Recent Quotes View Full List My Watchlist Create Watchlist Indicators DJI Nasdaq Composite SPX Gold Crude Oil EL&P Market Index Markets Stocks ETFs Tools Overview News Currencies International Treasuries Eastern Bankshares, Inc. Reports Fourth Quarter 2023 Financial Results By: Eastern Bank via Business Wire January 25, 2024 at 16:15 PM EST ~ Earnings, Capital, and Liquidity Enhancements Resulting from Eastern Insurance Group LLC Asset Sale ~ ~ Growth in Core Deposits and Reduction in Wholesale Funding ~ Eastern Bankshares, Inc. (the “Company,” or together with its subsidiaries, “Eastern”) (NASDAQ Global Select Market: EBC), the stock holding company of Eastern Bank, today announced its 2023 fourth quarter financial results and the declaration of a quarterly cash dividend. On October 31, 2023, the Company completed the sale of the insurance operations of Eastern Insurance Group, LLC (“Eastern Insurance”), to Arthur J. Gallagher & Co. (“Gallagher”) for gross consideration of $515 million (“the insurance transaction”). The company recorded an after-tax gain of $294.5 million which is included in the fourth quarter results. The insurance transaction significantly improved the capital and funding position of the Company and will allow the Company to focus on the growth and strategic initiatives of its core banking business, including its pending merger with Cambridge Bancorp (“Cambridge”) (“the merger”), which was previously announced on September 19, 2023. The merger is expected to close early in the second quarter of 2024, subject to regulatory and shareholder approvals as previously disclosed. "2023 was a year of strategic repositioning for Eastern,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “We realized early in 2023 that all banks were going to face significant challenges due to higher interest rates, changing customer deposit preferences and a very difficult macroeconomic environment. We responded by repositioning our securities portfolio in the first quarter, which allowed us to improve both our liquidity and earnings outlook, and followed with the sale of Eastern Insurance in the second half of the year to capitalize on the valuation premium it commanded. The insurance transaction provided us additional liquidity and capital, and positioned us to announce our merger with Cambridge Bancorp, a highly attractive in-market merger partner with a valuable wealth management business. We are very confident that these transactions provide us with a greater financial foundation, stronger earnings for our shareholders, and a leading market share in our footprint. The upcoming merger is the next step in our journey and we all look forward to welcoming the colleagues and customers of Cambridge Trust to Eastern.” FINANCIAL HIGHLIGHTS FOR THE FOURTH QUARTER OF 2023 Completed the sale of Eastern Insurance to Gallagher for cash consideration of $515 million and for an after-tax gain of $294.5 million. Net income of $318.5 million, or $1.95 per diluted share, compared to net income of $59.1 million, or $0.36 per diluted share, for the prior quarter. Operating net income*, which excludes the revenues, expenses, and tax provision of discontinued operations, of $16.9 million, or $0.10 per diluted share. Operating net income* includes a $10.8 million special assessment from the Federal Deposit Insurance Corporation (“FDIC”). Total deposits increased $172.0 million from the prior quarter, to $17.6 billion. Core deposits, which exclude brokered deposits, increased $516.2 million or 3.0% from the prior quarter. Total loans increased $54.2 million from the prior quarter, to $14.0 billion. The net interest margin on a fully tax equivalent (“FTE”) basis* of 2.69% was 8 basis points lower than the prior quarter but trend is stabilizing. Borrowings and brokered deposits of less than 1% of total assets as of December 31, 2023. Annualized net charge-offs ("NCOs") of 0.32% in the fourth quarter and 0.09% for full year 2023 and nonperforming loans ("NPLs") of $52.6 million, or 0.38% of total loans as of December 31, 2023. BALANCE SHEET Total assets were $21.1 billion at December 31, 2023, essentially unchanged from September 30, 2023. Cash and equivalents increased $84.3 million from the prior quarter to $693.1 million. Total securities increased $139.8 million, or 3%, from the prior quarter, to $4.9 billion, due to an increase in the market value of available for sale securities, partially offset by principal runoff. Loans totaled $14.0 billion, representing an increase of $54.2 million, or 0.4%, from the prior quarter. Deposits totaled $17.6 billion, representing an increase of $172.0 million, or 1.0%, from the prior quarter, driven primarily by an increase of $516.2 million, or 3.0%, in core deposits. This was partially offset by a decrease of $344.1 million in brokered deposits. Borrowed funds decreased $667.2 million from the prior quarter to $48.2 million in the fourth quarter, as a combination of strong core deposit trends and the proceeds from the insurance transaction allowed for the paydown of Federal Home Loan Bank (“FHLB”) borrowings. Shareholders’ equity was $3.0 billion, representing an increase of $528.3 million from the prior quarter primarily driven by increases in retained earnings and accumulated other comprehensive income. The increase in retained earnings was primarily due to the net gain on sale resulting from the insurance transaction. At December 31, 2023, book value per share was $16.86 and tangible book value per share* was $13.65. Please refer to Appendix D to this press release for a roll-forward of tangible shareholders’ equity*. NET INTEREST INCOME Net interest income was $133.3 million for the fourth quarter of 2023, compared to $137.2 million in the prior quarter, representing a decrease of $3.9 million. The decrease in net interest income on a consecutive quarter basis was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs. The net interest margin on a FTE basis* was 2.69% for the fourth quarter, representing an 8 basis point decrease from the prior quarter. Total interest-earning asset yields increased 1 basis point from the prior quarter to 4.06%, due to increased residential loan, consumer loan and short-term investment yields as a result of higher interest rates throughout the quarter, partially offset by decreased commercial loan yield. The prior quarter’s commercial loan yield benefited from $2.6 million in commercial loan interest recoveries. Total interest-bearing liabilities cost increased 20 basis points from the prior quarter to 2.19%, due primarily to higher deposit costs resulting from deposit pricing increases and deposit mix shifts. The net interest margin for the fourth quarter included a partial quarter benefit from the proceeds of the insurance transaction, which was completed on October 31, 2023. The proceeds, in part, allowed the Company to reduce brokered deposits and borrowings to less than 1% of total assets. NONINTEREST INCOME Noninterest income, which excludes revenues from discontinued operations, was $26.7 million for the fourth quarter of 2023, compared to $19.2 million for the prior quarter, representing an increase of $7.6 million. Noninterest income on an operating basis* was $21.8 million for the fourth quarter of 2023, compared to $20.7 million for the prior quarter, an increase of $1.1 million. Service charges on deposit accounts increased $0.1 million on a consecutive quarter basis to $7.5 million. Trust and investment advisory fees decreased $0.1 million on a consecutive quarter basis to $6.1 million. Debit card processing fees were unchanged at $3.4 million in the fourth quarter. Loan-level interest rate swap income decreased $2.3 million from the prior quarter to a loss of $0.6 million. The decrease was driven primarily by a decrease in the fair value of such transactions. Income from investments held in rabbi trust accounts was $5.0 million compared to losses of $1.5 million in the prior quarter due to an increase in the fair value of such investments. In the fourth quarter, losses on the sale of commercial and industrial loans totaled $0.1 million, compared to losses of $2.7 million from the prior quarter. Other noninterest income increased $0.8 million in the fourth quarter to $5.6 million. NONINTEREST EXPENSE Noninterest expense, which excludes expenses from discontinued operations, was $121.0 million for the fourth quarter of 2023, compared to $101.7 million in the prior quarter, representing an increase of $19.3 million. Noninterest expense on an operating basis* for the fourth quarter of 2023 was $117.4 million, compared to $98.7 million in the prior quarter, an increase of $18.7 million. The increase in operating noninterest expense* was driven primarily by the $10.8 million special assessment from the FDIC as well as a $4.5 million increase in the operating portion of salaries and employee benefits expense. Salaries and employee benefits expense was $67.8 million, representing an increase of $6.9 million from the prior quarter. The increase was driven primarily by increases in incentive compensation costs and increases in supplemental executive retirement plan benefits expense. Office occupancy and equipment expense was $9.2 million, an increase of $0.6 million from the prior quarter. Data processing expense was $16.8 million, an increase of $3.3 million from the prior quarter, due in part to an increase in M&A related data processing costs of $1.4 million. Professional services expense was $4.1 million in the fourth quarter, a decrease of $3.0 million from the prior quarter, primarily due to a decrease in M&A related professional services costs of $3.2 million. Marketing expense was $2.7 million, an increase of $0.9 million from the prior quarter. Loan expenses were $1.2 million, an increase of $0.1 million from the prior quarter. Federal Deposit Insurance Corporation (“FDIC”) insurance expense was $13.5 million, an increase of $10.7 million from the prior quarter due to the special assessment charged by the FDIC to recover the loss to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of certain banks in 2023. Other noninterest expense was $5.3 million, a decrease of $0.1 million from the prior quarter. INCOME TAXES The income tax expense for the fourth quarter was $2.3 million. The lower than expected tax expense in the fourth quarter of 2023 was primarily a result of a tax planning strategy to recognize a net state tax benefit of $9.2 million primarily due to capital losses resulting from the securities sale in the first quarter of 2023. ASSET QUALITY The allowance for loan losses was $149.0 million at December 31, 2023, or 1.07% of total loans, compared to $155.1 million, or 1.12% of total loans, at September 30, 2023. During the fourth quarter of 2023, the Company recorded total net charge-offs of $11.4 million, or 0.32% of average total loans on an annualized basis, compared to $0.1 million or less than 0.01% of average total loans in the prior quarter, respectively. The increase in total net charge-offs in the fourth quarter was primarily due to partial charge-offs of two credits secured by investor commercial real estate office properties, each of which had previously been placed on non-accrual and were reserved for during the third quarter. The Company recorded a provision for loan losses totaling $5.2 million in the fourth quarter of 2023 due primarily to increases in specific reserves on commercial loans. Non-performing loans totaled $52.6 million at December 31, 2023 compared to $47.5 million at the end of the prior quarter. Please refer to the investor presentation for a review of the Company’s office-related commercial real estate exposure. DIVIDENDS AND SHARE REPURCHASES The Company’s Board of Directors has declared a quarterly cash dividend of $0.11 per common share. The dividend will be payable on March 15, 2024 to shareholders of record as of the close of business on March 1, 2024. The Company did not repurchase any shares of its common stock during the fourth quarter of 2023. CONFERENCE CALL AND PRESENTATION INFORMATION A conference call and webcast covering Eastern’s fourth quarter 2023 earnings will be held on Friday, January 26, 2024 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (888) 259-6580 from within the U.S. and reference conference ID 61093108. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A presentation providing additional information for the quarter is also available at investor.easternbank.com. A replay of the webcast will be made available on demand on this site. ABOUT EASTERN BANKSHARES, INC. Eastern Bankshares, Inc. is the stock holding company for Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 120 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of December 31, 2023, Eastern Bank had approximately $21 billion in total assets. Eastern provides a full range of banking and wealth management solutions for consumers and businesses of all sizes, and takes pride in its outspoken advocacy and community support that includes $240 million in charitable giving since 1994. An inclusive company, Eastern is comprised of deeply committed professionals who value relationships with their customers, colleagues, and communities. For investor information, visit investor.easternbank.com. NON-GAAP FINANCIAL MEASURES *Denotes a non-GAAP financial measure used in this press release. A non-GAAP financial measure is defined as a numerical measure of the Company’s historical or future financial performance, financial position or cash flows that excludes (or includes) amounts, or is subject to adjustments that have the effect of excluding (or including) amounts that are included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) in the Company’s statement of income, balance sheet or statement of cash flows (or equivalent statements). The Company presents non-GAAP financial measures, which management uses to evaluate the Company’s performance, and which exclude the effects of certain transactions that management believes are unrelated to its core business and are therefore not necessarily indicative of its current performance or financial position. Management believes excluding these items facilitates greater visibility for investors into the Company’s core business as well as underlying trends that may, to some extent, be obscured by inclusion of such items in the corresponding GAAP financial measures. Except as otherwise indicated, these non-GAAP financial measures presented in this press release exclude discontinued operations. There are items in the Company’s financial statements that impact its financial results, but which management believes are unrelated to the Company’s core business. Accordingly, the Company presents noninterest income on an operating basis, total operating revenue, noninterest expense on an operating basis, operating net income, operating earnings per share, operating return on average assets, operating return on average shareholders’ equity, operating return on average tangible shareholders’ equity (discussed further below), and the operating efficiency ratio. Each of these figures excludes the impact of such applicable items because management believes such exclusion can provide greater visibility into the Company’s core business and underlying trends. Such items that management does not consider to be core to the Company’s business include (i) income and expenses from investments held in rabbi trusts, (ii) gains and losses on sales of securities available for sale, net, (iii) gains and losses on the sale of other assets, (iv) rabbi trust employee benefits, (v) impairment charges on tax credit investments and associated tax credit benefits, (vi) other real estate owned (“OREO”) gains, (vii) merger and acquisition expenses, (viii) the non-cash pension settlement charge recognized related to the Defined Benefit Plan, (ix) certain discrete tax items, and (x) net income from discontinued operations. The Company does not provide an outlook for its total noninterest income and total noninterest expense because each contains income or expense components, as applicable, such as income associated with rabbi trust accounts and rabbi trust employee benefit expense, which are market-driven, and over which the Company cannot exercise control. Accordingly, reconciliations of the Company’s outlook for its noninterest income on an operating basis and its noninterest expense on an operating basis to an outlook for total noninterest income and total noninterest expense, respectively, cannot be made available without unreasonable effort. Management also presents tangible assets, tangible shareholders’ equity, average tangible shareholders’ equity, tangible book value per share, the ratio of tangible shareholders’ equity to tangible assets including the impact of mark-to-market adjustments on held-to-maturity securities, return on average tangible shareholders’ equity, and operating return on average shareholders’ equity (discussed further above), each of which excludes the impact of goodwill and other intangible assets, as management believes these financial measures provide investors with the ability to further assess the Company’s performance, identify trends in its core business and provide a comparison of its capital adequacy to other companies. The Company included the tangible ratios because management believes that investors may find it useful to have access to the same analytical tools used by management to assess performance and identify trends. These non-GAAP financial measures presented in this press release should not be considered an alternative or substitute for financial results or measures determined in accordance with GAAP or as an indication of the Company’s cash flows from operating activities, a measure of its liquidity position or an indication of funds available for its cash needs. An item which management considers to be non-core and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular period. In addition, management’s methodology for calculating non-GAAP financial measures may differ from the methodologies employed by other banking companies to calculate the same or similar performance measures, and accordingly, the Company’s reported non-GAAP financial measures may not be comparable to the same or similar performance measures reported by other banking companies. Please refer to Appendices A-E for reconciliations of the Company's GAAP financial measures to the non-GAAP financial measures in this press release. FORWARD-LOOKING STATEMENTS This press release contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target”, “outlook” and similar expressions. Forward-looking statements, by their nature, are subject to risks and uncertainties. There are many factors that could cause actual results to differ materially from expected results described in the forward-looking statements. Certain factors that could cause actual results to differ materially from expected results include; adverse developments in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for loan losses; increased competitive pressures; changes in interest rates and resulting changes in competitor or customer behavior, mix or costs of sources of funding, and deposit amounts and composition; risks associated with the Company’s completion and/or implementation of the merger with Cambridge, including risks that required regulatory, shareholder or other approvals for the merger are not obtained or other closing conditions are not satisfied in a timely manner or at all and that the merger fails to occur in the timeframe expected or at all; prior to the completion of the merger or thereafter, Cambridge or the Company may not perform as expected due to transaction-related uncertainty or other factors; and revenue or expense synergies may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; adverse national or regional economic conditions or conditions within the securities markets or banking sector; legislative and regulatory changes and related compliance costs that could adversely affect the business in which the Company and its subsidiary Eastern Bank are engaged, including the effect of, and changes in, monetary and fiscal policies and laws, such as the interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations, including inflationary or recessionary pressures, interest rate sensitivity, liquidity constraints, increased borrowing and funding costs, and fluctuations due to actual or anticipated changes to federal tax laws; the realizability of deferred tax assets; the Company’s ability to successfully implement its risk mitigation strategies; asset and credit quality deterioration, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; and operational risks such as cybersecurity incidents, natural disasters, and pandemics, including COVID-19. For further discussion of such factors, please see the Company’s most recent Annual Report on Form 10-K and subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”), including the joint proxy statement/prospectus (as defined below), which are available on the SEC’s website at www.sec.gov. You should not place undue reliance on forward-looking statements, which reflect the Company's expectations only as of the date of this press release. The Company does not undertake any obligation to update forward-looking statements. ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed merger transaction, on January 16, 2024, the Company filed with the SEC a Registration Statement on Form S-4 and a Joint Proxy Statement of the Company and Cambridge and a Prospectus of the Company (the “joint proxy statement/prospectus”), as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF THE COMPANY AND CAMBRIDGE ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION AND EACH OTHER RELEVANT DOCUMENT FILED WITH THE SEC, AS WELL AS ANY AMENDMENT OR SUPPLEMENT TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about the Company and Cambridge, can be obtained without charge, at the SEC’s website (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to the Company’s Investor Relations team via email at InvestorRelations@easternbank.com or by telephone at (781) 598-7920, or to Cambridge Investor Relations via email at InvestorRelations@cambridgetrust.com or by telephone at (617) 520-5520. PARTICIPANTS IN THE SOLICITATION The Company, Cambridge, and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of the Company and/or Cambridge in connection with the proposed transaction under the rules of the SEC. Information regarding the Company’s directors and executive officers is available in its definitive proxy statement relating to its 2023 Annual Meeting of Shareholders, which was filed with the SEC on April 3, 2023, and its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Commission on February 24, 2023, and other documents filed by the Company with the SEC. Information regarding Cambridge’s directors and executive officers is available in its definitive proxy statement relating to its 2023 Annual Meeting of Shareholders, which was filed with the SEC on March 16, 2023, the joint proxy statement/prospectus and other documents filed by Cambridge with the SEC. Information regarding the participants in the proxy solicitation and a description of their interests included in the joint proxy statement/prospectus and other relevant materials filed with the SEC may be obtained free of charge as described in the preceding paragraph. EASTERN BANKSHARES, INC. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS Certain information in this press release is presented as reviewed by the Company’s management and includes information derived from the Company’s Consolidated Statements of Income, non-GAAP financial measures, and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of and for the three months ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Earnings data Net interest income $ 133,307 $ 137,205 $ 141,588 $ 138,309 $ 149,994 Noninterest income (loss) 26,739 19,157 26,204 (309,853 ) 22,425 Total revenue 160,046 156,362 167,792 (171,544 ) 172,419 Noninterest expense 121,029 101,748 99,934 95,891 112,583 Pre-tax, pre-provision income (loss) 39,017 54,614 67,858 (267,435 ) 59,836 Provision for allowance for loan losses 5,198 7,328 7,501 25 10,880 Pre-tax income (loss) 33,819 47,286 60,357 (267,460 ) 48,956 Net income (loss) from continuing operations 31,509 63,464 44,419 (202,081 ) 40,918 Net income (loss) from discontinued operations 286,994 (4,351 ) 4,238 7,985 1,376 Net income (loss) 318,503 59,113 48,657 (194,096 ) 42,294 Operating net income (non-GAAP) 16,875 52,085 41,092 53,134 48,570 Per-share data Earnings (losses) per share, diluted $ 1.95 $ 0.36 $ 0.30 $ (1.20 ) $ 0.26 Continuing operations $ 0.19 $ 0.39 $ 0.27 $ (1.25 ) $ 0.25 Discontinued operations $ 1.76 $ (0.03 ) $ 0.03 $ 0.05 $ 0.01 Operating earnings per share, diluted (non-GAAP) $ 0.10 $ 0.32 $ 0.25 $ 0.33 $ 0.30 Book value per share $ 16.86 $ 13.87 $ 14.33 $ 14.63 $ 14.03 Tangible book value per share (non-GAAP) $ 13.65 $ 10.14 $ 10.59 $ 10.88 $ 10.28 Profitability Return on average assets (2) 0.59 % 1.18 % 0.81 % (3.64 )% 0.73 % Operating return on average assets (non-GAAP) (2) 0.31 % 0.97 % 0.75 % 0.95 % 0.86 % Return on average shareholders' equity (2) 4.66 % 9.91 % 6.85 % (33.31 )% 6.71 % Operating return on average shareholders' equity (2) 2.51 % 8.14 % 6.34 % 8.76 % 7.96 % Return on average tangible shareholders' equity (non-GAAP) (2) 5.99 % 13.38 % 9.19 % (45.55 )% 9.23 % Operating return on average tangible shareholders' equity (non-GAAP) (2) 3.20 % 10.99 % 8.50 % 11.98 % 10.95 % Net interest margin (FTE) (2) 2.69 % 2.77 % 2.80 % 2.66 % 2.81 % Cost of deposits (2) 1.51 % 1.33 % 1.22 % 0.92 % 0.37 % Efficiency ratio 75.62 % 65.07 % 59.56 % (55.90 )% 65.30 % Operating efficiency ratio (non-GAAP) 73.59 % 60.83 % 58.47 % 57.97 % 57.26 % Balance Sheet (end of period) Total assets $ 21,133,278 $ 21,146,292 $ 21,583,493 $ 22,720,530 $ 22,646,858 Total loans 13,973,428 13,919,275 13,961,878 13,675,250 13,575,531 Total deposits 17,596,217 17,424,169 18,180,972 18,541,580 18,974,359 Total loans / total deposits 79 % 80 % 77 % 74 % 72 % Asset quality Allowance for loan losses ("ALLL") $ 148,993 $ 155,146 $ 147,955 $ 140,938 $ 142,211 ALLL / total nonperforming loans ("NPLs") 283.49 % 326.86 % 484.18 % 407.65 % 368.38 % Total NPLs / total loans 0.38 % 0.34 % 0.22 % 0.25 % 0.28 % Net charge-offs ("NCOs") / average total loans (2) 0.32 % 0.00 % 0.01 % 0.00 % 0.01 % Capital adequacy Shareholders' equity / assets 14.08 % 11.57 % 11.71 % 11.35 % 10.91 % Tangible shareholders' equity / tangible assets (non-GAAP) 11.71 % 8.73 % 8.93 % 8.70 % 8.24 % (1) Average assets, average shareholders' equity and average tangible shareholders' equity components presented in this table include discontinued operations. (2) Presented on an annualized basis. EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of Dec 31, 2023 change from (Unaudited, dollars in thousands) Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 Sep 30, 2023 Dec 31, 2022 ASSETS △ $ △ % △ $ △ % Cash and due from banks $ 87,233 $ 72,689 $ 106,040 $ 14,544 20 % $ (18,807 ) (18 )% Short-term investments 605,843 536,119 63,465 69,724 13 % 542,378 855 % Cash and cash equivalents 693,076 608,808 169,505 84,268 14 % 523,571 309 % Available for sale ("AFS") securities 4,407,521 4,261,518 6,690,778 146,003 3 % (2,283,257 ) (34 )% Held to maturity ("HTM") securities 449,721 455,900 476,647 (6,179 ) (1 )% (26,926 ) (6 )% Total securities 4,857,242 4,717,418 7,167,425 139,824 3 % (2,310,183 ) (32 )% Loans held for sale 1,124 23,892 4,543 (22,768 ) (95 )% (3,419 ) (75 )% Loans: Commercial and industrial 3,034,068 3,087,509 3,150,946 (53,441 ) (2 )% (116,878 ) (4 )% Commercial real estate 5,457,349 5,396,912 5,155,323 60,437 1 % 302,026 6 % Commercial construction 386,999 382,615 336,276 4,384 1 % 50,723 15 % Business banking 1,085,763 1,087,799 1,090,492 (2,036 ) — % (4,729 ) — % Total commercial loans 9,964,179 9,954,835 9,733,037 9,344 — % 231,142 2 % Residential real estate 2,565,485 2,550,861 2,460,849 14,624 1 % 104,636 4 % Consumer home equity 1,208,231 1,193,859 1,187,547 14,372 1 % 20,684 2 % Other consumer 235,533 219,720 194,098 15,813 7 % 41,435 21 % Total loans 13,973,428 13,919,275 13,575,531 54,153 — % 397,897 3 % Allowance for loan losses (148,993 ) (155,146 ) (142,211 ) 6,153 (4 )% (6,782 ) 5 % Unamortized prem./disc. and def. fees (25,068 ) (19,307 ) (13,003 ) (5,761 ) 30 % (12,065 ) 93 % Net loans 13,799,367 13,744,822 13,420,317 54,545 — % 379,050 3 % Federal Home Loan Bank stock, at cost 5,904 37,125 41,363 (31,221 ) (84 )% (35,459 ) (86 )% Premises and equipment 60,133 59,033 62,493 1,100 2 % (2,360 ) (4 )% Bank-owned life insurance 164,702 163,700 160,790 1,002 1 % 3,912 2 % Goodwill and other intangibles, net 566,205 566,709 568,009 (504 ) — % (1,804 ) — % Deferred income taxes, net 266,185 416,081 331,963 (149,896 ) (36 )% (65,778 ) (20 )% Prepaid expenses 183,073 156,113 165,368 26,960 17 % 17,705 11 % Other assets 536,267 527,873 426,863 8,394 2 % 109,404 26 % Assets of discontinued operations — 124,718 128,219 (124,718 ) (100 )% (128,219 ) (100 )% Total assets $ 21,133,278 $ 21,146,292 $ 22,646,858 $ (13,014 ) — % $ (1,513,580 ) (7 )% LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand $ 5,162,218 $ 5,177,015 $ 6,240,637 $ (14,797 ) — % $ (1,078,419 ) (17 )% Interest checking accounts 3,737,361 3,671,871 4,568,122 65,490 2 % (830,761 ) (18 )% Savings accounts 1,323,126 1,393,545 1,831,123 (70,419 ) (5 )% (507,997 ) (28 )% Money market investment 4,664,475 4,709,149 4,710,095 (44,674 ) (1 )% (45,620 ) (1 )% Certificates of deposit 2,709,037 2,472,589 1,624,382 236,448 10 % 1,084,655 67 % Total deposits 17,596,217 17,424,169 18,974,359 172,048 1 % (1,378,142 ) (7 )% Borrowed funds: Federal Home Loan Bank advances 17,738 673,525 704,084 (655,787 ) (97 )% (686,346 ) (97 )% Escrow deposits of borrowers 21,978 24,947 22,314 (2,969 ) (12 )% (336 ) (2 )% Interest rate swap collateral funds 8,500 16,900 14,430 (8,400 ) (50 )% (5,930 ) (41 )% Total borrowed funds 48,216 715,372 740,828 (667,156 ) (93 )% (692,612 ) (93 )% Other liabilities 513,990 525,378 424,951 (11,388 ) (2 )% 89,039 21 % Liabilities of discontinued operations — 34,820 34,930 (34,820 ) (100 )% (34,930 ) (100 )% Total liabilities 18,158,423 18,699,739 20,175,068 (541,316 ) (3 )% (2,016,645 ) (10 )% Shareholders' equity: Common shares 1,767 1,766 1,762 1 — % 5 — % Additional paid-in capital 1,666,441 1,661,136 1,649,141 5,305 — % 17,300 1 % Unallocated common shares held by the employee stock ownership plan ("ESOP") (132,755 ) (133,992 ) (137,696 ) 1,237 (1 )% 4,941 (4 )% Retained earnings 2,047,754 1,747,225 1,881,775 300,529 17 % 165,979 9 % Accumulated other comprehensive income ("AOCI"), net of tax (608,352 ) (829,582 ) (923,192 ) 221,230 (27 )% 314,840 (34 )% Total shareholders' equity 2,974,855 2,446,553 2,471,790 528,302 22 % 503,065 20 % Total liabilities and shareholders' equity $ 21,133,278 $ 21,146,292 $ 22,646,858 $ (13,014 ) — % $ (1,513,580 ) (7 )% EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Three months ended Three months ended Dec 31, 2023 change from three months ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 Sep 30, 2023 Dec 31, 2022 Interest and dividend income: △ $ △ % △ $ △ % Interest and fees on loans $ 168,419 $ 169,274 $ 142,446 $ (855 ) (1 )% $ 25,973 18 % Taxable interest and dividends on securities 23,782 24,191 30,413 (409 ) (2 )% (6,631 ) (22 )% Non-taxable interest and dividends on securities 1,434 1,434 1,594 — — % (160 ) (10 )% Interest on federal funds sold and other short-term investments 10,011 7,269 545 2,742 38 % 9,466 1737 % Total interest and dividend income 203,646 202,168 174,998 1,478 1 % 28,648 16 % Interest expense: Interest on deposits 67,389 59,607 17,457 7,782 13 % 49,932 286 % Interest on borrowings 2,950 5,356 7,547 (2,406 ) (45 )% (4,597 ) (61 )% Total interest expense 70,339 64,963 25,004 5,376 8 % 45,335 181 % Net interest income 133,307 137,205 149,994 (3,898 ) (3 )% (16,687 ) (11 )% Provision for allowance for loan losses 5,198 7,328 10,880 (2,130 ) (29 )% (5,682 ) (52 )% Net interest income after provision for allowance for loan losses 128,109 129,877 139,114 (1,768 ) (1 )% (11,005 ) (8 )% Noninterest income: Service charges on deposit accounts 7,514 7,403 6,834 111 1 % 680 10 % Trust and investment advisory fees 6,128 6,235 5,626 (107 ) (2 )% 502 9 % Debit card processing fees 3,398 3,388 3,227 10 — % 171 5 % Interest rate swap (losses) income (576 ) 1,695 (78 ) (2,271 ) (134 )% (498 ) 638 % Income (losses) from investments held in rabbi trusts 4,969 (1,523 ) 3,235 6,492 (426 )% 1,734 54 % Losses on sales of commercial and industrial loans (87 ) (2,651 ) — 2,564 (97 )% (87 ) — % (Losses) gains on sales of mortgage loans held for sale, net (219 ) (164 ) 8 (55 ) 34 % (227 ) (2838 )% Losses on sales of securities available for sale, net — — (683 ) — — % 683 (100 )% Other 5,612 4,774 4,256 838 18 % 1,356 32 % Total noninterest income 26,739 19,157 22,425 7,582 40 % 4,314 19 % Noninterest expense: Salaries and employee benefits 67,773 60,898 61,572 6,875 11 % 6,201 10 % Office occupancy and equipment 9,195 8,641 8,641 554 6 % 554 6 % Data processing 16,753 13,443 13,227 3,310 25 % 3,526 27 % Professional services 4,108 7,125 4,295 (3,017 ) (42 )% (187 ) (4 )% Marketing expenses 2,693 1,765 3,032 928 53 % (339 ) (11 )% Loan expenses 1,174 1,082 627 92 9 % 547 87 % Federal Deposit Insurance Corporation ("FDIC") insurance 13,486 2,808 1,540 10,678 380 % 11,946 776 % Amortization of intangible assets 505 504 299 1 — % 206 69 % Other 5,342 5,482 19,350 (140 ) (3 )% (14,008 ) (72 )% Total noninterest expense 121,029 101,748 112,583 19,281 19 % 8,446 8 % Income before income tax expense 33,819 47,286 48,956 (13,467 ) (28 )% (15,137 ) (31 )% Income tax expense (benefit) 2,310 (16,178 ) 8,038 18,488 (114 )% (5,728 ) (71 )% Net income from continuing operations $ 31,509 $ 63,464 $ 40,918 $ (31,955 ) (50 )% $ (9,409 ) (23 )% Net income (loss) from discontinued operations $ 286,994 $ (4,351 ) $ 1,376 $ 291,345 (6696 )% $ 285,618 20757 % Net income $ 318,503 $ 59,113 $ 42,294 $ 259,390 439 % $ 276,209 653 % Share data: Weighted average common shares outstanding, basic 162,571,066 162,370,469 162,032,522 200,597 0 % 538,544 0 % Weighted average common shares outstanding, diluted 162,724,398 162,469,887 162,263,547 254,511 0 % 460,851 0 % Earnings (loss) per share, basic: Continuing operations $ 0.19 $ 0.39 $ 0.25 $ (0.20 ) (51 )% $ (0.06 ) (24 )% Discontinued operations $ 1.77 $ (0.03 ) $ 0.01 $ 1.80 (6000 )% $ 1.76 17600 % Earnings per share, basic $ 1.96 $ 0.36 $ 0.26 $ 1.60 444 % $ 1.70 654 % Earnings (loss) per share, diluted: Continuing operations $ 0.19 $ 0.39 $ 0.25 $ (0.20 ) (51 )% $ (0.06 ) (24 )% Discontinued operations $ 1.76 $ (0.03 ) $ 0.01 $ 1.79 (5967 )% $ 1.75 17500 % Earnings per share, diluted $ 1.95 $ 0.36 $ 0.26 $ 1.59 442 % $ 1.69 650 % EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Twelve months ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Dec 31, 2022 Change Interest and dividend income: △ $ △ % Interest and fees on loans $ 652,095 $ 476,041 $ 176,054 37 % Taxable interest and dividends on securities 101,233 118,690 (17,457 ) (15 )% Non-taxable interest and dividends on securities 5,736 7,179 (1,443 ) (20 )% Interest on federal funds sold and other short-term investments 37,395 3,271 34,124 1043 % Total interest and dividend income 796,459 605,181 191,278 32 % Interest expense: Interest on deposits 226,075 28,621 197,454 690 % Interest on borrowings 19,975 8,506 11,469 135 % Total interest expense 246,050 37,127 208,923 563 % Net interest income 550,409 568,054 (17,645 ) (3 )% Provision for allowance for loan losses 20,052 17,925 2,127 12 % Net interest income after provision for allowance for loan losses 530,357 550,129 (19,772 ) (4 )% Noninterest income: Service charges on deposit accounts 28,631 30,392 (1,761 ) (6 )% Trust and investment advisory fees 24,264 23,593 671 3 % Debit card processing fees 13,469 12,644 825 7 % Interest rate swap income 1,536 6,009 (4,473 ) (74 )% Income (losses) from investments held in rabbi trusts 9,305 (10,762 ) 20,067 (186 )% Losses on sales of commercial and industrial loans (2,738 ) — (2,738 ) — % (Losses) gains on sales of mortgage loans held for sale, net (507 ) 248 (755 ) (304 )% Losses on sales of securities available for sale, net (333,170 ) (3,157 ) (330,013 ) 10453 % Other 21,457 17,783 3,674 21 % Total noninterest (loss) income (237,753 ) 76,750 (314,503 ) (410 )% Noninterest expense: Salaries and employee benefits 253,037 233,097 19,940 9 % Office occupancy and equipment 35,992 37,445 (1,453 ) (4 )% Data processing 55,308 52,938 2,370 4 % Professional services 17,385 15,805 1,580 10 % Marketing expenses 7,592 9,294 (1,702 ) (18 )% Loan expenses 4,466 6,384 (1,918 ) (30 )% Federal Deposit Insurance Corporation ("FDIC") insurance 21,874 6,250 15,624 250 % Amortization of intangible assets 1,804 1,198 606 51 % Other 21,144 26,238 (5,094 ) (19 )% Total noninterest expense 418,602 388,649 29,953 8 % (Loss) income before income tax expense (125,998 ) 238,230 (364,228 ) (153 )% Income tax (benefit) expense (63,309 ) 51,719 (115,028 ) (222 )% Net (loss) income from continuing operations (62,689 ) 186,511 (249,200 ) (134 )% Net income from discontinued operations 294,866 13,248 281,618 2126 % Net income $ 232,177 $ 199,759 $ 32,418 16 % Share data: Weighted average common shares outstanding, basic 162,293,020 165,510,357 (3,217,337 ) (2 )% Weighted average common shares outstanding, diluted 162,403,097 165,648,571 (3,245,474 ) (2 )% Earnings (loss) per share, basic: Continuing operations $ (0.39 ) $ 1.13 $ (1.52 ) (135 )% Discontinued operations $ 1.82 $ 0.08 $ 1.74 2175 % Earnings per share, basic $ 1.43 $ 1.21 $ 0.22 18 % Earnings (loss) per share, diluted: Continuing operations $ (0.39 ) $ 1.13 $ (1.52 ) (135 )% Discontinued operations $ 1.82 $ 0.08 $ 1.74 2175 % Earnings per share, diluted $ 1.43 $ 1.21 $ 0.22 18 % EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS As of and for the three months ended Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Avg. Balance Interest Yield / Cost (5) Avg. Balance Interest Yield / Cost (5) Avg. Balance Interest Yield / Cost (5) Interest-earning assets: Loans (1): Commercial $ 9,978,154 $ 126,128 5.01 % $ 9,988,712 $ 128,051 5.09 % $ 9,528,386 $ 108,015 4.50 % Residential 2,573,032 23,546 3.63 % 2,553,150 22,988 3.57 % 2,313,810 18,837 3.23 % Consumer 1,411,374 22,835 6.42 % 1,386,350 22,227 6.36 % 1,363,858 18,949 5.51 % Total loans 13,962,560 172,509 4.90 % 13,928,212 173,266 4.94 % 13,206,054 145,801 4.38 % Investment securities 5,670,742 25,609 1.79 % 5,777,173 26,009 1.79 % 8,422,385 32,432 1.53 % Federal funds sold and other short-term investments 720,384 10,011 5.51 % 537,602 7,269 5.36 % 63,408 545 3.41 % Total interest-earning assets 20,353,686 208,129 4.06 % 20,242,987 206,544 4.05 % 21,691,847 178,778 3.27 % Non-interest-earning assets 834,391 1,033,879 653,158 Total assets $ 21,188,077 $ 21,276,866 $ 22,345,005 Interest-bearing liabilities: Deposits: Savings $ 1,352,239 $ 45 0.01 % $ 1,441,636 $ 43 0.01 % $ 1,924,840 $ 57 0.01 % Interest checking 3,753,352 7,080 0.75 % 3,903,062 6,302 0.64 % 4,871,089 4,897 0.40 % Money market 4,735,917 29,390 2.46 % 4,836,895 27,695 2.27 % 4,778,694 9,919 0.82 % Time deposits 2,656,313 30,874 4.61 % 2,341,684 25,567 4.33 % 563,735 2,584 1.82 % Total interest-bearing deposits 12,497,821 67,389 2.14 % 12,523,277 59,607 1.89 % 12,138,358 17,457 0.57 % Borrowings 242,437 2,950 4.83 % 414,252 5,356 5.13 % 795,527 7,547 3.76 % Total interest-bearing liabilities 12,740,258 70,339 2.19 % 12,937,529 64,963 1.99 % 12,933,885 25,004 0.77 % Demand deposit accounts 5,210,185 5,257,704 6,495,817 Other noninterest-bearing liabilities 555,034 541,827 495,129 Total liabilities 18,505,477 18,737,060 19,924,831 Shareholders' equity 2,682,600 2,539,806 2,420,174 Total liabilities and shareholders' equity $ 21,188,077 $ 21,276,866 $ 22,345,005 Net interest income - FTE $ 137,790 $ 141,581 $ 153,774 Net interest rate spread (2) 1.87 % 2.06 % 2.50 % Net interest-earning assets (3) $ 7,613,428 $ 7,305,458 $ 8,757,962 Net interest margin - FTE (4) 2.69 % 2.77 % 2.81 % (1) Includes non-accrual loans. (2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (4) Net interest margin - FTE represents fully-taxable equivalent net interest income* divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income. (5) Presented on an annualized basis. EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS As of and for the twelve months ended Dec 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Avg. Balance Interest Yield / Cost Avg. Balance Interest Yield / Cost Interest-earning assets: Loans (1): Commercial $ 9,913,968 $ 491,427 4.96 % $ 9,147,540 $ 366,097 4.00 % Residential 2,538,588 90,139 3.55 % 2,064,609 63,803 3.09 % Consumer 1,381,745 86,167 6.24 % 1,327,417 56,965 4.29 % Total loans 13,834,301 667,733 4.83 % 12,539,566 486,865 3.88 % Non-taxable investment securities 197,682 7,279 3.68 % 253,651 9,091 3.58 % Taxable investment securities 6,050,024 101,233 1.67 % 8,413,217 118,690 1.41 % Total investment securities 6,247,706 108,512 1.74 % 8,666,868 127,781 1.47 % Federal funds sold and other short-term investments 720,864 37,395 5.19 % 420,834 3,271 0.78 % Total interest-earning assets 20,802,871 813,640 3.91 % 21,627,268 617,917 2.86 % Non-interest-earning assets 921,622 986,865 Total assets $ 21,724,493 $ 22,614,133 Interest-bearing liabilities: Deposits: Savings $ 1,515,713 $ 217 0.01 % $ 2,015,651 $ 209 0.01 % Interest checking 4,070,585 24,235 0.60 % 4,890,709 11,675 0.24 % Money market 4,918,343 104,002 2.11 % 5,057,445 13,479 0.27 % Time deposits 2,303,520 97,621 4.24 % 463,261 3,258 0.70 % Total interest-bearing deposits 12,808,161 226,075 1.77 % 12,427,066 28,621 0.23 % Borrowings 418,884 19,975 4.77 % 256,632 8,506 3.31 % Total interest-bearing liabilities 13,227,045 246,050 1.86 % 12,683,698 37,127 0.29 % Demand deposit accounts 5,404,208 6,647,518 Other noninterest-bearing liabilities 522,239 451,384 Total liabilities 19,153,492 19,782,600 Shareholders' equity 2,571,001 2,831,533 Total liabilities and shareholders' equity $ 21,724,493 $ 22,614,133 Net interest income - FTE $ 567,590 $ 580,790 Net interest rate spread (2) 2.05 % 2.57 % Net interest-earning assets (3) $ 7,575,826 $ 8,943,570 Net interest margin - FTE (4) 2.73 % 2.69 % (1) Includes non-accrual loans. (2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (4) Net interest margin - FTE represents fully-taxable equivalent net interest income* divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income. EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - NON-PERFORMING ASSETS (1) As of Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Non-accrual loans: Commercial $ 35,107 $ 31,703 $ 14,178 $ 17,271 $ 21,474 Residential 8,725 8,075 8,796 9,603 9,750 Consumer 8,725 7,687 7,584 7,699 7,380 Total non-accrual loans 52,557 47,465 30,558 34,573 38,604 Total accruing loans past due 90 days or more: — — — — — Total non-performing loans 52,557 47,465 30,558 34,573 38,604 Other real estate owned — — — — — Other non-performing assets: — — — — — Total non-performing