EBC Eastern Bankshares Inc

~ Company Announces a 9% Increase to Quarterly Dividend ~

Eastern Bankshares, Inc. (the “Company”) (NASDAQ: EBC), the holding company of Eastern Bank, today announced its 2024 third quarter financial results.

FINANCIAL HIGHLIGHTS

• Net loss of $6.2 million included the initial provision on non-purchased credit deteriorated (“non-PCD”) loans of $40.9 million and merger-related charges of $30.5 million. Operating net income of $49.7 million, or 0.25 per diluted share.
• Merger EPS accretion and cost saves on track to exceed original estimates.
• Net interest margin on a fully tax equivalent (“FTE”) basis of 2.97%, an increase of 0.33%, including net discount accretion from the Cambridge merger of 0.18%.
• Trust and investment advisory fees increased $8.2 million, or 122%, from the prior quarter to $14.9 million, due primarily to increased assets under management (“AUM”) as a result of the merger.
• Book value per share and tangible book value per share ended the quarter at $17.09 and $12.17, respectively.
• Non-performing loans ("NPLs") increased by $84.7 million to $124.5 million, or 0.70% of total loans, due primarily to purchased credit deteriorated (“PCD”) loans acquired from Cambridge that were thoroughly assessed by the Credit teams and adequately reserved.
• The Board declared a 9% increase in the quarterly cash dividend to $0.12 per share.

 

As of and for three months ended

 

Linked quarter Change

(Unaudited, $ in thousands, except per share data)

Sep 30, 2024

Jun 30, 2024

 

△ $

△ %

Earnings

 

 

 

 

 

Net (loss) income

$

(6,188

)

$

26,331

 

 

$

(32,519

)

(124

)%

Per share, diluted

$

(0.03

)

$

0.16

 

 

$

(0.19

)

(119

)%

 

 

 

 

 

 

Operating net income*

$

49,665

 

$

36,519

 

 

$

13,146

 

36

%

Per share, diluted*

$

0.25

 

$

0.22

 

 

$

0.03

 

14

%

 

 

 

 

 

 

Net interest income

$

169,855

 

$

128,649

 

 

$

41,206

 

32

%

NIM - FTE (1)*

 

2.97

%

 

2.64

%

 

 

0.33

%

NM

 

 

 

 

 

 

 

Noninterest income

$

33,528

 

$

25,348

 

 

$

8,180

 

32

%

Operating noninterest income*

$

32,907

 

$

31,146

 

 

$

1,761

 

6

%

Noninterest expense

$

159,753

 

$

109,869

 

 

$

49,884

 

45

%

Operating noninterest expense*

$

130,850

 

$

105,255

 

 

$

25,595

 

24

%

Efficiency ratio

 

78.5

%

 

71.3

%

 

 

7.2

%

NM

 

Operating efficiency ratio*

 

60.1

%

 

63.7

%

 

 

(3.6

)%

NM

 

 

 

 

 

 

 

Balance sheet

 

 

 

 

 

Period-end balances

 

 

 

 

 

Loans

$

18,064,126

 

$

14,145,520

 

 

$

3,918,606

 

28

%

Deposits

$

21,216,854

 

$

17,537,809

 

 

$

3,679,045

 

21

%

Average balances

 

 

 

 

 

Loans

$

17,274,903

 

$

14,113,343

 

 

$

3,161,560

 

22

%

Deposits

$

20,858,252

 

$

17,751,502

 

 

$

3,106,750

 

18

%

 

 

 

 

 

 

Capital

 

 

 

 

 

Tangible shareholders’ equity / tangible assets*

 

10.69

%

 

11.73

%

 

 

(1.04

)%

NM

 

CET1 capital ratio (2)

 

15.52

%

 

18.63

%

 

 

(3.11

)%

NM

 

Book value per share

$

17.09

 

$

16.80

 

 

$

0.29

 

2

%

Tangible book value per share*

$

12.17

 

$

13.60

 

 

$

(1.43

)

(11

)%

 

 

 

 

 

 

Asset quality

 

 

 

 

 

Non-performing loans

$

124,503

 

$

39,771

 

 

$

84,732

 

213

%

Total non-performing loans to total loans

 

0.70

%

 

0.28

%

 

 

0.42

%

NM

 

Net charge-offs (recoveries) to average total loans (1)

 

0.12

%

 

(0.02

)%

 

 

0.14

%

NM

 

 

 

 

 

 

 

(1) Presented on an annualized basis.

(2) CET1 capital ratio as of September 30, 2024 is a preliminary estimate.

*Non-GAAP

 

 

 

 

 

On July 12, 2024, the Company completed its merger (“the merger”) with Cambridge Bancorp (“Cambridge”), the parent company of Cambridge Trust Company, and therefore the third quarter financial results reflect the partial quarter impact of the merger. The merger added approximately $3.7 billion in loans, $3.9 billion in deposits, each at fair value, and $4.7 billion in AUM.

“This quarter marked a transformational moment in Eastern’s history, as we closed on our merger with Cambridge Trust,” said Bob Rivers, Executive Chair and Chair of the Board of Directors of the Company and Eastern Bank. “This combination represents a powerful step forward in achieving our strategic vision, positioning us as a stronger, more competitive institution and Greater Boston’s leading local bank. I want to acknowledge the hard work and dedication of our entire team.”

Denis Sheahan, Chief Executive Officer, added, “While we’ve grown, our focus remains deeply rooted in the Greater Boston community. Our expanded capabilities allow us to better serve the consumers and businesses that drive this region’s economy, by providing comprehensive, one-stop banking and wealth management solutions, ensuring that we remain a committed resource in their success.”

“Following successful bank and wealth system conversions, we are on track to achieve the merger-related financial targets that were set forth at the time of our announcement just over a year ago,” said David Rosato, Chief Financial Officer. “This accomplishment underscores the strength of our integration strategy and our commitment to deliver shareholder value.”

BALANCE SHEET

Total assets were $25.5 billion at September 30, 2024, representing an increase of $4.5 billion, or 21.2% from June 30, 2024.

• Cash and equivalents increased $138.6 million to $889.5 million.
• Securities increased $56.3 million, or 1.2%, to $4.6 billion, due to an increase in the market value of available for sale securities (“AFS securities”) driven by lower interest rates, partially offset by principal runoff. Acquired securities totaling $883.0 million were sold following completion of the merger.
• Loans totaled $18.1 billion, representing an increase of $3.9 billion, or 27.7%, due to the addition of Cambridge. Eastern-originated loans declined modestly by $16.1 million, or 0.1%, in the quarter.
• Deposits totaled $21.2 billion, representing an increase of $3.7 billion, or 21.0%. The merger added $3.9 billion of deposits. Legacy Eastern deposits decreased $195 million, or 0.9%, due primarily to a seasonal decline in municipal deposits, partially offset by an increase in time deposits.
• FHLB advances decreased $0.1 million to $17.3 million. Proceeds from the securities sale were used to pay off FHLB advances of $782.0 million that the Company assumed through the merger.
• Shareholders’ equity was $3.7 billion, representing an increase of $703.7 million, due primarily to the common shares issued in the merger, as well as an increase in AOCI, partially offset by a decrease in retained earnings.

Please refer to Appendix E for more information on organic loan and deposit growth and the impact of the Cambridge merger, and Appendix F for a roll-forward of tangible shareholders’ equity.

NET INTEREST INCOME

Net interest income was $169.9 million for the third quarter, compared to $128.6 million, representing an increase of $41.2 million, due to an increase in the net interest margin and increased average earning assets.

• Net interest income included net accretion income of $10.8 million from purchase accounting adjustments in connection with the merger.
• The net interest margin on a FTE basis was 2.97%, representing a 33 basis point increase and included net discount accretion of 18 basis points from the Cambridge merger.
• Total interest-earning assets yield increased 41 basis points from the prior quarter to 4.60%, due primarily to an increase in loan yields of 39 basis points, as well as higher other short-term investment balances.
• Total interest-bearing liabilities cost increased 6 basis points to 2.50%.

NONINTEREST INCOME

Noninterest income was $33.5 million for the third quarter, compared to $25.3 million, representing an increase of $8.2 million. Operating noninterest income was $32.9 million, compared to $31.1 million, representing an increase of $1.8 million.

• Trust and investment advisory fees increased $8.2 million to $14.9 million, due primarily to increased AUM as a result of the merger.
• Service charges on deposit accounts increased $0.2 million to $8.1 million.
• Debit card processing fees increased $0.3 million to $3.8 million.
• Customer swap income increased $0.1 million to $0.6 million.
• Income from investments held in rabbi trust accounts increased $1.8 million to $3.6 million.
• Losses on sales of mortgage loans held for sale were $0.4 million, compared to losses of $0.2 million in the prior quarter.
• There were no losses on sales of AFS securities in the third quarter, compared to losses of $7.6 million in the prior quarter.
• Other noninterest income decreased $9.8 million to $2.9 million, due in part to the merger-related disposal of fixed assets totaling $3.0 million. The prior quarter included an early termination payment of $7.8 million received from the early withdrawal of a $100 million deposit contract.

NONINTEREST EXPENSE

Noninterest expense was $159.8 million, compared to $109.9 million, an increase of $49.9 million. The increase was primarily driven by the increase in merger-related expenses of $23.9 million. Operating noninterest expense was $130.9 million, compared to $105.3 million, representing an increase of $25.6 million.

• Salaries and employee benefits expense was $93.8 million, an increase of $28.5 million. The increase in salaries expense of $24.6 million was due primarily to the addition of colleagues, and an increase in merger-related expenses of $11.8 million, including retention bonuses and severance payments. The increase in employee benefits expense of $3.9 million was attributable to an increase in federal payroll tax expense of $1.4 million, as well as the addition of colleagues and the increased market value of investments held in rabbi trust accounts by the Company’s defined contribution supplemental executive retirement plan (“DC SERP”).
• Office occupancy and equipment expense was $14.5 million, an increase of $4.4 million, due primarily to merger-related expenses of $2.6 million, as well as the addition of leases and equipment from the merger.
• Data processing expense was $19.5 million, an increase of $1.5 million.
• Professional services expense was $9.0 million, an increase of $4.7 million, due primarily to merger-related expenses of $4.5 million.
• Marketing expense was $1.6 million, a decrease of $0.3 million.
• Federal Deposit Insurance Corporation (“FDIC”) insurance expense was $3.2 million, a decrease of $1.3 million. The prior quarter included a FDIC special assessment of $1.9 million.
• Amortization of intangible assets was $6.2 million, an increase of $5.7 million, driven primarily by the amortization of core deposit intangibles and wealth management intangibles in connection with the merger.
• Other noninterest expense was $12.1 million, an increase of $6.7 million, due primarily to an increase in provision for off balance sheet credit exposures of $2.9 million, including a $1.9 million initial provision on off balance sheet credit exposures acquired from Cambridge, as well as merger-related contract termination fees of $2.6 million.

