Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell even higher, with the expectation that established trends will continue [1] Company Overview: Eastern Bankshares, Inc. (EBC) - EBC currently holds a Momentum Style Score of B, indicating a favorable position in momentum investing [2] - The company has a Zacks Rank of 1 (Strong Buy), suggesting strong potential for outperformance in the market [3] Price Performance - EBC shares have increased by 2.86% over the past week, outperforming the Zacks Banks - Northeast industry, which rose by 0.51% [5] - Over the past month, EBC's price change is 11.66%, compared to the industry's 6.45% [5] - In the last three months, EBC shares rose by 3.18%, and over the past year, they increased by 40.29%, while the S&P 500 saw gains of 2.97% and 24.31%, respectively [6] Trading Volume - EBC's average 20-day trading volume is 999,276 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - In the past two months, four earnings estimates for EBC have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $1.31 to $1.49 [9] - For the next fiscal year, three estimates have also moved upwards without any downward revisions [9] Conclusion - Given the positive momentum indicators and earnings outlook, EBC is positioned as a strong buy candidate for investors seeking short-term opportunities [11]

Core Viewpoint - Eastern Bankshares, Inc. (EBC) is experiencing solid improvement in earnings estimates, which is likely to positively impact its stock price momentum [1][2]. Estimate Revisions - The upward trend in earnings estimate revisions indicates growing analyst optimism regarding Eastern Bankshares' earnings prospects, which correlates with stock price movements [2]. - The current-quarter earnings estimate is $0.33 per share, reflecting a +43.48% change from the previous year, with a 9.17% increase in the Zacks Consensus Estimate over the last 30 days due to four upward revisions [4]. - For the full year, the expected earnings are $1.49 per share, representing a +40.57% change from the prior year, with a 13.98% increase in the consensus estimate driven by four upward revisions [5]. Zacks Rank - Eastern Bankshares has achieved a Zacks Rank 1 (Strong Buy), indicating strong agreement among analysts in raising earnings estimates, which is expected to lead to significant stock outperformance [3][6]. - Stocks with Zacks Rank 1 and 2 are shown to significantly outperform the S&P 500 [6]. Stock Performance - The stock has gained 5.2% over the past four weeks, reflecting investor confidence in the company's earnings growth prospects [7].

Financial Data and Key Metrics Changes - The company reported its Q4 2024 earnings, with a focus on both GAAP and non-GAAP financial measures, indicating a comprehensive financial performance review [2][3] Business Line Data and Key Metrics Changes - Specific details regarding the performance of various business lines were not provided in the available content Market Data and Key Metrics Changes - Information on market performance and key metrics was not included in the provided content Company Strategy and Development Direction and Industry Competition - The management discussed future financial and operating results, business strategies, and potential risks, reflecting a proactive approach to navigating the competitive landscape [1] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of forward-looking statements, highlighting the uncertainties that may affect actual results compared to current estimates [1] Other Important Information - The call included a reminder about the recording of the event and the mute status of participants to ensure clarity during the discussion [2] Q&A Session Summary Question: What are the expectations for future financial performance? - Management provided insights into their outlook, but specific details were not disclosed in the available content [1]

Financial Performance - The company's net income for Q4 2024 was $60.8 million, or $0.30 per diluted share[2, 4, 5] - Operating net income for Q4 2024 reached $68.3 million, translating to $0.34 per diluted share[2, 4, 5] - Net interest income increased to $179.2 million in Q4 2024, a $9.3 million increase compared to the previous quarter[5, 7] - Noninterest income totaled $37.3 million for the quarter[5, 7] - Noninterest expense amounted to $137.5 million[5, 6] Strategic Initiatives and Capital Management - The company announced a $1.2 billion investment portfolio repositioning planned for Q1 2025, expected to increase 2025 operating EPS by approximately $0.13[4] - The company repurchased $15.8 million worth of shares at an average price of $17.41 during the quarter[44] Asset Quality and Loan Portfolio - Non-performing loans (NPLs) increased to $136 million, representing 0.76% of total loans[47] - Net charge-offs (NCOs) were 0.71% of average total loans, primarily due to purchased credit deteriorated loans acquired from Cambridge Trust[2, 4] - Commercial real estate (CRE) portfolio totaled $7.1 billion, accounting for 39% of total loans[53, 57] - CRE investor office loans amounted to $914 million, or 5% of total loans[61, 63] Deposits and Funding - Total deposit cost decreased by 13 basis points to 1.69%[2, 29] - Checking accounts represented 50% of the company's deposit base, an increase from 49% in the previous quarter[25, 29]

