What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2022-02-25 compared with 2021-03-29 · 290 added, 211 removed, 588 unchanged (46% of the section changed)

2 unchanged sentences

We are the sole shareholder of Eastern Bank, which we sometimes refer to as the “Bank,” a Massachusetts-chartered bank founded in 1818.

Through the Bank and its wholly owned subsidiary, Eastern Insurance Group LLC, we provide a variety of banking, trust and investment, and insurance services.

We have two business segments:

Through the Bank and its wholly owned subsidiary, Eastern Insurance Group LLC (“Eastern Insurance Group”), we provide a variety of banking, trust and investment, and insurance services.

We have two reportable business segments:

banking and insurance agency.

As of December 31, 2021, we had total consolidated assets of $23.5 billion, total gross loans of $12.3 billion, total deposits of $19.6 billion and total shareholders’ equity of $3.4 billion.

We are subject to comprehensive regulation and examination by the Massachusetts Commissioner of Banks, the Federal Deposit Insurance Corporation (“FDIC”), the Federal Reserve Board and the Consumer Financial Protection Bureau.

Our diversified products and services include lending, deposit, wealth management and insurance products.

4 unchanged sentences

Through Eastern Bank’s wealth management offering, we provide a wide range of trust services.

Eastern Insurance Group LLC, acts as an agent in offering insurance solutions for clients with personal, commercial or employee benefits-related insurance needs.

Eastern Insurance Group acts as an agent in offering insurance solutions for clients with personal, commercial or employee benefits-related insurance needs.

In addition, we offer automated lock box collection services, cash management services and account reconciliation services to our corporate and institutional customers, as well as cash management services to our municipal clients.

The only entity controlled directly by Eastern Bankshares, Inc.

is Eastern Bank, which is a wholly owned subsidiary.

Eastern Bank controls four active subsidiaries in addition to Eastern Insurance Group LLC, as follows:

Broadway Securities Corporation, a wholly owned subsidiary engaged in buying, selling, dealing in and holding securities;

Eastern Bank controls five active subsidiaries in addition to Eastern Insurance Group LLC, as follows:

Broadway Securities Corporation, a wholly owned subsidiary engaged in buying, selling, dealing in and holding securities and in holding industrial revenue bonds (“IRBs”), the majority of which were acquired in connection with our acquisition of Century Bancorp, Inc.

Refer to “Recent Acquisitions” within this section for additional discussion regarding our acquisition of Century;

Market Street Securities Corporation, a wholly owned subsidiary engaged in buying, selling, dealing in and holding securities;

Real/Property Services, Inc., a wholly owned subsidiary that provides real estate services to Eastern Bank;

Millennium Corporation, a wholly owned subsidiary engaged in holding IRBs, the majority of which were acquired through our acquisition of Century, and securities.

Millennium Corporation was formerly a subsidiary of Century Bank & Trust, which was acquired by us on November 12, 2021.

Refer to “Recent Acquisitions” within this section for additional discussion regarding our acquisition of Century;

Shared Value Investments LLC, a wholly owned subsidiary that invests in low income housing and other tax credit investments.

11 unchanged sentences

The estimated median age of the population in the Boston–Worcester–Providence CSA is 40, compared to 38.5 for the United States as a whole.

For the eleven counties in eastern Massachusetts and southern New Hampshire in which our branches are located and from which we gather most of our deposits, the average unemployment rate as of November 2020 was 5.4%, as compared to 6.4% for the United States as a whole.

For the statistical area consisting of Boston and Cambridge, Massachusetts, and Nashua, New Hampshire—which is a subset of the Boston–Worcester–Providence CSA—the unemployment rate as of December 2020 was 5.9%, according to the U.S.

For the eleven counties in eastern Massachusetts

and southern New Hampshire in which our branches are located and from which we gather most of our deposits, the average unemployment rate as of October 2021 was 4.0%, as compared to 4.3% for the United States as a whole.

Bureau of Labor Statistics.

As disclosed elsewhere in this Annual Report on Form 10-K, the COVID-19 pandemic has significantly increased the unemployment rate in our market.

As disclosed elsewhere in this Annual Report on Form 10-K, the COVID-19 pandemic significantly increased the unemployment rate in our market.The COVID-19 pandemic initially contributed to a significant increase in the unemployment rate in our market area, however, as of December 31, 2021 the unemployment rate has subsequently decreased as more workers have returned to work.

Please refer to the section of this Annual Report on Form 10-K titled “Item 1A.

8 unchanged sentences

Our most direct competition for deposits has historically come from banking institutions operating in our primary market area.

Based on data from the Federal Deposit Insurance Corporation ("FDIC") as of June 30, 2020 (the latest date for which information is available), we had a weighted average market share of 2.5% for the seven separate banking markets tracked by the Federal Reserve Board in which we have at least one branch.

In the Boston market, which accounted for 91.6% of our deposits as of June 30, 2020, our market share was 2.5%, representing the sixth largest deposit share in that market.

Based on data from the FDIC as of June 30, 2021 (the latest date for which information is available), we had a weighted average market share of 5.8% for the seven separate banking markets tracked by the Federal Reserve Board in which we have at least one branch.

In the Boston market, which accounted for 94.8% of our deposits as of June 30, 2021, our market share was 3.7%, representing the fifth largest deposit share in that market.

We also face competition for deposits from other financial services companies such as securities brokerage firms, credit unions, insurance companies and money market funds.

8 unchanged sentences

Increased competition for deposits and the origination of loans could limit our growth in the future.

Recent Acquisitions

Bank Acquisitions

During the past two decades, we have been able to expand our banking business through a combination of internal or “organic” growth complemented by opportunistic strategic transactions.

Since 1997, we have completed eight mergers or acquisitions, including our most recent acquisition of Century.

On November 12, 2021, we acquired Century, which operated 29 banking offices in 21 cities and towns in Massachusetts and southern New Hampshire, as of September 30, 2021, for $641.9 million in cash.

Century had total assets of approximately $6.8 billion at the time of our acquisition, at fair value and excluding goodwill and intangible assets.

Eastern Insurance Group Acquisitions

In 2002, we acquired Allied American Insurance Agency, Inc.

from the Arbella Insurance Group, which became Eastern Insurance Group.

From 2004 through 2018, we expanded Eastern Insurance Group by acquiring 31 independent insurance agencies, the purchase prices for which ranged from less than $1.0 million to $17.1 million with an average purchase price of $3.9 million.

In 2021, we acquired two independent insurance agencies, the purchase prices for which were $3.9 million and $0.5 million, respectively.

Business Strategy

1 unchanged sentence

In recent years, we have focused significant effort on and invested heavily in our infrastructure to create sophisticated and competitive products and services, a strong, experienced work force, and awareness of our banking brand.

We also plan to grow by acquisition.

As a result, we believe we are well positioned to capitalize on the opportunities available in our market by focusing on the following core strategies.

3 unchanged sentences

Our relationship-based approach has enabled us to achieve disciplined organic growth over time, and we expect this trend to continue.

We believe our support of our small business and non-profit customers in obtaining funding in April and May 2020 under the Paycheck Protection Program, also known as “PPP,” demonstrates both our commitment and capacity to meet our customers’ needs, even in the most challenging circumstance.

We believe our support of our small business and non-profit customers in obtaining funding in 2020 and 2021 under the Paycheck Protection Program, also known as “PPP,” demonstrated both our commitment and capacity to meet our customers’ needs, even in the most challenging circumstance.

The PPP was created by the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) and was first launched in April 2020.

Small Business Administration, or “SBA,” approved all applications for PPP funding across the nation on a “first come, first served” basis.

We believe that our experience as the largest SBA lender in New England for 13 consecutive years has made us effective in helping a large number of our customers avail themselves of the very attractive PPP loans.

We disbursed $1.2 billion of loans to approximately 8,900 borrowers under the PPP of the CARES Act during the year ended December 31, 2020.

The vast majority

of our PPP borrowers are existing commercial and small business borrowers, non-profit customers, retail banking customers and clients of Eastern Wealth Management and Eastern Insurance Group LLC.

On December 27, 2020, the Consolidated Appropriations Act, 2021 (the “Relief Act”) became law, authorizing an additional $284 billion of PPP loans and extending the PPP through March 31, 2021.

The American Rescue Plan Act of 2021, which was passed by the U.S.

Senate on March 6, 2021 and is anticipated to be signed into law, allocates an additional $7.25 billion for PPP loans.

We have been and expect to continue to originate PPP loans in 2021.

On December 27, 2020, the Consolidated Appropriations Act, 2021 (the “Relief Act”) became law, and authorized an additional $284 billion of PPP loans and extended the PPP through March 31, 2021.

The American Rescue Plan Act of 2021, which was signed into a law on March 11, 2021, allocated an additional $7.25 billion for PPP loans.

The PPP ended on May 31, 2021.

We disbursed a total of $1.7 billion of loans to approximately 15,500 borrowers under the PPP of the CARES Act during the years ended December 31, 2021 and 2020.

The vast majority of our PPP borrowers are existing commercial and small business borrowers, non-profit customers, retail banking customers and clients of Eastern Wealth Management and Eastern Insurance Group.

Please refer to the subsection of this Annual Report on Form 10-K titled “Business—Lending Activities—Small Business Loans” for a summary description of PPP lending as relevant to Eastern Bank.

Pursue opportunistic acquisitions.

We intend to prudently pursue opportunities to acquire banks in our existing and contiguous markets that create attractive financial returns.

Our focus will primarily be on franchises that enhance our funding profile, product capabilities or geographic density, while maintaining an acceptable risk profile.

We have pursued and intend to continue to prudently pursue opportunities to acquire banks in our existing and contiguous markets that we believe will create attractive financial returns.

Our focus is primarily on franchises that enhance our funding profile, product capabilities or geographic density, while maintaining an acceptable risk profile.

We believe the vital need to make increasingly significant technological investments has greatly amplified the importance of scale in banking.

In addition, we believe that the COVID-19 pandemic recession will increase the rate of consolidation in the banking industry.

We believe that as a result of our recently-completed initial public offering ("IPO") we are well-positioned as a consolidator in the banking market because of our financial strength, reputation and culture.

In addition, we believe that the COVID-19 pandemic recession has increased and will continue to increase the rate of consolidation in the banking industry.

