This section is intended to assist in the understanding of the financial
performance of the Company and its subsidiaries through a discussion of our
financial condition at June 30, 2022, and our results of operations for the
three and six months ended June 30, 2022 and 2021. This section should be read
in conjunction with the unaudited interim condensed consolidated financial
statements and notes thereto of the Company appearing in Part I, Item 1 of this
Quarterly Report on Form 10-Q and the Company's 2021 Form 10-K.
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Forward-Looking Statements

When we use the terms "we," "us," "our," and the "Company," we mean Eastern Bankshares, Inc., a Massachusetts corporation, and its consolidated subsidiaries, taken as a whole, unless the context otherwise indicates.



Certain statements contained in this Quarterly Report on Form 10-Q that are not
historical facts may be considered forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and are
intended to be covered by the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. These statements, which are based on certain
current assumptions and describe our future plans, strategies and expectations,
can generally be identified by the use of the words "may," "will," "should,"
"could," "would," "plan," "potential," "estimate," "project," "believe,"
"intend," "anticipate," "expect," "target" and similar expressions.

Forward-looking statements are based on the current assumptions and beliefs of
management and are only expectations of future results. The Company's actual
results could differ materially from those projected in the forward-looking
statements as a result of, among others, factors:

•the negative impacts and disruptions of the COVID-19 pandemic and measures
taken to contain its spread on our employees, customers, business operations,
credit quality, financial position, liquidity and results of operations;

•the length and extent of the economic contraction as a result of the COVID-19
pandemic; continued deterioration in employment levels and other general
business and economic conditions on a national basis and in the local markets in
which the Company operates;

•changes in customer behavior;

•changes in regional, national or international macroeconomic conditions, including especially changes in inflation or interest rates in the United States;

•the possibility that future credit losses, loan defaults and charge-off rates are higher than expected due to changes in economic assumptions or adverse economic developments;

•turbulence in the capital and debt markets;

•decreases in the value of securities and other assets;

•decreases in deposit levels necessitating increased borrowing to fund loans and investments;

•competitive pressures from other financial institutions;

•operational risks including, but not limited to, cybersecurity incidents, fraud, natural disasters and future pandemics;

•changes in regulation and associated increases in compliance costs, as well as enforcement and litigation risk;

•reputational risks relating to the Company's participation in the PPP and other pandemic-related legislative and regulatory initiatives and programs;

•changes in accounting standards and practices;

•the risk that goodwill and intangibles recorded in our financial statements will become impaired;

•risks related to the implementation of acquisitions, dispositions, and restructurings, including the risk that acquisitions may not produce results at levels or within time frames originally anticipated;

•the risk that we may not be successful in the implementation of our business strategy;

•changes in assumptions used in making such forward-looking statements; and



•other risks and uncertainties detailed in Part I, Item 1A of our 2021 Form
10-K, as updated by Part II, Item 1A "Risk Factors" of the Quarterly Report on
Form 10-Q for the three months ended March 31, 2022 ("Q1 Form 10-Q"), as updated
by Part II, Item 1A "Risk Factors" of this Quarterly Report on Form 10-Q, and as
may be further updated in our filings with the SEC from time to time.

Forward-looking statements speak only as of the date on which they are made. The Company does not undertake any obligation to update any forward-looking statement to reflect circumstances or events that occur after the date the forward-looking statements are made.

Critical Accounting Policies and Estimates



Our discussion and analysis of our financial condition and results of operations
is based upon our condensed consolidated financial statements, which have been
prepared in accordance with GAAP. The preparation of these financial statements
requires us to make estimates, judgments and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of income
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and expenses during the reporting periods. On an ongoing basis, we evaluate our
estimates and assumptions. Our actual results could differ from these estimates.
Our significant accounting policies are discussed in detail in our 2021 Form
10-K, as updated by the notes to our unaudited interim condensed consolidated
financial statements accompanying this Quarterly Report on Form 10-Q. Effective
January 1, 2022, we adopted ASU 2016-13, or CECL, the accounting policy for
which is described in Note 2, "Summary of Significant Accounting Policies," Note
3, "Securities," and Note 4, "Loans and Allowance for Credit Losses" within the
Notes to the Consolidated Financial Statements included in Part I, Item 1 in
this Quarterly Report on Form 10-Q. There have been no other material changes in
critical accounting policies during the three and six months ended June 30,
2022.