assets (1) $ 52,557 $ 47,465 $ 30,558 $ 34,573 $ 38,604 Total accruing troubled debt restructured ("TDR") (2) $ — $ — $ — $ — $ 28,834 Total non-performing loans to total loans 0.38 % 0.34 % 0.22 % 0.25 % 0.28 % Total non-performing assets to total assets 0.25 % 0.22 % 0.14 % 0.15 % 0.17 % (1) Non-performing assets are comprised of NPLs, other real estate owned ("OREO"), and non-performing securities. NPLs consist of non-accrual loans and loans that are more than 90 days past due but still accruing interest. OREO consists of real estate properties, which primarily serve as collateral to secure the Company’s loans, that it controls due to foreclosure or acceptance of a deed in lieu of foreclosure. (2) The Company adopted ASU 2022-02 on January 1, 2023 which eliminated the TDR recognition and measurement guidance. Accordingly, the Company had no TDRs to report as of March 31, 2023 and subsequent periods. EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE-OFFS (RECOVERIES) Three months ended Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Average total loans $ 13,961,061 $ 13,926,194 $ 13,803,292 $ 13,633,165 $ 13,203,450 Allowance for loan losses, beginning of the period 155,146 147,955 140,938 142,211 131,663 Total cumulative effect of change in accounting principle (1): — — — (1,143 ) — Charged-off loans: Commercial and industrial 2 11 — — 256 Commercial real estate 8,008 — — — — Commercial construction — — — — — Business banking 3,745 303 254 343 370 Residential real estate — — — — — Consumer home equity — — — 7 1 Other consumer 536 731 591 561 515 Total charged-off loans 12,291 1,045 845 911 1,142 Recoveries on loans previously charged-off: Commercial and industrial 11 120 26 139 248 Commercial real estate 190 2 2 4 38 Commercial construction — — — — — Business banking 573 609 204 481 391 Residential real estate 34 30 18 15 14 Consumer home equity 1 39 — 1 8 Other consumer 131 108 111 116 111 Total recoveries 940 908 361 756 810 Net loans charged-off (recoveries): Commercial and industrial (9 ) (109 ) (26 ) (139 ) 8 Commercial real estate 7,818 (2 ) (2 ) (4 ) (38 ) Commercial construction — — — — — Business banking 3,172 (306 ) 50 (138 ) (21 ) Residential real estate (34 ) (30 ) (18 ) (15 ) (14 ) Consumer home equity (1 ) (39 ) — 6 (7 ) Other consumer 405 623 480 445 404 Total net loans charged-off 11,351 137 484 155 332 Provision for allowance for loan losses 5,198 7,328 7,501 25 10,880 Total allowance for loan losses, end of period $ 148,993 $ 155,146 $ 147,955 $ 140,938 $ 142,211 Net charge-offs to average total loans outstanding during this period (2) 0.32 % 0.00 % 0.01 % 0.00 % 0.01 % Allowance for loan losses as a percent of total loans 1.07 % 1.12 % 1.06 % 1.03 % 1.05 % Allowance for loan losses as a percent of nonperforming loans 283.49 % 326.86 % 484.18 % 407.65 % 368.38 % (1) For the quarter ended March 31, 2023, represents the adjustment needed to reflect the cumulative day one impact pursuant to the Company’s adoption of ASU 2022-02 (i.e., cumulative effect adjustment related to the adoption of ASU 2022-02 as of January 1, 2023). The adjustment represents a $1.1 million decrease to the allowance attributable to the change in accounting methodology for estimating the allowance for loan losses resulting from the Company’s adoption of the standard. (2) Presented on an annualized basis. APPENDIX A: Reconciliation of Non-GAAP Earnings Metrics (1) For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of and for the Three Months Ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Net income (loss) from continuing operations (GAAP) $ 31,509 $ 63,464 $ 44,419 $ (202,081 ) $ 40,918 Add: Noninterest income components: (Income) losses from investments held in rabbi trusts (4,969 ) 1,523 (3,002 ) (2,857 ) (3,235 ) Losses on sales of securities available for sale, net — — — 333,170 683 (Gains) losses on sales of other assets — (2 ) — 5 10 Noninterest expense components: Rabbi trust employee benefit expense (income) 1,740 (586 ) 1,314 1,274 1,103 Merger and acquisition expenses 1,865 3,630 — — — Defined Benefit Plan settlement loss — — — — 12,045 Total impact of non-GAAP adjustments (1,364 ) 4,565 (1,688 ) 331,592 10,606 Less net tax benefit associated with non-GAAP adjustments (2) 13,270 15,944 1,639 76,377 2,954 Non-GAAP adjustments, net of tax $ (14,634 ) $ (11,379 ) $ (3,327 ) $ 255,215 $ 7,652 Operating net income (non-GAAP) $ 16,875 $ 52,085 $ 41,092 $ 53,134 $ 48,570 Weighted average common shares outstanding during the period: Basic 162,571,066 162,370,469 162,232,236 161,991,373 162,032,522 Diluted 162,724,398 162,469,887 162,246,675 162,059,431 162,263,547 Earnings (losses) per share from continuing operations, basic: $ 0.19 $ 0.39 $ 0.27 $ (1.25 ) $ 0.25 Earnings (losses) per share from continuing operations, diluted: $ 0.19 $ 0.39 $ 0.27 $ (1.25 ) $ 0.25 Operating earnings per share, basic (non-GAAP) $ 0.10 $ 0.32 $ 0.25 $ 0.33 $ 0.30 Operating earnings per share, diluted (non-GAAP) $ 0.10 $ 0.32 $ 0.25 $ 0.33 $ 0.30 Return on average assets (3) 0.59 % 1.18 % 0.81 % (3.64 )% 0.73 % Add: (Income) losses from investments held in rabbi trusts (3) (0.09 )% 0.03 % (0.05 )% (0.05 )% (0.06 )% Losses on sales of securities available for sale, net (3) 0.00 % 0.00 % 0.00 % 6.00 % 0.01 % (Gains) losses on sales of other assets (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Rabbi trust employee benefit expense (income) (3) 0.03 % (0.01 )% 0.02 % 0.02 % 0.02 % Merger and acquisition expenses (3) 0.03 % 0.07 % 0.00 % 0.00 % 0.00 % Defined Benefit Plan settlement loss (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.21 % Less net tax benefit associated with non-GAAP adjustments (2) (3) 0.25 % 0.30 % 0.03 % 1.38 % 0.05 % Operating return on average assets (non-GAAP) (3) 0.31 % 0.97 % 0.75 % 0.95 % 0.86 % Return on average shareholders' equity (3) 4.66 % 9.91 % 6.85 % (33.31 )% 6.71 % Add: (Income) losses from investments held in rabbi trusts (3) (0.73 )% 0.24 % (0.46 )% (0.47 )% (0.53 )% Losses on sales of securities available for sale, net (3) 0.00 % 0.00 % 0.00 % 54.92 % 0.11 % (Gains) losses on sales of other assets (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Rabbi trust employee benefit expense (income) (3) 0.26 % (0.09 )% 0.20 % 0.21 % 0.18 % Merger and acquisition expenses (3) 0.28 % 0.57 % 0.00 % 0.00 % 0.00 % Defined Benefit Plan settlement loss (3) 0.00 % 0.00 % 0.00 % 0.00 % 1.97 % Less net tax benefit associated with non-GAAP adjustments (2) (3) 1.96 % 2.49 % 0.25 % 12.59 % 0.48 % Operating return on average shareholders' equity (non-GAAP) (3) 2.51 % 8.14 % 6.34 % 8.76 % 7.96 % Average tangible shareholders' equity: Average total shareholders' equity (GAAP) $ 2,682,600 $ 2,539,806 $ 2,599,325 $ 2,460,170 $ 2,420,174 Less: Average goodwill and other intangibles 597,234 658,591 659,825 660,795 661,841 Average tangible shareholders' equity (non-GAAP) $ 2,085,366 $ 1,881,215 $ 1,939,500 $ 1,799,375 $ 1,758,333 Return on average tangible shareholders' equity (non-GAAP) (3) 5.99 % 13.38 % 9.19 % (45.55 )% 9.23 % Add: (Income) losses from investments held in rabbi trusts (3) (0.95 )% 0.32 % (0.62 )% (0.64 )% (0.73 )% Losses on sales of securities available for sale, net (3) 0.00 % 0.00 % 0.00 % 75.09 % 0.15 % (Gains) losses on sales of other assets (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Rabbi trust employee benefit expense (income) (3) 0.33 % (0.12 )% 0.27 % 0.29 % 0.25 % Merger and acquisition expenses (3) 0.35 % 0.77 % 0.00 % 0.00 % 0.00 % Defined Benefit Plan settlement loss (3) 0.00 % 0.00 % 0.00 % 0.00 % 2.72 % Less net tax benefit associated with non-GAAP adjustments (2) (3) 2.52 % 3.36 % 0.34 % 17.21 % 0.67 % Operating return on average tangible shareholders' equity (non-GAAP) (3) 3.20 % 10.99 % 8.50 % 11.98 % 10.95 % (1) Average assets, average shareholders' equity, average goodwill and other intangibles, and average tangible shareholders' equity components presented in this table include discontinued operations. (2) The net tax benefit (expense) associated with these items is generally determined by assessing whether each item is included or excluded from net taxable income and applying our combined statutory tax rate only to those items included in net taxable income. The net tax benefit for the three months ended December 31, 2023 was primarily due to the tax benefit from state tax strategies associated with the utilization of capital losses as a result of the sale of securities in the first quarter of 2023, described further below. Upon the sale of securities in the first quarter of 2023, we established a valuation allowance of $17.4 million, as it was determined at that time that it was not more-likely-than-not that the entirety of the deferred tax asset related to the loss on such securities would be realized. Included in that $17.4 million was $2.8 million in expected lost state tax benefits. Following the execution of the sale of our insurance agency business in October 2023 and the resulting capital gain, coupled with tax planning strategies, a state tax benefit of $13.6 million was realized on the security sale losses. (3) Presented on an annualized basis. APPENDIX B: Reconciliation of Non-GAAP Operating Revenues and Expenses For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." Three Months Ended Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Net interest income (GAAP) $ 133,307 $ 137,205 $ 141,588 $ 138,309 $ 149,994 Add: Tax-equivalent adjustment (non-GAAP) (1) 4,483 4,376 3,877 4,445 3,780 Fully-taxable equivalent net interest income (non-GAAP) $ 137,790 $ 141,581 $ 145,465 $ 142,754 $ 153,774 Noninterest income (loss) (GAAP) $ 26,739 $ 19,157 $ 26,204 $ (309,853 ) $ 22,425 Less: Income (losses) from investments held in rabbi trusts 4,969 (1,523 ) 3,002 2,857 3,235 Losses on sales of securities available for sale, net — — — (333,170 ) (683 ) Gains (losses) on sales of other assets — 2 — (5 ) (10 ) Noninterest income on an operating basis (non-GAAP) $ 21,770 $ 20,678 $ 23,202 $ 20,465 $ 19,883 Noninterest expense (GAAP) $ 121,029 $ 101,748 $ 99,934 $ 95,891 $ 112,583 Less: Rabbi trust employee benefit expense (income) 1,740 (586 ) 1,314 1,274 1,103 Merger and acquisition expenses 1,865 3,630 — — — Defined Benefit Plan settlement loss — — — — 12,045 Noninterest expense on an operating basis (non-GAAP) $ 117,424 $ 98,704 $ 98,620 $ 94,617 $ 99,435 Total revenue (loss) (GAAP) $ 160,046 $ 156,362 $ 167,792 $ (171,544 ) $ 172,419 Total operating revenue (non-GAAP) $ 159,560 $ 162,259 $ 168,667 $ 163,219 $ 173,657 Efficiency ratio (GAAP) 75.62 % 65.07 % 59.56 % (55.90 )% 65.30 % Operating efficiency ratio (non-GAAP) 73.59 % 60.83 % 58.47 % 57.97 % 57.26 % (1) Interest income on tax-exempt loans and investment securities has been adjusted to a FTE basis using a marginal tax rate of 21.9%, 21.7%, 21.8%, 21.7%, and 21.6% for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively. APPENDIX C: Reconciliation of Non-GAAP Capital Metrics For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands, except per-share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 2,974,855 $ 2,446,553 $ 2,526,772 $ 2,579,123 $ 2,471,790 Less: Goodwill and other intangibles (1) 566,205 657,824 658,993 660,165 661,126 Tangible shareholders' equity (non-GAAP) 2,408,650 1,788,729 1,867,779 1,918,958 1,810,664 Tangible assets: Total assets (GAAP) 21,133,278 21,146,292 21,583,493 22,720,530 22,646,858 Less: Goodwill and other intangibles (1) 566,205 657,824 658,993 660,165 661,126 Tangible assets (non-GAAP) $ 20,567,073 $ 20,488,468 $ 20,924,500 $ 22,060,365 $ 21,985,732 Shareholders' equity to assets ratio (GAAP) 14.08 % 11.57 % 11.71 % 11.35 % 10.91 % Tangible shareholders' equity to tangible assets ratio (non-GAAP) 11.71 % 8.73 % 8.93 % 8.70 % 8.24 % Common shares outstanding 176,426,993 176,376,675 176,376,675 176,328,426 176,172,073 Book value per share (GAAP) $ 16.86 $ 13.87 $ 14.33 $ 14.63 $ 14.03 Tangible book value per share (non-GAAP) $ 13.65 $ 10.14 $ 10.59 $ 10.88 $ 10.28 (1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023 and preceding periods. APPENDIX D: Tangible Shareholders’ Equity Roll Forward Analysis For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of Change from Dec 31, 2023 Sep 30, 2023 Sep 30, 2023 (Unaudited, dollars in thousands, except per-share data) Common stock $ 1,767 $ 1,766 $ 1 Additional paid in capital 1,666,441 1,661,136 5,305 Unallocated ESOP common stock (132,755 ) (133,992 ) 1,237 Retained earnings 2,047,754 1,747,225 300,529 AOCI, net of tax - available for sale securities (584,243 ) (763,871 ) 179,628 AOCI, net of tax - pension 7,462 6,021 1,441 AOCI, net of tax - cash flow hedge (31,571 ) (71,732 ) 40,161 Total shareholders' equity: $ 2,974,855 $ 2,446,553 $ 528,302 Less: Goodwill and other intangibles (1) 566,205 657,824 (91,619 ) Tangible shareholders' equity (non-GAAP) $ 2,408,650 $ 1,788,729 $ 619,921 Common shares outstanding 176,426,993 176,376,675 50,318 Per share: Common stock $ 0.01 $ 0.01 $ — Additional paid in capital 9.45 9.42 0.03 Unallocated ESOP common stock (0.75 ) (0.76 ) 0.01 Retained earnings 11.61 9.91 1.70 AOCI, net of tax - available for sale securities (3.31 ) (4.33 ) 1.02 AOCI, net of tax - pension 0.04 0.03 0.01 AOCI, net of tax - cash flow hedge (0.18 ) (0.41 ) 0.23 Total shareholders' equity: $ 16.86 $ 13.87 $ 2.99 Less: Goodwill and other intangibles (1) 3.21 3.73 (0.52 ) Tangible shareholders' equity (non-GAAP) $ 13.65 $ 10.14 $ 3.51 (1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023. View source version on businesswire.com: https://www.businesswire.com/news/home/20240125436910/en/Contacts Investor Contact Jillian Belliveau Eastern Bankshares, Inc. InvestorRelations@easternbank.com 781-598-7920 Media Contact Andrea Goodman Eastern Bank a.goodman@easternbank.com 781-598-7847 Data & News supplied by www.cloudquote.io Stock quotes supplied by Barchart Quotes delayed at least 20 minutes. By accessing this page, you agree to the following Privacy Policy and Terms and Conditions.
Eastern Bankshares, Inc. Reports Fourth Quarter 2023 Financial Results By: Eastern Bank via Business Wire January 25, 2024 at 16:15 PM EST ~ Earnings, Capital, and Liquidity Enhancements Resulting from Eastern Insurance Group LLC Asset Sale ~ ~ Growth in Core Deposits and Reduction in Wholesale Funding ~ Eastern Bankshares, Inc. (the “Company,” or together with its subsidiaries, “Eastern”) (NASDAQ Global Select Market: EBC), the stock holding company of Eastern Bank, today announced its 2023 fourth quarter financial results and the declaration of a quarterly cash dividend. On October 31, 2023, the Company completed the sale of the insurance operations of Eastern Insurance Group, LLC (“Eastern Insurance”), to Arthur J. Gallagher & Co. (“Gallagher”) for gross consideration of $515 million (“the insurance transaction”). The company recorded an after-tax gain of $294.5 million which is included in the fourth quarter results. The insurance transaction significantly improved the capital and funding position of the Company and will allow the Company to focus on the growth and strategic initiatives of its core banking business, including its pending merger with Cambridge Bancorp (“Cambridge”) (“the merger”), which was previously announced on September 19, 2023. The merger is expected to close early in the second quarter of 2024, subject to regulatory and shareholder approvals as previously disclosed. "2023 was a year of strategic repositioning for Eastern,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “We realized early in 2023 that all banks were going to face significant challenges due to higher interest rates, changing customer deposit preferences and a very difficult macroeconomic environment. We responded by repositioning our securities portfolio in the first quarter, which allowed us to improve both our liquidity and earnings outlook, and followed with the sale of Eastern Insurance in the second half of the year to capitalize on the valuation premium it commanded. The insurance transaction provided us additional liquidity and capital, and positioned us to announce our merger with Cambridge Bancorp, a highly attractive in-market merger partner with a valuable wealth management business. We are very confident that these transactions provide us with a greater financial foundation, stronger earnings for our shareholders, and a leading market share in our footprint. The upcoming merger is the next step in our journey and we all look forward to welcoming the colleagues and customers of Cambridge Trust to Eastern.” FINANCIAL HIGHLIGHTS FOR THE FOURTH QUARTER OF 2023 Completed the sale of Eastern Insurance to Gallagher for cash consideration of $515 million and for an after-tax gain of $294.5 million. Net income of $318.5 million, or $1.95 per diluted share, compared to net income of $59.1 million, or $0.36 per diluted share, for the prior quarter. Operating net income*, which excludes the revenues, expenses, and tax provision of discontinued operations, of $16.9 million, or $0.10 per diluted share. Operating net income* includes a $10.8 million special assessment from the Federal Deposit Insurance Corporation (“FDIC”). Total deposits increased $172.0 million from the prior quarter, to $17.6 billion. Core deposits, which exclude brokered deposits, increased $516.2 million or 3.0% from the prior quarter. Total loans increased $54.2 million from the prior quarter, to $14.0 billion. The net interest margin on a fully tax equivalent (“FTE”) basis* of 2.69% was 8 basis points lower than the prior quarter but trend is stabilizing. Borrowings and brokered deposits of less than 1% of total assets as of December 31, 2023. Annualized net charge-offs ("NCOs") of 0.32% in the fourth quarter and 0.09% for full year 2023 and nonperforming loans ("NPLs") of $52.6 million, or 0.38% of total loans as of December 31, 2023. BALANCE SHEET Total assets were $21.1 billion at December 31, 2023, essentially unchanged from September 30, 2023. Cash and equivalents increased $84.3 million from the prior quarter to $693.1 million. Total securities increased $139.8 million, or 3%, from the prior quarter, to $4.9 billion, due to an increase in the market value of available for sale securities, partially offset by principal runoff. Loans totaled $14.0 billion, representing an increase of $54.2 million, or 0.4%, from the prior quarter. Deposits totaled $17.6 billion, representing an increase of $172.0 million, or 1.0%, from the prior quarter, driven primarily by an increase of $516.2 million, or 3.0%, in core deposits. This was partially offset by a decrease of $344.1 million in brokered deposits. Borrowed funds decreased $667.2 million from the prior quarter to $48.2 million in the fourth quarter, as a combination of strong core deposit trends and the proceeds from the insurance transaction allowed for the paydown of Federal Home Loan Bank (“FHLB”) borrowings. Shareholders’ equity was $3.0 billion, representing an increase of $528.3 million from the prior quarter primarily driven by increases in retained earnings and accumulated other comprehensive income. The increase in retained earnings was primarily due to the net gain on sale resulting from the insurance transaction. At December 31, 2023, book value per share was $16.86 and tangible book value per share* was $13.65. Please refer to Appendix D to this press release for a roll-forward of tangible shareholders’ equity*. NET INTEREST INCOME Net interest income was $133.3 million for the fourth quarter of 2023, compared to $137.2 million in the prior quarter, representing a decrease of $3.9 million. The decrease in net interest income on a consecutive quarter basis was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs. The net interest margin on a FTE basis* was 2.69% for the fourth quarter, representing an 8 basis point decrease from the prior quarter. Total interest-earning asset yields increased 1 basis point from the prior quarter to 4.06%, due to increased residential loan, consumer loan and short-term investment yields as a result of higher interest rates throughout the quarter, partially offset by decreased commercial loan yield. The prior quarter’s commercial loan yield benefited from $2.6 million in commercial loan interest recoveries. Total interest-bearing liabilities cost increased 20 basis points from the prior quarter to 2.19%, due primarily to higher deposit costs resulting from deposit pricing increases and deposit mix shifts. The net interest margin for the fourth quarter included a partial quarter benefit from the proceeds of the insurance transaction, which was completed on October 31, 2023. The proceeds, in part, allowed the Company to reduce brokered deposits and borrowings to less than 1% of total assets. NONINTEREST INCOME Noninterest income, which excludes revenues from discontinued operations, was $26.7 million for the fourth quarter of 2023, compared to $19.2 million for the prior quarter, representing an increase of $7.6 million. Noninterest income on an operating basis* was $21.8 million for the fourth quarter of 2023, compared to $20.7 million for the prior quarter, an increase of $1.1 million. Service charges on deposit accounts increased $0.1 million on a consecutive quarter basis to $7.5 million. Trust and investment advisory fees decreased $0.1 million on a consecutive quarter basis to $6.1 million. Debit card processing fees were unchanged at $3.4 million in the fourth quarter. Loan-level interest rate swap income decreased $2.3 million from the prior quarter to a loss of $0.6 million. The decrease was driven primarily by a decrease in the fair value of such transactions. Income from investments