Eastern Bankshares, Inc. Reports Fourth Quarter 2021 Financial Results

Rhea-AI Summary

Eastern Bankshares, Inc. (EBC) reported a quarterly net income of $35.1 million for Q4 2021, down from $37.1 million in Q3. However, operating net income rose to $44.9 million, or $0.26 per diluted share. The company declared a 25% increase in its quarterly cash dividend to $0.10 per share. Key highlights include the successful merger with Century Bancorp, adding approximately $7 billion in assets. Total loans and deposits surged, with organic loan growth of 6%. However, noninterest expenses rose significantly, primarily due to merger costs.

Positive

• 25% increase in quarterly dividend to $0.10 per share.
• Operating net income rose to $44.9 million, up from $37.4 million.
• Merger with Century Bancorp added approximately $7 billion in assets and 12 new branch locations.

Negative

• Net income declined to $35.1 million from $37.1 million in Q3.
• Noninterest expenses increased by $44.6 million, largely due to merger-related costs.

Company Announces a 25% Increase to Quarterly Dividend

BOSTON--(BUSINESS WIRE)-- Eastern Bankshares, Inc. (the “Company,” or together with its affiliates and subsidiaries, “Eastern”) (NASDAQ Global Select Market: EBC), the stock holding company of Eastern Bank, today announced its 2021 fourth quarter financial results and the declaration of a quarterly cash dividend. Net income for the fourth quarter of 2021 was $35.1 million, or $0.20 per diluted share, compared to net income of $37.1 million, or $0.22 per diluted share, reported for the third quarter of 2021. Operating net income* for the fourth quarter of 2021 was $44.9 million, or $0.26 per diluted share, compared to $37.4 million, or $0.22 per diluted share, reported for the prior quarter.

“Eastern finished 2021 with record financial results, capping off another milestone year for the Company,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “At Eastern, 2021 will be most remembered for the acquisition of Century Bancorp, by far our largest acquisition to date, which added approximately $7 billion in assets and 12 net new branch locations, and brought us approximately 56,000 new customers and 250 new colleagues. The successful integration of our two companies represented yet another landmark achievement amidst the ongoing COVID-19 pandemic, and we are tremendously grateful and thankful to all of our employees for their commitment to our customers, colleagues and communities we serve. As we look forward to 2022 and beyond, we expect the continued growth and success of our Company will open up new ways to deliver our offerings and services to our customers, expand our role as an employer of choice, and contribute positively to our local community, while delivering greater value to our shareholders.”

The Company also announced the declaration of a quarterly cash dividend of $0.10 per share, representing a $0.02, or 25%, increase from past quarterly dividends.

Rivers continued, “Our Board’s approval of a 25% increase to the quarterly dividend reflects our increased earnings capacity with the integration of Century. We remain committed to and confident in our ability to continue to drive earnings growth and effectively deploy capital while creating shareholder value.”

HIGHLIGHTS FOR THE FOURTH QUARTER OF 2021

• On November 12, 2021, the Company completed the merger with Century Bancorp, Inc. (“Century”), adding approximately $7 billion of total assets, $3 billion of total loans and $6 billion of total deposits. A full system conversion was successfully completed prior to the open of business on November 15, 2021.
• Organic loan growth, excluding Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans, was $133.6 million, or 6% on an annualized basis. Organic commercial loan growth, excluding PPP loans, was $115.4 million, or 7% on an annualized basis.
• An improving economic outlook coupled with strong asset quality led to a $4.3 million release of allowance for loan losses.
• The Company recorded a tax benefit of $2.9 million in the fourth quarter, compared to expense of $11.3 million in the prior quarter, a decrease of $14.2 million primarily attributable to an $11.3 million release of the deferred tax valuation allowance recorded in connection with the Company’s fourth quarter 2020 donation of stock to the Eastern Bank Foundation (“EBF,” formerly known as the Eastern Bank Charitable Foundation) in connection with the Company’s initial public offering.
• The Company repurchased 1,135,878 shares of its common stock during the fourth quarter of 2021 at a weighted average price of $20.42 excluding commissions, representing a total market value of $23.2 million.

MERGER WITH CENTURY BANCORP, INC.

On November 12, 2021, the Company completed the merger with Century for $642 million in cash consideration. The merger extends Eastern’s presence in the Greater Boston and southern New Hampshire markets with the addition of approximately $7 billion of total assets, $3 billion of total loans and $6 billion in deposits, each at fair value. Please see Appendix G for more information on organic loan growth and the impact of the Century merger. Fourth quarter results for 2021 reflect inclusion of Century since November 12, 2021.

BALANCE SHEET

Total assets were $23.5 billion at December 31, 2021, representing an increase of $6.1 billion, or 35%, from September 30, 2021.

• Available for sale securities increased $2.8 billion, or 50%, on a consecutive quarter basis, to $8.5 billion, primarily due to the merger with Century. Cash and equivalents declined $20.0 million to $1.2 billion.
• Total loans were $12.3 billion, representing an increase of $2.8 billion, or 29% from the prior quarter. The growth was due to the addition of the Century loan portfolio, which totaled $2.9 billion at the time of merger and organic loan growth excluding PPP loans of $133.6 million, partially offset by a reduction in PPP loans of $276.3 million from the prior quarter.
• Deposits totaled $19.6 billion, representing an increase of $6.0 billion, or 44%, from the prior quarter. The Century merger added $6.1 billion in total deposits which was partially offset by declines of $121.5 million due to post-acquisition deposit attrition in higher rate categories and a seasonal decline in municipal deposit balances.
• Shareholders’ equity was $3.4 billion, representing a decrease of $22.9 million from the prior quarter. The increase in retained earnings of $21.4 million was more than offset by a decrease in accumulated other comprehensive income of $23.6 million, driven by a decrease in the market value of the available for sale investment portfolio as well as a decrease in additional paid-in capital of $21.9 million associated primarily with the Company’s share repurchase activity during the quarter. Tangible shareholders’ equity* declined $292.9 million primarily due to an increase in goodwill and other intangibles of $269.9 million resulting primarily from the Century merger. Please refer to Appendix I for a roll forward of tangible shareholders’ equity*.
• At December 31, 2021, book value per share was $18.28 and tangible book value per share* was $14.80.

NET INTEREST INCOME

Net interest income was $122.4 million for the fourth quarter, compared to $102.7 million in the prior quarter, representing an increase of $19.7 million on a consecutive quarter basis due primarily to increased average earning assets as a result of the Century merger, as well as higher PPP fee accretion.

• Included in net interest income was $10.8 million and $5.9 million of PPP fee accretion net of deferred cost amortization in the fourth quarter and prior quarter, respectively. During the fourth quarter, $276.3 million in PPP loans were forgiven by the SBA or otherwise paid down compared to $291.8 million in the prior quarter.
• The net interest margin on a fully tax equivalent (“FTE”) basis* was 2.54% for the fourth quarter, representing a one basis point increase from the prior quarter. The net interest margin benefited from higher PPP fee accretion compared to the prior quarter. The margin on a core basis continued to be pressured by the low interest rate environment and excess liquidity. The core net interest margin* in Appendix E demonstrates the impact of excess cash and the PPP program.

NONINTEREST INCOME

Noninterest income was $49.0 million for the fourth quarter, compared to $43.2 million for the prior quarter, representing an increase of $5.8 million. Noninterest income on an operating basis* was $44.5 million for the fourth quarter, compared to $43.0 million for the prior quarter, an increase of $1.5 million.

