BOSTON, July 24, 2018 (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 $14.1 million, or $0.27 per diluted share, for the quarter ended June 30, 2018, up from $12.0 million, or $0.23 per diluted share, for the quarter ended March 31, 2018 and $11.3 million, or $0.22 per diluted share, for the quarter ended June 30, 2017. For the six months ended June 30, 2018, net income was $26.1 million, or $0.49 per diluted share, up from $20.6 million, or $0.39 per diluted share, for the six months ended June 30, 2017. Net income for the quarter and six months ended June 30, 2018 reflects a reduction in the statutory federal income tax rate to 21% from 35% effective January 1, 2018 related to enactment of the Tax Cuts and Jobs Act (the “Tax Act”) in December 2017. The Company’s return on average assets was 1.01% for the quarter ended June 30, 2018, up from 0.90% for the quarter ended March 31, 2018 and 0.97% for the quarter ended June 30, 2017. For the six months ended June 30, 2018, the Company’s return on average assets was 0.96%, up from 0.90% for the six months ended June 30, 2017. The Company’s return on average equity was 8.50% for the quarter ended June 30, 2018, up from 7.35% for the quarter ended March 31, 2018 and 7.28% for the quarter ended June 30, 2017. For the six months ended June 30, 2018, the Company’s return on average equity was 7.93%, up from 6.66% for the six months ended June 30, 2017.

Richard J. Gavegnano, Chairman, President and Chief Executive Officer, said, “I am proud to report record net income of $14.1 million for the second quarter of 2018, up 17% from the first quarter of 2018 and up 24% from the second quarter of 2017, and $26.1 million for the first half of 2018, up 27% from the first half of 2017. Although our earnings are enhanced this year by income tax expense reductions resulting from the Tax Act’s lower federal income tax rate, our pre-tax income also rose 7% during the first half, reflecting an 18% increase in net interest income. Our pre-tax income would have increased 14% from the first quarter of 2018, 8% from the second quarter of 2017 and 17% from the first half of 2017 if changes in the fair value of marketable equity securities required to be recognized beginning in 2018 and gains on sale of securities for these periods as reported in non-interest income were excluded.”

The Company’s net interest income was $41.0 million for the quarter ended June 30, 2018, up $1.2 million or 3.0%, from the quarter ended March 31, 2018 and $5.6 million, or 15.8%, from the quarter ended June 30, 2017. The interest rate spread and net interest margin on a tax-equivalent basis were 2.81% and 3.07%, respectively, for the quarter ended June 30, 2018 compared to 2.92% and 3.16%, respectively, for the quarter ended March 31, 2018 and 3.01% and 3.24%, respectively, for the quarter ended June 30, 2017. For the six months ended June 30, 2018, net interest income increased $12.1 million, or 17.6%, to $80.9 million from the six months ended June 30, 2017. The net interest rate spread and net interest margin on a tax-equivalent basis were 2.87% and 3.11%, respectively, for the six months ended June 30, 2018 compared to 3.01% and 3.22%, respectively, for the six months ended June 30, 2017. The increases in net interest income were primarily due to growth in average loan balances and yields, partially offset by increases in the average balances of total deposits and borrowings and the cost of funds for the quarter and six months ended June 30, 2018 compared to the respective prior periods. The interest rate spread and net interest margin on a tax-equivalent basis for the quarter and six months ended June 30, 2018 reflect the reduction in the federal income tax rate to 21% from 35%.

Total interest and dividend income increased to $55.8 million for the quarter ended June 30, 2018, up $3.8 million, or 7.4%, from the quarter ended March 31, 2018 and $11.3 million, or 25.5%, from the quarter ended June 30, 2017, primarily due to growth in the Company’s average loan balances to $5.043 billion and yields on loans to 4.33%. The Company’s yield on interest-earning assets on a tax-equivalent basis was 4.16% for the quarter ended June 30, 2018, up five basis points from the quarter ended March 31, 2018 and up 13 basis points from the quarter ended June 30, 2017. For the six months ended June 30, 2018, the Company’s total interest and dividend income increased $21.6 million, or 25.0%, to $107.8 million from the six months ended June 30, 2017 primarily due to growth in the average loan balances of $819.6 million, or 20.0%, to $4.911 billion, and by an increase in the yield on loans on a tax-equivalent basis of seven basis points to 4.31% for the six months ended June 30, 2018 compared to the six months ended June 30, 2017. The Company’s yield on interest-earning assets on a tax-equivalent basis increased 13 basis points to 4.14% for the six months ended June 30, 2018 compared to the same period in 2017. The yields on loans and interest-earning assets on a tax-equivalent basis for the quarter and six months ended June 30, 2018 also reflect the reduction in the federal income tax rate to 21% from 35%.

