Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q4 2024 Earnings Presentation
27 slides from Eastern Bankshares's earnings presentation, Jan 23, 2025
Slide 1: Q4 Earnings Presentation
Q4 Earnings Presentation January 23, 2025
Slide 2: Q4 2024 financial highlights
Q4 2024 financial highlights Key Metrics Highlights $60.8 million • Net income of $60.8 million, or $0.30 per diluted share Net income • Operating net income of $68.3 million, or $0.34 per diluted share $68.3 million Operating net income* • Company announces $1.2 billion investment portfolio reposit
Slide 3: Income statement
Income statement $ in millions, except per share amounts Q4 2024 Q3 2024 Q2 2024 Q1 2024 Q4 2023 Net interest income $ 179.2 $ 169.9 $ 128.6 $ 129.9 $ 133.3 • Net income was $60.8 million Noninterest income 37.3 33.5 25.3 27.7 26.7 and operating net income Total revenue 216.5 203.4 153.9 157.6 160.0
Slide 4: Net interest margin
Net interest margin Earning assets QoQ changes in FTE net interest income*2 Q4 2024 Q3 2024 Change $3.9 $0.9 $4.2 $0.4 $184.0 Avg. Balance Yield1 Avg. Balance Yield1 Avg. Balance Yield1 $174.6 Commercial loans $ 12,266 5.48 % $ 11,936 5.59 % $ 330 (0.11)% 3.05% Residential loans 3,938 4.33 % 3,772 4
Slide 5: Noninterest income
Noninterest income1 Noninterest income • Total noninterest income was $37.3 million • Gain on sale of an equity investment of $9.3 million, $37.3 offset by loss on securities $36.9 $31.1 $33.5 $32.9 sale of $9.2 million $26.7 $27.7 $25.3 $21.8 $23.4 • Total operating noninterest income was $36.9 mil
Slide 6: Noninterest expense
Noninterest expense1 Noninterest expense • Noninterest expense was $137.5 million, inclusive of $3.6 million of non-operating Cambridge M&A expenses $159.8 • Operating noninterest expense was $130.9 $137.5 $133.7 $133.7 million, an increase of $2.9 million $121.0 $117.4 $101.2 $97.6 $109.9 $105.3 li
Slide 7: Deposits
Deposits Period-end deposit balances • Total deposit cost decreased 13 basis points to 1.69% $21.2 $21.3 • 50% of deposits are checking, up from 49% linked $17.6 $17.7 $17.5 quarter • Deposits increased $74.8 million, or 0.4% linked quarter, due primarily to growth in checking deposits, as well as a
Slide 8: Loan composition
Loan composition Historical loan composition Commercial composition 18,064 18,079 1,634 1,657 13,973 14,089 14,146 4,081 4,064 1,444 1,452 1,503 2,563 12% 2,565 2,544 4% 27% 12,350 12,359 9,964 10,093 10,080 Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 Total commercial Residential real estate Total Consu
Slide 9: Securities portfolio
Securities portfolio Portfolio trends1 Investment composition as of December 31, 20241 $5.6 $5.5 $5.3 $5.2 $5.2 $0.4 $0.4 $0.4 2% 4% $0.4 $0.4 $5.2 $5.1 $4.9 $4.8 $4.8 30% Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 2024 AFS securities HTM securities 64% • High quality portfolio with 96% in US Agency securit
Slide 10: Capital
Capital1 Capital ratios Capital metrics 12/31/2024 9/30/2024 12/31/2023 • Steady capital ratios linked quarter. CET1 ratio and TCE ratio* of 15.7% and 10.5%, Tier 1 leverage ratio 12.4% 12.6% 14.0% respectively Common equity tier 1 ("CET1") capital ratio 15.7% 15.5% 18.6% Tier 1 capital ratio 15.7%
Slide 11: Asset quality
Asset quality Non-performing loans • NPLs increased to $136 million, or 0.76% of total 0.70% 0.76% loans 0.38% 0.41% 0.28% $59 • $113 million commercial, with $87 million in $79 investor office • $13 million residential $76 $53 $57 $40 $45 • $10 million consumer Q4 2023 Q1 2024 Q2 2024 Q3 2024 Q4 20
Slide 12: CRE exposure
CRE exposure1 Composition • CRE portfolio of $7.1 billion, or 39% of total loans % of total Avg. loan % in MA/ Balance CRE balance NH NPL% • Non-owner occupied CRE to total risk-based capital Multi-family $ 2,528 36 % $ 4.8 87 % — % ratio2 of 198% Office 1,037 15 % 4.0 100 % 8.5 % • Composed of dive
Slide 13: CRE investor office exposure
