Monday, 26 July 2021 02:32 GMT

Meridian Bancorp, Inc. Announces Results for the Quarter and Six Months Ended June 30, 2021


( MENAFN - GlobeNewsWire - Nasdaq BO)STON, July 22, 2021 (GLOBE NEWSWIRE) -- Meridian Bancorp, Inc. (the“Company” or“Meridian”) (NASDAQ: EBSB), the holding company for East Boston Savings Bank (the“Bank”), announced net income of $16.5 million, or $0.32 per diluted share, for the quarter ended June 30, 2021, compared to $24.3 million, or $0.48 per diluted share for the quarter ended March 31, 2021, and $17.3 million, or $0.34 per diluted share, for the quarter ended June 30, 2020. For the six months ended June 30, 2021, net income was $40.9 million, or $0.81 per diluted share, up from $30.3 million, or $0.60 per diluted share, for the six months ended June 30, 2020. The Company's return on average assets was 1.03% for the quarter ended June 30, 2021, compared to 1.46% for the quarter ended March 31, 2021, and 1.08% for the quarter ended June 30, 2020. For the six months ended June 30, 2021, the Company's return on average assets was 1.25%, up from 0.95% for the six months ended June 30, 2020. The Company's return on average equity was 8.32% for the quarter ended June 30, 2021, compared to 12.45% for the quarter ended March 31, 2021, and 9.45% for the quarter ended June 30, 2020. For the six months ended June 30, 2021, the Company's return on average equity was 10.36%, up from 8.27% for the six months ended June 30, 2020.

Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said,“I am pleased to report net income of $16.5 million for the second quarter of 2021 and $40.9 million for the six months ended June 30, 2021, a 35.1% increase over the six months ended June 30, 2020. These earnings reflect a 4.0% increase in net interest income and an improvement in the net interest margin to 3.08%, from 3.05%, for the six months ended June 30, 2021 compared to the same period in 2020. Also affecting the 2021 results was the recognition of an expense of $3.3 million with respect to a previously disclosed legal judgment related to a loan assumed in the Mt. Washington Bank acquisition over ten years ago. The Company also incurred $1.1 million in merger-related expenses associated with the Company's proposed transaction with Independent Bank Corp.”

The Company's net interest income was $47.8 million for the quarter ended June 30, 2021, an increase of $397,000, or 0.8%, from the quarter ended June 30, 2020. The interest rate spread and net interest margin on a tax-equivalent basis were 2.95% and 3.10%, respectively, for the quarter ended June 30, 2021 compared to 2.86% and 3.10%, respectively, for the quarter ended June 30, 2020. For the six months ended June 30, 2021 net interest income increased $3.7 million, or 4.0%, to $96.2 million from the six months ended June 30, 2020. The interest rate spread and net interest margin on a tax-equivalent basis were 2.93% and 3.08% for the six months ended June 30, 2021 compared to 2.76% and 3.05% for the six months ended June 30, 2020.

Total interest and dividend income totaled $55.4 million for the quarter ended June 30, 2021, a decrease of $6.7 million, or 10.8% from the quarter ended June 30, 2020, primarily due to a 9.8% decrease in the Company's average loan balances to $5.161 billion. The Company's yield on interest-earning assets on a tax-equivalent basis was 3.59% for the quarter ended June 30, 2021, down 47 basis points from the quarter ended June 30, 2020. For the six months ended June 30, 2021 the Company's total interest and dividend income totaled $113.2 million, a decrease of $15.0 million, or 11.7%, from the six months ended June 30, 2020, primarily due to a decrease in the Company's average loan balances of $437.8 million, or 7.6%, to $5.294 billion.

Total interest expense totaled $7.7 million for the quarter ended June 30, 2021, a decrease of $7.2 million, or 48.2%, from the quarter ended June 30, 2020. Interest expense on deposits decreased to $4.2 million for the quarter ended June 30, 2021, a decrease of $6.4 million, or 60.3%, from the quarter ended June 30, 2020, primarily due to a decrease in the cost of average total deposits to 0.34% from 0.88% for the quarter ended June 30, 2020. The Company's total cost of funds was 0.55% for the quarter ended June 30, 2021, a decrease of 51 basis points from 1.06% for the quarter ended June 30, 2020. For the six months ended June 30, 2021, total interest expense totaled $17.0 million, a decrease of $18.7 million, or 52.4%, from the six months ended June 30, 2020, primarily due to a decrease in the cost of average total deposits to 0.39% from 1.13% for the six months ended June 30, 2020. The Company's total cost of funds was 0.60% for the six months ended June 30, 2021, down 69 basis points from the six months ended June 30, 2020.