Total interest expense increased to $14.8 million for the quarter ended June 30, 2018, up $2.6 million, or 21.8%, from the quarter ended March 31, 2018 and $5.7 million, or 63.5%, from the quarter ended June 30, 2017. Interest expense on deposits increased to $12.8 million for the quarter ended June 30, 2018, up $2.2 million, or 21.3%, from the quarter ended March 31, 2018 and $4.8 million, or 60.7%, from the quarter ended June 30, 2017 primarily due to growth in average total deposits to $4.280 billion and increases in the cost of average total deposits to 1.19% from 1.04% for the quarter ended March 31, 2018, and 0.87% for the quarter ended June 30, 2017. Interest expense on borrowings increased to $2.0 million for the quarter ended June 30, 2018, up $407,000, or 24.8%, from the quarter ended March 31, 2018 and $931,000, or 83.3%, from the quarter ended June 30, 2017 primarily due to growth in average total borrowings to $591.9 million. The Company’s total cost of funds was 1.22% for the quarter ended June 30, 2018, up 16 basis points from the quarter ended March 31, 2018 and 32 basis points from the quarter ended June 30, 2017. Total interest expense increased $9.5 million, or 54.4%, to $27.0 million for the six months ended June 30, 2018 from the six months ended June 30, 2017. Interest expense on deposits increased $7.9 million, or 51.5%, to $23.3 million for the six months ended June 30, 2018 from the six months ended June 30, 2017 due to the growth in average total deposits of $598.6 million, or 16.6%, to $4.198 billion and an increase in the cost of average total deposits of 26 basis points to 1.12%. Interest expense on borrowings increased $1.6 million, or 75.9%, to $3.7 million for the six months ended June 30, 2018 from the six months ended June 30, 2017 due to the growth in average total borrowings of $213.1 million, or 62.0%, to $556.7 million and an increase in the cost of average total borrowings of 11 basis points to 1.34%. The Company’s cost of funds increased 25 basis points to 1.14% for the six months ended June 30, 2018 compared to the six months ended June 30, 2017.

Mr. Gavegnano noted, “Our strong loan pipeline continues to be the key driver of our rising net interest income. Our net loan growth was $215 million, or 4%, for the second quarter of 2018, $492 million, or 11%, for the first half of 2018, and $859 million, or 20%, since June 30, 2017. Our yield on loans also rose seven basis points to 4.33% for the second quarter of 2018 and seven basis points to 4.31% for the first half of 2018 from the same periods last year. This loan growth and improvement in our loan yield minimized the effect of the rise in our cost of funds and the lower federal income tax rate under the Tax Act on our net interest margin on a tax-equivalent basis, which declined to 3.07% for the second quarter and 3.11% for the first half of 2018. Without the tax rate change, our yields on loans and interest earning assets, the interest rate spread and the net interest margin on a tax-equivalent basis would have been four to five basis points higher than reported for 2018 periods.”

The Company's provision for loan losses was $1.9 million for the quarter ended June 30, 2018, down $319,000 from the quarter ended March 31, 2018 and up $373,000 from the quarter ended June 30, 2017. The allowance for loan losses was $49.4 million or 0.96% of total loans at June 30, 2018, compared to $47.5 million or 0.96% of total loans at March 31, 2018, $45.2 million or 0.97% of total loans at December 31, 2017, and $43.2 million or 1.00% of total loans at June 30, 2017. The changes in the provision and the allowance for loan losses were based on management’s assessment of loan portfolio growth and composition changes, declines in historical charge-off trends, reduced levels of problem loans and other improvements in asset quality trends.

Net recoveries totaled $43,000 for the quarter ended June 30, 2018, compared to net recoveries of $114,000 for the quarter ended March 31, 2018 and net charge-offs of $32,000 for the quarter ended June 30, 2017. For the six months ended June 30, 2018, net recoveries totaled $157,000, or 0.01% of average loans outstanding on an annualized basis compared to net charge-offs of $36,000 for the six months ended June 30, 2017.

Non-accrual loans were $7.9 million, or 0.15% of total loans outstanding, at June 30, 2018; down $126,000, or 1.6%, from March 31, 2018; down $458,000, or 5.5%, from December 31, 2017; and down $3.6 million, or 31.1%, from June 30, 2017. Non-performing assets were $7.9 million, or 0.14% of total assets, at June 30, 2018, compared to $8.0 million, or 0.15% of total assets, at March 31, 2018, $8.4 million, or 0.16% of total assets at December 31, 2017, and $11.5 million, or 0.24% of total assets, at June 30, 2017.

