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 third quarter financial results and the declaration of a quarterly cash dividend. Net income for the third quarter of 2022 was $54.8 million, or $0.33 per diluted share, compared to net income of $51.2 million, or $0.31 per diluted share, reported for the second quarter of 2022. Operating net income* for the third quarter of 2022 was $55.7 million, or $0.34 per diluted share, compared to $52.5 million, or $0.32 per diluted share, reported for the prior quarter.
“Our financial results for the third quarter were strong, led by 16 percent loan growth on an annualized basis, while maintaining our high credit quality and underwriting standards,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “Additionally, our net interest margin expanded by twenty-four basis points from the prior quarter, driving a ten percent increase in net interest income. We remain focused on achieving our strategic priorities while continuing to deliver for our shareholders, customers, colleagues, and the communities we serve."
HIGHLIGHTS FOR THE THIRD QUARTER OF 2022
- Operating net income* of $55.7 million, or $0.34 per diluted share, for the third quarter of 2022 was 49% higher than the comparable prior year quarter.
- Net interest income of $152.2 million for the third quarter of 2022 was 10% higher than the prior quarter.
- The net interest margin on a fully tax equivalent (“FTE”) basis* of 2.87% for the third quarter was 24 basis points higher than the prior quarter.
- The cost of total deposits was 10 basis points in the third quarter, an increase of 4 basis points from the prior quarter.
- Loan growth was 16% on an annualized basis, driven by double-digit annualized growth in commercial and residential lending.
- The Company repurchased 1,481,248 shares of its common stock during the third quarter of 2022 at a weighted average price of $19.52 excluding commissions, for an aggregate purchase price of $28.9 million.
The results for the comparable prior year quarter do not reflect the Company’s acquisition of Century Bancorp, Inc. (“Century”), which was completed on November 12, 2021.
BALANCE SHEET
Total assets were $22.0 billion at September 30, 2022, representing a decrease of $307.9 million, or 1%, from June 30, 2022.
- Total securities decreased $698.9 million, or 9%, from the prior quarter, to $7.3 billion, primarily due to a decline in the market value of available for sale securities driven by higher interest rates, net security sales, and principal runoff.
- Cash and equivalents declined $210.5 million from the prior quarter to $158.4 million.
- Total loans were $12.9 billion, representing an increase of $505.3 million, or 4%, from the prior quarter. The increase was driven by strong loan growth in all major categories. Commercial loans grew $356.6 million, residential loans grew $129.2 million and consumer loans grew $19.4 million, reflecting growth of 16%, 26%, and 6%, respectively, on an annualized basis. Residential loans at September 30, 2022 included purchased loans from Embrace Home Loans totaling $77.7 million excluding purchase premiums.
- Deposits totaled $18.7 billion, representing a decrease of $430.4 million, or 2%, from the prior quarter. On a quarterly average basis, deposits were down $24.7 million from the prior quarter.
- Borrowed funds increased $379.6 million from the prior quarter to provide funding for strong loan growth in the third quarter.
- Shareholders’ equity was $2.4 billion, representing a decrease of $302.2 million from the prior quarter driven primarily by a decrease in accumulated other comprehensive income of $317.7 million. Please refer to Appendix D to this press release for a roll forward of tangible shareholders’ equity*.
- At September 30, 2022, book value per share was $13.59 and tangible book value per share* was $9.87.
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 $152.2 million for the third quarter of 2022, compared to $137.8 million in the prior quarter, representing an increase of $14.4 million.
- The increase in net interest income on a consecutive quarter basis was primarily due to an increase in the net interest margin, which benefited primarily from higher short-term interest rates, as well as an increase in average interest-earning asset balances of $77.5 million from the prior quarter, attributable to loan growth.
- The net interest margin on a FTE basis* was 2.87% for the third quarter, representing a 24 basis point increase from the prior quarter, as asset yields benefited from higher interest rates in the period, partially offset by lower net Paycheck Protection Program (“PPP”) fee accretion compared to the prior quarter. Interest-bearing funding costs increased 8 basis points from the prior quarter to 18 basis points, due to deposit pricing increases and an increase in borrowings during the quarter.
- Included in net interest income in the third quarter and prior quarter, respectively, was $0.5 million and $2.5 million of PPP fee accretion net of deferred cost amortization. During the third quarter, $19.3 million in PPP loans were forgiven by the U.S. Small Business Administration or otherwise paid down, compared to $98.7 million in the prior quarter.
NONINTEREST INCOME
Noninterest income was $43.4 million for the third quarter of 2022, compared to $41.9 million for the prior quarter, representing an increase of $1.5 million. Noninterest income on an operating basis* was $45.3 million for the third quarter of 2022, compared to $48.0 million for the prior quarter, a decrease of $2.7 million.
- Insurance commissions decreased $0.9 million to $23.8 million in the third quarter, compared to $24.7 million in the prior quarter. Compared to the comparable prior year quarter, insurance commissions increased $1.8 million, or 8%.
- Service charges on deposit accounts decreased $1.6 million on a consecutive quarter basis to $6.7 million primarily due to lower overdraft fees driven by a change in overdraft charging practices as well as lower account analysis fees.
- Trust and investment advisory fees decreased $0.2 million on a consecutive quarter basis to $5.8 million.
- Loan-level interest rate swap income was $1.6 million in the third quarter, in line with the prior quarter.
- Market performance drove losses on investments held in rabbi trust accounts totaling $2.2 million in the third quarter compared to losses of $7.3 million in the prior quarter.
- Realized losses on available for sale securities were $0.2 million in the third quarter compared to $0.1 million in the prior quarter.
- Other noninterest income decreased $0.8 million in the third quarter to $4.6 million.
Please refer to Appendix B to this press release for a reconciliation of operating revenues and expenses*.
NONINTEREST EXPENSE
Noninterest expense was $116.8 million for the third quarter of 2022, compared to $111.1 million in the prior quarter, representing an increase of $5.7 million. Noninterest expense on an operating basis* for the third quarter of 2022 was $117.4 million, compared to $114.4 million in the prior quarter, an increase of $3.0 million.
- Salaries and employee benefits expense was $78.1 million in the third quarter, representing an increase of $5.1 million from the prior quarter, driven in part by an increase in incentive compensation expense of $3.3 million as well as an increase in benefits expense of $1.0 million primarily attributable to the lower losses on investments held in rabbi trust accounts associated with the Company’s defined contribution supplemental executive retirement plan.
- Office occupancy and equipment expense was $9.7 million in the third quarter, a decrease of $0.2 million from the prior quarter.
- Data processing expenses were $13.3 million in the third quarter, a decrease of $1.1 million from the prior quarter.
- Professional services expense was $5.8 million in the third quarter, an increase of $1.8 million from the prior quarter due primarily to an increase in legal fees and an increase in other professional fees.
- Marketing expense was $2.2 million in the third quarter, a decrease of $0.4 million from the prior quarter, primarily due to lower advertising expenses in the period.
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 $131.7 million at September 30, 2022, or 1.02% of total loans, compared to $125.5 million or 1.01% of total loans at June 30, 2022. The Company recorded a provision for the allowance for loan losses totaling $6.5 million in the third quarter of 2022 primarily due to loan growth.
Non-performing loans totaled $34.0 million at September 30, 2022 compared to $59.9 million at the end of the prior quarter. The decrease from the prior quarter was primarily attributable to the full payoff of one syndicated credit facility that migrated to nonaccrual status in the prior quarter. During the third 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 net recoveries of $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 December 15, 2022 to shareholders of record as of the close of business on December 2, 2022.
The Company repurchased 1,481,248 shares of its common stock during the third quarter of 2022 at a weighted average price of $19.52 excluding commissions, for an aggregate purchase price of $28.9 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 September 30, 2022, there were 8,537,684 shares available for repurchase and $192.6 million in total market value remaining under the repurchase authorization.
As announced in November of 2021, the Company received regulatory non-objection for its inaugural share repurchase program, under which it was authorized to purchase up to 9,337,900 shares for up to $225 million over a 12-month period. The Company completed the program in September of 2022, having repurchased all 9,337,900 shares for an aggregate purchase price of $186.4 million, excluding commissions.
CONFERENCE CALL INFORMATION
A conference call and webcast covering Eastern’s third quarter 2022 earnings will be held on Friday, October 28, 2022 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 09796048. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A replay of the webcast will be made available on demand on this site.
ABOUT EASTERN BANKSHARES, INC.
Eastern Bankshares, Inc. is the stock holding company for Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 120 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of September 30, 2022, Eastern Bank had approximately $22 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, and (vii) merger and acquisition expenses. The Company does not provide an outlook for its total noninterest income and total noninterest expense because each contains income or expense components, as applicable, such as income associated with rabbi trust accounts and rabbi trust employee benefit expense, which are market-driven, and over which the Company cannot exercise control. Accordingly, reconciliations of the Company’s outlook for its noninterest income on an operating basis and its noninterest expense on an operating basis to an outlook for total noninterest income and total noninterest expense, respectively, cannot be made available without unreasonable effort.
Management also presents 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 the interest rate environment; risks that revenue or expense synergies or the other expected benefits of the Company’s merger with Century (“Transaction”) may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; risks that the Company is unable to successfully implement integration strategies for the Transaction; reputational risks and the reaction of customers to the Transaction; and diversion of management time on Transaction-related issues; as well as general economic conditions or conditions within the securities markets; and 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 inflation, interest rates, interest rate sensitivity and liquidity, including the effect of, and changes in, monetary and fiscal policies and laws, such as the interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations, including fluctuations due to actual or anticipated changes to federal tax laws; credit quality, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; 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.
