ý
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
o
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
Massachusetts
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20-4652200
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(State
or other jurisdiction of incorporation or
|
(I.R.S.
Employer Identification No.)
|
|
organization)
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Page
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3
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4
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6
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23
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24
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25
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25
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25
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25
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26
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27
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September
30,
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December
31,
|
|||||||
(Dollars
in thousands)
|
2008
|
2007
|
||||||
ASSETS
|
||||||||
Cash
and due from banks
|
$ | 15,934 | $ | 11,821 | ||||
Federal
funds sold
|
23,550 | 91,272 | ||||||
Total
cash and cash equivalents
|
39,484 | 103,093 | ||||||
Certificates
of deposit
|
7,000 | - | ||||||
Securities
available for sale, at fair value
|
288,941 | 267,058 | ||||||
Federal
Home Loan Bank stock, at cost
|
4,303 | 3,165 | ||||||
Loans
|
667,608 | 571,741 | ||||||
Less
allowance for loan losses
|
(5,718 | ) | (3,637 | ) | ||||
Loans,
net
|
661,890 | 568,104 | ||||||
Bank-owned
life insurance
|
22,627 | 18,003 | ||||||
Investment
in affiliate bank
|
10,449 | 10,772 | ||||||
Premises
and equipment, net
|
22,575 | 22,816 | ||||||
Accrued
interest receivable
|
5,627 | 5,764 | ||||||
Foreclosed
real estate
|
2,045 | 560 | ||||||
Other
assets
|
8,742 | 3,891 | ||||||
Total
assets
|
$ | 1,073,683 | $ | 1,003,226 | ||||
LIABILITIES
AND STOCKHOLDERS' EQUITY
|
||||||||
Deposits:
|
||||||||
Non
interest-bearing
|
$ | 56,805 | $ | 51,396 | ||||
Interest-bearing
|
748,279 | 723,050 | ||||||
Total
deposits
|
805,084 | 774,446 | ||||||
Stock
subscriptions
|
- | 62,518 | ||||||
Short-term
borrowings
|
- | 9,154 | ||||||
Long-term
debt
|
57,675 | 27,373 | ||||||
Accrued
expenses and other liabilities
|
15,870 | 14,051 | ||||||
Total
liabilities
|
878,629 | 887,542 | ||||||
Stockholders'
equity:
|
||||||||
Common
stock, no par value 50,000,000 shares authorized;
|
||||||||
23,000,000
and 0 shares issued and outstanding
|
||||||||
at
September 30, 2008 and December 31, 2007
|
- | - | ||||||
Additional
paid-in capital
|
100,628 | - | ||||||
Retained
earnings
|
107,141 | 109,177 | ||||||
Accumulated
other comprehensive income (loss)
|
(4,745 | ) | 6,507 | |||||
Unearned
compensation - ESOP, 796,950 shares and 0 shares
|
||||||||
at
September 30, 2008 and December 31, 2007, respectively
|
(7,970 | ) | - | |||||
Total
stockholders' equity
|
195,054 | 115,684 | ||||||
Total
liabilities and stockholders' equity
|
$ | 1,073,683 | $ | 1,003,226 |
Three
Months Ended
September 30, |
Nine
Months Ended
September 30, |
|||||||||||||||
(Dollars
in thousands, except share amounts)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Interest
and dividend income:
|
||||||||||||||||
Interest
and fees on loans
|
$ | 9,938 | $ | 9,073 | $ | 28,455 | $ | 26,560 | ||||||||
Interest
on debt securities
|
2,674 | 2,715 | 7,919 | 8,264 | ||||||||||||
Dividends
on equity securities
|
573 | 271 | 1,264 | 815 | ||||||||||||
Interest
on certificates of deposit
|
60 | - | 98 | - | ||||||||||||
Interest
