Form 8-K - Current report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of Earliest Event Reported): July 27, 2023

EASTERN BANKSHARES, INC.

(Exact Name of Registrant as Specified in Charter)

Massachusetts

001-39610

84-4199750

(State or Other Jurisdiction
of Incorporation or Organization)

(Commission
File Number)

(I.R.S. Employer
Identification No.)

265 Franklin Street

02110

Boston

(Address of Principal Executive Offices)

(Zip Code)

Registrant’s telephone number, including area code: (800) 327-8376

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions:


☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading
Symbol(s)

Name of each exchange
on which registered

Common Stock

EBC

Nasdaq Global Select Market

Indicate by check mark whether the Registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the Registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 2.02 Results of Operations and Financial Condition.

On July 27, 2023, Eastern Bankshares, Inc., a Massachusetts corporation (the “Company”) and the stock holding company for Eastern Bank, issued a press release in which it announced its earnings for the quarter ended June 30, 2023. A copy of the press release is furnished herewith as Exhibit 99.1.

Item 7.01 Regulation FD Disclosure.

In the press release announcing the Company's earnings for the quarter ended June 30, 2023, the Company announced the approval by its Board of Directors of a regular quarterly cash dividend of $0.10 per share payable on September 15, 2023 to shareholders of record on September 1, 2023.

In connection with issuing such press release, the Company posted an investor presentation in the “Presentations” section of the Company’s investor relations website at investor.easternbank.com on July 27, 2023.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits


Exhibit			Description

99.1			Press release dated July 27 , 2023
104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.


	EASTERN BANKSHARES, INC.

DATE: July 27, 2023	By:	/s/ James B. Fitzgerald
		James B. Fitzgerald
		Chief Financial Officer

Exhibit 99.1

Eastern Bankshares, Inc. Reports Second Quarter 2023 Financial Results

~ Strong Margin Expansion the Result of the Prior Quarter’s Balance Sheet Repositioning ~

~ Cash Raised in the Securities Sale Will Continue to Enhance the Company’s Financial Position ~

BOSTON, July 27, 2023 (BUSINESS WIRE) — Eastern Bankshares, Inc. (the “Company,” or together with its affiliates and subsidiaries, “Eastern”) (NASDAQ Global Select Market: EBC), the stock holding company of Eastern Bank, today announced its 2023 second quarter financial results and the declaration of a quarterly cash dividend.

FINANCIAL HIGHLIGHTS FOR THE SECOND QUARTER OF 2023

•Total revenue of $195.4 million. Total operating revenue* of $196.3 million, an increase of $1.5 million from the prior quarter.

•Net income of $48.7 million, or $0.30 per diluted share, compared to net loss of $194.1 million, or $1.20 per diluted share, for the prior quarter.

•Operating net income* of $45.3 million, or $0.28 per diluted share, compared to $61.1 million, or $0.38 per diluted share, for the prior quarter.

•The effective tax rate of 27% in the second quarter was higher than expected due in part to impacts of the repositioning in the prior quarter.

•Total loans increased $286.6 million, or 2.1%, to $14.0 billion, as compared to the prior quarter.

•The net interest margin on a fully tax equivalent (“FTE”) basis* expanded 14 basis points to 2.80%.

•Continued strong asset quality, with annualized net charge-offs ("NCOs") of 0.01% of average total loans and non-performing loans of $30.6 million, or 0.22% of total loans. Provision for allowance for loan losses was $7.5 million, up from $25 thousand in the prior quarter and contributing to an increase in the allowance of $7.0 million.

•Healthy balance sheet with 11.7% shareholders’ equity to assets, 8.9% tangible shareholders’ equity to tangible assets* and 15.7% common equity tier 1 capital ratio1. Total borrowings and brokered deposits of less than 5% of total assets.

During the first quarter, the Company completed a balance sheet repositioning by selling $1.9 billion in lower-yielding available-for-sale (“AFS”) investment securities creating a non-recurring, after-tax loss of $280 million (“the repositioning”). Proceeds from the sale were primarily used in the second quarter to reduce Federal Home Loan Bank advances, support customer deposit activity and fund loan growth.

“Our second quarter results show the tangible benefits of the balance sheet repositioning completed in the first quarter,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “As anticipated, our net interest margin expanded 14 basis points in the quarter, and the cash raised from the sale was used to enhance our overall financial positioning. Our wholesale funding was less than 5% of total assets at the end of the quarter and operating revenues were up $1.5 million. Our highest priority is to be available for our customers and meet their banking and borrowing needs. Our strong balance sheet and core earnings position us well to do just that even in an uncertain economic environment.”

Please refer to Appendices A-E to this press release for reconciliations of non-GAAP financial metrics denoted by an asterisk.

NET INTEREST INCOME

Net interest income was $141.6 million for the second quarter of 2023, compared to $138.3 million in the prior quarter, representing an increase of $3.3 million.

•The net interest margin on a FTE basis* was 2.80% for the second quarter, representing a 14 basis point increase from the first quarter, as asset yields increased faster than funding costs.

•The net interest margin for the first quarter of 2023 included a partial quarter impact of the repositioning, which occurred in mid-March.

•Total interest-earning asset yields increased 35 basis points from the prior quarter to 3.95%, due to increased loan and short-term investment yields as a result of higher short-term interest rates during the quarter as well as the sale of lower yielding AFS securities in the prior quarter and higher average short-term investment balances.

1 Regulatory capital ratios are preliminary estimates.

•Total interest-bearing liabilities cost increased 30 basis points from the prior quarter to 1.79%, due to core deposit pricing increases and deposit mix shifts, partially offset by lower borrowing costs due to the reduction in borrowings as a result of the repositioning.

Please refer to Appendices A-E to this press release for reconciliations of non-GAAP financial metrics denoted by an asterisk.

NONINTEREST INCOME

Noninterest income was $53.8 million for the second quarter of 2023, compared to a loss of $278.3 million for the prior quarter, representing an increase of $332.2 million. The loss in the prior quarter was due to the sale of $1.9 billion in AFS investment securities as part of the repositioning. Noninterest income on an operating basis* was $50.8 million for the second quarter of 2023, compared to $52.0 million for the prior quarter, a decrease of $1.2 million.

•Insurance commissions decreased $3.9 million to $27.6 million in the second quarter, compared to $31.5 million in the prior quarter, driven primarily by seasonality. Compared to the comparable prior year quarter, insurance commissions increased $2.9 million, or 12%.

•Service charges on deposit accounts decreased $0.8 million on a consecutive quarter basis to $7.2 million.

•Trust and investment advisory fees increased $0.4 million on a consecutive quarter basis to $6.1 million.

•Debit card processing fees increased $0.3 million from the prior quarter to $3.5 million.

•Income from investments held in rabbi trust accounts was $3.0 million in the second quarter compared to $2.9 million in the prior quarter.

•There were no realized gains or losses on sales of AFS securities in the second quarter compared to realized losses of $333.2 million in the prior quarter due to the repositioning.

Please refer to Appendices A-E to this press release for reconciliations of non-GAAP financial metrics denoted by an asterisk.

NONINTEREST EXPENSE

Noninterest expense was $121.6 million for the second quarter of 2023, compared to $116.3 million in the prior quarter, representing an increase of $5.4 million. Noninterest expense on an operating basis* for the second quarter of 2023 was $120.3 million, compared to $115.0 million in the prior quarter, an increase of $5.3 million.

