EBSB - Meridian Bancorp Inc. Reports Record First Quarter Net Income; Rise in Total Deposits to $5 Billion on Growth in Core Deposits
BOSTON, April 23, 2019 (GLOBE NEWSWIRE) -- Meridian Bancorp, Inc. (the “Company” or “Meridian”) (NASDAQ: EBSB), the holding company for East Boston Savings Bank (the “Bank”), announced net income of $15.1 million, or $0.29 per diluted share, for the quarter ended March 31, 2019, up from $12.4 million, or $0.24 per diluted share, for the quarter ended December 31, 2018 and $12.0 million, or $0.23 per diluted share, for the quarter ended March 31, 2018. The Company’s return on average assets was 0.97% for the quarter ended March 31, 2019, up from 0.83% for the quarter ended December 31, 2018 and 0.90% for the quarter ended March 31, 2018. The Company’s return on average equity was 8.84% for the quarter ended March 31, 2019, up from 7.28% for the quarter ended December 31, 2018 and 7.35% for the quarter ended March 31, 2018.
Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, “I am pleased to report record first quarter net income of $15.1 million for 2019, up $3.1 million, or 26%, from the prior first quarter record set in 2018, and up $2.7 million, or 22%, from the fourth quarter of 2018. Following our growth records in the fourth quarter of 2018, we grew at a more moderate pace in the first quarter of 2019, with net loan growth of $115 million, or 2%, to $5.7 billion, while we reached the $5 billion milestone in total deposits with growth of $139 million, or 3%. We were especially gratified to see growth in core deposits of $160 million, or 5%, during the first quarter and $577 million, or 21%, over the past year to $3.4 billion at March 31, 2019 as we have expanded our Boston area retail banking network to 38 branches.”
The Company’s net interest income was $42.6 million for the quarter ended March 31, 2019, up $424,000, or 1.0%, from the quarter ended December 31, 2018 and $2.7 million, or 6.9%, from the quarter ended March 31, 2018. The interest rate spread and net interest margin on a tax-equivalent basis were 2.57% and 2.89%, respectively, for the quarter ended March 31, 2019 compared to 2.62% and 2.93%, respectively, for the quarter ended December 31, 2018 and 2.92% and 3.16%, respectively, for the quarter ended March 31, 2018. The increases in net interest income were primarily due to growth in average loan balances and yields on interest-earning assets, partially offset by increases in the average balances of total deposits and borrowings and the cost of funds for the quarter ended March 31, 2019 compared to the respective prior periods.
Total interest and dividend income increased to $64.5 million for the quarter ended March 31, 2019, up $2.8 million, or 4.5%, from the quarter ended December 31, 2018 and $12.5 million, or 24.0%, from the quarter ended March 31, 2018, primarily due to growth in the Company’s average loan balances to $5.695 billion. The Company’s yield on loans on a tax-equivalent basis was 4.44% for the quarter ended March 31, 2019, up five basis points from the quarter ended December 31, 2018 and up 15 basis points from the quarter ended March 31, 2018. The Company’s yield on interest-earning assets on a tax-equivalent basis was 4.34% for the quarter ended March 31, 2019, up eight basis points from the quarter ended December 31, 2018 and up 23 basis points from the quarter ended March 31, 2018.
Total interest expense increased to $21.9 million for the quarter ended March 31, 2019, up $2.3 million, or 12.0%, from the quarter ended December 31, 2018 and $9.7 million, or 80.0%, from the quarter ended March 31, 2018. Interest expense on deposits increased to $19.2 million for the quarter ended March 31, 2019, up $2.1 million, or 12.1%, from the quarter ended December 31, 2018 and $8.6 million, or 82.2%, from the quarter ended March 31, 2018 primarily due to growth in average total deposits to $4.914 billion and increases in the cost of average total deposits to 1.58% from 1.46% for the quarter ended December 31, 2018, and 1.04% for the quarter ended March 31, 2018. Interest expense on borrowings increased to $2.7 million for the quarter ended March 31, 2019, up $276,000, or 11.3%, from the quarter ended December 31, 2018 and $1.1 million, or 66.0%, from the quarter ended March 31, 2018 primarily due to increases in the average cost of borrowings to 1.91% from 1.67% for the quarter ended December 31, 2018, and 1.28% for the quarter ended March 31, 2018. The Company’s total cost of funds was 1.62% for the quarter ended March 31, 2019, up 13 basis points from the quarter ended December 31, 2018 and 56 basis points from the quarter ended March 31, 2018.
