MRBK 8-K
Meridian Corp (MRBK)
8-K
2025-01-24
For: 2025-01-24
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Added on
April 10, 2026
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
Date of Report (Date of earliest event reported)
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Ident. No.) | ||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
(484) 568-5000 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:
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: | ||||||||||||
Item 2.02. Results of Operations and Financial Condition.
On January 24, 2025 Meridian Corporation issued a press release discussing the Corporation’s Fourth Quarter 2024 Results. A copy is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto and incorporated by reference into Item 2.02 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section. Furthermore, such information, including the exhibit attached hereto, shall not be deemed incorporated by reference into any of the Corporation’s reports or filings with the SEC under the Securities Exchange Act of 1933, as amended (the "Securities Act"), or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing. The information in this Current Report on Form 8-K, including the exhibit attached hereto, shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.
Item 7.01. Regulation FD Disclosures.
In connection with the issuance of its earnings for the three months ended December 31, 2024, Meridian Corporation has also made available on its website materials that contain supplemental information about the Corporation's financial results (“Earnings Supplement”). A copy of the earnings supplement is attached hereto as Exhibit 99.2 and is incorporated by reference in this Item 7.01. The information contained in this Item 7.01 of this Report on Form 8-K, including Exhibit 99.2, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Exchange Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
Item 8.01. Other Events.
Quarterly Dividend
On January 23, 2025, Meridian Corporation’s Board of Directors declared a quarterly cash dividend of $0.125 per common share, payable February 18, 2025, to shareholders of record as of February 10, 2025.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits. The following exhibit is furnished herewith:
99.1 Press Release, issued January 24, 2025
99.2 Earnings Supplement, issued January 24, 2025
EXHIBIT INDEX
| Exhibit No. | Description of Exhibit | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |||||||
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 (Registrant) | ||||||||||||||
Dated: January 24, 2025 | ||||||||||||||
| By: | /s/ Denise Lindsay | |||||||||||||
| Denise Lindsay | ||||||||||||||
| Executive Vice President and Chief Financial Officer | ||||||||||||||
Exhibit 99.1
Meridian Corporation Reports Fourth Quarter 2024 Results and Announces a Quarterly Dividend of $0.125 per Common Share.
MALVERN, PA., January 24, 2025 — Meridian Corporation (Nasdaq: MRBK) today reported:
| Three Months Ended | Year Ended | ||||||||||||||||||||||
| (Dollars in thousands, except per share data)((Unaudited) | December 31, 2024 | September 30, 2024 | December 31, 2024 | December 31, 2023 | |||||||||||||||||||
Income: | |||||||||||||||||||||||
Net income | $ | 5,601 | $ | 4,743 | $ | 16,346 | $ | 13,243 | |||||||||||||||
| Diluted earnings per common share | $ | 0.49 | $ | 0.42 | $ | 1.45 | $ | 1.16 | |||||||||||||||
Pre-tax, pre-provision income (1) | $ | 11,168 | $ | 8,527 | $ | 33,186 | $ | 23,782 | |||||||||||||||
(1) See Non-GAAP reconciliation in the Appendix | |||||||||||||||||||||||
•Net income for the quarter ended December 31, 2024 was $5.6 million, or $0.49 per diluted share and $16.3 million, or $1.45 per diluted share, for the year.
•Pre-tax, pre-provision income1 for the quarter and the year were $11.2 million and $33.2 million, respectively.
•Net interest margin was 3.29% for the fourth quarter of 2024, with a loan yield of 7.17%. Net interest margin was 3.16% with a loan yield of 7.28% for the year.
•Return on average assets and return on average equity for the fourth quarter of 2024 were 0.92% and 13.01%, respectively, and 0.70% and 9.93% for the year.
•During the quarter a net gain of $4.0 million was recognized on the sale of $6.6 million in residential mortgage loan servicing rights held at amortized cost and, a $317 thousand gain was recognized on the sale of a $1.7 million OREO property.
•Fees and other disposal costs of $1.0 million, net, were recognized during the quarter for the early termination of the Blue Bell lease.
•Total assets at December 31, 2024 were $2.4 billion, compared to $2.4 billion at September 30, 2024 and $2.2 billion at December 31, 2023.
•Commercial loans, excluding leases, increased $34.8 million, or 2% for the quarter and $177.1 million, or 12% year over year.
•Fourth quarter deposit growth was $26.4 million, or 1%, and $181.9 million, or 10% year over year.
•Non-interest-bearing deposits were up $3.7 million or 2%, quarter over quarter, and $1.6 million or 1%, year over year.
•On January 23, 2025, the Board of Directors declared a quarterly cash dividend of $0.125 per common share, payable February 18, 2025 to shareholders of record as of February 10, 2025.
Christopher J. Annas, Chairman and CEO commented:
Our fourth quarter earnings showed significant improvement from the third quarter, increasing by 18.1% to $5.6 million, or $0.49 per share. For the year, net income increased 23.4% to $16.3 million, and $1.45 per share. While we are pleased with the improvement, we are still working through the drastic rate shock brought on by the Fed, particularly in our net interest margin which is down 50 basis points from 2019 levels. The team is working diligently each day to return to historical spreads.
Loan growth of 12% (minus planned lease paydowns) for 2024 was exceptional, and our three main lending groups all contributed. Commercial real estate is benefiting from a continued lack of homes for sale, and our C&I and SBA teams are winning client relationships with persistence and creative advisory. Legacy low fixed-rate loans often made it unprofitable for us to solicit business from prospects. Deposits were up nearly 10%, mostly from money market accounts that can be rate-adjusted anytime.
The mortgage group had significant improvement, with a $4.1 million pre-tax income versus a large loss in 2023. The hard cuts we made in the cyclical slowdown have given us much operational leverage and allows us to pivot quickly based on market conditions. Part of the cuts included prepaying a major lease at a discount and allowing many operations personnel to work from home. The Philadelphia metro region is still very low in housing inventory, which stymied an even bigger improvement in our business.
1
Exhibit 99.1
Our wealth segment had a banner year with pre-tax income nearly doubling to $2.4 million. Strong growth in assets under management along with better stock market returns were the big contributors. We will devote more resources to wealth in 2025 to leverage our brand and deepen relationships with our commercial customers for referrals.
We are encouraged by the new administration and communications about reduced regulatory burdens and prospects for economic growth. Our regulatory costs are substantial and, quite frankly, make little sense for a bank our size that is not systemically significant. We are hopeful that new and broader thinking can help banks like Meridian to better serve their markets and produce better returns for shareholders.
Select Condensed Financial Information
As of or for the three months ended (Unaudited) | |||||||||||||||||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||||||||||||
| Income: | |||||||||||||||||||||||||||||
Net income | $ | 5,601 | $ | 4,743 | $ | 3,326 | $ | 2,676 | $ | 571 | |||||||||||||||||||
| Basic earnings per common share | 0.50 | 0.43 | 0.30 | 0.24 | 0.05 | ||||||||||||||||||||||||
| Diluted earnings per common share | 0.49 | 0.42 | 0.30 | 0.24 | 0.05 | ||||||||||||||||||||||||
Net interest income | 19,299 | 18,242 | 16,846 | 16,609 | 16,942 | ||||||||||||||||||||||||
| Balance Sheet: | |||||||||||||||||||||||||||||
| Total assets | $ | 2,385,867 | $ | 2,387,721 | $ | 2,351,584 | $ | 2,292,923 | $ | 2,246,193 | |||||||||||||||||||
Loans, net of fees and costs | 2,030,437 | 2,008,396 | 1,988,535 | 1,956,315 | 1,895,806 | ||||||||||||||||||||||||
| Total deposits | 2,005,368 | 1,978,927 | 1,915,436 | 1,900,696 | 1,823,462 | ||||||||||||||||||||||||
| Non-interest bearing deposits | 240,858 | 237,207 | 224,040 | 220,581 | 239,289 | ||||||||||||||||||||||||
Stockholders' equity | 171,522 | 167,450 | 162,382 | 159,936 | 158,022 | ||||||||||||||||||||||||
Balance Sheet Average Balances: | |||||||||||||||||||||||||||||
| Total assets | $ | 2,434,270 | $ | 2,373,261 | $ | 2,319,295 | $ | 2,269,047 | $ | 2,219,340 | |||||||||||||||||||
| Total interest earning assets | 2,342,651 | 2,277,523 | 2,222,177 | 2,173,212 | 2,121,068 | ||||||||||||||||||||||||
Loans, net of fees and costs | 2,029,739 | 1,997,574 | 1,972,740 | 1,944,187 | 1,891,170 | ||||||||||||||||||||||||
| Total deposits | 2,043,505 | 1,960,145 | 1,919,954 | 1,823,523 | 1,820,532 | ||||||||||||||||||||||||
| Non-interest bearing deposits | 259,118 | 246,310 | 229,040 | 233,255 | 254,025 | ||||||||||||||||||||||||
Stockholders' equity | 171,214 | 165,309 | 162,119 | 159,822 | 157,210 | ||||||||||||||||||||||||
| Performance Ratios (Annualized): | |||||||||||||||||||||||||||||
Return on average assets | 0.92 | % | 0.80 | % | 0.58 | % | 0.47 | % | 0.10 | % | |||||||||||||||||||
Return on average equity | 13.01 | % | 11.41 | % | 8.25 | % | 6.73 | % | 1.44 | % | |||||||||||||||||||
Income Statement - Fourth Quarter 2024 Compared to Third Quarter 2024
Fourth quarter net income increased $858 thousand, or 18.1%, to $5.6 million due to increased net interest income, combined with increased non-interest income which included a gain of $4.0 million on the sale of mortgage servicing rights, along with a $317 thousand gain on sale of a residential property included in other real estate owned. These increases were largely offset by a quarterly provision for credit losses that was higher by $1.3 million and an increase in non-interest expense of $865 thousand, or 4.2%, which was impacted by the early termination of the Blue Bell lease. Detailed explanations of the major categories of income and expense follow below.