on federal funds sold
|
99 | 331 | 1,640 | 726 | ||||||||||||
Total
interest and dividend income
|
13,344 | 12,390 | 39,376 | 36,365 | ||||||||||||
Interest
expense:
|
||||||||||||||||
Interest
on deposits
|
6,045 | 6,736 | 19,382 | 19,159 | ||||||||||||
Interest
on short-term borrowings
|
- | 97 | 115 | 288 | ||||||||||||
Interest
on long-term debt
|
534 | 370 | 1,363 | 1,148 | ||||||||||||
Total
interest expense
|
6,579 | 7,203 | 20,860 | 20,595 | ||||||||||||
Net
interest income
|
6,765 | 5,187 | 18,516 | 15,770 | ||||||||||||
Provision
for loan losses
|
403 | 117 | 2,731 | 260 | ||||||||||||
Net
interest income, after provision
|
||||||||||||||||
for
loan losses
|
6,362 | 5,070 | 15,785 | 15,510 | ||||||||||||
Non-interest
income:
|
||||||||||||||||
Customer
service fees
|
718 | 710 | 2,073 | 2,022 | ||||||||||||
Loan
fees
|
181 | 152 | 551 | 486 | ||||||||||||
Gain
(loss) on sales of loans, net
|
(10 | ) | (6 | ) | 17 | 19 | ||||||||||
Gain
(loss) on sales of securities, net
|
2,779 | (860 | ) | 5,092 | 1,172 | |||||||||||
Income
from bank-owned life insurance
|
209 | 153 | 624 | 850 | ||||||||||||
Equity
loss on investment in affiliate bank
|
(69 | ) | (138 | ) | (323 | ) | (349 | ) | ||||||||
Total
non-interest income
|
3,808 | 11 | 8,034 | 4,200 | ||||||||||||
Non-interest
expenses:
|
||||||||||||||||
Salaries
and employee benefits
|
4,009 | 3,618 | 13,793 | 10,704 | ||||||||||||
Occupancy
and equipment
|
719 | 608 | 2,198 | 1,932 | ||||||||||||
Data
processing
|
450 | 368 | 1,243 | 1,100 | ||||||||||||
Marketing
|
293 | 282 | 832 | 625 | ||||||||||||
Professional
services
|
595 | 278 | 1,562 | 737 | ||||||||||||
Contribution
to the Meridian
|
||||||||||||||||
Charitable
Foundation
|
- | - | 3,000 | - | ||||||||||||
Other
general and administrative
|
733 | 553 | 1,959 | 1,382 | ||||||||||||
Total
non-interest expenses
|
6,799 | 5,707 | 24,587 | 16,480 | ||||||||||||
Income
(loss) before income taxes
|
3,371 | (626 | ) | (768 | ) | 3,230 | ||||||||||
Provision
(benefit) for income taxes
|
1,228 | (323 | ) | (374 | ) | 942 | ||||||||||
Net
income (loss)
|
$ | 2,143 | $ | (303 | ) | $ | (394 | ) | $ | 2,288 | ||||||
Income
per share:
|
||||||||||||||||
Basic
|
$ | 0.10 | N/A | N/A | N/A | |||||||||||
Diluted
|
$ | 0.10 | N/A | N/A | N/A | |||||||||||
Weighted
Average Shares:
|
||||||||||||||||
Basic
|
22,196,225 | N/A | N/A | N/A | ||||||||||||
Diluted
|
22,196,225 | 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 (Loss) |
Unearned
Compensation ESOP |
Total
|
|||||||||||||||||||||
Nine
months ended September 30, 2007
|
||||||||||||||||||||||||||||
Balance
at December 31, 2006
|
- | $ | - | $ | - | $ | 106,911 | $ | 3,364 | $ | - | $ | 110,275 | |||||||||||||||
Comprehensive
income:
|
||||||||||||||||||||||||||||
Net
income
|
- | - | - | 2,288 | - | - | 2,288 | |||||||||||||||||||||
Net
unrealized gain on securities available for sale, net of
|
||||||||||||||||||||||||||||
reclassification
adjustment and tax effects
|
- | - | - | - | 1,653 | - | 1,653 | |||||||||||||||||||||
Total
comprehensive income
|
3,941 | |||||||||||||||||||||||||||
Balance
at September 30, 2007
|
- | $ | - | $ | - | $ | 109,199 | $ | 5,017 | $ | - | $ | 114,216 | |||||||||||||||
Nine
months ended September 30, 2008
|
||||||||||||||||||||||||||||
Balance
at December 31, 2007
|
- | $ | - | $ | - | $ | 109,177 | $ | 6,507 | $ | - | $ | 115,684 | |||||||||||||||
Adjustment
to initially apply EITF 06-4
|
- | - | - | (1,642 | ) | - | - | (1,642 | ) | |||||||||||||||||||
Balance,
as adjusted
|
114,042 | |||||||||||||||||||||||||||
Comprehensive
loss:
|
||||||||||||||||||||||||||||
Net
loss
|
- | - | - | (394 | ) | - | - | (394 | ) | |||||||||||||||||||
Net
unrealized loss on securities available for sale, net of
