Company Declares Quarterly Cash Dividend
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 2022 fourth quarter financial results and the
declaration of a quarterly cash dividend. Net income for the fourth
quarter of 2022 was $42.3 million, or $0.26 per diluted share,
compared to net income of $54.8 million, or $0.33 per diluted
share, reported for the third quarter of 2022. Operating net
income* for the fourth quarter of 2022 was $49.9 million, or $0.31
per diluted share, compared to $55.7 million, or $0.34 per diluted
share, reported for the prior quarter.
“I’d like to thank my 2,100 colleagues at Eastern for all of
their good work in making 2022 such a successful year for the
Company” said Bob Rivers, Chief Executive Officer and Chair of the
Board of Eastern Bankshares, Inc. and Eastern Bank. “Together, we
posted record net income for 2022 of $199.8 million, 29% higher
than 2021. As always, this bottom line result is the product of a
number of significant achievements, including the completion of the
integration of Century Bank, record commercial loan and home equity
originations, outstanding asset quality, the acquisition of two
insurance agencies, the continued upgrade of our technology
platforms, as well as many other notable accomplishments. All of
this, along with the strength of the underlying franchise, is a
testament to their hard work and tremendous commitment."
HIGHLIGHTS FOR THE FOURTH QUARTER OF 2022
- Net income of $42.3 million, or $0.26 per diluted share, and
operating net income* of $49.9 million, or $0.31 per diluted share,
for the fourth quarter of 2022.
- Net interest income of $150.0 million for the fourth quarter of
2022 was 1% lower than the prior quarter as the increase in
interest income was more than offset by the increase in interest
expense.
- The net interest margin on a fully tax equivalent (“FTE”)
basis* of 2.81% for the fourth quarter was 6 basis points lower
than the prior quarter.
- Core loan growth, excluding residential loans purchased from
Embrace Home Loans, was 11.8% on an annualized basis. Commercial
loan growth was 13.2% on an annualized basis.
- Asset quality remains strong, with annualized net charge-offs
of just 0.01% of average total loans and non-performing loans of
$38.6 million, or just 0.28% of total loans.
Please refer to Appendices A and B to this press release for
reconciliations of operating net income* and fully-taxable
equivalent net interest income*, respectively.
BALANCE SHEET
Total assets were $22.6 billion at December 31, 2022,
representing an increase of $603.9 million, or 3%, from September
30, 2022.
- Total securities decreased $159.2 million, or 2%, from the
prior quarter, to $7.2 billion, primarily due to principal runoff
and security sales, partially offset by a reduction in the
unrealized losses on the portfolio.
- Total loans were $13.6 billion, representing an increase of
$671.6 million, or 5%, from the prior quarter. The increase was
driven by strong loan growth in all major categories. Commercial
loans grew $313.0 million, residential loans grew $342.0 million,
and consumer loans grew $16.6 million, reflecting growth of 13%,
64%, and 5%, respectively, on an annualized basis. Residential
loans at December 31, 2022 and September 30, 2022 included
purchased loans from Embrace Home Loans totaling $366.7 million and
$77.7 million excluding purchase premiums, respectively.
- Deposits totaled $19.0 billion, representing an increase of
$241.0 million, or 1%, from the prior quarter. Deposit levels were
supported by brokered certificates of deposit which totaled $928.6
million at year end. On a quarterly average basis, deposits
decreased $418.3 million from the prior quarter.
- Borrowed funds increased $318.1 million from the prior quarter
to $740.8 million to provide funding for strong loan growth in the
fourth quarter.
- Shareholders’ equity was $2.5 billion, representing an increase
of $55.6 million from the prior quarter driven primarily by
increases in accumulated other comprehensive income and retained
earnings, partially offset by share repurchases. Please refer to
Appendix D to this press release for a roll forward of tangible
shareholders’ equity*.
- At December 31, 2022, book value per share was $14.03 and
tangible book value per share* was $10.28.
Please refer to Appendix C to this press release for a
reconciliation of book value per share and tangible book value per
share*.
NET INTEREST INCOME
Net interest income was $150.0 million for the fourth quarter of
2022, compared to $152.2 million in the prior quarter, representing
a decrease of $2.2 million.
- The decrease in net interest income on a consecutive quarter
basis was primarily due to a decrease in the net interest margin,
as increases in earning asset yields were more than offset by
increased funding costs. This was partially offset by an increase
in average interest-earning asset balances of $170.3 million from
the prior quarter, attributable primarily to loan growth.
- The net interest margin on a FTE basis* was 2.81% for the
fourth quarter, representing a 6 basis point decrease from the
prior quarter, as funding costs increased faster than asset
yields.
- Total interest-earning asset yields increased 29 basis points
from the prior quarter to 3.27%, due primarily to increased loan
yields as a result of higher short-term interest rates during the
quarter.
- Total interest-bearing funding costs increased 59 basis points
from the prior quarter to 77 basis points, due to core deposit
pricing increases and increases in brokered deposits and borrowings
during the quarter.
Please refer to Appendix B to this press release for a
reconciliation of operating revenues and expenses* and of
fully-taxable equivalent net interest income*.
NONINTEREST INCOME
Noninterest income was $44.5 million for the fourth quarter of
2022, compared to $43.4 million for the prior quarter, representing
an increase of $1.2 million. Noninterest income on an operating
basis* was $42.0 million for the fourth quarter of 2022, compared
to $45.3 million for the prior quarter, a decrease of $3.3
million.
- Insurance commissions decreased $1.7 million to $22.0 million
in the fourth quarter, compared to $23.8 million in the prior
quarter. Compared to the comparable prior year quarter, insurance
commissions increased $1.1 million, or 5%.
- Service charges on deposit accounts increased $0.1 million on a
consecutive quarter basis to $6.8 million.
- Trust and investment advisory fees decreased $0.2 million on a
consecutive quarter basis to $5.6 million.
- Debit card processing fees were unchanged from the prior
quarter at $3.2 million.
- Loan-level interest rate swap income decreased $1.6 million to
a loss of $0.1 million in the fourth quarter, compared to income of
$1.6 million in the prior quarter. The decrease was driven
primarily by a decrease in the fair value of such interest rate
swap transactions.
- Market performance drove gains on investments held in rabbi
trust accounts totaling $3.2 million in the fourth quarter compared
to losses of $2.2 million in the prior quarter.
- Realized losses on sales of available for sale securities were
$0.7 million in the fourth quarter compared to $0.2 million in the
prior quarter.
- Other noninterest income decreased $0.3 million in the fourth
quarter to $4.3 million.
Please refer to Appendix B to this press release for a
reconciliation of operating revenues and expenses*.
NONINTEREST EXPENSE
Noninterest expense was $132.8 million for the fourth quarter of
2022, compared to $116.8 million in the prior quarter, representing
an increase of $15.9 million. Noninterest expense on an operating
basis* for the fourth quarter of 2022 was $119.6 million, compared
to $117.4 million in the prior quarter, an increase of $2.2
million.
- Salaries and employee benefits expense was $77.6 million in the
fourth quarter, representing a decrease of $0.5 million from the
prior quarter.
- Office occupancy and equipment expense was $9.6 million in the
fourth quarter, a decrease of $0.1 million from the prior
quarter.
- Data processing expenses were $14.3 million in the fourth
quarter, an increase of $1.0 million from the prior quarter, due
primarily to higher software services and support expense.
