Eastern Bankshares, Inc.
For the period ended Sep 30, 2026. Filed Nov 6, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 6, 2026
EBC$22.84+0.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-07.
0001628280-26-054656
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-06.
0001628280-26-071416
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 290 previous paragraphs and 291 current paragraphs.
198 unchanged; 86 reworded; 7 added; 6 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 30 previous and 30 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (7)
Current report
The interest rate environment remains an important driver of our earnings, balance sheet performance, and risk profile. During the third quarter of 2026, the Federal Open Market Committee increased the federal funds target range by 25 basis points to 3.75% to 4.00%. While the future path of monetary policy remains uncertain, market participants generally expect interest rates to remain elevated in the near term, with the potential for additional policy tightening should inflationary pressures persist.
Current report
Management continues to actively manage interest rate risk through balance sheet positioning and pricing strategies. While changes in interest rates may affect asset yields, funding costs, and the value of certain financial instruments, we believe our balance sheet remains well positioned to manage interest rate volatility. For further detail regarding interest rate risk management refer to Note 11, “Derivative Financial Instruments”within the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 in this Quarterly Report on Form 10-Q and“Management of Market Risk” within this Item 2.
Current report
Noninterest income increased by $7.4 million, or 18.0%, to $48.7 million during the three months ended September 30, 2026 from $41.3 million during the three months ended September 30, 2025. This increase was primarily due to a $3.7 million increase in mortgage banking income (loss), and a $2.2 million increase in card income, partially offset by a $3.2 million decrease in income from investments for employee retirement benefits.
Current report
•Card income increased primarily due to higher interchange fees resulting from increased transaction volume during the three months ended September 30, 2026 compared to the three months ended September 30, 2025. Also contributing to the increase was a credit card incentive for customers put into effect in 2026.
Current report
•Income from investments for employee retirement benefit decreased primarily due to a less favorable mark-to-market adjustment on equity securities held in those accounts for the three months ended September 30, 2026 compared to during the three months ended September 30, 2025.
Current report
•There were no non-operating expenses recorded during the three months ended September 30, 2026, compared to to certain costs incurred related to our merger with HarborOne incurred during the three months ended September 30, 2025.
Current report
Income tax expense for the three and nine months ended September 30, 2026 was $29.1 million and $77.3 million, respectively, compared to a benefit of $12.2 million and expense of $21.6 million for the three and nine months ended September 30, 2025.
Removed paragraphs (6)
Previous report
Beginning in March 2022, the Federal Open Market Committee (“FOMC”) voted to increase the federal funds rate multiple times from a range of 0.00% to 0.25% to a range of 5.25% to 5.50% on July 26, 2023, when the FOMC stated that it will continue to assess additional information and its implications for monetary policy. At its meeting on September 18, 2024, the FOMC decided to lower the target range for the federal funds rate by 50 basis points from the range set at its July 26, 2023 meeting to a range of 4.75% to 5.00%. The FOMC further decided to lower the target range for the federal funds rate at each of its meetings held on November 7, 2024, December 18, 2024, September 17, 2025, October 29, 2025, December 10, 2025, and January 28, 2026 with the most recent change reducing the target range for the federal funds rate to a range of 3.50% to 3.75%. At its most recent meeting on July 29, 2026, the FOMC decided to maintain the target range for the federal funds rate at the range set at its January 28, 2026 meeting and indicated, that they are continuing their policy of maintaining ample reserves in the banking system.. The FOMC indicated economic activity is expanding at a solid pace despite elevated uncertainty that is owed, in part, to the conflict in the Middle East. Productivity growth and capital investment were strong while job gains have kept pace with the workforce, and the unemployment rate has changed little. The FOMC reiterated its commitment to achieving inflation of 2 percent and indicated inflation still remains elevated, in part reflecting supply shocks that have driven price increases in certain sectors.
Previous report
Inevitably, not all of our interest rate-sensitive assets and liabilities will re-price simultaneously and in equal volume in response to changes in the federal funds rate, and therefore the potential for interest rate exposure exists. Management believes that several factors will affect the actual impact of interest rate changes on our balance sheet and operating results, including, but not limited to, actual changes in interest rates or expectations of future changes, the degree of volatility in the securities markets, inflation rates or expectations of inflation, and the slope of the interest rate yield curve. We attempt to manage interest rate risk by identifying, quantifying, and, where appropriate, hedging our exposure. Approximately
Previous report
36% of the outstanding principal balance of our loans, gross of outstanding interest rate swaps as described further below, as of June 30, 2026 was indexed to a market rate that is expected to re-price with similar magnitude and direction as the federal funds rate. A portion of these loans have been hedged using interest rate swaps to convert the floating rate interest receipts to a fixed rate. The notional amount of floating rate loans swapped totaled $1.3 billion on June 30, 2026, representing approximately 5.6% of the outstanding principal balance of our loans at that date. For more detail regarding such hedging financial instruments, refer to Note 11, “Derivative Financial Instruments”within the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 in this Quarterly Report on Form 10-Q. Refer to the section titled“Management of Market Risk” within this Item 2 for additional discussion including the estimated change to our net interest income under interest rate risk measurement methodologies that use a variety of hypothetical scenarios assuming immediate and parallel changes in interest rates that may not reflect the manner in which actual yields and costs respond to changes in market interest rates.
Previous report
Noninterest income increased by $14.7 million, or 34.4%, to $57.6 million during the three months ended June 30, 2026 from $42.9 million during the three months ended June 30, 2025. This increase was primarily due to a $3.9 million increase in miscellaneous income and fees, a $3.4 million increase in mortgage banking income, and a $2.4 million increase in investment advisory fees.