• Insurance commissions decreased $1.0 million to $20.9 million in the fourth quarter, compared to $22.0 million in the prior quarter.
• Service charges on deposit accounts increased $1.3 million to $7.3 million in the fourth quarter, primarily due to higher account analysis fees.
• Trust and investment advisory fees increased $0.2 million on a consecutive quarter basis to $6.5 million.
• Loan-level interest rate swap income was $0.5 million in the fourth quarter, compared to $0.9 million in the prior quarter, representing a decrease of $0.4 million that was driven primarily by a decrease in the fair value of such interest rate swap transactions.
• Income from investments held in rabbi trust accounts were $4.4 million in the fourth quarter compared to losses of $0.3 million in the prior quarter, representing an increase of $4.7 million primarily due to stronger investment performance in the period as compared to the prior quarter.
• Other noninterest income increased $0.9 million in the fourth quarter, due primarily to an $0.8 million increase in gains on bank owned life insurance policies.

Please refer to Appendix B for a reconciliation of operating revenues and expenses*.

NONINTEREST EXPENSE

Noninterest expense was $143.6 million for the fourth quarter, compared to $99.0 million in the prior quarter, representing an increase of $44.6 million. The increase was primarily driven by Century-related merger and acquisition costs of $30.7 million. Noninterest expense on an operating basis* for the fourth quarter of 2021 was $110.3 million, compared to $97.2 million in the prior quarter, an increase of $13.1 million, primarily because of the Century merger.

• Salaries and employee benefits expense was $96.4 million in the fourth quarter, representing an increase of $30.1 million from the prior quarter. The increase in salaries was due primarily to expenses associated with the Century merger including severance payments, retention bonuses and the addition of colleagues. The increase in benefits expense was attributable to the increased market value of investments held in rabbi trust accounts by the Company’s defined contribution supplemental executive retirement plan (“DC SERP”) as well as a $1.0 million increase in payroll tax expense.
• Office occupancy and equipment expense was $16.2 million in the fourth quarter, an increase of $8.2 million from the prior quarter, primarily due to expenses of $7.1 million associated with the Century merger.
• Professional services expense was $9.9 million in the fourth quarter, an increase of $5.8 million from the prior quarter, primarily due to expenses of $5.7 million associated with the Century merger.

Please refer to Appendix B for a reconciliation of operating revenues and expenses* and Appendix H for a detailed listing of Century-related merger expenses.

ASSET QUALITY

The allowance for loan losses was $97.8 million at December 31, 2021, or 0.80% of total loans, compared to $103.4 million or 1.09% of total loans at September 30, 2021. The decline in the reserve ratio was primarily due to the increase in total loans resulting from the Century merger. Century loans were recorded at fair value at the time of acquisition and therefore no reserve was required. The Company released loan loss reserves totaling $4.3 million in the fourth quarter, compared to a release of $1.5 million in the prior quarter. The Company followed the incurred loss allowance GAAP accounting model at December 31, 2021 and for all preceding periods. The Company has adopted the current expected credit losses methodology, known as CECL, as of January 1, 2022.

Non-performing loans totaled $35.0 million at December 31, 2021 compared to $42.1 million at the end of the prior quarter. During the fourth quarter of 2021, the Company recorded total net charge-offs of $1.3 million, or 0.05% of average total loans on an annualized basis compared to $0.8 million and 0.03% in the prior quarter, respectively.

At December 31, 2021, approximately $106.7 million in COVID-19 modified loans remained under modified payment terms, down from $110.6 million at September 30, 2021. The commercial real estate portfolio contained $93.5 million of the remaining COVID-19 modifications at period end, of which $71.0 million or 76% were in the hotel segment.

Please refer to Appendix F for a detailed breakout of COVID-19 related loan modifications.

DIVIDENDS AND SHARE REPURCHASES

The Company’s Board of Directors has declared a quarterly cash dividend of $0.10 per common share. The dividend represents a $0.02, or 25%, increase from the dividend declared in the past three quarters, and will be payable on March 15, 2022, to shareholders of record as of the close of business on March 3, 2022.

The Company repurchased 1,135,878 shares of its common stock during the fourth quarter of 2021 at a weighted average price of $20.42 excluding commissions representing a total market value of $23.2 million. At December 31, 2021, there were 8,202,022 shares available for repurchase under the Company’s current repurchase program, which expires on November 30, 2022 and is limited to $225.0 million in total market value.

CONFERENCE CALL INFORMATION

A conference call and webcast covering Eastern’s fourth quarter 2021 earnings will be held on Friday, January 28, 2022 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (833) 233-4460 from within the U.S. or (647) 689-4543 if outside the U.S. and reference conference ID 7188051. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A replay of the webcast will be made available on demand on this site.

ABOUT EASTERN BANKSHARES, INC.

Eastern Bankshares, Inc. is the stock holding company for Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 120 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of December 31, 2021, Eastern Bank had approximately $24 billion in total assets. Eastern provides banking, investment and insurance products and services for consumers and businesses of all sizes, including through its Eastern Wealth Management division and its Eastern Insurance Group LLC subsidiary. Eastern takes pride in its outspoken advocacy and community support that includes $240 million in charitable giving since 1994. An inclusive company, Eastern employs approximately 2,100 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 this 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 businesses as well as underlying trends that may, to some extent, be obscured by inclusion of such items in the corresponding GAAP financial measures.

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, the operating efficiency ratio, and the ratio of noninterest income to total revenue on an operating basis. 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) expenses indirectly associated with the Company’s initial public offering (“IPO”), (vii) other real estate owned (“OREO”) gains, (viii) merger and acquisition expenses, (ix) the stock donation to the EBF in connection with the Company’s mutual-to-stock conversion and IPO, and (x) settlement of putative consumer class action litigation matters related to overdraft and non-sufficient funds fees, and associated settlement expenses. 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, respectively, cannot be made available without unreasonable effort.

Management also presents the Company’s core net interest margin which excludes the impact of items management determines as being one-time in nature or not indicative of its core operating results. Such items include the impact of excess liquidity in the form of excess cash volume, PPP loans originated in response to the COVID-19 pandemic, and material purchase accounting adjustments. Similarly, management presents certain asset quality metrics excluding PPP loans which it does not consider to be part of the Company’s core portfolios. These metrics include the ratio of total nonperforming loans to total loans excluding PPP loans, the ratio of the allowance for loan losses to total loans excluding PPP loans, and the ratio of annualized net charge-offs to average total loans excluding PPP loans. The Company anticipates that the vast majority of its PPP loans outstanding at December 31, 2021 will be forgiven, and to the extent not forgiven, a PPP loan is intended to be 100% guaranteed by the SBA.

Management also presents tangible assets, tangible shareholders’ equity, tangible book value per share, and the ratio of tangible shareholders’ equity to tangible assets, each of which excludes the impact of goodwill and other 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 included 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” 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 developments in the Company’s market relating to the COVID-19 pandemic, including the severity and duration of the associated economic slowdown, 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 the interest rate environment, risks that revenue or expense synergies or the other expected benefits of the Company’s merger with Century (“Transaction”) may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; that the Company is unable to successfully implement integration strategies; reputational risks and the reaction of customers to the Transaction; and diversion of management time on Transaction-related issues, as well as general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiary Eastern Bank are engaged, including inflation, interest rates, interest rate sensitivity and liquidity, 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 fluctuations due to actual or anticipated changes to federal tax laws; credit quality, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; and the failure of the Company to execute all of 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.

