UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-K

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

For the fiscal year ended December 31, ~~2023~~2024

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

For the transition period from to

Commission file number 001-33912

Enterprise Bancorp, Inc.

(Exact name of registrant as specified in its charter)


Massachusetts						04-3308902
(State or other jurisdiction of incorporation of organization)						(IRS Employer Identification No.)

222 Merrimack Street,

Lowell,

Massachusetts

01852

(Address of principal executive offices)

(Zip code)

(978) 459-9000

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Exchange Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.01 par value per share

EBTC

NASDAQ Stock Market

Securities registered pursuant to Section 12(g) of the Exchange Act:

NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. o Yes ý No

Indicate by check mark if the registrant is not required to file pursuant to Section 13 or Section 15(d) of the Act. o Yes ý No

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. ý Yes o 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).

ý Yes o 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 definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer ☐ Accelerated filer x

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 has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If the securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recover analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recover period pursuant to §240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ☐ Yes ý No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid price and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: $~~296~~244,~~960~~831,~~546~~574 ($2824.9488 per share) as of June 30, ~~2023~~2024, the last trading day of the registrant’s most recently completed second quarter.

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date: February 2928, ~~2024~~2025, Common Stock, par value $0.01, 12,~~278~~458,~~649~~981 shares outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s definitive proxy statement for its annual meeting of shareholders to be held on May 76, ~~2024~~2025, are incorporated by reference in Part III of this Form 10-K.

Table of Contents

ENTERPRISE BANCORP, INC.

TABLE OF CONTENTS

		Page Number
	PART I
Item 1	Business	4
Item 1A	Risk Factors	2726
Item 1B	Unresolved Staff Comments	3537
Item 1C	Cybersecurity	3537
Item 2	Properties	3739
Item 3	Legal Proceedings	3739
Item 4	Mine Safety Disclosures	3739
	PART II
Item 5	Market for Registrant’s Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities	3739
Item 6	[Reserved]	3941
Item 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4041
Item 7A	Quantitative and Qualitative Disclosures About Market Risk	6263
Item 8	Financial Statements and Supplementary Data	6465
	Reports of Independent Registered Public Accounting Firm (PCAOB ID: 49)	117
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	120
Item 9A	Controls and Procedures	120
Item 9B	Other Information	120
Item 9C	Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	120
	Part III
Item 10	Directors, Executive Officers and Corporate Governance	120
Item 11	Executive Compensation	120
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters	120
Item 13	Certain Relationships and Related Transactions, and Director Independence	120
Item 14	Principal Accounting Fees and Services	120
	Part IV
Item 15	Exhibits, Financial Statement Schedules	121
Item 16	Form 10-K Summary	125
	Signatures Page	~~125~~126

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ACRONYMS AND ABBREVIATIONS

The acronyms and abbreviations defined in the table below are provided to aid the reader when reviewing this Form 10-K:

Acronym						Description
ACH:						Automatic clearing house
ACL:						Allowance for credit losses
AOCI:						Accumulated other comprehensive income
ASC:						Accounting Standards Codification
ASU:						Accounting Standards Update
BTFP:						Bank Term Funding Program
BOLI:						Bank-owned life insurance
CBLR						Community Bank Leverage Ratio
CD:						Certificate of deposit
CDE:						Community Development Entities
CECL:						Current expected credit loss
CEO:						Chief executive officer
CERCLA:						Comprehensive Environmental Response, Compensation and Liability Act
CET1:						Common equity tier 1
CFPB:						Consumer Financial Protection Bureau
CFT:						Countering the financing of terrorism
CISO:						Chief information security officer
CMO:						Collateralized mortgage obligations
CMP:						Compliance Management Program
CODM:						Chief operating decision maker
CRA:						Community Reinvestment Act of 1977
CTA:						Corporate Transparency Act of 2019
DRSPP:						Dividend reinvestment and direct stock purchase plan
DIF:						Deposit Insurance Fund
DTA:						Deferred tax asset
EWMC:						Enterprise Wealth Management Committee
EGRRCPA:						Economic Growth, Regulatory Relief, and Consumer Protection Act of 2018
ERC:						Employee Retention Credit
ERG:						Employee Resource Group
EWMC:						Enterprise Wealth Management Committee
FASB:						Financial Accounting Standards Board
FDIA:						Federal Deposit Insurance Act
FDIC:						Federal Deposit Insurance Corporation
FHLB:						Federal Home Loan Bank
FinCEN:						Financial Crimes Enforcement Network
Fintech:						Financial technology
FIRREA:						Financial Institutions Reform, Recovery and Enforcement Act
FRB:						Federal Reserve Bank of Boston
FS-ISAC						Financial Services Information Sharing and Analysis Center
GAAP:						Generally Accepted Accounting Principles
HMDA:						Home Mortgage Disclosure Act
INDB / Independent						Independent Bancorp, Inc. (Rockland Bank & Trust Co.)
IRS:						Internal Revenue Service
MBS:						Mortgage-backed securities
Net Interest Margin:						Tax-equivalent net interest margin
NH BFA:						New Hampshire Business Finance Authority
NIST:						National Institute of Standards and Technology
NMTC:						New Market Tax Credit
OREO:						Other real estate owned
PPP:						Paycheck Protection Program
RESPA:						Real Estate Settlement Procedures Act
ROU:						Right-of-use
RPA:						Risk participation agreement
SAR:						Suspicious activity reports
SBA:						Small Business Administration
SERP:						Supplemental employee retirement plan
SIEM:						Security Information and Event System
SOFR:						Secured Overnight Financing Rate
TDR:						Troubled debt restructuring
TILA:						Truth-in Lending Act
U.S.:						United States

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PART I

Item 1.Business

Organization

Enterprise Bancorp, Inc. (the "Company," "Enterprise," "us," "we," or "our") is a Massachusetts corporation organized in 1996, which operates as the parent holding company of Enterprise Bank and Trust Company, commonly referred to as Enterprise Bank (the "Bank"), a community-focused commercial bank. Substantially all of the Company’s operations are conducted through the Bank and its subsidiaries. The Bank, a Massachusetts trust company and state chartered commercial bank that commenced banking operations in 1989, has five wholly owned subsidiaries that are included in the Company’s consolidated financial statements:

•Three Massachusetts security corporations, Enterprise Security Corporation (2005), Enterprise Security Corporation II (2007) and Enterprise Security Corporation III (2007), which hold various types of qualifying securities. The security corporations are limited to conducting securities investment activities that the Bank itself would be allowed to conduct under applicable laws.

•Enterprise Wealth Services, LLC, organized in 2000 in the State of Delaware for the purpose of offering non-deposit investment products and services, under the name of "Enterprise Wealth Services."

•~~In February 2023, the Bank organized the~~ EBTC NMTC Investment Fund - CHC, LLC (the "NMTC Investment Fund") organized under the laws of the State of Delaware for the purpose of investing in a local NMTC project which provides federal tax incentives for investments in distressed communities.

Enterprise's headquarters are located at 222 Merrimack Street in Lowell, Massachusetts.

The community banking services offered through the Bank and its subsidiaries are managed as one strategic unit and represent the Company's only reportable operating segment.

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

The Company's common stock trades on the NASDAQ Global Market under the trading symbol "EBTC."

Merger

On December 8, 2024, the Company entered into an Agreement and Plan of Merger (the "Merger Agreement") with Independent Bank Corp., a Massachusetts corporation ("Independent"), and Rockland Trust Company, a Massachusetts-chartered trust company and wholly owned subsidiary of Independent ("Rockland Trust"). Pursuant to the Merger Agreement, the Company will merge with and into Independent, with Independent being the surviving corporation (the "Merger"). Upon completion of the Merger, each outstanding share of Company common stock will convert into the right to receive 0.60 shares of Independent common stock and $2.00 in cash (the "Merger Consideration"). Each outstanding option to acquire a share of Company common stock, whether or not vested, will be converted into the right to receive cash in an amount equal to the amount by which the per share cash equivalent of the Merger Consideration (calculated in accordance with the Merger Agreement) exceeds the exercise price of the option. In addition, each award of Company restricted stock, whether or not vested, that is outstanding immediately prior to the effective time of the Merger will fully vest and be canceled and converted into the right to receive the Merger Consideration. Following the Merger, Enterprise Bank will merge with Rockland Trust, with Rockland Trust being the surviving institution. Completion of the Merger is subject to customary closing conditions, including receipt of regulatory approvals and approval of the Company’s shareholders. The Merger is expected to close in the second half of 2025. The Company has scheduled a Special Shareholder Meeting for April 3, 2025 to vote on the Merger and other related proposals. No vote of Independent shareholders is required.

Market Area

The Company's primary market area is the Northern Middlesex, Northern Essex, and Northern Worcester counties of Massachusetts and the Southern Hillsborough and Southern Rockingham counties in New Hampshire. Enterprise has 27 full-service branches located in the Massachusetts communities of Acton, Andover, Billerica (2), Chelmsford (2), Dracut, Fitchburg, Lawrence, Leominster, Lexington, Lowell (2), Methuen, North Andover, Tewksbury (2), Tyngsborough and Westford and in the New Hampshire communities of Derry, Hudson, Nashua (2), Pelham, Londonderry, Salem, and Windham.

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Management actively seeks to strengthen the Company's market position by capitalizing on opportunities to grow all business lines and through the continued pursuit of organic growth and strategic expansion within existing and into neighboring geographic markets.

Products and Services

The Company principally is engaged in the business of gathering deposits from the general public and investing primarily in loans and investment securities. Through the Bank and its subsidiaries, the Company offers a range of commercial, residential and consumer loan products, deposit products and cash management services, as well as wealth management and wealth services.

The integrated branch network serves all product channels with knowledgeable service providers and state-of-the-art facilities. The Bank also offers various digital banking capabilities via online and mobile platforms. Management continually examines new products and technologies in order to maintain a highly competitive mix of offerings and state-of-the-art delivery channels in order to tailor product lines to customers' needs. These products, services and delivery channels are outlined below.

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The Company's business is not dependent on one, or a few customers, nor upon a particular industry, the loss of which would have a material adverse impact on the financial condition or operations of the Company.

Lending Products

General

The Company specializes in lending to business entities, non-profit organizations, professional practices, and individuals. The Company's primary lending focus is on the development of high-quality, long-term commercial relationships achieved through active business development efforts, strong community involvement, and focused marketing strategies. Commercial loans may include commercial real estate mortgage loans, construction and land development loans, secured and unsecured commercial loans and lines of credit, and letters of credit. Consumer or "retail" loans may include conventional residential mortgage loans, home equity lines of credit, residential construction loans on owner-occupied primary and secondary residences, and secured and unsecured personal loans and lines of credit. The Company manages its loan portfolio to avoid concentration by industry, relationship size, and source of repayment to lessen its credit risk exposure.

Interest rates charged on loans may be fixed or variable; variable rate loans may have fixed initial periods before periodic rate adjustments begin. Individual rates offered are dependent on the associated degree of credit risk, term, underwriting and servicing costs, loan amount, and the extent of other banking relationships maintained with the borrower, and may be subject to interest rate floors. Rates are also subject to competitive pressures, the current interest-rate environment, availability of funds, and government regulations.

Enterprise employs a seasoned commercial lending staff, with commercial lenders supporting each of the Bank's branch locations. An internal loan review function assesses the compliance of commercial loan originations with the Company's internal policies and underwriting guidelines and monitors the ongoing credit quality of the loan portfolio. The credit risk management function monitors a wide variety of individual borrower and industry factors; and the Company's internal loan credit risk rating system classifies loans depending on risk of loss characteristics. The Company also contracts with an external loan review company to review, on a pre-determined schedule, the internal credit ratings assigned to loans in the commercial loan portfolio. The review is focused on the non-criticized segment of the commercial loan portfolio, based on the type, size, credit rating, and overall risk of the loan and generally encompasses 65% or more of the commercial loan portfolio. This same loan review company is also contracted to perform limited stress testing on the commercial real estate loan portfolio on an annual basis.

The Company's internal residential origination and underwriting staff originate residential loans and are responsible for compliance with residential lending regulations, consumer protection and internal policy guidelines. The Company also contracts with an external loan review company to complete a regular quality control review in accordance with secondary market underwriting standards for residential mortgage loans. The sample reviewed is based on loan volume originated since the prior review. Additionally, the Company's internal compliance department monitors the residential loan origination activity for regulatory compliance.

A management loan review committee, consisting of senior lending officers, credit, loan workout, loan operations, risk ~~management and accounting personnel, is responsible for setting loan policy and procedures, as well as reviewing loans on the internal "watch asset list" and classified loan report.~~

An internal credit review committee, consisting of senior lending officers and credit review personnel, meets to review and approve loan requests related to borrowing relationships of certain dollar levels, as well as other borrower relationships recommended for discussion by committee members.

The Loan Committee of the Company's Board of Directors (the "Board") approves loan relationships exceeding certain prescribed dollar limits. The Board's Loan Committee reviews current portfolio statistics, problem credits, construction loan reviews, watch assets, loan delinquencies, and the allowance for credit losses, as well as current market conditions and issues relating to the construction and commercial real estate development industry and the reports from the external loan review company. The Board's Loan Committee is also responsible for approval of the loan policy and credit-related charge-offs recommended by management, subject to final approval by the full Board.

At December 31, 2023, the Bank's statutory lending limit, based on 20% of capital (capital stock plus surplus and undivided profits, but excluding other comprehensive income), to any individual borrower and related entities was approximately $93.5 million, subject to certain exceptions provided under applicable law.

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management and accounting personnel, is responsible for setting loan policy and procedures, as well as reviewing loans on the internal "watch asset list" and classified loan report.

At December 31, 2024, the Bank's statutory lending limit, based on 20% of capital (capital stock plus surplus and undivided profits, but excluding other comprehensive income), to any individual borrower and related entities was approximately $99.6 million, subject to certain exceptions provided under applicable law.

Commercial Real Estate, Commercial and Industrial, and Commercial Construction Loans

Commercial real estate loans include loans secured by both owner and non-owner occupied (investor) real estate. These loans are typically secured by a variety of commercial, residential investment, and industrial property types, including one-to-four and multi-family apartment buildings, office, industrial, or mixed-use facilities, strip shopping centers, or other commercial properties, and are generally guaranteed by the principals of the borrower. Commercial real estate loans generally have repayment periods of approximately 15 to 30 years. Variable interest-rate loans have a variety of adjustment terms and underlying interest-rate indices and are generally fixed for an initial period before periodic rate adjustments begin.

Commercial and industrial loans include seasonal and formula-based revolving lines of credit, working capital loans, equipment financing and term loans. Also included in commercial and industrial loans are loans partially ~~or fully~~ guaranteed by the SBA, and loans under various other government and municipal programs and agencies. Commercial and industrial credits may be unsecured loans and lines to financially strong borrowers, loans secured in whole or in part by real estate unrelated to the principal purpose of the loan or secured by inventories, equipment, or receivables, and are generally guaranteed by the principals of the borrower. Variable rate loans and lines in this portfolio have interest rates that are periodically adjusted, with loans generally having fixed initial periods. Revolving lines of credit are written on demand and those over $100 thousand are subject to annual credit review. Revolving lines of credit below this threshold are monitored based on payment history and other performance criteria. Commercial and industrial loans have average repayment periods of 1 to 7 years.

Commercial construction loans include the development of residential housing and condominium projects, the development of commercial and industrial use property, and loans for the purchase and improvement of raw land. These loans are secured in whole or in part by underlying real estate collateral and are generally guaranteed by the principals of the borrowers. In many cases, these loans move into the permanent commercial real estate portfolio when the construction phase is completed. The Company limits the amount of financing provided to any single developer for the construction of properties built on a speculative basis. Funds for construction projects are disbursed as pre-specified stages of construction are completed. Regular site inspections are performed, prior to advancing additional funds, at each construction phase, either by experienced construction lenders on staff or by independent outside inspection companies. Commercial construction loans generally are variable rate loans and lines with interest rates that are periodically adjusted and generally have terms of 1 to 3 years.

From time to time, the Company participates with other banks in the financing of certain commercial projects. Participating loans with other institutions ~~provide~~provides banks the opportunity to retain customer relationships and reduce credit risk exposure among each participating bank, while providing customers with larger credit vehicles than the individual bank might be willing or able to offer independently. When the participation qualifies as a sale under GAAP, the balances participated out to other institutions are not carried as assets on the Company's consolidated financial statements. When a participation does not qualify as a sale under GAAP, the loan is carried at gross principal outstanding and the balances participated out to other institutions are carried as secured borrowings on the Company's consolidated financial statements. Loans originated by other banks in which the Company is a participating institution are carried in the loan portfolio at the Company’s pro-rata share of ownership.

Letters of credit are conditional commitments issued by the Company to guarantee the financial obligation or performance of a customer to a third-party. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. If the letter of credit is drawn upon, a loan is created for the customer, generally a commercial loan, with the same criteria associated with similar commercial loans.

Residential Loans

Enterprise Bank originates conventional mortgage loans on one-to-four family residential properties. These properties may serve as the borrower's primary residence, or as vacation homes or investment properties. Loan-to-value policy limits vary, generally from 75% for multi-family owner-occupied properties, up to 97% for single family owner-occupied properties, with mortgage insurance coverage required for loan-to-value ratios greater than 80% based on program parameters. In addition, financing is provided for the construction of owner-occupied primary and secondary residences. Residential mortgage loans may have terms of up to 30 years at either fixed or adjustable-rates of interest. Fixed and adjustable-rate residential mortgage loans are generally originated using secondary market underwriting and documentation standards.

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~~sell~~extending ~~the~~loan ~~servicing~~facilities ~~when~~to ~~selling the loans~~customers. ~~Loans~~ ~~sold~~If ~~are subject to standard secondary market underwriting and eligibility representations and warranties over~~ the ~~life~~letter of ~~the~~credit ~~loan~~is ~~and~~drawn ~~are~~upon, ~~subject~~a toloan anis ~~early~~created ~~payment~~for ~~default period covering~~ the ~~first~~customer, ~~four~~generally ~~payments~~a ~~for~~commercial ~~certain~~ loan, ~~sales.~~with ~~Loans~~the ~~classified~~same ascriteria ~~held~~associated ~~for~~with ~~sale~~similar ~~are~~commercial ~~carried as a separate line item on the balance sheet~~loans.

Residential Loans

Enterprise Bank originates conventional mortgage loans on one-to-four family residential properties. These properties may serve as the borrower's primary residence, or as vacation homes or investment properties. Loan-to-value policy limits vary, generally from 75% for multi-family owner-occupied properties, up to 97% for single family owner-occupied properties, with mortgage insurance coverage required for loan-to-value ratios greater than 80% based on program parameters. In addition, financing is provided for the construction of owner-occupied primary and secondary residences. Residential mortgage loans may have terms of up to 30 years at either fixed or adjustable rates of interest. Fixed and adjustable-rate residential mortgage loans are generally originated using secondary market underwriting and documentation standards.

Depending on the current interest-rate environment, management projections of future interest rates and the overall asset-liability management program of the Company, management may elect to sell fixed and adjustable-rate residential mortgage loans that are eligible for sale in the secondary market or hold some or all of this residential loan production for the Company's portfolio. Mortgage loans are generally not pooled for sale, but instead are sold on an individual basis. The Company may retain or sell the servicing when selling the loans. Loans sold are subject to standard secondary market underwriting and eligibility representations and warranties over the life of the loan and are subject to an early payment default period covering the first four payments for certain loan sales. Loans classified as held for sale are carried as a separate line item on the balance sheet.

Home Equity Lines of Credit ("Home equity")

The Company originates home equity revolving lines of credit for one-to-two family residential properties with maximum original loan-to-value ratios generally up to 75% of the automated valuation or appraised value of the property securing the loan. Home equity lines generally have interest rates that adjust monthly based on changes in the prime lending rate, although minimum rates may be applicable. Some home equity line rates may be fixed for a period of time and then adjusted monthly thereafter. The payment schedule for standard home equity lines requires interest only payments for the first ten years of the lines. Generally, at the end of ten years, the line may be frozen to future advances, and principal plus interest payments are collected over a 15-year amortization schedule or, for eligible borrowers meeting certain requirements, the line availability may be extended for an additional interest only period. Home equity line of credit programs are available with the ability to convert all or a portion of the home equity line of credit balance to a fixed-rate term note subject to certain requirements and limitations. Available credit on the home equity line becomes available again as principal is repaid on the converted amounts.

Consumer Loans

Consumer loans consist primarily of secured or unsecured personal loans, loans under energy efficiency financing programs in conjunction with Massachusetts public utilities (Mass Save ®), and overdraft protection lines on checking accounts extended to individual customers. The aggregate amounts of overdrawn deposit accounts are reclassified as loan balances. At December 31, 2024, the Company no longer participated in new originations under the Mass Save ® program.

Credit Risk and Allowance for Credit Losses

Information regarding the Company's credit risk and allowance for credit losses is contained in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," contained in the section "Financial Condition," under "Loans," in the subsections "Credit Risk," and "ACL for Loans" of this Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 (this "Form 10-K"). See also Note 1, "Summary of Significant Accounting Policies," under Item (hi) "Credit Risk Management and ACL for Loans Methodology" to the Company's audited consolidated financial statements, contained in Item 8 of this Form 10-K.

Deposit Products

Deposits have traditionally been the principal source of the Company's funds. Enterprise offers a broad selection of competitive commercial and retail deposit products, including checking accounts, limited-transactional savings and money market accounts, commercial sweep products, and term CDs. The Company's deposit products are offered to commercial businesses, professionals, municipalities, non-profit organizations, and individuals. As a member of the FDIC, the Bank's depositors are ~~provided deposit protection up to the maximum FDIC insurance coverage limits.~~

In addition to the deposit products noted above, the Company also provides customers the ability to automate allocation of investment sweep (commercial only), money market, and CD balances to nationwide networks of reciprocating FDIC insured banks. Deposits are placed into a nationwide network of banks in increments that are eligible for FDIC insurance. This allows the Company to offer enhanced FDIC insurance coverage on larger deposit balances by placing the "excess" funds into participating FDIC insured accounts or term CDs. In exchange, the other institutions place dollar-for-dollar matching reciprocal and insurable deposits with the Company via the networks. Essentially, the equivalent of the original deposit comes back to the Company and is available to fund operations. The original funds placed into the networks are not carried as deposits on the Company's Consolidated Balance Sheet, however the network's reciprocal dollar deposits are carried within the appropriate product category under customer deposits on the Consolidated Balance Sheet.

Management determines the interest rates offered on deposit accounts based on current and expected economic conditions, competition, liquidity needs, the volatility of existing deposits, the asset-liability position of the Company and the overall objectives of the Company regarding the growth and retention of relationships. Low-cost checking deposits are an important component of the Company's core funding strategy.

Enterprise may also utilize brokered deposits, mainly term products, from several available sources as an alternative to borrowed funds to support asset growth in excess of internally generated deposits. The Company collectively refers to brokered

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~~deposits~~provided ~~and~~deposit ~~borrowed~~protection ~~funds~~up asto ~~"wholesale~~the ~~funding~~maximum FDIC insurance coverage limits."

In addition to the deposit products noted above, the Company also provides customers with the ability to automate allocation of investment sweep (commercial only), money market, and CD balances to nationwide networks of reciprocating FDIC insured banks. Deposits are placed into a nationwide network of banks in increments that are eligible for FDIC insurance. This allows the Company to offer enhanced FDIC insurance coverage on larger deposit balances by placing the "excess" funds into participating FDIC insured accounts or term CDs. In exchange, the other institutions place dollar-for-dollar matching reciprocal and insurable deposits with the Company via the networks. Essentially, the equivalent of the original deposit comes back to the Company and is available to fund operations. The original funds placed into the networks are not carried as deposits on the Company's Consolidated Balance Sheet, however the network's reciprocal dollar deposits are carried within the appropriate product category under customer deposits on the Consolidated Balance Sheet.

Cash Management Services

In addition to the lending and deposit products discussed above, commercial banking and public sector customers may take advantage of cash management services and products that provide comprehensive reporting, streamline the processing of deposits and facilitate the use of those funds for purposes such as disbursements and automated short-term investment activities.

Cash management clients can enroll in remote check deposit capture, lockbox, ACH origination, domestic and international U.S. dollar wire transfers, foreign currency wire transfers, "Positive Pay" to reduce check fraud and unauthorized ACH received items, account reconciliation, zero balance target transfers, automated investment sweeps, and commercial card and merchant services programs offered through third parties.

~~Investment~~As ~~sweep~~with ~~services~~money ~~include~~market ~~third-party~~accounts ~~FDIC~~and ~~enhanced~~certificates ~~money~~of ~~market~~deposit, orinvestment sweep products are offered with third-party ~~non-deposit~~FDIC ~~mutual funds~~enhancement. Management believes that commercial customers benefit from the flexibility of these products, while retaining conservative investment options of high quality and safety. ~~The balances swept daily into mutual funds do not represent obligations of the Company and are not insured by the FDIC.~~

Product Delivery Channels

In addition to traditional product access channels, various digital banking capabilities are delivered through the Bank's online website and mobile apps allowing customers to view account statements, activity and images, as well as perform internal and external account transfers, pay bills, place stop payments, make person-to-person payments, and conduct mobile deposits. Digital wallet and mobile card controls provide smart phone users with additional debit card safety features to actively control and monitor their virtual debit card.

Online and mobile banking tools utilize multiple layers of customer authentication commensurate with the risk posed by the varying types of transactions and information available within each tool.

Wealth Management and Wealth Services

The Company provides a range of wealth advisory and management services delivered via two channels, Enterprise Wealth Management and Enterprise Wealth Services.

Wealth advisory and management services include customized investment management and trust services provided under the label "Enterprise Wealth Management" to individuals, family groups, commercial businesses, trusts, foundations, non-profit organizations, and endowments.

Enterprise Wealth Management utilizes an open-architecture approach to client investment management, focusing on strategic asset allocation to select independent investment management firms and individual securities on behalf of our clients. The Company partners with investment research firms and uses state of the art analytic tools to strengthen and inform the asset allocation and portfolio construction processes. The investment management process is intended to enable the Company to build and maintain investment portfolios to meet each client’s financial objectives and aims to deliver superior long-term results.

Enterprise Wealth Services provides brokerage and management services through a third-party arrangement with Commonwealth Financial Network, a licensed securities brokerage firm, with products designed primarily for the individual investor. Retirement plan services are offered through third-party arrangements with leading 401(k) plan providers.

The EWMC of the Board is responsible for overseeing that the fiduciary and investment activities of Enterprise Wealth Management and Enterprise Wealth Services are consistent with those powers delegated by the Board and that prudent care and discretion are followed in the management of client assets. EWMC is also responsible for reviewing investment performance of investment advisors, strategic planning initiatives and results, and proposed new products or services, among other responsibilities.

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asset allocation to select independent investment management firms and individual securities on behalf of our clients. The Company partners with investment research firms and uses state of the art analytic tools to strengthen and inform the asset allocation and portfolio construction processes. The investment management process is intended to enable the Company to build and maintain investment portfolios to meet each client’s financial objectives and aims to deliver superior long-term results.

The Enterprise Wealth Management Committee of the Board is responsible for overseeing that the fiduciary and investment activities of Enterprise Wealth Management and Enterprise Wealth Services are consistent with those powers delegated by the Board and that prudent care and discretion are followed in the management of client assets. EWMC is also responsible for reviewing investment performance of investment advisors, strategic planning initiatives and results, and proposed new products or services, among other responsibilities.

Investment Activities

The Company's investment portfolio activities are an integral part of the overall asset-liability management program of the Company. The investment function provides liquidity to support loan growth, as well as to meet withdrawals and maturities of deposits, and attempts to provide maximum return consistent with liquidity constraints and general prudence, including diversification and safety of investments. In addition to the Bank, the Company holds investment securities in three Massachusetts security corporation subsidiaries, which serve to increase after tax returns in accordance with state tax policy.

The securities in which the Company may invest are limited by regulation. In addition, an internal investment policy restricts investments in debt securities to high-quality securities within prescribed categories as approved by the Board. Management utilizes an outside registered investment adviser to manage the corporate and municipal bond portfolios within prescribed guidelines set by management. The Company's internal investment policy also sets sector limits as a percentage of the total portfolio, identifies acceptable and unacceptable investment practices, and denotes approved security dealers. The effect of changes in interest rates, market values, timing of principal payments and credit risk are considered when purchasing securities.

Cash equivalents are defined as highly liquid investments with original maturities of three months or less, that are readily convertible to known amounts of cash and present insignificant risk of changes in value due to changes in interest rates. The Company's cash and cash equivalents may be comprised of cash on hand and cash items due from banks, interest-earning deposits with banks (deposit accounts, excess reserve cash balances, money markets and money market mutual fund accounts), short team U.S. Treasury notes and overnight and term federal funds sold to money center banks. Balances in cash and cash equivalents will fluctuate due primarily to the timing of net cash flows from deposits, borrowings, loans and investments, and the immediate liquidity needs of the Company.

The Company primarily invests in debt securities, with a small portion of the portfolio invested in equities. As of the balance sheet dates reflected in this Form 10-K, all of the debt securities within the Company's investment portfolio were classified as available-for-sale and carried at fair value, with changes in fair value reflected in other comprehensive income. The equity securities are carried at fair value, with changes in fair value recognized in net income.

Management reports investment transactions, portfolio allocation, effective duration, fair value at risk and projected cash flows to the Board on a periodic basis. Credit risk inherent in the portfolio is closely monitored by management and presented at least annually to the Board. The Board also approves the Company's internal investment policy annually and ongoing investment strategy.

The Company is required to purchase FHLB stock at par value in association with the Bank's outstanding advances from the FHLB; this stock is classified as a restricted investment and carried at cost which management believes approximates fair value.

Borrowed Funds

Total borrowing capacity includes borrowing arrangements at the FHLB, and the FRB discount window,. ~~the~~Membership ~~BTFP~~in ~~established by~~ the ~~Board~~FHLB ofprovides ~~Governors~~borrowing ofcapacity ~~the~~based ~~Federal~~on ~~Reserve~~qualifying ~~System~~collateral ~~(the~~balances ~~"Federal~~pre-pledged ~~Reserve~~to ~~Board")~~the ~~and~~FHLB, ~~borrowing~~including ~~arrangements~~certain ~~with~~residential ~~correspondent~~loans, ~~banks.~~home Onequity ~~January 24~~lines, ~~2024~~commercial loans, ~~the~~U.S. ~~Federal~~government ~~Reserve~~and ~~Board~~agency ~~announced~~securities ~~that~~and ~~the~~certain ~~BTFP~~municipal ~~will cease making new loans after March 11, 2024~~securities.

Membership in the FHLB provides borrowing capacity based on qualifying collateral balances pre-pledged to the FHLB, including certain residential loans, home equity lines, commercial loans, U.S. government and agency securities and certain municipal securities.

Borrowings from the FHLB typically are utilized to fund liquidity needs or specific lending projects under the FHLB's community development programs. The FHLB funding facility is an integral component of the Company's asset-liability management program.

The FRB discount window and BTFP borrowing capacity is based on the pledge of qualifying collateral balances to the FRB. Collateral pledged to the FRB consists primarily of certain municipal and corporate securities held in the Company's investment portfolio. Additional types of collateral are available to increase borrowing capacity with the FRB if necessary.

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The FRB discount window borrowing capacity is based on the pledge of qualifying collateral balances to the FRB. Collateral pledged to the FRB consists primarily of certain municipal and corporate securities held in the Company's investment portfolio. Additional types of collateral are available to increase borrowing capacity with the FRB if necessary.

Pre-established non-collateralized overnight borrowing arrangements with large national and regional correspondent banks provide additional overnight and short-term borrowing capacity for the Company and are classified as "other borrowings" under Borrowed Funds on the Company's balance sheets.

Subordinated Debt

The Company ~~has~~ issued subordinated notes as a component of its capital management strategy. As of the balance sheet dates contained in this Form 10-K, the Company's outstanding subordinated debt consisted of fixed-to-floating rate subordinated notes (the "Notes") issued in July 2020, callable in whole or part beginning in 2025, due in 2030. The Notes are intended to qualify ~~at the Company~~ as Tier 2 capital of the Company for regulatory purposes.

Capital Resources

Capital planning by the Company and the Bank considers current needs and anticipated future growth. The primary sources of capital for the Company and the Bank include proceeds from the issuance of the Company's common stock, proceeds from the issuance of subordinated debt and retention of earnings, less dividends paid. The Company believes its current capital is adequate to support ongoing operations.

The Company is subject to the regulatory capital framework known as the "Basel III Rules," which include risk-based capital ratio requirements. Management believes, as of December 31, ~~2023~~2024, that the Company and the Bank met all capital adequacy requirements to which they were subject under Basel III. As of December 31, ~~2023~~2024, the Company met the definition of "well-capitalized" under the applicable Federal Reserve Board regulations and the Bank qualified as "well-capitalized" under the prompt corrective action regulations of ~~Basel~~the ~~III~~FDIC and the ~~FDIC~~Basel III Rules.

See also "Capital Requirements," and "Capital Requirements under Basel III," under the heading "Supervision and Regulation," contained below, for further information regarding the Company's and the Bank's regulatory capital requirements.

Patents, Trademarks, etc.

The Company holds several registered service marks and trademarks related to product names and corporate branding. The Company holds no other patents, registered trademarks, licenses (other than licenses required to be obtained from appropriate banking regulatory agencies), franchises or concessions that are material to its business.

Human Capital Resources

The Company distinguishes itself through our strong sense of teamwork, purpose, inclusion, and equity, and through caring for each other, our customers, and our communities. We routinely engage independent third parties to conduct cultural, engagement, and inclusion surveys to assess our engagement and to act, if necessary, to address areas of improvement. Based on the feedback provided by our team members, management believes its team member relations are excellent.

At December 31, ~~2023~~2024, the Company employed ~~570~~576 full-time equivalent team members. None of the Company's employees are presently represented by a union or covered by a collective bargaining agreement.

Diversity, Equity, Inclusion & Belonging

At Enterprise Bank, we encourage and foster a culture of diversity, equity, inclusion, and belonging where everyone feels valued and respected. Our Bank-wide ~~DEIB~~Diversity, Equity, Inclusion and Belonging Program Steering Committee was founded to further embrace and promote awareness of personal identity in the workplace, to identify and help resolve equity gaps and to strengthen everyone’s sense of belonging within our Enterprise family. To help team members with similar backgrounds and experiences connect, and to bring together supportive networks, we’ve established several Employee Resource Groups at the Bank, including the PRIDE Community of Respecting People’s Sexuality & Gender, Veterans ERG, Working Parents ERG, and our Multicultural Alliance, a cross-functional team of ambassadors who promote diversity and share ideas to help celebrate our differences while seeking connections through intercultural conversations, awareness, and respect. In 2023, a Young Professionals ERG was established at the Bank with a mission to help develop our young professionals through education, guidance, resources, and networking opportunities.

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AsTo ofhelp ~~December 31~~team members with similar backgrounds and experiences connect, ~~2023~~and to bring together supportive networks, ~~68%~~we have established several Employee Resource Groups at the Bank: the PRIDE Community of ~~our~~Respecting ~~team~~People’s ~~members~~Sexuality ~~are~~& ~~women~~Gender, ~~and~~Veterans ~~22%~~Resource ~~are~~Group, ~~self-identified~~Working asParents ~~Black~~Resource Group, ~~Indigenous~~a Young Professionals Resource Group, and ~~persons~~our Multicultural Alliance, a cross-functional team of ~~color.~~ambassadors Ofwho promote diversity and share ideas to help celebrate our ~~managerial~~differences ~~team~~while ~~members~~seeking connections through intercultural conversations, ~~66%~~awareness, ~~are~~and ~~women~~respect. At the end of 2024, an Awareness of Visible and ~~13%~~Invisible ~~are~~Disabilities ~~self-identified~~ERG aswas ~~Black~~initiated to provide information, ~~Indigenous~~resources and events that encourage dialogue, awareness, support and ~~persons~~respect offor ~~color.~~people with disabilities and their advocates.

~~Employee~~As ~~Development~~of December 31, 2024, 66% of our team members are women and 23% are self-identified as black, indigenous, and persons of color. Of our managerial team members, 65% are women and 13% are self-identified as black, indigenous, and persons of color.

