billion. The graph also assumes reinvestment of all dividends.


~~(b)~~	~~Not applicable.~~


~~(c)~~	There were no purchases made during the year ended December 31, 2017 by or on behalf of the Company of the Company's common stock. As of January 31, 2017, the Company had no authorizations to repurchase outstanding shares.

(b)Not applicable.

(c) The following table presents a summary of the Company's share repurchases during the quarter ended December 31, 2020.


Period	Total Number of Shares Purchased	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Programs (1)	Maximum Number of Shares that May Yet be Purchased Under the Programs (1)
October 28 through December 31, 2020	867,411	$	11.06	867,411	—

______________________________________________________________________________________________________

(1) On December 4, 2019, the Company's Board of Directors approved a stock repurchase program (the "2020 Stock Repurchase Plan") authorizing management to repurchase up to $10.0 million of the Company’s common stock over a period of twelve months commencing on January 1, 2020. On March 9, 2020, the Board of Directors approved an increase in the repurchase amount of $10.0 million bringing the total authorized amount to $20.0 million. Effective March 24, 2020, the Company suspended the 2020 Stock Repurchase Plan. On October 28, 2020, the Board of Directors authorized the resumption of the 2020 Stock Repurchase Plan. As of December 31, 2020, the Company had completed the program.

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Item 6. Selected Financial Data

The selected financial and other data of the Company set forth below are derived in part from, and should be read in conjunction with, the Consolidated Financial Statements of the Company and Notes thereto presented elsewhere herein.


	At or for the year ended December 31,
	2020			2019			2018			2017			2016
	(Dollars in Thousands, Except Per Share Data)
FINANCIAL CONDITION DATA
Total assets	$	8,942,424		$	7,856,853		$	7,392,805		$	6,780,249		$	6,438,129
Total loans and leases	7,269,553			6,737,816			6,303,516			5,730,679			5,398,864
Allowance for loan and lease losses (6)	114,379			61,082			58,692			58,592			53,666
Investment securities available-for-sale	745,822			498,995			502,793			540,124			523,634
Investment securities held-to-maturity	—			86,780			114,776			109,730			87,120
Equity securities held-for-trading	526			3,581			4,207			—			—
Goodwill and identified intangible assets	163,579			164,850			166,513			143,934			146,023
Total deposits	6,910,696			5,830,072			5,454,044			4,871,343			4,611,076
Core deposits (1)	4,826,789			3,808,430			3,664,879			3,663,873			3,570,054
Certificates of deposit	1,389,998			1,671,738			1,438,478			932,725			837,630
Brokered deposits	693,909			349,904			350,687			274,745			203,392
Total borrowed funds	820,247			902,749			920,542			1,020,819			1,044,086
Stockholders' equity	941,778			945,606			900,140			803,830			695,544
Tangible stockholders' equity (*)	778,199			780,756			733,627			659,896			549,521
Nonperforming loans and leases (2)	38,448			19,461			24,097			27,272			40,077
Nonperforming assets (3)	44,963			22,092			28,116			31,691			41,476
EARNINGS DATA
Interest and dividend income	$	326,817		$	347,626		$	313,893		$	263,050		$	239,648
Interest expense	66,654			94,326			66,194			39,869			35,984
Net interest income	260,163			253,300			247,699			223,181			203,664
Provision for credit losses	61,886			9,583			4,951			18,988			10,353
Non-interest income	24,644			29,793			25,224			32,173			22,667
Non-interest expense	160,844			157,481			155,232			139,111			130,362
Provision for income taxes	14,442			28,269			26,189			43,636			30,392
Net income	47,635			87,717			83,062			50,518			52,362
Operating earnings (*)	46,124			88,184			85,796			52,444			52,362
PER COMMON SHARE DATA
Earnings per share - Basic	$	0.60		$	1.10		$	1.04		$	0.68		$	0.74
Earnings per share - Diluted	0.60			1.10			1.04			0.68			0.74
Operating earnings per share (*)	0.58			1.10			1.07			0.70			0.74
Dividends paid per common share	0.460			0.440			0.395			0.360			0.360
Book value per share (end of period)	12.05			11.87			11.30			10.49			9.88
Tangible book value per share (*)	9.96			9.80			9.21			8.61			7.81
Stock price (end of period)	12.04			16.46			13.82			15.70			16.40
PERFORMANCE RATIOS
Net interest margin	3.17		%	3.51		%	3.61		%	3.57		%	3.44		%
Return on average assets	0.55		%	1.15		%	1.15		%	0.76		%	0.83		%
Operating return on average assets (*)	0.53		%	1.15		%	1.19		%	0.79		%	0.83		%
Return on average tangible assets (*)	0.56		%	1.17		%	1.18		%	0.78		%	0.85		%

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At or for the year ended December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands, Except Per Share Data)
FINANCIAL CONDITION DATA
Total assets (*) $ 6,780,249
$ 6,438,129
$ 6,042,338
$ 5,800,948
$ 5,325,651
Total loans and leases 5,730,679
5,398,864
4,995,540
4,822,607
4,362,465
Allowance for loan and lease losses 58,592
53,666
56,739
53,659
48,473
Investment securities held-to-maturity 109,730
87,120
93,757
500
500
Investment securities available-for-sale 540,124
523,634
513,201
550,761
492,428
Goodwill and identified intangible assets 143,934
146,023
148,523
151,434
154,777
Total deposits 4,871,343
4,611,076
4,306,018
3,958,106
3,835,006
Core deposits ⁽¹⁾
3,663,873
3,570,054
3,218,146
3,011,398
2,900,338
Certificates of deposit 1,207,470
1,041,022
1,087,872
946,708
934,668
Total borrowed funds 1,020,819
1,044,086
983,029
1,126,404
812,555
Stockholders' equity (*) 803,830
695,544
667,485
641,818
614,412
Tangible stockholders' equity (*)(**) 659,896
549,521
518,962
490,384
459,635
Nonperforming loans and leases ⁽²⁾
27,272
40,077
19,333
13,714
16,501
Nonperforming assets ⁽³⁾
31,691
41,476
20,676
15,170
18,079
EARNINGS DATA
Interest and dividend income $ 263,050
$ 239,648
$ 226,910
$ 218,482
$ 206,384
Interest expense 39,869
35,984
32,545
29,414
30,166
Net interest income 223,181
203,664
194,365
189,068
176,218
Provision for credit losses 18,988
10,353
7,451
8,477
10,929
Non-interest income (*) 32,173
22,667
20,184
20,180
15,619
Non-interest expense (*) 139,111
130,362
125,377
129,160
122,442
Provision for income taxes (*) 43,636
30,392
29,353
26,286
20,664
Net income (*) 50,518
52,362
49,782
43,288
36,015
Operating earnings (**) 59,747
52,362
49,782
43,288
36,610
PER COMMON SHARE DATA
Earnings per share - Basic (*) $ 0.68
$ 0.74
$ 0.71
$ 0.62
$ 0.52
Earnings per share - Diluted (*) 0.68
0.74
0.71
0.62
0.52
Operating earnings per share (*)(**) 0.80
0.74
0.71
0.62
0.53
Dividends paid per common share 0.36
0.36
0.355
0.34
0.34
Book value per share (end of period) (*) 10.49
9.88
9.51
9.16
8.79
Tangible book value per share (*)(**) 8.61
7.81
7.39
7.00
6.58
Stock price (end of period) 15.70
16.40
11.50
10.03
9.55
PERFORMANCE RATIOS
Net interest margin 3.57 % 3.44 % 3.54 % 3.61 % 3.64 %
Return on average assets (*) 0.76 % 0.83 % 0.85 % 0.78 % 0.70 %
Operating return on average assets (*)(**) 0.90 % 0.83 % 0.85 % 0.78 % 0.71 %
Return on average tangible assets (*)(**) 0.78 % 0.85 % 0.87 % 0.80 % 0.72 %
Operating return on average tangible assets (*)(**) 0.92 % 0.85 % 0.87 % 0.80 % 0.73 %
Return on average stockholders' equity (*) 6.53 % 7.59 % 7.57 % 6.86 % 5.84 %

At or for the year ended December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands, Except Per Share Data)
Operating return on average stockholders' equity (*)(**) 7.73 % 7.59 % 7.57 % 6.86 % 5.94 %
Return on average tangible stockholders' equity (*)(**) 8.04 % 9.66 % 9.80 % 9.06 % 7.84 %
Operating return on average tangible stockholders' equity (*)(**) 9.51 % 9.66 % 9.80 % 9.06 % 7.97 %
Dividend payout ratio (*)(**) 53.52 % 48.44 % 50.15 % 55.16 % 66.20 %
Efficiency ratio (*) ⁽⁴⁾
54.48 % 57.60 % 58.44 % 61.73 % 63.83 %
GROWTH RATIOS
Total loan and lease growth ⁽⁵⁾
6.15 % 8.07 % 3.59 % 10.55 % 4.47 %
Total deposit growth ⁽⁵⁾
5.64 % 7.08 % 8.79 % 3.21 % 6.05 %
ASSET QUALITY RATIOS
Net loan and lease charge-offs as a percentage of average loans and leases 0.25 % 0.25 % 0.09 % 0.07 % 0.08 %
Nonperforming loans and leases as a percentage of total loans and leases 0.48 % 0.74 % 0.39 % 0.28 % 0.38 %
Nonperforming assets as a percentage of total assets (*) 0.47 % 0.64 % 0.34 % 0.26 % 0.34 %
Total allowance for loan and lease losses as a percentage of total loans and leases 1.02 % 0.99 % 1.14 % 1.11 % 1.11 %
Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases (**) 1.05 % 1.03 % 1.20 % 1.20 % 1.32 %
CAPITAL RATIOS
Stockholders' equity to total assets (*) 11.86 % 10.80 % 11.05 % 11.06 % 11.54 %
Tangible equity ratio (*)(**) 9.94 % 8.73 % 8.81 % 8.68 % 8.89 %
Tier 1 leverage capital ratio 10.43 % 9.16 % 9.37 % 9.01 % 9.36 %
Common equity Tier 1 capital ratio (***) 12.02 % 10.48 % 10.62 % N/A
N/A
Tier 1 risk-based capital ratio 12.34 % 10.79 % 10.91 % 10.55 % 11.01 %
Total risk-based capital ratio 14.75 % 13.20 % 13.54 % 13.24 % 12.15 %


	At or for the year ended December 31,
	2020		2019		2018		2017		2016
	(Dollars in Thousands, Except Per Share Data)
Operating return on average tangible assets (*)	0.54	%	1.17	%	1.22	%	0.81	%	0.85	%
Return on average stockholders' equity	5.09	%	9.56	%	9.51	%	6.53	%	7.59	%
Operating return on average stockholders' equity (*)	4.93	%	9.61	%	9.82	%	6.78	%	7.59	%
Return on average tangible stockholders' equity (*)	6.17	%	11.67	%	11.70	%	8.04	%	9.66	%
Operating return on average tangible stockholders' equity (*)	5.97	%	11.73	%	12.09	%	8.35	%	9.66	%
Dividend payout ratio (*)	76.41	%	40.03	%	37.85	%	53.52	%	48.44	%
Efficiency ratio (4)	56.47	%	55.63	%	56.88	%	54.48	%	57.60	%

GROWTH RATIOS
Total loan and lease growth (5)	7.89	%	6.89	%	10.00	%	6.15	%	8.07	%

Total deposit growth (5)	18.54	%	6.89	%	11.96	%	5.64	%	7.08	%

ASSET QUALITY RATIOS
Net loan and lease charge-offs as a percentage of average loans and leases	0.18	%	0.11	%	0.08	%	0.25	%	0.25	%
Nonperforming loans and lease losses as a percentage of total loans and leases	0.53	%	0.29	%	0.38	%	0.48	%	0.74	%
Nonperforming assets as a percentage of total assets	0.50	%	0.28	%	0.38	%	0.47	%	0.64	%
Total allowance for loan and leases losses as a percentage of total loans and leases	1.57	%	0.91	%	0.93	%	1.02	%	0.99	%
CAPITAL RATIOS
Stockholders' equity to total assets	10.53	%	12.04	%	12.18	%	11.86	%	10.80	%
Tangible equity ratio (*)	8.86	%	10.15	%	10.15	%	9.94	%	8.73	%
Tier 1 leverage capital ratio	8.92	%	10.28	%	10.58	%	10.43	%	9.16	%
Common equity Tier 1 capital ratio (**)	11.04	%	11.44	%	11.94	%	12.02	%	10.48	%
Tier 1 risk-based capital ratio	11.18	%	11.58	%	12.26	%	12.34	%	10.79	%
Total risk-based capital ratio	13.51	%	13.59	%	14.42	%	14.75	%	13.20	%

(1) Core deposits consist of demand checking, NOW, money market and savings accounts.

(2) Nonperforming loans and leases consist of nonaccrual loans and leases.

(3) Nonperforming assets consist of nonperforming loans and leases, other real estate owned and other repossessed assets.

(4) The efficiency ratio is calculated by dividing non-interest expense by the sum of net interest income and non-interest income for the period.

(5) Total growth is calculated by dividing the change in the balance during the period by the balance at the beginning of the period.

(6) The allowance for loan and lease losses at December 31, 2020 reflects the adoption of CECL.

(*) Previously reported amounts prior to January 1, 2015 have been restated to reflect a retrospective change in accounting principle for investments in qualified affordable housing projects, in accordance with ASU 2014-01. Refer to Note 10, "Other Assets".

(**) Refer to Non-GAAP Financial Measures and Reconciliation to GAAP.

(***) Common equity tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets. The ratio was established as part of the implementation of Basel III, effective January 1, 2015.

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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

Introduction

The Company, a Delaware corporation, operates as a multi-bank holding company for Brookline Bank and its subsidiaries; BankRI and its subsidiaries; ~~First Ipswich and its subsidiaries;~~ and Brookline Securities Corp.

As a commercially-focused financial institution with 5150 full-service banking offices throughout greater Boston, the north shore of Massachusetts and Rhode Island, the Company, through the Banks, offers a wide range of commercial, business and retail banking services, including a full complement of cash management products, foreign exchange services, on-line and mobile banking services, consumer and residential loans and investment advisory services, designed to meet the financial needs of small- to mid-sized businesses and individuals throughout central New England. Specialty lending activities ~~include~~including equipment financing, ~~primarily~~comprise 27.8% in the New York and New Jersey metropolitan area.

The Company focuses its business efforts on profitably growing its commercial lending businesses, both organically and through acquisitions. The Company’s customer focus, multi-bank structure, and risk management are integral to its organic growth strategy and serve to differentiate the Company from its competitors. As full-service financial institutions, the Banks and their subsidiaries focus their efforts on ~~the continued acquisition of well-qualified customers, the~~developing and deepening of long-term banking relationships with qualified customers through a full complement of products and excellent customer service, and strong risk management.

The Company manages the Banks under uniform strategic objectives, with one set of uniform policies consistently applied by one executive management team. Within this environment, the Company believes that the ability to make customer decisions locally enhances management's motivation, service levels and, as a consequence, the Company's financial results. As such, while most back-office functions are consolidated at the holding company level, branding and decision-making, including credit decisions and pricing, remain largely local in order to better meet the needs of bank customers and further motivate the Banks’ commercial, business and retail bankers. These credit decisions, at the local level, are executed through corporate policies overseen by the Company's credit department.

The competition for loans and leases and deposits remains intense. ~~While the economy improved in 2017, the~~The Company expects the operating environment ~~in 2018~~ to remain challenging. The volume of loan and lease originations and loan and lease losses will depend, to a large extent, on how the economy performs. Loan and lease growth and deposit growth are also greatly influenced by the rate-setting actions of the FRB. A sustained, low interest rate environment with a flat interest rate curve may negatively impact on the Company's yields and net interest margin. While the ~~company~~Company is slightly asset sensitive and should benefit from rising rates, ~~these rate increases~~changes in interest rates could also precipitate a change in the mix and volume of the Company's deposits and loans. The future operating results of the Company will depend on its ability to maintain or increase the current net interest margin, while minimizing exposure to credit risk, along with increasing sources of non-interest income, while controlling the growth of non-interest ~~or operating~~ expenses.

The Company and the Banks are supervised, examined and regulated by the FRB. As a Massachusetts-chartered ~~savings bank and~~ trust company, ~~respectively,~~ Brookline Bank ~~and First Ipswich are~~is also subject to regulation under the laws of the Commonwealth of Massachusetts and the jurisdiction of the Massachusetts Division of Banks. As a Rhode Island-chartered financial institution, BankRI is also subject to regulation under the laws of the State of Rhode Island and the jurisdiction of the Banking Division of the Rhode Island Department of Business Regulation. The FDIC continues to insure each of the Banks’ deposits up to $250,000 per depositor. ~~Additionally, as~~Until July 31, 2019, Brookline Bank was a member bank of the Depositors Insurance Fund (the “DIF”), a private, industry-sponsored insurance fund that insures all deposits above FDIC limits for Massachusetts-chartered savings banks. Brookline Bank converted its charter from a Massachusetts-chartered savings bank ~~Brookline Bank is also insured by~~to a Massachusetts-chartered trust company and ended its membership in the ~~Depositors Insurance Fund (“DIF”), a private industry-sponsored company. The~~ DIF ~~insures savings bank~~on July 31, 2019. Term deposits in excess of the FDIC insurance ~~limits. As such, Brookline Bank offers 100% insurance on all deposits as a result of a combination of insurance from~~coverage will continue to be insured by the ~~FDIC and the DIF.~~DIF until they reach maturity.

The Company’s common stock is traded on the Nasdaq Global Select Market^SM under the symbol “BRKL.”

Executive Overview

Growth

Total assets of ~~$6.8~~$8.9 billion as of December 31, ~~2017~~2020 increased ~~$342.1 million,~~$1.1 billion, or ~~5.3%~~13.8%, from December 31, ~~2016.~~2019. The increase was primarily driven by increases in loans and leases, ~~and investment securities, partly offset by decreases in~~ cash and cash ~~equivalents.~~equivalents and investment securities.

Total loans and leases of ~~$5.7~~$7.3 billion as of December 31, ~~2017~~2020 increased ~~$331.8~~$531.7 million, or ~~6.1%~~7.9%, from December 31, ~~2016.~~2019. The Company's commercial loan portfolios, which are comprised of commercial real estate loans and commercial loans and leases, totaled ~~$4.7~~$6.1 billion, or ~~82.0%~~83.9% of total loans and leases as of December 31, ~~2017,~~2020, an increase of ~~$285.9~~$590.8 million, or ~~6.5%~~10.7%, from ~~$4.4~~$5.5 billion, or ~~81.8%~~81.7% of total loans and leases, as of December 31, ~~2016.~~2019.

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Total deposits of ~~$4.9~~$6.9 billion as of December 31, ~~2017~~2020 increased ~~$260.3 million,~~$1.1 billion, or ~~5.6%~~18.5%, from ~~$4.6~~$5.8 billion as of December 31, ~~2016.~~2019. Core deposits, which include demand checking, NOW, money market and savings accounts, totaled ~~$3.7~~$4.8 billion, or ~~75.2%~~69.8% of total deposits as of December 31, ~~2017,~~2020, an increase of ~~$93.8 million, or 2.6%,~~$1.0 billion, from ~~$3.6~~$3.8 billion, or ~~77.4%~~65.3% of total deposits as of December 31, ~~2016.~~2019. Certificate of deposit balances totaled $1.4 billion, or 20.1% of total deposits as of December 31, 2020, a decrease of $281.7 million, or 16.9% on an annualized basis from $1.7 billion, or 28.7% of total deposits, as of December 31, 2019. Brokered deposit balances totaled $693.9 million, or 10.0% of total deposits as of December 31, 2020, an increase of $344.0 million, or 98.3% on an annualized basis from $349.9 million, or 6.0% of total deposits, as of December 31, 2019.

Asset Quality

Nonperforming assets as of December 31, ~~2017~~2020 totaled ~~$31.7~~$45.0 million, or ~~0.47%~~0.50% of total assets, compared to ~~$41.5~~$22.1 million, or ~~0.64%~~0.28% of total assets, as of December 31, ~~2016.~~2019. Net charge-offs for the year ended December 31, ~~2017~~2020 were ~~$13.9~~$13.0 million, or ~~0.25%~~0.18% of average loans and leases, compared to ~~$13.3~~$7.2 million, or ~~0.25%~~0.11% of average loans and leases, for the year ended December 31, ~~2016.The decrease~~2019. The increase in ~~nonperforming loans and leases and~~ nonperforming assets was primarily driven by the ~~partial charge offs~~inclusion of one commercial relationship of $4.3 million, one construction relationship of $3.9 million, and ~~pay downs on certain taxi medallion loans.~~one commercial relationship classified as OREO loan of $5.4 million during the year ending December 31, 2020.

The ratio of the allowance for loan and lease losses to total loans and leases was ~~1.02%~~1.57% as of December 31, ~~2017,~~2020, compared to ~~0.99%~~0.91% as of December 31, ~~2016. Excluding~~2019. On January 1, 2020, the ~~loans acquired from BankRI and First Ipswich,~~Company implemented the CECL methodology to calculate the allowance for ~~loan and lease losses related~~credit losses. Refer also to originated loans and leases as a percentage of the total originated loan and lease portfolio was 1.05% as of December 31, 2017, compared to 1.03% as of December 31, 2016. The Company continued to employ its historical underwriting methodology throughout the twelve month period ended December 31, 2017.Note 7, "Allowance for Credit Losses."

Capital Strength

The Company is a "well-capitalized" bank holding company as defined in the FRB's Regulation Y. The Company's common equity Tier 1 Capital Ratio was ~~12.02%~~11.04% as of December 31, ~~2017,~~2020, compared to ~~10.48%~~11.44% as of December 31, ~~2016.~~2019. The Company's Tier 1 Leverage Ratio was ~~10.43%~~8.92% as of December 31, ~~2017,~~2020, compared to ~~9.16%~~10.28% as of December 31, ~~2016.~~2019. As of December 31, ~~2017,~~2020, the Company's Tier 1 Risk-Based Ratio was ~~12.34%~~11.18%, compared to ~~10.79%~~11.58% as of December 31, ~~2016.~~2019. The Company's Total Risk-Based Ratio was ~~14.75%~~13.51% as of December 31, ~~2017,~~2020, compared to ~~13.20%~~13.59% as of December 31, ~~2016.~~2019.

The Company's ratio of stockholders' equity to total assets was ~~11.86%~~10.53% and ~~10.80%~~12.04% as of December 31, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively. The Company's tangible equity ratio was ~~9.94%~~8.86% and ~~8.73%~~10.15% as of December 31, ~~2017~~2020 and December 31, ~~2016,~~2019, respectively.

Net Income

For the year ended December 31, ~~2017,~~2020, the Company reported net income of ~~$50.5~~$47.6 million, or ~~$0.68~~$0.60 per basic and diluted share, a decrease of ~~$1.8~~$40.1 million, or ~~3.5%~~45.7%, from ~~$52.4~~$87.7 million, or ~~$0.74~~$1.10 per basic and diluted share for the year ended December 31, ~~2016. Excluding the impact of the Tax Reform Act, net income would have been $59.7 million, with an EPS of $0.80 per basic and diluted share, for the year ended December 31, 2017.~~2019. The decrease in net income is primarily the result of ~~the impact of the Tax Reform Act,~~ an increase in the provision for credit losses of ~~$8.6~~$52.3 million, an increase in non-interest expense of ~~$8.7~~$3.4 million and ~~an increase~~a decrease in ~~provision for~~non-interest income ~~taxes~~ of ~~$13.2~~$5.1 million, partially offset by an increase in net interest income of ~~$19.5~~$6.9 million and ~~an increase~~a decrease in ~~non-interest~~the provision for income taxes of ~~$9.5~~$13.8 million.

The return on average assets was ~~0.76%~~0.55% for the year ended December 31, ~~2017,~~2020, compared to ~~0.83%~~1.15% for the year ended December 31, ~~2016.~~2019. The return on average stockholders' equity was ~~6.53%~~5.09% for the year ended December 31, ~~2017,~~2020, compared to ~~7.59%~~9.56% for the year ended December 31, ~~2016.~~2019.

The net interest margin was ~~3.57%~~3.17% for the year ended December 31, ~~2017 up~~2020 down from ~~3.44%~~3.51% for the year ended December 31, ~~2016.~~2019. The ~~increase~~decrease in the net interest margin is a result of ~~an increase~~a decrease in the yield on interest-earning assets ~~by 16~~of 82 basis points to ~~4.20%~~3.99% in ~~2017~~2020 from ~~4.04%~~4.81% in ~~2016,~~2019, partially offset by ~~an increase~~a decrease of 454 basis points in the Company's overall cost of funds to ~~0.69%~~0.89% in ~~2017~~2020 from ~~0.65%~~1.43% in ~~2016.~~2019.

Results for ~~2017~~2020 included a ~~$19.0~~$61.9 million provision for credit losses, as discussed in the "Allowance for Credit Losses—Allowance for Loan and Lease Losses" section below.

Non-interest income ~~increased $9.5~~decreased $5.1 million to ~~$32.2~~$24.6 million for the year ended December 31, ~~2017~~2020 from ~~$22.7~~$29.8 million for the year ended December 31, ~~2016.~~2019. Several factors contributed to the year over year ~~increase,~~decrease, including ~~an increase~~decreases of ~~$11.4~~$4.0 million in loan level derivative income, net, $1.6 million in deposit fees, $0.6 million in gain on sales of ~~securities recorded~~loans and leases and $0.4 million in ~~the first quarter of 2017,~~other non-interest income, partially offset by ~~a $1.8~~an increase of $1.5 million ~~decrease~~ in ~~loan level derivative income.~~gain on sales of investment securities, net.

Non-interest expense increased ~~$8.7~~$3.4 million to ~~$139.1~~$160.8 million for the year ended December 31, ~~2017~~2020 from ~~$130.4~~$157.5 million for the year ended December 31, ~~2016.~~2019. The increase was largely attributable to ~~an increase~~increases of ~~$4.6~~$4.4 million in compensation ~~an increase of $0.7~~and employee benefits expense and $2.8 million in ~~occupancy, an increase~~FDIC insurance expense, partially offset by decreases of ~~$1.4~~$1.6 million in other

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non-interest expense, $1.3 million in equipment and data processing expense, and ~~an increase of $1.7~~$1.1 million in ~~other non-interest~~merger and acquisition expense.

Critical Accounting Policies

The accounting policies described below are considered critical to understanding the Company's financial condition and operating results. Such accounting policies are considered to be especially important because they involve a higher degree of complexity and require management to make difficult and subjective judgments which often require assumptions or estimates about matters that are inherently uncertain. The use of different judgments, assumptions and estimates could result in material differences in the Company's operating results or financial condition.

~~Valuation of Investment Securities~~

Investment securities classified as available-for-sale are carried at estimated fair value, with any unrealized gains and losses, net of taxes, reported as accumulated other comprehensive income or loss in stockholders' equity. Debt securities that the Company has the positive intent and ability to hold to maturity are classified as "held-to-maturity" and are carried at amortized cost.Allowance for Credit Losses

The market values of the Company's investment securities, particularly its fixed-rate securities, are affected by changes in market interest rates as determined by the term structure of risk-free rates and theallowance for credit spreads associated with different investment categories. In general, as interest rates rise, the fair value of fixed-rate securities will decrease; as interest rates fall, the fair value of fixed-rate securities will increase. On a quarterly basis, the Company reviews and evaluates fair value based on market data obtained from independent sources or, in the absence of active market data, from model-derived valuations based on market assumptions. If the Company deems any decline to be other-than-temporary, the amount of impairment loss recorded in earnings for a debt security is the entire difference between the security's cost and its fair value if the Company intends to sell the debt security prior to recovery or it is more likely than not that the Company will have to sell the debt security prior to recovery. If, however, the Company does not intend to sell the debt security or it concludes that it is more likely than not that the Company will not have to sell the debt security prior to recovery, the credit loss component of an other-than-temporary impairment of a debt security is recognized as a charge to earnings and the remaining portion of the impairment loss is recognized as a reduction in comprehensive income. The credit loss component of an other-than-temporary loss is determined based on the Company's bestlosses represents management's estimate of ~~cash flows~~ expected ~~to be collected. There were no impairment~~ losses ~~charged to earnings in 2017, 2016 and 2015.~~

~~See Note 21, "Fair Value of Financial Instruments" to~~over the ~~consolidated financial statements for additional information on how management determines the fair value of its financial instruments.~~

~~Valuation of Acquired Loans~~

~~Loans that the Company acquired are initially recorded at fair value with no carryover~~life of the ~~related allowance for~~ loan and lease ~~losses. Determining the fair value~~portfolio. The allowance for credit losses consists of the acquired loans involves estimating the amount and timing of principal and interest cash flows initially expected to be collected on the loans and discounting those cash flows at an appropriate market rate of interest. The Company continues to evaluate the reasonableness of expectations for the timing and the amount of cash to be collected. Subsequent decreases in expected cash flows may result in changes in the amortization or accretion of fair market value adjustments, and in some cases may result in a loan being considered impaired.

~~Allowance for Loan and Lease Losses~~

~~The~~ allowance for loan and lease losses ~~represents management's estimate of probable losses inherent in~~and reserve for unfunded commitments, which are classified as a contra-asset and liability within other liabilities, respectively, on the ~~loan and lease portfolio.~~Consolidated Balance Sheets. Additions to the allowance for ~~loan and lease~~credit losses are made by charges to the provision for credit losses. Losses on loans and leases are deducted from the allowance when all or a portion of a loan or lease is considered ~~uncollectable.~~uncollectible. The determination of the loans on which full collectability is not reasonably assured, the estimates of the fair value of the underlying collateral, and the assessment of economic and other conditions are subject to assumptions and judgments by management. Valuation allowances could differ materially as a result of changes in, or different interpretations of, these assumptions and judgments.

Management evaluates the adequacy of the allowance on a quarterly basis and reviews its conclusion as to the amount to be established with the Audit Committee and the Board of Directors.

As a result of the adoption of ASU 2016-13 effective January 1, 2020, the Company updated its critical accounting policy for the allowance for credit losses. The updates in this standard replace the incurred loss impairment GAAP methodology with the CECL methodology. The CECL methodology incorporates current condition, and "reasonable and supportable" forecasts, as well as prepayments, to estimate credit losses over the life of the loan.

See Note 7, "Allowance for ~~Loan and Lease~~Credit Losses," to the consolidated financial statements for ~~additional information~~further discussion on ~~how management determines~~ the ~~balance of the allowance for loan~~new policy and ~~lease losses for each portfolio and class of loans.~~processes.

Impairment of Goodwill

Goodwill is presumed to have an indefinite useful life and is tested at least annually for impairment. Impairment exists when the carrying amount of goodwill exceeds its implied fair value. If fair value exceeds the carrying amount at the time of testing, goodwill is not considered impaired. Quoted market prices in active markets are the best evidence of fair value and are

considered to be used as the basis for measurement, when available. Other acceptable valuation methods include present-value measurements based on multiples of earnings or revenues, or similar performance measures. Differences in valuation techniques could result in materially different evaluations of impairment. In September 2011, the FASB issued Accounting Standards Update ("ASU") 2011-08 which provides guidance for companies when testing goodwill for impairment. The objective of the ASU is to simplify how entities test goodwill for impairment. Pursuant to the ASU, entities may now assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the ~~two-step~~one-step goodwill impairment test. The ~~more-likely-than-not~~more likely than not threshold is defined as having a likelihood of more than 50%.

To determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, an entity should consider the extent to which each of the adverse events or circumstances identified could affect the comparison of a reporting unit's fair value with its carrying amount.

Pursuant to the ASU, an entity should place more weight on the events and circumstances that have the greatest impact on a reporting unit's fair value or the carrying amount of its net assets; and may affect its determination of whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount.

~~Qualitative factors that have been assessed~~In accordance with ASC 350-20-35-3B, an entity can bypass the qualitative assessment and perform the quantitative impairment test. Given the current economic environment, a quantitative analysis was performed where management selected a sample of comparable acquisitions and calculated the control premium associated with each sale. The Company’s market capitalization times the sampled control premium allowed management to compare the calculated market capitalization to the Company’s current book value to determine ~~whether it~~if an adjustment to goodwill is more likely than not that the fair value of a reporting unit is less than its carrying amount including goodwill: general economic conditions, regulatory environment, share price, real estate values, lending concentrations, interest-rate environment, asset quality, capital, financial performance, integration of acquired companies and conversion to a new data processing system.

warranted. The Company ~~has evaluated the qualitative factors discussed above~~did not have any impairment of Goodwill and ~~assessed the effect~~other identified ~~adverse events or circumstances could have, and based on this analysis has concluded there was no indication of goodwill impairment~~intangible assets as of December 31, ~~2017.~~ 2020. Further analysis of the Company’s

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goodwill can be found in Note 9 “Goodwill and Other IntangibleAssets” within the notes to the consolidated financial statements.

~~Identified Intangible Assets~~Recent Accounting Developments

Identified intangible assets are assets resulting from acquisitions that are being amortized over their estimated useful lives. The recoverability of identified intangible assets is evaluated for impairment at least annually. If impairment is deemed to have occurred,In March 2020, the ~~amount of impairment is charged to expense when identified.~~

~~Income Taxes~~

Certain areas of accounting for income taxes require management's judgment, including determining the expected realization of deferred tax assets and the adequacy of liabilities for uncertain tax positions. Judgments are made regarding various tax positions, which are often subjective and involve assumptions about items that are inherently uncertain. If actual factors and conditions differ materially from estimates made by management, the actual realizationFASB issued ASU 2020-04, "Reference Rate Reform (Topic 848)-Facilitation of the ~~net deferred tax assets~~Effects of Reference Rate Reform on Financial Reporting" to provide optional expedients and exceptions for applying GAAP to certain contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or ~~liabilities for uncertain tax positions could vary materially from~~another reference rate expected to be discontinued because of reference rate reform. The expedients and exceptions provided by the ~~amounts previously recorded.~~

~~Deferred tax assets arise from items that may be claimed~~amendments do not apply to contract modifications made and hedging relationships existing as ~~a tax deduction or credit in future income tax returns,~~of December 31, 2022, for which ~~a financial statement tax benefit~~an entity has ~~been recognized. The Company’s realization~~elected certain optional expedients provided that those elections are retained through the end of the ~~deferred tax asset depends upon future levels~~hedging relationship. The amendments in this update are effective for all entities as of ~~its taxable income~~March 12, 2020 through December 31, 2022 and ~~the existence of prior years' taxable income for which claims for refunds can be carried back. Where necessary, valuation allowances are recorded against those deferred tax assets which a~~do not apply to contract modifications made after December 31, 2022. The Company has ~~determined will~~ not ~~be realized. Deferred tax liabilities represent items that will require a future tax payment. Deferred tax liabilities generally represent tax expense recognized~~yet adopted the amendments in this update and is currently in the ~~Company's financial statements for which payment has been deferred, or a deduction claimed on~~process of reviewing its contracts and existing processes in order to assess the ~~Company's tax return but not yet recognized as an expense in~~risks and potential impact to the ~~Company's financial statements. Deferred tax liabilities are also recognized for certain non-cash items such as goodwill.~~Company.

See Note ~~17, “Income Taxes” within~~1, “Basis of Presentation” in the notes to the consolidated financial statements for ~~information regarding income taxes and the impact the enactment of the Tax Reform Act on the Company's consolidated financial statements as of December 31, 2017.~~

~~Recent Accounting Developments~~

~~See Note 1, “Basis of Presentation” within notes to the consolidated financial statements for~~additional information regarding recent accounting developments.

