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Meridian Interstate Bancorp, Inc.$18.03$.452.56%

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 Meridian Bancorp, Inc. Reports Record First Quarter Net Income; Rise in Total Deposits to $5 Billion on Growth in Core Deposits
   Tuesday, April 23, 2019 4:05:00 PM ET

BOSTON, April 23, 2019 (GLOBE NEWSWIRE) -- Meridian Bancorp, Inc. (the “Company” or “Meridian”) (NASDAQ: EBSB), the holding company for East Boston Savings Bank (the “Bank”), announced net income of $15.1 million, or $0.29 per diluted share, for the quarter ended March 31, 2019, up from $12.4 million, or $0.24 per diluted share, for the quarter ended December 31, 2018 and $12.0 million, or $0.23 per diluted share, for the quarter ended March 31, 2018. The Company’s return on average assets was 0.97% for the quarter ended March 31, 2019, up from 0.83% for the quarter ended December 31, 2018 and 0.90% for the quarter ended March 31, 2018. The Company’s return on average equity was 8.84% for the quarter ended March 31, 2019, up from 7.28% for the quarter ended December 31, 2018 and 7.35% for the quarter ended March 31, 2018

Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, “I am pleased to report record first quarter net income of $15.1 million for 2019, up $3.1 million, or 26%, from the prior first quarter record set in 2018, and up $2.7 million, or 22%, from the fourth quarter of 2018. Following our growth records in the fourth quarter of 2018, we grew at a more moderate pace in the first quarter of 2019, with net loan growth of $115 million, or 2%, to $5.7 billion, while we reached the $5 billion milestone in total deposits with growth of $139 million, or 3%. We were especially gratified to see growth in core deposits of $160 million, or 5%, during the first quarter and $577 million, or 21%, over the past year to $3.4 billion at March 31, 2019 as we have expanded our Boston area retail banking network to 38 branches.”

The Company’s net interest income was $42.6 million for the quarter ended March 31, 2019, up $424,000, or 1.0%, from the quarter ended December 31, 2018 and $2.7 million, or 6.9%, from the quarter ended March 31, 2018. The interest rate spread and net interest margin on a tax-equivalent basis were 2.57% and 2.89%, respectively, for the quarter ended March 31, 2019 compared to 2.62% and 2.93%, respectively, for the quarter ended December 31, 2018 and 2.92% and 3.16%, respectively, for the quarter ended March 31, 2018. The increases in net interest income were primarily due to growth in average loan balances and yields on interest-earning assets, partially offset by increases in the average balances of total deposits and borrowings and the cost of funds for the quarter ended March 31, 2019 compared to the respective prior periods.

Total interest and dividend income increased to $64.5 million for the quarter ended March 31, 2019, up $2.8 million, or 4.5%, from the quarter ended December 31, 2018 and $12.5 million, or 24.0%, from the quarter ended March 31, 2018, primarily due to growth in the Company’s average loan balances to $5.695 billion. The Company’s yield on loans on a tax-equivalent basis was 4.44% for the quarter ended March 31, 2019, up five basis points from the quarter ended December 31, 2018 and up 15 basis points from the quarter ended March 31, 2018. The Company’s yield on interest-earning assets on a tax-equivalent basis was 4.34% for the quarter ended March 31, 2019, up eight basis points from the quarter ended December 31, 2018 and up 23 basis points from the quarter ended March 31, 2018.

