Eastern Bankshares, Inc. Reports Fourth Quarter 2023 Financial Results
- None.
- None.
Insights
The asset sale of Eastern Insurance Group LLC to Arthur J. Gallagher & Co. for $515 million and the subsequent after-tax gain of $294.5 million is a significant transaction that has bolstered Eastern Bankshares' capital position. This strategic move has implications for liquidity management and capital adequacy, two critical aspects that financial analysts scrutinize. The capital generated from this sale enhances the company's ability to navigate interest rate changes and macroeconomic challenges, as highlighted by CEO Bob Rivers. The sale proceeds have also facilitated a reduction in wholesale funding, which is often more expensive than core deposits, thereby potentially improving the net interest margin over time.
Another key point is the impending merger with Cambridge Bancorp, indicating a strategic expansion that could lead to synergies and an expanded market presence. The growth in core deposits by 3.0% and the modest increase in total loans by 0.4% suggest a stable deposit base and lending growth, which are positive indicators for future revenue streams. The full-year net charge-offs at 0.09% and nonperforming loans at 0.38% of total loans are within acceptable risk parameters, indicating sound asset quality and credit management practices.
Eastern Bankshares' decision to sell its insurance operations and focus on its core banking business, including a merger with Cambridge Bancorp, reflects a strategic repositioning within the financial services industry. This move enables Eastern Bankshares to concentrate on its core competencies and potentially gain a competitive edge in its market. The increase in shareholder equity and the reported net income of $318.5 million for the fourth quarter, which is significantly higher than the previous quarter's $59.1 million, are poised to attract investor attention.
Furthermore, the company's ability to maintain a stable net interest margin amidst a challenging interest rate environment is noteworthy. The slight decrease in net interest income could be attributed to increased funding costs, which have been a concern for many financial institutions during periods of rising interest rates. The company's proactive management of its securities portfolio and the strategic sale of the insurance arm may mitigate some of these pressures.
Eastern Bankshares' actions are reflective of a broader trend in the banking sector where institutions are streamlining operations to adapt to an evolving economic landscape marked by higher interest rates and shifting customer deposit preferences. The reduction in wholesale funding and the increase in core deposits indicate a shift towards more stable and cost-effective funding sources. This strategy is particularly prudent in an environment where the Federal Reserve is likely to continue adjusting interest rates to manage inflation.
The increase in FDIC insurance expense by $10.7 million due to the special assessment reflects external economic pressures on the banking industry, following the closures of certain banks in 2023. This expense highlights the importance of maintaining strong deposit insurance funds to safeguard the financial system. The strategic repositioning by Eastern Bankshares may serve as a cushion against such systemic risks and contribute to the overall stability of the institution.
~ Earnings, Capital, and Liquidity Enhancements Resulting from Eastern Insurance Group LLC Asset Sale ~
~ Growth in Core Deposits and Reduction in Wholesale Funding ~
On October 31, 2023, the Company completed the sale of the insurance operations of Eastern Insurance Group, LLC (“Eastern Insurance”), to Arthur J. Gallagher & Co. (“Gallagher”) for gross consideration of
"2023 was a year of strategic repositioning for Eastern,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “We realized early in 2023 that all banks were going to face significant challenges due to higher interest rates, changing customer deposit preferences and a very difficult macroeconomic environment. We responded by repositioning our securities portfolio in the first quarter, which allowed us to improve both our liquidity and earnings outlook, and followed with the sale of Eastern Insurance in the second half of the year to capitalize on the valuation premium it commanded. The insurance transaction provided us additional liquidity and capital, and positioned us to announce our merger with Cambridge Bancorp, a highly attractive in-market merger partner with a valuable wealth management business. We are very confident that these transactions provide us with a greater financial foundation, stronger earnings for our shareholders, and a leading market share in our footprint. The upcoming merger is the next step in our journey and we all look forward to welcoming the colleagues and customers of Cambridge Trust to Eastern.”
FINANCIAL HIGHLIGHTS FOR THE FOURTH QUARTER OF 2023
-
Completed the sale of Eastern Insurance to Gallagher for cash consideration of
$515 million $294.5 million -
Net income of
$318.5 million $1.95 $59.1 million $0.36 -
Operating net income*, which excludes the revenues, expenses, and tax provision of discontinued operations, of
$16.9 million $0.10 $10.8 million -
Total deposits increased
$172.0 million $17.6 billion $516.2 million 3.0% from the prior quarter. -
Total loans increased
$54.2 million $14.0 billion -
The net interest margin on a fully tax equivalent (“FTE”) basis* of
2.69% was 8 basis points lower than the prior quarter but trend is stabilizing. -
Borrowings and brokered deposits of less than
1% of total assets as of December 31, 2023. -
Annualized net charge-offs ("NCOs") of
0.32% in the fourth quarter and0.09% for full year 2023 and nonperforming loans ("NPLs") of$52.6 million 0.38% of total loans as of December 31, 2023.
BALANCE SHEET
Total assets were
-
Cash and equivalents increased
$84.3 million $693.1 million -
Total securities increased
$139.8 million 3% , from the prior quarter, to$4.9 billion -
Loans totaled
$14.0 billion $54.2 million 0.4% , from the prior quarter. -
Deposits totaled
$17.6 billion $172.0 million 1.0% , from the prior quarter, driven primarily by an increase of$516.2 million 3.0% , in core deposits. This was partially offset by a decrease of$344.1 million -
Borrowed funds decreased
$667.2 million $48.2 million -
Shareholders’ equity was
$3.0 billion $528.3 million -
At December 31, 2023, book value per share was
$16.86 $13.65
NET INTEREST INCOME
Net interest income was
- The decrease in net interest income on a consecutive quarter basis was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs.
-
The net interest margin on a FTE basis* was
2.69% for the fourth quarter, representing an 8 basis point decrease from the prior quarter. -
Total interest-earning asset yields increased 1 basis point from the prior quarter to
4.06% , due to increased residential loan, consumer loan and short-term investment yields as a result of higher interest rates throughout the quarter, partially offset by decreased commercial loan yield. The prior quarter’s commercial loan yield benefited from$2.6 million -
Total interest-bearing liabilities cost increased 20 basis points from the prior quarter to
2.19% , due primarily to higher deposit costs resulting from deposit pricing increases and deposit mix shifts. -
The net interest margin for the fourth quarter included a partial quarter benefit from the proceeds of the insurance transaction, which was completed on October 31, 2023. The proceeds, in part, allowed the Company to reduce brokered deposits and borrowings to less than
1% of total assets.
NONINTEREST INCOME
Noninterest income, which excludes revenues from discontinued operations, was
-
Service charges on deposit accounts increased
$0.1 million $7.5 million -
Trust and investment advisory fees decreased
$0.1 million $6.1 million -
Debit card processing fees were unchanged at
$3.4 million -
Loan-level interest rate swap income decreased
$2.3 million $0.6 million -
Income from investments held in rabbi trust accounts was
$5.0 million $1.5 million -
In the fourth quarter, losses on the sale of commercial and industrial loans totaled
$0.1 million $2.7 million -
Other noninterest income increased
$0.8 million $5.6 million
NONINTEREST EXPENSE
Noninterest expense, which excludes expenses from discontinued operations, was
-
Salaries and employee benefits expense was
$67.8 million $6.9 million -
Office occupancy and equipment expense was
$9.2 million $0.6 million -
Data processing expense was
$16.8 million $3.3 million $1.4 million -
Professional services expense was
$4.1 million $3.0 million $3.2 million -
Marketing expense was
$2.7 million $0.9 million -
Loan expenses were
$1.2 million $0.1 million -
Federal Deposit Insurance Corporation (“FDIC”) insurance expense was
$13.5 million $10.7 million -
Other noninterest expense was
$5.3 million $0.1 million
INCOME TAXES
The income tax expense for the fourth quarter was
ASSET QUALITY
The allowance for loan losses was
Non-performing loans totaled
Please refer to the investor presentation for a review of the Company’s office-related commercial real estate exposure.
DIVIDENDS AND SHARE REPURCHASES
The Company’s Board of Directors has declared a quarterly cash dividend of
The Company did not repurchase any shares of its common stock during the fourth quarter of 2023.
CONFERENCE CALL AND PRESENTATION INFORMATION
A conference call and webcast covering Eastern’s fourth quarter 2023 earnings will be held on Friday, January 26, 2024 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (888) 259-6580 from within the
ABOUT EASTERN BANKSHARES, INC.
Eastern Bankshares, Inc. is the stock holding company for Eastern Bank. Founded in 1818,
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 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. 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 tangible assets, tangible shareholders’ equity, average tangible shareholders’ equity, tangible book value per share, the ratio of tangible shareholders’ equity to tangible assets including the impact of mark-to-market adjustments on held-to-maturity securities, 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, 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”, “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 completion and/or implementation of the merger with Cambridge, including risks that required regulatory, shareholder or other approvals for the merger are not obtained or other closing conditions are not satisfied in a timely manner or at all and that the merger fails to occur in the timeframe expected or at all; prior to the completion of the merger or thereafter, Cambridge or the Company may not perform as expected due to transaction-related uncertainty or other factors; and 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; 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 subsidiary 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; and operational risks such as cybersecurity incidents, natural disasters, and pandemics, including COVID-19. For further discussion of such factors, please see the Company’s most recent Annual Report on Form 10-K and subsequent filings with the
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.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
In connection with the proposed merger transaction, on January 16, 2024, the Company filed with the SEC a Registration Statement on Form S-4 and a Joint Proxy Statement of the Company and Cambridge and a Prospectus of the Company (the “joint proxy statement/prospectus”), as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF THE COMPANY AND CAMBRIDGE ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION AND EACH OTHER RELEVANT DOCUMENT FILED WITH THE SEC, AS WELL AS ANY AMENDMENT OR SUPPLEMENT TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about the Company and Cambridge, can be obtained without charge, at the SEC’s website (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to the Company’s Investor Relations team via email at InvestorRelations@easternbank.com or by telephone at (781) 598-7920, or to Cambridge Investor Relations via email at InvestorRelations@cambridgetrust.com or by telephone at (617) 520-5520.