Non-GAAP Financial Measures and Reconciliation to GAAP

In addition to evaluating the ~~Company's~~Company’s results of operations in accordance with GAAP, management periodically supplements this evaluation with an analysis of certain non-GAAP financial measures, such as operating earnings metrics, the

return on average tangible assets, orreturn on average tangible equity, the tangible equity ratio, tangible ~~stockholders' equity, tangible~~ book value per share and dividend payout ~~ratio and the ratio of the allowance for loan and lease losses related to originated loans and leases as a percentage of originated loans and leases.~~ratio. Management believes that these non-GAAP financial measures provide information useful ~~information~~ to investors ~~for~~in understanding the ~~Company's~~Company’s underlying operating performance and ~~trends. These non-GAAP financial measures may also aid investors in facilitating~~trends, and facilitates comparisons with the performance assessment of ~~the Company's~~ financial performance, including non-interest expense control, while the tangible equity ratio and tangible book value per share are used to analyze the relative strength of the ~~Company's~~Company’s capital position.

In light of diversity in presentation among financial institutions, the methodologies used by the Company for determining the non-GAAP financial measures discussed above may differ from those used by other financial institutions.

Operating Earnings

Operating earnings exclude ~~compensation-related~~the after-tax impact of securities gains and ~~acquisition-related items from net income.~~merger and acquisition expense as well as the impact of the Tax Cuts and Jobs Act (the "Tax Act"). By excluding such items, the Company's results can be measured and assessed on a more consistent basis from period to period. Items excluded from operating earnings are also excluded when calculating the operating return and operating efficiency ratios.

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The following table summarizes the Company's operating earnings and operating earnings per share ("EPS") for the periods indicated:

Year Ended December 31,
2017
2016
2015
2014
2013
(Dollars in Thousands, Except Per Share Data)
Net income, as reported (*) $ 50,518
$ 52,362
$ 49,782
$ 43,288
$ 36,015
Adjustments to arrive at operating earnings:
Compensation-related expenses ⁽¹⁾
—
—
—
—
911
Total pre-tax adjustments —
—
—
—
911
Tax effect:
Compensation-related expenses ⁽¹⁾
—
—
—
—
(316 )
Merger and acquisition expense ⁽²⁾
264
—
—
—
—
Impact of Tax Reform Act 8,965
—
—
—
—
Total adjustments, net of tax 9,229
—
—
—
595
Operating earnings (*) $ 59,747
$ 52,362
$ 49,782
$ 43,288
$ 36,610

Earnings per share, as reported (*) $ 0.68
$ 0.74
$ 0.71
$ 0.62
$ 0.52
Adjustments to arrive at operating earnings per share:
Compensation-related expenses ⁽¹⁾
—
—
—
—
0.01
Merger and acquisition expense ⁽²⁾
—
—
�� —
—
—
Impact of Tax Reform Act 0.12
—
—
—
—
Total adjustments per share 0.12
—
—
—
0.01
Operating earnings per share (*) $ 0.80
$ 0.74
$ 0.71
$ 0.62
$ 0.53


	Year Ended December 31,
	2020		2019		2018		2017		2016
	(Dollars in Thousands, Except Per Share Data)
Net income, as reported	$	47,635	$	87,717	$	83,062	$	50,518	$	52,362




Less:
Security gains (after-tax)	1,511		384		174		7,303		—
Add:

Merger and acquisition expense (after-tax) (1)	—		851		2,908		264		—
Impact of Tax Act	—		—		—		8,965		—

Operating earnings	$	46,124	$	88,184	$	85,796	$	52,444	$	52,362

Earnings per share, as reported	$	0.60	$	1.10	$	1.04	$	0.68	$	0.74

Less:
Security gains (after-tax)	0.02		—		—		0.10		—
Add:

Merger and acquisition expense (after-tax) (1)	—		—		0.03		—		—
Impact of Tax Act	—		—		—		0.12		—

Operating earnings per share	$	0.58	$	1.10	$	1.07	$	0.70	$	0.74

_________________________________________________________________________

(1) ~~Compensation-related expenses include expense related to the departure of the Company's Chief Financial Officer in 2013.~~

~~(2)~~ Merger and acquisition expense related to the acquisition of First Commons Bank in the first quarter of ~~2018.~~2018 and the purchase of the remaining minority interest of Eastern Funding in the first quarter of 2019.

The following table summarizes the Company's operating return on average assets, operating return on average tangible assets, operating return on average stockholders' equity and operating return on average tangible stockholders' equity for the periods indicated:

Year Ended December 31,
2017
2016
2015
2014
2013
(Dollars in Thousands)
Operating earnings (*) $ 59,747
$ 52,362
$ 49,782
$ 43,288
$ 36,610

Average total assets (*) $ 6,607,234
$ 6,279,722
$ 5,840,749
$ 5,556,224
$ 5,174,232
Less: Average goodwill and average identified intangible assets, net 145,000
147,308
150,020
153,170
157,187
Average tangible assets (*) $ 6,462,234
$ 6,132,414
$ 5,690,729
$ 5,403,054
$ 5,017,045

Return on average assets (*) 0.76 % 0.83 % 0.85 % 0.78 % 0.70 %
Add:
Compensation-related expenses — % — % — % — % 0.01 %
Impact of Tax Reform Act 0.14 % — % — % — % — %
Operating return on average assets (*) 0.90 % 0.83 % 0.85 % 0.78 % 0.71 %

Return on average tangible assets (*) 0.78 % 0.85 % 0.87 % 0.80 % 0.72 %
Add:
Compensation-related expenses — % — % — % — % 0.01 %
Impact of Tax Reform Act 0.14 % — % — % — % — %
Operating return on average tangible assets (*) 0.92 % 0.85 % 0.87 % 0.80 % 0.73 %

Average total stockholders' equity (*) $ 773,244
$ 689,556
$ 657,841
$ 630,966
$ 616,473
Less: Average goodwill and average identified intangible assets, net 145,000
147,308
150,020
153,170
157,187
Average tangible stockholders' equity (*) $ 628,244
$ 542,248
$ 507,821
$ 477,796
$ 459,286

Return on average stockholders' equity (*) 6.53 % 7.59 % 7.57 % 6.86 % 5.84 %
Add:
Compensation-related expenses — % — % — % — % 0.10 %
Merger and acquisition expense 0.03 % — % — % — % — %
Impact of Tax Reform Act 1.17 % — % — % — % — %
Operating return on average stockholders' equity (*) 7.73 % 7.59 % 7.57 % 6.86 % 5.94 %

Return on average tangible stockholders' equity (*) 8.04 % 9.66 % 9.80 % 9.06 % 7.84 %
Add:
Compensation-related expenses — % — % — % — % 0.13 %
Merger and acquisition expense 0.04 % — % — % — % — %
Impact of Tax Reform Act 1.43 % — % — % — % — %
Operating return on average tangible stockholders' equity (*) 9.51 % 9.66 % 9.80 % 9.06 % 7.97 %

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	Year Ended December 31,
	2020			2019			2018			2017			2016
	(Dollars in Thousands)
Operating earnings	$	46,124		$	88,184		$	85,796		$	52,444		$	52,362

Average total assets	$	8,683,569		$	7,654,634		$	7,223,081		$	6,607,234		$	6,279,722
Less: Average goodwill and average identified intangible assets, net	164,227			165,697			163,712			145,000			147,308
Average tangible assets	$	8,519,342		$	7,488,937		$	7,059,369		$	6,462,234		$	6,132,414

Return on average assets	0.55		%	1.15		%	1.15		%	0.76		%	0.83		%
Less:
Security gains (after-tax)	0.02		%	0.01		%	—		%	0.11		%	—		%
Add:

Merger and acquisition expense (after-tax)	—		%	0.01		%	0.04		%	—		%	—		%
Impact of Tax Act	—		%	—		%	—		%	0.14		%	—		%
Operating return on average assets	0.53		%	1.15		%	1.19		%	0.79		%	0.83		%

Return on average tangible assets	0.56		%	1.17		%	1.18		%	0.78		%	0.85		%
Less:
Security gains (after-tax)	0.02		%	0.01		%	—		%	0.11		%	—		%
Add:

Merger and acquisition expense (after-tax)	—		%	0.01		%	0.04		%	—		%	—		%
Impact of Tax Act	—		%	—		%	—		%	0.14		%	—		%
Operating return on average tangible assets	0.54		%	1.17		%	1.22		%	0.81		%	0.85		%

Average total stockholders' equity	$	936,075		$	917,286		$	873,388		$	773,244		$	689,556
Less: Average goodwill and average identified intangible assets, net	164,227			165,697			163,712			145,000			147,308
Average tangible stockholders' equity	$	771,848		$	751,589		$	709,676		$	628,244		$	542,248

Return on average stockholders' equity	5.09		%	9.56		%	9.51		%	6.53		%	7.59		%
Less:
Security gains (after-tax)	0.16		%	0.04		%	0.02		%	0.94		%	—		%
Add:

Merger and acquisition expense (after-tax)	—		%	0.09		%	0.33		%	0.03		%	—		%
Impact of Tax Act	—		%	—		%	—		%	1.17		%	—		%
Operating return on average stockholders' equity	4.93		%	9.61		%	9.82		%	6.79		%	7.59		%

Return on average tangible stockholders' equity	6.17		%	11.67		%	11.70		%	8.04		%	9.66		%
Less:
Security gains (after-tax)	0.20		%	0.05		%	0.02		%	1.16		%	—		%
Add:

Merger and acquisition expense (after-tax)	—		%	0.11		%	0.41		%	0.04		%	—		%
Impact of Tax Act	—		%	—		%	—		%	1.43		%	—		%
Operating return on average tangible stockholders' equity	5.97		%	11.73		%	12.09		%	8.35		%	9.66		%

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The following table summarizes the Company’s return on average tangible assets and return on average tangible stockholders’ equity for the periods indicated:


	Year Ended December 31,
	2020			2019			2018			2017			2016
	(Dollars in Thousands)
Net income, as reported	$	47,635		$	87,717		$	83,062		$	50,518		$	52,362

Average total assets	$	8,683,569		$	7,654,634		$	7,223,081		$	6,607,234		$	6,279,722
Less: Average goodwill and average identified intangible assets, net	164,227			165,697			163,712			145,000			147,308
Average tangible assets	$	8,519,342		$	7,488,937		$	7,059,369		$	6,462,234		$	6,132,414

Return on average tangible assets	0.56		%	1.17		%	1.18		%	0.78		%	0.85		%

Average total stockholders' equity	$	936,075		$	917,286		$	873,388		$	773,244		$	689,556
Less: Average goodwill and average identified intangible assets, net	164,227			165,697			163,712			145,000			147,308
Average tangible stockholders' equity	$	771,848		$	751,589		$	709,676		$	628,244		$	542,248

Return on average tangible stockholders' equity	6.17		%	11.67		%	11.70		%	8.04		%	9.66		%

Year Ended December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands)
Net income, as reported (*) $ 50,518
$ 52,362
$ 49,782
$ 43,288
$ 36,015

Average total assets (*) $ 6,607,234
$ 6,279,722
$ 5,840,749
$ 5,556,224
$ 5,174,232
Less: Average goodwill and average identified intangible assets, net 145,000

147,308

150,020

153,170

157,187
Average tangible assets (*) $ 6,462,234
$ 6,132,414
$ 5,690,729
$ 5,403,054
$ 5,017,045

Return on average tangible assets (*) 0.78 % 0.85 % 0.87 % 0.80 % 0.72 %

Average total stockholders' equity (*) $ 773,244
$ 689,556
$ 657,841
$ 630,966
$ 616,473
Less: Average goodwill and average identified intangible assets,net 145,000
147,308
150,020
153,170
157,187
Average tangible stockholders' equity (*) $ 628,244
$ 542,248
$ 507,821
$ 477,796
$ 459,286

Return on average tangible stockholders' equity (*) 8.04 % 9.66 % 9.80 % 9.06 % 7.84 %

The following ~~tables summarize~~table summarizes the Company's tangible equity ratio for the periods indicated:

At December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands)
Total stockholders' equity (*) $ 803,830
$ 695,544
$ 667,485
$ 641,818
$ 614,412
Less: Goodwill and identified intangible assets, net 143,934
146,023
148,523
151,434
154,777
Tangible stockholders' equity (*) $ 659,896
$ 549,521
$ 518,962
$ 490,384
$ 459,635

Total assets (*) $ 6,780,249
$ 6,438,129
$ 6,042,338
$ 5,800,948
$ 5,325,651
Less: Goodwill and identified intangible assets, net 143,934
146,023
148,523
151,434
154,777
Tangible assets (*) $ 6,636,315
$ 6,292,106
$ 5,893,815
$ 5,649,514
$ 5,170,874

Tangible equity ratio (*) 9.94 % 8.73 % 8.81 % 8.68 % 8.89 %


	At December 31,
	2020			2019			2018			2017			2016
	(Dollars in Thousands)
Total stockholders' equity	$	941,778		$	945,606		$	900,140		$	803,830		$	695,544
Less: Goodwill and identified intangible assets, net	163,579			164,850			166,513			143,934			146,023
Tangible stockholders' equity	$	778,199		$	780,756		$	733,627		$	659,896		$	549,521

Total assets	$	8,942,424		$	7,856,853		$	7,392,805		$	6,780,249		$	6,438,129
Less: Goodwill and identified intangible assets, net	163,579			164,850			166,513			143,934			146,023
Tangible assets	$	8,778,845		$	7,692,003		$	7,226,292		$	6,636,315		$	6,292,106

Tangible equity ratio	8.86		%	10.15		%	10.15		%	9.94		%	8.73		%

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The following ~~tables summarize~~table summarizes the Company's tangible book value per share for the periods indicated:

Year Ended December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands)
Tangible stockholders' equity (*) $ 659,896
$ 549,521
$ 518,962
$ 490,384
$ 459,635

Common shares issued 81,695,695
75,744,445
75,744,445
75,744,445
75,744,445
Less:
Treasury shares 4,440,665
4,707,096
4,861,554
5,040,571
5,171,985
Unallocated ESOP 142,332
176,688
213,066
251,382
291,666
Unvested restricted stocks 455,283
476,854
486,035
419,702
409,068
Common shares outstanding 76,657,415
70,383,807
70,183,790
70,032,790
69,871,726

Tangible book value per share (*) $ 8.61
$ 7.81
$ 7.39
$ 7.00
$ 6.58


	Year Ended December 31,
	2020		2019		2018		2017		2016
	(Dollars in Thousands)
Tangible stockholders' equity	$	778,199	$	780,756	$	733,627	$	659,896	$	549,521

Common shares issued	85,177,172		85,177,172		85,177,172		81,695,695		75,744,445
Less:
Treasury shares	6,525,783		5,003,127		5,020,025		4,440,665		4,707,096
Unallocated ESOP	51,114		79,548		109,950		142,332		176,688
Unvested restricted stock	458,800		406,450		390,636		455,283		476,854
Common shares outstanding	78,141,475		79,688,047		79,656,561		76,657,415		70,383,807

Tangible book value per share	$	9.96	$	9.80	$	9.21	$	8.61	$	7.81

The following table summarizes the Company's dividend payout ratio for the periods indicated:

Year Ended December 31,
2017
2016
2015
2014
2013
(Dollars in Thousands)
Dividends paid $ 27,035
$ 25,366
$ 24,967
$ 23,876
$ 23,841

Net income, as reported (*) $ 50,518
$ 52,362
$ 49,782
$ 43,288
$ 36,015

Dividend payout ratio (*) 53.52 % 48.44 % 50.15 % 55.16 % 66.20 %


	Year Ended December 31,
	2020			2019			2018			2017			2016
	(Dollars in Thousands)
Dividends paid	$	36,396		$	35,110		$	31,441		$	27,035		$	25,366

Net income, as reported	$	47,635		$	87,717		$	83,062		$	50,518		$	52,362

Dividend payout ratio	76.41		%	40.03		%	37.85		%	53.52		%	48.44		%

The following table summarizes the Company’s allowance for loan and lease losses ~~related to originated loans and leases~~ as a percentage of total ~~originated~~ loans and leases, excluding PPP loans, for the periods indicated:


	Year Ended December 31,
	2020			2019			2018			2017			2016

Allowance for loan and lease losses	$	114,379		$	61,082		$	58,692		$	58,592		$	53,666

Total loans and leases	$	7,269,553		$	6,737,816		$	6,303,516		$	5,730,679		$	5,398,864
Less: Total PPP loans	489,216			—			—			—			—
Total loans and leases, excluding PPP loans	$	6,780,337		$	6,737,816		$	6,303,516		$	5,730,679		$	5,398,864

Allowance for loan and lease losses as a percentage of total loans and leases, less PPP loans	1.69		%	0.91		%	0.93		%	1.02		%	0.99		%

Year Ended December 31,
2017 2016 2015 2014 2013

Allowance for loan and lease losses $ 58,592
$ 53,666
$ 56,739
$ 53,659
$ 48,473
Less: Allowance for acquired loan and lease losses 1,040
1,253
1,752
2,848
1,629
Allowance for originated loan and lease losses $ 57,552

$ 52,413

$ 54,987

$ 50,811

$ 46,844

Total loans and leases $ 5,730,679
$ 5,398,864
$ 4,995,540
$ 4,822,607
$ 4,362,465
Less: Total acquired loans and leases 240,057
315,304
422,652
590,654
815,412
Total originated loan and leases $ 5,490,622

$ 5,083,560

$ 4,572,888

$ 4,231,953

$ 3,547,053

Allowance for loan and lease losses related to originated loans and leases as a percentage of originated loan and leases 1.05 %
1.03 %
1.20 %
1.20 %
1.32 %

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Financial Condition

Loans and Leases

The following table summarizes the Company's portfolio of loans and leases receivables as of the dates indicated:


	At December 31,
	2020				2019				2018				2017				2016
	Balance		Percent of Total		Balance		Percent of Total		Balance		Percent of Total		Balance		Percent of Total		Balance		Percent of Total
	(Dollars in Thousands)
Commercial real estate loans:
Commercial real estate	$	2,578,773	35.4	%	$	2,491,011	37.0	%	$	2,330,725	37.0	%	$	2,174,969	38.0	%	$	2,050,382	38.1	%
Multi-family mortgage	1,013,432		13.9	%	932,163		13.8	%	847,711		13.4	%	760,670		13.3	%	731,186		13.5	%
Construction	231,621		3.2	%	246,048		3.7	%	173,300		2.7	%	140,138		2.4	%	136,999		2.5	%
Total commercial real estate loans	3,823,826		52.5	%	3,669,222		54.5	%	3,351,736		53.1	%	3,075,777		53.7	%	2,918,567		54.1	%
Commercial loans and leases:
Commercial	1,131,668		15.6	%	729,502		10.8	%	736,418		11.7	%	705,004		12.3	%	635,426		11.8	%
Equipment financing	1,092,461		15.0	%	1,052,408		15.6	%	982,089		15.6	%	866,488		15.1	%	799,860		14.8	%
Condominium association	50,770		0.7	%	56,838		0.8	%	50,451		0.8	%	52,619		0.9	%	60,122		1.1	%
Total commercial loans and leases	2,274,899		31.3	%	1,838,748		27.2	%	1,768,958		28.1	%	1,624,111		28.3	%	1,495,408		27.7	%
Consumer loans:
Residential mortgage	791,317		10.9	%	814,245		12.1	%	782,968		12.4	%	660,065		11.5	%	624,349		11.6	%
Home equity	346,652		4.8	%	376,819		5.6	%	376,484		6.0	%	355,954		6.2	%	342,241		6.3	%
Other consumer	32,859		0.5	%	38,782		0.6	%	23,370		0.4	%	14,772		0.3	%	18,299		0.3	%
Total consumer loans	1,170,828		16.2	%	1,229,846		18.3	%	1,182,822		18.8	%	1,030,791		18.0	%	984,889		18.2	%
Total loans and leases	7,269,553		100.0	%	6,737,816		100.0	%	6,303,516		100.0	%	5,730,679		100.0	%	5,398,864		100.0	%
Allowance for loan and lease losses	(114,379)				(61,082)				(58,692)				(58,592)				(53,666)
Net loans and leases	$	7,155,174			$	6,676,734			$	6,244,824			$	5,672,087			$	5,345,198

At December 31,
2017 2016 2015 2014 2013
Balance
Percent
of Total
Balance
Percent
of Total
Balance
Percent
of Total
Balance
Percent
of Total
Balance
Percent
of Total
(Dollars in Thousands)
Commercial real estate loans:
Commercial real estate $ 2,174,969
38.0 % $ 2,050,382
38.1 % $ 1,875,592
37.5 % $ 1,680,082
34.8 % $ 1,461,985
33.5 %
Multi-family mortgage 760,670
13.3 % 731,186
13.5 % 658,480
13.2 % 639,706
13.2 % 627,933
14.4 %
Construction 140,138
2.4 % 136,999
2.5 % 130,322
2.6 % 148,013
3.1 % 113,705
2.6 %
Total commercial real estate loans 3,075,777
53.7 % 2,918,567
54.1 % 2,664,394
53.3 % 2,467,801
51.1 % 2,203,623
50.5 %
Commercial loans and leases:
Commercial 705,004
12.3 % 635,426
11.8 % 592,531
11.9 % 514,077
10.7 % 407,792
9.3 %
Equipment financing 866,488
15.1 % 799,860
14.8 % 721,890
14.5 % 601,424
12.5 % 513,024
11.8 %
Condominium association 52,619
0.9 % 60,122
1.1 % 59,875
1.2 % 51,593
1.1 % 44,794
1.0 %
Total commercial loans and leases 1,624,111
28.3 % 1,495,408
27.7 % 1,374,296
27.6 % 1,167,094
24.3 % 965,610
22.1 %
Consumer loans:
Residential mortgage 660,065
11.5 % 624,349
11.6 % 616,449
12.3 % 571,920
11.9 % 528,185
12.1 %
Home equity 355,954
6.2 % 342,241
6.3 % 314,553
6.3 % 287,058
5.9 % 257,461
5.9 %
Other consumer 14,772
0.3 % 18,299
0.3 % 25,848
0.5 % 328,734
6.8 % 407,586
9.4 %
Total consumer loans 1,030,791
18.0 % 984,889
18.2 % 956,850
19.1 % 1,187,712
24.6 % 1,193,232
27.4 %
Total loans and leases 5,730,679
100.0 % 5,398,864
100.0 % 4,995,540
100.0 % 4,822,607
100.0 % 4,362,465
100.0 %
Allowance for loan and lease losses (58,592 ) (53,666 ) (56,739 ) (53,659 ) (48,473 )
Net loans and leases $ 5,672,087
$ 5,345,198
$ 4,938,801
$ 4,768,948
$ 4,313,992

The following table sets forth the growth in the Company’s loan and lease portfolios during the year ending December 31, 2020


	At December 31, 2020		At December 31, 2019		Dollar Change		Percent Change (Annualized)
	(Dollars in Thousands)
Commercial real estate	$	3,823,826	$	3,669,222	$	154,604	4.2	%
Commercial	$	2,274,899	$	1,838,748	436,151		23.7	%
Consumer	$	1,170,828	$	1,229,846	(59,018)		-4.8	%
Total loans and leases	$	7,269,553	$	6,737,816	$	531,737	7.9	%

The Company's loan portfolio consists primarily of first mortgage loans secured by commercial, multi-family and residential real estate properties located in the Company's primary lending area, loans to business entities, including commercial lines of credit, loans to condominium associations and loans and leases used to finance equipment used by small businesses. The Company also provides financing for construction and development projects, home equity and other consumer loans.

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The Company employs seasoned commercial lenders and retail bankers who rely on community and business contacts as well as referrals from customers, attorneys and other professionals to generate loans and deposits. Existing borrowers are also an important source of business since many of them have more than one loan outstanding with the Company. The Company's ability to originate loans depends on the strength of the economy, trends in interest rates, and levels of customer demand and market competition.

The Company's current policy is that the ~~aggregate amount of loans outstanding~~total credit exposure to ~~any~~ one ~~borrower or related entities~~obligor relationship may not exceed ~~$35.0~~$50.0 million unless approved by the Board Credit Committee, a committee of the Company's Board of Directors.

As of December 31, ~~2017,~~2020, there were ~~twelve~~two borrowers with commitments over ~~$35.0~~$50.0 million. The total of those commitments was ~~$537.1~~$114.4 million or ~~8.0%~~1.3% of total loans and commitments as of December 31, ~~2017.~~2020. As of December 31, 2019, there were three borrowers with loans and commitments over $50.0 million. The total of those loans and commitments was $194.3 million, or 2.4% of total loans and commitments, as of December 31, 2019.

The Company has written underwriting policies to control the inherent risks in loan origination. The policies address approval limits, loan-to-value ratios, appraisal requirements, debt service coverage ratios, loan concentration limits and other matters relevant to loan underwriting.

Commercial Real Estate Loans

The commercial real estate portfolio is comprised of commercial real estate loans, multi-family mortgage loans, and construction loans and is the largest component of the Company's overall loan portfolio, representing ~~53.7%~~52.5% of total loans and leases outstanding as of December 31, ~~2017.~~2020.

Typically, commercial real estate loans are larger in size and involve a greater degree of risk than owner-occupied residential mortgage loans. Loan repayment is usually dependent on the successful operation and management of the properties and the value of the properties securing the loans. Economic conditions can greatly affect cash flows and property values.

A number of factors are considered in originating commercial real estate and multi-family mortgage loans. The qualifications and financial condition of the borrower (including credit history), as well as the potential income generation and the value and condition of the underlying property, are evaluated. When evaluating the qualifications of the borrower, the Company considers the financial resources of the borrower, the borrower's experience in owning or managing similar property and the borrower's payment history with the Company and other financial institutions. Factors considered in evaluating the underlying property include the net operating income of the mortgaged premises before debt service and depreciation, the debt service coverage ratio (the ratio of cash flow before debt service to debt service), the use of conservative capitalization rates, and the ratio of the loan amount to the appraised value. Generally, personal guarantees are obtained from commercial real estate loan borrowers.

Commercial real estate and multi-family mortgage loans are typically originated for terms of five to fifteen years with amortization periods of 20 to 30 years. Many of the loans are priced at inception on a fixed-rate basis generally for periods ranging from two to five years with repricing periods for longer-term loans. When possible, prepayment penalties are included in loan covenants on these loans. For commercial customers who are interested in loans with ~~fixed rate~~ terms longer than five years, the Company offers loan level derivatives to accommodate customer need.

The Company's urban and suburban market area is characterized by a large number of apartment buildings, condominiums and office ~~buildings, retail stores, among others.~~buildings. As a result, commercial real estate and multi-family mortgage lending has been a significant part of the Company's activities for many years. These types of loans typically generate higher yields, but also involve greater credit risk. Many of the Company's borrowers have more than one multi-family or commercial real estate loan outstanding with the Company. ~~The Company monitors the commercial real estate portfolio for tenant exposures; both by company and industry.~~

The ~~permanent~~ commercial real estate portfolio was composed primarily of loans secured by apartment buildings ($~~750.3~~927.0 million), office buildings ($~~636.3~~668.4 million), retail stores ($~~495.4~~606.3 million), industrial properties ($~~367.1~~443.2 million), mixed-use properties ($~~204.9~~329.1 million), lodging services ($~~109.9~~149.2 million) and to food services ($~~53.0~~55.9 million) as of December 31, ~~2017. At~~2020. As of that date, ~~97.2%~~approximately 96.6% of the commercial real estate loans outstanding were secured by properties located in New England.

Construction and development financing is generally considered to involve a higher degree of risk than long-term financing on improved, occupied real estate and thus has lower concentration limits than do other commercial credit classes. Risk of loss on a construction loan is largely dependent upon the accuracy of the initial estimate of construction costs, the estimated time to sell or rent the completed property at an adequate price or rate of occupancy, and market conditions. If the estimates and projections prove to be inaccurate, the Company may be confronted with a project which, upon completion, has a value that is insufficient to assure full loan repayment.

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Criteria applied in underwriting construction loans for which the primary source of repayment is the sale of the property ~~are~~is different from the criteria applied in underwriting construction loans for which the primary source of repayment is the stabilized cash flow from the completed project. For those loans where the primary source of repayment is from resale of the property, in addition to the normal credit analysis performed for other loans, the Company also analyzes project costs, the attractiveness of the property in relation to the market in which it is located and demand within the market area. For those construction loans where the source of repayment is the stabilized cash flow from the completed project, the Company analyzes not only project costs but also how long it might take to achieve satisfactory occupancy and the reasonableness of projected rental rates in relation to market rental rates.

Commercial Loans

The commercial loan and lease portfolio is comprised of commercial loans, equipment financing loans and leases and condominium association loans ~~and represented 28.3%~~representing 31.3% of total loans outstanding as of December 31, ~~2017.~~2020.

The commercial loan and lease portfolio is composed primarily of loans to small businesses ($~~507.6~~680.2 million), transportation services ($~~344.5~~386.8 million), food services ($214.4 million), recreation services ($~~149.7 million), food services ($113.2 million), manufacturing ($90.4~~160.0 million), rental and leasing services ($~~82.1~~114.8 million), manufacturing ($141.2 million), and retail ($~~69.5~~98.0 million) as of December 31, ~~2017.~~2020.

The Company provides commercial banking services to companies in its market area. Approximately ~~46.2%~~54.0% of the commercial loans outstanding as of December 31, ~~2017~~2020 were made to borrowers located in New England. The remaining ~~53.8%~~46.0% of the commercial loans outstanding were made to borrowers in other areas in the United States of America, primarily by the Company's equipment financing divisions. Product offerings include lines of credit, term loans, letters of credit, deposit services and cash management. These types of credit facilities have as their primary source of repayment cash flows from the operations of a business. Interest rates offered are available on a floating basis tied to the prime rate or a similar index or on a fixed-rate basis referenced on the Federal Home Loan Bank of Boston ("FHLBB") index.

Credit extensions are made to established businesses on the basis of loan purpose and assessment of capacity to repay as determined by an analysis of their financial statements, the nature of collateral to secure the credit extension and, in most instances, the personal guarantee of the owner of the business as well as industry and general economic conditions. The Company also participates in U.S. Government programs such as the ~~Small Business Administration (the "SBA")~~SBA in both the 7A program and as an SBA preferred lender. Included in the commercial loans balances are the PPP loans totaling $463.5 million as of December 31, 2020.

The Company’s equipment financing divisions focus on market niches in which its lenders have deep experience and industry contacts, and on making loans to customers with business experience. An important part of the Company’s equipment financing loan origination volume comes from equipment manufacturers and existing customers as they expand their operations. The equipment financing portfolio is composed primarily of loans to finance laundry, tow trucks, fitness, dry cleaning and convenience store equipment. Approximately ~~16.2%~~13.4% of the commercial loans outstanding were in the equipment financing divisions made to borrowers located primarily in the greater New York and New Jersey metropolitan area. Typically, the loans are priced at a fixed rate of interest and require monthly payments over their three- to seven-year life. The yields earned on equipment financing loans are higher than those earned on the commercial loans made by the Banks because they involve a higher degree of credit risk. Equipment financing customers are typically small-business owners who operate with limited financial resources and who face greater risks when the economy weakens or unforeseen adverse events arise. Because of these characteristics, personal guarantees of borrowers are usually obtained along with liens on available assets. The size of loan is determined by an analysis of cash flow and other characteristics pertaining to the business and the equipment to be financed, based on detailed revenue and profitability data of similar operations.

Loans to condominium associations are for the purpose of funding capital improvements, are made for five- to ten-year terms and are secured by a general assignment of condominium association revenues. Among the factors considered in the underwriting of such loans are the level of owner occupancy, the financial condition and history of the condominium association, the attractiveness of the property in relation to the market in which it is located and the reasonableness of estimates of the cost of capital improvements to be made. Depending on loan size, funds are advanced as capital improvements are made and, in more complex situations, after completion of engineering inspections.

Consumer Loans

The consumer loan portfolio is comprised of residential mortgage loans, home equity loans and lines of credit, and other consumer loans ~~and represented 18.0%~~representing, 16.2% of total loans outstanding as of December 31, ~~2017.~~2020. The Company focuses its mortgage and home equity lending on existing and new customers within its branch networks in its urban and suburban marketplaces in the greater Boston and Providence metropolitan areas.

The Company originates ~~adjustable-~~adjustable and ~~fixed-rate~~fixed rate residential mortgage loans secured by ~~one- to four-family~~one-to-four-family residences. Each residential mortgage loan granted is subject to a satisfactorily completed application, employment verification, credit

Table of Contents

history and a demonstrated ability to repay the debt. Generally, loans are not made when the loan-to-value ratio exceeds 80% unless private mortgage insurance is obtained and/or there is a financially strong guarantor. Appraisals are performed by outside independent fee appraisers.

In general, the Company maintains three-, five- and seven-year adjustable-rate mortgage loans and ten-year fixed-rate fully amortizing mortgage loans in its portfolio. Fixed-rate mortgage loans with maturities beyond ten years, such as 15- and 30-year fixed-rate mortgages, are generally sold into the secondary market on a servicing-released basis. The Banks act as correspondent banks in these secondary-market transactions. Loan sales in the secondary market provide funds for additional lending and other banking activities.

Underwriting guidelines for home equity loans and lines of credit are similar to those for residential mortgage loans. Home equity loans and lines of credit are limited to no more than 80% of the appraised value of the property securing the loan including the amount of any existing first mortgage liens.

Other consumer loans have historically been a modest part of the Company's loan originations. As of December 31, ~~2017,~~2020, other consumer loans equaled ~~$14.8~~$32.9 million, or ~~0.3%~~0.5% of total loans outstanding. ~~Consumer equity and debt securities were pledged as collateral for a substantial part of the total of those loans.~~

~~Loans to Insiders~~

~~Refer to Note 6, “Loans and Leases” within Notes to Consolidated Financial Statements for information regarding loans to insiders.~~

~~Loan Maturities and Repricing~~

The following table shows the contractual maturity and repricing dates of the Company's loans as of December 31, 2017. The table does not include projected prepayments or scheduled principal amortization.

Amount due at December 31, 2017

Within One
Year

More than
One Year to
Three Years

More than
Three Years
to Five Years

More than
Five Years to
Fifteen Years

More than
Fifteen Years

Total after
One Year
Total
(In Thousands)
Commercial real estate $ 838,864
$ 541,051
$ 589,739
$ 201,476
$ 3,839
$ 1,336,105
$ 2,174,969
Multi-family mortgage 353,630
133,559
170,345
101,037
2,099
407,040
760,670
Construction 106,738
8,863
20,382
3,957
198
33,400
140,138
Commercial 217,858
137,103
166,433
94,136
89,474
487,146
705,004
Equipment financing 77,542
210,175
438,624
140,147
—
788,946
866,488
Condominium association 6,334
13,986
15,705
16,594
—
46,285
52,619
Residential mortgage 173,447
125,112
209,647
116,557
35,302
486,618
660,065
Home equity 220,546
1,345
5,554
45,118
83,391
135,408
355,954
Other consumer 7,126
2,055
84
—
5,507
7,646
14,772
Total $ 2,002,085
$ 1,173,249
$ 1,616,513
$ 719,022
$ 219,810
$ 3,728,594
$ 5,730,679

The following table sets forth as of December 31, 2017 the dollar amount of loans contractually due or scheduled to reprice after one year and whether such loans have fixed interest rates or adjustable interest rates.

