Eastern Bankshares, Inc. Reports Second Quarter 2021 Financial Results and Declares Quarterly Dividend

Rhea-AI Summary

Eastern Bankshares (NASDAQ: EBC) reported its Q2 2021 results, highlighting a net income of $34.8 million ($0.20 per share), a decline from $47.7 million ($0.28 per share) in Q1 2021. The results included $3.5 million in merger expenses related to the Century Bancorp acquisition and $3.3 million for litigation settlements. Excluding these, operating net income was $37.1 million ($0.22 per share). Total loans decreased by 3% to $9.6 billion, but non-PPP loan growth was 5%. A quarterly cash dividend of $0.08 per share was declared, payable on September 15, 2021.

Positive

• Operating net income of $37.1 million ($0.22 per share), excluding merger and litigation expenses.
• Loan growth (excluding PPP) reached $117 million, or 5% annualized, indicating business confidence.
• Increase in net interest income by $4.5 million to $104.6 million, driven by higher loan income.

Negative

• Net income dropped 27% from Q1 2021, impacting earnings per share.
• Total loans fell by 3%, reflecting a significant decline in PPP loan balances.
• Noninterest income decreased by $9.5 million from the prior quarter, mainly due to lower insurance revenue.

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 second quarter financial results and the declaration of a quarterly cash dividend of $0.08 per share. Net income for the second quarter of 2021 was $34.8 million, or $0.20 per share, compared to net income of $47.7 million, or $0.28 per share, reported for the first quarter of 2021.

Financial results for the second quarter of 2021 include $3.5 million in merger and acquisition expenses, primarily related to the pending merger with Century Bancorp, Inc. (“Century”) announced on April 7, 2021 and $3.3 million in expenses related to the anticipated settlement of overdraft litigation. Excluding these, and certain other non-operating expenses, operating net income* for the second quarter of 2021 was $37.1 million, or $0.22 per share, compared to $46.5 million, or $0.27 per share, reported for the prior quarter.

“Our second quarter financial results continue to demonstrate our organic growth, strong fee income generation, sound asset quality, and focus on our long-term profitability,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “COVID-19 vaccination rates in our core markets are among the highest in the country, and we’re seeing significant progress in our local economy as businesses were able to reopen their doors and look to the future. Excluding PPP loans, we saw loan growth of $117 million this quarter, or growth of over 5% on an annualized basis, which provides further evidence of confidence and business expansion. We are optimistic about our continued growth as our colleagues work diligently on the integration of Century. We’re pleased that Century shareholders approved the transaction earlier this month and are working towards a smooth integration later this year.”

HIGHLIGHTS FOR THE SECOND QUARTER OF 2021

• Total loans excluding Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans grew $116.9 million, or 5% on an annualized basis from the prior quarter. Residential and commercial loans excluding PPP loans grew 15% and 5%, respectively, on an annualized basis from the prior quarter.
• Net interest income increased $4.5 million from the prior quarter due to growth in the Company’s securities portfolio and higher loan income, primarily attributable to higher PPP fee recognition.
• An improving economic outlook coupled with strong asset quality led to a $3.3 million release of loan loss reserves. Nonperforming loans were $41.6 million, or 0.43% of total loans at the end of the second quarter.
• The second quarter saw solid fee generation with insurance, wealth management and debit card revenues up 4%, 17% and 36%, respectively, from the prior year quarter.

BALANCE SHEET

Total assets were $17.0 billion at June 30, 2021, representing an increase of $320.7 million, or 2%, from March 31, 2021.

• Available for sale securities increased $862.5 million, or 22%, on a consecutive quarter basis, to $4.8 billion, as excess liquidity was deployed into U.S. Agency securities. Cash and equivalents declined $296.1 million to $1.6 billion.
• Total loans were $9.6 billion, representing a decrease of $295.4 million, or 3%, from the prior quarter as the pace of forgiveness of PPP loans accelerated in the second quarter. Excluding PPP loans, total loans grew $116.9 million, or 1%, from the prior quarter, driven by growth in commercial loans excluding PPP loans of $80.7 million and residential loans of $51.0 million.
• Deposits totaled $13.3 billion, representing an increase of $269.6 million, or 2%, from March 31, 2021.
• Shareholders’ equity was $3.4 billion, representing an increase of $43.6 million, or 1%, from the prior quarter. The increase is driven by higher retained earnings of $21.0 million as well as an increase in the after-tax market value of the available for sale investment portfolio, which drove the increase in accumulated other comprehensive income of $19.9 million.
• At June 30, 2021, book value per share was $18.37 and tangible book value per share* was $16.33.

NET INTEREST INCOME

Net interest income was $104.6 million for the second quarter, compared to $100.1 million in the prior quarter, representing an increase of $4.5 million on a consecutive quarter basis.

• Included in net interest income was $9.3 million and $8.3 million of SBA PPP fee accretion net of deferred cost amortization in the second quarter and prior quarter, respectively. Between March 31, 2021 and June 30, 2021, $502.9 million in PPP loans were forgiven through the SBA or otherwise paid down compared to $240.7 million in the prior quarter. In the second quarter, PPP loan forgiveness was concentrated in higher balance loans where the Company received a lower percentage loan processing fee from the SBA relative to the prior quarter. Loans forgiven in the second quarter had lower unaccreted fee income at the time of forgiveness relative to the first quarter.
• Interest income on available for sale securities increased $2.3 million to $14.3 million in the second quarter as excess cash continues to be deployed into securities. Investment securities averaged $4.3 billion for the second quarter compared to $3.6 billion for the prior quarter, an increase of $713.2 million.
• The net interest margin on a fully tax equivalent (“FTE”) basis* was 2.69% for the second quarter, representing a 2 basis points decrease from the prior quarter. The net interest margin continues 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 $45.7 million for the second quarter, compared to $55.2 million for the prior quarter, representing a decrease of $9.5 million. The decline was primarily driven by lower insurance revenues from the seasonally high prior quarter and lower loan-level interest rate swap revenue due to lower market interest rates.