PARTICIPANTS IN THE SOLICITATION
The Company, Cambridge, and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of the Company and/or Cambridge in connection with the proposed transaction under the rules of the SEC. Information regarding the Company’s directors and executive officers is available in its definitive proxy statement relating to its 2023 Annual Meeting of Shareholders, which was filed with the SEC on April 3, 2023, and its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Commission on February 24, 2023, and other documents filed by the Company with the SEC. Information regarding Cambridge’s directors and executive officers is available in its definitive proxy statement relating to its 2023 Annual Meeting of Shareholders, which was filed with the SEC on March 16, 2023, the joint proxy statement/prospectus and other documents filed by Cambridge with the SEC. Information regarding the participants in the proxy solicitation and a description of their interests included in the joint proxy statement/prospectus and other relevant materials filed with the SEC may be obtained free of charge as described in the preceding paragraph.
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 data) |
Dec 31, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
|
|
|
|
|
|
||||||||||
Earnings data |
|
|
|
|
|
||||||||||
Net interest income |
$ |
133,307 |
|
$ |
137,205 |
|
$ |
141,588 |
|
$ |
138,309 |
|
$ |
149,994 |
|
Noninterest income (loss) |
|
26,739 |
|
|
19,157 |
|
|
26,204 |
|
|
(309,853 |
) |
|
22,425 |
|
Total revenue |
|
160,046 |
|
|
156,362 |
|
|
167,792 |
|
|
(171,544 |
) |
|
172,419 |
|
Noninterest expense |
|
121,029 |
|
|
101,748 |
|
|
99,934 |
|
|
95,891 |
|
|
112,583 |
|
Pre-tax, pre-provision income (loss) |
|
39,017 |
|
|
54,614 |
|
|
67,858 |
|
|
(267,435 |
) |
|
59,836 |
|
Provision for allowance for loan losses |
|
5,198 |
|
|
7,328 |
|
|
7,501 |
|
|
25 |
|
|
10,880 |
|
Pre-tax income (loss) |
|
33,819 |
|
|
47,286 |
|
|
60,357 |
|
|
(267,460 |
) |
|
48,956 |
|
Net income (loss) from continuing operations |
|
31,509 |
|
|
63,464 |
|
|
44,419 |
|
|
(202,081 |
) |
|
40,918 |
|
Net income (loss) from discontinued operations |
|
286,994 |
|
|
(4,351 |
) |
|
4,238 |
|
|
7,985 |
|
|
1,376 |
|
Net income (loss) |
|
318,503 |
|
|
59,113 |
|
|
48,657 |
|
|
(194,096 |
) |
|
42,294 |
|
Operating net income (non-GAAP) |
|
16,875 |
|
|
52,085 |
|
|
41,092 |
|
|
53,134 |
|
|
48,570 |
|
|
|
|
|
|
|
||||||||||
Per-share data |
|
|
|
|
|
||||||||||
Earnings (losses) per share, diluted |
$ |
1.95 |
|
$ |
0.36 |
|
$ |
0.30 |
|
$ |
(1.20 |
) |
$ |
0.26 |
|
Continuing operations |
$ |
0.19 |
|
$ |
0.39 |
|
$ |
0.27 |
|
$ |
(1.25 |
) |
$ |
0.25 |
|
Discontinued operations |
$ |
1.76 |
|
$ |
(0.03 |
) |
$ |
0.03 |
|
$ |
0.05 |
|
$ |
0.01 |
|
Operating earnings per share, diluted (non-GAAP) |
$ |
0.10 |
|
$ |
0.32 |
|
$ |
0.25 |
|
$ |
0.33 |
|
$ |
0.30 |
|
Book value per share |
$ |
16.86 |
|
$ |
13.87 |
|
$ |
14.33 |
|
$ |
14.63 |
|
$ |
14.03 |
|
Tangible book value per share (non-GAAP) |
$ |
13.65 |
|
$ |
10.14 |
|
$ |
10.59 |
|
$ |
10.88 |
|
$ |
10.28 |
|
|
|
|
|
|
|
||||||||||
Profitability |
|
|
|
|
|
||||||||||
Return on average assets (2) |
|
0.59 |
% |
|
1.18 |
% |
|
0.81 |
% |
|
(3.64 |
)% |
|
0.73 |
% |
Operating return on average assets (non-GAAP) (2) |
|
0.31 |
% |
|
0.97 |
% |
|
0.75 |
% |
|
0.95 |
% |
|
0.86 |
% |
Return on average shareholders' equity (2) |
|
4.66 |
% |
|
9.91 |
% |
|
6.85 |
% |
|
(33.31 |
)% |
|
6.71 |
% |
Operating return on average shareholders' equity (2) |
|
2.51 |
% |
|
8.14 |
% |
|
6.34 |
% |
|
8.76 |
% |
|
7.96 |
% |
Return on average tangible shareholders' equity (non-GAAP) (2) |
|
5.99 |
% |
|
13.38 |
% |
|
9.19 |
% |
|
(45.55 |
)% |
|
9.23 |
% |
Operating return on average tangible shareholders' equity (non-GAAP) (2) |
|
3.20 |
% |
|
10.99 |
% |
|
8.50 |
% |
|
11.98 |
% |
|
10.95 |
% |
Net interest margin (FTE) (2) |
|
2.69 |
% |
|
2.77 |
% |
|
2.80 |
% |
|
2.66 |
% |
|
2.81 |
% |
Cost of deposits (2) |
|
1.51 |
% |
|
1.33 |
% |
|
1.22 |
% |
|
0.92 |
% |
|
0.37 |
% |
Efficiency ratio |
|
75.62 |
% |
|
65.07 |
% |
|
59.56 |
% |
|
(55.90 |
)% |
|
65.30 |
% |
Operating efficiency ratio (non-GAAP) |
|
73.59 |
% |
|
60.83 |
% |
|
58.47 |
% |
|
57.97 |
% |
|
57.26 |
% |
|
|
|
|
|
|
||||||||||
Balance Sheet (end of period) |
|
|
|
|
|
||||||||||
Total assets |
$ |
21,133,278 |
|
$ |
21,146,292 |
|
$ |
21,583,493 |
|
$ |
22,720,530 |
|
$ |
22,646,858 |
|
Total loans |
|
13,973,428 |
|
|
13,919,275 |
|
|
13,961,878 |
|
|
13,675,250 |
|
|
13,575,531 |
|
Total deposits |
|
17,596,217 |
|
|
17,424,169 |
|
|
18,180,972 |
|
|
18,541,580 |
|
|
18,974,359 |
|
Total loans / total deposits |
|
79 |
% |
|
80 |
% |
|
77 |
% |
|
74 |
% |
|
72 |
% |
|
|
|
|
|
|
||||||||||
Asset quality |
|
|
|
|
|
||||||||||
Allowance for loan losses ("ALLL") |
$ |
148,993 |
|
$ |
155,146 |
|
$ |
147,955 |
|
$ |
140,938 |
|
$ |
142,211 |
|
ALLL / total nonperforming loans ("NPLs") |
|
283.49 |
% |
|
326.86 |
% |
|
484.18 |
% |
|
407.65 |
% |
|
368.38 |
% |
Total NPLs / total loans |
|
0.38 |
% |
|
0.34 |
% |
|
0.22 |
% |
|
0.25 |
% |
|
0.28 |
% |
Net charge-offs ("NCOs") / average total loans (2) |
|
0.32 |
% |
|
0.00 |
% |
|
0.01 |
% |
|
0.00 |
% |
|
0.01 |
% |
|
|
|
|
|
|
||||||||||
Capital adequacy |
|
|
|
|
|
||||||||||
Shareholders' equity / assets |
|
14.08 |
% |
|
11.57 |
% |
|
11.71 |
% |
|
11.35 |
% |
|
10.91 |
% |
Tangible shareholders' equity / tangible assets (non-GAAP) |
|
11.71 |
% |
|
8.73 |
% |
|
8.93 |
% |
|
8.70 |
% |
|
8.24 |
% |
|
|
|
|
|
|
||||||||||
(1) Average assets, average shareholders' equity and average tangible shareholders' equity components presented in this table include discontinued operations. |
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(2) Presented on an annualized basis. |
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EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS |
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|
As of |
|
Dec 31, 2023 change from |
||||||||||||||||||
(Unaudited, dollars in thousands) |
Dec 31, 2023 |
Sep 30, 2023 |
Dec 31, 2022 |
|
Sep 30, 2023 |
|
Dec 31, 2022 |
||||||||||||||
ASSETS |
|
|
|
|
△ $ |
△ % |
|
△ $ |
△ % |
||||||||||||
Cash and due from banks |
$ |
87,233 |
|
$ |
72,689 |
|
$ |
106,040 |
|
|
$ |
14,544 |
|
20 |
% |
|
$ |
(18,807 |
) |
(18 |
)% |
Short-term investments |
|
605,843 |
|
|
536,119 |
|
|
63,465 |
|
|
|
69,724 |
|
13 |
% |
|
|
542,378 |
|
855 |
% |
Cash and cash equivalents |
|
693,076 |
|
|
608,808 |
|
|
169,505 |
|
|
|
84,268 |
|
14 |
% |
|
|
523,571 |
|
309 |
% |
Available for sale ("AFS") securities |
|
4,407,521 |
|
|
4,261,518 |
|
|
6,690,778 |
|
|
|
146,003 |
|
3 |
% |
|
|
(2,283,257 |
) |
(34 |
)% |
Held to maturity ("HTM") securities |
|
449,721 |
|
|
455,900 |
|
|
476,647 |
|
|
|
(6,179 |
) |
(1 |
)% |
|
|
(26,926 |
) |
(6 |
)% |
Total securities |
|
4,857,242 |
|
|
4,717,418 |
|
|
7,167,425 |
|
|
|
