ý
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Massachusetts
|
20-4652200
|
(State
or other jurisdiction of incorporation or
|
(I.R.S.
Employer Identification No.)
|
organization)
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Page
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24
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25
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June
30,
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December
31,
|
|||||||
(Dollars
in thousands)
|
2008
|
2007
|
||||||
ASSETS
|
||||||||
Cash
and due from banks
|
$ | 11,956 | $ | 11,821 | ||||
Federal
funds sold
|
31,594 | 91,272 | ||||||
Total
cash and cash equivalents
|
43,550 | 103,093 | ||||||
Certificates
of deposit
|
7,000 | - | ||||||
Securities
available for sale, at fair value
|
341,070 | 267,058 | ||||||
Federal
Home Loan Bank stock, at cost
|
4,303 | 3,165 | ||||||
Loans
|
622,079 | 571,741 | ||||||
Less
allowance for loan losses
|
(5,961 | ) | (3,637 | ) | ||||
Loans,
net
|
616,118 | 568,104 | ||||||
Bank-owned
life insurance
|
22,418 | 18,003 | ||||||
Investment
in affiliate bank
|
10,518 | 10,772 | ||||||
Premises
and equipment, net
|
22,432 | 22,816 | ||||||
Accrued
interest receivable
|
6,174 | 5,764 | ||||||
Other
assets
|
5,675 | 4,451 | ||||||
Total
assets
|
$ | 1,079,258 | $ | 1,003,226 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Deposits:
|
||||||||
Non
interest-bearing
|
$ | 55,777 | $ | 51,396 | ||||
Interest-bearing
|
747,044 | 723,050 | ||||||
Total
deposits
|
802,821 | 774,446 | ||||||
Stock
subscriptions
|
- | 62,518 | ||||||
Short-term
borrowings
|
- | 9,154 | ||||||
Long-term
debt
|
62,823 | 27,373 | ||||||
Accrued
expenses and other liabilities
|
14,805 | 14,051 | ||||||
Total
liabilities
|
880,449 | 887,542 | ||||||
Stockholders'
equity:
|
||||||||
Common
stock, no par value 50,000,000 shares
|
||||||||
authorized;
23,000,000 and 0 shares issued and
|
||||||||
outstanding
at June 30, 2008 and December 31, 2007
|
- | - | ||||||
Additional
paid-in capital
|
100,630 | - | ||||||
Retained
earnings
|
104,998 | 109,177 | ||||||
Accumulated
other comprehensive income
|
1,254 | 6,507 | ||||||
Unearned
compensation - ESOP 807,300
|
||||||||
shares
and 0 shares at June 30, 2008
|
||||||||
and
December 31, 2007, respectively
|
(8,073 | ) | - | |||||
Total
stockholders' equity
|
198,809 | 115,684 | ||||||
Total
liabilities and stockholders' equity
|
$ | 1,079,258 | $ | 1,003,226 |
Three
Months Ended June 30,
|
Six
Months Ended June 30,
|
|||||||||||||||
(Dollars
in thousands, except per share amounts)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Interest
and dividend income:
|
||||||||||||||||
Interest
and fees on loans
|
$ | 9,334 | $ | 8,815 | $ | 18,517 | $ | 17,487 | ||||||||
Interest
on debt securities
|
2,633 | 2,792 | 5,245 | 5,549 | ||||||||||||
Dividends
on equity securities
|
434 | 265 | 691 | 544 | ||||||||||||
Interest
on certificates of deposit
|
30 | - | 38 | - | ||||||||||||
Interest
on federal funds sold
|
478 | 208 | 1,541 | 395 | ||||||||||||
Total
interest and dividend income
|
12,909 | 12,080 | 26,032 | 23,975 | ||||||||||||
Interest
expense:
|
||||||||||||||||
Interest
on deposits
|
6,426 | 6,307 | 13,337 | 12,423 | ||||||||||||
Interest
on short-term borrowings
