Eastern Bankshares, Inc. Reports Third Quarter 2024 Financial Results

Rhea-AI Summary

Eastern Bankshares (NASDAQ: EBC) reported Q3 2024 financial results, including a net loss of $6.2 million, impacted by a $40.9 million initial provision on non-PCD loans and $30.5 million in merger-related charges. Operating net income was $49.7 million ($0.25 per diluted share). The company completed its merger with Cambridge Bancorp, adding $3.7 billion in loans and $3.9 billion in deposits. Net interest margin increased to 2.97%, while trust and investment advisory fees grew 122% to $14.9 million. The Board approved a 9% increase in quarterly dividend to $0.12 per share.

Positive

• Operating net income increased 36% to $49.7 million
• Net interest margin improved by 33 basis points to 2.97%
• Trust and investment advisory fees grew 122% to $14.9 million
• Total assets increased 21.2% to $25.5 billion
• 9% increase in quarterly dividend to $0.12 per share

Negative

• Net loss of $6.2 million in Q3 2024
• Non-performing loans increased by $84.7 million to $124.5 million
• Net charge-offs of $5.1 million (0.12% of average total loans)
• Operating efficiency ratio increased to 78.5% from 71.3%
• Tangible book value per share decreased 11% to $12.17

Insights

Financial Analyst

The Q3 results reveal significant changes following the Cambridge merger completion. The $40.9 million initial provision for non-PCD loans and $30.5 million in merger charges led to a net loss of $6.2 million. However, the operating metrics show promise with operating net income of $49.7 million.

Key positives include:

• Net interest margin improvement to 2.97%
• Trust fees surge of 122% to $14.9 million
• 9% dividend increase
• Merger synergies exceeding expectations

Concerns include rising NPLs to $124.5 million (0.70% of total loans) and decreased tangible book value per share. The integration appears well-executed with successful system conversions and cost savings on track.

Banking Operations Expert

The Cambridge merger has transformed Eastern's operational scale, adding $3.7 billion in loans and $3.9 billion in deposits. The post-merger integration shows strong execution with completed bank and wealth system conversions. The 0.33% NIM expansion and $10.8 million in net accretion income demonstrate effective balance sheet management.

The increased NPLs warrant monitoring but appear adequately reserved, with thorough credit team assessment of PCD loans. The efficiency ratio deteriorated to 78.5%, but the operating efficiency ratio improved to 60.1%, suggesting underlying operational improvements despite merger-related costs.

~ Company Announces a 9% Increase to Quarterly Dividend ~

BOSTON--(BUSINESS WIRE)-- Eastern Bankshares, Inc. (the “Company”) (NASDAQ: EBC), the holding company of Eastern Bank, today announced its 2024 third quarter financial results.

FINANCIAL HIGHLIGHTS

• Net loss of $6.2 million included the initial provision on non-purchased credit deteriorated (“non-PCD”) loans of $40.9 million and merger-related charges of $30.5 million. Operating net income of $49.7 million, or 0.25 per diluted share.
• Merger EPS accretion and cost saves on track to exceed original estimates.
• Net interest margin on a fully tax equivalent (“FTE”) basis of 2.97%, an increase of 0.33%, including net discount accretion from the Cambridge merger of 0.18%.
• Trust and investment advisory fees increased $8.2 million, or 122%, from the prior quarter to $14.9 million, due primarily to increased assets under management (“AUM”) as a result of the merger.
• Book value per share and tangible book value per share ended the quarter at $17.09 and $12.17, respectively.
• Non-performing loans ("NPLs") increased by $84.7 million to $124.5 million, or 0.70% of total loans, due primarily to purchased credit deteriorated (“PCD”) loans acquired from Cambridge that were thoroughly assessed by the Credit teams and adequately reserved.
• The Board declared a 9% increase in the quarterly cash dividend to $0.12 per share.

	As of and for three months ended							Linked quarter Change
(Unaudited, $ in thousands, except per share data)	Sep 30, 2024			Jun 30, 2024				△ $			△ %
Earnings
Net (loss) income	$	(6,188	)	$	26,331			$	(32,519	)	(124	)%
Per share, diluted	$	(0.03	)	$	0.16			$	(0.19	)	(119	)%
Operating net income*	$	49,665		$	36,519			$	13,146		36	%
Per share, diluted*	$	0.25		$	0.22			$	0.03		14	%
Net interest income	$	169,855		$	128,649			$	41,206		32	%
NIM - FTE (1)*		2.97	%		2.64	%			0.33	%	NM
Noninterest income	$	33,528		$	25,348			$	8,180		32	%
Operating noninterest income*	$	32,907		$	31,146			$	1,761		6	%
Noninterest expense	$	159,753		$	109,869			$	49,884		45	%
Operating noninterest expense*	$	130,850		$	105,255			$	25,595		24	%
Efficiency ratio		78.5	%		71.3	%			7.2	%	NM
Operating efficiency ratio*		60.1	%		63.7	%			(3.6	)%	NM
Balance sheet
Period-end balances
Loans	$	18,064,126		$	14,145,520			$	3,918,606		28	%
Deposits	$	21,216,854		$	17,537,809			$	3,679,045		21	%
Average balances
Loans	$	17,274,903		$	14,113,343			$	3,161,560		22	%
Deposits	$	20,858,252		$	17,751,502			$	3,106,750		18	%
Capital
Tangible shareholders’ equity / tangible assets*		10.69	%		11.73	%			(1.04	)%	NM
CET1 capital ratio (2)		15.52	%		18.63	%			(3.11	)%	NM
Book value per share	$	17.09		$	16.80			$	0.29		2	%
Tangible book value per share*	$	12.17		$	13.60			$	(1.43	)	(11	)%
Asset quality
Non-performing loans	$	124,503		$	39,771			$	84,732		213	%
Total non-performing loans to total loans		0.70	%		0.28	%			0.42	%	NM
Net charge-offs (recoveries) to average total loans (1)		0.12	%		(0.02	)%			0.14	%	NM
(1) Presented on an annualized basis.
(2) CET1 capital ratio as of September 30, 2024 is a preliminary estimate.
*Non-GAAP

On July 12, 2024, the Company completed its merger (“the merger”) with Cambridge Bancorp (“Cambridge”), the parent company of Cambridge Trust Company, and therefore the third quarter financial results reflect the partial quarter impact of the merger. The merger added approximately $3.7 billion in loans, $3.9 billion in deposits, each at fair value, and $4.7 billion in AUM.

“This quarter marked a transformational moment in Eastern’s history, as we closed on our merger with Cambridge Trust,” said Bob Rivers, Executive Chair and Chair of the Board of Directors of the Company and Eastern Bank. “This combination represents a powerful step forward in achieving our strategic vision, positioning us as a stronger, more competitive institution and Greater Boston’s leading local bank. I want to acknowledge the hard work and dedication of our entire team.”

Denis Sheahan, Chief Executive Officer, added, “While we’ve grown, our focus remains deeply rooted in the Greater Boston community. Our expanded capabilities allow us to better serve the consumers and businesses that drive this region’s economy, by providing comprehensive, one-stop banking and wealth management solutions, ensuring that we remain a committed resource in their success.”

“Following successful bank and wealth system conversions, we are on track to achieve the merger-related financial targets that were set forth at the time of our announcement just over a year ago,” said David Rosato, Chief Financial Officer. “This accomplishment underscores the strength of our integration strategy and our commitment to deliver shareholder value.”

BALANCE SHEET

Total assets were $25.5 billion at September 30, 2024, representing an increase of $4.5 billion, or 21.2% from June 30, 2024.

• Cash and equivalents increased $138.6 million to $889.5 million.
• Securities increased $56.3 million, or 1.2%, to $4.6 billion, due to an increase in the market value of available for sale securities (“AFS securities”) driven by lower interest rates, partially offset by principal runoff. Acquired securities totaling $883.0 million were sold following completion of the merger.
• Loans totaled $18.1 billion, representing an increase of $3.9 billion, or 27.7%, due to the addition of Cambridge. Eastern-originated loans declined modestly by $16.1 million, or 0.1%, in the quarter.
• Deposits totaled $21.2 billion, representing an increase of $3.7 billion, or 21.0%. The merger added $3.9 billion of deposits. Legacy Eastern deposits decreased $195 million, or 0.9%, due primarily to a seasonal decline in municipal deposits, partially offset by an increase in time deposits.
• FHLB advances decreased $0.1 million to $17.3 million. Proceeds from the securities sale were used to pay off FHLB advances of $782.0 million that the Company assumed through the merger.
• Shareholders’ equity was $3.7 billion, representing an increase of $703.7 million, due primarily to the common shares issued in the merger, as well as an increase in AOCI, partially offset by a decrease in retained earnings.

