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Meridian Interstate Bancorp, Inc. Reports Net Income for the Third Quarter and Nine Months Ended September 30, 2013



Meridian Interstate Bancorp, Inc. Reports Net Income for the Third Quarter and
Nine Months Ended September 30, 2013

BOSTON, Oct. 22, 2013 (GLOBE NEWSWIRE) -- Meridian Interstate Bancorp, Inc.
(the "Company" or "Meridian") (Nasdaq:EBSB), the holding company for East
Boston Savings Bank (the "Bank"), which also operates under the name Mt.
Washington Bank, a Division of East Boston Savings Bank ("Mt. Washington"),
announced net income of $5.3 million, or $0.24 per diluted share, for the
quarter ended September 30, 2013 compared to $2.7 million, or $0.12 per
diluted share, for the quarter ended September 30, 2012. For the nine months
ended September 30, 2013, net income was $11.4 million, or $0.52 per diluted
share compared to $10.3 million, or $0.47 per diluted share, for the nine
months ended September 30, 2012. The Company's return on average assets was
0.83% for the quarter ended September 30, 2013 compared to 0.50% for the
quarter ended September 30, 2012. For the nine months ended September 30,
2013, the Company's return on average assets was 0.62% compared to 0.67% for
the nine months ended September 30, 2012. The Company's return on average
equity was 8.79% for the quarter ended September 30, 2013 compared to 4.70%
for the quarter ended September 30, 2012. For the nine months ended September
30, 2013, the Company's return on average equity was 6.35% compared to 6.05%
for the nine months ended September 30, 2012.

During the second quarter of 2012, the Company recognized a pre-tax gain of
$4.8 million on the sale of its investment in Hampshire First Bank, which was
43% owned by the Company, to NBT Bancorp, Inc. and NBT Bank, N.A. On an
after-tax basis, this one-time gain increased net income by $2.9 million, or
$0.13 per diluted share, for the nine months ended September 30, 2012.

Richard J. Gavegnano, Chairman and Chief Executive Officer, said, "I am
pleased to report net income of $5.3 million, or $0.24 per share, for the
third quarter and $11.4 million, or $0.52 per share, for the nine months ended
September 30, 2013. Our total assets have risen to over $2.6 billion due to
net loan growth of $326 million, or 18%, to $2.1 billion, and net deposit
growth of $340 million, or 18%, to $2.2 billion for the first nine months of
2013. This continuing growth demonstrates our ability to attract customers in
our Boston area markets with our banking products and services, particularly
loans and checking accounts. Following our expansion into the lucrative
markets of Belmont and Allston earlier this year, the November opening of our
27^th full service location in Somerville will further enhance our market
share and franchise value."

Net interest income increased $2.7 million, or 16.2%, to $19.1 million for the
quarter ended September 30, 2013 from $16.4 million for the quarter ended
September 30, 2012. The net interest rate spread and net interest margin were
3.02% and 3.17%, respectively, for the quarter ended September 30, 2013
compared to 3.12% and 3.29%, respectively, for the quarter ended September 30,
2012. For the nine months ended September 30, 2013, net interest income
increased $6.4 million, or 13.1%, to $55.0 million from $48.7 million for the
nine months ended September 30, 2012. The net interest rate spread and net
interest margin were 3.09% and 3.24%, respectively, for the nine months ended
September 30, 2013 compared to 3.25% and 3.42%, respectively, for the nine
months ended September 30, 2012. The increases in net interest income were due
primarily to loan growth along with declines in the cost of funds, partially
offset by declines in yields on interest-earning assets for the third quarter
and nine months ended September 30, 2013 compared to the same periods in 2012.

The average balance of the Company's loan portfolio increased $473.5 million,
or 29.6%, to $2.071 billion, which was partially offset by the decline in the
yield on loans of 37 basis points to 4.45% for the quarter ended September 30,
2013 compared to the quarter ended September 30, 2012. The Company's cost of
total deposits declined six basis points to 0.83%, which was partially offset
by the increase in the average balance of total deposits of $380.6 million, or
21.8%, to $2.123 billion for the quarter ended September 30, 2013 compared to
the quarter ended September 30, 2012. The Company's yield on interest-earning
assets declined 19 basis points to 4.02% for the quarter ended September 30,
2013 compared to 4.21% for the quarter ended September 30, 2012, while the
cost of funds declined nine basis points to 0.90% for the quarter ended
September 30, 2013 compared to 0.99% for the quarter ended September 30, 2012.

