Core Viewpoint - Eastern Bankshares, Inc. (NASDAQ: EBC) has experienced mixed performance in recent months, despite a broader market rally that has positively impacted its share price [1]. Company Performance - The shares of Eastern Bankshares have been lifted by the broader market rally, indicating a potential for growth [1]. Investment Strategy - The investment approach favored is a long-term, buy-and-hold strategy, particularly focusing on stocks that can consistently deliver high-quality earnings, often found in the dividend and income sectors [1].

Core Viewpoint - Eastern Bankshares, Inc. (EBC) has received a Zacks Rank 2 (Buy) upgrade, indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [4]. Company Performance Indicators - Eastern Bankshares is projected to earn $1.53 per share for the fiscal year ending December 2025, with no year-over-year change expected [8]. - Over the past three months, the Zacks Consensus Estimate for Eastern Bankshares has increased by 4.1%, reflecting a positive trend in earnings estimates [8]. Zacks Rating System Overview - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with only the top 20% receiving a "Strong Buy" or "Buy" rating [9][10]. - The upgrade of Eastern Bankshares to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Group 1 - The company reported strong performance in Q2 2025, highlighting the strength of the Eastern franchise and its leading position in the Greater Boston area [5] - The earnings call included participation from key executives, including the CEO, CFO, and Executive Chairman [1] - The call was recorded for replay purposes, indicating the importance of the information shared [1] Group 2 - The company cautioned investors about forward-looking statements, emphasizing that actual results may differ due to various risks and uncertainties [2] - Management's views and estimates are based on current information, with no obligation to update these statements in light of new information or future events [3] - The discussion included both GAAP and non-GAAP financial measures, with reconciliations available in the earnings press release [3]

Financial Data and Key Metrics Changes - Operating earnings for the second quarter were $81.7 million, a 21% increase from the first quarter [6] - Net income was reported at $100.2 million or $0.50 per diluted share, with operating earnings of $0.41 per diluted share, reflecting a 21% increase linked quarter and a 78% increase year-over-year [11] - Total assets reached $25.5 billion, up 2% from March 31 [8] - Tangible book value per share increased 4% to $12.53 [8] - Operating return on average assets rose 21 basis points to 1.3%, while operating return on average tangible equity increased from 11.7% to 13.6% [7] Business Line Data and Key Metrics Changes - Robust loan growth of 8% annualized this quarter, with commercial loan pipelines steady at approximately $500 million [8][9] - Wealth management assets under management reached a record high of $8.7 billion, with fees of $17.3 million up $800,000 linked quarter [15] - Non-interest income was $42.9 million, compared to a non-interest loss of $236.1 million in Q1 [14] Market Data and Key Metrics Changes - Deposits totaled $21.2 billion, an increase of $424 million from the prior quarter, with 8% annualized growth [17] - Nonperforming loans decreased to $54.7 million or 30 basis points of total loans, improving the coverage ratio to 424% from 245% at the end of Q1 [21][22] Company Strategy and Development Direction - The company is focused on organic growth and strategic investments in talent, particularly in commercial lending [8][19] - Plans to consolidate 13 branch locations following the merger with Harbor One, with integration planning well underway [29][30] - The company is raising its full-year loan growth outlook to 3% to 5% and expects a favorable mix shift from CDs to money markets [27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of customers despite economic uncertainties and highlighted the importance of proactive risk management [9][10] - The company remains cautious in its outlook but is optimistic about the ongoing positive trends in credit quality and profitability metrics [10][21] Other Important Information - The company repurchased $3 million worth of shares at an average price of $16.36 prior to the merger announcement [20] - A dividend of $0.13 is set to be paid in September [20] Q&A Session Summary Question: Will there be more securities portfolio restructurings in the coming quarters? - Management indicated that while there is potential for further restructuring, it is currently on the back burner