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Three months after an activist investor hammered Eastern Bankshares’ bank acquisition strategy, the Boston-based company made its stance on pursuing future deals clear: It isn’t interested.<\/p>\n
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Instead, Eastern plans to work with what’s on hand and use its excess capital for share buybacks. Three weeks into the new year, it has repurchased 635,000 shares for $12.3 million, and it plans to seek board authorization for an additional share repurchase program when the current one expires.<\/p>\n
“Simply put, we are not focused” on mergers and acquisitions, CEO Denis Sheahan told analysts Friday during the bank’s fourth-quarter earnings call. “We believe that focusing on meaningful growth \u2014 organic growth opportunities we have in front of us and returning excess capital, not M&A \u2014 will deliver meaningful value to shareholders for the foreseeable future.”<\/p>\n
Sheahan didn’t repeat one thing that he had said during the company’s\u00a0 prior earnings call in October, after which the bank’s stock price fell by more than 3%. This time around, Sheahan made no mention of Instead, he told one analyst: “Look, we’re not pursuing acquisitions.”<\/p>\n Eastern, which has completed three bank acquisitions since November 2021, is one of the banks targeted by HoldCo Asset Management, the South Florida-based activist investor that spent the second half of 2025 calling out certain regional banks for alleged mismanagement.<\/p>\n The highest-profile case was HoldCo’s criticism of Comerica in Dallas. In July, HoldCo HoldCo has also scrutinized In Eastern’s case, HoldCo has criticized the management for depleting nearly all of the $30.6 billion-asset bank’s excess capital, spending it on acquisitions and securities restructurings.<\/p>\n The investor group urged Eastern to sell itself to a larger bank and suggested it might find a buyer in M&T Bank in Buffalo. It also threatened to wage a proxy battle if Eastern did not swear off bank mergers and securities restructurings, and commit to returning capital via buybacks.<\/p>\n During the fourth quarter, Eastern repurchased 3.1 million shares of common stock for $55.4 million, reflecting 26% of the share repurchase program that its board authorized in October.<\/p>\n The bank is aiming to reduce its common equity Tier 1 capital ratio from 13.2% at the end of December to around 12%, Chief Financial Officer David Rosato said Friday on the call.<\/p>\n Sheahan called the 12% goal “a pretty significant decline from where it is today” and said it should leave the bank “with very comfortable and safe capital levels.”<\/p>\n Holdco could not be reached Friday for comment.<\/p>\n Analysts were generally positive about Eastern’s fourth-quarter results. The quarter included a partial impact from The HarborOne deal closed in November.<\/p>\n Net income totaled $99.5 million, up more than 63% year over year as a result of higher net interest income and fee income. Earnings per share totaled 46 cents. Analysts polled by S&P Capital IQ had been predicting 39 cents.\u00a0<\/p>\n Revenue totaled $283.5 million, up by nearly 31% year over year.<\/p>\n Noninterest expenses for the quarter were $189.4 million, up 37.7% from the year-ago quarter. The uptick was at least partially the result of merger-related costs and additional salary, benefits and other costs related to bringing on HarborOne’s employees.<\/p>\n In a research note after Eastern’s earnings call, Mark Fitzgibbon, an analyst at Piper Sandler, wrote that “having an activist shareholder can be a headline distraction,” but it’s not always a bad thing.\u00a0<\/p>\n “We believe it also likely ensures [Eastern] will continue to aggressively drive operating performance in the right direction.”<\/p>\n<\/div>\n