held in rabbi trust accounts was $5.0 million compared to losses of $1.5 million in the prior quarter due to an increase in the fair value of such investments. In the fourth quarter, losses on the sale of commercial and industrial loans totaled $0.1 million, compared to losses of $2.7 million from the prior quarter. Other noninterest income increased $0.8 million in the fourth quarter to $5.6 million. NONINTEREST EXPENSE Noninterest expense, which excludes expenses from discontinued operations, was $121.0 million for the fourth quarter of 2023, compared to $101.7 million in the prior quarter, representing an increase of $19.3 million. Noninterest expense on an operating basis* for the fourth quarter of 2023 was $117.4 million, compared to $98.7 million in the prior quarter, an increase of $18.7 million. The increase in operating noninterest expense* was driven primarily by the $10.8 million special assessment from the FDIC as well as a $4.5 million increase in the operating portion of salaries and employee benefits expense. Salaries and employee benefits expense was $67.8 million, representing an increase of $6.9 million from the prior quarter. The increase was driven primarily by increases in incentive compensation costs and increases in supplemental executive retirement plan benefits expense. Office occupancy and equipment expense was $9.2 million, an increase of $0.6 million from the prior quarter. Data processing expense was $16.8 million, an increase of $3.3 million from the prior quarter, due in part to an increase in M&A related data processing costs of $1.4 million. Professional services expense was $4.1 million in the fourth quarter, a decrease of $3.0 million from the prior quarter, primarily due to a decrease in M&A related professional services costs of $3.2 million. Marketing expense was $2.7 million, an increase of $0.9 million from the prior quarter. Loan expenses were $1.2 million, an increase of $0.1 million from the prior quarter. Federal Deposit Insurance Corporation (“FDIC”) insurance expense was $13.5 million, an increase of $10.7 million from the prior quarter due to the special assessment charged by the FDIC to recover the loss to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of certain banks in 2023. Other noninterest expense was $5.3 million, a decrease of $0.1 million from the prior quarter. INCOME TAXES The income tax expense for the fourth quarter was $2.3 million. The lower than expected tax expense in the fourth quarter of 2023 was primarily a result of a tax planning strategy to recognize a net state tax benefit of $9.2 million primarily due to capital losses resulting from the securities sale in the first quarter of 2023. ASSET QUALITY The allowance for loan losses was $149.0 million at December 31, 2023, or 1.07% of total loans, compared to $155.1 million, or 1.12% of total loans, at September 30, 2023. During the fourth quarter of 2023, the Company recorded total net charge-offs of $11.4 million, or 0.32% of average total loans on an annualized basis, compared to $0.1 million or less than 0.01% of average total loans in the prior quarter, respectively. The increase in total net charge-offs in the fourth quarter was primarily due to partial charge-offs of two credits secured by investor commercial real estate office properties, each of which had previously been placed on non-accrual and were reserved for during the third quarter. The Company recorded a provision for loan losses totaling $5.2 million in the fourth quarter of 2023 due primarily to increases in specific reserves on commercial loans. Non-performing loans totaled $52.6 million at December 31, 2023 compared to $47.5 million at the end of the prior quarter. Please refer to the investor presentation for a review of the Company’s office-related commercial real estate exposure. DIVIDENDS AND SHARE REPURCHASES The Company’s Board of Directors has declared a quarterly cash dividend of $0.11 per common share. The dividend will be payable on March 15, 2024 to shareholders of record as of the close of business on March 1, 2024. The Company did not repurchase any shares of its common stock during the fourth quarter of 2023. CONFERENCE CALL AND PRESENTATION INFORMATION A conference call and webcast covering Eastern’s fourth quarter 2023 earnings will be held on Friday, January 26, 2024 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (888) 259-6580 from within the U.S. and reference conference ID 61093108. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A presentation providing additional information for the quarter is also available at investor.easternbank.com. A replay of the webcast will be made available on demand on this site. ABOUT EASTERN BANKSHARES, INC. Eastern Bankshares, Inc. is the stock holding company for Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 120 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of December 31, 2023, Eastern Bank had approximately $21 billion in total assets. Eastern provides a full range of banking and wealth management solutions for consumers and businesses of all sizes, and takes pride in its outspoken advocacy and community support that includes $240 million in charitable giving since 1994. An inclusive company, Eastern is comprised of deeply committed professionals who value relationships with their customers, colleagues, and communities. For investor information, visit investor.easternbank.com. NON-GAAP FINANCIAL MEASURES *Denotes a non-GAAP financial measure used in this press release. A non-GAAP financial measure is defined as a numerical measure of the Company’s historical or future financial performance, financial position or cash flows that excludes (or includes) amounts, or is subject to adjustments that have the effect of excluding (or including) amounts that are included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) in the Company’s statement of income, balance sheet or statement of cash flows (or equivalent statements). The Company presents non-GAAP financial measures, which management uses to evaluate the Company’s performance, and which exclude the effects of certain transactions that management believes are unrelated to its core business and are therefore not necessarily indicative of its current performance or financial position. Management believes excluding these items facilitates greater visibility for investors into the Company’s core business as well as underlying trends that may, to some extent, be obscured by inclusion of such items in the corresponding GAAP financial measures. Except as otherwise indicated, these non-GAAP financial measures presented in this press release exclude discontinued operations. There are items in the Company’s financial statements that impact its financial results, but which management believes are unrelated to the Company’s core business. Accordingly, the Company presents noninterest income on an operating basis, total operating revenue, noninterest expense on an operating basis, operating net income, operating earnings per share, operating return on average assets, operating return on average shareholders’ equity, operating return on average tangible shareholders’ equity (discussed further below), and the operating efficiency ratio. Each of these figures excludes the impact of such applicable items because management believes such exclusion can provide greater visibility into the Company’s core business and underlying trends. Such items that management does not consider to be core to the Company’s business include (i) income and expenses from investments held in rabbi trusts, (ii) gains and losses on sales of securities available for sale, net, (iii) gains and losses on the sale of other assets, (iv) rabbi trust employee benefits, (v) impairment charges on tax credit investments and associated tax credit benefits, (vi) other real estate owned (“OREO”) gains, (vii) merger and acquisition expenses, (viii) the non-cash pension settlement charge recognized related to the Defined Benefit Plan, (ix) certain discrete tax items, and (x) net income from discontinued operations. The Company does not provide an outlook for its total noninterest income and total noninterest expense because each contains income or expense components, as applicable, such as income associated with rabbi trust accounts and rabbi trust employee benefit expense, which are market-driven, and over which the Company cannot exercise control. Accordingly, reconciliations of the Company’s outlook for its noninterest income on an operating basis and its noninterest expense on an operating basis to an outlook for total noninterest income and total noninterest expense, respectively, cannot be made available without unreasonable effort. Management also presents tangible assets, tangible shareholders’ equity, average tangible shareholders’ equity, tangible book value per share, the ratio of tangible shareholders’ equity to tangible assets including the impact of mark-to-market adjustments on held-to-maturity securities, return on average tangible shareholders’ equity, and operating return on average shareholders’ equity (discussed further above), each of which excludes the impact of goodwill and other intangible assets, as management believes these financial measures provide investors with the ability to further assess the Company’s performance, identify trends in its core business and provide a comparison of its capital adequacy to other companies. The Company included the tangible ratios because management believes that investors may find it useful to have access to the same analytical tools used by management to assess performance and identify trends. These non-GAAP financial measures presented in this press release should not be considered an alternative or substitute for financial results or measures determined in accordance with GAAP or as an indication of the Company’s cash flows from operating activities, a measure of its liquidity position or an indication of funds available for its cash needs. An item which management considers to be non-core and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular period. In addition, management’s methodology for calculating non-GAAP financial measures may differ from the methodologies employed by other banking companies to calculate the same or similar performance measures, and accordingly, the Company’s reported non-GAAP financial measures may not be comparable to the same or similar performance measures reported by other banking companies. Please refer to Appendices A-E for reconciliations of the Company's GAAP financial measures to the non-GAAP financial measures in this press release. FORWARD-LOOKING STATEMENTS This press release contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target”, “outlook” and similar expressions. Forward-looking statements, by their nature, are subject to risks and uncertainties. There are many factors that could cause actual results to differ materially from expected results described in the forward-looking statements. Certain factors that could cause actual results to differ materially from expected results include; adverse developments in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for loan losses; increased competitive pressures; changes in interest rates and resulting changes in competitor or customer behavior, mix or costs of sources of funding, and deposit amounts and composition; risks associated with the Company’s completion and/or implementation of the merger with Cambridge, including risks that required regulatory, shareholder or other approvals for the merger are not obtained or other closing conditions are not satisfied in a timely manner or at all and that the merger fails to occur in the timeframe expected or at all; prior to the completion of the merger or thereafter, Cambridge or the Company may not perform as expected due to transaction-related uncertainty or other factors; and revenue or expense synergies may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; adverse national or regional economic conditions or conditions within the securities markets or banking sector; legislative and regulatory changes and related compliance costs that could adversely affect the business in which the Company and its subsidiary Eastern Bank are engaged, including the effect of, and changes in, monetary and fiscal policies and laws, such as the interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations, including inflationary or recessionary pressures, interest rate sensitivity, liquidity constraints, increased borrowing and funding costs, and fluctuations due to actual or anticipated changes to federal tax laws; the realizability of deferred tax assets; the Company’s ability to successfully implement its risk mitigation strategies; asset and credit quality deterioration, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; and operational risks such as cybersecurity incidents, natural disasters, and pandemics, including COVID-19. For further discussion of such factors, please see the Company’s most recent Annual Report on Form 10-K and subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”), including the joint proxy statement/prospectus (as defined below), which are available on the SEC’s website at www.sec.gov. You should not place undue reliance on forward-looking statements, which reflect the Company's expectations only as of the date of this press release. The Company does not undertake any obligation to update forward-looking statements. ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed merger transaction, on January 16, 2024, the Company filed with the SEC a Registration Statement on Form S-4 and a Joint Proxy Statement of the Company and Cambridge and a Prospectus of the Company (the “joint proxy statement/prospectus”), as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF THE COMPANY AND CAMBRIDGE ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION AND EACH OTHER RELEVANT DOCUMENT FILED WITH THE SEC, AS WELL AS ANY AMENDMENT OR SUPPLEMENT TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about the Company and Cambridge, can be obtained without charge, at the SEC’s website (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to the Company’s Investor Relations team via email at InvestorRelations@easternbank.com or by telephone at (781) 598-7920, or to Cambridge Investor Relations via email at InvestorRelations@cambridgetrust.com or by telephone at (617) 520-5520. PARTICIPANTS IN THE SOLICITATION The Company, Cambridge, and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of the Company and/or Cambridge in connection with the proposed transaction under the rules of the SEC. Information regarding the Company’s directors and executive officers is available in its definitive proxy statement relating to its 2023 Annual Meeting of Shareholders, which was filed with the SEC on April 3, 2023, and its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Commission on February 24, 2023, and other documents filed by the Company with the SEC. Information regarding Cambridge’s directors and executive officers is available in its definitive proxy statement relating to its 2023 Annual Meeting of Shareholders, which was filed with the SEC on March 16, 2023, the joint proxy statement/prospectus and other documents filed by Cambridge with the SEC. Information regarding the participants in the proxy solicitation and a description of their interests included in the joint proxy statement/prospectus and other relevant materials filed with the SEC may be obtained free of charge as described in the preceding paragraph. EASTERN BANKSHARES, INC. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS Certain information in this press release is presented as reviewed by the Company’s management and includes information derived from the Company’s Consolidated Statements of Income, non-GAAP financial measures, and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of and for the three months ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Earnings data Net interest income $ 133,307 $ 137,205 $ 141,588 $ 138,309 $ 149,994 Noninterest income (loss) 26,739 19,157 26,204 (309,853 ) 22,425 Total revenue 160,046 156,362 167,792 (171,544 ) 172,419 Noninterest expense 121,029 101,748 99,934 95,891 112,583 Pre-tax, pre-provision income (loss) 39,017 54,614 67,858 (267,435 ) 59,836 Provision for allowance for loan losses 5,198 7,328 7,501 25 10,880 Pre-tax income (loss) 33,819 47,286 60,357 (267,460 ) 48,956 Net income (loss) from continuing operations 31,509 63,464 44,419 (202,081 ) 40,918 Net income (loss) from discontinued operations 286,994 (4,351 ) 4,238 7,985 1,376 Net income (loss) 318,503 59,113 48,657 (194,096 ) 42,294 Operating net income (non-GAAP) 16,875 52,085 41,092 53,134 48,570 Per-share data Earnings (losses) per share, diluted $ 1.95 $ 0.36 $ 0.30 $ (1.20 ) $ 0.26 Continuing operations $ 0.19 $ 0.39 $ 0.27 $ (1.25 ) $ 0.25 Discontinued operations $ 1.76 $ (0.03 ) $ 0.03 $ 0.05 $ 0.01 Operating earnings per share, diluted (non-GAAP) $ 0.10 $ 0.32 $ 0.25 $ 0.33 $ 0.30 Book value per share $ 16.86 $ 13.87 $ 14.33 $ 14.63 $ 14.03 Tangible book value per share (non-GAAP) $ 13.65 $ 10.14 $ 10.59 $ 10.88 $ 10.28 Profitability Return on average assets (2) 0.59 % 1.18 % 0.81 % (3.64 )% 0.73 % Operating return on average assets (non-GAAP) (2) 0.31 % 0.97 % 0.75 % 0.95 % 0.86 % Return on average shareholders' equity (2) 4.66 % 9.91 % 6.85 % (33.31 )% 6.71 % Operating return on average shareholders' equity (2) 2.51 % 8.14 % 6.34 % 8.76 % 7.96 % Return on average tangible shareholders' equity (non-GAAP) (2) 5.99 % 13.38 % 9.19 % (45.55 )% 9.23 % Operating return on average tangible shareholders' equity (non-GAAP) (2) 3.20 % 10.99 % 8.50 % 11.98 % 10.95 % Net interest margin (FTE) (2) 2.69 % 2.77 % 2.80 % 2.66 % 2.81 % Cost of deposits (2) 1.51 % 1.33 % 1.22 % 0.92 % 0.37 % Efficiency ratio 75.62 % 65.07 % 59.56 % (55.90 )% 65.30 % Operating efficiency ratio (non-GAAP) 73.59 % 60.83 % 58.47 % 57.97 % 57.26 % Balance Sheet (end of period) Total assets $ 21,133,278 $ 21,146,292 $ 21,583,493 $ 22,720,530 $ 22,646,858 Total loans 13,973,428 13,919,275 13,961,878 13,675,250 13,575,531 Total deposits 17,596,217 17,424,169 18,180,972 18,541,580 18,974,359 Total loans / total deposits 79 % 80 % 77 % 74 % 72 % Asset quality Allowance for loan losses ("ALLL") $ 148,993 $ 155,146 $ 147,955 $ 140,938 $ 142,211 ALLL / total nonperforming loans ("NPLs") 283.49 % 326.86 % 484.18 % 407.65 % 368.38 % Total NPLs / total loans 0.38 % 0.34 % 0.22 % 0.25 % 0.28 % Net charge-offs ("NCOs") / average total loans (2) 0.32 % 0.00 % 0.01 % 0.00 % 0.01 % Capital adequacy Shareholders' equity / assets 14.08 % 11.57 % 11.71 % 11.35 % 10.91 % Tangible shareholders' equity / tangible assets (non-GAAP) 11.71 % 8.73 % 8.93 % 8.70 % 8.24 % (1) Average assets, average shareholders' equity and average tangible shareholders' equity components presented in this table include discontinued operations. (2) Presented on an annualized basis. EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of Dec 31, 2023 change from (Unaudited, dollars in thousands) Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 Sep 30, 2023 Dec 31, 2022 ASSETS △ $ △ % △ $ △ % Cash and due from banks $ 87,233 $ 72,689 $ 106,040 $ 14,544 20 % $ (18,807 ) (18 )% Short-term investments 605,843 536,119 63,465 69,724 13 % 542,378 855 % Cash and cash equivalents 693,076 608,808 169,505 84,268 14 % 523,571 309 % Available for sale ("AFS") securities 4,407,521 4,261,518 6,690,778 146,003 3 % (2,283,257 ) (34 )% Held to maturity ("HTM") securities 449,721 455,900 476,647 (6,179 ) (1 )% (26,926 ) (6 )% Total securities 4,857,242 4,717,418 7,167,425 139,824 3 % (2,310,183 ) (32 )% Loans held for sale 1,124 23,892 4,543 (22,768 ) (95 )% (3,419 ) (75 )% Loans: Commercial and industrial 3,034,068 3,087,509 3,150,946 (53,441 ) (2 )% (116,878 ) (4 )% Commercial real estate 5,457,349 5,396,912 5,155,323 60,437 1 % 302,026 6 % Commercial construction 386,999 382,615 336,276 4,384 1 % 50,723 15 % Business banking 1,085,763 1,087,799 1,090,492 (2,036 ) — % (4,729 ) — % Total commercial loans 9,964,179 9,954,835 9,733,037 9,344 — % 231,142 2 % Residential real estate 2,565,485 2,550,861 2,460,849 14,624 1 % 104,636 4 % Consumer home equity 1,208,231 1,193,859 1,187,547 14,372 1 % 20,684 2 % Other consumer 235,533 219,720 194,098 15,813 7 % 41,435 21 % Total loans 13,973,428 13,919,275 13,575,531 54,153 — % 397,897 3 % Allowance for loan losses (148,993 ) (155,146 ) (142,211 ) 6,153 (4 )% (6,782 ) 5 % Unamortized prem./disc. and def. fees (25,068 ) (19,307 ) (13,003 ) (5,761 ) 30 % (12,065 ) 93 % Net loans 13,799,367 13,744,822 13,420,317 54,545 — % 379,050 3 % Federal Home Loan Bank stock, at cost 5,904 37,125 41,363 (31,221 ) (84 )% (35,459 ) (86 )% Premises and equipment 60,133 59,033 62,493 1,100 2 % (2,360 ) (4 )% Bank-owned life insurance 164,702 163,700 160,790 1,002 1 % 3,912 2 % Goodwill and other intangibles, net 566,205 566,709 568,009 (504 ) — % (1,804 ) — % Deferred income taxes, net 266,185 416,081 331,963 (149,896 ) (36 )% (65,778 ) (20 )% Prepaid expenses 183,073 156,113 165,368 26,960 17 % 17,705 11 % Other assets 536,267 527,873 426,863 8,394 2 % 109,404 26 % Assets of discontinued operations — 124,718 128,219 (124,718 ) (100 )% (128,219 ) (100 )% Total assets $ 21,133,278 $ 21,146,292 $ 22,646,858 $ (13,014 ) — % $ (1,513,580 ) (7 )% LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand $ 5,162,218 $ 5,177,015 $ 6,240,637 $ (14,797 ) — % $ (1,078,419 ) (17 )% Interest checking accounts 3,737,361 3,671,871 4,568,122 65,490 2 % (830,761 ) (18 )% Savings accounts 1,323,126 