Please refer to Appendix D for additional detail on merger-related charges.

ASSET QUALITY

Non-performing loans (“NPLs”) totaled $124.5 million, or 0.70% of total loans, at September 30, 2024 compared to $39.8 million, or 0.28% of total loans, at the end of the prior quarter. The increase in NPLs was driven primarily by purchased credit deteriorated (“PCD”) loans acquired from Cambridge that were on non-accrual status at September 30, 2024.

During the third quarter of 2024, the Company recorded total net charge-offs of $5.1 million, or 0.12% of average total loans on an annualized basis, compared to total net recoveries of $0.8 million, or 0.02% of average total loans on an annualized basis, in the prior quarter, respectively.

The Company recorded a provision for loan losses totaling $47.0 million, including a $40.9 million initial provision on non-PCD loans acquired from Cambridge. The remaining provision was primarily associated with individual reserves on commercial real estate loans during the quarter.

The allowance for loan losses was $253.8 million at September 30, 2024, or 1.43% of total loans, compared to $156.1 million, or 1.11% of total loans, at June 30, 2024. The allowance in the third quarter included a $55.8 million initial allowance on PCD loans and a $40.9 million allowance established via the aforementioned initial provision on non-PCD loans, both related to the merger.

DIVIDENDS AND SHARE REPURCHASES

The Company’s Board of Directors declared a quarterly cash dividend of $0.12 per common share, representing a $0.01, or 9%, increase. The dividend will be payable on December 16, 2024 to shareholders of record as of the close of business on December 3, 2024.

The Company repurchased 836,399 shares of common stock during the third quarter at a weighted average price of $15.08, for an aggregate purchase price of $12.6 million.

CONFERENCE CALL AND PRESENTATION INFORMATION

A conference call and webcast covering Eastern’s third quarter 2024 earnings will be held on Friday, October 25, 2024 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (800) 549-8228 from within the U.S. and reference conference ID 35193. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A presentation providing additional information for the quarter is also available at investor.easternbank.com. A replay of the webcast will be available on this site.

ABOUT EASTERN BANKSHARES, INC.

Eastern Bankshares, Inc. is the holding company for Eastern Bank. Founded in 1818, Eastern Bank is Greater Boston’s leading local bank with more than 110 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, Rhode Island and Connecticut. As of September 30, 2024, Eastern Bank had approximately $25.5 billion in assets. Eastern provides a full range of banking and wealth management solutions for consumers and businesses of all sizes including through its Cambridge Trust Wealth Management division, the largest bank-owned investment advisor in Massachusetts with approximately $8.4 billion in assets under management, and takes pride in its outspoken advocacy and community support that includes more than $240 million in charitable giving since 1994. An inclusive company, Eastern is comprised of deeply committed professionals who value relationships with their customers, colleagues and communities. For investor information, visit investor.easternbank.com.

NON-GAAP FINANCIAL MEASURES

*Denotes a non-GAAP financial measure used in the press release.

A non-GAAP financial measure is defined as a numerical measure of the Company’s historical or future financial performance, financial position or cash flows that excludes (or includes) amounts, or is subject to adjustments that have the effect of excluding (or including) amounts that are included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) in the Company’s statement of income, balance sheet or statement of cash flows (or equivalent statements).

The Company presents non-GAAP financial measures, which management uses to evaluate the Company’s performance, and which exclude the effects of certain transactions that management believes are unrelated to its core business and are therefore not necessarily indicative of its current performance or financial position. Management believes excluding these items facilitates greater visibility for investors into the Company’s core business as well as underlying trends that may, to some extent, be obscured by inclusion of such items in the corresponding GAAP financial measures. Except as otherwise indicated, these non-GAAP financial measures presented in this press release exclude discontinued operations.

There are items in the Company’s financial statements that impact its financial results, but which management believes are unrelated to the Company’s core business. Accordingly, the Company presents noninterest income on an operating basis, total operating revenue, noninterest expense on an operating basis, operating net income, operating earnings per share, operating return on average assets, operating return on average shareholders’ equity, operating return on average tangible shareholders’ equity (discussed further below), and the operating efficiency ratio. Each of these figures excludes the impact of such applicable items because management believes such exclusion can provide greater visibility into the Company’s core business and underlying trends. Such items that management does not consider to be core to the Company’s business include (i) income and expenses from investments held in rabbi trusts, (ii) gains and losses on sales of securities available for sale, net, (iii) gains and losses on the sale of other assets, (iv) rabbi trust employee benefits, (v) impairment charges on tax credit investments and associated tax credit benefits, (vi) other real estate owned (“OREO”) gains, (vii) merger and acquisition expenses, (viii) the non-cash pension settlement charge recognized related to the defined benefit plan, (ix) certain discrete tax items, and (x) net income from discontinued operations. Return on average tangible shareholders’ equity, operating return on average tangible shareholders’ equity as well as the operating efficiency ratio also further exclude the effect of amortization of intangible assets. The Company does not provide an outlook for its total noninterest income and total noninterest expense because each contains income or expense components, as applicable, such as income associated with rabbi trust accounts and rabbi trust employee benefit expense, which are market-driven, and over which the Company cannot exercise control. Accordingly, reconciliations of the Company’s outlook for its noninterest income on an operating basis and its noninterest expense on an operating basis to an outlook for total noninterest income and total noninterest expense are not provided.

Management also presents tangible assets, tangible shareholders’ equity, average tangible shareholders’ equity, tangible book value per share, the ratio of tangible shareholders’ equity to tangible assets, return on average tangible shareholders’ equity, and operating return on average shareholders’ equity (discussed further above), each of which excludes the impact of goodwill and other intangible assets and in the case of tangible net income (loss), return on average tangible shareholders’ equity and operating return on average tangible shareholders’ equity excludes the after-tax impact of amortization of intangible assets, as management believes these financial measures provide investors with the ability to further assess the Company’s performance, identify trends in its core business and provide a comparison of its capital adequacy to other companies. The Company includes the tangible ratios because management believes that investors may find it useful to have access to the same analytical tools used by management to assess performance and identify trends.

These non-GAAP financial measures presented in this press release should not be considered an alternative or substitute for financial results or measures determined in accordance with GAAP or as an indication of the Company’s cash flows from operating activities, a measure of its liquidity position or an indication of funds available for its cash needs. An item which management considers to be non-core and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular period. In addition, management’s methodology for calculating non-GAAP financial measures may differ from the methodologies employed by other banking companies to calculate the same or similar performance measures, and accordingly, the Company’s reported non-GAAP financial measures may not be comparable to the same or similar performance measures reported by other banking companies. Please refer to Appendices A-E for reconciliations of the Company's GAAP financial measures to the non-GAAP financial measures in this press release.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target”, “outlook” and similar expressions. Forward-looking statements, by their nature, are subject to risks and uncertainties. There are many factors that could cause actual results to differ materially from expected results described in the forward-looking statements.

Certain factors that could cause actual results to differ materially from expected results include; adverse developments in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for loan losses; increased competitive pressures; changes in interest rates and resulting changes in competitor or customer behavior, mix or costs of sources of funding, and deposit amounts and composition; risks associated with the Company’s implementation of the merger, including that revenue or expense synergies may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; that following completion of the merger, Eastern’s business may not perform as expected due to transaction-related uncertainty or other factors; that Eastern is unable to successfully implement integration strategies; that Eastern’s expansion of services or capabilities resulting from the merger may be more challenging than anticipated; reputational risks and the reaction of customers to the transaction; the inability to implement onboarding plans and other consequences associated with mergers; the diversion of management time and Company resources on merger-related issues; and disruptions arising from transitions in management personnel; adverse national or regional economic conditions or conditions within the securities markets or banking sector; legislative and regulatory changes and related compliance costs that could adversely affect the business in which the Company and its subsidiaries, including Eastern Bank, are engaged, including the effect of, and changes in, monetary and fiscal policies and laws, such as the interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations, including inflationary or recessionary pressures, interest rate sensitivity, liquidity constraints, increased borrowing and funding costs, and fluctuations due to actual or anticipated changes to federal tax laws; the realizability of deferred tax assets; the Company’s ability to successfully implement its risk mitigation strategies; asset and credit quality deterioration, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; operational risks such as cybersecurity incidents, natural disasters, and pandemics, including COVID-19 and the failure of the Company to execute its planned share repurchases. For further discussion of such factors, please see the Company’s most recent Annual Report on Form 10-K and subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available on the SEC’s website at www.sec.gov.

You should not place undue reliance on forward-looking statements, which reflect the Company's expectations only as of the date of this press release. The Company does not undertake any obligation to update forward-looking statements.

 

EASTERN BANKSHARES, INC.

SELECTED FINANCIAL HIGHLIGHTS (1)

Certain information in this press release is presented as reviewed by the Company’s management and includes information derived from the Company’s Consolidated Statements of Income, non-GAAP financial measures, and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."

