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 28, 2022

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 28, 2022, 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, 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 June 30, 2022, the Company announced the approval by its Board of Directors of a regular quarterly cash dividend of $0.10 per share payable on September 15, 2022 to shareholders of record on September 2, 2022.

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 28, 2022. 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 28, 2022
99.2	Presentation titled "Q2 Earnings Presentation" dated July 28, 2022
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 28, 2022	By:	/s/ James B. Fitzgerald
		James B. Fitzgerald
		Chief Financial Officer

Document

Exhibit 99.1

Eastern Bankshares, Inc. Reports Second Quarter 2022 Financial Results

Company Declares Quarterly Cash Dividend

BOSTON, July 28, 2022 (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 second quarter financial results and the declaration of a quarterly cash dividend. Net income for the second quarter of 2022 was $51.2 million, or $0.31 per diluted share, compared to net income of $51.5 million, or $0.30 per diluted share, reported for the first quarter of 2022. Operating net income* for the second quarter of 2022 was $52.5 million, or $0.32 per diluted share, compared to $55.1 million, or $0.32 per diluted share, reported for the prior quarter.

“Our financial results for the second quarter were strong, with net interest income benefiting from the combination of the rising rate environment and our asset-sensitive balance sheet,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “Our net interest margin expanded by twenty-one basis points from the prior quarter, driving an eight percent increase in net interest income and record quarterly revenue. Loan growth was also strong, as we achieved double-digit annualized growth in each of our major lending categories while maintaining excellent credit quality and underwriting standards. We remain focused on achieving our strategic priorities and are optimistic about the strength and resiliency of our local economy."

HIGHLIGHTS FOR THE SECOND QUARTER OF 2022

•Operating net income* of $52.5 million, or $0.32 per diluted share, for the second quarter of 2022 was 42% higher than the comparable prior year quarter.

•Net interest income of $137.8 million for the second quarter of 2022 was 8% higher than the prior quarter and 32% higher than the comparable prior year quarter.

•The net interest margin on a fully tax equivalent (“FTE”) basis* of 2.63% for the second quarter was 21 basis points higher than the prior quarter.

•The cost of deposits was 6 basis points in the second quarter, a decrease of one basis point from the prior quarter.

•Loan growth excluding Paycheck Protection Program (“PPP”) loans was 10.5% on an annualized basis, and included double-digit annualized growth in commercial (excluding PPP loans), residential, and consumer lending.

•The Company repurchased 4,216,469 shares of its common stock during the second quarter of 2022 at a weighted average price of $19.24 excluding commissions, for an aggregate purchase price of $81.1 million.

The results for the comparable prior year quarter do not reflect the Company’s acquisition of Century Bancorp, Inc. (“Century”), which was completed on November 12, 2021.

BALANCE SHEET

Total assets were $22.4 billion at June 30, 2022, representing a decrease of $485.2 million, or 2%, from March 31, 2022.

•Total securities decreased $287.2 million, or 3%, from the prior quarter, to $8.0 billion, primarily due to a decline in the market value of available for sale securities driven by higher interest rates. Cash and equivalents declined $461.6 million from the prior quarter to $368.9 million.

•Total loans were $12.4 billion, representing an increase of $216.5 million, or 2%, from the prior quarter. The increase was driven by strong loan growth in all categories, partially offset by PPP loan paydowns of $98.7 million. Excluding PPP loans, commercial loans grew $218.6 million, residential loans grew $53.4 million and consumer loans grew $43.1 million, reflecting growth of 10.0%, 11.1%, and 13.3%, respectively, on an annualized basis.

•Deposits totaled $19.2 billion, representing a decrease of $229.0 million, or 1%, from the prior quarter. Deposits declined by approximately $300 million on April 1, 2022 in connection with the previously announced transfer to Needham Bank of the Company’s cannabis and money services business originally acquired through the Century transaction.

•Shareholders’ equity was $2.7 billion, representing a decrease of $290.0 million from the prior quarter driven primarily by decreases in accumulated other comprehensive income of $248.5 million and additional paid-in capital of $77.2 million and partially offset by an increase in retained earnings of $34.5 million. Please refer to Appendix D to this press release for a roll forward of tangible shareholders’ equity*.

•At June 30, 2022, book value per share was $15.17 and tangible book value per share* was $11.52.

NET INTEREST INCOME

Net interest income was $137.8 million for the second quarter of 2022, compared to $128.1 million in the prior quarter, representing an increase of $9.6 million from the prior quarter.

•The increase in net interest income on a consecutive quarter basis was primarily due to an increase in the net interest margin, which benefited primarily from higher short-term interest rates. This was partially offset by a decline in average interest-earning asset balances of $410.7 million from the prior quarter, attributable to a lower average cash balance for the period, which was driven by lower average deposits.

•The net interest margin on a FTE basis* was 2.63% for the second quarter, representing a 21 basis point increase from the prior quarter, as asset yields benefited from higher interest rates in the period, partially offset by lower net PPP fee accretion compared to the prior quarter.

•Included in net interest income in the second quarter and prior quarter, respectively, was $2.5 million and $5.8 million of PPP fee accretion net of deferred cost amortization. During the second quarter, $98.7 million in PPP loans were forgiven by the U.S. Small Business Administration or otherwise paid down, compared to $190.2 million in the prior quarter.

NONINTEREST INCOME

Noninterest income was $41.9 million for the second quarter of 2022, compared to $46.4 million for the prior quarter, representing a decrease of $4.5 million. Noninterest income on an operating basis* was $48.0 million for the second quarter of 2022, compared to $53.3 million for the prior quarter, a decrease of $5.2 million.

•Insurance commissions decreased $4.0 million to $24.7 million in the second quarter, compared to $28.7 million in the prior quarter, driven by lower annual incentive payments received. Compared to the comparable prior year quarter, insurance commissions increased $1.0 million, or 4%.

•Service charges on deposit accounts decreased $0.2 million on a consecutive quarter basis to $8.3 million.

•Trust and investment advisory fees decreased $0.1 million on a consecutive quarter basis to $6.0 million.

•Debit card processing fees increased $0.3 million on a consecutive quarter basis to $3.2 million.

