Eastern Bankshares, Inc. Reports Third Quarter 2021 Financial Results

Rhea-AI Summary

Eastern Bankshares, Inc. (EBC) reported a net income of $37.1 million, or $0.22 per share, for Q3 2021, marking an increase from $34.8 million in Q2 2021. The company declared a quarterly dividend of $0.08 per share and announced a share repurchase program to buy back 5% of outstanding shares, pending Federal Reserve approval. Loan growth was robust at $175 million (8% annualized), while nonperforming loans slightly rose to $42.1 million. Total assets reached $17.5 billion, with a decrease in net interest income to $102.7 million, attributed to a low interest rate environment.

Positive

• Q3 net income increased to $37.1 million from $34.8 million in Q2 2021.
• Strong loan growth of $175 million, representing an 8% annualized increase.
• Approved share repurchase program for up to 9,337,900 shares, which is 5% of outstanding shares.

Negative

• Net interest income decreased by $1.9 million to $102.7 million quarter-over-quarter.
• Nonperforming loans slightly increased to $42.1 million from $41.7 million.

Company Announces Intent to Adopt Share Repurchase Program and Declares Quarterly Cash Dividend

BOSTON--(BUSINESS WIRE)-- Eastern Bankshares, Inc. (the “Company,” or together with its affiliates and subsidiaries, “Eastern”) (NASDAQ Global Select Market: EBC), the stock holding company of Eastern Bank, today announced its 2021 third quarter financial results, the declaration of a quarterly cash dividend of $0.08 per share, and the intent to adopt a share repurchase program. Net income for the third quarter of 2021 was $37.1 million, or $0.22 per share, compared to net income of $34.8 million, or $0.20 per share, reported for the second quarter of 2021. Operating net income* for the third quarter of 2021 was $37.4 million, or $0.22 per share, compared to $37.1 million, or $0.22 per share, reported for the prior quarter.

“Our third quarter financial results continue to demonstrate strong financial performance, and as the economy continues to recover from the pandemic, we remain optimistic about our future and long-term profitability,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “In the third quarter, we saw strong loan growth of $175 million excluding PPP loans, or a growth rate of over 8% on an annualized basis, while continuing to demonstrate strong asset quality. As we look to the future, there’s much to be excited about. We believe the combination with Century will solidify our position as the leading community bank here in Boston, and we look forward to continuing the high level of service that Century customers have come to expect. We are especially appreciative of the tremendous commitment our employees have demonstrated to our customers and the communities we serve, and thank them for their extraordinary efforts as our two organizations combine to become one.”

The Company also announced that its Board of Directors has approved a share repurchase program to purchase up to 9,337,900 shares, which represents 5% of the Company’s outstanding shares of common stock over a 12-month period. The authorization is contingent on receipt of approval or non-objection from the Board of Governors of the Federal Reserve System (the “Federal Reserve”). The Company’s request for non-objection is pending. Assuming receipt of approval or non-objection from the Federal Reserve, the Company does not expect the share repurchases to begin before December 2021.

Rivers continued, “We remain committed to a thoughtful and holistic capital management strategy to deliver value for our shareholders. Our Board’s approval of a share repurchase program, together with our regular quarterly dividends, demonstrates our ability to continue to drive growth and effectively deploy capital while creating shareholder value.”

HIGHLIGHTS FOR THE THIRD QUARTER OF 2021

• Operating net income* was $37.4 million in the third quarter, compared to $37.1 million in the prior quarter, and represented a 16% increase from the prior year quarter.
• Loans, excluding Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans, grew $175.3 million, or 8% on an annualized basis from the prior quarter. Commercial loans, excluding PPP loans, and residential loans each grew 9% on an annualized basis from the prior quarter.
• An improving economic outlook coupled with strong asset quality led to a $1.5 million release of loan loss reserves. Nonperforming loans were $42.1 million, or 0.44% of total loans, at the end of the third quarter compared to $41.7 million, or 0.43% of total loans, at the end of the second quarter.

BALANCE SHEET

Total assets were $17.5 billion at September 30, 2021, representing an increase of $413.8 million, or 2%, from June 30, 2021.

• Available for sale securities increased $840.5 million, or 17%, on a consecutive quarter basis, to $5.7 billion, as excess liquidity was deployed into U.S. Agency securities. Cash and equivalents declined $312.5 million to $1.3 billion.
• Total loans were $9.5 billion, representing a decrease of $116.5 million, or 1%, as PPP loan forgiveness outpaced new loan originations in the third quarter. Excluding PPP loans, total loans grew $175.3 million, or 2%, from the prior quarter, driven by growth in commercial loans, excluding PPP loans, of $143.9 million and in residential loans of $33.8 million.
• Deposits totaled $13.6 billion, representing an increase of $399.5 million, or 3%, from June 30, 2021.
• Shareholders’ equity was $3.4 billion, representing a decrease of $1.3 million from the prior quarter. The increase in retained earnings of $23.3 million was more than offset by the decrease in accumulated other comprehensive income of $26.8 million driven by a decrease in the market value of the available for sale investment portfolio.
• At September 30, 2021, book value per share was $18.36 and tangible book value per share* was $16.33.

NET INTEREST INCOME

Net interest income was $102.7 million for the third quarter, compared to $104.6 million in the prior quarter, representing a decrease of $1.9 million on a consecutive quarter basis.

• Included in net interest income was $5.9 million and $9.3 million of SBA PPP fee accretion net of deferred cost amortization in the third quarter and prior quarter, respectively. During the third quarter, $291.8 million in PPP loans were forgiven by the SBA or otherwise paid down compared to $502.9 million in the prior quarter.
• Interest income on available for sale securities increased $1.8 million to $16.2 million in the third quarter as excess cash continued to be deployed into securities. Investment securities averaged $5.2 billion for the third quarter compared to $4.3 billion for the prior quarter, an increase of $905.1 million.
• The net interest margin on a fully tax equivalent (“FTE”) basis* was 2.53% for the third quarter, representing a 16 basis points decrease from the prior quarter. The net interest margin continued to be pressured by the low interest rate environment and excess liquidity. The core net interest margin* in Appendix E demonstrates the impact of excess cash and the PPP program.

NONINTEREST INCOME

Noninterest income was $43.2 million for the third quarter, compared to $45.7 million for the prior quarter, representing a decrease of $2.5 million. Noninterest income on an operating basis* was $43.0 million for the third quarter, compared to $41.5 million for the prior quarter, an increase of $1.5 million.

