Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q3 2021 Earnings Presentation
23 slides from Eastern Bankshares's earnings presentation, Oct 28, 2021
Slide 1: Q3 Earnings Presentation
Q3 Earnings Presentation October 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 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 2021 financial highlights
Q3 2021 financial highlights Key Metrics Highlights $37.1 million ■ Operating net income* was $37.4 million in the third quarter, compared Net income to $37.1 million in the prior quarter, and represented a 16% increase from the prior year quarter. $37.4 million ■ Loans excluding PPP grew $175.3 mil
Slide 6: Income statement
Income statement $ in millions, except per share amounts Q3 2021 Q2 2021 Q1 2021 Q4 2020 Q3 2020 ■ Net income was $37.1 million in the third Net interest income $ 102.7 $ 104.6 $ 100.1 $ 103.6 $ 98.7 quarter. Excluding certain non-recurring Noninterest income 43.2 45.7 55.2 49.6 47.7 items, operatin
Slide 7: Net interest margin trends
Net interest margin trends Net interest income, net interest margin, and core net interest margin*1 $104,965 $105,877 $104,007 ■ Net interest income1 declined in $100,095 $101,388 the third quarter by $1.9 million, driven by lower PPP fee income of 3.14% 2.89% 2.80% $3.3 million, partially offset by
Slide 8: Noninterest income
Noninterest income Noninterest income Fee income provides diverse revenue streams Noninterest income 32% 6% 2% 4% 4% $55.2 $52.2 $47.7 $49.6 $45.7 $44.0 $44.1 $41.5 $43.2 $43.0 16% $451.5 mm 2021 revenue Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 68% Noninterest income Operating noninterest income* $ i
Slide 9: Noninterest expense
Noninterest expense Noninterest expense1 2021 noninterest expense 8% 5% $109.8 $100.8 $107.9* $101.8 $107.3 8% $94.0 $92.5 $99.9 $99.0 $97.2 $300.4 mm 2021 noninterest 13% expense Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 66% Noninterest expense Operating noninterest expense* $ in millions $ millions
Slide 10: Balance sheet
Balance sheet Linked Quarter (LQ) Year Over Year (YoY) ■ Total assets were $17.5 billion at $ in millions 9/30/2021 6/30/2021 $ % 9/30/2020 $ % September 30, 2021 compared to $17.0 billion at end of the prior Cash and cash equivalents $ 1,252 $ 1,564 $ (312) (20)% $ 2,328 $ (1,076) (46)% quarter. Se
Slide 11: Securities portfolio
Securities portfolio Liquidity growth and deployment Investment composition $6.9 $6.4 $5.8 $5.2 1% $4.5 5% $4.8 $5.7 15% $3.2 $4.0 $2.2 8% $2.3 $2.1 $1.9 $1.6 $1.3 72% Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Cash and cash equivalents AFS securities $ in billions Investment yield Agency RMBS Agency C
Slide 12: Deposits
Deposits Stable deposit growth ■ Average deposits of $13.6 billion in the third quarter $13,596 $12,508 $13,053 represents a 12% increase from the prior year period. $12,135 $12,312 ■ Low cost of deposits declined to 0.02% in the third quarter. ■ Deep client relationships, long-standing position in
Slide 13: Loan composition
Loan composition Historical composition Repricing characteristics1 $9,944 $9,731 $9,916 $9,621 $9,505 891 868 832 835 849 1,373 1,371 1,407 1,457 1,491 1,123 1,026 1,238 826 534 6,255 6,187 6,188 6,268 6,412 58% Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 42% Total commercial excl. PPP PPP loans Residen
Slide 14: PPP Update
PPP Update Industry segments1 Overview Real estate, rental & leasing All other 3.1% 7.3% Transportation & warehousing Accommodation & food services ■ Eastern has originated 15,530 loans totaling $1.7 billion 3.5% 19.1% under the PPP in 2020 and 2021 combined. Wholesale trade 4.1% ■ As of September 3
Slide 15: Asset quality
Asset quality Non-performing loans (NPLs) ■ The allowance for loan losses was $103.4 million at $60.0 September 30, 2021, or 1.15% of total loans (excluding PPP $44.8 $43.3 $44.0 $41.6 $42.1 loans)* and 246% of non-performing loans. $40.0 ■ Non-performing loans were $42.1 million at September 30, Co
Slide 16: Outlook
Outlook We expect the Century merger to close on November 12, 2021 and expect the systems integration to occur the weekend of November 13 and 14 of 2021. Category Management's Outlook Century one-time merger The merger charges are expected to be in line with initial announcement. A significant charg
Slide 17: Appendix
Appendix @eEastern Bankshares, Inc.
Slide 18: 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) Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Net income (GAAP) $ 37,106 $ 34,809 $ 47,663 $ (44,062) $ 28,505 Add: Noninterest income components: Losses
Slide 19: 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) Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Return on average assets (4) 0.84 % 0.83 % 1.19 % (1.11)% 0.80 % Add: Losses (income) from invest
Slide 20: 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, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Net interest income (GAAP) $ 102,691 $ 104,608 $ 100,091 $ 103,608 $ 98,742 Add: Tax-equivalent adjustment (non
Slide 21: Appendix C: Reconciliation of non-GAAP capital metrics
Appendix C: Reconciliation of non-GAAP capital metrics As of Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 (Unaudited, dollars in thousands, except share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 3,429,292 $ 3,430,622 $ 3,387,045 $ 3,428,052 $ 1,713,
Slide 22: Appendix D: Reconciliation of non-GAAP credit metrics
Appendix D: Reconciliation of non-GAAP credit metrics As of (Unaudited, dollars in thousands) Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Total loans excluding PPP loans: Total loans (GAAP) (1) $ 9,481,458 $ 9,591,336 $ 9,883,802 $ 9,706,989 $ 9,911,494 Less: PPP loans (1) 514,0
Slide 23: Appendix E: Reconciliation of non-GAAP core margin
Appendix E: Reconciliation of non-GAAP core margin As of and for the three months ended Sep 30, 2021 Jun 30, 2021 (Unaudited, dollars in thousands) Volume Interest Margin Impact (1) Volume Interest Margin Impact (1) Reported total average interest-earning assets, net interest income, and net interes