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Form 8-K Meridian Bancorp, Inc. For: Apr 22

April 22, 2021 4:46 PM EDT

Exhibit 99

 

 

Meridian Bancorp, Inc. Announces Record Quarterly Net Income of $24 Million

 

 

Contact: Richard J. Gavegnano, Chairman, President and Chief Executive Officer

(978) 977-2211

Boston, Massachusetts (April 22, 2021): Meridian Bancorp, Inc. (the “Company” or “Meridian”) (NASDAQ: EBSB), the holding company for East Boston Savings Bank (the “Bank”), announced net income of $24.3 million, or $0.48 per diluted share, for the quarter ended March 31, 2021, compared to $18.1 million, or $0.36 per diluted share for the quarter ended December 31, 2020, and $13.0 million, or $0.25 per diluted share, for the quarter ended March 31, 2020. The Company’s return on average assets was 1.46% for the quarter ended March 31, 2021, compared to 1.10% for the quarter ended December 31, 2020, and 0.82% for the quarter ended March 31, 2020. The Company’s return on average equity was 12.45% for the quarter ended March 31, 2021, compared to 9.51% for the quarter ended December 31, 2020, and 7.09% for the quarter ended March 31, 2020.

Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, “I am pleased to report record quarterly net income of $24.3 million for the first quarter of 2021, representing increases of $6.2 million, or 34.2% compared to the fourth quarter of 2020, and $11.3 million, or 87.4%, compared to the first quarter of 2020. These earnings reflect a 7.3% increase in net interest income for the first quarter of 2021 compared to the first quarter of 2020, improving the net interest margin to 3.07% from 2.99% over the same period, a result of management’s focus on maintaining loan yields while aggressively decreasing our cost of funds. Also, strong asset quality and changes in the volume and mix of our loan portfolio resulted in a decrease in our percentage of allowance to total loans to 1.20% at March 31, 2021, from 1.25% at December 31, 2020, due to a provision reversal of $5.2 million during the first quarter of 2021.”  

The Company’s net interest income was $48.4 million for the quarter ended March 31, 2021, an increase of $3.3 million, or 7.3%, from the quarter ended March 31, 2020. The interest rate spread and net interest margin on a tax-equivalent basis were 2.91% and 3.07%, respectively, for the quarter ended March 31, 2021 compared to 2.67% and 2.99%, respectively, for the quarter ended March 31, 2020. Total interest and dividend income totaled $57.7 million for the quarter ended March 31, 2021, a decrease of $8.3 million, or 12.6% from the quarter ended March 31, 2020. The Company’s yield on interest-earning assets on a tax-equivalent basis was 3.65% for the quarter ended March 31, 2021, down 70 basis points from the quarter ended March 31, 2020. Total interest expense totaled $9.3 million for the quarter ended March 31, 2021, a decrease of $11.6 million, or 55.4%, from the quarter ended March 31, 2020. Interest expense on deposits decreased to $5.7 million for the quarter ended March 31, 2021, a decrease of $11.0 million, or 65.8%, from the quarter ended March 31, 2020 primarily due to a decrease in the cost of average total deposits to 0.45% from 1.38% for the quarter ended March 31, 2020. The Company’s total cost of funds was 0.65% for the quarter ended March 31, 2021, a decrease of 87 basis points from 1.52% for the quarter ended March 31, 2020.  

The Company recognized a reversal of $5.2 million in its provision for credit losses for the quarter ended March 31, 2021, compared to a provision of $8.9 million for the quarter ended December 31, 2020 and $725,000 for the quarter ended March 31, 2020. The allowance for credit losses on loans was $63.4 million or 1.20% of total loans at March 31, 2021, compared to $68.8 million or 1.25% of total loans at December 31, 2020, and $50.9 million or 0.89% of total loans at March 31, 2020. Net charge-offs totaled $152,000 for the quarter ended March 31, 2021 and non-performing assets were $3.1 million, or 0.05% of total assets, at March 31, 2021, compared to $3.2 million, or 0.05% of total assets, at March 31, 2020.