Previous report
•Miscellaneous income and fees increased primarily due to a $3.5 million gain on sale of commercial loans held for investment during the three months ended June 30, 2026. There were no sales of commercial loans during the three months ended June 30, 2025.
Previous report
Income tax expense for the three and six months ended was $29.6 million and $48.2 million, respectively, compared to $0.1 million and $33.8 million for the three and six months ended June 30, 2025.
Reworded paragraphs (86)
Previous wording
This section is intended to assist in the understanding of the financial performance of the Company and its subsidiaries through a discussion of our financial condition at June 30, 2026, and our results of operations for the three and six months ended June 30, 2026 and 2025. This section should be read in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto of the Company appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q and the Company’s 2025 Form 10-K.
Current wording
This section is intended to assist in the understanding of the financial performance of the Company and its subsidiaries through a discussion of our financial condition at September 30, 2026, and our results of operations for the three and nine months ended September 30, 2026 and 2025. This section should be read in conjunction with the unaudited interim condensed consolidated financial statements and notes thereto of the Company appearing in Part I, Item 1 of this Quarterly Report on Form 10-Q and the Company’s 2025 Form 10-K.
Previous wording
•operational risks including, but not limited to, cybersecurity incidents, fraud, new technological integration including AI, natural disasters and future pandemics or other public health emergencies;
Current wording
•operational risks including, but not limited to, increasingly sophisticated cybersecurity threats, including those enabled by artificial intelligence, fraud, new technological integration including AI, natural disasters and future pandemics or other public health emergencies;
Previous wording
•risks related to the implementation of acquisitions, dispositions, and restructurings, including our 2025 merger with HarborOne Bancorp and HarborOne Bank, which is further described in Part I, Item 1 of our 2025 Annual Report on Form 10-K under “Recent Acquisitions – Bank Acquisitions”, including that revenue and expense synergies or other expected benefits may not materialize or may not be realized in the time frame originally anticipated, or may be more costly to achieve than anticipated and that the combined businesses may not perform as expected;
Current wording
•risks related to the implementation of acquisitions, dispositions, and restructurings, including our 2025 merger with HarborOne Bancorp and HarborOne Bank, which is further described in Part I, Item 1 of our 2025 Annual Report on Form 10-K under “Recent Acquisitions – Bank Acquisitions;”
Previous wording
•the risk that the integration of our completed or pending acquisitions may be more difficult, time-consuming or costly than anticipated and that the anticipated benefit may not be fully realized;
Current wording
•the risk that the integration of our completed acquisitions may be more difficult, time-consuming or costly than anticipated and that the anticipated benefit may not be fully realized;
Previous wording
There have been no other material changes in critical accounting policies during the three and six months ended June 30, 2026.
Current wording
There have been no other material changes in critical accounting policies during the three and nine months ended September 30, 2026.
Previous wording
We are a bank holding company, and our principal subsidiary, Eastern Bank, is a Massachusetts-chartered bank that has served the banking needs of our customers since 1818. Our business philosophy is to operate as a diversified financial services enterprise providing a broad array of banking and other financial services primarily to retail, commercial and small business customers. We had total assets of $31.1 billion and $30.6 billion at June 30, 2026 and December 31, 2025, respectively. We are subject to comprehensive regulation and examination by the Massachusetts Commissioner of Banks, the New Hampshire Banking Department, the FDIC, the Federal Reserve Board and the Consumer Financial Protection Bureau. Our business consists of a full range of banking, lending (commercial, residential and consumer), savings and small business offerings, including our wealth management and trust operations that we conduct under our “Cambridge Trust Wealth Management, a division of Eastern Bank” brand name (“Cambridge Trust Wealth Management division”).
Current wording
We are a bank holding company, and our principal subsidiary, Eastern Bank, is a Massachusetts-chartered bank that has served the banking needs of our customers since 1818. Our business philosophy is to operate as a diversified financial services enterprise providing a broad array of banking and other financial services primarily to retail, commercial and small business customers. We had total assets of $31.7 billion and $30.6 billion at September 30, 2026 and December 31, 2025, respectively. We are subject to comprehensive regulation and examination by the Massachusetts Commissioner of Banks, the New Hampshire Banking Department, the FDIC, the Federal Reserve Board and the Consumer Financial Protection Bureau. Our business consists of a full range of banking, lending (commercial, residential and consumer), savings and small business offerings, including our wealth management and trust operations that we conduct under our “Cambridge Trust Wealth Management, a division of Eastern Bank” brand name (“Cambridge Trust Wealth Management division”).
Previous wording
Net income for the three and six months ended June 30, 2026, respectively, computed in accordance with GAAP was $105.2 million and $170.5 million, respectively, as compared to net income and net loss of $100.2 million and $117.4 million, respectively, for the three and six months ended June 30, 2025, respectively. The increase in net income for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 was primarily due to increased net interest income and noninterest income during the three months ended June 30, 2026. The increase from a net loss for the six months ended June 30, 2025 to net income for the six months ended June 30, 2026 was primarily due to losses on sales of securities recorded during the six months ended June 30, 2025, of which there were none during the six months ended June 30, 2026. Refer to the later sections titled“Results of Operations”within this Item 2 for additional discussion
Current wording
Net income for the three and nine months ended September 30, 2026, respectively, computed in accordance with GAAP was $111.0 million and $281.5 million, respectively, as compared to net income and net loss of $106.1 million and $11.3 million, respectively, for the three and nine months ended September 30, 2025, respectively. The increase in net income for the three months ended September 30, 2026 compared to the three months ended September 30, 2025 was primarily due to increased net interest income and noninterest income during the three months ended September 30, 2026. The increase from a net loss for the nine months ended September 30, 2025 to net income for the nine months ended September 30, 2026 was primarily due to losses on sales of securities recorded during the nine months ended September 30, 2025 and increased net interest income for the nine months ended September 30, 2026. Refer to the later sections titled“Results of Operations”within this Item 2 for additional discussion.