|
53 | 102 | 115 | 191 | ||||||||||||
Interest
on long-term debt
|
517 | 391 | 829 | 778 | ||||||||||||
Total
interest expense
|
6,996 | 6,800 | 14,281 | 13,392 | ||||||||||||
Net
interest income
|
5,913 | 5,280 | 11,751 | 10,583 | ||||||||||||
Provision
for loan losses
|
2,197 | 71 | 2,328 | 143 | ||||||||||||
Net
interest income, after provision
|
||||||||||||||||
for
loan losses
|
3,716 | 5,209 | 9,423 | 10,440 | ||||||||||||
Non-interest
income:
|
||||||||||||||||
Customer
service fees
|
697 | 710 | 1,355 | 1,312 | ||||||||||||
Loan
fees
|
154 | 128 | 370 | 334 | ||||||||||||
Gain
on sales of loans, net
|
8 | 8 | 27 | 25 | ||||||||||||
Gain
on sales of securities, net
|
47 | - | 2,313 | 2,032 | ||||||||||||
Income
from bank-owned life insurance
|
230 | 535 | 415 | 697 | ||||||||||||
Equity
loss on investment in affiliate bank
|
(86 | ) | (128 | ) | (254 | ) | (211 | ) | ||||||||
Total
non-interest income
|
1,050 | 1,253 | 4,226 | 4,189 | ||||||||||||
Non-interest
expenses:
|
||||||||||||||||
Salaries
and employee benefits
|
5,762 | 3,414 | 9,784 | 7,086 | ||||||||||||
Occupancy
and equipment
|
699 | 622 | 1,479 | 1,324 | ||||||||||||
Data
processing
|
406 | 369 | 793 | 732 | ||||||||||||
Marketing
|
293 | 203 | 539 | 343 | ||||||||||||
Professional
services
|
623 | 240 | 967 | 459 | ||||||||||||
Contribution to the Meridian
|
||||||||||||||||
Charitable
Foundation
|
- | - | 3,000 | - | ||||||||||||
Other
general and administrative
|
693 | 389 | 1,226 | 829 | ||||||||||||
Total
non-interest expenses
|
8,476 | 5,237 | 17,788 | 10,773 | ||||||||||||
Income
(loss) before income taxes
|
(3,710 | ) | 1,225 | (4,139 | ) | 3,856 | ||||||||||
Provision
(benefit) for income taxes
|
(1,494 | ) | 429 | (1,602 | ) | 1,265 | ||||||||||
Net
income (loss)
|
$ | (2,216 | ) | $ | 796 | $ | (2,537 | ) | $ | 2,591 | ||||||
Loss
per share:
|
||||||||||||||||
Basic
|
$ | (0.10 | ) | N/A | N/A | N/A | ||||||||||
Diluted
|
$ | (0.10 | ) | N/A | N/A | N/A | ||||||||||
Weighted
Average Shares:
|
||||||||||||||||
Basic
|
22,185,914 | N/A | N/A | N/A | ||||||||||||
Diluted
|
22,185,914 | N/A | N/A | N/A |
(Dollars
in thousands)
|
Shares
of
Common Stock |
Common
Stock |
Additional
Paid-in Capital |
Retained
Earnings |
Accumulated
Other Comprehensive Income |
Unearned
Compensation ESOP |
Total
|
|||||||||||||||||||||
Six
months ended June 30, 2007
|
||||||||||||||||||||||||||||
Balance
at December 31, 2006
|
- | $ | - | $ | - | $ | 106,911 | $ | 3,364 | $ | - | $ | 110,275 | |||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
- | - | - | 2,591 | - | - | 2,591 | |||||||||||||||||||||
Change
in net unrealized gain on securities available for
|
||||||||||||||||||||||||||||
sale,
net of reclassification adjustment and tax effects
|
- | - | - | - | (164 | ) | - | (164 | ) | |||||||||||||||||||
Total
comprehensive income
|
2,427 | |||||||||||||||||||||||||||
Balance
at June 30, 2007
|
- | $ | - | $ | - | $ | 109,502 | $ | 3,200 | $ | - | $ | 112,702 | |||||||||||||||
Six
months ended June 30, 2008
|
||||||||||||||||||||||||||||
Balance
at December 31, 2007
|
- | $ | - | $ | - | $ | 109,177 | $ | 6,507 | $ | - | $ | 115,684 | |||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||
Net
loss
|
- | - | - | (2,537 | ) | - | - | (2,537 | ) | |||||||||||||||||||