|
||||||||||||||||||||||||||||
reclassification
adjustment and tax effects
|
- | - | - | - | (10,914 | ) | - | (10,914 | ) | |||||||||||||||||||
Amortization
of prior service cost, net of tax effects
|
- | - | - | - | 15 | - | 15 | |||||||||||||||||||||
Total
comprehensive loss
|
(11,293 | ) | ||||||||||||||||||||||||||
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 | |||||||||||||||||||||
Issuance
and 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 (31,050 shares)
|
- | - | (5 | ) | - | - | 310 | 305 | ||||||||||||||||||||
Balance
at September 30, 2008
|
23,000,000 | $ | - | $ | 100,628 | $ | 107,141 | $ | (4,745 | ) | $ | (7,970 | ) | $ | 195,054 |
Nine
Months Ended September 30,
|
||||||||
(In
thousands)
|
2008
|
2007
|
||||||
Cash
flows from operating activities:
|
||||||||
Net
income (loss)
|
$ | (394 | ) | $ | 2,288 | |||
Adjustments
to reconcile net income (loss) to net cash
|
||||||||
provided
by operating activities:
|
||||||||
Contribution
of stock to charitable foundation
|
3,000 | - | ||||||
Earned
ESOP shares
|
305 | - | ||||||
Provision
for loan losses
|
2,731 | 260 | ||||||
Amortization
of net deferred loan origination fees
|
(242 | ) | (380 | ) | ||||
Net
amortization of securities available for sale
|
828 | 521 | ||||||
Depreciation
and amortization expense
|
950 | 855 | ||||||
Gain
on sales of securities, net
|
(5,092 | ) | (1,172 | ) | ||||
Loss
on sale of foreclosed real estate
|
5 | - | ||||||
Deferred
income tax benefit
|
(1,522 | ) | (2,181 | ) | ||||
Income
from bank-owned life insurance
|
(624 | ) | (850 | ) | ||||
Equity
loss on investment in affiliate bank
|
323 | 349 | ||||||
Net
changes in:
|
||||||||
Accrued
interest receivable
|
137 | 218 | ||||||
Other
assets
|
2,808 | 1,371 | ||||||
Accrued
expenses and other liabilities
|
1,438 | 1,552 | ||||||
Net
cash provided by operating activities
|
4,651 | 2,831 | ||||||
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
|
90,363 | 79,442 | ||||||
Proceeds
from redemption of mutual funds
|
25,000 | - | ||||||
Proceeds
from sales
|
16,947 | 40,944 | ||||||
Purchases
|
(168,579 | ) | (104,630 | ) | ||||
(Purchase)
redemption of Federal Home Loan Bank stock
|
(1,138 | ) | 206 | |||||
Loans
originated, net of principal payments received
|
(99,228 | ) | (16,645 | ) | ||||
Purchase
of bank-owned life insurance
|
(4,000 | ) | - | |||||
Proceeds
from bank-owned life insurance
|
- | 1,793 | ||||||
Purchases
of premises and equipment
|
(709 | ) | (4,050 | ) | ||||
Proceeds
from sales of foreclosed real estate
|
1,463 | - | ||||||
Net
cash used in investing activities
|
(146,881 | ) | (2,940 | ) |
Nine
Months Ended September 30,
|
||||||||
(In
thousands)
|
2008
|
2007
|
||||||
Cash
flows from financing activities:
|
||||||||
Net
increase in deposits
|
30,638 | 28,238 | ||||||
Proceeds
from sale of common stock
|
35,115 | - | ||||||
Loan
to ESOP for purchase of common stock
|
(8,280 | ) | - | |||||
Net
change in Federal Home Loan Bank advances
|
||||||||
with
maturities of less than three months
|
(9,154 | ) | 8,925 | |||||
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
|
(14,698 | ) | (4,450 | ) | ||||
Net
cash provided by financing activities
|
78,621 | 32,713 | ||||||
Net
change in cash and cash equivalents
|
(63,609 | ) | 32,604 | |||||
Cash
and cash equivalents at beginning of period
|
103,093 | 23,494 | ||||||
Cash
and cash equivalents at end of period
|
$ | 39,484 | $ | 56,098 | ||||
Supplemental
cash flow information:
|
||||||||
Interest
paid on deposits
|
19,583 | 19,139 | ||||||
Interest
paid on borrowings
|
1,427 | 1,450 | ||||||
Income
taxes paid
|
180 | 377 | ||||||
Non-cash
investing and financing activities:
|
||||||||
Transfers
from loans to foreclosed real estate
|
2,953 | - |
1.
