Meridian Corporation (Nasdaq: MRBK) today reported:
| |
Three Months Ended |
|
(Dollars in thousands, except per share data)
(Unaudited) |
September 30,2024 |
|
June 30,2024 |
|
September 30,2023 |
| Income: |
|
|
|
|
|
|
Net income |
$ |
4,743 |
|
$ |
3,326 |
|
$ |
4,005 |
| Diluted earnings per common
share |
$ |
0.42 |
|
$ |
0.30 |
|
$ |
0.35 |
| Pre-tax, pre-provision
income (1) |
$ |
8,527 |
|
$ |
7,072 |
|
$ |
5,292 |
| (1) See Non-GAAP
reconciliation in the Appendix |
|
|
|
|
|
| |
|
|
|
|
|
- Net income for the quarter ended September 30, 2024 was $4.7
million and pre-tax, pre-provision income was
$8.5 million1.
- Return on average assets and return on average equity for the
third quarter of 2024 were 0.80% and 11.41%, respectively.
- Net interest margin was 3.20% for the third quarter of 2024,
with a loan yield of 7.41%.
- Total assets at September 30, 2024 were $2.4 billion, compared
to $2.4 billion at June 30, 2024 and $2.2 billion at September 30,
2023.
- Commercial loans, excluding leases, increased $30.0 million, or
2% for the quarter and $158.0 million, or 11% year over year.
- Third quarter deposit growth was $63.5 million, or 3%, and
$170.3 million, or 9.4% year over year.
- Non-interest-bearing deposits were up $13.2 million or 6%,
quarter over quarter.
- On October 22, 2024, the Board of Directors declared a
quarterly cash dividend of $0.125 per common share, payable
November 19, 2024 to shareholders of record as of
November 12, 2024.
Christopher J. Annas, Chairman and CEO
commented:
“Our third quarter earnings showed significant improvement from
the second quarter, increasing by 42.6% to $4.7 million, or $0.42
per share. Key highlights include an improving net interest margin
at 3.20% for the quarter, and strong results from our wealth and
mortgage segments. Robust loan growth of 7.2% for the first nine
months of the year reflects our strong sales culture and healthy
economic conditions in our primary market areas. We have
great systems for lenders to be more effective, and that same
technology for our customers to bank entirely online, which leads
to better efficiencies. Deposit growth is consistent, and we are
evaluating deposit-rich segments to accelerate growth that is less
reliant on branch networks.
Our wealth segment is benefiting from local disruption and the
cross-selling from our commercial/industrial and CRE lending units.
A recent hire from a large local bank has accelerated growth and
has a pipeline for adding advisors. The mortgage segment has
recovered from the rate shock, and despite a continued lack of
homes for sale, is hitting volume levels similar to pre-2019. The
hard decisions made to cut back expenses and reposition the
business are paying off. And if mortgage rates fall in 2025, there
are many refinance opportunities.
Since starting the bank in 2004, Meridian has built a great
reputation for responsiveness and consistency. The business
community heavily relies on these qualities in a bank to build and
grow themselves. We are the go-to bank in the Philadelphia metro
market, and in a great position to build ever larger market
share."
Select Condensed Financial
Information
| |
As of or
for the quarter ended (Unaudited) |
| |
September 30, 2024 |
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
| |
(Dollars in thousands, except per share data) |
| Income: |
|
|
|
|
|
|
|
|
|
| Net
income |
$ |
4,743 |
|
|
$ |
3,326 |
|
|
$ |
2,676 |
|
|
$ |
571 |
|
|
$ |
4,005 |
|
| Basic earnings per common share |
|
0.43 |
|
|
|
0.30 |
|
|
|
0.24 |
|
|
|
0.05 |
|
|
|
0.36 |
|
| Diluted earnings per common share |
|
0.42 |
|
|
|
0.30 |
|
|
|
0.24 |
|
|
|
0.05 |
|
|
|
0.35 |
|
| Net interest income |
|
18,242 |
|
|
|
16,846 |
|
|
|
16,609 |
|
|
|
16,942 |
|
|
|
17,224 |
|
| |
|
|
|
|
|
|
|
|
|
| Balance Sheet: |
|
|
|
|
|
|
|
|
|
| Total assets |
$ |
2,387,721 |
|
|
$ |
2,351,584 |
|
|
$ |
2,292,923 |
|
|
$ |
2,246,193 |
|
|
$ |
2,230,971 |
|
| Loans, net of fees and costs |
|
2,008,396 |
|
|
|
1,988,535 |
|
|
|
1,956,315 |
|
|
|
1,895,806 |
|
|
|
1,885,629 |
|
| Total deposits |
|
1,978,927 |
|
|
|
1,915,436 |
|
|
|
1,900,696 |
|
|
|
1,823,462 |
|
|
|
1,808,645 |
|
| Non-interest bearing deposits |
|
237,207 |
|
|
|
224,040 |
|
|
|
220,581 |
|
|
|
239,289 |
|
|
|
244,668 |
|
| Stockholders' equity |
|
167,450 |
|
|
|
162,382 |
|
|
|
159,936 |
|
|
|
158,022 |
|
|
|
155,114 |
|
| |
|
|
|
|
|
|
|
|
|
| Balance Sheet Average Balances: |
|
|
|
|
|
|
|
|
|
| Total assets |
$ |
2,373,261 |
|
|
$ |
2,319,295 |
|
|
$ |
2,269,047 |
|
|
$ |
2,219,340 |
|
|
$ |
2,184,385 |
|
| Total interest earning assets |
|
2,277,523 |
|
|
|
2,222,177 |
|
|
|
2,173,212 |
|
|
|
2,121,068 |
|
|
|
2,086,331 |
|
| Loans, net of fees and costs |
|
1,997,574 |
|
|
|
1,972,740 |
|
|
|
1,944,187 |
|
|
|
1,891,170 |
|
|
|
1,876,648 |
|
| Total deposits |
|
1,960,145 |
|
|
|
1,919,954 |
|
|
|
1,823,523 |
|
|
|
1,820,532 |
|
|
|
1,782,140 |
|
| Non-interest bearing deposits |
|
246,310 |
|
|
|
229,040 |
|
|
|
233,255 |
|
|
|
254,025 |
|
|
|
253,485 |
|
| Stockholders' equity |
|
165,309 |
|
|
|
162,119 |
|
|
|
159,822 |
|
|
|
157,210 |
|
|
|
156,271 |
|
| |
|
|
|
|
|
|
|
|
|
| Performance Ratios (Annualized): |
|
|
|
|
|
|
|
|
|
| Return on average assets |
|
0.80 |
% |
|
|
0.58 |
% |
|
|
0.47 |
% |
|
|
0.10 |
% |
|
|
0.73 |
% |
| Return on average equity |
|
11.41 |
% |
|
|
8.25 |
% |
|
|
6.73 |
% |
|
|
1.44 |
% |
|
|
10.17 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement - Third Quarter 2024 Compared to Second
Quarter 2024
Third quarter net income increased $1.4 million,
or 42.6%, to $4.7 million led by increased net interest income and
a lower quarterly provision for credit losses, combined with an
increase in net operating income from the mortgage division.
Net interest income increased $1.4 million, or 8.3%, as the
increase in interest income out-paced the increase in interest
expense. Non-interest income increased $1.6 million or 17.2%,
reflecting higher levels of mortgage banking income and an
improvement in fair value changes of the pipeline as well as fair
valued portfolio loans. Non-interest expense increased $1.5
million, or 8.0%, due primarily to an increase in salaries and
employee benefits expense, professional fees and other
expense. These increases were partially offset by a decrease
in advertising and promotion expense. Detailed explanations of the
major categories of income and expense follow below.