Non-interest income was $4.9 million for the quarter ended March 31, 2021, an increase of $5.8 million from an $831,000 loss for the quarter ended March 31, 2020, due primarily to a $4.8 million in valuation increase on marketable equity securities, net, and $1.3 million in gains realized on marketable equity securities, net, sold during the period, partially offset by a decrease of $579,000 in loan fees. Non-interest expenses were $25.5 million, or 1.53% of average assets for the quarter ended March 31, 2021, compared to $26.3 million, or 1.66% of average assets for the quarter ended March 31, 2020, a decrease of $777,000, or 3.0%. The Company’s efficiency ratio was 49.55% for the quarter ended March 31, 2021 compared to 54.18% for the quarter ended March 31, 2020. The Company recorded a provision for income taxes of $8.7 million for the quarter ended March 31, 2021, reflecting an effective tax rate of 26.4%, compared to $4.2 million, or an effective tax rate of 24.6%, for the quarter ended March 31, 2020.


 

Total assets were $6.504 billion at March 31, 2021, down $115.6 million, or 1.8%, from $6.620 billion at December 31, 2020. Net loans were $5.224 billion at March 31, 2021 down $219.8 million, or 4.0%, from December 31, 2020, despite loan originations of $271.9 million during the quarter ended March 31, 2021. The net decrease in loans for the three months ended March 31, 2021 was primarily due to decreases of $105.5 million in construction loans, $79.9 million in commercial real estate loans and $46.7 million in one- to four-family loans, partially offset by a net increase of $14.4 million in commercial and industrial loans, which includes the origination of $52.4 million in PPP loans during the quarter ended March 31, 2021. The allowance for credit losses on loans decreased $5.4 million, or 7.8%, to $63.4 million during the quarter ended March 31, 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 $5.097 billion at March 31, 2021, up $16.2 million, or 0.3%, from $5.081 billion at December 31, 2020. Core deposits, which exclude certificates of deposit, increased $74.8 million, or 1.9%, during the quarter ended March 31, 2021 to $3.937 billion, or 77.2% of total deposits, compared to 76.0% at December 31, 2020. Certificates of deposit decreased $58.6 million during the quarter ended March 31, 2021, inclusive of a $59.9 million decrease in brokered deposits. Total borrowings were $560.6 million at March 31, 2021, down $147.6 million, or 20.8%, from December 31, 2020, primarily due to the payoffs of $50.0 million in matured advances from the FHLB and all remaining funds from the Federal Reserve’s PPPLF program.

Total stockholders’ equity increased $20.2 million, or 2.6%, to $789.1 million at March 31, 2021 from $768.9 million at December 31, 2020. The increase for the quarter ended March 31, 2021 was primarily due to net income of $24.3 million, partially offset by dividends of $0.10 per share totaling $5.0 million. Stockholders’ equity to assets was 12.13% at March 31, 2021, compared to 11.61% at December 31, 2020. Tangible book value per share increased to $14.63 at March 31, 2021 from $14.25 at December 31, 2020. Market price per share increased 23.5% to $18.42 at March 31, 2021 from $14.91 at December 31, 2020. The Company and the Bank exceeded the minimum requirement to be considered well capitalized at March 31, 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.

2


 

MERIDIAN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

March 31,

2021

 

 

December 31,

2020

 

 

March 31,

2020

 

 

 

 

(Dollars in thousands)

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and due from banks

 

$

1,034,107

 

 

$

914,586

 

 

$

457,048

 

 

Certificates of deposit

 

 

 

 

 

 

 

 

247

 

 

Securities available for sale, at fair value

 

 

10,518

 

 

 

11,326

 

 

 

13,820

 

 

Marketable equity securities, at fair value

 

 

8,900

 

 

 

12,189

 

 

 

13,130

 

 

Federal Home Loan Bank stock, at cost

 

 

28,447

 

 

 

30,658

 

 

 

33,278

 

 

Loans held for sale

 

 

7,422

 

 

 

8,224

 

 

 

3,403

 

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

One- to four-family

 

 

517,442

 

 

 

564,146

 

 

 

657,245

 

 

Home equity lines of credit

 

 

64,370

 

 

 

68,721

 

 

 

78,016

 

 

Multi-family

 

 

878,331

 

 

 

880,552

 

 

 

972,122

 

 

Commercial real estate

 

 

2,419,715

 

 

 

2,499,660

 

 

 

2,622,379

 

 

Construction

 

 

625,961

 

 

 

731,432

 

 

 

716,477

 

 

Commercial and industrial

 

 

779,603

 

 

 

765,195

 

 

 

638,695

 

 

Consumer

 

 

10,307

 

 

 

10,707

 

 

 

11,888

 

 

Total loans

 

 

5,295,729

 

 

 

5,520,413

 

 

 

5,696,822

 

 

Allowance for credit losses on loans

 

 

(63,436

)

 

 

(68,824

)

 

 

(50,946

)

 

Net deferred loan origination fees

 

 

(8,298

)

 

 

(7,784

)

 

 

(6,021

)

 

Loans, net

 

 

5,223,995

 

 

 

5,443,805

 

 

 

5,639,855

 

 

Bank-owned life insurance

 

 

42,138

 

 

 

41,877

 

 

 

41,061

 

 

Premises and equipment, net

 

 

65,394

 

 

 

66,850

 

 

 

67,527

 

 

Accrued interest receivable

 

 

22,498

 

 

 

23,173

 

 

 

13,868

 

 

Deferred tax asset, net

 

 

21,418

 

 

 

21,355

 

 

 

16,782

 

 

Goodwill

 

 

20,378

 

 

 

20,378

 

 

 

20,378

 

 

Core deposit intangible

 

 

1,548

 

 

 

1,651

 

 

 

2,005

 

 

Other assets

 

 

17,162

 

 

 

23,776

 

 

 

26,152

 

 

Total assets

 

$

6,503,925

 

 

$

6,619,848

 

 

$

6,348,554

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

Deposits:

 

 

 

 

 

 

 

 

 

 

 

 

 

Non interest-bearing demand deposits

 

$

751,809

 

 

$

711,573

 

 

$

572,847

 

 

Interest-bearing demand deposits

 

 

1,461,236

 

 

 

1,364,548

 

 

 

1,292,384

 

 

Money market deposits

 

 

852,747

 

 

 

930,507

 

 

 

699,026

 

 

Regular savings and other deposits

 

 

870,961

 

 

 

855,329

 

 

 

867,536

 

 

Certificates of deposit

 

 

1,160,616

 

 

 

1,219,210

 

 

 

1,390,156

 

 

Total deposits

 

 

5,097,369

 

 

 

5,081,167

 

 

 

4,821,949

 

 

Short-term borrowings

 

 

 

 

 

 

 

 

25,000

 

 

Long-term debt

 

 

560,625

 

 

 

708,245

 

 

 

720,873

 

 

Accrued expenses and other liabilities

 

 

56,847

 

 

 

61,551

 

 

 

61,111

 

 

Total liabilities

 

 

5,714,841

 

 

 

5,850,963

 

 

 

5,628,933

 

 

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; 52,430,554, 52,415,061 and 52,402,395 shares issued at March 31, 2021, December 31, 2020 and March 31, 2020, respectively

 

 

524

 

 

 

524

 

 

 

524

 

 

Additional paid-in capital

 

 

364,751

 

 

 

363,995

 

 

 

360,901

 

 

Retained earnings

 

 

439,593

 

 

 

420,297

 

 

 

374,712

 

 

Accumulated other comprehensive income (loss)

 

 

(131

)

 

 

(58

)

 

 

19

 

 

Unearned compensation - ESOP; 2,161,304, 2,191,745 and 2,283,068 shares at March 31, 2021, December 31, 2020 and March 31, 2020, respectively

