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     116  0 Kommentare Meridian Bancorp, Inc. Reports Record Fourth Quarter and Record Full Year Net Income, Up 38% and 20% from Prior Year Periods

    BOSTON, Jan. 28, 2020 (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 $17.1 million, or $0.33 per diluted share, for the quarter ended December 31, 2019, compared to $19.7 million, or $0.38 per diluted share, for the quarter ended September 30, 2019 and $12.4 million, or $0.24 per diluted share, for the quarter ended December 31, 2018. For the year ended December 31, 2019, net income was $67.0 million, or $1.30 per diluted share, up from $55.8 million, or $1.06 per diluted share, for the year ended December 31, 2018. The Company’s return on average assets was 1.08% for the quarter ended December 31, 2019, compared to 1.24% for the quarter ended September 30, 2019 and 0.83% for the quarter ended December 31, 2018. For the year ended December 31, 2019, the Company’s return on average assets was 1.06%, up from 0.99% for the year ended December 31, 2018. The Company’s return on average equity was 9.45% for the quarter ended December 31, 2019, compared to 11.17% for the quarter ended September 30, 2019, and 7.28% for the quarter ended December 31, 2018. For the year ended December 31, 2019, the Company’s return on average equity was 9.56%, up from 8.36% for the year ended December 31, 2018. 

    Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, “I am pleased to report record net income of $67.0 million for the year 2019, up $11.2 million, or 20%, from 2018, while our net income for the quarter rose $4.7 million, or 38%, to $17.1 million, a new fourth quarter record, from the fourth quarter of 2018. These earnings increases reflect loan loss provision reversals of $2.6 million for the year 2019 and $504,000 in the fourth quarter resulting from $420 million of commercial loan payoffs and $219 million of construction loans that converted to permanent status in the second half of the year, along with continuing increases in net interest income and substantial improvements in the market valuations of our marketable equity securities portfolio during 2019. This high volume of loan payoffs continued to be driven by the competitive interest rate environment and the strength of commercial real estate market conditions in the metropolitan Boston area, although our loan pipelines also remain strong as we achieved the highest origination volume of the year at $361 million in the fourth quarter.”

    The Company’s net interest income was $43.7 million for the quarter ended December 31, 2019, down $563,000, or 1.3%, from the quarter ended September 30, 2019 and up $1.5 million, or 3.5%, from the quarter ended December 31, 2018. The interest rate spread and net interest margin on a tax-equivalent basis were 2.51% and 2.84%, respectively, for the quarter ended December 31, 2019 compared to 2.52% and 2.87%, respectively, for the quarter ended September 30, 2019 and 2.62% and 2.93%, respectively, for the quarter ended December 31, 2018. For the year ended December 31, 2019, net interest income increased $8.5 million, or 5.2%, to $172.9 million from the year ended December 31, 2018. The interest rate spread and net interest margin on a tax-equivalent basis were 2.52% and 2.86%, respectively, for the year ended December 31, 2019, compared to 2.76% and 3.03%, respectively, for the year ended December 31, 2018. The decrease in net interest income for the quarter ended December 31, 2019 from the quarter ended September 30, 2019 was primarily due to a reduction in average loan balances. The increases in net interest income for the quarter and year ended December 31, 2019 compared to the respective periods of 2018 were primarily due to growth in average loan balances and yields on interest-earning assets, reflecting higher commercial loan prepayment fees, partially offset by increases in the average balances of total deposits and borrowings and the cost of funds.

    Total interest and dividend income totaled $66.8 million for the quarter ended December 31, 2019, down $1.7 million, or 2.5%, from the quarter ended September 30, 2019, primarily due to a $68.1 million, or 1.2%, decrease in the Company’s average loan balances to $5.773 billion and a decrease in yield on loans on a tax-equivalent basis of four basis points to 4.50%. Compared to the quarter ended December 31, 2018,  total interest and dividend income increased $5.1 million, or 8.3%, primarily due to growth in the Company’s average loan balances of $338.7 million, or 6.2%, and an increase in the yield on loans on a tax-equivalent basis of 11 basis points. Interest and fees on loans included commercial loan prepayment fees of $851,000 for the quarter ended December 31, 2019, down from $873,000 for the quarter ended September 30, 2019 and up from $435,000 for the quarter ended December 31, 2018. The Company’s yield on interest-earning assets on a tax-equivalent basis was 4.33% for the quarter ended December 31, 2019, down nine basis points from the quarter ended September 30, 2019 and up seven basis points from the quarter ended December 31, 2018. For the year ended December 31, 2019, the Company’s total interest and dividend income increased $38.4 million, or 16.9%, to $266.1 million from the year ended December 31, 2018, primarily due to growth in the Company’s average loan balances of $660.8 million, or 12.9%, to $5.780 billion and an increase in the yield on loans on a tax-equivalent basis of 16 basis points to 4.49% for the year ended December 31, 2019 compared to the year ended December 31, 2018. Interest and fees on loans included commercial loan prepayment fees of $2.1 million for the year ended December 31, 2019, up from $1.1 million for the year ended December 31, 2018. The Company’s yield on interest-earning assets on a tax-equivalent basis increased 19 basis points to 4.37% for the year ended December 31, 2019 compared to the same period in 2018.