due to the merger [34][35] Question: What drove the significant drop in nonperforming loans this quarter? - The drop was attributed to the resolution of five credits by the managed asset group, rather than loan sales [36] Question: Are there plans to expand into new markets following the Harbor One deal? - Management is open to expanding in Rhode Island but currently has no plans to extend banking services into Connecticut or New York [38][39] Question: What drove the strong growth in commercial and industrial lending? - Growth was driven by increased customer confidence and the addition of talent in the commercial lending division [44][45] Question: What is the outlook for the margin in the second half of the year? - The margin is expected to be relatively flat, influenced by core deposit growth and competitive market conditions [49][50] Question: Can you provide guidance on Rabbi Trust income? - Rabbi Trust income is influenced by equity market performance, and while it can have an impact, it is not expected to be a significant needle mover [54][55] Question: What is the company's appetite for expansion into New Hampshire or Maine? - The company already has a presence in New Hampshire and is looking to grow there, but has no current plans for expansion into Maine [72][73]

Financial Data and Key Metrics Changes - Operating earnings for Q2 2025 were $81.7 million, a 21% increase from Q1 2025 [7] - Net income was $100.2 million or $0.50 per diluted share, with operating earnings of $0.41 per diluted share, reflecting a 21% increase linked quarter and a 78% increase year-over-year [12][28] - Total assets reached $25.5 billion, up 2% from March 31 [8] - Tangible book value per share increased 4% to $12.53 [8] - Operating return on average assets rose 21 basis points to 1.3%, and return on average tangible equity increased from 11.7% to 13.6% [8][13] Business Line Data and Key Metrics Changes - Robust loan growth of 8% annualized this quarter, with commercial loan pipelines steady at approximately $500 million [8][9] - Noninterest income was $42.9 million, compared to a noninterest loss of $236.1 million in Q1 2025 [15] - Wealth management assets under management reached a record high of $8.7 billion, with fees of $17.3 million, up $800,000 linked quarter [16] Market Data and Key Metrics Changes - Deposits totaled $21.2 billion, an increase of $424 million from the prior quarter, with 8% annualized growth [20] - Nonperforming loans decreased to $54.7 million or 30 basis points of total loans, improving from the previous quarter [23][24] Company Strategy and Development Direction - The company is focused on organic growth and strategic investments in talent, particularly in commercial lending [8][44] - Plans to consolidate 13 branch locations following the merger with Harbor One, with integration planning well underway [30][31] - The company raised its full-year loan growth outlook to 3% to 5%, reflecting strong results through the first half of the year [28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of customers despite economic uncertainties and highlighted the importance of proactive risk management [10][11] - The company remains cautious in its outlook but is optimistic about the ongoing positive trends in credit quality and profitability metrics [11][23] - The competitive market for deposits has heated up, impacting margin expectations for the second half of the year [50] Other Important Information - The company repurchased $3 million worth of shares at an average price of $16.36 prior to the merger announcement [22] - A dividend of $0.13 is set to be paid in September [22] Q&A Session Summary Question: Will there be more securities portfolio restructurings in the coming quarters? - Management indicated that while there is potential for another restructuring, it is currently on the back burner due to the merger [35] Question: What drove the significant drop in nonperforming loans this quarter? - The drop was attributed to the resolution of five credits rather than loan sales [37] Question: Are there plans to expand into new markets following the Harbor One deal? - Management is open to expanding in Rhode Island but has no current plans to enter Connecticut or New York [39][40] Question: What drove the strong growth in commercial and industrial loans? - Growth was driven by increased customer confidence and the addition of talent in the commercial lending division [44] Question: What is the outlook for the margin in the second half of the year? - Management expects the margin to be relatively flat, influenced by core deposit growth and competitive market conditions [50] Question: Can you provide guidance on Rabbi Trust income? - Rabbi Trust income is influenced by equity market performance, and while it can have an impact, it is not expected to be a significant factor moving forward [54]

