Eastern Bankshares Draws $116 Million Allocation as Profits Hit $106 Million
Key Points
Florida-based HoldCo Asset Management bought 1.2 million shares of EBC in the third quarter.
The value of the position increased by about $36.79 million from the previous quarter.
As of September 30, HoldCo reported holding 6.41 million shares of EBC valued at $116.32 million, making it the fund's fourth-largest position.
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On November 13, Florida-based HoldCo Asset Management disclosed a buy of 1.2 million shares of Eastern Bankshares (NASDAQ:EBC), increasing its position by approximately $36.79 million.
What Happened
According to a filing with the Securities and Exchange Commission (SEC) dated November 13, HoldCo Asset Management increased its stake in Eastern Bankshares (NASDAQ:EBC) by acquiring 1.2 million additional shares in the third quarter. The value of the EBC position rose to $116.32 million at quarter-end, positioning it as the fund’s fourth-largest equity holding.
What Else to Know
EBC represented about 12.28% of HoldCo’s 13F AUM as of September 30.
Top holdings after the filing:
- NYSE: CMA: $156.94 million (16.6% of AUM)
- NASDAQ: COLB: $147.30 million (15.5% of AUM)
- NASDAQ: FIBK: $125.89 million (13.3% of AUM)
- NASDAQ: EBC: $116.32 million (12.3% of AUM)
- NYSE: CFG: $110.91 million (11.7% of AUM)
As of Thursday, EBC shares were priced at $18.43, up about 7% over the past year and well outperforming the S&P 500, which is instead up about 16%.
Company Overview
| Metric | Value |
|---|---|
| Price (as of Thursday) | $18.43 |
| Market capitalization | $4.15 billion |
| Revenue (TTM) | $651.22 million |
| Net income (TTM) | $49.48 million |
Company Snapshot
- Eastern Bankshares offers a comprehensive suite of retail, commercial, and small business banking products, including deposits, lending, cash management, insurance, and wealth management services.
- The company generates revenue primarily through interest income on loans and deposits, as well as fee-based income from insurance, investment, and trust services.
- It serves retail customers, small businesses, and commercial clients, with a strong presence in eastern Massachusetts and southern New Hampshire.
Eastern Bankshares is a regional financial institution with a diversified product set spanning traditional banking, insurance, and wealth management. The company leverages its longstanding regional presence and multi-channel distribution to serve both consumer and business clients. Its scale and breadth of services position it competitively within the New England regional banking market.
Foolish Take
Eastern Bankshares stock surged in the third quarter as earnings momentum improved after a volatile first half of the year. Stepping in during that upswing suggests confidence that the fundamentals are doing more than just riding rate cycles.
The latest quarter helps explain why. Eastern posted net income of $106.1 million, or $0.53 per diluted share (up 6%), while operating earnings came in at $0.37. Meanwhile, loan growth remained steady, up 1.3% quarter over quarter, driven by commercial lending, while wealth management assets hit a record $9.2 billion. In the earnings release, CEO Denis Sheahan touted the bank as a “dense and geographically compact franchise with the scale to compete with larger banks.”
Finally, it’s important to note that this portfolio leans heavily toward other regional banks and financials, with similarly sized allocations to Comerica, Columbia Banking System, and Fifth Third. That makes this less a one-off bet and more a thematic view that select banks can compound value despite sector volatility.
Glossary
Asset management: The professional management of investments on behalf of clients or institutions.
Buy (in fund context): An institutional purchase of additional shares, increasing the fund's ownership in a company.
Position: The amount of a particular security or asset held by an investor or fund.
Reportable U.S. equity assets under management (AUM): The total value of U.S. stocks a fund manages and must disclose in regulatory filings.
13F AUM: The value of assets reported by institutional investment managers in quarterly SEC Form 13F filings.
Holding: A specific asset or security owned within a fund or portfolio.
Quarter (financial): A three-month period used by companies for financial reporting and performance measurement.
Stake (in company): The ownership interest an investor or fund has in a company, usually measured by shares held.
Market close: The end of the regular trading session for a stock exchange on a given day.
Fee-based income: Revenue earned from providing services, such as investment or insurance advice, rather than from interest.
Multi-channel distribution: Using multiple methods, such as branches, online, and mobile, to deliver products and services to customers.
TTM: The 12-month period ending with the most recent quarterly report.
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Jonathan Ponciano has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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