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 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 quarter3 - Period-end loans grew 8% annualized linked quarter, primarily driven by higher Commercial & Industrial (C&I) activity3 - Net interest margin on a fully tax equivalent basis expanded 21 basis points to 3.59%, primarily due to higher asset yields3 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 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 transition4 - Robust loan growth reflects an ongoing focus on profitable growth and strategic investments in hiring talent, leveraging scale and deep local knowledge4 - 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 mix4 - Wealth management momentum continued, with assets under management reaching a record high of $8.7 billion4 - 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 improvement4 - 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 management4 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 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 yields7 - Net discount accretion contributed 29 basis points to the net interest margin on an FTE basis, up from 22 basis points in the prior quarter7 Noninterest Income 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 Q26 - 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 expense8 Noninterest Expense 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 $18.4 million)915 Balance Sheet and Capital Management The company's balance sheet demonstrated growth in total assets, loans, and deposits, while maintaining strong capital ratios and continuing to return capital to shareholders Balance Sheet Overview The company's balance sheet showed growth in total assets, loans, and deposits linked quarter, reflecting increased business activity and strategic management of liquidity | Metric | Jun 30, 2025 ($ 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 %
Eastern Bankshares(EBC) - 2025 Q2 - Quarterly Results