We believe that as a result of our initial public offering (“IPO”), which was completed in October 2020, we are well-positioned as a consolidator in the banking market because of our financial strength, reputation and culture as evidenced by our recent acquisition of Century in November 2021.

In addition, we intend to continue to pursue opportunistic acquisitions of additional insurance agencies in existing and contiguous markets.

1 unchanged sentence

We have made significant investments in our technology to ensure we can deliver high-quality, innovative products and services to our customers.

For example, we have recently upgraded our Mobile Banking platform for both consumer and commercial customers.

In addition, we have continued investing in our new commercial lending origination system and platform, and we intend to progressively improve our consumer lending origination platform as well.

4 unchanged sentences

We will look to opportunistically hire talented bankers and employees with a continued emphasis on recruiting highly motivated, diverse managers and employees who can establish and maintain long-term customer relationships that are key to our business, brand and culture.

Manage risk to navigate a range of economic environments, including the current COVID-19 pandemic recession.

Manage risk to navigate a range of economic environments.

We believe that our conservative credit culture, strong capital and liquidity position, and our deep client relationships are key to our long-term financial success.

1 unchanged sentence

We supplement our conservative risk culture with a rigorous and continuous enterprise risk management program.

The current COVID-19 pandemic is resulting in material uncertainty in the near- and medium-term future.

In addition, a sustained period of low interest rates has and will continue to put pressure on our net interest margin.

The current COVID-19 pandemic has resulted in and is continuing to result in material uncertainty in the near- and medium-term future.

In addition, a sustained period of low interest rates that continued into 2021 put pressure on our net interest margin.

We believe we are enduring this period of stress from a position of strength, which allows us to maintain a strong balance sheet while still supporting our customers and communities in need.

3 unchanged sentences

We believe the portfolio is well diversified with approximately 1,100 commercial relationships at December 31, 2021.

During the year ended December 31, 2021, in connection with our acquisition of Century, we acquired loans which are outside of our traditional lending area.

Such loans will run-off over time as we are not actively pursuing lending activities in such areas.

The amount of loans acquired from Century which are outside of our traditional lending area was $490.6 million as of year ended December 31, 2021.

Our lending focuses on the following categories of loans:

2 unchanged sentences

We primarily target companies and institutions with annual revenues of $10 million to $500 million and strive to serve as the lead bank for customers with multi-product, long-term, profitable relationships with an emphasis on building long-term relationships.

In addition, we participate in the syndicated loan market and the Shared National Credit Program (“SNC Program”).

In addition, we participate in the syndicated loan market, club lending transactions and the Shared National Credit Program (“SNC Program”).

Loans in this category consist of revolving and term loans extended to businesses and corporate enterprises for the purpose of financing working capital, facilitating equipment purchases and facilitating acquisitions.

1 unchanged sentence

The primary risk associated with commercial and industrial loans is the ability of borrowers to achieve business results consistent with those projected at origination.

Loans are extended on both a secured and unsecured basis, according to

the credit profile of the customer, at both fixed interest rates and variable interest rates at varying spreads over LIBOR and Prime rate.

For commercial and industrial loans, our primary focus is middle-market companies located in the markets we serve.

Loans are extended on both a secured and unsecured basis, according to the credit profile of the customer, at both fixed interest rates and variable interest rates at varying spreads over LIBOR and Prime rate.

The average tenor of our commercial and industrial portfolio varies according to market conditions but at December 31, 2021 it was 5.2 years.

3 unchanged sentences

Approximately 70.0% of our commercial and industrial loan exposure at December 31, 2021 was to customers headquartered within our primary lending market, which consists of eastern and central Massachusetts, southern New Hampshire, including the seacoast region, and northern Rhode Island, although we participate in the syndicated loan market and the SNC Program.

Our regulators and Eastern Bank consider a SNC to be any loan or loan commitment for which the commitment amount is equal to or greater than $100 million, aggregate.;

Our regulators and Eastern Bank consider a SNC to be any loan or loan commitment for which the commitment amount is equal to or greater than $100 million, in aggregate;

and which is shared by three or more federally supervised unaffiliated institutions under a formal lending agreement;

or a portion of which is sold to two or more federally supervised unaffiliated institutions, with the purchasing institutions assuming their pro rata share of the credit risk.

As of December 31, 2020, our SNC Program portfolio totaled $425.1 million, or 21.3%, of our commercial and industrial portfolio, and 46.4% of our SNC Program portfolio were loans to borrowers headquartered in our primary lending market.

As of December 31, 2021, our commercial and industrial SNC Program portfolio totaled $480.9 million, or 16.2%, of our commercial and industrial portfolio, and 40.3% of our commercial and industrial SNC Program portfolio were loans to borrowers headquartered in our primary lending market.

Our commercial and industrial portfolio also includes our Asset Based Lending Portfolio (“ABL Portfolio”).

As of December 31, 2021, our ABL Portfolio totaled $224.8 million, or 7.6%, of our commercial and industrial portfolio.

Our commercial and industrial portfolio also includes a portion of our PPP loans.

As of December 31, 2021, the amount of PPP loans included in our commercial and industrial portfolio was $112.8 million.

Our commercial and industrial portfolio also includes IRBs which are municipal bonds issued to finance major capital projects.

As of December 31, 2021, our commercial and industrial IRB portfolio totaled $1.0 billion, or 33.8% of our commercial and industrial portfolio.

The majority of our IRB portfolio is in educational and other non-profit sectors.

Commercial Real Estate Loans.

1 unchanged sentence

Property types financed include office, industrial, multi-family, affordable housing, retail, hotel and other type properties.

See "Item 1A.

Risk Factors" in this Annual Report on Form 10-K for additional information regarding material reduction in demand for office and medical office space.

As of December 31, 2021, we had total commercial real estate loans of $4.5 billion, representing 36.9% of our total loans.

2 unchanged sentences

The primary repayment sources include operating income generated by the real estate, permanent debt refinancing and/or the sale of the real estate.

Our commercial real estate loan portfolio also includes IRB loans of $629.6 million, or 13.9% of our commercial real estate portfolio, as of December 31, 2021.

Included in this amount was $376.7 million of IRB loans as of December 31, 2021 which were acquired in connection with our acquisition of Century.

The average outstanding loan balance in our commercial real estate portfolio was approximately $3.0 million as of December 31, 2021, although we originate commercial real estate loans with balances significantly larger than this average.

14 unchanged sentences

As of December 31, 2021, we had total commercial construction loans of $222.3 million, representing 1.8% of our total loans.

The majority of the loans in this category, measured by the outstanding loan balance as of December 31, 2020,

are secured by properties located in our primary lending area.

The majority of the loans in this category, measured by the outstanding loan balance as of December 31, 2021, are secured by properties located in our primary lending area.

At December 31, 2021, our ten largest construction loans had an average commitment of $22.5 million, ranging from $19.0 million to $30.0 million.

6 unchanged sentences

Land development loans within the construction portfolio totaled $33.2 million as of December 31, 2021.

IRB loans within the construction portfolio totaled $68.7 million as of December 31, 2021.

Small Business Loans.

This category, which we refer to as “business banking,” is comprised of loans to small businesses with exposures of under $1.0 million and small investment real estate projects with exposures of under $3.0 million.

These loans are separate and distinct from our commercial and industrial and commercial real estate portfolios described above due to the size of the loans.

As of December 31, 2021, we had total business banking loans of $1.3 billion, representing 10.9% of our total loans.

In this category, commercial and industrial loans and commercial real estate loans totaled $675.1 million, as of December 31, 2020.

In this category, commercial and industrial loans and commercial real estate loans totaled $440.6 million and $894.1 million, respectively, as of December 31, 2021.

Business banking originations include traditionally underwritten loans as well as partially automated scored loans.

2 unchanged sentences

The SBA 7(a) loan program supports, through a United States Government guarantee, some portion of the traditional commercial loan underwriting that might not be fully covered absent the guarantee.

Eastern Bank is a preferred lender under the SBA’s PLP Program, which allows expedited underwriting and approval of SBA 7(a) Loans.

Eastern Bank is a preferred lender under the SBA’s Preferred Lender Program, which allows expedited underwriting and approval of SBA 7(a) Loans.

For 2009-2021, Eastern Bank was distinguished as the highest producer of SBA 7(a) loans, in terms of loan volume, in New England.

As of December 31, 2020, our SBA portfolio held 10,801 loans with $1.1 billion outstanding.

On December 27, 2020, the Relief Act became law and provided an additional $284 billion for PPP, as well as extending PPP through March 31, 2021.

The changes to PPP as a result of the Relief Act include:

(1) an opportunity for a second PPP forgivable loan for certain qualifying small businesses and nonprofits;

(2) allowing qualified borrowers to apply for a PPP loan up to 2.5 times (or 3.5 times for small businesses in the restaurant and hospitality industries) the borrower’s average monthly payroll costs in the one-year period prior to the date on which the loan is made or calendar year 2019, limited to a maximum loan amount of $2.0 million;

(3) the addition of personal protective equipment expenses, costs associated with outdoor dining, uninsured costs related to property damaged and vandalism or looting due to 2020 public disturbances, supplier costs and a broader category of operational expenses as eligible and forgivable expenses;

(4) simplifying the loan forgiveness process for loans of $150,000 or less;

and (5) eliminating the requirement that Economic Injury Disaster Loan (“EIDL”) Advances will reduce the borrower’s PPP loan forgiveness amount.

Additionally, expenses paid with the proceeds of PPP loans that are forgiven (or are reasonably expected to be forgiven) are now tax-deductible, reversing previous guidance from the U.S.

Treasury and the Internal Revenue Service, which did not allow deductions on expenses paid for with PPP loan proceeds which were forgiven (or reasonably expected to be forgiven).

As of December 31, 2021, our SBA portfolio held approximately 5,200 loans with $0.4 billion outstanding.

Our PPP loans are included in our commercial and industrial loans portfolio, as previously indicated, and in our business banking portfolio.

As of December 31, 2021, the amount of PPP loans included in our business banking portfolio was $218.6 million.

One- to Four-Family Residential Real Estate Loans.

8 unchanged sentences

Through a team of approximately 28 licensed mortgage loan officers, we originate residential loans either for sale to investors or to retain in our loan portfolio.