Net Interest income
The rate/volume analysis table below analyzes
dollar changes in the components of interest income and interest
expense as they relate to the change in balances (volume) and the
change in interest rates (rate) of tax-equivalent net interest
income for the periods indicated and allocated by rate and volume.
Changes in interest income and/or expense related to changes
attributable to both volume and rate have been allocated
proportionately based on the relationship of the absolute dollar
amount of the change in each category.
| |
Quarter Ended |
|
|
|
|
|
|
|
|
| (dollars in thousands) |
September 30,2024 |
|
June 30,2024 |
|
$ Change |
|
% Change |
|
Change dueto rate |
|
Change dueto volume |
| Interest
income: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
$ |
416 |
|
$ |
331 |
|
$ |
85 |
|
|
25.7 |
% |
|
$ |
3 |
|
|
$ |
82 |
|
| Investment securities -
taxable |
|
1,480 |
|
|
1,324 |
|
|
156 |
|
|
11.8 |
% |
|
|
28 |
|
|
|
128 |
|
| Investment securities - tax
exempt (1) |
|
397 |
|
|
403 |
|
|
(6 |
) |
|
(1.5 |
)% |
|
|
(3 |
) |
|
|
(3 |
) |
| Loans held for sale |
|
766 |
|
|
572 |
|
|
194 |
|
|
33.9 |
% |
|
|
(5 |
) |
|
|
199 |
|
| Loans held for
investment (1) |
|
37,339 |
|
|
35,916 |
|
|
1,423 |
|
|
4.0 |
% |
|
|
967 |
|
|
|
456 |
|
|
Total loans |
|
38,105 |
|
|
36,488 |
|
|
1,617 |
|
|
4.4 |
% |
|
|
962 |
|
|
|
655 |
|
|
Total interest income |
$ |
40,398 |
|
$ |
38,546 |
|
$ |
1,852 |
|
|
4.8 |
% |
|
$ |
990 |
|
|
$ |
862 |
|
| Interest
expense: |
|
|
|
|
|
|
|
|
|
|
|
| Interest-bearing demand
deposits |
$ |
1,390 |
|
$ |
1,279 |
|
$ |
111 |
|
|
8.7 |
% |
|
$ |
118 |
|
|
$ |
(7 |
) |
| Money market and savings
deposits |
|
8,391 |
|
|
8,265 |
|
|
126 |
|
|
1.5 |
% |
|
|
(494 |
) |
|
|
620 |
|
| Time deposits |
|
9,532 |
|
|
9,447 |
|
|
85 |
|
|
0.9 |
% |
|
|
(406 |
) |
|
|
491 |
|
|
Total interest - bearing deposits |
|
19,313 |
|
|
18,991 |
|
|
322 |
|
|
1.7 |
% |
|
|
(782 |
) |
|
|
1,104 |
|
| Borrowings |
|
1,985 |
|
|
1,851 |
|
|
134 |
|
|
7.2 |
% |
|
|
21 |
|
|
|
113 |
|
| Subordinated debentures |
|
779 |
|
|
777 |
|
|
2 |
|
|
0.3 |
% |
|
|
— |
|
|
|
2 |
|
|
Total interest expense |
|
22,077 |
|
|
21,619 |
|
|
458 |
|
|
2.1 |
% |
|
|
(761 |
) |
|
|
1,219 |
|
|
Net interest income differential |
$ |
18,321 |
|
$ |
16,927 |
|
$ |
1,394 |
|
|
8.24 |
% |
|
$ |
1,751 |
|
|
$ |
(357 |
) |
| (1) Reflected on a
tax-equivalent basis. |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
Interest income increased $1.9 million
quarter-over-quarter on a tax equivalent basis, driven by the level
of average earning assets which increased by $55.3 million
contributing $862 thousand to the interest income increase. In
addition, the yield on earnings assets increased 8 basis points
during the period.
Average total loans, excluding residential loans
for sale, increased $25.0 million resulting in an increase due to
volume in interest income of $456 thousand. The largest drivers of
this increase were commercial, commercial real estate, and small
business loans which on a combined basis increased $34.4 million on
average, partially offset by a decrease in average leases of $11.6
million. Home equity, residential real estate, consumer and other
loans held in portfolio increased on a combined basis $2.1 million
on average. The yield on total loans increased 10 basis
points, helped by loan fees of $509 thousand, and the yield on cash
and investments increased 3 basis points on a combined
basis.
Total interest expense increased $458 thousand,
quarter-over-quarter, due to higher levels of deposits,
particularly money market and time deposits having a bigger impact
than rate changes. Interest expense on total deposits increased
$322 thousand and interest expense on borrowings increased $134
thousand. During the period, money market accounts and time
deposits increased $15.1 million and $8.6 million on average,
respectively, while interest-bearing demand deposits decreased $640
thousand on average. Borrowings increased $9.1 million on average.
Overall increase in interest expense on deposits due to volume
changes was $1.1 million.
The cost of interest-bearing deposits decreased
3 basis points driven by certain money market funds and wholesale
time deposits which repriced at lower costs. The total decrease in
interest expense on deposits attributable to rate changes was $782
thousand. Overall the net interest margin increased 14 basis points
to 3.20% as the yield on earning assets improved, the cost of funds
declined and non-interest bearing balances increased $18.7 million
on average.
Provision for Credit Losses
The overall provision for credit losses for the
third quarter decreased $398 thousand to $2.3 million, from $2.7
million in the second quarter. The provision for funded loans
decreased $670 thousand and the provision on unfunded loan
commitments increased $272 thousand during the current
quarter. The third quarter provision for funded loans of $2.0
million declined from the prior quarter due largely to a decrease
of $1.9 million in net charge-offs and was positively impacted by
favorable changes in certain portfolio baseline loss rates.
Non-interest income
The following table presents the components of
non-interest income for the periods indicated:
| |
Quarter Ended |
|
|
|
|
| (Dollars in thousands) |
September 30, 2024 |
|
June 30, 2024 |
|
$ Change |
|
% Change |
|
Mortgage banking income |
$ |
6,474 |
|
|
$ |
5,420 |
|
|
$ |
1,054 |
|
|
19.4 |
% |
| Wealth management income |
|
1,447 |
|
|
|
1,444 |
|
|
|
3 |
|
|
0.2 |
% |
| SBA loan income |
|
544 |
|
|
|
785 |
|
|
|
(241 |
) |
|
(30.7 |
)% |
| Earnings on investment in life
insurance |
|
222 |
|
|
|
215 |
|
|
|
7 |
|
|
3.3 |
% |
| Net change in the fair value
of derivative instruments |
|
(102 |
) |
|
|
203 |
|
|
|
(305 |
) |
|
(150.2 |
)% |
| Net change in the fair value
of loans held-for-sale |
|
169 |
|
|
|
(29 |
) |
|
|
198 |
|
|
(682.8 |
)% |
| Net change in the fair value
of loans held-for-investment |
|
965 |
|
|
|
(24 |
) |
|
|
989 |
|
|
(4120.8 |
)% |
| Net loss (gain) on hedging
activity |
|
(197 |
) |
|
|
(63 |
) |
|
|
(134 |
) |
|
212.7 |
% |
| Net loss on sale of investment
securities available-for-sale |
|
(57 |
) |
|
|
— |
|
|
|
(57 |
) |
|
(100.0 |
)% |
| Other |
|
1,366 |
|
|
|
1,293 |
|
|
|
73 |
|
|
5.6 |
% |
| Total non-interest income |
$ |
10,831 |
|
|
$ |
9,244 |
|
|
$ |
1,587 |
|
|
17.2 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total non-interest income increased $1.6
million, or 17.2%, quarter-over-quarter as mortgage banking income
increased $1.1 million, or 19.4%. Mortgage loan sales increased
$47.8 million or 24.1% quarter over quarter driving higher gain on
sale income at a slightly higher margin. SBA and other income
decreased $168 thousand combined due largely to lower levels of SBA
loan sales. SBA loans sold for the quarter-ended September
30, 2024 totaled $11.9 million, down $246 thousand, or 2.0%,
compared to the quarter-ended June 30, 2024. The gross margin on
SBA sales was 7.9% for the quarter, down from 8.8% for the previous
quarter.