Please refer to Appendix E for more information on organic loan and deposit growth and the impact of the Cambridge merger, and Appendix F for a roll-forward of tangible shareholders’ equity.

NET INTEREST INCOME

Net interest income was $169.9 million for the third quarter, compared to $128.6 million, representing an increase of $41.2 million, due to an increase in the net interest margin and increased average earning assets.

• Net interest income included net accretion income of $10.8 million from purchase accounting adjustments in connection with the merger.
• The net interest margin on a FTE basis was 2.97%, representing a 33 basis point increase and included net discount accretion of 18 basis points from the Cambridge merger.
• Total interest-earning assets yield increased 41 basis points from the prior quarter to 4.60%, due primarily to an increase in loan yields of 39 basis points, as well as higher other short-term investment balances.
• Total interest-bearing liabilities cost increased 6 basis points to 2.50%.

NONINTEREST INCOME

Noninterest income was $33.5 million for the third quarter, compared to $25.3 million, representing an increase of $8.2 million. Operating noninterest income was $32.9 million, compared to $31.1 million, representing an increase of $1.8 million.

• Trust and investment advisory fees increased $8.2 million to $14.9 million, due primarily to increased AUM as a result of the merger.
• Service charges on deposit accounts increased $0.2 million to $8.1 million.
• Debit card processing fees increased $0.3 million to $3.8 million.
• Customer swap income increased $0.1 million to $0.6 million.
• Income from investments held in rabbi trust accounts increased $1.8 million to $3.6 million.
• Losses on sales of mortgage loans held for sale were $0.4 million, compared to losses of $0.2 million in the prior quarter.
• There were no losses on sales of AFS securities in the third quarter, compared to losses of $7.6 million in the prior quarter.
• Other noninterest income decreased $9.8 million to $2.9 million, due in part to the merger-related disposal of fixed assets totaling $3.0 million. The prior quarter included an early termination payment of $7.8 million received from the early withdrawal of a $100 million deposit contract.

NONINTEREST EXPENSE

Noninterest expense was $159.8 million, compared to $109.9 million, an increase of $49.9 million. The increase was primarily driven by the increase in merger-related expenses of $23.9 million. Operating noninterest expense was $130.9 million, compared to $105.3 million, representing an increase of $25.6 million.

• Salaries and employee benefits expense was $93.8 million, an increase of $28.5 million. The increase in salaries expense of $24.6 million was due primarily to the addition of colleagues, and an increase in merger-related expenses of $11.8 million, including retention bonuses and severance payments. The increase in employee benefits expense of $3.9 million was attributable to an increase in federal payroll tax expense of $1.4 million, as well as the addition of colleagues and the increased market value of investments held in rabbi trust accounts by the Company’s defined contribution supplemental executive retirement plan (“DC SERP”).
• Office occupancy and equipment expense was $14.5 million, an increase of $4.4 million, due primarily to merger-related expenses of $2.6 million, as well as the addition of leases and equipment from the merger.
• Data processing expense was $19.5 million, an increase of $1.5 million.
• Professional services expense was $9.0 million, an increase of $4.7 million, due primarily to merger-related expenses of $4.5 million.
• Marketing expense was $1.6 million, a decrease of $0.3 million.
• Federal Deposit Insurance Corporation (“FDIC”) insurance expense was $3.2 million, a decrease of $1.3 million. The prior quarter included a FDIC special assessment of $1.9 million.
• Amortization of intangible assets was $6.2 million, an increase of $5.7 million, driven primarily by the amortization of core deposit intangibles and wealth management intangibles in connection with the merger.
• Other noninterest expense was $12.1 million, an increase of $6.7 million, due primarily to an increase in provision for off balance sheet credit exposures of $2.9 million, including a $1.9 million initial provision on off balance sheet credit exposures acquired from Cambridge, as well as merger-related contract termination fees of $2.6 million.

Please refer to Appendix D for additional detail on merger-related charges.

ASSET QUALITY

Non-performing loans (“NPLs”) totaled $124.5 million, or 0.70% of total loans, at September 30, 2024 compared to $39.8 million, or 0.28% of total loans, at the end of the prior quarter. The increase in NPLs was driven primarily by purchased credit deteriorated (“PCD”) loans acquired from Cambridge that were on non-accrual status at September 30, 2024.

During the third quarter of 2024, the Company recorded total net charge-offs of $5.1 million, or 0.12% of average total loans on an annualized basis, compared to total net recoveries of $0.8 million, or 0.02% of average total loans on an annualized basis, in the prior quarter, respectively.

The Company recorded a provision for loan losses totaling $47.0 million, including a $40.9 million initial provision on non-PCD loans acquired from Cambridge. The remaining provision was primarily associated with individual reserves on commercial real estate loans during the quarter.

The allowance for loan losses was $253.8 million at September 30, 2024, or 1.43% of total loans, compared to $156.1 million, or 1.11% of total loans, at June 30, 2024. The allowance in the third quarter included a $55.8 million initial allowance on PCD loans and a $40.9 million allowance established via the aforementioned initial provision on non-PCD loans, both related to the merger.

DIVIDENDS AND SHARE REPURCHASES

The Company’s Board of Directors declared a quarterly cash dividend of $0.12 per common share, representing a $0.01, or 9%, increase. The dividend will be payable on December 16, 2024 to shareholders of record as of the close of business on December 3, 2024.

The Company repurchased 836,399 shares of common stock during the third quarter at a weighted average price of $15.08, for an aggregate purchase price of $12.6 million.

CONFERENCE CALL AND PRESENTATION INFORMATION

A conference call and webcast covering Eastern’s third quarter 2024 earnings will be held on Friday, October 25, 2024 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (800) 549-8228 from within the U.S. and reference conference ID 35193. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A presentation providing additional information for the quarter is also available at investor.easternbank.com. A replay of the webcast will be available on this site.

ABOUT EASTERN BANKSHARES, INC.

Eastern Bankshares, Inc. is the holding company for Eastern Bank. Founded in 1818, Eastern Bank is Greater Boston’s leading local bank with more than 110 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, Rhode Island and Connecticut. As of September 30, 2024, Eastern Bank had approximately $25.5 billion in assets. Eastern provides a full range of banking and wealth management solutions for consumers and businesses of all sizes including through its Cambridge Trust Wealth Management division, the largest bank-owned investment advisor in Massachusetts with approximately $8.4 billion in assets under management, and takes pride in its outspoken advocacy and community support that includes more than $240 million in charitable giving since 1994. An inclusive company, Eastern is comprised of deeply committed professionals who value relationships with their customers, colleagues and communities. For investor information, visit investor.easternbank.com.

NON-GAAP FINANCIAL MEASURES

*Denotes a non-GAAP financial measure used in the press release.

A non-GAAP financial measure is defined as a numerical measure of the Company’s historical or future financial performance, financial position or cash flows that excludes (or includes) amounts, or is subject to adjustments that have the effect of excluding (or including) amounts that are included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) in the Company’s statement of income, balance sheet or statement of cash flows (or equivalent statements).

The Company presents non-GAAP financial measures, which management uses to evaluate the Company’s performance, and which exclude the effects of certain transactions that management believes are unrelated to its core business and are therefore not necessarily indicative of its current performance or financial position. Management believes excluding these items facilitates greater visibility for investors into the Company’s core business as well as underlying trends that may, to some extent, be obscured by inclusion of such items in the corresponding GAAP financial measures. Except as otherwise indicated, these non-GAAP financial measures presented in this press release exclude discontinued operations.

There are items in the Company’s financial statements that impact its financial results, but which management believes are unrelated to the Company’s core business. Accordingly, the Company presents noninterest income on an operating basis, total operating revenue, noninterest expense on an operating basis, operating net income, operating earnings per share, operating return on average assets, operating return on average shareholders’ equity, operating return on average tangible shareholders’ equity (discussed further below), and the operating efficiency ratio. Each of these figures excludes the impact of such applicable items because management believes such exclusion can provide greater visibility into the Company’s core business and underlying trends. Such items that management does not consider to be core to the Company’s business include (i) income and expenses from investments held in rabbi trusts, (ii) gains and losses on sales of securities available for sale, net, (iii) gains and losses on the sale of other assets, (iv) rabbi trust employee benefits, (v) impairment charges on tax credit investments and associated tax credit benefits, (vi) other real estate owned (“OREO”) gains, (vii) merger and acquisition expenses, (viii) the non-cash pension settlement charge recognized related to the defined benefit plan, (ix) certain discrete tax items, and (x) net income from discontinued operations. Return on average tangible shareholders’ equity, operating return on average tangible shareholders’ equity as well as the operating efficiency ratio also further exclude the effect of amortization of intangible assets. The Company does not provide an outlook for its total noninterest income and total noninterest expense because each contains income or expense components, as applicable, such as income associated with rabbi trust accounts and rabbi trust employee benefit expense, which are market-driven, and over which the Company cannot exercise control. Accordingly, reconciliations of the Company’s outlook for its noninterest income on an operating basis and its noninterest expense on an operating basis to an outlook for total noninterest income and total noninterest expense are not provided.