Change
in net unrealized gain on securities available for
|
||||||||||||||||||||||||||||
sale,
net of reclassification adjustment and tax effects
|
- | - | - | - | (4,909 | ) | - | (4,909 | ) | |||||||||||||||||||
Amortization
of prior service cost, net of tax effects
|
- | - | - | - | 9 | - | 9 | |||||||||||||||||||||
Total
comprehensive loss
|
(7,437 | ) | ||||||||||||||||||||||||||
Adjustment
to initially apply EITF 06-4
|
- | - | - | (1,642 | ) | - | - | (1,642 | ) | |||||||||||||||||||
Adjustment
to initially apply FAS 158 for long-term health care
plan
|
- | - | - | - | (353 | ) | - | (353 | ) | |||||||||||||||||||
Issuance
of 12,650,000 shares to the mutual holding company
|
12,650,000 | - | - | - | - | - | - | |||||||||||||||||||||
Issuance
of 10,050,000 shares in the initial public
|
||||||||||||||||||||||||||||
offering,
net of expenses of $2,867
|
10,050,000 | - | 97,633 | - | - | - | 97,633 | |||||||||||||||||||||
Contribution
of common stock to the Meridian Charitable Foundation,
Inc.
|
300,000 | - | 3,000 | - | - | - | 3,000 | |||||||||||||||||||||
Purchase
of common stock by the ESOP
|
- | - | - | - | - | (8,280 | ) | (8,280 | ) | |||||||||||||||||||
Unallocated
ESOP shares earned (20,700 shares)
|
- | - | (3 | ) | - | - | 207 | 204 | ||||||||||||||||||||
Balance
at June 30, 2008
|
23,000,000 | $ | - | $ | 100,630 | $ | 104,998 | $ | 1,254 | $ | (8,073 | ) | $ | 198,809 |
Six
Months Ended June 30,
|
||||||||
(In
thousands)
|
2008
|
2007
|
||||||
Cash
flows from operating activities:
|
||||||||
Net
income (loss)
|
$ | (2,537 | ) | $ | 2,591 | |||
Adjustments
to reconcile net income (loss) to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Contribution
of stock to charitable foundation
|
3,000 | - | ||||||
Earned
ESOP shares
|
204 | - | ||||||
Provision
for loan losses
|
2,328 | 143 | ||||||
Amortization
of net deferred loan origination fees
|
(146 | ) | (270 | ) | ||||
Net
amortization of securities available for sale
|
544 | 408 | ||||||
Depreciation
and amortization expense
|
642 | 574 | ||||||
Gain
on sales of securities, net
|
(2,313 | ) | (2,032 | ) | ||||
Loss
on sale of foreclosed real estate
|
5 | - | ||||||
Deferred
income tax benefit
|
(1,338 | ) | (110 | ) | ||||
Income
from bank-owned life insurance
|
(415 | ) | (697 | ) | ||||
Equity
loss on investment in affiliate bank
|
254 | 211 | ||||||
Net
changes in:
|
||||||||
Accrued
interest receivable
|
(410 | ) | (17 | ) | ||||
Other
assets
|
3,087 | 471 | ||||||
Accrued
expenses and other liabilities
|
(1,227 | ) | 557 | |||||
Net
cash provided by operating activities
|
1,678 | 1,829 | ||||||
Cash
flows from investing activities:
|
||||||||
Purchases
of certificates of deposit
|
(7,000 | ) | - | |||||
Activity
in securities available for sale:
|
||||||||
Proceeds
from maturities, calls and principal payments
|
61,207 | 67,364 | ||||||
Proceeds
from sales
|
9,804 | 4,290 | ||||||
Purchases
|
(151,701 | ) | (60,583 | ) | ||||
(Purchase)
redemption of Federal Home Loan Bank stock
|
(1,138 | ) | 206 | |||||
Loans
originated, net of principal payments received
|
(51,104 | ) | (14,543 | ) | ||||
Purchase
of bank-owned life insurance
|
(4,000 | ) | - | |||||
Proceeds
from bank-owned life insurance
|
- | 1,793 | ||||||
Purchases
of premises and equipment
