Attached files
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| 8-K - FORM 8-K - MERIDIAN INTERSTATE BANCORP INC | d384112d8k.htm |
Exhibit 99
Meridian Interstate Bancorp, Inc. Reports Net Income for the Second Quarter and Six Months Ended June 30, 2012
Contact: Richard J. Gavegnano, Chairman and Chief Executive Officer
(978) 977-2211
Boston, Massachusetts (July 24, 2012): 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 $5.4 million, or $0.25 per diluted share, for the quarter ended June 30, 2012 compared to $4.2 million, or $0.19 per diluted share, for the quarter ended June 30, 2011. For the six months ended June 30, 2012, net income was $7.6 million, or $0.35 per diluted share compared to $7.4 million, or $0.33 per diluted share, for the six months ended June 30, 2011. The Company’s return on average assets was 1.07% for the quarter ended June 30, 2012 compared to 0.87% for the quarter ended June 30, 2011. For the six months ended June 30, 2012, the Company’s return on average assets was 0.75% compared to 0.78% for the six months ended June 30, 2011. The Company’s return on average equity was 9.65% for the quarter ended June 30, 2012 compared to 7.56% for the quarter ended June 30, 2011. For the six months ended June 30, 2012, the Company’s return on average equity was 6.74% compared to 6.73% for the six months ended June 30, 2011.
During the quarter ended June 30, 2012, the Company recognized a pre-tax gain of $4.8 million on completion of the sale of its investment in Hampshire First Bank, which was 43% owned by the Company, to NBT Bancorp, Inc. (NASDAQ: NBTB) and NBT Bank, N.A. on June 8, 2012. On an after-tax basis, this gain increased net income by $2.9 million, or $0.13 per diluted share, for the quarter and six months ended June 30, 2012. The Company received $6.6 million of cash and 547,481 NBTB shares totaling $11.1 million as proceeds from the sale.
Richard J. Gavegnano, Chairman and Chief Executive Officer, said, “I am pleased to report net income of $5.4 million, or $0.25 per share, for the second quarter of 2012. Along with the substantial gain for our stockholders from the sale of our investment in Hampshire First Bank, the Bank had loan growth of 14.7% and core deposit growth of 12.6% during the first half of 2012, while non-performing assets declined 24.5%. This impressive growth results directly from our expansion of capacity over the past year in real estate and business lending, core deposit funding sources, and other business and support functions. The Bank plans to continue its expansion with the opening of an East Boston Savings Bank branch in the Town of Belmont and a Mt. Washington branch in Boston’s Allston neighborhood late this year or early next year.”
Net interest income increased $2.3 million, or 16.0%, to $16.4 million for the quarter ended June 30, 2012 from $14.1 million for the quarter ended June 30, 2011. The net interest rate spread and net interest margin were 3.27% and 3.44%, respectively, for the quarter ended June 30, 2012 compared to 3.01% and 3.19%, respectively, for the quarter ended June 30, 2011. For the six months ended June 30, 2012, net interest income increased $3.6 million, or 12.4%, to $32.2 million from $28.7 million for the six months ended June 30, 2011. The net interest rate spread and net interest margin were 3.26% and 3.43%, respectively, for the six months ended June 30, 2012 compared to 3.11% and 3.29%, respectively, for the six months ended June 30, 2011. The increases in net interest income were due primarily to strong loan growth along with declines in the cost of funds for the second quarter and six months ended June 30, 2012 compared to the same periods in 2011.
The average balance of the Company’s loan portfolio increased $304.6 million, or 25.5%, to $1.498 billion, which was partially offset by the decline in the yield on loans of 47 basis points to 4.99% for the quarter ended June 30, 2012 compared to the quarter ended June 30, 2011. The Company’s cost of total deposits declined 30 basis points to 0.92%, which was partially offset by the increase in the average balance of total deposits of $140.3 million, or 9.2%, to $1.662 billion for the quarter ended June 30, 2012 compared to the quarter ended June 30, 2011. The Company’s yield on interest-earning assets declined two basis points to 4.39% for the quarter ended June 30, 2012 compared to 4.41% for the quarter ended June 30, 2011, while the cost of funds declined 28 basis points to 1.02% for the quarter ended June 30, 2012 compared to 1.30% for the quarter ended June 30, 2011.
