Business Wire | Jan 28, 2021 11:55PM EST

Eastern Bankshares, Inc. Reports Fourth Quarter 2020 Financial Results

Jan. 29, 2021

BOSTON--(BUSINESS WIRE)--Jan. 29, 2021--Eastern Bankshares, Inc. (the "Company," or together with its affiliates and subsidiaries, "Eastern") (NASDAQ Global Select Market: EBC), the stock holding company of Eastern Bank, today announced 2020 fourth quarter financial results and the initiation of a quarterly cash dividend.

Concurrent with its mutual-to-stock conversion and as described in the prospectus for its initial public offering ("IPO"), the Company made a one-time donation of 7.5 million shares of common stock to the Eastern Bank Charitable Foundation ("EBCF") at a total market value of $91.3 million. This contribution resulted in a net loss of $44.1 million for the fourth quarter of 2020, or $0.26 per share, compared to net income of $28.5 million reported for the prior quarter. Operating net income* was $31.6 million for the quarter, or $0.18 per share, for the fourth quarter of 2020, compared to $32.3 million reported for the prior quarter.

"We are very pleased with our operating results for the fourth quarter as well as our dividend initiation, and thank our colleagues for their outstanding efforts," said Bob Rivers, Chief Executive Officer and Chair of the Board of Eastern Bankshares, Inc. and Eastern Bank. "We are thrilled to have completed our stock offering and to be trading publicly, which are major steps forward in building upon our more than 202-year history of providing competitive financial products and services and an outstanding customer experience. As I reflect on the year, I'm especially proud of the 8,800 Paycheck Protection Program ("PPP") loans totaling $1.1 billion that we delivered to businesses in need, the third most among lenders in Massachusetts. This is all being accomplished during the COVID-19 pandemic which has had, and continues to have, an adverse effect on our customers, colleagues and the markets in which we operate. We continue to carefully monitor and adapt to it, while keeping the safety and well-being of our colleagues and customers a priority."

"The transformative, one-time donation of $91.3 million of stock to the Eastern Bank Charitable Foundation, a condition of the stock offering, positions our Foundation to continue to support the communities we serve and address society's most vexing challenges in a meaningful way," added Rivers.

The Company also announced the initiation of a quarterly cash dividend of $0.06 per share as part of its capital management strategy.

Rivers continued, "Given our Company's current strength and our history of generating strong cash flows, we believe that we can both invest in the business and return capital to shareholders. Our initiation of a quarterly dividend demonstrates our confidence in our ability to drive growth and effectively deploy capital while delivering value to our shareholders."

SELECTED FINANCIAL HIGHLIGHTS

* Net loss was $44.1 million, or $0.26 per share, for the fourth quarter due to the stock contribution to the EBCF. * Operating net income* was $31.6 million, or $0.18 per share, for the fourth quarter. * Book value and tangible book value per share* were $18.36 and $16.34, respectively, at December 31, 2020. * At December 31, 2020, $332.7 million in loan balances remained under modified payment terms due to the COVID-19 pandemic, down from $701.2 million at September 30, 2020. Provision for credit losses was $900 thousand in the fourth quarter compared to $700 thousand in the prior quarter.

BALANCE SHEET

Total assets were $16.0 billion at December 31, 2020, representing an increase of $503.6 million or 3% from September 30, 2020.

* Available-for-sale securities increased $976.2 million, or 44% on a consecutive quarter basis, to $3.2 billion, as excess liquidity was deployed into U.S. Agency securities. Cash and equivalents declined to $2.1 billion from $2.3 billion, a $274.0 million quarter over quarter decline. * Total loans were $9.7 billion, representing a decrease of $213.7 million or 2% from the prior quarter as paydowns outpaced new originations. The main contributing factor was the forgiveness or paydown of PPP loans which totaled $97.4 million for the fourth quarter, reducing total PPP loans to $1.0 billion. * Deposits totaled $12.2 billion representing a decrease of $1.2 billion, or 9%, from September 30, 2020. The decline in deposits resulted primarily from the use of funds on deposit by certain deposit holders to satisfy their stock subscription orders during the Company's IPO in the fourth quarter. * Shareholders' equity was $3.4 billion, representing an increase of $1.7 billion or 100% from the prior quarter. The increase was attributable to the capital raised during the Company's mutual-to-stock conversion and IPO completed on October 14, 2020. * As previously disclosed, the Company converted its defined benefit plan to a cash balance defined benefit plan during the period which resulted in a $54.9 million after-tax increase to other comprehensive income and shareholders' equity. * At December 31, 2020, book value per share was $18.36 and tangible book value per share* was $16.34. Please refer to Appendix H for a quarter over quarter comparison of equity accounts.

NET INTEREST INCOME

Net interest income was $103.6 million for the fourth quarter, compared to $98.7 million in the prior quarter, representing an increase of $4.9 million. Included in net interest income in the fourth quarter was a favorable $3.8 million nonrecurring item. Also included in net interest income was $4.1 million and $6.1 million of SBA PPP fee accretion net of deferred cost amortization in the third and fourth quarters, respectively. The increase in PPP fee recognition on a consecutive quarter basis was attributable to an increase in PPP loan forgiveness rates in the fourth quarter. Between September 30 and December 31, 2020, $97.4 million in PPP loans were forgiven through the SBA or otherwise paid down.

The net interest margin on a fully tax equivalent (FTE) basis* was 2.84% for the fourth quarter, representing a 20 basis points decrease from the prior quarter primarily due to the Company's excess liquidity.

Please refer to Appendix E for a four-quarter trend analysis of the adjusted core margin*.

NONINTEREST INCOME

Noninterest income was $49.6 million for the fourth quarter, compared to $47.7 million for the prior quarter, representing an increase of $1.9 million.

* Insurance commissions increased $0.6 million to $22.4 million in the fourth quarter, compared to $21.9 million in the prior quarter and included a $1.2 million nonrecurring item. * Service charges on deposit accounts increased $1.0 million on a consecutive quarter basis to $6.0 million, primarily driven by higher account analysis service charges. * Loan-level interest rate swap revenue was $2.5 million in the fourth quarter, compared to $1.3 million in the prior quarter, representing an increase of $1.2 million primarily driven by an increase in the fair value of these interest rate swap transactions. * Income on securities held in rabbi trust accounts was $5.5 million in the fourth quarter compared to $3.8 million in the prior quarter, an increase of $1.7 million as strong equity market gains continued in the fourth quarter. * Mortgage origination activity was strong in the fourth quarter with the gain on sale of loans totaling $3.3 million, up $1.1 million from the prior quarter. This was mostly offset by a $3.1 million reduction in the gain/loss on commitments to sell mortgage loans which is recorded in other income.

Please refer to Appendix B for a reconciliation of operating revenues and expenses.

NONINTEREST EXPENSE

Noninterest expense was $199.2 million for the fourth quarter representing an increase of $89.4 million, or 81%, from the prior quarter noninterest expense of $109.8 million. Fourth quarter noninterest expense included costs associated with the Company's mutual-to-stock conversion. Excluding expenses related to the mutual-to-stock conversion and certain other non-operating items, noninterest expense on an operating basis* for the third and fourth quarters was $100.8 million and $101.8 million, respectively.

* Charitable contributions expense in the fourth quarter included $91.3 million in expense from the donation of shares of the Company to the EBCF in connection with the Company's mutual-to-stock conversion and IPO. The Company established a $12.0 million deferred tax valuation allowance in connection with the contribution. * Salaries and benefits were $70.3 million in the fourth quarter, representing an increase of $3.7 million from the prior quarter primarily due to employee stock ownership plan ("ESOP") contribution expense of $2.4 million and higher defined contribution supplemental employee retirement plan expense associated with the mark-to-market increase in rabbi trust accounts of $1.4 million noted above. * Other noninterest expense declined from $12.6 million in the prior quarter to $6.2 million in the fourth quarter, a decline of $6.4 million. The Company recorded impairment charges on tax credit investments of $7.6 million and $3.2 million in the third and fourth quarter, respectively. Included in other noninterest expense are components of the Company's pension expense which were $1.3 million lower in the fourth quarter compared to the prior quarter. However, this was offset by an increase in pension service cost which is included in salary and benefit expense.