Mr. Gavegnano noted, "Since September of last year, strong growth of $492
million, or 30%, in our loan portfolio and $356 million, or 31%, in core
deposits contributed to our ninth consecutive quarterly rise in net interest
income. This continuing growth has moderated the declines in our net interest
margin despite falling loan yields."

The Company's provision for loan losses was $151,000 for the quarter ended
September 30, 2013 compared to $2.3 million for the quarter ended September
30, 2012. For the nine months ended September 30, 2013, the provision for loan
losses was $4.6 million compared to $5.8 million for the nine months ended
September 30, 2012. These changes were based primarily on management's
assessment of loan portfolio growth and composition changes, an ongoing
evaluation of credit quality and current economic conditions. In addition, the
reductions in the provision for loan losses reflected lower provision expense
related to specific reserves recorded for impaired loans for the third quarter
and nine months ended September 30, 2013 compared to the same periods in
2012. The allowance for loan losses was $23.7 million or 1.11% of total loans
outstanding at September 30, 2013, compared to $20.5 million or 1.13% of total
loans outstanding at December 31, 2012. Net recoveries totaled $79,000 for the
quarter ended September 30, 2013, or 0.02% of average loans outstanding, and
net charge-offs totaled $1.5 million for the nine months ended September 30,
2013, or 0.10% of average loans outstanding.

Non-performing loans increased $4.0 million, or 10.1%, to $43.6 million, or
2.04% of total loans outstanding, at September 30, 2013, from $39.6 million,
or 2.19% of total loans outstanding, at December 31, 2012, primarily due to a
net increase of $5.6 million in non-performing construction
loans. Non-performing assets increased $3.2 million, or 7.6%, to $45.4
million, or 1.71% of total assets, at September 30, 2013, from $42.2 million,
or 1.85% of total assets, at December 31, 2012. Non-performing assets at
September 30, 2013 were comprised of $13.4 million of construction loans, $9.0
million of commercial real estate loans, $17.2 million of one- to four-family
mortgage loans, $2.7 million of home equity loans, $1.3 million of commercial
business loans and foreclosed real estate of $1.8 million. Non-performing
assets at September 30, 2013 included $16.7 million of assets acquired in the
January 2010 Mt. Washington Co-operative Bank merger, comprised of $16.2
million of non-performing loans and $473,000 of foreclosed real estate.

Non-interest income increased $695,000, or 15.3%, to $5.2 million for the
quarter ended September 30, 2013 from $4.5 million for the quarter ended
September 30, 2012, primarily due to increases of $1.4 million in gain on
sales of securities, net, and $134,000 in loan fees,  partially offset by a
decrease of $852,000 in mortgage banking gains, net. For the nine months ended
September 30, 2013, non-interest income decreased $2.8 million, or 16.2%, to
$14.3 million from $17.1 million for the nine months ended September 30, 2012,
primarily due to the prior year $4.8 million gain on sale of the Hampshire
First Bank affiliate and a decrease of $1.5 million in mortgage banking gains,
net, partially offset by increases of $3.5 million in gain on sales of
securities, net and $301,000 in customer service fees. The decreases in
mortgage banking gains, net are primarily due to declines in mortgage loans
sales along with related derivative valuations on commitments to originate
loans for sale and contracts to sell loans. 

Non-interest expenses increased $1.2 million, or 8.5%, to $15.6 million for
the quarter ended September 30, 2013 from $14.4 million for the quarter ended
September 30, 2012, primarily due to increases of $1.4 million in salaries and
employee benefits, $221,000 in occupancy and equipment and $193,000 in data
processing, partially offset by decreases of $274,000 in professional
services, $239,000 in foreclosed real estate and $149,000 in other
non-interest expenses. For the nine months ended September 30, 2013,
non-interest expenses increased $3.0 million, or 6.8%, to $47.5 million from
$44.4 million for the nine months ended September 30, 2012, primarily due to
increases of $3.0 million in salaries and employee benefits, $546,000 in
occupancy and equipment expense, $574,000 in data processing, $276,000 in
marketing and advertising and $224,000 in deposit insurance, partially offset
by decreases of $839,000 in professional services reflecting a decline in
legal and consulting expenses, $333,000 in foreclosed real estate expense and
$402,000 in other non-interest expenses. The increases in salaries and
employee benefits and occupancy and equipment expenses were primarily
associated with the opening of new branches and costs associated with the
expansion of residential and commercial lending capacity. The Company's
efficiency ratio was 73.05% for the quarter ended September 30, 2013 compared
to 74.14% for the quarter ended September 30, 2012. For the nine months ended
September 30, 2013, the efficiency ratio was 76.62% compared to 77.93% for the
nine months ended September 30, 2012, excluding the gain on sale of the
Hampshire First Bank affiliate.