Previous wording
Net income for the three and six months ended June 30, 2026, respectively, and net income and net loss for the three and six months ended June 30, 2025, respectively, included items that our management considers non-core, which management excludes for purposes of assessing our operating net income, a non-GAAP financial measure. Operating net income for the three and six months ended June 30, 2026 was $106.5 million and $195.2 million, respectively, compared to operating net income for the three and six months ended June 30, 2025 of $81.7 million and $149.2 million, respectively, representing increases of 30.4% and 30.8%, respectively. These increases were primarily due to higher net interest income for both the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025, partially offset by higher noninterest expense on an operating basis for both the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025. See“Non-GAAP Financial Measures”and“Results of Operations” within this Item 2 for a reconciliation of operating net income to net income/(loss) on a GAAP basis and further discussion of noninterest income/(loss) and noninterest expense.
Current wording
Net income for the three and nine months ended September 30, 2026, respectively, and net income and net loss for the three and nine months ended September 30, 2025, respectively, included items that our management considers non-core, which management excludes for purposes of assessing our operating net income, a non-GAAP financial measure. Operating net income for the three and nine months ended September 30, 2026 was $111.0 million and $306.2 million, respectively, compared to operating net income for the three and nine months ended September 30, 2025 of $74.1 million and $223.3 million, respectively, representing increases of 49.9% and 37.1%, respectively. These increases were primarily due to higher net interest income for both the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025, partially offset by higher noninterest expense on an operating basis for both the three and nine months ended September 30, 2026 compared to the three and nine months ended September 30, 2025. See“Non-GAAP Financial Measures”and“Results of Operations” within this Item 2 for a reconciliation of operating net income to net income/(loss) on a GAAP basis and further discussion of noninterest income/(loss) and noninterest expense.
Previous wording
•Commercial and industrial: Loans in this category consist of revolving and term loans extended to businesses and corporate enterprises for the purpose of financing working capital, facilitating equipment purchases and facilitating acquisitions. As of June 30, 2026 and December 31, 2025, we had total commercial and industrial loans of $4.7 billion and $4.3 billion, respectively, representing 20.1% and 18.6%, respectively, of our total loans. The primary risk associated with commercial and industrial loans is the ability of borrowers to achieve business results consistent with those projected at origination. Our primary focus for commercial and industrial loans is middle-market companies located in the markets we serve. In addition, we participate in the syndicated loan market and the SNC Program. Our commercial and industrial portfolio also includes our Asset Based Lending Portfolio (“ABL Portfolio”) and industrial revenue bonds (“IRBs”) which are municipal bonds issued to finance major capital projects. The majority of our IRB portfolio is in educational and other non-profit sectors.
Current wording
•Commercial and industrial: Loans in this category consist of revolving and term loans extended to businesses and corporate enterprises for the purpose of financing working capital, facilitating equipment purchases and facilitating acquisitions. As of September 30, 2026 and December 31, 2025, we had total commercial and industrial loans of $4.8 billion and $4.3 billion, respectively, representing 20.2% and 18.6%, respectively, of our total loans. The primary risk associated with commercial and industrial loans is the ability of borrowers to achieve business results consistent with those projected at origination. Our primary focus for commercial and industrial loans is middle-market companies located in the markets we serve. In addition, we participate in the syndicated loan market and the SNC Program. Our commercial and industrial portfolio also includes our Asset Based Lending Portfolio (“ABL Portfolio”) and industrial revenue bonds (“IRBs”) which are municipal bonds issued to finance major capital projects. The majority of our IRB portfolio is in educational and other non-profit sectors.
Previous wording
•Commercial real estate: Loans in this category include mortgage loans and lines of credit on commercial real estate, both investment and owner occupied. Property types financed include office, industrial, multi-family, affordable housing, retail, hotel, and other type properties. As of June 30, 2026 and December 31, 2025, we had total commercial real estate loans of $9.3 billion and $9.4 billion, respectively, representing 39.9% and 40.8%, respectively, of our total loans as of each period end. As of both June 30, 2026 and December 31, 2025, owner occupied loans totaled $1.2 billion, representing 12.9% of our commercial real estate loans. Collateral values are established by independent third-party appraisals and evaluations. The primary repayment sources include operating income generated by the real estate, permanent debt refinancing and/or the sale of the real estate. Our commercial real estate loan portfolio also includes loans included in our SNC Program portfolio described above and IRB loans.
Current wording
•Commercial real estate: Loans in this category include mortgage loans and lines of credit on commercial real estate, both investment and owner occupied. Property types financed include office, industrial, multi-family, affordable housing, retail, hotel, and other properties. As of September 30, 2026 and December 31, 2025, we had total commercial real estate loans of $9.5 billion and $9.4 billion, respectively, representing 40.5% and 40.8%, respectively, of our total loans as of each period end. As of both September 30, 2026 and December 31, 2025, owner occupied loans totaled $1.2 billion, representing 12.6% and 12.9% of our commercial real estate loans at September 30, 2026 and December 31, 2025, respectively. Collateral values are established by independent third-party appraisals and evaluations. The primary repayment sources include operating income generated by the real estate, permanent debt refinancing and/or the sale of the real estate. Our commercial real estate loan portfolio also includes loans included in our SNC Program portfolio described above and IRB loans.