Please refer to Appendix B for a reconciliation of operating revenues and expenses.

ASSET QUALITY

The allowance for credit losses was $113.0 million at December 31, 2020, or 1.16% of total loans, compared to $115.4 million or 1.16% of total loans at September 30, 2020. The Company recorded a fourth quarter provision for credit losses of $0.9 million, compared to $0.7 million in the prior quarter. The Company followed the incurred loss allowance GAAP accounting model at December 31, 2020 and all preceding periods.

Non-performing loans totaled $43.3 million at December 31, 2020 compared to $44.8 million at the end of the prior quarter. The consecutive quarter decline was driven by reduction in nonperforming residential mortgage loans of $0.7 million, a reduction in nonperforming consumer loans of $0.6 million, and a reduction in nonperforming commercial loans of $0.3 million. During the fourth quarter of 2020, the Company recorded total net charge-offs of $3.3 million, or 0.13% of average total loans on an annualized basis compared to $1.9 million and 0.08% in the prior quarter, respectively.

Through June 30, 2020, approximately $946.0 million of loans had been modified due to COVID-19. Loans were modified on full or partial payment deferral pursuant to the criteria established in federal requirements for COVID-19-related loan relief. Most modifications were for a term of six months. At December 31, 2020, approximately $332.7 million in COVID-19 modified loans remained under modified payment terms, down from $701.2 million at September 30, 2020.

Please refer to Appendix F and Appendix G for detail on the Company's lending exposure to industries which management believes are most likely to experience adverse effects of the COVID-19 pandemic, as well as a detailed breakout on COVID-19 related loan modifications.

CONFERENCE CALL INFORMATION

A conference call and webcast covering Eastern's fourth quarter 2020 earnings will be held on Friday, January 29, 2021 at 9:00 a.m. Eastern Time. To register for the conference call, please visit the Company's Investor Relations website at investor.easternbank.com. After registration, a confirmation will be sent through email, including dial in details and unique conference call codes to access the call. Participants are encouraged to register for the conference call at least one day in advance, although registration will be available through the conclusion of the call. The conference call will be simultaneously webcast. Participants may join the webcast on the Company's Investor Relations website. A replay of the webcast will be made available on demand on this site.

DIVIDEND INITIATED

The Company's Board of Directors declared a quarterly cash dividend of $0.06 per common share, payable on March 15, 2021, to shareholders of record as of the close of business on March 3, 2021. The Company expects to continue paying quarterly dividends, the declaration, timing and amounts of which remain subject to the discretion of the Company's Board of Directors.

ANNOUNCEMENT OF THE 2021 ANNUAL MEETING OF SHAREHOLDERS

The Company's Board of Directors has set the date and time for its 2021 annual meeting of shareholders to be 12:00 p.m. Eastern Time on Monday, May 17, 2021. The annual meeting will be held at the Company's offices at 265 Franklin Street, Boston, Massachusetts and over the Internet in a virtual meeting format. The record date for shareholders entitled to vote at the meeting will be Monday, March 12, 2021. Shareholders of record will receive additional details and instructions for meeting participation in the proxy materials that will be made available to them in early April.

ABOUT EASTERN BANKSHARES, INC.

Eastern Bankshares, Inc. (NASDAQ Global Select Market: EBC) is the stock holding company for Eastern Bank. Founded in 1818, Boston-based Eastern Bank has more than 110 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island, and as of December 31, 2020, Eastern Bank had approximately $16.0 billion in total assets. Eastern provides banking, investment and insurance products and services for consumers and businesses of all sizes, including through its Eastern Wealth Management division and its Eastern Insurance Group subsidiary. Eastern takes pride in its outspoken advocacy and community support that has exceeded $140 million in charitable giving since 1999. An inclusive company, Eastern employs 1,800+ 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 businesses as well as underlying trends that may, to some extent, be obscured by inclusion of such items in the corresponding GAAP financial measures.

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, the operating efficiency ratio, and the ratio of noninterest income to total revenue on an operating basis. 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) expenses indirectly associated with the Company's IPO, (vii) other real estate owned gains, (viii) merger and acquisition expenses, and (ix) the stock donation to the EBCF in connection with the Company's mutual-to-stock conversion and IPO. The Company does not provide an outlook for its total noninterest expense because it contains expense components, such as expense associated with rabbi trust accounts, which is market-driven, over which the Company cannot exercise control. Accordingly a reconciliation of the Company's outlook for its noninterest expense on an operating basis to an outlook for total noninterest expense cannot be made available without unreasonable effort.

Management also presents the Company's core net interest margin which excludes the impact of items management determines as being one-time in nature or not indicative of its core operating results. Such items include the impact of excess liquidity in the form of excess cash volume, PPP loans originated in response to the COVID-19 pandemic, and material purchase accounting adjustments. Similarly, management presents certain asset quality metrics excluding PPP loans which it does not consider to be part of the Company's core portfolios. These metrics include the ratio of total nonperforming loans to total loans excluding PPP loans, the ratio of the allowance for loan losses to total loans excluding PPP loans, and the ratio of annualized net charge-offs to average total loans excluding PPP loans. The Company anticipates that the vast majority of its PPP loans outstanding at December 31, 2020 will be forgiven during 2021, and to the extent not forgiven, a PPP loan is intended to be 100% guaranteed by the SBA.

Management also presents tangible assets, tangible shareholders' equity, tangible book value per share, and the ratio of tangible shareholders' equity to tangible assets, 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 a 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" 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 developments in the Company's market relating to the COVID-19 pandemic, including the severity and duration of the associated economic slowdown, 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 the interest rate environment, general economic conditions or conditions within the securities markets, and legislative and regulatory changes that could adversely affect the business in which the Company and its subsidiary Eastern Bank are engaged. For further discussion of such factors, please see the Company's most recent reports on Forms S-1 and 10-Q filed with the U.S. Securities and Exchange Commission (the "SEC") and available on the SEC's website at www.sec.gov.

Further, given its ongoing and dynamic nature, it is difficult to predict what continued effects the COVID-19 pandemic will have on the Company's business and results of operations. The COVID-19 pandemic and the related local and national economic disruption may result in a continued decline in demand for the Company's products and services; increased levels of loan delinquencies, problem assets and foreclosures; an increase in the Company's allowance for loan losses; a decline in the value of loan collateral, including real estate; a greater decline in the yield on the Company's interest-earning assets than the decline in the cost of the Company's interest-bearing liabilities; and increased cybersecurity risks, as employees continue to work remotely. Accordingly, you should not place undue reliance on forward-looking statements, which reflect the Company's expectations only as of the date of this document. The Company does not undertake any obligation to update forward-looking statements.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

Certain information in this 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 inthousands, Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019except pershareamounts)



Earnings data

Net interest $ 103,608 $ 98,742 $ 98,755 $ 100,146 $ 100,921 income

Noninterest 49,638 47,709 47,657 33,369 47,277 income

Total revenue 153,246 146,451 146,412 133,515 148,198

Noninterest 199,169 109,817 100,765 95,172 105,619 expense

Pre-tax,pre-provision (45,923 ) 36,634 45,647 38,343 42,579 (loss) income

Provision for 900 700 8,600 28,600 1,800 credit losses

Pre-tax (46,823 ) 35,934 37,047 9,743 40,779 (loss) income

Net (loss) (44,062 ) 28,505 29,850 8,445 31,238 income

Operating netincome 31,612 32,322 27,301 10,858 29,878 (non-GAAP)



