8-K
Meridian Corp (MRBK)
8-K
2022-02-03
For: 2022-02-03
View Original
Added on
April 10, 2026
View as plain text
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
February 3, 2022
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 February 3, 2022, 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. The following exhibit is furnished herewith:
EXHIBIT INDEX
| | | |
|---|---|---|
| Exhibit No. | **** | Description of Exhibit |
| 99.1 | Slide Presentation Update | |
| | | |
| 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: February 3, 2022 | ||||
| By: | /s/ Denise Lindsay | |||
| Denise Lindsay | ||||
| Executive Vice President and Chief Financial Officer | ||||
| |
Exhibit 99.1
| 4<br>th<br>QTR 2021<br>INVESTOR PRESENTATION<br>NASDAQ: MRBK<br>® |
|---|
| 2<br>Meridian<br>Corporation<br>Forward<br>-<br>Looking Statements<br>Meridian<br>Corporation<br>(the<br>“Corporation”)<br>may<br>from<br>time<br>to<br>time<br>make<br>written<br>or<br>oral<br>“forward<br>-<br>looking<br>statements”<br>within<br>the<br>meaning<br>of<br>the<br>“safe<br>harbor”<br>provisions<br>of<br>the<br>Private<br>Securities<br>Litigation<br>Reform<br>Act<br>of<br>1995<br>..<br>These<br>forward<br>-<br>looking<br>statements<br>include<br>statements<br>with<br>respect<br>to<br>Meridian<br>Corporation’s<br>strategies,<br>goals,<br>beliefs,<br>expectations,<br>estimates,<br>intentions,<br>capital<br>raising<br>efforts,<br>financial<br>condition<br>and<br>results<br>of<br>operations,<br>future<br>performance<br>and<br>business<br>..<br>Statements<br>preceded<br>by,<br>followed<br>by,<br>or<br>that<br>include<br>the<br>words<br>“may,”<br>“could,”<br>“should,”<br>“pro<br>forma,”<br>“looking<br>forward,”<br>“would,”<br>“believe,”<br>“expect,”<br>“anticipate,”<br>“estimate,”<br>“intend,”<br>“plan,”<br>“project”,<br>or<br>similar<br>expressions<br>generally<br>indicate<br>a<br>forward<br>-<br>looking<br>statement<br>..<br>These<br>forward<br>-<br>looking<br>statements<br>involve<br>risks<br>and<br>uncertainties<br>that<br>are<br>subject<br>to<br>change<br>based<br>on<br>various<br>important<br>factors<br>(some<br>of<br>which,<br>in<br>whole<br>or<br>in<br>part,<br>are<br>beyond<br>Meridian<br>Corporation’s<br>control)<br>..<br>Numerous<br>competitive,<br>economic,<br>regulatory,<br>legal<br>and<br>technological<br>factors,<br>risks<br>and<br>uncertainties<br>including,<br>without<br>limitation<br>:<br>the<br>impact<br>of<br>the<br>ongoing<br>COVID<br>-<br>19<br>pandemic<br>and<br>government<br>responses<br>thereto,<br>on<br>the<br>U<br>..<br>S<br>..<br>economy<br>and<br>customer<br>behavior,<br>including<br>the<br>markets<br>in<br>which<br>we<br>operate<br>;<br>actions<br>that<br>we<br>and<br>our<br>customers<br>take<br>in<br>response<br>to<br>these<br>factors<br>and<br>the<br>effects<br>such<br>actions<br>have<br>on<br>our<br>operations,<br>products,<br>services<br>and<br>customer<br>relationships<br>;<br>and<br>the<br>risk<br>that<br>the<br>Small<br>Business<br>Administration<br>may<br>not<br>fund<br>some<br>or<br>all<br>Paycheck<br>Protection<br>Program<br>(PPP)<br>loan<br>guaranties,<br>the<br>effects<br>of<br>actions<br>by<br>the<br>federal<br>government,<br>including<br>the<br>Board<br>of<br>Governors<br>of<br>the<br>Federal<br>Reserve<br>System<br>and<br>other<br>government<br>agencies,<br>that<br>may<br>affect<br>market<br>interest<br>rates<br>and<br>the<br>money<br>supply,<br>among<br>others<br>,<br>could<br>cause<br>Meridian<br>Corporation’s<br>financial<br>performance<br>to<br>differ<br>materially<br>from<br>the<br>goals,<br>plans,<br>objectives,<br>intentions<br>and<br>expectations<br>expressed<br>in<br>such<br>forward<br>-<br>looking<br>statements<br>..