Earnings call transcript: Eastern Bankshares Q3 2025 beats EPS expectations

Eastern Bankshares Inc. (NASDAQ:EBC) reported its third-quarter 2025 earnings, surpassing analyst expectations with an earnings per share (EPS) of $0.53, compared to the forecasted $0.40. This 32.5% surprise comes amid a slight revenue miss, as the company posted $245.1 million against a forecast of $245.93 million. According to InvestingPro data, analysts maintain a strong buy consensus with a target range of $17-23, suggesting potential upside. Despite the earnings beat, Eastern Bankshares’ stock fell by 2.67% in regular trading to $18.36, though it saw a modest 0.76% increase in premarket trading.

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Key Takeaways

• Eastern Bankshares reported a 32.5% EPS surprise, outperforming expectations.
• Revenue slightly missed forecasts, impacting market sentiment.
• The stock closed 2.67% lower but showed signs of recovery in premarket trading.
• The merger with HarborOne is set for completion by November 1.
• The company resumed its share repurchase program, targeting up to 11.9 million shares.

Company Performance

Eastern Bankshares demonstrated robust performance in the third quarter of 2025, with net income reaching $106.1 million. The company continues to strengthen its position as the largest independent bank headquartered in Massachusetts, focusing on organic growth and expanding its wealth management capabilities. The merger with HarborOne, scheduled to close on November 1, is expected to enhance the bank’s footprint south of Boston.

Financial Highlights

• Revenue: $245.1 million, slightly below the forecast of $245.93 million.
• Earnings per share: $0.53, beating the forecast of $0.40.
• Net interest income: $200.2 million.
• Operating return on assets: 1.16%, up 34 basis points year-over-year.
• Operating return on tangible common equity: 11.7%, up 300 basis points year-over-year.

Earnings vs. Forecast

Eastern Bankshares exceeded EPS expectations with a reported $0.53 compared to the forecasted $0.40, resulting in a 32.5% positive surprise. However, the company’s revenue of $245.1 million fell short of the anticipated $245.93 million, reflecting a minor 0.34% miss.

Market Reaction

Following the earnings announcement, Eastern Bankshares’ stock experienced a 2.67% decline, closing at $18.36. The stock, however, showed a slight recovery in premarket trading, rising by 0.76% to $18.50. This movement is within the context of the stock’s 52-week range, with a high of $19.4 and a low of $13.51.

Outlook & Guidance

Looking ahead, Eastern Bankshares maintains a positive outlook, targeting top-quartile financial performance and focusing on organic growth. The company anticipates margin stability with potential gradual improvement and expects deposit costs to remain somewhat elevated. Future EPS forecasts for the upcoming quarters range from $0.46 to $0.57, with annual projections at $1.58 for 2025 and $2.26 for 2026. InvestingPro’s Financial Health Score of 2.38 indicates fair overall health, with particularly strong momentum (2.98) and cash flow (2.82) metrics.

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Executive Commentary

Denis Sheahan, CEO of Eastern Bankshares, emphasized the bank’s strategic focus on organic growth and the benefits of the upcoming merger with HarborOne. "We are the leading local bank in Massachusetts, and this merger strengthens our presence south of Boston," Sheahan stated. He also highlighted the bank’s commitment to building on its organic growth and expanding wealth management opportunities.

Risks and Challenges

• Intense regional competition in the deposit market could pressure margins.
• Elevated deposit costs may persist, impacting profitability.
• Economic uncertainties could affect loan growth and asset quality.
• Integration risks associated with the HarborOne merger.
• Potential regulatory changes in the banking sector.

Q&A

During the earnings call, analysts inquired about the margin outlook and deposit competition. The management confirmed no immediate plans for additional mergers, reiterating a focus on organic growth and wealth management expansion.