Non-interest income was $2.9 million for the quarter ended June 30, 2018, up from $2.3 million for the quarter ended March 31, 2018 and down from $5.0 million for the quarter ended June 30, 2017. Non-interest income increased $525,000, or 22.5%, as compared to the quarter ended March 31, 2018, primarily due to an increase of $925,000 in the gain on equity securities, net, partially offset by a decrease of $453,000 in loan fees. As compared to the quarter ended June 30, 2017, non-interest income decreased $2.2 million, or 43.2%, primarily due to decreases of $1.8 million in loan fee income and $808,000 in gain on sales of securities available for sale, net, partially offset by increases of $388,000 in gain on equity securities, net. For the six months ended June 30, 2018, non-interest income decreased $3.9 million, or 43.0%, to $5.2 million from $9.1 million for the six months ended June 30, 2017, primarily due to a $2.4 million decrease in gain on sales of securities available for sale, net and a $1.6 million decrease in loan fees. The decreases in loan fees are primarily due to $1.3 million of loan swap fee income recognized in the second quarter of 2017.

Non-interest expenses were $23.5 million, or 1.69% of average assets for the quarter ended June 30, 2018, compared to $24.7 million, or 1.86% of average assets for the quarter ended March 31, 2018 and $21.4 million, or 1.83% of average assets for the quarter ended June 30, 2017. Non-interest expenses decreased $1.2 million, or 5.0%, compared to the quarter ended March 31, 2018, due primarily to decreases of $956,000 in salaries and employee benefits and $514,000 in occupancy and equipment, partially offset by an increase of $277,000 in other general and administrative expenses. Non-interest expenses increased $2.1 million, or 9.6%, compared to the quarter ended June 30, 2017, due primarily to increases of $1.7 million in salaries and employee benefits, $276,000 in other general and administrative expenses, and $179,000 in data processing, partially offset by a decrease of $106,000 in professional services. For the six months ended June 30, 2018, non-interest expenses increased $4.9 million, or 11.3%, to $48.2 million from $43.3 million for the six months ended June 30, 2017, due to increases of $3.4 million in salaries and employee benefits, $505,000 in occupancy and equipment expenses, $483,000 in data processing expenses, $426,000 in other general and administrative expenses, and $166,000 in marketing and advertising expenses, partially offset by a $276,000 decrease in professional services. The increases in salaries and employee benefits expenses reflect annual increases in employee compensation and health benefits during the first quarter of 2018. In addition, the increases in salaries and employee benefits, and occupancy and equipment expenses and data processing include costs associated with the expansion of our branch and support staff, including two branches acquired from Meetinghouse Bank on December 29, 2017, one new branch opened in the first quarter of 2018 and three new branch openings planned for later in 2018. Other general and administrative expenses reflect core deposit intangible amortization of $147,000 for the quarter ended June 30, 2018 and $295,000 for the six months ended June 30, 2018. The Company’s efficiency ratio was 53.89% for the quarter ended June 30, 2018 compared to 57.62% for the quarter ended March 31, 2018 and 53.95% for the quarter ended June 30, 2017. For the six months ended June 30, 2018, the efficiency ratio was 55.74% compared to 57.31% for the six months ended June 30, 2017.

Mr. Gavegnano added, “The improvement in our efficiency ratio to 53.89% for the second quarter of 2018 from 57.62% for the first quarter of 2018 was largely due to the 3% rise in net interest income coupled with the 5% decrease in non-interest expenses. Declines in our non-interest expenses in the second quarter of 2018 reflected payroll tax and 401(k) retirement plan employer-matching expenses incurred in the first quarter associated with the January 2018 payment of 2017 bonuses to the Bank’s employees and overhead cost savings following the first quarter integration of Meetinghouse Bank. Our investments in franchise expansion continue as we prepare for the opening of new branches in Boston’s Brigham Circle, Lynnfield and Burlington later in the year and evaluate additional opportunities within our metropolitan Boston market area. We believe such investments are vital to meeting our organic growth and financial performance goals.”

The Company recorded a provision for income taxes of $4.5 million for the quarter ended June 30, 2018, reflecting an effective tax rate of 24.3%, compared to $3.3 million, or an effective tax rate of 21.6%, for the quarter ended March 31, 2018, and $6.2 million, or an effective tax rate of 35.5%, for the quarter ended June 30, 2017. For the six months ended June 30, 2018, the provision for income taxes was $7.8 million, reflecting an effective tax rate of 23.1%, compared to $10.9 million, or an effective tax rate of 34.7%, for the six months ended June 30, 2017. The reductions in the provision for income taxes and the effective tax rate for 2018 primarily reflect the decrease in the statutory federal income tax rate to 21% from 35% effective January 1, 2018 as a result of the Tax Act.

