Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q4 2020 Earnings Presentation
25 slides from Eastern Bankshares's earnings presentation, Jan 28, 2021
Slide 1: Q4 Earnings Presentation
Q4 Earnings Presentation January 28 | 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 Also on the call today Dan Sullivan Chief Credit Officer 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 a footnote. 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) amount
Slide 5: Q4 2020 financial highlights
Q4 2020 financial highlights Key Metrics Highlights ■ EBC began trading on the Nasdaq Global Select Market on October 15, 2020, -$44.1 million following the mutual-to-stock conversion and public offering that raised $1.8 Net income billion in gross offering proceeds. $31.6 million ■ Net income resul
Slide 6: Income statement
Income statement $ in millions, except per share amounts Q4 2020 Q3 2020 Q2 2020 Q1 2020 Q4 2019 ■ Net loss was $44.1 million in the fourth Net interest income $ 103.6 $ 98.7 $ 98.8 $ 100.1 $ 100.9 quarter. Excluding certain non-recurring items, operating net income1 was Non-interest income 49.6 47.
Slide 7: Net interest margin trends
Net interest margin trends Net interest income, net interest margin, and core net interest margin1 $102,290 $101,513 $100,137 $100,095 $104,965 3.80% ■ Net interest income has been 3.52% 3.42% relatively stable over several 3.83% 3.80% 3.14% quarters as the effects of the lower rate environment have
Slide 8: Noninterest income
Noninterest income Noninterest income sources Fee income provides diverse revenue streams $47.3 $47.7 $47.7 $49.6 $33.4 Noninterest income 12.5 13.1 12.7 12.9 2.5 31% 5.1 2.7 2.7 2.3 2.7 5% 5.1 6.1 5.2 5.3 5.5 2% 4.4 5.1 6.0 4% 6.9 4% 27.5 20.2 22.7 21.9 22.4 (7.8) 16% $579.6 mm 2020 Q4 2019 Q1 2020
Slide 9: Noninterest expense
Noninterest expense Noninterest expense categories1,2 2020 Noninterest expense1,2 $109.8 $107.9 $105.6 $100.8 $95.2 17.7 12.7 16.2 12.2 11.2 5.5 5.3 4.8 4.4 8.2 10.6 3.7 8.6 8.3 8.7 11.7 11.4 13% 12.8 10.0 12.2 5% 63.3 66.6 70.3 61.3 61.6 8% $413.6 mm 2020 noninterest Q4 2019 Q1 2020 Q2 2020 Q3 2020
Slide 10: Balance sheet
Balance sheet Linked Quarter (LQ) Year Over Year (YoY) ■ Total assets were $16.0 billion at $ in millions 12/31/2020 9/30/2020 $ % 12/31/2019 $ % December 31, 2020 compared to $15.5 billion at end of prior quarter. Cash and cash equivalents $ 2,054 $ 2,328 $ (274) (12)% $ 363 $ 1,691 466 % Securitie
Slide 11: Securities portfolio
Securities portfolio 12/31/2020 9/30/2020 12/31/20 change from 9/30/20 Percent of Percent of Percent of $ in millions Fair Value Portfolio Fair Value Portfolio Fair Value Portfolio Government sponsored residential MBS $ 2,149 67 % $ 1,539 70 % $ 610 (3)% Government sponsored commercial MBS 17 1% 17
Slide 12: Deposits
Deposits Stable deposit growth ■ Average deposits of $12.3 billion in the fourth quarter represents a 30.5% increase from the prior year period. $12,135 $12,312 $11,465 $9,436 $9,665 ■ Low cost of deposits which declined to 0.03% in the fourth quarter. ■ Deep client relationships, long-standing posi
Slide 13: Loan composition
Loan composition Historical composition Commercial composition at 12/31/20 $10,014 $9,944 $9,731 $8,987 $9,087 905 891 868 933 930 1,401 1,373 1,371 1,420 19% 1,429 1,072 1,099 1,007 28% 6,223 6,368 6,301 6,280 6,206 4% Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Total commercial excl. PPP PPP loans Res
Slide 14: Asset quality
Asset quality Nonperforming loans (NPLs) $60.0 $55.4 ■ The allowance for loan losses was $113.0 million at $49.1 December 31, 2020, or 1.16% of total loans and 261% of $43.8 $44.8 $43.3 nonperforming loans. $40.0 ■ Non-performing loans were $43.3 million at December 31, Consumer 2020 compared to $44
Slide 15: Loan modifications
Loan modifications Total COVID-19 Remaining COVID-19 Remaining COVID-19 Modifications as of June 30, Modifications as of Modifications as of 2020 September 30, 2020 (1) December 31, 2020 (1) Total % of Total Remaining % of Total Remaining % of Total $ in thousands Modifications Loan Balance Modifica
Slide 16: Loan modifications, cont'd
Loan modifications, cont'd Loan Balances by Number of COVID-19 Modifications Granted as of December 31, 2020 Total Remaining Loans Under Loans with 2 or COVID-19 Percent of 2 or More $ in thousands Original Modification More Modifications Modifications Modifications Commercial and industrial $ 16,89
Slide 17: Exposure to high-risk industries
Exposure to high-risk industries As of December 31, 2020 COVID-19 ■ Eastern believes it has a well-diversified and Balance ($ Balance as % mod. as % of granular loan portfolio. Industry thousands) of total loans loan type ■ At December 31, 2020, total exposure to high-risk Retail (1) industries that
Slide 18: CRE Loan to Value (LTV)
* CRE Loan to Value (LTV) December 31, 2020 1% 1% 1% 1% 1% 2% 1% 11% 15% 10% 17% 14% 21% 46% 56% 45% 47% 39% 59% 58.1% 59.0% 57.3% 55.0% 55.3% 55.6% 36% 39% 36% 38% 32% 26% 1% 2% 2% 1% Hotel/Motel/Hospitality Retail** Office** Multifamily** Other Total N/A ≤50% 51-69% 70-79% 80-89% ≥90% Average *Cur
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) Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Net income (GAAP) $ (44,062) $ 28,505 $ 29,850 $ 8,445 $ 31,238 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) Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Return on average assets (3) (1.11)% 0.80 % 0.88 % 0.29 % 1.08 % 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) Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Net interest income (GAAP) $ 103,608 $ 98,742 $ 98,755 $ 100,146 $ 100,921 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 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 (Unaudited, dollars in thousands, except share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 3,428,052 $ 1,713,372 $ 1,693,630 $ 1,662,734 $ 1,600,
Slide 24: Appendix D: Reconciliation of non-GAAP credit metrics
Appendix D: Reconciliation of non-GAAP credit metrics As of (Unaudited, dollars in thousands) Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019 Total loans excluding PPP loans: Total loans (GAAP) $ 9,706,989 $ 9,911,494 $ 9,979,616 $ 9,080,743 $ 8,981,481 Less: PPP loans 1,007,487 1,0
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 Dec 31, 2020 Sep 30, 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