2
Exhibit 99.1
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.
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| (dollars in thousands) | December 31, 2024 | September 30, 2024 | $ Change | % Change | Change due to rate | Change due to volume | |||||||||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 801 | $ | 416 | $ | 385 | 92.5 | % | $ | (52) | $ | 437 | |||||||||||||||||||||||
| Investment securities - taxable | 1,684 | 1,480 | 204 | 13.8 | % | 124 | 80 | ||||||||||||||||||||||||||||
Investment securities - tax exempt (1) | 397 | 397 | — | — | % | 5 | (5) | ||||||||||||||||||||||||||||
| Loans held for sale | 565 | 766 | (201) | (26.2) | % | (49) | (152) | ||||||||||||||||||||||||||||
Loans held for investment (1) | 36,666 | 37,339 | (673) | (1.8) | % | (1,268) | 595 | ||||||||||||||||||||||||||||
| Total loans | 37,231 | 38,105 | (874) | (2.3) | % | (1,317) | 443 | ||||||||||||||||||||||||||||
| Total interest income | $ | 40,113 | $ | 40,398 | $ | (285) | (0.7) | % | $ | (1,240) | $ | 955 | |||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||||||||
| Interest-bearing demand deposits | $ | 1,244 | $ | 1,390 | $ | (146) | (10.5) | % | $ | (234) | $ | 88 | |||||||||||||||||||||||
| Money market and savings deposits | 8,266 | 8,391 | (125) | (1.5) | % | (934) | 809 | ||||||||||||||||||||||||||||
| Time deposits | 8,831 | 9,532 | (701) | (7.4) | % | (465) | (236) | ||||||||||||||||||||||||||||
| Total interest - bearing deposits | 18,341 | 19,313 | (972) | (5.0) | % | (1,633) | 661 | ||||||||||||||||||||||||||||
| Borrowings | 1,608 | 1,985 | (377) | (19.0) | % | (10) | (367) | ||||||||||||||||||||||||||||
| Subordinated debentures | 780 | 779 | 1 | 0.1 | % | — | 1 | ||||||||||||||||||||||||||||
| Total interest expense | 20,729 | 22,077 | (1,348) | (6.1) | % | (1,643) | 295 | ||||||||||||||||||||||||||||
| Net interest income differential | $ | 19,384 | $ | 18,321 | $ | 1,063 | 5.80 | % | $ | 403 | $ | 660 | |||||||||||||||||||||||
| (1) Reflected on a tax-equivalent basis. | |||||||||||||||||||||||||||||||||||
Interest income decreased $285 thousand quarter-over-quarter on a tax equivalent basis, driven by rate changes, particularly in the loan portfolio. The overall yield on earnings assets decreased 25 basis points during the period, impacting interest income by $1.2 million. This decrease was significantly offset by favorable volume changes as the level of average earning assets increased by $65.1 million contributing $955 thousand to lessen the interest income decrease.
Average total loans, excluding residential loans for sale, increased $32.5 million resulting in an increase due to volume in interest income of $595 thousand. The largest drivers of this increase were commercial, commercial real estate, and small business loans which on a combined basis increased $40.4 million on average, partially offset by a decrease in average leases of $11.4 million. Home equity, residential real estate, consumer and other loans held in portfolio increased on a combined basis $3.2 million on average. The yield on total loans decreased 24 basis points, and the yield on cash and investments increased 6 basis points on a combined basis.
Total interest expense decreased $1.3 million, quarter-over-quarter, due to a lower volume of time deposits and borrowings, combined with a decrease in the cost of all deposit types, despite a higher level of interest-bearing and money market deposits. Interest expense on total deposits decreased $972 thousand and interest expense on borrowings decreased $377 thousand. During the period, interest-bearing deposits and money market accounts increased $8.8 million and $81.4 million on average, respectively, while time deposits decreased $19.7 million on average. Borrowings decreased $29.7 million on average. Overall increase in interest expense on deposits due to volume changes was $661 thousand.
The cost of interest-bearing deposits decreased 35 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 $1.6 million. Overall the net interest margin increased 9 basis points to 3.29% as the cost of funds decline outpaced the decline in yield on earning assets, and non-interest bearing balances increased $14.2 million on average.
Provision for Credit Losses
The overall provision for credit losses for the fourth quarter increased $1.3 million to $3.6 million, from $2.3 million in the third quarter. The provision for funded loans increased $1.6 million and the provision on unfunded loan commitments decreased $331 thousand during the current quarter. The fourth quarter provision for funded loans of $3.6 million increased from the prior quarter due largely to an increase of $5.0 million in net charge-offs and was positively impacted by favorable changes in certain portfolio baseline loss rates.
3
Exhibit 99.1
Non-interest income
The following table presents the components of non-interest income for the periods indicated:
| Three Months Ended | |||||||||||||||||||||||
| (Dollars in thousands) | December 31, 2024 | September 30, 2024 | $ Change | % Change | |||||||||||||||||||
| Mortgage banking income | $ | 5,516 | $ | 6,474 | $ | (958) | (14.8) | % | |||||||||||||||
| Wealth management income | 1,527 | 1,447 | 80 | 5.5 | % | ||||||||||||||||||
| SBA loan income | 1,143 | 544 | 599 | 110.1 | % | ||||||||||||||||||
| Earnings on investment in life insurance | 224 | 222 | 2 | 0.9 | % | ||||||||||||||||||
| Gain on sale of MSRs | 3,992 | — | 3,992 | 100.0 | % | ||||||||||||||||||
| Net change in the fair value of derivative instruments | (146) | (102) | (44) | 43.1 | % | ||||||||||||||||||
| Net change in the fair value of loans held-for-sale | (163) | 169 | (332) | (196.4) | % | ||||||||||||||||||
| Net change in the fair value of loans held-for-investment | (552) | 965 | (1,517) | (157.2) | % | ||||||||||||||||||
| Net (loss) gain on hedging activity | 192 | (197) | 389 | (197.5) | % | ||||||||||||||||||
| Net loss on sale of investment securities available-for-sale | 2 | (57) | 59 | (103.5) | % | ||||||||||||||||||
| Other | 1,545 | 1,366 | 179 | 13.1 | % | ||||||||||||||||||
| Total non-interest income | $ | 13,280 | $ | 10,831 | $ | 2,449 | 22.6 | % | |||||||||||||||
Total non-interest income increased $2.4 million, or 22.6%, quarter-over-quarter after recognizing a gain of $4.0 million on the sale of $6.6 million in residential mortgage loan servicing rights; change in gains of $389 thousand in hedging activity; and a $317 thousand gain on the sale of a $1.7 million residential OREO property, which is recorded in other non-interest income. In addition, SBA income increased $599 thousand due largely to a higher level of SBA loan sales. SBA loans sold for the quarter-ended December 31, 2024 totaled $19.9 million, up $8.0 million, or 67.4%, compared to the quarter-ended September 30, 2024. The gross margin on SBA sales was 7.5% for the quarter, down from 7.9% for the previous quarter. These gains were partially offset by unfavorable portfolio fair value changes of $1.9 million combined, and lower levels of mortgage banking income, which decreased $1.0 million, or 14.8%. Mortgage loan sales decreased $29.8 million or 12.1% quarter over quarter driving lower gain on sale income at a slightly lower margin.
