株探米国株
英語
エドガーで原本を確認する
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549

FORM 10-Q

(Mark One) 
☒
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026

OR
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from           N/A           to                                 .
Commission file number 001-15781

BEACON FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-3510455
(State or other jurisdiction of
incorporation or organization)		 (I.R.S. Employer Identification No.)
131 Clarendon Street
Boston MA
 02116
(Address of principal executive offices) (Zip Code)
(617) 425-4600
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock BBT The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.  Yes  ☒  No  ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes  ☒  No  ☐
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12-b-2 of the Exchange Act.
Large accelerated filer ☒ Accelerated filer ☐
Non-accelerated filer
☐
Smaller Reporting Company ☐
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes   ☐  No  ☒   
                                                                                                                                              
At April 30, 2026, the number of shares of common stock, par value $0.01 per share, outstanding was 83,816,086.


BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
FORM 10-Q
Table of Contents
Page
Item 1.
   
   
   
   
   
   
   
 
i

Glossary of Acronyms and Terms
2021 Plan Brookline Bancorp, Inc. 2021 Stock Option and Incentive Plan
2025 Plan Beacon Financial Corporation 2025 Stock Option and Incentive Plan
ACL Allowance for Credit Losses
AFX American Financial Exchange
ALCO Asset/Liability Committee
Bank Beacon Bank & Trust
C&I Commercial and industrial
Clarendon Private Clarendon Private, LLC
CMOs Collateralized mortgage obligations
CODM Chief Operating Decision Maker
Company Beacon Financial Corporation and its subsidiaries
Core deposits
Demand checking, NOW, non-payroll money market and savings accounts
CRE Commercial real estate
Customer Deposits Total deposits excluding brokered deposits and payroll deposits
Eastern Funding Eastern Funding, LLC
EPS Earnings per Share
EVE Economic Value of Equity
FASB Financial Accounting Standards Board
FDIC Federal Deposit Insurance Corporation
FHLB Federal Home Loan Bank of Boston
FHLMC Federal Home Loan Mortgage Corporation
FNMA Federal National Mortgage Association
FRB Board of Governors of the Federal Reserve System
GAAP U.S generally accepted accounting principles
GNMA Government National Mortgage Association
GSEs U.S. Government-sponsored enterprises
IBORs Interbank Offered Rates
Legacy Berkshire Berkshire Hills Bancorp, Inc. prior to the closing of the Transaction
LEQ Loan equivalency
MBSs Mortgage-backed securities
OAEM Other Assets Especially Mentioned
OCI Other comprehensive income
OREO Other Real Estate Owned
PAM
Proportional amortization method
Plans The 2021 Plan and the 2025 Plan
SBA Small Business Administration
SEC U.S. Securities and Exchange Commission
SOFR
Secured Overnight Financing Rate
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PART I — FINANCIAL INFORMATION
Item 1. Unaudited Consolidated Financial Statements
BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Balance Sheets
At March 31, 2026 At December 31, 2025
(In Thousands Except Share Data)
ASSETS
Cash and due from banks $ 185,692  $ 201,557 
Short-term investments 927,256  1,840,188 
Total cash and cash equivalents 1,112,948  2,041,745 
Investment securities available-for-sale 1,718,710  1,688,768 
Total investment securities 1,718,710  1,688,768 
Allowance for investment security credit losses (141) (94)
Net investment securities 1,718,569  1,688,674 
Loans and leases:
Commercial real estate loans 9,957,408  10,012,094 
Commercial loans and leases 4,011,974  3,947,363 
Consumer loans 3,954,774  4,070,095 
Total loans and leases 17,924,156  18,029,552 
Allowance for loan and lease losses (244,377) (252,839)
Net loans and leases 17,679,779  17,776,713 
Restricted equity securities 97,441  87,438 
Premises and equipment, net of accumulated depreciation of $116,239 and $112,926, respectively
 161,141  162,474 
Right-of-use asset operating leases 84,851  82,817 
Deferred tax asset 142,827  149,487 
Goodwill 355,269  351,613 
Identified intangible assets, net of accumulated amortization of $37,446 and $29,118, respectively
 181,234  189,562 
OREO and repossessed assets, net 2,623  2,591 
Cash surrender value of bank-owned life insurance policies 336,980  334,442 
Other assets 353,954  352,816 
Total assets $ 22,227,616  $ 23,220,372 
LIABILITIES AND STOCKHOLDERS' EQUITY    
Deposits:    
Demand checking accounts $ 3,861,000  $ 4,032,529 
Interest-bearing deposits:
NOW accounts 1,520,600  1,445,894 
Savings accounts 3,088,857  2,954,029 
Money market accounts 4,393,607  4,636,548 
Payroll deposits accounts 1,213,861  1,878,758 
Certificate of deposit accounts 4,085,511  4,156,540 
Brokered deposit accounts 128,844  410,359 
 Interest-bearing deposits 14,431,280  15,482,128 
Total deposits 18,292,280  19,514,657 
Borrowed funds:    
Advances from the FHLB 822,091  555,788 
Subordinated debentures and notes 198,989  198,572 
Other borrowed funds 51,423  34,000 
Total borrowed funds 1,072,503  788,360 
Operating lease liabilities 92,820  90,713 
Reserve for unfunded credits 16,555  13,746 
Accrued expenses and other liabilities 248,677  316,835 
Total liabilities 19,722,835  20,724,311 
Commitments and contingencies (Note 12)
Stockholders' Equity:    
Common stock, $0.01 par value; 200,000,000 shares authorized; 89,576,403 shares issued and 89,576,403 shares issued, respectively
 896  896 
Additional paid-in capital 2,172,982  2,171,885 
Retained earnings 504,976  485,862 
Accumulated other comprehensive (loss) income (31,411) (20,002)
Treasury stock, at cost; 5,548,772 shares and 5,545,511 shares, respectively
 (142,662) (142,580)
Total stockholders' equity 2,504,781  2,496,061 
Total liabilities and stockholders' equity $ 22,227,616  $ 23,220,372 
See accompanying notes to unaudited consolidated financial statements.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Income
Three Months Ended March 31,
2026 2025
(In Thousands Except Share Data)
Interest and dividend income:
Loans and leases $ 266,935  $ 143,309 
Debt securities 16,510  6,765 
Restricted equity securities 843  1,203 
Short-term investments 8,096  2,451 
Total interest and dividend income 292,384  153,728 
Interest expense:
Deposits 93,056  53,478 
Borrowed funds 8,554  14,420 
Total interest expense 101,610  67,898 
Net interest income 190,774  85,830 
Provision for credit losses on loans 7,899  5,974 
Provision for credit losses on investments 47  12 
Net interest income after provision for credit losses 182,828  79,844 
Non-interest income:
Deposit fees 8,347  2,361 
Loan fees 2,366  393 
Loan level derivative income 775  70 
Gain on sales of loans and leases held-for-sale 2,689  24 
Wealth management fees 4,464  1,491 
Other 5,306  1,321 
Total non-interest income 23,947  5,660 
Non-interest expense:
Compensation and employee benefits 69,650  35,853 
Occupancy 13,097  5,721 
Equipment and data processing 20,127  7,012 
Professional services 2,462  1,726 
FDIC insurance 4,320  2,037 
Advertising and marketing 1,679  868 
Amortization of identified intangible assets 8,328  1,430 
Merger and restructuring expense 13,025  971 
Other 8,134  4,404 
Total non-interest expense 140,822  60,022 
Income before provision for income taxes 65,953  25,482 
Provision for income taxes 19,736  6,382 
Net income $ 46,217  $ 19,100 
Earnings per common share:
Basic $ 0.55  $ 0.21 
Diluted 0.55  0.21 
Weighted average common shares outstanding:
Basic 83,816,086  89,103,510 
Diluted 83,903,440  89,567,747 
Dividends paid per common share $ 0.3225  $ 0.135 

See accompanying notes to unaudited consolidated financial statements.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Comprehensive Income
Three Months Ended March 31,
2026 2025
(In Thousands)
Net income $ 46,217  $ 19,100 
Investment securities available-for-sale:
Unrealized securities holding gains (losses) (15,271) 12,581 
    Income tax (expense) benefit 3,926  (2,844)
Net unrealized securities holding gains (losses) before reclassification adjustments, net of taxes (11,345) 9,737 
Cash flow hedges:
Change in fair value of cash flow hedges (155) 348 
   Income tax (expense) benefit 43  (98)
Net change in fair value of cash flow hedges, net of taxes (112) 250 
Less reclassification adjustment for change in fair value of cash flow hedges:
         Gain (loss) on change in fair value of cash flow hedges (67) (534)
Income tax (expense) benefit 19  137 
Net reclassification adjustment for change in fair value of cash flow hedges (48) (397)
Net change in fair value of cash flow hedges (64) $ 647 
Other comprehensive gain (loss), net of taxes (11,409) 10,384 
Comprehensive income 34,808  29,484 



See accompanying notes to unaudited consolidated financial statements.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Changes in Stockholders' Equity
Three Months Ended March 31, 2026 and 2025

Common
Stock		 Additional
Paid-in
Capital		 Retained
Earnings		 Accumulated
Other
Comprehensive
Income (Loss)		 Treasury
Stock		 Total Stockholders'
Equity
  (In Thousands)
Balance at December 31, 2025 $ 896  $ 2,171,885  $ 485,862  $ (20,002) $ (142,580) $ 2,496,061 
Net income —  46,217  —  —  46,217 
Other comprehensive income (loss) —  —  —  (11,409) —  (11,409)
Common stock dividends of $0.3225 per share
 —  —  (27,034) —  —  (27,034)
Restricted stock awards issued, net of awards surrendered —  82  —  —  (82) — 
Compensation under recognition and retention plans —  1,015  (69) —  —  946 
Balance at March 31, 2026 $ 896  $ 2,172,982  $ 504,976  $ (31,411) $ (142,662) $ 2,504,781 
Common
Stock		 Additional
Paid-in
Capital		 Retained
Earnings		 Accumulated
Other
Comprehensive
Income (Loss)		 Treasury
Stock		 Total Stockholders'
Equity
  (In Thousands)
Balance at December 31, 2024 $ 970  $ 902,584  $ 458,943  $ (52,882) $ (87,676) $ 1,221,939 
Net income —  —  19,100  —  —  19,100 
Other comprehensive income (loss) —  —  —  10,384  —  10,384 
Common stock dividends of $0.135 per share
 —  —  (12,029) —  —  (12,029)
Restricted stock awards issued, net of awards surrendered —  168  —  —  (208) (40)
Compensation under recognition and retention plan —  944  (116) —  —  828 
Balance at March 31, 2025 $ 970  $ 903,696  $ 465,898  $ (42,498) $ (87,884) $ 1,240,182 




See accompanying notes to unaudited consolidated financial statements.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Unaudited Consolidated Statements of Cash Flows
Three Months Ended March 31,
2026 2025
(In Thousands)
Cash flows from operating activities:
Net income $ 46,217  $ 19,100 
Adjustments to reconcile net income to net cash provided from operating activities:
Provision for credit losses 7,946  5,986 
Deferred income tax expense 10,610  1,365 
Depreciation of premises and equipment 3,312  1,830 
Accretion of investment securities premiums and discounts, net (5,299) (1,266)
Accretion of premiums and discounts and deferred loan and lease origination costs, net (9,372) (1,334)
Amortization of identified intangible assets 8,328  1,430 
Amortization of debt issuance costs 1  25 
Amortization of other acquisition fair value adjustments, net 1,657  152 
Gain on sales of loans and leases held-for-sale (2,689) (24)
Write-down of other repossessed assets —  281 
Compensation under recognition and retention plans 946  828 
Net change in:
Cash surrender value of bank-owned life insurance (2,539) (512)
Other assets (4,881) 28,931 
Accrued expenses and other liabilities (68,086) (48,778)
Net cash (used for) provided from operating activities (13,849) 8,014 
Cash flows from investing activities:
Proceeds from maturities, calls, and principal repayments of investment securities available-for-sale 89,225  27,179 
Purchases of investment securities available-for-sale (129,139) (651)
Proceeds from redemption/sales of restricted equity securities 20,528  18,326 
Purchase of restricted equity securities (30,531) (2,708)
Proceeds from sales of loans and leases net 37,800  8,000 
Net decrease in loans and leases 66,054  122,110 
(Purchase) sale of premises and equipment, net (2,249) 481 
Proceeds from sales of other repossessed assets 20  122 
Net cash provided from investing activities 51,708  172,859 
(Continued)
See accompanying notes to unaudited consolidated financial statements.
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Three Months Ended March 31,
2026 2025
(In Thousands)
Cash flows from financing activities:
(Decrease) increase in demand checking, NOW, savings and money market accounts (881,751) 70,532 
Decrease in certificates of deposit and brokered deposits (341,513) (60,836)
Proceeds from FHLB advances 1,151,346  222,000 
Repayment of FHLB advances (885,127) (620,078)
Increase in other borrowed funds, net 17,423  34,025 
Decrease in mortgagors' escrow accounts, net —  (611)
Payment of dividends on common stock (27,034) (12,029)
Net cash used for financing activities (966,656) (366,997)
Net decrease in cash and cash equivalents (928,797) (186,124)
Cash and cash equivalents at beginning of period 2,041,745  543,670 
Cash and cash equivalents at end of period $ 1,112,948  $ 357,546 
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest on deposits, borrowed funds and subordinated debt $ 100,552  $ 69,004 
Income taxes 3,678  1,623 
Non-cash investing activities:
Transfer from loans to other repossessed assets 52  217 


See accompanying notes to unaudited consolidated financial statements.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements
(1) Basis of Presentation
Overview
The Company is a bank holding company (within the meaning of the Bank Holding Company Act of 1956, as amended) and the parent of Beacon Bank & Trust, a Massachusetts-chartered trust company. The Bank is a member of the Federal Reserve System. The Company's primary business is to provide commercial, business and retail banking services to its corporate, municipal and retail customers through the Bank and its non-bank subsidiaries. The Company is also the parent of Clarendon Private. Clarendon Private is a registered investment advisor with the SEC. Through Clarendon Private and the Trust and Investments Division of the Bank, the Company offers a wide range of wealth management services to individuals, families, endowments and foundations to help these clients meet their long-term financial goals.
Beacon Bank & Trust operates 144 full-service banking offices in New England and New York with three additional lending offices. The Bank's activities include acceptance of commercial, municipal and retail deposits, origination of mortgage loans on commercial and residential real estate located principally in New England and New York, origination of commercial loans and leases, investment in debt and equity securities, and the offering of cash management and wealth, trust and investment advisory services. The Company also provides specialty equipment financing through its subsidiary Eastern Funding and provides small business lending through its subsidiary 44 Business Capital, both of which operate as national business lines.
The Company and the Bank are supervised, examined and regulated by the FRB. As a Massachusetts-chartered trust company, the Bank is subject to supervision, examination and regulation by the Massachusetts Division of Banks. Clarendon Private is also subject to regulation by the SEC.
The FDIC offers insurance coverage on all deposits up to $250,000 per depositor. As FDIC-insured depository institutions, the Bank is also subject to supervision, examination and regulation by the FDIC.
Completion of Merger of Equals
On September 1, 2025, the Company completed its merger of equals with Brookline Bancorp, Inc. (“Legacy Brookline”), pursuant to the Agreement and Plan of Merger, dated as of December 16, 2024, by and among the Company, Commerce Acquisition Sub, Inc. and Legacy Brookline (the “Merger Agreement”). On September 1, 2025, Commerce Acquisition Sub, Inc. merged with and into Legacy Brookline (the “Merger”), immediately followed by the merger of Legacy Brookline with and into the Company (the “Holdco Merger”), with the Company as the resulting corporation. The Company also changed its name from Berkshire Hills Bancorp, Inc. to Beacon Financial Corporation and changed the New York Stock Exchange ticker symbol for its common stock from “BHLB” to “BBT.”
Immediately following the Holdco Merger, Berkshire Bank, a wholly owned subsidiary of the Company, Bank Rhode Island, a wholly owned subsidiary of Legacy Brookline, and PCSB Bank, a wholly owned subsidiary of Legacy Brookline, each merged with and into Brookline Bank, a wholly owned subsidiary of Legacy Brookline, with Brookline Bank as the surviving bank (the “Bank Mergers” and, together with the Merger and the Holdco Merger, the “Transaction”). In connection with the Bank Mergers, Brookline Bank changed its name to Beacon Bank & Trust.
The Transaction was treated as a business combination under ASC 805 and was accounted for as a reverse merger using the acquisition method of accounting. Therefore, Legacy Brookline was deemed the acquirer for financial reporting purposes even though Legacy Berkshire was the legal acquirer. As such, the historical financial statements of Legacy Brookline became the historical financial statements of the combined company.
Basis of Financial Statement Presentation
The unaudited consolidated financial statements of the Company presented herein have been prepared pursuant to the rules of the SEC for quarterly reports on Form 10-Q and do not include all of the information and note disclosures required by GAAP. In the opinion of management, all adjustments (consisting of normal recurring adjustments) and disclosures considered necessary for the fair presentation of the accompanying consolidated financial statements have been included. Interim results are not necessarily reflective of the results of the entire year. The accompanying unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report on Form 10-K for the fiscal year ended December 31, 2025. 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
The unaudited 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 changes in the near-term include the determination of the ACL and the determination of fair market values of assets and liabilities.
The judgments used by management in applying these critical accounting policies may be affected by a further and prolonged deterioration in the economic environment, which may result in changes to future financial results. For example, subsequent evaluations of the loan and lease portfolio, in light of the factors then prevailing, may result in significant changes in the allowance for loan and lease losses in future periods, and the inability to collect outstanding principal may result in increased loan and lease losses.
Reclassification
Certain previously reported amounts have been reclassified to conform to the current year's presentation.
Segment Reporting
An operating segment is defined as a component of a business for which separate financial information is available that is evaluated regularly by the CODM in deciding how to allocate resources and evaluate performance.
The Company is a bank holding company operating through a single business segment, which derives interest income on loan and lease products the Company offers to customers. Substantially all of the Company’s total revenues, pre-tax income, and assets is driven by the banking business.
The President and Chief Executive Officer of the Company acts as the Company’s CODM. The CODM regularly reviews comprehensive financial information with the reported measures focused on net interest income and net income. This financial information reviewed is consistent with the information presented within the Company’s financial statements.
The CODM uses the reported measures of net interest income and net income to assess performance by comparing to and monitoring against budget and prior year results. This information is used to manage resources to drive business and net earnings growth, including investment in key strategic priorities, as well as determine the Company's ability to return capital to shareholders.
(2) Recent Accounting Pronouncements
In November 2025, the FASB issued ASU 2025-08, "Financial Instruments - Credit Losses (Topic 326): Purchased Loans" ("ASU 2025-08"). This ASU aligns the initial recognition of the allowance for loan losses on purchased loans between PCD and non‑PCD assets by applying the gross‑up approach previously required only for PCD loans. The Company elected to adopt this ASU effective January 1, 2025, and applied it to the Transaction completed in the third quarter of 2025, as permitted under the guidance.
In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (subtopic 220-40): Disaggregation of Income Statement Expense". This ASU updates the disclosure and presentation requirements for certain expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The adoption is not expected to have a material impact on the Company’s consolidated financial statements.
(3) Investment Securities
Investment Securities Available-for-Sale
The following tables set forth investment securities available-for-sale at the dates indicated:
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
  At March 31, 2026
  Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Estimated
Fair Value
  (In Thousands)
Investment securities available-for-sale:
GSE debentures
 $ 191,035  $ 257  $ 12,696  $ 178,596 
GSE CMOs 563,834  797  11,050  553,581 
GSE MBSs 326,216  2,027  12,119  316,124 
Municipal obligations 225,345  3,570  427  228,488 
Corporate debt obligations 35,359  760  125  35,994 
U.S. Treasury bonds 419,142  876  14,591  405,427 
Foreign government obligations 500  —  —  500 
Total investment securities available-for-sale $ 1,761,431  $ 8,287  $ 51,008  $ 1,718,710 
  December 31, 2025
  Amortized
Cost		 Gross
Unrealized
Gains		 Gross
Unrealized
Losses		 Estimated
Fair Value
  (In Thousands)
Investment securities available-for-sale:
GSE debentures $ 185,449  $ 512  $ 12,284  $ 173,677 
GSE CMOs 500,446  2,784  6,660  496,570 
GSE MBSs 334,476  3,009  11,740  325,745 
Municipal obligations 231,924  8,305  13  240,216 
Corporate debt obligations 39,209  863  49  40,023 
U.S. Treasury bonds 424,214  1,727  13,904  412,037 
Foreign government obligations 500  —  —  500 
Total investment securities available-for-sale $ 1,716,218  $ 17,200  $ 44,650  $ 1,688,768 
As of March 31, 2026, the fair value of all investment securities available-for-sale was $1.7 billion, with net unrealized losses of $42.7 million, compared to a fair value of $1.7 billion and net unrealized losses of $27.5 million as of December 31, 2025. As of March 31, 2026, $1.0 billion, or 59.5% of the portfolio, had gross unrealized losses of $51.0 million, compared to $552.9 million, or 32.7% of the portfolio, with gross unrealized losses of $44.7 million as of December 31, 2025.
As of March 31, 2026 and December 31, 2025, the Company did not classify any securities as held to maturity; all securities were held as available-for-sale.
Investment Securities as Collateral
As of March 31, 2026 and December 31, 2025, respectively, $1.3 billion and $1.2 billion of investment securities were pledged as collateral for repurchase agreements; municipal deposits; treasury, tax and loan deposits; swap agreements; FRB borrowings; and FHLB borrowings. The Bank had no outstanding FRB borrowings as of March 31, 2026 and December 31, 2025.
Allowance for Credit Losses-Available-for-Sale Securities
For available-for-sale securities in an unrealized loss position, management first assesses whether (i) the Company intends to sell the security, or (ii) it is more likely than not that the Company will be required to sell the security before recovery of its amortized cost basis. If either criterion is met, any previously recognized allowances are charged-off and the security's amortized cost is written down to fair value through income. If neither criterion is met, the security is evaluated to determine whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency and any adverse conditions specifically related to the security, among other factors.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
If this assessment indicates that a credit loss exists, the present value of cash flows expected to be collected from the security is compared to the amortized cost basis of the security. If the present value of cash flows expected to be collected is less than the amortized cost basis, an allowance for credit loss is recorded, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through the ACL is recognized in OCI. Adjustments to the allowance are reported as a component of credit loss expense. Available-for-sale securities are charged-off against the allowance or, in the absence of any allowance, written down through income when deemed uncollectible or when either of the aforementioned criteria regarding intent or requirement to sell is met. The Company has made the accounting policy election to exclude accrued interest receivable on available-for-sale securities from the estimate of credit losses. Accrued interest receivables associated with debt securities available-for-sale totaled $8.0 million as of March 31, 2026, compared to $7.2 million as of December 31, 2025.
A debt security is placed on nonaccrual status at the time any principal or interest payments become more than 90 days delinquent or if full collection of interest or principal becomes uncertain. Accrued interest for a debt security placed on nonaccrual is reversed against interest income. There were no debt securities on nonaccrual status and therefore there was no accrued interest related to debt securities reversed against interest income for the three months ended March 31, 2026 and 2025.
Assessment for Available for Sale Securities for Impairment
Investment securities as of March 31, 2026 and December 31, 2025 that have been in a continuous unrealized loss position for less than twelve months or twelve months or longer are as follows:
  At March 31, 2026
  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 $ 35,401  $ 89  $ 112,099  $ 12,607  $ 147,500  $ 12,696 
GSE CMOs 421,535  4,422  48,411  6,628  469,946  11,050 
GSE MBSs 8,809  11  122,292  12,108  131,101  12,119 
Municipal obligations 29,286  236  7,194  191  36,480  427 
Corporate debt obligations 10,025  125  —  —  10,025  125 
U.S. Treasury bonds 9,813  181  217,385  14,410  227,198  14,591 
Total temporarily impaired investment securities $ 514,869  $ 5,064  $ 507,381  $ 45,944  $ 1,022,250  $ 51,008 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
  At December 31, 2025
  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 $ 32  $ 1  $ 103,884  $ 12,283  $ 103,916  $ 12,284 
GSE CMOs 68,184  460  45,145  6,200  113,329  6,660 
GSE MBSs 79  1  114,594  11,739  114,673  11,740 
Municipal obligations 9,721  11  391  2  10,112  13 
Corporate debt obligations 4,943  41  2,666  8  7,609  49 
U.S. Treasury bonds —  —  203,283  13,904  203,283  13,904 
Total temporarily impaired investment securities $ 82,959  $ 514  $ 469,963  $ 44,136  $ 552,922  $ 44,650 