• Insurance commissions decreased $4.5 million to $23.7 million in the second quarter, compared to $28.1 million in the prior quarter, driven by seasonality. Compared to the prior year quarter, insurance commissions increased $1.0 million, or 4%.
• Trust and investment advisory fees increased $0.4 million on a consecutive quarter basis to $6.1 million primarily due to higher equity values.
• Loan-level interest rate swap losses were $1.2 million in the second quarter, compared to $5.4 million in revenue in the prior quarter, representing a decrease of $6.6 million that was primarily driven by a $6.4 million decrease in the fair value of such interest rate swap transactions due to lower market interest rates.
• Income on securities held in rabbi trust accounts was $4.2 million in the second quarter compared to $1.8 million in the prior quarter, representing an increase of $2.4 million primarily due to higher equity market gains in the second quarter of 2021 as compared to the prior quarter.
• Mortgage origination activity was lower in the second quarter as compared to the prior quarter with the gain on sale of loans held for sale totaling $0.8 million, down $0.6 million from the prior quarter.

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

NONINTEREST EXPENSE

Noninterest expense was $107.3 million for the second quarter representing an increase of $13.3 million, or 14%, from $94.0 million the prior quarter. The increase was primarily driven by higher salaries and employee benefits expense, expenses related to the pending merger with Century, and expenses related to the anticipated settlement of overdraft fee and nonsufficient funds fee lawsuits. Noninterest expense on an operating basis* for the second quarter of 2021 was $99.9 million, compared to $92.5 million in the prior quarter.

• Salaries and employee benefits expense was $69.3 million in the second quarter, representing an increase of $5.2 million from the prior quarter. The increase was primarily driven by higher incentive compensation expense of $3.4 million and an increase in the defined contribution supplemental executive retirement plan (“DC SERP”) expense of $1.1 million associated with the increase in the market value of investments held in rabbi trust accounts.
• Data processing expense was $13.6 million in the second quarter, an increase of $1.4 million from the prior quarter. Professional services expense was $6.4 million, an increase of $2.3 million from the prior quarter. These increases can be primarily attributed to costs associated with the pending acquisition of Century.
• Marketing expenses were $3.5 million in the second quarter, representing an increase of $1.8 million from the prior quarter.
• Other noninterest expense increased $2.5 million in the second quarter to $3.0 million. In the second quarter, the Company recorded expenses of $3.3 million related to the anticipated settlement of overdraft fee and nonsufficient fund fee suits brought against the Company that were the subject of mediation during the quarter. Partially offsetting this increased expense in the second quarter was the reversal of an impairment charge on tax credit investments of $1.4 million.

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

ASSET QUALITY

The allowance for loan losses was $105.6 million at June 30, 2021, or 1.10% of total loans, compared to $111.1 million or 1.12% of total loans at March 31, 2021. The Company released loan loss reserves totaling $3.3 million in the second quarter, compared to a release of $0.6 million in the prior quarter. The Company followed the incurred loss allowance GAAP accounting model at June 30, 2021 and all preceding periods.

Non-performing loans totaled $41.6 million at June 30, 2021 compared to $44.0 million at the end of the prior quarter. During the second quarter of 2021, the Company recorded total net charge-offs of $2.1 million, or 0.09% of average total loans on an annualized basis compared to $1.4 million and 0.06% in the prior quarter, respectively.

At June 30, 2021, approximately $149.8 million in COVID-19 modified loans remained under modified payment terms, down from $178.4 million at March 31, 2021. The commercial real estate portfolio contained $113.3 million of the remaining COVID-19 modifications at period end, of which $89.3 million or 79% were in the hotel segment.

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

CONFERENCE CALL INFORMATION

A conference call and webcast covering Eastern’s second quarter 2021 earnings will be held on Friday, July 30, 2021 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 7899073. 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.

Following the webcast, Eastern will post its general investor presentation incorporating the second quarter results on its website at investor.easternbank.com under the “Events & Presentations” section.

DIVIDEND DECLARED

The Company’s Board of Directors declared a quarterly cash dividend of $0.08 per common share, payable on September 15, 2021, to shareholders of record as of the close of business on September 3, 2021.

