GlobeNewswire Inc | Jul 21, 2020 04:05PM EDT

July 21, 2020

BOSTON, July 21, 2020 (GLOBE NEWSWIRE) -- Meridian Bancorp, Inc. (the Company or Meridian) (NASDAQ: EBSB), the holding company for East Boston Savings Bank (the Bank), announced net income of $17.3 million, or $0.34 per diluted share, for the quarter ended June30, 2020, compared to $13.0 million, or $0.25 per diluted share, for the quarter ended March31, 2020 and $15.2 million, or $0.29 per diluted share, for the quarter ended June30, 2019. For the six months ended June 30, 2020, net income was $30.3 million, or $0.60 per diluted share, up from $30.2 million, or $0.59 per diluted share, for the six months ended June 30, 2019. The Companys return on average assets was 1.08% for the quarter ended June30, 2020, compared to 0.82% for the quarter ended March31, 2020 and 0.97% for the quarter ended June30, 2019. For the six months ended June 30, 2020, the Companys return on average assets was 0.95%, down from 0.97% for the six months ended June 30, 2019. The Companys return on average equity was 9.45% for the quarter ended June30, 2020, compared to 7.09% for the quarter ended March 31, 2020, and 8.75% for the quarter ended June30, 2019. For the six months ended June 30, 2020, the Companys return on average equity was 8.27%, down from 8.79% for the six months ended June 30, 2019.

Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, Despite the unprecedented challenges brought on by COVID-19, I am pleased to report record net income of $17.3 million for the second quarter of 2020, up $2.1 million, or 14%, from the prior second quarter record in 2019. This improvement in quarterly results reflects continued growth in net interest income, a $4.2 million gain on sale of a Bank property in South Boston and a decline in operating expenses, despite bolstering our reserves with a $9.6 million provision for loan losses. We are experiencing one of the most unique periods in our long history and management has shifted their focus and allocated available resources to minimizing COVID-19s impact on the Bank and our customers, community and shareholders. We have kept our branches available, supported our loan customers with temporary modifications and ensured our employees did this in the safest manner possible.

Mr. Gavegnano continued, We began working with our loan customers in March, making accommodations for their existing loans to help ease them through the pandemic. As government mandated shutdowns took effect and more people were unemployed, primarily in April and May, we maintained an active understanding of evolving government programs and suspended accounting rules to ensure our customers were taking advantage of these opportunities as needed. This includes successfully executing the Small Business Administrations Paycheck Protection Program (PPP) and providing modifications to existing commercial and residential loans. I was happy with the Banks execution in assisting our customers when they needed it most.

The Companys net interest income was $47.4 million for the quarter ended June30, 2020, up $2.3 million, or 5.0%, from the quarter ended March31, 2020, and up $4.9 million, or 11.5%, from the quarter ended June30, 2019. The interest rate spread and net interest margin on a tax-equivalent basis were 2.86% and 3.10%, respectively, for the quarter ended June30, 2020 compared to 2.67% and 2.99%, respectively, for the quarter ended March31, 2020 and 2.48% and 2.82%, respectively, for the quarter ended June30, 2019. For the six months ended June 30, 2020, net interest income increased $7.4 million, or 8.7%, to $92.5 million from the six months ended June 30, 2019. The interest rate spread and net interest margin on a tax-equivalent basis were 2.76% and 3.05% for the six months ended June 30, 2020 compared to 2.53% and 2.85% for the six months ended June 30, 2019. The increases in net interest income for the quarter and six months ended June 30, 2020 compared to the respective prior periods were primarily due to the substantial reduction in the cost of funds.

Total interest and dividend income totaled $62.2 million for the quarter ended June30, 2020, down $3.9 million, or 5.9%, from the quarter ended March31, 2020, primarily due to a decrease in yield on loans on a tax-equivalent basis of 17 basis points to 4.37% and a decrease in yield on other interest-earning assets of 139 basis points to 0.40%. Compared to the quarter ended June30, 2019, total interest and dividend income decreased $4.1 million, or 6.2%, primarily due to a decrease in yield on loans on a tax-equivalent basis of 10 basis points and a decrease in yield on other interest-earning assets of 229 basis points. The Companys yield on interest-earning assets on a tax-equivalent basis was 4.06% for the quarter ended June30, 2020, down 29 basis points from the quarter ended March31, 2020 and 32 basis points from the quarter ended June30, 2019. For the six months ended June 30, 2020, the Companys total interest and dividend income totaled $128.2 million, a decrease of $2.6 million, or 2.0%, from the six months ended June 30, 2019, primarily due to a decrease in yield on other interest-earning assets of 181 basis points to 1.03% for the six months ended June 30, 2020 compared to the six months ended June 30, 2019. The Companys yield on interest-earning assets on a tax-equivalent basis decreased 16 basis points to 4.20% for the six months ended June30, 2020, compared to the same period in 2019.