Due after One Year
Fixed Adjustable Total
(In Thousands)
Originated:
Commercial real estate $ 435,781
$ 825,762
$ 1,261,543
Multi-family mortgage 144,448
241,305
385,753
Construction 2,405
30,994
33,399
Commercial 277,409
203,728
481,137
Equipment financing 595,974
188,958
784,932
Condominium association 25,878
20,407
46,285
Residential mortgage 48,218
407,016
455,234
Home equity 26,479
67,524
94,003
Other consumer 2,172
5,475
7,647
Total originated 1,558,764
1,991,169
3,549,933
Acquired:
Commercial real estate 9,614
64,949
74,563
Multi-family mortgage 10,822
10,465
21,287
Commercial 317
5,691
6,008
Equipment financing 4,015
—
4,015
Residential mortgage 19,490
11,893
31,383
Home equity 23,398
18,007
41,405
Total acquired 67,656
111,005
178,661
Total loans $ 1,626,420
$ 2,102,174
$ 3,728,594

Asset Quality

Criticized and Classified Assets

The Company's management rates certain loans and leases as "other assets especially ~~mentioned~~mentioned" ("OAEM")", "substandard" or "doubtful" based on criteria established under banking regulations. ~~Refer to Note 7, "Allowance for Loan and Lease Losses," to the consolidated financial statements for more information on the Company's risk rating system.~~ These loans and leases are collectively referred to as "criticized" assets. Loans and leases rated OAEM have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects of the loan or lease at some future date. Loans and leases rated as substandard are inadequately protected by the payment capacity of the obligor or of the collateral pledged, if any. Substandard loans and leases have a well-defined weakness or weaknesses that jeopardize the liquidation of debt and are characterized by the distinct possibility that the Company will sustain some loss if existing deficiencies are not corrected. Loans and leases rated as doubtful have well-defined weaknesses that jeopardize the orderly liquidation of debt and partial loss of principal is likely. As of December 31, ~~2017,~~2020, the Company had ~~$68.2~~$72.8 million of total ~~assets, including acquired~~ assets that were designated as criticized. This compares to ~~$70.4~~$67.2 million of assets designated as criticized as of December 31, ~~2016.~~2019. The increase of $5.6 million in criticized assets was primarily due to two construction relationships totaling $7.6 million, six commercial real estate relationships totaling $7.5 million, and various equipment financing relationships totaling $7.0 million which become criticized during the year ending December 31, 2020, partially offset by the three commercial real estate relationships totaling $16.7 million paid off and charged off during the year ending December 31, 2020.

Nonperforming Assets

"Nonperforming assets" consist of ~~nonperforming~~nonaccrual loans and leases, other real estate owned ("OREO") and other repossessed assets. Under certain circumstances, the Company may restructure the terms of a loan or lease as a concession to a borrower, except for acquired loans and leases which are individually evaluated against expected performance on the date of acquisition. These restructured loans and leases are generally considered "nonperforming loans and leases" until a history of collection of at least six months on the restructured terms of the loan or lease has been established. OREO consists of real estate acquired through foreclosure proceedings and real estate acquired through acceptance of a deed in lieu of foreclosure. Other repossessed assets consist of assets that have been acquired through foreclosure that are not real estate and are included in other assets on the Company's consolidated balance sheets.

Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's judgment, reasonable doubt exists as to the full timely collection of interest. Prior to the adoption of ASC 326, loans categorized as ASC 310-30 (purchased loans with deteriorating credit quality) accrued regardless of past due status. Exceptions may be made if the loan has matured and is in the process of renewal or is well-secured and in the process of collection. When a loan is placed on non-accrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current interest income. Interest payments on non-accrual loans are generally applied to principal. If collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six months of performance has been achieved. The adoption of ASC 326 required purchase credit-impaired loans to be classified as non-accruing based on performance.

In cases where a borrower experiences financial difficulties and the Company makes or reasonably expects to make certain concessionary modifications to contractual terms, the loan is classified as a troubled debt restructured loan. In determining whether a debtor is experiencing financial difficulties, the Company considers, among other factors, if the debtor is in payment default or is likely to be in payment default in the foreseeable future without the modification, the debtor declared or is in the process of declaring bankruptcy, there is substantial doubt that the debtor will continue as a going concern, the debtor's entity-specific projected cash flows will not be sufficient to service its debt, or the debtor cannot obtain funds from sources other than the existing creditors at market terms for debt with similar risk characteristics.

~~Nonperforming assets are composed~~

Table of ~~nonaccrual loans and leases, OREO and other repossessed assets.~~ Contents

As of December 31, ~~2017,~~2020, the Company had nonperforming assets of ~~$31.7~~$45.0 million, representing ~~0.47%~~0.50% of total assets, compared to nonperforming assets of ~~$41.5~~$22.1 million, or ~~0.64%~~0.28% of total assets as of December 31, ~~2016.~~2019. The ~~decrease in nonperforming assets~~increase was primarily ~~due~~driven by the adoption of ASC 326 which required purchase credit-impaired loans to be classified as non-accruing based on performance. There were $9.0 million loans previously categorized as performing assets that are now classified as non-accruing. This amount includes one commercial relationship of $4.3 million and one construction relationship of $3.9 million. In addition, there was one commercial relationship classified as OREO in the ~~partial charge-off~~amount of ~~loans secured by taxi medallions~~$5.4 million during the year ending December 31, ~~2017.~~2020.

The Company evaluates the underlying collateral of each ~~nonperforming~~nonaccrual loan and lease and continues to pursue the collection of interest and principal. Management believes that the current level of nonperforming assets remains manageable relative to the size of the Company's loan and lease portfolio. If economic conditions were to worsen or if the marketplace were to experience prolonged economic stress, management believes it is likely that the level of nonperforming assets would increase, as would the level of charged-off loans.

Past Due and Accruing

~~Accrual~~From March 1, 2020 through the earlier of ~~interest~~January 1, 2022 or 60 days after the termination date of the national emergency declared by the President on ~~loans generally is discontinued when contractual payment~~March 13, 2020 concerning the COVID-19 outbreak (the “national emergency”), a financial institution may elect to suspend the requirements under U.S. GAAP for loan modifications related to the COVID-19 pandemic that would otherwise be categorized as a troubled debt restructured, including impairment accounting. This troubled debt restructuring relief applies for the term of ~~principal or interest becomes~~the loan modification that occurs during the applicable period for a loan that was not more than 30 days past due ~~90 days or, if in management's judgment, reasonable doubt exists~~ as ~~to the full timely collection~~ of interest. Exceptions may be made if the loan has matured and is in the process of renewal or is well-secured and in the process of collection. When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current interest income. Interest payments on nonaccrual loans are generally applied to principal. If collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six consecutive months of performance has been achieved.December 31, 2019.

As of December 31, ~~2017,~~2020, the Company had loans and leases greater than 90 days past due and accruing of ~~$3.0~~$12.0 million, or ~~0.05%~~0.16% of total loans and leases, compared to ~~$7.1~~$10.1 million, or ~~0.13%~~0.15% of total loans and leases, as of December 31, ~~2016,~~2019, representing an ~~decrease~~increase of ~~$4.1~~$1.9 million. The increase in 90 days past due and accruing loans was primarily due to three commercial relationships totaling $3.5 million, one construction relationship of $3.8 million and one commercial real estate relationship of $4.7 million 90 days past due and accruing, partially offset by $9.0 million of past due and accruing acquired loans previously accounted for under ASC 310-30, which are now disclosed as being on non-accrual status.

Table of Contents

The following table sets forth information regarding nonperforming assets for the periods indicated:

At December 31,
2017 2016 2015 2014 2013
(Dollars in Thousands)
Nonperforming loans and leases:
Nonaccrual loans and leases:
Commercial real estate $ 3,313
$ 5,340
$ 5,482
$ 1,009
$ 1,098
Multi-family mortgage 608
1,404
291
—
—
Construction 860
—
—
—
—
Total commercial real estate loans 4,781
6,744
5,773
1,009
1,098

Commercial 11,619
22,974
6,264
5,196
6,148
Equipment financing 8,106
6,758
2,610
3,223
4,115
Condominium association —
—
—
—
1
Total commercial loans and leases 19,725
29,732
8,874
8,419
10,264

Residential mortgage 1,979
2,501
2,225
1,682
2,875
Home equity 744
951
1,757
1,918
1,987
Other consumer 43
149
704
686
277
Total consumer loans 2,766
3,601
4,686
4,286
5,139

Total nonaccrual loans and leases 27,272
40,077
19,333
13,714
16,501

Other real estate owned 3,235
618
729
953
577
Other repossessed assets 1,184
781
614
503
1,001
Total nonperforming assets $ 31,691
$ 41,476
$ 20,676
$ 15,170
$ 18,079

Loans and leases past due greater than 90 days and accruing $ 3,020
$ 7,077
$ 8,690
$ 6,008
$ 10,913

Total nonperforming loans and leases as a percentage of total loans and leases 0.48 % 0.74 % 0.39 % 0.28 % 0.38 %
Total nonperforming assets as a percentage of total assets 0.47 % 0.64 % 0.34 % 0.26 % 0.34 %


	At December 31,
	2020			2019			2018			2017			2016
	(Dollars in Thousands)
Nonperforming loans and leases:
Nonaccrual loans and leases:
Commercial real estate	$	3,300		$	2,845		$	3,928		$	3,313		$	5,340
Multi-family mortgage	—			84			330			608			1,404
Construction	3,853			—			396			860			—
Total commercial real estate loans	7,153			2,929			4,654			4,781			6,744

Commercial	7,702			4,909			6,621			11,619			22,974
Equipment financing	16,757			9,822			9,500			8,106			6,758
Condominium association	112			151			265			—			—
Total commercial loans and leases	24,571			14,882			16,386			19,725			29,732

Residential mortgage	5,587			753			2,132			1,979			2,501
Home equity	1,136			896			908			744			951
Other consumer	1			1			17			43			149
Total consumer loans	6,724			1,650			3,057			2,766			3,601

Total nonaccrual loans and leases	38,448			19,461			24,097			27,272			40,077

Other real estate owned	5,415			—			3,054			3,235			618
Other repossessed assets	1,100			2,631			965			1,184			781
Total nonperforming assets	$	44,963		$	22,092		$	28,116		$	31,691		$	41,476

Loans and leases past due greater than 90 days and accruing	$	11,975		$	10,109		$	13,482		$	3,020		$	7,077
Total delinquent loans and leases 61-90 days past due	16,129			4,978			3,308			7,376			7,350
Restructured loans and leases not included in nonperforming assets	11,483			17,076			12,257			16,241			13,883

Total nonaccrual loans and leases as a percentage of total loans and leases	0.53		%	0.29		%	0.38		%	0.48		%	0.74		%
Total nonperforming assets as a percentage of total assets	0.50		%	0.28		%	0.38		%	0.47		%	0.64		%
Total delinquent loans and leases 61-90 days past due as a percentage of total loans and leases	0.22		%	0.07		%	0.05		%	0.13		%	0.14		%

Troubled Debt Restructured Loans and Leases

~~As of~~Total TDR loans decreased by $4.2 million to $19.0 million at December 31, ~~2017, restructured loans included $5.0~~2020 from $23.2 million of commercial real estate loans, $0.6 million of multi-family mortgage loans, $13.9 million of commercial loans, $4.0 million of equipment financing loans and leases, $1.1 million of residential mortgage loans and $1.4 million of home equity loans. As ofat December 31, ~~2016, restructured loans included $4.9 million~~2019. The decrease was driven primarily by the payments and payoffs of the commercial ~~real estate loans, $2.0 million~~and construction TDRs during the year ending December 31, 2020.

Table of multi-family mortgage loans, $13.7 million of commercial loans, $2.1 million of equipment financing loans and leases, $1.3 million of residential mortgage loans and $1.8 million of home equity loans. A restructured loan is a loan for which the maturity date was extended, the principal was reduced, and/or the interest rate was modified to reduce the required monthly payment to a more manageable amount for the borrower.Contents

The following table sets forth information regarding troubled debt restructured loans and leases at the dates indicated:


	At December 31, 2020		At December 31, 2019
	(Dollars in Thousands)
Troubled debt restructurings:

Commercial real estate mortgage	$	1,599	$	1,674
Multi-family mortgage	—		85
Construction	—		2,942

Commercial	6,515		8,995
Equipment financing	6,699		5,555

Residential mortgage	2,054		2,067
Home equity	2,092		1,862
Total troubled debt restructurings	$	18,959	$	23,180

At December 31, 2017 At December 31, 2016
(Dollars in Thousands)
Troubled debt restructurings:

On accrual $ 16,241
$ 13,883
On nonaccrual 9,770
11,919
Total troubled debt restructurings $ 26,011
$ 25,802
The following table sets forth information regarding troubled debt restructured loans and leases at the dates indicated:


	At December 31, 2020		At December 31, 2019
	(Dollars in Thousands)
Troubled debt restructurings:
On accrual	$	11,483	$	17,076
On nonaccrual	7,476		6,104
Total troubled debt restructurings	$	18,959	$	23,180

Changes in troubled debt restructured loans and leases were as follows for the periods indicated:


	Year ended December 31,
	2020		2019
	(Dollars in Thousands)
Balance at beginning of period	$	23,180	$	20,941
Additions	2,940		16,484
Net charge-offs	(830)		(1,964)
Repayments	(6,331)		(12,281)

Balance at end of period	$	18,959	$	23,180

Year ended December 31,
2017 2016
(Dollars in Thousands)
Balance at beginning of period $ 25,802
$ 22,918
Additions 7,001
12,027
Net charge-offs (4,723 ) (4,335 )
Repayments (1,147 ) (4,808 )
Other reductions ⁽¹⁾
(922 ) —
Balance at end of period $ 26,011
$ 25,802

^{__________________________________________________________________________________}

^{(1) IncludesThe Coronavirus Aid, Relief and Economic Security ("CARES") Act and regulatory guidance issued by the Federal banking agencies provides that certain short-term loan modifications to borrowers experiencing financial distress as a result of the economic impacts created by the COVID-19 pandemic are not required to be treated as TDRs under GAAP. As such, the Company suspended TDR accounting for COVID-19 pandemic related loan modifications meeting the loan modification criteria set forth under the CARES Act or as specified in the regulatory guidance. Further, loans granted payment deferrals related to the COVID-19 pandemic are not required to be reported as past due or placed on non-accrual status (provided the loans were not past due or on non-accrual status prior to the deferral). As of December 31, 2020, the Company granted 4,989 short-term deferments on loan and lease balances totaling $1.1 billion. Of these modifications, 4,691 loans and leases that were removed from TDRwith total balances of $1.0 billion have returned to payment status} and 298 loans and leases with total balances of $90.4 million remain on the deferral status, which represents 1.2% of total loan and leases balances.

Allowances for Credit Losses

~~Allowance for Loan and Lease Losses~~

The allowance for ~~loan and lease~~credit losses consists of general and specific allowances and reflects management's estimate of ~~probable~~expected loan and lease losses ~~inherent in~~over the life of loan ~~portfolio at the balance sheet date.~~or lease. Management uses a consistent and systematic process and methodology to evaluate the adequacy of the allowance for ~~loan and lease~~credit losses on a quarterly basis. The allowance is calculated by loan type: commercial real estate loans, commercial loans and leases, and consumer loans, each category of which is further segregated. A formula-based credit evaluation approach is applied to each group that is evaluated collectively, primarily by loss factors, which includes estimates of incurred losses over an estimated loss emergence period ("LEP"), assigned to each risk rating by type, coupled with an analysis of certain loans individually evaluated for impairment. Management continuously evaluates and challenges inputs and assumptions in the allowance for ~~loan and lease loss.~~credit losses.

~~The process to determine the allowance for loan and lease losses requires management to exercise considerable judgment regarding the risk characteristics~~

Table of ~~the loan portfolios and the effect of relevant internal and external factors.~~ Contents

While management evaluates currently available information in establishing the allowance for ~~loan and lease~~credit losses, future adjustments to the allowance for loan and lease losses may be necessary if conditions differ substantially from the assumptions used in making the evaluations. Management performs a comprehensive review of the allowance for ~~loan and lease~~credit losses on a quarterly basis. In addition, various regulatory agencies, as an integral part of their examination process, periodically review a financial institution's allowance for ~~loan and lease~~credit losses and carrying amounts of other real estate owned. Such agencies may require the financial institution to recognize additions or reductions to the allowance based on their judgments about information available to them at the time of their examination. See Note 1, "Basis of Presentation," and Note 7, "Allowance for Loan and Lease Losses," to the consolidated financial statements for descriptions of how management determines the balance of the allowance for loan and lease losses for each portfolio and class of loans.

~~During the third quarter of 2015, the Company enhanced and refined its general~~The Company’s allowance methodology ~~to provide further~~provides a quantification of probable losses in the portfolio. Under the ~~enhanced~~current methodology, management ~~combined~~estimates losses over the ~~historical loss histories~~life of the ~~Banks~~loan using reasonable and supportable forecasts. Forecasts, loan data, and model documentation are extensively analyzed and reviewed throughout the quarter to ~~generate~~ensure estimated losses are accurate at quarter end. Qualitative adjustments are applied when model output does not align with management expectations. These adjustments are thoroughly reviewed and documented to provide clarity and a ~~single set of ratios. Management believes it is appropriate to aggregate~~reasonable basis for any deviations from the ratios as the Banks share common environmental factors, operate in similar geographic markets, and utilize common underwriting standards in accordance with the Company's Credit Policy. In prior periods, a historical loss history applicable to each Bank was used.

Management employed a similar analysis for the consolidation of the qualitative factors as it did for the quantitative factors. Again, management believes the combination of the existing nine qualitative factors used at each of the Banks into a single group of nine factors used across the Company is appropriate based on the commonality of environmental factors, markets and underwriting standards among the Banks. In prior periods each of the Banks utilized a set of qualitative factors applicable to each Bank.

~~As of~~model. For December 31, ~~2017,~~2020, qualitative adjustments were applied to the ~~Company had a portfolio of approximately $19.7 million in loans secured by taxi medallions issued by the cities of Boston~~CRE, C&I, and Cambridge. As of December 31, 2016, this portfolio was approximately $31.1 million. Application-based mobile ride services, such as Uber and Lyft, have generated increased competition in the transportation sector,Retail portfolios resulting in a ~~reduction~~net addition in taxi utilization and, as a result, a reduction in the collateral value and credit quality of taxi medallion loans. This has increased the likelihood that loans secured by taxi medallions may default, or that the borrowers may be unabletotal reserves compared to repay these loans according to terms, resulting in an increase in past due loans, troubled debt restructurings, and charge-offs. Therefore, beginning with the three months ended September 30, 2015, the Company’s allowance calculation included a further segmentation of the commercial loans and leases to reflect the increased risk in the Company’s taxi medallion portfolio. This allowance calculation segmentation represents management’s estimations of the special risks associated with the taxi portfolio.

Based on the refinements to the Company’s allowance methodology discussed above, management determined that the potential risks anticipated by the unallocated allowance are now incorporated into the qualitative and quantitative components, making the unallocated allowance unnecessary. In prior years, the unallocated allowance was used to recognize the estimated risk associated with the allocated general and specific allowances. It incorporated management’s evaluation of existing conditions that were not included in the allocated allowance determinations and provided for losses that arise outside of the ordinary course of business.modeled calculations.

The following tables present the changes in the allowance for ~~loan~~loans and lease losses by portfolio category for the years ended December 31, 2020, 2019, 2018, 2017, ~~2016, 2015, 2014,~~ and ~~2013,~~2016, respectively.


	Year Ended December 31, 2020
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2019	$	30,285		$	24,826		$	5,971		$	61,082
Adoption of ASU 2016-13 (CECL)	11,694			(2,672)			(2,390)			6,632
Balance at beginning of period, adjusted	41,979			22,154			3,581			67,714
Charge-offs	(3,514)			(11,113)			(36)			(14,663)
Recoveries	94			1,407			201			1,702
Provision for loan and lease losses	41,573			17,050			1,003			59,626
Balance at December 31, 2020	$	80,132		$	29,498		$	4,749		$	114,379

Total loans and leases	$	3,823,826		$	2,274,899		$	1,170,828		$	7,269,553
Total allowance for loan and lease losses as a percentage of total loans and leases	2.10		%	1.30		%	0.41		%	1.57		%


	Year Ended December 31, 2019
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2018	$	28,187		$	25,283		$	5,222		$	58,692
Charge-offs	—			(8,911)			(127)			(9,038)
Recoveries	—			1,688			179			1,867
Provision for loan and lease losses	2,098			6,766			697			9,561
Balance at December 31, 2019	$	30,285		$	24,826		$	5,971		$	61,082

Total loans and leases	$	3,669,222		$	1,838,748		$	1,229,846		$	6,737,816
Total allowance for loan and lease losses as a percentage of total loans and leases	0.83		%	1.35		%	0.49		%	0.91		%

Table of Contents


															Year Ended December 31, 2018
	Year Ended December 31, 2017														Commercial Real Estate			Commercial			Consumer			Total
	Commercial Real Estate			Commercial			Consumer				Total				(In Thousands)
	(In Thousands)
Balance at December 31, 2016	$	27,645		$	20,906		$	5,115			$	53,666
Balance at December 31, 2017														Balance at December 31, 2017	$	27,112		$	26,333		$	5,147		$	58,592
Charge-offs	(494		)	(14,914		)	(403		)		(15,811		)	Charge-offs	(103)			(6,585)			(540)			(7,228)
Recoveries	476			1,158			319				1,953			Recoveries	—			2,287			290			2,577
(Credit) provision for loan and lease losses	(515		)	19,183			116			��	18,784
Balance at December 31, 2017	$	27,112		$	26,333		$	5,147			$	58,592
Provision for loan and lease losses														Provision for loan and lease losses	1,178			3,248			325			4,751
Balance at December 31, 2018														Balance at December 31, 2018	$	28,187		$	25,283		$	5,222		$	58,692

Total loans and leases	$	3,075,777		$	1,624,111		$	1,030,791			$	5,730,679		Total loans and leases	$	3,351,736		$	1,768,958		$	1,182,822		$	6,303,516
Total allowance for loan and lease losses as a percentage of total loans and leases	0.88		%	1.62		%	0.50		%		1.02		%
Allowance for loan and lease losses as a percentage of total loans and leases														Allowance for loan and lease losses as a percentage of total loans and leases	0.84		%	1.43		%	0.44		%	0.93		%


	Year Ended December 31, 2017
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2016	$	27,645		$	20,906		$	5,115		$	53,666
Charge-offs	(494)			(14,914)			(403)			(15,811)
Recoveries	476			1,158			319			1,953
Provision (credit) for loan and lease losses	(515)			19,183			116			18,784
Balance at December 31, 2017	$	27,112		$	26,333		$	5,147		$	58,592

Total loans and leases	$	3,075,777		$	1,624,111		$	1,030,791		$	5,730,679
Allowance for loan and lease losses as a percentage of total loans and leases	0.88		%	1.62		%	0.50		%	1.02		%


	Year Ended December 31, 2016
	Commercial Real Estate			Commercial			Consumer			Total
	(In Thousands)
Balance at December 31, 2015	$	30,151		$	22,018		$	4,570		$	56,739
Charge-offs	(2,169)			(10,516)			(1,982)			(14,667)
Recoveries	—			642			750			1,392
Provision (credit) for loan and lease losses	(337)			8,762			1,777			10,202
Balance at December 31, 2016	$	27,645		$	20,906		$	5,115		$	53,666

Total loans and leases	$	2,918,567		$	1,495,408		$	984,889		$	5,398,864
Allowance for loan and lease losses as a percentage of total loans and leases	0.95		%	1.40		%	0.52		%	0.99		%

Year Ended December 31, 2016

Commercial
Real Estate
Commercial Consumer Unallocated Total
(In Thousands)
Balance at December 31, 2015 $ 30,151
$ 22,018
$ 4,570
$ —
$ 56,739
Charge-offs (2,169 ) (10,516 ) (1,982 ) —
(14,667 )
Recoveries —
642
750
—
1,392
(Credit) provision for loan and lease losses (337 ) 8,762
1,777
—
10,202
Balance at December 31, 2016 $ 27,645
$ 20,906
$ 5,115
$ —
$ 53,666

Total loans and leases $ 2,918,567
$ 1,495,408
$ 984,889
N/A
$ 5,398,864
Total allowance for loan and lease losses as a percentage of total loans and leases 0.95 % 1.40 % 0.52 % N/A
0.99 %

Year Ended December 31, 2015

Commercial
Real Estate
Commercial Consumer Unallocated Total
(In Thousands)
Balance at December 31, 2014 $ 29,594
$ 15,957
$ 5,690
$ 2,418
$ 53,659
Charge-offs (550 ) (3,634 ) (2,370 ) —
(6,554 )
Recoveries —
667
1,544
—
2,211
Provision (credit) for loan and lease losses 1,107
9,028
(294 ) (2,418 ) 7,423
Balance at December 31, 2015 $ 30,151
$ 22,018
$ 4,570
$ —
$ 56,739

Total loans and leases $ 2,664,394
$ 1,374,296
$ 956,850
N/A
$ 4,995,540
Allowance for loan and lease losses as a percentage of total loans and leases 1.13 % 1.60 % 0.48 % N/A
1.14 %

Year Ended December 31, 2014

Commercial
Real Estate
Commercial Consumer Unallocated Total
(In Thousands)
Balance at December 31, 2013 $ 23,022
$ 15,220
$ 7,299
$ 2,932
$ 48,473
Charge-offs (130 ) (2,507 ) (1,813 ) —
(4,450 )
Recoveries 4
801
592
—
1,397
Provision (credit) for loan and lease losses 6,698
2,443
(388 ) (514 ) 8,239
Balance at December 31, 2014 $ 29,594
$ 15,957
$ 5,690
$ 2,418
$ 53,659

Total loans and leases $ 2,467,801
$ 1,167,094
$ 1,187,712
N/A
$ 4,822,607
Allowance for loan and lease losses as a percentage of total loans and leases 1.20 % 1.37 % 0.48 % N/A
1.11 %

Year Ended December 31, 2013

Commercial
Real Estate
Commercial Consumer Unallocated Total
(In Thousands)
Balance at December 31, 2012 $ 20,018
$ 10,655
$ 7,849
$ 2,630
$ 41,152
Charge-offs (88 ) (2,077 ) (2,623 ) —
(4,788 )
Recoveries 13
657
764
—
1,434
Provision for loan and lease losses 3,079
5,985
1,309
302
10,675
Balance at December 31, 2013 $ 23,022
$ 15,220
$ 7,299
$ 2,932
$ 48,473

Total loans and leases $ 2,203,623
$ 965,610
$ 1,193,232
N/A
$ 4,362,465
Allowance for loan and lease losses as a percentage of total loans and leases 1.04 % 1.58 % 0.61 % N/A
1.11 %

~~The~~Beginning January 1, 2020, the Company implemented the CECL methodology to calculate the allowance for credit losses. As of January 1, 2020, the Company increased the allowance for loan and lease losses ~~was $58.6~~by $6.6 million, and increased the allowances for the unfunded commitment by $8.9 million due to CECL which requires the inclusion of the credit losses over the expected life of the loans, as well as consideration of the risks based on the current conditions and reasonable and supportable forecasts about the future.

At December 31, ~~2017,~~2020, the allowance for loan and lease losses increased to $114.4 million, or ~~1.02%~~1.57% of total loans and leases ~~outstanding.~~outstanding, as a result of the latest available forecast of the economic effects of the COVID-19 pandemic on the Company's loan and lease portfolios. This excluded PPP loans which are not subject to an allowance reserve since they are guaranteed by the SBA. This compared to an allowance for loan and lease losses of ~~$53.7~~$61.1 million, or ~~0.99%~~0.91% of total loans and leases outstanding, as of December 31, ~~2016. The increase in~~2019. Prior to January 1, 2020, the Company calculated the allowance for loan and lease losses ~~and~~using the incurred losses methodology.

Table of Contents

Net charge-offs in the ~~allowance for loan and lease losses as a percentage of total~~ loans and leases ~~from~~for year ending December 31, ~~2016 to December 31, 2017 is~~2020 and 2019 were $13.0 million and $7.2 million, respectively. The increase in the net charge-offs of $5.8 million was driven primarily ~~due to loan growth of $331.8 million during the year, offset~~ by the ~~charge-off~~charge-offs on four commercial real estate relationships of $3.6 million as well as the increase on the charge-offs on commercial loans ~~which had specific reserve during the year.~~by $1.9 million loans and equipment financing loans by $0.5 million.

Management believes that the allowance for loan and lease losses as of December 31, ~~2017~~2020 is appropriate based on the facts and circumstances discussed further below.

~~Commercial Real Estate Loans~~

The allowance for commercial real estate loan losses was $27.1 million, or 0.88% of total commercial real estate loans outstanding, as of December 31, 2017. This compared to an allowance for commercial real estate loan losses of $27.6 million, or 0.95% of total commercial real estate loans outstanding, as of December 31, 2016. Specific reserves on commercial real estate loans were zero and $28.0 thousand as of December 31, 2017 and December 31, 2016, respectively. The $0.5 million decrease in the allowance for commercial real estate loan losses during 2017 was primarily driven by the decrease in specific reserve on commercial real estate loans which had a charge-off during the year and the decrease in historical loss factors, partially offset by the originated loan growth of $200.0 million, or 7.3% from December 31, 2016.

The ratio of total criticized and classified commercial real estate loans to total commercial real estate loans increased to 0.91% as of December 31, 2017 from 0.74% as of December 31, 2016. The ratio of originated commercial real estate loans on nonaccrual to total originated commercial real estate loans decreased to 0.16% as of December 31, 2017 from 0.23% as of December 31, 2016. The increase in total criticized and classified commercial real estate loans had a minimal impact on the allowance for commercial real estate loan losses as these loans are adequately collateralized over the loan carrying balance.

Net charge-offs decreased $2.2 million to $18.0 thousand, or 0.001% of average commercial real estate loans, for the year ended December 31, 2017, compared with net charge-offs of $2.2 million, or 0.08% of average commercial real estate loans, for the year ended December 31, 2016. The decrease in net charge-offs was primarily due to the 2016 charge-off of a commercial real estate relationship which had a specific reserve in prior period. Provisions for commercial real estate loans recorded in these periods more than adequately covered charge-offs during those periods. See the ~~"Results of Operations—Provision for Credit Losses"~~ ~~section below for additional information.~~

~~Commercial Loans and Leases~~

The allowance for commercial loan and lease losses was $26.3 million, or 1.62% of total commercial loans and leases outstanding, as of December 31, 2017, compared to $20.9 million, or 1.40% of total commercial loans and leases outstanding, as of December 31, 2016. Specific reserves on commercial loans and leases increased from $0.1 million as of December 31, 2016 to $3.1 million as of December 31, 2017. The $5.4 million increase in the allowance for commercial loans and lease losses during 2017 was primarily driven by the increase in specific reserve on taxi medallion loans, the increase in historical loss factors, along with the originated loan growth of $136.3 million, or 9.2% from December 31, 2016.

The ratio of total criticized and classified commercial loans and leases to total commercial loans and leases decreased to 2.47% as of December 31, 2017, from 3.27% as of December 31, 2016. The ratio of originated commercial loans and leases on nonaccrual to total originated commercial loans and leases decreased to 1.15% as of December 31, 2017 from 1.85% as of December 31, 2016. The decreases in the ratio of total criticized and classified commercial loans and leases to total commercial

loans and leases and the ratio of originated commercial loans and leases on nonaccrual to total originated commercial loans and leases was primarily due to the partial charge-offs of loans secured by taxi medallions in 2017.

Net charge-offs increased $3.9 million to $13.8 million, or 0.88% of average commercial loans and leases, for the year ended December 31, 2017, compared with net charge-offs of $9.9 million, or 0.69% of average commercial loans and leases, for the year ended December 31, 2016. The increase in net charge-offs was primarily due to the charge-offs of the taxi medallion and commercial loans which had a specific reserve in prior period. Provisions for commercial loans recorded in these periods more than adequately covered charge-offs during those periods. See the ~~"Results of Operations—Provision for Credit Losses"~~ ~~section below for additional information.~~

~~Consumer Loans~~

The allowance for consumer loan losses, including residential loans and home equity loans and lines of credit, was $5.1 million, or 0.50% of total consumer loans outstanding, as of December 31, 2017, compared to $5.1 million, or 0.52% of consumer loans outstanding, as of December 31, 2016. Specific reserves on consumer loans were $22.0 thousand and $27.0 thousand as of December 31, 2017 and December 31, 2016, respectively. The allowance for consumer loans remained steady during 2017 despite of the originated loan growth of $70.8 million, or 8.2%, from December 31, 2016.

The ratio of originated consumer loans on nonaccrual to total originated consumer loans increased to 0.23% as of December 31, 2017 from 0.32% as of December 31, 2016. The risk of loss on a home equity loan is higher since the property securing the loan has often been previously pledged as collateral for a first mortgage loan. The Company gathers and analyzes delinquency data, to the extent that data are available on these first liens, for purposes of assessing the collectability of the second liens held by the Company even if these home equity loans are not delinquent. This data are further analyzed for performance differences between amortizing and non-amortizing home equity loans, the percentage borrowed to total loan commitment and by the amount of payments made by the borrowers. The loss exposure is not considered to be high due to the combination of current property values, the historically low loan-to-value ratios, the low level of losses experienced in the past few years and the low level of loan delinquencies as of December 31, 2017. If the local economy weakens, however, a rise in losses in those loan classes could occur. Historically, losses in these classes have been low.

Net charge-offs in the consumer loan portfolio totaled $0.1 million, or 0.01% of average consumer loans, for the year ended December 31, 2017, compared with net charge-offs of $1.2 million, or 0.13% of average consumer loans, for the year ended December 31, 2016. Provisions for consumer loans recorded in these periods more than adequately covered charge-offs during those periods. See the ~~"Results of Operations—Provision for Credit Losses"~~ ~~section below for additional information.~~

The following ~~table sets~~tables set forth the Company's percent of allowance for loan and lease losses to the total allowance for loan and lease losses and the percent of loans to total loans for each of the categories listed at the dates indicated.


