Eastern Bankshares, Inc. Q4 FY2025 earnings call

• 2025 was a successful year with 62% increase in operating earnings, strong organic loan growth, and record wealth assets. • Merger with HarborOne in November 2025 strengthened presence in key markets. • Focus on organic growth, not pursuing acquisitions; allocate capital to organic growth and returning excess capital to shareholders. • Organic growth opportunities in commercial banking and wealth management; strategic talent investments. • Wealth assets at record $10.1 billion, driven by market appreciation and net flows. • Commercial lending platform a key differentiator, with strong culture and capabilities, delivering products/services of larger banks with local decision-making.

Net income for Q4 was $99.5 million or $0.46 per diluted share. Operating earnings were $94.7 million, up 28% linked quarter. Net interest income was $237.4 million, up $37.2 million from Q3. Noninterest income was $46.1 million, up $4.8 million from Q3. Wealth assets reached a record $10.1 billion, including $9.6 billion in assets under management. Period-end deposits totaled $25.5 billion, an increase of $4.4 billion from Q3. Period-end loans increased $4.7 billion linked quarter. Capital position remained strong with a CET1 ratio of 13.2%. Wealth fees in Q4 accounted for 40% of total operating noninterest income, driven by record wealth assets.

• 2026 loan growth anticipated 3%-5%, deposit growth 1%-2%. • Net interest income expected in the range of $1.20 billion to $1.50 billion with a full year FTE margin of 3.65% to 3.75%. • Provision expense expected $30 million to $40 million. • Operating noninterest income expected between $190 million and $200 million. • Operating noninterest expense expected in the range of $655 million to $675 million. • Full year tax rate on an operating basis expected to be approximately 23%; manage CET1 ratio towards 12%.

• Credit risks related to HarborOne loans, including some nonperforming loans in commercial real estate (CRE) and commercial and industrial (C&I) categories. However, these loans are well reserved, with a 35% reserve coverage on HarborOne NPLs, and plans in place for resolution in the first half of 2026.

Q: Drill down on margin and pipeline mix.

A: Margin forecast ramps up, with the guide including accretion from the HarborOne merger and former mergers. Pipeline is strong across commercial businesses, with about 50% in CRE (including community development lending) and ~45% in C&I.

Q: Outlook for provision.

A: Guidance for provision of $30 million to $40 million is similar to last year, with no material credit concerns identified.

Q: Pipeline mix and loan growth.

A: Pipeline remains strong across commercial banking, with a mix of CRE, community development lending, and C&I, and expects growth in first and second quarters.

Q: Margin and accretion.

A: Margin includes accretion from HarborOne and former mergers, with variability quarter-to-quarter but best estimates provided based on analytical work.

Q: Credit on HarborOne loans.

A: NPLs from HarborOne are mostly in CRE and one C&I loan, 35% reserved, with plans to resolve several in the first half of 2026.

Q: Fee income and mortgage banking.

A: Fee income could benefit from market appreciation in wealth management and mortgage rate changes; mortgage portfolio expected to be flat in 2026, favoring HELOC and commercial loan growth.

Q: CET1 ratio management.

A: Intend to manage CET1 ratio towards 12% through share repurchases and organic growth, with plans to seek additional share repurchase authorization subject to regulatory approval.

Q: Loan growth seasonality.

A: Q1 is typically slower, with more loan growth expected in later quarters as pipelines build.