Total assets were $5.678 billion at June 30, 2018, up $216.9 million, or 4.0%, from $5.461 billion at March 31, 2018 and $378.1 million, or 7.1%, from $5.299 billion at December 31, 2017. Net loans were $5.115 billion at June 30, 2018, up $214.5 million, or 4.4%, from March 31, 2018, and up $492.1 million, or 10.6%, from December 31, 2017. Loan originations totaled $492.9 million during the quarter ended June 30, 2018 and $842.6 million during the six months ended June 30, 2018. The net increase in loans for the six months ended June 30, 2018 was primarily due to increases of $323.1 million in commercial real estate loans, $131.9 million in multi-family loans, $43.3 million in commercial and industrial loans, and $32.0 million in one- to four-family loans. Cash and due from banks was $329.6 million at June 30, 2018, a decrease of $73.1 million, or 18.2% from December 31, 2017. Securities, at fair value, were $33.9 million at June 30, 2018, a decrease of $4.5 million, or 11.7%, from $38.4 million at December 31, 2017.

Total deposits were $4.390 billion at June 30, 2018, an increase of $200.2 million, or 4.8%, from $4.189 billion at March 31, 2018 and an increase of $281.7 million, or 6.9%, from $4.108 billion at December 31, 2017. Core deposits, which exclude certificate of deposits, increased $81.9 million, or 3.0%, during the six months ended June 30, 2018 to $2.819 billion, or 64.2% of total deposits. Total borrowings were $591.7 million, up $9.1 million, or 1.6%, from March 31, 2018 and up $78.2 million, or 15.2%, from December 31, 2017.

Total stockholders’ equity increased $9.1 million, or 1.4%, to $664.7 million at June 30, 2018 from $655.6 million at March 31, 2018, and $18.3 million, or 2.8%, from $646.4 million at December 31, 2017. The increase for the six months ended June 30, 2018 was primarily due to net income of $26.1 million and $3.7 million related to stock-based compensation plans, partially offset by the repurchase of 314,010 shares of the Company’s common stock at a total cost of $6.1 million, and dividends of $0.10 per share totaling $5.1 million. Stockholders’ equity to assets was 11.71% at June 30, 2018, compared to 12.01% at March 31, 2018 and 12.20% at December 31, 2017. Book value per share increased to $12.33 at June 30, 2018 from $11.96 at December 31, 2017. Tangible book value per share increased to $11.91 at June 30, 2018 from $11.54 at December 31, 2017. Market price per share decreased $1.45, or 7.0%, to $19.15 at June 30, 2018 from $20.60 at December 31, 2017. At June 30, 2018, the Company and the Bank continued to exceed all regulatory capital requirements.

During the quarter ended June 30, 2018, the Company repurchased 214,010 shares of its common stock at an average price of $18.99 per share. As of June 30, 2018, the Company had repurchased 2,373,621 shares of its stock at an average price of $14.45 per share, or 86.7% of the 2,737,334 shares authorized for repurchase under the Company’s repurchase program adopted in August 2015.

Mr. Gavegnano concluded, “With 363,713 shares remaining for repurchase under our current program, we will consider buying additional shares when conditions are determined to be favorable.”