Total interest expense increased to $21.9 million for the quarter ended March 31, 2019, up $2.3 million, or 12.0%, from the quarter ended December 31, 2018 and $9.7 million, or 80.0%, from the quarter ended March 31, 2018. Interest expense on deposits increased to $19.2 million for the quarter ended March 31, 2019, up $2.1 million, or 12.1%, from the quarter ended December 31, 2018 and $8.6 million, or 82.2%, from the quarter ended March 31, 2018 primarily due to growth in average total deposits to $4.914 billion and increases in the cost of average total deposits to 1.58% from 1.46% for the quarter ended December 31, 2018, and 1.04% for the quarter ended March 31, 2018. Interest expense on borrowings increased to $2.7 million for the quarter ended March 31, 2019, up $276,000, or 11.3%, from the quarter ended December 31, 2018 and $1.1 million, or 66.0%, from the quarter ended March 31, 2018 primarily due to increases in the average cost of borrowings to 1.91% from 1.67% for the quarter ended December 31, 2018, and 1.28% for the quarter ended March 31, 2018. The Company’s total cost of funds was 1.62% for the quarter ended March 31, 2019, up 13 basis points from the quarter ended December 31, 2018 and 56 basis points from the quarter ended March 31, 2018.

Mr. Gavegnano noted, “Our net interest income continues to rise on the strength of our recent organic loan and deposit growth. Since the end of 2015, our net loans have grown $2.7 billion for a compounded annual growth rate of 21%, while total deposits grew $2.3 billion for a compounded annual growth rate of 20%. Our yields on loans and other interest-earning assets have also steadily risen over the past year, minimizing the effect of the rise in our cost of funds on our net interest margin, which declined only four basis points to 2.89% for the first quarter of 2019 from the fourth quarter of 2018. We experienced a reversal of the margin compression within the first quarter and we believe there is significant potential for the margin to expand as the year goes on.”

The Company's provision for loan losses was $843,000 for the quarter ended March 31, 2019, down $2.7 million from the quarter ended December 31, 2018 and $1.3 million from the quarter ended March 31, 2018. The allowance for loan losses was $54.0 million or 0.94% of total loans at March 31, 2019, compared to $53.2 million or 0.94% of total loans at December 31, 2018, and $47.5 million or 0.96% of total loans at March 31, 2018. The changes in the allowance for loan losses coverage ratio were based on management’s assessment of loan portfolio growth and composition changes, declines in historical charge-off trends, reduced levels of problem loans and other improvements in asset quality trends.

Net charge-offs totaled $77,000 for the quarter ended March 31, 2019 compared to net recoveries of $59,000 for the quarter ended December 31, 2018 and net recoveries of $114,000 for the quarter ended March 31, 2018.

Non-accrual loans were $7.5 million, or 0.13% of total loans outstanding, at March 31, 2019; up $638,000, or 9.2%, from December 31, 2018; and down $487,000, or 6.1%, from March 31, 2018. Non-performing assets were $7.5 million, or 0.12% of total assets, at March 31, 2019, compared to $6.9 million, or 0.11% of total assets, at December 31, 2018, and $8.0 million, or 0.15% of total assets, at March 31, 2018.

Non-interest income was $3.8 million for the quarter ended March 31, 2019, up from $135,000 for the quarter ended December 31, 2018 and $2.3 million for the quarter ended March 31, 2018. Non-interest income increased $3.7 million compared to the quarter ended December 31, 2018, primarily due to a $1.3 million gain on marketable equity securities, net, reflecting increases in market valuations in the first quarter of 2019 compared to a $2.7 million loss on marketable equity securities, net, in the fourth quarter of 2018. Compared to the quarter ended March 31, 2018, non-interest income increased $1.5 million, or 64.1%, primarily due to a $1.3 million gain on marketable equity securities, net, in the first quarter of 2019 compared to a $537,000 loss on marketable equity securities, net, in the first quarter of 2018.