Total interest expense totaled $14.8 million for the quarter ended June30, 2020, down $6.1 million, or 29.4%, from the quarter ended March31, 2020, and down $9.0 million, or 37.9%, from the quarter ended June30, 2019. Interest expense on deposits decreased to $10.6 million for the quarter ended June30, 2020, down $6.2 million, or 36.8%, from the quarter ended March31, 2020 and $10.1 million, or 48.7%, from the quarter ended June30, 2019 primarily due to a decrease in average total deposits to $4.844 billion and a decrease in the cost of average total deposits to 0.88% from 1.38% for the quarter ended March31, 2020, and 1.66% for the quarter ended June30, 2019. Interest expense on borrowings totaled $4.2 million for the quarter ended June30, 2020, up $37,000, or 0.9%, from the quarter ended March31, 2020 primarily due to an increase in average total borrowings to $754.4 million, partially offset by a decrease of 32 basis points in the average cost of borrowings to 2.23%. Compared to the quarter ended June30, 2019, interest expense on borrowings increased $1.0 million, or 32.9%, primarily due to an increase of $222.0 million, or 41.7%, in average total borrowings, partially offset by a 14 basis point decrease in the average cost of borrowings. The Companys total cost of funds was 1.06% for the quarter ended June30, 2020, down 46 basis points from the quarter ended March31, 2020 and down 67 basis points from the quarter ended June30, 2019. Total interest expense totaled $35.7 million for the six months ended June30, 2020, down $10.0 million, or 21.8%, from the six months ended June 30, 2019. Interest expense on deposits decreased to $27.4 million for the six months ended June30, 2020, down $12.4 million, or 31.3%, from the six months ended June 30, 2019 primarily due to a decrease in average total deposits to $4.866 billion and a decrease in the cost of average total deposits to 1.13% from 1.62% for the six months ended June30, 2019. Interest expense on borrowings totaled $8.3 million for the six months ended June30, 2020, up $2.5 million, or 41.9%, from the six months ended June 30, 2019 primarily due to an increase in average total borrowings to $704.6 million and an increase of 25 basis points in the average cost of borrowings to 2.38%. The Companys total cost of funds was 1.29% for the six months ended June30, 2020, down 38 basis points from the six months ended June30, 2019.

Mr. Gavegnano noted, Our net interest margin improved to 3.10% for the quarter and 3.05% for the six months ended June 30, 2020, due to increases in net interest income of 12% and 9%, respectively. This is the result of maintaining our loan yields while aggressively reducing our funding costs. We expect our cost of funds to continue to decline as term deposits and advances mature and are replaced at significantly lower rates.

The Companys provision for loan losses was $9.6 million for the quarter ended June30, 2020, compared to $725,000 for the quarter ended March31, 2020 and $78,000 for the quarter ended June30, 2019. The allowance for loan losses was $60.5 million or 1.06% of total loans at June30, 2020, compared to $50.9 million or 0.89% of total loans at March31, 2020, and $50.3 million or 0.87% of total loans at December31, 2019 and $53.9 million or 0.92% of total loans at June30, 2019. The increases in the provision and coverage ratio reflect the application of economic uncertainties and market volatility caused by COVID-19 to the factors used to determine the Companys provision.

Net charge-offs totaled $40,000 for the quarter ended June30, 2020 compared to net charge-offs of $101,000 for the quarter ended March31, 2020 and net charge-offs of $210,000 for the quarter ended June30, 2019. For the six months ended June30, 2020, net charge-offs totaled $141,000 compared to net charge-offs of $287,000 for six months ended June30, 2019.

Non-accrual loans were $3.8 million, or 0.07% of total loans outstanding, at June30, 2020; up $631,000, or 19.8%, from March31, 2020; and up $415,000 or 12.2% from December 31, 2019 and down $2.2 million or 36.8%, from June30, 2019. Non-performing assets were $3.8 million, or 0.06% of total assets, at June30, 2020, compared to $3.2 million, or 0.05% of total assets, at March31, 2020, $3.4 million, or 0.05% of total assets, at December 31, 2019, and $6.0 million, or 0.09% of total assets at June 30, 2019.