Group 1 - Eastern Bankshares, Inc. reported quarterly earnings of $0.34 per share, exceeding the Zacks Consensus Estimate of $0.30 per share, and showing a significant increase from $0.10 per share a year ago, representing an earnings surprise of 13.33% [1] - The company posted revenues of $225.78 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 7.39%, compared to revenues of $160.05 million in the same quarter last year [2] - Eastern Bankshares has surpassed consensus EPS estimates two times over the last four quarters and has also topped consensus revenue estimates two times during the same period [2] Group 2 - The stock has gained approximately 1.7% since the beginning of the year, while the S&P 500 has increased by 3.5% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the upcoming quarter is $0.30 on revenues of $215.5 million, and for the current fiscal year, it is $1.31 on revenues of $888.06 million [7] Group 3 - The Zacks Industry Rank indicates that the Banks - Northeast industry is currently in the top 20% of over 250 Zacks industries, suggesting a favorable outlook for stocks within this sector [8] - The estimate revisions trend for Eastern Bankshares is mixed, resulting in a Zacks Rank 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6]

Financial Performance - Fourth quarter 2024 net income was $60.8 million, or $0.30 per diluted share, a significant increase from a net loss of $6.2 million in the previous quarter[2]. - Operating net income for the fourth quarter was $68.3 million, or $0.34 per diluted share, representing a 37% increase from the prior quarter[2]. - Total revenue for Q4 2024 reached $216,542,000, up 6.4% from $203,383,000 in Q3 2024[34]. - Net income from continuing operations for Q4 2024 was $60,771,000, compared to a loss of $6,188,000 in Q3 2024[34]. - The company reported a net income of $119,561,000 for the twelve months ended December 31, 2024, down 49% from $232,177,000 in the previous year[44]. - Earnings per share for continuing operations was $0.66, compared to a loss of $0.39 in the previous year, indicating a strong turnaround[44]. Income and Expenses - Net interest income increased to $179.2 million, up $9.3 million or 5% from the previous quarter, driven by an expanded net interest margin of 3.05%[2][7]. - Noninterest income rose to $37.3 million, an increase of $3.8 million or 11% from the prior quarter[2][10]. - Noninterest expense decreased by $22.2 million to $137.5 million, primarily due to a reduction in merger-related expenses[2][11]. - Total noninterest expense decreased to $137,544,000, down 14% from the previous quarter and up 14% year-over-year[42]. - Noninterest income totaled $37,349,000, reflecting an 11% increase from the previous quarter and a 40% increase year-over-year[42]. Loans and Assets - Total loans were $18.1 billion, reflecting a slight increase of $15 million from the previous quarter[2][8]. - Total loans increased to $18,079,084,000 in Q4 2024, compared to $18,064,126,000 in Q3 2024[34]. - Total assets as of December 31, 2024, were $25,557,880,000, slightly up from $25,507,187,000 at the end of Q3 2024[34]. - Total assets increased to $25,738,494 thousand as of December 31, 2024, up from $25,038,905 thousand in the previous quarter[46]. - Total loans reached $17,805,289 thousand with a net interest income of $239,115 thousand, yielding a margin of 5.34% for the three months ended December 31, 2024[46]. Capital and Ratios - The CET1 capital ratio was 15.73% at year-end, an increase of 0.23% from the previous quarter[2]. - The efficiency ratio improved to 63.5% in Q4 2024, down from 78.5% in Q3 2024[34]. - Return on average assets for Q4 2024 was 0.94%, a recovery from a negative 0.10% in Q3 2024[34]. - The allowance for loan losses (ALLL) was $228,952,000, down from $253,821,000 in Q3 2024[34]. - The shareholders' equity to assets ratio (GAAP) is 14.13% as of December 31, 2024, down from 14.39% as of September 30, 2024[63]. Dividends and Shareholder Returns - The company declared a quarterly cash dividend of $0.12 per common share, payable on March 14, 2025[2][17]. - Common shares outstanding decreased to 213,909,472 as of December 31, 2024, from 214,802,602 as of September 30, 2024[64]. - Book value per share (GAAP) is $16.89 as of December 31, 2024, a decrease from $17.09 as of September 30, 2024[64]. Non-GAAP Measures and Adjustments - The Company presents non-GAAP financial measures to provide greater visibility into its core business performance, excluding certain non-core items[24]. - Management emphasizes that non-GAAP measures should not be considered substitutes for GAAP financial results, as they may differ from methodologies used by other banking companies[28]. - The Company adjusted its calculations for return on average tangible shareholders' equity and operating efficiency ratio to exclude amortization of intangible assets[26][27]. - The operating efficiency ratio (non-GAAP) was 60.3% for the twelve months ended December 31, 2024, compared to 62.3% in the previous year[62]. Risks and Forward-Looking Statements - The Company anticipates potential risks including loan delinquencies, competitive pressures, and challenges in achieving merger synergies[30]. - Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from expectations[29]. - The Company does not undertake any obligation to update forward-looking statements after the date of the press release[31].