- Professional services expense was $4.6 million in the fourth
quarter, a decrease of $0.2 million from the prior quarter.
- Marketing expense was $3.1 million in the fourth quarter, an
increase of $0.9 million from the prior quarter, due primarily to
higher advertising expense during the quarter.
- Loan expenses were $0.6 million in the fourth quarter, a
decrease of $1.6 million from the prior quarter, due in part to a
decrease in legal and appraisal expense.
- Other noninterest expense was $20.4 million in the fourth
quarter, an increase of $16.4 million from the prior quarter, due
primarily to a previously disclosed Defined Benefit Plan settlement
accounting charge of $12.0 million, as well as an increase in the
provision for credit losses on off-balance sheet credit
exposure.
Please refer to Appendix B to this press release for a
reconciliation of operating revenues and expenses*.
ASSET QUALITY
The allowance for loan losses was $142.2 million at December 31,
2022, or 1.05% of total loans, compared to $131.7 million or 1.02%
of total loans at September 30, 2022. The Company recorded a
provision for loan losses totaling $10.9 million in the fourth
quarter of 2022, of which $7.2 million was due to loan growth.
Non-performing loans totaled $38.6 million at December 31, 2022
compared to $34.0 million at the end of the prior quarter. During
the fourth quarter of 2022, the Company recorded total net
charge-offs of $0.3 million, or 0.01% of average total loans on an
annualized basis, compared to $0.3 million or 0.01% of average
total loans in the prior quarter, respectively.
DIVIDENDS AND SHARE REPURCHASES
The Company’s Board of Directors has declared a quarterly cash
dividend of $0.10 per common share. The dividend will be payable on
March 15, 2023 to shareholders of record as of the close of
business on March 3, 2023.
The Company repurchased 1,547,934 shares of its common stock
during the fourth quarter of 2022 at a weighted average price of
$19.91 excluding commissions, for an aggregate purchase price of
$30.8 million.
As announced in September of 2022, the Company received
regulatory non-objection for its second share repurchase program of
up to 8,900,000 shares, representing approximately 5% of its shares
of common stock then outstanding. The repurchase program, which is
limited to $200 million through August 31, 2023, may be modified or
terminated by the Board of Directors of the Company at any time. At
December 31, 2022, there were 6,989,750 shares available for
repurchase and $161.8 million in total market value remaining under
the repurchase authorization.
CONFERENCE CALL AND PRESENTATION INFORMATION
A conference call and webcast covering Eastern’s fourth quarter
2022 earnings will be held on Friday, January 27, 2023 at 9:00 a.m.
Eastern Time. To join by telephone, participants can call the
toll-free dial-in number (888) 396-8049 from within the U.S. and
reference conference ID 15857557. 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 made available on demand on this site.
ABOUT EASTERN BANKSHARES, INC.
Eastern Bankshares, Inc. is the stock holding company for
Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more
than 120 locations serving communities in eastern Massachusetts,
southern and coastal New Hampshire, and Rhode Island. As of
December 31, 2022, Eastern Bank had approximately $23 billion in
total assets. Eastern provides banking, investment and insurance
products and services for consumers and businesses of all sizes,
including through its Eastern Wealth Management division and its
Eastern Insurance Group LLC subsidiary. Eastern takes pride in its
outspoken advocacy and community support that includes $240 million
in charitable giving since 1994. An inclusive company, Eastern
employs approximately 2,100 deeply committed professionals who
value relationships with their customers, colleagues, and
communities. For investor information, visit
investor.easternbank.com.
NON-GAAP FINANCIAL MEASURES
*Denotes a non-GAAP financial measure used in this press
release.
A non-GAAP financial measure is defined as a numerical measure
of the Company’s historical or future financial performance,
financial position or cash flows that excludes (or includes)
amounts, or is subject to adjustments that have the effect of
excluding (or including) amounts that are included in the most
directly comparable measure calculated and presented in accordance
with accounting principles generally accepted in the United States
(“GAAP”) in the Company’s statement of income, balance sheet or
statement of cash flows (or equivalent statements).
The Company presents non-GAAP financial measures, which
management uses to evaluate the Company’s performance, and which
exclude the effects of certain transactions that management
believes are unrelated to its core business and are therefore not
necessarily indicative of its current performance or financial
position. Management believes excluding these items facilitates
greater visibility for investors into the Company’s core business
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, operating
return on average tangible shareholders’ equity (discussed further
below), 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) other real estate owned (“OREO”) gains, (vii) merger
and acquisition expenses, and (viii) the non-cash pension
settlement charge recognized related to the Defined Benefit Plan.
The Company does not provide an outlook for its total noninterest
income and total noninterest expense because each contains income
or expense components, as applicable, such as income associated
with rabbi trust accounts and rabbi trust employee benefit expense,
which are market-driven, and over which the Company cannot exercise
control. Accordingly, reconciliations of the Company’s outlook for
its noninterest income on an operating basis and its noninterest
expense on an operating basis to an outlook for total noninterest
income and total noninterest expense, respectively, cannot be made
available without unreasonable effort.
Management also presents tangible assets, tangible shareholders’
equity, average tangible shareholders’ equity, tangible book value
per share, the ratio of tangible shareholders’ equity to tangible
assets, return on average tangible shareholders’ equity, and
operating return on average shareholders’ equity (discussed further
above), each of which excludes the impact of goodwill and other
intangible assets, as management believes these financial measures
provide investors with the ability to further assess the Company’s
performance, identify trends in its core business and provide a
comparison of its capital adequacy to other companies. The Company
included the tangible ratios because management believes that
investors may find it useful to have access to the same analytical
tools used by management to assess performance and identify
trends.
These non-GAAP financial measures presented in this press
release should not be considered an alternative or substitute for
financial results or measures determined in accordance with GAAP or
as an indication of the Company’s cash flows from operating
activities, a measure of its liquidity position or an indication of
funds available for its cash needs. An item which management
considers to be non-core and excludes when computing these non-GAAP
measures can be of substantial importance to the Company’s results
for any particular period. In addition, management’s methodology
for calculating non-GAAP financial measures may differ from the
methodologies employed by other banking companies to calculate the
same or similar performance measures, and accordingly, the
Company’s reported non-GAAP financial measures may not be
comparable to the same or similar performance measures reported by
other banking companies. Please refer to Appendices A-D 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 interest rates and resulting changes in competitor or customer
behavior and mix or costs of sources of funding; risks that revenue
or expense synergies or the other expected benefits of the
Company’s merger with Century Bank in November 2021 may not fully
materialize for the Company in the timeframe expected or at all, or
may be more costly to achieve; adverse national or regional
economic conditions or conditions within the securities markets;
legislative and regulatory changes and related compliance costs
that could adversely affect the business in which the Company and
its subsidiary Eastern Bank are engaged, including the effect of,
and changes in, monetary and fiscal policies and laws, such as the
interest rate policies of the Board of Governors of the Federal
Reserve System; market and monetary fluctuations, including
inflationary or recessionary pressures, interest rate sensitivity,
liquidity constraints, increased borrowing and funding costs, and
fluctuations due to actual or anticipated changes to federal tax
laws; the Company’s ability to successfully implement its risk
mitigation strategies; and asset and credit quality deterioration,
including adverse developments in local or regional real estate
markets that decrease collateral values associated with existing
loans; and the failure of the Company to execute all of its planned
share repurchases. For further discussion of such factors, please
see the Company’s most recent Annual Report on Form 10-K and
subsequent filings with the U.S. Securities and Exchange Commission
(the “SEC”), which are available on the SEC’s website at
www.sec.gov.
