##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 FORM 10-Q
  þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended March 31, 2010
 OR
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the transition period from
 _____ 
to
 _____
 Commission file number: 001-33898
 Meridian Interstate Bancorp, Inc.
  Massachusetts
    
    20-4652200(State or other jurisdiction of incorporation or 
organization)
    
    (I.R.S. Employer Identification No.)
 10 Meridian Street, East Boston, Massachusetts 02128
 617) 567-1500  (Registrants telephone number, including area code)
 Not Applicable  (Former name, former address and former fiscal year, if changed since last report)
 þ o
 o o
 
 Large Accelerated Filer o
    
    Accelerated Filer þ
    
    Non-accelerated Filer o
    
    Smaller Reporting Company o
 o þ




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##### 



MERIDIAN INTERSTATE BANCORP, INC.
 FORM 10-Q
 INDEX
 PagePART I. FINANCIAL INFORMATIONItem 1. Financial StatementsConsolidated
Balance Sheets at
March 31, 2010 and December 31, 2009 (Unaudited)
    
    
    1Consolidated
Statements of Operations for the three months
ended March 31, 2010 and 2009 (Unaudited)
    
    
    2Consolidated Statements of Changes in Stockholders Equity
for the three months ended March 31, 2010 and 2009 (Unaudited)
    
    
    3Consolidated
Statements of Cash Flows for the three months
ended March 31, 2010 and 2009 (Unaudited)
    
    
    4Notes to Unaudited Consolidated Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    26PART II. OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    27Item 1A. Risk Factors
    
    
    27Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    27Item 3. Defaults Upon Senior Securities
    
    
    27Item 4. Removed and Reserved
    
    
    27Item 5. Other Information
    
    
    27Item 6. Exhibits
    
    
    28Signatures
    
    
    29Exhibit 31.1Exhibit 31.2Exhibit 32




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##### Table of Contents



PART I  FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
 
 Consolidated Balance Sheets
 (Unaudited)
 March 31,
    
    
    December 31,(Dollars in thousands)
    
    2010
    
    
    2009ASSETSCash and due from banks
    
    $
    83,585
    
    
    $
    9,010Federal funds sold
    
    
    2,929
    
    
    
    10,956Total cash and cash equivalents
    
    
    86,514
    
    
    
    19,966Certificates of deposit  affiliate bank
    
    
    3,100
    
    
    
    3,000Securities available for sale, at fair value
    
    
    350,054
    
    
    
    293,367Federal Home Loan Bank stock, at cost
    
    
    12,538
    
    
    
    4,605Loans held for sale
    
    
    4,032
    
    
    
    955Loans
    
    
    1,153,404
    
    
    
    822,542Less allowance for loan losses
    
    
    (10,629
    )
    
    
    (9,242
    )Loans, net
    
    
    1,142,775
    
    
    
    813,300Bank-owned life insurance
    
    
    32,953
    
    
    
    23,721Foreclosed real estate, net
    
    
    5,077
    
    
    
    2,869Investment in affiliate bank
    
    
    11,075
    
    
    
    11,005Premises and equipment, net
    
    
    33,332
    
    
    
    23,195Accrued interest receivable
    
    
    7,075
    
    
    
    6,231Prepaid deposit insurance
    
    
    4,793
    
    
    
    5,114Deferred tax asset, net
    
    
    11,426
    
    
    
    1,523Goodwill
    
    
    12,374
    
    
    
    Other assets
    
    
    2,165
    
    
    
    2,535Total assets
    
    $
    1,719,283
    
    
    $
    1,211,386LIABILITIES AND STOCKHOLDERS EQUITYDeposits:Non interest-bearing
    
    $
    101,257
    
    
    $
    63,606Interest-bearing
    
    
    1,233,627
    
    
    
    858,869Total deposits
    
    
    1,334,884
    
    
    
    922,475Short-term borrowings  affiliate bank
    
    
    6,556
    
    
    
    3,102Short-term borrowings  other
    
    
    10,016
    
    
    
    22,108Long-term debt
    
    
    139,674
    
    
    
    50,200Accrued expenses and other liabilities
    
    
    22,741
    
    
    
    13,086Total liabilities
    
    
    1,513,871
    
    
    
    1,010,971Stockholders equity:Common stock, no par value 50,000,000 shares authorized;
23,000,000 shares issued; 22,615,294 and 22,098,565 shares
outstanding at March 31, 2010 and December 31, 2009, respectively
    
    
    
    
    
    
    Additional paid-in capital
    
    
    96,585
    
    
    
    100,972Retained earnings
    
    
    112,049
    
    
    
    109,189Accumulated other comprehensive income
    
    
    7,379
    
    
    
    5,583Treasury stock, at cost, 3,391 and 517,500 shares
at March 31, 2010 and December 31, 2009, respectively
    
    
    (30
    )
    
    
    (4,535
    )Unearned compensation  ESOP, 734,850 and 745,200 shares
at March 31, 2010 and December 31, 2009, respectively
    
    
    (7,349
    )
    
    
    (7,452
    )Unearned compensation  restricted shares, 381,315 and 383,935
shares at March 31, 2010 and December 31, 2009, respectively
    
    
    (3,222
    )
    
    
    (3,342
    )Total stockholders equity
    
    
    205,412
    
    
    
    200,415Total liabilities and stockholders equity
    
    $
    1,719,283
    
    
    $
    1,211,386
   1




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##### Table of Contents



MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Operations
 (Unaudited)
 Three Months Ended March 31,(Dollars in thousands, except per share amounts)
    
    2010
    
    
    2009Interest and dividend income:Interest and fees on loans
    
    $
    16,210
    
    
    $
    10,645Interest on debt securities
    
    
    3,441
    
    
    
    2,455Dividends on equity securities
    
    
    205
    
    
    
    293Interest on certificates of deposit
    
    
    17
    
    
    
    42Interest on other interest-earning assets
    
    
    12
    
    
    
    12Total interest and dividend income
    
    
    19,885
    
    
    
    13,447Interest expense:Interest on deposits
    
    
    4,199
    
    
    
    5,263Interest on short-term borrowings
    
    
    29
    
    
    