Group 1: Earnings and Revenue Estimates - Eastern Bankshares, Inc. (EBC) is expected to report quarterly earnings of $0.30 per share, reflecting a 200% increase year over year [1] - Analysts forecast revenues of $210.25 million, indicating a 31.4% year-over-year growth [1] - The consensus EPS estimate has remained unchanged over the past 30 days, suggesting analysts' reassessment of projections [1][2] Group 2: Key Financial Metrics - Analysts predict an 'Efficiency ratio (Gaap)' of 62.0%, down from 75.6% in the same quarter last year [4] - 'Total interest-earning assets-Average' is expected to reach $23.58 billion, compared to $20.35 billion in the same quarter last year [4] - Estimated 'Net Interest Income' is projected at $177.24 million, up from $133.31 million in the same quarter last year [5] - 'Total Noninterest Income' is forecasted at $33.71 million, compared to $26.74 million a year ago [5] - 'Trust and investment advisory fees' are expected to be $12.88 million, up from $6.13 million in the same quarter last year [6] - 'Service charges on deposit accounts' are projected at $10.47 million, compared to $7.51 million a year ago [6] - 'Net Interest Income (FTE)' is estimated to reach $180.92 million, compared to $137.79 million in the same quarter last year [7] Group 3: Stock Performance - Shares of Eastern Bankshares have returned +4.2% over the past month, while the Zacks S&P 500 composite has decreased by -2.1% [8] - EBC holds a Zacks Rank 3 (Hold), indicating expected performance in line with the overall market [8]

Financial Performance - Net loss from continuing operations for Q3 2024 was $6.2 million, compared to net income of $63.5 million in Q3 2023, a decrease of 109.8%[229] - Operating net income for Q3 2024 was $49.7 million, down 4.6% from $52.1 million in Q3 2023[229] - Net income from continuing operations for the three months ended September 30, 2024, was $(6,188) thousand, compared to $63,464 thousand for the same period in 2023[245] - Non-GAAP operating net income for the three months ended September 30, 2024, was $49,665 thousand, down from $52,085 thousand in 2023[245] - Total revenue from continuing operations (GAAP) for the three months ended September 30, 2024, was $203,383 thousand, up from $156,362 thousand in 2023, reflecting a 30.1% increase[247] - Net interest income (GAAP) for the three months ended September 30, 2024, increased to $169,855 thousand from $137,205 thousand in 2023, representing a 23.8% increase[247] - Noninterest income (GAAP) for the three months ended September 30, 2024, was $33,528 thousand, compared to $19,157 thousand in 2023, marking a significant increase[247] - The company reported a net loss of $6.2 million for the three months ended September 30, 2024, compared to a net income of $63.5 million for the same period in 2023[288] Assets and Liabilities - Total assets increased to $25.5 billion as of September 30, 2024, up from $21.1 billion at December 31, 2023, representing a growth of 20.8%[228] - Total loans, net of allowance for loan losses, increased by $3,702,695 thousand, or 26.8%, to $17,502,062 thousand as of September 30, 2024, compared to $13,799,367 thousand at December 31, 2023[251] - Total deposits grew by $3,620,637 thousand, or 20.6%, to $21,216,854 thousand as of September 30, 2024, from $17,596,217 thousand at December 31, 2023[251] - Cash and cash equivalents rose by $196.4 million, or 28.3%, to $889.5 million at September 30, 2024, from $693.1 million at December 31, 2023[252] - Total interest-bearing liabilities increased to $15,281,179 thousand, compared to $12,937,529 thousand, reflecting a growth of 18.0%[299] Loan Portfolio - Total gross loans increased by $4.1 billion, or 29.3%, to $18.1 billion as of September 30, 2024, compared to $14.0 billion at December 31, 2023[261] - The delinquency rate of the total loan portfolio rose to 0.54% at September 30, 2024, up from 0.41% at December 31, 2023[263] - Non-performing loans (NPLs) increased by $71.9 million, or 136.9%, to $124.5 million at September 30, 2024, from $52.6 million at December 31, 2023[264] - The percentage of NPLs relative to total loans increased to 0.70% at September 30, 2024, compared to 0.38% at December 31, 2023[264] - The allowance for loan losses increased by $104.8 million, or 70.4%, to $253.8 million, representing 1.43% of total loans as of September 30, 2024, up from 1.07% at December 31, 2023[272] Merger and Acquisition - The merger with Cambridge Bancorp was completed on July 12, 2024, with a transaction value of approximately $580.6 million based on the exchange of 38.9 million shares[228] - The wealth management divisions now operate under the "Cambridge Trust Wealth Management" brand following the merger[228] - The company recorded a "day-2" provision of $40.9 million related to non-PCD loans from the merger with Cambridge, which closed on July 12, 2024[305] - The company recorded an allowance for acquired PCD loans of $55.8 million in connection with the merger with Cambridge[272] Noninterest Expenses - The company experienced higher noninterest expenses for both Q3 and the nine months ended September 30, 2024, compared to the same periods in 2023[229] - Noninterest expense rose by $58.0 million, or 57.0%, to $159.8 million for the three months ended September 30, 2024, compared to $101.7 million for the same period in 2023[288] - Salaries and employee benefits increased by $32.9 million, or 54.0%, primarily due to an increase in the number of employees from the merger with Cambridge[313] - Data processing expenses rose by $6.1 million, or 45.1%, primarily due to increased cybersecurity software expenses[313] Interest Rates and Economic Outlook - The Federal Open Market Committee lowered the federal funds rate target range to 4.50% to 4.75% as of November 7, 2024, down from 5.25% to 5.50% in July 2023[240] - The company anticipates a slight decline in U.S. GDP growth in 2025, with a forecasted unemployment rate increase impacting the allowance for loan losses[306] - The company expects to adjust the allowance for loan losses based on economic conditions, with potential increases or decreases depending on GDP growth scenarios[306] Regulatory Capital and Liquidity - The company maintained a total regulatory capital ratio of 16.58% as of September 30, 2024, down from 19.55% as of December 31, 2023[333] - The common equity Tier 1 capital ratio was 15.52% as of September 30, 2024, compared to 18.55% as of December 31, 2023[333] - As of September 30, 2024, the company had total liquidity sources of $6.2 billion, providing 92% coverage of all customer uninsured and uncollateralized deposits totaling $6.7 billion[329]

