Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q2 2023 Earnings Presentation
25 slides from Eastern Bankshares's earnings presentation, Jul 27, 2023
Slide 1: Q2 Earnings Presentation
Q2 Earnings Presentation July 27 | 2023
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: Q2 2023 financial highlights
Q2 2023 financial highlights Key Metrics Highlights $48.7 million • Net income of $48.7 million and operating net income* of $45.3 million Net income • Net interest margin expansion of 14 basis points to 2.80% due to prior quarter sale of $1.9 billion in available-for-sale ("AFS") securities ("the $
Slide 4: Balance sheet
Balance sheet Linked Quarter Year Over Year • Total assets were $21.6 billion $ in millions 6/30/2023 3/31/2023 △$ △% 6/30/2022 △$ △% at June 30, 2023 compared to $22.7 billion at the end of the Cash and cash equivalents $ 874 $ 2,138 $ (1,264) (59)% $ 369 $ 505 137 % prior quarter Securities 4,985
Slide 5: Income statement
Income statement $ in millions, except per share amounts Q2 2023 Q1 2023 Q4 2022 Q3 2022 Q2 2022 • Net income in the second quarter Net interest income $ 141.6 $ 138.3 $ 150.0 $ 152.2 $ 137.8 was $48.7 million and operating Noninterest income 53.8 (278.3) 44.5 43.4 41.9 net income* was $45.3 million
Slide 6: Net interest margin trends
Net interest margin trends Earning assets QoQ changes in FTE net interest income* $ in millions Q2 2023 Q1 2023 Change $6.8 $5.6 $3.6 $145.5 Avg. Balance Yield1 Avg. Balance Yield1 Avg. Balance Yield1 $142.8 Commercial loans $ 9,921 4.91 % $ 9,765 4.81 % $ 156 0.10 % $(13.2) Residential loans 2,514
Slide 7: Noninterest income
Noninterest income Noninterest income1 Fee income provides diverse revenue stream1 Noninterest income1 28% 4% 3% 2% 4% $54.8 $52.0 $53.8 $48.0 $50.8 $42.0 $43.6 $45.3 $45.2 $42.0 15% $388.6mm YTD 2023 revenue1 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Noninterest income (excluding AFS securities gain/
Slide 8: Noninterest expense
Noninterest expense Noninterest expense1 • Overall increase in operating noninterest expense of $5.3 million from the prior quarter • Increase in salaries & benefits, $132.8 occupancy, and data processing of $114.4 $116.8 $117.4 $119.6 $116.3 $115.0 $121.6 $120.3 $1.1 million $111.1 • Increase of $0
Slide 9: Deposits
Deposits Funding betas & cost • Total deposit cost was 1.22% in the second quarter, Cycle beta (1) Total I.B. liabilities cost (includes borrowings) compared to 0.92% in the prior quarter 1.80%1.78% 1.77% • Deposits decreased $361 million, or 2% from the prior 1.49%1.63% 1.36% quarter 1.05% 0.71% 0.
Slide 10: Securities portfolio
Securities portfolio Portfolio trends1 Investment composition1,2 $ in billions 0% $8.9 $8.5 $8.3 $0.5 $0.5 $0.5 3% $5.9 $5.8 4% $0.5 $0.5 Agency RMBS $8.4 $8.0 $7.8 Agency CMBS 27% $5.5 $5.4 Agency bonds Treasuries 64% Munis Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 AFS securities HTM securities Total
Slide 11: Loan composition
Loan composition Historical composition Loan repricing characteristics2,3 $13,576 $13,675 $13,962 17% swapped $12,904 to a fixed rate $12,399 1,371 1,406 1,382 1,365 1,346 2,511 2,461 2,497 1,990 2,119 34% 9,063 9,420 9,733 9,806 10,045 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Total commercial Reside
Slide 12: Asset quality
Asset quality Non-performing loans (NPLs) $59.9 • Non-performing loans were $30.6 million, or 0.22% of 6.8 total loans 9.5 $38.5 • Net charge-offs were 0.01% of average total loans on $34.0 $34.6 Consumer 7.3 $30.6 an annualized basis 5.6 7.7 Residential 9.8 7.6 43.6 8.5 9.6 • The Company recorded a
Slide 13: Outlook for 2023
Outlook for 2023 The outlook below is subject to a high degree of overall economic and interest rate uncertainty. Category Management's outlook Net interest income for the full year 2023 expected to be modestly lower than Net interest income 2022 levels with a margin on a fully tax equivalent basis
Slide 14: 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 15: 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 16: Appendix
Appendix @eEastern Bankshares, Inc.
Slide 17: Appendix A: Liquidity & Capital Update
Appendix A: Liquidity & Capital Update $ in millions 6/30/2023 3/31/2023 Change Uninsured deposits Uninsured and uncollateralized deposits $ 5,907 $ 6,681 $ (774) % of total deposits 32.5 % 36.0 % (3.5)% Available liquidity sources Cash $ 874 $ 2,138 $ (1,264) Discount Window 878 879 (2) BTFP 2,536
Slide 18: Appendix B: CRE office exposure
Appendix B: CRE office exposure1 Loan composition • Office related CRE of $829 million includes Percent of investor office, owner occupied office and mixed Portfolio 6/30/23 total loans use office Total Loans $ 13,962 100 % • The investor office CRE2 portfolio of $713 million Total Commercial Loans
Slide 19: Appendix C: Reconciliation of non-GAAP earnings metrics (1 of 3)
Appendix C: 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, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Net income (loss) (GAAP) $ 48,657 $ (194,096) $ 42,294 $ 54,777 $ 51,172 Add
Slide 20: Appendix C: Reconciliation of non-GAAP earnings metrics (2 of 3)
Appendix C: 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, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Return on average assets (3) 0.89 % (3.50)% 0.75 % 0.97 % 0.92 % Add: (Incom
Slide 21: Appendix C: Reconciliation of non-GAAP earnings metrics (3 of 3)
Appendix C: 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, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Average tangible shareholders' equity: Average total shareholders' equity (G
Slide 22: Appendix D: Reconciliation of non-GAAP operating revenues and expenses
Appendix D: Reconciliation of non-GAAP operating revenues and expenses Three Months Ended (Unaudited, dollars in thousands) Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Net interest income (GAAP) $ 141,588 $ 138,309 $ 149,994 $ 152,179 $ 137,757 Add: Tax-equivalent adjustment (no
Slide 23: Appendix E: Reconciliation of non-GAAP capital metrics
Appendix E: Reconciliation of non-GAAP capital metrics As of Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 (Unaudited, dollars in thousands, except per-share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 2,526,772 $ 2,579,123 $ 2,471,790 $ 2,416,163 $ 2,
Slide 24: Appendix F: Tangible shareholders' equity roll forward
Appendix F: Tangible shareholders' equity roll forward As of Change from Jun 30, 2023 Mar 31, 2023 Mar 31, 2023 (Unaudited, dollars in thousands, except per-share data) Common stock $ 1,766 $ 1,764 $ 2 Additional paid in capital 1,656,750 1,651,524 5,226 Unallocated ESOP common stock (135,232) (136,
Slide 25: Appendix G: HTM-Marked Tangible Common Equity Ratio
Appendix G: HTM-Marked Tangible Common Equity Ratio As of Jun 30, 2023 Mar 31, 2023 (Unaudited, dollars in thousands, except per-share data) HTM-marked tangible shareholders' equity: Total shareholders' equity (GAAP) $ 2,526,772 $ 2,579,123 Less: Goodwill and other intangibles 658,993 660,165 Less: