Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q1 2024 Earnings Presentation
27 slides from Eastern Bankshares's earnings presentation, Apr 25, 2024
Slide 1: Q1 Earnings Presentation
Q1 Earnings Presentation April 25, 2024
Slide 2: On the call
On the call Presenter Topic Bob Rivers Opening Remarks Chief Executive Officer & Chair of the Board Jim Fitzgerald Chief Administrative Officer, Chief Financial Financials Officer & Treasurer 2
Slide 3: Q1 2024 financial highlights
Q1 2024 financial highlights Key Metrics Highlights Income Statement $38.6 million • Net income of $38.6 million, or $0.24 per diluted share. Operating net income* Net income of $38.1 million, or $0.23 per diluted share $38.1 million Balance Sheet • Deposits up $71 million, or 1.6%1. Core deposits u
Slide 4: Balance sheet
Balance sheet Core deposits1 Total loans • Core deposit1 growth of $120.5 million, or 2.8%2 from $17.9 $17.5 $17.5 $17.7 $13.7 $14.0 $13.9 $14.0 $14.1 $17.0 the prior quarter • Loan growth of $115.3 million, or 3.3%2 from the prior quarter • The company had no brokered deposits at March 31, 2024. Bo
Slide 5: Capital
Capital Common equity tier 1 ratio1 Tier 1 capital ratio1 • Strong capital position 18.6% 18.5% 18.6% 18.5% 15.7% 16.0% provides significant 15.8% 15.8% 15.7% 16.0% support to the Company's growth and strategic initiatives as well as 8.0% 6.5% capital management strategies, including share 3/23 6/23
Slide 6: Income statement
Income statement $ in millions, except per share amounts Q1 2024 Q4 2023 Q3 2023 Q2 2023 Q1 2023 • Net income was $38.6 Net interest income $ 129.9 $ 133.3 $ 137.2 $ 141.6 $ 138.3 million and operating net Noninterest income (loss) 27.7 26.7 19.2 26.2 (309.9) income* was $38.1 million Total revenue
Slide 7: Net interest margin trends
Net interest margin trends Earning assets QoQ changes in FTE net interest income* Q1 2024 Q4 2023 Change Avg. Balance Yield1 Avg. Balance Yield1 Avg. Balance Yield1 $137.8 $1.6 $2.7 $134.4 Commercial loans $ 10,024 5.09 % $ 9,978 5.01 % $ 46 0.08 % Residential loans 2,571 3.75 % 2,573 3.63 % (2) 0.1
Slide 8: Noninterest income
Noninterest income1 Noninterest income • Total noninterest income was $27.7 million for the first quarter • Total operating noninterest income* was $23.4 million, an increase of $1.6 million from the $26.2 $26.7 $27.7 prior quarter $23.3 $23.2 $21.8 $23.4 $20.5 $20.7 $19.2 • The increase in operatin
Slide 9: Noninterest expense
Noninterest expense1 Noninterest expense • Total noninterest expense was $101.2 million, a decrease of $19.8 million from the prior quarter • Operating noninterest expense was $97.6 million, a decrease of $19.8 $121.0 $117.4 million from the prior quarter $95.9 $94.6 $99.9 $98.6 $101.7 $98.7 $101.2
Slide 10: Deposits
Deposits Funding betas & cost 2 • Core deposits increased $121 million, or 2.8% from the Cycle beta (1) Total I.B. liabilities cost prior quarter. Total deposits increased $71 million. The (includes borrowings) company had no brokered deposits as of March 31, 2024 2.27% 2.31% 2.37% 2.15% 2.22% 2.13%
Slide 11: Securities portfolio
Securities portfolio Portfolio trends1 Investment composition as of March 31, 20241 $5.9 $5.8 $5.7 $5.6 $5.5 2%4% $0.5 $0.5 $0.5 $0.4 $0.4 4% Agency RMBS Agency CMBS $5.5 $5.4 $5.3 $5.2 $5.1 27% Agency bonds Treasuries 63% Munis Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 AFS securities HTM securities T
Slide 12: Loan composition
Loan composition Historical loan composition Commercial composition as of March 31, 2024 $13,675 $13,962 $13,919 $13,973 $14,089 1,371 1,406 1,414 1,444 1,452 2,497 2,511 2,551 2,565 2,544 11% 4% 31% 9,806 10,045 9,955 9,964 10,093 Q1 2023 Q2 2023 Q3 2023 Q4 2023 Q1 2024 Total commercial Residential
Slide 13: Asset quality
Asset quality Non-performing loans ("NPLs") • Non-performing loans ("NPLs") increased $57.2 modestly from $52.6 million to $57.2 $52.6 million, or from 0.38% to 0.41% of total $47.5 9.5 8.8 loans. One individual loan secured by an 7.7 6.7 $34.6 8.7 investor office property was moved to NPL Consumer
Slide 14: CRE exposure
