Profile: Meridian Bancorp Inc (EBSB.O)
19 Dec 2014
Meridian Bancorp Inc, formerly Meridian Interstate Bancorp, Inc., is a mid-tier stock holding company of East Boston Savings Bank (the Bank). The Bank is a state-chartered stock savings bank that operates from 24 full-service locations and two loan centers in the Boston metropolitan area. East Boston Savings Bank operates eight of its full-service locations and a loan center under the name Mt. Washington Bank, a division of East Boston Savings Bank. The Bank offers a variety of deposit and loan products to individuals and businesses located in its primary market, which consists of Suffolk, Middlesex and Essex Counties, Massachusetts. The Bank operates as a community-oriented financial institution offering financial services to consumers and businesses. As of December 31, 2011, Meridian Financial Services, Incorporated owned 59.4% interest of the Company.
The Company’s loan portfolio includes commercial real estate loans, one-to four-family residential loans, multi-family real estate loans, construction loans, commercial business loans, home equity lines of credit and consumer loans. As of December 31, 2011, its commercial real estate loans were $528.6 million, or 39%, respectively, of its total loan portfolio. The commercial real estate loan portfolio consisted of $68.7 million of fixed-rate loans and $459.9 million of adjustable-rate loans, as of December 31, 2011. The Company’s one-to four-family residential loan portfolio consists of mortgage loans that enable borrowers to purchase or refinance existing homes, most of which serve as the primary residence of the owner. As of December 31, 2011, one-to four-family residential loans were $417.9 million, or 30.9% of its total loan portfolio, consisted of $169.9 million and $248 million of fixed-rate and adjustable-rate loans, respectively. It also offers loans secured by one-to four-family properties that are not owner-occupied. As of December 31, 2011, land loans totaled $1.6 million. Its lending business also involves the purchase and sale of loan participation interests.
As of December 31, 2011, the Company’s multi-family real estate loans were $176.7 million, or 13%, of its total loan portfolio. The multi-family loan portfolio consisted of $34.5 million of fixed-rate loans and $142.2 million of adjustable-rate loans, as of December 31, 2011. Its multi-family real estate loans are generally secured by apartment buildings. As of December 31, 2011, construction loans were $93.2 million, or 6.9% of its total loan portfolio. The Company primarily provides construction loans for commercial development projects, including apartment buildings, small industrial buildings and retail and office buildings. It also originates construction and site development loans to contractors and builders to finance the construction of single-family homes and subdivisions. As of December 31, 2011, it had $31.2 million in construction loans for one-to four-family residential properties. Also as of December 31, 2011, it had $62 million in construction loans on commercial and multi-family real estate consisting of mixed-use and non-residential loans.
The Company provides commercial business loans primarily in its market area to a variety of professionals, sole proprietorships, nonprofit organizations and small businesses. As of December 31, 2011, commercial business loans were $71.5 million, or 5.3% of its total loan portfolio. The Company offers home equity lines of credit, which are secured by owner-occupied one-to four-family residences. As of December 31, 2011, the balance owed on home equity lines of credit amounted to $61million, or 4.5% of its total loan portfolio. The Company occasionally provides automobile loans, loans secured by passbook or certificate accounts and overdraft loans. As of December 31, 2011, consumer loans were $5.2 million, or 0.4% of total loans.
The Company invests in various types of assets, including the United SatesTreasury obligations, securities of various government-sponsored enterprises, residential mortgage-backed securities and municipal governments, deposits at the Federal Home Loan Bank of Boston, certificates of deposit of federally insured institutions, investment grade corporate bonds and investment grade marketable equity securities, including common stock and money market mutual funds. The Company’s equity securities generally pay dividends. As of December 31, 2011, its investment portfolio consisted primarily of corporate bonds, municipal bonds, investment-grade marketable equity securities, money market mutual fund investments, short-term obligations of government-sponsored enterprises and mortgage-backed securities. As of December 31, 2011, the securities portfolio was $335.2 million, or 17% of total assets.
Sources of Funds
Deposits, borrowings and loan repayments are the major sources of the Company’s funds for lending and other investment purposes. The majority of its depositors reside in its market area. The Company offers selection of deposit instruments, including non-interest-bearing demand deposits, such as checking accounts; interest-bearing demand accounts, such as negotiable order of withdrawal (NOW) and money market accounts; savings accounts, and certificates of deposit. In addition to accounts for individuals, it also offers several commercial checking accounts designed for the businesses operating in its market area. The Company uses borrowings from the Federal Home Loan Bank (FHLB) of Boston to supplement its supply of funds for loans and investments. In addition, it also purchases federal funds from local banking institutions as an additional short-term funding source for the Bank. As of December 31, 2011, core deposits were 59.8% of total deposits. As of December 31, 2011, FHLB advances totaled $114.9 million
In addition to East Boston Savings Bank, the Company has another wholly owned subsidiary, Meridian Interstate Funding Corporation. The Company also owns 43.1% of Hampshire First Bank. The Bank’s subsidiaries include Prospect, Inc., which engages in securities transactions on its own behalf, EBOSCO, LLC and Berkeley Riverbend Estates LLC, both of which hold real estate; East Boston Investment Services, Inc., and Meridian Funding Corporation.
The Company offer customers a range of non-deposit products, including mutual funds, annuities, stocks and bonds, which are offered and cleared by a third-party broker-dealer. It also offers customers long-term care insurance through a third-party insurance company, which generates commissions for it.
Meridian Bancorp Inc
10 Meridian St
BOSTON MA 02128-1963