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Meridian Bancorp, Inc. Announces Results for the Quarter and Nine Months Ended September 30, 2021

BOSTON, Oct. 21, 2021 (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 $18.3 million, or $0.36 per diluted share, for the quarter ended September 30, 2021, compared to $16.5 million, or $0.32 per diluted share for the quarter ended June 30, 2021, and $16.7 million, or $0.33 per diluted share, for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, net income was $59.2 million, or $1.17 per diluted share, up from $46.9 million, or $0.93 per diluted share, for the nine months ended September 30, 2020. The Company’s return on average assets was 1.17% for the quarter ended September 30, 2021, compared to 1.03% for the quarter ended June 30, 2021, and 1.03% for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, the Company’s return on average assets was 1.22%, up from 0.98% for the nine months ended September 30, 2020. The Company’s return on average equity was 9.03% for the quarter ended September 30, 2021, compared to 8.32% for the quarter ended June 30, 2021, and 8.94% for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, the Company’s return on average equity was 9.91%, up from 8.50% for the nine months ended September 30, 2020.

The Company’s net interest income was $46.0 million for the quarter ended September 30, 2021, a decrease of $2.8 million, or 5.7%, from the quarter ended September 30, 2020. The interest rate spread and net interest margin on a tax-equivalent basis were 2.91% and 3.05%, respectively, for the quarter ended September 30, 2021 compared to 2.91% and 3.13%, respectively, for the quarter ended September 30, 2020. For the nine months ended September 30, 2021 net interest income increased $935,000, or 0.7%, to $142.2 million compared to $141.3 million for the nine months ended September 30, 2020. The interest rate spread and net interest margin on a tax-equivalent basis were 2.92% and 3.07% for the nine months ended September 30, 2021 compared to 2.81% and 3.07% for the nine months ended September 30, 2020.

Total interest and dividend income totaled $52.6 million for the quarter ended September 30, 2021, a decrease of $9.0 million, or 14.6% from the quarter ended September 30, 2020, primarily due to a 12.8% decrease in the Company’s average loan balances to $4.947 billion. For the nine months ended September 30, 2021 the Company’s total interest and dividend income totaled $165.8 million, a decrease of $24.0 million, or 12.7%, from the nine months ended September 30, 2020, primarily due to a decrease in the Company’s average loan balances of $534.6 million, or 9.4%, to $5.177 billion.

Total interest expense totaled $6.6 million for the quarter ended September 30, 2021, a decrease of $6.2 million, or 48.6%, from the quarter ended September 30, 2020. Interest expense on deposits decreased to $3.1 million for the quarter ended September 30, 2021, a decrease of $5.7 million, or 64.8%, from the quarter ended September 30, 2020, primarily due to a decrease in the cost of average total deposits to 0.25% from 0.72% for the quarter ended September 30, 2020. The Company’s total cost of funds was 0.48% for the quarter ended September 30, 2021, a decrease of 42 basis points from 0.90% for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, total interest expense totaled $23.6 million, a decrease of $24.9 million, or 51.4%, from the nine months ended September 30, 2020, primarily due to a decrease in the cost of average total deposits to 0.35% from 0.99% for the nine months ended September 30, 2020. The Company’s total cost of funds was 0.56% for the nine months ended September 30, 2021, down 60 basis points from the nine months ended September 30, 2020.

The Company’s provision for credit losses was $217,000 for the quarter ended September 30, 2021, compared to a provision of $7.2 million for the quarter ended September 30, 2020. For the nine months ended September 30, 2021 the Company recognized a provision reversal of $4.3 million compared to a provision of $17.5 million for the nine months ended September 30, 2020. The allowance for credit losses on loans was $60.8 million, or 1.24%, of total loans at September 30, 2021, compared to $68.8 million, or 1.25%, of total loans at December 31, 2020. Non-performing assets were $6.9 million, or 0.11% of total assets, at September 30, 2021, compared to $3.6 million, or 0.05% of total assets, at September 30, 2020.

