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Eastern Bankshares (EBC)
NASDAQ:EBC
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Eastern Bankshares
(NASDAQ:EBC)
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Rating:70Outperform
Price Target:
$22.00
â–²(3.00% Upside)
The score is driven primarily by solid underlying financial strength (low leverage and strong cash flow metrics) and constructive price momentum. It is held back by expensive valuation (very high P/E) and ongoing profitability/credit-cost execution risk tied to the HarborOne integration noted in the latest earnings call.
Positive Factors
Strong balance sheet (low leverage)
Very low leverage provides durable financial flexibility: it supports ongoing lending, funds M&A integration and capital returns, and offers a buffer against credit cycles. This structural strength reduces refinancing and solvency risk over the next several quarters.
Robust free cash flow conversion
Strong and consistent free cash flow conversion underpins sustainable dividends, buybacks and reinvestment without relying on fragile funding. That cash generation supports liquidity and capital allocation discipline through integration and potential future stress periods.
Diversified fee base: record Wealth AUM
Growing, fee-based wealth assets diversify revenue away from interest margins and tend to be stickier through rate cycles. Record AUM and positive net flows increase recurring fees and reduce earnings sensitivity to net interest margin swings over the medium term.
Negative Factors
Profitability and margin compression
Material margin declines and lower ROE indicate eroding profitability that can persist absent sustained margin expansion or cost cuts. Lower margins reduce retained earnings, constrain capital for growth or buybacks, and make the franchise more vulnerable to adverse shocks.
Acquisition-driven asset quality deterioration
The HarborOne acquisition materially raised NPLs and criticized balances, creating persistent credit monitoring and workout needs. Elevated problem loans can require higher reserves, increase loss provisioning, and produce ongoing earnings and capital volatility during integration.
Higher funding and integration cost pressure
A structurally higher deposit cost and merger-related expense increases compress net interest margins and operating earnings. Integration-driven noninterest expenses and core deposit intangible amortization will likely elevate reported costs and add variability to reported earnings over coming quarters.
Eastern Bankshares (EBC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.15B
Dividend Yield2.72%
Average Volume (3M)1.99M
Price to Earnings (P/E)50.2
Beta (1Y)0.88
Revenue Growth-1.18%
EPS Growth-89.13%
CountryUS
Employees1,998
SectorFinancial
Sector Strength70
IndustryBanks - Regional
Share Statistics
EPS (TTM)0.44
Shares Outstanding238,450,580
10 Day Avg. Volume1,656,443
30 Day Avg. Volume1,987,830
Financial Highlights & Ratios
PEG Ratio-0.49
Price to Book (P/B)0.87
Price to Sales (P/S)2.92
P/FCF Ratio11.56
Enterprise Value/Market Cap0.95
Enterprise Value/Revenue4.98
Enterprise Value/Gross Profit7.82
Enterprise Value/Ebitda35.57
Forecast
1Y Price Target
$22.70Price Target Upside6.27% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 through several key streams, primarily focusing on net interest income and non-interest income. Net interest income is derived from the interest earned on loans and securities minus interest paid on deposits and other borrowings. The bank provides various loan products, including mortgages, personal loans, and commercial loans, which are essential for generating interest income. Non-interest income is obtained from services such as fees for banking services, wealth management, and insurance products. The company also benefits from strategic partnerships with local businesses and community organizations, which enhance its market presence and customer base, ultimately contributing to its overall earnings.
Eastern Bankshares Earnings Call Summary
Earnings Call Date:Jan 22, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive outlook driven by strong operating performance (record wealth AUM, significant operating earnings growth, improved ROA/ROTE, margin expansion and organic loan growth), successful progress on the HarborOne acquisition and an aggressive capital return program. Headwinds include merger-related costs, an acquisition-driven uptick in nonperforming and criticized loans, elevated short-term expense and deposit cost pressure, and some mark-to-market unrealized losses. Management provided clear 2026 guidance and emphasized focus on organic growth, buybacks and managing capital toward targeted levels.Q4-2025 Updates
Positive Updates
Strong Full-Year Operating Earnings Growth
Management highlighted a 62% increase in operating earnings for 2025 (company statement) and Q4 operating earnings of $94.7 million, which increased 28% linked-quarter; operating EPS was $0.44, up 19% linked-quarter.