<br>Meridian<br>Corporation<br>cautions<br>that<br>the<br>foregoing<br>factors<br>are<br>not<br>exclusive,<br>and<br>neither<br>such<br>factors<br>nor<br>any<br>such<br>forward<br>-<br>looking<br>statement<br>takes<br>into<br>account<br>the<br>impact<br>of<br>any<br>future<br>events<br>..<br>All<br>forward<br>-<br>looking<br>statements<br>and<br>information<br>set<br>forth<br>herein<br>are<br>based<br>on<br>management’s<br>current<br>beliefs<br>and<br>assumptions<br>as<br>of<br>the<br>date<br>hereof<br>and<br>speak<br>only<br>as<br>of<br>the<br>date<br>they<br>are<br>made<br>..<br>For<br>a<br>more<br>complete<br>discussion<br>of<br>the<br>assumptions,<br>risks<br>and<br>uncertainties<br>related<br>to<br>our<br>business,<br>you<br>are<br>encouraged<br>to<br>review<br>Meridian<br>Corporation’s<br>filings<br>with<br>the<br>Securities<br>and<br>Exchange<br>Commission,<br>including<br>our<br>Annual<br>Report<br>on<br>Form<br>10<br>-<br>K<br>for<br>the<br>year<br>ended<br>December<br>31<br>,<br>2020<br>and<br>subsequently<br>filed<br>quarterly<br>reports<br>on<br>Form<br>10<br>-<br>Q<br>and<br>current<br>reports<br>on<br>Form<br>8<br>-<br>K<br>that<br>update<br>or<br>provide<br>information<br>in<br>addition<br>to<br>the<br>information<br>included<br>in<br>the<br>Form<br>10<br>-<br>K<br>and<br>Form<br>10<br>-<br>Q<br>filings,<br>if<br>any<br>..<br>Meridian<br>Corporation<br>does<br>not<br>undertake<br>to<br>update<br>any<br>forward<br>-<br>looking<br>statement<br>whether<br>written<br>or<br>oral,<br>that<br>may<br>be<br>made<br>from<br>time<br>to<br>time<br>by<br>Meridian<br>Corporation<br>or<br>by<br>or<br>on<br>behalf<br>of<br>Meridian<br>Bank,<br>except<br>as<br>may<br>be<br>required<br>under<br>applicable<br>law<br>.. |
| --- |
| 3<br>Meridian<br>Corporation<br>WHO<br>WE ARE<br>1<br>Includes home equity loans, residential mortgage loans held in portfolio and individual consumer loans.<br>Geographic Footprint<br>Branches<br>Mortgage<br>LPOs<br>Regional Market<br>Serves Pennsylvania, New Jersey, Delaware and<br>Maryland<br>Philadelphia MSA is 8<br>th<br>largest MSA in the US<br>Expansion into growing central Maryland MSA<br>Profile and Business Lines<br>Core Banking: C&I, CRE, construction, SBA, and consumer lending; lease<br>financing through Meridian Equipment Finance,<br>®<br>and deposit/treasury services.<br>Meridian Mortgage:<br>residential lending to homeowners and small scale<br>investors<br>originated<br>in the PA, NJ, DE, VA, MD and DC<br>markets.<br>Wealth Management Services through Meridian<br>Wealth<br>Partners,<br>®<br>a<br>registered<br>investment advisor and<br>subsidiary<br>of the<br>Bank. Over $1.1 billion in AUM.<br>Meridian specializes in business and industrial lending, retail and commercial<br>real estate lending, electronic payments, along with a broad menu of high<br>-<br>yield depository products supported by robust online and mobile<br>access.<br>Cash &<br>investments<br>11%<br>Commercial<br>loans<br>17%<br>SBA<br>loans<br>7%<br>PPP loans<br>5%<br>CRE loans<br>32%<br>Construction<br>loans<br>8%<br>H/E &<br>consumer<br>loans<br>3%<br>RE loans<br>9%<br>Leases<br>5%<br>FF & E<br>Other<br>assets<br>ASSET MIX AT DECEMBER 31, 2021 |
