8-K - MRBK - Equibles

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

July 29, 2020

Date of Report (Date of earliest event reported)

(Exact name of registrant as specified in its charter)

Pennsylvania	000-55983	83-1561918
(State or other jurisdiction<br><br>of incorporation)	(Commission<br><br>File Number)	(IRS Employer<br><br>Ident. No.)

9 Old Lincoln Highway, Malvern, Pennsylvania	19355
(Address of principal executive offices)	(Zip Code)

(484) 568-5000<br><br>Registrant’s telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

◻ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

◻ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

◻ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

◻ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ⌧

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ◻

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:	****	Trading Symbol(s)	****	Name of each exchange on which registered:
Common Stock, $1 par value		MRBK		The NASDAQ Stock Market

Item 7.01		Regulation FD Disclosure.

On July 29, 2020, Meridian Corporation (the “Company”) made available the presentation materials attached as Exhibit 99.1 to this Current Report on Form 8-K to be used in connection with presentations to investors and others. The presentation materials attached hereto as Exhibit 99.1 are incorporated into this Item 7.01 by reference.

The information furnished under Item 7.01 and Item 9.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor will such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing. The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed an admission as to the materiality of any information in this Item 7.01 that is required to be disclosed solely to satisfy the requirements of Regulation FD.


Item 9.01		Financial Statements and Exhibits.

(d) Exhibits.


Exhibit<br><br>No.		Description
99.1		Slide Presentation

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	MERIDIAN CORPORATION
Dated: July 29, 2020
	By:	/s/ Denise Lindsay
			Denise Lindsay
			Executive Vice President and Chief Financial Officer

