october | 2020...october | 2020 investor presentation 1 today’s presenters presenter(s) biography...

October | 2020

Investor Presentation

1

Today’s presenters

Presenter(s) Biography

Current Chair and CEO of Eastern Bankshares since January 1, 2017

Previously served as Director (c. 2015), Chief Operating Officer (c. 2012), President (c. 2007) and

Vice Chair and Chief Banking Officer (c. 2006) of Eastern Bank

Before joining Eastern, served as EVP of Retail Banking at Commercial Federal Corp until 2005 and

SVP of Business Banking at M&T Bank

Has served as CFO of Eastern Bank since 2012

Before joining Eastern, served as Founder and CFO of National Bank Holdings Corporation (c. 2009)

and CFO of Citizens Bank (c. 2001)

Joined Eastern in 2016 and serves as Vice Chair of Eastern Bankshares and President of Eastern

Bank

Before joining Eastern, served as President of Citizens Bank, Massachusetts and President of its

Business Banking division

Bob Rivers

Chair and CEO of

Eastern Bankshares

Jim Fitzgerald

CFO, Chief Administrative

Officer and Vice Chair of

Eastern Bank

Quincy Miller

Vice Chair of Eastern

Bankshares; President of

Eastern Bank

2

This is Eastern

200+ years serving

Eastern Massachusetts

with HQ in attractive

Boston market

Support communities

through Eastern Bank

Charitable Foundation and

extensive volunteerism

Advocate for social justice

and sustainability

Source: Company filings

Long-standing presence in our

community

Deep client relationships

Strong, consistent financial

performance

Prudent risk management

Deep, long-standing

client relationships

Strong brand

recognition

Diverse suite of

products and solutions

Integrated digital

capabilities and back-

end technology

High quality deposit

franchise

Attractive fee income

businesses (Insurance /

Wealth Management)

Strong core return

profile

Stable and consistent

organic growth

Robust capital and

liquidity position

Diversified loan portfolio,

primarily within footprint

Disciplined risk

management

Track-record of

disciplined M&A

3

Summary financial overview

Source: Company filings, SNL Financial, Note: Regulatory financial data as of June 30, 2020, unless otherwise noted

¹ As of June 30, 2019; ² Calculated on the basis of loans net of allowance for loan losses and unamortized premiums, net of unearned discounts and deferred fees;

³ Ratios are shown on annualized basis; ⁴ FTE basis; ⁵ See section “Overview of the conversion” for more detail

Overview Financial highlights

Largest independent Boston-based bank by deposits

Dense footprint with 94% of deposits in Boston MSA¹

Operates 89 bank branches and 25 insurance

agency offices

Diversified lending portfolio – 74% commercial, of which

17% is Business Banking loans, and 26% consumer

#1 SBA lender in New England since 2010

High quality deposit franchise – 17 bps cost of deposits,

60% in checking accounts

Diversified fee income provided by Eastern Insurance, the

third largest P&C broker in Massachusetts

Balanced loan portfolio High quality deposit portfolio

Selected metrics pro forma for conversion⁵ as of March 31, 2020

($bn) Minimum Midpoint Maximum Adj. Max

CET 1 ratio 22.7 24.5 26.3 28.3

Tang. com. equity $2.4 $2.6 $2.8 $3.0

TBVPS $17.77 $16.36 $15.31 $14.40

($bn)

As of and for

December 31, 2019

As of and for

June 30, 2020³

Total assets $11.6 $14.0

Gross loans 9.0 10.0

Total deposits 9.6 11.8

Loans / deposits² 93 83

Tangible common equity $1.2 $1.3

Cost of deposits 0.29 0.17

Yield on loans 4.52 4.03

NIM⁴ 3.96 3.49

Fee income ratio 30.7 28.9

Efficiency ratio 69.5 70.0

ROAA 1.18 0.60

NCOs / avg. loans 0.05 0.06

NPLs / total loans 0.49 0.56

LLR / total loans 0.92 1.17

CET1 ratio 12.7 12.8

Bala

nce s

heet

Key p

erf

orm

an

ce

Ind

icato

rs³

Cre

dit

² &

cap

ital

C&I23%

CRE36%

Construction3%

Business Banking

12%

Residential RE & HELOC

23%

Other consumer3%

Demand40%

Interest checking20%

Savings10%

Money market27%

CDs3%Consumer: 26%

Commercial: 74%

$10.0bn$11.8bn

% % % %

% %

% %

Sele

cte

d

metr

ics

4

Eastern Bank89 full service banking offices in Massachusetts and New Hampshire

Eastern BankCorporate Headquarters265 Franklin StreetBoston, MA

Eastern Insurance Group, LLCOffices in Massachusetts, Rhode Island and New Hampshire

