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8-K - FORM 8-K - MERIDIAN INTERSTATE BANCORP INC | c23662e8vk.htm |
Exhibit 99
Meridian Interstate Bancorp, Inc. Reports Net Income for the Third Quarter
and Nine Months Ended September 30, 2011
Contact: Richard J. Gavegnano, Chairman and Chief Executive Officer
(978) 977-2211
(978) 977-2211
Boston, Massachusetts (October 25, 2011): Meridian Interstate Bancorp, Inc. (the Company or
Meridian) (NASDAQ: EBSB), the holding company for East Boston Savings Bank (the Bank), which
also operates under the name Mt. Washington Bank, a Division of East Boston Savings Bank (Mt.
Washington), announced net income of $2.6 million, or $0.12 per diluted share, for the quarter
ended September 30, 2011 compared to $3.0 million, or $0.13 per diluted share, for the quarter
ended September 30, 2010. For the nine months ended September 30, 2011, net income was $10.0
million, or $0.46 per diluted share compared to $9.1 million, or $0.41 per diluted share, for the
nine months ended September 30, 2010. The Companys return on average assets was 0.54% for the
quarter ended September 30, 2011 compared to 0.68% for the quarter ended September 30, 2010. For
the nine months ended September 30, 2011, the Companys return on average assets was 0.70% compared
to 0.71% for the nine months ended September 30, 2010. The Companys return on average equity was
4.78% for the quarter ended September 30, 2011 compared to 5.64% for the quarter ended September
30, 2010. For the nine months ended September 30, 2011, the Companys return on average equity was
6.08% compared to 5.83% for the nine months ended September 30, 2010.
Richard J. Gavegnano, Chairman and Chief Executive Officer, said, I am pleased to report net
income of $2.6 million and earnings per share of $0.12 for the third quarter of 2011. In the midst
of an extended period of slow growth and low interest rates, we are continuing to position the
Company to take advantage of increasing demand for banks that focus on the needs of consumers and
businesses in their communities. Along with the establishment in the third quarter of our new
commercial and industrial lending division, we have also expanded our residential and commercial
real estate lending team with seven seasoned lenders. And following the opening of an East Boston
Savings Bank branch and two Mt. Washington branches earlier in the year, we opened a new East
Boston Savings Bank branch this month in Danvers with plans to open another new East Boston Savings
Bank branch in Cambridge by year end. We expect these actions to significantly increase our market
share and earnings potential.
Net interest income decreased $1.8 million, or 11.0%, to $14.2 million for the quarter ended
September 30, 2011 from $16.0 million for the quarter ended September 30, 2010. The net interest
rate spread and net interest margin were 2.98% and 3.15%, respectively, for the quarter ended
September 30, 2011 compared to 3.75% and 3.93%, respectively, for the quarter ended September 30,
2010. For the nine months ended September 30, 2011, net interest income decreased $3.3 million, or
7.2%, to $42.7 million from $46.0 million for the nine months ended September 30, 2010. The net
interest rate spread and net interest margin were 3.08% and 3.25%, respectively, for the nine
months ended September 30, 2011 compared to 3.72% and 3.90%, respectively, for the nine months
ended September 30, 2010. The decreases in net interest income were due primarily to deposit growth
that was in excess of loan growth along with declines in yields on loans and securities for the
third quarter and nine months ended September 30, 2011 compared to the same periods in 2010.
The Companys yield on loans declined 51 basis points to 5.27%, which was partially offset by an
increase in the average balance of the loan portfolio of $37.8 million, or 3.2%, to $1.239 billion
for the quarter ended September 30, 2011 compared to the quarter ended September 30, 2010. The
average balance of the Companys interest-bearing deposits increased $168.3 million, or 13.4%, to
$1.427 billion, which was partially offset by a decline in the cost of interest-bearing deposits of
14 basis points to 1.23%. The Companys yield on interest-earning assets declined 92 basis points
to 4.30% for the quarter ended September 30, 2011 compared to 5.22% for the quarter ended September
30, 2010, while the cost of interest-bearing liabilities declined 15 basis points to 1.32% for the
quarter ended September 30, 2011 compared to 1.47% for the quarter ended September 30, 2010.
