Eastern Bankshares (NASDAQ:EBC) stock tumbled 13.3% to an over two-year low on Friday as the bank reported disappointing Q4 results, hurt by higher interest expense, and provided downbeat guidance for the year.

The company projected further declines in NIM during 2023 till funding costs stabilize. It expects commercial loan growth to be in the low single digits in 2023 due to higher interest rates and liquidity.

The bank plans to wait for liquidity conditions to improve significantly before considering stock buybacks at the pace of early 2022.

Q4 adj. EPS was $0.31 vs. $0.26 in Q4 2021, while revenue dipped 0.6% Y/Y to $194.5M.

Net interest income was $150M, down 1% from Q3 due to higher interest expense, but rose 22.5% Y/Y. Net interest margin on FTE basis was 2.81%, down 6 bps sequentially.

Total loans increased 5% sequentially to $13.6B, driven by strong loan growth in all major categories. Provision for loan losses totaled $10.9M, of which $7.2M was due to loan growth. Non-performing loans totaled $38.6M at December 31 vs. $34M at the end of Q3.

More than 1.5M shares changed hands as of 11.22 am ET vs. average trading volume of 636.3K.

SA Quant is of the view that Eastern (EBC) is at high risk of performing badly.