The Company's provision for credit losses was $749,000 for the quarter ended June 30, 2021, compared to a provision of $9.6 million for the quarter ended June 30, 2020. For the six months ended June 30, 2021 the Company recognized a provision reversal of $4.5 million compared to a provision of $10.4 million for the six months ended June 30, 2020. The allowance for credit losses on loans was $64.3 million, or 1.28%, of total loans at June 30, 2021, compared to $68.8 million, or 1.25%, of total loans at December 31, 2020. Non-performing assets were $10.5 million, or 0.17% of total assets, at June 30, 2021, compared to $3.8 million, or 0.06% of total assets, at June 30, 2020.

Non-interest income was $3.0 million for the quarter ended June 30, 2021, a decrease of $5.6 million, or 64.8%, from the quarter ended June 30, 2020, primarily due to a $4.2 million gain on sale of asset recognized in the second quarter of 2020, and a $1.8 million valuation decrease on marketable equity securities, net. For the six months ended June 30, 2021, non-interest income increased $154,000, or 2.0%, to $8.0 million from $7.8 million for the six months ended June 30, 2020, primarily due to a $3.0 million valuation increase on marketable equity securities, net, a $1.3 million increase in gain on sale of equity securities, net, partially offset by a $4.2 million gain on sale of asset realized in 2020.

Non-interest expenses were $28.0 million, or 1.74% of average assets for the quarter ended June 30, 2021, compared to $23.3 million, or 1.46% of average assets for the quarter ended June 30, 2020. The Company's efficiency ratio was 53.18% for the quarter ended June 30, 2021 compared to 46.79% for the quarter ended June 30, 2020. For the six months ended June 30, 2021, non-interest expenses increased $4.0 million, or 8.0%, to $53.6 million from $49.6 million for the six months ended June 30, 2020, due primarily to $3.3 million in expense for a legal judgment related to a loan assumed in the Mt. Washington Bank acquisition included in other general and administrative and $1.1 million in merger and acquisition related expenses realized in the second quarter of 2021. For the six months ended June 30, 2021 the efficiency ratio is 51.35% compared to 50.44% for the six months ended June 30, 2020.

The Company recorded a provision for income taxes of $5.5 million for the quarter ended June 30, 2021, reflecting an effective tax rate of 24.9%, compared to $5.8 million, or an effective rate of 25.2%, for the quarter ended June 30, 2020. For the six months ended June 30, 2021 the provision for income taxes was $14.2 million, reflecting an effective tax rate of 25.8%, compared to $10.1 million, reflecting an effective rate of 24.9% for the six months ended June 30, 2020.

Total assets were $6.287 billion at June 30, 2021, down $332.7 million, or 5.0%, from $6.620 billion at December 31, 2020. Net loans were $4.937 billion at June 30, 2021, down $507.2 million, or 9.3%, from December 31, 2020, despite loan originations of $449.7 million during the six months ended June 30, 2021. The allowance for credit losses on loans decreased $4.5 million, or 6.6%, to $64.3 million during the six months ended June 30, 2021 from $68.8 million at December 31, 2020, primarily due to changes in the volume and mix of the loan portfolio.

Total deposits were $4.864 billion at June 30, 2021, down $217.4 million, or 4.3%, from $5.081 billion at December 31, 2020. Core deposits, which exclude certificates of deposit, decreased $60.1 million, or 1.6%, during the six months ended June 30, 2021 to $3.802 billion, or 78.2% of total deposits, compared to 76.0% at December 31, 2020. The decrease in core deposits included the payoff of $175.6 million in brokered interest-bearing demand deposits. Certificates of deposit decreased $157.3 million during the six months ended June 30, 2021, inclusive of a $68.3 million decrease in brokered certificates of deposit. Total borrowings were $560.6 million at June 30, 2021, down $147.6 million, or 20.8%, from December 31, 2020, primarily due to $50.0 million in matured advances from the FHLB and paying down all borrowings from the Federal Reserve's PPPLF program.

