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MERIDIAN REPORTS 61 PERCENT INCREASE IN FIRST QUARTER EARNINGS

 MERIDIAN REPORTS 61 PERCENT INCREASE IN FIRST QUARTER EARNINGS
 READING, Pa., April 15 /PRNewswire/ -- Meridian Bancorp, Inc. (NASDAQ-NMS: MRDN) today reported net income of $27.1 million for the first quarter of 1992 compared with $16.8 million in the first quarter of 1991, an increase of 61 percent.
 Earnings per fully diluted share increased 46 percent to $.60 in 1992 compared to $.41 in the first quarter of last year. Average fully diluted shares outstanding increased in the quarter-to-quarter comparison by 4.1 million shares primarily because of the sale of common stock in September 1991.
 Income from continuing operations was also $27.1 million or $.60 per fully diluted share in the first quarter of this year, an increase of 33 percent when compared to $20.3 million or $.50 per fully diluted share for the first quarter of 1991. Earnings from continuing operations exclude the results of Meridian's discontinued title insurance operations.
 "All core businesses reported strong performance in the first quarter," said Samuel A. McCullough, chairman and chief executive officer. "The strong earnings in the first quarter of 1992 reflect the positive influence of actions we have taken over the past 18 months. We have taken steps to improve our balance sheet, capital position, and our expense management in addition to finding ways to strengthen revenues."
 The significant improvement in net income resulted primarily from the following factors:
 -- An increase of $4.8 million in net interest income on a taxable- equivalent basis.
 -- An increase of 34 percent in fee-based and related revenues, both in Meridian's Banking and Financial Services Groups, compared to an increase of 12 percent in other expenses.
 -- The first quarter of 1992 did not include a provision for discontinued title insurance operations. The first quarter of last year included an after-tax provision of $3.5 million.
 Net Interest Income
 Net interest income on a taxable-equivalent basis was $118.4 million in the first quarter of 1992 compared to $113.6 million in the same quarter of 1991. Widening spreads between the yields on interest- earning assets and the cost of interest-bearing liabilities more than offset a slight decline in average interest-earning assets. The net interest yield on a taxable-equivalent basis was 4.64 percent in the first quarter of 1992 compared to 4.42 percent in the first quarter of 1991.
 Other Income and Other Expenses
 The increase of 34 percent in other income reflects increases in most major categories of fee-based income, especially in mortgage banking, broker-dealer and investment banking, and service charges on deposits and fees for other customer services.
 Approximately 80 percent of the increase in other expenses relates to higher levels of expense in the mortgage banking and the broker- dealer and investment banking functions as a result of the expansion of these units over the past twelve months. The increase in refinancing activity over that time period also resulted in higher expenses at Meridian Mortgage Corporation. An increase in FDIC deposit insurance premiums and various types of loan related costs, such as loan collection costs and foreclosed real estate expenses, also contributed to the increase in expenses between the two periods.
 Asset Quality
 Meridian's provision for possible loan losses was $16.3 million in the first quarter of 1992 compared to $27 million in the fourth quarter of 1991 and $18.7 million in the first quarter of 1991. The reserve for possible loan losses was 2.24 percent of total loans at March 31, 1992, compared to 2.23 percent at year-end 1991 and 1.86 percent a year ago.
 Non-performing loans were $148.3 million at March 31, 1992 or 2.01 percent of loans compared to $151.4 million or 2.05 percent at year-end 1991 and $143.2 million or 1.81 percent a year ago. Loans past due 90 days or more, which are not included in non-performing loans, were $50.2 million at March 31, 1992, $48.3 million at Dec. 31, 1991, and $65.1 million at March 31, 1991. The ratio of loan loss reserves to non-performing loans was 111 percent at March 31, 1992, compared to 109 percent at Dec. 31, 1991, and 102 percent at March 31, 1991. Net loans charged-off in the first quarter of 1992 were $16.3 million compared to $25 million in the fourth quarter of 1991 and $18.6 million in the first quarter of 1991. Total non-performing assets were $230.2 million at March 31, 1992, or 3.08 percent of loans and assets acquired in foreclosure, compared to $223.1 million or 2.98 percent at year-end 1991 and $174.9 million or 2.21 percent a year ago. The level of non-performing loans and assets reflects the impact of the recession and especially the continuing difficulty in the real estate sector of the regional economy.
 At March 31, 1992, Meridian's construction loans totaled $375.6 million and commercial mortgage loans totaled $1,362.1 million, representing 5 percent and 18 percent of total loans, respectively. The total of construction loans and commercial mortgages at the end of the quarter is down by $104.6 million from the $1,842.3 million at March 31, 1991. At March 31, 1992, loans in connection with highly leveraged transactions, as defined by the Federal Reserve Board, represented 1.6 percent of Meridian's total loan portfolio. Meridian had no foreign loan exposure.