 

As of and for the three months ended

(Unaudited, dollars in thousands, except per-share data)

Sep 30, 2024

Jun 30, 2024

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Earnings data

 

 

 

 

 

Net interest income

$

169,855

 

$

128,649

 

$

129,900

 

$

133,307

 

$

137,205

 

Noninterest income

 

33,528

 

 

25,348

 

 

27,692

 

 

26,739

 

 

19,157

 

Total revenue

 

203,383

 

 

153,997

 

 

157,592

 

 

160,046

 

 

156,362

 

Noninterest expense

 

159,753

 

 

109,869

 

 

101,202

 

 

121,029

 

 

101,748

 

Pre-tax, pre-provision income

 

43,630

 

 

44,128

 

 

56,390

 

 

39,017

 

 

54,614

 

Provision for allowance for loan losses

 

46,983

 

 

6,126

 

 

7,451

 

 

5,198

 

 

7,328

 

Pre-tax (loss) income

 

(3,353

)

 

38,002

 

 

48,939

 

 

33,819

 

 

47,286

 

Net (loss) income from continuing operations

 

(6,188

)

 

26,331

 

 

38,647

 

 

31,509

 

 

63,464

 

Net income (loss) from discontinued operations

 

—

 

 

—

 

 

—

 

 

286,994

 

 

(4,351

)

Net (loss) income

 

(6,188

)

 

26,331

 

 

38,647

 

 

318,503

 

 

59,113

 

Operating net income (non-GAAP)

 

49,665

 

 

36,519

 

 

38,081

 

 

16,875

 

 

52,085

 

 

 

 

 

 

 

Per-share data

 

 

 

 

 

(Loss) earnings per share, diluted

$

(0.03

)

$

0.16

 

$

0.24

 

$

1.95

 

$

0.36

 

Continuing operations

$

(0.03

)

$

0.16

 

$

0.24

 

$

0.19

 

$

0.39

 

Discontinued operations

$

—

 

$

—

 

$

—

 

$

1.76

 

$

(0.03

)

Operating earnings per share, diluted (non-GAAP)

$

0.25

 

$

0.22

 

$

0.23

 

$

0.10

 

$

0.32

 

Book value per share

$

17.09

 

$

16.80

 

$

16.72

 

$

16.86

 

$

13.87

 

Tangible book value per share (non-GAAP)

$

12.17

 

$

13.60

 

$

13.51

 

$

13.65

 

$

10.14

 

 

 

 

 

 

 

Profitability

 

 

 

 

 

Return on average assets (2)

 

(0.10

)%

 

0.50

%

 

0.74

%

 

0.59

%

 

1.18

%

Operating return on average assets (non-GAAP) (2)

 

0.79

%

 

0.70

%

 

0.72

%

 

0.31

%

 

0.97

%

Return on average shareholders' equity (2)

 

(0.70

)%

 

3.62

%

 

5.23

%

 

4.66

%

 

9.91

%

Operating return on average shareholders' equity (2)

 

5.60

%

 

5.03

%

 

5.17

%

 

2.51

%

 

8.14

%

Return on average tangible shareholders' equity (non-GAAP) (2) (3)

 

(0.26

)%

 

4.54

%

 

6.52

%

 

6.06

%

 

13.46

%

Operating return on average tangible shareholders' equity (non-GAAP) (2) (3)

 

8.45

%

 

6.28

%

 

6.42

%

 

3.27

%

 

11.07

%

Net interest margin (FTE) (2)

 

2.97

%

 

2.64

%

 

2.68

%

 

2.69

%

 

2.77

%

Cost of deposits (2)

 

1.82

%

 

1.78

%

 

1.66

%

 

1.51

%

 

1.33

%

Efficiency ratio

 

78.5

%

 

71.3

%

 

64.2

%

 

75.6

%

 

65.1

%

Operating efficiency ratio (non-GAAP) (4)

 

60.1

%

 

63.7

%

 

61.6

%

 

73.3

%

 

60.5

%

 

 

 

 

 

 

Balance Sheet (end of period)

 

 

 

 

 

Total assets

$

25,507,187

 

$

21,044,169

 

$

21,174,804

 

$

21,133,278

 

$

21,146,292

 

Total loans

 

18,064,126

 

 

14,145,520

 

 

14,088,747

 

 

13,973,428

 

 

13,919,275

 

Total deposits

 

21,216,854

 

 

17,537,809

 

 

17,666,733

 

 

17,596,217

 

 

17,424,169

 

Total loans / total deposits

 

85

%

 

81

%

 

80

%

 

79

%

 

80

%

 

 

 

 

 

 

Asset quality

 

 

 

 

 

Allowance for loan losses ("ALLL")

$

253,821

 

$

156,146

 

$

149,190

 

$

148,993

 

$

155,146

 

ALLL / total nonperforming loans ("NPLs")

 

203.87

%

 

392.61

%

 

260.94

%

 

283.49

%

 

326.86

%

Total NPLs / total loans

 

0.70

%

 

0.28

%

 

0.41

%

 

0.38

%

 

0.34

%

Net charge-offs ("NCOs") (recoveries) / average total loans (2)

 

0.12

%

 

(0.02

)%

 

0.21

%

 

0.32

%

 

0.00

%

 

 

 

 

 

 

Capital adequacy

 

 

 

 

 

Shareholders' equity / assets

 

14.39

%

 

14.10

%

 

13.95

%

 

14.08

%

 

11.57

%

Tangible shareholders' equity / tangible assets (non-GAAP)

 

10.69

%

 

11.73

%

 

11.58

%

 

11.71

%

 

8.73

%

 

 

 

 

 

 

(1) Total assets, average assets and average tangible shareholders' equity components as of and for the three months ended Sep 30, 2023 and Dec 31, 2023 presented in this table include discontinued operations.

(2) Presented on an annualized basis.

(3) The return on average tangible shareholders' equity ratio and operating return on average tangible shareholders' equity ratio exclude the amortization of intangible assets, net of tax.

(4) The operating efficiency ratio excludes the amortization of intangible assets.

 

EASTERN BANKSHARES, INC.

CONSOLIDATED BALANCE SHEETS

 

 

As of

 

Sep 30, 2024 change from

(Unaudited, dollars in thousands)

Sep 30, 2024

Jun 30, 2024

Sep 30, 2023

 

Jun 30, 2024

 

Sep 30, 2023

ASSETS

 

 

 

 

△ $

△ %

 

△ $

△ %

Cash and due from banks

$

98,299

 

$

72,890

 

$

72,689

 

 

$

25,409

 

35

%

 

$

25,610

 

35

%

Short-term investments

 

791,177

 

 

677,958

 

 

536,119

 

 

 

113,219

 

17

%

 

 

255,058

 

48

%

Cash and cash equivalents

 

889,476

 

 

750,848

 

 

608,808

 

 

 

138,628

 

18

%

 

 

280,668

 

46

%

Available for sale ("AFS") securities

 

4,163,352

 

 

4,097,842

 

 

4,261,518

 

 

 

65,510

 

2

%

 

 

(98,166

)

(2

)%

Held to maturity ("HTM") securities

 

427,459

 

 

436,712

 

 

455,900

 

 

 

(9,253

)

(2

)%

 

 

(28,441

)

(6

)%

Total securities

 

4,590,811

 

 

4,534,554

 

 

4,717,418

 

 

 

56,257

 

1

%

 

 

(126,607

)

(3

)%

Loans held for sale

 

1,993

 

 

1,308

 

 

23,892

 

 

 

685

 

52

%

 

 

(21,899

)

(92

)%

Loans:

 

 

 

 

 

 

 

 

 

Commercial and industrial

 

3,340,029

 

 

3,084,186

 

 

3,087,509

 

 

 

255,843

 

8

%

 

 

252,520

 

8

%

Commercial real estate

 

7,174,861

 

 

5,440,411

 

 

5,396,912

 

 

 

1,734,450

 

32

%

 

 

1,777,949

 

33

%

Commercial construction

 

513,519

 

 

447,157

 

 

382,615

 

 

 

66,362

 

15

%

 

 

130,904

 

34

%

Business banking

 

1,321,179

 

 

1,108,163

 

 

1,087,799

 

 

 

213,016

 

19

%

 

 

233,380

 

21

%

Total commercial loans

 

12,349,588

 

 

10,079,917

 

 

9,954,835

 

 

 

2,269,671

 

23

%

 

 

2,394,753

 

24

%

Residential real estate

 

4,080,736

 

 

2,562,808

 

 

2,550,861

 

 

 

1,517,928

 

59

%

 

 

1,529,875

 

60

%

Consumer home equity

 

1,361,971

 

 

1,254,105

 

 

1,193,859

 

 

 

107,866

 

9

%

 

 

168,112

 

14

%

Other consumer

 

271,831

 

 

248,690

 

 

219,720

 

 

 

23,141

 

9

%

 

 

52,111

 

24

%

Total loans

 

18,064,126

 

 

14,145,520

 

 

13,919,275

 

 

 

3,918,606

 

28

%

 

 

4,144,851

 

30

%

Allowance for loan losses

 

(253,821

)

 

(156,146

)

 

(155,146

)

 

 

(97,675

)

63

%

 

 

(98,675

)

64

%

Unamortized prem./disc. and def. fees

 

(308,243

)

 

(35,601

)

 

(19,307

)

 

 

(272,642

)

766

%

 

 

(288,936

)

1497

%

Net loans

 

17,502,062

 

 

13,953,773

 

 

13,744,822

 

 

 

3,548,289

 

25

%

 

 

3,757,240

 

27

%

Federal Home Loan Bank stock, at cost

 

5,865

 

 

5,879

 

 

37,125

 

 

 

(14

)

—

%

 

 

(31,260

)

(84

)%

Premises and equipment

 

78,776

 

 

60,910

 

 

59,033

 

 

 

17,866

 

29

%

 

 

19,743

 

33

%

Bank-owned life insurance

 

203,635

 

 

166,710

 

 

163,700

 

 

 

36,925

 

22

%

 

 

39,935

 

24

%

Goodwill and other intangibles, net

 

1,057,509

 

 

565,196

 

 

566,709

 

 

 

492,313

 

87

%

 

 

490,800

 

87

%

Deferred income taxes, net

 

319,206

 

 

276,064

 

 

416,081

 

 

 

43,142

 

16

%

 

 

(96,875

)

(23

)%

Prepaid expenses

 

201,285

 

 

183,245

 

 

156,113

 

 

 

18,040

 

10

%

 

 

45,172

 

29

%

Other assets

 

656,569

 

 

545,682

 

 

527,873

 

 

 

110,887

 

20

%

 

 

128,696

 

24

%

Assets of discontinued operations

 

—

 

 

—

 

 

124,718

 

 

 

—

 

—

%

 

 

(124,718

)

(100

)%

Total assets

$

25,507,187

 

$

21,044,169

 

$

21,146,292

 

 

$

4,463,018

 

21

%

 

$

4,360,895

 

21

%

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

Demand

$

5,856,171

 

$

4,808,938

 

$

5,177,015

 

 

$

1,047,233

 

22

%

 

$

679,156

 

13

%

Interest checking accounts

 

4,562,226

 

 

3,532,811

 

 

3,671,871

 

 

 

1,029,415

 

29

%

 

 

890,355

 