Total stockholders' equity increased $32.3 million, or 4.2%, to $801.2 million at June 30, 2021 from $768.9 million at December 31, 2020. The increase for the six months ended June 30, 2021 was primarily due to net income of $40.9 million, partially offset by dividends of $0.20 per share totaling $10.1 million. Stockholders' equity to assets was 12.74% at June 30, 2021, compared to 12.13% at March 31, 2021 and 11.61% at December 31, 2020. Tangible book value per share increased to $14.81 at June 30, 2021 from $14.25 at December 31, 2020. Market price per share increased 37.2% to $20.46 at June 30, 2021 from $14.91 at December 31, 2020. The Company and the Bank exceeded the minimum requirement to be considered well capitalized at June 30, 2021.

Meridian Bancorp, Inc. is the holding company for East Boston Savings Bank. East Boston Savings Bank, a Massachusetts-chartered stock savings bank founded in 1848, operates 43 branches in the greater Boston metropolitan area, including 42 full-service locations and one mobile branch. We offer a variety of deposit and loan products to individuals and businesses located in our primary market, which consists of Essex, Middlesex, Norfolk and Suffolk Counties, Massachusetts. For additional information, visit . 

Forward Looking Statements

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


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

June 30, March 31, December 31, June 30,
2021 2021 2020 2020
(Dollars in thousands)
ASSETS
Cash and due from banks $ 1,101,359 $ 1,034,107 $ 914,586 $ 508,627
Securities available for sale, at fair value 9,810 10,518 11,326 13,022
Marketable equity securities, at fair value 9,112 8,900 12,189 16,401
Federal Home Loan Bank stock, at cost 26,184 28,447 30,658 33,282
Loans held for sale 5,711 7,422 8,224 3,682
Loans:
One- to four-family 489,310 517,442 564,146 635,683
Home equity lines of credit 56,032 64,370 68,721 74,246
Multi-family 809,317 878,331 880,552 941,922
Commercial real estate 2,295,030 2,419,715 2,499,660 2,556,088
Construction 645,622 625,961 731,432 742,845
Commercial and industrial 703,745 779,603 765,195 760,546
Consumer 9,749 10,307 10,707 11,867
Total loans 5,008,805 5,295,729 5,520,413 5,723,197
Allowance for credit losses on loans (64,300 ) (63,436 ) (68,824 ) (60,547 )
Net deferred loan origination fees (7,930 ) (8,298 ) (7,784 ) (8,340 )
Loans, net 4,936,575 5,223,995 5,443,805 5,654,310
Bank-owned life insurance 42,402 42,138 41,877 41,334
Premises and equipment, net 64,649 65,394 66,850 67,098
Accrued interest receivable 19,932 22,498 23,173 17,300
Deferred tax asset, net 21,437 21,418 21,355 16,873
Goodwill 20,378 20,378 20,378 20,378
Core deposit intangible 1,445 1,548 1,651 1,887
Other assets 28,147 17,162 23,776 23,776
Total assets $ 6,287,141 $ 6,503,925 $ 6,619,848 $ 6,417,970
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non interest-bearing demand deposits $ 801,612 $ 751,809 $ 711,573 $ 709,924
Interest-bearing demand deposits 1,270,484 1,461,236 1,364,548 1,291,458
Money market deposits 863,526 852,747 930,507 753,980
Regular savings and other deposits 866,191 870,961 855,329 833,951
Certificates of deposit 1,061,914 1,160,616 1,219,210 1,231,084
Total deposits 4,863,727 5,097,369 5,081,167 4,820,397
Short-term borrowings 25,000
Long-term debt 560,625 560,625 708,245 779,101
Accrued expenses and other liabilities 61,575 56,847 61,551 59,199
Total liabilities 5,485,927 5,714,841 5,850,963 5,683,697
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; 52,608,747, 52,430,554, 52,415,061 and 52,407,179 shares issued at June 30, 2021, March 31, 2021, December 31, 2020 and June 30, 2020, respectively 526 524 524 524
Additional paid-in capital 365,607 364,751 363,995 361,980
Retained earnings 451,100 439,593 420,297 387,983
Accumulated other comprehensive (loss) income (146 ) (131 ) (58 ) 100
Unearned compensation - ESOP; 2,191,745, 2,161,304 , 2,191,745 and 2,252,627 shares at June 30, 2021, March 31, 2021, December 31, 2020 and June 30, 2020, respectively (15,873 ) (15,653 ) (15,873 ) (16,314 )
Total stockholders' equity 801,214 789,084 768,885 734,273
Total liabilities and stockholders' equity $ 6,287,141 $ 6,503,925 $ 6,619,848 $ 6,417,970