Non-interest expense
The following table presents the components of non-interest expense for the periods indicated:
| Three Months Ended | |||||||||||||||||||||||
| (Dollars in thousands) | December 31, 2024 | September 30, 2024 | $ Change | % Change | |||||||||||||||||||
| Salaries and employee benefits | $ | 12,429 | $ | 12,829 | $ | (400) | (3.1) | % | |||||||||||||||
| Occupancy and equipment | 2,270 | 1,243 | 1,027 | 82.6 | % | ||||||||||||||||||
| Professional fees | 1,134 | 1,106 | 28 | 2.5 | % | ||||||||||||||||||
| Data processing and software | 1,553 | 1,553 | — | — | % | ||||||||||||||||||
| Advertising and promotion | 839 | 717 | 122 | 17.0 | % | ||||||||||||||||||
| Pennsylvania bank shares tax | 243 | 181 | 62 | 34.3 | % | ||||||||||||||||||
| Other | 2,943 | 2,917 | 26 | 0.9 | % | ||||||||||||||||||
| Total non-interest expense | $ | 21,411 | $ | 20,546 | $ | 865 | 4.2 | % | |||||||||||||||
Occupancy and equipment expense increased $1.0 million, net, due to fees, credits and other disposal costs for the early termination of the Blue Bell lease. The lease termination is expected to improve occupancy expense by $359 thousand per year. Advertising and promotion, which includes business development with other expenses, were up $148 thousand due to seasonal events. These increases were partially offset by a decrease in salaries and benefits of $400 thousand. Bank and wealth segments combined increased $5 thousand, while the mortgage segment decreased $405 thousand. Mortgage segment salaries, commissions, and employee benefits expense are impacted by volume and decreased commensurate with the lower levels of originations, which were down $36.1 million over the prior quarter.
4
Exhibit 99.1
Balance Sheet - December 31, 2024 Compared to September 30, 2024
Total assets decreased $1.9 million, or 0.1%, to $2.4 billion as of December 31, 2024 from $2.4 billion at September 30, 2024. Despite continued strong loan growth during the quarter, total assets decreased due to the decline in mortgage loans held for sale and the sale of mortgage servicing rights. Interest-bearing cash increased $2.1 million, or 10.4%, to $21.9 million as of December 31, 2024, from September 30, 2024.
Portfolio loan growth was $22.8 million, or 1.1% quarter-over-quarter. The portfolio growth was generated from commercial mortgage loans which increased $23.0 million, or 2.9%, construction loans which increased $9.0 million, or 3.6%, commercial & industrial loans which increased $3.5 million, or 1.0%. Lease financings decreased $10.7 million, or 12.4% from September 30, 2024, partially offsetting the above noted loan growth, but this decline was expected as we continue to refocus away from lease originations.
Total deposits increased $26.4 million, or 1.3% quarter-over-quarter, due largely to higher levels of money market accounts and interest bearing demand deposits to a lesser degree. Money market accounts and savings accounts increased a combined $90.7 million, while interest bearing demand deposits increased $8.0 million. Time deposits decreased $75.9 million from largely wholesale efforts. Non-interest bearing deposits increased $3.7 million. Overall borrowings decreased $20.4 million, or 14.1% quarter-over-quarter.
Total stockholders’ equity increased by $4.1 million from September 30, 2024, to $171.5 million as of December 31, 2024. Changes to equity for the current quarter included net income of $5.6 million, less dividends paid of $1.4 million, offset by a decrease of $876 thousand in other comprehensive income. The Community Bank Leverage Ratio for the Bank was 9.21% at December 31, 2024.
Asset Quality Summary
Non-performing loans decreased $18 thousand to $45.1 million at December 31, 2024 compared to $45.1 million at September 30, 2024. As a result of the decrease, the ratio of non-performing loans to total loans decreased 1 bps to 2.19% as of December 31, 2024, from 2.20% as of September 30, 2024. During the quarter a $1.7 million residential property in OREO was sold, reducing non-performing assets by $1.7 million. As a result, the ratio of non-performing assets to total assets decreased 7 bps to 1.90% as of December 31, 2024, compared to 1.97% as of September 30, 2024. The decrease in non-performing loans was primarily due to the partial charge-off of a commercial loan relationship discussed below, largely offset by an increase in non-performing construction loans.
Meridian realized net charge-offs of 0.34% of total average loans for the quarter ended December 31, 2024, up from 0.11% for the quarter ended September 30, 2024. Net charge-offs increased to $7.1 million for the quarter ended December 31, 2024, compared to net charge-offs of $2.3 million for the quarter ended September 30, 2024. Fourth quarter charge-offs consisted of $3.5 million in charge-offs on a protracted commercial advertising loan relationship, $1.3 million of small ticket equipment leases which are charged-off after becoming more than 120 days past due, and $1.7 million in SBA loans. Overall there were recoveries of $315 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 0.91% as of December 31, 2024, a decrease from the coverage ratio of 1.10% as of September 30, 2024 due largely to the level of charge-offs in the quarter discussed above. As of December 31, 2024 there were specific reserves of $2.7 million against individually evaluated loans, a decrease of $4.1 million from $6.8 million in specific reserves as of September 30, 2024. The specific reserve decline over the prior quarter was the result of the commercial loan relationship specific reserve charge-off, combined with specific reserve charge-offs on SBA loans, while new specific reserves were established on additional SBA loans in the current quarter.
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 18 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.
5
Exhibit 99.1
“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.
6
Exhibit 99.1
MERIDIAN CORPORATION AND SUBSIDIARIES
FINANCIAL RATIOS (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
Three Months Ended | |||||||||||||||||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
Earnings and Per Share Data: | |||||||||||||||||||||||||||||
| Net income | $ | 5,601 | $ | 4,743 | $ | 3,326 | $ | 2,676 | $ | 571 | |||||||||||||||||||
| Basic earnings per common share | $ | 0.50 | $ | 0.43 | $ | 0.30 | $ | 0.24 | $ | 0.05 | |||||||||||||||||||
| Diluted earnings per common share | $ | 0.49 | $ | 0.42 | $ | 0.30 | $ | 0.24 | $ | 0.05 | |||||||||||||||||||
| Common shares outstanding | 11,240 | 11,229 | 11,191 | 11,186 | 11,183 | ||||||||||||||||||||||||
Performance Ratios: | |||||||||||||||||||||||||||||
Return on average assets (2) | 0.92 | % | 0.80 | % | 0.58 | % | 0.47 | % | 0.10 | % | |||||||||||||||||||
Return on average equity (2) | 13.01 | 11.41 | 8.25 | 6.73 | 1.44 | ||||||||||||||||||||||||
Net interest margin (tax-equivalent) (2) | 3.29 | 3.20 | 3.06 | 3.09 | 3.18 | ||||||||||||||||||||||||
Yield on earning assets (tax-equivalent) (2) | 6.81 | 7.06 | 6.98 | 6.90 | 6.81 | ||||||||||||||||||||||||
Cost of funds (2) | 3.71 | 4.05 | 4.10 | 4.00 | 3.81 | ||||||||||||||||||||||||
Efficiency ratio | 65.72 | % | 70.67 | % | 72.89 | % | 73.90 | % | 78.63 | % | |||||||||||||||||||
Asset Quality Ratios: | |||||||||||||||||||||||||||||
| Net charge-offs (recoveries) to average loans | 0.34 | % | 0.11 | % | 0.20 | % | 0.12 | % | 0.11 | % | |||||||||||||||||||
Non-performing loans to total loans | 2.19 | 2.20 | 1.84 | 1.93 | 1.76 | ||||||||||||||||||||||||
Non-performing assets to total assets | 1.90 | 1.97 | 1.68 | 1.74 | 1.58 | ||||||||||||||||||||||||
Allowance for credit losses to: | |||||||||||||||||||||||||||||