•Loan-level interest rate swap income was $1.6 million in the second quarter, compared to $2.9 million in the prior quarter, representing a decrease of $1.3 million. The decrease was driven by a $0.8 million decrease in the fair value adjustment of such interest rate swap transactions and a $0.5 million decrease in cash income due to lower swap transaction volume.

•Losses from investments held in rabbi trust accounts were $7.3 million in the second quarter compared to losses of $4.4 million in the prior quarter due to weaker investment performance in the period as compared to the prior quarter.

•Realized losses on available for sale securities were $0.1 million in the second quarter compared to $2.2 million in the prior quarter.

•Other noninterest income increased $1.9 million in the second quarter to $5.4 million, due primarily to increases in income on bank owned life insurance policies, gains on the sale of fixed assets, and other miscellaneous fee income.

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

NONINTEREST EXPENSE

Noninterest expense was $111.1 million for the second quarter of 2022, compared to $108.9 million in the prior quarter, representing an increase of $2.3 million. Noninterest expense on an operating basis* for the second quarter of 2022 was $114.4 million, compared to $110.9 million in the prior quarter, an increase of $3.5 million.

•Salaries and employee benefits expense was $73.0 million in the second quarter, representing an increase of $3.5 million from the prior quarter, primarily due to an increase in equity award and incentive compensation expense which was partially offset by a decrease in benefits expense primarily attributable to the lower market value of investments held in rabbi trust accounts associated with the Company’s defined contribution supplemental executive retirement plan.

•Office occupancy and equipment expense was $9.9 million in the second quarter, a decrease of $1.7 million from the prior quarter, in part due to lower costs related to Century compared to the prior quarter.

•Data processing expenses were $14.3 million in the second quarter, a decrease of $1.0 million from the prior quarter, primarily due to lower core data processing expenses.

•Professional services expense was $4.0 million in the second quarter, a decrease of $0.7 million from the prior quarter due primarily to lower legal fees and other professional fees.

•Marketing expense was $2.7 million in the second quarter, an increase of $1.1 million from the prior quarter, primarily due to higher advertising expenses in the period.

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 $125.5 million at June 30, 2022, or 1.01% of total loans, compared to $124.2 million or 1.02% of total loans at March 31, 2022. The Company recorded a provision for the allowance for loan losses totaling $1.1 million in the second quarter of 2022.

Non-performing loans totaled $59.9 million at June 30, 2022 compared to $33.8 million at the end of the prior quarter. The increase from the prior quarter was primarily attributable to the migration to nonaccrual status of one syndicated credit facility which is in an active workout process. During the second quarter of 2022, the Company recorded total net recoveries of $0.3 million, or 0.01% of average total loans on an annualized basis, compared to net charge-offs of $0.2 million or 0.01% of average total loans in the prior quarter, respectively.

At June 30, 2022, approximately $19.9 million in COVID-19 modified loans remained under modified payment terms, down from $49.0 million at March 31, 2022. The commercial real estate portfolio contained $12.8 million of the remaining COVID-19 modifications at period end, all of which were in the hotel segment.

DIVIDENDS AND SHARE REPURCHASES

The Company’s Board of Directors has declared a quarterly cash dividend of $0.10 per common share. The dividend will be payable on September 15, 2022 to shareholders of record as of the close of business on September 2, 2022.

The Company repurchased 4,216,469 shares of its common stock during the second quarter of 2022 at a weighted average price of $19.24 excluding commissions, for an aggregate purchase price of $81.1 million. Beginning in the fourth quarter of 2021 and through June 30, 2022, the Company had repurchased 8,218,968 shares of its common stock in total under the Company’s current repurchase authorization at a weighted average price of $20.06 excluding commissions, for an aggregate purchase price of $164.9 million. At June 30, 2022, there were 1,118,932 shares available for repurchase and $60.1 million in total market value remaining under the Company’s current repurchase authorization, which expires on November 30, 2022 and is limited to $225.0 million in total market value.

CONFERENCE CALL INFORMATION

A conference call and webcast covering Eastern’s second quarter 2022 earnings will be held on Friday, July 29, 2022 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 97071632. 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.

ABOUT EASTERN BANKSHARES, INC.

Eastern Bankshares, Inc. is the stock holding company for Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 120 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of June 30, 2022, Eastern Bank had approximately $22 billion in total assets. Eastern provides banking, investment and insurance products and services for consumers and businesses of all sizes, including through its Eastern Wealth Management division and its Eastern Insurance Group LLC subsidiary. Eastern takes pride in its outspoken advocacy and community support that

includes $240 million in charitable giving since 1994. An inclusive company, Eastern employs approximately 2,100 deeply committed professionals who value relationships with their customers, colleagues, and communities. For investor information, visit investor.easternbank.com.

CONTACT

Investor Contact

Jillian Belliveau

Eastern Bankshares, Inc.

InvestorRelations@easternbank.com

781-598-7920

Media Contact

Andrea Goodman

Eastern Bank

a.goodman@easternbank.com

781-598-7847

NON-GAAP FINANCIAL MEASURES

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

A non-GAAP financial measure is defined as a numerical measure of the Company’s historical or future financial performance, financial position or cash flows that excludes (or includes) amounts, or is subject to adjustments that have the effect of excluding (or including) amounts that are included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) in the Company’s statement of income, balance sheet or statement of cash flows (or equivalent statements).

The Company presents non-GAAP financial measures, which management uses to evaluate the Company’s performance, and which exclude the effects of certain transactions that management believes are unrelated to its core business and are therefore not necessarily indicative of its current performance or financial position. Management believes excluding these items facilitates greater visibility for investors into the Company’s core 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, 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) 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 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 the interest rate environment; risks that revenue or expense synergies or the other expected benefits of the Company’s merger with Century (“Transaction”) may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; risks that the Company is unable to successfully implement integration strategies for the Transaction; reputational risks and the reaction of customers to the Transaction; and diversion of management time on Transaction-related issues; as well as general economic conditions or conditions within the securities markets; and 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 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; credit quality, 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.