139,824 |
|
3 |
% |
|
|
(2,310,183 |
) |
(32 |
)% |
Loans held for sale |
|
1,124 |
|
|
23,892 |
|
|
4,543 |
|
|
|
(22,768 |
) |
(95 |
)% |
|
|
(3,419 |
) |
(75 |
)% |
Loans: |
|
|
|
|
|
|
|
|
|
||||||||||||
Commercial and industrial |
|
3,034,068 |
|
|
3,087,509 |
|
|
3,150,946 |
|
|
|
(53,441 |
) |
(2 |
)% |
|
|
(116,878 |
) |
(4 |
)% |
Commercial real estate |
|
5,457,349 |
|
|
5,396,912 |
|
|
5,155,323 |
|
|
|
60,437 |
|
1 |
% |
|
|
302,026 |
|
6 |
% |
Commercial construction |
|
386,999 |
|
|
382,615 |
|
|
336,276 |
|
|
|
4,384 |
|
1 |
% |
|
|
50,723 |
|
15 |
% |
Business banking |
|
1,085,763 |
|
|
1,087,799 |
|
|
1,090,492 |
|
|
|
(2,036 |
) |
— |
% |
|
|
(4,729 |
) |
— |
% |
Total commercial loans |
|
9,964,179 |
|
|
9,954,835 |
|
|
9,733,037 |
|
|
|
9,344 |
|
— |
% |
|
|
231,142 |
|
2 |
% |
Residential real estate |
|
2,565,485 |
|
|
2,550,861 |
|
|
2,460,849 |
|
|
|
14,624 |
|
1 |
% |
|
|
104,636 |
|
4 |
% |
Consumer home equity |
|
1,208,231 |
|
|
1,193,859 |
|
|
1,187,547 |
|
|
|
14,372 |
|
1 |
% |
|
|
20,684 |
|
2 |
% |
Other consumer |
|
235,533 |
|
|
219,720 |
|
|
194,098 |
|
|
|
15,813 |
|
7 |
% |
|
|
41,435 |
|
21 |
% |
Total loans |
|
13,973,428 |
|
|
13,919,275 |
|
|
13,575,531 |
|
|
|
54,153 |
|
— |
% |
|
|
397,897 |
|
3 |
% |
Allowance for loan losses |
|
(148,993 |
) |
|
(155,146 |
) |
|
(142,211 |
) |
|
|
6,153 |
|
(4 |
)% |
|
|
(6,782 |
) |
5 |
% |
Unamortized prem./disc. and def. fees |
|
(25,068 |
) |
|
(19,307 |
) |
|
(13,003 |
) |
|
|
(5,761 |
) |
30 |
% |
|
|
(12,065 |
) |
93 |
% |
Net loans |
|
13,799,367 |
|
|
13,744,822 |
|
|
13,420,317 |
|
|
|
54,545 |
|
— |
% |
|
|
379,050 |
|
3 |
% |
Federal Home Loan Bank stock, at cost |
|
5,904 |
|
|
37,125 |
|
|
41,363 |
|
|
|
(31,221 |
) |
(84 |
)% |
|
|
(35,459 |
) |
(86 |
)% |
Premises and equipment |
|
60,133 |
|
|
59,033 |
|
|
62,493 |
|
|
|
1,100 |
|
2 |
% |
|
|
(2,360 |
) |
(4 |
)% |
Bank-owned life insurance |
|
164,702 |
|
|
163,700 |
|
|
160,790 |
|
|
|
1,002 |
|
1 |
% |
|
|
3,912 |
|
2 |
% |
Goodwill and other intangibles, net |
|
566,205 |
|
|
566,709 |
|
|
568,009 |
|
|
|
(504 |
) |
— |
% |
|
|
(1,804 |
) |
— |
% |
Deferred income taxes, net |
|
266,185 |
|
|
416,081 |
|
|
331,963 |
|
|
|
(149,896 |
) |
(36 |
)% |
|
|
(65,778 |
) |
(20 |
)% |
Prepaid expenses |
|
183,073 |
|
|
156,113 |
|
|
165,368 |
|
|
|
26,960 |
|
17 |
% |
|
|
17,705 |
|
11 |
% |
Other assets |
|
536,267 |
|
|
527,873 |
|
|
426,863 |
|
|
|
8,394 |
|
2 |
% |
|
|
109,404 |
|
26 |
% |
Assets of discontinued operations |
|
— |
|
|
124,718 |
|
|
128,219 |
|
|
|
(124,718 |
) |
(100 |
)% |
|
|
(128,219 |
) |
(100 |
)% |
Total assets |
$ |
21,133,278 |
|
$ |
21,146,292 |
|
$ |
22,646,858 |
|
|
$ |
(13,014 |
) |
— |
% |
|
$ |
(1,513,580 |
) |
(7 |
)% |
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
|
||||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
||||||||||||
Demand |
$ |
5,162,218 |
|
$ |
5,177,015 |
|
$ |
6,240,637 |
|
|
$ |
(14,797 |
) |
— |
% |
|
$ |
(1,078,419 |
) |
(17 |
)% |
Interest checking accounts |
|
3,737,361 |
|
|
3,671,871 |
|
|
4,568,122 |
|
|
|
65,490 |
|
2 |
% |
|
|
(830,761 |
) |
(18 |
)% |
Savings accounts |
|
1,323,126 |
|
|
1,393,545 |
|
|
1,831,123 |
|
|
|
(70,419 |
) |
(5 |
)% |
|
|
(507,997 |
) |
(28 |
)% |
Money market investment |
|
4,664,475 |
|
|
4,709,149 |
|
|
4,710,095 |
|
|
|
(44,674 |
) |
(1 |
)% |
|
|
(45,620 |
) |
(1 |
)% |
Certificates of deposit |
|
2,709,037 |
|
|
2,472,589 |
|
|
1,624,382 |
|
|
|
236,448 |
|
10 |
% |
|
|
1,084,655 |
|
67 |
% |
Total deposits |
|
17,596,217 |
|
|
17,424,169 |
|
|
18,974,359 |
|
|
|
172,048 |
|
1 |
% |
|
|
(1,378,142 |
) |
(7 |
)% |
Borrowed funds: |
|
|
|
|
|
|
|
|
|
||||||||||||
Federal Home Loan Bank advances |
|
17,738 |
|
|
673,525 |
|
|
704,084 |
|
|
|
(655,787 |
) |
(97 |
)% |
|
|
(686,346 |
) |
(97 |
)% |
Escrow deposits of borrowers |
|
21,978 |
|
|
24,947 |
|
|
22,314 |
|
|
|
(2,969 |
) |
(12 |
)% |
|
|
(336 |
) |
(2 |
)% |
Interest rate swap collateral funds |
|
8,500 |
|
|
16,900 |
|
|
14,430 |
|
|
|
(8,400 |
) |
(50 |
)% |
|
|
(5,930 |
) |
(41 |
)% |
Total borrowed funds |
|
48,216 |
|
|
715,372 |
|
|
740,828 |
|
|
|
(667,156 |
) |
(93 |
)% |
|
|
(692,612 |
) |
(93 |
)% |
Other liabilities |
|
513,990 |
|
|
525,378 |
|
|
424,951 |
|
|
|
(11,388 |
) |
(2 |
)% |
|
|
89,039 |
|
21 |
% |
Liabilities of discontinued operations |
|
— |
|
|
34,820 |
|
|
34,930 |
|
|
|
(34,820 |
) |
(100 |
)% |
|
|
(34,930 |
) |
(100 |
)% |
Total liabilities |
|
18,158,423 |
|
|
18,699,739 |
|
|
20,175,068 |
|
|
|
(541,316 |
) |
(3 |
)% |
|
|
(2,016,645 |
) |
(10 |
)% |
Shareholders' equity: |
|
|
|
|
|
|
|
|
|
||||||||||||
Common shares |
|
1,767 |
|
|
1,766 |
|
|
1,762 |
|
|
|
1 |
|
— |
% |
|
|
5 |
|
— |
% |
Additional paid-in capital |
|
1,666,441 |
|
|
1,661,136 |
|
|
1,649,141 |
|
|
|
5,305 |
|
— |
% |
|
|
17,300 |
|
1 |
% |
Unallocated common shares held by the employee stock ownership plan ("ESOP") |
|
(132,755 |
) |
|
(133,992 |
) |
|
(137,696 |
) |
|
|
1,237 |
|
(1 |
)% |
|
|
4,941 |
|
(4 |
)% |
Retained earnings |
|
2,047,754 |
|
|
1,747,225 |
|
|
1,881,775 |
|
|
|
300,529 |
|
17 |
% |
|
|
165,979 |
|
9 |
% |
Accumulated other comprehensive income ("AOCI"), net of tax |
|
(608,352 |
) |
|
(829,582 |
) |
|
(923,192 |
) |
|
|
221,230 |
|
(27 |
)% |
|
|
314,840 |
|
(34 |
)% |
Total shareholders' equity |
|
2,974,855 |
|
|
2,446,553 |
|
|
2,471,790 |
|
|
|
528,302 |
|
22 |
% |
|
|
503,065 |
|
20 |
% |
Total liabilities and shareholders' equity |
$ |
21,133,278 |
|
$ |
21,146,292 |
|
$ |
22,646,858 |
|
|
$ |
(13,014 |
) |
— |
% |
|
$ |
(1,513,580 |
) |
(7 |
)% |
EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||||||||
|
Three months ended |
|
Three months ended Dec 31, 2023 change from three months ended |
||||||||||||||||||
(Unaudited, dollars in thousands, except per-share data) |
Dec 31, 2023 |
Sep 30, 2023 |
Dec 31, 2022 |
|
Sep 30, 2023 |
|
Dec 31, 2022 |
||||||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||||
Interest and dividend income: |
|
|
|
|
△ $ |
△ % |
|
△ $ |
△ % |
||||||||||||
Interest and fees on loans |
$ |
168,419 |
|
$ |
169,274 |
|
$ |
142,446 |
|
|
$ |
(855 |
) |
(1 |
)% |
|
$ |
25,973 |
|
18 |
% |
Taxable interest and dividends on securities |
|
23,782 |
|
|
24,191 |
|
|
30,413 |
|
|
|
(409 |
) |
(2 |
)% |
|
|
(6,631 |
) |
(22 |
)% |
Non-taxable interest and dividends on securities |
|
1,434 |
|
|
1,434 |
|
|
1,594 |
|
|
|
— |
|
— |
% |
|
|
(160 |
) |
(10 |
)% |
Interest on federal funds sold and other short-term investments |
|
10,011 |
|
|
7,269 |
|
|
545 |
|
|
|
2,742 |
|
38 |
% |
|
|
9,466 |
|
1737 |
% |
Total interest and dividend income |
|
203,646 |
|
|
202,168 |
|
|
174,998 |
|
|
|
1,478 |
|
1 |
% |
|
|
28,648 |
|
16 |
% |
Interest expense: |
|
|
|
|
|
|
|
|
|
||||||||||||
Interest on deposits |
|
67,389 |
|
|
59,607 |
|
|
17,457 |
|
|
|
7,782 |
|
13 |
% |
|
|
49,932 |
|
286 |
% |
Interest on borrowings |
|
2,950 |
|
|
5,356 |
|
|
7,547 |
|
|
|
(2,406 |
) |
(45 |