Decisions about whether to sell or retain residential loans are made based on

the interest rate characteristics, pricing for loans in the secondary mortgage market, competitive factors and our capital needs, although we generally retain non-conforming jumbo residential loans in our portfolio.

Decisions about whether to sell or retain residential loans are made based on the interest rate characteristics, pricing for loans in the secondary mortgage market, competitive factors and our capital needs, although we generally retain non-conforming jumbo residential loans in our portfolio.

Since 2016, we have outsourced to an independent party the processing, underwriting (using our criteria) and closing of residential loans originated by our mortgage loan officers.

During the year ended December 31, 2020, residential real estate mortgage originations were $892.8 million of which $451.6 million were sold on the secondary markets.

During the year ended December 31, 2021, residential real estate mortgage originations were $1.1 billion of which $233.7 million were sold on the secondary markets.

We generally do not continue to service residential loans that we sell in the secondary market.

5 unchanged sentences

For home equity loans and lines of credit originated in 2021, the average Fair Isaac Corporation (“FICO”) score was 767.

As of December 31, 2020, we had total consumer home equity loans of $868.3 million, representing 8.9% of our total loans.

As of December 31, 2021, we had total consumer home equity loans of $1.1 billion, representing 9.0% of our total loans.

Home equity lines of credit are granted for ten years with monthly interest-only repayment requirements.

3 unchanged sentences

Other Consumer Loans.

Loans in this category consist of unsecured personal lines of credit, overdraft protection, automobile loans, and other personal loans.

Loans in this category consist of unsecured personal lines of credit, overdraft protection, automobile loans, home improvement loans, airplane loans and other personal loans.

Loans in this category include loans originated through our indirect automobile lending program, which we began to exit in 2018 to improve our liquidity position and to reduce lower yielding loans.

2 unchanged sentences

income sources and reliability, credit histories, term of repayment and collateral value, as applicable.

Included in this category of other consumer loans are $126.7 million of automobile loans at December 31, 2020.

Included in this category of other consumer loans are home improvement and automobile loans of $104.4 million and $53.3 million, respectively, at December 31, 2021.

Loan Sales and Purchases

We generally originate commercial loans for our portfolio, although we sell participation interests in commercial and industrial loans and commercial real estate loans to local financial institutions, primarily on the portion of loans exceeding our borrowing limits.

We generally do not purchase whole loans, but we will purchase loan participations from other financial institutions.

During the year ended December 31, 2020, we purchased $191.2 million of loan participations, based on origination year-end balances.

As of December 31, 2020, we held loan participation interests, including SNCs, totaling $1.0 billion in loans originated by other lenders, consisting of $598.9 million of commercial and industrial loan participations, $306.2 million of commercial real estate loan participations, and $119.6 million of commercial construction loan participations.

We generally do not purchase whole loans, but we do purchase loan participations from other financial institutions.

During the year ended December 31, 2021, we purchased $346.3 million of loan participations.

As of December 31, 2021, we held loan participation interests, including SNCs, totaling $1.1 billion in loans originated by other lenders, consisting of $732.4 million of commercial and industrial loan participations, $362.9 million of commercial real estate loan participations, $37.1 million of commercial construction loan participations, and less than $0.1 million of business banking loan participations.

Loan Approval Procedures and Authority

9 unchanged sentences

At December 31, 2021, our regulatory limit on loans-to-one borrower was $681.3 million.

As of December 31, 2020, our internal limits on loans-to-one borrower (and related entities) were:

In November 2021, we acquired Century, the loan portfolio of which included loans of a larger size than we have historically made, as well as loans to borrowers in industries in which we have historically not participated in a meaningful way.

In connection with the acquisition, Eastern Bank’s Board of Directors approved adjustments to our internal limits on loans-to-one borrower (and related entities), as well as higher sub-limits for loans made in the higher education and healthcare industry sectors.

As of December 31, 2021, our internal limits on loans-to-one borrower (and related entities), all of which are subject to industry-specific sub-limits, were:

• $35.0 million for commercial real estate loans;

1 unchanged sentence

• $50.0 million for commercial and industrial relationships, including loans to non-profit entities;

• $75.0 million for loans to education and healthcare entities with a risk rating between 1 and 4;

• $50.0 million for loans to education and healthcare entities with a risk rating of 5 and above.

Prior to the Century acquisition, our internal limits on loans-to-one borrower (and related entities) had been $25.0 million for commercial real estate loans;

$75.0 million for commercial real estate relationships;

and $40.0 million for commercial and industrial relationships, including loans to non-profit entities.

Aggregate exposure limits can be increased up to 10% on an exception basis with the approval of the Credit Committee, including the approval of the Chief Credit Officer and the Chief Commercial Banking Officer.

Although our regulatory lending limit increased upon completion of the offering, we do not expect our internal lending limits will increase materially in the foreseeable future.

In connection with the acquisition of Century, as a condition of receiving regulatory approval, we provided $65.6 million of credit to the Massachusetts Housing Partnership (“MHP”).

The commitment exceeded our internal lending limits indicated above, but not our regulatory limit on loans-to-one-borrower also indicated above.

Our Board of Directors approved the exception to our internal lending limits for the MHP credit facility.

Investment Activities

Our securities portfolio consists primarily of government-sponsored residential mortgage-backed securities, government-sponsored commercial mortgage-backed securities, U.S.

Our securities portfolio consists primarily of government-sponsored residential mortgage-backed securities (which includes collateralized mortgage obligations), government-sponsored commercial mortgage-backed securities (which includes collateralized mortgage obligations), U.S.

Agency bonds, U.S.

Treasury securities, and state and municipal bonds and obligations.

Treasury securities, state and municipal bonds and obligations, Small Business Administration pooled securities, and other debt securities.

We view our securities portfolio as a source of income and liquidity.

11 unchanged sentences

We believe we have been able to attract and maintain satisfactory levels of deposits based on the level of service we provide to our customers, the convenience of our banking locations, our electronic banking options, and our interest rates, all of which are generally competitive with those of competing financial institutions.

We also participate in the IntraFi Network (formerly known as “Promontory”), allowing us to provide access to multi-million dollar FDIC deposit insurance protection on deposits for consumers, businesses and public entities.

We also participate in the IntraFi Network (formerly known as “Promontory”), which allows us to provide access to multi-million dollar FDIC deposit insurance protection on deposits for consumers, businesses and public entities.

We can elect to sell or repurchase this funding as reciprocal deposits from other IntraFi Network banks depending on funding needs.

As of December 31, 2021, we had repurchased no reciprocal deposits from other IntraFi Network banks and had $520.5 million of additional capacity.

During the second quarter of 2018, the Economic Growth, Regulatory Relief, and Consumer Protection Act was promulgated and determined that reciprocal deposits, such as those acquired through the IntraFi Network, were no longer to be treated as brokered deposits.

Accordingly, these amounts are not reported as brokered amounts.

At December 31, 2021, total borrowings were $34.3 million.

2 unchanged sentences

Maintaining available borrowing capacity with the FHLB provides us with a contingent source of liquidity.

Eastern Bank is a member of the FHLB of Boston ("FHLBB").

Eastern Bank is a member of the FHLB of Boston.

The primary reason for our FHLBB membership is to gain access to a reliable source of wholesale funding, particularly term funding, as a tool to manage liquidity and interest rate risk.

As a member of the FHLBB, we are required to purchase shares in the FHLB.

Accordingly, we had invested $8.8 million in shares of the FHLBB and had $14.6 million outstanding in FHLBB borrowings with original maturities ranging from less than three months to 20 years at December 31, 2020.

As a member of the FHLBB, we are required to purchase shares in the FHLBB.

Accordingly, we had invested $10.9 million in shares of the FHLBB and had $14.0 million outstanding in FHLBB borrowings with original maturities ranging from 4 years to 20 years at December 31, 2021.

In addition, we had $1.8 billion of borrowing capacity remaining with the FHLBB at December 31, 2021.

5 unchanged sentences

At December 31, 2021, Eastern Bank held $3.4 billion of assets in a fiduciary, custodial or agency capacity for customers.

These assets are not assets of Eastern Bank and therefore are not included in the consolidated balance sheets included in this Annual

Report on Form 10-K.

These assets are not assets of Eastern Bank and therefore are not included in the consolidated balance sheets included in this Annual Report on Form 10-K.

Eastern Wealth Management had 46 full-time equivalent employees as of December 31, 2021 and revenue of $24.6 million or approximately 12.7% of noninterest income during the year ended December 31, 2021.

As discussed in “Recent Acquisitions” within this section, we acquired Century on November 12, 2021, the operations of which included a wealth management division.

In 2020, Century’s last full fiscal year prior to our acquisition, brokerage commissions from its wealth management division amounted to $0.3 million.

Century’s wealth management business included securities supported by LPL Financial, a third-party securities brokerage business.

In connection with acquiring Century, we elected not to continue with a third-party securities brokerage relationship.

Eastern Insurance Group LLC

Eastern Insurance Group LLC, a wholly owned subsidiary of Eastern Bank, acts as an independent agent in offering personal, business and employee benefits insurance products to individual and commercial clients.

Eastern Insurance Group, a wholly owned subsidiary of Eastern Bank, acts as an independent agent in offering personal, business and employee benefits insurance products to individual and commercial clients.

Personal insurance products include life, accident and health, automobile, and property and liability insurance including fire, condominium, home and tenants, among others.

Commercial insurance products include group life and health, commercial property and liability, surety, and workers compensation insurance, among others.

Eastern Insurance Group LLC also offers a wide range of employee benefits products and services, including professional advice related to health care cost management, employee engagement and retirement and executive services.

As an agency business, Eastern Insurance Group LLC does not assume any underwriting or insurance risk.

The commissions we earn on the sale of these insurance products and services is the most significant portion of our noninterest income, representing $94.5 million or 53.0% of our noninterest income during the year ended December 31, 2020.

Eastern Insurance Group LLC represents many leading insurance companies.

Eastern Insurance Group LLC operates through 25 non-branch offices in eastern Massachusetts, one office in Keene, New Hampshire, and one office in Providence, Rhode Island.

As measured by revenue, Eastern Insurance Group LLC is the third largest insurance agency in Massachusetts, the thirtieth largest property and casualty insurance agency in the United States, and the third largest insurance agency in the United States owned by a banking company.