Non-interest expenses were $25.8 million, or 1.66% of average assets for the quarter ended March 31, 2019, compared to $23.6 million, or 1.59% of average assets for the quarter ended December 31, 2018 and $24.7 million, or 1.86% of average assets for the quarter ended March 31, 2018.  Non-interest expenses increased $2.2 million, or 9.1%, compared to the quarter ended December 31, 2018, due primarily to increases of $984,000 in salaries and employee benefits, $436,000 in deposit insurance and $382,000 in occupancy and equipment. Non-interest expenses increased $1.1 million, or 4.5%, compared to the quarter ended March 31, 2018, due primarily to increases of $287,000 in data processing, $238,000 in salaries and employee benefits, and $215,000 in deposit insurance.  The increases in salaries and employee benefits expenses reflect annual increases in employee compensation, payroll taxes and employee benefits during the first quarter of 2019.  In addition, the increases in salaries and employee benefits, occupancy and equipment expenses and data processing include costs associated with the expansion of our branch network, including one new branch that opened late in the first quarter of 2018, and three new branch openings in the fourth quarter of 2018. The Company’s efficiency ratio was 57.20% for the quarter ended March 31, 2019 compared to 52.52% for the quarter ended December 31, 2018 and 57.62% for the quarter ended March 31, 2018.

Mr. Gavegnano added, “Our non-interest expenses increased only 4% for the first quarter of 2019 from the first quarter of 2018 despite the expansion of our branch network, with an increase of 9% compared to the fourth quarter reflecting annual increases to employee compensation and benefits and the seasonal nature of certain occupancy expenses. As a result, our efficiency ratio for the first quarter of 2019 improved slightly to 57.2% from 57.6% for the first quarter of 2018, with an increase from 52.5% for the fourth quarter of 2018. As we move forward with plans to open two new branches in Cambridge and Boston’s Brighton neighborhood in 2019 that will expand our branch network to 40 branches, we expect our entry into these attractive communities will lead to new business and consumer relationships and increase our market share in the Boston metropolitan area, with only minor increases to our operating expenses.”

The Company recorded a provision for income taxes of $4.7 million for the quarter ended March 31, 2019, reflecting an effective tax rate of 23.8%, compared to $2.7 million, or an effective tax rate of 18.2%, for the quarter ended December 31, 2018, and $3.3 million, or an effective tax rate of 21.6%, for the quarter ended March 31, 2018.

Total assets were $6.281 billion at March 31, 2019, up $102.7 million, or 1.7%, from $6.179 billion at December 31, 2018 and $820.7 million, or 15.0%, from $5.461 billion at March 31, 2018.  Net loans were $5.708 billion at March 31, 2019, up $114.6 million, or 2.0%, from December 31, 2018, and $807.7 million, or 16.5%, from March 31, 2018. Loan originations totaled $268.2 million during the quarter ended March 31, 2019. The net increase in loans for the quarter ended March 31, 2019 was primarily due to increases of $39.1 million in construction loans, $38.9 million in commercial real estate loans, $25.8 million in multi-family loans, and $13.2 million in one- to four-family loans.  Cash and due from banks was $344.3 million at March 31, 2019, a decrease of $27.7 million, or 7.5% from December 31, 2018. Securities, at fair value, were $31.7 million at March 31, 2019, an increase of $1.1 million, or 3.5%, from $30.6 million at December 31, 2018.

Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). During the quarter ended March 31, 2019, premises and equipment, net increased $17.1 million to $62.3 million and accrued expenses and other liabilities increased $15.3 million to $45.2 million at March 31, 2019, reflecting the recognition of operating lease assets and liabilities totaling $14.9 million based on the present value of future minimum lease payments as required by ASU No. 2016-02.

Total deposits were $5.023 billion at March 31, 2019, up $138.8 million, or 2.8%, from $4.884 billion at December 31, 2018 and $833.6 million, or 19.9%, from $4.189 billion at March 31, 2018.  Core deposits, which exclude certificates of deposit, increased $160.0 million, or 5.0%, during the three months ended March 31, 2019 to $3.358 billion, or 66.9% of total deposits. Total borrowings were $526.0 million, down $60.9 million, or 10.4%, from December 31, 2018 and $56.6 million, or 9.7%, from March 31, 2018.

