Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q1 2022 Earnings Presentation
22 slides from Eastern Bankshares's earnings presentation, Apr 28, 2022
Slide 1: Q1 Earnings Presentation
Q1 Earnings Presentation April 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: Q1 2022 financial highlights
Q1 2022 financial highlights Key Metrics Highlights $51.5 million • Operating net income* of $55.1 million for the first quarter of Net income 2022 is 23% higher than the prior quarter and 18% higher than the prior year quarter. $55.1 million • Loan growth excluding Paycheck Protection Program (“PPP
Slide 6: Income statement
Income statement $ in millions, except per share amounts Q1 2022 Q4 2021 Q3 2021 Q2 2021 Q1 2021 • Net income was $51.5 million in the first quarter. Excluding certain non- Net interest income $ 128.1 $ 122.4 $ 102.7 $ 104.6 $ 100.1 recurring items, operating net Noninterest income 46.4 49.0 43.2 45
Slide 7: Net interest margin trends
Net interest margin trends FTE net interest income and margin*1 $130,385 • Net interest income1 increased in $124,648 the first quarter by $5.7 million, $101,388 $105,877 $104,007 driven primarily by increased average earning assets partially 2.71% 2.69% 2.53% 2.54% 2.42% offset by lower PPP fee acc
Slide 8: Noninterest income
Noninterest income Noninterest income Fee income provides diverse revenue stream Noninterest income 27% 4%2% 5% $55.2 $52.2 $53.3 $45.7 $49.0 $46.4 $41.5 $43.2 $43.0 $44.5 16% $174.5mm 2022 YTD revenue Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 $ in millions Noninterest income Operating noninterest inc
Slide 9: Noninterest expense
Noninterest expense Noninterest expense 2022 noninterest expense 7% 4% $143.6 11% $107.3 $110.3 $108.9 $110.9 $94.0 $92.5 $99.9 $99.0 $97.2 $108.9mm 2022 YTD noninterest 14% expense Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 64% $ in millions Noninterest expense Operating noninterest expense* $ million
Slide 10: Balance sheet
Balance sheet Linked Quarter (LQ) Year Over Year (YoY) • Total assets were $22.8 billion $ in millions 3/31/2022 12/31/2021 $ % 3/31/2021 $ % at March 31, 2022 compared to $23.5 billion at end of the prior Cash and cash equivalents $ 830 $ 1,232 $ (402) (33)% $ 1,860 $ (1,030) (55)% quarter. Securit
Slide 11: Securities portfolio
Securities portfolio Liquidity growth and deployment1 Investment composition1,2 $ in billions 0% 3% $0.4 12% $8.5 Agency RMBS $7.9 Agency CMBS $4.0 $4.8 $5.7 Agency bonds 22% Treasuries 62% Munis $1.9 $1.6 $1.3 $1.2 $0.8 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Cash and cash equivalents AFS securitie
Slide 12: Deposits
Deposits Stable deposit growth • Strong deposits mix with 58% of total deposits in checking products and a total deposit cost of 7 basis points. $19,545 $16,989 • Strong, low cost core deposit base and 63% loan to $13,053 $13,596 $12,508 deposit ratio is a differentiating factor in a rising rate env
Slide 13: Loan composition
Loan composition Historical composition Repricing characteristics1 1,100 1,099 1,927 1,936 832 835 849 331 141 1,407 1,457 1,491 1,238 826 534 8,709 8,802 6,188 6,268 6,412 58% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Total commercial excl. PPP PPP loans Residential real estate Consumer home equity O
Slide 14: Asset quality
Asset quality Non-performing loans (NPLs) • The company adopted CECL effective January 1, 2022 and recorded a $27.1 million day 1 reserve increase. This adjustment was primarily due to the reserves required under 3.9 CECL for loans acquired from Century which were previously 4.1 4.3 8.4 6.7 recorded
Slide 15: Outlook update
Outlook update Interest rate forecast includes seven total 0.25% hikes in the federal funds rate in 2022. Category Management's Outlook 2022 is expected to be $530 to $550 million with the impact of higher rates through Net interest income the remainder of 2022 $180 - $190 million for the full year
Slide 16: Appendix
Appendix @eEastern Bankshares, Inc.
Slide 17: 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) Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Net income (GAAP) $ 51,516 $ 35,087 $ 37,106 $ 34,809 $ 47,663 Add: Noninterest income components: Losses (
Slide 18: 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) Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Return on average assets (3) 0.90 % 0.67 % 0.84 % 0.83 % 1.19 % Add: Losses (income) from investm
Slide 19: 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) Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Net interest income (GAAP) $ 128,124 $ 122,437 $ 102,691 $ 104,608 $ 100,091 Add: Tax-equivalent adjustment (no
Slide 20: Appendix C: Reconciliation of non-GAAP capital metrics
Appendix C: Reconciliation of non-GAAP capital metrics As of Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 (Unaudited, dollars in thousands, except share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 3,008,392 $ 3,406,352 $ 3,429,292 $ 3,430,622 $ 3,387,
Slide 21: Appendix D: Reconciliation of non-GAAP credit metrics
Appendix D: Reconciliation of non-GAAP credit metrics As of (Unaudited, dollars in thousands) Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Total loans excluding PPP loans: Total loans (GAAP) (1) $ 12,157,769 $ 12,255,068 $ 9,481,458 $ 9,591,336 $ 9,883,802 Less: PPP loans (1) 137
Slide 22: Appendix E: Tangible shareholders' equity roll forward
Appendix E: Tangible shareholders' equity roll forward As of Mar 31, 2022 change from Mar 31, 2022 Dec 31, 2021 Dec 31, 2021 (Unaudited, dollars in thousands, except per share amounts) Common stock $ 1,834 $ 1,863 $ (29) Additional paid in capital 1,777,670 1,835,241 (57,571) Unallocated ESOP common