Full transcript - Eastern Bankshares Inc (EBC) Q3 2025:

Joelle, Conference Call Operator, Eastern Bankshares, Inc.: Welcome to the Eastern Bankshares, Inc. Third Quarter 2025 Earnings Conference Call. Currently, all participant lines are in a listen-only mode. Following the prepared remarks, there will be a question and answer session. Please note this event is being recorded for replay purposes. In connection with today’s call, the company posted a presentation on its investor relations website, investor.easternbank.com, which will be referenced during the call. Today’s call will include forward-looking statements. The company cautions investors that any forward-looking statements involve risks and uncertainties and do not guarantee a future performance. Actual results may materially differ from those expressed or implied in the forward-looking statements due to a variety of factors. These factors are described in the company’s earnings press release and most recent 10-K filed with the SEC.

Any forward-looking statements made represent management’s views and estimates as of today, and the company undertakes no obligation to update these statements because of new information or future events. The company will also discuss both GAAP and certain non-GAAP financial result measures. For reconciliations, please refer to the company’s earnings press release. I’d now like to turn the call over to Bob Rivers, Eastern Bankshares, Inc.’s Executive Chair and Chair of the Board of Directors.

Bob Rivers, Executive Chair and Chair of the Board of Directors, Eastern Bankshares, Inc.: Thank you, Joelle. Morning, everyone, and thank you for joining our call. With me today is Eastern’s CEO, Denis Sheahan, and our CFO, David Rosato. Eastern recently celebrated its fifth anniversary as a public company. Before Denis and David walk through our results, I wanted to take a moment to acknowledge this important milestone and share why I’m excited about our future. As shown on slide two, today, Eastern is a $25.5 billion organization with the fourth largest deposit market share in Greater Boston, and we are the largest independent bank headquartered in Massachusetts. Since our IPO, we have very intentionally expanded our footprint across attractive markets and built the scale we need to invest in the business while maintaining the understanding, accessibility, and engagement that makes us our region’s hometown bank.

This strategy, and most importantly, our people, our culture, and our extensive community involvement are what enable us to expand and deepen customer relationships, attract top talent, and capture growth opportunities. This has driven meaningful improvement in earnings, profitability, and shareholder returns. One of the keys to our success has been our ability to stay true to who we are while growing and positioning Eastern for the future. That includes bringing in talented people to complement the many long-time Eastern employees who have contributed to our success. I’m so proud of what we’ve accomplished together. We are well-positioned to serve our customers and communities with excellence, which underpins our ability to drive continued shareholder value. Now I’ll turn it to Denis.

Denis Sheahan, CEO, Eastern Bankshares, Inc.: Thank you, Bob. As someone who’s been in the Boston market for more than three decades, I can attest to how impressive the transformation of Eastern has been over the last five years. I’m incredibly proud to be part of this team, and I share Bob’s enthusiasm about the future and the opportunities ahead. Turning now to the quarter, we are very pleased to have received the required regulatory approvals for our merger with HarborOne, which is on track for a November 1 close. This partnership strengthens Eastern’s leading presence in Greater Boston and expands our branch footprint into Rhode Island, providing even more opportunities for organic growth. We’re excited to bring together two banks that share a strong commitment to customers, community partners, and employees.

I want to thank the teams from both organizations for their outstanding efforts, and we look forward to welcoming our new customers and colleagues to Eastern as we build on the strong legacies of both institutions. We’re also pleased to announce today the resumption of our share repurchase program, which underscores our confidence in the future. Third quarter operating earnings of $74.1 million increased 44% from a year ago and generated solid returns. Operating return on assets of 1.16% was up 34 basis points from the prior year quarter, and operating return on average tangible common equity increased 300 basis points to 11.7% over the same period. On a linked quarter basis, operating income was down from a very strong second quarter, which benefited from higher than expected net discount accretion due to early loan payoffs and fee income.

Our ongoing strategic investments in hiring talent and commercial lending continue to deliver strong results. Over the past year, we have increased the number of relationship managers by approximately 10%. Eastern has become an attractive destination for high-quality talent, particularly those with large bank experience. We have the size to matter competitively, yet are small enough for them to apply their trade and provide a sense of ownership in building a business. Our loan growth continues to reflect the impact of this strategy. Total loans grew 1.3% linked quarter and 4.1% year to date, driven primarily by strong commercial lending results. The commercial portfolio has grown just under 6% since the beginning of the year, and the pipeline remains solid, ending the quarter at approximately $575 million. Wealth management is an important component of our long-term growth strategy, and the wealth demographic in our footprint provides significant opportunities.

