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MERIDIAN REPORTS CONTINUATION OF STRONG EARNINGS; NET INCOME INCREASES 8 PERCENT FOR THE THIRD QUARTER

 MERIDIAN REPORTS CONTINUATION OF STRONG EARNINGS;
 NET INCOME INCREASES 8 PERCENT FOR THE THIRD QUARTER
 READING, Pa., Oct. 15 /PRNewswire/ -- Meridian Bancorp, Inc. (NASDAQ-NMS: MRDN) today reported net income of $28.1 million or $.63 per fully diluted share for the third quarter of 1992 compared to $26.0 million or $.64 per fully diluted share in the third quarter of 1991, an increase in net income of 8 percent.
 Net income for the first nine months of 1992 was $84.4 million compared to $76.4 million for the same period of last year, an increase of 11 percent. This increase occurred despite the fact that earnings in 1991 included the impact of an after-tax gain of $26.8 million or $.66 per fully diluted share on the sale of Meridian's credit card portfolio. Earnings per fully diluted share were $1.88 in 1992 compared to $1.87 for the nine months ended Sept. 30, 1991. Average fully diluted shares outstanding increased by approximately 4.1 million shares in the third quarter and first nine months of 1992 compared to the same periods of last year primarily because of the sale of common stock in September 1991 and shares issued under Meridian's Dividend Reinvestment Plan.
 "Meridian's third quarter performance continues the trend of strong quarterly results that began in the third quarter of 1991," said Samuel A. McCullough, Chairman and Chief Executive Officer. "These results reflect the strength of our banking business and our trust and securities businesses, as well as favorable interest spreads and asset quality improvement. Improvements to our capital ratios and liquidity position continue to improve, and our core deposits continue to grow, resulting in a balance sheet that compares favorably to our peers'."
 Net Interest Income
 Net interest income was $123.7 million in the third quarter of 1992 compared to $106.4 million in the same quarter of 1991. Widening spreads between the yields on interest-earning assets and the cost of interest-bearing liabilities and an increase in interest-earning assets resulted in a net interest yield on a taxable-equivalent basis of 4.74 percent in the third quarter of 1992 compared to 4.70 percent in the second quarter of 1992 and 4.44 percent in the third quarter of 1991.
 Provision for Possible Loan Losses, Non-Performing Loans and
 Non-Performing Assets Decline
 Meridian's provision for possible loan losses was $14.5 million in the third quarter of 1992 compared to $15.2 million in the second quarter of 1992 and $19.9 million in the third quarter of 1991. Non-performing loans decreased to $132.0 million at Sept. 30, 1992, or 1.82 percent of loans from $140.6 million or 1.91 percent at June 30, 1992, and $144.8 million or 1.91 percent a year ago. Net loans charged- off in the third quarter of 1992 were $17.0 million compared to $18.1 million in the second quarter of 1992 and $19.1 million in the third quarter of 1991. Total non-performing assets were $215.7 million at Sept. 30, 1992, or 2.93 percent of loans and assets acquired in foreclosure, compared to $222.9 million or 3.00 percent at June 30, 1992, and $195.0 million or 2.55 percent a year ago.
 The allowance for possible loan losses was 2.19 percent of total loans at Sept. 30, 1992, compared to 2.21 percent at June 30, 1992, and 2.15 percent a year ago. The ratio of the allowance for possible loan losses to non-performing loans was 121 percent at Sept. 30, 1992, compared to 115 percent at June 30, 1992, and 113 percent a year ago.
 Other Income and Operating Expenses
 Other income increased slightly in the third quarter of 1992 compared to the same period of last year, which included a gain of $3.2 million on the sale of certain mortgage loans by the banking group. Revenues increased by $5.6 million in Meridian's broker-dealer and investment banking operations; trust revenues increased by $836,000 between the two quarters. However, mortgage banking revenues declined as a result of a $3 million charge related to the establishment of reserves against purchased mortgage servicing assets. The reserves were established because the current and anticipated volume of mortgage loan refinancing activity may impact the level of future revenues related to these assets.