Mr. Gavegnano noted, We have reserved $9.6 million this quarter through the provision for loan losses, increasing our coverage ratio to 1.06%. We have been prudently adjusting our reserves throughout the quarter to incorporate the modifications being executed in support of our customers. As of June 30, 2020, we had applied COVID-19 related modifications to approximately 13% of our loan portfolio. Managements focus over the next several quarters will be on monitoring these modified loans through constant analysis and communication with the customer. These efforts will allow us to quantify our exposure and apply the results to determine a reasonable provision for loan losses.

Non-interest income was $8.7 million for the quarter ended June30, 2020, up from a loss of $831,000 for the quarter ended March31, 2020 and $3.0 million for the quarter ended June30, 2019. Non-interest income increased $9.5 million, or 1,141.9%, compared to the quarter ended March31, 2020, due primarily to a $4.2 million gain on sale of assets and a $2.0 million gain on marketable equity securities, net, reflecting increases in market valuations in the second quarter of 2020 compared to a $4.3 million loss on marketable equity securities, net, in the first quarter of 2020, partially offset by decreases of $709,000 in loan fees and $293,000 in mortgage banking gains, net. Compared to the quarter ended June30, 2019, non-interest income increased $5.7 million due primarily to a $4.2 million gain on sale of asset and an increase of $1.8 million in gain on marketable equity securities, net, partially offset by a decrease of $340,000 in customer service fees. For the six months ended June 30, 2020, non-interest income increased $1.0 million, or 15.4% to $7.8 million from $6.8 million for the six months ended June 30, 2019 primarily due to a $4.2 million gain on sale of asset in the second quarter of 2020, and increases of $509,000 in loan fees and $388,000 in mortgage banking gains, net, partially offset by a $2.3 million loss on marketable equity securities, net for the six months ended June30, 2020, compared to a $1.5 million gain on marketable equity securities, net for the six months ended June30, 2019, and by a decrease of $340,000 in customer service fees.

Non-interest expenses were $23.3 million, or 1.46% of average assets for the quarter ended June30, 2020, compared to $26.3 million, or 1.66% of average assets for the quarter ended March 31, 2020 and $25.1 million, or 1.60% of average assets for the quarter ended June30, 2019. Non-interest expenses decreased $3.0 million, or 11.5%, compared to the quarter ended March31, 2020, due primarily to decreases of $2.1 million in salaries and employee benefits, $302,000 in professional services, $209,000 in other general and administrative, $200,000 in marketing and advertising, and $185,000 in occupancy and equipment. Non-interest expenses decreased $1.8 million, or 7.2%, compared to the quarter ended June30, 2019, due primarily to decreases of $1.1 million in salaries and employee benefits, $323,000 in deposit insurance, $290,000 in general and administrative and $269,000 in marketing and advertising, partially offset by an increase of $124,000 in data processing. For the six months ended June 30, 2020, non-interest expenses decreased $1.3 million, or 2.5%, to $49.6 million from $50.9 million for the six months ended June 30, 2019 due primarily to decreases of $776,000 in salaries and employee benefits, $666,000 in deposit insurance, $405,000 in other general and administrative and $201,000 in marketing and advertising, partially offset by increases of $417,000 in occupancy and equipment and $291,000 in data processing. 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 in the third quarter of 2019, one new branch that opened in the fourth quarter of 2019 and two new branches that are anticipated to open late in July 2020. The Companys efficiency ratio was 46.79% for the quarter ended June30, 2020 compared to 54.18% for the quarter ended March31, 2020 and 55.57% for the quarter ended June30, 2019. For the six months ended June 30, 2020 the efficiency ratio is 50.44% compared to 56.38% for the six months ended June 30, 2019.

Mr. Gavegnano added, We lowered our efficiency ratio to 47% and 50% for the quarter and six months ended June 30, 2020, respectively, due to the gain on sale of our former operations center in South Boston and a successful effort to limit our overhead expenses during the COVID-19 shutdowns. Our commitment to our community will continue as we invest in the expansion of our branch network by the planned opening of three new locations in the metropolitan Boston area communities of Salem, Woburn and Brookline in the third quarter.

The Company recorded a provision for income taxes of $5.8 million for the quarter ended June30, 2020, reflecting an effective tax rate of 25.2%, compared to $4.2 million, or an effective tax rate of 24.6%, for the quarter ended March31, 2020, and $5.1 million, or an effective tax rate of 25.0%, for the quarter ended June30, 2019. For the six months ended June 30, 2020 the provision for income taxes was $10.1 million, reflecting an effective tax rate of 24.9%, compared to $9.8 million, reflecting an effective rate of 24.4% for the period of June 30, 2019.