Financial Performance - Net income was $100.2 million, which translates to $0.50 per diluted share[5] - Operating net income reached $81.7 million, or $0.41 per diluted share, marking a 21% increase compared to the previous quarter[5] - Net interest margin expanded by 21 basis points to 3.59%[7] - Operating efficiency ratio improved to 50.8%[9] Balance Sheet & Loan Portfolio - Total loans increased by $385 million, representing an annualized growth of 8%[54] - Total deposits remained consistent with the previous quarter[24] - Non-performing loans decreased to $54.7 million, accounting for 0.30% of total loans, an improvement from $91.6 million or 0.51% at March 31, 2025[7] - Wealth management assets under management reached a record high of $8.7 billion[7] Commercial Real Estate (CRE) - CRE portfolio totaled $7.3 billion, representing 39% of total loans[79, 83] - Non-performing CRE loans decreased to $25 million, or 0.4% of total CRE loans, compared to $58 million, or 0.8% in the prior quarter[83] - CRE investor office loans amounted to $828 million, or 4% of total loans[89] Capital & Outlook - Common Equity Tier 1 (CET1) capital ratio stood at 14.4%[64] - Tangible book value per share increased by $0.52 to $12.53, a 4% increase compared to the previous quarter[5] - The company expects loan growth of 3%-5% and deposit growth of 0%-1% for the full year 2025[91]

Core Insights - Eastern Bankshares, Inc. (EBC) reported a revenue of $244.9 million for the quarter ended June 2025, marking a year-over-year increase of 59% and exceeding the Zacks Consensus Estimate by 2.71% [1] - The earnings per share (EPS) for the same period was $0.41, compared to $0.22 a year ago, resulting in an EPS surprise of 7.89% over the consensus estimate of $0.38 [1] Financial Performance Metrics - The efficiency ratio (GAAP) was reported at 55.9%, better than the estimated 56.4% [4] - The net interest margin stood at 3.6%, slightly above the estimated 3.5% [4] - Total interest-earning assets averaged $23.14 billion, below the estimated $23.39 billion [4] - Total non-performing assets were $54.7 million, significantly lower than the estimated $131.91 million [4] - Total non-performing loans matched the non-performing assets at $54.7 million, again below the average estimate of $131.91 million [4] - Total noninterest income was $42.9 million, exceeding the estimated $34.58 million [4] - Net interest income was reported at $202 million, slightly above the average estimate of $200.91 million [4] - Interest rate swap income was $1 million, surpassing the estimated $0.51 million [4] - Card income reached $4.2 million, above the estimated $4 million [4] - Investment advisory fees totaled $17.3 million, exceeding the estimated $16.51 million [4] - Service charges on deposit accounts were $8.2 million, slightly below the estimated $8.32 million [4] Stock Performance - Shares of Eastern Bankshares have returned +9.2% over the past month, outperforming the Zacks S&P 500 composite's +5.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Core Viewpoint - Eastern Bankshares, Inc. reported quarterly earnings of $0.41 per share, exceeding the Zacks Consensus Estimate of $0.38 per share, and showing a significant increase from $0.22 per share a year ago, indicating strong financial performance [1][2]. Financial Performance - The company achieved revenues of $244.9 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.71%, compared to $154 million in the same quarter last year [2]. - Over the last four quarters, Eastern Bankshares has exceeded consensus EPS estimates three times and topped consensus revenue estimates two times [2]. Stock Performance - Eastern Bankshares shares have declined approximately 6.1% since the beginning of the year, contrasting with the S&P 500's gain of 8.1% [3]. - The current Zacks Rank for Eastern Bankshares is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6]. Earnings Outlook - The consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $242.71 million, and for the current fiscal year, it is $1.52 on revenues of $977.03 million [7]. - The estimate revisions trend for Eastern Bankshares was mixed ahead of the earnings release, which may change following the recent report [6]. Industry Context - The Banks - Northeast industry, to which Eastern Bankshares belongs, is currently ranked in the top 23% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8].