•Salaries and employee benefits expense was $79.2 million in the second quarter, representing an increase of $0.7 million from the prior quarter.

•Office occupancy and equipment expense was $9.8 million in the second quarter, a decrease of $0.1 million from the prior quarter.

•Data processing expense was $13.9 million in the second quarter, an increase of $0.4 million from the prior quarter.

•Professional services expense was $4.1 million in the second quarter, an increase of $0.6 million from the prior quarter.

•Marketing expense was $2.1 million in the second quarter, an increase of $1.0 million from the prior quarter.

•Loan expenses were unchanged at $1.1 million in the second quarter.

•Federal Deposit Insurance Corporation (“FDIC”) insurance expense was $3.0 million in the second quarter, an increase of $0.5 million from the prior quarter.

•Other noninterest expense was $7.2 million in the second quarter, an increase of $1.9 million from the prior quarter, due primarily to an increase of $1.5 million in provision for credit losses on off-balance sheet credit exposure.

Please refer to Appendices A-E to this press release for reconciliations of non-GAAP financial metrics denoted by an asterisk.

ASSET QUALITY

The allowance for loan losses was $148.0 million at June 30, 2023, or 1.06% of total loans, compared to $140.9 million, or 1.03% of total loans, at March 31, 2023. The Company recorded a provision for loan losses

totaling $7.5 million in the second quarter of 2023 due to a combination of loan growth and higher reserve rates.

Non-performing loans totaled $30.6 million at June 30, 2023 compared to $34.6 million at the end of the prior quarter. During the second quarter of 2023, the Company recorded total net charge-offs of $0.5 million, or 0.01% of average total loans on an annualized basis, compared to $0.2 million or less than 0.01% of average total loans in the prior quarter, respectively.

DIVIDENDS AND SHARE REPURCHASES

The Company’s Board of Directors has declared a quarterly cash dividend of $0.10 per common share. The dividend will be payable on September 15, 2023 to shareholders of record as of the close of business on September 1, 2023.

The Company did not repurchase any shares of its common stock during the second quarter of 2023.

As announced in September of 2022, the Company received regulatory non-objection for its second share repurchase program of up to 8,900,000 shares, representing approximately 5% of its shares of common stock then outstanding. The repurchase program, which is limited to $200 million through August 31, 2023, may be modified or terminated by the Board of Directors of the Company at any time. At June 30, 2023, there were 6,989,750 shares available for repurchase and $161.8 million in total market value remaining under the repurchase authorization.

CONFERENCE CALL AND PRESENTATION INFORMATION

A conference call and webcast covering Eastern’s second quarter 2023 earnings will be held on Friday, July 28, 2023 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (888) 259-6580 from within the U.S. and reference conference ID 19006231. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A presentation providing additional information for the quarter is also available at investor.easternbank.com. A replay of the webcast will be made available on demand on this site.

ABOUT EASTERN BANKSHARES, INC.

Eastern Bankshares, Inc. is the stock holding company for Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 120 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of June 30, 2023, Eastern Bank had approximately $22 billion in total assets. Eastern provides banking, investment and insurance products and services for consumers and businesses of all sizes, including through its Eastern Wealth Management division and its Eastern Insurance Group LLC subsidiary. Eastern takes pride in its outspoken advocacy and community support that includes $240 million in charitable giving since 1994. An inclusive company, Eastern employs approximately 2,100 deeply committed professionals who value relationships with their customers, colleagues, and communities. For investor information, visit investor.easternbank.com.

CONTACT

Investor Contact

Jillian Belliveau

Eastern Bankshares, Inc.

InvestorRelations@easternbank.com

781-598-7920

Media Contact

Andrea Goodman

Eastern Bank

a.goodman@easternbank.com

781-598-7847

NON-GAAP FINANCIAL MEASURES

*Denotes a non-GAAP financial measure used in this press release.

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) amounts, or is subject to adjustments that have the effect of excluding (or including) amounts that are included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) in the Company’s statement of income, balance sheet or statement of cash flows (or equivalent statements).

The Company presents non-GAAP financial measures, which management uses to evaluate the Company’s performance, and which exclude the effects of certain transactions that management believes are unrelated to its core business and are therefore not necessarily indicative of its current performance or financial position. Management believes excluding these items facilitates greater visibility for investors into the Company’s core business as well as underlying trends that may, to some extent, be obscured by inclusion of such items in the corresponding GAAP financial measures.

There are items in the Company’s financial statements that impact its financial results, but which management believes are unrelated to the Company’s core business. Accordingly, the Company presents noninterest income on an operating basis, total operating revenue, noninterest expense on an operating basis, operating net income, operating earnings per share, operating return on average assets, operating return on average shareholders’ equity, operating return on average tangible shareholders’ equity (discussed further below), and the operating efficiency ratio. Each of these figures excludes the impact of such applicable items because management believes such exclusion can provide greater visibility into the Company’s core business and underlying trends. Such items that management does not consider to be core to the Company’s business include (i) income and expenses from investments held in rabbi trusts, (ii) gains and losses on sales of securities available for sale, net, (iii) gains and losses on the sale of other assets, (iv) rabbi trust employee benefits, (v) impairment charges on tax credit investments and associated tax credit benefits, (vi) other real estate owned (“OREO”) gains, (vii) merger and acquisition expenses, (viii) the non-cash pension settlement charge recognized related to the Defined Benefit Plan, and (ix) certain discrete tax items. The Company does not provide an outlook for its total noninterest income and total noninterest expense because each contains income or expense components, as applicable, such as income associated with rabbi trust accounts and rabbi trust employee benefit expense, which are market-driven, and over which the Company cannot exercise control. Accordingly, reconciliations of the Company’s outlook for its noninterest income on an operating basis and its noninterest expense on an operating basis to an outlook for total noninterest income and total noninterest expense, respectively, cannot be made available without unreasonable effort.

Management also presents tangible assets, tangible shareholders’ equity, average tangible shareholders’ equity, tangible book value per share, the ratio of tangible shareholders’ equity to tangible assets including the impact of mark-to-market adjustments on held-to-maturity securities, return on average tangible shareholders’ equity, and operating return on average shareholders’ equity (discussed further above), each of which excludes the impact of goodwill and other intangible assets, as management believes these financial measures provide investors with the ability to further assess the Company’s performance, identify trends in its core business and provide a comparison of its capital adequacy to other companies. The Company included the tangible ratios because management believes that investors may find it useful to have access to the same analytical tools used by management to assess performance and identify trends.

These non-GAAP financial measures presented in this press release should not be considered an alternative or substitute for financial results or measures determined in accordance with GAAP or as an indication of the Company’s cash flows from operating activities, a measure of its liquidity position or an indication of funds available for its cash needs. An item which management considers to be non-core and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular period. In addition, management’s methodology for calculating non-GAAP financial measures may differ from the methodologies employed by other banking companies to calculate the same or similar performance measures, and accordingly, the Company’s reported non-GAAP financial measures may not be comparable to the same or similar performance measures reported by other banking companies. Please refer to Appendices A-E for reconciliations of the Company's GAAP financial measures to the non-GAAP financial measures in this press release.

