8-K
Eastern Bankshares, Inc. (EBC)
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): January 26, 2023
EASTERN BANKSHARES, INC.
(Exact Name of Registrant as Specified in Charter)
| Massachusetts | 001-39610 | 84-4199750 | |||||
|---|---|---|---|---|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation or Organization) | (Commission<br>File Number) | (I.R.S. Employer<br>Identification No.) | 265 Franklin Street | 02110 | |||
| --- | --- | --- | --- | ||||
| Boston | , | MA | |||||
| (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<br>Symbol(s) | Name of each exchange<br>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 January 26, 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 December 31, 2022. 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 December 31, 2022, the Company announced the approval by its Board of Directors of a regular quarterly cash dividend of $0.10 per share payable on March 15, 2023 to shareholders of record on March 3, 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 January 26, 2023.
Item 9.01 Financial Statements and Exhibits.
(d)Exhibits
| Exhibit | Description |
|---|---|
| 99.1 | Press release datedJanuary 26, 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: January 26, 2023 | By: | /s/ James B. Fitzgerald |
| James B. Fitzgerald | ||
| Chief Financial Officer |
Document
Exhibit 99.1
Eastern Bankshares, Inc. Reports Fourth Quarter 2022 Financial Results
Company Declares Quarterly Cash Dividend
BOSTON, January 26, 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 2022 fourth quarter financial results and the declaration of a quarterly cash dividend. Net income for the fourth quarter of 2022 was $42.3 million, or $0.26 per diluted share, compared to net income of $54.8 million, or $0.33 per diluted share, reported for the third quarter of 2022. Operating net income* for the fourth quarter of 2022 was $49.9 million, or $0.31 per diluted share, compared to $55.7 million, or $0.34 per diluted share, reported for the prior quarter.
“I’d like to thank my 2,100 colleagues at Eastern for all of their good work in making 2022 such a successful year for the Company” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “Together, we posted record net income for 2022 of $199.8 million, 29% higher than 2021. As always, this bottom line result is the product of a number of significant achievements, including the completion of the integration of Century Bank, record commercial loan and home equity originations, outstanding asset quality, the acquisition of two insurance agencies, the continued upgrade of our technology platforms, as well as many other notable accomplishments. All of this, along with the strength of the underlying franchise, is a testament to their hard work and tremendous commitment."
HIGHLIGHTS FOR THE FOURTH QUARTER OF 2022
•Net income of $42.3 million, or $0.26 per diluted share, and operating net income* of $49.9 million, or $0.31 per diluted share, for the fourth quarter of 2022.
•Net interest income of $150.0 million for the fourth quarter of 2022 was 1% lower than the prior quarter as the increase in interest income was more than offset by the increase in interest expense.
•The net interest margin on a fully tax equivalent (“FTE”) basis* of 2.81% for the fourth quarter was 6 basis points lower than the prior quarter.
•Core loan growth, excluding residential loans purchased from Embrace Home Loans, was 11.8% on an annualized basis. Commercial loan growth was 13.2% on an annualized basis.
•Asset quality remains strong, with annualized net charge-offs of just 0.01% of average total loans and non-performing loans of $38.6 million, or just 0.28% of total loans.
Please refer to Appendices A and B to this press release for reconciliations of operating net income* and fully-taxable equivalent net interest income*, respectively.
BALANCE SHEET
Total assets were $22.6 billion at December 31, 2022, representing an increase of $603.9 million, or 3%, from September 30, 2022.
•Total securities decreased $159.2 million, or 2%, from the prior quarter, to $7.2 billion, primarily due to principal runoff and security sales, partially offset by a reduction in the unrealized losses on the portfolio.
•Total loans were $13.6 billion, representing an increase of $671.6 million, or 5%, from the prior quarter. The increase was driven by strong loan growth in all major categories. Commercial loans grew $313.0 million, residential loans grew $342.0 million, and consumer loans grew $16.6 million, reflecting growth of 13%, 64%, and 5%, respectively, on an annualized basis. Residential loans at December 31, 2022 and September 30, 2022 included purchased loans from Embrace Home Loans totaling $366.7 million and $77.7 million excluding purchase premiums, respectively.
•Deposits totaled $19.0 billion, representing an increase of $241.0 million, or 1%, from the prior quarter. Deposit levels were supported by brokered certificates of deposit which totaled $928.6 million at year end. On a quarterly average basis, deposits decreased $418.3 million from the prior quarter.
•Borrowed funds increased $318.1 million from the prior quarter to $740.8 million to provide funding for strong loan growth in the fourth quarter.
•Shareholders’ equity was $2.5 billion, representing an increase of $55.6 million from the prior quarter driven primarily by increases in accumulated other comprehensive income and retained earnings, partially offset by share repurchases. Please refer to Appendix D to this press release for a roll forward of tangible shareholders’ equity*.
•At December 31, 2022, book value per share was $14.03 and tangible book value per share* was $10.28.
Please refer to Appendix C to this press release for a reconciliation of book value per share and tangible book value per share*.
NET INTEREST INCOME
Net interest income was $150.0 million for the fourth quarter of 2022, compared to $152.2 million in the prior quarter, representing a decrease of $2.2 million.
•The decrease in net interest income on a consecutive quarter basis was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs. This was partially offset by an increase in average interest-earning asset balances of $170.3 million from the prior quarter, attributable primarily to loan growth.
•The net interest margin on a FTE basis* was 2.81% for the fourth quarter, representing a 6 basis point decrease from the prior quarter, as funding costs increased faster than asset yields.
•Total interest-earning asset yields increased 29 basis points from the prior quarter to 3.27%, due primarily to increased loan yields as a result of higher short-term interest rates during the quarter.
•Total interest-bearing funding costs increased 59 basis points from the prior quarter to 77 basis points, due to core deposit pricing increases and increases in brokered deposits and borrowings during the quarter.
Please refer to Appendix B to this press release for a reconciliation of operating revenues and expenses* and of fully-taxable equivalent net interest income*.
NONINTEREST INCOME
Noninterest income was $44.5 million for the fourth quarter of 2022, compared to $43.4 million for the prior quarter, representing an increase of $1.2 million. Noninterest income on an operating basis* was $42.0 million for the fourth quarter of 2022, compared to $45.3 million for the prior quarter, a decrease of $3.3 million.
•Insurance commissions decreased $1.7 million to $22.0 million in the fourth quarter, compared to $23.8 million in the prior quarter. Compared to the comparable prior year quarter, insurance commissions increased $1.1 million, or 5%.
•Service charges on deposit accounts increased $0.1 million on a consecutive quarter basis to $6.8 million.
•Trust and investment advisory fees decreased $0.2 million on a consecutive quarter basis to $5.6 million.
•Debit card processing fees were unchanged from the prior quarter at $3.2 million.
•Loan-level interest rate swap income decreased $1.6 million to a loss of $0.1 million in the fourth quarter, compared to income of $1.6 million in the prior quarter. The decrease was driven primarily by a decrease in the fair value of such interest rate swap transactions.
•Market performance drove gains on investments held in rabbi trust accounts totaling $3.2 million in the fourth quarter compared to losses of $2.2 million in the prior quarter.
•Realized losses on sales of available for sale securities were $0.7 million in the fourth quarter compared to $0.2 million in the prior quarter.
•Other noninterest income decreased $0.3 million in the fourth quarter to $4.3 million.
Please refer to Appendix B to this press release for a reconciliation of operating revenues and expenses*.
NONINTEREST EXPENSE
Noninterest expense was $132.8 million for the fourth quarter of 2022, compared to $116.8 million in the prior quarter, representing an increase of $15.9 million. Noninterest expense on an operating basis* for the fourth quarter of 2022 was $119.6 million, compared to $117.4 million in the prior quarter, an increase of $2.2 million.
•Salaries and employee benefits expense was $77.6 million in the fourth quarter, representing a decrease of $0.5 million from the prior quarter.