Total loans and other finance receivables | 0.91 | 1.09 | 1.09 | 1.18 | 1.17 | ||||||||||||||||||||||||
Total loans and other finance receivables (excluding loans at fair value) (1) | 0.91 | 1.10 | 1.10 | 1.19 | 1.17 | ||||||||||||||||||||||||
Non-performing loans | 40.86 | % | 48.66 | % | 57.66 | % | 60.59 | % | 65.48 | % | |||||||||||||||||||
Capital Ratios: | |||||||||||||||||||||||||||||
| Book value per common share | $ | 15.26 | $ | 14.91 | $ | 14.51 | $ | 14.30 | $ | 14.13 | |||||||||||||||||||
| Tangible book value per common share | $ | 14.93 | $ | 14.58 | $ | 14.17 | $ | 13.96 | $ | 13.78 | |||||||||||||||||||
| Total equity/Total assets | 7.19 | % | 7.01 | % | 6.91 | % | 6.98 | % | 7.04 | % | |||||||||||||||||||
Tangible common equity/Tangible assets - Corporation (1) | 7.05 | 6.87 | 6.76 | 6.82 | 6.87 | ||||||||||||||||||||||||
Tangible common equity/Tangible assets - Bank (1) | 9.06 | 8.95 | 8.85 | 8.93 | 8.94 | ||||||||||||||||||||||||
| Tier 1 leverage ratio - Bank | 9.21 | 9.32 | 9.33 | 9.42 | 9.46 | ||||||||||||||||||||||||
| Common tier 1 risk-based capital ratio - Bank | 10.33 | 10.17 | 9.84 | 9.87 | 10.10 | ||||||||||||||||||||||||
| Tier 1 risk-based capital ratio - Bank | 10.33 | 10.17 | 9.84 | 9.87 | 10.10 | ||||||||||||||||||||||||
| Total risk-based capital ratio - Bank | 11.20 | % | 11.22 | % | 10.84 | % | 10.95 | % | 11.17 | % | |||||||||||||||||||
| (1) See Non-GAAP reconciliation in the Appendix | |||||||||||||||||||||||||||||
| (2) Annualized | |||||||||||||||||||||||||||||
7
Exhibit 99.1
MERIDIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||
| December 31, 2024 | September 30, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
| Interest income: | |||||||||||||||||||||||||||||
| Loans and other finance receivables, including fees | $ | 37,229 | $ | 38,103 | $ | 34,469 | $ | 147,157 | $ | 130,081 | |||||||||||||||||||
| Securities - taxable | 1,684 | 1,480 | 1,020 | 5,739 | 3,873 | ||||||||||||||||||||||||
| Securities - tax-exempt | 314 | 320 | 331 | 1,283 | 1,369 | ||||||||||||||||||||||||
| Cash and cash equivalents | 801 | 416 | 526 | 1,848 | 1,266 | ||||||||||||||||||||||||
| Total interest income | 40,028 | 40,319 | 36,346 | 156,027 | 136,589 | ||||||||||||||||||||||||
| Interest expense: | |||||||||||||||||||||||||||||
| Deposits | 18,341 | 19,313 | 16,806 | 74,037 | 57,819 | ||||||||||||||||||||||||
| Borrowings and subordinated debentures | 2,388 | 2,764 | 2,598 | 10,994 | 9,828 | ||||||||||||||||||||||||
| Total interest expense | 20,729 | 22,077 | 19,404 | 85,031 | 67,647 | ||||||||||||||||||||||||
| Net interest income | 19,299 | 18,242 | 16,942 | 70,996 | 68,942 | ||||||||||||||||||||||||
| Provision for credit losses | 3,572 | 2,282 | 4,628 | 11,400 | 6,815 | ||||||||||||||||||||||||
| Net interest income after provision for credit losses | 15,727 | 15,960 | 12,314 | 59,596 | 62,127 | ||||||||||||||||||||||||
| Non-interest income: | |||||||||||||||||||||||||||||
| Mortgage banking income | 5,516 | 6,474 | 3,394 | 21,044 | 16,537 | ||||||||||||||||||||||||
| Wealth management income | 1,527 | 1,447 | 1,239 | 5,735 | 4,928 | ||||||||||||||||||||||||
| SBA loan income | 1,143 | 544 | 1,022 | 3,458 | 4,485 | ||||||||||||||||||||||||
| Earnings on investment in life insurance | 224 | 222 | 204 | 868 | 789 | ||||||||||||||||||||||||
| Gain on sale of MSRs | 3,992 | — | — | 3,992 | — | ||||||||||||||||||||||||
| Net change in the fair value of derivative instruments | (146) | (102) | (126) | 30 | 91 | ||||||||||||||||||||||||
| Net change in the fair value of loans held-for-sale | (163) | 169 | 120 | (25) | 32 | ||||||||||||||||||||||||
| Net change in the fair value of loans held-for-investment | (552) | 965 | 805 | 214 | 132 | ||||||||||||||||||||||||
| Net (loss) gain on hedging activity | 192 | (197) | (53) | (87) | 28 | ||||||||||||||||||||||||
| Net loss on sale of investment securities available-for-sale | 2 | (57) | — | (55) | (58) | ||||||||||||||||||||||||
| Other | 1,545 | 1,366 | 1,512 | 6,166 | 5,001 | ||||||||||||||||||||||||
| Total non-interest income | 13,280 | 10,831 | 8,117 | 41,339 | 31,965 | ||||||||||||||||||||||||
| Non-interest expense: | |||||||||||||||||||||||||||||
| Salaries and employee benefits | 12,429 | 12,829 | 11,744 | 47,268 | 47,377 | ||||||||||||||||||||||||
| Occupancy and equipment | 2,270 | 1,243 | 1,232 | 5,976 | 4,842 | ||||||||||||||||||||||||
| Professional fees | 1,134 | 1,106 | 1,382 | 4,767 | 4,312 | ||||||||||||||||||||||||
| Data processing and software | 1,553 | 1,553 | 1,651 | 6,144 | 6,415 | ||||||||||||||||||||||||
| Advertising and promotion | 839 | 717 | 931 | 3,293 | 3,730 | ||||||||||||||||||||||||
| Pennsylvania bank shares tax | 243 | 181 | 233 | 972 | 968 | ||||||||||||||||||||||||
| Other | 2,943 | 2,917 | 2,530 | 10,729 | 9,481 | ||||||||||||||||||||||||
| Total non-interest expense | 21,411 | 20,546 | 19,703 | 79,149 | 77,125 | ||||||||||||||||||||||||
| Income before income taxes | 7,596 | 6,245 | 728 | 21,786 | 16,967 | ||||||||||||||||||||||||
| Income tax expense | 1,995 | 1,502 | 157 | 5,440 | 3,724 | ||||||||||||||||||||||||
| Net income | $ | 5,601 | $ | 4,743 | $ | 571 | $ | 16,346 | $ | 13,243 | |||||||||||||||||||
| Basic earnings per common share | $ | 0.50 | $ | 0.43 | $ | 0.05 | $ | 1.47 | $ | 1.19 | |||||||||||||||||||
| Diluted earnings per common share | $ | 0.49 | $ | 0.42 | $ | 0.05 | $ | 1.45 | $ | 1.16 | |||||||||||||||||||
| Basic weighted average shares outstanding | 11,158 | 11,110 | 11,070 | 11,113 | 11,115 | ||||||||||||||||||||||||
| Diluted weighted average shares outstanding | 11,375 | 11,234 | 11,206 | 11,243 | 11,387 | ||||||||||||||||||||||||
8
Exhibit 99.1
MERIDIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
| Assets: | |||||||||||||||||||||||||||||
| Cash and due from banks | $ | 5,598 | $ | 12,542 | $ | 8,457 | $ | 8,935 | $ | 10,067 | |||||||||||||||||||
| Interest-bearing deposits at other banks | 21,864 | 19,805 | 15,601 | 14,092 | 46,630 | ||||||||||||||||||||||||
| Cash and cash equivalents | 27,462 | 32,347 | 24,058 | 23,027 | 56,697 | ||||||||||||||||||||||||
| Securities available-for-sale, at fair value | 174,304 | 171,568 | 159,141 | 150,996 | 146,019 | ||||||||||||||||||||||||
| Securities held-to-maturity, at amortized cost | 33,771 | 33,833 | 35,089 | 35,157 | 35,781 | ||||||||||||||||||||||||
| Equity investments | 2,086 | 2,166 | 2,088 | 2,092 | 2,121 | ||||||||||||||||||||||||
| Mortgage loans held for sale, at fair value | 32,413 | 46,602 | 54,278 | 29,124 | 24,816 | ||||||||||||||||||||||||
| Loans and other finance receivables, net of fees and costs | 2,030,437 | 2,008,396 | 1,988,535 | 1,956,315 | 1,895,806 | ||||||||||||||||||||||||
| Allowance for credit losses | (18,438) | (21,965) | (21,703) | (23,171) | (22,107) | ||||||||||||||||||||||||
| Loans and other finance receivables, net of the allowance for credit losses | 2,011,999 | 1,986,431 | 1,966,832 | 1,933,144 | 1,873,699 | ||||||||||||||||||||||||
| Restricted investment in bank stock | 7,753 | 8,542 | 10,044 | 8,560 | 8,072 | ||||||||||||||||||||||||
| Bank premises and equipment, net | 12,151 | 12,807 | 13,114 | 13,451 | 13,557 | ||||||||||||||||||||||||
| Bank owned life insurance | 29,712 | 29,489 | 29,267 | 29,051 | 28,844 | ||||||||||||||||||||||||
| Accrued interest receivable | 9,958 | 10,012 | 9,973 | 9,864 | 9,325 | ||||||||||||||||||||||||
| Other real estate owned | 159 | 1,862 | 1,862 | 1,703 | 1,703 | ||||||||||||||||||||||||
| Deferred income taxes | 4,669 | 3,537 | 3,950 | 4,339 | 4,201 | ||||||||||||||||||||||||
| Servicing assets | 4,382 | 4,364 | 11,341 | 11,573 | 11,748 | ||||||||||||||||||||||||
| Servicing assets held for sale | — | 6,609 | — | — | — | ||||||||||||||||||||||||