FORWARD-LOOKING STATEMENTS

This press release 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 future events and can be identified by the fact that they do not relate strictly to historical or current facts. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target” and similar expressions. Forward-looking statements, by their nature, are subject to risks and uncertainties. There are many factors that could cause actual results to differ materially from expected results described in the forward-looking statements.

Certain factors that could cause actual results to differ materially from expected results include; adverse developments in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for loan losses; increased competitive pressures; changes in interest rates and resulting changes in competitor or customer behavior, mix or costs of sources of funding, and deposit amounts and composition; risks that revenue or expense synergies or the other expected benefits of the Company’s merger with Century Bank in November 2021 may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; adverse national or regional economic conditions or conditions within the securities markets or banking sector; legislative and regulatory changes and related compliance costs that could adversely affect the business in which the Company and its subsidiary Eastern Bank are engaged, including the effect of, and changes in, monetary and fiscal policies and laws, such as the interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations, including inflationary or recessionary pressures, interest rate sensitivity, liquidity constraints, increased borrowing and funding costs, and fluctuations due to actual or anticipated changes to federal tax laws; the realizability of deferred tax assets; the Company’s ability to successfully implement its risk mitigation strategies; asset and credit quality deterioration, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; operational risks such as cybersecurity incidents, natural disasters, and pandemics, including COVID-19; and the failure of the Company to execute all of its planned share repurchases. For further discussion of such factors, please see the Company’s most recent Annual Report on Form 10-K and subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”), which are available on the SEC’s website at www.sec.gov.

You should not place undue reliance on forward-looking statements, which reflect the Company's expectations only as of the date of this press release. The Company does not undertake any obligation to update forward-looking statements.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

Certain information in this press release is presented as reviewed by the Company’s management and includes information derived from the Company’s Consolidated Statements of Income, non-GAAP financial measures, and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."


	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

Earnings data
Net interest income	$	141,588		$	138,309		$	149,994		$	152,179		$	137,757
Noninterest income	53,831			(278,330)			44,516			43,353			41,877
Total revenue	195,419			(140,021)			194,510			195,532			179,634
Noninterest expense	121,648			116,294			132,757			116,840			111,139
Pre-tax, pre-provision income (loss)	73,771			(256,315)			61,753			78,692			68,495
Provision for allowance for loan losses	7,501			25			10,880			6,480			1,050
Pre-tax income (loss)	66,270			(256,340)			50,873			72,212			67,445
Net income (loss)	48,657			(194,096)			42,294			54,777			51,172
Operating net income (non-GAAP)	45,323			61,113			49,912			55,742			52,518

Per-share data
Earnings (loss) per share, basic	$	0.30		$	(1.20)		$	0.26		$	0.33		$	0.31
Earnings (loss) per share, diluted	$	0.30		$	(1.20)		$	0.26		$	0.33		$	0.31
Operating earnings per share, basic (non-GAAP)	$	0.28		$	0.38		$	0.31		$	0.34		$	0.32
Operating earnings per share, diluted (non-GAAP)	$	0.28		$	0.38		$	0.31		$	0.34		$	0.32
Book value per share	$	14.33		$	14.63		$	14.03		$	13.59		$	15.17
Tangible book value per share (non-GAAP)	$	10.59		$	10.88		$	10.28		$	9.87		$	11.52

Profitability
Return on average assets (1)	0.89		%	(3.50)		%	0.75		%	0.97		%	0.92		%
Operating return on average assets (non-GAAP) (1)	0.83		%	1.09		%	0.88		%	0.97		%	0.94		%
Return on average shareholders' equity (1)	7.51		%	(32.00)		%	6.93		%	7.83		%	7.16		%
Operating return on average shareholders' equity (1)	7.00		%	10.07		%	8.17		%	7.98		%	7.34		%
Return on average tangible shareholders' equity (non-GAAP) (1)	10.06		%	(43.75)		%	9.54		%	10.25		%	9.28		%
Operating return on average tangible shareholders' equity (non-GAAP) (1)	9.37		%	13.78		%	11.26		%	10.44		%	9.53		%
Net interest margin (FTE) (1)	2.80		%	2.66		%	2.81		%	2.87		%	2.63		%
Cost of deposits (1)	1.22		%	0.92		%	0.37		%	0.10		%	0.06		%
Efficiency ratio	62.25		%	(83.05)		%	68.25		%	59.75		%	61.87		%
Operating efficiency ratio (non-GAAP)	61.31		%	59.06		%	61.11		%	58.38		%	60.61		%

Balance Sheet (end of period)
Total assets	$	21,583,493		$	22,720,530		$	22,646,858		$	22,042,933		$	22,350,848
Total loans	13,961,878			13,675,250			13,575,531			12,903,954			12,398,694
Total deposits	18,180,972			18,541,580			18,974,359			18,733,381			19,163,801
Total loans / total deposits	77		%	74		%	72		%	69		%	65		%

Asset quality
Allowance for loan losses ("ALLL")	$	147,955		$	140,938		$	142,211		$	131,663		$	125,531
ALLL / total nonperforming loans ("NPLs")	484.18		%	407.65		%	368.38		%	387.77		%	209.64		%
Total NPLs / total loans	0.22		%	0.25		%	0.28		%	0.26		%	0.48		%
Net charge-offs (recoveries) ("NCOs") / average total loans (1)	0.01		%	0.00		%	0.01		%	0.01		%	(0.01)		%

Capital adequacy
Shareholders' equity / assets	11.71		%	11.35		%	10.91		%	10.96		%	12.16		%
Tangible shareholders' equity / tangible assets (non-GAAP)	8.93		%	8.70		%	8.24		%	8.20		%	9.52		%

(1) Presented on an annualized basis.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS


	As of						Jun 30, 2023 change from
(Unaudited, dollars in thousands)	Jun 30, 2023		Mar 31, 2023		Jun 30, 2022		Mar 31, 2023				Jun 30, 2022
ASSETS							△ $		△ %		△ $		△ %
Cash and due from banks	$	105,066	$	98,377	$	100,309	$	6,689	7	%	$	4,757	5	%
Short-term investments	768,436		2,039,439		268,605		(1,271,003)		(62)	%	499,831		186	%
Cash and cash equivalents	873,502		2,137,816		368,914		(1,264,314)		(59)	%	504,588		137	%
Available for sale ("AFS") securities (1)	4,520,293		4,700,134		7,536,921		(179,841)		(4)	%	(3,016,628)		(40)	%
Held to maturity ("HTM") securities (1)	465,061		471,185		488,581		(6,124)		(1)	%	(23,520)		(5)	%
Total securities	4,985,354		5,171,319		8,025,502		(185,965)		(4)	%	(3,040,148)		(38)	%
Loans held for sale	2,835		3,068		764		(233)		(8)	%	2,071		271	%
Loans:
Commercial and industrial	3,341,976		3,169,438		2,840,734		172,538		5	%	501,242		18	%
Commercial real estate	5,242,290		5,201,196		4,792,345		41,094		1	%	449,945		9	%
Commercial construction	371,367		357,117		303,463		14,250		4	%	67,904		22	%
Business banking	1,089,548		1,078,678		1,126,853		10,870		1	%	(37,305)		(3)	%
Total commercial loans	10,045,181		9,806,429		9,063,395		238,752		2	%	981,786		11	%
Residential real estate	2,510,705		2,497,491		1,989,621		13,214		1	%	521,084		26	%
Consumer home equity	1,198,290		1,180,824		1,147,425		17,466		1	%	50,865		4	%
Other consumer	207,702		190,506		198,253		17,196		9	%	9,449		5	%
Total loans	13,961,878		13,675,250		12,398,694		286,628		2	%	1,563,184		13	%
Allowance for loan losses	(147,955)		(140,938)		(125,531)		(7,017)		5	%	(22,424)		18	%
Unamortized prem./disc. and def. fees	(15,202)		(13,597)		(20,988)		(1,605)		12	%	5,786		(28)	%
Net loans	13,798,721		13,520,715		12,252,175		278,006		2	%	1,546,546		13	%
Federal Home Loan Bank stock, at cost	26,894		45,168		5,714		(18,274)		(40)	%	21,180		371	%
Premises and equipment	59,501		61,110		69,019		(1,609)		(3)	%	(9,518)		(14)	%
Bank-owned life insurance	162,718		161,755		158,890		963		1	%	3,828		2	%
Goodwill and other intangibles, net	658,993		660,165		653,853		(1,172)		—	%	5,140		1	%
Deferred income taxes, net	351,054		314,139		244,153		36,915		12	%	106,901		44	%
Prepaid expenses	158,388		163,018		188,115		(4,630)		(3)	%	(29,727)		(16)	%
Other assets	505,533		482,257		383,749		23,276		5	%	121,784		32	%
Total assets	$	21,583,493	$	22,720,530	$	22,350,848	$	(1,137,037)	(5)	%	$	(767,355)	(3)	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand	$	5,346,693	$	5,564,016	$	6,604,154	$	(217,323)	(4)	%	$	(1,257,461)	(19)	%
Interest checking accounts	4,173,079		4,240,780		5,348,181		(67,701)		(2)	%	(1,175,102)		(22)	%
Savings accounts	1,495,540		1,633,790		2,015,865		(138,250)		(8)	%	(520,325)		(26)	%
Money market investment	4,814,412		5,135,590		4,787,603		(321,178)		(6)	%	26,809		1	%
Certificates of deposit	2,351,248		1,967,404		407,998		383,844		20	%	1,943,250		476	%
Total deposits	18,180,972		18,541,580		19,163,801		(360,608)		(2)	%	(982,829)		(5)	%
Borrowed funds:
Federal Home Loan Bank advances	314,021		1,100,952		13,560		(786,931)		(71)	%	300,461		2216	%
Escrow deposits of borrowers	22,980		25,671		19,456		(2,691)		(10)	%	3,524		18	%
Interest rate swap collateral funds	14,210		11,780		10,100		2,430		21	%	4,110		41	%
Total borrowed funds	351,211		1,138,403		43,116		(787,192)		(69)	%	308,095		715	%
Other liabilities	524,538		461,424		425,535		63,114		14	%	99,003		23	%
Total liabilities	19,056,721		20,141,407		19,632,452		(1,084,686)		(5)	%	(575,731)		(3)	%
Shareholders' equity:
Common shares	1,766		1,764		1,793		2		—	%	(27)		(2)	%
Additional paid-in capital	1,656,750		1,651,524		1,700,495		5,226		—	%	(43,745)		(3)	%
Unallocated common shares held by the employee stock ownership plan ("ESOP")	(135,232)		(136,470)		(140,203)		1,238		(1)	%	4,971		(4)	%
Retained earnings	1,704,470		1,672,169		1,817,474		32,301		2	%	(113,004)		(6)	%
Accumulated other comprehensive income ("AOCI"), net of tax	(700,982)		(609,864)		(661,163)		(91,118)		15	%	(39,819)		6	%
Total shareholders' equity	2,526,772		2,579,123		2,718,396		(52,351)		(2)	%	(191,624)		(7)	%
Total liabilities and shareholders' equity	$	21,583,493	$	22,720,530	$	22,350,848	$	(1,137,037)	(5)	%	$	(767,355)	(3)	%

(1) AFS and HTM securities represented at fair value and amortized cost, respectively.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME


	Three months ended						Three months ended Jun 30, 2023 change from three months ended
(Unaudited, dollars in thousands, except per-share data)	Jun 30, 2023		Mar 31, 2023		Jun 30, 2022		Mar 31, 2023				Jun 30, 2022

Interest and dividend income:							△ $		△ %		△ $		△ %
Interest and fees on loans	$	160,862	$	153,540	$	107,236	$	7,322	5	%	$	53,626	50	%
Taxable interest and dividends on securities	24,618		28,642		31,121		(4,024)		(14)	%	(6,503)		(21)	%
Non-taxable interest and dividends on securities	1,434		1,434		1,862		—		—	%	(428)		(23)	%
Interest on federal funds sold and other short-term investments	14,851		5,264		652		9,587		182	%	14,199		2178	%
Total interest and dividend income	201,765		188,880		140,871		12,885		7	%	60,894		43	%
Interest expense:
Interest on deposits	56,146		42,933		3,061		13,213		31	%	53,085		1734	%
Interest on borrowings	4,031		7,638		53		(3,607)		(47)	%	3,978		7506	%
Total interest expense	60,177		50,571		3,114		9,606		19	%	57,063		1832	%
Net interest income	141,588		138,309		137,757		3,279		2	%	3,831		3	%
Provision for allowance for loan losses	7,501		25		1,050		7,476		29904	%	6,451		614	%
Net interest income after provision for allowance for loan losses	134,087		138,284		136,707		(4,197)		(3)	%	(2,620)		(2)	%
Noninterest income:
Insurance commissions	27,609		31,503		24,682		(3,894)		(12)	%	2,927		12	%
Service charges on deposit accounts	7,242		6,472		8,313		770		12	%	(1,071)		(13)	%
Trust and investment advisory fees	6,131		5,770		5,994		361		6	%	137		2	%
Debit card processing fees	3,513		3,170		3,223		343		11	%	290		9	%
Interest rate swap income (losses)	825		(408)		1,593		1,233		(302)	%	(768)		(48)	%
Income (losses) from investments held in rabbi trusts	3,002		2,857		(7,316)		145		5	%	10,318		(141)	%
(Losses) gains on sales of mortgage loans held for sale, net	(50)		(74)		49		24		(32)	%	(99)		(202)	%
Losses on sales of securities available for sale, net	—		(333,170)		(104)		333,170		(100)	%	104		(100)	%
Other	5,559		5,550		5,443		9		—	%	116		2	%
Total noninterest income	53,831		(278,330)		41,877		332,161		(119)	%	11,954		29	%
Noninterest expense:
Salaries and employee benefits	79,224		78,478		72,996		746		1	%	6,228		9	%
Office occupancy and equipment	9,802		9,878		9,888		(76)		(1)	%	(86)		(1)	%
Data processing	13,874		13,441		14,345		433		3	%	(471)		(3)	%
Professional services	4,056		3,420		3,532		636		19	%	524		15	%
Marketing	2,136		1,097		2,651		1,039		95	%	(515)		(19)	%
Loan expenses	1,115		1,095		1,626		20		2	%	(511)		(31)	%
Federal Deposit Insurance Corporation ("FDIC") insurance	3,034		2,546		1,720		488		19	%	1,314		76	%
Amortization of intangible assets	1,172		960		907		212		22	%	265		29	%
Other	7,235		5,379		3,474		1,856		35	%	3,761		108	%
Total noninterest expense	121,648		116,294		111,139		5,354		5	%	10,509		9	%
Income (loss) before income tax (benefit) expense	66,270		(256,340)		67,445		322,610		(126)	%	(1,175)		(2)	%
Income tax expense (benefit)	17,613		(62,244)		16,273		79,857		(128)	%	1,340		8	%
Net income (loss)	$	48,657	$	(194,096)	$	51,172	$	242,753	(125)	%	$	(2,515)	(5)	%