Previous wording
•Commercial construction: Loans in this category include construction project financing and are comprised of commercial real estate, business banking and residential loans for the purpose of constructing and developing real estate. As of June 30, 2026 and December 31, 2025, we had total commercial construction loans of $543.6 million and $563.5 million, respectively, representing 2.3% and 2.4%, respectively, of our total loans. Our commercial construction loan portfolio also includes loans included in our SNC Program portfolio described above and IRB loans.
Current wording
•Commercial construction: Loans in this category include construction project financing and are comprised of commercial real estate, business banking and residential loans for the purpose of constructing and developing real estate. As of September 30, 2026 and December 31, 2025, we had total commercial construction loans of $450.5 million and $563.5 million, respectively, representing 1.9% and 2.4%, respectively, of our total loans. Our commercial construction loan portfolio also includes loans included in our SNC Program portfolio described above and IRB loans.
Previous wording
•Business banking: Loans in this category are comprised of loans to small businesses with exposures of under $1.0 million and small investment real estate projects with exposures of under $3.0 million. These loans are separate and distinct from our commercial and industrial and commercial real estate portfolios described above due to the size of the loans. As of both June 30, 2026 and December 31, 2025, we had total business banking loans of $1.6 billion, representing 6.7% and 6.9%, respectively, of our total loans for each period end. In this category, commercial and industrial loans and commercial real estate loans totaled $326.0 million and $1.2 billion, respectively, as of June 30, 2026, and $307.6 million and $1.3 billion, respectively, as of December 31, 2025.
Current wording
•Business banking: Loans in this category are comprised of loans to small businesses with exposures of under $1.0 million and small investment real estate projects with exposures of under $3.0 million. These loans are separate and distinct from our commercial and industrial and commercial real estate portfolios described above due to the size of the loans. As of September 30, 2026 and December 31, 2025, we had total business banking loans of $1.5 billion and $1.6 billion, representing 6.4% and 6.9%, respectively, of our total loans for each period end. In this category, commercial and industrial loans and commercial real estate loans totaled $304.7 million and $1.2 billion, respectively, as of September 30, 2026, and $307.6 million and $1.3 billion, respectively, as of December 31, 2025.
Previous wording
•Residential real estate: Loans in this category consist of mortgage loans on residential real estate. As of both June 30, 2026 and December 31, 2025, we had total residential real estate loans of $5.2 billion, representing 22.2% and 22.7%, respectively, of our total loans. Underwriting considerations include, among others, income sources and their reliability, willingness to repay as evidenced by credit repayment history, financial resources including cash reserves and the value of the collateral. We maintain policy standards for minimum credit scores and cash reserves and maximum loan-to-value consistent with a “prime” portfolio. Collateral consists of mortgage liens on residential dwellings. We do not originate or purchase sub-prime or other high-risk loans. Residential real estate loans are originated either for sale to investors or to retain in our loan portfolio. Decisions about whether to sell or retain residential real estate loans are made based on the interest rate characteristics, pricing for loans in the secondary mortgage market, competitive factors and our capital needs. Following our merger with HarborOne, which included the acquisition of HarborOne’s mortgage company, a portion of our loans sold on the secondary markets are sold with servicing retained. During the three and six months ended June 30, 2026, residential real estate mortgage loan originations for secondary market sale were $103.0 million and $204.6 million, respectively, compared to $1.7 million and $14.9 million during the three and six months ended June 30, 2025, respectively. During the three and six months ended June 30, 2026, residential real estate mortgage loan sales on secondary market were $104.3 million and $203.1 million, respectively, compared to $11.0 million and $23.8 million during the three and six months ended June 30, 2025, respectively.
Current wording
•Residential real estate: Loans in this category consist of mortgage loans on residential real estate. As of both September 30, 2026 and December 31, 2025, we had total residential real estate loans of $5.2 billion, representing 22.1% and 22.7%, respectively, of our total loans. Underwriting considerations include, among others, income sources and their reliability, willingness to repay as evidenced by credit repayment history, financial resources including cash reserves and the value of the collateral. We maintain policy standards for minimum credit scores and cash reserves and maximum loan-to-value consistent with a “prime” portfolio. Collateral consists of mortgage liens on residential dwellings. We do not originate or purchase sub-prime or other high-risk loans. Residential real estate loans are originated either for sale to investors or to retain in our loan portfolio. Decisions about whether to sell or retain residential real estate loans are made based on the interest rate characteristics, pricing for loans in the secondary mortgage market, competitive factors and our capital needs. Following our merger with HarborOne, which included the acquisition of HarborOne’s mortgage company, a portion of our loans sold on the secondary markets are sold with servicing retained. During the three and nine months ended September 30, 2026, residential real estate mortgage loan originations for secondary market sale were $88.6 million and $293.2 million, respectively, compared to $9.6 million and $24.5 million during the three and nine months ended September 30, 2025, respectively. During the three and nine months ended September 30, 2026, residential real estate mortgage loan sales on secondary market were $101.2 million and $305.5 million, respectively, compared to $9.2 million and $33.0 million during the three and nine months ended September 30, 2025, respectively.
Previous wording
•Consumer home equity: Loans in this category consist of home equity lines of credit and home equity loans. As of both June 30, 2026 and December 31, 2025, we had total consumer home equity loans of $1.8 billion, representing 7.8% and 7.6%, respectively, of our total loans. Home equity lines of credit are granted for ten years with monthly interest-only repayment requirements. Full principal repayment is required at the end of the ten-year draw period. Home equity lines of credit can be converted to term loans that are fully amortized. Underwriting considerations are materially consistent with those utilized in the residential real estate category. Collateral consists of a senior or subordinate lien on owner-occupied residential property.
