Statistics. Prior to The Motley Fool, he wrote about and covered community and regional banks in New England for The Warren Group. According to its official history, Eastern Bank can trace its corporate roots back to 1818 and the foundation of Salem Savings That means the bank's book value is somewhere around $17.50 per share ($17.50 x 0.57 = ~$10) in this range. It's a risky time to be a bank, and it may be a bit of a bumpy ride in the beginning, but I believe Eastern is a good long-term investment -- certainly for current depositors that get to buy shares early, and for the public. Additionally, the bank has a lot of capital built up. The Motley Fool has no position in any of the stocks mentioned. Before the pandemic hit, most of Eastern's competitors were trading well above book value. Eastern Bankshares Inc. (Eastern Bank) $1,800,000,000 2 American Well Corp. $742,000,000 3 Duck Creek Technologies Inc. $405,000,000 … Bram Berkowitz mainly writes in the financials bureau covering the banking sector. Market data powered by FactSet and Web Financial Group. Many are extremely old (Eastern was founded more than 200 years ago), and therefore are often profitable and have established themselves in their respective markets. Image source: 2018 Eastern Bank annual review. Eastern Bank announced today that Eastern Bankshares, Inc. (the “Company”), the proposed stock holding company of Eastern Bank, is commencing its stoc Eastern also hired a chief digital strategist in 2018 and has a fintech incubator at the bank. It opened the day at USD$18.12 after a previous close of USD$17.88. Just because you’re working from home doesn’t mean your boss can’t keep tabs on your every move. Another thing I like about Eastern is that unlike most small mutuals, this bank is actually strong when it comes to technology. Mutual banks are not start-ups -- in fact, they are the opposite. Eastern showed some of its tech prowess when it originated roughly $1.1 billion in Paycheck Protection Program loans, more than several of its direct competitors. If you are a depositor at a mutual bank when it goes public, I am almost always going to recommend purchasing shares, because these offerings almost always fill up. Founded in 1993 by brothers Tom and David Gardner, The Motley Fool helps millions of people attain financial freedom through our website, podcasts, books, newspaper column, radio show, and premium investing services. Eastern Bank Announces Plan For Conversion Into Public Company Conversion to Provide Additional Resources to Grow Customer Offerings, Accelerate New Business Opportunities & … The latest price was USD$17.92 (25 minute delay). Eastern Bankshares, Inc (EBC) is a leading banks-regional business based in the US. The Motley Fool has a disclosure policy. Eastern turned a profit of more than $135 million in 2019 and has built up more than $1.6 billion in retained earnings. It's a risky time to be a bank, and it may be a bit of a bumpy ride in the beginning, but I believe Eastern is a good long-term investment -- certainly for current depositors that get to buy shares early, and for the public. Stock Advisor launched in February of 2002. The bank plans to sell anywhere from roughly 175.4 million shares to more than 201 million shares of common stock in its IPO. Another thing I like about Eastern is that unlike most small mutuals, this bank is actually strong when it comes to technology. Additionally, the bank has a lot of capital built up. While the bank is still run by a standard management team, retail depositors with as little as $50 in an account get to participate in its IPO. It developed the fintech company Numerated, which can approve some small-business loan applications in just minutes. Video: Here's which sectors are poised for growth in 2021 if the pandemic winds down (CNBC), How you can save $1 million for retirement, How much the most populous states pay mail carriers, Creepy ways your company can spy on you while you work from home, Major companies suspend social media advertising over online hate speech, This bookshop survived earthquakes and recessions. The bank, established in 1818, plans to raise $1.3 billion to $1.7 billion through an initial public offering (IPO) this year, according to a regulatory filing . Veuer’s Sean Dowling has more. Since its founding in 1818, Eastern has been committed to providing competitive financial products and services and an outstanding customer experience, while making meaningful contributions to the communities it serves. Financials. Days after IPO, Eastern makes a (non-bank) acquisition By Greg Ryan – Law and Money Reporter, Boston Business Journal Oct 21, 2020 That didn’t take long. At this level, Eastern also trades at a price-to-earnings multiple of roughly 20. Eastern is pricing its IPO at $10 per share, which is common for mutual IPO conversions. Eastern Bank in Boston, the nation's oldest and second-largest mutual bank, is going public to prepare for a post-pandemic world. Not only do many depositors, employees, and other stakeholders purchase shares in the initial subscription because of how cheap they are, but there is also a group of people who know about mutual offerings and open bank accounts at mutual institutions hoping for them to go public. CEO Bob Rivers also told The Boston Business Journal that he thinks Eastern can become a $40-billion-asset bank over the next decade. When does the company's lock-up period expire? Eastern Bank (NASDAQ: EBC) is gearing up to go public in mid-October in what will be one of the few bank IPOs of the year. Let's look at what we can