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 34 full-service locations and one mobile location in the greater Boston metropolitan area. 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) June 30, March 31, December June 30, 2018 2018 31, 2017 2017 ----------- ----------- ----------- ----------- (Dollars in thousands) ASSETS Cash and due from banks $ 329,588 $ 316,372 $ 402,687 $ 234,776 Certificates of deposit 23,885 44,133 69,326 85,323 Securities available for sale, at fair value 18,437 19,507 38,364 52,362 Equity securities, at fair value 15,428 14,722 — — Federal Home Loan Bank stock, at cost 29,546 27,572 24,947 22,579 Loans held for sale 1,052 1,136 3,772 2,257 Loans: One- to four-family 635,708 614,043 603,680 552,762 Home equity lines of credit 45,812 45,193 48,393 42,599 Multi-family 911,562 858,894 779,637 695,602 Commercial real estate 2,386,926 2,253,014 2,063,781 1,927,572 Construction 610,946 638,751 641,306 517,471 Commercial and industrial 568,897 533,056 525,604 557,443 Consumer 10,455 10,466 10,761 10,058 - --------- - --------- - --------- - --------- Total loans 5,170,306 4,953,417 4,673,162 4,303,507 Allowance for loan losses (49,401 ) (47,488 ) (45,185 ) (43,229 ) Net deferred loan origination fees (6,045 ) (5,593 ) (5,179 ) (4,443 ) - --------- - --------- - --------- - --------- Loans, net 5,114,860 4,900,336 4,622,798 4,255,835 Bank-owned life insurance 40,885 40,608 40,336 41,325 Premises and equipment, net 41,584 41,415 40,967 40,621 Accrued interest receivable 12,699 12,281 12,902 11,068 Deferred tax asset, net 15,896 15,737 15,244 21,728 Goodwill 19,638 19,638 19,638 13,687 Core deposit intangible 2,948 3,096 3,243 — Other assets 11,142 4,145 5,231 5,853 - --------- - --------- - --------- - --------- Total assets $ 5,677,588 $ 5,460,698 $ 5,299,455 $ 4,787,414 - --------- - --------- - --------- - --------- LIABILITIES AND STOCKHOLDERS' EQUITY Deposits: Non interest-bearing demand deposits $ 486,334 $ 487,096 $ 477,428 $ 457,009 Interest-bearing demand deposits 1,129,657 1,098,646 1,004,155 779,208 Money market deposits 865,349 851,702 921,895 972,720 Regular savings and other deposits 337,796 343,466 333,774 321,674 Certificates of deposit 1,570,435 1,408,464 1,370,609 1,129,306 - --------- - --------- - --------- - --------- Total deposits 4,389,571 4,189,374 4,107,861 3,659,917 Short-term borrowings — — — 40,000 Long-term debt 591,660 582,561 513,444 434,015 Accrued expenses and other liabilities 31,691 33,156 31,751 26,753 - --------- - --------- - --------- - --------- Total liabilities 5,012,922 4,805,091 4,653,056 4,160,685 - --------- - --------- - --------- - --------- 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; 53,905,279, 54,068,874, 54,039,316 and 53,649,946 shares issued at June 30, 2018, March 539 540 540 537 31, 2018, December 31, 2017 and June 30, 2017, respectively Additional paid-in capital 392,955 395,531 395,716 392,446 Retained earnings 289,949 278,450 268,533 250,800 Accumulated other comprehensive income (loss) (699 ) (616 ) 128 1,905 Unearned compensation - ESOP, 2,496,154, 2,526,595, 2,557,036 and 2,617,198 at June 30, (18,078 ) (18,298 ) (18,518 ) (18,959 ) 2018, March 31, 2018, December 31, 2017 and June 30, 2017, respectively - --------- - --------- - --------- - --------- Total stockholders' equity 664,666 655,607 646,399 626,729 - --------- - --------- - --------- - --------- Total liabilities and stockholders' equity $ 5,677,588 $ 5,460,698 $ 5,299,455 $ 4,787,414 - --------- - --------- - --------- - ---------

MERIDIAN BANCORP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF NET INCOME (Unaudited) Three Months Ended Six Months Ended -------------------------------------------- ---------------------------- June 30, March 31, June 30, June 30, June 30, 2018 2018 2017 2018 2017 ------------ ------------ ------------ ------------ ------------ (Dollars in thousands, except per share amounts) Interest and dividend income: Interest and fees on loans $ 53,904 $ 49,985 $ 43,195 $ 103,889 $ 83,684 Interest on debt securities: Taxable 126 126 83 252 202 Tax-exempt 15 15 8 30 18 Dividends on equity securities 134 148 291 282 568 Interest on certificates of 141 203 196 344 408 deposit Other interest and dividend 1,527 1,522 736 3,049 1,381 income - ---------- - ---------- - ---------- - ---------- - ---------- Total interest and dividend 55,847 51,999 44,509 107,846 86,261 income - ---------- - ---------- - ---------- - ---------- - ---------- Interest expense: Interest on deposits 12,751 10,509 7,935 23,260 15,354 Interest on short-term borrowings — — 4 — 4 Interest on long-term debt 2,049 1,642 1,114 3,691 2,094 - ---------- - ---------- - ---------- - ---------- - ---------- Total interest expense 14,800 12,151 9,053 26,951 17,452 - ---------- - ---------- - ---------- - ---------- - ---------- Net interest income 41,047 39,848 35,456 80,895 68,809 Provision for loan losses 1,870 2,189 1,497 4,059 3,116 - ---------- - ---------- - ---------- - ---------- - ---------- Net interest income, after 39,177 37,659 33,959 76,836 65,693 provision for loan losses - ---------- - ---------- - ---------- - ---------- - ---------- Non-interest income: Customer service fees 2,282 2,170 2,214 4,452 4,266 Loan fees (158 ) 295 1,634 137 1,702 Mortgage banking gains, net 63 133 82 196 172 Gain on sales of securities — — 808 — 2,382 available for sale, net Gain (loss) on equity securities, 388 (537 ) — (149 ) — net Income from bank-owned life 277 272 292 549 580 insurance Other income 6 — — 6 — - ---------- - ---------- - ---------- - ---------- - ---------- Total non-interest income 2,858 2,333 5,030 5,191 9,102 - ---------- - ---------- - ---------- - ---------- - ---------- Non-interest expenses: Salaries and employee benefits 14,438 15,394 12,752 29,832 26,427 Occupancy and equipment 3,025 3,539 3,036 6,564 6,059 Data processing 1,653 1,683 1,474 3,336 2,853 Marketing and advertising 1,006 967 953 1,973 1,807 Professional services 1,000 965 1,106 1,965 2,241 Deposit insurance 782 797 813 1,579 1,504 Merger and acquisition 14 74 — 88 — Other general and administrative 1,547 1,270 1,271 2,817 2,391 - ---------- - ---------- - ---------- - ---------- - ---------- Total non-interest expenses 23,465 24,689 21,405 48,154 43,282 - ---------- - ---------- - ---------- - ---------- - ---------- Income before income taxes 18,570 15,303 17,584 33,873 31,513 Provision for income taxes 4,508 3,309 6,237 7,817 10,922 - ---------- - ---------- - ---------- - ---------- - ---------- Net income $ 14,062 $ 11,994 $ 11,347 $ 26,056 $ 20,591 - ---------- - ---------- - ---------- - ---------- - ---------- Earnings per share: Basic $ 0.27 $ 0.23 $ 0.22 $ 0.51 $ 0.40 Diluted $ 0.27 $ 0.23 $ 0.22 $ 0.49 $ 0.39 Weighted average shares: Basic 51,437,726 51,531,835 51,003,967 51,484,521 50,976,950 Diluted 52,867,787 53,083,815 52,422,486 52,975,541 52,474,761

