The Company's authorized capital is divided into common stock and preferred stock. The Company is authorized to issue 40,000,000 shares of common stock, with a par value of $0.01 per share, and as of December 31, 2020 had 11,937,795 shares issued and outstanding. Holders of common stock are entitled to one vote per share and are entitled to receive dividends if, as and when declared by the Board. Dividend and liquidation rights of the common stock may be subject to the rights of any outstanding preferred stock. The Company is also authorized to issue 1,000,000 shares of preferred stock, with a par value of $0.01 per share. No preferred stock has been issued as of the date of this Form 10-K.

The Company has a stockholders' rights plan. Under the plan, each share of common stock includes a right to purchase under certain circumstances one one-hundredth of a share of the Company's Series A Junior Participating Preferred Stock, par value $0.01 per share, at a purchase price of $122.50 per one one-hundredth of a preferred share, subject to adjustment, or, in certain circumstances, to receive cash, property, shares of common stock or other securities of the Company. The rights are not presently exercisable and remain attached to the shares of common stock until the occurrence of certain triggering events that would ordinarily be associated with an unsolicited acquisition or attempted acquisition of 10% or more of the Company's outstanding shares of common stock. The rights have no voting or dividend privileges, and unless and until they become exercisable, have no dilutive effect on the earnings of the

The Company's stock incentive plans permit the Board to grant, under various terms, stock options (for the purchase of newly issued shares of common stock), common stock, restricted stock awards, restricted stock units and stock appreciation rights to officers and other employees, non-employee directors and consultants.

The Company issues stock options and restricted stock awards to officers and other employees and restricted stock awards and stock compensation in lieu of cash fees to non-employee directors. The restricted stock awards allow for the non-forfeitable receipt of dividends, and the voting of all shares, whether or not vested, throughout the vesting periods at the same proportional level as common shares outstanding. The unvested restricted stock awards are the Company's only participating securities and are included in shares outstanding. Unvested participating restricted awards amounted to 116,174 shares and 102,056 shares as of December 31, 2020 and December 31, 2019, respectively. See Item (t), "Earnings per Share," contained in Note 1, "Summary of Significant Accounting Policies," to the Company's consolidated financial statements of this Form 10-K, contained above, and Note 16, "Earnings per Share," to the Company's consolidated financial statements of this Form 10-K, contained below, for additional information regarding unvested participating restricted awards and the Company's earnings per share calculation.

Upon vesting, restricted stock awards may be net settled to cover payment for employee tax obligations, resulting in shares of common stock being reacquired by the Company and returned to the pool of shares reserved for issuance under the incentive plans. In accordance with Massachusetts law, shares reacquired by the Company will be treated as authorized but unissued shares.

The Company's stock incentive plans also allow for newly issued shares of common stock to be issued without restrictions to officers and other employees, non-employee directors and consultants. From time to time, the Company issues shares to community members for consulting on regional advisory councils and grants shares of fully vested stock as employee anniversary awards. These shares vest immediately and the cost, which is based on the market price on the date of grant and deemed to be immaterial, is expensed in the period in which the services are rendered. See Note 14, "Stock-Based Compensation," to the Company's consolidated financial statements of this Form 10-K, contained below, for additional information regarding the Company's stock incentive plans.

In addition, the Company maintains a dividend reinvestment and direct stock purchase plan ("DRSPP") which enables stockholders, 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, stockholders and new investors also have the opportunity to purchase shares of the Company's common stock without brokerage fees, subject to monthly minimums and maximums. During the years ended December 31, 2020, 2019, and 2018, the direct purchase component of the DRSPP was used by stockholders to purchase 1,869, 1,609 and 2,652 shares of the Company's common stock totaling $44 thousand, $48 thousand, and $94 thousand, respectively. See "Dividends" below for further information about the dividend reinvestment portion of the DRSPP.

Capital planning by the Company and the Bank considers current needs and anticipated future growth. Ongoing sources of capital include the retention of earnings, less dividends paid, proceeds from the exercise of employee stock options and proceeds from purchases of shares pursuant to the DRSPP. Additional sources of capital for the Company and the Bank have been proceeds from the issuance of common stock and proceeds from the issuance of subordinated debt. The Company believes its current capital is adequate to support ongoing operations.

Management believes, as of December 31, 2020, that the Company and the Bank met all capital adequacy requirements to which they were subject. As of December 31, 2020, and December 31, 2019, 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.

