EBSB Meridian Bancorp Inc

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 SUBSIDIARIESCONSOLIDATED 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 SUBSIDIARIESCONSOLIDATED 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 SUBSIDIARIESNET INTEREST INCOME ANALYSIS(Unaudited)

 

		Three Months Ended
		March 31, 2019											December 31, 2018											March 31, 2018
		Average				Interest				Yield/			Average				Interest			Yield/				Average				Interest			Yield/
		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 SUBSIDIARIESSELECTED 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

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(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