EBSB - 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