The Companys provision for loan losses was $1.6 million for the quarter ended September 30, 2011
compared to $77,000 for the quarter ended September 30, 2010. For the nine months ended September
30, 2011, the provision for loan losses was $2.4 million compared to $2.2 million for the nine
months ended September 30, 2010. These changes were based primarily on managements assessment of
loan portfolio growth and composition changes, an ongoing evaluation of credit quality and current
economic conditions. In addition, the increase in the provision for loan losses for the quarter
ended September 30, 2011 reflects increases in net charge-offs and specific reserves recorded for
impaired loans. The allowance for loan losses was $12.1 million or 0.97% of total loans outstanding
at September 30, 2011, compared to $10.2 million or 0.86% of total loans outstanding at December
31, 2010.
Non-performing loans increased to $49.1 million, or 3.94% of total loans outstanding at September
30, 2011, from $43.1 million, or 3.64% of total loans outstanding at December 31, 2010.
Non-performing assets increased to $52.8 million, or 2.71% of total assets, at September 30, 2011,
from $47.2 million, or 2.57% of total assets, at December 31, 2010. Non-performing assets at
September 30, 2011 were comprised of $20.3 million of construction loans, $11.9 million of
commercial real estate loans, $13.4 million of one-to four-family mortgage loans, $528,000 of
multi-family mortgage loans, $2.0 million of home equity loans, $941,000 of commercial business
loans and foreclosed real estate of $3.7 million. Non-performing assets at September 30, 2011
included $18.2 million of assets acquired in the Mt. Washington Co-operative Bank merger, comprised
of $16.0 million of non-performing loans and $2.2 million of foreclosed real estate.
Non-interest income increased $286,000, or 8.6%, to $3.6 million for the quarter ended September
30, 2011 from $3.3 million for the quarter ended September 30, 2010, primarily due to increases of
$564,000 in gain on sales of loans, net, and $169,000 in equity income from the Companys Hampshire
First Bank affiliate, partially offset by decreases of $154,000 in customer service fees and
$318,000 in gain on sales of securities, net. For the nine months ended September 30, 2011,
non-interest income increased $4.7 million, or 57.8%, to $12.7 million from $8.0 million for the
nine months ended September 30, 2010, primarily due to increases of $3.5 million in gain on sales
of securities, net, $405,000 in gain on sales of loans, net, and $811,000 in equity income from
Hampshire First Bank.
Non-interest expense decreased $2.4 million, or 16.3%, to $12.3 million for the quarter ended
September 30, 2011 from $14.6 million for the quarter ended September 30, 2010, primarily due to a
$3.1 million charge during the quarter ended September 30, 2010 related to termination of the
contract with Mt. Washington Co-operative Banks data processing services provider and a $367,000
decrease in deposit insurance, partially offset by an increase of $699,000 in salaries and employee
benefits. For the nine months ended September 30, 2011, non-interest expense decreased $366,000,
or 1.0%, to $37.4 million from $37.7 million for the nine months ended September 30, 2010,
primarily due to the $3.1 million charge during the quarter ended September 30, 2010 related to
termination of the contract with Mt. Washington Co-operative Banks data processing services
provider, partially offset by increases of $2.2 million in salaries and employee benefits and
$686,000 in occupancy and equipment expenses. The increases in salaries and employee benefits and
occupancy and equipment expenses were associated with the new branches opened this year and costs
associated with the expansion of residential and commercial lending capacity. The Companys
efficiency ratio was 70.58% for the quarter ended September 30, 2011 compared to 62.45% for the
quarter ended September 30, 2010, excluding the charge to terminate Mt. Washington Co-operative
Banks data processing contract. For the nine months ended September 30, 2011, the efficiency
ratio was 73.03% compared to 65.02% for the nine months ended September 30, 2010, excluding the
charge to terminate Mt. Washington Co-operative Banks data processing contract.
Mr. Gavegnano noted, The increases in our staffing and occupancy costs and the efficiency ratio
this year reflect our investment in expansion of lending capacity, additional sources of deposit
funding and increasing market share. We are encouraged by our progress so far and believe these
efforts will greatly enhance franchise value and stockholder value.
The Company recorded a provision for income taxes of $1.4 million for the quarter ended September
30, 2011, reflecting an effective tax rate of 34.5%, compared to $1.6 million, or 35.3%, for the
quarter ended September 30, 2010. For the nine months ended September 30, 2011, the provision for
income taxes was $5.7 million, reflecting an effective tax rate of 36.1%, compared to $5.0 million,
or 35.7%, for the nine months ended September 30, 2010. The changes in the income tax provision
were primarily due to the changes in pre-tax income.