Executive Summary & Financial Highlights Eastern Bankshares, Inc. reported strong Q2 2025 financial results, driven by significant improvements in net income, loan growth, and margin expansion [Q2 2025 Financial Overview](index=1&type=section&id=Q2%202025%20Financial%20Overview) Q2 2025 financial results showed significant improvements in net income and operating net income, driven by robust loan and deposit growth, net interest margin expansion, and improved asset quality | Metric | Jun 30, 2025 ($ in millions) | Mar 31, 2025 ($ in millions) | Linked Quarter Change ($) | Linked Quarter Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------------------ | :----------------------- | | Net income (loss) | 100.2 | (217.7) | 317.9 | NM | | Per share, diluted | 0.50 | (1.08) | 1.58 | NM | | Operating net income* | 81.7 | 67.5 | 14.2 | 21 % | | Per share, diluted* | 0.41 | 0.34 | 0.07 | 21 % | | Net interest income | 202.0 | 188.9 | 13.1 | 7 % | | NIM - FTE* | 3.59 % | 3.38 % | 0.21 % | NM | | Loans (period-end) | 18,590 | 18,204 | 385 | 2 % | | Deposits (period-end) | 21,221 | 20,797 | 424 | 2 % | | Non-performing loans | 54.7 | 91.6 | (36.9) | (40)% | | Total non-performing loans to total loans | 0.30 % | 0.51 % | (0.21)% | NM | - Net income of **$100.2 million**, or **$0.50 per diluted share**, included a GAAP tax benefit related to losses from investment portfolio repositioning completed in the first quarter[3](index=3&type=chunk) - Period-end loans grew **8% annualized** linked quarter, primarily driven by higher Commercial & Industrial (C&I) activity[3](index=3&type=chunk) - Net interest margin on a fully tax equivalent basis expanded **21 basis points to 3.59%**, primarily due to higher asset yields[3](index=3&type=chunk) Management Commentary Executives expressed confidence in the company's strong franchise and value creation from the HarborOne merger, highlighting robust loan growth, stable deposit costs, record wealth management assets, and positive credit trends [Executive Perspectives](index=2&type=section&id=Executive%20Perspectives) Executives highlighted the company's strong franchise and market position in Greater Boston, with confidence in the value creation from the HarborOne merger, emphasizing robust loan growth, stable deposit costs, record wealth management assets, and continued positive credit trends as key drivers of enhanced earnings power - Confidence in opportunities and long-term value creation from the HarborOne combination, with integration planning well underway for a seamless transition[4](index=4&type=chunk) - Robust loan growth reflects an ongoing focus on profitable growth and strategic investments in hiring talent, leveraging scale and deep local knowledge[4](index=4&type=chunk) - Deposits finished the quarter strong with **8% annualized linked quarter growth**, primarily from higher municipal balances, and deposit costs remained stable due to disciplined pricing and favorable deposit mix[4](index=4&type=chunk) - Wealth management momentum continued, with assets under management reaching a record high of **$8.7 billion**[4](index=4&type=chunk) - Operating income increased **21% linked quarter**, generating an operating return on average tangible equity of **13.6%**, driven by net interest margin expansion, fee income growth, and efficiency ratio improvement[4](index=4&type=chunk) - Continued positive credit trends, with non-performing loans as a percentage of total loans improving for the second consecutive quarter and no net charge-offs, reflecting quality underwriting and proactive risk management[4](index=4&type=chunk) Quarterly Financial Performance The company's Q2 2025 financial performance was marked by increased net interest income due to margin expansion, a significant improvement in noninterest income from the absence of prior quarter losses, and a rise in noninterest expense driven by operating costs and merger-related charges [Net Interest Income](index=2&type=section&id=Net%20Interest%20Income) Net interest income increased by **$13.1 million** linked quarter, primarily driven by a **21 basis point** expansion in the net interest margin (FTE) to **3.59%**, resulting from higher asset yields and stable deposit costs | Metric | Jun 30, 2025 ($ in millions) | Mar 31, 2025 ($ in millions) | Linked Quarter Change ($) | Linked Quarter Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------------------ | :----------------------- | | Net interest income | 202.0 | 188.9 | 13.1 | 7 % | | Net interest margin (FTE) | 3.59 % | 3.38 % | 0.21 % | NM | | Yield on total interest-earning assets | 4.93 % | 4.72 % | 0.21 % | NM | | Cost of total interest-bearing liabilities | 2.04 % | 2.05 % | (0.01)% | NM | | Net