•Office occupancy and equipment expense was $9.6 million in the fourth quarter, a decrease of $0.1 million from the prior quarter.
•Data processing expenses were $14.3 million in the fourth quarter, an increase of $1.0 million from the prior quarter, due primarily to higher software services and support expense.
•Professional services expense was $4.6 million in the fourth quarter, a decrease of $0.2 million from the prior quarter.
•Marketing expense was $3.1 million in the fourth quarter, an increase of $0.9 million from the prior quarter, due primarily to higher advertising expense during the quarter.
•Loan expenses were $0.6 million in the fourth quarter, a decrease of $1.6 million from the prior quarter, due in part to a decrease in legal and appraisal expense.
•Other noninterest expense was $20.4 million in the fourth quarter, an increase of $16.4 million from the prior quarter, due primarily to a previously disclosed Defined Benefit Plan settlement accounting charge of $12.0 million, as well as an increase in the provision for credit losses on off-balance sheet credit exposure.
Please refer to Appendix B to this press release for a reconciliation of operating revenues and expenses*.
ASSET QUALITY
The allowance for loan losses was $142.2 million at December 31, 2022, or 1.05% of total loans, compared to $131.7 million or 1.02% of total loans at September 30, 2022. The Company recorded a provision for loan losses totaling $10.9 million in the fourth quarter of 2022, of which $7.2 million was due to loan growth.
Non-performing loans totaled $38.6 million at December 31, 2022 compared to $34.0 million at the end of the prior quarter. During the fourth quarter of 2022, the Company recorded total net charge-offs of $0.3 million, or 0.01% of average total loans on an annualized basis, compared to $0.3 million or 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 March 15, 2023 to shareholders of record as of the close of business on March 3, 2023.
The Company repurchased 1,547,934 shares of its common stock during the fourth quarter of 2022 at a weighted average price of $19.91 excluding commissions, for an aggregate purchase price of $30.8 million.
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 December 31, 2022, 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 fourth quarter 2022 earnings will be held on Friday, January 27, 2023 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (888) 396-8049 from within the U.S. and reference conference ID 15857557. 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 December 31, 2022, Eastern Bank had approximately $23 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), the operating efficiency ratio, and the ratio of noninterest income to total revenue on an operating basis. 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, and (viii) the non-cash pension settlement charge recognized related to the Defined Benefit Plan. 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, 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-D 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 developments in the Company’s market relating to the COVID-19 pandemic, including the severity and duration of the associated economic slowdown; 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 and mix or costs of sources of funding; 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; 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 Company’s ability to successfully implement its risk mitigation strategies; and asset and credit quality deterioration, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; 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) | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | ||||||||||
| Earnings data | |||||||||||||||
| Net interest income | $ | 149,994 | $ | 152,179 | $ | 137,757 | $ | 128,124 | $ | 122,437 | |||||
| Noninterest income | 44,516 | 43,353 | 41,877 | 46,415 | 49,001 | ||||||||||
| Total revenue | 194,510 | 195,532 | 179,634 | 174,539 | 171,438 | ||||||||||
| Noninterest expense | 132,757 | 116,840 | 111,139 | 108,866 | 143,602 | ||||||||||
| Pre-tax, pre-provision income | 61,753 | 78,692 | 68,495 | 65,673 | 27,836 | ||||||||||
| Provision for (release of) allowance for loan losses | 10,880 | 6,480 | 1,050 | (485) | (4,318) | ||||||||||
| Pre-tax income | 50,873 | 72,212 | 67,445 | 66,158 | 32,154 | ||||||||||
| Net income | 42,294 | 54,777 | 51,172 | 51,516 | 35,087 | ||||||||||
| Operating net income (non-GAAP) | 49,912 | 55,742 | 52,518 | 55,107 | 44,860 | ||||||||||
| Per-share data | |||||||||||||||
| Earnings per share, basic | $ | 0.26 | $ | 0.33 | $ | 0.31 | $ | 0.30 | $ | 0.20 | |||||
| Earnings per share, diluted | $ | 0.26 | $ | 0.33 | $ | 0.31 | $ | 0.30 | $ | 0.20 | |||||
| Operating earnings per share, basic (non-GAAP) | $ | 0.31 | $ | 0.34 | $ | 0.32 | $ | 0.32 | $ | 0.26 | |||||
| Operating earnings per share, diluted (non-GAAP) | $ | 0.31 | $ | 0.34 | $ | 0.32 | $ | 0.32 | $ | 0.26 | |||||
| Book value per share | $ | 14.03 | $ | 13.59 | $ | 15.17 | $ | 16.40 | $ | 18.28 | |||||
| Tangible book value per share (non-GAAP) | $ | 10.28 | $ | 9.87 | $ | 11.52 | $ | 12.83 | $ | 14.80 | |||||
| Profitability | |||||||||||||||
| Return on average assets (1) | 0.75 | % | 0.97 | % | 0.92 | % | 0.90 | % | 0.67 | % | |||||
| Operating return on average assets (non-GAAP) (1) | 0.88 | % | 0.97 | % | 0.94 | % | 0.96 | % | 0.86 | % | |||||
| Return on average shareholders' equity (1) | 6.93 | % | 7.83 | % | 7.16 | % | 6.38 | % | 4.07 | % | |||||
| Operating return on average shareholders' equity (1) | 8.17 | % | 7.98 | % | 7.34 | % | 6.82 | % | 5.19 | % | |||||
| Return on average tangible shareholders' equity (non-GAAP) (1) | 9.54 | % | 10.25 | % | 9.28 | % | 7.96 | % | 4.80 | % | |||||
| Operating return on average tangible shareholders' equity (non-GAAP) (1) | 11.26 | % | 10.44 | % | 9.53 | % | 8.53 | % | 6.14 | % | |||||
| Net interest margin (FTE) (1) | 2.81 | % | 2.87 | % | 2.63 | % | 2.42 | % | 2.54 | % | |||||
| Cost of deposits (1) | 0.37 | % | 0.10 | % | 0.06 | % | 0.07 | % | 0.06 | % | |||||
| Fee income ratio | 22.89 | % | 22.17 | % | 23.31 | % | 26.59 | % | 28.58 | % | |||||
| Efficiency ratio | 68.25 | % | 59.75 | % | 61.87 | % | 62.37 | % | 83.76 | % | |||||
| Operating efficiency ratio (non-GAAP) | 61.11 | % | 58.38 | % | 60.61 | % | 60.39 | % | 65.21 | % | |||||
| Balance Sheet (end of period) | |||||||||||||||
| Total assets | $ | 22,646,858 | $ | 22,042,933 | $ | 22,350,848 | $ | 22,836,072 | $ | 23,512,128 | |||||
| Total loans | 13,575,531 | 12,903,954 | 12,398,694 | 12,182,203 | 12,281,510 | ||||||||||
| Total deposits | 18,974,359 | 18,733,381 | 19,163,801 | 19,392,816 | 19,628,311 | ||||||||||