2
Total assets increased $108.8 million, or 5.9%, to $1.945 billion at September 30, 2011 from $1.836
billion at December 31, 2010. Cash and cash equivalents increased $73.7 million, or 47.4%, to
$229.2 million at September 30, 2011 from $155.5 million at December 31, 2010. Securities
available for sale decreased $21.5 million, or 6.0%, to $339.1 million at September 30, 2011 from
$360.6 million at December 31, 2010. Net loans increased $61.0 million, or 5.2%, to $1.235 billion
at September 30, 2011 from $1.174 billion at December 31, 2010.
Total deposits increased $111.0 million, or 7.6%, to $1.566 billion at September 30, 2011 from
$1.455 billion at December 31, 2010, reflecting net growth of $128.2 million in core deposits. The
net deposit growth also reflects $37.4 million of new deposits in the three branches opened during
2011. Total borrowings decreased $15.5 million, or 10.4%, to $133.2 million at September 30, 2011
from $148.7 million at December 31, 2010, reflecting $21.0 million of reductions in Federal Home
Loan Bank advances partially offset by a $5.5 million increase in short-term borrowings.
Mr. Gavegnano added, We are gratified that our core deposit growth initiatives this year have
resulted in an increase in these non-term balances to $886.1 million, representing 56.6% of total
deposits at September 30, 2011.
Total stockholders equity increased $1.8 million, or 0.8%, to $217.4 million at September 30,
2011, from $215.6 million at December 31, 2010. The increase for the nine months ended September
30, 2011 was due primarily to $10.0 million in net income, partially offset by a $4.8 million
increase in treasury stock resulting from the Companys repurchase of 360,801 shares and a $4.6
million decrease in accumulated other comprehensive income reflecting a decrease in the fair value
of available for sale securities, net of tax. Stockholders equity to assets was 11.18% at
September 30, 2011, compared to 11.74% at December 31, 2010. Book value per share increased to
$9.82 at September 30, 2011 from $9.59 at December 31, 2010. Tangible book value per share
increased to $9.21 at September 30, 2011 from $8.98 at December 31, 2010. Market price per share
decreased $0.88, or 7.5%, to $10.91 at September 30, 2011 from $11.79 at December 31, 2010. At
September 30, 2011, the Company and the Bank continued to exceed all regulatory capital
requirements.
On August 9, 2011, the Company announced that it had completed its third stock repurchase program,
which consisted of 472,428 shares at an average price of $12.53 and adopted a fourth repurchase
program for up to 904,224 shares of its common stock. As of September 30, 2011, the Company had
repurchased 77,200 shares of its stock at an average price of $12.54 per share, or 8.5% of the
shares authorized for repurchase under the fourth repurchase program.
Mr. Gavegnano said, With completion of the third stock repurchase program and commencement of the
fourth program, we have repurchased a total of 1,481,128 shares since late 2008. Along with
additional stock repurchases, we continue to consider various other opportunities to enhance
stockholder value.
Meridian Interstate 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 23 full
service locations in the greater Boston metropolitan area including eight full service locations in
its Mt. Washington Bank Division. We offer a variety of deposit and loan products to individuals
and businesses located in our primary market, which consists of Essex, Middlesex 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
Interstate 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 Companys filings with the Securities and
Exchange Commission. Should one or more of these risks materialize or should underlying beliefs or
assumptions prove incorrect, Meridian Interstate 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.