The Company performs regular analyses of the investment securities available-for-sale portfolio to determine whether a decline in fair value indicates that an investment security is impaired. In making these impairment determinations, management considers, among other factors, projected future cash flows; credit subordination and the creditworthiness; capital adequacy and near-term prospects of the issuers.
Management also considers the Company's capital adequacy, interest-rate risk, liquidity and business plans in assessing whether it is more likely than not that the Company will sell or be required to sell the investment securities before recovery. If the Company determines that a security investment is impaired and that it is more likely than not that the Company will not sell or be required to sell the investment security before recovery of its amortized cost, the credit portion of the impairment loss is recognized in the Company's consolidated statement of income and the noncredit portion is recognized in accumulated other comprehensive income. The credit portion of the impairment represents the difference between the amortized cost and the present value of the expected future cash flows of the investment security. If the Company determines that a security is impaired and it is more likely than not that it will sell or be required to sell the investment security before recovery of its amortized cost, the entire difference between the amortized cost and the fair value of the security will be recognized in the Company's consolidated statement of income.
Investment Securities Available-For-Sale Impairment Analysis
The following discussion summarizes, by investment security type, the basis for evaluating if the applicable investment securities within the Company’s available-for-sale portfolio were impaired as of March 31, 2026. The Company has determined it is more likely than not that the Company will not sell or be required to sell the investment securities before recovery of its amortized cost. The Company's ability and intent to hold these investment securities until recovery is supported by the Company's strong capital and liquidity positions as well as its historically low portfolio turnover. If market conditions for investment securities worsen or the creditworthiness of the underlying issuers deteriorates, it is possible that the Company may recognize additional impairment in future periods.
In the following discussion, purchase activity excludes the impact of the Transaction.
U.S. Government-Sponsored Enterprises
The Company invests in securities issued by GSEs, including GSE debentures, MBSs, and CMOs. GSE securities include obligations issued by the FNMA, the FHLMC, the GNMA, the FHLB and the Federal Farm Credit Bank. As of March 31, 2026, the Company held GNMA MBSs and CMOs, and SBA commercial loan asset-backed securities in its available-for-sale portfolio with an estimated fair value of $345.0 million compared to $285.4 million as of December 31, 2025
As of March 31, 2026, the Company owned 31 GSE debentures with a total fair value of $178.6 million, and a net unrealized loss of $12.4 million. As of December 31, 2025, the Company held 38 GSE debentures with a total fair value of $173.7 million, with a net unrealized loss of $11.8 million. As of March 31, 2026, 21 of the 31 securities in this portfolio were in an unrealized loss position. As of December 31, 2025, 17 of the 38 securities in this portfolio were in an unrealized loss position.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
During the three months ended March 31, 2026 the Company purchased $20.0 million of GSE debentures compared to the same period in 2025 when the Company did not purchase any GSE debentures.
As of March 31, 2026, the Company owned 144 GSE CMOs with a total fair value of $553.6 million and a net unrealized loss of $10.3 million. As of December 31, 2025, the Company held 136 GSE CMOs with a total fair value of $496.6 million with a net unrealized loss of $3.9 million. As of March 31, 2026, 122 of the 144 securities in this portfolio were in an unrealized loss position. As of December 31, 2025, 57 of the 136 securities in this portfolio were in an unrealized loss position. During the three months ended March 31, 2026 the Company purchased $79.6 million of GSE CMOs compared to the same period in 2025, when the Company did not purchase any GSE CMOs.
As of March 31, 2026, the Company owned 193 GSE MBSs with a total fair value of $316.1 million and a net unrealized loss of $10.1 million. As of December 31, 2025, the Company held 194 GSE MBSs with a total fair value of $325.7 million with a net unrealized loss of $8.7 million. As of March 31, 2026, 98 of the 193 securities in this portfolio were in an unrealized loss position. As of December 31, 2025, 85 of the 194 securities in this portfolio were in an unrealized loss position. During the three months ended March 31, 2026, the Company did not purchase any GSE MBSs compared to the same period in 2025 when the Company purchased $.0 million of GSE MBSs.
Municipal Obligations
The Company invests in certain state and municipal securities with high credit ratings for portfolio diversification and tax planning purposes. Full collection of the obligations is expected because the financial conditions of the issuing municipalities are sound, they have not defaulted on scheduled payments, the obligations are rated investment grade, and the Company has the ability and intent to hold the obligations for a period of time to recover the amortized cost. As of March 31, 2026, the Company owned 238 municipal obligation securities with a total fair value of $228.5 million and a net unrealized gain of $3.1 million. As of December 31, 2025, the Company owned 242 municipal obligation securities with a total fair value of $240.2 million and a net unrealized gain of $8.3 million. As of March 31, 2026, 43 of the 238 securities in this portfolio were in an unrealized loss position. As of December 31, 2025, 12 of the 242 securities in this portfolio were in an unrealized loss position. During the three months ended March 31, 2026, the Company purchased $32.0 thousand of municipal securities compared to the same period in 2025 when the Company purchased $0.2 million of municipal securities.
Corporate Obligations
The Company may invest in high-quality corporate obligations to provide portfolio diversification and improve the overall yield on the portfolio. As of March 31, 2026, the Company held 19 corporate obligation securities with a total fair value of $36.0 million and a net unrealized gain of $0.6 million. As of December 31, 2025, the Company held 16 corporate obligation securities with a total fair value of $40.0 million and a net unrealized gain of $0.8 million. As of March 31, 2026, 4 of the 19 securities in this portfolio were in an unrealized loss position. As of December 31, 2025, 2 of the 16 securities in this portfolio were in an unrealized loss position. During the three months ended March 31, 2026 and 2025, the Company did not purchase any corporate obligations.
U.S. Treasury Bonds
The Company invests in securities issued by the U.S. government. As of March 31, 2026, the Company owned 51 U.S. Treasury bonds with a total fair value of $405.4 million and a net unrealized loss of $13.7 million. As of December 31, 2025, the Company held 54 U.S. Treasury bonds with a total fair value of $412.0 million and a net unrealized loss of $12.2 million. As of March 31, 2026, 30 of the 51 securities in this portfolio were in an unrealized loss position. As of December 31, 2025, 25 of the 54 securities in this portfolio were in an unrealized loss position. During the three months ended March 31, 2026, the Company purchased $29.5 million of U.S. Treasury bonds, compared to the same period in 2025 when the Company did not purchase U.S. Treasury bonds.
Foreign Government Obligations
As of March 31, 2026 and December 31, 2025, the Company owned 1 foreign government obligation security with a fair value of $0.5 million, which approximated cost. As of March 31, 2026 and December 31, 2025, the security was held at par. During the three months ended March 31, 2026 the Company did not purchase any foreign government obligation, compared to the same period in 2025 when the Company repurchased the foreign government obligation that had matured.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Portfolio Maturities
The final stated maturities of the debt securities are as follows for the periods indicated:
  At March 31, 2026 At December 31, 2025
  Amortized
Cost		 Estimated
Fair Value		 Weighted
Average
Rate		 Amortized
Cost		 Estimated
Fair Value		 Weighted
Average
Rate
  (Dollars in Thousands)
Investment securities available-for-sale:            
Within 1 year $ 115,150  $ 114,990  3.68  % $ 145,787  $ 146,092  3.89  %
After 1 year through 5 years 504,732  484,744  2.97  % 472,284  454,138  2.76  %
After 5 years through 10 years 245,821  239,804  3.37  % 246,784  242,931  3.56  %
Over 10 years 895,728  879,172  4.18  % 851,363  845,607  4.18  %
$ 1,761,431  $ 1,718,710  3.69  % $ 1,716,218  $ 1,688,768  3.69  %
Actual maturities of debt securities will differ from those presented above since certain obligations amortize and may also provide the issuer the right to call or prepay the obligation prior to scheduled maturity without penalty. MBSs and CMOs are included above based on their final stated maturities; the actual maturities, however, may occur earlier due to anticipated prepayments and stated amortization of cash flows.
As of March 31, 2026, issuers of debt securities with an estimated fair value of $951.5 million had the right to call or prepay the obligations. Of the $951.5 million, approximately $103.9 million matures in less then 1 year, $386.8 million matures in 1-5 years, $201.2 million matures in 6-10 years, and $259.6 million matures after ten years. As of December 31, 2025, issuers of debt securities with an estimated fair value of approximately $965.2 million had the right to call or prepay the obligations. Of the $965.2 million, approximately $12.4 million matures in less then 1 year, $111.4 million matures in 1-5 years, $157.1 million matures in 6-10 years, and $684.3 million matures after ten years.
Security Sales
The Company did not sell any investment securities available-for-sale during the three months ended March 31, 2026 and 2025.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
(4) Loans and Leases
The following table presents the amortized cost of loans and leases and weighted average coupon rates for the loan and lease portfolios at the dates indicated:
  At March 31, 2026 At December 31, 2025
  Balance Weighted
Average
Coupon		 Balance Weighted
Average
Coupon
  (Dollars In Thousands)
Commercial real estate loans:        
Commercial real estate $ 7,187,735  5.54  % $ 7,235,397  5.58  %
Multi-family mortgage 2,148,297  5.27  % 2,155,980  5.29  %
Construction 621,376  6.55  % 620,717  6.61  %
Total commercial real estate loans 9,957,408  5.54  % 10,012,094  5.58  %
Commercial loans and leases:        
Commercial
2,938,469  6.27  % 2,784,152  6.34  %
Equipment financing 1,073,505  8.67  % 1,163,211  8.55  %
Total commercial loans and leases 4,011,974  6.91  % 3,947,363  6.99  %
Consumer loans:        
Residential mortgage 3,167,549  4.81  % 3,233,425  4.82  %
Home equity 656,237  6.30  % 695,307  6.30  %
Other consumer 130,988  5.27  % 141,363  5.25  %
Total consumer loans 3,954,774  5.07  % 4,070,095  5.09  %
Total loans and leases $ 17,924,156  5.74  % $ 18,029,552  5.78  %

Accrued interest on loans and leases, which were excluded from the amortized cost of loans and leases totaled $78.2 million and $77.8 million at March 31, 2026 and December 31, 2025, respectively, and were included in other assets in the accompanying consolidated balance sheets.
The net unamortized deferred loan origination costs and premiums and discounts on acquired loans included in total loans and leases were $(228.7) million and $(237.6) million as of March 31, 2026 and December 31, 2025, respectively.
Loans and Leases Pledged as Collateral
As of March 31, 2026 and December 31, 2025, there were $6.1 billion and $6.3 billion respectively of loans and leases pledged as collateral for repurchase agreements; municipal deposits; treasury, tax and loan deposits; swap agreements; FRB borrowings; and FHLB borrowings. The Bank did not have any outstanding FRB borrowings as of March 31, 2026 and December 31, 2025.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
(5) Allowance for Credit Losses
The following tables present the changes in the allowance for loan and lease losses by portfolio segment for the periods indicated:
  Three Months Ended March 31, 2026
  Commercial
Real Estate		 Commercial Consumer Total
  (In Thousands)
Balance at December 31, 2025 $ 142,391  $ 86,490  $ 23,958  $ 252,839 
Charge-offs (7,357) (8,435) (88) (15,880)
Recoveries 360  1,824  145  2,329 
Provision (credit) for loan and lease losses excluding unfunded commitments 15,040  4,418  (14,369) 5,089 
Balance at March 31, 2026 $ 150,434  $ 84,297  $ 9,646  $ 244,377 

  Three Months Ended March 31, 2025
  Commercial
Real Estate		 Commercial Consumer Total
  (In Thousands)
Balance at December 31, 2024 $ 74,171  $ 44,169  $ 6,743  $ 125,083 
Charge-offs —  (9,069) (4) (9,073)
Recoveries —  1,422  54  1,476 
Provision (credit) for loan and lease losses excluding unfunded commitments (172) 6,834  (3) 6,659 
Balance at March 31, 2025 $ 73,999  $ 43,356  $ 6,790  $ 124,145 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
The allowance for credit losses for unfunded credit commitments was $16.6 million, and $13.7 million at March 31, 2026 and December 31, 2025, respectively and includes the provision of $2.8 million for credit losses on unfunded commitments during the three months ended March 31, 2026.
Provision for Credit Losses
The provision (credit) for credit losses are set forth below for the periods indicated:
  Three Months Ended March 31,
  2026 2025
  (In Thousands)
Provision (credit) for loan and lease losses:    
Commercial real estate $ 15,040  $ (172)
Commercial 4,418  6,834 
Consumer (14,369) (3)
Total provision (credit) for loan and lease losses 5,089  6,659 
Unfunded commitments 2,810  (685)
Investment securities available-for-sale 47  12 
Total provision (credit) for credit losses $ 7,946  $ 5,986 
Allowance for Credit Losses Methodology
Management has established a methodology to determine the adequacy of the ACL that assesses the risks and losses expected on the loan and lease portfolio and unfunded commitments. Additions to the ACL are made by charges to the provision for credit losses. Losses on loans and leases are charged off against the allowance when all or a portion of a loan or lease is considered uncollectible. Subsequent recoveries on loans previously charged off, if any, are credited to the allowance when realized.
For periods in 2025, the Company continued to use the two legacy banks' ACL processes to calculate the expected losses over the remaining life of the portfolio. During the first quarter of 2026, as part of the February core conversion, the ACL process was updated to have a single integrated process that applies to all loans in the Company's portfolio. The Company continues to use models developed by a third party to calculate the allowance for loans collectively evaluated. As part of reviewing the applicability of these models to the combined Beacon Bank footprint, the models were calibrated to the combined Company's footprint and peer bank loss experience.
The Bank’s ACL process uses CRE, C&I, and retail lifetime loss rate models to calculate the expected losses over the life of the loan based on exposure at default, loan attributes, and reasonable, supportable economic forecasts. The exposure at default considers the current unpaid balance and expected utilization assumptions. Key assumptions used in the models include portfolio segmentation, prepayments, and the expected utilization of unfunded commitments, among others. The portfolios are segmented by loan level attributes such as loan type, loan size, date of origination, and delinquency status to create homogenous loan pools. Pool level metrics are calculated and loss rates are subsequently applied to the pools based on loans that 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 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 new information becomes available.
The ACL estimate incorporates reasonable and supportable forecasts of various macro-economic variables over the remaining life of loans and leases. The development of the reasonable and supportable forecast assumes each macro-economic variable will revert to long-term expectations, with reversion characteristics unique to specific economic indicators and forecasts. Reversion towards long-term expectations generally begins two to three years from the forecast start date and largely completes within the first five years. 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, interest rates, property price indices, and employment measures.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Scenario weighting and model parameters are updated to reflect facts and circumstances as of the financial statement date.
As of March 31, 2026, management continued to apply qualitative adjustments to the Company’s models. These adjustments are designed to address model limitations and are generally targeted to specific risks within the certain portfolios or certain risk factors (e.g., office, refi-risk, and specialty vehicle) based on recent collateral valuations and performance trends. Additionally, portfolio level metrics such as delinquency, population of adversely graded loans, non-accruals, etc. are used to inform management’s evaluation of the credit risk in the portfolio and adjustments are made as appropriate. These adjustments included both positive and negative adjustments with a total impact to the ACL estimate of $35.0 million at March 31, 2026. Management reviews these factors on a quarterly basis as market conditions and segment performance evolve.
Specific reserves are established for loans 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 loans, when there is an excess of a loan's amortized cost basis over the fair value of its underlying collateral. When loans and leases do not share risk characteristics with other financial assets they are evaluated individually. Individually evaluated loans are reviewed quarterly with adjustments made to the calculated reserve as necessary.
The general allowance for loan and lease losses was $165.6 million as of March 31, 2026, compared to $173.4 million as of December 31, 2025.
The specific allowance for loan and lease losses was $78.9 million as of March 31, 2026, compared to $79.4 million as of December 31, 2025.
As of March 31, 2026, management believes the methodology for calculating the allowance is sound and the allowance provides a reasonable basis for determining and reporting on expected losses over the lifetime of the Company’s loan portfolios.
Credit Quality Assessment
At the time of loan origination, a rating is assigned based on the capacity to pay and general financial strength of the borrower, the value of assets pledged as collateral, and the evaluation of third party support such as a guarantor. The Company continually monitors the credit quality of the loan portfolio using all available information. The officer responsible for handling each loan is required to initiate changes to risk ratings when changes in facts and circumstances occur that warrant an upgrade or downgrade in a loan rating. Based on this information, loans demonstrating certain payment issues or other weaknesses may be categorized as delinquent, adversely risk-rated, nonperforming and/or put on nonaccrual status. Additionally, in the course of resolving such loans, the Company may choose to restructure the contractual terms of certain loans to match the borrower's ability to repay the loan based on their current financial condition. If a restructured loan meets certain criteria, it may be categorized as a modified loan.
The Company reviews numerous credit quality indicators when assessing the risk in its loan portfolio. For all loans, the Company utilizes an eight-grade loan rating system, which assigns a risk rating to each borrower based on a number of quantitative and qualitative factors associated with a loan transaction. Factors considered include industry and market conditions; position within the industry; earnings trends; operating cash flow; asset/liability values; debt capacity; guarantor strength; management and controls; financial reporting; collateral; and other considerations. In addition, the Company's independent loan review group evaluates the credit quality and related risk ratings in all loan portfolios. The results of these reviews are reported to the Risk Committee of the Board of Directors on a periodic basis and annually to the Board of Directors. For the consumer loans, the Company heavily relies on payment status for calibrating credit risk.
The ratings categories used for assessing credit risk in the commercial real estate, multi-family mortgage, construction, commercial, equipment financing, condominium association and other consumer loan and lease classes are defined as follows:
1 -4 Rating—Pass
Loan rating grades "1" through "4" are classified as "Pass," which indicates borrowers are performing in accordance with the terms of the loan and are less likely to result in loss due to the capacity of the borrower to pay and the adequacy of the value of assets pledged as collateral.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
5 Rating—OAEM
Borrowers exhibit potential credit weaknesses or downward trends deserving management's attention. If not checked or corrected, these trends will weaken the Company's asset and position. While potentially weak, currently these borrowers are marginally acceptable; no loss of principal or interest is envisioned.
6 Rating—Substandard
Borrowers exhibit well defined weaknesses that jeopardize the orderly liquidation of debt. Substandard loans may be inadequately protected by the current net worth and paying capacity of the obligors or by the collateral pledged, if any. Normal repayment from the borrower is in jeopardy. Although no immediate loss of principal is envisioned, there is a distinct possibility that a partial loss of interest and/or principal will occur if the deficiencies are not corrected. Collateral coverage may be inadequate to cover the principal obligation.
7 Rating—Doubtful
Borrowers exhibit well-defined weaknesses that jeopardize the orderly liquidation of debt with the added provision that the weaknesses make collection of the debt in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Serious problems exist to the point where partial loss of principal is likely.
8 Rating—Definite Loss
Borrowers deemed incapable of repayment. Loans to such borrowers are considered uncollectible and of such little value that continuation as active assets of the Company is not warranted.
Assets rated as "OAEM," "substandard" or "doubtful" based on criteria established under banking regulations are collectively referred to as "criticized" assets.
Credit Quality Information
The following table presents the amortized cost basis of loans in each class by credit quality indicator and year of origination as of March 31, 2026.
March 31, 2026
2026 2025 2024 2023 2022 Prior Revolving Loans Revolving Loans Converted to Term Loans Total
  (In Thousands)
Commercial Real Estate          
Pass $ 125,088  $ 567,059  $ 496,402  $ 763,816  $ 1,227,243  $ 3,443,673  $ 117,841  $ 14,114  $ 6,755,236 
OAEM —  150  1,351  47,280  49,667  132,845  —  —  231,293 
Substandard —  282  2,182  7,898  73,090  92,253  25,501  —  201,206 
Total 125,088  567,491  499,935  818,994  1,350,000  3,668,771  143,342  14,114  7,187,735 
Current-period gross writeoffs —  —  182  68  184  6,923  —  —  7,357 
Multi-Family Mortgage
Pass 11,944  179,976  154,443  123,632  546,451  1,025,065  42,492  3,957  2,087,960 
OAEM —  —  —  —  43,828  —  —  —  43,828 
Substandard —  —  —  1,064  —  15,445  —  —  16,509 
Total 11,944  179,976  154,443  124,696  590,279  1,040,510  42,492  3,957  2,148,297 
Current-period gross writeoffs —  —  —  —  —  —  —  —  — 
Construction
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
March 31, 2026
2026 2025 2024 2023 2022 Prior Revolving Loans Revolving Loans Converted to Term Loans Total
  (In Thousands)
Pass 6,236  182,777  115,698  146,417  52,600  19,941  3,922  —  527,591 
OAEM —  —  —  —  22,750  —  —  —  22,750 
Substandard —  —  —  —  71,035  —  —  —  71,035 
Total 6,236  182,777  115,698  146,417  146,385  19,941  3,922  —  621,376 
Commercial
Pass 130,715  299,457  310,326  301,784  177,165  308,222  1,238,146  26,212  2,792,027 
OAEM —  7,840  758  421  18,065  3,835  18,640  318  49,877 
Substandard —  124  8,806  3,603  4,369  15,192  63,509  778  96,381 
Doubtful —  —  —  184  —  —  —  —  184 
Total 130,715  307,421  319,890  305,992  199,599  327,249  1,320,295  27,308  2,938,469 
Current-period gross writeoffs —  138  1,567  548  396  3,401  —  —  6,050 
Equipment Financing
Pass 27,558  193,120  227,296  222,328  177,510  171,113  2,537  4,152  1,025,614 
OAEM 9,258  722  3,755  8,200  7,888  6,917  —  9,233  45,973 
Substandard —  —  —  —  1,918  —  —  —  1,918 
Total 36,816  193,842  231,051  230,528  187,316  178,030  2,537  13,385  1,073,505 
Current-period gross writeoffs —  —  —  48  —  2,336  —  —  2,384 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
March 31, 2026
2026 2025 2024 2023 2022 Prior Revolving Loans Revolving Loans Converted to Term Loans Total
  (In Thousands)
Residential
Pass 43,751  326,374  348,321  516,620  679,753  1,235,901  4,700  —  3,155,420 
OAEM —  —  —  —  —  1,624  —  —  1,624 
Substandard —  —  —  —  442  10,063  —  —  10,505 
Total 43,751  326,374  348,321  516,620  680,195  1,247,588  4,700  —  3,167,549 
Current-period gross writeoffs —  —  —  —  —  —  —  —  — 
Home Equity
Pass 4,367  2,000  1,936  7,072  7,419  34,354  588,235  6,552  651,935 
OAEM —  —  —  —  —  27  356  —  383 
Substandard 18  41  29  205  —  268  2,961  397  3,919 
Total 4,385  2,041  1,965  7,277  7,419  34,649  591,552  6,949  656,237 
Current-period gross writeoffs —  —  —  —  —  —  —  —  — 
Other Consumer
Pass 3,940  8,027  18,015  17,430  6,804  6,636  69,886  8  130,746 
OAEM —  7  2  23  1  —  3  —  36 
Substandard —  19  20  25  17  41  84  —  206 
Total 3,940  8,053  18,037  17,478  6,822  6,677  69,973  8  130,988 
Current-period gross writeoffs —  9  38  18  8  15  —  —  88 
Total
Pass 353,599  1,758,790  1,672,437  2,099,099  2,874,945  6,244,905  2,067,759  54,995  17,126,529 
OAEM 9,258  8,719  5,866  55,924  142,199  145,248  18,999  9,551  395,764 
Substandard 18  466  11,037  12,795  150,871  133,262  92,055  1,175  401,679 
Doubtful —  —  —  184  —  —  —  —  184 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
March 31, 2026
2026 2025 2024 2023 2022 Prior Revolving Loans Revolving Loans Converted to Term Loans Total
  (In Thousands)
Total $ 362,875  $ 1,767,975  $ 1,689,340  $ 2,168,002  $ 3,168,015  $ 6,523,415  $ 2,178,813  $ 65,721  $ 17,924,156 
As of March 31, 2026, there were no loans categorized as definite loss.
    