|
Basis
of Presentation
|
2.
|
Stock
Offering
|
3.
|
Recent
Accounting Pronouncements
|
4.
|
Fair
Value Measurement
|
Quoted
Prices in
|
Significant
|
|||||||
Active
Markets for
|
Other
|
|||||||
Assets
at Fair Value
|
Identical
Assets
|
Observable
Inputs
|
||||||
(Level
1)
|
(Level
2)
|
|||||||
(In
thousands)
|
||||||||
Securities
available for sale
|
$
|
288,941
|
$
|
73,544
|
$
|
215,397
|
Significant
|
||||||||||
Unobservable
|
Total
Gains
|
|||||||||
Assets
at Fair Value
|
Inputs
|
(Losses)
|
||||||||
(Level
3)
|
||||||||||
(In
thousands)
|
||||||||||
Impaired loans (1)
|
$
|
6,578
|
$
|
6,578
|
$
|
(1,488)
|
5.
|
Employee
Benefits
|
|
The
following is a summary of operating and financial condition highlights as
of and for the periods indicated:
|
Financial
Condition At
|
||||||||
September
30,
|
December
31,
|
|||||||
(In
thousands)
|
2008
|
2007
|
||||||
Total
assets
|
$ | 1,073,683 | $ | 1,003,226 | ||||
Secuities
available for sale
|
288,941 | 267,058 | ||||||
Net
loans
|
661,890 | 568,104 | ||||||
Deposits
|
805,084 | 774,446 | ||||||
Borrowed
funds
|
57,675 | 36,527 | ||||||
Stockholders'
equity
|
195,054 | 115,684 |
Results
of Operations
|
||||||||||||||||
Three
Months Ended
|
Nine
Months Ended
|
|||||||||||||||
September
30,
|
September
30,
|
|||||||||||||||
(Dollars
in thousands)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Net
interest income
|
$ | 6,765 | $ | 5,187 | $ | 18,516 | $ | 15,770 | ||||||||
Provision
for loan losses
|
403 | 117 | 2,731 | 260 | ||||||||||||
Non-interest
income
|
3,808 | 11 | 8,034 | 4,200 | ||||||||||||
Non-interest
expenses
|
6,799 | 5,707 | 24,587 | 16,480 | ||||||||||||
Provision
(benefit) for income taxes
|
1,228 | (323 | ) | (374 | ) | 942 | ||||||||||
Net
income (loss)
|
2,143 | (303 | ) | (394 | ) | 2,288 | ||||||||||
Interest
rate spread
|
2.10 | % | 2.18 | % | 1.87 | % | 2.23 | % | ||||||||
Net
interest margin
|
2.70 | % | 2.48 | % | 2.50 | % | 2.53 | % |
At
September 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
|
$ | 19,268 | $ | 19,267 | $ | 7,002 | $ | 6,975 | ||||||||
Corporate
bonds
|
204,262 | 196,089 | 219,626 | 220,629 | ||||||||||||
Mortgage-backed
securities
|
41 | 41 | 43 | 43 | ||||||||||||
Total
debt securities
|
223,571 | 215,397 | 226,671 | 227,647 | ||||||||||||
Marketable
equity securities
|
72,476 | 73,544 | 28,843 | 39,411 | ||||||||||||
Total
securities available for sale
|
$ | 296,047 | $ | 288,941 | $ | 255,514 | $ | 267,058 |
At
September 30, 2008
|
At
December 31, 2007
|
|||||||||||||||
(Dollars
in thousands)
|
Amount
|
%
|
Amount
|
%
|
||||||||||||
Real
estate loans:
|
||||||||||||||||
One-to
four-family
|
$ | 266,327 | 39.8 | % | $ | 224,109 | 39.1 | % | ||||||||
Multi-family
|
31,407 | 4.7 | 26,855 | 4.7 | ||||||||||||
Commercial
real estate
|
223,867 | 33.4 | 175,072 | 30.5 | ||||||||||||
Construction
|
104,321 | 15.6 | 111,796 | 19.5 | ||||||||||||
Home
equity lines
|
||||||||||||||||
of
credit
|
27,078 | 4.1 | 21,541 | 3.8 | ||||||||||||
Total
real estate loans
|
653,000 | 97.6 | 559,373 | 97.6 | ||||||||||||
Commercial
business loans
|
14,355 | 2.2 | 11,859 | 2.1 | ||||||||||||
Consumer
loans
|
1,274 | 0.2 | 1,576 | 0.3 | ||||||||||||
Total
loans
|
668,629 | 100.0 | % | 572,808 | 100.0 | % | ||||||||||
