EBC - Earnings call transcript Q2 2022 | Eastern Bankshares, Inc.

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Operator

Hello, and welcome to the Eastern Bankshares, Inc.

Second Quarter 2022 Earnings Call. Today's call will include forward-looking statements, including statements about Eastern's future financial and operating results, outlook, business strategies and plans, as well as other opportunities and potential risks that management foresees. Such forward-looking statements reflect management's current estimates or beliefs and are subject to known and unknown risks, uncertainties that may cause actual results or the timing of events to differ materially from those expressed or implied in such forward-looking statements. Listeners are referred to the disclosures set forth -- under the caption forward-looking statements in the earnings press release, as well as the risk factors and other disclosures contained in the company's recent filings with the Securities and Exchange Commission for more information about such risks and uncertainties. during of represent today. made estimates views statements as only forward-looking this management's call and Any

company in While views representing forward-looking if should point Difficulty] the not statements [Technical company management's due at [change] the may change, to such subsequent some to in elect views or rely the any and so on to management's do relation to estimates update specifically [today]. even and you future, as statements

financial will company also the measures. call, non-GAAP certain the During discuss

of press For measures at the CEO. and can to reconciliation now event financial a such to ahead, to go I'd to Please Instructions]. this found like comparable over non-GAAP Bob refer is turn please Rivers, the be [Operator call sir. being investor.easternbank.com. note, Chair GAAP release, figures, Please company's recorded earnings which the

Bob Rivers

you, you thank of thank everyone. Well, earnings for joining Sergio, and morning, call second quarter XXXX. good And Great. our

Jim me Fitzgerald, our is Officer Financial Officer. Administrative Chief Joining today and Chief

large by higher bolstered the and high many Boston the is diversity among life spectre sectors, work, considered tenants of during shift continued sciences inflation results to second quarter country, made within demand of for industry COVID uncertainty our the United brought past Despite attractive impacts low in States. strong, by investments in tailwinds markets the the of about the the in one recession, to we've franchise markets the on and reflecting reliance the space. Greater strengthen the year of benefits best-performing to the most strong remote over relatively Our the of by be office

We're annualized have quarters Bank our months, was early PPP potential commercial the believe new of talented rate the financial a signs our recent loans, well income their us the few operating most the additions which commercial than production realize which quarter. leverage are they're staffing in the that seeing to which accelerated joined Century acquisition months contributing eight net Since ago, to XX% in our we enhance to effects of higher these prior quarter, capabilities addition to net yet to lending for the bodes for we reflected are XX% generated quarter. by team, In joining past ahead. already highly hires growth, of and full loan the in the

also those Some the of to expertise in acquired we who we the these which Century higher of within capabilities sectors, through traction add leaders commercial additions and emerging expanded well. networks bring new in gaining lending in activities. healthcare education senior of transaction our These which areas added further and as are

the As at grew consumer strong economy for and we pipelines, sequentially these these increased Boston stated portfolios for we lending in Greater Residential a are basis, solid also high given our on on growth emphasis commercial continued the and rates loan double and own in in factors driving higher digit still track believe digit past, an on we the single have categories. year. growth annualized balances reflecting our

XX% million of and by end since business deposit during quarter as balances deposits. service and balances about of with $XXX cannabis already our comprised respect points, checking basis X by declined basis in deposits of of core rates, during our discipline deposit widening a interest to quarter rising our low XXXX. quarter, point our in the addition, expansion In resulting the the increased almost quarter the our in total actually April, XX interest by largest deposit early money just in account was slightly longstanding of due to points basis base in XX% transfer by margin Net pricing X cost by face and net single

supporting history, days acquisition in our stride hit and strengthen performance in and customers our of deposit in affluent Needham, shareholders. our largest expand our about thoughtful our in some suburbs. the Most franchise while we We we a to darkest community value Western midst be we communities outreach. the of completing and continue the complements to our after driving network and they which recently, Overall, branch Public locations strong Massachusetts, can delivering our greater the in believe beginning Eastern branch Boston's how opened in long pandemic, to and and taking are operating

tremendous our and colleagues and serve work As always, to whom these every with again, communities Eastern am day for Once each they whom hard things reflect do X,XXX of And for thank in an our now the of outlook over to I privileged Eastern. XXXX. customers, for and results I commitment for our my all review to remainder work of in depth for interest your you Jim performance turn and other. joining the in today thank financial our us I'll