    Total interest expense totaled $23.2 million for the quarter ended December 31, 2019, down $1.1 million, or 4.7%, from the quarter ended September 30, 2019, and up $3.6 million, or 18.6%, from the quarter ended December 31, 2018. Interest expense on deposits decreased $1.2 million, or 5.9%, to $19.0 million for the quarter ended December 31, 2019, from the quarter ended September 30, 2019, primarily due to decreases of $39.5 million in average total deposits to $4.931 billion and eight basis points in the cost of average total deposits to 1.53%. Interest expense on deposits increased $1.9 million, or 11.2%, from the quarter ended December 31, 2018, primarily due to increases of $293.9 million, or 6.3%, in average total deposits and seven basis points in the cost of average total deposits from the quarter ended December 31, 2018. Interest expense on borrowings increased to $4.2 million for the quarter ended December 31, 2019, up $51,000, or 1.2%, from the quarter ended September 30, 2019 and $1.7 million, or 70.7%, from the quarter ended December 31, 2018, primarily due to growth in average total borrowings to $636.4 million and increases in the average cost of borrowings to 2.61%, unchanged from the quarter ended September 30, 2019, and up from 1.67% for the quarter ended December 31, 2018. The Company’s total cost of funds was 1.65% for the quarter ended December 31, 2019, down seven basis points from the quarter ended September 30, 2019 and up 16 basis points from the quarter ended December 31, 2018. Total interest expense increased $29.9 million, or 47.3%, to $93.2 million for the year ended December 31, 2019 from the year ended December 31, 2018. Interest expense on deposits increased $24.3 million, or 44.6%, to $79.0 million for the year ended December 31, 2019 from the year ended December 31, 2018 due to growth in average total deposits of $598.2 million, or 13.7%, to $4.954 billion and an increase in the cost of average total deposits of 34 basis points to 1.59%. Interest expense on borrowings increased $5.6 million, or 64.9%, to $14.2 million for the year ended December 31, 2019 from the year ended December 31, 2018 due to an increase in the cost of average total borrowings of 90 basis points to 2.39% and an increase in average total borrowings of $16.8 million, or 2.9%, to $593.7 million. The Company’s cost of funds increased 40 basis points to 1.68% for the year ended December 31, 2019 compared to the year ended December 31, 2018.

    Mr. Gavegnano continued, “Our net interest income rose 5% while our net interest margin remained steady throughout most of 2019. The slight declines of 1.3% in our net interest income and three basis points in our net interest margin to 2.84% for the fourth quarter from the third quarter of 2019 resulted from a net reduction of $68 million, or 2.5%, in the loan portfolio for the second half of 2019 due to the rise in commercial loan payoffs.  Following its peak in the second quarter, our cost of funds was reduced by seven basis points in the fourth quarter to 1.65%. We expect to maintain and expand our margin in the coming months as the loans in our origination pipeline are funded and our loan yields rise while funding costs continue to decline.”

    The Company recognized a reversal of $504,000 in its provision for loan losses for the quarter ended December 31, 2019, compared to a reversal of $3.0 million for the quarter ended September 30, 2019 and a provision of $3.6 million for the quarter ended December 31, 2018. For the year ended December 31, 2019, there was a loan loss provision reversal of $2.6 million compared to a provision expense of $7.8 million for the year ended December 31, 2018. The reductions in the provision for loan losses were primarily due to substantial payoffs of multi-family, commercial real estate and commercial and industrial loans, the conversion of construction loans to permanent status in the commercial loan categories and continuing improvements in credit quality trends during the year ended December 31, 2019. The allowance for loan losses was $50.3 million or 0.87% of total loans at December 31, 2019, compared to $50.8 million or 0.88% of total loans at September 30, 2019, and $53.2 million or 0.94% of total loans at December 31, 2018. The declines in the allowance for loan losses coverage ratio were based on management’s assessment of the loan portfolio balance 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 $5,000 for the quarter ended December 31, 2019 compared to net charge-offs of $56,000 for the quarter ended September 30, 2019 and net recoveries of $59,000 for the quarter ended December 31, 2018. For the year ended December 31, 2019, net charge-offs totaled $348,000 compared to net recoveries of $198,000 for the year ended December 31, 2018.