Total stockholders’ equity increased $11.7 million, or 1.7%, to $686.4 million at March 31, 2019 from $674.7 million at December 31, 2018, and $30.8 million, or 4.7%, from $655.6 million at March 31, 2018. The increase for the three months ended March 31, 2019 was primarily due to net income of $15.1 million and $1.8 million related to stock-based compensation plans, partially offset by the repurchase of 104,177 shares of the Company’s common stock related to the stock repurchase program at a total cost of $1.6 million and dividends of $0.07 per share totaling $3.6 million. Stockholders’ equity to assets was 10.93% at March 31, 2019, compared to 10.92% at December 31, 2018 and 12.01% at March 31, 2018. Book value per share increased to $12.82 at March 31, 2019 from $12.60 at December 31, 2018. Tangible book value per share increased to $12.39 at March 31, 2019 from $12.17 at December 31, 2018. Market price per share increased $1.37 or 9.6%, to $15.69 at March 31, 2019 from $14.32 at December 31, 2018. At March 31, 2019, the Company and the Bank continued to exceed all regulatory capital requirements.

The Company repurchased 104,177 shares of its stock at an average price of $15.81 during the quarter ended March 31, 2019, completing the repurchases of the 3,373,621 shares of its stock, at an average price of $14.90 per share, as authorized under the Company’s repurchase program adopted in August 2015 and amended in November 2018. On April 11, 2019, the Company announced that it had adopted a new stock repurchase program for up to 500,000 shares, or approximately 0.9% of its outstanding common stock.

Mr. Gavegnano concluded, “We believe our repurchase of 3.4 million shares subsequent to the 2014 stock offering, the authorization to repurchase an additional 500,000 shares and our ongoing quarterly dividend to stockholders significantly enhance stockholder value. We are also working to further enhance our profitability through prudent loan and deposit growth, strategic expansion within our lucrative Boston market area and implementation of enhancements designed to improve operating efficiency.”

Meridian Bancorp, Inc. is the holding company for East Boston Savings Bank. East Boston Savings Bank, a Massachusetts-chartered stock savings bank founded in 1848, operates 38 branches in the greater Boston metropolitan area, including 37 full-service locations and one mobile branch. We offer a variety of deposit and loan products to individuals and businesses located in our primary market, which consists of Essex, Middlesex, Norfolk and Suffolk Counties, Massachusetts. For additional information, visit www.ebsb.com .

Forward Looking Statements

Certain statements herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of Meridian Bancorp, Inc.’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, general economic conditions, changes in interest rates, regulatory considerations, and competition and the risk factors described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Meridian Bancorp, Inc.’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.


MERIDIAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

  March 31, 2019  December 31, 2018  March 31, 2018 
  (Dollars in thousands) 
ASSETS            
Cash and due from banks $344,259  $371,995  $316,372 
Certificates of deposit  5,247   5,247   44,133 
Securities available for sale, at fair value  16,890   17,159   19,507 
Marketable equity securities, at fair value  14,763   13,437   14,722 
Federal Home Loan Bank stock, at cost  26,377   29,187   27,572 
Loans held for sale  989   409   1,136 
Loans:            
One- to four-family  660,551   647,367   614,043 
Home equity lines of credit  50,960   50,087   45,193 
Multi-family  1,036,331   1,010,521   858,894 
Commercial real estate  2,660,916   2,621,979   2,253,014 
Construction  726,061   686,948   638,751 
Commercial and industrial  622,431   625,018   533,056 
Consumer  11,095   10,953   10,466 
Total loans  5,768,345   5,652,873   4,953,417 
Allowance for loan losses  (53,997)   (53,231)   (47,488) 
Net deferred loan origination fees  (6,336)   (6,239)   (5,593) 
Loans, net  5,708,012   5,593,403   4,900,336 
Bank-owned life insurance  41,015   40,734   40,608 
Premises and equipment, net  62,279   45,140   41,415 
Accrued interest receivable  14,979   14,267   12,281 
Deferred tax asset, net  18,210   18,196   15,737 
Goodwill  20,378   20,378   19,638 
Core deposit intangible  2,517   2,653   3,096 
Other assets  5,441   6,478   4,145 
Total assets $6,281,356  $6,178,683  $5,460,698 
             