Total assets were $6.418 billion at June30, 2020, up $69.4 million, or 1.1%, from $6.349 billion at March31, 2020 and up $74.3 million, or 1.2%, from $6.344 billion at December31, 2019. Net loans were $5.654 billion at June30, 2020, up $14.5 million from March31, 2020, and down $43.2 million, or 0.8%, from December31, 2019. Loan originations totaled $353.1 million during the quarter ended June30, 2020 and $792.7 million for the six months ended June 30, 2020. The net decrease in loans for the six months ended June30, 2020 was primarily due to decreases of $140.6 million in commercial real estate loans, $61.5 million in multi-family loans and $23.7 million in one- to four-family loans, partially offset by increases of $155.7 million in commercial and industrial loans, $35.5 million in construction loans and $4.8 million in home equity lines of credit. The increase in commercial and industrial loans includes the origination of 401 PPP loans totaling $123.7 million. Cash and due from banks was $508.6 million at June30, 2020, an increase of $102.2 million, or 25.2% from December31, 2019. Securities, at fair value, were $29.4 million at June30, 2020, a decrease of $896,000, or 3.0%, from $30.3 million at December31, 2019.

Total deposits were $4.820 billion at June30, 2020, down $1.6 million, or less than 0.01%, from $4.822 billion at March31, 2020 and $101.1 million, or 2.1%, from $4.921 billion at December 31, 2019. The net decrease in deposits for the six months ended June30, 2020 reflects a $338.8 million decrease in certificates of deposit, including a $239.4 million reduction in brokered deposits. Core deposits, which exclude certificates of deposit, increased $237.7 million, or 7.1%, during the six months ended June30, 2020 to $3.589 billion, or 74.5% of total deposits. The increase in core deposits for the six months ended June 30, 2020 includes a $185.8 million increase, or 35.4%, in non-interest bearing demand deposits to $709.9 million. Total borrowings were $804.1 million at June30, 2020, up $58.2 million, or 7.8%, from March 31, 2020 and $167.9 million, or 26.4%, from December 31, 2019.

Total stockholders equity increased $14.7 million, or 2.0%, to $734.3 million at June30, 2020 from $719.6 million at March31, 2020, and increased $7.7 million, or 1.1%, from $726.6 million at December 31, 2019. The increase for the six months ended June30, 2020 was primarily due to net income of $30.3 million and $2.9 million related to stock-based compensation plans, partially offset by the repurchase of one million shares of the Companys common stock related to the stock repurchase program at a total cost of $17.7 million and dividends of $0.16 per share totaling $8.0 million. Stockholders equity to assets was 11.44% at June30, 2020, compared to 11.34% at March31, 2020 and 11.45% at December 31, 2019. Book value per share increased to $14.01 at June30, 2020 from $13.61 at December31, 2019. Tangible book value per share increased to $13.59 at June30, 2020 from $13.19 at December31, 2019. Market price per share decreased $8.49 or 42.3%, to $11.60 at June30, 2020 from $20.09 at December31, 2019. The Company and the Bank elected to be subject to the Community Bank Leverage Ratio and at June30, 2020 exceeded the minimum requirement to be well capitalized with ratios of 11.19% for the Company and 10.63% for the Bank.

The Company did not repurchase any of its shares during the quarter ended June 30, 2020. The Company has repurchased 4,698,165 shares of its stock at an average price of $15.66 per share since August 2015.

Mr. Gavegnano concluded, COVID-19 has brought unprecedented challenges to the financial services industry. We are well-equipped with capital and liquidity and will leverage our resources to steer the Bank and our customers through these difficult times.

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 40 branches in the greater Boston metropolitan area, including 39 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 Companys 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.

Contact: Richard J. Gavegnano, Chairman, President and Chief Executive Officer(978) 977-2211

MERIDIAN BANCORP, INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Unaudited)