 

 

(15,653

)

 

 

(15,873

)

 

 

(16,535

)

 

Total stockholders' equity

 

 

789,084

 

 

 

768,885

 

 

 

719,621

 

 

Total liabilities and stockholders' equity

 

$

6,503,925

 

 

$

6,619,848

 

 

$

6,348,554

 

 

 

3


 

 

MERIDIAN BANCORP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF NET INCOME

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

2021

 

 

December 31,

2020

 

 

March 31,

2020

 

 

 

(Dollars in thousands, except per share amounts)

 

Interest and dividend income:

 

 

 

 

 

 

 

 

 

 

 

 

Interest and fees on loans

 

$

57,162

 

 

$

61,599

 

 

$

64,037

 

Interest on debt securities

 

 

65

 

 

 

68

 

 

 

100

 

Dividends on marketable equity securities

 

 

124

 

 

 

158

 

 

 

94

 

Interest on certificates of deposit

 

 

 

 

 

 

 

 

1

 

Other interest and dividend income

 

 

370

 

 

 

514

 

 

 

1,786

 

Total interest and dividend income

 

 

57,721

 

 

 

62,339

 

 

 

66,018

 

Interest expense:

 

 

 

 

 

 

 

 

 

 

 

 

Interest on deposits

 

 

5,729

 

 

 

6,883

 

 

 

16,769

 

Interest on borrowings

 

 

3,591

 

 

 

4,001

 

 

 

4,151

 

Total interest expense

 

 

9,320

 

 

 

10,884

 

 

 

20,920

 

Net interest income

 

 

48,401

 

 

 

51,455

 

 

 

45,098

 

Provision (reversal) for credit losses

 

 

(5,236

)

 

 

8,927

 

 

 

725

 

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

 

 

53,637

 

 

 

42,528

 

 

 

44,373

 

Non-interest income:

 

 

 

 

 

 

 

 

 

 

 

 

Customer service fees

 

 

2,199

 

 

 

2,355

 

 

 

2,097

 

Loan fees (costs)

 

 

95

 

 

 

(422

)

 

 

674

 

Mortgage banking gains, net

 

 

582

 

 

 

728

 

 

 

411

 

Gain (loss) on marketable equity securities, net

 

 

1,785

 

 

 

2,853

 

 

 

(4,344

)

Income from bank-owned life insurance

 

 

261

 

 

 

271

 

 

 

297

 

Other income

 

 

9

 

 

 

82

 

 

 

34

 

Total non-interest income

 

 

4,931

 

 

 

5,867

 

 

 

(831

)

Non-interest expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Salaries and employee benefits

 

 

15,516

 

 

 

14,704

 

 

 

15,914

 

Occupancy and equipment

 

 

4,231

 

 

 

3,833

 

 

 

3,924

 

Data processing

 

 

2,241

 

 

 

2,205

 

 

 

2,137

 

Marketing and advertising

 

 

896

 

 

 

1,165

 

 

 

1,230

 

Professional services

 

 

730

 

 

 

594

 

 

 

997

 

Deposit insurance

 

 

513

 

 

 

404

 

 

 

669

 

Other general and administrative

 

 

1,416

 

 

 

1,189

 

 

 

1,449

 

Total non-interest expenses

 

 

25,543

 

 

 

24,094

 

 

 

26,320

 

Income before income taxes

 

 

33,025

 

 

 

24,301

 

 

 

17,222

 

Provision for income taxes

 

 

8,705

 

 

 

6,180

 

 

 

4,245

 

Net income

 

$

24,320

 

 

$

18,121

 

 

$

12,977

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.48

 

 

$

0.36

 

 

$

0.26

 

Diluted

 

$

0.48

 

 

$

0.36

 

 

$

0.25

 

Weighted average shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

50,239,611

 

 

 

50,201,720

 

 

 

50,634,983

 

Diluted

 

 

50,565,459

 