Share data:
Weighted average common shares outstanding, basic (1)	162,232,236		161,991,373		166,533,920		240,863		0	%	(4,301,684)		(3)	%
Weighted average common shares outstanding, diluted (1)	162,246,675		162,059,431		166,573,627		187,244		0	%	(4,326,952)		(3)	%
Earnings (loss) per share, basic	$	0.30	$	(1.20)	$	0.31	$	1.50	(125)	%	$	(0.01)	(2)	%
Earnings (loss) per share, diluted	$	0.30	$	(1.20)	$	0.31	$	1.50	(125)	%	$	(0.01)	(2)	%

(1) Shares held by the Company’s ESOP that have not been allocated to employees in accordance with the terms of the ESOP are not deemed outstanding for earnings per share calculations.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME


	Six months ended
(Unaudited, dollars in thousands, except per-share data)	Jun 30, 2023		Jun 30, 2022		Change

Interest and dividend income:					△ $		△ %
Interest and fees on loans	$	314,402	$	208,603	$	105,799	51	%
Taxable interest and dividends on securities	53,260		58,997		(5,737)		(10)	%
Non-taxable interest and dividends on securities	2,868		3,668		(800)		(22)	%
Interest on federal funds sold and other short-term investments	20,115		1,088		19,027		1749	%
Total interest and dividend income	390,645		272,356		118,289		43	%
Interest expense:
Interest on deposits	99,079		6,383		92,696		1452	%
Interest on borrowings	11,669		92		11,577		12584	%
Total interest expense	110,748		6,475		104,273		1610	%
Net interest income	279,897		265,881		14,016		5	%
Provision for allowance for loan losses	7,526		565		6,961		1232	%
Net interest income after provision for allowance for loan losses	272,371		265,316		7,055		3	%
Noninterest income:
Insurance commissions	59,112		53,395		5,717		11	%
Service charges on deposit accounts	13,714		16,850		(3,136)		(19)	%
Trust and investment advisory fees	11,901		12,135		(234)		(2)	%
Debit card processing fees	6,683		6,168		515		8	%
Interest rate swap income	417		4,525		(4,108)		(91)	%
Income (losses) from investments held in rabbi trusts	5,859		(11,749)		17,608		(150)	%
(Losses) gains on sales of mortgage loans held for sale, net	(124)		218		(342)		(157)	%
Losses on sales of securities available for sale, net	(333,170)		(2,276)		(330,894)		14538	%
Other	11,109		9,026		2,083		23	%
Total noninterest (loss) income	(224,499)		88,292		(312,791)		(354)	%
Noninterest expense:
Salaries and employee benefits	157,702		142,522		15,180		11	%
Office occupancy and equipment	19,680		21,502		(1,822)		(8)	%
Data processing	27,315		29,665		(2,350)		(8)	%
Professional services	7,476		7,482		(6)		—	%
Marketing	3,233		4,225		(992)		(23)	%
Loan expenses	2,210		3,545		(1,335)		(38)	%
Federal Deposit Insurance Corporation ("FDIC") insurance	5,580		3,132		2,448		78	%
Amortization of intangible assets	2,132		1,734		398		23	%
Other	12,614		6,198		6,416		104	%
Total noninterest expense	237,942		220,005		17,937		8	%
(Loss) income before income tax (benefit) expense	(190,070)		133,603		(323,673)		(242)	%
Income tax (benefit) expense	(44,631)		30,915		(75,546)		(244)	%
Net (loss) income	$	(145,439)	$	102,688	$	(248,127)	(242)	%

Share data:
Weighted average common shares outstanding, basic (1)	162,112,223		168,184,528		(6,072,305)		(4)	%
Weighted average common shares outstanding, diluted (1)	162,136,984		168,248,246		(6,111,262)		(4)	%
(Loss) earnings per share, basic	$	(0.90)	$	0.61	$	(1.51)	(247)	%
(Loss) earnings per share, diluted	$	(0.90)	$	0.61	$	(1.51)	(247)	%

(1) Shares held by the Company’s ESOP that have not been allocated to employees in accordance with the terms of the ESOP are not deemed outstanding for earnings per share calculations.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS


	As of and for the three months ended
	Jun 30, 2023						Mar 31, 2023						Jun 30, 2022
(Unaudited, dollars in thousands)	Avg. Balance		Interest		Yield / Cost (5)		Avg. Balance		Interest		Yield / Cost (5)		Avg. Balance		Interest		Yield / Cost (5)
Interest-earning assets:
Loans (1):
Commercial	$	9,920,608	$	121,319	4.91	%	$	9,765,236	$	115,929	4.81	%	$	8,944,652	$	83,586	3.75	%
Residential	2,513,941		21,992		3.51	%	2,513,413		21,614		3.49	%	1,960,014		14,683		3.00	%
Consumer	1,370,011		21,045		6.16	%	1,358,616		20,059		5.99	%	1,309,864		11,494		3.52	%
Total loans	13,804,560		164,356		4.78	%	13,637,265		157,602		4.69	%	12,214,530		109,763		3.60	%
Investment securities	5,885,545		26,435		1.80	%	7,684,665		30,459		1.61	%	8,883,710		33,479		1.51	%
Federal funds sold and other short-term investments	1,174,964		14,851		5.07	%	449,543		5,264		4.75	%	345,731		652		0.76	%
Total interest-earning assets	20,865,069		205,642		3.95	%	21,771,473		193,325		3.60	%	21,443,971		143,894		2.69	%
Non-interest-earning assets	1,084,413						739,270						962,734
Total assets	$	21,949,482					$	22,510,743					$	22,406,705

Interest-bearing liabilities:
Deposits:
Savings	$	1,552,702	$	47	0.01	%	$	1,721,143	$	81	0.02	%	$	2,041,495	$	51	0.01	%
Interest checking	4,270,945		6,141		0.58	%	4,363,528		4,711		0.44	%	4,877,256		2,061		0.17	%
Money market	5,064,469		26,611		2.11	%	5,040,330		20,305		1.63	%	5,069,609		745		0.06	%
Time deposits	2,275,844		23,347		4.11	%	1,931,860		17,836		3.74	%	426,923		204		0.19	%
Total interest-bearing deposits	13,163,960		56,146		1.71	%	13,056,861		42,933		1.33	%	12,415,283		3,061		0.10	%
Borrowings	348,597		4,031		4.64	%	675,056		7,638		4.59	%	35,330		53		0.60	%
Total interest-bearing liabilities	13,512,557		60,177		1.79	%	13,731,917		50,571		1.49	%	12,450,613		3,114		0.10	%
Demand deposit accounts	5,332,045						5,825,269						6,661,920
Other noninterest-bearing liabilities	505,555						493,387						428,373
Total liabilities	19,350,157						20,050,573						19,540,906
Shareholders' equity	2,599,325						2,460,170						2,865,799
Total liabilities and shareholders' equity	$	21,949,482					$	22,510,743					$	22,406,705


