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Eastern Bankshares (EBC)
NASDAQ:EBC
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Eastern Bankshares
(NASDAQ:EBC)
58Neutral
Eastern Bankshares (EBC) vs. S&P 500 (SPY)
Market Cap
$3.48B
Dividend Yield2.76%
Average Volume (3M)1.28M
Price to Earnings (P/E)24.9
Beta (1Y)1.29
Revenue Growth73.24%
EPS Growth-53.04%
CountryUS
Employees1,998
SectorFinancial
Sector Strength81
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.67
Shares Outstanding213,500,240
10 Day Avg. Volume1,608,213
30 Day Avg. Volume1,281,853
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.27
Price to Cash Flow (P/CF)10.00
P/FCF Ratio4.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$21.50Price Target Upside31.74% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
Eastern Bankshares Business Overview & Revenue Model
Company DescriptionEastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides banking products and services primarily to retail, commercial, and small business customers. It operates in two segments, Banking Business and Insurance Agency Business. The company provides interest-bearing and non interest-bearing checking deposits, money market deposits, savings deposits, and time certificates of deposits, as well as debit and credit cards. It also offers commercial and industrial loans, commercial real estate and construction loans, small business loans, residential real estate loans, home equity, and lines of credit, as well as other consumer loans comprising unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans, and other personal loans. In addition, the company provides cash reserves, cash management, merchant, escrow express, government banking, international banking, interest on lawyers trust accounts, retirement planning, and business telephone banking services, as well as products and services for not-for-profit and healthcare. Further, it offers trust and investment products and services; community development and asset-based lending services; financial planning, portfolio management, wealth management, private banking, and fiduciary products; online, mobile, and telephone banking services; and automated lock box collection and account reconciliation services, as well as various insurance products. As of December 31, 2021, the company operated 105 branch offices in eastern Massachusetts and southern New Hampshire; and 23 non-branch offices in eastern Massachusetts, one office in New Hampshire, and one office in Rhode Island. Eastern Bankshares, Inc. was founded in 1818 and is headquartered in Boston, Massachusetts.
How the Company Makes MoneyEastern Bankshares generates revenue primarily through interest income earned on loans and securities, as well as non-interest income from fees and services. The bank offers a variety of loan products, such as commercial real estate loans, residential mortgages, and consumer loans, which provide stable interest income. Additionally, Eastern Bank earns non-interest income from service charges, insurance services, wealth management fees, and investment advisory services. Strategic partnerships with financial service providers further enhance its revenue potential by offering expanded products and services to its customer base. The combination of diversified financial services and regional market presence helps drive the company's earnings.
Eastern Bankshares Financial Statement Overview
Summary
Eastern Bankshares displays a mixed financial performance. The income statement reveals significant challenges, with zero revenue reported in 2024, affecting profitability and indicating potential sustainability issues. However, the balance sheet is robust with strong equity and no debt reliance, and the cash flow statement shows positive operating cash flow despite a concerning decline in free cash flow.Income Statement
Eastern Bankshares has experienced fluctuations in revenue with a significant decline to zero in 2024. The Net Profit Margin and Revenue Growth Rate are not meaningful due to the zero revenue in the latest period. EBIT and EBITDA margins have been inconsistent, reflecting volatility in profitability. The company showed strong net income in 2023, but the lack of revenue in 2024 raises concerns about sustainability.45
Neutral
Balance Sheet
The balance sheet shows a strong equity position with an increasing Stockholders' Equity and a Debt-to-Equity Ratio of zero in 2024, indicating no reliance on debt. The Equity Ratio is healthy, indicating financial stability. However, the substantial drop in Total Revenue could affect asset utilization and future equity returns.75
Positive
Cash Flow
The company demonstrates strong operating cash flow relative to net income in 2023, but a significant drop in 2024. Free Cash Flow has seen a major decrease, indicating potential challenges in generating cash from operations. The cash flow from operations is positive, but the decline in free cash flow is concerning.65
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 731.51M | 308.19M | 737.83M | 616.47M | 572.90M | Gross Profit |
| 731.51M | 308.19M | 737.83M | 616.47M | 572.90M | EBIT |
| 119.56M | -71.27M | 317.92M | 188.71M | 35.90M | EBITDA |
| 0.00 | 0.00 | 261.65M | 211.59M | 63.81M | Net Income Common Stockholders |
| 119.56M | 232.18M | 199.76M | 154.66M | 22.74M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.01B | 693.08M | 6.86B | 9.74B | 5.24B | Total Assets |
| 25.56B | 21.13B | 22.65B | 23.51B | 15.96B | Total Debt |
| 93.90M | 48.22M | 740.83M | 34.28M | 28.05M | Net Debt |
| -92.59M | -644.86M | 571.32M | -1.20B | -2.03B | Total Liabilities |
| 21.95B | 18.16B | 20.18B | 34.28M | 28.05M | Stockholders Equity |
| 3.61B | 2.97B | 2.47B | 3.41B | 3.43B |
| Cash Flow | Free Cash Flow | |||
| 20.79M | 253.55M | 221.31M | 168.76M | 64.71M | Operating Cash Flow |
| 20.79M | 261.69M | 229.94M | 174.49M | 69.85M | Investing Cash Flow |
| 158.71M | 2.40B | -1.08B | -1.99B | -2.39B | Financing Cash Flow |
| -111.17M | -2.14B | -215.57M | 988.98M | 4.01B |
Eastern Bankshares Technical Analysis
Negative
16.32
Price Trends
17.42
Negative
17.54
Negative
16.46
Negative
Market Momentum
-0.21
Negative
41.65
Neutral
55.01
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EBC, the sentiment is Negative. The current price of 16.32 is below the 20-day moving average (MA) of 16.45, below the 50-day MA of 17.42, and below the 200-day MA of 16.46, indicating a bearish trend. The MACD of -0.21 indicates Negative momentum. The RSI at 41.65 is Neutral, neither overbought nor oversold. The STOCH value of 55.01 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EBC.