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 110 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of June 30, 2021, Eastern Bank had approximately $17 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 1,900 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 Eastern Bank Foundation (“EBF”, formerly known as the Eastern Bank Charitable Foundation) 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 expense because it contains expense components, such as expense associated with rabbi trust accounts, which is market-driven, over which the Company cannot exercise control. Accordingly, a reconciliation of the Company’s outlook for its noninterest expense on an operating basis to an outlook for total noninterest expense 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 June 30, 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 associated with its proposed merger with Century, including the possibility that revenue or expense synergies or the other expected benefits of the transaction may not materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; that the transaction may not be timely completed, if at all; that prior to the completion of the transaction or thereafter, the Company’s or Century’s businesses may not perform as expected due to transaction-related uncertainty or other factors; that the Company is unable to successfully implement integration strategies; that required regulatory or other approvals are not obtained or other closing conditions are not satisfied in a timely manner or at all; that the timing of completion of the proposed merger is dependent on various factors that cannot be predicted with precision at this point; reputational risks and the reaction of the companies’ customers to the transaction; the inability to implement onboarding plans and other consequences associated with mergers; and diversion of management time on merger-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; and credit quality, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans. 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; 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)		Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020
Earnings data
Net interest income		$	104,608			$	100,091			$	103,608			$	98,742			$	98,755
Noninterest income			45,733				55,212				49,638				47,709				47,657
Total revenue			150,341				155,303				153,246				146,451				146,412
Noninterest expense			107,335				94,049				199,169				109,817				100,765
Pre-tax, pre-provision income (loss)			43,006				61,254				(45,923	)			36,634				45,647
(Release of) provision for allowance for loan losses			(3,300	)			(580	)			900				700				8,600
Pre-tax income (loss)			46,306				61,834				(46,823	)			35,934				37,047
Net income (loss)			34,809				47,663				(44,062	)			28,505				29,850
Operating net income (non-GAAP)			37,097				46,537				31,612				32,322				27,301
Per-share data
Earnings (loss) per share		$	0.20			$	0.28			$	(0.26	)			n.a.				n.a.
Operating earnings per share (non-GAAP)		$	0.22			$	0.27			$	0.18				n.a.				n.a.
Book value per share		$	18.37			$	18.14			$	18.36				n.a.				n.a.
Tangible book value per share (non-GAAP)		$	16.33			$	16.12			$	16.34				n.a.				n.a.
Profitability
Return on average assets (1)			0.83	%			1.19	%			(1.11	)%			0.80	%			0.88	%
Operating return on average assets (non-GAAP) (1)			0.89	%			1.15	%			0.79	%			0.90	%			0.81	%
Return on average shareholders' equity (1)			4.10	%			5.66	%			(5.61	)%			6.65	%			7.11	%
Operating return on average shareholders' equity (non-GAAP) (1)			4.36	%			5.53	%			4.02	%			7.54	%			6.51	%
Net interest margin (FTE) (1)			2.69	%			2.71	%			2.84	%			3.04	%			3.23	%
Cost of deposits (1)			0.03	%			0.03	%			0.03	%			0.06	%			0.11	%
Fee income ratio			30.42	%			35.55	%			32.39	%			32.58	%			32.55	%
Efficiency ratio			71.39	%			60.56	%			129.97	%			74.99	%			68.82	%
Operating efficiency ratio (non-GAAP)			67.78	%			60.22	%			68.33	%			69.95	%			68.90	%
Balance Sheet (end of period)
Total assets		$	17,047,453			$	16,726,795			$	15,964,190			$	15,460,594			$	13,996,523
Total loans			9,621,075				9,916,475				9,730,525				9,944,241				10,014,338
Total deposits			13,250,433				12,980,875				12,155,784				13,332,585				11,846,765
Total loans / total deposits			73	%			76	%			80	%			75	%			85	%
PPP loans		$	825,784			$	1,238,053			$	1,026,117			$	1,123,493			$	1,100,181
Asset quality
Allowance for loan losses ("ALLL")		$	105,637			$	111,080			$	113,031			$	115,432			$	116,636
ALLL / total nonperforming loans ("NPLs")			253.74	%			252.72	%			261.33	%			257.47	%			210.55	%
Total NPLs / total loans			0.43	%			0.44	%			0.45	%			0.45	%			0.56	%
Total NPLs / total loans (excl. PPP loans) (non-GAAP)			0.47	%			0.51	%			0.50	%			0.51	%			0.62	%
Net charge-offs (NCOs) / average total loans (1)			0.09	%			0.06	%			0.13	%			0.08	%			0.04	%
NCOs / average total loans (excl. PPP loans) (non-GAAP) (1)			0.10	%			0.06	%			0.15	%			0.09	%			0.05	%
Remaining COVID-19 loan modifications (2)		$	149,805			$	178,430			$	332,682			$	701,227			$	945,995
Capital adequacy
Shareholders' equity / assets			20.12	%			20.25	%			21.47	%			11.08	%			12.10	%
Tangible shareholders' equity / tangible assets (non-GAAP)			18.30	%			18.42	%			19.58	%			8.87	%			9.67	%
(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												Jun 30, 2021 change from
(Unaudited, dollars in thousands)		Jun 30, 2021				Mar 31, 2021				Jun 30, 2020				Mar 31, 2021						Jun 30, 2020
ASSETS														△ $			△ %			△ $			△ %
Cash and due from banks		$	58,490			$	79,497			$	67,264			(21,007	)		(26	)%		(8,774	)		(13	)%
Short-term investments			1,505,757				1,780,835				1,365,297			(275,078	)		(15	)%		140,460			10	%
Cash and cash equivalents			1,564,247				1,860,332				1,432,561			(296,085	)		(16	)%		131,686			9	%
Available for sale securities			4,848,781				3,986,253				1,600,354			862,528			22	%		3,248,427			203	%
Total securities			4,848,781				3,986,253				1,600,354			862,528			22	%		3,248,427			203	%
Loans held for sale			2,734				2,022				2,972			712			35	%		(238	)		(8	)%
Loans:
Commercial and industrial			1,740,679				1,986,366				2,271,700			(245,687	)		(12	)%		(531,021	)		(23	)%
Commercial real estate			3,775,771				3,676,941				3,584,358			98,830			3	%		191,413			5	%
Commercial construction			237,927				249,416				282,246			(11,489	)		(5	)%		(44,319	)		(16	)%
Business banking			1,339,852				1,513,051				1,234,961			(173,199	)		(11	)%		104,891			8	%
Total commercial loans			7,094,229				7,425,774				7,373,265			(331,545	)		(4	)%		(279,036	)		(4	)%
Residential real estate			1,457,498				1,406,510				1,400,855			50,988			4	%		56,643			4	%
Consumer home equity			834,938				832,466				905,484			2,472			—	%		(70,546	)		(8	)%
Other consumer			234,410				251,725				334,734			(17,315	)		(7	)%		(100,324	)		(30	)%
Total loans			9,621,075				9,916,475				10,014,338			(295,400	)		(3	)%		(393,263	)		(4	)%
Allowance for loan losses			(105,637	)			(111,080	)			(116,636	)		5,443			(5	)%		10,999			(9	)%
Unamortized prem./disc. and def. fees			(29,739	)			(32,673	)			(34,722	)		2,934			(9	)%		4,983			(14	)%
Net loans			9,485,699				9,772,722				9,862,980			(287,023	)		(3	)%		(377,281	)		(4	)%
Federal Home Loan Bank stock, at cost			10,601				8,805				8,805			1,796			20	%		1,796			20	%
Premises and equipment			44,733				46,619				52,475			(1,886	)		(4	)%		(7,742	)		(15	)%
Bank-owned life insurance			79,634				79,110				77,528			524			1	%		2,106			3	%
Goodwill and other intangibles, net			380,402				376,002				376,331			4,400			1	%		4,071			1	%
Deferred income taxes, net			26,161				31,508				7,663			(5,347	)		(17	)%		18,498			241	%
Prepaid expenses			145,941				150,453				92,517			(4,512	)		(3	)%		53,424			58	%
Other assets			458,520				412,969				482,337			45,551			11	%		(23,817	)		(5	)%
Total assets			17,047,453				16,726,795				13,996,523			320,658			2	%		3,050,930			22	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand			5,399,297				5,369,164				4,740,125			30,133			1	%		659,172			14	%
Interest checking accounts			2,656,610				2,482,731				2,385,912			173,879			7	%		270,698			11	%
Savings accounts			1,403,472				1,362,463				1,157,606			41,009			3	%		245,866			21	%
Money market investment			3,544,897				3,522,990				3,254,202			21,907			1	%		290,695			9	%
Certificates of deposit			246,157				243,527				308,920			2,630			1	%		(62,763	)		(20	)%
Total deposits			13,250,433				12,980,875				11,846,765			269,558			2	%		1,403,668			12	%
Borrowed funds:
Federal Home Loan Bank advances			14,323				14,473				14,922			(150	)		(1	)%		(599	)		(4	)%
Escrow deposits of borrowers			14,119				14,878				14,233			(759	)		(5	)%		(114	)		(1	)%
Total borrowed funds			28,442				29,351				29,155			(909	)		(3	)%		(713	)		(2	)%
Other liabilities			337,956				329,524				426,973			8,432			3	%		(89,017	)		(21	)%
Total liabilities			13,616,831				13,339,750				12,302,893			277,081			2	%		1,313,938			11	%
Shareholders' equity:
Common shares			1,868				1,868				—			—			—	%		1,868			—	%
Additional paid-in capital			1,856,241				1,854,895				—			1,346			—	%		1,856,241			—	%
Unallocated common shares held by the employee stock ownership plan ("ESOP")			(145,219	)			(146,472	)			—			1,253			(1	)%		(145,219	)		—	%
Retained earnings			1,723,979				1,702,946				1,681,164			21,033			1	%		42,815			3	%
Accumulated other comprehensive income ("AOCI"), net of tax			(6,247	)			(26,192	)			12,466			19,945			(76	)%		(18,713	)		(150	)%
Total shareholders' equity			3,430,622				3,387,045				1,693,630			43,577			1	%		1,736,992			103	%
Total liabilities and shareholders' equity			17,047,453				16,726,795				13,996,523			320,658			2	%		3,050,930			22	%

EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
		Three months ended												Three months ended Jun 30, 2021 change from three months ended
(Unaudited, dollars in thousands, except share data)		Jun 30, 2021				Mar 31, 2021				Jun 30, 2020				Mar 31, 2021						Jun 30, 2020
Interest and dividend income:														△ $			△ %			△ $			△ %
Interest and fees on loans		$	90,936			$	88,639			$	92,143			2,297			3	%		(1,207	)		(1	)%
Taxable interest and dividends on available for sale securities			12,457				10,206				7,600			2,251			22	%		4,857			64	%
Non-taxable interest and dividends on available for sale securities			1,857				1,856				1,905			1			—	%		(48	)		(3	)%
Interest on federal funds sold and other short-term investments			431				432				284			(1	)		—	%		147			52	%
Interest and dividends on trading securities			—				—				1			—			—	%		(1	)		(100	)%
Total interest and dividend income			105,681				101,133				101,933			4,548			4	%		3,748			4	%
Interest expense:
Interest on deposits			1,031				1,002				3,104			29			3	%		(2,073	)		(67	)%
Interest on borrowings			42				40				74			2			5	%		(32	)		(43	)%
Total interest expense			1,073				1,042				3,178			31			3	%		(2,105	)		(66	)%
Net interest income			104,608				100,091				98,755			4,517			5	%		5,853			6	%
(Release of) provision for allowance for loan losses			(3,300	)			(580	)			8,600			(2,720	)		469	%		(11,900	)		(138	)%
Net interest income after provision for loan losses			107,908				100,671				90,155			7,237			7	%		17,753			20	%
Noninterest income:
Insurance commissions			23,664				28,147				22,697			(4,483	)		(16	)%		967			4	%
Service charges on deposit accounts			5,708				5,367				4,364			341			6	%		1,344			31	%
Trust and investment advisory fees			6,074				5,663				5,194			411			7	%		880			17	%
Debit card processing fees			3,170				2,749				2,337			421			15	%		833			36	%
Interest rate swap (losses) income			(1,164	)			5,405				771			(6,569	)		(122	)%		(1,935	)		(251	)%
Income from investments held in rabbi trusts			4,216				1,846				7,745			2,370			128	%		(3,529	)		(46	)%
Losses on trading securities, net			—				—				(1	)		—			—	%		1			(100	)%
Gains on sales of mortgage loans held for sale, net			848				1,479				1,420			(631	)		(43	)%		(572	)		(40	)%
Gains on sales of securities available for sale, net			1				1,164				163			(1,163	)		(100	)%		(162	)		(99	)%
Other			3,216				3,392				2,967			(176	)		(5	)%		249			8	%
Total noninterest income			45,733				55,212				47,657			(9,479	)		(17	)%		(1,924	)		(4	)%
Noninterest expense:
Salaries and employee benefits			69,276				64,040				63,335			5,236			8	%		5,941			9	%
Office occupancy and equipment			8,094				8,217				8,615			(123	)		(1	)%		(521	)		(6	)%
Data processing			13,572				12,129				12,180			1,443			12	%		1,392			11	%
Professional services			6,439				4,148				4,396			2,291			55	%		2,043			46	%
Charitable contributions			—				—				2,797			—			—	%		(2,797	)		(100	)%
Marketing			3,497				1,691				1,645			1,806			107	%		1,852			113	%
Loan expenses			1,854				1,847				2,036			7			—	%		(182	)		(9	)%
Federal Deposit Insurance Corporation ("FDIC") insurance			985				948				944			37			4	%		41			4	%
Amortization of intangible assets			625				532				701			93			17	%		(76	)		(11	)%
Other			2,993				497				4,116			2,496			502	%		(1,123	)		(27	)%
Total noninterest expense			107,335				94,049				100,765			13,286			14	%		6,570			7	%
Income before income tax expense			46,306				61,834				37,047			(15,528	)		(25	)%		9,259			25	%
Income tax expense			11,497				14,171				7,197			(2,674	)		(19	)%		4,300			60	%
Net income			34,809				47,663				29,850			(12,854	)		(27	)%		4,959			17	%
Share data:
Weighted average common shares outstanding (1)			172,173,707				172,049,044				n.a.
Earnings per share		$	0.20			$	0.28				n.a.
(1) Shares held by the Company’s Employee Stock Ownership Plan (“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 CONSOLIDATED STATEMENTS OF INCOME
		Six months ended
(Unaudited, dollars in thousands, except share data)		Jun 30, 2021				Jun 30, 2020				Change
Interest and dividend income:										△ $			△ %
Interest and fees on loans		$	179,575			$	187,681			(8,106	)		(4	)%
Taxable interest and dividends on available for sale securities			22,663				15,778			6,885			44	%
Non-taxable interest and dividends on available for sale securities			3,713				3,826			(113	)		(3	)%
Interest on federal funds sold and other short-term investments			863				801			62			8	%
Interest and dividends on trading securities			—				6			(6	)		(100	)%
Total interest and dividend income			206,814				208,092			(1,278	)		(1	)%
Interest expense:
Interest on deposits			2,033				8,518			(6,485	)		(76	)%
Interest on borrowings			82				673			(591	)		(88	)%
Total interest expense			2,115				9,191			(7,076	)		(77	)%
Net interest income			204,699				198,901			5,798			3	%
(Release of) provision for allowance for loan losses			(3,880	)			37,200			(41,080	)		(110	)%
Net interest income after provision for loan losses			208,579				161,701			46,878			29	%
Noninterest income:
Insurance commissions			51,811				50,174			1,637			3	%
Service charges on deposit accounts			11,075				10,462			613			6	%
Trust and investment advisory fees			11,737				10,289			1,448			14	%
Debit card processing fees			5,919				4,807			1,112			23	%
Interest rate swap income (losses)			4,241				(5,238	)		9,479			(181	)%
Income from investments held in rabbi trusts			6,062				1,002			5,060			505	%
Losses on trading securities, net			—				(3	)		3			(100	)%
Gains on sales of mortgage loans held for sale, net			2,327				1,513			814			54	%
Gains on sales of securities available for sale, net			1,165				285			880			309	%
Other			6,608				7,735			(1,127	)		(15	)%
Total noninterest income			100,945				81,026			19,919			25	%
Noninterest expense:
Salaries and employee benefits			133,316				124,924			8,392			7	%
Office occupancy and equipment			16,311				17,304			(993	)		(6	)%
Data processing			25,701				22,184			3,517			16	%
Professional services			10,587				8,085			2,502			31	%
Charitable contributions			—				3,984			(3,984	)		(100	)%
Marketing			5,188				4,113			1,075			26	%
Loan expenses			3,701				3,148			553			18	%
FDIC insurance			1,933				1,850			83			4	%
Amortization of intangible assets			1,157				1,403			(246	)		(18	)%
Other			3,490				8,942			(5,452	)		(61	)%
Total noninterest expense			201,384				195,937			5,447			3	%
Income before income tax expense			108,140				46,790			61,350			131	%
Income tax expense			25,668				8,495			17,173			202	%
Net income			82,472				38,295			44,177			115	%
Share data:
Weighted average common shares outstanding (1)			172,111,372				n.a.
Earnings per share		$	0.48				n.a.
(1) Shares held by the Company’s Employee Stock Ownership Plan (“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
		Jun 30, 2021									Mar 31, 2021									Jun 30, 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		$	7,301,745		$	71,747		3.94	%		$	7,317,951		$	69,210		3.84	%		$	7,195,093		$	69,779		3.90	%
Residential			1,433,056			11,397		3.19	%			1,393,139			11,274		3.28	%			1,416,326			12,555		3.57	%
Consumer			1,061,900			8,597		3.25	%			1,105,698			8,937		3.28	%			1,263,691			10,610		3.38	%