Net
deferred origination fees
|
(1,021 | ) | (1,067 | ) | ||||||||||||
Allowance
for loan losses
|
(5,718 | ) | (3,637 | ) | ||||||||||||
Loans,
net
|
$ | 661,890 | $ | 568,104 |
Three
Months Ended September 30,
|
Nine
Months Ended September 30,
|
|||||||||||||||
(Dollars
in thousands)
|
2008
|
2007
|
2008
|
2007
|
||||||||||||
Beginning
balance
|
$ | 5,961 | $ | 3,503 | $ | 3,637 | $ | 3,362 | ||||||||
Provision
for loan losses
|
403 | 117 | 2,731 | 260 | ||||||||||||
Charge
offs:
|
||||||||||||||||
Real
estate loans
|
647 | - | 650 | 16 | ||||||||||||
Commercial
business loans
|
- | - | - | - | ||||||||||||
Consumer
loans
|
- | 1 | 2 | 14 | ||||||||||||
Total
charge-offs
|
647 | 1 | 652 | 30 | ||||||||||||
Recoveries:
|
||||||||||||||||
Real
estate loans
|
- | - | 1 | 16 | ||||||||||||
Commercial
business
|
- | - | - | - | ||||||||||||
Consumer
loans
|
1 | 1 | 1 | 12 | ||||||||||||
Total
recoveries
|
1 | 1 | 2 | 28 | ||||||||||||
Net
charge-offs
|
(646 | ) | - | (650 | ) | (2 | ) | |||||||||
Ending
balance
|
$ | 5,718 | $ | 3,620 | $ | 5,718 | $ | 3,620 | ||||||||
Allowance
to non-accrual loans
|
92.51 | % | 72.49 | % | 92.51 | % | 72.49 | % | ||||||||
Allowance
to total loans outstanding
|
0.86 | % | 0.66 | % | 0.86 | % | 0.66 | % | ||||||||
Net
charge-offs/average loans outstanding
|
0.10 | % | 0.00 | % | 0.11 | % | 0.00 | % |
At
September 30,
|
At
December 31,
|
|||||||
(In
thousands)
|
2008
|
2007
|
||||||
Loans
accounted for on a non-accrual basis:
|
||||||||
Real
estate loans:
|
||||||||
One-to
four-family
|
$ | 3,068 | $ | 2,059 | ||||
Multi-family
|
- | - | ||||||
Commercial
real estate
|
2,679 | 1,561 | ||||||
Home
equity lines of credit
|
- | 98 | ||||||
Construction
|
335 | 1,218 | ||||||
Total
real estate loans
|
6,082 | 4,936 | ||||||
Commercial
business loans
|
99 | 45 | ||||||
Consumer
loans
|
- | 1 | ||||||
Total
non-accrual loans
|
6,181 | 4,982 | ||||||
Foreclosed
assets
|
2,045 | 560 | ||||||
Total
nonperforming assets
|
$ | 8,226 | $ | 5,542 | ||||
Non-accrual
loans to total loans
|
0.92 | % | 0.87 | % | ||||
Non-accrual
loans to total assets
|
0.58 | % | 0.50 | % | ||||
Non-performing
assets to total assets
|
0.77 | % | 0.55 | % |
At
September 30, 2008
|
At
December 31, 2007
|
|||||||||||||||
(Dollars
in thousands)
|
Amount
|
Percent
|
Amount
|
Percent
|
||||||||||||
NOW
and demand deposits
|
$ | 98,635 | 12.3 |
%
|
$ | 85,045 | 11.0 | % | ||||||||
Money
market deposits
|
156,238 | 19.4 | 138,688 | 17.9 | ||||||||||||
Regular
and other deposits
|
118,806 | 14.7 | 118,837 | 15.3 | ||||||||||||
Certificates
of deposit
|
431,405 | 53.6 | 431,876 | 55.8 | ||||||||||||
Total
|
$ | 805,084 | 100.0 | % | $ | 774,446 | 100.0 | % |
For
The Three Months Ended September 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)
|
$ | 641,094 | $ | 9,938 | 6.17 | % | $ | 545,808 | $ | 9,073 | 6.63 | % | ||||||||||||
Securities
and certificates of deposit
|
333,900 | 3,307 | 3.94 | 262,927 | 2,986 | 4.54 | ||||||||||||||||||
Other
interest-earning assets
|
21,478 | 99 | 1.83 | 26,153 | 331 | 5.02 | ||||||||||||||||||
Total
interest-earning assets
|
996,472 | 13,344 | 5.33 | 834,888 | 12,390 | 5.94 | ||||||||||||||||||
Noninterest-earning
assets
|
79,296 | 77,934 | ||||||||||||||||||||||