|
(258 | ) | (3,249 | ) | ||||
Proceeds
from sales of foreclosed real estate
|
1,463 | - | ||||||
Net
cash used in investing activities
|
(142,727 | ) | (4,722 | ) |
Six
Months Ended June 30,
|
||||||||
(In
thousands)
|
2008
|
2007
|
||||||
Cash
flows from financing activities:
|
||||||||
Net
increase in deposits
|
28,375 | 8,624 | ||||||
Proceeds
from sale of common stock
|
97,633 | - | ||||||
Common
stock purchased by ESOP
|
(8,280 | ) | - | |||||
Decrease
in stock subscriptions
|
(62,518 | ) | - | |||||
Net
change in Federal Home Loan Bank advances
|
||||||||
with
maturities of less than three months
|
(9,154 | ) | 238 | |||||
Proceeds
from Federal Home Loan Bank advances
|
||||||||
with
maturities of three months or more
|
45,000 | - | ||||||
Repayment
of Federal Home Loan Bank advances
|
||||||||
with
maturities of three months or more
|
(9,550 | ) | (1,570 | ) | ||||
Net
cash provided by financing activities
|
81,506 | 7,292 | ||||||
Net
change in cash and cash equivalents
|
(59,543 | ) | 4,399 | |||||
Cash
and cash equivalents at beginning of period
|
103,093 | 23,494 | ||||||
Cash
and cash equivalents at end of period
|
$ | 43,550 | $ | 27,893 | ||||
Supplemental
cash flow information:
|
||||||||
Interest
paid on deposits
|
13,472 | 12,454 | ||||||
Interest
paid on borrowings
|
843 | 974 | ||||||
Income
taxes paid
|
60 | 87 | ||||||
Non-cash
investing and financing activities:
|
||||||||
Transfers
from loans to foreclosed real estate
|
908 | - |
1.
|
Basis
of Presentation
|
2.
|
Stock
Offering
|
3.
|
Recent
Accounting Pronouncements
|
4.
|
Fair
Value Measurement
|
Assets
at Fair Value
|
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level
1)
|
Significant
Other
Observable
Inputs
(Level
2)
|
|||||||||
(In
thousands)
|
|||||||||||
Securities
available for sale
|
$
|
341,070
|
$
|
89,481
|
$
|
251,589
|
Assets
at Fair Value
|
Significant
Unobservable
Inputs
(Level
3)
|
Total
Gains
(Losses)
|
|||||||||
(In
thousands)
|
|||||||||||
Impaired
loans (1)
|
$
|
3,310
|
$
|
3,310
|
$
|
(1,069)
|
5.
|
Employee
Benefits
|
|
The
following is a summary of operating and financial condition highlights as
of and for the periods indicated:
|
Financial
Condition At
|
||||||||
June
30,
|
December
31,
|
|||||||
(In
thousands)
|
2008
|
2007
|
||||||
Total
assets
|
$ | 1,079,258 | $ | 1,003,226 | ||||
Secuities
available for sale
|
341,070 | 267,058 | ||||||
Net
loans
|
616,118 | 568,104 | ||||||
Deposits
|
802,821 | 774,446 | ||||||
Borrowed
funds
|
62,823 | 36,527 | ||||||
Stockholders'
equity
|
198,809 | 115,684 |
Six
Months Ended
|
||||||||
June
30,
|
||||||||
(Dollars
in thousands)
|
2008
|
2007
|
||||||
Net
interest income
|
$ | 11,751 | $ | 10,583 | ||||
Provision
for loan losses
|
2,328 | 143 | ||||||
Non-interest
income
|
4,226 | 4,189 | ||||||
Non-interest
expenses
|
17,788 | 10,773 | ||||||
Provision
(benefit) for income taxes
|
(1,602 | ) | 1,265 | |||||
Net
income (loss)
|
(2,537 | ) | 2,591 | |||||
Interest
rate spread
|
1.70 | % | 2.07 | % | ||||
Net
interest margin
|
2.35 | % | 2.54 | % |
At
June 30, 2008
|
At
December 31, 2007
|
|||||||||||||||
|
Amortized
|
Fair
|
Amortized
|
Fair
|
||||||||||||
(In
thousands)
|
Cost
|
Value
|
Cost
|
Value
|
||||||||||||
Securities
available for sale:
|
||||||||||||||||
U.S.