    35Interest on long-term debt
    
    
    886
    
    
    
    497Total interest expense
    
    
    5,114
    
    
    
    5,795Net interest income
    
    
    14,771
    
    
    
    7,652Provision for loan losses
    
    
    1,374
    
    
    
    546Net interest income, after provision
for loan losses
    
    
    13,397
    
    
    
    7,106Non-interest income:Customer service fees
    
    
    1,414
    
    
    
    697Loan fees
    
    
    158
    
    
    
    150Gain on sales of loans, net
    
    
    565
    
    
    
    183Loss on securities, net
    
    
    
    
    
    
    (124
    )Income from bank-owned life insurance
    
    
    292
    
    
    
    214Equity income (loss) on investment in affiliate bank
    
    
    70
    
    
    
    (27
    )Total non-interest income
    
    
    2,499
    
    
    
    1,093Non-interest expenses:Salaries and employee benefits
    
    
    6,167
    
    
    
    6,314Occupancy and equipment
    
    
    1,484
    
    
    
    864Data processing
    
    
    754
    
    
    
    438Marketing and advertising
    
    
    466
    
    
    
    234Professional services
    
    
    720
    
    
    
    652Foreclosed real estate expense, net
    
    
    154
    
    
    
    255Deposit insurance
    
    
    515
    
    
    
    310Other general and administrative
    
    
    1,089
    
    
    
    610Total non-interest expenses
    
    
    11,349
    
    
    
    9,677Income (loss) before income taxes
    
    
    4,547
    
    
    
    (1,478
    )Provision (benefit) for income taxes
    
    
    1,687
    
    
    
    (370
    )Net income (loss)
    
    $
    2,860
    
    
    $
    (1,108
    )Income (loss) per share:Basic
    
    $
    0.13
    
    
    $
    (0.05
    )Diluted
    
    $
    0.13
    
    
    $
    (0.05
    )Weighted average shares:Basic
    
    
    22,133,155
    
    
    
    22,050,960Diluted
    
    
    22,133,155
    
    
    
    22,050,960
   2




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##### Table of Contents



MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 Three Months Ended March 31, 2010 and 2009
 Shares of No
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    UnearnedPar Common
    
    
    Additional
    
    
    
    
    
    
    Accumulated Other
    
    
    
    
    
    
    Unearned
    
    
    CompensationStock
    
    
    Paid-in
    
    
    Retained
    
    
    Comprehensive
    
    
    Treasury
    
    
    Compensation
    
    
    Restricted(Dollars in thousands)
    
    Outstanding
    
    
    Capital
    
    
    Earnings
    
    
    Income (Loss)
    
    
    Stock
    
    
    ESOP
    
    
    Shares
    
    
    TotalThree Months Ended March 31, 2009Balance at December 31, 2008
    
    
    22,750,000
    
    
    $
    100,684
    
    
    $
    105,426
    
    
    $
    (6,205
    )
    
    $
    
    
    
    $
    (7,866
    )
    
    $
    (2,199
    )
    
    $
    189,840Comprehensive loss:Net loss
    
    
    
    
    
    
    
    
    
    
    (1,108
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,108
    )Change in net unrealized loss on securities available for
sale, net of reclassification adjustment and tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (518
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (518
    )Total comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,626
    )ESOP shares earned (10,350 shares)
    
    
    
    
    
    
    (17
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104
    
    
    
    
    
    
    
    87Purchase of 164,000 shares
for restricted share plan
    
    
    (164,000
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,468
    )
    
    
    (1,468
    )Share-based compensation expense
    
    
    
    
    
    
    112
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    101
    
    
    
    213Balance at March 31, 2009
    
    
    22,586,000
    
    
    $
    100,779
    
    
    $
    104,318
    
    
    $
    (6,723
    )
    
    $
    
    
    
    $
    (7,762
    )
    
    $
    (3,566
    )
    
    $
    187,046Three Months Ended March 31, 2010Balance at December 31, 2009
    
    
    22,098,565
    
    
    $
    100,972
    
    
    $
    109,189
    
    
    $
    5,583
    
    
    $
    (4,535
    )
    
    $
    (7,452
    )
    
    $
    (3,342
    )
    
    $
    200,415Comprehensive income :Net income
    
    
    
    
    
    
    
    
    
    
    2,860
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,860Change in net unrealized gain on securities available
for sale, net of reclassification adjustment and tax
effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,694
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,694Change in prior service costs and
actuarial losses, net of tax effects
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    102Total comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,656ESOP shares earned (10,350 shares)
    
    
    
    
    
    
    (3
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    103
    
    
    
    
    
    
    
    100Share-based compensation expense
    
    
    2,620
    
    
    
    121
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    120
    
    
    
    241Issuance of 514,109 shares to Meridian Financial Services,
Incorporated, the mutual holding company
    
    
    514,109
    
    
    
    (4,505
    )
    
    
    
    
    
    
    
    
    
    
    4,505
    
    
    
    
    
    
    
    
    
    
    
    Balance at March 31, 2010
    
    
    22,615,294
    
    
    $
    96,585
    
    
    $
    112,049
    
    
    $
    7,379
    
    
    $
    (30
    )
    
    $
    (7,349
    )
    
    $
    (3,222
    )
    
    $
    205,412
   3




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##### Table of Contents



MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
 
 Consolidated Statements of Cash Flows
 (Unaudited)
 Three Months Ended March 31,(In thousands)
    
    2010
    
    
    2009Cash flows from operating activities:Net income (loss)
    
    $
    2,860
    
    
    $
    (1,108
    )Adjustments to reconcile net income (loss) to net cash
provided by operating activities:Amortization of acquisition fair value adjustments
    
    
    (533
    )
    
    
    Earned ESOP shares
    
    
    100
    
    
    
    87Provision for loan losses
    
    
    1,374
    
    
    
    546Amortization of net deferred loan origination fees
    
    
    (672
    )
    
    
    (57
    )Net amortization of securities available for sale
    
    
    309
    
    
    
    302Depreciation and amortization expense
    
    
    591
    
    
    
    329Loss on securities, net
    
    
    
    
    
    
    124Gains on sales of loans held in portfolio, net
    
    
    (352
    )
    
