Meridian Bancorp, Inc. (the “Company” or “Meridian”) (NASDAQ: EBSB), the holding company for East Boston Savings Bank (the “Bank”), announced net income of $16.5 million, or $0.32 per diluted share, for the quarter ended June 30, 2021, compared to $24.3 million, or $0.48 per diluted share for the quarter ended March 31, 2021, and $17.3 million, or $0.34 per diluted share, for the quarter ended June 30, 2020. For the six months ended June 30, 2021, net income was $40.9 million, or $0.81 per diluted share, up from $30.3 million, or $0.60 per diluted share, for the six months ended June 30, 2020. The Company’s return on average assets was 1.03% for the quarter ended June 30, 2021, compared to 1.46% for the quarter ended March 31, 2021, and 1.08% for the quarter ended June 30, 2020. For the six months ended June 30, 2021, the Company’s return on average assets was 1.25%, up from 0.95% for the six months ended June 30, 2020. The Company’s return on average equity was 8.32% for the quarter ended June 30, 2021, compared to 12.45% for the quarter ended March 31, 2021, and 9.45% for the quarter ended June 30, 2020. For the six months ended June 30, 2021, the Company’s return on average equity was 10.36%, up from 8.27% for the six months ended June 30, 2020.

Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, “I am pleased to report net income of $16.5 million for the second quarter of 2021 and $40.9 million for the six months ended June 30, 2021, a 35.1% increase over the six months ended June 30, 2020. These earnings reflect a 4.0% increase in net interest income and an improvement in the net interest margin to 3.08%, from 3.05%, for the six months ended June 30, 2021 compared to the same period in 2020. Also affecting the 2021 results was the recognition of an expense of $3.3 million with respect to a previously disclosed legal judgment related to a loan assumed in the Mt. Washington Bank acquisition over ten years ago. The Company also incurred $1.1 million in merger-related expenses associated with the Company’s proposed transaction with Independent Bank Corp.”

The Company’s net interest income was $47.8 million for the quarter ended June 30, 2021, an increase of $397,000, or 0.8%, from the quarter ended June 30, 2020. The interest rate spread and net interest margin on a tax-equivalent basis were 2.95% and 3.10%, respectively, for the quarter ended June 30, 2021 compared to 2.86% and 3.10%, respectively, for the quarter ended June 30, 2020. For the six months ended June 30, 2021 net interest income increased $3.7 million, or 4.0%, to $96.2 million from the six months ended June 30, 2020. The interest rate spread and net interest margin on a tax-equivalent basis were 2.93% and 3.08% for the six months ended June 30, 2021 compared to 2.76% and 3.05% for the six months ended June 30, 2020.

Total interest and dividend income totaled $55.4 million for the quarter ended June 30, 2021, a decrease of $6.7 million, or 10.8% from the quarter ended June 30, 2020, primarily due to a 9.8% decrease in the Company’s average loan balances to $5.161 billion. The Company’s yield on interest-earning assets on a tax-equivalent basis was 3.59% for the quarter ended June 30, 2021, down 47 basis points from the quarter ended June 30, 2020. For the six months ended June 30, 2021 the Company’s total interest and dividend income totaled $113.2 million, a decrease of $15.0 million, or 11.7%, from the six months ended June 30, 2020, primarily due to a decrease in the Company’s average loan balances of $437.8 million, or 7.6%, to $5.294 billion.

Total interest expense totaled $7.7 million for the quarter ended June 30, 2021, a decrease of $7.2 million, or 48.2%, from the quarter ended June 30, 2020. Interest expense on deposits decreased to $4.2 million for the quarter ended June 30, 2021, a decrease of $6.4 million, or 60.3%, from the quarter ended June 30, 2020, primarily due to a decrease in the cost of average total deposits to 0.34% from 0.88% for the quarter ended June 30, 2020. The Company’s total cost of funds was 0.55% for the quarter ended June 30, 2021, a decrease of 51 basis points from 1.06% for the quarter ended June 30, 2020. For the six months ended June 30, 2021, total interest expense totaled $17.0 million, a decrease of $18.7 million, or 52.4%, from the six months ended June 30, 2020, primarily due to a decrease in the cost of average total deposits to 0.39% from 1.13% for the six months ended June 30, 2020. The Company’s total cost of funds was 0.60% for the six months ended June 30, 2021, down 69 basis points from the six months ended June 30, 2020.