Further, given the ongoing and dynamic nature of the COVID-19 pandemic, it is difficult to predict what continued effects the COVID-19 pandemic will have on the Company's business and results of operations. The COVID-19 pandemic and the related local and national economic disruption may result in a continued decline in demand for the Company's products and services; increased levels of loan delinquencies, problem assets and foreclosures; an increase in the Company's allowance for loan losses; a decline in the value of loan collateral, including real estate; reduced demand for office space in the Company’s markets due to remote and/or hybrid work arrangements; a greater decline in the yield on the Company's interest-earning assets than the decline in the cost of the Company's interest-bearing liabilities; and increased cybersecurity risks, as employees continue to work remotely.
You should not place undue reliance on forward-looking statements, which reflect the Company's expectations only as of the date of this press release. The Company does not undertake any obligation to update forward-looking statements.
EASTERN BANKSHARES, INC. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
Certain information in this press release is presented as reviewed by the Company’s management and includes information derived from the Company’s Consolidated Statements of Income, non-GAAP financial measures, and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."
|
As of and for the three months ended |
|||||||||||||||||||
(Unaudited, dollars in thousands, except per-share data) |
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
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|
|
|
|
|
|
|||||||||||||||
Earnings data |
|
|
|
|
|
|||||||||||||||
Net interest income |
$ |
152,179 |
|
$ |
137,757 |
|
$ |
128,124 |
|
$ |
122,437 |
|
$ |
102,691 |
|
|||||
Noninterest income |
|
43,353 |
|
|
41,877 |
|
|
46,415 |
|
|
49,001 |
|
|
43,209 |
|
|||||
Total revenue |
|
195,532 |
|
|
179,634 |
|
|
174,539 |
|
|
171,438 |
|
|
145,900 |
|
|||||
Noninterest expense |
|
116,840 |
|
|
111,139 |
|
|
108,866 |
|
|
143,602 |
|
|
98,970 |
|
|||||
Pre-tax, pre-provision income |
|
78,692 |
|
|
68,495 |
|
|
65,673 |
|
|
27,836 |
|
|
46,930 |
|
|||||
Provision for (release of) allowance for loan losses |
|
6,480 |
|
|
1,050 |
|
|
(485 |
) |
|
(4,318 |
) |
|
(1,488 |
) |
|||||
Pre-tax income |
|
72,212 |
|
|
67,445 |
|
|
66,158 |
|
|
32,154 |
|
|
48,418 |
|
|||||
Net income |
|
54,777 |
|
|
51,172 |
|
|
51,516 |
|
|
35,087 |
|
|
37,106 |
|
|||||
Operating net income (non-GAAP) |
|
55,742 |
|
|
52,518 |
|
|
55,107 |
|
|
44,860 |
|
|
37,391 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Per-share data |
|
|
|
|
|
|||||||||||||||
Earnings per share, basic |
$ |
0.33 |
|
$ |
0.31 |
|
$ |
0.30 |
|
$ |
0.20 |
|
$ |
0.22 |
|
|||||
Earnings per share, diluted |
$ |
0.33 |
|
$ |
0.31 |
|
$ |
0.30 |
|
$ |
0.20 |
|
$ |
0.22 |
|
|||||
Operating earnings per share, basic (non-GAAP) |
$ |
0.34 |
|
$ |
0.32 |
|
$ |
0.32 |
|
$ |
0.26 |
|
$ |
0.22 |
|
|||||
Operating earnings per share, diluted (non-GAAP) |
$ |
0.34 |
|
$ |
0.32 |
|
$ |
0.32 |
|
$ |
0.26 |
|
$ |
0.22 |
|
|||||
Book value per share |
$ |
13.59 |
|
$ |
15.17 |
|
$ |
16.40 |
|
$ |
18.28 |
|
$ |
18.36 |
|
|||||
Tangible book value per share (non-GAAP) |
$ |
9.87 |
|
$ |
11.52 |
|
$ |
12.83 |
|
$ |
14.80 |
|
$ |
16.33 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Profitability |
|
|
|
|
|
|||||||||||||||
Return on average assets (1) |
|
0.97 |
% |
|
0.92 |
% |
|
0.90 |
% |
|
0.67 |
% |
|
0.84 |
% |
|||||
Operating return on average assets (non-GAAP) (1) |
|
0.97 |
% |
|
0.94 |
% |
|
0.96 |
% |
|
0.86 |
% |
|
0.86 |
% |
|||||
Return on average shareholders' equity (1) |
|
7.83 |
% |
|
7.16 |
% |
|
6.38 |
% |
|
4.07 |
% |
|
4.27 |
% |
|||||
Operating return on average shareholders' equity (1) |
|
7.98 |
% |
|
7.34 |
% |
|
6.82 |
% |
|
5.19 |
% |
|
4.30 |
% |
|||||
Return on average tangible shareholders' equity (non-GAAP) (1) |
|
10.25 |
% |
|
9.28 |
% |
|
7.96 |
% |
|
4.80 |
% |
|
4.79 |
% |
|||||
Operating return on average tangible shareholders' equity (non-GAAP) (1) |
|
10.44 |
% |
|
9.53 |
% |
|
8.53 |
% |
|
6.14 |
% |
|
4.84 |
% |
|||||
Net interest margin (FTE) (1) |
|
2.87 |
% |
|
2.63 |
% |
|
2.42 |
% |
|
2.54 |
% |
|
2.53 |
% |
|||||
Cost of deposits (1) |
|
0.10 |
% |
|
0.06 |
% |
|
0.07 |
% |
|
0.06 |
% |
|
0.02 |
% |
|||||
Fee income ratio |
|
22.17 |
% |
|
23.31 |
% |
|
26.59 |
% |
|
28.58 |
% |
|
29.62 |
% |
|||||
Efficiency ratio |
|
59.75 |
% |
|
61.87 |
% |
|
62.37 |
% |
|
83.76 |
% |
|
67.83 |
% |
|||||
Operating efficiency ratio (non-GAAP) |
|
58.38 |
% |
|
60.61 |
% |
|
60.39 |
% |
|
65.21 |
% |
|
66.14 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
Balance Sheet (end of period) |
|
|
|
|
|
|||||||||||||||
Total assets |
$ |
22,042,933 |
|
$ |
22,350,848 |
|
$ |
22,836,072 |
|
$ |
23,512,128 |
|
$ |
17,461,223 |
|
|||||
Total loans |
|
12,903,954 |
|
|
12,398,694 |
|
|
12,182,203 |
|
|
12,281,510 |
|
|
9,504,562 |
|
|||||
Total deposits |
|
18,733,381 |
|
|
19,163,801 |
|
|
19,392,816 |
|
|
19,628,311 |
|
|
13,649,964 |
|
|||||
Total loans / total deposits |
|
69 |
% |
|
65 |
% |
|
63 |
% |
|
63 |
% |
|
70 |
% |
|||||
PPP loans |
$ |
23,142 |
|
$ |
42,463 |
|
$ |
141,166 |
|
$ |
331,385 |
|
$ |
533,965 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Asset quality |
|
|
|
|
|
|||||||||||||||
Allowance for loan losses ("ALLL") (2) |
$ |
131,663 |
|
$ |
125,531 |
|
$ |
124,166 |
|
$ |
97,787 |
|
$ |
103,398 |
|
|||||
ALLL / total nonperforming loans ("NPLs") |
|
387.77 |
% |
|
209.64 |
% |
|
367.13 |
% |
|
279.53 |
% |
|
245.77 |
% |
|||||
Total NPLs / total loans |
|
0.26 |
% |
|
0.48 |
% |
|
0.28 |
% |
|
0.29 |
% |
|
0.44 |
% |
|||||
Net charge-offs (recoveries) ("NCOs") / average total loans (1) |
|
0.01 |
% |
|
(0.01 |
)% |
|
0.01 |
% |
|
0.05 |
% |
|
0.03 |
% |
|||||
Remaining COVID-19 loan modifications |
$ |
17,682 |
|
$ |
19,914 |
|
$ |
49,033 |
|
$ |
106,657 |
|
$ |
110,596 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Capital adequacy |
|
|
|
|
|
|||||||||||||||
Shareholders' equity / assets |
|
10.96 |
% |
|
12.16 |
% |
|
13.17 |
% |
|
14.49 |
% |
|
19.64 |
% |
|||||
Tangible shareholders' equity / tangible assets (non-GAAP) |
|
8.20 |
% |
|
9.52 |
% |
|
10.61 |
% |
|
12.06 |
% |
|
17.85 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
(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 |
Sep 30, 2022 change from |
||||||||||||||||||||||||
(Unaudited, dollars in thousands) |
Sep 30, 2022 |
Jun 30, 2022 |
Sep 30, 2021 |
Jun 30, 2022 |
Sep 30, 2021 |
|||||||||||||||||||||
ASSETS |
|
|
|
△ $ |
△ % |
△ $ |
△ % |
|||||||||||||||||||
Cash and due from banks |
$ |
102,776 |
|
$ |
100,309 |
|
$ |
78,805 |
|
$ |
2,467 |
|
2 |
% |
$ |
23,971 |
|
30 |
% |
|||||||