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; reduced demand for office space in the Company’s markets due to remote and/or hybrid work arrangements; 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, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
Earnings data
Net interest income	$	137,757		$	128,124		$	122,437		$	102,691		$	104,608
Noninterest income	41,877			46,415			49,001			43,209			45,733
Total revenue	179,634			174,539			171,438			145,900			150,341
Noninterest expense	111,139			108,866			143,602			98,970			107,335
Pre-tax, pre-provision income	68,495			65,673			27,836			46,930			43,006
Provision for (release of) allowance for loan losses	1,050			(485)			(4,318)			(1,488)			(3,300)
Pre-tax income	67,445			66,158			32,154			48,418			46,306
Net income	51,172			51,516			35,087			37,106			34,809
Operating net income (non-GAAP)	52,518			55,107			44,860			37,391			37,097
Per-share data
Earnings per share, basic	$	0.31		$	0.30		$	0.20		$	0.22		$	0.20
Earnings per share, diluted	$	0.31		$	0.30		$	0.20		$	0.22		$	0.20
Operating earnings per share, basic (non-GAAP)	$	0.32		$	0.32		$	0.26		$	0.22		$	0.22
Operating earnings per share, diluted (non-GAAP)	$	0.32		$	0.32		$	0.26		$	0.22		$	0.22
Book value per share	$	15.17		$	16.40		$	18.28		$	18.36		$	18.37
Tangible book value per share (non-GAAP)	$	11.52		$	12.83		$	14.80		$	16.33		$	16.33
Profitability
Return on average assets (1)	0.92		%	0.90		%	0.67		%	0.84		%	0.83		%
Operating return on average assets (non-GAAP) (1)	0.94		%	0.96		%	0.86		%	0.86		%	0.89		%
Return on average shareholders' equity (1)	7.16		%	6.38		%	4.07		%	4.27		%	4.10		%
Operating return on average shareholders' equity (1)	7.34		%	6.82		%	5.19		%	4.30		%	4.36		%
Return on average tangible shareholders' equity (non-GAAP) (1)	9.28		%	7.96		%	4.80		%	4.79		%	4.61		%
Operating return on average tangible shareholders' equity (non-GAAP) (1)	9.53		%	8.53		%	6.14		%	4.84		%	4.91		%
Net interest margin (FTE) (1)	2.63		%	2.42		%	2.54		%	2.53		%	2.69		%
Cost of deposits (1)	0.06		%	0.07		%	0.06		%	0.02		%	0.03		%
Fee income ratio	23.31		%	26.59		%	28.58		%	29.62		%	30.42		%
Efficiency ratio	61.87		%	62.37		%	83.76		%	67.83		%	71.39		%
Operating efficiency ratio (non-GAAP)	60.61		%	60.39		%	65.21		%	66.14		%	67.78		%
Balance Sheet (end of period)
Total assets	$	22,350,848		$	22,836,072		$	23,512,128		$	17,461,223		$	17,047,453
Total loans	12,398,694			12,182,203			12,281,510			9,504,562			9,621,075
Total deposits	19,163,801			19,392,816			19,628,311			13,649,964			13,250,433
Total loans / total deposits	65		%	63		%	63		%	70		%	73		%
PPP loans	$	42,463		$	141,166		$	331,385		$	533,965		$	825,784
Asset quality
Allowance for loan losses ("ALLL") (2)	$	125,531		$	124,166		$	97,787		$	103,398		$	105,637
ALLL / total nonperforming loans ("NPLs")	209.64		%	367.13		%	279.53		%	245.77		%	253.74		%
Total NPLs / total loans	0.48		%	0.28		%	0.29		%	0.44		%	0.43		%
Net (recoveries) charge-offs ("NCOs") / average total loans (1)	(0.01)		%	0.01		%	0.05		%	0.03		%	0.09		%
Remaining COVID-19 loan modifications	$	19,914		$	49,033		$	106,657		$	110,596		$	149,805
Capital adequacy
Shareholders' equity / assets	12.16		%	13.17		%	14.49		%	19.64		%	20.12		%
Tangible shareholders' equity / tangible assets (non-GAAP)	9.52		%	10.61		%	12.06		%	17.85		%	18.30		%
(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						Jun 30, 2022 change from
(Unaudited, dollars in thousands)	Jun 30, 2022		Mar 31, 2022		Jun 30, 2021		Mar 31, 2022			Jun 30, 2021
ASSETS							△	△ %		△	△ %
Cash and due from banks	$	100,309	$	118,362	$	58,490	(18,053)	(15)	%	41,819	71	%
Short-term investments	268,605		712,132		1,505,757		(443,527)	(62)	%	(1,237,152)	(82)	%
Cash and cash equivalents	368,914		830,494		1,564,247		(461,580)	(56)	%	(1,195,333)	(76)	%
Available for sale ("AFS") securities	7,536,921		7,917,305		4,848,781		(380,384)	(5)	%	2,688,140	55	%
Held to maturity ("HTM") securities	488,581		395,434		—		93,147	24	%	488,581	—	%
Total securities	8,025,502		8,312,739		4,848,781		(287,237)	(3)	%	3,176,721	66	%
Loans held for sale	764		1,166		2,734		(402)	(34)	%	(1,970)	(72)	%
Loans:
Commercial and industrial	2,840,734		2,886,560		1,740,679		(45,826)	(2)	%	1,100,055	63	%
Commercial real estate	4,792,345		4,609,824		3,775,771		182,521	4	%	1,016,574	27	%
Commercial construction	303,463		246,093		237,927		57,370	23	%	65,536	28	%
Business banking	1,126,853		1,201,007		1,339,852		(74,154)	(6)	%	(212,999)	(16)	%
Total commercial loans	9,063,395		8,943,484		7,094,229		119,911	1	%	1,969,166	28	%
Residential real estate	1,989,621		1,936,182		1,457,498		53,439	3	%	532,123	37	%
Consumer home equity	1,147,425		1,099,211		834,938		48,214	4	%	312,487	37	%
Other consumer	198,253		203,326		234,410		(5,073)	(2)	%	(36,157)	(15)	%
Total loans	12,398,694		12,182,203		9,621,075		216,491	2	%	2,777,619	29	%
Allowance for loan losses	(125,531)		(124,166)		(105,637)		(1,365)	1	%	(19,894)	19	%
Unamortized prem./disc. and def. fees	(20,988)		(24,434)		(29,739)		3,446	(14)	%	8,751	(29)	%
Net loans	12,252,175		12,033,603		9,485,699		218,572	2	%	2,766,476	29	%
Federal Home Loan Bank stock, at cost	5,714		10,904		10,601		(5,190)	(48)	%	(4,887)	(46)	%
Premises and equipment	69,019		73,180		44,733		(4,161)	(6)	%	24,286	54	%
Bank-owned life insurance	158,890		157,954		79,634		936	1	%	79,256	100	%
Goodwill and other intangibles, net	653,853		654,759		380,402		(906)	—	%	273,451	72	%
Deferred income taxes, net	244,153		183,137		26,161		61,016	33	%	217,992	833	%
Prepaid expenses	188,115		188,704		145,941		(589)	—	%	42,174	29	%
Other assets	383,749		389,432		458,520		(5,683)	(1)	%	(74,771)	(16)	%
Total assets	$	22,350,848	$	22,836,072	$	17,047,453		(2)	%		31	%
LIABILITIES AND SHAREHOLDERS' EQUITY
Deposits:
Demand	$	6,604,154	$	6,788,742	$	5,399,297		(3)	%		22	%
Interest checking accounts	5,348,181		4,662,134		2,656,610		686,047	15	%	2,691,571	101	%
Savings accounts	2,015,865		2,089,427		1,403,472		(73,562)	(4)	%	612,393	44	%
Money market investment	4,787,603		5,406,198		3,544,897		(618,595)	(11)	%	1,242,706	35	%
Certificates of deposit	407,998		446,315		246,157		(38,317)	(9)	%	161,841	66	%
Total deposits	19,163,801		19,392,816		13,250,433		(229,015)	(1)	%	5,913,368	45	%
Borrowed funds:
Federal Home Loan Bank advances	13,560		13,689		14,323		(129)	(1)	%	(763)	(5)	%
Escrow deposits of borrowers	19,456		21,233		14,119		(1,777)	(8)	%	5,337	38	%
Interest rate swap collateral funds	10,100		—		—		10,100	—	%	10,100	—	%
Total borrowed funds	43,116		34,922		28,442		8,194	23	%	14,674	52	%
Other liabilities	425,535		399,942		337,956		25,593	6	%	87,579	26	%
Total liabilities	19,632,452		19,827,680		13,616,831		(195,228)	(1)	%	6,015,621	44	%
Shareholders' equity:
Common shares	1,793		1,834		1,868		(41)	(2)	%	(75)	(4)	%
Additional paid-in capital	1,700,495		1,777,670		1,856,241		(77,175)	(4)	%	(155,746)	(8)	%
Unallocated common shares held by the employee stock ownership plan ("ESOP")	(140,203)		(141,455)		(145,219)		1,252	(1)	%	5,016	(3)	%
Retained earnings	1,817,474		1,782,997		1,723,979		34,477	2	%	93,495	5	%
Accumulated other comprehensive income ("AOCI"), net of tax	(661,163)		(412,654)		(6,247)		(248,509)	60	%	(654,916)	10484	%
Total shareholders' equity	2,718,396		3,008,392		3,430,622		(289,996)	(10)	%	(712,226)	(21)	%
Total liabilities and shareholders' equity	$	22,350,848	$	22,836,072	$	17,047,453		(2)	%		31	%

