8-K - EBC - Equibles

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 29, 2021

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 July 29, 2021, 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, 2021. 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, 2021, the Company announced the approval by its Board of Directors of a regular quarterly cash dividend of $0.08 per share payable on September 15, 2021 to shareholders of record on September 3, 2021.

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 29, 2021. A copy of the presentation is furnished herewith as Exhibit 99.2.

Item 9.01 Financial Statements and Exhibits.

(d)Exhibits

Exhibit	Description
99.1	Press release dated July 29, 2021
99.2	Presentation titled "Q2 Earnings Presentation" dated July 29, 2021
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 29, 2021	By:	/s/ James B. Fitzgerald
		James B. Fitzgerald
		Chief Financial Officer

Document

Exhibit 99.1

Eastern Bankshares, Inc. Reports Second Quarter 2021 Financial Results and Declares Quarterly Dividend

BOSTON, July 29, 2021 (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 2021 second quarter financial results and the declaration of a quarterly cash dividend of $0.08 per share. Net income for the second quarter of 2021 was $34.8 million, or $0.20 per share, compared to net income of $47.7 million, or $0.28 per share, reported for the first quarter of 2021.

Financial results for the second quarter of 2021 include $3.5 million in merger and acquisition expenses, primarily related to the pending merger with Century Bancorp, Inc. (“Century”) announced on April 7, 2021 and $3.3 million in expenses related to the anticipated settlement of overdraft litigation. Excluding these, and certain other non-operating expenses, operating net income* for the second quarter of 2021 was $37.1 million, or $0.22 per share, compared to $46.5 million, or $0.27 per share, reported for the prior quarter.

“Our second quarter financial results continue to demonstrate our organic growth, strong fee income generation, sound asset quality, and focus on our long-term profitability,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “COVID-19 vaccination rates in our core markets are among the highest in the country, and we’re seeing significant progress in our local economy as businesses were able to reopen their doors and look to the future. Excluding PPP loans, we saw loan growth of $117 million this quarter, or growth of over 5% on an annualized basis, which provides further evidence of confidence and business expansion. We are optimistic about our continued growth as our colleagues work diligently on the integration of Century. We’re pleased that Century shareholders approved the transaction earlier this month and are working towards a smooth integration later this year.”

HIGHLIGHTS FOR THE SECOND QUARTER OF 2021

•Total loans excluding Small Business Administration (“SBA”) Paycheck Protection Program (“PPP”) loans grew $116.9 million, or 5% on an annualized basis from the prior quarter. Residential and commercial loans excluding PPP loans grew 15% and 5%, respectively, on an annualized basis from the prior quarter.

•Net interest income increased $4.5 million from the prior quarter due to growth in the Company’s securities portfolio and higher loan income, primarily attributable to higher PPP fee recognition.

•An improving economic outlook coupled with strong asset quality led to a $3.3 million release of loan loss reserves. Nonperforming loans were $41.6 million, or 0.43% of total loans at the end of the second quarter.

•The second quarter saw solid fee generation with insurance, wealth management and debit card revenues up 4%, 17% and 36%, respectively, from the prior year quarter.

BALANCE SHEET

Total assets were $17.0 billion at June 30, 2021, representing an increase of $320.7 million, or 2%, from March 31, 2021.

•Available for sale securities increased $862.5 million, or 22%, on a consecutive quarter basis, to $4.8 billion, as excess liquidity was deployed into U.S. Agency securities. Cash and equivalents declined $296.1 million to $1.6 billion.

•Total loans were $9.6 billion, representing a decrease of $295.4 million, or 3%, from the prior quarter as the pace of forgiveness of PPP loans accelerated in the second quarter. Excluding PPP loans, total loans grew $116.9 million, or 1%, from the prior quarter, driven by growth in commercial loans excluding PPP loans of $80.7 million and residential loans of $51.0 million.

•Deposits totaled $13.3 billion, representing an increase of $269.6 million, or 2%, from March 31, 2021.

•Shareholders’ equity was $3.4 billion, representing an increase of $43.6 million, or 1%, from the prior quarter. The increase is driven by higher retained earnings of $21.0 million as well as an increase in the after-tax market value of the available for sale investment portfolio, which drove the increase in accumulated other comprehensive income of $19.9 million.

•At June 30, 2021, book value per share was $18.37 and tangible book value per share* was $16.33.

NET INTEREST INCOME

Net interest income was $104.6 million for the second quarter, compared to $100.1 million in the prior quarter, representing an increase of $4.5 million on a consecutive quarter basis.

•Included in net interest income was $9.3 million and $8.3 million of SBA PPP fee accretion net of deferred cost amortization in the second quarter and prior quarter, respectively. Between March 31, 2021 and June 30, 2021, $502.9 million in PPP loans were forgiven through the SBA or otherwise paid down compared to $240.7 million in

the prior quarter. In the second quarter, PPP loan forgiveness was concentrated in higher balance loans where the Company received a lower percentage loan processing fee from the SBA relative to the prior quarter. Loans forgiven in the second quarter had lower unaccreted fee income at the time of forgiveness relative to the first quarter.

•Interest income on available for sale securities increased $2.3 million to $14.3 million in the second quarter as excess cash continues to be deployed into securities. Investment securities averaged $4.3 billion for the second quarter compared to $3.6 billion for the prior quarter, an increase of $713.2 million.

•The net interest margin on a fully tax equivalent (“FTE”) basis* was 2.69% for the second quarter, representing a 2 basis points decrease from the prior quarter. The net interest margin continues to be pressured by the low interest rate environment and excess liquidity. The core net interest margin* in Appendix E demonstrates the impact of excess cash and the PPP program.

NONINTEREST INCOME

Noninterest income was $45.7 million for the second quarter, compared to $55.2 million for the prior quarter, representing a decrease of $9.5 million. The decline was primarily driven by lower insurance revenues from the seasonally high prior quarter and lower loan-level interest rate swap revenue due to lower market interest rates.

•Insurance commissions decreased $4.5 million to $23.7 million in the second quarter, compared to $28.1 million in the prior quarter, driven by seasonality. Compared to the prior year quarter, insurance commissions increased $1.0 million, or 4%.

•Trust and investment advisory fees increased $0.4 million on a consecutive quarter basis to $6.1 million primarily due to higher equity values.

•Loan-level interest rate swap losses were $1.2 million in the second quarter, compared to $5.4 million in revenue in the prior quarter, representing a decrease of $6.6 million that was primarily driven by a $6.4 million decrease in the fair value of such interest rate swap transactions due to lower market interest rates.

•Income on securities held in rabbi trust accounts was $4.2 million in the second quarter compared to $1.8 million in the prior quarter, representing an increase of $2.4 million primarily due to higher equity market gains in the second quarter of 2021 as compared to the prior quarter.

•Mortgage origination activity was lower in the second quarter as compared to the prior quarter with the gain on sale of loans held for sale totaling $0.8 million, down $0.6 million from the prior quarter.

Please refer to Appendix B for a reconciliation of operating revenues and expenses*.

NONINTEREST EXPENSE

Noninterest expense was $107.3 million for the second quarter representing an increase of $13.3 million, or 14%, from $94.0 million the prior quarter. The increase was primarily driven by higher salaries and employee benefits expense, expenses related to the pending merger with Century, and expenses related to the anticipated settlement of overdraft fee and nonsufficient funds fee lawsuits. Noninterest expense on an operating basis* for the second quarter of 2021 was $99.9 million, compared to $92.5 million in the prior quarter.