| --- |
| 4<br>Meridian<br>Corporation<br>WHAT WE<br>DELIVER<br>Lending expertise in commercial/industrial, real estate &<br>consumer with a consultative approach. Our<br>experienced business bankers craft custom financial solutions to help our customers thrive.<br>Demonstrated<br>organic growth engine in diversified loan segments, capitalizing on sales culture and big<br>bank missteps in the Delaware Valley tri<br>-<br>state market<br>..<br>Financial services business model with significant non<br>-<br>interest income streams in Meridian Mortgage, SBA<br>Lending and Meridian Wealth Partners.<br>Customer base principally interacts online, allowing a "branch<br>-<br>lite" banking strategy that provides<br>substantial operational leverage.<br>Skilled, long<br>-<br>tenured management team with extensive in<br>-<br>market experience<br>..<br>Excellent<br>asset quality with diversified loan portfolio.<br>Low commercial real estate (CRE) concentration; focus on smaller,<br>shorter duration<br>projects to be more<br>nimble<br>..<br>Nationally recognized as a great place to work; very low historical<br>employee turnover. |
| --- |
| 5<br>Meridian<br>Corporation<br>4<br>QTR HIGHLIGHTS<br>1)<br>As of and for the quarter ended December 31, 2021, per January 31, 2022 press release.<br>2)<br>Includes PPP loans, loans held for sale and loans held for investment.<br>3)<br>Excludes loans at fair value, loans held for sale and PPP loans. A Non<br>-<br>GAAP measure. Refer to Appendix for Non<br>-<br>GAAP to GAAP reco<br>nciliation.<br>4)<br>Excludes PPP loans and PPPLF borrowings. A Non<br>-<br>GAAP measure. Refer to Appendix for Non<br>-<br>GAAP to GAAP reconciliation.<br>4<br>QTR Overview<br>Financial<br>Highlights<br>4<br>QTR 2021¹<br>Balance<br>Sheet ($ in Millions)<br>Asset<br>Quality (%)<br>Profitability (%)<br>Net income was<br>$7.7<br>million for the quarter, or $<br>1.24<br>per diluted share, driven by<br>loan<br>and deposit growth.<br>Total revenues<br>of<br>$35.3<br>million, resulting in ROE of<br>19.15%<br>and ROA of<br>1.74% for 4Q 2021.<br>7<br>th<br>consecutive quarter of ROA exceeding 1.50% and<br>ROE exceeding 19.00%.<br>Loan growth for the quarter equaled<br>2.8%<br>(ex PPP and<br>residential held<br>-<br>for<br>-<br>sale),<br>and 19.5%<br>year over year.<br>Growth for the quarter was concentrated in<br>commercial loans<br>, SBA loans (non<br>-<br>PPP),<br>residential<br>real estate loans, and<br>originations from our Meridian<br>Equipment Finance leasing subsidiary.<br>Active COVID<br>-<br>19 loan<br>deferrals decreased<br>to<br>$2.4<br>million for the quarter, from<br>$24.9<br>million at the end<br>of the prior quarter.<br>Reserves/Loans<br>3<br>1.46%<br>NCOs (recoveries)/Loans<br>0.00%<br>Nonaccrual Loans/Loans<br>1.57% |
| --- |