Further, given the ongoing and dynamic nature of the COVID-19 pandemic, it is difficult to predict what continued effects the COVID-19 pandemic will have on the Company's business and results of operations. The COVID-19 pandemic and the related local and national economic disruption may result in a continued decline in demand for the Company's products and services; increased levels of loan delinquencies, problem assets and foreclosures; an increase in the Company's allowance for loan losses; a decline in the value of loan collateral, including real estate; reduced demand for office space in our markets due to remote and/or hybrid work arrangements; a greater decline in the yield on the Company's interest-earning assets than the decline in the cost of the Company's interest-bearing liabilities; and increased cybersecurity risks, as employees continue to work remotely. 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. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS

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 amounts)	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Earnings data
Net interest income	$	122,437		$	102,691		$	104,608		$	100,091		$	103,608
Noninterest income		49,001			43,209			45,733			55,212			49,638
Total revenue		171,438			145,900			150,341			155,303			153,246
Noninterest expense		143,602			98,970			107,335			94,049			199,169
Pre-tax, pre-provision income (loss)		27,836			46,930			43,006			61,254			(45,923	)
(Release of) provision for allowance for loan losses		(4,318	)		(1,488	)		(3,300	)		(580	)		900
Pre-tax income (loss)		32,154			48,418			46,306			61,834			(46,823	)
Net income (loss)		35,087			37,106			34,809			47,663			(44,062	)
Operating net income (non-GAAP)		44,860			37,391			37,097			46,537			31,612
Per-share data
Earnings (loss) per share, basic	$	0.20		$	0.22		$	0.20		$	0.28		$	(0.26	)
Earnings (loss) per share, diluted	$	0.20		$	0.22		$	0.20		$	0.28		$	(0.26	)
Operating earnings per share, basic (non-GAAP)	$	0.26		$	0.22		$	0.22		$	0.27		$	0.18
Operating earnings per share, diluted (non-GAAP)	$	0.26		$	0.22		$	0.22		$	0.27		$	0.18
Book value per share	$	18.28		$	18.36		$	18.37		$	18.14		$	18.36
Tangible book value per share (non-GAAP)	$	14.80		$	16.33		$	16.33		$	16.12		$	16.34
Profitability
Return on average assets (1)		0.67	%		0.84	%		0.83	%		1.19	%		(1.11	)%
Operating return on average assets (non-GAAP) (1)		0.86	%		0.86	%		0.89	%		1.15	%		0.79	%
Return on average shareholders' equity (1)		4.07	%		4.27	%		4.10	%		5.66	%		(5.61	)%
Operating return on average shareholders' equity (non-GAAP) (1)		5.19	%		4.30	%		4.36	%		5.53	%		4.02	%
Net interest margin (FTE) (1)		2.54	%		2.53	%		2.69	%		2.71	%		2.84	%
Cost of deposits (1)		0.06	%		0.02	%		0.03	%		0.03	%		0.03	%
Fee income ratio		28.58	%		29.62	%		30.42	%		35.55	%		32.39	%
Efficiency ratio		83.76	%		67.83	%		71.39	%		60.56	%		129.97	%
Operating efficiency ratio (non-GAAP)		65.21	%		66.14	%		67.78	%		60.22	%		68.33	%
Balance Sheet (end of period)
Total assets	$	23,512,128		$	17,461,223		$	17,047,453		$	16,726,795		$	15,964,190
Total loans		12,281,510			9,504,562			9,621,075			9,916,475			9,730,525
Total deposits		19,628,311			13,649,964			13,250,433			12,980,875			12,155,784
Total loans / total deposits		63	%		70	%		73	%		76	%		80	%
PPP loans	$	331,385		$	533,965		$	825,784		$	1,238,053		$	1,026,117
Asset quality
Allowance for loan losses ("ALLL")	$	97,787		$	103,398		$	105,637		$	111,080		$	113,031
ALLL / total nonperforming loans ("NPLs")		279.53	%		245.77	%		253.74	%		252.72	%		261.33	%
Total NPLs / total loans		0.29	%		0.44	%		0.43	%		0.44	%		0.45	%
Total NPLs / total loans (excl. PPP loans) (non-GAAP)		0.29	%		0.47	%		0.47	%		0.51	%		0.50	%
Net charge-offs ("NCOs") / average total loans (1)		0.05	%		0.03	%		0.09	%		0.06	%		0.13	%
NCOs / average total loans (excl. PPP loans) (non-GAAP) (1)		0.05	%		0.03	%		0.10	%		0.06	%		0.15	%
Remaining COVID-19 loan modifications (2)	$	106,657		$	110,596		$	149,805		$	178,430		$	332,682
Capital adequacy
Shareholders' equity / assets		14.49	%		19.64	%		20.12	%		20.25	%		21.47	%
Tangible shareholders' equity / tangible assets (non-GAAP)		12.06	%		17.85	%		18.30	%		18.42	%		19.58	%
(1) Presented on an annualized basis.
(2) See Appendix F: COVID-19 Related Loan Modifications

EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS
	As of										Dec 31, 2021 change from
(Unaudited, dollars in thousands)	Dec 31, 2021			Sep 30, 2021			Dec 31, 2020				Sep 30, 2021					Dec 31, 2020
ASSETS											△ $		△ %			△ $		△ %
Cash and due from banks	$	144,634		$	78,805		$	116,591			65,829		84	%		28,043		24	%
Short-term investments		1,087,158			1,172,956			1,937,479			(85,798	)	(7	)%		(850,321	)	(44	)%
Cash and cash equivalents		1,231,792			1,251,761			2,054,070			(19,969	)	(2	)%		(822,278	)	(40	)%
Available for sale securities		8,511,224			5,689,312			3,183,861			2,821,912		50	%		5,327,363		167	%
Total securities		8,511,224			5,689,312			3,183,861			2,821,912		50	%		5,327,363		167	%
Loans held for sale		1,206			1,757			1,140			(551	)	(31	)%		66		6	%
Loans:
Commercial and industrial		2,960,527			1,652,447			1,995,016			1,308,080		79	%		965,511		48	%
Commercial real estate		4,522,513			3,825,186			3,573,630			697,327		18	%		948,883		27	%
Commercial construction		222,328			243,146			305,708			(20,818	)	(9	)%		(83,380	)	(27	)%
Business banking		1,334,694			1,225,538			1,339,164			109,156		9	%		(4,470	)	—	%
Total commercial loans		9,040,062			6,946,317			7,213,518			2,093,745		30	%		1,826,544		25	%
Residential real estate		1,926,810			1,491,269			1,370,957			435,541		29	%		555,853		41	%
Consumer home equity		1,100,153			848,570			868,270			251,583		30	%		231,883		27	%
Other consumer		214,485			218,406			277,780			(3,921	)	(2	)%		(63,295	)	(23	)%
Total loans		12,281,510			9,504,562			9,730,525			2,776,948		29	%		2,550,985		26	%
Allowance for loan losses		(97,787	)		(103,398	)		(113,031	)		5,611		(5	)%		15,244		(13	)%
Unamortized prem./disc. and def. fees		(26,442	)		(23,104	)		(23,536	)		(3,338	)	14	%		(2,906	)	12	%
Net loans		12,157,281			9,378,060			9,593,958			2,779,221		30	%		2,563,323		27	%
Federal Home Loan Bank stock, at cost		10,904			10,601			8,805			303		3	%		2,099		24	%
Premises and equipment		80,984			44,048			49,398			36,936		84	%		31,586		64	%
Bank-owned life insurance		157,091			79,259			78,561			77,832		98	%		78,530		100	%
Goodwill and other intangibles, net		649,703			379,772			376,534			269,931		71	%		273,169		73	%
Deferred income taxes, net		76,535			34,135			13,229			42,400		124	%		63,306		479	%
Prepaid expenses		179,330			148,180			148,680			31,150		21	%		30,650		21	%
Other assets		456,078			444,338			455,954			11,740		3	%		124		—	%
Total assets		23,512,128			17,461,223			15,964,190			6,050,905		35	%		7,547,938		47	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand		7,020,864			5,484,126			4,910,794			1,536,738		28	%		2,110,070		43	%
Interest checking accounts		4,478,566			2,693,276			2,380,497			1,785,290		66	%		2,098,069		88	%
Savings accounts		2,077,495			1,444,928			1,256,736			632,567		44	%		820,759		65	%
Money market investment		5,525,005			3,802,319			3,348,898			1,722,686		45	%		2,176,107		65	%
Certificates of deposit		526,381			225,315			258,859			301,066		134	%		267,522		103	%
Total deposits		19,628,311			13,649,964			12,155,784			5,978,347		44	%		7,472,527		61	%
Borrowed funds:
Federal Home Loan Bank advances		14,020			14,172			14,624			(152	)	(1	)%		(604	)	(4	)%
Escrow deposits of borrowers		20,258			15,900			13,425			4,358		27	%		6,833		51	%
Total borrowed funds		34,278			30,072			28,049			4,206		14	%		6,229		22	%
Other liabilities		443,187			351,895			352,305			91,292		26	%		90,882		26	%
Total liabilities		20,105,776			14,031,931			12,536,138			6,073,845		43	%		7,569,638		60	%
Shareholders' equity:
Common shares		1,863			1,868			1,868			(5	)	—	%		(5	)	—	%
Additional paid-in capital		1,835,241			1,857,165			1,854,068			(21,924	)	(1	)%		(18,827	)	(1	)%
Unallocated common shares held by the employee stock ownership plan ("ESOP")		(142,709	)		(143,966	)		(147,725	)		1,257		(1	)%		5,016		(3	)%
Retained earnings		1,768,653			1,747,300			1,665,607			21,353		1	%		103,046		6	%
Accumulated other comprehensive income ("AOCI"), net of tax		(56,696	)		(33,075	)		54,234			(23,621	)	71	%		(110,930	)	(205	)%
Total shareholders' equity		3,406,352			3,429,292			3,428,052			(22,940	)	(1	)%		(21,700	)	(1	)%
Total liabilities and shareholders' equity		23,512,128			17,461,223			15,964,190			6,050,905		35	%		7,547,938		47	%

EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
	Three months ended										Three months ended Dec 31, 2021 change from three months ended
(Unaudited, dollars in thousands, except share data)	Dec 31, 2021			Sep 30, 2021			Dec 31, 2020				Sep 30, 2021					Dec 31, 2020
Interest and dividend income:											△ $		△ %			△ $		△ %
Interest and fees on loans	$	101,275		$	86,735		$	93,767			14,540		17	%		7,508		8	%
Taxable interest and dividends on available for sale securities		21,335			14,314			8,493			7,021		49	%		12,842		151	%
Non-taxable interest and dividends on available for sale securities		1,815			1,848			1,879			(33	)	(2	)%		(64	)	(3	)%
Interest on federal funds sold and other short-term investments		452			571			584			(119	)	(21	)%		(132	)	(23	)%
Total interest and dividend income		124,877			103,468			104,723			21,409		21	%		20,154		19	%
Interest expense:
Interest on deposits		2,398			736			1,070			1,662		226	%		1,328		124	%
Interest on borrowings		42			41			45			1		2	%		(3	)	(7	)%
Total interest expense		2,440			777			1,115			1,663		214	%		1,325		119	%
Net interest income		122,437			102,691			103,608			19,746		19	%		18,829		18	%
(Release of) provision for loan losses		(4,318	)		(1,488	)		900			(2,830	)	190	%		(5,218	)	(580	)%
Net interest income after (release of) provision for loan losses		126,755			104,179			102,708			22,576		22	%		24,047		23	%
Noninterest income:
Insurance commissions		20,937			21,956			22,437			(1,019	)	(5	)%		(1,500	)	(7	)%
Service charges on deposit accounts		7,261			5,935			6,046			1,326		22	%		1,215		20	%
Trust and investment advisory fees		6,541			6,310			5,502			231		4	%		1,039		19	%
Debit card processing fees		3,169			3,030			2,749			139		5	%		420		15	%
Interest rate swap income		512			881			2,538			(369	)	(42	)%		(2,026	)	(80	)%
Income (losses) from investments held in rabbi trusts		4,444			(289	)		5,535			4,733		(1638	)%		(1,091	)	(20	)%
Losses on trading securities, net		—			—			(1	)		—		—	%		1		(100	)%
Gains on sales of mortgage loans held for sale, net		561			717			3,334			(156	)	(22	)%		(2,773	)	(83	)%
Gains on sales of securities available for sale, net		—			1			3			(1	)	(100	)%		(3	)	(100	)%
Other		5,576			4,668			1,495			908		19	%		4,081		273	%
Total noninterest income		49,001			43,209			49,638			5,792		13	%		(637	)	(1	)%
Noninterest expense:
Salaries and employee benefits		96,362			66,238			70,310			30,124		45	%		26,052		37	%
Office occupancy and equipment		16,194			7,960			8,198			8,234		103	%		7,996		98	%
Data processing		12,947			12,191			11,354			756		6	%		1,593		14	%
Professional services		9,866			4,024			5,307			5,842		145	%		4,559		86	%
Charitable contributions		—			—			91,288			—		—	%		(91,288	)	(100	)%
Marketing		1,955			1,598			2,823			357		22	%		(868	)	(31	)%
Operational losses		1,557			1,279			763			278		22	%		794		104	%
Loan expenses		1,229			1,586			2,025			(357	)	(23	)%		(796	)	(39	)%
Federal Deposit Insurance Corporation ("FDIC") insurance		1,237			1,056			946			181		17	%		291		31	%
Amortization of intangible assets		726			629			755			97		15	%		(29	)	(4	)%
Other		1,529			2,409			5,400			(880	)	(37	)%		(3,871	)	(72	)%
Total noninterest expense		143,602			98,970			199,169			44,632		45	%		(55,567	)	(28	)%
Income (loss) before income tax (benefit) expense		32,154			48,418			(46,823	)		(16,264	)	(34	)%		78,977		(169	)%
Income tax (benefit) expense		(2,933	)		11,312			(2,761	)		(14,245	)	(126	)%		(172	)	6	%
Net income		35,087			37,106			(44,062	)		(2,019	)	(5	)%		79,149		(180	)%
Share data:
Earnings (loss) per share, basic	$	0.20		$	0.22		$	(0.26	)
Earnings (loss) per share, diluted	$	0.20		$	0.22		$	(0.26	)

EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
	Twelve months ended
(Unaudited, dollars in thousands, except share data)	Dec 31, 2021			Dec 31, 2020				Change
Interest and dividend income:								△ $		△ %
Interest and fees on loans	$	367,585		$	372,152			(4,567	)	(1	)%
Taxable interest and dividends on available for sale securities		58,312			31,825			26,487		83	%
Non-taxable interest and dividends on available for sale securities		7,376			7,588			(212	)	(3	)%
Interest on federal funds sold and other short-term investments		1,886			1,757			129		7	%
Interest and dividends on trading securities		—			6			(6	)	(100	)%
Total interest and dividend income		435,159			413,328			21,831		5	%
Interest expense:
Interest on deposits		5,167			11,315			(6,148	)	(54	)%
Interest on borrowings		165			762			(597	)	(78	)%
Total interest expense		5,332			12,077			(6,745	)	(56	)%
Net interest income		429,827			401,251			28,576		7	%
(Release of) provision for loan losses		(9,686	)		38,800			(48,486	)	(125	)%
Net interest income after (release of) provision for loan losses		439,513			362,451			77,062		21	%
Noninterest income:
Insurance commissions		94,704			94,495			209		—	%
Service charges on deposit accounts		24,271			21,560			2,711		13	%
Trust and investment advisory fees		24,588			21,102			3,486		17	%
Debit card processing fees		12,118			10,277			1,841		18	%
Interest rate swap income (losses)		5,634			(1,381	)		7,015		(508	)%
Income from investments held in rabbi trusts		10,217			10,337			(120	)	(1	)%
Losses on trading securities, net		—			(4	)		4		(100	)%
Gains on sales of mortgage loans held for sale, net		3,605			7,066			(3,461	)	(49	)%
Gains on sales of securities available for sale, net		1,166			288			878		305	%
Other		16,852			14,633			2,219		15	%
Total noninterest income		193,155			178,373			14,782		8	%
Noninterest expense:
Salaries and employee benefits		295,916			261,827			34,089		13	%
Office occupancy and equipment		40,465			33,796			6,669		20	%
Data processing		50,839			45,259			5,580		12	%
Professional services		24,477			18,902			5,575		29	%
Charitable contributions		—			95,272			(95,272	)	(100	)%
Marketing		8,741			8,879			(138	)	(2	)%
Operational losses		7,786			2,493			5,293		212	%
Loan expenses		6,516			6,727			(211	)	(3	)%
FDIC insurance		4,226			3,734			492		13	%
Amortization of intangible assets		2,512			2,857			(345	)	(12	)%
Other		2,478			25,177			(22,699	)	(90	)%
Total noninterest expense		443,956			504,923			(60,967	)	(12	)%
Income before income tax expense		188,712			35,901			152,811		426	%
Income tax expense		34,047			13,163			20,884		159	%
Net income		154,665			22,738			131,927		580	%
Share data:
Weighted average common shares outstanding, basic (1)		172,192,336			171,812,535
Weighted average common shares outstanding, diluted (1)		172,252,057			171,812,535
Earnings per share, basic	$	0.90		$	0.13
Earnings per share, diluted	$	0.90		$	0.13
(1) Shares held by the Company’s ESOP that have not been allocated to employees in accordance with the terms of the ESOP are not deemed outstanding for earnings per share calculations.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN
	As of and for the three months ended
	Dec 31, 2021									Sep 30, 2021									Dec 31, 2020
(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	$	8,021,665		$	80,326		3.97	%		$	6,995,556		$	67,276		3.82	%		$	7,265,156		$	73,289		4.01	%
Residential		1,735,324			12,993		2.97	%			1,477,891			11,479		3.08	%			1,367,073			11,641		3.39	%
Consumer		1,189,106			9,683		3.23	%			1,055,075			8,803		3.31	%			1,164,468			9,621		3.29	%
Total loans		10,946,095			103,002		3.73	%			9,528,522			87,558		3.65	%			9,796,697			94,551		3.84	%
Investment securities		7,336,783			23,633		1.28	%			5,249,742			16,656		1.26	%			2,627,679			10,945		1.66	%
Federal funds sold and other short-term investments		1,201,223			452		0.15	%			1,503,919			570		0.15	%			2,291,118			584		0.10	%
Total interest-earning assets		19,484,101			127,087		2.59	%			16,282,183			104,784		2.55	%			14,715,494			106,080		2.87	%
Non-interest-earning assets		1,373,219									1,141,168									1,123,550
Total assets	$	20,857,320								$	17,423,351								$	15,839,044
Interest-bearing liabilities:
Deposits:
Savings	$	1,800,862		$	61		0.01	%		$	1,441,385		$	36		0.01	%		$	1,232,669		$	62		0.02	%
Interest checking		3,830,427			1,267		0.13	%			2,687,196			244		0.04	%			2,282,786			232		0.04	%
Money market		4,743,313			788		0.07	%			3,762,855			360		0.04	%			3,362,335			609		0.07	%
Time deposits		388,511			281		0.29	%			233,145			96		0.16	%			267,378			167		0.25	%
Total interest-bearing deposits		10,763,113			2,397		0.09	%			8,124,581			736		0.04	%			7,145,168			1,070		0.06	%
Borrowings		29,204			42		0.57	%			26,074			41		0.62	%			25,529			45		0.70	%
Total interest-bearing liabilities		10,792,317			2,439		0.09	%			8,150,655			777		0.04	%			7,170,697			1,115		0.06	%
Demand deposit accounts		6,226,291									5,471,906									5,167,221
Other noninterest-bearing liabilities		415,481									350,111									376,197
Total liabilities		17,434,089									13,972,672									12,714,115
Shareholders' equity		3,423,231									3,450,679									3,124,929
Total liabilities and shareholders' equity	$	20,857,320								$	17,423,351								$	15,839,044
Net interest income - FTE				$	124,648								$	104,007								$	104,965
Net interest rate spread (2)							2.50	%								2.51	%								2.81	%
Net interest-earning assets (3)	$	8,691,784								$	8,131,528								$	7,544,797
Net interest margin - FTE (4)							2.54	%								2.53	%								2.84	%
(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 represents net interest income divided by average total interest-earning assets.
(5) Presented on an annualized basis.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN
	As of and for the twelve months ended
	Dec 31, 2021									Dec 31, 2020
(Unaudited, dollars in thousands)	Avg. Balance			Interest			Yield / Cost			Avg. Balance			Interest			Yield / Cost
Interest-earning assets:
Loans (1):
Commercial	$	7,410,024		$	288,557		3.89	%		$	7,014,044		$	281,816		4.02	%
Residential		1,510,703			47,143		3.12	%			1,400,907			49,767		3.55	%
Consumer		1,103,042			36,019		3.27	%			1,236,893			43,729		3.54	%
Total loans		10,023,769			371,719		3.71	%			9,651,844			375,312		3.89	%
Investment securities		5,151,136			67,647		1.31	%			1,826,121			41,730		2.29	%
Federal funds sold and other short-term investments		1,514,351			1,886		0.12	%			1,288,714			1,758		0.14	%
Total interest earning assets		16,689,256			441,252		2.64	%			12,766,679			418,800		3.28	%
Non-interest-earning assets		1,173,830									1,097,064
Total assets	$	17,863,086								$	13,863,743
Interest-bearing liabilities:
Deposits:
Savings	$	1,483,271		$	230		0.02	%		$	1,123,584		$	242		0.02	%
Interest checking		2,866,091			1,997		0.07	%			2,227,185			2,033		0.09	%
Money market		3,870,712			2,342		0.06	%			3,212,752			7,492		0.23	%
Time deposits		280,141			598		0.21	%			300,381			1,548		0.52	%
Total interest-bearing deposits		8,500,215			5,167		0.06	%			6,863,902			11,315		0.16	%
Borrowings		26,495			165		0.62	%			72,101			762		1.06	%
Total interest-bearing liabilities		8,526,710			5,332		0.06	%			6,936,003			12,077		0.17	%
Demand deposit accounts		5,547,615									4,535,066
Other noninterest-bearing liabilities		364,191									352,518
Total liabilities		14,438,516									11,823,587
Shareholders' equity		3,424,570									2,040,156
Total liabilities and shareholders' equity	$	17,863,086								$	13,863,743
Net interest income - FTE				$	435,920								$	406,723
Net interest rate spread (2)							2.58	%								3.11	%
Net interest-earning assets (3)	$	8,162,546								$	5,830,676
Net interest margin - FTE (4)							2.61	%								3.19	%
(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 represents net interest income divided by average total interest-earning assets.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - NON-PERFORMING ASSETS (1)
	As of
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
(Unaudited, dollars in thousands)
Non-accrual loans:
Commercial	$	20,630		$	29,166		$	29,356		$	30,275		$	30,059
Residential		6,681			7,185			6,445			8,127			6,815
Consumer		5,682			4,262			4,106			3,873			4,131
Total non-accrual loans		32,993			40,613			39,907			42,275			41,005
Accruing loans past due 90 days or more:
Commercial		1,196			1,171			1,439			1,390			1,959
Residential		769			278			277			280			279
Consumer		25			9			9			9			9
Total accruing loans past due 90 days or more		1,990			1,458			1,725			1,679			2,247
Total non-performing loans		34,983			42,071			41,632			43,954			43,252
Other real estate owned		—			—			38			—			—
Other non-performing assets:		—			—			—			—			—
Total non-performing assets	$	34,983		$	42,071		$	41,670		$	43,954		$	43,252
Total accruing troubled debt restructured loans	$	33,336		$	34,723		$	38,316		$	39,367		$	41,095
Total non-performing loans to total loans		0.29	%		0.44	%		0.43	%		0.44	%		0.45	%
Total non-performing assets to total assets		0.15	%		0.24	%		0.24	%		0.26	%		0.27	%
(1) Non-performing assets are comprised of NPLs, 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.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE OFFS
	Three months ended
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
(Unaudited, dollars in thousands)
Average total loans	$	10,946,095		$	9,528,522		$	9,796,701		$	9,816,788		$	9,796,697
Allowance for loan losses, beginning of the period	$	103,398		$	105,637		$	111,080		$	113,031		$	115,432
Charged-off loans:
Commercial and industrial		1,008			—			550			—			1,603
Commercial real estate		5			8			—			234			—
Commercial construction		—			—			—			—			—
Business banking		1,002			867			1,838			1,384			1,433
Residential real estate		35			—			—			—			—
Consumer home equity		24			—			—			—			79
Other consumer		666			742			275			364			713
Total charged-off loans		2,740			1,617			2,663			1,982			3,828
Recoveries on loans previously charged-off:
Commercial and industrial		873			40			13			9			92
Commercial real estate		—			—			4			—			220
Commercial construction		—			—			—			—			—
Business banking		399			469			291			365			47
Residential real estate		7			88			17			10			9
Consumer home equity		48			63			3			71			100
Other consumer		120			206			192			156			59
Total recoveries		1,447			866			520			611			527
Net loans charged-off (recoveries):
Commercial and industrial		135			(40	)		537			(9	)		1,511
Commercial real estate		5			8			(4	)		234			(220	)
Commercial construction		—			—			—			—			—
Business banking		603			398			1,547			1,019			1,386
Residential real estate		28			(88	)		(17	)		(10	)		(9	)
Consumer home equity		(24	)		(63	)		(3	)		(71	)		(21	)
Other consumer		546			536			83			208			654
Total net loans charged-off		1,293			751			2,143			1,371			3,301
(Release of) provision for loan losses		(4,318	)		(1,488	)		(3,300	)		(580	)		900
Total allowance for loan losses, end of period	$	97,787		$	103,398		$	105,637		$	111,080		$	113,031
Net charge-offs to average total loans outstanding during this period (1)		0.05	%		0.03	%		0.09	%		0.06	%		0.13	%
Allowance for loan losses as a percent of total loans		0.80	%		1.09	%		1.10	%		1.12	%		1.16	%
Allowance for loan losses as a percent of nonperforming loans		279.53	%		245.77	%		253.74	%		252.72	%		261.33	%
(1) Presented on an annualized basis.