    
    Gain (loss) and provision for foreclosed real estate
    
    
    (26
    )
    
    
    148Deferred income tax provision (benefit)
    
    
    (1,996
    )
    
    
    14Income from bank-owned life insurance
    
    
    (292
    )
    
    
    (214
    )Equity (income) loss on investment in affiliate bank
    
    
    (70
    )
    
    
    27Share-based compensation expense
    
    
    241
    
    
    
    213Net changes in:Loans held for sale
    
    
    1,842
    
    
    
    Accrued interest receivable
    
    
    706
    
    
    
    621Prepaid deposit insurance
    
    
    321
    
    
    
    Other assets
    
    
    3,968
    
    
    
    814Accrued expenses and other liabilities
    
    
    3,913
    
    
    
    4,066Net cash provided by operating activities
    
    
    12,284
    
    
    
    5,912Cash flows from investing activities:Cash provided by business combination
    
    
    14,422
    
    
    
    Maturities of certificates of deposit
    
    
    
    
    
    
    5,000Activity in securities available for sale:Proceeds from maturities, calls and principal payments
    
    
    15,619
    
    
    
    17,751Purchases
    
    
    (24,270
    )
    
    
    (45,292
    )Loans originated, net of principal payments received
    
    
    (19,088
    )
    
    
    (34,632
    )Proceeds from sales of fixed rate loans held in portfolio
    
    
    34,488
    
    
    
    Purchases of premises and equipment
    
    
    (78
    )
    
    
    (206
    )Capitalized cost on foreclosed real estate
    
    
    (197
    )
    
    
    (180
    )Proceeds from sales of foreclosed real estate
    
    
    667
    
    
    
    512Net cash provided by (used) in investing activities
    
    
    21,563
    
    
    
    (57,047
    )
   4




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##### Table of Contents



MERIDIAN INTERSTATE BANCORP, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
 Three Months Ended March 31,(In thousands)
    
    2010
    
    
    2009Cash flows from financing activities:Net increase in deposits
    
    
    32,389
    
    
    
    62,408Purchase of stock for equity incentive plan
    
    
    
    
    
    
    (1,468
    )Net change in borrowings with maturities
less than three months
    
    
    (8,638
    )
    
    
    (265
    )Proceeds from Federal Home Loan Bank advances
with maturities of three months or more
    
    
    15,000
    
    
    
    Repayment of Federal Home Loan Bank advances
with maturities of three months or more
    
    
    (6,050
    )
    
    
    Net cash provided by financing activities
    
    
    32,701
    
    
    
    60,675Net change in cash and cash equivalents
    
    
    66,548
    
    
    
    9,540Cash and cash equivalents at beginning of period
    
    
    19,966
    
    
    
    20,265Cash and cash equivalents at end of period
    
    $
    86,514
    
    
    $
    29,805Supplemental cash flow information:Interest paid on deposits
    
    $
    4,087
    
    
    $
    5,332Interest paid on borrowings
    
    
    607
    
    
    
    532Income taxes paid
    
    
    15
    
    
    
    170Non-cash investing and financing activities:Transfers from loans to foreclosed real estate
    
    
    978
    
    
    
    325In conjunction with the purchase acquisition detailed
in Note 6 to
the Consolidated Financial Statements, assets were
acquired and
liabilities were assumed as follows:Fair value of assets acquired, net of cash acquired
    
    
    453,031
    
    
    
    Fair value of liabilities assumed
    
    
    467,453
    
    
    
    
   5




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##### Table of Contents



NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
 1. Basis of Presentation
  www.sec.gov
  2. Recent Accounting Pronouncements
  3. Fair Value Hierarchy
   6




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##### Table of Contents



Cash and cash equivalents
 Certificates of deposit
 Securities available for sale
  Federal Home Loan Bank stock
 Loans
held for sale
 Loans
 Deposits
 Borrowings
 Accrued interest
  7




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##### Table of Contents



Off-balance sheet credit-related instruments
 Assets Measured at Fair Value on a Recurring Basis:
  March 31, 2010Total Fair(In thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    ValueDebt securities:Corporate bonds
    
    $
    
    
    
    $
    226,265
    
    
    $
    
    
    
    $
    226,265Government sponsored enterprises
    
    
    
    
    
    
    6,435
    
    
    
    
    
    
    
    6,435Residential mortgage-backed securities:Government-sponsored enterprises
    
    
    
    
    
    
    42,827
    
    
    
    
    
    
    
    42,827Private label
    
    
    
    
    
    
    16,062
    
    
    
    
    
    
    
    16,062Other debt securities
    
    
    
    
    
    
    761
    
    
    
    
    
    
    
    761Total debt securities
    
    
    
    
    
    
    292,350
    
    
    
    
    
    
    
    292,350Marketable equity securities:Common stocks
    
    
    32,601
    
    
    
    
    
    
    
    
    
    
    
    32,601Money market mutual funds
    
    
    25,103
    
    
    
    
    
    
    
    
    
    
    
    25,103Total marketable equity securities
    
    
    57,704
    
    
    
    
    
    
    
    
    
    
    
    57,704Total securities available for sale
    
    $
    57,704
    
    
    $
    292,350
    
    
    $
    
    
    
    $
    350,054
 December 31, 2009Total Fair(In thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    ValueDebt securities:Corporate bonds
    
    $
    
    
    
    $
    220,007
    
    
    $
    
    
    
    $
    220,007Government-sponsored
residential mortgage-backed securities
    
    
    
    
    
    
    23,778
    
    
    
    
    
    
    
    23,778Total debt securities
    
    
    
    
    
    
    243,785
    
    
    
    
    
    
    
    243,785Marketable equity securities:Common stocks
    
    
    28,878
    
    
    
    
    
    
    
    
    
    
    
    28,878Money market mutual funds
    
    
    20,704
    
    
    
    
    
    
    
    
    
    
    
    20,704Total marketable equity securities
    
    
    49,582
    
    
    
    
    
    
    
    
    
    
    
    49,582Total securities available for sale
    
    $
    49,582
    
    
    $
    243,785
    
    
    $
    
    
    