CRE investor office exposure1 Maturity schedule 1Q25 2Q25 3Q25 4Q25 • CRE investor office loans totaled $914 million, Accruing $ 6 $ 67 $ 27 $ 10 or 5% of total loans Non-accruing 3 — — — Total $ 9 $ 67 $ 27 $ 10 • Weighted average LTV of 52% at origination • 43% mixed-use or medical office Risk seg
Slide 14: 2025 Investment Repositioning
2025 Investment Repositioning $1.2 billion strategic repositioning of securities portfolio accelerates improvement in financial performance Category Comment Timing • Transaction will be complete by mid-Q1 2025 After-tax loss on sale • ~$200 million non-operating loss Operating EPS • Approximately $0
Slide 15: Net interest margin tailwinds
Net interest margin tailwinds Strategic securities repositioning • 2025 margin outlook supported by tailwinds: 2.95% 1.84% 1.00% • Strategic repositioning resets securities portfolio yield to ~2.95% and is expected to 1.95% Securities yield - FTE add ~18bps to the 2025 margin Pro forma restructure i
Slide 16: Outlook for 2025
Outlook for 2025 Category Management's outlook Loan and deposit growth • Loan growth of 2-4%; deposit growth of 1-2% with favorable mix shift • Based on market forwards as of 12/31/24 and inclusive of repositioning Net interest income & margin • Net interest income expected to be $815 - $840 million
Slide 17: Non-GAAP financial measures (1)
Non-GAAP financial measures (1) *Denotes a non-GAAP financial measure used in the document. 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
Slide 18: Non-GAAP financial measures (2)
Non-GAAP financial measures (2) 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
Slide 19: Forward-looking statements
Forward-looking statements This document 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 e
Slide 20: Appendix
Appendix @eEastern Bankshares, Inc.
Slide 21: Appendix A: Reconciliation of non-GAAP earnings metrics (1 of 3)
Appendix A: Reconciliation of non-GAAP earnings metrics (1 of 3) (1) Three Months Ended Twelve Months Ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Net income (loss) from continuing operations
Slide 22: Appendix A: Reconciliation of non-GAAP earnings metrics (2 of 3)
Appendix A: Reconciliation of non-GAAP earnings metrics (2 of 3) (1) Three Months Ended Twelve Months Ended Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Return on average assets (2) 0.94 % (0.10)% 0.50 % 0.74 % 0.59 % 0.51 % (0.29)% Add: Provision for no
Slide 23: Appendix A: Reconciliation of non-GAAP earnings metrics (3 of 3)
Appendix A: Reconciliation of non-GAAP earnings metrics (3 of 3)(1) Three Months Ended Twelve Months Ended (Unaudited, dollars in thousands) Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Tangible net income Net (loss) income (GAAP) $ 60,771 $ (6,188) $ 26
Slide 24: Appendix B: Reconciliation of non-GAAP operating revenues and expenses
Appendix B: Reconciliation of non-GAAP operating revenues and expenses Three Months Ended Twelve Months Ended (Unaudited, dollars in thousands) Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Dec 31, 2024 Dec 31, 2023 Net interest income (GAAP) $ 179,193 $ 169,855 $ 128,649 $ 129,90
Slide 25: Appendix C: Reconciliation of non-GAAP capital metrics
Appendix C: Reconciliation of non-GAAP capital metrics As of Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 (Unaudited, dollars in thousands, except per-share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 3,611,967 $ 3,671,138 $ 2,967,473 $ 2,952,831 $ 2,
Slide 26: Appendix D: Tangible shareholders' equity roll forward
Appendix D: Tangible shareholders' equity roll forward As of Change from Dec 31, 2024 Sep 30, 2024 Dec 31, 2023 Sep 30, 2024 Dec 31, 2023 (Unaudited, dollars in thousands, except per-share data) Common stock $ 2,141 $ 2,150 $ 1,767 $ (9) $ 374 Additional paid in capital 2,237,494 2,246,134 1,666,441
Slide 27: Appendix E: Cambridge merger-related charges
Appendix E: Cambridge merger-related charges As of and for the Three Months Ended (Unaudited, dollars in thousands) Dec 31, 2024 Sep 30, 2024 Jun 30, 2024 Mar 31, 2024 Dec 31, 2023 Noninterest income components: Other (1) $ (142) $ (2,969) $ — $ — $ — Total noninterest income $ (142) $ (2,969) $ — $