The Company’s provision for loan losses was $2.2 million for the quarter ended June 30, 2012 compared to $486,000 for the quarter ended June 30, 2011. For the six months ended June 30, 2012, the provision for loan losses was $3.4 million compared to $828,000 for the six months ended June 30, 2011. These changes were based primarily on management’s assessment of loan portfolio growth and composition changes, an ongoing evaluation of credit quality and current economic conditions. In addition, increases in the provision for loan losses were primarily due to growth in the commercial real estate, construction and commercial business loan categories for the second quarter and six months ended June 30, 2012 compared to the same periods in 2011. The allowance for loan losses was $16.3 million or 1.05% of total loans outstanding at June 30, 2012, compared to $13.1 million or 0.96% of total loans outstanding at December 31, 2011.
Non-performing loans declined $13.3 million, or 24.7%, to $40.4 million, or 2.60% of total loans outstanding, at June 30, 2012, from $53.7 million, or 3.97% of total loans outstanding, at December 31, 2011. Non-performing assets declined $14.1 million, or 24.5%, to $43.4 million, or 2.07% of total assets, at June 30, 2012, from $57.5 million, or 2.91% of total assets, at December 31, 2011. Non-performing assets at June 30, 2012 were comprised of $7.1 million of construction loans, $9.8 million of commercial real estate loans, $18.9 million of one- to four-family mortgage loans, $1.5 million of multi-family mortgage loans, $2.6 million of home equity loans, $542,000 of commercial business loans and foreclosed real estate of $3.0 million. Non-performing assets at June 30, 2012 included $21.3 million of assets acquired in the January 2010 Mt. Washington Co-operative Bank merger, comprised of $20.0 million of non-performing loans and $1.3 million of foreclosed real estate.
Non-interest income increased $3.3 million, or 60.8%, to $8.7 million for the quarter ended June 30, 2012 from $5.4 million for the quarter ended June 30, 2011, primarily due to the $4.8 million gain on sale of the Hampshire First Bank affiliate and an increase of $368,000 in mortgage banking gains, net, partially offset by decreases of $1.7 million in gain on sales of securities, net, and $266,000 in equity income from the Hampshire First Bank affiliate. For the six months ended June 30, 2012, non-interest income increased $3.6 million, or 40.8%, to $12.6 million from $8.9 million for the six months ended June 30, 2011, primarily due to the gain on sale of the Hampshire First Bank affiliate and an increase of $557,000 in mortgage banking gains, net, partially offset by decreases of $1.4 million in gain on sales of securities, net, and $508,000 in equity income from the Hampshire First Bank affiliate.
Non-interest expenses increased $2.3 million, or 18.5%, to $14.8 million for the quarter ended June 30, 2012 from $12.5 million for the quarter ended June 30, 2011, primarily due to increases of $1.6 million in salaries and employee benefits and $730,000 in other non-interest expenses. For the six months ended June 30, 2012, non-interest expenses increased $4.9 million, or 19.7%, to $30.1 million from $25.1 million for the six months ended June 30, 2011, primarily due to increases of $3.8 million in salaries and employee benefits and $1.2 million in other non-interest expenses. The increases in non-interest expenses were primarily associated with the new branches opened and costs associated with the expansion of residential and commercial lending capacity in the past year. The Company’s efficiency ratio was 77.98% for the quarter ended June 30, 2012, excluding the gain on sale of the Hampshire First Bank affiliate, compared to 75.23% for the quarter ended June 30, 2011. For the six months ended June 30, 2012, the efficiency ratio was 79.88%, excluding the gain on sale of the Hampshire First Bank affiliate, compared to 74.31% for the six months ended June 30, 2011.
Mr. Gavegnano noted, “As expected, our investments for business expansion purposes contributed to increases in non-interest expenses and the efficiency ratios for the first half of 2012. Along with strong growth in loans, deposits and net interest income, these investments are also increasing our market share and franchise value.”
The Company recorded a provision for income taxes of $2.6 million for the quarter ended June 30, 2012, reflecting an effective tax rate of 32.6%, compared to $2.4 million, or 36.4%, for the quarter ended June 30, 2011. For the six months ended June 30, 2012, the provision for income taxes was $3.7 million, reflecting an effective tax rate of 32.7%, compared to $4.3 million, or 36.7%, for the six months ended June 30, 2011. The changes in the income tax provision were primarily due to the changes in pre-tax income.
