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While “ready” for the next opportunity to acquire another bank, Eastern Bank is focused on organic loan growth and technology investments, CEO and Chairman Bob Rivers said during the bank’s fourth quarter earnings call.
Eastern Bank had fourth quarter net income of $35.1 million, or $0.20 per diluted share, compared to net income of $37.1 million, or $0.22 per diluted share, in the third quarter of 2021. Eastern’s net income for 2021, the bank’s first full year as a stock bank after its initial public offering in October 2021, was $154.6 million.
The fourth quarter included Eastern’s Nov. 12 acquisition of Century Bank, with Eastern acquiring assets of approximately $7 billion from Century. The deal added $3 billion in total loan balances and $6 billion in total deposits. Eastern gained 56,000 new customers and 250 employees.
Eastern on Dec. 31 had $23.5 billion in assets, deposit balances of $19.6 billion and total loans of $12.3 billion.
Total deposits in the fourth quarter included declines of $121.5 million due to attrition involving higher rate categories after the Century acquisition, Eastern said in its fourth quarter earnings statement. A seasonal decline in municipal deposit balances also contributed to the decline.
Century had the largest government banking department in the state, and Eastern expects some future runoff in municipal deposits as Century’s business is integrated into Eastern’s. Jim Fitzgerald, the bank’s chief financial officer and chief administration officer, does not expect a material effect on the bank from any municipal runoffs.
Eastern will see deposits decline again when it sells Century’s cannabis business to Needham Bank. That deal includes $500 million in deposits, and Eastern expects the transaction to close in the second quarter.
Eastern had originally expected merger expenses of approximately $64 million but the bank in 2021 recorded expenses totaling $35 million. While expenses were lower than forecast, Fitzgerald said some of the expected expenses were paid by Century Bank before the merger closed.
The bank continues to expect to see 45 percent cost savings in 2022, earlier than previously forecast. When the deal was announced in April, the bank expected to fully realize the savings in 2023.
In response to an analyst’s question, Rivers said Eastern has not changed its position on future acquisitions and is ready for potential opportunities. While focusing on bank acquisitions, Rivers said Eastern would also look at opportunities with insurance agencies or a small wealth management business, though acquisitions are not the banks current focus.
“Our primary focus is really finishing up Century, continuing to drive organic growth, particularly in our commercial and small businesses, as well as an investment in technology, which continues,” Rivers said. “We have the capital. We have the interest and again stand ready when an opportunity should arise.”
Technology investments in 2021 included a partnership with financial technology company Blend, which provides an online home equity loan application. Rivers said the platform has increased the online completion rates for home equity loans.