Beyond strong investment solutions and results, we provide comprehensive wealth services, including financial, tax, and estate planning, as well as private banking. Assets under management reached a record high of $9.2 billion in the third quarter, driven by market appreciation and modest positive net flows. We’ve been pleased with the integration of the Eastern and Cambridge Trust Wealth Management teams and the strong retention of clients and talent since the merger. We’re also enhancing our internal distribution capabilities. Our retail branch network, through training and greater awareness, is becoming a meaningful driver of referrals. Notably, in the first half of this year, retail generated more funded wealth business than Eastern achieved in any prior full year. On the commercial side, the strengthening alignment between our wealth management and banking businesses is in the early stages but beginning to produce results.

There is still a lot more work ahead, but we are encouraged by the momentum of our wealth business, which was recently named the largest bank-owned independent advisor in Massachusetts for the second consecutive year. Finally, our capital position remains robust, and we continue to generate excess capital. Tangible book value per share at quarter end was $13.14, an increase of 5% from June 30 and up 10% from the beginning of the year. In addition to using capital for organic growth, we are committed to returning capital to shareholders through opportunistic share repurchases and consistent and sustainable dividend growth. As such, we are very pleased the board authorized a new 5% share repurchase program of up to 11.9 million shares. David, I’ll hand it over to you to review our third quarter financials.

David Rosato, CFO, Eastern Bankshares, Inc.: Thanks, Denis, and good morning, everyone. I’ll begin on slides four and five. We reported net income of $106.1 million or $0.53 per diluted share for the third quarter. Included in net income is a GAAP tax benefit related to losses from the investment portfolio repositioning completed in Q1 that accrues over the course of 2025. On an operating basis, earnings of $74.1 million or $0.37 per diluted share decreased from a very strong second quarter, which benefited from higher than expected net discount accretion and fee income. Compared to the prior year quarter, operating net income increased 44%, reflecting margin expansion of 50 basis points and significant improvement in the efficiency ratio from 59.7% to 52.8%, driven by higher revenues and thoughtful expense management. We are pleased with the continued strength of our profitability metrics.

While operating ROA of 116 basis points and return on average tangible common equity of 11.7% were down from second quarter metrics, both meaningfully improved from a year ago when operating ROA was 82 basis points and operating return on average tangible common equity was 8.7%. We remain focused on driving sustainable growth and profitability and delivering top quartile financial performance. Moving to the margin on slide six, net interest income and margin declined from the second quarter, primarily due to higher deposit costs and lower net discount accretion. Net interest income of $200.2 million or $205.4 million on an FTE basis decreased 1%. Included in net interest income was net discount accretion of $10 million compared to $16.5 million in the second quarter, which was higher than expected due to early loan payoffs. Excluding net discount accretion, net interest income would have increased approximately 3%.

The margin of 3.47% was down 12 basis points from 3.59%. The yield on interest-earning assets decreased 6 basis points, while interest-bearing liability costs were up 7 basis points. Net discount accretion contributed 17 basis points to the margin compared to 29 basis points in the prior quarter. Excluding net discount accretion, the margin would have been flat quarter over quarter. Turning to slide seven, non-interest income of $41.3 million declined $1.6 million from the second quarter. On an operating basis, non-interest income of $39.7 million was down $2.5 million. The decrease was driven primarily by $1.9 million in lower income from investments held for employee retirement benefits compared to a very strong Q2. This decline was partially offset by $1 million in lower benefit costs reported in non-interest expense.