MERIDIAN BANCORP, INC. AND SUBSIDIARIES NET INTEREST INCOME ANALYSIS (Unaudited) Three Months Ended ---------------------------------------------------------------------------------------------------------------- June 30, 2018 March 31, 2018 June 30, 2017 ------------------------------------ ------------------------------------ ------------------------------------ Average Interest Yield/ Average Interest Yield/ Average Interest Yield/ Balance (1) Cost (1) Balance (1) Cost (1) Balance (1) Cost (1) (6) (6) (6) ----------- ------------ -------- ----------- ------------ -------- ----------- ------------ -------- (Dollars in thousands) Assets: Interest-earning assets: Loans (2) $ 5,043,367 $ 54,491 4.33 % $ 4,776,876 $ 50,573 4.29 % $ 4,180,602 $ 44,431 4.26 % Securities and certificates of 70,155 443 2.53 96,511 523 2.20 142,159 691 1.95 deposit Other interest-earning 328,659 1,527 1.86 317,883 1,522 1.94 239,590 736 1.23 assets (3) - --------- - ------ - --------- - ------ - --------- - ------ Total interest-earning 5,442,181 56,461 4.16 5,191,270 52,618 4.11 4,562,351 45,858 4.03 assets - ------ - ------ - ------ Noninterest-earning 118,324 125,293 110,509 assets - --------- - --------- - --------- Total assets $ 5,560,505 $ 5,316,563 $ 4,672,860 - --------- - --------- - --------- Liabilities and stockholders' equity: Interest-bearing liabilities: Interest-bearing $ 1,104,003 $ 3,486 1.27 $ 1,032,514 $ 2,791 1.10 $ 753,839 $ 1,598 0.85 demand deposits Money market 849,177 2,326 1.10 883,549 2,057 0.94 992,382 2,219 0.90 deposits Regular savings and 339,004 118 0.14 335,288 114 0.14 317,656 114 0.14 other deposits Certificates of 1,504,883 6,821 1.82 1,376,113 5,547 1.63 1,147,440 4,004 1.40 deposit - --------- - ------ - --------- - ------ - --------- - ------ Total interest-bearing 3,797,067 12,751 1.35 3,627,464 10,509 1.17 3,211,317 7,935 0.99 deposits Borrowings 591,862 2,049 1.39 521,090 1,642 1.28 356,325 1,118 1.26 - --------- - ------ - --------- - ------ - --------- - ------ Total interest-bearing 4,388,929 14,800 1.35 4,148,554 12,151 1.19 3,567,642 9,053 1.02 liabilities - ------ - ------ - ------ Noninterest-bearing 482,903 488,459 456,447 demand deposits Other noninterest-bearing 27,018 26,638 25,732 liabilities - --------- - --------- - --------- Total liabilities 4,898,850 4,663,651 4,049,821 Total stockholders' 661,655 652,912 623,039 equity - --------- - --------- - --------- Total liabilities and stockholders' $ 5,560,505 $ 5,316,563 $ 4,672,860 equity - --------- - --------- - --------- Net interest-earning $ 1,053,252 $ 1,042,716 $ 994,709 assets - --------- - --------- - --------- Fully tax-equivalent net 41,661 40,467 36,805 interest income Less: tax-equivalent (614 ) (619 ) (1,349 ) adjustments - ------ - ------ - ------ Net interest income $ 41,047 $ 39,848 $ 35,456 - ------ - ------ - ------ Interest rate 2.81 % 2.92 % 3.01 % spread (1)(4) Net interest margin 3.07 % 3.16 % 3.24 % (1)(5) Average interest-earning assets to average interest-bearing 124.00 % 125.13 % 127.88 % liabilities Supplemental Information: Total deposits, including noninterest-bearing demand deposits $ 4,279,970 $ 12,751 1.19 % $ 4,115,923 $ 10,509 1.04 % $ 3,667,764 $ 7,935 0.87 % Total deposits and borrowings, including noninterest-bearing $ 4,871,832 $ 14,800 1.22 % $ 4,637,013 $ 12,151 1.06 % $ 4,024,089 $ 9,053 0.90 % demand deposits ------------------- - --------- - ------ - - ---- - - --------- - ------ - - ---- - - --------- - ------ - - ---- -