Mr. Gavegnano added, "We are progressively growing into our expanded lending
and core deposit funding capacity while we are becoming increasingly
efficient. Our efficiency ratio improved to 73.05% for the third quarter and
76.62% for the year-to-date, with net interest income rising at more than
twice the level of non-interest expenses so far this year. Although our costs
have increased at a moderate pace, our investments in staffing, infrastructure
and technology are resulting in increased market share and improved operating
profitability. We will continue to emphasize prudent management of our
overhead expenses as we grow."

The Company recorded a provision for income taxes of $3.3 million for the
quarter ended September 30, 2013, reflecting an effective tax rate of 38.1%,
compared to $1.6 million, or 36.4%, for the quarter ended September 30,
2012. For the nine months ended September 30, 2013, the provision for income
taxes was $5.8 million, reflecting an effective tax rate of 33.8%, compared to
$5.3 million, or 33.7%, for the nine months ended September 30, 2012. The
change in the effective tax rate was primarily due to changes in the
components of pre-tax income.

Total assets increased $376.2 million, or 16.5%, to $2.655 billion at
September 30, 2013 from $2.279 billion at December 31, 2012. Net loans
increased $326.1 million, or 18.3%, to $2.112 billion at September 30, 2013
from $1.786 billion at December 31, 2012. The net increase in loans for the
nine months ended September 30, 2013 was primarily due to increases of $177.4
million in commercial real estate loans, $103.1 million in multi-family loans,
$19.7 million in construction loans and $32.9 million in commercial business
loans. Cash and cash equivalents increased $113.0 million, or 121.3%, to
$206.2 million at September 30, 2013 from $93.2 million at December 31,
2012. Securities available for sale decreased $57.9 million, or 22.0%, to
$204.9 million at September 30, 2013 from $262.8 million at December 31, 2012.

Total deposits increased $339.7 million, or 18.2%, to $2.205 billion at
September 30, 2013 from $1.865 billion at December 31, 2012, including net
growth in core deposits of $280.9 million, or 22.7%, to $1.518 billion, or
68.8% of total deposits. Total borrowings increased $26.4 million, or 16.4%,
to $187.7 million at September 30, 2013 from $161.3 million at December 31,
2012.

Total stockholders' equity increased $9.7 million, or 4.1%, to $243.7 million
at September 30, 2013, from $233.9 million at December 31, 2012. The increase
for the nine months ended September 30, 2013 was due primarily to $11.4
million in net income, partially offset by a decrease of $1.6 million in
accumulated other comprehensive income reflecting a decrease in the fair value
of available for sale securities, net of tax and a $1.6 million increase in
treasury stock resulting from the Company's repurchase of 91,086
shares. Stockholders' equity to assets was 9.18% at September 30, 2013,
compared to 10.27% at December 31, 2012. Book value per share increased to
$11.04 at September 30, 2013 from $10.57 at December 31, 2012. Tangible book
value per share increased to $10.42 at September 30, 2013 from $9.95 at
December 31, 2012. Market price per share increased $5.01, or 29.9%, to $21.79
at September 30, 2013 from $16.78 at December 31, 2012. At September 30, 2013,
the Company and the Bank continued to exceed all regulatory capital
requirements.

As of September 30, 2013, the Company had repurchased 287,652 shares of its
stock at an average price of $14.68 per share, or 31.8% of the 904,224 shares
authorized for repurchase under the Company's fourth repurchase program as
adopted during 2011. The Company has repurchased 1,691,580 shares at an
average price of $10.89 per share since December 2008.

Mr. Gavegnano concluded, "The Company and East Boston Savings Bank plan to
take full advantage of our capacity to profitably grow our franchise as we
consider various opportunities to enhance stockholder value."