Non-interest expense
The following table presents the components of
non-interest expense for the periods indicated:
| |
Quarter Ended |
|
|
|
|
| (Dollars in thousands) |
September 30, 2024 |
|
June 30, 2024 |
|
$ Change |
|
% Change |
|
Salaries and employee benefits |
$ |
12,829 |
|
$ |
11,437 |
|
$ |
1,392 |
|
|
12.2 |
% |
| Occupancy and equipment |
|
1,243 |
|
|
1,230 |
|
|
13 |
|
|
1.1 |
% |
| Professional fees |
|
1,106 |
|
|
1,029 |
|
|
77 |
|
|
7.5 |
% |
| Data processing and
software |
|
1,553 |
|
|
1,506 |
|
|
47 |
|
|
3.1 |
% |
| Advertising and promotion |
|
717 |
|
|
989 |
|
|
(272 |
) |
|
(27.5 |
)% |
| Pennsylvania bank shares
tax |
|
181 |
|
|
274 |
|
|
(93 |
) |
|
(33.9 |
)% |
| Other |
|
2,917 |
|
|
2,553 |
|
|
365 |
|
|
14.3 |
% |
| Total non-interest
expense |
$ |
20,546 |
|
$ |
19,018 |
|
$ |
1,528 |
|
|
8.0 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
Salaries and employee benefits increased $1.4
million overall, with bank and wealth segments combined having
increased $588 thousand, and the mortgage segment increased $804
thousand. Mortgage segment salaries, commissions, and
employee benefits are impacted by volume and therefore increased as
originations increased $17.2 million over the prior quarter.
Professional fees increased $77 thousand during
the current quarter due to an increased level of legal expense
related to non-performing assets. Advertising and promotion
expense decreased $272 thousand from the prior quarter as a result
of a seasonal decrease in business development expenses.
Other expense increased $365 thousand from the prior quarter due to
an increase in employee travel and trainings, combined with an
increase in loan fees.
Balance Sheet - September 30, 2024
Compared to June 30, 2024
Total assets increased $36.1 million, or 1.5%,
to $2.4 billion as of September 30, 2024 from $2.4 billion at June
30, 2024. This increase was driven by strong loan growth and an
increase in investments. Interest-bearing cash increased $4.2
million, or 26.9%, to $19.8 million as of September 30, 2024, from
June 30, 2024.
Portfolio loan growth was $20.3 million, or 1.0%
quarter-over-quarter. The portfolio growth was generated from
commercial mortgage loans which increased $25.6 million, or 3.3%,
commercial & industrial loans which increased $11.4 million, or
3.2%, and small business loans which increased $5.0 million despite
the sale of $11.9 million in small business loan during the
quarter. Lease financings decreased $10.9 million, or 11.2%
from June 30, 2024, partially offsetting the above noted loan
growth, but this decline was expected as we continue to refocus
away from lease originations. Other assets increased by $7.1
million quarter-over-quarter, due largely to certain SBA loan sales
that settled after quarter-end.
Total deposits increased $63.5 million, or 3.3%
quarter-over-quarter, due largely to higher levels of money market
accounts and time deposits to a lesser degree. Money market
accounts and savings accounts increased a combined $35.4 million,
while time deposits increased $11.6 million from largely wholesale
efforts, and interest bearing demand deposits increased $3.4
million. Non-interest bearing deposits increased $13.2
million. Overall borrowings decreased $42.4 million, or 22.6%
quarter-over-quarter.
Total stockholders’ equity increased by $5.1
million from June 30, 2024, to $167.5 million as of September 30,
2024. Changes to equity for the current quarter included net
income of $4.7 million, less dividends paid of $1.4 million, plus
an increase of $1.3 million in other comprehensive income due to
the positive impact that declining interest rate environment had on
the investment portfolio. The Community Bank Leverage Ratio
for the Bank was 9.32% at September 30, 2024.
Asset Quality Summary
Non-performing loans increased $7.5 million to
$45.1 million at September 30, 2024 compared to $37.6 million at
June 30, 2024. As a result of the increase, the ratio of
non-performing loans to total loans increased to 2.20% as of
September 30, 2024, from 1.84% as of June 30, 2024, and the ratio
of non-performing assets to total assets increased to 1.97% as of
September 30, 2024, compared to 1.68% as of June 30, 2024. The
increase in non-performing assets was led by a $4.2 million
increase in non-performing residential mortgage loans and a $1.8
million increase in non-performing commercial loans as the bank
repurchased at a discount of $574 thousand, the remaining balance
of a commercial loan participation to another bank. The impact of
this loan repurchase increased the balance of non-performing loans
by $2.1 million and also increased the ACL by the amount of the
discount.
Meridian realized net charge-offs of 0.11% of
total average loans for the quarter ended September 30, 2024, down
from 0.20% for the quarter ended June 30, 2024. Net
charge-offs decreased to $2.3 million for the quarter ended
September 30, 2024, compared to net charge-offs of $4.1 million for
the quarter ended June 30, 2024. Third quarter charge-offs
were comprised of $1.2 million from small ticket equipment leases
which are charged-off after becoming more than 120 days past due,
and $1.1 million in SBA loans. Overall there were recoveries
of $153 thousand, largely related to leases and small business
loans.
The ratio of allowance for credit losses to
total loans held for investment, excluding loans at fair value (a
non-GAAP measure, see reconciliation in the Appendix), was 1.10% as
of September 30, 2024, consistent with the coverage ratio of 1.10%
as of June 30, 2024. As of September 30, 2024 there were
specific reserves of $6.8 million against individually evaluated
loans, a decrease of $394 thousand from $7.2 million in specific
reserves as of June 30, 2024. The specific reserve decline
over the prior quarter was the result of a drop in SBA loan related
reserves driven by charge-offs during the current quarter,
partially offset by an increase in specific reserve as the result
of repurchasing a commercial loan participation from another bank
as discussed above.
About Meridian Corporation
Meridian Bank, the wholly owned subsidiary of
Meridian Corporation, is an innovative community bank serving
Pennsylvania, New Jersey, Delaware and Maryland. Through its 17
offices, including banking branches and mortgage locations,
Meridian offers a full suite of financial products and services.
Meridian specializes in business and industrial lending, retail and
commercial real estate lending, electronic payments, and wealth
management solutions through Meridian Wealth Partners. Meridian
also offers a broad menu of high-yield depository products
supported by robust online and mobile access. For additional
information, visit our website at www.meridianbanker.com. Member
FDIC.
“Safe Harbor” Statement
In addition to historical information, this
press release may contain “forward-looking statements” within the
meaning of the “safe harbor” provisions of the Private Securities
Litigation Reform Act of 1995. These forward-looking statements
include statements with respect to Meridian Corporation’s
strategies, goals, beliefs, expectations, estimates, intentions,
capital raising efforts, financial condition and results of
operations, future performance and business. Statements preceded
by, followed by, or that include the words “may,” “could,”
“should,” “pro forma,” “looking forward,” “would,” “believe,”
“expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar
expressions generally indicate a forward-looking statement.