)% |
|
|
(4,597 |
) |
(61 |
)% |
Total interest expense |
|
70,339 |
|
|
64,963 |
|
|
25,004 |
|
|
|
5,376 |
|
8 |
% |
|
|
45,335 |
|
181 |
% |
Net interest income |
|
133,307 |
|
|
137,205 |
|
|
149,994 |
|
|
|
(3,898 |
) |
(3 |
)% |
|
|
(16,687 |
) |
(11 |
)% |
Provision for allowance for loan losses |
|
5,198 |
|
|
7,328 |
|
|
10,880 |
|
|
|
(2,130 |
) |
(29 |
)% |
|
|
(5,682 |
) |
(52 |
)% |
Net interest income after provision for allowance for loan losses |
|
128,109 |
|
|
129,877 |
|
|
139,114 |
|
|
|
(1,768 |
) |
(1 |
)% |
|
|
(11,005 |
) |
(8 |
)% |
Noninterest income: |
|
|
|
|
|
|
|
|
|
||||||||||||
Service charges on deposit accounts |
|
7,514 |
|
|
7,403 |
|
|
6,834 |
|
|
|
111 |
|
1 |
% |
|
|
680 |
|
10 |
% |
Trust and investment advisory fees |
|
6,128 |
|
|
6,235 |
|
|
5,626 |
|
|
|
(107 |
) |
(2 |
)% |
|
|
502 |
|
9 |
% |
Debit card processing fees |
|
3,398 |
|
|
3,388 |
|
|
3,227 |
|
|
|
10 |
|
— |
% |
|
|
171 |
|
5 |
% |
Interest rate swap (losses) income |
|
(576 |
) |
|
1,695 |
|
|
(78 |
) |
|
|
(2,271 |
) |
(134 |
)% |
|
|
(498 |
) |
638 |
% |
Income (losses) from investments held in rabbi trusts |
|
4,969 |
|
|
(1,523 |
) |
|
3,235 |
|
|
|
6,492 |
|
(426 |
)% |
|
|
1,734 |
|
54 |
% |
Losses on sales of commercial and industrial loans |
|
(87 |
) |
|
(2,651 |
) |
|
— |
|
|
|
2,564 |
|
(97 |
)% |
|
|
(87 |
) |
— |
% |
(Losses) gains on sales of mortgage loans held for sale, net |
|
(219 |
) |
|
(164 |
) |
|
8 |
|
|
|
(55 |
) |
34 |
% |
|
|
(227 |
) |
(2838 |
)% |
Losses on sales of securities available for sale, net |
|
— |
|
|
— |
|
|
(683 |
) |
|
|
— |
|
— |
% |
|
|
683 |
|
(100 |
)% |
Other |
|
5,612 |
|
|
4,774 |
|
|
4,256 |
|
|
|
838 |
|
18 |
% |
|
|
1,356 |
|
32 |
% |
Total noninterest income |
|
26,739 |
|
|
19,157 |
|
|
22,425 |
|
|
|
7,582 |
|
40 |
% |
|
|
4,314 |
|
19 |
% |
Noninterest expense: |
|
|
|
|
|
|
|
|
|
||||||||||||
Salaries and employee benefits |
|
67,773 |
|
|
60,898 |
|
|
61,572 |
|
|
|
6,875 |
|
11 |
% |
|
|
6,201 |
|
10 |
% |
Office occupancy and equipment |
|
9,195 |
|
|
8,641 |
|
|
8,641 |
|
|
|
554 |
|
6 |
% |
|
|
554 |
|
6 |
% |
Data processing |
|
16,753 |
|
|
13,443 |
|
|
13,227 |
|
|
|
3,310 |
|
25 |
% |
|
|
3,526 |
|
27 |
% |
Professional services |
|
4,108 |
|
|
7,125 |
|
|
4,295 |
|
|
|
(3,017 |
) |
(42 |
)% |
|
|
(187 |
) |
(4 |
)% |
Marketing expenses |
|
2,693 |
|
|
1,765 |
|
|
3,032 |
|
|
|
928 |
|
53 |
% |
|
|
(339 |
) |
(11 |
)% |
Loan expenses |
|
1,174 |
|
|
1,082 |
|
|
627 |
|
|
|
92 |
|
9 |
% |
|
|
547 |
|
87 |
% |
Federal Deposit Insurance Corporation ("FDIC") insurance |
|
13,486 |
|
|
2,808 |
|
|
1,540 |
|
|
|
10,678 |
|
380 |
% |
|
|
11,946 |
|
776 |
% |
Amortization of intangible assets |
|
505 |
|
|
504 |
|
|
299 |
|
|
|
1 |
|
— |
% |
|
|
206 |
|
69 |
% |
Other |
|
5,342 |
|
|
5,482 |
|
|
19,350 |
|
|
|
(140 |
) |
(3 |
)% |
|
|
(14,008 |
) |
(72 |
)% |
Total noninterest expense |
|
121,029 |
|
|
101,748 |
|
|
112,583 |
|
|
|
19,281 |
|
19 |
% |
|
|
8,446 |
|
8 |
% |
Income before income tax expense |
|
33,819 |
|
|
47,286 |
|
|
48,956 |
|
|
|
(13,467 |
) |
(28 |
)% |
|
|
(15,137 |
) |
(31 |
)% |
Income tax expense (benefit) |
|
2,310 |
|
|
(16,178 |
) |
|
8,038 |
|
|
|
18,488 |
|
(114 |
)% |
|
|
(5,728 |
) |
(71 |
)% |
Net income from continuing operations |
$ |
31,509 |
|
$ |
63,464 |
|
$ |
40,918 |
|
|
$ |
(31,955 |
) |
(50 |
)% |
|
$ |
(9,409 |
) |
(23 |
)% |
Net income (loss) from discontinued operations |
$ |
286,994 |
|
$ |
(4,351 |
) |
$ |
1,376 |
|
|
$ |
291,345 |
|
(6696 |
)% |
|
$ |
285,618 |
|
20757 |
% |
Net income |
$ |
318,503 |
|
$ |
59,113 |
|
$ |
42,294 |
|
|
$ |
259,390 |
|
439 |
% |
|
$ |
276,209 |
|
653 |
% |
|
|
|
|
|
|
|
|
|
|
||||||||||||
Share data: |
|
|
|
|
|
|
|
|
|
||||||||||||
Weighted average common shares outstanding, basic |
|
162,571,066 |
|
|
162,370,469 |
|
|
162,032,522 |
|
|
|
200,597 |
|
0 |
% |
|
|
538,544 |
|
0 |
% |
Weighted average common shares outstanding, diluted |
|
162,724,398 |
|
|
162,469,887 |
|
|
162,263,547 |
|
|
|
254,511 |
|
0 |
% |
|
|
460,851 |
|
0 |
% |
Earnings (loss) per share, basic: |
|
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations |
$ |
0.19 |
|
$ |
0.39 |
|
$ |
0.25 |
|
|
$ |
(0.20 |
) |
(51 |
)% |
|
$ |
(0.06 |
) |
(24 |
)% |
Discontinued operations |
$ |
1.77 |
|
$ |
(0.03 |
) |
$ |
0.01 |
|
|
$ |
1.80 |
|
(6000 |
)% |
|
$ |
1.76 |
|
17600 |
% |
Earnings per share, basic |
$ |
1.96 |
|
$ |
0.36 |
|
$ |
0.26 |
|
|
$ |
1.60 |
|
444 |
% |
|
$ |
1.70 |
|
654 |
% |
Earnings (loss) per share, diluted: |
|
|
|
|
|
|
|
|
|
||||||||||||
Continuing operations |
$ |
0.19 |
|
$ |
0.39 |
|
$ |
0.25 |
|
|
$ |
(0.20 |
) |
(51 |
)% |
|
$ |
(0.06 |
) |
(24 |
)% |
Discontinued operations |
$ |
1.76 |
|
$ |
(0.03 |
) |
$ |
0.01 |
|
|
$ |
1.79 |
|
(5967 |
)% |
|
$ |
1.75 |
|
17500 |
% |
Earnings per share, diluted |
$ |
1.95 |
|
$ |
0.36 |
|
$ |
0.26 |
|
|
$ |
1.59 |
|
442 |
% |
|
$ |
1.69 |
|
650 |
% |
EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME |
||||||||||||
|
Twelve months ended |
|
|
|
||||||||
(Unaudited, dollars in thousands, except per-share data) |
Dec 31, 2023 |
Dec 31, 2022 |
|
Change |
||||||||
|
|
|
|
|
|
|||||||
Interest and dividend income: |
|
|
|
△ $ |
△ % |
|||||||
Interest and fees on loans |
$ |
652,095 |
|
$ |
476,041 |
|
|
$ |
176,054 |
|
37 |
% |
Taxable interest and dividends on securities |
|
101,233 |
|
|
118,690 |
|
|
|
(17,457 |
) |
(15 |
)% |
Non-taxable interest and dividends on securities |
|
5,736 |
|
|
7,179 |
|
|
|
(1,443 |
) |
(20 |
)% |
Interest on federal funds sold and other short-term investments |
|
37,395 |
|
|
3,271 |
|
|
|
34,124 |
|
1043 |
% |
Total interest and dividend income |
|
796,459 |
|
|
605,181 |
|
|
|
191,278 |
|
32 |
% |
Interest expense: |
|
|
|
|
|
|||||||
Interest on deposits |
|
226,075 |
|
|
28,621 |
|
|
|
197,454 |
|
690 |
% |
Interest on borrowings |
|
19,975 |
|
|
8,506 |
|
|
|
11,469 |
|
135 |
% |
Total interest expense |
|
246,050 |
|
|
37,127 |
|
|
|
208,923 |
|
563 |
% |
Net interest income |
|
550,409 |
|
|
568,054 |
|
|
|
(17,645 |
) |
(3 |
)% |
Provision for allowance for loan losses |
|
20,052 |
|
|
17,925 |
|
|
|
2,127 |
|
12 |
% |
Net interest income after provision for allowance for loan losses |
|
530,357 |
|
|
550,129 |
|
|
|
(19,772 |
) |
(4 |
)% |
Noninterest income: |
|
|
|
|
|
|||||||
Service charges on deposit accounts |
|
28,631 |
|
|
30,392 |
|
|
|
(1,761 |
) |
(6 |
)% |
Trust and investment advisory fees |
|
24,264 |
|
|
23,593 |
|
|
|
671 |
|
3 |
% |
Debit card processing fees |
|
13,469 |
|
|
12,644 |
|
|
|
825 |
|
7 |
% |
Interest rate swap income |
|
1,536 |
|
|
6,009 |
|
|
|
(4,473 |
) |
(74 |
)% |
Income (losses) from investments held in rabbi trusts |
|
9,305 |
|
|
(10,762 |
) |
|
|
20,067 |
|
(186 |
)% |
Losses on sales of commercial and industrial loans |
|
(2,738 |
) |
|
— |
|
|
|
(2,738 |
) |
— |
% |
(Losses) gains on sales of mortgage loans held for sale, net |
|
(507 |
) |
|
248 |
|
|
|