Management also presents tangible assets, tangible shareholders’ equity, average tangible shareholders’ equity, tangible book value per share, the ratio of tangible shareholders’ equity to tangible assets, return on average tangible shareholders’ equity, and operating return on average shareholders’ equity (discussed further above), each of which excludes the impact of goodwill and other intangible assets and in the case of tangible net income (loss), return on average tangible shareholders’ equity and operating return on average tangible shareholders’ equity excludes the after-tax impact of amortization of intangible assets, as management believes these financial measures provide investors with the ability to further assess the Company’s performance, identify trends in its core business and provide a comparison of its capital adequacy to other companies. The Company includes the tangible ratios because management believes that investors may find it useful to have access to the same analytical tools used by management to assess performance and identify trends.

These non-GAAP financial measures presented in this press release should not be considered an alternative or substitute for financial results or measures determined in accordance with GAAP or as an indication of the Company’s cash flows from operating activities, a measure of its liquidity position or an indication of funds available for its cash needs. An item which management considers to be non-core and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular period. In addition, management’s methodology for calculating non-GAAP financial measures may differ from the methodologies employed by other banking companies to calculate the same or similar performance measures, and accordingly, the Company’s reported non-GAAP financial measures may not be comparable to the same or similar performance measures reported by other banking companies. Please refer to Appendices A-E for reconciliations of the Company's GAAP financial measures to the non-GAAP financial measures in this press release.

FORWARD-LOOKING STATEMENTS

This press release contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target”, “outlook” and similar expressions. Forward-looking statements, by their nature, are subject to risks and uncertainties. There are many factors that could cause actual results to differ materially from expected results described in the forward-looking statements.

Certain factors that could cause actual results to differ materially from expected results include; adverse developments in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for loan losses; increased competitive pressures; changes in interest rates and resulting changes in competitor or customer behavior, mix or costs of sources of funding, and deposit amounts and composition; risks associated with the Company’s implementation of the merger, including that revenue or expense synergies may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; that following completion of the merger, Eastern’s business may not perform as expected due to transaction-related uncertainty or other factors; that Eastern is unable to successfully implement integration strategies; that Eastern’s expansion of services or capabilities resulting from the merger may be more challenging than anticipated; reputational risks and the reaction of customers to the transaction; the inability to implement onboarding plans and other consequences associated with mergers; the diversion of management time and Company resources on merger-related issues; and disruptions arising from transitions in management personnel; adverse national or regional economic conditions or conditions within the securities markets or banking sector; legislative and regulatory changes and related compliance costs that could adversely affect the business in which the Company and its subsidiaries, including Eastern Bank, are engaged, including the effect of, and changes in, monetary and fiscal policies and laws, such as the interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations, including inflationary or recessionary pressures, interest rate sensitivity, liquidity constraints, increased borrowing and funding costs, and fluctuations due to actual or anticipated changes to federal tax laws; the realizability of deferred tax assets; the Company’s ability to successfully implement its risk mitigation strategies; asset and credit quality deterioration, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; operational risks such as cybersecurity incidents, natural disasters, and pandemics, including COVID-19 and the failure of the Company to execute its planned share repurchases. For further discussion of such factors, please see the Company’s most recent Annual Report on Form 10-K and subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available on the SEC’s website at www.sec.gov.

You should not place undue reliance on forward-looking statements, which reflect the Company's expectations only as of the date of this press release. The Company does not undertake any obligation to update forward-looking statements.

EASTERN BANKSHARES, INC.

SELECTED FINANCIAL HIGHLIGHTS (1)

Certain information in this press release is presented as reviewed by the Company’s management and includes information derived from the Company’s Consolidated Statements of Income, non-GAAP financial measures, and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."

	As of and for the three months ended
(Unaudited, dollars in thousands, except per-share data)	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Earnings data
Net interest income	$	169,855		$	128,649		$	129,900		$	133,307		$	137,205
Noninterest income		33,528			25,348			27,692			26,739			19,157
Total revenue		203,383			153,997			157,592			160,046			156,362
Noninterest expense		159,753			109,869			101,202			121,029			101,748
Pre-tax, pre-provision income		43,630			44,128			56,390			39,017			54,614
Provision for allowance for loan losses		46,983			6,126			7,451			5,198			7,328
Pre-tax (loss) income		(3,353	)		38,002			48,939			33,819			47,286
Net (loss) income from continuing operations		(6,188	)		26,331			38,647			31,509			63,464
Net income (loss) from discontinued operations		—			—			—			286,994			(4,351	)
Net (loss) income		(6,188	)		26,331			38,647			318,503			59,113
Operating net income (non-GAAP)		49,665			36,519			38,081			16,875			52,085
Per-share data
(Loss) earnings per share, diluted	$	(0.03	)	$	0.16		$	0.24		$	1.95		$	0.36
Continuing operations	$	(0.03	)	$	0.16		$	0.24		$	0.19		$	0.39
Discontinued operations	$	—		$	—		$	—		$	1.76		$	(0.03	)
Operating earnings per share, diluted (non-GAAP)	$	0.25		$	0.22		$	0.23		$	0.10		$	0.32
Book value per share	$	17.09		$	16.80		$	16.72		$	16.86		$	13.87
Tangible book value per share (non-GAAP)	$	12.17		$	13.60		$	13.51		$	13.65		$	10.14
Profitability
Return on average assets (2)		(0.10	)%		0.50	%		0.74	%		0.59	%		1.18	%
Operating return on average assets (non-GAAP) (2)		0.79	%		0.70	%		0.72	%		0.31	%		0.97	%
Return on average shareholders' equity (2)		(0.70	)%		3.62	%		5.23	%		4.66	%		9.91	%
Operating return on average shareholders' equity (2)		5.60	%		5.03	%		5.17	%		2.51	%		8.14	%
Return on average tangible shareholders' equity (non-GAAP) (2) (3)		(0.26	)%		4.54	%		6.52	%		6.06	%		13.46	%
Operating return on average tangible shareholders' equity (non-GAAP) (2) (3)		8.45	%		6.28	%		6.42	%		3.27	%		11.07	%
Net interest margin (FTE) (2)		2.97	%		2.64	%		2.68	%		2.69	%		2.77	%
Cost of deposits (2)		1.82	%		1.78	%		1.66	%		1.51	%		1.33	%
Efficiency ratio		78.5	%		71.3	%		64.2	%		75.6	%		65.1	%
Operating efficiency ratio (non-GAAP) (4)		60.1	%		63.7	%		61.6	%		73.3	%		60.5	%
Balance Sheet (end of period)
Total assets	$	25,507,187		$	21,044,169		$	21,174,804		$	21,133,278		$	21,146,292
Total loans		18,064,126			14,145,520			14,088,747			13,973,428			13,919,275
Total deposits		21,216,854			17,537,809			17,666,733			17,596,217			17,424,169
Total loans / total deposits		85	%		81	%		80	%		79	%		80	%
Asset quality
Allowance for loan losses ("ALLL")	$	253,821		$	156,146		$	149,190		$	148,993		$	155,146
ALLL / total nonperforming loans ("NPLs")		203.87	%		392.61	%		260.94	%		283.49	%		326.86	%
Total NPLs / total loans		0.70	%		0.28	%		0.41	%		0.38	%		0.34	%
Net charge-offs ("NCOs") (recoveries) / average total loans (2)		0.12	%		(0.02	)%		0.21	%		0.32	%		0.00	%
Capital adequacy
Shareholders' equity / assets		14.39	%		14.10	%		13.95	%		14.08	%		11.57	%
Tangible shareholders' equity / tangible assets (non-GAAP)		10.69	%		11.73	%		11.58	%		11.71	%		8.73	%
(1) Total assets, average assets and average tangible shareholders' equity components as of and for the three months ended Sep 30, 2023 and Dec 31, 2023 presented in this table include discontinued operations.
(2) Presented on an annualized basis.
(3) The return on average tangible shareholders' equity ratio and operating return on average tangible shareholders' equity ratio exclude the amortization of intangible assets, net of tax.
(4) The operating efficiency ratio excludes the amortization of intangible assets.