discount accretion | 16.5 | 12.2 | 4.3 | 35 % | - The yield on total interest-earning assets increased **21 basis points to 4.93%**, primarily due to higher investment and loan yields[7](index=7&type=chunk) - Net discount accretion contributed **29 basis points** to the net interest margin on an FTE basis, up from **22 basis points** in the prior quarter[7](index=7&type=chunk) [Noninterest Income](index=2&type=section&id=Noninterest%20Income) Noninterest income significantly improved from a loss in the prior quarter to a gain of **$42.9 million**, primarily due to the absence of large losses from investment portfolio repositioning, with operating noninterest income also seeing a healthy increase driven by higher income from rabbi trust investments and investment advisory fees | Metric | Jun 30, 2025 ($ in millions) | Mar 31, 2025 ($ in millions) | Linked Quarter Change ($) | Linked Quarter Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------------------ | :----------------------- | | Noninterest income (loss) | 42.9 | (236.1) | 279.0 | NM | | Operating noninterest income* | 42.2 | 34.2 | 8.0 | 23 % | | Income from investments held in rabbi trust accounts | 5.7 | (1.3) | 7.0 | NM | | Investment advisory fees | 17.3 | 16.4 | 0.8 | 5 % | | Interest rate swap income | 1.0 | 0.5 | 0.5 | 100 % | - The first quarter included pre-tax non-operating losses on the sale of available-for-sale securities of **$269.6 million** related to investment portfolio repositioning, which did not recur in Q2[6](index=6&type=chunk) - Income from investments held in rabbi trust accounts increased **$7.0 million to $5.7 million** due to equity market performance, partially offset by a **$3.2 million** increase in rabbi trust benefit costs reported in noninterest expense[8](index=8&type=chunk) [Noninterest Expense](index=3&type=section&id=Noninterest%20Expense) Total noninterest expense increased by **$6.8 million** linked quarter, driven by higher operating noninterest expense and the incurrence of merger-related costs | Metric | Jun 30, 2025 ($ in millions) | Mar 31, 2025 ($ in millions) | Linked Quarter Change ($) | Linked Quarter Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------------------ | :----------------------- | | Noninterest expense | 137.0 | 130.1 | 6.8 | 5 % | | Operating noninterest expense* | 134.4 | 130.1 | 4.3 | 3 % | | Merger-related costs | 2.6 | — | 2.6 | NM | - Key drivers of the increase in operating noninterest expense include: Salaries and employee benefits (up **$0.8 million to $80.7 million**), Marketing (up **$0.7 million to $2.4 million**), Occupancy and equipment (up **$0.6 million to $11.2 million**), Federal Deposit Insurance Corporation insurance (up **$0.5 million to $3.8 million**), and Technology and data processing (up **$0.4 million to $18.4 million**)[9](index=9&type=chunk)[15](index=15&type=chunk) Balance Sheet and Capital Management The company's balance sheet demonstrated growth in total assets, loans, and deposits, while maintaining strong capital ratios and continuing to return capital to shareholders [Balance Sheet Overview](index=3&type=section&id=Balance%20Sheet%20Overview) The company's balance sheet showed growth in total assets, loans, and deposits linked quarter, reflecting increased business activity and strategic management of liquidity | Metric | Jun 30, 2025 ($ in millions) | Mar 31, 2025 ($ in millions) | Linked Quarter Change ($) | Linked Quarter Change (%) | | :-------------------------------- | :--------------------------- | :--------------------------- | :------------------------ | :----------------------- | | Total assets | 25,456.2 | 24,986.0 | 470.1 | 2 % | | Total loans | 18,589.8 | 18,204.5 | 385.3 | 2 % | | Total deposits | 21,220.8 | 20,797.1 | 423.7 | 2 %

Core Viewpoint - Eastern Bankshares, Inc. (EBC) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on the consensus measure of EPS estimates from sell-side analysts, reflecting the company's changing earnings picture [1][2]. - A strong correlation exists between changes in earnings estimates and near-term stock price movements, influenced by institutional investors who adjust their valuations based on these estimates [4][6]. Company Performance Indicators - For the fiscal year ending December 2025, Eastern Bankshares is expected to earn $1.52 per share, representing a 43.4% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Eastern Bankshares has increased by 2.4%, indicating positive sentiment among analysts [8]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7]. - The upgrade of Eastern Bankshares to Zacks Rank 1 places it in the top 5% of Zacks-covered stocks, suggesting potential for higher stock prices in the near term [10].