Total loans			9,796,701			91,741		3.76	%			9,816,788			89,421		3.69	%			9,875,110			92,944		3.79	%
Investment securities			4,344,690			14,778		1.36	%			3,631,530			12,577		1.40	%			1,455,901			10,083		2.79	%
Federal funds sold and other short-term investments			1,617,741			431		0.11	%			1,740,561			432		0.10	%			1,148,332			284		0.10	%
Total interest-earning assets			15,759,132			106,950		2.72	%			15,188,879			102,430		2.73	%			12,479,343			103,311		3.33	%
Non-interest-earning assets			1,061,121									1,120,603									1,106,217
Total assets		$	16,820,253								$	16,309,482								$	13,585,560
Interest-bearing liabilities:
Deposits:
Savings		$	1,385,735		$	69		0.02	%		$	1,300,057		$	64		0.02	%		$	1,095,806		$	64		0.02	%
Interest checking			2,541,862			253		0.04	%			2,391,025			234		0.04	%			2,414,356			649		0.11	%
Money market			3,523,330			605		0.07	%			3,440,214			587		0.07	%			3,192,669			1,929		0.24	%
Time deposits			246,801			104		0.17	%			251,115			117		0.19	%			313,410			462		0.59	%
Total interest-bearing deposits			7,697,728			1,031		0.05	%			7,382,411			1,002		0.06	%			7,016,241			3,104		0.18	%
Borrowings			25,042			42		0.67	%			25,625			40		0.63	%			74,960			74		0.40	%
Total interest-bearing liabilities			7,722,770			1,073		0.06	%			7,408,036			1,042		0.06	%			7,091,201			3,178		0.18	%
Demand deposit accounts			5,355,170									5,125,831									4,448,756
Other noninterest-bearing liabilities			335,816									358,087									356,700
Total liabilities			13,413,756									12,891,954									11,896,657
Shareholders' equity			3,406,497									3,417,528									1,688,903
Total liabilities and shareholders' equity		$	16,820,253								$	16,309,482								$	13,585,560
Net interest income - FTE					$	105,877								$	101,388								$	100,133
Net interest rate spread (2)								2.66	%								2.67	%								3.15	%
Net interest-earning assets (3)		$	8,036,362								$	7,780,843								$	5,388,142
Net interest margin - FTE (4)								2.69	%								2.71	%								3.23	%
(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 six months ended
		Jun 30, 2021									Jun 30, 2020
(Unaudited, dollars in thousands)		Avg. Balance			Interest			Yield / Cost (5)			Avg. Balance			Interest			Yield / Cost (5)
Interest-earning assets:
Loans (1):
Commercial		$	7,309,803		$	140,952		3.89	%		$	6,735,075		$	139,394		4.16	%
Residential			1,413,208			22,671		3.24	%			1,423,161			25,858		3.65	%
Consumer			1,083,677			17,534		3.26	%			1,287,430			24,017		3.75	%
Total loans			9,806,688			181,157		3.73	%			9,445,666			189,269		4.03	%
Investment securities			3,990,080			27,360		1.38	%			1,478,156			20,768		2.83	%
Federal funds sold and other short-term investments			1,678,812			863		0.10	%			694,386			801		0.23	%
Total interest earning assets			15,475,580			209,380		2.73	%			11,618,208			210,838		3.65	%
Non-interest-earning assets			1,089,585									1,064,218
Total assets		$	16,565,165								$	12,682,426
Interest-bearing liabilities:
Deposits:
Savings		$	1,343,133		$	133		0.02	%		$	1,036,344		$	118		0.02	%
Interest checking			2,466,860			487		0.04	%			2,158,242			1,467		0.14	%
Money market			3,482,002			1,193		0.07	%			3,087,048			5,833		0.38	%
Time deposits			248,946			220		0.18	%			320,277			1,100		0.69	%
Total interest-bearing deposits			7,540,941			2,033		0.05	%			6,601,911			8,518		0.26	%
Borrowings			25,332			82		0.65	%			119,211			673		1.14	%
Total interest-bearing liabilities			7,566,273			2,115		0.06	%			6,721,122			9,191		0.27	%
Demand deposit accounts			5,241,134									3,963,066
Other noninterest-bearing liabilities			345,776									337,679
Total liabilities			13,153,183									11,021,867
Shareholders' equity			3,411,982									1,660,559
Total liabilities and shareholders' equity		$	16,565,165								$	12,682,426
Net interest income - FTE					$	207,265								$	201,647
Net interest rate spread (2)								2.67	%								3.38	%
Net interest-earning assets (3)		$	7,909,307								$	4,897,086
Net interest margin - FTE (4)								2.70	%								3.49	%
(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 ASSET QUALITY - NON-PERFORMING ASSETS (1)
		As of
		Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020
(Unaudited, dollars in thousands)
Non-accrual loans:
Commercial		$	29,356			$	30,275			$	30,059			$	28,968			$	31,273
Residential			6,445				8,127				6,815				7,419				11,693
Consumer			4,106				3,873				4,131				4,727				9,374
Total non-accrual loans			39,907				42,275				41,005				41,114				52,340
Accruing loans past due 90 days or more:
Commercial			1,439				1,390				1,959				3,384				2,802
Residential			277				280				279				326				244
Consumer			9				9				9				9				9
Total accruing loans past due 90 days or more			1,725				1,679				2,247				3,719				3,055
Total non-performing loans			41,632				43,954				43,252				44,833				55,395
Other real estate owned			38				—				—				40				40
Other non-performing assets:			—				—				—				—				—
Total non-performing assets		$	41,670			$	43,954			$	43,252			$	44,873			$	55,435
Total accruing troubled debt restructured loans		$	38,316			$	39,367			$	41,095			$	39,881			$	40,691
Total non-performing loans to total loans			0.43	%			0.44	%			0.45	%			0.45	%			0.56	%
Total non-performing assets to total assets			0.24	%			0.26	%			0.27	%			0.29	%			0.40	%
(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
		Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020
(Unaudited, dollars in thousands)
Average total loans		$	9,796,701			$	9,816,788			$	9,796,697			$	9,914,731			$	9,875,110
Allowance for loan losses, beginning of the period		$	111,080			$	113,031			$	115,432			$	116,636			$	109,138
Charged-off loans:
Commercial and industrial			550				—				1,603				140				27
Commercial real estate			—				234				—				—				24
Commercial construction			—				—				—				—				—
Business banking			1,838				1,384				1,433				1,179				1,198
Residential real estate			—				—				—				—				—
Consumer home equity			—				—				79				22				—
Other consumer			275				364				713				1,077				15
Total charged-off loans			2,663				1,982				3,828				2,418				1,264
Recoveries on loans previously charged-off:
Commercial and industrial			13				9				92				306				58
Commercial real estate			4				—				220				4				5
Commercial construction			—				—				—				—				—
Business banking			291				365				47				91				27
Residential real estate			17				10				9				43				13
Consumer home equity			3				71				100				31				8
Other consumer			192				156				59				39				51
Total recoveries			520				611				527				514				162
Net loans charged-off (recoveries):
Commercial and industrial			537				(9	)			1,511				(166	)			(31	)
Commercial real estate			(4	)			234				(220	)			(4	)			19
Commercial construction			—				—				—				—				—
Business banking			1,547				1,019				1,386				1,088				1,171
Residential real estate			(17	)			(10	)			(9	)			(43	)			(13	)
Consumer home equity			(3	)			(71	)			(21	)			(9	)			(8	)
Other consumer			83				208				654				1,038				(36	)
Total net loans charged-off			2,143				1,371				3,301				1,904				1,102
(Release of) provision for loan losses			(3,300	)			(580	)			900				700				8,600