3
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
Consolidated Balance Sheets
(Unaudited)
September 30, | December 31, | |||||||
(Dollars in thousands) | 2011 | 2010 | ||||||
ASSETS |
||||||||
Cash and due from banks |
$ | 229,137 | $ | 155,430 | ||||
Federal funds sold |
63 | 63 | ||||||
Total cash and cash equivalents |
229,200 | 155,493 | ||||||
Certificates of deposit affiliate bank |
2,500 | | ||||||
Securities available for sale, at fair value |
339,135 | 360,602 | ||||||
Federal Home Loan Bank stock, at cost |
12,538 | 12,538 | ||||||
Loans held for sale |
5,891 | 13,013 | ||||||
Loans |
1,246,703 | 1,183,717 | ||||||
Less allowance for loan losses |
(12,130 | ) | (10,155 | ) | ||||
Loans, net |
1,234,573 | 1,173,562 | ||||||
Bank-owned life insurance |
34,748 | 33,829 | ||||||
Foreclosed real estate, net |
3,684 | 4,080 | ||||||
Investment in affiliate bank |
12,629 | 11,497 | ||||||
Premises and equipment, net |
35,800 | 34,425 | ||||||
Accrued interest receivable |
6,799 | 7,543 | ||||||
Prepaid deposit insurance |
1,653 | 3,026 | ||||||
Deferred tax asset, net |
8,360 | 5,441 | ||||||
Goodwill |
13,687 | 13,687 | ||||||
Other assets |
3,434 | 7,094 | ||||||
Total assets |
$ | 1,944,631 | $ | 1,835,830 | ||||
LIABILITIES AND STOCKHOLDERS EQUITY |
||||||||
Deposits: |
||||||||
Non interest-bearing |
$ | 134,537 | $ | 111,423 | ||||
Interest-bearing |
1,431,636 | 1,343,792 | ||||||
Total deposits |
1,566,173 | 1,455,215 | ||||||
Short-term borrowings affiliate bank |
7,468 | 1,949 | ||||||
Short-term borrowings other |
10,052 | 10,037 | ||||||
Long-term debt |
115,709 | 136,697 | ||||||
Accrued expenses and other liabilities |
27,834 | 16,321 | ||||||
Total liabilities |
1,727,236 | 1,620,219 | ||||||
Stockholders equity: |
||||||||
Common stock, no par value, 50,000,000 shares
authorized; 23,000,000 shares issued |
| | ||||||
Additional paid-in capital |
97,499 | 97,005 | ||||||
Retained earnings |
132,569 | 122,563 | ||||||
Accumulated other comprehensive income |
3,414 | 8,038 | ||||||
Treasury stock, at cost, 553,019 and 192,218 shares
at September 30, 2011 and December 31, 2010, respectively |
(6,920 | ) | (2,121 | ) | ||||
Unearned compensation ESOP, 672,750 and 703,800 shares
at September 30, 2011 and December 31, 2010, respectively |
(6,727 | ) | (7,038 | ) | ||||
Unearned compensation restricted shares, 318,295 and 326,905
at September 30, 2011 and December 31, 2010, respectively |
(2,440 | ) | (2,836 | ) | ||||
Total stockholders equity |
217,395 | 215,611 | ||||||
Total liabilities and stockholders equity |
$ | 1,944,631 | $ | 1,835,830 | ||||
4
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
Consolidated Statements of Income
(Unaudited)
Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
(Dollars in thousands, except per share amounts) | 2011 | 2010 | 2011 | 2010 | ||||||||||||
Interest and dividend income: |
||||||||||||||||
Interest and fees on loans |
$ | 16,458 | $ | 17,491 | $ | 49,068 | $ | 50,530 | ||||||||
Interest on debt securities |
2,610 | 3,461 | 8,611 | 10,291 | ||||||||||||
Dividends on equity securities |
257 | 232 | 792 | 665 | ||||||||||||
Interest on certificates of deposit |
8 | 8 | 25 | 42 | ||||||||||||
Interest on other interest-earning assets |
104 | 36 | 306 | 84 | ||||||||||||
Total interest and dividend income |
19,437 | 21,228 | 58,802 | 61,612 | ||||||||||||
Interest expense: |
||||||||||||||||
Interest on deposits |
4,426 | 4,355 | 13,615 | 12,864 | ||||||||||||
Interest on short-term borrowings |
9 | 11 | 32 | 55 | ||||||||||||
Interest on long-term debt |