    $
    293,367
   8




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##### Table of Contents



Assets Measured at Fair Value on a Non-recurring Basis:
   Quarter EndedMarch 31, 2010
    
    
    March 31, 2010(In thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total LossesImpaired loans
    
    $
    
    
    
    $
    
    
    
    $
    8,265
    
    
    $
    (239
    )Foreclosed real esate
    
    
    
    
    
    
    
    
    
    
    5,077
    
    
    
    $
    
    
    
    $
    
    
    
    $
    13,342
    
    
    $
    (239
    )
 Quarter EndedDecember 31, 2009
    
    
    March 31, 2009(In thousands)
    
    Level 1
    
    
    Level 2
    
    
    Level 3
    
    
    Total LossesImpaired loans
    
    $
    
    
    
    $
    
    
    
    $
    1,700
    
    
    $
    (109
    )Foreclosed real esate
    
    
    
    
    
    
    
    
    
    
    2,869
    
    
    
    (60
    )$
    
    
    
    $
    
    
    
    $
    4,569
    
    
    $
    (169
    )
   March 31, 2010
    
    
    December 31, 2009Carrying
    
    
    Fair
    
    
    Carrying
    
    
    Fair(In thousands)
    
    Amount
    
    
    Value
    
    
    Amount
    
    
    ValueFinancial assets:Cash and cash equivalents
    
    $
    86,514
    
    
    $
    86,514
    
    
    $
    19,966
    
    
    $
    19,966Certificates of deposit
    
    
    3,100
    
    
    
    3,117
    
    
    
    3,000
    
    
    
    3,028Securities available for sale
    
    
    350,054
    
    
    
    350,054
    
    
    
    293,367
    
    
    
    293,367Federal Home Loan Bank stock
    
    
    12,538
    
    
    
    12,538
    
    
    
    4,605
    
    
    
    4,605Loans and loans held for sale, net
    
    
    1,146,807
    
    
    
    1,151,162
    
    
    
    814,255
    
    
    
    813,393Accrued interest receivable
    
    
    7,075
    
    
    
    7,075
    
    
    
    6,231
    
    
    
    6,231Financial liabilities:Deposits
    
    
    1,334,884
    
    
    
    1,338,826
    
    
    
    922,475
    
    
    
    927,385Borrowings
    
    
    156,246
    
    
    
    161,702
    
    
    
    75,410
    
    
    
    76,782Accrued interest payable
    
    
    1,148
    
    
    
    1,148
    
    
    
    728
    
    
    
    728
  9




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##### Table of Contents



4. Earnings Per Share
   Three Months EndedMarch 31,(Dollars in thousands, except per share amounts)
    
    2010
    
    
    2009Net income (loss) available to common
stockholders
    
    $
    2,860
    
    
    $
    (1,108
    )Basic weighted average shares outstanding
    
    
    22,133,155
    
    
    
    22,050,960Effect of dilutive securities
    
    
    
    
    
    
    Diluted weighted average shares outstanding
    
    
    22,133,155
    
    
    
    22,050,960Earnings (loss) per share:Basic
    
    $
    0.13
    
    
    $
    (0.05
    )Diluted
    
    $
    0.13
    
    
    $
    (0.05
    )
 5. Securities
    10




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##### Table of Contents



Gross
    
    
    GrossAmortized
    
    
    Unrealized
    
    
    Unrealized
    
    
    Fair(In thousands)
    
    Cost
    
    
    Gains
    
    
    Losses
    
    
    ValueMarch 31, 2010Debt securities:Corporate bonds:Financial services
    
    $
    64,620
    
    
    $
    2,046
    
    
    $
    (101
    )
    
    $
    66,565Industry and manufacturing
    
    
    56,946
    
    
    
    2,200
    
    
    
    (188
    )
    
    
    58,958Consumer products and services
    
    
    46,359
    
    
    
    2,332
    
    
    
    (3
    )
    
    
    48,688Other
    
    
    49,612
    
    
    
    2,491
    
    
    
    (49
    )
    
    
    52,054Total corporate bonds
    
    
    217,537
    
    
    
    9,069
    
    
    
    (341
    )
    
    
    226,265Government-sponsored enterprises
    
    
    6,434
    
    
    
    2
    
    
    
    (1
    )
    
    
    6,435Residential mortgage-backed securities:Government-sponsored enterprises
    
    
    42,655
    
    
    
    217
    
    
    
    (45
    )
    
    
    42,827Private label
    
    
    15,841
    
    
    
    439
    
    
    
    (218
    )
    
    
    16,062Other debt securities
    
    
    761
    
    
    
    
    
    
    
    
    
    
    
    761Total debt securities
    
    
    283,228
    
    
    
    9,727
    
    
    
    (605
    )
    
    
    292,350Marketable equity securities:Common stocks
    
    
    28,886
    
    
    
    4,353
    
    
    
    (638
    )
    
    
    32,601Money market mutual funds
    
    
    25,108
    
    
    
    
    
    
    
    (5
    )
    
    
    25,103Total marketable equity securities
    
    
    53,994
    
    
    
    4,353
    
    
    
    (643
    )
    
    
    57,704Total securities available for sale
    
    $
    337,222
    
    
    $
    14,080
    
    
    $
    (1,248
    )
    
    $
    350,054December 31, 2009Debt securities:Corporate bonds:Financial services
    
    $
    59,219
    
    
    $
    1,786
    
    
    $
    (282
    )
    
    $
    60,723Industry and manufacturing
    
    
    54,522
    
    
    
    2,106
    
    
    
    (481
    )
    
    
    56,147Consumer products and services
    
    
    50,402
    
    
    
    2,205
    
    
    
    
    
    
    
    52,607Other
    
    
    48,136
    
    
    
    2,394
    
    
    
    
    
    
    
    50,530Total corporate bonds
    
    
    212,279
    
    
    
    8,491
    
    
    
    (763
    )
    
    
    220,007Government-sponsored
residential mortgage-backed securities
    
    
    23,659
    
    
    
    148
    
    
    
    (29
    )
    
    
    23,778Total debt securities
    
    
    235,938
    
    
    
    8,639
    
    
    
    (792
    )
    
    
    243,785Marketable equity securities:Common stocks
    
    
    26,698
    
    
    
