×

Meridian Bancorp, Inc. Reports Record First Quarter Net Income

BOSTON, April 25, 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 $9.2 million, or $0.18 per diluted share, for the quarter ended March 31, 2017, compared to $11.3 million, or $0.22 per diluted share, for the quarter ended December 31, 2016 and $7.5 million, or $0.14 per diluted share, for the quarter ended March 31, 2016. The Company’s return on average assets was 0.82% for the quarter ended March 31, 2017, compared to 1.05% for the quarter ended December 31, 2016 and 0.83% for the quarter ended March 31, 2016. The Company’s return on average equity was 6.03% for the quarter ended March 31, 2017, compared to 7.51% for the quarter ended December 31, 2016 and 5.11% for the quarter ended March 31, 2016.

Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, “I am pleased to report net income of $9.2 million, a new first quarter record, for 2017, up 24% from the first quarter of 2016 resulting from an 18% rise in net interest income. During the first quarter, our total assets grew to $4.6 billion reflecting net growth of $122 million, or 3%, in loans to $4.0 billion and of $181 million, or 5%, in deposits to $3.7 billion. We are continuing to attract new business and consumer relationships that are the key to our strong organic growth as we consider other opportunities to gain market share in the Boston area and build stockholder value.”

The Company’s net interest income was $33.4 million for the quarter ended March 31, 2017, down $66,000, or 0.2%, from the quarter ended December 31, 2016 and up $5.0 million, or 17.5%, from the quarter ended March 31, 2016. The interest rate spread and net interest margin on a tax-equivalent basis were 2.99% and 3.20%, respectively, for the quarter ended March 31, 2017 compared to 3.09% and 3.31%, respectively, for the quarter ended December 31, 2016 and 3.18% and 3.39%, respectively, for the quarter ended March 31, 2016. The decrease in net interest income as compared to the quarter ended December 31, 2016 was primarily due to growth in deposits and borrowings that exceeded loan growth, and a decline in the yield on loans with an increase in the cost of funds. As compared to the quarter ended March 31, 2016, the increase in net interest income was primarily due to loan growth, partially offset by growth in deposits and borrowings along with a decline in the yield on loans and an increase in the cost of funds.

Total interest and dividend income increased to $41.8 million for the quarter ended March 31, 2017, up $503,000, or 1.2%, from the quarter ended December 31, 2016 and $7.6 million, or 22.1%, from the quarter ended March 31, 2016, primarily due to growth in the Company’s average loan balances to $4.001 billion, partially offset by declines in the yield on loans to 4.23% on a tax-equivalent basis, reflecting reductions in prepayment, late payment and other fees of $755,000 compared to the fourth quarter of 2016 and $661,000 compared to the first quarter of 2016. The Company’s yield on interest-earning assets on a tax-equivalent basis was 3.98% for the quarter ended March 31, 2017, down seven basis points from the quarter ended December 31, 2016 and eight basis points from the quarter ended March 31, 2016.

Total interest expense increased to $8.4 million for the quarter ended March 31, 2017, up $569,000, or 7.3%, from the quarter ended December 31, 2016 and $2.6 million, or 44.7%, from the quarter ended March 31, 2016. Interest expense on deposits increased to $7.4 million for the quarter ended March 31, 2017, up $457,000, or 6.6%, from the quarter ended December 31, 2016 and $2.2 million, or 41.9%, from the quarter ended March 31, 2016 primarily due to growth in average total deposits to $3.531 billion and an increase in the cost of average total deposits to 0.85%. Interest expense on borrowings increased to $980,000 for the quarter ended March 31, 2017, up $112,000, or 12.9%, from the quarter ended December 31, 2016 and $403,000, or 69.8%, from the quarter ended March 31, 2016 primarily due to growth in average total borrowings to $330.6 million, and an increase in the cost of average total borrowings to 1.20%. The Company’s cost of funds was 0.88% for the quarter ended March 31, 2017, up three basis points from the quarter ended December 31, 2016 and 10 basis points from the quarter ended March 31, 2016.

Mr. Gavegnano noted, “Our average loan balances in the first quarter increased by 5% from the fourth quarter and 27% from the first quarter of last year while our loan yield decreased to 4.23% from the prior quarters due primarily to lower fees recognized on early repayments and late payments on loans. Our average total deposits and borrowings also increased by 5% from the fourth quarter and 28% from the first quarter of last year and our cost of funds increased to 0.88% as we built and maintained liquidity to fund our strong lending pipeline.”