Eastern Insurance Group LLC had 407 full-time equivalent employees as of December 31, 2020 and revenue of $96.7 million or approximately 16.3% of our total revenues.

Eastern Insurance Group LLC routinely acquires smaller insurance agencies in existing and adjacent markets.

During the five-year period ended December 31, 2020, Eastern Insurance Group LLC acquired 11 insurance agencies for an average purchase price of $3.2 million.

Eastern Insurance Group also offers a wide range of employee benefits products and services, including professional advice related to health care cost management, employee engagement and executive services.

As an agency business, Eastern Insurance Group does not assume any underwriting or insurance risk.

The commissions we earn on the sale of these insurance products and services, which totaled $94.7 million or 49.0% of our total noninterest income during the year ended December 31, 2021, is the most significant portion of our noninterest income.

Eastern Insurance Group represents many leading insurance companies.

Eastern Insurance Group operates through 23 non-branch offices in eastern Massachusetts, one office in Keene, New Hampshire, and one office in Providence, Rhode Island.

As measured by revenue, Eastern Insurance Group is the second largest insurance agency in Massachusetts, the thirty-fourth largest property and casualty insurance agency in the United States.

Eastern Insurance Group had 406 full-time equivalent employees as of December 31, 2021 and revenue of $97.2 million or approximately 15.5% of our total revenues.

Eastern Insurance Group routinely acquires smaller insurance agencies in existing and adjacent markets.

During the five-year period ended December 31, 2021, Eastern Insurance Group acquired two insurance agencies for an average purchase price of $2.2 million.

On average the agencies acquired during that period had annual revenue of $0.9 million at the date of purchase.

We are subject to the extensive regulatory framework applicable to bank holding companies and their subsidiaries.

See “Recent Acquisitions” within this section for additional information.

We are subject to the extensive regulatory framework applicable to bank holding companies, bank subsidiaries and their affiliates.

This framework is intended primarily for the protection of depositors, the FDIC’s Deposit Insurance Fund and the banking system as a whole, and generally is not intended for the protection of shareholders or other investors.

Described below are the material elements of selected laws and regulations applicable to us and its subsidiaries.

Described below are the material elements of selected laws and regulations applicable to us, the Bank, our subsidiaries and our affiliates.

These descriptions are not intended to be complete and are qualified in their entirety by reference to the full text of the statutes and regulations described.

14 unchanged sentences

is subject to the rules and regulations of the Securities and Exchange Commission under the federal securities laws.

Any change in applicable laws or regulations, whether by the United States Congress, the Massachusetts state legislature, the Massachusetts Commissioner of Banks, the FDIC, or the Federal Reserve Board, could have a material adverse impact on the operations and financial performance of Eastern Bankshares, Inc.

Any change in applicable laws or regulations, whether by the United States Congress, the Massachusetts legislature, the Massachusetts Commissioner of Banks, the FDIC, or the Federal Reserve Board, could have a material adverse impact on the operations and financial performance of Eastern Bankshares, Inc.

and Eastern Bank.

In addition, Eastern Bankshares, Inc.

and Eastern Bank will be affected by the monetary and fiscal policies of various agencies of the United States Government, including the Federal Reserve Board.

In view of changing conditions in the national economy and in the financial markets, it is impossible for management to accurately predict future changes in monetary policy or the effect of such changes on the business or financial condition of Eastern Bankshares, Inc.

and Eastern Bank will be affected by the monetary and fiscal policies of the United States Government, including the Federal Reserve Board.

In view of changing conditions in the national economy and in the financial markets, it is

impossible for management to accurately predict future changes in monetary policy or the effect such changes may have on the business or financial condition of Eastern Bankshares, Inc.

and Eastern Bank.

4 unchanged sentences

The Massachusetts Commissioner of Banks is required to regularly examine each state-chartered bank.

The approval of the Massachusetts Commissioner of Banks is required to establish or close branches, to merge with another bank, to issue shares and to undertake many other activities.

The approval of the Massachusetts Commissioner of Banks is required to establish or close branches, to merge with another bank, to issue shares and to undertake certain other activities.

Any Massachusetts bank that does not operate in accordance with the regulations, policies and directives of the Massachusetts Commissioner of Banks may be sanctioned.

The Massachusetts Commissioner of Banks may suspend or remove directors or officers of a Massachusetts-chartered bank who have violated the law, conducted a bank’s business in a manner that is unsafe, unsound or contrary to the depositors’ interests, or been negligent in the performance of their duties.

In addition, the Massachusetts Commissioner of Banks has the authority to appoint a receiver or conservator if it is determined that we are conducting our business in an unsafe or unauthorized manner, and under certain other circumstances.

In addition, the Massachusetts Commissioner of Banks has the authority to appoint the FDIC as a receiver or conservator if the Massachusetts Commissioner of Banks or the FDIC determine that we are conducting our business in an unsafe or unauthorized manner, and under certain other circumstances.

The powers that Massachusetts-chartered banks can exercise under these laws include, but are not limited to, the following:

6 unchanged sentences

Massachusetts-chartered banks may be licensed directly or indirectly through an affiliate or a subsidiary corporation established for this purpose.

Eastern Bank has received approval for insurance sales activities, and offers a variety of personal and business insurance products and services through its wholly-owned subsidiary, Eastern Insurance Group LLC, a licensed insurance agency.

Eastern Insurance Group LLC has also obtained all licenses required by various state insurance regulatory authorities in other states that license, regulate and supervise insurance producers, brokers and agents.

Eastern Insurance Group has also obtained all licenses required by various state insurance regulatory authorities in other states that license, regulate and supervise insurance producers, brokers and agents.

Investment Activities.

1 unchanged sentence

Massachusetts-chartered banks may additionally invest an amount equal to 1.0% of their deposits in shares of Massachusetts corporations or companies with substantial employment in Massachusetts which have pledged to the Massachusetts Commissioner of Banks that such monies will be used for further development within Massachusetts.

At the present time, Eastern Bank has the authority under state law to invest in equity securities.

At the present time, Eastern Bank has the grandfathered authority under state law to invest in equity securities.

However, such investment authority is constrained by federal law.

4 unchanged sentences

The approval of the Massachusetts Commissioner of Banks is required if the total of all dividends declared in any calendar year exceeds the total of its net profits for that year combined with its retained net profits of the preceding two years, less any required transfer to surplus or a fund for the retirement of any preferred shares.

Net profits for this purpose means the

remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets after deducting current operating expenses, actual losses, accrued dividends on preferred shares, if any, and all federal and state taxes.

Eastern Bankshares, Inc.

may not declare or pay a cash dividend on, or repurchase any of, its capital shares if the effect thereof would cause its net worth to be reduced below (i) the amount required for the liquidation account established by Eastern Bankshares, Inc.

Net profits for this purpose means the remainder of all earnings from current operations plus actual recoveries on loans and investments and other assets after deducting current operating expenses, actual losses, accrued dividends on preferred shares, if any, and all federal and state taxes.

Liquidation Account Effect on Dividends.

As a result of the conversion of Eastern Bank Corporation, the predecessor holding company of Eastern Bank, from a mutual into a stock holding company in connection with our IPO (the “Conversion”), Eastern Bankshares, Inc.

may not declare or pay a cash dividend on, or repurchase any of, its capital shares if

the effect thereof would cause its net worth to be reduced below (i) the amount required for the liquidation account established by Eastern Bankshares, Inc.

in connection with the IPO (“Liquidation Account”) or (ii) the regulatory capital requirements of Eastern Bankshares, Inc.

2 unchanged sentences

and Eastern Bank, or (b) Eastern Bank.

Under the plan of conversion of Eastern Bank Corporation, the predecessor holding company of Eastern Bank, from a mutual into a stock holding company in connection with our IPO, eligible account holders received an interest in a liquidation account maintained by Eastern Bankshares, Inc.

Under the plan of conversion of Eastern Bank Corporation in connection with the Conversion, eligible account holders received an interest in a liquidation account maintained by Eastern Bankshares, Inc.

in an amount equal to (i) Eastern Bank Corporation’s ownership interest in Eastern Bank’s total shareholders’ equity as of the date of the latest statement of financial condition included in our IPO prospectus, plus (ii) the value of the net assets of Eastern Bank Corporation as of the date of the latest statement of financial condition of Eastern Bank Corporation prior to the consummation of the conversion (excluding its ownership of Eastern Bank).

3 unchanged sentences

and Eastern Bank hold the Liquidation Account for the benefit of eligible account holders who have continued to maintain deposits in Eastern Bank following completion of the conversion.

Share Repurchases.

Eastern Bankshares, Inc.

may not repurchase any of its capital stock if the effect thereof would cause its net worth to be reduced below (i) the amount required for the Liquidation Account or (ii) the regulatory capital requirements of Eastern Bankshares, Inc.

(to the extent applicable).

In addition, under Massachusetts regulations, Eastern Bankshares, Inc.

may not repurchase shares of its common stock during the first three years following the completion of the IPO, except to fund tax-qualified or non-tax-qualified employee stock benefit plans, or except in amounts not greater than 5% of our outstanding shares of common stock where compelling and valid business reasons are established to the satisfaction of the Massachusetts Commissioner of Banks.

On November 12, 2021, the receipt of a notice of non-objection from the Federal Reserve Board to our first proposed share repurchase program.

Our authorization to repurchase shares under this program was disclosed.

Our authorization to repurchase shares under this program, which was approved by the Company’s Board of Directors, is limited to 9,337,900 shares, which represents 5% of our outstanding shares of common stock, over a 12-month period.

The program is further limited to $225 million through November 30, 2022 and may be modified or terminated by the Company’s Board of Directors at any time.

Protection of Personal Information.

Massachusetts has adopted regulatory requirements intended to protect personal information.

The requirements are similar to existing federal laws such as the Gramm-Leach-Bliley Act, discussed below under “—Federal Bank Regulation—Privacy Regulations.” They require organizations to establish written information security programs to prevent identity theft and other fraud.

Massachusetts has adopted statutory and regulatory requirements intended to protect personal information.

The requirements are similar to federal laws such as the Gramm-Leach-Bliley Act, discussed below under “—Federal Bank Regulation—Privacy Regulations.” They require organizations to establish written information security programs to prevent identity theft and other fraud.

