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 SUBSIDIARIESCONSOLIDATED 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 SUBSIDIARIESCONSOLIDATED 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 SUBSIDIARIESNET INTEREST INCOME ANALYSIS(Unaudited)

		Three Months Ended
		September 30, 2021														June 30, 2021															September 30, 2020
		AverageBalance				Interest(1)					Yield/Cost (1)(6)					AverageBalance				Interest(1)					Yield/Cost (1)(6)						AverageBalance					Interest(1)						Yield/Cost (1)(6)
		(Dollars in thousands)
Assets:
Interest-earning assets:
Loans (2)		$	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 SUBSIDIARIESNET INTEREST INCOME ANALYSIS(Unaudited)

		Nine Months Ended
		September 30, 2021														September 30, 2020
		AverageBalance				Interest (1)					Yield/Cost (1)					AverageBalance				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 SUBSIDIARIESSELECTED 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

Source: Meridian Bancorp, Inc.

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