Current wording
•Consumer home equity: Loans in this category consist of home equity lines of credit and home equity loans. As of September 30, 2026 and December 31, 2025, we had total consumer home equity loans of $1.9 billion and $1.8 billion, representing 7.9% and 7.6%, respectively, of our total loans. Home equity lines of credit are granted for ten years with monthly interest-only repayment requirements. Full principal repayment is required at the end of the ten-year draw period. Home equity lines of credit can be converted to term loans that are fully amortized. Underwriting considerations are materially consistent with those utilized in the residential real estate category. Collateral consists of a senior or subordinate lien on owner-occupied residential property.
Previous wording
•Other consumer: Loans in this category consist of unsecured personal lines of credit, overdraft protection, automobile and aircraft loans, home improvement loans and other personal loans. As of June 30, 2026 and December 31, 2025, we had total other consumer loans of $218.0 million and $232.0 million, respectively, representing 0.9% and 1.0%, respectively, of our total loans. Our policy and underwriting in this category include the following factors, among others: income sources and reliability, credit histories, term of repayment and collateral value, as applicable.
Current wording
•Other consumer: Loans in this category consist of unsecured personal lines of credit, overdraft protection, automobile and aircraft loans, home improvement loans and other personal loans. As of September 30, 2026 and December 31, 2025, we had total other consumer loans of $224.1 million and $232.0 million, respectively, representing 1.0% of our total loans at both September 30, 2026 and December 31, 2025. Our policy and underwriting in this category include the following factors, among others: income sources and reliability, credit histories, term of repayment and collateral value, as applicable.
Previous wording
•Through our Cambridge Trust Wealth Management division, we provide a wide range of trust services, including (i) managing customer investments, (ii) serving as custodian for customer assets, and (iii) providing other fiduciary services, including serving as the trustee and personal representative of estates. As of June 30, 2026 and December 31, 2025, we held $11.3 billion and $10.1 billion, respectively, of assets in a fiduciary, custodial or agency capacity for customers, which are not our assets and therefore not included on the Consolidated Balance Sheets included in this Quarterly Report on Form 10-Q. For the three and six months ended June 30, 2026, we had noninterest income of $19.7 million and $38.0 million, respectively, from providing these services compared to $17.3 million and $33.7 million for the three and six months ended June 30, 2025, respectively.
Current wording
•Through our Cambridge Trust Wealth Management division, we provide a wide range of trust services, including (i) managing customer investments, (ii) serving as custodian for customer assets, and (iii) providing other fiduciary services, including serving as the trustee and personal representative of estates. As of September 30, 2026 and December 31, 2025, we held $11.5 billion and $10.1 billion, respectively, of assets in a fiduciary, custodial or agency capacity for customers, which are not our assets and therefore not included on the Consolidated Balance Sheets included in this Quarterly Report on Form 10-Q. For the three and nine months ended September 30, 2026, we had noninterest income of $19.4 million and $57.4 million, respectively, from providing these services compared to $17.6 million and $51.3 million for the three and nine months ended September 30, 2025, respectively.
Previous wording
(2)For the six-month period ended June 30, 2025, which ended in a net loss, common stock equivalents are excluded from the calculation of diluted earnings per share for GAAP purposes as inclusion would have had an anti-dilutive effect. Common stock equivalents were included for purposes of computing diluted operating earnings per share.
Current wording
(2)For the nine months ended September 30, 2025, which ended in a net loss, common stock equivalents are excluded from the calculation of diluted earnings per share for GAAP purposes as inclusion would have had an anti-dilutive effect. Common stock equivalents were included for purposes of computing diluted operating earnings per share.
Previous wording
(3)The tax effect of amortization of intangible assets was calculated for the three and six months ended June 30, 2026 and 2025 using our combined statutory tax rate of 27.6% and 27.7%, respectively.
Current wording
(3)The tax effect of amortization of intangible assets was calculated for the three and nine months ended September 30, 2026 and 2025 using our combined statutory tax rate of 27.6% and 27.7%, respectively.
Previous wording
Total cash and cash equivalents decreased by $60.7 million, or 19.2%, to $256.2 million at June 30, 2026 from $316.9 million at December 31, 2025. This consistency in the balance of our cash and cash equivalents at June 30, 2026, compared to December 31, 2025, was due to the offsetting effect of security purchases, loan originations, a net increase in total deposits and borrowings, and AFS and HTM maturities and principal paydowns. Refer to the Statement of Cash Flows for additional information. For further discussion of the change in deposits and loans, refer to the later“Loans”and “Deposits” sections in this Item 2.
Current wording
Total cash and cash equivalents increased by $230.2 million, or 72.6%, to $547.1 million at September 30, 2026 from $316.9 million at December 31, 2025. This increase in the balance of our cash and cash equivalents at September 30, 2026, compared to December 31, 2025, was due to a net increase in total deposits and borrowings, and AFS and HTM maturities and principal paydowns, partially offset by purchases of AFS and HTM securities, net loan originations, and repurchases of common stock. Refer to the Statement of Cash Flows for additional information. For further discussion of the change in deposits and loans, refer to the later“Loans”and “Deposits” sections in this Item 2.
Previous wording
Our securities portfolio increased $0.4 billion, or 8.7%, to $4.8 billion at June 30, 2026 from $4.4 billion at December 31, 2025. This increase was primarily due to purchases of AFS and HTM securities of $0.6 billion, partially offset by by AFS and HTM maturities and principal paydowns of $0.2 billion.
