Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q1 2021 Earnings Presentation
25 slides from Eastern Bankshares's earnings presentation, Apr 29, 2021
Slide 1: Q1 Earnings Presentation
Q1 Earnings Presentation April 29 | 2021
Slide 2: On the call today
On the call today Presenter Topic Bob Rivers Opening Remarks Chief Executive Officer & Chair of the Board Jim Fitzgerald Chief Administrative Officer, Chief Financial Officer Financials & Treasurer 2
Slide 3: Forward-looking statements
Forward-looking statements This presentation 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 futu
Slide 4: 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 5: The next step in our journey
The next step in our journey Transaction update Combined Boston footprint ■ Announced the signing of an all-cash merger agreement on April 7, 2021 to acquire 100% of the outstanding shares of Century Bancorp, Inc. ("Century"). ■ Increases deposits in the Boston MSA by ~$5 billion to ~$16 billion and
Slide 6: Q1 2021 financial highlights
Q1 2021 financial highlights Key Metrics Highlights $47.7 million ■ Net income was $47.7 million or $0.28 per share for the first quarter, Net income driven by seasonally high insurance revenues, favorable impacts to noninterest income and expense driven by higher market interest rates, $46.5 millio
Slide 7: Income statement
Income statement $ in millions, except per share amounts Q1 2021 Q4 2020 Q3 2020 Q2 2020 Q1 2020 ■ Net income was $47.7 million in the first Net interest income $ 100.1 $ 103.6 $ 98.7 $ 98.8 $ 100.1 quarter. Excluding certain non-recurring Non-interest income 55.2 49.6 47.7 47.7 33.4 items, operatin
Slide 8: Net interest margin trends
Net interest margin trends Net interest income, net interest margin, and core net interest margin*1 $104,965 ■ Net interest income has been $101,513 $100,137 $100,095 $101,388 relatively stable over several quarters as the effects of the lower 3.52% 3.42% rate environment have been offset by 3.80% 3
Slide 9: Noninterest income
Noninterest income Noninterest income sources Fee income provides diverse revenue streams $55.2 Noninterest income $47.7 $47.7 $49.6 13.3 36% $33.4 13.1 12.7 12.9 2.5 2.7 5.1 5.7 9% 2.3 2.7 2.7 6.1 5.5 5.4 2% 5.2 5.3 4% 4.4 5.1 6.0 3% 27.5 28.1 22.7 21.9 22.4 $155.3 mm (7.8) 18% 2021 revenue Q1 2020
Slide 10: Noninterest expense
Noninterest expense Noninterest expense categories1 2021 noninterest expense $109.8 $107.9 * $100.8 $95.2 17.7 12.7 $94.0 12.2 5.3 5.5 11.2 4.4 5.5 8.2 4.1 6% 3.7 8.6 8.3 8.2 4% 8.7 11.7 11.4 10.0 12.2 12.1 9% 63.3 66.6 70.3 64.0 61.6 $94.0 mm 13% 2021 noninterest expense Q1 2020 Q2 2020 Q3 2020 Q4
Slide 11: Balance sheet
Balance sheet Linked Quarter (LQ) Year Over Year (YoY) ■ Total assets were $16.7 billion at $ in millions 3/31/2021 12/31/2020 $ % 3/31/2020 $ % March 31, 2021 compared to $16.0 billion at end of prior quarter. Cash and cash equivalents $ 1,860 $ 2,054 $ (194) (9)% $ 766 $ 1,094 143 % Securities 3,9
Slide 12: Securities portfolio
Securities portfolio 03/31/2021 change from 3/31/2021 12/31/2020 12/31/2020 Percent of Percent of Percent of $ in millions Fair Value Portfolio Fair Value Portfolio Fair Value Portfolio Government sponsored residential MBS $ 2,691.7 68 % $ 2,148.8 67 % $ 542.9 1.0 % Government sponsored commercial M
Slide 13: Deposits
Deposits Stable deposit growth ■ Average deposits of $12.5 billion in the first quarter represents a 29% increase from the prior year period. $12,135 $12,312 $12,508 $11,465 $9,665 ■ Low cost of deposits was steady at 0.03% in the first quarter. ■ Deep client relationships, long-standing position in
Slide 14: Loan composition