All values are in US Dollars.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	Three months ended						Three months ended Jun 30, 2022 change from three months ended
(Unaudited, dollars in thousands, except per share data)	Jun 30, 2022		Mar 31, 2022		Jun 30, 2021		Mar 31, 2022			Jun 30, 2021
Interest and dividend income:							△	△ %		△	△ %
Interest and fees on loans	$	107,236	$	101,367	$	90,936		6	%		18	%
Taxable interest and dividends on securities	31,121		27,876		12,457		3,245	12	%	18,664	150	%
Non-taxable interest and dividends on securities	1,862		1,806		1,857		56	3	%	5	—	%
Interest on federal funds sold and other short-term investments	652		436		431		216	50	%	221	51	%
Total interest and dividend income	140,871		131,485		105,681		9,386	7	%	35,190	33	%
Interest expense:
Interest on deposits	3,061		3,322		1,031		(261)	(8)	%	2,030	197	%
Interest on borrowings	53		39		42		14	36	%	11	26	%
Total interest expense	3,114		3,361		1,073		(247)	(7)	%	2,041	190	%
Net interest income	137,757		128,124		104,608		9,633	8	%	33,149	32	%
Provision for (release of) allowance for loan losses	1,050		(485)		(3,300)		1,535	(316)	%	4,350	(132)	%
Net interest income after provision for (release of) allowance for loan losses	136,707		128,609		107,908		8,098	6	%	28,799	27	%
Noninterest income:
Insurance commissions	24,682		28,713		23,664		(4,031)	(14)	%	1,018	4	%
Service charges on deposit accounts	8,313		8,537		5,708		(224)	(3)	%	2,605	46	%
Trust and investment advisory fees	5,994		6,141		6,074		(147)	(2)	%	(80)	(1)	%
Debit card processing fees	3,223		2,945		3,170		278	9	%	53	2	%
Interest rate swap income (losses)	1,593		2,932		(1,164)		(1,339)	(46)	%	2,757	(237)	%
(Losses) income from investments held in rabbi trusts	(7,316)		(4,433)		4,216		(2,883)	65	%	(11,532)	(274)	%
Gains on sales of mortgage loans held for sale, net	49		169		848		(120)	(71)	%	(799)	(94)	%
(Losses) gains on sales of securities available for sale, net	(104)		(2,172)		1		2,068	(95)	%	(105)	(10500)	%
Other	5,443		3,583		3,216		1,860	52	%	2,227	69	%
Total noninterest income	41,877		46,415		45,733		(4,538)	(10)	%	(3,856)	(8)	%
Noninterest expense:
Salaries and employee benefits	72,996		69,526		69,276		3,470	5	%	3,720	5	%
Office occupancy and equipment	9,888		11,614		8,094		(1,726)	(15)	%	1,794	22	%
Data processing	14,345		15,320		13,572		(975)	(6)	%	773	6	%
Professional services	4,034		4,701		6,439		(667)	(14)	%	(2,405)	(37)	%
Marketing	2,651		1,574		3,497		1,077	68	%	(846)	(24)	%
Loan expenses	1,124		1,168		1,854		(44)	(4)	%	(730)	(39)	%
Federal Deposit Insurance Corporation ("FDIC") insurance	1,720		1,412		985		308	22	%	735	75	%
Amortization of intangible assets	907		827		625		80	10	%	282	45	%
Other	3,474		2,724		2,993		750	28	%	481	16	%
Total noninterest expense	111,139		108,866		107,335		2,273	2	%	3,804	4	%
Income before income tax expense	67,445		66,158		46,306		1,287	2	%	21,139	46	%
Income tax expense	16,273		14,642		11,497		1,631	11	%	4,776	42	%
Net income	$	51,172	$	51,516	$	34,809		(1)	%		47	%
Share data:
Earnings per share, basic	$	0.31	$	0.30	$	0.20
Earnings per share, diluted	$	0.31	$	0.30	$	0.20