Eastern Insurance Group Corporate Headquarters233 West Central StreetNatick, MA

Major city Branch footprint

Our markets

Source: Company filings, SNL Financial; Note: White borders are county borders

¹ As of June 30, 2019; ² Approximated as Suffolk County; ³ As of June 30, 2020; ⁴ Deposit share market rank among banks with <$50bn in assets

Branch and office presence Geographic deposit split¹

Top 5 Eastern counties

County

Deposits

($mm)

Market

share

Community

bank rank⁴

% of

deposits

Suffolk $2,955 2.8 2 31.2

Essex 2,123 8.2 3 22.4

Middlesex 1,761 2.7 6 18.6

Plymouth 1,135 8.8 4 12.0

Norfolk 832 2.8 6 8.8

Boston²31%

Boston suburbs63%

Other Massachusetts3%

New Hampshire3%

$11.8bn³

% %

Eastern

CT

ME

MA

NH

RI New Bedford

Salem

Lowell

Worcester

Manchester

Providence

Concord

Boston

Sullivan

Bristol

Middlesex

Windham

Merrimack

York

Providence

Hillsborough

Essex

Newport

Strafford

Norfolk

Plymouth

Belknap

5

Our roots trace back more than 200 years

1818

Founded as

local savings

bank serving

Lynn and Salem,

MA

1989

Reorganizes

as MHC–

no stock

(Mutual

Holding

Company)

1994

Creation of

Eastern

Bank

Charitable

Foundation

1998

HQ relocated to

Boston's financial

district

Eastern Insurance

formed through

acquisition of Allied

American Insurance

2002

Entered NH market via

acquisition of Centrix Bank

& Trust ($0.9bn assets)

2014

2018

Completed 14 year span

totaling 31 acquisitions of

independent insurance

agencies¹ ($125mm total

purchase consideration)

2020

Formed Eastern

Bankshares to

facilitate

conversion

1983

Becomes

FDIC

insured

Acquired Plymouth

Savings Bank

($1.5bn assets)

2005

Acquired

Wainwright Bank

($1.0bn assets)

2010

Bank M&A

history

(selected

examples)


¹ Excludes acquisition of Allied American Insurance

Acquired

MASSBANK

($0.8bn

assets)

2008

6

Eastern Bank Community EngagementCreating partnerships within the communities we serve

Health &

human

services

Small

Businesses

of Color

Early

childhood

development

Safe &

affordable

housing

Workforce

Development

Donated

>$140MMsince 1999

Partnering with over 1,500 organizations throughout eastern MA

and coastal and southern NH, across a myriad of community needs,

with heightened focused on economic inclusion & mobility.

Philanthropy Volunteerism Advocacy

Spur change

on issues facing

our communities

50,000Hours of

Volunteer Time

7

COVID-19: Supporting our Customers,

Communities and ColleaguesTangible steps taken during the COVID-19 pandemic demonstrates commitment

to all our stakeholders


¹ Excludes PPP loans

Created unique $5mm small business and

$2mm consumer COVID low interest loan fund

to support our customers

Working with borrowers affected by the

COVID-19 recession, offering payment

deferrals, loan modifications and LoC to

business customers with proven track records

All collection of overdue payments from retail

customers was paused on March 16, 2020,

including residential property foreclosure and

related property sales

As of June 30, 2020, Eastern originated

~8,100 PPP loans representing ~$1.1bn of

aggregate loan balances

Customers

Strengthening communities by donating

$8mm through May 31, 2020 via the Eastern

Bank Charitable Foundation

Helping to improve food security, shelter

and housing stability, and small business

resiliency

Providing sustained access to community

health organizations

Supporting immigrants, elders, victims of

domestic violence, and people with mental

and cognitive health challenges

Addressing the needs of children, their

families and care providers in the early

childhood education and care ecosystem

Continued branch operations in

underbanked inner-city communities where

drive-through opportunities are not available

Communities

Loans modified as of June 30, 2020¹

15%14%

10%

5% 5% 3%

11%

CRE Businessbanking

C&I Resi.real

estate

Constr. Othercons.