The Company’s provision for credit losses was $749,000 for the quarter ended June 30, 2021, compared to a provision of $9.6 million for the quarter ended June 30, 2020. For the six months ended June 30, 2021 the Company recognized a provision reversal of $4.5 million compared to a provision of $10.4 million for the six months ended June 30, 2020. The allowance for credit losses on loans was $64.3 million, or 1.28%, of total loans at June 30, 2021, compared to $68.8 million, or 1.25%, of total loans at December 31, 2020. Non-performing assets were $10.5 million, or 0.17% of total assets, at June 30, 2021, compared to $3.8 million, or 0.06% of total assets, at June 30, 2020.

Non-interest income was $3.0 million for the quarter ended June 30, 2021, a decrease of $5.6 million, or 64.8%, from the quarter ended June 30, 2020, primarily due to a $4.2 million gain on sale of asset recognized in the second quarter of 2020, and a $1.8 million valuation decrease on marketable equity securities, net. For the six months ended June 30, 2021, non-interest income increased $154,000, or 2.0%, to $8.0 million from $7.8 million for the six months ended June 30, 2020, primarily due to a $3.0 million valuation increase on marketable equity securities, net, a $1.3 million increase in gain on sale of equity securities, net, partially offset by a $4.2 million gain on sale of asset realized in 2020.

Non-interest expenses were $28.0 million, or 1.74% of average assets for the quarter ended June 30, 2021, compared to $23.3 million, or 1.46% of average assets for the quarter ended June 30, 2020. The Company’s efficiency ratio was 53.18% for the quarter ended June 30, 2021 compared to 46.79% for the quarter ended June 30, 2020. For the six months ended June 30, 2021, non-interest expenses increased $4.0 million, or 8.0%, to $53.6 million from $49.6 million for the six months ended June 30, 2020, due primarily to $3.3 million in expense for a legal judgment related to a loan assumed in the Mt. Washington Bank acquisition included in other general and administrative and $1.1 million in merger and acquisition related expenses realized in the second quarter of 2021. For the six months ended June 30, 2021 the efficiency ratio is 51.35% compared to 50.44% for the six months ended June 30, 2020.

The Company recorded a provision for income taxes of $5.5 million for the quarter ended June 30, 2021, reflecting an effective tax rate of 24.9%, compared to $5.8 million, or an effective rate of 25.2%, for the quarter ended June 30, 2020. For the six months ended June 30, 2021 the provision for income taxes was $14.2 million, reflecting an effective tax rate of 25.8%, compared to $10.1 million, reflecting an effective rate of 24.9% for the six months ended June 30, 2020.

Total assets were $6.287 billion at June 30, 2021, down $332.7 million, or 5.0%, from $6.620 billion at December 31, 2020. Net loans were $4.937 billion at June 30, 2021, down $507.2 million, or 9.3%, from December 31, 2020, despite loan originations of $449.7 million during the six months ended June 30, 2021. The allowance for credit losses on loans decreased $4.5 million, or 6.6%, to $64.3 million during the six months ended June 30, 2021 from $68.8 million at December 31, 2020, primarily due to changes in the volume and mix of the loan portfolio.

Total deposits were $4.864 billion at June 30, 2021, down $217.4 million, or 4.3%, from $5.081 billion at December 31, 2020. Core deposits, which exclude certificates of deposit, decreased $60.1 million, or 1.6%, during the six months ended June 30, 2021 to $3.802 billion, or 78.2% of total deposits, compared to 76.0% at December 31, 2020. The decrease in core deposits included the payoff of $175.6 million in brokered interest-bearing demand deposits. Certificates of deposit decreased $157.3 million during the six months ended June 30, 2021, inclusive of a $68.3 million decrease in brokered certificates of deposit. Total borrowings were $560.6 million at June 30, 2021, down $147.6 million, or 20.8%, from December 31, 2020, primarily due to $50.0 million in matured advances from the FHLB and paying down all borrowings from the Federal Reserve’s PPPLF program.

Total stockholders’ equity increased $32.3 million, or 4.2%, to $801.2 million at June 30, 2021 from $768.9 million at December 31, 2020. The increase for the six months ended June 30, 2021 was primarily due to net income of $40.9 million, partially offset by dividends of $0.20 per share totaling $10.1 million. Stockholders’ equity to assets was 12.74% at June 30, 2021, compared to 12.13% at March 31, 2021 and 11.61% at December 31, 2020. Tangible book value per share increased to $14.81 at June 30, 2021 from $14.25 at December 31, 2020. Market price per share increased 37.2% to $20.46 at June 30, 2021 from $14.91 at December 31, 2020. The Company and the Bank exceeded the minimum requirement to be considered well capitalized at June 30, 2021.

