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Meridian Bancorp, Inc. Reports Record Net Income for the Third Quarter, up 30%, and its Intention to Increase the Quarterly Dividend 14%

Meridian Bancorp, Inc. Reports Record Net Income for the Third Quarter, up 30%, and its Intention to Increase the Quarterly Dividend 14%

BOSTON, Oct. 22, 2019 (GLOBE NEWSWIRE) -- Meridian Bancorp, Inc. (the “Company” or “Meridian”) (EBSB), the holding company for East Boston Savings Bank (the “Bank”), announced net income of $19.7 million, or $0.38 per diluted share, for the quarter ended September 30, 2019, up from $15.2 million, or $0.29 per diluted share, for the quarter ended June 30, 2019 and $17.4 million, or $0.33 per diluted share, for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, net income was $49.9 million, or $0.97 per diluted share, up from $43.4 million, or $0.82 per diluted share, for the nine months ended September 30, 2018. The Company’s return on average assets was 1.24% for the quarter ended September 30, 2019, up from 0.97% for the quarter ended June 30, 2019 and 1.22% for the quarter ended September 30, 2018. For the nine months ended September 30, 2019 the Company’s return on average assets was 1.06%, up from 1.05% for the nine months ended September 30, 2018. The Company’s return on average equity was 11.17% for the quarter ended September 30, 2019, up from 8.75% for the quarter ended June 30, 2019 and 10.28% for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, the Company’s return on average equity was 9.60%, up from 8.72% for the nine months ended September 30, 2018. 

Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, “I am pleased to report record net income of $19.7 million for the third quarter of 2019, up 30% from the second quarter of 2019 and 13% from the third quarter of 2018, and $49.9 million for the first nine months of 2019, up 15% from the first nine months of 2018. These earnings increases reflect a $3.0 million loan loss provision reversal resulting from over $200 million of commercial loan pay-offs and another $200 million of construction loans that converted to permanent status and also reflect overhead expense reductions in the third quarter of 2019. While the strong commercial real estate market conditions in the metropolitan Boston area that resulted in the sale of several large underlying properties and the challenging interest rate environment that impacted market lending rates contributed to the volume of our loan payoffs, our loan origination pipelines remain strong. In consideration of our current and expected earnings trends, the Board of Directors intends to declare an increase in our quarterly dividend by $0.01 per share, or 14%, to $0.08 per share in the fourth quarter.”

The Company’s net interest income was $44.2 million for the quarter ended September 30, 2019, up $1.7 million, or 4.1%, from the quarter ended June 30, 2019 and $2.8 million, or 6.9%, from the quarter ended September 30, 2018. The interest rate spread and net interest margin on a tax-equivalent basis were 2.52% and 2.87%, respectively, for the quarter ended September 30, 2019 compared to 2.48% and 2.82%, respectively, for the quarter ended June 30, 2019 and 2.70% and 2.99%, respectively, for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, net interest income increased $7.0 million, or 5.7%, to $129.3 million from the nine months ended September 30, 2018. The interest rate spread and net interest margin on a tax-equivalent basis were 2.52% and 2.86%, respectively, for the nine months ended September 30, 2019, compared to 2.81% and 3.07% for the nine months ended September 30, 2018. The increases in net interest income were primarily due to growth in average loan balances and yields on interest-earning assets, reflecting higher commercial loan prepayment fees, 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, 2019 compared to the respective periods of 2018.

Total interest and dividend income increased to $68.5 million for the quarter ended September 30, 2019, up $2.3 million, or 3.4%, from the quarter ended June 30, 2019 and $10.4 million, or 17.9%, from the quarter ended September 30, 2018, primarily due to growth in the Company’s average loan balances to $5.841 billion and increases in the yield on loans. The Company’s yield on loans on a tax-equivalent basis was 4.54% for the quarter ended September 30, 2019, up seven basis points from the quarter ended June 30, 2019 and up 24 basis points from the quarter ended September 30, 2018. Interest and fees on loans included commercial loan prepayment fees of $873,000 for the quarter ended September 30, 2019, up from $136,000 for the quarter ended June 30, 2019 and $29,000 for the quarter ended September 30, 2018. The Company’s yield on interest-earning assets on a tax-equivalent basis was 4.42% for the quarter ended September 30, 2019, up four basis points from the quarter ended June 30, 2019 and up 24 basis points from the quarter ended September 30, 2018. For the nine months ended September 30, 2019 the Company’s total interest and dividend income increased $33.3 million, or 20.1%, to $199.3 million from the nine months ended September 30, 2018, primarily due to growth in the Company’s average loan balances of $769.4 million, or 15.3%, to $5.782 billion and an increase in the yield on loans on a tax-equivalent basis of 17 basis points to 4.48% for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018. Interest and fees on loans included commercial loan prepayment fees of $1.2 million for the nine months ended September 30, 2019, up from $658,000 for the nine months ended September 30, 2018. The Company’s yield on interest-earning assets on a tax-equivalent basis increased 23 basis points to 4.38% for the nine months ended September 30, 2019 compared to the same period in 2018.