	At December 31,
	2020						2019						2018
	Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans
	(Dollars in Thousands)
Commercial real estate	$	46,357	40.6	%	35.4	%	$	21,519	35.3	%	37.0	%	$	20,779	35.4	%	37.0	%
Multi-family mortgage	22,559		19.7	%	13.9	%	6,436		10.5	%	13.8	%	5,915		10.1	%	13.4	%
Construction	11,216		9.8	%	3.2	%	2,330		3.8	%	3.7	%	1,494		2.5	%	2.7	%
Total commercial real estate loans	80,132		70.1	%	52.5	%	30,285		49.6	%	54.5	%	28,188		48.0	%	53.1	%
Commercial	8,089		7.1	%	15.6	%	12,849		21.0	%	10.8	%	14,047		23.9	%	11.7	%
Equipment financing	21,292		18.6	%	15.0	%	11,595		19.0	%	15.6	%	10,888		18.6	%	15.6	%
Condominium association	117		0.1	%	0.7	%	382		0.6	%	0.8	%	347		0.6	%	0.8	%
Total commercial loans and leases	29,498		25.8	%	31.3	%	24,826		40.6	%	27.2	%	25,282		43.1	%	28.1	%
Residential mortgage	1,967		1.7	%	10.9	%	3,717		6.1	%	12.1	%	3,076		5.2	%	12.4	%
Home equity	2,504		2.2	%	4.8	%	2,132		3.5	%	5.6	%	2,047		3.5	%	6.0	%
Other consumer	278		0.2	%	0.5	%	122		0.2	%	0.6	%	99		0.2	%	0.4	%
Total consumer loans	4,749		4.1	%	16.2	%	5,971		9.8	%	18.3	%	5,222		8.9	%	18.8	%

Total	$	114,379	100.0	%	100.0	%	$	61,082	100.0	%	100.0	%	$	58,692	100.0	%	100.0	%

Table of Contents

At December 31,
2017 2016 2015
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
(Dollars in Thousands)
Commercial real estate $ 20,089
34.3 % 38.0 % $ 19,354
36.1 % 38.1 % $ 21,100
37.3 % 37.5 %
Multi-family mortgage 5,667
9.7 % 13.3 % 5,528
10.3 % 13.5 % 6,376
11.2 % 13.2 %
Construction 1,356
2.3 % 2.4 % 2,763
5.1 % 2.5 % 2,675
4.7 % 2.6 %
Total commercial real estate loans 27,112
46.3 % 53.7 % 27,645
51.5 % 54.1 % 30,151
53.2 % 53.3 %
Commercial 15,366
26.2 % 12.3 % 10,096
18.8 % 11.8 % 12,745
22.5 % 11.9 %
Equipment financing 10,586
18.1 % 15.1 % 10,345
19.3 % 14.8 % 8,809
15.5 % 14.5 %
Condominium association 381
0.7 % 0.9 % 465
0.9 % 1.1 % 464
0.8 % 1.2 %
Total commercial loans and leases 26,333
45.0 % 28.3 % 20,906
39.0 % 27.7 % 22,018
38.8 % 27.6 %
Residential mortgage 2,743
4.7 % 11.5 % 2,587
4.8 % 11.6 % 2,069
3.6 % 12.3 %
Home equity 2,219
3.8 % 6.2 % 2,356
4.4 % 6.3 % 2,149
3.8 % 6.3 %
Other consumer 185
0.2 % 0.3 % 172
0.3 % 0.3 % 352
0.6 % 0.5 %
Total consumer loans 5,147
8.7 % 18.0 % 5,115
9.5 % 18.2 % 4,570
8.0 % 19.1 %
Total $ 58,592
100.0 % 100.0 % $ 53,666
100.0 % 100.0 % $ 56,739
100.0 % 100.0 %


	At December 31,
	2017						2016
	Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans		Amount		Percent of Allowance to Total Allowance		Percent of Loans in Each Category to Total Loans
	(Dollars in Thousands)
Commercial real estate	$	20,089	34.3	%	38.0	%	$	19,354	36.1	%	38.1	%
Multi-family mortgage	5,667		9.7	%	13.3	%	5,528		10.3	%	13.5	%
Construction	1,356		2.3	%	2.4	%	2,763		5.1	%	2.5	%
Total commercial real estate loans	27,112		46.3	%	53.7	%	27,645		51.5	%	54.1	%
Commercial	15,366		26.2	%	12.3	%	10,096		18.8	%	11.8	%
Equipment financing	10,586		18.1	%	15.1	%	10,345		19.3	%	14.8	%
Condominium association	381		0.7	%	0.9	%	465		0.9	%	1.1	%
Total commercial loans and leases	26,333		45.0	%	28.3	%	20,906		39.0	%	27.7	%
Residential mortgage	2,743		4.7	%	11.5	%	2,587		4.8	%	11.6	%
Home equity	2,219		3.8	%	6.2	%	2,356		4.4	%	6.3	%
Other consumer	185		0.2	%	0.3	%	172		0.3	%	0.3	%
Total consumer loans	5,147		8.7	%	18.0	%	5,115		9.5	%	18.2	%

Total	$	58,592	100.0	%	100.0	%	$	53,666	100.0	%	100.0	%

The following table sets forth the Company's percent of allowance for loan and lease losses to the total allowance for loan and lease losses and the percent of loans to total loans for each of the categories listed at the dates indicated.

At December 31,
2014 2013
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
Amount
Percent of
Allowance
to Total
Allowance

Percent of
Loans
in Each
Category to
Total
Loans
(Dollars in Thousands)
Commercial real estate $ 20,858
38.9 % 34.8 % $ 14,883
30.7 % 33.5 %
Multi-family mortgage 5,057
9.4 % 13.2 % 4,890
10.1 % 14.4 %
Construction 3,679
6.9 % 3.1 % 3,249
6.7 % 2.6 %
Total commercial real estate loans 29,594
55.2 % 51.1 % 23,022
47.5 % 50.5 %
Commercial 7,463
13.9 % 10.7 % 6,724
13.9 % 9.3 %
Equipment financing 8,112
15.1 % 12.5 % 8,161
16.8 % 11.8 %
Condominium association 382
0.7 % 1.1 % 335
0.7 % 1.0 %
Total commercial loans and leases 15,957
29.7 % 24.3 % 15,220
31.4 % 22.1 %
Residential mortgage 1,392
2.6 % 11.9 % 1,431
3.0 % 12.1 %
Home equity 1,846
3.5 % 5.9 % 1,324
2.7 % 5.9 %
Other consumer 2,452
4.5 % 6.8 % 4,544
9.4 % 9.4 %
Total consumer loans 5,690
10.6 % 24.6 % 7,299
15.1 % 27.4 %
Unallocated 2,418
4.5 % — % 2,932
6.0 % — %
Total $ 53,659
100.0 % 100.0 % $ 48,473
100.0 % 100.0 %

~~Liability for Unfunded Credit Commitments~~

The liability for unfunded credit commitments, which is included in other liabilities, was $1.7 million, and $1.5 million, as of December 31, 2017, and 2016, respectively. The changes in the liability for unfunded credit commitments reflect changes in the estimate of loss exposure associated with certain credit unfunded credit commitments.

~~See the subsections~~ ~~"Comparison of Years Ended December 31, 2017 and December 31, 2016—Provision for Credit Losses"~~ ~~and "Comparison of Years Ended December 31, 2016 and December 31, 2015—Provision for Credit Losses"~~ appearing elsewhere in this report for a discussion of the provision for loan and lease losses and loan and lease charge-offs recognized in the Company's consolidated financial statements during the past three years.

Investment Securities and Restricted Equity Securities

The investment portfolio exists primarily for liquidity purposes, and secondarily as sources of interest and dividend income, interest-rate risk management and tax planning as a counterbalance to loan and deposit flows. Investment securities are utilized as part of the Company's asset/liability management and may be sold in response to, or in anticipation of, factors such as changes in market conditions and interest rates, security prepayment rates, deposit outflows, liquidity concentrations and regulatory capital requirements.

The investment policy of the Company, which is reviewed and approved by the Board of Directors on an annual basis, specifies the types of investments that are acceptable, required investment ratings by at least one nationally recognized rating agency, concentration limits and duration guidelines. Compliance with the investment policy is monitored on a regular basis. In general, the Company seeks to maintain a high degree of liquidity and targets cash, cash equivalents and investment securities available-for-sale balances between 10% and 30% of total assets.

Cash, cash equivalents, and investment securities increased ~~$32.4~~$514.1 million, or ~~4.8%~~77.1%, to ~~$710.9~~$1.2 billion as of December 31, 2020 from $667.1 million as of December 31, ~~2017 from $678.4 million as of December 31, 2016.~~2019. The increase was primarily driven by ~~an increase in deposit balances, offset by~~ growth in ~~loans and leases~~short-term investments and investment ~~securities.~~securities available-for-sale. Cash, cash equivalents, and investment securities were ~~10.48%~~13.21% of total assets as of December 31, ~~2017,~~2020, compared to ~~10.54%~~8.49% of total assets at December 31, ~~2016.~~2019.

Table of Contents

The following table sets forth certain information regarding the amortized cost and market value of the Company's investment securities at the dates indicated:


	At December 31,													At December 31,
	2017				2016				2015					2020				2019				2018
	Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value			Amortized Cost		Fair Value		Amortized Cost		Fair Value		Amortized Cost		Fair Value
	(In Thousands)													(In Thousands)
Investment securities available-for-sale:													Investment securities available-for-sale:
GSE debentures	$	151,483	$	149,924	$	98,122	$	97,020	$	40,658	$	40,627	GSE debentures	$	273,820	$	278,645	$	182,922	$	185,803	$	184,072	$	181,079
GSE CMOs	131,082		127,022		161,483		158,040		198,000		193,816		GSE CMOs	44,937		46,028		87,001		85,932		107,363		103,130
GSE MBSs	191,281		189,313		214,946		212,915		230,213		229,881		GSE MBSs	312,658		323,609		153,049		153,343		169,334		165,089

SBA commercial loan asset- backed securities	73		72		107		107		148		147		SBA commercial loan asset- backed securities	—		—		34		34		51		51

Corporate debt obligations	62,811		62,683		48,308		48,485		46,160		46,486		Corporate debt obligations	22,299		23,467		28,484		28,986		40,618		39,708
U.S. Treasury bonds	8,785		8,730		4,801		4,737		—		—		U.S. Treasury bonds	70,339		73,577		44,675		44,897		13,812		13,736
Trust preferred securities	1,471		1,398		1,469		1,358		1,466		1,267
Marketable equity securities	978		982		966		972		956		977

Foreign government obligations													Foreign government obligations	500		496		—		—		—		—
Total investment securities available-for-sale	$	547,964	$	540,124	$	530,202	$	523,634	$	517,601	$	513,201	Total investment securities available-for-sale	$	724,553	$	745,822	$	496,165	$	498,995	$	515,250	$	502,793
Investment securities held-to-maturity:													Investment securities held-to-maturity:
GSE debentures	$	41,612	$	40,801	$	14,735	$	14,101	$	34,915	$	34,819	GSE debentures	$	—	$	—	$	31,228	$	31,290	$	50,546	$	49,601
GSE MBSs	13,923		13,705		17,666		17,479		19,291		18,986		GSE MBSs	—		—		9,360		9,279		11,426		11,131
Municipal obligations	53,695		53,517		54,219		53,204		39,051		39,390		Municipal obligations	—		—		45,692		46,514		52,304		51,598
Foreign government obligations	500		500		500		487		500		500		Foreign government obligations	—		—		500		478		500		500
Total investment securities held-to-maturity	$	109,730	$	108,523	$	87,120	$	85,271	$	93,757	$	93,695	Total investment securities held-to-maturity	$	—	$	—	$	86,780	$	87,561	$	114,776	$	112,830
Equity securities held-for-trading													Equity securities held-for-trading	$	—	$	526	$	—	$	3,581	$	—	$	4,207
Restricted equity securities:													Restricted equity securities:
FHLBB stock	$	42,427			$	47,284			$	48,890			FHLBB stock	$	31,293			$	35,482			$	43,655
FRB stock	16,842				16,752				16,752				FRB stock	18,241				18,084				17,995
Other	100				475				475				Other	252				252				101
Total restricted equity securities	$	59,369			$	64,511			$	66,117			Total restricted equity securities	$	49,786			$	53,818			$	61,751

Total investment securities and restricted equity securities primarily consist of investment securities available-for-sale, investment securities held-to-maturity, stock in the FHLBB and stock in the FRB. The total securities portfolio increased ~~$34.0~~$153.0 million, or ~~5.0%~~23.8% since December 31, ~~2016.~~2019. As of December 31, ~~2017,~~2020, total securities portfolio was ~~10.46%~~8.90% of total assets, compared to ~~10.49%~~8.19% of total assets as of December 31, ~~2016.~~2019.

The fair value of investment securities is based principally on market prices and dealer quotes received from third-party, nationally-recognized pricing services for identical investment securities such as U.S. Treasury and agency securities. The Company's ~~marketable~~ equity securities held-for-trading are priced this way and are included in Level 1. These prices are validated by comparing the primary pricing source with an alternative pricing source when available. When quoted market prices for identical securities are unavailable, the Company uses market prices provided by independent pricing services based on recent trading activity and other observable information, including but not limited to market interest-rate curves, referenced credit spreads and estimated prepayment speeds where applicable. These investments include certain U.S. and government agency debt securities, municipal and corporate debt securities, GSE residential MBSs and CMOs, ~~and~~ trust preferred securities, and equity securities held-for-trading, all of which are included in Level ~~2. Certain fair values are estimated using pricing models (such as auction-rate municipal securities)~~1 and ~~are included in Level 3.~~2.

Additionally, management reviews changes in fair value from period to period and performs testing to ensure that prices received from the third parties are consistent with their expectation of the market. Changes in the prices obtained from the pricing service are analyzed from month to month, taking into consideration changes in market conditions including changes in mortgage spreads, changes in U.S. Treasury security yields and changes in generic pricing of 15-year and 30-year securities.

Table of Contents

Additional analysis may include a review of prices provided by other independent parties, a yield analysis, a review of average life changes using Bloomberg analytics and a review of historical pricing for the particular security.

Maturities, calls and principal repayments for investment securities available-for-sale and investment securities held-to-maturity totaled $75.4 million for the year ended December 31, 2017 compared to $143.4 million for the same period in 2016. There were no sales of investment securities available-for-sale in 2017 or 2016. For the year ended December 31, 2017, the Company purchased $91.0 million of investment securities available-for-sale and $26.9 million of investment securities held-to-maturity, compared to $115.4 million of investment securities available-for-sale and $36.2 million of investment securities held-to-maturity in 2016.

As of December 31, ~~2017,~~2020, the fair value of all investment securities available-for-sale was ~~$540.1~~$745.8 million and carried a total of ~~$7.8~~$21.3 million of net unrealized ~~losses,~~gains, compared to a fair value of ~~$523.6~~$499.0 million and net unrealized ~~losses~~gains of ~~$6.6~~$2.8 million as of December 31, ~~2016.~~2019. As of December 31, ~~2017, $469.2~~2020, $86.9 million, or ~~86.9%~~11.7%, of the portfolio, had gross unrealized losses of ~~$8.4~~$0.7 million. This compares to ~~$389.0~~$205.6 million, or ~~74.3%~~41.2%, of the portfolio with gross unrealized losses of ~~$8.0~~$1.8 million as of December 31, ~~2016.~~2019. The Company's unrealized loss position ~~increased~~decreased in ~~2017~~2020 driven by ~~higher year over year interest rates and~~ a change in the portfolio mix from shorter duration MBS to longer duration agency ~~debentures and municipal securities.~~

Management believes that these negative differences between amortized cost and fair value do not include credit losses, but rather differences in interest rates between the time of purchase and the time of measurement. It is more likely than not that the Company will not sell thedebentures. For additional discussion on investment securities ~~before recovery,~~available-for-sale by security type, see Note 4, "Investment Securities."

The Company reviews its debt securities portfolio on a quarterly basis in accordance with ASC 326. This analysis is done using probability of default ("PD") and asloss given default ("LGD") assumptions where a ~~result, it will recover~~model is created to determine current expected credit loss (CECL) for the ~~amortized cost basis~~remaining life of the ~~investment~~ securities. ~~As such, management has determined that~~For the ~~securities are not other-than-temporarily impaired as of~~year ended December 31, ~~2017. If market conditions~~2020, the company did not recognize an amount as allowance or provision for ~~securities worsen or the creditworthiness of the underlying issuers deteriorates, it is possible that the Company may recognize additional other-than-temporary impairments in future periods.~~credit loss. For additional discussion on how the Company validates fair values provided by the third-party pricing service, see Note 21, “Fair Value of Financial Instruments.”

~~Investment Securities Available-for-Sale~~

~~U.S. Government-Sponsored Enterprises~~

~~The Company invests in~~Effective March 31, 2020, all investment securities issued by U.S. Government-sponsored enterprises ("GSEs"), including GSE debentures, mortgage-backed securities ("MBSs"), and collateralized mortgage obligations ("CMOs"). GSE securities include obligations issued by the Federal National Mortgage Association ("FNMA"), the Federal Home Loan Mortgage Corporation ("FHLMC"), the Government National Mortgage Association ("GNMA"), the Federal Home Loan Banks ("FHLB") and the Federal Farm Credit Bank. As of December 31, 2017, only GNMA MBSs and CMOs, and Small Business Administration ("SBA") commercial loan asset-backed securities in our available-for-sale portfolio with an estimated fair value of $23.7 millionclassified as held-to-maturity were ~~backed explicitly by the full faith and credit of the U.S. Government, compared~~reclassified as available for sale to ~~$26.2 million as of December 31, 2016.~~

GSE securities are considered attractive investments because they (1) generate positive yields with minimal administrative expense, (2) impose minimal credit risk as a result of the guarantees usually provided, (3) can be utilized as collateral for borrowings, (4) generate cash flows useful for liquidity management and (5) are ‘‘qualified investments’’ as designated for regulatory purposes that the Company is obligated to meet.

As of December 31, 2017, the Company owned 48 GSE debentures with a total fair value of $149.9 million, and a net unrealized loss of $1.6 million. As of December 31, 2016, the Company held 29 GSE debentures with a total fair value of $97.0 million, and a net unrealized loss of $1.1 million. As of December 31, 2017, 43 of the 48 securities in this portfolio were in an unrealized loss position. As of December 31, 2016, 21 of the 29 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA/SBA) guarantee of the U.S. Government. During the year ended December 31, 2017, the Company purchased a total of $54.2 million GSE debentures. This compares to $65.7 million purchased during the same period in 2016.

As of December 31, 2017, the Company owned 62 GSE CMOs with a total fair value of $127.0 million and a net unrealized loss of $4.1 million. As of December 31, 2016, the Company held 62 GSE CMOs with a total fair value of $158.0 million with a net unrealized loss of $3.4 million. As of December 31, 2017, 47 of the 62 securities in this portfolio were in an unrealized loss position. As of December 31, 2016, 47 of the 62 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S. Government. During the year ended December 31, 2017, the Company did not purchase any GSE CMOs. During the year ended December 31, 2016, the Company purchased a total of $3.1 million of GSE CMOs.

As of December 31, 2017, the Company owned 194 GSE MBSs with a total fair value of $189.3 million and a net unrealized loss of $2.0 million. As of December 31, 2016, the Company held 195 GSE MBSs with a total fair value of $212.9 million with a net unrealized loss of $2.0 million. As of December 31, 2017, 82 of the 194 securities in this portfolio were in an unrealized loss position. As of December 31, 2016, 60 of the 195 securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S. Government. During the years ended December 31, 2017 and 2016, the Company purchased a total of $18.3 million and $36.6 million, respectively, of GSE MBSs.

~~SBA Commercial Loan Asset-Backed Securities~~

As of December 31, 2017 and December 31, 2016, the Company owned SBA securities with a total fair value of $0.1 million, which approximated amortized cost. As of December 31, 2017, four of the five securities in this portfolio were in an unrealized loss position. As of December 31, 2016, four of the six securities in this portfolio were in an unrealized loss position. All securities are performing and backed by the explicit (SBA) guarantee of the U.S Government.

Mortgage-related securities are created by the pooling of mortgages and the issuance of a security with an interest rate that is less than the average interest rate on the underlying mortgages. Mortgage related securities purchased by the Company generally are comprised of a pool of single-family mortgages. The issuers of such securities are generally GSEs such as FNMA, FHLMC and GNMA, which pool and resell participation interests in the form of securities to investors and guarantee the payment of principal and interest to the investors.

Investments in mortgage-related securities issued and guaranteed by GSEs generally do not entail significant credit risk. Such investments, however, are susceptible to significant interest rate and cash flow risks when actual cash flows from the investments differ from cash flows estimated at the time of purchase. Additionally, the market value of such securities can be affected adversely by market changes in interest rates. Prepayments that are faster than anticipated may shorten the life of a security and result in the accelerated expensing of any premiums paid, thereby reducing the net yield earned on the

security. Although prepayments of underlying mortgages depend on many factors, the difference between the interest rates on the underlying mortgages and prevailing mortgage interest rates generally is the most significant determinant of the rate of prepayments. During periods of declining interest rates, refinancing generally increases and accelerates the prepayment of underlying mortgages and the related security. Such an occurrence can also create reinvestment risk because of the unavailability of other investments with a comparable rate of return in relation to the nature and maturity of the alternative investment. Conversely, in a rising interest-rate environment, prepayments may decline, thereby extending the estimated life of the security and depriving the Company of the ability to reinvest cash flows at the higher market rates of interest.

~~Corporate Obligations~~

From time to time, the Company may invest in high-quality corporate obligations to provide portfolio diversification and improve the overall yield on the portfolio. The Company owned nineteen corporate obligation securities with a total fair value of $62.7 million and a net unrealized gain of $0.1 million as of December 31, 2017. This compares to sixteen corporate obligation securities with a total fair value of $48.5 million and a net unrealized gain of $0.2 million as of December 31, 2016. As of December 31, 2017, nine of the nineteen securities in this portfolio were in an unrealized loss position. As of December 31, 2016, three of the sixteen securities in this portfolio were in an unrealized loss position. Full collection of the obligations is expected because the financial condition of the issuers is sound, and the issuers have not defaulted on scheduled payments, the obligations are rated investment grade, and the Company hasprudently reflect the ability and intent to not hold these assets to maturity due to the obligations for a period of time to recover the amortized cost. During the year ended December 31, 2017, the Company purchased $14.5 million in corporate obligations compared to $5.1 million in the same period in 2016.

~~U.S. Treasury Bonds~~

~~The Company invests in securities issued~~economic uncertainty created by the ~~U.S. government.~~COVID-19 pandemic. As of December 31, ~~2017,~~2019, the ~~Company owned two U.S. Treasury bonds with a total~~ fair value of ~~$8.7~~investment securities held-to-maturity was $87.6 million ~~and a~~with net unrealized loss of $0.1 million. As of December 31, 2016, the Company owned one U.S. Treasury bond with a total fair value of $4.7 million and a net unrealized loss of $0.1 million. As of December 31, 2017 and 2016, all of the securities in this portfolio were in an unrealized loss position. For the year ended December 31, 2017, the Company purchased $4.0 million in U.S. Treasury bonds, compared to $4.8 million during the same period in 2016.

~~Trust Preferred Securities~~

Trust preferred securities represent subordinated debt issued by financial institutions. As of December 31, 2017 and December 31, 2016, the Company owned two trust preferred securities with a total fair value of $1.4 million and a net unrealized loss of $0.1 million. As of December 31, 2017 and 2016, both of the securities in this portfolio were in an unrealized loss position. Full collection of the obligations is expected because the financial condition of the issuers is sound, neither of the

~~issuers has defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the ability and~~

~~intent to hold the obligations for a period of time to recover the amortized cost.~~

~~Marketable Equity Securities~~

As of December 31, 2017 and 2016, the Company owned marketable equity securities with a fair value of $1.0 million, which approximated amortized cost. As of December 31, 2017 and 2016, one of the two securities in this portfolio was in an unrealized loss position.

~~Investment Securities Held-to-Maturity~~

~~U.S. Government-Sponsored Enterprises~~

~~As of December 31, 2017, the Company owned fourteen GSE debentures with a total fair value of $40.8 million and a net unrealized loss~~gains of $0.8 million. As of December 31, ~~2016, the Company owned five GSE debentures with a total fair value of $14.1~~2019, $22.3 million, ~~and a net unrealized loss of $0.6 million. As of December 31, 2017, all securities in this portfolio were in an unrealized loss position. At December 31, 2016, all~~or 25.5% of the ~~securities in this~~ portfolio ~~were in an~~had gross unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S Government. During the years ended December 31, 2017 and December 31, 2016, the Company purchased a total of $26.9 million and $17.7 million in GSE debentures, respectively.

~~As of December 31, 2017, the Company owned eleven GSE MBSs with a total fair value of $13.7 million and a net unrealized loss~~losses of $0.2 million. ~~As of December 31, 2016, the Company owned eleven GSE MBSs with a total fair value of $17.5~~

Maturities, calls and principal repayments for investment securities available-for-sale totaled $214.6 million and an unrealized loss of $0.2 million. As of December 31, 2017, eight of the eleven securities in this portfolio were in an unrealized loss position as compared to December 31, 2016, when eight of the eleven securities were in an unrealized loss position. All securities are performing and backed by the implicit (FHLB/FNMA/FHLMC) or explicit (GNMA) guarantee of the U.S. Government. Duringfor the year ended December 31, ~~2017,~~2020 compared to $68.2 million for the same period in 2019. For the year ended December 31, 2020, the Company sold $142.7 million of investment securities available for sale, compared to none for the same period in 2019. For the year ended December 31, 2020, the Company purchased $503.5 million of investment securities available-for-sale, compared to $50.4 million for the same period in 2019.

Maturities, calls and principal repayments for investment securities held-to-maturity totaled $6.3 million for the year ended December 31, 2020 compared to $28.9 million for the same period in 2019. There were no sales of investment securities held-to-maturity for the ended December 31, 2020 and 2019. For the year ended December 31, 2020, the Company did not purchase any ~~GSE MBSs,~~investment securities held-to-maturity, compared to $1.4 million in purchases of investment securities held-to-maturity for the same period in ~~2016 when~~2019. During the ~~Company purchased $2.3 million in GSE MBSs.~~

~~Municipal Obligations~~

As of December 31, 2017, the Company owned 100 municipal obligation securities with a total fair value and total amortized cost of $53.5 million and $53.7 million, respectively. As of December 31, 2016, the Company owned 100 municipal obligation securities with a total fair value and total amortized cost of $53.2 million and $54.2 million, respectively. As of December 31, 2017, 69 of the 100 securities in this portfolio were in an unrealized loss position as compared to December 31, 2016, when 93 of the 100three months ended September 30, 2020, all held-to-maturity securities were ~~in an unrealized loss position. During~~transferred to the ~~year ended December 31, 2017, the Company did not purchase any municipal obligations. During the year ended December 31, 2016, the Company purchased $15.6 million in municipal obligations.~~available-for-sale portfolio.

~~Foreign Government Obligations~~

As of December 31, 2017 and December 31, 2016, the Company owned one foreign government obligation security with a fair value and amortized cost of $0.5 million. As of December 31, 2017, the security was in an unrealized loss position. This security was in an unrealized loss position at December 31, 2016. During the year ended December 31, 2017, the Company did not purchase any foreign government obligation securities. During the year ended December 31, 2016, the Company repurchased the foreign government obligation security that matured during the first quarter of 2016.

Restricted Equity Securities

FHLBB Stock—The Company invests in the stock of the FHLBB as one of the requirements to borrow. The Company maintains an excess balance of capital stock, which allows for additional borrowing capacity at each of the Banks. OnAs of December ~~30th,~~31, 2020, the ~~FHLBB initiated a stock buyback which reduced the Company's~~ excess balance of capital stock is $1.0 million, as compared to ~~zero.~~$0.7 million at December 31, 2019.

As of December 31, ~~2017,~~2020, the Company owned stock in the FHLBB with a carrying value of ~~$42.4~~$31.3 million, a decrease of ~~$4.9~~$4.2 million from ~~$47.3~~$35.5 million as of December 31, ~~2016.~~2019. As of December 31, ~~2017,~~2020, the FHLBB had total assets of ~~$60.4~~$38.5 billion and total capital of ~~$3.3~~$2.8 billion, of which ~~$1.3~~$1.5 billion was retained earnings. The FHLBB stated that it remained in compliance with all regulatory capital ratios as of December 31, ~~2017~~2020 and was classified as "adequately capitalized" by its regulator, based on the FHLBB's financial information as of September 30, ~~2017.~~2020. See Note 5, "Restricted Equity Securities" to the consolidated financial statements for further information about the FHLBB.

Federal Reserve Bank Stock—The Company invests in the stock of the Federal Reserve Bank of Boston, as a condition of the membership for the Banks in the Federal Reserve System. In ~~2017,~~2020, the Company maintained its investment in the stock

of the Federal Reserve Bank of Boston to adjust for deposit growth. The FRB is the primary federal regulator for the Company and the Banks.

~~Other Stock—The Company invests in a small number~~

Table of other restricted securities which included Northeast Retirement Services, Inc. ("NRS"). The Company, through its wholly owned subsidiary, Brookline Securities Corp. ("Brookline Securities"), held 9,721 shares of restricted equity securities of NRS. This investment was recorded at cost of $122 thousand as no readily determinable fair value was available. On December 5, 2016, Community Bank Systems, Inc. ("CBU") announced entry into a merger agreement to acquire NRS. After receiving stockholder and regulatory approvals, CBU completed the acquisition of NRS on February 3, 2017. The Company exchanged the 9,721 shares of NRS and received $319.04 in cash and 14.876 shares of CBU common stock for each share of NRS held. As part of the merger agreement, the Company was restricted to selling 5,071 shares per day in the open market and a portion of the merger consideration was held in escrow to be used for indemnification claims, if any, within the 12 month period following the merger. The Company completed the sale of all CBU shares during the first quarter of 2017. The Company recognized a gain on the sale of securities of $11.4 million for the quarter ending March 31, 2017.Contents

Brookline Securities held one Class A Common Stock share and 2,070 Class B Common Stock shares of the Savings Bank Life Insurance Company of Massachusetts ("SBLI"). In July 2017, SBLI converted from a Massachusetts stock insurance company to a Massachusetts mutual insurance company and, as a result, Brookline Securities received $500 for one share of Class A Common Stock and $128 per share for its 2,070 shares of Class B Common Stock of SBLI, or gross proceeds of $265.5 thousand in cash. Brookline Securities recognized a nominal gain on the exchange.

Carrying Value, Weighted Average Yields, and Contractual Maturities of Investment and Restricted Equity Securities

The table below sets forth certain information regarding the carrying value, weighted average yields and contractual maturities of the Company's investment and restricted equity securities portfolio at the date indicated.

Balance at December 31, 2017
One Year or Less
After One Year
Through Five Years

After Five Years
Through Ten Years
After Ten Years Total

Carrying
Value

Weighted
Average
Yield (1)

Carrying
Value

Weighted
Average
Yield (1)

Carrying
Value

Weighted
Average
Yield (1)

Carrying
Value

Weighted
Average
Yield (1)

Carrying
Value

Weighted
Average
Yield (1)
(Dollars in Thousands)
Investment securities available-for-sale:
GSE debentures $ —
— % $ 95,330
1.97 % $ 54,594
2.14 % $ —
— % $ 149,924
2.03 %
GSE CMOs 1,196
1.53 % 19
6.90 % 6,151
1.55 % 119,656
1.85 % 127,022
1.83 %
GSE MBSs 378
3.40 % 16,420
2.19 % 54,617
1.91 % 117,898
2.26 % 189,313
2.16 %
SBA commercial loan asset- backed securities —
— % 27
2.26 % 45
1.60 % —
— % 72
1.85 %
Corporate debt obligations 22,078
2.29 % 26,269
2.26 % 14,336
2.60 % —
— % 62,683
2.35 %
U.S. Treasury bonds —
— % 3,964
2.24 % 4,766
2.02 % —
— % 8,730
2.12 %
Trust preferred securities —
— % —
— % 469
2.10 % 929
2.23 % 1,398
2.19 %
Marketable equity securities (2) —
— % —
— % —
— % 982
2.06 % 982
2.06 %
Total investment securities available-for-sale $ 23,652
2.27 % $ 142,029
2.05 % $ 134,978
2.06 % $ 239,465
2.06 % $ 540,124
2.07 %
Investment securities held-to-maturity:

GSE debentures $ —
— % $ 26,867
2.15 % $ 14,745
1.90 % $ —
— % $ 41,612
2.06 %
GSE MBSs 35
1.98 % —
— % —
— % 13,888
1.98 % 13,923
1.98 %
Municipal obligations 883
0.81 % 30,968
1.38 % 21,844
1.72 % —
— % 53,695
1.51 %
Foreign government obligations —
— % 500
2.15 % —
— % —
— % 500
2.15 %
Total investment securities held-to-maturity $ 918
0.85 % $ 58,335
1.74 % $ 36,589
1.79 % $ 13,888
1.98 % $ 109,730
1.78 %
Restricted equity securities (2):
FHLBB stock $ —
— % $ —
— % $ —
— % $ 42,427
4.27 % $ 42,427
4.27 %
FRB stock —
— % —
— % —
— % 16,842
6.00 % 16,842
6.00 %
Other stock —
— % —
— % —
— % 100
33.45 % 100
33.45 %
Total restricted equity securities $ —
— % $ —
— % $ —
— % $ 59,369
4.81 % $ 59,369
4.81 %


	Balance at December 31, 2020
	One Year or Less				After One Year Through Five Years				After Five Years Through Ten Years				After Ten Years				Total
	Carrying Value		Weighted Average Yield (1)		Carrying Value		Weighted Average Yield (1)		Carrying Value		Weighted Average Yield (1)		Carrying Value		Weighted Average Yield (1)		Carrying Value		Weighted Average Yield (1)
	(Dollars in Thousands)
Investment securities available-for-sale:
GSE debentures	$	30,365	1.97	%	$	103,133	2.17	%	$	135,342	1.32	%	$	9,805	2.00	%	$	278,645	1.73	%


GSE CMOs	—		—	%	—		—	%	1,779		1.47	%	44,249		1.72	%	46,028		1.71	%
GSE MBSs	1,648		2.96	%	6,307		1.78	%	34,730		1.93	%	280,924		1.87	%	323,609		1.88	%

Corporate debt obligations	—		—	%	23,467		2.53	%	—		—	%	—		—	%	23,467		2.53	%
U.S. Treasury bonds	—		—	%	19,860		2.19	%	53,717		1.39	%	—		—	%	73,577		1.60	%

Foreign government obligations	—		—	%	496		3.25	%	—		—	%	—		—	%	496		3.25	%

Total investment securities available-for-sale	$	32,013	2.02	%	$	153,263	2.22	%	$	225,568	1.43	%	$	334,978	1.86	%	$	746,348	1.81	%






Equity securities held-for-trading (2)																	526		3.87	%
Restricted equity securities (2):
FHLBB stock	$	—	—	%	$	—	—	%	$	—	—	%	$	31,293	4.64	%	$	31,293	4.64	%
FRB stock	—		—	%	—		—	%	—		—	%	18,241		6.00	%	18,241		6.00	%
Other stock	—		—	%	—		—	%	—		—	%	252		—	%	252		—	%
Total restricted equity securities	$	—	—	%	$	—	—	%	$	—	—	%	$	49,786	5.14	%	$	49,786	5.14	%

_______________________________________________________________________________

(1) Yields have been calculated on a tax-equivalent basis.

(2) Equity securities have no contractual maturity, therefore they are reported above in the over ten year maturity column.

Table of Contents

Deposits

The following table presents the Company's deposit mix at the dates indicated.