Exhibit 99.1

2nd QTR Investor Presentation<br>July 29, 2020 NASDAQ: MRBK<br>®
2 Meridian<br>Corporation<br>Forward-Looking Statements<br>Meridian Corporation (the “Corporation”) may from time to time make written or oral “forward-looking statements” within the<br>meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking<br>statements include statements with respect to Meridian Corporation’s strategies, goals, beliefs, expectations, estimates,<br>intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements<br>preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,”<br>“believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking<br>statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various<br>important factors (some of which, in whole or in part, are beyond Meridian Corporation’s control). Numerous competitive,<br>economic, regulatory, legal and technological factors, risks and uncertainties including, without limitation: the impact of the<br>current COVID-19 pandemic and government responses thereto, on the U.S. economy, including the markets in which we<br>operate; actions that we and our customers take in response to these factors and the effects such actions have on our operations,<br>products, services and customer relationships; and the risk that the Small Business Administration may not fund some or all<br>Paycheck Protection Program (PPP) loan guaranties, among others, could cause Meridian Corporation’s financial performance to<br>differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements.<br>Meridian Corporation cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-<br>looking statement takes into account the impact of any future events. All forward-looking statements and information set forth<br>herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are<br>made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to<br>review Meridian Corporation’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-<br>K for the year ended December 31, 2019 and subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K<br>that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any.<br>Meridian Corporation does not undertake to update any forward-looking statement whether written or oral, that may be made<br>from time to time by Meridian Corporation or by or on behalf of Meridian Bank.
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3 Meridian<br>Corporation<br>Company Highlights<br>Demonstrated organic growth engine in diversified loan segments, capitalizing on<br>sales culture and big bank missteps in the Delaware Valley tri-state market.<br>Financial services business model with significant non-interest income streams in<br>Meridian Mortgage, SBA Lending and Meridian Wealth Partners.<br>Customer base principally interacts online, allowing a "branch-lite" banking strategy<br>that provides substantial operational leverage.<br>Skilled, long-tenured management team with extensive in-market experience.<br>Excellent asset quality with diversified loan portfolio.<br>Low commercial real estate (CRE) concentration; focus on smaller, shorter-tenor<br>projects to be more nimble.<br>Originated $260 million in PPP loans.<br>COVID deferrals approximately 15% of loan portfolio.
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4 Meridian<br>Corporation<br>Company Snapshot<br>1) As of and for the quarter ended June 30, 2020, per July 27, 2020 press release.<br>2) Includes loans held for sale and held for investment.<br>3) Excludes loans at fair value, loans held for sale and PPP loans. A Non-GAAP measure. Refer to Appendix for Non-GAAP to GAAP reconciliation.<br>4) Excludes PPP loans and PPPLF borrowings. A Non-GAAP measure. Refer to Appendix for Non-GAAP to GAAP reconciliation.<br>Overview Financial Highlights 2QTR 2020¹<br>Balance Sheet ($ in Millions)<br>Asset Quality (%)<br>MRQ Profitability (%)<br>Assets $1,579<br>Loans & Leases2 $1,381<br>Deposits $1,167<br>Equity $126<br>NPA’s/Assets 0.47%<br>Nonaccrual Loans/Loans 0.54%<br>Reserves/Loans3 1.27%<br>NCOs (recoveries)/Loans 0.00%<br>ROAA 1.56%<br>ROAE 19.16%<br>Net Interest Margin 3.27% / 3.41%4<br>Tangible Equity 7.68%<br>State-chartered commercial bank established in<br>July 2004 and headquartered in suburban Main<br>Line Philadelphia.<br>Serves Pennsylvania, New Jersey, Delaware and<br>Maryland with more than 20 offices and a full suite<br>of financial products and services.<br>Meridian specializes in business and industrial<br>lending, retail and commercial real estate lending,<br>electronic payments, along with a broad menu of<br>high-yield depository products supported by robust<br>online and mobile access.<br>Noninterest income businesses in Meridian<br>Mortgage , SBA Lending and Meridian Wealth<br>Partners.<br>Successful Meridian Mortgage division recently<br>expanded into Maryland.<br>®<br>®
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5 Meridian<br>Corporation<br>Current Meridian Franchise Footprint<br>Geographic Footprint<br>Meridian Corporation<br>Holding Company<br>Meridian Bank<br>100% Owned Subsidiary<br>Organizational Structure<br>Meridian Wealth<br>Partners<br>100% Owned Subsidiary<br>Apex Realty<br>100% Owned Subsidiary<br>Meridian Land<br>Settlement<br>Services<br>100% Owned Subsidiary<br>Meridian<br>Equipment<br>Finance<br>100% Owned Subsidiary