| Goodwill | 899 | 899 | 899 | 899 | 899 | ||||||||||||||||||||||||
| Intangible assets | 2,767 | 2,818 | 2,869 | 2,920 | 2,971 | ||||||||||||||||||||||||
| Other assets | 31,382 | 33,835 | 26,779 | 37,023 | 25,740 | ||||||||||||||||||||||||
| Total assets | $ | 2,385,867 | $ | 2,387,721 | $ | 2,351,584 | $ | 2,292,923 | $ | 2,246,193 | |||||||||||||||||||
| Liabilities: | |||||||||||||||||||||||||||||
| Deposits: | |||||||||||||||||||||||||||||
| Non-interest bearing | $ | 240,858 | $ | 237,207 | $ | 224,040 | $ | 220,581 | $ | 239,289 | |||||||||||||||||||
| Interest bearing | |||||||||||||||||||||||||||||
| Interest checking | 141,439 | 133,429 | 130,062 | 121,204 | 150,898 | ||||||||||||||||||||||||
| Money market and savings deposits | 913,536 | 822,837 | 787,479 | 797,525 | 747,803 | ||||||||||||||||||||||||
| Time deposits | 709,535 | 785,454 | 773,855 | 761,386 | 685,472 | ||||||||||||||||||||||||
| Total interest-bearing deposits | 1,764,510 | 1,741,720 | 1,691,396 | 1,680,115 | 1,584,173 | ||||||||||||||||||||||||
| Total deposits | 2,005,368 | 1,978,927 | 1,915,436 | 1,900,696 | 1,823,462 | ||||||||||||||||||||||||
| Borrowings | 124,471 | 144,880 | 187,260 | 145,803 | 174,896 | ||||||||||||||||||||||||
| Subordinated debentures | 49,743 | 49,928 | 49,897 | 49,867 | 49,836 | ||||||||||||||||||||||||
| Accrued interest payable | 6,860 | 7,017 | 7,709 | 8,350 | 10,324 | ||||||||||||||||||||||||
| Other liabilities | 27,903 | 39,519 | 28,900 | 28,271 | 29,653 | ||||||||||||||||||||||||
| Total liabilities | 2,214,345 | 2,220,271 | 2,189,202 | 2,132,987 | 2,088,171 | ||||||||||||||||||||||||
| Stockholders’ equity: | |||||||||||||||||||||||||||||
| Common stock | 13,243 | 13,232 | 13,194 | 13,189 | 13,186 | ||||||||||||||||||||||||
| Surplus | 81,545 | 81,002 | 80,639 | 80,487 | 80,325 | ||||||||||||||||||||||||
| Treasury stock | (26,079) | (26,079) | (26,079) | (26,079) | (26,079) | ||||||||||||||||||||||||
| Unearned common stock held by employee stock ownership plan | (1,006) | (1,204) | (1,204) | (1,204) | (1,204) | ||||||||||||||||||||||||
| Retained earnings | 111,961 | 107,765 | 104,420 | 102,492 | 101,216 | ||||||||||||||||||||||||
| Accumulated other comprehensive loss | (8,142) | (7,266) | (8,588) | (8,949) | (9,422) | ||||||||||||||||||||||||
| Total stockholders’ equity | 171,522 | 167,450 | 162,382 | 159,936 | 158,022 | ||||||||||||||||||||||||
| Total liabilities and stockholders’ equity | $ | 2,385,867 | $ | 2,387,721 | $ | 2,351,584 | $ | 2,292,923 | $ | 2,246,193 | |||||||||||||||||||
9
Exhibit 99.1
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 | |||||||||||||||||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
| Interest income | $ | 40,028 | $ | 40,319 | $ | 38,465 | $ | 37,215 | $ | 36,346 | |||||||||||||||||||
| Interest expense | 20,729 | 22,077 | 21,619 | 20,606 | 19,404 | ||||||||||||||||||||||||
| Net interest income | 19,299 | 18,242 | 16,846 | 16,609 | 16,942 | ||||||||||||||||||||||||
Provision for credit losses | 3,572 | 2,282 | 2,680 | 2,866 | 4,628 | ||||||||||||||||||||||||
| Non-interest income | 13,280 | 10,831 | 9,244 | 7,984 | 8,117 | ||||||||||||||||||||||||
| Non-interest expense | 21,411 | 20,546 | 19,018 | 18,174 | 19,703 | ||||||||||||||||||||||||
| Income before income tax expense | 7,596 | 6,245 | 4,392 | 3,553 | 728 | ||||||||||||||||||||||||
| Income tax expense | 1,995 | 1,502 | 1,066 | 877 | 157 | ||||||||||||||||||||||||
| Net Income | $ | 5,601 | $ | 4,743 | $ | 3,326 | $ | 2,676 | $ | 571 | |||||||||||||||||||
| Basic weighted average shares outstanding | 11,158 | 11,110 | 11,096 | 11,088 | 11,070 | ||||||||||||||||||||||||
| Basic earnings per common share | $ | 0.50 | $ | 0.43 | $ | 0.30 | $ | 0.24 | $ | 0.05 | |||||||||||||||||||
| Diluted weighted average shares outstanding | 11,375 | 11,234 | 11,150 | 11,201 | 11,206 | ||||||||||||||||||||||||
| Diluted earnings per common share | $ | 0.49 | $ | 0.42 | $ | 0.30 | $ | 0.24 | $ | 0.05 | |||||||||||||||||||
| Segment Information | |||||||||||||||||||||||||||||||||||||||||||||||
Three Months Ended December 31, 2024 | Three Months Ended December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Bank | Wealth | Mortgage | Total | Bank | Wealth | Mortgage | Total | |||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 19,178 | $ | 70 | $ | 51 | $ | 19,299 | $ | 16,908 | $ | (15) | $ | 49 | $ | 16,942 | |||||||||||||||||||||||||||||||
Provision for credit losses | 3,572 | — | — | 3,572 | 4,628 | — | — | 4,628 | |||||||||||||||||||||||||||||||||||||||
Net interest income after provision | 15,606 | 70 | 51 | 15,727 | 12,280 | (15) | 49 | 12,314 | |||||||||||||||||||||||||||||||||||||||
| Non-interest income | 2,669 | 1,527 | 9,084 | 13,280 | 2,051 | 1,239 | 4,827 | 8,117 | |||||||||||||||||||||||||||||||||||||||
| Non-interest expense | 13,641 | 1,026 | 6,744 | 21,411 | 13,202 | 957 | 5,544 | 19,703 | |||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 4,634 | $ | 571 | $ | 2,391 | $ | 7,596 | $ | 1,129 | $ | 267 | $ | (668) | $ | 728 | |||||||||||||||||||||||||||||||
| Efficiency ratio | 62 | % | 64 | % | 74 | % | 66 | % | 70 | % | 78 | % | 114 | % | 79 | % | |||||||||||||||||||||||||||||||
Year Ended December 31, 2024 | Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||
| (dollars in thousands) | Bank | Wealth | Mortgage | Total | Bank | Wealth | Mortgage | Total | |||||||||||||||||||||||||||||||||||||||
| Net interest income | $ | 70,706 | $ | 146 | $ | 144 | $ | 70,996 | $ | 68,835 | $ | (27) | $ | 134 | $ | 68,942 | |||||||||||||||||||||||||||||||
Provision for credit losses | 11,400 | — | — | 11,400 | 6,815 | — | — | 6,815 | |||||||||||||||||||||||||||||||||||||||
Net interest income after provision | 59,306 | 146 | 144 | 59,596 | 62,020 | (27) | 134 | 62,127 | |||||||||||||||||||||||||||||||||||||||
| Non-interest income | 7,576 | 5,735 | 28,028 | 41,339 | 7,743 | 4,928 | 19,294 | 31,965 | |||||||||||||||||||||||||||||||||||||||
| Non-interest expense | 51,584 | 3,506 | 24,059 | 79,149 | 48,827 | 3,661 | 24,637 | 77,125 | |||||||||||||||||||||||||||||||||||||||
Income (loss) before income taxes | $ | 15,298 | $ | 2,375 | $ | 4,113 | $ | 21,786 | $ | 20,936 | $ | 1,240 | $ | (5,209) | $ | 16,967 | |||||||||||||||||||||||||||||||
| Efficiency ratio | 66 | % | 60 | % | 85 | % | 70 | % | 64 | % | 75 | % | 127 | % | 76 | % | |||||||||||||||||||||||||||||||
10
MERIDIAN CORPORATION AND SUBSIDIARIES
APPENDIX: 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 | Year Ended | ||||||||||||||||||||||||||||
(Dollars in thousands, except per share data, Unaudited) | December 31, 2024 | September 30, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||
| Income before income tax expense | $ | 7,596 | $ | 6,245 | $ | 728 | $ | 21,786 | $ | 16,967 | |||||||||||||||||||
| Provision for credit losses | 3,572 | 2,282 | 4,628 | 11,400 | 6,815 | ||||||||||||||||||||||||
| Pre-tax, pre-provision income | $ | 11,168 | $ | 8,527 | $ | 5,356 | $ | 33,186 | $ | 23,782 | |||||||||||||||||||
Pre-tax, Pre-provision Reconciliation | |||||||||||||||||||||||||||||
| Three Months Ended | Year Ended | ||||||||||||||||||||||||||||
(Dollars in thousands, except per share data, Unaudited) | December 31, 2024 | September 30, 2024 | December 31, 2023 | December 31, 2024 | December 31, 2023 | ||||||||||||||||||||||||
| Bank | $ | 8,206 | $ | 6,222 | $ | 5,757 | $ | 26,698 | $ | 27,751 | |||||||||||||||||||
| Wealth | 571 | 653 | 267 | 2,375 | 1,240 | ||||||||||||||||||||||||
| Mortgage | 2,391 | 1,652 | (668) | 4,113 | (5,209) | ||||||||||||||||||||||||
| Pre-tax, pre-provision income | $ | 11,168 | $ | 8,527 | $ | 5,356 | $ | 33,186 | $ | 23,782 | |||||||||||||||||||