• Insurance commissions decreased $1.7 million to $22.0 million in the third quarter, compared to $23.7 million in the prior quarter.
• Trust and investment advisory fees increased $0.2 million on a consecutive quarter basis to $6.3 million.
• Loan-level interest rate swap income was $0.9 million in the third quarter, compared to losses of $1.2 million in the prior quarter, representing an increase of $2.0 million that was driven by an increase in the fair value of such interest rate swap transactions due to higher market interest rates.
• Losses on securities held in rabbi trust accounts were $0.3 million in the third quarter compared to income of $4.2 million in the prior quarter, representing a decrease of $4.5 million primarily due to weaker investment performance in the period as compared to the prior quarter.
• The gain on sale of loans held for sale totaled $0.7 million, down $0.1 million from the prior quarter.
• Other noninterest income increased $1.5 million in the third quarter, in part due to a $0.5 million gain on a bank owned life insurance policy, combined with other higher miscellaneous income.

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

NONINTEREST EXPENSE

Noninterest expense was $99.0 million for the third quarter representing a decrease of $8.4 million, primarily driven by lower non-operating expenses* in the third quarter of $5.7 million. Noninterest expense on an operating basis* for the third quarter of 2021 was $97.2 million, compared to $99.9 million in the prior quarter.

• Salaries and employee benefits expense was $66.2 million in the third quarter, representing a decrease of $3.0 million from the prior quarter. The decrease was primarily driven by the Company’s lower benefits expense which was $4.5 million lower than the prior quarter. The decrease in benefits expense was attributable to the decreased market value of investments held in rabbi trust accounts by the Company’s defined contribution supplemental executive retirement plan (“DC SERP”).
• Data processing expense was $12.2 million in the third quarter, a decrease of $1.4 million from the prior quarter. Professional services expense was $4.0 million, a decrease of $2.4 million from the prior quarter. These decreases were primarily attributed to lower costs associated with the pending acquisition of Century compared with such expenses in the prior quarter.
• Marketing expenses were $1.6 million in the third quarter, representing a decrease of $1.9 million from the prior quarter primarily due to a decrease in advertising expense of $1.4 million.
• Other noninterest expense increased $0.7 million in the third quarter to $3.7 million.

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

ASSET QUALITY

The allowance for loan losses was $103.4 million at September 30, 2021, or 1.09% of total loans, compared to $105.6 million or 1.10% of total loans at June 30, 2021. The Company released loan loss reserves totaling $1.5 million in the third quarter, compared to a release of $3.3 million in the prior quarter. The Company followed the incurred loss allowance GAAP accounting model at September 30, 2021 and all preceding periods.

Non-performing loans totaled $42.1 million at September 30, 2021 compared to $41.6 million at the end of the prior quarter. During the third quarter of 2021, the Company recorded total net charge-offs of $0.8 million, or 0.03% of average total loans on an annualized basis compared to $2.1 million and 0.09% in the prior quarter, respectively.

At September 30, 2021, approximately $110.6 million in COVID-19 modified loans remained under modified payment terms, down from $149.8 million at June 30, 2021. The commercial real estate portfolio contained $92.4 million of the remaining COVID-19 modifications at period end, of which $71.5 million or 77% were in the hotel segment.

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

DIVIDENDS AND SHARE REPURCHASES

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

The Company also announced that its Board of Directors has approved a share repurchase program to purchase up to 9,337,900 shares, which represents 5% of the Company’s outstanding shares of common stock over a 12-month period. The authorization is contingent on receipt of approval or non-objection from the Federal Reserve. The Company’s request for non-objection is pending. The Company is unable to predict whether the Federal Reserve will permit the Company to implement the proposed repurchase program in whole or part, whether the Federal Reserve will impose one or more related conditions on the Company, or the timing of such non-objection, if granted. Assuming receipt of approval or non-objection from the Federal Reserve, the Company does not expect the share repurchases to begin before December 2021.

Under the authorization, share repurchases may occur in open market transactions or privately negotiated transactions, including pursuant to a trading plan in accordance with Rule 10b5-1 and/or Rule 10b-18 under the Securities Exchange Act of 1934, as amended. Repurchases will be made at management’s discretion from time to time at prices management considers to be attractive and in the best interests of both the Company and its shareholders, subject to the availability of shares, general market conditions, the trading price of the shares, alternative uses for capital, and the Company’s financial performance. Repurchases under this authorization may be suspended, terminated or modified by the Company at any time for any reason, including market conditions, the cost of repurchasing shares, the availability of alternative investment opportunities, liquidity, and other factors deemed appropriate by management in its discretion. There can be no assurance that the Company will receive the required approval or non-objection for its proposed share repurchase program. The Company is not obligated to repurchase any particular number of shares even if regulatory approval or non-objection is obtained. The proposed repurchase program would be authorized through November 30, 2022, although it may be modified or terminated by the Board of Directors at any time.

CONFERENCE CALL INFORMATION

A conference call and webcast covering Eastern’s third quarter 2021 earnings will be held on Friday, October 29, 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 1389147. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A replay of the webcast will be made available on demand on this site.

ABOUT EASTERN BANKSHARES, INC.

Eastern Bankshares, Inc. is the stock holding company for Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 110 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of September 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 income and total noninterest expense because each contains income or expense components, as applicable, such as income associated with rabbi trust accounts and rabbi trust employee benefit expense, which are market-driven, and over which the Company cannot exercise control. Accordingly, reconciliations of the Company’s outlook for its noninterest income on an operating basis and its noninterest expense on an operating basis to an outlook for total noninterest income and total noninterest expense, respectively, cannot be made available without unreasonable effort.

Management also presents the Company’s core net interest margin which excludes the impact of items management determines as being one-time in nature or not indicative of its core operating results. Such items include the impact of excess liquidity in the form of excess cash volume, PPP loans originated in response to the COVID-19 pandemic, and material purchase accounting adjustments. Similarly, management presents certain asset quality metrics excluding PPP loans which it does not consider to be part of the Company’s core portfolios. These metrics include the ratio of total nonperforming loans to total loans excluding PPP loans, the ratio of the allowance for loan losses to total loans excluding PPP loans, and the ratio of annualized net charge-offs to average total loans excluding PPP loans. The Company anticipates that the vast majority of its PPP loans outstanding at September 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 pending 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 closing conditions are not satisfied in a timely manner or at all; 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; credit quality, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; the failure to obtain the approval or non-objection of the Federal Reserve for the initiation of share repurchases, delays in obtaining such approval or non-objection, or adverse conditions imposed in connection with such approval or non-objection; and the failure of the Company to execute its planned share repurchases. For further discussion of such factors, please see the Company’s most recent Annual Report on Form 10-K and subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available on the SEC’s website at www.sec.gov.