Per-share data

(Loss)earnings per $ (0.26 ) n.a. n.a. n.a. n.a.share

Operatingearnings per $ 0.18 n.a. n.a. n.a. n.a.share(non-GAAP)

Book value $ 18.36 n.a. n.a. n.a. n.a.per share

Tangible bookvalue per $ 16.34 n.a. n.a. n.a. n.a.share(non-GAAP)



Profitability

Return onaverage (1.11 ) % 0.80 % 0.88 % 0.29 % 1.08 %assets (1)

Operatingreturn onaverage 0.79 % 0.90 % 0.81 % 0.38 % 1.03 %assets(non-GAAP)(1)

Return onaverage (5.61 ) % 6.65 % 7.11 % 2.08 % 7.69 %shareholders'equity (1)

Operatingreturn onaverageshareholders' 4.02 % 7.54 % 6.51 % 2.67 % 7.35 %equity(non-GAAP)(1)

Net interestmargin (FTE) 2.84 % 3.04 % 3.23 % 3.80 % 3.83 %(1)

Cost of 0.03 % 0.06 % 0.11 % 0.23 % 0.26 %deposits

Fee income 32.39 % 32.58 % 32.55 % 24.99 % 31.90 %ratio

Efficiency 129.97 % 74.99 % 68.82 % 71.28 % 71.27 %ratio

Operatingefficiency 68.33 % 69.95 % 68.90 % 69.54 % 71.10 %ratio(non-GAAP)



Balance Sheet(end of period)

Total assets $ 15,964,190 $ 15,460,594 $ 13,996,523 $ 12,343,754 $ 11,628,775

Total loans 9,706,989 9,911,494 9,979,616 9,080,743 8,981,481 (2)

Total 12,155,784 13,332,585 11,846,765 10,309,011 9,551,392 deposits

Total loans /total 79.85 % 74.34 % 84.24 % 88.09 % 94.03 %deposits

PPP loans (2) $ 1,007,487 $ 1,098,883 $ 1,072,312 $ - $ -



Asset quality

Allowance forloan losses $ 113,031 $ 115,432 $ 116,636 $ 109,138 $ 82,297 (ALLL)

ALLL / totalnonperforming 261.33 % 257.47 % 210.55 % 222.34 % 188.00 %loans (NPLs)

Total NPLs / 0.45 % 0.45 % 0.56 % 0.54 % 0.49 %total loans

Total NPLs /total loans(excl. PPP 0.50 % 0.51 % 0.62 % 0.54 % 0.49 %loans)(non-GAAP)

Netcharge-offs(NCOs) / 0.13 % 0.08 % 0.04 % 0.08 % 0.11 %average totalloans (1)

NCOs /average totalloans (excl. 0.15 % 0.09 % 0.05 % 0.08 % 0.11 %PPP loans)(non-GAAP)(1)

RemainingCOVID-19 loan $ 332,682 $ 701,227 $ 945,995 $ - $ - modifications(3)



Capital adequacy

Shareholders'equity / 21.47 % 11.08 % 12.10 % 13.47 % 13.76 %assets

Tangibleshareholders'equity / 19.58 % 8.87 % 9.67 % 10.74 % 10.86 %tangibleassets(non-GAAP)



(1) Presented on an annualized basis.

(2) Includes unamortized premiums, net of unearned discounts and deferred fees.

(3) SeeAppendix G:COVID-19 Related LoanModifications

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

As of Dec 31, 2020 change from

(Unaudited, Dec 31, Sep 30, Dec 31,dollars in 2020 2020 2019 Sep 30, 2020 Dec 31, 2019thousands)

ASSETS ? $ ? % ? $ ? %

Cash and due $ 116,591 $ 69,051 $ 135,503 47,540 69 % (18,912 ) (14 ) %from banks

Short-term 1,937,479 2,259,033 227,099 (321,554 ) (14 ) % 1,710,380 753 %investments

Cash and cash 2,054,070 2,328,084 362,602 (274,014 ) (12 ) % 1,691,468 466 %equivalents

Securitiesheld for - - 961 - - % (961 ) (100 ) %trading

Available forsale 3,183,861 2,207,672 1,508,236 976,189 44 % 1,675,625 111 %securities

Total 3,183,861 2,207,672 1,509,197 976,189 44 % 1,674,664 111 %securities

Loans held 1,140 4,649 26 (3,509 ) (75 ) % 1,114 4285 %for sale

Loans:

Commercialand 1,995,016 2,177,216 1,642,184 (182,200 ) (8 ) % 352,832 21 %industrial

Commercial 3,573,630 3,652,312 3,535,441 (78,682 ) (2 ) % 38,189 1 %real estate

Commercial 305,708 297,508 273,774 8,200 3 % 31,934 12 %construction

Business 1,339,164 1,251,573 771,498 87,591 7 % 567,666 74 %banking

Totalcommercial 7,213,518 7,378,609 6,222,897 (165,091 ) (2 ) % 990,621 16 %loans

Residential 1,370,957 1,373,237 1,428,630 (2,280 ) - % (57,673 ) (4 ) %real estate

Consumer home 868,270 890,771 933,088 (22,501 ) (3 ) % (64,818 ) (7 ) %equity

Other 277,780 301,624 402,431 (23,844 ) (8 ) % (124,651 ) (31 ) %consumer

Total Loans 9,730,525 9,944,241 8,987,046 (213,716 ) (2 ) % 743,479 8 %

Allowance for (113,031 ) (115,432 ) (82,297 ) 2,401 (2 ) % (30,734 ) 37 %loan losses

Unamortizedprem./disc. (23,536 ) (32,747 ) (5,565 ) 9,211 (28 ) % (17,971 ) 323 %and def. fees

Net Loans 9,593,958 9,796,062 8,899,184 (202,104 ) (2 ) % 694,774 8 %

Federal HomeLoan Bank 8,805 8,805 9,027 - - % (222 ) (2 ) %stock, atcost

Premises and 49,398 50,539 57,453 (1,141 ) (2 ) % (8,055 ) (14 ) %equipment

Bank-ownedlife 78,561 78,058 77,546 503 1 % 1,015 1 %insurance

Goodwill andother 376,534 375,632 377,734 902 - % (1,200 ) - %intangibles,net

Deferredincome taxes, 13,229 19,925 28,207 (6,696 ) (34 ) % (14,978 ) (53 ) %net

Prepaid 148,680 92,473 61,336 56,207 61 % 87,344 142 %expenses

Other assets 455,954 498,695 246,463 (42,741 ) (9 ) % 209,491 85 %

Total Assets 15,964,190 15,460,594 11,628,775 503,596 3 % 4,335,415 37 %

LIABILITIES AND SHAREHOLDERS' EQUITY

Deposits:

Demand 4,910,794 6,312,479 3,517,447 (1,401,685 ) (22 ) % 1,393,347 40 %

Interestchecking 2,380,497 2,207,266 1,814,327 173,231 8 % 566,170 31 %accounts

Savings 1,256,736 1,217,898 971,119 38,838 3 % 285,617 29 %accounts

Money market 3,348,898 3,315,198 2,919,360 33,700 1 % 429,538 15 %investment

Certificate 258,859 279,744 329,139 (20,885 ) (7 ) % (70,280 ) (21 ) %of deposits

Total 12,155,784 13,332,585 9,551,392 (1,176,801 ) (9 ) % 2,604,392 27 %deposits

Borrowed funds:

Federal funds - - 201,082 - - % (201,082 ) (100 ) %purchased

Federal HomeLoan Bank 14,624 14,773 18,964 (149 ) (1 ) % (4,340 ) (23 ) %advances