EASTERN BANKSHARES, INC.
CONSOLIDATED BALANCE SHEETS
	As of										Sep 30, 2024 change from
(Unaudited, dollars in thousands)	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023				Jun 30, 2024						Sep 30, 2023
ASSETS											△ $			△ %			△ $			△ %
Cash and due from banks	$	98,299		$	72,890		$	72,689			$	25,409		35	%		$	25,610		35	%
Short-term investments		791,177			677,958			536,119				113,219		17	%			255,058		48	%
Cash and cash equivalents		889,476			750,848			608,808				138,628		18	%			280,668		46	%
Available for sale ("AFS") securities		4,163,352			4,097,842			4,261,518				65,510		2	%			(98,166	)	(2	)%
Held to maturity ("HTM") securities		427,459			436,712			455,900				(9,253	)	(2	)%			(28,441	)	(6	)%
Total securities		4,590,811			4,534,554			4,717,418				56,257		1	%			(126,607	)	(3	)%
Loans held for sale		1,993			1,308			23,892				685		52	%			(21,899	)	(92	)%
Loans:
Commercial and industrial		3,340,029			3,084,186			3,087,509				255,843		8	%			252,520		8	%
Commercial real estate		7,174,861			5,440,411			5,396,912				1,734,450		32	%			1,777,949		33	%
Commercial construction		513,519			447,157			382,615				66,362		15	%			130,904		34	%
Business banking		1,321,179			1,108,163			1,087,799				213,016		19	%			233,380		21	%
Total commercial loans		12,349,588			10,079,917			9,954,835				2,269,671		23	%			2,394,753		24	%
Residential real estate		4,080,736			2,562,808			2,550,861				1,517,928		59	%			1,529,875		60	%
Consumer home equity		1,361,971			1,254,105			1,193,859				107,866		9	%			168,112		14	%
Other consumer		271,831			248,690			219,720				23,141		9	%			52,111		24	%
Total loans		18,064,126			14,145,520			13,919,275				3,918,606		28	%			4,144,851		30	%
Allowance for loan losses		(253,821	)		(156,146	)		(155,146	)			(97,675	)	63	%			(98,675	)	64	%
Unamortized prem./disc. and def. fees		(308,243	)		(35,601	)		(19,307	)			(272,642	)	766	%			(288,936	)	1497	%
Net loans		17,502,062			13,953,773			13,744,822				3,548,289		25	%			3,757,240		27	%
Federal Home Loan Bank stock, at cost		5,865			5,879			37,125				(14	)	—	%			(31,260	)	(84	)%
Premises and equipment		78,776			60,910			59,033				17,866		29	%			19,743		33	%
Bank-owned life insurance		203,635			166,710			163,700				36,925		22	%			39,935		24	%
Goodwill and other intangibles, net		1,057,509			565,196			566,709				492,313		87	%			490,800		87	%
Deferred income taxes, net		319,206			276,064			416,081				43,142		16	%			(96,875	)	(23	)%
Prepaid expenses		201,285			183,245			156,113				18,040		10	%			45,172		29	%
Other assets		656,569			545,682			527,873				110,887		20	%			128,696		24	%
Assets of discontinued operations		—			—			124,718				—		—	%			(124,718	)	(100	)%
Total assets	$	25,507,187		$	21,044,169		$	21,146,292			$	4,463,018		21	%		$	4,360,895		21	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand	$	5,856,171		$	4,808,938		$	5,177,015			$	1,047,233		22	%		$	679,156		13	%
Interest checking accounts		4,562,226			3,532,811			3,671,871				1,029,415		29	%			890,355		24	%
Savings accounts		1,681,093			1,238,009			1,393,545				443,084		36	%			287,548		21	%
Money market investment		5,572,277			5,014,900			4,709,149				557,377		11	%			863,128		18	%
Certificates of deposit		3,545,087			2,943,151			2,472,589				601,936		20	%			1,072,498		43	%
Total deposits		21,216,854			17,537,809			17,424,169				3,679,045		21	%			3,792,685		22	%
Borrowed funds:
Federal Home Loan Bank advances		17,342			17,415			673,525				(73	)	—	%			(656,183	)	(97	)%
Escrow deposits of borrowers		29,405			20,155			24,947				9,250		46	%			4,458		18	%
Interest rate swap collateral funds		24,070			11,370			16,900				12,700		112	%			7,170		42	%
Total borrowed funds		70,817			48,940			715,372				21,877		45	%			(644,555	)	(90	)%
Other liabilities		548,378			489,947			525,378				58,431		12	%			23,000		4	%
Liabilities of discontinued operations		—			—			34,820				—		—	%			(34,820	)	(100	)%
Total liabilities		21,836,049			18,076,696			18,699,739				3,759,353		21	%			3,136,310		17	%
Shareholders' equity:
Common shares		2,150			1,770			1,766				380		21	%			384		22	%
Additional paid-in capital		2,246,134			1,673,722			1,661,136				572,412		34	%			584,998		35	%
Unallocated common shares held by the employee stock ownership plan ("ESOP")		(129,077	)		(130,295	)		(133,992	)			1,218		(1	)%			4,915		(4	)%
Retained earnings		2,048,042			2,076,566			1,747,225				(28,524	)	(1	)%			300,817		17	%
Accumulated other comprehensive income ("AOCI"), net of tax		(496,111	)		(654,290	)		(829,582	)			158,179		(24	)%			333,471		(40	)%
Total shareholders' equity		3,671,138			2,967,473			2,446,553				703,665		24	%			1,224,585		50	%
Total liabilities and shareholders' equity	$	25,507,187		$	21,044,169		$	21,146,292			$	4,463,018		21	%		$	4,360,895		21	%