24

%

Savings accounts

 

1,681,093

 

 

1,238,009

 

 

1,393,545

 

 

 

443,084

 

36

%

 

 

287,548

 

21

%

Money market investment

 

5,572,277

 

 

5,014,900

 

 

4,709,149

 

 

 

557,377

 

11

%

 

 

863,128

 

18

%

Certificates of deposit

 

3,545,087

 

 

2,943,151

 

 

2,472,589

 

 

 

601,936

 

20

%

 

 

1,072,498

 

43

%

Total deposits

 

21,216,854

 

 

17,537,809

 

 

17,424,169

 

 

 

3,679,045

 

21

%

 

 

3,792,685

 

22

%

Borrowed funds:

 

 

 

 

 

 

 

 

 

Federal Home Loan Bank advances

 

17,342

 

 

17,415

 

 

673,525

 

 

 

(73

)

—

%

 

 

(656,183

)

(97

)%

Escrow deposits of borrowers

 

29,405

 

 

20,155

 

 

24,947

 

 

 

9,250

 

46

%

 

 

4,458

 

18

%

Interest rate swap collateral funds

 

24,070

 

 

11,370

 

 

16,900

 

 

 

12,700

 

112

%

 

 

7,170

 

42

%

Total borrowed funds

 

70,817

 

 

48,940

 

 

715,372

 

 

 

21,877

 

45

%

 

 

(644,555

)

(90

)%

Other liabilities

 

548,378

 

 

489,947

 

 

525,378

 

 

 

58,431

 

12

%

 

 

23,000

 

4

%

Liabilities of discontinued operations

 

—

 

 

—

 

 

34,820

 

 

 

—

 

—

%

 

 

(34,820

)

(100

)%

Total liabilities

 

21,836,049

 

 

18,076,696

 

 

18,699,739

 

 

 

3,759,353

 

21

%

 

 

3,136,310

 

17

%

Shareholders' equity:

 

 

 

 

 

 

 

 

 

Common shares

 

2,150

 

 

1,770

 

 

1,766

 

 

 

380

 

21

%

 

 

384

 

22

%

Additional paid-in capital

 

2,246,134

 

 

1,673,722

 

 

1,661,136

 

 

 

572,412

 

34

%

 

 

584,998

 

35

%

Unallocated common shares held by the employee stock ownership plan ("ESOP")

 

(129,077

)

 

(130,295

)

 

(133,992

)

 

 

1,218

 

(1

)%

 

 

4,915

 

(4

)%

Retained earnings

 

2,048,042

 

 

2,076,566

 

 

1,747,225

 

 

 

(28,524

)

(1

)%

 

 

300,817

 

17

%

Accumulated other comprehensive income ("AOCI"), net of tax

 

(496,111

)

 

(654,290

)

 

(829,582

)

 

 

158,179

 

(24

)%

 

 

333,471

 

(40

)%

Total shareholders' equity

 

3,671,138

 

 

2,967,473

 

 

2,446,553

 

 

 

703,665

 

24

%

 

 

1,224,585

 

50

%

Total liabilities and shareholders' equity

$

25,507,187

 

$

21,044,169

 

$

21,146,292

 

 

$

4,463,018

 

21

%

 

$

4,360,895

 

21

%

 

EASTERN BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

 

Three months ended

 

Three months ended Sep 30, 2024 change from three months ended

(Unaudited, dollars in thousands, except per-share data)

Sep 30, 2024

Jun 30, 2024

Sep 30, 2023

 

Jun 30, 2024

 

Sep 30, 2023

 

 

 

 

 

 

 

 

 

 

Interest and dividend income:

 

 

 

 

△ $

△ %

 

△ $

△ %

Interest and fees on loans

$

230,824

 

$

172,514

 

$

169,274

 

 

$

58,310

 

34

%

 

$

61,550

 

36

%

Taxable interest and dividends on securities

 

22,421

 

 

22,724

 

 

24,191

 

 

 

(303

)

(1

)%

 

 

(1,770

)

(7

)%

Non-taxable interest and dividends on securities

 

1,444

 

 

1,439

 

 

1,434

 

 

 

5

 

—

%

 

 

10

 

1

%

Interest on federal funds sold and other short-term investments

 

11,329

 

 

10,699

 

 

7,269

 

 

 

630

 

6

%

 

 

4,060

 

56

%

Total interest and dividend income

 

266,018

 

 

207,376

 

 

202,168

 

 

 

58,642

 

28

%

 

 

63,850

 

32

%

Interest expense:

 

 

 

 

 

 

 

 

 

Interest on deposits

 

95,334

 

 

78,473

 

 

59,607

 

 

 

16,861

 

21

%

 

 

35,727

 

60

%

Interest on borrowings

 

829

 

 

254

 

 

5,356

 

 

 

575

 

226

%

 

 

(4,527

)

(85

)%

Total interest expense

 

96,163

 

 

78,727

 

 

64,963

 

 

 

17,436

 

22

%

 

 

31,200

 

48

%

Net interest income

 

169,855

 

 

128,649

 

 

137,205

 

 

 

41,206

 

32

%

 

 

32,650

 

24

%

Provision for allowance for loan losses

 

46,983

 

 

6,126

 

 

7,328

 

 

 

40,857

 

667

%

 

 

39,655

 

541

%

Net interest income after provision for allowance for loan losses

 

122,872

 

 

122,523

 

 

129,877

 

 

 

349

 

—

%

 

 

(7,005

)

(5

)%

Noninterest income:

 

 

 

 

 

 

 

 

 

Trust and investment advisory fees

 

14,909

 

 

6,711

 

 

6,235

 

 

 

8,198

 

122

%

 

 

8,674

 

139

%

Service charges on deposit accounts

 

8,140

 

 

7,930

 

 

7,403

 

 

 

210

 

3

%

 

 

737

 

10

%

Debit card processing fees

 

3,806

 

 

3,522

 

 

3,388

 

 

 

284

 

8

%

 

 

418

 

12

%

Interest rate swap income

 

565

 

 

418

 

 

1,695

 

 

 

147

 

35

%

 

 

(1,130

)

(67

)%

Income (losses) from investments held in rabbi trusts

 

3,591

 

 

1,761

 

 

(1,523

)

 

 

1,830

 

104

%

 

 

5,114

 

(336

)%

Losses on sales of commercial and industrial loans

 

—

 

 

—

 

 

(2,651

)

 

 

—

 

—

%

 

 

2,651

 

(100

)%

Losses on sales of mortgage loans held for sale, net

 

(385

)

 

(152

)

 

(164

)

 

 

(233

)

153

%

 

 

(221

)

135

%

Losses on sales of securities available for sale, net

 

—

 

 

(7,557

)

 

—

 

 

 

7,557

 

(100

)%

 

 

—

 

—

%

Other

 

2,902

 

 

12,715

 

 

4,774

 

 

 

(9,813

)

(77

)%

 

 

(1,872

)

(39

)%

Total noninterest income

 

33,528

 

 

25,348

 

 

19,157

 

 

 

8,180

 

32

%

 

 

14,371

 

75

%

Noninterest expense:

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

93,759

 

 

65,218

 

 

60,898

 

 

 

28,541

 

44

%

 

 

32,861

 

54

%

Office occupancy and equipment

 

14,470

 

 

10,109

 

 

8,641

 

 

 

4,361

 

43

%

 

 

5,829

 

67

%

Data processing

 

19,504

 

 

17,990

 

 

13,443

 

 

 

1,514

 

8

%

 

 

6,061

 

45

%

Professional services

 

8,982

 

 

4,250

 

 

7,125

 

 

 

4,732

 

111

%

 

 

1,857

 

26

%

Marketing expenses

 

1,576

 

 

1,910

 

 

1,765

 

 

 

(334

)

(17

)%

 

 

(189

)

(11

)%

Federal Deposit Insurance Corporation ("FDIC") insurance

 

3,200

 

 

4,508

 

 

2,808

 

 

 

(1,308

)

(29

)%

 

 

392

 

14

%

Amortization of intangible assets

 

6,210

 

 

504

 

 

504

 

 

 

5,706

 

1132

%

 

 

5,706

 

1132

%

Other

 

12,052

 

 

5,380

 

 

6,564

 

 

 

6,672

 

124

%

 

 

5,488

 

84

%

Total noninterest expense

 

159,753

 

 

109,869

 

 

101,748

 

 

 

49,884

 

45

%

 

 

58,005

 

57

%

(Loss) income before income tax expense (benefit)

 

(3,353

)

 

38,002

 

 

47,286

 

 

 

(41,355

)

(109

)%

 

 

(50,639

)

(107

)%

Income tax expense (benefit)

 

2,835

 

 

11,671

 

 

(16,178

)

 

 

(8,836

)

(76

)%

 

 

19,013

 

(118

)%

Net (loss) income from continuing operations

$

(6,188

)

$

26,331

 

$

63,464

 

 

$

(32,519

)

(124

)%

 

$

(69,652

)

(110

)%

Net loss from discontinued operations

$

—

 

$

—

 

$

(4,351

)

 

$

—

 

—

%

 

$

4,351

 

(100

)%

Net (loss) income

$

(6,188

)

$

26,331

 

$

59,113

 

 

$

(32,519

)

(124

)%

 

$

(65,301

)

(110

)%

 

 

 

 

 

 

 

 

 

 

Share data:

 

 

 

 

 

 

 

 

 

Weighted average common shares outstanding, basic

 

196,700,222

 

 

163,145,255

 

 

162,370,469

 

 

 

33,554,967

 

21

%

 

 

34,329,753

 

21

%

Weighted average common shares outstanding, diluted

 

197,706,644

 

 

163,499,296

 

 

162,469,887

 

 

 

34,207,348

 

21

%

 

 

35,236,757

 

22

%

(Loss) earnings per share, basic:

 

 

 

 

 

 

 

 

 

Continuing operations

$

(0.03

)

$

0.16

 

$

0.39

 

 

$

(0.19

)

(119

)%

 

$

(0.42

)

(108

)%

Discontinued operations

$

—

 

$

—

 

$

(0.03

)

 

$

—

 

0

%

 

$

0.03

 

(100

)%

(Loss) earnings per share, basic

$

(0.03

)

$

0.16

 

$

0.36

 

 

$

(0.19

)

(119

)%

 

$

(0.39

)

(108

)%

(Loss) earnings per share, diluted:

 

 

 

 

 

 

 

 

 

Continuing operations

$

(0.03

)

$

0.16

 

$

0.39

 

 

$

(0.19

)

(119

)%

 

$

(0.42

)

(108

)%

Discontinued operations

$

—

 

$

—

 

$

(0.03

)

 

$

—

 

0

%

 

$

0.03

 

(100

)%

(Loss) earnings per share, diluted

$

(0.03

)

$

0.16

 

$

0.36

 

 

$

(0.19

)

(119

)%

 

$

(0.39

)

(108

)%

 

EASTERN BANKSHARES, INC.