Government – sponsored enterprises
|
$ | 40,466 | $ | 40,430 | $ | 7,002 | $ | 6,975 | ||||||||
Corporate
bonds
|
212,300 | 211,117 | 219,626 | 220,629 | ||||||||||||
Mortgage-backed
securities
|
42 | 42 | 43 | 43 | ||||||||||||
Total
debt securities
|
252,808 | 251,589 | 226,671 | 227,647 | ||||||||||||
Marketable
equity securities
|
85,161 | 89,481 | 28,843 | 39,411 | ||||||||||||
Total
securities available for sale
|
$ | 337,969 | $ | 341,070 | $ | 255,514 | $ | 267,058 |
At
June 30, 2008
|
At
December 31, 2007
|
|||||||||||||||
(Dollars
in thousands)
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Real
estate loans:
|
||||||||||||||||
One-to
four-family
|
$ | 254,492 | 40.8 | % | $ | 224,109 | 39.1 | % | ||||||||
Multi-family
|
29,045 | 4.8 | 26,855 | 4.7 | ||||||||||||
Commercial
real estate
|
200,064 | 32.1 | 175,072 | 30.5 | ||||||||||||
Construction
|
99,900 | 16.0 | 111,796 | 19.5 | ||||||||||||
Home
equity lines
|
||||||||||||||||
of
credit
|
24,576 | 3.9 | 21,541 | 3.8 | ||||||||||||
Total
real estate loans
|
608,077 | 97.6 | 559,373 | 97.6 | ||||||||||||
Commercial
business loans
|
13,603 | 2.2 | 11,859 | 2.1 | ||||||||||||
Consumer
loans
|
1,444 | 0.2 | 1,576 | 0.3 | ||||||||||||
Total
loans
|
623,124 | 100.0 | % | 572,808 | 100.0 | % | ||||||||||
Net
deferred origination fees
|
(1,045 | ) | (1,067 | ) | ||||||||||||
Allowance
for loan losses
|
(5,961 | ) | (3,637 | ) | ||||||||||||
Loans,
net
|
$ | 616,118 | $ | 568,104 |
Six
Months Ended June 30,
|
||||||||
(Dollars
in thousands)
|
2008
|
2007
|
||||||
Beginning
balance
|
$ | 3,637 | $ | 3,362 | ||||
Provision
for loan losses
|
2,328 | 143 | ||||||
Charge
offs:
|
||||||||
Real
estate loans
|
5 | 16 | ||||||
Commercial
business loans
|
- | - | ||||||
Consumer
loans
|
- | 61 | ||||||
Total
charge-offs
|
5 | 77 | ||||||
Recoveries:
|
||||||||
Real
estate loans
|
1 | 16 | ||||||
Commercial
business loans
|
- | - | ||||||
Consumer
loans
|
- | 59 | ||||||
Total
recoveries
|
1 | 75 | ||||||
Net
charge-offs
|
(4 | ) | (2 | ) | ||||
Ending
balance
|
$ | 5,961 | $ | 3,503 | ||||
Allowance
to non-accrual loans
|
78.64 | % | 49.95 | % | ||||
Allowance
to total loans outstanding
|
0.96 | % | 0.64 | % | ||||
Net
charge-offs/average loans outstanding
|
0.00 | % | 0.00 | % |
At
June 30,
|
At
December 31,
|
|||||||
(In
thousands)
|
2008
|
2007
|
||||||
Loans
accounted for on a non-accrual basis:
|
||||||||
Real
estate loans:
|
||||||||
One-to
four-family
|
$ | 1,465 | $ | 2,059 | ||||
Multi-family
|
- | - | ||||||
Commercial
real estate
|
2,986 | 1,561 | ||||||
Home
equity lines of credit
|
- | 98 | ||||||
Construction
|
3,124 | 1,218 | ||||||
Total
real estate loans
|
7,575 | 4,936 | ||||||
Commercial
business loans
|
- | 45 | ||||||
Consumer
loans
|
5 | 1 | ||||||
Total
non-accrual loans
|
7,580 | 4,982 | ||||||
Foreclosed
assets
|
- | 560 | ||||||
Total
nonperforming assets
|
$ | 7,580 | $ | 5,542 | ||||
Non-accrual
loans to total loans
|
1.22 | % | 0.87 | % | ||||
Non-accrual
loans to total assets
|
0.70 | % | 0.50 | % | ||||