Net interest income - FTE			$	145,465					$	142,754					$	140,780
Net interest rate spread (2)					2.16	%					2.11	%					2.59	%
Net interest-earning assets (3)	$	7,352,512					$	8,039,556					$	8,993,358
Net interest margin - FTE (4)					2.80	%					2.66	%					2.63	%



(1) Includes non-accrual loans.
(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4) Net interest margin - FTE represents fully-taxable equivalent net interest income* divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income.
(5) Presented on an annualized basis.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS


	As of and for the six months ended
	Jun 30, 2023						Jun 30, 2022
(Unaudited, dollars in thousands)	Avg. Balance		Interest		Yield / Cost (5)		Avg. Balance		Interest		Yield / Cost (5)
Interest-earning assets:
Loans (1):
Commercial	$	9,843,351	$	237,248	4.86	%	$	8,958,795	$	161,811	3.64	%
Residential	2,513,679		43,605		3.50	%	1,948,816		29,155		3.02	%
Consumer	1,364,345		41,105		6.08	%	1,301,721		21,944		3.40	%
Total loans	13,721,375		321,958		4.73	%	12,209,332		212,910		3.52	%
Non-taxable investment securities	197,755		3,634		3.71	%	262,082		4,645		3.57	%
Taxable investment securities	6,582,380		53,260		1.63	%	8,504,026		58,997		1.40	%
Total investment securities	6,780,135		56,894		1.69	%	8,766,108		63,642		1.46	%
Federal funds sold and other short-term investments	814,257		20,115		4.98	%	672,757		1,088		0.33	%
Total interest-earning assets	21,315,767		398,967		3.77	%	21,648,197		277,640		2.59	%
Non-interest-earning assets	912,120						1,198,409
Total assets	$	22,227,887					$	22,846,606

Interest-bearing liabilities:
Deposits:
Savings	$	1,636,457	$	129	0.02	%	$	2,059,027	$	102	0.01	%
Interest checking	4,316,981		10,853		0.51	%	4,737,418		4,093		0.17	%
Money market	5,052,467		46,916		1.87	%	5,317,559		1,665		0.06	%
Time deposits	2,104,802		41,181		3.95	%	454,226		523		0.23	%
Total interest-bearing deposits	13,110,707		99,079		1.52	%	12,568,230		6,383		0.10	%
Borrowings	510,925		11,669		4.61	%	33,012		92		0.56	%
Total interest-bearing liabilities	13,621,632		110,748		1.64	%	12,601,242		6,475		0.10	%
Demand deposit accounts	5,577,294						6,741,424
Other noninterest-bearing liabilities	498,829						435,443
Total liabilities	19,697,755						19,778,109
Shareholders' equity	2,530,132						3,068,497
Total liabilities and shareholders' equity	$	22,227,887					$	22,846,606


Net interest income - FTE			$	288,219					$	271,165
Net interest rate spread (2)					2.13	%					2.49	%
Net interest-earning assets (3)	$	7,694,135					$	9,046,955
Net interest margin - FTE (4)					2.73	%					2.53	%



(1) Includes non-accrual loans.
(2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities.
(3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.
(4) Net interest margin - FTE represents fully-taxable equivalent net interest income* divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income.
(5) Presented on an annualized basis.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

ASSET QUALITY - NON-PERFORMING ASSETS (1)


	As of
	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022
(Unaudited, dollars in thousands)
Non-accrual loans:
Commercial	$	14,178		$	17,271		$	21,474		$	19,886		$	43,628
Residential	8,796			9,603			9,750			8,513			9,486
Consumer	7,584			7,699			7,380			5,555			6,766
Total non-accrual loans	30,558			34,573			38,604			33,954			59,880
Total accruing loans past due 90 days or more:	—			—			—			—			—
Total non-performing loans	30,558			34,573			38,604			33,954			59,880
Other real estate owned	—			—			—			—			—
Other non-performing assets:	—			—			—			—			—
Total non-performing assets	$	30,558		$	34,573		$	38,604		$	33,954		$	59,880
Total accruing troubled debt restructured ("TDR") (2)	$	—		$	—		$	28,834		$	36,275		$	33,518
Total non-performing loans to total loans	0.22		%	0.25		%	0.28		%	0.26		%	0.48		%
Total non-performing assets to total assets	0.14		%	0.15		%	0.17		%	0.15		%	0.27		%

(1) Non-performing assets are comprised of NPLs, other real estate owned ("OREO"), and non-performing securities. NPLs consist of non-accrual loans and loans that are more than 90 days past due but still accruing interest. OREO consists of real estate properties, which primarily serve as collateral to secure the Company’s loans, that it controls due to foreclosure or acceptance of a deed in lieu of foreclosure.
(2) The Company adopted ASU 2022-02 on January 1, 2023 which eliminated the TDR recognition and measurement guidance. Accordingly, the Company had no TDRs to report as of March 31, 2023 and subsequent periods.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE-OFFS (RECOVERIES)


	Three months ended
	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022
(Unaudited, dollars in thousands)
Average total loans	$	13,803,292		$	13,633,165		$	13,203,450		$	12,521,426		$	12,213,706
Allowance for loan losses, beginning of the period	140,938			142,211			131,663			125,531			124,166
Total cumulative effect of change in accounting principle (1):	—			(1,143)			—			—			—
Charged-off loans:
Commercial and industrial	—			—			256			11			1
Commercial real estate	—			—			—			—			—
Commercial construction	—			—			—			—			—
Business banking	254			343			370			369			608
Residential real estate	—			—			—			—			—
Consumer home equity	—			7			1			—			—
Other consumer	591			561			515			603			490
Total charged-off loans	845			911			1,142			983			1,099
Recoveries on loans previously charged-off:
Commercial and industrial	26			139			248			126			698
Commercial real estate	2			4			38			3			36
Commercial construction	—			—			—			—			—
Business banking	204			481			391			286			464
Residential real estate	18			15			14			56			14
Consumer home equity	—			1			8			6			6
Other consumer	111			116			111			158			196
Total recoveries	361			756			810			635			1,414
Net loans charged-off (recoveries):
Commercial and industrial	(26)			(139)			8			(115)			(697)
Commercial real estate	(2)			(4)			(38)			(3)			(36)
Commercial construction	—			—			—			—			—
Business banking	50			(138)			(21)			83			144
Residential real estate	(18)			(15)			(14)			(56)			(14)
Consumer home equity	—			6			(7)			(6)			(6)
Other consumer	480			445			404			445			294
Total net loans charged-off (recoveries)	484			155			332			348			(315)
Provision for allowance for loan losses	7,501			25			10,880			6,480			1,050
Total allowance for loan losses, end of period	$	147,955		$	140,938		$	142,211		$	131,663		$	125,531
Net charge-offs (recoveries) to average total loans outstanding during this period (2)	0.01		%	0.00		%	0.01		%	0.01		%	(0.01)		%
Allowance for loan losses as a percent of total loans	1.06		%	1.03		%	1.05		%	1.02		%	1.01		%
Allowance for loan losses as a percent of nonperforming loans	484.18		%	407.65		%	368.38		%	387.77		%	209.64		%


(1) For the quarter ended March 31, 2023, represents the adjustment needed to reflect the cumulative day one impact pursuant to the Company’s adoption of ASU 2022-02 (i.e., cumulative effect adjustment related to the adoption of ASU 2022-02 as of January 1, 2023). The adjustment represents a $1.1 million decrease to the allowance attributable to the change in accounting methodology for estimating the allowance for loan losses resulting from the Company’s adoption of the standard.
(2) Presented on an annualized basis.