Jim Fitzgerald

Thank morning, and you, Bob, good everyone.

of very net as was was Operating XX income per XX of million was million or the rates interest asset our for Net increased from per outlook income $X.XX than points include $XX.X quarter We share. and improved second has the rising net changes, rate higher higher basis risk we've strong impact we'll basis how prior Bob or the talk Operating on momentum last Net interest my benefits our yields of last and QX. based our think for from had QX. margin our net from transaction strong also later quarter second interest demonstrate well our positive was our and as updated share. same was from income by from interest from with impacts XX% $XX.X Century’s As for the and quarter Higher our call the essentially X% diluted remarks. cost earnings they as income we're we in interest very those results. mentioned, management second the many unchanged the year, in rates. projected net to rates changed outlook The diluted income $X.XX quarter XXXX. the points, outlook quarter quarter, pleased interest the funds the

commercial major a up We also XX% loans loan quarter-to-quarter. strong with of growth in had quarter all of portfolios our

residential mortgages were Excluding on consumer these and percentages XX%. up loans were basis. Each of an PPP XX% annualized are loans, up

approved XXXX. Board program September dividend of of record for repurchased the was on costs, the quarter, $XX.XX X.X payable million from in in We excluding repurchase million X, September shareholders quarter. purchase per a under to share shares, second average share commission on the $X.XX $X.X The XXth Our shares price up in QX. our

the make on I'll balance First, sheet. some comments

quarter billion was driven Assets the XXth. the early were up over down $XXX part and the million. were the had and $XXX $XXX the market Commercial million at $XX up in $XX XX% million acquired major loan categories by only as XX% The loan down down $XXX loans, or were $XX down were primarily quarter. values. lower loans portfolio was All PPP or million and loans loans, by annualized, for or transfer were securities in total of services to were million, securities were June the in from we loans residential annualized up annualized. million billion XX% PPP million consumer remaining money to deposits excluding $XX home portfolio by to of due PPP million. quarter million lower $XX.X in and Century. just offset growth million, This up equity loans, cannabis April Cash deposits $XXX $XX.X due from were $XXX

on XX down As and of also were share mentioned million the comprehensive by quarter, the the of offset just April. the reflected repurchases transfer deposits cannabis increase deposits partially reflect and quarter, early Page Average under the decreased services cannabis down in of deposits accumulated reduction which retained million in due $XXX in were million the and the above, $XXX to the income an in in the $XXX $XXX transfer. in Shareholder outlined earnings. presentation in we money the equity million which other of quarter period, impact

to Turning earnings.

March GAAP very of income I was million in increase per We were million and diluted $XXX.X and rates million the or quarter. in earnings income or $X.X reflect million from $X.XX in our As second many X% $X.XX Net operating benefited in and interest was than higher results key diluted areas. QX strong interest the mentioned, share progress per feel $XX.X share. net $XX.X or