Financial Data and Key Metrics Changes - The company reported a GAAP net loss of $6 million in Q3 2024 due to non-recurring merger items, while operating net income was $49.7 million or $0.25 per share, a 36% increase from the prior quarter [15][16] - The net interest margin increased by 33 basis points to 2.97% during the quarter [15] - Tangible book value per share ended the quarter at $12.17 [15] Business Line Data and Key Metrics Changes - Wealth revenues more than doubled to $14.9 million in Q3 2024, driven by an increase in assets under management from the merger [15][18] - The company added approximately $3.9 billion in loans and $3.7 billion in deposits from the Cambridge merger [19] - Non-interest income totaled $33.5 million in Q3 2024, with a notable increase in wealth management fees [18] Market Data and Key Metrics Changes - The company is positioned as the largest community bank in the Greater Boston area, with the fourth largest deposit market share [7] - The combined wealth management business has over $8 billion in assets under management, making it the largest bank-owned investment adviser in Massachusetts [7] Company Strategy and Development Direction - The merger with Cambridge Trust is seen as a transformational moment, enhancing the company's competitive position in the local market [3][4] - The company aims to focus on organic growth while capitalizing on the integration of the Cambridge merger [53] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the local economy and the potential for growth moving into 2025, despite expecting flat loan balances in Q4 2024 [19][24] - The company anticipates net interest income of $175 million to $180 million for Q4, with a net interest margin between 3% and 3.05% [24] Other Important Information - The company was named the number one SBA lender in Massachusetts for the 16th consecutive year and recognized for its charitable contributions [5] - A 9% dividend increase to $0.12 per share was approved by the Board [10] Q&A Session Summary Question: Can you share the size and composition of the loan pipeline? - The commercial loan pipeline is at $438 million, up from $228 million at the end of June, indicating a positive trend [27] Question: What is the breakdown of non-performing loans? - The increase in non-performing loans was primarily due to office loans from the Cambridge portfolio, with a thorough review conducted on these loans [32] Question: Are there additional opportunities for cost savings? - There may be opportunities for further savings, but clarity will come after the budget cycle is completed [35] Question: What are the thoughts on capital and buybacks? - The company remains active in buybacks and is considering securities restructuring, with discussions ongoing [36] Question: How will cash balances be managed going forward? - Cash balances are expected to be utilized for organic loan growth and potential security purchases [38] Question: What is the outlook for the tax rate next year? - The expected tax rate for next year is projected to be in the range of 22% to 23% [51] Question: What is the company's stance on future M&A? - The primary focus remains on organic growth, but the company is open to future M&A opportunities if they arise [53]

Q3 Earnings Presentation October 24, 2024 Complementary Color Palette Body text 074 / 075 / 076030 / 152 / 213 DO NOT REFRESH On the call | --- | --- | --- | |-----------|--------------------------------------|------------------| | Presenter | | Topic | | | Bob Rivers | | | | Executive Chair & Chair of the Board | Opening Remarks | | | Denis Sheahan | | | | Chief Executive Officer | Company Overview | | | David Rosato | | | | Chief Financial Officer & Treasurer | Financials | 2 Complementary Color Palette B ...