| Allowance For Credit Losses (ACL) to Loans and Other Finance Receivables, Excluding and Loans at Fair Value | |||||||||||||||||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
Allowance for credit losses (GAAP) | $ | 18,438 | $ | 21,965 | $ | 21,703 | $ | 23,171 | $ | 22,107 | |||||||||||||||||||
Loans and other finance receivables (GAAP) | 2,030,437 | 2,008,396 | 1,988,535 | 1,956,315 | 1,895,806 | ||||||||||||||||||||||||
Less: Loans at fair value | (14,501) | (13,965) | (12,900) | (13,139) | (13,726) | ||||||||||||||||||||||||
Loans and other finance receivables, excluding loans at fair value (non-GAAP) | $ | 2,015,936 | $ | 1,994,431 | $ | 1,975,635 | $ | 1,943,176 | $ | 1,882,080 | |||||||||||||||||||
ACL to loans and other finance receivables (GAAP) | 0.91 | % | 1.09 | % | 1.09 | % | 1.18 | % | 1.17 | % | |||||||||||||||||||
ACL to loans and other finance receivables, excluding loans at fair value (non-GAAP) | 0.91 | % | 1.10 | % | 1.10 | % | 1.19 | % | 1.17 | % | |||||||||||||||||||
Tangible Common Equity Ratio Reconciliation - Corporation | |||||||||||||||||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
Total stockholders' equity (GAAP) | $ | 171,522 | $ | 167,450 | $ | 162,382 | $ | 159,936 | $ | 158,022 | |||||||||||||||||||
Less: Goodwill and intangible assets | (3,666) | (3,717) | (3,768) | (3,819) | (3,870) | ||||||||||||||||||||||||
Tangible common equity (non-GAAP) | 167,856 | 163,733 | 158,614 | 156,117 | 154,152 | ||||||||||||||||||||||||
Total assets (GAAP) | 2,385,867 | 2,387,721 | 2,351,584 | 2,292,923 | 2,246,193 | ||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (3,666) | (3,717) | (3,768) | (3,819) | (3,870) | ||||||||||||||||||||||||
Tangible assets (non-GAAP) | $ | 2,382,201 | $ | 2,384,004 | $ | 2,347,816 | $ | 2,289,104 | $ | 2,242,323 | |||||||||||||||||||
Tangible common equity to tangible assets ratio - Corporation (non-GAAP) | 7.05 | % | 6.87 | % | 6.76 | % | 6.82 | % | 6.87 | % | |||||||||||||||||||
11
Tangible Common Equity Ratio Reconciliation - Bank | |||||||||||||||||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
| Total stockholders' equity (GAAP) | $ | 219,119 | $ | 217,028 | $ | 211,308 | $ | 208,319 | $ | 204,132 | |||||||||||||||||||
| Less: Goodwill and intangible assets | (3,666) | (3,717) | (3,768) | (3,819) | (3,870) | ||||||||||||||||||||||||
| Tangible common equity (non-GAAP) | 215,453 | 213,311 | 207,540 | 204,500 | 200,262 | ||||||||||||||||||||||||
| Total assets (GAAP) | 2,382,014 | 2,385,994 | 2,349,600 | 2,292,894 | 2,244,893 | ||||||||||||||||||||||||
| Less: Goodwill and intangible assets | (3,666) | (3,717) | (3,768) | (3,819) | (3,870) | ||||||||||||||||||||||||
| Tangible assets (non-GAAP) | $ | 2,378,348 | $ | 2,382,277 | $ | 2,345,832 | $ | 2,289,075 | $ | 2,241,023 | |||||||||||||||||||
| Tangible common equity to tangible assets ratio - Bank (non-GAAP) | 9.06 | % | 8.95 | % | 8.85 | % | 8.93 | % | 8.94 | % | |||||||||||||||||||
| Tangible Book Value Reconciliation | |||||||||||||||||||||||||||||
| December 31, 2024 | September 30, 2024 | June 30, 2024 | March 31, 2024 | December 31, 2023 | |||||||||||||||||||||||||
| Book value per common share | $ | 15.26 | $ | 14.91 | $ | 14.51 | $ | 14.30 | $ | 14.13 | |||||||||||||||||||
| Less: Impact of goodwill /intangible assets | 0.33 | 0.33 | 0.34 | 0.34 | 0.35 | ||||||||||||||||||||||||
| Tangible book value per common share | $ | 14.93 | $ | 14.58 | $ | 14.17 | $ | 13.96 | $ | 13.78 | |||||||||||||||||||
12
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 Fourth Quarter 2024 Earnings Supplement NASDAQ: MRBK
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 2Meridian Corporation FORWARD-LOOKING STATEMENTS Meridian Corporation (the “Corporation”) may from time to time make written or oral “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 "will", “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” "project", or similar expressions generally indicate a forward-looking statement. Forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those in such statements. Factors that could cause actual results to differ from those discussed in the forward-looking statements include, but are not limited to: Local, regional, national and international economic conditions and the impact they may have on us and our customers and our assessment of that impact; Volatility and disruption in national and international financial markets; Adverse developments in the banking industry highlighted by high-profile bank failures and the potential impact of such developments on customer confidence, liquidity, and regulatory responses to these developments; Government intervention in the U.S. financial system; Changes in the mix of loan geographies, sectors and types or the level of non-performing assets and charge-offs; Our ability to manage our commercial real estate exposure; Changes in estimates of future reserve requirements based upon the periodic review thereof under relevant regulatory and accounting requirements; The effects of and changes in trade and monetary and fiscal policies and laws, including the interest rate policies of the Federal Reserve Board; Inflation, interest rate, securities market and monetary fluctuations; The effect of changes in laws and regulations (including laws and regulations concerning taxes, banking, securities and insurance) with which we and our subsidiaries must comply; Impairment of our goodwill or other intangible assets; Acts of God or of war or terrorism; Changes in consumer spending, borrowings and savings habits; Changes in the financial performance and/or condition of our borrowers; Technological changes, including the rise of AI as a commonly used resource; The cost and effects of cyber incidents or other failures, interruption or security breaches of our systems or those of third-party providers; Acquisitions and integration of acquired businesses; Our ability to increase market share and control expenses; Our ability to attract and retain qualified employees; Changes in the competitive environment in our markets and among banking organizations and other financial service providers; The effect of changes in accounting policies and practices, as may be adopted by the regulatory agencies, as well as the PCAOB, the FASB and other accounting standard setters; Changes in the reliability of our vendors, internal control systems or information systems; Changes in our liquidity position; Changes in our organization, compensation and benefit plans; The costs and effects of legal and regulatory developments, the resolution of legal proceedings or regulatory or other governmental inquiries, the results of regulatory examinations or reviews and the ability to obtain required regulatory approvals; Greater than expected costs or difficulties related to the integration of new products and lines of business; Our success at managing the risks involved in the foregoing items. 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 the 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. The Corporation does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by the Corporation or by or on behalf of Meridian Bank, except as may be required under applicable laws.
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 3Meridian Corporation MRBK INVESTMENT HIGHLIGHTS "Go to" bank in the Delaware Valley Valuable customer base trained to solely use electronic channel. Regional presence with a community touch. Focus on Commercial, CRE and SBA lending - 80% of loan book. Comfortably handle all but the largest companies. Skilled management team with extensive in-market experience. Demonstrated organic growth engine in diversified loan segments. Strong sales culture that capitalizes on market disruption.