Overview



We are a bank holding company, and our principal subsidiary, Eastern Bank, is a
Massachusetts-chartered bank that has served the banking needs of our customers
since 1818. Our business philosophy is to operate as a diversified financial
services enterprise providing a broad array of banking and other financial
services primarily to retail, commercial and small business customers. We had
total assets of $22.4 billion and $23.5 billion at June 30, 2022 and
December 31, 2021, respectively. We are subject to comprehensive regulation and
examination by the Massachusetts Commissioner of Banks, the FDIC, the Federal
Reserve Board and the Consumer Financial Protection Bureau.

We manage our business under two business segments: our banking business, which
contributed $155.8 million, or 86.7%, of our total income (pre-provision net
interest and dividend income and noninterest income) for the three months ended
June 30, 2022 and $302.0 million, or 85.2%, of our total income for the six
months ended June 30, 2022, and our insurance agency business, which contributed
$23.9 million, or 13.3%, of our total income for the three months ended June 30,
2022 and $52.3 million, or 14.8%, of our total income for the six months ended
June 30, 2022. Our banking business consists of a full range of banking, lending
(commercial, residential and consumer), savings and small business offerings,
including our wealth management and trust operations that we conduct through our
Eastern Wealth Management division. Our insurance agency business consists of
insurance-related activities, acting as an independent agent in offering
commercial, personal and employee benefits insurance products to individual and
commercial clients.

Net income for the three and six months ended June 30, 2022 computed in
accordance with GAAP was $51.2 million and $102.7 million, respectively, as
compared to $34.8 million and $82.5 million for the three and six months ended
June 30, 2021, respectively, representing increases of 47.0% and 24.5%,
respectively. These increases were primarily due to an increase in average
interest earning assets, which was primarily the result of our 2021 acquisition
of Century. Refer to the "Results of Operations" section below for additional
discussion. Net income for the three and six months ended June 30, 2022 and 2021
included items that our management considers non-core, which management excludes
for purposes of assessing our operating net income, a non-GAAP financial
measure. Operating net income for the three and six months ended June 30, 2022
was $52.5 million and $107.6 million, respectively, compared to operating net
income for the three and six months ended June 30, 2021 of $37.1 million and
$83.6 million, respectively, representing increases of 41.6% and 28.7%,
respectively. These increasess were largely driven by the aforementioned change
in average interest-earning assets. See "Non-GAAP Financial Measures" below for
a reconciliation of operating net income to GAAP net income.
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The following chart shows our basic earnings per share on a GAAP and operating
basis over the past five quarters (refer to the "Non-GAAP Financial Measures"
section below for a reconciliation of GAAP earnings to operating earnings):

                     [[Image Removed: ebc-20220630_g1.jpg]]

Earnings per share increased from $0.20 for the three months ended June 30, 2021
to $0.31 for the three months ended June 30, 2022, a 52.0% increase. Earnings
per share increased from $0.48 for the six months ended June 30, 2021 to $0.61
for the six months ended June 30, 2022, a 27.4% increase. These increases were
due to increases in net income and decreases in the average number of common
shares outstanding during each such period. The decreases in the average number
of common shares outstanding are attributable to share repurchases in connection
with our previously announced share repurchase program.
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The following chart shows our efficiency ratio on a GAAP and operating basis
over the past five quarters (refer to the "Non-GAAP Financial Measures" section
below for additional information on the determination of each measure):

                     [[Image Removed: ebc-20220630_g2.jpg]]

The GAAP efficiency and non-GAAP operating efficiency ratios for both the three
and six months ended June 30, 2022 decreased compared to the ratios for the
three and six months ended June 30, 2021. The decrease in the efficiency ratios
for such periods was primarily attributable to increased net interest income,
which resulted in a margin of increase in total revenue that exceeded the rate
at which interest expense increased for the same periods. Refer to the "Results
of Operations" section below for additional discussion of the changes in net
interest income, noninterest income and noninterest expense.