769 | 868 | 2,426 | 2,649 | ||||||||||||
Total interest expense |
5,204 | 5,234 | 16,073 | 15,568 | ||||||||||||
Net interest income |
14,233 | 15,994 | 42,729 | 46,044 | ||||||||||||
Provision for loan losses |
1,563 | 77 | 2,391 | 2,245 | ||||||||||||
Net interest income, after provision
for loan losses |
12,670 | 15,917 | 40,338 | 43,799 | ||||||||||||
Non-interest income: |
||||||||||||||||
Customer service fees |
1,401 | 1,555 | 4,196 | 4,459 | ||||||||||||
Loan fees |
245 | 238 | 708 | 536 | ||||||||||||
Gain on sales of loans, net |
873 | 309 | 1,478 | 1,073 | ||||||||||||
Gain on sales of securities, net |
467 | 785 | 4,256 | 785 | ||||||||||||
Income from bank-owned life insurance |
304 | 286 | 919 | 865 | ||||||||||||
Equity income on investment in affiliate bank |
314 | 145 | 1,132 | 321 | ||||||||||||
Total non-interest income |
3,604 | 3,318 | 12,689 | 8,039 | ||||||||||||
Non-interest expenses: |
||||||||||||||||
Salaries and employee benefits |
7,666 | 6,967 | 21,825 | 19,580 | ||||||||||||
Occupancy and equipment |
1,765 | 1,670 | 5,850 | 5,164 | ||||||||||||
Data processing |
729 | 779 | 2,189 | 2,282 | ||||||||||||
Data processing contract termination cost |
| 3,075 | | 3,075 | ||||||||||||
Marketing and advertising |
551 | 373 | 1,632 | 1,419 | ||||||||||||
Professional services |
537 | 465 | 2,002 | 1,940 | ||||||||||||
Foreclosed real estate |
30 | 28 | 130 | 304 | ||||||||||||
Deposit insurance |
211 | 578 | 1,469 | 1,670 | ||||||||||||
Other general and administrative |
771 | 710 | 2,268 | 2,297 | ||||||||||||
Total non-interest expenses |
12,260 | 14,645 | 37,365 | 37,731 | ||||||||||||
Income before income taxes |
4,014 | 4,590 | 15,662 | 14,107 | ||||||||||||
Provision for income taxes |
1,384 | 1,619 | 5,656 | 5,034 | ||||||||||||
Net income |
$ | 2,630 | $ | 2,971 | $ | 10,006 | $ | 9,073 | ||||||||
Earnings per share: |
||||||||||||||||
Basic |
$ | 0.12 | $ | 0.13 | $ | 0.46 | $ | 0.41 | ||||||||
Diluted |
$ | 0.12 | $ | 0.13 | $ | 0.46 | $ | 0.41 | ||||||||
Weighted average shares: |
||||||||||||||||
Basic |
21,721,219 | 22,033,643 | 21,851,237 | 22,096,747 | ||||||||||||
Diluted |
21,843,081 | 22,037,561 | 21,976,728 | 22,103,406 |
5
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Net Interest Income Analysis
(Unaudited)
Net Interest Income Analysis
(Unaudited)
For the Three Months Ended September 30, | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | |||||||||||||||||||||
(Dollars in thousands) | Balance | Interest | Cost (4) | Balance | Interest | Cost (4) | ||||||||||||||||||
Assets: |
||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
Loans (1) |
$ | 1,238,787 | $ | 16,458 | 5.27 | % | $ | 1,200,946 | $ | 17,491 | 5.78 | % | ||||||||||||
Securities and certificates of deposits |
351,591 | 2,875 | 3.24 | 349,691 | 3,701 | 4.20 | ||||||||||||||||||
Other interest-earning assets |
201,536 | 104 | 0.20 | 62,513 | 36 | 0.23 | ||||||||||||||||||
Total interest-earning assets |
1,791,914 | 19,437 | 4.30 | 1,613,150 | 21,228 | 5.22 | ||||||||||||||||||
Noninterest-earning assets |
140,873 | 130,999 | ||||||||||||||||||||||
Total assets |
$ | 1,932,787 | $ | 1,744,149 | ||||||||||||||||||||
Liabilities and stockholders equity: |
||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
NOW deposits |
$ | 135,989 | 149 | 0.43 | $ | 116,282 | 129 | 0.44 | ||||||||||||||||
Money market deposits |
383,240 | 884 | 0.92 | 309,486 | 837 | 1.07 | ||||||||||||||||||
Regular and other deposits |
205,681 | 257 | 0.50 | 184,920 | 254 | 0.54 | ||||||||||||||||||
Certificates of deposit |