At December 31,
2017 2016 2015
Amount
Percent
of Total

Weighted
Average
Rate
Amount
Percent
of Total

Weighted
Average
Rate
Amount
Percent
of Total

Weighted
Average
Rate
(Dollars in Thousands)
Non-interest-bearing deposits:
Demand checking accounts $ 942,583
19.3 % — % $ 900,474
19.5 % — % $ 799,117
18.6 % — %
Interest-bearing deposits:
NOW accounts 350,568
7.2 % 0.07 % 323,160
7.0 % 0.07 % 283,972
6.6 % 0.07 %
Savings accounts 646,359
13.3 % 0.25 % 613,061
13.3 % 0.20 % 540,788
12.6 % 0.25 %
Money market accounts 1,724,363
35.4 % 0.56 % 1,733,359
37.6 % 0.47 % 1,594,269
37.0 % 0.44 %
Certificate of deposit accounts 1,207,470
24.8 % 1.27 % 1,041,022
22.6 % 1.04 % 1,087,872
25.2 % 0.93 %
Total interest-bearing deposits 3,928,760
80.7 % 0.68 % 3,710,602
80.5 % 0.55 % 3,506,901
81.4 % 0.53 %
Total deposits $ 4,871,343
100.0 % 0.55 % $ 4,611,076
100.0 % 0.44 % $ 4,306,018
100.0 % 0.43 %


	At December 31,
	2020						2019						2018
	Amount		Percent of Total		Weighted Average Rate		Amount		Percent of Total		Weighted Average Rate		Amount		Percent of Total		Weighted Average Rate
	(Dollars in Thousands)
Non-interest-bearing deposits:
Demand checking accounts	$	1,592,205	23.0	%	—	%	$	1,141,578	19.6	%	—	%	$	1,033,551	19.0	%	—	%
Interest-bearing deposits:
NOW accounts	513,948		7.4	%	0.09	%	371,380		6.4	%	0.11	%	336,317		6.2	%	0.10	%
Savings accounts	701,659		10.2	%	0.13	%	613,467		10.5	%	0.46	%	619,961		11.4	%	0.32	%
Money market accounts	2,018,977		29.2	%	0.31	%	1,682,005		28.9	%	1.15	%	1,675,050		30.7	%	1.18	%
Certificate of deposit accounts	1,389,998		20.1	%	1.44	%	1,671,738		28.7	%	2.28	%	1,438,478		26.3	%	2.07	%
Brokered deposit accounts	693,909		10.0	%	0.39	%	349,904		6.0	%	2.18	%	350,687		6.4	%	2.33	%
Total interest-bearing deposits	5,318,491		77.0	%	0.57	%	4,688,494		80.4	%	1.46	%	4,420,493		81.0	%	1.14	%
Total deposits	$	6,910,696	100.0	%	0.44	%	$	5,830,072	100.0	%	1.17	%	$	5,454,044	100.0	%	0.92	%

The Company seeks to increase its core (non-certificate of deposit) deposits and decrease its loan-to-deposit ratio over time, while continuing to increase deposits as a percentage of total funding sources. The Company's loan-to-deposit ratio ~~increased to 117.6%~~was 105.2% as of December 31, ~~2017, from 117.1%~~2020, compared to 115.6% as of December 31, ~~2016.~~2019.

Total deposits increased ~~$0.3~~$1.1 billion, or ~~5.6%~~18.5%, to ~~$4.9~~$6.9 billion as of December 31, ~~2017,~~2020, compared to ~~$4.6~~$5.8 billion as of December 31, ~~2016.~~2019. Deposits as a percentage of total assets increased from ~~71.6%~~74.2% as of December 31, ~~2016~~2019 to ~~71.8%~~77.3% as of December 31, ~~2017.~~2020. The increase in deposits as a percentage of total assets is primarily due to the growth in the core deposit accounts. The decrease in certificate of deposit accounts was offset by the increase in brokered deposit accounts.

In 2020, core deposits ~~primarily demand accounts, NOW accounts and MMDA accounts.~~

Asincreased $1.0 billion. The ratio of core deposits to total deposits increased from 65.3% as of December 31, ~~2017, the Company had $274.7 million~~2019 to 69.8% as of ~~brokered deposits~~December 31, 2020, due to an increase in all core deposit accounts.

Certificate of deposit accounts decreased $0.3 billion to $1.4 billion as of December 31, 2020, compared to ~~$203.4~~$1.7 billion as of December 31, 2019. Certificate of deposit accounts have decreased as a percentage of total deposits to 20.1% as of December 31, 2020 from 28.7% as of December 31, 2019.

Brokered deposits increased $344.0 million to $693.9 million as of December 31, ~~2016.~~2020, compared to $349.9 as of December 31, 2019. Brokered deposits have increased as a percentage of total deposits to 10.0% as of December 31, 2020 from 6.0% as of December 31, 2019. The increase in Brokered deposits was driven by two new product offerings. Brokered deposits allow the Company to seek additional funding by attracting deposits from outside the Company's core market. The Company's investment policy limits the amount of brokered deposits to 15% of total assets. Brokered deposits are included in the certificate of deposit balance, which increased $166.4 million, or 16.0%, during 2017. Certificates of deposit have also increased as a percentage of total deposits to 24.8% as of December 31, 2017 from 22.6% as of December 31, 2016.

In 2017, core deposits increased $93.8 million, or 2.6%. The ratio of core deposits to total deposits decreased from 77.4% as of December 31, 2016 to 75.2% as of December 31, 2017, primarily due to the shift in deposit mix and increase in brokered deposits.

The Company's growth in deposits and the shift in the mix of deposits in ~~2017~~2020 and ~~2016~~2019 were due in part to expansion of the Company's cash management services and increased efforts in seeking deposits from existing customer relationships. A rise in interest rates could cause a shift from core deposit accounts to certificate of deposit accounts with longer maturities. Generally, the rates paid on certificates of deposit are higher than those paid on core deposit accounts.

The following table sets forth the distribution of the average balances of the Company's deposit accounts for the years indicated and the weighted average interest rates on each category of deposits presented. Averages for the years presented are based on daily balances.

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	Year Ended December 31,																			Year Ended December 31,
	2017						2016						2015							2020						2019						2018
	Average Balance		Percent of Total Average Deposits		Weighted Average Rate		Average Balance		Percent of Total Average Deposits		Weighted Average Rate		Average Balance		Percent of Total Average Deposits		Weighted Average Rate			Average Balance		Percent of Total Average Deposits		Weighted Average Rate		Average Balance		Percent of Total Average Deposits		Weighted Average Rate		Average Balance		Percent of Total Average Deposits		Weighted Average Rate
	(Dollars in Thousands)																			(Dollars in Thousands)
Core deposits:																			Core deposits:
Non-interest-bearing demand checking accounts	$	912,743	19.3	%	—	%	$	849,672	18.9	%	—	%	$	770,045	18.5	%	—	%	Non-interest-bearing demand checking accounts	$	1,451,556	22.5	%	—	%	$	1,070,859	18.9	%	—	%	$	997,179	19.3	%	—	%
NOW accounts	322,681		6.8	%	0.07	%	294,318		6.5	%	0.07	%	249,204		6.0	%	0.07	%	NOW accounts	408,374		6.3	%	0.12	%	339,275		6.0	%	0.13	%	340,194		6.6	%	0.08	%
Savings accounts	620,757		13.1	%	0.21	%	578,855		12.9	%	0.23	%	532,496		12.8	%	0.21	%	Savings accounts	670,217		10.4	%	0.22	%	608,022		10.7	%	0.48	%	618,674		12.0	%	0.29	%
Money market accounts	1,761,112		37.2	%	0.50	%	1,670,609		37.2	%	0.45	%	1,560,437		37.6	%	0.44	%	Money market accounts	1,817,085		28.2	%	0.52	%	1,682,676		29.7	%	1.26	%	1,715,057		33.1	%	0.90	%
Total core deposits	3,617,293		76.4	%	0.29	%	3,393,454		75.5	%	0.27	%	3,112,182		74.9	%	0.26	%	Total core deposits	4,347,232		67.5	%	0.40	%	3,700,832		65.4	%	0.66	%	3,671,104		71.0	%	0.48	%
Certificate of deposit accounts	1,116,909		23.6	%	1.16	%	1,102,110		24.5	%	1.00	%	1,045,328		25.1	%	0.78	%	Certificate of deposit accounts	1,577,104		24.5	%	1.92	%	1,611,389		28.5	%	2.25	%	1,191,970		23.1	%	1.60	%
Brokered deposit accounts																			Brokered deposit accounts	$	512,803	8.0	%	1.28	%	$	344,961	6.1	%	2.54	%	$	305,503	5.9	%	1.80	%
Total deposits	$	4,734,202	100.0	%	0.49	%	$	4,495,564	100.0	%	0.44	%	$	4,157,510	100.0	%	0.44	%	Total deposits	$	6,437,139	100.0	%	0.75	%	$	5,657,182	100.0	%	1.23	%	$	5,168,577	100.0	%	0.81	%

As of December 31, ~~2017~~2020 and ~~2016,~~2019, the Company had outstanding certificate of deposit of $100,000 or more, maturing as follows:


	At December 31,
	2020				2019
	Amount		Weighted Average Rate		Amount		Weighted Average Rate
	(Dollars in Thousands)
Maturity period:
Six months or less	$	459,828	1.63	%	$	410,973	2.25	%
Over six months through 12 months	302,576		1.15	%	338,578		2.36	%
Over 12 months	154,343		1.83	%	373,632		2.48	%
Total certificate of deposit of $100,000 or more	$	916,747	1.51	%	$	1,123,183	2.36	%

At December 31,
2017 2016
Amount
Weighted
Average Rate
Amount
Weighted
Average Rate
(Dollars in Thousands)
Maturity period:
Six months or less $ 157,263
0.96 % $ 134,783
0.82 %
Over six months through 12 months 134,297
1.08 % 79,543
0.92 %
Over 12 months 244,348
1.73 % 222,342
1.44 %
Total certificate of deposit of $100,000 or more $ 535,908
1.34 % $ 436,668
1.15 %

Borrowed Funds

The following table sets forth certain information regarding FHLBB advances, subordinated debentures and notes and other borrowed funds for the periods indicated:

Year Ended December 31,
2017 2016 2015
(Dollars in Thousands)
Borrowed funds:
Average balance outstanding $ 1,013,360
$ 1,006,200
$ 957,437
Maximum amount outstanding at any month end during the year 1,093,693
1,059,885
1,094,459
Balance outstanding at end of year 1,020,819
1,044,086
983,029
Weighted average interest rate for the period 1.61 % 1.56 % 1.55 %
Weighted average interest rate at end of period 1.82 % 1.58 % 1.55 %


	Year Ended December 31,
	2020			2019			2018
	(Dollars in Thousands)
Borrowed funds:
Average balance outstanding	$	1,033,643		$	920,385		$	1,075,446
Maximum amount outstanding at any month end during the year	1,406,669			987,835			1,208,920
Balance outstanding at end of year	820,247			902,749			920,542
Weighted average interest rate for the period	1.73		%	2.65		%	2.22		%
Weighted average interest rate at end of period	1.51		%	2.53		%	2.55		%

Advances from the FHLBB

On a long-term basis, the Company intends to continue to increase its core deposits. The Company also uses FHLBB borrowings and other wholesale borrowings as part of the Company's overall strategy to fund loan growth and manage interest-rate risk and liquidity. The advances are secured by a blanket security agreement which requires the Banks to maintain certain qualifying assets as collateral, principally mortgage loans and securities in an aggregate amount at least equal to outstanding advances. The maximum amount that the FHLBB will advance to member institutions, including the Company, fluctuates from

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time to time in accordance with the policies of the FHLBB. The Company may also borrow from the FRB's "discount window" as necessary.

FHLBB borrowings decreased by ~~$20.9~~$109.6 million to ~~$889.9~~$648.8 million as of December 31, ~~2017~~2020 from the December 31, ~~2016~~2019 balance of ~~$910.8~~$758.5 million. The decrease in FHLBB borrowings was primarily due to maturing advances from the FHLBB.

Other Borrowed Funds

In addition to advances from the FHLBB and subordinated debentures and notes, the Company utilizes other funding

sources as part of the overall liquidity strategy. Those funding sources include repurchase agreements, committed and uncommitted lines of credit with several financial institutions.

The Company periodically enters into repurchase agreements with its larger deposit and commercial customers as part of its cash management services which are typically overnight borrowings. Repurchase agreements with customers ~~decreased~~increased

$~~12.6 million~~15.0 million to ~~$37.6 million~~$57.7 million as of December 31, ~~2017~~2020 from ~~$50.2~~$42.7 million as of December 31, ~~2016.~~2019.

The Company has access to a $12.0 million committed line of credit as of December 31, ~~2017.~~2020. As of December 31, ~~2017~~2020 and December 31, ~~2016,~~2019, the Company did not have any borrowings on this committed line of credit outstanding.

The Banks also have access to funding through several uncommitted lines of credit of ~~$203.0~~$865.0 million. As of

December 31, ~~2017~~2020, the Company had ~~$10.0~~$30.0 million in borrowings on outstanding uncommitted lines as compared to December 31, ~~2016,~~2019, when the Company ~~did not have any~~had $18.0 million borrowings on ~~these~~outstanding uncommitted ~~lines of credit.~~lines.

Subordinated Debentures and Notes

In connection with the acquisition of Bancorp Rhode Island, Inc., the Company assumed three subordinated debentures issued by a subsidiary of Bancorp Rhode Island, Inc. ~~One of these subordinated debenture in the amount of $3.0 million was called in the first quarter of 2013 due to its high fixed rate.~~

On September 15, 2014, the Company offered $75.0 million of 6.0% fixed-to-floating subordinated notes due September

15, 2029. The Company is obligated to pay 6.0% interest semiannually between September 2014 and September 2024. Subsequently, the Company is obligated to pay 3-month LIBOR plus 3.315% quarterly until the notes mature in September 2029. As of December 31, ~~2017,~~2020, the Company had capitalized costs of ~~$1.2~~$0.9 million in relation to the issuance of these subordinated notes.

The following table summarizes the Company's subordinated debentures and notes at the dates indicated.

Carrying Amount

Issue Date

Rate

Maturity Date

Next Call Date

December 31, 2020

December 31, 2019

(Dollars in Thousands)

June 26, 2003

Variable;
3-month LIBOR + 3.10%

June 26, 2033

March 25, 2021

4,848

4,826

March 17, 2004

Variable;
3-month LIBOR + 2.79%

March 17, 2034

March 16, 2021

4,772

4,739

September 15, 2014

6.0% Fixed-to-Variable;
3-month LIBOR + 3.315%

September 15, 2029

September 15, 2024

74,126

74,026

Total

83,746

83,591

Carrying Amount
Issue Date Rate Maturity Date Next Call Date December 31, 2017 December 31, 2016
(Dollars in Thousands)
June 26, 2003
Variable;
3-month LIBOR + 3.10%
June 26, 2033 March 26, 2018 $ 4,778
$ 4,752
March 17, 2004
Variable;
3-month LIBOR + 2.79%
March 17, 2034 March 19, 2018 4,668
4,628
September 15, 2014
6.0% Fixed-to-Variable;
3-month LIBOR + 3.315%
September 15, 2029 September 15, 2024 73,825
73,725
Total $ 83,271
$ 83,105

Derivative Financial Instruments

The Company has entered into loan level derivatives, risk participation agreements, and foreign exchange contracts with certain ~~of its~~ commercial customers and concurrently enters into offsetting swaps with third-party financial institutions. The Company may also, from time to time, enter into risk participation agreements. The Company ~~did not have derivative fair value hedges or derivative~~uses interest rate futures that are designated and qualify as cash flow ~~hedges at December 31, 2017 or 2016.~~ hedging instruments.

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The following table summarizes certain information concerning the Company's loan level derivatives, risk participation agreements, and foreign exchange contracts at

December 31, ~~2017~~2020 and ~~2016:~~

2019:


	At December 31, 2020			At December 31, 2019
	(Dollars in Thousands)
Loan level derivatives (Notional Amount):
Receive fixed, pay variable	$	1,214,146		$	1,101,193
Pay fixed, receive variable	1,214,146			1,101,193
Risk participation-out agreements	252,655			235,693
Risk participation-in agreements	60,619			55,281
Foreign exchange contracts (Notional Amount)
Buys foreign currency, sells U.S. currency	$	1,266		$	1,125
Sells foreign currency, buys U.S. currency	1,273			1,230
Fixed weighted average interest rate from the Company to counterparty	3.07		%	3.54		%
Floating weighted average interest rate from counterparty to the Company	0.99		%	2.88		%
Weighted average remaining term to maturity (in months)	85			91
Fair value:
Recognized as an asset:
Interest rate derivatives	$	8		$	—
Loan level derivatives	131,328			59,365
Risk participation-out agreements	1,843			1,229
Foreign exchange contracts	156			54
Recognized as a liability:
Loan level derivatives	$	131,328		$	59,365
Risk participation-in agreements	361			283
Foreign exchange contracts	148			53

At December 31, 2017 At December 31, 2016
(Dollars in Thousands)
Loan level derivatives:
Receive fixed, pay variable $ 494,659
$ 383,780
Pay fixed, receive variable 494,659
383,780
Risk participation-out agreements 36,627
16,961
Risk participation-in agreements 3,825
—
Foreign exchange contracts (Notional Amount)
Buys foreign currency, sells U.S. currency $ 1,495
$ 195
Sells foreign currency, buys U.S. currency 1,502
195
Fixed weighted average interest rate from the Company to counterparty 4.17 % 4.13 %
Floating weighted average interest rate from counterparty to the Company 3.19 % 2.77 %
Weighted average remaining term to maturity (in months) 81
91
Fair value:
Recognized as an asset:
Loan level derivatives $ 8,865
$ 9,738
Risk participation-out agreements 65
20
Foreign exchange contracts 72
—
Recognized as a liability:
Loan level derivatives $ 8,865
$ 9,738
Risk participation-in agreements 10
—
Foreign exchange contracts 65
—

~~As of December 31, 2016, the Company held no risk participation-in agreements and the fair value of the foreign exchange contracts was nominal.~~

Stockholders' Equity and Dividends

The Company's total stockholders' equity was ~~$803.8~~$941.8 million as of December 31, ~~2017,~~2020, representing a ~~$108.3~~$3.8 million ~~increase~~decrease compared to ~~$695.5~~$945.6 million at December 31, ~~2016.~~2019. The increase is due to net income of $50.5 million for the year ended December 31, 2017, issuance of common stock of $81.9 million, an increase of $3.4 million related to stock-based compensation, which was partially offset bydecrease primarily reflects dividends paid by the Company of ~~$27.0~~$36.4 million ~~in 2017.~~

~~On, April 27, 2017,~~for the twelve months ended December 31, 2020, a reduction of $20.0 million due to repurchase shares of treasury stock, and $11.5 million due to the implementation of CECL, partially offset by net income attributable to the Company ~~entered into an underwriting agreement with Piper Jaffray & Co., as representative~~ of ~~the underwriters named therein (collectively, the “Underwriters”), to offer~~$47.6 million, and ~~sell 5,175,000 shares~~unrealized gain on securities available-for-sale of the Company’s common stock, $0.01 par value per share at a public offering price of $14.50 per share in an underwritten public offering (the “Offering”). In conjunction with the Offering, the Company granted the Underwriters a 30-day option to purchase up to an additional 776,250 shares of its common stock. On May 2, 2017, the Company and the Underwriters closed the Offering. The Underwriters exercised their option resulting in a new issuance in the aggregate of 5,951,250 shares of the Company’s common stock at a price to the public of $14.50 per share. The Company received net proceeds of $82.0 million after deductions for underwriting discounts, commissions, and expenses.$14.2 million.

For the year ended December 31, ~~2017,~~2020, the dividend payout ratio was ~~53.5%~~76.4%, compared to ~~48.4%~~40.0% for the year ended December 31, ~~2016.~~2019. The dividends paid in the fourth quarter of ~~2017~~2020 represented the Company's 7587th consecutive quarter of dividend payments. The Company's quarterly dividend distribution was ~~$0.09~~$0.115 per share ~~in 2017.~~for each quarter of 2020.

~~In 2017, 2016 and 2015, no shares of the Company's common stock were repurchased by the Company.~~ On ~~February~~December 4, ~~2016,~~2019, the Company's Board of Directors ~~authorized~~approved a stock repurchase program (the "2020 Stock Repurchase Plan") authorizing management to ~~acquire~~repurchase up to $10.0 million of ~~total outstanding shares of~~ the ~~Company's~~Company’s common stock over a period of twelve months ~~ending~~commencing on January ~~31, 2017. Repurchases may be made from time~~1, 2020. On March 9, 2020, the Board of Directors approved an increase in the repurchase amount of $10.0 million bringing the total authorized amount to time depending on market conditions and other factors, and will be conducted through open market or private transactions, through block trades, and pursuant to any trading plan that may be adopted in accordance with$20.0 million. Effective March 24, 2020, the ~~Securities and Exchange Commission Rule 10b5-1. There is no guarantee as to~~Company suspended the ~~exact number~~2020 Stock Repurchase Plan. On October 28, 2020, the Board of ~~shares, if any, to be repurchased by~~Directors authorized the ~~Company.~~resumption of the 2020 Stock Repurchase Plan. As of December 31, ~~2017, no~~2020, the Company repurchased 1,715,730 shares at a weighted average price of ~~stock were repurchased under the stock repurchase program.~~

$11.66.

Stockholders' equity represented ~~11.86%~~10.53% of total assets as of December 31, ~~2017~~2020 and ~~10.80%~~12.04% of total assets as of December 31, ~~2016.~~2019. Tangible stockholders' equity (total stockholders' equity less goodwill and identified intangible assets, net) represented ~~9.94%~~8.86% of tangible assets (total assets less goodwill and identified intangible assets, net) as of December 31, ~~2017~~2020 and ~~8.73%~~10.15% as of December 31, ~~2016.~~2019.

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Results of Operations

The primary drivers of the Company's net income are net interest income, which is strongly affected by the net yield on and growth of interest-earning assets and liabilities ("net interest margin"), the quality of the Company's assets, its levels of non-interest income and non-interest expense, and its tax provision.

The Company's net interest income represents the difference between interest income earned on its investments, loans and leases, and its cost of funds. Interest income is dependent on the amount of interest-earning assets outstanding during the period and the yield earned thereon. Cost of funds is a function of the average amount of deposits and borrowed money outstanding during the year and the interest rates paid thereon. The net interest margin is calculated by dividing net interest income by average interest-earning assets. Net interest spread is the difference between the average rate earned on interest-earning assets and the average rate paid on interest-bearing liabilities. The increases or decreases, as applicable, in the components of interest income and interest expense, expressed in terms of fluctuation in average volume and rate, are summarized under "Rate/Volume Analysis" below. Information as to the components of interest income, interest expense and average rates is provided under "Average Balances, Net Interest Income, Interest-Rate Spread and Net Interest Margin" below.

Because the Company's assets and liabilities are not identical in duration and in repricing dates, the differential between the two is vulnerable to changes in market interest rates as well as the overall shape of the yield curve. These vulnerabilities are inherent to the business of banking and are commonly referred to as "interest-rate risk." How interest-rate risk is measured and, once measured, how much interest-rate risk is taken are based on numerous assumptions and other subjective judgments. See the discussion in the "Measuring Interest-Rate Risk" section of Item 7A, "Quantitative and Qualitative Disclosures about Market Risk" below.

The quality of the Company's assets also influences its earnings. Loans and leases that are not paid on a timely basis and exhibit other weaknesses can result in the loss of principal and/or interest income. Additionally, the Company must make timely provisions to the allowance for loan and lease losses based on estimates of probable losses inherent in the loan and lease portfolio. These additions, which are charged against earnings, are necessarily greater when greater probable losses are expected. Further, the Company incurs expenses as a result of resolving troubled assets. These variables reflect the "credit risk" that the Company takes on in the ordinary course of business and are further discussed under "Financial Condition—Asset Quality" above.

Average Balances, Net Interest Income, Interest-Rate Spread and Net Interest Margin

The following table sets forth information about the Company's average balances, interest income and interest rates earned on average interest-earning assets, interest expense and interest rates paid on average interest-bearing liabilities, interest-rate spread and net interest margin for the years ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015.~~2018. Average balances are derived from daily average balances and yields include fees, costs and purchase-accounting-related premiums and discounts which are considered adjustments to coupon yields in accordance with GAAP. Certain amounts previously reported have been reclassified to conform to the current presentation.

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	Year Ended December 31,																						Year Ended December 31,
	2017							2016							2015								2020						2019						2018
	Average Balance			Interest (1)		Average Yield/ Cost		Average Balance			Interest (1)		Average Yield/ Cost		Average Balance			Interest (1)		Average Yield/ Cost			Average Balance		Interest (1)		Average Yield/ Cost		Average Balance		Interest (1)		Average Yield/ Cost		Average Balance		Interest (1)		Average Yield/ Cost
	(Dollars in Thousands)																						(Dollars in Thousands)
Assets:																						Assets:
Interest-earning assets:																						Interest-earning assets:
Debt securities	$	634,930		$	12,964	2.04	%	$	605,097		$	12,055	1.99	%	$	583,921		$	11,521	1.97	%	Debt securities	$	750,689	$	13,823	1.84	%	$	585,360	$	12,483	2.13	%	$	653,652	$	14,174	2.17	%
Marketable and restricted equity securities	65,992			3,065		4.64	%	66,738			3,017		4.52	%	73,808			2,793		3.78	%	Marketable and restricted equity securities	61,873		2,862		4.63	%	59,751		3,516		5.88	%	67,640		3,973		5.88	%
Short-term investments	40,847			442		1.08	%	54,205			242		0.45	%	56,520			128		0.23	%	Short-term investments	186,617		413		0.22	%	71,090		1,523		2.14	%	38,437		700		1.82	%
Total investments	741,769			16,471		2.22	%	726,040			15,314		2.11	%	714,249			14,442		2.02	%	Total investments	999,179		17,098		1.71	%	716,201		17,522		2.45	%	759,729		18,847		2.48	%
Commercial real estate loans ⁽²⁾	2,968,673			123,000		4.09	%	2,811,487			113,910		3.99	%	2,529,566			106,447		4.21	%	Commercial real estate loans (2)	3,781,201		148,438		3.86	%	3,492,848		164,082		4.63	%	3,235,101		146,147		4.46	%
Commercial loans ⁽²⁾	739,369			30,904		4.13	%	695,057			27,509		3.90	%	636,084			26,590		4.13	%	Commercial loans (2)	1,140,699		41,391		3.57	%	817,347		39,839		4.81	%	813,815		37,616		4.56	%
Equipment financing ⁽²⁾	830,755			55,164		6.64	%	748,626			48,217		6.44	%	650,376			44,468		6.84	%	Equipment financing (2)	1,074,561		75,563		7.03	%	1,012,698		74,066		7.31	%	919,047		63,968		6.96	%
Residential mortgage loans ⁽²⁾	645,925			23,593		3.65	%	624,994			22,217		3.55	%	600,072			21,455		3.58	%	Residential mortgage loans (2)	810,855		31,392		3.87	%	783,556		32,926		4.20	%	746,372		29,773		3.99	%
Other consumer loans ⁽²⁾	366,713			15,328		4.18	%	353,600			13,864		3.91	%	395,073			14,478		3.66	%	Other consumer loans (2)	402,672		13,255		3.28	%	414,730		19,835		4.78	%	401,425		18,216		4.53	%
Total loans and leases	5,551,435			247,989		4.47	%	5,233,764			225,717		4.31	%	4,811,171			213,438		4.44	%	Total loans and leases	7,209,988		310,039		4.30	%	6,521,179		330,748		5.07	%	6,115,760		295,720		4.84	%
Total interest-earning assets	6,293,204			264,460		4.20	%	5,959,804			241,031		4.04	%	5,525,420			227,880		4.12	%	Total interest-earning assets	8,209,167		327,137		3.99	%	7,237,380		348,270		4.81	%	6,875,489		314,567		4.58	%
Allowance for loan and lease losses	(62,972		)					(58,071		)					(55,950		)					Allowance for loan and lease losses	(105,824)						(58,871)						(59,154)
Non-interest-earning assets	377,002							377,989							371,279							Non-interest-earning assets	580,226						476,125						406,746
Total assets	$	6,607,234						$	6,279,722						$	5,840,749						Total assets	$	8,683,569					$	7,654,634					$	7,223,081
Liabilities and Stockholders' Equity:																						Liabilities and Stockholders' Equity:
Interest-bearing liabilities:																						Interest-bearing liabilities:
Interest-bearing deposits:																						Interest-bearing deposits:
NOW accounts	$	322,681		225		0.07	%	$	294,318		209		0.07	%	$	249,204		179		0.07	%	NOW accounts	$	408,374	484		0.12	%	$	339,275	436		0.13	%	$	340,194	283		0.08	%
Savings accounts	620,757			1,297		0.21	%	578,855			1,322		0.23	%	532,496			1,094		0.21	%	Savings accounts	670,217		1,503		0.22	%	608,022		2,900		0.48	%	618,674		1,804		0.29	%
Money market accounts	1,761,112			8,863		0.50	%	1,670,609			7,549		0.45	%	1,560,437			6,935		0.44	%	Money market accounts	1,817,085		9,519		0.52	%	1,682,676		21,206		1.26	%	1,715,057		15,369		0.90	%
Certificate of deposit	1,116,909			12,903		1.16	%	1,102,110			10,990		1.00	%	1,045,328			9,272		0.89	%
Certificate of deposit accounts																						Certificate of deposit accounts	1,577,104		30,355		1.92	%	1,611,389		36,326		2.25	%	1,191,970		19,017		1.60	%
Brokered deposit accounts																						Brokered deposit accounts	512,803		6,565		1.28	%	344,961		8,747		2.54	%	305,503		5,505		1.80	%
Total interest-bearing deposits ⁽³⁾	3,821,459			23,288		0.61	%	3,645,892			20,070		0.55	%	3,387,465			17,480		0.52	%	Total interest-bearing deposits (3)	4,985,583		48,426		0.97	%	4,586,323		69,615		1.52	%	4,171,398		41,978		1.01	%
Advances from the FHLBB	884,266			11,330		1.26	%	879,650			10,760		1.20	%	840,123			9,950		1.17	%	Advances from the FHLBB	859,389		12,842		1.47	%	757,598		18,701		2.43	%	946,017		18,650		1.94	%
Subordinated debentures and notes	83,186			5,081		6.11	%	83,017			5,038		6.07	%	82,846			5,001		6.04	%	Subordinated debentures and notes	83,667		5,038		6.02	%	83,511		5,206		6.23	%	83,350		5,181		6.22	%
Other borrowed funds	45,908			170		0.37	%	43,533			116		0.27	%	34,468			114		0.33	%	Other borrowed funds	90,587		348		0.38	%	79,276		804		1.01	%	46,079		385		0.83	%
Total borrowed funds	1,013,360			16,581		1.61	%	1,006,200			15,914		1.56	%	957,437			15,065		1.55	%	Total borrowed funds	1,033,643		18,228		1.73	%	920,385		24,711		2.65	%	1,075,446		24,216		2.22	%
Total interest-bearing liabilities	4,834,819			39,869		0.82	%	4,652,092			35,984		0.77	%	4,344,902			32,545		0.75	%	Total interest-bearing liabilities	6,019,226		66,654		1.11	%	5,506,708		94,326		1.71	%	5,246,844		66,194		1.26	%
Non-interest-bearing liabilities:																						Non-interest-bearing liabilities:
Non-interest-bearing demand checking accounts ⁽³⁾	912,743							849,672							770,045							Non-interest-bearing demand checking accounts (3)	1,451,556						1,070,859						997,179
Other non-interest-bearing liabilities	78,965							82,073							62,914							Other non-interest-bearing liabilities	276,712						159,690						96,560
Total liabilities	5,826,527							5,583,837							5,177,861							Total liabilities	7,747,494						6,737,257						6,340,583
Brookline Bancorp, Inc. stockholders' equity	773,244							689,556							657,841							Brookline Bancorp, Inc. stockholders' equity	936,075						917,286						873,388
Noncontrolling interest in subsidiary	7,463							6,329							5,047							Noncontrolling interest in subsidiary	—						91						9,110
Total liabilities and equity	$	6,607,234						$	6,279,722						$	5,840,749						Total liabilities and equity	$	8,683,569					$	7,654,634					$	7,223,081
Net interest income (tax-equivalent basis) / Interest-rate spread ⁽⁴⁾				224,591		3.38	%				205,047		3.27	%				195,335		3.37	%	Net interest income (tax-equivalent basis) / Interest-rate spread (4)			260,483		2.88	%			253,944		3.10	%			248,373		3.32	%
Less adjustment of tax-exempt income				1,410							1,383							970				Less adjustment of tax-exempt income			320						644						674
Net interest income				$	223,181						$	203,664						$	194,365			Net interest income			$	260,163					$	253,300					$	247,699
Net interest margin ⁽⁵⁾						3.57	%						3.44	%						3.54	%	Net interest margin (5)					3.17	%					3.51	%					3.61	%

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income


	Year Ended December 31,
	2020		2019		2018
	(In Thousands)
Net income before noncontrolling interest in subsidiary	$	47,635	$	87,760	$	86,551

Other comprehensive loss, net of taxes:

Investment securities available-for-sale:
Unrealized securities holding gains (losses)	21,683		15,290		(4,444)

Income tax (expense) benefit	(4,770)		(3,379)		980
Net unrealized securities holding gains (losses) before reclassification adjustments	16,913		11,911		(3,464)
Less reclassification adjustments for securities gains included in net income:
Gain on sales of securities, net	3,245		0		173
Income tax expense	(715)		0		(38)
Net reclassification adjustments for securities gains included in net income	2,530		0		135
Net unrealized securities holding gains	14,383		11,911		(3,599)

Cash flow hedges:
Net change in fair value of Cash flow hedges	7		0		0
Income tax benefit	0		0		0
Net change in fair value of Cash flow hedges	7		0		0

Postretirement benefits:
Adjustment of accumulated obligation for postretirement benefits	(248)		(227)		121
Income tax benefit (expense)	65		59		(32)
Net adjustment of accumulated obligation for postretirement benefits	(183)		(168)		89

Other comprehensive gain, net of taxes	14,207		11,743		(3,510)

Comprehensive income	61,842		99,503		83,041
Net income attributable to noncontrolling interest in subsidiary	0		43		3,489
Comprehensive income attributable to Brookline Bancorp, Inc.	$	61,842	$	99,460	$	79,552

See accompanying notes to consolidated financial statements.

F-8

Year Ended December 31,
2017 2016 2015
(In Thousands)
Net income before noncontrolling interest in subsidiary $ 53,619
$ 55,224
$ 52,368

Other comprehensive loss, net of taxes:

Investment securities available-for-sale:
Unrealized securities holding losses (1,274 ) (2,167 ) (1,573 )
Income tax benefit 457
781
479
Net unrealized securities holding losses before reclassification adjustments (817 ) (1,386 ) (1,094 )

Postretirement benefits:
Adjustment of accumulated obligation for postretirement benefits (422 ) 69
353
Income tax benefit (expense) 170
(25 ) (113 )
Net adjustment of accumulated obligation for postretirement benefits (252 ) 44
240

Other comprehensive loss, net of taxes (1,069 ) (1,342 ) (854 )

Comprehensive income 52,550
53,882
51,514
Net income attributable to noncontrolling interest in subsidiary 3,101
2,862
2,586
Comprehensive income attributable to Brookline Bancorp, Inc. $ 49,449
$ 51,020
$ 48,928

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity

Year Ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Unallocated Common Stock Held by ESOP		Total Brookline Bancorp, Inc. Stockholders' Equity		Noncontrolling Interest in Subsidiary		Total Stockholders' Equity
	(In Thousands)
Balance at December 31, 2019	$	852	$	736,601	$	265,376	$	2,283	$	(59,073)	$	(433)	$	945,606	$	0	$	945,606

Net income attributable to Brookline Bancorp, Inc.	—		—		47,635		—		—		—		47,635		—		47,635



Other comprehensive income	—		—		—		14,207		—		—		14,207		—		14,207
Common stock dividends of $0.46 per share	—		—		(36,396)		—		—		—		(36,396)		—		(36,396)


Restricted stock awards, net of awards surrendered	—		(2,105)		—		—		1,730		—		(375)		—		(375)
Compensation under recognition and retention plan	—		2,520		(200)		—		—		—		2,320		—		2,320
Treasury stock, repurchase shares	—		—		—		—		(20,000)		—		(20,000)		—		(20,000)
Common stock held by ESOP committed to be released (28,434 shares)	—		162		—		—		—		142		304		—		304
Adoption of ASU 2016-13 (CECL)	—		—		(11,523)		—		—		—		(11,523)		—		(11,523)
Balance at December 31, 2020	$	852	$	737,178	$	264,892	$	16,490	$	(77,343)	$	(291)	$	941,778	$	0	$	941,778

See accompanying notes to consolidated financial statements.