CONSOLIDATED STATEMENTS OF INCOME

 

 

Nine months ended

 

 

 

(Unaudited, dollars in thousands, except per-share data)

Sep 30, 2024

Sep 30, 2023

 

Change

 

 

 

 

 

 

Interest and dividend income:

 

 

 

△ $

△ %

Interest and fees on loans

$

573,319

 

$

483,676

 

 

$

89,643

 

19

%

Taxable interest and dividends on securities

 

68,518

 

 

77,451

 

 

 

(8,933

)

(12

)%

Non-taxable interest and dividends on securities

 

4,320

 

 

4,302

 

 

 

18

 

—

%

Interest on federal funds sold and other short-term investments

 

29,848

 

 

27,384

 

 

 

2,464

 

9

%

Total interest and dividend income

 

676,005

 

 

592,813

 

 

 

83,192

 

14

%

Interest expense:

 

 

 

 

 

Interest on deposits

 

246,265

 

 

158,686

 

 

 

87,579

 

55

%

Interest on borrowings

 

1,336

 

 

17,025

 

 

 

(15,689

)

(92

)%

Total interest expense

 

247,601

 

 

175,711

 

 

 

71,890

 

41

%

Net interest income

 

428,404

 

 

417,102

 

 

 

11,302

 

3

%

Provision for allowance for loan losses

 

60,560

 

 

14,854

 

 

 

45,706

 

308

%

Net interest income after provision for allowance for loan losses

 

367,844

 

 

402,248

 

 

 

(34,404

)

(9

)%

Noninterest income:

 

 

 

 

 

Trust and investment advisory fees

 

28,164

 

 

18,136

 

 

 

10,028

 

55

%

Service charges on deposit accounts

 

23,578

 

 

21,117

 

 

 

2,461

 

12

%

Debit card processing fees

 

10,575

 

 

10,071

 

 

 

504

 

5

%

Interest rate swap income

 

1,650

 

 

2,112

 

 

 

(462

)

(22

)%

Income from investments held in rabbi trusts

 

9,670

 

 

4,336

 

 

 

5,334

 

123

%

Losses on sales of commercial and industrial loans

 

—

 

 

(2,651

)

 

 

2,651

 

(100

)%

Losses on sales of mortgage loans held for sale, net

 

(595

)

 

(288

)

 

 

(307

)

107

%

Losses on sales of securities available for sale, net

 

(7,557

)

 

(333,170

)

 

 

325,613

 

(98

)%

Other

 

21,083

 

 

15,845

 

 

 

5,238

 

33

%

Total noninterest income (loss)

 

86,568

 

 

(264,492

)

 

 

351,060

 

(133

)%

Noninterest expense:

 

 

 

 

 

Salaries and employee benefits

 

223,448

 

 

185,264

 

 

 

38,184

 

21

%

Office occupancy and equipment

 

33,763

 

 

26,797

 

 

 

6,966

 

26

%

Data processing

 

54,003

 

 

38,555

 

 

 

15,448

 

40

%

Professional services

 

16,744

 

 

13,277

 

 

 

3,467

 

26

%

Marketing expenses

 

5,001

 

 

4,899

 

 

 

102

 

2

%

Federal Deposit Insurance Corporation ("FDIC") insurance

 

9,993

 

 

8,388

 

 

 

1,605

 

19

%

Amortization of intangible assets

 

7,218

 

 

1,299

 

 

 

5,919

 

456

%

Other

 

20,654

 

 

19,094

 

 

 

1,560

 

8

%

Total noninterest expense

 

370,824

 

 

297,573

 

 

 

73,251

 

25

%

Income (loss) before income tax expense

 

83,588

 

 

(159,817

)

 

 

243,405

 

(152

)%

Income tax expense (benefit)

 

24,798

 

 

(65,619

)

 

 

90,417

 

(138

)%

Net income (loss) from continuing operations

 

58,790

 

 

(94,198

)

 

 

152,988

 

(162

)%

Net income from discontinued operations

 

—

 

 

7,872

 

 

 

(7,872

)

(100

)%

Net income (loss)

$

58,790

 

$

(86,326

)

 

$

145,116

 

(168

)%

 

 

 

 

 

 

Share data:

 

 

 

 

 

Weighted average common shares outstanding, basic

 

174,398,692

 

 

162,199,158

 

 

 

12,199,534

 

8

%

Weighted average common shares outstanding, diluted

 

175,270,559

 

 

162,260,503

 

 

 

13,010,056

 

8

%

 

 

 

 

 

 

Earnings (loss) per share, basic:

 

 

 

 

 

Continuing operations

$

0.34

 

$

(0.58

)

 

$

0.92

 

(159

)%

Discontinued operations

$

—

 

$

0.05

 

 

$

(0.05

)

(100

)%

Earnings (loss) per share, basic

$

0.34

 

$

(0.53

)

 

$

0.87

 

(164

)%

Earnings (loss) per share, diluted:

 

 

 

 

 

Continuing operations

$

0.34

 

$

(0.58

)

 

$

0.92

 

(159

)%

Discontinued operations

$

—

 

$

0.05

 

 

$

(0.05

)

(100

)%

Earnings (loss) per share, diluted

$

0.34

 

$

(0.53

)

 

$

0.87

 

(164

)%

 

EASTERN BANKSHARES, INC.

AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS

 

 

As of and for the three months ended

 

Sep 30, 2024

 

Jun 30, 2024

 

Sep 30, 2023

(Unaudited, dollars in thousands)

Avg. Balance

 

Interest

 

Yield / Cost (5)

 

Avg. Balance

 

Interest

 

Yield / Cost (5)

 

Avg. Balance

 

Interest

 

Yield / Cost (5)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans (1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

11,935,922

 

$

167,712

 

5.59

%

 

$

10,103,674

 

$

128,402

 

5.11

%

 

$

9,988,712

 

$

128,051

 

5.09

%

Residential

 

3,772,420

 

 

40,484

 

4.27

%

 

 

2,563,646

 

 

24,313

 

3.81

%

 

 

2,553,150

 

 

22,988

 

3.57

%

Consumer

 

1,568,372

 

 

27,026

 

6.86

%

 

 

1,446,543

 

 

23,960

 

6.66

%

 

 

1,386,350

 

 

22,227

 

6.36

%

Total loans

 

17,276,714

 

 

235,222

 

5.42

%

 

 

14,113,863

 

 

176,675

 

5.03

%

 

 

13,928,212

 

 

173,266

 

4.94

%

Total investment securities

 

5,322,650

 

 

24,259

 

1.81

%

 

 

5,428,583

 

 

24,555

 

1.82

%

 

 

5,777,173

 

 

26,009

 

1.79

%

Federal funds sold and other short-term investments

 

833,184

 

 

11,329

 

5.41

%

 

 

787,387

 

 

10,699

 

5.47

%

 

 

537,602

 

 

7,269

 

5.36

%

Total interest-earning assets

 

23,432,548

 

 

270,810

 

4.60

%

 

 

20,329,833

 

 

211,929

 

4.19

%

 

 

20,242,987

 

 

206,544

 

4.05

%

Non-interest-earning assets

 

1,606,357

 

 

 

 

 

 

912,302

 

 

 

 

 

 

1,033,879

 

 

 

 

Total assets

$

25,038,905

 

 

 

 

 

$

21,242,135

 

 

 

 

 

$

21,276,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Savings

$

1,646,532

 

$

1,526

 

0.37

%

 

$

1,259,573

 

$

42

 

0.01

%

 

$

1,441,636

 

$

43

 

0.01

%

Interest checking

 

4,548,231

 

 

13,428

 

1.17

%

 

 

3,739,590

 

 

8,827

 

0.95

%

 

 

3,903,062

 

 

6,302

 

0.64

%

Money market

 

5,631,626

 

 

39,994

 

2.83

%

 

 

4,975,843

 

 

34,022

 

2.75

%

 

 

4,836,895

 

 

27,695

 

2.27

%

Time deposits

 

3,365,392

 

 

40,386

 

4.77

%

 

 

2,933,160

 

 

35,582

 

4.88

%

 

 

2,341,684

 

 

25,567

 

4.33

%

Total interest-bearing deposits

 

15,191,781

 

 

95,334

 

2.50

%

 

 

12,908,166

 

 

78,473

 

2.45

%

 

 

12,523,277

 

 

59,607

 

1.89

%

Borrowings

 

89,398

 

 

829

 

3.69

%

 

 

49,536

 

 

254

 

2.06

%

 

 

414,252

 

 

5,356

 

5.13

%

Total interest-bearing liabilities

 

15,281,179

 

 

96,163

 

2.50

%

 

 

12,957,702

 

 

78,727

 

2.44

%

 

 

12,937,529

 

 

64,963

 

1.99

%

Demand deposit accounts

 

5,666,471

 

 

 

 

 

 

4,843,336

 

 

 

 

 

 

5,257,704

 

 

 

 

Other noninterest-bearing liabilities

 

564,961

 

 

 

 

 

 

512,996

 

 

 

 

 

 

541,827

 

 

 

 

Total liabilities

 

21,512,611

 

 

 

 

 

 

18,314,034

 

 

 

 

 

 

18,737,060

 

 

 

 

Shareholders' equity

 

3,526,294

 

 

 

 

 

 

2,928,101

 

 

 

 

 

 

2,539,806

 

 

 

 

Total liabilities and shareholders' equity

$

25,038,905

 

 

 

 

 

$

21,242,135

 

 

 

 

 

$

21,276,866

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income - FTE

 

 

$

174,647

 

 

 

 

 

$

133,202

 

 

 

 

 

$

141,581

 

 

Net interest rate spread (2)

 

 

 

 

2.10

%

 

 

 

 

 

1.75

%

 

 

 

 

 

2.06

%

Net interest-earning assets (3)

$

8,151,369

 

 

 

 

 

$

7,372,131

 

 

 

 

 

$

7,305,458

 

 

 

 

Net interest margin - FTE (4)

 

 

 

 

2.97

%

 

 

 

 

 

2.64

%

 

 

 

 

 

2.77

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes non-accrual loans.

