Eastern Bankshares, Inc. (NASDAQ:EBC) Q4 2020 Earnings Conference Call January 29, 2021 9:00 AM ET Company Participants Bob Rivers – Chief Executive Officer and Chair Jim Fitzgerald – Chief Administrative Officer, Chief Financial Officer and Treasurer Dan Sullivan – Chief Credit Officer Conference Call Participants Damon DelMonte – KBW Janet Lee – JPMorgan Laurie Hunsicker – Compass Point Jake Civiello – Janney Operator Good morning. My name is Amy and I will be your conference operator today. I would like ...

Financial Performance - Net income for the nine months ended September 30, 2020, was $66.8 million, a decrease of 35.7% compared to $103.9 million for the same period in 2019[267]. - Return on average assets decreased to 0.68% for the nine months ended September 30, 2020, down from 1.22% for the same period in 2019[271]. - The efficiency ratio increased to 71.71% for the nine months ended September 30, 2020, compared to 68.95% for the same period in 2019, indicating higher operational costs relative to income[271]. - Net interest income for the three months ended September 30, 2020, was $98.742 million, down from $104.148 million in the same period of 2019[315]. - Net interest income decreased by $12.7 million, or 4.1%, to $297.6 million during the nine months ended September 30, 2020, from $310.3 million during the same period in 2019[400]. - Net income for the three months ended September 30, 2020, was $28.5 million, compared to $35.8 million for the same period in 2019[424]. Asset and Liability Growth - Total assets increased to $15.46 billion as of September 30, 2020, from $11.63 billion as of December 31, 2019, representing a growth of approximately 32%[267]. - Total liabilities increased to $11.5 billion as of September 30, 2020, from $9.8 billion as of September 30, 2019[408]. - Total deposits rose to $13.33 billion as of September 30, 2020, up from $9.55 billion as of December 31, 2019, reflecting a growth of approximately 39%[267]. - Total cash and cash equivalents rose by $2.0 billion, or 542.0%, to $2.3 billion as of September 30, 2020, compared to $362.6 million at December 31, 2019[320]. - Total outstanding loans amounted to $9.94 billion as of September 30, 2020, with a nonperforming loans (NPLs) ratio of 0.45%[364]. Loan Performance and Provisions - Provision for loan losses increased significantly to $37.9 million for the nine months ended September 30, 2020, compared to $4.5 million for the same period in 2019, indicating a heightened risk environment[267]. - The allowance for loan losses rose to $115,432 thousand, compared to $82,297 thousand at the end of 2019, indicating a significant increase in provisions[344]. - Nonperforming loans (NPLs) increased by $1.1 million, or 2.4%, to $44.8 million at September 30, 2020, while NPLs as a percentage of total loans decreased to 0.45% from 0.49%[358]. - The provision for loan losses was $0.7 million for the three months ended September 30, 2020, and $37.9 million for the nine months ended September 30, 2020[366]. - Potential problem loans related to COVID-19 totaled $615.4 million as of September 30, 2020, compared to $157.3 million as of December 31, 2019[364]. Income and Expense Analysis - Noninterest income from wealth management services was $5.3 million for the three months ended September 30, 2020, compared to $19.7 million for the year ended December 31, 2019[291]. - Noninterest income (GAAP) for the three months ended September 30, 2020, was $47.709 million, compared to $41.590 million in the same period of 2019[315]. - Noninterest income decreased by $6.3 million, or 4.7%, to $128.7 million for the nine months ended September 30, 2020, from $135.0 million for the same period in 2019[413]. - Noninterest expense increased by $9.2 million, or 9.1%, to $109.8 million for the three months ended September 30, 2020, primarily due to a $5.3 million increase in salaries and employee benefits[418]. Capital and Equity - Total equity increased to $1.71 billion as of September 30, 2020, from $1.60 billion as of December 31, 2019, representing a growth of approximately 6.5%[267]. - The company’s Tier 1 capital to risk-weighted assets ratio improved to 12.91% as of September 30, 2020, compared to 12.36% as of September 30, 2019[271]. - Tangible equity increased to $1.34 billion in 2020, up from $1.22 billion in 2019, representing a growth of 9.4%[316]. Loan Modifications and COVID-19 Impact - As of September 30, 2020, loans that received a COVID-19 modification totaled $974.0 million, with 51% for full payment deferrals and 49% for deferral of only principal payments[296]. - The total balance of loans modified due to COVID-19 represented approximately 9.5% of total loan balances as of September 30, 2020[298]. - High-risk industries, including retail and restaurants, had significant loan balances of $481.4 million and $205.3 million, respectively, with modification rates of 20.6% and 41.9%[300]. Interest Income and Expense - Interest and dividend income decreased by $12.2 million, or 10.8%, to $100.5 million during the three months ended September 30, 2020, compared to $112.7 million for the same period in 2019[385]. - Interest expense decreased by $6.8 million, or 79.3%, to $1.8 million during the three months ended September 30, 2020, from $8.6 million in the same period of 2019[393]. - The average cost of interest-bearing deposits decreased 27 basis points to 0.20% in the nine months ended September 30, 2020[396]. Market and Economic Conditions - The company anticipates that the majority of its PPP exposure will be forgiven in the fourth quarter of 2020 or in the year ending December 31, 2021[302]. - The company expects elevated loan loss provisions until the economy recovers from the COVID-19 pandemic[306]. - The estimated economic value of equity (EVE) at September 30, 2020 was $4.4 billion, with a 14.1% increase in EVE from a 400 basis points increase in interest rates[451].

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2020 Or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number 333-239251 Eastern Bankshares, Inc. (Exact name of the registrant as specified in its charter) Massachusetts 84-4199750 (State or Other Jurisdiction ...