LIABILITIES AND STOCKHOLDERS' EQUITY            
Deposits:            
Non interest-bearing demand deposits $499,536  $483,777  $487,096 
Interest-bearing demand deposits  1,215,105   1,190,346   1,098,646 
Money market deposits  685,078   729,174   851,702 
Regular savings and other deposits  958,348   794,813   343,466 
Certificates of deposit  1,664,943   1,686,074   1,408,464 
Total deposits  5,023,010   4,884,184   4,189,374 
Short-term borrowings     50,000    
Long-term debt  525,985   536,880   582,561 
Accrued expenses and other liabilities  45,973   32,965   33,156 
Total liabilities  5,594,968   5,504,029   4,805,091 
Stockholders' equity:            
Preferred stock, $0.01 par value, 50,000,000 shares authorized; none issued         
Common stock, $0.01 par value, 100,000,000 shares authorized; 53,542,646, 53,541,429, and
54,068,874 shares issued at March 31, 2019, December 31, 2018, and March 31, 2018, respectively
  535   535   540 
Additional paid-in capital  378,410   378,583   395,531 
Retained earnings  325,023   313,521   278,450 
Accumulated other comprehensive loss  (164)   (348)   (616) 
Unearned compensation - ESOP, 2,404,831, 2,435,272, and 2,526,595 shares at March 31, 2019,
December 31, 2018, and March 31, 2018, respectively
  (17,416)   (17,637)   (18,298) 
Total stockholders' equity  686,388   674,654   655,607 
Total liabilities and stockholders' equity $6,281,356  $6,178,683  $5,460,698 
 

MERIDIAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)

 

  Three Months Ended 
  March 31, 2019  December 31, 2018  March 31, 2018 
  (Dollars in thousands, except per share amounts) 
Interest and dividend income:            
Interest and fees on loans $61,641  $59,424  $49,985 
Interest on debt securities:            
Taxable  110   115   126 
Tax-exempt  13   13   15 
Dividends on equity securities  105   121   148 
Interest on certificates of deposit  27   82   203 
Other interest and dividend income  2,577   1,957   1,522 
Total interest and dividend income  64,473   61,712   51,999 
Interest expense:            
Interest on deposits  19,151   17,090   10,509 
Interest on short-term borrowings  295   183    
Interest on long-term debt  2,430   2,266   1,642 
Total interest expense  21,876   19,539   12,151 
Net interest income  42,597   42,173   39,848 
Provision for loan losses  843   3,563   2,189 
Net interest income, after provision for loan losses  41,754   38,610   37,659 
Non-interest income:            
Customer service fees  2,097   2,371   2,170 
Loan fees  77   41   295 
Mortgage banking gains, net  40   25   133 
Gain (loss) on marketable equity securities, net  1,326   (2,698)   (537) 
Income from bank-owned life insurance  281   281   272 
Gain on life insurance distribution     110    
Other income  7   5    
Total non-interest income  3,828   135   2,333 
Non-interest expenses:            
Salaries and employee benefits  15,632   14,648   15,394 
Occupancy and equipment  3,596   3,214   3,539 
Data processing  1,970   1,832   1,683 
Marketing and advertising  1,162   1,252   967 
Professional services  860   735   965 
Deposit insurance  1,012   576   797 
Merger and acquisition        74 
Other general and administrative  1,564   1,380   1,270 
Total non-interest expenses  25,796   23,637   24,689 
Income before income taxes  19,786   15,108   15,303 
Provision for income taxes  4,715   2,750   3,309 
Net income $15,071  $12,358  $11,994 
             
Earnings per share:            
Basic $0.29  $0.24  $0.23 
Diluted $0.29  $0.24  $0.23 
Weighted average shares outstanding:            
Basic  51,120,599   51,530,878   51,531,835 
Diluted  51,467,917   51,955,139   53,083,815 
             