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)		Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020
Earnings data
Net interest income		$	102,691			$	104,608			$	100,091			$	103,608			$	98,742
Noninterest income			43,209				45,733				55,212				49,638				47,709
Total revenue			145,900				150,341				155,303				153,246				146,451
Noninterest expense			98,970				107,335				94,049				199,169				109,817
Pre-tax, pre-provision income (loss)			46,930				43,006				61,254				(45,923	)			36,634
(Release of) provision for allowance for loan losses			(1,488	)			(3,300	)			(580	)			900				700
Pre-tax income (loss)			48,418				46,306				61,834				(46,823	)			35,934
Net income (loss)			37,106				34,809				47,663				(44,062	)			28,505
Operating net income (non-GAAP)			37,391				37,097				46,537				31,612				32,322
Per-share data
Earnings (loss) per share		$	0.22			$	0.20			$	0.28			$	(0.26	)		n.a.
Operating earnings per share (non-GAAP)		$	0.22			$	0.22			$	0.27			$	0.18			n.a.
Book value per share		$	18.36			$	18.37			$	18.14			$	18.36			n.a.
Tangible book value per share (non-GAAP)		$	16.33			$	16.33			$	16.12			$	16.34			n.a.
Profitability
Return on average assets (1)			0.84	%			0.83	%			1.19	%			(1.11	)%			0.80	%
Operating return on average assets (non-GAAP) (1)			0.86	%			0.89	%			1.15	%			0.79	%			0.90	%
Return on average shareholders' equity (1)			4.27	%			4.10	%			5.66	%			(5.61	)%			6.65	%
Operating return on average shareholders' equity (non-GAAP) (1)			4.30	%			4.36	%			5.53	%			4.02	%			7.54	%
Net interest margin (FTE) (1)			2.53	%			2.69	%			2.71	%			2.84	%			3.04	%
Cost of deposits (1)			0.02	%			0.03	%			0.03	%			0.03	%			0.06	%
Fee income ratio			29.62	%			30.42	%			35.55	%			32.39	%			32.58	%
Efficiency ratio			67.83	%			71.39	%			60.56	%			129.97	%			74.99	%
Operating efficiency ratio (non-GAAP)			66.14	%			67.78	%			60.22	%			68.33	%			69.95	%
Balance Sheet (end of period)
Total assets		$	17,461,223			$	17,047,453			$	16,726,795			$	15,964,190			$	15,460,594
Total loans			9,504,562				9,621,075				9,916,475				9,730,525				9,944,241
Total deposits			13,649,964				13,250,433				12,980,875				12,155,784				13,332,585
Total loans / total deposits			70	%			73	%			76	%			80	%			75	%
PPP loans		$	533,965			$	825,784			$	1,238,053			$	1,026,117			$	1,123,493
Asset quality
Allowance for loan losses ("ALLL")		$	103,398			$	105,637			$	111,080			$	113,031			$	115,432
ALLL / total nonperforming loans ("NPLs")			245.77	%			253.74	%			252.72	%			261.33	%			257.47	%
Total NPLs / total loans			0.44	%			0.43	%			0.44	%			0.45	%			0.45	%
Total NPLs / total loans (excl. PPP loans) (non-GAAP)			0.47	%			0.47	%			0.51	%			0.50	%			0.51	%
Net charge-offs (NCOs) / average total loans (1)			0.03	%			0.09	%			0.06	%			0.13	%			0.08	%
NCOs / average total loans (excl. PPP loans) (non-GAAP) (1)			0.03	%			0.10	%			0.06	%			0.15	%			0.09	%
Remaining COVID-19 loan modifications (2)		$	110,596			$	149,805			$	178,430			$	332,682			$	701,227
Capital adequacy
Shareholders' equity / assets			19.64	%			20.12	%			20.25	%			21.47	%			11.08	%
Tangible shareholders' equity / tangible assets (non-GAAP)			17.85	%			18.30	%			18.42	%			19.58	%			8.87	%
(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												Sep 30, 2021 change from
(Unaudited, dollars in thousands)		Sep 30, 2021				Jun 30, 2021				Sep 30, 2020				Jun 30, 2021						Sep 30, 2020
ASSETS														△ $			△ %			△ $			△ %
Cash and due from banks		$	78,805			$	58,490			$	69,051			20,315			35	%		9,754			14	%
Short-term investments			1,172,956				1,505,757				2,259,033			(332,801	)		(22	)%		(1,086,077	)		(48	)%
Cash and cash equivalents			1,251,761				1,564,247				2,328,084			(312,486	)		(20	)%		(1,076,323	)		(46	)%
Available for sale securities			5,689,312				4,848,781				2,207,672			840,531			17	%		3,481,640			158	%
Total securities			5,689,312				4,848,781				2,207,672			840,531			17	%		3,481,640			158	%
Loans held for sale			1,757				2,734				4,649			(977	)		(36	)%		(2,892	)		(62	)%
Loans:
Commercial and industrial			1,652,447				1,740,679				2,177,216			(88,232	)		(5	)%		(524,769	)		(24	)%
Commercial real estate			3,825,186				3,775,771				3,652,312			49,415			1	%		172,874			5	%
Commercial construction			243,146				237,927				297,508			5,219			2	%		(54,362	)		(18	)%
Business banking			1,225,538				1,339,852				1,251,573			(114,314	)		(9	)%		(26,035	)		(2	)%
Total commercial loans			6,946,317				7,094,229				7,378,609			(147,912	)		(2	)%		(432,292	)		(6	)%
Residential real estate			1,491,269				1,457,498				1,373,237			33,771			2	%		118,032			9	%
Consumer home equity			848,570				834,938				890,771			13,632			2	%		(42,201	)		(5	)%
Other consumer			218,406				234,410				301,624			(16,004	)		(7	)%		(83,218	)		(28	)%
Total loans			9,504,562				9,621,075				9,944,241			(116,513	)		(1	)%		(439,679	)		(4	)%
Allowance for loan losses			(103,398	)			(105,637	)			(115,432	)		2,239			(2	)%		12,034			(10	)%
Unamortized prem./disc. and def. fees			(23,104	)			(29,739	)			(32,747	)		6,635			(22	)%		9,643			(29	)%
Net loans			9,378,060				9,485,699				9,796,062			(107,639	)		(1	)%		(418,002	)		(4	)%
Federal Home Loan Bank stock, at cost			10,601				10,601				8,805			—			—	%		1,796			20	%
Premises and equipment			44,048				44,733				50,539			(685	)		(2	)%		(6,491	)		(13	)%
Bank-owned life insurance			79,259				79,634				78,058			(375	)		—	%		1,201			2	%
Goodwill and other intangibles, net			379,772				380,402				375,632			(630	)		—	%		4,140			1	%
Deferred income taxes, net			34,135				26,161				19,925			7,974			30	%		14,210			71	%
Prepaid expenses			148,180				145,941				92,473			2,239			2	%		55,707			60	%
Other assets			444,338				458,520				498,695			(14,182	)		(3	)%		(54,357	)		(11	)%
Total assets			17,461,223				17,047,453				15,460,594			413,770			2	%		2,000,629			13	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand			5,484,126				5,399,297				6,312,479			84,829			2	%		(828,353	)		(13	)%
Interest checking accounts			2,693,276				2,656,610				2,207,266			36,666			1	%		486,010			22	%
Savings accounts			1,444,928				1,403,472				1,217,898			41,456			3	%		227,030			19	%
Money market investment			3,802,319				3,544,897				3,315,198			257,422			7	%		487,121			15	%
Certificates of deposit			225,315				246,157				279,744			(20,842	)		(8	)%		(54,429	)		(19	)%
Total deposits			13,649,964				13,250,433				13,332,585			399,531			3	%		317,379			2	%
Borrowed funds:
Federal Home Loan Bank advances			14,172				14,323				14,773			(151	)		(1	)%		(601	)		(4	)%
Escrow deposits of borrowers			15,900				14,119				14,664			1,781			13	%		1,236			8	%
Total borrowed funds			30,072				28,442				29,437			1,630			6	%		635			2	%
Other liabilities			351,895				337,956				385,200			13,939			4	%		(33,305	)		(9	)%
Total liabilities			14,031,931				13,616,831				13,747,222			415,100			3	%		284,709			2	%
Shareholders' equity:
Common shares			1,868				1,868				—			—			—	%		1,868			—	%
Additional paid-in capital			1,857,165				1,856,241				—			924			—	%		1,857,165			—	%
Unallocated common shares held by the employee stock ownership plan ("ESOP")			(143,966	)			(145,219	)			—			1,253			(1	)%		(143,966	)		—	%
Retained earnings			1,747,300				1,723,979				1,709,669			23,321			1	%		37,631			2	%
Accumulated other comprehensive income ("AOCI"), net of tax			(33,075	)			(6,247	)			3,703			(26,828	)		429	%		(36,778	)		(993	)%
Total shareholders' equity			3,429,292				3,430,622				1,713,372			(1,330	)		—	%		1,715,920			100	%
Total liabilities and shareholders' equity			17,461,223				17,047,453				15,460,594			413,770			2	%		2,000,629			13	%

EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
		Three months ended											Three months ended Sep 30, 2021 change from three months ended
(Unaudited, dollars in thousands, except share data)		Sep 30, 2021				Jun 30, 2021				Sep 30, 2020			Jun 30, 2021						Sep 30, 2020
Interest and dividend income:													△ $			△ %			△ $			△ %
Interest and fees on loans		$	86,735			$	90,936			$	90,704		(4,201	)		(5	)%		(3,969	)		(4	)%
Taxable interest and dividends on available for sale securities			14,314				12,457				7,554		1,857			15	%		6,760			89	%
Non-taxable interest and dividends on available for sale securities			1,848				1,857				1,883		(9	)		—	%		(35	)		(2	)%
Interest on federal funds sold and other short-term investments			571				431				372		140			32	%		199			53	%
Total interest and dividend income			103,468				105,681				100,513		(2,213	)		(2	)%		2,955			3	%
Interest expense:
Interest on deposits			736				1,031				1,727		(295	)		(29	)%		(991	)		(57	)%
Interest on borrowings			41				42				44		(1	)		(2	)%		(3	)		(7	)%
Total interest expense			777				1,073				1,771		(296	)		(28	)%		(994	)		(56	)%
Net interest income			102,691				104,608				98,742		(1,917	)		(2	)%		3,949			4	%
(Release of) provision for allowance for loan losses			(1,488	)			(3,300	)			700		1,812			(55	)%		(2,188	)		(313	)%
Net interest income after provision for loan losses			104,179				107,908				98,042		(3,729	)		(3	)%		6,137			6	%
Noninterest income:
Insurance commissions			21,956				23,664				21,884		(1,708	)		(7	)%		72			—	%
Service charges on deposit accounts			5,935				5,708				5,052		227			4	%		883			17	%
Trust and investment advisory fees			6,310				6,074				5,311		236			4	%		999			19	%
Debit card processing fees			3,030				3,170				2,721		(140	)		(4	)%		309			11	%
Interest rate swap income (losses)			881				(1,164	)			1,319		2,045			(176	)%		(438	)		(33	)%
(Losses) income from investments held in rabbi trusts			(289	)			4,216				3,800		(4,505	)		(107	)%		(4,089	)		(108	)%
Gains on sales of mortgage loans held for sale, net			717				848				2,219		(131	)		(15	)%		(1,502	)		(68	)%
Gains on sales of securities available for sale, net			1				1				—		—			—	%		1			—	%
Other			4,668				3,216				5,403		1,452			45	%		(735	)		(14	)%
Total noninterest income			43,209				45,733				47,709		(2,524	)		(6	)%		(4,500	)		(9	)%
Noninterest expense:
Salaries and employee benefits			66,238				69,276				66,593		(3,038	)		(4	)%		(355	)		(1	)%
Office occupancy and equipment			7,960				8,094				8,294		(134	)		(2	)%		(334	)		(4	)%
Data processing			12,191				13,572				11,721		(1,381	)		(10	)%		470			4	%
Professional services			4,024				6,439				5,510		(2,415	)		(38	)%		(1,486	)		(27	)%
Charitable contributions			—				—				—		—			—	%		—			—	%
Marketing			1,598				3,497				1,943		(1,899	)		(54	)%		(345	)		(18	)%
Loan expenses			1,586				1,854				1,554		(268	)		(14	)%		32			2	%
Federal Deposit Insurance Corporation ("FDIC") insurance			1,056				985				938		71			7	%		118			13	%
Amortization of intangible assets			629				625				699		4			1	%		(70	)		(10	)%
Other			3,688				2,993				12,565		695			23	%		(8,877	)		(71	)%
Total noninterest expense			98,970				107,335				109,817		(8,365	)		(8	)%		(10,847	)		(10	)%
Income before income tax expense			48,418				46,306				35,934		2,112			5	%		12,484			35	%
Income tax expense			11,312				11,497				7,429		(185	)		(2	)%		3,883			52	%
Net income			37,106				34,809				28,505		2,297			7	%		8,601			30	%
Share data:
Weighted average common shares outstanding (1)			172,298,615				172,173,707			n.a.
Earnings per share		$	0.22			$	0.20			n.a.
(1) Shares held by the Company’s ESOP that have not been allocated to employees in accordance with the terms of the ESOP are not deemed outstanding for earnings per share calculations.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME
		Nine months ended
(Unaudited, dollars in thousands, except share data)		Sep 30, 2021				Sep 30, 2020				Change
Interest and dividend income:										△ $			△ %
Interest and fees on loans		$	266,310			$	278,385			(12,075	)		(4	)%
Taxable interest and dividends on available for sale securities			36,977				23,332			13,645			58	%
Non-taxable interest and dividends on available for sale securities			5,561				5,709			(148	)		(3	)%
Interest on federal funds sold and other short-term investments			1,434				1,173			261			22	%
Interest and dividends on trading securities			—				6			(6	)		(100	)%
Total interest and dividend income			310,282				308,605			1,677			1	%
Interest expense:
Interest on deposits			2,769				10,245			(7,476	)		(73	)%
Interest on borrowings			123				717			(594	)		(83	)%
Total interest expense			2,892				10,962			(8,070	)		(74	)%
Net interest income			307,390				297,643			9,747			3	%
(Release of) provision for allowance for loan losses			(5,368	)			37,900			(43,268	)		(114	)%
Net interest income after provision for loan losses			312,758				259,743			53,015			20	%
Noninterest income:
Insurance commissions			73,767				72,058			1,709			2	%
Service charges on deposit accounts			17,010				15,514			1,496			10	%
Trust and investment advisory fees			18,047				15,600			2,447			16	%
Debit card processing fees			8,949				7,528			1,421			19	%
Interest rate swap income (losses)			5,122				(3,919	)		9,041			(231	)%
Income from investments held in rabbi trusts			5,773				4,802			971			20	%
Losses on trading securities, net			—				(3	)		3			(100	)%
Gains on sales of mortgage loans held for sale, net			3,044				3,732			(688	)		(18	)%