Banking Business



Our banking business offers a range of commercial, retail, wealth management and
banking services, and consists primarily of attracting deposits from the general
public, including municipalities, and investing those deposits, together with
borrowings and funds generated from operations, to originate loans in a variety
of sectors and to invest in securities. The financial condition and results of
operations of our banking business depend primarily on (i) attracting and
retaining low cost, stable deposits, (ii) using those deposits to originate and
acquire loans and earn net interest income and (iii) operating expenses
incurred.

Lending Activities

We use funds obtained from deposits, as well as funds obtained from the FHLBB advances and federal funds, primarily to originate loans and to invest in securities. Our lending focuses on the following categories of loans:

Commercial Lending



•Commercial and industrial: Loans in this category consist of revolving and term
loans extended to businesses and corporate enterprises for the purpose of
financing working capital, facilitating equipment purchases and facilitating
acquisitions. As of June 30, 2022 and December 31, 2021, we had total commercial
and industrial loans of $2.8 billion and $3.0 billion, representing 23.0% and
24.2%, respectively, of our total loans. The primary risk associated with
commercial and industrial loans is the ability of borrowers to achieve business
results consistent with those projected at origination. Our primary focus for
commercial and industrial loans is middle-market companies located in the
markets we serve. In addition, we participate in the syndicated loan market and
the SNC Program. As of June 30, 2022 and December 31, 2021, our SNC Program
portfolio
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totaled $447.0 million and $480.9 million, or 15.7% and 16.2%, respectively, of
our commercial and industrial portfolio, and 33.8% and 40.3%, respectively, of
our SNC Program portfolio were loans to borrowers headquartered in our primary
lending market. Our commercial and industrial portfolio also includes our Asset
Based Lending Portfolio ("ABL Portfolio"), a portion of our PPP loans, and
industrial revenue bonds ("IRBs"), the balances of which are detailed below:

•As of June 30, 2022 and December 31, 2021, our ABL Portfolio totaled $244.5
million and $224.8 million, or 8.6% and 7.6%, respectively, of our commercial
and industrial portfolio.

•As of June 30, 2022 and December 31, 2021, the amount of PPP loans included in
our commercial and industrial portfolio was $7.5 million and $112.8 million,
respectively.

•As of both June 30, 2022 and December 31, 2021, our commercial and industrial
IRB portfolio, which is comprised of municipal bonds issued to finance major
capital projects, totaled $1.0 billion.

•Commercial real estate: Loans in this category include mortgage loans on
commercial real estate, both investment and owner occupied. As of June 30, 2022
and December 31, 2021, we had total commercial real estate loans of $4.8 billion
and $4.5 billion, representing 38.7% and 36.9%, respectively, of our total
loans. As of June 30, 2022, and December 31, 2021, owner occupied loans totaled
$984.1 million and $958.5 million, representing 20.5% and 21.2%, respectively,
of our commercial real estate loans. In connection with our adoption of ASU
2016-13, we revised our methodology for determining owner occupied commercial
real estate loans in order to conform with our corresponding pools for CECL
reserve modeling purposes, and our totals as of June 30, 2022 reflect such
revision. Accordingly, the amount of our owner occupied commercial real estate
loans as of December 31, 2021 was also revised from the amount disclosed in our
2021 Form 10-K to accommodate comparability. Collateral values are established
by independent third-party appraisals and evaluations. The primary repayment
sources include operating income generated by the real estate, permanent debt
refinancing and/or the sale of the real estate. Our commercial real estate loan
portfolio also includes IRB loans of $588.1 million and $629.6 million as of
June 30, 2022 and December 31, 2021, respectively.

•Commercial construction: Loans in this category include construction project
financing and are comprised of commercial real estate, business banking and
residential loans for the purpose of constructing and developing real estate. As
of June 30, 2022 and December 31, 2021, we had total commercial construction
loans of $303.5 million and $222.3 million, representing 2.5% and 1.8%,
respectively, of our total loans.