On July 7, 2020, the Company issued $60.0 million of fixed-to-floating rate subordinated notes, that are due in 2030 and redeemable at the option of the Company beginning on or after July 15, 2025. The Notes are intended to qualify as Tier 2 capital for regulatory purposes for the Company. In September 2020, the Company invested $53.0 million of the


	Actual				Minimum Capital for Capital Adequacy Purposes(1)				Minimum Capital To Be Well Capitalized(2)
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2020
The Company
Total Capital to risk-weighted assets ("RWA")	$	415,999	14.62	%	$	227,631	8.00	%	N/A		N/A
Tier 1 Capital to RWA	306,577		10.77	%	170,723		6.00	%	N/A		N/A
Tier 1 Capital to average assets ("AA") or Leverage Ratio	306,577		7.52	%	163,127		4.00	%	N/A		N/A
Common Equity Tier 1 Capital to RWA	306,577		10.77	%	128,042		4.50	%	N/A		N/A

The Bank
Total Capital to RWA	$	413,862	14.55	%	$	227,631	8.00	%	$	284,538	10.00	%
Tier 1 Capital to RWA	378,184		13.29	%	170,723		6.00	%	227,631		8.00	%
Tier 1 Capital to AA, Leverage Ratio	378,184		9.27	%	163,127		4.00	%	203,909		5.00	%
Common Equity Tier 1 Capital to RWA	378,184		13.29	%	128,042		4.50	%	184,950		6.50	%


	Actual				Minimum Capital for Capital Adequacy Purposes(1)				Minimum Capital To Be Well Capitalized(2)
(Dollars in thousands)	Amount		Ratio		Amount		Ratio		Amount		Ratio
As of December 31, 2019
The Company
Total Capital to RWA	$	328,961	11.88	%	$	221,435	8.00	%	N/A		N/A
Tier 1 Capital to RWA	280,475		10.13	%	166,077		6.00	%	N/A		N/A
Tier 1 Capital to AA, Leverage Ratio	280,475		8.86	%	126,661		4.00	%	N/A		N/A
Common Equity Tier 1 Capital to RWA	280,475		10.13	%	124,557		4.50	%	N/A		N/A

The Bank
Total Capital to RWA	$	328,489	11.87	%	$	221,435	8.00	%	$	276,794	10.00	%
Tier 1 Capital to RWA	294,875		10.65	%	166,077		6.00	%	221,435		8.00	%
Tier 1 Capital to AA, Leverage Ratio	294,875		9.31	%	126,661		4.00	%	158,326		5.00	%
Common Equity Tier 1 Capital to RWA	294,875		10.65	%	124,557		4.50	%	179,916		6.50	%

The Company is subject to the Basel III capital ratio requirements which include a "capital conservation buffer" of 2.50% above the regulatory minimum risk-based capital adequacy requirements shown above. The capital conservation buffer requirement, which had a phase in implementation period, was fully implemented on January 1, 2019. If a banking organization dips into its capital conservation buffer it may be restricted in its activities, including its ability to pay dividends and discretionary bonus payments to its executive officers. Both the Company's and the Bank's actual ratios, as outlined in the table above, exceeded the Basel III risk-based capital requirement with the capital conservation buffer as of December 31, 2020.


	Basel III Minimum for Capital Adequacy Purposes	Basel III Additional Capital Conservation Buffer	Basel III "Adequate" Ratio with Capital Conservation Buffer
Total Capital to RWA	8.00%	2.50%	10.50%
Tier 1 Capital to RWA	6.00%	2.50%	8.50%
Tier 1 Capital to AA, or Leverage Ratio	4.00%	—%	4.00%
Common equity tier 1 capital to RWA	4.50%	2.50%	7.00%

Failure to meet minimum capital requirements can initiate or result in certain mandatory and possibly additional discretionary supervisory actions by regulators that, if undertaken, could have a material adverse effect on the Company's consolidated financial statements. Under applicable capital adequacy requirements and the regulatory framework for prompt corrective action applicable to the Bank, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities and certain off-balance sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classifications are also subject to qualitative judgments by the regulators about components, risk weightings, and other factors.

Neither the Company nor the Bank may declare or pay dividends on its stock if the effect thereof would cause stockholders' equity to be reduced below applicable regulatory capital requirements or if such declaration and payment would otherwise violate regulatory requirements.

As the principal asset of the Company, the Bank currently provides the only source of cash for the payment of dividends by the Company. Under Massachusetts law, trust companies such as the Bank may pay dividends only out of "net profits" and only to the extent that such payments will not impair the Bank's capital stock. 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. Applicable provisions of the FDIC Improvement Act 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. Any restrictions, regulatory or otherwise, on the ability of the Bank to pay dividends to the Company may restrict the ability of the Company to pay dividends to the holders of its common stock.

The statutory term "net profits" essentially equates with the accounting term "net income" and is defined under the Massachusetts banking statutes 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.

For the year ended December 31, 2020, the Company declared $8.3 million in cash dividends and stockholders utilized the dividend reinvestment portion of the DRSPP to purchase an aggregate of 50,506 shares of the Company's common stock totaling $1.2 million. In 2019, the Company declared $7.5 million in cash dividends and stockholders utilized the dividend reinvestment portion of the DRSPP to purchase 39,176 shares of the Company's common stock totaling $1.2 million. In 2018, the Company declared $6.8 million in cash dividends and stockholders utilized the dividend reinvestment portion of the DRSPP to purchase 37,999 shares of the Company's common stock totaling $1.3 million. See "Shares Authorized and Share Issuance" above in this Note 12 of this Form 10-K for more information on the DRSPP, including the direct stock purchase component of the plan.