During the first quarter of 2026, the Company fully risk rated our consumer portfolio, whereby the current risk rating provides an accurate indicator of credit quality. As such we updated the above table to include risk rating for the Consumer portfolio vs FICO in prior periods. Prior periods remain unchanged.
The following tables present the recorded investment in loans in each class as of December 31, 2025, by credit quality indicator.
December 31, 2025
2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Loans Total
  (In Thousands)
Commercial Real Estate            
Pass $ 546,268  $ 496,486  $ 713,257  $ 1,377,041  $ 1,144,463  $ 2,524,605  $ 45,663  $ 14,944  $ 6,862,727 
OAEM 14,599  732  53,420  42,680  43,317  37,747  —  387  192,882 
Substandard —  24,867  3,963  56,316  7,427  84,232  2,983  —  179,788 
Total 560,867  522,085  770,640  1,476,037  1,195,207  2,646,584  48,646  15,331  7,235,397 
Current -period gross writeoffs —  569  18  4,641  —  3,458  —  —  8,686 
Multi-Family Mortgage
Pass 165,979  110,718  113,109  618,623  278,798  811,649  4,551  3,982  2,107,409 
OAEM —  —  —  10,876  —  —  —  —  10,876 
Substandard —  —  1,066  2,863  11,477  22,289  —  —  37,695 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
December 31, 2025
2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Loans Total
  (In Thousands)
Total 165,979  110,718  114,175  632,362  290,275  833,938  4,551  3,982  2,155,980 
Current -period gross writeoffs —  —  —  —  —  2,332 —  —  2,332
Construction
Pass 159,217  148,651  145,038  87,874  16,938  332  3,188  —  561,238 
OAEM —  —  —  37,689  —  —  —  —  37,689 
Substandard —  —  —  21,790  —  —  —  —  21,790 
Total 159,217  148,651  145,038  147,353  16,938  332  3,188  —  620,717 
Commercial
Pass 314,833  302,916  311,533  162,007  177,421  174,533  1,180,768  12,790  2,636,801 
OAEM —  774  236  20,727  135  4,361  35,864  339  62,436 
Substandard —  8,231  4,746  4,283  5,378  11,421  49,974  698  84,731 
Doubtful —  —  184  —  —  —  —  —  184 
Total 314,833  311,921  316,699  187,017  182,934  190,315  1,266,606  13,827  2,784,152 
Current-period gross writeoffs —  1,082  210  5,199  106  7,353  1,467  —  15,417 
Equipment Financing
Pass 196,359  241,981  265,403  210,829  94,341  101,526  2,951  4,359  1,117,749 
OAEM —  —  —  878  597  —  —  —  1,475 
Substandard 138  3,778  12,026  8,090  2,532  3,959  —  11,541  42,064 
Doubtful —  —  —  1,918  —  5  —  —  1,923 
Total 196,497  245,759  277,429  221,715  97,470  105,490  2,951  15,900  1,163,211 
Current-period gross writeoffs —  870  6,421  5,263  1,097  1,966  —  —  15,617 
Other Consumer
Pass 10,735  19,553  19,614  7,792  3,311  4,270  75,916  14  141,205 
OAEM 12  —  —  5  —  1  5  —  23 
Substandard 1  41  2  46  6  7  32  —  135 
Total 10,748  19,594  19,616  7,843  3,317  4,278  75,953  14  141,363 
Current-period gross writeoffs 27  14  11  1  —  19  62  —  134 
Total
Pass 1,393,391  1,320,305  1,567,954  2,464,166  1,715,272  3,616,915  1,313,037  36,089  13,427,129 
OAEM 14,611  1,506  53,656  112,855  44,049  42,109  35,869  726  305,381 
Substandard 139  36,917  21,803  93,388  26,820  121,908  52,989  12,239  366,203 
Doubtful —  —  184  1,918  —  5  —  —  2,107 
Total $ 1,408,141  $ 1,358,728  $ 1,643,597  $ 2,672,327  $ 1,786,141  $ 3,780,937  $ 1,401,895  $ 49,054  $ 14,100,820 
As of December 31, 2025, there were no loans categorized as definite loss.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
At December 31, 2025
2025 2024 2023 2022 2021 Prior Revolving Loans Revolving Loans Converted to Term Loans Total
  (In Thousands)
Residential    
Credit Scores    
Over 700 $ 311,693  $ 330,183  $ 497,233  $ 542,388  $ 250,604 $ 746,295  $ 3,000  $ —  $ 2,681,396 
661 - 700 10,890  15,515  23,976 30,852  15,805 74,101  8  —  171,147 
600 and below 4,983  8,539  10,528 15,014  11,306 43,250  —  —  93,620 
Data not available*
 24,658  3,334  5,729  103,341  6,076 144,124  —  —  287,262 
Total $ 352,224  $ 357,571  $ 537,466  $ 691,595  $283,791 $ 1,007,770  $ 3,008  $ —  $ 3,233,425 
Current-period gross writeoffs —  —  —  —  —  1  —  —  1 
Home Equity
Credit Scores
Over 700 $ 5,286  $ 1,882  $ 6,714 $ 7,087  $ 7,111 $ 26,203  $ 542,324  $ 3,737  $ 600,344 
661 - 700 —  23  54 559  177 2,211  55,752  986  59,762 
600 and below 95  117  789 131  124 952  27,538  2,652  32,398 
Data not available*
 2  —  13  —  —  50  2,738  —  2,803 
Total $ 5,383  $ 2,022  $ 7,570 $ 7,777  $ 7,412 $ 29,416  $ 628,352  $ 7,375  $ 695,307 
Current-period gross writeoffs $ —  $ —  $ —  $ —  $ —  $ —  $ 64  $ —  64 
_______________________________________________________________________________
* Primarily represents loans made to trusts and purchased mortgages.














23
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)


Age Analysis of Past Due Loans and Leases
The following table presents an age analysis of the amortized cost basis in loans and leases as of March 31, 2026.
  At March 31, 2026
  Past Due     Past
Due Greater
Than 90 Days
and Accruing		  
  31-60
Days		 61-90
Days		 Greater
Than
90 Days		 Total Current Total Loans
and Leases		 Non-accrual
 Non-accrual
with No Related Allowance
  (In Thousands)
Commercial real estate loans:
Commercial real estate $ 24,820  $ 18,851  $ 25,368  $ 69,039  $ 7,118,696  $ 7,187,735  $ 233  $ 65,127  $ 8,122 
Multi-family mortgage 144  819  8,258  9,221  2,139,076  2,148,297  —  12,995  — 
Construction —  —  —  —  621,376  621,376  —  —  — 
Total commercial real estate loans 24,964  19,670  33,626  78,260  9,879,148  9,957,408  233  78,122  8,122 
Commercial loans and leases:
Commercial 7,249  578  20,900  28,727  2,909,742  2,938,469  205  22,626  9,663 
Equipment financing 21,058  9,204  31,583  61,845  1,011,660  1,073,505  —  38,633  14,498 
Total commercial loans and leases 28,307  9,782  52,483  90,572  3,921,402  4,011,974  205  61,259  24,161 
Consumer loans:
Residential mortgage 9,565  1,836  7,465  18,866  3,148,683  3,167,549  4,698  5,807  5,865 
Home equity 1,938  718  1,897  4,553  651,684  656,237  697  3,222  3,223 
Other consumer 437  76  133  646  130,342  130,988  1  206  206 
Total consumer loans 11,940  2,630  9,495  24,065  3,930,709  3,954,774  5,396  9,235  9,294 
Total loans and leases $ 65,211  $ 32,082  $ 95,604  $ 192,897  $ 17,731,259  $ 17,924,156  $ 5,834  $ 148,616  $ 41,577 
The Company did not recognize any interest income on nonaccrual loans for the three and nine months ended March 31, 2026.











24
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)


The following tables present an age analysis of the recorded investment in originated and acquired loans and leases as of December 31, 2025.
  At December 31, 2025
  Past Due     Loans and
Leases Past
Due Greater
Than 90 Days
and Accruing		   Non-accrual
with No Related Allowance
  31-60
Days		 61-90
Days		 Greater
Than
90 Days		 Total Current Total Loans
and Leases		 Non-accrual
  (In Thousands)
Commercial real estate loans:
Commercial real estate $ 10,348  $ 7,457  $ 21,663  $ 39,468  $ 7,195,929  $ 7,235,397  $ 3,250  $ 41,246  $ 1,340 
Multi-family mortgage 148  —  18,400  18,548  2,137,432  2,155,980  14,340  4,065  1,066 
Construction —  —  15,000  15,000  605,717  620,717  15,000  —  — 
Total commercial real estate loans 10,496  7,457  55,063  73,016  9,939,078  10,012,094  32,590  45,311  2,406 
Commercial loans and leases:
Commercial 2,762  219  16,798  19,779  2,764,373  2,784,152  320  16,716  1,735 
Equipment financing 12,513  7,456  36,795  56,764  1,106,447  1,163,211  112  42,718  2,531 
Total commercial loans and leases 15,275  7,675  53,593  76,543  3,870,820  3,947,363  432  59,434  4,266 
Consumer loans:
Residential mortgage 8,429  4,014  8,443  20,886  3,212,539  3,233,425  3,970  6,465  1,323 
Home equity 2,793  1,030  1,486  5,309  689,998  695,307  811  2,811  32 
Other consumer 287  68  133  488  140,875  141,363  20  135  — 
Total consumer loans 11,509  5,112  10,062  26,683  4,043,412  4,070,095  4,801  9,411  1,355 
Total loans and leases $ 37,280  $ 20,244  $ 118,718  $ 176,242  $ 17,853,310  $ 18,029,552  $ 37,823  $ 114,156  $ 8,027 
Individually Evaluated Loans and Leases
Loans and leases which do not share similar risk characteristics with other loans are individually evaluated for credit losses. A loan is individually evaluated 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. The loans and leases risk-rated "substandard" or worse are individually evaluated. Specific reserves are established for loans and leases with deterioration in the present value of expected future cash flows or, in the case of collateral-dependent loans and leases, any increase in the loan or lease amortized cost basis over the fair value of the underlying collateral discounted for estimated selling costs. In contrast, the loans and leases which share similar risk characteristics and are not included in the individually evaluated population are collectively evaluated for credit losses.
The following tables present information regarding individually evaluated and collectively evaluated allowance for loan and lease losses for credit losses on loans and leases at the dates indicated.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
At March 31, 2026
Commercial Real Estate Commercial Consumer Total
(In Thousands)
Allowance for Loan and Lease Losses:
Individually evaluated $ 46,852  $ 32,044  $ —  $ 78,896 
Collectively evaluated 103,582  52,253  9,646  165,481 
Total $ 150,434  $ 84,297  $ 9,646  $ 244,377 
Loans and Leases:
Individually evaluated $ 277,911  $ 114,485  $ —  $ 392,396 
Collectively evaluated 9,679,497  3,897,489  3,954,774  17,531,760 
Total $ 9,957,408  $ 4,011,974  $ 3,954,774  $ 17,924,156 

At December 31, 2025
Commercial Real Estate Commercial Consumer Total
(In Thousands)
Allowance for Loan and Lease Losses:
Individually evaluated $ 47,329  $ 31,909  $ 178  $ 79,416 
Collectively evaluated 95,062  54,581  23,780  173,423 
Total loans and leases $ 142,391  $ 86,490  $ 23,958  $ 252,839 
Loans and Leases:
Individually evaluated $ 240,753  $ 111,589  $ 1,801  $ 354,143 
Collectively evaluated 9,771,341  3,835,774  4,068,294  17,675,409 
Total loans and leases $ 10,012,094  $ 3,947,363  $ 4,070,095  $ 18,029,552 


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Table of Contents
BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Loan Modifications
The following tables present the amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during the periods indicated.

Three Months Ended March 31, 2026
Number of Loans Amortized Cost % of Total Class of Loans and Leases Financial Effect
(In thousands)
Maturity Extension:
CRE 1 $ 135  —  %
Loan was given a 5 year extension. The financial effect was deemed "de minimis.
C&I 4 5,904  0.20  % Loans were given multi-month extensions totaling over a year. The financial effect was deemed "de minimis".
Significant Payment Delays:
Commercial Real Estate 1 243  —  %
Loan was given multiple deferrals of past 12 months totaling over 180 days. The financial effect was deemed "de minimis".
Combination - Maturity Extension and Significant Payment Delays
CRE 1 8,668 0.12  %
Loan was given 6 month
extensions, and reductions in their stated interest rates of 2.5%. The financial
effect was deemed "de minimis."
Equipment financing 2 701 0.07  %
Loans were given a 33 month extension with a 2% rate reduction and a 15 month extension with a 2.5% rate reduction, respectfully. The financial
effect was deemed "de minimis."
Combination - Significant Payment Delays and Interest Rate Reduction:
Commercial Real Estate 1 2,907  0.04  %
Loan was given 3 month
deferral, and reductions in their stated interest rates of 1.89%. The financial
effect was deemed "de minimis."
Total 10 $ 18,558 
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Table of Contents
BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
The following tables present the aging analysis of loan modifications made to borrowers experiencing financial difficulty during the periods indicated.
Three Months Ended March 31, 2026
Current 30-60 Days Past Due 61-90 Days Past Due 90+ Days Past Due Modified
(In thousands)
Total Modifications $ 6,847  135  —  11,576  — 
(6) Goodwill and Other Intangible Assets
The following table sets forth the carrying value of goodwill and other intangible assets at the dates indicated:
  At March 31, 2026 At December 31, 2025
  (In Thousands)
Goodwill $ 351,613  $ 241,222 
Additions 3,656  110,391 
Balance at end of period 355,269  351,613 
Other intangible assets, net accumulated amortization:
Core deposits 168,490  176,280 
Customer relationships intangible asset 12,744  13,282 
Total other intangible assets 181,234  189,562 
Total goodwill and other intangible assets $ 536,503  $ 541,175 
The addition of goodwill relates to final valuation of associated deferred tax assets acquired during the Transaction.
The weighted-average amortization period for the intangible assets is 11.4 years.

The estimated aggregate future amortization expense (in thousands) for other intangible assets for each of the next five years and thereafter is as follows:
Remainder of 2026 $ 24,178 
Year ending:
2027 29,009 
2028 25,512 
2029 22,016 
2030 18,519 
2031 16,104 
Thereafter 45,896 
Total $ 181,234 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
(7) Accumulated Other Comprehensive Income (Loss)
For the three months ended March 31, 2026 and 2025, the Company’s accumulated OCI (loss) includes the following three components: (i) unrealized holding gains (losses) on investment securities available-for-sale; (ii) change in the fair value of cash flow hedges; and (iii) adjustment of accumulated obligation for postretirement benefits.
 
Changes in accumulated OCI (loss) by component, net of tax, were as follows for the periods indicated:
  Three Months Ended March 31, 2026
 
Investment
Securities
 Available-for-Sale
 Net Change in Fair Value of Cash Flow Hedges Postretirement
Benefits		 Accumulated Other
Comprehensive
Income (Loss)
  (In Thousands)
Balance at December 31, 2025 $ (20,593) $ 52  $ 539  $ (20,002)
Other comprehensive income (loss) (11,345) (112) —  (11,457)
(Income) expense recognized in earnings —  48  —  48 
Balance at March 31, 2026 $ (31,938) $ (12) $ 539  $ (31,411)
  Three Months Ended March 31, 2025
 