Total interest expense increased to $24.3 million for the quarter ended September 30, 2019, up $504,000, or 2.1%, from the quarter ended June 30, 2019 and $7.6 million, or 45.1%, from the quarter ended September 30, 2018. Interest expense on deposits decreased $475,000, or 2.3%, to $20.2 million for the quarter ended September 30, 2019, from the quarter ended June 30, 2019, primarily due to decreases of $30.1 million in average total deposits to $4.971 billion and five basis points in the cost of average total deposits to 1.61%. Interest expense on deposits increased $5.9 million, or 41.3%, from the quarter ended September 30, 2018 primarily due to a $585.8 million increase, or 13.4%, in average total deposits and a 32 basis point increase in the cost of average total deposits from the quarter ended September 30, 2018. Interest expense on borrowings increased to $4.1 million for the quarter ended September 30, 2019, up $979,000, or 31.1%, from the quarter ended June 30, 2019 and $1.7 million, or 67.7%, from the quarter ended September 30, 2018 primarily due to growth in average total borrowing to $627.1 million and increases in the average cost of borrowings to 2.61% from 2.37% for the quarter ended June 30, 2019, and 1.60% for the quarter ended September 30, 2018. The Company’s total cost of funds was 1.72% for the quarter ended September 30, 2019, down one basis point from the quarter ended June 30, 2019 and up 39 basis points from the quarter ended September 30, 2018. Total interest expense increased $26.3 million, or 60.2%, to $70.0 million for the nine months ended September 30, 2019 from the nine months ended September 30, 2018. Interest expense on deposits increased $22.4 million, or 59.8%, to $60.0 million for the nine months ended September 30, 2019 from the nine months ended September 30, 2018 due to growth in average total deposits of $700.7 million, or 16.4%, to $4.962 billion and an increase in the cost of average total deposits of 44 basis points to 1.62%. Interest expense on borrowings increased $3.9 million, or 62.6%, to $10.0 million for the nine months ended September 30, 2019 from the nine months ended September 30, 2018 due to an increase in the cost of average total borrowings of 88 basis points to 2.31% and an increase in average total borrowings of $4.0 million, or 0.7%, to $579.3 million. The Company’s cost of funds increased 48 basis points to 1.69% for the nine months ended September 30, 2019 compared to the nine months ended September 30, 2018.

Mr. Gavegnano continued, “Our net interest income rose 4% along with a five basis point increase in our net interest margin to 2.87% for the third quarter from the second quarter of 2019. This improvement was driven by a seven basis point increase in our yield on loans as enhanced by commercial loan prepayment fees along with a one basis point decline in our cost of funds, reflecting a five basis point decrease in our cost of deposits. We expect further expansion in our margin in the coming months with continuing declines in our funding costs.”

The Company recognized a reversal of $3.0 million in its provision for loan losses for the quarter ended September 30, 2019, compared to provisions of $78,000 for the quarter ended June 30, 2019 and $226,000 for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, there was a loan loss provision reversal of $2.1 million compared to a provision expense of $4.3 million for the nine months ended September 30, 2018. The reductions in the provision for loan losses were primarily due to substantial payoffs of multi-family, commercial real estate and commercial and industrial loans, the conversion of construction loans to permanent status in the commercial loan categories and continuing improvements in credit quality trends during the quarter and nine months ended September 30, 2019. The allowance for loan losses was $50.8 million or 0.88% of total loans at September 30, 2019, compared to $53.9 million or 0.92% of total loans at June 30, 2019, $53.2 million or 0.94% of total loans at December 31, 2018, and $49.6 million or 0.94% of total loans at September 30, 2018. The declines in the allowance for loan losses coverage ratio were based on management’s assessment of the loan portfolio balance and composition changes, declines in historical charge-off trends, reduced levels of problem loans and other improvements in asset quality trends.