The Company's provision for loan losses was $1.6 million for the quarter ended March 31, 2017, up $315,000 from the quarter ended December 31, 2016 and $553,000 from the quarter ended March 31, 2016. The allowance for loan losses was $41.8 million or 1.03% of total loans at March 31, 2017, compared to $40.1 million or 1.02% of total loans at December 31, 2016 and $34.4 million or 1.06% of total loans at March 31, 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 $3,000 for the quarter ended March 31, 2017, or less than 0.01% of average loans outstanding on an annualized basis compared to net recoveries of $147,000 for the quarter ended December 31, 2016, or 0.02% of average loans outstanding on an annualized basis and net charge-offs of $81,000 for the quarter ended March 31, 2016, or 0.01% of average loans outstanding on an annualized basis.

Non-accrual loans were $13.7 million, or 0.34% of total loans outstanding, at March 31, 2017, up $250,000, or 1.9%, from December 31, 2016 and down $17.0 million, or 55.4%, from March 31, 2016. The reductions in non-accrual loans from March 31, 2016 were primarily due to the sale at foreclosure during the third quarter of 2016 of an $11.5 million multi-family construction loan in Boston that was originally placed on non-accrual status during the second quarter of 2015, along with reductions across all categories of non-accrual loans. Non-performing assets were $13.7 million, or 0.30% of total assets, at March 31, 2017, compared to $13.4 million, or 0.30% of total assets, at December 31, 2016 and $31.3 million, or 0.84% of total assets, at March 31, 2016.

Mr. Gavegnano commented, “Our asset quality continued to be outstanding during the first quarter of 2017, as our delinquent and non-performing loans remained at historically low levels and net loan charge-offs were near zero. We remain vigilant in maintaining our strong loan underwriting, credit monitoring and loan collection processes.”

Non-interest income was $4.1 million for the quarter ended March 31, 2017, down from $5.6 million for the quarter ended December 31, 2016 and up from $2.7 million for the quarter ended March 31, 2016. Non-interest income decreased $1.5 million, or 27.5%, as compared to the quarter ended December 31, 2016, primarily due to decreases of $1.1 million in gain on sales of securities, net, $179,000 in customer service fees and $214,000 in loan fees. As compared to the quarter ended March 31, 2016, non-interest income increased $1.4 million, or 51.3%, primarily due to increases of $1.5 million in gain on sales of securities, net, and $105,000 in customer service fees, partially offset by a decrease of $244,000 in loan fees.

Non-interest expenses were $21.9 million, or 1.94% of average assets for the quarter ended March 31, 2017, compared to $19.8 million, or 1.84% of average assets for the quarter ended December 31, 2016 and $19.2 million, or 2.13% of average assets for the quarter ended March 31, 2016. Non-interest expenses increased $2.1 million, or 10.6%, as compared to the quarter ended December 31, 2016, primarily due to increases of $1.5 million in salaries and employee benefits, $142,000 in occupancy and equipment expenses, $166,000 in professional services and $210,000 in deposit insurance premiums. As compared to the quarter ended March 31, 2016, non-interest expenses increased $2.6 million, or 13.8%, primarily due to increases of $1.2 million in salaries and employee benefits, $539,000 in occupancy and equipment expenses, $122,000 in data processing, $141,000 in marketing and advertising, $522,000 in professional services and $239,000 in deposit insurance premiums. The increases in salaries and employee benefits expenses reflect annual increases in employee compensation and health benefits during the three months ended March 31, 2017. In addition, the increases in salaries and employee benefits, occupancy and equipment expenses and other general and administrative expenses include costs associated with the opening of two new branches, the introduction of our new mobile branch in 2016 and an expansion of our regulatory compliance staff. Professional services increased primarily due to additional costs related to regulatory compliance projects. The Company’s efficiency ratio was 61.02% for the quarter ended March 31, 2017 compared to 54.33% for the quarter ended December 31, 2016 and 62.01% for the quarter ended March 31, 2016.

Mr. Gavegnano added, “The rise in our efficiency ratio to 61.02% for the first quarter of 2017 was largely due to increases in professional fees and employee compensation costs associated with initiatives undertaken in the fourth quarter of last year to enhance our regulatory compliance infrastructure as we meet the needs of our growing bank. Based on our expectations for steadily rising net interest income driven by strong loan demand and prudent management of recurring non-interest expenses, we believe our operating efficiency will return to an improving trend in the coming periods.”