2
Total assets increased $125.6 million, or 6.4%, to $2.100 billion at June 30, 2012 from $1.974 billion at December 31, 2011. Net loans increased $196.5 million, or 14.7%, to $1.538 billion at June 30, 2012 from $1.341 billion at December 31, 2011. The net increase in loans for the six months ended June 30, 2012 was primarily due to increases of $62.0 million in commercial real estate loans, $68.9 million in construction loans and $40.1 million in commercial business loans. Cash and cash equivalents decreased $32.1 million, or 20.5%, to $124.6 million at June 30, 2012 from $156.7 million at December 31, 2011. Securities available for sale decreased $36.5 million, or 10.9%, to $298.7 million at June 30, 2012 from $335.2 million at December 31, 2011.
Total deposits increased $96.1 million, or 6.0%, to $1.701 billion at June 30, 2012 from $1.604 billion at December 31, 2011, reflecting net growth in core deposits of $120.8 million, or 12.6%, to $1.079 billion. Total borrowings increased $23.2 million, or 17.6%, to $154.6 million at June 30, 2012 from $131.5 million at December 31, 2011, reflecting a $29.6 million increase in Federal Home Loan Bank advances partially offset by a $6.5 million decrease in short-term borrowings.
Mr. Gavegnano added, “We continue to emphasize acquisition and expansion of core deposit relationships, which resulted in growth in such non-term balances to nearly $1.1 billion, or 63.4% of total deposits, at June 30, 2012 along with the significant declines in our cost of funds.”
Total stockholders’ equity increased $8.8 million, or 4.0%, to $228.8 million at June 30, 2012, from $219.9 million at December 31, 2011. The increase for the six months ended June 30, 2012 was due primarily to $7.6 million in net income and a $1.5 million increase in accumulated other comprehensive income reflecting an increase in the fair value of available for sale securities, net of tax, partially offset by a $1.1 million increase in treasury stock resulting from the Company’s repurchase of 86,304 shares. Stockholders’ equity to assets was 10.89% at June 30, 2012, compared to 11.14% at December 31, 2011. Book value per share increased to $10.36 at June 30, 2012 from $9.93 at December 31, 2011. Tangible book value per share increased to $9.74 at June 30, 2012 from $9.31 at December 31, 2011. Market price per share increased $1.47, or 11.8%, to $13.92 at June 30, 2012 from $12.45 at December 31, 2011. At June 30, 2012, the Company and the Bank continued to exceed all regulatory capital requirements.
As of June 30, 2012, the Company had repurchased 195,366 shares of its stock at an average price of $12.83 per share, or 21.6% of the 904,224 shares authorized for repurchase under the Company’s fourth repurchase program as adopted during 2011. The Company has repurchased 1,599,294 shares at an average price of $10.45 per share since December 2008.
Mr. Gavegnano said, “We continually review opportunities to enhance stockholder value, including additional repurchases of our stock when appropriate.”
