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Meridian Bancorp, the holding company of East Boston Savings Bank, rode strong commercial loan growth and credit quality to net income of $11.3 million for the quarter ending June 30, nearly doubling net income from the second quarter of 2016.
Earnings per share at the roughly $4.8 billion asset bank was $.22 per diluted share, doubling its earnings-per-share value year-over-year.
“These record earnings were driven by increases in net interest income and loan swap fees earned from strong organic commercial loan portfolio growth, along with lower loan loss provisions resulting from outstanding credit quality,” Richard J. Gavegnano, chairman, president and CEO of the company, said in a statement.
Net interest income for the quarter was $35.5 million, up $6 million from the second quarter of last year.
“Rising net interest income remains the most significant contributor to our increased profitability, reflecting growth in total loans of $755 million, or 21 percent, on total loan originations of $1.7 billion since June 30, 2016,” said Gavegnano.
Net loans at the end of the second quarter were $4.26 billion, up from $3.5 billion one year ago, with commercial real estate loans up more than $350 million since June 30, 2016.
Non-interest income was $5 million for the second quarter, up from $2.6 million from the second quarter of 2016, largely due to an increase in loan fees, which were negative in the second quarter of 2016, but $1.63 million in the second quarter of this year.
Gains on sales of securities also increased $740,000 year-over-year.
Toward the very end of the second quarter, Meridian also acquired Meetinghouse Bank and its two locations in Dorchester and Roslindale.
Under the terms of the agreement, Meetinghouse shareholders will receive $26 in cash for each of their outstanding shares of Meetinghouse common stock, representing a total transaction value of approximately $17.8 million.
Meetinghouse comes with approximately $118 million in assets, $80 million in loans, $99 million in deposits, but has struggled to be profitable in recent years.
“Our expanding presence in the lucrative Boston market area and the continuing strength of our organic loan growth remain as vital elements of our strategic plan to gain market share and enhance stockholder value,” said Gavegnano.
The company’s provision for losses was $1.5 million, down $1 million from this time last year, and its net charge-offs, although slightly up from the second quarter of 2016, were only $32,000.
“Our outstanding asset quality improved further during the second quarter of 2017 with delinquent and non-performing loans declining to new historic lows and only insignificant loan charge-off activity,” Gavegnano said in a statement. “Even as we benefit from the favorable economic conditions in our metropolitan Boston market area, we continue to be highly disciplined in our loan underwriting, credit monitoring and loan collection processes.”