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 data)
Dec 31, 2022
Sep 30, 2022
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
Earnings data
Net interest income
$
149,994
$
152,179
$
137,757
$
128,124
$
122,437
Noninterest income
44,516
43,353
41,877
46,415
49,001
Total revenue
194,510
195,532
179,634
174,539
171,438
Noninterest expense
132,757
116,840
111,139
108,866
143,602
Pre-tax, pre-provision income
61,753
78,692
68,495
65,673
27,836
Provision for (release of) allowance for
loan losses
10,880
6,480
1,050
(485
)
(4,318
)
Pre-tax income
50,873
72,212
67,445
66,158
32,154
Net income
42,294
54,777
51,172
51,516
35,087
Operating net income (non-GAAP)
49,912
55,742
52,518
55,107
44,860
Per-share data
Earnings per share, basic
$
0.26
$
0.33
$
0.31
$
0.30
$
0.20
Earnings per share, diluted
$
0.26
$
0.33
$
0.31
$
0.30
$
0.20
Operating earnings per share, basic
(non-GAAP)
$
0.31
$
0.34
$
0.32
$
0.32
$
0.26
Operating earnings per share, diluted
(non-GAAP)
$
0.31
$
0.34
$
0.32
$
0.32
$
0.26
Book value per share
$
14.03
$
13.59
$
15.17
$
16.40
$
18.28
Tangible book value per share
(non-GAAP)
$
10.28
$
9.87
$
11.52
$
12.83
$
14.80
Profitability
Return on average assets (1)
0.75
%
0.97
%
0.92
%
0.90
%
0.67
%
Operating return on average assets
(non-GAAP) (1)
0.88
%
0.97
%
0.94
%
0.96
%
0.86
%
Return on average shareholders' equity
(1)
6.93
%
7.83
%
7.16
%
6.38
%
4.07
%
Operating return on average shareholders'
equity (1)
8.17
%
7.98
%
7.34
%
6.82
%
5.19
%
Return on average tangible shareholders'
equity (non-GAAP) (1)
9.54
%
10.25
%
9.28
%
7.96
%
4.80
%
Operating return on average tangible
shareholders' equity (non-GAAP) (1)
11.26
%
10.44
%
9.53
%
8.53
%
6.14
%
Net interest margin (FTE) (1)
2.81
%
2.87
%
2.63
%
2.42
%
2.54
%
Cost of deposits (1)
0.37
%
0.10
%
0.06
%
0.07
%
0.06
%
Fee income ratio
22.89
%
22.17
%
23.31
%
26.59
%
28.58
%
Efficiency ratio
68.25
%
59.75
%
61.87
%
62.37
%
83.76
%
Operating efficiency ratio (non-GAAP)
61.11
%
58.38
%
60.61
%
60.39
%
65.21
%
Balance Sheet (end of period)
Total assets
$
22,646,858
$
22,042,933
$
22,350,848
$
22,836,072
$
23,512,128
Total loans
13,575,531
12,903,954
12,398,694
12,182,203
12,281,510
Total deposits
18,974,359
18,733,381
19,163,801
19,392,816
19,628,311
Total loans / total deposits
72
%
69
%
65
%
63
%
63
%
Asset quality
Allowance for loan losses ("ALLL") (2)
$
142,211
$
131,663
$
125,531
$
124,166
$
97,787
ALLL / total nonperforming loans
("NPLs")
368.38
%
387.77
%
209.64
%
367.13
%
279.53
%
Total NPLs / total loans
0.28
%
0.26
%
0.48
%
0.28
%
0.29
%
Net charge-offs (recoveries) ("NCOs") /
average total loans (1)
0.01
%
0.01
%
(0.01
)%
0.01
%
0.05
%
Capital adequacy
Shareholders' equity / assets
10.91
%
10.96
%
12.16
%
13.17
%
14.49
%
Tangible shareholders' equity / tangible
assets (non-GAAP)
8.24
%
8.20
%
9.52
%
10.61
%
12.06
%
(1) Presented on an annualized basis.
(2) The Company adopted ASU 2016-13 on
January 1, 2022 using the modified retrospective approach.
Accordingly, at March 31, 2022 and thereafter, the allowance for
loan losses was determined in accordance with ASC 326, “Financial
Instruments-Credit Losses” and ASC 310, “Receivables,” as amended.
At December 31, 2021 and prior, the allowance for loan losses was
determined in accordance with ASC 450, “Contingencies” and ASC 310,
“Receivables.”
EASTERN BANKSHARES, INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
As of
Dec 31, 2022 change
from
(Unaudited, dollars in thousands)
Dec 31, 2022
Sep 30, 2022
Dec 31, 2021
Sep 30, 2022
Dec 31, 2021
ASSETS
△ $
△ %
△ $
△ %
Cash and due from banks
$
106,040
$
102,776
$
144,634
$
3,264
3
%
$
(38,594
)
(27
)%
Short-term investments
63,465
55,661
1,087,158
7,804
14
%
(1,023,693
)
(94
)%
Cash and cash equivalents
169,505
158,437
1,231,792
11,068
7
%
(1,062,287
)
(86
)%
Available for sale ("AFS") securities
(1)
6,690,778
6,844,615
8,511,224
(153,837
)
(2
)%
(1,820,446
)
(21
)%
Held to maturity ("HTM") securities
(1)
476,647
481,963
—
(5,316
)
(1
)%
476,647
—
%
Total securities
7,167,425
7,326,578
8,511,224
(159,153
)
(2
)%
(1,343,799
)
(16
)%
Loans held for sale
4,543
951
1,206
3,592
378
%
3,337
277
%
Loans:
Commercial and industrial
3,150,946
3,023,729
2,960,527
127,217
4
%
190,419
6
%
Commercial real estate
5,155,323
4,985,654
4,522,513
169,669
3
%
632,810
14
%
Commercial construction
336,276
314,193
222,328
22,083
7
%
113,948
51
%
Business banking
1,090,492
1,096,436
1,334,694
(5,944
)
(1
)%
(244,202
)
(18
)%
Total commercial loans
9,733,037
9,420,012
9,040,062
313,025
3
%
692,975
8
%
Residential real estate
2,460,849
2,118,852
1,926,810
341,997
16
%
534,039
28
%
Consumer home equity
1,187,547
1,168,476
1,100,153
19,071
2
%
87,394
8
%
Other consumer
194,098
196,614
214,485
(2,516
)
(1
)%
(20,387
)
(10
)%
Total loans
13,575,531
12,903,954
12,281,510
671,577
5
%
1,294,021
11
%
Allowance for loan losses
(142,211
)
(131,663
)
(97,787
)
(10,548
)
8
%
(44,424
)
45
%
Unamortized prem./disc. and def. fees
(13,003
)
(19,349
)
(26,442
)
6,346
(33
)%
13,439
(51
)%
Net loans
13,420,317
12,752,942
12,157,281
667,375
5
%
1,263,036
10
%
Federal Home Loan Bank stock, at cost
41,363
18,714
10,904
22,649
121
%
30,459
279
%
Premises and equipment
62,656
63,261
80,984
(605
)
(1
)%
(18,328
)
(23
)%
Bank-owned life insurance
160,790
159,838
157,091
952
1
%
3,699
2
%
Goodwill and other intangibles, net