Total
assets
|
$ | 1,075,768 | $ | 912,822 | ||||||||||||||||||||
Liabilities
and stockholders' equity:
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
NOW deposits
|
$ | 42,078 | 92 | 0.87 | $ | 61,909 | 31 | 0.20 | ||||||||||||||||
Money
market deposits
|
150,501 | 929 | 2.46 | 119,184 | 1,144 | 3.81 | ||||||||||||||||||
Savings
and other deposits
|
123,236 | 354 | 1.14 | 127,363 | 371 | 1.15 | ||||||||||||||||||
Certificates
of deposit
|
435,022 | 4,670 | 4.27 | 419,575 | 5,190 | 4.91 | ||||||||||||||||||
Total
interest-bearing deposits
|
750,837 | 6,045 | 3.20 | 728,031 | 6,736 | 3.70 | ||||||||||||||||||
FHLB
advances
|
60,316 | 534 | 3.52 | 38,663 | 467 | 4.83 | ||||||||||||||||||
Total
interest-bearing liabilities
|
811,153 | 6,579 | 3.23 | 766,694 | 7,203 | 3.76 | ||||||||||||||||||
Noninterest-bearing
demand deposits
|
54,711 | 25,111 | ||||||||||||||||||||||
Other
noninterest-bearing liabilities
|
10,509 | 8,232 | ||||||||||||||||||||||
Total
liabilities
|
876,373 | 800,037 | ||||||||||||||||||||||
Total
stockholders' equity
|
199,395 | 112,785 | ||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 1,075,768 | $ | 912,822 | ||||||||||||||||||||
Net
interest income
|
$ | 6,765 | $ | 5,187 | ||||||||||||||||||||
Interest
rate spread (2)
|
2.10 | % | 2.18 | % | ||||||||||||||||||||
Net
interest margin (3)
|
2.70 | % | 2.48 | % | ||||||||||||||||||||
Average
interest-earning assets to
|
122.85 | % | 108.89 | % | ||||||||||||||||||||
average
interest-bearing liabilities
|
(1)
Loans on non accrual status are included in average
balances.
|
|||||||
(2)
Interest rate spread represents the difference between the yield on
interest-earning assets and the cost of interest-bearing
liabilities.
|
|||||||
(3)
Net interest margin represents net interest income divided by average
interest-earning assets.
|
|||||||
(4)
Annualized.
|
For
The Nine Months Ended September 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)
|
$ | 604,157 | $ | 28,455 | 6.29 | % | $ | 541,108 | $ | 26,560 | 6.55 | % | ||||||||||||
Securities
and certificates of deposit
|
301,477 | 9,281 | 4.11 | 269,448 | 9,079 | 4.49 | ||||||||||||||||||
Other
interest-earning assets
|
85,350 | 1,640 | 2.57 | 18,900 | 726 | 5.14 | ||||||||||||||||||
Total
interest-earning assets
|
990,984 | 39,376 | 5.31 | 829,456 | 36,365 | 5.85 | ||||||||||||||||||
Noninterest-earning
assets
|
76,733 | 74,542 | ||||||||||||||||||||||
Total
assets
|
$ | 1,067,717 | $ | 903,998 | ||||||||||||||||||||
Liabilities
and stockholders' equity:
|
||||||||||||||||||||||||
Interest-bearing
liabilities:
|
||||||||||||||||||||||||
NOW deposits
|
$ | 38,855 | 236 | 0.81 | $ | 63,322 | 79 | 0.17 | ||||||||||||||||
Money
market deposits
|
144,751 | 2,967 | 2.74 | 107,266 | 2,852 | 3.55 | ||||||||||||||||||
Savings
and other deposits
|
129,138 | 1,103 | 1.14 | 131,199 | 1,142 | 1.16 | ||||||||||||||||||
Certificates
of deposit
|
443,140 | 15,076 | 4.54 | 418,279 | 15,086 | 4.82 | ||||||||||||||||||
Total
interest-bearing deposits
|
755,884 | 19,382 | 3.43 | 720,066 | 19,159 | 3.56 | ||||||||||||||||||
FHLB
advances
|
53,458 | 1,478 | 3.69 | 40,095 | 1,436 | 4.79 | ||||||||||||||||||
Total
interest-bearing liabilities
|
