Eastern Bank Announces Plan For Conversion Into Public Company

BOSTON, June 18, 2020 /PRNewswire/ -- Eastern Bank Corporation, the mutual holding company of Eastern Bank, today announced that its Board has unanimously approved a plan to convert to a fully public stock holding company, which will be known as Eastern Bankshares, Inc. As part of the conversion, Eastern intends to give the Eastern Bank Charitable Foundation a 4% equity interest in Eastern Bankshares.

Since its founding in 1818, Eastern has been committed to providing competitive financial products and services and an outstanding customer experience, while making meaningful contributions to the communities it serves. The capital that is raised in the offering will enable Eastern to better serve its customers and communities by making additional loans to businesses and consumers, investing in new technology and delivery systems to enhance existing or the development of new products and services, and supporting the advancement of its employees. The additional capital will also allow Eastern to pursue strategic growth opportunities primarily by acquiring other banking and insurance agency businesses as opportunities arise.

"We are proud of Eastern Bank's history as the oldest and largest mutual bank in the United States and our enduring commitment to our customers, colleagues and communities," said Bob Rivers, Chair and CEO of Eastern Bank.

Mr. Rivers added, "The conversion also provides an opportunity to build upon the incredible commitment of our depositors, employees, corporators and community partners. We want to express our greatest appreciation to them and look forward to making this offering available. I am confident that Eastern's dedication to building lasting relationships with our customers, colleagues and communities will remain as strong as ever after the conversion."

Transformational Donation to the Eastern Bank Charitable Foundation
Since 1999, Eastern has historically donated an average of 10% of its net income every year to charitable giving. As a testament to this commitment, and as part of the conversion, Eastern will make a one-time stock donation to the Eastern Bank Charitable Foundation (EBCF). At the closing of the offering, the Foundation will own 4% of the shares of Eastern Bankshares common stock then outstanding. The donation is expected to increase the size of the Foundation's endowment by approximately 50% to nearly $180 million, based upon the mid-point of the offering valuation range discussed below.

The stock donation will enhance EBCF's partnerships with communities across its footprint through financial support of nonprofit organizations, employee volunteerism, advocacy, and collaboration with other businesses and community partners, and establish an even stronger endowment by which the Foundation will fund these ongoing operations and investments.

Mr. Rivers concluded, "For over 200 years, Eastern has prioritized investing in the communities we serve. The commitment to doing good things to help people prosper remains at the heart of Eastern's purpose today, knowing that we are only as strong as the communities we serve. Through this stock donation to the Eastern Bank Charitable Foundation, we create a significantly larger base by which the Foundation will be able to positively impact the communities we serve. We remain dedicated to supporting our nonprofit partners and convening others to spur innovation and change around social justice."

Eastern's community commitment goes back two hundred years to the Bank's founding. Eastern's charitable giving has exceeded more than $140 million since 1999, and Eastern has been named a top charitable contributor in Massachusetts for over a decade. The EBCF provides important funding to advance issues of local concern, including the advancement of women, early childhood development, immigration and income inequality.

In 2019, the EBCF granted approximately $9.5 million in 1,500 grants towards local efforts addressing employment, education, health care, housing, childcare and other basic human services. In 2020 to date, the EBCF has provided $8 million in total COVID-19 philanthropic financial support to the community.

Details of the Conversion, Approvals & Timing
The public offering of common stock by Eastern Bankshares that is anticipated for later this year will be made in a subscription offering to qualifying Eastern Bank depositors, Eastern tax qualified employee plans, and Eastern employees, directors and corporators. Depositors of Eastern Bank with qualifying deposits on March 29, 2019 will have priority, and depositors with qualifying deposits on March 31, 2020 will have second priority. Shares not purchased in the subscription offering may be offered for sale to the general public in a "community offering," with a preference given to residents of the communities served by Eastern Bank.

As is customary for stock offerings by mutual banking companies, the preliminary prospectus filed today with the Securities and Exchange Commission (SEC) reflects a range for the number of shares that may be sold in the offering. Applicable regulations require the mid-point of that range to be based upon an independent appraisal of the value of Eastern Bankshares, assuming the completion of the offering. The appraisal is potentially subject to change prior to the completion of the offering based upon market conditions. Based upon the valuation range in the preliminary prospectus filed with the SEC today, Eastern assumes in the prospectus that the increase in its capital as a result of the conversion will range from approximately $1.3 billion to $1.7 billion.