Escrowdeposits of 13,425 14,664 15,349 (1,239 ) (8 ) % (1,924 ) (13 ) %borrowers

Totalborrowed 28,049 29,437 235,395 (1,388 ) (5 ) % (207,346 ) (88 ) %funds

Other 352,305 385,200 241,835 (32,895 ) (9 ) % 110,470 46 %liabilities

Total 12,536,138 13,747,222 10,028,622 (1,211,084 ) (9 ) % 2,507,516 25 %Liabilities

Shareholders' equity:

Common stock 1,868 - - 1,868 - % 1,868 - %

Additionalpaid-in 1,854,068 - - 1,854,068 - % 1,854,068 - %capital

UnallocatedESOP common (147,725 ) - - (147,725 ) - % (147,725 ) - %stock

Retained 1,665,607 1,709,669 1,644,000 (44,062 ) (3 ) % 21,607 1 %earnings

Accumulatedothercomprehensive 54,234 3,703 (43,847 ) 50,531 1365 % 98,081 (224 ) %income(AOCI), netof tax

Totalshareholders' 3,428,052 1,713,372 1,600,153 1,714,680 100 % 1,827,899 114 %equity

Totalliabilitiesand 15,964,190 15,460,594 11,628,775 503,596 3 % 4,335,415 37 %shareholders'equity

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Three months ended Three months ended Dec 31, 2020 change from three months ended

(Unaudited,dollars in Sep 30, Dec 31,thousands, Dec 31, 2020 2020 2019 Sep 30, 2020 Dec 31, 2019except sharedata)



Interest anddividend ? $ ? % ? $ ? %income:

Interest and $ 93,767 $ 90,704 $ 97,364 3,063 3 % (3,597 ) (4 ) %fees on loans

Taxableinterest anddividends on 8,493 7,554 7,932 939 12 % 561 7 %available forsalesecurities

Non-taxableinterest anddividends on 1,879 1,883 1,951 (4 ) - % (72 ) (4 ) %available forsalesecurities

Interest onfederal fundssold and 584 372 720 212 57 % (136 ) (19 ) %othershort-terminvestments

Interest anddividends on - - 6 - - % (6 ) (100 ) %tradingsecurities

Totalinterest and 104,723 100,513 107,973 4,210 4 % (3,250 ) (3 ) %dividendincome

Interest expense:

Interest on 1,070 1,727 6,115 (657 ) (38 ) % (5,045 ) (83 ) %deposits

Interest on 45 44 937 1 2 % (892 ) (95 ) %borrowings

Totalinterest 1,115 1,771 7,052 (656 ) (37 ) % (5,937 ) (84 ) %expense

Net interest 103,608 98,742 100,921 4,866 5 % 2,687 3 %income

Provision forallowance for 900 700 1,800 200 29 % (900 ) (50 ) %credit losses

Net interestincome after 102,708 98,042 99,121 4,666 5 % 3,587 4 %provision forcredit losses

Noninterest income:

Insurance 22,437 21,884 20,168 553 3 % 2,269 11 %commissions

Servicecharges on 6,046 5,052 6,853 994 20 % (807 ) (12 ) %depositaccounts

Trust andinvestment 5,502 5,311 5,058 191 4 % 444 9 %advisory fees

Debit cardprocessing 2,749 2,721 2,666 28 1 % 83 3 %fees

Interest rateswap income 2,538 1,319 4,691 1,219 92 % (2,153 ) (46 ) %(losses)

Income(losses) frominvestments 5,535 3,800 3,164 1,735 46 % 2,371 75 %held in rabbitrusts

(Losses)gains ontrading (1 ) - - (1 ) - % (1 ) - %securities,net

Gains onsales ofmortgage 3,334 2,219 342 1,115 50 % 2,992 875 %loans heldfor sale, net

Gains onsales ofsecurities 3 - - 3 - % 3 - %available forsale, net

Other 1,495 5,403 4,335 (3,908 ) (72 ) % (2,840 ) (66 ) %

Totalnoninterest 49,638 47,709 47,277 1,929 4 % 2,361 5 %income

Noninterest expense:

Salaries andemployee 70,310 66,593 61,317 3,717 6 % 8,993 15 %benefits

Officeoccupancy and 8,198 8,294 10,592 (96 ) (1 ) % (2,394 ) (23 ) %equipment

Data 11,354 11,721 12,806 (367 ) (3 ) % (1,452 ) (11 ) %processing

Professional 5,307 5,510 4,750 (203 ) (4 ) % 557 12 %services

Charitable 91,288 - 3,040 91,288 - % 88,248 2903 %contributions

Marketing 2,823 1,943 3,266 880 45 % (443 ) (14 ) %

Loan expenses 2,025 1,554 1,436 471 30 % 589 41 %

FDIC 946 938 78 8 1 % 868 1113 %insurance

Amortizationof intangible 755 699 885 56 8 % (130 ) (15 ) %assets

Other 6,163 12,565 7,449 (6,402 ) (51 ) % (1,286 ) (17 ) %

Totalnoninterest 199,169 109,817 105,619 89,352 81 % 93,550 89 %expense

(Loss) Incomebefore income (46,823 ) 35,934 40,779 (82,757 ) (230 ) % (87,602 ) (215 ) %tax (benefit)expense

Income tax(benefit) (2,761 ) 7,429 9,541 (10,190 ) (137 ) % (12,302 ) (129 ) %expense

Net (loss) (44,062 ) 28,505 31,238 (72,567 ) (255 ) % (75,300 ) (241 ) %income



Share data:

Weightedaverage 171,812,535 n.a. n.a. common sharesoutstanding

(Loss)earnings per $ (0.26 ) n.a. n.a. share

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Twelve months ended

(Unaudited, dollars in Dec 31,thousands, except share Dec 31, 2020 2019 Changedata)



Interest and dividend ? $ ? %income:

Interest and fees on loans $ 372,152 $ 402,092 (29,940 ) (7 ) %

Taxable interest anddividends on available for 31,825 31,400 425 1 %sale securities

Non-taxable interest anddividends on available for 7,588 8,306 (718 ) (9 ) %sale securities

Interest on federal fundssold and other short-term 1,757 2,977 (1,220 ) (41 ) %investments

Interest and dividends on 6 242 (236 ) (98 ) %trading securities

Total interest and dividend 413,328 445,017 (31,689 ) (7 ) %income

Interest expense:

Interest on deposits 11,315 27,301 (15,986 ) (59 ) %

Interest on borrowings 762 6,452 (5,690 ) (88 ) %

Total interest expense 12,077 33,753 (21,676 ) (64 ) %

Net interest income 401,251 411,264 (10,013 ) (2 ) %

Provision for allowance for 38,800 6,300 32,500 516 %credit losses

Net interest income after 362,451 404,964 (42,513 ) (10 ) %provision for credit losses

Noninterest income:

Insurance commissions 94,495 90,587 3,908 4 %

Service charges on deposit 21,560 27,043 (5,483 ) (20 ) %accounts

Trust and investment 21,102 19,653 1,449 7 %advisory fees

Debit card processing fees 10,277 10,452 (175 ) (2 ) %

Interest rate swap (losses) (1,381 ) 4,362 (5,743 ) (132 ) %income

Income from investments 10,337 9,866 471 5 %held in rabbi trusts

(Losses) gains on trading (4 ) 1,297 (1,301 ) (100 ) %securities, net

Gains on sales of mortgage 7,066 795 6,271 789 %loans held for sale, net

Gains on sales ofsecurities available for 288 2,016 (1,728 ) (86 ) %sale, net

Other 14,633 16,228 (1,595 ) (10 ) %

Total noninterest income 178,373 182,299 (3,926 ) (2 ) %

Noninterest expense:

Salaries and employee 261,827 252,238 9,589 4 %benefits

Office occupancy and 33,796 36,458 (2,662 ) (7 ) %equipment

Data processing 45,259 45,939 (680 ) (1 ) %

Professional services 18,902 15,958 2,944 18 %

Charitable contributions 95,272 12,905 82,367 638 %

Marketing 8,879 9,619 (740 ) (8 ) %

Loan expenses 6,727 4,593 2,134 46 %

FDIC insurance 3,734 1,878 1,856 99 %

Amortization of intangible 2,857 3,542 (685 ) (19 ) %assets

Other 27,670 29,554 (1,884 ) (6 ) %

Total noninterest expense 504,923 412,684 92,239 22 %

Income before income tax 35,901 174,579 (138,678 ) (79 ) %expense

Income tax expense 13,163 39,481 (26,318 ) (67 ) %

Net income 22,738 135,098 (112,360 ) (83 ) %



Share data:

Weighted average common 171,812,535 n.a. shares outstanding

Earnings per share $ 0.13 n.a.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN

As of and for the three months ended

Dec 31, 2020 Sep 30, 2020 Dec 31, 2019

Yield Yield Yield(Unaudited, dollars in Avg. Interest / Avg. Interest / Avg. Interest /thousands) Balance Cost Balance Cost Balance Cost (5) (5) (5)

Interest-earning assets:

Loans (1):

Commercial $ 7,265,156 $ 73,289 4.01 % $ 7,314,805 $ 69,127 3.76 % $ 6,179,761 $ 70,751 4.54 %

Residential 1,367,073 11,641 3.39 % 1,390,719 12,269 3.51 % 1,438,677 13,368 3.69 %

Consumer 1,164,468 9,621 3.29 % 1,209,340 10,091 3.32 % 1,360,677 14,021 4.09 %

Total loans 9,796,697 94,551 3.84 % 9,914,864 91,487 3.67 % 8,979,115 98,140 4.34 %

Investment securities 2,627,679 10,945 1.66 % 1,712,928 10,007 2.32 % 1,455,386 10,482 2.86 %

Cash and other short-term 2,291,118 584 0.10 % 1,462,047 372 0.10 % 173,906 720 1.64 %investments

Total interest earning 14,715,494 106,080 2.87 % 13,089,839 101,866 3.10 % 10,608,407 109,342 4.09 %assets

Non-interest-earning assets 1,123,550 1,139,440 897,539

Total assets $ 15,839,044 $ 14,229,279 $ 11,505,946



Interest-bearing liabilities:

Deposits:

Savings $ 1,232,669 $ 62 0.02 % $ 1,187,083 $ 62 0.02 % $ 970,019 $ 53 0.02 %

Interest checking 2,282,786 232 0.04 % 2,307,972 334 0.06 % 1,722,176 727 0.17 %

Money market 3,362,335 609 0.07 % 3,311,847 1,051 0.13 % 2,941,944 4,655 0.63 %

Time deposits 267,378 167 0.25 % 294,025 280 0.38 % 326,741 680 0.83 %

Total interest-bearing 7,145,168 1,070 0.06 % 7,100,927 1,727 0.10 % 5,960,880 6,115 0.41 %deposits

Borrowings 25,529 45 0.70 % 25,478 44 0.69 % 231,668 937 1.60 %

Total interest-bearing 7,170,697 1,115 0.06 % 7,126,405 1,771 0.10 % 6,192,548 7,052 0.45 %liabilities

Demand deposit accounts 5,167,221 5,034,474 3,474,922

Other non-interest-bearing 376,197 362,073 226,909 liabilities

Total liabilities 12,714,115 12,522,952 9,894,379

Shareholders' equity 3,124,929 1,706,327 1,611,567

Total liabilities and $ 15,839,044 $ 14,229,279 $ 11,505,946 shareholders' equity





Net interest income - FTE $ 104,965 $ 100,095 $ 102,290

Net interest rate spread (2) 2.81 % 3.00 % 3.64 %

Net interest-earning assets $ 7,544,797 $ 5,963,434 $ 4,415,859 (3)

Net interest margin - FTE (4) 2.84 % 3.04 % 3.83 %







(1) Non-accrual loans are included in Loans.

(2) Net interest rate spread represents the difference between the weightedaverage yield on interest-earning assets and the weighted average cost ofinterest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets lesstotal interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average totalinterest-earning assets.

(5) Presented on an annualized basis.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

AVERAGE BALANCES, INTEREST, YIELDS AND RATES, AND NET INTEREST MARGIN

As of and for twelve months ended

Dec 31, 2020 Dec 31, 2019

(Unaudited, dollars in Yield Yieldthousands) Avg. Balance Interest / Avg. Balance Interest / Cost Cost

Interest-earning assets:

Loans (1):

Commercial $ 7,014,044 $ 281,816 4.02 % $ 6,089,410 $ 291,055 4.78 %

Residential 1,400,907 49,767 3.55 % 1,439,845 53,736 3.73 %

Consumer 1,236,893 43,729 3.54 % 1,419,692 60,009 4.23 %

Total loans 9,651,844 375,312 3.89 % 8,948,947 404,800 4.52 %

Investment securities 1,826,121 41,730 2.29 % 1,435,719 42,494 2.96 %

Cash and other short-term 1,288,714 1,758 0.14 % 144,856 2,977 2.06 %investments

Total interest earning 12,766,679 418,800 3.28 % 10,529,522 450,271 4.28 %assets

Non-interest-earning assets 1,097,064 874,588

Total assets $ 13,863,743 $ 11,404,110



Interest-bearing liabilities:

Deposits:

Savings $ 1,123,584 $ 242 0.02 % $ 991,244 $ 210 0.02 %

Interest checking 2,227,185 2,033 0.09 % 1,842,993 3,947 0.21 %

Money market 3,212,752 7,492 0.23 % 2,769,934 19,150 0.69 %

Time deposits 300,381 1,548 0.52 % 392,035 3,994 1.02 %

Total interest-bearing 6,863,902 11,315 0.16 % 5,996,206 27,301 0.46 %deposits

Borrowings 72,101 762 1.06 % 291,413 6,452 2.21 %

Total interest-bearing 6,936,003 12,077 0.17 % 6,287,619 33,753 0.54 %liabilities

Demand deposit accounts 4,535,066 3,369,375

Other non-interest-bearing 352,518 203,925 liabilities

Total liabilities 11,823,587 9,860,919

Shareholders' equity 2,040,156 1,543,191

Total liabilities and $ 13,863,743 $ 11,404,110 shareholders' equity





Net interest income - FTE $ 406,723 $ 416,518

Net interest rate spread (2) 3.11 % 3.74 %

Net interest-earning assets $ 5,830,676 $ 4,241,903 (3)

Net interest margin - FTE 3.19 % 3.96 %(4)







(1) Non-accrual loans are included in Loans.

(2) Net interest rate spread represents the difference between the weightedaverage yield on interest-earning assets and the weighted average cost ofinterest-bearing liabilities.

(3) Net interest-earning assets represent total interest-earning assets lesstotal interest-bearing liabilities.

(4) Net interest margin represents net interest income divided by average totalinterest-earning assets.