expect from this IPO and whether it can be successful. The bank plans to sell anywhere from roughly 175.4 million shares to more than 201 million shares of common stock in its IPO. Additionally, I think one of the reasons Eastern is charging ahead with its IPO during the pandemic is because it wants capital available to make a big acquisition sooner while many banks are still trading at lower tangible book values. Mutual savings institutions have a history of performing well, and Eastern has been around for more than two centuries. Shares are expected to begin trading on October 15 under the ticker symbol ‘EBC’, the company said. As part of the conversion, Eastern intends to give the Eastern Bank Charitable Foundation a 4% equity interest in Eastern Bankshares. The Company has six segments: Main operations (Onshore Banking), which deals with commercial banking … The problem with bank acquirers is that their stock prices tend to get dinged up after an acquisition, and then the banks can come under a lot of pressure to make that acquisition accretive enough to earnings to make up for all the money they just spent. With the economy struggling, many banks have been forced not only to increase the amount of cash they are setting aside for potential loan losses, but also to grant loan deferrals to many customers. How you can save a million bucks for retirement. But it does show the potential of the stock. Mutual savings institutions are often seen as good investments because they are frequently acquisition targets, which often result in a nice premium. Even if you are not a depositor, mutual banks are still typically good investments. Please make sure you've selected a ticker. As a mutual bank, Eastern has a unique corporate structure in that it's technically owned by its depositors. But it does show the potential of the stock. Eastern Bank (NASDAQ: EBC) is gearing up to go public in mid-October in what will be one of the few bank IPOs of the year. At this level, Eastern also trades at a price-to-earnings multiple of roughly 20. Eastern Bank nearly doubles the size of its charitable foundation after IPO Company has donated 4 percent of its newly issued shares, worth about … Eastern Bankshares, Inc is primarely in the business of savings institution, federally chartered. But that's actually a smaller amount of deferrals than some of Eastern's direct competitors, and given the way lots of community and regional banks have been trending, I would expect that deferrals have come down more by now. Before the pandemic hit, most of Eastern's competitors were trading well above book value. This doesn't mean Eastern will start trading at book value, especially right now while many banks are trading below it. This should be interesting to watch not only because it's going public in an extremely uncertain environment for the banking industry, but also because it's a mutual savings bank -- and not just any mutual, but the biggest one left in the country. Eastern Bankshares in Boston has its work cut out for it as it enters the new year. BOSTON, June 18, 2020 /PRNewswire/ -- Eastern Bank Corporation, the mutual holding company of Eastern Bank, today announced that its Board … CEO Bob Rivers also told The Boston Business Journal that he thinks Eastern can become a $40-billion-asset bank over the next decade. For this reason, management at mutuals want to price shares as low as possible before the market prices the stock, so stakeholders can hopefully enjoy a nice bump as soon as it hits the public markets. Like us on Facebook to see similar stories, Minneapolis considering settlement with George Floyd's family, Former Fox host Eric Bolling considering congressional campaign, Here's which sectors are poised for growth in 2021 if the pandemic winds down. While you never know, Eastern appears to be more of an acquirer than a target. While certainly exciting, acquisitions are more difficult to pull off than many realize, and the ends often don't justify the means. In its prospectus, the bank said it intends to use proceeds from the IPO to "pursue opportunities to acquire banks in our existing and contiguous markets that create attractive financial returns." Have you ever wondered how much these essential workers make? By comparison, $1,000 invested in the Apple IPO would be worth $1,262,380 today. Eastern is pricing its IPO at $10 per share, which is common for mutual IPO conversions. Eastern Bankshares, Inc. (EBC) Stock Price: $17.92 USD 0.04 (0.22%) Updated Mar 5, 2021 4:00 PM EST - Market closed. They are targeting an issuance of 175 million shares at $10, for an IPO of $1.75B (can be up or downsized). The issue right now is that the pandemic has made all banks risky, primarily because they are closely linked to the economy and very sensitive to interest rates. Eastern Bank Ltd. Eastern Bank Ltd. provides commercial and retail banking services. Overview. While going through Eastern's prospectus, I came across this independent appraisal done for the bank. Bram Berkowitz has no position in any of the stocks mentioned. Mutual banks are not start-ups -- in fact, they are the opposite. Here’s how: Eastern’s foundation will get 4 percent of the IPO proceeds, estimated at $60 million. During the day the price has varied from a low of USD$17.63 to a high of USD$18.27. Before de-mutualizing in 2020, it was the oldest and largest mutual bank in the United States and the largest community bank in Massachusetts. View real-time stock prices and stock quotes for a full financial overview. The company financial products and services, personal and commercial