| Total loans / total deposits | 72 | % | 69 | % | 65 | % | 63 | % | 63 | % | |||||
| Asset quality | |||||||||||||||
| Allowance for loan losses ("ALLL") (2) | $ | 142,211 | $ | 131,663 | $ | 125,531 | $ | 124,166 | $ | 97,787 | |||||
| ALLL / total nonperforming loans ("NPLs") | 368.38 | % | 387.77 | % | 209.64 | % | 367.13 | % | 279.53 | % | |||||
| Total NPLs / total loans | 0.28 | % | 0.26 | % | 0.48 | % | 0.28 | % | 0.29 | % | |||||
| Net charge-offs (recoveries) ("NCOs") / average total loans (1) | 0.01 | % | 0.01 | % | (0.01) | % | 0.01 | % | 0.05 | % | |||||
| Capital adequacy | |||||||||||||||
| Shareholders' equity / assets | 10.91 | % | 10.96 | % | 12.16 | % | 13.17 | % | 14.49 | % | |||||
| Tangible shareholders' equity / tangible assets (non-GAAP) | 8.24 | % | 8.20 | % | 9.52 | % | 10.61 | % | 12.06 | % | |||||
| (1) Presented on an annualized basis. | |||||||||||||||
| (2) The Company adopted ASU 2016-13 on January 1, 2022 using the modified retrospective approach. Accordingly, at March 31, 2022 and thereafter, the allowance for loan losses was determined in accordance with ASC 326, “Financial Instruments-Credit Losses” and ASC 310, “Receivables,” as amended. At December 31, 2021 and prior, the allowance for loan losses was determined in accordance with ASC 450, “Contingencies” and ASC 310, “Receivables.” |
EASTERN BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| As of | Dec 31, 2022 change from | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Unaudited, dollars in thousands) | Dec 31, 2022 | Sep 30, 2022 | Dec 31, 2021 | Sep 30, 2022 | Dec 31, 2021 | |||||||
| ASSETS | △ | △ % | △ | △ % | ||||||||
| Cash and due from banks | $ | 106,040 | $ | 102,776 | $ | 144,634 | 3 | % | (27) | % | ||
| Short-term investments | 63,465 | 55,661 | 1,087,158 | 7,804 | 14 | % | (1,023,693) | (94) | % | |||
| Cash and cash equivalents | 169,505 | 158,437 | 1,231,792 | 11,068 | 7 | % | (1,062,287) | (86) | % | |||
| Available for sale ("AFS") securities (1) | 6,690,778 | 6,844,615 | 8,511,224 | (153,837) | (2) | % | (1,820,446) | (21) | % | |||
| Held to maturity ("HTM") securities (1) | 476,647 | 481,963 | — | (5,316) | (1) | % | 476,647 | — | % | |||
| Total securities | 7,167,425 | 7,326,578 | 8,511,224 | (159,153) | (2) | % | (1,343,799) | (16) | % | |||
| Loans held for sale | 4,543 | 951 | 1,206 | 3,592 | 378 | % | 3,337 | 277 | % | |||
| Loans: | ||||||||||||
| Commercial and industrial | 3,150,946 | 3,023,729 | 2,960,527 | 127,217 | 4 | % | 190,419 | 6 | % | |||
| Commercial real estate | 5,155,323 | 4,985,654 | 4,522,513 | 169,669 | 3 | % | 632,810 | 14 | % | |||
| Commercial construction | 336,276 | 314,193 | 222,328 | 22,083 | 7 | % | 113,948 | 51 | % | |||
| Business banking | 1,090,492 | 1,096,436 | 1,334,694 | (5,944) | (1) | % | (244,202) | (18) | % | |||
| Total commercial loans | 9,733,037 | 9,420,012 | 9,040,062 | 313,025 | 3 | % | 692,975 | 8 | % | |||
| Residential real estate | 2,460,849 | 2,118,852 | 1,926,810 | 341,997 | 16 | % | 534,039 | 28 | % | |||
| Consumer home equity | 1,187,547 | 1,168,476 | 1,100,153 | 19,071 | 2 | % | 87,394 | 8 | % | |||
| Other consumer | 194,098 | 196,614 | 214,485 | (2,516) | (1) | % | (20,387) | (10) | % | |||
| Total loans | 13,575,531 | 12,903,954 | 12,281,510 | 671,577 | 5 | % | 1,294,021 | 11 | % | |||
| Allowance for loan losses | (142,211) | (131,663) | (97,787) | (10,548) | 8 | % | (44,424) | 45 | % | |||
| Unamortized prem./disc. and def. fees | (13,003) | (19,349) | (26,442) | 6,346 | (33) | % | 13,439 | (51) | % | |||
| Net loans | 13,420,317 | 12,752,942 | 12,157,281 | 667,375 | 5 | % | 1,263,036 | 10 | % | |||
| Federal Home Loan Bank stock, at cost | 41,363 | 18,714 | 10,904 | 22,649 | 121 | % | 30,459 | 279 | % | |||
| Premises and equipment | 62,656 | 63,261 | 80,984 | (605) | (1) | % | (18,328) | (23) | % | |||
| Bank-owned life insurance | 160,790 | 159,838 | 157,091 | 952 | 1 | % | 3,699 | 2 | % | |||
| Goodwill and other intangibles, net | 661,126 | 662,222 | 649,703 | (1,096) | — | % | 11,423 | 2 | % | |||
| Deferred income taxes, net | 331,648 | 342,550 | 76,535 | (10,902) | (3) | % | 255,113 | 333 | % | |||
| Prepaid expenses | 165,900 | 180,742 | 179,330 | (14,842) | (8) | % | (13,430) | (7) | % | |||
| Other assets | 461,585 | 376,698 | 456,078 | 84,887 | 23 | % | 5,507 | 1 | % | |||
| Total assets | $ | 22,646,858 | $ | 22,042,933 | $ | 23,512,128 | 3 | % | (4) | % | ||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Deposits: | ||||||||||||
| Demand | $ | 6,240,637 | $ | 6,582,122 | $ | 7,020,864 | (5) | % | (11) | % | ||
| Interest checking accounts | 4,568,122 | 5,047,018 | 4,478,566 | (478,896) | (9) | % | 89,556 | 2 | % | |||
| Savings accounts | 1,831,123 | 1,990,188 | 2,077,495 | (159,065) | (8) | % | (246,372) | (12) | % | |||
| Money market investment | 4,710,095 | 4,757,477 | 5,525,005 | (47,382) | (1) | % | (814,910) | (15) | % | |||
| Certificates of deposit | 1,624,382 | 356,576 | 526,381 | 1,267,806 | 356 | % | 1,098,001 | 209 | % | |||
| Total deposits | 18,974,359 | 18,733,381 | 19,628,311 | 240,978 | 1 | % | (653,952) | (3) | % | |||
| Borrowed funds: | ||||||||||||
| Federal Home Loan Bank advances | 704,084 | 384,215 | 14,020 | 319,869 | 83 | % | 690,064 | 4922 | % | |||
| Escrow deposits of borrowers | 22,314 | 21,853 | 20,258 | 461 | 2 | % | 2,056 | 10 | % | |||
| Interest rate swap collateral funds | 14,430 | 16,650 | — | (2,220) | (13) | % | 14,430 | — | % | |||
| Total borrowed funds | 740,828 | 422,718 | 34,278 | 318,110 | 75 | % | 706,550 | 2061 | % | |||
| Other liabilities | 459,881 | 470,671 | 443,187 | (10,790) | (2) | % | 16,694 | 4 | % | |||
| Total liabilities | 20,175,068 | 19,626,770 | 20,105,776 | 548,298 | 3 | % | 69,292 | — | % | |||
| Shareholders' equity: | ||||||||||||
| Common shares | 1,762 | 1,778 | 1,863 | (16) | (1) | % | (101) | (5) | % | |||
| Additional paid-in capital | 1,649,141 | 1,676,396 | 1,835,241 | (27,255) | (2) | % | (186,100) | (10) | % | |||
| Unallocated common shares held by the employee stock ownership plan ("ESOP") | (137,696) | (138,950) | (142,709) | 1,254 | (1) | % | 5,013 | (4) | % | |||
| Retained earnings | 1,881,775 | 1,855,757 | 1,768,653 | 26,018 | 1 | % | 113,122 | 6 | % | |||
| Accumulated other comprehensive income ("AOCI"), net of tax | (923,192) | (978,818) | (56,696) | 55,626 | (6) | % | (866,496) | 1528 | % | |||
| Total shareholders' equity | 2,471,790 | 2,416,163 | 3,406,352 | 55,627 | 2 | % | (934,562) | (27) | % | |||
| Total liabilities and shareholders' equity | $ | 22,646,858 | $ | 22,042,933 | $ | 23,512,128 | 3 | % | (4) | % | ||
| (1) AFS and HTM securities represented at fair value and amortized cost, respectively. |
All values are in US Dollars.