•Salaries and employee benefits expense was $69.3 million in the second quarter, representing an increase of $5.2 million from the prior quarter. The increase was primarily driven by higher incentive compensation expense of $3.4 million and an increase in the defined contribution supplemental executive retirement plan (“DC SERP”) expense of $1.1 million associated with the increase in the market value of investments held in rabbi trust accounts.

•Data processing expense was $13.6 million in the second quarter, an increase of $1.4 million from the prior quarter. Professional services expense was $6.4 million, an increase of $2.3 million from the prior quarter. These increases can be primarily attributed to costs associated with the pending acquisition of Century.

•Marketing expenses were $3.5 million in the second quarter, representing an increase of $1.8 million from the prior quarter.

•Other noninterest expense increased $2.5 million in the second quarter to $3.0 million. In the second quarter, the Company recorded expenses of $3.3 million related to the anticipated settlement of overdraft fee and nonsufficient fund fee suits brought against the Company that were the subject of mediation during the quarter. Partially offsetting this increased expense in the second quarter was the reversal of an impairment charge on tax credit investments of $1.4 million.

Please refer to Appendix B for a reconciliation of operating revenues and expenses*.

ASSET QUALITY

The allowance for loan losses was $105.6 million at June 30, 2021, or 1.10% of total loans, compared to $111.1 million or 1.12% of total loans at March 31, 2021. The Company released loan loss reserves totaling $3.3 million in the second quarter, compared to a release of $0.6 million in the prior quarter. The Company followed the incurred loss allowance GAAP accounting model at June 30, 2021 and all preceding periods.

Non-performing loans totaled $41.6 million at June 30, 2021 compared to $44.0 million at the end of the prior quarter. During the second quarter of 2021, the Company recorded total net charge-offs of $2.1 million, or 0.09% of average total loans on an annualized basis compared to $1.4 million and 0.06% in the prior quarter, respectively.

At June 30, 2021, approximately $149.8 million in COVID-19 modified loans remained under modified payment terms, down from $178.4 million at March 31, 2021. The commercial real estate portfolio contained $113.3 million of the remaining COVID-19 modifications at period end, of which $89.3 million or 79% were in the hotel segment.

Please refer to Appendix F for a detailed breakout on COVID-19 related loan modifications.

CONFERENCE CALL INFORMATION

A conference call and webcast covering Eastern’s second quarter 2021 earnings will be held on Friday, July 30, 2021 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (833) 233-4460 from within the U.S. or (647) 689-4543 if outside the U.S. and reference conference ID 7899073. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A replay of the webcast will be made available on demand on this site.

Following the webcast, Eastern will post its general investor presentation incorporating the second quarter results on its website at investor.easternbank.com under the “Events & Presentations” section.

DIVIDEND DECLARED

The Company’s Board of Directors declared a quarterly cash dividend of $0.08 per common share, payable on September 15, 2021, to shareholders of record as of the close of business on September 3, 2021.

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 110 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of June 30, 2021, Eastern Bank had approximately $17 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 1,900 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 businesses 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, 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) expenses indirectly associated with the Company’s initial public offering (“IPO”), (vii) other real estate owned (“OREO”) gains, (viii) merger and acquisition expenses, (ix) the stock donation to the Eastern Bank Foundation (“EBF”, formerly known as the Eastern Bank Charitable Foundation) in connection with the Company’s mutual-to-stock conversion and IPO, and (x) settlement of putative consumer class action litigation matters related to overdraft and non-sufficient funds fees, and associated settlement expenses. The Company does not provide an outlook for its total noninterest expense because it contains expense components, such as expense associated with rabbi trust accounts, which is market-driven, over which the Company cannot exercise control. Accordingly, a reconciliation of the Company’s outlook for its noninterest expense on an operating basis to an outlook for total noninterest expense cannot be made available without unreasonable effort.

Management also presents the Company’s core net interest margin which excludes the impact of items management determines as being one-time in nature or not indicative of its core operating results. Such items include the impact of excess liquidity in the form of excess cash volume, PPP loans originated in response to the COVID-19 pandemic, and material purchase accounting adjustments. Similarly, management presents certain asset quality metrics excluding PPP loans which it does not consider to be part of the Company’s core portfolios. These metrics include the ratio of total nonperforming loans to total loans excluding PPP loans, the ratio of the allowance for loan losses to total loans excluding PPP loans, and the ratio of annualized net charge-offs to average total loans excluding PPP loans. The Company anticipates that the vast majority of its PPP loans outstanding at June 30, 2021 will be forgiven, and to the extent not forgiven, a PPP loan is intended to be 100% guaranteed by the SBA.

Management also presents tangible assets, tangible shareholders’ equity, tangible book value per share, and the ratio of tangible shareholders’ equity to tangible assets, 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 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 the interest rate environment, risks associated with its proposed merger with Century, including the possibility that revenue or expense synergies or the other expected benefits of the transaction may not materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; that the transaction may not be timely completed, if at all; that prior to the completion of the transaction or thereafter, the Company’s or Century’s businesses may not perform as expected due to transaction-related uncertainty or other factors; that the Company is unable to successfully implement integration strategies; that required regulatory or other approvals are not obtained or other closing conditions are not satisfied in a timely manner or at all; that the timing of completion of the proposed merger is dependent on various factors that cannot be predicted with precision at this point; reputational risks and the reaction of the companies’ customers to the transaction; the inability to implement onboarding plans and other consequences associated with mergers; and diversion of management time on merger-related issues, as well as general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiary Eastern Bank are engaged, including inflation, interest rates, interest rate sensitivity and liquidity, 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 fluctuations due to actual or anticipated changes to federal tax laws; and credit quality, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans. 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.