Gains on sales of securities available for sale, net			1,166				285			881			309	%
Other			11,276				13,138			(1,862	)		(14	)%
Total noninterest income			144,154				128,735			15,419			12	%
Noninterest expense:
Salaries and employee benefits			199,554				191,517			8,037			4	%
Office occupancy and equipment			24,271				25,598			(1,327	)		(5	)%
Data processing			37,892				33,905			3,987			12	%
Professional services			14,611				13,595			1,016			7	%
Charitable contributions			—				3,984			(3,984	)		(100	)%
Marketing			6,786				6,056			730			12	%
Loan expenses			5,287				4,702			585			12	%
FDIC insurance			2,989				2,788			201			7	%
Amortization of intangible assets			1,786				2,102			(316	)		(15	)%
Other			7,178				21,507			(14,329	)		(67	)%
Total noninterest expense			300,354				305,754			(5,400	)		(2	)%
Income before income tax expense			156,558				82,724			73,834			89	%
Income tax expense			36,980				15,924			21,056			132	%
Net income			119,578				66,800			52,778			79	%
Share data:
Weighted average common shares outstanding (1)			172,174,469			n.a.
Earnings per share		$	0.69			n.a.
(1) Shares held by the Company’s ESOP that have not been allocated to employees in accordance with the terms of the ESOP are not deemed outstanding for earnings per share calculations.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN
		As of and for the three months ended
		Sep 30, 2021									Jun 30, 2021									Sep 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		$	6,995,556		$	67,276		3.82	%		$	7,301,745		$	71,747		3.94	%		$	7,314,805		$	69,127		3.76	%
Residential			1,477,891			11,479		3.08	%			1,433,056			11,397		3.19	%			1,390,719			12,269		3.51	%
Consumer			1,055,075			8,803		3.31	%			1,061,900			8,597		3.25	%			1,209,340			10,091		3.32	%
Total loans			9,528,522			87,558		3.65	%			9,796,701			91,741		3.76	%			9,914,864			91,487		3.67	%
Investment securities			5,249,742			16,656		1.26	%			4,344,690			14,778		1.36	%			1,712,928			10,007		2.32	%
Federal funds sold and other short-term investments			1,503,919			570		0.15	%			1,617,741			431		0.11	%			1,462,047			372		0.10	%
Total interest-earning assets			16,282,183			104,784		2.55	%			15,759,132			106,950		2.72	%			13,089,839			101,866		3.10	%
Non-interest-earning assets			1,141,168									1,061,121									1,139,440
Total assets		$	17,423,351								$	16,820,253								$	14,229,279
Interest-bearing liabilities:
Deposits:
Savings		$	1,441,385		$	36		0.01	%		$	1,385,735		$	69		0.02	%		$	1,187,083		$	62		0.02	%
Interest checking			2,687,196			244		0.04	%			2,541,862			253		0.04	%			2,307,972			334		0.06	%
Money market			3,762,855			360		0.04	%			3,523,330			605		0.07	%			3,311,847			1,051		0.13	%
Time deposits			233,145			96		0.16	%			246,801			104		0.17	%			294,025			280		0.38	%
Total interest-bearing deposits			8,124,581			736		0.04	%			7,697,728			1,031		0.05	%			7,100,927			1,727		0.10	%
Borrowings			26,074			41		0.62	%			25,042			42		0.67	%			25,478			44		0.69	%
Total interest-bearing liabilities			8,150,655			777		0.04	%			7,722,770			1,073		0.06	%			7,126,405			1,771		0.10	%
Demand deposit accounts			5,471,906									5,355,170									5,034,474
Other noninterest-bearing liabilities			350,111									335,816									362,073
Total liabilities			13,972,672									13,413,756									12,522,952
Shareholders' equity			3,450,679									3,406,497									1,706,327
Total liabilities and shareholders' equity		$	17,423,351								$	16,820,253								$	14,229,279
Net interest income - FTE					$	104,007								$	105,877								$	100,095
Net interest rate spread (2)								2.51	%								2.66	%								3.00	%
Net interest-earning assets (3)		$	8,131,528								$	8,036,362								$	5,963,434
Net interest margin - FTE (4)								2.53	%								2.69	%								3.04	%
(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 nine months ended
		Sep 30, 2021									Sep 30, 2020
(Unaudited, dollars in thousands)		Avg. Balance			Interest			Yield / Cost (5)			Avg. Balance			Interest			Yield / Cost (5)
Interest-earning assets:
Loans (1):
Commercial		$	7,203,903		$	208,228		3.86	%		$	6,929,729		$	208,534		4.02	%
Residential			1,435,006			34,150		3.18	%			1,412,268			38,127		3.61	%
Consumer			1,074,039			26,337		3.28	%			1,261,211			34,108		3.61	%
Total loans			9,712,948			268,715		3.70	%			9,603,208			280,769		3.91	%
Investment securities			4,414,582			44,015		1.33	%			1,556,985			30,782		2.64	%
Federal funds sold and other short-term investments			1,619,873			1,434		0.12	%			952,141			1,173		0.16	%
Total interest earning assets			15,747,403			314,164		2.67	%			12,112,334			312,724		3.45	%
Non-interest-earning assets			1,106,967									1,089,473
Total assets		$	16,854,370								$	13,201,807
Interest-bearing liabilities:
Deposits:
Savings		$	1,376,243		$	169		0.02	%		$	1,086,957		$	181		0.02	%
Interest checking			2,541,113			730		0.04	%			2,208,517			1,801		0.11	%
Money market			3,576,648			1,553		0.06	%			3,162,528			6,883		0.29	%
Time deposits			243,621			317		0.17	%			311,462			1,380		0.59	%
Total interest-bearing deposits			7,737,625			2,769		0.05	%			6,769,464			10,245		0.20	%
Borrowings			25,582			123		0.64	%			87,738			717		1.09	%
Total interest-bearing liabilities			7,763,207			2,892		0.05	%			6,857,202			10,962		0.21	%
Demand deposit accounts			5,318,903									4,322,809
Other noninterest-bearing liabilities			347,237									345,869
Total liabilities			13,429,347									11,525,880
Shareholders' equity			3,425,023									1,675,927
Total liabilities and shareholders' equity		$	16,854,370								$	13,201,807
