About Eastern Bankshares

Eastern Bankshares, Inc. operates as the bank holding company for Eastern Bank that provides a variety of banking and trust and investment services. As of December 31, 2022, the company had two reportable business segments: Banking and Insurance Agency, which the company conducted under the name Eastern Insurance Group LLC (‘Eastern Insurance Group’). In the third quarter of 2023, the company announced the sale of substantially all of the assets and transfer of substantially all of the liabilities of the company’s insurance agency business. The company completed the sale on October 31, 2023. Accordingly, as of December 31, 2023, the company had one reportable segment: the company’s Banking business. The company is subject to comprehensive regulation and examination by the Massachusetts Commissioner of Banks, the Federal Deposit Insurance Corporation (‘FDIC’), the Federal Reserve Board and the Consumer Financial Protection Bureau. The company’s diversified products and services include lending, deposit, and wealth management. Deposits obtained through the branch banking network have traditionally been the principal source of funds for use in lending and for other general business purposes. The company offers a range of demand deposit accounts, interest checking accounts, money market accounts, savings accounts and time certificates of deposit accounts. The company’s lending focuses on the following loan categories: commercial and industrial, including the company’s Asset Based Lending Portfolio, commercial real estate, commercial construction, small business banking, residential real estate and home equity loans. Through Eastern Bank’s wealth management offering, the company provides a wide range of trust services. In addition, the company offers automated lock box collection services, cash management services and account reconciliation services to the company’s corporate and institutional customers, as well as cash management services to the company’s municipal clients. The only entity controlled directly by Eastern Bankshares, Inc. is Eastern Bank, which is a wholly owned subsidiary. Eastern Bank controls five active subsidiaries as follows: Broadway Securities Corporation, a wholly owned subsidiary engaged in buying, selling, dealing in and holding securities and in holding industrial revenue bonds (‘IRBs’); Real/Property Services, Inc., a wholly owned subsidiary that provides real estate services to Eastern Bank; Millennium Corporation, a wholly owned subsidiary engaged in holding IRBs; Shared Value Investments LLC, a wholly owned subsidiary that invests in low income housing and other tax credit investments; and Eastern Insurance Group, a wholly owned subsidiary that previously acted as an agent in offering insurance solutions for clients with personal, commercial or employee benefits-related insurance needs. Substantially all of the assets and certain liabilities of Eastern Insurance Group were sold in the fourth quarter of 2023, and Eastern Insurance Group no longer conducts operations. Market Area The company’s primary market consists of the greater Boston area, specifically eastern and central Massachusetts, southern New Hampshire, including the seacoast region, and northern Rhode Island. Business Strategy The company’s core strategies are to develop new customer relationships and deepen existing relationships; pursue opportunistic acquisitions; and leverage technology to enhance customer experience. Lending Activities The company uses funds obtained from deposits, including brokered certificates of deposit, as well as funds obtained from the Federal Home Loan Bank (‘FHLB’) of Boston (‘FHLBB’) advances, primarily to originate loans and to invest in securities. The company’s loan portfolio was well diversified with approximately 9,600 commercial relationships at December 31, 2023. The company’s lending area mainly consists of the greater Boston area, specifically eastern and central Massachusetts, southern New Hampshire, including the seacoast region, and northern Rhode Island. In connection with the company’s acquisition of Century, the company acquired loans, which are outside of the company’s traditional lending area. Beginning in the third quarter of 2022 and ending in the first quarter of 2023, the company purchased mortgage loans, specifically one- to four-family residential real estate loans, a portion of which were outside of the company’s traditional lending area. The company’s lending focuses on the following categories of loans: Commercial and Industrial Loans. The company offers a broad range of products, including lines of credit and term loans. The company primarily targets companies and institutions with annual revenues of $10 million to $500 million and strive to serve as the lead bank for customers with multi-product, long-term, profitable relationships with an emphasis on building long-term relationships. In addition, the company participates in the syndicated loan market, club lending transactions and the Shared National Credit Program (‘SNC Program’), which is consisted of loans and commitments to extend credit aggregating more than $100 million or more at origination and shared by three or more unaffiliated supervised