We strive to attract the best talent and to foster their growth and development by continually investing in and supporting the ongoing development of our team members. Our Enterprise team has the opportunity to participate in in-house training, seminars, webinars, and conferences. We also support professional certifications and designations, continued education assistance and reimbursement.

Managers are encouraged to work with their team members to develop individualized career development plans and strategies based on our S.O.A.R. framework: Strengths, Opportunities, Aspirations, Results. Enterprise also offers a mentorship program to help guide team members and contribute to their holistic personal and professional development.

Employee Benefits & Wellness

Enterprise strives to provide team members with a range of compensation and reward programs that are meaningful and important to them. We offer compensation opportunities that we believe are competitive with our geographic markets. New team members starting in entry level roles begin at above minimum wage and we have increased starting pay each year.

Enterprise offers unique programs to give team members a greater vested interest in the Bank’s success. We offer a Spot Bonus Award Program, an Equity Ownership Participation Program, a Variable Compensation Incentive Plan, and Sales Incentive Plans to incentivize team members to perform well by rewarding them with a monetary payout when the team member and the Bank are successful.

As part of our "total rewards," we offer employees several insurance plan options, including three health insurance plans, two dental insurance plans, two vision insurance plans and 401(k) plan matches. Enterprise bankers also have access to our Employee Assistance Program, which offers help to team members and/or their household members who may be experiencing problems related to life changes and/or personal stress, ~~paternity~~parental leave, tuition reimbursement, short- and long-term disability and flexible work arrangements.

Enterprise Bank’s wellness program encourages a healthy lifestyle and supports team members’ physical, mental, financial, spiritual and emotional well-being through ongoing holistic education programs, interactive initiatives and social support.

Company Websites

The Company currently uses outside vendors to design, support, and host its primary internet website: ~~www.enterprisebanking.com. The information contained on or accessible from our websites does not constitute a part of this Form 10-K and is not incorporated by reference.~~

www.enterprisebanking.com. The ~~Company's website provides~~ information contained on ~~the~~or ~~Company~~accessible ~~and~~from ~~its~~our ~~products~~websites ~~and~~does ~~services.~~not ~~Users~~constitute ~~have the ability to securely open various deposit accounts, as well as the ability to submit mortgage loan applications and related documentation securely online and, via~~ a ~~link,~~part toof ~~access~~this ~~their~~Form ~~bank accounts and perform various financial transactions, and via the wealth~~10-~~management~~K ~~link to access various wealth account reports~~ and ~~statements,~~is ~~and~~not ~~the~~incorporated ~~ability~~by ~~to consolidate all investment accounts (Enterprise or others) on one secure platform~~reference.

The Company's website provides information on the Company and its products and services. Users have the ability to securely open various deposit accounts, as well as the ability to submit mortgage loan applications and related documentation securely online and, via a link, to access their bank accounts and perform various financial transactions, and via the wealth management link to access various wealth account reports and statements, and the ability to consolidate all investment accounts (Enterprise or others) on one secure platform.

The Bank's website also provides the access point to a variety of specified banking services and information, various financial management tools, and Company investor and corporate information, which includes a corporate governance page. The Company's corporate governance page includes the Corporate Governance Guidelines, Code of Business Conduct and Ethics, and Whistleblower and Non-Retaliation policy, as well as the charters of the Board's Audit, Compensation and Human Resources, and Corporate Governance/Nominating committees.

In the Investor Relations section of the Company's website, under the SEC Filings tab, the Company makes available copies of the Company's annual reports on Form 10-K, quarterly reports on Form 10-Q ("Form 10-Q"), proxy statements and current reports on Form 8-K ("Form 8-K"). Additionally, the site includes current registration statements that the Company has been required or elected to file in connection with the issuance of its shares and other securities. The Company similarly makes available all insider stock ownership and transaction reports filed with the SEC by executive officers, directors and any 10% or greater shareholders under Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (Forms 3, 4

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~~greater shareholders under Section 16 of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (Forms 3, 4~~ and 5). Access to all of these reports is made available free of charge and is essentially simultaneous with the SEC's posting of these reports on its EDGAR system through the SEC's website (www.sec.gov).

Competition

The Company faces robust competition to attract and retain customers within existing and neighboring geographic markets. The Company's ~~ability to achieve its long-term strategic growth and~~ market share ~~objectives~~ will depend in part upon management's continued success in differentiating the Company in the marketplace and its ability to strengthen its competitive position. National and larger regional banks and financial institutions have a local presence in the Company's market area. These larger institutions have certain competitive advantages, including greater financial resources and the ability to make larger loans to a single borrower. Within our market area we also compete with government sponsored enterprises that can offer commercial real estate loans on apartments, ~~multifamily~~multi-family and senior housing projects with a variety of competitive terms.

Numerous local savings banks, commercial banks, cooperative banks, and credit unions also compete in the Company's market area. ~~The~~Internet-based ~~expanded~~banks, ~~commercial~~non-bank ~~lending~~electronic ~~capabilities~~payment ofand ~~credit~~funding ~~unions~~channels, and ~~the~~other ~~shift~~tech-based tofinancial ~~commercial~~intermediaries ~~lending~~have bybecome ~~traditional~~a ~~savings banks means that both types of traditionally consumer~~fast-~~orientated~~growing ~~institutions~~and ~~compete~~strong ~~for~~competitor in the ~~Company's~~financial ~~targeted~~services ~~commercial customers~~marketplace. The Inevolving ~~addition,~~Fintech ~~the~~industry ~~non-taxable~~aims ~~status of credit unions allows them an advantage as compared~~ to ~~taxable~~compete ~~institutions~~with ~~such~~traditional asbanking ~~Enterprise. Competition for loans, deposits and cash management~~ services, and ~~wealth~~delivery ~~advisory~~methods ~~assets also comes from other businesses that provide financial services, including consumer finance companies, mortgage brokers~~ and ~~lenders,~~although ~~private~~the ~~lenders,~~industry ~~insurance~~offers ~~companies,~~opportunities ~~securities~~for ~~brokerage~~strategic ~~firms~~partnerships, ~~institutional~~it ~~mutual~~is ~~funds,~~also ~~and~~a ~~registered~~source ~~investment~~for ~~advisors~~direct competition.

Internet-based banks, non-bank electronic payment and funding channels, and other tech-based financial intermediaries have become a fast-growing and strong competitor in the financial services marketplace. The evolving Fintech industry aims to compete with traditional banking services and delivery methods and although the industry offers opportunities for strategic partnerships, it is also a source for direct competition.

The Company faces increasing competition within its marketplace on the pricing and terms of loans. This is expected to be an ongoing competitive challenge; however, the Company is committed to maintaining asset quality and focuses its sales efforts on building long-term full relationships, rather than competing for individual transactions or easing loan terms.

The Company faces ongoing competition within its marketplace on the pricing and terms of deposit products. The Company actively seeks to increase deposit market share and strengthen its competitive position with a commitment to providing an enhanced customer experience. The Company continuously reviews its deposit product offerings, cash management and ancillary services and delivery channels to ensure it is competitive.

Enterprise carefully plans market expansion through the addition of new branch locations, identifying markets strategically located to complement existing locations while expanding the Company's geographic market footprint. The integrated branch network serves all product channels.

The increased use and advances in technology, data analytics and storage, such as online and mobile, and non-bank electronic payment channels, electronic transaction processing, block-chain based assets including digital currency and non-fungible tokens, and cloud-computing and storage, among others are expected to have a significant impact on the future competitive landscape confronting financial service businesses.

In addition, the cost of compliance with new and existing government regulations, changes in tax legislation and the interest-rate environment continue to impact competition and consolidation within the industry in various ways, with some participants better equipped to manage these changes than others based on size, depth of resources, or competitive product positioning, among other factors.

Supervision and Regulation

General

Set forth below is a summary description of the material elements of the laws and regulations applicable to the Company and the Bank. The description is qualified in its entirety by reference to the full text of the statutes, regulations and policies that are described. Moreover, these statutes, regulations and policies are continually under review by the U.S. Congress and state legislatures and federal and state regulatory agencies. A change in statutes, regulations, or regulatory policies applicable to the Company or its principal subsidiary, the Bank, could have a material effect on our business, financial condition or results of operations.

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Company or its principal subsidiary, the Bank, could have a material effect on our business, financial condition or results of operations.

Regulatory Agencies

As a registered bank holding company, the Company is subject to the supervision and regulation of the Federal Reserve Board and, acting under delegated authority, the FRB pursuant to the Bank Holding Company Act of 1956, as amended (the "Bank Holding Company Act"). The Massachusetts Division of Banks (the "Division") also retains supervisory jurisdiction over the Company.

As a Massachusetts state-chartered bank, the Bank is subject to the supervision and regulation of the Division and, with respect to the Bank's New Hampshire branching operations, the New Hampshire Banking Department. As a state-chartered bank that accepts deposits and is not a member of the Federal Reserve System, the Bank is also subject to the supervision and regulation of the FDIC.

Bank Holding Company Regulation

As a registered bank holding company, the Company is required to furnish to the FRB annual and quarterly reports of its financial condition and results of operations, among other information and reports that may be required.

Acquisitions by Bank Holding Companies

Under the Bank Holding Company Act, the Company must obtain the prior approval of the Federal Reserve Board or, acting under delegated authority, the FRB before (i) acquiring direct or indirect ownership or control of any class of voting securities of any bank or bank holding company if, after the acquisition, the Company would directly or indirectly own or control 5% or more of such class; (ii) acquiring all or substantially all of the assets of another bank or bank holding company; or (iii) merging or consolidating with another bank holding company. These activities would also require the prior approval of the Division.

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more of such class; (ii) acquiring all or substantially all of the assets of another bank or bank holding company; or (iii) merging or consolidating with another bank holding company. These activities would also require the prior approval of the Division.

Under the Bank Holding Company Act, and the regulations promulgated by the Federal Reserve Board thereunder, any company must obtain approval of the Federal Reserve Board or, acting under delegated authority, the FRB, prior to acquiring control of the Company or the Bank. Section 2(a)(2) of the Bank Holding Company Act applies a three-prong test for determining whether a company acquires "control": (i) ownership, control, or the power to vote 25% or more of any class of voting securities of the Company or the Bank, (ii) the ability to control in any manner the election of a majority of the directors of the Company or the Bank, or (iii) the direct or indirect exercise of a controlling influence over management or policies of the Company or the Bank. "Control" is conclusively presumed to exist upon the acquisition of 25% or more of the outstanding voting securities of a bank or bank holding company.

In addition, regulations promulgated by the Federal Reserve Board related to determinations of "control" for purposes of the Bank Holding Company Act include presumptions for use in control determinations according to a tiered methodology using 5%, 10% and 15% as the presumption thresholds. These regulations apply to questions of control under the Bank Holding Company Act but do not extend to the Change in Bank Control Act of 1978, as amended (the "Change in Bank Control Act").

Control Acquisitions

The Change in Bank Control Act and the related regulations of the Federal Reserve Board generally require any person or groups of persons acting in concert to file a written notice with the Federal Reserve Board or, acting under delegated authority, the appropriate FRB, before the person or group acquires control of the Company. The Change in Bank Control Act defines "control" as the direct or indirect power to vote 25% or more of any class of voting securities or to direct the management or policies of a bank holding company or an insured bank. A rebuttable presumption of control arises under the Change in Bank Control Act where a person or group controls 10% or more, but less than 25%, of a class of the voting stock of a company or insured bank which is a reporting company under the Exchange Act, such as the Company, or such ownership interest is greater than the ownership interest held by any other person or group.

In addition, the Change in Bank Control Act prohibits any entity from acquiring 25% (or 5% in the case of an acquirer that is a bank holding company) or more of a bank holding company's or bank's voting securities, or otherwise obtaining control or a controlling influence over a bank holding company or bank without the approval of the Federal Reserve Board. The Federal Reserve Board has issued a policy statement on equity investments in bank holding companies and banks, which allows the Federal Reserve Board to generally be able to conclude that an entity's investment is not "controlling" if the investment in the form of voting and nonvoting shares represents in the aggregate (i) less than one-third of the total equity of the banking organization (and less than one-third of any class of voting securities, assuming conversion of all convertible nonvoting securities held by the entity) and (ii) less than 15% of any class of voting securities of the banking organization.

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form of voting and nonvoting shares represents in the aggregate (i) less than one-third of the total equity of the banking organization (and less than one-third of any class of voting securities, assuming conversion of all convertible nonvoting securities held by the entity) and (ii) less than 15% of any class of voting securities of the banking organization.

Under the Change in Bank Control Act and applicable Massachusetts law, any person or group of persons acting in concert would also be required to file a written notice with the FDIC and the Division before acquiring any such direct or indirect control of the Bank.

Permissible Activities

The Bank Holding Company Act and the implementing regulations of the Federal Reserve Board also limit the investments and activities of bank holding companies. In general, a bank holding company is prohibited from acquiring direct or indirect ownership or control of more than 5% of the voting shares of a company that is not a bank or a bank holding company or from engaging directly or indirectly in activities other than those of banking, managing or controlling banks, providing services for its subsidiaries, and various non-bank activities that are deemed to be closely related to banking.

A bank holding company that qualifies and elects to become a "financial holding company" may engage, directly or through its non-bank subsidiaries, in any activity that is financial in nature or incidental to such financial activity or in any other activity that is complementary to a financial activity and does not pose a substantial risk to the safety and soundness of depository institutions or the financial system generally. The Company has no current intention of seeking to become a financial holding company.

Source of Strength

The Dodd-Frank Wall Street Reform and Consumer Protection Act (the "Dodd-Frank Act") codified the Federal Reserve Board's "source-of-strength" doctrine, which requires a bank holding company to act as a source of financial and managerial strength to any of its subsidiary banks. The bank holding company is expected to commit resources to support its subsidiary bank, including at times when the bank holding company may not be in a financial position to provide such support. A bank holding company's failure to meet its source-of-strength obligations may constitute an unsafe and unsound practice or a violation of the Federal Reserve Board's regulations, or both.

Imposition of Liability for "Undercapitalized" Subsidiaries

Bank regulators are required to take "prompt corrective action" to resolve problems associated with insured depository institutions whose capital declines below certain levels. In the event an institution becomes "undercapitalized," it must submit a capital restoration plan to its regulators. The capital restoration plan will not be accepted by the regulators unless each company having control of the "undercapitalized" institution guarantees the subsidiary's compliance with the capital restoration plan up to a certain specified amount. Any such guarantee from a depository institution's holding company is entitled to a priority of payment in bankruptcy.

The aggregate liability of the holding company of an "undercapitalized" bank is limited to the lesser of 5% of the institution's assets at the time it became "undercapitalized" or the amount necessary to cause the institution to be "adequately capitalized." The bank regulators have greater power in situations where an institution becomes "significantly" or "critically" "undercapitalized" or fails to submit a capital restoration plan.

Safety and Soundness

The federal banking agencies have adopted the Interagency Guidelines for Establishing Standards for Safety and Soundness, which establish general standards relating to internal controls and information systems, internal audit systems, loan documentation, credit underwriting, interest-rate exposure, asset growth, asset quality, earnings and compensation, and fees and benefits. In general, these guidelines require, among other things, appropriate systems and practices to identify and manage the risk and exposures specified in the guidelines. These guidelines also prohibit excessive compensation as an unsafe and unsound practice and describe compensation as excessive when the amounts paid are unreasonable or disproportionate to the services performed by an executive officer, employee, director or principal shareholder.

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~~control~~documentation, ~~constitutes~~credit aunderwriting, ~~serious~~interest-rate ~~risk~~exposure, toasset ~~the~~growth, ~~financial~~asset ~~safety~~quality, ~~soundness~~earnings and compensation, orand ~~stability~~fees ofand ~~any~~benefits. ~~subsidiary~~In ~~bank~~general, ofthese ~~the~~guidelines ~~bank~~require, ~~holding~~among ~~company.~~other ~~The~~things, ~~Federal~~appropriate ~~Reserve~~systems ~~Board~~and ~~also~~practices ~~has~~to identify and manage the ~~authority~~risk toand ~~prohibit~~exposures ~~activities~~specified ofin ~~non-banking~~the ~~subsidiaries~~guidelines. ofThese ~~bank~~guidelines ~~holding~~also ~~companies~~prohibit ~~which~~excessive ~~represent~~compensation as an unsafe and unsound ~~banking~~practice ~~practices~~and describe compensation as excessive when the amounts paid are unreasonable or ~~which~~disproportionate ~~constitute~~to ~~violations~~the ofservices ~~laws~~performed by an executive officer, employee, director or ~~regulations~~principal shareholder.

Bank holding companies are not permitted to engage in unsafe or unsound banking practices. The Federal Reserve Board has the power to order a bank holding company to terminate any activity or investment, or to terminate its ownership or control of any subsidiary, when it has reasonable cause to believe that the continuation of such activity or investment or such ownership or control constitutes a serious risk to the financial safety, soundness, or stability of any subsidiary bank of the bank holding company. The Federal Reserve Board also has the authority to prohibit activities of non-banking subsidiaries of bank holding companies which represent unsafe and unsound banking practices, or which constitute violations of laws or regulations.

The Federal Reserve Board can assess civil money penalties for activities conducted on a knowing and reckless basis, if such unsafe and unsound activities caused a substantial loss to a depository institution. The FIRREA expanded the Federal Reserve Board's authority to prohibit activities of bank holding companies and their non-banking subsidiaries which represent unsafe and unsound banking practices, or which constitute violations of laws or regulations. Potential penalties can be as high as $1 million for each day the activity continues.

Capital Requirements

The federal banking agencies have adopted risk-based capital guidelines for bank holding companies and banks that are expected to provide a measure of capital that reflects the degree of risk associated with a banking organization's operations for both transactions reported on the consolidated balance sheet as assets, such as loans, and those recorded as off-balance sheet items, such as commitments, letters of credit and recourse arrangements. The risk-based guidelines apply on a consolidated basis to bank holding companies with consolidated assets of $3 billion or more, such as the Company, or with a material amount of equity securities outstanding that are registered with the SEC.

Pursuant to federal regulations, banks and bank holding companies must maintain capital levels commensurate with the level of risk to which they are exposed, including the volume and severity of problem loans. The federal banking agencies may change, adopt or require new capital guidelines under certain situations such as for high growth or acquisitive bank holding companies, when banks and bank holding companies are subject to enforcement actions, and have also subjected such institutions to restrictions on various activities, including a bank's ability to accept or renew brokered deposits.

Under these capital guidelines, a banking organization is required to maintain certain minimum capital ratios, which are obtained by dividing its qualifying capital by its total risk-adjusted assets and off-balance sheet items. In general, the dollar amounts of assets and certain off-balance sheet items are "risk-adjusted" and assigned to various risk categories. In addition to such risk adjusted capital requirements, banking organizations are also required to maintain an additional minimum "leverage" capital ratio, which is calculated based on average total assets without any adjustment for risk being made to the value of the assets.

Qualifying capital is classified depending on the type of capital as follows:

"Tier 1 capital" consists of common equity, retained earnings, qualifying non-cumulative perpetual preferred stock, a limited amount of qualifying cumulative perpetual preferred stock and minority interests in the equity accounts of consolidated subsidiaries, less goodwill and certain other intangible assets. In certain limited circumstances, qualifying Tier 1 capital may count trust preferred securities.

"Tier 2 capital" includes, among other things, hybrid capital instruments, perpetual debt, mandatory convertible debt securities, qualifying term subordinated debt, preferred stock that does not qualify as Tier 1 capital, and a limited amount of allowance for credit and lease losses.

Capital Requirements under the Basel III Rules

Federal banking regulations implementing the international regulatory capital framework, referred to as the "Basel III Rules," apply to both depository institutions and (subject to certain exceptions not applicable to the Company) their holding companies. Under the Basel III Rules, a bank holding company must satisfy certain capital levels in order to comply with the prompt corrective action framework and to avoid limitations on capital distributions and discretionary bonus payments to executives.

The Basel III Rules also establish a "capital conservation buffer" of 2.5% above the regulatory minimum risk-based capital requirements. An institution will be subject to limitations on certain activities, including payment of dividends, share repurchases and discretionary bonuses to executive officers, if its capital level is below the buffered ratio.14

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The Basel III minimum capital ratios with the full capital conservation buffer are summarized in the table below.


	Basel III Minimum for Capital Adequacy Purposes	Basel III Additional Capital Conservation Buffer	Basel III Ratio with Capital Conservation Buffer
Total Risk-Based Capital (total capital to risk-weighted assets)	8.00%	2.50%	10.50%
Tier 1 Risk-Based Capital (tier 1 to risk-weighted assets)	6.00%	2.50%	8.50%
Tier 1 Leverage Ratio (tier 1 to average assets)(1)	4.00%	N/A	4.00%
Common Equity Tier 1 Risk-Based Capital (CET1 to risk-weighted assets)	4.50%	2.50%	7.00%

__________________________________________

(1)Capital conservation buffer is not applicable to Tier 1 Leverage Ratio.

In addition, the Basel III Rules include certain exemptions to address concerns about the regulatory burden on community banks. For example, banking organizations with less than $15 billion in consolidated assets as of December 31, 2009 are permitted to include in Tier 1 capital trust preferred securities and cumulative perpetual preferred stock issued and included in Tier 1 capital prior to May 19, 2010 on a permanent basis, without any phase out. Community banks were also allowed to elect, on a one-time basis in their March 31, 2015 quarterly filings, to permanently opt-out of the requirement to include most AOCI components in the calculation of CET1 capital and, in effect, retain the AOCI treatment under the previous capital rules. Under the Basel III Rules, in 2015 the Company made such an election to permanently exclude AOCI from capital.

Management believes that, as of December 31, ~~2023~~2024, the Company met all capital adequacy requirements to which it was subject under Basel III. As of December 31, ~~2023~~2024, the Company met the definition of "well-capitalized" under the applicable Federal Reserve Board regulations.

Regulatory Restrictions on Dividends and Stock Redemptions and Repurchases

The Company is regarded as a legal entity separate and distinct from the Bank. The principal source of the Company's revenues is dividends received from the Bank. Both Massachusetts and federal law limit the payment of dividends by the Company. Under Massachusetts law, the Company is generally prohibited from paying a dividend or making any other distribution if, after making such distribution, it would be unable to pay its debts as they become due in the usual course of business, or if its total assets would be less than the sum of its total liabilities plus the amount that would be needed if it were dissolved at the time of the distribution, to satisfy any preferential rights on dissolution of holders of preferred stock ranking senior in right of payment to the capital stock on which the applicable distribution is made. The Federal Reserve Board also has authority to prohibit dividends by bank holding companies if their actions constitute unsafe or unsound practices.

The Federal Reserve Board policy statement and supervisory guidance on the payment of cash dividends by bank holding companies expresses the view that a bank holding company should pay cash dividends only to the extent that (i) the bank holding company's net income for the past year is sufficient to cover the cash dividends, (ii) the rate of earnings retention is consistent with the bank holding company's capital needs, asset quality, and overall financial condition, and (iii) the minimum regulatory capital adequacy ratios are met. The Federal Reserve Board policy statement also provides that a bank holding company should inform the Federal Reserve Board or the FRB reasonably in advance of declaring or paying a dividend that exceeds earnings for the period for which the dividend is being paid or that could result in a material adverse change to the bank holding company's capital structure. Bank holding companies also are required to consult with the Federal Reserve Board or the FRB before materially increasing dividends. It is also the Federal Reserve Board's policy that bank holding companies should not maintain dividend levels that undermine their ability to serve as a source of strength to their banking subsidiaries. The Federal Reserve Board or the FRB could prohibit or limit the payment of dividends by a bank holding company if it determines that payment of the dividend would constitute an unsafe or unsound practice.

Bank holding companies must consult with the Federal Reserve Board or the FRB before redeeming any equity or other capital instrument included in tier 1 or tier 2 capital prior to stated maturity, if (x) such redemption could have a material effect on the level or composition of the organization's capital base or (y) as a result of such repurchase, there is a net reduction of the outstanding amount of common stock or preferred stock outstanding at the beginning of the quarter in which the redemption or repurchase occurs. In addition, bank holding companies are unable to repurchase shares equal to 10% or more of their net worth if they would not be "well-capitalized" (as defined by the Federal Reserve Board) after giving effect to such repurchase. Bank holding companies experiencing financial weaknesses, or that are at significant risk of developing financial weaknesses, must

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repurchase occurs. In addition, bank holding companies are unable to repurchase shares equal to 10% or more of their net worth if they would not be "well-capitalized" (as defined by the Federal Reserve Board) after giving effect to such repurchase. Bank holding companies experiencing financial weaknesses, or that are at significant risk of developing financial weaknesses, must consult with the Federal Reserve Board or the FRB before redeeming or repurchasing common stock or other regulatory capital instruments.

Bank Regulation

The Bank is subject to the supervision and regulation of the Division and the FDIC, and, with respect to its New Hampshire branching operations, of the New Hampshire Banking Department. Federal and Massachusetts laws and regulations that specifically apply to the Bank's business and operations cover, among other matters, the scope of its business, the nature of its investments, the timing of the availability of deposited funds, its activities relating to dividends, investments, loans, the nature and amount of and collateral for certain loans, borrowings, capital requirements, certain check-clearing activities, branching, and mergers and acquisitions, as discussed below.

The FDIC and the Division may exercise extensive discretion in connection with their supervisory and enforcement activities and examination policies, including policies with respect to the classification of assets and the establishment of adequate credit loss reserves for regulatory purposes. If as a result of an examination, the Division or the FDIC should determine that the financial condition, capital resources, asset quality, earnings prospects, management, liquidity, sensitivity to market risk, or other aspects of the Bank's operations are unsatisfactory or that the Bank or its management is violating or has violated any law or regulation, the Division and the FDIC have authority to undertake a variety of enforcement measures of varying degrees of severity, including, among other things:

(i)requiring the Bank to take affirmative action to correct any conditions resulting from any violation or practice;

(ii)directing the Bank to increase capital and maintain higher specific minimum capital ratios, which may preclude the Bank from being deemed to be "well-capitalized" and restrict its ability to engage in various activities;

(iii)restricting the Bank's growth geographically, by products and services, or by mergers and acquisitions;

(iv)requiring the Bank to enter into an informal or formal enforcement action to take corrective measures and cease unsafe and unsound practices, including requesting the board of directors to adopt a binding resolution, sign a memorandum of understanding or enter into a consent order;

(v)requiring prior approval for any changes in senior management or the board of directors;

(vi)removing officers and directors and assessing civil monetary penalties; or

(vii)taking possession of, closing and liquidating the Bank or appointing the FDIC as receiver under certain circumstances.

Permissible Activities

Under the FDIA, as amended, and applicable Massachusetts law, the Bank may generally engage in any activity that is permissible under Massachusetts law and either is permissible for national banks or the FDIC has determined does not pose a significant risk to the FDIC's DIF. In addition, the Bank may also form, subject to the approvals of the Division and the FDIC, "financial subsidiaries" to engage in any activity that is financial in nature or incidental to a financial activity. In order to qualify for the authority to form a financial subsidiary, the Bank is required to satisfy certain conditions, some of which are substantially similar to those that the Company would be required to satisfy in order to elect to become a financial holding company. The Company believes that the Bank would be able to satisfy all of the conditions that would be required to form a financial subsidiary, although the Bank has no current intention of doing so.

Capital Adequacy Requirements

The FDIC monitors the capital adequacy of the Bank by using a combination of risk-based guidelines and leverage ratios. The FDIC considers the Bank's capital levels when taking action on various types of applications and when conducting supervisory activities related to the safety and soundness of the Bank and the banking system. As noted above, the Basel III Rules require banks to maintain four minimum capital standards: (i) a Tier 1 capital to adjusted total assets ratio, or "leverage capital ratio," of at least 4.0%, (ii) a Tier 1 capital to risk-weighted assets ratio, or "Tier 1 risk-based capital ratio," of at least 6.0%, (iii) a total risk-based capital (Tier 1 plus Tier 2) to risk-weighted assets ratio, or "total risk-based capital ratio," of at least 8.0%, and (iv) a CET1 capital ratio of 4.5%, which are the same minimum capital standards to which the Company is held on a consolidated basis. In addition, the FDIC's prompt corrective action standards discussed below, in effect, increase the minimum regulatory capital ratios for banking organizations in order to be considered "well-capitalized." Higher capital levels may be required if ~~warranted by the particular circumstances or risk profiles of individual institutions, or if required by the banking regulators due to the economic conditions impacting our market.~~

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~~Management~~warranted ~~believes~~by ~~that,~~the asparticular ofcircumstances ~~December 31,~~or ~~2023,~~risk ~~the~~profiles ~~Bank~~of ~~exceeded~~individual ~~its~~institutions, ~~minimum~~or ~~capital~~if ~~requirements~~required ~~and~~by ~~met~~the ~~all~~banking ~~capital~~regulators ~~adequacy~~due ~~requirements~~ to ~~which~~the iteconomic ~~was~~conditions ~~subject~~impacting ~~under~~our ~~the Basel III Rules~~market.

Management believes that, as of December 31, 2024, the Bank exceeded its minimum capital requirements and met all capital adequacy requirements to which it was subject under the Basel III Rules.

Prompt Corrective Action

The federal banking agencies define five categories in which an insured depository institution will be placed, based on the level of its capital ratios: "well-capitalized," "adequately capitalized," "undercapitalized," "significantly undercapitalized" and "critically undercapitalized." Insured depository institutions are required to meet the following capital levels in order to qualify as "well-capitalized:" (i) a Total risk-based capital ratio of 10%; (ii) a Tier 1 risk-based capital ratio of 8%; (iii) a Tier 1 leverage ratio of 5%; and (iv) a CET1 risk-based capital ratio of 6.5%. Accordingly, a financial institution may be considered "well-capitalized" under the prompt corrective action framework, but not satisfy the capital requirements of the Basel III Rules. Generally, a financial institution must be "well-capitalized" before the Federal Reserve Board or the FRB will approve an application by a bank holding company to acquire a bank or merge with a bank holding company. The FDIC applies the same requirement in approving bank merger applications.

A bank that may otherwise meets the minimum requirements to be classified as "well-capitalized," "adequately capitalized" or "undercapitalized" may be treated instead as though it were in the next lower capital category if the appropriate federal banking agency, after notice and opportunity for hearing, determines that an unsafe or unsound condition, or an unsafe or unsound practice, warrants such treatment. Under the prompt corrective action regulations, a bank that is deemed to be "undercapitalized" or in a lesser capital category will be required to submit to its primary federal banking regulator a capital restoration plan and to comply with the plan.

The Bank's regulatory capital ratios were in excess of the levels established for "well-capitalized" institutions as of December 31, ~~2023~~2024. As noted above, as of December 31, ~~2023~~2024, management believes the Bank satisfied all capital adequacy requirements under the Basel III Rules.

Branching

State and Federal law provides that a Massachusetts banking company may be "eligible" to submit a notice to the Division and the FDIC to establish a branch within the Commonwealth. A bank is "eligible" to submit a notice to establish a branch in the Commonwealth if: (i) the bank has received a "satisfactory" or higher CRA rating at its most recent CRA examination by the Division or federal banking regulator; (ii) the bank is "adequately capitalized" as defined under the provisions of the Federal Deposit Insurance Act and the FDIC's Capital Adequacy Regulations; and (iii) the bank has not been notified that it is in troubled condition by the Division or any federal banking regulatory agency. A bank must also make an application to the Division and FDIC to relocate or close an existing branch. The Division and the FDIC consider several factors when making a decision to approve the notice, including financial condition, capital adequacy, earnings prospects, the needs of the community, and whether competition would be adversely affected.

The Dodd-Frank Act amended the Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 (the "Riegle-Neal Act") to permit national banks and state banks to establish branches in any state if that state would permit the establishment of the branch by a state bank chartered in that state. The Bank may, therefore, also establish branches in any other state if that state would permit the establishment of a branch by a state bank chartered in that state. In this case, the Bank would also be required to file a notice with the Division, the FDIC and potentially the banking authority of the state into which the Bank intends to establish a branch.

Deposit Insurance

The FDIC insures the deposits of federally insured banks, such as the Bank, and thrifts, up to prescribed statutory limits of $250,000 for each depositor, through the DIF and safeguards the safety and soundness of the banking and thrift industries. The amount of FDIC assessments paid by each insured depository institution is based on its relative risk of default as measured by regulatory capital ratios and other supervisory factors.

At least semi-annually, the FDIC will update its loss and income projections for the DIF and, if needed, will increase or decrease assessment rates, following notice-and-comment rulemaking, if required. However, if there are additional bank or financial institution failures or if the FDIC otherwise determines to increase assessment rates, the Bank may be required to pay higher FDIC insurance premiums. Additionally, under the FDIA, the FDIC may terminate deposit insurance upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has

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higher FDIC insurance premiums. Additionally, under the FDIA, the FDIC may terminate deposit insurance upon a finding that the institution has engaged in unsafe and unsound practices, is in an unsafe or unsound condition to continue operations, or has violated any applicable law, regulation, rule, order or condition imposed by the FDIC.

The Bank is generally unable to control the amount of premiums that it is required to pay for FDIC insurance. In connection with the Dodd-Frank Act's requirement that insurance assessments be based on assets, in July 2016, the FDIC redefined its deposit insurance premium assessment base to be an institution's average consolidated total assets minus average tangible equity and revised its deposit insurance assessment rate schedule. Assessments for institutions with assets of less than $10 billion, such as Enterprise Bank, are based on financial measures and supervisory ratings derived from statistical modeling estimating the probability of an institution's failure within three years. ~~The FDIC is considering, and is expected to adopt, a final rule to apply the CBLR framework to the deposit insurance assessment system.~~

On October 18, 2022, the FDIC adopted a final rule applicable to all insured depository institutions increasing initial base deposit insurance assessment rate schedules by 2 basis points, beginning in the first quarterly assessment period of 2023. The FDIC ~~also issued a notice maintaining a DIF reserve ratio of 2.0% for 2023. The increase in assessment~~ rate ~~schedules~~schedule is intended to increase the likelihood that the DIF reserve ratio reaches the statutory minimum of 1.35% by September 30, 2028, the statutory deadline set by the Dodd-Frank Act. The ~~new~~ assessment rate schedules will remain in effect unless and until the DIF reserve ratio meets or exceeds 2.0% in order to support growth in the DIF in progressing toward the FDIC's long-term goal of a 2.0% designated reserve ratio for the DIF. FDIC staff may in the future recommend additional assessment rate adjustments if deemed necessary.

Restrictions on Dividends and Other Capital Distributions

Both Massachusetts and federal law limit the payment of dividends by the Bank. Under FDIC regulations and applicable Massachusetts law, the dollar amount of dividends and any other capital distributions that the Bank may make depends upon its capital position and recent net income. Any dividend payment that would exceed the total of the Bank's net profits for the current year plus its retained net profits of the preceding two years would require the Massachusetts Division of Banks' approval. The Massachusetts banking statues define the term "net profits" to mean the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets after deducting from such total all current operating expenses, actual losses, accrued dividends on any preferred stock and all federal and state taxes. Applicable provisions of the FDIA also prohibit a bank from paying any dividends on its capital stock if the bank is in default on the payment of any assessment to the FDIC or if the payment of dividends would otherwise cause the bank to become "undercapitalized." If the Bank's capital becomes impaired or the FDIC or Division otherwise determines that the Bank needs more than normal supervision, the Bank may be prohibited or otherwise limited from paying dividends or making capital distributions to the Company. Consequently, any restrictions on the ability of the Bank to pay dividends to the Company may, in turn, restrict the ability of the Company to pay dividends to its shareholders.

Community Reinvestment Act

The CRA and the regulations issued thereunder are intended to encourage banks to help meet the credit needs of their entire assessment area, including low- and moderate-income neighborhoods, consistent with the safe and sound operations of such banks. The CRA requires that the FDIC and the Division evaluate the record of each financial institution in meeting such credit needs. The CRA evaluation is also considered by the bank regulatory agencies in evaluating approvals for mergers, acquisitions, and applications to open, relocate or close a branch or facility. Failure to adequately meet the criteria within CRA guidelines could impose additional requirements and limitations on the Bank. Additionally, the Bank must publicly disclose the ability to request the Bank's CRA Performance Evaluation and other various related documents. The Bank received a rating of "High Satisfactory" by the Division and "Satisfactory" by the FDIC on its most recent CRA examination.