Mr. Gavegnano noted, “Our net interest income continues to rise on the strength of our recent organic loan and deposit growth. Since the end of 2015, our net loans have grown $2.7 billion for a compounded annual growth rate of 21%, while total deposits grew $2.3 billion for a compounded annual growth rate of 20%. Our yields on loans and other interest-earning assets have also steadily risen over the past year, minimizing the effect of the rise in our cost of funds on our net interest margin, which declined only four basis points to 2.89% for the first quarter of 2019 from the fourth quarter of 2018. We experienced a reversal of the margin compression within the first quarter and we believe there is significant potential for the margin to expand as the year goes on.”
The Company's provision for loan losses was $843,000 for the quarter ended March 31, 2019, down $2.7 million from the quarter ended December 31, 2018 and $1.3 million from the quarter ended March 31, 2018. The allowance for loan losses was $54.0 million or 0.94% of total loans at March 31, 2019, compared to $53.2 million or 0.94% of total loans at December 31, 2018, and $47.5 million or 0.96% of total loans at March 31, 2018. The changes in the allowance for loan losses coverage ratio were based on management’s assessment of loan portfolio growth and composition changes, declines in historical charge-off trends, reduced levels of problem loans and other improvements in asset quality trends.
Net charge-offs totaled $77,000 for the quarter ended March 31, 2019 compared to net recoveries of $59,000 for the quarter ended December 31, 2018 and net recoveries of $114,000 for the quarter ended March 31, 2018.
Non-accrual loans were $7.5 million, or 0.13% of total loans outstanding, at March 31, 2019; up $638,000, or 9.2%, from December 31, 2018; and down $487,000, or 6.1%, from March 31, 2018. Non-performing assets were $7.5 million, or 0.12% of total assets, at March 31, 2019, compared to $6.9 million, or 0.11% of total assets, at December 31, 2018, and $8.0 million, or 0.15% of total assets, at March 31, 2018.
Non-interest income was $3.8 million for the quarter ended March 31, 2019, up from $135,000 for the quarter ended December 31, 2018 and $2.3 million for the quarter ended March 31, 2018. Non-interest income increased $3.7 million compared to the quarter ended December 31, 2018, primarily due to a $1.3 million gain on marketable equity securities, net, reflecting increases in market valuations in the first quarter of 2019 compared to a $2.7 million loss on marketable equity securities, net, in the fourth quarter of 2018. Compared to the quarter ended March 31, 2018, non-interest income increased $1.5 million, or 64.1%, primarily due to a $1.3 million gain on marketable equity securities, net, in the first quarter of 2019 compared to a $537,000 loss on marketable equity securities, net, in the first quarter of 2018.
Non-interest expenses were $25.8 million, or 1.66% of average assets for the quarter ended March 31, 2019, compared to $23.6 million, or 1.59% of average assets for the quarter ended December 31, 2018 and $24.7 million, or 1.86% of average assets for the quarter ended March 31, 2018. Non-interest expenses increased $2.2 million, or 9.1%, compared to the quarter ended December 31, 2018, due primarily to increases of $984,000 in salaries and employee benefits, $436,000 in deposit insurance and $382,000 in occupancy and equipment. Non-interest expenses increased $1.1 million, or 4.5%, compared to the quarter ended March 31, 2018, due primarily to increases of $287,000 in data processing, $238,000 in salaries and employee benefits, and $215,000 in deposit insurance. The increases in salaries and employee benefits expenses reflect annual increases in employee compensation, payroll taxes and employee benefits during the first quarter of 2019. In addition, the increases in salaries and employee benefits, occupancy and equipment expenses and data processing include costs associated with the expansion of our branch network, including one new branch that opened late in the first quarter of 2018, and three new branch openings in the fourth quarter of 2018. The Company’s efficiency ratio was 57.20% for the quarter ended March 31, 2019 compared to 52.52% for the quarter ended December 31, 2018 and 57.62% for the quarter ended March 31, 2018.