institutions. Loans in this category consist of lines of credit and term loans extended to businesses and corporate enterprises for the purpose of financing working capital, facilitating equipment purchases and facilitating acquisitions. For commercial and industrial loans, the company’s primary focus is middle-market companies located in the markets the company serves. The company’s commercial and industrial portfolio also includes its Asset Based Lending Portfolio (‘ABL Portfolio’) and IRBs, which are municipal bonds issued to finance major capital projects. The majority of the company’s IRB portfolio is in educational and other non-profit sectors. Commercial Real Estate Loans. Loans in this category include mortgage loans and lines of credit on commercial real estate, both investment and owner occupied. Property types financed include office, industrial, multi-family, affordable housing, retail, hotel and other type properties. The company focuses its commercial real estate lending on properties within the company’s primary market area but will originate commercial real estate loans on properties located outside this area based on an established relationship with a strong borrower. The company intends to continue to grow its commercial real estate loan portfolio while maintaining prudent underwriting standards. In addition to originating these loans, the company participates in commercial real estate loans with other financial institutions. Such participations are underwritten in accordance with the company’s policies before the company will participate in such loans. The company originates a variety of fixed- and adjustable-rate commercial real estate loans with terms and amortization periods generally up to 30 years, which may include balloon loans. Commercial Construction Loans. Loans in this category include construction project financing and are consisted of commercial real estate, business banking and residential loans for the purpose of constructing and developing real estate. Substantially all of the company’s commercial construction portfolio is in commercial real estate. The majority of the loans in this category are secured by properties located in the company’s primary lending area. Most of the company’s construction loans are interest-only loans that provide for the payment of interest during the construction phase, which is usually up to 36 months, although the terms of some construction loans are extended, generally for periods of six to 12 months. Small Business Loans. This category, which the company refers to as ‘business banking,’ is consisted of loans to small businesses with exposures of under $1.0 million and small investment real estate projects with exposures of under $3.0 million. These loans are separate and distinct from the company’s commercial and industrial and commercial real estate portfolios described above due to the size of the loans. A portion of the company’s small business loans are guaranteed by the U.S. Small Business Administration (‘SBA’), through the SBA 7(a) loan program. The SBA 7(a) loan program supports, through a United States Government guarantee, some portion of the traditional commercial loan underwriting that might not be fully covered absent the guarantee. Eastern Bank is a preferred lender under the SBA’s Preferred Lender Program, which allows expedited underwriting and approval of SBA 7(a) loans. One- to Four-Family Residential Real Estate Loans. The company’s one- to four-family residential real estate loan portfolio consists of mortgage loans that enable borrowers to purchase or refinance existing homes, most of which serve as the primary residence of the owner. Through a team of approximately 14 licensed mortgage loan officers, the company originates residential loans either for sale to investors or to retain in the company’s loan portfolio. The company generally does not continue to service residential loans that the company sells in the secondary market. Home Equity Loans and Lines of Credit. Loans in this category consist of home equity lines of credit and home equity loans. The company offers home equity lines of credit with cumulative loan-to-value ratios generally up to 80%, when taking into account both the balance of the home equity line of credit and first mortgage loan. Other Consumer Loans. Loans in this category consist of unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans and other personal loans. Investment Activities The company’s securities portfolio primarily consists of government-sponsored residential mortgage-backed securities (which includes collateralized mortgage obligations), government-sponsored commercial mortgage-backed securities (which includes collateralized mortgage obligations), the U.S. Agency bonds, the U.S. Treasury securities, and state and municipal bonds and obligations. Sources of Funds The company offers a range of demand deposits, interest checking, money market accounts, savings accounts and time certificates of deposit. The company also participates in the IntraFi Network, which allows the company to provide access to FDIC deposit insurance protection on deposits for consumers, businesses and public entities that exceed same-bank FDIC insurance thresholds. The company