Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q2 2022 Earnings Presentation
23 slides from Eastern Bankshares's earnings presentation, Jul 28, 2022
Slide 1: Q2 Earnings Presentation
Q2 Earnings Presentation July 28 | 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: Q2 2022 financial highlights
Q2 2022 financial highlights Key Metrics Highlights $51.2 million • Operating net income* of $52.5 million, or $0.32 per diluted Net income share, for the second quarter of 2022 is 42% higher than the comparable prior year quarter. $52.5 million • Net interest income of $137.8 million for the second
Slide 6: Income statement
Income statement $ in millions, except per share amounts Q2 2022 Q1 2022 Q4 2021 Q3 2021 Q2 2021 • Net income was $51.2 million in the Net interest income $ 137.8 $ 128.1 $ 122.4 $ 102.7 $ 104.6 second quarter. Excluding certain Noninterest income 41.9 46.4 49.0 43.2 45.7 non-recurring items, operat
Slide 7: Net interest margin trends
Net interest margin trends FTE net interest income and margin*1 $140,780 • The FTE net interest margin* was $130,385 $124,648 2.63% for the second quarter, $105,877 $104,007 representing a 21 basis point increase from the prior quarter 2.69% 2.53% 2.54% 2.42% 2.63% driven primarily by higher short-
Slide 8: Noninterest income
Noninterest income Noninterest income Fee income provides diverse revenue stream Noninterest income 25% 3% 2% 5% $53.3 $45.7 $49.0 $46.4 $48.0 $41.5 $43.2 $43.0 $44.5 $41.9 15% $354.2mm 2022 YTD revenue Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 $ in millions Noninterest income Operating noninterest in
Slide 9: Noninterest expense
Noninterest expense Noninterest expense 2022 noninterest expense 8% 4% $143.6 10% $107.3 $110.3 $108.9 $110.9 $111.1 $114.4 $99.9 $99.0 $97.2 $220mm 2022 YTD noninterest 13% expense Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 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 $22.4 billion $ in millions 6/30/2022 3/31/2022 $ % 6/30/2021 $ % at June 30, 2022 compared to $22.8 billion at end of the prior Cash and cash equivalents $ 369 $ 830 $ (461) (56)% $ 1,564 $ (1,195) (76)% quarter. Securities
Slide 11: Securities portfolio
Securities portfolio Portfolio Trends1 Investment composition1,2 $ in billions 0% 3% $0.4 $0.5 12% Agency RMBS $8.5 $7.9 Agency CMBS $4.8 $5.7 $7.5 Agency bonds 22% 61% Treasuries $1.6 $1.3 $1.2 $0.4 $0.8 Munis Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 Cash and cash equivalents AFS securities HTM secu
Slide 12: Deposits
Deposits Average total deposits • Strong deposit mix with 60% of total deposits in checking products and a total deposit cost of 6 basis $19,545 $19,077 points. $16,989 • Strong, low-cost core deposit base and 65% loan to $13,053 $13,596 deposit ratio can be differentiating factors in a rising rate
Slide 13: Loan composition
Loan composition Historical composition Loan composition as of June 30, 2022 1,315 1,303 1,346 1,927 1,936 1,990 1,069 1,067 331 141 42 1,457 1,491 2.4% 9.1% 826 534 8,709 8,802 9,021 10.9% 6,268 6,412 38.7% Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 16.0% Total commercial excl. PPP PPP loans Residenti
Slide 14: Interest rate risk
Interest rate risk Through Q2 2022 Loan repricing characteristics1,2 • Historically asset sensitive and well-positioned for rising 8% swapped to a fixed rate interest rates • Valuable core deposit franchise with historically low betas and virtually no wholesale funding • Concentration of floating ra
Slide 15: Asset quality
Asset quality Non-performing loans (NPLs) • The allowance for loan losses was $125.5 million at June 30, 2022, or 1.01% of total loans. 6.8 • The Company recorded a provision for allowance for loan 9.5 losses of $1.1 million for the second quarter, primarily due to Consumer 4.1 4.3 loan growth. Resi
Slide 16: Outlook update
Outlook update Updated interest rate forecast assumes the upper bound of the Fed Funds target range ends 2022 at 3.50%. Category Management's Outlook Expected to be $570 to $590 million for the full year 2022 with the impact of higher Net interest income rates through the remainder of 2022 Expected
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) Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Net income (GAAP) $ 51,172 $ 51,516 $ 35,087 $ 37,106 $ 34,809 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) Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Return on average assets (3) 0.92 % 0.90 % 0.67 % 0.84 % 0.83 % 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) Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 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) Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Net interest income (GAAP) $ 137,757 $ 128,124 $ 122,437 $ 102,691 $ 104,608 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 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 (Unaudited, dollars in thousands, except per share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 2,718,396 $ 3,008,392 $ 3,406,352 $ 3,429,292 $ 3,
Slide 23: Appendix D: Tangible shareholders' equity roll forward
Appendix D: Tangible shareholders' equity roll forward As of Jun 30, 2022 change from Jun 30, 2022 Mar 31, 2022 Mar 31, 2022 (Unaudited, dollars in thousands, except per share amounts) Common stock $ 1,793 $ 1,834 $ (41) Additional paid in capital 1,700,495 1,777,670 (77,175) Unallocated ESOP common