Short-term investments |
|
55,661 |
|
|
268,605 |
|
|
1,172,956 |
|
|
(212,944 |
) |
(79 |
)% |
|
(1,117,295 |
) |
(95 |
)% |
|||||||
Cash and cash equivalents |
|
158,437 |
|
|
368,914 |
|
|
1,251,761 |
|
|
(210,477 |
) |
(57 |
)% |
|
(1,093,324 |
) |
(87 |
)% |
|||||||
Available for sale ("AFS") securities (1) |
|
6,844,615 |
|
|
7,536,921 |
|
|
5,689,312 |
|
|
(692,306 |
) |
(9 |
)% |
|
1,155,303 |
|
20 |
% |
|||||||
Held to maturity ("HTM") securities (1) |
|
481,963 |
|
|
488,581 |
|
|
— |
|
|
(6,618 |
) |
(1 |
)% |
|
481,963 |
|
— |
% |
|||||||
Total securities |
|
7,326,578 |
|
|
8,025,502 |
|
|
5,689,312 |
|
|
(698,924 |
) |
(9 |
)% |
|
1,637,266 |
|
29 |
% |
|||||||
Loans held for sale |
|
951 |
|
|
764 |
|
|
1,757 |
|
|
187 |
|
24 |
% |
|
(806 |
) |
(46 |
)% |
|||||||
Loans: |
|
|
|
|
|
|
|
|||||||||||||||||||
Commercial and industrial |
|
3,023,729 |
|
|
2,840,734 |
|
|
1,652,447 |
|
|
182,995 |
|
6 |
% |
|
1,371,282 |
|
83 |
% |
|||||||
Commercial real estate |
|
4,985,654 |
|
|
4,792,345 |
|
|
3,825,186 |
|
|
193,309 |
|
4 |
% |
|
1,160,468 |
|
30 |
% |
|||||||
Commercial construction |
|
314,193 |
|
|
303,463 |
|
|
243,146 |
|
|
10,730 |
|
4 |
% |
|
71,047 |
|
29 |
% |
|||||||
Business banking |
|
1,096,436 |
|
|
1,126,853 |
|
|
1,225,538 |
|
|
(30,417 |
) |
(3 |
)% |
|
(129,102 |
) |
(11 |
)% |
|||||||
Total commercial loans |
|
9,420,012 |
|
|
9,063,395 |
|
|
6,946,317 |
|
|
356,617 |
|
4 |
% |
|
2,473,695 |
|
36 |
% |
|||||||
Residential real estate |
|
2,118,852 |
|
|
1,989,621 |
|
|
1,491,269 |
|
|
129,231 |
|
6 |
% |
|
627,583 |
|
42 |
% |
|||||||
Consumer home equity |
|
1,168,476 |
|
|
1,147,425 |
|
|
848,570 |
|
|
21,051 |
|
2 |
% |
|
319,906 |
|
38 |
% |
|||||||
Other consumer |
|
196,614 |
|
|
198,253 |
|
|
218,406 |
|
|
(1,639 |
) |
(1 |
)% |
|
(21,792 |
) |
(10 |
)% |
|||||||
Total loans |
|
12,903,954 |
|
|
12,398,694 |
|
|
9,504,562 |
|
|
505,260 |
|
4 |
% |
|
3,399,392 |
|
36 |
% |
|||||||
Allowance for loan losses |
|
(131,663 |
) |
|
(125,531 |
) |
|
(103,398 |
) |
|
(6,132 |
) |
5 |
% |
|
(28,265 |
) |
27 |
% |
|||||||
Unamortized prem./disc. and def. fees |
|
(19,349 |
) |
|
(20,988 |
) |
|
(23,104 |
) |
|
1,639 |
|
(8 |
)% |
|
3,755 |
|
(16 |
)% |
|||||||
Net loans |
|
12,752,942 |
|
|
12,252,175 |
|
|
9,378,060 |
|
|
500,767 |
|
4 |
% |
|
3,374,882 |
|
36 |
% |
|||||||
Federal Home Loan Bank stock, at cost |
|
18,714 |
|
|
5,714 |
|
|
10,601 |
|
|
13,000 |
|
228 |
% |
|
8,113 |
|
77 |
% |
|||||||
Premises and equipment |
|
63,261 |
|
|
69,019 |
|
|
44,048 |
|
|
(5,758 |
) |
(8 |
)% |
|
19,213 |
|
44 |
% |
|||||||
Bank-owned life insurance |
|
159,838 |
|
|
158,890 |
|
|
79,259 |
|
|
948 |
|
1 |
% |
|
80,579 |
|
102 |
% |
|||||||
Goodwill and other intangibles, net |
|
662,222 |
|
|
653,853 |
|
|
379,772 |
|
|
8,369 |
|
1 |
% |
|
282,450 |
|
74 |
% |
|||||||
Deferred income taxes, net |
|
342,550 |
|
|
244,153 |
|
|
34,135 |
|
|
98,397 |
|
40 |
% |
|
308,415 |
|
904 |
% |
|||||||
Prepaid expenses |
|
180,742 |
|
|
188,115 |
|
|
148,180 |
|
|
(7,373 |
) |
(4 |
)% |
|
32,562 |
|
22 |
% |
|||||||
Other assets |
|
376,698 |
|
|
383,749 |
|
|
444,338 |
|
|
(7,051 |
) |
(2 |
)% |
|
(67,640 |
) |
(15 |
)% |
|||||||
Total assets |
$ |
22,042,933 |
|
$ |
22,350,848 |
|
$ |
17,461,223 |
|
$ |
(307,915 |
) |
(1 |
)% |
$ |
4,581,710 |
|
26 |
% |
|||||||
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
|
|
|
|
|||||||||||||||||||
Deposits: |
|
|
|
|
|
|
|
|||||||||||||||||||
Demand |
$ |
6,582,122 |
|
$ |
6,604,154 |
|
$ |
5,484,126 |
|
$ |
(22,032 |
) |
— |
% |
$ |
1,097,996 |
|
20 |
% |
|||||||
Interest checking accounts |
|
5,047,018 |
|
|
5,348,181 |
|
|
2,693,276 |
|
|
(301,163 |
) |
(6 |
)% |
|
2,353,742 |
|
87 |
% |
|||||||
Savings accounts |
|
1,990,188 |
|
|
2,015,865 |
|
|
1,444,928 |
|
|
(25,677 |
) |
(1 |
)% |
|
545,260 |
|
38 |
% |
|||||||
Money market investment |
|
4,757,477 |
|
|
4,787,603 |
|
|
3,802,319 |
|
|
(30,126 |
) |
(1 |
)% |
|
955,158 |
|
25 |
% |
|||||||
Certificates of deposit |
|
356,576 |
|
|
407,998 |
|
|
225,315 |
|
|
(51,422 |
) |
(13 |
)% |
|
131,261 |
|
58 |
% |
|||||||
Total deposits |
|
18,733,381 |
|
|
19,163,801 |
|
|
13,649,964 |
|
|
(430,420 |
) |
(2 |
)% |
|
5,083,417 |
|
37 |
% |
|||||||
Borrowed funds: |
|
|
|
|
|
|
|
|||||||||||||||||||
Federal Home Loan Bank advances |
|
384,215 |
|
|
13,560 |
|
|
14,172 |
|
|
370,655 |
|
2733 |
% |
|
370,043 |
|
2611 |
% |
|||||||
Escrow deposits of borrowers |
|
21,853 |
|
|
19,456 |
|
|
15,900 |
|
|
2,397 |
|
12 |
% |
|
5,953 |
|
37 |
% |
|||||||
Interest rate swap collateral funds |
|
16,650 |
|
|
10,100 |
|
|
— |
|
|
6,550 |
|
65 |
% |
|
16,650 |
|
— |
% |
|||||||
Total borrowed funds |
|
422,718 |
|
|
43,116 |
|
|
30,072 |
|
|
379,602 |
|
880 |
% |
|
392,646 |
|
1306 |
% |
|||||||
Other liabilities |
|
470,671 |
|
|
425,535 |
|
|
351,895 |
|
|
45,136 |
|
11 |
% |
|
118,776 |
|
34 |
% |
|||||||
Total liabilities |
|
19,626,770 |
|
|
19,632,452 |
|
|
14,031,931 |
|
|
(5,682 |
) |
— |
% |
|
5,594,839 |
|
40 |
% |
|||||||
Shareholders' equity: |
|
|
|
|
|
|
|
|||||||||||||||||||
Common shares |
|
1,778 |
|
|
1,793 |
|
|
1,868 |
|
|
(15 |
) |
(1 |
)% |
|
(90 |
) |
(5 |
)% |
|||||||
Additional paid-in capital |
|
1,676,396 |
|
|
1,700,495 |
|
|
1,857,165 |
|
|
(24,099 |
) |
(1 |
)% |
|
(180,769 |
) |
(10 |
)% |
|||||||
Unallocated common shares held by the employee stock ownership plan ("ESOP") |
|
(138,950 |
) |
|
(140,203 |
) |
|
(143,966 |
) |
|
1,253 |
|
(1 |
)% |
|
5,016 |
|
(3 |
)% |
|||||||
Retained earnings |
|
1,855,757 |
|
|
1,817,474 |
|
|
1,747,300 |
|
|
38,283 |
|
2 |
% |
|
108,457 |
|
6 |
% |
|||||||
Accumulated other comprehensive income ("AOCI"), net of tax |
|
(978,818 |
) |
|
(661,163 |
) |
|
(33,075 |
) |
|
(317,655 |
) |
48 |
% |
|
(945,743 |
) |
2859 |
% |
|||||||
Total shareholders' equity |
|
2,416,163 |
|
|
2,718,396 |
|
|
3,429,292 |
|
|
(302,233 |
) |
(11 |
)% |
|
(1,013,129 |
) |
(30 |
)% |
|||||||
Total liabilities and shareholders' equity |
$ |
22,042,933 |
|
$ |
22,350,848 |
|
$ |
17,461,223 |
|
$ |
(307,915 |
) |
(1 |
)% |
$ |
4,581,710 |
|
26 |
% |
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||
(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 Sep 30, 2022 change from three months ended |
||||||||||||||||||||||||
(Unaudited, dollars in thousands, except per-share data) |
Sep 30, 2022 |
Jun 30, 2022 |
Sep 30, 2021 |
Jun 30, 2022 |
Sep 30, 2021 |
|||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||
Interest and dividend income: |
|
|
|
△ $ |
△ % |
△ $ |
△ % |
|||||||||||||||||||
Interest and fees on loans |
$ |
124,992 |
|
$ |
107,236 |
|
$ |
86,735 |
|
$ |
17,756 |
|
17 |
% |
$ |
38,257 |
|
44 |
% |
|||||||
Taxable interest and dividends on securities |
|
29,280 |
|
|
31,121 |
|
|
14,314 |
|
|
(1,841 |
) |
(6 |
)% |
|
14,966 |
|
105 |
% |
|||||||
Non-taxable interest and dividends on securities |