1,393,545 1,831,123 (70,419 ) (5 )% (507,997 ) (28 )% Money market investment 4,664,475 4,709,149 4,710,095 (44,674 ) (1 )% (45,620 ) (1 )% Certificates of deposit 2,709,037 2,472,589 1,624,382 236,448 10 % 1,084,655 67 % Total deposits 17,596,217 17,424,169 18,974,359 172,048 1 % (1,378,142 ) (7 )% Borrowed funds: Federal Home Loan Bank advances 17,738 673,525 704,084 (655,787 ) (97 )% (686,346 ) (97 )% Escrow deposits of borrowers 21,978 24,947 22,314 (2,969 ) (12 )% (336 ) (2 )% Interest rate swap collateral funds 8,500 16,900 14,430 (8,400 ) (50 )% (5,930 ) (41 )% Total borrowed funds 48,216 715,372 740,828 (667,156 ) (93 )% (692,612 ) (93 )% Other liabilities 513,990 525,378 424,951 (11,388 ) (2 )% 89,039 21 % Liabilities of discontinued operations — 34,820 34,930 (34,820 ) (100 )% (34,930 ) (100 )% Total liabilities 18,158,423 18,699,739 20,175,068 (541,316 ) (3 )% (2,016,645 ) (10 )% Shareholders' equity: Common shares 1,767 1,766 1,762 1 — % 5 — % Additional paid-in capital 1,666,441 1,661,136 1,649,141 5,305 — % 17,300 1 % Unallocated common shares held by the employee stock ownership plan ("ESOP") (132,755 ) (133,992 ) (137,696 ) 1,237 (1 )% 4,941 (4 )% Retained earnings 2,047,754 1,747,225 1,881,775 300,529 17 % 165,979 9 % Accumulated other comprehensive income ("AOCI"), net of tax (608,352 ) (829,582 ) (923,192 ) 221,230 (27 )% 314,840 (34 )% Total shareholders' equity 2,974,855 2,446,553 2,471,790 528,302 22 % 503,065 20 % Total liabilities and shareholders' equity $ 21,133,278 $ 21,146,292 $ 22,646,858 $ (13,014 ) — % $ (1,513,580 ) (7 )% EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Three months ended Three months ended Dec 31, 2023 change from three months ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 Sep 30, 2023 Dec 31, 2022 Interest and dividend income: △ $ △ % △ $ △ % Interest and fees on loans $ 168,419 $ 169,274 $ 142,446 $ (855 ) (1 )% $ 25,973 18 % Taxable interest and dividends on securities 23,782 24,191 30,413 (409 ) (2 )% (6,631 ) (22 )% Non-taxable interest and dividends on securities 1,434 1,434 1,594 — — % (160 ) (10 )% Interest on federal funds sold and other short-term investments 10,011 7,269 545 2,742 38 % 9,466 1737 % Total interest and dividend income 203,646 202,168 174,998 1,478 1 % 28,648 16 % Interest expense: Interest on deposits 67,389 59,607 17,457 7,782 13 % 49,932 286 % Interest on borrowings 2,950 5,356 7,547 (2,406 ) (45 )% (4,597 ) (61 )% Total interest expense 70,339 64,963 25,004 5,376 8 % 45,335 181 % Net interest income 133,307 137,205 149,994 (3,898 ) (3 )% (16,687 ) (11 )% Provision for allowance for loan losses 5,198 7,328 10,880 (2,130 ) (29 )% (5,682 ) (52 )% Net interest income after provision for allowance for loan losses 128,109 129,877 139,114 (1,768 ) (1 )% (11,005 ) (8 )% Noninterest income: Service charges on deposit accounts 7,514 7,403 6,834 111 1 % 680 10 % Trust and investment advisory fees 6,128 6,235 5,626 (107 ) (2 )% 502 9 % Debit card processing fees 3,398 3,388 3,227 10 — % 171 5 % Interest rate swap (losses) income (576 ) 1,695 (78 ) (2,271 ) (134 )% (498 ) 638 % Income (losses) from investments held in rabbi trusts 4,969 (1,523 ) 3,235 6,492 (426 )% 1,734 54 % Losses on sales of commercial and industrial loans (87 ) (2,651 ) — 2,564 (97 )% (87 ) — % (Losses) gains on sales of mortgage loans held for sale, net (219 ) (164 ) 8 (55 ) 34 % (227 ) (2838 )% Losses on sales of securities available for sale, net — — (683 ) — — % 683 (100 )% Other 5,612 4,774 4,256 838 18 % 1,356 32 % Total noninterest income 26,739 19,157 22,425 7,582 40 % 4,314 19 % Noninterest expense: Salaries and employee benefits 67,773 60,898 61,572 6,875 11 % 6,201 10 % Office occupancy and equipment 9,195 8,641 8,641 554 6 % 554 6 % Data processing 16,753 13,443 13,227 3,310 25 % 3,526 27 % Professional services 4,108 7,125 4,295 (3,017 ) (42 )% (187 ) (4 )% Marketing expenses 2,693 1,765 3,032 928 53 % (339 ) (11 )% Loan expenses 1,174 1,082 627 92 9 % 547 87 % Federal Deposit Insurance Corporation ("FDIC") insurance 13,486 2,808 1,540 10,678 380 % 11,946 776 % Amortization of intangible assets 505 504 299 1 — % 206 69 % Other 5,342 5,482 19,350 (140 ) (3 )% (14,008 ) (72 )% Total noninterest expense 121,029 101,748 112,583 19,281 19 % 8,446 8 % Income before income tax expense 33,819 47,286 48,956 (13,467 ) (28 )% (15,137 ) (31 )% Income tax expense (benefit) 2,310 (16,178 ) 8,038 18,488 (114 )% (5,728 ) (71 )% Net income from continuing operations $ 31,509 $ 63,464 $ 40,918 $ (31,955 ) (50 )% $ (9,409 ) (23 )% Net income (loss) from discontinued operations $ 286,994 $ (4,351 ) $ 1,376 $ 291,345 (6696 )% $ 285,618 20757 % Net income $ 318,503 $ 59,113 $ 42,294 $ 259,390 439 % $ 276,209 653 % Share data: Weighted average common shares outstanding, basic 162,571,066 162,370,469 162,032,522 200,597 0 % 538,544 0 % Weighted average common shares outstanding, diluted 162,724,398 162,469,887 162,263,547 254,511 0 % 460,851 0 % Earnings (loss) per share, basic: Continuing operations $ 0.19 $ 0.39 $ 0.25 $ (0.20 ) (51 )% $ (0.06 ) (24 )% Discontinued operations $ 1.77 $ (0.03 ) $ 0.01 $ 1.80 (6000 )% $ 1.76 17600 % Earnings per share, basic $ 1.96 $ 0.36 $ 0.26 $ 1.60 444 % $ 1.70 654 % Earnings (loss) per share, diluted: Continuing operations $ 0.19 $ 0.39 $ 0.25 $ (0.20 ) (51 )% $ (0.06 ) (24 )% Discontinued operations $ 1.76 $ (0.03 ) $ 0.01 $ 1.79 (5967 )% $ 1.75 17500 % Earnings per share, diluted $ 1.95 $ 0.36 $ 0.26 $ 1.59 442 % $ 1.69 650 % EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Twelve months ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Dec 31, 2022 Change Interest and dividend income: △ $ △ % Interest and fees on loans $ 652,095 $ 476,041 $ 176,054 37 % Taxable interest and dividends on securities 101,233 118,690 (17,457 ) (15 )% Non-taxable interest and dividends on securities 5,736 7,179 (1,443 ) (20 )% Interest on federal funds sold and other short-term investments 37,395 3,271 34,124 1043 % Total interest and dividend income 796,459 605,181 191,278 32 % Interest expense: Interest on deposits 226,075 28,621 197,454 690 % Interest on borrowings 19,975 8,506 11,469 135 % Total interest expense 246,050 37,127 208,923 563 % Net interest income 550,409 568,054 (17,645 ) (3 )% Provision for allowance for loan losses 20,052 17,925 2,127 12 % Net interest income after provision for allowance for loan losses 530,357 550,129 (19,772 ) (4 )% Noninterest income: Service charges on deposit accounts 28,631 30,392 (1,761 ) (6 )% Trust and investment advisory fees 24,264 23,593 671 3 % Debit card processing fees 13,469 12,644 825 7 % Interest rate swap income 1,536 6,009 (4,473 ) (74 )% Income (losses) from investments held in rabbi trusts 9,305 (10,762 ) 20,067 (186 )% Losses on sales of commercial and industrial loans (2,738 ) — (2,738 ) — % (Losses) gains on sales of mortgage loans held for sale, net (507 ) 248 (755 ) (304 )% Losses on sales of securities available for sale, net (333,170 ) (3,157 ) (330,013 ) 10453 % Other 21,457 17,783 3,674 21 % Total noninterest (loss) income (237,753 ) 76,750 (314,503 ) (410 )% Noninterest expense: Salaries and employee benefits 253,037 233,097 19,940 9 % Office occupancy and equipment 35,992 37,445 (1,453 ) (4 )% Data processing 55,308 52,938 2,370 4 % Professional services 17,385 15,805 1,580 10 % Marketing expenses 7,592 9,294 (1,702 ) (18 )% Loan expenses 4,466 6,384 (1,918 ) (30 )% Federal Deposit Insurance Corporation ("FDIC") insurance 21,874 6,250 15,624 250 % Amortization of intangible assets 1,804 1,198 606 51 % Other 21,144 26,238 (5,094 ) (19 )% Total noninterest expense 418,602 388,649 29,953 8 % (Loss) income before income tax expense (125,998 ) 238,230 (364,228 ) (153 )% Income tax (benefit) expense (63,309 ) 51,719 (115,028 ) (222 )% Net (loss) income from continuing operations (62,689 ) 186,511 (249,200 ) (134 )% Net income from discontinued operations 294,866 13,248 281,618 2126 % Net income $ 232,177 $ 199,759 $ 32,418 16 % Share data: Weighted average common shares outstanding, basic 162,293,020 165,510,357 (3,217,337 ) (2 )% Weighted average common shares outstanding, diluted 162,403,097 165,648,571 (3,245,474 ) (2 )% Earnings (loss) per share, basic: Continuing operations $ (0.39 ) $ 1.13 $ (1.52 ) (135 )% Discontinued operations $ 1.82 $ 0.08 $ 1.74 2175 % Earnings per share, basic $ 1.43 $ 1.21 $ 0.22 18 % Earnings (loss) per share, diluted: Continuing operations $ (0.39 ) $ 1.13 $ (1.52 ) (135 )% Discontinued operations $ 1.82 $ 0.08 $ 1.74 2175 % Earnings per share, diluted $ 1.43 $ 1.21 $ 0.22 18 % EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS As of and for the three months ended Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Avg. Balance Interest Yield / Cost (5) Avg. Balance Interest Yield / Cost (5) Avg. Balance Interest Yield / Cost (5) Interest-earning assets: Loans (1): Commercial $ 9,978,154 $ 126,128 5.01 % $ 9,988,712 $ 128,051 5.09 % $ 9,528,386 $ 108,015 4.50 % Residential 2,573,032 23,546 3.63 % 2,553,150 22,988 3.57 % 2,313,810 18,837 3.23 % Consumer 1,411,374 22,835 6.42 % 1,386,350 22,227 6.36 % 1,363,858 18,949 5.51 % Total loans 13,962,560 172,509 4.90 % 13,928,212 173,266 4.94 % 13,206,054 145,801 4.38 % Investment securities 5,670,742 25,609 1.79 % 5,777,173 26,009 1.79 % 8,422,385 32,432 1.53 % Federal funds sold and other short-term investments 720,384 10,011 5.51 % 537,602 7,269 5.36 % 63,408 545 3.41 % Total interest-earning assets 20,353,686 208,129 4.06 % 20,242,987 206,544 4.05 % 21,691,847 178,778 3.27 % Non-interest-earning assets 834,391 1,033,879 653,158 Total assets $ 21,188,077 $ 21,276,866 $ 22,345,005 Interest-bearing liabilities: Deposits: Savings $ 1,352,239 $ 45 0.01 % $ 1,441,636 $ 43 0.01 % $ 1,924,840 $ 57 0.01 % Interest checking 3,753,352 7,080 0.75 % 3,903,062 6,302 0.64 % 4,871,089 4,897 0.40 % Money market 4,735,917 29,390 2.46 % 4,836,895 27,695 2.27 % 4,778,694 9,919 0.82 % Time deposits 2,656,313 30,874 4.61 % 2,341,684 25,567 4.33 % 563,735 2,584 1.82 % Total interest-bearing deposits 12,497,821 67,389 2.14 % 12,523,277 59,607 1.89 % 12,138,358 17,457 0.57 % Borrowings 242,437 2,950 4.83 % 414,252 5,356 5.13 % 795,527 7,547 3.76 % Total interest-bearing liabilities 12,740,258 70,339 2.19 % 12,937,529 64,963 1.99 % 12,933,885 25,004 0.77 % Demand deposit accounts 5,210,185 5,257,704 6,495,817 Other noninterest-bearing liabilities 555,034 541,827 495,129 Total liabilities 18,505,477 18,737,060 19,924,831 Shareholders' equity 2,682,600 2,539,806 2,420,174 Total liabilities and shareholders' equity $ 21,188,077 $ 21,276,866 $ 22,345,005 Net interest income - FTE $ 137,790 $ 141,581 $ 153,774 Net interest rate spread (2) 1.87 % 2.06 % 2.50 % Net interest-earning assets (3) $ 7,613,428 $ 7,305,458 $ 8,757,962 Net interest margin - FTE (4) 2.69 % 2.77 % 2.81 % (1) Includes non-accrual loans. (2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (4) Net interest margin - FTE represents fully-taxable equivalent net interest income* divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income. (5) Presented on an annualized basis. EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS As of and for the twelve months ended Dec 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Avg. Balance Interest Yield / Cost Avg. Balance Interest Yield / Cost Interest-earning assets: Loans (1): Commercial $ 9,913,968 $ 491,427 4.96 % $ 9,147,540 $ 366,097 4.00 % Residential 2,538,588 90,139 3.55 % 2,064,609 63,803 3.09 % Consumer 1,381,745 86,167 6.24 % 1,327,417 56,965 4.29 % Total loans 13,834,301 667,733 4.83 % 12,539,566 486,865 3.88 % Non-taxable investment securities 197,682 7,279 3.68 % 253,651 9,091 3.58 % Taxable investment securities 6,050,024 101,233 1.67 % 8,413,217 118,690 1.41 % Total investment securities 6,247,706 108,512 1.74 % 8,666,868 127,781 1.47 % Federal funds sold and other short-term investments 720,864 37,395 5.19 % 420,834 3,271 0.78 % Total interest-earning assets 20,802,871 813,640 3.91 % 21,627,268 617,917 2.86 % Non-interest-earning assets 921,622 986,865 Total assets $ 21,724,493 $ 22,614,133 Interest-bearing liabilities: Deposits: Savings $ 1,515,713 $ 217 0.01 % $ 2,015,651 $ 209 0.01 % Interest checking 4,070,585 24,235 0.60 % 4,890,709 11,675 0.24 % Money market 4,918,343 104,002 2.11 % 5,057,445 13,479 0.27 % Time deposits 2,303,520 97,621 4.24 % 463,261 3,258 0.70 % Total interest-bearing deposits 12,808,161 226,075 1.77 % 12,427,066 28,621 0.23 % Borrowings 418,884 19,975 4.77 % 256,632 8,506 3.31 % Total interest-bearing liabilities 13,227,045 246,050 1.86 % 12,683,698 37,127 0.29 % Demand deposit accounts 5,404,208 6,647,518 Other noninterest-bearing liabilities 522,239 451,384 Total liabilities 19,153,492 19,782,600 Shareholders' equity 2,571,001 2,831,533 Total liabilities and shareholders' equity $ 21,724,493 $ 22,614,133 Net interest income - FTE $ 567,590 $ 580,790 Net interest rate spread (2) 2.05 % 2.57 % Net interest-earning assets (3) $ 7,575,826 $ 8,943,570 Net interest margin - FTE (4) 2.73 % 2.69 % (1) Includes non-accrual loans. (2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (4) Net interest margin - FTE represents fully-taxable equivalent net interest income* divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income. EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - NON-PERFORMING ASSETS (1) As of Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Non-accrual loans: Commercial $ 35,107 $ 31,703 $ 14,178 $ 17,271 $ 21,474 Residential 8,725 8,075 8,796 9,603 9,750 Consumer 8,725 7,687 7,584 7,699 7,380 Total non-accrual loans 52,557 47,465 30,558 34,573 38,604 Total accruing loans past due 90 days or more: — — — — — Total non-performing loans 52,557 47,465 30,558 34,573 38,604 Other real estate owned — — — — — Other non-performing assets: — — — — — Total non-performing assets (1) $ 52,557 $ 47,465 $ 30,558 $ 34,573 $ 38,604 Total accruing troubled debt restructured ("TDR") (2) $ — $ — $ — $ — $ 28,834 Total non-performing loans to total loans 0.38 % 0.34 % 0.22 % 0.25 % 0.28 % Total non-performing assets to total assets 0.25 % 0.22 % 0.14 % 0.15 % 0.17 % (1) Non-performing assets are comprised of NPLs, other real estate owned ("OREO"), and non-performing securities. NPLs consist of non-accrual loans and loans that are more than 90 days past due but still accruing interest. OREO consists of real estate properties, which primarily serve as collateral to secure the Company’s loans, that it controls due to foreclosure or acceptance of a deed in lieu of foreclosure. (2) The Company adopted ASU 2022-02 on January 1, 2023 which eliminated the TDR recognition and measurement guidance. Accordingly, the Company had no TDRs to report as of March 31, 2023 and subsequent periods. EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE-OFFS (RECOVERIES) Three months ended Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Average total loans $ 13,961,061 $ 13,926,194 $ 13,803,292 $ 13,633,165 $ 13,203,450 Allowance for loan losses, beginning of the period 155,146 147,955 140,938 142,211 131,663 Total cumulative effect of change in accounting principle (1): — — — (1,143 ) — Charged-off loans: Commercial and industrial 2 11 — — 256 Commercial real estate 8,008 — — — — Commercial construction — — — — — Business banking 3,745 303 254 343 370 Residential real estate — — — — — Consumer home equity — — — 7 1 Other consumer 536 731 591 561 515 Total charged-off loans 12,291 1,045 845 911 1,142 Recoveries on loans previously charged-off: Commercial and industrial 11 120 26 139 248 Commercial real estate 190 2 2 4 38 Commercial construction — — — — — Business banking 573 609 204 481 391 Residential real estate 34 30 18 15 14 Consumer home equity 1 39 — 1 8 Other consumer 131 108 111 116 111 Total recoveries 940 908 361 756 810 Net loans charged-off (recoveries): Commercial and industrial (9 ) (109 ) (26 ) (139 ) 8 Commercial real estate 7,818 (2 ) (2 ) (4 ) (38 ) Commercial construction — — — — — Business banking 3,172 (306 ) 50 (138 ) (21 ) Residential real estate (34 ) (30 ) (18 ) (15 ) (14 ) Consumer home equity (1 ) (39 ) — 6 (7 ) Other consumer 405 623 480 445 404 Total net loans charged-off 11,351 137 484 155 332 Provision for allowance for loan losses 5,198 7,328 7,501 25 10,880 Total allowance for loan losses, end of period $ 148,993 $ 155,146 $ 147,955 $ 140,938 $ 142,211 Net charge-offs to average total loans outstanding during this period (2) 0.32 % 0.00 % 0.01 % 0.00 % 0.01 % Allowance for loan losses as a percent of total loans 1.07 % 1.12 % 1.06 % 1.03 % 1.05 % Allowance for loan losses as a percent of nonperforming loans 283.49 % 326.86 % 484.18 % 407.65 % 368.38 % (1) For the quarter ended March 31, 2023, represents the adjustment needed to reflect the cumulative day one impact pursuant to the Company’s adoption of ASU 2022-02 (i.e., cumulative effect adjustment related to the adoption of ASU 2022-02 as of January 1, 2023). The adjustment represents a $1.1 million decrease to the allowance attributable to the change in accounting methodology for estimating the allowance for loan losses resulting from the Company’s adoption of the standard. (2) Presented on an annualized basis. APPENDIX A: Reconciliation of Non-GAAP Earnings Metrics (1) For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of and for the Three Months Ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Net income (loss) from continuing operations (GAAP) $ 31,509 $ 63,464 $ 44,419 $ (202,081 ) $ 40,918 Add: Noninterest income components: (Income) losses from investments held in rabbi trusts (4,969 ) 1,523 (3,002 ) (2,857 ) (3,235 ) Losses on sales of securities available for sale, net — — — 333,170 683 (Gains) losses on sales of other assets — (2 ) — 5 10 Noninterest expense components: Rabbi trust employee benefit expense (income) 1,740 (586 ) 1,314 1,274 1,103 Merger and acquisition expenses 1,865 3,630 — — — Defined Benefit Plan settlement loss — — — — 12,045 Total impact of non-GAAP adjustments (1,364 ) 4,565 (1,688 ) 331,592 10,606 Less net tax benefit associated with non-GAAP adjustments (2) 13,270 15,944 1,639 76,377 2,954 Non-GAAP adjustments, net of tax $ (14,634 ) $ (11,379 ) $ (3,327 ) $ 255,215 $ 7,652 Operating net income (non-GAAP) $ 16,875 $ 52,085 $ 41,092 $ 53,134 $ 48,570 Weighted average common shares outstanding during the period: Basic 162,571,066 162,370,469 162,232,236 161,991,373 162,032,522 Diluted 162,724,398 162,469,887 162,246,675 162,059,431 162,263,547 Earnings (losses) per share from continuing operations, basic: $ 0.19 $ 0.39 $ 0.27 $ (1.25 ) $ 0.25 Earnings (losses) per share from continuing operations, diluted: $ 0.19 $ 0.39 $ 0.27 $ (1.25 ) $ 0.25 Operating earnings per share, basic (non-GAAP) $ 0.10 $ 0.32 $ 0.25 $ 0.33 $ 0.30 Operating earnings per share, diluted (non-GAAP) $ 0.10 $ 0.32 $ 0.25 $ 0.33 $ 0.30 Return on average assets (3) 0.59 % 1.18 % 0.81 % (3.64 )% 0.73 % Add: (Income) losses from investments held in rabbi trusts (3) (0.09 )% 0.03 % (0.05 )% (0.05 )% (0.06 )% Losses on sales of securities available for sale, net (3) 0.00 % 0.00 % 0.00 % 6.00 % 0.01 % (Gains) losses on sales of other assets (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Rabbi trust employee benefit expense (income) (3) 0.03 % (0.01 )% 0.02 % 0.02 % 0.02 % Merger and acquisition expenses (3) 0.03 % 0.07 % 0.00 % 0.00 % 0.00 % Defined Benefit Plan settlement loss (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.21 % Less net tax benefit associated with non-GAAP adjustments (2) (3) 0.25 % 0.30 % 0.03 % 1.38 % 0.05 % Operating return on average assets (non-GAAP) (3) 0.31 % 0.97 % 0.75 % 0.95 % 0.86 % Return on average shareholders' equity (3) 4.66 % 9.91 % 6.85 % (33.31 )% 6.71 % Add: (Income) losses from investments held in rabbi trusts (3) (0.73 )% 0.24 % (0.46 )% (0.47 )% (0.53 )% Losses on sales of securities available for sale, net (3) 0.00 % 0.00 % 0.00 % 54.92 % 0.11 % (Gains) losses on sales of other assets (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Rabbi trust employee benefit expense (income) (3) 0.26 % (0.09 )% 0.20 % 0.21 % 0.18 % Merger and acquisition expenses (3) 0.28 % 0.57 % 0.00 % 0.00 % 0.00 % Defined Benefit Plan settlement loss (3) 0.00 % 0.00 % 0.00 % 0.00 % 1.97 % Less net tax benefit associated with non-GAAP adjustments (2) (3) 1.96 % 2.49 % 0.25 % 12.59 % 0.48 % Operating return on average shareholders' equity (non-GAAP) (3) 2.51 % 8.14 % 6.34 % 8.76 % 7.96 % Average tangible shareholders' equity: Average total shareholders' equity (GAAP) $ 2,682,600 $ 2,539,806 $ 2,599,325 $ 2,460,170 $ 2,420,174 Less: Average goodwill and other intangibles 597,234 658,591 659,825 660,795 661,841 Average tangible shareholders' equity (non-GAAP) $ 2,085,366 $ 1,881,215 $ 1,939,500 $ 1,799,375 $ 1,758,333 Return on average tangible shareholders' equity (non-GAAP) (3) 5.99 % 13.38 % 9.19 % (45.55 )% 9.23 % Add: (Income) losses from investments held in rabbi trusts (3) (0.95 )% 0.32 % (0.62 )% (0.64 )% (0.73 )% Losses on sales of securities available for sale, net (3) 0.00 % 0.00 % 0.00 % 75.09 % 0.15 % (Gains) losses on sales of other assets (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Rabbi trust employee benefit expense (income) (3) 0.33 % (0.12 )% 0.27 % 0.29 % 0.25 % Merger and acquisition expenses (3) 0.35 % 0.77 % 0.00 % 0.00 % 0.00 % Defined Benefit Plan settlement loss (3) 0.00 % 0.00 % 0.00 % 0.00 % 2.72 % Less net tax benefit associated with non-GAAP adjustments (2) (3) 2.52 % 3.36 % 0.34 % 17.21 % 0.67 % Operating return on average tangible shareholders' equity (non-GAAP) (3) 3.20 % 10.99 % 8.50 % 11.98 % 10.95 % (1) Average assets, average shareholders' equity, average goodwill and