Eastern Bankshares(US:EBC)2024-05-03 12:46Financial Performance - Net income from continuing operations for Q1 2024 was $38.6 million, a significant recovery from a net loss of $202.1 million in Q1 2023[240]. - Operating net income for Q1 2024 was $38.1 million, down 28.3% from $53.1 million in Q1 2023, primarily due to decreased net interest income and increased provision for loan losses[242]. - Noninterest income for Q1 2024 was $27.7 million, compared to a loss of $309.9 million in Q1 2023, reflecting a recovery in operational performance[270]. - Total revenue from continuing operations for Q1 2024 was $157.6 million, compared to a loss of $171.5 million in Q1 2023[270]. - Net income for the three months ended March 31, 2024, was $38.6 million, a turnaround from a net loss of $202.1 million in the same period of 2023, reflecting a change of 119.1%[344]. Asset and Loan Portfolio - Total assets increased to $21.2 billion as of March 31, 2024, compared to $21.1 billion at December 31, 2023[238]. - Total commercial and industrial loans reached $3.1 billion as of March 31, 2024, representing 21.9% of total loans, up from $3.0 billion and 21.8% respectively at the end of 2023[245]. - Total commercial real estate loans were $5.5 billion as of March 31, 2024, accounting for 39.3% of total loans, compared to 39.1% at the end of 2023[245]. - Residential real estate loans totaled $2.5 billion as of March 31, 2024, representing 18.1% of total loans, down from $2.6 billion and 18.4% respectively at the end of 2023[248]. - The company's total loans increased by $115.3 million, or 0.8%, to $14.1 billion at March 31, 2024, compared to $14.0 billion at December 31, 2023[290]. Mergers and Acquisitions - The company is in the process of merging with Cambridge Bancorp and Cambridge Trust Company, which may impact future financial results[233]. - The proposed acquisition of Cambridge Bancorp is valued at approximately $528.1 million, with the company expected to issue about 39.4 million shares in the merger[257]. - Merger and acquisition costs related to the Cambridge acquisition totaled $1.8 million for the three months ended March 31, 2024, with no costs incurred in the same period of the previous year[260]. - The company anticipates the merger with Cambridge will close early in the third quarter of 2024, pending regulatory approvals[257]. Interest Income and Expense - Interest and dividend income rose by $13.7 million, or 7.3%, to $202.6 million for the three months ended March 31, 2024, compared to $188.9 million for the same period in 2023[344]. - Interest expense increased by $22.1 million, or 43.8%, to $72.7 million for the three months ended March 31, 2024, from $50.6 million in the same period of 2023[346]. - Net interest income decreased by $8.4 million, or 6.1%, to $129.9 million for the three months ended March 31, 2024, compared to $138.3 million for the same period in 2023[350]. - The net interest margin remained relatively consistent at 2.68% for the three months ended March 31, 2024, compared to 2.66% for the same period in 2023[351]. Loan Losses and Provisions - Provision for allowance for loan losses surged to $7.5 million for the three months ended March 31, 2024, compared to only $25, marking a significant increase of 29,704%[344]. - The allowance for loan losses was $149.2 million as of March 31, 2024, compared to $149.0 million at December 31, 2023[290]. - Non-performing loans (NPLs) increased by $4.6 million, or 8.8%, to $57.2 million at March 31, 2024, from $52.6 million at December 31, 2023[300]. - The total non-accrual loans as a percentage of total loans increased to 0.41% as of March 31, 2024, compared to 0.25% as of March 31, 2023[321]. Capital and Liquidity - The company maintained a total regulatory capital ratio of 19.49% as of March 31, 2024, slightly down from 19.55% as of December 31, 2023, indicating stable capital adequacy[408]. - Common equity Tier 1 capital ratio was 18.51% as of March 31, 2024, compared to 18.55% at the end of 2023, showing a minor decrease in capital strength[408]. - As of March 31, 2024, total liquidity sources amount to $6.2 billion, providing 116% coverage of all customer uninsured and uncollateralized deposits totaling $5.4 billion[403]. - The company has the ability to borrow up to an additional $2.7 billion from the Federal Home Loan Bank and $2.8 billion from the Federal Reserve Bank of Boston[403]. Noninterest Expenses - Total noninterest expense increased by $5.3 million, or 5.5%, to $101.2 million, primarily due to a $4.2 million increase in data processing expenses and a $2.3 million increase in salaries and employee benefits[369]. - Data processing expenses rose by $4.2 million, or 34.2%, primarily due to increased software expenses related to customer relationship management and cybersecurity[370]. - Salaries and employee benefits expenses increased by $2.3 million, or 3.7%, primarily due to cost of living adjustments and the addition of new employees[369][370]. Taxation - The combined federal and state income tax provision increased by $75.7 million to $10.3 million for the three months ended March 31, 2024, from a benefit of $65.4 million in the same period of 2023[372]. - The effective income tax rate decreased to 21.0% for the three months ended March 31, 2024, compared to 24.4% for the same period in 2023[372].