On October 24, 2023, the federal banking agencies adopted a final rule to modernize regulations implementing the CRA. Under the final rule, (1) the federal banking agencies will evaluate bank performance across the varied activities they conduct and communities in which they operate in order to encourage banks to expand access to credit, investment, and banking services in low- and moderate-income communities, (2) the CRA regulations are updated to evaluate lending outside traditional assessment areas generated by the growth of non-branch delivery systems, such as online and mobile banking, branchless banking, and hybrid models, (3) a new metrics-based approach was adopted to evaluate bank retail lending and community development financing, using benchmarks based on peer and demographic data, and (4) CRA evaluations and data collection are tailored according to bank size and type. In addition, the final rule also exempts small and intermediate banks from new data collection and reporting requirements that apply to banks with assets of at least $2 billion, such as the Bank, and limits certain new data requirements to large banks with assets greater than $10 billion. Most provisions of the final rule will become effective on January 1, 2026, and the data reporting requirements will become effective on January 1, 2027.

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Restrictions on Transactions with Affiliates and Loans to Insiders

Transactions between the Bank and its affiliates are subject to the provisions of Section 23A and 23B of the Federal Reserve Act (the "Affiliates Act"), and the Federal Reserve Board's Regulation W, as such provisions are made applicable to state non-member banks by Section 18(i) of the Federal Deposit Insurance Act. Affiliates of a bank include, among other entities, the bank's holding company and companies that are under common control with the bank.

These provisions place limits on the amount of loans or extensions of credit and investment in affiliates; assets that may be purchased; extensions of credit to third parties collateralized by securities or obligation; and the guarantee, acceptance or letter of credit issued on behalf of an affiliate.

The total amount of the above transactions is limited in amount, as to any one affiliate, to 10% of the Bank's capital and surplus and, as to all affiliates combined, to 20% of its capital and surplus. In addition to the limitation on the amount of these transactions, each of the above transactions must also meet specified collateral requirements and the types of permissible collateral may be limited. The Bank must also comply with other provisions designed to avoid the purchase or acquisition of low-quality assets from affiliates.

The Bank is also subject to Section 23B of the Federal Reserve Act which, among other things, prohibits the Bank from engaging in any transaction with an affiliate unless the transaction is on terms substantially the same, or at least as favorable to the Bank or its subsidiaries, as those prevailing at the time for comparable transactions with non-affiliated companies. The Federal Reserve Board has also issued Regulation W which codifies prior regulations under the Affiliates Act and interpretive guidance with respect to affiliate transactions.

Under both Massachusetts and federal law, including Section 22(h) of the Federal Reserve Act and Regulation O promulgated by the Federal Reserve thereunder, the Bank is also subject to restrictions on extensions of credit to its executive officers, directors, principal shareholders and their related interests. These extensions of credit (i) must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with third parties, (ii) must follow the credit underwriting procedures at least as stringent as those applicable to comparable transactions with third parties, and (iii) must not involve more than the normal risk of repayment or present other unfavorable features. In addition, these extensions of credit may not exceed, together with all other outstanding loans to such persons and affiliated entities, the Bank's total capital and surplus. Any extension of credit to insiders above specified amounts must receive the prior approval of the Bank's board of directors. Any violation of these restrictions may result in the assessment of substantial civil monetary penalties on the Bank or any officer, director, employee, agent or other person participating in the conduct of the affairs of the Bank, the imposition of a cease-and-desist order, and other regulatory sanctions.

Concentrated Commercial Real Estate Lending Regulations

The federal banking agencies, including the FDIC, have promulgated guidance governing financial institutions with concentrations in commercial real estate lending. The guidance provides that a bank has a concentration in commercial real estate lending if (i) total reported loans for construction, land development, and other land represent 100% or more of total capital or (ii) total reported loans secured by ~~multifamily~~multi-family and non-farm nonresidential properties (excluding loans secured by owner-occupied properties) and loans for construction, land development, and other land represent 300% or more of total capital and the bank's commercial real estate loan portfolio has increased 50% or more during the prior 36 months. If a concentration is present, management must employ heightened risk management practices that address the following key elements: including board and management oversight and strategic planning, portfolio management, development of underwriting standards, risk assessment and monitoring through market analysis and stress testing, and maintenance of increased capital levels as needed to support the level of commercial real estate lending. As of December 31, ~~2023~~2024, the Bank's concentrations of commercial real estate loans fell slightly above the established levels and the Company believes its credit risk administration to be consistent with heightened risk management regulatory guidance.

The Basel III Rules also require loans categorized as "high-volatility commercial real estate," or HVCRE, to be assigned a 150% risk weighting and require additional capital support. However, the EGRRCPA prohibits federal banking regulators from imposing this higher capital standard on HVCRE exposures unless they are for higher risk loans for acquisition, development or construction, or ADC, and clarifying ADC status.

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The Economic Growth, Regulatory Relief and Consumer Protection Act of 2018

On May 24, 2018, the EGRRCPA was enacted, which repeals or modifies certain provisions of the Dodd-Frank Act and eases regulations on all but the largest banks. The EGRRCPA's provisions—for which banking agencies have now issued certain corresponding guidance documents and/or proposed or final rules—include, among other things: (i) creating a new category of "qualified mortgages" presumed to satisfy ability-to-repay requirements for loans that meet certain criteria and are held in portfolio by banks with less than $10 billion in assets; (ii) not requiring appraisals for certain transactions valued at less than $400,000 in rural areas; (iii) exempting banks that originate fewer than 500 open-end and 500 closed-end mortgages from the Home Mortgage Disclosure Act's expanded data disclosures; (iv) clarifying that, subject to various conditions, reciprocal deposits of another depository institution obtained using a deposit broker through a deposit placement network for purposes of obtaining maximum deposit insurance would not be considered brokered deposits subject to the FDIC's brokered-deposit regulations; and (v) simplifying capital calculations by requiring regulators to establish for institutions under $10 billion in assets a community bank leverage ratio (Tier 1 capital to average consolidated assets) at a percentage not less than 8% and not greater than 10% that such institutions may elect to replace the general applicable risk-based capital requirements for determining well-capitalized status. For those regulations that have been implemented, most will have little to no impact on the Company. However, the Company may be impacted by future agency rulemaking in connection with implementation of the EGRRCPA and it is difficult to anticipate the continued impact this expansive legislation may have on the Company, its customers and the financial industry generally.

For more information on the EGRRCPA, please see the following sections "Permissible Activities," "Community Bank Leverage Ratio," and "Concentrated Commercial Real Estate Lending Regulations," above, and "Consumer Financial Protection Bureau" and "HMDA," below.

Consumer Financial Protection Bureau

The CFPB was created under the Dodd-Frank Act to centralize responsibility for consumer financial protection with broad rulemaking, supervision and enforcement authority for a wide range of consumer protection laws that would apply to all banks and thrifts, including the Equal Credit Opportunity Act, Truth-in Lending Act, Real Estate Settlement Procedures Act, Fair Credit Reporting Act, Fair Debt Collection Act, the Consumer Financial Privacy provisions of the Gramm-Leach-Bliley Act and certain other statutes. Significant recent CFPB developments include:

•continued focus on fair lending, including promoting racial and economic equity for underserved, vulnerable and marginalized communities;

•focused efforts on enforcing certain compliance obligations the CFPB deems a priority, such as automobile loan servicing, debt collection, deposit, overdraft, non-sufficient funds, representment fees and other services fees, mortgage origination and servicing, and remittances, among others; and

•rulemaking plans concerning, among others, consumers' access to their financial information and requirements for financial institutions to collect, report and make public certain information concerning credit applications made by women-owned, minority-owned and small businesses.

Banking institutions with total assets of $10 billion or less, such as the Bank, remain subject to the supervision and enforcement of their primary federal banking regulator with respect to the federal consumer financial protection laws and such additional regulations as may be adopted by the CFPB.

The "Ability-to-Repay/Qualified Mortgage" rules, which amended TILA's implementing regulation, Regulation Z generally requires creditors to make a reasonable, good faith determination of a consumer's ability to repay for certain consumer credit transactions secured by a dwelling and establishes certain protections from liability under this requirement for "qualified mortgages." The EGRRCPA provides that for certain insured depository institutions and insured credit unions with less than $10 billion in total consolidated assets, mortgage loans that are originated and retained in portfolio will automatically be deemed to satisfy the "ability to repay" requirement. To qualify for this treatment, the insured depository institutions and credit unions must meet conditions relating to prepayment penalties, points and fees, negative amortization, interest-only features and documentation among other conditions.

The Dodd-Frank Act implemented significant increases in the regulation of mortgage lending and servicing by banks and non-banks. In particular, the Dodd-Frank Act includes, among other things, (i) requirements that mortgage originators act in the best interests of a consumer and seek to ensure that a consumer will have the capacity to repay a loan that the consumer enters into; (ii) requirements that mortgage originators be properly qualified, registered, and licensed and comply with any regulations

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designed by the CFPB to monitor their operations; (iii) mandates of comprehensive additional and enhanced residential mortgage loan related disclosures, both prior to loan origination and after; and (iv) mandates of additional appraisal practices for loans secured by residential dwellings, including potential additional appraisals at the banks' cost.

Home Mortgage Disclosure Act

On October 15, 2015, pursuant to Section 1094 of the Dodd-Frank Act, the CFPB issued amended rules in regard to the collection, reporting and disclosure of certain residential mortgage transactions under the Home Mortgage Disclosure Act (the "HMDA Rules"). The Dodd-Frank Act mandated additional loan data collection points in addition to authorizing the Bureau to require other data collection points under implementing Regulation C. The HMDA Rules adopted a uniform loan volume threshold for all financial institutions, modifies the types of transactions that are subject to collection and reporting, expands the loan data information being collected and reported, and modifies procedures for annual submission and annual public disclosures. EGRRCPA amended provisions of the HMDA Rules to exempt certain insured institutions from most of the expanded data collection requirements required of the Dodd-Frank Act. The CFPB further amended the HMDA Rules in April 2020 so that, effective January 1, 2022, institutions originating fewer than 100 dwelling secured closed-end mortgage loans or fewer than 200 dwelling secured open-end lines are exempt from the expanded data collection requirements. On February 1, 2023, the Office of the Comptroller of the Currency issued OCC Bulletin 2023-5 which clarified that, following a recent court decision vacating the 2020 HMDA Final Rule as to the loan volume reporting threshold for closed-end mortgage loans, the loan origination threshold for reporting HMDA data on closed-end mortgage loans reverted to the 25 loan threshold established by the 2015 HMDA Final Rule. The Bank does not receive this reporting relief based on the number of ~~dwellings~~dwelling secured mortgage loans reported annually.

UDAP and UDAAP

Banking regulatory agencies have increasingly used a general consumer protection statute to address "unfair," "deceptive" or "abusive" acts and business practices that may not necessarily fall directly under the purview of a specific banking or consumer finance law. Section 5 of the Federal Trade Commission Act, referred to as the FTC Act, is the primary federal law that prohibits unfair or deceptive acts or practices, referred to as UDAP, and unfair methods of competition in or affecting commerce. "Unjustified consumer injury" is the principal focus of the FTC Act. UDAP laws and regulations were expanded under the Dodd-Frank Act to apply to "unfair, deceptive or abusive acts or practices," referred to as UDAAP and were delegated to CFPB for rulemaking. The federal banking agencies have the authority to enforce such rules and regulations. Under the Dodd-Frank Act, CFPB looks to various factors to assess whether an act or practice unfair, including whether it causes or is likely to cause substantial injury to consumers, the injury is not reasonably avoidable by consumers, and the injury is not outweighed by countervailing benefits to consumers or to competition. A key focus of CFPB is whether an act or practice hinders a consumer's decision-making.

Incentive Compensation

InThe ~~June 2010, the~~ Federal Reserve Board, the Office of the Comptroller of the Currency and the FDIC have issued comprehensive ~~final~~ guidance on incentive compensation policies intended to ensure that the incentive compensation policies of banking organizations do not undermine the safety and soundness of such organizations by encouraging excessive risk-taking. The guidance, which covers all employees that have the ability to materially affect the risk profile of an organization, either individually or as part of a group, is based upon the key principles that a banking organization's incentive compensation arrangements should (i) provide incentives that do not encourage risk-taking beyond the organization's ability to effectively identify and manage risks, (ii) be compatible with effective internal controls and risk management, and (iii) be supported by strong corporate governance, including active and effective oversight by the organization's board of directors.

The Federal Reserve Board will review, as part of the regular, risk-focused examination process, the incentive compensation arrangements of banking organizations, such as the Company, that are not "large, complex banking organizations." The findings of the supervisory initiatives will be included in reports of examination. Enforcement actions may be taken against a banking organization if its incentive compensation arrangements, or related risk management control or governance processes, pose a risk to the organization's safety and soundness and the organization is not taking prompt and effective measures to correct the deficiencies.

In addition, publicly traded companies are required by the SEC to give shareholders a non-binding vote on executive compensation at least every three years and on so-called "golden parachute" payments in connection with approvals of mergers and acquisitions unless previously voted on by shareholders. Also, certain publicly traded companies are required to disclose

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the ratio of the compensation of their CEO to the median compensation of its employees. The Company addresses these votes and disclosures in its annual ~~Proxy~~meeting ~~Statement~~proxy statement.

The Dodd-Frank Act directs the federal banking regulators to promulgate rules prohibiting excessive compensation paid to executives of depository institutions and their holding companies with assets in excess of $1 billion, regardless of whether the company is publicly traded or not. In May 2016, the federal banking regulators, joined by the SEC, proposed such a rule that is tailored based on the asset size of the institution. All covered financial institutions would be subject to a prohibition on paying compensation, fees, and benefits that are "unreasonable" or "disproportionate" to the value of the services performed by a person covered by the proposed rule (generally, senior executive officers and employees who are significant risk-takers). As of the date of this Form 10-K, the federal banking regulators have not yet implemented a final rule with respect to excessive compensation paid to executives of depository institutions and their holding companies. Finally, the Dodd-Frank Act gives the SEC authority to prohibit broker discretionary voting on elections of directors and executive compensation matters.

In August 2022, the SEC adopted the final "pay-for-performance" rule mandated by the Dodd-Frank Act. Among other disclosure requirements, the rule requires companies to disclose the relationships among named executive officer compensation "actually paid," total shareholder return and certain financial performance measures that the company uses to link compensation to company performance for its five most recent fiscal years. The rule first applied to disclosures in the Company's proxy statement for the 2023 annual meeting of shareholders.

In October 2022, the SEC adopted a final rule directing national securities exchanges and associations, including the NASDAQ, to implement listing standards that require listed companies to adopt policies mandating the recovery or "clawback" of excess incentive-based compensation earned by a current or former executive officer during the three fiscal years preceding the date the listed company is required to prepare an accounting restatement, including to correct an error that would result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period. In accordance with Rule 10D-1 promulgated by the SEC under the Exchange Act and Nasdaq Listing Rule 5608, the Compensation and Human Resources Committee of the Board of Directors adopted and implemented an Incentive Award Recoupment Policy, effective as of October 2, 2023. The Incentive Award Recoupment Policy can be found within Item 15, "Exhibits, Financial Statement Schedules," of this Form 10-K.

Technology Risk Management and Consumer Privacy

State and federal banking regulators have issued various policy statements emphasizing the importance of technology risk management and supervision in evaluating the safety and soundness of depository institutions with respect to banks that contract with third-party vendors to provide data processing and core banking functions. The use of technology-related products, services, delivery channels and processes expose a bank to various risks, particularly operational, privacy, cyber and information security, strategic, reputation and compliance risk. Banks are generally expected to prudently manage technology-related risks as part of their comprehensive risk management policies by identifying, measuring, monitoring and controlling risks associated with the use of technology.

Under Section 501 of the Gramm-Leach-Bliley Act, and its implementing regulations, the federal banking agencies have established appropriate standards for financial institutions regarding the implementation of safeguards to protect the security and confidentiality of customer records and information, protection against any anticipated threats or hazards to the security or integrity of such records and protection against unauthorized access to or use of such records or information in a way that could result in substantial harm or inconvenience to a customer. Under these rules, all financial institutions are required to implement a comprehensive written information security program that includes administrative, technical and physical safeguards relating to customer information. In addition, Massachusetts has established Standards for the Protection of Personal Information which create minimum standards to be met in connection with the safeguarding of personal information and outline the content and timing of disclosures required following a system breach or compromise.

Beginning on May 1, 2022, a bank holding company, such as the Company, and an FDIC-supervised depository institution, such as the Bank, are required to notify the Federal Reserve or FDIC, respectively, as soon as possible and no later than 36 hours after a determination that a computer-security incident that rises to the level of a notification incident has occurred.

On July 26, 2023, the SEC adopted final rules that require public companies to promptly disclose material cybersecurity incidents in a Current Report on Form 8-K and detailed information regarding their cybersecurity risk management, strategy, and governance on an annual basis in its Annual Reports on Form 10-K. Companies are required to report on Form 8-K any cybersecurity incident they determine to be material within four business days of making that determination.

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Under the Gramm-Leach-Bliley Act, all financial institutions must develop initial and annual privacy notices that are provided to its customers describing in general terms, the bank's information sharing practices to affiliated and non-affiliated third parties and the customer's ability to opt-out of certain information sharing practices. Limitations are placed on the extent to which a bank can disclose an account number or access code for credit card, deposit or transaction accounts to any unaffiliated third-party for use in marketing.

Bank Secrecy Act, Anti-Money Laundering Initiatives and USA PATRIOT Act

Our Company and the Bank are also subject to the Bank Secrecy Act, as amended by the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001 (the "USA PATRIOT Act") and as further amended by the National Defense Authorization Act for Fiscal Year 2021 (the "National Defense Authorization Act"), which gives the federal government powers to address money laundering and terrorist threats through enhanced domestic security measures, expanded surveillance powers, and mandatory transaction reporting obligations. The Bank Secrecy Act and USA PATRIOT Act impose an affirmative obligation on the Bank to establish an anti-money laundering program designed to monitor and prohibit against certain transactions and account relationships, create due diligence standards for "know your customer;" regularly compare customer lists against lists of suspected terrorists, terrorist organizations and money launderers; report currency transactions that exceed certain thresholds; and to report other transactions determined to be suspicious. Financial institutions must take reasonable steps to conduct enhanced scrutiny of account relationships to guard against money laundering and to report any suspicious information maintained by financial institutions. The Bank Secrecy Act requires that all banking institutions develop and provide for the continued administration of a program reasonably designed to assure and monitor compliance with certain record-keeping and reporting requirements regarding both domestic and international currency transactions. These programs must, at a minimum, provide for a system of internal controls to assure ongoing compliance, provide for independent testing of such systems and compliance, designate individuals responsible for such compliance and provide appropriate personnel training.

The FinCEN issued a final rule regarding customer due diligence requirements for covered financial institutions in connection with their Bank Secrecy Act and Anti-Money Laundering policies~~, that became effective in May 2018~~. The ~~final~~ rule adds a requirement to understand the nature and purpose of customer relationships and identify the "beneficial owner" (25% or more ownership interest) of legal entity customers. Bank regulators routinely examine institutions for compliance with these obligations and they must consider an institution's anti-money laundering compliance when considering regulatory applications filed by the institution, including applications for bank mergers and acquisitions. The regulatory authorities have imposed "cease-and-desist" orders and civil money penalty sanctions against institutions found to be violating these obligations.

~~Further,~~The ~~on January 1, 2021, Congress passed the~~ National Defense Authorization Act, ~~which enacted the most significant overhaul of the Bank Secrecy Act and related anti-money laundering laws since the USA PATRIOT Act. Notable~~ amendments include (i) significant changes to the collection of beneficial ownership information and the establishment of a beneficial ownership registry placing responsibility to the corporate entities to report beneficial ownership information to FinCEN (which will be maintained by FinCEN and made available upon request to financial institutions); (ii) enhanced whistleblower provisions, which provide that one or more whistleblowers who voluntarily provide original information leading to the successful enforcement of violations of the anti-money laundering laws in any judicial or administrative action brought by the Secretary of the Treasury or the Attorney General resulting in monetary sanctions exceeding $1 million; (iii) increased penalties for violations of the Bank Secrecy Act; (iv) improvements to existing information sharing provisions that permit financial institutions to share information relating to SARs with foreign branches, subsidiaries, and affiliates (except those located in China, Russia, or certain other jurisdictions) for the purpose of combating illicit finance risks; and (v) expanded duties and powers of FinCEN. Many of the amendments, including those with respect to beneficial ownership, require the Department of Treasury and FinCEN to promulgate rules.

On September 29, 2022, FinCEN issued a final rule establishing a beneficial ownership information reporting requirement, pursuant to the CTA. The rule requires most corporations, limited liability companies, and other entities created in or registered to do business in the United States to report information about their beneficial owners-the persons who ultimately own or control the company, to FinCEN. On December 22, 2023, FinCEN issued a final rule regarding access by authorized recipients to beneficial ownership information that will be reported to FinCEN pursuant to Sec. 6403 of the CTA, which is part of the NDAA. The regulations implement strict protocols required by the CTA to protect sensitive personally identifiable information reported to FinCEN and establish the circumstances in which specified recipients have access to beneficial ownership information, along with data protection protocols and oversight mechanisms applicable to each recipient category. The disclosure of beneficial ownership information to authorized recipients in accordance with appropriate protocols and oversight will help law enforcement and national security agencies prevent and combat money laundering, terrorist financing, tax fraud, and other illicit activity, as well as protect national security.

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~~will~~In ~~help~~July ~~law~~2024, ~~enforcement~~the ~~and~~federal ~~national~~banking ~~security~~ agencies ~~prevent and combat money laundering~~, ~~terrorist~~including ~~financing,~~the ~~tax~~Federal ~~fraud,~~Reserve and ~~other illicit activity~~OCC, asproposed ~~well~~amendments asto ~~protect national security.~~ update

the requirements for supervised institutions to establish, implement and maintain effective, risk-based and reasonably

designed Anti-Money Laundering and countering the financing of terrorism programs. The proposed amendments would require supervised institutions to identify, evaluate and document the regulated institution's money laundering, terrorist financing and other illicit finance activity risks, as well as consider, as appropriate, FinCEN’s published national Anti-Money Laundering /CFT priorities.

Other Operations and Consumer Compliance Laws

The Bank must comply with numerous other federal anti-money laundering and consumer protection statutes and implementing regulations, including but not limited to the Truth in Savings Act, Electronic Funds Transfer Act, Expedited Funds Availability Act, the Equal Credit Opportunity Act, the Federal Housing Act, the National Flood Insurance Act and various other federal and state privacy protection laws. Failure to comply in any material respect with any of these laws could subject the Bank to lawsuits and could also result in administrative penalties, including fines and reimbursements. The Company and the Bank are also subject to federal and state laws prohibiting unfair or fraudulent business practices, untrue or misleading advertising and unfair competition. These laws and regulations mandate certain disclosure requirements and regulate the manner in which financial institutions must deal with customers when taking deposits, making loans, collecting loans, and providing other services.

Environmental Laws Potentially Impacting the Bank

We are subject to state and federal environmental laws and regulations. The CERCLA is a federal statute that generally imposes strict liability on all prior and present "owners and operators" of sites containing hazardous waste. However, Congress acted to protect secured creditors by providing that the term "owner and operator" excludes a person whose ownership is limited to protecting its security interest in the site. Since the enactment of the CERCLA, this "secured creditor exemption" has been the subject of judicial interpretations which have left open the possibility that lenders could be liable for cleanup costs on contaminated property that they hold as collateral for a loan, which costs often substantially exceed the value of the property.

Other Pending and Proposed Legislation

From time to time, various legislative and regulatory initiatives are introduced in Congress, as well as by regulatory agencies. Such initiatives may include proposals to expand or contract the powers of bank holding companies and depository institutions or proposals to substantially change the financial institution regulatory system. Such legislation could change banking statutes and the operating environment of the Company or Bank in substantial and unpredictable ways. If enacted, such legislation could increase or decrease the cost of doing business, limit or expand permissible activities or affect the competitive balance among banks, savings associations, credit unions, and other financial institutions. The Company cannot predict whether any such legislation will be enacted, and, if enacted, the effect that it, or any implementing regulations, would have on the financial condition or results of operations of the Company. A change in statutes, regulations or regulatory policies applicable to the company or our subsidiaries could have a material effect on the Company's business, financial condition, and results of operations.

The Company maintains a Compliance Management Program designed to meet regulatory and legislative requirements. See Key Risk Areas, below under the heading "Risk Management Framework."

Risk Management Framework

In addition to the risks discussed below, numerous other factors that could adversely affect the Company's future results of operations and financial condition, and its reputation and business model are addressed in Item 1A, "Risk Factors," of this Form 10-K. This Risk Management Framework discussion should be read in conjunction with Item 1A and Item 1C, "Cybersecurity," of this Form 10-K.

Management utilizes a comprehensive enterprise risk management framework that enables a coordinated and structured approach for identifying, assessing, and managing risks across the Company and provides reasonable assurance that management has the tools, programs, people, and processes in place to support informed decision making, anticipate risks before they materialize and maintain the Company's risk profile consistent with its strategic planning, and applicable laws and regulations.

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These risks, and the decisions related thereto, include, but are not limited to: credit risk, market and interest rate risk, liquidity management, capital risk, information technology and cybersecurity risk, legal and regulatory compliance risk, corporate governance, internal control over financial reporting, reputational risk, strategic risk, compensation risk, physical security, loss and fraud prevention, policy reviews, third-party risk management ~~(direct~~ and ~~indirect vendors) and~~ contract management, business continuity and succession planning, and short and long-term capital projects and facility planning.

The Company promotes proactive risk management by all Enterprise employees with clear ownership and accountability. Managers in each line of business have responsibility for identifying, assessing, and managing the risks in their areas. The Risk Management department is responsible for providing guidance, oversight, and input on remediation to business lines to provide reasonable assurance that risk assessments and mitigating controls and procedures are properly designed and functioning within their areas. The Risk Management department also independently monitors operational risk, including information security, third-party risk management, disaster recovery and business continuity planning. Periodically, management reports and risk assessments are provided to the Board or its committees relating to the Bank's risk profile and the adequacy of the risk management program. In addition, the Internal Audit department, which is independent of management, through reviews and testing, confirms appropriate risk management controls, processes and systems are in place and functioning effectively.

The Company also maintains a package of commercial insurance policies with national insurers, which provides for a broad range of insurance coverage for a variety of risk factors, at levels deemed appropriate by management. Insurance policies are reviewed annually, or as circumstances change, by management for necessary updates and adjustments in coverage, in addition to reviews by an independent third-party and the Audit Committee of the Board.

Key Risk Areas

Operational risk includes the threat of loss from inadequate or failed internal processes, people, systems, or external events, due to, among other things: fraud or error; the inability to deliver products or services; failure to maintain a competitive position; lack of, or insufficient information security, cybersecurity, or physical security; inadequate procedures or controls followed by third-party service providers; or violations of ethical standards. In addition to ongoing employee training, and employee and customer awareness campaigns, controls to manage operational risk include, but are not limited to, technology administration, cyber and information security, third-party risk management, and disaster recovery and business continuity planning.

The Company's technology administration includes policies and guidelines for the design, procurement, installation, management and acceptable use of hardware, software, and network devices as well as third-party hosted and cloud-based solutions. The Company's project management standards are designed to provide risk-based oversight, coordinate and communicate ideas, and to prioritize and manage project implementation in a manner consistent with corporate objectives.

Information Security, third-party risk management, cybersecurity governance and the incident response plan are reviewed in detail in Item 1C, "Cybersecurity Risk Management and Strategy," of this Form 10-K, below. The Technology & Information Security Committee of the Board oversees the technology and cybersecurity strategies and their alignment with business strategies. The Committee also oversees the effectiveness of the information security program and monitors the results of third-party testing and risk assessments and responses to breaches of customer data, among other project management, cybersecurity governance, and business continuity oversight functions.

The Company's Disaster Recovery and Business Continuity Program combined with the Company's Pandemic Plan (the "plans") provide the information and procedures required to enable a rapid recovery from an occurrence that would disable the Company's operations for an extended period, due to circumstances such as: loss of personnel; loss of data and/or loss of access to, or the physical destruction or damage of facilities, infrastructure or systems; or denial of access to our systems or information by outside parties. The plans, which are reviewed annually, establish responsibility for assessing a disruption of business, contains alternative strategies for the continuance of critical business functions during an emergency, assigns responsibility for restoring services, and sets recovery point and time objectives by which critical services will be restored. A bank-owned and maintained secondary data center location provides the Company with back-up network processing capabilities if needed. IT Disaster Recovery plans are tested regularly to validate that procedures and backup systems are operating as intended through tabletop exercises, walkthroughs, infrastructure and mainframe failover tests.

The Company maintains a ~~CMP~~Compliance Management Program designed to meet regulatory and legislative compliance requirements. The CMP provides a framework for tracking and implementing regulatory changes, monitoring the effectiveness of policies and procedures, conducting compliance risk assessments, managing customer complaints, and educating employees in matters relating to regulatory compliance. The Audit Committee of the Board oversees the effectiveness of the CMP.

~~Credit risk management is reviewed in detail in Item 7, "Management's Discussion and Analysis of Financial Condition and~~ 25

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~~Results~~effectiveness of ~~Operations~~policies and procedures," inconducting ~~the~~compliance ~~section~~risk ~~"Loans~~assessments," ~~under~~managing ~~the~~customer ~~heading~~complaints, ~~"Credit~~and ~~Risk"~~educating ofemployees ~~this~~in ~~Form~~matters ~~10-K~~relating to regulatory compliance. The ~~Loan~~Audit Committee of the Board oversees the effectiveness of ~~credit~~the ~~risk management~~CMP.

Credit risk management is reviewed in detail in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the section "Loans," under the heading "Credit Risk" of this Form 10-K. The Loan Committee of the Board oversees the effectiveness of credit risk management.

Liquidity management is reviewed in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," in the section entitled "Financial Condition" under the heading "Liquidity" of this Form 10-K.

Interest rate risk is reviewed in detail under Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," of this Form 10-K below. The Board of Directors oversees the Company's asset–liability management, which includes managing interest rate risk and liquidity.

For information regarding capital planning, current capital framework requirements applicable to the Company and the Bank and their respective capital levels at December 31, ~~2023~~2024, see the section within Item 1, "Business," entitled "Capital Resources" and the sections within "Supervision and Regulation" entitled "Capital Requirements" and "Capital Requirements under Basel III" and for the Bank "Capital Adequacy Requirements" of this Form 10-K and also see Note 12, "Shareholders' Equity," to the consolidated financial statements contained in Item 8, "Financial Statements and Supplementary Data," of this Form 10-K.

The Company maintains a set of internal controls over financial reporting designed to provide reasonable assurance to management that the information required to be disclosed in reports it files with or furnishes to the SEC is prepared and fairly presented based on properly recorded, processed, and summarized information. The Audit Committee of the Board oversees the effectiveness of the internal control over financial reporting. See Item 9A, "Controls and Procedures," of this Form 10-K, below, for management's reports on its evaluation of disclosure controls and internal control over financial reporting.

Any system of controls or contingency plan, however well designed and operated, is based in part on certain assumptions and has inherent limitations and may not prevent or detect all risks, and therefore can provide only reasonable, not absolute, assurances that the objectives of the system are met. An overview of these risks, among others, related to the Company, are outlined in Part I, Item 1A, "Risk Factors," in this Form 10-K, below.

Item 1A.Risk Factors

An investment in the Company's common stock is subject to a variety of risks and uncertainties including, without limitation, those set forth below, any of which could cause the Company's actual results to vary materially from recent results or from the other forward-looking statements that the Company may make from time to time in news releases, periodic reports and other written or oral communications. This Form 10-K is qualified in its entirety by these risk factors.

Realization of any of the risks outlined in the following sections, the Company's inability to identify, respond and correct a

breakdown in the integrity of the design or functioning of the Company’s internal controls and contingency plan, or additional risks and uncertainties that management is not aware of, or may currently deem immaterial, or unanticipated Merger related costs may impair the Company's business in a variety of ways, including, but not limited to, any one or a combination of the following consequences: higher than anticipated Merger related costs or penalties if Enterprise was to cancel the Merger, loss of assets; an interruption in the ability to conduct business and process transactions; loss of customer business; loss of key personnel; expose customers' personal information to unauthorized parties; additional regulatory scrutiny and potential enforcement actions and/or penalties against the Company or the Bank; damage the Company's reputation; expose the Company to civil litigation and possible financial liability; result in unanticipated charges against capital; increase operational costs; decrease revenue; restrict funding sources, which could adversely impact the Company's ability to meet cash needs; force the Company to liquidate investments or other assets; limit growth and branch network expansion; close locations or reduce staffing; or limit permissible activities. As a result, the Company's overall business, financial condition, results of operations, capital position, ability to pay dividends on outstanding common stock, liquidity position, and financial performance could be materially and adversely affected. If this were to happen, the value of the Company's common stock could decline significantly, and shareholders could lose some or all their investment.

The material risks and uncertainties that management believes may affect the Company are outlined below. These risks and uncertainties are not listed in any order of priority and are not necessarily the only ones facing the Company. 26

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RISK MANAGEMENT CONTROLS

Risk Management Controls and Procedures Could Fail or Be Circumvented

Management regularly reviews and updates the Company's internal controls, corporate governance policies, Information Security Program, compensation policies, Code of Business Conduct and Ethics and security controls to prevent and detect errors and potential monetary losses, loss of confidential information and data, denial of service attacks and loss of physical assets by theft, malicious destruction or damage, fraud, or robbery from both internal and external, physical or cyber sources.

The Company is at risk of ineffective design of internal controls, any circumvention of the Company's internal controls and procedures, whether intentional or unintentional, or failure to comply with regulations related to controls and procedures, or failure to adequately execute controls and procedures, whether by employees, management, directors, or external elements, or any illegal activity conducted by a Bank customer or employee.

~~ECONOMICS~~RISKS &RELATED ~~FINANCIAL~~TO ~~MARKETS~~THE MERGER

Because the market price of Independent common stock will fluctuate, Enterprise shareholders cannot be sure of the trading price of the stock portion of the Merger Consideration they will receive.

In the Merger, each share of Enterprise common stock issued and outstanding immediately prior to the effective time, except for (i) shares held as treasury stock or (ii) owned directly by Independent (other than, in the case of (ii), shares held in trust or custodial accounts, managed accounts and the like or shares held in satisfaction of a debt previously contracted), will be converted into the right to receive (i) 0.60 of a share of Independent common stock and (ii) $2.00 in cash. This exchange ratio is fixed and will not be adjusted for changes in the market price of either Independent common stock or Enterprise common stock. Changes in the price of Independent common stock between now and the time of the Merger will affect the value that Enterprise shareholders will receive in the Merger. Neither Independent nor Enterprise is permitted to terminate the Merger Agreement as a result of any increase or decrease in the market price of Independent common stock or Enterprise common stock.

Stock price changes may result from a variety of factors, including general market and economic conditions, changes in Independent’s businesses, operations and prospects, and regulatory considerations, many of which are beyond Enterprise’s and Independent’s control. At the time of the Enterprise special meeting to vote on the Merger, Enterprise shareholders will not know the market value of the consideration that Enterprise shareholders will receive at the effective time. You should obtain current market quotations for shares of Independent common stock and for shares of Enterprise common stock.

The market price of Independent common stock after the Merger may be affected by factors different from those currently affecting the shares of Enterprise common stock or Independent common stock.

In the Merger, Enterprise shareholders will become Independent shareholders. Independent’s business differs from that of Enterprise. Accordingly, the results of operations of Independent and the market price of Independent common stock after the completion of the Merger may be affected by factors different from those currently affecting the independent results of operations of each of Independent and Enterprise.

Enterprise will be subject to business uncertainties and contractual restrictions while the Merger is pending.