Further, given the ongoing and dynamic nature of the COVID-19 pandemic, it is difficult to predict what continued effects the COVID-19 pandemic will have on the Company's business and results of operations. The COVID-19 pandemic and the related local and national economic disruption may result in a continued decline in demand for the Company's products and services; increased levels of loan delinquencies, problem assets and foreclosures; an increase in the Company's allowance for loan losses; a decline in the value of loan collateral, including real estate; a greater decline in the yield on the Company's interest-earning assets than the decline in the cost of the Company's interest-bearing liabilities; and increased cybersecurity risks, as employees continue to work remotely. 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 amounts)	Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Sep 30, 2020			Jun 30, 2020
Earnings data
Net interest income	$	104,608		$	100,091		$	103,608		$	98,742		$	98,755
Noninterest income	45,733			55,212			49,638			47,709			47,657
Total revenue	150,341			155,303			153,246			146,451			146,412
Noninterest expense	107,335			94,049			199,169			109,817			100,765
Pre-tax, pre-provision income (loss)	43,006			61,254			(45,923)			36,634			45,647
(Release of) provision for allowance for loan losses	(3,300)			(580)			900			700			8,600
Pre-tax income (loss)	46,306			61,834			(46,823)			35,934			37,047
Net income (loss)	34,809			47,663			(44,062)			28,505			29,850
Operating net income (non-GAAP)	37,097			46,537			31,612			32,322			27,301
Per-share data
Earnings (loss) per share	$	0.20		$	0.28		$	(0.26)		n.a.			n.a.
Operating earnings per share (non-GAAP)	$	0.22		$	0.27		$	0.18		n.a.			n.a.
Book value per share	$	18.37		$	18.14		$	18.36		n.a.			n.a.
Tangible book value per share (non-GAAP)	$	16.33		$	16.12		$	16.34		n.a.			n.a.
Profitability
Return on average assets (1)	0.83		%	1.19		%	(1.11)		%	0.80		%	0.88		%
Operating return on average assets (non-GAAP) (1)	0.89		%	1.15		%	0.79		%	0.90		%	0.81		%
Return on average shareholders' equity (1)	4.10		%	5.66		%	(5.61)		%	6.65		%	7.11		%
Operating return on average shareholders' equity (non-GAAP) (1)	4.36		%	5.53		%	4.02		%	7.54		%	6.51		%
Net interest margin (FTE) (1)	2.69		%	2.71		%	2.84		%	3.04		%	3.23		%
Cost of deposits (1)	0.03		%	0.03		%	0.03		%	0.06		%	0.11		%
Fee income ratio	30.42		%	35.55		%	32.39		%	32.58		%	32.55		%
Efficiency ratio	71.39		%	60.56		%	129.97		%	74.99		%	68.82		%
Operating efficiency ratio (non-GAAP)	67.78		%	60.22		%	68.33		%	69.95		%	68.90		%
Balance Sheet (end of period)
Total assets	$	17,047,453		$	16,726,795		$	15,964,190		$	15,460,594		$	13,996,523
Total loans	9,621,075			9,916,475			9,730,525			9,944,241			10,014,338
Total deposits	13,250,433			12,980,875			12,155,784			13,332,585			11,846,765
Total loans / total deposits	73		%	76		%	80		%	75		%	85		%
PPP loans	$	825,784		$	1,238,053		$	1,026,117		$	1,123,493		$	1,100,181
Asset quality
Allowance for loan losses ("ALLL")	$	105,637		$	111,080		$	113,031		$	115,432		$	116,636
ALLL / total nonperforming loans ("NPLs")	253.74		%	252.72		%	261.33		%	257.47		%	210.55		%
Total NPLs / total loans	0.43		%	0.44		%	0.45		%	0.45		%	0.56		%
Total NPLs / total loans (excl. PPP loans) (non-GAAP)	0.47		%	0.51		%	0.50		%	0.51		%	0.62		%
Net charge-offs (NCOs) / average total loans (1)	0.09		%	0.06		%	0.13		%	0.08		%	0.04		%
NCOs / average total loans (excl. PPP loans) (non-GAAP) (1)	0.10		%	0.06		%	0.15		%	0.09		%	0.05		%
Remaining COVID-19 loan modifications (2)	$	149,805		$	178,430		$	332,682		$	701,227		$	945,995
Capital adequacy
Shareholders' equity / assets	20.12		%	20.25		%	21.47		%	11.08		%	12.10		%
Tangible shareholders' equity / tangible assets (non-GAAP)	18.30		%	18.42		%	19.58		%	8.87		%	9.67		%
(1) Presented on an annualized basis.
(2) See Appendix F: COVID-19 Related Loan Modifications

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	As of						Jun 30, 2021 change from
(Unaudited, dollars in thousands)	Jun 30, 2021		Mar 31, 2021		Jun 30, 2020		Mar 31, 2021			Jun 30, 2020
ASSETS							△ $	△ %		△ $	△ %
Cash and due from banks	$	58,490	$	79,497	$	67,264	(21,007)	(26)	%	(8,774)	(13)	%
Short-term investments	1,505,757		1,780,835		1,365,297		(275,078)	(15)	%	140,460	10	%
Cash and cash equivalents	1,564,247		1,860,332		1,432,561		(296,085)	(16)	%	131,686	9	%
Available for sale securities	4,848,781		3,986,253		1,600,354		862,528	22	%	3,248,427	203	%
Total securities	4,848,781		3,986,253		1,600,354		862,528	22	%	3,248,427	203	%
Loans held for sale	2,734		2,022		2,972		712	35	%	(238)	(8)	%
Loans:
Commercial and industrial	1,740,679		1,986,366		2,271,700		(245,687)	(12)	%	(531,021)	(23)	%
Commercial real estate	3,775,771		3,676,941		3,584,358		98,830	3	%	191,413	5	%
Commercial construction	237,927		249,416		282,246		(11,489)	(5)	%	(44,319)	(16)	%
Business banking	1,339,852		1,513,051		1,234,961		(173,199)	(11)	%	104,891	8	%
Total commercial loans	7,094,229		7,425,774		7,373,265		(331,545)	(4)	%	(279,036)	(4)	%
Residential real estate	1,457,498		1,406,510		1,400,855		50,988	4	%	56,643	4	%
Consumer home equity	834,938		832,466		905,484		2,472	—	%	(70,546)	(8)	%
Other consumer	234,410		251,725		334,734		(17,315)	(7)	%	(100,324)	(30)	%
Total loans	9,621,075		9,916,475		10,014,338		(295,400)	(3)	%	(393,263)	(4)	%
Allowance for loan losses	(105,637)		(111,080)		(116,636)		5,443	(5)	%	10,999	(9)	%
Unamortized prem./disc. and def. fees	(29,739)		(32,673)		(34,722)		2,934	(9)	%	4,983	(14)	%
Net loans	9,485,699		9,772,722		9,862,980		(287,023)	(3)	%	(377,281)	(4)	%
Federal Home Loan Bank stock, at cost	10,601		8,805		8,805		1,796	20	%	1,796	20	%
Premises and equipment	44,733		46,619		52,475		(1,886)	(4)	%	(7,742)	(15)	%
Bank-owned life insurance	79,634		79,110		77,528		524	1	%	2,106	3	%
Goodwill and other intangibles, net	380,402		376,002		376,331		4,400	1	%	4,071	1	%
Deferred income taxes, net	26,161		31,508		7,663		(5,347)	(17)	%	18,498	241	%
Prepaid expenses	145,941		150,453		92,517		(4,512)	(3)	%	53,424	58	%
Other assets	458,520		412,969		482,337		45,551	11	%	(23,817)	(5)	%
Total assets	17,047,453		16,726,795		13,996,523		320,658	2	%	3,050,930	22	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand	5,399,297		5,369,164		4,740,125		30,133	1	%	659,172	14	%
Interest checking accounts	2,656,610		2,482,731		2,385,912		173,879	7	%	270,698	11	%
Savings accounts	1,403,472		1,362,463		1,157,606		41,009	3	%	245,866	21	%
Money market investment	3,544,897		3,522,990		3,254,202		21,907	1	%	290,695	9	%
Certificates of deposit	246,157		243,527		308,920		2,630	1	%	(62,763)	(20)	%
Total deposits	13,250,433		12,980,875		11,846,765		269,558	2	%	1,403,668	12	%
Borrowed funds:
Federal Home Loan Bank advances	14,323		14,473		14,922		(150)	(1)	%	(599)	(4)	%
Escrow deposits of borrowers	14,119		14,878		14,233		(759)	(5)	%	(114)	(1)	%
Total borrowed funds	28,442		29,351		29,155		(909)	(3)	%	(713)	(2)	%
Other liabilities	337,956		329,524		426,973		8,432	3	%	(89,017)	(21)	%
Total liabilities	13,616,831		13,339,750		12,302,893		277,081	2	%	1,313,938	11	%
Shareholders' equity:
Common shares	1,868		1,868		—		—	—	%	1,868	—	%
Additional paid-in capital	1,856,241		1,854,895		—		1,346	—	%	1,856,241	—	%
Unallocated common shares held by the employee stock ownership plan ("ESOP")	(145,219)		(146,472)		—		1,253	(1)	%	(145,219)	—	%
Retained earnings	1,723,979		1,702,946		1,681,164		21,033	1	%	42,815	3	%
Accumulated other comprehensive income ("AOCI"), net of tax	(6,247)		(26,192)		12,466		19,945	(76)	%	(18,713)	(150)	%
Total shareholders' equity	3,430,622		3,387,045		1,693,630		43,577	1	%	1,736,992	103	%
Total liabilities and shareholders' equity	17,047,453		16,726,795		13,996,523		320,658	2	%	3,050,930	22	%