Net charge-offs totaled $56,000 for the quarter ended September 30, 2019 compared to net charge-offs of $210,000 for the quarter ended June 30, 2019 and net charge-offs of $18,000 for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, net charge-offs totaled $343,000 compared to net recoveries of $139,000 for the nine months ended September 30, 2018.

Non-accrual loans were $3.9 million, or 0.07% of total loans outstanding, at September 30, 2019; down $2.1 million, or 34.7%, from June 30, 2019; down $3.0 million, or 42.8%, from December 31, 2018 and down $4.1 million, or 50.7%, from September 30, 2018. Non-performing assets were $3.9 million, or 0.06% of total assets, at September 30, 2019, compared to $6.0 million, or 0.09% of total assets, at June 30, 2019, $6.9 million, or 0.11% of total assets, at December 31, 2018, and $8.0 million, or 0.14% of total assets, at September 30, 2018.

Mr. Gavegnano noted, “We are also gratified to have achieved asset quality levels not seen since well before the Great Recession. Along with non-performing loans of only $3.9 million, or 0.06% of total assets, we currently have no past due multi-family, commercial real estate or construction loans outstanding.”

Non-interest income was $2.8 million for the quarter ended September 30, 2019, down from $3.0 million for the quarter ended June 30, 2019 and $3.7 million for the quarter ended September 30, 2018. Non-interest income decreased $105,000, or 3.6%, compared to the quarter ended June 30, 2019, primarily due to a $686,000 decrease in gain on marketable equity securities, net, reflecting decreases in market valuations, partially offset by increases of $383,000 in loan fees and $140,000 in customer service fees. Compared to the quarter ended September 30, 2018, non-interest income decreased $828,000, or 22.5%, primarily due to a decrease of $1.2 million in gain on marketable equity securities, net, partially offset by increases of $186,000 in customer service fees and $135,000 in loan fees. For the nine months ended September 30, 2019, non-interest income increased $763,000, or 8.6%, to $9.6 million from $8.9 million for the nine months ended September 30, 2018, primarily due to increases of $454,000 in gain on marketable equity securities, net, reflecting increases in market valuations, $128,000 in loan fees and $119,000 in customer service fees. The increases in loan fees are primarily due to $308,000 of loan swap fee income recognized in the third quarter of 2019.

Non-interest expenses were $23.8 million, or 1.50% of average assets for the quarter ended September 30, 2019, compared to $25.1 million, or 1.60% of average assets for the quarter ended June 30, 2019 and $23.0 million, or 1.61% of average assets for the quarter ended September 30, 2018. Non-interest expenses decreased $1.3 million, or 5.1%, compared to the quarter ended June 30, 2019, due primarily to decreases of $919,000 in deposit insurance, $280,000 in marketing and advertising, $176,000 in other general and administrative and $104,000 in professional services, partially offset by a $185,000 increase in salaries and employee benefits. Non-interest expenses increased $840,000, or 3.7%, compared to the quarter ended September 30, 2018, due primarily to increases of $715,000 in salaries and employee benefits, $676,000 in occupancy and equipment, $279,000 in data processing and $187,000 in marketing and advertising, partially offset by decreases of $841,000 in deposit insurance and $147,000 in other general and administrative. For the nine months ended September 30, 2019, non-interest expenses increased $3.6 million, or 5.1%, to $74.8 million from $71.2 million for the nine months ended September 30, 2018, due primarily to increases of $1.4 million in salaries and employee benefits, $1.4 million in occupancy and equipment, $922,000 in data processing and $675,000 in marketing and advertising, partially offset by decreases of $479,000 in deposit insurance and $324,000 in professional services. The decreases in deposit insurance reflect the application of $903,000 in Small Bank Assessment Credits by the Federal Deposit Insurance Corporation for the quarter ended September 30, 2019. The increases in salaries and employee benefits were primarily due to annual increases in employee compensation, payroll taxes and employee benefits, while the increases in occupancy and equipment expenses and data processing include costs associated with the expansion of our branch network, including one new branch that opened late in the first quarter of 2018, three new branch openings in the fourth quarter of 2018 and one new branch opened in July 2019. The Company’s efficiency ratio was 50.18% for the quarter ended September 30, 2019 compared to 55.57% for the quarter ended June 30, 2019 and 51.92% for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, the efficiency ratio was 54.24% compared to 54.44% for the nine months ended September 30, 2018.