Mr. Gavegnano added, “Our non-interest expenses increased only 4% for the first quarter of 2019 from the first quarter of 2018 despite the expansion of our branch network, with an increase of 9% compared to the fourth quarter reflecting annual increases to employee compensation and benefits and the seasonal nature of certain occupancy expenses. As a result, our efficiency ratio for the first quarter of 2019 improved slightly to 57.2% from 57.6% for the first quarter of 2018, with an increase from 52.5% for the fourth quarter of 2018. As we move forward with plans to open two new branches in Cambridge and Boston’s Brighton neighborhood in 2019 that will expand our branch network to 40 branches, we expect our entry into these attractive communities will lead to new business and consumer relationships and increase our market share in the Boston metropolitan area, with only minor increases to our operating expenses.”
The Company recorded a provision for income taxes of $4.7 million for the quarter ended March 31, 2019, reflecting an effective tax rate of 23.8%, compared to $2.7 million, or an effective tax rate of 18.2%, for the quarter ended December 31, 2018, and $3.3 million, or an effective tax rate of 21.6%, for the quarter ended March 31, 2018.
Total assets were $6.281 billion at March 31, 2019, up $102.7 million, or 1.7%, from $6.179 billion at December 31, 2018 and $820.7 million, or 15.0%, from $5.461 billion at March 31, 2018. Net loans were $5.708 billion at March 31, 2019, up $114.6 million, or 2.0%, from December 31, 2018, and $807.7 million, or 16.5%, from March 31, 2018. Loan originations totaled $268.2 million during the quarter ended March 31, 2019. The net increase in loans for the quarter ended March 31, 2019 was primarily due to increases of $39.1 million in construction loans, $38.9 million in commercial real estate loans, $25.8 million in multi-family loans, and $13.2 million in one- to four-family loans. Cash and due from banks was $344.3 million at March 31, 2019, a decrease of $27.7 million, or 7.5% from December 31, 2018. Securities, at fair value, were $31.7 million at March 31, 2019, an increase of $1.1 million, or 3.5%, from $30.6 million at December 31, 2018.
Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). During the quarter ended March 31, 2019, premises and equipment, net increased $17.1 million to $62.3 million and accrued expenses and other liabilities increased $15.3 million to $45.2 million at March 31, 2019, reflecting the recognition of operating lease assets and liabilities totaling $14.9 million based on the present value of future minimum lease payments as required by ASU No. 2016-02.
Total deposits were $5.023 billion at March 31, 2019, up $138.8 million, or 2.8%, from $4.884 billion at December 31, 2018 and $833.6 million, or 19.9%, from $4.189 billion at March 31, 2018. Core deposits, which exclude certificates of deposit, increased $160.0 million, or 5.0%, during the three months ended March 31, 2019 to $3.358 billion, or 66.9% of total deposits. Total borrowings were $526.0 million, down $60.9 million, or 10.4%, from December 31, 2018 and $56.6 million, or 9.7%, from March 31, 2018.
Total stockholders’ equity increased $11.7 million, or 1.7%, to $686.4 million at March 31, 2019 from $674.7 million at December 31, 2018, and $30.8 million, or 4.7%, from $655.6 million at March 31, 2018. The increase for the three months ended March 31, 2019 was primarily due to net income of $15.1 million and $1.8 million related to stock-based compensation plans, partially offset by the repurchase of 104,177 shares of the Company’s common stock related to the stock repurchase program at a total cost of $1.6 million and dividends of $0.07 per share totaling $3.6 million. Stockholders’ equity to assets was 10.93% at March 31, 2019, compared to 10.92% at December 31, 2018 and 12.01% at March 31, 2018. Book value per share increased to $12.82 at March 31, 2019 from $12.60 at December 31, 2018. Tangible book value per share increased to $12.39 at March 31, 2019 from $12.17 at December 31, 2018. Market price per share increased $1.37 or 9.6%, to $15.69 at March 31, 2019 from $14.32 at December 31, 2018. At March 31, 2019, the Company and the Bank continued to exceed all regulatory capital requirements.
The Company repurchased 104,177 shares of its stock at an average price of $15.81 during the quarter ended March 31, 2019, completing the repurchases of the 3,373,621 shares of its stock, at an average price of $14.90 per share, as authorized under the Company’s repurchase program adopted in August 2015 and amended in November 2018. On April 11, 2019, the Company announced that it had adopted a new stock repurchase program for up to 500,000 shares, or approximately 0.9% of its outstanding common stock.
Mr. Gavegnano concluded, “We believe our repurchase of 3.4 million shares subsequent to the 2014 stock offering, the authorization to repurchase an additional 500,000 shares and our ongoing quarterly dividend to stockholders significantly enhance stockholder value. We are also working to further enhance our profitability through prudent loan and deposit growth, strategic expansion within our lucrative Boston market area and implementation of enhancements designed to improve operating efficiency.”