other intangibles, and average tangible shareholders' equity components presented in this table include discontinued operations. (2) The net tax benefit (expense) associated with these items is generally determined by assessing whether each item is included or excluded from net taxable income and applying our combined statutory tax rate only to those items included in net taxable income. The net tax benefit for the three months ended December 31, 2023 was primarily due to the tax benefit from state tax strategies associated with the utilization of capital losses as a result of the sale of securities in the first quarter of 2023, described further below. Upon the sale of securities in the first quarter of 2023, we established a valuation allowance of $17.4 million, as it was determined at that time that it was not more-likely-than-not that the entirety of the deferred tax asset related to the loss on such securities would be realized. Included in that $17.4 million was $2.8 million in expected lost state tax benefits. Following the execution of the sale of our insurance agency business in October 2023 and the resulting capital gain, coupled with tax planning strategies, a state tax benefit of $13.6 million was realized on the security sale losses. (3) Presented on an annualized basis. APPENDIX B: Reconciliation of Non-GAAP Operating Revenues and Expenses For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." Three Months Ended Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Net interest income (GAAP) $ 133,307 $ 137,205 $ 141,588 $ 138,309 $ 149,994 Add: Tax-equivalent adjustment (non-GAAP) (1) 4,483 4,376 3,877 4,445 3,780 Fully-taxable equivalent net interest income (non-GAAP) $ 137,790 $ 141,581 $ 145,465 $ 142,754 $ 153,774 Noninterest income (loss) (GAAP) $ 26,739 $ 19,157 $ 26,204 $ (309,853 ) $ 22,425 Less: Income (losses) from investments held in rabbi trusts 4,969 (1,523 ) 3,002 2,857 3,235 Losses on sales of securities available for sale, net — — — (333,170 ) (683 ) Gains (losses) on sales of other assets — 2 — (5 ) (10 ) Noninterest income on an operating basis (non-GAAP) $ 21,770 $ 20,678 $ 23,202 $ 20,465 $ 19,883 Noninterest expense (GAAP) $ 121,029 $ 101,748 $ 99,934 $ 95,891 $ 112,583 Less: Rabbi trust employee benefit expense (income) 1,740 (586 ) 1,314 1,274 1,103 Merger and acquisition expenses 1,865 3,630 — — — Defined Benefit Plan settlement loss — — — — 12,045 Noninterest expense on an operating basis (non-GAAP) $ 117,424 $ 98,704 $ 98,620 $ 94,617 $ 99,435 Total revenue (loss) (GAAP) $ 160,046 $ 156,362 $ 167,792 $ (171,544 ) $ 172,419 Total operating revenue (non-GAAP) $ 159,560 $ 162,259 $ 168,667 $ 163,219 $ 173,657 Efficiency ratio (GAAP) 75.62 % 65.07 % 59.56 % (55.90 )% 65.30 % Operating efficiency ratio (non-GAAP) 73.59 % 60.83 % 58.47 % 57.97 % 57.26 % (1) Interest income on tax-exempt loans and investment securities has been adjusted to a FTE basis using a marginal tax rate of 21.9%, 21.7%, 21.8%, 21.7%, and 21.6% for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively. APPENDIX C: Reconciliation of Non-GAAP Capital Metrics For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands, except per-share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 2,974,855 $ 2,446,553 $ 2,526,772 $ 2,579,123 $ 2,471,790 Less: Goodwill and other intangibles (1) 566,205 657,824 658,993 660,165 661,126 Tangible shareholders' equity (non-GAAP) 2,408,650 1,788,729 1,867,779 1,918,958 1,810,664 Tangible assets: Total assets (GAAP) 21,133,278 21,146,292 21,583,493 22,720,530 22,646,858 Less: Goodwill and other intangibles (1) 566,205 657,824 658,993 660,165 661,126 Tangible assets (non-GAAP) $ 20,567,073 $ 20,488,468 $ 20,924,500 $ 22,060,365 $ 21,985,732 Shareholders' equity to assets ratio (GAAP) 14.08 % 11.57 % 11.71 % 11.35 % 10.91 % Tangible shareholders' equity to tangible assets ratio (non-GAAP) 11.71 % 8.73 % 8.93 % 8.70 % 8.24 % Common shares outstanding 176,426,993 176,376,675 176,376,675 176,328,426 176,172,073 Book value per share (GAAP) $ 16.86 $ 13.87 $ 14.33 $ 14.63 $ 14.03 Tangible book value per share (non-GAAP) $ 13.65 $ 10.14 $ 10.59 $ 10.88 $ 10.28 (1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023 and preceding periods. APPENDIX D: Tangible Shareholders’ Equity Roll Forward Analysis For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of Change from Dec 31, 2023 Sep 30, 2023 Sep 30, 2023 (Unaudited, dollars in thousands, except per-share data) Common stock $ 1,767 $ 1,766 $ 1 Additional paid in capital 1,666,441 1,661,136 5,305 Unallocated ESOP common stock (132,755 ) (133,992 ) 1,237 Retained earnings 2,047,754 1,747,225 300,529 AOCI, net of tax - available for sale securities (584,243 ) (763,871 ) 179,628 AOCI, net of tax - pension 7,462 6,021 1,441 AOCI, net of tax - cash flow hedge (31,571 ) (71,732 ) 40,161 Total shareholders' equity: $ 2,974,855 $ 2,446,553 $ 528,302 Less: Goodwill and other intangibles (1) 566,205 657,824 (91,619 ) Tangible shareholders' equity (non-GAAP) $ 2,408,650 $ 1,788,729 $ 619,921 Common shares outstanding 176,426,993 176,376,675 50,318 Per share: Common stock $ 0.01 $ 0.01 $ — Additional paid in capital 9.45 9.42 0.03 Unallocated ESOP common stock (0.75 ) (0.76 ) 0.01 Retained earnings 11.61 9.91 1.70 AOCI, net of tax - available for sale securities (3.31 ) (4.33 ) 1.02 AOCI, net of tax - pension 0.04 0.03 0.01 AOCI, net of tax - cash flow hedge (0.18 ) (0.41 ) 0.23 Total shareholders' equity: $ 16.86 $ 13.87 $ 2.99 Less: Goodwill and other intangibles (1) 3.21 3.73 (0.52 ) Tangible shareholders' equity (non-GAAP) $ 13.65 $ 10.14 $ 3.51 (1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023. View source version on businesswire.com: https://www.businesswire.com/news/home/20240125436910/en/Contacts Investor Contact Jillian Belliveau Eastern Bankshares, Inc. InvestorRelations@easternbank.com 781-598-7920 Media Contact Andrea Goodman Eastern Bank a.goodman@easternbank.com 781-598-7847
~ Earnings, Capital, and Liquidity Enhancements Resulting from Eastern Insurance Group LLC Asset Sale ~ ~ Growth in Core Deposits and Reduction in Wholesale Funding ~
Eastern Bankshares, Inc. (the “Company,” or together with its subsidiaries, “Eastern”) (NASDAQ Global Select Market: EBC), the stock holding company of Eastern Bank, today announced its 2023 fourth quarter financial results and the declaration of a quarterly cash dividend. On October 31, 2023, the Company completed the sale of the insurance operations of Eastern Insurance Group, LLC (“Eastern Insurance”), to Arthur J. Gallagher & Co. (“Gallagher”) for gross consideration of $515 million (“the insurance transaction”). The company recorded an after-tax gain of $294.5 million which is included in the fourth quarter results. The insurance transaction significantly improved the capital and funding position of the Company and will allow the Company to focus on the growth and strategic initiatives of its core banking business, including its pending merger with Cambridge Bancorp (“Cambridge”) (“the merger”), which was previously announced on September 19, 2023. The merger is expected to close early in the second quarter of 2024, subject to regulatory and shareholder approvals as previously disclosed. "2023 was a year of strategic repositioning for Eastern,” said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. “We realized early in 2023 that all banks were going to face significant challenges due to higher interest rates, changing customer deposit preferences and a very difficult macroeconomic environment. We responded by repositioning our securities portfolio in the first quarter, which allowed us to improve both our liquidity and earnings outlook, and followed with the sale of Eastern Insurance in the second half of the year to capitalize on the valuation premium it commanded. The insurance transaction provided us additional liquidity and capital, and positioned us to announce our merger with Cambridge Bancorp, a highly attractive in-market merger partner with a valuable wealth management business. We are very confident that these transactions provide us with a greater financial foundation, stronger earnings for our shareholders, and a leading market share in our footprint. The upcoming merger is the next step in our journey and we all look forward to welcoming the colleagues and customers of Cambridge Trust to Eastern.” FINANCIAL HIGHLIGHTS FOR THE FOURTH QUARTER OF 2023 Completed the sale of Eastern Insurance to Gallagher for cash consideration of $515 million and for an after-tax gain of $294.5 million. Net income of $318.5 million, or $1.95 per diluted share, compared to net income of $59.1 million, or $0.36 per diluted share, for the prior quarter. Operating net income*, which excludes the revenues, expenses, and tax provision of discontinued operations, of $16.9 million, or $0.10 per diluted share. Operating net income* includes a $10.8 million special assessment from the Federal Deposit Insurance Corporation (“FDIC”). Total deposits increased $172.0 million from the prior quarter, to $17.6 billion. Core deposits, which exclude brokered deposits, increased $516.2 million or 3.0% from the prior quarter. Total loans increased $54.2 million from the prior quarter, to $14.0 billion. The net interest margin on a fully tax equivalent (“FTE”) basis* of 2.69% was 8 basis points lower than the prior quarter but trend is stabilizing. Borrowings and brokered deposits of less than 1% of total assets as of December 31, 2023. Annualized net charge-offs ("NCOs") of 0.32% in the fourth quarter and 0.09% for full year 2023 and nonperforming loans ("NPLs") of $52.6 million, or 0.38% of total loans as of December 31, 2023. BALANCE SHEET Total assets were $21.1 billion at December 31, 2023, essentially unchanged from September 30, 2023. Cash and equivalents increased $84.3 million from the prior quarter to $693.1 million. Total securities increased $139.8 million, or 3%, from the prior quarter, to $4.9 billion, due to an increase in the market value of available for sale securities, partially offset by principal runoff. Loans totaled $14.0 billion, representing an increase of $54.2 million, or 0.4%, from the prior quarter. Deposits totaled $17.6 billion, representing an increase of $172.0 million, or 1.0%, from the prior quarter, driven primarily by an increase of $516.2 million, or 3.0%, in core deposits. This was partially offset by a decrease of $344.1 million in brokered deposits. Borrowed funds decreased $667.2 million from the prior quarter to $48.2 million in the fourth quarter, as a combination of strong core deposit trends and the proceeds from the insurance transaction allowed for the paydown of Federal Home Loan Bank (“FHLB”) borrowings. Shareholders’ equity was $3.0 billion, representing an increase of $528.3 million from the prior quarter primarily driven by increases in retained earnings and accumulated other comprehensive income. The increase in retained earnings was primarily due to the net gain on sale resulting from the insurance transaction. At December 31, 2023, book value per share was $16.86 and tangible book value per share* was $13.65. Please refer to Appendix D to this press release for a roll-forward of tangible shareholders’ equity*. NET INTEREST INCOME Net interest income was $133.3 million for the fourth quarter of 2023, compared to $137.2 million in the prior quarter, representing a decrease of $3.9 million. The decrease in net interest income on a consecutive quarter basis was primarily due to a decrease in the net interest margin, as increases in earning asset yields were more than offset by increased funding costs. The net interest margin on a FTE basis* was 2.69% for the fourth quarter, representing an 8 basis point decrease from the prior quarter. Total interest-earning asset yields increased 1 basis point from the prior quarter to 4.06%, due to increased residential loan, consumer loan and short-term investment yields as a result of higher interest rates throughout the quarter, partially offset by decreased commercial loan yield. The prior quarter’s commercial loan yield benefited from $2.6 million in commercial loan interest recoveries. Total interest-bearing liabilities cost increased 20 basis points from the prior quarter to 2.19%, due primarily to higher deposit costs resulting from deposit pricing increases and deposit mix shifts. The net interest margin for the fourth quarter included a partial quarter benefit from the proceeds of the insurance transaction, which was completed on October 31, 2023. The proceeds, in part, allowed the Company to reduce brokered deposits and borrowings to less than 1% of total assets. NONINTEREST INCOME Noninterest income, which excludes revenues from discontinued operations, was $26.7 million for the fourth quarter of 2023, compared to $19.2 million for the prior quarter, representing an increase of $7.6 million. Noninterest income on an operating basis* was $21.8 million for the fourth quarter of 2023, compared to $20.7 million for the prior quarter, an increase of $1.1 million. Service charges on deposit accounts increased $0.1 million on a consecutive quarter basis to $7.5 million. Trust and investment advisory fees decreased $0.1 million on a consecutive quarter basis to $6.1 million. Debit card processing fees were unchanged at $3.4 million in the fourth quarter. Loan-level interest rate swap income decreased $2.3 million from the prior quarter to a loss of $0.6 million. The decrease was driven primarily by a decrease in the fair value of such transactions. Income from investments held in rabbi trust accounts was $5.0 million compared to losses of $1.5 million in the prior quarter due to an increase in the fair value of such investments. In the fourth quarter, losses on the sale of commercial and industrial loans totaled $0.1 million, compared to losses of $2.7 million from the prior quarter. Other noninterest income increased $0.8 million in the fourth quarter to $5.6 million. NONINTEREST EXPENSE Noninterest expense, which excludes expenses from discontinued operations, was $121.0 million for the fourth quarter of 2023, compared to $101.7 million in the prior quarter, representing an increase of $19.3 million. Noninterest expense on an operating basis* for the fourth quarter of 2023 was $117.4 million, compared to $98.7 million in the prior quarter, an increase of $18.7 million. The increase in operating noninterest expense* was driven primarily by the $10.8 million special assessment from the FDIC as well as a $4.5 million increase in the operating portion of salaries and employee benefits expense. Salaries and employee benefits expense was $67.8 million, representing an increase of $6.9 million from the prior quarter. The increase was driven primarily by increases in incentive compensation costs and increases in supplemental executive retirement plan benefits expense. Office occupancy and equipment expense was $9.2 million, an increase of $0.6 million from the prior quarter. Data processing expense was $16.8 million, an increase of $3.3 million from the prior quarter, due in part to an increase in M&A related data processing costs of $1.4 million. Professional services expense was $4.1 million in the fourth quarter, a decrease of $3.0 million from the prior quarter, primarily due to a decrease in M&A related professional services costs of $3.2 million. Marketing expense was $2.7 million, an increase of $0.9 million from the prior quarter. Loan expenses were $1.2 million, an increase of $0.1 million from the prior quarter. Federal Deposit Insurance Corporation (“FDIC”) insurance expense was $13.5 million, an increase of $10.7 million from the prior quarter due to the special assessment charged by the FDIC to recover the loss to the Deposit Insurance Fund associated with protecting uninsured depositors following the closures of certain banks in 2023. Other noninterest expense was $5.3 million, a decrease of $0.1 million from the prior quarter. INCOME TAXES The income tax expense for the fourth quarter was $2.3 million. The lower than expected tax expense in the fourth quarter of 2023 was primarily a result of a tax planning strategy to recognize a net state tax benefit of $9.2 million primarily due to capital losses resulting from the securities sale in the first quarter of 2023. ASSET QUALITY The allowance for loan losses was $149.0 million at December 31, 2023, or 1.07% of total loans, compared to $155.1 million, or 1.12% of total loans, at September 30, 2023. During the fourth quarter of 2023, the Company recorded total net charge-offs of $11.4 million, or 0.32% of average total loans on an annualized basis, compared to $0.1 million or less than 0.01% of average total loans in the prior quarter, respectively. The increase in total net charge-offs in the fourth quarter was primarily due to partial charge-offs of two credits secured by investor commercial real estate office properties, each of which had previously been placed on non-accrual and were reserved for during the third quarter. The Company recorded a provision for loan losses totaling $5.2 million in the fourth quarter of 2023 due primarily to increases in specific reserves on commercial loans. Non-performing loans totaled $52.6 million at December 31, 2023 compared to $47.5 million at the end of the prior quarter. Please refer to the investor presentation for a review of the Company’s office-related commercial real estate exposure. DIVIDENDS AND SHARE REPURCHASES The Company’s Board of Directors has declared a quarterly cash dividend of $0.11 per common share. The dividend will be payable on March 15, 2024 to shareholders of record as of the close of business on March 1, 2024. The Company did not repurchase any shares of its common stock during the fourth quarter of 2023. CONFERENCE CALL AND PRESENTATION INFORMATION A conference call and webcast covering Eastern’s fourth quarter 2023 earnings will be held on Friday, January 26, 2024 at 9:00 a.m. Eastern Time. To join by telephone, participants can call the toll-free dial-in number (888) 259-6580 from within the U.S. and reference conference ID 61093108. The conference call will be simultaneously webcast. Participants may join the webcast on the Company’s Investor Relations website at investor.easternbank.com. A presentation providing additional information for the quarter is also available at investor.easternbank.com. A replay of the webcast will be made available on demand on this site. ABOUT EASTERN BANKSHARES, INC. Eastern Bankshares, Inc. is the stock holding company for Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 120 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. As of December 31, 2023, Eastern Bank had approximately $21 billion in total assets. Eastern provides a full range of banking and wealth management solutions for consumers and businesses of all sizes, and takes pride in its outspoken advocacy and community support that includes $240 million in charitable giving since 1994. An inclusive company, Eastern is comprised of deeply committed professionals who value relationships with their customers, colleagues, and communities. For investor information, visit investor.easternbank.com. NON-GAAP FINANCIAL MEASURES *Denotes a non-GAAP financial measure used in this press release. A non-GAAP financial measure is defined as a numerical measure of the Company’s historical or future financial performance, financial position or cash flows that excludes (or includes) amounts, or is subject to adjustments that have the effect of excluding (or including) amounts that are included in the most directly comparable measure calculated and presented in accordance with accounting principles generally accepted in the United States (“GAAP”) in the Company’s statement of income, balance sheet or statement of cash flows (or equivalent statements). The Company presents non-GAAP financial measures, which management uses to evaluate the Company’s performance, and which exclude the effects of certain transactions that management believes are unrelated to its core business and are therefore not necessarily indicative of its current performance or financial position. Management believes excluding these items facilitates greater visibility for investors into the Company’s core business as well as underlying trends that may, to some extent, be obscured by inclusion of such items in the corresponding GAAP financial measures. Except as otherwise indicated, these non-GAAP financial measures presented in this press release exclude discontinued operations. There are items in the Company’s financial statements that impact its financial results, but which management believes are unrelated to the Company’s core business. Accordingly, the Company presents noninterest income on an operating basis, total operating revenue, noninterest expense on an operating basis, operating net income, operating earnings per share, operating return on average assets, operating return on average shareholders’ equity, operating return on average tangible shareholders’ equity (discussed further below), and the operating efficiency ratio. Each of these figures excludes the impact of such applicable items because management believes such exclusion can provide greater visibility into the Company’s core business and underlying trends. Such items that management does not consider to be core to the Company’s business include (i) income and expenses from investments held in rabbi trusts, (ii) gains and losses on sales of securities available for sale, net, (iii) gains and losses on the sale of other assets, (iv) rabbi trust employee benefits, (v) impairment charges on tax credit investments and associated