APPENDIX A: Reconciliation of Non-GAAP Earnings Metrics
For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."
	Three Months Ended
(Unaudited, dollars in thousands, except share data)	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Net income (GAAP)	$	35,087		$	37,106		$	34,809		$	47,663		$	(44,062	)
Add:
Noninterest income components:
(Income) losses from investments held in rabbi trusts		(4,444	)		289			(4,216	)		(1,846	)		(5,535	)
Gains on sales of securities available for sale, net		—			(1	)		(1	)		(1,164	)		(3	)
Gains on sales of other assets		(34	)		(490	)		(29	)		(18	)		(49	)
Noninterest expense components:
Rabbi trust employee benefit expense (income)		2,519			(53	)		2,063			986			2,838
Impairment charge (reversal) on tax credit investments		116			1,133			(1,419	)		—			3,189
Gain on sale of OREO		—			(87	)		—			—			(61	)
Merger and acquisition expenses		30,652			740			3,479			589			90
Settlement and expenses for putative consumer class action matters		—			—			3,325			—			—
Stock donation to the EBF		—			—			—			—			91,287
Total impact of non-GAAP adjustments		28,809			1,531			3,202			(1,453	)		91,756
Less net tax benefit (expense) associated with non-GAAP adjustments (1)		19,036			1,246			914			(327	)		16,082
Non-GAAP adjustments, net of tax	$	9,773		$	285		$	2,288		$	(1,126	)	$	75,674
Operating net income (non-GAAP)	$	44,860		$	37,391		$	37,097		$	46,537		$	31,612
Weighted average common shares outstanding during the period (2):
Basic		172,246,799			172,298,615			172,173,707			172,049,044			171,812,535
Diluted		172,481,829			172,298,615			172,173,707			172,049,044			171,812,535
Earnings (loss) per share, basic	$	0.20		$	0.22		$	0.20		$	0.28		$	(0.26	)
Earnings (loss) per share, diluted	$	0.20		$	0.22		$	0.20		$	0.28		$	(0.26	)
Operating earnings per share, basic (non-GAAP)	$	0.26		$	0.22		$	0.22		$	0.27		$	0.18
Operating earnings per share, diluted (non-GAAP)	$	0.26		$	0.22		$	0.22		$	0.27		$	0.18
Return on average assets (3)		0.67	%		0.84	%		0.83	%		1.19	%		(1.11	)%
Add:
(Income) losses from investments held in rabbi trusts (3)		(0.08	)%		0.01	%		(0.10	)%		(0.05	)%		(0.14	)%
Gains on sales of securities available for sale, net (3)		—	%		—	%		—	%		(0.03	)%		—	%
Gains on sales of other assets (3)		—	%		(0.01	)%		—	%		—	%		—	%
Rabbi trust employee benefit expense (income) (3)		0.05	%		—	%		0.05	%		0.02	%		0.07	%
Impairment charge (reversal) on tax credit investments (3)		—	%		0.03	%		(0.03	)%		—	%		0.08	%
Gain on sale of OREO (3)		—	%		—	%		—	%		—	%		—	%
Merger and acquisition expenses (3)		0.58	%		0.02	%		0.08	%		0.01	%		—	%
Settlement and expenses for putative consumer class action matters (3)		—	%		—	%		0.08	%		—	%		—	%
Stock donation to the EBF (3)		—	%		—	%		—	%		—	%		2.29	%
Less net tax benefit (expense) associated with non-GAAP adjustments (1) (3)		0.36	%		0.03	%		0.02	%		(0.01	)%		0.40	%
Operating return on average assets (non-GAAP) (3)		0.86	%		0.86	%		0.89	%		1.15	%		0.79	%
Return on average shareholders' equity (3)		4.07	%		4.27	%		4.10	%		5.66	%		(5.61	)%
Add:
(Income) losses from investments held in rabbi trusts (3)		(0.52	)%		0.03	%		(0.50	)%		(0.22	)%		(0.70	)%
Gains on sales of securities available for sale, net (3)		—	%		—	%		—	%		(0.14	)%		—	%
Gains on sale of other assets (3)		—	%		(0.06	)%		—	%		—	%		(0.01	)%
Rabbi trust employee benefit expense (income) (3)		0.29	%		(0.01	)%		0.24	%		0.12	%		0.36	%
Impairment charge (reversal) on tax credit investments (3)		0.01	%		0.13	%		(0.17	)%		—	%		0.41	%
Gain on sale of OREO (3)		—	%		(0.01	)%		—	%		—	%		(0.01	)%
Merger and acquisition expenses (3)		3.55	%		0.09	%		0.41	%		0.07	%		0.01	%
Settlement and expenses for putative consumer class action matters (3)		—	%		—	%		0.39	%		—	%		—	%
Stock donation to the EBF (3)		—	%		—	%		—	%		—	%		11.62	%
Less net tax benefit (expense) associated with non-GAAP adjustments (1) (3)		2.21	%		0.14	%		0.11	%		(0.04	)%		2.05	%
Operating return on average shareholders' equity (non-GAAP) (3)		5.19	%		4.30	%		4.36	%		5.53	%		4.02	%
(1) The net tax benefit (expense) associated with these items is 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 Q4 2020 net tax benefit amount reflects the impact of the $12.0 million valuation allowance associated with the stock donation to the Eastern Bank Foundation. The Q4 2021 net tax benefit amount reflects the impact of the release of $11.3 million of the $12.0 million valuation allowance associated with the stock donation to the Eastern Bank Foundation.
(2) Shares held by the Company’s ESOP that have not been allocated to employees in accordance with the terms of the ESOP are not deemed outstanding for earnings per share calculations.
(3) Presented on an annualized basis.

