Eastern Bankshares (EBC) risk factors, FY2025 10-K

Other

1. 01Summary of Material Risk Factors
2. 02Various risks, including risks associated with changes in interest rates, loan losses, cybersecurity and regulatory compliance, are inherent in our business and our industry generally
3. 03There are various risks associated with acquisitions, any of which could have a material adverse effect on our business
4. 04Certain provisions of our articles of organization, as well as state and federal banking laws, may make our stock a less attractive investment compared to the stock of peer companies
5. 05Risks potentially affecting our business, financial condition, results of operations and cash flows

Risks Related to Acquisitions

1. 06The Company may fail to realize all of the anticipated benefits of HarborOne or other acquired businesses, particularly if the integration of the acquired businesses is more difficult than expected
2. 07The Company may be unsuccessful in retaining personnel57% rewritten
3. 08The Company has incurred and expects to continue to incur costs related to the acquisition and integration of HarborOne and other businesses21% rewritten
4. 09Regulatory approvals required for future business acquisitions, if any, may not be received, may take longer to receive than expected, or may impose burdensome conditions, which could impose additional costs and could delay or prevent completion of the acquisition70% rewritten
5. 10Though we are not focused on acquisitions, if in the future we acquire other companies, our business may be negatively impacted by certain risks inherent with such acquisitions25% rewritten

Risks Related to Our Business and Our Industry Generally

1. 11Changes in interest rates have impacted and may continue to impact our profitability and financial condition44% rewritten
2. 12Although we have implemented risk management strategies, as well as policies and procedures designed to manage the risks associated with changes in market interest rates, changes in interest rates have from time to time had and may in the future have an adverse effect on our operating results and financial condition
3. 13If our allowance for loan losses is insufficient to cover loan losses, our earnings and capital could decrease21% rewritten
4. 14The geographic concentration of our loan portfolio and lending activities makes us vulnerable to a downturn in the local economy
5. 15Our ability to manage reputational risk is critical to attracting and maintaining customers, investors and employees and to the success of our business, and the failure to do so may materially adversely affect our performance67% rewritten
6. 16We face continuing and growing security risks to our information systems including information we maintain relating to our customers
7. 17Technology has lowered barriers to entry and made it possible for non-banks to offer products and services that traditionally were banking products, and made it possible for technology companies to compete with financial institutions in providing electronic, internet-based, and mobile phone-based financial solutions44% rewritten
8. 18We may not be able to successfully implement future information technology system enhancements, or such implementations could be delayed materially, which could adversely affect our business operations and profitability88% rewritten
9. 19We rely on third-party vendors, which could expose us to additional cybersecurity risks
10. 20Industry competition may adversely affect our degree of success
11. 21We may not be able to successfully execute our strategic plan or achieve our performance targets
12. 22Our business strategy includes projected growth in our core businesses, and our financial condition and results of operations could be negatively affected if we fail to grow or fail to manage our growth effectively
13. 23Actions of activist shareholders could cause us to incur substantial costs, divert management’s attention and resources and have an adverse effect on our businessNew
14. 24We could fail to attract, retain or motivate highly skilled and qualified personnel, including our senior management, other key employees or members of our Board, which could impair our ability to successfully execute our strategic plan and otherwise adversely affect our business47% rewritten
15. 25our performance targets and otherwise have a material adverse effect on our business, financial condition and results of operationsNew
16. 26The fair value of Eastern Bank’s investments has declined and could decline further due to a variety of factors
17. 27Commercial loans, including those secured by commercial real estate, are generally riskier than other types of loans and constitute a significant portion of our loan portfolio21% rewritten
18. 28We are subject to environmental liability risk associated with real estate lending activities
19. 29Our business may be adversely affected by credit risks associated with residential property
20. 30A portion of our loan portfolio consists of loan participations, which may have a higher risk of loss than loans we originate because we are not the lead lender and we have limited control over credit monitoring
21. 31Hedging against interest rate exposure may adversely affect our earnings
22. 32New lines of business or new products and services may subject us to additional risks
23. 33We may be required to write down goodwill and other acquisition-related identifiable intangible assets
24. 34We are subject to stringent capital requirements and may need to raise additional capital in the future, and that capital may not be available or its cost may be high
25. 35We face significant legal risks, both from regulatory investigations and proceedings and from private actions brought against us
26. 36Our insurance coverage may be inadequate or expensive
27. 37The loss of deposits or a change in deposit mix could increase our cost of funding and our funding sources may prove insufficient to replace deposits at maturity and support our future growth87% rewritten
28. 38pressures to increase our deposit interest rates. The reduction in our overall level of deposits has increased and could continue to increase the extent to which we rely on other, more expensive sources for fundingNew
29. 39Various factors beyond our control, including interest rate increases and competition from banks and other financial institutions, adversely affect our liquidity51% rewritten
30. 40Deterioration in the performance or financial position of the Federal Home Loan Bank of Boston might restrict the Federal Home Loan Bank of Boston’s ability to meet the funding needs of its members, cause a suspension of its dividend and cause its stock to be determined to be impaired34% rewritten
31. 41We rely on other companies to provide key components of our business infrastructure
32. 42Operational risks are inherent in our businesses77% rewritten
33. 43If our risk management framework proves ineffective, we could suffer unexpected losses and our business and results of operations could be materially adversely affectedNew
34. 44Changes in management’s estimates and assumptions may have a material impact on our Consolidated Financial Statements and our financial condition or operating results
35. 45Our internal controls, procedures and policies may fail or be circumvented, which could impact our results of operations and financial condition
36. 46We maintain a significant investment in projects that generate tax credits, which we may not be able to fully utilize, or, if utilized, may be subject to recapture or restructuring22% rewritten
37. 47We depend on the accuracy and completeness of information about clients and counterparties
38. 48We may not be able to successfully manage our intellectual property and may be subject to infringement claims
39. 49Our business may be adversely affected by conditions in the financial markets and by economic conditions generally
40. 50Changes in accounting standards can be difficult to predict and can materially impact how we record and report our financial condition and results of operations
41. 51The financial weakness of other financial institutions could adversely affect us
42. 52Market changes may adversely affect demand for our services and impact results of operations
43. 53Changes in the equity markets could materially affect the level of assets under management and the demand for fee-based services
44. 54Climate change, natural disasters, public health crises, geopolitical developments, acts of terrorism and other external events could harm our business
45. 55Rising sea levels projected for the coastal regions of Massachusetts, New Hampshire, and Rhode Island could adversely affect our business
46. 56Societal responses to climate change could adversely affect our business and performance, including indirectly through impacts on our customers
47. 57We are subject to a variety of environmental, social and governance risks (“ESG matters”). Risks arising from ESG matters may adversely affect, among other things, our reputation and the trading price of our common stock41% rewritten
48. 58The prevalence of remote and hybrid working arrangements has reduced demand for office space in our market30% rewritten