In addition, miscellaneous income and fees were down $1.2 million due primarily to a loss on sale of commercial loans from our managed asset group and lower commercial loan and line fees. These headwinds in fee income were partially offset by deposit service charges and investment advisory fees, which both increased $300,000 in the quarter. Turning to slide eight, we highlight wealth management, our primary fee business. Assets under management reached a record $9.2 billion, driven by market appreciation and modest positive net flows. Wealth management fees, which account for nearly half of total non-interest income, were up $300,000 or 2% from Q2, primarily due to higher asset values. In addition, the prior quarter benefited from approximately $700,000 in seasonally higher tax preparation fees. Moving to slide nine, non-interest expense was $140.4 million, an increase of $3.5 million from the second quarter due to higher operating expenses and merger-related costs.

Merger costs of $3.2 million were up $600,000 from the prior quarter. Operating non-interest expense was $137.2 million, up $2.8 million. The increase was primarily driven by $3.3 million in higher salaries and benefits, primarily due to higher performance-based incentives, one additional pay period in Q3, and seasonal staff. In addition, technology and data processing costs increased $1.4 million, and occupancy and equipment expenses were up $500,000. These increases were partially offset by a $2.3 million reduction in other operating expenses. Moving to the balance sheet, starting with deposits on slide ten, period end deposits total $21.1 billion, a decrease of $104 million or less than 1% from Q2. A decline in checking balances was partially offset by higher balances in money market accounts and CDs. On an average basis, deposits were up 1.4%.

We continue to benefit from a favorable deposit mix with nearly half of deposits in checking accounts, providing a stable and low-cost funding base. Importantly, we remain fully deposit funded with essentially no wholesale funding, which further enhances our balance sheet strength. Total deposit costs of 155 basis points increased modestly from the second quarter, as the cost of interest-bearing deposits increased 8 basis points, primarily driven by money market accounts. We remain focused on growing deposits to support our funding strategy. As competition for deposits has become heightened in our region, we are disciplined in balancing the needs of our very strong deposit base with that of the margin. Looking ahead, as we thoughtfully integrate HarborOne deposits, we anticipate deposit costs to remain somewhat elevated.

However, as the Fed eases, we will work deposit costs down and target deposit betas like our experience during the most recent tightening cycle, or about 45 to 50% with lags relative to Fed actions. Turning to slide 11, period end loans increased $239 million or 1.3% linked quarter, led by further strength in commercial. Continued momentum from Q2 and CRE drove balances higher by $133 million, while strong broad-based growth at CNI increased balances by $104 million. Consumer home equity lines continued a steady trajectory of quarterly growth, adding $45 million in outstandings. Commercial has delivered strong year-to-date performance with nearly $700 million of loan growth from year end. This performance reflects the impact of our opportunistic hiring of growth-oriented talent, continued strength of Eastern’s brand, and our long-tenured relationship managers.

Our combination of meaningful scale, which allows us to offer a broad suite of products and services, and deep local expertise and presence is what differentiates us. Slide 12 is an overview of our high-quality investment portfolio. The portfolio yield was up 1 basis point to 3.03% from Q2. In addition, the AFS unrealized loss position continued to decline as it ended the quarter at $280 million after tax, compared to $313 million at June 30 and $584 million at year end. Turning to slide 13, capital levels remain robust as indicated by CET1 and TCE ratios of 14.7% and 11.4% respectively. Consistent with our commitment of returning capital to shareholders, the board authorized a new share repurchase program of up to 11.9 million shares, or 5% of shares outstanding after completion of the HarborOne merger. The program expires on October 31, 2026.

In addition, the board approved a $0.13 dividend to be paid in December. As displayed on slide 14, asset quality remains excellent, as evidenced by net charge-offs to average loans of 13 basis points and reflects the quality of our underwriting and proactive risk management approach, addressing issues quickly and prudently. While non-performing loans rose $14 million linked quarter to $69 million, the increase was driven primarily by a single mixed-use office loan, which has been in managed assets for some time. A portion of this loan was charged off during the quarter and had been previously reserved. Importantly, we continue to believe the worst of the office loan problems is mostly behind us. We remain cautiously optimistic in our outlook on credit as overall trends continue to be positive. Reserve levels remain strong, as demonstrated by an allowance for loan losses of $233 million or 1.26% of total loans.