Net interest income - FTE					$	311,272								$	301,762
Net interest rate spread (2)								2.62	%								3.24	%
Net interest-earning assets (3)		$	7,984,196								$	5,255,132
Net interest margin - FTE (4)								2.64	%								3.33	%
(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
		Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020
(Unaudited, dollars in thousands)
Non-accrual loans:
Commercial		$	29,166			$	29,356			$	30,275			$	30,059			$	28,968
Residential			7,185				6,445				8,127				6,815				7,419
Consumer			4,262				4,106				3,873				4,131				4,727
Total non-accrual loans			40,613				39,907				42,275				41,005				41,114
Accruing loans past due 90 days or more:
Commercial			1,171				1,439				1,390				1,959				3,384
Residential			278				277				280				279				326
Consumer			9				9				9				9				9
Total accruing loans past due 90 days or more			1,458				1,725				1,679				2,247				3,719
Total non-performing loans			42,071				41,632				43,954				43,252				44,833
Other real estate owned			—				38				—				—				40
Other non-performing assets:			—				—				—				—				—
Total non-performing assets		$	42,071			$	41,670			$	43,954			$	43,252			$	44,873
Total accruing troubled debt restructured loans		$	34,723			$	38,316			$	39,367			$	41,095			$	39,881
Total non-performing loans to total loans			0.44	%			0.43	%			0.44	%			0.45	%			0.45	%
Total non-performing assets to total assets			0.24	%			0.24	%			0.26	%			0.27	%			0.29	%
(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
		Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020
(Unaudited, dollars in thousands)
Average total loans		$	9,528,522			$	9,796,701			$	9,816,788			$	9,796,697			$	9,914,864
Allowance for loan losses, beginning of the period		$	105,637			$	111,080			$	113,031			$	115,432			$	116,636
Charged-off loans:
Commercial and industrial			—				550				—				1,603				140
Commercial real estate			8				—				234				—				—
Commercial construction			—				—				—				—				—
Business banking			867				1,838				1,384				1,433				1,179
Residential real estate			—				—				—				—				—
Consumer home equity			—				—				—				79				22
Other consumer			742				275				364				713				1,077
Total charged-off loans			1,617				2,663				1,982				3,828				2,418
Recoveries on loans previously charged-off:
Commercial and industrial			40				13				9				92				306
Commercial real estate			—				4				—				220				4
Commercial construction			—				—				—				—				—
Business banking			469				291				365				47				91
Residential real estate			88				17				10				9				43
Consumer home equity			63				3				71				100				31
Other consumer			206				192				156				59				39
Total recoveries			866				520				611				527				514
Net loans charged-off (recoveries):
Commercial and industrial			(40	)			537				(9	)			1,511				(166	)
Commercial real estate			8				(4	)			234				(220	)			(4	)
Commercial construction			—				—				—				—				—
Business banking			398				1,547				1,019				1,386				1,088
Residential real estate			(88	)			(17	)			(10	)			(9	)			(43	)
Consumer home equity			(63	)			(3	)			(71	)			(21	)			(9	)
Other consumer			536				83				208				654				1,038
Total net loans charged-off			751				2,143				1,371				3,301				1,904
(Release of) provision for loan losses			(1,488	)			(3,300	)			(580	)			900				700
Total allowance for loan losses, end of period		$	103,398			$	105,637			$	111,080			$	113,031			$	115,432
Net charge-offs to average total loans outstanding during this period (1)			0.03	%			0.09	%			0.06	%			0.13	%			0.08	%
Allowance for loan losses as a percent of total loans			1.09	%			1.10	%			1.12	%			1.16	%			1.16	%
Allowance for loan losses as a percent of nonperforming loans			245.77	%			253.74	%			252.72	%			261.33	%			257.47	%
(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)		Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020
Net income (GAAP)		$	37,106			$	34,809			$	47,663			$	(44,062	)		$	28,505
Add:
Noninterest income components:
Losses (income) from investments held in rabbi trusts			289				(4,216	)			(1,846	)			(5,535	)			(3,800	)
Gains on sales of securities available for sale, net			(1	)			(1	)			(1,164	)			(3	)			—
(Gains) losses on sale of other assets			(490	)			(29	)			(18	)			(49	)			71
Noninterest expense components:
Rabbi trust employee benefit (income) expense			(53	)			2,063				986				2,838				1,445
Impairment charge (reversal) on tax credit investments			1,133				(1,419	)			—				3,189				7,590
Indirect IPO costs (1)			—				—				—				—				549
Gain on sale of OREO			(87	)			—				—				(61	)			(546	)
Merger and acquisition expenses			740				3,479				589				90				—
Settlement and expenses for putative consumer class action matters			—				3,325				—				—				—
Stock donation to the EBF			—				—				—				91,287				—
Total impact of non-GAAP adjustments			1,531				3,202				(1,453	)			91,756				5,309
Less net tax benefit (expense) associated with non-GAAP adjustments (2)			1,246				914				(327	)			16,082				1,492
Non-GAAP adjustments, net of tax		$	285			$	2,288			$	(1,126	)		$	75,674			$	3,817
Operating net income (non-GAAP)		$	37,391			$	37,097			$	46,537			$	31,612			$	32,322
Weighted average common shares outstanding during the period (3):
Basic			172,298,615				172,173,707				172,049,044				171,812,535				—
Diluted			172,298,615				172,173,707				172,049,044				171,812,535				—
Earnings (loss) per share, basic		$	0.22			$	0.20			$	0.28			$	(0.26	)		n.a.
Earnings (loss) per share, diluted		$	0.22			$	0.20			$	0.28			$	(0.26	)		n.a.