These forward-looking statements involve risks and uncertainties
that are subject to change based on various important factors (some
of which, in whole or in part, are beyond Meridian Corporation’s
control). Numerous competitive, economic, regulatory, legal and
technological factors, risks and uncertainties that could cause
actual results to differ materially include, without limitation,
credit losses and the credit risk of our commercial and consumer
loan products; changes in the level of charge-offs and changes in
estimates of the adequacy of the allowance for credit losses, or
ACL; cyber-security concerns; rapid technological developments and
changes; increased competitive pressures; changes in spreads on
interest-earning assets and interest-bearing liabilities; changes
in general economic conditions and conditions within the securities
markets; unanticipated changes in our liquidity position;
unanticipated changes in regulatory and governmental policies
impacting interest rates and financial markets; legislation
affecting the financial services industry as a whole, and Meridian
Corporation, in particular; changes in accounting policies,
practices or guidance; developments affecting the industry
and the soundness of financial institutions and further disruption
to the economy and U.S. banking system; among others, could cause
Meridian Corporation’s financial performance to differ materially
from the goals, plans, objectives, intentions and expectations
expressed in such forward-looking statements. Meridian Corporation
cautions that the foregoing factors are not exclusive, and neither
such factors nor any such forward-looking statement takes into
account the impact of any future events. All forward-looking
statements and information set forth herein are based on
management’s current beliefs and assumptions as of the date hereof
and speak only as of the date they are made. For a more complete
discussion of the assumptions, risks and uncertainties related to
our business, you are encouraged to review Meridian Corporation’s
filings with the Securities and Exchange Commission, including our
Annual Report on Form 10-K for the year ended December 31, 2023 and
subsequently filed quarterly reports on Form 10-Q and current
reports on Form 8-K that update or provide information in
addition to the information included in the Form 10-K and
Form 10-Q filings, if any. Meridian Corporation does not
undertake to update any forward-looking statement whether written
or oral, that may be made from time to time by Meridian Corporation
or by or on behalf of Meridian Bank.
|
MERIDIAN CORPORATION AND SUBSIDIARIES |
|
FINANCIAL RATIOS (Unaudited) |
|
(Dollar amounts and shares in thousands, except per share
amounts) |
| |
| |
Quarter Ended |
| |
September 30, 2024 |
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
| Earnings and Per Share
Data: |
|
|
|
|
|
|
|
|
|
|
Net income |
$ |
4,743 |
|
|
$ |
3,326 |
|
|
$ |
2,676 |
|
|
$ |
571 |
|
|
$ |
4,005 |
|
| Basic earnings per common
share |
$ |
0.43 |
|
|
$ |
0.30 |
|
|
$ |
0.24 |
|
|
$ |
0.05 |
|
|
$ |
0.36 |
|
| Diluted earnings per common
share |
$ |
0.42 |
|
|
$ |
0.30 |
|
|
$ |
0.24 |
|
|
$ |
0.05 |
|
|
$ |
0.35 |
|
| Common shares outstanding |
|
11,229 |
|
|
|
11,191 |
|
|
|
11,186 |
|
|
|
11,183 |
|
|
|
11,178 |
|
| |
|
|
|
|
|
|
|
|
|
| Performance
Ratios: |
|
|
|
|
|
|
|
|
|
| Return on average
assets (2) |
|
0.80 |
% |
|
|
0.58 |
% |
|
|
0.47 |
% |
|
|
0.10 |
% |
|
|
0.73 |
% |
| Return on average
equity (2) |
|
11.41 |
|
|
|
8.25 |
|
|
|
6.73 |
|
|
|
1.44 |
|
|
|
10.17 |
|
| Net interest margin
(tax-equivalent) (2) |
|
3.20 |
|
|
|
3.06 |
|
|
|
3.09 |
|
|
|
3.18 |
|
|
|
3.29 |
|
| Yield on earning assets
(tax-equivalent) (2) |
|
7.06 |
|
|
|
6.98 |
|
|
|
6.90 |
|
|
|
6.81 |
|
|
|
6.76 |
|
| Cost of funds (2) |
|
4.05 |
|
|
|
4.10 |
|
|
|
4.00 |
|
|
|
3.81 |
|
|
|
3.63 |
|
| Efficiency ratio |
|
70.67 |
% |
|
|
72.89 |
% |
|
|
73.90 |
% |
|
|
78.63 |
% |
|
|
79.09 |
% |
| |
|
|
|
|
|
|
|
|
|
| Asset Quality
Ratios: |
|
|
|
|
|
|
|
|
|
| Net charge-offs (recoveries)
to average loans |
|
0.11 |
% |
|
|
0.20 |
% |
|
|
0.12 |
% |
|
|
0.11 |
% |
|
|
0.05 |
% |
| Non-performing loans to total
loans |
|
2.20 |
|
|
|
1.84 |
|
|
|
1.93 |
|
|
|
1.76 |
|
|
|
1.53 |
|
| Non-performing assets to total
assets |
|
1.97 |
|
|
|
1.68 |
|
|
|
1.74 |
|
|
|
1.58 |
|
|
|
1.38 |
|
| Allowance for credit losses
to: |
|
|
|
|
|
|
|
|
|
|
Total loans and other finance receivables |
|
1.09 |
|
|
|
1.09 |
|
|
|
1.18 |
|
|
|
1.17 |
|
|
|
1.04 |
|
|
Total loans and other finance receivables (excluding loans at fair
value) (1) |
|
1.10 |
|
|
|
1.10 |
|
|
|
1.19 |
|
|
|
1.17 |
|
|
|
1.05 |
|
|
Non-performing loans |
|
48.66 |
% |
|
|
57.66 |
% |
|
|
60.59 |
% |
|
|
65.48 |
% |
|
|
67.61 |
% |
| |
|
|
|
|
|
|
|
|
|
| Capital
Ratios: |
|
|
|
|
|
|
|
|
|
| Book value per common
share |
$ |
14.91 |
|
|
$ |
14.51 |
|
|
$ |
14.30 |
|
|
$ |
14.13 |
|
|
$ |
13.88 |
|
| Tangible book value per common
share |
$ |
14.58 |
|
|
$ |
14.17 |