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
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
(Unaudited, dollars in thousands)
Net interest income (GAAP)	$	122,437		$	102,691		$	104,608		$	100,091		$	103,608
Add:
Tax-equivalent adjustment (non-GAAP)		2,211			1,316			1,269			1,297			1,357
Fully-taxable equivalent net interest income (non-GAAP)	$	124,648		$	104,007		$	105,877		$	101,388		$	104,965
Noninterest income (GAAP)	$	49,001		$	43,209		$	45,733		$	55,212		$	49,638
Less:
Income (losses) from investments held in rabbi trusts		4,444			(289	)		4,216			1,846			5,535
Gains on sales of securities available for sale, net		—			1			1			1,164			3
Gains on sales of other assets		34			490			29			18			49
Noninterest income on an operating basis (non-GAAP)	$	44,523		$	43,007		$	41,487		$	52,184		$	44,051
Noninterest expense (GAAP)	$	143,602		$	98,970		$	107,335		$	94,049		$	199,169
Less:
Rabbi trust employee benefit expense (income)		2,519			(53	)		2,063			986			2,838
Impairment charge (reversal) on tax credit investments		116			1,133			(1,419	)		—			3,189
Gain on sale of OREO		—			(87	)		—			—			(61	)
Merger and acquisition expenses		30,652			740			3,479			589			90
Settlement and expenses for putative consumer class action matters		—			—			3,325			—			—
Stock donation to the EBF		—			—			—			—			91,287
Noninterest expense on an operating basis (non-GAAP)	$	110,315		$	97,237		$	99,887		$	92,474		$	101,826
Total revenue (GAAP)	$	171,438		$	145,900		$	150,341		$	155,303		$	153,246
Total operating revenue (non-GAAP)	$	169,171		$	147,014		$	147,364		$	153,572		$	149,016
Efficiency ratio (GAAP)		83.76	%		67.83	%		71.39	%		60.56	%		129.97	%
Operating efficiency ratio (non-GAAP)		65.21	%		66.14	%		67.78	%		60.22	%		68.33	%
Noninterest income / total revenue (GAAP)		28.58	%		29.62	%		30.42	%		35.55	%		32.39	%
Noninterest income / total revenue on an operating basis (non-GAAP)		26.32	%		29.25	%		28.15	%		33.98	%		29.56	%

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
	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
(Unaudited, dollars in thousands, except share data)
Tangible shareholders' equity:
Total shareholders' equity (GAAP)	$	3,406,352		$	3,429,292		$	3,430,622		$	3,387,045		$	3,428,052
Less: Goodwill and other intangibles		649,703			379,772			380,402			376,002			376,534
Tangible shareholders' equity (non-GAAP)		2,756,649			3,049,520			3,050,220			3,011,043			3,051,518
Tangible assets:
Total assets (GAAP)		23,512,128			17,461,223			17,047,453			16,726,795			15,964,190
Less: Goodwill and other intangibles		649,703			379,772			380,402			376,002			376,534
Tangible assets (non-GAAP)	$	22,862,425		$	17,081,451		$	16,667,051		$	16,350,793		$	15,587,656
Shareholders' equity to assets ratio (GAAP)		14.49	%		19.64	%		20.12	%		20.25	%		21.47	%
Tangible shareholders' equity to tangible assets ratio (non-GAAP)		12.06	%		17.85	%		18.30	%		18.42	%		19.58	%
Common shares outstanding		186,305,332			186,758,154			186,758,154			186,758,154			186,758,154
Book value per share (GAAP)	$	18.28		$	18.36		$	18.37		$	18.14		$	18.36
Tangible book value per share (non-GAAP)	$	14.80		$	16.33		$	16.33		$	16.12		$	16.34

APPENDIX D: Reconciliation of Non-GAAP Credit Metrics
For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."
	As of
(Unaudited, dollars in thousands)	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Total loans excluding PPP loans:
Total loans (GAAP) (1)	$	12,255,068		$	9,481,458		$	9,591,336		$	9,883,802		$	9,706,989
Less: PPP loans (1)		321,215			514,018			799,964			1,210,598			1,007,487
Total loans excluding PPP loans (non-GAAP)	$	11,933,853		$	8,967,440		$	8,791,372		$	8,673,204		$	8,699,502
Total nonperforming loans (NPLs) (GAAP)	$	34,983		$	42,071		$	41,632		$	43,954		$	43,252
Total NPLs / total loans (GAAP)		0.29	%		0.44	%		0.43	%		0.44	%		0.45	%
Total NPLs / total loans (excl. PPP loans) (non-GAAP)		0.29	%		0.47	%		0.47	%		0.51	%		0.50	%
Allowance for loan losses (ALLL) (GAAP)	$	97,787		$	103,398		$	105,637		$	111,080		$	113,031
ALLL / total loans (GAAP)		0.80	%		1.09	%		1.10	%		1.12	%		1.16	%
ALLL / total loans (excl. PPP loans) (non-GAAP)		0.82	%		1.15	%		1.20	%		1.28	%		1.30	%
	As of and for the three months ended
(Unaudited, dollars in thousands)	Dec 31, 2021			Sep 30, 2021			Jun 30, 2021			Mar 31, 2021			Dec 31, 2020
Average total loans excluding PPP Loans:
Average total loans (GAAP)	$	10,946,095		$	9,528,522		$	9,796,701		$	9,816,788		$	9,796,697
Less: Average PPP loans		419,894			649,443			1,073,688			1,131,516			1,076,155
Average total loans excluding PPP loans (non-GAAP)	$	10,526,201		$	8,879,079		$	8,723,013		$	8,685,272		$	8,720,542
Total net loans charged-off (NCOs) (GAAP)	$	1,293		$	751		$	2,143		$	1,371		$	3,301
NCOs / Average total loans (GAAP) (2)		0.05	%		0.03	%		0.09	%		0.06	%		0.13	%
NCOs / Average total loans (excl. PPP loans) (non-GAAP) (2)		0.05	%		0.03	%		0.10	%		0.06	%		0.15	%
(1) Includes unamortized premiums, net of unearned discounts and deferred fees.
(2) Presented on an annualized basis.