(755 |
) |
(304 |
)% |
Losses on sales of securities available for sale, net |
|
(333,170 |
) |
|
(3,157 |
) |
|
|
(330,013 |
) |
10453 |
% |
Other |
|
21,457 |
|
|
17,783 |
|
|
|
3,674 |
|
21 |
% |
Total noninterest (loss) income |
|
(237,753 |
) |
|
76,750 |
|
|
|
(314,503 |
) |
(410 |
)% |
Noninterest expense: |
|
|
|
|
|
|||||||
Salaries and employee benefits |
|
253,037 |
|
|
233,097 |
|
|
|
19,940 |
|
9 |
% |
Office occupancy and equipment |
|
35,992 |
|
|
37,445 |
|
|
|
(1,453 |
) |
(4 |
)% |
Data processing |
|
55,308 |
|
|
52,938 |
|
|
|
2,370 |
|
4 |
% |
Professional services |
|
17,385 |
|
|
15,805 |
|
|
|
1,580 |
|
10 |
% |
Marketing expenses |
|
7,592 |
|
|
9,294 |
|
|
|
(1,702 |
) |
(18 |
)% |
Loan expenses |
|
4,466 |
|
|
6,384 |
|
|
|
(1,918 |
) |
(30 |
)% |
Federal Deposit Insurance Corporation ("FDIC") insurance |
|
21,874 |
|
|
6,250 |
|
|
|
15,624 |
|
250 |
% |
Amortization of intangible assets |
|
1,804 |
|
|
1,198 |
|
|
|
606 |
|
51 |
% |
Other |
|
21,144 |
|
|
26,238 |
|
|
|
(5,094 |
) |
(19 |
)% |
Total noninterest expense |
|
418,602 |
|
|
388,649 |
|
|
|
29,953 |
|
8 |
% |
(Loss) income before income tax expense |
|
(125,998 |
) |
|
238,230 |
|
|
|
(364,228 |
) |
(153 |
)% |
Income tax (benefit) expense |
|
(63,309 |
) |
|
51,719 |
|
|
|
(115,028 |
) |
(222 |
)% |
Net (loss) income from continuing operations |
|
(62,689 |
) |
|
186,511 |
|
|
|
(249,200 |
) |
(134 |
)% |
Net income from discontinued operations |
|
294,866 |
|
|
13,248 |
|
|
|
281,618 |
|
2126 |
% |
Net income |
$ |
232,177 |
|
$ |
199,759 |
|
|
$ |
32,418 |
|
16 |
% |
|
|
|
|
|
|
|||||||
Share data: |
|
|
|
|
|
|||||||
Weighted average common shares outstanding, basic |
|
162,293,020 |
|
|
165,510,357 |
|
|
|
(3,217,337 |
) |
(2 |
)% |
Weighted average common shares outstanding, diluted |
|
162,403,097 |
|
|
165,648,571 |
|
|
|
(3,245,474 |
) |
(2 |
)% |
Earnings (loss) per share, basic: |
|
|
|
|
|
|||||||
Continuing operations |
$ |
(0.39 |
) |
$ |
1.13 |
|
|
$ |
(1.52 |
) |
(135 |
)% |
Discontinued operations |
$ |
1.82 |
|
$ |
0.08 |
|
|
$ |
1.74 |
|
2175 |
% |
Earnings per share, basic |
$ |
1.43 |
|
$ |
1.21 |
|
|
$ |
0.22 |
|
18 |
% |
Earnings (loss) per share, diluted: |
|
|
|
|
|
|||||||
Continuing operations |
$ |
(0.39 |
) |
$ |
1.13 |
|
|
$ |
(1.52 |
) |
(135 |
)% |
Discontinued operations |
$ |
1.82 |
|
$ |
0.08 |
|
|
$ |
1.74 |
|
2175 |
% |
Earnings per share, diluted |
$ |
1.43 |
|
$ |
1.21 |
|
|
$ |
0.22 |
|
18 |
% |
EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS |
||||||||||||||||||||||||||
|
As of and for the three months ended |
|||||||||||||||||||||||||
|
Dec 31, 2023 |
|
Sep 30, 2023 |
|
Dec 31, 2022 |
|||||||||||||||||||||
(Unaudited, dollars in thousands) |
Avg. Balance |
|
Interest |
|
Yield /
|
|
Avg. Balance |
|
Interest |
|
Yield /
|
|
Avg. Balance |
|
Interest |
|
Yield /
|
|||||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Loans (1): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Commercial |
$ |
9,978,154 |
|
$ |
126,128 |
|
5.01 |
% |
|
$ |
9,988,712 |
|
$ |
128,051 |
|
5.09 |
% |
|
$ |
9,528,386 |
|
$ |
108,015 |
|
4.50 |
% |
Residential |
|
2,573,032 |
|
|
23,546 |
|
3.63 |
% |
|
|
2,553,150 |
|
|
22,988 |
|
3.57 |
% |
|
|
2,313,810 |
|
|
18,837 |
|
3.23 |
% |
Consumer |
|
1,411,374 |
|
|
22,835 |
|
6.42 |
% |
|
|
1,386,350 |
|
|
22,227 |
|
6.36 |
% |
|
|
1,363,858 |
|
|
18,949 |
|
5.51 |
% |
Total loans |
|
13,962,560 |
|
|
172,509 |
|
4.90 |
% |
|
|
13,928,212 |
|
|
173,266 |
|
4.94 |
% |
|
|
13,206,054 |
|
|
145,801 |
|
4.38 |
% |
Investment securities |
|
5,670,742 |
|
|
25,609 |
|
1.79 |
% |
|
|
5,777,173 |
|
|
26,009 |
|
1.79 |
% |
|
|
8,422,385 |
|
|
32,432 |
|
1.53 |
% |
Federal funds sold and other short-term investments |
|
720,384 |
|
|
10,011 |
|
5.51 |
% |
|
|
537,602 |
|
|
7,269 |
|
5.36 |
% |
|
|
63,408 |
|
|
545 |
|
3.41 |
% |
Total interest-earning assets |
|
20,353,686 |
|
|
208,129 |
|
4.06 |
% |
|
|
20,242,987 |
|
|
206,544 |
|
4.05 |
% |
|
|
21,691,847 |
|
|
178,778 |
|
3.27 |
% |
Non-interest-earning assets |
|
834,391 |
|
|
|
|
|
|
1,033,879 |
|
|
|
|
|
|
653,158 |
|
|
|
|
||||||
Total assets |
$ |
21,188,077 |
|
|
|
|
|
$ |
21,276,866 |
|
|
|
|
|
$ |
22,345,005 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Savings |
$ |
1,352,239 |
|
$ |
45 |
|
0.01 |
% |
|
$ |
1,441,636 |
|
$ |
43 |
|
0.01 |
% |
|
$ |
1,924,840 |
|
$ |
57 |
|
0.01 |
% |
Interest checking |
|
3,753,352 |
|
|
7,080 |
|
0.75 |
% |
|
|
3,903,062 |
|
|
6,302 |
|
0.64 |
% |
|
|
4,871,089 |
|
|
4,897 |
|
0.40 |
% |
Money market |
|
4,735,917 |
|
|
29,390 |
|
2.46 |
% |
|
|
4,836,895 |
|
|
27,695 |
|
2.27 |
% |
|
|
4,778,694 |
|
|
9,919 |
|
0.82 |
% |
Time deposits |
|
2,656,313 |
|
|
30,874 |
|
4.61 |
% |
|
|
2,341,684 |
|
|
25,567 |
|
4.33 |
% |
|
|
563,735 |
|
|
2,584 |
|
1.82 |
% |
Total interest-bearing deposits |
|
12,497,821 |
|
|
67,389 |
|
2.14 |
% |
|
|
12,523,277 |
|
|
59,607 |
|
1.89 |
% |
|
|
12,138,358 |
|
|
17,457 |
|
0.57 |
% |
Borrowings |
|
242,437 |
|
|
2,950 |
|
4.83 |
% |
|
|
414,252 |
|
|
5,356 |
|
5.13 |
% |
|
|
795,527 |
|
|
7,547 |
|
3.76 |
% |
Total interest-bearing liabilities |
|
12,740,258 |
|
|
70,339 |
|
2.19 |
% |
|
|
12,937,529 |
|
|
64,963 |
|
1.99 |
% |
|
|
12,933,885 |
|
|
25,004 |
|
0.77 |
% |
Demand deposit accounts |
|
5,210,185 |
|
|
|
|
|
|
5,257,704 |
|
|
|
|
|
|
6,495,817 |
|
|
|
|
||||||
Other noninterest-bearing liabilities |
|
555,034 |
|
|
|
|
|
|
541,827 |
|
|
|
|
|
|
495,129 |
|
|
|
|
||||||
Total liabilities |
|
18,505,477 |
|
|
|
|
|
|
18,737,060 |
|
|
|
|
|
|
19,924,831 |
|
|
|
|
||||||
Shareholders' equity |
|
2,682,600 |
|
|
|
|
|
|
2,539,806 |
|
|
|
|
|
|
2,420,174 |
|
|
|
|
||||||
Total liabilities and shareholders' equity |
$ |
21,188,077 |
|
|
|
|
|
$ |
21,276,866 |
|
|
|
|
|
$ |
22,345,005 |
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Net interest income - FTE |
|
|
$ |
137,790 |
|
|
|
|
|
$ |
141,581 |
|
|
|
|
|
$ |
153,774 |
|
|
||||||
Net interest rate spread (2) |
|
|
|
|
1.87 |
% |
|
|
|
|
|
2.06 |
% |
|
|
|
|
|
2.50 |
% |
||||||
Net interest-earning assets (3) |
$ |
7,613,428 |
|
|
|
|
|
$ |
7,305,458 |
|
|
|
|
|
$ |
8,757,962 |
|
|
|
|
||||||
Net interest margin - FTE (4) |
|
|
|
|
2.69 |
% |
|
|
|
|
|
2.77 |
% |
|
|
|
|
|
2.81 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
(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. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS |
|||||||||||||||||
|
As of and for the twelve months ended |
||||||||||||||||
|
Dec 31, 2023 |
|
Dec 31, 2022 |
||||||||||||||
(Unaudited, dollars in thousands) |
Avg. Balance |
|
Interest |
|
Yield / Cost |
|
Avg. Balance |
|
Interest |
|
Yield / Cost |
||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Loans (1): |
|
|
|
|
|
|
|
|
|
|
|
||||||
Commercial |
$ |
9,913,968 |
|
$ |
491,427 |
|
4.96 |
% |
|
$ |
9,147,540 |
|
$ |
366,097 |
|
4.00 |
% |
Residential |
|
2,538,588 |
|
|
90,139 |
|
3.55 |
% |
|
|
2,064,609 |
|
|
63,803 |
|