|
|
$ |
13.96 |
|
|
$ |
13.78 |
|
|
$ |
13.53 |
|
| Total equity/Total assets |
|
7.01 |
% |
|
|
6.91 |
% |
|
|
6.98 |
% |
|
|
7.04 |
% |
|
|
6.95 |
% |
| Tangible common
equity/Tangible assets - Corporation (1) |
|
6.87 |
|
|
|
6.76 |
|
|
|
6.82 |
|
|
|
6.87 |
|
|
|
6.79 |
|
| Tangible common
equity/Tangible assets - Bank (1) |
|
8.95 |
|
|
|
8.85 |
|
|
|
8.93 |
|
|
|
8.94 |
|
|
|
8.89 |
|
| Tier 1 leverage ratio -
Bank |
|
9.32 |
|
|
|
9.33 |
|
|
|
9.42 |
|
|
|
9.46 |
|
|
|
9.65 |
|
| Common tier 1 risk-based
capital ratio - Bank |
|
10.17 |
|
|
|
9.84 |
|
|
|
9.87 |
|
|
|
10.10 |
|
|
|
10.82 |
|
| Tier 1 risk-based capital
ratio - Bank |
|
10.17 |
|
|
|
9.84 |
|
|
|
9.87 |
|
|
|
10.10 |
|
|
|
10.82 |
|
| Total
risk-based capital ratio - Bank |
|
11.22 |
% |
|
|
10.84 |
% |
|
|
10.95 |
% |
|
|
11.17 |
% |
|
|
11.85 |
% |
| (1) See Non-GAAP reconciliation in the
Appendix |
|
|
|
|
|
|
|
|
| (2) Annualized |
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
MERIDIAN CORPORATION AND SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited) |
|
(Dollar amounts and shares in thousands, except per share
amounts) |
| |
| |
Three Months Ended |
|
Nine Months Ended |
| |
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
| Interest
income: |
|
|
|
|
|
|
|
|
|
|
Loans and other finance receivables, including fees |
$ |
38,103 |
|
|
$ |
36,486 |
|
|
$ |
33,980 |
|
|
$ |
109,928 |
|
|
$ |
95,612 |
|
| Securities - taxable |
|
1,480 |
|
|
|
1,324 |
|
|
|
901 |
|
|
|
4,055 |
|
|
|
2,853 |
|
| Securities - tax-exempt |
|
320 |
|
|
|
324 |
|
|
|
333 |
|
|
|
969 |
|
|
|
1,038 |
|
| Cash and cash equivalents |
|
416 |
|
|
|
331 |
|
|
|
245 |
|
|
|
1,047 |
|
|
|
741 |
|
|
Total interest income |
|
40,319 |
|
|
|
38,465 |
|
|
|
35,459 |
|
|
|
115,999 |
|
|
|
100,244 |
|
| Interest
expense: |
|
|
|
|
|
|
|
|
|
| Deposits |
|
19,313 |
|
|
|
18,991 |
|
|
|
15,543 |
|
|
|
55,696 |
|
|
|
41,013 |
|
| Borrowings and subordinated
debentures |
|
2,764 |
|
|
|
2,628 |
|
|
|
2,692 |
|
|
|
8,606 |
|
|
|
7,230 |
|
|
Total interest expense |
|
22,077 |
|
|
|
21,619 |
|
|
|
18,235 |
|
|
|
64,302 |
|
|
|
48,243 |
|
|
Net interest income |
|
18,242 |
|
|
|
16,846 |
|
|
|
17,224 |
|
|
|
51,697 |
|
|
|
52,001 |
|
| Provision for credit losses |
|
2,282 |
|
|
|
2,680 |
|
|
|
82 |
|
|
|
7,828 |
|
|
|
2,186 |
|
|
Net interest income after provision for credit losses |
|
15,960 |
|
|
|
14,166 |
|
|
|
17,142 |
|
|
|
43,869 |
|
|
|
49,815 |
|
| Non-interest
income: |
|
|
|
|
|
|
|
|
|
| Mortgage banking income |
|
6,474 |
|
|
|
5,420 |
|
|
|
4,819 |
|
|
|
15,528 |
|
|
|
13,143 |
|
| Wealth management income |
|
1,447 |
|
|
|
1,444 |
|
|
|
1,258 |
|
|
|
4,208 |
|
|
|
3,689 |
|
| SBA loan income |
|
544 |
|
|
|
785 |
|
|
|
982 |
|
|
|
2,315 |
|
|
|
3,463 |
|
| Earnings on investment in life
insurance |
|
222 |
|
|
|
215 |
|
|
|
201 |
|
|
|
644 |
|
|
|
585 |
|
| Net change in the fair value of
derivative instruments |
|
(102 |
) |
|
|
203 |
|
|
|
103 |
|
|
|
176 |
|
|
|
217 |
|
| Net change in the fair value of
loans held-for-sale |
|
169 |
|
|
|
(29 |
) |
|
|
111 |
|
|
|
138 |
|
|
|
(88 |
) |
| Net change in the fair value of
loans held-for-investment |
|
965 |
|
|
|
(24 |
) |
|
|
(570 |
) |
|
|
766 |
|
|
|
(673 |
) |
| Net loss (gain) on hedging
activity |
|
(197 |
) |
|
|
(63 |
) |
|
|
82 |
|
|
|
(279 |
) |
|
|
81 |
|
| Net loss on sale of investment
securities available-for-sale |
|
(57 |
) |
|
|
— |
|
|
|
(3 |
) |
|
|
(57 |
) |
|
|
(58 |
) |
| Other |
|
1,366 |
|
|
|
1,293 |
|
|
|
1,103 |
|
|
|
4,620 |
|
|
|
3,489 |
|
|
Total non-interest income |
|
10,831 |
|
|
|
9,244 |
|
|
|
8,086 |
|
|
|
28,059 |
|
|
|
23,848 |
|
| Non-interest
expense: |
|
|
|
|
|
|
|
|
|
| Salaries and employee
benefits |
|
12,829 |
|
|
|
11,437 |
|
|
|
12,420 |
|
|
|
34,839 |
|
|
|
35,633 |
|
| Occupancy and equipment |
|
1,243 |
|
|
|
1,230 |
|
|
|
1,226 |
|
|
|
3,706 |
|
|
|
3,610 |
|
| Professional fees |
|
1,106 |
|
|
|
1,029 |
|
|
|
1,104 |
|
|
|
3,633 |
|
|
|
2,930 |
|
| Data processing and
software |
|
1,553 |
|
|
|
1,506 |
|
|
|
1,652 |
|
|
|
4,591 |
|
|
|
4,764 |
|
| Advertising and promotion |
|
717 |
|
|
|
989 |
|
|
|
848 |
|
|
|
2,454 |
|
|
|
2,799 |
|
| Pennsylvania bank shares tax |
|
181 |
|
|
|
274 |
|
|
|
244 |
|
|
|
729 |
|
|
|
735 |
|
| Other |
|
2,917 |
|
|
|
2,553 |
|
|
|
2,524 |
|
|
|
7,786 |
|
|
|
6,951 |
|
|
Total non-interest expense |
|
20,546 |
|
|
|
19,018 |
|
|
|
20,018 |
|
|
|
57,738 |
|
|
|
57,422 |
|
|
Income before income taxes |
|
6,245 |
|
|
|
4,392 |
|
|
|
5,210 |
|
|
|
14,190 |
|
|
|
16,241 |
|
| Income tax expense |
|
1,502 |
|
|
|
1,066 |
|
|
|
1,205 |
|
|
|
3,445 |
|
|
|
3,568 |
|
|
Net income |
$ |
4,743 |
|
|
$ |
3,326 |
|
|
$ |
4,005 |
|
|
$ |
10,745 |
|
|
$ |
12,673 |
|
| |
|
|
|
|
|
|
|
|
|
| Basic earnings per common
share |
$ |
0.43 |
|
|
$ |
0.30 |
|
|
$ |
0.36 |
|
|
$ |
0.97 |
|
|
$ |
1.14 |
|
| Diluted earnings per common
share |
$ |
0.42 |
|
|
$ |
0.30 |
|
|
$ |
0.35 |
|
|
$ |
0.96 |
|
|
$ |
1.11 |
|
| |
|
|
|
|
|
|
|
|
|
| Basic weighted average shares