|
1,917 |
|
|
1,862 |
|
|
1,848 |
|
|
55 |
|
3 |
% |
|
69 |
|
4 |
% |
|||||||
Interest on federal funds sold and other short-term investments |
|
1,638 |
|
|
652 |
|
|
571 |
|
|
986 |
|
151 |
% |
|
1,067 |
|
187 |
% |
|||||||
Total interest and dividend income |
|
157,827 |
|
|
140,871 |
|
|
103,468 |
|
|
16,956 |
|
12 |
% |
|
54,359 |
|
53 |
% |
|||||||
Interest expense: |
|
|
|
|
|
|
|
|||||||||||||||||||
Interest on deposits |
|
4,781 |
|
|
3,061 |
|
|
736 |
|
|
1,720 |
|
56 |
% |
|
4,045 |
|
550 |
% |
|||||||
Interest on borrowings |
|
867 |
|
|
53 |
|
|
41 |
|
|
814 |
|
1536 |
% |
|
826 |
|
2015 |
% |
|||||||
Total interest expense |
|
5,648 |
|
|
3,114 |
|
|
777 |
|
|
2,534 |
|
81 |
% |
|
4,871 |
|
627 |
% |
|||||||
Net interest income |
|
152,179 |
|
|
137,757 |
|
|
102,691 |
|
|
14,422 |
|
10 |
% |
|
49,488 |
|
48 |
% |
|||||||
Provision for (release of) allowance for loan losses |
|
6,480 |
|
|
1,050 |
|
|
(1,488 |
) |
|
5,430 |
|
517 |
% |
|
7,968 |
|
(535 |
)% |
|||||||
Net interest income after provision for (release of) allowance for loan losses |
|
145,699 |
|
|
136,707 |
|
|
104,179 |
|
|
8,992 |
|
7 |
% |
|
41,520 |
|
40 |
% |
|||||||
Noninterest income: |
|
|
|
|
|
|
|
|||||||||||||||||||
Insurance commissions |
|
23,788 |
|
|
24,682 |
|
|
21,956 |
|
|
(894 |
) |
(4 |
)% |
|
1,832 |
|
8 |
% |
|||||||
Service charges on deposit accounts |
|
6,708 |
|
|
8,313 |
|
|
5,935 |
|
|
(1,605 |
) |
(19 |
)% |
|
773 |
|
13 |
% |
|||||||
Trust and investment advisory fees |
|
5,832 |
|
|
5,994 |
|
|
6,310 |
|
|
(162 |
) |
(3 |
)% |
|
(478 |
) |
(8 |
)% |
|||||||
Debit card processing fees |
|
3,249 |
|
|
3,223 |
|
|
3,030 |
|
|
26 |
|
1 |
% |
|
219 |
|
7 |
% |
|||||||
Interest rate swap income |
|
1,562 |
|
|
1,593 |
|
|
881 |
|
|
(31 |
) |
(2 |
)% |
|
681 |
|
77 |
% |
|||||||
Losses from investments held in rabbi trusts |
|
(2,248 |
) |
|
(7,316 |
) |
|
(289 |
) |
|
5,068 |
|
(69 |
)% |
|
(1,959 |
) |
678 |
% |
|||||||
Gains on sales of mortgage loans held for sale, net |
|
22 |
|
|
49 |
|
|
717 |
|
|
(27 |
) |
(55 |
)% |
|
(695 |
) |
(97 |
)% |
|||||||
(Losses) gains on sales of securities available for sale, net |
|
(198 |
) |
|
(104 |
) |
|
1 |
|
|
(94 |
) |
90 |
% |
|
(199 |
) |
(19900 |
)% |
|||||||
Other |
|
4,638 |
|
|
5,443 |
|
|
4,668 |
|
|
(805 |
) |
(15 |
)% |
|
(30 |
) |
(1 |
)% |
|||||||
Total noninterest income |
|
43,353 |
|
|
41,877 |
|
|
43,209 |
|
|
1,476 |
|
4 |
% |
|
144 |
|
— |
% |
|||||||
Noninterest expense: |
|
|
|
|
|
|
|
|||||||||||||||||||
Salaries and employee benefits |
|
78,060 |
|
|
72,996 |
|
|
66,238 |
|
|
5,064 |
|
7 |
% |
|
11,822 |
|
18 |
% |
|||||||
Office occupancy and equipment |
|
9,703 |
|
|
9,888 |
|
|
7,960 |
|
|
(185 |
) |
(2 |
)% |
|
1,743 |
|
22 |
% |
|||||||
Data processing |
|
13,294 |
|
|
14,345 |
|
|
12,191 |
|
|
(1,051 |
) |
(7 |
)% |
|
1,103 |
|
9 |
% |
|||||||
Professional services |
|
5,826 |
|
|
4,034 |
|
|
4,024 |
|
|
1,792 |
|
44 |
% |
|
1,802 |
|
45 |
% |
|||||||
Marketing |
|
2,219 |
|
|
2,651 |
|
|
1,598 |
|
|
(432 |
) |
(16 |
)% |
|
621 |
|
39 |
% |
|||||||
Loan expenses |
|
1,152 |
|
|
1,124 |
|
|
1,586 |
|
|
28 |
|
2 |
% |
|
(434 |
) |
(27 |
)% |
|||||||
Federal Deposit Insurance Corporation ("FDIC") insurance |
|
1,578 |
|
|
1,720 |
|
|
1,056 |
|
|
(142 |
) |
(8 |
)% |
|
522 |
|
49 |
% |
|||||||
Amortization of intangible assets |
|
1,033 |
|
|
907 |
|
|
629 |
|
|
126 |
|
14 |
% |
|
404 |
|
64 |
% |
|||||||
Other |
|
3,975 |
|
|
3,474 |
|
|
3,688 |
|
|
501 |
|
14 |
% |
|
287 |
|
8 |
% |
|||||||
Total noninterest expense |
|
116,840 |
|
|
111,139 |
|
|
98,970 |
|
|
5,701 |
|
5 |
% |
|
17,870 |
|
18 |
% |
|||||||
Income before income tax expense |
|
72,212 |
|
|
67,445 |
|
|
48,418 |
|
|
4,767 |
|
7 |
% |
|
23,794 |
|
49 |
% |
|||||||
Income tax expense |
|
17,435 |
|
|
16,273 |
|
|
11,312 |
|
|
1,162 |
|
7 |
% |
|
6,123 |
|
54 |
% |
|||||||
Net income |
$ |
54,777 |
|
$ |
51,172 |
|
$ |
37,106 |
|
$ |
3,605 |
|
7 |
% |
$ |
17,671 |
|
48 |
% |
|||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||
Share data: |
|
|
|
|
|
|
|
|||||||||||||||||||
Earnings per share, basic |
$ |
0.33 |
|
$ |
0.31 |
|
$ |
0.22 |
|
|
|
|
|
|||||||||||||
Earnings per share, diluted |
$ |
0.33 |
|
$ |
0.31 |
|
$ |
0.22 |
|
|
|
|
|
EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME |
|||||||||||||||
|
Nine months ended |
|
|
||||||||||||
(Unaudited, dollars in thousands, except per-share data) |
Sep 30, 2022 |
Sep 30, 2021 |
Change |
||||||||||||
|
|
|
|
|
|||||||||||
Interest and dividend income: |
|
|
△ $ |
△ % |
|||||||||||
Interest and fees on loans |
$ |
333,595 |
|
$ |
266,310 |
|
$ |
67,285 |
|
25 |
% |
||||
Taxable interest and dividends on securities |
|
88,277 |
|
|
36,977 |
|
|
51,300 |
|
139 |
% |
||||
Non-taxable interest and dividends on securities |
|
5,585 |
|
|
5,561 |
|
|
24 |
|
— |
% |
||||
Interest on federal funds sold and other short-term investments |
|
2,726 |
|
|
1,434 |
|
|
1,292 |
|
90 |
% |
||||
Total interest and dividend income |
|
430,183 |
|
|
310,282 |
|
|
119,901 |
|
39 |
% |
||||
Interest expense: |
|
|
|
|
|||||||||||
Interest on deposits |
|
11,164 |
|
|
2,769 |
|
|
8,395 |
|
303 |
% |
||||
Interest on borrowings |
|
959 |
|
|
123 |
|
|
836 |
|
680 |
% |
||||
Total interest expense |
|
12,123 |
|
|
2,892 |
|
|
9,231 |
|
319 |
% |
||||
Net interest income |
|
418,060 |
|
|
307,390 |
|
|
110,670 |
|
36 |
% |
||||
Provision for (release of) allowance for loan losses |
|
7,045 |
|
|
(5,368 |
) |
|
12,413 |
|
(231 |
)% |
||||
Net interest income after provision for (release of) release of allowance for loan losses |
|
411,015 |
|
|
312,758 |
|
|
98,257 |
|
31 |
% |
||||
Noninterest income: |
|
|
|
|
|||||||||||
Insurance commissions |
|
77,183 |
|
|
73,767 |
|
|
3,416 |
|
5 |
% |
||||
Service charges on deposit accounts |
|
23,558 |
|
|
17,010 |
|
|
6,548 |
|
38 |
% |
||||
Trust and investment advisory fees |
|
17,967 |
|
|
18,047 |
|
|
(80 |
) |
— |
% |
||||
Debit card processing fees |
|
9,417 |
|
|
8,949 |
|
|
468 |
|
5 |
% |
||||
Interest rate swap income |
|
6,087 |
|
|
5,122 |
|
|
965 |
|
19 |
% |
||||
(Losses) income from investments held in rabbi trusts |
|
(13,997 |
) |
|
5,773 |
|
|
(19,770 |
) |
(342 |
)% |
||||
Gains on sales of mortgage loans held for sale, net |
|
240 |
|
|
3,044 |
|
|
(2,804 |
) |
(92 |
)% |
||||
(Losses) gains on sales of securities available for sale, net |
|
(2,474 |
) |
|
1,166 |
|
|
(3,640 |
) |
(312 |
)% |
||||
Other |
|
13,664 |
|
|
11,276 |
|
|
2,388 |
|
21 |
% |
||||
Total noninterest income |
|
131,645 |
|
|
144,154 |
|
|
(12,509 |
) |
(9 |
)% |
||||
Noninterest expense: |
|
|
|
|
|||||||||||
Salaries and employee benefits |
|
220,582 |
|
|
199,554 |
|
|
21,028 |
|
11 |
% |
||||
Office occupancy and equipment |
|
31,205 |
|
|
24,271 |
|
|
6,934 |
|
29 |
% |
||||
Data processing |
|
42,959 |
|
|
37,892 |
|
|
5,067 |
|