    3,001
    
    
    
    (821
    )
    
    
    28,878Money market mutual funds
    
    
    20,704
    
    
    
    
    
    
    
    
    
    
    
    20,704Total marketable equity securities
    
    
    47,402
    
    
    
    3,001
    
    
    
    (821
    )
    
    
    49,582Total securities available for sale
    
    $
    283,340
    
    
    $
    11,640
    
    
    $
    (1,613
    )
    
    $
    293,367
  11




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##### Table of Contents



Within 1 year
    
    
    Over 1 year to 5 years
    
    
    Over 5 years
    
    
    TotalAmortized
    
    
    Fair
    
    
    Amortized
    
    
    Fair
    
    
    Amortized
    
    
    Fair
    
    
    Amortized
    
    
    Fair(In thousands)
    
    Cost
    
    
    Value
    
    
    Cost
    
    
    Value
    
    
    Cost
    
    
    Value
    
    
    Cost
    
    
    ValueCorporate bonds:Financial services
    
    $
    13,559
    
    
    $
    13,763
    
    
    $
    47,645
    
    
    $
    49,418
    
    
    $
    3,416
    
    
    $
    3,384
    
    
    $
    64,620
    
    
    $
    66,565Industry and manufacturing
    
    
    16,174
    
    
    
    16,588
    
    
    
    38,755
    
    
    
    40,364
    
    
    
    2,017
    
    
    
    2,006
    
    
    
    56,946
    
    
    
    58,958Consumer products and
services
    
    
    10,031
    
    
    
    10,298
    
    
    
    36,328
    
    
    
    38,390
    
    
    
    
    
    
    
    
    
    
    
    46,359
    
    
    
    48,688Other
    
    
    11,103
    
    
    
    11,542
    
    
    
    37,475
    
    
    
    39,491
    
    
    
    1,034
    
    
    
    1,021
    
    
    
    49,612
    
    
    
    52,054Total corporate bonds
    
    
    50,867
    
    
    
    52,191
    
    
    
    160,203
    
    
    
    167,663
    
    
    
    6,467
    
    
    
    6,411
    
    
    
    217,537
    
    
    
    226,265Government-sponsored
enterprises
    
    
    147
    
    
    
    146
    
    
    
    4,540
    
    
    
    4,540
    
    
    
    1,747
    
    
    
    1,749
    
    
    
    6,434
    
    
    
    6,435Residential mortgage-
backed securities:Government-sponsored
enterprises
    
    
    119
    
    
    
    118
    
    
    
    168
    
    
    
    165
    
    
    
    42,368
    
    
    
    42,544
    
    
    
    42,655
    
    
    
    42,827Private label
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,841
    
    
    
    16,062
    
    
    
    15,841
    
    
    
    16,062Other debt securities
    
    
    
    
    
    
    
    
    
    
    147
    
    
    
    147
    
    
    
    614
    
    
    
    614
    
    
    
    761
    
    
    
    761Total
    
    $
    51,133
    
    
    $
    52,455
    
    
    $
    165,058
    
    
    $
    172,515
    
    
    $
    67,037
    
    
    $
    67,380
    
    
    $
    283,228
    
    
    $
    292,350
  Less Than Twelve Months
    
    
    Over Twelve MonthsGross
    
    
    
    
    
    
    GrossUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair(In thousands)
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    ValueMarch 31, 2010Debt securities:Corporate bonds:Financial services
    
    $
    50
    
    
    $
    6,980
    
    
    $
    51
    
    
    $
    3,950Industry and manufacturing
    
    
    35
    
    
    
    6,997
    
    
    
    153
    
    
    
    2,847Consumer products and services
    
    
    3
    
    
    
    1,005
    
    
    
    
    
    
    
    Other
    
    
    49
    
    
    
    5,009
    
    
    
    
    
    
    
    Total corporate bonds
    
    
    137
    
    
    
    19,991
    
    
    
    204
    
    
    
    6,797Government-sponsored enterprises
    
    
    1
    
    
    
    147
    
    
    
    
    
    
    
    Residential mortgage-backed securities:Government-sponsored enterprises
    
    
    45
    
    
    
    3,138
    
    
    
    
    
    
    
    Private label
    
    
    218
    
    
    
    2,773
    
    
    
    
    
    
    
    Total debt securities
    
    
    401
    
    
    
    26,049
    
    
    
    204
    
    
    
    6,797Marketable equity securities:Common stocks
    
    
    104
    
    
    
    1,163
    
    
    
    534
    
    
    
    5,565Money market mutual funds
    
    
    5
    
    
    
    1,115
    
    
    
    
    
    
    
    Total marketable equity securities
    
    
    109
    
    
    
    2,278
    
    
    
    534
    
    
    
    5,565Total
    
    $
    510
    
    
    $
    28,327
    
    
    $
    738
    
    
    $
    12,362
  12




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##### Table of Contents



Less Than Twelve Months
    
    
    Over Twelve MonthsGross
    
    
    
    
    
    
    GrossUnrealized
    
    
    Fair
    
    
    Unrealized
    
    
    Fair(In thousands)
    
    Losses
    
    
    Value
    
    
    Losses
    
    
    ValueDecember 31, 2009Debt securities:Corporate bonds:Financial services
    
    $
    24
    
    
    $
    6,059
    
    
    $
    258
    
    
    $
    6,736Industry and manufacturing
    
    
    
    
    
    
    
    
    
    
    481
    
    
    
    5,519Total corporate bonds
    
    
    24
    
    
    
    6,059
    
    
    
    739
    
    
    
    12,255Government-sponsored residential mortgage-backed
securities
    
    
    26
    
    
    
    8,163
    
    
    
    3
    
    
    
    9Total debt securities
    
    
    50
    
    
    
    14,222
    
    
    
    742
    
    
    
    12,264Common stock
    
    
    
    
    
    
    
    
    
    
    821
    
    
    