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

Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2021 2021 2020 2021 2020
(Dollars in thousands, except per share amounts)
Interest and dividend income:
Interest and fees on loans $ 54,918 $ 57,162 $ 61,445 $ 112,080 $ 125,482
Interest on debt securities 61 65 87 126 187
Dividends on marketable equity securities 90 124 145 214 239
Interest on certificates of deposit 1
Other interest and dividend income 361 370 473 731 2,259
Total interest and dividend income 55,430 57,721 62,150 113,151 128,168
Interest expense:
Interest on deposits 4,209 5,729 10,591 9,938 27,360
Interest on short-term borrowings 52 60
Interest on borrowings 3,453 3,591 4,136 7,044 8,279
Total interest expense 7,662 9,320 14,779 16,982 35,699
Net interest income 47,768 48,401 47,371 96,169 92,469
Provision (reversal) for credit losses 749 (5,236 ) 9,641 (4,487 ) 10,366
Net interest income, after provision (reversal) for credit losses 47,019 53,637 37,730 100,656 82,103
Non-interest income:
Customer service fees 2,485 2,199 1,948 4,684 4,045
Loan fees (costs) 39 95 (35 ) 134 639
Mortgage banking gains, net 45 582 118 627 529
Gain on sale of asset 4,195 4,195
Gain (loss) on marketable equity securities, net 200 1,785 2,025 1,985 (2,319 )
Income from bank-owned life insurance 264 261 273 525 570
Other income 17 9 134 26 168
Total non-interest income 3,050 4,931 8,658 7,981 7,827
Non-interest expenses:
Salaries and employee benefits 13,939 15,516 13,858 29,455 29,772
Occupancy and equipment 3,900 4,231 3,739 8,131 7,663
Data processing 2,273 2,241 2,133 4,514 4,270
Marketing and advertising 1,032 896 1,030 1,928 2,260
Professional services 691 730 695 1,421 1,692
Deposit insurance 345 513 606 858 1,275
Merger and acquisition 1,115 1,115
Other general and administrative 4,738 1,416 1,240 6,154 2,689
Total non-interest expenses 28,033 25,543 23,301 53,576 49,621
Income before income taxes 22,036 33,025 23,087 55,061 40,309
Provision for income taxes 5,490 8,705 5,808 14,195 10,053
Net income $ 16,546 $ 24,320 $ 17,279 $ 40,866 $ 30,256
Earnings per share:
Basic $ 0.33 $ 0.48 $ 0.34 $ 0.81 $ 0.60
Diluted $ 0.32 $ 0.48 $ 0.34 $ 0.81 $ 0.60
Weighted average shares outstanding:
Basic 50,375,468 50,239,611 50,131,249 50,307,961 50,383,116
Diluted 50,943,160 50,565,459 50,211,234 50,754,731 50,565,747

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

Three Months Ended
June 30, 2021 March 31, 2021 June 30, 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) $ 5,160,579 $ 55,702 4.33 % $ 5,429,311 $ 57,954 4.33 % $ 5,722,186 $ 62,164 4.37 %
Securities and certificates of deposit 19,445 171 3.53 20,839 208 4.05 33,282 262 3.17
Other interest-earning assets (3) 1,099,850 361 0.13 1,057,264 370 0.14 478,725 473 0.40
Total interest-earning assets 6,279,874 56,234 3.59 6,507,414 58,532 3.65 6,234,193 62,899 4.06
Noninterest-earning assets 154,470 155,169 153,567
Total assets $ 6,434,344 $ 6,662,583 $ 6,387,760
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Interest-bearing demand deposits $ 1,403,276 $ 959 0.27 $ 1,462,239 $ 1,408 0.39 $ 1,297,072 $ 2,293 0.71
Money market deposits 859,189 471 0.22 877,613 780 0.36 722,148 1,227 0.68
Regular savings and other deposits 870,508 333 0.15 861,439 536 0.25 841,600 995 0.48
Certificates of deposit 1,116,928 2,446 0.88 1,223,333 3,005 1.00 1,331,999 6,076 1.83
Total interest-bearing deposits 4,249,901 4,209 0.40 4,424,624 5,729 0.53 4,192,819 10,591 1.02
Borrowings 560,625 3,453 2.47 666,856 3,591 2.18 754,426 4,188 2.23
Total interest-bearing liabilities 4,810,526 7,662 0.64 5,091,480 9,320 0.74 4,947,245 14,779 1.20
Noninterest-bearing demand deposits 777,688 734,316 651,517
Other noninterest-bearing liabilities 50,409 55,337 57,922
Total liabilities 5,638,623 5,881,133 5,656,684
Total stockholders' equity 795,721 781,450 731,076
Total liabilities and stockholders' equity $ 6,434,344 $ 6,662,583 $ 6,387,760
Net interest-earning assets $ 1,469,348 $ 1,415,934 $ 1,286,948
Fully tax-equivalent net interest income 48,572 49,212 48,120
Less: tax-equivalent adjustments (803 ) (811 ) (749 )
Net interest income $ 47,769 $ 48,401 $ 47,371
Interest rate spread (1)(4) 2.95 % 2.91 % 2.86 %
Net interest margin (1)(5) 3.10 % 3.07 % 3.10 %
Average interest-earning assets to average interest-bearing liabilities 130.54 % 127.81 % 126.01 %
Supplemental Information:
Total deposits, including noninterest-bearing demand deposits $ 5,027,589 $ 4,209 0.34 % $ 5,158,940 $ 5,729 0.45 % $ 4,844,336 $ 10,591 0.88 %
Total deposits and borrowings, including noninterest-bearing demand deposits $ 5,588,214 $ 7,662 0.55 % $ 5,825,796 $ 9,320 0.65 % $ 5,598,762 $ 14,779 1.06 %