Non-performing
assets to total assets
|
0.70 | % | 0.55 | % |
At
June 30, 2008
|
At
December 31, 2007
|
|||||||||||||||
(Dollars
in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
NOW
and demand deposits
|
$ | 96,117 | 12.0 |
%
|
$ | 85,045 | 11.0 | % | ||||||||
Money
market deposits
|
144,571 | 18.0 | 138,688 | 17.9 | ||||||||||||
Regular
and other deposits
|
121,071 | 15.1 | 118,837 | 15.3 | ||||||||||||
Certificates
of deposit
|
441,062 | 54.9 | 431,876 | 55.8 | ||||||||||||
Total
|
$ | 802,821 | 100.0 | % | $ | 774,446 | 100.0 | % |
MERIDIAN
INTERSTATE BANCORP, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||
Net
Interest Income Analysis
|
||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||
For
The Three Months Ended June 30,
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
(Dollars
in thousands)
|
Average
Balance
|
Interest
Earned/Paid |
Yield/
Cost (4) |
Average
Balance |
Interest
Earned/Paid |
Yield/
Cost (4) |
||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans
(1)
|
$ | 604,227 | $ | 9,334 | 6.21 | % | $ | 538,720 | $ | 8,815 | 6.56 | % | ||||||||||||
Securities
and certificates of deposit
|
310,094 | 3,097 | 4.02 | 278,410 | 3,057 | 4.40 | ||||||||||||||||||
Other
interest-earning assets
|
96,801 | 478 | 1.99 | 16,076 | 208 | 5.19 | ||||||||||||||||||
Total
interest-earning assets
|
1,011,122 | 12,909 | 5.13 | 833,206 | 12,080 | 5.82 | ||||||||||||||||||
Noninterest-earning
assets
|
76,288 | 68,230 | ||||||||||||||||||||||
Total
assets
|
$ | 1,087,410 | $ | 901,436 | ||||||||||||||||||||
Liabilities
and stockholders' equity:
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
NOW deposits
|
$ | 39,530 | 79 | 0.80 | $ | 34,289 | 33 | 0.39 | ||||||||||||||||
Money
market deposits
|
143,566 | 885 | 2.48 | 103,936 | 891 | 3.44 | ||||||||||||||||||
Savings
and other deposits
|
123,801 | 351 | 1.14 | 132,958 | 380 | 1.15 | ||||||||||||||||||
Certificates
of deposit
|
448,618 | 5,111 | 4.58 | 414,495 | 5,003 | 4.84 | ||||||||||||||||||
Total
interest-bearing deposits
|
755,515 | 6,426 | 3.42 | 685,678 | 6,307 | 3.69 | ||||||||||||||||||
FHLB
advances
|
64,070 | 570 | 3.58 | 41,263 | 493 | 4.79 | ||||||||||||||||||
Total
interest-bearing liabilities
|
819,585 | 6,996 | 3.43 | 726,941 | 6,800 | 3.75 | ||||||||||||||||||
Non-interest-bearing
demand deposits
|
55,299 | 53,890 | ||||||||||||||||||||||
Other
non-interest-bearing liabilities
|
9,647 | 7,598 | ||||||||||||||||||||||
Total
liabilities
|
884,531 | 788,429 | ||||||||||||||||||||||
Total
stockholders' equity
|
202,879 | 113,007 | ||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 1,087,410 | $ | 901,436 | ||||||||||||||||||||
Net
interest income
|
$ | 5,913 | $ | 5,280 | ||||||||||||||||||||
Interest
rate spread (2)
|
1.70 | % | 2.07 | % | ||||||||||||||||||||
Net
interest margin (3)
|
2.35 | % | 2.54 | % | ||||||||||||||||||||
Average
interest-earning assets to average interest-bearing
liabilities
|
123.37 | % | 114.62 | % |
(1)
Loans on non accrual status are included in average
balances.