Loan composition Historical composition Commercial composition at 3/31/21 $10,014 $9,944 $9,731 $9,916 $9,087 905 891 868 832 930 1,401 1,373 1,371 1,407 1,420 1,100 1,123 1,026 1,238 20% 27% 6,368 6,273 6,255 6,187 6,188 3% Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Total commercial excl. PPP PPP loan
Slide 15: PPP Update
PPP Update Industry segments1 Overview All other Real estate, rental, & leasing 6.5% Construction ■ Eastern has originated approximately 13,600 thousand loans 2.5% 16.2% totaling $1.6 billion under the PPP in 2020 and 2021 combined. Transport. & warehousing ■ As of March 31, 2021, Eastern had $1.2 b
Slide 16: Asset quality
Asset quality Non-performing loans (NPLs) $60.0 $55.4 ■ The allowance for loan losses was $111.1 million at $49.1 March 31, 2021, or 1.12% of total loans and 253% of non- $44.8 $43.3 $44.0 performing loans. $40.0 ■ Non-performing loans were $44.0 million at March 31, 2021 Consumer compared to $43.3
Slide 17: COVID-19 modification update
COVID-19 modification update Remaining COVID-19 Modifications Remaining COVID-19 mods1 at March 31, 2021 as of March 31, 2021 (1) Remaining % of Total Loan Original modification Two or more modifications $ in thousands Modifications Balance Portfolio Commercial and industrial $ 22,776 1.1 % Commerci
Slide 18: Outlook
Outlook The outlook below is for full year 2021 results, assumes the economic recovery continues and interest rates remain relatively unchanged, and excludes the anticipated impact of the pending Century acquisition. Category Management's Outlook Excluding PPP interest and net fees, net interest inc
Slide 19: Appendix
Appendix @eEastern Bankshares, Inc.
Slide 20: Appendix A: Reconciliation of non-GAAP earnings metrics
Appendix A: Reconciliation of non-GAAP earnings metrics Three Months Ended (Unaudited, dollars in thousands, except share data) Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Net income (GAAP) $ 47,663 $ (44,062) $ 28,505 $ 29,850 $ 8,445 Add: Noninterest income components: (Income
Slide 21: Appendix A: Reconciliation of non-GAAP earnings metrics continued
Appendix A: Reconciliation of non-GAAP earnings metrics continued Three Months Ended (Unaudited, dollars in thousands, except share data) Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Return on average assets (3) 1.19 % (1.11)% 0.80 % 0.88 % 0.29 % Add: (Income) loss from investme
Slide 22: 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, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Net interest income (GAAP) $ 100,091 $ 103,608 $ 98,742 $ 98,755 $ 100,146 Add: Tax-equivalent adjustment (non-
Slide 23: Appendix C: Reconciliation of non-GAAP capital metrics
Appendix C: Reconciliation of non-GAAP capital metrics As of Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 (Unaudited, dollars in thousands, except share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 3,387,045 $ 3,428,052 $ 1,713,372 $ 1,693,630 $ 1,662,
Slide 24: Appendix D: Reconciliation of non-GAAP credit metrics
Appendix D: Reconciliation of non-GAAP credit metrics As of (Unaudited, dollars in thousands) Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Total loans excluding PPP loans: Total loans (GAAP) (1) $ 9,883,802 $ 9,706,989 $ 9,911,494 $ 9,979,616 $ 9,080,743 Less: PPP loans (1) 1,210
Slide 25: Appendix E: Reconciliation of non-GAAP core margin
Appendix E: Reconciliation of non-GAAP core margin As of and for the three months ended Mar 31, 2021 Dec 31, 2020 (Unaudited, dollars in thousands) Volume Interest Margin Impact (1) Volume Interest Margin Impact (1) Reported total average interest earnings assets, net interest income, and net intere