BOSTON, Oct. 24, 2017 (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 $13.3 million, or $0.25 per diluted share, for the quarter ended September 30, 2017, up from $11.3 million, or $0.22 per diluted share, for the quarter ended June 30, 2017 and $9.5 million, or $0.18 per diluted share, for the quarter ended September 30, 2016. For the nine months ended September 30, 2017, net income was $33.9 million, or $0.65 per diluted share, up from $22.9 million, or $0.44 per diluted share, for the nine months ended September 30, 2016. The Company's return on average assets was 1.10% for the quarter ended September 30, 2017, up from 0.97% for the quarter ended June 30, 2017 and 0.94% for the quarter ended September 30, 2016. For the nine months ended September 30, 2017, the Company's return on average assets was 0.97%, up from 0.80% for the nine months ended September 30, 2016. The Company's return on average equity was 8.40% for the quarter ended September 30, 2017, up from 7.28% for the quarter ended June 30, 2017 and 6.39% for the quarter ended September 30, 2016.  For the nine months ended September 30, 2017, the Company's return on average equity was 7.25%, up from 5.18% for the nine months ended September 30, 2016.

Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, "I am proud to report record net income of $13.3 million for the third quarter of 2017, up 18% from the second quarter of 2017 and up 40% from the third quarter of 2016. Our net income was also up 48% to $33.9 million for the first nine months of 2017 from the same period last year. Our total assets grew to over $5 billion during the third quarter. Since Meridian's second-step stock offering in July 2014, our total assets have increased by $2 billion as driven by the strong organic loan growth that continues to enhance our profitability and operating efficiency."

Mr. Gavegnano added, "Progress is continuing toward completion of our acquisition of Meetinghouse Bancorp, Inc. and Meetinghouse Bank, with approximately $117 million in assets, $80 million in loans, $98 million in deposits and two branches in Dorchester and Roslindale. Meetinghouse has received shareholder approval for its acquisition by Meridian, with closing of the transaction subject to regulatory approvals and other customary closing conditions. We are also continuing the expansion of our core banking franchise with plans for 2018 to open four new branches in Boston's Brighton and Mission Hill neighborhoods and in Lynnfield and West Peabody on the North Shore."

The Company's net interest income was $38.1 million for the quarter ended September 30, 2017, up $2.6 million or 7.3%, from the quarter ended June 30, 2017 and $6.8 million, or 21.6%, from the quarter ended September 30, 2016. The interest rate spread and net interest margin on a tax-equivalent basis were 3.08% and 3.30%, respectively, for the quarter ended September 30, 2017 compared to 3.01% and 3.24%, respectively, for the quarter ended June 30, 2017 and 3.11% and 3.32%, respectively, for the quarter ended September 30, 2016. For the nine months ended September 30, 2017, net interest income increased $17.7 million, or 19.9%, to $106.9 million from the nine months ended September 30, 2016.  The net interest rate spread and net interest margin on a tax-equivalent basis were 3.03% and 3.25%, respectively, for the nine months ended September 30, 2017 compared to 3.14% and 3.35%, respectively, for the nine months ended September 30, 2016.  The increases in net interest income were primarily due to loan growth, partially offset by increases in the average balances of total deposits and borrowings and the cost of funds for the quarter and nine months ended September 30, 2017 compared to the respective prior periods.

Total interest and dividend income increased to $48.0 million for the quarter ended September 30, 2017, up $3.5 million, or 7.8%, from the quarter ended June 30, 2017 and $9.6 million, or 24.9%, from the quarter ended September 30, 2016, primarily due to growth in the Company's average loan balances to $4.403 billion and a five basis point increase in the yield on loans to 4.31% on a tax-equivalent basis. The Company's yield on interest-earning assets on a tax-equivalent basis was 4.13% for the quarter ended September 30, 2017, up 10 basis points from the quarter ended June 30, 2017 and up nine basis points from the quarter ended September 30, 2016.  For the nine months ended September 30, 2017, the Company's total interest and dividend income increased $25.8 million, or 23.8%, to $134.2 million from the nine months ended September 30, 2016 primarily due to growth in the average loan balances of $801.2 million, or 23.6%, to $4.196 billion, partially offset by a decrease in the yield on loans on a tax-equivalent basis of one basis point to 4.27% for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016. The Company's yield on interest-earning assets on a tax-equivalent basis was unchanged at 4.05% for the nine months ended September 30, 2017 and 2016.