 

 

50,295,295

 

 

 

50,920,259

 

 

4


 

 

MERIDIAN BANCORP, INC. AND SUBSIDIARIES

NET INTEREST INCOME ANALYSIS

(Unaudited)

 

 

 

Three Months Ended

 

 

March 31, 2021

 

December 31, 2020

 

March 31, 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)

 

$

5,429,311

 

 

$

57,954

 

 

 

 

4.33

 

%

 

$

5,613,834

 

 

$

62,400

 

 

 

 

4.42

 

%

 

$

5,741,852

 

 

$

64,758

 

 

 

 

4.54

 

%

Securities and certificates of deposit

 

 

20,839

 

 

 

208

 

 

 

 

4.05

 

 

 

 

25,855

 

 

 

258

 

 

 

 

3.97

 

 

 

 

29,290

 

 

 

211

 

 

 

 

2.90

 

 

Other interest-earning assets (3)

 

 

1,057,264

 

 

 

370

 

 

 

 

0.14

 

 

 

 

777,307

 

 

 

514

 

 

 

 

0.26

 

 

 

 

400,315

 

 

 

1,786

 

 

 

 

1.79

 

 

Total interest-earning assets

 

 

6,507,414

 

 

 

58,532

 

 

 

 

3.65

 

 

 

 

6,416,996

 

 

 

63,172

 

 

 

 

3.92

 

 

 

 

6,171,457

 

 

 

66,755

 

 

 

 

4.35

 

 

Noninterest-earning assets

 

 

155,169

 

 

 

 

 

 

 

 

 

 

 

 

 

164,339

 

 

 

 

 

 

 

 

 

 

 

 

 

157,398

 

 

 

 

 

 

 

 

 

 

 

Total assets

 

$

6,662,583

 

 

 

 

 

 

 

 

 

 

 

 

$

6,581,335

 

 

 

 

 

 

 

 

 

 

 

 

$

6,328,855

 

 

 

 

 

 

 

 

 

 

 

Liabilities and stockholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest-bearing demand deposits

 

$

1,462,239

 

 

$

1,408

 

 

 

 

0.39

 

 

 

$

1,362,686

 

 

$

1,727

 

 

 

 

0.50

 

 

 

$

1,280,003

 

 

$

4,497

 

 

 

 

1.41

 

 

Money market deposits

 

 

877,613

 

 

 

780

 

 

 

 

0.36

 

 

 

 

839,992

 

 

 

1,026

 

 

 

 

0.49

 

 

 

 

691,897

 

 

 

2,055

 

 

 

 

1.19

 

 

Regular savings and other deposits

 

 

861,439

 

 

 

536

 

 

 

 

0.25

 

 

 

 

851,711

 

 

 

729

 

 

 

 

0.34

 

 

 

 

906,100

 

 

 

2,531

 

 

 

 

1.12

 

 

Certificates of deposit

 

 

1,223,333

 

 

 

3,005

 

 

 

 

1.00

 

 

 

 

1,221,585

 

 

 

3,401

 

 

 

 

1.11

 

 

 

 

1,475,016

 

 

 

7,686

 

 

 

 

2.10

 

 

Total interest-bearing deposits

 

 

4,424,624

 

 

 

5,729

 

 

 

 

0.53

 

 

 

 

4,275,974

 

 

 

6,883

 

 

 

 

0.64

 

 

 

 

4,353,016

 

 

 

16,769

 

 

 

 

1.55

 

 

Borrowings

 

 

666,856

 

 

 

3,591

 

 

 

 

2.18

 

 

 

 

787,406

 

 

 

4,001

 

 

 

 

2.02

 

 

 

 

654,740

 

 

 

4,151

 

 

 

 

2.55

 

 

Total interest-bearing liabilities

 

 

5,091,480

 

 

 

9,320

 

 

 

 

0.74

 

 

 

 

5,063,380

 

 

 

10,884

 

 

 

 

0.86

 

 

 