EASTERN BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| Three months ended | Three months ended Dec 31, 2022 change from three months ended | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (Unaudited, dollars in thousands, except per-share data) | Dec 31, 2022 | Sep 30, 2022 | Dec 31, 2021 | Sep 30, 2022 | Dec 31, 2021 | |||||||
| Interest and dividend income: | △ | △ % | △ | △ % | ||||||||
| Interest and fees on loans | $ | 142,446 | $ | 124,992 | $ | 101,275 | 14 | % | 41 | % | ||
| Taxable interest and dividends on securities | 30,413 | 29,280 | 21,335 | 1,133 | 4 | % | 9,078 | 43 | % | |||
| Non-taxable interest and dividends on securities | 1,594 | 1,917 | 1,815 | (323) | (17) | % | (221) | (12) | % | |||
| Interest on federal funds sold and other short-term investments | 545 | 1,638 | 452 | (1,093) | (67) | % | 93 | 21 | % | |||
| Total interest and dividend income | 174,998 | 157,827 | 124,877 | 17,171 | 11 | % | 50,121 | 40 | % | |||
| Interest expense: | ||||||||||||
| Interest on deposits | 17,457 | 4,781 | 2,398 | 12,676 | 265 | % | 15,059 | 628 | % | |||
| Interest on borrowings | 7,547 | 867 | 42 | 6,680 | 770 | % | 7,505 | 17869 | % | |||
| Total interest expense | 25,004 | 5,648 | 2,440 | 19,356 | 343 | % | 22,564 | 925 | % | |||
| Net interest income | 149,994 | 152,179 | 122,437 | (2,185) | (1) | % | 27,557 | 23 | % | |||
| Provision for (release of) allowance for loan losses | 10,880 | 6,480 | (4,318) | 4,400 | 68 | % | 15,198 | (352) | % | |||
| Net interest income after provision for (release of) allowance for loan losses | 139,114 | 145,699 | 126,755 | (6,585) | (5) | % | 12,359 | 10 | % | |||
| Noninterest income: | ||||||||||||
| Insurance commissions | 22,049 | 23,788 | 20,937 | (1,739) | (7) | % | 1,112 | 5 | % | |||
| Service charges on deposit accounts | 6,834 | 6,708 | 7,261 | 126 | 2 | % | (427) | (6) | % | |||
| Trust and investment advisory fees | 5,626 | 5,832 | 6,541 | (206) | (4) | % | (915) | (14) | % | |||
| Debit card processing fees | 3,227 | 3,249 | 3,169 | (22) | (1) | % | 58 | 2 | % | |||
| Interest rate swap income | (78) | 1,562 | 512 | (1,640) | (105) | % | (590) | (115) | % | |||
| Gains (losses) from investments held in rabbi trusts | 3,235 | (2,248) | 4,444 | 5,483 | (244) | % | (1,209) | (27) | % | |||
| Gains on sales of mortgage loans held for sale, net | 8 | 22 | 561 | (14) | (64) | % | (553) | (99) | % | |||
| Losses on sales of securities available for sale, net | (683) | (198) | — | (485) | 245 | % | (683) | — | % | |||
| Other | 4,298 | 4,638 | 5,576 | (340) | (7) | % | (1,278) | (23) | % | |||
| Total noninterest income | 44,516 | 43,353 | 49,001 | 1,163 | 3 | % | (4,485) | (9) | % | |||
| Noninterest expense: | ||||||||||||
| Salaries and employee benefits | 77,604 | 78,060 | 96,362 | (456) | (1) | % | (18,758) | (19) | % | |||
| Office occupancy and equipment | 9,559 | 9,703 | 16,194 | (144) | (1) | % | (6,635) | (41) | % | |||
| Data processing | 14,314 | 13,294 | 12,947 | 1,020 | 8 | % | 1,367 | 11 | % | |||
| Professional services | 4,566 | 4,767 | 9,188 | (201) | (4) | % | (4,622) | (50) | % | |||
| Marketing | 3,096 | 2,219 | 1,955 | 877 | 40 | % | 1,141 | 58 | % | |||
| Loan expenses | 627 | 2,211 | 1,907 | (1,584) | (72) | % | (1,280) | (67) | % | |||
| Federal Deposit Insurance Corporation ("FDIC") insurance | 1,540 | 1,578 | 1,237 | (38) | (2) | % | 303 | 24 | % | |||
| Amortization of intangible assets | 1,097 | 1,033 | 726 | 64 | 6 | % | 371 | 51 | % | |||
| Other | 20,354 | 3,975 | 3,086 | 16,379 | 412 | % | 17,268 | 560 | % | |||
| Total noninterest expense | 132,757 | 116,840 | 143,602 | 15,917 | 14 | % | (10,845) | (8) | % | |||
| Income before income tax expense (benefit) | 50,873 | 72,212 | 32,154 | (21,339) | (30) | % | 18,719 | 58 | % | |||
| Income tax expense (benefit) | 8,579 | 17,435 | (2,933) | (8,856) | (51) | % | 11,512 | (392) | % | |||
| Net income | $ | 42,294 | $ | 54,777 | $ | 35,087 | (23) | % | 21 | % | ||
| Share data: | ||||||||||||
| Earnings per share, basic | $ | 0.26 | $ | 0.33 | $ | 0.20 | ||||||
| Earnings per share, diluted | $ | 0.26 | $ | 0.33 | $ | 0.20 |
All values are in US Dollars.
EASTERN BANKSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
| Twelve months ended | |||||||
|---|---|---|---|---|---|---|---|
| (Unaudited, dollars in thousands, except per-share data) | Dec 31, 2022 | Dec 31, 2021 | Change | ||||
| Interest and dividend income: | △ | △ % | |||||
| Interest and fees on loans | $ | 476,041 | $ | 367,585 | 30 | % | |
| Taxable interest and dividends on securities | 118,690 | 58,312 | 60,378 | 104 | % | ||
| Non-taxable interest and dividends on securities | 7,179 | 7,376 | (197) | (3) | % | ||
| Interest on federal funds sold and other short-term investments | 3,271 | 1,886 | 1,385 | 73 | % | ||
| Total interest and dividend income | 605,181 | 435,159 | 170,022 | 39 | % | ||
| Interest expense: | |||||||
| Interest on deposits | 28,621 | 5,167 | 23,454 | 454 | % | ||
| Interest on borrowings | 8,506 | 165 | 8,341 | 5055 | % | ||
| Total interest expense | 37,127 | 5,332 | 31,795 | 596 | % | ||
| Net interest income | 568,054 | 429,827 | 138,227 | 32 | % | ||
| Provision for (release of) allowance for loan losses | 17,925 | (9,686) | 27,611 | (285) | % | ||
| Net interest income after provision for (release of) allowance for loan losses | 550,129 | 439,513 | 110,616 | 25 | % | ||
| Noninterest income: | |||||||
| Insurance commissions | 99,232 | 94,704 | 4,528 | 5 | % | ||
| Service charges on deposit accounts | 30,392 | 24,271 | 6,121 | 25 | % | ||
| Trust and investment advisory fees | 23,593 | 24,588 | (995) | (4) | % | ||
| Debit card processing fees | 12,644 | 12,118 | 526 | 4 | % | ||
| Interest rate swap income | 6,009 | 5,634 | 375 | 7 | % | ||
| (Losses) income from investments held in rabbi trusts | (10,762) | 10,217 | (20,979) | (205) | % | ||
| Gains on sales of mortgage loans held for sale, net | 248 | 3,605 | (3,357) | (93) | % | ||
| (Losses) gains on sales of securities available for sale, net | (3,157) | 1,166 | (4,323) | (371) | % | ||
| Other | 17,962 | 16,852 | 1,110 | 7 | % | ||
| Total noninterest income | 176,161 | 193,155 | (16,994) | (9) | % | ||
| Noninterest expense: | |||||||
| Salaries and employee benefits | 298,186 | 295,916 | 2,270 | 1 | % | ||
| Office occupancy and equipment | 40,764 | 40,465 | 299 | 1 | % | ||
| Data processing | 57,273 | 50,839 | 6,434 | 13 | % | ||
| Professional services | 16,814 | 21,879 | (5,065) | (23) | % | ||
| Marketing | 9,540 | 8,741 | 799 | 9 | % | ||
| Loan expenses | 6,384 | 9,114 | (2,730) | (30) | % | ||
| Federal Deposit Insurance Corporation ("FDIC") insurance | 6,250 | 4,226 | 2,024 | 48 | % | ||
| Amortization of intangible assets | 3,864 | 2,512 | 1,352 | 54 | % | ||
| Other | 30,527 | 10,264 | 20,263 | 197 | % | ||
| Total noninterest expense | 469,602 | 443,956 | 25,646 | 6 | % | ||
| Income before income tax expense | 256,688 | 188,712 | 67,976 | 36 | % | ||
| Income tax expense | 56,929 | 34,047 | 22,882 | 67 | % | ||
| Net income | $ | 199,759 | $ | 154,665 | 29 | % | |
| Share data: | |||||||
| Weighted average common shares outstanding, basic (1) | 165,510,357 | 172,192,336 | (6,681,979) | (4) | % | ||
| Weighted average common shares outstanding, diluted (1) | 165,648,571 | 172,252,057 | (6,603,486) | (4) | % | ||
| Earnings per share, basic | $ | 1.21 | $ | 0.90 | 34 | % | |
| Earnings per share, diluted | $ | 1.21 | $ | 0.90 | 34 | % | |
| (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. |
All values are in US Dollars.