The Massachusetts regulation also contains technology system security requirements, especially for the encryption of personal information sent over wireless or public networks or stored on portable devices.

5 unchanged sentences

Massachusetts banking law grants broad lending authority.

However, with certain limited exceptions, total obligations of one borrower to a bank may not exceed 20.0% of the total of the bank’s capital, which is defined under Massachusetts law as the sum of the bank’s capital shares, surplus account and undivided profits.

However, with certain limited exceptions, total obligations of one borrower and related interests to a bank may not exceed 20.0% of the total of the bank’s capital, which is defined under Massachusetts law as the sum of the bank’s capital shares, surplus account and undivided profits.

Loans to a Bank’s Insiders.

20 unchanged sentences

Also included in Tier 2 capital is the allowance for loan and lease losses limited to a maximum of 1.25% or risk-weighted assets.

As permitted by applicable regulations, we have opted out of the requirement to include Accumulated Other Comprehensive Income ("AOCI") in our regulatory capital determinations.

As permitted by applicable capital regulations, we have opted out of the requirement to include Accumulated Other Comprehensive Income (“AOCI”) in our regulatory capital determinations.

Calculation of all types of regulatory capital is subject to deductions and adjustments specified in the regulations.

12 unchanged sentences

The agencies have also established standards for safeguarding customer information.

If the appropriate federal banking agency determines that an institution fails to meet any standard prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard.

If the appropriate federal banking agency determines that an institution fails to meet any standard

prescribed by the guidelines, the agency may require the institution to submit to the agency an acceptable plan to achieve compliance with the standard.

Investment Activities.

2 unchanged sentences

The maximum permissible investment is 100% of Tier 1 Capital, as specified by the FDIC’s regulations, or the maximum amount permitted by Massachusetts law, whichever is less.

In addition, the FDIC is authorized to permit such a state bank to engage in state-authorized activities or investments not permissible for national banks (other than non-subsidiary equity investments) if it meets all applicable capital requirements and the FDIC determines that such activities or investments do not pose a significant risk to the Deposit

Insurance Fund.

In addition, the FDIC is authorized to permit such a state bank to engage as principal in state-authorized activities or investments not permissible for national banks (other than non-subsidiary equity investments) if it meets all applicable capital requirements and the FDIC determines that such activities or investments do not pose a significant risk to the Deposit Insurance Fund.

The FDIC has adopted procedures for institutions seeking approval to engage in such activities or investments.

28 unchanged sentences

The term “covered transaction” includes the making of loans to, purchase of assets from, and issuance of a guarantee to an affiliate, and other similar transactions.

Section 23B transactions also include the provision of services and the sale of assets by a bank

to an affiliate.

Section 23B transactions also include the provision of services and the sale of assets by a bank to an affiliate.

In addition, loans or other extensions of credit by the financial institution to the affiliate are required to be collateralized in accordance with the requirements set forth in Section 23A of the Federal Reserve Act.

5 unchanged sentences

The FDIC has extensive enforcement authority over insured state-chartered banks, including Eastern Bank.

The enforcement authority includes, among other things, the ability to assess civil money penalties, issue cease and desist orders and remove directors and officers.

The enforcement authority includes, among other things, the ability to assess civil money penalties, issue cease and desist orders, remove directors and officers and prohibit institution affiliated parties from banking.

In general, these enforcement actions may be initiated in response to violations of laws and regulations, breaches of fiduciary duty and unsafe or unsound practices.

6 unchanged sentences

Eastern Bank is a member of the Deposit Insurance Fund, which is administered by the FDIC.

Deposit accounts in Eastern Bank are insured up to a maximum of $250,000 for each separately insured depositor.

The Deposit Insurance Fund provides deposit insurance of $250,000 per depositor, per insured bank, for each of the eight ownership categories defined by the FDIC, provided that the requirements for each ownership category are met.

The FDIC assesses deposit insurance premiums on each insured institution quarterly based on risk characteristics of the institution.

2 unchanged sentences

Depending on the results of Eastern Bank’s performance under that scorecard, the total base assessment rate is between 1.5 and 40 basis points.

The FDIC may also impose a special assessment in an emergency situation.

The FDIC Board of Directors may also impose special assessments under stressed circumstances.

Pursuant to the Dodd-Frank Act, the FDIC has established 2.0% as the designated reserve ratio (“DRR”), which is the ratio of the Deposit Insurance Fund to insured deposits of the total industry.

4 unchanged sentences

The reserve ratio reached 1.36% on September 30, 2018 and, as a result, the surcharge on banks with assets of $10 billion or more ceased with the first assessment invoice in 2019.

In addition, once the DRR reaches 1.38%, the FDIC will apply the assessment credits to banks that had assets below $10 billion at any time during the credit calculation period, which includes Eastern Bank.

In addition, once the DRR reaches 1.38%, the FDIC

will apply the assessment credits to banks that had assets below $10 billion at any time during the credit calculation period, which includes Eastern Bank.

As of December 31, 2021, the Deposit Insurance Fund’s reserve ratio was 1.27%.

14 unchanged sentences

The CRA requires the FDIC to provide a written evaluation of an institution’s CRA performance utilizing a four-tiered descriptive rating system.

Eastern Bank’s latest FDIC CRA rating was “Outstanding.”

Eastern Bank’s most recently published FDIC CRA performance rating was “Outstanding.”

Massachusetts has its own statutory counterpart to the CRA which is also applicable to Eastern Bank.

1 unchanged sentence

Massachusetts law requires the Massachusetts Commissioner of Banks to consider, but not be limited to, a bank’s record of performance under Massachusetts law in considering any application by the bank to establish a branch or other deposit-taking facility, to relocate an office or to merge or consolidate with or acquire the assets and assume the liabilities of any other banking institution.

Eastern Bank’s most recent rating under Massachusetts law was “Outstanding.”

On January 9, 2020, the FDIC and the Office of the Comptroller of the Currency published a Notice of Proposed Rulemaking that would substantially amend their respective CRA regulations.

The Federal Reserve did not join in the Community Reinvestment Act Notice of Proposed Rulemaking.

On May 20, 2020, the Office of the Comptroller of the Currency adopted a final regulation.

The FDIC did not join the Office of the Comptroller of the Currency, and it is unclear whether a final rule will be promulgated.

Eastern Bank’s most recent 2018 CRA performance rating under Massachusetts law was “Outstanding.”

On December 14, 2021, The Office of the Comptroller of the Currency issued a final rule to rescind its June 2020 Community Reinvestment Act (CRA) rule and replace it with a rule based on the rules adopted jointly by the Federal banking agencies in 1995, as amended.

The OCC’s action facilitates the planned future issuance of updated interagency CRA rules with the Federal Reserve Board and FDIC to modernize the CRA regulatory framework and promote consistency for all insured depository institutions.

It is unclear whether or when a final rule will be promulgated.

It is also unclear whether the Massachusetts Commissioner of Banks will adopt corresponding changes to its CRA regulations, which apply to all Massachusetts-chartered banks, including Eastern Bank.

8 unchanged sentences

The guidance also provides that enforcement actions may be taken against a banking organization if its incentive compensation arrangements or related risk management, control or governance processes pose a risk to the organization’s safety and financial weakness.

The federal banking and other responsible federal agencies, including the SEC, have yet to adopt regulations implementing the executive compensation provisions of the Dodd Frank Act.

Consumer Protection and Fair Lending Regulations.

8 unchanged sentences

Further, certain provisions of Title III impose affirmative obligations on a broad range of financial institutions, including banks, thrifts, brokers, dealers, credit unions, money transfer agents, and parties registered under the Commodity Exchange Act.

Eastern Bank has been impacted by provisions of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, containing certain temporary regulatory forbearance measures applicable during the COVID-19 pandemic state of emergency.

These CARES Act provisions address the establishment of emergency liquidity facilities to support lending to small and midsize businesses under Section 13(3) of the Federal Reserve Act;

a potential temporary increase of FDIC deposit insurance limits on noninterest bearing deposit accounts above current levels;

temporary relief from troubled debt restructurings and optional temporary relief from current expected credit losses.

Federal and state banking agencies also have issued guidance to regulated financial institutions during the COVID-19 pandemic state of emergency.

These pronouncements address, among other things, onsite examination frequency;

loan modifications;

deferral of real estate appraisals and evaluations;

responsible small dollar lending;

mortgage servicing;

regulatory reporting;

and other supervisory matters.

Eastern Bank has been impacted by provisions of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, containing, among other provisions, certain temporary regulatory forbearance measures applicable during the COVID-19 pandemic state of emergency and temporary relief from troubled debt restructurings.

Consolidated Appropriations Act.

Eastern Bank has been impacted by provisions of the Consolidated Appropriations Act, which was enacted on December 27, 2020.

These provisions extend certain provisions related to the COVID-19 pandemic in the United States (which were due to expire) and provides additional emergency relief to individuals and businesses.

Included within the provisions of the Consolidated Appropriations Act was the extension of Section 4013 of the CARES Act to January 1, 2022, which provided relief from a requirement to evaluate loans that had received COVID-19 modifications to determine if the loans required troubled debt restructuring (“TDR”) treatment provided certain criteria were met.

Accordingly, we applied the TDR relief granted pursuant to such section to any qualifying loan modifications executed during the allowable time period.

Other Regulations

12 unchanged sentences

Federal Reserve System

The Federal Reserve Board regulations require depository institutions to maintain interest-earning reserves against their transaction accounts (primarily, negotiable order of withdrawal ("NOW") accounts and regular checking accounts).

The Federal Reserve Board regulations generally require that reserves be maintained against aggregate transaction accounts as follows:

for that portion of transaction accounts aggregating $127.5 million or less (which may be adjusted by the Federal Reserve Board) the reserve requirement is 3.0% and the amounts greater than $127.5 million require a 10.0% reserve (which may be adjusted annually by the Federal Reserve Board between 8.0% and 14.0%).

The first $16.9 million of otherwise reservable balances (which may be adjusted by the Federal Reserve Board) are exempted from the reserve requirements.

The Federal Reserve Board regulations ordinarily require depository institutions to maintain interest-earning reserves against their transaction accounts (primarily, negotiable order of withdrawal (“NOW”) accounts and regular checking accounts).