(1) 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, 2018, March 31, 2018 and June 30, 2017, yields on loans before tax-equivalent adjustments were 4.29%, 4.24% and 4.14%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 2.38%, 2.07% and 1.63%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 4.12%, 4.06% and 3.91%, respectively. Interest rate spread before tax-equivalent adjustments for the three months ended June 30, 2018, March 31, 2018 and June 30, 2017 was 2.77%, 2.87% and 2.89%, respectively, while net interest margin before tax-equivalent adjustments for the three months ended June 30, 2018, March 31, 2018 and June 30, 2017 was 3.03%, 3.11% and 3.12%, respectively. (2) Loans on non-accrual status are included in average balances. (3) Includes Federal Home Loan Bank stock and associated dividends. (4) Interest rate spread represents the difference between the 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 SUBSIDIARIES NET INTEREST INCOME ANALYSIS (Unaudited) Six Months Ended --------------------------------------------------------------------------- June 30, 2018 June 30, 2017 ------------------------------------- ------------------------------------ Average Yield/ Average Yield/ Balance Interest (1) Cost (1) Balance Interest (1) Cost (1) ----------- ------------- -------- ----------- ------------ -------- (Dollars in thousands) Assets: Interest-earning assets: Loans (2) $ 4,910,858 $ 105,064 4.31 % $ 4,091,226 $ 86,121 4.24 % Securities and certificates of 83,260 966 2.34 143,990 1,418 1.99 deposit Other interest-earning assets (3) 323,301 3,049 1.90 241,523 1,381 1.15 - --------- - ------- - --------- - ------ Total interest-earning assets 5,317,419 109,079 4.14 4,476,739 88,920 4.01 - ------- - ------ Noninterest-earning assets 121,096 111,130 - --------- - --------- Total assets $ 5,438,515 $ 4,587,869 - --------- - --------- Liabilities and stockholders' equity: Interest-bearing liabilities: Interest-bearing demand deposits $ 1,068,456 $ 6,277 1.18 $ 704,681 $ 2,817 0.81 Money market deposits 866,268 4,383 1.02 1,000,343 4,449 0.90 Regular savings and other deposits 337,156 232 0.14 312,825 222 0.14 Certificates of deposit 1,440,854 12,368 1.73 1,140,921 7,866 1.39 - --------- - ------- - --------- - ------ Total interest-bearing deposits 3,712,734 23,260 1.26 3,158,770 15,354 0.98 Borrowings 556,672 3,691 1.34 343,536 2,098 1.23 - --------- - ------- - --------- - ------ Total interest-bearing liabilities 4,269,406 26,951 1.27 3,502,306 17,452 1.00 - ------- - ------ Noninterest-bearing demand 485,665 440,986 deposits Other noninterest-bearing 26,136 26,517 liabilities - --------- - --------- Total liabilities 4,781,207 3,969,809 Total stockholders' equity 657,308 618,060 - --------- - --------- Total liabilities and $ 5,438,515 $ 4,587,869 stockholders' equity - --------- - --------- Net interest-earning assets $ 1,048,013 $ 974,433 - --------- - --------- Fully tax-equivalent net interest 82,128 71,468 income Less: tax-equivalent adjustments (1,233 ) (2,659 ) - ------- - ------ Net interest income $ 80,895 $ 68,809 - ------- - ------ Interest rate spread (1)(4) 2.87 % 3.01 % Net interest margin (1)(5) 3.11 % 3.22 % Average interest-earning assets to average interest-bearing liabilities 124.55 % 127.82 % Supplemental Information: Total deposits, including noninterest-bearing demand deposits $ 4,198,399 $ 23,260 1.12 % $ 3,599,756 $ 15,354 0.86 % Total deposits and borrowings, including noninterest-bearing demand $ 4,755,071 $ 26,951 1.14 % $ 3,943,292 $ 17,452 0.89 % deposits ---------------------------------- - --------- - ------- - - ---- - - --------- - ------ - - ---- -