Total

$546 $107 $157 $111 $13 $11

$mm of loans modified

$946

Colleagues

~90% of non-branch

employees are enabled

to work from home

Premium pay for

customer-facing and other

employees that must

continue to work on-site

Continue to promote online

and mobile banking as well

as ATM transactions to

minimize branch visits

Our greatest resource is the

1,896 teammates who

continue to serve our

customers and communities

with enthusiasm

8

Investment highlights

Diversified revenue streams

Strong operating performance versus peers

Stable, low-cost deposit base

Disciplined underwriting and risk management,

and solid capital and liquidity positions

Track-record of successfully

executing acquisitions

Experienced and diverse

management team and board

Scaled position in attractive

Boston market

6

5

4

3

2

1

9

Strong operating performance versus peers1

Source: Company filings, SNL Financial; Data as of December 31, 2019

¹ Peers include BRKL, INDB, EBSB, EGBN, KRNY, NWBI, OCFC, PFS, STBA, FCF and WSFS

Differentiators driving our performance

Strong, low cost core deposit base generated

from deep client relationships and long-

standing position in communities

Attractive returns with further upside from

operating leverage

Demonstrated ability to produce superior

margins

Diversified sources of income, including

insurance brokerage and wealth management

Conservative approach to balance sheet and

risk management

0.29%

0.67%

3.96%

3.64%

31%

17%

93%

102%

1.18%

1.15%

ROAA

Net

interest

margin

Fee income

ratio

L / D

ratio

Cost of

deposits

1.28%

Impact of donation to

Foundation

Peer median¹ Favorable vs. peers

2019 metrics:

10

Boston area is one of the most dynamic

banking markets in the country . . .2

Source: SNL Financial, US Census Bureau, Bureau of Labor Statistics1 Data as of June 2020; ² As per latest Statistics of United States Business data (Firms with 100-499 employees, by MSA);

³ As per latest US Census Bureau data (2018Y, by MSA); ⁴ As per latest SNL Financial data (2019Y, by MSA);

⁵ As per mass.gov/hq2, October 2017, considers independent hospitals in the U.S. who have received funds from the National Institute of Health

>3k small and mid-sized businesses² based in Boston,

ranking 9th most amongst American cities

$80k median annual household income³ in Boston

exceeds the national average by $18k per year

7th largest deposit market⁴ in the U.S.,

with $250bn deposits

43% of Bostonians over 25 hold at least a Bachelor’s

degree, vs. 33% across the U.S.

9% of Venture Capital investments from ‘07–’17

funded companies headquartered in MA (second to CA)

STEM jobs are projected to grow by 13% from ’16–’26

in Boston vs. 11% in the U.S., with ~$98k / yr salary

Hospitals comprise 7 of the ten largest employers in Boston

and 5 are in the top 6 of NIH funds received⁵

Best in business and education, resulting in prime demographics

>100 Colleges &

universities

22%

20%

15%

12%

8%

7%

6%

4%3%

3%Education and health services

Professional and business services

Trade, transportation and utilities

Government

Financial activities

Manufacturing

Leisure and hospitality

Mining, logging and construction

Information

Other services

Diversified industry employment1

Fortune 500

companies14

Boston is one of the most attractive urban areas in the U.S.

11

. . . and Eastern has a scaled positionEastern is the largest Boston-based community bank

2

Source: SNL Financial

¹ Data as of June 30, 2019; ² Banks with <$50bn total assets

Rank Company

Market

share

Deposits

($bn)

% of

company

deposits Branches

1 Bank of America 29.0 $72.4 5.4 156

2 Citizens 16.6 41.6 33.2 194

3 Santander 6.5 16.2 2.0 151

4 TD 5.1 12.7 1.8 106

5 First Republic 3.6 9.1 10.9 5

6 3.6 8.9 93.7 79

7 Independent 2.7 6.9 73.1 66

8 People’s United 2.4 5.9 13.0 54

9 Meridian 2.0 5.0 100.0 42

10 Boston Private 1.8 4.4 67.5 11

Market totals 100.0 $250.0 – 1,507

Boston MSA community bank² deposit market share¹Boston MSA deposit market share¹

Rank Company

Market

share

Deposits

($bn)

% of

company

deposits Branches

1 3.6 $8.9 93.7 79

2 Independent 2.7 6.9 73.1 66

3 Meridian 2.0 5.0 100.0 42

4 Boston Private 1.8 4.4 67.5 11

5 Century 1.6 4.1 100.0 27

6 Middlesex 1.6 4.0 94.7 30

7 Brookline 1.6 3.9 68.5 32

8 Salem Five 1.5 3.9 100.0 35

9 Cambridge Financial 1.3 3.3 100.0 18

10 Cambridge Bancorp 1.2 3.0 99.2 22

Market totals 100.0 $250.0 – 1,507

%

%

%

%

% %

12

0.06%

0.31%

0.23%

0.32%

0.68%0.70%

0.50%

2.50%

0.25%

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

Mar-16 Sep-16 Mar-17 Sep-17 Mar-18 Sep-18 Mar-19 Sep-19 Mar-20

Peer median Federal funds rate

Cost of deposits since March 2016

Stable, low-cost deposit base3

Source: Company filings, SNL Financial, Federal Reserve; Data as of March 31, 2020