    6,890Total
    
    $
    50
    
    
    $
    14,222
    
    
    $
    1,563
    
    
    $
    19,154
     13




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##### Table of Contents



6. Acquisition
    (In thousands)Assets acquired and liabilities assumed:Cash and cash equivalents
    
    $
    14,422Certificates of deposit
    
    
    100Securities available for sale
    
    
    45,516Federal Home Loan Bank Stock, at cost
    
    
    7,933Loans held for sale
    
    
    4,919Loans, net
    
    
    346,323Foreclosed real estate, net
    
    
    1,674Premises and equipment, net
    
    
    10,618Deferred tax asset, net
    
    
    9,486Goodwill
    
    
    12,374Other assets
    
    
    14,088Total assets acquired
    
    $
    467,453Deposits
    
    $
    380,550FHLB Borrowings
    
    
    80,932Accrued expenses and other liabilities
    
    
    5,971Total liabilities assumed
    
    $
    467,453
   14




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##### Table of Contents



Three Months EndedMarch 31,(In thousands, except per share amounts)
    
    2010
    
    
    2009Net interest income
    
    $
    14,928
    
    
    $
    11,661Net income (loss)
    
    
    3,069
    
    
    
    (958
    )Income (loss) per share  Basic
    
    $
    0.14
    
    
    $
    (0.04
    )Income (loss) per share  Diluted
    
    
    0.14
    
    
    
    (0.04
    )
  15




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##### Table of Contents



Managements Discussion and Analysis of Financial Condition and Results of
Operations
  Forward-Looking Statements
 Forward-Looking Statements
  
    
    significantly increased competition among depository and other financial
institutions;
 
    
    inflation and changes in the interest rate environment or other changes that reduce
our interest margins or reduce the fair value of financial instruments;
 
    
    general economic conditions, either nationally or in our market areas, that are
worse than expected;
 
    
    adverse changes in the securities markets;
 
    
    legislative or regulatory changes that adversely affect our business;
 
    
    our ability to enter new markets successfully and take advantage of growth
opportunities, and the possible dilutive effect of potential acquisitions or de novo
branches, if any;
 
    
    changes in consumer spending, borrowing and savings habits;
 
    
    changes in accounting policies and practices, as may be adopted by bank regulatory
agencies, the Financial Accounting Standards Board, the Public Company Accounting
Oversight Board and other promulgating authorities;
 
    
    inability of third-party providers to perform their obligations to us;
 
    
    changes in our organization, compensation and benefit plans;
 
    
    changes in real estate values in our market areas;
 
    
    the effect of the current governmental effort to restructure the U.S. financial and
regulatory system;
 
    
    the effect of developments in the secondary market affecting our loan pricing;
 
    
    the level of future deposit premiums; and
 
    
    the effect of the current financial crisis on our loan portfolio and our investment
portfolio, and our deposit and other customers.
 www.sec.gov
  16




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##### Table of Contents



Critical Accounting Policies
  Comparison of Financial Condition at March 31, 2010 and December 31, 2009
     17




---



##### Table of Contents



Loan Portfolio Analysis
   March 31, 2010
    
    
    December 31, 2009(Dollars in thousands)
    
    Amount
    
    
    %
    
    
    Amount
    
    
    %Real estate loans:One-to four-family
    
    $
    426,336
    
    
    
    36.9
    %
    
    $
    276,122
    
    
    
    33.5
    %Multi-family
    
    
    121,867
    
    
    
    10.6
    
    
    
    53,402
    
    
    
    6.5Commercial real estate
    
    
    374,796
    
    
    
    32.5
    
    
    
    350,648
    
    
    
    42.6Construction
    
    
    121,165
    
    
    
    10.5
    
    
    
    94,102
    
    
    
    11.4Home equity lines
of credit
    
    
    72,897
    
    
    
    6.3
    
    
    
    29,979
    
    
    
    3.6Total real estate loans
    
    
    1,117,061
    
    
    
    96.8
    
    
    
    804,253
    
    
    
    97.6Commercial business loans
    
    
    28,821
    
    
    
    2.5
    
    
    
    18,029
    
    
    
    2.2Consumer loans
    
    
    7,795
    
    
    
    0.7
    
    
    
    1,205
    
    
    
    0.2Total loans
    
    
    1,153,677
    
    
    
    100.0
    %
    
    
    823,487
    
    
    
    100.0
    %Net deferred loan origination fees
    
    
    (273
    )
    
    
    
    
    
    
    (945
    )Allowance for loan losses
    
    
    (10,629
    )
    
    
    
    
    
    
    (9,242
    )Loans, net
    
    $
    1,142,775
    
    
    
    
    
    
    $
    813,300
 Analysis of Loan Loss Experience
  Three Months Ended March 31,(Dollars in thousands)
    
    2010
    
    
    2009Beginning balance
    
    $
    9,242
    
    
    $
    6,912Provision for loan losses
    
    
    1,374
    
    
    
    546Charge offs:Real estate loans
    
    
    1
    
    
    
    Commercial business loans
    
    
    
    
    
    
    Consumer loans
    
    
    21
    
    
    
    2Total charge-offs
    
    
    22
    
    
    
    2Recoveries:Real estate loans
    
    
    23
    
    
    
    Commercial business
    
    
    
    
    
    
    Consumer loans
    
    
    12
    
    
    
    Total recoveries
    
    
    35
    
    
    
    Net recoveries (charge-offs)
    
    
    13
    
    
    
    (2
    )Ending balance
    
    $
    10,629
    
    
    $
    7,456Allowance to non-accrual loans
    
    
    31.45
    %
    
    
    47.27
    %Allowance to total loans outstanding
    
    
    0.92
    %
    
    
    1.00
    %Net recovery (charge-offs) to
average loans outstanding
    
    
    0.00
    %
    
    
    0.00
    %
  18




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##### Table of Contents



Provision for Loan Losses
  Managements Assessment of Asset Quality
   March 31,
    
    
    December 31,(Dollars in thousands)
    
    2010
    
    
    2009Loans accounted for on a non-accrual basis:Real estate loans:One-to four-family
    
    $
    9,995
    
    
    $
    4,098Multi-family
    
    
    2,873
    
    
    
    850Commercial real estate
    
    
    7,578
    
    
    
    7,388Home equity lines of credit
    
    
    645
    
    
    
    Construction
    
    
    12,635
    
    
    