Operating earnings per share, basic (non-GAAP)		$	0.22			$	0.22			$	0.27			$	0.18			n.a.
Operating earnings per share, diluted (non-GAAP)		$	0.22			$	0.22			$	0.27			$	0.18			n.a.
Return on average assets (4)			0.84	%			0.83	%			1.19	%			(1.11	)%			0.80	%
Add:
Losses (income) from investments held in rabbi trusts (4)			0.01	%			(0.10	)%			(0.05	)%			(0.14	)%			(0.11	)%
Gains on sales of securities available for sale, net (4)			—	%			—	%			(0.03	)%			—	%			—	%
(Gains) losses on sale of other assets (4)			(0.01	)%			—	%			—	%			—	%			—	%
Rabbi trust employee benefit (income) expense (4)			—	%			0.05	%			0.02	%			0.07	%			0.04	%
Impairment charge (reversal) on tax credit investments (4)			0.03	%			(0.03	)%			—	%			0.08	%			0.21	%
Indirect IPO costs (1) (4)			—	%			—	%			—	%			—	%			0.02	%
Gain on sale of OREO (4)			—	%			—	%			—	%			—	%			(0.02	)%
Merger and acquisition expenses (4)			0.02	%			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)			0.03	%			0.02	%			(0.01	)%			0.40	%			0.04	%
Operating return on average assets (non-GAAP) (4)			0.86	%			0.89	%			1.15	%			0.79	%			0.90	%
Return on average shareholders' equity (4)			4.27	%			4.10	%			5.66	%			(5.61	)%			6.65	%
Add:
Losses (income) from investments held in rabbi trusts (4)			0.03	%			(0.50	)%			(0.22	)%			(0.70	)%			(0.89	)%
Gains on sales of securities available for sale, net (4)			—	%			—	%			(0.14	)%			—	%			—	%
(Gains) losses on sale of other assets (4)			(0.06	)%			—	%			—	%			(0.01	)%			0.02	%
Rabbi trust employee benefit (income) expense (4)			(0.01	)%			0.24	%			0.12	%			0.36	%			0.34	%
Impairment charge (reversal) on tax credit investments (4)			0.13	%			(0.17	)%			—	%			0.41	%			1.77	%
Indirect IPO costs (1) (4)			—	%			—	%			—	%			—	%			0.13	%
Gain on sale of OREO (4)			(0.01	)%			—	%			—	%			(0.01	)%			(0.13	)%
Merger and acquisition expenses (4)			0.09	%			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)			0.14	%			0.11	%			(0.04	)%			2.05	%			0.35	%
Operating return on average shareholders' equity (non-GAAP) (4)			4.30	%			4.36	%			5.53	%			4.02	%			7.54	%
(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 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
		Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020
(Unaudited, dollars in thousands)
Net interest income (GAAP)		$	102,691			$	104,608			$	100,091			$	103,608			$	98,742
Add:
Tax-equivalent adjustment (non-GAAP)			1,316				1,269				1,297				1,357				1,353
Fully-taxable equivalent net interest income (non-GAAP)		$	104,007			$	105,877			$	101,388			$	104,965			$	100,095
Noninterest income (GAAP)		$	43,209			$	45,733			$	55,212			$	49,638			$	47,709
Less:
(Losses) income from investments held in rabbi trusts			(289	)			4,216				1,846				5,535				3,800
Gains on sales of securities available for sale, net			1				1				1,164				3				—
Gains (losses) on sale of other assets			490				29				18				49				(71	)
Noninterest income on an operating basis (non-GAAP)		$	43,007			$	41,487			$	52,184			$	44,051			$	43,980
Noninterest expense (GAAP)		$	98,970			$	107,335			$	94,049			$	199,169			$	109,817
Less:
Rabbi trust employee benefit (income) expense			(53	)			2,063				986				2,838				1,445
Impairment charge (reversal) on tax credit investments			1,133				(1,419	)			—				3,189				7,590
Indirect IPO costs (1)			—				—				—				—				549
Gain on sale of OREO			(87	)			—				—				(61	)			(546	)
Merger and acquisition expenses			740				3,479				589				90				—
Settlement and expenses for putative consumer class action matters			—				3,325				—				—				—
Stock donation to the EBF			—				—				—				91,287				—
Noninterest expense on an operating basis (non-GAAP)		$	97,237			$	99,887			$	92,474			$	101,826			$	100,779
Total revenue (GAAP)		$	145,900			$	150,341			$	155,303			$	153,246			$	146,451
Total operating revenue (non-GAAP)		$	147,014			$	147,364			$	153,572			$	149,016			$	144,075
Efficiency ratio (GAAP)			67.83	%			71.39	%			60.56	%			129.97	%			74.99	%
Operating efficiency ratio (non-GAAP)			66.14	%			67.78	%			60.22	%			68.33	%			69.95	%
Noninterest income / total revenue (GAAP)			29.62	%			30.42	%			35.55	%			32.39	%			32.58	%
Noninterest income / total revenue on an operating basis (non-GAAP)			29.25	%			28.15	%			33.98	%			29.56	%			30.53	%
(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
		Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020
(Unaudited, dollars in thousands, except share data)
Tangible shareholders' equity:
Total shareholders' equity (GAAP)		$	3,429,292			$	3,430,622			$	3,387,045			$	3,428,052			$	1,713,372
Less: Goodwill and other intangibles			379,772				380,402				376,002				376,534				375,632
Tangible shareholders' equity (non-GAAP)			3,049,520				3,050,220				3,011,043				3,051,518				1,337,740
Tangible assets:
Total assets (GAAP)			17,461,223				17,047,453				16,726,795				15,964,190				15,460,594
Less: Goodwill and other intangibles			379,772				380,402				376,002				376,534				375,632
Tangible assets (non-GAAP)		$	17,081,451			$	16,667,051			$	16,350,793			$	15,587,656			$	15,084,962
Shareholders' equity to assets ratio (GAAP)			19.64	%			20.12	%			20.25	%			21.47	%			11.08	%
Tangible shareholders' equity to tangible assets ratio (non-GAAP)			17.85	%			18.30	%			18.42	%			19.58	%			8.87	%
Common shares outstanding			186,758,154				186,758,154				186,758,154				186,758,154				—
Book value per share (GAAP)		$	18.36			$	18.37			$	18.14			$	18.36			n.a.
Tangible book value per share (non-GAAP)		$	16.33			$	16.33			$	16.12			$	16.34			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)		Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020