CRE exposure1 CRE composition as of March 31, 2024 All others Affordable housing • CRE portfolio of $5.5 billion, or 39% of total 12.3% 7.0% Self storage loans 4.2% Industrial/Warehouse 11.2% • Non-owner occupied ("NOO") CRE to total School 6.4% risk-based capital ("RBC") ratio2 of 154% Retail • Com
Slide 15: CRE office exposure
CRE office exposure1 CRE office loan composition CRE investor office maturity schedule 66.3% 12/31/23 3/31/24 Balance % of Total Loans Balance % of Total Loans Owner Occupied Office $ 113 1 % $ 114 1 % $59 Investor Office 689 5 % 668 5 % 15.0% 12.3% Total CRE Office1 802 6 % 782 6 % $22 6.4% $2 $2 Q
Slide 16: CRE multi-family exposure
CRE multi-family exposure1 Rental vacancy rates for major metro areas Q4 20232 • As of March 31, 2024, CRE multi-family loans total $2.1 billion or 21% of total commercial Boston 2.6% loans New York City 3.6% • No NPLs in Q1 2024 Los Angeles 4.0% • 91% of properties are in MA or NH • Average loan si
Slide 17: Outlook
Outlook Category Management's outlook • Anticipate "higher for longer" rate environment • Net interest income and margin in Q2 2024 expected to be similar to Q1 2024 Net interest income • Net interest income expected to benefit with Fed rate reductions when they occur • Expect NPLs and NCOs to be ge
Slide 18: Outlook - Cambridge Merger
Outlook - Cambridge Merger Category Management's outlook • Regulatory approval anticipated in Q2, closing anticipated in early Q3 2024 Merger timing • Bank systems conversion at time of closing, wealth conversion in September • Loan valuation updated as of March 31, 2024. Final fair value discount e
Slide 19: Non-GAAP financial measures
Non-GAAP financial measures Non-GAAP financial measures used in this presentation are denoted by an asterisk. 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) amoun
Slide 20: Forward-looking statements
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 fut
Slide 21: Appendix
Appendix @eEastern Bankshares, Inc.
Slide 22: Appendix A: Reconciliation of non-GAAP earnings metrics (1 of 3)
Appendix A: Reconciliation of non-GAAP earnings metrics (1 of 3) (1) As of and for the Three Months Ended (Unaudited, dollars in thousands, except per-share data) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Net income (loss) from continuing operations (GAAP) $ 38,647 $ 31,509 $
Slide 23: Appendix A: Reconciliation of non-GAAP earnings metrics (2 of 3)
Appendix A: Reconciliation of non-GAAP earnings metrics (2 of 3) (1) As of and for the Three Months Ended Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Return on average assets (3) 0.74 % 0.59 % 1.18 % 0.81 % (3.64)% Add: (Income) losses from investments held in rabbi trusts (3) (
Slide 24: Appendix A: Reconciliation of non-GAAP earnings metrics (3 of 3)
Appendix A: Reconciliation of non-GAAP earnings metrics (3 of 3)(1) As of and for the Three Months Ended (Unaudited, dollars in thousands) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Average tangible shareholders' equity: Average total shareholders' equity (GAAP) $ 2,970,759 $ 2
Slide 25: Appendix B: Reconciliation of non-GAAP operating revenues and expenses
Appendix B: Reconciliation of non-GAAP operating revenues and expenses Three Months Ended (Unaudited, dollars in thousands) Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Net interest income (GAAP) $ 129,900 $ 133,307 $ 137,205 $ 141,588 $ 138,309 Add: Tax-equivalent adjustment (no
Slide 26: Appendix C: Reconciliation of non-GAAP capital metrics
Appendix C: Reconciliation of non-GAAP capital metrics As of Mar 31, 2024 Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 (Unaudited, dollars in thousands, except per-share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 2,952,831 $ 2,974,855 $ 2,446,553 $ 2,526,772 $ 2,
Slide 27: Appendix D: Tangible shareholders' equity roll forward
Appendix D: Tangible shareholders' equity roll forward As of Change from Mar 31, 2024 Dec 31, 2023 Dec 31, 2023 (Unaudited, dollars in thousands, except per-share data) Common stock $ 1,769 $ 1,767 $ 2 Additional paid in capital 1,669,133 1,666,441 2,692 Unallocated ESOP common stock (131,512) (132,