Total interest expense increased to $9.9 million for the quarter ended September 30, 2017, up $863,000, or 9.5%, from the quarter ended June 30, 2017 and $2.8 million, or 39.3%, from the quarter ended September 30, 2016. Interest expense on deposits increased to $8.5 million for the quarter ended September 30, 2017, up $593,000, or 7.5%, from the quarter ended June 30, 2017 and $2.3 million, or 35.9%, from the quarter ended September 30, 2016 primarily due to growth in average total deposits to $3.730 billion and increases in the cost of average total deposits to 0.91% from 0.87% for the quarter ended June 30, 2017, and 0.81% for the quarter ended September 30, 2016. Interest expense on borrowings increased to $1.4 million for the quarter ended September 30, 2017, up $270,000, or 24.2%, from the quarter ended June 30, 2017 and $543,000, or 64.3%, from the quarter ended September 30, 2016 primarily due to growth in average total borrowings to $468.6 million. The Company's total cost of funds was 0.94% for the quarter ended September 30, 2017, up four basis points from the quarter ended June 30, 2017 and 11 basis points from the quarter ended September 30, 2016. Total interest expense increased $8.1 million, or 41.8%, to $27.4 million for the nine months ended September 30, 2017 from the nine months ended September 30, 2016. Interest expense on deposits increased $6.7 million, or 39.2%, to $23.9 million for the nine months ended September 30, 2017 from the nine months ended September 30, 2016 due to the growth in average total deposits of $693.3 million, or 23.5%, to $3.644 billion and an increase in the cost of average total deposits of 10 basis points to 0.88%. Interest expense on borrowings increased $1.3 million, or 62.5%, to $3.5 million for the nine months ended September 30, 2017 from the nine months ended September 30, 2016 due to the growth in average total borrowings of $124.2 million, or 47.5%, to $385.7 million and an increase in the cost of average total borrowings of 11 basis points to 1.21%. The Company's cost of funds increased 11 basis points to 0.91% for the nine months ended September 30, 2017 compared to the nine months ended September 30, 2016.

Mr. Gavegnano noted, "Our earnings have been driven to a new quarterly record by the continuing rise in net interest income, reflecting growth in total loans of $848 million, or 23%, on total loan originations of $1.9 billion since September 30, 2016. Our net interest income rose 7% along with a rise in the net interest margin of six basis points in the third quarter from the second quarter of 2017, on average loan growth of 5% and an increase in the yield on loans of five basis points."

The Company's provision for loan losses was $2.5 million for the quarter ended September 30, 2017, up $961,000 from the quarter ended June 30, 2017 and $1.6 million from the quarter ended September 30, 2016. The allowance for loan losses was $45.6 million or 1.00% of total loans at September 30, 2017, compared to $43.2 million or 1.00% of total loans at June 30, 2017, $40.1 million or 1.02% of total loans at December 31, 2016, and $38.7 million or 1.04% of total loans at September 30, 2016. The changes in the provision and the allowance for loan losses 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 improving asset quality trends.

Net charge-offs totaled $44,000 for the quarter ended September 30, 2017, or 0.00% of average loans outstanding on an annualized basis compared to $32,000 for the quarter ended June 30, 2017, and $478,000 for the quarter ended September 30, 2016, or 0.05% of average loans on an annualized basis. For the nine months ended September 30, 2017, net charge-offs totaled $80,000, or 0.00% of average loans outstanding on an annualized basis compared to $584,000 for the nine months ended September 30, 2016, or 0.02% of average loans outstanding on an annualized basis.