Uncertainty about the effect of the Merger on employees and customers may have an adverse effect on Enterprise and, consequently, on Independent. These uncertainties may impair Enterprise’s ability to attract, retain and motivate key personnel until the Merger is consummated, and could cause customers and others that deal with Enterprise to seek to change existing business relationships with Enterprise. Retention of certain employees may be challenging during the pendency of the Merger, as certain employees may experience uncertainty about their future roles with Independent. If key employees depart because of issues relating to the uncertainty or difficulty of integration or a desire not to remain with Independent, Independent’s business following the Merger could be harmed. In addition, the Merger Agreement restricts Enterprise from taking certain actions without the consent of Independent until the Merger occurs, and generally requires Enterprise to continue its operations in the ordinary course, until completion of the Merger. These restrictions may prevent Independent and Enterprise from pursuing attractive business opportunities that may arise prior to the completion of the Merger.

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Independent may fail to realize all of the anticipated benefits of the Merger, particularly if the integration of Independent’s and Enterprise’s businesses is more difficult than expected.

The success of the Merger will depend, in part, on our ability to successfully combine the businesses of Independent and Enterprise. Independent may fail to realize some or all of the anticipated benefits of the transaction if the integration process takes longer or is more costly than expected. Furthermore, any number of unanticipated adverse occurrences for either the business of Enterprise or Independent may cause us to fail to realize some or all of the expected benefits. The integration process could result in the loss of key employees, the disruption of each company’s ongoing businesses or inconsistencies in standards, controls, procedures and policies that adversely affect our ability to maintain relationships with clients, customers, depositors and employees or to achieve the anticipated benefits of the Merger. Each of these issues might adversely affect Independent, Enterprise or both during the transition period, resulting in adverse effects on Independent following the Merger. As a result, revenues may be lower than expected or costs may be higher than expected and the overall benefits of the Merger may not be as great as anticipated.

Independent may be unable to retain Independent and/or Enterprise personnel successfully after the Merger is completed.

The success of the Merger will depend in part on Independent’s ability to retain the talents and dedication of key employees currently employed by Independent and Enterprise. It is possible that these employees may decide not to remain with Independent or Enterprise, as applicable, while the Merger is pending or with Independent after the Merger is completed. If Independent and Enterprise are unable to retain key employees, including management, who are critical to the successful integration and future operations of the companies, Independent and Enterprise could face disruptions in their operations, loss of existing customers, loss of key knowledge, expertise or know-how and unanticipated additional recruitment costs. In addition, following the Merger, if key employees terminate their employment, Independent’s business activities may be adversely affected, and management’s attention may be diverted from successfully integrating Independent and Enterprise to hiring suitable replacements, all of which may cause Independent’s business to suffer. In addition, Independent and Enterprise may not be able to locate or retain suitable replacements for any key employees who leave either company.

Independent and Enterprise are expected to incur significant costs related to the Merger and integration.

Independent and Enterprise have incurred and expect to incur significant, non-recurring costs in connection with negotiating the Merger Agreement and closing the Merger. In addition, Independent will incur integration costs following the completion of the Merger as Independent integrates the Enterprise business, including facilities and systems consolidation costs and employment-related costs.

Although Independent and Enterprise each expect the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the business, which should allow Independent and Enterprise to offset integration-related costs over time, there can be no assurances that the expected benefits and efficiencies related to the integration of the businesses will be realized to offset these transaction and integration costs in the near term or at all. Independent and Enterprise may also incur additional costs to maintain employee morale and to retain key employees. Independent and Enterprise will also incur significant legal, financial advisory, accounting, banking and consulting fees, fees relating to regulatory filings and notices, SEC filing fees, printing and mailing fees and other costs associated with the Merger. Some of these costs are payable regardless of whether the Merger is completed.

The Merger Agreement limits Enterprise’s ability to pursue alternatives to the Merger.

The Merger Agreement contains provisions that limit Enterprise’s ability to solicit, initiate, encourage or take any actions to facilitate competing third-party proposals to acquire all or substantially all of Enterprise, subject to certain exceptions relating to the exercise of fiduciary duties by the Enterprise board of directors. These provisions, which include a $22,488,000 termination fee payable under certain circumstances, might discourage a potential competing acquirer that might have an interest in acquiring all or substantially all of Enterprise from considering or proposing that acquisition even if it were prepared to pay consideration with a higher per share market price than that proposed in the Merger, or might result in a potential competing acquirer proposing to pay a lower per share price to acquire Enterprise than it might otherwise have proposed to pay.

Regulatory approvals may not be received, may take longer to receive than expected or may impose burdensome conditions that are not presently anticipated.

Before the Merger may be completed, certain approvals or consents must be obtained from the various bank regulatory and other authorities of the United States and the Commonwealth of Massachusetts. These governmental entities, including the Federal Reserve Board, the FDIC and the Massachusetts Division of Banks, may impose conditions on the completion of

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the Merger or require changes to the terms of the Merger. While Independent and Enterprise do not currently expect that any such conditions or changes would be imposed, there can be no assurance that they will not be, and such conditions or changes could have the effect of delaying completion of the Merger or imposing additional costs on or limiting the revenues of Independent following the Merger, any of which might have a material adverse effect on Independent following the Merger. Independent is not obligated to complete the Merger if the regulatory approvals received in connection with the completion of the Merger include any conditions or restrictions that would constitute a “materially burdensome regulatory condition,” as defined in the Merger Agreement.

There can be no assurance as to whether the regulatory approvals will be received or the timing of the approvals.

Failure to complete the Merger could negatively impact the future business and financial results of Enterprise.

If the Merger is not completed for any reason, including the failure to receive the requisite Enterprise vote, the ongoing business of Enterprise may be adversely affected and Enterprise will be subject to several risks, including the following:

•Enterprise may experience negative reactions from the financial markets, including negative impacts on the market price of Enterprise common stock;

•the manner in which industry contacts, business partners and other parties perceive Enterprise may be negatively impacted, which in turn could affect Enterprise’s marketing operations or their ability to compete for new business or obtain renewals in the marketplace more broadly;

•Enterprise may experience negative reactions from employees;

•Enterprise may be required, under certain circumstances, to pay Independent a termination fee of $22,488,000 under the Merger Agreement;

•Enterprise will be required to pay certain costs relating to the Merger, whether or not the Merger is completed, such as legal, accounting, financial advisor and printing fees;

•under the Merger Agreement, Enterprise is subject to certain restrictions on the conduct of its business prior to completion of the Merger, which may adversely affect its ability to execute certain of its business strategies; and

•matters relating to the Merger may require substantial commitments of time and resources by Enterprise’s management, which could otherwise have been devoted to other opportunities that may have been beneficial to Enterprise as an independent company.

If the Merger is not completed, Enterprise cannot assure its Enterprise shareholders that the risks described above will not materialize and will not materially affect the business and financial results of Enterprise.

Enterprise shareholders will not have dissenters’ rights in the Merger.

Dissenters’ rights are statutory rights that, if applicable under law, enable Enterprise shareholders to dissent from an extraordinary transaction, such as a Merger, and to demand that the corporation pay the fair value for their shares as determined by a court in a judicial proceeding instead of receiving the consideration offered to Enterprise shareholders in connection with the extraordinary transaction. Under Section 13 of the MBCA, Enterprise shareholders do not have the right to receive the appraised value of their shares in connection with the Merger.

Shareholder litigation could prevent or delay the completion of the Merger or otherwise negatively impact the business and operations of Independent and Enterprise.

Securities class action lawsuits and derivative lawsuits are often brought against public companies that have entered into acquisition, Merger or other business combination agreements like the Merger Agreement. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact on Independent’s and Enterprise’s respective liquidity and financial condition.

One of the conditions to the closing of the Merger is that no order, injunction or decree issued by any court or government entity of competent jurisdiction or other legal restraint preventing the consummation of the Merger, the bank Merger or any of the other transactions contemplated by the Merger Agreement be in effect. Consequently, if a plaintiff is successful in obtaining an injunction prohibiting completion of the Merger, the bank Merger or any of the other transactions contemplated by the Merger Agreement, then such injunction may delay or prevent the Merger from being completed within the expected timeframe or at all, which may adversely affect Independent’s and Enterprise’s respective business, financial position and results of operations. Even if such injunction is eventually lifted and the Merger is later completed,

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the resulting delays and costs incurred may continue to affect the combined company following the completion of the Merger.

Additionally, there can be no assurance that any of the defendants will be successful in the outcome of any potential lawsuits. The defense or settlement of any lawsuit or claim that remains unresolved at the time the Merger is completed may adversely affect the combined company’s business, financial condition, results of operations and cash flows.

RISKS RELATED TO ECONOMICS & FINANCIAL MARKETS

The Company's financial results are impacted by the general economic conditions of the United States and the primary market areas in which the Company operates. Any weakening in general economic conditions in the United States or the New England region, a long-term deterioration of the regional economy, the local impact of worsening national economic conditions or continued geopolitical instability could negatively impact the Company’s financial results.

The Company is Subject to Interest Rate Risk

The Company's earnings and cash flows are largely dependent upon its net interest income, meaning the difference, or spread, between interest income earned and interest expense paid. Changes in market interest rates may affect the rates on our loan, investment and deposit products at differing speeds in both time and scale, which could negatively impact the demand for bank products and net interest margin. Our net interest margin may decrease even if the Federal Reserve Bank lowers the federal funds rate interest rate. Interest rates are highly sensitive to many factors that are beyond the Company's control, including competition from both banks and non-bank financial service providers, the monetary policy of the Federal Reserve, inflation and deflation, and volatility of domestic and global financial markets due to any number of factors including, among other things, widening geopolitical tensions. The current environment of elevated interest rates could continue to increase our funding costs and negatively impact our net interest margin and our asset-liability management strategies for funding loan growth.

The Company is subject to Inflation and Deflation Risks

Unlike an industrial company, virtually all assets and liabilities of the Company are monetary in nature. As a result, interest rates, which are impacted by inflation, have a more significant impact on the Company's performance than the general level of inflation. Interest rates do not necessarily move in the same direction, or at the same magnitude, as the prices of other goods and services impacted by inflation.

The ongoing inflationary environment in the United States and our market areas has resulted in higher interest rates and increased interest rate risk as our interest earning asset yields are generally longer in duration and therefore reprice less quickly than our interest-bearing liabilities (only 13% of deposits are certificates of deposit). The risks to our business from inflation depend on the durability of the current inflationary pressures in our markets. Persistent inflation could lead to tighter-than-expected monetary policy and higher interest rates, which could slow loan growth and increase cost of funds for the Company, reduce net interest margin and profitability, lower asset prices and weaken economic activity. Conversely a prolonged period of deflation may also lead to a deterioration in economic conditions in the United States and our markets causing stress on commercial customers and unemployment, which could result in an increase in loan delinquencies and non-performing assets, decreases in loan collateral values and a decrease in demand for our products and services, all of which, in turn, would adversely affect our business, financial condition and results of operations.

Refer to Item 7A. "Quantitative and Qualitative Disclosures About Market Risk," below in this Form 10-K, for more information on the projected impact of interest rates on the Company’s balance sheet at December 31, ~~2023~~2024.

The Company's Investment Portfolio Could Incur Losses or Fair Value Could Deteriorate

There are inherent risks associated with the Company's investment activities. These risks include the impact from changes in interest rates, credit risk related to weakness in real estate values, municipalities, government sponsored enterprises, or other industries, the impact of changes in income tax rates on the value of tax-exempt securities, adverse changes in regional or national economic conditions, and general turbulence in domestic and foreign financial markets, among other things. These conditions could adversely impact the ultimate collectability of the Company's investments. If an investment's value is in an unrealized loss position, the Company is required to assess the security to determine if a valuation allowance for the credit exposure of the debt security is necessary, which, if necessary, is recorded as a charge to earnings.

28Persistent high market interest rates have resulted in unrealized losses on the Company's fixed income bond portfolio. If market interest rates remain higher than at the time of purchase, the fair value of the fixed income bond portfolio will decrease, resulting in additional unrealized losses, and depending on the extent of the rise in interest rates, the increase in unrealized losses could be significant. The non-credit portion of unrealized losses are recorded to AOCI, a component of

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~~things~~Shareholders' Equity. ~~These~~A ~~conditions~~significant ~~could~~increase ~~adversely~~in market rates may have a negative impact on the ~~ultimate~~Company's ~~collectability~~book ofvalue ~~the~~per common share. The Company's ~~investments~~bond portfolio is expected to mature at par and therefore the unrealized losses in the portfolio that result from higher market interest rates will decrease as the bonds become closer to maturity. However, if the Company were required to sell investment securities with an unrealized loss for any reason, including liquidity needs, the unrealized loss would become realized and reduce both net income for the reported period and regulatory capital, which as currently reported, excludes unrealized losses on investment securities.

IfThe anPotential ~~investment's~~for ~~value~~Bank isFailures inand anany ~~unrealized~~Related ~~loss~~Negative ~~position,~~Impact ~~the~~on ~~Company~~Customer isConfidence ~~required~~in ~~to assess~~ the ~~security~~Safety toand ~~determine~~Soundness ~~if a valuation allowance for the credit exposure~~ of the ~~debt~~Banking ~~security~~Industry ismay ~~necessary,~~Adversely ~~which,~~Affect ifour ~~necessary, is recorded as a charge to earnings.~~ Business

Higher market interest rates have resulted in unrealized losses on the Company's fixed income bond portfolio. If market interest rates continue to rise, the fair value of the fixed income bond portfolio will decrease, resulting in additional unrealized losses, and depending on the extent of the rise in interest rates, the increase in unrealized losses could be significant. The non-credit portion of unrealized losses are recorded to AOCI, a component of Shareholders' Equity. A significant increase in market rates may have a negative impact on the Company's book value per common share. The Company's bond portfolio is expected to mature at par and therefore the unrealized losses in the portfolio that result from higher market interest rates will decrease as the bonds become closer to maturity. However, if the Company were required to sell investment securities with an unrealized loss for any reason, including liquidity needs, the unrealized loss would become realized and reduce both net income for the reported period and regulatory capital, which as currently reported, excludes unrealized losses on investment securities.

The Potential for Bank Failures and any Related Negative Impact on Customer Confidence in the Safety and Soundness of the Banking Industry may Adversely Affect our Business.

If other financial institutions experience severe financial difficulties, it could result in an adverse impact on the regional banking industry, generally, and the business environment in which the Company operates. Regional bank failures or failure of confidence in the financial industry generally, could result in significant market volatility among publicly traded bank holding companies which may cause uncertainty in the investor community, generally.

This uncertainty may negatively impact customer confidence in the safety and soundness of the banking system and, as a result, the Company's customers may choose to withdraw some or all of their deposited funds, which could have a materially adverse impact on our liquidity, cost of funding, loan growth, net interest margin, capital and results of operations. In addition, advances in technology have increased the speed at which deposits can be moved, as well as the speed and reach of media attention, including social media, and its ability to disseminate concerns or rumors, in each case potentially exacerbating liquidity concerns.

RISKS RELATED TO LIQUIDITY

Deposit Outflows May Increase Reliance on Borrowings and Brokered Deposits as Sources of Funds

The Company has historically funded its asset growth through customer deposits and to a lesser extent through wholesale borrowings (e.g., brokered deposits and borrowed funds). As a general matter, customer deposits are typically a lower cost source of funds than external wholesale funding. If the balance of the Company's customer deposits decrease or are less than the Company's asset growth, the Company may have to rely more heavily on higher-costing wholesale funding or other sources of external funding or may have to significantly increase deposit rates to maintain deposit levels in the future, all of which may lower the Company's net interest income, net interest margin and its profitability.

Sources of External Funding Could Become Restricted and Impact the Company's Liquidity

Liquidity risk is the potential that we will be unable to meet our obligations as they come due because of an inability to liquidate assets or obtain adequate funding. The Bank’s access to funding sources in amounts adequate to finance our activities or on acceptable terms could be impaired by factors that affect our organization, the financial services industry, or the economy in general. Factors that could detrimentally impact access to liquidity sources include a downturn in the markets in which our loans are concentrated or adverse regulatory actions against the Bank. Market conditions or other events could also negatively affect the level or cost of funding, affecting the Bank’s ongoing ability to meet liability maturities and deposit withdrawals, meet contractual obligations and fund asset growth and new business transactions at a reasonable cost, in a timely manner and without adverse consequences.

If, as a result of general economic conditions or other events, sources of external funding become restricted or are eliminated, the Company may not be able to raise adequate funds, may incur substantially higher funding costs, be required to sell assets, restrict operations, or restrict the payment of dividends. Furthermore, if the Company is unable to raise adequate funds through external sources, the Company may need to sell assets with unrealized losses in order to generate additional liquidity, which could decrease the capital of the Company and have an adverse effect on our business, financial condition and results of operations.

29RISKS RELATED TO LENDING

~~Table~~There are inherent risks associated with the Company's lending activities. These risks include, among other things, the impact of ~~Contents~~changes in the economic conditions in the market areas in which the Company operates impacting our commercial customer's businesses and changes in interest rates. In addition, the Company may be impacted by the following risks associated with its lending activities:

LENDING

There are inherent risks associated with the Company's lending activities. These risks include, among other things, the impact of changes in the economic conditions in the market areas in which the Company operates and changes in interest rates. In addition, the Company may be impacted by the following risks associated with its lending activities:

Commercial Lending Generally Involves a Higher Degree of Risk than Retail Residential Mortgage Lending

The Company's loan portfolio consists primarily of commercial real estate, commercial and industrial, and commercial construction loans. These types of loans are generally viewed as having more risk of default than owner-occupied residential real estate loans and typically have larger balances. The underlying commercial real estate values, lower demand for office and retail space, increase costs to complete construction projects. Customer cash flows can be more easily influenced by adverse conditions in the related industries, the real estate market or in the economy.

Commercial real estate values may be elevated and the outlook for commercial real estate remains dependent on the broader economic environment and, specifically, how major subsectors respond to higher interest rate environment and prices for commodities, goods and services. Credit performance across the industry over the medium- and long-term is susceptible to economic and market forces and our non-performing loans and charge offs may increase. Some degree of general instability in the broad commercial real estate market may occur in the coming quarters as loans are refinanced at higher interest rates and in markets with higher vacancy rates under current economic conditions. Our commercial borrowers may experience greater difficulties meeting their obligations if debt service coverage declines as adjustable-rate loans reprice to higher interest rates and customer cash flows are impacted by inflationary pressures. Conversely, in periods of decreasing interest rates, likely resulting from economic slowdown or recession, borrowers may experience difficulties meeting their obligations and seek to refinance their loans for lower rates, which may adversely affect income from these lending activities. Instability and uncertainty in the commercial real estate markets and elevated level of interest rates could have a material adverse effect on our financial condition and results of operations.31

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construction loans. These types of loans are generally viewed as having more risk of default than owner-occupied residential real estate loans and typically have larger balances. The underlying commercial real estate values, lower demand for office and retail space, increase costs to complete construction projects. Customer cash flows can be more easily influenced by adverse conditions in the related industries, the real estate market or in the economy.

Commercial real estate values may be elevated and the outlook for commercial real estate remains dependent on the broader economic environment and, specifically, how major subsectors respond to higher interest rate environment and prices for, and availability of, commodities, goods and services. Credit performance across the industry over the medium- and long-term is susceptible to economic and market forces and our non-performing loans and charge-offs may increase. Some degree of general instability in the broad commercial real estate market may occur in the coming quarters as loans are repricing at higher interest rates and in markets with higher vacancy rates under current economic conditions. Our commercial borrowers may experience greater difficulties meeting their obligations if debt service coverage declines as adjustable-rate loans reprice to higher interest rates and customer cash flows are impacted by inflationary pressures. Conversely, in periods of decreasing interest rates, likely resulting from economic slowdown or recession, borrowers may experience difficulties meeting their obligations and seek to refinance their loans for lower rates, which may adversely affect income from these lending activities. Instability and uncertainty in the commercial real estate markets and elevated level of interest rates could have a material adverse effect on our financial condition and results of operations.

The Company May Need to Increase its Allowance for Credit Losses

The determination of the appropriate level of the allowance for credit losses inherently involves a high degree of subjectivity and requires the Company to make significant estimates of current credit risks, non-performing trends, and economic forecasts, all of which may undergo material changes. In addition, bank regulatory agencies periodically review the Company's allowance for credit losses and may require an increase in the provision for credit losses or the recognition of loan charge-offs, based on judgments that may differ from those of the Company's management.

Increases in the Company's Non-performing Assets Could Adversely Affect the Company's Results of Operations and Financial Condition in the Future

Non-performing assets adversely affect our net income in various ways. No interest income is recorded on non-accrual loans or other real estate owned, thereby adversely affecting income and returns on assets and equity. In addition, loan administration and workout costs increase, including significant time commitments from management and staff, resulting in additional reductions of earnings. When taking collateral in foreclosures and similar proceedings, the Company is required to carry the property or loan at its then-estimated fair value less estimated cost to sell, which, when compared to the carrying value of the loan, may result in a loss. In addition, any errors in documentation or previously unknown defects in deeds may impact the Company's ability to perfect title of the collateral in foreclosure. These non-performing loans and other real estate owned assets also increase the Company's risk profile and the capital that regulators believe is appropriate in light of such risks and have an impact on the Company's FDIC risk-based deposit insurance premium rate.

The Company's Use of Appraisals in Deciding Whether to Make a Loan Does Not Ensure the Value of the Collateral

In considering whether to make a loan secured by real property or other business assets, the sale of which may provide ultimate recovery of the outstanding balance of the loan, the Company generally requires an internal evaluation or independent appraisal of the collateral supporting the loan. However, these assessment methods are only an estimate of the value of the collateral at the time the assessment is made and involve estimates and assumptions. An error in fact, estimate or judgment could adversely affect the reliability of the valuation. Furthermore, changes in those estimates due to the economic environment and events occurring after the initial assessment, may cause the value of the collateral to differ significantly from the initial valuations. As a result, the value of collateral securing a loan may be less than estimated at the time of assessment, and if a default occurs the Company may not recover the outstanding balance of the loan.

The Company is Subject to Environmental Risks Associated with Real Estate Held as Collateral or Occupied

While the Company’s lending, foreclosure and facilities policies and guidelines are intended to exclude properties with an unreasonable risk of contamination, hazardous substances could exist on some of the properties that the Company may own, acquire, manage, or occupy. Environmental laws could force the Company to clean up the properties at the Company’s expense. It may cost much more to clean a property than the property is worth, and it may be difficult or impossible to sell contaminated properties. The Company could also be liable for pollution generated by a borrower’s operations if the Company takes a role in managing those operations after a default.

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unreasonable risk of contamination, hazardous substances could exist on some of the properties that the Company may own, acquire, manage, or occupy. Environmental laws could force the Company to clean up the properties at the Company’s expense. It may cost much more to clean a property than the property is worth, and it may be difficult or impossible to sell contaminated properties. The Company could also be liable for pollution generated by a borrower’s operations if the Company takes a role in managing those operations after a default.

Concentrations in Commercial Real Estate Loans are Subject to Heightened Risk Management and Regulatory Review

If a concentration in commercial real estate lending is present, as measured under government banking regulations, management must employ heightened risk management lending practices that address the following key elements: board and management oversight and strategic planning, portfolio management, development of underwriting standards, portfolio risk assessment and monitoring through market analysis and stress testing, and maintenance of increased capital levels as needed to support the level of commercial real estate lending. Management believes that it is in compliance with the enhanced risk management practices. When a concentration is determined to exist, the Company may incur additional operating expenses in order to comply with additional risk management practices and increased capital requirements.

RISKS RELATED TO INFORMATION & TECHNOLOGY RESOURCES

The use of technology related products, services, delivery channels, access points and processes expose the Company to various risks, particularly operational, privacy, cybersecurity, strategic, reputation and compliance risk. The ongoing move towards more cloud-based and third-party hosted technology solutions may subject the Bank to certain heightened cyber risks. The potential use of generative artificial intelligence to launch sophisticated cyber-attacks, and the threat that foreign state-sponsored agencies' cyber threat operations may pose heightened risk of disruptions to U.S. critical infrastructure and thereby the Bank's operations. Banks are required by regulatory agencies to prudently manage cyber, third-party, cloud-based and technology-related risks as part of their comprehensive risk management policies by identifying, measuring, monitoring, and controlling these risks.

Failure to Keep Pace with Technological Change Could Affect the Company's Profitability

The banking industry is continually undergoing rapid technological change with frequent introductions of new technology-driven products, services, extended service and settlement frequencies, data management and delivery channels. Failure to successfully plan or keep pace with technological changes affecting the banking industry, or failure to adequately plan, train and educate staff and customers on the use and risks of new technologies and extended service cycles, failure to capture or manage data, or failure to comply adequately with regulatory guidance regarding information and cybersecurity could have a material adverse effect on the Company's business and, in turn, the Company's financial condition and results of operations. In addition, there may be significant time and expenses associated with upgrading and implementing new technology, technology compliance, information security and cybersecurity processes.

Information Systems Could Experience an Interruption, Failure, Breach in Security, or Cyber-Attack

The Company relies heavily on public utilities infrastructure, internal information and operating systems, and cloud-based solutions and storage to conduct its business effectively, and these systems could fail in a variety of ways. In addition, the use of network, cloud-based, or third-party hosted systems expose the Company to the increased sophistication and activity of cyber-criminals, both domestic and international. Current geopolitical tensions could result in serious and catastrophic attempts at cyber-attacks on the U.S. web-based infrastructure. A cyber incident is considered to be any adverse event that threatens the confidentiality, integrity, or availability of the information resources of the Company. These incidents may be an intentional attack or an unintentional event and could involve blocking the Company from accessing its own systems or remote servers in exchange for a ransom payment, gaining unauthorized access directly to our information systems, or indirectly through our vendors and customers systems or servers, for purposes of misappropriating assets, stealing confidential corporate information or customers' Personally Identifiable Information, corrupting data, denying access or causing operational disruption. The Company's independent third-party service providers or their subcontractors may also expose the Company to cybersecurity risk. Additionally, vendors' and customers' home, business or mobile information systems and the servers they rely on, are at risk of fraudulent corporate account takeovers which the Company may not be able to detect, and may impact the Company's ability to service its customers. There is no guarantee the Company's counteractions will be successful or that the Company will have the resources or technical expertise to anticipate, detect or prevent rapidly evolving types of cyber-attacks.

The occurrence of any failures or disruptions as noted above, or the Company's inability to detect, respond, disclose and correct such occurrence or compromise in a timely manner, could subject the Company to increased operational costs to detect and rectify the situation, damage the Company's reputation and deter customers from using the Company's services, increase the Company insurance cost or the ability to obtain adequate cyber insurance coverage, subject the Company to additional regulatory scrutiny, and expose the Company to civil litigation and possible financial liability.

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~~increase~~RISKS ~~the~~RELATED ~~Company~~TO insurance cost or the ability to obtain adequate cyber insurance coverage, subject the Company to additional regulatory scrutiny, and expose the Company to civil litigation and possible financial liability.OPERATIONS

OPERATIONS

The Company Operates in a Competitive Industry and Market Area

The Company faces substantial competition in all areas of its operations from a variety of different competitors within its market area and beyond. Some of these competitors are larger and have more financial resources than the Company; some are not subject to the same degree of government regulation as the Company and thus may have a competitive advantage. If the Company encounters difficulties attracting and retaining customers, it would have a material adverse effect on the Company's growth and profitability.

The Company May Experience a Prolonged Interruption in its Ability to Conduct Business

The Company relies heavily on its personnel and facilities to conduct its business. A material loss of people or physical damage, destruction, or denial of access to our core operating facilities, for any number of reasons including localized natural disasters, global pandemics and government's reaction thereto, demonstrations/pickets at or near facilities, or the local impact of geopolitical tensions, could result in prolonged business interruptions impacting customer services and our ability to conduct transactions.

The Company Relies on External Service Providers

The Company relies on independent third-party firms, including indirect vendors utilized by such third parties, to provide critical services necessary to conducting its business. These services include but are not limited to electronic funds delivery networks, check clearing houses, electronic banking services, wealth advisory, management and custodial services, correspondent banking services, information security assessments and technology support services, and loan underwriting and review services, among others. The occurrence of any failures or interruptions of the independent firms' systems or in their delivery of services, or failure to perform in accordance with contracted service level agreements, for any number of reasons could in turn impact the Company's ability to conduct business and process transactions.

The Company Relies on Financial Counterparty Relationships

The Company routinely executes transactions with counterparties in the financial services industry, in order to maintain correspondent bank relationships, liquidity, manage certain loan participations, mortgage sales activities, interest-rate swaps, engage in securities transactions, and engage in other financial activities with counterparties that are customary to our industry. Many of these transactions expose the Company to counterparty credit, liquidity and/or reputation risk in the event of default by the counterparty, or negative publicity or public complaints, whether real or perceived, about one or more of the Company's financial counterparties, or the financial services industry in general. Although the Company seeks to manage these risks through internal controls and procedures, the Company may experience loss or interruption of business as a result of unforeseen events with these counterparties.

Wealth Management and Wealth Services Expose the Company to Financial, Operational and Legal Risk

The Company's Wealth Management and Wealth Services channels derive their revenues primarily from investment management fees based on the market value of assets under management. The Company's ability to maintain or increase investment assets under management is subject to a number of factors, including changes in client investment preferences, investment decisions by us or our third-party service provider partners, and various economic conditions, among other factors. Clients can terminate their relationships with us, reduce their aggregate assets under management, or shift their funds to other types of accounts with different rate structures for any number of reasons.

Investment performance is one of the most important factors in retaining existing clients and competing for new wealth management clients. Financial markets are affected by many factors, any of which could adversely impact the fair value of customer portfolios. Even when market conditions are generally favorable, our investment performance may be adversely affected by the investment style of our wealth management and investment advisors and the investment decisions that they make. Poor investment performance, whether real or perceived, in either relative or absolute terms, could impair our ability to attract and retain investment assets under management from existing and new clients.

The Company's Insurance Coverage May Not be Adequate to Prevent Additional Liabilities or Expenses

The Company works with an independent third-party insurance advisor to obtain insurance policies that provide coverage for a variety of business and cyber risks at coverage levels that compare favorably to bench-marked coverage for loss exposures that are faced by similarly sized financial institutions. However, there are no guarantees that the Company will be able to obtain or maintain comparable or adequate coverage levels in the future. In addition, there is no guarantee that the circumstances of an incident will meet the criteria for insurance coverage under a specific policy, and despite the insurance policies in place the Company may experience a material loss incident or event.

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be able to obtain or maintain comparable or adequate coverage levels in the future. In addition, there is no guarantee that the circumstances of an incident will meet the criteria for insurance coverage under a specific policy, and despite the insurance policies in place the Company may experience a material loss incident or event.

Lack of or Slower than Expected Growth Could Adversely Affect the Company's Profitability and its Ability to Pay Dividends

The Company ~~operates with a long-term focus on organic growth, which requires a significant investment of both financial and personnel resources. The Company~~ relies on its deposit and lending activities to generate the cash flow to conduct operations, expand service and product offerings, expand the branch network, and pay dividends to shareholders. Contraction or slower than expected loan and/or deposit growth and/or lower than expected fee or other income generated from these and other products and services could lower our profitability and net cash flow available for funding our growth strategies and paying dividends to shareholders.

The Company May Not be Able to ~~Attract,~~ Retain and/or Develop Key Personnel

The Company's success ~~and growth strategy~~ depends, in large part, on its ability to ~~attract,~~ retain and develop top performing banking professionals within our markets, and its ability to successfully identify and develop personnel for succession to key executive management positions and to the board of directors. The inability to do so could have a material adverse impact on the Company’s business because of the loss of their skills, knowledge of the Company's market, years of industry or business experience and the difficulty of promptly hiring qualified replacements.

RISKS RELATED TO REGULATION / POLICY

The Company is Subject to Extensive Government Regulation and Supervision

The Company and the Bank are subject to a variety of federal and state laws and regulations that are primarily intended to protect consumers in the financial marketplace, provide fair and equal availability of products and services, preserve depositors' funds and the FDIC insurance fund, and to safeguard the banking system as a whole, and not necessarily the interests of shareholders. These regulations affect the Company's lending practices, capital structure, investment practices, dividend policy, growth, and net income, among other things. Federal and state laws and regulations may not always align in principle or statue, and preemptive federal laws may be more or less restrictive than those of a state. Future legislation could increase or decrease the cost of doing business, negatively impact consumers' faith in the banking system leading them to seek out non-banking alternatives, limit or expand permissible activities or affect the competitive balance among banks, savings associations, credit unions, and other financial institutions.

Commercial Developers may be Impacted by International Trade and Tariff Policies

Our commercial construction borrowers may experience greater difficulties meeting their obligations if internation trade policies and tariffs on construction material negatively impact inventory levels or costs to complete projects, delaying anticipated construction/occupancy timelines and customer cash flow. Instability and uncertainty in commercial construction costs and elevated level of interest rates due to administrative policies could have a material adverse effect on our financial condition and results of operations.

Climate Change and Related Legislative and Regulatory Initiatives May Materially Affect the Company’s Business

Climate change, which is having a dramatic effect on weather patterns and causing more frequent and severe weather events, may negatively impact the regional and local economy, increasing credit and other financial risks for the Company and our customers. The physical effects of climate change may adversely impact the value of real property securing the loans in our portfolios and our customers' ability to continue to conduct operations at their business locations. Additionally, if insurance obtained by our borrowers is insufficient to cover any losses sustained to the collateral, or if insurance coverage is otherwise unavailable to our borrowers, the collateral securing our loans may be negatively impacted.

Further, the U.S. Congress, state legislatures and federal and state regulatory agencies continue to propose numerous initiatives to supplement the global effort to combat climate change. The Company cannot predict what legislation will be enacted, and, if enacted, the effect that it, or any implementing regulations, would have on the Company's business.

RISKS RELATED TO ESTIMATES ~~AND~~& ASSUMPTIONS

The Company's Financial Condition and Results of Operation Rely in Part on Management Estimates and Assumptions

In preparing the financial statements in conformity with GAAP, management is required to exercise judgment in determining many of the methodologies, estimates and assumptions to be utilized. These estimates and assumptions affect the reported values of assets and liabilities at the balance sheet date and income and expenses for the years then ended. Changes in those estimates resulting from continuing change in the economic environment and other factors will be reflected in the financial statements and results of operations in future periods. As future events and their effects cannot be determined with precision, actual results could differ significantly from these estimates and be adversely affected should the assumptions and estimates used be incorrect or change over time. The most significant areas in which management applies critical assumptions and estimates are: the estimates of the allowance for credit losses for loans, and available-for-sale securities, the reserve for unfunded commitments and the impairment review of goodwill.

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~~The~~applies ~~Net~~critical ~~DTAs~~assumptions ~~May~~and beestimates ~~Determined~~are: tothe beestimates ~~Unrealizable~~of inthe ~~Future~~allowance ~~Periods~~for credit losses for loans, and available-for-sale securities, the reserve for unfunded commitments and the impairment review of goodwill.

The Net Deferred Tax Assets May be Determined to be Unrealizable in Future Periods

In making its assessment on the future realizability of net DTAs, management considers all available relevant information, including recent financial operations, projected future taxable income, and recoverable past income tax paid. If in the future, management believes based upon historical and expected future earnings that it is more likely than not that the Company will not generate sufficient taxable income to utilize the DTA balance, then a valuation allowance would be booked against the DTA, with the write down offset to current earnings. Factors beyond management's control can affect future levels of taxable income and there can be no assurances that sufficient taxable income will be generated to fully realize the DTAs in the future.

REPUTATION & LEGAL RISKS

Damage to the Company's Reputation Could Affect the Company's Profitability and Shareholders' Value

The Company is dependent on its reputation within its market area as a trusted and responsible financial company for all aspects of its business with customers, employees, vendors, third-party service providers, and others with whom the Company conducts business or potential future business. Any negative publicity or public complaints, whether real or perceived, disseminated by word of mouth, by the general media, by electronic or social networking means, or by other methods, could harm the Company's reputation.

