EBC

Eastern Bankshares is a 200-year-old eastern-Massachusetts thrift in the middle of a transformation: the HarborOne merger closed November 1, 2025, adding $5.5B in assets and $4.3B in deposits, lifting total assets to $30.6B (+19.7% YoY). The headline numbers look terrible — diluted EPS collapsed 34.8% to $0.43 and net income fell 26.2% to $88.2M — but management explicitly attributes the decline to 'losses on sales of securities during the year ended December 31, 2025 which exceeded losses on sales of securities for the year ended December 31, 2024,' a balance-sheet repositioning rather than core erosion. The MD&A's operating (non-GAAP) net income tells the opposite story: $318.0M vs. $196.6M (+61.8%), with operating basic EPS up 44.2% to $1.57.

Valuation is a tale of two multiples. On GAAP EPS, the stock screens expensively at 49.8x P/E; on the operating EPS figure cited by management ($1.57), the multiple compresses to ~13.6x — a more typical regional-bank valuation. Equity grew 20.2% to $4.34B (largely from the HarborOne share issuance of 26.9M shares), and the balance sheet supports $432M of operating cash flow (+52.3%) plus $213M returned to shareholders via buybacks ($107M, +285%) and dividends ($106M, +28.1%). However, ROE is only 2.0% on GAAP earnings, and liabilities/equity at 6.05x is normal for a bank but leaves the equity exposed to the AOCI swing management flags: 'fair value of our investments... has declined due to increases in interest rates beginning in March 2022 and could decline further' — directly eroding tangible book value per share.