Record Wealth Assets Under Management
Wealth assets reached a record $10.1 billion at year-end, including $9.6 billion AUM, driven by market appreciation and positive net flows (about $200 million of net flows in Q4). Wealth fees were $18.6 million in Q4 and wealth fees represented 40% of operating noninterest income.
Improved Profitability Metrics
Operating ROA was 130 basis points in Q4 (up 24 bps year-over-year) and operating return on average tangible common equity was 13.8% (up from 11.3% year-over-year).
Efficiency and Margin Improvement
Operating efficiency ratio improved to 50.1% from over 57% in the prior year quarter. Net interest income was $237.4 million ($243.4M FTE), up $37.2 million from Q3, and reported margin was 3.61%, up 14 bps from 3.47%.
Organic Loan Growth and Commercial Origination
On a stand-alone basis (excluding HarborOne), total loans grew $1.0 billion for the full year or 5.6%. Legacy Eastern commercial portfolio increased ~6% year-over-year. The bank originated $2.5 billion of commercial loans in 2025 (~50% C&I, ~50% CRE).
Successful HarborOne Integration Progress and Accretion Tailwinds
HarborOne merger (closed Nov 1) added scale ($4.5 billion loans, $4.3 billion deposits in Q4). Management projects loan discount accretion from HarborOne will add approximately $12–$13 million of net interest income per quarter for the next year, plus ~$9–$10 million per quarter from prior acquisitions.
Capital Returns and Dividend Increase
Q4 repurchases: 3.1 million shares for $55.4 million (26% of authorization) at an average $17.79; additional 635,000 shares repurchased to start 2026 for $12.3 million. Board approved a $0.13 Q1 dividend. Management plans to continue aggressive share repurchases while managing CET1 toward ~12%.
Solid Capital and Liquidity Position
CET1 ratio was 13.2% and TCE ratio 10.4% at year-end. Management estimates CET1 could decline to ~12.7% by June 30 if remaining repurchase authorization is executed and plans to manage toward the KRX median (~12%).
Asset Quality Metrics Remain Manageable
Net charge-offs to average total loans were 18 basis points. Allowance for loan losses rose to $332 million (144 bps of total loans) reflecting acquired loan allowances; management emphasizes strong reserve coverage and active workout plans.
2026 Financial Guidance Provided
Management provided 2026 guidance: loan growth 3–5%, deposit growth 1–2%, net interest income $1.20–$1.50 billion, FTE margin 3.65–3.75%, operating noninterest income $190–$200 million, operating noninterest expense $655–$675 million, and operating tax rate ~23%.
Negative Updates
Merger-Related Costs and Higher Expenses
Noninterest expense was $189.4 million in Q4, up $49.0 million linked-quarter. Nonoperating expenses of $33.4 million increased $30.2 million (including $26.7 million merger-related costs and a $3.5 million lease impairment). Operating expenses rose to $156.1 million, up $18.9 million due primarily to HarborOne addition.
Increase in Nonperforming Loans from Acquisition
Nonperforming loans increased $103 million linked-quarter, driven primarily by $94 million of HarborOne NPLs (largely a handful of larger CRE loans and one C&I). Criticized and classified loans rose to $793 million (5% of total loans) from $495 million (3.8%); the increase was entirely acquisition-related.
AFS Unrealized Losses and Securities Repositioning
Available-for-sale (AFS) unrealized loss position was $259 million after tax at quarter-end (improved from $280 million at 9/30). Management sold $298 million of HarborOne-acquired securities post-close to reduce wholesale funding, indicating repositioning and realized actions.
Elevated Deposit Costs and Mix Shift
Total deposit cost was 159 basis points, up modestly from Q3 due to a mix shift from HarborOne's deposit base. Management expects deposit costs to remain slightly elevated while integrating HarborOne deposits and plans to work them down over time.
Core Deposit Intangible Amortization Impact
Management expects noncash amortization of core deposit intangible related to HarborOne of approximately $8–$9 million per quarter over the next year, which will increase reported noninterest expense (noncash impact).
Variability and Uncertainty in Accretion/Amortization
Accretion and amortization estimates (loan discount accretion and core deposit amortization) are subject to variability (loan prepayments and quarter-to-quarter swings), creating potential earnings volatility versus forecasts.