EASTERN BANKSHARES, INC. AND SUBSIDIARIES
AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS
| As of and for the three months ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | Sep 30, 2022 | Dec 31, 2021 | ||||||||||||||||
| (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 | $ | 9,528,386 | $ | 108,015 | 4.50 | % | $ | 9,138,029 | $ | 96,270 | 4.18 | % | $ | 8,021,665 | $ | 80,326 | 3.97 | % |
| Residential | 2,313,810 | 18,837 | 3.23 | % | 2,043,219 | 15,811 | 3.07 | % | 1,735,324 | 12,993 | 2.97 | % | ||||||
| Consumer | 1,363,858 | 18,949 | 5.51 | % | 1,341,528 | 16,072 | 4.75 | % | 1,189,106 | 9,683 | 3.23 | % | ||||||
| Total loans | 13,206,054 | 145,801 | 4.38 | % | 12,522,776 | 128,153 | 4.06 | % | 10,946,095 | 103,002 | 3.73 | % | ||||||
| Investment securities | 8,422,385 | 32,432 | 1.53 | % | 8,716,105 | 31,708 | 1.44 | % | 7,336,783 | 23,633 | 1.28 | % | ||||||
| Federal funds sold and other short-term investments | 63,408 | 545 | 3.41 | % | 282,629 | 1,638 | 2.30 | % | 1,201,223 | 452 | 0.15 | % | ||||||
| Total interest-earning assets | 21,691,847 | 178,778 | 3.27 | % | 21,521,510 | 161,499 | 2.98 | % | 19,484,101 | 127,087 | 2.59 | % | ||||||
| Non-interest-earning assets | 653,158 | 911,025 | 1,373,219 | |||||||||||||||
| Total assets | $ | 22,345,005 | $ | 22,432,535 | $ | 20,857,320 | ||||||||||||
| Interest-bearing liabilities: | ||||||||||||||||||
| Deposits: | ||||||||||||||||||
| Savings | $ | 1,924,840 | $ | 57 | 0.01 | % | $ | 2,021,125 | $ | 51 | 0.01 | % | $ | 1,800,862 | $ | 61 | 0.01 | % |
| Interest checking | 4,871,089 | 4,897 | 0.40 | % | 5,211,914 | 2,686 | 0.20 | % | 3,830,427 | 1,267 | 0.13 | % | ||||||
| Money market | 4,778,694 | 9,919 | 0.82 | % | 4,824,452 | 1,893 | 0.16 | % | 4,743,313 | 788 | 0.07 | % | ||||||
| Time deposits | 563,735 | 2,584 | 1.82 | % | 380,560 | 151 | 0.16 | % | 388,511 | 281 | 0.29 | % | ||||||
| Total interest-bearing deposits | 12,138,358 | 17,457 | 0.57 | % | 12,438,051 | 4,781 | 0.15 | % | 10,763,113 | 2,397 | 0.09 | % | ||||||
| Borrowings | 795,527 | 7,547 | 3.76 | % | 157,686 | 867 | 2.18 | % | 29,204 | 42 | 0.57 | % | ||||||
| Total interest-bearing liabilities | 12,933,885 | 25,004 | 0.77 | % | 12,595,737 | 5,648 | 0.18 | % | 10,792,317 | 2,439 | 0.09 | % | ||||||
| Demand deposit accounts | 6,495,817 | 6,614,467 | 6,226,291 | |||||||||||||||
| Other noninterest-bearing liabilities | 495,129 | 445,640 | 415,481 | |||||||||||||||
| Total liabilities | 19,924,831 | 19,655,844 | 17,434,089 | |||||||||||||||
| Shareholders' equity | 2,420,174 | 2,776,691 | 3,423,231 | |||||||||||||||
| Total liabilities and shareholders' equity | $ | 22,345,005 | $ | 22,432,535 | $ | 20,857,320 | ||||||||||||
| Net interest income - FTE | $ | 153,774 | $ | 155,851 | $ | 124,648 | ||||||||||||
| Net interest rate spread (2) | 2.50 | % | 2.80 | % | 2.50 | % | ||||||||||||
| Net interest-earning assets (3) | $ | 8,757,962 | $ | 8,925,773 | $ | 8,691,784 | ||||||||||||
| Net interest margin - FTE (4) | 2.81 | % | 2.87 | % | 2.54 | % | ||||||||||||
| (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 twelve months ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | Dec 31, 2021 | |||||||||||
| (Unaudited, dollars in thousands) | Avg. Balance | Interest | Yield / Cost | Avg. Balance | Interest | Yield / Cost | ||||||
| Interest-earning assets: | ||||||||||||
| Loans (1): | ||||||||||||
| Commercial | $ | 9,147,540 | $ | 366,097 | 4.00 | % | $ | 7,410,024 | $ | 288,557 | 3.89 | % |
| Residential | 2,064,609 | 63,803 | 3.09 | % | 1,510,703 | 47,143 | 3.12 | % | ||||
| Consumer | 1,327,417 | 56,965 | 4.29 | % | 1,103,042 | 36,019 | 3.27 | % | ||||
| Total loans | 12,539,566 | 486,865 | 3.88 | % | 10,023,769 | 371,719 | 3.71 | % | ||||
| Total investment securities | 8,666,868 | 127,781 | 1.47 | % | 5,151,136 | 67,647 | 1.31 | % | ||||
| Federal funds sold and other short-term investments | 420,834 | 3,271 | 0.78 | % | 1,514,351 | 1,886 | 0.12 | % | ||||
| Total interest-earning assets | 21,627,268 | 617,917 | 2.86 | % | 16,689,256 | 441,252 | 2.64 | % | ||||
| Non-interest-earning assets | 986,865 | 1,173,830 | ||||||||||
| Total assets | $ | 22,614,133 | $ | 17,863,086 | ||||||||
| Interest-bearing liabilities: | ||||||||||||
| Deposits: | ||||||||||||
| Savings | $ | 2,015,651 | $ | 209 | 0.01 | % | $ | 1,483,271 | $ | 230 | 0.02 | % |
| Interest checking | 4,890,709 | 11,675 | 0.24 | % | 2,866,091 | 1,997 | 0.07 | % | ||||
| Money market | 5,057,445 | 13,479 | 0.27 | % | 3,870,712 | 2,342 | 0.06 | % | ||||
| Time deposits | 463,261 | 3,258 | 0.70 | % | 280,141 | 598 | 0.21 | % | ||||
| Total interest-bearing deposits | 12,427,066 | 28,621 | 0.23 | % | 8,500,215 | 5,167 | 0.06 | % | ||||
| Borrowings | 256,632 | 8,506 | 3.31 | % | 26,495 | 165 | 0.62 | % | ||||
| Total interest-bearing liabilities | 12,683,698 | 37,127 | 0.29 | % | 8,526,710 | 5,332 | 0.06 | % | ||||
| Demand deposit accounts | 6,647,518 | 5,547,615 | ||||||||||
| Other noninterest-bearing liabilities | 451,384 | 364,191 | ||||||||||
| Total liabilities | 19,782,600 | 14,438,516 | ||||||||||
| Shareholders' equity | 2,831,533 | 3,424,570 | ||||||||||
| Total liabilities and shareholders' equity | $ | 22,614,133 | $ | 17,863,086 | ||||||||
| Net interest income - FTE | $ | 580,790 | $ | 435,920 | ||||||||
| Net interest rate spread (2) | 2.57 | % | 2.58 | % | ||||||||
| Net interest-earning assets (3) | $ | 8,943,570 | $ | 8,162,546 | ||||||||
| Net interest margin - FTE (4) | 2.69 | % | 2.61 | % | ||||||||
| (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. |
EASTERN BANKSHARES, INC. AND SUBSIDIARIES
ASSET QUALITY - NON-PERFORMING ASSETS (1)
| As of | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | |||||||||||
| (Unaudited, dollars in thousands) | |||||||||||||||