| 6<br>Meridian<br>Corporation<br>SUMMARY INCOME STATEMENT<br>1)<br>A Non<br>-<br>GAAP measure. See<br>Non<br>-<br>GAAP reconciliation in the Appendix<br>Net interest income up $65 thousand<br>Negative provision due to continued<br>improvement in economic conditions<br>captured in ALLL, decline in COVID<br>-<br>19<br>loan deferrals, partially offset by<br>provisioning for growth and a $1.4<br>million specific reserve<br>Mortgage earnings down from decline in<br>gain on sale margin, decline in loans sold,<br>loan originations down 18%<br>(dollars in thousands)<br>Summary Income Statement<br>4Q 2021<br>3Q 2021<br>4Q 2020<br>Net Interest Income<br>16,322<br>$<br><br>16,257<br>$<br><br>15,018<br>$<br><br>Provision for Loan Loss<br>(222)<br><br><br>597<br><br><br>1,163<br><br><br>Non-Interest Income<br>17,086<br><br><br>22,122<br><br><br>29,945<br><br><br>Non-Interest Expense<br>23,737<br><br><br>25,481<br><br><br>31,923<br><br><br>Income before Income Taxes<br>9,893<br><br><br>12,301<br><br><br>11,877<br><br><br>Income Taxes<br>2,174<br><br><br>2,863<br><br><br>2,880<br><br><br>Net Income<br>7,719<br>$<br><br>9,438<br>$<br><br>8,997<br>$<br><br>Earnings per Share<br>4Q 2021<br>3Q 2021<br>4Q 2020<br> Basic Earnings per Share<br>1.29<br>$<br><br>1.56<br>$<br><br>1.50<br>$<br><br> Diluted Earnings per Share<br>1.24<br>$<br><br>1.52<br>$<br><br>1.48<br>$<br><br> Pre-tax, Pre-provision Income by Segment:<br>4Q 2021<br>3Q 2021<br>4Q 2020<br> Bank<br>6,829<br>$<br><br>8,896<br>$<br><br>6,294<br>$<br><br> Wealth<br>286<br><br><br>432<br><br><br>157<br><br><br> Mortgage<br>2,556<br><br><br>3,570<br><br><br>6,589<br><br><br> Total pre-tax, pre-provision income (1)<br>9,671<br>$<br><br>12,898<br>$<br><br>13,040<br>$<br><br>71%<br>3%<br>26%<br>Pre<br>-<br>tax, Pre<br>-<br>provision Income<br> Bank<br> Wealth<br> Mortgage<br>Bank<br>segment represents 71% of pre<br>-<br>tax, pre<br>-<br>provision income for 4Q<br>2021 |
| --- |
| 7<br>Meridian<br>Corporation<br>NET INTEREST INCOME GROWTH TREND<br>1) A<br>Non<br>-<br>GAAP measure. See Non<br>-<br>GAAP reconciliation in the Appendix<br>Net interest income for 4<br>Q<br>2021 increased<br>$<br>6<br>5<br>thousand, or<br>0.4%,<br>to $<br>16.3<br>million<br>from 3Q<br>2021. Growth<br>quarter over quarter<br>2021 was due largely to a<br>$123<br>thousand, or 6.0%, decrease in interest expense as the cost of deposits decreased 4 basis points.<br>3.67%<br>3.72%<br>3.61%<br>3.61%<br>3.49%<br>3.27%<br>3.26%<br>3.59%<br>3.72%<br>3.70%<br>3.83%<br>3.83%<br>3.48%<br>3.41%<br>3.47%<br>3.52%<br>3.64%<br>3.75%<br>3.73%<br>3.76%<br>2.90%<br>3.00%<br>3.10%<br>3.20%<br>3.30%<br>3.40%<br>3.50%<br>3.60%<br>3.70%<br>3.80%<br>3.90%<br> $-<br> $2,000<br> $4,000<br> $6,000<br> $8,000<br> $10,000<br> $12,000<br> $14,000<br> $16,000<br> $18,000<br>Q1 19<br>Q2 19<br>Q3 19<br>Q4 19<br>Q1 20<br>Q2 20<br>Q3 20<br>Q4 20<br>Q1 21<br>Q2 21<br>Q3 21<br>Q4 21<br>Net Interest Income<br>Net Interest Margin<br>Net Interest Margin (excl PPP impact) (1)<br>NIM excl PPP expanded<br>35 bps since Q2 2020 |
| --- |