EASTERN BANKSHARES, INC. AND SUBSIDIARIES

ASSET QUALITY - NON-PERFORMING ASSETS (1)

As of

Dec 31, Sep 30, Jun 30, Mar 31, Dec 31, 2020 2020 2020 2020 2019

(Unaudited, dollars in thousands)

Non-accrual loans:

Commercial $ 30,059 $ 28,968 $ 31,273 $ 38,054 $ 34,093

Residential 6,815 7,419 11,693 5,594 5,598

Consumer 4,131 4,727 9,374 4,085 2,760

Total non-accrual loans 41,005 41,114 52,340 47,733 42,451

Accruing loans past due 90 days or more:

Commercial 1,959 3,384 2,802 1,345 1,315

Residential 279 326 244 - -

Consumer 9 9 9 9 9

Total accruing loans past 2,247 3,719 3,055 1,354 1,324 due 90 days or more

Total non-performing loans 43,252 44,833 55,395 49,087 43,775

Other real estate owned - 40 40 40 -

Other non-performing - - - - - assets:

Total non-performing assets $ 43,252 $ 44,873 $ 55,435 $ 49,127 $ 43,775

Total accruing troubled $ 41,095 $ 39,881 $ 40,691 $ 41,880 $ 48,623 debt restructured loans

Total non-performing loans 0.45 % 0.45 % 0.56 % 0.54 % 0.49 %to total loans

Total non-performing assets 0.27 % 0.29 % 0.40 % 0.40 % 0.38 %to total assets



(1) Non-performing assets are comprised of nonperforming loans ("NPLs"), otherreal estate owned ("OREO") and non-performing securities. NPLs consist ofnon-accrual loans and loans that are more than 90 days past due but stillaccruing interest. OREO consists of real estate properties, which primarilyserve as collateral to secure the Company's loans, that it controls due toforeclosure. These properties are recorded at the lower of cost or fair valueless estimated costs to sell on the date the Company obtains control.

EASTERN BANKSHARES, INC. AND SUBSIDIARIES

ASSET QUALITY - PROVISION, ALLOWANCE, AND NET CHARGE OFFS

Three months ended

Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019

(Unaudited,dollars in thousands)

Average total $ 9,796,697 $ 9,914,731 $ 9,875,110 $ 9,016,223 $ 8,979,115 loans

Allowance forloan losses, $ 115,432 $ 116,636 $ 109,138 $ 82,297 $ 83,022 beginning ofthe period

Charged-off loans:

Commercialand 1,603 140 27 - 851 industrial

Commercial - - 24 - - real estate

Commercial - - - - - construction

Business 1,433 1,179 1,198 1,337 1,534 banking

Residential - - - - - real estate

Consumer home 79 22 - 473 14 equity

Other 713 1,077 15 533 541 consumer

Totalcharged-off 3,828 2,418 1,264 2,343 2,940 loans

Recoveries onloans previouslycharged-off:

Commercialand 92 306 58 322 210 industrial

Commercial 220 4 5 1 2 real estate

Commercial - - - - - construction

Business 47 91 27 127 112 banking

Residential 9 43 13 60 17 real estate

Consumer home 100 31 8 14 8 equity

Other 59 39 51 60 66 consumer

Total 527 514 162 584 415 recoveries

Net loanscharged-off (recoveries):

Commercialand 1,511 (166 ) (31 ) (322 ) 641 industrial

Commercial (220 ) (4 ) 19 (1 ) (2 ) real estate

Commercial - - - - - construction

Business 1,386 1,088 1,171 1,210 1,422 banking

Residential (9 ) (43 ) (13 ) (60 ) (17 ) real estate

Consumer home (21 ) (9 ) (8 ) 459 6 equity

Other 654 1,038 (36 ) 473 475 consumer

Total netloans 3,301 1,904 1,102 1,759 2,525 charged-off

Provision for 900 700 8,600 28,600 1,800 loan losses

Totalallowance for $ 113,031 $ 115,432 $ 116,636 $ 109,138 $ 82,297 loan losses,end of period

Netcharge-offsto averagetotal loans 0.13 % 0.08 % 0.04 % 0.08 % 0.11 %outstandingduring thisperiod (1)

Allowance forloan lossesas a percent 1.16 % 1.16 % 1.17 % 1.20 % 0.92 %of totalloans

Allowance forloan lossesas a percent 261.33 % 257.47 % 210.55 % 222.34 % 188.00 %ofnonperformingloans



(1) Presented on an annualized basis.

APPENDIX A: Reconciliation of Non-GAAP Earnings Metrics

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."

Three Months Ended

(Unaudited,dollars inthousands, Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019except sharedata)



Net income $ (44,062 ) $ 28,505 $ 29,850 $ 8,445 $ 31,238 (GAAP)

Add:

Noninterestincome components:

(Income) lossfrominvestments (5,535 ) (3,800 ) (7,745 ) 6,743 (3,164 ) held in rabbitrusts

(Gain) losson sales ofsecurities (3 ) - (163 ) (122 ) - available forsale, net

(Gain) losson sale of (49 ) 71 27 (29 ) (29 ) other assets

Noninterestexpense components:

Rabbi trustemployeebenefit 2,838 1,445 3,985 (3,479 ) 1,554 expense(income)

Impairmentcharge on tax 3,189 7,590 - - - creditinvestments

Indirectinitialpublic - 549 380 270 - offeringcosts (1)

(Gain) losson sale of (61 ) (546 ) - - - other realestate owned

Merger andacquisition 90 - - - - expenses

Stockdonation tothe Eastern 91,287 - - - - BankCharitableFoundation

Total impactof non-GAAP 91,756 5,309 (3,516 ) 3,383 (1,639 ) adjustments

Less net taxbenefit(expense)associated 16,082 1,492 (967 ) 970 (279 ) with non-GAAPadjustment (2)

Non-GAAPadjustments, $ 75,674 $ 3,817 $ (2,549 ) $ 2,413 $ (1,360 ) net of tax

Operating netincome $ 31,612 $ 32,322 $ 27,301 $ 10,858 $ 29,878 (non-GAAP)



Weightedaveragecommon shares outstandingduring theperiod:

Basic 171,812,535 - - - -

Diluted 171,812,535 - - - -



(Loss)earnings per $ (0.26 ) n.a. n.a. n.a. n.a.share, basic

(Loss)earnings per $ (0.26 ) n.a. n.a. n.a. n.a.share,diluted



Operatingearnings per $ 0.18 n.a. n.a. n.a. n.a.share, basic(non-GAAP)

Operatingearnings pershare, $ 0.18 n.a. n.a. n.a. n.a.diluted(non-GAAP)



Return onaverage (1.11 ) % 0.80 % 0.88 % 0.29 % 1.08 %assets (3)

Add:

(Income) lossfrom ) ) ) )investments (0.14 % (0.11 % (0.23 % 0.23 % (0.11 %held in rabbitrusts (3)

(Gain) losson sales ofsecurities - % - % - % - % - %available forsale, net (3)

(Gain) losson sale of - % - % - % - % - %other assets(3)

Rabbi trustemployee )benefit 0.07 % 0.04 % 0.12 % (0.12 % 0.05 %expense(income) (3)

Impairmentcharge on taxcredit 0.08 % 0.21 % - % - % - %investments(3)

Indirectinitialpublic - % 0.02 % 0.01 % 0.01 % - %offeringcosts (1) (3)

(Gain) losson sale of )other real - % (0.02 % - % - % - %estate owned(3)

Merger andacquisition - % - % - % - % - %expenses (3)

Stockdonation to 2.29 % - % - % - % - %the EBCF (3)

Less net taxbenefit(expense) ) )associated 0.40 % 0.04 % (0.03 % 0.03 % (0.01 %with non-GAAPadjustment (2) (3)

Operatingreturn onaverage 0.79 % 0.90 % 0.81 % 0.38 % 1.03 %assets(non-GAAP)(3)



Return onaverage (5.61 ) % 6.65 % 7.11 % 2.08 % 7.69 %shareholders'equity (3)

Add:

(Income) lossfrom ) ) ) )investments (0.70 % (0.89 % (1.84 % 1.66 % (0.78 %held in rabbitrusts (3)