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 24 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 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 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)
| (Dollars in thousands) |
June 30, 2012 |
December 31, 2011 |
||||||
| ASSETS | ||||||||
| Cash and due from banks |
$ | 124,512 | $ | 156,622 | ||||
| Federal funds sold |
63 | 63 | ||||||
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| Total cash and cash equivalents |
124,575 | 156,685 | ||||||
| Certificates of deposit - affiliate bank |
— | 2,500 | ||||||
| Securities available for sale, at fair value |
298,710 | 335,230 | ||||||
| Federal Home Loan Bank stock, at cost |
12,064 | 12,538 | ||||||
| Loans held for sale |
11,502 | 4,192 | ||||||
| Loans |
1,554,077 | 1,354,354 | ||||||
| Less allowance for loan losses |
(16,271 | ) | (13,053 | ) | ||||
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| Loans, net |
1,537,806 | 1,341,301 | ||||||
| Bank-owned life insurance |
35,646 | 35,050 | ||||||
| Foreclosed real estate, net |
3,012 | 3,853 | ||||||
| Investment in affiliate bank |
— | 12,607 | ||||||
| Premises and equipment, net |
38,447 | 36,991 | ||||||
| Accrued interest receivable |
6,828 | 7,282 | ||||||
| Prepaid deposit insurance |
445 | 1,257 | ||||||
| Deferred tax asset, net |
6,519 | 7,434 | ||||||
| Goodwill |
13,687 | 13,687 | ||||||
| Other assets |
10,753 | 3,773 | ||||||
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| Total assets |
$ | 2,099,994 | $ | 1,974,380 | ||||
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| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Deposits: |
||||||||
| Non interest-bearing |
$ | 172,661 | $ | 145,274 | ||||
| Interest-bearing Interest-bearing |
1,527,976 | 1,459,214 | ||||||
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| Total deposits |
1,700,637 | 1,604,488 | ||||||
| Short-term borrowings - affiliate bank |
— | 6,471 | ||||||
| Short-term borrowings - other |
10,063 | 10,056 | ||||||
| Long-term debt |
144,551 | 114,923 | ||||||
| Accrued expenses and other liabilities |
15,976 | 18,498 | ||||||
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|
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| Total liabilities |
1,871,227 | 1,754,436 | ||||||
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| Stockholders’ equity: |
||||||||
| Common stock, no par value, 50,000,000 shares authorized; 23,000,000 shares issued |
— | — | ||||||
| Additional paid-in capital |
98,000 | 97,669 | ||||||
| Retained earnings |
142,136 | 134,533 | ||||||
| Accumulated other comprehensive income |
5,485 | 3,985 | ||||||
| Treasury stock, at cost, 668,084 and 584,881 shares at June 30, 2012 and December 31, 2011, respectively |
(8,419 | ) | (7,317 | ) | ||||
| Unearned compensation - ESOP, 641,700 and 662,400 shares at June 30, 2012 and December 31, 2011, respectively |
(6,417 | ) | (6,624 | ) | ||||
| Unearned compensation - restricted shares, 258,590 and 265,710 at June 30, 2012 and December 31, 2011, respectively |
(2,018 | ) | (2,302 | ) | ||||
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| Total stockholders’ equity |
228,767 | 219,944 | ||||||
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| Total liabilities and stockholders’ equity |
$ | 2,099,994 | $ | 1,974,380 | ||||
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4
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
| (Dollars in thousands, except per share amounts) |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Interest and dividend income: |
||||||||||||||||
| Interest and fees on loans |
$ | 18,565 | $ | 16,237 | $ | 36,553 | $ | 32,797 | ||||||||
| Interest on debt securities |
2,006 | 2,896 | 4,204 | 6,001 | ||||||||||||
| Dividends on equity securities |
292 | 255 | 653 | 499 | ||||||||||||
| Interest on certificates of deposit |
9 | 9 | 18 | 17 | ||||||||||||
| Interest on other interest-earning assets |
63 | 117 | 129 | 202 | ||||||||||||
| Other interest and dividend income |
33 | 27 | 48 | 36 | ||||||||||||
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| Total interest and dividend income |
20,968 | 19,541 | 41,605 | 39,552 | ||||||||||||
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| Interest expense: |