All values are in US Dollars.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

	Six months ended
(Unaudited, dollars in thousands, except per share data)	Jun 30, 2022		Jun 30, 2021		Change
Interest and dividend income:					△	△ %
Interest and fees on loans	$	208,603	$	179,575		16	%
Taxable interest and dividends on securities	58,997		22,663		36,334	160	%
Non-taxable interest and dividends on securities	3,668		3,713		(45)	(1)	%
Interest on federal funds sold and other short-term investments	1,088		863		225	26	%
Total interest and dividend income	272,356		206,814		65,542	32	%
Interest expense:
Interest on deposits	6,383		2,033		4,350	214	%
Interest on borrowings	92		82		10	12	%
Total interest expense	6,475		2,115		4,360	206	%
Net interest income	265,881		204,699		61,182	30	%
Provision for (release of) allowance for loan losses	565		(3,880)		4,445	(115)	%
Net interest income after release of allowance for loan losses	265,316		208,579		56,737	27	%
Noninterest income:
Insurance commissions	53,395		51,811		1,584	3	%
Service charges on deposit accounts	16,850		11,075		5,775	52	%
Trust and investment advisory fees	12,135		11,737		398	3	%
Debit card processing fees	6,168		5,919		249	4	%
Interest rate swap income	4,525		4,241		284	7	%
(Losses) income from investments held in rabbi trusts	(11,749)		6,062		(17,811)	(294)	%
Gains on sales of mortgage loans held for sale, net	218		2,327		(2,109)	(91)	%
(Losses) gains on sales of securities available for sale, net	(2,276)		1,165		(3,441)	(295)	%
Other	9,026		6,608		2,418	37	%
Total noninterest income	88,292		100,945		(12,653)	(13)	%
Noninterest expense:
Salaries and employee benefits	142,522		133,316		9,206	7	%
Office occupancy and equipment	21,502		16,311		5,191	32	%
Data processing	29,665		25,701		3,964	15	%
Professional services	8,735		10,587		(1,852)	(17)	%
Marketing	4,225		5,188		(963)	(19)	%
Loan expenses	2,292		3,701		(1,409)	(38)	%
Federal Deposit Insurance Corporation ("FDIC") insurance	3,132		1,933		1,199	62	%
Amortization of intangible assets	1,734		1,157		577	50	%
Other	6,198		3,490		2,708	78	%
Total noninterest expense	220,005		201,384		18,621	9	%
Income before income tax expense	133,603		108,140		25,463	24	%
Income tax expense	30,915		25,668		5,247	20	%
Net income	$	102,688	$	82,472		25	%
Share data:
Weighted average common shares outstanding, basic (1)	168,184,528		172,111,372		(3,926,844)	(2)	%
Weighted average common shares outstanding, diluted (1)	168,248,246		172,111,372		(3,863,126)	(2)	%
Earnings per share, basic	$	0.61	$	0.48		27	%
Earnings per share, diluted	$	0.61	$	0.48		27	%
(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
	Jun 30, 2022						Mar 31, 2022						Jun 30, 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	$	8,944,652	$	83,586	3.75	%	$	8,973,094	$	78,226	3.54	%	$	7,301,745	$	71,747	3.94	%
Residential	1,960,014		14,683		3.00	%	1,937,494		14,471		3.03	%	1,433,056		11,397		3.19	%
Consumer	1,309,864		11,494		3.52	%	1,293,489		10,450		3.28	%	1,061,900		8,597		3.25	%
Total loans	12,214,530		109,763		3.60	%	12,204,077		103,147		3.43	%	9,796,701		91,741		3.76	%
Investment securities	8,883,710		33,479		1.51	%	8,647,200		30,163		1.41	%	4,344,690		14,778		1.36	%
Federal funds sold and other short-term investments	345,731		652		0.76	%	1,003,416		436		0.18	%	1,617,741		431		0.11	%
Total interest-earning assets	21,443,971		143,894		2.69	%	21,854,693		133,746		2.48	%	15,759,132		106,950		2.72	%
Non-interest-earning assets	962,734						1,436,702						1,061,121
Total assets	$	22,406,705					$	23,291,395					$	16,820,253
Interest-bearing liabilities:
Deposits:
Savings	$	2,041,495	$	51	0.01	%	$	2,076,754	$	51	0.01	%	$	1,385,735	$	69	0.02	%
Interest checking	4,877,256		2,061		0.17	%	4,596,026		2,032		0.18	%	2,541,862		253		0.04	%
Money market	5,069,609		745		0.06	%	5,568,264		920		0.07	%	3,523,330		605		0.07	%
Time deposits	426,923		204		0.19	%	481,833		319		0.27	%	246,801		104		0.17	%
Total interest-bearing deposits	12,415,283		3,061		0.10	%	12,722,877		3,322		0.11	%	7,697,728		1,031		0.05	%
Borrowings	35,330		53		0.60	%	30,669		39		0.52	%	25,042		42		0.67	%
Total interest-bearing liabilities	12,450,613		3,114		0.10	%	12,753,546		3,361		0.11	%	7,722,770		1,073		0.06	%
Demand deposit accounts	6,661,920						6,821,811						5,355,170
Other noninterest-bearing liabilities	428,373						442,591						335,816
Total liabilities	19,540,906						20,017,948						13,413,756
Shareholders' equity	2,865,799						3,273,447						3,406,497
Total liabilities and shareholders' equity	$	22,406,705					$	23,291,395					$	16,820,253
Net interest income - FTE			$	140,780					$	130,385					$	105,877
Net interest rate spread (2)					2.59	%					2.37	%					2.66	%
Net interest-earning assets (3)	$	8,993,358					$	9,101,147					$	8,036,362
Net interest margin - FTE (4)					2.63	%					2.42	%					2.69	%
(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 EARNED/PAID, & AVERAGE YIELDS

