Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q4 2021 Earnings Presentation
27 slides from Eastern Bankshares's earnings presentation, Jan 27, 2022
Slide 1: Q4 Earnings Presentation
Q4 Earnings Presentation January 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 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: Q4 2021 financial highlights
Q4 2021 financial highlights Key Metrics Highlights $35.1 million ■ On November 12, 2021, the Company completed its merger with Century Bancorp, Inc. ("Century"), adding approximately $7 billion of total assets, $3 billion of total Net income loans and $6 billion of total deposits. A full system con
Slide 6: Income statement
Income statement $ in millions, except per share amounts Q4 2021 Q3 2021 Q2 2021 Q1 2021 Q4 2020 ■ Net income was $35.1 million in the Net interest income $ 122.4 $ 102.7 $ 104.6 $ 100.1 $ 103.6 fourth quarter. Excluding certain non- Noninterest income 49.0 43.2 45.7 55.2 49.6 recurring items, opera
Slide 7: Net interest margin trends
Net interest margin trends Net interest income, net interest margin, and core net interest margin*1 ■ Net interest income1 increased in $124,648 the fourth quarter by $20.6 million, $104,965 $101,388 $105,877 $104,007 driven primarily by increased average 2.89% 2.80% earning assets as a result of th
Slide 8: Noninterest income
Noninterest income Noninterest income Fee income provides diverse revenue streams Noninterest income 31% 6% 2% 4% 4% $55.2 $52.2 $49.6 $45.7 $49.0 $44.1 $41.5 $43.2 $43.0 $44.5 15% $623.0 mm 2021 revenue Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 69% Noninterest income Operating noninterest income* $ i
Slide 9: Noninterest expense
Noninterest expense Noninterest expense1 2021 noninterest expense 7% 6% $143.6 9% * $110.3 $107.9 $101.8 $107.3 $99.9 $99.0 $94.0 $92.5 $97.2 $444.0 mm 2021 noninterest 11% expense Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 67% Noninterest expense Operating noninterest expense* $ in millions $ millions
Slide 10: Balance sheet
Balance sheet Linked Quarter (LQ) Year Over Year (YoY) ■ Total assets were $23.5 billion at $ in millions 12/31/2021 9/30/2021 $ % 12/31/2020 $ % December 31, 2021 compared to $17.5 billion at end of the prior Cash and cash equivalents $ 1,232 $ 1,252 $ (20) (2)% $ 2,054 $ (822) (40)% quarter, incre
Slide 11: Securities portfolio
Securities portfolio Liquidity growth and deployment Investment composition1 0% $9.7 3% $6.9 1% $6.4 $5.8 14% $5.2 $8.5 Agency RMBS $4.0 $4.8 $5.7 Agency CMBS $3.2 Agency bonds Treasuries $2.1 17% Munis $1.9 $1.6 $1.3 $1.2 SBA pools 65% Other Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Cash and cash equ
Slide 12: Deposits
Deposits Stable deposit growth ■ Average deposits of $17.0 billion in the fourth quarter reflect the partial quarter impact of Century. $16,989 $13,053 $13,596 ■ Period end deposits were $19.6 billion, an increase of $6.0 $12,312 $12,508 billion. The Century merger added $6.1 billion in total deposi
Slide 13: Loan composition
Loan composition Historical composition Repricing characteristics1 $12,282 1,100 $9,731 $9,916 $9,621 $9,505 1,927 868 832 835 849 331 1,371 1,407 1,457 1,491 1,026 1,238 826 534 8,709 6,187 6,188 6,268 6,412 60% Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Total commercial excl. PPP PPP loans Residentia
Slide 14: PPP update
PPP update1 Industry segments Overview All other 6.9% Arts, entertainment & recreation 3.0% Transportation & warehousing ■ Eastern originated 15,530 loans totaling $1.7 billion 3.9% Accommodation & food services under the PPP in 2020 and 2021 combined. Wholesale trade 25.6% 2.9% ■ Eastern acquired P
Slide 15: Asset quality
Asset quality Non-performing loans (NPLs) ■ The allowance for loan losses was $97.8 million at December 31, 2021, or 0.82% of total loans (excluding PPP $43.3 $44.0 loans)* and 280% of non-performing loans. $41.6 $42.1 $35.0 ■ Non-performing loans were $35.0 million at December 31, Consumer 2021 com
Slide 16: Outlook update
Outlook update Updated interest rate forecast includes three 0.25% hikes in the federal funds rate in 2022. Category Management's Outlook 2022 is expected to be $505 to $520 million with the impact of higher rates in the 3rd Net interest income and 4th quarters. Operating noninterest No change to pr
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) Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Net income (GAAP) $ 35,087 $ 37,106 $ 34,809 $ 47,663 $ (44,062) Add: Noninterest income components: (Incom
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) Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Return on average assets (3) 0.67 % 0.84 % 0.83 % 1.19 % (1.11)% Add: (Income) losses 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) Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Net interest income (GAAP) $ 122,437 $ 102,691 $ 104,608 $ 100,091 $ 103,608 Add: Tax-equivalent adjustment (no
Slide 21: Appendix C: Reconciliation of non-GAAP capital metrics
Appendix C: Reconciliation of non-GAAP capital metrics As of Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 (Unaudited, dollars in thousands, except share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 3,406,352 $ 3,429,292 $ 3,430,622 $ 3,387,045 $ 3,428,
Slide 22: Appendix D: Reconciliation of non-GAAP credit metrics
Appendix D: Reconciliation of non-GAAP credit metrics As of (Unaudited, dollars in thousands) Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Total loans excluding PPP loans: Total loans (GAAP) (1) $ 12,255,068 $ 9,481,458 $ 9,591,336 $ 9,883,802 $ 9,706,989 Less: PPP loans (1) 321,
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 Dec 31, 2021 Sep 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
Slide 24: Appendix F: COVID-19 related loan modifications
Appendix F: COVID-19 related loan modifications Remaining COVID-19 Modifications as Remaining COVID-19 Modifications as Remaining COVID-19 Modifications as of June 30, 2021 (1) of September 30, 2021 (1) of December 31, 2021 (1) Remaining % of Total Loan Remaining % of Total Loan Remaining % of Total
Slide 25: Appendix G: Organic loan growth
Appendix G: Organic loan growth Century Acquired Dec 31, 2021 Sep 30, 2021 Organic $ Organic % (Unaudited, dollars in thousands) Balance (1) Loans: Commercial and industrial $ 2,960,527 $ 1,652,447 $ 1,405,127 $ (97,047) (5.9)% Commercial real estate 4,522,513 3,825,186 606,139 91,188 2.4 % Comm
Slide 26: Appendix H: Century merger & acquisition expenses
Appendix H: Century merger & acquisition expenses Three months ended Twelve months ended (Unaudited, dollars in thousands) Dec 31, 2021 Salaries and employee benefits $ 15,942 $ 15,947 Office occupancy and equipment 7,112 7,198 Data processing 147 1,286 Professional services 5,699 9,223 Other 1,752
Slide 27: Appendix I: Tangible shareholders' equity roll forward
Appendix I: Tangible shareholders' equity roll forward Dec 31, 2021 change As of from Dec 31, 2021 Sep 30, 2021 Sep 30, 2021 (Unaudited, dollars in thousands, except per share amounts) Common stock $ 1,863 $ 1,868 $ (5) Additional paid in capital 1,835,241 1,857,165 (21,924) Unallocated ESOP common