809,342 | 20,860 | 3.44 | 760,161 | 20,595 | 3.62 | ||||||||||||||||||
Noninterest-bearing
demand deposits
|
53,867 | 24,275 | ||||||||||||||||||||||
Other
noninterest-bearing liabilities
|
9,854 | 7,417 | ||||||||||||||||||||||
Total
liabilities
|
873,063 | 791,853 | ||||||||||||||||||||||
Total
stockholders' equity
|
194,654 | 112,145 | ||||||||||||||||||||||
Total
liabilities and stockholders' equity
|
$ | 1,067,717 | $ | 903,998 | ||||||||||||||||||||
Net
interest income
|
$ | 18,516 | $ | 15,770 | ||||||||||||||||||||
Interest
rate spread (2)
|
1.87 | % | 2.23 | % | ||||||||||||||||||||
Net
interest margin (3)
|
2.50 | % | 2.53 | % | ||||||||||||||||||||
Average
interest-earning assets to
|
122.44 | % | 109.12 | % | ||||||||||||||||||||
average
interest-bearing liabilities
|
(1)
Loans on non accrual status are included in average
balances.
|
|||||||
(2)
Interest rate spread represents the difference between the yield on
interest-earning assets and the cost of interest-bearing
liabilities.
|
|||||||
(3)
Net interest margin represents net interest income divided by average
interest-earning assets.
|
|||||||
(4)
Annualized.
|
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 | $ | 32,402 | $ | 1,869 | 6.12 | % | $ | 152,395 | $ | (39,748 | ) | (20.69 | ) % | |||||||||||||
100 | 31,636 | 1,103 | 3.61 | 173,421 | (18,722 | ) | (9.74 | ) | ||||||||||||||||||
0 | 30,533 | 192,143 | ||||||||||||||||||||||||
(100 | ) | 28,729 | (1,804 | ) | (5.91 | ) | 203,078 | 10,935 | 5.69 | |||||||||||||||||
(200 | ) | 26,158 | (4,375 | ) | (14.33 | ) | 208,054 | 15,911 | 8.28 |
(a)
|
Disclosure
Controls and Procedures
|
|
(b)
|
Changes
in Internal Control over Financial
Reporting
|
|
(a)
|
The
annual meeting of shareholders was held on August 19,
2008.
|
|
(b)
|
The
following individuals were re-elected as directors for a three-year term
at the annual meeting: Vincent D. Basile, James P. DelRossi, James G.
Sartori and Paul T. Sullivan.
|
|
(c)
|
The
following matters were voted upon and approved by the Company’s
shareholders at the 2008 Annual Meeting of Shareholders held on August 19
2008: (i) election of four directors to serve for three-year terms
(Proposal 1); (ii) approval of the Company’s 2008 Equity Incentive
Compensation Plan (Proposal 2); and (iii) ratification of the
appointment of Wolf & Company, P.C. as the independent registered
public accounting firm for the Company for the fiscal year ending
December 31, 2008. (Proposal
3).
|
(d)
|
Not
applicable.
|
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 September11, 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.
|
10.11
|
2008
Equity Incentive Plan**
|
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.
|
**
|
Incorporated by
reference to Appendix A to the Company’s Definitive
Proxy Statement for its 2008 Annual Meeting, as filed with the Securities
and Exchange Commission on July
11, 2008.
|
MERIDIAN INTERSTATE
BANCORP, INC.
|
||
(Registrant)
|
||
Dated: November
10, 2008
|
/s/
Richard J. Gavegnano
|
|
Richard
J. Gavegnano
|
||
Chairman
and Chief Executive Officer
|
||
(Principal
Executive Officer)
|
||
Dated: November
10, 2008
|
/s/
Leonard V. Siuda
|
|
Leonard
V. Siuda
|
||
Chief
Financial Officer and Treasurer
|
||
(Principal
Financial and Accounting Officer)
|