APPENDIX A: Reconciliation of Non-GAAP Earnings Metrics

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."


	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:
Noninterest income components:
(Income) losses from investments held in rabbi trusts	(3,002)			(2,857)			(3,235)			2,248			7,316
Losses on sales of securities available for sale, net	—			333,170			683			198			104
Gains on sales of other assets	(12)			(1)			(14)			(501)			(1,251)
Noninterest expense components:
Rabbi trust employee benefit expense (income)	1,314			1,274			1,103			(867)			(3,310)
Merger and acquisition expenses	—			—			—			271			—
Defined Benefit Plan settlement loss	—			—			12,045			—			—
Total impact of non-GAAP adjustments	(1,700)			331,586			10,582			1,349			2,859
Less net tax benefit associated with non-GAAP adjustments (1)	1,634			76,377			2,964			384			1,513
Non-GAAP adjustments, net of tax	$	(3,334)		$	255,209		$	7,618		$	965		$	1,346
Operating net income (non-GAAP)	$	45,323		$	61,113		$	49,912		$	55,742		$	52,518

Weighted average common shares outstanding during the period (2):
Basic	162,232,236			161,991,373			162,032,522			163,718,962			166,533,920
Diluted	162,246,675			162,059,431			162,263,547			164,029,649			166,573,627

Earnings (loss) per share, basic	$	0.30		$	(1.20)		$	0.26		$	0.33		$	0.31
Earnings (loss) per share, diluted	$	0.30		$	(1.20)		$	0.26		$	0.33		$	0.31

Operating earnings per share, basic (non-GAAP)	$	0.28		$	0.38		$	0.31		$	0.34		$	0.32
Operating earnings per share, diluted (non-GAAP)	$	0.28		$	0.38		$	0.31		$	0.34		$	0.32

Return on average assets (3)	0.89		%	(3.50)		%	0.75		%	0.97		%	0.92		%
Add:
(Income) losses from investments held in rabbi trusts (3)	(0.05)%			(0.05)%			(0.06)%			0.04%			0.13%
Losses on sales of securities available for sale, net (3)	0.00%			6.00%			0.01%			0.00%			0.00%
Gains on sales of other assets (3)	0.00%			0.00%			0.00%			(0.01)%			(0.02)%
Rabbi trust employee benefit expense (income) (3)	0.02%			0.02%			0.02%			(0.02)%			(0.06)%
Merger and acquisition expenses (3)	0.00%			0.00%			0.00%			0.00%			0.00%
Defined Benefit Plan settlement loss (3)	0.00%			0.00%			0.21%			0.00%			0.00%
Less net tax benefit associated with non-GAAP adjustments (1) (3)	0.03%			1.38%			0.05%			0.01%			0.03%
Operating return on average assets (non-GAAP) (3)	0.83		%	1.09		%	0.88		%	0.97		%	0.94		%

Return on average shareholders' equity (3)	7.51		%	(32.00)		%	6.93		%	7.83		%	7.16		%
Add:
(Income) losses from investments held in rabbi trusts (3)	(0.46)%			(0.47)%			(0.53)%			0.32%			1.02%
Losses on sales of securities available for sale, net (3)	0.00%			54.92%			0.11%			0.03%			0.01%
Gains on sales of other assets (3)	0.00%			0.00%			0.00%			(0.07)%			(0.18)%
Rabbi trust employee benefit expense (income) (3)	0.20%			0.21%			0.18%			(0.12)%			(0.46)%
Merger and acquisition expenses (3)	0.00%			0.00%			0.00%			0.04%			0.00%
Defined Benefit Plan settlement loss (3)	0.00%			0.00%			1.97%			0.00%			0.00%
Less net tax benefit associated with non-GAAP adjustments (1) (3)	0.25%			12.59%			0.49%			0.05%			0.21%
Operating return on average shareholders' equity (non-GAAP) (3)	7.00		%	10.07		%	8.17		%	7.98		%	7.34		%

Average tangible shareholders' equity:
Average total shareholders' equity (GAAP)	$	2,599,325		$	2,460,170		$	2,420,174		$	2,776,691		$	2,865,799
Less: Average goodwill and other intangibles	659,825			660,795			661,841			656,684			654,444
Average tangible shareholders' equity (non-GAAP)	$	1,939,500		$	1,799,375		$	1,758,333		$	2,120,007		$	2,211,355

Return on average tangible shareholders' equity (non-GAAP) (3)	10.06		%	(43.75)		%	9.54		%	10.25		%	9.28		%
Add:
(Income) losses from investments held in rabbi trusts (3)	(0.62)%			(0.64)%			(0.73)%			0.42%			1.33%
Losses on sales of securities available for sale, net (3)	0.00%			75.09%			0.15%			0.04%			0.02%
Gains on sales of other assets (3)	0.00%			0.00%			0.00%			(0.09)%			(0.23)%
Rabbi trust employee benefit expense (income) (3)	0.27%			0.29%			0.25%			(0.16)%			(0.60)%
Merger and acquisition expenses (3)	0.00%			0.00%			0.00%			0.05%			0.00%
Defined Benefit Plan settlement loss (3)	0.00%			0.00%			2.72%			0.00%			0.00%
Less net tax benefit associated with non-GAAP adjustments (1) (3)	0.34%			17.21%			0.67%			0.07%			0.27%
Operating return on average tangible shareholders' equity (non-GAAP) (3)	9.37		%	13.78		%	11.26		%	10.44		%	9.53		%

(1) The net tax benefit associated with these items is generally determined by assessing whether each item is included or excluded from net taxable income and applying our combined statutory tax rate only to those items included in net taxable income. The net tax benefit amount for the six months ended June 30, 2023 resulted from the sale of securities classified as available for sale and included a $23.7 million tax benefit resulting from the transfer of certain securities from Market Street Securities Corp., a wholly owned subsidiary which was liquidated during the first quarter of 2023, to Eastern Bank. Upon the sale of securities in the first quarter of 2023, the Company established a valuation allowance of $17.4 million, which is included in the net tax befit amount, as it was determined at the time it was not more likely than not that the entirety of the deferred tax asset related to the loss on such securities would be realized. The net tax benefit for the three months ended June 30, 2023 was primarily the net effect of changes in management's estimate of the Company's annual taxable income.
(2) Shares held by the Company’s employee stock ownership plan ("ESOP") that have not been allocated to employees in accordance with the terms of the ESOP are not deemed outstanding for earnings per share calculations.
(3) Presented on an annualized basis.

APPENDIX B: Reconciliation of Non-GAAP Operating Revenues and Expenses

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."


