Key Highlights

  • Net income and operating Net Income were both USD 111.0 million.
  • Period-end loans grew 1.1% from the prior quarter.
  • Non-performing loans fell USD 24.6 million to 0.36% of loans.
  • The company returned USD 89.1 million to shareholders.

Quarterly Results

Eastern Bankshares (NASDAQ:EBC) reported third-quarter 2026 results on Thursday. Net income and operating net income were both USD 111.0 million, or USD 0.51 per diluted share, against net income of USD 105.2 million, or USD 0.48, in the second quarter. Operating net income in the second quarter was USD 106.5 million, or USD 0.49. Return on average Assets was 1.41% and return on average tangible common Equity was 15.7%.

Chief Financial Officer David Rosato described the Operating Income as a record and said Operating Leverage continued. The operating efficiency ratio was 47.5% against 49.0%, and the reported efficiency ratio was 52.1% against 54.3%.

Net Interest Income and Fees

Net interest income was USD 257.9 million, up USD 5.9 million, or 2.3%. Net discount accretion was USD 19.0 million against USD 19.7 million, contributing 26 basis points to the Margin against 28. The net interest margin on a fully taxable equivalent basis fell 4 basis points to 3.62%, as the cost of interest-bearing liabilities rose 8 basis points to 2.09% and the Yield on earning assets rose 2 basis points to 5.07%.

Noninterest income was USD 48.7 million, down USD 8.9 million. Income from investments for employee retirement benefits fell USD 6.3 million to USD 0.6 million on weaker equity markets, offset by a USD 2.5 million decrease in related benefit costs. Miscellaneous income fell USD 3.1 million to USD 6.6 million after second-quarter Loan sale gains. Investment advisory fees were USD 19.4 million, down USD 0.3 million.

Noninterest expense fell USD 8.3 million, or 4.9%, to USD 159.7 million. Operating noninterest expense fell USD 6.7 million, or 4.0%.

Loans, Deposits and Wealth

Period-end loans were USD 23,974 million, up USD 261 million, or 1.1%, on Commercial Real Estate and commercial and industrial lending. Average loans were USD 23,831 million, up 1.5%, and average deposits were USD 26,127 million, up 2.6%. Period-end deposits were USD 26,017 million, up USD 98 million, or 0.4%, despite seasonal municipal outflows. Chief Executive Officer Denis Sheahan said commercial real estate payoffs continued to weigh on growth, though they moderated, and that pipelines remain active while closings were slower than anticipated.

Wealth assets under administration, a fee generating line, rose to USD 11.6 billion, including USD 10.8 billion of assets under management, on positive net flows and market appreciation.

Credit and Capital

Non-performing loans fell USD 24.6 million to USD 84.8 million, or 0.36% of total loans, from 0.47%. Net charge-offs were 0.09% of average loans against 0.17%. The preliminary common equity tier 1 ratio was 13.02%, against 13.00%. Tangible equity to tangible assets was 9.64% against 10.06%. Book Value per share was USD 18.56 and tangible book value per share was USD 12.96.

The company returned USD 89.1 million to shareholders, including USD 56.7 million of repurchases, which leaves about USD 32.4 million for dividends.

Reference Points

Operating net income rose 4.2% from the second quarter while net interest income rose 2.3% and the margin fell 4 basis points. Items to follow include the margin against funding costs, commercial real estate payoffs, tangible equity to tangible assets at 9.64% as Capital is returned, and Non-Performing Loans at 0.36%.