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	Three months ended						Three months ended Jun 30, 2021 change from three months ended
(Unaudited, dollars in thousands, except share data)	Jun 30, 2021		Mar 31, 2021		Jun 30, 2020		Mar 31, 2021			Jun 30, 2020
Interest and dividend income:							△ $	△ %		△ $	△ %
Interest and fees on loans	$	90,936	$	88,639	$	92,143	2,297	3	%	(1,207)	(1)	%
Taxable interest and dividends on available for sale securities	12,457		10,206		7,600		2,251	22	%	4,857	64	%
Non-taxable interest and dividends on available for sale securities	1,857		1,856		1,905		1	—	%	(48)	(3)	%
Interest on federal funds sold and other short-term investments	431		432		284		(1)	—	%	147	52	%
Interest and dividends on trading securities	—		—		1		—	—	%	(1)	(100)	%
Total interest and dividend income	105,681		101,133		101,933		4,548	4	%	3,748	4	%
Interest expense:
Interest on deposits	1,031		1,002		3,104		29	3	%	(2,073)	(67)	%
Interest on borrowings	42		40		74		2	5	%	(32)	(43)	%
Total interest expense	1,073		1,042		3,178		31	3	%	(2,105)	(66)	%
Net interest income	104,608		100,091		98,755		4,517	5	%	5,853	6	%
(Release of) provision for allowance for loan losses	(3,300)		(580)		8,600		(2,720)	469	%	(11,900)	(138)	%
Net interest income after provision for loan losses	107,908		100,671		90,155		7,237	7	%	17,753	20	%
Noninterest income:
Insurance commissions	23,664		28,147		22,697		(4,483)	(16)	%	967	4	%
Service charges on deposit accounts	5,708		5,367		4,364		341	6	%	1,344	31	%
Trust and investment advisory fees	6,074		5,663		5,194		411	7	%	880	17	%
Debit card processing fees	3,170		2,749		2,337		421	15	%	833	36	%
Interest rate swap (losses) income	(1,164)		5,405		771		(6,569)	(122)	%	(1,935)	(251)	%
Income from investments held in rabbi trusts	4,216		1,846		7,745		2,370	128	%	(3,529)	(46)	%
Losses on trading securities, net	—		—		(1)		—	—	%	1	(100)	%
Gains on sales of mortgage loans held for sale, net	848		1,479		1,420		(631)	(43)	%	(572)	(40)	%
Gains on sales of securities available for sale, net	1		1,164		163		(1,163)	(100)	%	(162)	(99)	%
Other	3,216		3,392		2,967		(176)	(5)	%	249	8	%
Total noninterest income	45,733		55,212		47,657		(9,479)	(17)	%	(1,924)	(4)	%
Noninterest expense:
Salaries and employee benefits	69,276		64,040		63,335		5,236	8	%	5,941	9	%
Office occupancy and equipment	8,094		8,217		8,615		(123)	(1)	%	(521)	(6)	%
Data processing	13,572		12,129		12,180		1,443	12	%	1,392	11	%
Professional services	6,439		4,148		4,396		2,291	55	%	2,043	46	%
Charitable contributions	—		—		2,797		—	—	%	(2,797)	(100)	%
Marketing	3,497		1,691		1,645		1,806	107	%	1,852	113	%
Loan expenses	1,854		1,847		2,036		7	—	%	(182)	(9)	%
Federal Deposit Insurance Corporation ("FDIC") insurance	985		948		944		37	4	%	41	4	%
Amortization of intangible assets	625		532		701		93	17	%	(76)	(11)	%
Other	2,993		497		4,116		2,496	502	%	(1,123)	(27)	%
Total noninterest expense	107,335		94,049		100,765		13,286	14	%	6,570	7	%
Income before income tax expense	46,306		61,834		37,047		(15,528)	(25)	%	9,259	25	%
Income tax expense	11,497		14,171		7,197		(2,674)	(19)	%	4,300	60	%
Net income	34,809		47,663		29,850		(12,854)	(27)	%	4,959	17	%
Share data:
Weighted average common shares outstanding (1)	172,173,707		172,049,044		n.a.
Earnings per share	$	0.20	$	0.28	n.a.
(1) 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.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	Six months ended
(Unaudited, dollars in thousands, except share data)	Jun 30, 2021		Jun 30, 2020		Change
Interest and dividend income:					△ $	△ %
Interest and fees on loans	$	179,575	$	187,681	(8,106)	(4)	%
Taxable interest and dividends on available for sale securities	22,663		15,778		6,885	44	%
Non-taxable interest and dividends on available for sale securities	3,713		3,826		(113)	(3)	%
Interest on federal funds sold and other short-term investments	863		801		62	8	%
Interest and dividends on trading securities	—		6		(6)	(100)	%
Total interest and dividend income	206,814		208,092		(1,278)	(1)	%
Interest expense:
Interest on deposits	2,033		8,518		(6,485)	(76)	%
Interest on borrowings	82		673		(591)	(88)	%
Total interest expense	2,115		9,191		(7,076)	(77)	%
Net interest income	204,699		198,901		5,798	3	%
(Release of) provision for allowance for loan losses	(3,880)		37,200		(41,080)	(110)	%
Net interest income after provision for loan losses	208,579		161,701		46,878	29	%
Noninterest income:
Insurance commissions	51,811		50,174		1,637	3	%
Service charges on deposit accounts	11,075		10,462		613	6	%
Trust and investment advisory fees	11,737		10,289		1,448	14	%
Debit card processing fees	5,919		4,807		1,112	23	%
Interest rate swap income (losses)	4,241		(5,238)		9,479	(181)	%
Income from investments held in rabbi trusts	6,062		1,002		5,060	505	%
Losses on trading securities, net	—		(3)		3	(100)	%
Gains on sales of mortgage loans held for sale, net	2,327		1,513		814	54	%
Gains on sales of securities available for sale, net	1,165		285		880	309	%
Other	6,608		7,735		(1,127)	(15)	%
Total noninterest income	100,945		81,026		19,919	25	%
Noninterest expense:
Salaries and employee benefits	133,316		124,924		8,392	7	%
Office occupancy and equipment	16,311		17,304		(993)	(6)	%
Data processing	25,701		22,184		3,517	16	%
Professional services	10,587		8,085		2,502	31	%
Charitable contributions	—		3,984		(3,984)	(100)	%
Marketing	5,188		4,113		1,075	26	%
Loan expenses	3,701		3,148		553	18	%
FDIC insurance	1,933		1,850		83	4	%
Amortization of intangible assets	1,157		1,403		(246)	(18)	%
Other	3,490		8,942		(5,452)	(61)	%
Total noninterest expense	201,384		195,937		5,447	3	%
Income before income tax expense	108,140		46,790		61,350	131	%
Income tax expense	25,668		8,495		17,173	202	%
Net income	82,472		38,295		44,177	115	%
Share data:
Weighted average common shares outstanding (1)	172,111,372		n.a.
Earnings per share	$	0.48	n.a.
(1) 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.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN