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| Interest on deposits |
3,817 | 4,616 | 7,820 | 9,189 | ||||||||||||
| Interest on short-term borrowings |
4 | 13 | 9 | 23 | ||||||||||||
| Interest on long-term debt |
752 | 778 | 1,530 | 1,657 | ||||||||||||
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| Total interest expense |
4,573 | 5,407 | 9,359 | 10,869 | ||||||||||||
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| Net interest income |
16,395 | 14,134 | 32,246 | 28,683 | ||||||||||||
| Provision for loan losses |
2,170 | 486 | 3,434 | 828 | ||||||||||||
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| Net interest income, after provision for loan losses |
14,225 | 13,648 | 28,812 | 27,855 | ||||||||||||
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| Non-interest income: |
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| Customer service fees |
1,505 | 1,497 | 3,084 | 2,795 | ||||||||||||
| Loan fees |
177 | 161 | 239 | 277 | ||||||||||||
| Mortgage banking gains, net |
537 | 169 | 1,162 | 605 | ||||||||||||
| Gain on sales of securities, net |
1,259 | 2,922 | 2,342 | 3,789 | ||||||||||||
| Income from bank-owned life insurance |
295 | 298 | 596 | 615 | ||||||||||||
| Equity income on investment in affiliate bank |
67 | 333 | 310 | 818 | ||||||||||||
| Gain on sale of investment in affiliate bank |
4,819 | — | 4,819 | — | ||||||||||||
| Other income |
1 | 4 | 1 | 15 | ||||||||||||
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| Total non-interest income |
8,660 | 5,384 | 12,553 | 8,914 | ||||||||||||
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| Non-interest expenses: |
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| Salaries and employee benefits |
8,642 | 7,058 | 17,943 | 14,159 | ||||||||||||
| Occupancy and equipment |
2,058 | 1,869 | 4,095 | 4,085 | ||||||||||||
| Data processing |
857 | 651 | 1,689 | 1,460 | ||||||||||||
| Marketing and advertising |
650 | 540 | 1,209 | 1,081 | ||||||||||||
| Professional services |
870 | 811 | 1,703 | 1,441 | ||||||||||||
| Foreclosed real estate |
103 | 63 | 286 | 100 | ||||||||||||
| Deposit insurance |
440 | 633 | 871 | 1,258 | ||||||||||||
| Other general and administrative |
1,179 | 860 | 2,269 | 1,538 | ||||||||||||
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| Total non-interest expenses |
14,799 | 12,485 | 30,065 | 25,122 | ||||||||||||
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| Income before income taxes |
8,086 | 6,547 | 11,300 | 11,647 | ||||||||||||
| Provision for income taxes |
2,639 | 2,382 | 3,697 | 4,271 | ||||||||||||
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| Net income |
$ | 5,447 | $ | 4,165 | $ | 7,603 | $ | 7,376 | ||||||||
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| Earnings per share: |
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| Basic |
$ | 0.25 | $ | 0.19 | $ | 0.35 | $ | 0.34 | ||||||||
| Diluted |
$ | 0.25 | $ | 0.19 | $ | 0.35 | $ | 0.33 | ||||||||
| Weighted average shares: |
||||||||||||||||
| Basic |
21,630,660 | 21,852,665 | 21,647,237 | 21,917,330 | ||||||||||||
| Diluted |
21,808,507 | 21,994,371 | 21,818,079 | 22,044,635 | ||||||||||||
5
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Net Interest Income Analysis
(Unaudited)
| For the Three Months Ended June 30, | ||||||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||||||
| (Dollars in thousands) |
Average Balance |
Interest | Yield/ Cost (5) |
Average Balance |
Interest | Yield/ Cost (5) |
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| Assets: |
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| Interest-earning assets: |
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| Loans (1) |
$ | 1,497,772 | $ | 18,565 | 4.99 | % | $ | 1,193,195 | $ | 16,237 | 5.46 | % | ||||||||||||
| Securities and certificates of deposits |
314,363 | 2,307 | 2.95 | 394,273 | 3,160 | 3.21 | ||||||||||||||||||
| Other interest-earning assets (2) |
106,994 | 96 | 0.36 | 190,240 | 144 | 0.30 | ||||||||||||||||||
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| Total interest-earning assets |
1,919,129 | 20,968 | 4.39 | 1,777,708 | 19,541 | 4.41 | ||||||||||||||||||
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| Noninterest-earning assets |
124,549 | 127,554 | ||||||||||||||||||||||