•Business banking: Loans in this category are comprised of loans to small
businesses with exposures of under $1 million and small investment real estate
projects with exposures of under $3 million. These loans are separate and
distinct from our commercial and industrial and commercial real estate
portfolios described above due to the size of the loans. As of June 30, 2022 and
December 31, 2021, we had total business banking loans of $1.1 billion and
$1.3 billion, respectively, representing 9.1% and 10.9% of our total loans for
each period end, respectively. In this category, commercial and industrial loans
and commercial real estate loans totaled $244.0 million and $882.8 million,
respectively, as of June 30, 2022, and $440.6 million and $894.1 million,
respectively, as of December 31, 2021.

Business banking originations include traditionally underwritten loans as well
as partially automated scored loans. Our proprietary decision matrix, which
includes a number of quantitative factors including, but not limited to, a
guarantor's credit score, industry risk, and time in business, is used to
determine whether to make business banking loans. We also engage in SBA lending.
SBA guarantees reduce our risk of loss when default occurs and are considered a
credit enhancement to the loan structure.

Our business banking portfolio also includes a portion of our PPP loans which
are included in the aforementioned commercial and industrial business banking
total. As of June 30, 2022 and December 31, 2021, the amount of PPP loans
included in our business banking portfolio was $35.0 million and $218.6 million,
respectively.

Residential Lending

•Residential real estate: Loans in this category consist of mortgage loans on
residential real estate. As of June 30, 2022 and December 31, 2021, we had total
residential loans of $2.0 billion and $1.9 billion, respectively, representing
16.1% and 15.7%, respectively, of our total loans. Underwriting considerations
include, among others, income sources and their reliability, willingness to
repay as evidenced by credit
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repayment history, financial resources including cash reserves and the value of
the collateral. We maintain policy standards for minimum credit scores and cash
reserves and maximum loan to value consistent with a "prime" portfolio.
Collateral consists of mortgage liens on residential dwellings. We do not
originate or purchase sub-prime or other high-risk loans. Residential loans are
originated either for sale to investors or to retain in our loan portfolio.
Decisions about whether to sell or retain residential loans are made based on
the interest rate characteristics, pricing for loans in the secondary mortgage
market, competitive factors and our capital needs. During the three and six
months ended June 30, 2022, residential real estate mortgage originations were
$159.4 million and $277.7 million, respectively, of which $15.8 million and
$45.1 million, respectively, were sold on the secondary markets. Comparatively,
during the three and six months ended June 30, 2021, residential real estate
mortgage originations were $236.5 million and $496.6 million, respectively, of
which $46.1 million and $103.3 million, respectively, were sold on the secondary
markets. We generally do not continue to service residential loans that we sell
in the secondary market.

Consumer Lending

•Consumer home equity: Loans in this category consist of home equity lines of
credit and home equity loans. As of both June 30, 2022 and December 31, 2021, we
had total consumer home equity loans of $1.1 billion, representing 9.3% and
9.0%, respectively, of our total loans. Home equity lines of credit are granted
for ten years with monthly interest-only repayment requirements. Full principal
repayment is required at the end of the ten-year draw period. Home equity lines
of credit can be converted to term loans that are fully amortized. Underwriting
considerations are materially consistent with those utilized in the residential
real estate category. Collateral consists of a senior or subordinate lien on
owner-occupied residential property.

•Other consumer: Loans in this category consist of unsecured personal lines of
credit, overdraft protection, automobile and aircraft loans, home improvement
loans and other personal loans. As of June 30, 2022 and December 31, 2021, we
had total other consumer loans of $198.3 million and $214.5 million,
representing 1.6% and 1.8%, respectively, of our total loans. Our policy and
underwriting in this category include the following factors, among others:
income sources and reliability, credit histories, term of repayment and
collateral value, as applicable.

Other Banking Products and Services



In addition to our lending activities, which are the core part of our banking
business, we offer other banking products and services primarily related to
(i) other commercial banking products, (ii) other consumer deposit products and
(iii) wealth management services.