661,126
662,222
649,703
(1,096
)
—
%
11,423
2
%
Deferred income taxes, net
331,648
342,550
76,535
(10,902
)
(3
)%
255,113
333
%
Prepaid expenses
165,900
180,742
179,330
(14,842
)
(8
)%
(13,430
)
(7
)%
Other assets
461,585
376,698
456,078
84,887
23
%
5,507
1
%
Total assets
$
22,646,858
$
22,042,933
$
23,512,128
$
603,925
3
%
$
(865,270
)
(4
)%
LIABILITIES AND SHAREHOLDERS'
EQUITY
Deposits:
Demand
$
6,240,637
$
6,582,122
$
7,020,864
$
(341,485
)
(5
)%
$
(780,227
)
(11
)%
Interest checking accounts
4,568,122
5,047,018
4,478,566
(478,896
)
(9
)%
89,556
2
%
Savings accounts
1,831,123
1,990,188
2,077,495
(159,065
)
(8
)%
(246,372
)
(12
)%
Money market investment
4,710,095
4,757,477
5,525,005
(47,382
)
(1
)%
(814,910
)
(15
)%
Certificates of deposit
1,624,382
356,576
526,381
1,267,806
356
%
1,098,001
209
%
Total deposits
18,974,359
18,733,381
19,628,311
240,978
1
%
(653,952
)
(3
)%
Borrowed funds:
Federal Home Loan Bank advances
704,084
384,215
14,020
319,869
83
%
690,064
4922
%
Escrow deposits of borrowers
22,314
21,853
20,258
461
2
%
2,056
10
%
Interest rate swap collateral funds
14,430
16,650
—
(2,220
)
(13
)%
14,430
—
%
Total borrowed funds
740,828
422,718
34,278
318,110
75
%
706,550
2061
%
Other liabilities
459,881
470,671
443,187
(10,790
)
(2
)%
16,694
4
%
Total liabilities
20,175,068
19,626,770
20,105,776
548,298
3
%
69,292
—
%
Shareholders' equity:
Common shares
1,762
1,778
1,863
(16
)
(1
)%
(101
)
(5
)%
Additional paid-in capital
1,649,141
1,676,396
1,835,241
(27,255
)
(2
)%
(186,100
)
(10
)%
Unallocated common shares held by the
employee stock ownership plan ("ESOP")
(137,696
)
(138,950
)
(142,709
)
1,254
(1
)%
5,013
(4
)%
Retained earnings
1,881,775
1,855,757
1,768,653
26,018
1
%
113,122
6
%
Accumulated other comprehensive income
("AOCI"), net of tax
(923,192
)
(978,818
)
(56,696
)
55,626
(6
)%
(866,496
)
1528
%
Total shareholders' equity
2,471,790
2,416,163
3,406,352
55,627
2
%
(934,562
)
(27
)%
Total liabilities and shareholders'
equity
$
22,646,858
$
22,042,933
$
23,512,128
$
603,925
3
%
$
(865,270
)
(4
)%
(1) AFS and HTM securities represented at
fair value and amortized cost, respectively.
EASTERN BANKSHARES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
Three months ended
Three months ended Dec 31,
2022 change from three months ended
(Unaudited, dollars in thousands, except
per-share data)
Dec 31, 2022
Sep 30, 2022
Dec 31, 2021
Sep 30, 2022
Dec 31, 2021
Interest and dividend income:
△ $
△ %
△ $
△ %
Interest and fees on loans
$
142,446
$
124,992
$
101,275
$
17,454
14
%
$
41,171
41
%
Taxable interest and dividends on
securities
30,413
29,280
21,335
1,133
4
%
9,078
43
%
Non-taxable interest and dividends on
securities
1,594
1,917
1,815
(323
)
(17
)%
(221
)
(12
)%
Interest on federal funds sold and other
short-term investments
545
1,638
452
(1,093
)
(67
)%
93
21
%
Total interest and dividend income
174,998
157,827
124,877
17,171
11
%
50,121
40
%
Interest expense:
Interest on deposits
17,457
4,781
2,398
12,676
265
%
15,059
628
%
Interest on borrowings
7,547
867
42
6,680
770
%
7,505
17869
%
Total interest expense
25,004
5,648
2,440
19,356
343
%
22,564
925
%
Net interest income
149,994
152,179
122,437
(2,185
)
(1
)%
27,557
23
%
Provision for (release of) allowance for
loan losses
10,880
6,480
(4,318
)
4,400
68
%
15,198
(352
)%
Net interest income after provision for
(release of) allowance for loan losses
139,114
145,699
126,755
(6,585
)
(5
)%
12,359
10
%
Noninterest income:
Insurance commissions
22,049
23,788
20,937
(1,739
)
(7
)%
1,112
5
%
Service charges on deposit accounts
6,834
6,708
7,261
126
2
%
(427
)
(6
)%
Trust and investment advisory fees
5,626
5,832
6,541
(206
)
(4
)%
(915
)
(14
)%
Debit card processing fees
3,227
3,249
3,169
(22
)
(1
)%
58
2
%
Interest rate swap income
(78
)
1,562
512
(1,640
)
(105
)%
(590
)
(115
)%
Gains (losses) from investments held in
rabbi trusts
3,235
(2,248
)
4,444
5,483
(244
)%
(1,209
)
(27
)%
Gains on sales of mortgage loans held for
sale, net
8
22
561
(14
)
(64
)%
(553
)
(99
)%
Losses on sales of securities available
for sale, net
(683
)
(198
)
—
(485
)
245
%
(683
)
—
%
Other
4,298
4,638
5,576
(340
)
(7
)%
(1,278
)
(23
)%
Total noninterest income
44,516
43,353
49,001
1,163
3
%
(4,485
)
(9
)%
Noninterest expense:
Salaries and employee benefits
77,604
78,060
96,362
(456
)
(1
)%
(18,758
)
(19
)%
Office occupancy and equipment
9,559
9,703
16,194
(144
)
(1
)%
(6,635
)
(41
)%
Data processing
14,314
13,294
12,947
1,020
8
%
1,367
11
%
Professional services
4,566
4,767
9,188
(201
)
(4
)%
(4,622
)
(50
)%
Marketing
3,096
2,219
1,955
877
40
%
1,141
58
%
Loan expenses
627
2,211
1,907
(1,584
)
(72
)%
(1,280
)
(67
)%
Federal Deposit Insurance Corporation
("FDIC") insurance
1,540
1,578
1,237
(38
)
(2
)%
303
24
%
Amortization of intangible assets
1,097
1,033
726
64
6
%
371
51
%
Other
20,354
3,975
3,086
16,379
412
%
17,268
560
%
Total noninterest expense
132,757
116,840
143,602
15,917
14
%
(10,845
)
(8
)%
Income before income tax expense
(benefit)
50,873
72,212
32,154
(21,339
)
(30
)%
18,719
58
%
Income tax expense (benefit)
8,579
17,435
(2,933
)
(8,856
)
(51
)%
11,512
(392
)%
Net income
$
42,294
$
54,777
$
35,087
$
(12,483
)
(23
)%
$
7,207
21
%
Share data:
Earnings per share, basic
$
0.26
$
0.33
$
0.20
Earnings per share, diluted
$
0.26
$
0.33
$
0.20
EASTERN BANKSHARES, INC. AND
SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
INCOME
Twelve months ended
(Unaudited, dollars in thousands, except
per-share data)
Dec 31, 2022
Dec 31, 2021
Change
Interest and dividend income:
△ $
△ %
Interest and fees on loans
$
476,041
$
367,585
$
108,456
30
%
Taxable interest and dividends on
securities
118,690
58,312
60,378
104
%
Non-taxable interest and dividends on
securities
7,179
7,376
(197
)
(3
)%
Interest on federal funds sold and other
short-term investments
3,271
1,886
1,385
73
%
Total interest and dividend income
605,181
435,159
170,022
39
%
Interest expense:
Interest on deposits
28,621
5,167
23,454
454
%
Interest on borrowings
8,506
165
8,341
5055
%
Total interest expense
37,127
5,332
31,795
596
%
Net interest income
568,054
429,827
138,227
32
%
Provision for (release of) allowance for
loan losses
17,925
(9,686
)
27,611
(285
)%
Net interest income after provision for
(release of) allowance for loan losses
550,129
439,513
110,616
25
%
Noninterest income:
Insurance commissions
99,232
94,704
4,528
5
%
Service charges on deposit accounts
30,392
24,271
6,121
25
%
Trust and investment advisory fees
23,593
24,588
(995
)
(4
)%
Debit card processing fees
12,644
12,118
526
4
%
Interest rate swap income
6,009
5,634
375
7
%
(Losses) income from investments held in
rabbi trusts
(10,762
)
10,217
(20,979
)
(205
)%
Gains on sales of mortgage loans held for
sale, net
248
3,605
(3,357
)
(93
)%
(Losses) gains on sales of securities
available for sale, net
(3,157
)
1,166
(4,323
)
(371
)%
Other
17,962
16,852
1,110
7
%
Total noninterest income
176,161
193,155
(16,994
)
(9
)%
Noninterest expense:
Salaries and employee benefits
298,186
295,916
2,270
1
%
Office occupancy and equipment
40,764
40,465
299
1
%
Data processing
57,273
50,839
6,434
13
%
Professional services
16,814
21,879
(5,065
)
(23
)%
Marketing
9,540
8,741
799
9
%
Loan expenses
6,384
9,114
(2,730
)
(30
)%
Federal Deposit Insurance Corporation
("FDIC") insurance
6,250
4,226
2,024
48
%
Amortization of intangible assets
3,864
2,512
1,352
54
%
Other
30,527
10,264
20,263
197
%
Total noninterest expense
469,602
443,956
25,646
6
%
Income before income tax expense
256,688
188,712
67,976
36
%
Income tax expense
56,929
34,047
22,882
67
%
Net income
$
199,759
$
154,665
$
45,094
29
%
Share data:
Weighted average common shares
outstanding, basic (1)
165,510,357
172,192,336
(6,681,979
)
(4
)%
Weighted average common shares
outstanding, diluted (1)
165,648,571
172,252,057
(6,603,486
)
(4
)%
Earnings per share, basic
$
1.21
$
0.90
$
0.31
34
%
Earnings per share, diluted
$
1.21
$
0.90
$
0.31
34
%
(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
EARNED/PAID, & AVERAGE YIELDS
As of and for the three months
ended
Dec 31, 2022
Sep 30, 2022
Dec 31, 2021
(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
$
9,528,386
$
108,015
4.50
%
$
9,138,029
$
96,270
4.18
%
$
8,021,665
$
80,326
3.97
%
Residential
2,313,810
18,837
3.23
%
2,043,219
15,811
3.07
%
1,735,324
12,993
2.97
%
Consumer
1,363,858
18,949
5.51
%
1,341,528
16,072
4.75
%
1,189,106
9,683
3.23
%
Total loans
13,206,054
145,801
4.38
%
12,522,776
128,153
4.06
%
10,946,095
103,002
3.73
%
Investment securities
8,422,385
32,432
1.53
%
8,716,105
31,708
1.44
%
7,336,783
23,633
1.28
%
Federal funds sold and other short-term
investments
63,408
545
3.41
%
282,629
1,638
2.30
%
1,201,223
452
0.15
%
Total interest-earning assets
21,691,847
178,778
3.27
%
21,521,510
161,499
2.98
%
19,484,101
127,087
2.59
%
Non-interest-earning assets
653,158
911,025
1,373,219
Total assets
$
22,345,005
$
22,432,535
$
20,857,320
Interest-bearing liabilities:
Deposits:
Savings
$
1,924,840
$
57
0.01
%
$
2,021,125
$
51
0.01
%
$
1,800,862
$
61
0.01
%
Interest checking
4,871,089
4,897
0.40
%
5,211,914
2,686
0.20
%
3,830,427
1,267
0.13
%
Money market
4,778,694
9,919
0.82
%
4,824,452
1,893
0.16
%
4,743,313
788
0.07
%
Time deposits
563,735
2,584
1.82
%
380,560
151
0.16
%
388,511
281
0.29
%
Total interest-bearing deposits
12,138,358
17,457
0.57
%
12,438,051
4,781
0.15
%
10,763,113
2,397
0.09
%
Borrowings
795,527
7,547
3.76
%
157,686
867
2.18
%
29,204
42
0.57
%
Total interest-bearing liabilities
12,933,885
25,004
0.77
%
12,595,737
5,648
0.18
%
10,792,317
2,439
0.09
%
Demand deposit accounts
6,495,817
6,614,467
6,226,291
Other noninterest-bearing liabilities
495,129
445,640
415,481
Total liabilities
19,924,831
19,655,844
17,434,089
Shareholders' equity
2,420,174
2,776,691
3,423,231
Total liabilities and shareholders'
equity
$
22,345,005
$
22,432,535
$
20,857,320
Net interest income - FTE
$
153,774
$
155,851
$
124,648
Net interest rate spread (2)
2.50
%
2.80
%
2.50
%
Net interest-earning assets (3)
$
8,757,962
$
8,925,773
$
8,691,784
Net interest margin - FTE (4)
2.81
%
2.87
%
2.54
%
(1) Includes non-accrual loans.
(2) Net interest rate spread represents
the difference between the weighted average yield on
interest-earning assets and the weighted average cost of
interest-bearing liabilities.
(3) Net interest-earning assets represent
total interest-earning assets less total interest-bearing
liabilities.
(4) Net interest margin - FTE represents
fully-taxable equivalent net interest income* divided by average
total interest-earning assets. Please refer to Appendix B to this
press release for a reconciliation of fully-taxable equivalent net
interest income.
(5) Presented on an annualized basis.