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6 Meridian<br>Corporation<br>Deep and Experienced Leadership<br>Meridian<br>Bank<br>Executive<br>Management<br>Chris Annas<br>Chairman of the Board<br>President & CEO<br>Founder, Chairman, President and Chief Executive Officer of the Bank since its opening in 2004<br>Held executive positions with various regional banks in the Delaware Valley since 1986<br>Over 35 years of banking experience in various commercial lending capacities<br>Denise Lindsay<br>EVP & CFO, Director<br>Manages all corporate accounting functions and is responsible for asset-liability management, financial<br>reporting, tax planning and reporting, budgeting and investor relations<br>Over 25 years experience in bank financial management, Certified Public Accountant, former Senior<br>Accountant for KPMG, LLP and member of the Financial Managers Society and PICPA<br>Joseph Cafarchio<br>EVP & CCO<br>Heads credit underwriting and administration<br>Over 35 years of experience in commercial lending in the region, including five years at the Federal Reserve<br>Bank of Philadelphia<br>Previously Chief Lending Officer from the Bank's inception until January 2017 when the Bank split the role of<br>Chief Lending Officer and Chief Credit Officer<br>Charles D. Kochka<br>EVP & CLO<br>Has served as leader of commercial and consumer lending at the Bank since 2017<br>Has more than 38 years experience in commercial lending in the Delaware Valley<br>Randy J. McGarry<br>SVP & CIO<br>Responsible for executing technology and operational solutions aligned with corporate strategy<br>Over 25 years of banking experience with expertise in IT strategy, technology architecture, network<br>infrastructure, core system conversions and merger & acquisitions<br>Member of the Greater Philadelphia Senior Executive Group and the Society for Information Management<br>Clarence Martindell<br>EVP & CRE Lending<br>In charge of growing and maintaining a strong commercial real estate loan portfolio, along with growing the<br>Bank’s title business and handling the disposition of all REO<br>Over 25 years of real estate lending experience.<br>Prior to joining the Bank, was the Director of Finance for Westrum Development Co., a regional homebuilder<br>T. Benjamin Marsho<br>EVP & Risk & Treasury<br>Oversees risk management, treasury, compliance and BSA / AML<br>Over 25 years of banking experience, including 5 years at the Office of Comptroller of the Currency, nearly<br>10 years as Controller at a publicly traded community bank and 5 years in investment and treasury<br>management of a $50 billion multinational bank
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7 Meridian<br>Corporation<br>Overview of Business Lines<br>Commercial & Industrial Lending<br>– Lines of credit, term loans<br>– Owner-occupied commercial<br>mortgages<br>– Leasing through Meridian<br>Equipment Finance®<br>Commercial Real Estate Lending<br>– Owner occupied commercial<br>mortgages<br>– Construction loans<br>– Land development loans<br>Consumer Lending<br>– Home equity loans / lines of<br>credit<br>Deposit & cash management<br>services<br>SBA Lending<br>– Highly experienced team in<br>Delaware Valley<br>– Top 4 originator in Eastern PA<br>district<br>Core Banking Meridian Mortgage Wealth Management and<br>Advisory Services<br>Mortgage originations were<br>$790 million for 2Q 2020 and<br>$603 million for YR 2019<br>Meridian Mortgage clients<br>include homeowners and small<br>scale investors<br>Approximately 85% of<br>mortgage loans are originated<br>in the PA, NJ, DE, VA, MD and<br>DC markets<br>– Majority of these loans<br>were for 1-4 family<br>housing<br>– nearly all loans originated<br>were sold<br>$715 Million AUM as of June 30,<br>2020<br>Meridian Wealth Partners, LLC<br>is a registered investment<br>advisor and wholly-owned<br>subsidiary of the Bank<br>Provides a comprehensive array<br>of wealth management services<br>and trusted guidance<br>Clients include:<br>– Professionals<br>– High net worth individuals<br>– Company benefit plans<br>Synergies between the core<br>bank and wealth businesses are<br>building
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8 Meridian<br>Corporation<br>Consistent Balance Sheet Growth<br>1) Includes loans held for sale and held for investment.<br>Total Assets ($M) Loans and Leases1 ($M)<br>Total Deposits ($M) Consolidated Equity ($M)<br>$663.3 $733.7<br>$856.0<br>$997.5<br>$1,150.0<br>$1,303.4<br>$1,579.1<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>$584.4 $643.9 $729.7<br>$875.8<br>$998.4<br>$1,129.1<br>$1,380.7<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>$490.6 $527.1<br>$627.1<br>$752.1<br>$851.2<br>$993.8<br>$1,166.7<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>$52.9<br>$70.0<br>$101.4<br>$109.6<br>$120.7 $118.0 $125.5<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020
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9 Meridian<br>Corporation<br>Summary Income Statement1<br>1) Decrease in 2017 profitability due to a decrease in net operating profit from mortgage division ($1.8M); 2017 tax reform resulted in a one-time charge to tax<br>expense of $737K.<br>Net Interest Income ($M) Non-interest Income ($M)<br>Non-interest Expense ($M) Net Income ($M)<br>$23.4<br>$25.8<br>$28.9<br>$32.7<br>$36.3<br>$9.7 $11.6<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>$36.1<br>$42.8<br>$36.7<br>$32.4 $33.1<br>$10.4<br>$20.7<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>$48.6<br>$59.9 $57.7<br>$52.9 $55.0<br>$15.2<br>$23.2<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>$6.2<br>$4.9<br>$3.0<br>$8.2<br>$10.5<br>$2.5<br>$5.7<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020
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10 Meridian<br>Corporation<br>Capital Summary<br>Bank Holding Company<br>Tangible Common Equity / Tangible Common Assets (%)1 Tier 1 Leverage Ratio (%)<br>Tier 1 Capital Ratio (%) Total Capital Ratio (%)<br>7.98%<br>9.54%<br>11.27% 10.53%<br>13.52%<br>11.77%<br>10.15%<br>7.98%<br>9.54%<br>11.27% 10.53% 10.12%<br>8.73%<br>7.68%<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>8.39%<br>9.67%<br>12.37%<br>11.16%<br>14.08%<br>13.22%<br>10.71%<br>8.39%<br>9.67%<br>12.37%<br>11.16%<br>10.55%<br>9.80%<br>8.06%<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>9.29%<br>10.62%<br>12.86%<br>11.76%<br>14.98%<br>13.66% 13.60%<br>9.29%<br>10.62%<br>12.86%<br>11.72% 11.21%<br>10.12% 10.24%<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>12.58%<br>13.51%<br>15.53%<br>13.66%<br>16.09%<br>14.84% 14.91%<br>12.58%<br>13.51%<br>15.53%<br>13.66%<br>16.10% 14.80% 14.91%<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>1) A Non-GAAP measure. Refer to Appendix for Non-GAAP to GAAP reconciliation.
