Meridian Interstate Bancorp, the holding company for East Boston Savings Bank and its Mount Washington Bank division, said year-over-year fourth quarter profits fell more than 50 percent to $2 million after realizing lower returns on its assets.

For the year, Meridian said its profit was $12 million compared to $13.4 million in 2010.

Return on average assets was 0.4 percent for the quarter compared to 0.95 percent a year prior. For the year, the bank’s return on average assets was 0.63 percent compared to 0.77 percent a year ago.

In a statement, Richard Gavegnano, chairman and CEO, said he’s pleased with the bank’s results. He said the bank has experienced net loan growth of 14 percent compared to 2010 and net deposit growth of 10 percent, both of which were the result of the bank’s geographic expansion and its entry into the commercial and industrial lending market.

Net interest income for the year was $57.8 million compared to $61 million a year ago.

Non-interest income decreased nearly 20 percent in the fourth quarter to $3 million from $3.7 million in the same period a year ago. For the year, non-interest income was $15.4 million, a 31 percent increase from $11.7 million in 2010.

The bank also said its non-performing loans increased nearly 4 percent during the quarter, and ended the year at $57.5 million compared to $47.2 million in 2010.

Meridian’s provision for loan losses was $3.7 million for the year compared to $3.2 million in 2010.