(1) 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, 2018, and 2017, yields on loans before tax-equivalent adjustments were 4.27% and 4.12%, respectively, yields on securities and certificates of deposit before tax-equivalent adjustments were 2.20% and 1.67%, respectively, and yield on total interest-earning assets before tax-equivalent adjustments were 4.09% and 3.89%, respectively. Interest rate spread before tax-equivalent adjustments for the six months ended June 30, 2018, and 2017 was 2.82% and 2.89%, respectively, while net interest margin before tax-equivalent adjustments for the six months ended June 30, 2018, and 2017 was 3.07% and 3.10%, respectively. (2) Loans on non-accrual status are included in average balances. (3) Includes Federal Home Loan Bank stock and associated dividends. (4) Interest rate spread represents the difference between the 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 SUBSIDIARIES SELECTED FINANCIAL HIGHLIGHTS (Unaudited) Three Months Ended Six Months Ended ------------------------------- ------------------- June 30, March 31, June 30, June 30, June 30, 2018 2018 2017 2018 2017 --------- --------- --------- --------- --------- Key Performance Ratios Return on average assets (1) 1.01 % 0.90 % 0.97 % 0.96 % 0.90 % Return on average equity (1) 8.50 7.35 7.28 7.93 6.66 Interest rate spread (1) (2) 2.81 2.92 3.01 2.87 3.01 Net interest margin (1) (3) 3.07 3.16 3.24 3.11 3.22 Non-interest expense to average assets (1) 1.69 1.86 1.83 1.77 1.89 Efficiency ratio (4) 53.89 57.62 53.95 55.74 57.31

June 30, March 31, December June 30, 2018 2018 31, 2017 2017 ----------- ----------- ----------- -------- (Dollars in thousands) Asset Quality Non-accrual loans: One- to four-family $ 6,457 $ 6,568 $ 6,890 $ 7,667 Home equity lines of credit 563 562 562 619 Commercial real estate 366 378 388 2,666 Commercial and industrial 519 523 523 529 Total non-accrual loans 7,905 8,031 8,363 11,481 Foreclosed assets — — — — - ------ - ------ - ------ - ------ Total non-performing assets $ 7,905 $ 8,031 $ 8,363 $ 11,481 - ------ - ------ - ------ - ------ Allowance for loan losses/total loans 0.96 % 0.96 % 0.97 % 1.00 % Allowance for loan losses/non-accrual loans 624.93 591.31 540.30 376.53 Non-accrual loans/total loans 0.15 0.16 0.18 0.27 Non-accrual loans/total assets 0.14 0.15 0.16 0.24 Non-performing assets/total assets 0.14 0.15 0.16 0.24 Capital and Share Related Stockholders' equity to total assets 11.71 % 12.01 % 12.20 % 13.09 % Book value per share $ 12.33 $ 12.13 $ 11.96 $ 11.68 Tangible book value per share (5) $ 11.91 $ 11.70 $ 11.54 $ 11.43 Market value per share $ 19.15 $ 20.15 $ 20.60 $ 16.90 Shares outstanding 53,905,27 54,068,87 54,039,31 53,649,94 9 4 6 6 ------------------------------------------- -------- - -------- - -------- - -------- -

(1) Annualized.(2) Interest rate spread represents the difference between the tax-equivalent 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. (4) The efficiency ratio is a non-GAAP measure representing measure representing non-interest expense, excluding merger and acquisition expenses, divided by the sum of net interest income and non-interest income excluding gains or losses on sales of securities, and gains or losses on equity securities. The efficiency ratio is a common measure used by banks to understand expenses related to the generation of revenue. We have removed gains or losses on sales of securities and gains or losses on equity securities as management deems them to be either discretionary or market driven and not representative of operating performance. We have removed merger and acquisition expenses as management deems them to be not representative of operating performance. Presented on a basis including merger and acquisition expenses, gains or losses on sales of securities and gains or losses on equity securities, the efficiency ratio was 53.44%, 58.53% and 52.87% for the quarters ended June, 30, 2018, March 31, 2018, and June 30, 2017, respectively, and 55.94% and 55.55% for the six months ended June 30, 2018 and 2017, respectively. (5) Tangible book value per share represents total stockholders’ equity less goodwill and other intangible assets divided by the number of shares outstanding.

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