The Federal Reserve Board regulations generally require that reserves be maintained against net transaction accounts as follows:

as of January 1, 2022, for that portion of transaction accounts aggregating $640.6 million or less (which may be adjusted by the Federal Reserve Board) the reserve requirement is 3.0% and the amounts greater than $640.6 million require a 10.0% reserve (which may be adjusted annually by the Federal Reserve Board between 8.0% and 14.0%).

As of January 1, 2022, the first $32.4 million of otherwise reservable balances (which may be adjusted by the Federal Reserve Board) are exempted from the reserve requirements.

However, in response to the COVID-19 pandemic, the Federal Reserve Board temporarily eliminated reserve requirements and therefore there was no minimum reserve requirement as of December 31, 2021.

The current annual interest rate on both the required and excess reserves is 0.10%.

The current annual interest rate on both reserves is 0.15%.

Federal Home Loan Bank System

1 unchanged sentence

The FHLB provides a central credit facility primarily for member institutions.

Members of the FHLB are required to acquire and hold shares of capital shares in the FHLB.

Members of the FHLB are required to acquire and hold shares of capital shares in the FHLB bank of which they are a member.

Eastern Bank acquired capital shares in the FHLBB and was in compliance with this requirement at December 31, 2021.

3 unchanged sentences

At its discretion, the FHLBB may declare dividends on the shares.

The FHLBs are required to provide funds for certain purposes including the resolution of insolvent thrifts in the late 1980s and to contributing funds for affordable housing programs.

The FHLBs are required to contribute a percentage of their net earnings towards funds for affordable housing programs.

These requirements could reduce the amount of dividends that the FHLBs pay to their members and result in the FHLBs imposing a higher rate of interest on advances to their members.

In 2020, the FHLBB paid dividends equal to an annual yield of 4.64%.

During the year ended December 31, 2021, the FHLBB paid quarterly dividends equal to yields of 1.6%, 1.5%, 1.5% and 2.1% in the first, second, third and fourth quarter, respectively.

There can be no assurance that such dividends will continue in the future.

23 unchanged sentences

is subject to the Federal Reserve Board’s capital adequacy guidelines for bank holding companies (on a consolidated basis) which have historically been similar to, though less stringent than, those of the FDIC for Eastern Bank.

The Dodd-Frank Act, however, required the Federal Reserve Board to promulgate consolidated capital requirements for depository institution holding companies that are no less stringent, both quantitatively and in terms of components of capital, than those applicable to the depository institutions themselves.

components of capital, than those applicable to the depository institutions themselves.

Consolidated regulatory capital requirements identical to those applicable to the subsidiary banks apply to bank holding companies.

4 unchanged sentences

In general, the Federal Reserve Board’s policies provide that dividends should be paid only out of current earnings and only if the prospective rate of earnings retention by the bank holding company appears consistent with the organization’s capital needs, asset quality and overall financial condition.

The Federal Reserve Board’s policies also require that a bank holding company serve as a source of financial strength to its subsidiary banks by standing ready to use available resources to provide adequate capital funds to those banks during periods of financial stress or adversity and by maintaining the financial flexibility and capital-raising capacity to obtain additional resources for assisting its subsidiary banks where

The Dodd-Frank Act codified the source of strength doctrine.

1 unchanged sentence

In addition, the Federal Reserve Board has issued guidance that requires consultation with the agency prior to a bank holding company’s payment of dividends or repurchase of shares under certain circumstances.

These regulatory policies could affect the ability of the Eastern Bankshares, Inc.

These regulatory policies could affect the ability of Eastern Bankshares, Inc.

to pay dividends, repurchase its shares or otherwise engage in capital distributions.

Under the Federal Deposit Insurance Act, depository institutions are liable to the FDIC for losses suffered or anticipated by the FDIC in connection with the default of a commonly controlled depository institution or any assistance provided by the FDIC to such an institution in danger of default.

The status of Eastern Bankshares, Inc.

as a registered bank holding company under the Bank Holding Company Act will not exempt it from certain federal and state laws and regulations applicable to corporations generally, including, without limitation, certain provisions of the federal securities laws.

Eastern Bankshares, Inc.

does not control two depository institutions that would subject it to the cross-guarantee provisions of the Federal Deposit Insurance Act.

The status of Eastern Bankshares, Inc.

Massachusetts Holding Company Regulation.

20 unchanged sentences

meets the current public information requirements of Rule 144, each affiliate of Eastern Bankshares, Inc.

that complies with the other conditions of Rule 144, including those that require the affiliate’s sale to be aggregated with those of other persons, would be able to sell in the public market, without registration, a number of shares not to exceed, in any three-month period, the greater of 1% of the outstanding shares of Eastern Bankshares, Inc., or the average weekly volume of trading in the shares during the preceding four calendar weeks.

Inc., or the average weekly volume of trading in the shares during the preceding four calendar weeks.

In the future, Eastern Bankshares, Inc.

may permit affiliates to have their shares registered for sale under the Securities Act.

Emerging Growth Company Status

In December 2021, the Securities and Exchange Commission (“SEC”) proposed rules related to corporate share repurchase programs, which include extensive disclosure requirements for issuers that engage in share repurchasing.

Our future share repurchase programs will likely be subject to such future regulations.

The Jumpstart Our Businesses Act, or JOBS Act, which was enacted in 2012, has made numerous changes to the federal securities laws to facilitate access to capital markets.

Under the JOBS Act, a company with total annual gross revenues of less than $1.07 billion during its most recently completed fiscal year qualifies as an “emerging growth company.” Following the IPO, Eastern Bankshares, Inc.

qualified as an emerging growth company, and we expect that we will continue to qualify as an emerging growth company under the JOBS Act until December 31, 2021.

An emerging growth company may choose not to hold shareholder votes to approve annual executive compensation (more frequently referred to as “say-on-pay” votes), although we currently plan to hold such a vote at our 2021 annual meeting of shareholders, or executive compensation payable in connection with a merger (more frequently referred to as “say-on-golden parachute” votes).

An emerging growth company also is not subject to the requirement that its auditors attest to the effectiveness of its internal control over financial reporting and can provide scaled disclosure regarding executive compensation.

The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards.

Pursuant to the JOBS Act, we have elected to take advantage of the benefits of this extended

transition period for complying with new or revised accounting standards as required when they are adopted for private companies.

As a result, our operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

We expect that Eastern Bankshares Inc.

will continue to qualify as an emerging growth company under the JOBS Act until December 31, 2021.

Applicable regulations provide that Eastern Bankshares, Inc.

will cease to qualify as an emerging growth company on the earlier of:

(i) the last day of the fiscal year of the Bank during which it had total annual gross revenues of $1.07 billion or more;

(ii) the last day of the fiscal year of the issuer following the fifth anniversary of the IPO;

(iii) the date on which Eastern Bankshares, Inc.

has, during the previous three-year period, issued more than $1.07 billion in non-convertible debt;

or (iv) the date on which Eastern Bankshares, Inc.

is deemed to be a “large accelerated filer” under Securities and Exchange Commission regulations (generally, Eastern Bankshares, Inc.

will be deemed to be classified as a “large accredited filer” on the last day of the fiscal year in which the market value of voting and non-voting equity held by non-affiliates was at least $700 million or more as of the last day of the second quarter of that fiscal year).

qualified as an emerging growth company, and we continued to qualify as an emerging growth company under the JOBS Act until December 31, 2021.

Eastern Bankshares Inc.

will not be classified as a large accelerated filer earlier than December 31, 2021.

Once we cease to be an emerging growth company, we will not be entitled to the exemptions provided in the JOBS Act discussed above.

ceased to qualify as an emerging growth company under the JOBS Act as of December 31, 2021, the last day of the fiscal year in which Eastern Bankshares, Inc.

was classified as a “large accelerated filer,” under Securities and Exchange Commission regulations.

As a result, we are no longer entitled to the exemptions for emerging growth companies provided in the JOBS Act.

Sarbanes-Oxley Act of 2002

18 unchanged sentences

Compliance with all applicable laws and regulations involves a significant investment in time and resources.

Any new laws or regulations applicable to our business, any changes to existing laws or regulations, or any changes to the interpretations or enforcement of those laws or regulations, may affect our operations and/or financial condition.

Any new laws or regulations applicable to our business, any changes to existing laws or regulations, or any changes to the

interpretations or enforcement of those laws or regulations, may affect our operations and/or financial condition.

For additional information, see Note 17, “Commitments and Contingencies” within the Notes to the Consolidated Financial Statements included in Item 8 in this Annual Report on Form 10-K.

7 unchanged sentences

If Eastern Bank is found to have violated one or more consumer protection laws, it may be required to pay restitution to certain affected customers in connection with certain of these practices.

In addition, Eastern Bank may face formal administrative enforcement actions from their federal and other governmental supervisory agencies, including the assessment of civil monetary penalties and restitution, relating to consumer products, and could also face potential civil litigation.

In addition, Eastern Bank may face formal administrative enforcement actions from its federal and other governmental supervisory agencies, including the assessment of civil monetary penalties and restitution, relating to consumer products, and could also face potential civil litigation.

For further information regarding risks related to regulatory actions and litigation, please refer to “Risk Factors—Risks Related to Our Business—Operational risks are inherent in our businesses,” “Risk Factors—Risks Related to Regulations—Our business is highly regulated, which could limit or restrict our activities and impose financial requirements or limitations on the conduct of our business,” and “Risk Factors—Risks Related to Regulations—We are subject to numerous laws designed to protect consumers, including the Community Reinvestment Act and fair lending laws, and failure to comply with these laws could lead to a wide variety of sanctions” in Part I, Item 1A of this Annual Report on Form 10-K.

1 unchanged sentence

Diversity, Equity & Inclusion (DE&I)

The Company is deeply committed to having a diverse workforce reflective of the communities we serve, where all feel included and supported.

The Company, which employed 2,059 full- and part- time employees as of December 31, 2021, of whom 1,889 were full-time employees, is deeply committed to having a diverse workforce reflective of the communities we serve, where all feel included and supported.

Our strategy is to build and sustain diversity, equity and inclusion (“DE&I”) as a critical aspect of our work and workplace environment, which we believe makes us a better employer, a better provider of services to our customers, a better member of our communities and a better investment for our shareholders.