____________________
(1) Income on debt securities, marketable equity securities and revenue bonds included in commercial real estate loans, as well as resulting yields, interest rate spread and net interest margin, are presented on a tax-equivalent basis. The tax-equivalent adjustments are deducted from tax-equivalent net interest income to agree to amounts reported in the consolidated statements of net income. For the three months ended June 30, 2021, March 31, 2021, and June 30, 2020, yields on loans before tax-equivalent adjustments were 4.27%, 4.27% and 4.32%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 3.11%, 3.68% and 2.80%, respectively, and yields on total interest-earning assets before tax-equivalent adjustments were 3.54%, 3.60% and 4.01%, respectively. Interest rate spread before tax-equivalent adjustments for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020 was 2.90%, 2.86% and 2.81%, respectively, while net interest margin before tax-equivalent adjustments for the three months ended June 30, 2021, March 31, 2021 and June 30, 2020 was 3.05%, 3.02% and 3.06%, 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)

Six Months Ended
June 30, 2021 June 30, 2020
Average
Balance
Interest (1) Yield/
Cost (1)
Average
Balance
Interest (1) Yield/
Cost (1)
(Dollars in thousands)
Assets:
Interest-earning assets:
Loans (2) $ 5,294,203 $ 113,656 4.33 % $ 5,732,019 $ 126,922 4.45 %
Securities and certificates of deposit 20,138 373 3.74 29,170 464 3.20
Other interest-earning assets (3) 1,078,675 731 0.14 439,520 2,259 1.03
Total interest-earning assets 6,393,016 114,760 3.62 6,200,709 129,645 4.20
Noninterest-earning assets 154,817 157,599
Total assets $ 6,547,833 $ 6,358,308
Liabilities and stockholders' equity:
Interest-bearing liabilities:
Interest-bearing demand deposits $ 1,432,595 $ 2,368 0.33 $ 1,288,538 $ 6,790 1.06
Money market deposits 868,350 1,251 0.29 707,022 3,281 0.93
Regular savings and other deposits 865,998 868 0.20 873,850 3,527 0.81
Certificates of deposit 1,169,837 5,451 0.94 1,403,507 13,762 1.97
Total interest-bearing deposits 4,336,780 9,938 0.46 4,272,917 27,360 1.29
Borrowings 613,447 7,044 2.32 704,583 8,339 2.38
Total interest-bearing liabilities 4,950,227 16,982 0.69 4,977,500 35,699 1.44
Noninterest-bearing demand deposits 756,122 593,350
Other noninterest-bearing liabilities 52,859 55,805
Total liabilities 5,759,208 5,626,655
Total stockholders' equity 788,625 731,653
Total liabilities and stockholders' equity $ 6,547,833 $ 6,358,308
Net interest-earning assets $ 1,442,789 $ 1,223,209
Fully tax-equivalent net interest income 97,778 93,946
Less: tax-equivalent adjustments (1,609 ) (1,477 )
Net interest income $ 96,169 $ 92,469
Interest rate spread (1)(4) 2.93 % 2.76 %
Net interest margin (1)(5) 3.08 % 3.05 %
Average interest-earning assets to average interest-bearing liabilities 129.15 % 124.57 %
Supplemental Information:
Total deposits, including noninterest-bearing demand deposits $ 5,092,902 $ 9,938 0.39 % $ 4,866,267 $ 27,360 1.13 %
Total deposits and borrowings, including noninterest-bearing demand deposits $ 5,706,349 $ 16,982 0.60 % $ 5,570,850 $ 35,699 1.29 %