 

5,007,756

 

 

 

20,920

 

 

 

 

1.68

 

 

Noninterest-bearing demand deposits

 

 

734,316

 

 

 

 

 

 

 

 

 

 

 

 

 

700,341

 

 

 

 

 

 

 

 

 

 

 

 

 

535,182

 

 

 

 

 

 

 

 

 

 

 

Other noninterest-bearing liabilities

 

 

55,337

 

 

 

 

 

 

 

 

 

 

 

 

 

55,742

 

 

 

 

 

 

 

 

 

 

 

 

 

53,688

 

 

 

 

 

 

 

 

 

 

 

Total liabilities

 

 

5,881,133

 

 

 

 

 

 

 

 

 

 

 

 

 

5,819,463

 

 

 

 

 

 

 

 

 

 

 

 

 

5,596,626

 

 

 

 

 

 

 

 

 

 

 

Total stockholders' equity

 

 

781,450

 

 

 

 

 

 

 

 

 

 

 

 

 

761,872

 

 

 

 

 

 

 

 

 

 

 

 

 

732,229

 

 

 

 

 

 

 

 

 

 

 

Total liabilities and stockholders' equity

 

$

6,662,583

 

 

 

 

 

 

 

 

 

 

 

 

$

6,581,335

 

 

 

 

 

 

 

 

 

 

 

 

$

6,328,855

 

 

 

 

 

 

 

 

 

 

 

Net interest-earning assets

 

$

1,415,934

 

 

 

 

 

 

 

 

 

 

 

 

$

1,353,616

 

 

 

 

 

 

 

 

 

 

 

 

$

1,163,701

 

 

 

 

 

 

 

 

 

 

 

Fully tax-equivalent net interest income

 

 

 

 

 

 

49,212

 

 

 

 

 

 

 

 

 

 

 

 

 

52,288

 

 

 

 

 

 

 

 

 

 

 

 

 

45,835

 

 

 

 

 

 

 

Less: tax-equivalent adjustments

 

 

 

 

 

 

(811

)

 

 

 

 

 

 

 

 

 

 

 

 

(833

)

 

 

 

 

 

 

 

 

 

 

 

 

(737

)

 

 

 

 

 

 

Net interest income

 

 

 

 

 

$

48,401

 

 

 

 

 

 

 

 

 

 

 

 

$

51,455

 

 

 

 

 

 

 

 

 

 

 

 

$

45,098

 

 

 

 

 

 

 

Interest rate spread (1)(4)

 

 

 

 

 

 

 

 

 

 

 

2.91

 

%

 

 

 

 

 

 

 

 

 

 

 

3.06

 

%

 

 

 

 

 

 

 

 

 

 

 

2.67

 

%

Net interest margin (1)(5)

 

 

 

 

 

 

 

 

 

 

 

3.07

 

%

 

 

 

 

 

 

 

 

 

 

 

3.24

 

%

 

 

 

 

 

 

 

 

 

 

 

2.99

 

%

Average interest-earning assets to average

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

interest-bearing liabilities

 

 

 

 

 

 

127.81

 

%

 

 

 

 

 

 

 

 

 

 

 

126.73

 

%

 

 

 

 

 

 

 

 

 

 

 

123.24

 

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Information:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total deposits, including noninterest-bearing

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

demand deposits

 

$

5,158,940

 

 

$

5,729

 

 

 

 

0.45

 

%

 

$

4,976,315

 

 

$

6,883

 

 

 

 

0.55

 

%

 

$

4,888,198

 

 

$

16,769

 

 

 

 

1.38

 

%

Total deposits and borrowings, including

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

noninterest-bearing demand deposits

 

$

5,825,796

 

 

$

9,320

 

 

 

 

0.65

 

%

 

$

5,763,721

 

 

$

10,884

 

 

 

 

0.75

 

%

 

$

5,542,938

 

 

$

20,920

 

 

 

 

1.52

 

%

 