F-9

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Treasury
Stock

Unallocated
Common Stock
Held by ESOP

Total Brookline
Bancorp, Inc.
Stockholders'
Equity

Noncontrolling
Interest in
Subsidiary

Total Stockholders'
Equity
(In Thousands)
Balance at December 31, 2016 $ 757
$ 616,734
$ 136,671
$ (3,818 ) $ (53,837 ) $ (963 ) $ 695,544
$ 7,205
$ 702,749
Reclassification due to the adoption of ASU No. 2018-02 —
—
1,063
(1,063 ) —
—
—
—
—
Net income attributable to Brookline Bancorp, Inc. —
—
50,518
—
—
—
50,518
—
50,518
Net income attributable to noncontrolling interest in subsidiary —
—
—
—
—
—
—
3,101
3,101
Issuance of common stock 60
81,883
—
—
—
—
81,943
—
81,943
Issuance of noncontrolling units —
—
—
—
—
—
—
118
118
Other comprehensive income —
—
—
(1,069 ) —
—
(1,069 ) —
(1,069 )
Common stock dividends of $0.36 per share —
—
(27,035 ) —
—
—
(27,035 ) —
(27,035 )
Dividend distribution to owners of noncontrolling interest in subsidiary —
—
—
—
—
—
—
(1,671 ) (1,671 )
Compensation under recognition and retention plan —
1,045
—
—
2,383
—
3,428
—
3,428
Common stock held by ESOP committed to be released (34,356 shares) —
314
—
—
—
187
501
—
501
Balance at December 31, 2017 $ 817
$ 699,976
$ 161,217
$ (5,950 ) $ (51,454 ) $ (776 ) $ 803,830
$ 8,753
$ 812,583

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Continued)

Year Ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)		Treasury Stock		Unallocated Common Stock Held by ESOP		Total Brookline Bancorp, Inc. Stockholders' Equity		Noncontrolling Interest in Subsidiary		Total Stockholders' Equity
	(In Thousands)
Balance at December 31, 2018	$	852	$	755,629	$	212,838	$	(9,460)	$	(59,120)	$	(599)	$	900,140	$	10,479	$	910,619
Reclassification due to the adoption of ASU No. 2018-02	—		—		—		—		—		—		—		—		—
Net income attributable to Brookline Bancorp, Inc.	—		—		87,717		—		—		—		87,717		—		87,717
Net income attributable to noncontrolling interest in subsidiary	—		—		—		—		—		—		—		43		43
Common stock issued for acquisition	—		—		—		—		—		—		—		—		—
Issuance of non controlling interest	—		—		—		—		—		—		—		—		—
Other comprehensive income	—		—		—		11,743		—		—		11,743		—		11,743
Common stock dividends of $0.44 per share	—		—		(35,110)		—		—		—		(35,110)		—		(35,110)
Dividend distribution to owners of noncontrolling interest in subsidiary	—		(930)		—		—		—		—		(930)		0		(930)
Redemption of noncontrolling interest in subsidiary	—		(18,470)		—		—		—		—		(18,470)		(10,522)		(28,992)
Compensation under recognition and retention plans	—		—		—		—		—		—		—		—		—
Restricted stock awards, net of awards surrendered	—		80		(69)		—		1,918		—		1,929		—		1,929
Treasury stock, repurchase shares	—		—		—		—		(1,871)		—		(1,871)		—		(1,871)
Common stock held by ESOP committed to be released (30,402 shares)	—		292		—		—		—		166		458		—		458
Balance at December 31, 2019	$	852	$	736,601	$	265,376	$	2,283	$	(59,073)	$	(433)	$	945,606	$	0	$	945,606

See accompanying notes to consolidated financial statements.

F-10

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Treasury
Stock

Unallocated
Common Stock
Held by ESOP

Total Brookline
Bancorp, Inc.
Stockholders'
Equity

Noncontrolling
Interest in
Subsidiary

Total Stockholders'
Equity
(In Thousands)
Balance at December 31, 2015 $ 757
$ 616,899
$ 109,675
$ (2,476 ) $ (56,208 ) $ (1,162 ) $ 667,485
$ 6,001
$ 673,486
Net income attributable to Brookline Bancorp, Inc. —
—
52,362
—
—
—
52,362
—
52,362
Net income attributable to noncontrolling interest in subsidiary —
—
—
—
—
—
—
2,862
2,862
Issuance of non-controlling interest —
—
—
—
—
—
—
76
76
Other comprehensive loss —
—

(1,342 ) —
—
(1,342 ) —
(1,342 )
Common stock dividends of $0.36 per share —
—
(25,366 ) —

—
(25,366 ) —
(25,366 )
Dividend distribution to owners of noncontrolling interest in subsidiary —
—
—
—
—
—
—
(1,734 ) (1,734 )
Compensation under recognition and retention plans —
(361 ) —
—
2,371
—
2,010
—
2,010
Common stock held by ESOP committed to be released (36,372 shares) —
196
—
—
—
199
395
—
395
Balance at December 31, 2016 $ 757
$ 616,734
$ 136,671
$ (3,818 ) $ (53,837 ) $ (963 ) $ 695,544
$ 7,205
$ 702,749

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders' Equity (Continued)

Year Ended December 31, ~~2017, 2016~~2020, 2019 and ~~2015~~2018


	Common Stock		Additional Paid-in Capital		Retained Earnings		Accumulated Other Comprehensive Loss		Treasury Stock		Unallocated Common Stock Held by ESOP		Total Brookline Bancorp, Inc. Stockholders' Equity		Noncontrolling Interest in Subsidiary		Total Stockholders' Equity
	(In Thousands)
Balance at December 31, 2017	$	817	$	699,976	$	161,217	$	(5,950)	$	(51,454)	$	(776)	$	803,830	$	8,753	$	812,583
Reclassification due to the adoption of ASU No. 2018-02	—		—		—		—		—		—		—		—		—
Net income attributable to Brookline Bancorp, Inc.	—		—		83,062		—		—		—		83,062		—		83,062
Net income attributable to noncontrolling interest in subsidiary	—		—		—		—		—		—		—		3,489		3,489
Common stock issued for acquisition	35		55,148		—		—		—		—		55,183		—		55,183
Issuance of non controlling interest	—		—		—		—		—		—		—		130		130
Other comprehensive loss	—		—		—		(3,510)		—		—		(3,510)		—		(3,510)
Common stock dividends of $0.395 per share	—		—		(31,441)		—		—		—		(31,441)		—		(31,441)
Dividend distribution to owners of noncontrolling interest in subsidiary	—		—		—		—		—		—		—		(1,893)		(1,893)
Compensation under recognition and retention plans	—		—		—		—		—		—		—		—		—
Restricted stock awards issued, net of awards surrendered	—		139		—		—		2,334		—		2,473		—		2,473
Treasury stock, repurchase shares	—		—		—		��		(10,000)		—		(10,000)		—		(10,000)
Common stock held by ESOP committed to be released (32,382 shares)	—		366		—		—		—		177		543		—		543
Balance at December 31, 2018	$	852	$	755,629	$	212,838	$	(9,460)	$	(59,120)	$	(599)	$	900,140	$	10,479	$	910,619

See accompanying notes to consolidated financial statements.

F-11

Common
Stock

Additional
Paid-in
Capital

Retained
Earnings

Accumulated
Other
Comprehensive
Loss

Treasury
Stock

Unallocated
Common Stock
Held by ESOP

Total Brookline
Bancorp, Inc.
Stockholders'
Equity

Noncontrolling
Interest in
Subsidiary

Total Stockholders'
Equity
(In Thousands)
Balance at December 31, 2014 $ 757
$ 617,475
$ 84,860
$ (1,622 ) $ (58,282 ) $ (1,370 ) $ 641,818
$ 4,787
$ 646,605
Net income attributable to Brookline Bancorp, Inc. —
—
49,782
—
—
—
49,782
—
49,782
Net income attributable to noncontrolling interest in subsidiary —
—
—
—
—
—
—
2,586
2,586
Issuance of non-controlling interest —
—
—
—
—
—
—
65
65
Other comprehensive income —
—
—
(854 ) —
—
(854 ) —
(854 )
Common stock dividends of $0.355 per share —
—
(24,967 ) —
—
—
(24,967 ) —
(24,967 )
Dividend distribution to owners of noncontrolling interest in subsidiary —
—
—
—
—
—
—
(1,437 ) (1,437 )
Compensation under recognition and retention plans —
(763 ) —
—
2,074
—
1,311
—
1,311
Common stock held by ESOP committed to be released (38,316 shares) —
187
—
—
—
208
395
—
395
Balance at December 31, 2015 $ 757
$ 616,899
$ 109,675
$ (2,476 ) $ (56,208 ) $ (1,162 ) $ 667,485
$ 6,001
$ 673,486

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows


	Year Ended December 31,
	2020		2019		2018
	(In Thousands)
Cash flows from operating activities:
Net income attributable to Brookline Bancorp, Inc.	$	47,635	$	87,717	$	83,062
Adjustments to reconcile net income to net cash provided from operating activities:
Net income attributable to noncontrolling interest in subsidiary	0		43		3,489
Provision for credit losses	61,886		9,583		4,951
Origination of loans and leases held-for-sale	0		(15,361)		(25,370)
Proceeds from sales of loans and leases held-for-sale, net	0		19,930		26,519
Deferred income tax benefit	(19,102)		(2)		(5,453)
Depreciation of premises and equipment	5,486		6,861		7,382
Amortization of investment securities premiums and discounts, net	2,809		1,810		2,200
Amortization of deferred loan and lease origination costs, net	7,316		7,045		6,971
Amortization of identified intangible assets	1,271		1,663		2,080
Amortization of debt issuance costs	101		100		100
(Accretion) amortization of acquisition fair value adjustments, net	(420)		(809)		354
Gain on investment securities, net	(1,970)		(508)		(227)
Gain on sales of loans and leases held-for-sale	(1,118)		(1,709)		(1,883)

Loss (gain) on sales of OREO and other repossessed assets, net	0		108		0

Write-down of OREO and other repossessed assets	1,036		903		1,234
Compensation under recognition and retention plans	2,361		2,683		2,546
ESOP shares committed to be released	304		458		543
Net change in:
Cash surrender value of bank-owned life insurance	(1,007)		(1,030)		(1,039)
Equity securities held-for-trading	1,781		1,215		(5,371)
Other assets	(77,778)		(63,235)		(10,855)
Accrued expenses and other liabilities	81,897		45,254		31,796
Net cash provided from operating activities	112,488		102,719		123,029

Cash flows from investing activities:
Proceeds from sales of investment securities available-for-sale	141,448		0		22,210
Proceeds from maturities, calls, and principal repayments of investment securities available-for-sale	214,571		68,165		82,896
Purchases of investment securities available-for-sale	(503,495)		(50,400)		(73,852)
Proceeds from maturities, calls, and principal repayments of investment securities held to maturity	6,302		28,858		3,290
Purchases of investment securities held-to-maturity	0		(1,430)		(8,915)

Proceeds from redemption/sales of restricted equity securities	33,927		20,857		12,110
Purchase of restricted equity securities	(29,895)		(12,924)		(13,262)
Proceeds from sales of loans and leases held-for-investment, net	7,370		13,860		7,294
Net increase in loans and leases	(567,284)		(467,493)		(593,968)
Acquisitions, net of cash and cash equivalents acquired	0		0		(24,659)
					(Continued)

See accompanying notes to consolidated financial statements.

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Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Year Ended December 31,
2017 2016 2015
(In Thousands)
Cash flows from operating activities:
Net income attributable to Brookline Bancorp, Inc. $ 50,518
$ 52,362
$ 49,782
Adjustments to reconcile net income to net cash provided from operating activities:
Net income attributable to noncontrolling interest in
subsidiary
3,101
2,862
2,586
Provision for credit losses 18,988
10,353
7,451
Origination of loans and leases held-for-sale (27,425 ) (56,080 ) (74,841 )
Proceeds from sales of loans and leases held-for-sale, net 32,073
55,636
64,398
Deferred income tax expense 10,798
2,322
1,239
Depreciation of premises and equipment 7,232
7,080
7,074
Amortization of investment securities premiums and discounts, net 2,042
2,158
1,841
Amortization of deferred loan and lease origination costs, net 6,695
5,883
4,775
Amortization of identified intangible assets 2,089
2,500
2,911
Amortization of debt issuance costs 100
101
100
Accretion of acquisition fair value adjustments, net (1,583 ) (3,960 ) (7,242 )
Gain on sales of investment securities, net (11,393 ) —
—
Gain on sales of loans and leases held-for-sale (2,644 ) (3,256 ) (2,208 )
Loss on sales of OREO and other repossessed assets, net (79 ) (84 ) 102
Write-down of OREO and other repossessed assets 458
190
229
Compensation under recognition and retention plans 2,308
1,844
1,276
ESOP shares committed to be released 501
395
395
Net change in:
Cash surrender value of bank-owned life insurance (1,041 ) (1,050 ) (1,049 )
Other assets (2,413 ) (287 ) (5,135 )
Accrued expenses and other liabilities (5,378 ) (1,039 ) 10,920
Net cash provided from operating activities 84,947
77,930
64,604

Cash flows from investing activities:
Proceeds from maturities, calls, and principal repayments of investment securities available-for-sale 71,611
100,957
97,771
Purchases of investment securities available-for-sale (90,971 ) (115,403 ) (63,615 )
Proceeds from maturities, calls, and principal repayments of investment securities held to maturity 3,817
42,492
9,579
Purchases of investment securities held-to-maturity (26,873 ) (36,167 ) (102,847 )
Proceeds from redemption/sales of restricted equity securities 24,462
5,623
9,924
Purchase of restricted equity securities (7,927 ) (4,017 ) (1,237 )
Proceeds from sales of loans and leases held-for-investment, net 28,608
45,979
273,688
Net increase in loans and leases (378,906 ) (465,527 ) (457,460 )
Purchase of premises and equipment, net (11,557 ) (5,262 ) (4,775 )
Proceeds from sales of OREO and other repossessed assets 3,762
3,530
7,152
Net cash used for investing activities (383,974 ) (427,795 ) (231,820 )
(Continued)


	Year Ended December 31,
	2020		2019		2018
	(In Thousands)
Purchase of premises and equipment, net	(2,909)		(4,997)		(3,352)
Proceeds from sales of OREO and other repossessed assets	4,436		6,482		2,186

Net cash used for investing activities	(695,529)		(399,022)		(588,022)

Cash flows from financing activities:
Increase in demand checking, NOW, savings and money market accounts	1,018,359		143,551		1,006
Increase in certificates of deposit	62,603		232,911		580,878
Proceeds from FHLBB advances	2,987,656		4,029,662		6,607,745
Repayment of FHLBB advances	(3,097,276)		(4,055,568)		(6,713,279)



Increase in other borrowed funds, net	26,963		7,955		5,095
Decrease in mortgagors' escrow accounts, net	(1,331)		(194)		(260)
Proceeds from exercise of stock options	0		0		490
Repurchases of common stock	(20,000)		(1,871)		(10,000)

Common stock issued for acquisition	0		0		55,182
Payment of dividends on common stock	(36,396)		(35,110)		(31,441)
Payment of income taxes for shares withheld in share based activity	(410)		(46)		(81)
Redemption of noncontrolling interest in subsidiary	0		(35,851)		0
Proceeds from issuance of noncontrolling units	0		0		130
Payment of dividends to owners of noncontrolling interest in subsidiary	0		(930)		(1,893)

Net cash provided from financing activities	940,168		284,509		493,572
Net increase (decrease) in cash and cash equivalents	357,127		(11,794)		28,579
Cash and cash equivalents at beginning of year	77,790		89,584		61,005
Cash and cash equivalents at end of year	$	434,917	$	77,790	$	89,584

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest on deposits, borrowed funds and subordinated debt	$	68,510	$	94,533	$	65,182
Income taxes	29,392		27,345		21,129
Non-cash investing activities:

Transfer from loans to other real estate owned	9,356		6,105		3,020
Acquisition of First Commons Bank, N.A.:
Fair value of assets acquired, net of cash and cash equivalents acquired	$	0	$	0	$	292,025
Fair value of liabilities assumed	0		0		278,988

See accompanying notes to consolidated financial statements.

F-13

BROOKLINE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Continued)
Year Ended December 31,
2017 2016 2015
(In Thousands)
Cash flows from financing activities:
Increase in demand checking, NOW, savings and money market accounts 93,819
351,908
206,748
(Decrease) increase in certificates of deposit 166,448
(46,752 ) 141,338
Proceeds from FHLBB advances 4,685,706
5,905,511
4,018,000
Repayment of FHLBB advances (4,705,543 ) (5,854,019 ) (4,157,392 )
Increase (decrease) in other borrowed funds, net (2,568 ) 11,980
(1,388 )
Increase (decrease) in mortgagors' escrow accounts, net 41
129
(985 )
Proceeds from exercise of stock options 1,469
300
—
Proceeds from issuance of common stock 81,943
—
—
Payment of dividends on common stock (27,035 ) (25,366 ) (24,967 )
Payment of income taxes for shares withheld in share based activity (352 ) —
—
Proceeds from issuance of noncontrolling units 118
76
65
Payment of dividends to owners of noncontrolling interest in subsidiary (1,671 ) (1,734 ) (1,437 )
Net cash provided from financing activities 292,375
342,033
179,982
Net (decrease) increase in cash and cash equivalents (6,652 ) (7,832 ) 12,766
Cash and cash equivalents at beginning of year 67,657
75,489
62,723
Cash and cash equivalents at end of year $ 61,005
$ 67,657
$ 75,489

Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest on deposits, borrowed funds and subordinated debt $ 40,785
$ 38,620
$ 35,522
Income taxes 34,026
29,770
26,694
Non-cash investing activities:
Transfer from loans and leases to loan and leases held-for-sale $ 7,500
$ 2,500
$ —
Transfer from loans to other real estate owned 7,161
3,692
7,370

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

~~December 31, 2017, 2016 and 2015~~

(1) Basis of Presentation

Overview

Brookline Bancorp, Inc. (the "Company") is a bank holding company (within the meaning of the Bank Holding Company Act of 1956, as amended) and the parent of Brookline Bank, a Massachusetts-chartered ~~savings bank;~~trust company and Bank Rhode Island ("BankRI"), a Rhode Island-chartered financial ~~institution; and First Ipswich Bank ("First Ipswich"), a Massachusetts-chartered trust company~~institution (collectively referred to as the "Banks"). The Banks are all members of the Federal Reserve System. The Company is also the parent of Brookline Securities Corp. ("BSC"). The Company's primary business is to provide commercial, business and retail banking services to its corporate, municipal and retail customers through the Banks and its ~~banks and~~ non-bank subsidiaries. Until February 14, 2020 (the "Merger Closing Date"), the Company was also the parent of First Ipswich Bank ("First Ipswich"), a Massachusetts-chartered trust company. Effective upon the Merger Closing Date, First Ipswich was merged with and into Brookline Bank, with Brookline as the surviving institution.

Brookline Bank, which includes its wholly-owned subsidiaries ~~BBS Investment Corp.,~~ Longwood Securities Corp. ~~and its 84.2%-owned subsidiary,~~, Eastern Funding LLC ("Eastern Funding"), and First Ipswich Insurance Agency, operates 2530 full-service banking offices in the greater Boston metropolitan ~~area.~~area with 2 additional lending offices. BankRI, which includes its wholly-owned subsidiaries, Acorn Insurance Agency, BRI Realty Corp., Macrolease Corporation ("Macrolease"), BRI Investment Corp. and its wholly-owned subsidiary, BRI MSC Corp., operates 20 full-service banking offices in the greater Providence, ~~area,~~ Rhode Island area. First Ipswich, which includes its wholly-owned subsidiaries, First Ipswich Insurance Agency and First Ipswich Securities II Corp., operates six full-service banking offices on the north shore of eastern Massachusetts.

The Company's activities include acceptance of commercial, municipal and retail deposits, origination of mortgage loans on commercial and residential real estate located principally in ~~Massachusetts and Rhode Island,~~all New England states, origination of commercial loans and leases to small- and mid-sized businesses, investment in debt and equity securities, and the offering of cash management and investment advisory services. The Company also provides specialty equipment financing through its subsidiaries Eastern Funding, which is based in New York City, New York, and Macrolease, which is based in Plainview, New York.

The Company and the Banks are supervised, examined and regulated by the Board of Governors of the Federal Reserve System ("FRB"). As a Massachusetts-chartered ~~savings bank and~~ trust company, Brookline Bank ~~and First Ipswich, respectively, are~~is also subject to regulation under the laws of the Commonwealth of Massachusetts and the jurisdiction of the Massachusetts Division of Banks. As a Rhode Island-chartered financial institution, BankRI is subject to regulation under the laws of the State of Rhode Island and the jurisdiction of the Banking Division of the Rhode Island Department of Business Regulation.

The Federal Deposit Insurance Corporation ("FDIC") offers insurance coverage on all deposits up to $250,000 per depositor at each of the Banks. As FDIC-insured depository institutions, the Banks are also secondarily subject to supervision, examination and regulation by the FDIC. Additionally, as a Massachusetts-chartered savings bank, Brookline Bank is also insured by the Depositors Insurance Fund ("DIF"), a private industry-sponsored insurance company. The DIF insures savings bank deposits in excess of the FDIC insurance limits. As such, Brookline Bank offers 100% insurance on all deposits as a result of a combination of insurance from the FDIC and the DIF. Brookline Bank is required to file reports with the DIF.

Basis of Financial Statement Presentation

The Company's consolidated financial statements have been prepared in conformity with U.S. generally accepted accounting principles ("GAAP") as set forth by the Financial Accounting Standards Board ("FASB") in its Accounting Standards Codification and through the rules and interpretive releases of the Securities and Exchange Commission ("SEC") under the authority of federal securities laws.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany transactions and balances are eliminated in consolidation.

In preparing these consolidated financial statements, management is required to make significant estimates and assumptions that affect the reported amounts of assets, liabilities, income, expenses and disclosure of contingent assets and liabilities. Actual results could differ from those estimates based upon changing conditions, including economic conditions and future events. Material estimates that are particularly susceptible to significant ~~change~~changes in the near-term include the determination of the allowance for loan and lease losses, the determination of fair market values of assets and liabilities, including acquired loans, the review of goodwill and intangibles for impairment and the review of deferred tax assets for valuation allowance.

~~F-12~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

The judgments used by management in applying these ~~critical accounting policies~~significant estimates may be affected by a further and prolonged deterioration in the economic environment, which may result in changes to future financial results. For example, subsequent evaluations of the loan and lease portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for loan and lease losses in future periods, and the inability to collect outstanding principal may result in increased loan and lease losses.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Reclassification

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

Cash and Cash Equivalents

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

Investment Securities

Investment securities, other than those reported as short-term investments, are classified at the time of purchase as "available-for-sale," "held-to-maturity," or ~~"held-to-maturity.~~"held-for-trading." Classification is periodically re-evaluated for consistency with the Company's goals and objectives. Equity investments in the Federal Home Loan Bank of Boston ("FHLBB"), the Federal Reserve Bank of Boston and other restricted equities are discussed in more detail in Note 5, "Restricted Equity Securities."

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

Investment securities for which the Company has the positive intent and ability to hold to maturity are classified as held-to-maturity and carried at amortized cost. Those investment securities held for indefinite periods of time but not necessarily to maturity are classified as available-for-sale. Investment securities held for indefinite periods of time include investment securities that management intends to use as part of its asset/liability, liquidity, and/or capital management strategies and may be sold in response to changes in interest rates, maturities, asset/liability mix, liquidity needs, regulatory capital needs or other business factors. Investment securities available-for-sale are carried at estimated fair value, primarily obtained from a third-party pricing service, with unrealized gains and losses reported on an after-tax basis in stockholders' equity as accumulated other comprehensive income or loss. Investment securities expected to be held for very short term duration, used for hedging, or are marketable equity securities are typically designated held-for-trading. Held-for-trading securities are carried at estimated fair value principally based on market prices and dealer quotes received from third-party and nationally-recognized pricing services. Gains and losses for held-for-trading are reported on the income statement as gains on investment securities, net. As of December 31, ~~2017~~2020 and ~~2016,~~2019, the Company did not make any adjustments to the prices provided by the third-party pricing service.

Security transactions are recorded on the trade date. Realized gains and losses are determined using the specific identification method and are recorded in non-interest income. Interest and dividends on securities are recorded using the accrual method. Premiums and discounts on securities are amortized or accreted into interest income using the level-yield method over the remaining period to contractual maturity, adjusted for the effect of actual prepayments in the case of mortgage-backed securities ("MBSs") and collateralized mortgage obligations ("CMOs"). These estimates of prepayment assumptions are made based upon the actual performance of the underlying security, current interest rates, the general market consensus regarding changes in mortgage interest rates, the contractual repayment terms of the underlying loans, the priority rights of the investors to the cash flows from the mortgage securities and other economic conditions. When differences arise between anticipated prepayments and actual prepayments, the effective yield is recalculated to reflect actual payments to date and anticipated future payments. Unamortized premium or discount is adjusted to the amount that would have existed had the new effective yield been applied since purchase, with a corresponding charge or credit to interest income.

Management evaluates securities for other-than-temporary impairment ("OTTI") on a periodic basis. Factors considered in determining whether an impairment is OTTI include: (1) the length of time and the extent to which the fair value has been less than amortized cost, (2) projected future cash flows, (3) the financial condition and near-term prospects of the issuers, and (4) the intent and ability of the Company to hold the investment for a period of time sufficient to allow for any anticipated recovery in fair value. The Company records an OTTI loss in an amount equal to the entire difference between the fair value and amortized cost if: (1) the Company intends to sell an impaired investment security, (2) it is more likely than not that the Company will be required to sell the investment security before its amortized cost, or (3) for debt securities, the present value of expected future cash flows is not sufficient to recover the entire amortized cost basis. If an investment security is determined to be OTTI but the Company does not intend to sell the investment security, only the credit portion of the estimated loss is recognized in earnings, with the non credit portion of the loss recognized in other comprehensive income.

~~F-13~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Restricted Equity Securities

The Company invests in the stock of the FHLBB, the Federal Reserve Bank of Boston and a small amount of other restricted securities. No ready market exists for these stocks, and they have no quoted market values. The Banks, as members of the FHLBB, are required to maintain investments in the capital stock of the FHLBB equal to their membership base investments plus an activity-based investment determined according to the Banks' level of outstanding FHLBB advances. Federal Reserve Bank of Boston stock was purchased and is redeemable at par. The Company reviews for impairment of these securities based on the ultimate recoverability of the cost basis in the stock. As of December 31, ~~2017~~2020 and ~~2016, no~~2019, 0 impairment has been recognized.

F-15

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Loans

Originated Loans

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

Interest income on loans and leases originated for the portfolio is accrued on unpaid principal balances as earned. Loan origination fees and direct loan origination costs are deferred, and the net fee or cost is recognized in interest income using the interest method. Deferred amounts are recognized for fixed-rate loans over the contractual life of the loans and for adjustable-rate loans over the period of time required to adjust the contractual interest rate to a yield approximating a market rate at the origination date. If a loan is prepaid, the unamortized portion of the loan origination costs, including third party referral related costs not subject to rebate from the dealer, is charged to income.

Loans and Leases Held-for-Sale

Management identifies and designates certain newly originated loans and leases for sale to specific financial institutions, subject to the underwriting criteria of those financial institutions. These loans and leases are held for sale and are carried at the lower of cost or market as determined in the aggregate. Deferred loan fees and costs are included in the determination of the gain or loss on sale.

Acquired Loans

~~Acquired~~On a quarterly basis prior to the adoption of ASU 2016-13, management reforecasted the expected cash flows for acquired ASC 310-30 loans, ~~that have evidence~~and took into account prepayment speeds, probability of default and loss given defaults. Management compared cash flow projections per the reforecast to the original cash flow projections and determined whether any reduction in cash flow expectations were due to deterioration, or if the change in cash flow expectation was related to noncredit events. This cash flow analysis was used to evaluate the need for a provision for loan and lease losses and/or prospective yield adjustments for the acquired portfolio. Upon adoption of ~~credit quality since origination and for which it is probable, at acquisition, that~~ASU 2016-13, the Company ~~will be unable to collect all contractually required payments receivable~~did not reassess whether previously recognized purchased credit impaired loans accounted for under prior accounting guidance met the criteria of a purchased credit deteriorated ("PCD") loan as of the date of adoption. PCD loans are initially recorded at fair value ~~(as~~along with an ACL determined byusing the ~~present value~~same methodology as originated loans. The sum of ~~expected future cash flows) with no valuation allowance.~~the loan's purchase price and ACL becomes its initial amortized cost basis. The difference between the ~~undiscounted cash flows expected at acquisition~~initial amortized cost basis and the ~~recorded fair~~par value of the loan is a noncredit discount or ~~the “accretable yield,”~~premium, which is ~~recognized as~~amortized into interest income ~~on a level-yield method~~ over the life of the loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “nonaccretable difference,” are not recognized as a yield adjustment or as a loss accrual or a valuation allowance. Increases in expected cash flows subsequentSubsequent changes to the ~~initial investment~~ACL are ~~recognized prospectively~~recorded through ~~adjustment~~provision for credit losses. As of December 31, 2020, there were no PCD loans in the yield on the loan over its remaining life. Decreases in expected cash flows are recognized as impairment. Valuation allowances on these impaired loans reflect only losses incurred after the acquisition (meaning the present value of all cash flows expected at acquisition that ultimately are not to be received).Company's portfolios.

Nonperforming Loans

Nonaccrual Loans

Accrual of interest on loans generally is discontinued when contractual payment of principal or interest becomes past due 90 days or, if in management's judgment, reasonable doubt exists as to the full timely collection of interest. Exceptions may be made if the loan has matured and is in the process of renewal or is well-secured and in the process of collection. When a loan is placed on nonaccrual status, interest accruals cease and uncollected accrued interest is reversed and charged against current interest income. Interest payments on nonaccrual loans are generally applied to principal. If collection of the principal is reasonably assured, interest payments are recognized as income on the cash basis. Loans are generally returned to accrual status when principal and interest payments are current, full collectability of principal and interest is reasonably assured and a consistent record of at least six consecutive months of performance has been achieved.

~~F-14~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Impaired Loans

A loan is considered to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due (both interest and principal) according to the contractual terms of the loan agreement. Smaller-balance, homogeneous loans that are evaluated collectively for impairment, such as residential, home equity and other consumer loans are specifically excluded from the impaired loan portfolio except where the loan is classified as a troubled debt restructuring. The Company has defined the population of impaired loans to include nonaccrual loans and troubled debt restructured ("TDR") loans.

F-16

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

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

The value of an impaired loan is measured based upon the present value of expected future cash flows discounted at the loan's effective interest rate, or the fair value of the collateral if the loan is collateral-dependent and its payment is expected solely based on the underlying collateral. For impaired loans deemed collateral dependent, where impairment is measured using the fair value of the collateral, the Company will either obtain a new appraisal or use another available source of collateral assessment to determine a reasonable estimate of the fair value of the collateral.

Interest collected on impaired loans is either applied against principal or reported as income according to management's judgment as to the collectability of principal. If management does not consider a loan ultimately collectible within an acceptable time frame, payments are applied as principal to reduce the loan balance. If full collection of the remaining recorded investment should subsequently occur, interest receipts are recorded as interest income on a cash basis.

Troubled Debt Restructured Loans

In cases where a borrower experiences financial difficulties and the Company makes certain concessionary modifications to contractual terms, the loan is classified as a TDR loan. In determining whether a debtor is experiencing financial difficulties, the Company considers, among other factors, whether the debtor is in payment default or is likely to be in payment default in the foreseeable future without the modification, if the debtor declared or is in the process of declaring bankruptcy, there is substantial doubt that the debtor will continue as a going concern, the debtor's entity-specific projected cash flows will not be sufficient to service its debt, or the debtor cannot obtain funds from sources other than the existing creditors at market terms for debt with similar risk characteristics.

Large groups of small-balance homogeneous loans such as residential real estate, residential construction, home equity and other consumer portfolios are collectively evaluated for impairment. As such, the Company does not typically identify individual loans within these groupings as impaired loans or for impairment evaluation and disclosure. However, the Company evaluates all TDRs for impairment on an individual loan basis regardless of loan type.

Modifications may include interest-rate reductions, short-term (defined as one year or less) changes in payment structure to interest-only payments, short-term extensions of the loan's original contractual term, or less frequently, principal forgiveness, interest capitalization, forbearance and other actions intended to minimize economic loss and avoid foreclosure or repossession of collateral. Typically, TDRs are placed on nonaccrual status and reported as nonperforming loans. Generally, a nonaccrual loan that is restructured remains on nonaccrual for a period of six consecutive months to demonstrate that the borrower can meet the restructured terms; however, performance prior to the restructuring, or significant events that coincide with the restructuring, are considered in assessing whether the borrower can meet the new terms and may result in the loan being returned to accrual status at the time of restructuring or after a shorter performance period. If the borrower's ability to meet the revised payment schedule is not reasonably assured, the loan remains classified as a nonaccrual loan.

Loans restructured at an interest rate equal to or greater than that of a new loan with comparable risk at the time the loan agreement is modified may be excluded from restructured loan disclosures in years subsequent to the restructuring if they are in compliance with the modified terms.

~~F-15~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Allowance for ~~Loan and Lease~~Credit Losses

Management has established a methodology to determine the adequacy of the allowance for ~~loan and lease~~credit losses that assesses the risks and losses ~~inherent in~~expected on the loan and lease portfolio. Additions to the allowance for ~~loan and lease~~credit losses are made by charges to the provision for credit losses. Losses on loans and leases are charged off against the allowance when all or a portion of a loan or lease is considered uncollectible. Subsequent recoveries on loans previously charged off, if any, are credited to the allowance when realized.

To calculate the December 31, 2020 allowance for loans collectively evaluated, management uses models developed by a third party. The models include: Commercial real estate ("CRE") lifetime, Commercial and industrial ("C&I") lifetime, Retail lifetime, C&I historical, and Retail historical. Lifetime loss rate models calculate the expected losses over the life of the loan based on loan attributes and reasonable, supportable economic forecasts.

F-17

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

Key assumptions used in the models include portfolio segmentation, prepayments, and the expected utilization of unfunded commitments, among others. The portfolios are segmented by loan level attributes such as loan size, date of origination, and delinquency status to create homogenous loan pools. Pool level metrics are calculated and loss rates are subsequently applied to the pools as the loans have like characteristics. Prepayment assumptions are embedded within the models and are based on the same data used for model development. Model development data and developmental time periods vary by model, but all use at least ten years of historical data and capture at least one recessionary period. Expected utilization is based on current utilization and a loan equivalency ("LEQ") factor. LEQ varies by current utilization and provides a reasonable estimate of expected draws and borrower behavior. Assumptions and model inputs are reviewed in accordance with model monitoring practices and as information becomes available.

Historical loss rate models apply a loss rate to the outstanding balance of the loan. Management uses historical loss rates

for condominium association, auto, and government lease portfolio segments because these loans have distinct, historical, or

expected loss patterns and a de minimus effect on the overall allowance and provision.