Total loans excluding PPP loans:
Total loans (GAAP) (1)		$	9,481,458			$	9,591,336			$	9,883,802			$	9,706,989			$	9,911,494
Less: PPP loans (1)			514,018				799,964				1,210,598				1,007,487				1,098,883
Total loans excluding PPP loans (non-GAAP)		$	8,967,440			$	8,791,372			$	8,673,204			$	8,699,502			$	8,812,611
Total nonperforming loans (NPLs) (GAAP)		$	42,071			$	41,632			$	43,954			$	43,252			$	44,833
Total NPLs / total loans (GAAP)			0.44	%			0.43	%			0.44	%			0.45	%			0.45	%
Total NPLs / total loans (excl. PPP loans) (non-GAAP)			0.47	%			0.47	%			0.51	%			0.50	%			0.51	%
Allowance for loan losses (ALLL) (GAAP)		$	103,398			$	105,637			$	111,080			$	113,031			$	115,432
ALLL / total loans (GAAP)			1.09	%			1.10	%			1.12	%			1.16	%			1.16	%
ALLL / total loans (excl. PPP loans) (non-GAAP)			1.15	%			1.20	%			1.28	%			1.30	%			1.31	%
		As of and for the three months ended
(Unaudited, dollars in thousands)		Sep 30, 2021				Jun 30, 2021				Mar 31, 2021				Dec 31, 2020				Sep 30, 2020
Average total loans excluding PPP Loans:
Average total loans (GAAP)		$	9,528,522			$	9,796,701			$	9,816,788			$	9,796,697			$	9,914,864
Less: Average PPP loans			649,443				1,073,688				1,131,516				1,076,155				1,091,464
Average total loans excluding PPP loans (non-GAAP)		$	8,879,079			$	8,723,013			$	8,685,272			$	8,720,542			$	8,823,400
Total net loans charged-off (NCOs) (GAAP)		$	751			$	2,143			$	1,371			$	3,301			$	1,904
NCOs / Average total loans (GAAP) (2)			0.03	%			0.09	%			0.06	%			0.13	%			0.08	%
NCOs / Average total loans (excl. PPP loans) (non-GAAP) (2)			0.03	%			0.10	%			0.06	%			0.15	%			0.09	%
(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
		Sep 30, 2021											Jun 30, 2021
(Unaudited, dollars in thousands)		Volume				Interest				Margin Impact (1)			Volume				Interest				Margin Impact (1)
Reported total average interest-earning assets, net interest income, and net interest margin (2)		$	16,282,183			$	104,007			2.53	%		$	15,759,132			$	105,877			2.69	%
Non-GAAP adjustments:
PPP loan volume earning 1%			(649,443	)			(1,688	)		0.06	%			(1,073,688	)			(2,742	)		0.12	%
SBA PPP loan fee accretion, net of deferred origination cost amortization			—				(5,913	)		(0.14	)%			—				(9,258	)		(0.24	)%
Excess cash (3)			(1,178,275	)			(445	)		0.19	%			(1,302,558	)			(357	)		0.23	%
Deferred loan fee income adjustment			—				—			—	%			—				—			—	%
Core margin (Non-GAAP) (4)		$	14,454,465			$	95,961			2.63	%		$	13,382,886			$	93,520			2.80	%
Core margin change from prior quarter										(0.17	)%										(0.09	)%
		Mar 31, 2021											Dec 31, 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)		$	15,188,879			$	101,388			2.71	%		$	14,715,494			$	104,965			2.84	%
Non-GAAP adjustments:
PPP loan volume earning 1%			(1,131,516	)			(2,887	)		0.13	%			(1,076,155	)			(2,741	)		0.14	%
SBA PPP loan fee accretion, net of deferred origination cost amortization			—				(8,339	)		(0.22	)%			—				(6,102	)		(0.16	)%
Excess cash (3)			(1,436,783	)			(354	)		0.27	%			(1,996,808	)			(502	)		0.43	%
Deferred loan fee income adjustment			—				—			—	%			—				(3,774	)		(0.10	)%
Core margin (Non-GAAP) (4)		$	12,620,580			$	89,808			2.89	%		$	11,642,531			$	91,846			3.14	%
Core margin change from prior quarter										(0.25	)%
(1) Presented on an annualized basis.
(2) Presented on a fully taxable equivalent basis.
(3) Consists of cash above 2% of average total earning assets at a yield of 0.15% for the three months ended September 30, 2021, 0.11% for the three months ended June 30, 2021 and 0.10% 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 March 31, 2021 (1)						Remaining COVID-19 Modifications as of June 30, 2021 (1)						Remaining COVID-19 Modifications as of September 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		$	22,776		1.1	%		$	18,850		1.1	%		$	4,548		0.3	%
Commercial real estate			127,683		3.5	%			113,301		3.0	%			92,377		2.4	%
Commercial construction			—		—	%			—		—	%			—		—	%
Business banking			11,681		0.8	%			2,102		0.2	%			2,164		0.2	%
Residential real estate			13,754		1.0	%			13,428		0.9	%			9,947		0.7	%
Consumer home equity			1,274		0.2	%			1,124		0.1	%			875		0.1	%
Other consumer			1,262		0.5	%			999		0.4	%			685		0.3	%
Total		$	178,430		1.8	%		$	149,804		1.6	%		$	110,596		1.2	%
(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.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20211028006192/en/

Investor Contact

Jillian Belliveau

Eastern Bankshares, Inc.

InvestorRelations@easternbank.com

781-598-7920

Media Contact

Andrea Goodman

Eastern Bank

a.goodman@easternbank.com

781-598-7847

Source: Eastern Bank

FAQ

What were Eastern Bankshares' earnings for Q3 2021?

Eastern Bankshares reported a net income of $37.1 million, or $0.22 per share, for Q3 2021.

When is the dividend payable for Eastern Bankshares?

The quarterly cash dividend of $0.08 per share is payable on December 15, 2021.

What is the share repurchase program for Eastern Bankshares?

Eastern Bankshares plans to repurchase up to 9,337,900 shares, pending approval from the Federal Reserve.

What was the loan growth figure for Eastern Bankshares in Q3 2021?

The company achieved loan growth of $175 million, which translates to an annualized growth rate of over 8%.

What is the outlook for Eastern Bankshares regarding asset quality?

Nonperforming loans slightly increased to $42.1 million, indicating a slight decrease in asset quality.