EASTERN BANKSHARES, INC. AND
SUBSIDIARIES
AVERAGE BALANCES, INTEREST
EARNED/PAID, & AVERAGE YIELDS
As of and for the twelve
months ended
Dec 31, 2022
Dec 31, 2021
(Unaudited, dollars in thousands)
Avg. Balance
Interest
Yield / Cost
Avg. Balance
Interest
Yield / Cost
Interest-earning assets:
Loans (1):
Commercial
$
9,147,540
$
366,097
4.00
%
$
7,410,024
$
288,557
3.89
%
Residential
2,064,609
63,803
3.09
%
1,510,703
47,143
3.12
%
Consumer
1,327,417
56,965
4.29
%
1,103,042
36,019
3.27
%
Total loans
12,539,566
486,865
3.88
%
10,023,769
371,719
3.71
%
Total investment securities
8,666,868
127,781
1.47
%
5,151,136
67,647
1.31
%
Federal funds sold and other short-term
investments
420,834
3,271
0.78
%
1,514,351
1,886
0.12
%
Total interest-earning assets
21,627,268
617,917
2.86
%
16,689,256
441,252
2.64
%
Non-interest-earning assets
986,865
1,173,830
Total assets
$
22,614,133
$
17,863,086
Interest-bearing liabilities:
Deposits:
Savings
$
2,015,651
$
209
0.01
%
$
1,483,271
$
230
0.02
%
Interest checking
4,890,709
11,675
0.24
%
2,866,091
1,997
0.07
%
Money market
5,057,445
13,479
0.27
%
3,870,712
2,342
0.06
%
Time deposits
463,261
3,258
0.70
%
280,141
598
0.21
%
Total interest-bearing deposits
12,427,066
28,621
0.23
%
8,500,215
5,167
0.06
%
Borrowings
256,632
8,506
3.31
%
26,495
165
0.62
%
Total interest-bearing liabilities
12,683,698
37,127
0.29
%
8,526,710
5,332
0.06
%
Demand deposit accounts
6,647,518
5,547,615
Other noninterest-bearing liabilities
451,384
364,191
Total liabilities
19,782,600
14,438,516
Shareholders' equity
2,831,533
3,424,570
Total liabilities and shareholders'
equity
$
22,614,133
$
17,863,086
Net interest income - FTE
$
580,790
$
435,920
Net interest rate spread (2)
2.57
%
2.58
%
Net interest-earning assets (3)
$
8,943,570
$
8,162,546
Net interest margin - FTE (4)
2.69
%
2.61
%
(1) Includes non-accrual loans.
(2) Net interest rate spread represents
the difference between the weighted average yield on
interest-earning assets and the weighted average cost of
interest-bearing liabilities.
(3) Net interest-earning assets represent
total interest-earning assets less total interest-bearing
liabilities.
(4) Net interest margin - FTE represents
fully-taxable equivalent net interest income* divided by average
total interest-earning assets. Please refer to Appendix B to this
press release for a reconciliation of fully-taxable equivalent net
interest income.
EASTERN BANKSHARES, INC. AND
SUBSIDIARIES
ASSET QUALITY - NON-PERFORMING
ASSETS (1)
As of
Dec 31, 2022
Sep 30, 2022
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
(Unaudited, dollars in thousands)
Non-accrual loans:
Commercial
$
21,474
$
19,886
$
43,628
$
17,919
$
20,630
Residential
9,750
8,513
9,486
8,256
6,681
Consumer
7,380
5,555
6,766
7,646
5,682
Total non-accrual loans
38,604
33,954
59,880
33,821
32,993
Total accruing loans past due 90 days or
more (2):
—
—
—
—
1,990
Total non-performing loans
38,604
33,954
59,880
33,821
34,983
Other real estate owned
—
—
—
—
—
Other non-performing assets:
—
—
—
—
—
Total non-performing assets
$
38,604
$
33,954
$
59,880
$
33,821
$
34,983
Total accruing troubled debt restructured
loans
$
28,834
$
36,275
$
33,518
$
32,016
$
33,336
Total non-performing loans to total
loans
0.28
%
0.26
%
0.48
%
0.28
%
0.29
%
Total non-performing assets to total
assets
0.17
%
0.15
%
0.27
%
0.15
%
0.15
%
(1) Non-performing assets are comprised of
NPLs, other real estate owned ("OREO"), and non-performing
securities. NPLs consist of non-accrual loans and loans that are
more than 90 days past due but still accruing interest. OREO
consists of real estate properties, which primarily serve as
collateral to secure the Company’s loans, that it controls due to
foreclosure or acceptance of a deed in lieu of foreclosure.
(2) Loans that were past due 90 days or
more and still accruing in prior quarters were comprised solely of
purchased credit impaired ("PCI") loans. PCI loans were not subject
to classification as nonaccrual in the same manner as originated
loans as their interest income related to the accretable yield
recognized and not to contractual interest payments at the loan
level. In connection with the Company’s adoption on January 1, 2022
of the loan loss methodology commonly referred to as the "current
expected credit losses methodology" ("CECL"), the Company's PCI
loans are now considered purchased credit deteriorated ("PCD")
loans. Interest income recognition for PCD loans is consistent with
originated loans and, therefore, PCD loans cease accruing interest
at 90 days past due unless management believes that collateral held
by the Company is clearly sufficient and in full satisfaction of
both principal and interest. There were no PCD or originated loans
at December 31, 2022, September 30, 2022, June 30, 2022 or March
31, 2022 that were past due 90 days or more and still accruing.
EASTERN BANKSHARES, INC. AND
SUBSIDIARIES
ASSET QUALITY - PROVISION,
ALLOWANCE, AND NET CHARGE-OFFS (RECOVERIES)
Three months ended
Dec 31, 2022
Sep 30, 2022
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
(Unaudited, dollars in thousands)
Average total loans
$
13,203,450
$
12,521,426
$
12,213,706
$
12,203,212
$
10,944,091
Allowance for loan losses, beginning of
the period
131,663
125,531
124,166
97,787
103,398
Total cumulative effect of change in
accounting principle (1):
—
—
—
27,086
—
Charged-off loans:
Commercial and industrial
256
11
1
1
1,008
Commercial real estate
—
—
—
—
5
Commercial construction
—
—
—
—
—
Business banking
370
369
608
945
1,002
Residential real estate
—
—
—
—
35
Consumer home equity
1
—
—
—
24
Other consumer
515
603
490
661
666
Total charged-off loans
1,142
983
1,099
1,607
2,740
Recoveries on loans previously
charged-off:
Commercial and industrial
248
126
698
250
873
Commercial real estate
38
3
36
14
—
Commercial construction
—
—
—
—
—
Business banking
391
286
464
928
399
Residential real estate
14
56
14
10
7
Consumer home equity
8
6
6
4
48
Other consumer
111
158
196
179
120
Total recoveries
810
635
1,414
1,385
1,447
Net loans charged-off (recoveries):
Commercial and industrial
8
(115
)
(697
)
(249
)
135
Commercial real estate
(38
)
(3
)
(36
)
(14
)
5
Commercial construction
—
—
—
—
—
Business banking
(21
)
83
144
17
603
Residential real estate
(14
)
(56
)
(14
)
(10
)
28
Consumer home equity
(7
)
(6
)
(6
)
(4
)
(24
)
Other consumer
404
445
294
482
546
Total net loans charged-off
(recoveries)
332
348
(315
)
222
1,293
Provision for (release of) allowance for
loan losses
10,880
6,480
1,050
(485
)
(4,318
)
Total allowance for loan losses, end of
period
$
142,211
$
131,663
$
125,531
$
124,166
$
97,787
Net charge-offs (recoveries) to average
total loans outstanding during this period (2)
0.01
%
0.01
%
(0.01
)%
0.01
%
0.05
%
Allowance for loan losses as a percent of
total loans
1.05
%
1.02
%
1.01
%
1.02
%
0.80
%
Allowance for loan losses as a percent of
nonperforming loans
368.38
%
387.77
%
209.64
%
367.13
%
279.53
%
(1) Represents the adjustment needed to
reflect the cumulative day one impact pursuant to the Company’s
adoption of ASU 2016-13 (i.e., cumulative effect adjustment related
the adoption of ASU 2016-13 as of January 1, 2022). The adjustment
represents a $27.1 million increase to the allowance for loan
losses attributable to the change in accounting methodology which
requires the estimation of the allowance for credit losses
resulting from the Company’s adoption of the standard. The
adjustment also includes the adjustment needed to reflect the day
one reclassification of the Company’s financial assets that were
previously classified as PCI financial assets as PCD financial
assets and the associated gross-up of $0.1 million, pursuant to the
Company’s adoption of ASU 2016-13.