    Non-accrual loans were $3.4 million, or 0.06% of total loans outstanding, at December 31, 2019; down $545,000, or 13.8%, from September 30, 2019; and down $3.5 million, or 50.7%, from December 31, 2018. Non-performing assets were $3.4 million, or 0.05% of total assets, at December 31, 2019, compared to $3.9 million, or 0.06% of total assets, at September 30, 2019, and $6.9 million, or 0.11% of total assets, at December 31, 2018.

    Mr. Gavegnano noted, “Our asset quality continued to improve over the past year to historically strong levels. Along with the reduction of non-performing loans in 2019 to only $3.4 million, or 0.05% of total assets, with no past due multi-family, commercial real estate or construction loans outstanding, our residential loan delinquencies declined by two thirds.”

    Non-interest income was $3.7 million for the quarter ended December 31, 2019, up from $2.8 million for the quarter ended September 30, 2019 and $135,000 for the quarter ended December 31, 2018. Non-interest income increased $833,000, or 29.2%, compared to the quarter ended September 30, 2019, primarily due to a $930,000 gain on marketable equity securities, net, reflecting increases in market valuations in the fourth quarter of 2019 compared to a $463,000 loss on marketable equity securities, net, in the third quarter of 2019, partially offset by decreases of $453,000 in loan fees. The decrease in loan fees is due primarily to $308,000 of loan swap fee income recognized in the third quarter of 2019. Compared to the quarter ended December 31, 2018, non-interest income increased $3.5 million primarily due to a $930,000 gain on marketable equity securities, net, in the fourth quarter of 2019 compared to a $2.7 million loss on marketable equity securities, net, in the fourth quarter of 2018. For the year ended December 31, 2019, non-interest income increased $4.3 million, or 47.9%, to $13.3 million from $9.0 million for the year ended December 31, 2018, primarily due to a $2.0 million gain on marketable equity securities, net, reflecting increases in market valuations for the year ended December 31, 2019, compared to a $2.1 million loss on marketable equity securities, net, for the year ended December 31, 2018.

    Non-interest expenses were $25.3 million, or 1.59% of average assets for the quarter ended December 31, 2019, compared to $23.8 million, or 1.50% of average assets for the quarter ended September 30, 2019 and $23.6 million, or 1.59% of average assets for the quarter ended December 31, 2018. Non-interest expenses increased $1.4 million, or 5.9%, compared to the quarter ended September 30, 2019, due primarily to increases of $621,000 in salaries and employee benefits, $245,000 in deposit insurance, $178,000 in professional services, $158,000 in general and administrative and $132,000 in marketing and advertising. Non-interest expenses increased $1.6 million, or 6.9%, compared to the quarter ended December 31, 2018, due primarily to increases of $1.1 million in salaries and employee benefits, $477,000 in occupancy and equipment, $242,000 in data processing and $132,000 in other general and administrative, partially offset by a decrease of $321,000 in deposit insurance. For the year ended December 31, 2019, non-interest expenses increased $5.2 million, or 5.5%, to $100.0 million from $94.8 million for the year ended December 31, 2018, due primarily to increases of $2.5 million in salaries and employee benefits, $1.8 million in occupancy and equipment, $1.2 million in data processing, $574,000 in marketing and advertising and $262,000 in other general and administrative, partially offset by decreases of $800,000 in deposit insurance and $201,000 in professional services. The decreases in deposit insurance reflect the application of $1.2 million in Small Bank Assessment Credits by the Federal Deposit Insurance Corporation for the third and fourth quarters of 2019. The increases in salaries and employee benefits were primarily due to annual increases in employee compensation, payroll taxes and employee benefits, while the increases in 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, three new branch openings in the fourth quarter of 2018, one new branch opened in July 2019, and one new branch opened in December 2019. The Company’s efficiency ratio was 54.44% for the quarter ended December 31, 2019 compared to 50.18% for the quarter ended September 30, 2019 and 52.52% for the quarter ended December 31, 2018. For the year ended December 31, 2019, the efficiency ratio was 54.29% compared to 53.95% for the year ended December 31, 2018.

    Mr. Gavegnano added, “In 2019, we effectively maintained our efficiency ratio at 54% while improving our ratio of non-interest expenses to average assets to 1.59% from 1.68% for 2018, even with the addition of six new branches over the last two years. In December, we celebrated the opening of our 40th branch in Boston’s Brighton neighborhood, and our demonstrated growth and overhead management strategies will continue as we plan the opening of three new branches planned in the first half of 2020 in the metropolitan Boston area communities of Salem, Woburn and Brookline.”

    The Company recorded a provision for income taxes of $5.5 million for the quarter ended December 31, 2019, reflecting an effective tax rate of 24.4%, compared to $6.5 million, or an effective tax rate of 24.8%, for the quarter ended September 30, 2019, and $2.7 million, or an effective tax rate of 18.2%, for the quarter ended December 31, 2018. For the year ended December 31, 2019, the provision for income taxes was $21.8 million, reflecting an effective tax rate of 24.5%, compared to $15.0 million, or an effective tax rate of 21.2%, for the year ended December 31, 2018.