	As of and for the three months ended
	Jun 30, 2021						Mar 31, 2021						Jun 30, 2020
(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	$	7,301,745	$	71,747	3.94	%	$	7,317,951	$	69,210	3.84	%	$	7,195,093	$	69,779	3.90	%
Residential	1,433,056		11,397		3.19	%	1,393,139		11,274		3.28	%	1,416,326		12,555		3.57	%
Consumer	1,061,900		8,597		3.25	%	1,105,698		8,937		3.28	%	1,263,691		10,610		3.38	%
Total loans	9,796,701		91,741		3.76	%	9,816,788		89,421		3.69	%	9,875,110		92,944		3.79	%
Investment securities	4,344,690		14,778		1.36	%	3,631,530		12,577		1.40	%	1,455,901		10,083		2.79	%
Federal funds sold and other short-term investments	1,617,741		431		0.11	%	1,740,561		432		0.10	%	1,148,332		284		0.10	%
Total interest-earning assets	15,759,132		106,950		2.72	%	15,188,879		102,430		2.73	%	12,479,343		103,311		3.33	%
Non-interest-earning assets	1,061,121						1,120,603						1,106,217
Total assets	$	16,820,253					$	16,309,482					$	13,585,560
Interest-bearing liabilities:
Deposits:
Savings	$	1,385,735	$	69	0.02	%	$	1,300,057	$	64	0.02	%	$	1,095,806	$	64	0.02	%
Interest checking	2,541,862		253		0.04	%	2,391,025		234		0.04	%	2,414,356		649		0.11	%
Money market	3,523,330		605		0.07	%	3,440,214		587		0.07	%	3,192,669		1,929		0.24	%
Time deposits	246,801		104		0.17	%	251,115		117		0.19	%	313,410		462		0.59	%
Total interest-bearing deposits	7,697,728		1,031		0.05	%	7,382,411		1,002		0.06	%	7,016,241		3,104		0.18	%
Borrowings	25,042		42		0.67	%	25,625		40		0.63	%	74,960		74		0.40	%
Total interest-bearing liabilities	7,722,770		1,073		0.06	%	7,408,036		1,042		0.06	%	7,091,201		3,178		0.18	%
Demand deposit accounts	5,355,170						5,125,831						4,448,756
Other noninterest-bearing liabilities	335,816						358,087						356,700
Total liabilities	13,413,756						12,891,954						11,896,657
Shareholders' equity	3,406,497						3,417,528						1,688,903
Total liabilities and shareholders' equity	$	16,820,253					$	16,309,482					$	13,585,560
Net interest income - FTE			$	105,877					$	101,388					$	100,133
Net interest rate spread (2)					2.66	%					2.67	%					3.15	%
Net interest-earning assets (3)	$	8,036,362					$	7,780,843					$	5,388,142
Net interest margin - FTE (4)					2.69	%					2.71	%					3.23	%
(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 represents net interest income divided by average total interest-earning assets.
(5) Presented on an annualized basis.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN

	As of and for the six months ended
	Jun 30, 2021						Jun 30, 2020
(Unaudited, dollars in thousands)	Avg. Balance		Interest		Yield / Cost (5)		Avg. Balance		Interest		Yield / Cost (5)
Interest-earning assets:
Loans (1):
Commercial	$	7,309,803	$	140,952	3.89	%	$	6,735,075	$	139,394	4.16	%
Residential	1,413,208		22,671		3.24	%	1,423,161		25,858		3.65	%
Consumer	1,083,677		17,534		3.26	%	1,287,430		24,017		3.75	%
Total loans	9,806,688		181,157		3.73	%	9,445,666		189,269		4.03	%
Investment securities	3,990,080		27,360		1.38	%	1,478,156		20,768		2.83	%
Federal funds sold and other short-term investments	1,678,812		863		0.10	%	694,386		801		0.23	%
Total interest earning assets	15,475,580		209,380		2.73	%	11,618,208		210,838		3.65	%
Non-interest-earning assets	1,089,585						1,064,218
Total assets	$	16,565,165					$	12,682,426
Interest-bearing liabilities:
Deposits:
Savings	$	1,343,133	$	133	0.02	%	$	1,036,344	$	118	0.02	%
Interest checking	2,466,860		487		0.04	%	2,158,242		1,467		0.14	%
Money market	3,482,002		1,193		0.07	%	3,087,048		5,833		0.38	%
Time deposits	248,946		220		0.18	%	320,277		1,100		0.69	%
Total interest-bearing deposits	7,540,941		2,033		0.05	%	6,601,911		8,518		0.26	%
Borrowings	25,332		82		0.65	%	119,211		673		1.14	%
Total interest-bearing liabilities	7,566,273		2,115		0.06	%	6,721,122		9,191		0.27	%
Demand deposit accounts	5,241,134						3,963,066
Other noninterest-bearing liabilities	345,776						337,679
Total liabilities	13,153,183						11,021,867
Shareholders' equity	3,411,982						1,660,559
Total liabilities and shareholders' equity	$	16,565,165					$	12,682,426
Net interest income - FTE			$	207,265					$	201,647
Net interest rate spread (2)					2.67	%					3.38	%
Net interest-earning assets (3)	$	7,909,307					$	4,897,086
Net interest margin - FTE (4)					2.70	%					3.49	%
(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 represents net interest income divided by average total interest-earning assets.
(5) Presented on an annualized basis.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

ASSET QUALITY - NON-PERFORMING ASSETS (1)

	As of
	Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Sep 30, 2020			Jun 30, 2020
(Unaudited, dollars in thousands)
Non-accrual loans:
Commercial	$	29,356		$	30,275		$	30,059		$	28,968		$	31,273
Residential	6,445			8,127			6,815			7,419			11,693
Consumer	4,106			3,873			4,131			4,727			9,374
Total non-accrual loans	39,907			42,275			41,005			41,114			52,340
Accruing loans past due 90 days or more:
Commercial	1,439			1,390			1,959			3,384			2,802
Residential	277			280			279			326			244
Consumer	9			9			9			9			9
Total accruing loans past due 90 days or more	1,725			1,679			2,247			3,719			3,055
Total non-performing loans	41,632			43,954			43,252			44,833			55,395
Other real estate owned	38			—			—			40			40
Other non-performing assets:	—			—			—			—			—
Total non-performing assets	$	41,670		$	43,954		$	43,252		$	44,873		$	55,435
Total accruing troubled debt restructured loans	$	38,316		$	39,367		$	41,095		$	39,881		$	40,691
Total non-performing loans to total loans	0.43		%	0.44		%	0.45		%	0.45		%	0.56		%
Total non-performing assets to total assets	0.24		%	0.26		%	0.27		%	0.29		%	0.40		%
(1) Non-performing assets are comprised of NPLs, 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.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE OFFS