| 8<br>Meridian<br>Corporation<br>NON<br>-<br>INTEREST INCOME<br>Non<br>-<br>Interest Income decreased $5.0 million or 22.8% from<br>3<br>Q2021<br>Mortgage banking net revenue (including fair value and<br>hedging impacts) decreased $3.5 million. Decrease driven by<br>lower levels of mortgage loan originations compared to 3Q<br>2021.<br>Net<br>revenue from the sale of SBA 7(a) loans was<br>down<br>$1.2<br>million as the value of loans sold<br>decreased<br>to<br>$15.6<br>million<br>in<br>4Q2021<br>compared to<br>$25.0<br>million in loans sold in the<br>3Q2021<br>..<br>Wealth management revenue increased<br>$38<br>thousand, or<br>3.1%,<br>due to the more favorable market conditions that<br>existed in<br>4Q<br>2021. AUM continued above $1 billion.<br>(Dollars in thousands)<br>4Q 2021<br>3Q 2021<br>Change<br>Mortgage banking income<br>(including FV changes)<br>13,148<br><br><br>16,666<br><br><br>(3,518)<br><br><br>Wealth management income<br>1,270<br><br><br>1,232<br><br><br>38<br><br><br>SBA income<br>1,475<br><br><br>2,688<br><br><br>(1,213)<br><br><br>Other income<br>1,193<br><br><br>1,536<br><br><br>(343)<br><br><br>Total<br>17,086<br>$<br><br>22,122<br>$<br><br>(5,036)<br>$<br><br>77%<br>7%<br>9%<br>7%<br>Quarter ended December 31, 2021<br>(% of total non<br>-<br>interest income)<br>Mortgage banking income (including FV changes)<br>Wealth management income<br>SBA income<br>Other income |
| --- |
| 9<br>Meridian<br>Corporation<br>NON<br>-<br>INTEREST EXPENSE<br>Non<br>-<br>Interest Expense decreased $1.7 million or 6.8% from 3Q2021<br>Total salaries and employee benefits expense was $17.0<br>million, a net decrease of $2.4 million or 12.5%, for the period.<br>Most of the decrease related to the mortgage segment, which<br>recognizes variable compensation based on originations.<br>Other expenses were up due to several items including<br>increases in insurance, promotional items/events, director<br>compensation, employee expenses, and other less significant<br>items.<br>Data processing and information technology expenses<br>increased $345 thousand due largely to growth.<br>(Dollars in thousands)<br>4Q 2021<br>3Q 2021<br>Change<br>Salaries and employee benefits<br>17,042<br>19,472<br>(2,430)<br>Occupancy and equipment<br>1,085<br>1,133<br>(48)<br>Professional fees<br>929<br>873<br>56<br>Data processing and information technology<br>1,351<br>1,006<br>345<br>Other<br>3,329<br>2,997<br>332<br>Total<br>$23,736<br>$25,481<br>($1,745)<br>72%<br>4%<br>4%<br>6%<br>14%<br>Quarter ended December 31, 2021<br>(% of total non<br>-<br>interest expense)<br>Salaries and employee benefits<br>Occupancy and equipment<br>Professional fees<br>Data processing and information technology<br>Other |
| --- |
| 10<br>Meridian<br>Corporation<br>ASSET QUALITY<br>December 31, 2021<br>1)<br>Excludes loans held for sale and, for 2Q 2020 to 4Q 2021, PPP loans. A<br>Non<br>-<br>GAAP measure. See Appendix for Non<br>-<br>GAAP to GAAP reconciliation.<br>2)<br>Includes loans held for sale and held for investment.<br>Nonaccrual Loans<br>/<br>Loans<br>2<br>(%)<br>4<br>Q 2021 Highlights:<br>Strong reserves to total loans; 4Q<br>2021 had a negative<br>$222 thousand provision for loan<br>losses<br>due to<br>improving economic factors<br>Nonaccrual loans to total loans<br>2<br>1.57% in 4Q<br>2021<br>COVID modifications declined to $2.4 million; one<br>relationship ($13.8 million) now classified as non<br>-<br>performing<br>Reserves / Loans<br>1<br>(%)<br>Net Charge<br>-<br>offs<br>/<br>Average Loans<br>2<br>(%)<br>0.39%<br>0.30%<br>0.46%<br>0.49%<br>0.48%<br>0.52%<br>1.34%<br>2018<br>2019<br>2020<br>1Q21<br>2Q21<br>3Q21<br>4Q21<br>0.03%<br>(0.06%)<br>0.00%<br>0.00%<br>0.01%<br>0.00%<br>0.00%<br>2018<br>2019<br>2020<br>1Q21<br>2Q21<br>3Q21<br>4Q21<br>0.97%<br>1.00%<br>1.65%<br>1.65%<br>1.58%<br>1.52%<br>1.46%<br>2018<br>2019<br>2020<br>1Q21<br>2Q21<br>3Q21<br>4Q21 |