    Total assets were $6.344 billion at December 31, 2019, down $19.4 million, or 0.3%, from $6.363 billion at September 30, 2019 and up $165.1 million, or 2.7%, from $6.179 billion at December 31, 2018. Net loans were $5.698 billion at December 31, 2019, down $80,000 from September 30, 2019, and up $104.1 million, or 1.9%, from December 31, 2018. The net decrease in loans for the quarter ended December 31, 2019 reflects commercial loan payoffs totaling $173.0 million, comprised of $59.8 million in the multi-family, $54.6 million in the commercial real estate, $2.4 million in the commercial and industrial and $56.2 million in the construction loan categories. Loan originations totaled $361.1 million during the quarter ended December 31, 2019 and $1.098 billion during the year ended December 31, 2019. The net increase in loans for the year ended December 31, 2019 was primarily due to increases of $74.7 million in commercial real estate loans, $20.4 million in construction loans, $19.4 million in home equity lines of credit and $12.0 million in one- to four-family loans, partially offset by decreases of $20.1 million in commercial and industrial loans and $7.1 million in multi-family loans. These balance changes reflect commercial loan payoffs totaling $612.5 million and construction loans that converted to permanent status totaling $340.1 million during the year ended December 31, 2019. Cash and due from banks was $406.4 million at December 31, 2019, an increase of $34.4 million, or 9.2% from December 31, 2018. Securities, at fair value, were $30.3 million at December 31, 2019, a decrease of $277,000, or 0.9%, 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 year ended December 31, 2019, premises and equipment, net increased $20.7 million to $65.8 million and accrued expenses and other liabilities increased $26.4 million to $59.3 million at December 31, 2019, reflecting the recognition of operating lease assets and liabilities totaling $17.7 million based on the present value of future minimum lease payments as required by ASU No. 2016-02.

    Total deposits were $4.921 billion at December 31, 2019, down $34.2 million, or 0.7%, from $4.956 billion at September 30, 2019 and up $37.3 million, or 0.8%, from $4.884 billion at December 31, 2018. The net decrease in deposits for the quarter ended December 31, 2019 reflects a $70.4 million decrease in certificates of deposit including a $26.6 million reduction in brokered deposits. Core deposits, which exclude certificates of deposit, increased $153.5 million, or 4.8%, during the year ended December 31, 2019 to $3.352 billion, or 68.1% of total deposits. Certificates of deposit decreased $116.2 million, or 6.9%, during the year ended December 31, 2019 to $1.570 billion, or 31.9% of total deposits. Total borrowings were $636.2 million, down $370,000, or 0.1%, from September 30, 2019 and up $49.4 million, or 8.4%, from December 31, 2018.

    Total stockholders’ equity increased $14.6 million, or 2.1%, to $726.6 million at December 31, 2019 from $712.0 million at September 30, 2019, and $51.9 million, or 7.7%, from $674.7 million at December 31, 2018. The increase for the year ended December 31, 2019 was primarily due to net income of $67.0 million and $7.1 million related to stock-based compensation plans, partially offset by dividends of $0.29 per share totaling $14.8 million and the repurchase of 428,820 shares of the Company’s common stock related to the stock repurchase programs at a total cost of $7.3 million. Stockholders’ equity to assets was 11.45% at December 31, 2019, compared to 11.19% at September 30, 2019 and 10.92% at December 31, 2018. Book value per share increased to $13.61 at December 31, 2019 from $12.60 at December 31, 2018. Tangible book value per share increased to $13.19 at December 31, 2019 from $12.17 at December 31, 2018. Market price per share increased $5.77 or 40.3%, to $20.09 at December 31, 2019 from $14.32 at December 31, 2018. At December 31, 2019, the Company and the Bank continued to exceed all regulatory capital requirements.

    The Company did not repurchase any of its shares during the quarter ended December 31, 2019. As of December 31, 2019, the Company has repurchased 324,544 shares of its stock at an average price of $17.32, or 24.50%, of the 1,324,544 shares authorized for repurchase under the Company’s repurchase program adopted in April 2019 and amended in October 2019. As of December 31, 2019, 1,000,000 shares remain available for repurchase under the plan. The Company has repurchased 3,698,165 shares at an average price of $15.11 per share since August 2015.

    Mr. Gavegnano concluded, “Our Board of Directors voted to expand our repurchase program by one million shares in the fourth quarter to enable opportunistic stock repurchases, along with the increase in our quarterly dividend by $0.01 per share, or 14%, to $0.08 per share as paid on January 2, 2020, as we continue our focus on initiatives to enhance stockholder value.”