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| Total assets |
$ | 2,043,678 | $ | 1,905,262 | ||||||||||||||||||||
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| Liabilities and stockholders’ equity: |
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| Interest-bearing liabilities: |
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| NOW deposits |
$ | 145,731 | 162 | 0.45 | $ | 129,434 | 139 | 0.43 | ||||||||||||||||
| Money market deposits |
502,438 | 1,058 | 0.85 | 363,043 | 872 | 0.96 | ||||||||||||||||||
| Regular and other deposits |
230,532 | 221 | 0.39 | 203,621 | 279 | 0.55 | ||||||||||||||||||
| Certificates of deposit |
620,740 | 2,376 | 1.54 | 706,260 | 3,326 | 1.89 | ||||||||||||||||||
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| Total interest-bearing deposits |
1,499,441 | 3,817 | 1.02 | 1,402,358 | 4,616 | 1.32 | ||||||||||||||||||
| Borrowings |
140,651 | 756 | 2.16 | 148,454 | 791 | 2.14 | ||||||||||||||||||
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| Total interest-bearing liabilities |
1,640,092 | 4,573 | 1.12 | 1,550,812 | 5,407 | 1.40 | ||||||||||||||||||
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| Noninterest-bearing demand deposits |
162,520 | 119,346 | ||||||||||||||||||||||
| Other noninterest-bearing liabilities |
15,268 | 14,641 | ||||||||||||||||||||||
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| Total liabilities |
1,817,880 | 1,684,799 | ||||||||||||||||||||||
| Total stockholders’ equity |
225,798 | 220,463 | ||||||||||||||||||||||
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| Total liabilities and stockholders' equity |
$ | 2,043,678 | $ | 1,905,262 | ||||||||||||||||||||
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| Net interest-earning assets |
$ | 279,037 | $ | 226,896 | ||||||||||||||||||||
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| Net interest income |
$ | 16,395 | $ | 14,134 | ||||||||||||||||||||
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| Interest rate spread (3) |
3.27 | % | 3.01 | % | ||||||||||||||||||||
| Net interest margin (4) |
3.44 | % | 3.19 | % | ||||||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities |
117.01 | % | 114.63 | % | ||||||||||||||||||||
| Supplemental Information: |
||||||||||||||||||||||||
| Total deposits, including noninterest-bearing demand deposits |
$ | 1,661,961 | $ | 3,817 | 0.92 | % | $ | 1,521,704 | $ | 4,616 | 1.22 | % | ||||||||||||
| Total deposits and borrowings, including noninterest-bearing demand deposits |
$ | 1,802,612 | $ | 4,573 | 1.02 | % | $ | 1,670,158 | $ | 5,407 | 1.30 | % | ||||||||||||
| (1) | Loans on non-accrual status are included in average balances. |
| (2) | Includes Federal Home Loan Bank stock and associated dividends. |
| (3) | Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. |
| (4) | Net interest margin represents net interest income divided by average interest-earning assets. |
| (5) | Annualized. |
6
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Net Interest Income Analysis
(Unaudited)
| For the Six Months Ended June 30, | ||||||||||||||||||||||||
| 2012 | 2011 | |||||||||||||||||||||||
| Average Balance |
Interest | Yield/ Cost (5) |
Average Balance |
Interest | Yield/ Cost (5) |
|||||||||||||||||||
| (Dollars in thousands) | ||||||||||||||||||||||||
| Assets: |
||||||||||||||||||||||||
| Interest-earning assets: |
||||||||||||||||||||||||
| Loans (1) |
$ | 1,443,848 | $ | 36,553 | 5.09 | % | $ | 1,193,679 | $ | 32,797 | 5.54 | % | ||||||||||||
| Securities and certificates of deposits |
319,031 | 4,875 | 3.07 | 383,668 | 6,517 | 3.43 | ||||||||||||||||||
| Other interest-earning assets (2) |
127,976 | 177 | 0.28 | 178,605 | 238 | 0.27 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-earning assets |
1,890,855 | 41,605 | 4.42 | 1,755,952 | 39,552 | 4.54 | ||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Noninterest-earning assets |
128,023 | 125,521 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total assets |
$ | 2,018,878 | $ | 1,881,473 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Liabilities and stockholders’ equity: |
||||||||||||||||||||||||
| Interest-bearing liabilities: |
||||||||||||||||||||||||
| NOW deposits |