Current wording
Our securities portfolio increased $0.4 billion, or 8.0%, to $4.8 billion at September 30, 2026 from $4.4 billion at December 31, 2025. This increase was primarily due to purchases of AFS and HTM securities of $0.9 billion, partially offset by AFS and HTM maturities and principal paydowns of $0.4 billion.
Previous wording
A portion of our securities portfolio continues to be tax-exempt. Investments in federally tax-exempt securities totaled $513.5 million at June 30, 2026 compared to $348.8 million at December 31, 2025.
Current wording
A portion of our securities portfolio continues to be tax-exempt. Investments in federally tax-exempt securities totaled $516.3 million at September 30, 2026 compared to $348.8 million at December 31, 2025.
Previous wording
We consider our loan portfolio to be relatively diversified by borrower and industry. Our gross loans increased $0.1 billion, or 0.6%, to $23.7 billion at June 30, 2026 from $23.6 billion at December 31, 2025. The increase was primarily due to continued investment in resources targeted to grow our commercial and industrial loan portfolio and ongoing promotion of our consumer home equity products, partially offset by net paydowns in our other portfolios.
Current wording
We consider our loan portfolio to be relatively diversified by borrower and industry. Our gross loans increased $0.4 billion, or 1.7%, to $24.0 billion at September 30, 2026 from $23.6 billion at December 31, 2025. The increase was primarily due to continued investment in resources targeted to grow our commercial and industrial loan portfolio and ongoing promotion of our consumer home equity products.
Previous wording
We believe that our commercial loan portfolio composition is relatively diversified in terms of industry sectors, property types and various lending specialties, and it is concentrated in the New England geographical area, with 85.5% of our commercial loans in Massachusetts, New Hampshire, or Rhode Island as of June 30, 2026.
Current wording
We believe that our commercial loan portfolio composition is relatively diversified in terms of industry sectors, property types and various lending specialties, and it is concentrated in the New England geographical area, with 85.0% of our commercial loans in Massachusetts, New Hampshire, or Rhode Island as of September 30, 2026.
Previous wording
Special mention, substandard and doubtful loans totaled 4.9% and 5.0% of total commercial loans outstanding at June 30, 2026 and December 31, 2025, respectively.
Current wording
Special mention, substandard and doubtful loans totaled 5.1% and 5.0% of total commercial loans outstanding at September 30, 2026 and December 31, 2025, respectively.
Previous wording
The delinquency rate of our total loan portfolio decreased to 0.51% at June 30, 2026, compared to 0.56% at December 31, 2025.
Current wording
The delinquency rate of our total loan portfolio stayed consistent at 0.56% at both September 30, 2026 and December 31, 2025.
Previous wording
NPLs decreased $63.0 million, or 36.5%, to $109.4 million at June 30, 2026 from $172.3 million at December 31, 2025. NPLs as a percentage of total loans decreased to 0.47% at June 30, 2026 from 0.75% at December 31, 2025. The decrease was primarily due to commercial loan payoffs during the six months ended June 30, 2026. Also driving this decline is continued efforts to work with borrowers to either exit certain relationships through sales or otherwise alleviate non-performance through regular payoffs.
Current wording
NPLs decreased $87.5 million, or 50.8%, to $84.8 million at September 30, 2026 from $172.3 million at December 31, 2025. NPLs as a percentage of total loans decreased to 0.36% at September 30, 2026 from 0.75% at December 31, 2025. Driving this decline is continued efforts to work with commercial loan borrowers to either exit certain relationships through sales or otherwise alleviate non-performance through regular payoffs.
Previous wording
The total amount of interest recorded on NPLs during both the six months ended June 30, 2026 and 2025 was not significant. The gross interest income that would have been recorded under the original terms of those loans if they had been performing amounted to $3.6 million and $2.8 million for the six months ended June 30, 2026 and 2025, respectively.
Current wording
The total amount of interest recorded on NPLs during both the nine months ended September 30, 2026 and 2025 was not significant. The gross interest income that would have been recorded under the original terms of those loans if they had been performing amounted to $5.2 million and $4.1 million for the nine months ended September 30, 2026 and 2025, respectively.
Previous wording
In the course of resolving NPLs, we may choose to restructure the contractual terms of certain loans. We attempt to work-out alternative payment schedules with the borrowers in order to avoid foreclosure actions. The aggregate amortized cost balance as of June 30, 2026 of loans modified during the three and six months ended June 30, 2026 which were determined to be modifications to borrowers experiencing financial difficulty was $16.5 million and $36.3 million, respectively. The aggregate amortized cost balance as of June 30, 2025 of loans modified during the three and six months ended June 30, 2025 which were determined to be modifications to borrowers experiencing financial difficulty was $11.0 million and $14.2 million, respectively.
Current wording
In the course of resolving NPLs, we may choose to restructure the contractual terms of certain loans. We attempt to work-out alternative payment schedules with the borrowers in order to avoid foreclosure actions. The aggregate amortized cost balance as of September 30, 2026 of loans modified during the three and nine months ended September 30, 2026 which were determined to be modifications to borrowers experiencing financial difficulty was $61.7 million and $82.3 million, respectively. The aggregate amortized cost balance as of September 30, 2025 of loans modified during the three and nine months ended September 30, 2025 which were determined to be modifications to borrowers experiencing financial difficulty was $54.3 million and $65.5 million, respectively.
Previous wording
As of June 30, 2026 there was one loan with a balance of $0.2 million that had been modified to a borrower experiencing financial difficulty during the during the twelve-month period then ended and which had subsequently defaulted during the six months ended June 30, 2026. As of June 30, 2025 there were no loans that had been modified to borrowers experiencing financial difficulty during the during the twelve-month period then ended which had subsequently defaulted during the six months ended June 30, 2025.