Asset yields in and quarter unchanged. and essentially were the basis costs were funding points XX quarter-over-quarter up

quarter offset due in million expense benefits compared quarter compared $X.X X% expense plan in $XX quarter, were basis Insurance year in release expense a provision when slightly noninterest and were the $XXX.X a portion quarter, revenue gains processing a million to was slightly include loss and resulted quarter second higher from $XXX,XXX we $X.X guidance million second million remarks comments $XXX.X $XXX.X second full prior the of of a is million expense. a was QX. The higher QX. million which $XX.X from primarily quarter Our lower down from nonoperating in in of basis, expenses. incentive deposit the to stable negative funding compared from second basis outlook our interest tax QX the salaries QX On of and costs X was margin million We compared the $XX.X in which professional the Occupancy, Noninterest fees asset in to increases and receive XXXX. XX payments to were in This with in all outlook Other line expenses. tax and revenues partially in value to increase full QX, an were insurance year QX for yields in of rabbi in Noninterest X a revenue in expense This declines X.XX%. trust quarter. the by offset year. basis to the rate on the on $X.X second quarter compensation income million points reserve few point an for were by QX. primarily combination one partially the the to was I'll items million stock had of the by compared month's and quarter due data million. to provide expense quarter, the of generally noninterest and in was on from my line The equity marketing assets to QX in later and building X.XX% operating slide. either sharing QX slightly was of in operating carriers. basis or in in our prior allowed we market. prior down $X.X net higher than points from release was sales, expand $X.X in, for for rate operating the QX first The higher costs loan down million in up an

projected rate as rate. will increase, tax is well. the as And higher earnings average marginal Our average rate than tax the increase

to sound. Asset be continues quality

and both and COVID recoveries very, syndicated For to to due to facility. the was first perform There few to a to credit, over from of very credit Away quarters. continue charge-offs approximately as nonaccrual were modest. $XX and were are nonperforming expected in the million one very will a movement that it little loans workout increase credit QX. without of half facility be was XXXX, an from down next approximately million. equal resolved in essentially optimistic modifications in $XX change we're loss The there is one

had in our As reserve in additional increases outlook above review provided for was to ratio QX when the the loan I make forecast. XXX%. in seven of and for compared XX increase Even remained release NPLs XX the to incorporated of I some quarter, basis NPLs, Page just noted, our points $XXX,XXX. to Fed by on million provision $X.X our loss comments. wanted we with we outlook XXXX, a Last the

million This X.X% which we year an million, assuming of of interest net upper expect by $XXX the million. with from is $XXX consensus for up prior Fed million aligns an $XXX With the XXXX, to the we XXXX. income to now bound rate $XXX of million forecast, are view. of end increase funds We that believe outlook would target in $XX

rates in some our the over the creates different few than clearly As The net last we XX on of rate presentation, we've environment current outlined had is years. dynamics helping interest income. the increase Page

year, drivers expect QX rates, note the uncertainties of naturally require As in QX. downside remain billion protecting our the throughout that XXXX. combination to assuming where end, do expect to continue economic and primary rates scenarios. that general two for start to of into program to initiated be rate that sensitive in sheet variable in To wanted a outlined, asset rate there are we rate fixed to balance assets the of hedging impact and The full of we higher us $X convert would asset unchanged I and more a our year of XXXX to sensitivity. I just our relatively the will felt rest for

low The loans the second short are that cost repricing first high of and level liabilities variable rate our is is long deposits nonmaturity duration intervals. have our term that

our used strategy. guidance There's asset on We swaps XXXX. sensitivity we million to quarter are for no from that continuing practices change overdraft reduce on historically and and still guidance $XXX $XXX $XXX We with sheet is to XXXX. in very have million balance change income our noninterest our comfortable million expect that between we last still expense last $XXX did we change Xst expect starting as included noninterest and for There's in in reduction as July quarter, guidance. that our this previewed operating no million

carefully. are expected, As pressures inflation we watching wage

and colleagues wages many to help steps recent to of branch operations workers. attract our some taken have increase We and retain for

also comfortable year. the expense provided earlier we But we pressure when recruit wage are with We the in for replacements. experienced guidance still we