(Gain) losson sales of ) )securities - % - % (0.04 % (0.03 % - %available forsale, net (3)

(Gain) losson sale of (0.01 ) 0.02 % 0.01 % (0.01 ) (0.01 )other assets % % %(3)

Rabbi trustemployee )benefit 0.36 % 0.34 % 0.95 % (0.86 % 0.38 %expense(income) (3)

Impairmentcharge on taxcredit 0.41 % 1.77 % - % - % - %investments(3)

Indirectinitialpublic - % 0.13 % 0.09 % 0.07 % - %offeringcosts (1) (3)

(Gain) losson sale of ) )other real (0.01 % (0.13 % - % - % - %estate owned(3)

Merger andacquisition - % - % - % - % - %expenses (3)

Stockdonation to 11.62 % - % - % - % - %the EBCF (3)

Less net taxbenefit(expense) ) )associated 2.05 % 0.35 % (0.23 % 0.24 % (0.07 %with non-GAAPadjustment (2) (3)

Operatingreturn onaverageshareholders' 4.02 % 7.54 % 6.51 % 2.67 % 7.35 %equity(non-GAAP)(3)

(1) Reflects costs associated with the Company's initial public offering that are indirectly related to the offering and were not recorded as a reduction of capital.

(2) The net tax benefit (expense) associated with these items is determined by assessing whether each item is included or excluded from net taxable income and applying the Company's combined statutory tax rate only to those items included in net taxable income. Additionally, the net tax benefit (expense) for the impairment charge of tax credit investment includes associated tax credit benefits.

(3) Ratios have been annualized.

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."

(1) Reflects costs associated with the Company's initial public offering thatare indirectly related to the offering and were not recorded as a reduction ofcapital.

(2) The net tax benefit (expense) associated with these items is determined byassessing whether each item is included or excluded from net taxable income andapplying the Company's combined statutory tax rate only to those items includedin net taxable income. Additionally, the net tax benefit (expense) for theimpairment charge of tax credit investment includes associated tax creditbenefits.

(3) Ratios have been annualized.

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, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019

(Unaudited,dollars in thousands)

Net interest $ 103,608 $ 98,742 $ 98,755 $ 100,146 $ 100,921 income (GAAP)

Add:

Tax-equivalentadjustment 1,357 1,353 1,378 1,368 1,369 (non-GAAP)

Fully-taxableequivalent netinterest $ 104,965 $ 100,095 $ 100,133 $ 101,514 $ 102,290 income(non-GAAP)



Noninterest $ 49,638 $ 47,709 $ 47,657 $ 33,369 $ 47,277 income (GAAP)

Less:

Income (loss)frominvestments 5,535 3,800 7,745 (6,743 ) 3,164 held in rabbitrusts

Gain (loss) onsales ofsecurities 3 - 163 122 - available forsale, net

Gain (loss) onsale of other 49 (71 ) (27 ) 29 29 assets

Noninterestincome on anoperating $ 44,051 $ 43,980 $ 39,776 $ 39,961 $ 44,084 basis(non-GAAP)



Noninterest $ 199,169 $ 109,817 $ 100,765 $ 95,172 $ 105,619 expense (GAAP)

Less:

Rabbi trustemployeebenefit 2,838 1,445 3,985 (3,479 ) 1,554 expense(income)

Impairmentcharge on tax 3,189 7,590 - - - creditinvestments

Indirectinitial public - 549 380 270 - offering costs(1)

(Gain) loss onsale of other (61 ) (546 ) - - - real estateowned

Merger andacquisition 90 - - - - expenses

Stock donationto the EasternBank 91,287 - - - - CharitableFoundation

Noninterestexpense on anoperating $ 101,826 $ 100,779 $ 96,400 $ 98,381 $ 104,065 basis(non-GAAP)



Total revenue $ 153,246 $ 146,451 $ 146,412 $ 133,515 $ 148,198 (GAAP)

Totaloperating $ 149,016 $ 144,075 $ 139,909 $ 141,475 $ 146,374 revenue(non-GAAP)



Efficiency 129.97 % 74.99 % 68.82 % 71.28 % 71.27 %ratio (GAAP)

Operatingefficiency 68.33 % 69.95 % 68.90 % 69.54 % 71.10 %ratio(non-GAAP)



Noninterestincome / total 32.39 % 32.58 % 32.55 % 24.99 % 31.90 %revenue (GAAP)

Noninterestincome / totalrevenue on an 29.56 % 30.53 % 28.43 % 28.25 % 30.12 %operatingbasis (non-GAAP)





(1) Reflects costs associated with the Company's initial public offering thatare indirectly related to the offering and were not recorded as a reduction ofcapital.

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, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019

(Unaudited,dollars inthousands, except sharedata)

Tangibleshareholders' equity:

Totalshareholders' $ 3,428,052 $ 1,713,372 $ 1,693,630 $ 1,662,734 $ 1,600,153 equity (GAAP)

Less:Goodwill and 376,534 375,632 376,331 377,033 377,734 otherintangibles

Tangibleshareholders' 3,051,518 1,337,740 1,317,299 1,285,701 1,222,419 equity(non-GAAP)



Tangible assets:

Total assets 15,964,190 15,460,594 13,996,523 12,343,754 11,628,775 (GAAP)

Less:Goodwill and 376,534 375,632 376,331 377,033 377,734 otherintangibles

Tangibleassets $ 15,587,656 $ 15,084,962 $ 13,620,192 $ 11,966,721 $ 11,251,041 (non-GAAP)



Shareholders'equity to 21.5 % 11.1 % 12.1 % 13.5 % 13.8 %assets ratio(GAAP)

Tangibleshareholders'equity totangible 19.6 % 8.9 % 9.7 % 10.7 % 10.9 %assetsratio(non-GAAP)



Common shares 186,758,154 - - - - outstanding



Book valueper share $ 18.36 n.a. n.a. n.a. n.a.(GAAP)

Tangible bookvalue per $ 16.34 n.a. n.a. n.a. n.a.share(non-GAAP)

APPENDIX D: Reconciliation of Non-GAAP Credit Metrics

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."

As of

(Unaudited,dollars in Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019thousands)



Total loansexcluding PPP loans:

Total loans $ 9,706,989 $ 9,911,494 $ 9,979,616 $ 9,080,743 $ 8,981,481 (GAAP)

Less: PPP 1,007,487 1,098,883 1,072,312 - - loans

Total loansexcluding PPP $ 8,699,502 $ 8,812,611 $ 8,907,304 $ 9,080,743 $ 8,981,481 loans (non-GAAP)



Totalnonperforming $ 43,252 $ 44,833 $ 55,395 $ 49,087 $ 43,775 loans (NPLs)(GAAP)



Total NPLs /total loans 0.45 % 0.45 % 0.56 % 0.54 % 0.49 %(GAAP)

Total NPLs /total loans(excl. PPP 0.50 % 0.51 % 0.62 % 0.54 % 0.49 %loans) (non-GAAP)



Allowance forloan losses $ 113,031 $ 115,432 $ 116,636 $ 109,138 $ 82,297 (ALLL) (GAAP)



ALLL / total 1.16 % 1.16 % 1.17 % 1.20 % 0.92 %loans (GAAP)

ALLL / totalloans (excl.PPP loans) 1.30 % 1.31 % 1.31 % 1.20 % 0.92 %(non-GAAP)



As of and for the three months ended

(Unaudited,dollars in Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020 Dec 31, 2019thousands)



Average totalloans excluding PPPLoans:

Average total $ 9,796,697 $ 9,914,731 $ 9,875,110 $ 9,016,223 $ 8,979,115 loans (GAAP)

Less: Average 1,076,155 1,091,464 818,665 - - PPP loans

Average totalloansexcluding PPP $ 8,720,542 $ 8,823,267 $ 9,056,445 $ 9,016,223 $ 8,979,115 loans(non-GAAP)



Total netloans $ 3,301 $ 1,904 $ 1,102 $ 1,759 $ 2,525 charged-off(NCOs) (GAAP)



NCOs /Average total 0.13 % 0.08 % 0.04 % 0.08 % 0.11 %loans (GAAP)(1)

NCOs /Average totalloans (excl. 0.15 % 0.09 % 0.05 % 0.08 % 0.11 %PPP loans)(non-GAAP)(1)





(1) Presented on an annualized basis

Appendix E: Reconciliation of Non-GAAP Core Margin

For information on non-GAAP financial measures, please see the section titled "Non-GAAP Financial Measures."