EASTERN BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
	Three months ended										Three months ended Sep 30, 2024 change from three months ended
(Unaudited, dollars in thousands, except per-share data)	Sep 30, 2024			Jun 30, 2024			Sep 30, 2023				Jun 30, 2024						Sep 30, 2023
Interest and dividend income:											△ $			△ %			△ $			△ %
Interest and fees on loans	$	230,824		$	172,514		$	169,274			$	58,310		34	%		$	61,550		36	%
Taxable interest and dividends on securities		22,421			22,724			24,191				(303	)	(1	)%			(1,770	)	(7	)%
Non-taxable interest and dividends on securities		1,444			1,439			1,434				5		—	%			10		1	%
Interest on federal funds sold and other short-term investments		11,329			10,699			7,269				630		6	%			4,060		56	%
Total interest and dividend income		266,018			207,376			202,168				58,642		28	%			63,850		32	%
Interest expense:
Interest on deposits		95,334			78,473			59,607				16,861		21	%			35,727		60	%
Interest on borrowings		829			254			5,356				575		226	%			(4,527	)	(85	)%
Total interest expense		96,163			78,727			64,963				17,436		22	%			31,200		48	%
Net interest income		169,855			128,649			137,205				41,206		32	%			32,650		24	%
Provision for allowance for loan losses		46,983			6,126			7,328				40,857		667	%			39,655		541	%
Net interest income after provision for allowance for loan losses		122,872			122,523			129,877				349		—	%			(7,005	)	(5	)%
Noninterest income:
Trust and investment advisory fees		14,909			6,711			6,235				8,198		122	%			8,674		139	%
Service charges on deposit accounts		8,140			7,930			7,403				210		3	%			737		10	%
Debit card processing fees		3,806			3,522			3,388				284		8	%			418		12	%
Interest rate swap income		565			418			1,695				147		35	%			(1,130	)	(67	)%
Income (losses) from investments held in rabbi trusts		3,591			1,761			(1,523	)			1,830		104	%			5,114		(336	)%
Losses on sales of commercial and industrial loans		—			—			(2,651	)			—		—	%			2,651		(100	)%
Losses on sales of mortgage loans held for sale, net		(385	)		(152	)		(164	)			(233	)	153	%			(221	)	135	%
Losses on sales of securities available for sale, net		—			(7,557	)		—				7,557		(100	)%			—		—	%
Other		2,902			12,715			4,774				(9,813	)	(77	)%			(1,872	)	(39	)%
Total noninterest income		33,528			25,348			19,157				8,180		32	%			14,371		75	%
Noninterest expense:
Salaries and employee benefits		93,759			65,218			60,898				28,541		44	%			32,861		54	%
Office occupancy and equipment		14,470			10,109			8,641				4,361		43	%			5,829		67	%
Data processing		19,504			17,990			13,443				1,514		8	%			6,061		45	%
Professional services		8,982			4,250			7,125				4,732		111	%			1,857		26	%
Marketing expenses		1,576			1,910			1,765				(334	)	(17	)%			(189	)	(11	)%
Federal Deposit Insurance Corporation ("FDIC") insurance		3,200			4,508			2,808				(1,308	)	(29	)%			392		14	%
Amortization of intangible assets		6,210			504			504				5,706		1132	%			5,706		1132	%
Other		12,052			5,380			6,564				6,672		124	%			5,488		84	%
Total noninterest expense		159,753			109,869			101,748				49,884		45	%			58,005		57	%
(Loss) income before income tax expense (benefit)		(3,353	)		38,002			47,286				(41,355	)	(109	)%			(50,639	)	(107	)%
Income tax expense (benefit)		2,835			11,671			(16,178	)			(8,836	)	(76	)%			19,013		(118	)%
Net (loss) income from continuing operations	$	(6,188	)	$	26,331		$	63,464			$	(32,519	)	(124	)%		$	(69,652	)	(110	)%
Net loss from discontinued operations	$	—		$	—		$	(4,351	)		$	—		—	%		$	4,351		(100	)%
Net (loss) income	$	(6,188	)	$	26,331		$	59,113			$	(32,519	)	(124	)%		$	(65,301	)	(110	)%
Share data:
Weighted average common shares outstanding, basic		196,700,222			163,145,255			162,370,469				33,554,967		21	%			34,329,753		21	%
Weighted average common shares outstanding, diluted		197,706,644			163,499,296			162,469,887				34,207,348		21	%			35,236,757		22	%
(Loss) earnings per share, basic:
Continuing operations	$	(0.03	)	$	0.16		$	0.39			$	(0.19	)	(119	)%		$	(0.42	)	(108	)%
Discontinued operations	$	—		$	—		$	(0.03	)		$	—		0	%		$	0.03		(100	)%
(Loss) earnings per share, basic	$	(0.03	)	$	0.16		$	0.36			$	(0.19	)	(119	)%		$	(0.39	)	(108	)%
(Loss) earnings per share, diluted:
Continuing operations	$	(0.03	)	$	0.16		$	0.39			$	(0.19	)	(119	)%		$	(0.42	)	(108	)%
Discontinued operations	$	—		$	—		$	(0.03	)		$	—		0	%		$	0.03		(100	)%
(Loss) earnings per share, diluted	$	(0.03	)	$	0.16		$	0.36			$	(0.19	)	(119	)%		$	(0.39	)	(108	)%

EASTERN BANKSHARES, INC.
CONSOLIDATED STATEMENTS OF INCOME
	Nine months ended
(Unaudited, dollars in thousands, except per-share data)	Sep 30, 2024			Sep 30, 2023				Change
Interest and dividend income:								△ $			△ %
Interest and fees on loans	$	573,319		$	483,676			$	89,643		19	%
Taxable interest and dividends on securities		68,518			77,451				(8,933	)	(12	)%
Non-taxable interest and dividends on securities		4,320			4,302				18		—	%
Interest on federal funds sold and other short-term investments		29,848			27,384				2,464		9	%
Total interest and dividend income		676,005			592,813				83,192		14	%
Interest expense:
Interest on deposits		246,265			158,686				87,579		55	%
Interest on borrowings		1,336			17,025				(15,689	)	(92	)%
Total interest expense		247,601			175,711				71,890		41	%
Net interest income		428,404			417,102				11,302		3	%
Provision for allowance for loan losses		60,560			14,854				45,706		308	%
Net interest income after provision for allowance for loan losses		367,844			402,248				(34,404	)	(9	)%
Noninterest income:
Trust and investment advisory fees		28,164			18,136				10,028		55	%
Service charges on deposit accounts		23,578			21,117				2,461		12	%
Debit card processing fees		10,575			10,071				504		5	%
Interest rate swap income		1,650			2,112				(462	)	(22	)%
Income from investments held in rabbi trusts		9,670			4,336				5,334		123	%
Losses on sales of commercial and industrial loans		—			(2,651	)			2,651		(100	)%
Losses on sales of mortgage loans held for sale, net		(595	)		(288	)			(307	)	107	%
Losses on sales of securities available for sale, net		(7,557	)		(333,170	)			325,613		(98	)%
Other		21,083			15,845				5,238		33	%
Total noninterest income (loss)		86,568			(264,492	)			351,060		(133	)%
Noninterest expense:
Salaries and employee benefits		223,448			185,264				38,184		21	%
Office occupancy and equipment		33,763			26,797				6,966		26	%
Data processing		54,003			38,555				15,448		40	%
Professional services		16,744			13,277				3,467		26	%
Marketing expenses		5,001			4,899				102		2	%
Federal Deposit Insurance Corporation ("FDIC") insurance		9,993			8,388				1,605		19	%
Amortization of intangible assets		7,218			1,299				5,919		456	%
Other		20,654			19,094				1,560		8	%
Total noninterest expense		370,824			297,573				73,251		25	%
Income (loss) before income tax expense		83,588			(159,817	)			243,405		(152	)%
Income tax expense (benefit)		24,798			(65,619	)			90,417		(138	)%
Net income (loss) from continuing operations		58,790			(94,198	)			152,988		(162	)%
Net income from discontinued operations		—			7,872				(7,872	)	(100	)%
Net income (loss)	$	58,790		$	(86,326	)		$	145,116		(168	)%
Share data:
Weighted average common shares outstanding, basic		174,398,692			162,199,158				12,199,534		8	%
Weighted average common shares outstanding, diluted		175,270,559			162,260,503				13,010,056		8	%
Earnings (loss) per share, basic:
Continuing operations	$	0.34		$	(0.58	)		$	0.92		(159	)%
Discontinued operations	$	—		$	0.05			$	(0.05	)	(100	)%
Earnings (loss) per share, basic	$	0.34		$	(0.53	)		$	0.87		(164	)%
Earnings (loss) per share, diluted:
Continuing operations	$	0.34		$	(0.58	)		$	0.92		(159	)%
Discontinued operations	$	—		$	0.05			$	(0.05	)	(100	)%
Earnings (loss) per share, diluted	$	0.34		$	(0.53	)		$	0.87		(164	)%

EASTERN BANKSHARES, INC.
AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS
	As of and for the three months ended
	Sep 30, 2024									Jun 30, 2024									Sep 30, 2023
(Unaudited, dollars in thousands)	Avg. Balance			Interest			Yield / Cost (5)			Avg. Balance			Interest			Yield / Cost (5)			Avg. Balance			Interest			Yield / Cost (5)
Interest-earning assets:
Loans (1):
Commercial	$	11,935,922		$	167,712		5.59	%		$	10,103,674		$	128,402		5.11	%		$	9,988,712		$	128,051		5.09	%
Residential		3,772,420			40,484		4.27	%			2,563,646			24,313		3.81	%			2,553,150			22,988		3.57	%
Consumer		1,568,372			27,026		6.86	%			1,446,543			23,960		6.66	%			1,386,350			22,227		6.36	%
Total loans		17,276,714			235,222		5.42	%			14,113,863			176,675		5.03	%			13,928,212			173,266		4.94	%
Total investment securities		5,322,650			24,259		1.81	%			5,428,583			24,555		1.82	%			5,777,173			26,009		1.79	%
Federal funds sold and other short-term investments		833,184			11,329		5.41	%			787,387			10,699		5.47	%			537,602			7,269		5.36	%
Total interest-earning assets		23,432,548			270,810		4.60	%			20,329,833			211,929		4.19	%			20,242,987			206,544		4.05	%
Non-interest-earning assets		1,606,357									912,302									1,033,879
Total assets	$	25,038,905								$	21,242,135								$	21,276,866
Interest-bearing liabilities:
Deposits:
Savings	$	1,646,532		$	1,526		0.37	%		$	1,259,573		$	42		0.01	%		$	1,441,636		$	43		0.01	%
Interest checking		4,548,231			13,428		1.17	%			3,739,590			8,827		0.95	%			3,903,062			6,302		0.64	%
Money market		5,631,626			39,994		2.83	%			4,975,843			34,022		2.75	%			4,836,895			27,695		2.27	%
Time deposits		3,365,392			40,386		4.77	%			2,933,160			35,582		4.88	%			2,341,684			25,567		4.33	%
Total interest-bearing deposits		15,191,781			95,334		2.50	%			12,908,166			78,473		2.45	%			12,523,277			59,607		1.89	%
Borrowings		89,398			829		3.69	%			49,536			254		2.06	%			414,252			5,356		5.13	%
Total interest-bearing liabilities		15,281,179			96,163		2.50	%			12,957,702			78,727		2.44	%			12,937,529			64,963		1.99	%
Demand deposit accounts		5,666,471									4,843,336									5,257,704
Other noninterest-bearing liabilities		564,961									512,996									541,827
Total liabilities		21,512,611									18,314,034									18,737,060
Shareholders' equity		3,526,294									2,928,101									2,539,806
Total liabilities and shareholders' equity	$	25,038,905								$	21,242,135								$	21,276,866
Net interest income - FTE				$	174,647								$	133,202								$	141,581
Net interest rate spread (2)							2.10	%								1.75	%								2.06	%
Net interest-earning assets (3)	$	8,151,369								$	7,372,131								$	7,305,458
Net interest margin - FTE (4)							2.97	%								2.64	%								2.77	%
(1) Includes non-accrual loans.
(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4) Net interest margin - FTE represents fully-taxable equivalent net interest income divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income.
(5) Presented on an annualized basis.