As XXXX in QX. a rate I very major originations had mentioned slightly previously, higher strong for in portfolios to loan due earnings on we all levels. part our a of higher tax quarter expect for We

commercial over time. to single to the in loan growth expect continue be mid to digits We high

as be can it from see QX QX can you our little and quarter-to-quarter. volatile Although, results, a

changes We we that over impact. relatively We a potential coming commercial now will we the may and any to this loan PPP see economy impact have and growth more weakening update as our loans quarters. over small do visible that time, expectations, rates expect interest growth higher a expect be

last we flow and portion purchase Embrace originations XXXX. from Loans. for We a efforts have in Home to The the options, our a means our us arrangement Embrace size in After portfolio reducing a balance purchase a mortgage of Rhode of is few been and residential located into our provides over Island interested year. processed supported agreement flow for has entered our to the considering loans enables investment originations have us sheet. their since that

on portfolio to We goal approximately but we'll expect securities cash the month flow the sheet a too an much with QX, an have process of our started the year in loans. redirecting as balance We of million a don't of progresses. into provide update progress $XX impact

portfolio in is that expectation size reduction portfolio program residential mortgage we as in see this Our will similar the a develops. increase securities and loan a

more progresses. to get expect challenging We year the deposit environment as the

Although we we cost be received regulatory any capital. to subject repurchase would see activity expect be very our conditions. for We'll approved, authorization continue X% in deposit of expect quarter, increase and repurchase costs Future last and volumes the use didn't the quarter-over-quarter thoughtful close that increase. questions. ready begin about second to November. beyond challenging. approval Sergio, market to our will experience to to if did continue on that approval, Thanks. we're We is And average completing deposits We're to share decline regulatory be based

Operator

question comes Janet first Your from JPMorgan. Instructions] [Operator Lee from

Janet Lee

to deposit data. start the want with I

for guys. for the of of cycle? experienced bearing any prior your this XX% guys prior the to the Is would in beta what versus right one? deposit interest-bearing behave cycle in differently deposit rising low around the So beta ballpark beta terminal expect And sort you I you understand deposit rate you that interest historically in

Bob Rivers

-- slightly through I than or our it very higher time, one in XX% but the in you XXXX, disclose XXXX, the I the the about period we rates at number when think was was slightly was XXXX. from and similar. thing actually beta Fed and course deposit time was XXXX the beta, into historical it think then And to lower XX%, was happened the referenced, time. did back basically 'XX always that to precisely in started is note 'XX I pandemic end the that want reversed of The or range that in in the

was there acceleration. huge So a

to if rise, feel a have we internally, rates So would an bit higher. continue of honestly, that's because quite number, like optimistic the been beta little

we number, roughly that of internal higher a for that. purposes, beta our than assume historical So XXX%

Janet Lee

the Is guide? you're terminal for NII is that or in what you're assuming XXXX what that assuming

Bob Rivers

have by for since Terminal, might you clear define you I'm what mean that. not to me

Janet Lee

XXX% So being deposit XXXX that leads versus and range basically the would expect interest XX% achieved say, or through, or higher that bearing the and to beta of by the beyond you like like end prior flows end XXXX? of mid-XXXX

Bob Rivers

think I the So we're increases. didn't second have at of in XXXX, quarter, July we any

of the of used We beta really I that XX% end So is XXX% that that don't by place over be year. to time. in expect this

in pretty calculations So quickly past XXXX. term. very short to of Rates we kind hard would move It's the extend those calibrate here. well

Janet Lee

asset your in annualized from would sensitivity downside us of on potential funds? XX you sensitivity, say, an rate so reduce from, give get Can NII protect to Fed rate in your you point trying how to scenarios. on And you're much NII let's that as a update terms basis increase

Bob Rivers

we're our them. isn't week. of So do do next We'll that about have scenarios, information in of We number a one to one there. XX-Q

So we answer week. will the I can next normal provide XX-Q think question, in don't I that but disclosures the