 The balance in the reserve for possible loan losses reflects Meridian's continuing concerns about the economy, especially in the commercial and construction real estate sector, in the geographic markets served by Meridian. If the economy does not continue to improve, Meridian's borrowers may continue to experience difficulties and the level of Meridian's non-performing loans and assets, charge-offs and delinquencies may increase. If this occurs, further reserve strengthening through increases in the provision for possible loan losses may be required.
 Capital and Period-End Balances
 Shareholders' equity totaled $839.2 million or 7.21 percent of total assets at March 31, 1992, compared to $693.4 million or 6.17 percent a year ago. Meridian's risk-based capital ratio was 10.18 percent of total risk-weighted assets at March 31, 1992, well above regulatory requirements. The ratio was 10.01 percent at Dec. 31, 1991, and 8.42 percent at March 31, 1991. The significant improvement in these ratios reflects the retention of earnings, the receipt of the proceeds of $63 million from the sale of common stock in September 1991, and the reduction in asset levels resulting from the sales of residential mortgage loans and the credit card portfolio in 1991.
 Total assets at March 31, 1992, were $11.6 billion compared to $11.2 billion at March 31, 1991. Total loans were $7.4 billion compared to $7.9 billion a year ago. The decrease in the year-to-year comparison results primarily from the completed loan sales and the decline in loan demand as a result of the downturn in the economy. Total deposits at March 31, 1992, were $10 billion compared to $9.1 billion a year ago, a 10 percent increase. About one-half of this increase relates to the recent acquisition of approximately $440 million in deposits of Bell Federal Savings Bank from the Resolution Trust Corporation.
 Acquisitions
 During the first quarter of 1992, Meridian announced the signing of three acquisition agreements. "The merger with Peoples Bancorp, Inc. of Lebanon, Pa., the acquisition primarily of deposits and bank branches of Bell Federal Savings Bank from the Resolution Trust Corporation and the acquisition primarily of deposits and bank branches from Liberty Savings Bank offer some attractive market extensions and market fill-ins to our Meridian Bank branching system," said McCullough. He characterized the transactions as being "consistent with Meridian's acquisition strategy of pursuing in-market opportunities with low-risk profiles, which collectively will be accretive to earnings per share in 1992." The acquisition of Bell was completed in March 1992 and the Peoples and Liberty transactions are expected to be completed before the end of 1992. These acquisitions will add approximately $850 million to Meridian's deposits.
 Discontinued Title Insurance Operations
 The sale of the title insurance operations to Fidelity National Financial, Inc. of Irvine, Calif., is expected to close by June 30, 1992. The pricing of the sale will be based on the book value of the title insurance operations on Feb. 28, 1992.
 Meridian Bancorp, Inc., is Pennsylvania's fourth largest bank holding company. Through its banking and non-banking subsidiaries, Meridian operates nationally with its banking focus in 16 Pennsylvania counties and the state of Delaware.
 MERIDIAN BANCORP, INC.
 (Dollars in thousands, except per-share data)
 Quarter ended March 31 1992 1991 Pct. Chg.
 Income from continuing operations $27,073 $20,308 33
 Loss from discontinued operations --- (3,500)
 Net income 27,073 16,808 61
 Per common share(a):
 Income from continuing operations $.60 $.50 20
 Loss from discontinued operations --- (.09)
 Net income $.60 $.41 46
 Return on average assets(b) (pct.) .97 .73 ---
 Return on average common
 Shareholders' equity(b) (pct.) 13.22 11.85 ---
 At quarter end:
 Assets $11,633,295 $11,232,271 4
 Deposits 9,953,626 9,054,771 10
 Loans 7,382,425 7,898,584 (7)
 Shareholders' equity 839,220 693,432 21
 (A) Based on average fully diluted shares outstanding of 44,828,604 and 40,765,914 for the quarters ended March 31, 1992 and 1991, respectively.
 (B) Calculation is based on continuing operations.
 /delval/
 -0- 4/15/92
 /CONTACT: George E. Biechler, 215-655-2470, Cathy Souders, 215-655-2463, or W. Strugis Corbett (financial), 215-655-2438, all of Meridian Bancorp/
 (MRDN) CO: Meridian Bancorp, Inc. ST: Pennsylvania IN: FIN SU: ERN


KA -- PH004 -- 8474 04/15/92 07:55 EDT
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