701,655 | 3,136 | 1.77 | 647,554 | 3,135 | 1.92 | ||||||||||||||||||
Total interest-bearing deposits |
1,426,565 | 4,426 | 1.23 | 1,258,242 | 4,355 | 1.37 | ||||||||||||||||||
Borrowings |
136,211 | 778 | 2.27 | 151,071 | 879 | 2.31 | ||||||||||||||||||
Total interest-bearing liabilities |
1,562,776 | 5,204 | 1.32 | 1,409,313 | 5,234 | 1.47 | ||||||||||||||||||
Noninterest-bearing demand deposits |
128,364 | 110,210 | ||||||||||||||||||||||
Other noninterest-bearing liabilities |
21,575 | 13,916 | ||||||||||||||||||||||
Total liabilities |
1,712,715 | 1,533,439 | ||||||||||||||||||||||
Total stockholders equity |
220,072 | 210,710 | ||||||||||||||||||||||
Total liabilities and stockholders equity |
$ | 1,932,787 | $ | 1,744,149 | ||||||||||||||||||||
Net interest-earning assets |
$ | 229,138 | $ | 203,837 | ||||||||||||||||||||
Net interest income |
$ | 14,233 | $ | 15,994 | ||||||||||||||||||||
Interest rate spread (2) |
2.98 | % | 3.75 | % | ||||||||||||||||||||
Net interest margin (3) |
3.15 | % | 3.93 | % | ||||||||||||||||||||
Average interest-earning assets to
average interest-bearing liabilities |
114.66 | % | 114.46 | % | ||||||||||||||||||||
Supplemental Information: |
||||||||||||||||||||||||
Total deposits, including noninterest-bearing
demand deposits |
$ | 1,554,929 | $ | 4,426 | 1.13 | % | $ | 1,368,452 | $ | 4,355 | 1.26 | % | ||||||||||||
Total deposits and borrowings, including
noninterest-bearing demand deposits |
$ | 1,691,140 | $ | 5,204 | 1.22 | % | $ | 1,519,523 | $ | 5,234 | 1.37 | % |
(1) | Loans on non-accrual status are included in average balances. | |
(2) | Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. | |
(3) | Net interest margin represents net interest income divided by average interest-earning assets. | |
(4) | Annualized. |
6
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Net Interest Income Analysis
(Unaudited)
Net Interest Income Analysis
(Unaudited)
For the Nine Months Ended September 30, | ||||||||||||||||||||||||
2011 | 2010 | |||||||||||||||||||||||
Average | Yield/ | Average | Yield/ | |||||||||||||||||||||
(Dollars in thousands) | Balance | Interest | Cost (4) | Balance | Interest | Cost (4) | ||||||||||||||||||
Assets: |
||||||||||||||||||||||||
Interest-earning assets: |
||||||||||||||||||||||||
Loans (1) |
$ | 1,208,880 | $ | 49,068 | 5.43 | % | $ | 1,175,322 | $ | 50,530 | 5.75 | % | ||||||||||||
Securities and certificates of deposits |
372,858 | 9,428 | 3.38 | 347,711 | 10,998 | 4.23 | ||||||||||||||||||
Other interest-earning assets |
178,020 | 306 | 0.23 | 55,549 | 84 | 0.20 | ||||||||||||||||||
Total interest-earning assets |
1,759,758 | 58,802 | 4.47 | 1,578,582 | 61,612 | 5.22 | ||||||||||||||||||
Noninterest-earning assets |
139,008 | 134,497 | ||||||||||||||||||||||
Total assets |
$ | 1,898,766 | $ | 1,713,079 | ||||||||||||||||||||
Liabilities and stockholders equity: |
||||||||||||||||||||||||
Interest-bearing liabilities: |
||||||||||||||||||||||||
NOW deposits |
$ | 131,510 | 438 | 0.45 | $ | 112,462 | 394 | 0.47 | ||||||||||||||||
Money market deposits |
361,188 | 2,623 | 0.97 | 305,669 | 2,617 | 1.14 | ||||||||||||||||||
Regular and other deposits |
199,331 | 794 | 0.53 | 183,406 | 756 | 0.55 | ||||||||||||||||||
Certificates of deposit |
702,357 | 9,760 | 1.86 | 631,157 | 9,097 | 1.93 | ||||||||||||||||||
Total interest-bearing deposits |
1,394,386 | 13,615 | 1.31 | 1,232,694 | 12,864 | 1.40 | ||||||||||||||||||
Borrowings |
146,866 | 2,458 | 2.24 | 154,384 | 2,704 | 2.34 | ||||||||||||||||||
Total interest-bearing liabilities |