Investor Office and CRE Concentrations to Monitor
Investor office exposure is $1.1 billion (5% of total loans) with criticized/classified investor office loans of $178 million (~16% of that segment). While reserves for this segment are described as conservative (5%), concentration and criticized balances merit monitoring.
Company Guidance
Management's 2026 guidance calls for loan growth of 3–5% and deposit growth of 1–2%, net interest income of $1.20–$1.50 billion with a full‑year FTE margin of 3.65%–3.75% (December spot ~3.64%) assuming market forwards (management modeled two rate cuts in June and September), provision expense of $30–$40 million, operating noninterest income of $190–$200 million (assumes no market appreciation), operating noninterest expense of $655–$675 million, and an operating tax rate of ~23%; they plan to manage CET1 (13.2% at year‑end) toward the KRX median (~12%)—projecting ~12.7% by June 30 if the current buyback is completed—and to continue aggressive capital return (Q4 repurchases: 3.1M shares for $55.4M; additional 635k for $12.3M; 8.1M shares remain; Q1 dividend $0.13). Management also expects merger accretion to contribute roughly $12–$13M/quarter from HarborOne loans (plus ~$9–$10M/quarter from prior deals), core deposit amortization of ~$8–$9M/quarter, targets deposit betas of ~45–50% and securities to be ~15% of assets.Eastern Bankshares Financial Statement Overview
Summary
Strong balance sheet (very low debt-to-equity) and solid cash flow conversion with positive free cash flow growth, but profitability is under pressure with materially lower gross and net margins and a reduced ROE.Income Statement
Eastern Bankshares shows moderate revenue growth with a TTM revenue growth rate of 2.42%. However, the gross profit margin has decreased significantly from 62% in 2024 to 39.97% in TTM, indicating increased costs or reduced pricing power. The net profit margin also declined to 5.03% from 11.17% in 2024. Despite these challenges, the company maintains positive EBIT and EBITDA margins, though they have decreased compared to previous years.65
Positive
Balance Sheet
The company maintains a strong balance sheet with a low debt-to-equity ratio of 0.0105 in TTM, reflecting prudent financial management. The return on equity has decreased to 1.35% in TTM from 3.31% in 2024, indicating reduced profitability on equity. The equity ratio remains robust, suggesting a stable capital structure.75
Positive
Cash Flow
Eastern Bankshares demonstrates strong cash flow management with a significant free cash flow growth rate of 11.79% in TTM. The free cash flow to net income ratio is high at 0.96, indicating efficient conversion of income to cash. However, the operating cash flow to net income ratio is not available for TTM, which limits a comprehensive assessment.80
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 982.01M | 1.07B | 558.71M | 681.93M | 523.48M | 582.52M |
| Gross Profit | 625.44M | 664.13M | 292.60M | 626.88M | 527.84M | 531.64M |
| EBITDA | 137.57M | 194.14M | -102.36M | 261.65M | 198.88M | 63.81M |
| Net Income | 49.48M | 119.56M | 232.18M | 199.76M | 154.66M | 22.74M |
Balance Sheet | ||||||
| Total Assets | 25.46B | 25.56B | 21.13B | 22.65B | 23.51B | 15.96B |
| Cash, Cash Equivalents and Short-Term Investments | 417.30M | 5.03B | 5.10B | 6.86B | 9.74B | 5.24B |
| Total Debt | 25.88M | 45.31M | 39.72M | 726.40M | 34.28M | 28.05M |
| Total Liabilities | 21.65B | 21.95B | 18.16B | 20.18B | 20.11B | 12.54B |
| Stockholders Equity | 3.81B | 3.61B | 2.97B | 2.47B | 3.41B | 3.43B |
Cash Flow | ||||||
| Free Cash Flow | 396.61M | 270.30M | 253.55M | 221.31M | 168.76M | 64.71M |
| Operating Cash Flow | 417.06M | 283.84M | 261.69M | 229.94M | 174.49M | 69.85M |
| Investing Cash Flow | -598.14M | 1.06B | 2.40B | -1.08B | -1.99B | -2.39B |
| Financing Cash Flow | -297.98M | -1.03B | -2.14B | -215.57M | 988.98M | 4.01B |
Eastern Bankshares Technical Analysis
Positive
21.36
Price Trends
19.90
Positive
18.91
Positive
17.26
Positive
Market Momentum
0.56
Positive
59.37
Neutral
32.98
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EBC, the sentiment is Positive. The current price of 21.36 is above the 20-day moving average (MA) of 21.06, above the 50-day MA of 19.90, and above the 200-day MA of 17.26, indicating a bullish trend. The MACD of 0.56 indicates Positive momentum. The RSI at 59.37 is Neutral, neither overbought nor oversold. The STOCH value of 32.98 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EBC.