¹ Company deposits adjusted for acquisitions of whole bank companies during the measurement period; ² Measured from Q1 2015 to Q1 2020;

³ Implied deposit beta calculated as the change in cost of deposits as a percentage of the change in the target federal funds rate over the 2015 Q4-2019 Q2 period

Focus on long-term client relationships contributes to stable,

low-cost deposit base

Mobile banking platform supports core deposit gathering ability

97% non-time deposits over ~500,000 accounts

Only ~1% of accounts have more than $100k in deposits

Disciplined organic growth in core deposits, including interest

checking which grew at a 5.3% 5–year CAGR²

83%

97%

22%

12%

Peer median Favorable vs. peers

4.6%

5.3%

Non-time

deposits

Deposit

beta³

5-year

organic¹

CAGR²

13

31%

17%

Diversified revenue streams4

Source: Company filings, SNL Financial; Data as of June 30, 2020

Eastern Insurance Group

In 2019, Eastern Insurance Group grew to become the third largest P&C broker and fourth largest benefits broker in

Massachusetts, and as of 2020 is the 30th largest Property & Casualty agency in the U.S. (as measured by revenue)

Operates an agency business (no underwriting or insurance risk) through 25 non-branch offices and brokers property, casualty,

life and health insurance to persons and businesses

Insurance commissions have grown at a CAGR of 4.4% over the 10 years ended 2009–2019

Eastern Wealth Management

Holds $2.6bn of assets in fiduciary, custodial, agency capacity for individuals, trusts, businesses, retirement plans, and charities

AUM 5-year CAGR of 5.1% from year-end 2014–2019

Strategic focus on having diversified revenue streams

Eastern has successfully built-out non-banking business lines (2019)

Peer median

Fee income ratio

Insurance brokerage

50%

Wealth11%

Other39%

$182mm

Noninterest income composition

14

Disciplined underwriting and risk

management . . .5


¹ Sum of NCOs / average loans for the calendar years 2008–2012

² Calculated as the median among current KBW Nasdaq Regional Banking Index (KRX) constituents

³ Shown on an annualized basis

Long-term focus on communities served

Focus on originating high-quality loans, believed to

generate stable returns

Consistently lower charge-offs and NPLs vs. peers

over the past five years

Centralized processes and consistent underwriting

standards serve as the bedrock of a conservative

credit culture

Significant investments in technology to scale

platform

We believe we have positioned the company to

successfully navigate a range of credit and interest

rate environments, including the current COVID-19

pandemic and low interest rates environments

Cumulative NCOs during Global Financial Crisis¹

of 3.0% vs. mid-cap banks² at 4.3%

CECL effective for reporting periods starting

December 31, 2021; effect on ACL currently

unknown

(0.03%)

0.04%

0.02%

0.10%

0.05%0.06%

0.16%0.15%

0.10%

0.08%

0.13%

0.07%

2015 2016 2017 2018 2019 2020 YTD

Net charge-offs³

Peer median

0.24%0.30%

0.23%0.30%

0.49%0.56%

1.08%1.00%

0.78%0.72%

0.58%

0.81%

2015 2016 2017 2018 2019 2020 Q2

Non-performing loans

Strong performing and quality risk management

LLR / loans 0.92 0.91 0.90 0.91 0.92 1.17

LLR / NPLs 3.83 3.03 3.91 3.03 1.88 2.11

% % % % % %

x x x x x x

Provisions /

avg. loans0.00 0.11 0.07 0.18 0.07 0.39% % % % % %

Provisions /

avg. loans

LLR / loans

LLR / NPLs

15

Industry

Balance

($mm)