Environmental, Social and Governance Oversight May Influence Stock Price and Increase Compliance Costs

Investors have begun to consider how corporations are addressing environmental, social and governance matters, commonly known as "ESG matters" when making investment decisions. Investor advocacy groups, investment funds and influential investors are also increasingly focused on these practices, especially as they relate to the environment, health and safety, diversity, executive compensation, labor conditions and human rights. These shifts in investing priorities may result in adverse effects on the trading price of the Company’s common stock if investors determine, whether real or perceived, that the Company's ESG actions are not satisfactory. In addition, new government regulations could also result in new or more stringent forms of ESG oversight and expanding mandatory and voluntary reporting, diligence, and disclosure. Increased ESG related compliance costs could result in increases to our overall operational costs.

The Company is Exposed to Legal Claims and Litigation

The Company is subject to legal challenges under a variety of circumstances in the course of its normal business practices. Regardless of the scope or the merits of any claims by potential or actual litigants, the Company may have to engage in litigation that could be expensive, time-consuming, disruptive to the Company's operations, and distracting to management. Whether claims or legal action are founded or unfounded, if such claims and legal actions are not resolved in a manner favorable to the Company, they may result in significant financial liability, damage the Company's reputation, subject the Company to additional regulatory scrutiny and restrictions, and/or adversely affect the market perception of our products and services, as well as impact customer demand for those products and services.

RISKS RELATED TO COMMON STOCK, SHAREHOLDER’S EQUITY, CAPITAL

The Trading Volume in the Company's Common Stock is Less Than That of Larger Companies

Although the Company's common stock is listed for trading on the NASDAQ Global Market, the trading volume in the Company's common stock is substantially less than that of larger companies. Given the lower trading volume of the Company's common stock, significant purchases or sales of the Company's common stock, or the expectation of such purchases or sales, could cause significant movement in the Company's stock price.

The Company's Capital Levels Could Fall Below Regulatory Minimums

If the Company's regulatory capital levels decline, or if regulatory requirements increase, and the Company is unable to raise additional capital to offset that decline or meet the increased requirements, then its regulatory capital ratios may fall below regulatory minimum capital adequacy levels.

The Company's failure to remain "well-capitalized" for bank regulatory purposes could affect customer confidence, restrict the Company's ability to grow (both assets and branching activity), increase the Company's costs of funds and FDIC insurance expense, prohibit the Company's ability to pay dividends on common shares, and restrict its ability to make acquisitions, among other impacts. Under FDIC rules, if the Bank ceases to be a "well-capitalized" institution, its ability to accept brokered deposits and the interest rates that it pays may be restricted. The Basel III Rules establish, among other rules, a "capital conservation buffer" of 2.5% above the regulatory minimum risk-based capital requirements. An institution

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accept brokered deposits and the interest rates that it pays may be restricted. The Basel III Rules establish, among other rules, a "capital conservation buffer" of 2.5% above the regulatory minimum risk-based capital requirements. An institution will be subject to limitations on certain activities, including payment of dividends, share repurchases and discretionary bonuses to executive officers, if its capital level is below the buffered ratio.

The Company's Articles of Organization, and By-Laws ~~and Shareholders Rights Plan~~ as Well as Certain Banking and Corporate Laws Could Have an Anti-Takeover Effect

Although management believes that certain anti-takeover strategies are in the best interest of the Company and its shareholders, provisions of the Company's articles of organization, by-laws, and ~~shareholders rights plan and~~ certain federal and state banking laws and state corporate laws, including regulatory approval requirements for any acquisition of control of the Company, could make it more difficult for a third-party to acquire the Company, even if doing so would be perceived to be beneficial to the Company's shareholders. The combination of these provisions is intended to prohibit a non-negotiated merger, or other business combination involving an acquisition of the Company, which, in turn, could adversely affect the market price of the Company's common stock.

Directors and Executive Officers Own a Significant Portion of Common Stock

The Company's directors and executive officers, as a group, beneficially own approximately 2320% of the Company's outstanding common stock as of December 31, ~~2023~~2024. ~~Management~~The ~~views this ownership commitment by insiders as an integral component of maintaining the Company's ownership. However, as a result of this combined ownership interest, the~~ directors and executive officers have the ability, if they vote their shares in a like manner, to significantly influence the outcome of all matters submitted to shareholders for approval, including the election of directors, and potential Merger opportunities.

The Company Relies on Dividends from the Bank for Substantially All of its Revenue

Holders of the Company’s common stock are entitled to receive dividends only when, and if declared by our Board. Although the Company has historically declared cash dividends on our common stock, we are not required to do so, and our Board may reduce or eliminate our common stock dividend in the future.

The Company is a separate and distinct legal entity from the Bank. It receives substantially all its revenue from dividends paid by the Bank. These dividends are the principal source of funds used to pay dividends on the Company’s common stock and interest and principal on the Company’s subordinated debt. Various federal and state laws and regulations limit the amount of dividends that the Bank may pay to the Company, and certain regulators may prohibit the Bank or the Company from paying future dividends if deemed an unsafe or unsound practice. If the Bank, due to its capital position, inadequate net income levels, or otherwise, is unable to pay dividends to the Company, then the Company will be unable to service its debt, pay obligations or pay dividends on the Company’s common stock, which could have a material adverse effect on the market price of the Company’s common stock.

Item 1B.Unresolved Staff Comments

None.

Item 1C.Cybersecurity

Overall Process

We have developed and implemented a comprehensive multi-layered cybersecurity risk management program, consisting of a dedicated cybersecurity function, risk assessments, policies and procedures managed by internal and external resources, that we believe is reasonably designed to prevent, detect and respond to cyber risks and incidents. We utilize a set of tools and services, including regular network, endpoint and cloud monitoring, vulnerability assessments, penetration testing, ~~SIEM~~a Security Information and Event Management system, and tabletop exercises to identify and assess material risks from cybersecurity threats and to evaluate our cyber defense capabilities.

Internal security controls are designed to align with standards set by the ~~NIST~~National Institute of Standard and Technology. We monitor emerging data protection laws, conduct background checks of our employees in specific technology and cybersecurity roles, apply least privilege access to users, test the maturity and readiness of our cybersecurity program, conduct table top exercises based on current threat scenarios to increase awareness, conduct phishing testing, provide cybersecurity training to our Board and employees, and provide cybersecurity alerts to our customers on ongoing threats. We monitor notifications and alerts from the ~~FS-ISAC~~Financial Services Information and Analysis Center and other industry cybersecurity sites to stay abreast of the most recent cybersecurity alerts.

~~Enterprise Risk Management Process Integration~~37

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~~technologies,~~Enterprise ~~and~~Risk ~~ongoing~~Management ~~internal~~Process and external evaluations to provide a level of protection of non-public personal information, to continually monitor and attempt to safeguard information on its operating systems, in cloud-based solutions, and those of third-party service providers, and to prevent, quickly detect and respond to attacks. The Company also utilizes firewall technology, multi-factor authentication, complex password construction, and a combination of software and third-party monitoring to detect and prevent intrusion, and cybersecurity threats, guard against unauthorized access, and continuously identify and prevent computer viruses on the Company's information solutions. To minimize debit card losses, the Company works with a third-party provider to establish parameters for allowable transaction activity, monitor transactions, and alert customers of potentially fraudulent activity.Integration

The Company has implemented layered security approaches for all electronic delivery channels to detect, prevent and respond to rising cybersecurity risks. Management utilizes a combination of third-party information security assessments, key technologies, and ongoing internal and external evaluations to provide a level of protection of non-public personal information, to continually monitor and attempt to safeguard information on its operating systems, in cloud-based solutions, and those of third-party service providers, and to prevent, quickly detect and respond to attacks. The Company also utilizes firewall technology, multi-factor authentication, complex password construction, and a combination of software and third-party monitoring to detect and prevent intrusion, and cybersecurity threats, guard against unauthorized access, and continuously identify and prevent computer viruses on the Company's information solutions. To minimize debit card losses, the Company works with a third-party provider to establish parameters for allowable transaction activity, monitor transactions, and alert customers of potentially fraudulent activity.

The Bank maintains a written Information Security Program based on a collection of information security policies, regulatory requirements, standards, guidelines, processes, procedures, third-party recommendations, and industry best practices. The purpose of this Program is to establish a company-wide approach for assessing and protecting the integrity, availability, and confidentiality of the Bank’s information assets.

Third-party Access

The Company has a fully integrated third-party risk management program to identify, assess, monitor and mitigate risks associated with third-party relationships, including cybersecurity risks. Under the program, risk ratings are assigned to each of the vendors based on an assessment of the vendor, ~~and~~for a variety of factors, including its access to networks, systems, and confidential information. An assessment is conducted on each vendor to identify and measure the risks from cybersecurity threats that could impact our customer’s data and our environment. Third parties that have access to our systems or customer data must have appropriate technical and organizational security measures and security control principles based on commercially acceptable security standards, and we require third parties in this class to agree by contract to manage their cybersecurity risks.

In our Risk Factors, we describe whether and how risks from identified cybersecurity threats, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.

Material Incidents

We are not aware of any risks from cybersecurity threats, including as a result of any previous cybersecurity incidents, that have materially affected or are reasonably likely to materially affect the Company, including our business strategy, results of operations or financial condition. Although we have a robust cybersecurity program that is designed to assess, identify, and manage material risks from cybersecurity threats, we cannot provide absolute surety that we have properly identified or mitigated all vulnerabilities or risks of incidents. We, and the third parties that we engage, are subject to constant and evolving threats of attack and cybersecurity incidents may be ~~more~~ difficult to detect for periods of time. A cybersecurity incident could harm our business strategy, results of operations, financial condition, reputation, and/or subject us to regulatory actions or litigation which may result in fines, judgments or indictments.

Incidents and Risks

The Company has developed an Incident Response Plan to guide its actions in responding to real and suspected information security incidents. This includes unlawful, unauthorized, or unacceptable actions that involve a computer system or a computer network such as Distributed Denial of Service attacks, Corporate Account Takeover schemes, or ransomware. Additionally, an event that disrupts one of the Bank's service channels, whether from a security incident or not, is also considered an incident requiring a response under this program. These disclosure controls and procedures compel the Company to make accurate and timely disclosures of material events and incidents to both customers and regulatory authorities. The reaction to an incident aims to reduce potential damage and loss and to protect and restore confidence through timely communication and the restoration of normal operating conditions for computers, services, and information. Management will work closely with its cybersecurity insurance provider, cybersecurity legal counsel, and forensic experts when investigating and responding to cyber or ransomware attacks.

Cybersecurity Governance

Cybersecurity risk management processes are an integral part of our enterprise risk management which is overseen by the Board and the Technology & Information Security Committee of the Board. The Board oversees the risk management policies of the Company and is responsible for the periodic review and approval of the risk management policies of the company and provides general oversight over the information security and technology programs. The TISC oversees the technology and cybersecurity strategies and their alignment with business strategies, the effectiveness of the information security program, monitors the results of third-party testing and risk assessments and responses to breaches of customer data, among other project management, cybersecurity, and business continuity oversight functions. The Committee meets five times during the year, or

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provides general oversight over the information security and technology programs. The TISC oversees the technology and cybersecurity strategies and their alignment with business strategies, the effectiveness of the information security program, monitors the results of third-party testing and risk assessments and responses to breaches of customer data, among other project management, cybersecurity, and business continuity oversight functions. The Committee meets five times during the year, or more as needed. An information security advisor participates in the meetings and is available to provide additional insights into cybersecurity methodologies, best practices, threat trends, and resource planning.

In October 2024, the Company hired a new CISO who is a Certified Information Systems Security Professional with over 12 years in banking experience with a background in cybersecurity, information security, and network administration. The former CISO, who has over 1718 years of banking experience, is a Certified Information Systems Security Professional, and has been involved with the management of information and cybersecurity for over ten years, was promoted to the Chief Risk Officer role in October 2024. The CISO regularly reports to the Board Technology & Information Security Committee on information and cybersecurity strategy, testing, training, policies, procedures, cybersecurity insurance, and overall effectiveness of the Information Security Program and would report and discuss material incidents, and ongoing mitigation status, if any should occur. The CISO is the chair of Management’s Information Security Committee that meets on a monthly basis to evaluate threats, incidents, defense system effectiveness, accepted risks, results of third-party cyber assessments and engagements, and the overall adequacy of the cybersecurity program. In addition, the Chief Information Officer has over 15 years of experience in managing bank technologies, information security, and risk management, and collaborates in supporting the Information Security Program. The CISO reports directly to the Chief Risk Officer and meets on a monthly basis with the Executive Management team to discuss cybersecurity risk management matters.

Item 2.Properties

The Company's main office and operational support offices are located in Lowell, Massachusetts. The Lowell campus consists of four closely situated buildings, three of which are owned and the fourth is under a 40 -year lease, with ample on-site customer parking. The Company also owns and maintains a back-up operations/data facility in the Merrimack Valley region of Massachusetts. As of December 31, ~~2023~~2024, the Company had 27 full-service branch banking offices serving the Northern Middlesex, Northern Essex and Northern Worcester counties of Massachusetts, and Southern Hillsborough and Southern Rockingham counties in New Hampshire.

The Company believes that all of its facilities are well maintained and suitable for the purpose for which they are used.

As of December 31, ~~2023~~2024, the Company was the lessee under 16 active operating real estate leases.

Item 3.Legal Proceedings

There are no material pending legal proceedings to which the Company or its subsidiaries are a party or to which any of its property is subject, other than ordinary routine litigation incidental to the business of the Company. Management does not believe resolution of any present litigation will have a material adverse effect on the business, consolidated financial condition or results of operations of the Company.

Item 4.Mine Safety Disclosures

Not Applicable.

PART II

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

Market for Common Stock

The Company's common stock trades on the NASDAQ Global Market under the trading symbol "EBTC."

As of February 2928, ~~2024~~2025, there were 12,~~278~~458,~~649~~981 shares of the Company's common stock outstanding held by ~~1,079~~911 shareholders of record.

~~Dividends~~39

During the year ended December 31, 2023, quarterly dividends of $0.23 per share were paid to the Company's shareholders in March, June, September, and December. Total dividends paid to the Company's shareholders during the year ended December 31, 2023, equaled $0.92 per share compared to total dividends of $0.82 per share, paid to the Company's shareholders on a quarterly basis during the year ended December 31, 2022.

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~~On January 16, 2024, the Company announced a quarterly dividend of $0.24 per share, which was paid on March 1, 2024, to shareholders of record as of February 9, 2024.~~Dividends

InDuring ~~addition,~~ the ~~Company~~year ~~maintains~~ended ~~a DRSPP which enables shareholders~~December 31, ~~at their discretion~~2024, toquarterly ~~elect~~dividends toof ~~reinvest~~$0.24 ~~cash~~per ~~dividends~~share were paid onto ~~their shares of~~ the Company's ~~common~~shareholders ~~stock~~in byMarch, ~~purchasing~~June, ~~additional~~September, and ~~shares~~December. Total ofdividends ~~common~~paid ~~stock~~to ~~from~~ the Company's atshareholders aduring ~~purchase~~the ~~price~~year ~~equal~~ended toDecember 31, ~~fair~~2024, ~~market~~equaled ~~value~~$0.96 ~~Under~~per ~~the~~share ~~DRSPP,~~compared ~~shareholders~~to ~~and~~total ~~new~~dividends ~~investors~~of ~~also~~$0.92 ~~have~~per ~~the~~share, ~~opportunity~~paid to ~~purchase shares of~~ the Company's ~~common~~shareholders ~~stock~~on ~~without~~a ~~brokerage~~quarterly ~~fees,~~basis ~~subject~~during tothe ~~monthly~~year ~~minimums~~ended ~~and~~December 31, ~~maximums~~2023.

On January 21, 2025, the Company announced a quarterly dividend of $0.25 per share, which was paid on March 3, 2025, to shareholders of record as of February 10, 2025.

In addition, the Company maintained a DRSPP which enabled shareholders, at their discretion, to elect to reinvest cash dividends paid on their shares of the Company's common stock by purchasing additional shares of common stock from the Company at a purchase price equal to fair market value. Under the DRSPP, shareholders and new investors also had the opportunity to purchase shares of the Company's common stock without brokerage fees, subject to monthly minimums and maximums. Effective December 9, 2024, all share purchases under the DRSPP were suspended as a result of the pending merger with Independent.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information as of December 31, ~~2023~~2024, with respect to the Company's 2009 Stock Incentive Plan, as amended, and its 2016 Stock Incentive Plan, as amended, which together constitute all the Company's existing equity compensation plans that have been previously approved by the Company's shareholders. The 2009 Plan expired in 2019 and is closed for future grants, although awards previously granted under the 2009 Plan remain outstanding and may be exercised through 2028.

Plan Category

Number of ~~Securitiesto~~securitiesto be issued uponexercise ofoutstanding options,warrants and rights

Weighted-averageexercise price ofoutstanding options,warrants and rights

Number of ~~Securitiesremaining~~securitiesremaining available forfuture issuance underequity compensation plans(excluding securitiesreflected in secondcolumn from left)

Equity compensation plans approved by security holders

~~162~~125,~~539~~813

2829.0758

~~370~~270,~~680~~474

Equity compensation plans not approved by security holders

—

TOTAL

~~162~~125,~~539~~813

2829.0758

~~370~~270,~~680~~474

See also Note 14, "Stock-Based Compensation" to the Company's consolidated financial statements contained in Item 8 of this Form 10-K below for further information regarding the Company's Equity Compensation Plan.

Repurchases of Common Stock

During the three months ended December 31, ~~2023~~2024, the Company made noone hundred twenty-seven repurchases of common stock.



	Total Number of Shares Repurchased(1)	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Announced	Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs
October	—	—	—	—
November	—	—	—	—
December	127	$39.54	—	—

__________________________________

(1) Amounts include shares repurchased that were not part of a publicly announced repurchase plan or program. These shares were owned and tendered by employees as payment for taxes on vesting restricted stock (net settlement of shares).

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Performance Graph

The following graph compares the cumulative total shareholder return (which assumes the reinvestment of all dividends) on the Company's common stock with the cumulative total return reflected by a broad-based equity market index and an appropriate published industry index. This graph shows the changes over the five-year period ended on December 31, 2024, in the value of $100 invested in (i) the Company's common stock, (ii) the Standard & Poor's 500 Index, and (iii) the Standard & Poor's U.S. Small Cap Banks Index. 2749

The following graph compares the cumulative total shareholder return (which assumes the reinvestment of all dividends) on the Company's common stock with the cumulative total return reflected by a broad-based equity market index and an appropriate published industry index. This graph shows the changes over the five-year period ended on December 31, 2023, in the value of $100 invested in (i) the Company's common stock, (ii) the Standard & Poor's 500 Index, and (iii) the Standard & Poor's U.S. Small Cap Banks Index.


	Period Ending
Index	12/31/19		12/31/20		12/31/21		12/31/22		12/31/23		12/31/24
Enterprise Bancorp, Inc.	$	100.00	$	77.68	$	139.60	$	112.32	$	105.89	$	134.24
S&P 500 Index	100.00		118.40		152.39		124.79		157.59		197.02
S&P U.S. Small Cap Banks Index	100.00		90.82		126.43		111.47		112.03		132.44

	Period Ending
Index	12/31/18		12/31/19		12/31/20		12/31/21		12/31/22		12/31/23
Enterprise Bancorp, Inc.	$	100.00	$	107.60	$	83.58	$	150.20	$	120.86	$	113.94
S&P 500 Index	100.00		131.49		155.68		200.37		164.08		207.21
S&P U.S. Small Cap Banks Index	100.00		125.46		113.94		158.62		139.85		140.55

Item 6. [Reserved]

Not Applicable.

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

Management's discussion and analysis should be read in conjunction with the Company's (also referred to herein as "Enterprise," "us," "we," or "our") consolidated financial statements and notes thereto, contained in Item 8, "Financial Statements and Supplementary Data," and the other financial and statistical information contained in this Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024 (this “Form 10-K”).

Special Note Regarding Forward-Looking Statements

This Form 10-K contains forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. Such forward-looking statements about the Company and its industry involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding the Company’s future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, and the impact of any laws or regulations applicable to the Company, are forward-looking statements. Forward-looking statements may be identified by reference to a future period or periods or by use of forward-looking terminology such as "will," "should," "could," "anticipates," "believes," "expects," "intends," "may," "plans," "pursue," "views" and similar terms or expressions. We caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

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forward-looking statements about the Company and its industry involve substantial risks and uncertainties. Statements other than statements of current or historical fact, including statements regarding the Company’s future financial condition, results of operations, business plans, liquidity, cash flows, projected costs, and the impact of any laws or regulations applicable to the Company, are forward-looking statements. Forward-looking statements may be identified by reference to a future period or periods or by use of forward-looking terminology such as "will," "should," "could," "anticipates," "believes," "expects," "intends," "may," "plans," "pursue," "views" and similar terms or expressions. We caution you that any such forward-looking statements are not guarantees of future performance and are subject to risks, assumptions, estimates and uncertainties that are difficult to predict. Although we believe that the expectations reflected in these forward-looking statements are reasonable as of the date made, actual results may prove to be materially different from the results expressed or implied by the forward-looking statements.

There are or will be important factors that could cause our actual results to differ materially from those indicated in these forward-looking statements, including, but not limited to, the following:

•disruption from the proposed Merger (as defined below) of the Company with and into Independent (as defined below);

•the risk that the proposed Merger may not be completed in a timely manner or at all;

•the occurrence of any event, change, or other circumstances that could give rise to the termination of the proposed Merger with Independent, including under circumstances that would require Enterprise to pay a termination fee;

•the failure to obtain necessary shareholder or regulatory approvals for the proposed Merger with Independent;

•the ability to successfully integrate the combined business;

•the possibility that the amount of the costs, fees, expenses, and charges related to the proposed Merger with Independent may be greater than anticipated, including as a result of unexpected or unknown factors, events, or liabilities;

•the failure of the conditions to the proposed Merger with Independent to be satisfied;

•reputational risk and the reaction of the parties' customers to the proposed Merger with Independent;

•the risk of potential litigation or regulatory action related to the proposed Merger with Independent;

•potential recession in the United States and our market areas;

•the impacts related to or resulting from ~~recent~~ bank failures and any ~~continuation of the recent~~ uncertainty in the banking industry as a whole, including the associated impact to the Company and other financial institutions of any regulatory changes or other mitigation efforts taken by government agencies in response thereto;

•increased competition for deposits and related changes in deposit customer behavior;

•failure of risk management controls and procedures;

•the adequacy of the allowance for credit losses;

•risk specific to commercial loans and borrowers;

•changes in the business cycle and downturns in the local, regional, or national economies, including changes in consumer spending and deterioration in the local real estate market, could negatively impact credit and/or asset quality and result in credit losses and increases in the Company's allowance for credit losses;

•the effects of declines in housing prices in the United States and our market areas;

•declines in commercial real estate prices;

•the ~~persistence~~lingering inflationary pressures, and the risk of the ~~current~~resurgence ~~inflationary~~of ~~environment~~elevated levels of inflation, in the ~~United~~U.S. ~~States~~ and our market areas, and its impact on market interest rates, the economy and credit quality;

•increases in unemployment rates in the United States and our market areas;

•deterioration of capital markets, which could adversely affect the value or credit quality of the Company's assets and the availability of funding sources necessary to meet the Company's liquidity needs;

•changes in market interest rates, whether due to the current elevated interest rate environment or future reductions in interest rates, could negatively impact the pricing of our loans and deposits and decrease our net interest income or net interest margin;

•increases in market interest rates could negatively impact bond market values and result in a lower net book value;

•our ability to successfully manage the ~~current~~elevated ~~rising~~ market interest-rate environment, our credit risk and the level of future non-performing assets and charge-offs;

•potential decreases or growth of assets, deposits, future non-interest expenditures and non-interest income;

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•inability to maintain adequate liquidity;

•the inability to raise the necessary capital to fund our operations or to meet minimum regulatory capital levels would restrict our business and operations;

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•material decreases in the amount of deposits we hold, or a failure to grow our deposit base as necessary to help fund our growth and operations;

•our ability to keep pace with technological change or difficulties when implementing new technologies;

•technology-related risk, including technological changes and technology service interruptions or failure could adversely impact the Company's operations and increase technology-related expenditures;

•cybersecurity risk, including cyber incidents or other failures, disruptions or security breaches of our operational or security systems or infrastructure, or those of our third-party vendors or other service providers, including as a result of a cyber ~~attack, could impact the Company's reputation, increase regulatory oversight, and impact the financial results of the Company~~-attacks;

•increasing competition from larger regional and out-of-state banking organizations as well as non-bank providers of various financial services could adversely affect the Company's competitive position within its market area and reduce demand for the Company's products and services;

•our ability to retain and increase our aggregate assets under management;

•our ability to enter new markets successfully and capitalize on growth opportunities, including the receipt of required regulatory approvals;

•damage to our reputation in the markets we serve;

•risks associated with fraudulent, negligent, or other acts by our customers, employees or vendors;

•exposure to legal claims and litigation;

•our ability to maintain an effective system of disclosure controls and procedures and internal control over financial reporting;

•inability to attract, hire and retain qualified ~~management~~ personnel;

•recent and future changes in laws and regulations that apply to the Company's business and operations, and any additional regulations, or repeals that may be forthcoming as a result thereof, which could cause the Company to incur additional costs and adversely affect the Company's business environment, operations and financial results;

•future regulatory compliance costs, including any increase caused by new regulations imposed by the government;

•changes in tariffs and trade barriers;

•our ability to navigate the uncertain impacts of quantitative tightening and current and future governmental monetary and fiscal policies, including the current and future policies of the Board of Governors of the Federal Reserve System (the "Federal Reserve Board");

•uncertainty regarding United States fiscal debt and budget matters;

•severe weather, natural disasters, acts of war or terrorism, geopolitical instability or other external events;

•the impact of changes in U.S. presidential administrations or Congress, including potential changes in U.S. and international trade policies and the resulting impact on the Company and its customers;

•our ability to comply with supervisory actions by federal and state banking agencies;

•changes in the scope and cost of FDIC insurance and other coverage;

•changes in accounting and/or auditing standards, policies and practices, as may be adopted or established by the regulatory agencies, FASB, or the Public Company Accounting Oversight Board could negatively impact the Company's financial results; and

•systemic risks associated with the soundness of other financial institutions.

The foregoing factors should not be construed as exhaustive and should be read together with the other cautionary statements included in this Form 10-K, including those discussed in Item 1A, "Risk Factors," of this Form 10-K. The Company cautions readers that the forward-looking statements in this Form 10-K reflect numerous assumptions that management believes to be reasonable, but which are inherently uncertain and beyond the Company's control. Forward-looking statements involve a number of risks and uncertainties that could cause the Company's actual results to differ materially from those expressed in, or implied by, the forward-looking statement. Accordingly, we caution you that any such forward-looking statements are not guarantees of future performance and readers should not place undue reliance on such forward-looking information and statements. Any forward-looking statements in this Form 10-K are based on information available to the Company as of the date of this Form 10-K, and the Company undertakes no obligation to publicly update or otherwise revise any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

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Overview

Executive Summary

~~The~~On ~~Company~~December ~~operates~~9, 2024, Enterprise and Enterprise Bank announced the signing of an Agreement and Plan of Merger (the "Merger Agreement") with aIndependent ~~long-term~~Bank ~~outlook~~Corp. ("Independent"), ~~focused~~pursuant onto ~~organic~~which ~~growth~~Enterprise ~~supported~~will bymerge ~~continually~~with ~~investing~~and ininto ~~our~~Independent ~~people,~~(the ~~products~~"Merger") and Enterprise Bank will merge into Independent's wholly owned subsidiary, ~~services~~Rockland Trust Company. The proposed Merger is expected to close in the second half of 2025, ~~technology~~subject to customary closing conditions, including regulatory approvals and ~~branch~~approval ~~network~~of Enterprise shareholders. No vote of Independent shareholders is required.

Key financial results at or for the twelve months ended December 31, ~~2023~~2024 are as follows:

•Net income amounted to $38.17 million, or $3.1112 per diluted common share.

•Return on average assets and average equity were 0.8582% and 1211.4827%, respectively.

•Net interest margin (non-GAAP) was 3.5123%.

•Total loans increased 12% compared to December 31, ~~2022~~2023.

•Total deposits ~~decreased~~increased 15% compared to December 31, ~~2022~~2023.

•~~The~~Wealth ~~Company~~assets ~~had~~under nomanagement ~~brokered~~and ~~deposits~~administration ~~and~~amounted ~~only~~to $251.~~8 million~~54 inbillion ~~borrowed~~and ~~funds~~increased 16% compared to December 31, 2023.

~~•Wealth~~Net ~~assets~~income ~~under~~for ~~management~~the ~~and~~year ~~administration~~ended December 31, 2024, amounted to $138.7 million, or $3 ~~billion~~.12 ~~and~~per ~~increased~~diluted ~~21%~~common share, compared to $38.1 million, or $3.11 per diluted common share, for the year ended December 31, ~~2022~~2023. The increase in net income of $675 thousand, for the year ended December 31, 2024, was due primarily to a decrease in the provision for credit losses of $7.3 million and an increase in non-interest income of $5.3 million, partially offset by a decrease in net interest income of $5.2 million and an increase non-interest expense of $6.9 million.

~~Net~~The comparison of net income for the ~~year~~years ended December 31, ~~2023,~~2024 ~~amounted~~and to2023 ~~$38.1~~was ~~million,~~also orimpacted ~~$3.11~~by ~~per~~multiple ~~diluted~~non-core ~~common~~operating ~~share,~~transactions ~~compared~~including tomerger-related ~~$42.7 million,~~expenses orof $31.521 ~~per~~million ~~diluted~~in ~~common share~~2024, ~~for~~which ~~the~~decreased ~~year ended December 31, 2022. The decrease in~~ net income ~~of $4.7 million for the year ended December 31~~, ~~2023~~as ~~was~~well ~~attributable~~as ~~primarily~~net tolosses ~~increases~~on insales ~~the~~of ~~provision~~debt ~~for~~securities ~~credit losses~~ of $32.4 million and ~~non-interest~~ERCs ~~expense~~ of $13.96 million ~~and~~(recognized as a ~~decrease~~reduction into ~~non-interest~~salaries ~~income~~and ofemployee ~~$853 thousand,~~benefits ~~partially~~expense) ~~offset~~in by2023, anwhich ~~increase~~caused ina net ~~interest~~increase ~~income~~on ofnet $1income.~~3 million.~~

~~The~~Total ~~Company’s~~assets ~~financial~~amounted ~~results~~to ~~for~~$4.83 ~~the~~billion ~~years~~at ~~ended~~ December 31, ~~2023~~2024, ~~and~~compared ~~2022~~to ~~were impacted by multiple non-core operating transactions~~$4.47 ~~The~~billion ~~non-core~~at ~~operating~~December 31, ~~transactions for~~ 2023. ~~included~~Investment ~~net~~securities ~~losses~~at onfair ~~sales~~value ofdecreased ~~debt securities of~~ $274.46 million, ~~and~~or ~~Employee~~11%, ~~Retention~~during ~~Credits~~the ofyear ~~$3.6~~ended ~~million~~December 31, ~~(included~~2024, indue ~~salaries~~primarily ~~and~~principal ~~benefits). The non~~pay-~~core~~downs, ~~operating~~calls ~~transactions~~and ~~for~~maturities. ~~2022~~Total ~~included~~loans ~~net~~increased ~~losses~~$415.3 onmillion, ~~sales~~or of12%, ~~debt~~versus ~~securities~~a ofyear ~~$2.0~~ago, ~~million~~with ~~and~~growth aprimarily ~~net~~in ~~gain~~commercial onreal ~~sale~~estate ofand ~~insurance~~commercial ~~commissions~~construction ~~of $2~~loans.0 ~~million.~~

~~Total~~Net ~~assets~~charge-offs for the year ended December 31, 2024, amounted to $4206 thousand, or 0.4701% ~~billion~~of ataverage ~~December 31,~~total ~~2023~~loans, compared to $4105 thousand, or 0.4400% ~~billion~~of ataverage total loans, for the year ended December 31, ~~2022~~2023. ~~Investment~~The ~~securities~~non-performing atloans ~~fair~~to ~~value~~total ~~decreased~~loans ~~$152.2~~ratio ~~million~~normalized during the year ~~ended~~and amounted to 0.67%, compared to 0.32% at December 31, 2023,. ~~due~~The increase resulted primarily tofrom ~~sales~~two ofindividually ~~debt~~evaluated ~~securities~~commercial asconstruction ~~well~~loans aswhich ~~principal~~were ~~pay~~placed on non-~~downs,~~accrual ~~calls~~during ~~and~~the ~~maturities~~year. The ACL for loans to total loans ratio was 1.59% at December 31, ~~partially~~2024, ~~offset~~compared byto a1.65% at December 31, 2023. The decrease in ~~unrealized~~the ~~losses~~ACL onfor ~~debt~~loans ~~securities.~~to ~~Total~~total loans ~~increased~~ratio ~~$387.1~~was ~~million,~~due orprimarily ~~12%~~to ~~versus~~ a ~~year~~decrease ~~ago~~in ~~with~~general ~~growth~~reserve ~~primarily~~factors in ~~commercial~~our ~~real~~ACL ~~estate~~model, ~~and~~partially ~~commercial~~offset ~~construction~~by an increase in reserves on individually evaluated loans.

~~Credit~~Customer ~~quality~~deposits ~~remained~~amounted ~~strong~~to at$4.19 ~~December 31~~billion, ~~2023~~an ~~with~~increase ~~the~~of ~~non-performing~~$210.2 ~~loan~~million, toor ~~total~~5%, ~~loan~~due ~~ratio~~primarily ~~amounting~~ to ~~0.32%~~increases ~~compared~~in tomoney ~~0.19%~~market atand ~~December 31,~~certificate ~~2022.~~of ~~Net~~deposit ~~charge-offs~~balances ~~for~~of ~~2023~~$51.5 ~~were~~million and $~~105 thousand~~164.1 ~~The~~million, ~~ACL~~respectively. ~~for~~Lower ~~loans~~cost tochecking ~~total~~and ~~loans~~savings ~~ratio~~accounts ~~was~~comprised ~~1.65~~49% of total deposits at December 31, ~~2023~~2024, compared to ~~1.66~~52% at December 31, ~~2022~~2023, as customers shifted funds into higher yielding products during the year.