tax credit benefits, (vi) other real estate owned (“OREO”) gains, (vii) merger and acquisition expenses, (viii) the non-cash pension settlement charge recognized related to the Defined Benefit Plan, (ix) certain discrete tax items, and (x) net income from discontinued operations. The Company does not provide an outlook for its total noninterest income and total noninterest expense because each contains income or expense components, as applicable, such as income associated with rabbi trust accounts and rabbi trust employee benefit expense, which are market-driven, and over which the Company cannot exercise control. Accordingly, reconciliations of the Company’s outlook for its noninterest income on an operating basis and its noninterest expense on an operating basis to an outlook for total noninterest income and total noninterest expense, respectively, cannot be made available without unreasonable effort. Management also presents tangible assets, tangible shareholders’ equity, average tangible shareholders’ equity, tangible book value per share, the ratio of tangible shareholders’ equity to tangible assets including the impact of mark-to-market adjustments on held-to-maturity securities, return on average tangible shareholders’ equity, and operating return on average shareholders’ equity (discussed further above), each of which excludes the impact of goodwill and other intangible assets, as management believes these financial measures provide investors with the ability to further assess the Company’s performance, identify trends in its core business and provide a comparison of its capital adequacy to other companies. The Company included the tangible ratios because management believes that investors may find it useful to have access to the same analytical tools used by management to assess performance and identify trends. These non-GAAP financial measures presented in this press release should not be considered an alternative or substitute for financial results or measures determined in accordance with GAAP or as an indication of the Company’s cash flows from operating activities, a measure of its liquidity position or an indication of funds available for its cash needs. An item which management considers to be non-core and excludes when computing these non-GAAP measures can be of substantial importance to the Company’s results for any particular period. In addition, management’s methodology for calculating non-GAAP financial measures may differ from the methodologies employed by other banking companies to calculate the same or similar performance measures, and accordingly, the Company’s reported non-GAAP financial measures may not be comparable to the same or similar performance measures reported by other banking companies. Please refer to Appendices A-E for reconciliations of the Company's GAAP financial measures to the non-GAAP financial measures in this press release. FORWARD-LOOKING STATEMENTS This press release contains “forward-looking statements” within the meaning of section 27A of the Securities Act of 1933, as amended, and section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements regarding anticipated future events and can be identified by the fact that they do not relate strictly to historical or current facts. You can identify these statements from the use of the words “may,” “will,” “should,” “could,” “would,” “plan,” “potential,” “estimate,” “project,” “believe,” “intend,” “anticipate,” “expect,” “target”, “outlook” and similar expressions. Forward-looking statements, by their nature, are subject to risks and uncertainties. There are many factors that could cause actual results to differ materially from expected results described in the forward-looking statements. Certain factors that could cause actual results to differ materially from expected results include; adverse developments in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for loan losses; increased competitive pressures; changes in interest rates and resulting changes in competitor or customer behavior, mix or costs of sources of funding, and deposit amounts and composition; risks associated with the Company’s completion and/or implementation of the merger with Cambridge, including risks that required regulatory, shareholder or other approvals for the merger are not obtained or other closing conditions are not satisfied in a timely manner or at all and that the merger fails to occur in the timeframe expected or at all; prior to the completion of the merger or thereafter, Cambridge or the Company may not perform as expected due to transaction-related uncertainty or other factors; and revenue or expense synergies may not fully materialize for the Company in the timeframe expected or at all, or may be more costly to achieve; adverse national or regional economic conditions or conditions within the securities markets or banking sector; legislative and regulatory changes and related compliance costs that could adversely affect the business in which the Company and its subsidiary Eastern Bank are engaged, including the effect of, and changes in, monetary and fiscal policies and laws, such as the interest rate policies of the Board of Governors of the Federal Reserve System; market and monetary fluctuations, including inflationary or recessionary pressures, interest rate sensitivity, liquidity constraints, increased borrowing and funding costs, and fluctuations due to actual or anticipated changes to federal tax laws; the realizability of deferred tax assets; the Company’s ability to successfully implement its risk mitigation strategies; asset and credit quality deterioration, including adverse developments in local or regional real estate markets that decrease collateral values associated with existing loans; and operational risks such as cybersecurity incidents, natural disasters, and pandemics, including COVID-19. For further discussion of such factors, please see the Company’s most recent Annual Report on Form 10-K and subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”), including the joint proxy statement/prospectus (as defined below), which are available on the SEC’s website at www.sec.gov. You should not place undue reliance on forward-looking statements, which reflect the Company's expectations only as of the date of this press release. The Company does not undertake any obligation to update forward-looking statements. ADDITIONAL INFORMATION AND WHERE TO FIND IT In connection with the proposed merger transaction, on January 16, 2024, the Company filed with the SEC a Registration Statement on Form S-4 and a Joint Proxy Statement of the Company and Cambridge and a Prospectus of the Company (the “joint proxy statement/prospectus”), as well as other relevant documents concerning the proposed transaction. This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. INVESTORS AND SHAREHOLDERS OF THE COMPANY AND CAMBRIDGE ARE URGED TO READ THE REGISTRATION STATEMENT AND THE JOINT PROXY STATEMENT/PROSPECTUS REGARDING THE TRANSACTION AND EACH OTHER RELEVANT DOCUMENT FILED WITH THE SEC, AS WELL AS ANY AMENDMENT OR SUPPLEMENT TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. A copy of the definitive joint proxy statement/prospectus, as well as other filings containing information about the Company and Cambridge, can be obtained without charge, at the SEC’s website (http://www.sec.gov). Copies of the joint proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the joint proxy statement/prospectus can also be obtained, without charge, by directing a request to the Company’s Investor Relations team via email at InvestorRelations@easternbank.com or by telephone at (781) 598-7920, or to Cambridge Investor Relations via email at InvestorRelations@cambridgetrust.com or by telephone at (617) 520-5520. PARTICIPANTS IN THE SOLICITATION The Company, Cambridge, and their respective directors, executive officers and other members of management and employees may be deemed to be participants in the solicitation of proxies from the shareholders of the Company and/or Cambridge in connection with the proposed transaction under the rules of the SEC. Information regarding the Company’s directors and executive officers is available in its definitive proxy statement relating to its 2023 Annual Meeting of Shareholders, which was filed with the SEC on April 3, 2023, and its Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the Commission on February 24, 2023, and other documents filed by the Company with the SEC. Information regarding Cambridge’s directors and executive officers is available in its definitive proxy statement relating to its 2023 Annual Meeting of Shareholders, which was filed with the SEC on March 16, 2023, the joint proxy statement/prospectus and other documents filed by Cambridge with the SEC. Information regarding the participants in the proxy solicitation and a description of their interests included in the joint proxy statement/prospectus and other relevant materials filed with the SEC may be obtained free of charge as described in the preceding paragraph. EASTERN BANKSHARES, INC. AND SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS Certain information in this press release is presented as reviewed by the Company’s management and includes information derived from the Company’s Consolidated Statements of Income, non-GAAP financial measures, and operational and performance metrics. For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of and for the three months ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Earnings data Net interest income $ 133,307 $ 137,205 $ 141,588 $ 138,309 $ 149,994 Noninterest income (loss) 26,739 19,157 26,204 (309,853 ) 22,425 Total revenue 160,046 156,362 167,792 (171,544 ) 172,419 Noninterest expense 121,029 101,748 99,934 95,891 112,583 Pre-tax, pre-provision income (loss) 39,017 54,614 67,858 (267,435 ) 59,836 Provision for allowance for loan losses 5,198 7,328 7,501 25 10,880 Pre-tax income (loss) 33,819 47,286 60,357 (267,460 ) 48,956 Net income (loss) from continuing operations 31,509 63,464 44,419 (202,081 ) 40,918 Net income (loss) from discontinued operations 286,994 (4,351 ) 4,238 7,985 1,376 Net income (loss) 318,503 59,113 48,657 (194,096 ) 42,294 Operating net income (non-GAAP) 16,875 52,085 41,092 53,134 48,570 Per-share data Earnings (losses) per share, diluted $ 1.95 $ 0.36 $ 0.30 $ (1.20 ) $ 0.26 Continuing operations $ 0.19 $ 0.39 $ 0.27 $ (1.25 ) $ 0.25 Discontinued operations $ 1.76 $ (0.03 ) $ 0.03 $ 0.05 $ 0.01 Operating earnings per share, diluted (non-GAAP) $ 0.10 $ 0.32 $ 0.25 $ 0.33 $ 0.30 Book value per share $ 16.86 $ 13.87 $ 14.33 $ 14.63 $ 14.03 Tangible book value per share (non-GAAP) $ 13.65 $ 10.14 $ 10.59 $ 10.88 $ 10.28 Profitability Return on average assets (2) 0.59 % 1.18 % 0.81 % (3.64 )% 0.73 % Operating return on average assets (non-GAAP) (2) 0.31 % 0.97 % 0.75 % 0.95 % 0.86 % Return on average shareholders' equity (2) 4.66 % 9.91 % 6.85 % (33.31 )% 6.71 % Operating return on average shareholders' equity (2) 2.51 % 8.14 % 6.34 % 8.76 % 7.96 % Return on average tangible shareholders' equity (non-GAAP) (2) 5.99 % 13.38 % 9.19 % (45.55 )% 9.23 % Operating return on average tangible shareholders' equity (non-GAAP) (2) 3.20 % 10.99 % 8.50 % 11.98 % 10.95 % Net interest margin (FTE) (2) 2.69 % 2.77 % 2.80 % 2.66 % 2.81 % Cost of deposits (2) 1.51 % 1.33 % 1.22 % 0.92 % 0.37 % Efficiency ratio 75.62 % 65.07 % 59.56 % (55.90 )% 65.30 % Operating efficiency ratio (non-GAAP) 73.59 % 60.83 % 58.47 % 57.97 % 57.26 % Balance Sheet (end of period) Total assets $ 21,133,278 $ 21,146,292 $ 21,583,493 $ 22,720,530 $ 22,646,858 Total loans 13,973,428 13,919,275 13,961,878 13,675,250 13,575,531 Total deposits 17,596,217 17,424,169 18,180,972 18,541,580 18,974,359 Total loans / total deposits 79 % 80 % 77 % 74 % 72 % Asset quality Allowance for loan losses ("ALLL") $ 148,993 $ 155,146 $ 147,955 $ 140,938 $ 142,211 ALLL / total nonperforming loans ("NPLs") 283.49 % 326.86 % 484.18 % 407.65 % 368.38 % Total NPLs / total loans 0.38 % 0.34 % 0.22 % 0.25 % 0.28 % Net charge-offs ("NCOs") / average total loans (2) 0.32 % 0.00 % 0.01 % 0.00 % 0.01 % Capital adequacy Shareholders' equity / assets 14.08 % 11.57 % 11.71 % 11.35 % 10.91 % Tangible shareholders' equity / tangible assets (non-GAAP) 11.71 % 8.73 % 8.93 % 8.70 % 8.24 % (1) Average assets, average shareholders' equity and average tangible shareholders' equity components presented in this table include discontinued operations. (2) Presented on an annualized basis. EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS As of Dec 31, 2023 change from (Unaudited, dollars in thousands) Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 Sep 30, 2023 Dec 31, 2022 ASSETS △ $ △ % △ $ △ % Cash and due from banks $ 87,233 $ 72,689 $ 106,040 $ 14,544 20 % $ (18,807 ) (18 )% Short-term investments 605,843 536,119 63,465 69,724 13 % 542,378 855 % Cash and cash equivalents 693,076 608,808 169,505 84,268 14 % 523,571 309 % Available for sale ("AFS") securities 4,407,521 4,261,518 6,690,778 146,003 3 % (2,283,257 ) (34 )% Held to maturity ("HTM") securities 449,721 455,900 476,647 (6,179 ) (1 )% (26,926 ) (6 )% Total securities 4,857,242 4,717,418 7,167,425 139,824 3 % (2,310,183 ) (32 )% Loans held for sale 1,124 23,892 4,543 (22,768 ) (95 )% (3,419 ) (75 )% Loans: Commercial and industrial 3,034,068 3,087,509 3,150,946 (53,441 ) (2 )% (116,878 ) (4 )% Commercial real estate 5,457,349 5,396,912 5,155,323 60,437 1 % 302,026 6 % Commercial construction 386,999 382,615 336,276 4,384 1 % 50,723 15 % Business banking 1,085,763 1,087,799 1,090,492 (2,036 ) — % (4,729 ) — % Total commercial loans 9,964,179 9,954,835 9,733,037 9,344 — % 231,142 2 % Residential real estate 2,565,485 2,550,861 2,460,849 14,624 1 % 104,636 4 % Consumer home equity 1,208,231 1,193,859 1,187,547 14,372 1 % 20,684 2 % Other consumer 235,533 219,720 194,098 15,813 7 % 41,435 21 % Total loans 13,973,428 13,919,275 13,575,531 54,153 — % 397,897 3 % Allowance for loan losses (148,993 ) (155,146 ) (142,211 ) 6,153 (4 )% (6,782 ) 5 % Unamortized prem./disc. and def. fees (25,068 ) (19,307 ) (13,003 ) (5,761 ) 30 % (12,065 ) 93 % Net loans 13,799,367 13,744,822 13,420,317 54,545 — % 379,050 3 % Federal Home Loan Bank stock, at cost 5,904 37,125 41,363 (31,221 ) (84 )% (35,459 ) (86 )% Premises and equipment 60,133 59,033 62,493 1,100 2 % (2,360 ) (4 )% Bank-owned life insurance 164,702 163,700 160,790 1,002 1 % 3,912 2 % Goodwill and other intangibles, net 566,205 566,709 568,009 (504 ) — % (1,804 ) — % Deferred income taxes, net 266,185 416,081 331,963 (149,896 ) (36 )% (65,778 ) (20 )% Prepaid expenses 183,073 156,113 165,368 26,960 17 % 17,705 11 % Other assets 536,267 527,873 426,863 8,394 2 % 109,404 26 % Assets of discontinued operations — 124,718 128,219 (124,718 ) (100 )% (128,219 ) (100 )% Total assets $ 21,133,278 $ 21,146,292 $ 22,646,858 $ (13,014 ) — % $ (1,513,580 ) (7 )% LIABILITIES AND SHAREHOLDERS' EQUITY Deposits: Demand $ 5,162,218 $ 5,177,015 $ 6,240,637 $ (14,797 ) — % $ (1,078,419 ) (17 )% Interest checking accounts 3,737,361 3,671,871 4,568,122 65,490 2 % (830,761 ) (18 )% Savings accounts 1,323,126 1,393,545 1,831,123 (70,419 ) (5 )% (507,997 ) (28 )% Money market investment 4,664,475 4,709,149 4,710,095 (44,674 ) (1 )% (45,620 ) (1 )% Certificates of deposit 2,709,037 2,472,589 1,624,382 236,448 10 % 1,084,655 67 % Total deposits 17,596,217 17,424,169 18,974,359 172,048 1 % (1,378,142 ) (7 )% Borrowed funds: Federal Home Loan Bank advances 17,738 673,525 704,084 (655,787 ) (97 )% (686,346 ) (97 )% Escrow deposits of borrowers 21,978 24,947 22,314 (2,969 ) (12 )% (336 ) (2 )% Interest rate swap collateral funds 8,500 16,900 14,430 (8,400 ) (50 )% (5,930 ) (41 )% Total borrowed funds 48,216 715,372 740,828 (667,156 ) (93 )% (692,612 ) (93 )% Other liabilities 513,990 525,378 424,951 (11,388 ) (2 )% 89,039 21 % Liabilities of discontinued operations — 34,820 34,930 (34,820 ) (100 )% (34,930 ) (100 )% Total liabilities 18,158,423 18,699,739 20,175,068 (541,316 ) (3 )% (2,016,645 ) (10 )% Shareholders' equity: Common shares 1,767 1,766 1,762 1 — % 5 — % Additional paid-in capital 1,666,441 1,661,136 1,649,141 5,305 — % 17,300 1 % Unallocated common shares held by the employee stock ownership plan ("ESOP") (132,755 ) (133,992 ) (137,696 ) 1,237 (1 )% 4,941 (4 )% Retained earnings 2,047,754 1,747,225 1,881,775 300,529 17 % 165,979 9 % Accumulated other comprehensive income ("AOCI"), net of tax (608,352 ) (829,582 ) (923,192 ) 221,230 (27 )% 314,840 (34 )% Total shareholders' equity 2,974,855 2,446,553 2,471,790 528,302 22 % 503,065 20 % Total liabilities and shareholders' equity $ 21,133,278 $ 21,146,292 $ 22,646,858 $ (13,014 ) — % $ (1,513,580 ) (7 )% EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Three months ended Three months ended Dec 31, 2023 change from three months ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 Sep 30, 2023 Dec 31, 2022 Interest and dividend income: △ $ △ % △ $ △ % Interest and fees on loans $ 168,419 $ 169,274 $ 142,446 $ (855 ) (1 )% $ 25,973 18 % Taxable interest and dividends on securities 23,782 24,191 30,413 (409 ) (2 )% (6,631 ) (22 )% Non-taxable interest and dividends on securities 1,434 1,434 1,594 — — % (160 ) (10 )% Interest on federal funds sold and other short-term investments 10,011 7,269 545 2,742 38 % 9,466 1737 % Total interest and dividend income 203,646 202,168 174,998 1,478 1 % 28,648 16 % Interest expense: Interest on deposits 67,389 59,607 17,457 7,782 13 % 49,932 286 % Interest on borrowings 2,950 5,356 7,547 (2,406 ) (45 )% (4,597 ) (61 )% Total interest expense 70,339 64,963 25,004 5,376 8 % 45,335 181 % Net interest income 133,307 137,205 149,994 (3,898 ) (3 )% (16,687 ) (11 )% Provision for allowance for loan losses 5,198 7,328 10,880 (2,130 ) (29 )% (5,682 ) (52 )% Net interest income after provision for allowance for loan losses 128,109 129,877 139,114 (1,768 ) (1 )% (11,005 ) (8 )% Noninterest income: Service charges on deposit accounts 7,514 7,403 6,834 111 1 % 680 10 % Trust and investment advisory fees 6,128 6,235 5,626 (107 ) (2 )% 502 9 % Debit card processing fees 3,398 3,388 3,227 10 — % 171 5 % Interest rate swap (losses) income (576 ) 1,695 (78 ) (2,271 ) (134 )% (498 ) 638 % Income (losses) from investments held in rabbi trusts 4,969 (1,523 ) 3,235 6,492 (426 )% 1,734 54 % Losses on sales of commercial and industrial loans (87 ) (2,651 ) — 2,564 (97 )% (87 ) — % (Losses) gains on sales of mortgage loans held for sale, net (219 ) (164 ) 8 (55 ) 34 % (227 ) (2838 )% Losses on sales of securities available for sale, net — — (683 ) — — % 683 (100 )% Other 5,612 4,774 4,256 838 18 % 1,356 32 % Total noninterest income 26,739 19,157 22,425 7,582 40 % 4,314 19 % Noninterest expense: Salaries and employee benefits 67,773 60,898 61,572 6,875 11 % 6,201 10 % Office occupancy and equipment 9,195 8,641 8,641 554 6 % 554 6 % Data processing 16,753 13,443 13,227 3,310 25 % 3,526 27 % Professional services 4,108 7,125 4,295 (3,017 ) (42 )% (187 ) (4 )% Marketing expenses 2,693 1,765 3,032 928 53 % (339 ) (11 )% Loan expenses 1,174 1,082 627 92 9 % 547 87 % Federal Deposit Insurance Corporation ("FDIC") insurance 13,486 2,808 1,540 10,678 380 % 11,946 776 % Amortization of intangible assets 505 504 299 1 — % 206 69 % Other 5,342 5,482 19,350 (140 ) (3 )% (14,008 ) (72 )% Total noninterest expense 121,029 101,748 112,583 19,281 19 % 8,446 8 % Income before income tax expense 33,819 47,286 48,956 (13,467 ) (28 )% (15,137 ) (31 )% Income tax expense (benefit) 2,310 (16,178 ) 8,038 18,488 (114 )% (5,728 ) (71 )% Net income from continuing operations $ 31,509 $ 63,464 $ 40,918 $ (31,955 ) (50 )% $ (9,409 ) (23 )% Net income (loss) from discontinued operations $ 286,994 $ (4,351 ) $ 1,376 $ 291,345 (6696 )% $ 285,618 20757 % Net income $ 318,503 $ 59,113 $ 42,294 $ 259,390 439 % $ 276,209 653 % Share data: Weighted average common shares outstanding, basic 162,571,066 162,370,469 162,032,522 200,597 0 % 538,544 0 % Weighted average common shares outstanding, diluted 162,724,398 162,469,887 162,263,547 254,511 0 % 460,851 0 % Earnings (loss) per share, basic: Continuing operations $ 0.19 $ 0.39 $ 0.25 $ (0.20 ) (51 )% $ (0.06 ) (24 )% Discontinued operations $ 1.77 $ (0.03 ) $ 0.01 $ 1.80 (6000 )% $ 1.76 17600 % Earnings per share, basic $ 1.96 $ 0.36 $ 0.26 $ 1.60 444 % $ 1.70 654 % Earnings (loss) per share, diluted: Continuing operations $ 0.19 $ 0.39 $ 0.25 $ (0.20 ) (51 )% $ (0.06 ) (24 )% Discontinued operations $ 1.76 $ (0.03 ) $ 0.01 $ 1.79 (5967 )% $ 1.75 17500 % Earnings per share, diluted $ 1.95 $ 0.36 $ 0.26 $ 1.59 442 % $ 1.69 650 % EASTERN BANKSHARES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME Twelve months ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Dec 31, 2022 Change Interest and dividend income: △ $ △ % Interest and fees on loans $ 652,095 $ 476,041 $ 176,054 37 % Taxable interest and dividends on securities 101,233 118,690 (17,457 ) (15 )% Non-taxable interest and dividends on securities 5,736 7,179 (1,443 ) (20 )% Interest on federal funds sold and other short-term investments 37,395 3,271 34,124 1043 % Total interest and dividend income 796,459 605,181 191,278 32 % Interest expense: Interest on deposits 226,075 28,621 197,454 690 % Interest on borrowings 19,975 8,506 11,469 135 % Total interest expense 246,050 37,127 208,923 563 % Net interest income 550,409 568,054 (17,645 ) (3 )% Provision for allowance for loan losses 20,052 17,925 2,127 12 % Net interest income after provision for allowance for loan losses 530,357 550,129 (19,772 ) (4 )% Noninterest income: Service charges on deposit accounts 