1,541,252 | 16,073 | 1.39 | 1,387,078 | 15,568 | 1.50 | ||||||||||||||||||
Noninterest-bearing demand deposits |
120,362 | 102,880 | ||||||||||||||||||||||
Other noninterest-bearing liabilities |
17,598 | 15,665 | ||||||||||||||||||||||
Total liabilities |
1,679,212 | 1,505,623 | ||||||||||||||||||||||
Total stockholders equity |
219,554 | 207,456 | ||||||||||||||||||||||
Total liabilities and stockholders equity |
$ | 1,898,766 | $ | 1,713,079 | ||||||||||||||||||||
Net interest-earning assets |
$ | 218,506 | $ | 191,504 | ||||||||||||||||||||
Net interest income |
$ | 42,729 | $ | 46,044 | ||||||||||||||||||||
Interest rate spread (2) |
3.08 | % | 3.72 | % | ||||||||||||||||||||
Net interest margin (3) |
3.25 | % | 3.90 | % | ||||||||||||||||||||
Average interest-earning assets to
average interest-bearing liabilities |
114.18 | % | 113.81 | % | ||||||||||||||||||||
Supplemental Information: |
||||||||||||||||||||||||
Total deposits, including noninterest-bearing
demand deposits |
$ | 1,514,748 | $ | 13,615 | 1.20 | % | $ | 1,335,574 | $ | 12,864 | 1.29 | % | ||||||||||||
Total deposits and borrowings, including
noninterest-bearing demand deposits |
$ | 1,661,614 | $ | 16,073 | 1.29 | % | $ | 1,489,958 | $ | 15,568 | 1.40 | % |
(1) | Loans on non-accrual status are included in average balances. | |
(2) | Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. | |
(3) | Net interest margin represents net interest income divided by average interest-earning assets. | |
(4) | Annualized. |
7
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights
(Unaudited)
Selected Financial Highlights
(Unaudited)
At or For the Three Months Ended | At or For the Nine Months Ended | |||||||||||||||
September 30, | September 30, | |||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||
Key Performance Ratios |
||||||||||||||||
Return on average assets (1) |
0.54 | % | 0.68 | % | 0.70 | % | 0.71 | % | ||||||||
Return on average equity (1) |
4.78 | 5.64 | 6.08 | 5.83 | ||||||||||||
Stockholders equity to total assets |
11.18 | 11.82 | 11.18 | 11.82 | ||||||||||||
Interest rate spread (1) (2) |
2.98 | 3.75 | 3.08 | 3.72 | ||||||||||||
Net interest margin (1) (3) |
3.15 | 3.93 | 3.25 | 3.90 | ||||||||||||
Non-interest expense to average assets (1) |
2.54 | 3.36 | 2.62 | 2.94 | ||||||||||||
Efficiency ratio (4) |
70.58 | 62.45 | 73.03 | 65.02 |
September 30, | December 31, | September 30, | ||||||||||
2011 | 2010 | 2010 | ||||||||||
Asset Quality Ratios |
||||||||||||
Allowance for loan losses/total loans |
0.97 | % | 0.86 | % | 0.95 | % | ||||||
Allowance for loan losses/non-performing loans |
24.72 | 23.54 | 30.77 | |||||||||
Non-performing loans/total loans |
3.94 | 3.64 | 3.10 | |||||||||
Non-performing loans/total assets |
2.52 | 2.35 | 2.08 | |||||||||
Non-performing assets/total assets |
2.71 | 2.57 | 2.26 | |||||||||
Share Related |
||||||||||||
Book value per share |
$ | 9.82 | $ | 9.59 | $ | 9.45 | ||||||
Tangible book value per share |
$ | 9.21 | $ | 8.98 | $ | 8.95 | ||||||
Market value per share |
$ | 10.91 | $ | 11.79 | $ | 10.54 | ||||||
Shares outstanding |
22,128,686 | 22,480,877 | 22,461,927 |
(1) | Annualized. | |
(2) | Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. | |
(3) | Net interest margin represents net interest income divided by average interest-earning assets. | |
(4) | The efficiency ratio represents non-interest expense excluding data processing contract
termination costs divided by the sum of net interest income and non-interest income excluding gains or losses on the sale of securities. |
8