13 |
% |
||||
Professional services |
|
14,561 |
|
|
14,611 |
|
|
(50 |
) |
— |
% |
||||
Marketing |
|
6,444 |
|
|
6,786 |
|
|
(342 |
) |
(5 |
)% |
||||
Loan expenses |
|
3,444 |
|
|
5,287 |
|
|
(1,843 |
) |
(35 |
)% |
||||
Federal Deposit Insurance Corporation ("FDIC") insurance |
|
4,710 |
|
|
2,989 |
|
|
1,721 |
|
58 |
% |
||||
Amortization of intangible assets |
|
2,767 |
|
|
1,786 |
|
|
981 |
|
55 |
% |
||||
Other |
|
10,173 |
|
|
7,178 |
|
|
2,995 |
|
42 |
% |
||||
Total noninterest expense |
|
336,845 |
|
|
300,354 |
|
|
36,491 |
|
12 |
% |
||||
Income before income tax expense |
|
205,815 |
|
|
156,558 |
|
|
49,257 |
|
31 |
% |
||||
Income tax expense |
|
48,350 |
|
|
36,980 |
|
|
11,370 |
|
31 |
% |
||||
Net income |
$ |
157,465 |
|
$ |
119,578 |
|
$ |
37,887 |
|
32 |
% |
||||
|
|
|
|
|
|||||||||||
Share data: |
|
|
|
|
|||||||||||
Weighted average common shares outstanding, basic (1) |
|
166,682,222 |
|
|
172,174,469 |
|
|
(5,492,247 |
) |
(3 |
)% |
||||
Weighted average common shares outstanding, diluted (1) |
|
166,867,643 |
|
|
172,174,469 |
|
|
(5,306,826 |
) |
(3 |
)% |
||||
Earnings per share, basic |
$ |
0.94 |
|
$ |
0.69 |
|
$ |
0.25 |
|
36 |
% |
||||
Earnings per share, diluted |
$ |
0.94 |
|
$ |
0.69 |
|
$ |
0.25 |
|
36 |
% |
||||
|
|
|
|
|
|||||||||||
(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 |
||||||||||||||||||||||||||
|
Sep 30, 2022 |
|
Jun 30, 2022 |
|
Sep 30, 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 |
$ |
9,138,029 |
|
$ |
96,270 |
|
4.18 |
% |
|
$ |
8,944,652 |
|
$ |
83,586 |
|
3.75 |
% |
|
$ |
6,995,556 |
|
$ |
67,276 |
|
3.82 |
% |
|
Residential |
|
2,043,219 |
|
|
15,811 |
|
3.07 |
% |
|
|
1,960,014 |
|
|
14,683 |
|
3.00 |
% |
|
|
1,477,891 |
|
|
11,479 |
|
3.08 |
% |
|
Consumer |
|
1,341,528 |
|
|
16,072 |
|
4.75 |
% |
|
|
1,309,864 |
|
|
11,494 |
|
3.52 |
% |
|
|
1,055,075 |
|
|
8,803 |
|
3.31 |
% |
|
Total loans |
|
12,522,776 |
|
|
128,153 |
|
4.06 |
% |
|
|
12,214,530 |
|
|
109,763 |
|
3.60 |
% |
|
|
9,528,522 |
|
|
87,558 |
|
3.65 |
% |
|
Investment securities |
|
8,716,105 |
|
|
31,708 |
|
1.44 |
% |
|
|
8,883,710 |
|
|
33,479 |
|
1.51 |
% |
|
|
5,249,742 |
|
|
16,655 |
|
1.26 |
% |
|
Federal funds sold and other short-term investments |
|
282,629 |
|
|
1,638 |
|
2.30 |
% |
|
|
345,731 |
|
|
652 |
|
0.76 |
% |
|
|
1,503,919 |
|
|
571 |
|
0.15 |
% |
|
Total interest-earning assets |
|
21,521,510 |
|
|
161,499 |
|
2.98 |
% |
|
|
21,443,971 |
|
|
143,894 |
|
2.69 |
% |
|
|
16,282,183 |
|
|
104,784 |
|
2.55 |
% |
|
Non-interest-earning assets |
|
911,025 |
|
|
|
|
|
|
962,734 |
|
|
|
|
|
|
1,141,168 |
|
|
|
|
|||||||
Total assets |
$ |
22,432,535 |
|
|
|
|
|
$ |
22,406,705 |
|
|
|
|
|
$ |
17,423,351 |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Savings |
$ |
2,021,125 |
|
$ |
51 |
|
0.01 |
% |
|
$ |
2,041,495 |
|
$ |
51 |
|
0.01 |
% |
|
$ |
1,441,385 |
|
$ |
36 |
|
0.01 |
% |
|
Interest checking |
|
5,211,914 |
|
|
2,686 |
|
0.20 |
% |
|
|
4,877,256 |
|
|
2,061 |
|
0.17 |
% |
|
|
2,687,196 |
|
|
244 |
|
0.04 |
% |
|
Money market |
|
4,824,452 |
|
|
1,893 |
|
0.16 |
% |
|
|
5,069,609 |
|
|
745 |
|
0.06 |
% |
|
|
3,762,855 |
|
|
360 |
|
0.04 |
% |
|
Time deposits |
|
380,560 |
|
|
151 |
|
0.16 |
% |
|
|
426,923 |
|
|
204 |
|
0.19 |
% |
|
|
233,145 |
|
|
96 |
|
0.16 |
% |
|
Total interest-bearing deposits |
|
12,438,051 |
|
|
4,781 |
|
0.15 |
% |
|
|
12,415,283 |
|
|
3,061 |
|
0.10 |
% |
|
|
8,124,581 |
|
|
736 |
|
0.04 |
% |
|
Borrowings |
|
157,686 |
|
|
867 |
|
2.18 |
% |
|
|
35,330 |
|
|
53 |
|
0.60 |
% |
|
|
26,074 |
|
|
41 |
|
0.62 |
% |
|
Total interest-bearing liabilities |
|
12,595,737 |
|
|
5,648 |
|
0.18 |
% |
|
|
12,450,613 |
|
|
3,114 |
|
0.10 |
% |
|
|
8,150,655 |
|
|
777 |
|
0.04 |
% |
|
Demand deposit accounts |
|
6,614,467 |
|
|
|
|
|
|
6,661,920 |
|
|
|
|
|
|
5,471,906 |
|
|
|
|
|||||||
Other noninterest-bearing liabilities |
|
445,640 |
|
|
|
|
|
|
428,373 |
|
|
|
|
|
|
350,111 |
|
|
|
|
|||||||
Total liabilities |
|
19,655,844 |
|
|
|
|
|
|
19,540,906 |
|
|
|
|
|
|
13,972,672 |
|
|
|
|
|||||||
Shareholders' equity |
|
2,776,691 |
|
|
|
|
|
|
2,865,799 |
|
|
|
|
|
|
3,450,679 |
|
|
|
|
|||||||
Total liabilities and shareholders' equity |
$ |
22,432,535 |
|
|
|
|
|
$ |
22,406,705 |
|
|
|
|
|
$ |
17,423,351 |
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Net interest income - FTE |
|
|
$ |
155,851 |
|
|
|
|
|
$ |
140,780 |
|
|
|
|
|
$ |
104,007 |
|
|
|||||||
Net interest rate spread (2) |
|
|
|
|
2.80 |
% |
|
|
|
|
|
2.59 |
% |
|
|
|
|
|
2.51 |
% |
|||||||
Net interest-earning assets (3) |
$ |
8,925,773 |
|
|
|
|
|
$ |
8,993,358 |
|
|
|
|
|
$ |
8,131,528 |
|
|
|
|
|||||||
Net interest margin - FTE (4) |
|
|
|
|
2.87 |
% |
|
|
|
|
|
2.63 |
% |
|
|
|
|
|
2.53 |
% |
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
(1) Includes non-accrual loans. |
|||||||||||||||||||||||||||
(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. |
|||||||||||||||||||||||||||
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. |
|||||||||||||||||||||||||||
(4) Net interest margin represents net interest income divided by average total interest-earning assets. |
|||||||||||||||||||||||||||
(5) Presented on an annualized basis. |
EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS |
||||||||||||||||||
|
As of and for the nine months ended |
|||||||||||||||||
|
Sep 30, 2022 |
|
Sep 30, 2021 |
|||||||||||||||
(Unaudited, dollars in thousands) |
Avg. Balance |
|
Interest |
|
Yield / Cost (5) |
|
Avg. Balance |
|
Interest |
|
Yield / Cost (5) |
|||||||
Interest-earning assets: |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Loans (1): |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Commercial |
$ |
9,019,196 |
|
$ |
258,082 |
|
3.83 |
% |
|
$ |
7,203,903 |
|
$ |
208,228 |
|
3.86 |
% |
|
Residential |
|
1,980,630 |
|
|
44,966 |
|
3.04 |
% |
|
|
1,435,006 |
|
|
34,150 |
|
3.18 |
% |
|
Consumer |
|
1,315,136 |
|
|
38,016 |
|
3.86 |
% |
|
|
1,074,039 |
|
|
26,337 |
|
3.28 |
% |
|
Total loans |
|
12,314,962 |
|
|
341,064 |
|
3.70 |
% |
|
|
9,712,948 |
|
|
268,715 |
|
3.70 |
% |
|
Total investment securities |
|
8,749,257 |
|
|
95,349 |
|
1.46 |
% |
|
|
4,414,582 |
|
|
44,015 |
|
1.33 |
% |
|
Federal funds sold and other short-term investments |
|
541,285 |
|
|
2,726 |
|
0.67 |
% |
|
|
1,619,873 |
|
|
1,434 |
|
0.12 |
% |
|
Total interest-earning assets |
|
21,605,504 |
|
|
439,139 |
|
2.72 |
% |
|
|
15,747,403 |
|
|
314,164 |
|
2.67 |
% |
|
Non-interest-earning assets |
|
1,099,406 |
|
|
|
|
|
|
1,106,967 |
|
|
|
|
|||||
Total assets |
$ |
22,704,910 |
|
|
|
|
|
$ |
16,854,370 |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Interest-bearing liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Deposits: |
|
|
|
|
|
|
|
|
|
|
|
|||||||
Savings |
$ |
2,046,254 |
|
$ |
153 |
|
0.01 |
% |
|
$ |
1,376,243 |
|
$ |
169 |
|
0.02 |
% |
|
Interest checking |
|
4,897,321 |
