Former VP at Eastern Bankshares Inc
- Operating environment for Eastern Bank (NASDAQ: EBC) and other northeast regional banks
- Relative positioning of Eastern Bank vs other regional, community and neobanks
- Potential M&A for Eastern Bank and others
- Digitisation trends and gaps at Eastern Bank
- H1 2023 performance outlook, growth and potential cost-cutting
Could you give an overview of the operating environment for Eastern Bank and other northeast regional banks in the US, extracting key trends or drivers that we should monitor?
Could you elaborate on Eastern Bank’s history, specifically its evolution from a mutual bank to a public bank? What were the drivers behind this transition?
Has there been a considerable or tangible effect in the shift of Eastern Bank’s strategy or its performance behaviour, given the leadership changes as well as the transition to a public bank?
Given that Eastern Bank’s new leadership is now in place, you can imagine that more of the complacent staff have turned over. Where is the bank heading necessarily from an overarching strategy perspective?
Who might be the right suitor if someone were to approach Eastern Bank with a realistic acquisition proposition? What would be the right offer, given your experience at the bank, as well as your understanding of what appeals to it?
Given where Eastern Bank is today in light of the potential acquisition scenarios you outlined, how do you expect the macroeconomic environment or high inflation rate to influence the NIM [net interest margin] performance of the bank and other similar-sized banks? Have NIMs peaked?
A lot of analysts are expecting NIMs to have reached their peak points based on interest rate raises, and now we’re going to see a decent amount of deposit run-offs. What else could be the effect of the environment?
Are there any expected cost-cutting measures for Eastern Bank and others, given the expected pressure on the banking sector?
How well has Eastern Bank managed OPEX? Considering just higher costs, perhaps setting aside layoffs if that’s less likely, are there any other expected cost-reduction strategies as it pertains to rising OPEX?
Was there anything mentioned in Eastern Bank’s Q3 2022 results or any expectations that you think management may have been overly optimistic on as we await Q4 2022 earnings?
Was Eastern Bank’s conservative forecasting nature inherent prior to the leadership change in 2020?
How would you evaluate the relative levels of performance across Eastern Bank’s offerings? Where is the bank stronger vs weaker across its offerings?
You mentioned the performance of Eastern Bank’s insurance arm. Could the performance of one specific offering start to become more characteristic of the bank than others in terms of playing to its strengths?
How would you grade Eastern Bank’s ability to target and acquire customers in the millennial range? What would you describe as the current field demographic base?
What shift in Eastern Bank’s deposit pricing can we expect to see over the next 1-2 years?
Let’s say that Eastern Bank couldn’t get more competitive on deposits. Do you see its LDR [loan-to-deposit ratio] reaching an uncomfortable position?
How would you grade Eastern Bank’s strategy of reallocating run-off of the investment portfolio into residential loans? We’ve seen declines in home purchasing interest rates and mortgage velocity.
You discussed how Eastern Bank and Century Bank’s LDRs were in the 70s and 60s respectively. Do you expect any discomfort in Eastern Bank’s LDR? How might loan growth play out in 2023?
Many analysts suspect that banks of the scale we’re discussing have been and will continue to de-risk from certain sectors or portfolios. Do you imagine Eastern Bank doing the same? Could you outline some of the spaces the bank may look to de-risk from, if any?
Do you expect any significant increases to NCOs [net charge-offs] in 2023? The industry’s NCO ratio is expected to increase, and over 30% of bankers who responded to a very recent survey said that they are expecting lower credit quality.
You mentioned how the competitive landscape in the northeast Boston banking market has been heating up, and how that’s really been defined by some recent moves by PNC and JPMorgan. Could you conceptualise where Eastern Bank stands between these players, perhaps grading their relative competitive positionings?
What competitive threat, if any, does JPMorgan exert on Eastern Bank?
You mentioned how you were involved with Eastern Bank’s acquisition strategy and operations pre-Interview. Could you discuss where that strategy lies today, and whether you expect any smaller acquisitions, if not the merger of equals that we discussed earlier?
You mentioned how upfront Eastern Bank CEO Robert Rivers is, as well as how the management would like to grow its asset range, which it did achieve. What asset range might the bank continue to accomplish, given the USD 50bn barrier, which you alluded to?
You touched on some of the regulatory issues that Eastern Bank may have to deal with if it made another acquisition. How would you grade the bank’s ability to address regulatory issues compared to peers? Does it have a history of any non-compliance that we should be aware of?
Could you provide your 1-5-year outlook for Eastern Bank, walking through some best- and worst-case scenarios for the bank?
Are there any contrarian views that you would like to leave us with regarding Eastern Bank?
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