Mr. Gavegnano added, “Our non-interest expenses decreased 5% and our efficiency ratio improved to 50.18% from 55.57% for the third quarter of 2019 from the second quarter. While these improvements reflected the deposit insurance assessment credits applied by the FDIC, they were also indicative of our prudent management of overhead expense levels in recent years while we significantly expanded our branch network. We remained committed to this disciplined approach as we approach the scheduled opening of our 40th branch in Boston’s Brighton neighborhood in early December and consider additional opportunities to expand our market share in the metropolitan Boston area.”

The Company recorded a provision for income taxes of $6.5 million for the quarter ended September 30, 2019, reflecting an effective tax rate of 24.8%, compared to $5.1 million, or an effective tax rate of 25.0%, for the quarter ended June 30, 2019, and $4.5 million, or an effective tax rate of 20.4%, for the quarter ended September 30, 2018. For the nine months ended September 30, 2019, the provision for income taxes was $16.3 million, reflecting an effective tax rate of 24.6%, compared to $12.3 million, or an effective tax rate of 22.0%, for the nine months ended September 30, 2018.

Total assets were $6.363 billion at September 30, 2019, down $5.4 million, or 0.1%, from $6.369 billion at June 30, 2019 and up $184.5 million, or 3.0%, from $6.179 billion at December 31, 2018. Net loans were $5.698 billion at September 30, 2019, down $67.8 million, or 1.2%, from June 30, 2019, and up $104.2 million, or 1.9%, from December 31, 2018. The net decrease in loans for the quarter ended September 30, 2019 reflects loan payoffs of $66.1 million in the multi-family, $123.3 million in the commercial real estate, $43.2 million in the commercial and industrial and $14.3 million in the construction loan categories. Loan originations totaled $183.2 million during the quarter ended September 30, 2019 and $736.7 million during the nine months ended September 30, 2019. The net increase in loans for the nine months ended September 30, 2019 was primarily due to increases of $65.6 million in commercial real estate loans, $58.8 million in multi-family loans, $20.0 million in one- to four-family loans, and $16.4 million in home equity lines of credit, partially offset by decreases of $30.3 million in construction loans and $30.3 million in commercial and industrial loans. These balance changes reflect commercial loan payoffs totaling $439.5 million and construction loans that converted to permanent status totaling $321.1 million during the nine months ended September 30, 2019. Cash and due from banks was $428.1 million at September 30, 2019, an increase of $56.1 million, or 15.1% from December 31, 2018. Securities, at fair value, were $30.1 million at September 30, 2019, a decrease of $484,000, or 1.6%, from $30.6 million at December 31, 2018.

Effective January 1, 2019, the Company adopted Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842). During the nine months ended September 30, 2019, premises and equipment, net increased $20.4 million to $65.6 million and accrued expenses and other liabilities increased $25.9 million to $58.8 million at September 30, 2019, reflecting the recognition of operating lease assets and liabilities totaling $18.1 million based on the present value of future minimum lease payments as required by ASU No. 2016-02.

Total deposits were $4.956 billion at September 30, 2019, down $62.6 million, or 1.2%, from $5.018 billion at June 30, 2019 and up $71.5 million, or 1.5%, from $4.884 billion at December 31, 2018. The net decrease in deposits for the quarter ended September 30, 2019 reflects a $108.3 million reduction in brokered deposits. Core deposits, which exclude certificates of deposit, increased $117.3 million, or 3.7%, during the nine months ended September 30, 2019 to $3.315 billion, or 66.9% of total deposits. Total borrowings were $636.6 million, up $36.5 million, or 6.1%, from June 30, 2019 and $49.7 million, or 8.5%, from December 31, 2018.

Total stockholders’ equity increased $16.3 million, or 2.3%, to $712.0 million at September 30, 2019 from $695.7 million at June 30, 2019, and $37.3 million, or 5.5%, from $674.7 million at December 31, 2018. The increase for the nine months ended September 30, 2019 was primarily due to net income of $49.9 million and $5.2 million related to stock-based compensation plans, partially offset by the repurchase of 428,820 shares of the Company’s common stock related to the stock repurchase programs at a total cost of $7.3 million and dividends of $0.21 per share totaling $10.7 million. Stockholders’ equity to assets was 11.19% at September 30, 2019, compared to 10.92% at June 30, 2019 and 10.92% at December 31, 2018. Book value per share increased to $13.36 at September 30, 2019 from $12.60 at December 31, 2018. Tangible book value per share increased to $12.93 at September 30, 2019 from $12.17 at December 31, 2018. Market price per share increased $4.43 or 30.9%, to $18.75 at September 30, 2019 from $14.32 at December 31, 2018. At September 30, 2019, the Company and the Bank continued to exceed all regulatory capital requirements.