	Three months ended
	Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Sep 30, 2020			Jun 30, 2020
(Unaudited, dollars in thousands)
Average total loans	$	9,796,701		$	9,816,788		$	9,796,697		$	9,914,731		$	9,875,110
Allowance for loan losses, beginning of the period	$	111,080		$	113,031		$	115,432		$	116,636		$	109,138
Charged-off loans:
Commercial and industrial	550			—			1,603			140			27
Commercial real estate	—			234			—			—			24
Commercial construction	—			—			—			—			—
Business banking	1,838			1,384			1,433			1,179			1,198
Residential real estate	—			—			—			—			—
Consumer home equity	—			—			79			22			—
Other consumer	275			364			713			1,077			15
Total charged-off loans	2,663			1,982			3,828			2,418			1,264
Recoveries on loans previously charged-off:
Commercial and industrial	13			9			92			306			58
Commercial real estate	4			—			220			4			5
Commercial construction	—			—			—			—			—
Business banking	291			365			47			91			27
Residential real estate	17			10			9			43			13
Consumer home equity	3			71			100			31			8
Other consumer	192			156			59			39			51
Total recoveries	520			611			527			514			162
Net loans charged-off (recoveries):
Commercial and industrial	537			(9)			1,511			(166)			(31)
Commercial real estate	(4)			234			(220)			(4)			19
Commercial construction	—			—			—			—			—
Business banking	1,547			1,019			1,386			1,088			1,171
Residential real estate	(17)			(10)			(9)			(43)			(13)
Consumer home equity	(3)			(71)			(21)			(9)			(8)
Other consumer	83			208			654			1,038			(36)
Total net loans charged-off	2,143			1,371			3,301			1,904			1,102
(Release of) provision for loan losses	(3,300)			(580)			900			700			8,600
Total allowance for loan losses, end of period	$	105,637		$	111,080		$	113,031		$	115,432		$	116,636
Net charge-offs to average total loans outstanding during this period (1)	0.09		%	0.06		%	0.13		%	0.08		%	0.04		%
Allowance for loan losses as a percent of total loans	1.10		%	1.12		%	1.16		%	1.16		%	1.17		%
Allowance for loan losses as a percent of nonperforming loans	253.74		%	252.72		%	261.33		%	257.47		%	210.55		%
(1) 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."

	Three Months Ended
(Unaudited, dollars in thousands, except share data)	Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Sep 30, 2020			Jun 30, 2020
Net income (GAAP)	$	34,809		$	47,663		$	(44,062)		$	28,505		$	29,850
Add:
Noninterest income components:
(Income) from investments held in rabbi trusts	(4,216)			(1,846)			(5,535)			(3,800)			(7,745)
(Gain) on sales of securities available for sale, net	(1)			(1,164)			(3)			—			(163)
(Gain) loss on sale of other assets	(29)			(18)			(49)			71			27
Noninterest expense components:
Rabbi trust employee benefit expense	2,063			986			2,838			1,445			3,985
(Reversal) impairment charge on tax credit investments	(1,419)			—			3,189			7,590			—
Indirect IPO costs (1)	—			—			—			549			380
(Gain) on sale of OREO	—			—			(61)			(546)			—
Merger and acquisition expenses	3,479			589			90			—			—
Settlement and expenses for putative consumer class action matters	3,325			—			—			—			—
Stock donation to the EBF	—			—			91,287			—			—
Total impact of non-GAAP adjustments	3,202			(1,453)			91,756			5,309			(3,516)
Less net tax benefit (expense) associated with non-GAAP adjustments (2)	914			(327)			16,082			1,492			(967)
Non-GAAP adjustments, net of tax	$	2,288		$	(1,126)		$	75,674		$	3,817		$	(2,549)
Operating net income (non-GAAP)	$	37,097		$	46,537		$	31,612		$	32,322		$	27,301
Weighted average common shares outstanding during the period (3):
Basic	172,173,707			172,049,044			171,812,535			—			—
Diluted	172,173,707			172,049,044			171,812,535			—			—
Earnings (loss) per share, basic	$	0.20		$	0.28		$	(0.26)		n.a.			n.a.
Earnings (loss) per share, diluted	$	0.20		$	0.28		$	(0.26)		n.a.			n.a.
Operating earnings per share, basic (non-GAAP)	$	0.22		$	0.27		$	0.18		n.a.			n.a.
Operating earnings per share, diluted (non-GAAP)	$	0.22		$	0.27		$	0.18		n.a.			n.a.
Return on average assets (4)	0.83		%	1.19		%	(1.11)		%	0.80		%	0.88		%
Add:
(Income) from investments held in rabbi trusts (4)	(0.10)%			(0.05)%			(0.14)%			(0.11)%			(0.23)%
(Gain) on sales of securities available for sale, net (4)	—%			(0.03)%			—%			—%			—%
(Gain) loss on sale of other assets (4)	—%			—%			—%			—%			—%
Rabbi trust employee benefit expense (4)	0.05%			0.02%			0.07%			0.04%			0.12%
(Reversal) impairment charge on tax credit investments (4)	(0.03)%			—%			0.08%			0.21%			—%
Indirect IPO costs (1) (4)	—%			—%			—%			0.02%			0.01%
(Gain) on sale of OREO (4)	—%			—%			—%			(0.02)%			—%
Merger and acquisition expenses (4)	0.08%			0.01%			—%			—%			—%
Settlement and expenses for putative consumer class action matters (4)	0.08%			—%			—%			—%			—%
Stock donation to the EBF (4)	—%			—%			2.29%			—%			—%
Less net tax benefit (expense) associated with non-GAAP adjustments (2) (4)	0.02%			(0.01)%			0.40%			0.04%			(0.03)%
Operating return on average assets (non-GAAP) (4)	0.89		%	1.15		%	0.79		%	0.90		%	0.81		%
Return on average shareholders' equity (4)	4.10		%	5.66		%	(5.61)		%	6.65		%	7.11		%
Add:
(Income) from investments held in rabbi trusts (4)	(0.50)%			(0.22)%			(0.70)%			(0.89)%			(1.84)%
(Gain) on sales of securities available for sale, net (4)	—%			(0.14)%			—%			—%			(0.04)%
(Gain) loss on sale of other assets (4)	—%			—%			(0.01)%			0.02%			0.01%
Rabbi trust employee benefit expense (4)	0.24%			0.12%			0.36%			0.34%			0.95%
(Reversal) impairment charge on tax credit investments (4)	(0.17)%			—%			0.41%			1.77%			—%
Indirect IPO costs (1) (4)	—%			—%			—%			0.13%			0.09%
(Gain) on sale of OREO (4)	—%			—%			(0.01)%			(0.13)%			—%
Merger and acquisition expenses (4)	0.41%			0.07%			0.01%			—%			—%
Settlement and expenses for putative consumer class action matters (4)	0.39%			—%			—%			—%			—%
Stock donation to the EBF (4)	—%			—%			11.62%			—%			—%
Less net tax benefit (expense) associated with non-GAAP adjustments (2) (4)	0.11%			(0.04)%			2.05%			0.35%			(0.23)%
Operating return on average shareholders' equity (non-GAAP) (4)	4.36		%	5.53		%	4.02		%	7.54		%	6.51		%
(1) Reflects costs associated with the Company's IPO that are indirectly related to the offering and were not recorded as a reduction of capital.
(2) The net tax benefit (expense) associated with these items is determined by assessing whether each item is included or excluded from net taxable income and applying the Company's combined statutory tax rate only to those items included in net taxable income. Additionally, the net tax benefit (expense) for the impairment charge of tax credit investment includes associated tax credit benefits.
(3) 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.
(4) 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, 2021			Mar 31, 2021			Dec 31, 2020			Sep 30, 2020			Jun 30, 2020
(Unaudited, dollars in thousands)
Net interest income (GAAP)	$	104,608		$	100,091		$	103,608		$	98,742		$	98,755
Add:
Tax-equivalent adjustment (non-GAAP)	1,269			1,297			1,357			1,353			1,378
Fully-taxable equivalent net interest income (non-GAAP)	$	105,877		$	101,388		$	104,965		$	100,095		$	100,133
Noninterest income (GAAP)	$	45,733		$	55,212		$	49,638		$	47,709		$	47,657
Less:
Income from investments held in rabbi trusts	4,216			1,846			5,535			3,800			7,745
Gain on sales of securities available for sale, net	1			1,164			3			—			163
Gain (loss) on sale of other assets	29			18			49			(71)			(27)
Noninterest income on an operating basis (non-GAAP)	$	41,487		$	52,184		$	44,051		$	43,980		$	39,776
Noninterest expense (GAAP)	$	107,335		$	94,049		$	199,169		$	109,817		$	100,765
Less:
Rabbi trust employee benefit expense	2,063			986			2,838			1,445			3,985
(Reversal) impairment charge on tax credit investments	(1,419)			—			3,189			7,590			—
Indirect IPO costs (1)	—			—			—			549			380
(Gain) on sale of OREO	—			—			(61)			(546)			—
Merger and acquisition expenses	3,479			589			90			—			—
Settlement and expenses for putative consumer class action matters	3,325			—			—			—			—
Stock donation to the EBF	—			—			91,287			—			—
Noninterest expense on an operating basis (non-GAAP)	$	99,887		$	92,474		$	101,826		$	100,779		$	96,400
Total revenue (GAAP)	$	150,341		$	155,303		$	153,246		$	146,451		$	146,412
Total operating revenue (non-GAAP)	$	147,364		$	153,572		$	149,016		$	144,075		$	139,909
Efficiency ratio (GAAP)	71.39		%	60.56		%	129.97		%	74.99		%	68.82		%
Operating efficiency ratio (non-GAAP)	67.78		%	60.22		%	68.33		%	69.95		%	68.90		%
Noninterest income / total revenue (GAAP)	30.42		%	35.55		%	32.39		%	32.58		%	32.55		%
Noninterest income / total revenue on an operating basis (non-GAAP)	28.15		%	33.98		%	29.56		%	30.53		%	28.43		%
(1) Reflects costs associated with the Company's IPO that are indirectly related to the offering and were not recorded as a reduction of capital.