 Operating expenses increased by 16 percent between the two quarters, mainly because of
 -- Higher operating costs resulting from recent banking acquisitions, which added ten branches to Meridian's network. These increased costs were more than offset by an increase in net interest income from these branches.
 -- The expansion of the broker-dealer and investment banking operations.
 -- An increase in commissions and bonuses associated with higher broker-dealer revenues.
 -- Higher operating expenses in the mortgage banking operations primarily because of the current volume of mortgage loan refinancing activity.
 Capital and Period-End Balances
 Shareholders' equity totaled $873.8 million or 7.36 percent of total assets at Sept. 30, 1992, compared to $792.8 million or 7.13 percent a year ago. The ratio of tangible shareholders' equity to assets, which excludes $149.4 million of intangible assets, was 6.18 percent at Sept. 30, 1992, compared to 6.07 percent at Sept. 30, 1991. Meridian's risk- based capital ratio was 11.37 percent of total risk weighted assets at Sept. 30, 1992, well above regulatory requirements. The ratio was 10.27 percent at June 30, 1992, and 9.82 percent at Sept. 30, 1991. The significant improvement in risk-based capital reflects the issuance of $100 million of subordinated debentures in July 1992.
 Total assets at Sept. 30, 1992, were $11.9 billion compared to $11.1 billion at Sept. 30, 1991. Total loans were $7.3 billion compared to $7.6 billion a year ago. The decrease in loans resulted from a reduction in the residential mortgage loan portfolio because of mortgage refinancings and the continuing softness in demand for commercial loans. This change was partially offset by an increase in consumer loans. Total deposits at Sept. 30, 1992, were $9.8 billion compared to $9.3 billion a year ago, a 6 percent increase. Meridian continues to fund a significant portion of its assets with deposits acquired in its local marketplace.
 Meridian Bancorp, Inc., a banking and financial services holding company, is based in Reading. Meridian, through its subsidiaries, operates nationally with its banking focus in 16 Pennsylvania counties and the state of Delaware.
 MERIDIAN BANCORP, INC.
 Financial Highlights
 (Dollars in thousands, except per-share data)
 Three months ended Sept. 30, Sept. 30, Pct. June 30,
 1992 1991 change 1992
 RESULTS OF OPERATIONS:
 Interest income $207,201 $235,331 -12 $212,514
 Interest expense 83,528 128,911 -35 92,720
 Net interest income 123,673 106,420 16 119,794
 Provision for possible
 loan losses 14,512 19,890 -27 15,150
 Net interest income after
 provision for possible
 loan losses 109,161 86,530 26 104,644
 Other income 54,438 53,831 1 55,468
 Other expenses 125,506 108,466 16 119,166
 Income from continuing
 operations before
 income taxes 38,093 31,895 19 40,946
 Provision for income
 taxes 9,958 5,916 68 11,731
 Income from continuing
 operations 28,135 25,979 8 29,215
 Loss from discontinued
 operations, net of
 taxes --- --- --- ---
 Net income 28,135 25,979 8 29,215
 Net interest yield
 (taxable equivalent
 basis) (percent) 4.74 4.44 --- 4.70
 Return on average
 assets(A) (percent) .95 .93 --- 1.01
 Return on average
 common shareholders'
 equity(A) (percent) 12.96 14.30 --- 13.92
 Fully diluted earnings
 per share:
 Income from continuing
 operations $.63 $.64 -2 $.65
 Loss from discontinued
 operations, net of taxes --- --- --- ---
 Net income .63 .64 -2 .65
 Dividends declared per
 common share(B) .30 .30 --- .30
 Common dividend
 payout ratio(B) (percent) 48 47 --- 46