The Company repurchased 87,801 shares of its stock at an average price of $17.64 during the quarter ended September 30, 2019. As of September 30, 2019, the Company has repurchased 324,544 shares of its stock at an average price of $17.32, or 64.91% of the 500,000 shares authorized for repurchase under the Company’s repurchase program adopted in April 2019. The Company has repurchased 3,698,165 shares at an average price of $15.11 per share since August 2015.

Mr. Gavegnano concluded, “In addition to our stock repurchases to date and our announced intention to increase the quarterly dividend to stockholders, we are also considering the expansion of our stock repurchase program as we explore additional opportunities to enhance stockholder value.”

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 39 branches in the greater Boston metropolitan area, including 38 full-service locations and one mobile branch. We offer a variety of deposit and loan products to individuals and businesses located in our primary market, which consists of Essex, Middlesex, Norfolk and Suffolk Counties, Massachusetts. For additional information, visit 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,
2019

    June 30,
2019

    December 31,
2018

    September 30,
2018

 
     
    (Dollars in thousands)
ASSETS                                
Cash and due from banks   $ 428,061     $ 361,050     $ 371,995     $ 313,668  
Certificates of deposit     247       5,247       5,247       20,891  
Securities available for sale, at fair value     15,799       16,500       17,159       17,510  
Marketable equity securities, at fair value     14,313       14,776       13,437       16,135  
Federal Home Loan Bank stock, at cost     28,947       27,469       29,187       31,100  
Loans held for sale     1,828       2,105       409       843  
Loans:                                
One- to four-family     667,385       668,997       647,367       636,419  
Home equity lines of credit     66,495       60,040       50,087       46,534  
Multi-family     1,069,312       1,061,839       1,010,521       969,628  
Commercial real estate     2,687,614       2,647,033       2,621,979       2,438,139  
Construction     656,615       748,457       686,948       594,611  
Commercial and industrial     594,683       627,718       625,018       585,215  
Consumer     12,017       11,445       10,953       10,934  
Total loans     5,754,121       5,825,529       5,652,873       5,281,480  
Allowance for loan losses     (50,831 )     (53,865 )     (53,231 )     (49,609 )
Net deferred loan origination fees     (5,670 )     (6,292 )     (6,239 )     (5,970 )
Loans, net     5,697,620       5,765,372       5,593,403       5,225,901  
Bank-owned life insurance     41,267       41,295       40,734       41,164  
Premises and equipment, net     65,582       66,280       45,140       42,448  
Accrued interest receivable     14,305       15,436       14,267       13,409  
Deferred tax asset, net     18,393       18,301       18,196       15,998  
Goodwill     20,378       20,378       20,378       19,638  
Core deposit intangible     2,254       2,385       2,653       2,801  
Other assets     14,146       11,978       6,478       13,822  
Total assets   $ 6,363,140     $ 6,368,572     $ 6,178,683     $ 5,775,328  
                                 
LIABILITIES AND STOCKHOLDERS' EQUITY                                
Deposits:                                
Non interest-bearing demand deposits   $ 514,941     $ 505,679     $ 483,777     $ 490,703  
Interest-bearing demand deposits     1,262,552       1,161,835       1,190,346       1,151,955  
Money market deposits     689,324       675,452       729,174       844,183  
Regular savings and other deposits     848,582       986,112       794,813       327,721  
Certificates of deposit     1,640,303       1,689,226       1,686,074       1,596,691  
Total deposits     4,955,702       5,018,304       4,884,184       4,411,253  
Short-term borrowings                 50,000       40,000  
Long-term debt     636,615       600,088       536,880       610,772  
Accrued expenses and other liabilities     58,841       54,479       32,965       34,160  
Total liabilities     5,651,158       5,672,871       5,504,029       5,096,185  
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; 53,297,061, 53,321,805, 53,541,429 and 54,233,331 shares issued at September 30, 2019, June 30, 2019, December 31, 2018 and September 30, 2018, respectively     533       533       535       542  
Additional paid-in capital     375,618       375,760       378,583       392,545  
Retained earnings     352,758       336,628       313,521       304,725  
Accumulated other comprehensive income (loss)     48       (24 )     (348 )     (812 )
Unearned compensation - ESOP, 2,343,949, 2,374,390, 2,435,272 and 2,465,713 shares at September 30, 2019, June 30, 2019, December 31, 2018 and September 30, 2018, respectively     (16,975 )     (17,196 )     (17,637 )     (17,857 )
Total stockholders' equity     711,982       695,701       674,654       679,143  
Total liabilities and stockholders' equity   $ 6,363,140     $ 6,368,572     $ 6,178,683     $ 5,775,328  