| Non-accrual loans: | |||||||||||||||
| Commercial | $ | 21,474 | $ | 19,886 | $ | 43,628 | $ | 17,919 | $ | 20,630 | |||||
| Residential | 9,750 | 8,513 | 9,486 | 8,256 | 6,681 | ||||||||||
| Consumer | 7,380 | 5,555 | 6,766 | 7,646 | 5,682 | ||||||||||
| Total non-accrual loans | 38,604 | 33,954 | 59,880 | 33,821 | 32,993 | ||||||||||
| Total accruing loans past due 90 days or more (2): | — | — | — | — | 1,990 | ||||||||||
| Total non-performing loans | 38,604 | 33,954 | 59,880 | 33,821 | 34,983 | ||||||||||
| Other real estate owned | — | — | — | — | — | ||||||||||
| Other non-performing assets: | — | — | — | — | — | ||||||||||
| Total non-performing assets | $ | 38,604 | $ | 33,954 | $ | 59,880 | $ | 33,821 | $ | 34,983 | |||||
| Total accruing troubled debt restructured loans | $ | 28,834 | $ | 36,275 | $ | 33,518 | $ | 32,016 | $ | 33,336 | |||||
| Total non-performing loans to total loans | 0.28 | % | 0.26 | % | 0.48 | % | 0.28 | % | 0.29 | % | |||||
| Total non-performing assets to total assets | 0.17 | % | 0.15 | % | 0.27 | % | 0.15 | % | 0.15 | % | |||||
| (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) Loans that were past due 90 days or more and still accruing in prior quarters were comprised solely of purchased credit impaired ("PCI") loans. PCI loans were not subject to classification as nonaccrual in the same manner as originated loans as their interest income related to the accretable yield recognized and not to contractual interest payments at the loan level. In connection with the Company’s adoption on January 1, 2022 of the loan loss methodology commonly referred to as the "current expected credit losses methodology" ("CECL"), the Company's PCI loans are now considered purchased credit deteriorated ("PCD") loans. Interest income recognition for PCD loans is consistent with originated loans and, therefore, PCD loans cease accruing interest at 90 days past due unless management believes that collateral held by the Company is clearly sufficient and in full satisfaction of both principal and interest. There were no PCD or originated loans at December 31, 2022, September 30, 2022, June 30, 2022 or March 31, 2022 that were past due 90 days or more and still accruing. |
EASTERN BANKSHARES, INC. AND SUBSIDIARIES
ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE-OFFS (RECOVERIES)
| Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | |||||||||||
| (Unaudited, dollars in thousands) | ||||||||||||||
| Average total loans | 13,203,450 | $ | 12,521,426 | $ | 12,213,706 | $ | 12,203,212 | $ | 10,944,091 | |||||
| Allowance for loan losses, beginning of the period | 125,531 | 124,166 | 97,787 | 103,398 | ||||||||||
| Total cumulative effect of change in accounting principle (1): | — | — | 27,086 | — | ||||||||||
| Charged-off loans: | ||||||||||||||
| Commercial and industrial | 11 | 1 | 1 | 1,008 | ||||||||||
| Commercial real estate | — | — | — | 5 | ||||||||||
| Commercial construction | — | — | — | — | ||||||||||
| Business banking | 369 | 608 | 945 | 1,002 | ||||||||||
| Residential real estate | — | — | — | 35 | ||||||||||
| Consumer home equity | — | — | — | 24 | ||||||||||
| Other consumer | 603 | 490 | 661 | 666 | ||||||||||
| Total charged-off loans | 983 | 1,099 | 1,607 | 2,740 | ||||||||||
| Recoveries on loans previously charged-off: | ||||||||||||||
| Commercial and industrial | 126 | 698 | 250 | 873 | ||||||||||
| Commercial real estate | 3 | 36 | 14 | — | ||||||||||
| Commercial construction | — | — | — | — | ||||||||||
| Business banking | 286 | 464 | 928 | 399 | ||||||||||
| Residential real estate | 56 | 14 | 10 | 7 | ||||||||||
| Consumer home equity | 6 | 6 | 4 | 48 | ||||||||||
| Other consumer | 158 | 196 | 179 | 120 | ||||||||||
| Total recoveries | 635 | 1,414 | 1,385 | 1,447 | ||||||||||
| Net loans charged-off (recoveries): | ||||||||||||||
| Commercial and industrial | (115) | (697) | (249) | 135 | ||||||||||
| Commercial real estate | (3) | (36) | (14) | 5 | ||||||||||
| Commercial construction | — | — | — | — | ||||||||||
| Business banking | 83 | 144 | 17 | 603 | ||||||||||
| Residential real estate | (56) | (14) | (10) | 28 | ||||||||||
| Consumer home equity | (6) | (6) | (4) | (24) | ||||||||||
| Other consumer | 445 | 294 | 482 | 546 | ||||||||||
| Total net loans charged-off (recoveries) | 348 | (315) | 222 | 1,293 | ||||||||||
| Provision for (release of) allowance for loan losses | 6,480 | 1,050 | (485) | (4,318) | ||||||||||
| Total allowance for loan losses, end of period | 142,211 | $ | 131,663 | $ | 125,531 | $ | 124,166 | $ | 97,787 | |||||
| Net charge-offs (recoveries) to average total loans outstanding during this period (2) | % | 0.01 | % | (0.01) | % | 0.01 | % | 0.05 | % | |||||
| Allowance for loan losses as a percent of total loans | % | 1.02 | % | 1.01 | % | 1.02 | % | 0.80 | % | |||||
| Allowance for loan losses as a percent of nonperforming loans | % | 387.77 | % | 209.64 | % | 367.13 | % | 279.53 | % | |||||
| (1) Represents the adjustment needed to reflect the cumulative day one impact pursuant to the Company’s adoption of ASU 2016-13 (i.e., cumulative effect adjustment related the adoption of ASU 2016-13 as of January 1, 2022). The adjustment represents a 27.1 million increase to the allowance for loan losses attributable to the change in accounting methodology which requires the estimation of the allowance for credit losses resulting from the Company’s adoption of the standard. The adjustment also includes the adjustment needed to reflect the day one reclassification of the Company’s financial assets that were previously classified as PCI financial assets as PCD financial assets and the associated gross-up of 0.1 million, pursuant to the Company’s adoption of ASU 2016-13. | ||||||||||||||
| (2) Presented on an annualized basis. |
All values are in US Dollars.
