Eastern Bankshares posts $111 million Q3 net income

Eastern Bankshares, Inc. (NASDAQ: EBC) reported third quarter 2026 net income of $111.0 million, or $0.51 per diluted share, up 5.5 percent from the second quarter. The holding company of Eastern Bank also reported operating net income of $111.0 million, an increase linked quarter, driven by higher net interest income and controlled expenses.

Chief Executive Officer Denis Sheahan attributed the results to disciplined execution on organic growth and capital return priorities. He noted that commercial real estate (CRE) and commercial and industrial (C&I) lending drove solid total loan growth, although CRE payoffs continued to act as a headwind. Sheahan stated that commercial loan pipelines remain strong, though closing activity has lagged expectations as clients adopt a cautious stance on investments due to interest rate uncertainty.

Chief Financial Officer David Rosato highlighted record operating income and a return on average tangible common equity of 15.7%. The company generated positive operating leverage, resulting in an operating efficiency ratio of 47.5 percent. Net interest income rose to $257.9 million, an increase of $5.9 million from the second quarter. This growth was driven by balance sheet expansion, partially offset by a 4 basis point decline in the net interest margin on a fully taxable equivalent basis to 3.62 percent due to increased deposit costs.

Balance sheet growth remained steady, with period-end loans increasing 1.1 percent linked quarter. Deposits grew modestly despite seasonal municipal outflows and elevated competition. Asset quality improved as non-performing loans declined $24.6 million to $84.8 million, representing 0.36 percent of total loans. This marks the third consecutive quarterly reduction in non-performing loans following the HarborOne merger.

Wealth Management assets under administration increased to $11.6 billion, including $10.8 billion of assets under management, benefiting from positive net flows and market appreciation. Noninterest income decreased by $8.9 million to $48.7 million, primarily due to weaker equity market performance affecting retirement benefit investments and non-recurring gains from commercial loan sales in the prior quarter.

The company returned $89.1 million in capital to shareholders during the quarter, including $56.7 million in share repurchases and dividends. Rosato stated this capital return is consistent with the company's commitment to rightsize its capital levels. The CET1 capital ratio stood at a preliminary estimate of 13.02 percent as of September 30, 2026.