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 43 branches in the greater Boston metropolitan area, including 42 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, the effects of any health pandemic, 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 SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited)

  June 30,     March 31,     December 31,     June 30,  
  2021     2021     2020     2020  
  (Dollars in thousands)  
ASSETS                                      
Cash and due from banks $ 1,101,359     $ 1,034,107     $ 914,586     $ 508,627  
Securities available for sale, at fair value   9,810       10,518       11,326       13,022  
Marketable equity securities, at fair value   9,112       8,900       12,189       16,401  
Federal Home Loan Bank stock, at cost   26,184       28,447       30,658       33,282  
Loans held for sale   5,711       7,422       8,224       3,682  
Loans:                              
One- to four-family   489,310       517,442       564,146       635,683  
Home equity lines of credit   56,032       64,370       68,721       74,246  
Multi-family   809,317       878,331       880,552       941,922  
Commercial real estate   2,295,030       2,419,715       2,499,660       2,556,088  
Construction   645,622       625,961       731,432       742,845  
Commercial and industrial   703,745       779,603       765,195       760,546  
Consumer   9,749       10,307       10,707       11,867  
Total loans   5,008,805       5,295,729       5,520,413       5,723,197  
Allowance for credit losses on loans   (64,300 )     (63,436 )     (68,824 )     (60,547 )
Net deferred loan origination fees   (7,930 )     (8,298 )     (7,784 )     (8,340 )
Loans, net   4,936,575       5,223,995       5,443,805       5,654,310  
Bank-owned life insurance   42,402       42,138       41,877       41,334  
Premises and equipment, net   64,649       65,394       66,850       67,098  
Accrued interest receivable   19,932       22,498       23,173       17,300  
Deferred tax asset, net   21,437       21,418       21,355       16,873  
Goodwill   20,378       20,378       20,378       20,378  
Core deposit intangible   1,445       1,548       1,651       1,887  
Other assets   28,147       17,162       23,776       23,776  
Total assets $ 6,287,141     $ 6,503,925     $ 6,619,848     $ 6,417,970  
                               
LIABILITIES AND STOCKHOLDERS' EQUITY                              
Deposits:                              
Non interest-bearing demand deposits $ 801,612     $ 751,809     $ 711,573     $ 709,924  
Interest-bearing demand deposits   1,270,484       1,461,236       1,364,548       1,291,458  
Money market deposits   863,526       852,747       930,507       753,980  
Regular savings and other deposits   866,191       870,961       855,329       833,951  
Certificates of deposit   1,061,914       1,160,616       1,219,210       1,231,084  
Total deposits   4,863,727       5,097,369       5,081,167       4,820,397  
Short-term borrowings                     25,000  
Long-term debt   560,625       560,625       708,245       779,101  
Accrued expenses and other liabilities   61,575       56,847       61,551       59,199  
Total liabilities   5,485,927       5,714,841       5,850,963       5,683,697  
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; 52,608,747, 52,430,554, 52,415,061 and 52,407,179 shares issued at June 30, 2021, March 31, 2021, December 31, 2020 and June 30, 2020, respectively   526       524       524       524  
Additional paid-in capital   365,607       364,751       363,995       361,980  
Retained earnings   451,100       439,593       420,297       387,983  
Accumulated other comprehensive (loss) income   (146 )     (131 )     (58 )     100  
Unearned compensation - ESOP; 2,191,745, 2,161,304 , 2,191,745 and 2,252,627 shares at June 30, 2021, March 31, 2021, December 31, 2020 and June 30, 2020, respectively   (15,873 )     (15,653 )     (15,873 )     (16,314 )
Total stockholders' equity   801,214       789,084       768,885       734,273  
Total liabilities and stockholders' equity $ 6,287,141     $ 6,503,925     $ 6,619,848     $ 6,417,970  
 
 