|
|
6,778 |
|
0.19 |
% |
|
|
2,541,113 |
|
|
730 |
|
0.04 |
% |
|
Money market |
|
5,151,384 |
|
|
3,559 |
|
0.09 |
% |
|
|
3,576,648 |
|
|
1,553 |
|
0.06 |
% |
|
Time deposits |
|
429,401 |
|
|
674 |
|
0.21 |
% |
|
|
243,621 |
|
|
317 |
|
0.17 |
% |
|
Total interest-bearing deposits |
|
12,524,360 |
|
|
11,164 |
|
0.12 |
% |
|
|
7,737,625 |
|
|
2,769 |
|
0.05 |
% |
|
Borrowings |
|
75,027 |
|
|
959 |
|
1.71 |
% |
|
|
25,582 |
|
|
123 |
|
0.64 |
% |
|
Total interest-bearing liabilities |
|
12,599,387 |
|
|
12,123 |
|
0.13 |
% |
|
|
7,763,207 |
|
|
2,892 |
|
0.05 |
% |
|
Demand deposit accounts |
|
6,698,640 |
|
|
|
|
|
|
5,318,903 |
|
|
|
|
|||||
Other noninterest-bearing liabilities |
|
436,724 |
|
|
|
|
|
|
347,237 |
|
|
|
|
|||||
Total liabilities |
|
19,734,751 |
|
|
|
|
|
|
13,429,347 |
|
|
|
|
|||||
Shareholders' equity |
|
2,970,159 |
|
|
|
|
|
|
3,425,023 |
|
|
|
|
|||||
Total liabilities and shareholders' equity |
$ |
22,704,910 |
|
|
|
|
|
$ |
16,854,370 |
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
Net interest income - FTE |
|
|
$ |
427,016 |
|
|
|
|
|
$ |
311,272 |
|
|
|||||
Net interest rate spread (2) |
|
|
|
|
2.59 |
% |
|
|
|
|
|
2.62 |
% |
|||||
Net interest-earning assets (3) |
$ |
9,006,117 |
|
|
|
|
|
$ |
7,984,196 |
|
|
|
|
|||||
Net interest margin - FTE (4) |
|
|
|
|
2.64 |
% |
|
|
|
|
|
2.64 |
% |
|||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||
(1) Includes non-accrual loans. |
||||||||||||||||||
(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. |
||||||||||||||||||
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. |
||||||||||||||||||
(4) Net interest margin represents net interest income divided by average total interest-earning assets. |
||||||||||||||||||
(5) Presented on an annualized basis. |
EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - NON-PERFORMING ASSETS (1) |
||||||||||||||||||||
|
As of |
|||||||||||||||||||
|
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
|||||||||||||||
(Unaudited, dollars in thousands) |
|
|
|
|
|
|||||||||||||||
Non-accrual loans: |
|
|
|
|
|
|||||||||||||||
Commercial |
$ |
19,886 |
|
$ |
43,628 |
|
$ |
17,919 |
|
$ |
20,630 |
|
$ |
29,166 |
|
|||||
Residential |
|
8,513 |
|
|
9,486 |
|
|
8,256 |
|
|
6,681 |
|
|
7,185 |
|
|||||
Consumer |
|
5,555 |
|
|
6,766 |
|
|
7,646 |
|
|
5,682 |
|
|
4,262 |
|
|||||
Total non-accrual loans |
|
33,954 |
|
|
59,880 |
|
|
33,821 |
|
|
32,993 |
|
|
40,613 |
|
|||||
Total accruing loans past due 90 days or more (2): |
|
— |
|
|
— |
|
|
— |
|
|
1,990 |
|
|
1,458 |
|
|||||
Total non-performing loans |
|
33,954 |
|
|
59,880 |
|
|
33,821 |
|
|
34,983 |
|
|
42,071 |
|
|||||
Other real estate owned |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
Other non-performing assets: |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
Total non-performing assets |
$ |
33,954 |
|
$ |
59,880 |
|
$ |
33,821 |
|
$ |
34,983 |
|
$ |
42,071 |
|
|||||
Total accruing troubled debt restructured loans |
$ |
36,275 |
|
$ |
33,518 |
|
$ |
32,016 |
|
$ |
33,336 |
|
$ |
34,723 |
|
|||||
Total non-performing loans to total loans |
|
0.26 |
% |
|
0.48 |
% |
|
0.28 |
% |
|
0.29 |
% |
|
0.44 |
% |
|||||
Total non-performing assets to total assets |
|
0.15 |
% |
|
0.27 |
% |
|
0.15 |
% |
|
0.15 |
% |
|
0.24 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
(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 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 |
|||||||||||||||||||
|
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
|||||||||||||||
(Unaudited, dollars in thousands) |
|
|
|
|
|
|||||||||||||||
Average total loans |
$ |
12,521,426 |
|
$ |
12,213,706 |
|
$ |
12,203,212 |
|
$ |
10,944,091 |
|
$ |
9,526,766 |
|
|||||
Allowance for loan losses, beginning of the period |
|
125,531 |
|
|
124,166 |
|
|
97,787 |
|
|
103,398 |
|
|
105,637 |
|
|||||
Total cumulative effect of change in accounting principle (1): |
|
— |
|
|
— |
|
|
27,086 |
|
|
— |
|
|
— |
|
|||||
Charged-off loans: |
|
|
|
|
|
|||||||||||||||
Commercial and industrial |
|
11 |
|
|
1 |
|
|
1 |
|
|
1,008 |
|
|
— |
|
|||||
Commercial real estate |
|
— |
|
|
— |
|
|
— |
|
|
5 |
|
|
8 |
|
|||||
Commercial construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
Business banking |
|
369 |
|
|
608 |
|
|
945 |
|
|
1,002 |
|
|
867 |
|
|||||
Residential real estate |
|
— |
|
|
— |
|
|
— |
|
|
35 |
|
|
— |
|
|||||
Consumer home equity |
|
— |
|
|
— |
|
|
— |
|
|
24 |
|
|
— |
|
|||||
Other consumer |
|
603 |
|
|
490 |
|
|
661 |
|
|
666 |
|
|
742 |
|
|||||
Total charged-off loans |
|
983 |
|
|
1,099 |
|
|
1,607 |
|
|
2,740 |
|
|
1,617 |
|
|||||
Recoveries on loans previously charged-off: |
|
|
|
|
|
|||||||||||||||
Commercial and industrial |
|
126 |
|
|
698 |
|
|
250 |
|
|
873 |
|
|
40 |
|
|||||
Commercial real estate |
|
3 |
|
|
36 |
|
|
14 |
|
|
— |
|
|
— |
|
|||||
Commercial construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
Business banking |
|
286 |
|
|
464 |
|
|
928 |
|
|
399 |
|
|
469 |
|
|||||
Residential real estate |
|
56 |
|
|
14 |
|
|
10 |
|
|
7 |
|
|
88 |
|
|||||
Consumer home equity |
|
6 |
|
|
6 |
|
|
4 |
|
|
48 |
|
|
63 |
|
|||||
Other consumer |
|
158 |
|
|
196 |
|
|
179 |
|
|
120 |
|
|
206 |
|
|||||
Total recoveries |
|
635 |
|
|
1,414 |
|
|
1,385 |
|
|
1,447 |
|
|
866 |
|
|||||
Net loans charged-off (recoveries): |
|
|
|
|
|
|||||||||||||||
Commercial and industrial |
|
(115 |
) |
|
(697 |
) |
|
(249 |
) |
|
135 |
|
|
(40 |
) |
|||||
Commercial real estate |
|
(3 |
) |
|
(36 |
) |
|
(14 |
) |
|
5 |
|
|
8 |
|
|||||
Commercial construction |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|||||
Business banking |
|
83 |
|
|
144 |
|
|
17 |
|
|
603 |
|
|
398 |
|
|||||
Residential real estate |
|
(56 |
) |
|
(14 |
) |
|
(10 |
) |
|
28 |
|
|
(88 |
) |
|||||
Consumer home equity |
|
(6 |
) |
|
(6 |
) |
|
(4 |
) |
|
(24 |
) |
|
(63 |
) |
|||||
Other consumer |
|
445 |
|
|
294 |
|
|
482 |
|
|
546 |
|
|
536 |
|
|||||
Total net loans charged-off (recoveries) |
|
348 |
|
|
(315 |
) |
|
222 |
|
|
1,293 |
|
|
751 |
|
|||||
Provision for (release of) allowance for loan losses |
|
6,480 |
|
|
1,050 |
|
|
(485 |
) |
|
(4,318 |
) |
|
(1,488 |
) |
|||||
Total allowance for loan losses, end of period |
$ |
131,663 |
|
$ |
125,531 |
|
$ |
124,166 |
|
$ |
97,787 |
|
$ |
103,398 |
|
|||||
Net charge-offs (recoveries) to average total loans outstanding during this period (2) |
|
0.01 |
% |
|
(0.01 |
)% |
|
0.01 |
% |
|
0.05 |
% |
|
0.03 |
% |
|||||
Allowance for loan losses as a percent of total loans |
|
1.02 |
% |
|
1.01 |
% |
|
1.02 |
% |
|
0.80 |
% |
|
1.09 |
% |
|||||
Allowance for loan losses as a percent of nonperforming loans |
|
387.77 |
% |
|
209.64 |
% |
|
367.13 |
% |
|
279.53 |
% |
|
245.77 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
|
||||||||||||||||||||
(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) |