    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 40 branches in the greater Boston metropolitan area, including 39 full-service locations and one mobile branch. We offer a variety of deposit and loan products to individuals and businesses located in our primary market, which consists of Essex, Middlesex, Norfolk and Suffolk Counties, Massachusetts. For additional information, visit www.ebsb.com.

    Forward Looking Statements

    Certain statements herein constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may be identified by words such as “believes,” “will,” “expects,” “project,” “may,” “could,” “developments,” “strategic,” “launching,” “opportunities,” “anticipates,” “estimates,” “intends,” “plans,” “targets” and similar expressions. These statements are based upon the current beliefs and expectations of Meridian Bancorp, Inc.’s management and are subject to significant risks and uncertainties. Actual results may differ materially from those set forth in the forward-looking statements as a result of numerous factors. Factors that could cause such differences to exist include, but are not limited to, general economic conditions, changes in interest rates, regulatory considerations, and competition and the risk factors described in the Company’s Annual Report on Form 10-K and Quarterly Reports on Form 10-Q as filed with the Securities and Exchange Commission. Should one or more of these risks materialize or should underlying beliefs or assumptions prove incorrect, Meridian Bancorp, Inc.’s actual results could differ materially from those discussed. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this release.

    MERIDIAN BANCORP, INC. AND SUBSIDIARIES
    CONSOLIDATED BALANCE SHEETS
    (Unaudited)

        December 31,
    2019
        September 30,
    2019
        December 31,
    2018
     
           
        (Dollars in thousands)  
    ASSETS                        
    Cash and due from banks   $ 406,382     $ 428,061     $ 371,995  
    Certificates of deposit     247       247       5,247  
    Securities available for sale, at fair value     15,076       15,799       17,159  
    Marketable equity securities, at fair value     15,243       14,313       13,437  
    Federal Home Loan Bank stock, at cost     28,947       28,947       29,187  
    Loans held for sale     2,455       1,828       409  
    Loans:                        
    One- to four-family     659,366       667,385       647,367  
    Home equity lines of credit     69,491       66,495       50,087  
    Multi-family     1,003,418       1,069,312       1,010,521  
    Commercial real estate     2,696,671       2,687,614       2,621,979  
    Construction     707,370       656,615       686,948  
    Commercial and industrial     604,889       594,683       625,018  
    Consumer     12,196       12,017       10,953  
    Total loans     5,753,401       5,754,121       5,652,873  
    Allowance for loan losses     (50,322 )     (50,831 )     (53,231 )
    Net deferred loan origination fees     (5,539 )     (5,670 )     (6,239 )
    Loans, net     5,697,540       5,697,620       5,593,403  
    Bank-owned life insurance     41,155       41,267       40,734  
    Premises and equipment, net     65,841       65,582       45,140  
    Accrued interest receivable     14,481       14,305       14,267  
    Deferred tax asset, net     16,726       18,393       18,196  
    Goodwill     20,378       20,378       20,378  
    Core deposit intangible     2,123       2,254       2,653  
    Other assets     17,100       14,146       6,478  
    Total assets   $ 6,343,694     $ 6,363,140     $ 6,178,683  
                             
    LIABILITIES AND STOCKHOLDERS' EQUITY                        
    Deposits:                        
    Non interest-bearing demand deposits   $ 524,154     $ 514,941     $ 483,777  
    Interest-bearing demand deposits     1,269,211       1,262,552       1,190,346  
    Money market deposits     675,702       689,324       729,174  
    Regular savings and other deposits     882,550       848,582       794,813  
    Certificates of deposit     1,569,916       1,640,303       1,686,074  
    Total deposits     4,921,533       4,955,702       4,884,184  
    Short-term borrowings                 50,000  
    Long-term debt     636,245       636,615       536,880  
    Accrued expenses and other liabilities     59,329       58,841       32,965  
    Total liabilities     5,617,107       5,651,158       5,504,029  
    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; 53,377,506, 53,297,061 and 53,541,429 shares issued at December 31, 2019, September 30, 2019 and December 31, 2018, respectively     534       533       535  
    Additional paid-in capital     377,213       375,618       378,583  
    Retained earnings     365,742       352,758       313,521  
    Accumulated other comprehensive income (loss)     (147 )     48       (348 )
    Unearned compensation - ESOP, 2,313,509, 2,343,949 and 2,435,272  shares at December 31, 2019, September 30, 2019 and December 31, 2018, respectively     (16,755 )     (16,975 )     (17,637 )
    Total stockholders' equity     726,587       711,982       674,654  
    Total liabilities and stockholders' equity   $ 6,343,694     $ 6,363,140     $ 6,178,683  
                             