	As of and for the six months ended
	Jun 30, 2022						Jun 30, 2021
(Unaudited, dollars in thousands)	Avg. Balance		Interest		Yield / Cost (5)		Avg. Balance		Interest		Yield / Cost (5)
Interest-earning assets:
Loans (1):
Commercial	$	8,958,795	$	161,811	3.64	%	$	7,309,803	$	140,952	3.89	%
Residential	1,948,816		29,155		3.02	%	1,413,208		22,671		3.24	%
Consumer	1,301,721		21,944		3.40	%	1,083,677		17,534		3.26	%
Total loans	12,209,332		212,910		3.52	%	9,806,688		181,157		3.73	%
Total investment securities	8,766,108		63,642		1.46	%	3,990,080		27,360		1.38	%
Federal funds sold and other short-term investments	672,757		1,088		0.33	%	1,678,812		863		0.10	%
Total interest-earning assets	21,648,197		277,640		2.59	%	15,475,580		209,380		2.73	%
Non-interest-earning assets	1,198,409						1,089,585
Total assets	$	22,846,606					$	16,565,165
Interest-bearing liabilities:
Deposits:
Savings	$	2,059,027	$	102	0.01	%	$	1,343,133	$	133	0.02	%
Interest checking	4,737,418		4,093		0.17	%	2,466,860		487		0.04	%
Money market	5,317,559		1,665		0.06	%	3,482,002		1,193		0.07	%
Time deposits	454,226		523		0.23	%	248,946		220		0.18	%
Total interest-bearing deposits	12,568,230		6,383		0.10	%	7,540,941		2,033		0.05	%
Borrowings	33,012		92		0.56	%	25,332		82		0.65	%
Total interest-bearing liabilities	12,601,242		6,475		0.10	%	7,566,273		2,115		0.06	%
Demand deposit accounts	6,741,424						5,241,134
Other noninterest-bearing liabilities	435,443						345,776
Total liabilities	19,778,109						13,153,183
Shareholders' equity	3,068,497						3,411,982
Total liabilities and shareholders' equity	$	22,846,606					$	16,565,165
Net interest income - FTE			$	271,165					$	207,265
Net interest rate spread (2)					2.49	%					2.67	%
Net interest-earning assets (3)	$	9,046,955					$	7,909,307
Net interest margin - FTE (4)					2.53	%					2.70	%
(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, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
(Unaudited, dollars in thousands)
Non-accrual loans:
Commercial	$	43,628		$	17,919		$	20,630		$	29,166		$	29,356
Residential	9,486			8,256			6,681			7,185			6,445
Consumer	6,766			7,646			5,682			4,262			4,106
Total non-accrual loans	59,880			33,821			32,993			40,613			39,907
Total accruing loans past due 90 days or more (2):	—			—			1,990			1,458			1,725
Total non-performing loans	59,880			33,821			34,983			42,071			41,632
Other real estate owned	—			—			—			—			38
Other non-performing assets:	—			—			—			—			—
Total non-performing assets	$	59,880		$	33,821		$	34,983		$	42,071		$	41,670
Total accruing troubled debt restructured loans	$	33,518		$	32,016		$	33,336		$	34,723		$	38,316
Total non-performing loans to total loans	0.48		%	0.28		%	0.29		%	0.44		%	0.43		%
Total non-performing assets to total assets	0.27		%	0.15		%	0.15		%	0.24		%	0.24		%
(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 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 (RECOVERIES) CHARGE-OFFS