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, 2021			Mar 31, 2021			Dec 31, 2020			Sep 30, 2020			Jun 30, 2020
(Unaudited, dollars in thousands, except share data)
Tangible shareholders' equity:
Total shareholders' equity (GAAP)	$	3,430,622		$	3,387,045		$	3,428,052		$	1,713,372		$	1,693,630
Less: Goodwill and other intangibles	380,402			376,002			376,534			375,632			376,331
Tangible shareholders' equity (non-GAAP)	3,050,220			3,011,043			3,051,518			1,337,740			1,317,299
Tangible assets:
Total assets (GAAP)	17,047,453			16,726,795			15,964,190			15,460,594			13,996,523
Less: Goodwill and other intangibles	380,402			376,002			376,534			375,632			376,331
Tangible assets (non-GAAP)	$	16,667,051		$	16,350,793		$	15,587,656		$	15,084,962		$	13,620,192
Shareholders' equity to assets ratio (GAAP)	20.12		%	20.25		%	21.47		%	11.08		%	12.10		%
Tangible shareholders' equity to tangible assets ratio (non-GAAP)	18.30		%	18.42		%	19.58		%	8.87		%	9.67		%
Common shares outstanding	186,758,154			186,758,154			186,758,154			—			—
Book value per share (GAAP)	$	18.37		$	18.14		$	18.36		n.a.			n.a.
Tangible book value per share (non-GAAP)	$	16.33		$	16.12		$	16.34		n.a.			n.a.

APPENDIX D: Reconciliation of Non-GAAP Credit Metrics

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

	As of
(Unaudited, dollars in thousands)	Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Sep 30, 2020			Jun 30, 2020
Total loans excluding PPP loans:
Total loans (GAAP) (1)	$	9,591,336		$	9,883,802		$	9,706,989		$	9,911,494		$	9,979,616
Less: PPP loans (1)	799,964			1,210,598			1,007,487			1,098,883			1,072,312
Total loans excluding PPP loans (non-GAAP)	$	8,791,372		$	8,673,204		$	8,699,502		$	8,812,611		$	8,907,304
Total nonperforming loans (NPLs) (GAAP)	$	41,632		$	43,954		$	43,252		$	44,833		$	55,395
Total NPLs / total loans (GAAP)	0.43		%	0.44		%	0.45		%	0.45		%	0.56		%
Total NPLs / total loans (excl. PPP loans) (non-GAAP)	0.47		%	0.51		%	0.50		%	0.51		%	0.62		%
Allowance for loan losses (ALLL) (GAAP)	$	105,637		$	111,080		$	113,031		$	115,432		$	116,636
ALLL / total loans (GAAP)	1.10		%	1.12		%	1.16		%	1.16		%	1.17		%
ALLL / total loans (excl. PPP loans) (non-GAAP)	1.20		%	1.28		%	1.30		%	1.31		%	1.31		%
	As of and for the three months ended
(Unaudited, dollars in thousands)	Jun 30, 2021			Mar 31, 2021			Dec 31, 2020			Sep 30, 2020			Jun 30, 2020
Average total loans excluding PPP Loans:
Average total loans (GAAP)	$	9,796,701		$	9,816,788		$	9,796,697		$	9,914,731		$	9,875,110
Less: Average PPP loans	1,073,688			1,131,516			1,076,155			1,091,464			818,665
Average total loans excluding PPP loans (non-GAAP)	$	8,723,013		$	8,685,272		$	8,720,542		$	8,823,267		$	9,056,445
Total net loans charged-off (NCOs) (GAAP)	$	2,143		$	1,371		$	3,301		$	1,904		$	1,102
NCOs / Average total loans (GAAP) (2)	0.09		%	0.06		%	0.13		%	0.08		%	0.04		%
NCOs / Average total loans (excl. PPP loans) (non-GAAP) (2)	0.10		%	0.06		%	0.15		%	0.09		%	0.05		%
(1) Includes unamortized premiums, net of unearned discounts and deferred fees.
(2) Presented on an annualized basis.

Appendix E: Reconciliation of Non-GAAP Core Margin

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

	As of and for the three months ended
	Jun 30, 2021						Mar 31, 2021
(Unaudited, dollars in thousands)	Volume		Interest		Margin Impact (1)		Volume		Interest		Margin Impact (1)
Reported total average interest-earning assets, net interest income, and net interest margin (2)	$	15,759,132	$	105,877	2.69	%	$	15,188,879	$	101,388	2.71	%
Non-GAAP adjustments:
PPP loan volume earning 1%	(1,073,688)		(2,742)		0.12	%	(1,131,516)		(2,887)		0.13	%
SBA PPP loan fee accretion, net of deferred origination cost amortization	—		(9,258)		(0.24)	%	—		(8,339)		(0.22)	%
Excess cash (3)	(1,302,558)		(357)		0.23	%	(1,436,783)		(354)		0.27	%
Deferred loan fee income adjustment	—		—		—	%	—		—		—	%
Core margin (Non-GAAP) (4)	$	13,382,886	$	93,520	2.80	%	$	12,620,580	$	89,808	2.89	%
Core margin change from prior quarter					(0.09)	%					(0.25)	%
	Dec 31, 2020						Sep 30, 2020
	Volume		Interest		Margin Impact (1)		Volume		Interest		Margin Impact (1)
Reported total average interest-earning assets, net interest income, and net interest margin (2)	$	14,715,494	$	104,965	2.84	%	$	13,089,839	$	100,095	3.04	%
Non-GAAP adjustments:
PPP loan volume earning 1%	(1,076,155)		(2,741)		0.14	%	(1,091,464)		(2,795)		0.18	%
SBA PPP loan fee accretion, net of deferred origination cost amortization	—		(6,102)		(0.16)	%	—		(4,125)		(0.13)	%
Excess cash (3)	(1,996,808)		(502)		0.43	%	(1,200,250)		(302)		0.30	%
Deferred loan fee income adjustment	—		(3,774)		(0.10)	%	—		—		—	%
Core margin (Non-GAAP) (4)	$	11,642,531	$	91,846	3.14	%	$	10,798,125	$	92,873	3.42	%
Core margin change from prior quarter					(0.28)	%
(1) Presented on an annualized basis.
(2) Presented on a fully taxable equivalent basis.
(3) Consists of cash above 2% of average total earning assets at a yield of 11 basis points in the three months ended June 30, 2021 and 10 basis points in prior quarters.
(4) Core margin is the margin that results from the combined volume and interest adjustments taken together.