As of and for the three months ended

Dec 31, 2020 Sep 30, 2020

(Unaudited, Margin Margindollars in Volume Interest Impact Volume Interest Impactthousands) (1) (1)



Reportedtotalaverageinterestearningsassets, net $ 14,715,494 $ 104,965 2.84 % $ 13,089,839 $ 100,095 3.04 %interestincome, andnetinterestmargin (2)

Non-GAAP adjustments:

PPP loanvolume (1,076,155 ) (2,741 ) 0.14 % (1,091,464 ) (2,795 ) 0.18 %earning 1%

SBA PPP loanfeeaccretion,net of - (6,102 ) (0.16 ) % - (4,125 ) (0.13 ) %deferredoriginationcostamortization

Excess cash (1,996,808 ) (502 ) 0.43 % (1,200,250 ) (302 ) 0.30 %(3)

Deferredloan fee - (3,774 ) (0.10 ) % - - - %incomeadjustment

Core margin(Non-GAAP) $ 11,642,531 $ 91,846 3.14 % $ 10,798,125 $ 92,873 3.42 %(4)



Core marginchange from (0.28 ) % (0.09 ) %priorquarter



Jun 30, 2020 Mar 31, 2020

Margin Margin Volume Interest Impact Volume Interest Impact (1) (1)



Reportedtotalaverageinterestearningsassets, net $ 12,479,343 $ 100,137 3.23 % $ 10,757,076 $ 101,513 3.80 %interestincome, andnetinterestmargin (2)

Non-GAAP adjustments:

PPP loanvolume (818,665 ) (2,175 ) 0.15 % - - - %earning 1%

SBA PPP loanfeeaccretion,net of - (3,655 ) (0.12 ) % - - - %deferredoriginationcostamortization

Excess cash (898,745 ) (223 ) 0.24 % (25,298 ) (54 ) 0.01 %(3)

Deferredloan fee - - - % - - - %incomeadjustment

Core margin(Non-GAAP) $ 10,761,933 $ 94,084 3.52 % $ 10,731,778 $ 101,459 3.80 %(4)



Core marginchange from (0.29 ) % priorquarter



(1) Presented on an annualized basis.

(2) Presented on an fully taxable equivalent basis.

(3) Cash above 2% of average total earning assets at yield of 10, 10, 10, and86 basis points in quarters four, three, two, and one, respectively.

(4) Core margin is the margin that results from the combined volume andinterest adjustments taken together.

APPENDIX F: Commercial Loan Portfolio Exposure to High-risk Industries

High-risk industries are those industries that the Company believes will likely experience the most adverse effects of COVID-19.

As of December 31, 2020

Balance as COVID-19 Loan balance a percent modificationIndustry (Dollars of total as a in thousands) loans percent of loan type

Retail (1) $ 496,358 5.1 % 2.1 %

Restaurants 197,388 2.0 % 12.7 %

Hotels 178,696 1.8 % 51.4 %

Construction contractors financing 89,466 0.9 % 1.0 %

Auto dealerships 79,486 0.8 % - %

Other high risk 85,132 0.9 % 2.7 %

All impacted industries total 1,126,526 11.6 % 11.6 %

Remaining commercial and business banking 6,086,992 62.6 % 2.8 %

Total Commercial and business banking 7,213,518 74.1 % 4.2 %

All Other Loans 2,517,007 25.9 % 1.3 %

Total $ 9,730,525 100.0 % 3.4 %



(1) The retail segment contains all retail commercial real estate loans andnon-essential commercial and industrial retail loans.

APPENDIX G: COVID-19 Related Loan Modifications

Total COVID-19 Remaining COVID-19 Remaining COVID-19 Modifications Modifications as of Modifications as of as of June 30, 2020 September December 30, 2020 (1) 31, 2020 (1)

% of % of % of(Dollars in Total Total Remaining Total Remaining Totalthousands) Modifications Loan Modifications Loan Modifications Loan Balance Balance Balance



Portfolio

Commercial and $ 157,384 6.9 % $ 99,630 4.6 % $ 34,076 1.7 %industrial

Commercial real 546,002 15.2 % 414,233 11.3 % 231,794 6.5 %estate

Commercial 12,890 4.6 % 13,330 4.5 % 10,987 3.6 %construction

Business Banking 106,886 8.7 % 64,369 5.1 % 23,434 1.8 %

Residential real 92,775 6.6 % 95,260 6.9 % 26,772 2.0 %estate

Consumer home 18,603 2.1 % 10,093 1.1 % 3,432 0.4 %equity

Other Consumer 11,455 3.4 % 4,312 1.4 % 2,187 0.8 %

Total $ 945,995 9.5 % $ 701,227 7.1 % $ 332,682 3.4 %



(1) Remaining COVID-19 modifications reflect those loans which underwent amodification and have not yet resumed payment. The Company defines a modifiedloan to have resumed payment if it is one month past the modification end dateand not more than 30 days past due.

APPENDIX H: Shareholders' Equity Roll-forward Analysis

As of Dec 31, 2020 change from

Dec 31, 2020 Sep 30, 2020 Sep 30, 2020

(Unaudited,dollars in ? ? perthousands, except shareper share amounts)



Common stock $ 1,868 $ - $ 1,868 $ 0.01

Additional paid in 1,854,068 - 1,854,068 9.93 capital

Unallocated ESOP (147,725 ) - (147,725 ) (0.79 ) common stock

Retained earnings 1,665,607 1,709,669 (44,062 ) (0.24 )

AOCI, net of tax -available for sale 45,672 43,956 1,716 0.01 securities

AOCI, net of tax - (21,253 ) (76,164 ) 54,911 0.29 pension

AOCI, net of tax - 29,815 35,911 (6,096 ) (0.03 ) cash flow hedge

Totalshareholders' $ 3,428,052 $ 1,713,372 $ 1,714,680 $ 9.18 equity:

Less: Goodwill and 376,534 375,632 902 - other intangibles

Tangibleshareholders' $ 3,051,518 $ 1,337,740 $ 1,713,778 $ 9.18 equity (non-GAAP)



Common shares 186,758,154 - outstanding



Per share:

Common stock $ 0.01 n.a.

Additional paid in 9.93 n.a. capital

Unallocated ESOP (0.79 ) n.a. common stock

Retained earnings 8.92 n.a.

AOCI, net of tax -available for sale 0.24 n.a. securities

AOCI, net of tax - (0.11 ) n.a. pension

AOCI, net of tax - 0.16 n.a. cash flow hedge

Totalshareholders' $ 18.36 n.a. equity:

Less: Goodwill and 2.02 n.a. other intangibles

Tangibleshareholders' $ 16.34 n.a. equity (non-GAAP)

View source version on businesswire.com: https://www.businesswire.com/news/home/20210128006223/en/

CONTACT: Investors

CONTACT: Jillian Belliveau Eastern Bankshares, Inc. InvestorRelations@easternbank.com 781-598-7920

CONTACT: Media

CONTACT: Andrea Goodman Eastern Bank a.goodman@easternbank.com 781-598-7847