 FINANCIAL CONDITION:
 AVERAGE BALANCES:
 Investment
 securities $2,587,141 $1,928,403 34 $2,410,670
 Loans 7,309,398 7,565,470 -3 7,336,660
 Assets 11,766,822 11,025,777 7 11,600,905
 Deposits 9,936,065 9,228,145 8 9,807,057
 Total shareholders'
 equity 863,534 720,722 20 843,882
 Primary shares
 outstanding 45,047,053 40,866,314 10 44,968,108
 Fully diluted shares
 outstanding 45,047,053 40,877,684 10 45,006,104
 Total shareholders'
 equity to assets
 (percent) 7.34 6.54 --- 7.27
 PERIOD-END:
 Investment
 securities $2,595,574 $2,013,234 29 $2,569,939
 Loans 7,273,616 7,587,151 -4 7,348,213
 Assets 11,878,892 11,115,708 7 11,912,406
 Deposits 9,828,469 9,264,523 6 10,143,975
 Total shareholders'
 equity 873,751 792,822 10 856,611
 Book value per
 common share 19.55 18.01 9 19.22
 Common shares
 outstanding 44,686,196 44,024,648 2 44,571,696
 Total shareholders'
 equity to assets
 (percent) 7.36 7.13 --- 7.19
 Risk-based capital ratio 11.37 9.82 --- 10.27
 Allowance for possible
 loan losses 159,586 162,960 -2 162,046
 Allowance for possible
 loan losses to loans
 (percent) 2.19 2.15 --- 2.21
 Allowance for possible
 loan losses to non-
 performing loans
 (percent) 121 113 --- 115
 Non-preforming assets as
 a percentage of total
 period-end loans and
 assets acquired in
 foreclosure 2.93 2.55 --- 3.00
 Non-performing assets and
 loans past due 90 or more
 days as to interest or
 principal as a percentage
 of loans and assets acquired
 in foreclosure 3.42 3.22 --- 3.56
 Nine months ended Sept. 30, Sept. 30, Pct.
 1992 1991 change
 RESULTS OF OPERATIONS:
 Interest income $634,763 $739,411 -14
 Interest expense 277,464 415,904 -33
 Net interest income 357,299 323,507 10
 Provision for possible
 loan losses 45,938 72,399 -37
 Net interest income
 after provision for
 possible loan losses 311,361 251,108 24
 Other income 165,088 186,526 -11
 Other expenses 359,859 323,844 11
 Income from continuing
 operations before
 income taxes 116,590 113,790 2
 Provision for income
 taxes 32,167 30,928 4
 Income from continuing
 operations 84,423 82,862 2
 Loss from discontinued
 operations, net of
 taxes --- (6,500) ---
 Net income $84,423 $76,362 11
 Net interest yield
 (taxable equivalent
 basis) (percent) 4.70 4.48 ---
 Return on average
 assets(A) (percent) .98 .99 ---
 Return on average
 common shareholders'
 equity(A) (percent) 13.36 15.58 ---
 Fully diluted earnings
 per share:
 Income from continuing
 operations $1.88 $2.03 -7
 Loss from discontinued
 operations, net of taxes --- (.16) ---
 Net income 1.88 1.87 1
 Dividends declared per
 common share(B) .60 .90 -33
 Common dividend
 payout ratio(B) (percent) 32 48 ---
 FINANCIAL CONDITION:
 AVERAGE BALANCES:
 Investment
 securities $2,406,598 $1,879,002 28
 Loans 7,336,823 7,815,923 -6
 Assets 11,542,035 11,173,857 3
 Deposits 9,720,357 9,153,740 6
 Total shareholders'
 equity 843,790 711,096 19
 Primary shares
 outstanding 44,872,037 40,796,699 10
 Fully diluted shares
 outstanding 44,894,646 40,852,731 10
 Total shareholders'
 equity to assets
 (percent) 7.31 6.36 ---
 (A) Calculation is based upon continuing operations.
 (B) Reflects new dividend payment schedule adopted in 1992.
 /delval/
 -0- 10/15/92
 /CONTACT: George E. Biechler, 215-655-2470; Bob Shade, 215-655-2463; David E. Sparks (financial), 215-655-3338; W. Sturgis Corbett (financial), 215-655-2438, all of Meridian Bancorp/ CO: Meridian Bancorp, Inc. ST: Pennsylvania IN: FIN SU: ERN


CC-MP -- PH035 -- 0523 10/15/92 14:34 EDT
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