Current wording
As of September 30, 2026 there were two loans with an aggregate balance of $0.4 million that had been modified to borrowers experiencing financial difficulty during the during the twelve-month period then ended and which had subsequently defaulted during the nine months ended September 30, 2026. As of September 30, 2025 there was one loan with a balance of less than $0.1 million that had been modified to borrowers experiencing financial difficulty during the during the twelve-month period then ended which had subsequently defaulted during the nine months ended September 30, 2025.
Previous wording
Purchased credit deteriorated (“PCD”) loans are loans that we acquired that have shown evidence of deterioration of credit quality since origination and, therefore, it was deemed unlikely that all contractually required payments would be collected upon the merger date. We consider factors such as payment history, collateral values and accrual status when determining whether there was evidence of deterioration at the merger date. As of June 30, 2026 and December 31, 2025, the carrying amount of PCD loans was $548.1 million and $659.7 million, respectively.
Current wording
Purchased credit deteriorated (“PCD”) loans are loans that we acquired that have shown evidence of deterioration of credit quality since origination and, therefore, it was deemed unlikely that all contractually required payments would be collected upon the merger date. We consider factors such as payment history, collateral values and accrual status when determining whether there was evidence of deterioration at the merger date. As of September 30, 2026 and December 31, 2025, the carrying amount of PCD loans was $520.8 million and $659.7 million, respectively.
Previous wording
Potential Problem Loans. In the normal course of business, we become aware of possible credit problems in which borrowers exhibit the potential to be unable to comply in the future with the contractual terms of their loans, but which currently do not yet meet the criteria for classification as NPLs. These loans are neither delinquent nor on non-accrual status. Our potential problem loans, or loans with potential weaknesses that were not included in the non-accrual loans or in the loans 90 or more past due categories, increased by $117.6 million, or 28.4%, to $531.3 million at June 30, 2026 from $413.7 million at December 31, 2025. These loans as a percentage of total loans increased to 2.3% at June 30, 2026 from 1.8% at December 31, 2025.
Current wording
Potential Problem Loans. In the normal course of business, we become aware of possible credit problems in which borrowers exhibit the potential to be unable to comply in the future with the contractual terms of their loans, but which currently do not yet meet the criteria for classification as NPLs. These loans are neither delinquent nor on non-accrual status. Our potential problem loans, or loans with potential weaknesses that were not included in the non-accrual loans or in the loans 90 or more past due categories, increased by $169.4 million, or 40.9%, to $583.1 million at September 30, 2026 from $413.7 million at December 31, 2025. These loans as a percentage of total loans increased to 2.5% at September 30, 2026 from 1.8% at December 31, 2025.
Previous wording
Commercial Real Estate Office Exposure. As of June 30, 2026 and December 31, 2025 our total office-related commercial real estate (“CRE”) loans (which is comprised of loans within our commercial real estate and construction portfolios that are secured by office space, medical office space, mixed-use, and laboratory/life sciences office properties where rental income is primarily from office space) totaled $1.2 billion and $1.3 billion, respectively. As of June 30, 2026, our office-related CRE loans are primarily concentrated in Massachusetts, where approximately 87.1% of the total recorded investment balance of office-related CRE loans are located, and approximately 15.4% of the total recorded investment balance of office-related CRE loans are located in the City of Boston.
Current wording
Commercial Real Estate Office Exposure. As of September 30, 2026 and December 31, 2025 our total office-related commercial real estate (“CRE”) loans (which is comprised of loans within our commercial real estate and construction portfolios that are secured by office space, medical office space, mixed-use, and laboratory/life sciences office properties where rental income is primarily from office space) totaled $1.2 billion and $1.3 billion, respectively. As of September 30, 2026, our office-related CRE loans are primarily concentrated in Massachusetts, where approximately 87.9% of the total recorded investment balance of office-related CRE loans are located, and approximately 16.0% of the total recorded investment balance of office-related CRE loans are located in the City of Boston.
Previous wording
Given prevailing market conditions such as reduced occupancy as a result of the increase in hybrid and fully remote work arrangements post-COVID and lower commercial real estate valuations, we are carefully monitoring these loans for signs of deterioration in credit quality. Such monitoring includes incremental risk management strategies undertaken by management including monthly internal CRE office exposure portfolio reporting, more frequent portfolio reviews, ongoing monitoring of market conditions, and additional portfolio analysis such as maturity risk analysis and rent rollover risk analysis. As of June 30, 2026, eight of these loans, which had an aggregate recorded investment balance of $7.2 million, were on non-accrual status. As of December 31, 2025, four of these loans were on non-accrual status and had an aggregate recorded investment balance of $36.7 million.
Current wording
Given prevailing market conditions such as reduced occupancy as a result of the increase in hybrid and fully remote work arrangements post-COVID and lower commercial real estate valuations, we are carefully monitoring these loans for signs of deterioration in credit quality. Such monitoring includes incremental risk management strategies undertaken by management including monthly internal CRE office exposure portfolio reporting, more frequent portfolio reviews, ongoing monitoring of market conditions, and additional portfolio analysis such as maturity risk analysis and rent rollover risk analysis. As of September 30, 2026, one of these loans, which had a recorded investment balance of $7.0 million, was on non-accrual status. As of December 31, 2025, four of these loans were on non-accrual status and had an aggregate recorded investment balance of $36.7 million.