Investment
Securities
 Available-for-Sale
 Net Change in Fair Value of Cash Flow Hedges Postretirement
Benefits		 Accumulated Other
Comprehensive
Income (Loss)
  (In Thousands)
Balance at Balance at December 31, 2024 $ (53,718) $ (1,323) $ 2,159  $ (52,882)
Other comprehensive income (loss) 9,737  250  —  9,987 
Reclassification adjustment for (income) expense recognized in earnings —  397  —  397 
Balance at March 31, 2025 $ (43,981) $ (676) $ 2,159  $ (42,498)
(8) Derivatives and Hedging Activities
The Company executes loan level derivative products such as interest rate swap agreements with commercial banking customers to aid them in managing their interest rate risk. The interest rate swap contracts allow the commercial banking customers to convert floating rate loan payments to fixed rate loan payments. The Company concurrently enters into offsetting swaps with a third party financial institution, effectively minimizing its net risk exposure resulting from such transactions. The third party financial institution exchanges the customer's fixed rate loan payments for floating rate loan payments. As the interest rate swap agreements associated with this program do not meet hedge accounting requirements, changes in the fair value are recognized directly in earnings. 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".
The Company believes using interest rate derivatives adds stability to interest income and expense and allows the Company to manage its exposure to interest rate movements. The Company enters into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed payments. The Company enters into interest rate swaps as hedging instruments against the interest rate risk associated with the Company's FHLB borrowings and loan portfolio. For derivative instruments that are designated and qualify as cash flow hedging instruments, the effective portion of the gains or losses is reported as a component of OCI, and is reclassified into earnings in the period that the hedged forecasted transaction affects earnings.
The following table reflects the Company's derivative positions as of the date indicated below for interest rate derivatives which qualify as cash flow hedges for accounting purposes.
29
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
  At March 31, 2026
Notional Amount Average Maturity Weighted Average Rate Fair Value
  Current Rate Paid Received Fixed Swap Rate
  (in thousands) (in years) (in thousands)
Interest rate swaps on loans $ 149,679  0.7 3.65  % 3.52  % $ (46)
  At December 31, 2025
Notional Amount Average Maturity Weighted Average Rate Fair Value
  Current Rate Paid Received Fixed Swap Rate
  (in thousands) (in years) (in thousands)
Interest rate swaps on loans $ 192,468  0.9 3.79  % 3.47  % $ 7 
The Company utilizes risk participation agreements with other banks participating in commercial loan arrangements. Participating banks guarantee the performance on borrower-related interest rate swap contracts. Risk participation agreements are derivative financial instruments and are recorded at fair value. These derivatives are not designated as hedges and therefore, changes in fair value are recorded directly through earnings in other non-interest income at each reporting period. Under a risk participation-out agreement, a derivative asset, the Company participates out a portion of the credit risk associated with the interest rate swap position executed with the commercial borrower, for a fee paid to the participating bank.
The Company offers foreign exchange contracts to commercial borrowers to accommodate their business needs. These foreign exchange contracts do not qualify as hedges for accounting purposes. To mitigate the market and liquidity risk associated with these foreign exchange contracts, the Company enters into similar offsetting positions.
Asset derivatives and liability derivatives are included in other assets and accrued expenses and other liabilities on the unaudited consolidated balance sheets.
The following tables present the Company's customer related derivative positions for the periods indicated below for those derivatives not designated as hedging.
  Notional Amount Maturing
  Number of Positions Less than 1 year Less than 2 years Less than 3 years Less than 4 years Thereafter Total Fair Value
March 31, 2026
  (Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable 304  $ 348,919  $ 332,118  $ 616,891  $460,263 $ 1,742,093  $ 3,500,284  $ 70,480 
Pay fixed, receive variable 305  348,919  332,118  616,891  464,360 1,742,093  3,504,381  70,394 
Risk participation-out agreements 87  67,441  44,412  145,481  52,348 371,525  681,207  575 
Risk participation-in agreements 22  28,039  6,855  26,083  18,313  67,779  147,069  141 
Foreign exchange contracts
Buys foreign currency, sells U.S. currency 11  $ 2,965  $ —  $ —  $ —  $ —  $ 2,965  $ 125 
Sells foreign currency, buys U.S. currency 11  2,978  —  —  —  —  2,978  235 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
  Notional Amount Maturing
  Number of Positions Less than 1 year Less than 2 years Less than 3 years Less than 4 years Thereafter Total Fair Value
December 31, 2025
(Dollars In Thousands)
Loan level derivatives
Receive fixed, pay variable 308  $ 280,333  $ 427,625  $ 368,548  $ 699,796  $ 1,729,538  $ 3,505,840  $ 58,840 
Pay fixed, receive variable 308  280,333  427,625  368,548  699,796  1,729,538  3,505,840  58,853 
Risk participation-out agreements 87  41,361  65,257  37,270  155,480  371,466  670,834  532 
Risk participation-in agreements 23  29,862  10,321  26,468  18,473  68,061  153,185  139 
Foreign exchange contracts
Buys foreign currency, sells U.S. currency 9  $ 2,785  $ —  $ —  $ —  $ —  $ 2,785  $ 274 
Sells foreign currency, buys U.S. currency 9  2,800  —  —  —  —  2,800  258 
31
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Certain derivative agreements contain provisions that require the Company to post collateral if the derivative exposure exceeds a threshold amount. The Company posted collateral to dealer counterparties of $0.2 million in the normal course of business as of March 31, 2026, compare to $1.2 million as of December 31, 2025.
The tables below present the offsetting of derivatives and amounts subject to master netting agreements not offset in the unaudited consolidated balance sheet at the dates indicated.
  At March 31, 2026
Gross
Amounts Recognized		 Gross Amounts
Offset in the
Statement of Financial Position		 Net Amounts  Presented in the Statement of Financial Position Gross Amounts Not Offset in the
Statement of Financial Position		 Net Amount
  Financial Instruments Pledged Cash Collateral Pledged
  (In Thousands)
Asset derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives $ 77  $ —  $ 77  $ —  $ —  $ 77 
Derivatives not designated as hedging instruments:
Loan level derivatives $ 98,732  $ —  $ 98,732  $ —  $ 50,526  $ 48,206 
Risk participation-out agreements 575  —  575  —  —  575 
Foreign exchange contracts 360  —  360  —  —  360 
Total $ 99,744  $ —  $ 99,744  $ —  $ 50,526  $ 49,218 
Liability derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives $ 123  $ —  $ 123  $ —  $ —  $ 123 
Derivatives not designated as hedging instruments:
Loan level derivatives $ 113,495  $ —  $ 113,495  $ —  $ 219  $ 113,276 
Risk participation-in agreements 141  —  141  —  —  141 
Foreign exchange contracts —  —  —  —  —  — 
Total $ 113,759  $ —  $ 113,759  $ —  $ 219  $ 113,540 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
  At December 31, 2025
Gross
Amounts Recognized		 Gross Amounts
Offset in the
Statement of Financial Position		 Net Amounts  Presented in the Statement of Financial Position Gross Amounts Not Offset in the
Statement of Financial Position		 Net Amount
  Financial Instruments Pledged Cash Collateral Pledged
  (In Thousands)
Asset derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives $ 185  $ —  $ 185  $ —  $ —  $ 185 
Derivatives not designated as hedging instruments:
Loan level derivatives $ 102,237  $ —  $ 102,237  $ —  $ 33,113  $ 69,124 
Risk participation-out agreements 532  —  532  —  —  532 
Foreign exchange contracts 274  —  274  —  —  274 
Total $ 103,228  $ —  $ 103,228  $ —  $ 33,113  $ 70,115 
Liability derivatives
Derivatives designated as hedging instruments:
Interest rate derivatives $ 179  $ —  $ 179  $ —  $ —  $ 179 
Derivatives not designated as hedging instruments:
Loan level derivatives $ 115,937  $ —  $ 115,937  $ —  $ 1,180  $ 114,757 
Risk participation-in agreements 139  —  139  —  —  139 
Foreign exchange contracts 258  —  258  —  —  258 
Total $ 116,513  $ —  $ 116,513  $ —  $ 1,180  $ 115,333 
The Company has agreements with certain of its derivative counterparties that contain credit-risk-related contingent provisions. These provisions provide the counterparty with the right to terminate its derivative positions and require the Company to settle its obligations under the agreements if the Company defaults on certain of its indebtedness or if the Company fails to maintain its status as a well-capitalized institution.
Fair Value
Three Months Ended 
 March 31, 2026		 Three Months Ended 
 March 31, 2025
  (Dollars in Thousands)
Derivatives designated as hedges $ (46) $ (1,114)
(Loss) gain in OCI on derivatives (effective portion), net of tax $ (14) $ (678)
Gain (loss) reclassified from OCI into interest income or interest expense (effective portion) $ (49) $ (534)
The guidance in ASU 2017-12 requires that amounts in accumulated OCI that are included in the assessment of effectiveness should be reclassified into earnings in the same period in which the hedged forecasted transactions impact earnings. A portion of the balance reported in accumulated OCI related to derivatives will be reclassified to interest expense as interest payments are made or received on the Company’s interest rate swaps. The Company monitors the risk of counterparty default on an ongoing basis.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)

(9) Stock Based Compensation
As of March 31, 2026, the Company had one active equity plan: the 2025 Plan. The 2025 Plan was approved by the Company's stockholders at the May 2025 special meeting of stockholders of Beacon Financial Corporation, formally known as Berkshire Hills Bancorp, Inc., in anticipation of the pending Transaction. The 2021 Plan was discontinued on August 31, 2025 as a result of the finalization of the Transaction. No further shares will be granted as awards under the 2021 Plan and all previously outstanding and invested awards under the 2021 Plan vested as a result of the finalization of the Transaction.
All of the shares that have been awarded under the 2025 Plan are time-based shares awarded to employees vest ratably over two years with one-half of such shares vesting on the first and second anniversary dates of the awards.
If a participant leaves the Company prior to the anniversary date of an award, any unvested shares are forfeited. Dividends declared with respect to shares awarded will be held by the Company and paid to the participant only when the shares vest.
Under the 2025 Plan, shares of the Company's common stock are reserved for issuance as restricted stock awards to officers, employees, and non-employee directors of the Company. Shares issued upon vesting may be either authorized but unissued shares or reacquired shares held by the Company as treasury shares. Any shares not issued because vesting requirements are not met will be retired back to treasury and be made available again for issuance under the Plan.
During the three months ended March 31, 2026, and March 31, 2025, no shares were issued, respectively, upon satisfaction of required conditions of the Plan.
Total expense for the Plans was $1.0 million and $0.9 million for the three months ended March 31, 2026 and 2025, respectively.
(10) EPS

The following table is a reconciliation of basic EPS and diluted EPS:
Three Months Ended
  March 31, 2026 March 31, 2025
  Basic Fully
Diluted		 Basic Fully
Diluted
(Dollars in Thousands, Except Per Share Amounts)
Numerator:
Net income $ 46,217  $ 46,217  $ 19,100  $ 19,100 
Denominator:
Weighted average shares outstanding 83,816,086  83,816,086  89,103,510  89,103,510 
Effect of dilutive securities —  87,354  —  464,237 
Adjusted weighted average shares outstanding 83,816,086  83,903,440  89,103,510  89,567,747 
EPS $ 0.55  $ 0.55  $ 0.21  $ 0.21 
(11) Fair Value of Financial Instruments
A description of the valuation methodologies used for assets and liabilities measured at fair value on a recurring and non-recurring basis, as well as the general classification of such instruments pursuant to the valuation hierarchy, is set forth below. There were no changes in the valuation techniques used during the three months ended March 31, 2026 and March 31, 2025.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Assets and Liabilities Recorded at Fair Value on a Recurring Basis
The following tables set forth the carrying value of assets and liabilities measured at fair value on a recurring basis at the dates indicated:
  Carrying Value as of March 31, 2026
  Level 1 Level 2 Level 3 Total
  (In Thousands)
Assets:        
Investment securities available-for-sale:        
GSE debentures $ —  $ 178,596  $ —  $ 178,596 
GSE CMOs —  553,581  —  553,581 
GSE MBSs —  316,124  —  316,124 
Municipal obligations —  214,602  13,886  228,488 
Corporate debt obligations —  32,913  3,081  35,994 
U.S. Treasury bonds —  405,427  —  405,427 
Foreign government obligations —  500  —  500 
Total investment securities available-for-sale $ —  $ 1,701,743  $ 16,967  $ 1,718,710 
Derivatives designated as hedging instruments:
Interest rate derivatives $ —  $ 77  $ —  $ 77 
Derivatives not designated as hedging instruments:
Loan level derivatives —  98,732  —  98,732 
Risk participation-out agreements —  575  —  575 
Foreign exchange contracts —  360  —  360 
Liabilities:        
Derivatives designated as hedging instruments:
Interest rate derivatives $ —  $ 123  $ —  $ 123 
Derivatives not designated as hedging instruments:
Loan level derivatives —  113,495  —  113,495 
Risk participation-in agreements —  141  —  141 
Foreign exchange contracts —  —  —  — 
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
  Carrying Value as of December 31, 2025
  Level 1 Level 2 Level 3 Total
  (In Thousands)
Assets:        
Investment securities available-for-sale:        
GSE debentures $ —  $ 173,677  $ —  $ 173,677 
GSE CMOs —  496,570  —  496,570 
GSE MBSs —  325,745  —  325,745 
Municipal obligations —  221,604  18,612  240,216 
Corporate debt obligations —  36,667  3,356  40,023 
U.S. Treasury bonds —  412,037  —  412,037 
Foreign government obligations —  500  —  500 
Total investment securities available-for-sale $ —  $ 1,666,800  $ 21,968  $ 1,688,768 
Assets:
Derivatives designated as hedging instruments:
Interest rate derivatives —  185  —  185 
Loan level derivatives —  102,237  —  102,237 
Risk participation-out agreements —  532  —  532 
Foreign exchange contracts —  274  —  274 
Liabilities:      
Interest rate derivatives $ —  $ 179  $ —  $ 179 
Loan level derivatives —  115,937  —  115,937 
Risk participation-in agreements —  139  —  139 
Foreign exchange contracts —  258  —  258 
Investment Securities Available-for-Sale and Equity Securities
The fair value of investment securities is based principally on market prices and dealer quotes received from third-party and nationally-recognized pricing services for identical investment securities such as U.S. Treasury and agency securities. 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 GSE debentures, GSE mortgage-related securities, SBA commercial loan asset backed securities, corporate debt securities, municipal obligations and U.S. Treasury bonds, all of which are included in Level 2. As of March 31, 2026, certain corporate debt securities and municipal obligations were valued using pricing models included in Level 3.
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 management's 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. 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 a particular security.
Derivatives and Hedging Instruments
The fair value of interest rate derivatives designated as hedging instruments, loan level derivatives, risk participation agreements (RPA in/out), and foreign exchange contracts represent a Level 2 valuation and are based on settlement values adjusted for credit risks associated with the counterparties and the Company and observable market interest rate curves and foreign exchange rates where applicable. Credit risk adjustments consider factors such as the likelihood of default by the Company and its counterparties, its net exposures and remaining contractual life.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
To date, the Company has not realized any losses due to a counterparty's inability to pay any net uncollateralized position. Refer also to Note 8, "Derivatives and Hedging Activities."
There were no transfers between levels for assets and liabilities recorded at fair value on a recurring basis at March 31, 2026 and December 31, 2025, respectively.
The following tables summarize information about significant unobservable inputs related to the Company's categories of Level 3 financial assets and liabilities measured on a recurring basis.
Quantitative Information About Level 3 Fair Value Measurements - Recurring Basis
Financial Instrument Estimated Fair Value Valuation Technique(s) Significant Unobservable Inputs Range of Inputs Weighted Average
(In Thousands)
March 31, 2026
Assets
Municipal obligations $ 13,886  Discounted Cash Flow Discount Rate from Bloomberg BVAL
0.0%-3.71%
 2.36  %
Corporate debt obligations 3,081  Observable Bids Discount Rate from Bloomberg BVAL
4.95%-5.74%
 1.14  %
The following table summarizes the changes in estimated fair value for all assets and liabilities measured at estimated fair value on a recurring basis using significant unobservable inputs (Level 3)
Changes in Estimated Fair Value of Level 3 Financial Assets and Liabilities - Recurring Basis
Three Months Ended March 31, 2026
(In Thousands)
Municipal obligations Corporate debt obligations
Beginning balance $ 18,612  $ 3,356 
Purchases 32  6 
Unrealized gains (losses) included in comprehensive income (177) (264)
Transfers in —  — 
Transfers out —  — 
Sales —  — 
Maturities, calls, and paydowns (4,581) (17)
Ending balance $ 13,886  $ 3,081 

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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Assets and Liabilities Recorded at Fair Value on a Non-Recurring Basis
Assets and liabilities measured at fair value on a non-recurring basis are summarized below at the dated indicated:
  Carrying Value as of March 31, 2026
  Level 1 Level 2 Level 3 Total
  (In Thousands)
Assets measured at fair value on a non-recurring basis:        
Collateral-dependent impaired loans and leases $ —  $ —  $ 127,134  $ 127,134 
Repossessed assets —  2,623  —  2,623 
Total assets measured at fair value on a non-recurring basis $ —  $ 2,623  $ 127,134  $ 129,757 
  Carrying Value as of December 31, 2025
  Level 1 Level 2 Level 3 Total
  (In Thousands)
Assets measured at fair value on a non-recurring basis:        
Collateral-dependent impaired loans and leases $ —  $ —  $ 112,142  $ 112,142 
Repossessed assets —  2,591  —  2,591 
Total assets measured at fair value on a non-recurring basis $ —  $ 2,591  $ 112,142  $ 114,733 
Collateral-Dependent Impaired Loans and Leases
For nonperforming loans and leases where the credit quality of the borrower has deteriorated significantly, fair values of the underlying collateral were estimated using purchase and sales agreements (Level 2), or comparable sales or recent appraisals (Level 3), adjusted for selling costs and other expenses.
Repossessed Assets
Repossessed assets are carried at estimated fair value less costs to sell based on auction pricing (Level 2).
The table below presents quantitative information about significant unobservable inputs (Level 3) for assets measured at fair value on a non-recurring basis at the dates indicated.
Fair Value Valuation Technique
At March 31,
2026		 At December 31, 2025
  (Dollars in Thousands)
Collateral-dependent impaired loans and leases $ 127,134  $ 112,142 
Appraisal of collateral (1)
Other real estate owned —  — 
Appraisal of collateral (1)
________________________________________________________________________
(1) Fair value is generally determined through independent appraisals of the underlying collateral. The Company may also use another available source of collateral assessment to determine a reasonable estimate of the fair value of the collateral. Appraisals may be adjusted by management for qualitative factors such as economic factors and estimated liquidation expenses. The range of the unobservable inputs used may vary but is generally 0% - 10% on the discount for costs to sell and 0% - 15% on appraisal adjustments.
Summary of Estimated Fair Values of Financial Instruments
The following table presents the carrying amount, estimated fair value, and placement in the fair value hierarchy of the Company's financial instruments at the dates indicated. This table excludes financial instruments for which the carrying amount approximates fair value. Financial assets for which the fair value approximates carrying value include cash and cash equivalents, restricted equity securities, and accrued interest receivable. Financial liabilities for which the fair value approximates carrying value include non-maturity deposits, short-term borrowings, and accrued interest payable. There were no transfers between levels during the three months ended March 31, 2026.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
      Fair Value Measurements at March 31, 2026
  Carrying
Value		 Estimated
Fair Value		 Level 1
Inputs		 Level 2
Inputs		 Level 3
Inputs
  (In Thousands)
Financial assets:          
Loans and leases, net $ 17,679,779  $ 17,508,538  $ —  $ —  $ 17,508,538 
Financial liabilities:        
Certificates of deposits and brokered deposits 4,214,355  4,199,715  —  4,199,715  — 
Borrowed funds 1,072,503  1,073,489  —  1,073,489  — 
      Fair Value Measurements at December 31, 2025
  Carrying
Value		 Estimated
Fair Value		 Level 1
Inputs		 Level 2
Inputs		 Level 3
Inputs
  (In Thousands)
Financial assets:          
Loans and leases, net $ 17,776,713  $ 17,672,269  $ —  $ —  $ 17,672,269 
Financial liabilities:  
Certificates of deposits and brokered deposits 4,566,899  4,566,386  —  4,566,386  — 
Borrowed funds 788,360  796,543  —  796,543  — 
Loans and Leases
The fair values of performing loans and leases was estimated by segregating the portfolio into its primary loan and lease categories — commercial real estate mortgage, multi-family mortgage, construction, commercial, equipment financing, condominium association, residential mortgage, home equity and other consumer. These categories were further disaggregated based upon significant financial characteristics such as type of interest rate (fixed / variable) and payment status (current / past-due). Using the exit price valuation method, the Company discounts the contractual cash flows for each loan category using interest rates currently being offered for loans with similar terms to borrowers of similar quality and incorporates estimates of future loan prepayments.
Deposits
The fair values of deposit liabilities with no stated maturity (demand, NOW, savings and money market savings accounts) are equal to the carrying amounts payable on demand. The fair value of certificates of deposit represents contractual cash flows discounted using interest rates currently offered on deposits with similar characteristics and remaining maturities. The fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the Company's core deposit relationships (deposit-based intangibles).
Borrowed Funds
The fair value of federal funds purchased is equal to the amount borrowed. The fair value of FHLB advances and repurchase agreements represents contractual repayments discounted using interest rates currently available for borrowings with similar characteristics and remaining maturities. The fair values reported for retail repurchase agreements are based on the discounted value of contractual cash flows. The discount rates used are representative of approximate rates currently offered on borrowings with similar characteristics and maturities. The fair values reported for subordinated deferrable interest debentures are based on the discounted value of contractual cash flows. The discount rates used are representative of approximate rates currently offered on instruments with similar terms and maturities.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
(12) Commitments and Contingencies
Off-Balance Sheet Financial Instruments
The Company is party to off-balance sheet financial instruments in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include loan commitments, standby and commercial letters of credit, and loan level derivatives. According to GAAP, these financial instruments are not recorded in the financial statements until they are funded or related fees are incurred or received.
The contract amounts reflect the extent of the involvement the Company has in particular classes of these instruments. Such commitments involve, to varying degrees, elements of credit risk and interest-rate risk in excess of the amount recognized in the consolidated balance sheets. The Company's exposure to credit loss in the event of non-performance by the counterparty is represented by the fair value of the instruments. The Company uses the same policies in making commitments and conditional obligations as it does for on-balance sheet instruments.
Financial instruments with off-balance-sheet risk at the dates indicated follow:
  At March 31, 2026 At December 31, 2025
  (In Thousands)
Financial instruments whose contract amounts represent credit risk:    
Commitments to originate loans and leases:    
Commercial real estate $ 222,501  $ 99,457 
Commercial 136,295  137,923 
Residential mortgage 7,100  23,115 
Home equity 10,926  9,022 
Unadvanced portion of loans and leases 2,254,538  2,483,239 
Unused lines of credit:    
Home equity 1,177,379  1,175,702 
Other consumer 176,127  148,358 
Other commercial —  — 
Unused letters of credit:  
     Financial standby letters of credit 9,971  10,440 
Performance standby letters of credit 54,996  25,025 
Commercial and similar letters of credit 4,499  58,074 
Interest rate derivatives (Notional principal amounts): 149,679  192,468 
Loan level derivatives (Notional principal amounts):
Receive fixed, pay variable 3,500,284  3,505,840 
Pay fixed, receive variable 3,504,381  3,505,840 
Risk participation-out agreements 681,207  670,834 
Risk participation-in agreements 147,069  153,185 
Foreign exchange contracts (Notional amounts):
Buys foreign currency, sells U.S. currency 2,965  2,785 
Sells foreign currency, buys U.S. currency 2,978  2,800 
Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and may require the payment of a fee by the customer. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer's creditworthiness on a case-by-case basis. The amount of collateral obtained, if any, is based on management's credit evaluation of the borrower.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
Standby and commercial letters of credit are conditional commitments issued by the Company to guarantee performance of a customer to a third party. These standby and commercial letters of credit are primarily issued to support the financing needs of the Company's commercial customers. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loans to customers.
From time to time, the Company enters into loan level derivatives, risk participation agreements or foreign exchange contracts with commercial customers and third-party financial institutions. These derivatives allow the Company to offer long-term fixed-rate commercial loans while mitigating the interest-rate or foreign exchange risk of holding those loans. In a loan level derivative transaction, the Company lends to a commercial customer on a floating-rate basis and then enters into a loan level derivative with that customer. Concurrently, the Company enters into offsetting swaps with a third-party financial institution, effectively minimizing its net interest-rate risk exposure resulting from such transactions. The fair value of these derivatives are presented in Note 8.
Lease Commitments
The Company leases certain office space under various noncancellable operating leases as well as other assets. These leases have terms ranging from 1 year to over 18 years. Certain leases contain renewal options and escalation clauses which can increase rental expenses based principally on the consumer price index and fair market rental value provisions. All of the Company's current outstanding leases are classified as operating leases.
The Company considered the following criteria when determining whether a contract contains a lease, the existence of an identifiable asset and the right to obtain substantially all of the economic benefits from use of the asset through the period. The Company uses the FHLB classic advance rates available as of the lease's start dates as the discount rate to determine the net present value of the remaining lease payments.
Three Months Ended March 31, 2026 Three Months Ended March 31, 2025
(In Thousands)
The components of lease expense was as follows:
Operating lease cost $ 4,948  $ 2,191 
Supplemental cash flow information related to leases was as follows:
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases $ 4,950  $ 2,256 
Right-of-use assets obtained in exchange for new lease obligations:
Operating leases assets $ 1,663  $ — 
Operating leases liabilities 1,663  — 
At March 31, 2026 At December 31, 2025
(In Thousands)
Supplemental balance sheet information related to leases was as follows:
Operating Leases
Operating lease right-of-use assets $ 84,851  $ 82,817 
Operating lease liabilities 92,820  90,713 
Weighted Average Remaining Lease Term
Operating leases 7.96 7.95
Weighted Average Discount Rate
Operating leases 4.2% 4.2%
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)
A summary of future minimum rental payments under such leases at the dates indicated follows:
Minimum Rental Payments
March 31, 2026
  (In Thousands)
Remainder of 2026 $ 14,351 
Year ending:
2027 18,152 
2028 15,689 
2029 12,757 
2030 10,247 
2031 — 
Thereafter 37,254 
Total $ 108,450 
Less imputed interest (15,630)
Present value of lease liability $ 92,820 
Certain leases contain escalation clauses for real estate taxes and other expenditures, which are not included above. The total real estate taxes were $1.0 million and $0.6 million for the three months ended March 31, 2026 and 2025, respectively. Total other expenditures were $0.5 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively. Total rental expense was $4.9 million and $2.2 million for the three months ended March 31, 2026 and 2025, respectively.
Legal Proceedings
In the normal course of business, there are various outstanding legal proceedings. In the opinion of management, after consulting with legal counsel, the consolidated financial position and results of operations of the Company are not expected to be affected materially by the outcome of such proceedings.
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BEACON FINANCIAL CORPORATION AND SUBSIDIARIES
Notes to Unaudited Consolidated Financial Statements (Continued)