APPENDIX A: Reconciliation of Non-GAAP Earnings Metrics
For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."
| (Unaudited, dollars in thousands, except per-share data) | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | ||||||||||
| Net income (GAAP) | 42,294 | $ | 54,777 | $ | 51,172 | $ | 51,516 | $ | 35,087 | |||||
| Add: | ||||||||||||||
| Noninterest income components: | ||||||||||||||
| (Income) losses from investments held in rabbi trusts | 2,248 | 7,316 | 4,433 | (4,444) | ||||||||||
| Losses on sales of securities available for sale, net | 198 | 104 | 2,172 | — | ||||||||||
| (Gains) losses on sales of other assets | (501) | (1,251) | 274 | (34) | ||||||||||
| Noninterest expense components: | ||||||||||||||
| Rabbi trust employee benefit expense (income) | (867) | (3,310) | (2,087) | 2,519 | ||||||||||
| Impairment charge on tax credit investments | — | — | — | 116 | ||||||||||
| Merger and acquisition expenses | 271 | — | 34 | 30,652 | ||||||||||
| Defined Benefit Plan settlement loss | — | — | — | — | ||||||||||
| Total impact of non-GAAP adjustments | 1,349 | 2,859 | 4,826 | 28,809 | ||||||||||
| Less net tax benefit associated with non-GAAP adjustments (1) | 384 | 1,513 | 1,235 | 19,036 | ||||||||||
| Non-GAAP adjustments, net of tax | 7,618 | $ | 965 | $ | 1,346 | $ | 3,591 | $ | 9,773 | |||||
| Operating net income (non-GAAP) | 49,912 | $ | 55,742 | $ | 52,518 | $ | 55,107 | $ | 44,860 | |||||
| Weighted average common shares outstanding during the period (2): | ||||||||||||||
| Basic | 163,718,962 | 166,533,920 | 169,857,950 | 172,246,799 | ||||||||||
| Diluted | 164,029,649 | 166,573,627 | 169,968,156 | 172,481,829 | ||||||||||
| Earnings per share, basic | 0.26 | $ | 0.33 | $ | 0.31 | $ | 0.30 | $ | 0.20 | |||||
| Earnings per share, diluted | 0.26 | $ | 0.33 | $ | 0.31 | $ | 0.30 | $ | 0.20 | |||||
| Operating earnings per share, basic (non-GAAP) | 0.31 | $ | 0.34 | $ | 0.32 | $ | 0.32 | $ | 0.26 | |||||
| Operating earnings per share, diluted (non-GAAP) | 0.31 | $ | 0.34 | $ | 0.32 | $ | 0.32 | $ | 0.26 | |||||
| Return on average assets (3) | % | 0.97 | % | 0.92 | % | 0.90 | % | 0.67 | % | |||||
| Add: | ||||||||||||||
| (Income) losses from investments held in rabbi trusts (3) | 0.04% | 0.13% | 0.08% | (0.08)% | ||||||||||
| Losses on sales of securities available for sale, net (3) | 0.00% | 0.00% | 0.04% | 0.00% | ||||||||||
| (Gains) losses on sales of other assets (3) | (0.01)% | (0.02)% | 0.00% | 0.00% | ||||||||||
| Rabbi trust employee benefit expense (income) (3) | (0.02)% | (0.06)% | (0.04)% | 0.05% | ||||||||||
| Impairment charge on tax credit investments (3) | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||
| Merger and acquisition expenses (3) | 0.00% | 0.00% | 0.00% | 0.58% | ||||||||||
| Defined Benefit Plan settlement loss (3) | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||
| Less net tax benefit associated with non-GAAP adjustments (1) (3) | 0.01% | 0.03% | 0.02% | 0.36% | ||||||||||
| Operating return on average assets (non-GAAP) (3) | % | 0.97 | % | 0.94 | % | 0.96 | % | 0.86 | % | |||||
| Return on average shareholders' equity (3) | % | 7.83 | % | 7.16 | % | 6.38 | % | 4.07 | % | |||||
| Add: | ||||||||||||||
| (Income) losses from investments held in rabbi trusts (3) | 0.32% | 1.02% | 0.55% | (0.52)% | ||||||||||
| Losses on sales of securities available for sale, net (3) | 0.03% | 0.01% | 0.27% | 0.00% | ||||||||||
| (Gains) losses on sales of other assets (3) | (0.07)% | (0.18)% | 0.03% | 0.00% | ||||||||||
| Rabbi trust employee benefit expense (income) (3) | (0.12)% | (0.46)% | (0.26)% | 0.29% | ||||||||||
| Impairment charge on tax credit investments (3) | 0.00% | 0.00% | 0.00% | 0.01% | ||||||||||
| Merger and acquisition expenses (3) | 0.04% | 0.00% | 0.00% | 3.55% | ||||||||||
| Defined Benefit Plan settlement loss (3) | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||
| Less net tax benefit associated with non-GAAP adjustments (1) (3) | 0.05% | 0.21% | 0.15% | 2.21% | ||||||||||
| Operating return on average shareholders' equity (non-GAAP) (3) | % | 7.98 | % | 7.34 | % | 6.82 | % | 5.19 | % | |||||
| Average tangible shareholders' equity: | ||||||||||||||
| Average total shareholders' equity (GAAP) | 2,420,174 | $ | 2,776,691 | $ | 2,865,799 | $ | 3,273,447 | $ | 3,423,231 | |||||
| Less: Average goodwill and other intangibles | 656,684 | 654,444 | 649,497 | 520,988 | ||||||||||
| Average tangible shareholders' equity (non-GAAP) | 1,758,333 | $ | 2,120,007 | $ | 2,211,355 | $ | 2,623,950 | $ | 2,902,243 | |||||
| Return on average tangible shareholders' equity (non-GAAP) (3) | % | 10.25 | % | 9.28 | % | 7.96 | % | 4.80 | % | |||||
| Add: | ||||||||||||||
| (Income) losses from investments held in rabbi trusts (3) | 0.42% | 1.33% | 0.69% | (0.61)% | ||||||||||
| Losses on sales of securities available for sale, net (3) | 0.04% | 0.02% | 0.34% | 0.00% | ||||||||||
| (Gains) losses on sales of other assets (3) | (0.09)% | (0.23)% | 0.04% | 0.00% | ||||||||||
| Rabbi trust employee benefit expense (income) (3) | (0.16)% | (0.60)% | (0.32)% | 0.34% | ||||||||||
| Impairment charge on tax credit investments (3) | 0.00% | 0.00% | 0.00% | 0.02% | ||||||||||
| Merger and acquisition expenses (3) | 0.05% | 0.00% | 0.01% | 4.19% | ||||||||||
| Defined Benefit Plan settlement loss (3) | 0.00% | 0.00% | 0.00% | 0.00% | ||||||||||
| Less net tax benefit associated with non-GAAP adjustments (1) (3) | 0.07% | 0.27% | 0.19% | 2.60% | ||||||||||
| Operating return on average tangible shareholders' equity (non-GAAP) (3) | % | 10.44 | % | 9.53 | % | 8.53 | % | 6.14 | % | |||||
| (1) The net tax benefit associated with these items is 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 quarters ended December 31, 2021 and June 30, 2022 reflect the impact of the release of 11.3 million and 0.7 million, respectively, of the 12.0 million valuation allowance associated with the Company's stock donation to the Eastern Bank Foundation made in the quarter ended December 31, 2020. There was no such release in other quarters. | ||||||||||||||
| (2) 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. | ||||||||||||||
| (3) Presented on an annualized basis. |
All values are in US Dollars.