    MERIDIAN BANCORP, INC. AND SUBSIDIARIES
    CONSOLIDATED STATEMENTS OF NET INCOME
    (Unaudited)

        Three Months Ended     Years Ended  
        December 31,
    2019
        September 30,
    2019
        December 31,
    2018
        December 31,
    2019
        December 31,
    2018
     
           
        (Dollars in thousands, except per share amounts)  
    Interest and dividend income:                                        
    Interest and fees on loans   $ 64,801     $ 66,121     $ 59,424     $ 256,603     $ 219,162  
    Interest on debt securities:                                        
    Taxable     96       101       115       415       482  
    Tax-exempt     13       12       13       51       56  
    Dividends on equity securities     109       137       121       493       504  
    Interest on certificates of deposit     1       18       82       74       530  
    Other interest and dividend income     1,811       2,136       1,957       8,467       6,938  
    Total interest and dividend income     66,831       68,525       61,712       266,103       227,672  
    Interest expense:                                        
    Interest on deposits     18,996       20,178       17,090       78,978       54,634  
    Interest on short-term borrowings           1       183       296       191  
    Interest on long-term debt     4,181       4,129       2,266       13,891       8,412  
    Total interest expense     23,177       24,308       19,539       93,165       63,237  
    Net interest income     43,654       44,217       42,173       172,938       164,435  
    Provision (reversal) for loan losses     (504 )     (2,978 )     3,563       (2,561 )     7,848  
    Net interest income, after provision (reversal) for loan losses     44,158       47,195       38,610       175,499       156,587  
    Non-interest income:                                        
    Customer service fees     2,407       2,428       2,371       9,220       9,065  
    Loan fees (costs)     (17 )     436       41       549       479  
    Mortgage banking gains, net     69       99       25       309       295  
    Gain (loss) on marketable equity securities, net     930       (463 )     (2,698 )     2,016       (2,066 )
    Income from bank-owned life insurance     281       285       281       1,127       1,109  
    Gain on life insurance distribution           52       110       52       110  
    Other income     12       12       5       40       11  
    Total non-interest income     3,682       2,849       135       13,313       9,003  
    Non-interest expenses:                                        
    Salaries and employee benefits     15,722       15,101       14,648       61,371       58,866  
    Occupancy and equipment     3,691       3,657       3,214       14,594       12,759  
    Data processing     2,074       2,026       1,832       8,079       6,915  
    Marketing and advertising     1,151       1,019       1,252       4,631       4,057  
    Professional services     858       680       735       3,182       3,383  
    Deposit insurance     255       10       576       2,206       3,006  
    Merger and acquisition                             114  
    Other general and administrative     1,512       1,354       1,380       5,960       5,698  
    Total non-interest expenses     25,263       23,847       23,637       100,023       94,798  
    Income before income taxes     22,577       26,197       15,108       88,789       70,792  
    Provision for income taxes     5,509       6,508       2,750       21,793       15,021  
    Net income   $ 17,068     $ 19,689     $ 12,358     $ 66,996     $ 55,771  
                                             
    Earnings per share:                                        
    Basic   $ 0.33     $ 0.39     $ 0.24     $ 1.31     $ 1.08  
    Diluted   $ 0.33     $ 0.38     $ 0.24     $ 1.30     $ 1.06  
    Weighted average shares outstanding:                                        
    Basic     51,027,229       50,923,760       51,530,878       51,030,318       51,498,203  
    Diluted     51,539,436       51,454,186       51,955,139       51,492,755       52,659,752  

    MERIDIAN BANCORP, INC. AND SUBSIDIARIES
    NET INTEREST INCOME ANALYSIS
    (Unaudited)