$ | 143,705 | 326 | 0.46 | $ | 129,233 | 288 | 0.45 | ||||||||||||||||
| Money market deposits |
481,276 | 2,018 | 0.84 | 349,978 | 1,739 | 1.00 | ||||||||||||||||||
| Regular and other deposits |
224,466 | 430 | 0.39 | 199,607 | 539 | 0.54 | ||||||||||||||||||
| Certificates of deposit |
632,120 | 5,046 | 1.61 | 702,714 | 6,623 | 1.90 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing deposits |
1,481,567 | 7,820 | 1.06 | 1,381,532 | 9,189 | 1.34 | ||||||||||||||||||
| Borrowings |
137,640 | 1,539 | 2.25 | 152,281 | 1,680 | 2.22 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||||||||||||
| Total interest-bearing liabilities |
1,619,207 | 9,359 | 1.16 | 1,533,813 | 10,869 | 1.43 | ||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Noninterest-bearing demand deposits |
158,064 | 116,294 | ||||||||||||||||||||||
| Other noninterest-bearing liabilities |
16,109 | 12,076 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities |
1,793,380 | 1,662,183 | ||||||||||||||||||||||
| Total stockholders’ equity |
225,498 | 219,290 | ||||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Total liabilities and stockholders’ equity |
$ | 2,018,878 | $ | 1,881,473 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest-earning assets |
$ | 271,648 | $ | 222,139 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Net interest income |
$ | 32,246 | $ | 28,683 | ||||||||||||||||||||
|
|
|
|
|
|||||||||||||||||||||
| Interest rate spread (3) |
3.26 | % | 3.11 | % | ||||||||||||||||||||
| Net interest margin (4) |
3.43 | % | 3.29 | % | ||||||||||||||||||||
| Average interest-earning assets to average interest-bearing liabilities |
116.78 | % | 114.48 | % | ||||||||||||||||||||
| Supplemental Information: |
||||||||||||||||||||||||
| Total deposits, including noninterest-bearing demand deposits |
$ | 1,639,631 | $ | 7,820 | 0.96 | % | $ | 1,497,826 | $ | 9,189 | 1.24 | % | ||||||||||||
| Total deposits and borrowings, including noninterest-bearing demand deposits |
$ | 1,777,271 | $ | 9,359 | 1.06 | % | $ | 1,650,107 | $ | 10,869 | 1.33 | % | ||||||||||||
| (1) | Loans on non-accrual status are included in average balances. |
| (2) | Includes Federal Home Loan Bank stock and associated dividends. |
| (3) | Interest rate spread represents the difference between the yield on interest-earning assets and the cost of interest-bearing liabilities. |
| (4) | Net interest margin represents net interest income divided by average interest-earning assets. |
| (5) | Annualized. |
7
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights
(Unaudited)
| At or For the Three Months Ended June 30, |
At or For the Six Months Ended June 30, |
|||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Key Performance Ratios |
||||||||||||||||
| Return on average assets (1) |
1.07 | % | 0.87 | % | 0.75 | % | 0.78 | % | ||||||||
| Return on average equity (1) |
9.65 | 7.56 | 6.74 | 6.73 | ||||||||||||
| Stockholders’ equity to total assets |
10.89 | 11.41 | 10.89 | 11.41 | ||||||||||||
| Interest rate spread (1) (2) |
3.27 | 3.01 | 3.26 | 3.11 | ||||||||||||
| Net interest margin (1) (3) |
3.44 | 3.19 | 3.43 | 3.29 | ||||||||||||
| Non-interest expense to average assets (1) |
2.90 | 2.62 | 2.98 | 2.67 | ||||||||||||
| Efficiency ratio (4) |
77.98 | 75.23 | 79.88 | 74.31 | ||||||||||||
| June 30, 2012 | December 31, 2011 | June 30, 2011 | ||||||||||
| Asset Quality Ratios |
||||||||||||
| Allowance for loan losses/total loans |
1.05 | % | 0.96 | % | 0.89 | % | ||||||
| Allowance for loan losses/non-performing loans |
40.24 | 24.31 | 21.08 | |||||||||
| Non-performing loans/total loans |
2.60 | 3.97 | 4.23 | |||||||||
| Non-performing loans/total assets |
1.93 | 2.72 | 2.68 | |||||||||
| Non-performing assets/total assets |
2.07 | 2.91 | 2.94 | |||||||||
| Share Related |
||||||||||||
| Book value per share |
$ | 10.36 | $ | 9.93 | $ | 9.87 | ||||||
| Tangible book value per share |
$ | 9.74 | $ | 9.31 | $ | 9.25 | ||||||
| Market value per share |
$ | 13.92 | $ | 12.45 | $ | 13.69 | ||||||
| Shares outstanding |
22,073,326 | 22,149,409 | 22,240,515 | |||||||||
| (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 divided by the sum of net interest income and non-interest income excluding gains or losses on securities and gain on sale of investment in affiliate bank. |
8