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 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | |||||||||||
| (Unaudited, dollars in thousands) | |||||||||||||||
| Net interest income (GAAP) | $ | 149,994 | $ | 152,179 | $ | 137,757 | $ | 128,124 | $ | 122,437 | |||||
| Add: | |||||||||||||||
| Tax-equivalent adjustment (non-GAAP) (1) | 3,780 | 3,672 | 3,023 | 2,261 | 2,211 | ||||||||||
| Fully-taxable equivalent net interest income (non-GAAP) | $ | 153,774 | $ | 155,851 | $ | 140,780 | $ | 130,385 | $ | 124,648 | |||||
| Noninterest income (GAAP) | $ | 44,516 | $ | 43,353 | $ | 41,877 | $ | 46,415 | $ | 49,001 | |||||
| Less: | |||||||||||||||
| Income (losses) from investments held in rabbi trusts | 3,235 | (2,248) | (7,316) | (4,433) | 4,444 | ||||||||||
| Losses on sales of securities available for sale, net | (683) | (198) | (104) | (2,172) | — | ||||||||||
| Gain (losses) on sales of other assets | 14 | 501 | 1,251 | (274) | 34 | ||||||||||
| Noninterest income on an operating basis (non-GAAP) | $ | 41,950 | $ | 45,298 | $ | 48,046 | $ | 53,294 | $ | 44,523 | |||||
| Noninterest expense (GAAP) | $ | 132,757 | $ | 116,840 | $ | 111,139 | $ | 108,866 | $ | 143,602 | |||||
| Less: | |||||||||||||||
| Rabbi trust employee benefit expense (income) | 1,103 | (867) | (3,310) | (2,087) | 2,519 | ||||||||||
| Impairment charge on tax credit investments | — | — | — | — | 116 | ||||||||||
| Merger and acquisition expenses | — | 271 | — | 34 | 30,652 | ||||||||||
| Defined Benefit Plan settlement loss | 12,045 | — | — | — | — | ||||||||||
| Noninterest expense on an operating basis (non-GAAP) | $ | 119,609 | $ | 117,436 | $ | 114,449 | $ | 110,919 | $ | 110,315 | |||||
| Total revenue (GAAP) | $ | 194,510 | $ | 195,532 | $ | 179,634 | $ | 174,539 | $ | 171,438 | |||||
| Total operating revenue (non-GAAP) | $ | 195,724 | $ | 201,149 | $ | 188,826 | $ | 183,679 | $ | 169,171 | |||||
| Efficiency ratio (GAAP) | 68.25 | % | 59.75 | % | 61.87 | % | 62.37 | % | 83.76 | % | |||||
| Operating efficiency ratio (non-GAAP) | 61.11 | % | 58.38 | % | 60.61 | % | 60.39 | % | 65.21 | % | |||||
| Noninterest income / total revenue (GAAP) | 22.89 | % | 22.17 | % | 23.31 | % | 26.59 | % | 28.58 | % | |||||
| Noninterest income / total revenue on an operating basis (non-GAAP) | 21.43 | % | 22.52 | % | 25.44 | % | 29.01 | % | 26.32 | % | |||||
| (1) Interest income on tax-exempt loans and investment securities has been adjusted to an FTE basis using a marginal tax rate of 21.6%, 21.5%, 21.5%, 21.5%, and 21.0% for the three months ended December 31, 2022, September 30, 2022, June 30, 2022, March 31, 2022, and December 31, 2021, 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 | |||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | |||||||||||
| (Unaudited, dollars in thousands, except per-share data) | |||||||||||||||
| Tangible shareholders' equity: | |||||||||||||||
| Total shareholders' equity (GAAP) | $ | 2,471,790 | $ | 2,416,163 | $ | 2,718,396 | $ | 3,008,392 | $ | 3,406,352 | |||||
| Less: Goodwill and other intangibles | 661,126 | 662,222 | 653,853 | 654,759 | 649,703 | ||||||||||
| Tangible shareholders' equity (non-GAAP) | 1,810,664 | 1,753,941 | 2,064,543 | 2,353,633 | 2,756,649 | ||||||||||
| Tangible assets: | |||||||||||||||
| Total assets (GAAP) | 22,646,858 | 22,042,933 | 22,350,848 | 22,836,072 | 23,512,128 | ||||||||||
| Less: Goodwill and other intangibles | 661,126 | 662,222 | 653,853 | 654,759 | 649,703 | ||||||||||
| Tangible assets (non-GAAP) | $ | 21,985,732 | $ | 21,380,711 | $ | 21,696,995 | $ | 22,181,313 | $ | 22,862,425 | |||||
| Shareholders' equity to assets ratio (GAAP) | 10.91 | % | 10.96 | % | 12.16 | % | 13.17 | % | 14.49 | % | |||||
| Tangible shareholders' equity to tangible assets ratio (non-GAAP) | 8.24 | % | 8.20 | % | 9.52 | % | 10.61 | % | 12.06 | % | |||||
| Common shares outstanding | 176,172,073 | 177,772,553 | 179,253,801 | 183,438,711 | 186,305,332 | ||||||||||
| Book value per share (GAAP) | $ | 14.03 | $ | 13.59 | $ | 15.17 | $ | 16.40 | $ | 18.28 | |||||
| Tangible book value per share (non-GAAP) | $ | 10.28 | $ | 9.87 | $ | 11.52 | $ | 12.83 | $ | 14.80 |
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 | |||||
|---|---|---|---|---|---|---|
| Dec 31, 2022 | Sep 30, 2022 | Sep 30, 2022 | ||||
| (Unaudited, dollars in thousands, except per-share data) | ||||||
| Common stock | $ | 1,762 | $ | 1,778 | $ | (16) |
| Additional paid in capital | 1,649,141 | 1,676,396 | (27,255) | |||
| Unallocated ESOP common stock | (137,696) | (138,950) | 1,254 | |||
| Retained earnings | 1,881,775 | 1,855,757 | 26,018 | |||
| AOCI, net of tax - available for sale securities | (880,156) | (918,855) | 38,699 | |||
| AOCI, net of tax - pension | 7,123 | (5,842) | 12,965 | |||
| AOCI, net of tax - cash flow hedge | (50,159) | (54,121) | 3,962 | |||
| Total shareholders' equity: | $ | 2,471,790 | $ | 2,416,163 | $ | 55,627 |
| Less: Goodwill and other intangibles | 661,126 | 662,222 | (1,096) | |||
| Tangible shareholders' equity (non-GAAP) | $ | 1,810,664 | $ | 1,753,941 | $ | 56,723 |
| Common shares outstanding | 176,172,073 | 177,772,553 | (1,600,480) | |||
| Per share: | ||||||
| Common stock | $ | 0.01 | $ | 0.01 | $ | — |
| Additional paid in capital | 9.36 | 9.43 | (0.07) | |||
| Unallocated ESOP common stock | (0.78) | (0.78) | — | |||
| Retained earnings | 10.68 | 10.44 | 0.24 | |||
| AOCI, net of tax - available for sale securities | (5.00) | (5.17) | 0.17 | |||
| AOCI, net of tax - pension | 0.04 | (0.03) | 0.07 | |||
| AOCI, net of tax - cash flow hedge | (0.28) | (0.30) | 0.02 | |||
| Total shareholders' equity: | $ | 14.03 | $ | 13.59 | $ | 0.44 |
| Less: Goodwill and other intangibles | 3.75 | 3.73 | 0.03 | |||
| Tangible shareholders' equity (non-GAAP) | $ | 10.28 | $ | 9.87 | $ | 0.41 |
17