Other Commercial Banking Products



•We offer a variety of deposit, treasury management, electronic banking,
interest rate protection and foreign exchange products to our customers. In
addition, we offer cash management services to our corporate and municipal
clients. Deposit products include checking products, both interest-bearing and
noninterest-bearing, as well as money market deposits, savings deposits and
certificates of deposits. Our treasury management products include a variety of
cash management and payment products. Our interest rate protection and foreign
exchange products include interest rate swaps and currency related transactions.
As of June 30, 2022 and December 31, 2021, our total commercial deposits were
$7.6 billion and $8.1 billion, respectively. During the three and six months
ended June 30, 2022 our commercial noninterest income was $5.8 million and $11.6
million, respectively, compared to $4.1 million and $8.3 million for the three
and six months ended June 30, 2021, respectively.

Other Consumer Deposit Products

•We offer a wide variety of deposit products and services to our consumer customers. We service these customers through our 98 branches located in eastern Massachusetts and New Hampshire, through our call center in our facility in Lynn, MA and through our online and mobile banking applications.

Wealth Management Services


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•Through our Eastern Wealth Management division, we provide a wide range of
trust services, including (i) managing customer investments, (ii) serving as
custodian for customer assets, and (iii) providing other fiduciary services,
including serving as the trustee and personal representative of estates. As of
June 30, 2022 and December 31, 2021, we held $2.8 billion and $3.4 billion,
respectively, of assets in a fiduciary, custodial or agency capacity for
customers, which are not our assets and therefore not included on the
consolidated balance sheets included in this Quarterly Report on Form 10-Q. For
the three and six months ended June 30, 2022, we had noninterest income of $6.0
million and $12.1 million, respectively, from providing these services compared
to $6.1 million and $11.7 million for the three and six months ended June 30,
2021, respectively.

Insurance Agency Business

Our insurance agency business consists of insurance-related activities such as
acting as an independent agent in offering commercial, personal and employee
benefits insurance products to individual and commercial clients through our
wholly-owned agency, Eastern Insurance Group. Our insurance products include
commercial property and liability, workers compensation, life, accident and
health and automobile insurance. We also offer a wide range of employee benefits
products and services, including professional advice related to health care cost
management, employee engagement and executive services. As an agency business,
we do not assume any underwriting or insurance risk. The commissions we earn on
the sale of these insurance products and services is the most significant
portion of our noninterest income, representing $24.7 million and $53.4 million,
respectively, or 58.9% and 60.5%, respectively of our noninterest income during
the three and six months ended June 30, 2022. Comparatively, during the three
and six months ended June 30, 2021, such income represented $23.7 million and
$51.8 million, respectively, or 51.7% and 51.3%, respectively, of our
noninterest income. Our insurance business operates through 22 non-branch
offices located primarily in eastern Massachusetts and had 401 full-time
equivalent employees as of June 30, 2022.

Acquisitions



During the six months ended June 30, 2022, Eastern Insurance Group completed one
insurance agency acquisition. The purchase price and goodwill recorded as a
result of the acquisition were not material. There were no acquisitions during
the three months ended June 30, 2022.

Outlook and Trends

Interest Rates



We expect additional increases in the federal funds rate in 2022 which is
anticipated to be beneficial to our net interest income and net interest margin.
The Federal Open Market Committee (the "FOMC") voted to increase rates multiple
times thus far in 2022, which is detailed as follows:

•On March 16, 2022, the FOMC voted to increase interest rates by 25 basis points to a range of 0.25% to 0.50%.

•On May 4, 2022, the FOMC voted to increase interest rates by 50 basis points to a range of 0.75% to 1.00%.

•On June 15, 2022, the FOMC voted to increase interest rates by 75 basis points to a range of 1.50% to 1.75%.



•On July 27, 2022, the FOMC voted to increase interest rates by 75 basis points
to a range of 2.25% to 2.50% and stated that it anticipates that ongoing rate
increases will be appropriate.

Approximately 40% of our loans are indexed to a market rate that is expected to
reprice along with the federal funds rate. As rates have risen and the shape of
the yield curve has changed during the first and second quarters of 2022, a
portion of these loans have been hedged using interest rate swaps to convert the
floating rate interest receipts to a fixed rate. For more detail regarding such
hedging financial instruments, refer to Note 13, "Derivative Financial
Instruments" within the Notes to the Consolidated Financial Statements included
in Part I, Item 1 in this Quarterly Report on Form 10-Q. Management expects to
continue to evaluate the scope of our hedging program in order to manage
interest rate risk exposure to lower rate scenarios. Refer to the section titled
"Management of Market Risk" within this Item 2 for additional discussion
including the estimated change to our net interest income which assumes a
variety of immediate and parallel changes in interest rates.