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
|||||||||||||||
|
|
|
|
|
|
|||||||||||||||
Net income (GAAP) |
$ |
54,777 |
|
$ |
51,172 |
|
$ |
51,516 |
|
$ |
35,087 |
|
$ |
37,106 |
|
|||||
Add: |
|
|
|
|
|
|||||||||||||||
Noninterest income components: |
|
|
|
|
|
|||||||||||||||
Losses (income) from investments held in rabbi trusts |
|
2,248 |
|
|
7,316 |
|
|
4,433 |
|
|
(4,444 |
) |
|
289 |
|
|||||
Losses (gains) on sales of securities available for sale, net |
|
198 |
|
|
104 |
|
|
2,172 |
|
|
— |
|
|
(1 |
) |
|||||
(Gains) losses on sales of other assets |
|
(501 |
) |
|
(1,251 |
) |
|
274 |
|
|
(34 |
) |
|
(490 |
) |
|||||
Noninterest expense components: |
|
|
|
|
|
|||||||||||||||
Rabbi trust employee benefit (income) expense |
|
(867 |
) |
|
(3,310 |
) |
|
(2,087 |
) |
|
2,519 |
|
|
(53 |
) |
|||||
Impairment charge on tax credit investments |
|
— |
|
|
— |
|
|
— |
|
|
116 |
|
|
1,133 |
|
|||||
Gain on sale of OREO |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(87 |
) |
|||||
Merger and acquisition expenses |
|
271 |
|
|
— |
|
|
34 |
|
|
30,652 |
|
|
740 |
|
|||||
Total impact of non-GAAP adjustments |
|
1,349 |
|
|
2,859 |
|
|
4,826 |
|
|
28,809 |
|
|
1,531 |
|
|||||
Less net tax benefit associated with non-GAAP adjustments (1) |
|
384 |
|
|
1,513 |
|
|
1,235 |
|
|
19,036 |
|
|
1,246 |
|
|||||
Non-GAAP adjustments, net of tax |
$ |
965 |
|
$ |
1,346 |
|
$ |
3,591 |
|
$ |
9,773 |
|
$ |
285 |
|
|||||
Operating net income (non-GAAP) |
$ |
55,742 |
|
$ |
52,518 |
|
$ |
55,107 |
|
$ |
44,860 |
|
$ |
37,391 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Weighted average common shares outstanding during the period (2): |
|
|
|
|
|
|||||||||||||||
Basic |
|
163,718,962 |
|
|
166,533,920 |
|
|
169,857,950 |
|
|
172,246,799 |
|
|
172,298,615 |
|
|||||
Diluted |
|
164,029,649 |
|
|
166,573,627 |
|
|
169,968,156 |
|
|
172,481,829 |
|
|
172,298,615 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Earnings per share, basic |
$ |
0.33 |
|
$ |
0.31 |
|
$ |
0.30 |
|
$ |
0.20 |
|
$ |
0.22 |
|
|||||
Earnings per share, diluted |
$ |
0.33 |
|
$ |
0.31 |
|
$ |
0.30 |
|
$ |
0.20 |
|
$ |
0.22 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Operating earnings per share, basic (non-GAAP) |
$ |
0.34 |
|
$ |
0.32 |
|
$ |
0.32 |
|
$ |
0.26 |
|
$ |
0.22 |
|
|||||
Operating earnings per share, diluted (non-GAAP) |
$ |
0.34 |
|
$ |
0.32 |
|
$ |
0.32 |
|
$ |
0.26 |
|
$ |
0.22 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Return on average assets (3) |
|
0.97 |
% |
|
0.92 |
% |
|
0.90 |
% |
|
0.67 |
% |
|
0.84 |
% |
|||||
Add: |
|
|
|
|
|
|||||||||||||||
Losses (income) from investments held in rabbi trusts (3) |
|
0.04 |
% |
|
0.13 |
% |
|
0.08 |
% |
|
(0.08 |
)% |
|
0.01 |
% |
|||||
Losses (gains) on sales of securities available for sale, net (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.04 |
% |
|
0.00 |
% |
|
0.00 |
% |
|||||
(Gains) losses on sales of other assets (3) |
|
(0.01 |
)% |
|
(0.02 |
)% |
|
0.00 |
% |
|
0.00 |
% |
|
(0.01 |
)% |
|||||
Rabbi trust employee benefit (income) expense (3) |
|
(0.02 |
)% |
|
(0.06 |
)% |
|
(0.04 |
)% |
|
0.05 |
% |
|
0.00 |
% |
|||||
Impairment charge on tax credit investments (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.03 |
% |
|||||
Gain on sale of OREO (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|||||
Merger and acquisition expenses (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.58 |
% |
|
0.02 |
% |
|||||
Less net tax benefit associated with non-GAAP adjustments (1) (3) |
|
0.01 |
% |
|
0.03 |
% |
|
0.02 |
% |
|
0.36 |
% |
|
0.03 |
% |
|||||
Operating return on average assets (non-GAAP) (3) |
|
0.97 |
% |
|
0.94 |
% |
|
0.96 |
% |
|
0.86 |
% |
|
0.86 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
Return on average shareholders' equity (3) |
|
7.83 |
% |
|
7.16 |
% |
|
6.38 |
% |
|
4.07 |
% |
|
4.27 |
% |
|||||
Add: |
|
|
|
|
|
|||||||||||||||
Losses (income) from investments held in rabbi trusts (3) |
|
0.32 |
% |
|
1.02 |
% |
|
0.55 |
% |
|
(0.52 |
)% |
|
0.03 |
% |
|||||
Losses (gains) on sales of securities available for sale, net (3) |
|
0.03 |
% |
|
0.01 |
% |
|
0.27 |
% |
|
0.00 |
% |
|
0.00 |
% |
|||||
(Gains) losses on sales of other assets (3) |
|
(0.07 |
)% |
|
(0.18 |
)% |
|
0.03 |
% |
|
0.00 |
% |
|
(0.06 |
)% |
|||||
Rabbi trust employee benefit (income) expense (3) |
|
(0.12 |
)% |
|
(0.46 |
)% |
|
(0.26 |
)% |
|
0.29 |
% |
|
(0.01 |
)% |
|||||
Impairment charge on tax credit investments (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.01 |
% |
|
0.13 |
% |
|||||
Gain on sale of OREO (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
(0.01 |
)% |
|||||
Merger and acquisition expenses (3) |
|
0.04 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
3.55 |
% |
|
0.09 |
% |
|||||
Less net tax benefit associated with non-GAAP adjustments (1) (3) |
|
0.05 |
% |
|
0.21 |
% |
|
0.15 |
% |
|
2.21 |
% |
|
0.14 |
% |
|||||
Operating return on average shareholders' equity (non-GAAP) (3) |
|
7.98 |
% |
|
7.34 |
% |
|
6.82 |
% |
|
5.19 |
% |
|
4.30 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
Average tangible shareholders' equity: |
|
|
|
|
|
|||||||||||||||
Average total shareholders' equity (GAAP) |
$ |
2,776,691 |
|
$ |
2,865,799 |
|
$ |
3,273,447 |
|
$ |
3,423,231 |
|
$ |
3,450,679 |
|
|||||
Less: Average goodwill and other intangibles |
|
656,684 |
|
|
654,444 |
|
|
649,497 |
|
|
520,988 |
|
|
380,185 |
|
|||||
Average tangible shareholders' equity (non-GAAP) |
$ |
2,120,007 |
|
$ |
2,211,355 |
|
$ |
2,623,950 |
|
$ |
2,902,243 |
|
$ |
3,070,494 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Return on average tangible shareholders' equity (non-GAAP) (3) |
|
10.25 |
% |
|
9.28 |
% |
|
7.96 |
% |
|
4.80 |
% |
|
4.79 |
% |
|||||
Add: |
|
|
|
|
|
|||||||||||||||
Losses (income) from investments held in rabbi trusts (3) |
|
0.42 |
% |
|
1.33 |
% |
|
0.69 |
% |
|
(0.61 |
)% |
|
0.04 |
% |
|||||
Losses (gains) on sales of securities available for sale, net (3) |
|
0.04 |
% |
|
0.02 |
% |
|
0.34 |
% |
|
0.00 |
% |
|
0.00 |
% |
|||||
(Gains) losses on sales of other assets (3) |
|
(0.09 |
)% |
|
(0.23 |
)% |
|
0.04 |
% |
|
0.00 |
% |
|
(0.06 |
)% |
|||||
Rabbi trust employee benefit (income) expense (3) |
|
(0.16 |
)% |
|
(0.60 |
)% |
|
(0.32 |
)% |
|
0.34 |
% |
|
(0.01 |
)% |
|||||
Impairment charge on tax credit investments (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.02 |
% |
|
0.15 |
% |
|||||
Gain on sale of OREO (3) |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
0.00 |
% |
|
(0.01 |
)% |
|||||
Merger and acquisition expenses (3) |
|
0.05 |
% |
|
0.00 |
% |
|
0.01 |
% |
|
4.19 |
% |
|
0.10 |
% |
|||||
Less net tax benefit associated with non-GAAP adjustments (1) (3) |
|
0.07 |
% |
|
0.27 |
% |
|
0.19 |
% |
|
2.60 |
% |
|
0.16 |
% |
|||||
Operating return on average tangible shareholders' equity (non-GAAP) (3) |