Meridian Interstate 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 26 full service locations in the
greater Boston metropolitan area including nine full-service locations in its
Mt. Washington Bank Division.  We offer a variety of deposit and loan products
to individuals and businesses located in our primary market, which consists of
Essex, Middlesex 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 Interstate 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 Interstate 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 INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
                                                                   
                                                    September 30, December 31,
                                                    2013          2012
                                                    (Dollars in thousands)
ASSETS                                                             
Cash and due from banks                              $ 206,233     $ 93,129
Federal funds sold                                   --            63
Total cash and cash equivalents                      206,233       93,192
                                                                   
Securities available for sale, at fair value         204,897       262,785
Federal Home Loan Bank stock, at cost                11,907        12,064
Loans held for sale                                  6,294         14,502
                                                                   
Loans                                                2,136,105     1,806,843
Less allowance for loan losses                       (23,679)      (20,504)
Loans, net                                           2,112,426     1,786,339
                                                                   
Bank-owned life insurance                            37,137        36,251
Foreclosed real estate, net                          1,782         2,604
Premises and equipment, net                          39,368        38,719
Accrued interest receivable                          6,885         6,745
Deferred tax asset, net                              10,843        9,710
Goodwill                                             13,687        13,687
Other assets                                         3,521         2,173
                                                                   
Total assets                                         $ 2,654,980   $ 2,278,771
                                                                   
LIABILITIES AND STOCKHOLDERS' EQUITY                               
Deposits:                                                          
Non interest-bearing                                 $ 247,283     $ 204,079
Interest-bearing                                     1,957,820     1,661,354
Total deposits                                       2,205,103     1,865,433
                                                                   
Long-term debt                                       187,700       161,254
Accrued expenses and other liabilities               18,527        18,141
Total liabilities                                    2,411,330     2,044,828
Stockholders' equity:                                              
Common stock, no par value, 50,000,000 shares        --            --
authorized; 23,000,000 shares issued 
Additional paid-in capital                           99,050        98,338
Retained earnings                                    158,373       146,959
Accumulated other comprehensive income               3,309         4,915
Treasury stock, at cost, 743,627 and 660,800 shares
at September 30, 2013 and December 31, 2012,         (9,923)       (8,331)
respectively
Unearned compensation - ESOP, 589,950 and 621,000
shares at September 30, 2013 and December 31, 2012,  (5,899)       (6,210)
respectively
Unearned compensation - restricted shares, 193,180
and 203,345 at September 30, 2013 and December 31,   (1,260)       (1,728)
2012, respectively
Total stockholders' equity                           243,650       233,943
                                                                   
Total liabilities and stockholders' equity           $ 2,654,980   $ 2,278,771

 
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Net Income
(Unaudited)
                                                                  
                      Three Months Ended September Nine Months Ended September
                      30,                          30, 
                      2013           2012          2013          2012
                      (Dollars in thousands, except per share amounts)
Interest and dividend                                             
income:
Interest and fees on   $ 22,889       $ 19,139      $ 65,413      $ 55,692
loans
Interest on debt       997            1,574         3,266         5,778
securities 
Dividends on equity    348            389           1,061         1,042
securities
Interest on
certificates of        --             8             --            26
deposit
Other interest and     86             71            251           248
dividend income
Total interest and     24,320         21,181        69,991        62,786
dividend income
Interest expense:                                                 
Interest on deposits   4,427          3,905         12,516        11,725
Interest on            796            837           2,433         2,376
borrowings
Total interest         5,223          4,742         14,949        14,101
expense
                                                                  
Net interest income    19,097         16,439        55,042        48,685
Provision for loan     151            2,344         4,630         5,778
losses 
Net interest income,
after provision for    18,946         14,095        50,412        42,907
loan losses
Non-interest income:                                              
Customer service fees  1,857          1,834         5,219         4,918
Loan fees              185            51            349           290
Mortgage banking       (102)          750           456           1,912
(loss) gain, net
Gain on sales of       2,995          1,602         7,396         3,944
securities, net
Income from
bank-owned life        299            296           886           892
insurance
Equity income on
investment in          --             --            --            310
affiliate bank
Gain on sale of
investment in          --             --            --            4,819
affiliate bank
Other income           --             6             9             7
Total non-interest     5,234          4,539         14,315        17,092
income
Non-interest                                                      
expenses:
Salaries and employee  10,033         8,644         29,584        26,587
benefits 
Occupancy and          2,103          1,882         6,523         5,977
equipment 
Data processing        1,089          896           3,159         2,585
Marketing and          539            557           2,042         1,766
advertising
Professional services  453            727           1,591         2,430
Foreclosed real        (31)           208           161           494
estate
Deposit insurance      525            427           1,522         1,298
Other general and      876            1,025         2,892         3,294
administrative 
Total non-interest     15,587         14,366        47,474        44,431
expenses
Income before income   8,593          4,268         17,253        15,568
taxes
Provision for income   3,272          1,554         5,839         5,251
taxes
Net income             $ 5,321        $ 2,714       $ 11,414      $ 10,317
                                                                  