APPENDIX E: Reconciliation of Non-GAAP Core Margin
For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."
	As of and for the three months ended
	Dec 31, 2021									Sep 30, 2021
(Unaudited, dollars in thousands)	Volume			Interest			Margin Impact (1)			Volume			Interest			Margin Impact (1)
Reported total average interest-earning assets, net interest income, and net interest margin (2)	$	19,484,101		$	124,648		2.54	%		$	16,282,183		$	104,007		2.53	%
Non-GAAP adjustments:
PPP loan volume earning 1%		(419,894	)		(1,060	)	0.03	%			(649,443	)		(1,688	)	0.06	%
PPP loan fee accretion, net of deferred origination cost amortization		—			(10,755	)	(0.22	)%			—			(5,913	)	(0.14	)%
Excess cash (3)		(811,541	)		(307	)	0.10	%			(1,178,275	)		(445	)	0.19	%
Core margin (Non-GAAP) (4)	$	18,252,666		$	112,526		2.45	%		$	14,454,465		$	95,961		2.63	%
Core margin change from prior quarter							(0.18	)%								(0.17	)%
	Jun 30, 2021									Mar 31, 2021
	Volume			Interest			Margin Impact (1)			Volume			Interest			Margin Impact (1)
Reported total average interest-earning assets, net interest income, and net interest margin (2)	$	15,759,132		$	105,877		2.69	%		$	15,188,879		$	101,388		2.71	%
Non-GAAP adjustments:
PPP loan volume earning 1%		(1,073,688	)		(2,742	)	0.12	%			(1,131,516	)		(2,887	)	0.13	%
PPP loan fee accretion, net of deferred origination cost amortization		—			(9,258	)	(0.24	)%			—			(8,339	)	(0.22	)%
Excess cash (3)		(1,302,558	)		(357	)	0.23	%			(1,436,783	)		(354	)	0.27	%
Core margin (Non-GAAP) (4)	$	13,382,886		$	93,520		2.80	%		$	12,620,580		$	89,808		2.89	%
Core margin change from prior quarter							(0.09	)%
(1) Presented on an annualized basis.
(2) Presented on a fully taxable equivalent basis.
(3) Consists of cash above 2% of average total earning assets at a yield of 0.15% for the three months ended December 31, 2021 and September 30, 2021, 0.11% for the three months ended June 30, 2021 and 0.10% for the three months ended March 31, 2021.
(4) Core margin is the margin that results from the combined volume and interest adjustments taken together.

APPENDIX F: COVID-19 Related Loan Modifications
		Remaining COVID-19 Modifications as of June 30, 2021 (1)					Remaining COVID-19 Modifications as of September 30, 2021 (1)					Remaining COVID-19 Modifications as of December 31, 2021 (1)
(Dollars in thousands)		Remaining Modifications		% of Total Loan Balance			Remaining Modifications		% of Total Loan Balance			Remaining Modifications		% of Total Loan Balance
Portfolio
Commercial and industrial		$	18,850	1.1	%		$	4,548	0.3	%		$	4,548	0.2	%
Commercial real estate			113,301	3.0	%			92,377	2.4	%			93,519	2.1	%
Commercial construction			—	—	%			—	—	%			—	—	%
Business banking			2,102	0.2	%			2,164	0.2	%			649	0.1	%
Residential real estate			13,428	0.9	%			9,947	0.7	%			5,870	0.3	%
Consumer home equity			1,124	0.1	%			875	0.1	%			1,365	0.1	%
Other consumer			999	0.4	%			685	0.3	%			706	0.3	%
Total		$	149,804	1.6	%		$	110,596	1.2	%		$	106,657	0.9	%
(1) Remaining COVID-19 modifications reflect those loans which underwent a modification and have not yet resumed payment. The Company defines a modified loan to have resumed payment if it is one month past the modification end date and not more than 30 days past due. These modifications with active deferrals met the criteria of either Section 4013 of the CARES Act or the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) and therefore are not deemed troubled debt restructurings.

APPENDIX G: Organic Loan Growth
(Unaudited, dollars in thousands)	Dec 31, 2021			Sep 30, 2021			Century Acquired Balance (1)			Organic △ $				Organic △ %
Loans:
Commercial and industrial	$	2,960,527		$	1,652,447		$	1,405,127		$	(97,047	)		(5.9	)%
Commercial real estate		4,522,513			3,825,186			606,139			91,188			2.4	%
Commercial construction		222,328			243,146			2,647			(23,465	)		(9.7	)%
Business banking		1,334,694			1,225,538			240,703			(131,547	)		(10.7	)%
Total commercial loans		9,040,062			6,946,317			2,254,616			(160,871	)		(2.3	)%
Less: PPP loans		331,385			533,965			73,734			(276,314	)		(51.7	)%
Total commercial loans excl. PPP loans		8,708,677			6,412,352			2,180,882			115,443			1.8	%
Residential real estate		1,926,810			1,491,269			418,119			17,422			1.2	%
Consumer home equity		1,100,153			848,570			237,522			14,061			1.7	%
Other consumer		214,485			218,406			9,429			(13,350	)		(6.1	)%
Total loans	$	12,281,510		$	9,504,562		$	2,919,686		$	(142,738	)		(1.5	)%
Less: PPP loans	$	331,385		$	533,965		$	73,734		$	(276,314	)		(51.7	)%
Total loans excl. PPP loans		11,950,125			8,970,597			2,845,952			133,576			1.5	%
(1) Unpaid principal balances at time of merger.

APPENDIX H: Century Merger & Acquisition Expenses
	Three months ended			Twelve months ended
(Unaudited, dollars in thousands)	Dec 31, 2021
Salaries and employee benefits	$	15,942		$	15,947
Office occupancy and equipment		7,112			7,198
Data processing		147			1,286
Professional services		5,699			9,223
Other		1,752			1,802
Total	$	30,652		$	35,456

APPENDIX I: Tangible Shareholders’ Equity Roll Forward Analysis
	As of							Dec 31, 2021 change from
	Dec 31, 2021			Sep 30, 2021				Sep 30, 2021
(Unaudited, dollars in thousands, except per share amounts)
Common stock	$	1,863		$	1,868			$	(5	)
Additional paid in capital		1,835,241			1,857,165				(21,924	)
Unallocated ESOP common stock		(142,709	)		(143,966	)			1,257
Retained earnings		1,768,653			1,747,300				21,353
AOCI, net of tax - available for sale securities		(58,586	)		(25,414	)			(33,172	)
AOCI, net of tax - pension		(5,471	)		(19,975	)			14,504
AOCI, net of tax - cash flow hedge		7,361			12,314				(4,953	)
Total shareholders' equity:	$	3,406,352		$	3,429,292			$	(22,940	)
Less: Goodwill and other intangibles		649,703			379,772				269,931
Tangible shareholders' equity (non-GAAP)	$	2,756,649		$	3,049,520			$	(292,871	)
Common shares outstanding		186,305,332			186,758,154				(452,822	)
Per share:
Common stock	$	0.01		$	0.01			$	—
Additional paid in capital		9.85			9.94				(0.09	)
Unallocated ESOP common stock		(0.77	)		(0.77	)			—
Retained earnings		9.49			9.36				0.14
AOCI, net of tax - available for sale securities		(0.31	)		(0.14	)			(0.18	)
AOCI, net of tax - pension		(0.03	)		(0.11	)			0.08
AOCI, net of tax - cash flow hedge		0.04			0.07				(0.03	)
Total shareholders' equity:	$	18.28		$	18.36			$	(0.08	)
Less: Goodwill and other intangibles		3.49			2.03				1.45
Tangible shareholders' equity (non-GAAP)	$	14.80		$	16.33			$	(1.53	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220127005758/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

Source: Eastern Bank

FAQ

What are the Q4 2021 earnings for Eastern Bankshares (EBC)?

Eastern Bankshares reported a Q4 2021 net income of $35.1 million.

How much was the increase in Eastern Bankshares' dividend?

The quarterly dividend increased by 25% to $0.10 per share.

What was the impact of the Century Bancorp merger on EBC's financials?

The merger added approximately $7 billion in assets, contributing to strong loan and deposit growth.

What were the total loans and deposits reported by Eastern Bankshares in Q4 2021?

Total loans reached $12.3 billion and total deposits were $19.6 billion.

When will the increased dividend be paid to shareholders?

The increased dividend will be payable on March 15, 2022, to shareholders of record by March 3, 2022.