| --- |
| 11<br>Meridian<br>Corporation<br>Update on COVID<br>-<br>19 Support to Customers<br>CARES Act Loan Deferrals<br>PPP Loan<br>Forgiveness at 1/31/22<br>Note<br>1:<br>One loan relationship for $13.8 million<br>within the advertising industry had CARES Act<br>payment deferrals that expired. During 4Q, the<br>loan was reclassified as a non<br>-<br>performing loan<br>relationship with a specific reserve of $1.4<br>million.<br>As of January 31,<br>2022<br>the remaining $2.4 million<br>of loan deferrals from Q4 2021 have expired<br>without further deferral or modification given to<br>borrowers.<br>81% of the PPP loans have been repaid in full<br>Included in the balance of Loans Not Yet Applied<br>for Forgiveness as of January 31,<br>2022:<br>$27.8 million (176 loans) are from round 2<br>and not<br>yet subject<br>to<br>repayment<br>$10.9 million of loans have been<br>submitted for repayment through the SBA<br>guarantee program.<br>$63 thousand<br>are delinquent<br>(dollars in millions)<br>PPP Loans<br>$ Value of Loans<br># of Loans<br>PPP Loans Forgiven<br>284.6<br>$<br><br>1,164<br><br><br>Loans Paid Off by Borrower<br>8.7<br>$<br><br>3<br><br><br>SBA Guarantee Payments<br>2.6<br>$<br><br>5<br><br><br>Total Loans Paid Back<br>295.9<br>$<br><br>1,172<br><br><br>Forgiveness Requested<br>31.2<br>$<br><br>88<br><br><br>Not Yet Applied for Forgiveness<br>38.7<br>$<br><br>191<br><br><br>Total Loans Yet to be Forgiven<br>70.0<br>$<br><br>279<br><br><br>Total PPP Loans<br>365.9<br>$<br><br>1,451<br><br><br>(dollars in millions)<br>Loan Deferrals by Industry<br>4Q 2021<br>3Q 2021<br>4Q 2020<br>Advertising<br>(Note 1)<br>-<br>$<br><br>13.8<br>$<br><br>-<br>$<br><br>Hotels<br>-<br><br><br>7.7<br><br><br>11.8<br>$<br><br>C&I Building Construction<br>-<br><br><br>1.0<br><br><br>10.1<br>$<br><br>Other<br>2.4<br><br><br>2.4<br><br><br>2.2<br>$<br><br>Total Loan Deferrals<br>2.4<br>$<br><br>24.9<br><br><br>24.2<br>$ |
| --- |
| 12<br>Meridian<br>Corporation<br>CAPITALIZATION AS OF<br>12/31/2021<br>All<br>c<br>orporate capital ratios<br>significantly exceed well<br>capitalized regulatory<br>requirements<br>Bank level<br>-<br>Community<br>Banking<br>Leverage Ratio<br>of 11.51% compared to<br>minimum of 8.5%<br>-<br>$51.3 M excess capital<br>4Q 2021 quarterly dividend<br>$0.20 per share; special $1.00<br>per share dividend announced<br>to be paid 2/21/22<br>Paid $1.00 per share special<br>dividend in 1Q 2021<br>24 thousand shares<br>repurchased in 4Q through<br>publicly announced plan<br> -<br> 20,000<br> 40,000<br> 60,000<br> 80,000<br> 100,000<br> 120,000<br> 140,000<br> 160,000<br> 180,000<br> 200,000<br> 220,000<br>Leverage<br>Com Equity<br>Tier 1<br>Total RBC<br>85,388<br>103,671<br>125,886<br>155,506<br>74,991<br>56,708<br>34,493<br>63,894<br>Capital Excess Over Regulatory Minimums ($000s)<br>Regulatory Minimum<br>Regulatory Excess<br>9.42%<br>10.83%<br>10.83%<br>14.81% |