~~Customer~~Shareholders’ ~~deposits~~equity ~~amounted~~increased to $331.986 ~~billion, a decrease of $58.3~~ million, or 110%~~. In 2023~~, ~~the~~due ~~Company~~primarily ~~experienced~~to aan ~~highly~~increase ~~competitive~~in ~~marketplace~~retained ~~for~~earnings ~~deposits~~of ~~from bank and non-bank alternatives~~$26.9 ~~As a result~~million, ~~the~~which ~~Company~~included ~~experienced~~shareholder adividends ~~shift~~of ~~in deposit mix during the year with lower cost checking and savings balances decreasing~~ $~~313~~10.53 million, ~~while~~net ~~higher cost money market and certificate~~ of ~~deposit balances increased $255~~reinvestment.2 ~~million.~~

Shareholders’ equity increased $46.9 million, or 17%, due primarily to an increase in retained earnings of $26.8 million and a decrease in the accumulated other comprehensive loss of $16.4 million with the latter resulting from slightly lower market interest rates at December 31, 2023 compared to December 31, 2022.44

Table of Contents

Selected Financial Data and Ratios

The following table sets forth selected financial data and ratios for the Company at or for the years ended as indicated:

	At or for the year ended December 31,
(Dollars in thousands, except per share data)	~~2023~~2024			~~2022~~2023			~~2021~~2022			~~2020~~2021			~~2019~~2020
Balance Sheet Data
Total cash and cash equivalents	$	5683,~~592~~841		$	~~267~~56,~~589~~592		$	~~436~~267,~~576~~589		$	~~253~~436,~~782~~576		$	63253,~~794~~782
Total investment securities at fair value	~~668~~593,~~171~~595			~~820~~668,~~371~~171			~~958~~820,~~215~~371			~~583~~958,~~049~~215			~~505~~583,~~255~~049
Total loans	3,~~567~~982,~~631~~898			3,~~180~~567,~~518~~631			23,~~920~~180,~~684~~518			32,~~073~~920,~~860~~684			23,~~565~~073,~~459~~860
Allowance for credit losses	(5863,~~995~~498)			(5258,~~640~~995)			(4752,~~704~~640)			(4447,~~565~~704)			(3344,~~614~~565)
Total assets	4,~~466~~827,~~034~~726			4,~~438~~466,~~333~~034			4,~~447~~438,~~819~~333			4,~~014~~447,~~324~~819			34,~~235~~014,~~049~~324
Total deposits	34,~~977~~187,~~521~~698			43,~~035~~977,~~806~~521			34,~~980~~035,~~239~~806			3,~~551~~980,~~263~~239			23,~~786~~551,~~730~~263
Subordinated debt	59,~~498~~815			59,~~182~~498			5859,~~979~~182			7358,~~744~~979			1473,~~872~~744
Total shareholders' equity	~~329~~360,~~117~~748			~~282~~329,~~267~~117			~~346~~282,~~895~~267			~~334~~346,~~426~~895			~~296~~334,~~641~~426
Total liabilities and shareholders' equity	4,~~466~~827,~~034~~726			4,~~438~~466,~~333~~034			4,~~447~~438,~~819~~333			4,~~014~~447,~~324~~819			34,~~235~~014,~~049~~324
Wealth Management
Wealth assets under management(1)	$	1,~~077~~230,~~761~~014		$	~~891~~1,~~451~~077,761		$	1891,~~041,409~~451		$	~~976~~1,~~502~~041,409		$	~~914~~976,~~301~~502
Wealth assets under administration(1)	$	~~242~~305,~~338~~930		$	~~198~~242,~~586~~338		$	~~257~~198,~~867~~586		$	~~210~~257,~~900~~867		$	~~187~~210,~~501~~900
Shareholders' Equity Ratios
Book value per common share	$	2628.8298		$	~~23.~~26.82		$	2823.8226		$	28.0182		$	2528.0901
Dividends paid per common share	$	0.9296		$	0.8292		$	0.7482		$	0.7074		$	0.6470
Regulatory Capital Ratios
Total capital to risk-weighted assets	13.1206		%	13.4912		%	13.7349		%	1413.6273		%	1114.8862		%
Tier 1 capital to risk-weighted assets(2)	10.3438		%	10.5634		%	10.6256		%	10.7762		%	10.1377		%
Tier 1 capital to average assets	8.7494		%	8.1074		%	78.5610		%	7.5256		%	87.8652		%
Credit Quality Data
Non-performing loans	$	1126,~~414~~687		$	611,~~122~~414		$	266,~~522~~122		$	3826,~~050~~522		$	1438,~~771~~050
Non-performing loans to total loans	0.3267		%	0.1932		%	0.9119		%	10.2491		%	01.5824		%
Non-performing assets to total assets	0.2655		%	0.1426		%	0.6014		%	0.9560		%	0.4695		%
ACL for loans to total loans	1.6559		%	1.6665		%	1.6366		%	1.4563		%	1.3145		%
Net charge-offs	$	~~105~~206		$	~~239~~105		$	~~3,964~~239		$	13,~~548~~964		$	1,~~415~~548
Income Statement Data
Net interest income	$	~~153~~147,~~084~~864		$	~~151~~153,~~798~~084		$	~~141~~151,~~556~~798		$	~~130~~141,~~134~~556		$	~~115~~130,~~857~~134
Provision for credit losses	91,~~249~~985			59,~~800~~249			15,~~770~~800			121,~~499~~770			112,~~180~~499
Total non-interest income	1722,~~609~~879			1817,~~462~~609			18,~~107~~462			1718,~~247~~107			1617,~~319~~247
Total non-interest expense	~~110~~117,~~199~~132			~~108~~110,~~314~~199			~~102~~108,~~135~~314			93102,~~254~~135			8693,~~415~~254
Income before income taxes	51,~~245~~626			5651,~~146~~245			5556,~~758~~146			4155,~~628~~758			4441,~~581~~628
Provision for income taxes	1312,~~187~~893			13,~~430~~187			13,~~587~~430			1013,~~172~~587			10,~~381~~172
Net income	$	38,~~058~~733		$	4238,~~716~~058		$	42,~~171~~716		$	3142,~~456~~171		$	3431,~~200~~456
Income Statement Ratios
Diluted earnings per common share	$	3.1112		$	3.5211		$	3.5052		$	23.6450		$	2.8964
Return on average total assets	0.8582		%	0.9685		%	0.9896		%	0.8298		%	10.1082		%
Return on average shareholders' equity	1211.4827		%	1412.4748		%	1214.4947		%	912.9549		%	129.3195		%
Net interest margin (tax-equivalent)(3)	3.5123		%	3.5451		%	3.4454		%	3.5944		%	3.9559		%

____________________________________________________________________________

(1)Wealth assets under management and wealth assets under administration are not carried as assets on the Company’s Consolidated Balance Sheet.

(2)Ratio also represents common equity tier 1 capital to risk-weighted assets as of the periods presented.

(3)Tax-equivalent net interest margin is net interest income adjusted for the tax-equivalent effect associated with tax-exempt loan and investment income, expressed as a percentage of average interest-earning assets.

4345

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Results of Operations

COMPARISON OF YEARS ENDED DECEMBER 31, ~~2023~~2024 AND ~~2022~~2023

Unless otherwise indicated, the reported results are for the year ended December 31, ~~2023~~2024, with the "prior year" referring to the year ended December 31, ~~2022~~2023. Average yields are presented on a tax-equivalent basis.

Net Income

Net income for the year ended December 31, ~~2023~~2024, amounted to $38.17 million, aan ~~decrease~~increase of $~~4.7~~675 ~~million~~thousand, or 112%, compared to the year ended December 31, ~~2022~~2023. The components of the ~~decrease~~increase in net income compared to the prior year are discussed below.

Net Interest Income

Net interest income for the year ended December 31, ~~2023~~2024, amounted to $~~153~~147.19 million, ana ~~increase~~decrease of $15.32 million, or 13%, compared to the year ended December 31, ~~2022~~2023. The increase in net interest income during the current period was due largely to increases in loan interest income of $36.6 million and, to a lesser extent, other interest-earning asset income of $3.9 million, partially offset by an increase in deposit interest expense of $38.7 million.

The ~~increase~~decrease in net interest income ofduring ~~$1.3 million, or 1%, was negatively impacted by increases in funding costs that exceeded~~ the ~~increase~~current inperiod ~~loan yields. Additionally, the Company had $2.6 million in PPP related income in 2022 that~~ was ~~not~~due ~~present~~to in the ~~2023~~following ~~results.~~ items:

•An increase in deposit interest expense of $32.1 million;

•An increase in borrowings interest expense of $2.3 million;

•A decrease in interest and dividend income on investments of $2.9 million, and

•A decrease in income on other interest-earning assets of $3.7 million;

•Partially offset by an increase in loan interest income of $35.8 million.

Net Interest Margin

Net interest margin was 3.5123% for the year ended December 31, ~~2023~~2024, compared to 3.5451% for the year ended December 31, ~~2022~~2023.

Net interest margin compared to the prior year was impacted by the following factors:

•Average other interest-earning ~~deposits~~assets ~~with banks~~ decreased $~~136~~81.68 million, or 4142%, while the yield increased ~~322~~33 basis points.

•Average debt securities decreased $90132.32 million, or 915%, ~~while~~and the tax-equivalent yield ~~increased~~decreased 143 basis points.

•Average loan balances increased $~~293~~432.86 million, or 1013%, and the tax-equivalent yield increased 7136 basis points.

•Average total deposits increased $28136.48 million, or 13%, and the yield increased 9574 basis points.

~~The~~•Average ~~decrease~~borrowed infunds ~~net~~increased ~~interest~~$51.2 ~~margin over the respective periods was due primarily to increases in deposit costs~~million, ~~partially offset by increases in loan~~ and ~~other interest earning assets yields as well as strong loan growth. The increase in loan and other interest earning assets yields were positively impacted by~~ the ~~Federal~~yield ~~Reserve~~increased ~~Board~~208 ~~federal funds rate increases of 525~~ basis points ~~from March 2022 through July 2023~~. Deposit costs increased from higher market and competitor interest rates as well as a change in mix as deposits migrated from lower yielding checking and savings products into higher yielding money market and certificate of deposit products compared to the respective periods.

The ~~Company's~~decrease ~~12%~~in net interest margin for the year ended December 31, 2024, compared to December 31, 2023, was due primarily to an increase in deposit interest expense, partially offset by an increase in loan interest income. The increase in deposit interest expense during the period was attributed primarily to higher market rates on deposits and growth in ~~2023~~certificates of deposit balances, while the increase in loan interest income during the period was ~~funded~~due primarily to loan growth and higher loan yields. The decrease in net interest margin was also impacted by a decrease in interest-earning deposits with banks and ~~investment~~an ~~cash~~increase ~~flows,~~in ~~including~~borrowed ~~the~~funds, ~~sale~~both of ~~$84.8~~which ~~million~~were inused ~~debt~~to ~~securities~~fund inthe ~~June~~Company's ~~2023~~12% loan growth in 2024.

Interest rate risk is reviewed in detail under the heading Item 7A, "Quantitative and Qualitative Disclosures About Market Risk," of this Form 10-K, below.

4446

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Rate/Volume Analysis

The following table sets forth, on a tax-equivalent basis, the extent to which changes in interest rates and changes in the average balances of interest-earning assets and interest-bearing liabilities have affected interest income and expense for the period indicated. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to: (i) volume (change in average portfolio balance multiplied by prior year average rate); and (ii) interest rate (change in average interest rate multiplied by prior year average balance). Changes attributable to the combined impact of volume and rate have been allocated proportionately based on absolute value to the changes due to volume and the changes due to rate.

December 31,

2023 vs 2022

2024 vs 2023

Increase (Decrease) due to

Increase (decrease) due to

(Dollars in thousands)

NetChange

Volume

Rate

Interest income

Loans and loans held for sale (tax-equivalent)

36,696

13,600

23,096

Other interest-earning assets(1)

(3,744)

(4,358)

614

Investment securities (tax-equivalent)

(~~613~~3,134)

(12,~~904~~877)

~~1,291~~(257)

Other interest-earning assets(1)

3,929

(3,280)

7,209

Loans and loans held for sale (tax-equivalent)

35,878

23,559

12,319

Total interest-earning assets (tax-equivalent)

4029,~~012~~000

816,~~416~~324

3112,~~596~~676

Interest expense

Interest checking, savings, and money market

2617,~~865~~526

381,119

2616,~~827~~407

CDs

1114,~~813~~598

28,~~418~~106

96,~~395~~492

Borrowed funds

612,313

352,116

26197

Subordinated debt

~~115~~—

1718

98(18)

Total interest-bearing liabilities

3834,~~854~~437

211,~~508~~359

3623,~~346~~078

Change in net interest income (tax-equivalent)

1(5,~~158~~437)

54,~~908~~965

(410,~~750~~402)

_________________________________________

(1) Income on other interest-earning assets includes interest on deposits, and fed funds sold, and dividends on FHLB stock.

~~The table on the following page presents the Company's average balance sheet, net interest income and average rates for the years ended December 31, 2023, 2022 and 2021:~~47

Table of Contents

	Average Balances, Interest and Average Yields
	Year ended December 31, 2023						Year ended December 31, 2022						Year ended December 31, 2021
(Dollars in thousands)	AverageBalance		Interest(1)		AverageYield(1)		AverageBalance		Interest(1)		AverageYield (1)		AverageBalance		Interest(1)		AverageYield(1)
Assets:
Loans and loans held for sale(2) (tax-equivalent)	$	3,328,387	$	173,077	5.20	%	$	3,034,608	$	136,381	4.49	%	$	2,969,777	$	133,696	4.50	%
Investment securities(3) (tax-equivalent)	868,137		19,278		2.22	%	955,927		19,891		2.08	%	680,261		16,072		2.36	%
Other interest-earning assets(4)	196,931		9,943		5.05	%	333,433		6,014		1.80	%	501,201		682		0.14	%
Total interest-earning assets (tax-equivalent)	4,393,455		202,298		4.60	%	4,323,968		162,286		3.75	%	4,151,239		150,450		3.62	%
Other assets	84,914						110,238						169,315
Total assets	$	4,478,369					$	4,434,206					$	4,320,554
Liabilities and shareholders' equity:
Non-interest checking	$	1,233,908	$	—			$	1,422,618	$	—			$	1,341,633	$	—
Interest checking, savings and money market	2,404,132		30,956		1.29	%	2,381,774		4,091		0.17	%	2,249,023		1,558		0.07	%
CDs	415,840		13,433		3.23	%	221,050		1,620		0.73	%	224,627		1,700		0.76	%
Brokered deposits	—		—		—	%	—		—		—	%	45,617		664		1.46	%
Total deposits	4,053,880		44,389		1.09	%	4,025,442		5,711		0.14	%	3,860,900		3,922		0.10	%
Borrowed funds	5,090		113		2.23	%	3,286		52		1.58	%	7,632		60		0.79	%
Subordinated debt(5)	59,333		3,467		5.84	%	59,050		3,352		5.68	%	62,546		3,495		5.59	%
Total funding liabilities	4,118,303		47,969		1.16	%	4,087,778		9,115		0.22	%	3,931,078		7,477		0.19	%
Other liabilities	55,163						51,274						51,913
Total liabilities	4,173,466						4,139,052						3,982,991
Shareholders' equity	304,903						295,154						337,563
Total liabilities and shareholders' equity	$	4,478,369					$	4,434,206					$	4,320,554
Net interest-rate spread (tax-equivalent)					2.94	%					3.41	%					3.33	%
Net interest income (tax-equivalent)			154,329						153,171						142,973
Net interest margin (tax-equivalent)					3.51	%					3.54	%					3.44	%
Less tax-equivalent adjustment			1,245						1,373						1,417
Net interest income			$	153,084					$	151,798					$	141,556
Net interest margin					3.48	%					3.51	%					3.41	%

The table below presents the Company's average balance sheet, net interest income and average rates for the years ended December 31, 2024, 2023 and 2022:


	Average Balances, Interest and Average Yields
	Year ended December 31, 2024						Year ended December 31, 2023						Year ended December 31, 2022
(Dollars in thousands)	Average Balance		Interest(1)		Average Yield(1)		Average Balance		Interest(1)		Average Yield (1)		Average Balance		Interest(1)		Average Yield(1)
Assets:
Other interest-earning assets(2)	$	115,171	$	6,199	5.38	%	$	196,931	$	9,943	5.05	%	$	333,433	$	6,014	1.80	%
Investment securities(3) (tax-equivalent)	737,633		16,144		2.19	%	868,137		19,278		2.22	%	955,927		19,891		2.08	%
Loans and loans held for sale(4) (tax-equivalent)	3,761,015		208,955		5.56	%	3,328,387		173,077		5.20	%	3,034,608		136,381		4.49	%
Total interest-earning assets (tax-equivalent)	4,613,819		231,298		5.01	%	4,393,455		202,298		4.60	%	4,323,968		162,286		3.75	%
Other assets	98,585						84,914						110,238
Total assets	$	4,712,404					$	4,478,369					$	4,434,206

Liabilities and shareholders' equity:
Non-interest checking	$	1,070,290	$	—			$	1,224,101	$	—			$	1,412,694	$	—
Interest checking, savings and money market	2,498,798		48,482		1.94	%	2,413,939		30,956		1.28	%	2,391,698		4,091		0.17	%
CDs	621,576		28,031		4.51	%	415,840		13,433		3.23	%	221,050		1,620		0.73	%

Total deposits	4,190,664		76,513		1.83	%	4,053,880		44,389		1.09	%	4,025,442		5,711		0.14	%
Borrowed funds	56,259		2,426		4.31	%	5,090		113		2.23	%	3,286		52		1.58	%
Subordinated debt(5)	59,649		3,467		5.81	%	59,333		3,467		5.84	%	59,050		3,352		5.68	%
Total funding liabilities	4,306,572		82,406		1.91	%	4,118,303		47,969		1.16	%	4,087,778		9,115		0.22	%
Other liabilities	62,258						55,163						51,274
Total liabilities	4,368,830						4,173,466						4,139,052
Shareholders' equity	343,574						304,903						295,154
Total liabilities and shareholders' equity	$	4,712,404					$	4,478,369					$	4,434,206

Net interest-rate spread (tax-equivalent)					3.10	%					3.44	%					3.53	%
Net interest income (tax-equivalent)			148,892						154,329						153,171
Net interest margin (tax-equivalent)					3.23	%					3.51	%					3.54	%
Less tax-equivalent adjustment			1,028						1,245						1,373
Net interest income			$	147,864					$	153,084					$	151,798
Net interest margin					3.20	%					3.48	%					3.51	%

_________________________________________

(1)Average yields and interest income are presented on a tax-equivalent basis, calculated using a U.S. federal corporate income tax rate of 21% in the years ended ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022, based on tax-equivalent adjustments associated with tax -exempt loans and investments interest income.

(2)Average ~~loans~~other ~~and~~interest-earning ~~loans~~assets ~~held~~includes ~~for~~interest-earning ~~sale~~deposits ~~are~~with ~~presented~~banks, atfed ~~average~~funds ~~amortized~~sold, ~~cost~~ and ~~include~~FHLB ~~non-accrual loans~~stock.

(3)Average ~~investment~~investments are presented at average amortized cost.

(4)Average ~~other~~loans ~~interest-earning~~and ~~assets~~loans ~~includes~~held ~~interest-earning~~for ~~deposits~~sale ~~with~~are ~~banks,~~presented ~~fed~~at ~~funds~~average ~~sold,~~amortized cost and ~~FHLB~~include ~~stock~~non-accrual loans.

(5)The subordinated debt is net of average deferred debt issuance costs.

4648

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Provision for Credit Losses

The provision for credit losses for each of the ~~year~~years ended December 31, ~~2023,~~2024 ~~amounted~~and ~~to $9.2 million, an increase of $3.4 million, compared to the year ended~~ December 31, ~~2022.~~2023 are presented below:

The primary components of the provision for credit losses during the year ended December 31, 2023, are as follows:


	Year ended				Increase / (Decrease)
(Dollars in thousands)	December 31, 2024		December 31, 2023
Provision for credit losses on loans - collectively evaluated	$	1,463	$	4,184	$	(2,721)
Provision for credit losses on loans - individually evaluated	3,246		2,276		970
Provision for credit losses on loans	4,709		6,460		(1,751)

Provision for unfunded commitments	(2,724)		2,789		(5,513)

Provision for credit losses	$	1,985	$	9,249	$	(7,264)

•The ~~provision~~primary ~~expense~~components onof ~~loans~~the ~~collectively~~provision ~~evaluated~~for ~~resulted~~credit ~~primarily~~losses ~~from~~during ~~growth~~the inyear ~~commercial~~ended ~~real~~December 31, ~~estate and commercial construction loans~~2024, ~~partially~~compared ~~offset by the impact of a reduction in general reserve factors related~~ to ~~improved~~December 31, ~~economic~~2023, ~~metrics~~were inas ~~our~~follows: ~~ACL model relative to the prior year.~~

•~~The~~Provision ~~provision~~ expense on loans ~~individually~~collectively evaluated ~~resulted~~of ~~primarily~~$1.5 ~~from~~million, ~~one commercial loan relationship that was deemed individually evaluated and assigned~~ a ~~specific~~decrease ~~reserve~~ of $2.~~5 million~~7 ~~at December 31~~million, ~~2023.~~due ~~For~~primarily ~~further~~to ~~discussion~~the ~~regarding~~impact ~~this~~of ~~commercial~~an ~~loan~~improved ~~relationship,~~economic ~~see~~forecast ~~"Credit Risk," included~~ in ~~the~~our ~~section~~ACL ~~titled~~model, ~~"Financial~~partially ~~Condition,"~~offset ~~contained~~by growth in ~~this~~commercial ~~Item~~real 7estate ofand ~~this~~commercial ~~Form~~construction ~~10-K.~~loans;

•~~The~~Provision ~~ACL~~expense ~~for~~on loans toindividually ~~total~~evaluated ~~loans~~of ~~ratio~~$3.2 ~~was~~million, an increase of $1.~~65%~~0 ~~at December 31~~million, ~~2023~~due ~~compared~~primarily to 1the addition of two individually evaluated commercial relationships with cumulative reserves of $3.~~66%~~6 million at December 31, ~~2022.~~2024, partially offset by;

•~~The~~A negative provision for unfunded commitments ~~resulted~~of ~~primarily~~$2.7 ~~from~~million ~~increases~~due to a decrease in off-balance sheet commitments onthat ~~construction~~required a reserve and, ~~commercial~~to ~~real~~a ~~estate~~lesser ~~commitments.~~extent, the impact of reduced general reserve factors in our ACL model.

At December 31, 2024, the ACL for loans to total loans ratio was 1.59% compared to 1.65% at December 31, 2023.

The provision for credit losses is a significant factor in the Company's operating results. For further discussion regarding the provision for credit losses and management's assessment of the adequacy of the ACL for loans see "Credit Risk," and "ACL for Loans" included in the section titled "Financial Condition," contained in this Item 7 of this Form 10-K above, for further information regarding the provision for credit losses.

Non-Interest Income

Non-interest income for the year ended December 31, ~~2023~~2024, amounted to $1722.69 million, aan ~~decrease~~increase of $~~853 thousand~~5.3 million, or 530%, compared to the prior year.

The following table sets forth the components of non-interest income and the related changes for the periods indicated:

	Year Ended December 31,
(Dollars in thousands)	~~2023~~2024		~~2022~~2023		Change		% Change
Wealth management fees	$	67,~~730~~888	$	6,~~533~~730	$	~~197~~1,158	317	%
Deposit and interchange fees	8,~~475~~875		8,~~196~~475		~~279~~400		35	%
Income on bank-owned life insurance, net	12,~~264~~001		1,~~202~~264		62737		558	%
Net losses on sales of debt securities	(2~~,419~~)		(12,~~973~~419)		~~(446)~~2,417		23(100)	%
Net gains on sales of loans	34156		3034		4122		13359	%
Net gain on sale of insurance commissions	—		2,034		(2,034)		100	%
Gains on equity securities	1,140		666		474		71	%
Gain (loss) on equity securities	666		(514)		1,180		(230)	%
Other income	2,821		2,859		(38)		(1)	%
Other income	2,859		2,954		(95)		(3)	%
Total non-interest income	$	22,879	$	17,609	$	5,270	30	%
Total non-interest income	$	17,609	$	18,462	$	(853)	(5)	%

The primary components of the ~~decrease~~increase in non-interest income during the year ended December 31, ~~2023~~2024, ~~are~~were as follows:

•~~Non-interest~~Net ~~income for the current year period included~~ losses on sales of debt securities of $2.4 thousand ~~million~~ and gains on equity securities of $~~666 thousand~~1.1 million while non-interest income in the prior year included net losses on sales of debt securities of $2.04 million, ~~a gain on the sale of insurance commissions of $2.0 million~~ and ~~losses~~gains on equity securities of ~~$514 thousand.~~

•Excluding these items, non-interest income for the year ended December 31, 2023 increased $446 thousand, or 2%, compared to the year ended December 31, 2022 due primarily to an increase in deposit and interchange fees of $279 thousand which was driven by increases in overdraft income and growth in business customer relationships resulting in greater product transaction volumes.49

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$666 thousand.

•Excluding these items, non-interest income for the year ended December 31, 2024 increased $2.4 million, or 12%, compared to the year ended December 31, 2023, due primarily to increases in wealth management fees of $1.2 million and income on bank-owned life insurance of $737 thousand. The increase in wealth management fees was due primarily to an increase in assets under management and administration during the year ended December 31, 2024 resulting from growth in new assets and market value appreciation. The increase in income on bank-owned life insurance was driven by higher credit rates from our existing insurance providers and from an exchange near the end of 2023 to a higher yielding insurance provider.

Non-Interest Expense

Non-interest expense for the year ended December 31, ~~2023~~2024, amounted to $~~110~~117.21 million, an increase of $16.9 million, or 26%, compared to the prior year.

The following table sets forth the components of non-interest expense and the related changes for the periods indicated:

	Year Ended December 31,
(Dollars in thousands)	~~2023~~2024		~~2022~~2023		Change		% Change
Salaries and employee benefits	$	7278,~~283~~224	$	72,~~120~~283	$	~~163~~5,941	—8	%
Occupancy and equipment expenses	9,~~722~~667		9,~~299~~722		~~423~~(55)		5(1)	%
Technology and telecommunications expenses	10,~~656~~708		10,~~735~~656		~~(79)~~52		~~(1)~~—	%
Advertising and public relations expenses	2,~~786~~585		2,~~758~~786		28(201)		1(7)	%
Audit, legal and other professional fees	2,~~945~~474		2,~~949~~945		(4471)		—(16)	%
Deposit insurance premiums	23,~~712~~571		12,~~783~~712		~~929~~859		5232	%
Supplies and postage expenses	~~998~~980		~~912~~998		86(18)		9(2)	%
Other operating expenses	8,097		7,758		339		4	%
Merger-related expenses	1,137		—		1,137		100	%
Total non-interest expense	$	110,199	$	108,314	$	1,885	2	%
Other operating expenses	7,786		8,097		(311)		(4)	%
Total non-interest expense	$	117,132	$	110,199	$	6,933	6	%

The primary components of the increase in non-interest expense during the year ended December 31, ~~2023~~2024, are as follows:

•~~Deposit~~Non-interest ~~insurance~~expense ~~premiums~~in ~~increased~~the prior year was impacted by the receipt of $~~929 thousand~~3.6 ~~due~~million in ERCs, which the Company recognized as a reduction to ansalaries ~~industry~~and employee benefits expense. Excluding this item, non-~~wide~~interest ~~increase~~expense infor the ~~FDIC~~year ~~insurance~~ended ~~assessment~~December 31, ~~rates~~2024, increased $3.3 million, or 3%.

•Salaries and employee benefits ~~expense~~expenses ~~increased~~amounted to $~~163 thousand~~78.2 ~~during~~million for the year ~~and~~ended ~~was~~December 31, ~~favorably~~2024, ~~impacted~~an byincrease ~~the receipt~~ of $32.63 million, inor ~~Employee~~3%, ~~Retention~~excluding ~~Credits~~ERCs, ~~and~~due aprimarily ~~decrease~~to inannual ~~performance-based~~merit ~~compensation expense of $1~~increases.~~2 million~~ ~~during the year ended December 31, 2023.~~

•~~Excluding~~Deposit ~~these~~insurance ~~items,~~premiums ~~salaries and employee benefits for the year ended December 31, 2023~~ increased $~~5.0 million~~859 thousand, or 832%, ~~compared~~due primarily to ~~the~~loan ~~year ended December 31, 2022~~growth. ~~The increase resulted from open positions filled during 2023 along with normal employee salary and benefit increases which were unfavorably impacted by the higher inflation conditions.~~

•Merger-related expenses increased $1.1 million due to the costs incurred related to the proposed Merger with Independent.

Income Tax Expense

The effective tax rate was 25.70% and 2325.97% for the years ended December 31, ~~2023~~2024 and ~~2022~~2023, respectively. The increase in the effective tax rate resulted primarily from an increase in state taxes including a transfer of funds from the Bank's investment subsidiary corporations and annual book to tax return adjustments that increased tax expense in the fourth quarter of 2023. Refer to Note 15, "Income Taxes," to the Company's consolidated financial statements, contained in Item 8 of this Form 10-K, for additional information about the Company's tax positions.

Results of Operations Comparison of Years Ended December 31, ~~2022~~2023 and ~~2021~~2022

For a comparison of the results of operations for the years ended December 31, ~~2022~~2023 and ~~2021~~2022, see Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the fiscal year ended December 31, ~~2022~~2023, as filed with SEC on March 8, ~~2023~~2024 (the "~~2022~~2023 Form 10-K").

Financial Condition

Total assets amounted to $4.4783 billion at December 31, ~~2023~~2024, compared to $4.4447 billion at December 31, ~~2022~~2023, an increase of $27361.7 million, or 8%. The balance sheet composition and changes ~~since~~compared to December 31, ~~2022~~2023, are discussed below.

~~Cash and cash equivalents~~ 50

Cash and cash equivalents may be comprised of cash on hand and cash items due from other banks, interest-earning deposits with banks (deposit accounts, excess reserve cash balances, money markets, and money market mutual funds accounts), federal funds sold and short-term treasury securities. Cash and cash equivalents amounted to $56.6 million at December 31, 2023,

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~~compared~~Cash ~~to $267.6 million at December 31, 2022, a decrease of $211.0 million, or 79%. As of December 31, 2023, cash~~ and cash equivalents ~~represented 1% of total assets compared to 6% of total assets at December 31, 2022. The decrease in cash and cash equivalents since December 31, 2022 was related primarily to funding loan growth.~~

Cash and cash equivalents amounted to $83.8 million at December 31, 2024, compared to $56.6 million at December 31, 2023, an increase of $27.2 million, or 48%. As of December 31, 2024, cash and cash equivalents represented 2% of total assets compared to 1% of total assets at December 31, 2023.

Investments

At December 31, ~~2023~~2024, the fair value of the investment portfolio amounted to $~~668~~593.26 million, a decrease of $~~152~~74.26 million, or 1911%, since December 31, ~~2022~~2023. As of December 31, ~~2023~~2024, the investment portfolio represented 1512% of total assets, as compared to 1815% of total assets at December 31, ~~2022~~2023, and was comprised primarily of debt securities, classified as available-for-sale, with a small portion of the portfolio invested in equity securities at each period. The decrease over the respective periods was attributable to sales of debt securities as well as principal pay-downs, calls and maturities. During the year ended December 31, 2023, the Company had no purchases of debt securities, principal pay-downs, calls and maturities of $88.2 million, and sold debt securities with an amortized cost of $87.2 million realizing net losses on these sales of $2.4 million.

During the year ended December 31, ~~2022~~2024, the Company had no purchases of ~~$145.9 million in~~ debt securities,. ~~principal~~Principal pay-downs, calls and maturities ofamounted to $8277.83 million, and the Company sold debt securities with an amortized cost of $~~71.6~~214 thousand ~~million~~ realizing net losses on these sales of $2 thousand.0 ~~million.~~

During the year ended December 31, 2023, the Company had no purchases of debt securities. Principal pay-downs, calls and maturities amounted to $88.2 million and sold debt securities with an amortized cost of $87.2 million realizing net losses on these sales of $2.4 million. Sales of debt securities during the ~~years~~year ended December 31, 2023 ~~and~~was ~~2022 were~~ made in order to improve the Company's balance sheet positioning and enhance future earnings.

Net unrealized losses on the debt securities portfolio amounted to $~~102~~101.98 million at December 31, ~~2023~~2024, compared to $~~124~~102.19 million at December 31, ~~2022~~2023. Management has concluded that the unrealized losses resulted from significant increases in market interest rates relative to the book yield on the securities held and that no allowance for credit losses was considered necessary as of December 31, ~~2023~~2024. The Company attributes the decrease in net unrealized losses compared to December 31, 2022 to a decrease in market interest rates at December 31, 2023 compared to December 31, 2022 and from the sale of $84.8 million in debt securities in the second quarter of 2023.

Debt Securities

The following table summarizes the fair value of debt securities at the dates indicated:

	December 31,
	2023				2022				2021
	2024				2023				2022
(Dollars in thousands)	Amount		Percent		Amount		Percent		Amount		Percent
Federal agency obligations	$	~~4,978~~—	1—	%	$	4,~~977~~978	1	%	$	—4,977	—1	%
U.S. treasury securities	15,925		2	%	43,251		5	%	62,166		6	%
U.S. Treasury securities	6,232		1	%	15,925		2	%	43,251		5	%
Federal agency CMO	~~334~~284,~~751~~187		5049	%	~~406~~334,~~982~~751		50	%	~~486~~406,~~713~~982		5150	%
Federal agency MBS	1817,~~812~~192		3	%	2118,~~021~~812		3	%	2221,~~894~~021		23	%
Taxable municipal securities	~~226~~228,~~977~~221		3439	%	~~239~~226,~~277~~977		2934	%	~~275~~239,~~850~~277		29	%
Tax-exempt municipal securities	4535,~~419~~979		76	%	8345,~~653~~419		107	%	9283,~~672~~653		10	%
Corporate bonds	3,~~966~~419		1	%	63,~~294~~966		1	%	96,~~000~~294		1	%
Subordinated corporate bonds	108,~~285~~700		21	%	10,~~647~~285		12	%	710,~~135~~647		1	%
Total debt securities	$	~~661~~583,~~113~~930	100	%	$	~~816~~661,~~102~~113	100	%	$	~~956~~816,~~430~~102	100	%

Management continuously monitors and evaluates the debt securities portfolio to identify and assess risks within the portfolio, including, but not limited to, the impact of the current market interest-rate environment, prepayment risk, and credit quality. The mix of debt securities at December 31, 2023, compared to December 31, 2022, remained relatively unchanged. At December 31, 2023, the Company's debt securities portfolio consisted of 56% in U.S. Government or U.S. Federal Agency bonds and 41% in taxable and tax-exempt municipal bonds. The effective duration of debt securities portfolio at December 31, 2023 was approximately 5.1 years compared to 5.0 years at December 31, 2022.

49The mix of debt securities at December 31, 2024, compared to December 31, 2023, remained relatively unchanged. At December 31, 2024, the Company's debt securities portfolio consisted of 53% in U.S. government or U.S. federal agency bonds and 45% in taxable and tax-exempt municipal bonds. The effective duration of debt securities portfolio at December 31, 2024 was approximately 5.0 years compared to 5.1 years at December 31, 2023.

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The contractual maturity distribution as of December 31, ~~2023~~2024, of the debt securities portfolio with the weighted average tax-equivalent yield for each category is set forth below:

	Under 1 Year				>1 – 5 Years				>5 – 10 Years				Over 10 Years
(Dollars in thousands)	Amount		Yield		Amount		Yield		Amount		Yield		Amount		Yield
At amortized cost:
Federal agency obligations	$	5,006	4.20	%	$	—	—	%	$	—	—	%	$	—	—	%
U.S. Treasury securities	$	—	—	%	$	6,998	1.01	%	$	—	—	%	$	—	—	%
U.S. treasury securities	9,995		0.71	%	6,998		1.01	%	—		—	%	—		—	%
Federal agency CMO	7,745		2.77	%	715		2.57	%	4,968		1.60	%	334,073		1.85	%
Federal agency CMO	8,388		2.39	%	9,615		2.85	%	4,962		1.61	%	373,700		1.88	%
Federal agency MBS	—		—	%	5,700		2.72	%	306		2.69	%	14,192		2.12	%
Federal agency MBS	—		—	%	5,911		2.75	%	375		2.66	%	15,300		2.33	%
Taxable municipal securities	660		2.79	%	71,350		2.56	%	187,127		2.16	%	2,000		2.57	%
Taxable municipal securities	960		3.02	%	38,775		2.59	%	220,433		2.22	%	2,000		2.57	%
Tax-exempt municipal securities	4,481		3.23	%	16,979		3.36	%	13,862		3.49	%	1,137		2.96	%
Tax-exempt municipal securities	5,708		3.17	%	21,289		3.20	%	14,582		3.42	%	3,969		3.12	%
Corporate bonds	900		3.51	%	2,573		3.68	%	—		—	%	—		—	%
Corporate bonds	600		3.94	%	3,259		3.62	%	199		3.94	%	—		—	%
Subordinated corporate bonds	—		—	%	—		—	%	10,000		3.73	%	—		—	%
Subordinated corporate bonds	—		—	%	—		—	%	11,957		3.97	%	—		—	%
Total debt securities	$	13,786	2.97	%	$	104,315	2.62	%	$	216,263	2.31	%	$	351,402	1.87	%
Total debt securities	$	30,657	2.33	%	$	85,847	2.69	%	$	252,508	2.36	%	$	394,969	1.91	%
Total debt securities at fair value	$	13,684			$	98,143			$	186,185			$	285,918
Total debt securities at fair value	$	30,252			$	81,696			$	217,720			$	331,445

Scheduled contractual maturities shown above may not reflect the actual maturities of the investments. The actual MBS/CMO cash flows likely will be faster than presented above due to prepayments and amortization. Similarly, included in the table above are callable securities, comprised of municipal securities and corporate bonds, with a fair value of $~~133~~128.4 million, which can be redeemed by the issuer prior to the maturity presented above. Management considers these factors when evaluating the interest-rate risk in the Company's asset-liability management program.

