Eastern also hired a chief digital strategist in 2018 and has a fintech incubator at the bank. Furthermore, most of these mutual banks were not making complex derivative trades during the Great Recession, and are considered fairly safe. Stock Advisor launched in February of 2002. Eastern is a mutual holding company (never did a first step conversion) that is converting to a full stock form organization. By comparison, $1,000 invested in the Apple IPO would be worth $1,262,380 today. Eastern Bank announced today that Eastern Bankshares, Inc. (the “Company”), the proposed stock holding company of Eastern Bank, is commencing its stock offering in connection with Eastern… 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. 64,000,000 newly issued shares 2. Mutual savings institutions are often seen as good investments because they are frequently acquisition targets, which often result in a nice premium. That means the bank's book value is somewhere around $17.50 per share ($17.50 x 0.57 = ~$10) in this range. As part of the conversion, Eastern intends to give the Eastern Bank Charitable Foundation a 4% equity interest in Eastern Bankshares. The $12.3 billion-asset Eastern disclosed in a regulatory filing Thursday that it expects to raise $1.3 billion to $1.7 billion through an initial public offering that should take place later this year. Let's look at what we can expect from this IPO and whether it can be successful. Eastern turned a profit of more than $135 million in 2019 and has built up more than $1.6 billion in retained earnings. That means the bank's book value is somewhere around $17.50 per share ($17.50 x 0.57 = ~$10) in this range. Even if you are not a depositor, mutual banks are still typically good investments. 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. Mutual savings institutions are often seen as good investments because they are frequently acquisition targets, which often result in a nice premium. Eastern Bankshares, Inc. is registered with the U.S. Security and Exchange Commission and incorporated in the state of Massachusetts. 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. 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. Shares are expected to begin trading on October 15 under the ticker symbol ‘EBC’, the company said. While certainly exciting, acquisitions are more difficult to pull off than many realize, and the ends often don't justify the means. CEO Bob Rivers also told The Boston Business Journal that he thinks Eastern can become a $40-billion-asset bank over the next decade. 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. How you can save a million bucks for retirement. Eastern Bank Announces Plan For Conversion Into Public Company Conversion to Provide Additional Resources to Grow Customer Offerings, Accelerate New Business Opportunities & … 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. The bank plans to sell anywhere from roughly 175.4 million shares to more than 201 million shares of common stock in its IPO. While going through Eastern's prospectus, I came across this independent appraisal done for the bank. 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. 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. Eastern turned a profit of more than $135 million in 2019 and has built up more than $1.6 billion in retained earnings. Overview. The bank plans to sell anywhere from roughly 175.4 million shares to more than 201 million shares of common stock in its IPO. As a mutual bank, Eastern has a unique corporate structure in that it's technically owned by its depositors. Bram Berkowitz mainly writes in the financials bureau covering the banking sector. 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. 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. At this level, Eastern also trades at a price-to-earnings multiple of roughly 20. Another thing I like about Eastern is that unlike most small mutuals, this bank is actually strong when it comes to technology. As a mutual bank, Eastern has a unique corporate structure in that it's technically owned by its depositors. 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. Here’s how: Eastern’s foundation will get 4 percent of the IPO proceeds, estimated at $60 million. 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. The company financial products and services, personal and commercial banking, trade … The economy is currently struggling because of the pandemic, and rates could be low for a while, which hurts loan margins. Please make sure you've selected a ticker. 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. of IPO No more than 224,000,000 shares (35% of total issued shares after IPO) divided into 1. The latest information on initial public offerings (IPOs), including latest IPOs, expected IPOs, recent filings, and IPO performance from Nasdaq. The latest price was USD$17.92 (25 minute delay). 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. 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. Even if you are not a depositor, mutual banks are still typically good investments. 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." Eastern Bank Limited (EBL) is a commercial bank. Show full articles without "Continue Reading" button for {0} hours. According to its official history, Eastern Bank can trace its corporate roots back to 1818 and the foundation of Salem Savings Eastern is pricing its IPO at $10 per share, which is common for mutual IPO conversions. 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%. Eastern is pricing its IPO at $10 per share, which is common for mutual IPO conversions. 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. IPO Details Eastern is raising $1.8 billion in gross proceeds from an IPO of approximately 175 million shares of its common stock, sold at a price of $10.00 per share. During the day the price has varied from a low of USD$17.63 to a high of USD$18.27. Eastern Bankshares in Boston has its work cut out for it as it enters the new year. 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. Days after Eastern Bank … 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. But it does show the potential of the stock. Let's look at what we can expect from this IPO and whether it can be successful. Over- allotment shares (TBC) IPO Period n/a IPO Price: n/a While you never know, Eastern appears to be more of an acquirer than a target. The stock of Eastern BankShares, the holding company which owns Eastern Bank, jumped more than 20 percent in its first day of trading Thursday … 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. So these subscriptions are usually oversubscribed and typically open on the public markets higher than $10 per share. Eastern Bank nearly doubles the size of its charitable foundation after IPO Company has donated 4 percent of its newly issued shares, worth about … 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. CEO Bob Rivers also told The Boston Business Journal that he thinks Eastern can become a $40-billion-asset bank over the next decade. So these subscriptions are usually oversubscribed and typically open on the public markets higher than $10 per share. 