(13) Tax Equity Investments
The Company typically accounts for tax equity investments using the proportional amortization method, if certain criteria are met. The election to account for tax equity investments using the proportional amortization method is done so on a tax credit program-by-tax credit program basis. Under the proportional amortization method, the Company amortizes the initial cost of the investment, which is inclusive of any delayed equity contributions, that are unconditional and legally binding or for equity contributions that are contingent on a future event, when that event becomes probable, in proportion to the income tax credits that are allocated to the Company over the period of the investment.
Under the proportional amortization method, the Company amortizes the initial cost of the investment, inclusive of delayed equity contributions, in proportion to the income tax credits that are allocated to the Company over the period of the investment. The net benefits of these investments, which are comprised of income tax credits and operating loss income tax benefits, net of investment amortization, are recognized in the Consolidated Statements of Income as a component of income tax expense. At March 31, 2026 and March 31, 2025, the carrying value of all tax equity investments was $66.2 million and $28.7 million, respectively, and were included in other assets on the Unaudited Consolidated Balance Sheets.
The carrying value of the investments accounted for under the proportional amortization method ("PAM") on March 31, 2026 included $12.5 million of delayed equity contributions described in the chart below.
As of March 31, 2026, the Company's delayed equity contributions were estimated to be paid as follows:
Year Ending December 31, Delayed Equity Contributions
(In Thousands)
2026 $ 7,759 
2027 4,277 
2028 245 
Thereafter 237 
Total delayed equity contributions $ 12,518 
The following table presents income tax credits and other income tax benefits, as well as amortization expense, associated with all tax credit investments for which the Company has elected to apply the PAM.
Three Months Ended March 31,
2026 2025
(In Thousands)
Benefit (expense) included in provision for income taxes
Amortization of tax credit investments $ (2,074) $ (1,006)
Tax credit and other tax benefit (expense) 2,764  1,232 
Net benefit (expense) included in provision for income taxes $ 690  $ 226 
There was no material non-income tax related expense associated with these investments recorded outside of income tax expense for the three months ended March 31, 2026. There were no impairment losses recorded on tax equity investments during the three months ended March 31, 2026.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements
Certain statements contained in this Quarterly Report on Form 10-Q that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties. These statements, which are based on certain assumptions and describe the Company’s future plans, strategies and expectations, can generally be identified by the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions. These statements include, among others, statements regarding the Company’s intent, belief or expectations with respect to economic conditions, trends affecting the Company’s financial condition or results of operations, and the Company’s exposure to market, liquidity, interest-rate and credit risk.
Forward-looking statements are based on the current assumptions underlying the statements and other information with respect to the beliefs, plans, objectives, goals, expectations, anticipations, estimates and intentions of management and the financial condition, results of operations, future performance and business are only expectations of future results. Although the Company believes that the expectations reflected in the Company’s forward-looking statements are reasonable, the Company’s actual results could differ materially from those projected in the forward-looking statements as a result of, among other important factors, changes in interest rates; general economic conditions (including the impact of ongoing armed conflicts, tariffs, inflation, and concerns about liquidity) on a national basis or in the local markets in which the Company operates; turbulence in the capital and debt markets; competitive pressures from other financial institutions; changes in consumer behavior due to changing political, business and economic conditions, or legislative or regulatory initiatives; changes in the value of securities and other assets in the Company’s investment portfolio; increases in loan and lease default and charge-off rates; the adequacy of allowances for loan and lease losses; decreases in deposit levels that necessitate increases in borrowing to fund loans and investments; the diversion of management’s attention from ongoing business operations and opportunities; operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters, and future pandemics; changes in regulation; the possibility that future credit losses may be higher than currently expected due to changes in economic assumptions and adverse economic developments; the risk that goodwill and intangibles recorded in the Company’s financial statements will become impaired; and changes in assumptions used in making such forward-looking statements; and the other risks and uncertainties detailed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025 and other filings submitted to the SEC. Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.
Introduction
Beacon Financial Corporation, a Delaware corporation, is the holding company for Beacon Bank & Trust and its subsidiaries and Clarendon Private.
The Company 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. Clarendon Private is a registered investment advisor with the SEC. Through Clarendon Private, the Company offers a wide range of wealth management services to individuals, families, endowments and foundations to help these clients meet their long-term financial goals.
As a full-service financial institution with 144 banking offices throughout New England and New York, the Bank and its subsidiaries focus their efforts on developing and deepening long-term banking relationships with qualified customers through a full complement of products, excellent customer service, and strong risk management.
The competition for loans and leases and deposits remains strong, with growth and pricing influenced by the Federal Reserve's interest rate-setting actions. Management's scenario analysis of deposit sensitivity to the current competitive rate environment suggests further deposit mix migration and increased sensitivity to interest rates.
As the interest rate environment resets to a more normal, upward-sloping yield curve with shorter-term interest rates lower than longer term interest rates, management expects the net interest margin to increase modestly. This is due to deposit and wholesale funding costs repricing at lower rates, while loans do not reprice at the same magnitude, as well as the accretions from the purchase accounting marks. If both short- and long-term interest rates fall, net interest income models, using a projected flat balance sheet with stable deposit balances, forecast that a parallel decrease in rates will have a negative impact on the Company's net interest income, net interest spread, and net interest margin.
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While the Company's current deposit sensitivity rate is approximately 40%, shifting to a more asset sensitive balance sheet could have additional pressure on interest margins.
As discussed above, 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 income, manage credit risk, increase sources of non-interest income, while managing non-interest expenses.
The Company and the Bank are supervised, examined and regulated by the FRB. As a Massachusetts-chartered trust company, Beacon Bank & Trust is subject to supervision, examination and regulation by the Massachusetts Division of Banks. The FDIC insures the Bank's deposits up to $250,000 per depositor.
The Company’s common stock is traded on the New York Stock Exchange under the symbol “BBT.”
Executive Overview
Balance Sheet
Total assets decreased $1.0 billion, or 17.1% on an annualized basis, to $22.2 billion as of March 31, 2026 from $23.2 billion as of December 31, 2025. The decrease was primarily driven by the reduction in cash balances due to timing fluctuations in customer payroll deposits. Cash, cash equivalents and available for sale investment securities decreased $0.9 billion, or 96.4% on an annualized basis, to $2.8 billion as of March 31, 2026 from $3.7 billion as of December 31, 2025. This decreased the Company's on balance sheet liquidity from 16.1% of total assets as of December 31, 2025 to 12.7% of total assets as of March 31, 2026.
Total loans and leases decreased $105.4 million, or 2.3% on an annualized basis, to $17.9 billion as of March 31, 2026 from $18.0 billion as of December 31, 2025. The Company's commercial loan portfolios, which are composed of commercial real estate loans and commercial loans and leases, represented 77.9% of total loans and leases as of March 31, 2026 and represented 77.4% of total loans and leases as of December 31, 2025.
Total investment securities increased $29.9 million, or 7.1% on an annualized basis, to $1.7 billion as of March 31, 2026 from $1.7 billion as of December 31, 2025.
Cash and cash equivalents decreased $0.9 billion, or 182.0% on an annualized basis, to $1.1 billion as of March 31, 2026 from $2.0 billion as of December 31, 2025. The decrease was primarily due to the fluctuation within payroll deposits.
Total deposits decreased $1.2 billion, or 25.1% on an annualized basis, to $18.3 billion as of March 31, 2026 from $19.5 billion as of December 31, 2025, consisting of a $276.0 million decrease in customer deposits, a $664.9 million decrease in payroll deposits, and a $281.5 million decrease in brokered deposits. The decline in customer deposits was driven largely by seasonal first quarter factors such as tax payments, with additional movement concentrated in a small number of rate‑sensitive, higher‑cost accounts. Core consumer and relationship-based deposits remain stable. Core deposits, which include demand checking, NOW, non-payroll money market and savings accounts, totaled $12.9 billion, or 70.3% of total deposits, as of March 31, 2026, a decrease of $0.2 billion from $13.1 billion, or 67.0% of total deposits, as of December 31, 2025. Payroll deposits totaled $1.2 billion, or 6.6% of total deposits as of March 31, 2026, a decrease of $664.9 million, or 141.6% on an annualized basis, from $1.9 billion, or 9.6% of total deposits as of December 31, 2025. Certificate of deposit balances totaled $4.1 billion, or 22.3% of total deposits as of March 31, 2026, a decrease of $0.1 billion, or 6.8% on an annualized basis, from $4.2 billion, or 21.3% of total deposits as of December 31, 2025. Brokered deposits totaled $128.8 million, or 0.7% of total deposits as of March 31, 2026, a decrease of $281.5 million, or 274.4% on an annualized basis, from $410.4 million, or 2.1% of total deposits as of December 31, 2025.
Total borrowed funds increased $284.1 million, or 144.2% on an annualized basis, to $1.1 billion as of March 31, 2026 from $0.8 billion as of December 31, 2025.
Asset Quality
Nonperforming assets as of March 31, 2026 totaled $151.2 million, or 0.68% of total assets, compared to $116.7 million, or 0.50% of total assets, as of December 31, 2025. Net charge-offs for the three months ended March 31, 2026 were $13.6 million, or 0.30% of average loans and leases on an annualized basis, compared to $7.6 million, or 0.31% of average loans and leases on an annualized basis, for the three months ended March 31, 2025.
The ratio of the allowance for loan and lease losses to total loans and leases was 1.36% as of March 31, 2026, compared to 1.40% as of December 31, 2025.
The ratio of the allowance for loan and lease losses to nonaccrual loans and leases was 164.44% as of March 31, 2026, compared to 221.49% as of December 31, 2025.
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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 11.24% as of March 31, 2026, compared to 10.95% as of December 31, 2025. The Company's Tier 1 leverage ratio was 9.59% as of March 31, 2026, compared to 9.25% as of December 31, 2025. As of March 31, 2026, the Company's Tier 1 risk-based capital ratio was 11.40%, compared to 11.12% as of December 31, 2025. The Company's Total risk-based capital ratio was 13.27% as of March 31, 2026, compared to 13.01% as of December 31, 2025.
The Company's ratio of stockholders' equity to total assets was 11.27% and 10.75% as of March 31, 2026 and December 31, 2025, respectively. The Company's ratio of tangible stockholders' equity to tangible assets (non-GAAP) was 9.07% and 8.62% as of March 31, 2026 and December 31, 2025, respectively.
Net Income
For the three months ended March 31, 2026, the Company reported a net income of $46.2 million, or $0.55 per basic and diluted share, an increase of $27.1 million, or 142.0%, from net income of $19.1 million, or $0.21 per basic and diluted share, for the three months ended March 31, 2025. This increase in net income is primarily the result of an increase in net interest income of $104.9 million and an increase in non-interest income of $18.3 million, partially offset by an increase of $80.8 million in non-interest expense, an increase in the provision for income taxes of $13.4 million, and an increase in provision for credit losses on loans of $1.9 million. Refer to "Non-GAAP Financial Measures and Reconciliation to GAAP" for operating earnings measures. Refer to“Results of Operations" below for further discussion.
The annualized return on average assets was 0.84% for the three months ended March 31, 2026, compared to 0.66% for the three months ended March 31, 2025. The annualized return on average stockholders' equity was 7.32% for the three months ended March 31, 2026, compared to 6.19% for the three months ended March 31, 2025.
The net interest margin was 3.78% for the three months ended March 31, 2026, up from 3.22% for the three months ended March 31, 2025. The increase in the net interest margin was a result of a decrease of 61 basis points in the Company's cost of interest-bearing liabilities to 2.68% for the three months ended March 31, 2026 from 3.29% for the three months ended March 31, 2025, and an increase in the yield on interest-earning assets of 3 basis points to 5.70% for the three months ended March 31, 2026 from 5.67% for the three months ended March 31, 2025.
The Company’s net interest margin and net interest income are sensitive to the structure and level of interest rates as well as competitive pricing in all loan and deposit categories.
Critical Accounting Policies and Estimates
The SEC defines “critical accounting policies” as those involving significant judgments and difficult or complex assumptions by management, often as a result of the need to make estimates about matters that are inherently uncertain or variable, which have, or could have, a material impact on the carrying value of certain assets or net income. The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses, and disclosure of contingent assets and liabilities. Actual results could differ from those estimates. As discussed in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025, management has identified the determination of the ACL as the Company’s most critical accounting policy.
As a result of the Transaction, business combinations became a critical accounting policy.

Business combinations are generally accounted for under the acquisition method of accounting whereby assets acquired and liabilities assumed in business combinations are recorded at their estimated fair value as of the acquisition date. The determination of fair value may involve the use of internal or third-party valuation specialists to assist in the determination of the fair value of certain assets and liabilities at the acquisition date, including loans and leases, core deposit intangibles and time deposits. The excess of the cost of acquisition over these fair values is recognized as goodwill. A description of the valuation methodologies used to estimate the fair values of the significant assets acquired and liabilities assumed can be found in Note 2 "Business Combinations" within the notes to the consolidated financial statements.
Recent Accounting Developments
In November 2025, the FASB issued ASU 2025-08, "Financial Instruments - Credit Losses (Topic 326): Purchased Loans" ("ASU 2025-08"). This ASU aligns the initial recognition of the allowance for loan losses on purchased loans between PCD and non‑PCD assets by applying the gross‑up approach previously required only for PCD loans. The Company elected to adopt this ASU effective January 1, 2025, and applied it to the Transaction completed in the third quarter of 2025, as permitted under the guidance.
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In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (subtopic 220-40): Disaggregation of Income Statement Expense". This ASU updates the disclosure and presentation requirements for certain expenses. This ASU is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. The adoption is not expected to have a material impact on the Company’s consolidated financial statements.
Non-GAAP Financial Measures and Reconciliation to GAAP
In addition to evaluating the 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, return on average tangible equity, the tangible stockholders' equity to tangible assets ratio, tangible book value per share, and dividend payout ratio. Management believes that these non-GAAP financial measures provide information useful to investors in understanding the Company’s underlying operating performance and trends, and facilitates comparisons with the performance assessment of 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 capital position.
The following table reconciles the Company’s operating earnings, operating return on average assets and operating return on average stockholders’ equity for the periods indicated:
At and for the Three Months Ended 
 March 31,
2026 2025
(Dollars in Thousands)
Reported Pretax Income $ 65,953  $ 25,482 
Add:
Merger and restructuring expense (1)
 13,025 971
Operating Pretax Income 78,978 26,453
Effective tax rate 26.1  % 24.3  %
Provision for income taxes 20,590 6,416
Operating earnings after tax $ 58,388 $ 20,037
Operating earnings per common share:
Basic $ 0.70  $ 0.22 
Diluted $ 0.70  $ 0.22 
_______________________________________________________________________________

(1) For the three months ended March 31, 2026 and 2025, merger and restructuring expense was related to the Transaction.


The following tables reconcile the Company’s return on average tangible assets and return on average tangible stockholders’ equity for the periods indicated:
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Three Months Ended
March 31,
2026		 December 31,
2025		 September 30,
2025		 June 30,
2025		 March 31,
2025
(Dollars in Thousands)
Operating earnings $ 58,388 $ 66,402 $ 34,013 $ 22,443 $ 20,037
Average total assets $ 22,135,857 $ 22,644,481 $ 15,210,080 $ 11,402,934 $ 11,543,330
Less: Average goodwill and average identified intangible assets, net 536,900 546,276 353,189 256,508 257,941
Average tangible assets $ 21,598,957 $ 22,098,205 $ 14,856,891 $ 11,146,426 $ 11,285,389
Return on average assets (annualized) 0.84% 0.94% (0.11)% 0.77% 0.66%
Add:
Merger Day 1 CECL provision on unfunded commitments (after-tax) —% —% 0.16% —% —%
Merger and restructuring expense (after-tax) 0.17% 0.19% 0.89% 0.01% 0.03%
Operating return on average assets (annualized) 1.01% 1.13% 0.94% 0.78% 0.69%
Return on average tangible assets (annualized) 0.86% 0.97% (0.11)% 0.79% 0.68%
Add:
Merger Day 1 CECL provision on unfunded commitments (after-tax) —  % —% 0.17% —% —%
Merger and restructuring expense (after-tax) 0.18% 0.19% 0.92% 0.01% 0.03%
Operating return on average tangible assets (annualized) 1.04% 1.16% 0.98% 0.80% 0.71%
Average total stockholders' equity $ 2,523,986 $ 2,453,480 $ 1,678,208 $ 1,252,055 $ 1,235,201
Less: Average goodwill and average identified intangible assets, net 536,900 546,276 353,189 256,508 257,941
Average tangible stockholders' equity $ 1,987,086 $ 1,907,204 $ 1,325,019 $ 995,547 $ 977,260
Return on average stockholders' equity (annualized) 7.32% 8.70% (1.01)% 7.04% 6.19%
Add:
Merger Day 1 CECL provision on unfunded commitments (after-tax) —% —% 1.49% —% —%
Merger and restructuring expense (after-tax) 1.53% 1.74% 8.10% 0.10% 0.24%
Operating return on average stockholders' equity (annualized) 8.85% 10.44% 8.58% 7.14% 6.43%
Return on average tangible stockholders' equity (annualized) 9.30% 11.19% (1.27)% 8.85% 7.82%
Add:
Merger Day 1 CECL provision on unfunded commitments (after-tax) —% —% 1.88% —% —%
Merger and restructuring expense (after-tax) 1.94% 2.24% 10.26% 0.13% 0.30%
Operating return on average tangible stockholders' equity (annualized) 11.24% 13.43% 10.88% 8.98% 8.12%
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Three Months Ended
March 31,
2026		 December 31,
2025		 September 30,
2025		 June 30,
2025		 March 31,
2025
(Dollars in Thousands)
Net (loss) income, as reported $ 46,217 $ 53,366 $ (4,221) $ 22,026 $ 19,100
Average total assets $ 22,135,857 $ 22,644,481 $ 15,210,080 $ 11,402,934 $ 11,543,330
Less: Average goodwill and average identified intangible assets, net 536,900 546,276 353,189 256,508 257,941
Average tangible assets $ 21,598,957 $ 22,098,205 $ 14,856,891 $ 11,146,426 $ 11,285,389
Return on average tangible assets (annualized) 0.86% 0.97% (0.11)% 0.79% 0.68%
Average total stockholders' equity $ 2,523,986 $ 2,453,480 $ 1,678,208 $ 1,252,055 $ 1,235,201
Less: Average goodwill and average identified intangible assets, net 536,900 546,276 353,189 256,508 257,941
Average tangible stockholders' equity $ 1,987,086 $ 1,907,204 $ 1,325,019 $ 995,547 $ 977,260
Return on average tangible stockholders' equity (annualized) 9.30% 11.19% (1.27)% 8.85% 7.82%

The following table reconciles the Company's tangible equity ratio for the periods indicated:
Three Months Ended
March 31,
2026		 December 31,
2025		 September 30,
2025		 June 30,
2025		 March 31,
2025
(Dollars in Thousands)
Total stockholders' equity $ 2,504,781 $ 2,496,061 $ 2,461,015 $ 1,254,171 $ 1,240,182
Less: Goodwill and identified intangible assets, net 536,503 541,175 551,810 255,822 257,252
Tangible stockholders' equity $ 1,968,278 $ 1,954,886 $ 1,909,205 $ 998,349 $ 982,930
Total assets $ 22,227,616 $ 23,220,372 $ 22,867,458 $ 11,568,745 $ 11,519,869
Less: Goodwill and identified intangible assets, net 536,503 541,175 551,810 255,822 257,252
Tangible assets $ 21,691,113 $ 22,679,197 $ 22,315,648 $ 11,312,923 $ 11,262,617
Tangible stockholders' equity to tangible assets 9.07% 8.62% 8.56% 8.82% 8.73%

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The following table reconciles the Company's tangible book value per share for the periods indicated:
Three Months Ended
March 31,
2026		 December 31,
2025		 September 30,
2025		 June 30,
2025		 March 31,
2025
(Dollars in Thousands)
Tangible stockholders' equity $ 1,968,278  $ 1,954,886  $ 1,909,205  $ 998,349  $ 982,930 
Common shares issued 89,576,403  89,576,403  89,576,403  96,998,075  96,998,075 
Less:
Treasury shares 5,548,772  5,545,511  5,449,039  7,039,136  7,037,610 
Unvested restricted stock 211,545  214,806  218,503  854,334  855,860 
Common shares outstanding 83,816,086  83,816,086  83,908,861  89,104,605  89,104,605 
Tangible book value per share $ 23.48  $ 23.32  $ 22.75  $ 11.20  $ 11.03 

The following table reconciles the Company's dividend payout ratio for the periods indicated:
Three Months Ended
March 31,
2026		 December 31,
2025		 September 30,
2025		 June 30,
2025		 March 31,
2025
(Dollars in Thousands)
Dividends paid $ 27,034 $ 27,031 $ 12,029 $ 12,029 $ 12,029
Net income, as reported $ 46,217 $ 53,366 $ (4,221) $ 22,026 $ 19,100
Dividend payout ratio 58.49% 50.65% (284.98)% 54.61% 62.98%

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Financial Condition
Loans and Leases
The following table summarizes the Company's portfolio of loan and lease receivables as of the dates indicated:
At March 31, 2026 At December 31, 2025
Balance Percent
of Total		 Balance Percent
of Total
(Dollars in Thousands)
Commercial real estate loans:
Commercial real estate $ 7,187,735  40.1  % $ 7,235,397  40.1  %
Multi-family mortgage 2,148,297  12.0  % 2,155,980  12.0  %
 Construction 621,376  3.5  % 620,717  3.4  %
Total commercial real estate loans 9,957,408  55.6  % 10,012,094  55.5  %
Commercial loans and leases:    
Commercial 2,938,469  16.4  % 2,784,152  15.4  %
Equipment financing 1,073,505  6.0  % 1,163,211  6.5  %
Total commercial loans and leases 4,011,974  22.4  % 3,947,363  21.9  %
 Consumer loans:      
Residential mortgage 3,167,549  17.7  % 3,233,425  17.9  %
 Home equity 656,237  3.6  % 695,307  3.9  %
 Other consumer 130,988  0.7  % 141,363  0.8  %
Total consumer loans 3,954,774  22.0  % 4,070,095  22.6  %
Total loans and leases 17,924,156  100.0  % 18,029,552  100.0  %
Allowance for loan and lease losses (244,377) (252,839)
Net loans and leases $ 17,679,779  $ 17,776,713 