Non-accrual loans were $9.2 million, or 0.20% of total loans outstanding, at September 30, 2017; down $2.3 million, or 20.1%, from June 30, 2017; down $4.3 million, or 31.7%, from December 31, 2016; and down $6.0 million, or 39.6%, from September 30, 2016. Non-performing assets were $10.9 million, or 0.21% of total assets, at September 30, 2017, compared to $11.5 million, or 0.24% of total assets, at June 30, 2017, $13.4 million, or 0.30% of total assets at December 31, 2016, and $15.2 million, or 0.36% of total assets, at September 30, 2016.

Mr. Gavegnano commented, "Our non-performing assets declined to a new historic low of 0.21% of total assets with only minor loan charge-off activity during the third quarter of 2017. Maintaining a disciplined underwriting process and outstanding asset quality remains a top priority as we continue to grow at a strong pace."

Non-interest income was $5.3 million for the quarter ended September 30, 2017, up from $5.0 million for the quarter ended June 30, 2017 and up from $3.3 million for the quarter ended September 30, 2016. Non-interest income increased $223,000, or 4.4%, as compared to the quarter ended June 30, 2017, primarily due to a $1.7 million gain on a life insurance distribution, partially offset by a decrease of $1.5 million in loan fees. As compared to the quarter ended September 30, 2016, non-interest income increased $2.0 million, or 59.1%, primarily due to the $1.7 million gain on a life insurance distribution and a $599,000 increase in gain on sales of securities, net. For the nine months ended September 30, 2017, non-interest income increased $5.8 million, or 67.4%, to $14.4 million from $8.6 million for the nine months ended September 30, 2016, primarily due to a $2.9 million increase in gain on sale of securities, net, the $1.7 million gain on a life insurance distribution, and a $1.3 million increase in loan fees. The gain on life insurance distribution is related to a banked-owned life insurance claim recognized during the third quarter of 2017.  The increases in loan fees are primarily due to $1.3 million of loan swap fee income recognized in the second quarter of 2017.

Non-interest expenses were $20.8 million, or 1.71% of average assets for the quarter ended September 30, 2017, compared to $21.4 million, or 1.83% of average assets for the quarter ended June 30, 2017 and $19.2 million, or 1.90% of average assets for the quarter ended September 30, 2016.  Non-interest expenses increased $1.6 million, or 8.6%, compared to the quarter ended September 30, 2016, due primarily to increases of $804,000 in salaries and employee benefits, $309,000 in other general and administrative expenses, $271,000 in merger and acquisition expenses, and $235,000 in data processing.  For the nine months ended September 30, 2017, non-interest expenses increased $6.4 million, or 11.1%, to $64.1 million from $57.7 million for the nine months ended September 30, 2016, due to increases of $2.7 million in salaries and employee benefits, $869,000 in professional services, $807,000 in occupancy and equipment expenses, $608,000 in deposit insurance premiums, $577,000 in data processing expenses, $271,000 in merger and acquisition expenses,  $231,000 in other general and administrative expenses, and $278,000 in marketing and advertising expenses.  The increases in salaries and employee benefits expenses reflect annual increases in employee compensation and health benefits during the first quarter of 2017.  In addition, the increases in salaries and employee benefits, and occupancy and equipment expenses include costs associated with the expansion of our branch and regulatory compliance staff.  Professional services increased primarily due to additional costs related to regulatory compliance projects.  The Company's efficiency ratio improved to 49.04% for the quarter ended September 30, 2017 compared to 53.95% for the quarter ended June 30, 2017 and 55.81% for the quarter ended September 30, 2016.  For the nine months ended September 30, 2017, the efficiency ratio was 54.33% compared to 59.31% for the nine months ended September 30, 2016.

Mr. Gavegnano said, "The improvement in our efficiency ratio to 49.04% in the third quarter of 2017 from 53.95% in the second quarter reflected the 7% rise in net interest income, the $1.7 million gain on a distribution from a bank-owned life insurance policy and a $591,000 decline in non-interest expenses. With enhancements to our regulatory compliance infrastructure virtually completed, the related overhead expenses levels are stabilizing. Non-interest expenses in the third quarter included $271,000 related to our pending acquisition of Meetinghouse Bank, with additional merger-related expenses to be incurred as we move forward with the transaction."

