Eastern Bankshares(US:EBC)2026-01-23 15:00Financial Data and Key Metrics Changes - In Q4 2025, the company reported net income of $99.5 million, or $0.46 per diluted share, with operating earnings increasing by 28% to $94.7 million [11][12] - Operating return on assets (ROA) improved to 130 basis points, up 24 basis points year-over-year, while return on average tangible common equity rose to 13.8% from 11.3% [12] - The net interest income for Q4 was $237.4 million, an increase of $37.2 million from Q3, driven by margin improvement [12][13] Business Line Data and Key Metrics Changes - Total loans grew by $1 billion, or 5.6%, for the full year, primarily due to strong commercial lending results [8][17] - Wealth assets reached a record high of $10.1 billion at year-end, including $9.6 billion in assets under management, driven by market appreciation and positive net flows [8][14] - Non-interest income for Q4 was $46.1 million, an increase of $4.8 million from Q3, with mortgage banking income rising to $3 million [13][14] Market Data and Key Metrics Changes - The company is now the largest independent bank headquartered in Massachusetts with $31 billion in assets and the fourth largest deposit market share in Greater Boston [4] - Period-end deposits totaled $25.5 billion, an increase of $4.4 billion, or 21% from Q3, primarily due to the addition of HarborOne deposits [15][16] Company Strategy and Development Direction - The company is focused on organic growth and returning capital to shareholders, with no plans for acquisitions in the foreseeable future [5][6][27] - Strategic investments in hiring talent have been emphasized as a key driver of growth, enhancing the company's competitive position [7] - The company aims to manage its CET1 ratio towards the median of the KRX, currently at 12%, while continuing to return excess capital through share repurchases and dividends [10][18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in capturing growth opportunities in larger markets, expecting steady improvement in profitability metrics [6][8] - The company anticipates loan growth of 3%-5% and deposit growth of 1%-2% for 2026, with net interest income projected between $1.2 billion and $1.5 billion [25][26] - Management noted that while there are no material shifts in credit metrics, a provision expense of $30-$40 million is expected for 2026 [30][39] Other Important Information - The company repurchased 3.1 million shares for $55.4 million in Q4, representing 26% of the total authorization announced in October [9][18] - The allowance for loan losses increased to $332 million, or 144 basis points of total loans, reflecting the initial allowance for acquired HarborOne loans [21] Q&A Session Summary Question: Margin outlook and deposit growth - Management indicated that the core margin is expected to remain relatively flat in the near term, with potential expansion later in the year [28][29] Question: Provision outlook and credit landscape - The provision guidance of $30 million-$40 million is higher than the previous year, but management does not see significant concerns in credit trends [30][31] Question: Non-performing loans and resolution plans - Non-performing loans are primarily driven by HarborOne, with management confident in their resolution plans [33][34] Question: Fee income and mortgage banking business - The company expects fee income from HarborOne's mortgage business to be 8%-10% of total fee income, benefiting from potential rate drops [46]