Non-interest income was $3.1 million for the quarter ended September 30, 2021, a decrease of $509,000, or 14.2%, from the quarter ended September 30, 2020, primarily due to a decrease of $486,000 in mortgage banking gains, net. For the nine months ended September 30, 2021, non-interest income decreased $355,000, or 3.1%, to $11.0 million from $11.4 million for the nine months ended September 30, 2020, primarily due to a $4.2 million gain on sale of asset realized in 2020, a $623,000 decrease in loan fees and a $388,000 decrease in mortgage banking gains, net, partially offset by a $2.6 million valuation increase on marketable equity securities, net, a $1.5 million increase in gain on sale of equity securities, net, and a $976,000 increase in customer service fees.

Non-interest expenses were $24.5 million, or 1.57% of average assets for the quarter ended September 30, 2021, compared to $22.8 million, or 1.41% of average assets for the quarter ended September 30, 2020. The Company’s efficiency ratio was 47.53% for the quarter ended September 30, 2021 compared to 43.69% for the quarter ended September 30, 2020. For the nine months ended September 30, 2021, non-interest expenses increased $5.7 million, or 7.8%, to $78.1 million from $72.5 million for the nine months ended September 30, 2020, due primarily to $3.4 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 $2.3 million in merger and acquisition related expenses realized in the second and third quarters of 2021. For the nine months ended September 30, 2021 the efficiency ratio was 50.11% compared to 48.10% for the nine months ended September 30, 2020.

The Company recorded a provision for income taxes of $6.0 million for the quarter ended September 30, 2021, reflecting an effective tax rate of 24.7%, compared to $5.7 million, or an effective rate of 25.5%, for the quarter ended September 30, 2020. For the nine months ended September 30, 2021 the provision for income taxes was $20.2 million, reflecting an effective tax rate of 25.4%, compared to $15.8 million, reflecting an effective rate of 25.1% for the nine months ended September 30, 2020.

Total assets were $6.128 billion at September 30, 2021, down $491.5 million, or 7.4%, from $6.620 billion at December 31, 2020. Net loans were $4.850 billion at September 30, 2021, down $593.6 million, or 10.9%, from December 31, 2020, despite loan originations of $701.1 million during the nine months ended September 30, 2021. The allowance for credit losses on loans decreased $8.0 million, or 11.6%, to $60.8 million during the nine months ended September 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 $4.693 billion at September 30, 2021, down $388.0 million, or 7.6%, from $5.081 billion at December 31, 2020. Core deposits, which exclude certificates of deposit, decreased $50.3 million, or 1.3%, during the nine months ended September 30, 2021 to $3.812 billion, or 81.2% 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 $337.7 million during the nine months ended September 30, 2021, inclusive of a $87.0 million decrease in brokered certificates of deposit. Total borrowings were $560.6 million at September 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 $44.8 million, or 5.8%, to $813.7 million at September 30, 2021 from $768.9 million at December 31, 2020. The increase for the nine months ended September 30, 2021 was primarily due to net income of $59.2 million, partially offset by dividends of $0.30 per share totaling $15.1 million. Stockholders’ equity to assets was 13.28% at September 30, 2021, compared to 11.61% at December 31, 2020. Tangible book value per share increased to $15.02 at September 30, 2021 from $14.25 at December 31, 2020. Market price per share increased 39.2% to $20.76 at September 30, 2021 from $14.91 at December 31, 2020. The Company and the Bank exceeded the minimum requirement to be considered well capitalized at September 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 SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)

September 30,
2021

June 30,
2021

December 31,
2020

September 30,
2020

(Dollars in thousands)