Management elected to use multiple economic forecasts in determining the reserve to account for economic uncertainty. The forecasts include various projections of Gross Domestic Product ("GDP"), interest rates, property price indices, and employment measures. The forecasts are probability-weighted based on available information at the time of the calculation execution. Scenario weighting and model parameters are reviewed for each calculation and are subject to change. The models recognize that the life of a loan may exceed the economic forecast therefore the models employ mean reversion techniques at the input level to predict credit losses for loans that are expected to mature beyond the forecast period. The December 31, 2020 forecasts reflect the immediate and longer-term effects of the COVID-19 pandemic as well as the associated policies and fiscal support provided by local and national authorities.

The CRE lifetime loss rate, C&I lifetime loss rate, and Retail lifetime loss rate models were developed using the historical loss experience of all banks in the model’s developmental dataset. Banks in the model’s developmental dataset may have different loss experiences due to geography and portfolio as well as variances in operational and underwriting procedures from the Company, and therefore, the Company calibrates expected losses using a scalar for each model. Each scalar was calculated by examining the loss rates of peer banks that have similar operations and asset bases to the Company and comparing these peer group loss rates to the model results. Peer group loss rates were used in the scalar calculation because management believes the peer group’s historical losses provide a better reflection of the Company’s current portfolio and operating procedures than the Company’s historical losses. Qualitative adjustments are also applied to select segments of the loan portfolio where applicable.

For December 31, 2020, management applied qualitative adjustments to the CRE lifetime loss rate and C&I lifetime loss rate. These adjustments were made based on historical loss patterns, current loan and portfolio metrics, and expert judgment based on professional experience. These qualitative adjustments resulted in additions to reserves for the CRE and C&I portfolio, as compared to the model output.

Prior to the implementation of ASU 2016-13 on January 1, 2020, Management used a consistent and systematic process and methodology to evaluate the adequacy of the allowance for loan and lease losses on a quarterly basis. For purposes of determining the allowance for loan and lease losses, the Company ~~has~~had segmented certain loans and leases in the portfolio by product type into the following segments: (1) commercial real estate loans, (2) commercial loans and leases, (3) and consumer loans. Portfolio segments ~~are~~were further disaggregated into classes based on the associated risks within the segments. Commercial real estate loans ~~are~~were divided into three classes: commercial real estate mortgage loans, multi-family mortgage loans, and construction loans. Commercial loans and leases ~~are~~were divided into three classes: commercial loans which includes taxi medallion loans, equipment financing, and loans to condominium associations. Consumer loans ~~are~~were divided into three classes: residential mortgage loans, home equity loans, and other consumer loans. A formula-based credit evaluation approach iswas applied to each group, coupled with an analysis of certain loans for impairment.

The general allowance related to loans collectively evaluated for impairment iswas determined using a formula-based approach utilizing the risk ratings of individual credits and loss factors derived from historic portfolio loss rates over a lookback period, which include estimates of incurred losses over an estimated loss emergence period (“LEP”). The LEP was generated utilizing a charge-off look-back analysis which studied the time from the first indication of elevated risk of repayment (or other early event indicating a problem) to eventual charge-off to support the LEP considered in the allowance calculation. This

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Notes to Consolidated Financial Statements (Continued)

reserving methodology established the approximate number of months of LEP that ~~represents~~represented incurred losses for each portfolio.

In addition to quantitative measures, relevant qualitative factors ~~include,~~included, but ~~are~~were not limited to: (1) levels and trends in past due and impaired loans, (2) levels and trends in charge-offs, (3) changes in underwriting standards, policy exceptions, and credit policy, (4) experience of lending management and staff, (5) economic trends, (6) industry conditions, (7) effects of changes in credit concentrations, (8) interest rate environment, and (9) regulatory and other changes. The general allowance related to the acquired loans collectively evaluated for impairment iswere determined based upon the degree, if any, of deterioration in the pooled loans subsequent to acquisition. The qualitative factors used in the determination ~~are~~was the same as those used for originated loans.

During ~~2015,~~ the Company enhanced and refined its general allowance methodology. Under the enhanced methodology, management combined the historical loss histories of the Banks to generate a single set of historical loss ratios. Management believes it is appropriate to aggregate the ratios as the Banks share common environmental factors, operate in similar geographic markets, and utilize common underwriting standards in accordance with the Company's Credit Policy. In prior periods, a historical loss history applicable to each Bank was used.

Management employed a similar analysis for the consolidation of the qualitative factors as it did for the quantitative factors. Again, management believes the realignment of the existing nine qualitative factors used at each of the Banks into a single group of factors used for the Company is appropriate based on the commonality of environmental factors, markets and underwriting standards among the Banks. Prior to 2015, each of the Banks utilized a set of qualitative factors applicable to each Bank.

~~The Company’s~~year ended December 31, ~~2017 allowance calculation included a further segmentation of the commercial loans~~2020 and leases to reflect the increased risk in the Company’s taxi medallion portfolio. As of December 31, 2017, this portfolio is approximately $19.7 million. Based on industry conditions, management established a loss factor for this portfolio that best represents the changing risks associated with it.

Based on the refinements to the Company’s allowance methodology discussed above, management determined that the potential risks anticipated by the unallocated allowance are now incorporated into the allowance methodology, making the unallocated allowance unnecessary. Prior to 2015, the unallocated allowance was used to recognize the estimated risk associated with the allocated general and2019, specific allowances. It incorporated management’s evaluation of existing conditions that were not included in the allocated allowance determinations and provided for losses that arise outside of the ordinary course of business.

~~Specific valuation allowances~~reserves are established for ~~impaired originated~~ loans ~~with book values~~individually evaluated for impairment when amortized cost basis is greater than the discounted present value of expected future cash flows or, in the case of collateral-dependent ~~impaired~~ loans, ~~for any~~when there is an excess of a loan's

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

~~book balance and~~ amortized cost basis over the fair value of its underlying collateral. ~~Specific valuation allowances~~When loans and leases do not share risk characteristics with other financial assets they are established for acquired loans with deterioration in the discounted present value of expected future cash flows since acquisitions or, in the case of collateral dependent impaired loans, for any increase in the excess of a loan's book balance greater than the fair value of its underlying collateral. A specific valuation allowance for losses on TDR loans is determined by comparing the net carrying amount of the troubled debt restructured loan with the restructured loan's cash flows discounted at the original effective rate. Impairedevaluated individually. Individually evaluated loans are reviewed quarterly with adjustments made to the calculated reserve as necessary.

As of December 31, 2017, management believes that the methodology for calculating the allowance is sound and that the allowance provides a reasonable basis for determining and reporting on probable losses in the Company’s loan portfolios.

Liability for Unfunded Commitments

In the ordinary course of business, the Company enters into commitments to extend credit, commercial letters of credit, and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. The credit risk associated with these commitments is evaluated in a manner similar to the allowance for loan and lease losses.

Premises and Equipment

Premises and equipment are carried at cost less accumulated depreciation and amortization, except for land which is carried at cost. Premises and equipment are depreciated using the straight-line method over the estimated useful life of the assets. Leasehold improvements are amortized using the straight-line method over the shorter of the lease term or the estimated useful life of the improvements.

Costs related to internal-use software development projects that provide significant new functionality are capitalized. Internal-use software is software acquired or modified solely to meet the Company's needs and for which there is no plan to market the software externally. Direct and indirect costs associated with the application development stage of internal use software are capitalized until such time that the software is substantially complete and ready for its intended use. Capitalized costs are amortized on a straight-line basis over the remaining estimated life of the software. Computer software and development costs incurred in the preliminary project stage, as well as training and maintenance costs, are expensed as incurred.

Leases

The Company leases ~~properties for offices and branches in the states of Massachusetts, Rhode Island and New York. Lease~~certain office space under various noncancellable operating leases as well as certain other assets. These leases have original terms ~~range~~ranging from ~~five~~3 years to over 25 ~~years with~~years. Certain leases contain renewal options ~~to renew. Management performs an analysis to determine proper~~and escalation clauses which can increase rental expenses based principally on the consumer price index and fair market rental value provisions. Right-Of-Use Lease Assets are carried on the balance sheet at amortized cost and corresponding lease ~~accounting~~liabilities are carried on the balance sheet at lease inception and for each renewal. If a lease meets any of the following four criteria, the lease is classified as capital lease. The four criteria are: transfer of ownership by the end of lease term; contains bargain purchase option; lease term is at least 75% of the property’s estimated remaining economic life; or present value of the future minimum lease ~~payment is at least 90%~~payments, adjusted for any initial direct costs and incentives. All of the ~~fair value of the leased property. All~~Company's current outstanding leases are classified as operating ~~leases and rental payments are expensed as incurred. Certain leases contain rent escalation clauses which are amortized over the life of the lease under the straight-line method.~~leases.

Bank-Owned Life Insurance

The Company acquired bank-owned life insurance ("BOLI") plans as part of its acquisitions of First Ipswich Bank and BankRI. BOLI represents life insurance on the lives of certain current and former employees who have provided positive consent allowing their employer to be the beneficiary of such policies. BankRI and Brookline Bank as successor in interest to First Ipswich Bank are the beneficiaries of their respective policies. BankRI and ~~First Ipswich~~Brookline Bank utilize BOLI as tax-efficient financing for their benefit obligations to their employees, including their retirement obligations and Supplemental Executive Retirement Plans ("SERPs").

Since BankRI and ~~First Ipswich~~Brookline Bank are the primary beneficiaries of their respective insurance policies, increases in the cash value of the policies, as well as insurance proceeds received, are recorded in non-interest income and are not subject to income taxes. BOLI is recorded at the cash value of the policies, less any applicable cash surrender charges, and is reflected as

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Notes to Consolidated Financial Statements (Continued)

an asset in the accompanying consolidated balance sheets. Cash proceeds, if any, are classified as cash flows from investing activities.

The Company reviews the financial strength of the insurance carriers prior to the purchase of BOLI to ensure minimum credit ratings of at least investment grade. The financial strength of the carriers is reviewed at least annually, and BOLI with any individual carrier is limited to 10% of the Company's capital. Total BOLI is limited to 25% of the Company's capital.

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Goodwill and Other Identified Intangible Assets

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill andindefinite-lived identified intangible assets are not subject to amortization. Definite-lived identified intangible assets are assetsresulting from acquisitions that are being amortized over their estimated useful lives. The recoverability of goodwill and identified intangible assets is evaluated for impairment at least annually. ~~As part of this evaluation, the~~A Company ~~makes~~can perform a qualitative assessment of whether it is more likely than not that the fair value of an acquired asset is greater than its carrying amount. If the Company qualitatively concludes that it is more likely than not that the fair value of an acquired asset is greater than its carrying amount, no further testing is necessary. If, however, the Company qualitatively concludes that the fair value of an acquired asset is less than its carrying value, the Company should recognize an impairment charge for the amount by which the carrying amount exceeds the fair value. However, in accordance with ASC 350-20-35-3B, an entity can bypass the qualitative assessment and perform the quantitative impairment test. Given the current economic environment, a quantitative analysis was performed where Management selected a sample of comparable acquisitions and calculated the control premium associated with each sale. The Company’s market capitalization times the sampled control premium allowed Management to compare the calculated fair value to the Company’s current book value to determine if an adjustment to goodwill is warranted. The Company did not have any impairment of Goodwill and other identified intangible assets as of December 31, ~~2017~~2020. Further analysis of the Company’s goodwill can be found in Note 9 “Goodwill and ~~2016.~~Other IntangibleAssets” within notes to the consolidated financial statements.

OREO and Other Repossessed Assets

OREO and other repossessed assets consists of properties acquired through foreclosure, real estate acquired through acceptance of a deed in lieu of foreclosure and loans determined to be substantively repossessed. Real estate loans that are substantively repossessed include only those loans for which the Company has taken possession of the collateral. OREO and other repossessed assets which consist of vehicles and equipment, if any, are recorded initially at estimated fair value less costs to sell, resulting in a new cost basis. The amount by which the recorded investment in the loan exceeds the fair value (net of estimated cost to sell) of the foreclosed or repossessed asset is charged to the allowance for loan and lease losses. Such evaluations are based on an analysis of individual properties/assets as well as a general assessment of current real estate market conditions. Subsequent declines in the fair value of the foreclosed or repossessed asset below the new cost basis are recorded through the use of a valuation allowance. Subsequent increases in the fair value are recorded as reductions in the allowance, but not below zero. Rental revenue received on foreclosed or repossessed assets is included in other non-interest income, whereas operating expenses and changes in the valuation allowance relating to foreclosed and repossessed assets are included in other non-interest expense. Certain costs used to improve such properties are capitalized. Gains and losses from the sale of OREO and other repossessed assets are reflected in non-interest expense when realized. Together with nonperforming loans, OREO and repossessed assets comprise nonperforming assets.

Derivatives

The Company utilizes loan level derivatives which consists of interest rate ~~swap agreements~~contracts (swaps, caps and floors), and risk participation agreements as part of the Company's interest-rate risk management strategy for certain assets and liabilities and not for speculative purposes. Based on the Company's intended use for the loan level derivatives at inception, the Company designates the derivative as either an economic hedge of an asset or liability, or a hedging instrument subject to the hedge accounting provisions of FASB ASC Topic 815, "Derivatives and Hedging."

Loan level derivatives and foreign exchange contracts entered into on behalf of our customers are designated as economic hedges and are recorded at fair value within other assets or liabilities. Changes in the fair value of these non hedging derivatives are recorded directly through earnings at each reporting period.

Transfer of Financial Assets

Transfers of financial assets are accounted for as sales when control over the assets has been surrendered. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

assets, and (3) the Company does not maintain effective control over the transferred assets through an agreement to repurchase them before their maturity.

Securities Sold under Agreements to Repurchase

The Company enters into sales of securities under agreements to repurchase with the Banks' commercial customers. These agreements are treated as financings, and the obligations to repurchase securities sold are reflected as a liability in the consolidated balance sheets. Securities pledged as collateral under agreements to repurchase are reflected as assets in the accompanying consolidated balance sheets.

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Employee Benefits

Costs related to the Company's 401(k) plan are recognized in current earnings. Costs related to the Company's nonqualified deferred compensation plan, SERPs and postretirement benefits are recognized over the vesting period or the related service periods of the participating employees. Changes in the funded status of postretirement benefits are recognized through comprehensive income in the year in which changes occur.

Compensation expense for the Company's Employee Stock Ownership Program ("ESOP") is recorded at an amount equal to the shares allocated by the ESOP multiplied by the average fair market value of the shares during the year. The Company recognizes compensation expense ratably over the year based upon the Company's estimate of the number of shares expected to be allocated by the ESOP. The difference between the average fair market value and the cost of the shares allocated by the ESOP is recorded as an adjustment to additional paid-in capital.

The fair value of restricted stock awards and stock option grants are determined as of the grant date and are recorded as compensation expense over the period in which the shares of restricted stock awards and stock options vest. Forfeitures are accounted for as they occur.

Fair Value Measurements

ASC 820-10, "Fair Value Measurements and Disclosures," defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A fair value measurement assumes that the transaction to sell the asset or transfer the liability occurs in the principal market for the asset or liability or, in the absence of a principal market, the most advantageous market for the asset or liability. The price in the principal (or most advantageous) market used to measure the fair value of the asset or liability is not adjusted for transaction costs. An orderly transaction is a transaction that assumes exposure to the market for a period prior to the measurement date to allow for marketing activities that are usual and customary for transactions involving such assets and liabilities. It is not a forced transaction. Market participants are buyers and sellers in the principal market that are independent, knowledgeable, able to transact, and willing to transact.

A fair-value hierarchy for valuation inputs that gives the highest priority to quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs are included in ASC 820. The fair value hierarchy is as follows:

Level 1: Inputs are unadjusted quoted prices in active markets for assets and liabilities identical to those reported at fair value.

Level 2: Inputs other than quoted prices included within Level 1. Level 2 inputs are observable either directly or indirectly. These inputs might include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, volatilities, prepayment speeds, credit risks, etc.) or inputs that are derived principally from or corroborated by market data by correlation or other means.

Level 3: Inputs are unobservable inputs for an asset or liability that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. These inputs are used to determine fair value only when observable inputs are not available.

Earnings per Common Share

Basic earnings per share ("EPS") is computed by dividing net income by the weighted average number of shares of common stock outstanding for the applicable period, exclusive of Treasury shares, unearned ESOP shares and unvested shares of restricted stock. Diluted EPS is calculated after adjusting the denominator of the basic EPS calculation for the effect of all

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

potential dilutive common shares outstanding during the period. The dilutive effects of options and unvested restricted stock awards are computed using the "treasury stock" method. Management evaluated the "two class" method and concluded that the method did not apply to the Company's EPS calculation.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases.

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

Tax positions that are more likely than not to be sustained upon a tax examination are recognized in the Company's financial statements to the extent that the benefit is greater than 50% likely of being recognized. Interest resulting from underpayment of income taxes is classified as income tax expense in the first period the interest would begin accruing according to the provision of the relevant tax law. Penalties resulting from underpayment of income taxes are classified as income tax expense in the period for which the Company claims or expects to claim an uncertain tax position or in the period in which the Company's judgment changes regarding an uncertain tax position.

Treasury Stock

Any shares repurchased under the Company's share repurchase programs were purchased in open-market transactions and are held as treasury stock. Treasury stock also consists of common stock withheld to satisfy federal, state and local income tax withholding requirements for employee restricted stock awards upon vesting. All treasury stock is held at cost.

Segment Reporting

An operating segment is defined as a component of a business for which separate financial information is available that is evaluated regularly by the chief operating decision-maker in deciding how to allocate resources and evaluate performance. The Company is a bank holding company with subsidiaries engaged in the business of banking and activities closely related to banking. The Company's banking business provided substantially all of its total revenues and pre-tax income in ~~2017, 2016~~2020, 2019 and ~~2015.~~2018. Therefore, the Company has determined to be a single segment.

Recent Accounting Pronouncements

Accounting Standards Adopted in 2020

In ~~February 2018,~~June 2016, the FASB issued ~~Accounting Standards Update (ASU) No. 2018-02, "Income Statement-Reporting Comprehensive Income~~ASU 2016-13, “Financial Instruments - Credit Losses (Topic ~~220)~~326): ~~Reclassification~~Measurement of ~~Certain Tax Effects from Accumulated Other Comprehensive Income" was issued to address a narrow-scope financial reporting issue that arose as a consequence~~Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 replaced the previous GAAP method of calculating credit losses. Previously, GAAP required the use of the ~~change~~incurred loss methodology, which used a higher threshold at which probable losses were calculated and recorded. ASU 2016-13 requires the use of an expected loss methodology, referred to as the current expected credit loss (“CECL”) methodology, which requires institutions to account for lifetime expected losses that previously would not have been part of the calculation. The CECL methodology incorporates future forecasting in addition to historical and current measures. The Company adopted the above mentioned ASU as of January 1, 2020. The standard had an impact on our consolidated balance sheet. On adoption, the Company recognized an increase in the ~~tax law. On December 22, 2017,~~allowance for loan and lease losses of $6.6 million, and an increase in the ~~U.S. federal government enacted a tax bill, H.R.1, An Act to Provide~~reserve for ~~Reconciliation Pursuant to Titles II and V~~unfunded commitments of $8.9 million. The net, after-tax impact of the ~~Concurrent Resolution on~~increase in the ~~Budget~~allowance for ~~Fiscal Year 2018 (the “Tax Reform Act”). The ASU No. 2018-02 requires~~loan and lease losses and reserve for unfunded commitments was a ~~reclassification from accumulated other comprehensive income~~decrease to retained earnings ~~for stranded tax effects resulting from~~of $11.5 million shown in the ~~newly enacted federal corporate income tax rate. The amount~~Consolidated Statements of Changes in Stockholders’ Equity. Additional details can be found in Notes 4, 6 and 7.

In August 2018, FASB issued ASU 2018-13, "Fair Value Measurement (Topic 820)" ("ASU 2018-13"), to modify the ~~reclassification would be~~disclosure requirements on fair value measurements in Topic 820, Fair Value Measurement, based on the ~~difference between~~concepts set forth in the ~~historical corporate income tax rate~~Concepts Statement, including the consideration of ~~35 percent~~costs and ~~the newly enacted 21 percent corporate income tax rate. The~~benefits. This ASU ~~No. 2018-02~~ is effective for ~~all entities for~~ fiscal years, ~~beginning after December 15, 2018,~~ and interim periods within those fiscal years, with early adoption permitted, including adoption in any interim period, for (i) public business entities for reporting periods for which financial statements have not yet been issued and (ii) all other entities for reporting periods for which financial statements have not yet been made available for issuance. The changes are required to be applied retrospectively to each period (or periods) in which the effect of the change in the U.S. federal corporate income tax rate in the Tax Cuts and Jobs Act of 2017 is recognized. Management early adopted this ASU as of December 31, 2017, which resulted in the reclassification from accumulated other comprehensive loss to retained earnings totaling $1.1 million, reflected in the Consolidated Statements of Changes in Shareholders' Equity.

In November 2017, the FASB issued ASU 2017-14, Income Statement-Reporting Comprehensive Income (Topic 220), Revenue Recognition (Topic 605), and Revenue from Contracts with Customers (Topic 606): Amendments to SEC Paragraphs Pursuant to Staff Accounting Bulletin No. 116 and SEC Release No. 33-10403. This ASU was issued to amend certain SEC paragraphs pursuant to the SEC Staff Accounting Bulletin No.116 and SEC Release No. 33-10403, which bring existing guidance into conformity with Topic 606, Revenue from Contract with Customers. The ASU was effective for annual periods beginning after December 15, ~~2017. Management has determined that this~~2019. Certain provisions under ASU ~~does apply as of December 31, 2017 and has determined the impact~~2018-13 required prospective application, while other provisions required retrospective application to ~~be immaterial. The standard will be adopted on January 1, 2018.~~

In May 2017, the FASB issued ASU 2017-09, Compensation-Stock Compensation (Topic 718): Scope of Modification Accounting. FASB issued this Update to address the diversity in practice as well as the cost and complexity when applying the guidance in Topic 718, Compensation - Stock Compensation, to a change to the terms or conditions of a share-based payment award. For public entities, this ASU is effective for annual reportingall periods ~~beginning after December 15, 2017. Management has evaluated this ASU and has determined that ASU 2017-09 does apply as of December 31, 2017.~~

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~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

In March 2017, the FASB issued Accounting Standards Update ASU 2017-07, Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (Topic 715). This ASU was issued primarily to improve the presentation of net periodic pension cost and net periodic postretirement benefit cost. This ASU is effective for annual reporting periods beginning after December 15, 2017. Management has determined that this ASU does apply as of December 31, 2017 and has determined the impact to be immaterial. The standard will be adopted on January 1, 2018.

In January 2017, the FASB issued ASU 2017-04, Intangibles - Goodwill and Other (Topic 350). This ASU was issued to simplify the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. For public entities, this ASU is effective for the fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. Early adoption is permitted and application should be on a prospective basis. Management has evaluated this ASU and as of December 31, 2017, the Company has adopted the ASU and determined the impact to be immaterial.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230). This ASU was issued to provide clarification and uniformity on the presentation and classification of certain cash receipts and cash paymentspresented in the ~~statement of cash flows under Topic 230. Early adoption is permitted as of the fiscal years beginning after December 15, 2017, for public entities that file with the SEC.~~consolidated financial statements upon adoption. The Company adopted the provisions of ASU ~~2016-15~~2018-13 effective January 1, ~~2017~~2020 and the adoption did not have a material impact on the Company’s consolidated financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments. The intent of this ASU is to replace the current GAAP method of calculating credit losses. Current GAAP uses a higher threshold at which likely losses can be calculated and recorded. The new process will require institutions to account for likely losses that originally would not have been part of the calculation. The calculation will incorporate future forecasting in addition to historical and current measures. For public entities that file with the SEC, this ASU is effective for the fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. This ASU must be applied prospectively to debt securities marked as other than temporarily impaired. A retrospective approach will be applied cumulatively to retained earnings. Early adoption is permitted as of the fiscal years beginning after December 15, 2018. Management has determined that ASU 2016-13 does apply, but has not determined the impact, if any, as of December 31, 2017. In preparation for the adoption in 2019 of this ASU, management formed a steering committee to oversee the adoption of ASU 2016-13. The steering committee along with a project team has developed an approach for implementation and has selected a third party software service provider. The project team is in the testing phase of the third party software.

In May 2016, the FASB issued ASU 2016-12, Revenue from Contracts with Customers (Topic 606): Narrow-Scope Improvements and Practical Expedients. The intention of this ASU is to provide additional clarification on specific issues brought forth by the FASB and the International Accounting Standards Board Joint Transition Resource Group for Revenue Recognition in relation to Topic 606 and revenue recognition. The ASU was effective for annual periods beginning after December 15, 2017. Management has determined that ASU 2016-12 does apply as of December 31, 2017. Management assembled a project team to address the changes pursuant to Topic 606. The work has been completed on the contracts and management believes there will be no material impact or significant changes in the timing of revenue recognition when considering the amended accounting guidance. The standard will be adopted on January 1, 2018.

In March 2016, the FASB issued ASU 2016-09, Compensation - Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. This ASU was issued as part of the FASB Simplification Initiative which intends to reduce the complexity of GAAP while improving usefulness to users. The ASU was effective for annual periods beginning after December 15, 2016, and interim periods within those annual reporting periods with early adoption available. The Company adopted ASU 2016-09 effective January 1, 2017 and the adoption did not have a material impact on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net). This ASU was issued to clarify how to recognize revenue depending on an entities position, in relation to another entity involved, on contracts with customers. The entity can either be a principal party or an agent, and must record revenue accordingly. The ASU was effective for annual periods beginning after December 15, 2017. Management has determined that ASU 2016-08 does apply as of December 31, 2017. Management assembled a project team to address the changes pursuant to Topic 606. The work has been completed on the contracts and management believes there will be no material impact or significant changes in the timing of revenue recognition when considering the amended accounting guidance. The standard will be adopted on January 1, 2018.

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BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

~~December 31, 2017, 2016 and 2015~~

In ~~February 2016,~~August 2018, FASB issued ASU ~~2016-02, Leases. This~~ 2018-14, "Compensation-Retirement Benefits-Defined Benefit Plans-General (Subtopic 715-20)"("ASU ~~requires lessees~~2018-14"), to ~~put most leases on their balance sheet but recognize expenses on their income statements in a manner similar to current accounting. This~~modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. ASU also eliminates current real estate-specific provisions for all companies. For lessors, this ASU modifies the classification criteria and the accounting for sales-type and direct financing leases. This ASU2018-14 is effective for fiscal years beginning after December 15, ~~2018, including interim periods therein. Early adoption is permitted. Management believes that this ASU applies~~2020, for public business entities and has not determined the impact, if any, as of December 31, 2017. Management has met to discuss the impact and will assemble a project team to assess steps required for adoption. The steps will include a review of third party lease software service providers.

In January 2016, the FASB issued ASU 2016-01, Financial Instruments. This ASU significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. It also amends certain disclosure requirements associated with the fair value of financial instruments. This ASU is effective for fiscal years beginning after December 15, ~~2017, including interim periods therein.~~2021, for all other entities. Early adoption is permitted. Management has ~~determined that~~evaluated ASU ~~2016-01 does apply~~2018-14 and as of December 31, ~~2017~~2020, the Company has adopted ASU 2018-14 and ~~management believes~~determined the impact to be immaterial.

In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. This ASU was issued to defer the effective date of ASU 2014-09 for all entities by one year. In effect, public business entities, certain not-for-profit entities, and certain employee benefit plans should apply the guidance in ASU 2014-09 to annual reporting periods (including interim reporting periods within those period) beginning after December 15, 2017. Management has determined that ASU 2015-14 does apply as of December 31, 2017. Management assembled a project team to address the changes pursuant to Topic 606. The work has been completed on the contracts and management believes there will be no material impact or significant changes in the timing of revenue recognition when considering the amended accounting guidance. The standard will be adopted on January 1, 2018.

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). This ASU was issued to clarify the principles for recognizing revenue and to develop a common revenue standard for U.S. GAAP and IFRS that would: remove inconsistencies and weaknesses in revenue requirements, provide a more robust framework for addressing revenue issues, improve comparability of revenue recognition practices across entities industries, jurisdictions, and capital markets, provide more useful information to users of financial statements through improved disclosure requirements and simplify the preparation of financial statements by reducing the number of requirements to which an entity must refer. The main provisions in this ASU are 1) Identify the contract(s) with a customer, 2) Identify the performance obligations in the contract, 3) Determine the transaction price, 4) Allocate the transaction price to the performance obligations in the contract and 5) Recognize revenue when (or as) the entity satisfies a performance obligation. The ASU was effective for annual periods beginning after December 15, 2017. Management has determined that this ASU 2014-09 does apply as of December 31, 2017. Management assembled a project team to address the changes pursuant to Topic 606. The work has been completed on the contracts and management believes there will be no material impact or significant changes in the timing of revenue recognition when considering the amended accounting guidance. The standard will be adopted on January 1, 2018.

(2) Acquisitions and Mergers

First ~~Commons~~Ipswich Bank ~~N.A.~~

On ~~September 20, 2017,~~February 15, 2020, the ~~Company and~~merger of First ~~Commons~~Ipswich Bank ~~N.A. (“First Commons Bank”) entered into a definitive agreement and plan of merger (the “Merger Agreement”) pursuant to which First Commons Bank will merge~~ with and into Brookline ~~Bank. The Company expects to consummate the transaction during the first quarter of 2018, subject to approval by~~Bank was completed. First ~~Commons~~Ipswich Bank ~~shareholders, the Board of Governors~~was already a wholly-owned subsidiary of the ~~Federal Reserve System~~Company, therefore the merger qualified as a tax-free reorganization for federal income tax purposes and ~~the Massachusetts Division of Banks.~~

~~Under the terms of the Merger Agreement, the Company will pay $16.70 per share for the outstanding shares and warrants~~there was minimal impact to customers. All of First ~~Commons~~Ipswich Bank's 6 branch locations were retained and converted to Brookline Bank representing a total transaction value of approximately $56.0 million. First Commons Bank stockholders will receive 1.171 shares of the Company's common stock for each First Commons Bank share they own, subject to adjustment based on Company's ten-day, volume-weighted average stock price between $13.19 and $15.33.branches.

First Commons Bank is a national banking association which was organized in 2009 and is headquartered in Newton and Wellesley, Massachusetts. First Commons Bank operates its business from two banking offices located in Massachusetts. First Commons Bank is engaged principally in the business of attracting deposits from the general public and investing those deposits in residential, commercial real estate loans, consumer and small business loans.

~~F-22~~

~~Table of Contents~~

~~BROOKLINE BANCORP, INC. AND SUBSIDIARIES~~

~~Notes to Consolidated Financial Statements (Continued)~~

~~December 31, 2017, 2016 and 2015~~

At December 31, 2017, First Commons Bank had total assets of approximately $324.8 million (unaudited), loans of approximately $263.0 million (unaudited), deposits of approximately $282.8 million (unaudited) and stockholders’ equity of approximately $35.7 million (unaudited).

~~The Company recorded $411.0 thousand of merger and acquisition expense in connection with the proposed acquisition of First Commons Bank for the year ended December 31, 2017.~~

(3) Cash, Cash Equivalents and Short-Term Investments

The Banks are required to maintain average reserve balances with the FRB based upon a percentage of certain of the Banks' deposits. As of December 31, ~~2017 and 2016, the~~2020, there was 0 average amount required to be held before a credit for vault cash compared to 2019, when the amount was ~~$5.9 million and $6.9 million, respectively.~~$10.5 million. Aggregate reserve balances included in cash and cash equivalents were ~~$40.0~~$410.1 million and ~~$30.9~~$53.0 million, respectively, as of December 31, ~~2017~~2020 and ~~2016.~~2019.

Short-term investments are summarized as follows:


	At December 31,					At December 31,
	2017		2016			2020		2019
	(In Thousands)					(In Thousands)
FRB interest bearing reserve	$	28,263	$	19,952	FRB interest bearing reserve	$	398,202	$	39,964
FHLB overnight deposits	4,676		2,142		FHLB overnight deposits	646		4,237
Federal funds sold	2,444		9,508

Total short-term investments	$	35,383	$	31,602	Total short-term investments	$	398,848	$	44,201

Short-term investments are stated at cost which approximates market value.

~~(4) Investment Securities~~

~~The following tables set forth investment securities available-for-sale and held-to-maturity at the dates indicated:~~

At December 31, 2017

Amortized
Cost

Gross
Unrealized
Gains

Gross
Unrealized
Losses

Estimated
Fair Value
(In Thousands)
Investment securities available-for-sale:
GSE debentures $ 151,483
$ 70
$ 1,629
$ 149,924
GSE CMOs 131,082
27
4,087
127,022
GSE MBSs 191,281
354
2,322
189,313
SBA commercial loan asset-backed securities 73
—
1
72
Corporate debt obligations 62,811
110
238
62,683
U.S. treasury bonds 8,785
7
62
8,730
Trust preferred securities 1,471
—
73
1,398
Marketable equity securities 978
13
9
982
Total investment securities available-for-sale $ 547,964
$ 581
$ 8,421
$ 540,124
Investment securities held-to-maturity:
GSE debentures $ 41,612
$ —
$ 811
$ 40,801
GSEs MBSs 13,923
—
218
13,705
Municipal obligations 53,695
159
337
53,517
Foreign government obligations 500
—
—
500
Total investment securities held-to-maturity $ 109,730

$ 159

$ 1,366

$ 108,523

F-23

Table of Contents

BROOKLINE BANCORP, INC. AND SUBSIDIARIES

Notes to Consolidated Financial Statements (Continued)

(4) Investment Securities

Adoption of Topic 326

Effective January 1, 2020, the Company adopted the provisions of ASU 2016-13 using the modified retrospective method. Therefore, prior period comparative information has not been adjusted and continues to be reported under GAAP in effect prior to the adoption of Topic 326. As of January 1, 2020, the Company recognized a de minimis ACL on available-for-sale debt securities, which was no longer required as of December 31, ~~2017, 2016~~2020.