MERIDIAN BANCORP, INC. AND SUBSIDIARIES
NET INTEREST INCOME ANALYSIS
(Unaudited)

 

  Three Months Ended
  March 31, 2019 December 31, 2018March 31, 2018
  Average  Interest Yield/ Average  InterestYield/Average  InterestYield/
Balance (1)Cost (1)(6)Balance(1)Cost (1)(6)Balance(1)Cost (1)(6)
  (Dollars in thousands)
Assets:                                 
Interest-earning assets:                                 
Loans (2) $5,694,639  $62,325  4.44%  $5,434,068  $60,100  4.39%  $4,776,876  $50,573  4.29% 
Securities and certificates of deposit  36,510   272  3.02   52,818   356  2.67   96,511   523  2.20 
Other interest-earning assets (3)  353,201   2,577  2.96   321,924   1,957  2.41   317,883   1,522  1.94 
Total interest-earning assets  6,084,350   65,174  4.34   5,808,810   62,413  4.26   5,191,270   52,618  4.11 
Noninterest-earning assets  117,927          122,446          125,293        
Total assets $6,202,277         $5,931,256         $5,316,563        
Liabilities and stockholders' equity:                                 
Interest-bearing liabilities:                                 
Interest-bearing demand deposits $1,189,166  $4,940  1.68  $1,153,265  $4,716  1.62  $1,032,514  $2,791  1.10 
Money market deposits  699,807   2,148  1.24   782,007   2,449  1.24   883,549   2,057  0.94 
Regular savings and other deposits  920,579   3,802  1.67   597,827   1,829  1.21   335,288   114  0.14 
Certificates of deposit  1,621,436   8,261  2.07   1,610,632   8,096  1.99   1,376,113   5,547  1.63 
Total interest-bearing deposits  4,430,988   19,151  1.75   4,143,731   17,090  1.64   3,627,464   10,509  1.17 
Borrowings  577,954   2,725  1.91   581,619   2,449  1.67   521,090   1,642  1.28 
Total interest-bearing liabilities  5,008,942   21,876  1.77   4,725,350   19,539  1.64   4,148,554   12,151  1.19 
Noninterest-bearing demand deposits  482,634          493,715          488,459        
Other noninterest-bearing liabilities  29,048          33,036          26,638        
Total liabilities  5,520,624          5,252,101          4,663,651        
Total stockholders' equity  681,653          679,155          652,912        
Total liabilities and stockholders' equity $6,202,277         $5,931,256         $5,316,563        
Net interest-earning assets $1,075,408         $1,083,460         $1,042,716        
Fully tax-equivalent net interest income      43,298          42,874          40,467    
Less: tax-equivalent adjustments      (701)          (701)          (619)    
Net interest income     $42,597         $42,173         $39,848    
Interest rate spread (1)(4)         2.57%          2.62%          2.92% 
Net interest margin (1)(5)         2.89%          2.93%          3.16% 
Average interest-earning assets to average                                 
interest-bearing liabilities      121.47%          122.93%          125.13 %    
                                  
Supplemental Information:                                 
Total deposits, including noninterest-bearing                                 
demand deposits $4,913,622  $19,151  1.58%  $4,637,446  $17,090  1.46%  $4,115,923  $10,509  1.04% 
Total deposits and borrowings, including                                 
noninterest-bearing demand deposits $5,491,576  $21,876  1.62%  $5,219,065  $19,539  1.49%  $4,637,013  $12,151  1.06% 