ASSETS

Cash and due from banks

$

1,052,553

$

1,101,359

$

914,586

$

702,138

Securities available for sale, at fair value

9,170

9,810

11,326

12,183

Marketable equity securities, at fair value

10

9,112

12,189

16,203

Federal Home Loan Bank stock, at cost

26,184

26,184

30,658

33,282

Loans held for sale

2,408

5,711

8,224

11,662

Loans:

One- to four-family

468,796

489,310

564,146

604,037

Home equity lines of credit

54,170

56,032

68,721

73,581

Multi-family

765,262

809,317

880,552

941,409

Commercial real estate

2,243,290

2,295,030

2,499,660

2,595,124

Construction

707,503

645,622

731,432

666,375

Commercial and industrial

670,116

703,745

765,195

766,418

Consumer

9,296

9,749

10,707

12,213

Total loans

4,918,433

5,008,805

5,520,413

5,659,157

Allowance for credit losses on loans

(60,849

)

(64,300

)

(68,824

)

(67,639

)

Net deferred loan origination fees

(7,333

)

(7,930

)

(7,784

)

(7,717

)

Loans, net

4,850,251

4,936,575

5,443,805

5,583,801

Bank-owned life insurance

42,670

42,402

41,877

41,606

Premises and equipment, net

63,321

64,649

66,850

67,917

Accrued interest receivable

17,631

19,932

23,173

21,460

Deferred tax asset, net

20,865

21,437

21,355

17,007

Goodwill

20,378

20,378

20,378

20,378

Core deposit intangible

1,341

1,445

1,651

1,769

Other assets

21,592

28,147

23,776

37,327

Total assets

$

6,128,374

$

6,287,141

$

6,619,848

$

6,566,733

LIABILITIES AND STOCKHOLDERS' EQUITY

Deposits:

Non interest-bearing demand deposits

$

818,350

$

801,612

$

711,573

$

707,458

Interest-bearing demand deposits

1,331,001

1,270,484

1,364,548

1,353,153

Money market deposits

833,125

863,526

930,507

789,712

Regular savings and other deposits

829,194

866,191

855,329

850,810

Certificates of deposit

881,509

1,061,914

1,219,210

1,250,894

Total deposits

4,693,179

4,863,727

5,081,167

4,952,027

Short-term borrowings

25,000

Long-term debt

560,625

560,625

708,245

779,279

Accrued expenses and other liabilities

60,872

61,575

61,551

62,163

Total liabilities

5,314,676

5,485,927

5,850,963

5,818,469

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; 52,711,409, 52,608,747,

52,415,061 and 52,413,120 shares issued at September 30, 2021, June 30, 2021,
December 31, 2020 and September 30, 2020, respectively

527

526

524

524

Additional paid-in capital

364,844

365,607

363,995

363,093

Retained earnings

464,384

451,100

420,297

400,649

Accumulated other comprehensive (loss) income

(184

)

(146

)

(58

)

91

Unearned compensation - ESOP; 2,191,745, 2,191,745, 2,191,745

and 2,222,186 shares at September 30, 2021, June 30, 2021,
December 31, 2020 and September 30, 2020, respectively

(15,873

)

(15,873

)

(15,873

)

(16,093

)

Total stockholders' equity

813,698

801,214

768,885

748,264

Total liabilities and stockholders' equity

$

6,128,374

$

6,287,141

$

6,619,848

$

6,566,733


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


Three Months Ended

Nine Months Ended

September 30,
2021

June 30,
2021

September 30,
2020

September 30,
2021

September 30,
2020

(Dollars in thousands, except per share amounts)

Interest and dividend income:

Interest and fees on loans

$

51,964

$

54,918

$

60,918

$

164,044

$

186,400

Interest on debt securities

57

61

76

183

263

Dividends on marketable equity securities

40

90

118

254

357

Interest on certificates of deposit

1

Other interest and dividend income

555

361

494

1,286

2,753

Total interest and dividend income

52,616

55,430

61,606

165,767

189,774

Interest expense:

Interest on deposits

3,081

4,209

8,746

13,019

36,106

Interest on short-term borrowings

52

112

Interest on borrowings

3,491

3,453

3,999

10,535

12,278

Total interest expense

6,572

7,662

12,797

23,554

48,496

Net interest income

46,044

47,768

48,809

142,213

141,278

Provision (reversal) for credit losses

217

749

7,163

(4,270

)

17,529

Net interest income, after provision (reversal) for credit losses

45,827

47,019

41,646

146,483

123,749

Non-interest income:

Customer service fees

2,530

2,485

2,193

7,214

6,238

Loan fees

146

39

264

280

903

Mortgage banking gains, net

218

45

704

845

1,233

Gain on sale of asset

4,195

(Loss) gain on marketable equity securities, net

(104

)

200

122

1,881

(2,197

)

Income from bank-owned life insurance

268

264

272

793

842

Other income

5

17

17

31

185

Total non-interest income

3,063

3,050

3,572

11,044

11,399

Non-interest expenses:

Salaries and employee benefits

13,941

13,939

13,426

43,396

43,198

Occupancy and equipment

3,644

3,900

3,734

11,775

11,397

Data processing

2,354

2,273

2,196

6,868

6,466

Marketing and advertising

663

1,032

554

2,591

2,814

Professional services

704

691

688

2,125

2,380

Deposit insurance

406

345

692

1,264

1,967

Merger and acquisition

1,158

1,115

2,273

Other general and administrative

1,677

4,738

1,540

7,831

4,229

Total non-interest expenses

24,547

28,033

22,830

78,123

72,451

Income before income taxes

24,343

22,036

22,388

79,404

62,697

Provision for income taxes

6,007

5,490

5,714

20,202

15,767

Net income

$

18,336

$

16,546

$

16,674

$

59,202

$

46,930

Earnings per share:

Basic

$

0.36

$

0.33

$

0.33

$

1.18

$

0.93

Diluted

$

0.36

$

0.32

$

0.33

$

1.17

$

0.93

Weighted average shares outstanding:

Basic

50,470,710

50,375,468

50,169,024

50,362,807

50,311,231

Diluted

50,865,435

50,943,160

50,248,048

50,792,228

50,459,326


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


Three Months Ended

September 30, 2021

June 30, 2021

September 30, 2020

Average
Balance

Interest
(1)

Yield/
Cost (1)(6)

Average
Balance

Interest
(1)

Yield/
Cost (1)(6)

Average
Balance

Interest
(1)

Yield/
Cost (1)(6)

(Dollars in thousands)

Assets:

Interest-earning assets:

Loans (2)

$

4,947,057

$

52,723

4.23

%

$

5,160,579

$

55,702

4.33

%

$

5,671,957

$

61,682

4.33

%

Securities and certificates of deposit

14,886

108

2.88

19,445

171

3.53

29,263

219

2.98

Other interest-earning assets (3)

1,128,550

555

0.20

1,099,850

361

0.13

604,916

494

0.32

Total interest-earning assets

6,090,493

53,386

3.48

6,279,874

56,234

3.59

6,306,136

62,395

3.94

Noninterest-earning assets

158,025

154,470

161,886

Total assets

$

6,248,518

$

6,434,344

$

6,468,022

Liabilities and stockholders' equity:

Interest-bearing liabilities:

Interest-bearing demand deposits

$

1,312,061

$

669

0.20

$

1,403,276

$

959

0.27

$

1,291,341

$

1,946

0.60

Money market deposits

866,553

326

0.15

859,189

471

0.22

769,571

1,270

0.66

Regular savings and other deposits

849,253

217

0.10

870,508

333

0.15

834,368

966

0.46

Certificates of deposit

978,573

1,869

0.76

1,116,928

2,446

0.88

1,262,433

4,564

1.44

Total interest-bearing deposits

4,006,440

3,081

0.31

4,249,901

4,209

0.40

4,157,713

8,746

0.84

Borrowings

560,625

3,491

2.47

560,625

3,453

2.47

804,281

4,051

2.00

Total interest-bearing liabilities

4,567,065

6,572

0.57

4,810,526

7,662

0.64

4,961,994

12,797

1.03

Noninterest-bearing demand deposits

814,961

777,688

702,717

Other noninterest-bearing liabilities

54,669

50,409

57,636

Total liabilities

5,436,695

5,638,623

5,722,347

Total stockholders' equity

811,823

795,721

745,675

Total liabilities and stockholders' equity

$

6,248,518

$

6,434,344

$

6,468,022

Net interest-earning assets

$

1,523,428

$

1,469,348

$

1,344,142

Fully tax-equivalent net interest income

46,814

48,572

49,598

Less: tax-equivalent adjustments

(770

)

(803

)

(789

)

Net interest income

$

46,044

$

47,769

$

48,809

Interest rate spread (1)(4)

2.91

%

2.95

%

2.91

%

Net interest margin (1)(5)

3.05

%

3.10

%

3.13

%

Average interest-earning assets to average

interest-bearing liabilities

133.36

%

130.54

%

127.09

%

Supplemental Information:

Total deposits, including noninterest-bearing

demand deposits

$

4,821,401

$

3,081

0.25

%

$

5,027,589

$

4,209

0.34

%

$

4,860,430

$

8,746

0.72

%

Total deposits and borrowings, including

noninterest-bearing demand deposits

$

5,382,026

$

6,572

0.48

%

$

5,588,214

$

7,662

0.55

%

$

5,664,711

$

12,797

0.90

%


____________________

(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 September 30, 2021, June 30, 2021, and September 30, 2020, yields on loans before tax-equivalent adjustments were 4.17%, 4.27% and 4.27%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 2.59%, 3.11% and 2.64%, respectively, and yields on total interest-earning assets before tax-equivalent adjustments were 3.43%, 3.54% and 3.89%, respectively. Interest rate spread before tax-equivalent adjustments for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020 was 2.86%, 2.90% and 2.86%, respectively, while net interest margin before tax-equivalent adjustments for the three months ended September 30, 2021, June 30, 2021 and September 30, 2020 was 3.00%, 3.05% and 3.08%, 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
NET INTEREST INCOME ANALYSIS
(Unaudited)

Nine Months Ended

September 30, 2021

September 30, 2020

Average
Balance

Interest (1)

Yield/
Cost (1)

Average
Balance

Interest (1)

Yield/
Cost (1)

(Dollars in thousands)

Assets:

Interest-earning assets:

Loans (2)

$

5,177,216

$

166,379

4.30

%

$

5,711,852

$

188,603

4.41

%

Securities and certificates of deposit

18,368

479

3.49

29,201

676

3.09

Other interest-earning assets (3)

1,095,483

1,286

0.16

495,054

2,753

0.74

Total interest-earning assets

6,291,067

168,144

3.57

6,236,107

192,032

4.11

Noninterest-earning assets

158,898

159,039

Total assets

$

6,449,965

$

6,395,146

Liabilities and stockholders' equity:

Interest-bearing liabilities:

Interest-bearing demand deposits

$

1,391,975

$

3,037

0.29

$

1,289,479

$

8,736

0.90

Money market deposits

867,744

1,577

0.24

728,024

4,551

0.84

Regular savings and other deposits

860,355

1,085

0.17

860,593

4,493

0.70

Certificates of deposit

1,105,381

7,320

0.89

1,356,139

18,326

1.81

Total interest-bearing deposits

4,225,455

13,019

0.41

4,234,235

36,106

1.14

Borrowings

596,646

10,535

2.36

738,058

12,390

2.24

Total interest-bearing liabilities

4,822,101

23,554

0.65

4,972,293

48,496

1.30

Noninterest-bearing demand deposits

775,951

630,072

Other noninterest-bearing liabilities

52,470

56,420

Total liabilities

5,650,522

5,658,785

Total stockholders' equity

796,443

736,361

Total liabilities and stockholders' equity

$

6,446,965

$

6,395,146

Net interest-earning assets

$

1,468,966

$

1,263,814

Fully tax-equivalent net interest income

144,590

143,536

Less: tax-equivalent adjustments

(2,377

)