Earnings per share:                                               
Basic                  $ 0.25         $ 0.13        $ 0.53        $ 0.48
Diluted                $ 0.24         $ 0.12        $ 0.52        $ 0.47
                                                                  
Weighted average                                                  
shares:
Basic                  21,632,828     21,606,540    21,640,435    21,633,654
Diluted                22,000,504     21,871,578    21,971,890    21,835,894

 
 
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Net Interest Income Analysis
(Unaudited)
                                                                          
                     For the Three Months Ended September 30, 
                    2013                          2012
                    Average                Yield/ Average                Yield/
                    Balance      Interest  Cost   Balance      Interest  Cost
                                 (1)       (6)                 (1)       (6)
                    (Dollars in thousands)
Assets:                                                                   
Interest-earning                                                          
assets:
Loans (2)            $ 2,070,990  $ 23,224 4.45%   $ 1,597,528  $ 19,346 4.82%
Securities and
certificates of      219,907      1,499     2.70   286,257      2,141     2.98
deposits
Other
interest-earning     160,150      86        0.21   152,519      71        0.19
assets (3)
Total
interest-earning     2,451,047    24,809    4.02   2,036,304    21,558    4.21
assets 
Noninterest-earning  118,162                       122,327                
assets 
Total assets         $ 2,569,209                   $ 2,158,631            
                                                                          
Liabilities and
stockholders'                                                             
equity:
Interest-bearing                                                          
liabilities:
NOW deposits         $ 191,192    254       0.53   $ 159,302    192       0.48
Money market         754,841      1,770     0.93   542,576      1,173     0.86
deposits 
Regular and other    254,401      168       0.26   234,869      225       0.38
deposits 
Certificates of      688,478      2,235     1.29   628,017      2,315     1.47
deposit 
Total
interest-bearing     1,888,912    4,427     0.93   1,564,764    3,905     0.99
deposits 
Borrowings           188,032      796       1.68   169,736      837       1.96
Total
interest-bearing     2,076,944    5,223     1.00   1,734,500    4,742     1.09
liabilities 
Noninterest-bearing  233,893                       177,444                
demand deposits 
Other
noninterest-bearing  16,165                        15,518                 
liabilities 
Total liabilities    2,327,002                     1,927,462              
Total stockholders'  242,207                       231,169                
equity 
Total liabilities
and stockholders'    $ 2,569,209                   $ 2,158,631            
equity 
                                                                          
Net
interest-earning     $ 374,103                     $ 301,804              
assets
Fully
tax-equivalent net                19,586                        16,816    
interest income
Less:
tax-equivalent                    (489)                         (377)     
adjustments
Net interest                      $ 19,097                      $ 16,439  
income 
Interest rate                              3.02%                         3.12%
spread (4)
Net interest margin                        3.17%                         3.29%
(5)
Average interest-earning assets
to average interest-bearing      118.01%                       117.40%    
liabilities 
                                                                          
Supplemental                                                              
Information:
                                                                          
Total deposits,
including            $ 2,122,805  $ 4,427  0.83%   $ 1,742,208  $ 3,905  0.89%
noninterest-bearing
demand deposits
Total deposits and
borrowings,
including            $ 2,310,837  $ 5,223  0.90%   $ 1,911,944  $ 4,742  0.99%
noninterest-bearing
demand deposits
                                                                          
(1) Income on debt securities, equity securities and revenue bonds included in
commercial real estate loans is 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 statement of net income. 
(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 yield on
interest-earning assets and the cost of interest-bearing liabilties.
(5) Net interest margin represents net interest income (tax-equivalent    
basis) divided by average interest-earning assets.
(6) Annualized.                                                           
                                                                          

 
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Net Interest Income Analysis
(Unaudited)
                                                                          
                     For the Nine Months Ended September 30, 
                    2013                          2012
                    Average                Yield/ Average                Yield/
                    Balance      Interest  Cost   Balance      Interest  Cost
                                 (1)       (6)                 (1)       (6)
                    (Dollars in thousands)
Assets:                                                                   
Interest-earning                                                          
assets:
Loans (2)            $ 1,946,945  $ 66,310  4.55%  $ 1,495,449  $ 56,226  5.02%
Securities and
certificates of      234,989      4,796     2.73   308,027      7,309     3.17
deposits
Other
interest-earning     143,639      251       0.23   136,217      248       0.24
assets (3)
Total
interest-earning     2,325,573    71,357    4.10   1,939,693    63,783    4.39
assets 
Noninterest-earning  118,802                       126,110                
assets 
Total assets         $ 2,444,375                   $ 2,065,803            
                                                                          