These metrics are consistent with $232 million or 1.27% at the end of Q2. Criticized and classified loans of $495 million or 3.82% of total loans increased modestly from $459 million or 3.6% at the end of Q2. Finally, we booked a provision of $7.1 million, down from $7.6 million in the prior quarter. On slides 15 and 16, we provide details on total CRE and CRE investor office exposures. Total commercial real estate loans are $7.4 billion. Our exposure is largely within local markets we know well and is diversified by sector. The largest concentration is the multifamily at $2.7 billion, which is a strong asset class in Greater Boston due to ongoing housing shortages. We have no multifamily non-performing loans, and we have had no charge-offs in this portfolio for well over the past decade. We remain focused on investor office loans.

The portfolio of $813 million, or 4% of our total loan book, decreased $15 million linked quarter. Criticized and classified loans of $138 million, or about 17% of total investor office loans, compared to $118 million, or 14% of total investor loans at the end of Q2. In addition, our reserve level of 5.1% remains conservative. As disclosed last quarter, the investor office loan portfolio includes our relatively limited exposure to the lab life science sector, consisting of four loans totaling $99 million, or less than 1% of total loans. None of these loans were originated as speculative construction transactions. All loans are accruing, and we continue to monitor these loans as part of our ongoing review of the office portfolio. Before turning it back to Denis, I wanted to give a brief update on the HarborOne merger, which is expected to close November 1.

We are reiterating the key assumptions we announced earlier this year and are on track to deliver on our estimated cost savings, one-time charges, and gross credit mark. We will disclose updated interest rate marks on our fourth quarter call in January. As a reminder, the original announcement assumed 80% stock consideration, the midpoint of the range. Based on the performance of our stock, our current estimate assumes 85% stock consideration. Furthermore, we continue to plan for the sale of HarborOne’s securities portfolio, the deleveraging of HarborOne’s securities portfolio with proceeds intended to pay down FHLB borrowings. HarborOne’s period end loans and deposits at September 30 were $4.763 billion and $4.433 billion, respectively. In addition, if approved, we intend to early adopt the changes to the CECL accounting standard designed to remove the current double counting of expected credit losses. I’d now like to turn it back over to Denis.

Denis Sheahan, CEO, Eastern Bankshares, Inc.: Thanks, David. We are pleased with this quarter’s results and are excited about closing the HarborOne merger. We’re the leading local bank in Massachusetts, and this merger strengthens our presence south of Boston and into new markets in Rhode Island, providing opportunities for organic growth for many years to come. The continued improvement in our profitability will allow us to return meaningful amounts of capital and enhance shareholder value. This concludes the presentation. I will now open the call for questions.

Joelle, Conference Call Operator, Eastern Bankshares, Inc.: Thank you, ladies and gentlemen. We will now begin the question and answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Damon Del Monte with KBW. Your line is now open.

Hey, good morning, guys. Hope you’re all doing well, and thanks for taking my questions. First question, just with regards to, you know, I know it’s a tricky quarter because you have HarborOne closing next week, and we’re in the middle of the fourth quarter here. David, as we kind of think about the margin, obviously a bunch of noise on the fair value accretion side of things, but if you look at the core margin, as you noted, you know, it’s flat quarter over quarter. Do you think that kind of, you know, can hold steady here in the fourth quarter and then kind of grind higher into 2026, or do you think that the competitive pressures on deposits will probably weigh on that a little bit?

David Rosato, CFO, Eastern Bankshares, Inc.: Let’s talk about both sides of that, Damon, and good morning. The core Eastern margin, there’s two key drivers, right? There’s accretion income, which unfortunately in Q3 was down $6.5 million. That’s the wild card here. The average run rate is, call it $11 to $12 million. Last quarter we were above trend. This quarter we were a little below trend. You saw that ripple through asset yields. That’s the wild card. On the other side, on the deposit side, the competition has heated up here. We’ve talked to, I think we talked about this last quarter as well. In retail and government banking, I think that pressure remains in Q4. That leads me to roughly flat deposit costs with a little bit of wild card on the asset side. Just as a reminder, we’ll have two months of HarborOne in our Q4 numbers.