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 4Meridian Corporation GEOGRAPHIC FOOTPRINT Regional Market • Serves PA, NJ, DE & MD • Philadelphia MSA is 8th largest in the US Satellite Commercial Loan Production Office Naples, FL Reaches broad SW FL market HQ in Malvern, PA • 6 full service branches • Main office in Wayne, PA • 9 mortgage loan production offices
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 5Meridian Corporation Q4'2024 vs Q4'2023 Financial Recap 1) A Non-GAAP measure. See Non-GAAP reconciliation in the Appendix. 2) Includes loans held for investment. Summary Income Statement ($000s) Q4'2024 Q4'2023 Net Interest Income $ 19,299 $ 16,942 Provision for Credit Losses 3,572 4,628 Non-Interest Income 13,280 8,117 Non-Interest Expense 21,411 19,703 Income Before Income Taxes 7,596 728 Income Taxes 1,995 157 Net income $ 5,601 $ 571 Earnings Per Share Diluted Earnings Per Share $ 0.49 $ 0.05 Pre-Tax, Pre-Provision Income by Segment 1 Bank $ 8,206 $ 5,757 Wealth 571 267 Mortgage 2,391 (668) Pre-Tax, Pre-Provision Income $ 11,168 $ 5,356 Summary Balance Sheet Q4'2024 Q4'2023 Assets ($M) $ 2,386 $ 2,246 Loans ($M) 2 $ 2,030 $ 1,896 Deposits ($M) $ 2,005 $ 1,823 Equity ($M) $ 172 $ 158 Assets ($M) Loans ($M) Deposits ($M) Q4'2020 Q4'2021 Q4'2022 Q4'2023 Q4'2024 $1,000 $2,000 $3,000
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 6Meridian Corporation Q4'2024 HIGHLIGHTS 1) As of and for the quarter ended and year ended December 31, 2024, per January 24, 2025 press release. 2) Includes loans held for sale and loans held for investment. 3) A Non-GAAP measure. See Non-GAAP reconciliation in the Appendix. For the Calendar Quarter Ended Balance Sheet ($M) Q4'2024 Q3'2024 Q2'2024 Q1'2024 Q4'2023 Total Assets $ 2,386 $ 2,388 $ 2,352 $ 2,293 $ 2,246 Total Loans & Leases² 2,063 2,055 2,043 1,985 1,921 Deposits 2,005 1,979 1,915 1,901 1,823 Equity 172 167 162 160 158 Tangible Equity / Tangible Assets3 7.05 % 6.87 % 6.76 % 6.82 % 6.87 % Net Income & Share Data ($000s) Net Income $ 5,601 $ 4,743 $ 3,326 $ 2,676 $ 571 Diluted EPS 0.49 0.42 0.30 0.24 0.05 Price per Common Share 13.71 12.64 10.52 9.92 13.90 TBV per Share 14.93 14.58 14.17 13.96 13.78 Pre-tax, Pre-Provision Income3 11,168 8,527 7,072 6,419 5,356 Common Dividends per Share 0.125 0.125 0.125 0.125 0.125 Dividend Yield (annualized) 3.6 % 4.0 % 4.8 % 5.0 % 3.6 % Payout Ratio 25.0 % 29.1 % 41.7 % 52.1 % 250.0 % Profitability (%) ROAA 0.92 % 0.80 % 0.58 % 0.47 % 0.10 % ROAE 13.01 % 11.41 % 8.25 % 6.73 % 1.44 % NIM 3.29 % 3.20 % 3.06 % 3.09 % 3.18 %
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 7Meridian Corporation Q4'2024 INCOME STATEMENT TRENDS ($000s) Pre-tax, Pre-provision Income by Segment Q4'2023 Q3'2024 Q4'2024 MSR Sale Impact (1) Lease Term Impact (2) Adjusted Q4'2024 Bank $ 5,757 $ 6,222 $ 8,206 $ — $ 339 $ 8,545 Wealth 267 653 571 — — 571 Mortgage3 (668) 1,652 2,391 (3,888) 669 (828) Total Pre-tax, Pre-provision Income $ 5,356 $ 8,527 $ 11,168 $ (3,888) $ 1,008 $ 8,288 (1) - Adjusted for gain on sale of MSR's of $3,992, offset with sale transaction expenses. (2) - Adjusted for expenses related to early termination of Blue Bell office location, including asset disposal costs and lease termination expense. (3) - Included in the Mortgage segment pre-tax, pre-provision income for Q4'23, Q3'24 and Q4'24 is income or (loss) on FMV of mortgage portfolios of $805 thousand, $965 thousand, and $(552) thousand, respectively. Q1'2024 Q2'2024 Q3'2024 Q4'2024 Net Interest Income Non-Interest Income Non-Interest Expense Pre-Tax, Pre- Provision Income Net Income $0 $5,000 $10,000 $15,000 $20,000
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 8Meridian Corporation NET INTEREST MARGIN 3.18% 3.09% 3.06% 3.20% 3.29% 6.81% 6.90% 6.98% 7.06% 6.81% 3.81% 4.00% 4.10% 4.05% 3.71% Net Interest Margin Yield on Earning Assets Cost of Funds Q4'2023 Q1'2024 Q2'2024 Q3'2024 Q4'2024 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00%
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 9Meridian Corporation DEPOSIT REPRICING DRIVING DOWN COST OF FUNDS • During Q4, funding costs declined 34 bps, driving improvement in net interest margin • $435 M in term deposits to reprice next six months • Currently repricing at approx. 4.25%, down from 4.90% and 4.47% through months 1 to 3 and 4 to 6 of 2025, respectively
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 10Meridian Corporation LOAN PORTFOLIO COMPOSITION Portfolio Balance (000s) December 31, 2024 YTD Growth % Commercial mortgage 823,976 11.7 % Commercial and industrial 367,366 21.3 % Construction 259,553 5.3 % SBA loans 155,775 9.4 % Leases, net 75,987 (37.5) % Residential mortgage 252,565 (3.1) % Home equity 90,721 18.9 % Consumer, other 349 (10.3) % Total portfolio loans $ 2,026,292 7.3 % Commercial mortgage, 40% Consumer , 17% Construction, 13% Commercial and industrial, 18% SBA , 8% Leases, 4% Commercial - 83% Consumer - 17% (resi, home equity, other consumer)
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 11Meridian Corporation C&I LOAN PORTFOLIO OVERVIEW C&I Portfolio By Industry as of December 31, 2024 10 Largest C&I Relationships as a % of C&I Portfolio 13 % 10 Largest C&I Relationships as a % of Total Loan Portfolio 5 % Average Loan Size O/S of C&I Portfolio, excluding leases ($000s) $413 Weighted Average Risk Rating of C&I Portfolio 4.1 (pass) Manufacturing, 15.5% Other, 17.2% Health & Social Services, 8.5% RE Investment, 8.9% Professional Services, 9.7% Construction Related, 11.6% Wholesale Trade, 6.8% Retail Trade, 6.1% Financial, Insurance & RE Services, 5.4% Admin & Support, 4.6% Leisure, 4.1% Waste Mgmt & Remediation, 1.5% Total C&I Loans* $839 million *Includes owner occupied CRE of $335 million Portfolio Characteristics
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 12Meridian Corporation Resi & Coml Constr, 30.5% Resi RE Inv, 28.0% Com RE Inv, 18.0% Leisure, 8.3% Other, 6.0% Fin, Ins, RE Services, 5.0% Construction Related, 2.4% RE & Rental Lease, 1.7% CRE LOAN PORTFOLIO OVERVIEW Total CRE Loans $849 Million* (as a % of CRE loans) *Owner occupied CRE of $335 million not included (see C&I chart) Included in CRE: • $115.2M of multi-family loans Region Amount ($000s) % of Total Philadelphia 81,966 71 % Chester County, PA 12,264 11 % Montgomery County, PA 7,625 7 % New Castle, DE 7,045 6 % Delaware County PA 1,998 2 % Southern NJ 1,397 1 % Bucks County, PA 1,399 1 % Other 1,512 1 % Total $ 115,206
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 13Meridian Corporation CRE RATIOS - 100 & 300* 75% 75% 88% 96% 99% 73% 73% 127% 113% 117% 116% 110% 112% 150% 149% 156% 184% 177% 172% 169% 234% 256% 263% 273% 271% 274% CRE 100 Ratio CRE 300 Ratio Dec-15 Dec-16 Dec-17 Dec-18 Dec-19 Dec-20 Dec-21 Dec-22 Dec-23 Mar-24 Jun-24 Sep-24 Dec-24 50% 100% 150% 200% 250% 300% Increase of $120M in Construction of which $56M was Multi-family * The CRE 100 Ratio and CRE 300 Ratio consist of construction loans (100) and non-owner occupied CRE loans (300) compared to total risk-based capital at December 31, 2024.