Total allowance for loan losses, end of period		$	105,637			$	111,080			$	113,031			$	115,432			$	116,636
Net charge-offs to average total loans outstanding during this period (1)			0.09	%			0.06	%			0.13	%			0.08	%			0.04	%
Allowance for loan losses as a percent of total loans			1.10	%			1.12	%			1.16	%			1.16	%			1.17	%
Allowance for loan losses as a percent of nonperforming loans			253.74	%			252.72	%			261.33	%			257.47	%			210.55	%
(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)		Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020
Net income (GAAP)		$	34,809			$	47,663			$	(44,062	)		$	28,505			$	29,850
Add:
Noninterest income components:
(Income) from investments held in rabbi trusts			(4,216	)			(1,846	)			(5,535	)			(3,800	)			(7,745	)
(Gain) on sales of securities available for sale, net			(1	)			(1,164	)			(3	)			—				(163	)
(Gain) loss on sale of other assets			(29	)			(18	)			(49	)			71				27
Noninterest expense components:
Rabbi trust employee benefit expense			2,063				986				2,838				1,445				3,985
(Reversal) impairment charge on tax credit investments			(1,419	)			—				3,189				7,590				—
Indirect IPO costs (1)			—				—				—				549				380
(Gain) on sale of OREO			—				—				(61	)			(546	)			—
Merger and acquisition expenses			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			3,202				(1,453	)			91,756				5,309				(3,516	)
Less net tax benefit (expense) associated with non-GAAP adjustments (2)			914				(327	)			16,082				1,492				(967	)
Non-GAAP adjustments, net of tax		$	2,288			$	(1,126	)		$	75,674			$	3,817			$	(2,549	)
Operating net income (non-GAAP)		$	37,097			$	46,537			$	31,612			$	32,322			$	27,301
Weighted average common shares outstanding during the period (3):
Basic			172,173,707				172,049,044				171,812,535				—				—
Diluted			172,173,707				172,049,044				171,812,535				—				—
Earnings (loss) per share, basic		$	0.20			$	0.28			$	(0.26	)			n.a.				n.a.
Earnings (loss) per share, diluted		$	0.20			$	0.28			$	(0.26	)			n.a.				n.a.
Operating earnings per share, basic (non-GAAP)		$	0.22			$	0.27			$	0.18				n.a.				n.a.
Operating earnings per share, diluted (non-GAAP)		$	0.22			$	0.27			$	0.18				n.a.				n.a.
Return on average assets (4)			0.83	%			1.19	%			(1.11	)%			0.80	%			0.88	%
Add:
(Income) from investments held in rabbi trusts (4)			(0.10	)%			(0.05	)%			(0.14	)%			(0.11	)%			(0.23	)%
(Gain) on sales of securities available for sale, net (4)			—	%			(0.03	)%			—	%			—	%			—	%
(Gain) loss on sale of other assets (4)			—	%			—	%			—	%			—	%			—	%
Rabbi trust employee benefit expense (4)			0.05	%			0.02	%			0.07	%			0.04	%			0.12	%
(Reversal) impairment charge on tax credit investments (4)			(0.03	)%			—	%			0.08	%			0.21	%			—	%
Indirect IPO costs (1) (4)			—	%			—	%			—	%			0.02	%			0.01	%
(Gain) on sale of OREO (4)			—	%			—	%			—	%			(0.02	)%			—	%
Merger and acquisition expenses (4)			0.08	%			0.01	%			—	%			—	%			—	%
Settlement and expenses for putative consumer class action matters (4)			0.08	%			—	%			—	%			—	%			—	%
Stock donation to the EBF (4)			—	%			—	%			2.29	%			—	%			—	%
Less net tax benefit (expense) associated with non-GAAP adjustments (2) (4)			0.02	%			(0.01	)%			0.40	%			0.04	%			(0.03	)%
Operating return on average assets (non-GAAP) (4)			0.89	%			1.15	%			0.79	%			0.90	%			0.81	%
Return on average shareholders' equity (4)			4.10	%			5.66	%			(5.61	)%			6.65	%			7.11	%
Add:
(Income) from investments held in rabbi trusts (4)			(0.50	)%			(0.22	)%			(0.70	)%			(0.89	)%			(1.84	)%
(Gain) on sales of securities available for sale, net (4)			—	%			(0.14	)%			—	%			—	%			(0.04	)%
(Gain) loss on sale of other assets (4)			—	%			—	%			(0.01	)%			0.02	%			0.01	%
Rabbi trust employee benefit expense (4)			0.24	%			0.12	%			0.36	%			0.34	%			0.95	%
(Reversal) impairment charge on tax credit investments (4)			(0.17	)%			—	%			0.41	%			1.77	%			—	%
Indirect IPO costs (1) (4)			—	%			—	%			—	%			0.13	%			0.09	%
(Gain) on sale of OREO (4)			—	%			—	%			(0.01	)%			(0.13	)%			—	%
Merger and acquisition expenses (4)			0.41	%			0.07	%			0.01	%			—	%			—	%
Settlement and expenses for putative consumer class action matters (4)			0.39	%			—	%			—	%			—	%			—	%
Stock donation to the EBF (4)			—	%			—	%			11.62	%			—	%			—	%
Less net tax benefit (expense) associated with non-GAAP adjustments (2) (4)			0.11	%			(0.04	)%			2.05	%			0.35	%			(0.23	)%
Operating return on average shareholders' equity (non-GAAP) (4)			4.36	%			5.53	%			4.02	%			7.54	%			6.51	%
(1) Reflects costs associated with the Company's IPO that are indirectly related to the offering and were not recorded as a reduction of capital.
(2) 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 the Company's combined statutory tax rate only to those items included in net taxable income. Additionally, the net tax benefit (expense) for the impairment charge of tax credit investment includes associated tax credit benefits.
(3) Shares held by the Company’s Employee Stock Ownership Plan (“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.
(4) 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
		Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020
(Unaudited, dollars in thousands)
Net interest income (GAAP)		$	104,608			$	100,091			$	103,608			$	98,742			$	98,755
Add:
Tax-equivalent adjustment (non-GAAP)			1,269				1,297				1,357				1,353				1,378
Fully-taxable equivalent net interest income (non-GAAP)		$	105,877			$	101,388			$	104,965			$	100,095			$	100,133
Noninterest income (GAAP)		$	45,733			$	55,212			$	49,638			$	47,709			$	47,657
Less:
Income from investments held in rabbi trusts			4,216				1,846				5,535				3,800				7,745
Gain on sales of securities available for sale, net			1				1,164				3				—				163
Gain (loss) on sale of other assets			29				18				49				(71	)			(27	)
Noninterest income on an operating basis (non-GAAP)		$	41,487			$	52,184			$	44,051			$	43,980			$	39,776
Noninterest expense (GAAP)		$	107,335			$	94,049			$	199,169			$	109,817			$	100,765
Less:
Rabbi trust employee benefit expense			2,063				986				2,838				1,445				3,985
(Reversal) impairment charge on tax credit investments			(1,419	)			—				3,189				7,590				—
Indirect IPO costs (1)			—				—				—				549				380
(Gain) on sale of OREO			—				—				(61	)			(546	)			—
Merger and acquisition expenses			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)		$	99,887			$	92,474			$	101,826			$	100,779			$	96,400
Total revenue (GAAP)		$	150,341			$	155,303			$	153,246			$	146,451			$	146,412
Total operating revenue (non-GAAP)		$	147,364			$	153,572			$	149,016			$	144,075			$	139,909
Efficiency ratio (GAAP)			71.39	%			60.56	%			129.97	%			74.99	%			68.82	%
Operating efficiency ratio (non-GAAP)			67.78	%			60.22	%			68.33	%			69.95	%			68.90	%
Noninterest income / total revenue (GAAP)			30.42	%			35.55	%			32.39	%			32.58	%			32.55	%
Noninterest income / total revenue on an operating basis (non-GAAP)			28.15	%			33.98	%			29.56	%			30.53	%			28.43	%
(1) Reflects costs associated with the Company's IPO that are indirectly related to the offering and were not recorded as a reduction of capital.