Our thinking is that the original margin expansion and numbers that we put out back in April for the combined institution are still good numbers.

Okay, that’s helpful. Great. How about as far as just on the expense side? It was higher this quarter. You had some elevated comp and benefit type costs and stuff. Again, kind of looking at the core Eastern expenses, do you think that kind of stays at a similar level here going into fourth quarter, or could it tick even higher just given year-end accrual true-ups and things of that nature?

I think we were a little inflated on the comp line this quarter. I think that will tend to settle down in Q4. There’s been a little uptick in tech expense, and that will probably be consistent. I’m not overly concerned about our expense space at this point. I would telegraph roughly flat in Q4 overall to down a touch.

Okay, great. With the deal closing here next week, just curious on your updated thoughts on appetite for additional deals over the coming months or in 2026. Is that something you guys are considering? I think messaging has also been more about a focus towards organic growth. Just wondering how you balance those two avenues. Thanks.

Denis Sheahan, CEO, Eastern Bankshares, Inc.: Hey, my name is Denis here, and that sort of remains consistent. Look, our focus right now is clearly on continuing to build on the good organic growth that we’ve had in recent quarters on the important integration of the HarborOne merger. We feel good about that opportunity and are looking forward, as I said in my comments earlier, to working with our new customers, our new colleagues at HarborOne. As you can well imagine, there’s a lot of work to do there on that integration. We have no plans in terms of additional mergers in the near term. That said, we think if a merger opportunity were to arise, it’s in our shareholders’ best interest for us to evaluate the opportunity. It doesn’t mean we would execute, but certainly it’s lower on our list of priorities when we think about capital allocation.

As Bob indicated with his opening statements, and you look at the progress at Eastern Bankshares since we had our IPO, the performance improvement is very material and significant. The opportunity of the new markets that those mergers provided are a meaningful contributor to our operating performance. We think if the opportunity arises, it’s in our shareholders’ best interest to consider it, but it’s not our focus today.

David Rosato, CFO, Eastern Bankshares, Inc.: I would just add to that, you know, it’s clear when you think about deployment of capital from our perspective, nothing has changed. It’s organic growth. Now we’re excited that with the board’s approval of the share repurchase, we can be back in the market. It’s support of the dividend. By far, number four is anything around M&A.

Got it. Okay, great. Lastly, David, real quick, you had mentioned before, like last quarter, about the possibility of another restructuring, but it would depend on market conditions and how you felt the best use of capital once HarborOne was closed. Any updated thoughts on that if you’re considering that still, or is the focus more on organic growth and buybacks only?

We’re really not focused at all on any type of further portfolio restructuring of Eastern Bankshares, Inc. It is organic growth, which we’ve had a very good track record of success year to date. As Denis referenced, the pipeline is robust and our brand’s resonating in the market. It’s that, it’s being back in the market for buybacks, and there’s no contemplation at all right now of any type of further portfolio restructuring.

Okay, great. Thank you very much for taking all my questions.

Denis Sheahan, CEO, Eastern Bankshares, Inc.: Yep, thanks. Thanks, Damon.

Joelle, Conference Call Operator, Eastern Bankshares, Inc.: Your next question comes from Mark Fitzgibbon with Piper Sandler. Your line is now open.

Hey, guys, good morning.

Morning, Mark.

David, you had mentioned in your comments earlier on the wealth management business, I think it was a $515 million increase in assets under management this quarter. A lot of that was market-driven. Could you break out for us how much of the $515 million was market-driven versus flows?

David Rosato, CFO, Eastern Bankshares, Inc.: Yeah, it was predominantly market-driven, you know, good equity and fixed income markets. The net flows in the quarter were a little over $50 million, positive.

