The newly public Eastern Bankshares just released its third-quarter earnings results, and they’re one more reason I’m bullish on this $14 billion asset bank. Eastern’s stock is already up more than 40% in a little over a month of trading, and there should be more room to run. Here’s why.
The results
The Boston-based Eastern turned a profit of $28.5 million in the third quarter. That’s down about 20% from the same period of 2019, but still very solid when you consider what the coronavirus pandemic has done to the banking sector and the ultra-low-rate environment that is cutting into banks’ loan margins. And that same low-rate environment has brought down Eastern’s cost of deposits to just 0.12% at the end of the third quarter, which is superb.
The bank’s credit quality is also holding up exceptionally well. Net charge-offs (debt unlikely to be collected) only made up 0.07% of total average outstanding loans on an annualized basis, and is only up four basis points from the third quarter of 2019. Non-performing loans, those that are more than 90 days past due, made up 0.45% of total loans and are down year over year.