|
|||||||
(2)
Interest rate spread represents the difference betweent the yield on
interest-earning assets and the cost of interest-bearing
liabilities.
|
|||||||
(3)
Net interest margin represents net interest income divided by average
interest-earning assets.
|
|||||||
(4)
Annualized.
|
MERIDIAN
INTERSTATE BANCORP, INC. AND SUBSIDIARIES
|
||||||||||||||||||||||||
Net
Interest Income Analysis
|
||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||
For
The Six Months Ended June 30,
|
||||||||||||||||||||||||
2008
|
2007
|
|||||||||||||||||||||||
(Dollars
in thousands)
|
Average
Balance |
Interest
Earned/Paid |
Yield/
Cost (4) |
Average
Balance |
Interest
Earned/Paid |
Yield/
Cost (4) |
||||||||||||||||||
Assets:
|
||||||||||||||||||||||||
Interest-earning
assets:
|
||||||||||||||||||||||||
Loans
(1)
|
$ | 585,481 | $ | 18,517 | 6.36 | % | $ | 538,719 | $ | 17,487 | 6.49 | % | ||||||||||||
Securities
and certificates of deposit
|
285,088 | 5,974 | 4.21 | 279,757 | 6,093 | 4.36 | ||||||||||||||||||
Other
interest-earning assets
|
117,636 | 1,541 | 2.63 | 15,214 | 395 | 5.23 | ||||||||||||||||||
Total
interest-earning assets
|
988,205 | 26,032 | 5.30 | 833,690 | 23,975 | 5.75 | ||||||||||||||||||
Noninterest-earning
assets
|
75,438 | 65,911 | ||||||||||||||||||||||
Total
assets
|
$ | 1,063,643 | $ | 899,601 | ||||||||||||||||||||
Liabilities
and stockholders' equity:
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
NOW deposits
|
$ | 37,225 | 147 | 0.79 | $ | 64,040 | 47 | 0.15 | ||||||||||||||||
Money
market deposits
|
141,844 | 2,038 | 2.89 | 101,208 | 1,709 | 3.40 | ||||||||||||||||||
Savings
and other deposits
|
132,122 | 746 | 1.14 | 133,149 | 771 | 1.17 | ||||||||||||||||||
Certificates
of deposit
|
447,243 | 10,406 | 4.68 | 417,620 | 9,896 | 4.78 | ||||||||||||||||||
Total
interest-bearing deposits
|
758,434 | 13,337 | 3.54 | 716,017 | 12,423 | 3.50 | ||||||||||||||||||
FHLB
advances
|
49,992 | 944 | 3.80 | 40,823 | 969 | 4.79 | ||||||||||||||||||
Total
interest-bearing liabilities
|
808,426 | 14,281 | 3.55 | 756,840 | 13,392 | 3.57 | ||||||||||||||||||
Non-interest-bearing
demand deposits
|
53,550 | 23,851 | ||||||||||||||||||||||
Other
non-interest-bearing liabilities
|
9,215 | 7,002 | ||||||||||||||||||||||
Total
liabilities
|
871,191 | 787,693 | ||||||||||||||||||||||
Total
stockholders' equity
|
192,452 | 111,908 | ||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 1,063,643 | $ | 899,601 | ||||||||||||||||||||
Net
interest income
|
$ | 11,751 | $ | 10,583 | ||||||||||||||||||||
Interest
rate spread (2)
|
1.75 | % | 2.18 | % | ||||||||||||||||||||
Net
interest margin (3)
|
2.39 | % | 2.54 | % | ||||||||||||||||||||
Average
interest-earning assets toaverage interest-bearing
liabilities
|
122.24 | % | 110.15 | % |
(1)
Loans on non accrual status are included in average
balances.