Eastern Bankshares Risk Analysis
Eastern Bankshares disclosed 68 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
UnderperformOutperform
Sector (68)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $4.11B | 18.68 | 6.25% | 3.05% | 11.05% | -10.78% | |
77 Outperform | $3.56B | 10.49 | 18.97% | 3.38% | 2.35% | 13.72% | |
75 Outperform | $3.98B | 10.63 | 10.92% | 3.52% | 9.60% | 20.38% | |
72 Outperform | $3.86B | 19.64 | 5.52% | 2.47% | 20.26% | -35.00% | |
70 Outperform | $5.15B | 50.23 | 2.22% | 2.72% | -1.18% | -89.13% | |
68 Neutral | $18.00B | 11.42 | 9.92% | 3.81% | 9.73% | 1.22% | |
65 Neutral | $5.79B | 19.65 | 7.66% | 2.37% | -55.81% | -78.94% |
* Financial Sector Average
EBC
Eastern Bankshares
21.11
3.36
18.96%
BMA
Banco Macro SA
91.09
0.82
0.91%
FBP
First Bancorp Puerto Rico
22.56
3.14
16.18%
FULT
Fulton Financial
22.00
2.46
12.59%
INDB
Independent Bank
82.17
15.04
22.40%
RNST
Renasant
40.16
3.73
10.24%
Eastern Bankshares Corporate Events
Business Operations and StrategyDividendsFinancial Disclosures
Eastern Bankshares Posts Updated Investor Presentation for Shareholders
Positive
Jan 22, 2026
Eastern Bankshares, a financial services company, reported that in conjunction with its earnings announcement for the quarter ended December 31, 2025, its board approved a regular quarterly cash dividend of $0.13 per share, payable on March 20, 2026, to shareholders of record as of March 6, 2026. The company also disclosed that on January 22, 2026, it posted an updated investor presentation on its investor relations website, signaling continued communication with shareholders and the market regarding its financial performance and strategic positioning.
The most recent analyst rating on (EBC) stock is a Buy with a $21.50 price target. To see the full list of analyst forecasts on Eastern Bankshares stock, see the EBC Stock Forecast page.
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
Eastern Bankshares Completes HarborOne Acquisition Merger
Positive
Nov 3, 2025
On November 1, 2025, Eastern Bankshares completed its acquisition of HarborOne Bancorp, merging HarborOne and its subsidiaries into Eastern. This strategic merger, initially announced in April 2025, positions Eastern as the surviving entity and aims to enhance its market presence. The merger consideration allowed HarborOne shareholders to choose between stock or cash, with a majority opting for stock. The transaction is expected to strengthen Eastern’s operations and expand its market reach, with implications for stakeholders including new board appointments and integration of HarborOne’s operations into Eastern’s framework.
The most recent analyst rating on (EBC) stock is a Hold with a $17.50 price target. To see the full list of analyst forecasts on Eastern Bankshares stock, see the EBC Stock Forecast page.
Executive/Board ChangesDelistings and Listing ChangesM&A Transactions
Eastern Bankshares and HarborOne Bancorp Merger Closure
Neutral
Oct 28, 2025
On October 28, 2025, Eastern Bankshares, Inc. and HarborOne Bancorp, Inc. announced the closing of their merger agreement, initially disclosed on April 24, 2025. The merger will become effective shortly after midnight on November 1, 2025, with Eastern Bankshares and Eastern Bank as the surviving entities. As part of the merger, Joseph F. Casey and Michael J. Sullivan will join the boards of Eastern and Eastern Bank. The merger will result in the delisting of HarborOne’s common stock from the NASDAQ Global Select Market following the close of trading on October 31, 2025.
The most recent analyst rating on (EBC) stock is a Hold with a $17.50 price target. To see the full list of analyst forecasts on Eastern Bankshares stock, see the EBC Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.