Okay, great. Are there plans within the wealth management business to hire more people or to acquire other, you know, RIAs or wealth businesses?

Denis Sheahan, CEO, Eastern Bankshares, Inc.: Mark, this is Denis. Yes, we are looking for talent, and we have brought on some existing talent in the wealth area. We are active and engaged in opportunities to bring in talent, whether it be in business development or portfolio relationship management. Hopefully you’ll hear more from us about that in the coming quarters. In terms of M&A in the RIA space, no, we’re not interested in that to any great degree. It’s challenging for those opportunities to work from a variety of perspectives, one being culture and integration, and another being that financially it’s challenging to make them work. We’re not interested at this point in any kind of M&A there.

Okay. Denis, I guess I’m curious, and I know it’s a little awkward, but any comments on the slide presentation that Holdco put out earlier this week? I guess I’m curious, you know, do you agree with it? Do you plan to implement any of the things that they’ve proposed, and do you plan to meet with them?

As you know, we’re very open to engaging with our shareholders. We do a lot of investor conferences and investor roadshows, etc., and we’re happy to engage with any of our investors. We have what we believe is a shared goal. We and our investors are driving the performance of the company even higher than we’ve already done and to build long-term value creation for our shareholders. We welcome that dialogue from whomever. Most importantly, I really want to turn our focus to the future and think about we’re excited about the future of the company. We feel very well positioned here today, and even more so with the combination with HarborOne Bancorp, Inc. to execute the strategy that we’ve built to really drive that top quartile financial performance. That’s the mantra at the company. That’s what we’re aiming for. That’s our aspiration. That’s what we’re really, really focused on.

We think that’s going to deliver very, very attractive shareholder returns. That’s our focus. I’m not going to comment on anything in any particular disclosure that someone has made. Rest assured that this team is focused on driving performance. That’s what gets us up every day. That’s what gets us excited. As I said, we’re going to continue to focus on that.

That’s great. Thank you.

Joelle, Conference Call Operator, Eastern Bankshares, Inc.: Your next question comes from Lori Hunsaker with Seaport Research. Your line is now open.

Hi, thanks. Bob, Denis, David, and Andrew, good morning. I just wanted to go over to slide 16, your office exposure here. I just want to make sure I’m reading this right. It looks like your office non-performers jumped linked quarter. I guess what’s also new is you’ve got $19 million now in non-accruals maturing in the first quarter of 2026. I’m just wondering how we should think about that with respect to the provision. Just since that’s new, can you help us understand that a little bit?

David Rosato, CFO, Eastern Bankshares, Inc.: Sure, Lori. It’s one loan. Just a little background. That loan was originated in 2016. It’s been pre-COVID. We’ve been watching it since COVID for quite a few years here. This is consistent with what we’ve said all along. There will be a couple of loans in the portfolio that we’ll have to deal with. In the grand scheme of things, small numbers. This loan, we started building reserves. It’ll mature next year. That’s why it hit the schedule. We will have it, we’ll probably full resolution, probably not in Q4, but into Q1. It’s on our books at what we believe will be the final resolution economics. There’s really, it is one loan, but there’s really no story there or anything different worth mentioning about that loan or about the rest of the portfolio.

Okay. With respect to that loan, can you share with us occupancy or anything around that, or if you expect to extend, or just how to think about it?

I will share one fact. It’s 85% occupied.

That’s great. That’s helpful. Okay, thanks. Do you have an update on spot margin for September?

Denis Sheahan, CEO, Eastern Bankshares, Inc.: I didn’t hear that.

David Rosato, CFO, Eastern Bankshares, Inc.: I’m sorry. Did you say spot margin?

Do you have a September spot margin?

Yeah, it was 348, so one basis point higher than the quarter.

Okay. Great. All my other questions have been answered. I’ll leave it there. Thank you.

Denis Sheahan, CEO, Eastern Bankshares, Inc.: Thanks, Lori.

Joelle, Conference Call Operator, Eastern Bankshares, Inc.: Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Janet Lee with TD Cowen. Your line is now open.

Hi, good morning.