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 has no position in any of the stocks mentioned. Microsoft and partners may be compensated if you purchase something through recommended links in this article. 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. The Motley Fool has no position in any of the stocks mentioned. Mutual banks are not start-ups -- in fact, they are the opposite. Eastern Bankshares, Inc. (EBC) Stock Price: $17.92 USD 0.04 (0.22%) Updated Mar 5, 2021 4:00 PM EST - Market closed. Eastern also hired a chief digital strategist in 2018 and has a fintech incubator at the bank. Eastern Bank Ltd. Eastern Bank Ltd. provides commercial and retail banking services. 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. Returns as of 03/12/2021. Veuer’s Sean Dowling has more. While going through Eastern's prospectus, I came across this independent appraisal done for the bank. The economy is currently struggling because of the pandemic, and rates could be low for a while, which hurts loan margins. Market data powered by FactSet and Web Financial Group. 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%. Prior to The Motley Fool, he wrote about and covered community and regional banks in New England for The Warren Group. Eastern Bank in Boston, the nation's oldest and second-largest mutual bank, is going public to prepare for a post-pandemic world. Financials. Eastern Bank is a bank based in Boston, Massachusetts. 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. documents---0.00091791152954102. 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. Before the pandemic hit, most of Eastern's competitors were trading well above book value. The more than 200-year-old bank, originally founded 1818, has filed plans notifying the U.S. Securities and Exchange Commission (SEC) of its plans for an initial public offering (IPO). Should you save for retirement or pay down debt? 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. Eastern Bank a.goodman@easternbank.com 781-598-7847 Paul Alexander Eastern Bank p.alexander@easternbank.com 781-596-4490 Investor contact: Jill Belliveau Eastern Bank InvestorRelations@easternbank.com Ford just unveiled its 2021 tech-savvy pickup — here's what's new, Amazon looking to get into the self-driving car business buys startup for $1B, Economic outlook as more Americans file for unemployment, 5 items you can sell for additional income, 5 practical reasons to put purchases on credit, Disney World workers petition to delay reopening of theme park, 500 Delta staff have tested positive for COVID-19 and 10 have died. 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. This doesn't mean Eastern will start trading at book value, especially right now while many banks are trading below it. Just because you’re working from home doesn’t mean your boss can’t keep tabs on your every move. This money can be used to absorb unexpected losses if need be. Additionally, the bank has a lot of capital built up. Eastern Bank announced today that Eastern Bankshares, Inc. (the “Company”), the proposed stock holding company of Eastern Bank, is commencing its stoc Americans rely on mail carriers to send and receive their mail. When does the company's lock-up period expire? Image source: 2018 Eastern Bank annual review. 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. 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. 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. Have you ever wondered how much these essential workers make? 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. 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. They are targeting an issuance of 175 million shares at $10, for an IPO of $1.75B (can be up or downsized). 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. Technology is going to be one of the most important aspects for banks, and having a culture that fosters technology and looks to innovate is important. Mutual banks are not start-ups -- in fact, they are the opposite. But it does show the potential of the stock. This money can be used to absorb unexpected losses if need be. 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. Before the pandemic hit, most of Eastern's competitors were trading well above book value. If you invested $1,000 in the Microsoft IPO in 1986, today it’d be worth $2,130,200 – that’s a total return of 212,920%, or 25% annualized returns every year for the past 34 years. Mutual savings institutions have a history of performing well, and Eastern has been around for more than two centuries. [3] With 95 branches, Eastern had a 3.2% market share in Massachusetts in 2016. 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. While certainly exciting, acquisitions are more difficult to pull off than many realize, and the ends often don't justify the means. Mutual savings institutions have a history of performing well, and Eastern has been around for more than two centuries. Eastern is pricing its IPO at $10 per share, which is common for mutual IPO conversions. At this level, Eastern also trades at a price-to-earnings multiple of roughly 20. 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." It opened the day at USD$18.12 after a previous close of USD$17.88. Statistics. Will list on the NASDAQ under ticker EBC. 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. 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 . 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. Eastern Bankshares' lock-up period expires on Tuesday, April 13th. Before de-mutualizing in 2020, it was the oldest and largest mutual bank in the United States and the largest community bank in Massachusetts. While you never know, Eastern appears to be more of an acquirer than a target. No. The Motley Fool has a disclosure policy. A mutual for its first 202 years, the $15.5 billion-asset company completed a $1.8 billion initial public offering in October that left it flush with cash — and possibilities. Furthermore, most of these mutual banks were not making complex derivative trades during the Great Recession, and are considered fairly safe. BOSTON, June 18, 2020 /PRNewswire/ -- Eastern Bank Corporation, the mutual holding company of Eastern Bank, today announced that its Board … The Company has six segments: Main operations (Onshore Banking), which deals with commercial banking … Eastern Bank, the U.S.'s largest mutual savings bank, plans to go public, the Boston-based firm announced Thursday. It developed the fintech company Numerated, which can approve some small-business loan applications in just minutes. Eastern Bankshares trades on the NASDAQ under the ticker symbol "EBC." 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. Eastern Bankshares, Inc (EBC) is a leading banks-regional business based in the US. 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. Technology is going to be one of the most important aspects for banks, and having a culture that fosters technology and looks to innovate is important.