The Company recorded a provision for income taxes of $4.7 million for the quarter ended March 31, 2017, reflecting an effective tax rate of 33.6%, compared to $6.6 million, or an effective tax rate of 37.0%, for the quarter ended December 31, 2016, and $3.3 million, or an effective tax rate of 30.6%, for the quarter ended March 31, 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 $4.639 billion at March 31, 2017, an increase of $202.7 million, or 4.6%, from $4.436 billion at December 31, 2016. Net loans were $4.021 billion at March 31, 2017, an increase of $122.1 million, or 3.1%, from December 31, 2016. Loan originations totaled $426.0 million during the quarter ended March 31, 2017. The net increase in loans for the three months ended March 31, 2017 was primarily due to increases of $64.6 million in construction loans, $24.2 million in multi-family loans, $14.9 million in commercial real estate loans, $11.6 million in one- to four-family loans and $9.3 million in commercial and industrial loans. Cash and due from banks was $327.7 million at March 31, 2017, an increase of $91.2 million, or 38.6%, from December 31, 2016. Securities available for sale were $59.1 million at March 31, 2017, a decrease of $8.6 million, or 12.7%, from $67.7 million at December 31, 2016.

Total deposits were $3.657 billion at March 31, 2017, an increase of $180.8 million, or 5.2%, from $3.476 billion at December 31, 2016. Core deposits, which exclude certificate of deposits, increased $168.8 million, or 7.2%, during the three months ended March 31, 2017 to $2.516 billion, or 68.8% of total deposits. Total borrowings were $334.8 million, an increase of $12.3 million, or 3.8%, from December 31, 2016.

Total stockholders’ equity increased $8.9 million, or 1.5%, to $616.2 million at March 31, 2017 from $607.3 million at December 31, 2016. The increase for the three months ended March 31, 2017 was primarily due to net income of $9.2 million, $1.5 million related to stock-based compensation plans and $228,000 in accumulated other comprehensive income, reflecting an increase in the fair value of available-for-sale securities, partially offset by a dividend of $0.04 per share totaling $2.1 million. Stockholders’ equity to assets was 13.28% at March 31, 2017, compared to 13.69% at December 31, 2016. Book value per share increased to $11.49 at March 31, 2017 from $11.33 at December 31, 2016. Tangible book value per share increased to $11.23 at March 31, 2017 from $11.08 at December 31, 2016. Market price per share decreased $0.60, or 3.2%, to $18.30 at March 31, 2017 from $18.90 at December 31, 2016. At March 31, 2017, the Company and the Bank continued to exceed all regulatory capital requirements.

As of the quarter ended March 31, 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 as adopted in August 2015. The Company did not repurchase any of its shares during the quarter ended March 31, 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)

March 31, 2017 December 31, 2016 March 31, 2016
(Dollars in thousands)
ASSETS
Cash and due from banks $327,663 $236,423 $154,122
Certificates of deposit 80,323 80,323 92,675
Securities available for sale, at fair value 59,058 67,663 132,115
Federal Home Loan Bank stock, at cost 18,629 18,175 13,021
Loans held for sale 1,022 3,944 1,194
Loans:
One- to four-family 544,025 532,450 455,438
Home equity lines of credit 42,642 42,913 47,807
Multi-family 587,180 562,948 430,871
Commercial real estate 1,791,468 1,776,601 1,411,410
Construction 567,352 502,753 413,660
Commercial and industrial 524,723 515,430 477,450
Consumer 9,710 9,712 9,832
Total loans 4,067,100 3,942,807 3,246,468
Allowance for loan losses (41,764) (40,149) (34,390)
Net deferred loan origination fees (4,593) (3,990) (4,342)
Loans, net 4,020,743 3,898,668 3,207,736
Bank-owned life insurance 41,033 40,745 39,859
Premises and equipment, net 41,099 41,427 40,733
Accrued interest receivable 10,070 10,381 8,831
Deferred tax asset, net 21,471 21,461 20,868
Goodwill 13,687 13,687 13,687
Other assets 3,914 3,105 4,614
Total assets $4,638,712 $4,436,002 $3,729,455
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non interest-bearing demand deposits $439,315 $431,222 $388,731
NOW deposits 748,465 630,413 360,237
Money market deposits 1,005,534 980,344 880,186
Regular savings and other deposits 323,136 305,632 297,806
Certificates of deposit 1,140,183 1,128,226 984,459
Total deposits 3,656,633 3,475,837 2,911,419
Short-term borrowings
Long-term debt 334,827 322,512 211,426
Accrued expenses and other liabilities 31,074 30,356 23,926
Total liabilities 4,022,534 3,828,705 3,146,771
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; 53,630,841, 53,596,105 and 53,895,870 shares
issued at March 31, 2017, December 31, 2016 and March 31,
2016, respectively 536 536 539
Additional paid-in capital 391,316 390,065 391,399
Retained earnings 241,472 234,290 212,158
Accumulated other comprehensive income (loss) 2,034 1,806 (1,350)
Unearned compensation - ESOP, 2,648,359, 2,678,800 and
2,770,123 shares at March 31, 2017, December 31, 2016 and
March 31, 2016, respectively (19,180) (19,400) (20,062)
Total stockholders' equity 616,178 607,297 582,684
Total liabilities and stockholders' equity $4,638,712 $4,436,002 $3,729,455


MERIDIAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)
Three Months Ended
March 31, 2017 December 31, 2016 March 31, 2016
(Dollars in thousands, except per share amounts)
Interest and dividend income:
Interest and fees on loans $40,489 $40,172 $33,097
Interest on debt securities:
Taxable 119 159 266
Tax-exempt 10 19 33
Dividends on equity securities 277 346 400
Interest on certificates of deposit 212 115 170
Other interest and dividend income 645 438 218
Total interest and dividend income 41,752 41,249 34,184
Interest expense:
Interest on deposits 7,419 6,962 5,228
Interest on short-term borrowings 6
Interest on long-term debt 980 868 571
Total interest expense 8,399 7,830 5,805
Net interest income 33,353 33,419 28,379
Provision for loan losses 1,619 1,304 1,066
Net interest income, after provision for loan losses 31,734 32,115 27,313
Non-interest income:
Customer service fees 2,052 2,231 1,947
Loan fees 68 282 312
Mortgage banking gains, net 90 125 70
Gain on sales of securities, net 1,574 2,627 59
Income from bank-owned life insurance 288 294 302
Other income 55 2
Total non-interest income 4,072 5,614 2,692
Non-interest expenses:
Salaries and employee benefits 13,675 12,167 12,513
Occupancy and equipment 3,023 2,881 2,484
Data processing 1,379 1,331 1,257
Marketing and advertising 854 973 713
Professional services 1,135 969 613
Foreclosed real estate
Deposit insurance 691 481 452
Other general and administrative 1,120 976 1,198
Total non-interest expenses 21,877 19,778 19,230
Income before income taxes 13,929 17,951 10,775
Provision for income taxes 4,685 6,642 3,298
Net income $9,244 $11,309 $7,477
Earnings per share:
Basic $0.18 $0.22 $0.14
Diluted $0.18 $0.22 $0.14
Weighted average shares:
Basic 50,949,634 50,940,037 51,569,683
Diluted 52,526,737 52,102,511 52,663,921