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

  Three Months Ended     Six Months Ended  
  June 30,     March 31,     June 30,     June 30,     June 30,  
  2021     2021     2020     2021     2020  
  (Dollars in thousands, except per share amounts)  
Interest and dividend income:                                      
Interest and fees on loans $ 54,918     $ 57,162     $ 61,445     $ 112,080     $ 125,482  
Interest on debt securities   61       65       87       126       187  
Dividends on marketable equity securities   90       124       145       214       239  
Interest on certificates of deposit                           1  
Other interest and dividend income   361       370       473       731       2,259  
Total interest and dividend income   55,430       57,721       62,150       113,151       128,168  
Interest expense:                                      
Interest on deposits   4,209       5,729       10,591       9,938       27,360  
Interest on short-term borrowings               52             60  
Interest on borrowings   3,453       3,591       4,136       7,044       8,279  
Total interest expense   7,662       9,320       14,779       16,982       35,699  
Net interest income   47,768       48,401       47,371       96,169       92,469  
Provision (reversal) for credit losses   749       (5,236 )     9,641       (4,487 )     10,366  
Net interest income, after provision (reversal) for credit losses   47,019       53,637       37,730       100,656       82,103  
Non-interest income:                                      
Customer service fees   2,485       2,199       1,948       4,684       4,045  
Loan fees (costs)   39       95       (35 )     134       639  
Mortgage banking gains, net   45       582       118       627       529  
Gain on sale of asset               4,195             4,195  
Gain (loss) on marketable equity securities, net   200       1,785       2,025       1,985       (2,319 )
Income from bank-owned life insurance   264       261       273       525       570  
Other income   17       9       134       26       168  
Total non-interest income   3,050       4,931       8,658       7,981       7,827  
Non-interest expenses:                                      
Salaries and employee benefits   13,939       15,516       13,858       29,455       29,772  
Occupancy and equipment   3,900       4,231       3,739       8,131       7,663  
Data processing   2,273       2,241       2,133       4,514       4,270  
Marketing and advertising   1,032       896       1,030       1,928       2,260  
Professional services   691       730       695       1,421       1,692  
Deposit insurance   345       513       606       858       1,275  
Merger and acquisition   1,115                   1,115        
Other general and administrative   4,738       1,416       1,240       6,154       2,689  
Total non-interest expenses   28,033       25,543       23,301       53,576       49,621  
Income before income taxes   22,036       33,025       23,087       55,061       40,309  
Provision for income taxes   5,490       8,705       5,808       14,195       10,053  
Net income $ 16,546     $ 24,320     $ 17,279     $ 40,866     $ 30,256  
                                       
Earnings per share:                                      
Basic $ 0.33     $ 0.48     $ 0.34     $ 0.81     $ 0.60  
Diluted $ 0.32     $ 0.48     $ 0.34     $ 0.81     $ 0.60  
Weighted average shares outstanding:                                      
Basic   50,375,468       50,239,611       50,131,249       50,307,961       50,383,116  
Diluted   50,943,160       50,565,459       50,211,234       50,754,731       50,565,747  
                                       
                                       

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

  Three Months Ended
  June 30, 2021   March 31, 2021   June 30, 2020
  AverageBalance     Interest(1)   Yield/Cost (1)(6)   AverageBalance     Interest(1)   Yield/Cost (1)(6)   AverageBalance     Interest(1)   Yield/Cost (1)(6)
  (Dollars in thousands)
Assets:                                                                                  
Interest-earning assets:                                                                                  
Loans (2) $ 5,160,579     $ 55,702         4.33   %   $ 5,429,311     $ 57,954         4.33   %   $ 5,722,186     $ 62,164         4.37   %
Securities and certificates of deposit   19,445       171         3.53         20,839       208         4.05         33,282       262         3.17    
Other interest-earning assets (3)   1,099,850       361         0.13         1,057,264       370         0.14         478,725       473         0.40    
Total interest-earning assets   6,279,874       56,234         3.59         6,507,414       58,532         3.65         6,234,193       62,899         4.06    
Noninterest-earning assets   154,470                           155,169                           153,567                      
Total assets $ 6,434,344                         $ 6,662,583                         $ 6,387,760                      
Liabilities and stockholders' equity:                                                                                  
Interest-bearing liabilities:                                                                                  
Interest-bearing demand deposits $ 1,403,276     $ 959         0.27       $ 1,462,239     $ 1,408         0.39       $ 1,297,072     $ 2,293         0.71    
Money market deposits   859,189       471         0.22         877,613       780         0.36         722,148       1,227         0.68    
Regular savings and other deposits   870,508       333         0.15         861,439       536         0.25         841,600       995         0.48    
Certificates of deposit   1,116,928       2,446         0.88         1,223,333       3,005         1.00         1,331,999       6,076         1.83    
Total interest-bearing deposits   4,249,901       4,209         0.40         4,424,624       5,729         0.53         4,192,819       10,591         1.02    
Borrowings   560,625       3,453         2.47         666,856       3,591         2.18         754,426       4,188         2.23    
Total interest-bearing liabilities   4,810,526       7,662         0.64         5,091,480       9,320         0.74         4,947,245       14,779         1.20    
Noninterest-bearing demand deposits   777,688                           734,316                           651,517                      
Other noninterest-bearing liabilities   50,409                           55,337                           57,922                      
Total liabilities   5,638,623                           5,881,133                           5,656,684                      
Total stockholders' equity   795,721                           781,450                           731,076                      
Total liabilities and stockholders' equity $ 6,434,344                         $ 6,662,583                         $ 6,387,760                      
Net interest-earning assets $ 1,469,348                         $ 1,415,934                         $ 1,286,948                      
Fully tax-equivalent net interest income           48,572                           49,212                           48,120              
Less: tax-equivalent adjustments           (803 )                         (811 )                         (749 )            
Net interest income         $ 47,769                         $ 48,401                         $ 47,371              
Interest rate spread (1)(4)                     2.95   %                       2.91   %                       2.86   %
Net interest margin (1)(5)                     3.10   %                       3.07   %                       3.10   %
Average interest-earning assets to average interest-bearing liabilities           130.54   %                       127.81   %                       126.01   %          
                                                                                   