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 14Meridian Corporation ASSET QUALITY TRENDS 0.05% 0.08% 0.05% 0.05% 0.11% 0.12% 0.20% 0.11% 0.34% 1.11% 1.11% 1.32% 1.38% 1.58% 1.74% 1.68% 1.97% 1.90% NCOs / Avg Loans NPAs / Assets Q4'2022 Q1'2023 Q2'2023 Q3'2023 Q4'2023 Q1'2024 Q2'2024 Q3'2024 Q4'2024 0.00% 0.25% 0.50% 0.75% 1.00% 1.25% 1.50% 1.75% 2.00%
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 15Meridian Corporation MORTGAGE VOLUME & MARGIN TRENDS 3.14% 2.89% 2.71% 2.76% 2.95% 2.81% 2.82% 2.73% Closed and Funded - Purchase Closed and Funded - Refi Sold Volume Margin Q1'2023 Q2'2023 Q3'2023 Q4'2023 Q1'2024 Q2'2024 Q3'2024 Q4'2024 0 60 120 180 240 300 2.00% 2.25% 2.50% 2.75% 3.00% 3.25% Q1'2023 Q2'2023 Q3'2023 Q4'2023 Q1'2024 Q2'2024 Q3'2024 Q4'2024 Refinance (%) 13% 9% 10% 13% 16% 10% 12% 19% Purchase (%) 87% 91% 90% 87% 84% 90% 88% 81%
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 16Meridian Corporation DEPOSIT COMPOSITION Business Accounts, 50% Consumer Accounts, 13% Municipal Deposits, 12% Brokered Deposits, 25% Business Accounts Consumer Accounts Municipal Deposits Brokered Deposits Total Deposits $2.0 billion • At December 31, 2024, 57% of business accounts and 85% of consumer accounts were fully insured by the FDIC. • The average business money market account balance was $573 thousand at December 31, 2024. • The municipal deposits are 100% insured or collateralized and brokered deposits are 100% FDIC insured. • The level of uninsured deposits for the entire deposit base was 23% at December 31, 2024. (as a % of total deposits)
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 17Meridian Corporation INVESTMENT PORTFOLIO COMPOSITION • Total investment securities 8.8% of total assets: – 84% Available for sale (AFS). – 16% Held-to-maturity (HTM). • Portfolio duration - 3.78 years and average life - 5.13 years. • Tax-equivalent yield - 3.8% • 12-month projected cash flow $29.3 million, or 14% of portfolio • Post Tax AFS URL $7.3 million or 4.13% of Tier 1 capital (1) Capital ratios reflect Meridian Bank ratios. US government agency 39.0% State & municipal - tax free 26.3% Other 12.3% US asset backed 14.2% State & municipal - taxable 7.2% Equity Securities 1.0% Total Securities $210.2 million
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 18Meridian Corporation APPENDIX - HISTORICAL FINANCIAL HIGHLIGHTS AND RECONCILIATIONS OF NON-GAAP MEASURES
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 19Meridian Corporation HISTORICAL FINANCIAL DATA 1) Includes loans held for sale and held for investment. 2) Includes loans held for investment (excluding loans at fair value). 3) A Non-GAAP measure. See Appendix for Non-GAAP to GAAP reconciliation. As of or the Quarter Ended As of or the Year Ended (dollars in thousands) Q4'2024 Q3'2024 Q4'2023 2024Y 2023Y 2022Y Balance Sheet Total Assets $ 2,385,867 $ 2,387,721 $ 2,246,193 $ 2,385,867 $ 2,246,193 $ 2,062,228 Loans (1) 2,062,850 2,054,998 1,920,622 2,062,850 1,920,622 1,765,925 Deposits 2,005,368 1,978,927 1,823,462 2,005,368 1,823,462 1,712,479 Gross Loans / Deposits 102.87 % 103.84 % 105.33 % 102.87 % 105.33 % 103.12 % Capital Total Equity $ 171,522 $ 167,450 $ 158,022 $ 171,522 $ 158,022 $ 153,280 Tangible Common Equity / Tangible Assets - HC (3) 7.05 % 6.87 % 6.87 % 7.05 % 6.87 % 7.25 % Tangible Common Equity / Tangible Assets - Bank (3) 9.06 8.95 8.94 9.06 8.94 8.80 Tier 1 Leverage Ratio - Bank 9.21 9.32 9.46 9.21 9.46 9.95 Total Capital Ratio - Bank 11.20 11.22 11.17 11.20 11.17 11.87 Commercial Real Estate Loans / Total RBC 277.2 % 270.7 % 255.9 % 277.2 % 255.9 % 232.8 % Earnings & Profitability Net Income $ 5,601 $ 4,743 $ 571 $ 16,346 $ 13,243 $ 21,829 ROA 0.92 % 0.80 % 0.10 % 0.70 % 0.61 % 1.18 % ROE 13.01 11.41 1.44 9.93 8.53 13.87 Net Interest Margin (NIM)(TEY) 3.29 3.20 3.18 3.16 3.35 3.98 Non-Int Inc. / Avg. Assets 2.17 1.82 1.45 1.76 1.48 2.26 Efficiency Ratio 65.72 % 70.67 % 78.63 % 70.46 % 76.43 % 72.81 % Asset Quality Nonaccrual Loans / Loans (1) 2.19 % 2.20 % 1.76 % 2.19 % 1.76 % 1.20 % NPAs / Assets 1.90 1.97 1.58 1.90 1.58 1.11 Reserves / Loans (2) (3) 0.91 1.10 1.17 0.91 1.17 1.09 NCOs / Average Loans 0.34 % 0.11 % 0.11 % 0.78 % 0.30 % 0.15 % Yield and Cost Yield on Earning Assets (TEY) 6.81 % 7.06 % 6.81 % 6.94 % 6.62 % 5.02 % Cost of Deposits 3.57 3.92 3.66 3.82 3.24 0.97 Cost of Interest-Bearing Liabilities 4.20 % 4.57 % 4.36 % 4.46 % 3.97 % 1.36 %
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 20Meridian Corporation Allowance For Credit Losses (ACL) to Loans and Other Finance Receivables, Excluding Loans at Fair Value (dollars in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Allowance for credit losses (GAAP) $ 18,438 $ 21,965 $ 21,703 $ 23,171 $ 22,107 Loans and other finance receivables (GAAP) 2,030,437 2,008,396 1,988,535 1,956,315 1,895,806 Less: Loans at fair value (14,501) (13,965) (12,900) (13,139) (13,726) Loans and other finance receivables, excluding loans at fair value (non-GAAP) $ 2,015,936 $ 1,994,431 $ 1,975,635 $ 1,943,176 $ 1,882,080 ACL to loans and other finance receivables (GAAP) 0.91 % 1.09 % 1.09 % 1.18 % 1.17 % ACL to loans and other finance receivables, excluding loans at fair value (non-GAAP) 0.91 % 1.10 % 1.10 % 1.19 % 1.17 % RECONCILIATION OF NON-GAAP MEASURES 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 Year Ended (Dollars in thousands, except per share data) December 31, 2024 September 30, 2024 December 31, 2023 December 31, 2024 December 31, 2023 Income before income tax expense $ 7,596 $ 6,245 $ 728 $ 21,786 $ 16,967 Provision for credit losses 3,572 2,282 4,628 11,400 6,815 Pre-tax, pre-provision income $ 11,168 $ 8,527 $ 5,356 $ 33,186 $ 23,782 Bank $ 8,206 $ 6,222 $ 5,757 $ 26,698 $ 27,751 Wealth 571 653 267 2,375 1,240 Mortgage 2,391 1,652 (668) 4,113 (5,209) Pre-tax, pre-provision income $ 11,168 $ 8,527 $ 5,356 $ 33,186 $ 23,782
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 21Meridian Corporation (dollars in thousands) December 31, 2024 September 30, 2024 June 30, 2024 March 31, 2024 December 31, 2023 Tangible common equity ratio - Consolidated: Total stockholders' equity (GAAP) $ 171,522 $ 167,450 $ 162,382 $ 159,936 $ 158,022 Less: Goodwill and intangible assets (3,666) (3,717) (3,768) (3,819) (3,870) Tangible common equity (non-GAAP) $ 167,856 $ 163,733 $ 158,614 $ 156,117 $ 154,152 Total assets (GAAP) $ 2,385,867 $ 2,387,721 $ 2,351,584 $ 2,292,923 $ 2,246,193 Less: Goodwill and intangible assets (3,666) (3,717) (3,768) (3,819) (3,870) Tangible assets (non-GAAP) $ 2,382,201 $ 2,384,004 $ 2,347,816 $ 2,289,104 $ 2,242,323 Tangible common equity ratio (non-GAAP) 7.05 % 6.87 % 6.76 % 6.82 % 6.87 % Tangible common equity ratio - Bank: Total stockholders' equity (GAAP) $ 219,119 $ 217,028 $ 211,308 $ 208,319 $ 204,132 Less: Goodwill and intangible assets (3,666) (3,717) (3,768) (3,819) (3,870) Tangible common equity (non-GAAP) $ 215,453 $ 213,311 $ 207,540 $ 204,500 $ 200,262 Total assets (GAAP) $ 2,382,014 $ 2,385,994 $ 2,349,600 $ 2,292,894 $ 2,244,893 Less: Goodwill and intangible assets (3,666) (3,717) (3,768) (3,819) (3,870) Tangible assets (non-GAAP) $ 2,378,348 $ 2,382,277 $ 2,345,832 $ 2,289,075 $ 2,241,023 Tangible common equity ratio (non-GAAP) 9.06 % 8.95 % 8.85 % 8.93 % 8.94 % RECONCILIATION OF NON-GAAP MEASURES