David Rosato, CFO, Eastern Bankshares, Inc.: Morning, Janet.

Hi. Apologies if I missed it in the prepared remarks earlier, but if I were to interpret your comment around NIM, as we look into 2026, although maybe deposit costs were a little bit more elevated this quarter because of competition, as rates come down, you’re able to still sustain your NIM. Is that the right way to think about this?

Yes. Generally, true statement. I think what I was trying to elaborate on a little bit from Damon’s question is two drivers, right? There’s the accretion income, which bounces around. Last quarter is a little above trend. This quarter is a little below trend. Hard to predict, as we all know. On the deposit side, in Q3, there was one Fed move so far. We were slow in our repricing down, so less than our historical long-term beta of 45% to 50%. Competition in our market remains intense or heavy. We’re five days away from what seems to be a foregone conclusion: the Fed’s going to move again, followed by another move in December. We will be pricing down as we get cover from the Fed. Our message is, in the near term, a little slow, a little slower to maintain and eventually grow market share.

Longer term, through this full cycle, you should expect us to achieve our full betas.

Got it. That’s helpful. A follow-up on a bigger picture. Denis, it’s been a little over a year since you joined Eastern from Cambridge. I believe you have assessed Eastern’s franchise or the business overall. Given its historical roots as a mutual conversion and given a lot of the M&As that you guys have done, growth has been slow or slower versus, I guess, standalone Cambridge or Eastern. As you look at Eastern’s franchise, what parts of the business are perhaps underutilized or where do you see the most upside to growth or increase in profitability? I get that you guys are seeing acceleration in C&I opportunities, but are there other parts of the business where you think could be improved?

Denis Sheahan, CEO, Eastern Bankshares, Inc.: Janet, yeah, thanks for your question. I would reflect on it this way. We have seen a very significant increase in the company’s profitability that’s really riding on the back of the strategy that the team before David and I had, very significant, and it positions us well. In terms of continuing to grow profitability, I think of it about the areas that you hear us emphasizing in our comments. The commercial lending team, it was frankly one of the things that attracted me when I was thinking about merging Cambridge into Eastern is the journey that Eastern has gone on for several years, including as a mutual and when it converted, to build out that commercial banking division. The talent on the team is terrific. They can execute. They’re excited about the growth that we have and that we’re continuing to embark on.

I think the commercial banking division is certainly one. Second, and this isn’t necessarily an order of priority. All our businesses are important, but wealth management, you know, the market in Massachusetts and New England broadly, you know, from a demographic perspective, we don’t have significant population growth, but what we do have is a very good wealth and household income demographic. Our ability to lean into that business further over the years, it takes time. I’ve seen this in my past and how you build out a wealth management business successfully. I think we’ll significantly improve our performance. It’s low capital intensive, very beneficial to ROA, and we have a good, a really strong capability in that area. I think about our retail and deposit franchise.

We have new leadership in that area, a terrific team, and I feel very good about our prospects in that area of the company as well. That’s a lot, Janet, but we’re fortunate to have a lot. It comes down to the talent on the team and our ability to execute in the market, including our newer markets. When I think about our markets, you have to really, the merger integrations, well done, take years. If you, I go back to the Century merger, in my view, it’s not fully integrated. Have we maximized the potential of our opportunity in this old Century markets, in the old Cambridge markets, and the soon-to-be HarborOne markets? Absolutely not. I think there’s a lot of opportunity ahead. The management team is excited. We’re pumped. That’s how I would answer your question, Janet.

Thank you so much.

You’re welcome.

Joelle, Conference Call Operator, Eastern Bankshares, Inc.: There are no further questions at this time. I will now turn the call over to Bob Rivers for closing remarks.

Bob Rivers, Executive Chair and Chair of the Board of Directors, Eastern Bankshares, Inc.: Thank you again, everyone, for joining us this morning. Best wishes for very happy and healthy holidays, and we look forward to talking with you again in the new year.

Joelle, Conference Call Operator, Eastern Bankshares, Inc.: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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