Boston’s Meridian Interstate Bancorp Inc., the holding company for East Boston Savings Bank, has reported net income of $2.6 million for the quarter ended Sept. 30, a slight drop from $3 million reported during for the same quarter in 2010.

The bank also operates under the name Mt. Washington Bank, a division of East Boston Savings Bank.

For the nine months ended Sept. 30, net income was $10 million, compared to $9.1 million during the nine months ended Sept. 30, 2010. The company’s return on average assets was 0.54 percent for the quarter ended Sept. 30, 2011 compared to 0.68 percent for the quarter ended Sept. 30, 2010.

"I am pleased to report net income of $2.6 million and earnings per share of $0.12 for the third quarter of 2011. In the midst of an extended period of slow growth and low interest rates, we are continuing to position the company to take advantage of increasing demand for banks that focus on the needs of consumers and businesses in their communities," said Richard J. Gavegnano, chairman and chief executive officer. "Along with the establishment in the third quarter of our new commercial and industrial lending division, we have also expanded our residential and commercial real estate lending team with seven seasoned lenders. And following the opening of an East Boston Savings Bank branch and two Mt. Washington branches earlier in the year, we opened a new East Boston Savings Bank branch this month in Danvers with plans to open another new East Boston Savings Bank branch in Cambridge by year end. We expect these actions to significantly increase our market share and earnings potential."

Gavegnano added: "We are gratified that our core deposit growth initiatives this year have resulted in an increase in these non-term balances to $886.1 million, representing 56.6 percent of total deposits at Sept. 30, 2011."