MERIDIAN BANCORP, INC. AND SUBSIDIARIES
NET INTEREST INCOME ANALYSIS
(Unaudited)
Three Months Ended
March 31, 2017December 31, 2016March 31, 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) $4,000,857 $41,690 4.23% $3,792,961 $41,394 4.34%$3,146,449 $34,104 4.36%
Securities and certificates of deposit 145,841 725 2.02 147,509 778 2.1 231,604 1,034 1.8
Other interest-earning assets (3) 243,478 645 1.07 244,241 438 0.71 123,476 218 0.71
Total interest-earning assets 4,390,176 43,060 3.98 4,184,711 42,610 4.05 3,501,529 35,356 4.06
Noninterest-earning assets 111,757 113,336 114,476
Total assets $4,501,933 $4,298,047 $3,616,005
Liabilities and stockholders' equity:
Interest-bearing liabilities:
NOW deposits $654,977 $1,219 0.75 $577,419 1,025 0.71 $338,517 $500 0.59
Money market deposits 1,008,392 2,230 0.9 907,157 1,955 0.86 873,774 1,745 0.8
Regular savings and other deposits 307,940 108 0.14 301,832 108 0.14 290,463 103 0.14
Certificates of deposit 1,134,329 3,862 1.38 1,139,816 3,874 1.35 936,674 2,880 1.24
Total interest-bearing deposits 3,105,638 7,419 0.97 2,926,224 6,962 0.95 2,439,428 5,228 0.86
Borrowings 330,604 980 1.2 325,421 868 1.06 199,779 577 1.16
Total interest-bearing liabilities 3,436,242 8,399 0.99 3,251,645 7,830 0.96 2,639,207 5,805 0.88
Noninterest-bearing demand deposits 425,353 416,727 368,038
Other noninterest-bearing liabilities 27,312 26,977 23,312
Total liabilities 3,888,907 3,695,349 3,030,557
Total stockholders' equity 613,026 602,698 585,448
Total liabilities and stockholders'
equity $4,501,933 $4,298,047 $3,616,005
Net interest-earning assets $953,934 $933,066 $862,322
Fully tax-equivalent net interest income 34,661 34,780 29,551
Less: tax-equivalent adjustments (1,308) (1,361) (1,172)
Net interest income $33,353 $33,419 $28,379
Interest rate spread (1)(4) 2.99% 3.09% 3.18%
Net interest margin (1)(5) 3.2% 3.31% 3.39%
Average interest-earning assets to
average
interest-bearing liabilities 127.76% 128.7 132.67%
Supplemental Information:
Total deposits, including noninterest-
bearing
demand deposits $3,530,991 $7,419 0.85% $3,342,951 $6,962 0.83%$2,807,466 $5,228 0.75%
Total deposits and borrowings, including
noninterest-bearing demand deposits $3,861,595 $8,399 0.88% $3,668,372 $7,830 0.85%$3,007,245 $5,805 0.78%
(1) Income on debt securities, equity securities and revenue bonds included in commercial real estate loans, as well as resulting yields, interest rate spread and net interest
margin, are presented on a tax-equivalent basis. The tax-equivalent adjustments are deducted from tax-equivalent net interest income to agree to amounts reported in the
consolidated statements of net income. For the three months ended March 31, 2017, December 31, 2016 and March 31, 2016, yields on loans before tax-equivalent
adjustments were 4.10%, 4.21% and 4.23%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 1.71%, 1.72% and 1.51%,
respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 3.86%, 3.92% and 3.93%, respectively. Interest rate spread before tax-
equivalent adjustments for the three months ended March 31, 2017, December 31, 2016 and March 31, 2016 was 2.87%, 2.96% and 3.05%, respectively, while net interest
margin before tax-equivalent adjustments for the three months ended March 31, 2017, December 31, 2016 and March 31, 2016 was 3.08%, 3.18% and 3.26%, 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
March 31, 2017 December 31, 2016 March 31, 2016
Key Performance Ratios
Return on average assets (1) 0.82% 1.05% 0.83%
Return on average equity (1) 6.03 7.51 5.11
Interest rate spread (1) (2) 2.99 3.09 3.18
Net interest margin (1) (3) 3.2 3.31 3.39
Non-interest expense to average assets (1) 1.94 1.84 2.13
Efficiency ratio (4) 61.02 54.33 62.01
March 31, 2017
December 31, 2016 March 31, 2016
(Dollars in thousands)
Asset Quality
Non-accrual loans:
One- to four-family $8,761 $8,487 $9,662
Home equity lines of credit 672 674 1,983
Commercial real estate 2,792 2,807 3,686
Construction 815 815 14,612
Commercial and industrial 646 653 745
Consumer
Total non-accrual loans 13,686 13,436 30,688
Foreclosed assets 638
Total non-performing assets $13,686 $13,436 $31,326
Allowance for loan losses/total loans 1.03% 1.02% 1.06%
Allowance for loan losses/non-accrual loans 305.16 298.82 112.06
Non-accrual loans/total loans 0.34 0.34 0.95
Non-accrual loans/total assets 0.3 0.3 0.82
Non-performing assets/total assets 0.3 0.3 0.84
Capital and Share Related
Stockholders' equity to total assets 13.28% 13.69% 15.62%
Book value per share $11.49 $11.33 $10.81
Tangible book value per share $11.23 $11.08 $10.56
Market value per share $18.3 $18.9 $13.92
Shares outstanding 53,630,841 53,596,105 53,895,870
(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

Source:Meridian Bancorp, Inc.