June 30, March 31, December June 30, 2020 2020 31, 2019 2019 (Dollars in thousands) ASSETS Cash and due $ 508,627 $ 457,048 $ 406,382 $ 361,050 from banksCertificates of ? 247 247 5,247 depositSecuritiesavailable for 13,022 13,820 15,076 16,500 sale, at fairvalueMarketableequity 16,401 13,130 15,243 14,776 securities, atfair valueFederal HomeLoan Bank stock, 33,282 33,278 28,947 27,469 at costLoans held for 3,682 3,403 2,455 2,105 saleLoans: One- to 635,683 657,245 659,366 668,997 four-familyHome equity 74,246 78,016 69,491 60,040 lines of creditMulti-family 941,922 972,122 1,003,418 1,061,839 Commercial real 2,556,088 2,622,379 2,696,671 2,647,033 estateConstruction 742,845 716,477 707,370 748,457 Commercial and 760,546 638,695 604,889 627,718 industrialConsumer 11,867 11,888 12,196 11,445 Total loans 5,723,197 5,696,822 5,753,401 5,825,529 Allowance for (60,547 ) (50,946 ) (50,322 ) (53,865 )loan lossesNet deferredloan origination (8,340 ) (6,021 ) (5,539 ) (6,292 )feesLoans, net 5,654,310 5,639,855 5,697,540 5,765,372 Bank-owned life 41,334 41,061 41,155 41,295 insurancePremises and 67,098 67,527 65,841 66,280 equipment, netAccrued interest 17,300 13,868 14,481 15,436 receivableDeferred tax 16,873 16,782 16,726 18,301 asset, netGoodwill 20,378 20,378 20,378 20,378 Core deposit 1,887 2,005 2,123 2,385 intangibleOther assets 23,776 26,152 17,100 11,978 Total assets $ 6,417,970 $ 6,348,554 $ 6,343,694 $ 6,368,572 LIABILITIES ANDSTOCKHOLDERS' EQUITYDeposits: Noninterest-bearing $ 709,924 $ 572,847 $ 524,154 $ 505,679 demand depositsInterest-bearing 1,291,458 1,292,384 1,269,211 1,161,835 demand depositsMoney market 753,980 699,026 675,702 675,452 depositsRegular savingsand other 833,951 867,536 882,550 986,112 depositsCertificates of 1,231,084 1,390,156 1,569,916 1,689,226 depositTotal deposits 4,820,397 4,821,949 4,921,533 5,018,304 Short-term 25,000 25,000 ? ? borrowingsLong-term debt 779,101 720,873 636,245 600,088 Accrued expensesand other 59,199 61,111 59,329 54,479 liabilitiesTotal 5,683,697 5,628,933 5,617,107 5,672,871 liabilitiesStockholders' equity:Preferred stock,$0.01 par value,50,000,000 ? ? ? ? sharesauthorized; noneissuedCommon stock,$0.01 par value,100,000,000sharesauthorized;52,407,179,52,402,395,53,377,506 and 524 524 534 533 53,321,805shares issued atJune 30, 2020,March 31, 2020,December 31,2019, and, June30, 2019respectivelyAdditional 361,980 360,901 377,213 375,760 paid-in capitalRetained 387,983 374,712 365,742 336,628 earningsAccumulatedother 100 19 (147 ) (24 )comprehensiveincome (loss)Unearnedcompensation -ESOP,2,252,627,2,283,068,2,313,509, and2,374,390 (16,314 ) (16,535 ) (16,755 ) (17,196 )shares at June30, 2020, March31, 2020,December 31,2019 and June30, 2019,respectivelyTotalstockholders' 734,273 719,621 726,587 695,701 equityTotalliabilities and $ 6,417,970 $ 6,348,554 $ 6,343,694 $ 6,368,572 stockholders'equity

MERIDIAN BANCORP, INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF NET INCOME(Unaudited)

