Eastern Bankshares (EBC) Q1 2025 & Merger earnings summary

Executive summary

• Reported a Q1 2025 net loss of $217.7 million, or $1.08 per diluted share, primarily due to a $1.3 billion investment portfolio repositioning, with proceeds reinvested at higher rates and expected to be $0.13 accretive to 2025 operating EPS.

• Operating net income was $67.5 million, or $0.34 per diluted share, up 68.9% year-over-year, reflecting core business performance.

• Announced a definitive merger agreement with HarborOne Bancorp, valued at approximately $490 million, expanding into Rhode Island and solidifying the largest bank headquartered in Massachusetts, with the transaction expected to close in Q4 2025.

• Completed merger with Cambridge Bancorp in Q3 2024, with ongoing integration and synergy realization.

• Announced an 8% increase in the quarterly dividend and repurchased $48.7 million in shares.

Financial highlights

• Net interest income rose to $188.9 million, up 45.4% year-over-year, with net interest margin expanding 70 basis points to 3.38%.

• Noninterest loss of $236.1 million included a $269.6 million pre-tax loss on securities sales; operating noninterest income was $34.2 million, down $2.7 million sequentially.

• Noninterest expense decreased to $130.1 million, with lower technology, marketing, and FDIC insurance costs.

• Loans increased 0.7% to $18.2 billion, while deposits declined 2.4% to $20.8 billion sequentially.

• Tangible book value per share was $12.01 at March 31, 2025.

Outlook and guidance

• No changes to full-year guidance; management remains optimistic about achieving previously shared projections and expects the HarborOne merger to close in Q4 2025.

• The investment portfolio repositioning is expected to provide pre-tax earnings accretion of approximately $35 million for 2025.

• Merger with HarborOne expected to deliver 16% EPS accretion by 2026, with top quartile profitability, NIM of ~3.7%, and efficiency ratio of ~50%.

• Cost savings from the merger targeted at $55 million, with 75% realized in 1H26 and full run-rate thereafter.

• Effective tax rate for 2025 expected to be about 11%, normalizing to 21–23% in 2026.