APPENDIX F: COVID-19 Related Loan Modifications

	Remaining COVID-19 Modifications as of December 31, 2020 (1)				Remaining COVID-19 Modifications as of March 31, 2021 (1)				Remaining COVID-19 Modifications as of June 30, 2021 (1)
(Dollars in thousands)	Remaining Modifications		% of Total Loan Balance		Remaining Modifications		% of Total Loan Balance		Remaining Modifications		% of Total Loan Balance
Portfolio
Commercial and industrial	$	34,076	1.7	%	$	22,776	1.1	%	$	18,850	1.1	%
Commercial real estate	231,794		6.5	%	127,683		3.5	%	113,301		3.0	%
Commercial construction	10,987		3.6	%	—		—	%	—		—	%
Business banking	23,434		1.8	%	11,681		0.8	%	2,102		0.2	%
Residential real estate	26,772		2.0	%	13,754		1.0	%	13,428		0.9	%
Consumer home equity	3,432		0.4	%	1,274		0.2	%	1,124		0.1	%
Other consumer	2,187		0.8	%	1,262		0.5	%	999		0.4	%
Total	$	332,682	3.4	%	$	178,430	1.8	%	$	149,805	1.6	%
(1) Remaining COVID-19 modifications reflect those loans which underwent a modification and have not yet resumed payment. The Company defines a modified loan to have resumed payment if it is one month past the modification end date and not more than 30 days past due. These modifications with active deferrals met the criteria of either Section 4013 of the CARES Act or the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised) and therefore are not deemed troubled debt restructurings.

ebc-20210630xq22021earni

DO NOT REFRESH Color PaletteComplementary 000 / 000 / 051 Body text 074 / 075 / 076 030 / 152 / 213 185 / 197 / 212 023 / 061 / 110 119 / 139 / 154 255 / 107 / 000109 / 110 / 112 237 / 237 / 238 000 / 139 / 151 137 / 139 / 141 197 / 064 / 044 166 / 168 / 171 103 / 086 / 164 208 / 210 / 211 238 / 184 / 028 4 Non-GAAP financial measures used in this presentation are denoted by an asterisk. A non-GAAP financial measure is defined as a numerical measure of the Company’s historical or future financial performance, financial position or cash flows that excludes (or includes) 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 businesses 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, 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) expenses indirectly associated with the Company’s initial public offering (“IPO”), (vii) other real estate owned (“OREO”) gains, (viii) merger and acquisition expenses, (ix) the stock donation to the Eastern Bank Foundation (“EBF”), formerly known as the Eastern Bank Charitable Foundation) in connection with the Company’s mutual-to-stock conversion and IPO, and (x) settlement of putative consumer class action litigation matters related to overdraft and non-sufficient funds fees, and associated settlement expenses. The Company does not provide an outlook for its total noninterest expense because it contains expense components, such as expense associated with rabbi trust accounts, which is market-driven, over which the Company cannot exercise control. Accordingly, a reconciliation of the Company’s outlook for its noninterest expense on an operating basis to an outlook for total noninterest expense cannot be made available without unreasonable effort. Management also presents the Company’s core net interest margin which excludes the impact of items management determines as being one-time in nature or not indicative of its core operating results. Such items include the impact of excess liquidity in the form of excess cash volume, Small Business Administration ("SBA") Paycheck Protection Program ("PPP") loans originated in response to the COVID-19 pandemic, and material purchase accounting adjustments. Similarly, management presents certain asset quality metrics excluding PPP loans which it does not consider to be part of the Company’s core portfolios. These metrics include the ratio of total nonperforming loans to total loans excluding PPP loans, the ratio of the allowance for loan losses to total loans excluding PPP loans, and the ratio of annualized net charge-offs to average total loans excluding PPP loans. The Company does not provide an outlook for its ratio of the allowance for loan losses to total loans because it contains components, such as the volume of PPP loans which is market-driven, over which the Company cannot exercise control. Accordingly, a reconciliation of the Company’s outlook for its ratio of the allowance for loan losses to total loans to an outlook for its ratio of the allowance for loan losses to total loans excluding PPP loans cannot be made available without unreasonable effort. The Company does not provide an outlook for its ratio of annualized net charge-offs to average total loans because it contains components, such as the volume PPP loans which is market- driven, over which the Company cannot exercise control. Accordingly, a reconciliation of the Company’s outlook for its ratio of annualized net charge-offs to average total loans to an outlook for its ratio of annualized net charge-offs to average total loans excluding PPP loans cannot be made available without unreasonable effort. The Company anticipates that the vast majority of its PPP loans outstanding at June 30, 2021 will be forgiven, and to the extent not forgiven, a PPP loan is intended to be 100% guaranteed by the SBA. Management also presents tangible assets, tangible shareholders’ equity, tangible book value per share, and the ratio of tangible shareholders’ equity to tangible assets, 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 presentation 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 a reconciliations of the Company's GAAP financial measures to the non-GAAP financial measures in this presentation. Non-GAAP financial measures

DO NOT REFRESH Color PaletteComplementary 000 / 000 / 051 Body text 074 / 075 / 076 030 / 152 / 213 185 / 197 / 212 023 / 061 / 110 119 / 139 / 154 255 / 107 / 000109 / 110 / 112 237 / 237 / 238 000 / 139 / 151 137 / 139 / 141 197 / 064 / 044 166 / 168 / 171 103 / 086 / 164 208 / 210 / 211 238 / 184 / 028 11 Securities portfolio 6/30/2021 3/31/2021 06/30/2021 change from 03/31/2021 $ in millions Fair Value Percent of Portfolio Fair Value Percent of Portfolio Fair Value Percent of Portfolio Government sponsored residential MBS $ 3,478.5 72 % $ 2,691.7 68 % $ 786.8 4.0 % Government sponsored commercial MBS 181.8 4 % 116.3 3 % $ 65.5 1.0 % U.S. Agency bonds 841.0 17 % 831.7 21 % $ 9.3 (4.0) % U.S. Treasury securities 69.3 1 % 69.1 2 % $ 0.2 (1.0) % State and municipal bonds and obligations 278.1 6 % 277.5 7 % $ 0.6 (1.0) % Total $ 4,848.7 100 % $ 3,986.3 100 % $ 862.4 $3,479 $182 $841 $69 $278 $2,692 $116 $832 $69 $278 6/30/2021 3/31/2021 Government sponsored residential MBS Government sponsored commercial MBS U.S. Agency bonds U.S. Treasury securities State and municipal bonds and obligations Investment composition $ in millions