outstanding |
|
11,110 |
|
|
|
11,096 |
|
|
|
11,058 |
|
|
|
11,098 |
|
|
|
11,129 |
|
| Diluted weighted average shares
outstanding |
|
11,234 |
|
|
|
11,150 |
|
|
|
11,363 |
|
|
|
11,198 |
|
|
|
11,449 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| MERIDIAN
CORPORATION AND SUBSIDIARIES |
| CONDENSED
CONSOLIDATED STATEMENTS OF CONDITION (Unaudited) |
| (Dollar
amounts and shares in thousands, except per share
amounts) |
| |
|
|
|
|
|
|
|
|
|
| |
September 30, 2024 |
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
| Assets: |
|
|
|
|
|
|
|
|
|
|
Cash and due from banks |
$ |
12,542 |
|
|
$ |
8,457 |
|
|
$ |
8,935 |
|
|
$ |
10,067 |
|
|
$ |
12,734 |
|
| Interest-bearing deposits at
other banks |
|
19,805 |
|
|
|
15,601 |
|
|
|
14,092 |
|
|
|
46,630 |
|
|
|
47,025 |
|
|
Cash and cash equivalents |
|
32,347 |
|
|
|
24,058 |
|
|
|
23,027 |
|
|
|
56,697 |
|
|
|
59,759 |
|
| Securities available-for-sale,
at fair value |
|
171,568 |
|
|
|
159,141 |
|
|
|
150,996 |
|
|
|
146,019 |
|
|
|
122,218 |
|
| Securities held-to-maturity,
at amortized cost |
|
33,833 |
|
|
|
35,089 |
|
|
|
35,157 |
|
|
|
35,781 |
|
|
|
36,232 |
|
| Equity investments |
|
2,166 |
|
|
|
2,088 |
|
|
|
2,092 |
|
|
|
2,121 |
|
|
|
2,019 |
|
| Mortgage loans held for sale,
at fair value |
|
46,602 |
|
|
|
54,278 |
|
|
|
29,124 |
|
|
|
24,816 |
|
|
|
23,144 |
|
| Loans and other finance
receivables, net of fees and costs |
|
2,008,396 |
|
|
|
1,988,535 |
|
|
|
1,956,315 |
|
|
|
1,895,806 |
|
|
|
1,885,629 |
|
| Allowance for credit
losses |
|
(21,965 |
) |
|
|
(21,703 |
) |
|
|
(23,171 |
) |
|
|
(22,107 |
) |
|
|
(19,683 |
) |
|
Loans and other finance receivables, net of the allowance for
credit losses |
|
1,986,431 |
|
|
|
1,966,832 |
|
|
|
1,933,144 |
|
|
|
1,873,699 |
|
|
|
1,865,946 |
|
| Restricted investment in bank
stock |
|
8,542 |
|
|
|
10,044 |
|
|
|
8,560 |
|
|
|
8,072 |
|
|
|
8,309 |
|
| Bank premises and equipment,
net |
|
12,807 |
|
|
|
13,114 |
|
|
|
13,451 |
|
|
|
13,557 |
|
|
|
13,310 |
|
| Bank owned life insurance |
|
29,489 |
|
|
|
29,267 |
|
|
|
29,051 |
|
|
|
28,844 |
|
|
|
28,641 |
|
| Accrued interest
receivable |
|
10,012 |
|
|
|
9,973 |
|
|
|
9,864 |
|
|
|
9,325 |
|
|
|
8,984 |
|
| Other real estate owned |
|
1,862 |
|
|
|
1,862 |
|
|
|
1,703 |
|
|
|
1,703 |
|
|
|
1,703 |
|
| Deferred income taxes |
|
3,537 |
|
|
|
3,950 |
|
|
|
4,339 |
|
|
|
4,201 |
|
|
|
4,993 |
|
| Servicing assets |
|
4,364 |
|
|
|
11,341 |
|
|
|
11,573 |
|
|
|
11,748 |
|
|
|
11,835 |
|
| Servicing assets held for
sale |
|
6,609 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
| Goodwill |
|
899 |
|
|
|
899 |
|
|
|
899 |
|
|
|
899 |
|
|
|
899 |
|
| Intangible assets |
|
2,818 |
|
|
|
2,869 |
|
|
|
2,920 |
|
|
|
2,971 |
|
|
|
3,022 |
|
| Other assets |
|
33,835 |
|
|
|
26,779 |
|
|
|
37,023 |
|
|
|
25,740 |
|
|
|
39,957 |
|
|
Total assets |
$ |
2,387,721 |
|
|
$ |
2,351,584 |
|
|
$ |
2,292,923 |
|
|
$ |
2,246,193 |
|
|
$ |
2,230,971 |
|
| |
|
|
|
|
|
|
|
|
|
|
Liabilities: |
|
|
|
|
|
|
|
|
|
| Deposits: |
|
|
|
|
|
|
|
|
|
| Non-interest bearing |
$ |
237,207 |
|
|
$ |
224,040 |
|
|
$ |
220,581 |
|
|
$ |
239,289 |
|
|
$ |
244,668 |
|
| Interest bearing |
|
|
|
|
|
|
|
|
|
| Interest checking |
|
133,429 |
|
|
|
130,062 |
|
|
|
121,204 |
|
|
|
150,898 |
|
|
|
156,537 |
|
| Money market and savings
deposits |
|
822,837 |
|
|
|
787,479 |
|
|
|
797,525 |
|
|
|
747,803 |
|
|
|
746,599 |
|
| Time deposits |
|
785,454 |
|
|
|
773,855 |
|
|
|
761,386 |
|
|
|
685,472 |
|
|
|
660,841 |
|
| Total interest-bearing
deposits |
|
1,741,720 |
|
|
|
1,691,396 |
|
|
|
1,680,115 |
|
|
|
1,584,173 |
|
|
|
1,563,977 |
|
|
Total deposits |
|
1,978,927 |
|
|
|
1,915,436 |
|
|
|
1,900,696 |
|
|
|
1,823,462 |
|
|
|
1,808,645 |
|
| Borrowings |
|
144,880 |
|
|
|
187,260 |
|
|
|
145,803 |
|
|
|
174,896 |
|
|
|
177,959 |
|
| Subordinated debentures |
|
49,928 |
|
|
|
49,897 |
|
|
|
49,867 |
|
|
|
49,836 |
|
|
|
50,079 |
|
| Accrued interest payable |
|
7,017 |
|
|
|
7,709 |
|
|
|
8,350 |
|
|
|
10,324 |
|
|
|
7,814 |
|
| Other liabilities |
|
39,519 |
|
|
|
28,900 |
|
|
|
28,271 |
|
|
|
29,653 |
|
|
|
31,360 |
|
|
Total liabilities |
|
2,220,271 |
|
|
|
2,189,202 |
|
|
|
2,132,987 |
|
|
|
2,088,171 |
|
|
|
2,075,857 |
|
| |
|
|
|
|
|
|
|
|
|
| Stockholders’
equity: |
|
|
|
|
|
|
|
|
|
| Common stock |
|
13,232 |
|
|
|
13,194 |
|
|
|
13,189 |
|
|
|
13,186 |
|
|
|
13,181 |
|
| Surplus |
|
81,002 |
|
|
|
80,639 |
|
|
|
80,487 |
|
|
|
80,325 |
|
|
|
79,731 |
|
| Treasury stock |
|
(26,079 |
) |
|
|
(26,079 |
) |
|
|
(26,079 |
) |
|
|
(26,079 |
) |
|
|
(26,079 |
) |
| Unearned common stock held by
employee stock ownership plan |
|
(1,204 |
) |
|
|
(1,204 |
) |
|
|
(1,204 |
) |
|
|
(1,204 |
) |
|
|
(1,403 |
) |
| Retained earnings |
|
107,765 |
|
|
|
104,420 |
|
|
|
102,492 |
|
|
|
101,216 |
|
|
|
102,043 |
|
| Accumulated other
comprehensive loss |
|
(7,266 |
) |
|
|
(8,588 |
) |
|
|
(8,949 |
) |
|
|
(9,422 |
) |
|
|
(12,359 |
) |
|
Total stockholders’ equity |
|
167,450 |
|
|
|
162,382 |