3.09 |
% |
Consumer |
|
1,381,745 |
|
|
86,167 |
|
6.24 |
% |
|
|
1,327,417 |
|
|
56,965 |
|
4.29 |
% |
Total loans |
|
13,834,301 |
|
|
667,733 |
|
4.83 |
% |
|
|
12,539,566 |
|
|
486,865 |
|
3.88 |
% |
Non-taxable investment securities |
|
197,682 |
|
|
7,279 |
|
3.68 |
% |
|
|
253,651 |
|
|
9,091 |
|
3.58 |
% |
Taxable investment securities |
|
6,050,024 |
|
|
101,233 |
|
1.67 |
% |
|
|
8,413,217 |
|
|
118,690 |
|
1.41 |
% |
Total investment securities |
|
6,247,706 |
|
|
108,512 |
|
1.74 |
% |
|
|
8,666,868 |
|
|
127,781 |
|
1.47 |
% |
Federal funds sold and other short-term investments |
|
720,864 |
|
|
37,395 |
|
5.19 |
% |
|
|
420,834 |
|
|
3,271 |
|
0.78 |
% |
Total interest-earning assets |
|
20,802,871 |
|
|
813,640 |
|
3.91 |
% |
|
|
21,627,268 |
|
|
617,917 |
|
2.86 |
% |
Non-interest-earning assets |
|
921,622 |
|
|
|
|
|
|
986,865 |
|
|
|
|
||||
Total assets |
$ |
21,724,493 |
|
|
|
|
|
$ |
22,614,133 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
||||||
Savings |
$ |
1,515,713 |
|
$ |
217 |
|
0.01 |
% |
|
$ |
2,015,651 |
|
$ |
209 |
|
0.01 |
% |
Interest checking |
|
4,070,585 |
|
|
24,235 |
|
0.60 |
% |
|
|
4,890,709 |
|
|
11,675 |
|
0.24 |
% |
Money market |
|
4,918,343 |
|
|
104,002 |
|
2.11 |
% |
|
|
5,057,445 |
|
|
13,479 |
|
0.27 |
% |
Time deposits |
|
2,303,520 |
|
|
97,621 |
|
4.24 |
% |
|
|
463,261 |
|
|
3,258 |
|
0.70 |
% |
Total interest-bearing deposits |
|
12,808,161 |
|
|
226,075 |
|
1.77 |
% |
|
|
12,427,066 |
|
|
28,621 |
|
0.23 |
% |
Borrowings |
|
418,884 |
|
|
19,975 |
|
4.77 |
% |
|
|
256,632 |
|
|
8,506 |
|
3.31 |
% |
Total interest-bearing liabilities |
|
13,227,045 |
|
|
246,050 |
|
1.86 |
% |
|
|
12,683,698 |
|
|
37,127 |
|
0.29 |
% |
Demand deposit accounts |
|
5,404,208 |
|
|
|
|
|
|
6,647,518 |
|
|
|
|
||||
Other noninterest-bearing liabilities |
|
522,239 |
|
|
|
|
|
|
451,384 |
|
|
|
|
||||
Total liabilities |
|
19,153,492 |
|
|
|
|
|
|
19,782,600 |
|
|
|
|
||||
Shareholders' equity |
|
2,571,001 |
|
|
|
|
|
|
2,831,533 |
|
|
|
|
||||
Total liabilities and shareholders' equity |
$ |
21,724,493 |
|
|
|
|
|
$ |
22,614,133 |
|
|
|
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Net interest income - FTE |
|
|
$ |
567,590 |
|
|
|
|
|
$ |
580,790 |
|
|
||||
Net interest rate spread (2) |
|
|
|
|
2.05 |
% |
|
|
|
|
|
2.57 |
% |
||||
Net interest-earning assets (3) |
$ |
7,575,826 |
|
|
|
|
|
$ |
8,943,570 |
|
|
|
|
||||
Net interest margin - FTE (4) |
|
|
|
|
2.73 |
% |
|
|
|
|
|
2.69 |
% |
||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||
(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. |
|||||||||||||||||
|
|||||||||||||||||
EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - NON-PERFORMING ASSETS (1) |
|||||||||||||||
|
As of |
||||||||||||||
|
Dec 31, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
(Unaudited, dollars in thousands) |
|
|
|
|
|
||||||||||
Non-accrual loans: |
|
|
|
|
|
||||||||||
Commercial |
$ |
35,107 |
|
$ |
31,703 |
|
$ |
14,178 |
|
$ |
17,271 |
|
$ |
21,474 |
|
Residential |
|
8,725 |
|
|
8,075 |
|
|
8,796 |
|
|
9,603 |
|
|
9,750 |
|
Consumer |
|
8,725 |
|
|
7,687 |
|
|
7,584 |
|
|
7,699 |
|
|
7,380 |
|
Total non-accrual loans |
|
52,557 |
|
|
47,465 |
|
|
30,558 |
|
|
34,573 |
|
|
38,604 |
|
Total accruing loans past due 90 days or more: |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total non-performing loans |
|
52,557 |
|
|
47,465 |
|
|
30,558 |
|
|
34,573 |
|
|
38,604 |
|
Other real estate owned |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Other non-performing assets: |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Total non-performing assets (1) |
$ |
52,557 |
|
$ |
47,465 |
|
$ |
30,558 |
|
$ |
34,573 |
|
$ |
38,604 |
|
Total accruing troubled debt restructured ("TDR") (2) |
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
— |
|
$ |
28,834 |
|
Total non-performing loans to total loans |
|
0.38 |
% |
|
0.34 |
% |
|
0.22 |
% |
|
0.25 |
% |
|
0.28 |
% |
Total non-performing assets to total assets |
|
0.25 |
% |
|
0.22 |
% |
|
0.14 |
% |
|
0.15 |
% |
|
0.17 |
% |
|
|
|
|
|
|
||||||||||
(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. |
|||||||||||||||
(2) The Company adopted ASU 2022-02 on January 1, 2023 which eliminated the TDR recognition and measurement guidance. Accordingly, the Company had no TDRs to report as of March 31, 2023 and subsequent periods. |
|||||||||||||||
EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE-OFFS (RECOVERIES) |
|||||||||||||||
Three months ended |
|||||||||||||||
|
Dec 31, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
(Unaudited, dollars in thousands) |
|
|
|
|
|
||||||||||
Average total loans |
$ |
13,961,061 |
|
$ |
13,926,194 |
|
$ |
13,803,292 |
|
$ |
13,633,165 |
|
$ |
13,203,450 |
|
Allowance for loan losses, beginning of the period |
|
155,146 |
|
|
147,955 |
|
|
140,938 |
|
|
142,211 |
|
|
131,663 |
|
Total cumulative effect of change in accounting principle (1): |
|
— |
|
|
— |
|
|
— |
|
|
(1,143 |
) |
|
— |
|
Charged-off loans: |
|
|
|
|
|
||||||||||
Commercial and industrial |
|
2 |
|
|
11 |
|
|
— |
|
|
— |
|
|
256 |
|
Commercial real estate |
|
8,008 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Commercial construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Business banking |
|
3,745 |
|
|
303 |
|
|
254 |
|
|
343 |
|
|
370 |
|
Residential real estate |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Consumer home equity |
|
— |
|
|
— |
|
|
— |
|
|
7 |
|
|
1 |
|
Other consumer |
|
536 |
|
|
731 |
|
|
591 |
|
|
561 |
|
|
515 |
|
Total charged-off loans |
|
12,291 |
|
|
1,045 |
|
|
845 |
|
|
911 |
|
|
1,142 |
|
Recoveries on loans previously charged-off: |
|
|
|
|
|
||||||||||
Commercial and industrial |
|
11 |
|
|
120 |
|
|
26 |
|
|
139 |
|
|
248 |
|
Commercial real estate |
|
190 |
|
|
2 |
|
|
2 |
|
|
4 |
|
|
38 |
|
Commercial construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Business banking |
|
573 |
|
|
609 |
|
|
204 |
|
|
481 |
|
|
391 |
|
Residential real estate |
|
34 |
|
|
30 |
|
|
18 |
|
|
15 |
|
|
14 |
|
Consumer home equity |
|
1 |
|
|
39 |
|
|
— |
|
|
1 |
|
|
8 |
|
Other consumer |
|
131 |
|
|
108 |
|
|
111 |
|
|
116 |
|
|
111 |
|
Total recoveries |
|
940 |
|
|
908 |
|
|
361 |
|
|
756 |
|
|
810 |
|
Net loans charged-off (recoveries): |
|
|
|
|
|
||||||||||
Commercial and industrial |
|
(9 |
) |
|
(109 |
) |
|
(26 |
) |
|
(139 |
) |
|
8 |
|
Commercial real estate |
|
7,818 |
|
|
(2 |
) |
|
(2 |
) |
|
(4 |
) |
|
(38 |
) |
Commercial construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Business banking |
|
3,172 |
|
|
(306 |
) |
|
50 |
|
|
(138 |
) |
|
(21 |
) |
Residential real estate |
|
(34 |
) |
|
(30 |
) |
|
(18 |
) |
|
(15 |
) |
|
(14 |
) |
Consumer home equity |
|
(1 |
) |
|
(39 |
) |
|
— |
|
|
6 |
|
|
(7 |
) |
Other consumer |
|
405 |
|
|
623 |
|
|
480 |
|
|
445 |
|
|
404 |
|
Total net loans charged-off |
|
11,351 |
|
|
137 |
|
|
484 |
|
|
155 |
|
|
332 |
|
Provision for allowance for loan losses |