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
		Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020
(Unaudited, dollars in thousands, except share data)
Tangible shareholders' equity:
Total shareholders' equity (GAAP)		$	3,430,622			$	3,387,045			$	3,428,052			$	1,713,372			$	1,693,630
Less: Goodwill and other intangibles			380,402				376,002				376,534				375,632				376,331
Tangible shareholders' equity (non-GAAP)			3,050,220				3,011,043				3,051,518				1,337,740				1,317,299
Tangible assets:
Total assets (GAAP)			17,047,453				16,726,795				15,964,190				15,460,594				13,996,523
Less: Goodwill and other intangibles			380,402				376,002				376,534				375,632				376,331
Tangible assets (non-GAAP)		$	16,667,051			$	16,350,793			$	15,587,656			$	15,084,962			$	13,620,192
Shareholders' equity to assets ratio (GAAP)			20.12	%			20.25	%			21.47	%			11.08	%			12.10	%
Tangible shareholders' equity to tangible assets ratio (non-GAAP)			18.30	%			18.42	%			19.58	%			8.87	%			9.67	%
Common shares outstanding			186,758,154				186,758,154				186,758,154				—				—
Book value per share (GAAP)		$	18.37			$	18.14			$	18.36				n.a.				n.a.
Tangible book value per share (non-GAAP)		$	16.33			$	16.12			$	16.34				n.a.				n.a.