The following table sets forth the growth in the Company’s loan and lease portfolios during the three months ended March 31, 2026:
  At March 31,
2026		 At December 31,
2025		 Dollar Change Percent Change
(Annualized)
  (Dollars in Thousands)
Commercial real estate $ 9,957,408  $ 10,012,094  $ (54,686) (2.2) %
Commercial 4,011,974  3,947,363  64,611  6.5  %
Consumer 3,954,774  4,070,095  (115,321) (11.3) %
Total loans and leases $ 17,924,156  $ 18,029,552  $ (105,396) (0.8) %
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.
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 a total credit exposure to one obligor relationship may not exceed $90.0 million unless approved by the Company's Credit Committee. As of March 31, 2026, there were zero borrowers with loans and commitments over $90.0 million. As of December 31, 2025, the Company's maximum credit exposure was $90.0 million and there was one borrower with loans and commitments over $90.0 million. The total of those loans and commitments was $94.9 million, or 0.8% of total loans and commitments, as of December 31, 2025.
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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 composed 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 55.6% of total loans and leases outstanding as of March 31, 2026.
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 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. 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's commercial real estate portfolio is composed primarily of loans secured by apartment buildings $2.8 billion), retail stores ($2.0 billion), industrial properties ($1.6 billion), office buildings ($1.2 billion), and lodging services ($556.8 million) as of March 31, 2026.
The following table presents the percentage of the Company's commercial real estate loan portfolio by borrower type that is owner and non-owner occupied as of March 31, 2026.
At March 31, 2026
  Owner Occupied Non-Owner Occupied Total
Borrower type:
Multi-family buildings —  % 27.9  % 27.9  %
Retail stores 5.3  % 11.0  % 16.3  %
Industrial properties 1.1  % 10.5  % 11.6  %
Office buildings 4.9  % 15.1  % 20.0  %
Lodging services 0.2  % 5.4  % 5.6  %
Other 6.5  % 12.1  % 18.6  %
Total 18.0  % 82.0  % 100.0  %
The following table presents the percentage of the Company's commercial real estate loan portfolio by geographic concentration that is owner and non-owner occupied as of March 31, 2026.
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At March 31, 2026
  Owner Occupied Non-Owner Occupied Total
Geographic concentration:
New England 11.3  % 59.2  % 70.5  %
New York 3.6  % 17.7  % 21.3  %
Other 3.1  % 5.1  % 8.2  %
Total 18.0  % 82.0  % 100.0  %
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.
Criteria applied in underwriting construction loans for which the primary source of repayment is the sale of the property are 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 Company's commercial loan and lease portfolio is composed of commercial loans & equipment financing loans and leases, which represented 22.4% of total loans outstanding as of March 31, 2026.
The Company's commercial loan and lease portfolio is composed primarily of loans and leases to small to medium sized businesses ($1.4 billion), retail ($434.1 million), recreation services ($362.4 million), manufacturing ($321.0 million), rental and leasing services ($220.3 million), food services ($184.9 million), and transportation services ($132.7 million) as of March 31, 2026.
The following table presents the percentage of the Company's commercial loan portfolio by geographic concentration as of March 31, 2026.
At March 31, 2026
  Total
Geographic concentration:
New England 51.6  %
New York 16.8  %
Other 31.6  %
Total 100.0  %
The Company provides commercial banking services to companies in its market areas. 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 businesses. 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 FHLB indices.
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’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, distributors, and owner-operated start-ups as well as existing customers that are expanding their operations. The equipment financing portfolio is composed primarily of loans to finance vended-laundry, and to a lesser degree larger industrial laundries, tow trucks, fitness, and convenience/grocery stores.
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Typically, the loans are priced at a fixed rate of interest and require monthly payments over their 5- to 10-year life. The yields earned on equipment financing loans are higher than those earned on the commercial loans made by the Bank 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.
Consumer Loans
The consumer loan portfolio, which is composed of residential mortgage loans, home equity loans and lines of credit, and other consumer loans, represented 22.0% of total loans outstanding as of March 31, 2026. The Company focuses its mortgage and home equity lending on existing and new customers within its branch networks.
The Company originates adjustable- and fixed-rate residential mortgage loans secured by one- to four-family residences. Each residential mortgage loan granted is subject to a satisfactorily completed application, employment verification, credit 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.
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 March 31, 2026, other consumer loans equaled $131.0 million, or 0.7% of total loans outstanding.
Asset Quality
Criticized and Classified Assets
The Company's management rates certain loans and leases as OAEM, "substandard" or "doubtful" based on criteria established under banking regulations. 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 March 31, 2026, the Company had $797.6 million of total assets that were designated as criticized. This compares to $683.7 million of assets designated as criticized as of December 31, 2025. The increase of $113.9 million in criticized assets was primarily driven by downgrades in four loans in our commercial real estate portfolio.
Nonperforming Assets
"Nonperforming assets" consist of nonaccrual loans and leases, 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 unaudited 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. When a loan is placed on nonaccrual status, interest accruals cease and all previously accrued and uncollected 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 months of performance has been achieved.
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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 modified 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.
As of March 31, 2026, the Company had nonperforming assets of $151.2 million, representing 0.68% of total assets, compared to nonperforming assets of $116.7 million, or 0.50% of total assets as of December 31, 2025. The increase of $34.5 million in nonperforming assets during the three months ended March 31, 2026 was primarily driven by increases in nonperforming commercial real estate and multi-family loans, partially offset by a decline in equipment financing nonperforming balances.
The Company evaluates the underlying collateral of each 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, it is likely that the level of nonperforming assets would increase, as would the level of charged-off loans.        
Past Due and Accruing
As of March 31, 2026, the Company had $5.8 million loans and leases greater than 90 days past due and accruing, compared to $37.8 million loans as of December 31, 2025.
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The following table sets forth information regarding nonperforming assets for the periods indicated:
At March 31, 2026 At December 31, 2025
(Dollars in Thousands)
Nonperforming loans and leases:
Nonaccrual loans and leases:
Commercial real estate $ 65,127  $ 41,246 
Multi-family mortgage 12,995  4,065 
Construction —  — 
Total commercial real estate loans 78,122  45,311 
Commercial 22,626  16,716 
Equipment financing 38,633  42,718 
Total commercial loans and leases 61,259  59,434 
Residential mortgage 5,807  6,465 
Home equity 3,222  2,811 
Other consumer 206  135 
Total consumer loans 9,235  9,411 
Total nonaccrual loans and leases 148,616  114,156 
Other real estate owned —  — 
Other repossessed assets 2,623  2,591 
Total nonperforming assets $ 151,239  $ 116,747 
Loans and leases past due greater than 90 days and accruing $ 5,834  $ 37,823 
Total delinquent loans and leases 61-90 days past due 32,082  20,244 
Total nonperforming loans and leases as a percentage of total loans and leases 0.83  % 0.63  %
Total nonperforming assets as a percentage of total assets 0.68  % 0.50  %
Total delinquent loans and leases 61-90 days past due as a percentage of total loans and leases 0.18  % 0.11  %
Allowance for Credit Losses
The ACL consists of general and specific allowances and reflects management's estimate of expected loan and lease losses over the life of the loan or lease. Management uses a consistent and systematic process and methodology to evaluate the adequacy of the ACL on a quarterly basis. Management continuously evaluates and challenges inputs and assumptions in the ACL.
While management evaluates currently available information in establishing the ACL, 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 ACL on a quarterly basis. In addition, various regulatory agencies, as an integral part of their examination process, periodically review a financial institution's ACL and carrying amounts of OREO. 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.
The Company’s allowance methodology provides a quantification of estimated losses in the portfolio. Under the current methodology, management estimates losses over the life of the loan using reasonable and supportable forecasts. Forecasts, loan data, and model documentation are extensively analyzed and reviewed throughout the quarter to ensure estimated losses are appropriate at quarter end. Qualitative adjustments are applied to account for risk factors not captured by the model. These adjustments are thoroughly reviewed and documented to provide clarity and a reasonable basis for any deviations from the model.
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For March 31, 2026, qualitative adjustments were applied to the commercial real estate, commercial, and consumer portfolios resulting in a net addition in total reserves compared to modeled calculations.
The following tables present the changes in the allowance for loan and lease losses by portfolio category for the three months ended March 31, 2026 and 2025.
At and for the Three Months Ended March 31, 2026
Commercial
Real Estate		 Commercial Consumer Total
(In Thousands)
Balance at December 31, 2025 $ 142,391  $ 86,490  $ 23,958  $ 252,839 
Charge-offs (7,357) (8,435) (88) (15,880)
Recoveries 360  1,824  145  2,329 
Provision (credit) for loan and lease losses excluding unfunded commitments 15,040  4,418  (14,369) 5,089 
Balance at March 31, 2026 $ 150,434  $ 84,297  $ 9,646  $ 244,377 
Total loans and leases $ 9,957,408  $ 4,011,974  $ 3,954,774  $ 17,924,156 
Total allowance for loan and lease losses as a percentage of total loans and leases 1.51  % 2.10  % 0.24  % 1.36  %

At and for the Three Months Ended March 31, 2025
Commercial
Real Estate		 Commercial Consumer Total
(In Thousands)
Balance at December 31, 2024 $ 74,171  $ 44,169  $ 6,743  $ 125,083 
Charge-offs —  (9,069) (4) (9,073)
Recoveries —  1,422  54  1,476 
Provision (credit) for loan and lease losses (172) 6,834  (3) 6,659 
Balance at March 31, 2025 $ 73,999  $ 43,356  $ 6,790  $ 124,145 
Total loans and leases $ 5,580,982  $ 2,512,912  $ 1,548,828  $ 9,642,722 
Total allowance for loan and lease losses as a percentage of total loans and leases 1.33  % 1.73  % 0.44  % 1.29  %
At March 31, 2026, the allowance for loan and lease losses decreased to $244.4 million, or 1.36% of total loans and leases outstanding. This compared to an allowance for loan and lease losses of $252.8 million, or 1.40% of total loans and leases outstanding, as of December 31, 2025.
Net charge-offs on loans and leases for the three months ended March 31, 2026 and 2025 were $13.6 million and $7.6 million, respectively. As a percentage of average loans and leases, annualized net charge-offs for the three months ended March 31, 2026 and 2025 were 0.30% and 0.31%, respectively. The year over year increase in net charge-offs was primarily due to increases in net charge-offs of $7.0 million in commercial real estate loans.
As of March 31, 2026, the Company had $192.9 million loans and leases delinquent more than 30 days, compared to $176.2 million loans as of December 31, 2025. The increase of $17.2 million was primary driven by higher delinquencies in commercial real estate mortgage loans and leases.
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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 March 31, 2026 At December 31, 2025
Amount Percent of
Allowance in Each Category
to Total
Allowance		 Percent of
Loans
in Each
Category to
Total
Loans		 Amount Percent of
Allowance in Each Category
to Total Allowance		 Percent of
Loans
in Each
Category to
Total
Loans
(Dollars in Thousands)
Commercial real estate $ 112,777  46.1  % 40.1  % $ 109,525  43.3  % 40.1  %
Multi-family mortgage 24,894  10.2  % 12.0  % 22,168  8.8  % 12.0  %
Construction 12,763  5.2  % 3.5  % 10,698  4.2  % 3.4  %
Total commercial real estate loans 150,434  61.5  % 55.6  % 142,391  56.3  % 55.5  %
Commercial 43,575  17.8  % 16.4  % 53,651  21.2  % 15.4  %
Equipment financing 40,722  16.7  % 6.0  % 32,839  13.0  % 6.5  %
Total commercial loans 84,297  34.5  % 22.4  % 86,490  34.2  % 21.9  %
Residential mortgage 5,521  2.3  % 17.7  % 16,558  6.5  % 17.9  %
Home equity 3,015  1.2  % 3.6  % 4,980  2.0  % 3.9  %
Other consumer 1,110  0.5  % 0.7  % 2,420  1.0  % 0.8  %
Total consumer loans 9,646  4.0  % 22.0  % 23,958  9.5  % 22.6  %
Total $ 244,377  100.0  % 100.0  % $ 252,839  100.0  % 100.0  %
Management believes that the allowance for loan and lease losses as of March 31, 2026 is appropriate.
Investment Securities
The investment portfolio exists primarily for liquidity purposes, and secondarily as a source 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 14% of total assets.
Cash, cash equivalents, and investment securities decreased $0.9 billion to $2.8 billion as of March 31, 2026, from $3.7 billion as of December 31, 2025. Cash, cash equivalents, and investment securities were 12.7% of total assets as of March 31, 2026, compared to 16.1% of total assets at December 31, 2025.
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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 March 31, 2026 At December 31, 2025
  Amortized
Cost		 Fair Value Amortized
Cost		 Fair Value
  (In Thousands)
Investment securities available-for-sale:        
GSE debentures $ 191,035  $ 178,596  $ 185,449  $ 173,677 
GSE CMOs 563,834  553,581  500,446  496,570 
GSE MBSs 326,216  316,124  334,476  325,745 
Municipal obligations 225,345  228,488  231,924  240,216 
Corporate debt obligations 35,359  35,994  39,209  40,023 
U.S. Treasury bonds 419,142  405,427  424,214  412,037 
Foreign government obligations 500  500  500  500
Total investment securities available-for-sale $ 1,761,431  $ 1,718,710  $ 1,716,218  $ 1,688,768 

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 are priced this way and are included in Level 1 of the fair value hierarchy in accordance with the “Fair Value Measurements and Disclosures” Topic of the FASB, or ASC 820. 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, all of which are included in Level 2. Certain fair values are estimated using pricing models and are included in Level 3.

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. 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 totaled $89.2 million for the three months ended March 31, 2026 compared to $27.2 million for the same period in 2025. For the three months ended March 31, 2026 and 2025 , the Company did not sell any investment securities available-for-sale. For the three months ended March 31, 2026, the Company purchased $129.1 million of investment securities available-for-sale, compared to $0.7 million for the same period in 2025.
As of March 31, 2026, the fair value of all investment securities available-for-sale was $1.7 billion with $42.7 million of net unrealized losses, compared to a fair value of $1.7 billion and net unrealized losses of $27.5 million as of December 31, 2025. As of March 31, 2026, $1.0 billion, or 59.5%, of the portfolio, had gross unrealized losses of $51.0 million. This compares to $552.9 million, or 32.7%, of the portfolio with gross unrealized losses of $44.7 million as of December 31, 2025. The Company's unrealized loss position increased in 2026 primarily driven by a increase in current market rates.
Restricted Equity Securities
FHLB of Boston and FHLB of New York Stock—The Company invests in the stock of the FHLB of Boston and FHLB of New York as a requirement to borrow funds from the FHLB. As of March 31, 2026, the Company owned stock in the FHLBs with a carrying value of $39.6 million, an increase of $10.2 million from $29.4 million as of December 31, 2025.
Federal Reserve Bank Stock—The Company invests in the stock of the Federal Reserve Bank of Boston and the Federal Reserve Bank of New York as a condition of the Bank's membership in the Federal Reserve System. As of March 31, 2026 the Company owned stock in the Federal Reserve Banks with a carrying value of $57.2 million, a decrease of $0.2 million from $57.4 million as of December 31, 2025.
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Other Stock—The Company invests in a small number of other restricted equity securities. As of March 31, 2026, the Company owned stock in other restricted equity securities with a carrying value of $0.6 million, unchanged from December 31, 2025.
Deposits

The following table presents the Company's deposit mix at the dates indicated.
  At March 31, 2026 At December 31, 2025
  Amount Percent
of Total		 Weighted
Average
Rate		 Amount Percent
of Total		 Weighted
Average
Rate
  (Dollars in Thousands)
Non-interest-bearing deposits:
Demand checking accounts $ 3,861,000  21.1  % —  % $ 4,032,529  20.7  % —  %
Interest-bearing deposits:    
NOW accounts 1,520,600  8.3  % 0.90  % 1,445,894  7.4  % 0.88  %
Savings accounts 3,088,857  16.9  % 1.85  % 2,954,029  15.1  % 1.82  %
Money market accounts 4,393,607  24.0  % 2.41  % 4,636,548  23.8  % 2.62  %
Payroll deposit accounts 1,213,861  6.6  % 2.98  % 1,878,758  9.6  % 3.42  %
Certificate of deposit accounts 4,085,511  22.3  % 3.43  % 4,156,540  21.3  % 3.59  %
Brokered deposit accounts 128,844  0.7  % 4.07  % 410,359  2.1  % 4.13  %
Total interest-bearing deposits 14,431,280  78.9  % 2.48  % 15,482,128  79.3  % 2.60  %
Total deposits $ 18,292,280  100.0  % 1.96  % $ 19,514,657  100.0  % 2.06  %

Total deposits decreased $1.2 billion to $18.3 billion as of March 31, 2026, compared to $19.5 billion as of December 31, 2025. Deposits as a percentage of total assets was 82.3% and 84.0% as of March 31, 2026 and December 31, 2025, respectively.
During the three months ended March 31, 2026, Core deposits decreased $0.2 billion. The ratio of Core deposits to total deposits decreased to 70.3% as of March 31, 2026 from 67.0% as of December 31, 2025.
Payroll deposits totaled $1.2 billion as of March 31, 2026, compared to $1.9 billion as of December 31, 2025.
Certificate of deposit accounts were $4.1 billion as of March 31, 2026, compared to $4.2 billion as of December 31, 2025. Certificate of deposit accounts increased as a percentage of total deposits to 22.3% as of March 31, 2026 from 21.3% as of December 31, 2025.

Brokered deposits decreased $281.5 million to $128.8 million as of March 31, 2026, compared to $410.4 million as of December 31, 2025. Brokered deposits decreased as a percentage of total deposits to 0.7% as of March 31, 2026 from 2.1% as of December 31, 2025. 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 total amount of brokered deposits the Company may hold to 15% of total assets.

The following table sets forth the distribution of the average balances of the Company's deposit accounts for the periods indicated and the weighted average interest rates on each category of deposits presented. Averages for the periods presented are based on daily balances.
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Three Months Ended March 31,
2026 2025
Average
Balance		 Percent
of Total
Average
Deposits		 Weighted
Average
Rate		 Average
Balance		 Percent
of Total
Average
Deposits		 Weighted
Average
Rate
(Dollars in Thousands)
Core deposits:
Non-interest-bearing demand checking accounts $ 3,866,588  20.8  % —  % $ 1,680,527  18.9  % —  %
NOW accounts 1,494,773  8.1  % 0.96  % 628,346  7.1  % 0.65  %
Savings accounts 3,032,997  16.4  % 1.82  % 1,743,688  19.6  % 2.37  %
Money market accounts 4,513,420  24.3  % 2.42  % 2,187,581  24.6  % 2.52  %
Total core deposits 12,907,778  69.6  % 1.37  % 6,240,142  70.2  % 1.59  %
Certificate of deposit accounts 4,136,313  22.3  % 3.62  % 1,886,386  21.2  % 4.21  %
Brokered deposit accounts 307,179  1.7  % 4.06  % 767,275  8.6  % 4.82  %
Payroll deposits 1,196,070  6.4  % 3.05  % —  —  % —  %
Total deposits $ 18,547,340  100.0  % 2.01  % $ 8,893,803  100.0  % 2.41  %