can elect to sell or repurchase this funding as reciprocal deposits from other IntraFi Network banks depending on the company’s funding needs. In addition, the company may purchase brokered certificates of deposit as an additional source of funds. Eastern Wealth Management Through Eastern Bank’s wealth management division, the company offers a range of trust services, including managing customer investments, serving as custodian for customer assets, and providing other fiduciary services, including serving as trustee and personal representative of estates. The company’s clients include individuals, trusts, businesses, employer-sponsored retirement plans and charitable organizations. Services offered include financial planning and portfolio management. Regulation Eastern Bank is a Massachusetts-chartered non-member bank. Eastern Bank’s deposits are insured up to applicable limits by the FDIC. Eastern Bank is subject to extensive regulation by the Massachusetts Commissioner of Banks, as its chartering authority, and by the FDIC, as its primary federal regulator. Eastern Bank is required to file reports with, and is periodically examined by, the Massachusetts Commissioner of Banks and the FDIC concerning its activities and financial condition and must obtain regulatory approvals prior to entering into certain transactions, including but not limited to, mergers with or acquisitions of other financial institutions. Eastern Bank is a member of the FHLBB. As a bank holding company, the company is required to comply with the rules and regulations of the Federal Reserve Board. It is required to file certain reports with the Federal Reserve Board and is subject to examination by and subject to the enforcement authority of the Federal Reserve Board. The company is also subject to examination by the Massachusetts Commissioner of Banks. In addition, the company is subject to the rules and regulations of the U.S. Securities and Exchange Commission (the ‘SEC’) under the federal securities laws. Eastern Bank, as a Massachusetts-chartered bank, is regulated and supervised by the Massachusetts Commissioner of Banks. Eastern Bank is a member of the Deposit Insurance Fund, which is administered by the FDIC. Under the Community Reinvestment Act, or CRA, as implemented by FDIC regulations, Eastern Bank as a non-member bank has a continuing and affirmative obligation, consistent with its safe and sound operation, to help meet the credit needs of its entire community, including low- and moderate-income (‘LMI’) neighborhoods. The company’s compensation practices are subject to oversight by the Federal Reserve Board and the FDIC. With total assets in excess of $10 billion, Eastern Bank is classified as a large bank and therefore is subject to direct supervision and examination by the Consumer Financial Protection Bureau (the ‘CFPB’) for compliance with federal consumer financial law under Title X of the Dodd-Frank Act. Eastern Bank is subject to the USA PATRIOT Act, which gave federal agencies additional powers to address terrorist threats through enhanced domestic security measures, expanded surveillance powers, increased information sharing, and broadened anti-money laundering requirements. The deposit operations of Eastern Bank also are subject to, among others, the: Right to Financial Privacy Act, which imposes a duty to maintain confidentiality of consumer financial records and prescribes procedures for complying with administrative subpoenas of financial records; Check Clearing for the 21st Century Act (also known as ‘Check 21’), which gives ‘substitute checks,’ such as digital check images and copies made from that image, the same legal standing as the original paper check; Electronic Funds Transfer Act and Regulation E promulgated thereunder, which govern automatic deposits to and withdrawals from deposit accounts and customers’ rights and liabilities arising from the use of automated teller machines and other electronic banking services; and General Laws of Massachusetts, Chapter 167D, which governs deposit powers. Eastern Bank is a member of the Federal Home Loan Bank System. The company is subject to examination, regulation, and periodic reporting under the Bank Holding Company Act of 1956, as amended, as administered by the Federal Reserve Board. The class of common stock of the company is registered with the Securities and Exchange Commission under the Exchange Act, and therefore the company and its shareholders are subject to the information, proxy solicitation, insider trading restrictions and other requirements under the Exchange Act. The Sarbanes-Oxley Act of 2002 is intended to improve corporate responsibility, to provide for enhanced penalties for accounting and auditing improprieties at publicly traded companies, and to protect investors by improving the accuracy and reliability of corporate disclosures pursuant to federal securities laws. The company has policies, procedures and systems designed to comply with these regulations, and the company reviews and documents such policies, procedures and systems to ensure continued compliance with these regulations. History Eastern Bankshares, Inc., a Massachusetts corporation, was founded in 1818. The company was incorporated in 2020.