Eastern Bankshares Plunges 22.1% on Q1 Loss, Dividend Rise

Eastern Bankshares, Inc. reported a significant drop of 22.1% in pre-market trading on April 25, 2025, following the release of its first-quarter 2025 financial results. The company reported a net loss of $217.7 million, primarily due to a non-operating loss related to the sale of $1.3 billion of low-yielding available-for-sale securities. Despite the net loss, Eastern Bankshares demonstrated improvements in several key areas, including an 8% increase in its quarterly dividend and a 33-basis point expansion in its net interest margin to 3.38%.

The company's operating net income stood at $67.5 million, or $0.34 per diluted share, reflecting a solid start to the year. The net interest margin expansion was driven by higher asset yields and lower funding costs, while the operating efficiency ratio improved to 53.7%. Additionally, the loan portfolio increased nearly 3% annualized, primarily due to higher commercial and industrial balances. Eastern Bankshares also repurchased approximately 2.9 million shares for $48.7 million during the quarter, further strengthening its capital position.

Eastern Bankshares' balance sheet remained robust, with a Common Equity Tier 1 (CET1) ratio of 14.15% and an allowance coverage to total loans of 1.25%. Non-performing loans decreased to $91.6 million, or 0.51% of total loans, from $135.8 million, or 0.76%, at the end of 2024. The company's strategic repositioning of its investment portfolio is expected to enhance income generation and provide greater flexibility in portfolio management, with an estimated pre-tax earnings accretion of approximately $35 million for 2025.