EASTERN BANKSHARES, INC.
AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS
	As of and for the nine months ended
	Sep 30, 2024									Sep 30, 2023
(Unaudited, dollars in thousands)	Avg. Balance			Interest			Yield / Cost (5)			Avg. Balance			Interest			Yield / Cost (5)
Interest-earning assets:
Loans (1):
Commercial	$	10,692,519		$	422,955		5.28	%		$	9,892,337		$	365,298		4.94	%
Residential		2,971,889			88,791		3.99	%			2,526,980			66,593		3.52	%
Consumer		1,478,664			74,224		6.71	%			1,371,761			63,333		6.17	%
Total loans		15,143,072			585,970		5.17	%			13,791,078			495,224		4.80	%
Total investment securities		5,441,498			74,015		1.82	%			6,442,141			82,903		1.72	%
Federal funds sold and other short-term investments		732,738			29,848		5.44	%			721,025			27,384		5.08	%
Total interest-earning assets		21,317,308			689,833		4.32	%			20,954,244			605,511		3.86	%
Non-interest-earning assets		1,157,155									952,378
Total assets	$	22,474,463								$	21,906,622
Interest-bearing liabilities:
Deposits:
Savings	$	1,402,050		$	1,609		0.15	%		$	1,570,803		$	172		0.01	%
Interest checking		4,012,872			30,442		1.01	%			4,177,492			17,155		0.55	%
Money market		5,118,366			104,512		2.73	%			4,979,820			74,612		2.00	%
Time deposits		3,029,125			109,702		4.84	%			2,184,631			66,747		4.08	%
Total interest-bearing deposits		13,562,413			246,265		2.43	%			12,912,746			158,686		1.64	%
Borrowings		63,334			1,336		2.82	%			478,347			17,025		4.76	%
Total interest-bearing liabilities		13,625,747			247,601		2.43	%			13,391,093			175,711		1.75	%
Demand deposit accounts		5,168,176									5,469,593
Other noninterest-bearing liabilities		537,418									512,546
Total liabilities		19,331,341									19,373,232
Shareholders' equity		3,143,122									2,533,390
Total liabilities and shareholders' equity	$	22,474,463								$	21,906,622
Net interest income - FTE				$	442,232								$	429,800
Net interest rate spread (2)							1.89	%								2.11	%
Net interest-earning assets (3)	$	7,691,561								$	7,563,151
Net interest margin - FTE (4)							2.77	%								2.74	%
(1) Includes non-accrual loans.
(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4) Net interest margin - FTE represents fully-taxable equivalent net interest income divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income.
(5) Presented on an annualized basis.

EASTERN BANKSHARES, INC.
ASSET QUALITY - NON-PERFORMING ASSETS (1)
	As of
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
(Unaudited, dollars in thousands)
Non-accrual loans:
Commercial	$	105,099		$	26,139		$	40,986		$	35,107		$	31,703
Residential		10,450			6,789			6,697			8,725			8,075
Consumer		8,954			6,843			9,490			8,725			7,687
Total non-accrual loans		124,503			39,771			57,173			52,557			47,465
Total accruing loans past due 90 days or more:		—			—			—			—			—
Total non-performing loans		124,503			39,771			57,173			52,557			47,465
Other real estate owned		—			—			—			—			—
Other non-performing assets:		—			—			—			—			—
Total non-performing assets (1)	$	124,503		$	39,771		$	57,173		$	52,557		$	47,465
Total non-performing loans to total loans		0.70	%		0.28	%		0.41	%		0.38	%		0.34	%
Total non-performing assets to total assets		0.49	%		0.19	%		0.27	%		0.25	%		0.22	%
(1) Non-performing assets are comprised of NPLs, other real estate owned ("OREO"), and non-performing securities. NPLs consist of non-accrual loans and loans that are more than 90 days past due but still accruing interest. OREO consists of real estate properties, which primarily serve as collateral to secure the Company’s loans, that it controls due to foreclosure or acceptance of a deed in lieu of foreclosure.

EASTERN BANKSHARES, INC.
ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE-OFFS (RECOVERIES)
	Three months ended
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
(Unaudited, dollars in thousands)
Average total loans	$	17,274,903		$	14,113,343		$	14,013,714		$	13,961,061		$	13,926,194
Allowance for loan losses, beginning of the period		156,146			149,190			148,993			155,146			147,955
Charged-off loans:
Commercial and industrial		—			—			—			2			11
Commercial real estate		4,520			—			7,250			8,008			—
Commercial construction		—			—			—			—			—
Business banking		675			1,002			102			3,745			303
Residential real estate		18			—			10			—			—
Consumer home equity		—			32			2			—			—
Other consumer		561			658			651			536			731
Total charged-off loans		5,774			1,692			8,015			12,291			1,045
Recoveries on loans previously charged-off:
Commercial and industrial		7			56			25			11			120
Commercial real estate		64			2,011			132			190			2
Commercial construction		—			—			—			—			—
Business banking		319			199			410			573			609
Residential real estate		61			27			31			34			30
Consumer home equity		19			91			—			1			39
Other consumer		166			138			163			131			108
Total recoveries		636			2,522			761			940			908
Net loans charged-off (recovered):
Commercial and industrial		(7	)		(56	)		(25	)		(9	)		(109	)
Commercial real estate		4,456			(2,011	)		7,118			7,818			(2	)
Commercial construction		—			—			—			—			—
Business banking		356			803			(308	)		3,172			(306	)
Residential real estate		(43	)		(27	)		(21	)		(34	)		(30	)
Consumer home equity		(19	)		(59	)		2			(1	)		(39	)
Other consumer		395			520			488			405			623
Total net loans charged-off (recovered)		5,138			(830	)		7,254			11,351			137
Initial allowance established for Cambridge's PCD loans		55,830			—			—			—			—
Provision for allowance for loan losses (2)		46,983			6,126			7,451			5,198			7,328
Total allowance for loan losses, end of period	$	253,821		$	156,146		$	149,190		$	148,993		$	155,146
Net charge-offs (recoveries) to average total loans outstanding during this period (1)		0.12	%		(0.02	)%		0.21	%		0.32	%		0.00	%
Allowance for loan losses as a percent of total loans		1.43	%		1.11	%		1.06	%		1.07	%		1.12	%
Allowance for loan losses as a percent of nonperforming loans		203.87	%		392.61	%		260.94	%		283.49	%		326.86	%
(1) Presented on an annualized basis.
(2) Includes the initial provision on non-PCD loans acquired from Cambridge.

