Acquisition

12 Months Ended

Dec. 31, 2025

Business Combination [Abstract]

Acquisition

Note 2 –Acquisition

Provident Bancorp, Inc. and BankProv Acquisition

On November 15, 2025, the Company completed its acquisition of Provident Bancorp, Inc. and BankProv (“Provident”). The total consideration paid in the acquisition of Provident was $111.8 million in cash and the issuance of 5,943,682 shares of common stock valued at $114.7 million. The acquisition added $1.40 billion of total assets, $1.18 billion of total net loans and $1.14 billion in total deposits, each at fair value, as of the date of closing.

The acquisition was accounted for under the acquisition method of accounting in accordance with ASC Topic 805, Business Combinations. Under this method of accounting, the respective assets acquired and liabilities assumed were recorded at their estimated fair values. The excess of consideration paid over the estimated fair value of the net assets acquired totaled $18.5 million and was recorded as goodwill. The results of Provident’s operations were included in the Company’s consolidated financial statements beginning on November 15, 2025.

The calculation of goodwill is subject to change for up to one year after the closing date of the transaction as additional information relative to closing date estimated and uncertainties becomes available. As the Company finalizes its analysis of these assets and liabilities, there may be adjustments to the recorded carrying values.

The following table summarizes the estimated fair values of the assets acquired and the liabilities assumed at the date of acquisition from Provident:

	Net Assets Acquired at Fair Value
	(In thousands)
Assets
Cash and due from banks	$	63,724
Available-for-sale securities, at fair value		24,046
Net loans receivable, at fair value		1,176,212
Accrued interest receivable		4,561
Banking premises and equipment, net		11,160
Non-public investments		6,727
Bank-owned life insurance ("BOLI")		47,149
Prepaid expenses and other assets		7,824
Goodwill		18,512
Core deposit intangible		18,800
Deferred income tax asset, net		23,522
Total assets acquired	$	1,402,237
Liabilities and shareholders' equity
Deposits
Core deposits	$	1,015,762
Brokered deposits		120,000
Total deposits		1,135,762
Mortgagors' escrow accounts		640
FHLB borrowings		30,825
Accrued expenses and other liabilities		8,512
Total liabilities assumed		1,175,739
Purchase Price	$	226,498

Fair Value Measurement of Assets Acquired and Liabilities Assumed

The methods used to determine the fair value of the assets acquired and liabilities assumed in the Provident acquisition were as follows:

AFS Securities

The estimated fair values of the AFS securities, primarily comprised of U.S. Government agency mortgage-backed securities, collateralized mortgage obligations, Small Business Administration (“SBA”) pooled securities, and municipal bonds carried on Provident’s consolidated balance sheet, was confirmed using open market pricing provided by independent securities brokers. Based upon management’s determination, a fair value adjustment of $465,000, reflecting a net discount, was recorded on the acquired AFS securities and reflects the net unrealized loss position of such securities at the date of acquisition. AFS securities acquired were sold in their entirety on the date of acquisition.

Loans

Loans acquired in the Provident acquisition were recorded at fair value, and there was no carryover of the ACL. The fair value of loans acquired from Provident was determined using market participant assumptions in estimating the amount and timing of both principal and interest cash flows expected to be collected, as adjusted for an estimate of future credit losses and prepayments, and then applying a market-based discount rate to those cash flows. Management retained a third-party valuation specialist to assist with the determination of the fair value of loans acquired, the results of which were reviewed by management.

Loans acquired in a business combination that are accounted for as PCD assets are presented on the consolidated balance sheet at their amortized cost basis gross of the related allowance for credit losses (“ACL”). The ACL established at acquisition is presented separately as a valuation allowance. The same gross presentation model applies to certain PSLs, where applicable.

A fair value adjustment of $83.3 million was recorded on the loans acquired in the acquisition, comprised of PCD reserves of $42.3 million, PSL reserves of $7.9 million and fair value marks of $33.1 million, and was due primarily to anticipated credit loss, as well as considerations for market interest rates.

A portion of the acquired loans exhibited evidence of more-than-insignificant deterioration in credit quality since origination and thus were reviewed to determine if any loans would be deemed PCD. The following is a summary of the PCD loans identified as a result of the review performed as of the date acquired:

	As of November 15, 2025
	(In thousands)
Gross amortized cost basis at acquisition	$	126,155
ACL on PCD loans		(42,319)
Discount (other than credit losses)		(6,261)
Purchase price of PCD loans at acquisition, at fair value	$	77,575

Premises and Equipment

The Company acquired 7 branches from Provident as of the date of closing, three of which were owned premises. The fair value of properties acquired was derived by valuations prepared by an independent third party utilizing a combination of the cost approach and the sales comparison approach.

Leases

As part of the Provident acquisition the Company added four lease obligations. The Company recorded a $3.7 million right-of-use asset and lease liability for these lease obligations.

Goodwill

The calculation of goodwill is subject to change for up to one year after the date of acquisition as additional information relative to the closing date estimates and uncertainties become available. As the Company finalizes its review of the acquired assets and liabilities, certain adjustments to the recorded carrying values may be required.

Goodwill will be evaluated annually for impairment. For tax purposes, goodwill is amortized over 15 years and that amortization is deductible.

Core Deposit Intangible (“CDI”)

The fair value of the core deposit intangible was determined based on a discounted cash flow analysis using a discount rate commensurate with market participants. To calculate cash flows, deposit account servicing costs (net of deposit fee income) and interest expense on deposits were compared to the cost of alternative funding sources available thorough wholesale borrowing rates and national brokered certificate of deposit offering rates. The projected cash flows were developed using projected deposit attrition rates. Management retained a third-party valuation specialist to assist with the determination of projected cash flows, the results of which were reviewed by management. The core deposit intangible totaled $18.8 million and is being amortized on the sum-of-the-years digits basis over its estimated useful life of approximately 10 years.

BOLI

Provident’s BOLI cash surrender value was $47.1 million with no fair value adjustment.

Certificates of Deposits

Provident’s certificates of deposit were $157.4 million with no fair value adjustment, which would have represented a discount from the value of the contractual repayments of fixed-maturity deposits using prevailing market interest rates for similar-term certificates of deposit, but was determined to be immaterial.

The following table presents certain unaudited pro forma information for the years ended December 31, 2025 and 2024. This unaudited estimated pro forma financial information was calculated as if the acquisition had occurred as of January 1, 2024. This unaudited pro forma information combines the historical results of Provident with the Company’s consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the acquisition occurred as of the beginning of the year prior to the acquisition. The unaudited pro forma information does not consider any changes to the provision for credit losses resulting from recording loan assets at fair value, cost savings, or business synergies. As a result, actual amounts would have differed from the unaudited pro forma information presented.

	Unaudited Pro Forma Financial Information
	for the Years Ended December 31,
		2025		2024
		(In thousands)
Net interest income		$	246,925	$	216,889
Net income (loss)			69,697		40,925