Paycheck Protection Program Loans



We are a participating lender in the SBA's Paycheck Protection Program, or PPP.
We concluded PPP loan originations in the second quarter of 2021 as the SBA
announced in May 2021 that PPP funds were exhausted. The majority of our PPP
borrowers are existing commercial and small business borrowers, non-profit
customers, retail banking customers and
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clients of our Eastern Wealth Management division and Eastern Insurance Group.
As of June 30, 2022 and December 31, 2021, the remaining balance of our PPP
loans was $42.5 million and $331.4 million, respectively. Net PPP loan fee
accretion (fee accretion less cost amortization) for all PPP loans for the three
and six months ended June 30, 2022 was $2.5 million and $8.3 million,
respectively. Net PPP loan fee accretion (fee accretion less cost amortization)
for all PPP loans for the three and six months ended June 30, 2021 was $9.3
million and $17.6 million, respectively. We expect to recognize the remaining
net unearned fees of $0.9 million as of June 30, 2022 during the remainder of
the year ended December 31, 2022 resulting in total recognized net fee accretion
of $9.2 million for the year ended December 31, 2022 compared to $34.3 million
recognized during the year ended December 31, 2021. Our net interest margin is
expected to be adversely affected as a result of the decline in net fee
accretion, which is associated with the decreased volume of PPP loan payoffs.
The impact to our net interest margin resulting from the decline in net PPP loan
fee accretion is estimated to be 0.25% (change computed based upon average total
loans for the year ended December 31, 2021).

Non-GAAP Financial Measures



We present certain non-GAAP financial measures, which management uses to
evaluate our performance and which exclude the effects of certain transactions,
non-cash items and GAAP adjustments that we believe are unrelated to our core
business and are therefore not necessarily indicative of our current performance
or financial position. Management believes excluding these items facilitates
greater visibility for investors into our core businesses as well as underlying
trends that may, to some extent, be obscured by inclusion of such items in the
corresponding GAAP financial measures.

There are items in our financial statements that impact our results but which we
believe are unrelated to our core business. Accordingly, we present operating
net income, noninterest income on an operating basis, noninterest expense on an
operating basis, total operating revenue, operating earnings per share,
operating net income to average tangible shareholders's equity, tangible book
value per share and the operating efficiency ratio, each of which excludes the
impact of such items because we believe such exclusion can provide greater
visibility into our core business and underlying trends. Such items that we do
not consider to be core to our business include (i) income and expenses from
investments held in rabbi trusts, (ii) gains and losses on sales of securities
available for sale, net, (iii) gains and losses on the sale of other assets,
(iv) rabbi trust employee benefits, (v) impairment charges on tax credit
investments and associated tax credit benefits, (vi) expenses indirectly
associated with our initial public offering ("IPO"), (vii) OREO gains and
losses, (viii) merger and acquisition expenses, (ix) the stock donation to the
Eastern Bank Foundation (the "Foundation") in connection with our
mutual-to-stock conversion and IPO, and (x) settlement of putative consumer
class action litigation matters related to overdraft and non-sufficient funds
fees, and associated settlement expenses. There were no expenses indirectly
associated with our IPO, OREO gains or stock donations to the Foundation during
the periods presented in this Quarterly Report on Form 10-Q.

We also present tangible shareholders' equity, tangible assets, the ratio of
tangible shareholders' equity to tangible assets, average tangible shareholders'
equity, the ratios of net income and operating net income to average tangible
shareholders' equity and tangible book value per share, each of which excludes
the impact of goodwill and other intangible assets, as we believe these
financial measures provide investors with the ability to further assess our
performance, identify trends in our core business and provide a comparison of
our capital adequacy to other companies. We have included the tangible ratios
because management believes that investors may find it useful to have access to
the same analytical tools used by management to assess performance and identify
trends.