As of March 31, 2026 and December 31, 2025, the Company had outstanding certificates of deposit of $250,000 or more, maturing as follows:
At March 31, 2026 At December 31, 2025
Amount Weighted
Average Rate		 Amount Weighted
Average Rate
(Dollars in Thousands)
Maturity period:
Six months or less $ 1,097,784  3.68  % $ 1,041,742  3.80  %
Over six months through 12 months 237,729  3.44  % 274,408  3.73  %
Over 12 months 68,265  3.35  % 82,779  3.49  %
Total certificates of deposit of $250,000 or more $ 1,403,778  3.63  % $ 1,398,929  3.77  %
In accordance with the FDIC’s Call Report instructions, the Company reported uninsured deposits of $7.1 billion as of March 31, 2026 which includes approximately $665.8 million of internal operating deposit accounts. The Company participates in the IntraFi Network. This allows customers to seek increased FDIC insurance protection above the federally insured limit of $250,000. The Company had total IntraFi Network deposits as of March 31, 2026 of $929.4 million which are excluded from our uninsured deposit total.
Borrowed Funds
The following table sets forth certain information regarding advances from the FHLB, subordinated debentures and notes and other borrowed funds for the periods indicated:
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Three Months Ended 
 March 31,
2026 2025
(Dollars in Thousands)
Borrowed funds:
Average balance outstanding $ 702,163 $ 1,163,315
Maximum amount outstanding at any month-end during the period 1,072,503 1,192,874
Balance outstanding at end of period 1,072,503 1,155,827
Weighted average interest rate for the period 4.87  % 4.96  %
Weighted average interest rate at end of period 4.38  % 4.89  %
Advances from the FHLB
The Company uses FHLB 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 Bank 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 FHLB will advance to member institutions, including the Company, fluctuates from time to time in accordance with the policies of the FHLB.
FHLB borrowings increased $266.3 million to $822.1 million as of March 31, 2026 with a total capacity of $4.6 billion. As of December 31, 2025, FHLB borrowings stood at $555.8 million.
Subordinated Debentures and Notes
The Company has two $5.0 million subordinated debentures due on June 26, 2033 and March 17, 2034, respectively. The Company is obligated to pay 3-month CME term SOFR plus spread adjustment of 0.26% plus 3.10% and 3-month CME term SOFR plus spread adjustment of 0.26% plus 2.79%, respectively, on a quarterly basis until the debentures mature.
The Company sold $75.0 million of 6.0% fixed-to-floating rate subordinated notes due September 15, 2029. The Company is obligated to pay 3-month CME term SOFR plus spread adjustment of 0.26% plus 3.32% quarterly until the notes mature in September 2029.
In connection with the Transaction, the Company assumed ten year subordinated notes in the amount of $100.0 million. The interest rate is fixed at 5.50% until June 30, 2027, after which the notes become callable and will bear interest at a floating rate per annum equal to a benchmark rate (which is expected to be Three-Month Term SOFR), plus 249 basis points.
The Company holds 100% of the common stock of Berkshire Hills Capital Trust I (“Trust I”) which is included in other assets with a cost of $0.5 million. The sole asset of Trust I is $15.5 million of the Company’s junior subordinated debentures due in 2035. These debentures bear interest at a variable rate equal to LIBOR plus 1.85%. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value on each quarterly payment date. Trust I is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust I is not consolidated into the Company’s financial statements.
The Company holds 100% of the common stock of SI Capital Trust II (“Trust II”) which is included in other assets with a cost of $0.2 million. The sole asset of Trust II is $8.2 million of the Company’s junior subordinated debentures due in 2036. These debentures bear interest at a variable rate equal to LIBOR plus 1.70%. The Company has the right to defer payments of interest for up to five years on the debentures at any time, or from time to time, with certain limitations, including a restriction on the payment of dividends to shareholders while such interest payments on the debentures have been deferred. The Company has not exercised this right to defer payments. The Company has the right to redeem the debentures at par value. Trust II is considered a variable interest entity for which the Company is not the primary beneficiary. Accordingly, Trust II is not consolidated into the Company’s financial statements.
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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 March 31,
2026		 December 31, 2025
  (Dollars in Thousands)
June 26, 2003 Variable;
3-month CME term SOFR + spread adjustment of 0.26% + 3.10%		 June 26, 2033 June 26, 2026 $ 4,938  $ 4,935 
March 17, 2004 Variable;
3-month CME term SOFR + spread adjustment of 0.26% + 2.79%		 March 17, 2034 June 17, 2026 4,907  4,902 
June 30, 2005 Variable;
3-month CME term SOFR + spread adjustment of 0.26% + 1.85%		 August 23, 2035 May 26, 2026 13,981  13,943 
September 21, 2006 Variable;
3-month CME term SOFR + spread adjustment of 0.26% + 1.70%		 March 17, 2034 June 15, 2026 7,253  7,232 
September 15, 2014 Variable;
3-month CME term SOFR + spread adjustment of 0.26% + 3.32%		 September 15, 2029 June 15, 2026 72,529  72,528 
June 30, 2022 5.5% Fixed-to-Variable;
3-month CME term SOFR + 2.49%		 July 1, 2032 June 30, 2027 95,381  95,032 
Total $ 198,989  $ 198,572 
The above carrying amounts of the subordinated debentures included $0.2 million of accretion adjustments and $0.4 million of capitalized debt issuance costs as of March 31, 2026. This compares to $0.2 million of accretion adjustments and $0.4 million of capitalized debt issuance costs as of December 31, 2025.
Other Borrowed Funds
In addition to advances from the FHLB and subordinated debentures and notes, the Company utilizes other funding sources as part of the overall liquidity strategy. Those funding sources include repurchase agreements, and committed and uncommitted lines of credit with several financial institutions.
As of March 31, 2026, the Bank also has access to funding through certain uncommitted lines via AFX as well as other large financial institution specific lines. As of March 31, 2026 and December 31, 2025, the Company did not have borrowings on outstanding uncommitted lines of credit.
As of March 31, 2026, the Company had $50.5 million in interest-bearing cash received on collateral from dealer counterparties. This compares to $33.1 million outstanding as of December 31, 2025. This cash collateralizes the fair value of the dealer side of derivative transactions.
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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 uses interest rate futures that are designated and qualify as cash flow hedging instruments.
The following table summarizes certain information concerning the Company's loan level derivatives, interest rate derivatives, risk participation agreements, and foreign exchange contracts at March 31, 2026 and December 31, 2025:
At March 31, 2026 At December 31, 2025
(Dollars in Thousands)
Interest rate derivatives (Notional amounts): $ 149,679  $ 192,468 
Loan level derivatives (Notional principal amounts):
Receive fixed, pay variable $ 3,500,284  $ 3,505,840 
Pay fixed, receive variable 3,504,381  3,505,840 
Risk participation-out agreements 681,207  670,834 
Risk participation-in agreements 147,069  153,185 
Foreign exchange contracts (Notional amounts):
Buys foreign currency, sells U.S. currency $ 2,965  $ 2,785 
Sells foreign currency, buys U.S. currency 2,978  2,800 
Fixed weighted average interest rate from the Company to counterparty 4.02  % 4.03  %
Floating weighted average interest rate from counterparty to the Company 4.63  % 4.75  %
Weighted average remaining term to maturity (in months) 55  56 
Fair value:  
Recognized as an asset:
Interest rate derivatives $ 77  $ 185 
Loan level derivatives 98,732  102,237 
Risk participation-out agreements 575  532 
Foreign exchange contracts 360  274 
Recognized as a liability:
Interest rate derivatives $ 123  $ 179 
Loan level derivatives 113,495  115,937 
Risk participation-in agreements 141  139 
Foreign exchange contracts —  258 
Stockholders' Equity and Dividends
The Company's total stockholders' equity was $2.5 billion as of March 31, 2026 representing an $8.7 million increase compared to $2.5 billion at December 31, 2025. The increase for the three months ended March 31, 2026 was primarily driven by net income of $46.2 million, offset by dividends paid by the Company of $27.0 million, and unrealized loss on securities available for sale of $11.3 million.
Stockholders' equity represented 11.27% of total assets as of March 31, 2026 and 10.75% of total assets as of December 31, 2025. Tangible stockholders' equity (total stockholders' equity less goodwill and identified intangible assets, net) represented 9.07% of tangible assets (total assets less goodwill and identified intangible assets, net) as of March 31, 2026 and 8.62% as of December 31, 2025.
The dividend payout ratio was 58.49% for the three months ended March 31, 2026, compared to 62.98% for the same period in 2025.


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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, 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 on, are based on numerous assumptions and other subjective judgments. See the discussion in “Item 3. 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.
Net Interest Income
Net interest income increased $104.9 million to $190.8 million for the three months ended March 31, 2026 from $85.8 million for the three months ended March 31, 2025. This increase reflects a $123.6 million increase in interest income on loans and leases, along with a $15.0 million increase in interest income in investment securities, partially offset by a $33.7 million increase in interest expense on deposits and borrowings. The increases year over year are primarily a result of the Transaction. Refer to “Results of Operations - Comparison of the Three-Month Period Ended March 31, 2026 and March 31, 2025 — Interest Income” and “Results of Operations - Comparison of the Three-Month Period Ended March 31, 2026 and March 31, 2025 — Interest Expense -Deposit and Borrowed Funds” below for more details.
Net interest margin increased 56 basis points to 3.78% for the three months ended March 31, 2026 from 3.22% for the three months ended March 31, 2025. The Company's weighted average interest rate on loans increased to 5.96% for the three months ended March 31, 2026 from 5.92% for the three months ended March 31, 2025.
The yield on interest-earning assets increased to 5.70% for the three months ended March 31, 2026 from 5.67% for the three months ended March 31, 2025. During the three months ended March 31, 2026, the Company recorded $0.6 million in prepayment penalties and late charges, which contributed 1 basis point to yields on interest-earning assets, compared to $0.6 million, or 2 basis points, for the three months ended March 31, 2025.
The cost of interest-bearing liabilities decreased 61 basis points to 2.68% for the three months ended March 31, 2026 from 3.29% for the three months ended March 31, 2025. Refer to "Financial Condition - Borrowed Funds" above for more details.
Management aims to position the balance sheet to be neutral to changes in interest rates. With the market's expectation for no additional FRB rate cuts in 2026 and with the Treasury yield curve becoming steeper since the prior quarter end, management anticipates that the net interest margin will be stable in the near term.
    If the FRB cuts rates in the coming quarters, the net interest income and the net interest margin will be highly dependent on the Company's ability and timing to reduce deposit pricing as well as the overall mix of funding.
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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 three months ended March 31, 2026 and March 31, 2025. 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.
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Three Months Ended
March 31, 2026 March 31, 2025
Average
Balance		 Interest (1) Average
Yield/
Cost		 Average
Balance		 Interest (1) Average
Yield/
Cost
(Dollars in Thousands)
Assets:
Interest-earning assets:
Debt securities $ 1,684,382  $ 17,153  4.07  % $ 888,913  $ 6,814  3.07  %
Restricted equity securities 84,281  845  4.01  % 69,784  1,204  6.90  %
Short-term investments 879,562  8,096  3.68  % 202,953  2,451  4.83  %
Total investments 2,648,225  26,094  3.94  % 1,161,650  10,469  3.60  %
Commercial real estate loans (2)
 9,974,029  143,162  5.74  % 5,651,390  77,243  5.47  %
Commercial loans (2)
 2,877,031  44,646  6.21  % 1,237,078  19,698  6.37  %
Equipment financing (2)
 1,117,336  23,545  8.43  % 1,281,425  25,965  8.11  %
Consumer loans (2)
 4,006,808  56,561  5.66  % 1,548,973  20,861  5.41  %
Total loans and leases 17,975,204  267,914  5.96  % 9,718,866  143,767  5.92  %
Total interest-earning assets 20,623,429  294,008  5.70  % 10,880,516  154,236  5.67  %
Allowance for loan and lease losses (254,743) (124,538)
Non-interest-earning assets 1,767,171  787,352 
Total assets $ 22,135,857  $ 11,543,330 
Liabilities and Stockholders' Equity:
Interest-bearing liabilities:
Interest-bearing deposits:
NOW accounts $ 1,494,773  3,526  0.96  % $ 628,346  1,005  0.65  %
Savings accounts 3,032,997  13,612  1.82  % 1,743,688  10,173  2.37  %
Money market accounts 5,709,490  35,969  2.55  % 2,187,581  13,587  2.52  %
Certificate of deposit accounts 4,136,313  36,870  3.62  % 1,886,386  19,593  4.21  %
Brokered deposit accounts 307,179  3,079  4.06  % 767,275  9,120  4.82  %
Total interest-bearing deposits (3)
 14,680,752  93,056  2.57  % 7,213,276  53,478  3.01  %
Advances from the FHLB 476,434  4,678  3.93  % 1,007,508  11,847  4.70  %
Subordinated debentures and notes 198,755  3,588  7.22  % 84,345  1,701  8.07  %
Other borrowed funds 26,974  288  4.33  % 71,462  872  4.95  %
Total borrowed funds 702,163  8,554  4.87  % 1,163,315  14,420  4.96  %
Total interest-bearing liabilities 15,382,915  101,610  2.68  % 8,376,591  67,898  3.29  %
Non-interest-bearing liabilities:            
Non-interest-bearing demand checking accounts (3)
 3,866,588      1,680,527     
Other non-interest-bearing liabilities 362,368      251,011     
Total liabilities 19,611,871      10,308,129     
 Total stockholders' equity 2,523,986      1,235,201     
Total liabilities and stockholders' equity $ 22,135,857      $ 11,543,330     
Net interest income (tax-equivalent basis) / Interest-rate spread (4)
   192,398  3.02  %   86,338  2.38  %
Less adjustment of tax-exempt income   1,624    508 
Net interest income   $ 190,774    $ 85,830 
Net interest margin (5)
     3.78  %     3.22  %
_________________________________________________________________________
(1) Tax-exempt income on debt securities, equity securities and industrial revenue bonds are included in commercial loans on a tax-equivalent basis.
(2) Loans on nonaccrual status are included in the average balances.
(3) Including non-interest-bearing checking accounts, the average interest rate on total deposits was 2.03% and 2.44% in the three months ended March 31, 2026 and March 31, 2025, respectively.
(4) Interest-rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax equivalent basis) divided by average interest-earning assets.
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Rate/Volume Analysis
The following table presents, on a tax-equivalent basis, the extent to which changes in interest rates and changes in volume of interest-earning assets and interest-bearing liabilities have affected the Company's interest income and interest expense during the periods indicated. Information is provided in each category with respect to: (i) changes attributable to changes in volume (changes in volume multiplied by prior rate), (ii) changes attributable to changes in rate (changes in rate multiplied by prior volume), and (iii) the net change. The changes attributable to the combined impact of volume and rate have been allocated proportionately to the changes due to volume and the changes due to rate.
Three Months Ended March 31, 2026 as Compared to the Three Months Ended March 31, 2025
Increase
(Decrease) Due To
Volume Rate Net Change
(In Thousands)
Interest and dividend income:
Investments:
Debt securities $ 7,580  $ 2,759  $ 10,339 
Marketable and restricted equity securities 211  (570) (359)
Short-term investments 6,343  (698) 5,645 
Total investments 14,134  1,491  15,625 
Loans and leases:
Commercial real estate loans 61,923  3,996  65,919 
Commercial loans and leases 25,442  (494) 24,948 
Equipment financing (3,396) 976  (2,420)
Consumer loans 34,330  1,370  35,700 
Total loans 118,299  5,848  124,147 
Total change in interest and dividend income 132,433  7,339  139,772 
Interest expense:
Deposits:
NOW accounts 1,873  648  2,521 
Savings accounts 6,217  (2,778) 3,439 
Money market accounts 22,218  164  22,382 
Certificate of deposit accounts 20,372  (3,095) 17,277 
Brokered deposit accounts (4,783) (1,258) (6,041)
Total deposits 45,897  (6,319) 39,578 
Borrowed funds:
Advances from the FHLB (5,469) (1,700) (7,169)
Subordinated debentures and notes 2,079  (192) 1,887 
Other borrowed funds (486) (98) (584)
Total borrowed funds (3,876) (1,990) (5,866)
Total change in interest expense 42,021  (8,309) 33,712 
Change in tax-exempt income 1,116  —  1,116 
Change in net interest income $ 89,296  $ 15,648  $ 104,944 

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Interest Income

Loans and Leases
Three Months Ended March 31, Dollar
Change		 Percent
Change
2026 2025
(Dollars in Thousands)
Interest income—loans and leases:
Commercial real estate loans $ 142,516  $ 77,139  $ 65,377  84.8  %
Commercial loans 44,313  19,344  24,969  129.1  %
Equipment financing 23,545  25,965  (2,420) (9.3) %
Residential mortgage loans 44,283  13,422  30,861  229.9  %
Other consumer loans 12,277  7,439  4,838  65.0  %
Total interest income—loans and leases (1)
 $ 266,934  $ 143,309  $ 123,625  86.3  %
_________________________________________________________________________
(1) Change in tax-exempt income of $522 thousand is excluded from the three months ended tables above.
Total interest income from loans and leases was $266.9 million for the three months ended March 31, 2026, and represented a yield on total loans of 5.96%. This compares to $143.3 million of interest on loans and a yield of 5.92% for the three months ended March 31, 2025. The $123.6 million increase in interest income from loans and leases was primarily due to an increase of $118.3 million in the portfolio composition in origination volume and due to the Transaction and a $5.8 million increases in changes to interest rates, partially offset by a decrease of $0.5 million in the change of tax-exempt income.
Investments
Three Months Ended March 31, Dollar
Change		 Percent
Change
2026 2025
(Dollars in Thousands)
Interest income—investments:
Debt securities $ 16,510  $ 6,765  $ 9,745  144.1  %
Restricted equity securities 843  1,203  (360) (29.9) %
Short-term investments 8,096  2,451  5,645  230.3  %
Total interest income—investments (1)
 $ 25,449  $ 10,419  $ 15,030  144.3  %
_________________________________________________________________________
(1) Change in tax-exempt income of $595 thousand is excluded from the three months ended table above.
Total interest income from investments was $25.4 million for the three months ended March 31, 2026, compared to $10.4 million for the three months ended March 31, 2025. For the three months ended March 31, 2026 and 2025, the yield on total investments was 3.9% and 3.6%, respectively. The year over year increase in interest income on investments of $15.0 million, or 144.3%, was primarily driven by a $13.5 million increase due to volume and a $1.5 million increase due to rates.

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Interest Expense—Deposits and Borrowed Funds
Three Months Ended March 31, Dollar
Change		 Percent
Change
2026 2025
(Dollars in Thousands)
Interest expense:
Deposits:
NOW accounts $ 3,526  $ 1,005  $ 2,521  250.8  %
Savings accounts 13,612  10,173  3,439  33.8  %
Money market accounts 35,969  13,587  22,382  164.7  %
Certificate of deposit accounts 36,870  19,593  17,277  88.2  %
Brokered deposit accounts 3,079  9,120  (6,041) (66.2) %
Total interest expense - deposits 93,056  53,478  39,578  74.0  %
Borrowed funds:
Advances from the FHLB 4,678  11,847  (7,169) (60.5) %
Subordinated debentures and notes 3,588  1,701  1,887  110.9  %
Other borrowed funds 288  872  (584) (67.0) %
Total interest expense - borrowed funds 8,554  14,420  (5,866) (40.7) %
Total interest expense $ 101,610  $ 67,898  $ 33,712  49.7  %
Deposits
For the three months ended March 31, 2026, interest expense on deposits increased $39.6 million, or 74.0%, compared to the same period in 2025. The increase in interest expense on deposits was driven by an increase of $45.9 million primarily driven by the growth in volume of average customer deposits partially offset by a decline in average brokered deposits balance, offset by a decrease of $6.3 million due to lower interest rates. For the three months ended March 31, 2026, the purchase accounting amortization on acquired deposits was $887.0 thousand, compared to $112.0 thousand for the same period in 2025.
Borrowed Funds
For the three months ended March 31, 2026, interest expense on borrowed funds decreased $5.9 million, or 40.7% year over year. The decrease in interest expense on borrowed funds was primarily driven by a decrease of $3.9 million due to volume and a decrease of $2.0 million due to borrowing rates which decreased to 4.87% for the three months ended March 31, 2026 from 4.96% for the three months ended March 31, 2025. For the three months ended March 31, 2026, the purchase accounting amortization on acquired borrowed funds was $92.0 thousand, compared to $9.0 thousand for the same period in 2025.
Provision for Credit Losses
The provisions for credit losses are set forth below:
Three Months Ended March 31, Dollar
Change		 Percent
Change
2026 2025
(Dollars in Thousands)
Provision (credit) for loan and lease losses:
Commercial real estate $ 15,040  $ (172) $ 15,212  (8,844) %
Commercial 4,418  6,834  (2,416) (35) %
Consumer (14,369) (3) (14,366) 478,867  %
Total provision (credit) for loan and lease losses 5,089  6,659  (1,570) (24) %
Provision (credit) for unfunded commitments 2,810  (685) 3,495  (510) %
Investment securities available-for-sale 47  12  35  292  %
Total provision (credit) for credit losses $ 7,946  $ 5,986  $ 1,960  33  %
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For the three months ended March 31, 2026, the provision for credit losses increased $2.0 million to $7.9 million, compared to a provision for credit losses of $6.0 million for the three months ended March 31, 2025. The increase in the provision for credit losses for the three months ended March 31, 2026 is primarily driven by the Transaction.
See management’s discussion of “Financial Condition — Allowance for Loan and Lease Losses” and Note 5, “Allowance for Loan and Lease Losses,” to the unaudited consolidated financial statements for a description of how management determined the allowance for loan and lease losses for each portfolio and class of loans.
Non-Interest Income
The following table sets forth the components of non-interest income:
Three Months Ended March 31, Dollar
Change		 Percent
Change
2026 2025
(Dollars in Thousands)
Deposit fees $ 8,347  $ 2,361  $ 5,986  253.5  %
Loan fees 2,366  393  1,973  502.0  %
Loan level derivative income, net 775  70  705  1,007.1  %
Gain on sales of loans and leases held-for-sale 2,689  24  2,665  11,104.2  %
Wealth management fees 4,464  1,491  2,973  199.4  %
Other 5,306  1,321  3,985  301.7  %
Total non-interest income $ 23,947  $ 5,660  $ 18,287  323.1  %
Deposit fees increased $6.0 million, or 253.5%, to $8.3 million for the three months ended March 31, 2026, compared to $2.4 million for the same period in 2025, primarily driven by activity due to the Transaction.
Loan fees increased $2.0 million, or 502.0%, to $2.4 million for the three months ended March 31, 2026, compared to $0.4 million for the same period in 2025, primarily driven by activity due to the Transaction.
Loan level derivative income increased to $0.8 million for the three months ended March 31, 2026, compared to $0.1 million for the same period in 2025, as there were no loan level derivative transactions completed for the three months ended March 31, 2025.
Gains on sales of loans and leases held-for-sale, wealth management fees, and other income for the three months ended March 31, 2026 increased compared to the same period in 2025, primarily as a result of the Transaction.
Non-Interest Expense
The following table sets forth the components of non-interest expense:
Three Months Ended March 31, Dollar
Change		 Percent
Change
2026 2025
(Dollars in Thousands)
Compensation and employee benefits $ 69,650  $ 35,853  $ 33,797  94.3  %
Occupancy 13,097  5,721  7,376  128.9  %
Equipment and data processing 20,127  7,012  13,115  187.0  %
Professional services 2,462  1,726  736  42.6  %
FDIC insurance 4,320  2,037  2,283  112.1  %
Advertising and marketing 1,679  868  811  93.4  %
Amortization of identified intangible assets 8,328  1,430  6,898  482.4  %
Merger and restructuring expense 13,025  971  12,054  1,241.4  %
Other 8,134  4,404  3,730  84.7  %
Total non-interest expense $ 140,822  $ 60,022  $ 80,800  134.6  %
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Merger and restructuring expense increased to $13.0 million for the three months ended March 31, 2026, compared to $1.0 million for the same period in 2025. Excluding merger and restructuring expense, non-interest expense (non-GAAP) increased $68.7 million to $127.8 million for the three months ended March 31, 2026, compared to $59.1 million for the same period in 2025.
Compensation and employee benefits expense increased $33.8 million, or 94.3%, to $69.7 for the three months ended March 31, 2026, compared to $35.9 million for the same period in 2025, primarily driven by activity due to the Transaction.
Equipment and data processing expense increased $13.1 million, or 187.0%, to $20.1 million for the three months ended March 31, 2026, compared to $7.0 million for the same period in 2025, primarily driven by activity due to the Transaction.
Provision for Income Taxes
Three Months Ended March 31, Dollar
Change		 Percent
Change
2026 2025
(Dollars in Thousands)
Income before provision for income taxes $ 65,953 $ 25,482 $ 40,471  158.8  %
Provision for income taxes 19,736 6,382 13,354  209.2  %
Net income $ 46,217 $ 19,100 $ 27,117  142.0  %
Effective tax rate 29.9  % 25.0  % N/A 19.6  %
The Company recorded an income tax expense of $19.7 million for the three months ended March 31, 2026, compared to an income tax expense of $6.4 million for the three months ended March 31, 2025, representing effective tax rates of 29.9% and 25.0%, respectively. The increase in effective tax rate for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by Transaction related items, including the discrete tax impact of nondeductible expenses.
Liquidity and Capital Resources
Liquidity
Liquidity is defined as the ability to meet current and future financial obligations of a short-term nature. The Company further defines liquidity as the ability to respond to the needs of depositors and borrowers, as well as to earnings enhancement opportunities, in a changing marketplace. Liquidity management is monitored by the Company's ALCO, consisting of members of management, which is responsible for establishing and monitoring liquidity targets as well as strategies and tactics to meet these targets. The primary source of funds for the payment of dividends and expenses by the Company is dividends paid to it by the Bank. The primary sources of liquidity for the Bank consists of deposit inflows, loan repayments, borrowed funds, and maturing investment securities.
In the first quarter, the Company operated with decreased liquidity. Due to the Transaction, the Company shifted its balance sheet asset mix to include additional cash and available for sale securities. Management will continue to monitor the economic markets and evaluate changes to the Company’s liquidity position.
The Company held lower levels of on balance sheet liquidity in the form of cash and available for sale securities in the first quarter. Cash and equivalents at the end of the quarter were $1.1 billion, or 5.0% of the balance sheet, compared to $2.0 billion, or 8.8% of the balance sheet, as of December 31, 2025. In general, in a normal operating environment, the Company seeks to maintain liquidity levels of cash, cash equivalents and investment securities available-for-sale of between 10% and 14% of total assets. As of March 31, 2026, cash, cash equivalents and investment securities available-for-sale totaled $2.8 billion, or 12.7% of total assets. This compares to $3.7 billion, or 16.1% of total assets, as of December 31, 2025.
Deposits, which are considered the most stable source of liquidity, totaled $18.3 billion as of March 31, 2026 and represented 94.4% of total funding (the sum of total deposits and total borrowings), compared to deposits of $19.5 billion, or 96.1% of total funding, as of December 31, 2025. Core deposits totaled $12.9 billion as of March 31, 2026 and represented 70.3% of total deposits, compared to Core deposits of $13.1 billion, or 67.0% of total deposits, as of December 31, 2025. Additionally, the Company had $128.8 million of brokered deposits as of March 31, 2026, which represented 0.7% of total deposits, compared to $410.4 million or 2.1% of total deposits, as of December 31, 2025. The Company offers attractive interest rates based on market conditions to increase deposits balances, while managing the cost of funds.
Borrowings are used to diversify the Company's funding mix and to support asset growth. When profitable lending and investment opportunities exist, access to borrowings provides a means to grow the balance sheet. Borrowings totaled $1.1 billion as of March 31, 2026, representing 5.5% of total funding, compared to $0.8 billion, or 3.9% of total funding, as of December 31, 2025.
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The growth in the balance sheet is driven by the Transaction, management will continue to monitor economic conditions and make adjustments to the balance sheet mix as appropriate.
As members of the FHLB, the Bank has access to both short- and long-term borrowings. As of March 31, 2026, the Company's total borrowing limit from the FHLB for advances and repurchase agreements was $4.6 billion, compared to $4.6 billion as of December 31, 2025.
As of March 31, 2026, the Bank also has access to funding through certain uncommitted lines via AFX as well as other large financial institution specific lines. As of March 31, 2026 and December 31, 2025, the Company had no borrowings on outstanding uncommitted lines of credit.
The Company has access to the Federal Reserve Discount Window to supplement its liquidity. The Company had $607.2 million of borrowing capacity at the FRB as of March 31, 2026. As of March 31, 2026, the Company did not have any outstanding borrowings with the FRB.
Additionally, the Bank has access to liquidity through repurchase agreements and additional untapped brokered deposits.
While management believes the Company has adequate liquidity to meet its commitments and to fund the Bank's lending and investment activities, the availabilities of these funding sources are subject to broad economic conditions and could be restricted in the future. Such restrictions would impact the Company's immediate liquidity and/or additional liquidity needs.
Off-Balance-Sheet Financial Instruments

