Eastern Bankshares Reports $217.7 Million Net Loss Amid Securities Losses

Eastern Bankshares, Inc. reported a significant financial downturn in its latest quarterly results, with a net loss of $217.7 million for the three months ending March 31, 2025, compared to a net income of $38.6 million during the same period in 2024. This dramatic shift is primarily attributed to substantial losses on the sale of securities, which amounted to $269.6 million. The company's total assets decreased to $25.0 billion from $25.6 billion at the end of 2024, reflecting a broader trend of declining deposits, which fell by $522.2 million, or 2.4%, to $20.8 billion.

In terms of operational metrics, Eastern Bankshares experienced a 31.1% increase in interest and dividend income, rising to $265.7 million, driven by a 34.4% increase in interest income from loans, which reached $228.5 million. The average balance of the loan portfolio increased by 27.3% to $17.8 billion, largely due to the acquisition of loans from its merger with Cambridge Bancorp. However, the bank's noninterest income turned negative, with a loss of $236.1 million, primarily due to the aforementioned securities losses and a decline in income from investments held in rabbi trusts.

The company’s loan portfolio showed a slight increase, with total gross loans rising to $18.2 billion, a 0.7% increase from the previous quarter. The allowance for loan losses decreased by 2.0% to $224.3 million, representing 1.25% of total loans. Non-performing loans also increased to $91.6 million, or 0.51% of total loans, reflecting a 60.3% rise from the previous year, primarily due to loans acquired from Cambridge that were already on non-accrual status.

Looking ahead, Eastern Bankshares is preparing for a merger with HarborOne Bancorp, which is expected to close in the fourth quarter of 2025. The merger aims to enhance the company's market position and operational capabilities. However, management has acknowledged potential challenges in realizing the anticipated benefits of the merger, particularly regarding integration costs and the retention of key personnel. The company remains focused on managing its interest rate risk and maintaining liquidity, with total liquidity sources amounting to $5.0 billion as of March 31, 2025.