(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4) Net interest margin - FTE represents fully-taxable equivalent net interest income divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income.

(5) Presented on an annualized basis.

 

EASTERN BANKSHARES, INC.

AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS

 

 

As of and for the nine months ended

 

Sep 30, 2024

 

Sep 30, 2023

(Unaudited, dollars in thousands)

Avg. Balance

 

Interest

 

Yield / Cost (5)

 

Avg. Balance

 

Interest

 

Yield / Cost (5)

Interest-earning assets:

 

 

 

 

 

 

 

 

 

 

 

Loans (1):

 

 

 

 

 

 

 

 

 

 

 

Commercial

$

10,692,519

 

$

422,955

 

5.28

%

 

$

9,892,337

 

$

365,298

 

4.94

%

Residential

 

2,971,889

 

 

88,791

 

3.99

%

 

 

2,526,980

 

 

66,593

 

3.52

%

Consumer

 

1,478,664

 

 

74,224

 

6.71

%

 

 

1,371,761

 

 

63,333

 

6.17

%

Total loans

 

15,143,072

 

 

585,970

 

5.17

%

 

 

13,791,078

 

 

495,224

 

4.80

%

Total investment securities

 

5,441,498

 

 

74,015

 

1.82

%

 

 

6,442,141

 

 

82,903

 

1.72

%

Federal funds sold and other short-term investments

 

732,738

 

 

29,848

 

5.44

%

 

 

721,025

 

 

27,384

 

5.08

%

Total interest-earning assets

 

21,317,308

 

 

689,833

 

4.32

%

 

 

20,954,244

 

 

605,511

 

3.86

%

Non-interest-earning assets

 

1,157,155

 

 

 

 

 

 

952,378

 

 

 

 

Total assets

$

22,474,463

 

 

 

 

 

$

21,906,622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

Savings

$

1,402,050

 

$

1,609

 

0.15

%

 

$

1,570,803

 

$

172

 

0.01

%

Interest checking

 

4,012,872

 

 

30,442

 

1.01

%

 

 

4,177,492

 

 

17,155

 

0.55

%

Money market

 

5,118,366

 

 

104,512

 

2.73

%

 

 

4,979,820

 

 

74,612

 

2.00

%

Time deposits

 

3,029,125

 

 

109,702

 

4.84

%

 

 

2,184,631

 

 

66,747

 

4.08

%

Total interest-bearing deposits

 

13,562,413

 

 

246,265

 

2.43

%

 

 

12,912,746

 

 

158,686

 

1.64

%

Borrowings

 

63,334

 

 

1,336

 

2.82

%

 

 

478,347

 

 

17,025

 

4.76

%

Total interest-bearing liabilities

 

13,625,747

 

 

247,601

 

2.43

%

 

 

13,391,093

 

 

175,711

 

1.75

%

Demand deposit accounts

 

5,168,176

 

 

 

 

 

 

5,469,593

 

 

 

 

Other noninterest-bearing liabilities

 

537,418

 

 

 

 

 

 

512,546

 

 

 

 

Total liabilities

 

19,331,341

 

 

 

 

 

 

19,373,232

 

 

 

 

Shareholders' equity

 

3,143,122

 

 

 

 

 

 

2,533,390

 

 

 

 

Total liabilities and shareholders' equity

$

22,474,463

 

 

 

 

 

$

21,906,622

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net interest income - FTE

 

 

$

442,232

 

 

 

 

 

$

429,800

 

 

Net interest rate spread (2)

 

 

 

 

1.89

%

 

 

 

 

 

2.11

%

Net interest-earning assets (3)

$

7,691,561

 

 

 

 

 

$

7,563,151

 

 

 

 

Net interest margin - FTE (4)

 

 

 

 

2.77

%

 

 

 

 

 

2.74

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes non-accrual loans.

(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(4) Net interest margin - FTE represents fully-taxable equivalent net interest income divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income.

(5) Presented on an annualized basis.

 

EASTERN BANKSHARES, INC.

ASSET QUALITY - NON-PERFORMING ASSETS (1)

 

As of

 

Sep 30, 2024

Jun 30, 2024

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

(Unaudited, dollars in thousands)

 

 

 

 

 

Non-accrual loans:

 

 

 

 

 

Commercial

$

105,099

 

$

26,139

 

$

40,986

 

$

35,107

 

$

31,703

 

Residential

 

10,450

 

 

6,789

 

 

6,697

 

 

8,725

 

 

8,075

 

Consumer

 

8,954

 

 

6,843

 

 

9,490

 

 

8,725

 

 

7,687

 

Total non-accrual loans

 

124,503

 

 

39,771

 

 

57,173

 

 

52,557

 

 

47,465

 

Total accruing loans past due 90 days or more:

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total non-performing loans

 

124,503

 

 

39,771

 

 

57,173

 

 

52,557

 

 

47,465

 

Other real estate owned

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Other non-performing assets:

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Total non-performing assets (1)

$

124,503

 

$

39,771

 

$

57,173

 

$

52,557

 

$

47,465

 

Total non-performing loans to total loans

 

0.70

%

 

0.28

%

 

0.41

%

 

0.38

%

 

0.34

%

Total non-performing assets to total assets

 

0.49

%

 

0.19

%

 

0.27

%

 

0.25

%

 

0.22

%

 

 

 

 

 

 

(1) Non-performing assets are comprised of NPLs, other real estate owned ("OREO"), and non-performing securities. NPLs consist of non-accrual loans and loans that are more than 90 days past due but still accruing interest. OREO consists of real estate properties, which primarily serve as collateral to secure the Company’s loans, that it controls due to foreclosure or acceptance of a deed in lieu of foreclosure.

 

EASTERN BANKSHARES, INC.

ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE-OFFS (RECOVERIES)

 

 

Three months ended

 

Sep 30, 2024

Jun 30, 2024

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

(Unaudited, dollars in thousands)

 

 

 

 

 

Average total loans

$

17,274,903

 

$

14,113,343

 

$

14,013,714

 

$

13,961,061

 

$

13,926,194

 

Allowance for loan losses, beginning of the period

 

156,146

 

 

149,190

 

 

148,993

 

 

155,146

 

 

147,955

 

Charged-off loans:

 

 

 

 

 

Commercial and industrial

 

—

 

 

—

 

 

—

 

 

2

 

 

11

 

Commercial real estate

 

4,520

 

 

—

 

 

7,250

 

 

8,008

 

 

—

 

Commercial construction

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Business banking

 

675

 

 

1,002

 

 

102

 

 

3,745

 

 

303

 

Residential real estate

 

18

 

 

—

 

 

10

 

 

—

 

 

—

 

Consumer home equity

 

—

 

 

32

 

 

2

 

 

—

 

 

—

 

Other consumer

 

561

 

 

658

 

 

651

 

 

536

 

 

731

 

Total charged-off loans

 

5,774

 

 

1,692

 

 

8,015

 

 

12,291

 

 

1,045

 

Recoveries on loans previously charged-off:

 

 

 

 

 

Commercial and industrial

 

7

 

 

56

 

 

25

 

 

11

 

 

120

 

Commercial real estate

 

64

 

 

2,011

 

 

132

 

 

190

 

 

2

 

Commercial construction

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Business banking

 

319

 

 

199

 

 

410

 

 

573

 

 

609

 

Residential real estate

 

61

 

 

27

 

 

31

 

 

34

 

 

30

 

Consumer home equity

 

19

 

 

91

 

 

—

 

 

1

 

 

39

 

Other consumer

 

166

 

 

138

 

 

163

 

 

131

 

 

108

 

Total recoveries

 

636

 

 

2,522

 

 

761

 

 

940

 

 

908

 

Net loans charged-off (recovered):

 

 

 

 

 

Commercial and industrial

 

(7

)

 

(56

)

 

(25

)

 

(9

)

 

(109

)

Commercial real estate

 

4,456

 

 

(2,011

)

 

7,118

 

 

7,818

 

 

(2

)

Commercial construction

 

—

 

 

—

 

 

—

 

 

—

 

 

—

 

Business banking

 

356

 

 

803

 

 

(308

)

 

3,172

 

 

(306

)

Residential real estate

 

(43

)

 

(27

)

 

(21

)

 

(34

)

 

(30

)

Consumer home equity

 

(19

)

 

(59

)

 

2

 

 

(1

)

 

(39

)

Other consumer

 

395

 

 

520

 

 

488

 

 

405

 

 

623

 

Total net loans charged-off (recovered)

 

5,138

 

 

(830

)

 

7,254

 

 

11,351

 

 

137

 

Initial allowance established for Cambridge's PCD loans

 

55,830

 

 

—

 

 

—

 

 

—

 

 

—

 

Provision for allowance for loan losses (2)

 

46,983

 

 

6,126

 

 

7,451

 

 

5,198

 

 

7,328

 

Total allowance for loan losses, end of period

$

253,821

 

$

156,146

 

$

149,190

 

$

148,993

 

$

155,146

 

Net charge-offs (recoveries) to average total loans outstanding during this period (1)

 

0.12

%

 

(0.02

)%

 

0.21

%

 

0.32

%

 

0.00

%

Allowance for loan losses as a percent of total loans

 

1.43

%

 

1.11

%

 

1.06

%

 

1.07

%

 

1.12

%

Allowance for loan losses as a percent of nonperforming loans

 

203.87

%

 

392.61

%

 

260.94

%

 

283.49

%

 

326.86

%

 

 

 

 

 

 

(1) Presented on an annualized basis.

(2) Includes the initial provision on non-PCD loans acquired from Cambridge.

 

APPENDIX A: Reconciliation of Non-GAAP Earnings Metrics (1)

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."