|
|
|
159,936 |
|
|
|
158,022 |
|
|
|
155,114 |
|
|
Total liabilities and stockholders’ equity |
$ |
2,387,721 |
|
|
$ |
2,351,584 |
|
|
$ |
2,292,923 |
|
|
$ |
2,246,193 |
|
|
$ |
2,230,971 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MERIDIAN CORPORATION AND SUBSIDIARIES |
|
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SEGMENT
INFORMATION (Unaudited) |
|
(Dollar amounts and shares in thousands, except per share
amounts) |
| |
| |
Three Months Ended |
| |
September 30,2024 |
|
June 30,2024 |
|
March 31,2024 |
|
December 31,2023 |
|
September 30,2023 |
|
Interest income |
$ |
40,319 |
|
$ |
38,465 |
|
$ |
37,215 |
|
$ |
36,346 |
|
$ |
35,459 |
| Interest expense |
|
22,077 |
|
|
21,619 |
|
|
20,606 |
|
|
19,404 |
|
|
18,235 |
| Net interest income |
|
18,242 |
|
|
16,846 |
|
|
16,609 |
|
|
16,942 |
|
|
17,224 |
| Provision for credit losses |
|
2,282 |
|
|
2,680 |
|
|
2,866 |
|
|
4,628 |
|
|
82 |
| Non-interest income |
|
10,831 |
|
|
9,244 |
|
|
7,984 |
|
|
8,117 |
|
|
8,086 |
| Non-interest expense |
|
20,546 |
|
|
19,018 |
|
|
18,174 |
|
|
19,703 |
|
|
20,018 |
| Income before income tax
expense |
|
6,245 |
|
|
4,392 |
|
|
3,553 |
|
|
728 |
|
|
5,210 |
| Income tax expense |
|
1,502 |
|
|
1,066 |
|
|
877 |
|
|
157 |
|
|
1,205 |
| Net Income |
$ |
4,743 |
|
$ |
3,326 |
|
$ |
2,676 |
|
$ |
571 |
|
$ |
4,005 |
| |
|
|
|
|
|
|
|
|
|
| Basic weighted average shares
outstanding |
|
11,110 |
|
|
11,096 |
|
|
11,088 |
|
|
11,070 |
|
|
11,058 |
| Basic earnings per common
share |
$ |
0.43 |
|
$ |
0.30 |
|
$ |
0.24 |
|
$ |
0.05 |
|
$ |
0.36 |
| |
|
|
|
|
|
|
|
|
|
| Diluted weighted average shares
outstanding |
|
11,234 |
|
|
11,150 |
|
|
11,201 |
|
|
11,206 |
|
|
11,363 |
| Diluted earnings per common
share |
$ |
0.42 |
|
$ |
0.30 |
|
$ |
0.24 |
|
$ |
0.05 |
|
$ |
0.35 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Segment Information |
| |
Three Months Ended September 30,
2024 |
|
Three Months Ended September 30,
2023 |
| (dollars in thousands) |
Bank |
|
Wealth |
|
Mortgage |
|
Total |
|
Bank |
|
Wealth |
|
Mortgage |
|
Total |
|
Net interest income |
$ |
18,151 |
|
|
$ |
46 |
|
|
$ |
45 |
|
|
$ |
18,242 |
|
|
$ |
17,205 |
|
|
$ |
(15 |
) |
|
$ |
34 |
|
|
$ |
17,224 |
|
| Provision for credit losses |
|
2,282 |
|
|
|
— |
|
|
|
— |
|
|
|
2,282 |
|
|
|
82 |
|
|
|
— |
|
|
|
— |
|
|
|
82 |
|
| Net interest income after
provision |
|
15,869 |
|
|
|
46 |
|
|
|
45 |
|
|
|
15,960 |
|
|
|
17,123 |
|
|
|
(15 |
) |
|
|
34 |
|
|
|
17,142 |
|
| Non-interest income |
|
1,358 |
|
|
|
1,447 |
|
|
|
8,026 |
|
|
|
10,831 |
|
|
|
1,758 |
|
|
|
1,258 |
|
|
|
5,070 |
|
|
|
8,086 |
|
| Non-interest expense |
|
13,287 |
|
|
|
840 |
|
|
|
6,419 |
|
|
|
20,546 |
|
|
|
12,564 |
|
|
|
826 |
|
|
|
6,628 |
|
|
|
20,018 |
|
| Income (loss) before income
taxes |
$ |
3,940 |
|
|
$ |
653 |
|
|
$ |
1,652 |
|
|
$ |
6,245 |
|
|
$ |
6,317 |
|
|
$ |
417 |
|
|
$ |
(1,524 |
) |
|
$ |
5,210 |
|
| Efficiency ratio |
|
68 |
% |
|
|
56 |
% |
|
|
80 |
% |
|
|
71 |
% |
|
|
66 |
% |
|
|
66 |
% |
|
|
130 |
% |
|
|
79 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Nine Months Ended September 30,
2024 |
|
Nine Months Ended September 30,
2023 |
| (dollars in thousands) |
Bank |
|
Wealth |
|
Mortgage |
|
Total |
|
Bank |
|
Wealth |
|
Mortgage |
|
Total |
| Net interest income |
$ |
51,528 |
|
|
$ |
76 |
|
|
$ |
93 |
|
|
$ |
51,697 |
|
|
$ |
51,928 |
|
|
$ |
(12 |
) |
|
$ |
85 |
|
|
$ |
52,001 |
|
| Provision for credit losses |
|
7,828 |
|
|
|
— |
|
|
|
— |
|
|
|
7,828 |
|
|
|
2,186 |
|
|
|
— |
|
|
|
— |
|
|
|
2,186 |
|
| Net interest income after
provision |
|
43,700 |
|
|
|
76 |
|
|
|
93 |
|
|
|
43,869 |
|
|
|
49,742 |
|
|
|
(12 |
) |
|
|
85 |
|
|
|
49,815 |
|
| Non-interest income |
|
4,908 |
|
|
|
4,207 |
|
|
|
18,944 |
|
|
|
28,059 |
|
|
|
5,696 |
|
|
|
3,689 |
|
|
|
14,463 |
|
|
|
23,848 |
|
| Non-interest expense |
|
37,962 |
|
|
|
2,479 |
|
|
|
17,297 |
|
|
|
57,738 |
|
|
|
35,608 |
|
|
|
2,704 |
|
|
|
19,110 |
|
|
|
57,422 |
|
| Income (loss) before income
taxes |
$ |
10,646 |
|
|
$ |
1,804 |
|
|
$ |
1,740 |
|
|
$ |
14,190 |
|
|
$ |
19,830 |
|
|
$ |
973 |
|
|
$ |
(4,562 |
) |
|
$ |
16,241 |
|
| Efficiency ratio |
|
67 |
% |
|
|
58 |
% |
|
|
91 |
% |
|
|
72 |
% |
|
|
62 |
% |
|
|
74 |
% |
|
|
131 |
% |
|
|
76 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MERIDIAN CORPORATION AND
SUBSIDIARIESAPPENDIX: NON-GAAP MEASURES
(Unaudited)(Dollar amounts and shares in
thousands, except per share amounts)
Meridian believes that non-GAAP measures are
meaningful because they reflect adjustments commonly made by
management, investors, regulators and analysts. The non-GAAP
disclosure have limitations as an analytical tool, should not be
viewed as a substitute for performance and financial condition
measures determined in accordance with GAAP, and should not be
considered in isolation or as a substitute for analysis of
Meridian’s results as reported under GAAP, nor is it necessarily
comparable to non-GAAP performance measures that may be presented
by other companies.