           
MERIDIAN BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF NET INCOME
(Unaudited)
                                       
    Three Months Ended
    Nine Months Ended
    September 30,
2019

    June 30,
2019

    September 30,
2018

    September 30,
2019

    September 30,
2018

     
    (Dollars in thousands, except per share amounts)
Interest and dividend income:                                      
Interest and fees on loans   $ 66,121     $ 64,040     $ 55,849     $ 191,802     $ 159,738
Interest on debt securities:                                      
Taxable     101       108       115       319       367
Tax-exempt     12       13       13       38       43
Dividends on equity securities     137       142       101       384       383
Interest on certificates of deposit     18       28       104       73       448
Other interest and dividend income     2,136       1,943       1,932       6,656       4,981
Total interest and dividend income     68,525       66,274       58,114       199,272       165,960
Interest expense:                                      
Interest on deposits     20,178       20,653       14,284       59,982       37,544
Interest on short-term borrowings     1             8       296       8
Interest on long-term debt     4,129       3,151       2,455       9,710       6,146
Total interest expense     24,308       23,804       16,747       69,988       43,698
Net interest income     44,217       42,470       41,367       129,284       122,262
Provision (reversal) for loan losses     (2,978 )     78       226       (2,057 )     4,285
Net interest income, after provision (reversal) for loan losses     47,195       42,392       41,141       131,341       117,977
Non-interest income:                                      
Customer service fees     2,428       2,288       2,242       6,813       6,694
Loan fees     436       53       301       566       438
Mortgage banking gains, net     99       101       74       240       270
(Loss) gain on marketable equity securities, net     (463 )     223       781       1,086       632
Income from bank-owned life insurance     285       280       279       846       828
Gain on life insurance distribution     52                   52      
Other income     12       9             28       6
Total non-interest income     2,849       2,954       3,677       9,631       8,868
Non-interest expenses:                                      
Salaries and employee benefits     15,101       14,916       14,386       45,649       44,218
Occupancy and equipment     3,657       3,650       2,981       10,903       9,545
Data processing     2,026       2,009       1,747       6,005       5,083
Marketing and advertising     1,019       1,299       832       3,480       2,805
Professional services     680       784       683       2,324       2,648
Deposit insurance     10       929       851       1,951       2,430
Merger and acquisition                 26             114
Other general and administrative     1,354       1,530       1,501       4,448       4,318
Total non-interest expenses     23,847       25,117       23,007       74,760       71,161
Income before income taxes     26,197       20,229       21,811       66,212       55,684
Provision for income taxes     6,508       5,061       4,454       16,284       12,271
Net income   $ 19,689     $ 15,168     $ 17,357     $ 49,928     $ 43,413
                                       
Earnings per share:                                      
Basic   $ 0.39     $ 0.30     $ 0.34     $ 0.98     $ 0.84
Diluted   $ 0.38     $ 0.29     $ 0.33     $ 0.97     $ 0.82
Weighted average shares outstanding:                                      
Basic     50,923,760       51,051,880       51,492,448       51,031,359       51,487,192
Diluted     51,454,186       51,511,678       52,732,340       51,477,206       52,894,503



     
MERIDIAN BANCORP, INC. AND SUBSIDIARIES
NET INTEREST INCOME ANALYSIS
(Unaudited) 
                                                               
    Three Months Ended
    September 30, 2019
  June 30, 2019
  September 30, 2018
    Average
  Interest
  Yield/
  Average
  Interest
  Yield/
  Average
  Interest
  Yield/
    Balance
  (1)
  Cost (1)(6)null