 

 

As of and for the Three Months Ended

(Unaudited, dollars in thousands, except per-share data)

Sep 30, 2024

Jun 30, 2024

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

 

 

 

 

 

 

Net (loss) income from continuing operations (GAAP)

$

(6,188

)

$

26,331

 

$

38,647

 

$

31,509

 

$

63,464

 

Add:

 

 

 

 

 

Provision for non-PCD acquired loans

 

40,899

 

 

—

 

 

—

 

 

—

 

 

—

 

Noninterest income components:

 

 

 

 

 

(Income) losses from investments held in rabbi trusts

 

(3,591

)

 

(1,761

)

 

(4,318

)

 

(4,969

)

 

1,523

 

Losses on sales of securities available for sale, net

 

—

 

 

7,557

 

 

—

 

 

—

 

 

—

 

Losses (gains) on sales of other assets

 

2,970

 

 

2

 

 

—

 

 

—

 

 

(2

)

Noninterest expense components:

 

 

 

 

 

Rabbi trust employee benefit expense (income)

 

1,326

 

 

930

 

 

1,746

 

 

1,740

 

 

(586

)

Merger and acquisition expenses

 

27,577

 

 

3,684

 

 

1,816

 

 

1,865

 

 

3,630

 

Total impact of non-GAAP adjustments

 

69,181

 

 

10,412

 

 

(756

)

 

(1,364

)

 

4,565

 

Less: net tax benefit (expense) associated with non-GAAP adjustments (2)

 

13,328

 

 

224

 

 

(190

)

 

13,270

 

 

15,944

 

Non-GAAP adjustments, net of tax

$

55,853

 

$

10,188

 

$

(566

)

$

(14,634

)

$

(11,379

)

Operating net income (non-GAAP)

$

49,665

 

$

36,519

 

$

38,081

 

$

16,875

 

$

52,085

 

 

 

 

 

 

 

Weighted average common shares outstanding during the period:

 

 

 

 

 

Basic

 

196,700,222

 

 

163,145,255

 

 

162,863,540

 

 

162,571,066

 

 

162,370,469

 

Diluted

 

197,706,644

 

 

163,499,296

 

 

163,188,410

 

 

162,724,398

 

 

162,469,887

 

 

 

 

 

 

 

(Loss) earnings per share from continuing operations, basic:

$

(0.03

)

$

0.16

 

$

0.24

 

$

0.19

 

$

0.39

 

(Loss) earnings per share from continuing operations, diluted:

$

(0.03

)

$

0.16

 

$

0.24

 

$

0.19

 

$

0.39

 

 

 

 

 

 

 

Operating earnings per share, basic (non-GAAP)

$

0.25

 

$

0.22

 

$

0.23

 

$

0.10

 

$

0.32

 

Operating earnings per share, diluted (non-GAAP)

$

0.25

 

$

0.22

 

$

0.23

 

$

0.10

 

$

0.32

 

 

 

 

 

 

 

Return on average assets (3)

 

(0.10

)%

 

0.50

%

 

0.74

%

 

0.59

%

 

1.18

%

Add:

 

 

 

 

 

Provision for non-PCD acquired loans (3)

 

0.65

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

(Income) losses from investments held in rabbi trusts (3)

 

(0.06

)%

 

(0.03

)%

 

(0.08

)%

 

(0.09

)%

 

0.03

%

Losses on sales of securities available for sale, net (3)

 

0.00

%

 

0.14

%

 

0.00

%

 

0.00

%

 

0.00

%

Losses (gains) on sales of other assets (3)

 

0.05

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

Rabbi trust employee benefit expense (income) (3)

 

0.02

%

 

0.02

%

 

0.03

%

 

0.03

%

 

(0.01

)%

Merger and acquisition expenses (3)

 

0.44

%

 

0.07

%

 

0.03

%

 

0.03

%

 

0.07

%

Less: net tax benefit (expense) associated with non-GAAP adjustments (2) (3)

 

0.21

%

 

0.00

%

 

0.00

%

 

0.25

%

 

0.30

%

Operating return on average assets (non-GAAP) (3)

 

0.79

%

 

0.70

%

 

0.72

%

 

0.31

%

 

0.97

%

 

 

 

 

 

 

Return on average shareholders' equity (3)

 

(0.70

)%

 

3.62

%

 

5.23

%

 

4.66

%

 

9.91

%

Add:

 

 

 

 

 

Provision for non-PCD acquired loans (3)

 

4.61

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

(Income) losses from investments held in rabbi trusts (3)

 

(0.41

)%

 

(0.24

)%

 

(0.58

)%

 

(0.73

)%

 

0.24

%

Losses on sales of securities available for sale, net (3)

 

0.00

%

 

1.04

%

 

0.00

%

 

0.00

%

 

0.00

%

Losses (gains) on sales of other assets (3)

 

0.34

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

Rabbi trust employee benefit expense (income) (3)

 

0.15

%

 

0.13

%

 

0.24

%

 

0.26

%

 

(0.09

)%

Merger and acquisition expenses (3)

 

3.11

%

 

0.51

%

 

0.25

%

 

0.28

%

 

0.57

%

Less: net tax benefit (expense) associated with non-GAAP adjustments (2) (3)

 

1.50

%

 

0.03

%

 

(0.03

)%

 

1.96

%

 

2.49

%

Operating return on average shareholders' equity (non-GAAP) (3)

 

5.60

%

 

5.03

%

 

5.17

%

 

2.51

%

 

8.14

%

 

 

 

 

 

 

Tangible net income

 

 

 

 

 

Net (loss) income (GAAP)

 

(6,188

)

 

26,331

 

 

38,647

 

 

31,509

 

 

63,464

 

Add: Amortization of intangible assets

 

6,210

 

 

504

 

 

504

 

 

505

 

 

504

 

Less: Tax effect of amortization of intangible assets (4)

 

1,720

 

 

140

 

 

140

 

 

140

 

 

142

 

Tangible net (loss) income (non-GAAP) (5)

 

(1,698

)

 

26,695

 

 

39,011

 

 

31,874

 

 

63,826

 

 

 

 

 

 

 

Average tangible shareholders' equity:

 

 

 

 

 

Average total shareholders' equity (GAAP)

$

3,526,294

 

$

2,928,101

 

$

2,970,759

 

$

2,682,600

 

$

2,539,806

 

Less: Average goodwill and other intangibles

 

974,546

 

 

565,523

 

 

566,027

 

 

597,234

 

 

658,591

 

Average tangible shareholders' equity (non-GAAP)

$

2,551,748

 

$

2,362,578

 

$

2,404,732

 

$

2,085,366

 

$

1,881,215

 

 

 

 

 

 

 

Return on average tangible shareholders' equity (non-GAAP) (3) (5)

 

(0.26

)%

 

4.54

%

 

6.52

%

 

6.06

%

 

13.46

%

Add:

 

 

 

 

 

Provision for non-PCD acquired loans (3)

 

6.38

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

(Income) losses from investments held in rabbi trusts (3)

 

(0.56

)%

 

(0.30

)%

 

(0.72

)%

 

(0.95

)%

 

0.32

%

Losses on sales of securities available for sale, net (3)

 

0.00

%

 

1.29

%

 

0.00

%

 

0.00

%

 

0.00

%

Losses (gains) on sales of other assets (3)

 

0.46

%

 

0.00

%

 

0.00

%

 

0.00

%

 

0.00

%

Rabbi trust employee benefit expense (income) (3)

 

0.21

%

 

0.16

%

 

0.29

%

 

0.33

%

 

(0.12

)%

Merger and acquisition expenses (3)

 

4.30

%

 

0.63

%

 

0.30

%

 

0.35

%

 

0.77

%

Less: net tax benefit (expense) associated with non-GAAP adjustments (2) (3)

 

2.08

%

 

0.04

%

 

(0.03

)%

 

2.52

%

 

3.36

%

Operating return on average tangible shareholders' equity (non-GAAP) (3) (5)

 

8.45

%

 

6.28

%

 

6.42

%

 

3.27

%

 

11.07

%

 

 

 

 

 

 

(1) Average assets, average goodwill and other intangibles, and average tangible shareholders' equity components for the three months ended Sep 30, 2023 and Dec 31, 2023 presented in this section include discontinued operations.

(2) The net tax benefit (expense) associated with these items is generally determined by assessing whether each item is included or excluded from net taxable income and applying our combined statutory tax rate only to those items included in net taxable income. The net tax benefit for the three months ended December 31, 2023 was primarily due to the tax benefit from state tax strategies associated with the utilization of capital losses as a result of the sale of securities in the first quarter of 2023. Upon the sale of securities in the first quarter of 2023, we established a valuation allowance of $17.4 million, as it was determined at that time that it was not more-likely-than-not that the entirety of the deferred tax asset related to the loss on such securities would be realized. Included in that $17.4 million was $2.8 million in expected lost state tax benefits. Following the execution of the sale of our insurance agency business in October 2023 and the resulting capital gain, coupled with tax planning strategies, a state tax benefit of $13.6 million was realized on the security sale losses.

(3) Presented on an annualized basis.

(4) The tax effect of amortization of intangible assets is calculated using the Company's combined statutory tax rate of 27.7% for the three months ended Dec 31, 2023 and the following periods, and 28.23% for the three months ended Sep 30, 2023.

(5) The tangible net income (loss), return on average tangible shareholders' equity ratio and operating return on average tangible shareholders' equity ratio exclude the amortization of intangible assets, net of tax.

 

APPENDIX B: Reconciliation of Non-GAAP Operating Revenues and Expenses

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."