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2020 2019 2020 2019 (Dollars in thousands, except per share amounts) Interest anddividend income:Interest and $ 61,445 $ 64,037 $ 64,040 $ 125,482 $ 125,681 fees on loansInterest ondebt securities:Taxable 75 87 108 162 218 Tax-exempt 12 13 13 25 26 Dividends onequity 145 94 142 239 247 securitiesInterest oncertificates ? 1 28 1 55 of depositOther interestand dividend 473 1,786 1,943 2,259 4,520 incomeTotal interestand dividend 62,150 66,018 66,274 128,168 130,747 incomeInterest expense:Interest on 10,591 16,769 20,653 27,360 39,804 depositsInterest onshort-term 52 8 ? 60 295 borrowingsInterest on 4,136 4,143 3,151 8,279 5,581 long-term debtTotal interest 14,779 20,920 23,804 35,699 45,680 expenseNet interest 47,371 45,098 42,470 92,469 85,067 incomeProvision for 9,641 725 78 10,366 921 loan lossesNet interestincome, after 37,730 44,373 42,392 82,103 84,146 provision forloan lossesNon-interest income (loss):Customer 1,948 2,097 2,288 4,045 4,385 service feesLoan (costs) (35 ) 674 53 639 130 feesMortgagebanking gains, 118 411 101 529 141 netGain on sale 4,195 ? ? 4,195 ? of assetGain (loss) onmarketableequity 2,025 (4,344 ) 223 (2,319 ) 1,549 securities,netIncome frombank-owned 273 297 280 570 561 life insuranceGain on lifeinsurance 124 ? ? 124 ? distributionOther income 10 34 9 44 16 Totalnon-interest 8,658 (831 ) 2,954 7,827 6,782 income (loss)Non-interest expenses:Salaries andemployee 13,858 15,914 14,916 29,772 30,548 benefitsOccupancy and 3,739 3,924 3,650 7,663 7,246 equipmentData 2,133 2,137 2,009 4,270 3,979 processingMarketing and 1,030 1,230 1,299 2,260 2,461 advertisingProfessional 695 997 784 1,692 1,644 servicesDeposit 606 669 929 1,275 1,941 insuranceOther generaland 1,240 1,449 1,530 2,689 3,094 administrativeTotalnon-interest 23,301 26,320 25,117 49,621 50,913 expensesIncome before 23,087 17,222 20,229 40,309 40,015 income taxesProvision for 5,808 4,245 5,061 10,053 9,776 income taxesNet income $ 17,279 $ 12,977 $ 15,168 $ 30,256 $ 30,239 Earnings per share:Basic $ 0.34 $ 0.26 $ 0.30 $ 0.60 $ 0.59 Diluted $ 0.34 $ 0.25 $ 0.29 $ 0.60 $ 0.59 Weightedaverage shares outstanding:Basic 50,131,249 50,634,983 51,051,880 50,383,116 51,086,050 Diluted 50,211,234 50,920,259 51,511,678 50,565,747 51,489,608

MERIDIAN BANCORP, INC. AND SUBSIDIARIESNET INTEREST INCOME ANALYSIS(Unaudited)

Three Months Ended June 30, 2020 March 31, 2020 June 30, 2019 Average Interest Yield/ Average Interest Yield/ Average Interest Yield/ Balance (1) Cost Balance (1) Cost Balance (1) Cost (1)(6) (1)(6) (1)(6) (Dollars in thousands)Assets: Interest-earning assets: Loans (2) $ 5,722,186 $ 62,164 4.37 % $ 5,741,852 $ 64,758 4.54 % $ 5,809,827 $ 64,740 4.47 %Securities and 33,282 262 3.17 29,290 211 2.90 36,447 312 3.43 certificates of depositOther interest-earning 478,725 473 0.40 400,315 1,786 1.79 290,092 1,943 2.69 assets (3)Total interest-earning 6,234,193 62,899 4.06 6,171,457 66,755 4.35 6,136,366 66,995 4.38 assetsNoninterest-earning 153,567 157,398 136,159 assetsTotal assets $ 6,387,760 $ 6,328,855 $ 6,272,525 Liabilities and stockholders' equity:Interest-bearing liabilities:Interest-bearing demand $ 1,297,072 $ 2,293 0.71 $ 1,280,003 $ 4,497 1.41 $ 1,215,832 $ 5,584 1.84 depositsMoney market deposits 722,148 1,227 0.68 691,897 2,055 1.19 674,851 2,158 1.28 Regular savings and other 841,600 995 0.48 906,100 2,531 1.12 954,811 3,961 1.66 depositsCertificates of deposit 1,331,999 6,076 1.83 1,475,016 7,686 2.10 1,660,373 8,950 2.16 Total interest-bearing 4,192,819 10,591 1.02 4,353,016 16,769 1.55 4,505,867 20,653 1.84 depositsBorrowings 754,426 4,188 2.23 654,740 4,151 2.55 532,449 3,151 2.37 Total interest-bearing 4,947,245 14,779 1.20 5,007,756 20,920 1.68 5,038,316 23,804 1.90 liabilitiesNoninterest-bearing 651,517 535,182 495,090 demand depositsOther noninterest-bearing 57,922 53,688 45,506 liabilitiesTotal liabilities 5,656,684 5,596,626 5,578,912 Total stockholders' 731,076 732,229 693,613 equityTotal liabilities and $ 6,387,760 $ 6,328,855 $ 6,272,525 stockholders' equityNet interest-earning $ 1,286,948 $ 1,163,701 $ 1,098,050 assetsFully tax-equivalent net 48,120 45,835 43,191 interest incomeLess: tax-equivalent (749 ) (737 ) (721 ) adjustmentsNet interest income $ 47,371 $ 45,098 $ 42,470 Interest rate spread (1) 2.86 % 2.67 % 2.48 %(4)Net interest margin (1) 3.10 % 2.99 % 2.82 %(5)Average interest-earningassets to average 126.01 % 123.24 % 121.79 % interest-bearingliabilities Supplemental Information: Total deposits, includingnoninterest-bearing $ 4,844,336 $ 10,591 0.88 % $ 4,888,198 $ 16,769 1.38 % $ 5,000,957 $ 20,653 1.66 %demand depositsTotal deposits andborrowings, including $ 5,598,762 $ 14,779 1.06 % $ 5,542,938 $ 20,920 1.52 % $ 5,533,406 $ 23,804 1.73 %noninterest-bearingdemand deposits