The Company recorded a provision for income taxes of $6.7 million for the quarter ended September 30, 2017, reflecting an effective tax rate of 33.5%, compared to $6.2 million, or an effective tax rate of 35.5%, for the quarter ended June 30, 2017, and $5.1 million, or an effective tax rate of 34.9%, for the quarter ended September 30, 2016. For the nine months ended September 30, 2017, the provision for income taxes was $17.6 million, reflecting an effective tax rate of 34.2%, compared to $11.2 million, or an effective tax rate of 32.9%, for the nine months ended September 30, 2016. The changes in the income tax provision and effective tax rate were primarily due to changes in the components of pre-tax income.

Total assets were $5.086 billion at September 30, 2017, up $299.0 million, or 6.2%, from $4.787 billion at June 30, 2017 and $650.4 million, or 14.7%, from $4.436 billion at December 31, 2016.  Net loans were $4.502 billion at September 30, 2017, up $246.0 million, or 5.8%, from June 30, 2017, and $603.2 million, or 15.5%, from December 31, 2016. Loan originations totaled $483.1 million during the quarter ended September 30, 2017 and $1.310 billion during the nine months ended September 30, 2017. The net increase in loans for the nine months ended September 30, 2017 was primarily due to increases of $294.2 million in commercial real estate loans, $139.7 million in multi-family loans, $101.7 million in construction loans, $46.3 million in commercial and industrial loans, and $27.9 million in one- to four-family loans.  Cash and due from banks was $300.3 million at September 30, 2017, an increase of $63.9 million, or 27.0% from December 31, 2016.  Securities available for sale were $44.7 million at September 30, 2017, a decrease of $23.0 million, or 34.0%, from $67.7 million at December 31, 2016.

Total deposits were $3.945 billion at September 30, 2017, an increase of $285.6 million, or 7.8%, from $3.660 billion at June 30, 2017 and an increase of $469.6 million, or 13.5%, from $3.476 billion at December 31, 2016.  Core deposits, which exclude certificate of deposits, increased $304.6 million, or 13.0%, during the nine months ended September 30, 2017 to $2.652 billion, or 67.2% of total deposits. Total borrowings were $471.1 million, down $2.9 million, or 0.6%, from June 30, 2017 and up $148.6 million, or 46.1%, from December 31, 2016.

Total stockholders' equity increased $13.7 million, or 2.2%, to $640.4 million at September 30, 2017 from $626.7 million at June 30, 2017, and $33.1 million, or 5.5%, from $607.3 million at December 31, 2016. The increase for the nine months ended September 30, 2017 was primarily due to net income of $33.9 million, $4.5 million related to stock-based compensation plans and $816,000 in accumulated other comprehensive income, reflecting an increase in the fair value of available-for-sale securities, partially offset by dividends of $0.12 per share totaling $6.1 million. Stockholders' equity to assets was 12.59% at September 30, 2017, compared to 13.09% at June 30, 2017 and 13.69% at December 31, 2016. Book value per share increased to $11.87 at September 30, 2017 from $11.33 at December 31, 2016. Tangible book value per share increased to $11.62 at September 30, 2017 from $11.08 at December 31, 2016. Market price per share decreased $0.25, or 1.3%, to $18.65 at September 30, 2017 from $18.90 at December 31, 2016. At September 30, 2017, the Company and the Bank continued to exceed all regulatory capital requirements.

As of September 30, 2017, the Company had repurchased 2,059,611 shares of its stock at an average price of $13.71 per share, or 75.2% of the 2,737,334 shares authorized for repurchase under the Company's repurchase program adopted in August 2015. The Company did not repurchase any of its shares during the nine months ended September 30, 2017.