The Company has long been committed to and recognized as a leader in DE&I, as evidenced by:

• The Wall Street Journal featured Eastern’s work to drive a diverse and inclusive culture in December 2020.

• Our diverse Board of Directors.

DE&I starts with our diverse Board of Directors, which has long been led by professionals of color (Wendall Knox, Lead Director 2009-2017;

DE&I starts with our diverse Board of Directors, which has long been led by professionals of color (Wendell Knox, Lead Director 2009-2017;

Deborah Jackson, Lead Director Jan.

2 unchanged sentences

• Our diverse leadership team.

Our Management Committee, which runs the Company, is comprised of 12 executives, 40% of whom are women or people of color, including our President, Quincy Miller.

Our Management Committee, which runs the Company, is comprised of 11 executives, about 40% of whom are women or people of color, including our President, Quincy Miller.

In 2021, Sujata Yadav, a woman of color, was promoted to Executive Vice President and Chief Marketing Officer.

It is anticipated that she will join our Management Committee on March 1, 2022 as the first woman of color to serve on the Management Committee.

• Our Company was built by women.

Our first customer was a woman, and for over 200 years women have played a key role in our Company’s success.

Women comprise 67% of our total workforce and 38% are Vice Presidents or hold more senior positions across our divisions.

Women comprise 67% of our total workforce.

• Our recognition as a leader in DE&I.

We’ve been recognized in 2020 as a “Best Place to Work” for LGBTQ+ equality by the Human Rights Campaign for the eighth consecutive year, and The Wall Street Journal featured Eastern’s work to drive a diverse and inclusive culture in December 2020.

• Our 11 employee resource groups.

We’ve been recognized in 2021 as a “Best Place to Work” for LGBTQ+ equality by the Human Rights Campaign for the ninth consecutive year.

We were the first company in the country to sign the Gay and Lesbian Alliance Against Defamation’s amicus brief that asked the U.S.

Supreme Court to strike down the Defense of Marriage Act and we expanded our health insurance to offer comprehensive transgender-inclusive coverage, including coverage for treatments and services related to sex affirmation or reassignment.

We also are a founding member of the Massachusetts LGBT Chamber of Commerce and the LGBT Business Network, working to promote opportunities for LGBT-owned businesses, corporations and professionals, and during the COVID-19 pandemic, helping to ensure LGBTQ+-owned businesses have access to loan assistance programs like the Paycheck Protection Program.

• Our 11 employee resource groups (“ERGs”).

Each group has an executive sponsor, and serves as a source of support and inclusion for colleagues.

The groups also provide guidance to leadership on issues of importance to them.

In 2020, our Black Professionals Alliance played a key leadership role in advising executive management in holding a Town Hall dedicated to discussing management’s reflections and action plans in the wake of the murders of George Floyd and Breonna Taylor, among other Black people by law enforcement.

The leadership of our Black Professional Alliance also helped develop additional training centered on “Understanding Racism” that

continues to be offered to all employees.

The employee resource groups reflect the diversity of our workforce and the communities we serve, and include:

◦ Asian American Professional Coalition;

The groups also provide guidance to leadership on issues of importance to them, with ERG leaders serving on our DE&I Steering Committee alongside our senior executives, consultants and advisors.

ERG highlights in 2021 include:

◦ Our Asian American Professional Collective facilitated an employee-wide live bystander training to empower employees to appropriately respond to harassment in the wake of public violence against members of the Asian community;

◦ Our Latinos In Action group lead a number of colleague development sessions including roundtables that celebrated diversity inclusion and intersectionality.

◦ Our Women’s Interest Network leaders organized a live session co-lead by our CEO and an expert on mental health to address employee burnout and strategies for maintaining strong mental health;

◦ Our Veterans and Military Families ERG leaders facilitated a virtual event honoring Medal of Honor recipients and their families;

◦ As part of our Black History Month celebration, our Company held a virtual screening of “Grounded, a film presentation” highlighting the relationships of prominent Black Bostonian couples and their hopes for grounding the next generation of Black leaders.

We also hosted a virtual event honoring Medal of Honor recipients and their families with leadership from our Military Veterans and Families Network ERG.

◦ The ERGs reflect the diversity of our workforce and the communities we serve, and include:

▪ Asian American Professional Collective;

▪ Black Professional Alliance;

8 unchanged sentences

▪ Young Professionals Network.

While we are proud of our long standing commitment to DE&I, we also recognize that we have more work to do to improve DE&I within our Company, particularly at the most senior levels of our organization.

Accordingly, the Company is implementing a “Road to Equity” action plan which reflects greater intentionality in increasing DE&I across a number of areas including talent acquisition, retention and development, and supplier diversity.

While our Company has been successful in recruiting diverse talent into our organization, we have a richness of gender and ethnic diversity at the junior levels of our Company, but not as much at the more senior levels.

In addition, some of our divisions, such as our Retail Division, are incredibly diverse, while other divisions remain predominately comprised of non-diverse colleagues.

Senior management at the Company is in the process of setting both qualitative and quantitative goals to help drive an enhanced focus on DE&I, with metrics and dashboards under development to ensure accountability for making progress toward these goals over time.

Simply stated, our main goal is to equitably represent like the communities we serve at all levels of our organization, from our branches to the C-suite.

To help drive diverse recruiting, the Company partners with external organizations that develop diverse candidate pipelines and supply diverse talent, regularly reports on diverse hiring to the Board of Directors, and has a talent acquisition team led by and comprised of diverse colleagues.

In 2020, we achieved a record diversity hiring of 43 percent across the Company.

To further enhance our culture and commitment to DE&I, the Company provides DE&I training across all divisions and employee populations, offering mandatory training on the Company’s DE&I strategy for all employees;

middle management training on understanding social identity;

and senior management training on organizational change tied to the Road to Equity, with the assistance and leadership of experienced external DE&I professionals.

The Company recently formed a DE&I steering committee chaired by the Chief Executive Officer, whose members include executives, leaders of our employee resource groups, and external advisors who are leaders on and experts in DE&I issues to further drive this intentionality.

The Board of Directors recently engaged an independent DE&I consultant, reporting directly to the Lead Director, to provide guidance and best practices to further drive our success on the Road to Equity.

We are proud of our long standing commitment to DE&I but recognize that we have more work to do to improve DE&I at the most senior levels of our organization.

In 2021, the Company formally launched our “Road to Equity” action plan, which reflects greater intentionality in increasing DE&I across a number of areas of the Company, including talent acquisition, retention and development, supplier diversity, products and services, and philanthropic support from the Eastern Bank Foundation.

Our Company has been successful in recruiting diverse talent into our organization:

in 2021, 45% of our new hires in 2021 were racially diverse and 63% were women.

However, while we have extensive gender and ethnic diversity at the junior levels of our Company, we have less diversity at the more senior levels of our Company.

While some of our divisions, such as our Retail Division, are more diverse, other divisions remain predominately comprised of non-diverse colleagues.

In 2021, our senior management set a number of key objectives to help drive an enhanced focus on DE&I, including the development of a dashboard to ensure the Company measures and reports progress on the quantitative DE&I goals related to talent management, supplier diversity and philanthropic spend in underserved communities.

The Company also put in place programs and trainings to further support the Road to Equity.

Eastern Insurance Group, designed and launched a Career Development Rotational Program with a focus on providing an onramp for diverse talent into the insurance sector.

Our Commercial Credit Training Program enhanced its focus on serving as an onramp into Commercial Lending and Credit for women and people of color, who are underrepresented in these divisions at our Company.

Supplier diversity goals were expanded to all divisions in our Company while a team was formed to focus on products and services related to a

development of a WMBE (Women and Minority Owned Businesses) vertical.

Approximately 80 of our most senior executives from across the Company set DE&I goals related to talent acquisition, management and supplier diversity and met twice in 2021 as a large group to learn about best practices in DE&I recruiting, mentoring and professional development.

To help drive diverse recruiting, management partners with external organizations to develop diverse candidate pipelines and supply diverse talent, regularly reports on diverse hiring to the Board of Directors, and has a talent acquisition team led by and comprised of diverse colleagues.

In 2021, we enhanced our focus on diverse candidate slates and, as a result, achieved record diversity hiring (racial diversity).

Year-over-year, we increased racial diversity in our total workforce by two percentage points.

Our hiring at the Senior Vice President level included 17% diverse hires and 50% women hires and our hiring at the Vice President level included 33% diverse hires and 54% women hires.

Diversity at these senior levels will continue to be an area of enhanced focus.

To further enhance our culture and commitment to DE&I, the Company provides DE&I training across all divisions with the assistance and leadership of experienced external DE&I professionals.

This training includes mandatory training on the Company’s DE&I strategy for all employees;

training for our middle managers on understanding social identity;

and training for senior management on effecting organizational change aligned with the Road to Equity.

The Company also formed a DE&I steering committee chaired by the Chief Executive Officer, whose members include executives, leaders of our ERGs, and external advisors who are leaders on and experts in DE&I issues.

In 2021, the DE&I steering committee helped develop and execute on key DE&I objectives, such as the enhanced DE&I training and programs.

The Board of Directors also engaged an independent DE&I consultant, who reports directly to the Lead Director, serves on our DE&I steering committee and provides guidance and best practices to senior management and the Board to further drive our success on the Road to Equity.

The tables below depict the Company’s demographics as of December 31, 2021 for our Board of Directors, our Management Committee (which consists of our senior most leaders at the Company), our total workforce, and new hires in 2021 who remained employed as of December 31, 2021:

16 unchanged sentences

281 161 5 447 75 32 80 13 13 234 447

62.9% 36.0% 1.1% 100.0% 16.8% 7.2% 17.9% 2.9% 2.9% 52.3% 100.0%

Pay & Benefits

12 unchanged sentences

and wellness programming.

We make a considerable commitment to our colleagues’ retirement health by offering a defined pension benefit plan, a 401(k) contribution, and effective in 2020, an employee stock ownership plan ("ESOP") that allocates Company stock to all eligible employees (based on age and hours worked) starting in 2021.

We believe these comprehensive benefits help the Company retain top talent, as evidenced by an average tenure of 11 years, with 41% of our colleagues working for the Company for 10 or more years.

In 2021, we offered our employees three separate retirement benefits:

a defined pension benefit plan, a 401(k) contribution, and an employee stock ownership plan (“ESOP”) through which Company stock is allocated to all eligible employees (based on age and hours worked).