    9,224Total real estate loans
    
    
    33,726
    
    
    
    21,560Commercial business loans
    
    
    64
    
    
    
    Consumer loans
    
    
    4
    
    
    
    138Total non-accrual loans
    
    
    33,794
    
    
    
    21,698Foreclosed assets
    
    
    5,077
    
    
    
    2,869Total nonperforming assets
    
    $
    38,871
    
    
    $
    24,567Non-accrual loans to total loans
    
    
    2.93
    %
    
    
    2.63
    %Non-accrual loans to total assets
    
    
    1.97
    %
    
    
    1.79
    %Non-performing assets to total assets
    
    
    2.26
    %
    
    
    2.03
    %
   19




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##### Table of Contents



Deposits
   March 31, 2010
    
    
    December 31, 2009(Dollars in thousands)
    
    Amount
    
    
    Percent
    
    
    Amount
    
    
    PercentNOW and demand deposits
    
    $
    216,273
    
    
    
    16.2
    %
    
    $
    102,386
    
    
    
    11.1
    %Money market deposits
    
    
    305,076
    
    
    
    22.9
    
    
    
    247,006
    
    
    
    26.8Regular and other deposits
    
    
    184,741
    
    
    
    13.8
    
    
    
    128,016
    
    
    
    13.9Certificates of deposit
    
    
    628,794
    
    
    
    47.1
    
    
    
    445,067
    
    
    
    48.2Total
    
    $
    1,334,884
    
    
    
    100.0
    %
    
    $
    922,475
    
    
    
    100.0
    %
 Borrowings
  Results of Operations for the Three Months Ended March 31, 2010 and March 31, 2009
 Overview
   Net Interest Income
    20




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##### Table of Contents



Three Months Ended March 31,2010
    
    
    2009Average
    
    
    Interest
    
    
    Yield/
    
    
    Average
    
    
    Interest
    
    
    Yield/(Dollars in thousands)
    
    Balance
    
    
    Earned/Paid
    
    
    Cost (4)
    
    
    Balance
    
    
    Earned/Paid
    
    
    Cost (4)Assets:Interest-earning assets:Loans (1)
    
    $
    1,151,328
    
    
    $
    16,210
    
    
    
    5.71
    %
    
    $
    726,851
    
    
    $
    10,645
    
    
    
    5.94
    %Securities and certificates of deposit
    
    
    341,330
    
    
    
    3,663
    
    
    
    4.35
    
    
    
    262,955
    
    
    
    2,790
    
    
    
    4.30Other interest-earning assets
    
    
    35,279
    
    
    
    12
    
    
    
    0.14
    
    
    
    30,361
    
    
    
    12
    
    
    
    0.16Total interest-earning assets
    
    
    1,527,937
    
    
    
    19,885
    
    
    
    5.28
    
    
    
    1,020,167
    
    
    
    13,447
    
    
    
    5.35Noninterest-earning assets
    
    
    138,229
    
    
    
    
    
    
    
    
    
    
    
    75,208Total assets
    
    $
    1,666,166
    
    
    
    
    
    
    
    
    
    
    $
    1,095,375Liabilities and stockholders equity:Interest-bearing liabilities:NOW deposits
    
    $
    107,768
    
    
    
    128
    
    
    
    0.48
    %
    
    $
    36,610
    
    
    
    46
    
    
    
    0.51
    %Money market deposits
    
    
    300,778
    
    
    
    893
    
    
    
    1.20
    
    
    
    183,199
    
    
    
    1,027
    
    
    
    2.27Savings and other deposits
    
    
    178,937
    
    
    
    246
    
    
    
    0.56
    
    
    
    122,990
    
    
    
    302
    
    
    
    1.00Certificates of deposit
    
    
    611,717
    
    
    
    2,932
    
    
    
    1.94
    
    
    
    427,534
    
    
    
    3,888
    
    
    
    3.69Total interest-bearing deposits
    
    
    1,199,200
    
    
    
    4,199
    
    
    
    1.42
    
    
    
    770,333
    
    
    
    5,263
    
    
    
    2.77FHLB advances and other borrowings
    
    
    156,537
    
    
    
    915
    
    
    
    2.37
    
    
    
    67,752
    
    
    
    532
    
    
    
    3.19Total interest-bearing liabilities
    
    
    1,355,737
    
    
    
    5,114
    
    
    
    1.53
    
    
    
    838,085
    
    
    
    5,795
    
    
    
    2.80Noninterest-bearing demand deposits
    
    
    95,943
    
    
    
    
    
    
    
    
    
    
    
    58,705Other noninterest-bearing liabilities
    
    
    10,970
    
    
    
    
    
    
    
    
    
    
    
    9,078Total liabilities
    
    
    1,462,650
    
    
    
    
    
    
    
    
    
    
    
    905,868Total stockholders equity
    
    
    203,516
    
    
    
    
    
    
    
    
    
    
    
    189,507Total liabilities and stockholders
equity
    
    $
    1,666,166
    
    
    
    
    
    
    
    
    
    
    $
    1,095,375Net interest-earning assets
    
    $
    172,200
    
    
    
    
    
    
    
    
    
    
    $
    182,082Net interest income
    
    
    
    
    
    $
    14,771
    
    
    
    
    
    
    
    
    
    
    $
    7,652Interest rate spread (2)
    
    
    
    
    
    
    
    
    
    
    3.75
    %
    
    
    
    
    
    
    
    
    
    
    2.55
    %Net interest margin (3)
    
    
    
    
    
    
    
    
    
    
    3.92
    %
    
    
    
    
    
    
    
    
    
    
    3.04
    %Average interest-earning assets to
average interest-bearing liabilities
    
    
    
    
    
    
    112.70
    %
    
    
    
    
    
    
    
    
    
    
    121.73
    %
 (1)
    
    Loans on non-accrual status are included in average balances.(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)
    
    Annualized.  21




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##### Table of Contents



Non-interest Income
  Non-interest Expenses
  Income Tax
  Liquidity and Capital Management
 Liquidity Management.
    22




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##### Table of Contents



March 31,
    
    
    December 31,(In thousands)
    
    2010
    
    
    2009Unadvanced portion of existing loans:Construction
    
    $
    68,010
    
    
    $
    72,218Home equity line of credit
    
    
    46,193
    
    
    
    25,623Other lines and letters of credit
    
    
    11,744
    
    
    
    4,038Commitments to originate:One- to four-family
    
    
    3,165
    
    
    
    1,844Commercial real estate
    
    
    45,273
    
    
    
    18,711Construction
    
    
    13,370
    
    
    
    27,460Other loans
    
    
    8,389
    
    
    
    4,457Total loan commitments outstanding
    
    $
    196,144
    
    
    $
    154,351
    Capital Management.
   23




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##### Table of Contents



Off-Balance Sheet Arrangements.
  