______________

(1)  Income on debt securities, equity securities and revenue bonds included in commercial real estate loans, as well as resulting yields, interest rate spread and net interest margin, are presented on a tax-equivalent basis. The tax-equivalent adjustments are deducted from tax-equivalent net interest income to agree to amounts reported in the consolidated statements of net income. For the three months ended March 31, 2019, December 31, 2018 and March 31, 2018, yields on loans before tax-equivalent adjustments were 4.39%, 4.34% and 4.24%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 2.83%, 2.49% and 2.07%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 4.30%, 4.22% and 4.06%, respectively. Interest rate spread before tax-equivalent adjustments for the three months ended March 31, 2019, December 31, 2018 and March 31, 2018 was 2.53%, 2.58% and 2.87%, respectively, while net interest margin before tax-equivalent adjustments for the three months ended March 31, 2019, December 31, 2018 and March 31, 2018 was 2.84%, 2.88% and 3.11%, respectively. 
(2)  Loans on non-accrual status are included in average balances.
(3)  Includes Federal Home Loan Bank stock and associated dividends. 
(4)  Interest rate spread represents the difference between the tax-equivalent yield on interest-earning assets and the cost of interest-bearing liabilities. 
(5)  Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.
(6)  Annualized.
    

MERIDIAN BANCORP, INC. AND SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)

  Three Months Ended
  March 31, 2019 December 31, 2018 March 31, 2018
Key Performance Ratios               
Return on average assets (1)  0.97%    0.83%    0.90%  
Return on average equity (1)  8.84    7.28    7.35  
Interest rate spread  (1) (2)  2.57    2.62    2.92  
Net interest margin  (1) (3)  2.89    2.93    3.16  
Non-interest expense to average assets  (1)  1.66    1.59    1.86  
Efficiency ratio (4)  57.20    52.52    57.62  


  March 31, 2019 December 31, 2018 March 31, 2018
  (Dollars in thousands)
Asset Quality               
Non-accrual loans:               
One- to four-family $6,115   $5,888   $6,568  
Home equity lines of credit          562  
Multi-family  252          
Commercial real estate  640    342    378  
Commercial and industrial  537    676    523  
Total non-accrual loans  7,544    6,906    8,031  
Foreclosed assets            
Total non-performing assets $7,544   $6,906   $8,031  
                
Allowance for loan losses/total loans  0.94%    0.94%    0.96%  
Allowance for loan losses/non-accrual loans  715.76    770.79    591.31  
Non-accrual loans/total loans  0.13    0.12    0.16  
Non-accrual loans/total assets  0.12    0.11    0.15  
Non-performing assets/total assets  0.12    0.11    0.15  
                
Capital and Share Related               
Stockholders' equity to total assets  10.93%    10.92%    12.01%  
Book value per share $12.82   $12.60   $12.13  
Tangible book value per share (5) $12.39   $12.17   $11.70  
Market value per share $15.69   $14.32   $20.15  
Shares outstanding 53,542,646   53,541,429   54,068,874  

______________

(1)  Quarterly amounts are annualized.
(2)  Interest rate spread represents the difference between the tax-equivalent yield on interest-earning assets and the cost of interest-bearing liabilities.
(3)  Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets. 
(4)  The efficiency ratio is a non-GAAP measure representing non-interest expense, excluding merger and acquisition expenses, divided by the sum of net interest income and non-interest income excluding gains and losses on marketable equity securities. The efficiency ratio is a common measure used by banks to understand expenses related to the generation of revenue. We have removed gains and losses on marketable equity securities as management deems them to be either discretionary or market driven and not representative of operating performance. We have removed merger and acquisition expenses as management deems them to be not representative of operating performance. Presented on a basis including merger and acquisition expenses and gains and losses on marketable equity securities, the efficiency ratio was 55.56%, 55.87% and 58.53% for the quarters ended March 31, 2019, December 31, 2018, and March 31, 2018, respectively. 
(5)  Tangible book value per share represents total stockholders’ equity less goodwill and other intangible assets divided by the number of shares outstanding.
    

Contact: Richard J. Gavegnano, Chairman, President and Chief Executive Officer
(978) 977-2211

Meridian Bancorp, Inc. logo

Source: Meridian Bancorp, Inc.


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