 

 

Three Months Ended

 

Sep 30, 2024

Jun 30, 2024

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

(Unaudited, dollars in thousands)

 

 

 

 

 

Net interest income (GAAP)

$

169,855

 

$

128,649

 

$

129,900

 

$

133,307

 

$

137,205

 

Add:

 

 

 

 

 

Tax-equivalent adjustment (non-GAAP) (1)

 

4,792

 

 

4,553

 

 

4,483

 

 

4,483

 

 

4,376

 

Fully-taxable equivalent net interest income (non-GAAP)

$

174,647

 

$

133,202

 

$

134,383

 

$

137,790

 

$

141,581

 

 

 

 

 

 

 

Noninterest income (GAAP)

$

33,528

 

$

25,348

 

$

27,692

 

$

26,739

 

$

19,157

 

Less:

 

 

 

 

 

Income (losses) from investments held in rabbi trusts

 

3,591

 

 

1,761

 

 

4,318

 

 

4,969

 

 

(1,523

)

Losses on sales of securities available for sale, net

 

—

 

 

(7,557

)

 

—

 

 

—

 

 

—

 

(Losses) gains on sales of other assets

 

(2,970

)

 

(2

)

 

—

 

 

—

 

 

2

 

Noninterest income on an operating basis (non-GAAP)

$

32,907

 

$

31,146

 

$

23,374

 

$

21,770

 

$

20,678

 

 

 

 

 

 

 

Noninterest expense (GAAP)

$

159,753

 

$

109,869

 

$

101,202

 

$

121,029

 

$

101,748

 

Less:

 

 

 

 

 

Rabbi trust employee benefit expense (income)

 

1,326

 

 

930

 

 

1,746

 

 

1,740

 

 

(586

)

Merger and acquisition expenses

 

27,577

 

 

3,684

 

 

1,816

 

 

1,865

 

 

3,630

 

Noninterest expense on an operating basis (non-GAAP)

$

130,850

 

$

105,255

 

$

97,640

 

$

117,424

 

$

98,704

 

Less: Amortization of intangible assets

$

6,210

 

$

504

 

$

504

 

$

505

 

$

504

 

Noninterest expense for calculating the operating efficiency ratio (non-GAAP) (2)

$

124,640

 

$

104,751

 

$

97,136

 

$

116,919

 

$

98,200

 

 

 

 

 

 

 

Total revenue (GAAP)

$

203,383

 

$

153,997

 

$

157,592

 

$

160,046

 

$

156,362

 

Total operating revenue (non-GAAP)

$

207,554

 

$

164,348

 

$

157,757

 

$

159,560

 

$

162,259

 

 

 

 

 

 

 

Efficiency ratio (GAAP)

 

78.5

%

 

71.3

%

 

64.2

%

 

75.6

%

 

65.1

%

Operating efficiency ratio (non-GAAP) (2)

 

60.1

%

 

63.7

%

 

61.6

%

 

73.3

%

 

60.5

%

 

 

 

 

 

 

(1) Interest income on tax-exempt loans and investment securities has been adjusted to a FTE basis using a marginal tax rate of 21.8%, 21.7%, 21.7%, 21.9%, and 21.7% for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively.

(2) The operating efficiency ratio excludes, in addition to the adjustments made to operating net income, the amortization of intangible assets. This measure is used by the Company when analyzing corporate performance and the Company believes that investors may find it useful.

 

APPENDIX C: Reconciliation of Non-GAAP Capital Metrics

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."

 

 

As of

 

Sep 30, 2024

Jun 30, 2024

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

(Unaudited, dollars in thousands, except per-share data)

 

 

 

 

 

Tangible shareholders' equity:

 

 

 

 

 

Total shareholders' equity (GAAP)

$

3,671,138

 

$

2,967,473

 

$

2,952,831

 

$

2,974,855

 

$

2,446,553

 

Less: Goodwill and other intangibles (1)

 

1,057,509

 

 

565,196

 

 

565,701

 

 

566,205

 

 

657,824

 

Tangible shareholders' equity (non-GAAP)

 

2,613,629

 

 

2,402,277

 

 

2,387,130

 

 

2,408,650

 

 

1,788,729

 

 

 

 

 

 

 

Tangible assets:

 

 

 

 

 

Total assets (GAAP)

 

25,507,187

 

 

21,044,169

 

 

21,174,804

 

 

21,133,278

 

 

21,146,292

 

Less: Goodwill and other intangibles (1)

 

1,057,509

 

 

565,196

 

 

565,701

 

 

566,205

 

 

657,824

 

Tangible assets (non-GAAP)

$

24,449,678

 

$

20,478,973

 

$

20,609,103

 

$

20,567,073

 

$

20,488,468

 

 

 

 

 

 

 

Shareholders' equity to assets ratio (GAAP)

 

14.39

%

 

14.10

%

 

13.95

%

 

14.08

%

 

11.57

%

Tangible shareholders' equity to tangible assets ratio (non-GAAP)

 

10.69

%

 

11.73

%

 

11.58

%

 

11.71

%

 

8.73

%

 

 

 

 

 

 

Common shares outstanding

 

214,802,602

 

 

176,687,829

 

 

176,631,477

 

 

176,426,993

 

 

176,376,675

 

 

 

 

 

 

 

Book value per share (GAAP)

$

17.09

 

$

16.80

 

$

16.72

 

$

16.86

 

$

13.87

 

Tangible book value per share (non-GAAP)

$

12.17

 

$

13.60

 

$

13.51

 

$

13.65

 

$

10.14

 

 

 

 

 

 

 

(1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023.

 

APPENDIX D: Merger-related Charges

 

 

As of and for the Three Months Ended

(Unaudited, dollars in thousands)

Sep 30, 2024

Jun 30, 2024

Mar 31, 2024

Dec 31, 2023

Sep 30, 2023

Noninterest income components:

 

 

 

 

 

Other (1)

$

(2,969

)

$

—

$

—

$

—

$

—

Total noninterest income

$

(2,969

)

$

—

$

—

$

—

$

—

 

 

 

 

 

 

Noninterest expense components:

 

 

 

 

 

Salaries and employee benefits

$

13,147

 

$

383

$

3

$

5

$

—

Office occupancy and equipment

 

2,630

 

 

11

 

6

 

2

 

—

Data processing

 

1,384

 

 

2,249

 

865

 

1,357

 

—

Professional services

 

5,490

 

 

944

 

787

 

450

 

3,630

Other

 

4,926

 

 

97

 

155

 

51

 

—

Total noninterest expense

$

27,577

 

$

3,684

$

1,816

$

1,865

$

3,630

 

 

 

 

 

 

Total merger-related charges

$

30,546

 

$

3,684

$

1,816

$

1,865

$

3,630

 

 

 

 

 

 

(1) Disposal of acquired fixed assets.

 

APPENDIX E: Organic Loan & Deposit Growth

 

 

As of

 

 

 

Organic Growth From:

 

Sep 30, 2024

Jun 30, 2024

 

Cambridge Trust Acquired Balance (1)

 

Jun 30, 2024

(Unaudited, dollars in thousands)

 

 

 

 

 

△ $

△ %

Loans:

 

 

 

 

 

 

 

Commercial and industrial

3,340,029

3,084,186

 

339,581

 

(83,738

)

(2.4

)%

Commercial real estate

7,174,861

5,440,411

 

1,692,705

 

41,745

 

0.6

%

Commercial construction

513,519

447,157

 

141,420

 

(75,058

)

(12.8

)%

Business banking

1,321,179

1,108,163

 

120,454

 

92,562

 

7.5

%

Total commercial loans

12,349,588

10,079,917

 

2,294,160

 

(24,489

)

(0.2

)%

Residential real estate

4,080,736

2,562,808

 

1,528,534

 

(10,606

)

(0.3

)%

Consumer home equity

1,361,971

1,254,105

 

87,785

 

20,081

 

1.5

%

Other consumer

271,831

248,690

 

24,196

 

(1,055

)

(0.4

)%

Total loans

18,064,126

14,145,520

 

3,934,675

 

(16,069

)

(0.1

)%

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

Demand

5,856,171

4,808,938

 

979,895

 

67,338

 

1.2

%

Interest checking accounts

4,562,226

3,532,811

 

1,149,097

 

(119,682

)

(2.6

)%

Savings accounts

1,681,093

1,238,009

 

471,340

 

(28,256

)

(1.7

)%

Money market investment

5,572,277

5,014,900

 

854,614

 

(297,237

)

(5.1

)%

Certificates of deposit

3,545,087

2,943,151

 

418,771

 

183,165

 

5.4

%

Total deposits

21,216,854

17,537,809

 

3,873,717

 

(194,672

)

(0.9

)%

 

 

 

 

 

 

 

 

(1) For loans, represents the unpaid principal balance of Cambridge acquired loans at time of merger. For deposits, represents the book value of Cambridge acquired deposits at time of merger, except for time deposits which are shown at fair value.

 

APPENDIX F: Tangible Shareholders’ Equity Roll Forward Analysis

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."

 

 

As of

 

Change from

 

Sep 30, 2024

Jun 30, 2024

 

Jun 30, 2024

(Unaudited, dollars in thousands, except per-share data)

 

 

 

 

Common stock

$

2,150

 

$

1,770

 

 

$

380

 

Additional paid in capital

 

2,246,134

 

 

1,673,722

 

 

 

572,412

 

Unallocated ESOP common stock

 

(129,077

)

 

(130,295

)

 

 

1,218

 

Retained earnings

 

2,048,042

 

 

2,076,566

 

 

 

(28,524

)

AOCI, net of tax - available for sale securities

 

(490,698

)

 

(612,196

)

 

 

121,498

 

AOCI, net of tax - pension

 

5,914

 

 

6,430

 

 

 

(516

)

AOCI, net of tax - cash flow hedge

 

(11,327

)

 

(48,524

)

 

 

37,197

 

Total shareholders' equity:

$

3,671,138

 

$

2,967,473

 

 

$

703,665

 

Less: Goodwill and other intangibles

 

1,057,509

 

 

565,196

 

 

 

492,313

 

Tangible shareholders' equity (non-GAAP)

$

2,613,629

 

$

2,402,277

 

 

$

211,352

 

 

 

 

 

 

Common shares outstanding

 

214,802,602

 

 

176,687,829

 

 

 

38,114,773

 

 

 

 

 

 

Per share:

 

 

 

 

Common stock

$

0.01

 

$

0.01

 

 

$

—

 

Additional paid in capital

 

10.46

 

 

9.47

 

 

 

0.98

 

Unallocated ESOP common stock

 

(0.60

)

 

(0.74

)

 

 

0.14

 

Retained earnings

 

9.53

 

 

11.75

 

 

 

(2.22

)

AOCI, net of tax - available for sale securities

 

(2.28

)

 

(3.46

)

 

 

1.18

 

AOCI, net of tax - pension

 

0.03

 

 

0.04

 

 

 

(0.01

)

AOCI, net of tax - cash flow hedge

 

(0.05

)

 

(0.27

)

 

 

0.22

 

Total shareholders' equity:

$

17.09

 

$

16.80

 

 

$

0.30

 

Less: Goodwill and other intangibles

 

4.92

 

 

3.20

 

 

 

1.72

 

Tangible shareholders' equity (non-GAAP)

$

12.17

 

$

13.60

 

 

$

(1.43

)

 

 

 

 

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241024681054/en/

Investor Contact

Jillian Belliveau Eastern Bankshares, Inc. InvestorRelations@easternbank.com 781-598-7920

Media Contact

Andrea Goodman Eastern Bank a.goodman@easternbank.com 781-598-7847