28,631 30,392 (1,761 ) (6 )% Trust and investment advisory fees 24,264 23,593 671 3 % Debit card processing fees 13,469 12,644 825 7 % Interest rate swap income 1,536 6,009 (4,473 ) (74 )% Income (losses) from investments held in rabbi trusts 9,305 (10,762 ) 20,067 (186 )% Losses on sales of commercial and industrial loans (2,738 ) — (2,738 ) — % (Losses) gains on sales of mortgage loans held for sale, net (507 ) 248 (755 ) (304 )% Losses on sales of securities available for sale, net (333,170 ) (3,157 ) (330,013 ) 10453 % Other 21,457 17,783 3,674 21 % Total noninterest (loss) income (237,753 ) 76,750 (314,503 ) (410 )% Noninterest expense: Salaries and employee benefits 253,037 233,097 19,940 9 % Office occupancy and equipment 35,992 37,445 (1,453 ) (4 )% Data processing 55,308 52,938 2,370 4 % Professional services 17,385 15,805 1,580 10 % Marketing expenses 7,592 9,294 (1,702 ) (18 )% Loan expenses 4,466 6,384 (1,918 ) (30 )% Federal Deposit Insurance Corporation ("FDIC") insurance 21,874 6,250 15,624 250 % Amortization of intangible assets 1,804 1,198 606 51 % Other 21,144 26,238 (5,094 ) (19 )% Total noninterest expense 418,602 388,649 29,953 8 % (Loss) income before income tax expense (125,998 ) 238,230 (364,228 ) (153 )% Income tax (benefit) expense (63,309 ) 51,719 (115,028 ) (222 )% Net (loss) income from continuing operations (62,689 ) 186,511 (249,200 ) (134 )% Net income from discontinued operations 294,866 13,248 281,618 2126 % Net income $ 232,177 $ 199,759 $ 32,418 16 % Share data: Weighted average common shares outstanding, basic 162,293,020 165,510,357 (3,217,337 ) (2 )% Weighted average common shares outstanding, diluted 162,403,097 165,648,571 (3,245,474 ) (2 )% Earnings (loss) per share, basic: Continuing operations $ (0.39 ) $ 1.13 $ (1.52 ) (135 )% Discontinued operations $ 1.82 $ 0.08 $ 1.74 2175 % Earnings per share, basic $ 1.43 $ 1.21 $ 0.22 18 % Earnings (loss) per share, diluted: Continuing operations $ (0.39 ) $ 1.13 $ (1.52 ) (135 )% Discontinued operations $ 1.82 $ 0.08 $ 1.74 2175 % Earnings per share, diluted $ 1.43 $ 1.21 $ 0.22 18 % EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS As of and for the three months ended Dec 31, 2023 Sep 30, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Avg. Balance Interest Yield / Cost (5) Avg. Balance Interest Yield / Cost (5) Avg. Balance Interest Yield / Cost (5) Interest-earning assets: Loans (1): Commercial $ 9,978,154 $ 126,128 5.01 % $ 9,988,712 $ 128,051 5.09 % $ 9,528,386 $ 108,015 4.50 % Residential 2,573,032 23,546 3.63 % 2,553,150 22,988 3.57 % 2,313,810 18,837 3.23 % Consumer 1,411,374 22,835 6.42 % 1,386,350 22,227 6.36 % 1,363,858 18,949 5.51 % Total loans 13,962,560 172,509 4.90 % 13,928,212 173,266 4.94 % 13,206,054 145,801 4.38 % Investment securities 5,670,742 25,609 1.79 % 5,777,173 26,009 1.79 % 8,422,385 32,432 1.53 % Federal funds sold and other short-term investments 720,384 10,011 5.51 % 537,602 7,269 5.36 % 63,408 545 3.41 % Total interest-earning assets 20,353,686 208,129 4.06 % 20,242,987 206,544 4.05 % 21,691,847 178,778 3.27 % Non-interest-earning assets 834,391 1,033,879 653,158 Total assets $ 21,188,077 $ 21,276,866 $ 22,345,005 Interest-bearing liabilities: Deposits: Savings $ 1,352,239 $ 45 0.01 % $ 1,441,636 $ 43 0.01 % $ 1,924,840 $ 57 0.01 % Interest checking 3,753,352 7,080 0.75 % 3,903,062 6,302 0.64 % 4,871,089 4,897 0.40 % Money market 4,735,917 29,390 2.46 % 4,836,895 27,695 2.27 % 4,778,694 9,919 0.82 % Time deposits 2,656,313 30,874 4.61 % 2,341,684 25,567 4.33 % 563,735 2,584 1.82 % Total interest-bearing deposits 12,497,821 67,389 2.14 % 12,523,277 59,607 1.89 % 12,138,358 17,457 0.57 % Borrowings 242,437 2,950 4.83 % 414,252 5,356 5.13 % 795,527 7,547 3.76 % Total interest-bearing liabilities 12,740,258 70,339 2.19 % 12,937,529 64,963 1.99 % 12,933,885 25,004 0.77 % Demand deposit accounts 5,210,185 5,257,704 6,495,817 Other noninterest-bearing liabilities 555,034 541,827 495,129 Total liabilities 18,505,477 18,737,060 19,924,831 Shareholders' equity 2,682,600 2,539,806 2,420,174 Total liabilities and shareholders' equity $ 21,188,077 $ 21,276,866 $ 22,345,005 Net interest income - FTE $ 137,790 $ 141,581 $ 153,774 Net interest rate spread (2) 1.87 % 2.06 % 2.50 % Net interest-earning assets (3) $ 7,613,428 $ 7,305,458 $ 8,757,962 Net interest margin - FTE (4) 2.69 % 2.77 % 2.81 % (1) Includes non-accrual loans. (2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (4) Net interest margin - FTE represents fully-taxable equivalent net interest income* divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income. (5) Presented on an annualized basis. EASTERN BANKSHARES, INC. AND SUBSIDIARIES AVERAGE BALANCES, INTEREST EARNED/PAID, & AVERAGE YIELDS As of and for the twelve months ended Dec 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Avg. Balance Interest Yield / Cost Avg. Balance Interest Yield / Cost Interest-earning assets: Loans (1): Commercial $ 9,913,968 $ 491,427 4.96 % $ 9,147,540 $ 366,097 4.00 % Residential 2,538,588 90,139 3.55 % 2,064,609 63,803 3.09 % Consumer 1,381,745 86,167 6.24 % 1,327,417 56,965 4.29 % Total loans 13,834,301 667,733 4.83 % 12,539,566 486,865 3.88 % Non-taxable investment securities 197,682 7,279 3.68 % 253,651 9,091 3.58 % Taxable investment securities 6,050,024 101,233 1.67 % 8,413,217 118,690 1.41 % Total investment securities 6,247,706 108,512 1.74 % 8,666,868 127,781 1.47 % Federal funds sold and other short-term investments 720,864 37,395 5.19 % 420,834 3,271 0.78 % Total interest-earning assets 20,802,871 813,640 3.91 % 21,627,268 617,917 2.86 % Non-interest-earning assets 921,622 986,865 Total assets $ 21,724,493 $ 22,614,133 Interest-bearing liabilities: Deposits: Savings $ 1,515,713 $ 217 0.01 % $ 2,015,651 $ 209 0.01 % Interest checking 4,070,585 24,235 0.60 % 4,890,709 11,675 0.24 % Money market 4,918,343 104,002 2.11 % 5,057,445 13,479 0.27 % Time deposits 2,303,520 97,621 4.24 % 463,261 3,258 0.70 % Total interest-bearing deposits 12,808,161 226,075 1.77 % 12,427,066 28,621 0.23 % Borrowings 418,884 19,975 4.77 % 256,632 8,506 3.31 % Total interest-bearing liabilities 13,227,045 246,050 1.86 % 12,683,698 37,127 0.29 % Demand deposit accounts 5,404,208 6,647,518 Other noninterest-bearing liabilities 522,239 451,384 Total liabilities 19,153,492 19,782,600 Shareholders' equity 2,571,001 2,831,533 Total liabilities and shareholders' equity $ 21,724,493 $ 22,614,133 Net interest income - FTE $ 567,590 $ 580,790 Net interest rate spread (2) 2.05 % 2.57 % Net interest-earning assets (3) $ 7,575,826 $ 8,943,570 Net interest margin - FTE (4) 2.73 % 2.69 % (1) Includes non-accrual loans. (2) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. (3) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities. (4) Net interest margin - FTE represents fully-taxable equivalent net interest income* divided by average total interest-earning assets. Please refer to Appendix B to this press release for a reconciliation of fully-taxable equivalent net interest income. EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - NON-PERFORMING ASSETS (1) As of Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Non-accrual loans: Commercial $ 35,107 $ 31,703 $ 14,178 $ 17,271 $ 21,474 Residential 8,725 8,075 8,796 9,603 9,750 Consumer 8,725 7,687 7,584 7,699 7,380 Total non-accrual loans 52,557 47,465 30,558 34,573 38,604 Total accruing loans past due 90 days or more: — — — — — Total non-performing loans 52,557 47,465 30,558 34,573 38,604 Other real estate owned — — — — — Other non-performing assets: — — — — — Total non-performing assets (1) $ 52,557 $ 47,465 $ 30,558 $ 34,573 $ 38,604 Total accruing troubled debt restructured ("TDR") (2) $ — $ — $ — $ — $ 28,834 Total non-performing loans to total loans 0.38 % 0.34 % 0.22 % 0.25 % 0.28 % Total non-performing assets to total assets 0.25 % 0.22 % 0.14 % 0.15 % 0.17 % (1) Non-performing assets are comprised of NPLs, other real estate owned ("OREO"), and non-performing securities. NPLs consist of non-accrual loans and loans that are more than 90 days past due but still accruing interest. OREO consists of real estate properties, which primarily serve as collateral to secure the Company’s loans, that it controls due to foreclosure or acceptance of a deed in lieu of foreclosure. (2) The Company adopted ASU 2022-02 on January 1, 2023 which eliminated the TDR recognition and measurement guidance. Accordingly, the Company had no TDRs to report as of March 31, 2023 and subsequent periods. EASTERN BANKSHARES, INC. AND SUBSIDIARIES ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE-OFFS (RECOVERIES) Three months ended Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Average total loans $ 13,961,061 $ 13,926,194 $ 13,803,292 $ 13,633,165 $ 13,203,450 Allowance for loan losses, beginning of the period 155,146 147,955 140,938 142,211 131,663 Total cumulative effect of change in accounting principle (1): — — — (1,143 ) — Charged-off loans: Commercial and industrial 2 11 — — 256 Commercial real estate 8,008 — — — — Commercial construction — — — — — Business banking 3,745 303 254 343 370 Residential real estate — — — — — Consumer home equity — — — 7 1 Other consumer 536 731 591 561 515 Total charged-off loans 12,291 1,045 845 911 1,142 Recoveries on loans previously charged-off: Commercial and industrial 11 120 26 139 248 Commercial real estate 190 2 2 4 38 Commercial construction — — — — — Business banking 573 609 204 481 391 Residential real estate 34 30 18 15 14 Consumer home equity 1 39 — 1 8 Other consumer 131 108 111 116 111 Total recoveries 940 908 361 756 810 Net loans charged-off (recoveries): Commercial and industrial (9 ) (109 ) (26 ) (139 ) 8 Commercial real estate 7,818 (2 ) (2 ) (4 ) (38 ) Commercial construction — — — — — Business banking 3,172 (306 ) 50 (138 ) (21 ) Residential real estate (34 ) (30 ) (18 ) (15 ) (14 ) Consumer home equity (1 ) (39 ) — 6 (7 ) Other consumer 405 623 480 445 404 Total net loans charged-off 11,351 137 484 155 332 Provision for allowance for loan losses 5,198 7,328 7,501 25 10,880 Total allowance for loan losses, end of period $ 148,993 $ 155,146 $ 147,955 $ 140,938 $ 142,211 Net charge-offs to average total loans outstanding during this period (2) 0.32 % 0.00 % 0.01 % 0.00 % 0.01 % Allowance for loan losses as a percent of total loans 1.07 % 1.12 % 1.06 % 1.03 % 1.05 % Allowance for loan losses as a percent of nonperforming loans 283.49 % 326.86 % 484.18 % 407.65 % 368.38 % (1) For the quarter ended March 31, 2023, represents the adjustment needed to reflect the cumulative day one impact pursuant to the Company’s adoption of ASU 2022-02 (i.e., cumulative effect adjustment related to the adoption of ASU 2022-02 as of January 1, 2023). The adjustment represents a $1.1 million decrease to the allowance attributable to the change in accounting methodology for estimating the allowance for loan losses resulting from the Company’s adoption of the standard. (2) Presented on an annualized basis. APPENDIX A: Reconciliation of Non-GAAP Earnings Metrics (1) For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of and for the Three Months Ended (Unaudited, dollars in thousands, except per-share data) Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 Net income (loss) from continuing operations (GAAP) $ 31,509 $ 63,464 $ 44,419 $ (202,081 ) $ 40,918 Add: Noninterest income components: (Income) losses from investments held in rabbi trusts (4,969 ) 1,523 (3,002 ) (2,857 ) (3,235 ) Losses on sales of securities available for sale, net — — — 333,170 683 (Gains) losses on sales of other assets — (2 ) — 5 10 Noninterest expense components: Rabbi trust employee benefit expense (income) 1,740 (586 ) 1,314 1,274 1,103 Merger and acquisition expenses 1,865 3,630 — — — Defined Benefit Plan settlement loss — — — — 12,045 Total impact of non-GAAP adjustments (1,364 ) 4,565 (1,688 ) 331,592 10,606 Less net tax benefit associated with non-GAAP adjustments (2) 13,270 15,944 1,639 76,377 2,954 Non-GAAP adjustments, net of tax $ (14,634 ) $ (11,379 ) $ (3,327 ) $ 255,215 $ 7,652 Operating net income (non-GAAP) $ 16,875 $ 52,085 $ 41,092 $ 53,134 $ 48,570 Weighted average common shares outstanding during the period: Basic 162,571,066 162,370,469 162,232,236 161,991,373 162,032,522 Diluted 162,724,398 162,469,887 162,246,675 162,059,431 162,263,547 Earnings (losses) per share from continuing operations, basic: $ 0.19 $ 0.39 $ 0.27 $ (1.25 ) $ 0.25 Earnings (losses) per share from continuing operations, diluted: $ 0.19 $ 0.39 $ 0.27 $ (1.25 ) $ 0.25 Operating earnings per share, basic (non-GAAP) $ 0.10 $ 0.32 $ 0.25 $ 0.33 $ 0.30 Operating earnings per share, diluted (non-GAAP) $ 0.10 $ 0.32 $ 0.25 $ 0.33 $ 0.30 Return on average assets (3) 0.59 % 1.18 % 0.81 % (3.64 )% 0.73 % Add: (Income) losses from investments held in rabbi trusts (3) (0.09 )% 0.03 % (0.05 )% (0.05 )% (0.06 )% Losses on sales of securities available for sale, net (3) 0.00 % 0.00 % 0.00 % 6.00 % 0.01 % (Gains) losses on sales of other assets (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Rabbi trust employee benefit expense (income) (3) 0.03 % (0.01 )% 0.02 % 0.02 % 0.02 % Merger and acquisition expenses (3) 0.03 % 0.07 % 0.00 % 0.00 % 0.00 % Defined Benefit Plan settlement loss (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.21 % Less net tax benefit associated with non-GAAP adjustments (2) (3) 0.25 % 0.30 % 0.03 % 1.38 % 0.05 % Operating return on average assets (non-GAAP) (3) 0.31 % 0.97 % 0.75 % 0.95 % 0.86 % Return on average shareholders' equity (3) 4.66 % 9.91 % 6.85 % (33.31 )% 6.71 % Add: (Income) losses from investments held in rabbi trusts (3) (0.73 )% 0.24 % (0.46 )% (0.47 )% (0.53 )% Losses on sales of securities available for sale, net (3) 0.00 % 0.00 % 0.00 % 54.92 % 0.11 % (Gains) losses on sales of other assets (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Rabbi trust employee benefit expense (income) (3) 0.26 % (0.09 )% 0.20 % 0.21 % 0.18 % Merger and acquisition expenses (3) 0.28 % 0.57 % 0.00 % 0.00 % 0.00 % Defined Benefit Plan settlement loss (3) 0.00 % 0.00 % 0.00 % 0.00 % 1.97 % Less net tax benefit associated with non-GAAP adjustments (2) (3) 1.96 % 2.49 % 0.25 % 12.59 % 0.48 % Operating return on average shareholders' equity (non-GAAP) (3) 2.51 % 8.14 % 6.34 % 8.76 % 7.96 % Average tangible shareholders' equity: Average total shareholders' equity (GAAP) $ 2,682,600 $ 2,539,806 $ 2,599,325 $ 2,460,170 $ 2,420,174 Less: Average goodwill and other intangibles 597,234 658,591 659,825 660,795 661,841 Average tangible shareholders' equity (non-GAAP) $ 2,085,366 $ 1,881,215 $ 1,939,500 $ 1,799,375 $ 1,758,333 Return on average tangible shareholders' equity (non-GAAP) (3) 5.99 % 13.38 % 9.19 % (45.55 )% 9.23 % Add: (Income) losses from investments held in rabbi trusts (3) (0.95 )% 0.32 % (0.62 )% (0.64 )% (0.73 )% Losses on sales of securities available for sale, net (3) 0.00 % 0.00 % 0.00 % 75.09 % 0.15 % (Gains) losses on sales of other assets (3) 0.00 % 0.00 % 0.00 % 0.00 % 0.00 % Rabbi trust employee benefit expense (income) (3) 0.33 % (0.12 )% 0.27 % 0.29 % 0.25 % Merger and acquisition expenses (3) 0.35 % 0.77 % 0.00 % 0.00 % 0.00 % Defined Benefit Plan settlement loss (3) 0.00 % 0.00 % 0.00 % 0.00 % 2.72 % Less net tax benefit associated with non-GAAP adjustments (2) (3) 2.52 % 3.36 % 0.34 % 17.21 % 0.67 % Operating return on average tangible shareholders' equity (non-GAAP) (3) 3.20 % 10.99 % 8.50 % 11.98 % 10.95 % (1) Average assets, average shareholders' equity, average goodwill and other intangibles, and average tangible shareholders' equity components presented in this table include discontinued operations. (2) The net tax benefit (expense) associated with these items is generally determined by assessing whether each item is included or excluded from net taxable income and applying our combined statutory tax rate only to those items included in net taxable income. The net tax benefit for the three months ended December 31, 2023 was primarily due to the tax benefit from state tax strategies associated with the utilization of capital losses as a result of the sale of securities in the first quarter of 2023, described further below. Upon the sale of securities in the first quarter of 2023, we established a valuation allowance of $17.4 million, as it was determined at that time that it was not more-likely-than-not that the entirety of the deferred tax asset related to the loss on such securities would be realized. Included in that $17.4 million was $2.8 million in expected lost state tax benefits. Following the execution of the sale of our insurance agency business in October 2023 and the resulting capital gain, coupled with tax planning strategies, a state tax benefit of $13.6 million was realized on the security sale losses. (3) Presented on an annualized basis. APPENDIX B: Reconciliation of Non-GAAP Operating Revenues and Expenses For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." Three Months Ended Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands) Net interest income (GAAP) $ 133,307 $ 137,205 $ 141,588 $ 138,309 $ 149,994 Add: Tax-equivalent adjustment (non-GAAP) (1) 4,483 4,376 3,877 4,445 3,780 Fully-taxable equivalent net interest income (non-GAAP) $ 137,790 $ 141,581 $ 145,465 $ 142,754 $ 153,774 Noninterest income (loss) (GAAP) $ 26,739 $ 19,157 $ 26,204 $ (309,853 ) $ 22,425 Less: Income (losses) from investments held in rabbi trusts 4,969 (1,523 ) 3,002 2,857 3,235 Losses on sales of securities available for sale, net — — — (333,170 ) (683 ) Gains (losses) on sales of other assets — 2 — (5 ) (10 ) Noninterest income on an operating basis (non-GAAP) $ 21,770 $ 20,678 $ 23,202 $ 20,465 $ 19,883 Noninterest expense (GAAP) $ 121,029 $ 101,748 $ 99,934 $ 95,891 $ 112,583 Less: Rabbi trust employee benefit expense (income) 1,740 (586 ) 1,314 1,274 1,103 Merger and acquisition expenses 1,865 3,630 — — — Defined Benefit Plan settlement loss — — — — 12,045 Noninterest expense on an operating basis (non-GAAP) $ 117,424 $ 98,704 $ 98,620 $ 94,617 $ 99,435 Total revenue (loss) (GAAP) $ 160,046 $ 156,362 $ 167,792 $ (171,544 ) $ 172,419 Total operating revenue (non-GAAP) $ 159,560 $ 162,259 $ 168,667 $ 163,219 $ 173,657 Efficiency ratio (GAAP) 75.62 % 65.07 % 59.56 % (55.90 )% 65.30 % Operating efficiency ratio (non-GAAP) 73.59 % 60.83 % 58.47 % 57.97 % 57.26 % (1) Interest income on tax-exempt loans and investment securities has been adjusted to a FTE basis using a marginal tax rate of 21.9%, 21.7%, 21.8%, 21.7%, and 21.6% for the three months ended December 31, 2023, September 30, 2023, June 30, 2023, March 31, 2023, and December 31, 2022, respectively. APPENDIX C: Reconciliation of Non-GAAP Capital Metrics For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of Dec 31, 2023 Sep 30, 2023 Jun 30, 2023 Mar 31, 2023 Dec 31, 2022 (Unaudited, dollars in thousands, except per-share data) Tangible shareholders' equity: Total shareholders' equity (GAAP) $ 2,974,855 $ 2,446,553 $ 2,526,772 $ 2,579,123 $ 2,471,790 Less: Goodwill and other intangibles (1) 566,205 657,824 658,993 660,165 661,126 Tangible shareholders' equity (non-GAAP) 2,408,650 1,788,729 1,867,779 1,918,958 1,810,664 Tangible assets: Total assets (GAAP) 21,133,278 21,146,292 21,583,493 22,720,530 22,646,858 Less: Goodwill and other intangibles (1) 566,205 657,824 658,993 660,165 661,126 Tangible assets (non-GAAP) $ 20,567,073 $ 20,488,468 $ 20,924,500 $ 22,060,365 $ 21,985,732 Shareholders' equity to assets ratio (GAAP) 14.08 % 11.57 % 11.71 % 11.35 % 10.91 % Tangible shareholders' equity to tangible assets ratio (non-GAAP) 11.71 % 8.73 % 8.93 % 8.70 % 8.24 % Common shares outstanding 176,426,993 176,376,675 176,376,675 176,328,426 176,172,073 Book value per share (GAAP) $ 16.86 $ 13.87 $ 14.33 $ 14.63 $ 14.03 Tangible book value per share (non-GAAP) $ 13.65 $ 10.14 $ 10.59 $ 10.88 $ 10.28 (1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023 and preceding periods. APPENDIX D: Tangible Shareholders’ Equity Roll Forward Analysis For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures." As of Change from Dec 31, 2023 Sep 30, 2023 Sep 30, 2023 (Unaudited, dollars in thousands, except per-share data) Common stock $ 1,767 $ 1,766 $ 1 Additional paid in capital 1,666,441 1,661,136 5,305 Unallocated ESOP common stock (132,755 ) (133,992 ) 1,237 Retained earnings 2,047,754 1,747,225 300,529 AOCI, net of tax - available for sale securities (584,243 ) (763,871 ) 179,628 AOCI, net of tax - pension 7,462 6,021 1,441 AOCI, net of tax - cash flow hedge (31,571 ) (71,732 ) 40,161 Total shareholders' equity: $ 2,974,855 $ 2,446,553 $ 528,302 Less: Goodwill and other intangibles (1) 566,205 657,824 (91,619 ) Tangible shareholders' equity (non-GAAP) $ 2,408,650 $ 1,788,729 $ 619,921 Common shares outstanding 176,426,993 176,376,675 50,318 Per share: Common stock $ 0.01 $ 0.01 $ — Additional paid in capital 9.45 9.42 0.03 Unallocated ESOP common stock (0.75 ) (0.76 ) 0.01 Retained earnings 11.61 9.91 1.70 AOCI, net of tax - available for sale securities (3.31 ) (4.33 ) 1.02 AOCI, net of tax - pension 0.04 0.03 0.01 AOCI, net of tax - cash flow hedge (0.18 ) (0.41 ) 0.23 Total shareholders' equity: $ 16.86 $ 13.87 $ 2.99 Less: Goodwill and other intangibles (1) 3.21 3.73 (0.52 ) Tangible shareholders' equity (non-GAAP) $ 13.65 $ 10.14 $ 3.51 (1) Includes goodwill and other intangible assets of discontinued operations as of September 30, 2023. 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Investor Contact Jillian Belliveau Eastern Bankshares, Inc. InvestorRelations@easternbank.com 781-598-7920 Media Contact Andrea Goodman Eastern Bank a.goodman@easternbank.com 781-598-7847