|
|||||||
(2)
Interest rate spread represents the difference betweent 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.
|
|||||||
Increase
(Decrease)
|
||||||||||||||||||||||||||
in
Market Interest
|
Net
Interest Income
|
Net
Portfolio Value Estimate
|
||||||||||||||||||||||||
Rates
(Rate Shock)
|
Amount
|
Change
|
Percent
|
Amount
|
Change
|
Percent
|
||||||||||||||||||||
(Dollars
in thousands)
|
||||||||||||||||||||||||||
200 | $ | 38,609 | $ | 4,597 | 13.52 | % | $ | 148,280 | $ | (39,090 | ) | (20.86 | )% | |||||||||||||
100 | 36,451 | 2,439 | 7.17 | 168,823 | (18,547 | ) | (9.90 | ) | ||||||||||||||||||
0 | 34,012 | 187,370 | ||||||||||||||||||||||||
(100 | ) | 31,049 | (2,963 | ) | (8.71 | ) | 198,799 | 11,429 | 6.10 | |||||||||||||||||
(200 | ) | 27,449 | (6,563 | ) | (19.30 | ) | 204,731 | 17,361 | 9.27 |
(a)
|
Disclosure
Controls and Procedures
|
(b)
|
Internal
Control over Financial
Reporting
|
Item
6.
|
Exhibits
|
3.1
|
Amended
and Restated Articles of Organization of Meridian Interstate Bancorp,
Inc.*
|
3.2
|
Amended
and Restated Bylaws of Meridian Interstate Bancorp,
Inc.*
|
4
|
Form
of Common Stock Certificate of Meridian Interstate Bancorp,
Inc.*
|
10.1
|
Form
of East Boston Savings Bank Employee Stock Ownership
Plan*
|
10.2
|
Form
of East Boston Savings Bank Employee Stock Ownership Plan Trust
Agreement*
|
10.3
|
East
Boston Savings Bank Employee Stock Ownership Plan Loan Agreement, Pledge
Agreement and Promissory Note*
|
10.4
|
Form
of Amended and Restated Employment Agreement*
|
10.5
|
Form
of East Boston Savings Bank Employee Severance Compensation
Plan*
|
10.6
|
Form
of Supplemental Executive Retirement Agreements with certain
directors*
|
10.7
|
Form
of Separation Agreement with Robert F. Verdonck incorporated by reference
to the Form 8-K filed on June 11, 2008.
|
10.8
|
Form
of Amended and Restated Supplemental Executive Retirement Agreement with
Leonard V. Siuda filed as an exhibit to Form 10-Q filed on May 14,
2008.
|
10.9
|
Form
of Amended and Restated Supplemental Executive Retirement Agreement with
Philip F. Freehan filed as an exhibit to Form 10-Q filed on May 14,
2008.
|
10.10
|
Form
of Supplemental Executive Retirement Agreement with Richard J. Gavegnano
filed as an exhibit to Form 10-Q filed on May 14, 2008.
|
21
|
Subsidiaries
of Registrant*
|
Certification
of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
Certification
of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002
|
|
Certification
of Chief Executive Officer and Chief Financial Officer pursuant to Section
906 of the Sarbanes-Oxley Act of 2002
|
|
_______________________________
|
|
*
|
Incorporated
by reference to the Registration Statement on Form S-1 of Meridian
Interstate Bancorp, Inc. (File No. 333-146373), originally filed with the
Securities and Exchange Commission on September 28,
2007.
|
MERIDIAN INTERSTATE
BANCORP, INC.
|
|
(Registrant)
|
|
Dated: August
13, 2008
|
/s/
Richard J. Gavegnano
|
Richard
J. Gavegnano
|
|
Chairman
and Chief Executive Officer
|
|
(Principal
Executive Officer)
|
|
Dated: August
13, 2008
|
/s/
Leonard V. Siuda
|
Leonard
V. Siuda
|
|
Chief
Financial Officer and Treasurer
|
|
(Principal
Financial and Accounting Officer)
|