			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
(Unaudited, dollars in thousands)
Average total loans (1)	12,213,706		$	12,203,212		$	10,944,091		$	9,526,766		$	9,794,045
Allowance for loan losses, beginning of the period			97,787			103,398			105,637			111,080
Total cumulative effect of change in accounting principle (2):			27,086			—			—			—
Charged-off loans:
Commercial and industrial			1			1,008			—			550
Commercial real estate			—			5			8			—
Commercial construction			—			—			—			—
Business banking			945			1,002			867			1,838
Residential real estate			—			35			—			—
Consumer home equity			—			24			—			—
Other consumer			661			666			742			275
Total charged-off loans			1,607			2,740			1,617			2,663
Recoveries on loans previously charged-off:
Commercial and industrial			250			873			40			13
Commercial real estate			14			—			—			4
Commercial construction			—			—			—			—
Business banking			928			399			469			291
Residential real estate			10			7			88			17
Consumer home equity			4			48			63			3
Other consumer			179			120			206			192
Total recoveries			1,385			1,447			866			520
Net loans charged-off (recoveries):
Commercial and industrial			(249)			135			(40)			537
Commercial real estate			(14)			5			8			(4)
Commercial construction			—			—			—			—
Business banking			17			603			398			1,547
Residential real estate			(10)			28			(88)			(17)
Consumer home equity			(4)			(24)			(63)			(3)
Other consumer			482			546			536			83
Total net loans charged-off			222			1,293			751			2,143
Provision for (release of) allowance for loan losses			(485)			(4,318)			(1,488)			(3,300)
Total allowance for loan losses, end of period	125,531		$	124,166		$	97,787		$	103,398		$	105,637
Net (recoveries) charge-offs to average total loans outstanding during this period (3)		%	0.01		%	0.05		%	0.03		%	0.09		%
Allowance for loan losses as a percent of total loans		%	1.02		%	0.80		%	1.09		%	1.10		%
Allowance for loan losses as a percent of nonperforming loans		%	367.13		%	279.53		%	245.77		%	253.74		%
(1) Average total loans at June 30, 2022 excludes the average balance of loans held for sale. Prior period amounts were adjusted to reflect this revision and accommodate comparability.
(2) 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.
(3) 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)			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
Net income (GAAP)	51,172		$	51,516		$	35,087		$	37,106		$	34,809
Add:
Noninterest income components:
Losses (income) from investments held in rabbi trusts			4,433			(4,444)			289			(4,216)
Losses (gains) on sales of securities available for sale, net			2,172			—			(1)			(1)
(Gains) losses on sales of other assets			274			(34)			(490)			(29)
Noninterest expense components:
Rabbi trust employee benefit (income) expense			(2,087)			2,519			(53)			2,063
Impairment charge (reversal) on tax credit investments			—			116			1,133			(1,419)
Gain on sale of OREO			—			—			(87)			—
Merger and acquisition expenses			34			30,652			740			3,479
Settlement and expenses for putative consumer class action matters			—			—			—			3,325
Total impact of non-GAAP adjustments			4,826			28,809			1,531			3,202
Less net tax benefit associated with non-GAAP adjustments (1)			1,235			19,036			1,246			914
Non-GAAP adjustments, net of tax	1,346		$	3,591		$	9,773		$	285		$	2,288
Operating net income (non-GAAP)	52,518		$	55,107		$	44,860		$	37,391		$	37,097
Weighted average common shares outstanding during the period (2):
Basic			169,857,950			172,246,799			172,298,615			172,173,707
Diluted			169,968,156			172,481,829			172,298,615			172,173,707
Earnings per share, basic	0.31		$	0.30		$	0.20		$	0.22		$	0.20
Earnings per share, diluted	0.31		$	0.30		$	0.20		$	0.22		$	0.20
Operating earnings per share, basic (non-GAAP)	0.32		$	0.32		$	0.26		$	0.22		$	0.22
Operating earnings per share, diluted (non-GAAP)	0.32		$	0.32		$	0.26		$	0.22		$	0.22
Return on average assets (3)		%	0.90		%	0.67		%	0.84		%	0.83		%
Add:
Losses (income) from investments held in rabbi trusts (3)			0.08%			(0.08)%			0.01%			(0.10)%
Losses (gains) on sales of securities available for sale, net (3)			0.04%			0.00%			0.00%			—%
(Gains) losses on sales of other assets (3)			0.00%			0.00%			(0.01)%			0.00%
Rabbi trust employee benefit (income) expense (3)			(0.04)%			0.05%			0.00%			0.05%
Impairment charge (reversal) on tax credit investments (3)			0.00%			0.00%			0.03%			(0.03)%
Gain on sale of OREO (3)			—%			0.00%			—%			—%
Merger and acquisition expenses (3)			—%			0.58%			0.02%			0.08%
Settlement and expenses for putative consumer class action matters (3)			—%			—%			—%			0.08%
Less net tax benefit associated with non-GAAP adjustments (1) (3)			0.02%			0.36%			0.03%			0.02%
Operating return on average assets (non-GAAP) (3)		%	0.96		%	0.86		%	0.86		%	0.89		%
Return on average shareholders' equity (3)		%	6.38		%	4.07		%	4.27		%	4.10		%
Add:
Losses (income) from investments held in rabbi trusts (3)			0.55%			(0.52)%			0.03%			(0.50)%
Losses (gains) on sales of securities available for sale, net (3)			0.27%			0.00%			0.00%			—%
(Gains) losses on sales of other assets (3)			0.03%			0.00%			(0.06)%			0.00%
Rabbi trust employee benefit (income) expense (3)			(0.26)%			0.29%			(0.01)%			0.24%
Impairment charge (reversal) on tax credit investments (3)			0.00%			0.01%			0.13%			(0.17)%
Gain on sale of OREO (3)			—%			—%			(0.01)%			—%
Merger and acquisition expenses (3)			0.00%			3.55%			0.09%			0.41%
Settlement and expenses for putative consumer class action matters (3)			—%			—%			—%			0.39%
Less net tax benefit associated with non-GAAP adjustments (1) (3)			0.15%			2.21%			0.14%			0.11%
Operating return on average shareholders' equity (non-GAAP) (3)		%	6.82		%	5.19		%	4.30		%	4.36		%
Average tangible shareholders' equity:
Average total shareholders' equity (GAAP)	2,865,799		$	3,273,447		$	3,423,231		$	3,450,679		$	3,406,497
Less: Average goodwill and other intangibles			649,497			520,988			380,185			379,044
Average tangible shareholders' equity (non-GAAP)	2,211,355		$	2,623,950		$	2,902,243		$	3,070,494		$	3,027,453
Return on average tangible shareholders' equity (non-GAAP) (3)		%	7.96		%	4.80		%	4.79		%	4.61		%
Add:
Losses (income) from investments held in rabbi trusts (3)			0.69%			(0.61)%			0.04%			(0.56)%
Losses (gains) on sales of securities available for sale, net (3)			0.34%			—%			—%			—%
(Gains) losses on sales of other assets (3)			0.04%			—%			(0.06)%			—%
Rabbi trust employee benefit (income) expense (3)			(0.32)%			0.34%			(0.01)%			0.27%
Impairment charge (reversal) on tax credit investments (3)			—%			0.02%			0.15%			(0.19)%
Gain on sale of OREO (3)			—%			—%			(0.01)%			—%
Merger and acquisition expenses (3)			0.01%			4.19%			0.10%			0.46%
Settlement and expenses for putative consumer class action matters (3)			—%			—%			—%			0.44%
Less net tax benefit associated with non-GAAP adjustments (1) (3)			0.19%			2.60%			0.16%			0.12%
Operating return on average tangible shareholders' equity (non-GAAP) (3)		%	8.53		%	6.14		%	4.84		%	4.91		%
(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
	Jun 30, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
(Unaudited, dollars in thousands)
Net interest income (GAAP)	$	137,757		$	128,124		$	122,437		$	102,691		$	104,608
Add:
Tax-equivalent adjustment (non-GAAP)	3,023			2,261			2,211			1,316			1,269
Fully-taxable equivalent net interest income (non-GAAP)	$	140,780		$	130,385		$	124,648		$	104,007		$	105,877
Noninterest income (GAAP)	$	41,877		$	46,415		$	49,001		$	43,209		$	45,733
Less:
(Losses) income from investments held in rabbi trusts	(7,316)			(4,433)			4,444			(289)			4,216
(Losses) gains on sales of securities available for sale, net	(104)			(2,172)			—			1			1
Gain (losses) on sales of other assets	1,251			(274)			34			490			29
Noninterest income on an operating basis (non-GAAP)	$	48,046		$	53,294		$	44,523		$	43,007		$	41,487
Noninterest expense (GAAP)	$	111,139		$	108,866		$	143,602		$	98,970		$	107,335
Less:
Rabbi trust employee benefit (income) expense	(3,310)			(2,087)			2,519			(53)			2,063
Impairment charge (reversal) on tax credit investments	—			—			116			1,133			(1,419)
Gain on sale of OREO	—			—			—			(87)			—
Merger and acquisition expenses	—			34			30,652			740			3,479
Settlement and expenses for putative consumer class action matters	—			—			—			—			3,325
Noninterest expense on an operating basis (non-GAAP)	$	114,449		$	110,919		$	110,315		$	97,237		$	99,887
Total revenue (GAAP)	$	179,634		$	174,539		$	171,438		$	145,900		$	150,341
Total operating revenue (non-GAAP)	$	188,826		$	183,679		$	169,171		$	147,014		$	147,364
Efficiency ratio (GAAP)	61.87		%	62.37		%	83.76		%	67.83		%	71.39		%
Operating efficiency ratio (non-GAAP)	60.61		%	60.39		%	65.21		%	66.14		%	67.78		%
Noninterest income / total revenue (GAAP)	23.31		%	26.59		%	28.58		%	29.62		%	30.42		%
Noninterest income / total revenue on an operating basis (non-GAAP)	25.44		%	29.01		%	26.32		%	29.25		%	28.15		%