The conversion and stock offering will have no impact on the depositors, borrowers or other customers of Eastern Bank.

The transactions contemplated by the Plan of Conversion are subject to approval by the Board of Governors of the Federal Reserve System, the Massachusetts Commissioner of Banks and the corporators of Eastern Bank Corporation. A special meeting of Eastern's corporators is expected to be held during the summer. It is anticipated that the conversion will be completed by the end of 2020.

This press release is not an offer
A registration statement relating to the proposed sale of these securities had been filed with the SEC, but has not yet become effective. These securities may not be sold, nor may offers to buy be accepted, prior to the time the registration statement becomes effective. This release shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. The shares of stock that will be offered by Eastern Bankshares will not be a deposit account, will not be insured by the Federal Deposit Insurance Corporation or any other government agency, and may lose value.

About Eastern Bank
Founded in 1818, Boston-based Eastern Bank has over $11 billion in assets and more than 110 locations serving communities in eastern Massachusetts, southern and coastal New Hampshire, and Rhode Island. Eastern provides banking, investment and insurance products and services for consumers and businesses of all sizes, including through its Eastern Wealth Management division and its Eastern Insurance Group subsidiary. Eastern takes pride in its outspoken advocacy and community support that has exceeded more than $140 million in charitable giving since 1999. An inclusive company, Eastern employs 1,800+ deeply committed professionals who value relationships with their customers, colleagues, and communities.

Forward-Looking Statements
Certain statements in this press release and our prospectus for the offering constitute and will constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements, can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "plan," "seek," "expect" and words of similar meaning. These forward-looking statements include but are not limited to: statements of our goals, intentions and expectations; statements regarding our business plans, prospects, growth and operating strategies; statements regarding the quality of our loan and investment portfolios; and estimates of our risks and future costs and benefits. These forward-looking statements are based on current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: conditions relating to the Covid-19 pandemic, including the severity and duration of the associated economic slowdown either nationally or in our market areas, that are worse than expected; general economic conditions, either nationally or in our market areas, that are worse than expected; changes in the level and direction of loan delinquencies and charge-offs and changes in estimates of the adequacy of the allowance for loan losses; our ability to access cost-effective funding; fluctuations in real estate values and both residential and commercial real estate market conditions; demand for loans and deposits in our market area; our ability to continue to implement our business strategies; competition among depository and other financial institutions; inflation and changes in the interest rate environment that reduce our margins and yields, reduce the fair value of financial instruments or reduce the origination levels in our lending business, or increase the level of defaults, losses and prepayments on loans we have made and make whether held in portfolio or sold in the secondary markets; adverse changes in the securities markets; changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements; our ability to manage market risk, credit risk and operational risk in the current economic conditions; our ability to enter new markets successfully and capitalize on growth opportunities; our ability to successfully integrate any assets, liabilities, customers, systems and management personnel we may acquire into our operations and our ability to realize related revenue synergies and cost savings within expected time frames and any goodwill charges related thereto; changes in consumer spending, borrowing and savings habits; changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board; our ability to retain key employees; our compensation expense associated with equity allocated or awarded to our employees; changes in the financial condition, results of operations or future prospects of issuers of securities that we own; and the risk factors described in our Registration Statement on Form S-1 for the offering as filed with the Securities and Exchange Commission (the "SEC"), which is available at the SEC's website, www.sec.gov. Because of these and other uncertainties, our actual future results may be materially different from the results indicated by our forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release. Eastern disclaims any obligation to publicly update or revise any forward-looking statements to reflect changes in underlying assumptions or factors, new information, future events or other changes, except as required by law.

Media contacts:
Andrea Goodman
Eastern Bank
[email protected] / 781-598-7847

Paul Alexander
Eastern Bank
[email protected] / 781-596-4490

Investor contact:
Jill Belliveau
Eastern Bank
[email protected] / 781-598-7920

SOURCE Eastern Bank

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