Meridian Bancorp, Inc. is the holding company for East Boston Savings Bank. East Boston Savings Bank, a Massachusetts-chartered stock savings bank founded in 1848, operates 38 branches in the greater Boston metropolitan area, including 37 full-service locations and one mobile branch. We offer a variety of deposit and loan products to individuals and businesses located in our primary market, which consists of Essex, Middlesex, Norfolk and Suffolk Counties, Massachusetts. For additional information, visit www.ebsb.com.
Forward Looking Statements
Certain statements herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of Meridian Bancorp, Inc.’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, general economic conditions, changes in interest rates, regulatory considerations, and competition and the risk factors described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Meridian Bancorp, Inc.’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.
MERIDIAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
| March 31, 2019 |
| December 31, 2018 |
| March 31, 2018 |
| (Dollars in thousands) |
| ASSETS |
| Cash and due from banks |
| $ |
| 344,259 |
| $ |
| 371,995 |
| $ |
| 316,372 |
| Certificates of deposit |
| 5,247 |
| 5,247 |
| 44,133 |
| Securities available for sale, at fair value |
| 16,890 |
| 17,159 |
| 19,507 |
| Marketable equity securities, at fair value |
| 14,763 |
| 13,437 |
| 14,722 |
| Federal Home Loan Bank stock, at cost |
| 26,377 |
| 29,187 |
| 27,572 |
| Loans held for sale |
| 989 |
| 409 |
| 1,136 |
| Loans: |
| One- to four-family |
| 660,551 |
| 647,367 |
| 614,043 |
| Home equity lines of credit |
| 50,960 |
| 50,087 |
| 45,193 |
| Multi-family |
| 1,036,331 |
| 1,010,521 |
| 858,894 |
| Commercial real estate |
| 2,660,916 |
| 2,621,979 |
| 2,253,014 |
| Construction |
| 726,061 |
| 686,948 |
| 638,751 |
| Commercial and industrial |
| 622,431 |
| 625,018 |
| 533,056 |
| Consumer |
| 11,095 |
| 10,953 |
| 10,466 |
| Total loans |
| 5,768,345 |
| 5,652,873 |
| 4,953,417 |
| Allowance for loan losses |
| (53,997) |
| (53,231) |
| (47,488) |
| Net deferred loan origination fees |
| (6,336) |
| (6,239) |
| (5,593) |
| Loans, net |
| 5,708,012 |
| 5,593,403 |
| 4,900,336 |
| Bank-owned life insurance |
| 41,015 |
| 40,734 |
| 40,608 |
| Premises and equipment, net |
| 62,279 |
| 45,140 |
| 41,415 |
| Accrued interest receivable |
| 14,979 |
| 14,267 |
| 12,281 |
| Deferred tax asset, net |
| 18,210 |
| 18,196 |
| 15,737 |
| Goodwill |
| 20,378 |
| 20,378 |
| 19,638 |
| Core deposit intangible |
| 2,517 |
| 2,653 |
| 3,096 |
| Other assets |
| 5,441 |
| 6,478 |
| 4,145 |
| Total assets |
| $ |
| 6,281,356 |
| $ |
| 6,178,683 |
| $ |
| 5,460,698 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
| Deposits: |
| Non interest-bearing demand deposits |
| $ |
| 499,536 |
| $ |
| 483,777 |
| $ |
| 487,096 |
| Interest-bearing demand deposits |
| 1,215,105 |
| 1,190,346 |
| 1,098,646 |
| Money market deposits |
| 685,078 |
| 729,174 |
| 851,702 |
| Regular savings and other deposits |
| 958,348 |
| 794,813 |
| 343,466 |
| Certificates of deposit |
| 1,664,943 |
| 1,686,074 |
| 1,408,464 |
| Total deposits |
| 5,023,010 |
| 4,884,184 |
| 4,189,374 |
| Short-term borrowings |
| — |
| 50,000 |
| — |
| Long-term debt |
| 525,985 |
| 536,880 |
| 582,561 |
| Accrued expenses and other liabilities |
| 45,973 |
| 32,965 |
| 33,156 |
| Total liabilities |
| 5,594,968 |
| 5,504,029 |
| 4,805,091 |
| Stockholders' equity: |