Supplemental Information:                                                                                  
Total deposits, including noninterest-bearing demand deposits $ 5,027,589     $ 4,209         0.34   %   $ 5,158,940     $ 5,729         0.45   %   $ 4,844,336     $ 10,591         0.88   %
Total deposits and borrowings, including noninterest-bearing demand deposits $ 5,588,214     $ 7,662         0.55   %   $ 5,825,796     $ 9,320         0.65   %   $ 5,598,762     $ 14,779         1.06   %
____________________
(1) Income on debt securities, marketable 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 June 30, 2021, March 31, 2021, and June 30, 2020, yields on loans before tax-equivalent adjustments were 4.27%, 4.27% and 4.32%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 3.11%, 3.68% and 2.80%, respectively, and yields on total interest-earning assets before tax-equivalent adjustments were 3.54%, 3.60% and 4.01%, respectively. Interest rate spread before tax-equivalent adjustments for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020 was 2.90%, 2.86% and 2.81%, respectively, while net interest margin before tax-equivalent adjustments for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020 was 3.05%, 3.02% and 3.06%, 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 SUBSIDIARIESNET INTEREST INCOME ANALYSIS(Unaudited)

  Six Months Ended
  June 30, 2021   June 30, 2020
  AverageBalance     Interest (1)   Yield/Cost (1)   AverageBalance     Interest (1)   Yield/Cost (1)
  (Dollars in thousands)
Assets:                                                      
Interest-earning assets:                                                      
Loans (2) $ 5,294,203     $ 113,656         4.33   %   $ 5,732,019     $ 126,922         4.45   %
Securities and certificates of deposit   20,138       373         3.74         29,170       464         3.20    
Other interest-earning assets (3)   1,078,675       731         0.14         439,520       2,259         1.03    
Total interest-earning assets   6,393,016       114,760         3.62         6,200,709       129,645         4.20    
Noninterest-earning assets   154,817                           157,599                      
Total assets $ 6,547,833                         $ 6,358,308                      
                                                       
Liabilities and stockholders' equity:                                                      
Interest-bearing liabilities:                                                      
Interest-bearing demand deposits $ 1,432,595     $ 2,368         0.33       $ 1,288,538     $ 6,790         1.06    
Money market deposits   868,350       1,251         0.29         707,022       3,281         0.93    
Regular savings and other deposits   865,998       868         0.20         873,850       3,527         0.81    
Certificates of deposit   1,169,837       5,451         0.94         1,403,507       13,762         1.97    
Total interest-bearing deposits   4,336,780       9,938         0.46         4,272,917       27,360         1.29    
Borrowings   613,447       7,044         2.32         704,583       8,339         2.38    
Total interest-bearing liabilities   4,950,227       16,982         0.69         4,977,500       35,699         1.44    
Noninterest-bearing demand deposits   756,122                           593,350                      
Other noninterest-bearing liabilities   52,859                           55,805                      
Total liabilities   5,759,208                           5,626,655                      
Total stockholders' equity   788,625                           731,653                      
Total liabilities and stockholders' equity $ 6,547,833                         $ 6,358,308                      
Net interest-earning assets $ 1,442,789                         $ 1,223,209                      
Fully tax-equivalent net interest income           97,778                           93,946              
Less: tax-equivalent adjustments           (1,609 )                         (1,477 )            
Net interest income         $ 96,169                         $ 92,469              
Interest rate spread (1)(4)                     2.93   %                       2.76   %
Net interest margin (1)(5)                     3.08   %                       3.05   %
Average interest-earning assets to average interest-bearing liabilities           129.15   %                       124.57   %          
                                                       
