Discounted Cash Flow (DCF) Analysis Levered

Meridian Bancorp, Inc. (EBSB)

$24.15

-0.50 (-2.03%)

All numbers are in Millions, Currency in USD

Stock DCF: 33.09 | 24.15 | undervalue

Free Cash Flow

Year A/P	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected
Revenue	136.75	169.26	173.44	186.25	205.80	228.51	253.72	281.71	312.80	347.31
Revenue (%)
Operating Cash Flow	44.01	50.43	71.04	66.19	65.84	77.90	86.50	96.04	106.64	118.40
Operating Cash Flow (%)
Capital Expenditure	-4.10	-1.21	-6.98	-6.17	-6.40	-6.47	-7.19	-7.98	-8.86	-9.84
Capital Expenditure (%)
Free Cash Flow	39.91	49.21	64.06	60.01	59.44	71.43	79.31	88.06	97.78	108.57

Weighted Average Cost Of Capital

Share price	$ 24.15
Beta	1.079
Diluted Shares Outstanding	50.42
Cost of Debt
Tax Rate	25.23
After-tax Cost of Debt	7.27%
Risk-Free Rate
Market Risk Premium
Cost of Equity	9.897
Total Debt	610.60
Total Equity	1,217.60
Total Capital	1,828.20
Debt Weighting	33.40
Equity Weighting	66.60
Wacc

Build Up Free Cash Flow

Year A/P	2016 Actual	2017 Actual	2018 Actual	2019 Actual	2020 Actual	2021 Projected	2022 Projected	2023 Projected	2024 Projected	2025 Projected
Revenue	136.75	169.26	173.44	186.25	205.80	228.51	253.72	281.71	312.80	347.31
Operating Cash Flow	44.01	50.43	71.04	66.19	65.84	77.90	86.50	96.04	106.64	118.40
Capital Expenditure	-4.10	-1.21	-6.98	-6.17	-6.40	-6.47	-7.19	-7.98	-8.86	-9.84
Free Cash Flow	39.91	49.21	64.06	60.01	59.44	71.43	79.31	88.06	97.78	108.57
WACC
PV LFCF						55.13	56.15	57.18	58.24	59.31
SUM PV LFCF										339.93

Terminal Value

Growth in perpetuity method:
Long-term growth rate
WACC (%)	9.02
Free cash flow (t + 1)	110.74
Terminal Value	1,577.48
Present Value of Terminal Value	1,024.31

Intrinsic Value

Enterprise Value	1,364.24
Net Debt	-303.99
Equity Value	1,668.23
Shares Outstanding	50.42
Equity Value Per Share	33.09