| Preferred stock, $0.01 par value, 50,000,000 shares authorized; none issued |
| — |
| — |
| — |
| Common stock, $0.01 par value, 100,000,000 shares authorized; 53,542,646, 53,541,429, and 54,068,874 shares issued at March 31, 2019, December 31, 2018, and March 31, 2018, respectively |
| 535 |
| 535 |
| 540 |
| Additional paid-in capital |
| 378,410 |
| 378,583 |
| 395,531 |
| Retained earnings |
| 325,023 |
| 313,521 |
| 278,450 |
| Accumulated other comprehensive loss |
| (164) |
| (348) |
| (616) |
| Unearned compensation - ESOP, 2,404,831, 2,435,272, and 2,526,595 shares at March 31, 2019, December 31, 2018, and March 31, 2018, respectively |
| (17,416) |
| (17,637) |
| (18,298) |
| Total stockholders' equity |
| 686,388 |
| 674,654 |
| 655,607 |
| Total liabilities and stockholders' equity |
| $ |
| 6,281,356 |
| $ |
| 6,178,683 |
| $ |
| 5,460,698 |
MERIDIAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)
| Three Months Ended |
| March 31, 2019 |
| December 31, 2018 |
| March 31, 2018 |
| (Dollars in thousands, except per share amounts) |
| Interest and dividend income: |
| Interest and fees on loans |
| $ |
| 61,641 |
| $ |
| 59,424 |
| $ |
| 49,985 |
| Interest on debt securities: |
| Taxable |
| 110 |
| 115 |
| 126 |
| Tax-exempt |
| 13 |
| 13 |
| 15 |
| Dividends on equity securities |
| 105 |
| 121 |
| 148 |
| Interest on certificates of deposit |
| 27 |
| 82 |
| 203 |
| Other interest and dividend income |
| 2,577 |
| 1,957 |
| 1,522 |
| Total interest and dividend income |
| 64,473 |
| 61,712 |
| 51,999 |
| Interest expense: |
| Interest on deposits |
| 19,151 |
| 17,090 |
| 10,509 |
| Interest on short-term borrowings |
| 295 |
| 183 |
| — |
| Interest on long-term debt |
| 2,430 |
| 2,266 |
| 1,642 |
| Total interest expense |
| 21,876 |
| 19,539 |
| 12,151 |
| Net interest income |
| 42,597 |
| 42,173 |
| 39,848 |
| Provision for loan losses |
| 843 |
| 3,563 |
| 2,189 |
| Net interest income, after provision for loan losses |
| 41,754 |
| 38,610 |
| 37,659 |
| Non-interest income: |
| Customer service fees |
| 2,097 |
| 2,371 |
| 2,170 |
| Loan fees |
| 77 |
| 41 |
| 295 |
| Mortgage banking gains, net |
| 40 |
| 25 |
| 133 |
| Gain (loss) on marketable equity securities, net |
| 1,326 |
| (2,698) |
| (537) |
| Income from bank-owned life insurance |
| 281 |
| 281 |
| 272 |
| Gain on life insurance distribution |
| — |
| 110 |
| — |
| Other income |
| 7 |
| 5 |
| — |
| Total non-interest income |
| 3,828 |
| 135 |
| 2,333 |
| Non-interest expenses: |
| Salaries and employee benefits |
| 15,632 |
| 14,648 |
| 15,394 |
| Occupancy and equipment |
| 3,596 |
| 3,214 |
| 3,539 |
| Data processing |
| 1,970 |
| 1,832 |
| 1,683 |
| Marketing and advertising |
| 1,162 |
| 1,252 |
| 967 |
| Professional services |
| 860 |
| 735 |
| 965 |
| Deposit insurance |
| 1,012 |
| 576 |
| 797 |
| Merger and acquisition |
| — |
| — |
| 74 |
| Other general and administrative |
| 1,564 |
| 1,380 |
| 1,270 |
| Total non-interest expenses |
| 25,796 |
| 23,637 |
| 24,689 |
| Income before income taxes |
| 19,786 |
| 15,108 |
| 15,303 |
| Provision for income taxes |
| 4,715 |
| 2,750 |
| 3,309 |
| Net income |
| $ |
| 15,071 |
| $ |
| 12,358 |
| $ |
| 11,994 |
| Earnings per share: |
| Basic |
| $ |
| 0.29 |
| $ |
| 0.24 |
| $ |
| 0.23 |
| Diluted |
| $ |
| 0.29 |
| $ |
| 0.24 |
| $ |
| 0.23 |
| Weighted average shares outstanding: |
| Basic |
| 51,120,599 |
| 51,530,878 |
| 51,531,835 |
| Diluted |
| 51,467,917 |
| 51,955,139 |
| 53,083,815 |
MERIDIAN BANCORP, INC. AND SUBSIDIARIES