APPENDIX A: Reconciliation of Non-GAAP Earnings Metrics (1)
For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."
	As of and for the Three Months Ended
(Unaudited, dollars in thousands, except per-share data)	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Net (loss) income from continuing operations (GAAP)	$	(6,188	)	$	26,331		$	38,647		$	31,509		$	63,464
Add:
Provision for non-PCD acquired loans		40,899			—			—			—			—
Noninterest income components:
(Income) losses from investments held in rabbi trusts		(3,591	)		(1,761	)		(4,318	)		(4,969	)		1,523
Losses on sales of securities available for sale, net		—			7,557			—			—			—
Losses (gains) on sales of other assets		2,970			2			—			—			(2	)
Noninterest expense components:
Rabbi trust employee benefit expense (income)		1,326			930			1,746			1,740			(586	)
Merger and acquisition expenses		27,577			3,684			1,816			1,865			3,630
Total impact of non-GAAP adjustments		69,181			10,412			(756	)		(1,364	)		4,565
Less: net tax benefit (expense) associated with non-GAAP adjustments (2)		13,328			224			(190	)		13,270			15,944
Non-GAAP adjustments, net of tax	$	55,853		$	10,188		$	(566	)	$	(14,634	)	$	(11,379	)
Operating net income (non-GAAP)	$	49,665		$	36,519		$	38,081		$	16,875		$	52,085
Weighted average common shares outstanding during the period:
Basic		196,700,222			163,145,255			162,863,540			162,571,066			162,370,469
Diluted		197,706,644			163,499,296			163,188,410			162,724,398			162,469,887
(Loss) earnings per share from continuing operations, basic:	$	(0.03	)	$	0.16		$	0.24		$	0.19		$	0.39
(Loss) earnings per share from continuing operations, diluted:	$	(0.03	)	$	0.16		$	0.24		$	0.19		$	0.39
Operating earnings per share, basic (non-GAAP)	$	0.25		$	0.22		$	0.23		$	0.10		$	0.32
Operating earnings per share, diluted (non-GAAP)	$	0.25		$	0.22		$	0.23		$	0.10		$	0.32
Return on average assets (3)		(0.10	)%		0.50	%		0.74	%		0.59	%		1.18	%
Add:
Provision for non-PCD acquired loans (3)		0.65	%		0.00	%		0.00	%		0.00	%		0.00	%
(Income) losses from investments held in rabbi trusts (3)		(0.06	)%		(0.03	)%		(0.08	)%		(0.09	)%		0.03	%
Losses on sales of securities available for sale, net (3)		0.00	%		0.14	%		0.00	%		0.00	%		0.00	%
Losses (gains) on sales of other assets (3)		0.05	%		0.00	%		0.00	%		0.00	%		0.00	%
Rabbi trust employee benefit expense (income) (3)		0.02	%		0.02	%		0.03	%		0.03	%		(0.01	)%
Merger and acquisition expenses (3)		0.44	%		0.07	%		0.03	%		0.03	%		0.07	%
Less: net tax benefit (expense) associated with non-GAAP adjustments (2) (3)		0.21	%		0.00	%		0.00	%		0.25	%		0.30	%
Operating return on average assets (non-GAAP) (3)		0.79	%		0.70	%		0.72	%		0.31	%		0.97	%
Return on average shareholders' equity (3)		(0.70	)%		3.62	%		5.23	%		4.66	%		9.91	%
Add:
Provision for non-PCD acquired loans (3)		4.61	%		0.00	%		0.00	%		0.00	%		0.00	%
(Income) losses from investments held in rabbi trusts (3)		(0.41	)%		(0.24	)%		(0.58	)%		(0.73	)%		0.24	%
Losses on sales of securities available for sale, net (3)		0.00	%		1.04	%		0.00	%		0.00	%		0.00	%
Losses (gains) on sales of other assets (3)		0.34	%		0.00	%		0.00	%		0.00	%		0.00	%
Rabbi trust employee benefit expense (income) (3)		0.15	%		0.13	%		0.24	%		0.26	%		(0.09	)%
Merger and acquisition expenses (3)		3.11	%		0.51	%		0.25	%		0.28	%		0.57	%
Less: net tax benefit (expense) associated with non-GAAP adjustments (2) (3)		1.50	%		0.03	%		(0.03	)%		1.96	%		2.49	%
Operating return on average shareholders' equity (non-GAAP) (3)		5.60	%		5.03	%		5.17	%		2.51	%		8.14	%
Tangible net income
Net (loss) income (GAAP)		(6,188	)		26,331			38,647			31,509			63,464
Add: Amortization of intangible assets		6,210			504			504			505			504
Less: Tax effect of amortization of intangible assets (4)		1,720			140			140			140			142
Tangible net (loss) income (non-GAAP) (5)		(1,698	)		26,695			39,011			31,874			63,826
Average tangible shareholders' equity:
Average total shareholders' equity (GAAP)	$	3,526,294		$	2,928,101		$	2,970,759		$	2,682,600		$	2,539,806
Less: Average goodwill and other intangibles		974,546			565,523			566,027			597,234			658,591
Average tangible shareholders' equity (non-GAAP)	$	2,551,748		$	2,362,578		$	2,404,732		$	2,085,366		$	1,881,215
Return on average tangible shareholders' equity (non-GAAP) (3) (5)		(0.26	)%		4.54	%		6.52	%		6.06	%		13.46	%
Add:
Provision for non-PCD acquired loans (3)		6.38	%		0.00	%		0.00	%		0.00	%		0.00	%
(Income) losses from investments held in rabbi trusts (3)		(0.56	)%		(0.30	)%		(0.72	)%		(0.95	)%		0.32	%
Losses on sales of securities available for sale, net (3)		0.00	%		1.29	%		0.00	%		0.00	%		0.00	%
Losses (gains) on sales of other assets (3)		0.46	%		0.00	%		0.00	%		0.00	%		0.00	%
Rabbi trust employee benefit expense (income) (3)		0.21	%		0.16	%		0.29	%		0.33	%		(0.12	)%
Merger and acquisition expenses (3)		4.30	%		0.63	%		0.30	%		0.35	%		0.77	%
Less: net tax benefit (expense) associated with non-GAAP adjustments (2) (3)		2.08	%		0.04	%		(0.03	)%		2.52	%		3.36	%
Operating return on average tangible shareholders' equity (non-GAAP) (3) (5)		8.45	%		6.28	%		6.42	%		3.27	%		11.07	%
(1) Average assets, average goodwill and other intangibles, and average tangible shareholders' equity components for the three months ended Sep 30, 2023 and Dec 31, 2023 presented in this section include discontinued operations.
(2) The net tax benefit (expense) associated with these items is generally determined by assessing whether each item is included or excluded from net taxable income and applying our combined statutory tax rate only to those items included in net taxable income. The net tax benefit for the three months ended December 31, 2023 was primarily due to the tax benefit from state tax strategies associated with the utilization of capital losses as a result of the sale of securities in the first quarter of 2023. Upon the sale of securities in the first quarter of 2023, we established a valuation allowance of $17.4 million, as it was determined at that time that it was not more-likely-than-not that the entirety of the deferred tax asset related to the loss on such securities would be realized. Included in that $17.4 million was $2.8 million in expected lost state tax benefits. Following the execution of the sale of our insurance agency business in October 2023 and the resulting capital gain, coupled with tax planning strategies, a state tax benefit of $13.6 million was realized on the security sale losses.
(3) Presented on an annualized basis.
(4) The tax effect of amortization of intangible assets is calculated using the Company's combined statutory tax rate of 27.7% for the three months ended Dec 31, 2023 and the following periods, and 28.23% for the three months ended Sep 30, 2023.
(5) The tangible net income (loss), return on average tangible shareholders' equity ratio and operating return on average tangible shareholders' equity ratio exclude the amortization of intangible assets, net of tax.

APPENDIX B: Reconciliation of Non-GAAP Operating Revenues and Expenses
For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."
	Three Months Ended
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
(Unaudited, dollars in thousands)
Net interest income (GAAP)	$	169,855		$	128,649		$	129,900		$	133,307		$	137,205
Add:
Tax-equivalent adjustment (non-GAAP) (1)		4,792			4,553			4,483			4,483			4,376
Fully-taxable equivalent net interest income (non-GAAP)	$	174,647		$	133,202		$	134,383		$	137,790		$	141,581
Noninterest income (GAAP)	$	33,528		$	25,348		$	27,692		$	26,739		$	19,157
Less:
Income (losses) from investments held in rabbi trusts		3,591			1,761			4,318			4,969			(1,523	)
Losses on sales of securities available for sale, net		—			(7,557	)		—			—			—
(Losses) gains on sales of other assets		(2,970	)		(2	)		—			—			2
Noninterest income on an operating basis (non-GAAP)	$	32,907		$	31,146		$	23,374		$	21,770		$	20,678
Noninterest expense (GAAP)	$	159,753		$	109,869		$	101,202		$	121,029		$	101,748
Less:
Rabbi trust employee benefit expense (income)		1,326			930			1,746			1,740			(586	)
Merger and acquisition expenses		27,577			3,684			1,816			1,865			3,630
Noninterest expense on an operating basis (non-GAAP)	$	130,850		$	105,255		$	97,640		$	117,424		$	98,704
Less: Amortization of intangible assets	$	6,210		$	504		$	504		$	505		$	504
Noninterest expense for calculating the operating efficiency ratio (non-GAAP) (2)	$	124,640		$	104,751		$	97,136		$	116,919		$	98,200
Total revenue (GAAP)	$	203,383		$	153,997		$	157,592		$	160,046		$	156,362
Total operating revenue (non-GAAP)	$	207,554		$	164,348		$	157,757		$	159,560		$	162,259
Efficiency ratio (GAAP)		78.5	%		71.3	%		64.2	%		75.6	%		65.1	%
Operating efficiency ratio (non-GAAP) (2)		60.1	%		63.7	%		61.6	%		73.3	%		60.5	%
(1) Interest income on tax-exempt loans and investment securities has been adjusted to a FTE basis using a marginal tax rate of 21.8%, 21.7%, 21.7%, 21.9%, and 21.7% for the three months ended September 30, 2024, June 30, 2024, March 31, 2024, December 31, 2023, and September 30, 2023, respectively.
(2) The operating efficiency ratio excludes, in addition to the adjustments made to operating net income, the amortization of intangible assets. This measure is used by the Company when analyzing corporate performance and the Company believes that investors may find it useful.