Eastern Bankshares Risk Analysis
Eastern Bankshares disclosed 67 risk factors in its most recent earnings report. Eastern Bankshares reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Eastern Bankshares Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
72 Outperform | $2.69B | 13.99 | 6.52% | 3.61% | 6.21% | -16.59% | |
70 Outperform | $455.69M | 10.46 | 9.78% | 4.03% | 7.81% | -3.54% | |
64 Neutral | $192.75M | 16.74 | 4.93% | 3.01% | 9.56% | -20.10% | |
64 Neutral | $14.24B | 10.27 | 8.97% | 4.33% | 16.38% | -11.94% | |
62 Neutral | $523.28M | 18.68 | 6.72% | 1.05% | 14.02% | 5.59% | |
61 Neutral | $4.93B | 12.50 | 7.62% | 4.30% | 6.80% | 1.48% | |
58 Neutral | $3.48B | 24.87 | 3.63% | 2.76% | 73.24% | -53.04% |
* Financial Sector Average
Performance Comparison
EBC
Eastern Bankshares
16.32
3.28
25.15%
BHB
Bar Harbor Bankshares
29.75
5.12
20.79%
HIFS
Hingham Institution For Savings
240.01
68.14
39.65%
INDB
Independent Bank
63.19
13.89
28.17%
UBSI
United Bankshares
34.40
0.70
2.08%
WNEB
Western New England Bancorp
9.29
1.96
26.74%
Eastern Bankshares Earnings Call Summary
Earnings Call Date: Jan 23, 2025 | % Change Since: -6.64% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
The earnings call was largely positive, highlighting the successful merger with Cambridge Trust, strong financial performance, and strategic growth initiatives. However, there were concerns regarding elevated charge-offs and the investor office loan portfolio.Highlights
Merger with Cambridge Trust
The merger with Cambridge Trust solidified Eastern Bankshares' position as the largest commercial bank headquartered in Greater Boston, providing broader offerings and growth opportunities.
Strong Financial Performance
Full year operating net income increased by 18% to $192.6 million, and net interest income rose by 10% to $607.6 million compared to 2023. Net interest margin expanded by 12 basis points.
Growth in Loans and Deposits
Period-end loans increased by 29% year-over-year, with a 21% rise in deposits. The loan-to-deposit ratio stands at 85%.
Wealth Management Expansion
The wealth management business reported a 13% increase in fees linked quarter, with assets under management at $8.3 billion and assets under administration at $8.8 billion.
Investment Portfolio Repositioning
Announced a $1.2 billion repositioning of the investment portfolio, expected to be $0.13 accretive to operating EPS in 2025.
Lowlights
Elevated Charge-Offs
Charge-offs were elevated at 71 basis points, primarily from PCD loans acquired from Cambridge with specific reserves established.
Investor Office Loan Concerns
Investor office loans were a primary focus due to credit cycle evolution, with charge-offs mostly from this sector.
Company Guidance
During Eastern Bankshares Inc.'s fourth quarter 2024 earnings call, the executive team provided comprehensive guidance on the company's financial outlook. Key metrics included a full-year operating net income of $192.6 million, marking an 18% increase from 2023, and net interest income of $607.6 million, up by 10% year-over-year. The company reported a 12 basis point expansion in net interest margin and a loan-to-deposit ratio of 85%. Period-end loans surged by 29%, fueled by the Cambridge Trust merger and organic growth, while deposits rose by 21%. Eastern Bankshares also executed a $1.2 billion investment portfolio repositioning, expected to be $0.13 accretive to 2025 operating EPS. Their 2025 outlook anticipates modest growth, with loans and deposits projected to increase by 2%-4% and 1%-2%, respectively. The company expects net interest income to range from $815 million to $840 million, with a net interest margin of 3.45%-3.55%. Additionally, Eastern Bankshares aims to maintain strong capital and liquidity levels, as evidenced by a CET1 ratio of 15.7%.Eastern Bankshares Corporate Events
M&A TransactionsDividendsBusiness Operations and StrategyFinancial Disclosures
Eastern Bankshares Reports Strong Q4 Results and Strategic Moves
Positive
Jan 23, 2025
Eastern Bankshares, Inc. reported its fourth-quarter 2024 financial results, highlighting a net income of $60.8 million and an operating net income of $68.3 million. The Board has approved a regular quarterly cash dividend of $0.12 per share, payable in March 2025. The company is set to undergo a significant $1.2 billion investment portfolio repositioning in Q1 2025, expected to increase operating earnings per share by $0.13. The merger with Cambridge Trust has bolstered the company’s position in the region, allowing for enhanced customer offerings and financial performance improvements, with a full-year operating net income increase of 18% over 2023.
Executive/Board Changes
Eastern Bankshares Announces Board Member Resignations
Neutral
Jan 7, 2025
Eastern Bankshares announced the resignation of Paul M. Connolly and Paul D. Spiess from the Board of Directors, effective December 31, 2024, due to mandatory age limitations. Their departure does not reflect any disagreements with the company’s policies or operations. The company acknowledges their significant contributions, including Connolly’s experience from the Federal Reserve Bank of Boston and Spiess’s expertise in community banking and financial services, particularly in New Hampshire.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.