NET INTEREST INCOME ANALYSIS
(Unaudited)
| Three Months Ended |
| March 31, 2019 |
| December 31, 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 SUBSIDIARIES
SELECTED FINANCIAL HIGHLIGHTS
(Unaudited)
| Three Months Ended |
| March 31, 2019 |
| December 31, 2018 |
| March 31, 2018 |
| Key Performance Ratios |
| Return on average assets (1) |
| 0.97% |
| 0.83% |
| 0.90% |
| Return on average equity (1) |
| 8.84 |
| 7.28 |
| 7.35 |
| Interest rate spread (1) (2) |
| 2.57 |
| 2.62 |
| 2.92 |
| Net interest margin (1) (3) |
| 2.89 |
| 2.93 |
| 3.16 |
| Non-interest expense to average assets (1) |
| 1.66 |
| 1.59 |
| 1.86 |
| Efficiency ratio (4) |
| 57.20 |
| 52.52 |
| 57.62 |
| March 31, 2019 |
| December 31, 2018 |
| March 31, 2018 |
| (Dollars in thousands) |
| Asset Quality |
| Non-accrual loans: |
| One- to four-family |
| $ |
| 6,115 |
| $ |
| 5,888 |
| $ |
| 6,568 |
| Home equity lines of credit |
| — |
| — |
| 562 |
| Multi-family |
| 252 |
| — |
| — |
| Commercial real estate |
| 640 |
| 342 |
| 378 |
| Commercial and industrial |
| 537 |
| 676 |
| 523 |
| Total non-accrual loans |
| 7,544 |
| 6,906 |
| 8,031 |
| Foreclosed assets |
| — |
| — |
| — |
| Total non-performing assets |
| $ |
| 7,544 |
| $ |
| 6,906 |
| $ |
| 8,031 |
| Allowance for loan losses/total loans |
| 0.94% |
| 0.94% |
| 0.96% |
| Allowance for loan losses/non-accrual loans |
| 715.76 |
| 770.79 |
| 591.31 |
| Non-accrual loans/total loans |
| 0.13 |
| 0.12 |
| 0.16 |
| Non-accrual loans/total assets |
| 0.12 |
| 0.11 |
| 0.15 |
| Non-performing assets/total assets |
| 0.12 |
| 0.11 |
| 0.15 |
| Capital and Share Related |
| Stockholders' equity to total assets |
| 10.93% |
| 10.92% |
| 12.01% |
| Book value per share |
| $ |
| 12.82 |
| $ |
| 12.60 |
| $ |
| 12.13 |
| Tangible book value per share (5) |
| $ |
| 12.39 |
| $ |
| 12.17 |
| $ |
| 11.70 |
| Market value per share |
| $ |
| 15.69 |
| $ |
| 14.32 |
| $ |
| 20.15 |
| Shares outstanding |
| 53,542,646 |
| 53,541,429 |
| 54,068,874 |
______________
| (1) |
| Quarterly amounts are annualized. |
| (2) |
| Interest rate spread represents the difference between the tax-equivalent yield on interest-earning assets and the cost of interest-bearing liabilities. |
| (3) |
| Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets. |
| (4) |
| The efficiency ratio is a non-GAAP measure representing non-interest expense, excluding merger and acquisition expenses, divided by the sum of net interest income and non-interest income excluding gains and losses on marketable equity securities. The efficiency ratio is a common measure used by banks to understand expenses related to the generation of revenue. We have removed gains and losses on marketable equity securities as management deems them to be either discretionary or market driven and not representative of operating performance. We have removed merger and acquisition expenses as management deems them to be not representative of operating performance. Presented on a basis including merger and acquisition expenses and gains and losses on marketable equity securities, the efficiency ratio was 55.56%, 55.87% and 58.53% for the quarters ended March 31, 2019, December 31, 2018, and March 31, 2018, respectively. |
| (5) |
| Tangible book value per share represents total stockholders’ equity less goodwill and other intangible assets divided by the number of shares outstanding. |
Contact: Richard J. Gavegnano, Chairman, President and Chief Executive Officer
(978) 977-2211