Liabilities and
stockholders'                                                             
equity:
Interest-bearing                                                          
liabilities:
NOW deposits         $ 181,421    713       0.53   $ 148,942    517       0.46
Money market         677,728      4,615     0.91   501,858      3,191     0.85
deposits 
Regular and other    251,402      495       0.26   227,959      655       0.38
deposits 
Certificates of      674,883      6,693     1.33   630,742      7,362     1.56
deposit 
Total
interest-bearing     1,785,434    12,516    0.94   1,509,501    11,725    1.04
deposits 
Borrowings           184,080      2,433     1.77   148,417      2,376     2.14
Total
interest-bearing     1,969,514    14,949    1.01   1,657,918    14,101    1.14
liabilities 
Noninterest-bearing  218,061                       164,571                
demand deposits 
Other
noninterest-bearing  17,263                        15,912                 
liabilities 
Total liabilities    2,204,838                     1,838,401              
Total stockholders'  239,537                       227,402                
equity 
Total liabilities
and stockholders'    $ 2,444,375                   $ 2,065,803            
equity 
                                                                          
Net
interest-earning     $ 356,059                     $ 281,775              
assets
Fully
tax-equivalent net                56,408                        49,682    
interest income
Less:
tax-equivalent                    (1,366)                       (997)     
adjustments
Net interest                      $ 55,042                      $ 48,685  
income 
Interest rate                               3.09%                         3.25%
spread (4)
Net interest margin                         3.24%                         3.42%
(5)
Average
interest-earning
assets to average                                                         
interest-bearing
liabilities 
                                  118.08%                       117.00%   
Supplemental                                                              
Information:
                                                                          
Total deposits,
including            $ 2,003,495  $ 12,516  0.84%  $ 1,674,072  $ 11,725  0.94%
noninterest-bearing
demand deposits
Total deposits and
borrowings,
including            $ 2,187,575  $ 14,949  0.91%  $ 1,822,489  $ 14,101  1.03%
noninterest-bearing
demand deposits
                                                                          
(1) Income on debt securities, equity securities and revenue bonds included in
commercial real estate loans is 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 statement of net income. 
(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 yield on   
interest-earning assets and the cost of interest-bearing liabilties.
(5) Net interest margin represents net interest income
(tax-equivalent basis) divided by average interest-earning                
assets.
(6) Annualized.                                                           
                                                                          

 
MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Selected Financial Highlights
(Unaudited)
                                                                         
                             At or For the Three Months   At or For the Nine
                             Ended                        Months Ended
                             September 30,                September 30,
                             2013           2012          2013          2012
                                                                         
Key Performance Ratios                                                   
Return on average assets (1)  0.83%          0.50%         0.62%         0.67%
Return on average equity (1)  8.79           4.70          6.35          6.05
Stockholders' equity to       9.18           10.48         9.18          10.48
total assets
Interest rate spread (1) (2)  3.02           3.12          3.09          3.25
Net interest margin (1) (3)   3.17           3.29          3.24          3.42
Non-interest expense to       2.43           2.66          2.59          2.87
average assets (1)
Efficiency ratio (4)          73.05          74.14         76.62         77.93
                                                                         
                             September 30,  December 31,  September 30,
                             2013           2012          2012           
                                                                         
Asset Quality Ratios                                                     
Allowance for loan            1.11%          1.13%         1.13%         
losses/total loans
Allowance for loan            54.33          51.81         45.71         
losses/non-performing loans
Non-performing loans/total    2.04           2.19          2.48          
loans
Non-performing loans/total    1.64           1.74          1.84          
assets
Non-performing assets/total   1.71           1.85          1.95          
assets
                                                                         
Share Related                                                            
Book value per share          $ 11.04        $ 10.57       $ 10.54       
Tangible book value per       $ 10.42        $ 9.95        $ 9.92        
share 
Market value per share        $ 21.79        $ 16.78       $ 16.50       
Shares outstanding           22,063,193     22,135,855    22,075,865     
(1) Annualized.                                                          
(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) The efficiency ratio represents non-interest expense divided by the sum of
net interest income and non-interest income excluding gains or losses on
securities and gain on sale of investment in affiliate bank.
                                                                         
                                                                         

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