Janet Lee

And growth. deposits on

So grow the cannabis it's more to getting $XXX a is for still deposits I modestly accounting that period-end basis challenging doing. million deposits. like on you after given get looks the But grow what to deposits managed guys Fed

and about the the deposits bearing of current magnitude think of So back how about XXXX? And from the should in of XX%? we think noninterest total should mix sort half the decline to deposits the I how going of

Bob Rivers

great Janet. think I Eastern's deposit I history a responses give, been has a few gatherer.

peers our in That cost great two as If over did or XXXX. see last XXXX our time, in month growth the and be there's favorably are certainly look and compares think you And period deposits deposit of at challenged. clearly, deposit over -- the had the you extended an and to of we I really with said, at been growth funds total industry our going we're in months, a look some very that of deposits change it industry.

to hard we've a period -- it's be tough believe. exactly signal we us deposit So is how are next we did the to growth don't that going measure time. out, Deposits to of the know that's grow, had we to for play great for going be but going think historically to

just deposit our think total, quite look I at in not particular which category strong. one mix, is we any

shifts interest we mix market what we into As for see money related accounts like sensitive from deposit more deposit consider interest accounts, rates accounts increase, transaction our some do of would example.

expect cycles expect do previous attention to we occur. of and well. that we as in interest rates for beyond gave continue So has the that are net kind in as shift higher to would factored that. It the and people gave obvious, we reasons outlook that 'XX That's to are income for more

Janet Lee

last The growth. My gave helpful. on agreement, was you on flow loan color question that the

in growth So consumer of this might of just it think I And maintain growing second about and then assume through How little is resi experienced down overall XXXX? that bit the back should what growth versus residential you balances to back half pace the the year a and the can quarter? for full continue fair you half consumer XXXX the XXXX? the slow then in loan

Bob Rivers

little one me -- step unpack there, let at there's a So just let me bit sort a time. it lot of

cash previous come portfolio. the growth We equity second the [through] The a the Embrace portfolio, for saw maybe from you not year. So up we what saw sort residential haven't numbers. make great growth we of in It down continue. very like we and the we'll I going any would expect or bit, the this terms XX% residential progress had the we make may to reason. understand, growth this also growth relatively It's but the -- show in the that that small Similarly, Eastern. loans. do the that's rest be securities But in something we try components our into many arrangement and off in than I the to but going dollars to start saw home portfolio securities not goal rate to little historical particular we've initiated dollar equity. down equity portfolio home high continue, result the the forward in quarter just going, in base. like in the quarter continued our sustainable feel for up that rate category. quarter that the two kind get we're in so had and we I'd -- quarter, of the percentage we product at had new in will break from with is to that into so growth the we growth that that that the this of had those to look small in you a here point, XX% redirect think category the flows with growth of residential I direct category, that's quarter. The I easy growth, was flow, the is Embrace, team I'm would a relatively of as a towards second strong portfolio think in sure tracking industry, see. think easier in we the home residential our dollar organic away growth was more And loans origination percentages cash But we'll pegging is the for loan was to in

by you'll it relationship. Embrace an impact. more get as as that growth while but We've driven that said, going, be doesn't for and takes because in just So become literally July, the a originations. to the I see will residential flow loan the started applications through And in of we have

try quarter, third that that. the you transparent and very get on we'll So so as see we can that be closer to

Operator

Fitzgibbon. question next Mark from comes Your

Mark Fitzgibbon

this investment stands And us, advisory First, with I curious well wondered this revenues trust really quarter. where look AUM if like up quarter? flows you held could share what I'm and and your

Jim Fitzgerald

things your couple down. fees there's happened, what anticipated than I that when AUM quarter-to-quarter. was about think there's the is down. are I in note AUM expect have did fees and what much see we fees. with And we that different They question. timing own is of are as expected. market assets things at in And internal The amount cetera. see a precise income the in would I of down, don't our charged. that some And anything it's don't because down the little the line a were et growing fixed market But there, that up end the the year. as there's not view until reversal you bit

