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
SUBSIDIARIESCONSOLIDATED 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
SUBSIDIARIESCONSOLIDATED 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
SUBSIDIARIESNET 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
SUBSIDIARIESSELECTED 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
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