Meridian Interstate Bancorp Inc. in East Boston, Mass., received permission to repurchase up to 5% of its outstanding shares.

When completed, it would be the $1.2 billion-asset company's third repurchase of shares in three years.

Richard J. Gavegnano, Meridian's chairman and chief executive officer, said in an interview Friday that the repurchase makes sense at this time because shares were priced well to improve shareholder returns.

The shares were trading at about $11 apiece on Friday.

"My stock at its present value is a discount to net tangible value," he said. "I can't think of a better place to put it than in my own stock.''

"It's a very good investment for us," he added.

The company's total risk-based capital ratio at the end of December was 19.4%, Tier 1 risk-based ratio was 18.5%, and the leverage ratio was 16.2%.

The company completed its second repurchase of 5% of its shares in December 2009.

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