(2) 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."
As of and for the three Months
Ended
(Unaudited, dollars in thousands, except
per-share data)
Dec 31, 2022
Sep 30, 2022
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
Net income (GAAP)
$
42,294
$
54,777
$
51,172
$
51,516
$
35,087
Add:
Noninterest income components:
(Income) losses from investments held in
rabbi trusts
(3,235
)
2,248
7,316
4,433
(4,444
)
Losses on sales of securities available
for sale, net
683
198
104
2,172
—
(Gains) losses on sales of other
assets
(14
)
(501
)
(1,251
)
274
(34
)
Noninterest expense components:
Rabbi trust employee benefit expense
(income)
1,103
(867
)
(3,310
)
(2,087
)
2,519
Impairment charge on tax credit
investments
—
—
—
—
116
Merger and acquisition expenses
—
271
—
34
30,652
Defined Benefit Plan settlement loss
12,045
—
—
—
—
Total impact of non-GAAP adjustments
10,582
1,349
2,859
4,826
28,809
Less net tax benefit associated with
non-GAAP adjustments (1)
2,964
384
1,513
1,235
19,036
Non-GAAP adjustments, net of tax
$
7,618
$
965
$
1,346
$
3,591
$
9,773
Operating net income (non-GAAP)
$
49,912
$
55,742
$
52,518
$
55,107
$
44,860
Weighted average common shares outstanding
during the period (2):
Basic
162,032,522
163,718,962
166,533,920
169,857,950
172,246,799
Diluted
162,263,547
164,029,649
166,573,627
169,968,156
172,481,829
Earnings per share, basic
$
0.26
$
0.33
$
0.31
$
0.30
$
0.20
Earnings per share, diluted
$
0.26
$
0.33
$
0.31
$
0.30
$
0.20
Operating earnings per share, basic
(non-GAAP)
$
0.31
$
0.34
$
0.32
$
0.32
$
0.26
Operating earnings per share, diluted
(non-GAAP)
$
0.31
$
0.34
$
0.32
$
0.32
$
0.26
Return on average assets (3)
0.75
%
0.97
%
0.92
%
0.90
%
0.67
%
Add:
(Income) losses from investments held in
rabbi trusts (3)
(0.06
)%
0.04
%
0.13
%
0.08
%
(0.08
)%
Losses on sales of securities available
for sale, net (3)
0.01
%
0.00
%
0.00
%
0.04
%
0.00
%
(Gains) losses on sales of other assets
(3)
0.00
%
(0.01
)%
(0.02
)%
0.00
%
0.00
%
Rabbi trust employee benefit expense
(income) (3)
0.02
%
(0.02
)%
(0.06
)%
(0.04
)%
0.05
%
Impairment charge on tax credit
investments (3)
0.00
%
0.00
%
0.00
%
0.00
%
0.00
%
Merger and acquisition expenses (3)
0.00
%
0.00
%
0.00
%
0.00
%
0.58
%
Defined Benefit Plan settlement loss
(3)
0.21
%
0.00
%
0.00
%
0.00
%
0.00
%
Less net tax benefit associated with
non-GAAP adjustments (1) (3)
0.05
%
0.01
%
0.03
%
0.02
%
0.36
%
Operating return on average assets
(non-GAAP) (3)
0.88
%
0.97
%
0.94
%
0.96
%
0.86
%
Return on average shareholders' equity
(3)
6.93
%
7.83
%
7.16
%
6.38
%
4.07
%
Add:
(Income) losses from investments held in
rabbi trusts (3)
(0.53
)%
0.32
%
1.02
%
0.55
%
(0.52
)%
Losses on sales of securities available
for sale, net (3)
0.11
%
0.03
%
0.01
%
0.27
%
0.00
%
(Gains) losses on sales of other assets
(3)
0.00
%
(0.07
)%
(0.18
)%
0.03
%
0.00
%
Rabbi trust employee benefit expense
(income) (3)
0.18
%
(0.12
)%
(0.46
)%
(0.26
)%
0.29
%
Impairment charge on tax credit
investments (3)
0.00
%
0.00
%
0.00
%
0.00
%
0.01
%
Merger and acquisition expenses (3)
0.00
%
0.04
%
0.00
%
0.00
%
3.55
%
Defined Benefit Plan settlement loss
(3)
1.97
%
0.00
%
0.00
%
0.00
%
0.00
%
Less net tax benefit associated with
non-GAAP adjustments (1) (3)
0.49
%
0.05
%
0.21
%
0.15
%
2.21
%
Operating return on average
shareholders' equity (non-GAAP) (3)
8.17
%
7.98
%
7.34
%
6.82
%
5.19
%
Average tangible shareholders'
equity:
Average total shareholders' equity
(GAAP)
$
2,420,174
$
2,776,691
$
2,865,799
$
3,273,447
$
3,423,231
Less: Average goodwill and other
intangibles
661,841
656,684
654,444
649,497
520,988
Average tangible shareholders' equity
(non-GAAP)
$
1,758,333
$
2,120,007
$
2,211,355
$
2,623,950
$
2,902,243
Return on average tangible
shareholders' equity (non-GAAP) (3)
9.54
%
10.25
%
9.28
%
7.96
%
4.80
%
Add:
(Income) losses from investments held in
rabbi trusts (3)
(0.73
)%
0.42
%
1.33
%
0.69
%
(0.61
)%
Losses on sales of securities available
for sale, net (3)
0.15
%
0.04
%
0.02
%
0.34
%
0.00
%
(Gains) losses on sales of other assets
(3)
0.00
%
(0.09
)%
(0.23
)%
0.04
%
0.00
%
Rabbi trust employee benefit expense
(income) (3)
0.25
%
(0.16
)%
(0.60
)%
(0.32
)%
0.34
%
Impairment charge on tax credit
investments (3)
0.00
%
0.00
%
0.00
%
0.00
%
0.02
%
Merger and acquisition expenses (3)
0.00
%
0.05
%
0.00
%
0.01
%
4.19
%
Defined Benefit Plan settlement loss
(3)
2.72
%
0.00
%
0.00
%
0.00
%
0.00
%
Less net tax benefit associated with
non-GAAP adjustments (1) (3)
0.67
%
0.07
%
0.27
%
0.19
%
2.60
%
Operating return on average tangible
shareholders' equity (non-GAAP) (3)
11.26
%
10.44
%
9.53
%
8.53
%
6.14
%
(1) The net tax benefit associated with
these items is determined by assessing whether each item is
included or excluded from net taxable income and applying our
combined statutory tax rate only to those items included in net
taxable income. The net tax benefit amount for the quarters ended
December 31, 2021 and June 30, 2022 reflect the impact of the
release of $11.3 million and $0.7 million, respectively, of the
$12.0 million valuation allowance associated with the Company's
stock donation to the Eastern Bank Foundation made in the quarter
ended December 31, 2020. There was no such release in other
quarters.