        Three Months Ended
        December 31, 2019   September 30, 2019   December 31, 2018
        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)   $ 5,772,817     $ 65,525         4.50   %   $ 5,840,885     $ 66,837         4.54   %   $ 5,434,068     $ 60,100         4.39   %
    Securities and certificates of deposit     30,377       236         3.08         34,108       289         3.36         52,818       356         2.67    
    Other interest-earning assets (3)     388,136       1,811         1.85         335,400       2,136         2.53         321,924       1,957         2.41    
    Total interest-earning assets     6,191,330       67,572         4.33         6,210,393       69,262         4.42         5,808,810       62,413         4.26    
    Noninterest-earning assets     155,912                           145,445                           122,446                      
    Total assets   $ 6,347,242                         $ 6,355,838                         $ 5,931,256                      
    Liabilities and stockholders' equity:                                                                                    
    Interest-bearing liabilities:                                                                                    
    Interest-bearing demand deposits   $ 1,263,108     $ 5,169         1.62       $ 1,195,266     $ 5,258         1.75       $ 1,153,265     $ 4,716         1.62    
    Money market deposits     674,620       2,210         1.30         683,201       2,281         1.32         782,007       2,449         1.24    
    Regular savings and other deposits     861,523       2,834         1.31         870,677       3,199         1.46         597,827       1,829         1.21    
    Certificates of deposit     1,604,383       8,783         2.17         1,705,718       9,440         2.20         1,610,632       8,096         1.99    
    Total interest-bearing deposits     4,403,634       18,996         1.71         4,454,862       20,178         1.80         4,143,731       17,090         1.64    
    Borrowings     636,370       4,181         2.61         627,063       4,130         2.61         581,619       2,449         1.67    
    Total interest-bearing liabilities     5,040,004       23,177         1.82         5,081,925       24,308         1.90         4,725,350       19,539         1.64    
    Noninterest-bearing demand deposits     527,723                           516,020                           493,715                      
    Other noninterest-bearing liabilities     57,400                           52,663                           33,036                      
    Total liabilities     5,625,127                           5,650,608                           5,252,101                      
    Total stockholders' equity     722,115                           705,230                           679,155                      
    Total liabilities and stockholders' equity   $ 6,347,242                         $ 6,355,838                         $ 5,931,256                      
    Net interest-earning assets   $ 1,151,326                         $ 1,128,468                         $ 1,083,460                      
    Fully tax-equivalent net interest income             44,395                           44,954                           42,874              
    Less: tax-equivalent adjustments             (741 )                         (737 )                         (701 )            
    Net interest income           $ 43,654                         $ 44,217                         $ 42,173              
    Interest rate spread (1)(4)                       2.51   %                       2.52   %                       2.62   %
    Net interest margin (1)(5)                       2.84   %                       2.87   %                       2.93   %
    Average interest-earning assets to average                                                                                    
    interest-bearing liabilities             122.84   %                       122.21   %                       122.93   %          
                                                                                         
    Supplemental Information:                                                                                    
    Total deposits, including noninterest-bearing                                                                                    
    demand deposits   $ 4,931,357     $ 18,996         1.53   %   $ 4,970,882     $ 20,178         1.61   %   $ 4,637,446     $ 17,090         1.46   %
    Total deposits and borrowings, including                                                                                    
    noninterest-bearing demand deposits   $ 5,567,727     $ 23,177         1.65   %   $ 5,597,945     $ 24,308         1.72   %   $ 5,219,065     $ 19,539         1.49   %


    (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 December 31, 2019, September 30, 2019 and December 31, 2018, yields on loans before tax-equivalent adjustments were 4.45%, 4.49% and 4.34%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 2.86%, 3.12% and 2.49%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 4.28%, 4.38% and 4.22%, respectively. Interest rate spread before tax-equivalent adjustments for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018 was 2.46%, 2.48% and 2.58%, respectively, while net interest margin before tax-equivalent adjustments for the three months ended December 31, 2019, September 30, 2019 and December 31, 2018 was 2.80%, 2.82% and 2.88%, respectively. 
    (2) Loans on non-accrual status are included in average balances.
    (3) Includes Federal Home Loan Bank stock and associated dividends.
    (4) Interest rate spread represents the difference between the tax-equivalent yield on interest-earning assets and the cost of interest-bearing liabilities.
    (5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.
    (6) Annualized.

    MERIDIAN BANCORP, INC. AND SUBSIDIARIES
    NET INTEREST INCOME ANALYSIS
    (Unaudited)

        Years Ended
        December 31, 2019   December 31, 2018
        Average               Yield/   Average               Yield/
        Balance     Interest (1)   Cost (1)   Balance     Interest (1)   Cost (1)
         
        (Dollars in thousands)
    Assets:                                                        
    Interest-earning assets:                                                        
    Loans (2)   $ 5,779,924     $ 259,427         4.49   %   $ 5,119,102     $ 221,652         4.33   %
    Securities and certificates of deposit     34,343       1,109         3.23         69,091       1,678         2.43    
    Other interest-earning assets (3)     341,786       8,467         2.48         319,758       6,938         2.17    
    Total interest-earning assets     6,156,053       269,003         4.37         5,507,951       230,268         4.18    
    Noninterest-earning assets     138,983                           120,720                      
    Total assets   $ 6,295,036                         $ 5,628,671                      
                                                             