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 31 full-service locations and one mobile location in the greater Boston metropolitan area. 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)      
       
      September 30, 2017     June 30, 2017     December 31, 2016     September 30, 2016      
                                       
    (Dollars in thousands)  
ASSETS                                      
Cash and due from banks     $ 300,297     $ 234,776     $ 236,423     $ 182,852      
Certificates of deposit       75,192       85,323       80,323       30,342      
Securities available for sale, at fair value       44,661       52,362       67,663       145,441      
Federal Home Loan Bank stock, at cost       22,976       22,579       18,175       17,818      
Loans held for sale       3,707       2,257       3,944       2,854      
Loans:                                      
One- to four-family       560,393       552,762       532,450       526,828      
Home equity lines of credit       42,042       42,599       42,913       46,249      
Multi-family       702,631       695,602       562,948       522,444      
Commercial real estate       2,070,761       1,927,572       1,776,601       1,607,276      
Construction       604,487       517,471       502,753       490,016      
Commercial and industrial       561,769       557,443       515,430       501,976      
Consumer       10,222       10,058       9,712       9,680      
Total loans       4,552,305       4,303,507       3,942,807       3,704,469      
Allowance for loan losses       (45,643 )     (43,229 )     (40,149 )     (38,697 )    
Net deferred loan origination fees       (4,794 )     (4,443 )     (3,990 )     (4,159 )    
Loans, net       4,501,868       4,255,835       3,898,668       3,661,613      
Bank-owned life insurance       40,052       41,325       40,745       40,451      
Foreclosed real estate, net       1,690                        
Premises and equipment, net       40,077       40,621       41,427       40,747      
Accrued interest receivable       11,580       11,068       10,381       9,209      
Deferred tax asset, net       21,487       21,728       21,461       19,835      
Goodwill       13,687       13,687       13,687       13,687      
Other assets       9,140       5,853       3,105       8,281      
Total assets     $ 5,086,414     $ 4,787,414     $ 4,436,002     $ 4,173,130      
                                       
LIABILITIES AND STOCKHOLDERS' EQUITY                                      
Deposits:                                      
Non interest-bearing demand deposits     $ 455,540     $ 457,009     $ 431,222     $ 410,667      
NOW deposits       896,561       779,208       630,413       547,650      
Money market deposits       975,246       972,720       980,344       863,385      
Regular savings and other deposits       324,895       321,674       305,632       301,754      
Certificates of deposit       1,293,227       1,129,306       1,128,226       1,106,113      
Total deposits       3,945,469       3,659,917       3,475,837       3,229,569      
Short-term borrowings             40,000                  
Long-term debt       471,069       434,015       322,512       319,820      
Accrued expenses and other liabilities       29,472       26,753       30,356       26,685      
Total liabilities       4,446,010       4,160,685       3,828,705       3,576,074      
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; 53,947,394, 53,649,946, 53,596,105 and 53,714,191 shares issued at September 30, 2017, June 30, 2017, December 31, 2016 and September 30, 2016, respectively       539       537       536       537      
Additional paid-in capital       393,903       392,446       390,065       390,587      
Retained earnings       262,079       250,800       234,290       224,509      
Accumulated other comprehensive income       2,622       1,905       1,806       1,044      
Unearned compensation - ESOP, 2,587,477, 2,617,918, 2,678,800 and 2,709,242 at September 30, 2017, June 30, 2017, December 31, 2016 and September 30, 2016, respectively       (18,739 )     (18,959 )     (19,400 )     (19,621 )    
Total stockholders' equity       640,404       626,729       607,297       597,056      
Total liabilities and stockholders' equity     $ 5,086,414     $ 4,787,414     $ 4,436,002     $ 4,173,130      
                                       

MERIDIAN BANCORP, INC. AND SUBSIDIARIES    
CONSOLIDATED STATEMENTS OF NET INCOME    
(Unaudited)    
     
    Three Months Ended     Nine Months Ended    
    September 30, 2017     June 30, 2017       September 30, 2016     September 30, 2017     September 30, 2016    
                                             