Balance as

% of total

loans

COVID-19

mod. as %

of loan type

Retail $479 4.8 24.5

Restaurants 200 2.0 57.5

Hotels 180 1.8 37.5

Commercial

construction105 1.0 11.0

Autos 86 0.9 2.6

Other 87 0.9 17.1

All impacted

industries$1,137 11.3 28.9

All other loans $8,878 88.7 7.9

Total loans $10,014 100.0 10.6

. . . with a balanced, granular loan portfolio . . .5


Diversified lending and customer exposures

Well-balanced between consumer and commercial

and no single industry concentration exceeds 11%

(Finance & Insurance) in the commercial portfolio

Portfolio composition

Multi-family7%

Retail5%

Office4%

Industrial /warehouse

4%

Mixed use3%

Other13%

Finance and insurance2%

Wholesale trade2%

Manufacturing2%Real estate

2%

Administrative services2%

Other12%

Construction3%

Residential RE<1%

Consumer home equity<1%

Auto2%

Other2%

CRE

36%

$10.0bn

Loan diversification

Residential RE

14%

Consumer home equity

9%

Other consumer

3%

Construction

3%

Business Banking

12%

C&I

23%

COVID-19 High impact industries (excluding PPP)

%

%

%

%

%

%

% %

16

Potentially establish quarterly dividend and share repurchase programs post-conversion

Subject to acceptable ongoing capital position and relevant regulatory approvals and compliance

Prudent loan and deposit origination

Investment in product development and omni-channel delivery to enhance efficiencies

Investment in state-of-the-art technology and best-in-class talent

Create value for shareholders

Consistent with company mission

statement

Maintain strong capital position and low

risk profile

Complement financial strength, reputation

and culture

Support competitive position in the market

. . . and solid liquidity and capital positions5

Source: Company filings, SNL Financial; Data as of March 31, 2020

Liquidity Capital

Pro forma at each conversion execution level

Min Mid Max Adj. max

22.7% 24.5% 26.3% 28.3%

Favorable vs. peers

Loans / deposits ratio Cash + securities / assets CET1 ratio

18.8%

14.5%

Median peer

12.4% 12.0%

Median peer

87%

101%

Median peer

1Organic growth

2Shareholder returns

Value creative for shareholders, consistent with company values

Enhance funding profile, product capabilities or geographic density with acceptable risk

Focus on community banks and insurance companies in existing and contiguous markets

3Strategic acquisitions

Framework for deploymentGuiding principles

17

Track-record of successfully executing

acquisitions6

Source: Company filings1 Completed acquisition in 1999

Seven bank M&A transactions

completed since 1999

Strong presence in Greater Boston

that extends to SE Massachusetts

and New Hampshire

Bank M&A Forward-looking M&A criteria

In-market / contiguous

Strategic & cultural fit

Enhance funding profile, product

capabilities, or geographic density

Attractive returns

Acceptable risk profile

Eastern Insurance Group created by

acquisition of Allied American

Insurance Agency in 2002

Acquired 31 independent insurance

agencies for an aggregate $124.9mm

purchase price between 2004–2018

Insurance M&A

Acquisition (mutual) of

Plymouth Savings Bank

$1,500mm assets

27 branches in MA

Acquisition (cash) of

MASSBANK

$800mm assets

15 branches in Greater Boston


The Community Bank

$324mm assets

Five branches in MA


Hibernia Savings Bank

$444mm assets

Nine branches in MA

19981

2005


Sharon Co-operative Bank

$68mm assets

One branch in MA

2007

2008

Acquisition (cash) of Wainwright

Bank & Trust Company

$1,000mm assets

12 branches in Greater Boston

2010

2012

Acquisition (cash) of

Centrix Bank & Trust

$909mm assets

Six branches in NH

2014

Bank M&A track record

Eastern is well positioned as an acquiror of choice in our local markets

18

Investment highlights

Diversified revenue streams

Strong operating performance versus peers

Stable, low-cost deposit base

Disciplined underwriting and risk management,

and solid capital and liquidity positions

Track-record of successfully

executing acquisitions

Experienced and diverse

management team and board

Scaled position in attractive

Boston market

6

5

4

3

2

1

* See appendix

GOOD INVESTS. GOOD ADVISES. GOOD LENDS. GOOD HELPS FEED HUNGRY KIDS. GOOD

FUELS THE HUNGRY STARTUP. GOOD HELPS KIDS LEARN TO PAINT. AND DANCE. AND REALIZE

HOW SPECIAL THEY ARE. GOOD BUILDS PLAYGROUNDS. AND REBUILDS LIVES. GOOD INSURES.

GOOD ENDURES. GOOD FIGHTS DISCRIMINATION. GOOD STANDS UP FOR EQUAL OPPORTUNITY.

GOOD INNOVATES. GOOD EDUCATES. GOOD ADVOCATES. GOOD HELPS PEOPLE BEAT

ADDICTIONS. GOOD PAYS CLOSE ATTENTION. GOOD PAYS IT FORWARD.

october | 2020...october | 2020 investor presentation 1 today’s presenters presenter(s) biography...

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