Eastern Bankshares, Inc. · NASDAQ:EBC
Eastern Bankshares — Q2 2021 Earnings Presentation
23 slides from Eastern Bankshares's earnings presentation, Jul 29, 2021
Slide 1: Q2 Earnings Presentation
Q2 Earnings Presentation July 29 | 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: Q2 2021 financial highlights
Q2 2021 financial highlights Key Metrics Highlights $34.8 million ■ Loans excluding PPP grew $116.9 million, or 5% on an annualized basis Net income from the prior quarter. Residential and commercial loans excluding PPP $37.1 million loans grew 15% and 5%, respectively, on an annualized basis from t
Slide 6: Income statement
Income statement $ in millions, except per share amounts Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q2 2020 ■ Net income was $34.8 million in the Net interest income $ 104.6 $ 100.1 $ 103.6 $ 98.7 $ 98.8 second quarter. Excluding certain non- Non-interest income 45.7 55.2 49.6 47.7 47.7 recurring items, operat
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 ■ Second quarter growth in net interest $100,133 $100,095 $101,388 income of $4.5 million was driven by higher loan income of $2.3 million, 3.42% higher investment income of $2.3 3.1
Slide 8: Noninterest income
Noninterest income Noninterest income sources Fee income provides diverse revenue streams $55.2 Noninterest income $47.7 $47.7 $49.6 13.3 $45.7 33% 13.1 12.7 12.9 7.1 2.7 7% 2.7 5.7 3.2 2% 2.3 2.7 5.5 6.1 4% 5.2 5.3 5.4 4.4 5.1 6.0 5.7 4% 28.1 23.7 22.7 21.9 22.4 17% $305.6 mm 2021 revenue Q2 2020 Q
Slide 9: Noninterest expense
Noninterest expense Noninterest expense categories1 2021 noninterest expense $109.8 $107.9 * $107.3 $100.8 17.7 12.7 $94.0 10.0 12.2 5.3 5.5 6.4 4.4 5.5 8.2 4.1 8.1 8% 8.6 8.3 8.2 11.7 11.4 13.6 5% 12.2 12.1 8% 63.3 66.6 70.3 64.0 69.3 $201.4 mm 2021 noninterest 13% expense Q2 2020 Q3 2020 Q4 2020 Q
Slide 10: Balance sheet
Balance sheet Linked Quarter (LQ) Year Over Year (YoY) ■ Total assets were $17.0 billion at $ in millions 6/30/2021 3/31/2021 $ % 6/30/2020 $ % June 30, 2021 compared to $16.7 billion at end of the prior quarter. Cash and cash equivalents $ 1,564 $ 1,860 $ (296) (16)% $ 1,433 $ 131 9% Securities 4,8
Slide 11: Securities portfolio
Securities portfolio 06/30/2021 change from 6/30/2021 3/31/2021 03/31/2021 Percent of Percent of Percent of $ in millions Fair Value Portfolio Fair Value Portfolio Fair Value Portfolio Government sponsored residential MBS $ 3,478.5 72 % $ 2,691.7 68 % $ 786.8 4.0 % Government sponsored commercial MB
Slide 12: Deposits
Deposits Stable deposit growth ■ Average deposits of $13.1 billion in the second quarter $12,508 $13,053 represents a 14% increase from the prior year period. $12,135 $12,312 $11,465 ■ Low cost of deposits was steady at 0.03% in the second quarter. ■ Deep client relationships, long-standing position
Slide 13: Loan composition
Loan composition Historical composition Commercial composition at 6/30/21 $10,014 $9,944 $9,731 $9,916 $9,621 905 891 868 832 835 1,401 1,373 1,371 1,407 1,457 1,100 1,123 1,026 1,238 826 19% 25% 6,273 6,255 6,187 6,188 6,268 3% Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Total commercial excl. PPP PPP
Slide 14: PPP Update
PPP Update Industry segments1 Overview All other 7.0% Accommodation & food Real estate, rental, & leasing 15.7% ■ Eastern has originated 15,530 loans totaling $1.71 billion 3.3% under the PPP in 2020 and 2021 combined. Transport. & warehousing 3.5% ■ As of June 30, 2021, Eastern had $826 million in
Slide 15: Asset quality
Asset quality Non-performing loans (NPLs) ■ The allowance for loan losses was $105.6 million at June 30, $60.0 $55.4 2021, or 1.10% of total loans and 254% of non-performing $44.8 $43.3 $44.0 $41.6 loans. $40.0 ■ Non-performing loans were $41.6 million at June 30, 2021 Consumer compared to $44.0 mil
Slide 16: Outlook
Outlook The outlook below is for full year 2021 results, assumes the economic recovery continues and interest rates remain relatively unchanged, and excludes the anticipated impact of the pending Century acquisition. Category Management's Outlook Excluding PPP interest and net fees, net interest inc
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) Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Net income (GAAP) $ 34,809 $ 47,663 $ (44,062) $ 28,505 $ 29,850 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) Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Return on average assets (4) 0.83 % 1.19 % (1.11)% 0.80 % 0.88 % Add: (Income) from investments h
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) Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Net interest income (GAAP) $ 104,608 $ 100,091 $ 103,608 $ 98,742 $ 98,755 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 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 (Unaudited, dollars in thousands, except share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 3,430,622 $ 3,387,045 $ 3,428,052 $ 1,713,372 $ 1,693,
Slide 22: Appendix D: Reconciliation of non-GAAP credit metrics
Appendix D: Reconciliation of non-GAAP credit metrics As of (Unaudited, dollars in thousands) Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Total loans excluding PPP loans: Total loans (GAAP) (1) $ 9,591,336 $ 9,883,802 $ 9,706,989 $ 9,911,494 $ 9,979,616 Less: PPP loans (1) 799,9
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 Jun 30, 2021 Mar 31, 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