    (Dollars in thousands, except per share amounts)    
Interest and dividend income:                                            
Interest and fees on loans   $ 46,597     $ 43,195       $ 37,444     $ 130,281     $ 105,369    
Interest on debt securities:                                            
Taxable     58       83         203       260       707    
Tax-exempt           8         30       18       95    
Dividends on equity securities     275       291         365       843       1,183    
Interest on certificates of deposit     221       196         75       629       380    
Other interest and dividend income     819       736         303       2,200       709    
Total interest and dividend income     47,970       44,509         38,420       134,231       108,443    
Interest expense:                                            
Interest on deposits     8,528       7,935         6,273       23,882       17,162    
Interest on short-term borrowings           4               4       6    
Interest on long-term debt     1,388       1,114         845       3,482       2,139    
Total interest expense     9,916       9,053         7,118       27,368       19,307    
Net interest income     38,054       35,456         31,302       106,863       89,136    
Provision for loan losses     2,458       1,497         858       5,574       5,876    
Net interest income, after provision for loan losses     35,596       33,959         30,444       101,289       83,260    
Non-interest income:                                            
Customer service fees     2,081       2,214         2,172       6,347       6,258    
Loan fees     180       1,634         293       1,882       583    
Mortgage banking gains, net     176       82         274       348       448    
Gain on sales of securities, net     865       808         266       3,247       393    
Income from bank-owned life insurance     294       292         296       874       894    
Gain on life insurance distribution     1,657                     1,657          
Total non-interest income     5,253       5,030         3,301       14,355       8,576    
Non-interest expenses:                                            
Salaries and employee benefits     12,973       12,752         12,169       39,400       36,661    
Occupancy and equipment     2,676       3,036         2,577       8,735       7,928    
Data processing     1,528       1,474         1,293       4,381       3,804    
Marketing and advertising     715       953         832       2,522       2,244    
Professional services     624       1,106         663       2,865       1,996    
Deposit insurance     660       813         572       2,164       1,556    
Merger and acquisition     271                     271          
Other general and administrative     1,367       1,271         1,058       3,758       3,527    
Total non-interest expenses     20,814       21,405         19,164       64,096       57,716    
Income before income taxes     20,035       17,584         14,581       51,548       34,120    
Provision for income taxes     6,702       6,237         5,084       17,624       11,239    
Net income   $ 13,333     $ 11,347       $ 9,497     $ 33,924     $ 22,881    
                                             
Earnings per share:                                            
Basic   $ 0.26     $ 0.22       $ 0.19     $ 0.66     $ 0.45    
Diluted   $ 0.25     $ 0.22       $ 0.18     $ 0.65     $ 0.44    
Weighted average shares:                                            
Basic     51,229,203       51,003,967         50,982,633       51,061,959     51,192,332    
Diluted     52,672,962       52,422,486         52,093,009       52,541,752     52,297,367    

MERIDIAN BANCORP, INC. AND SUBSIDIARIES
NET INTEREST INCOME ANALYSIS
(Unaudited)
 