|
5,198 |
|
|
7,328 |
|
|
7,501 |
|
|
25 |
|
|
10,880 |
|
Total allowance for loan losses, end of period |
$ |
148,993 |
|
$ |
155,146 |
|
$ |
147,955 |
|
$ |
140,938 |
|
$ |
142,211 |
|
Net charge-offs to average total loans outstanding during this period (2) |
|
0.32 |
% |
|
0.00 |
% |
|
0.01 |
% |
|
0.00 |
% |
|
0.01 |
% |
Allowance for loan losses as a percent of total loans |
|
1.07 |
% |
|
1.12 |
% |
|
1.06 |
% |
|
1.03 |
% |
|
1.05 |
% |
Allowance for loan losses as a percent of nonperforming loans |
|
283.49 |
% |
|
326.86 |
% |
|
484.18 |
% |
|
407.65 |
% |
|
368.38 |
% |
|
|
|
|
|
|
||||||||||
|
|||||||||||||||
(1) For the quarter ended March 31, 2023, represents the adjustment needed to reflect the cumulative day one impact pursuant to the Company’s adoption of ASU 2022-02 (i.e., cumulative effect adjustment related to the adoption of ASU 2022-02 as of January 1, 2023). The adjustment represents a |
|||||||||||||||
(2) Presented on an annualized basis. |
|||||||||||||||
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) |
Dec 31, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
|
|
|
|
|
|
||||||||||
Net income (loss) from continuing operations (GAAP) |
$ |
31,509 |
|
$ |
63,464 |
|
$ |
44,419 |
|
$ |
(202,081 |
) |
$ |
40,918 |
|
Add: |
|
|
|
|
|
||||||||||
Noninterest income components: |
|
|
|
|
|
||||||||||
(Income) losses from investments held in rabbi trusts |
|
(4,969 |
) |
|
1,523 |
|
|
(3,002 |
) |
|
(2,857 |
) |
|
(3,235 |
) |
Losses on sales of securities available for sale, net |
|
— |
|
|
— |
|
|
— |
|
|
333,170 |
|
|
683 |
|
(Gains) losses on sales of other assets |
|
— |
|
|
(2 |
) |
|
— |
|
|
5 |
|
|
10 |
|
Noninterest expense components: |
|
|
|
|
|
||||||||||
Rabbi trust employee benefit expense (income) |
|
1,740 |
|
|
(586 |
) |
|
1,314 |
|
|
1,274 |
|
|
1,103 |
|
Merger and acquisition expenses |
|
1,865 |
|
|
3,630 |
|
|
— |
|
|
— |
|
|
— |
|
Defined Benefit Plan settlement loss |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
12,045 |
|
Total impact of non-GAAP adjustments |
|
(1,364 |
) |
|
4,565 |
|
|
(1,688 |
) |
|
331,592 |
|
|
10,606 |
|
Less net tax benefit associated with non-GAAP adjustments (2) |
|
13,270 |
|
|
15,944 |
|
|
1,639 |
|
|
76,377 |
|
|
2,954 |
|
Non-GAAP adjustments, net of tax |
$ |
(14,634 |
) |
$ |
(11,379 |
) |
$ |
(3,327 |
) |
$ |
255,215 |
|
$ |
7,652 |
|
Operating net income (non-GAAP) |
$ |
16,875 |
|
$ |
52,085 |
|
$ |
41,092 |
|
$ |
53,134 |
|
$ |
48,570 |
|
|
|
|
|
|
|
||||||||||
Weighted average common shares outstanding during the period: |
|
|
|
|
|
||||||||||
Basic |
|
162,571,066 |
|
|
162,370,469 |
|
|
162,232,236 |
|
|
161,991,373 |
|
|
162,032,522 |
|
Diluted |
|
162,724,398 |
|
|
162,469,887 |
|
|
162,246,675 |
|
|
162,059,431 |
|
|
162,263,547 |
|
|
|
|
|
|
|
||||||||||
Earnings (losses) per share from continuing operations, basic: |
$ |
0.19 |
|
$ |
0.39 |
|
$ |
0.27 |
|
$ |
(1.25 |
) |
$ |
0.25 |
|
Earnings (losses) per share from continuing operations, diluted: |
$ |
0.19 |
|
$ |
0.39 |
|
$ |
0.27 |
|
$ |
(1.25 |
) |
$ |
0.25 |
|
|
|
|
|
|
|
||||||||||
Operating earnings per share, basic (non-GAAP) |
$ |
0.10 |
|
$ |
0.32 |
|
$ |
0.25 |
|
$ |
0.33 |
|
$ |
0.30 |
|
Operating earnings per share, diluted (non-GAAP) |
$ |
0.10 |
|
$ |
0.32 |
|
$ |
0.25 |
|
$ |
0.33 |
|
$ |
0.30 |
|
|
|
|
|
|
|
||||||||||
Return on average assets (3) |
|
0.59 |
% |
|
1.18 |
% |
|
0.81 |
% |
|
(3.64 |
)% |
|
0.73 |
% |
Add: |
|
|
|
|
|
||||||||||
(Income) losses from investments held in rabbi trusts (3) |
|
(0.09 |
)% |
|
0.03 |
% |
|
(0.05 |
)% |
|
(0.05 |
)% |
|
(0.06 |
)% |
Losses on sales of securities available for sale, net (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
6.00 |
% |
|
0.01 |
% |
(Gains) losses on sales of other assets (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
Rabbi trust employee benefit expense (income) (3) |
|
0.03 |
% |
|
(0.01 |
)% |
|
0.02 |
% |
|
0.02 |
% |
|
0.02 |
% |
Merger and acquisition expenses (3) |
|
0.03 |
% |
|
0.07 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
Defined Benefit Plan settlement loss (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.21 |
% |
Less net tax benefit associated with non-GAAP adjustments (2) (3) |
|
0.25 |
% |
|
0.30 |
% |
|
0.03 |
% |
|
1.38 |
% |
|
0.05 |
% |
Operating return on average assets (non-GAAP) (3) |
|
0.31 |
% |
|
0.97 |
% |
|
0.75 |
% |
|
0.95 |
% |
|
0.86 |
% |
|
|
|
|
|
|
||||||||||
Return on average shareholders' equity (3) |
|
4.66 |
% |
|
9.91 |
% |
|
6.85 |
% |
|
(33.31 |
)% |
|
6.71 |
% |
Add: |
|
|
|
|
|
||||||||||
(Income) losses from investments held in rabbi trusts (3) |
|
(0.73 |
)% |
|
0.24 |
% |
|
(0.46 |
)% |
|
(0.47 |
)% |
|
(0.53 |
)% |
Losses on sales of securities available for sale, net (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
54.92 |
% |
|
0.11 |
% |
(Gains) losses on sales of other assets (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
Rabbi trust employee benefit expense (income) (3) |
|
0.26 |
% |
|
(0.09 |
)% |
|
0.20 |
% |
|
0.21 |
% |
|
0.18 |
% |
Merger and acquisition expenses (3) |
|
0.28 |
% |
|
0.57 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
Defined Benefit Plan settlement loss (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
1.97 |
% |
Less net tax benefit associated with non-GAAP adjustments (2) (3) |
|
1.96 |
% |
|
2.49 |
% |
|
0.25 |
% |
|
12.59 |
% |
|
0.48 |
% |
Operating return on average shareholders' equity (non-GAAP) (3) |
|
2.51 |
% |
|
8.14 |
% |
|
6.34 |
% |
|
8.76 |
% |
|
7.96 |
% |
|
|
|
|
|
|
||||||||||
Average tangible shareholders' equity: |
|
|
|
|
|
||||||||||
Average total shareholders' equity (GAAP) |
$ |
2,682,600 |
|
$ |
2,539,806 |
|
$ |
2,599,325 |
|
$ |
2,460,170 |
|
$ |
2,420,174 |
|
Less: Average goodwill and other intangibles |
|
597,234 |
|
|
658,591 |
|
|
659,825 |
|
|
660,795 |
|
|
661,841 |
|
Average tangible shareholders' equity (non-GAAP) |
$ |
2,085,366 |
|
$ |
1,881,215 |
|
$ |
1,939,500 |
|
$ |
1,799,375 |
|
$ |
1,758,333 |
|
|
|
|
|
|
|
||||||||||
Return on average tangible shareholders' equity (non-GAAP) (3) |
|
5.99 |
% |
|
13.38 |
% |
|
9.19 |
% |
|
(45.55 |
)% |
|
9.23 |
% |
Add: |
|
|
|
|
|
||||||||||
(Income) losses from investments held in rabbi trusts (3) |
|
(0.95 |
)% |
|
0.32 |
% |
|
(0.62 |
)% |
|
(0.64 |
)% |
|
(0.73 |
)% |
Losses on sales of securities available for sale, net (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
75.09 |
% |
|
0.15 |
% |
(Gains) losses on sales of other assets (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
Rabbi trust employee benefit expense (income) (3) |
|
0.33 |
% |
|
(0.12 |
)% |
|
0.27 |
% |
|
0.29 |
% |
|
0.25 |
% |
Merger and acquisition expenses (3) |
|
0.35 |
% |
|
0.77 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
Defined Benefit Plan settlement loss (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
2.72 |
% |
Less net tax benefit associated with non-GAAP adjustments (2) (3) |