(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 quarters ended March 31, 2021, December 31, 2020 and March 31, 2020, yields on loans before tax-equivalent adjustments were 4.27%, 4.37% and 4.49%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 3.68%, 3.48% and 2.68%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 3.60%, 3.86% and 4.30%, respectively. Interest rate spread before tax-equivalent adjustments for the quarters ended March  31, 2021, December 31, 2020 and March 31, 2020 was 2.86%, 3.00% and 2.62%, respectively, while net interest margin before tax-equivalent adjustments for the three months ended March  31, 2021, December 31, 2020 and March 31, 2020 was 3.02%, 3.19% and 2.94%, 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.

 

 

 

 

 

5


 

 

MERIDIAN BANCORP, INC. AND SUBSIDIARIES

SELECTED FINANCIAL HIGHLIGHTS

(Unaudited)

 

 

 

Three Months Ended

 

 

March 31,

2021

 

December 31,

2020

 

March 31,

2020

Key Performance Ratios

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Return on average assets (1)

 

 

1.46

 

%

 

 

1.10

 

%

 

 

0.82

 

%

Return on average equity (1)

 

 

12.45

 

 

 

 

9.51

 

 

 

 

7.09

 

 

Interest rate spread  (1) (2)

 

 

2.91

 

 

 

 

3.06

 

 

 

 

2.67

 

 

Net interest margin  (1) (3)

 

 

3.07

 

 

 

 

3.24

 

 

 

 

2.99

 

 

Non-interest expense to average assets  (1)

 

 

1.53

 

 

 

 

1.46

 

 

 

 

1.66

 

 

Efficiency ratio (4)

 

 

49.55

 

 

 

 

44.23

 

 

 

 

54.18

 

 

 

 

 

March 31,

2021

 

December 31,

2020

 

March 31,

2020

 

 

(Dollars in thousands)

Asset Quality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-accrual loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

One- to four-family

 

$

2,466

 

 

 

$

2,617

 

 

 

$

2,846

 

 

Home equity lines of credit

 

 

20

 

 

 

 

20

 

 

 

 

20

 

 

Commercial and industrial

 

 

635

 

 

 

 

527

 

 

 

 

323

 

 

Total non-accrual loans

 

 

3,121

 

 

 

 

3,164

 

 

 

 

3,189

 

 

Foreclosed assets

 

 

 

 

 

 

 

 

 

 

 

 

Total non-performing assets

 

$

3,121

 

 

 

$

3,164

 

 

 

$

3,189

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for credit losses on loans/total loans

 

 

1.20

 

%

 

 

1.25

 

%

 

 

0.89

 

%

Allowance for credit losses on loans/non-accrual loans

 

 

2,032.55

 

 

 

 

2,175.22

 

 

 

 

1,597.55

 

 

Non-accrual loans/total loans

 

 

0.06

 

 

 

 

0.06

 

 

 

 

0.06

 

 

Non-accrual loans/total assets

 

 

0.05

 

 

 

 

0.05

 

 

 

 

0.05

 

 

Non-performing assets/total assets

 

 

0.05

 

 

 

 

0.05

 

 

 

 

0.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital and Share Related

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Stockholders' equity to total assets

 

 

12.13

 

%

 

 

11.61

 

%

 

 

11.34

 

%

Book value per share

 

$

15.05

 

 

 

$

14.67

 

 

 

$

13.73

 

 

Tangible book value per share (5)

 

$

14.63

 

 

 

$

14.25

 

 

 

$

13.31

 

 

Market value per share

 

$

18.42

 

 

 

$

14.91

 

 

 

$

11.22

 

 

Shares outstanding

 

52,430,554

 

 

 

52,415,061

 

 

 

52,402,395

 

 

 

(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 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. Presented on a basis including gains and losses on marketable equity securities and gains and losses on sale of assets the efficiency ratio was 47.89%, 42.03% and 59.46% for the quarters ended March 31, 2021, December 31, 2020, and March 31, 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.

6



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