The Company is party to off-balance-sheet financial instruments in the normal course of business to meet the financing needs of its customers and to reduce its own exposure to fluctuations in interest rates. These financial instruments include loan commitments, standby and commercial letters of credit and interest-rate swaps. According to GAAP, these financial instruments are not recorded in the financial statements until they are funded or related fees are incurred or received. See Note 12, "Commitments and Contingencies", to the consolidated financial statements for a description of off-balance-sheet financial instruments.

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Capital Resources
As of March 31, 2026, the Company and the Bank are under the primary regulation of, and must comply with, the capital requirements of the FRB. Under these rules, the Company and the Bank are required to maintain a minimum common equity Tier 1 capital ratio of 4.5%, a minimum Tier 1 capital leverage ratio of 6.0%, a minimum total risk based capital ratio of 8% and a minimum Tier 1 leverage ratio of 4%. Additionally, the Company and the Bank are required to establish a capital conservation buffer of common equity Tier 1 capital in an amount above the minimum risk-based capital requirements for “adequately capitalized” institutions equal to 2.5% of total risk weighted assets, or face restrictions on the ability to pay dividends, pay discretionary bonuses, and to engage in share repurchases. As of March 31, 2026, the Company and the Bank exceeded all regulatory capital requirements, and the Bank was considered “well-capitalized” under prompt corrective action regulations.

The following table presents actual and required capital amounts and capital ratios as of March 31, 2026 for the Company and the Bank.
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 March 31, 2026:
Beacon Financial Corporation
Common equity Tier 1 capital ratio (1)
 $ 2,048,559  11.24  % $ 820,153  4.50  % $ 1,275,793  7.00  % N/A N/A
Tier 1 leverage capital ratio (2)
 2,079,001  9.59  % 867,154  4.00  % 867,154  4.00  % N/A N/A
Tier 1 risk-based capital ratio (3)
 2,079,001  11.40  % 1,094,211  6.00  % 1,550,132  8.50  % N/A N/A
Total risk-based capital ratio (4)
 2,420,211  13.27  % 1,459,057  8.00  % 1,915,012  10.50  % N/A N/A
Beacon Bank & Trust            
Common equity Tier 1 capital ratio (1)
 $ 2,090,009  11.47  % $ 819,969  4.50  % $ 1,275,507  7.00  % $ 1,184,399  6.50  %
Tier 1 leverage capital ratio (2)
 2,090,009  9.64  % 867,224  4.00  % 867,224  4.00  % 1,084,030  5.00  %
Tier 1 risk-based capital ratio (3)
 2,090,009  11.47  % 1,093,292  6.00  % 1,548,830  8.50  % 1,457,722  8.00  %
Total risk-based capital ratio (4)
 2,292,321  12.58  % 1,457,756  8.00  % 1,913,304  10.50  % 1,822,195  10.00  %
_______________________________________________________________________________
(1) Common equity Tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets.
(2) Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by average assets.
(3) Tier 1 risk-based capital ratio is calculated by dividing Tier 1 capital by risk-weighted assets.
(4) Total risk-based capital ratio is calculated by dividing total capital by risk-weighted assets.



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The following table presents actual and required capital amounts and capital ratios as of December 31, 2025 for the Company and the Bank.
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, 2025:            
Beacon Financial Corporation            
Common equity Tier 1 capital ratio (1)
 $ 2,021,589  10.95  % $ 830,790  4.50  % $ 1,292,340  7.00  % N/A N/A
Tier 1 leverage capital ratio (2)
 2,051,965  9.25  % 887,336  4.00  % 887,336  4.00  % N/A N/A
Tier 1 risk-based capital ratio (3)
 2,051,965  11.12  % 1,107,175  6.00  % 1,568,498  8.50  % N/A N/A
Total risk-based capital ratio (4)
 2,400,786  13.01  % 1,476,271  8.00  % 1,937,606  10.50  % N/A N/A
Beacon Bank & Trust            
Common equity Tier 1 capital ratio (1)
 $ 2,069,767  11.22  % $ 830,120  4.50  % $ 1,291,298  7.00  % $ 1,199,063  6.50  %
Tier 1 leverage capital ratio (2)
 2,069,767  9.39  % 881,690  4.00  % 881,690  4.00  % 1,102,112  5.00  %
Tier 1 risk-based capital ratio (3)
 2,069,767  11.22  % 1,106,827  6.00  % 1,568,005  8.50  % 1,475,770  8.00  %
Total risk-based capital ratio (4)
 2,280,038  12.36  % 1,475,753  8.00  % 1,936,925  10.50  % 1,844,691  10.00  %
_______________________________________________________________________________
(1) Common equity Tier 1 capital ratio is calculated by dividing common equity Tier 1 capital by risk-weighted assets.
(2) Tier 1 leverage capital ratio is calculated by dividing Tier 1 capital by average assets.
(3) Tier 1 risk-based capital ratio is calculated by dividing Tier 1 capital by risk-weighted assets.
(4) Total risk-based capital ratio is calculated by dividing total capital by risk-weighted assets.

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Item 3. Quantitative and Qualitative Disclosures about Market Risk
Market Risk
Market risk is the risk that the market value or estimated fair value of the Company's assets, liabilities, and derivative financial instruments will decline as a result of changes in interest rates or financial market volatility, or that the Company's net income will be significantly reduced by interest-rate changes.
Interest-Rate Risk
The principal market risk facing the Company is interest-rate risk, which can occur in a variety of forms, including repricing risk, yield-curve risk, basis risk, and prepayment risk. Repricing risk occurs when the change in the average yield of either interest-earning assets or interest-bearing liabilities is more sensitive than the other to changes in market interest rates. Such a change in sensitivity could reflect a number of possible mismatches in the repricing opportunities of the Company's assets and liabilities. Yield-curve risk reflects the possibility that changes in the shape of the yield curve could have different effects on the Company's assets and liabilities. Basis risk occurs when different parts of the balance sheet are subject to varying base rates reflecting the possibility that the spread from those base rates will deviate. Prepayment risk is associated with financial instruments with an option to prepay before the stated maturity, often a disadvantage to person selling the option; this risk is most often associated with the prepayment of loans, callable investments, and callable borrowings.
Asset/Liability Management
Market risk and interest-rate risk management is governed by the Company's ALCO. The ALCO establishes exposure limits that define the Company's tolerance for interest-rate risk. The ALCO and the Company's Treasury Group measure and manage the composition of the balance sheet over a range of possible changes in interest rates while remaining responsive to market demand for loan and deposit products. The ALCO monitors current exposures versus limits and reports those results to the Board of Directors. The policy limits and guidelines serve as benchmarks for measuring interest-rate risk and for providing a framework for evaluation and interest-rate risk-management decision-making. The Company measures its interest-rate risk by using an asset/liability simulation model. The model considers several factors to determine the Company's potential exposure to interest-rate risk, including measurement of repricing gaps, duration, convexity, value-at-risk, market value of portfolio equity under assumed changes in the level of interest rates, the shape of yield curves, and general market volatility.
Management controls the Company's interest-rate exposure using several strategies, which include adjusting the maturities of securities in the Company's investment portfolio, limiting or expanding the terms of loans originated, limiting fixed-rate customer deposits with terms of more than five years, and adjusting maturities of wholesale funding. The Company limits this risk by restricting the types of MBSs it invests into those with limited average life changes under certain interest-rate-shock scenarios, or securities with embedded prepayment penalties. The Company also places limits on holdings of fixed-rate mortgage loans with maturities greater than five years. The Company enters into interest rate swaps as part of its interest rate risk management strategy. These interest rate swaps are designated as cash flow hedges and involve the receipt of variable rate amounts from a counterparty in exchange for the Company making fixed payments.
Measuring Interest-Rate Risk
As noted above, interest-rate risk can be measured by analyzing the extent to which the repricing of assets and liabilities are mismatched to create an interest-rate sensitivity gap. An asset or liability is said to be interest-rate sensitive within a specific period if it will mature or reprice within that period. The interest-rate sensitivity gap is defined as the difference between the amount of interest-earning assets maturing or repricing within a specific time period and the amount of interest-bearing liabilities maturing or repricing within that same time period. A gap is considered positive when the amount of interest-rate-sensitive assets exceeds the amount of interest-rate-sensitive liabilities. A gap is considered negative when the amount of interest-rate-sensitive liabilities exceeds the amount of interest-rate-sensitive assets. During a period of falling interest rates, a positive gap would tend to adversely affect net interest income. Conversely, during a period of rising interest rates, a positive gap position would tend to result in an increase in net interest income.
The Company's interest-rate risk position is measured using both income simulation and interest-rate sensitivity "gap" analysis. Income simulation is the primary tool for measuring the interest-rate risk inherent in the Company's balance sheet at a given point in time by showing the effect on net interest income, over a twelve-month period, of a variety of interest-rate shocks. These simulations take into account repricing, maturity, and prepayment characteristics of individual products. The ALCO reviews simulation results to determine whether exposure resulting from changes in market interest rates remains within established tolerance levels over a one-year and two-year horizon, and develops appropriate strategies to manage this exposure. The Company's interest-rate risk analysis remains modestly asset-sensitive as of March 31, 2026.
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The assumptions used in the Company’s interest-rate sensitivity simulation discussed above are inherently uncertain and, as a result, the simulations cannot precisely measure net interest income or precisely predict the impact of changes in interest rates.
As of March 31, 2026, net interest income simulation indicated that the Company's exposure to changing interest rates was within tolerance. The ALCO reviews the methodology utilized for calculating interest-rate risk exposure and may periodically adopt modifications to this methodology. The following table presents the estimated impact of interest-rate changes on the Company's estimated net interest income over the twelve-month periods indicated while maintaining a flat balance sheet:
Estimated Exposure to Net Interest Income
over Twelve-Month Horizon Beginning
March 31, 2026 December 31, 2025
Change in Interest Rate Levels Dollar
Change		 Percent
Change		 Dollar
Change		 Percent
Change
  (Dollars in Thousands)
Up 400 basis points shock $ 96,288  12.1  % $ 78,074  9.4  %
Up 200 basis points ramp 27,370  3.4  % 29,174  3.5  %
Up 100 basis points ramp 13,758  1.7  % 14,849  1.8  %
Down 100 basis points ramp (14,169) (1.8) % (14,389) (1.7) %
Down 200 basis points ramp (28,384) (3.6) % (30,008) (3.6) %
Down 400 basis points shock (50,456) (6.3) % (58,232) (7.0) %
Asset sensitivity increased at March 31, 2026 when compared to December 31, 2025 as a result of funding and asset mix changes. The estimated impact of a 400 basis point instantaneous increase in market interest rates on the Company's estimated net interest income over a twelve-month horizon was 12.1% as of March 31, 2026, compared to 9.4% as of December 31, 2025. The estimated impact of a 400 basis point instantaneous decrease in market interest rates on the Company's estimated net interest income over a twelve-month horizon was (6.3)% as of March 31, 2026, compared to (7.0)% as of December 31, 2025.
The Company also utilizes interest-rate sensitivity "gap" analysis to provide a broader overview of its interest-rate risk profile. The interest-rate sensitivity gap is defined as the difference between interest-earning assets and interest-bearing liabilities maturing or repricing within a given time period. As of March 31, 2026, the Company’s one-year cumulative gap was a positive $981.0 million, or 4.77% of total interest-earning assets, compared to a positive $0.5 billion, or 2.14% of total interest-earning assets, as of December 31, 2025.
The assumptions used in the Company's interest-rate sensitivity simulation discussed above are inherently uncertain and, as a result, the simulations cannot precisely measure net interest income or precisely predict the impact of changes in interest rates. For additional discussion on interest-rate risk see Item 7A, “Quantitative and Qualitative Disclosures about Market Risk” of the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2025.
The EVE at Risk Simulation is conducted in tandem with net interest income simulations to ascertain a longer term view of the Company’s interest-rate risk position by capturing longer-term repricing risk and options risk embedded in the balance sheet. It measures the sensitivity of the economic value of equity to changes in interest rates. The EVE at Risk Simulation values only the current balance sheet and does not incorporate growth assumptions. As with the net interest income simulation, this simulation captures product characteristics such as loan resets, repricing terms, maturity dates, and rate caps and floors. Key assumptions include loan prepayment speeds, deposit pricing elasticity, and non-maturity deposit attrition rates. These assumptions can have significant impacts on valuation results as the assumptions remain in effect for the entire life of each asset and liability. The Company conducts non-maturity deposit behavior studies on a periodic basis to support deposit assumptions used in the valuation process. All key assumptions are subject to a periodic review.
EVE at Risk is calculated by estimating the net present value of all future cash flows from existing assets and liabilities using current interest rates as well as parallel shocks to the current interest-rate environment. The following table sets forth the estimated percentage change in the Company’s EVE at Risk, assuming various shifts in interest rates.
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Estimated Percent Change in Economic Value of Equity
Parallel Shock in Interest Rate Levels At March 31, 2026 At December 31, 2025
Up 400 basis points (0.7) % (1.8) %
Up 200 basis points —  % (0.7) %
Up 100 basis points 0.1  % 0.1  %
Down 100 basis points (0.7) % (1.1) %
Down 200 basis points (1.6) % (3.2) %
Down 400 basis points (5.7) % (10.1) %

The Company's EVE-at-risk is modestly more asset sensitive from December 31, 2025 to March 31, 2026 driven by changes to the funding and asset mix.

Item 4. Controls and Procedures
 
Controls and Procedures
Under the supervision and with the participation of the Company’s management, including the Company’s Chief Executive Officer (Principal Executive Officer) and Chief Financial Officer (Principal Financial Officer), the Company has evaluated the effectiveness of its disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer considered that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to the Company’s management, including its Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a -15(f). The Company’s internal control system was designed to provide reasonable assurance to its management and the Board of Directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. The Company’s management assessed the effectiveness of its internal control over financial reporting as of the end of the period covered by this report. During the quarter ended March 31, 2026, the Company completed a core banking system conversion as a result of the Transaction which resulted in material changes to certain key financial reporting processes and the corresponding internal controls over financial reporting. Management has designed and implemented new controls and updated existing controls to reflect these changes.
Management’s Report on Internal Control Over Financial Reporting as of December 31, 2025 and the related Report of Independent Registered Public Accounting Firm thereon appear on pages F-1 and F-2 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.
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Table of Contents
PART II — OTHER INFORMATION
Item 1. Legal Proceedings
We operate in a legal and regulatory environment that exposes us to potentially significant risks. For more information regarding the Company’s exposure generally to legal and regulatory risks, see Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 2, 2026.
There are no threatened or pending legal proceedings other than those that arise in the normal course of business. As of March 31, 2026, we are not involved in any pending legal proceedings that, in the opinion of management, are expected to be material to the Company’s financial condition or results of operations.

Item 1A.    Risk Factors

There have been no material changes in the risk factors described in Part I, Item 1A. “Risk Factors” of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 2, 2026.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

a)        Not applicable.
 
b)        Not applicable.
 
c)        Not applicable.

Item 3. Defaults Upon Senior Securities

a)        None.
 
b)        None.

Item 4.    Mine Safety Disclosures

Not applicable.

Item 5.    Other Information

c) During the three months ended March 31, 2026, none of the Company’s directors or officers (as defined in Rule 16a-1(f) of the Securities Exchange Act of 1934) adopted, terminated or modified a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in Item 408 of Regulation S-K).

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Item 6. Exhibits
Exhibit
 Description
3.1
3.3
3.4
4.1
4.2
Exhibit 31.1*
   
Exhibit 31.2*
   
Exhibit 32.1**
   
Exhibit 32.2**
   
101.INS XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH XBRL Taxonomy Extension Schema Document
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF XBRL Taxonomy Extension Definition Linkbase Document
101.LAB XBRL Taxonomy Extension Label Linkbase Document
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover Page Interactive Data File (formatted in Inline XBRL and included in Exhibit 101)
_______________________________________________________________________________
* Filed herewith
** Furnished herewith
+ Denotes a management contract or compensatory plan or arrangement.
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SIGNATURES
 
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
  BEACON FINANCIAL CORPORATION
       
       
Date: May 11, 2026 By: /s/ Paul A. Perrault
    Paul A. Perrault  
    President and Chief Executive Officer  
    (Principal Executive Officer)  
       
Date: May 11, 2026 By: /s/ Carl M. Carlson
    Carl M. Carlson  
    Chief Financial and Strategy Officer  
    (Principal Financial Officer and Principal Accounting Officer)  



81
EX-31.1 2 bfc-ex311_20260331xq1.htm EX-31.1 Document

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

I, Paul A. Perrault, President and Chief Executive Officer, certify that:
 
1.I have reviewed this quarterly report on Form 10-Q of Beacon Financial Corporation.;
 
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 11, 2026
/s/ PAUL A. PERRAULT
Paul A. Perrault
President and Chief Executive Officer
(Principal Executive Officer)

EX-31.2 3 bfc-ex312_20260331xq1.htm EX-31.2 Document

Exhibit 31.2 

Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
 
I, Carl M. Carlson, Chief Financial and Strategy Officer, certify that:
 
1.I have reviewed this quarterly report on Form 10-Q of Beacon Financial Corporation;
 
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
 
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
 
a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
 
b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
 
c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
 
d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
 
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
 
a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
 
b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 11, 2026
/s/ CARL M. CARLSON
Carl M. Carlson
Chief Financial and Strategy Officer
(Principal Financial Officer and
Principal Accounting Officer)

EX-32.1 4 bfc-ex321_20260331xq1.htm EX-32.1 Document

Exhibit 32.1 

STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002, 18 U.S.C. SECTION 1350 

The undersigned, Paul A. Perrault, is the President and Chief Executive Officer of Beacon Financial Corporation (the “Company”).
 
This statement is being furnished in connection with the filing by the Company of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the “Report”).

By execution of this statement, I certify that:
 
1.The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
 
2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.
 
This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended.

Date: May 11, 2026
/s/ PAUL A. PERRAULT
Paul A. Perrault
President and Chief Executive Officer
(Principal Executive Officer)


EX-32.2 5 bfc-ex322_20260331xq1.htm EX-32.2 Document

Exhibit 32.2 

STATEMENT FURNISHED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT
OF 2002, 18 U.S.C. SECTION 1350
 
The undersigned, Carl M. Carlson, is the Chief Financial and Strategy Officer of Beacon Financial Corporation (the “Company”).
 
This statement is being furnished in connection with the filing by the Company of the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 (the “Report”).

By execution of this statement, I certify that:
 
1.             The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
 
2.             The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods covered by the Report.
 
This statement is authorized to be attached as an exhibit to the Report so that this statement will accompany the Report at such time as the Report is filed with the Securities and Exchange Commission pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350. It is not intended that this statement be deemed to be filed for purposes of the Securities Exchange Act of 1934, as amended.

Date: May 11, 2026
/s/ CARL M. CARLSON
Carl M. Carlson
Chief Financial and Strategy Officer
(Principal Financial Officer and
Principal Accounting Officer)