Risks Related to Regulations

1. 59Monetary policies and regulations of the Federal Reserve Board could adversely affect our business, financial condition and results of operations53% rewritten
2. 60influence overall economic growth and the distribution of credit, bank loans, investments and deposits. Their use also affects interest rates charged on loans or paid on depositsNew
3. 61Our business is highly regulated, which could limit or restrict our activities and impose financial requirements or limitations on the conduct of our business
4. 62We 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
5. 63We may incur fines, penalties and other negative consequences from regulatory violations, possibly even inadvertent or unintentional violations
6. 64Non-compliance with the USA PATRIOT Act, Bank Secrecy Act or other laws and regulations could result in fines or sanctions
7. 65An increase in FDIC insurance assessments could significantly increase our expenses69% rewritten
8. 66We may be unable to disclose some restrictions or limitations on our operations imposed by our regulators
9. 67We could be required to act as a “source of strength” to our banking subsidiaries, which would have a material adverse effect on our business, financial condition and results of operations
10. 68Laws and regulations regarding privacy and data protection could have a material impact on our results of operations
11. 69Changes in tax laws and regulations and differences in interpretation of tax laws and regulations may adversely affect our financial statements and our operating results
12. 70Due to Section 162(m) of the Internal Revenue Code, we may not be able to deduct all of the compensation of some executives, including executives of companies we may acquire in the future
13. 71Regulatory developments could adversely affect our business by increasing our costs and thereby making our business less profitable50% rewritten
14. 72expenses, and could result in limitations on the lines of business we conduct or plan to conduct, modifications to our current or future business practices, and increased capital requirementsNew
15. 73Our business may be adversely affected by changing public policy priorities
16. 74Passage of the GENIUS Act could have an adverse impact on our businessNew

Risks Related to Our Articles of Organization and State and Federal Banking Laws

1. 75Various factors may make takeover attempts more difficult to achieve49% rewritten
2. 76The market price of our stock value may be negatively affected by applicable regulations that restrict stock repurchases by us44% rewritten