|
10.44 |
% |
|
9.53 |
% |
|
8.53 |
% |
|
6.14 |
% |
|
4.84 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|||||||||||||||
(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 |
|||||||||||||||||||
|
Sep 30, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
|||||||||||||||
(Unaudited, dollars in thousands) |
|
|
|
|
|
|||||||||||||||
Net interest income (GAAP) |
$ |
152,179 |
|
$ |
137,757 |
|
$ |
128,124 |
|
$ |
122,437 |
|
$ |
102,691 |
|
|||||
Add: |
|
|
|
|
|
|||||||||||||||
Tax-equivalent adjustment (non-GAAP) |
|
3,672 |
|
|
3,023 |
|
|
2,261 |
|
|
2,211 |
|
|
1,316 |
|
|||||
Fully-taxable equivalent net interest income (non-GAAP) |
$ |
155,851 |
|
$ |
140,780 |
|
$ |
130,385 |
|
$ |
124,648 |
|
$ |
104,007 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Noninterest income (GAAP) |
$ |
43,353 |
|
$ |
41,877 |
|
$ |
46,415 |
|
$ |
49,001 |
|
$ |
43,209 |
|
|||||
Less: |
|
|
|
|
|
|||||||||||||||
(Losses) income from investments held in rabbi trusts |
|
(2,248 |
) |
|
(7,316 |
) |
|
(4,433 |
) |
|
4,444 |
|
|
(289 |
) |
|||||
(Losses) gains on sales of securities available for sale, net |
|
(198 |
) |
|
(104 |
) |
|
(2,172 |
) |
|
— |
|
|
1 |
|
|||||
Gain (losses) on sales of other assets |
|
501 |
|
|
1,251 |
|
|
(274 |
) |
|
34 |
|
|
490 |
|
|||||
Noninterest income on an operating basis (non-GAAP) |
$ |
45,298 |
|
$ |
48,046 |
|
$ |
53,294 |
|
$ |
44,523 |
|
$ |
43,007 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Noninterest expense (GAAP) |
$ |
116,840 |
|
$ |
111,139 |
|
$ |
108,866 |
|
$ |
143,602 |
|
$ |
98,970 |
|
|||||
Less: |
|
|
|
|
|
|||||||||||||||
Rabbi trust employee benefit (income) expense |
|
(867 |
) |
|
(3,310 |
) |
|
(2,087 |
) |
|
2,519 |
|
|
(53 |
) |
|||||
Impairment charge on tax credit investments |
|
— |
|
|
— |
|
|
— |
|
|
116 |
|
|
1,133 |
|
|||||
Gain on sale of OREO |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(87 |
) |
|||||
Merger and acquisition expenses |
|
271 |
|
|
— |
|
|
34 |
|
|
30,652 |
|
|
740 |
|
|||||
Noninterest expense on an operating basis (non-GAAP) |
$ |
117,436 |
|
$ |
114,449 |
|
$ |
110,919 |
|
$ |
110,315 |
|
$ |
97,237 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Total revenue (GAAP) |
$ |
195,532 |
|
$ |
179,634 |
|
$ |
174,539 |
|
$ |
171,438 |
|
$ |
145,900 |
|
|||||
Total operating revenue (non-GAAP) |
$ |
201,149 |
|
$ |
188,826 |
|
$ |
183,679 |
|
$ |
169,171 |
|
$ |
147,014 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Efficiency ratio (GAAP) |
|
59.75 |
% |
|
61.87 |
% |
|
62.37 |
% |
|
83.76 |
% |
|
67.83 |
% |
|||||
Operating efficiency ratio (non-GAAP) |
|
58.38 |
% |
|
60.61 |
% |
|
60.39 |
% |
|
65.21 |
% |
|
66.14 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
Noninterest income / total revenue (GAAP) |
|
22.17 |
% |
|
23.31 |
% |
|
26.59 |
% |
|
28.58 |
% |
|
29.62 |
% |
|||||
Noninterest income / total revenue on an operating basis (non-GAAP) |
|
22.52 |
% |
|
25.44 |
% |
|
29.01 |
% |
|
26.32 |
% |
|
29.25 |
% |
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, 2022 |
Jun 30, 2022 |
Mar 31, 2022 |
Dec 31, 2021 |
Sep 30, 2021 |
|||||||||||||||
(Unaudited, dollars in thousands, except per-share data) |
|
|
|
|
|
|||||||||||||||
Tangible shareholders' equity: |
|
|
|
|
|
|||||||||||||||
Total shareholders' equity (GAAP) |
$ |
2,416,163 |
|
$ |
2,718,396 |
|
$ |
3,008,392 |
|
$ |
3,406,352 |
|
$ |
3,429,292 |
|
|||||
Less: Goodwill and other intangibles |
|
662,222 |
|
|
653,853 |
|
|
654,759 |
|
|
649,703 |
|
|
379,772 |
|
|||||
Tangible shareholders' equity (non-GAAP) |
|
1,753,941 |
|
|
2,064,543 |
|
|
2,353,633 |
|
|
2,756,649 |
|
|
3,049,520 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Tangible assets: |
|
|
|
|
|
|||||||||||||||
Total assets (GAAP) |
|
22,042,933 |
|
|
22,350,848 |
|
|
22,836,072 |
|
|
23,512,128 |
|
|
17,461,223 |
|
|||||
Less: Goodwill and other intangibles |
|
662,222 |
|
|
653,853 |
|
|
654,759 |
|
|
649,703 |
|
|
379,772 |
|
|||||
Tangible assets (non-GAAP) |
$ |
21,380,711 |
|
$ |
21,696,995 |
|
$ |
22,181,313 |
|
$ |
22,862,425 |
|
$ |
17,081,451 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Shareholders' equity to assets ratio (GAAP) |
|
10.96 |
% |
|
12.16 |
% |
|
13.17 |
% |
|
14.49 |
% |
|
19.64 |
% |
|||||
Tangible shareholders' equity to tangible assets ratio (non-GAAP) |
|
8.20 |
% |
|
9.52 |
% |
|
10.61 |
% |
|
12.06 |
% |
|
17.85 |
% |
|||||
|
|
|
|
|
|
|||||||||||||||
Common shares outstanding |
|
177,772,553 |
|
|
179,253,801 |
|
|
183,438,711 |
|
|
186,305,332 |
|
|
186,758,154 |
|
|||||
|
|
|
|
|
|
|||||||||||||||
Book value per share (GAAP) |
$ |
13.59 |
|
$ |
15.17 |
|
$ |
16.40 |
|
$ |
18.28 |
|
$ |
18.36 |
|
|||||
Tangible book value per share (non-GAAP) |
$ |
9.87 |
|
$ |
11.52 |
|
$ |
12.83 |
|
$ |
14.80 |
|
$ |
16.33 |
|
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 |
||||||||||
|
Sep 30, 2022 |
Jun 30, 2022 |
Jun 30, 2022 |
|||||||||
(Unaudited, dollars in thousands, except per-share data) |
|
|
|
|||||||||
Common stock |
$ |
1,778 |
|
$ |
1,793 |
|
$ |
(15 |
) |
|||
Additional paid in capital |
|
1,676,396 |
|
|
1,700,495 |
|
|
(24,099 |
) |
|||
Unallocated ESOP common stock |
|
(138,950 |
) |
|
(140,203 |
) |
|
1,253 |
|
|||
Retained earnings |
|
1,855,757 |
|
|
1,817,474 |
|
|
38,283 |
|
|||
AOCI, net of tax - available for sale securities |
|
(918,855 |
) |
|
(657,386 |
) |
|
(261,469 |
) |
|||
AOCI, net of tax - pension |
|
(5,842 |
) |
|
(5,718 |
) |
|
(124 |
) |
|||
AOCI, net of tax - cash flow hedge |
|
(54,121 |
) |
|
1,941 |
|
|
(56,062 |
) |
|||
Total shareholders' equity: |
$ |
2,416,163 |
|
$ |
2,718,396 |
|
$ |
(302,233 |
) |
|||
Less: Goodwill and other intangibles |
|
662,222 |
|
|
653,853 |
|
|
8,369 |
|
|||
Tangible shareholders' equity (non-GAAP) |
$ |
1,753,941 |
|
$ |
2,064,543 |
|
$ |
(310,602 |
) |
|||
|
|
|
|
|||||||||
Common shares outstanding |
|
177,772,553 |
|
|
179,253,801 |
|
|
(1,481,248 |
) |
|||
|
|
|
|
|||||||||
Per share: |
|
|
|
|||||||||
Common stock |
$ |
0.01 |
|
$ |
0.01 |
|
$ |
— |
|
|||
Additional paid in capital |
|
9.43 |
|
|
9.49 |
|
|
(0.06 |
) |
|||
Unallocated ESOP common stock |
|
(0.78 |
) |
|
(0.78 |
) |
|
— |
|
|||
Retained earnings |
|
10.44 |
|
|
10.14 |
|
|
0.30 |
|
|||
AOCI, net of tax - available for sale securities |
|
(5.17 |
) |
|
(3.67 |
) |
|
(1.50 |
) |
|||
AOCI, net of tax - pension |
|
(0.03 |
) |
|
(0.03 |
) |
|
— |
|
|||
AOCI, net of tax - cash flow hedge |
|
(0.30 |
) |
|
0.01 |
|
|
(0.32 |
) |
|||
Total shareholders' equity: |
$ |
13.59 |
|
$ |
15.17 |
|
$ |
(1.57 |
) |
|||
Less: Goodwill and other intangibles |
|
3.73 |
|
|
3.65 |
|
|
0.08 |
|
|||
Tangible shareholders' equity (non-GAAP) |
$ |
9.87 |
|
$ |
11.52 |
|
$ |
(1.65 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20221027005742/en/
Contacts
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