Meridian Bancorp said Wednesday that it will take a $32 million charge to earnings in the second quarter to pay for a massive reorganization.

The centerpiece of the cost-cutting drive is the planned elimination of 1,107 jobs - nearly 16% of the Reading, Pa., company's work force.

Meridian will also close 24 of its 319 branches, combine its three banking units into one, and hire Andersen Consulting to take over many back-office functions. The changes will reduce operating expenses by 10%, saving $55 million a year, or 63 cents a share, on a pretax basis.

"In order to stay competitive, we have to get our expenses down," said Sam McCullough, Meridian's chairman, chief executive, and president.

Analysts called the reorganization painful but necessary. But they also said it was unlikely to protect the $15 billion-asset banking company from a buyout over the long term.

Michael P. Durante, a banking analyst with McDonald & Company Investments, said the bank "would need at least $65 million or $70 million in expense cuts just to be in line with its peers."

Meridian's efficiency ratio, or ratio of expenses to revenues, has long been much higher than that of other regional banks. The ratio stood at 66.11% at the end of the first quarter; the average for comparable institutions is about 60%.

"A generic bank such as Meridian would need to get to 55% efficiency to stay independent longer-term," Mr. Durante maintained. "They would have to cut costs $80 million to get to 55% efficiency. And that would be a conservative number - $90 million would be more like it."

Despite doubts about how effective the reorganization would be, the stock market bid up shares of the $15 billion-asset bank. The stock closed Wednesday at $34, up 37.5 cents.

Meridian's restructuring plan is in line with reorganization programs announced at other banks over the past two years. CoreStates Financial Corp., Fleet Financial Group, and Chemical Banking Corp. are among those that have announced hefty staff cuts to reduce costs.

"Revenue generation has been much slower in 1995 than some of the managements expected," said Denis Laplante, a banking analyst with Fox- Pitt, Kelton. "Many banks need to go through an overhaul in their operations.

"CoreStates, Fleet, Michigan National, Midlantic - most of them are doing it out of necessity," he said. "Meridian isn't the first, and it won't be the last."

Meridian said that as part of the reorganization it would consolidate its three bank units: Meridian Bank, Delaware Trust Co., and Meridian Bank New Jersey.

And it is outsourcing some technology functions to Andersen Consulting, in a $400 million, 10-year contract that will be negotiated over the next 90 days. Other, similar deals are being worked out for Meridian's merchant card and property management units.

Meridian also said it would produce $13 million in annual revenue enhancements on a pretax basis. But Michael Plodwick, a bank analyst with CJ Lawrence Deutsche Bank, said, "We like to see those revenue enhancements before we'll give any credit for them in the earnings."

Of the jobs cut, 432 will come from the branch closings; a total of 610 people throughout the bank will receive pink slips. The rest of the job reduction is to come from a projected 250 transfers to Andersen Consulting and attrition after a hiring freeze.

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