Loans

This discussion should be read in conjunction with the material presented in Item 1, "Business," under the heading "Lending Products" of this Form 10-K, above.

At December 31, ~~2023~~2024, total loans amounted to $3.698 billion, an increase of $~~387~~415.13 million, or 12%, since December 31, ~~2022~~2023. As of December 31, ~~2023~~2024, total loans represented 8083% of total assets, compared to 7280% of total assets at December 31, ~~2022~~2023.

The following table sets forth the loan balances by certain loan categories at the dates indicated and the percentage of each category to total loans:

	December 31,
	2023				2022				2021
	2024				2023				2022
(Dollars in thousands)	Amount		Percent		Amount		Percent		Amount		Percent
Commercial real estate	$	2,064,737	58	%	$	1,921,410	61	%	$	1,680,792	58	%
Commercial real estate owner occupied	$	704,634	18	%	$	619,302	17	%	$	587,908	19	%
Commercial and industrial	430,749		12	%	414,490		13	%	412,070		14	%
Commercial real estate non-owner occupied	1,563,201		39	%	1,445,435		41	%	1,333,502		42	%
Commercial construction	585,113		16	%	424,049		13	%	410,443		14	%
Commercial and industrial	479,821		12	%	430,749		12	%	414,490		13	%
SBA PPP	—		—	%	—		—	%	71,502		2	%
Commercial construction	679,969		17	%	585,113		16	%	424,049		13	%
Total commercial loans	3,~~080~~427,~~599~~625		86	%	23,~~759~~080,~~949~~599		8786	%	2,~~574~~759,~~807~~949		8887	%
Residential mortgages	~~393~~443,~~142~~096		11	%	~~332~~393,~~632~~142		1011	%	~~256~~332,~~940~~632		910	%
Home equity	85103,~~375~~858		3	%	7985,~~807~~375		3	%	8079,~~467~~807		3	%
Consumer	8,~~515~~319		—	%	8,~~130~~515		—	%	8,~~470~~130		—	%
Total retail loans	~~487~~555,~~032~~273		14	%	~~420~~487,~~569~~032		1314	%	~~345~~420,~~877~~569		1213	%
Total loans	3,~~567~~982,~~631~~898		100	%	3,~~180~~567,~~518~~631		100	%	23,~~920~~180,~~684~~518		100	%
Allowance for credit losses	(5863,~~995~~498)				(5258,~~640~~995)				(4752,~~704~~640)
Net loans	$	3,~~508~~919,~~636~~400			$	3,~~127~~508,~~878~~636			$	23,~~872~~127,~~980~~878

5052

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AsAt of or for the year ended December 31, ~~2023~~2024:

•~~Commercial~~Non-investor ~~real~~commercial ~~estate~~ loans ~~increased $143.3 million~~, orconsisting ~~7%, compared to December 31, 2022. The commercial real estate segment was the largest segment~~ of ~~the loan portfolio and was comprised of approximately 30% in~~ owner ~~occupied loans and 70% in non~~-~~owner~~ occupied ~~loans. The composition of owner and non-owner occupied loans within the~~ commercial real estate ~~segment~~and ~~has~~commercial ~~remained~~and ~~relatively~~industrial ~~consistent~~loans, ~~compared~~increased to$134.4 ~~December 31~~million, ~~2022.~~or 13%.

~~◦Non-owner~~•Commercial ~~occupied commercial~~ real estate ~~loans~~non ~~were comprised of approximately 46% residential (multi~~owner-~~family~~occupied ~~and~~loans ~~1-4~~increased ~~family),~~$117.8 ~~11% retail~~million, ~~10%~~or ~~office and 10~~8% ~~in industrial warehouse~~. ~~All other collateral categories fell below 10% of total non-owner occupied commercial real estate loans.~~

~~◦Non-~~•The composition of owner and non owner-occupied commercial real estate ~~secured~~loans byhas ~~retail~~remained ~~amounted~~relatively consistent compared to 4December 31, 2023. Commercial real estate loans collectively make up 57% of the total ~~loans~~loan portfolio and ~~consisted~~were ~~mostly~~comprised ~~local~~of ~~strip~~approximately ~~plazas~~31% in owner-occupied loans and ~~not~~69% ~~large~~in ~~shopping~~non ~~centers~~owner-occupied orloans. ~~mall~~Growth ~~complexes~~since the prior period was primarily from continued customer demand and business development efforts.

◦Non~~-owner~~ owner-occupied commercial real estate ~~secured~~loans bywere ~~office~~comprised ~~buildings~~of ~~amounted~~approximately to28% 4multi-family, 16% of1-4 ~~total~~family, ~~loans~~12% retail, and ~~were~~11% ~~located~~office. ~~mainly~~All inother ~~suburban~~categories ~~areas~~fell ~~and~~below ~~were~~10% ~~modest~~of intotal ~~physical~~non ~~size~~owner-occupied commercial real estate loans.

~~•Commercial~~◦Non ~~and~~owner-occupied ~~industrial~~commercial real estate loans ~~increased~~secured ~~$16.3~~by ~~million,~~office orbuildings amounted to 4%, ~~compared~~of tototal ~~December 31,~~loans ~~2022~~which were located mainly in suburban areas and were modest in physical size.

~~•Commercial~~◦Non ~~construction~~owner-occupied ~~loans~~commercial ~~increased~~real ~~$161.1~~estate ~~million,~~loans orsecured ~~38%,~~by ~~since~~retail ~~December 31,~~amounted ~~2022,~~to ~~particularly~~5% inof ~~the~~total ~~4th~~loans ~~quarter~~and ofconsisted ~~2023, driven~~ primarily byof ~~residential~~local ~~development~~strip-mall ~~projects~~plazas toand ~~meet~~not ~~the~~large ~~strong~~shopping ~~demand~~centers inor ~~our~~mall ~~market area~~complexes.

◦•Commercial construction loans ~~were~~increased ~~comprised~~$94.9 ofmillion, ~~approximately~~or 2116% ~~multi-family~~, ~~18%~~due ~~residential~~to ~~condominiums,~~continued ~~16%~~growth ~~land~~driven ~~approved~~primarily ~~for~~by residential development, ~~12%~~projects ~~single~~to ~~residential~~meet ~~lots~~the ~~and~~strong ~~12%~~demand ~~commercial~~for ~~buildings.~~housing ~~All~~in ~~other~~our ~~collateral~~market ~~categories~~area, ~~fell~~partially ~~below~~offset ~~10%~~by ofpay ~~total~~downs, ~~commercial~~payoffs, and transfers of construction loans. to the permanent commercial real estate segments.

•~~Total retail loans increased $66.5 million, or 16%, since December 31, 2022.~~ The ~~increase~~composition ~~resulted~~of as the ~~Company~~commercial ~~retained~~construction ~~more~~segment ~~residential~~has ~~mortgage~~remained ~~production~~relatively onconsistent ~~its~~compared ~~balance sheet due~~ to ~~minimal~~December 31, ~~activity in the secondary market related to high market interest rates~~2023. ~~Residential secured one-to-four family mortgage loans continue to make up the largest portion of the retail segment.~~

At◦Commercial ~~December 31,~~construction ~~2023,~~loans ~~commercial~~were ~~loan~~comprised ~~balances~~of ~~participated~~approximately ~~out~~27% ~~to various banks amounted to $69.8 million~~multi-family, ~~compared~~22% toresidential ~~$59.1 million at December 31~~condominiums, ~~2022. These~~12% ~~balances~~single ~~participated~~residential ~~out~~lots toand ~~other~~11% ~~institutions~~land ~~are~~approved ~~not~~for ~~carried as assets on the Company's financial statements~~development. ~~Commercial~~All ~~loans originated by~~ other ~~banks~~collateral incategories ~~which~~each ~~the~~fell ~~Company~~below is10% ~~a participating institution are carried at the pro-rata share~~ of ~~ownership~~total ~~and~~commercial ~~amounted~~construction ~~to $126~~loans.6 ~~million and $94.8 million at December 31, 2023, and 2022, respectively.~~

•Total retail loans increased $68.2 million, or 14%, since December 31, 2023. The increase resulted from higher origination volume. Residential secured one-to-four family mortgage loans continue to make up the largest portion of the retail segment.

At December 31, 2024, commercial loan balances participated out to various banks amounted to $77.4 million, compared to $69.8 million at December 31, 2023. These balances participated out to other institutions are not carried as assets on the Company's financial statements. Commercial loans originated by other banks in which the Company is a participating institution are carried at the pro-rata share of ownership and amounted to $163.7 million, or 4.1% of total loans, and $126.6 million, or 3.5% of total loans, at December 31, 2024 and 2023, respectively.

See also Note 3, "Loans," to the Company's consolidated financial statements, contained in Item 8 of this Form 10-K, below, for information on related party loans, loans serviced for others and loans pledged as collateral.

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The following table sets forth the scheduled maturities of commercial real estate, commercial and industrial and commercial construction loans in the Company's portfolio at December 31, ~~2023~~2024. The table also sets forth the dollar amount of loans which are scheduled to mature after one year which have fixed or adjustable- rates.

(Dollars in thousands)	CommercialReal Estate Owner-Occupied		~~Commercial~~CommercialReal ~~&Industrial~~Estate Non Owner-Occupied		~~CommercialConstruction~~Commercial &Industrial		CommercialConstruction
Amounts due(1):
One year or less, and demand notes	$	~~102~~18,~~737~~469	$	~~282~~64,~~823~~731	$	~~298~~194,~~807~~040	$	308,004
After one year through five years	~~424~~149,~~598~~895		75367,~~830~~187		97144,~~426~~348		152,345
After five years through fifteen years	1379,~~226,432~~634		68804,~~772~~378		~~159~~126,~~743~~593		118,745
Beyond fifteen years	~~310~~157,~~970~~655		3325,~~324~~886		2914,~~137~~840		100,875
	$	2705,~~064,737~~653	$	~~430~~1,~~749~~562,182	$	~~585~~479,~~113~~821	$	679,969
Interest rate terms on amounts due after one year:
Fixed	$	~~186~~80,~~918~~086	$	71144,~~637~~817	$	28126,~~004~~048	$	62,546
Adjustable(2)	$	1607,~~775,082~~098	$	761,~~289~~352,634	$	~~258~~159,~~302~~733	$	309,419

____________________________________________

(1) Scheduled contractual maturities may not reflect the actual maturities of loans. The average maturity of loans may be shorter than their contractual terms principally due to prepayments and demand features.

(2) Adjustable-rate loans may have fixed initial periods before periodic rate adjustments begin.

Credit Risk

Non-performing assets are comprised of non-accrual loans (loans contractually past due, with respect to interest or principal, by 90 days, or where reasonable doubt exists as to the full and timely collection of interest or principal), and OREO. The designation of a loan or other asset as non-performing does not necessarily indicate that loan principal and interest will ultimately be uncollectible. However, management recognizes the greater risk characteristics of these assets and therefore considers the potential risk of loss on assets included in this category in evaluating the adequacy of the allowance for credit losses. The level of delinquent and non-performing assets is largely a function of economic conditions and the overall banking environment and the individual business circumstances of borrowers. Despite prudent loan underwriting, adverse changes within the Company's market area, or deterioration in local, regional, or national economic conditions, could negatively impact the Company's level of non-performing assets in the future.

See item (gh) "Loans" contained in Note 1, "Summary of Significant Accounting Policies" of this Form 10-K, for additional information on the Company's loan accounting policies and Credit Risk monitoring.

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The following table sets forth information regarding ~~non-performing~~the ~~assets~~Company's ~~and~~loan ~~delinquent~~portfolio ~~loans~~asset ~~60-89~~quality ~~days past due~~ as toof ~~interest or principal, held by~~ the ~~Company at the~~ dates indicated:

	December 31,
(Dollars in thousands)	~~2023~~2024			~~2022~~2023			~~2021~~2022
Total adversely classified loans	$	56,650		$	46,998		$	61,013
Non-performing loan summary:
Performing adversely classified loans	$	45,266		$	40,876		$	34,494
Commercial real estate owner-occupied	$	2,374		$	2,683		$	1,285
Non-accrual loan summary:
Commercial real estate non owner-occupied	3,457			2,686			2,070
Commercial real estate	$	5,369		$	3,355		$	22,870
Commercial and industrial	4,029			4,262			730
Commercial and industrial	4,262			730			1,542
Commercial construction	14,639			—			294
Commercial construction	—			294			1,045
Residential mortgages	1,931			1,526			1,532
Residential mortgages	1,526			1,532			794
Home equity	257			257			211
Home equity	257			211			246
Consumer	—			—			—
Consumer	—			—			25
Total non-accrual loans	26,687			11,414			6,122
Total non-performing loans	$	11,414		$	6,122		$	26,522
Total adversely classified loans	$	50,732		$	56,650		$	46,998
Total Loans	$	3,567,631		$	3,180,518		$	2,920,684
Total loans	$	3,982,898		$	3,567,631		$	3,180,518
Loans 60-89 days past due and still accruing to total loans	—		%	0.04		%	—		%
Adversely classified loans to total loans	1.27		%	1.59		%	1.48		%
Non-performing loans to total loans	0.32		%	0.19		%	0.91		%
Loans 60-89 days past due and still accruing to total loans	0.07		%	—		%	0.04		%
Non-performing assets to total assets	0.26		%	0.14		%	0.60		%
Non-performing loans to total loans	0.67		%	0.32		%	0.19		%
Allowance for credit losses for loans	$	58,995		$	52,640		$	47,704
Non-performing assets to total assets	0.55		%	0.26		%	0.14		%
Allowance for credit losses for loans to non-performing loans	516.87		%	859.85		%	179.87		%
Allowance for credit losses for loans	$	63,498		$	58,995		$	52,640
Allowance for credit losses for loans to total loans	1.65		%	1.66		%	1.63		%
Allowance for credit losses for loans to non-performing loans	237.94		%	516.87		%	859.85		%
Allowance for credit losses for loans to total loans	1.59		%	1.65		%	1.66		%

Non-accrual loans that were not adversely classified amounted to $30 thousand and $3 thousand at December 31, 2023 and December 31, 2021, respectively. At December 31, 2022, there were no non-accrual loans that were not adversely classified.

Loans which are evaluated to be of weaker credit quality are classified as adverse and placed on the Company's "watch asset list" and reviewed on a more frequent basis by management. Adversely classified loans may be performing in accordance with their original terms or past due in respect to principal or interest and therefore additionally classified as non-performing loans.

~~Adversely~~The ~~classified~~increase ~~loans~~in asnon-performing aloans ~~percentage~~from ofDecember 31, ~~total~~2023 ~~loans~~to ~~outstanding at~~ December 31, ~~2023~~2024 ~~increased~~was ~~compared~~attributable primarily to ~~low~~two ~~levels~~individually atevaluated ~~December 31,~~commercial ~~2022~~construction loans, ~~however~~which ~~the~~were ~~December 31,~~placed ~~2023~~on ~~level~~non-accrual ~~was~~in ~~also~~the ~~considered~~first ~~low~~and bythird ~~historical~~quarters ~~comparisons~~of 2024.

•The ~~increase~~commercial inconstruction ~~non-accrual~~loan ~~loans~~that ~~from~~was ~~December 31,~~placed ~~2022~~on tonon-accrual ~~December 31,~~during ~~2023~~the ~~was~~first ~~attributable~~quarter ~~primarily~~of to2024 ~~one~~was ~~commercial~~secured ~~loan~~by ~~relationship~~a ~~with~~multi-family aproperty, ~~net~~had ~~book~~an ~~value~~outstanding balance of $47.89 million. ~~The~~and ~~relationship~~a ~~consists~~specific reserve of a $~~1.4~~340 ~~million~~thousand ~~commercial~~at ~~real~~December 31, ~~estate~~2024. ~~loan~~Due ~~and~~to athe ~~$3.4 million~~on-going ~~commercial~~construction and ~~industrial~~improvement ~~loan.~~in Atthe valuation of the collateral property, which had an approximate percentage of completion of 82% at December 31, ~~2023~~2024, ~~the~~specific ~~relationship~~reserves ~~was~~were ~~individually~~decreased ~~evaluated~~by ~~and~~$1.3 ~~had~~million asince ~~specific~~it ~~reserve~~was ~~allocation~~placed ofon $2non-accrual.~~5 million.~~

•The ~~Company~~commercial ~~had~~construction noloan ~~OREO~~that atwas ~~December~~placed on non-accrual during the third quarter of 2024 was a participation loan originated by another local institution secured by a lab and office space building. Enterprise's participation in the outstanding balance was $6.7 ~~31,~~million ~~2023,~~and a specific reserve of $3.3 million was assigned at December 31, ~~2022~~2024. orAt December 31, ~~2021~~2024, ~~and~~the ~~therefore~~building ~~non-performing~~was ~~loans~~vacant ~~were~~while the ~~only~~lead ~~component~~bank ofworks ~~non-performing~~with ~~assets~~the borrowers to sell the facility. The Company had no other significant exposure to loans secured by lab space at ~~those~~December 31, ~~periods~~2024.

The Company had no OREO at December 31, 2024, 2023 or 2022, and therefore non-performing loans were the only component of non-performing assets at those periods.

ACL for Loans

There have been no material changes to the Company's ACL for loans methodology, underwriting practices, or credit risk management system used to estimate credit loss exposure since December 31, ~~2022~~2023. See item (hj) "Credit Risk Management and ACL for Loans Methodology" contained in Note 1, "Summary of Significant Accounting Policies" of this Form 10-K, for additional information on the Company's loan accounting policies, Credit Risk monitoring, and ACL methodology.

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The following table sets forth the allocation of the Company's ACL among the categories of loans, the percentage of ACL allocated by category of loans to the total ACL, and the percentage of loans in each category to total loans for the periods ending on the respective dates indicated:

	December 31,
	2023						2022						2021
	2024						2023						2022
(Dollars in thousands)	ACL Allocation		% of ACL Allocation		% of Total Loans		ACL Allocation		% of ACL Allocation		% of Total Loans		ACL Allocation		% of ACL Allocation		% of Total Loans
Commercial real estate	$	38,074	65	%	58	%	$	36,564	69	%	61	%	$	31,847	67	%	58	%
Commercial real estate owner-occupied	$	10,813	17	%	18	%	$	10,455	18	%	17	%	$	10,304	19	%	19	%
Commercial and industrial	11,089		19	%	12	%	8,896		17	%	13	%	9,574		20	%	14	%
Commercial real estate non owner-occupied	27,774		44	%	39	%	27,619		47	%	41	%	26,260		50	%	42	%
Commercial construction	6,787		11	%	16	%	3,961		8	%	13	%	4,090		8	%	14	%
Commercial and industrial	9,940		16	%	12	%	11,089		19	%	12	%	8,896		17	%	13	%
SBA PPP	—		—	%	—	%	—		—	%	—	%	—		—	%	2	%
Commercial construction	11,765		19	%	17	%	6,787		11	%	16	%	3,961		8	%	13	%
Residential mortgages	2,~~152~~205		43	%	11	%	2,~~255~~152		4	%	1011	%	12,~~405~~255		34	%	910	%
Home equity	~~579~~746		1	%	3	%	~~633~~579		1	%	3	%	~~465~~633		1	%	3	%
Consumer	~~314~~255		—	%	—	%	~~331~~314		1—	%	—	%	~~323~~331		1	%	—	%
Total	$	5863,~~995~~498	100	%	100	%	$	5258,~~640~~995	100	%	100	%	$	4752,~~704~~640	100	%	100	%

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The following table summarizes the activity in the ACL for loans for the periods indicated:

	Years Ended December 31,
(Dollars in thousands)	~~2023~~2024			~~2022~~2023			~~2021~~2022			~~2020~~2021			~~2019~~2020
Beginning balance	$	5258,~~640~~995		$	4752,~~704~~640		$	4447,~~565~~704		$	3344,~~614~~565		$	33,~~849~~614
Day one CECL adjustment	—			—			~~6,560~~—			—6,560			—
Provision charged to operations	6,460			5,175			543			12,499			1,180
Provision for credit losses on loans	4,709			6,460			5,175			543			12,499
Recoveries on charged-off loans:
Commercial real estate	—			—			39			—			—
Commercial real estate owner-occupied	—			—			—			39			—
Commercial and industrial	497			242			139			265			734
Commercial real estate non owner-occupied	—			—			—			—			—
Commercial construction	1			—			105			—			—
Commercial and industrial	366			497			242			139			265
SBA PPP	—			—			—			—			—
Commercial construction	—			1			—			105			—
Residential mortgages	—			—			—			—			—
Home equity	127			1112			7111			4571			945
Consumer	1739			1917			919			369			3536
Total recovered	$	~~527~~412		$	~~272~~527		$	~~363~~272		$	~~346~~363		$	~~778~~346
Charged-off loans:
Commercial real estate	—			250			1,825			—			—
Commercial real estate owner-occupied	—			—			—			—			—
Commercial and industrial	596			210			2,477			561			2,069
Commercial real estate non owner-occupied	—			—			250			1,825			—
Commercial construction	—			—			—			1,300			—
Commercial and industrial	519			596			210			2,477			561
SBA PPP	—			—			—			—			—
Commercial construction	—			—			—			—			1,300
Residential mortgages	—			—			—			—			—
Home equity	—			—			—			—			—
Consumer	3699			5136			2551			3325			~~124~~33
Total charged-off	$	~~632~~618		$	~~511~~632		$	~~4,327~~511		$	14,~~894~~327		$	21,~~193~~894
Net loans charged-off	$	~~105~~206		$	~~239~~105		$	~~3,964~~239		$	13,~~548~~964		$	1,~~415~~548
Ending balance	$	5863,~~995~~498		$	5258,~~640~~995		$	4752,~~704~~640		$	4447,~~565~~704		$	3344,~~614~~565
Average loans outstanding	$	3,~~328~~761,~~729~~041		$	3,~~035~~328,~~012~~729		$	23,~~969~~035,~~371~~012		$	2,~~984~~969,~~100~~371		$	2,~~430~~984,~~912~~100
Net charge-offs to average loans	—0.01		%	~~0.01~~—		%	0.1301		%	0.0513		%	0.0605		%
Recoveries to charge-offs	8366.3967		%	5383.2339		%	853.3923		%	188.2739		%	3518.4827		%
Net loans charged-off to allowance	0.1832		%	0.4518		%	80.3145		%	38.4731		%	43.2147		%

~~Reserve for unfunded commitments~~ 56

The reserve for unfunded commitments is classified within "Other liabilities" on the Company's Consolidated Balance Sheets. The estimate of credit loss incorporates assumptions for both the likelihood and amount of funding over the estimated life of the commitments, including adjustments for current conditions and reasonable and supportable forecasts. Management periodically reviews and updates its assumptions for estimated funding rates.

The Company’s reserve for unfunded commitments amounted to $7.1 million as of December 31, 2023 and $4.3 million at December 31, 2022. The provision for unfunded commitments amounted to $2.8 million compared to $625 thousand for the years ended December 31, 2023 and December 31, 2022, respectively. The increase in the provision for unfunded commitments resulted primarily from growth in the Company's off-balance sheet commercial construction and commercial real estate commitments.

Based on the foregoing, management believes that the Company's ACL for loans and reserve for unfunded commitments is adequate as of December 31, 2023.

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Reserve for unfunded commitments

The reserve for unfunded commitments is classified within "Other liabilities" on the Company's Consolidated Balance Sheets. The estimate of credit loss incorporates assumptions for both the likelihood and amount of funding over the estimated life of commitments which are not unconditionally cancellable, including adjustments for current conditions and reasonable and supportable forecasts. Management periodically reviews and updates its assumptions for estimated funding rates.

The Company’s reserve for unfunded commitments amounted to $4.4 million as of December 31, 2024 and $7.1 million at December 31, 2023. The decrease in the reserve for unfunded commitments resulted primarily by a decrease in off-balance sheet commitments that required a reserve and, to a lesser extent, the impact of reduced general reserve factors in our ACL model during the year ended December 31, 2024.

Based on the foregoing, management believes that the Company's ACL for loans and reserve for unfunded commitments is adequate as of December 31, 2024.

Deposits

As of December 31, ~~2023~~2024, total deposits amounted to $34.9819 billion, aan ~~decrease~~increase of $58210.32 million, or 15%, compared to December 31, ~~2022~~2023. Total deposits represented 8987% of total assets at December 31, ~~2023,~~2024 and 9189% at December 31, ~~2022~~2023.

The increase was driven primarily by increases in money market account balances of $51.5 million, or 4%, and CD account balances of $164.1 million, or 32%, as customers sought higher yielding deposit products. Lower cost checking and savings accounts comprised 49% of total deposits at December 31, 2024, compared to 52% at December 31, 2023.

The following table sets forth the deposit balances by certain categories as of the dates indicated and the percentage of each category to total deposits:

	December 31, 2023				December 31, 2022				December 31, 2021
	December 31, 2024				December 31, 2023				December 31, 2022
(Dollars in thousands)	Amount		Percent		Amount		Percent		Amount		Percent
Non-interest checking	$	1,~~070~~077,~~104~~998	2726	%	$	1,~~361~~061,~~588~~009	3427	%	$	1,~~364~~351,~~258~~932	34	%
Interest-bearing checking	~~697~~699,~~632~~671		1817	%	~~678~~697,~~715~~632		1718	%	~~743~~678,~~587~~715		1917	%
Savings	~~285~~270,~~770~~367		76	%	~~326~~294,~~666~~865		87	%	~~310~~336,~~244~~322		8	%
Money markets	1,~~402~~454,~~939~~443		35	%	1,~~381~~402,~~645~~939		3435	%	1,~~355~~381,~~701~~645		34	%
CDs	~~521~~685,~~076~~219		1316	%	~~287~~521,~~192~~076		713	%	~~206~~287,~~449~~192		57	%
Deposits	$	34,~~977~~187,~~521~~698	100	%	$	43,~~035~~977,~~806~~521	100	%	$	34,~~980~~035,~~239~~806	100	%

~~During~~The ~~2023~~Company offers its customers the ability to enhance FDIC insurance coverage by electing to participate a portion of their deposit balance into nationwide deposit networks, with an equal and reciprocal balance deposited to the Company ~~experienced~~through athe ~~shift~~network. inThe Company’s total customer deposit ~~mix~~balances asreflect ~~funds~~the ~~moved~~reciprocal ~~primarily~~deposits received from ~~non-interest~~other ~~checking~~banks' ~~accounts~~customers toparticipating ~~higher~~in ~~yielding~~the ~~certificates~~programs. Essentially, the equivalent of ~~deposit~~the original customers' deposited funds comes back to the Company and are carried within the appropriate category under total customer deposits. Additional capacity to utilize these enhanced FDIC insured products exceeds the Company's total deposits balance. The Company's balances in these reciprocal products were $903.2 million, $835.0 million, and $589.7 million at December 31, 2024, 2023 and 2022, respectively. Savings accounts are not eligible for this program.

The Company offers its customers the ability to enhance FDIC insurance coverage by electing to participate a portion of their deposit balance into nationwide deposit networks, with an equal and reciprocal balance deposited to the Company through the network. The Company’s total customer deposit balances reflect the reciprocal deposits received from other banks' customers participating in the programs. Essentially, the equivalent of the original customers' deposited funds comes back to the Company and are carried within the appropriate category under total customer deposits. Additional capacity to utilize these enhanced FDIC insured products exceeds the Company's total deposits balance. The Company's balances in these reciprocal products were $835.0 million, $589.7 million, and $546.7 million at December 31, 2023, December 31, 2022, and December 31, 2021, respectively. Savings accounts are not eligible for this program.

The following table shows the scheduled maturities of CDs greater than $250,000:

(Dollars in thousands)

December 31, ~~2023~~2024

December 31, ~~2022~~2023

Due in three months or less

49140,~~545~~066

1249,~~696~~545

Due in greater than three months through six months

8264,~~034~~510

1782,~~092~~034

Due in greater than six months through twelve months

8679,~~622~~893

4686,~~423~~622

Due in greater than twelve months

722,~~086~~792

237,~~223~~086

Total CDs greater than $250,000

~~225~~307,~~287~~261

99225,~~434~~287

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The table below sets forth a comparison of the Company's average deposits, and average rates paid for the periods indicated~~, as well as the percentage of each deposit category to total average deposits~~. The annualized average rate on total deposits reflects both interest-bearing and non-interest-bearing deposits.

	Year ended December 31,
	2023				2022			2021
	2024				2023			2022
(Dollars in thousands)	AverageBalance		AverageRate			AverageBalance		AverageRate		AverageBalance		AverageRate
Non-interest checking	$	1,~~233~~070,~~908~~290	—	%		$	1,~~422~~224,~~618~~101	—	%	$	1,~~341~~412,~~633~~694	—	%
Interest checking	~~685~~720,~~347~~753		0.3868	%		~~696~~685,~~639~~347		0.0738	%	~~651~~696,~~985~~639		0.0307	%
Savings	~~301~~283,~~172~~842		0.1631	%		~~336~~310,~~881~~979		0.0516	%	~~293~~346,~~868~~805		0.0405	%
Money market	1,~~417~~494,~~613~~203		12.9686	%		1,~~348~~417,~~254~~613		01.2596	%	1,~~303~~348,~~170~~254		0.0925	%
Total interest-bearing non-term deposits	2,~~404~~498,~~132~~798		1.2994	%		2,~~381~~413,~~774~~939		01.1728	%	2,~~249~~391,~~023~~698		0.0717	%
CDs	~~415~~621,~~840~~576		34.2351	%		~~221~~415,~~050~~840		03.7323	%	~~224~~221,~~627~~050		0.7673	%
Total customer deposits	4,053,880		1.09	%		4,025,442		0.14	%	3,815,283		0.09	%
Total	$	4,190,664	1.83	%		$	4,053,880	1.09	%	$	4,025,442	0.14	%
Brokered deposits	—		—	%		—		—	%	45,617		1.46	%
Total	$	4,053,880	1.09	%		$	4,025,442	0.14	%	$	3,860,900	0.10	%

Borrowed Funds

At December 31, ~~2023~~2024 and ~~December 31~~2023, ~~2022,~~ borrowed funds amounted to $25153.81 million and $325.28 million, respectively, and were comprised of advances from the FRB, and FHLB ~~and~~as well as secured borrowings from the NH BFA.

At December 31, 2024, the Company had the capacity to borrow additional funds from the FHLB and FRB of up to approximately $670.0 million and $300.0 million, respectively. Additionally, the Company had the capacity to borrow unsecured brokered funding through existing broker relationships. The Company's wholesale funding sources included primarily borrowing capacity at the FHLB, FRB and brokered deposits. At December 31, 2024, the Company had no unsecured brokered deposits.

The table below shows the comparison of the Company's average borrowed funds and average rates paid for the periods indicated:

	Year ended December 31,
	2023				2022				2021
	2024				2023				2022
(Dollars in thousands)	AverageBalance		AverageCost		AverageBalance		AverageCost		AverageBalance		AverageCost
FHLB advances	$	34,~~548~~886	2.6597	%	$	3,~~266~~548	12.5965	%	$	73,~~632~~266	01.7959	%
FRB advances	~~534~~45,838		34.3986	%	—534		—3.39	%	—		—	%
Other borrowed funds	15,~~008~~535		0.1395	%	201,008		—0.13	%	—20		—	%
Total borrowed funds	$	556,~~090~~259	24.2331	%	$	35,~~286~~090	12.5823	%	$	73,~~632~~286	01.7958	%

In the table above, "Other borrowings" represent term NH BFA advances or advances from correspondent banks, advanced as part of our annual test of these external funding facilities.

Subordinated Debt

The Company had outstanding subordinated debt, net of deferred issuance costs, of $59.58 million at December 31, ~~2023~~2024, and $59.25 million at December 31, ~~2022~~2023. The subordinated notes are due in 2030 and have a fixed rate of 5.25% through July 15, 2025, at which point the notes become callable and floating through maturity. The interest rate shall reset quarterly to an interest rate per annum equal to a benchmark rate that is expected to be the then current three-month Secured Overnight Financing Rate, as published by the Federal Reserve Bank of New York, plus 517.5 basis points, payable quarterly in arrears. The subordinated notes qualify as Tier 2 capital at the holding company of the bank for regulatory purposes.

Shareholders' Equity

Total shareholders' equity amounted to $~~329~~360.17 million at December 31, ~~2023~~2024, compared to $~~282~~329.31 million at December 31, ~~2022~~2023, an increase of $4631.96 million, or 1710%. The increase was due primarily to an increase in retained earnings of $26.89 million, consisting primarily of $38.17 million in net income less 9$10.73 million in dividends, net of reinvestment~~, and a decrease in the accumulated other comprehensive loss of $16~~.~~4 million resulting from lower market interest rates and the sale of $84.8 million in debt securities in the second quarter of 2023.~~

~~For the years ended December 31, 2023 and December 31, 2022, the Company declared cash dividends of $11.2 million and~~ 58

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For the years ended December 31, 2024 and 2023, the Company declared cash dividends of $911.9 million and $11.2 million, respectively, and shareholders utilized the dividend reinvestment portion of the Company's dividend reinvestment and direct stock purchase plan to purchase aggregate shares of the Company's common stock amounting to 5054,~~443~~698 shares and 4050,~~640~~443 shares, totaling $1.56 million and $1.45 million, respectively.

Derivatives and Hedging

Derivatives designated as hedging instruments

~~During~~As ~~the~~of ~~year ended~~ December 31, 2024 and 2023, the Company ~~entered~~had ~~into~~ three pay fixed, receive float, interest rate swap agreements ~~all~~ with a ~~2-year~~cumulative ~~term~~notional value of $100.0 million, of which $50.0 million matures in June 2025 and $50.0 million matures in September 2025. Under these interest rate swap agreements, the Company pays a weighted average fixed interest rate of 4.68% and receives the Secured Overnight Financing Rate. At December 31, ~~2023,~~2024 ~~the~~and ~~notional value of interest rate swap agreements designated as fair value hedges amounted to $100.0~~December ~~million~~31, ~~and~~2023, the fair value of these interest rate swap agreements, carried on the Company's Consolidated Balance Sheets as a liability, was $~~760~~336 thousand atand ~~December 31~~$760 thousand, ~~2023~~respectively.

Derivatives not subject to hedge accounting

The notional value of back-to-back interest-rate swaps with customers and counterparties amounted to $73.52 million at December 31, ~~2023~~2024 and $7.85 million at December 31, ~~2022~~2023. The fair value of assets and corresponding liabilities associated with these swaps and carried on the Company's Consolidated Balance Sheets was $~~630~~321 thousand at December 31, ~~2023~~2024, compared to $~~782~~630 thousand at December 31, ~~2022~~2023.

Risk Participation Agreements

The notional value of RPAs sold amounted to $46.94 million at December 31, ~~2023~~2024 and $2446.79 million at December 31, ~~2022~~2023. The fair value of RPAs, carried on the Company's Consolidated Balance Sheets as a liability, was $6525 thousand at December 31, ~~2023~~2024 and $7365 thousand at December 31, ~~2022~~2023.

Liquidity

Liquidity is the ability to meet cash needs arising from, among other things, fluctuations in loans, investments, deposits, and borrowings. Liquidity management is the coordination of activities so that cash needs are anticipated and met readily and efficiently. The Company's liquidity policies are set and monitored by the Company's Board. The duties and responsibilities related to asset-liability management matters are also covered by the Board. The Company's asset-liability objectives are to engage in sound balance sheet management strategies, maintain liquidity, provide and enhance access to a diverse and stable source of funds, provide competitively priced and attractive products to customers and conduct funding at a low-cost relative to current market conditions. Funds gathered are used to support current commitments, to fund earning asset growth, and to take advantage of selected leverage opportunities.

The Company's liquidity is maintained by projecting cash needs, balancing maturing assets with maturing liabilities, monitoring various liquidity ratios, monitoring deposit flows, maintaining cash flow within the investment portfolio, and maintaining wholesale funding resources.

The Company's wholesale funding sources included primarily borrowing capacity at the FHLB, FRB and brokered deposits. At December 31, 2023, the Bank had the capacity to borrow additional funds from the FHLB and FRB of up to approximately $860.0 million and $320.0 million, respectively.