(2) Shares held by the Company’s ESOP that
have not been allocated to employees in accordance with the terms
of the ESOP are not deemed outstanding for earnings per share
calculations.
(3) Presented on an annualized basis.
APPENDIX B: Reconciliation of Non-GAAP Operating Revenues and
Expenses
For information on non-GAAP financial measures, please see the
section titled "Non-GAAP Financial Measures."
Three Months Ended
Dec 31, 2022
Sep 30, 2022
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
(Unaudited, dollars in thousands)
Net interest income (GAAP)
$
149,994
$
152,179
$
137,757
$
128,124
$
122,437
Add:
Tax-equivalent adjustment (non-GAAP)
(1)
3,780
3,672
3,023
2,261
2,211
Fully-taxable equivalent net interest
income (non-GAAP)
$
153,774
$
155,851
$
140,780
$
130,385
$
124,648
Noninterest income (GAAP)
$
44,516
$
43,353
$
41,877
$
46,415
$
49,001
Less:
Income (losses) from investments held in
rabbi trusts
3,235
(2,248
)
(7,316
)
(4,433
)
4,444
Losses on sales of securities available
for sale, net
(683
)
(198
)
(104
)
(2,172
)
—
Gain (losses) on sales of other assets
14
501
1,251
(274
)
34
Noninterest income on an operating
basis (non-GAAP)
$
41,950
$
45,298
$
48,046
$
53,294
$
44,523
Noninterest expense (GAAP)
$
132,757
$
116,840
$
111,139
$
108,866
$
143,602
Less:
Rabbi trust employee benefit expense
(income)
1,103
(867
)
(3,310
)
(2,087
)
2,519
Impairment charge on tax credit
investments
—
—
—
—
116
Merger and acquisition expenses
—
271
—
34
30,652
Defined Benefit Plan settlement loss
12,045
—
—
—
—
Noninterest expense on an operating
basis (non-GAAP)
$
119,609
$
117,436
$
114,449
$
110,919
$
110,315
Total revenue (GAAP)
$
194,510
$
195,532
$
179,634
$
174,539
$
171,438
Total operating revenue (non-GAAP)
$
195,724
$
201,149
$
188,826
$
183,679
$
169,171
Efficiency ratio (GAAP)
68.25
%
59.75
%
61.87
%
62.37
%
83.76
%
Operating efficiency ratio (non-GAAP)
61.11
%
58.38
%
60.61
%
60.39
%
65.21
%
Noninterest income / total revenue
(GAAP)
22.89
%
22.17
%
23.31
%
26.59
%
28.58
%
Noninterest income / total revenue on an
operating basis (non-GAAP)
21.43
%
22.52
%
25.44
%
29.01
%
26.32
%
(1) Interest income on tax-exempt loans
and investment securities has been adjusted to an FTE basis using a
marginal tax rate of 21.6%, 21.5%, 21.5%, 21.5%, and 21.0% for the
three months ended December 31, 2022, September 30, 2022, June 30,
2022, March 31, 2022, and December 31, 2021, respectively.
APPENDIX C: Reconciliation of Non-GAAP Capital
Metrics
For information on non-GAAP financial measures, please see the
section titled "Non-GAAP Financial Measures."
As of
Dec 31, 2022
Sep 30, 2022
Jun 30, 2022
Mar 31, 2022
Dec 31, 2021
(Unaudited, dollars in thousands, except
per-share data)
Tangible shareholders' equity:
Total shareholders' equity (GAAP)
$
2,471,790
$
2,416,163
$
2,718,396
$
3,008,392
$
3,406,352
Less: Goodwill and other intangibles
661,126
662,222
653,853
654,759
649,703
Tangible shareholders' equity
(non-GAAP)
1,810,664
1,753,941
2,064,543
2,353,633
2,756,649
Tangible assets:
Total assets (GAAP)
22,646,858
22,042,933
22,350,848
22,836,072
23,512,128
Less: Goodwill and other intangibles
661,126
662,222
653,853
654,759
649,703
Tangible assets (non-GAAP)
$
21,985,732
$
21,380,711
$
21,696,995
$
22,181,313
$
22,862,425
Shareholders' equity to assets ratio
(GAAP)
10.91
%
10.96
%
12.16
%
13.17
%
14.49
%
Tangible shareholders' equity to tangible
assets ratio (non-GAAP)
8.24
%
8.20
%
9.52
%
10.61
%
12.06
%
Common shares outstanding
176,172,073
177,772,553
179,253,801
183,438,711
186,305,332
Book value per share (GAAP)
$
14.03
$
13.59
$
15.17
$
16.40
$
18.28
Tangible book value per share
(non-GAAP)
$
10.28
$
9.87
$
11.52
$
12.83
$
14.80
APPENDIX D: Tangible Shareholders’ Equity Roll Forward
Analysis
For information on non-GAAP financial measures, please see the
section titled "Non-GAAP Financial Measures."
As of
Change
Dec 31, 2022
Sep 30, 2022
Sep 30, 2022
(Unaudited, dollars in thousands, except
per-share data)
Common stock
$
1,762
$
1,778
$
(16
)
Additional paid in capital
1,649,141
1,676,396
(27,255
)
Unallocated ESOP common stock
(137,696
)
(138,950
)
1,254
Retained earnings
1,881,775
1,855,757
26,018
AOCI, net of tax - available for sale
securities
(880,156
)
(918,855
)
38,699
AOCI, net of tax - pension
7,123
(5,842
)
12,965
AOCI, net of tax - cash flow hedge
(50,159
)
(54,121
)
3,962
Total shareholders' equity:
$
2,471,790
$
2,416,163
$
55,627
Less: Goodwill and other intangibles
661,126
662,222
(1,096
)
Tangible shareholders' equity
(non-GAAP)
$
1,810,664
$
1,753,941
$
56,723
Common shares outstanding
176,172,073
177,772,553
(1,600,480
)
Per share:
Common stock
$
0.01
$
0.01
$
—
Additional paid in capital
9.36
9.43
(0.07
)
Unallocated ESOP common stock
(0.78
)
(0.78
)
—
Retained earnings
10.68
10.44
0.24
AOCI, net of tax - available for sale
securities
(5.00
)
(5.17
)
0.17
AOCI, net of tax - pension
0.04
(0.03
)
0.07
AOCI, net of tax - cash flow hedge
(0.28
)
(0.30
)
0.02
Total shareholders' equity:
$
14.03
$
13.59
$
0.44
Less: Goodwill and other intangibles
3.75
3.73
0.03
Tangible shareholders' equity
(non-GAAP)
$
10.28
$
9.87
$
0.41
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230126005712/en/
Investor
Jillian Belliveau Eastern Bankshares, Inc.
InvestorRelations@easternbank.com 781-598-7920
Media
Andrea Goodman Eastern Bank a.goodman@easternbank.com
781-598-7847
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