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Income on debt securities, equity securities and revenue bonds included in commercial real estate loans, as well as resulting yields, interest rate spread and net interest margin, are presented on a tax-equivalent basis. The tax-equivalent adjustments are deducted from tax-equivalent net interest income to agree to amounts reported in the consolidated statements of net income. For the three months ended June 30, 2020, March 31, 2020 and June 30, 2019, yields on loans before tax-equivalent adjustments were 4.32%, 4.49% and 4.42%, respectively,(1) yields on securities and certificates of deposit before tax-equivalent adjustments were 2.80%, 2.68% and 3.20%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 4.01%, 4.30% and 4.33%, respectively. Interest rate spread before tax-equivalent adjustments for the three months ended June 30, 2020, March 31, 2020 and June 30, 2019 was 2.81%, 2.62% and 2.43%, respectively, while net interest margin before tax-equivalent adjustments for the three months ended June 30, 2020, March 31, 2020 and June 30, 2019 was 3.06%, 2.94% and 2.78%, respectively.(2) Loans on non-accrual status are included in average balances.(3) Includes Federal Home Loan Bank stock and associated dividends. Interest rate spread represents the difference between the(4) tax-equivalent yield on interest-earning assets and the cost of interest-bearing liabilities.(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.(6) Annualized.



MERIDIAN BANCORP, INC. AND SUBSIDIARIESNET INTEREST INCOME ANALYSIS(Unaudited)

Six Months Ended June 30, 2020 June 30, 2019 Average Yield/ Average Yield/ Balance Interest(1) Cost (1) Balance Interest(1) Cost (1) (6) (6) (Dollars in thousands)Assets: Interest-earning assets:Loans (2) $ 5,732,019 $ 126,922 4.45 % $ 5,752,551 $ 127,065 4.45 %Securities andcertificates of 29,170 464 3.20 36,478 584 3.23 depositOtherinterest-earning 439,520 2,259 1.03 321,472 4,520 2.84 assets (3)Totalinterest-earning 6,200,709 129,645 4.20 6,110,501 132,169 4.36 assetsNoninterest-earning 157,599 127,095 assetsTotal assets $ 6,358,308 $ 6,237,596 Liabilities andstockholders' equity:Interest-bearing liabilities:Interest-bearing $ 1,288,538 $ 6,790 1.06 $ 1,202,572 $ 10,524 1.76 demand depositsMoney market 707,022 3,281 0.93 687,260 4,306 1.26 depositsRegular savings and 873,850 3,527 0.81 937,789 7,763 1.67 other depositsCertificates of 1,403,507 13,762 1.97 1,641,012 17,211 2.11 depositTotalinterest-bearing 4,272,917 27,360 1.29 4,468,633 39,804 1.80 depositsBorrowings 704,583 8,339 2.38 555,076 5,876 2.13 Totalinterest-bearing 4,977,500 35,699 1.44 5,023,709 45,680 1.83 liabilitiesNoninterest-bearing 593,350 488,897 demand depositsOthernoninterest-bearing 55,805 37,324 liabilitiesTotal liabilities 5,626,655 5,549,930 Total stockholders' 731,653 687,666 equityTotal liabilitiesand stockholders' $ 6,358,308 $ 6,237,596 equityNetinterest-earning $ 1,223,209 $ 1,086,792 assetsFullytax-equivalent net 93,946 86,489 interest incomeLess:tax-equivalent (1,477 ) (1,422 ) adjustmentsNet interest income $ 92,469 $ 85,067 Interest rate 2.76 % 2.53 %spread (1)(4)Net interest margin 3.05 % 2.85 %(1)(5)Averageinterest-earningassets to average 124.57 % 121.63 % interest-bearingliabilities Supplemental Information:Total deposits,including $ 4,866,267 $ 27,360 1.13 % $ 4,957,530 $ 39,804 1.62 %noninterest-bearingdemand depositsTotal deposits andborrowings,including $ 5,570,850 $ 35,699 1.29 % $ 5,512,606 $ 45,680 1.67 %noninterest-bearingdemand deposits