Our non-GAAP financial measures should not be considered as an alternative or
substitute to GAAP net income, or as an indication of our cash flows from
operating activities, a measure of our liquidity or an indication of funds
available for our cash needs. An item which we consider to be non-core and
exclude when computing these non-GAAP financial measures can be of substantial
importance to our results for any particular period. In addition, our
methodology for calculating non-GAAP financial measures may differ from the
methodologies employed by other companies to calculate the same or similar
performance measures and, accordingly, our reported non-GAAP financial measures
may not be comparable to the same or similar performance measures reported by
other companies.
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The following table summarizes the impact of non-core items recorded for the
time periods indicated below and reconciles them to the most directly comparable
GAAP financial measure:

                                                    Three Months Ended June 30,                    Six Months Ended June 30,
                                                    2022                   2021                   2022                   2021
                                                                  (Dollars in thousands, except per share data)
Net income (GAAP)                             $       51,172          $     34,809          $      102,688          $     82,472
Non-GAAP adjustments:
Add:
Noninterest income components:
Loss (income) from investments held in rabbi
trusts                                                 7,316                (4,216)                 11,749                (6,062)
Losses (gains) on sales of securities
available for sale, net                                  104                    (1)                  2,276                (1,165)
Gains on sales of other assets                        (1,251)                  (29)                   (977)                  (47)
Noninterest expense components:
Rabbi trust employee benefit (income) expense         (3,310)                2,063                  (5,397)                3,049
Impairment reversal on tax credit investments              -                (1,419)                      -                (1,419)
Merger and acquisition expenses                            -                 3,479                      34                 4,068
Settlement and expenses for putative consumer
class action matters                                       -                 3,325                       -                 3,325
Total impact of non-GAAP adjustments                   2,859                 3,202                   7,685                 1,749
Less net tax benefit associated with non-GAAP
adjustment (1)                                         1,513                   914                   2,748                   587
Non-GAAP adjustments, net of tax              $        1,346          $

2,288 $ 4,937 $ 1,162 Operating net income (non-GAAP)

$       52,518          $

37,097 $ 107,625 $ 83,634



Weighted average common shares outstanding
during the period:
Basic                                               166,533,920           172,173,707             168,184,528           172,111,372
Diluted                                             166,573,627           172,173,707             168,248,246           172,111,372

Earnings per share, basic                     $         0.31          $

0.20 $ 0.61 $ 0.48 Earnings per share, diluted

                   $         0.31          $

0.20 $ 0.61 $ 0.48



Operating earnings per share, basic
(non-GAAP)                                    $         0.32          $

0.22 $ 0.64 $ 0.49 Operating earnings per share, diluted (non-GAAP)

                                    $         0.32          $

0.22 $ 0.64 $ 0.49




(1)The net tax benefit associated with these items is determined by assessing
whether each item is included or excluded from net taxable income and applying
our combined statutory tax rate only to those items included in net taxable
income. The net tax benefit amount for the 2022 periods reflects the impact of
the reversal of the remaining $0.7 million of a $12.0 million valuation
allowance ("EBF Valuation Allowance") established in 2020 associated with the
2020 stock donation to the Foundation. The reversal of the valuation allowance
during the three months ended June 30, 2022 was considered appropriate based
upon our determination of the realizability of such deductions for tax purposes
as of June 30, 2022. The initial $11.3 million reversal of the EBF Valuation
Allowance occurred in 2021.
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The following table summarizes the impact of non-core items with respect to our total revenue, noninterest income, noninterest expense, and the efficiency ratio, which reconciles to the most directly comparable respective GAAP financial measure, for the periods indicated:



                                                   Three Months Ended June 30,                   Six Months Ended June 30,
                                                     2022                  2021                 2022                     2021
                                                                             (Dollars in thousands)
Net interest income (GAAP)                     $     137,757           $ 104,608          $    265,881               $ 204,699
Add:
Tax-equivalent adjustment (non-GAAP)                   3,023               1,269                 5,284                   2,566
Fully-taxable equivalent net interest income
(non-GAAP)                                           140,780             105,877               271,165                 207,265
Noninterest income (GAAP)                             41,877              45,733                88,292                 100,945

Less:


(Loss) income from investments held in rabbi
trusts                                                (7,316)              4,216               (11,749)                  6,062
(Losses) gains on sales of securities
available for sale, net                                 (104)                  1                (2,276)                  1,165
Gains on sales of other assets                         1,251                  29                   977                      47
Noninterest income on an operating basis
(non-GAAP)                                            48,046              41,487               101,340                  93,671
Noninterest expense (GAAP)                     $     111,139           $ 107,335          $    220,005               $ 201,384
Less:
Rabbi trust (income) benefit expense                  (3,310)              2,063                (5,397)                  3,049
Impairment reversal on tax credit investments              -              (1,419)                    -                  (1,419)
Merger and acquisition expenses                            -               3,479                    34                   4,068
Settlement and expenses for putative consumer
class action matters                                       -               3,325                     -                   3,325
Noninterest expense on an operating basis
(non- GAAP)                                    $     114,449           $  99,887          $    225,368               $ 192,361
Total revenue (GAAP)                           $     179,634           $ 150,341          $    354,173               $ 305,644
Total operating revenue (non-GAAP)             $     188,826           $ 147,364          $    372,505               $ 300,936

Ratios:


Efficiency ratio (GAAP)                                61.87   %           71.39  %              62.12   %               65.89  %
Operating efficiency ratio (non-GAAP)                  60.61   %           67.78  %              60.50   %               63.92  %


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The following table summarizes the calculation of our tangible shareholders'
equity, tangible assets, the ratio of tangible shareholders' equity to tangible
assets, and tangible book value per share, which reconciles to the most directly
comparable respective GAAP measure, as of the dates indicated:

                                                                   As of June 30,            As of December 31,
                                                                        2022                        2021
                                                                 (Dollars in thousands, except per share data)
Tangible shareholders' equity:
Total shareholders' equity (GAAP)                              $        2,718,396           $        3,406,352
Less: Goodwill and other intangibles                                      653,853                      649,703
Tangible shareholders' equity (non-GAAP)                                2,064,543                    2,756,649
Tangible assets:
Total assets (GAAP)                                                    22,350,848                   23,512,128
Less: Goodwill and other intangibles                                      653,853                      649,703
Tangible assets (non-GAAP)                                     $       21,696,995           $       22,862,425
Shareholders' equity to assets ratio (GAAP)                                  12.2   %                     14.5  %

Tangible shareholders' equity to tangible assets ratio (non-GAAP)

                                                                    9.5   %                     12.1  %
Book value per share:
Common shares issued and outstanding                                      179,253,801                 186,305,332
Book value per share (GAAP)                                    $            15.17           $            18.28
Tangible book value per share (non-GAAP)                       $            11.52           $            14.80


The following table summarizes the calculation of our average tangible
shareholders' equity and ratio of net income and operating net income to average
tangible shareholders' equity ("operating return on average tangible
shareholders' equity"), which reconciles to the most directly comparable GAAP
measure, for the periods indicated:

                                                Three Months Ended June 30,                  Six Months Ended June 30,
                                                 2022                   2021                 2022                  2021
                                                                        (Dollars in thousands)
Net income (GAAP)                          $       51,172          $    34,809          $    102,688          $    82,472
Operating net income (non-GAAP) (1)                52,518               37,097               107,625               83,634
Average tangible shareholders' equity:
Average total shareholders' equity (GAAP)  $    2,865,799          $ 3,406,497          $  3,068,497          $ 3,411,982
Less: Average goodwill and other
intangibles                                       654,444              379,044               651,984              377,699
Average tangible shareholders' equity
(non-GAAP)                                      2,211,355            3,027,453             2,416,513            3,034,283

Ratios:


Return on average total shareholders'
equity (GAAP) (2)                                    7.16  %              4.10  %               6.75  %              4.87  %
Return on average tangible shareholders'
equity (non-GAAP) (2)                                9.28  %              4.61  %               8.57  %              5.48  %
Operating return on average tangible
shareholders' equity (non-GAAP) (2)                  9.53  %              4.91  %               8.98  %              5.56  %

(1)Refer to the table above within this "Non-GAAP Financial Measures" section for a reconciliation of operating net income to net income.

(2)Presented on an annualized basis.


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