COVID-19 Response

As the Company navigated the challenges of the COVID-19 pandemic in 2020 with essential, customer-facing colleagues, we adopted a “people first” philosophy that we believe has served our Company, colleagues and communities well.

As an essential business, we formed a cross-functional pandemic response team to lead pandemic response efforts across the Company.

This team is now focused on vaccinations and return to work strategies.

We put in place a pandemic remote work policy and securely set up two-thirds of our colleagues to work safely and effectively from home, while enhancing cleaning protocols and safety procedures across our office and branch locations in line with best practices.

• put in place a dedicated Human Resources hotline to help colleagues report exposures, contact trace and obtain support around illness;

• implemented a travel tracker to monitor travel and help ensure compliance with travel restrictions and quarantine requirements;

• increased colleague communications to ensure cultural growth despite a new remote workforce with weekly CEO emails and held a record total of 17 Town Hall meetings in 2020;

• continued to pay employees who could not work due to COVID-19-related health, child or family care needs for the first seven months of the pandemic;

• provided premium pay to frontline colleagues during the height of the pandemic;

• increased paid time off for anyone exposed to or sick with COVID-19, which continues today;

• instituted a one-time, limited carryover of 2020 unused vacation time to offer more flexibility to colleagues to take time off in 2021;

• offered new wellness resources and programming centered on mental health.

As the Company navigated the challenges of the COVID-19 pandemic in 2021, we were guided by our “people first” philosophy that we believe has served our Company, colleagues and communities well.

Our cross-functional pandemic response team continued to lead pandemic response efforts across the Company and prioritized the need to keep our essential, onsite, customer facing colleagues as safe as possible while continuing to serve our customers’ needs.

In 2021, our pandemic response team worked closely with executive management to mitigate risks of COVID-19 through a continuous vaccination education and support campaign.

• staffed a dedicated COVID-19 hotline to help colleagues report exposures and positive cases, contact trace and obtain support around illness and return to work;

• implemented a vaccination tracker to help measure COVID-19 risk within our employee population and required uses of a travel tracker before vaccinations became available to monitor travel and help ensure compliance with travel restrictions and quarantine requirements;

• increased colleague communications around COVID-19 protocols to ensure employees understood best practices around COVID-19 risk mitigation;

vaccinations, boosters and general CDC guidance, which the Company continued to use as the basis for its protocol;

• continued to pay employees who could not work due to COVID-19-related illness, to get vaccinated and for family care needs without requiring employees to use their sick or personal time and offered additional time off to cover time quarantining due to COVID-19 exposure;

• instituted, for the second consecutive year, a carryover of 2021 unused vacation time to offer more flexibility to colleagues to take time off in 2022;

• procured rapid antigen tests for employees who did not have ready access to them during the winter holidays as the Omicron variant created enhanced risks of illness;

• held three vaccination and booster clinics for employees, and in some instances, their family members, both during work and after hours to accommodate our onsite workers.

Employee Well Being

Given our 2020 IPO, 2021 acquisition of Century and other large strategic matters, we have asked our employees for a tremendous commitment to their jobs over the last two years.

In addition, more than half of our colleagues have continued to work remotely and have less ability to separate work from home and are thus prone to work more than ever before.

During this time period, we have also experienced turnover in some divisions, which has compounded employee stress related to COVID-19-related staffing challenges in those same divisions.

As a result of these collective challenges, the Company became focused on burnout amongst our employees in 2021.

To better support our employees, the Company enhanced its wellness offerings and focused more on mental health support.

We increased minimum vacation time from two to three weeks, which provided more time off for over 400 employees, many of whom work in customer-facing or on-site positions that have historically had high levels of burnout.

After closing the Century acquisition and to provide employees with additional downtime, the Company received regulatory approval to close on the day after Thanksgiving for a first-ever Company-wide “day of rest” and any employees who had to work that day received a floating holiday.

Management believes that its recognition of the ongoing need to address employee burnout was well received by our colleagues and demonstrated our Company’s commitment to employee well-being.

As mentioned above, our CEO also co-lead with a mental health expert a

session with our Women’s Interest Network on preventing burnout and best practices for mental health well-being.

The session was held in the fourth quarter, was widely attended by employees and we believe set the groundwork for management’s continued focus on addressing employee burnout in 2022.

Finally, in 2022, to further support our employees, we created a fund that provides grants to eligible employees experiencing an unexpected financial hardship.

Employee Engagement

We are dedicated to engaging our workforce to better understand how we can improve our culture and workplace In 2020, as a result of a strong desire to support our colleagues through the pandemic, remote work and our transition to a public company, we increased the number of our Town Hall meetings hosted by the CEO.

At each meeting we ensured we left ample time for employees to ask questions and engage directly with the CEO and Management Committee members.

We held 17 such Town Halls in 2020, a record number for our Company.

We are dedicated to engaging our workforce to better understand how we can improve our culture and workplace In 2021, we continued to virtually host a significant number of Town Hall meetings, led by the CEO.

At each meeting, time was reserved for employees to ask questions and engage directly with the CEO and Management Committee members.

We held 12 Town Halls in 2021, which represented a significant increase from the numbers held in pre-COVID-19 years.

We also engage our employees through more formal measures.

Annually, we engage an independent third party consultant to conduct an employee engagement survey, and the Company then identifies areas to address based on employee feedback.

In 2020, we added questions about the Company’s COVID-19 response and DE&I.

Ninety-two percent of employees responded to the survey, with 93% of respondents reporting they are proud to work for our Company.

We also conducted internal surveys in 2020 to gauge employee feedback on our COVID-19 response, and utilized a crowd-sourcing application called Hatch to quickly receive feedback from our employees about how we could improve their remote work experience.

Additionally, we supported our employees’ commitment to engage with the communities we serve through socially distanced and remote volunteer opportunities.

We also redesigned our onboarding and offboarding engagement survey, which is administered through the same third party consultant that manages the annual engagement survey.

For onboarding, we now engage with newly hired employees at the 30 day and 90 day mark to understand how they are integrating into the Company and how the Company can improve the onboarding process including new employee training, among other topics.

For offboarding, we now survey colleagues to better understand why they left the Company, and enhanced the questions to capture if the colleague chose to leave for reasons related to ethics, our culture, a lack of DE&I and other reasons.

We believe that the increased emphasis on employee surveying will provide us with data to improve the overall employee experience at our Company, thereby deepening engagement and retention.

Annually, we engage an independent third party consultant to conduct an employee engagement survey, and based on employee feedback, management identifies areas to address.

In 2021, we added questions to the survey about the Company’s COVID-19 response and DE&I.

Ninety-one percent of employees responded to the survey, with 90% of respondents reporting a favorable view of the Company’s response to COVID-19, 89% of respondents reporting they are proud to work for our Company and 87% reporting that the Company has created an environment where people with diverse backgrounds can succeed.

We revamped our onboarding program to ensure the approximately 252 colleagues joining us from Century could understand our Company, culture and their role within it by hosting a virtual welcome event hosted by our CEO.

We also assigned “buddy” mentors to new colleagues and offered enhanced people management training for managers of the new colleagues.

We continued to utilize our onboarding and offboarding engagement survey, which is administered through the same third party consultant that manages the annual engagement survey.

For onboarding, we engage with newly hired employees at the 30 day and 90 day mark to understand how they are integrating into the Company and how the Company can improve the onboarding process including new employee training, among other topics.

For offboarding, we survey colleagues to better understand why they left the Company, and ask specific questions to capture if the colleague chose to leave for reasons related to ethics, our culture, a lack of DE&I and other reasons.

We believe that this continued emphasis on employee surveying will provide us with data to improve the overall employee experience at our Company, thereby deepening engagement and retention.

In 2021, we supported our employees’ commitment to engage with the communities we serve through socially distanced and remote volunteer opportunities, offering eight hours of paid time off to volunteer.

We were named for the fifth consecutive year among the top 10 most charitable organizations in Massachusetts by the Boston Business Journal.

Our Company experienced an increase in employee turnover in the last two quarters of 2021, which management believes reflects pent up turnover, based on low turnover numbers for the prior 12 months (when COVID-19 vaccinations were not yet widely available), a competitive labor market and retirements.

However, overall Company turnover for 2021 was slightly less than in 2019, which was the last full year in which the labor market was unaffected by COVID-19.

To help alleviate the staffing stresses caused by this turnover, the Company engaged third parties to support talent acquisition in higher turnover divisions, which resulted in a reduction year over year in the time required to fill open positions, even despite the increased churn in some areas of the employee base.

We also believe that increased the number of weeks of vacation we offer (from two to three) may help us attract talent in this competitive environment.

Finally, the Company’s succession planning, particularly at Eastern Insurance Group and in our Commercial Lending Group, has enabled the Company to transition into its next generation of leaders, following the retirement of senior colleagues in 2021 (including the CEO and President of Eastern Insurance Group and the Vice Chair and Chief Commercial Banking Officer of the Bank).

Intellectual Property

2 unchanged sentences

We monitor our trademarks and vigorously oppose the infringement of any of our marks as appropriate.

Available Information

We file annual, quarterly, and current reports, proxy statements and other information required by the Securities Exchange Act of 1934, as amended (“Exchange Act”), with the Securities and Exchange Commission (“SEC”).

Our SEC filings are available to the public from the SEC’s internet site at www.SEC.gov.

We post the following filings to investor.easternbank.com as soon as reasonably practicable after they are electronically filed with or furnished to the SEC:

our annual reports on Form 10-K, our proxy statements, our quarterly reports on Form 10-Q, our current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act.

Paper copies of all such filings are available free of charge by request via email (investor.relations@easternbank.com), telephone (781-598-7920) or mail (Eastern Bankshares, Inc.

Investor Relations at 265 Franklin Street, Boston, MA 02110).

The information contained or incorporated on our website is not a part of this Annual Report on Form 10-K.

We may use our website as a means of disclosing material information and for complying with our disclosure obligations under Regulation Fair Disclosure promulgated by the SEC.

These disclosures are included on our website in the “Investor Relations” or “News” sections.

Accordingly, investors should monitor these portions of our website, in addition to following the Company’s press releases, SEC filings, public conference calls and webcasts.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business