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Income on debt securities, equity securities and revenue bonds included in commercial real estate loans, as well as resulting yields, interest rate spread and net interest margin, are presented on a tax-equivalent basis. The tax-equivalent adjustments are deducted from tax-equivalent net interest income to agree to amounts reported in the consolidated statements of net income. For the six months ended, June 30, 2020 and 2019, yields on loans before tax-equivalent adjustments were 4.40% and(1) 4.41%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 2.94% and 3.02%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 4.16%, and 4.31%, respectively. Interest rate spread before tax-equivalent adjustments for the six months ended June 30, 2020 and 2019 was 2.72%, and 2.48%, respectively, while net interest margin before tax-equivalent adjustments for the six months ended, June 30, 2020 and 2019 was 3.00% and 2.81%, respectively.(2) Loans on non-accrual status are included in average balances.(3) Includes Federal Home Loan Bank stock and associated dividends. Interest rate spread represents the difference between the(4) tax-equivalent yield on interest-earning assets and the cost of interest-bearing liabilities.(5) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets.(6) Annualized.

MERIDIAN BANCORP, INC. AND SUBSIDIARIESSELECTED FINANCIAL HIGHLIGHTS(Unaudited)

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2020 2019 2020 2019KeyPerformance RatiosReturn onaverage 1.08 % 0.82 % 0.97 % 0.95 % 0.97 %assets (1)Return onaverage 9.45 7.09 8.75 8.27 8.79 equity (1)Interestrate 2.86 2.67 2.48 2.76 2.53 spread (1)(2)Net interestmargin (1) 3.10 2.99 2.82 3.05 2.85 (3)Non-interestexpense to 1.46 1.66 1.60 1.56 1.63 averageassets (1)Efficiency 46.79 54.18 55.57 50.44 56.38 ratio (4)

June 30, March 31, December 31, June 30, 2020 2020 2019 2019 (Dollars in thousands)Asset Quality Non-accrual loans: One- to four-family $ 3,074 $ 2,846 $ 3,082 $ 5,378 Home equity lines 20 20 ? ? of creditCommercial real 194 ? ? 318 estateCommercial and 532 323 323 350 industrialTotal non-accrual 3,820 3,189 3,405 6,046 loansForeclosed assets ? ? ? ? Totalnon-performing $ 3,820 $ 3,189 $ 3,405 $ 6,046 assets Allowance for loan 1.06 % 0.89 % 0.87 % 0.92 %losses/total loansAllowance for loanlosses/non-accrual 1,585.00 1,597.55 1,477.89 890.92 loansNon-accrual loans/ 0.07 0.06 0.06 0.10 total loansNon-accrual loans/ 0.06 0.05 0.05 0.09 total assetsNon-performing 0.06 0.05 0.05 0.09 assets/total assets Capital and Share RelatedStockholders'equity to total 11.44 % 11.34 % 11.45 % 10.92 %assetsBook value per $ 14.01 $ 13.73 $ 13.61 $ 13.05 shareTangible book value $ 13.59 $ 13.31 $ 13.19 $ 12.62 per share (5)Market value per $ 11.60 $ 11.22 $ 20.09 $ 17.89 shareShares outstanding 52,407,179 52,402,395 53,377,506 53,321,805

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(1) Quarterly amounts are annualized. Interest rate spread represents the difference between the tax-equivalent(2) yield on interest-earning assets and the cost of interest-bearing liabilities.(3) Net interest margin represents net interest income (tax-equivalent basis) divided by average interest-earning assets. The efficiency ratio is a non-GAAP measure representing non-interest expense divided by the sum of net interest income and non-interest income excluding gains and losses on marketable equity securities and gains and losses on sale of assets. The efficiency ratio is a common measure used by banks to understand expenses related to the generation of revenue. We have removed gains and losses on marketable equity securities and gains(4) and losses on sale of assets as management deems them to be either discretionary or market driven and not representative of operating performance. Presented on a basis including gains and losses on marketable equity securities and gains and losses on sale of assets the efficiency ratio was 41.59%, 59.46% and 55.29% for the quarters ended June 30, 2020, March 31, 2020, and June 30, 2019, respectively and 49.47% and 55.43% for the six months ended June 30, 2020 and 2019, respectively. Tangible book value per share represents total stockholders? equity less(5) goodwill and other intangible assets divided by the number of shares outstanding.