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11 Meridian<br>Corporation<br>Asset Quality<br>1) Nonperforming assets defined as loans 90+ days past due and still accruing, nonaccrual loans and leases and OREO, excluding performing TDRs.<br>2) Excludes loans at fair value, loans held for sale and for 2Q 2020, PPP loans. A Non-GAAP measure. See Appendix for Non-GAAP to GAAP reconciliation.<br>NPAs¹ / Assets (%) Reserves / Loans2 (%)<br>Nonaccrual Loans / Loans (%) Net Chargeoffs / Average Loans (%)<br>0.63%<br>0.73%<br>0.42% 0.39%<br>0.30%<br>0.51%<br>0.47%<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>0.21%<br>0.17%<br>0.13%<br>0.03%<br>(0.06%)<br>0.00% 0.00%<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>0.68%<br>0.83%<br>0.43%<br>0.45%<br>0.34%<br>0.58%<br>0.54%<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020<br>1.06%<br>0.90% 0.96% 0.97%<br>1.00%<br>1.10%<br>1.27%<br>2015 2016 2017 2018 2019 1Q 2020 2Q 2020
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12 Meridian<br>Corporation<br>$1.4 Billion total gross loans and leases<br>as of June 30, 20201<br>– $253.4 M net PPP loans<br>CRE concentration of 183% as of June<br>30, 2020<br>Average yield on loans of 4.48% for 2Q<br>2020<br>Average yield on loans, excluding PPP<br>loans, of 4.81% for 2Q 2020<br>Balanced Loan Portfolio<br>June 30, 2020<br>1) Total loans held for investment and held for sale, net of fees and costs.<br>Source: Company documents<br>Total Loans: $1.4 Billion<br>5%<br>13%<br>31%<br>10%<br>23%<br>18%<br>HELOC/Consumer Residential CRE C&D C&I PPP
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Commercial Loans by Industry<br>June 30, 2020<br>Meridian<br>Corporation Note: Balances do not include consumer loans; HELoC, and 1st mortgages.<br>Source: Company documents<br>13
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14 Meridian<br>Corporation<br>COVID-19 Response<br>Source: Company documents<br>Commercial:<br>– Original payment holiday up to 3 billing cycles<br>– 9 loan relationships ($50.7M) additional 3 months<br>Construction:<br>– PA moratorium on construction is now over<br>– Previously lowered rates now returned to original rate<br>– Two or Three billing cycles<br>Residential: Payment holiday up to 6 months<br>SBA (7A): 6 mos. of payments by Small Bus. Administration<br>Loan Assistance Programs Update<br>Significantly Impacted Industries<br>ALLL Coverage by Portfolio<br>Loans with Relief
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15 Meridian<br>Corporation<br>Shared National Credits<br>Source: Company documents
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16 Meridian<br>Corporation<br>$1.2B total deposits as of June 30, 2020<br>Diversified deposit mix<br>– 37% transaction accounts<br>– 19% noninterest-bearing deposits /<br>deposits<br>– Average cost of total deposits of<br>0.90% for 2Q 2020<br>Deposit Composition<br>June 30, 2020<br>Source: Company documents<br>Total Deposits: $1.2 Billion<br>18%<br>18%<br>36%<br>25%<br>3%<br>Non-interest checking Interest checking MMDA/savings<br>Certificates Jumbo certificates
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17 Meridian<br>Corporation<br>Time Deposit Repricing Opportunities<br>Source: Company documents<br>$271M time deposits<br>maturing over next 3<br>quarters<br>Blended cost of CDs<br>maturing over 9<br>months is 1.48%<br>Potential to shed<br>approx. 30bps on<br>time deposit costs<br>each quarter<br>Potential to expand<br>margin 7bps quarter<br>over quarter $0.00<br>$20,000,000.00<br>$40,000,000.00<br>$60,000,000.00<br>$80,000,000.00<br>$100,000,000.00<br>$120,000,000.00<br>1 - 3<br>Months<br>3 - 6<br>Months<br>6 - 9<br>Months<br>9 - 12<br>Months<br>12 - 18<br>Months<br>18 - 24<br>Months<br>> 2yrs > 3yrs<br>1.42%<br>1.53%<br>1.49%<br>1.05%<br>2.48% 0.96% 1.13%<br>2.50%
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18 Meridian<br>Corporation<br>Investment Portfolio Composition<br>Source: Company documents<br>$104.7 million total investments as of<br>June 30, 2020<br>– 93.7% available-for-sale<br>– 6.3% held-to-maturity<br>Average TEY of 2.69% year-to-date<br>Unrealized gain $2.8 million at June<br>30, 2020<br>Conservative investment portfolio<br>– 100% investment grade<br>Total Securities: $104.7 Million<br>19%<br>27%<br>41%<br>11% 2%<br>US asset backed securities<br>US government agency<br>State & municipal securities - tax free<br>State & municipal securities - taxable<br>Other securities
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19 Meridian<br>Corporation<br>Appendix
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20 Meridian<br>Corporation<br>Historical Financial Highlights
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21 Meridian<br>Corporation<br>Reconciliation of Non-GAAP Financial Measures<br>Tangible common equity to tangible assets<br>Management uses the measure tangible common equity to tangible assets to assess our capital strength. We believe that this non-GAAP financial measure is useful to<br>investors because, by removing the impact of our preferred stock, goodwill and other intangible assets, it allows investors to more easily assess our capital adequacy.<br>This non-GAAP financial measure should not be considered a substitute for any regulatory capital ratios and may not be comparable to other similarly titled measures<br>used by other companies. The table below provides the non-GAAP reconciliation for our tangible common equity to tangible assets:
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22 Meridian<br>Corporation<br>Reconciliation of Non-GAAP Financial Measures
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