Previous wording
The allowance for loan losses decreased by $6.5 million, or 2.0%, to $325.4 million, or 1.40% of total loans, at June 30, 2026 from $331.8 million, or 1.44% of total loans at December 31, 2025. The decrease in the allowance for loan losses for the six months ended June 30, 2026 was primarily due to charge-offs of loans that were previously reserved for on a specific reserve basis.
Current wording
The allowance for loan losses decreased by $4.7 million, to $327.2 million, or 1.39% of total loans, at September 30, 2026 from $331.8 million, or 1.44% of total loans, at December 31, 2025. The decrease in the allowance for loan losses for the nine months ended September 30, 2026 was primarily due to charge-offs of loans that were previously reserved for on a specific reserve basis.
Previous wording
In the ordinary course of business, we enter into commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. The credit risk associated with these commitments is evaluated in a manner similar to the reserving method for loans receivable previously described. The reserve for unfunded lending commitments is included in other liabilities in the Consolidated Balance Sheets. Our reserve for unfunded lending commitments remained consistent at $17.3 million at June 30, 2026 compared to $16.4 million at December 31, 2025.
Current wording
In the ordinary course of business, we enter into commitments to extend credit and standby letters of credit. Such financial instruments are recorded in the financial statements when they become payable. The credit risk associated with these commitments is evaluated in a manner similar to the reserving method for loans receivable previously described. The reserve for unfunded lending commitments is included in other liabilities in the Consolidated Balance Sheets. Our reserve for unfunded lending commitments remained consistent at $16.2 million at September 30, 2026 compared to $16.4 million at December 31, 2025.
Previous wording
Non-accrual loans increased $54.7 million, or 99.9%, to $109.4 million at June 30, 2026 from $54.7 million at June 30, 2025, primarily due to loans acquired from HarborOne in the fourth quarter of 2025, and which were already on non-accrual or were transferred to non-accrual following the completion of the merger. For additional information regarding the credit quality of our loans, see Note 4, “Loans and Allowance for Credit Losses”within the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 in this Quarterly Report on Form 10-Q.
Current wording
Non-accrual loans increased $15.6 million, or 22.6%, to $84.8 million at September 30, 2026 from $69.2 million at September 30, 2025 primarily due to loans acquired from HarborOne in the fourth quarter of 2025 and which were already on non-accrual or were transferred to non-accrual following the completion of the merger. For additional information regarding the credit quality of our loans, see Note 4, “Loans and Allowance for Credit Losses”within the Notes to the Unaudited Consolidated Financial Statements included in Part I, Item 1 in this Quarterly Report on Form 10-Q.
Previous wording
We held an investment in the FHLBB of $21.3 million and $13.8 million at June 30, 2026 and December 31, 2025, respectively. The amount of stock we are required to purchase is proportional to our FHLB advances and level of total assets. Accordingly, our FHLB stock increased due to an increase in our FHLB advances during the six months ended June 30, 2026.
Current wording
We held an investment in the FHLBB of $39.8 million and $13.8 million at September 30, 2026 and December 31, 2025, respectively. The amount of stock we are required to purchase is proportional to our FHLB advances and level of total assets. Accordingly, our FHLB stock increased due to an increase in our FHLB advances as of September 30, 2026.
Previous wording
The balance of our goodwill and other intangible assets was $1.3 billion at both June 30, 2026 and December 31, 2025. We did not record any impairment to our goodwill or other intangible assets during the six months ended June 30, 2026.
Current wording
The balance of our goodwill and other intangible assets was $1.3 billion at both September 30, 2026 and December 31, 2025. We did not record any impairment to our goodwill or other intangible assets during the nine months ended September 30, 2026.
Previous wording
Deposits increased by $0.4 billion, or 1.8%, to $25.9 billion at June 30, 2026 from $25.5 billion at December 31, 2025. This increase was driven by regular deposit inflows primarily comprised of seasonal inflows of municipal deposits during the six months ended June 30, 2026 and increased utilization of brokered certificates of deposit.
Current wording
Deposits increased by $0.5 billion, or 2.1%, to $26.0 billion at September 30, 2026 from $25.5 billion at December 31, 2025. This increase was driven by regular deposit inflows primarily comprised of seasonal inflows of municipal deposits during the nine months ended September 30, 2026 and increased utilization of brokered deposits.
Previous wording
The Bank’s estimate of total uninsured deposits was $10.9 billion and $10.2 billion at June 30, 2026 and December 31, 2025, respectively. In accordance with the FDIC’s Call Report instructions, these estimates include accounts of wholly-owned subsidiaries, the holding company, and internal operating deposit accounts (together referred to as “internal deposit accounts”). In addition, these estimates include municipal deposit accounts for which securities were pledged by us to secure such deposits (“collateralized deposits”). For liquidity monitoring purposes, we exclude internal deposit accounts and collateralized deposits from our estimate of uninsured deposits. Our estimate of uninsured deposits, excluding internal deposit accounts and collateralized deposits, was $8.0 billion and $8.1 billion at June 30, 2026 and December 31, 2025, respectively.
Current wording
The Bank’s estimate of total uninsured deposits was $10.8 billion and $10.2 billion at September 30, 2026 and December 31, 2025, respectively. In accordance with the FDIC’s Call Report instructions, these estimates include accounts of wholly-owned subsidiaries, the holding company, and internal operating deposit accounts (together referred to as “internal deposit accounts”). In addition, these estimates include municipal deposit accounts for which securities were pledged by us to secure such deposits (“collateralized deposits”). For liquidity monitoring purposes, we exclude internal deposit accounts and collateralized deposits from our estimate of uninsured deposits. Our estimate of uninsured deposits, excluding internal deposit accounts and collateralized deposits, was $8.1 billion at both September 30, 2026 and December 31, 2025.
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