banking, trade … Eastern showed some of its tech prowess when it originated roughly $1.1 billion in Paycheck Protection Program loans, more than several of its direct competitors. Cumulative Growth of a $10,000 Investment in Stock Advisor, What to Expect from Eastern Bank's IPO @themotleyfool #stocks, Why Shares of FinVolution Group Are Dipping Today, This Could Be a Game Changer for MasterCard's Earnings, Seritage Growth Properties' Struggles Continue, 3 Dividend Stocks That Pay You Better Than Coca-Cola Does, 3 Acquisitions That Could Shake Up the Regional Banking Space, Copyright, Trademark and Patent Information. Not only do many depositors, employees, and other stakeholders purchase shares in the initial subscription because of how cheap they are, but there is also a group of people who know about mutual offerings and open bank accounts at mutual institutions hoping for them to go public. The key will be watching to make sure that Eastern is making the right acquisitions that fit in with its strategic plan, and that it doesn't overpay. With roughly 70% of its loan book tied up in the commercial sector, Eastern has not been immune, modifying roughly 9.4% of its total loan book in terms of volume at the end of June. Eastern Bank is a bank based in Boston, Massachusetts. The newly created firm, SVF Investment Corp., plans to list on the Nasdaq under ticker symbol "SVFAU." Additionally, I think one of the reasons Eastern is charging ahead with its IPO during the pandemic is because it wants capital available to make a big acquisition sooner while many banks are still trading at lower tangible book values. Eastern's subscription offering was not oversubscribed, raising $1.8 billion, but that's still toward the higher end of the range, and most mutuals don't attempt to raise billions of dollars like Eastern has. Its common equity tier 1 (CET1) capital ratio, a measure of core capital expressed as a percentage of risk-weighted assets, is 12.42%, a big number for a bank of Eastern's size. Many are extremely old (Eastern was founded more than 200 years ago), and therefore are often profitable and have established themselves in their respective markets. While certainly exciting, acquisitions are more difficult to pull off than many realize, and the ends often don't justify the means. If you are a depositor at a mutual bank when it goes public, I am almost always going to recommend purchasing shares, because these offerings almost always fill up. The latest information on initial public offerings (IPOs), including latest IPOs, expected IPOs, recent filings, and IPO performance from Nasdaq. It says that if Eastern is able to sell the maximum number of the shares in its IPO (roughly 175.4 million) at $10 per share, it would be trading at a price-to-book-value ratio of 57.57%. The problem with bank acquirers is that their stock prices tend to get dinged up after an acquisition, and then the banks can come under a lot of pressure to make that acquisition accretive enough to earnings to make up for all the money they just spent. The issue right now is that the pandemic has made all banks risky, primarily because they are closely linked to the economy and very sensitive to interest rates. Eastern also hired a chief digital strategist in 2018 and has a fintech incubator at the bank. 64,000,000 newly issued shares 2. Eastern turned a profit of more than $135 million in 2019 and has built up more than $1.6 billion in retained earnings. It says that if Eastern is able to sell the maximum number of the shares in its IPO (roughly 175.4 million) at $10 per share, it would be trading at a price-to-book-value ratio of 57.57%. But not this, Jim Cramer on Chesapeake Energy filing for bankruptcy. Should you save for retirement or pay down debt? Mutual savings institutions have a history of performing well, and Eastern has been around for more than two centuries. Days after Eastern Bank … While you never know, Eastern appears to be more of an acquirer than a target. The key will be watching to make sure that Eastern is making the right acquisitions that fit in with its strategic plan, and that it doesn't overpay. of IPO No more than 224,000,000 shares (35% of total issued shares after IPO) divided into 1. But before it converts to a public company and gives up its mutuality, insiders including depositors, employees, officers, directors, as well as the unique bodies of a mutual including the trustees and corporators get first dibs on shares. The economy is currently struggling because of the pandemic, and rates could be low for a while, which hurts loan margins. Eastern is a mutual holding company (never did a first step conversion) that is converting to a full stock form organization. VRTX | Complete Vertex Pharmaceuticals Inc. stock news by MarketWatch. Let's look at what we can expect from this IPO and whether it can be successful. No. Its common equity tier 1 (CET1) capital ratio, a measure of core capital expressed as a percentage of risk-weighted assets, is 12.42%, a big number for a bank of Eastern's size. Eastern is pricing its IPO at $10 per share, which is common for mutual IPO conversions. While the bank is still run by a standard management team, retail depositors with as little as $50 in an account get to participate in its IPO. Ticker: EBC. Furthermore, most of these mutual banks were not making complex derivative trades during the Great Recession, and are considered fairly safe. Mutual savings institutions are often seen as good investments because they are frequently acquisition targets, which often result in a nice premium.