____________________
(1) Income on debt securities, marketable equity securities and revenue bonds included in commercial real estate loans, as well as resulting yields, interest rate spread and net interest margin, are presented on a tax-equivalent basis. The tax-equivalent adjustments are deducted from tax-equivalent net interest income to agree to amounts reported in the consolidated statements of net income. For the six months ended June 30, 2021 and 2020, yields on loans before tax-equivalent adjustments were 4.27%, and 4.40%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 3.40% and 2.94%, respectively, and yields on total interest-earning assets before tax-equivalent adjustments were 3.57% and 4.16%, respectively. Interest rate spread before tax-equivalent adjustments for the six months ended June 30, 2021 and 2020 was 2.88% and 2.72%, respectively, while net interest margin before tax-equivalent adjustments for the six months ended June 30, 2021 and 2020 was 3.03%, and 3.00%, respectively.
(2) Loans on non-accrual status are included in average balances.
(3) Includes Federal Home Loan Bank stock and associated dividends.
(4) Interest rate spread represents the difference between the tax-equivalent yield on interest-earning assets and the cost of interest-bearing liabilities.
(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.
(6) Annualized.

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

Three Months Ended Six Months Ended
June 30, March 31, June 30, June 30, June 30,
2021 2021 2020 2021 2020
Key Performance Ratios
Return on average assets (1) 1.03 % 1.46 % 1.08 % 1.25 % 0.95 %
Return on average equity (1) 8.32 12.45 9.45 10.36 8.27
Interest rate spread (1) (2) 2.95 2.91 2.86 2.93 2.76
Net interest margin (1) (3) 3.10 3.07 3.10 3.08 3.05
Non-interest expense to average assets (1) 1.74 1.53 1.46 1.64 1.56
Efficiency ratio (4) 53.18 49.55 46.79 51.35 50.44


June 30, March 31, December 31, June 30,
2021 2021 2020 2020
(Dollars in thousands)
Asset Quality
Non-accrual loans:
One- to four-family $ 1,633 $ 2,466 $ 2,617 $ 3,074
Home equity lines of credit 20 20 20 20
Commercial real estate 8,176 194
Commercial and industrial 635 635 527 532
Total non-accrual loans 10,464 3,121 3,164 3,820
Foreclosed assets
Total non-performing assets $ 10,464 $ 3,121 $ 3,164 $ 3,820
Allowance for credit losses on loans/total loans 1.28 % 1.20 % 1.25 % 1.06 %
Allowance for credit losses on loans/non-accrual loans 614.49 2,032.55 2,175.22 1,585.00
Non-accrual loans/total loans 0.21 0.06 0.06 0.07
Non-accrual loans/total assets 0.17 0.05 0.05 0.06
Non-performing assets/total assets 0.17 0.05 0.05 0.06
Capital and Share Related
Stockholders' equity to total assets 12.74 % 12.13 % 11.61 % 11.44 %
Book value per share $ 15.23 $ 15.05 $ 14.67 $ 14.01
Tangible book value per share (5) $ 14.81 $ 14.63 $ 14.25 $ 13.59
Market value per share $ 20.46 $ 18.42 $ 14.91 $ 11.60
Shares outstanding 52,608,747 52,430,554 52,415,061 52,407,179


____________________
(1) Annualized.
(2) Interest rate spread represents the difference between the tax-equivalent yield on interest-earning assets and the cost of interest-bearing liabilities.
(3) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.
(4) The efficiency ratio is a non-GAAP measure representing non-interest expense 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, gains and losses on sale of assets, and merger and acquisition expenses as management deems them to be either discretionary or market driven and not representative of operating performance. Presented on a basis including gains and losses on marketable equity securities, gains and losses on sale of assets, and merger and acquisition expenses the efficiency ratio was 55.16%, 47.89% and 41.59% for the quarters ended June 30, 2021, March 31, 2021 and June 30, 2020, respectively and 51.44% and 49.47% for the six months ended June 30, 2021 and 2020, respectively.
(5) Tangible book value per share represents total stockholders' equity less goodwill and other intangible assets divided by the number of shares outstanding.


Contact Data Richard J. Gavegnano, Chairman, President and Chief Executive Officer
(978) 977-2211

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