(2,258

)

Net interest income

$

142,213

$

141,278

Interest rate spread (1)(4)

2.92

%

2.81

%

Net interest margin (1)(5)

3.07

%

3.07

%

Average interest-earning assets to average

interest-bearing liabilities

130.46

%

125.42

%

Supplemental Information:

Total deposits, including noninterest-bearing

demand deposits

$

5,001,406

$

13,019

0.35

%

$

4,864,307

$

36,106

0.99

%

Total deposits and borrowings, including

noninterest-bearing demand deposits

$

5,598,052

$

23,554

0.56

%

$

5,602,365

$

48,496

1.16

%


____________________

(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 nine months ended September 30, 2021 and 2020, yields on loans before tax-equivalent adjustments were 4.24%, and 4.36%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 3.18% and 2.84%, respectively, and yields on total interest-earning assets before tax-equivalent adjustments were 3.52% and 4.06%, respectively. Interest rate spread before tax-equivalent adjustments for the nine months ended September 30, 2021 and 2020 was 2.87% and 2.76%, respectively, while net interest margin before tax-equivalent adjustments for the nine months ended September 30, 2021 and 2020 was 3.02%, and 3.03%, 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

Nine Months Ended

September 30,
2021

June 30,
2021

September 30,
2020

September 30,
2021

September 30,
2020

Key Performance Ratios

Return on average assets (1)

1.17

%

1.03

%

1.03

%

1.22

%

0.98

%

Return on average equity (1)

9.03

8.32

8.94

9.91

8.50

Interest rate spread (1) (2)

2.91

2.95

2.91

2.92

2.81

Net interest margin (1) (3)

3.05

3.10

3.13

3.07

3.07

Non-interest expense to average assets (1)

1.57

1.74

1.41

1.61

1.51

Efficiency ratio (4)

47.53

53.18

43.69

50.11

48.10


September 30,
2021

June 30,
2021

December 31,
2020

September 30,
2020

(Dollars in thousands)

Asset Quality

Non-accrual loans:

One- to four-family

$

1,605

$

1,633

$

2,617

$

3,041

Home equity lines of credit

339

20

20

20

Commercial real estate

5,005

8,176

Commercial and industrial

635

527

541

Total non-accrual loans

6,949

10,464

3,164

3,602

Foreclosed assets

Total non-performing assets

$

6,949

$

10,464

$

3,164

$

3,602

Allowance for credit losses on loans/total loans

1.24

%

1.28

%

1.25

%

1.20

%

Allowance for credit losses on loans/non-accrual loans

875.65

614.49

2,175.22

1,877.82

Non-accrual loans/total loans

0.14

0.21

0.06

0.06

Non-accrual loans/total assets

0.11

0.17

0.05

0.05

Non-performing assets/total assets

0.11

0.17

0.05

0.05

Capital and Share Related

Stockholders' equity to total assets

13.28

%

12.74

%

11.61

%

11.39

%

Book value per share

$

15.44

$

15.23

$

14.67

$

14.28

Tangible book value per share (5)

$

15.02

$

14.81

$

14.25

$

13.85

Market value per share

$

20.76

$

20.46

$

14.91

$

10.35

Shares outstanding

52,711,409

52,608,747

52,415,061

52,413,120


____________________

(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, 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 and gains and losses on sale of assets. 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 49.99%, 55.16% and 43.58% for the quarters ended September 30, 2021, June 30, 2021 and September 30, 2020, respectively and 50.98% and 47.45% for the nine months ended September 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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