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, 2022			Mar 31, 2022			Dec 31, 2021			Sep 30, 2021			Jun 30, 2021
(Unaudited, dollars in thousands, except per share data)
Tangible shareholders' equity:
Total shareholders' equity (GAAP)	$	2,718,396		$	3,008,392		$	3,406,352		$	3,429,292		$	3,430,622
Less: Goodwill and other intangibles	653,853			654,759			649,703			379,772			380,402
Tangible shareholders' equity (non-GAAP)	2,064,543			2,353,633			2,756,649			3,049,520			3,050,220
Tangible assets:
Total assets (GAAP)	22,350,848			22,836,072			23,512,128			17,461,223			17,047,453
Less: Goodwill and other intangibles	653,853			654,759			649,703			379,772			380,402
Tangible assets (non-GAAP)	$	21,696,995		$	22,181,313		$	22,862,425		$	17,081,451		$	16,667,051
Shareholders' equity to assets ratio (GAAP)	12.16		%	13.17		%	14.49		%	19.64		%	20.12		%
Tangible shareholders' equity to tangible assets ratio (non-GAAP)	9.52		%	10.61		%	12.06		%	17.85		%	18.30		%
Common shares outstanding	179,253,801			183,438,711			186,305,332			186,758,154			186,758,154
Book value per share (GAAP)	$	15.17		$	16.40		$	18.28		$	18.36		$	18.37
Tangible book value per share (non-GAAP)	$	11.52		$	12.83		$	14.80		$	16.33		$	16.33

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				Jun 30, 2022 change from
	Jun 30, 2022		Mar 31, 2022		Mar 31, 2022
(Unaudited, dollars in thousands, except per share amounts)
Common stock	$	1,793	$	1,834	$	(41)
Additional paid in capital	1,700,495		1,777,670		(77,175)
Unallocated ESOP common stock	(140,203)		(141,455)		1,252
Retained earnings	1,817,474		1,782,997		34,477
AOCI, net of tax - available for sale securities	(657,386)		(410,611)		(246,775)
AOCI, net of tax - pension	(5,718)		(5,595)		(123)
AOCI, net of tax - cash flow hedge	1,941		3,552		(1,611)
Total shareholders' equity:	$	2,718,396	$	3,008,392	$	(289,996)
Less: Goodwill and other intangibles	653,853		654,759		(906)
Tangible shareholders' equity (non-GAAP)	$	2,064,543	$	2,353,633	$	(289,090)
Common shares outstanding	179,253,801		183,438,711		(4,184,910)
Per share:
Common stock	$	0.01	$	0.01	$	—
Additional paid in capital	9.49		9.69		(0.20)
Unallocated ESOP common stock	(0.78)		(0.77)		(0.01)
Retained earnings	10.14		9.72		0.42
AOCI, net of tax - available for sale securities	(3.67)		(2.24)		(1.43)
AOCI, net of tax - pension	(0.03)		(0.03)		—
AOCI, net of tax - cash flow hedge	0.01		0.02		(0.01)
Total shareholders' equity:	$	15.17	$	16.40	$	(1.23)
Less: Goodwill and other intangibles	3.65		3.57		0.08
Tangible shareholders' equity (non-GAAP)	$	11.52	$	12.83	$	(1.31)

ebc-2022

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 3 Forward-looking statements This presentation contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding anticipated 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 that revenue or expense synergies or the other expected benefits of the Company’s merger with Century (“Transaction”) may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; risks that the Company is unable to successfully implement integration strategies for the Transaction; reputational risks and the reaction of customers to the Transaction; and diversion of management time on Transaction-related issues; as well as general economic conditions or conditions within the securities markets; and 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 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; credit quality, 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. 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; reduced demand for office space in the Company's markets due to remote and/or hybrid work arrangements; 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 presentation. The Company does not undertake any obligation to update forward-looking statements.

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, 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) 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 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 tangible 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 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-D for a reconciliations of the Company's GAAP financial measures to the non-GAAP financial measures in this presentation. Non-GAAP financial measures