|
2.52 |
% |
|
3.36 |
% |
|
0.34 |
% |
|
17.21 |
% |
|
0.67 |
% |
Operating return on average tangible shareholders' equity (non-GAAP) (3) |
|
3.20 |
% |
|
10.99 |
% |
|
8.50 |
% |
|
11.98 |
% |
|
10.95 |
% |
|
|
|
|
|
|
||||||||||
(1) Average assets, average shareholders' equity, average goodwill and other intangibles, and average tangible shareholders' equity components presented in this table 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, described further below. Upon the sale of securities in the first quarter of 2023, we established a valuation allowance of |
|||||||||||||||
(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, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
(Unaudited, dollars in thousands) |
|
|
|
|
|
||||||||||
Net interest income (GAAP) |
$ |
133,307 |
|
$ |
137,205 |
|
$ |
141,588 |
|
$ |
138,309 |
|
$ |
149,994 |
|
Add: |
|
|
|
|
|
||||||||||
Tax-equivalent adjustment (non-GAAP) (1) |
|
4,483 |
|
|
4,376 |
|
|
3,877 |
|
|
4,445 |
|
|
3,780 |
|
Fully-taxable equivalent net interest income (non-GAAP) |
$ |
137,790 |
|
$ |
141,581 |
|
$ |
145,465 |
|
$ |
142,754 |
|
$ |
153,774 |
|
|
|
|
|
|
|
||||||||||
Noninterest income (loss) (GAAP) |
$ |
26,739 |
|
$ |
19,157 |
|
$ |
26,204 |
|
$ |
(309,853 |
) |
$ |
22,425 |
|
Less: |
|
|
|
|
|
||||||||||
Income (losses) from investments held in rabbi trusts |
|
4,969 |
|
|
(1,523 |
) |
|
3,002 |
|
|
2,857 |
|
|
3,235 |
|
Losses on sales of securities available for sale, net |
|
— |
|
|
— |
|
|
— |
|
|
(333,170 |
) |
|
(683 |
) |
Gains (losses) on sales of other assets |
|
— |
|
|
2 |
|
|
— |
|
|
(5 |
) |
|
(10 |
) |
Noninterest income on an operating basis (non-GAAP) |
$ |
21,770 |
|
$ |
20,678 |
|
$ |
23,202 |
|
$ |
20,465 |
|
$ |
19,883 |
|
|
|
|
|
|
|
||||||||||
Noninterest expense (GAAP) |
$ |
121,029 |
|
$ |
101,748 |
|
$ |
99,934 |
|
$ |
95,891 |
|
$ |
112,583 |
|
Less: |
|
|
|
|
|
||||||||||
Rabbi trust employee benefit expense (income) |
|
1,740 |
|
|
(586 |
) |
|
1,314 |
|
|
1,274 |
|
|
1,103 |
|
Merger and acquisition expenses |
|
1,865 |
|
|
3,630 |
|
|
— |
|
|
— |
|
|
— |
|
Defined Benefit Plan settlement loss |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
12,045 |
|
Noninterest expense on an operating basis (non-GAAP) |
$ |
117,424 |
|
$ |
98,704 |
|
$ |
98,620 |
|
$ |
94,617 |
|
$ |
99,435 |
|
|
|
|
|
|
|
||||||||||
Total revenue (loss) (GAAP) |
$ |
160,046 |
|
$ |
156,362 |
|
$ |
167,792 |
|
$ |
(171,544 |
) |
$ |
172,419 |
|
Total operating revenue (non-GAAP) |
$ |
159,560 |
|
$ |
162,259 |
|
$ |
168,667 |
|
$ |
163,219 |
|
$ |
173,657 |
|
|
|
|
|
|
|
||||||||||
Efficiency ratio (GAAP) |
|
75.62 |
% |
|
65.07 |
% |
|
59.56 |
% |
|
(55.90 |
)% |
|
65.30 |
% |
Operating efficiency ratio (non-GAAP) |
|
73.59 |
% |
|
60.83 |
% |
|
58.47 |
% |
|
57.97 |
% |
|
57.26 |
% |
|
|
|
|
|
|
||||||||||
(1) Interest income on tax-exempt loans and investment securities has been adjusted to a FTE basis using a marginal tax rate of |
|||||||||||||||
|
|||||||||||||||
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, 2023 |
Sep 30, 2023 |
Jun 30, 2023 |
Mar 31, 2023 |
Dec 31, 2022 |
||||||||||
(Unaudited, dollars in thousands, except per-share data) |
|
|
|
|
|
||||||||||
Tangible shareholders' equity: |
|
|
|
|
|
||||||||||
Total shareholders' equity (GAAP) |
$ |
2,974,855 |
|
$ |
2,446,553 |
|
$ |
2,526,772 |
|
$ |
2,579,123 |
|
$ |
2,471,790 |
|
Less: Goodwill and other intangibles (1) |
|
566,205 |
|
|
657,824 |
|
|
658,993 |
|
|
660,165 |
|
|
661,126 |
|
Tangible shareholders' equity (non-GAAP) |
|
2,408,650 |
|
|
1,788,729 |
|
|
1,867,779 |
|
|
1,918,958 |
|
|
1,810,664 |
|
|
|
|
|
|
|
||||||||||
Tangible assets: |
|
|
|
|
|
||||||||||
Total assets (GAAP) |
|
21,133,278 |
|
|
21,146,292 |
|
|
21,583,493 |
|
|
22,720,530 |
|
|
22,646,858 |
|
Less: Goodwill and other intangibles (1) |
|
566,205 |
|
|
657,824 |
|
|
658,993 |
|
|
660,165 |
|
|
661,126 |
|
Tangible assets (non-GAAP) |
$ |
20,567,073 |
|
$ |
20,488,468 |
|
$ |
20,924,500 |
|
$ |
22,060,365 |
|
$ |
21,985,732 |
|
|
|
|
|
|
|
||||||||||
Shareholders' equity to assets ratio (GAAP) |
|
14.08 |
% |
|
11.57 |
% |
|
11.71 |
% |
|
11.35 |
% |
|
10.91 |
% |
Tangible shareholders' equity to tangible assets ratio (non-GAAP) |
|
11.71 |
% |
|
8.73 |
% |
|
8.93 |
% |
|
8.70 |
% |
|
8.24 |
% |
|
|
|
|
|
|
||||||||||
Common shares outstanding |
|
176,426,993 |
|
|
176,376,675 |
|
|
176,376,675 |
|
|
176,328,426 |
|
|
176,172,073 |
|
|
|
|
|
|
|
||||||||||
Book value per share (GAAP) |
$ |
16.86 |
|
$ |
13.87 |
|
$ |
14.33 |
|
$ |
14.63 |
|
$ |
14.03 |
|
Tangible book value per share (non-GAAP) |
$ |
13.65 |
|
$ |
10.14 |
|
$ |
10.59 |
|
$ |
10.88 |
|
$ |
10.28 |
|
|
|
|
|
|
|
||||||||||
(1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023 and preceding periods. |
|||||||||||||||
APPENDIX D: 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 |
|||||||
|
Dec 31, 2023 |
Sep 30, 2023 |
|
Sep 30, 2023 |
||||||
(Unaudited, dollars in thousands, except per-share data) |
|
|
|
|
||||||
Common stock |
$ |
1,767 |
|
$ |
1,766 |
|
|
$ |
1 |
|
Additional paid in capital |
|
1,666,441 |
|
|
1,661,136 |
|
|
|
5,305 |
|
Unallocated ESOP common stock |
|
(132,755 |
) |
|
(133,992 |
) |
|
|
1,237 |
|
Retained earnings |
|
2,047,754 |
|
|
1,747,225 |
|
|
|
300,529 |
|
AOCI, net of tax - available for sale securities |
|
(584,243 |
) |
|
(763,871 |
) |
|
|
179,628 |
|
AOCI, net of tax - pension |
|
7,462 |
|
|
6,021 |
|
|
|
1,441 |
|
AOCI, net of tax - cash flow hedge |
|
(31,571 |
) |
|
(71,732 |
) |
|
|
40,161 |
|
Total shareholders' equity: |
$ |
2,974,855 |
|
$ |
2,446,553 |
|
|
$ |
528,302 |
|
Less: Goodwill and other intangibles (1) |
|
566,205 |
|
|
657,824 |
|
|
|
(91,619 |
) |
Tangible shareholders' equity (non-GAAP) |
$ |
2,408,650 |
|
$ |
1,788,729 |
|
|
$ |
619,921 |
|
|
|
|
|
|
||||||
Common shares outstanding |
|
176,426,993 |
|
|
176,376,675 |
|
|
|
50,318 |
|
|
|
|
|
|
||||||
Per share: |
|
|
|
|
||||||
Common stock |
$ |
0.01 |
|
$ |
0.01 |
|
|
$ |
— |
|
Additional paid in capital |
|
9.45 |
|
|
9.42 |
|
|
|
0.03 |
|
Unallocated ESOP common stock |
|
(0.75 |
) |
|
(0.76 |
) |
|
|
0.01 |
|
Retained earnings |
|
11.61 |
|
|
9.91 |
|
|
|
1.70 |
|
AOCI, net of tax - available for sale securities |
|
(3.31 |
) |
|
(4.33 |
) |
|
|
1.02 |
|
AOCI, net of tax - pension |
|
0.04 |
|
|
0.03 |
|
|
|
0.01 |
|
AOCI, net of tax - cash flow hedge |
|
(0.18 |
) |
|
(0.41 |
) |
|
|
0.23 |
|
Total shareholders' equity: |
$ |
16.86 |
|
$ |
13.87 |
|
|
$ |
2.99 |
|
Less: Goodwill and other intangibles (1) |
|
3.21 |
|
|
3.73 |
|
|
|
(0.52 |
) |
Tangible shareholders' equity (non-GAAP) |
$ |
13.65 |
|
$ |
10.14 |
|
|
$ |
3.51 |
|
|
|
|
|
|
||||||
(1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023. |
||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20240125436910/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
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