    Liabilities and stockholders' equity:                                                        
    Interest-bearing liabilities:                                                        
    Interest-bearing demand deposits   $ 1,215,989     $ 20,951         1.72       $ 1,106,332     $ 15,025         1.36    
    Money market deposits     683,051       8,797         1.29         845,781       9,490         1.12    
    Regular savings and other deposits     901,650       13,796         1.53         400,951       2,175         0.54    
    Certificates of deposit     1,648,089       35,434         2.15         1,513,174       27,944         1.85    
    Total interest-bearing deposits     4,448,779       78,978         1.78         3,866,238       54,634         1.41    
    Borrowings     593,711       14,187         2.39         576,949       8,603         1.49    
    Total interest-bearing liabilities     5,042,490       93,165         1.85         4,443,187       63,237         1.42    
    Noninterest-bearing demand deposits     505,520                           489,887                      
    Other noninterest-bearing liabilities     46,250                           28,191                      
    Total liabilities     5,594,260                           4,961,265                      
    Total stockholders' equity     700,776                           667,406                      
    Total liabilities and stockholders' equity   $ 6,295,036                         $ 5,628,671                      
    Net interest-earning assets   $ 1,113,563                         $ 1,064,764                      
    Fully tax-equivalent net interest income             175,838                           167,031              
    Less: tax-equivalent adjustments             (2,900 )                         (2,596 )            
    Net interest income           $ 172,938                         $ 164,435              
    Interest rate spread (1)(4)                       2.52   %                       2.76   %
    Net interest margin (1)(5)                       2.86   %                       3.03   %
    Average interest-earning assets to average                                                        
    interest-bearing liabilities             122.08   %                       123.96   %          
                                                             
    Supplemental Information:                                                        
    Total deposits, including noninterest-bearing                                                        
    demand deposits   $ 4,954,299     $ 78,978         1.59   %   $ 4,356,125     $ 54,634         1.25   %
    Total deposits and borrowings, including                                                        
    noninterest-bearing demand deposits   $ 5,548,010     $ 93,165         1.68   %   $ 4,933,074     $ 63,237         1.28   %


    (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 year ended December 31, 2019 and 2018, yields on loans before tax-equivalent adjustments were 4.44% and 4.28%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 3.01% and 2.28%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 4.32% and 4.13%, respectively. Interest rate spread before tax-equivalent adjustments for the year ended December 31, 2019 and 2018 was 2.47% and 2.71%, respectively, while net interest margin before tax-equivalent adjustments for the year ended December 31, 2019 and 2018 was 2.81% and 2.99%, 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.

    MERIDIAN BANCORP, INC. AND SUBSIDIARIES
    SELECTED FINANCIAL HIGHLIGHTS
    (Unaudited)

        Three Months Ended   Years Ended
        December 31,
    2019
      September 30,
    2019
      December 31,
    2018
      December 31,
    2019
      December 31,
    2018
    Key Performance Ratios                                                  
    Return on average assets (1)     1.08   %     1.24   %     0.83   %     1.06   %     0.99   %
    Return on average equity (1)     9.45         11.17         7.28         9.56         8.36    
    Interest rate spread  (1) (2)     2.51         2.52         2.62         2.52         2.76    
    Net interest margin  (1) (3)     2.84         2.87         2.93         2.86         3.03    
    Non-interest expense to average assets  (1)     1.59         1.50         1.59         1.59         1.68    
    Efficiency ratio (4)     54.44         50.18         52.52         54.29         53.95    


        December 31,
    2019
      September 30,
    2019
      December 31,
    2018
         
        (Dollars in thousands)
    Asset Quality                              
    Non-accrual loans:                              
    One- to four-family   $ 3,082       $ 3,600       $ 5,888    
    Home equity lines of credit                        
    Multi-family                        
    Commercial real estate                     342    
    Commercial and industrial     323         350         676    
    Total non-accrual loans     3,405         3,950         6,906    
    Foreclosed assets                        
    Total non-performing assets   $ 3,405       $ 3,950       $ 6,906    
                                   
    Allowance for loan losses/total loans     0.87   %     0.88   %     0.94   %
    Allowance for loan losses/non-accrual loans     1,477.89         1,286.86         770.79    
    Non-accrual loans/total loans     0.06         0.07         0.12    
    Non-accrual loans/total assets     0.05         0.06         0.11    
    Non-performing assets/total assets     0.05         0.06         0.11    
                                   
    Capital and Share Related                              
    Stockholders' equity to total assets     11.45   %     11.19   %     10.92   %
    Book value per share   $ 13.61       $ 13.36       $ 12.60    
    Tangible book value per share (5)   $ 13.19       $ 12.93       $ 12.17    
    Market value per share   $ 20.09       $ 18.75       $ 14.32    
    Shares outstanding   53,377,506       53,297,061       53,541,429    


    (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 and gains and losses on sales of securities available for sale, the efficiency ratio was 53.37%, 50.67% and 55.87% for the quarters ended December 31, 2019, September 30, 2019, and December 31, 2018, respectively and 53.70% and 54.66% for the years ended December 31, 2019 and 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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    Meridian Bancorp, Inc. Reports Record Fourth Quarter and Record Full Year Net Income, Up 38% and 20% from Prior Year Periods BOSTON, Jan. 28, 2020 (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 $17.1 million, or $0.33 per diluted share, for the …