The following tables set forth investment securities available-for-sale, held-to-maturity and ~~2015~~

equity securities held-for-trading at the dates indicated:



Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value of $0.01 per share	BRKL	Nasdaq Global Select Market


					Page
Part I

Item 1.			Business		~~Page~~ 1

~~Part I~~Item 1A.			Risk Factors		12

~~Item 1.~~			~~Business~~	1

~~Item 1A.~~	~~Risk Factors~~	12

Item 1B.	Unresolved Staff Comments			21

Item 2.			Properties		21

Item 3.			Legal Proceedings		2122

Item 4.			Mine Safety Disclosures		2122

Part II

Item 5.			Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		2223

Item 6.			Selected Financial Data		2425

Item 7.			Management's Discussion and Analysis of Financial Condition and Results of Operations		2627

Item 7A.			Quantitative and Qualitative Disclosures About Market Risk		7467

Item 8.			Financial Statements and Supplementary Data		7770

Item 9.			Changes In and Disagreements With Accountants on Accounting and Financial Disclosure		7871

Item 9A.			Controls and Procedures		7871

Item 9B.			Other Information		7871

Part III

Item 10.			Directors, Executive Officers and Corporate Governance		7871

Item 11.			Executive Compensation		7871

Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		7871

Item 13.			Certain Relationships and Related Transactions, and Director Independence		7871

Item 14.			Principal Accounting Fees and Services		7871

Part IV

Item 15.			Exhibits and Financial Statement Schedules		7972

Item 16.			Form 10-K Summary		8074

Signatures					8175



x☒			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934,



o☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934,



	Market Prices				Dividend Paid Per Share
	High		Low		Dividend Paid Per Share
2017
First Quarter	$	16.75	$	14.50	$	0.09
Second Quarter	15.95		13.75		0.09
Third Quarter	15.50		13.75		0.09
Fourth Quarter	16.35		14.50		0.09
2016
First Quarter	$	11.21	$	10.23	$	0.09
Second Quarter	11.69		10.44		0.09
Third Quarter	12.19		10.71		0.09
Fourth Quarter	16.60		12.05		0.09



	At December 31,
Index	2012	2013	2014	2015	2016	2017
Brookline Bancorp, Inc.	100.00	116.65	127.15	150.69	221.86	217.62
Russell 2000	100.00	138.82	145.62	139.19	168.85	193.58
SNL Bank $5B-$10B	100.00	154.28	158.92	181.04	259.37	258.40
S&P 500	100.00	132.39	150.51	152.59	170.84	208.14



	Amount due at December 31, 2017
	Within One Year		More than One Year to Three Years		More than Three Years to Five Years		More than Five Years to Fifteen Years		More than Fifteen Years		Total after One Year		Total
	(In Thousands)
Commercial real estate	$	838,864	$	541,051	$	589,739	$	201,476	$	3,839	$	1,336,105	$	2,174,969
Multi-family mortgage	353,630		133,559		170,345		101,037		2,099		407,040		760,670
Construction	106,738		8,863		20,382		3,957		198		33,400		140,138
Commercial	217,858		137,103		166,433		94,136		89,474		487,146		705,004
Equipment financing	77,542		210,175		438,624		140,147		—		788,946		866,488
Condominium association	6,334		13,986		15,705		16,594		—		46,285		52,619
Residential mortgage	173,447		125,112		209,647		116,557		35,302		486,618		660,065
Home equity	220,546		1,345		5,554		45,118		83,391		135,408		355,954
Other consumer	7,126		2,055		84		—		5,507		7,646		14,772
Total	$	2,002,085	$	1,173,249	$	1,616,513	$	719,022	$	219,810	$	3,728,594	$	5,730,679



	Due after One Year
	Fixed		Adjustable		Total
	(In Thousands)
Originated:
Commercial real estate	$	435,781	$	825,762	$	1,261,543
Multi-family mortgage	144,448		241,305		385,753
Construction	2,405		30,994		33,399
Commercial	277,409		203,728		481,137
Equipment financing	595,974		188,958		784,932
Condominium association	25,878		20,407		46,285
Residential mortgage	48,218		407,016		455,234
Home equity	26,479		67,524		94,003
Other consumer	2,172		5,475		7,647
Total originated	1,558,764		1,991,169		3,549,933
Acquired:
Commercial real estate	9,614		64,949		74,563
Multi-family mortgage	10,822		10,465		21,287
Commercial	317		5,691		6,008
Equipment financing	4,015		—		4,015
Residential mortgage	19,490		11,893		31,383
Home equity	23,398		18,007		41,405
Total acquired	67,656		111,005		178,661
Total loans	$	1,626,420	$	2,102,174	$	3,728,594



	At December 31, 2017		At December 31, 2016
	(Dollars in Thousands)
Troubled debt restructurings:
On accrual	$	16,241	$	13,883
On nonaccrual	9,770		11,919
Total troubled debt restructurings	$	26,011	$	25,802



	Year Ended December 31, 2015
	Commercial Real Estate			Commercial			Consumer			Unallocated			Total
	(In Thousands)
Balance at December 31, 2014	$	29,594		$	15,957		$	5,690		$	2,418		$	53,659
Charge-offs	(550		)	(3,634		)	(2,370		)	—			(6,554		)
Recoveries	—			667			1,544			—			2,211
Provision (credit) for loan and lease losses	1,107			9,028			(294		)	(2,418		)	7,423
Balance at December 31, 2015	$	30,151		$	22,018		$	4,570		$	—		$	56,739

Total loans and leases	$	2,664,394		$	1,374,296		$	956,850		N/A			$	4,995,540
Allowance for loan and lease losses as a percentage of total loans and leases	1.13		%	1.60		%	0.48		%	N/A			1.14		%



	Year Ended December 31, 2014
	Commercial Real Estate			Commercial			Consumer			Unallocated			Total
	(In Thousands)
Balance at December 31, 2013	$	23,022		$	15,220		$	7,299		$	2,932		$	48,473
Charge-offs	(130		)	(2,507		)	(1,813		)	—			(4,450		)
Recoveries	4			801			592			—			1,397
Provision (credit) for loan and lease losses	6,698			2,443			(388		)	(514		)	8,239
Balance at December 31, 2014	$	29,594		$	15,957		$	5,690		$	2,418		$	53,659

Total loans and leases	$	2,467,801		$	1,167,094		$	1,187,712		N/A			$	4,822,607
Allowance for loan and lease losses as a percentage of total loans and leases	1.20		%	1.37		%	0.48		%	N/A			1.11		%



	Year Ended December 31, 2013
	Commercial Real Estate			Commercial			Consumer			Unallocated		Total
	(In Thousands)
Balance at December 31, 2012	$	20,018		$	10,655		$	7,849		$	2,630	$	41,152
Charge-offs	(88		)	(2,077		)	(2,623		)	—		(4,788		)
Recoveries	13			657			764			—		1,434
Provision for loan and lease losses	3,079			5,985			1,309			302		10,675
Balance at December 31, 2013	$	23,022		$	15,220		$	7,299		$	2,932	$	48,473

Total loans and leases	$	2,203,623		$	965,610		$	1,193,232		N/A		$	4,362,465
Allowance for loan and lease losses as a percentage of total loans and leases	1.04		%	1.58		%	0.61		%	N/A		1.11		%


	Year Ended December 31, 2020 Compared to Year Ended December 31, 2019						Year Ended December 31, 2019 Compared to Year Ended December 31, 2018
	Increase (Decrease) Due To						Increase (Decrease) Due To
	Volume		Rate		Net Change		Volume		Rate		Net Change
	(In Thousands)
Interest and dividend income:
Investments:
Debt securities	$	3,195	$	(1,855)	$	1,340	$	(1,437)	$	(254)	$	(1,691)
Marketable and restricted equity securities	120		(774)		(654)		(457)		—		(457)
Short-term investments	1,044		(2,154)		(1,110)		682		141		823
Total investments	4,359		(4,783)		(424)		(1,212)		(113)		(1,325)
Loans and leases:
Commercial real estate loans	12,654		(28,298)		(15,644)		12,131		5,804		17,935
Commercial loans and leases	13,212		(11,660)		1,552		163		2,060		2,223
Equipment financing	4,406		(2,909)		1,497		6,761		3,337		10,098
Residential mortgage loans	1,117		(2,651)		(1,534)		1,533		1,620		3,153
Other consumer loans	(558)		(6,022)		(6,580)		607		1,012		1,619
Total loans	30,831		(51,540)		(20,709)		21,195		13,833		35,028
Total change in interest and dividend income	35,190		(56,323)		(21,133)		19,983		13,720		33,703
Interest expense:
Deposits:
NOW accounts	84		(36)		48		(1)		154		153
Savings accounts	280		(1,677)		(1,397)		(32)		1,128		1,096
Money market accounts	1,582		(13,269)		(11,687)		(293)		6,130		5,837
Certificate of deposit accounts	(756)		(5,215)		(5,971)		8,034		9,275		17,309
Brokered deposit accounts	3,224		(5,406)		(2,182)		775		2,467		3,242
Total deposits	4,414		(25,603)		(21,189)		8,483		19,154		27,637
Borrowed funds:
Advances from the FHLBB	2,205		(8,064)		(5,859)		(4,065)		4,116		51
Subordinated debentures and notes	10		(178)		(168)		14		11		25
Other borrowed funds	101		(557)		(456)		322		97		419
Total borrowed funds	2,316		(8,799)		(6,483)		(3,729)		4,224		495
Total change in interest expense	6,730		(34,402)		(27,672)		4,754		23,378		28,132
Change in tax-exempt income	(324)		—		(324)		(30)		—		(30)
Change in net interest income	$	28,784	$	(21,921)	$	6,863	$	15,259	$	(9,658)	$	5,601



	Year Ended December 31, 2017 Compared to Year Ended December 31, 2016									Year Ended December 31, 2016 Compared to Year Ended December 31, 2015
	Increase (Decrease) Due To									Increase (Decrease) Due To
	Volume			Rate			Net Change			Volume			Rate			Net Change
	(In Thousands)
Interest and dividend income:
Investments:
Debt securities	$	602		$	307		$	909		$	417		$	117		$	534
Marketable and restricted equity securities	(33		)	81			48			(267		)	491			224
Short-term investments	(72		)	272			200			(5		)	119			114
Total investments	497			660			1,157			145			727			872
Loans and leases:
Commercial real estate loans	6,276			2,814			9,090			11,869			(4,406		)	7,463
Commercial loans and leases	1,764			1,631			3,395			2,436			(1,517		)	919
Equipment financing	5,414			1,533			6,947			6,720			(2,971		)	3,749
Residential mortgage loans	747			629			1,376			892			(130		)	762
Other consumer loans	512			952			1,464			(1,162		)	548			(614		)
Total loans	14,713			7,559			22,272			20,755			(8,476		)	12,279
Total change in interest and dividend income	15,210			8,219			23,429			20,900			(7,749		)	13,151
Interest expense:
Deposits:
NOW accounts	16			—			16			32			(2		)	30
Savings accounts	94			(119		)	(25		)	97			131			228
Money market accounts	431			883			1,314			485			129			614
Certificate of deposit	148			1,765			1,913			326			1,392			1,718
Total deposits	689			2,529			3,218			940			1,650			2,590
Borrowed funds:
Advances from the FHLBB	54			516			570			462			348			810
Subordinated debentures and notes	10			33			43			10			27			37
Other borrowed funds	7			47			54			30			(28		)	2
Total borrowed funds	71			596			667			502			347			849
Total change in interest expense	760			3,125			3,885			1,442			1,997			3,439
Change in tax-exempt income	27			—			27			—			413			413
Change in net interest income	$	14,423		$	5,094		$	19,517		$	19,458		$	(9,333	)	$	10,125


	Year Ended December 31,				Dollar Change		Percent Change
	2020		2019
	(Dollars in Thousands)
Interest income—loans and leases:
Commercial real estate loans	$	148,438	$	164,082	$	(15,644)	(9.5)	%
Commercial loans	41,150		39,436		1,714		4.3	%
Equipment financing	75,563		74,066		1,497		2.0	%
Residential mortgage loans	31,392		32,926		(1,534)		(4.7)	%
Other consumer loans	13,255		19,835		(6,580)		(33.2)	%
Total interest income—loans and leases	$	309,798	$	330,345	$	(20,547)	(6.2)	%


	Originated					Acquired				Total
	Year Ended December 31,					Year Ended December 31,				Year Ended December 31,
	2019		2018		2019	2018		2019		2018
	(Dollars in Thousands)
Provision for loan and lease losses:
Commercial real estate	$	1,798	$	254		$	300	$	924	$	2,098	$	1,178
Commercial	6,539		3,699			227		(451)		6,766		3,248
Consumer	713		556			(16)		(231)		697		325

Total provision for loan and lease losses	9,050		4,509			511		242		9,561		4,751
Unfunded credit commitments	22		200			—		—		22		200
Total provision for credit losses	$	9,072	$	4,709		$	511	$	242	$	269	$	4,951,000



	Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required to be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
At December 31, 2017:
Brookline Bancorp, Inc.
Common equity Tier 1 capital ratio ⁽¹⁾	$	669,238	12.02	%	$	250,547	4.50	%	$	389,739	7.00	%	N/A		N/A
Tier 1 leverage capital ratio ⁽²⁾	687,299		10.43	%	263,585		4.00	%	263,585		4.00	%	N/A		N/A
Tier 1 risk-based capital ratio ⁽³⁾	687,299		12.34	%	334,181		6.00	%	473,423		8.50	%	N/A		N/A
Total risk-based capital ratio ⁽⁴⁾	821,373		14.75	%	445,490		8.00	%	584,706		10.50	%	N/A		N/A
Brookline Bank
Common equity Tier 1 capital ratio ⁽¹⁾	$	414,282	11.56	%	$	161,269	4.50	%	$	250,863	7.00	%	$	232,944	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	423,035		10.35	%	163,492		4.00	%	163,492		4.00	%	204,365		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	423,035		11.81	%	214,920		6.00	%	304,471		8.50	%	286,561		8.00	%
Total risk-based capital ratio ⁽⁴⁾	463,986		12.95	%	286,632		8.00	%	376,205		10.50	%	358,290		10.00	%
BankRI
Common equity Tier 1 capital ratio ⁽¹⁾	$	193,849	11.38	%	$	76,654	4.50	%	$	119,239	7.00	%	$	110,722	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	193,849		9.16	%	84,650		4.00	%	84,650		4.00	%	105,813		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	193,849		11.38	%	102,205		6.00	%	144,791		8.50	%	136,273		8.00	%
Total risk-based capital ratio ⁽⁴⁾	210,025		12.33	%	136,269		8.00	%	178,853		10.50	%	170,337		10.00	%
First Ipswich
Common equity Tier 1 capital ratio ⁽¹⁾	$	37,502	13.38	%	$	12,613	4.50	%	$	19,620	7.00	%	$	18,218	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	37,502		9.44	%	15,891		4.00	%	15,891		4.00	%	19,863		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	37,502		13.38	%	16,817		6.00	%	23,824		8.50	%	22,423		8.00	%
Total risk-based capital ratio ⁽⁴⁾	40,625		14.50	%	22,414		8.00	%	29,418		10.50	%	28,017		10.00	%



	Actual				Minimum Required for Capital Adequacy Purposes				Minimum Required for Fully Phased in Capital Adequacy Purposes plus Capital Conservation Buffer				Minimum Required To Be Considered “Well-Capitalized” Under Prompt Corrective Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
	(Dollars in Thousands)
At December 31, 2016:
Brookline Bancorp, Inc.
Common equity Tier 1 capital ratio ⁽¹⁾	$	559,644	10.48	%	$	240,305	4.50	%	$	373,808	7.00	%	N/A		N/A
Tier 1 leverage capital ratio ⁽²⁾	575,830		9.16	%	251,454		4.00	%	251,454		4.00	%	N/A		N/A
Tier 1 risk-based capital ratio ⁽³⁾	575,830		10.79	%	320,202		6.00	%	453,620		8.50	%	N/A		N/A
Total risk-based capital ratio ⁽⁴⁾	704,675		13.20	%	427,076		8.00	%	560,537		10.50	%	N/A		N/A
Brookline Bank
Common equity Tier 1 capital ratio ⁽¹⁾	$	384,759	11.31	%	$	153,087	4.50	%	$	238,136	7.00	%	$	221,126	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	391,964		10.07	%	155,696		4.00	%	155,696		4.00	%	194,620		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	391,964		11.53	%	203,971		6.00	%	288,959		8.50	%	271,961		8.00	%
Total risk-based capital ratio ⁽⁴⁾	428,966		12.61	%	272,143		8.00	%	357,188		10.50	%	340,179		10.00	%
BankRI
Common equity Tier 1 capital ratio ⁽¹⁾	$	182,202	10.94	%	$	74,946	4.50	%	$	116,583	7.00	%	$	108,255	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	182,202		8.97	%	81,249		4.00	%	81,249		4.00	%	101,562		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	182,202		10.94	%	99,928		6.00	%	141,565		8.50	%	133,237		8.00	%
Total risk-based capital ratio ⁽⁴⁾	197,702		11.87	%	133,245		8.00	%	174,884		10.50	%	166,556		10.00	%
First Ipswich
Common equity Tier 1 capital ratio ⁽¹⁾	$	33,433	12.61	%	$	11,931	4.50	%	$	18,559	7.00	%	$	17,234	6.50	%
Tier 1 leverage capital ratio ⁽²⁾	33,433		9.23	%	14,489		4.00	%	14,489		4.00	%	18,111		5.00	%
Tier 1 risk-based capital ratio ⁽³⁾	33,433		12.61	%	15,908		6.00	%	22,536		8.50	%	21,210		8.00	%
Total risk-based capital ratio ⁽⁴⁾	36,053		13.60	%	21,208		8.00	%	27,835		10.50	%	26,510		10.00	%


												Payment Due by Period
	Payment Due by Period											Less Than One Year		One to Three Years		More than Three Years to Five Years		Over Five Years		Total
	Less Than One Year		One to Three Years		More than Three Years to Five Years		Over Five Years		Total			(In Thousands)
	(In Thousands)
At December 31, 2017:
At December 31, 2020:											At December 31, 2020:
Advances from the FHLBB	$	514,314	$	295,954	$	64,066	$	15,575	$	889,909	Advances from the FHLBB	$	623,611	$	8,805	$	5,342	$	11,091	$	648,849
Subordinated debentures and notes	—		—		—		83,271		83,271		Subordinated debentures and notes	—		—		—		83,746		83,746
Other borrowed funds	47,639		—		—		—		47,639		Other borrowed funds	87,652		—		—		—		87,652
Loan commitments ⁽¹⁾	1,215,744		—		—		—		1,215,744		Loan commitments (1)	1,693,999		—		—		—		1,693,999
Occupancy lease commitments ⁽²⁾	4,921		7,550		5,731		10,138		28,340		Occupancy lease commitments (2)	6,077		10,066		5,557		5,064		26,764
Service provider contracts ⁽³⁾	22,549		54,896		28,683		14,953		121,081		Service provider contracts (3)	28,300		86,077		50,323		25,735		190,435
Postretirement benefit obligations ⁽⁴⁾	425		1,325		1,099		16,849		19,698		Postretirement benefit obligations (4)	515		1,778		1,721		14,925		18,939
	$	1,805,592	$	359,725	$	99,579	$	140,786	$	2,405,682		$	2,440,154	$	106,726	$	62,943	$	140,561	$	2,750,384


	Estimated Exposure to Net Interest Income over Twelve-Month Horizon Beginning
	December 31, 2020				December 31, 2019
Gradual Change in Interest Rate Levels	Dollar Change		Percent Change		Dollar Change		Percent Change
	(Dollars in Thousands)
Up 300 basis points	$	19,249	7.1	%	$	29,795	11.5	%
Up 200 basis points	10,698		3.9	%	12,478		4.8	%
Up 100 basis points	5,193		1.9	%	6,265		2.4	%
Down 100 basis points	(5,999)		(2.2)	%	(11,100)		(4.3)	%



	Estimated Exposure to Net Interest Income over Twelve-Month Horizon Beginning
	December 31, 2017					December 31, 2016
Gradual Change in Interest Rate Levels	Dollar Change			Percent Change		Dollar Change			Percent Change
	(Dollars in Thousands)
Up 300 basis points	$	11,494		4.9	%	$	6,403		3.0	%
Up 200 basis points	8,179			3.5	%	4,420			2.1	%
Up 100 basis points	4,434			1.9	%	2,288			1.1	%
Down 100 basis points	(10,512		)	-4.5	%	(5,196		)	-2.5	%


	Estimated Percent Change in Economic Value of Equity					Estimated Percent Change in Economic Value of Equity
Parallel Shock in Interest Rate Levels	At December 31, 2017		At December 31, 2016		Parallel Shock in Interest Rate Levels	At December 31, 2020		At December 31, 2019
Up 300 basis points	-0.7	%	-4.6	%	Up 300 basis points	11.2	%	6.0	%
Up 200 basis points	—	%	-4.4	%	Up 200 basis points	8.3	%	5.1	%
Up 100 basis points	1.0	%	-1.6	%	Up 100 basis points	5.4	%	3.3	%
Down 100 basis points	-7.1	%	-6.4	%	Down 100 basis points	(13.6)	%	(7.2)	%


	One Year or Less			More than One Year to Two Years			More than Two Years to Three Years			More than Three Years to Five Years			More than Five Years			Total				One Year or Less			More than One Year to Two Years			More than Two Years to Three Years			More than Three Years to Five Years			More than Five Years			Total
	(Dollars in Thousands)																			(Dollars in Thousands)
Interest-earning assets ⁽¹⁾:																			Interest-earning assets (1):
Short-term investments	$	35,383		$	—		$	—		$	—		$	—		$	35,383		Short-term investments	$	398,848		$	—		$	—		$	—		$	—		$	398,848
Weighted average rate	1.50		%	—		%	—		%	—		%	—		%	1.50		%	Weighted average rate	0.09		%	—		%	—		%	—		%	—		%	0.09		%
Investment securities ^{(1) (3)}	99,803			81,717			68,659			191,128			208,547			649,854			Investment securities (1) (3)	167,704			162,898			116,370			116,363			182,486			745,821
Weighted average rate	2.03		%	1.90		%	1.88		%	2.00		%	2.14		%	2.03		%	Weighted average rate	2.58		%	2.63		%	2.79		%	2.61		%	2.67		%	2.65		%
Commercial real estate loans ⁽¹⁾	1,581,185			428,655			372,345			548,368			145,224			3,075,777			Commercial real estate loans (1)	2,103,116			505,143			417,010			541,151			257,406			3,823,826
Weighted average rate	3.97		%	4.33		%	4.36		%	4.44		%	4.39		%	4.17		%	Weighted average rate	2.93		%	4.42		%	4.56		%	4.20		%	3.56		%	3.53		%
Commercial loans and leases ⁽¹⁾	756,970			303,303			226,532			263,360			73,946			1,624,111			Commercial loans and leases (1)	912,092			835,142			241,968			230,137			55,562			2,274,901
Weighted average rate	5.72		%	6.14		%	6.10		%	6.22		%	3.39		%	5.83		%	Weighted average rate	5.39		%	3.37		%	6.56		%	5.87		%	4.81		%	4.81		%
Consumer loans ⁽¹⁾	654,696			138,562			85,419			95,083			57,031			1,030,791			Consumer loans (1)	663,047			152,919			114,777			142,760			97,326			1,170,829
Weighted average rate	4.02		%	3.87		%	3.88		%	3.93		%	3.17		%	3.93		%	Weighted average rate	3.33		%	3.95		%	3.97		%	3.92		%	3.58		%	3.56		%
Total interest-earning assets	3,128,037			952,237			752,955			1,097,939			484,748			6,415,916			Total interest-earning assets	4,244,807			1,656,102			890,125			1,030,411			592,780			8,414,225
Weighted average rate	4.32		%	4.63		%	4.60		%	4.40		%	3.13		%	4.32		%	Weighted average rate	3.24		%	3.67		%	4.80		%	4.36		%	3.40		%	3.64		%

Interest-bearing liabilities ⁽¹⁾:																			Interest-bearing liabilities (1):
NOW accounts	$	—		$	—		$	—		$	—		$	350,568		$	350,568		NOW accounts	$	—		$	—		$	—		$	—		$	513,948		$	513,948
Weighted average rate	—		%	—		%	—		%	—		%	0.06		%	0.06		%	Weighted average rate	—		%	—		%	—		%	—		%	0.09		%	0.09		%
Savings accounts	—			—			—			—			646,359			646,359			Savings accounts	—			—			—			—			701,659			701,659
Weighted average rate	—		%	—		%	—		%	—		%	0.25		%	0.25		%	Weighted average rate	—		%	—		%	—		%	—		%	0.13		%	0.13		%
Money market savings accounts	1,719,948			—			—			—			4,415			1,724,363			Money market savings accounts	2,018,977			—			—			—			—			2,018,977
Weighted average rate	0.56		%	—		%	—		%	—		%	—		%	0.56		%	Weighted average rate	0.31		%	—		%	—		%	—		%	—		%	0.31		%
Certificates of deposit ⁽¹⁾	711,364			300,372			90,663			103,392			1,679			1,207,470			Certificates of deposit (1)	1,138,804			140,481			61,302			49,411			—			1,389,998
Weighted average rate	1.00		%	1.48		%	1.87		%	1.99		%	0.03		%	1.27		%	Weighted average rate	1.39		%	1.19		%	2.44		%	2.13		%	—		%	1.44		%
Brokered deposits																			Brokered deposits	694,007			—			—			(98)			—			693,909
Weighted average rate																			Weighted average rate	0.43		%	—		%	—		%	—		%	—		%	0.43		%
Borrowed funds ⁽¹⁾	675,707			240,121			16,589			5,963			82,439			1,020,819			Borrowed funds (1)	723,027			6,641			5,926			4,659			79,994			820,247
Weighted average rate	1.32		%	1.75		%	0.64		%	2.04		%	5.86		%	1.78		%	Weighted average rate	0.98		%	4.61		%	1.71		%	1.86		%	1.47		%	1.04		%
Total interest-bearing liabilities	3,107,019			540,493			107,252			109,355			1,085,460			4,949,579			Total interest-bearing liabilities	4,574,815			147,122			67,228			53,972			1,295,601			6,138,738
Weighted average rate	0.83		%	1.60		%	1.68		%	1.99		%	0.61		%	0.91		%	Weighted average rate	0.70		%	—		%	2.38		%	2.12		%	0.20		%	0.64		%
Interest sensitivity gap ⁽²⁾	$	21,018		$	411,744		$	645,703		$	988,584		$	(600,712	)	$	1,466,337		Interest sensitivity gap (2)	$	(330,008)		$	1,508,980		$	822,897		$	976,439		$	(702,821)		$	2,275,487
Cumulative interest sensitivity gap	$	21,018		$	432,762		$	1,078,465		$	2,067,049		$	1,466,337					Cumulative interest sensitivity gap	$	(330,008)		$	1,178,972		$	2,001,869		$	2,978,308		$	2,275,487
Cumulative interest sensitivity gap as a percentage of total assets	0.31		%	6.38		%	15.91		%	30.49		%	21.63		%				Cumulative interest sensitivity gap as a percentage of total assets	(3.69)		%	13.18		%	22.39		%	33.31		%	25.45		%
Cumulative interest sensitivity gap as a percentage of total interest-earning assets	0.33		%	6.75		%	16.81		%	32.22		%	22.85		%				Cumulative interest sensitivity gap as a percentage of total interest-earning assets	(3.92)		%	14.01		%	23.79		%	35.40		%	27.04		%



			Pages
Reports of Independent Registered Public Accounting Firm			F-~~F-3~~3
Consolidated Balance Sheets as of December 31, ~~2017~~2020 and ~~2016~~2019			F-~~F-4~~6
Consolidated Statements of Income for the years ended December 31, ~~2017, 2016,~~2020, 2019, and ~~2015~~2018			F-~~F-5~~7
Consolidated Statements of Comprehensive Income for the years ended December 31, ~~2017, 2016,~~2020, 2019, and ~~2015~~2018			F-~~F-6~~8
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31, ~~2017, 2016,~~2020, 2019, and ~~2015~~2018			F-~~F-7~~9 - F-9
Consolidated Statements of Cash Flows for the years ended December 31, ~~2017, 2016,~~2020, 2019, and ~~2015~~2018			F-~~F-10~~12 - F-11
Notes to Consolidated Financial Statements			F-~~F-12~~13 - F-96



Exhibit		Description
~~1.1~~			Underwriting Agreement, dated September 11, 2014, by and among Brookline Bancorp, Inc., Sterne, Agee & Leach, Inc. and Sandler O’Neil + Partners, L.P., as representatives of the several underwriters named therein (incorporated by reference to Exhibit 1.1 of the Company’s Current Report on Form 8-K filed on September 12, 2014)
~~2.1~~			Agreement and Plan of Merger dated as of September 20, 2017 by and among Brookline Bancorp, Inc., Brookline Bank, and First Commons Bank, N.A. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2017)
3.1		Certificate of Incorporation of Brookline Bancorp, Inc. ~~(incorporated by reference to Exhibit 3.1 (included in Exhibit 2) of the Registration Statement on Form S-1 filed by the Company on April 10, 2002 (Registration No. 333-85980))~~
3.2		Amended and Restated Bylaws of Brookline Bancorp, Inc. (incorporated by reference to Exhibit 3.02 of the Company's Current Report on Form 8-K filed on January 10, 2013)
4		Form of Common Stock Certificate of the Company (incorporated by reference to Exhibit 4 of the Registration Statement on Form S-1 filed by the Company on April 10, 2002 (Registration No. 333-85980))
4.1			Subordinated Indenture, dated as of September 16, 2014, between Brookline Bancorp, Inc. and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.1 of the Company’s Current Report on Form 8-K filed on September 17, 2014)
4.2			First Supplemental Indenture, dated as of September 16, 2014, between Brookline Bancorp, Inc. and U.S. Bank National Association, as Trustee (incorporated by reference to Exhibit 4.2 of the Company’s Current Report on Form 8-K filed on September 17, 2014)
4.3			Form of Global Note to represent the 6.000% Fixed-to-Floating Rate Subordinated Notes due September 15, 2029 ~~(incorporated by reference to~~(contained in the First Supplemental Indenture included as Exhibit ~~4.3 of the Company’s Current Report on Form 8-K filed on September 17, 2014)~~4.2)
~~10.1+~~





4.4		Description of Registrant’s Securities
10.1+		Brookline Bancorp, Inc. Deferred Compensation Plan effective January 1, 2011 (incorporated by reference to Exhibit 99.1 of the Company's Current Report on Form 8-K filed on September 16, 2010)
~~10.1.1~~	~~Form of Voting Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2017)~~
~~10.2+~~
10.2+		Brookline Bancorp, Inc. 2003 Stock Option Plan ~~(incorporated by reference to Exhibit A of the Company's Proxy Statement filed on July 23, 2003)~~
~~10.2.1~~	Consulting Agreement by and between Brookline Bank and Anthony G. Nuzzo dated September 20, 2017 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on September 21, 2017)
~~10.3+~~10.4+			~~Brookline Bancorp, Inc. 2003 Recognition and Retention Plan (incorporated by reference to Exhibit B of the Company's Proxy Statement filed on July 23, 2003)~~
~~10.4+~~	Brookline Bancorp, Inc. 2011 Restricted Stock Plan ~~(incorporated by reference to Appendix A of the Company's Proxy Statement filed on March 17, 2011)~~
10.5+			Brookline Bancorp, Inc. 2014 Equity Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on May 9, 2014)



10.5.1+		Form of Restricted Stock Award Agreement under the Brookline Bancorp, Inc. 2014 Equity Incentive Plan
~~Exhibit~~10.6+		~~Description~~
~~10.6+~~	Employment Agreement, dated as of April 11, 2011, by and among Brookline Bancorp, Inc., Brookline Bank and Paul A. Perrault (incorporated by reference to Exhibit 10.10 of the Company's Current Report on Form 8-K filed on April 15, 2011)
~~10.7+~~10.6.1				~~Retirement~~ Amendment to the Employment Agreement, dated ~~as of December 23, 2010,~~July 25, 2018, by and ~~between~~among the Brookline Bancorp, Inc., Brookline Bank and ~~Charles H. Peck (incorporated by reference to Exhibit 10.11 of the Company's Current Report on Form 8-K filed on December 27, 2010)~~Paul Perrault.
10.8+				Employment Letter Agreement, dated as of April 19, 2011, by and between Brookline Bancorp, Inc. and Mark J. Meiklejohn (incorporated by reference to Exhibit 10.3 of Pre-effective Amendment No. 2 of the Registration Statement on Form S-4 filed by the Company on July 25, 2011 (Registration Number 333-174731))
~~10.9+~~
10.9+		Form of Amended Change in Control Agreement (incorporated by reference to Exhibit 10.1 of the Company's Quarterly Report on Form 10-Q filed May 9, 2014)
~~14.1~~				~~Code of Ethics for Financial Professionals (incorporated by reference to Exhibit 14 to Form 10-K filed on March 10, 2006)~~
21		Subsidiaries of the Registrant (incorporated by reference in Part I, Item 1. "Business—General" of this Annual Report on Form 10-K)
23*			Consent of Independent Registered Public Accounting Firm
31.1*			Rule 13a-14(a)/15d-14(a) Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*			Rule 13a-14(a)/15d-14(a) Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**			Rule 13a-14(b) Certifications of the Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**			Rule 13a-14(b) Certifications of the Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
~~101~~
101.INS	~~The following materials from Brookline Bancorp, Inc.'s Annual Report on Form 10-K for~~	XBRL Instance Document - the ~~year ended December 31, 2017 were formatted~~instance document does not appear in ~~xBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets as of December 31, 2017~~the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted in Inline XBRL and 2016, (ii) Consolidated Statements of Income for the years ended December 31, 2017, 2016 and 2015, (iii) Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016 and 2015, (iv) Consolidated Statements of Changesincluded in Equity for the years ended December 31, 2017, 2016 and 2015, (v) Consolidated Statements of Cash Flows for the years ended December 31, 2017, 2016 and 2015 and (vi) Notes to Consolidated Financial Statements.Exhibit 101)


~~(c)~~	~~Other Required Financial Statements and Schedules~~



Date: February ~~28, 2018~~26, 2021	BROOKLINE BANCORP, INC.
	By:	/s/ PAUL A. PERRAULT
		Paul A. Perrault President and Chief Executive Officer



/s/ PAUL A. PERRAULT						/s/ CARL M. CARLSON
Paul A. Perrault						Carl M. Carlson
Chief Executive Officer (Principal Executive Officer)						Chief Financial Officer (Principal Financial Officer)



	At December 31, 2017
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	151,483	$	70	$	1,629	$	149,924
GSE CMOs	131,082		27		4,087		127,022
GSE MBSs	191,281		354		2,322		189,313
SBA commercial loan asset-backed securities	73		—		1		72
Corporate debt obligations	62,811		110		238		62,683
U.S. treasury bonds	8,785		7		62		8,730
Trust preferred securities	1,471		—		73		1,398
Marketable equity securities	978		13		9		982
Total investment securities available-for-sale	$	547,964	$	581	$	8,421	$	540,124
Investment securities held-to-maturity:
GSE debentures	$	41,612	$	—	$	811	$	40,801
GSEs MBSs	13,923		—		218		13,705
Municipal obligations	53,695		159		337		53,517
Foreign government obligations	500		—		—		500
Total investment securities held-to-maturity	$	109,730	$	159	$	1,366	$	108,523


	At December 31, 2020
	Less than Twelve Months				Twelve Months or Longer				Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses
	(In Thousands)
Investment securities available-for-sale:
GSE debentures	$	72,745	$	630	$	0	$	0	$	72,745	$	630
GSE CMOs	832		7		872		5		1,704		12
GSE MBSs	2,102		5		97		0		2,199		5




U.S. Treasury bonds	9,750		80		0		0		9,750		80
Foreign government obligations	0		0		496		4		496		4



Temporarily impaired investment securities available-for-sale	85,429		722		1,465		9		86,894		731






Total temporarily impaired investment securities	$	85,429	$	722	$	1,465	$	9	$	86,894	$	731



	At December 31, 2017
	Commercial Real Estate		Multi- Family Mortgage		Construction		Commercial		Equipment Financing		Condominium Association		Other Consumer		Total
	(In Thousands)
Originated:
Loan rating:
Pass	$	2,054,376	$	735,313	$	139,278	$	670,265	$	850,006	$	52,619	$	14,628	$	4,516,485
OAEM	8,889		—		—		7,691		3,630		—		—		20,210
Substandard	5,926		608		860		17,681		5,012		—		39		30,126
Doubtful	201		—		—		1,188		3,326		—		—		4,715
Total originated	2,069,392		735,921		140,138		696,825		861,974		52,619		14,667		4,571,536

Acquired:
Loan rating:
Pass	94,244		24,459		—		6,643		4,501		—		104		129,951
OAEM	9,839		—		—		265		—		—		1		10,105
Substandard	1,494		290		—		1,271		13		—		—		3,068
Doubtful	—		—		—		—		—		—		—		—
Total acquired	105,577		24,749		—		8,179		4,514		—		105		143,124

Total loans	$	2,174,969	$	760,670	$	140,138	$	705,004	$	866,488	$	52,619	$	14,772	$	4,714,660