	Three Months Ended
	Jun 30, 2023			Mar 31, 2023			Dec 31, 2022			Sep 30, 2022			Jun 30, 2022
(Unaudited, dollars in thousands)
Net interest income (GAAP)	$	141,588		$	138,309		$	149,994		$	152,179		$	137,757
Add:
Tax-equivalent adjustment (non-GAAP) (1)	3,877			4,445			3,780			3,672			3,023
Fully-taxable equivalent net interest income (non-GAAP)	$	145,465		$	142,754		$	153,774		$	155,851		$	140,780

Noninterest income (loss) (GAAP)	$	53,831		$	(278,330)		$	44,516		$	43,353		$	41,877
Less:
Income (losses) from investments held in rabbi trusts	3,002			2,857			3,235			(2,248)			(7,316)
Losses on sales of securities available for sale, net	—			(333,170)			(683)			(198)			(104)
Gains on sales of other assets	12			1			14			501			1,251
Noninterest income on an operating basis (non-GAAP)	$	50,817		$	51,982		$	41,950		$	45,298		$	48,046

Noninterest expense (GAAP)	$	121,648		$	116,294		$	132,757		$	116,840		$	111,139
Less:
Rabbi trust employee benefit expense (income)	1,314			1,274			1,103			(867)			(3,310)
Merger and acquisition expenses	—			—			—			271			—
Defined Benefit Plan settlement loss	—			—			12,045			—			—
Noninterest expense on an operating basis (non-GAAP)	$	120,334		$	115,020		$	119,609		$	117,436		$	114,449

Total revenue (loss) (GAAP)	$	195,419		$	(140,021)		$	194,510		$	195,532		$	179,634
Total operating revenue (non-GAAP)	$	196,282		$	194,736		$	195,724		$	201,149		$	188,826

Efficiency ratio (GAAP)	62.25		%	(83.05)		%	68.25		%	59.75		%	61.87		%
Operating efficiency ratio (non-GAAP)	61.31		%	59.06		%	61.11		%	58.38		%	60.61		%

(1) Interest income on tax-exempt loans and investment securities has been adjusted to an FTE basis using a marginal tax rate of 21.8%, 21.7%, 21.6%, 21.5%, and 21.5% for the three months ended June 30, 2023, March 31, 2023, December 31, 2022, September 30, 2022, and June 30, 2022, respectively.

APPENDIX C: Reconciliation of Non-GAAP Capital Metrics

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."


	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		$	2,718,396
Less: Goodwill and other intangibles	658,993			660,165			661,126			662,222			653,853
Tangible shareholders' equity (non-GAAP)	1,867,779			1,918,958			1,810,664			1,753,941			2,064,543

Tangible assets:
Total assets (GAAP)	21,583,493			22,720,530			22,646,858			22,042,933			22,350,848
Less: Goodwill and other intangibles	658,993			660,165			661,126			662,222			653,853
Tangible assets (non-GAAP)	$	20,924,500		$	22,060,365		$	21,985,732		$	21,380,711		$	21,696,995

Shareholders' equity to assets ratio (GAAP)	11.71		%	11.35		%	10.91		%	10.96		%	12.16		%
Tangible shareholders' equity to tangible assets ratio (non-GAAP)	8.93		%	8.70		%	8.24		%	8.20		%	9.52		%

Common shares outstanding	176,376,675			176,328,426			176,172,073			177,772,553			179,253,801

Book value per share (GAAP)	$	14.33		$	14.63		$	14.03		$	13.59		$	15.17
Tangible book value per share (non-GAAP)	$	10.59		$	10.88		$	10.28		$	9.87		$	11.52

APPENDIX D: Tangible Shareholders’ Equity Roll Forward Analysis

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."


	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)		(136,470)		1,238
Retained earnings	1,704,470		1,672,169		32,301
AOCI, net of tax - available for sale securities	(646,611)		(588,125)		(58,486)
AOCI, net of tax - pension	6,381		6,742		(361)
AOCI, net of tax - cash flow hedge	(60,752)		(28,481)		(32,271)
Total shareholders' equity:	$	2,526,772	$	2,579,123	$	(52,351)
Less: Goodwill and other intangibles	658,993		660,165		(1,172)
Tangible shareholders' equity (non-GAAP)	$	1,867,779	$	1,918,958	$	(51,179)

Common shares outstanding	176,376,675		176,328,426		48,249

Per share:
Common stock	$	0.01	$	0.01	$	—
Additional paid in capital	9.39		9.37		0.03
Unallocated ESOP common stock	(0.77)		(0.77)		0.01
Retained earnings	9.66		9.48		0.18
AOCI, net of tax - available for sale securities	(3.67)		(3.34)		(0.33)
AOCI, net of tax - pension	0.04		0.04		—
AOCI, net of tax - cash flow hedge	(0.34)		(0.16)		(0.18)
Total shareholders' equity:	$	14.33	$	14.63	$	(0.30)
Less: Goodwill and other intangibles	3.74		3.74		(0.01)
Tangible shareholders' equity (non-GAAP)	$	10.59	$	10.88	$	(0.29)

APPENDIX E: HTM-Marked Tangible Common Equity Ratio

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."


	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: After-tax fair value mark on HTM securities (1)	37,462			32,841
HTM-marked tangible shareholders' equity (non-GAAP)	1,830,317			1,886,117

HTM-marked tangible assets:
Total assets (GAAP)	21,583,493			22,720,530
Less: Goodwill and other intangibles	658,993			660,165
Less: After-tax fair value mark on HTM securities (1)	37,462			32,841
HTM-marked tangible assets (non-GAAP)	20,887,038			22,027,524

Shareholders' equity to assets ratio (GAAP)	11.71		%	11.35		%
HTM-marked tangible shareholders' equity to HTM-marked tangible assets ratio (non-GAAP)	8.76		%	8.56		%

(1) Assumes pre-tax mark-to-market adjustments are tax-effected at an effective tax rate of 28.23%.

APPENDIX F: Regulatory Capital Ratios


As of June 30, 2023
(Unaudited, dollars in thousands)	Eastern Bankshares, Inc.1		Minimum Capital Required to be Well-Capitalized under Prompt Corrective Action Provisions		Capital Amount Above Minimums1
Tier 1 capital (to average assets) leverage	11.72	%	5.00	%	$	1,483,557
Common equity Tier 1 capital (to risk-weighted assets)	15.69	%	6.50	%	$	1,515,326
Tier 1 capital (to risk-weighted assets)	15.69	%	8.00	%	$	1,267,993
Total regulatory capital (to risk-weighted assets)	16.68	%	10.00	%	$	1,101,456


1Regulatory capital figures are preliminary estimates.

Document and Entity Information Document	Jul. 27, 2023
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 27, 2023
Entity Registrant Name	EASTERN BANKSHARES, INC.
Entity Central Index Key	0001810546
Amendment Flag	false
Entity Incorporation, State or Country Code	MA
Entity File Number	001-39610
Entity Tax Identification Number	84-4199750
Entity Address, Address Line One	265 Franklin Street
Entity Address, City or Town	Boston
Entity Address, State or Province	MA
Entity Address, Postal Zip Code	02110
City Area Code	800
Local Phone Number	327-8376
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock
Trading Symbol	EBC
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	false