 Item 3. Quantitative and Qualitative Disclosures about Market Risk
 Interest Rate Risk Management.
  Net Interest Income Simulation Analysis.
     24




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##### Table of Contents



Interest Rate Sensitivity
 Increase (Decrease)in Market Interest
    
    Net Interest IncomeRates (Rate Shock)
    
    Amount
    
    
    Change
    
    
    Percent(Dollars in Thousands)300
    
    $
    51,117
    
    
    $
    (8,643
    )
    
    
    (14.46
    )%Flat
    
    
    59,760-50
    
    
    60,343
    
    
    
    583
    
    
    
    0.98
  25




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##### Table of Contents



Item 4. Controls and Procedures
      26




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##### Table of Contents



PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
  
 Item 1A. Risk Factors
  
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
 (a.)  (b.) Not applicable.(c.)
    
    The Company did not purchase any shares of its common stock during the quarter ended March
31, 2010. In April 2010, the Commonwealth of Massachusetts Office of the Commissioner of Banks
approved the Companys application to repurchase up to 5% of its outstanding common stock not
held by its mutual holding company parent, or 472,428 shares of its common stock.
 
 Item 3. Defaults Upon Senior Securities
  
 Item 4. Removed and Reserved
 
 Item 5. Other Information
   27




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##### Table of Contents



Item 6. Exhibits
 3.1
    
    
    Amended and Restated Articles of Organization of Meridian Interstate Bancorp, Inc.*3.2
    
    
    Amended and Restated Bylaws of Meridian Interstate Bancorp, Inc.*3.3
    
    
    Articles of Correction of Meridian Interstate Bancorp, Inc.***4
    
    
    Form of Common Stock Certificate of Meridian Interstate Bancorp, Inc.*10.1
    
    
    Form of East Boston Savings Bank Employee Stock Ownership Plan*10.2
    
    
    Form of East Boston Savings Bank Employee Stock Ownership Plan Trust Agreement*10.3
    
    
    East Boston Savings Bank Employee Stock Ownership Plan Loan Agreement, Pledge Agreement and
Promissory Note*10.4
    
    
    Form of Amended and Restated Employment Agreement*10.5
    
    
    Form of East Boston Savings Bank Employee Severance Compensation Plan*10.6
    
    
    Form of Supplemental Executive Retirement Agreements with certain directors*10.7
    
    
    Form of Separation Agreement with Robert F. Verdonck incorporated by reference to the Form
8-K filed on June 11, 200810.8
    
    
    Form of Separation Agreement with Leonard V. Siuda incorporated by reference to the Form 8-K
filed on April 7, 200910.9
    
    
    Form of Separation Agreement with Philip F. Freehan incorporated by reference to the Form 8-K
filed on April 7, 200910.10
    
    
    Form of Supplemental Executive Retirement Agreement with Richard J. Gavegnano filed as an
exhibit to Form 10-Q filed on May 14, 200810.11
    
    
    Form of Employment Agreement with Richard J. Gavegnano incorporated by reference to the Form
8-K filed on January 12, 200910.12
    
    
    Form of Employment Agreement with Deborah J. Jackson incorporated by reference to the Form
8-K filed on January 22, 200910.13
    
    
    Form of Supplemental Executive Retirement Agreement with Deborah J. Jackson incorporated by
reference to the Form 8-K filed on January 22, 200910.14
    
    
    2008 Equity Incentive Plan**10.15
    
    
    Amendment to Supplemental Executive Retirement Agreements with Certain Directors
incorporated by
reference to the Form 10-K/A filed on April 8, 200910.16
    
    
    Agreement and Plan of Merger incorporated by reference to the Form 8-K filed on July 24, 200910.17
    
    
    Employment Agreement between Edward J. Merritt and East Boston Savings Bank***10.18
    
    
    Supplemental Executive Retirement Agreement between East Boston Savings Bank and
Edward J. Merritt***10.19
    
    
    Joint Beneficiary Designation Agreement between Edward J. Merritt and Mt. Washington
Cooperative Bank***10.20
    
    
    First Amendment to Joint Beneficiary Designation Agreement between Edward J. Merritt and Mt. Washington
Cooperative Bank***10.21
    
    
    Change in Control Agreement between Mark Abbate and East Boston Savings Bank incorporated by reference to the
Form 8-K filed on December 15, 200921
    
    
    Subsidiaries of Registrant*31.1
    
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200231.2
    
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 200232
    
    
    Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906
of the Sarbanes-Oxley Act of 2002
 
 *
    
    Incorporated by reference to the Registration Statement on Form S-1 of Meridian Interstate
Bancorp, Inc. (File No. 333-146373), originally filed with the Securities and Exchange
Commission on September 28, 2007.**
    
    Incorporated by reference to Appendix A to the Companys Definitive Proxy Statement for its
2008 Annual Meeting, as filed with the Securities and Exchange Commission on July 11, 2008.***
    
    Incorporated by reference to the Companys Annual Report on Form 10-K as filed with the
Securities and Exchange Commission on March 16, 2010. 
  28




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##### Table of Contents



SIGNATURES
  MERIDIAN INTERSTATE BANCORP, INC.
(Registrant)Dated:  May 10, 2010
    /s/ Richard J. GavegnanoRichard J. GavegnanoChairman and Chief Executive Officer
(Principal Executive Officer)Dated:  May 10, 2010
    /s/ Mark L. AbbateMark L. AbbateSenior Vice
President,Treasurer and Chief Financial Officer(Principal Financial and Accounting Officer)  29