Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q4 2022 Earnings Presentation
22 slides from Eastern Bankshares's earnings presentation, Jan 26, 2023
Slide 1: Q4 Earnings Presentation
Q4 Earnings Presentation January 26 | 2023
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: 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: Q4 2022 financial highlights
Q4 2022 financial highlights Key Metrics Highlights $42.3 million • Operating net income* of $49.9 million, or $0.31 per Net income diluted share, for the fourth quarter of 2022. $49.9 million • Net interest income of $150.0 million for the fourth quarter Operating net income* of 2022 was 1% lower t
Slide 6: Income statement
Income statement $ in millions, except per share amounts Q4 2022 Q3 2022 Q2 2022 Q1 2022 Q4 2021 • Net income was $42.3 million in Net interest income $ 150.0 $ 152.2 $ 137.8 $ 128.1 $ 122.4 the fourth quarter. Excluding Noninterest income 44.5 43.4 41.9 46.4 49.0 certain non-recurring items, Total
Slide 7: Net interest margin trends
Net interest margin trends Earning assets QoQ changes in net interest income*1 $ in millions Q4 2022 Q3 2022 Change $17.6 Avg. Balance Yield1 Avg. Balance Yield1 Avg. Balance Yield1 $155.9 $153.8 $(0.4) Commercial loans $ 9,528 4.50 % $ 9,138 4.18 % $ 390 0.32 % $(12.7) $(6.7) Residential loans 2,31
Slide 8: Noninterest income
Noninterest income Noninterest income Fee income provides diverse revenue stream Noninterest income 24% 3% 1% 2% 4% $53.3 $49.0 $46.4 $48.0 $45.3 13% $44.5 $41.9 $43.4 $44.5 $42.0 $744.2mm 2022 revenue Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 $ in millions Noninterest income Operating noninterest inc
Slide 9: Noninterest expense
Noninterest expense Noninterest expense 2022 noninterest expense 12% 4% $143.6 $132.8 $114.4 $116.8 $117.4 $119.6 $110.3 $108.9 $110.9 $111.1 9% $470mm 2022 noninterest expense 12% 63% Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 $ in millions Noninterest expense Operating noninterest expense* $ millions
Slide 10: Balance sheet
Balance sheet Linked Quarter Year Over Year • Total assets were $22.6 billion $ in millions 12/31/2022 9/30/2022 $ % 12/31/2021 $ % at December 31, 2022 compared to $22.0 billion at the Cash and cash equivalents $ 170 $ 158 $ 12 8 % $ 1,232 $ (1,062) (86)% end of the prior quarter. Securities 7,167
Slide 11: Securities portfolio
Securities portfolio Portfolio trends1 Investment composition1,2 $ in billions 0% $8.6 $8.9 $8.9 $8.5 2% $8.3 $0.4 $0.5 $0.5 $0.5 13% Agency RMBS Agency CMBS $8.5 $8.4 $8.0 $7.8 Agency bonds 21% 62% Treasuries Munis Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 AFS securities HTM securities Total securiti
Slide 12: Deposits
Deposits Funding betas & cost • Favorable deposit mix with 57% of total deposits in Cycle beta (1) Total I.B. liabilities cost checking products and a total deposit cost of 37 basis (includes borrowings) 1.05% points in Q4. 0.71% • Average deposits were lower in the fourth quarter due 0.53% to heigh
Slide 13: Loan composition
Loan composition Historical composition Loan repricing characteristics3,4 $13,576 18% swapped to $12,904 $12,282 $12,182 $12,399 a fixed rate 1,382 1,346 1,365 1,315 1,303 2,119 2,461 1,927 1,936 1,990 34% 9,040 8,943 9,063 9,420 9,733 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Q4 2022 Total commercial Residen
Slide 14: Asset quality
Asset quality Non-performing loans (NPLs) $59.9 • The allowance for loan losses was $142.2 million at 6.8 December 31, 2022, representing 1.05% of total loans and 9.5 368% of non-performing loans. $38.6 $35.0 $33.8 $34.0 Consumer 7.4 • The Company recorded a provision for loan losses of $10.9 5.7 7.
Slide 15: Outlook for 2023
Outlook for 2023 The outlook below is subject to a high degree of overall economic and interest rate uncertainty. Category Management's outlook Commercial loan growth is expected to be in the low single digits in 2023 Commercial loan growth due to higher interest rates and liquidity Net interest mar
Slide 16: Appendix
Appendix @eEastern Bankshares, Inc.
Slide 17: Appendix A: Reconciliation of non-GAAP earnings metrics (1 of 3)
Appendix A: Reconciliation of non-GAAP earnings metrics (1 of 3) 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: Noninter
Slide 18: Appendix A: Reconciliation of non-GAAP earnings metrics (2 of 3)
Appendix A: Reconciliation of non-GAAP earnings metrics (2 of 3) 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 Return on average assets (3) 0.75 % 0.97 % 0.92 % 0.90 % 0.67 % Add: (Income
Slide 19: Appendix A: Reconciliation of non-GAAP earnings metrics (3 of 3)
Appendix A: Reconciliation of non-GAAP earnings metrics (3 of 3) 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 Average tangible shareholders' equity: Average total shareholders' equity (G
Slide 20: 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) Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Net interest income (GAAP) $ 149,994 $ 152,179 $ 137,757 $ 128,124 $ 122,437 Add: Tax-equivalent adjustment (no
Slide 21: Appendix C: Reconciliation of non-GAAP capital metrics
Appendix C: Reconciliation of non-GAAP capital metrics 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,
Slide 22: Appendix D: Tangible shareholders' equity roll forward
Appendix D: Tangible shareholders' equity roll forward 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