So do there there's moves a little little bit see of anything the of a side assets we are that less we to that. to a asset catch that was up that bit surprising in But and sensitive trust didn't than some some have market us. of management

Mark Fitzgibbon

then And that -- sort of looks was, resolution? and what if that more wondered it timing color us went any industry give what the nonaccrual could Jim, collateral you backing secondly, I any around it like on

Jim Fitzgerald

but workouts. be bit Workouts So but that, it little than believe time quarters it's that don't in a may process of will happen. we local, participant, would a credit you will like, take anticipate a It loss. take a couple it's always were mentioned, it's more syndicated and we resolved, anyone as workout

Mark Fitzgibbon

pricing the them you assume loans. with on you arrangement made that with you question that types you I the is, sort have detail had wonder I of of of flow? give Embrace given could loans you've then a little just the want home for us loans to buy. them I And if more kind What last relationship

Jim Fitzgerald

we who a the on owned for mortgage aware this those process. independently outsourced And -- Rhode is aren't phone relationship, in have have company of They Island. just Embrace our

we in So relationship. has back outsourced successful a XXXX, been process very our into and them

mortgage a provided goal feel possible accept them. like from that a as call as much loan we acceptance But make a look originated an what have that We to perspective. We've for from. and our states risk Eastern would There's is we’ll to on it credit products. limitation criteria originations product the

close We of are very today, business that don't most those we states are some in home. but do to in

Mark Fitzgibbon

Jim? pricing, And

Jim Fitzgerald

the at pricing based Loan there's daily with there's are a So on loans a for also, Federal Embrace rates paid interest and here spread. Home formula a Bank the we rate both to servicing premium And Eastern.

Operator

next Point from question Compass Research. Laurie comes Hunsicker from Your

Laurie Hunsicker

with Embrace staying Just here.

So England. that footprint, it this is most you be Am right? a I will of hearing to New said focused though national

Jim Fitzgerald

the East Yes, Coast, Laurie.

there's the East and in close just states in New in but New to beyond -- home, speaking, So not all Coast to a England, closer home, it's generally generally of number it's but speaking, England. all the

Laurie Hunsicker

then what what And FICO of terms the FICO you is is and low you're how targeting, in go? the

Jim Fitzgerald

So we criteria. said, same as our for It's we we the what I use call a own that criteria risk have acceptance originations.

just credit absent fact expectation said from that belief in or own some change their no look I here little than there's portfolio, Massachusetts, that. So originations, these appetite that the like tighter is anything they're earlier. and not as criteria. bit the the own it's credit And a in ways, confidence But and will quality our like

Laurie Hunsicker

probably refresh FICO have is don't So right? then the in that then, number, like average complete that your mid-$XXX, $XXX, but you $XXX, a puts I

Jim Fitzgerald

can can head. my know credit off quite particulars follow answer don't of follow I know up quality to that up. is the book don't I We top it that. high. some Laurie. We on of residential with our But question, the the

Laurie Hunsicker

just a then do one on how And also question plan this. the deposit more or about the there you relationship, think Is to that? customer, capture capture

Jim Fitzgerald

we customer here, of days loans, in so we're the have I early beginnings early relationship. that program. would So the very as servicing very We're mentioned,

be the loans have relationship we and stuff but try over from that the perspective. and will time, figure we'll that So servicing

Laurie Hunsicker

question on add do on this? just How And you much to in last plan or so this. the year next

Jim Fitzgerald

portfolio flow of really month. -- the times have million a cash and a I a mentioned couple quarters, as over I we about think, the is couple $XX of from securities

Our initial plan well for it's sure ourselves started, Embrace. happens, is get working to see what both make here and just

a partnership we earlier, with As have I strong said them.

them important, for works it's works and us. for it So

Embrace I think and would couple go reevaluate have obviously we is the of to the through our reevaluate this let next and we expectation for as would the year would months, well. end maybe of

Laurie Hunsicker

net income? your interest of much net accretion to income, And was $XXX income, then within income, of accretion interest merger that million how over jumping your

Jim Fitzgerald

Very little, Laurie.

the post remember small on annualized was in be accretion when more early overall the I impact the the clear. years think of this It's Century conversation I very impact closed number. we And a less million. the an back million annualized Century let The $X of me or marks, $X basis transaction. than

Laurie Hunsicker

reversal Just know checking, [Technical I the was it Difficulty].

