Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Merger or Acquisition (April 2021)
19 slides from Eastern Bankshares's merger presentation, Apr 8, 2021
Slide 1: Acquisition of Century Bancorp, Inc.
Acquisition of @eEastern Bankshares, Inc. APRIL 7 | 2021
Slide 2: Forward-looking statements
Forward-looking statements This press release contains forward-looking statements. 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. They often include words such as “be
Slide 3: Non-GAAP financial measures
Non-GAAP financial measures * Denotes a Non-GAAP Financial Measure. Each company presents tangible book value, a non-GAAP financial measure, which excludes the impact of goodwill and other intangible assets, as their respective management believes this financial measure provides investors with the a
Slide 4: The next step in our journey
The next step in our journey Increases Boston deposits by ~$5bn to ~$16bn in total Bolsters scale and density of Solidifies position as the #1 community bank in the Boston MSA our Boston franchise ~96% of branches within 3-miles of an Eastern branch ~55% earnings per share accretion Deploys
Slide 5: Overview of Century Bancorp
Overview of Company overview Branch footprint Founded in 1969 by Marshall Sloane, Century Bank is New Manchester Rockingham 95 England’s largest family-run bank Hillsborough 93 Lowell Essex Publicly traded on NASDAQ (ticker: CNBK.A) Lowell Lynnfield Beverly 495 Peabody Salem Reading Salem 3rd
Slide 6: In-market acquisition further scales our Boston franchise
In-market acquisition further scales our Boston franchise Solidifies position as the largest Boston-based Significant overlap in Boston market community bank by deposits² Deposits in the Boston MSA Beverly Lynnfield Peabody 93 Reading Salem Bank of America $91.0 Marblehead Woburn Lynn 95 Citizens $4
Slide 7: Boston area is one of the most dynamic banking markets in the country
Boston area is one of the most dynamic banking markets in the country Boston is one of the most attractive urban areas in the U.S. Best in business and education, resulting in prime demographics $94k median annual household income in Boston exceeds the national median by $29k per year¹ Diversified i
Slide 8: Transaction summary
Transaction summary Fixed purchase price of $115.28 per share of Century Bancorp, Inc. common stock Class A and Class B Structure 100% cash consideration $642mm aggregate transaction value Market premium: 21% Pricing and P / TBVPS*: 1.75x implied P / LTM EPS: 15.2x multiples¹ P / LTM f
Slide 9: Key transaction assumptions
Key transaction assumptions 45% of Century’s operating non-interest expense base (~$37mm pre-tax) Synergies Phase-in of 50% in 2022 and 100% thereafter Revenue synergies have been identified, but not modeled Gross credit mark ~1.3% of total loans, consistent with Century’s current reserve le
Slide 10: Financially and strategically compelling opportunity to deploy capital
Financially and strategically compelling opportunity to deploy capital Equivalent share Century acquisition vs. Century acquisition¹ repurchase² share repurchase Capital deployed ~10% of CET1 ~10% of CET1 Neutral ~$630mm capital deployed ~$985mm capital deployed Significantly more EPS ~55% accretive
Slide 11: Significant excess capital and higher earnings profile supports future distributions post-transaction
Significant excess capital and higher earnings profile supports future distributions post-transaction Sources and uses ($bn) Estimated capital ratios at close Earnings power Tier 1 leverage (%) ~20% ~13% $1.7 ~$0.6bn used ~30% ~55% accretion in Century ~10% CET1 acquisition¹ reduction ~20% $1.1 Conv
Slide 12: Prudent pricing, with the value of cost synergies exceeding the premium
Prudent pricing, with the value of cost synergies exceeding the premium P / TBVPS* for regional banks¹ since Value of net cost synergies exceeds the market January 1, 2015 premium paid for Century ($mm) 2.60x KRX¹ P / TBVPS* over time Since 1/1/2015 1.83x Pre-COVID (until 2/19/20) 1.87x 2.40x ~$330
Slide 13: Comprehensive due diligence and integration plan
Comprehensive due diligence and integration plan Diligence focus areas Process and integration timeline Commercial Due diligence Credit Banking 85+ employees, business leaders, advisors and specialists participated In-depth review of Lending and Credit: substantially all loans over $10mm, incl
Slide 14: The next step in our journey
The next step in our journey Bolsters scale and density of our Boston franchise Deploys capital in a strategic and financially attractive opportunity Enhances our financial profile with substantial upside potential Low risk, in-market transaction Pro forma excess capital and higher earnings support
Slide 15: Appendix
Appendix @Eastern Bank
Slide 16: Century Bancorp, Inc. historical financials
Century Bancorp, Inc. historical financials Fiscal year ended 12/31/2016 12/31/2017 12/31/2018 12/31/2019 12/31/2020 Total assets $4,463 $4,786 $5,164 $5,492 $6,359 Balance sheet Gross loans 1,924 2,176 2,286 2,426 2,996 Total deposits 3,653 3,917 4,407 4,400 5,452 Tangible common equity 237 258 298
Slide 17: Pro forma loans and deposits
Pro forma loans and deposits Consumer & other Consumer & other Consumer & other 12% 10% 11% C&I¹ C&I¹ C&I¹ 34% Residential 48% 38% Residential Residential RE RE RE 15% 14% 14% Loans $9.7bn C&D $3.0bn $12.7bn C&D (GAAP) C&D 0% 2% 3% CRE CRE CRE 34% 37% 26% CDs CDs CDs 2% 5% 10% Non-interest Non-inter
Slide 18: Reconciliation of non-GAAP capital metrics
Reconciliation of non-GAAP capital metrics Century Bancorp, Inc. and Subsidiaries (Unaudited, dollars in thousands, except per share data) As of Dec 31, 2020 Calculation of tangible book value per share Total shareholders' equity (GAAP) $370,409 Less: Goodwill and other intangibles 2,714 Tangible sh
Slide 19: GOOD INVESTS. GOOD ADVISES. GOOD LENDS. GOOD HELPS FEED HUNGRY KIDS. GOOD FUELS THE
GOOD INVESTS. GOOD ADVISES. GOOD LENDS. GOOD HELPS FEED HUNGRY KIDS. GOOD FUELS THE HUNGRY STARTUP. GOOD HELPS KIDS LEARN TO PAINT. AND DANCE. AND REALIZE HOW SPECIAL THEY ARE. GOOD BUILDS PLAYGROUNDS. AND REBUILDS LIVES. GOOD INSURES. GOOD ENDURES. GOOD FIGHTS DISCRIMINATION. GOOD STANDS UP FOR EQU
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