    For the Three Months Ended
    September 30, 2017   June 30, 2017   September 30, 2016
    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)   $ 4,402,966     $ 47,855         4.31   %   $ 4,180,602     $ 44,431         4.26   %   $ 3,614,168     $ 38,684         4.26   %
Securities and certificates of deposit     132,972       658         1.96         142,159       691         1.95         157,293       823         2.08    
Other interest-earning assets (3)     208,193       819         1.56         239,590       736         1.23         148,425       303         0.81    
Total interest-earning assets     4,744,131       49,332         4.13         4,562,351       45,858         4.03         3,919,886       39,810         4.04    
Noninterest-earning assets     115,491                           110,509                           117,703                      
Total assets   $ 4,859,622                         $ 4,672,860                         $ 4,037,589                      
Liabilities and stockholders' equity:                                                                                    
Interest-bearing liabilities:                                                                                    
NOW deposits   $ 819,965       1,874         0.91       $ 753,839       1,598         0.85       $ 493,612       816         0.66    
Money market deposits     966,340       2,240         0.92         992,382       2,219         0.90         836,941       1,715         0.82    
Regular savings and other deposits     323,621       113         0.14         317,656       114         0.14         298,799       107         0.14    
Certificates of deposit     1,169,264       4,301         1.46         1,147,440       4,004         1.40         1,085,898       3,635         1.33    
Total interest-bearing deposits     3,279,190       8,528         1.03         3,211,317       7,935         0.99         2,715,250       6,273         0.92    
Borrowings     468,642       1,388         1.18         356,325       1,118         1.26         320,091       845         1.05    
Total interest-bearing liabilities     3,747,832       9,916         1.05         3,567,642       9,053         1.02         3,035,341       7,118         0.93    
Noninterest-bearing demand deposits     450,890                           456,447                           383,953                      
Other noninterest-bearing liabilities     26,228                           25,732                           23,977                      
Total liabilities     4,224,950                           4,049,821                           3,443,271                      
Total stockholders' equity     634,672                           623,039                           594,318                      
Total liabilities and stockholders' equity   $ 4,859,622                         $ 4,672,860                         $ 4,037,589                      
Net interest-earning assets   $ 996,299                         $ 994,709                         $ 884,545                      
Fully tax-equivalent net interest income             39,416                           36,805                           32,692              
Less: tax-equivalent adjustments             (1,362 )                         (1,349 )                         (1,390 )            
Net interest income           $ 38,054                         $ 35,456                         $ 31,302              
Interest rate spread (1)(4)                       3.08   %                       3.01   %                       3.11   %
Net interest margin (1)(5)                       3.30   %                       3.24   %                       3.32   %
Average interest-earning assets to average                                                                                    
interest-bearing liabilities             126.58   %                       127.88   %                       129.14   %          
Supplemental Information:                                                                                    
Total deposits, including noninterest-bearing                                                                                    
demand deposits   $ 3,730,080     $ 8,528         0.91   %   $ 3,667,764     $ 7,935         0.87   %   $ 3,099,203     $ 6,273         0.81   %
Total deposits and borrowings, including                                                                                    
noninterest-bearing demand deposits   $ 4,198,722     $ 9,916         0.94   %   $ 4,024,089     $ 9,053         0.90   %   $ 3,419,294     $ 7,118         0.83   %

(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 September 30, 2017, June 30, 2017 and September 30, 2016, yields on loans before tax-equivalent adjustments were 4.20%, 4.14% and 4.12%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 1.65%, 1.63% and 1.70%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 4.01%, 3.91% and 3.90%, respectively. Interest rate spread before tax-equivalent adjustments for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016 was 2.96%, 2.89% and 2.97%, respectively, while net interest margin before tax-equivalent adjustments for the three months ended September 30, 2017, June 30, 2017 and September 30, 2016 was 3.18%, 3.12% and 3.18%, 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)
 
    For the Nine Months Ended,
    September 30, 2017   September 30, 2016
    Average               Yield/   Average               Yield/
    Balance     Interest (1)   Cost (1)(6)   Balance     Interest (1)   Cost (1)(6)
                                                         
    (Dollars in thousands)
Assets:                                                        
Interest-earning assets:                                                        
Loans (2)   $ 4,196,281     $ 133,976         4.27   %   $ 3,395,072     $ 108,788         4.28   %
Securities and certificates of deposit     140,277       2,076         1.98         196,022       2,852         1.94    
Other interest-earning assets (3)     230,291       2,200         1.28         114,064       709         0.83    
Total interest-earning assets     4,566,849       138,252         4.05         3,705,158       112,349         4.05    
Noninterest-earning assets     112,600                           118,211                      
Total assets   $ 4,679,449                         $ 3,823,369                      
                                                         
Liabilities and stockholders' equity:                                                        
Interest-bearing liabilities:                                                        
NOW deposits   $ 743,531       4,691         0.84       $ 432,729       1,962         0.61    
Money market deposits     988,884       6,689         0.90         841,430       5,070         0.80    
Regular savings and other deposits     316,463       335         0.14         295,313       316         0.14    
Certificates of deposit     1,150,472       12,167         1.41         1,009,724       9,814         1.30    
Total interest-bearing deposits     3,199,350       23,882         1.00         2,579,196       17,162         0.89    
Borrowings     385,696       3,486         1.21         261,524       2,145         1.10    
Total interest-bearing liabilities     3,585,046       27,368         1.02         2,840,720       19,307         0.91    
Noninterest-bearing demand deposits     444,324                           371,204                      
Other noninterest-bearing liabilities     26,421                           22,841                      
Total liabilities     4,055,791                           3,234,765                      
Total stockholders' equity     623,658                           588,604                      
Total liabilities and stockholders' equity   $ 4,679,449                         $ 3,823,369                      
Net interest-earning assets   $ 981,803                         $ 864,438                      
Fully tax-equivalent net interest income             110,884                           93,042              
Less: tax-equivalent adjustments             (4,021 )                         (3,906 )            
Net interest income           $ 106,863                         $ 89,136              
Interest rate spread (1)(4)                       3.03   %                       3.14   %
Net interest margin (1)(5)                       3.25   %                       3.35   %
Average interest-earning assets to average                                                        
interest-bearing liabilities             127.39   %                       130.43   %          
                                                         