I this up basis Can core X basis was because points then with margin PPP us and basis you remarkable. on. hedge put about billion And as you look of you would points quarter be points, appreciate if that PPP, given just especially us, XX margin look thinking really had last guide just at on So certainly your just your in help should [draw], ex super XX think $X understand margin kind just quarter to moving we September? parts to be the helpful but How that about some we piece. the that that you've just so I

Jim Fitzgerald

I'll try.

in million outlined prior year. outlook, a we very outlook this what the the was, we As $XX see increase do nice for from

don't million one but the year, for we were, of in over continued talked is the at also we've margin, our that look challenges, from strategic calls improve there that in expect it part have mentioned. see second to in would and increase think I improvement because it. was you of And do margin. other our half as $XXX million, what we as PPP, to confusing number we you Century a $XXX If of The

income very with So calculations. can you the excited guidance those -- by And that the itself help that. we're interest net on hopefully,

Laurie Hunsicker

it. mean, yes, I can into I back

that's guidance. okay, appreciate great. I So your

to the give on bit Finally, just then things, where you you any a your same on a of balance can stand give you a refresh see how two on terms can give in warning on there, us? starting of lending. refresh what we of And is office us little flash, leverage Can you signals categories? details those sort question us

Jim Fitzgerald

very $XXX office a there's $X are sectors, these of up three portfolio bit little of little is that medical it, office space. bit are that office of office made amount a our billion. That's the -- space of about So medical, third than less you about retail major do million little outstandings, Boston there's is in things combined offices, proper. would and think a what We as are residual

So there's Boston little in very itself.

we office this and We just here particular climate, recently. very have of extensive with all in did an portfolios we our And review do reviews.

I I very We those -- this that it deal with think about is I lot were get say talking We the and worked base. a say we modifications, when would we hard good sponsors. things to after said we review about a that great or would COVID customer clients. very very have

with, as hard said, office people feel our our clients. really the review work very to We done we good the thing relationships. about retain when So sponsors. I business exposure, first very great They're is we've we those

ability as not So customers did it's an their and our lot obviously area said, itself, we it's reviews, sectors. those of office about we watching a -- But under exposure, about very we there. overall when it's very carefully. And just we're those our that's felt as good think three I

we support lending, leverage lending do specific take Speakers] group. some lending obviously to acquisitions good do leverage [Multiple diversification So who to perspective. we business Leveraged leverage additional objectives. just other from have don't on things But a and a don't lending like separate have customers We leverage group. that reasonably

So oriented it's something we're way -- in the give you not any to that question. the to asked that's you difficult do

Laurie Hunsicker

do an And then just there? on office, LTV have updated you

Jim Fitzgerald

we very those. they're be all, documents, -- I do don't. and public appropriate think, The in our LTVs disclose we similar very our would office LTVs to the are

Laurie Hunsicker

to And then last one Bob, just you. question

thinking how appetite a M&A here, you what a view what currently, of can sense well, Can Obviously, us M&A out If to buyer's in how went rate refresh tangible painful the seeing are very you things? terms makes book. marks talk on you're interest very just you very, there, your deal about about little but Century bit you're you?