Supplemental Information:                                                      
Total deposits, including noninterest-bearing demand deposits $ 5,092,902     $ 9,938         0.39   %   $ 4,866,267     $ 27,360         1.13   %
Total deposits and borrowings, including noninterest-bearing demand deposits $ 5,706,349     $ 16,982         0.60   %   $ 5,570,850     $ 35,699         1.29   %
____________________
(1) Income on debt securities, marketable 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 six months ended June 30, 2021 and 2020, yields on loans before tax-equivalent adjustments were 4.27%, and 4.40%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 3.40% and 2.94%, respectively, and yields on total interest-earning assets before tax-equivalent adjustments were 3.57% and 4.16%, respectively. Interest rate spread before tax-equivalent adjustments for the six months ended June 30, 2021 and 2020 was 2.88% and 2.72%, respectively, while net interest margin before tax-equivalent adjustments for the six months ended June 30, 2021 and 2020 was 3.03%, and 3.00%, 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 SUBSIDIARIESSELECTED FINANCIAL HIGHLIGHTS(Unaudited)

  Three Months Ended   Six Months Ended
  June 30,   March 31,   June 30,   June 30,   June 30,
  2021   2021   2020   2021   2020
Key Performance Ratios                                                
Return on average assets (1)   1.03   %     1.46   %     1.08   %     1.25   %     0.95   %
Return on average equity (1)   8.32         12.45         9.45         10.36         8.27    
Interest rate spread (1) (2)   2.95         2.91         2.86         2.93         2.76    
Net interest margin (1) (3)   3.10         3.07         3.10         3.08         3.05    
Non-interest expense to average assets (1)   1.74         1.53         1.46         1.64         1.56    
Efficiency ratio (4)   53.18         49.55         46.79         51.35         50.44    
  June 30,   March 31,   December 31,   June 30,
  2021   2021   2020   2020
  (Dollars in thousands)
Asset Quality                                      
Non-accrual loans:                                      
One- to four-family $ 1,633       $ 2,466       $ 2,617       $ 3,074    
Home equity lines of credit   20         20         20         20    
Commercial real estate   8,176                         194    
Commercial and industrial   635         635         527         532    
Total non-accrual loans   10,464         3,121         3,164         3,820    
Foreclosed assets                              
Total non-performing assets $ 10,464       $ 3,121       $ 3,164       $ 3,820    
                                       
Allowance for credit losses on loans/total loans   1.28   %     1.20   %     1.25   %     1.06   %
Allowance for credit losses on loans/non-accrual loans   614.49         2,032.55         2,175.22         1,585.00    
Non-accrual loans/total loans   0.21         0.06         0.06         0.07    
Non-accrual loans/total assets   0.17         0.05         0.05         0.06    
Non-performing assets/total assets   0.17         0.05         0.05         0.06    
                                       
Capital and Share Related                                      
Stockholders' equity to total assets   12.74   %     12.13   %     11.61   %     11.44   %
Book value per share $ 15.23       $ 15.05       $ 14.67       $ 14.01    
Tangible book value per share (5) $ 14.81       $ 14.63       $ 14.25       $ 13.59    
Market value per share $ 20.46       $ 18.42       $ 14.91       $ 11.60    
Shares outstanding 52,608,747       52,430,554       52,415,061       52,407,179    
____________________
(1) 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 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, gains and losses on sale of assets, and merger and acquisition expenses as management deems them to be either discretionary or market driven and not representative of operating performance. Presented on a basis including gains and losses on marketable equity securities, gains and losses on sale of assets, and merger and acquisition expenses the efficiency ratio was 55.16%, 47.89% and 41.59% for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively and 51.44% and 49.47% for the six months ended June 30, 2021 and 2020, 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

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