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| Share Name | Share Symbol | Market | Type |
|---|---|---|---|
| Eastern Bankshares Inc | NASDAQ:EBC | NASDAQ | Common Stock |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.12 | 0.71% | 17.07 | 12.77 | 19.00 | 17.235 | 16.76 | 17.05 | 686,947 | 01:00:00 |
From Oct 2024 to Jan 2025
~ 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
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.
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.
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.
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.
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
1 Year Eastern Bankshares Chart |
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