APPENDIX C: Reconciliation of Non-GAAP Capital Metrics
For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."
	As of
	Sep 30, 2024			Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
(Unaudited, dollars in thousands, except per-share data)
Tangible shareholders' equity:
Total shareholders' equity (GAAP)	$	3,671,138		$	2,967,473		$	2,952,831		$	2,974,855		$	2,446,553
Less: Goodwill and other intangibles (1)		1,057,509			565,196			565,701			566,205			657,824
Tangible shareholders' equity (non-GAAP)		2,613,629			2,402,277			2,387,130			2,408,650			1,788,729
Tangible assets:
Total assets (GAAP)		25,507,187			21,044,169			21,174,804			21,133,278			21,146,292
Less: Goodwill and other intangibles (1)		1,057,509			565,196			565,701			566,205			657,824
Tangible assets (non-GAAP)	$	24,449,678		$	20,478,973		$	20,609,103		$	20,567,073		$	20,488,468
Shareholders' equity to assets ratio (GAAP)		14.39	%		14.10	%		13.95	%		14.08	%		11.57	%
Tangible shareholders' equity to tangible assets ratio (non-GAAP)		10.69	%		11.73	%		11.58	%		11.71	%		8.73	%
Common shares outstanding		214,802,602			176,687,829			176,631,477			176,426,993			176,376,675
Book value per share (GAAP)	$	17.09		$	16.80		$	16.72		$	16.86		$	13.87
Tangible book value per share (non-GAAP)	$	12.17		$	13.60		$	13.51		$	13.65		$	10.14
(1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023.

APPENDIX D: Merger-related Charges
	As of and for the Three Months Ended
(Unaudited, dollars in thousands)	Sep 30, 2024				Jun 30, 2024			Mar 31, 2024			Dec 31, 2023			Sep 30, 2023
Noninterest income components:
Other (1)	$	(2,969	)		$	—		$	—		$	—		$	—
Total noninterest income	$	(2,969	)		$	—		$	—		$	—		$	—
Noninterest expense components:
Salaries and employee benefits	$	13,147			$	383		$	3		$	5		$	—
Office occupancy and equipment		2,630				11			6			2			—
Data processing		1,384				2,249			865			1,357			—
Professional services		5,490				944			787			450			3,630
Other		4,926				97			155			51			—
Total noninterest expense	$	27,577			$	3,684		$	1,816		$	1,865		$	3,630
Total merger-related charges	$	30,546			$	3,684		$	1,816		$	1,865		$	3,630
(1) Disposal of acquired fixed assets.

APPENDIX E: Organic Loan & Deposit Growth
	As of						Organic Growth From:
	Sep 30, 2024		Jun 30, 2024		Cambridge Trust Acquired Balance (1)		Jun 30, 2024
(Unaudited, dollars in thousands)							△ $			△ %
Loans:
Commercial and industrial	3,340,029		3,084,186		339,581		(83,738	)		(2.4	)%
Commercial real estate	7,174,861		5,440,411		1,692,705		41,745			0.6	%
Commercial construction	513,519		447,157		141,420		(75,058	)		(12.8	)%
Business banking	1,321,179		1,108,163		120,454		92,562			7.5	%
Total commercial loans	12,349,588		10,079,917		2,294,160		(24,489	)		(0.2	)%
Residential real estate	4,080,736		2,562,808		1,528,534		(10,606	)		(0.3	)%
Consumer home equity	1,361,971		1,254,105		87,785		20,081			1.5	%
Other consumer	271,831		248,690		24,196		(1,055	)		(0.4	)%
Total loans	18,064,126		14,145,520		3,934,675		(16,069	)		(0.1	)%
Deposits:
Demand	5,856,171		4,808,938		979,895		67,338			1.2	%
Interest checking accounts	4,562,226		3,532,811		1,149,097		(119,682	)		(2.6	)%
Savings accounts	1,681,093		1,238,009		471,340		(28,256	)		(1.7	)%
Money market investment	5,572,277		5,014,900		854,614		(297,237	)		(5.1	)%
Certificates of deposit	3,545,087		2,943,151		418,771		183,165			5.4	%
Total deposits	21,216,854		17,537,809		3,873,717		(194,672	)		(0.9	)%
(1) For loans, represents the unpaid principal balance of Cambridge acquired loans at time of merger. For deposits, represents the book value of Cambridge acquired deposits at time of merger, except for time deposits which are shown at fair value.

APPENDIX F: Tangible Shareholders’ Equity Roll Forward Analysis
For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."
	As of							Change from
	Sep 30, 2024			Jun 30, 2024				Jun 30, 2024
(Unaudited, dollars in thousands, except per-share data)
Common stock	$	2,150		$	1,770			$	380
Additional paid in capital		2,246,134			1,673,722				572,412
Unallocated ESOP common stock		(129,077	)		(130,295	)			1,218
Retained earnings		2,048,042			2,076,566				(28,524	)
AOCI, net of tax - available for sale securities		(490,698	)		(612,196	)			121,498
AOCI, net of tax - pension		5,914			6,430				(516	)
AOCI, net of tax - cash flow hedge		(11,327	)		(48,524	)			37,197
Total shareholders' equity:	$	3,671,138		$	2,967,473			$	703,665
Less: Goodwill and other intangibles		1,057,509			565,196				492,313
Tangible shareholders' equity (non-GAAP)	$	2,613,629		$	2,402,277			$	211,352
Common shares outstanding		214,802,602			176,687,829				38,114,773
Per share:
Common stock	$	0.01		$	0.01			$	—
Additional paid in capital		10.46			9.47				0.98
Unallocated ESOP common stock		(0.60	)		(0.74	)			0.14
Retained earnings		9.53			11.75				(2.22	)
AOCI, net of tax - available for sale securities		(2.28	)		(3.46	)			1.18
AOCI, net of tax - pension		0.03			0.04				(0.01	)
AOCI, net of tax - cash flow hedge		(0.05	)		(0.27	)			0.22
Total shareholders' equity:	$	17.09		$	16.80			$	0.30
Less: Goodwill and other intangibles		4.92			3.20				1.72
Tangible shareholders' equity (non-GAAP)	$	12.17		$	13.60			$	(1.43	)

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20241024681054/en/

Investor Contact

Jillian Belliveau

Eastern Bankshares, Inc.

InvestorRelations@easternbank.com

781-598-7920

Media Contact

Andrea Goodman

Eastern Bank

a.goodman@easternbank.com

781-598-7847

Source: Eastern Bank

FAQ

What was Eastern Bankshares (EBC) net loss in Q3 2024?

Eastern Bankshares reported a net loss of $6.2 million in Q3 2024, primarily due to a $40.9 million initial provision on non-PCD loans and $30.5 million in merger-related charges.

How much did EBC's trust and investment advisory fees increase in Q3 2024?

Trust and investment advisory fees increased by $8.2 million, or 122%, to $14.9 million in Q3 2024, primarily due to increased assets under management from the Cambridge merger.

What is the new quarterly dividend announced by Eastern Bankshares?

Eastern Bankshares announced a 9% increase in quarterly dividend to $0.12 per share, payable on December 16, 2024.

How much did EBC's non-performing loans increase in Q3 2024?

Non-performing loans increased by $84.7 million to $124.5 million, representing 0.70% of total loans, primarily due to purchased credit deteriorated loans acquired from Cambridge.