Management believes that the Company has adequate liquidity to meet its obligations. However, if general economic conditions or other events, cause these sources of external funding to become restricted or are eliminated, the Company may not be able to raise adequate funds or may incur substantially higher funding costs or operating restrictions in order to raise the necessary funds to support the Company's operations and growth.

Capital Resources

The principal cash requirement of the Company is the payment of interest on subordinated debt and the payment of dividends on our common stock. The Company's Board may approve cash dividends on a quarterly basis after careful analysis and consideration of various factors, including our capital position, economic conditions, growth rates, earnings performance and projections as well as strategic initiatives and related regulatory capital requirements.

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The Company's primary source of cash is dividends paid by the Bank, which are limited to the Bank's net income for the current year plus its retained net income for the prior two years.

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The Company is subject to various regulatory capital requirements administered by the federal banking agencies. The Company's capital policies and capital levels are monitored internally on a quarterly basis and capital planning is reviewed at least annually by the Board.

Failure to meet minimum capital requirements can initiate or result in certain mandatory and possible additional discretionary supervisory actions by regulators, which if undertaken, could have a material adverse effect on the Company's consolidated financial condition. At December 31, ~~2023~~2024, the capital levels of both the Company and the Bank complied with all applicable minimum capital requirements of the Federal Reserve Board and the FDIC, respectively. Additionally, the Company met the definition of "well-capitalized" under the applicable Federal Reserve Board regulations and the Bank qualified as "well-capitalized" under the prompt corrective action regulations of Basel III and the FDIC.

The Company's total capital and tier 1 capital to risk-weighted assets amounted to 13.1206% and 10.3438%, respectively, at December 31, ~~2023~~2024, compared to 13.4912% and 10.5634%, respectively, at December 31, ~~2022~~2023. ~~The~~Tier ~~decrease~~1 incapital ~~each~~to ~~ratio~~average ~~was~~assets ~~due~~amounted ~~primarily~~ to ~~strong~~8.94% ~~commercial~~at ~~loan~~December 31, ~~growth~~2024, ~~partially~~compared ~~offset~~to by8.74% anat ~~increase in retained earnings~~December 31, ~~over the respective periods~~2023.

~~Tier~~See 1also ~~capital~~Note 12, "Shareholders' Equity," to ~~average~~the ~~assets~~Company's ~~amounted~~consolidated tofinancial statements, contained in Item 8~~.74%~~ atof ~~December 31,~~this ~~2023~~Form 10-K below, ~~compared~~for additional information regarding the capital requirements applicable to ~~8.10%~~the Company and the Bank and their respective capital levels at December 31, ~~2022~~2024. ~~The~~For ~~increase~~additional ~~was~~information ~~driven~~on ~~primarily~~the byCompany's ~~the~~capital ~~increase~~planning, insee ~~retained~~the ~~earnings~~section ~~noted~~entitled ~~above,~~"Capital ~~partially~~Resources" ~~offset~~contained byin anItem ~~increase~~1, in"Business," ~~average~~of ~~assets.~~this Form 10-K.

See also Note 12, "Shareholders' Equity," to the Company's consolidated financial statements, contained in Item 8 of this Form 10-K below, for additional information regarding the capital requirements applicable to the Company and the Bank and their respective capital levels at December 31, 2023. For additional information on the Company's capital planning, see the section entitled "Capital Resources" contained in Item 1, "Business," of this Form 10-K.

Contractual Obligations and Commitments

The Company is required to make future cash payments under various contractual obligations. The following table summarizes the contractual cash obligations at December 31, ~~2023~~2024:

	Payments Due by Period
(Dollars in thousands)	Total		~~With-in1~~Within1 Year		>1 – 5Years		>5 – 15Years		After 15Years
Contractual cash obligations:
CDs	$	~~521~~685,~~076~~219	$	~~494~~650,~~320~~541	$	2634,~~718~~676	$	382	$	—
FHLB borrowings	2147,~~830~~746		—145,000		—		—391		2,~~830~~355
Other borrowings	225,~~938~~390		~~20,000~~—		270		—2,837		2,~~668~~283
Subordinated debt	60,000		—		—		—		60,000
Supplemental retirement plans	1,~~387~~111		276		~~992~~811		~~119~~24		—
Operating lease obligations	3937,~~049~~598		1,~~450~~457		5,~~876~~901		14,~~426~~153		1716,~~297~~087
Total contractual obligations	$	~~647~~937,~~280~~064	$	~~516~~797,~~046~~274	$	3341,~~856~~658	$	1417,~~583~~407	$	8280,~~795~~725

The Company is also party to financial instruments with off-balance sheet risk in the normal course of business to meet the financing needs of its customers. The instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized in the Consolidated Balance Sheets. The contractual amounts of these instruments reflect the extent of involvement the Company has in the particular classes of financial instruments.

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The following table summarizes the contractual commitments at December 31, ~~2023~~2024:

	Commitment Expiration — By Period
(Dollars in thousands)	Total		~~With-in1~~Within1 Year		>1 – 5Years		>5 – 15Years		After 15Years
Other Commitments:
Unadvanced loans and lines	$	1,~~421~~107,~~809~~168	$	~~840~~709,~~491~~247	$	~~468~~268,~~068~~788	$	~~111~~120,~~664~~389	$	18,~~586~~744
Commitments to originate loans	4135,~~326~~327		4135,~~326~~327		—		—		—
Letters of credit	1520,~~610~~166		1316,~~338~~089		23,~~232~~953		40124		—
Commitments to sell loans	200		200		—		—		—
Commitments to originate loans for sale	1,008		1,008		—		—		—
Customer related interest-rate swaps notional amount(1)	7,524		—		—		4,144		3,380
Commitments to sell loans	520		520		—		—		—
Risk participation agreement notional amount	46,910		—		—		—		46,910
Customer related interest-rate swaps notional amount(1)	3,212		—		—		—		3,212
Total commitments	$	1,533,379	$	895,555	$	470,300	$	115,848	$	51,876
Risk participation agreement notional amount	46,387		—		—		—		46,387
Total commitments	$	1,213,788	$	762,191	$	272,741	$	120,513	$	58,343

~~_______________________________________________~~__________________________________________________________________________________

(1) Offsetting positions to these interest-rate swaps are entered into with a counterparty. Notional principal amounts are not actually exchanged.

Wealth Management

Wealth assets under management and wealth assets under administration are not carried as assets on the Company's consolidated balance sheets. The Company provides a wide range of wealth management services, including investment management, brokerage, annuities, trust, and 401(k) plan administration.

Wealth assets under management amounted to $1.0823 billion at December 31, ~~2023~~2024. The increase of $~~186~~152.3 million, or 2114%, compared to December 31, ~~2022~~2023, was due primarily to ~~net asset growth from new and expanded client relationships and~~ an increase in market values and new asset growth.

Wealth assets under administration amounted to $~~242~~305.39 million at December 31, ~~2023~~2024. anThe increase of $4363.86 million, or 2226%, compared to December 31, ~~2022~~2023, ~~resulting~~resulted primarily from an increase in market values.

Impact of Inflation and Changing Prices

The Company's asset and liability structure is substantially different from that of an industrial company in that virtually all assets and liabilities of the Company are monetary in nature. Management believes the impact of inflation on financial results depends upon the Company's ability to react to changes in interest rates and by such reaction, reduce the inflationary impact on performance. Interest rates do not necessarily move in the same direction, or at the same magnitude, as the prices of other goods and services. As discussed previously, management seeks to manage the relationship between interest rate-sensitive assets and liabilities in order to protect against wide net interest income fluctuations, including those resulting from inflation.

Various information shown elsewhere in this annual report will assist in the understanding of how well the Company is positioned to react to changing interest rates and inflationary trends. In particular, additional information related to the net interest margin sensitivity analysis is contained in Item 7A of this Form 10-K below and other maturity and repricing information of the Company's interest rate-sensitive assets and liabilities is contained in this Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this Form 10-K under the heading "Financial Condition" in this report.

Accounting Policies/Critical Accounting Estimates

The Company's significant accounting policies are described in Note 1, "Summary of Significant Accounting Policies," to the consolidated financial statements contained in Item 8, "Financial Statements and Supplementary Data," of this Form 10-K. In applying these accounting policies, management is required to exercise judgment in determining many of the methodologies, assumptions and estimates to be utilized. Certain of the critical accounting estimates are more dependent on such judgment and in some cases may contribute to volatility in the Company's reported financial performance should the assumptions and estimates used be incorrect or change over time due to changes in circumstances. The most significant areas in which management applies critical assumptions and estimates are: the estimates of the allowance for credit losses for loans, and available-for-sale securities, the reserve for unfunded commitments and the impairment review of goodwill.

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ACL for Loans

The CECL methodology requires early recognition of credit losses using a lifetime credit loss measurement approach that takes into consideration reasonable and supportable forecasts. The ACL for loans is established through a provision for credit losses, recorded as a direct charge to earnings. The ACL for loans is a valuation account that is deducted from the amortized cost to present the net amount of the loan portfolio expected to be collected. Credit losses are charged against the ACL for loans when management believes that the collectability of the amortized cost of the loan's principal balance is unlikely. Recoveries on loans previously charged-off are credited to the ACL for loans, generally at the time cash is received on a charged-off account.

Arriving at an appropriate level of ACL for loans involves a high degree of management judgement. The underlying assumptions, estimates and assessments used to estimate the ACL for loans reflects the Company’s best estimate of model assumptions and forecasted conditions at that time. Changes in such estimates can significantly affect the ACL for loans and the provision for credit losses. In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company's ACL for loans. It is possible and likely that the Company will experience credit losses that are different from the current estimates. The Company uses a systematic methodology to measure the amount of estimated credit losses. The methodology applies general reserves for larger groups of homogeneous loans segmented by loan type and specific reserves for loans individually evaluated.

The Company uses a systematic methodology to measure the amount of estimated credit losses. The methodology applies general reserves for larger groups of homogeneous loans segmented by loan type and specific reserves for loans individually evaluated.

In making its assessment on the adequacy of the general reserves of ACL for loans, management considers several quantitative and qualitative factors from internal and external sources relating to past events, current conditions, and reasonable and supportable forecasts, including: the expected duration of the loans segments, the trends in risk classification of individual loans; individual review of larger and higher risk problem assets; the level of delinquent, non-performing, and individually evaluated loans; the level of hardship loan modifications; foreclosure activity; net charge-offs; commercial concentrations by industry, property type and real estate location; the growth and composition of the loan portfolio; as well as trends in the general levels of these indicators. In addition, management monitors expansion in the Company's geographic market area, the experience level of lenders and any changes in underwriting criteria, the strength of the local and national economy, including general conditions in the multi-family, commercial real estate and development and construction markets in the Company's local region as well as changes in current and forecasted economic conditions, such as changes in gross domestic product, the unemployment rate and new jobs created, real estate values, commercial vacancy rates, recession risk estimates and other relevant economic factors. Management also performs a qualitative assessment beyond model estimates and applies qualitative adjustments as management deems necessary, acknowledging that it can take time for economic results to work through the loan portfolio with charge-offs often occurring years after the economic downturn.

For loans individually evaluated, the Company generally requires an internal evaluation or independent appraisal of the collateral supporting the loan. However, these assessment methods are only an estimate of the value of the collateral at the time the assessment is made and involve estimates and assumptions. An error in fact, estimate or judgment could adversely affect the reliability of the valuation. Furthermore, changes in those estimates due to the economic environment and events occurring after the initial assessment, may cause the value of the collateral to differ significantly from the initial valuations.

Reserve for unfunded commitments

The reserve for unfunded commitments is included in the line item "Accrued expenses and other liabilities" on the Company’s Consolidated Balance Sheets. The estimate of credit loss incorporates assumptions for both the likelihood and amount of funding over the estimated life of the commitments, including adjustments for current conditions and reasonable and supportable forecasts. Management periodically reviews and updates its assumptions for estimated funding rates.

ACL for Available-for-Sale Securities

There are inherent risks associated with the Company's investment activities that could adversely impact the fair value and the ultimate collectability of the Company's investments. The Company primarily invests in debt securities. At December 31, ~~2023~~2024, the Company also held immaterial amounts of equity securities and FHLB stock.

The Company measures expected credit losses on available-for-sale securities based upon the unrealized gain or loss position of the security. For available-for-sale debt securities in an unrealized loss position, the Company evaluates qualitative criteria to determine any expected loss unless the Company intends to sell, or it is more likely than not that the Company will be required to sell before recovery of the amortized cost. In the latter two circumstances, the Company recognizes the entire difference between the security’s amortized cost basis and its fair value as a write-down of the investment balance with a charge to earnings. Otherwise, management’s analysis considers various factors, which include among other considerations (1) the

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between the security’s amortized cost basis and its fair value as a write-down of the investment balance with a charge to earnings. Otherwise, management’s analysis considers various factors, which include among other considerations (1) the present value of the cash flows expected to be collected compared to the amortized cost of the security, (2) duration and magnitude of the decline in value, (3) the financial condition of the issuer or issuers, and (4) structure of the security. If the Company does not expect to recover the entire amortized cost basis of the security, an allowance for credit losses for available-for-sale securities would be recorded, with a related charge to earnings, limited by the amount of the fair value of the security less its amortized cost.

Impairment Review of Goodwill

In accordance with GAAP, the Company does not amortize goodwill and instead, at least annually, evaluates whether the carrying value of goodwill has become impaired. A determination that goodwill has become impaired results in an immediate write-down of goodwill to its determined value with a resulting charge to the Company's Consolidated Statement of Income. Goodwill is evaluated at the reporting unit level. In the case of the Company, the services offered through the Bank and subsidiaries are managed as one strategic unit and represent the Company's only reportable operating segment.

The Company has the option to perform either (i) a qualitative assessment of whether it is "more likely than not" that the reporting unit's fair value is less than its book value, or (ii) a quantitative assessment.

1.Management's qualitative assessment would take into consideration, among other items, macroeconomic conditions, industry and market considerations, cost or margin factors, financial performance and share price. Based on the qualitative assessment, if the Company were to conclude: (a) it is "more likely than not" that the fair value of a reporting unit exceeds its book value, goodwill is deemed not impaired, or (b) it is "more likely than not" that the fair value of a reporting unit is less than its book value, a quantitative goodwill analysis must be performed.

2.The Company may elect to forgo the qualitative assessment and perform the quantitative analysis even if management does not believe that is "more likely than not" that goodwill is impaired. The quantitative goodwill analysis compares the fair value of the reporting unit with its book value, including goodwill. If the fair value of the reporting unit equals or exceeds its book value, goodwill is deemed not impaired. If the book value of the reporting unit exceeds its fair value, a goodwill impairment loss is recognized for the difference between these amounts, not exceeding the goodwill carrying amount.

At December 31, ~~2023~~2024, based on the Company's ~~qualitative~~quantitative analysis, goodwill was deemed not to be impaired.

Recent Accounting Pronouncements

See Note 1, "Summary of Significant Accounting Policies," Item (wy) "Recent Accounting Pronouncements," to the Company's consolidated financial statements, contained in Item 8 of this Form 10-K below, for information regarding recent accounting pronouncements.

Item 7A.Quantitative and Qualitative Disclosures About Market Risk

Interest Margin Sensitivity Analysis

The Company's primary market risk is interest-rate risk. Oversight of interest-rate risk management is the responsibility of the Board. Annually, the Board reviews and approves the Company's asset-liability management policy, which provides management with guidelines for controlling interest-rate risk, as measured through net interest income sensitivity to changes in interest rates, within certain tolerance levels. The Board also establishes and monitors guidelines for the Company's liquidity, capital ratios and asset-liability management.

The Company's asset-liability management strategies and guidelines are reported to the Board on a periodic basis. These strategies and guidelines are revised based on changes in interest-rate levels, general economic conditions, competition in the marketplace, the current interest-rate risk position of the Company, anticipated growth and other factors.

One of the principal factors in maintaining planned levels of net interest income is the ability to design effective strategies to manage the impact of interest rate changes on future net interest income. Quarterly, management completes a net interest income sensitivity analysis and reports the results to the Board. This analysis includes a simulation of the Company's net interest income under various interest-rate scenarios and assumes no future growth (i.e., static balance sheet). Variations in the interest-rate environment affect numerous factors, including prepayment speeds, reinvestment rates, maturities of investments (due to call provisions), ability to attract deposits and other funding, and interest rates on various asset and liability accounts.

62Results of this analysis are also impacted by changes in liquidity, such as fluctuations in the balances of short-term investments

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~~Results of this analysis are also impacted by changes in liquidity, such as fluctuations in the balances of short-term investments~~ and overnight borrowings.

The Company can be subject to net interest margin compression depending on the economic environment, the shape of the yield curve and a mismatch in timing for yield changes on interest-earning assets and interest-bearing liabilities. Generally, assuming a positive yield curve with parallel yield shifts, in the short-term (first couple of years) the Company's margin ~~generally~~is ~~performs~~expected to perform better ~~over~~when ~~time~~interest inrates adecrease ~~rising~~and ~~rate~~worse ~~environment~~when interest rates increase as funding costs are assumed to adjust faster than asset yields. However, ~~while~~over itthe ~~decreases~~longer-term in(greater athan ~~declining~~two ~~rate~~to ~~environment~~three years) the Company's margin is expected to perform better when interest rates increase and worse when ~~the~~interest ~~yield~~rates ~~curve~~decrease isas ~~flattening~~asset oryields ~~inverted.~~are assumed to increase more than funding costs.

InIf athe ~~flattening~~ yield curve ~~scenario~~flattens from a positive sloped curve, net interest margin compression occurs as the spread between the cost of funding and the yield on interest-earning assets narrows. Under this scenario, the degree of net interest margin compression is highly dependent on the Company's ability to fund asset growth through lower cost deposits. However, if the curve is flattening, while short-term rates are rising, the adverse impact on margin may be somewhat delayed, as increases in the prime lending rate may initially result in the Company's asset yields re-pricing more quickly than funding costs.

In a declining rate environment, net interest margin compression will eventually occur when the yield on interest-earning assets decreases more than funding costs. The primary causes would be the impact of interest rate decreases (including decreases in the prime lending rate) on adjustable-rate loans and the fact that decreases in deposit rates may be limited or lag decreases in the prime lending rate.

In an inverted yield curve situation, shorter-term rates exceed longer-term rates, and the impact on margin is similar but more adverse than the flat curve scenario. However, the extent of the impact on margin is highly dependent on the Company's balance sheet mix. The flattening of an inverted yield curve would be favorable to margin as yields on shorter-term rates would no longer exceed those of longer-term rates.

The tables below summarize the simulated results at December 31, 2024 and December 31, 2023 and compare the percentage change in net interest income for each interest rate scenario to the rates unchanged scenario. The results in the tables below assume a static balance sheet and the net interest income results are for a 24-month period. Table 1 assumes all interest rates are ramped evenly over 12 months. Table 2 differs from table 1 by simulating that interest rate changes for non-maturity deposits are ramped evenly over 24 months instead of 12 months.

Table 1 - Interest Rate Changes – All rates ramped over 12 months


	December 31, 2024		December 31, 2023


Scenarios	Percentage Change		Percentage Change
Rates rise 400 basis points	(14.19)	%	(11.71)	%
Rates rise 200 basis points	(7.05)	%	(5.71)	%

Rates unchanged	—	%	—	%
Rates decline 200 basis points	5.07	%	3.26	%

Table 2 - Interest Rate Changes – All rates ramped over 12 months,

except for non-maturity deposits which are ramped over 24 months


	December 31, 2024		December 31, 2023


Scenarios	Percentage Change		Percentage Change
Rates rise 400 basis points	(6.42)	%	(3.11)	%
Rates rise 200 basis points	(3.29)	%	(1.60)	%

Rates unchanged	—	%	—	%
Rates decline 200 basis points	1.52	%	(0.54)	%

The change in results at December 31, 2024, compared to December 31, 2023, were impacted primarily by an increase in the balance of wholesale funding which reprices immediately. Over the 24-month period, the net result was lower estimated net interest income in increased interest rate scenarios and higher estimated net interest income in decreased interest rate scenarios.

Refer to the heading "Results of Operations" contained within Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of this Form 10-K for further discussion of margin.

The table below summarizes the results from the Company’s net interest income simulation model and compares the percent change in net interest income to the rates unchanged scenario, assuming a static balance sheet for a 24-month period at December 31, 2023, 2022 and 2021. 64

As shown in the table, the Company's net interest income at December 31, 2023 within the rising rate scenarios was projected to decrease in the first 24 months compared to an increase at December 31, 2022 and 2021, primarily due to a shift in deposit composition from non-interest-bearing account balances into interest-bearing account balances that have a higher level of interest rate sensitivity as well as a decrease in the Company’s net short-term liquidity, which is defined as interest-earning deposits in banks less short-term wholesale borrowings.

Additionally, in the 200 basis point declining rate scenario noted, the percent decrease in net interest income was lower compared to the results at December 31, 2022. At December 31, 2023, deposit yields increased above the lower levels experienced at December 31, 2022 when deposit yields were closer to zero. The increase in deposit yields since December 31, 2022 results in an increased level of deposit rate declines in the 200 basis point declining rate scenario, which improved net interest income sensitivity results, compared to the prior year period.

(Dollars in thousands, except for percentage data)	December 31,2023			December 31,2022			December 31,2021
Net short-term liquidity	$	(6,619)		$	227,472		$	397,525
Changes in interest rates	Percentage Change			Percentage Change			Percentage Change
Rates Rise 400 Basis Points	(3.11)		%	1.20		%	9.73		%
Rates Rise 200 Basis Points	(1.60)		%	0.45		%	5.37		%
Rates Unchanged	—		%	—		%	—		%
Rates Decline 200 Basis Points	(0.54)		%	(5.34)		%	(9.54)		%

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Item 8.Financial Statements and Supplementary Data

Index to Consolidated Financial Statements

			Page
Consolidated Balance Sheets as of December 31, 2023 and 2022			65
Consolidated Balance Sheets as of December 31, 2024 and 2023			66
Consolidated Statements of Income for the years ended December 31, 2023, 2022 and 2021			66
Consolidated Statements of Income for the years ended December 31, 2024, 2023 and 2022			67
Consolidated Statements of Comprehensive Income for the years ended December 31, 2023, 2022 and 2021			67
Consolidated Statements of Comprehensive Income for the years ended December 31, 2024, 2023 and 2022			68
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2023, 2022 and 2021			68
Consolidated Statements of Changes in Shareholders’ Equity for the years ended December 31, 2024, 2023 and 2022			69
Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021			69
Consolidated Statements of Cash Flows for the years ended December 31, 2024, 2023, and 2022			70
Notes to the Consolidated Financial Statements			7071
Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements			117
Report of Independent Registered Public Accounting Firm on Internal Control Over Financial Reporting			119

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ENTERPRISE BANCORP, INC.

Consolidated Balance Sheets

As of December 31,

(Dollars in thousands, except per share data)

~~2023~~2024

~~2022~~2023

Assets

Cash and cash equivalents:

Cash and due from banks

3742,~~443~~689

3637,~~901~~443

Interest-earning deposits with banks

1941,~~149~~152

~~230~~19,~~688~~149

Total cash and cash equivalents

5683,~~592~~841

~~267~~56,~~589~~592

Investments:

Debt securities at fair value (amortized cost of $763,981 and $940,227, respectively)

661,113

816,102

Debt securities at fair value (amortized cost of $685,766 and $763,981, respectively)

583,930

661,113

Equity securities at fair value

79,~~058~~665

47,~~269~~058

Total investment securities at fair value

~~668~~593,~~171~~595

~~820~~668,~~371~~171

Federal Home Loan Bank stock

27,~~402~~093

2,~~343~~402

Loans held for sale

~~200~~520

—200

Loans:

Total loans

3,~~567~~982,~~631~~898

3,~~180~~567,~~518~~631

Allowance for credit losses

(5863,~~995~~498)

(5258,~~640~~995)

Net loans

3,~~508~~919,~~636~~400

3,~~127~~508,~~878~~636

Premises and equipment, net

4442,~~931~~444

44,~~228~~931

Lease right-of-use asset

24,~~820~~126

24,~~923~~820

Accrued interest receivable

1920,~~233~~553

1719,~~117~~233

Deferred income taxes, net

49,~~166~~096

5149,~~981~~166

Bank-owned life insurance

6567,~~455~~421

6465,~~156~~455

Prepaid income taxes

12,~~589~~583

~~683~~1,589

Prepaid expenses and other assets

1911,~~183~~398

1119,~~408~~183

Goodwill

5,656

Total assets

4,~~466~~827,~~034~~726

4,~~438~~466,~~333~~034

Liabilities and Shareholders' Equity

Liabilities

Deposits

34,~~977~~187,~~521~~698

43,~~035~~977,~~806~~521

Borrowed funds

25153,~~768~~136

325,~~216~~768

Subordinated debt

59,~~498~~815

59,~~182~~498

Lease liability

2423,~~441~~849

24,~~415~~441

Accrued expenses and other liabilities

4533,~~011~~425

3145,~~442~~011

Accrued interest payable

49,~~678~~055

24,~~005~~678

Total liabilities

4,~~136~~466,~~917~~978

4,~~156~~136,~~066~~917

Commitments and Contingencies

Shareholders' Equity

Preferred stock $0.01 par value per share; 1,000,000 shares authorized; no shares issued

—

Common stock $0.01 par value per share; 40,000,000 shares authorized; 12,272,674 and 12,133,516 shares issued and outstanding, respectively

123

121

Common stock $0.01 par value per share; 40,000,000 shares authorized; 12,447,308 and 12,272,674 shares issued and outstanding, respectively

124

123

Additional paid-in capital

~~107~~111,~~377~~295

~~103~~107,~~793~~377

Retained earnings

~~301~~328,~~380~~243

~~274~~301,~~560~~380

Accumulated other comprehensive loss

(7978,~~763~~914)

(9679,~~207~~763)

Total shareholders' equity

~~329~~360,~~117~~748

~~282~~329,~~267~~117

Total liabilities and shareholders' equity

4,~~466~~827,~~034~~726

4,~~438~~466,~~333~~034

See accompanying notes to consolidated financial statements.

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ENTERPRISE BANCORP, INC.

Consolidated Statements of Income

Years Ended December 31,

(Dollars in thousands, except per share data)

~~2023~~2024

~~2022~~2023

~~2021~~2022

Interest and dividend income:

Loans and loans held for sale

172,535

135,934

133,208

Other interest-earning assets

6,199

9,943

6,014

Investment securities

1815,~~575~~693

18,~~965~~575

1518,~~143~~965

Other interest-earning assets

9,943

6,014

682

Loans and loans held for sale

208,378

172,535

135,934

Total interest and dividend income

~~201~~230,~~053~~270

~~160~~201,~~913~~053

~~149~~160,~~033~~913

Interest expense:

Deposits

4476,~~389~~513

544,~~711~~389

35,~~922~~711

Borrowed funds

~~113~~2,426

52113

6052

Subordinated debt

3,467

3,~~352~~467

3,~~495~~352

Total interest expense

4782,~~969~~406

947,~~115~~969

79,~~477~~115

Net interest income

~~153~~147,~~084~~864

~~151~~153,~~798~~084

~~141~~151,~~556~~798

Provision for credit losses

91,~~249~~985

59,~~800~~249

15,~~770~~800

Net interest income after provision for credit losses

~~143~~145,~~835~~879

~~145~~143,~~998~~835

~~139~~145,~~786~~998

Non-interest income:

Wealth management fees

67,~~730~~888

6,~~533~~730

6,~~787~~533

Deposit and interchange fees

8,~~475~~875

8,~~196~~475

68,~~971~~196

Income on bank-owned life insurance, net

12,~~264~~001

1,~~202~~264

~~821~~1,202

Net (losses) gains on sales of debt securities

(2,419)

(1,973)

128

Net losses on sales of debt securities

(2)

(2,419)

(1,973)

Net gains on sales of loans

34156

3034

~~833~~30

Net gain on sale of OREO

—

1,126

Net gain on sale of insurance commissions

—

2,034

Net gain on sale of insurance commissions

—

2,034

—

Gains (losses) on equity securities

1,140

666

(514)

Loss on termination of swaps

—

(1,847)

Other income

2,821

2,859

2,954

Gain (loss) on equity securities

666

(514)

246

Total non-interest income

22,879

17,609

18,462

Other income

2,859

2,954

3,042

Total non-interest income

17,609

18,462

18,107

Non-interest expense:

Salaries and employee benefits

7278,~~283~~224

72,~~120~~283

6672,~~633~~120

Occupancy and equipment expenses

9,~~722~~667

9,~~299~~722

9,~~650~~299

Technology and telecommunications expenses

10,~~656~~708

10,~~735~~656

10,~~574~~735

Advertising and public relations expenses

2,~~786~~585

2,~~758~~786

2,~~373~~758

Audit, legal and other professional fees

2,~~945~~474

2,~~949~~945

2,~~347~~949

Deposit insurance premiums

23,~~712~~571

12,~~783~~712

1,~~910~~783

Supplies and postage expenses

~~998~~980

~~912~~998

~~819~~912

Loss on extinguishment of subordinated debt

—

713

Merger-related expenses

1,137

—

Other operating expenses

87,~~097~~786

78,~~758~~097

7,~~116~~758

Total non-interest expense

~~110~~117,~~199~~132

~~108~~110,~~314~~199

~~102~~108,~~135~~314

Income before income taxes

51,~~245~~626

5651,~~146~~245

5556,~~758~~146

Provision for income taxes

1312,~~187~~893

13,~~430~~187

13,~~587~~430

Net income

38,~~058~~733

4238,~~716~~058

42,~~171~~716

Basic earnings per share

3.1113

3.5311

3.5153

Diluted earnings per share

3.1112

3.5211

3.5052

Basic weighted average common shares outstanding

12,~~223~~386,~~626~~669

12,~~103~~223,~~033~~626

12,~~005~~103,~~838~~033

Diluted weighted average common shares outstanding

12,~~244~~398,~~036~~062

12,~~149~~244,~~777~~036

12,~~051~~149,~~293~~777

See accompanying notes to consolidated financial statements.

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ENTERPRISE BANCORP, INC.

Consolidated Statements of Comprehensive Income

Years Ended December 31,

(Dollars in thousands)	~~2023~~2024		~~2022~~2023		~~2021~~2022
Net income	$	38,~~058~~733	$	4238,~~716~~058	$	42,~~171~~716
Other comprehensive income (loss), net of taxes:
Net change in fair value of debt securities	~~16,444~~849		~~(100~~16,~~869)~~444		(19100,~~554~~869)
Net change in fair value of cash flow hedges	—		—		2,023
Total other comprehensive income (loss), net	849		16,444		(100,869)
Total other comprehensive income (loss), net	16,444		(100,869)		(17,531)
Total comprehensive income (loss), net	$	39,582	$	54,502	$	(58,153)
Total comprehensive income (loss), net	$	54,502	$	(58,153)	$	24,640

See accompanying notes to consolidated financial statements.

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ENTERPRISE BANCORP, INC.

Consolidated Statements of Changes in Shareholders' Equity

Years Ended December 31, ~~2023~~2024, ~~2022~~2023 and ~~2021~~2022

	Common Stock			AdditionalPaid-in Capital		Retained Earnings		Accumulated OtherComprehensive Income/(Loss)		TotalShareholders’ Equity
(Dollars in thousands, except per share data)	Shares	Amount
Balance at December 31, 2020	11,937,795	$	119	$	97,137	$	214,977	$	22,193	$	334,426
Net income						42,171				42,171
Cumulative effect adjustment for CECL adoption						(6,510)				(6,510)
Other comprehensive loss, net								(17,531)		(17,531)
Common stock dividend declared ($0.74 per share)						(8,877)				(8,877)
Common stock issued under dividend reinvestment plan	36,651	—		1,250						1,250
Common stock issued, other	1,766	—		59						59
Stock-based compensation, net	63,329	1		2,093						2,094
Net settlement for employee taxes on restricted stock and options	(10,029)	—		(346)						(346)
Stock option exercised, net	8,870	—		159						159
Balance at December 31, 2021	12,038,382	$	120	$	100,352	$	241,761	$	4,662	$	346,895
Net income						42,716				42,716
Other comprehensive loss, net								(100,869)		(100,869)
Common stock dividend declared ($0.82 per share)						(9,917)				(9,917)
Common stock issued under dividend reinvestment plan	40,640	—		1,396						1,396
Common stock issued, other	1,378	—		47						47
Stock-based compensation, net	59,338	1		2,313						2,314
Net settlement for employee taxes on restricted stock and options	(11,713)	—		(433)						(433)
Stock options exercised, net	5,491	—		118						118
Stock option exercised, net	5,491	—		118						118
Balance at December 31, 2022	12,133,516	$	121	$	103,793	$	274,560	$	(96,207)	$	282,267
Net income						38,058				38,058
Other comprehensive income, net								16,444		16,444
Common stock dividend declared ($0.92 per share)						(11,238)				(11,238)
Common stock issued under dividend reinvestment plan	50,443	1		1,503						1,504
Common stock issued, other	1,474	—		44						44
Stock-based compensation, net	79,074	1		2,304						2,305
Net settlement for employee taxes on restricted stock and options	(9,229)	—		(447)						(447)
Stock options exercised, net	17,396	—		180						180
Balance at December 31, 2023	12,272,674	$	123	$	107,377	$	301,380	$	(79,763)	$	329,117
Net income						38,733				38,733
Other comprehensive income, net								849		849
Common stock dividend declared ($0.96 per share)						(11,870)				(11,870)
Common stock issued under dividend reinvestment plan	54,698	—		1,593						1,593
Common stock issued, other	1,241	—		37						37
Stock-based compensation, net	112,886	1		2,334						2,335
Net settlement for employee taxes on restricted stock and options	(12,643)	—		(409)						(409)
Stock options exercised, net	18,452	—		363						363
Balance at December 31, 2024	12,447,308	$	124	$	111,295	$	328,243	$	(78,914)	$	360,748

See accompanying notes to consolidated financial statements.

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ENTERPRISE BANCORP, INC.

Consolidated Statements of Cash Flows

Years Ended December 31,

(Dollars in thousands)

~~2023~~2024

~~2022~~2023

~~2021~~2022

Cash flows from operating activities:

Net income

38,~~058~~733

4238,~~716~~058

42,~~171~~716

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses

91,~~249~~985

59,~~800~~249

15,~~770~~800

Depreciation and amortization

65,~~188~~610

76,~~036~~188

7,~~809~~036

Stock-based compensation expense

2,~~269~~307

2,~~316~~269

2,~~060~~316

Income on bank-owned life insurance, net

(12,~~264~~001)

(1,~~202~~264)

(~~821~~1,202)

Net losses (gains) on sales of debt securities

2,419

1,973

(128)

Net losses on sales of debt securities

2,419

1,973

Net (gains) losses on equity securities

(~~666~~1,140)

~~514~~(666)

~~(246)~~514

Mortgage loans originated for sale

(211,~~247~~978)

(12,~~263~~247)

(291,~~123~~263)

Proceeds from mortgage loans sold

211,~~081~~814

12,~~293~~081

301,~~327~~293

Net gains on sales of loans

(34156)

(3034)

(~~833~~30)

Net gains on sales of OREO

—

(1,126)

Loss on termination of swaps

—

1,847

Changes in:

Net (increase) decrease in other assets

(12,818)

(11,322)

9,324

Net decrease (increase) in other assets

5,151

(12,818)

(11,322)

Net increase (decrease) in other liabilities

13,922

169

(798)

Net (decrease) increase in other liabilities

(3,796)

13,922

169

Net cash provided by operating activities

5746,~~157~~531

4857,~~000~~157

6248,~~233~~000

Cash flows from investing activities:

Proceeds from sales of debt securities

~~84,779~~212

6984,~~620~~779

369,~~059~~620

Purchase of debt securities

—

~~(145,868)~~—

(~~491~~145,~~213~~868)

Proceeds from maturities, calls and pay-downs of debt securities

8877,~~176~~345

8288,~~834~~176

8782,~~347~~834

Net purchases of equity securities

(21,~~123~~467)

(2,~~998~~123)

(~~793~~2,998)

Net purchases of FHLB capital stock

(594,691)

(~~179~~59)

(~~259~~179)

Net (i

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