Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q3 2022 Earnings Presentation
23 slides from Eastern Bankshares's earnings presentation, Oct 27, 2022
Slide 1: Q3 Earnings Presentation
Q3 Earnings Presentation October 27 | 2022
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: Q3 2022 financial highlights
Q3 2022 financial highlights Key Metrics Highlights $54.8 million • Operating net income* of $55.7 million, or $0.34 per diluted Net income share, for the third quarter of 2022 was 49% higher than the comparable prior year quarter2. $55.7 million • Net interest income of $152.2 million for the third
Slide 6: Income statement
Income statement $ in millions, except per share amounts Q3 2022 Q2 2022 Q1 2022 Q4 2021 Q3 2021 • Net income was $54.8 million in the Net interest income $ 152.2 $ 137.8 $ 128.1 $ 122.4 $ 102.7 third quarter. Excluding certain non- Noninterest income 43.4 41.9 46.4 49.0 43.2 recurring items, operat
Slide 7: Net interest margin trends
Net interest margin trends FTE net interest income and margin*1 • The FTE net interest margin* was $155,851 $140,780 2.87% for the third quarter, $124,648 $130,385 representing a 24 basis point $104,007 increase from the prior quarter 2.87% 2.53% 2.54% 2.42% 2.63% driven primarily by higher short- N
Slide 8: Noninterest income
Noninterest income Noninterest income Fee income provides diverse revenue stream Noninterest income 24% 3%2% 4% $53.3 $49.0 $46.4 $48.0 $45.3 $43.2 $43.0 $44.5 $41.9 $43.4 14% $549.7mm 2022 YTD revenue Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 $ in millions Noninterest income Operating noninterest inc
Slide 9: Noninterest expense
Noninterest expense Noninterest expense 2022 noninterest expense 8% 4% $143.6 $116.8 $117.4 9% $110.3 $108.9 $110.9 $111.1 $114.4 $99.0 $97.2 $337mm 2022 YTD noninterest 13% expense Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 $ in millions 65% Noninterest expense Operating noninterest expense* $ million
Slide 10: Balance sheet
Balance sheet Linked Quarter (LQ) Year Over Year (YoY) • Total assets were $22.0 billion $ in millions 9/30/2022 6/30/2022 $ % 9/30/2021 $ % at September 30, 2022 compared to $22.4 billion at end Cash and cash equivalents $ 158 $ 369 $ (211) (57)% $ 1,252 $ (1,094) (87)% of the prior quarter. Securi
Slide 11: Securities portfolio
Securities portfolio Portfolio trends1 Investment composition1,2 $ in billions 0% 3% $0.4 $0.5 $0.5 13% Agency RMBS Agency CMBS $8.5 $8.4 $8.0 Agency bonds 21% 62% Treasuries Munis Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 AFS securities HTM securities Total securities yield • High quality, minimal cr
Slide 12: Deposits
Deposits Total deposits • Favorable deposit mix with 62% of total deposits in checking products and a total deposit cost of 10 basis points. • Strong core deposit base with a history of having one of the lowest cost of funds in the industry. • Average deposits were relatively unchanged in the third
Slide 13: Loan composition
Loan composition Historical composition Loan repricing characteristics3,4 19% swapped to 1,365 a fixed rate 1,315 1,303 1,346 1,927 1,990 2,119 1,936 1,067 1,491 9,040 8,943 9,063 9,420 36% 6,946 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Q3 2022 Total commercial Residential real estate Total Consumer $ in mil
Slide 14: Asset quality
Asset quality Non-performing loans (NPLs) 6.8 • The allowance for loan losses was $131.7 million at 9.5 September 30, 2022, or 1.02% of total loans. 4.3 • The Company recorded a provision for allowance for loan Consumer 7.5 5.7 7.6 5.6 losses of $6.5 million for the third quarter, of which $4.7 Resi
Slide 15: Outlook for 2022
Outlook for 2022 Category Management's outlook Net interest income Expected to be $570 to $580 million for the full year 2022 Operating noninterest income* Expected to be $180 - $190 million for the full year 2022 Expected to be $455 to $465 million for the full year 2022, excluding a non- cash pens
Slide 16: Early outlook for 2023
Early outlook for 2023 The economic environment in 2023 is expected to be more challenging than 2022. The outlook below is subject to a high degree of overall economic and interest rate uncertainty. Category Management's outlook Expect growth rate in the low teens with the net interest margin expect
Slide 17: Appendix
Appendix @eEastern Bankshares, Inc.
Slide 18: 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) Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Net income (GAAP) $ 54,777 $ 51,172 $ 51,516 $ 35,087 $ 37,106 Add: Noninter
Slide 19: 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) Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Return on average assets (3) 0.97 % 0.92 % 0.90 % 0.67 % 0.84 % Add: Losses
Slide 20: 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) Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Average tangible shareholders' equity: Average total shareholders' equity (G
Slide 21: 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) Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Net interest income (GAAP) $ 152,179 $ 137,757 $ 128,124 $ 122,437 $ 102,691 Add: Tax-equivalent adjustment (no
Slide 22: Appendix C: Reconciliation of non-GAAP capital metrics
Appendix C: Reconciliation of non-GAAP capital metrics As of Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 (Unaudited, dollars in thousands, except per-share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 2,416,163 $ 2,718,396 $ 3,008,392 $ 3,406,352 $ 3,
Slide 23: Appendix D: Tangible shareholders' equity roll forward
Appendix D: Tangible shareholders' equity roll forward As of Change Sep 30, 2022 Jun 30, 2022 Jun 30, 2022 (Unaudited, dollars in thousands, except per-share data) Common stock $ 1,778 $ 1,793 $ (15) Additional paid in capital 1,676,396 1,700,495 (24,099) Unallocated ESOP common stock (138,950) (140