Supplemental Information:                                                        
Total deposits, including noninterest-bearing                                                        
demand deposits   $ 3,643,674     $ 23,882         0.88   %   $ 2,950,400     $ 17,162         0.78   %
Total deposits and borrowings, including                                                        
noninterest-bearing demand deposits   $ 4,029,370     $ 27,368         0.91   %   $ 3,211,924     $ 19,307         0.80   %

(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 six months ended September 30, 2017, and 2016, yields on loans before tax-equivalent adjustments were 4.15% and 4.15%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 1.67% and 1.61%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 3.93% and 3.91%, respectively. Interest rate spread before tax-equivalent adjustments for the six months ended September 30, 2017, and 2016 was 2.91% and 3.00%, respectively, while net interest margin before tax-equivalent adjustments for the six months ended September 30, 2017, and 2016 was 3.13% and 3.21%, 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 Nine Months Ended  
    September 30, 2017   June 30, 2017   September 30, 2016   September 30, 2017   September 30, 2016  
                                                     
Key Performance Ratios                                                    
Return on average assets (1)     1.10   %     0.97   %     0.94   %     0.97   %     0.80   %  
Return on average equity (1)     8.40         7.28         6.39         7.25         5.18      
Interest rate spread  (1) (2)     3.08         3.01         3.11         3.03         3.14      
Net interest margin  (1) (3)     3.30         3.24         3.32         3.25         3.35      
Non-interest expense to average assets  (1)     1.71         1.83         1.90         1.83         2.01      
Efficiency ratio (4)     49.04         53.95         55.81         54.33         59.31      

    September 30, 2017   June 30, 2017   December 31, 2016   September 30, 2016    
                                         
    (Dollars in thousands)    
Asset Quality                                        
Non-accrual loans:                                        
One- to four-family   $ 7,055       $ 7,667       $ 8,487       $ 8,828    
Home equity lines of credit     563         619         674         746    
Commercial real estate     862         2,666         2,807         2,871    
Construction     173         -         815         2,031    
Commercial and industrial     525         529         653         730    
Total non-accrual loans     9,178         11,481         13,436         15,206    
Foreclosed assets     1,690                            
Total non-performing assets   $ 10,868       $ 11,481       $ 13,436       $ 15,206    
                                         
Allowance for loan losses/total loans     1.00   %     1.00   %     1.02   %     1.04   %
Allowance for loan losses/non-accrual loans     497.31         376.53         298.82         254.49    
Non-accrual loans/total loans     0.20         0.27         0.34         0.41    
Non-accrual loans/total assets     0.18         0.24         0.30         0.36    
Non-performing assets/total assets     0.21         0.24         0.30         0.36    
                                         
Capital and Share Related                                        
Stockholders' equity to total assets     12.59   %     13.09   %     13.69   %     14.31   %
Book value per share   $ 11.87       $ 11.68       $ 11.33       $ 11.12    
Tangible book value per share   $ 11.62       $ 11.43       $ 11.08       $ 10.86    
Market value per share   $ 18.65       $ 16.90       $ 18.90       $ 15.57    
Shares outstanding   53,947,394       53,649,946       53,596,105       53,714,191    

(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 or losses on sales of securities. The efficiency ratio is a common measure used by banks to understand expenses related to the generation of revenue. We have removed gains or losses on sales of securities as management deems them to be discretionary and not representative of operating performance.
Contact: Richard J. Gavegnano, Chairman, President and Chief Executive Officer(978) 977-2211

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