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)		Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020
Total loans excluding PPP loans:
Total loans (GAAP) (1)		$	9,591,336			$	9,883,802			$	9,706,989			$	9,911,494			$	9,979,616
Less: PPP loans (1)			799,964				1,210,598				1,007,487				1,098,883				1,072,312
Total loans excluding PPP loans (non-GAAP)		$	8,791,372			$	8,673,204			$	8,699,502			$	8,812,611			$	8,907,304
Total nonperforming loans (NPLs) (GAAP)		$	41,632			$	43,954			$	43,252			$	44,833			$	55,395
Total NPLs / total loans (GAAP)			0.43	%			0.44	%			0.45	%			0.45	%			0.56	%
Total NPLs / total loans (excl. PPP loans) (non-GAAP)			0.47	%			0.51	%			0.50	%			0.51	%			0.62	%
Allowance for loan losses (ALLL) (GAAP)		$	105,637			$	111,080			$	113,031			$	115,432			$	116,636
ALLL / total loans (GAAP)			1.10	%			1.12	%			1.16	%			1.16	%			1.17	%
ALLL / total loans (excl. PPP loans) (non-GAAP)			1.20	%			1.28	%			1.30	%			1.31	%			1.31	%
		As of and for the three months ended
(Unaudited, dollars in thousands)		Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020				Jun 30, 2020
Average total loans excluding PPP Loans:
Average total loans (GAAP)		$	9,796,701			$	9,816,788			$	9,796,697			$	9,914,731			$	9,875,110
Less: Average PPP loans			1,073,688				1,131,516				1,076,155				1,091,464				818,665
Average total loans excluding PPP loans (non-GAAP)		$	8,723,013			$	8,685,272			$	8,720,542			$	8,823,267			$	9,056,445
Total net loans charged-off (NCOs) (GAAP)		$	2,143			$	1,371			$	3,301			$	1,904			$	1,102
NCOs / Average total loans (GAAP) (2)			0.09	%			0.06	%			0.13	%			0.08	%			0.04	%
NCOs / Average total loans (excl. PPP loans) (non-GAAP) (2)			0.10	%			0.06	%			0.15	%			0.09	%			0.05	%
(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
		Jun 30, 2021											Mar 31, 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)		$	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	%
SBA 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	%
Deferred loan fee income adjustment			—				—			—	%			—				—			—	%
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	)%										(0.25	)%
		Dec 31, 2020											Sep 30, 2020
		Volume				Interest				Margin Impact (1)			Volume				Interest				Margin Impact (1)
Reported total average interest-earning assets, net interest income, and net interest margin (2)		$	14,715,494			$	104,965			2.84	%		$	13,089,839			$	100,095			3.04	%
Non-GAAP adjustments:
PPP loan volume earning 1%			(1,076,155	)			(2,741	)		0.14	%			(1,091,464	)			(2,795	)		0.18	%
SBA PPP loan fee accretion, net of deferred origination cost amortization			—				(6,102	)		(0.16	)%			—				(4,125	)		(0.13	)%
Excess cash (3)			(1,996,808	)			(502	)		0.43	%			(1,200,250	)			(302	)		0.30	%
Deferred loan fee income adjustment			—				(3,774	)		(0.10	)%			—				—			—	%
Core margin (Non-GAAP) (4)		$	11,642,531			$	91,846			3.14	%		$	10,798,125			$	92,873			3.42	%
Core margin change from prior quarter										(0.28	)%
(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 11 basis points in the three months ended June 30, 2021 and 10 basis points in prior quarters.
(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 December 31, 2020 (1)						Remaining COVID-19 Modifications as of March 31, 2021 (1)						Remaining COVID-19 Modifications as of June 30, 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		$	34,076		1.7	%		$	22,776		1.1	%		$	18,850		1.1	%
Commercial real estate			231,794		6.5	%			127,683		3.5	%			113,301		3.0	%
Commercial construction			10,987		3.6	%			—		—	%			—		—	%
Business banking			23,434		1.8	%			11,681		0.8	%			2,102		0.2	%
Residential real estate			26,772		2.0	%			13,754		1.0	%			13,428		0.9	%
Consumer home equity			3,432		0.4	%			1,274		0.2	%			1,124		0.1	%
Other consumer			2,187		0.8	%			1,262		0.5	%			999		0.4	%
Total		$	332,682		3.4	%		$	178,430		1.8	%		$	149,805		1.6	%
(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.

 

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FAQ

What were the earnings results for Eastern Bankshares in Q2 2021?

Eastern Bankshares reported a net income of $34.8 million or $0.20 per share in Q2 2021.

What is the dividend declared by Eastern Bankshares for Q2 2021?

A quarterly cash dividend of $0.08 per share was declared, payable on September 15, 2021.

How did Eastern Bankshares' loan growth perform in Q2 2021?

Excluding PPP loans, total loans grew by $117 million, or over 5% on an annualized basis.

What factors impacted Eastern Bankshares' financial results in Q2 2021?

Results were affected by $3.5 million in merger expenses and $3.3 million related to litigation settlements.