Eastern Bankshares(US:EBC)2025-05-08 18:45Financial Performance - Net loss for the three months ended March 31, 2025, was $217.7 million, compared to net income of $38.6 million for the same period in 2024[229]. - Operating net income for the three months ended March 31, 2025, was $67.5 million, representing an increase of 68.9% from $40.0 million in the same period of 2024[231]. - The company reported a net loss of $217.7 million for the three months ended March 31, 2025, compared to a net income of $38.6 million in the same period of 2024[252]. - Operating net income (non-GAAP) for the first quarter of 2025 was $67.5 million, an increase from $40.0 million in the first quarter of 2024[252]. - Total operating revenue (non-GAAP) for Q1 2025 was $227.7 million, compared to $162.1 million in Q1 2024[253]. - Net (loss) income was $(217.7) million for the three months ended March 31, 2025, compared to net income of $38.6 million for the same period in 2024, representing a decrease of $256.3 million[326]. - Noninterest loss was $236.1 million for Q1 2025, a significant decline from a gain of $27.7 million in Q1 2024, primarily due to $269.6 million in losses on sales of securities available for sale[351]. Asset and Loan Portfolio - Total assets decreased to $25.0 billion as of March 31, 2025, from $25.6 billion at December 31, 2024[228]. - Total commercial and industrial loans increased to $3.4 billion as of March 31, 2025, from $3.3 billion at December 31, 2024, representing 19.0% of total loans[234]. - Total commercial real estate loans rose to $7.1 billion as of March 31, 2025, from $7.0 billion at December 31, 2024, accounting for 39.7% of total loans[234]. - Total residential real estate loans remained stable at $3.9 billion as of March 31, 2025, representing 21.8% of total loans[236]. - Total consumer home equity loans were $1.4 billion as of March 31, 2025, representing 7.8% of total loans[242]. - Total other consumer loans decreased to $218.1 million as of March 31, 2025, from $227.2 million at December 31, 2024, representing 1.2% of total loans[242]. - The company reported an increase in loans, net of allowance for loan losses, by $141.9 million, or 0.8%, to $17.69 billion as of March 31, 2025[257]. - The total gross loans increased by $0.1 billion, or 0.7%, to $18.2 billion as of March 31, 2025, from $18.1 billion at December 31, 2024[275]. - Non-performing loans (NPLs) decreased by $44.2 million, or 32.5%, to $91.6 million at March 31, 2025, from $135.8 million at December 31, 2024[285]. - The delinquency rate of the total loan portfolio remained stable at 0.62% as of both March 31, 2025, and December 31, 2024[281]. - Potential problem loans increased by $39.3 million, or 9.5%, to $451.3 million at March 31, 2025, from $412.0 million at December 31, 2024[291]. - The carrying amount of purchased credit deteriorated (PCD) loans was $288.6 million as of March 31, 2025, down from $331.4 million at December 31, 2024[290]. - The total commercial real estate loans amounted to $995.6 million as of March 31, 2025, compared to $1,037.0 million at December 31, 2024[294]. - The company has 81.6% of its commercial loans concentrated in Massachusetts and New Hampshire as of March 31, 2025[276]. - The delinquency rate for business banking loans increased to 1.34% as of March 31, 2025, from 1.19% at December 31, 2024[283]. - The allowance for loan losses decreased by $4.6 million, or 2.0%, to $224.3 million, representing 1.25% of total loans as of March 31, 2025[301]. - Total net loan charge-offs increased to $11.2 million for the three months ended March 31, 2025, compared to $7.3 million for the same period in 2024[304]. - Non-accrual loans rose by $34.5 million, or 60.3%, to $91.6 million at March 31, 2025, primarily due to loans acquired from Cambridge[306]. Deposits and Liquidity - Total deposits declined by $522.2 million, or 2.4%, to $20.8 billion as of March 31, 2025[257]. - Cash and cash equivalents decreased by $638.1 million, or 63.4%, to $368.8 million as of March 31, 2025, primarily due to a decrease in total deposits[258]. - The estimate of total uninsured deposits was $8.6 billion at March 31, 2025, down from $9.0 billion at December 31, 2024[319]. - Average total loans increased to $17.8 billion for the three months ended March 31, 2025, compared to $14.0 billion for the same period in 2024[304]. - The company maintains $20.1 million in outstanding advances from the FHLBB and has the ability to borrow up to an additional $1.7 billion[386]. - As of March 31, 2025, total liquidity sources amount to $5.0 billion, providing 74% coverage of all customer uninsured and uncollateralized deposits totaling $6.7 billion[386]. - The company had $2.0 billion in reciprocal deposits as of March 31, 2025, compared to $2.1 billion as of December 31, 2024[385]. - The company’s liquidity position is influenced by customer deposits, loan originations, and repayments, as well as potential acquisitions and share repurchases[384]. Interest Income and Expenses - Net interest income (GAAP) increased to $188.9 million in Q1 2025 from $129.9 million in Q1 2024, with fully-taxable equivalent net interest income on an operating basis at $193.5 million[253]. - Interest income on loans increased by $58.5 million, or 34.4%, to $228.5 million for the three months ended March 31, 2025, compared to $170.0 million for the same period in 2024[331]. - Interest expense on interest-bearing deposits increased by $3.5 million to $76.0 million for the three months ended March 31, 2025, from $72.5 million in the same period in 2024[329]. - Net interest margin increased by 70 basis points to 3.38% for the three months ended March 31, 2025, from 2.68% for the same period in 2024[335]. Regulatory and Compliance - The company is subject to comprehensive regulation by multiple federal and state agencies, impacting its operations and strategic decisions[228]. - The company exceeded all applicable regulatory capital requirements and was considered "well capitalized" as of March 31, 2025[392]. - Total regulatory capital to risk-weighted assets ratio decreased to 15.19% as of March 31, 2025, from 16.78% as of December 31, 2024[393]. - The Tier 1 capital to average assets leverage ratio decreased to 11.68% as of March 31, 2025, from 12.43% as of December 31, 2024[393]. - There were no material changes in contractual obligations from those disclosed in the 2024 Form 10-K as of March 31, 2025[394]. Mergers and Acquisitions - The company announced a pending merger with HarborOne Bancorp and HarborOne Bank on April 24, 2025[230]. - The merger with Cambridge resulted in an increase of $5.0 billion in assets under management, contributing to the rise in trust and investment advisory fees[352]. - Salaries and wages expense rose by $9.1 million due to an increase in the number of employees following the merger with Cambridge[358]. Economic Outlook - The company anticipates a slight growth in the U.S. economy in 2025, with GDP growth forecasted at 0.4% in a downside scenario and 2.6% in an upside scenario[347].