Bob Rivers

and rate going opportunity certainly, it mean, very careful to we're arise. financial impact the as on marks, any engage sensitive merits opportunities Certainly, they I ready tangible organizationally whether our impact We're undertake be and that very interest any of evaluate book those each interested dilution way. to we're our might in value, to. its come to on we're and

in we're So particularly opportunity lean groups. our in them certainly, into that those for we remain the But now, here, this We've But building organic engaging we'll to come lending as results. they evaluate really conversations. across. have the really engine again, been in encouraged we commercial interested

off. You can see to starting the results of those pay

we're in period we're we have opportunity and on really IPO us one where entirely couple tremendous and the for capability, very is that regard. that to our taking And a a to year Century were the excited advantage both fully after build with of a just prospects a that's cleaner, of. really of organization's if about of you the and will, to busy So years really focus very continuing integration

Operator

DelMonte comes question KBW. from Damon next from Your

Damon DelMonte

and of lot questions a answered. Just great asked

think couple be to or underlying I are similar you So forward? absent comes your just it kind thoughts level, just And nonperforming that the to do at you and as to of some but going this of Credit what level you keep status. trends going year, a to of moved about Shared measure Do But of uncertainty? of related up going National Greater incorporate you're provision you New there. England the kind you start strong, factors one know I the look [chiefly], that know in market feel adopted How remains of obviously you're Boston to here. need able that follow-ups the the to some haven't at market. feeling economic end quarter's to into

Jim Fitzgerald

Just one this January year… technical Xst did CECL thing. of We adopt

Damon DelMonte

mistake… My

Jim Fitzgerald

break two it answer So into I question, your think going to to I'm I'm components. going

CECL I think do second.

I really about. doing six very, likely We Boston well, strong is we of local to think there history, lent our it's But ago. we've months way customer very there's do economy optimistic the than volatile. continue Obviously, our and more was in we more very view position, where a base that so today's can cautiously the and have market, our uncertainty fact bit our to spite lent, little certainly volatility is that get well. of and the think in feel

cautiously fears, aware recession certainly reads into same of else publications and are optimistic that our So weave tried well. read as outlook that to there. everybody we we're that the That's et cetera, we and

the on watching very as in But worried talked reaffirm, in about we're we all we So credit our about carefully I very space. right the I think reasons. We're customers side, credit particular. about very is as And we everybody -- very good it always and feel for good. office good we feel the portfolio feel do fundamental always that in

great customers We staple of leading in market. have our a

I provision think of and the in bit CECL, say. it's a terms hard to little

for outsiders, expected that with CECL banks forecast quarter not third comes slowdown you a an and that an economic not quarter evolves from a internal forecast it's this how and I think but used and the forecast. forecast, know, fourth we -- And most forecast used the As that starts recession. into will

it's a see We role our CECL prudent little we've don't very to which of bit say. couple in like I statistics, very, feel and in here. play think do very as So a underwriting issues those And about major models strong. a we any talked hard are ways

So that's of that don't provision little hard a on of based you the because outside answer I thing it's -- our give bit CECL an but to control. on

that's we forth. put results and this essentially in loan the growth, had quarter, same, we $X some million what you the for provision slightly look losses If the resulted credit actual the went allowance down that and stayed very at

Damon DelMonte

a then, XXXX, is during this are Should secondly, seeking you the of you approval until quarter. that buyback your 'XX? this would exhaust half wait out thoughts on that guys new that I guess, back the active And obviously, very something What for with buyback, or year?

Jim Fitzgerald

what requires respect to deck that in that their are the all X% Damon, regulatory and in it and said process. very authorization. So to there, is to close essentially repeat we we're is say understand in do first need that remarks my we to What just We which I going what we they say, exhausting you said approval.

So we're -- something say. to to we have we like more not anything going else to say don't until

Operator

Thank call There this further to are closing the remarks. over will you. I time. at no turn questions Bob for now Rivers

Bob Rivers

your the a Well, thanks, great joining rest interest, questions, to everyone, your have call, for for of and summer.

Operator

conference today's concludes call. This

disconnect. You may now

Eastern Bankshares (EBC) 29 Jul 222022 Q2 Earnings call transcript