| |
Pre-tax, Pre-provision Reconciliation |
| |
Three Months Ended |
|
Nine Months Ended |
|
(Dollars in thousands, except per share data,
Unaudited) |
September 30, 2024 |
|
June 30, 2024 |
|
September 30, 2023 |
|
September 30, 2024 |
|
September 30, 2023 |
| Income before
income tax expense |
$ |
6,245 |
|
$ |
4,392 |
|
$ |
5,210 |
|
$ |
14,190 |
|
$ |
16,241 |
| Provision for credit losses |
|
2,282 |
|
|
2,680 |
|
|
82 |
|
|
7,828 |
|
|
2,186 |
| Pre-tax, pre-provision income |
$ |
8,527 |
|
$ |
7,072 |
|
$ |
5,292 |
|
$ |
22,018 |
|
$ |
18,427 |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Pre-tax, Pre-provision Reconciliation |
| |
Three Months Ended |
|
Nine Months Ended |
|
(Dollars in thousands, except per share data,
Unaudited) |
September 30,2024 |
|
June 30,2024 |
|
September 30,2023 |
|
September 30,2024 |
|
September 30,2023 |
| Bank |
$ |
6,222 |
|
$ |
5,851 |
|
$ |
6,399 |
|
|
$ |
18,474 |
|
$ |
22,016 |
|
| Wealth |
|
653 |
|
|
676 |
|
|
417 |
|
|
|
1,804 |
|
|
973 |
|
| Mortgage |
|
1,652 |
|
|
545 |
|
|
(1,524 |
) |
|
|
1,740 |
|
|
(4,562 |
) |
| Pre-tax, pre-provision income |
$ |
8,527 |
|
$ |
7,072 |
|
$ |
5,292 |
|
|
$ |
22,018 |
|
$ |
18,427 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Allowance For Credit Losses (ACL) to Loans and Other
Finance Receivables, Excluding and Loans at Fair
Value |
| |
September 30,2024 |
|
June 30,2024 |
|
March 31,2024 |
|
December 31,2023 |
|
September 30,2023 |
|
Allowance for credit losses (GAAP) |
$ |
21,965 |
|
|
$ |
21,703 |
|
|
$ |
23,171 |
|
|
$ |
22,107 |
|
|
$ |
19,683 |
|
| |
|
|
|
|
|
|
|
|
|
| Loans and other finance
receivables (GAAP) |
|
2,008,396 |
|
|
|
1,988,535 |
|
|
|
1,956,315 |
|
|
|
1,895,806 |
|
|
|
1,885,629 |
|
| Less: Loans at fair value |
|
(13,965 |
) |
|
|
(12,900 |
) |
|
|
(13,139 |
) |
|
|
(13,726 |
) |
|
|
(13,231 |
) |
| Loans and other finance
receivables, excluding loans at fair value (non-GAAP) |
$ |
1,994,431 |
|
|
$ |
1,975,635 |
|
|
$ |
1,943,176 |
|
|
$ |
1,882,080 |
|
|
$ |
1,872,398 |
|
| |
|
|
|
|
|
|
|
|
|
| ACL to loans and other finance
receivables (GAAP) |
|
1.09 |
% |
|
|
1.09 |
% |
|
|
1.18 |
% |
|
|
1.17 |
% |
|
|
1.04 |
% |
| ACL to loans and other finance
receivables, excluding loans at fair value (non-GAAP) |
|
1.10 |
% |
|
|
1.10 |
% |
|
|
1.19 |
% |
|
|
1.17 |
% |
|
|
1.05 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Tangible Common Equity Ratio Reconciliation -
Corporation |
| |
September 30, 2024 |
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
|
Total stockholders' equity (GAAP) |
$ |
167,450 |
|
|
$ |
162,382 |
|
|
$ |
159,936 |
|
|
$ |
158,022 |
|
|
$ |
155,114 |
|
| Less: Goodwill and intangible
assets |
|
(3,717 |
) |
|
|
(3,768 |
) |
|
|
(3,819 |
) |
|
|
(3,870 |
) |
|
|
(3,921 |
) |
| Tangible common equity
(non-GAAP) |
|
163,733 |
|
|
|
158,614 |
|
|
|
156,117 |
|
|
|
154,152 |
|
|
|
151,193 |
|
| |
|
|
|
|
|
|
|
|
|
| Total assets (GAAP) |
|
2,387,721 |
|
|
|
2,351,584 |
|
|
|
2,292,923 |
|
|
|
2,246,193 |
|
|
|
2,230,971 |
|
| Less: Goodwill and intangible
assets |
|
(3,717 |
) |
|
|
(3,768 |
) |
|
|
(3,819 |
) |
|
|
(3,870 |
) |
|
|
(3,921 |
) |
| Tangible assets
(non-GAAP) |
$ |
2,384,004 |
|
|
$ |
2,347,816 |
|
|
$ |
2,289,104 |
|
|
$ |
2,242,323 |
|
|
$ |
2,227,050 |
|
| Tangible common equity to
tangible assets ratio - Corporation (non-GAAP) |
|
6.87 |
% |
|
|
6.76 |
% |
|
|
6.82 |
% |
|
|
6.87 |
% |
|
|
6.79 |
% |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Tangible Common Equity Ratio Reconciliation -
Bank |
| |
September 30, 2024 |
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
|
Total stockholders' equity (GAAP) |
$ |
217,028 |
|
|
$ |
211,308 |
|
|
$ |
208,319 |
|
|
$ |
204,132 |
|
|
$ |
201,996 |
|
| Less: Goodwill and intangible
assets |
|
(3,717 |
) |
|
|
(3,768 |
) |
|
|
(3,819 |
) |
|
|
(3,870 |
) |
|
|
(3,921 |
) |
| Tangible common equity
(non-GAAP) |
|
213,311 |
|
|
|
207,540 |
|
|
|
204,500 |
|
|
|
200,262 |
|
|
|
198,075 |
|
| |
|
|
|
|
|
|
|
|
|
| Total assets (GAAP) |
|
2,385,994 |
|
|
|
2,349,600 |
|
|
|
2,292,894 |
|
|
|
2,244,893 |
|
|
|
2,232,297 |
|
| Less: Goodwill and intangible
assets |
|
(3,717 |
) |
|
|
(3,768 |
) |
|
|
(3,819 |
) |
|
|
(3,870 |
) |
|
|
(3,921 |
) |
| Tangible assets
(non-GAAP) |
$ |
2,382,277 |
|
|
$ |
2,345,832 |
|
|
$ |
2,289,075 |
|
|
$ |
2,241,023 |
|
|
$ |
2,228,376 |
|
| Tangible common equity to
tangible assets ratio - Bank (non-GAAP) |
|
8.95 |
% |
|
|
8.85 |
% |
|
|
8.93 |
% |
|
|
8.94 |
% |
|
|
8.89 |
% |
| |
|
|
|
|
|
|
|
|
|
| |
Tangible Book Value Reconciliation |
| |
September 30, 2024 |
|
June 30, 2024 |
|
March 31, 2024 |
|
December 31, 2023 |
|
September 30, 2023 |
| Book value per common
share |
$ |
14.91 |
|
|
$ |
14.51 |
|
|
$ |
14.30 |
|
|
$ |
14.13 |
|
|
$ |
13.88 |
|
| Less: Impact of goodwill
/intangible assets |
|
0.33 |
|
|
|
0.34 |
|
|
|
0.34 |
|
|
|
0.35 |
|
|
|
0.35 |
|
| Tangible book value per common
share |
$ |
14.58 |
|
|
$ |
14.17 |
|
|
$ |
13.96 |
|
|
$ |
13.78 |
|
|
$ |
13.53 |
|
| |
Contact: Christopher J. Annas 484.568.5001
CAnnas@meridianbanker.com
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