| --- |
| 13<br>Meridian<br>Corporation<br>APPENDIX |
| --- |
| 14<br>Meridian<br>Corporation<br>HISTORICAL FINANCIAL HIGHLIGHTS<br>1)<br>Includes<br>loans held for sale and held for investment<br>..<br>2)<br>Includes<br>loans held for investment (excluding loans at fair value and PPP loans<br>).<br>3)<br>A Non<br>-<br>GAAP measure. See Appendix for Non<br>-<br>GAAP to GAAP reconciliation<br>..<br>Dollar Values in Thousands, Except Per Share Amounts<br>2018Y<br>2019Y<br>2020Y<br>1Q 2021<br>2Q 2021<br>3Q 2021<br>4Q 2021<br>Balance Sheet<br>Total Assets<br>$ 997,480<br>$ 1,150,019<br>1,720,197<br>$<br><br>1,743,977<br>$<br><br>1,709,010<br>$<br><br>1,762,445<br>$<br><br>1,713,443<br>$<br><br>Loans<br>1<br>875,801<br><br><br>998,414<br>1,513,963<br>$<br><br>1,524,799<br><br><br>1,495,098<br><br><br>1,496,666<br><br><br>1,467,339<br><br><br>Deposits<br>752,130<br>851,168<br>1,241,335<br>$<br><br>1,383,590<br><br><br>1,413,280<br><br><br>1,439,047<br><br><br>1,446,413<br><br><br>Gross Loans / Deposits<br>116.44%<br>117.30%<br>121.96%<br>110.21%<br>105.79%<br>104.00%<br>101.45%<br>Capital<br>Total Equity<br>$ 109,552<br>$ 120,695<br>141,622<br>$<br><br>143,505<br>$<br><br>152,885<br>$<br><br>158,416<br>$<br><br>165,360<br>$<br><br>Tangible Common Equity / Tangible Assets - HC<br>3<br>10.53%<br>10.11%<br>7.99%<br>7.99%<br>8.71%<br>8.76%<br>9.42%<br>Tangible Common Equity / Tangible Assets - Bank<br>3<br>10.53%<br>13.52%<br>10.25%<br>10.22%<br>10.92%<br>10.90%<br>11.54%<br>Tier 1 Leverage Ratio - HC<br>11.16%<br>10.55%<br>8.96%<br>8.86%<br>8.97%<br>9.28%<br>9.39%<br>Tier 1 Leverage Ratio - Bank<br>11.16%<br>14.08%<br>11.54%<br>11.34%<br>11.28%<br>11.55%<br>11.51%<br>Total Capital Ratio - HC<br>13.66%<br>16.10%<br>14.55%<br>14.05%<br>14.23%<br>14.72%<br>14.81%<br>Total Capital Ratio - Bank<br>13.66%<br>16.09%<br>14.54%<br>14.03%<br>14.18%<br>14.62%<br>14.63%<br>Commercial Real Estate Loans / Total RBC<br>183.80%<br>176.97%<br>172.15%<br>171.74%<br>174.09%<br>182.18%<br>167.20%<br>Earnings & Profitability<br>Net Income<br>$ 8,163<br>$ 10,481<br>26,438<br>$<br><br>10,170<br>$<br><br>8,258<br>$<br><br>9,438<br>$<br><br>7,719<br>$<br><br>ROA<br>0.90%<br>1.01%<br>1.78%<br>2.43%<br>1.92%<br>2.15%<br>1.74%<br>ROE<br>7.77%<br>9.09%<br>21.33%<br>30.06%<br>22.61%<br>24.07%<br>19.15%<br>Net Interest Margin (NIM)(TEY)<br>3.80%<br>3.65%<br>3.40%<br>3.72%<br>3.70%<br>3.83%<br>3.83%<br>NIM (TEY, excluding PPP loans and PPPLF borrowings)<br>3<br>3.80%<br>3.65%<br>3.47%<br>3.64%<br>3.75%<br>3.73%<br>3.76%<br>Non-Int Inc. / Avg. Assets<br>3.58%<br>3.19%<br>5.85%<br>6.47%<br>5.06%<br>5.04%<br>3.86%<br>Efficiency Ratio<br>81.4%<br>79.2%<br>68.5%<br>67.0%<br>70.7%<br>66.4%<br>71.1%<br>Asset Quality<br>Nonaccrual Loans / Loans<br>1<br>0.45%<br>0.34%<br>0.62%<br>0.56%<br>0.55%<br>0.61%<br>1.57%<br>NPAs / Assets<br>0.39%<br>0.30%<br>0.46%<br>0.49%<br>0.48%<br>0.52%<br>1.34%<br>Reserves / Loans<br>2, 3<br>0.97%<br>1.00%<br>1.65%<br>1.65%<br>1.58%<br>1.52%<br>1.46%<br>NCOs / Average Loans<br>0.03%<br>(0.06%)<br>0.00%<br>0.00%<br>0.01%<br>0.00%<br>0.00%<br>Yield and Cost<br>Yield on Earning Assets (TEY)<br>5.14%<br>5.30%<br>4.35%<br>4.29%<br>4.20%<br>4.31%<br>4.28%<br>Yield on Earning Assets (TEY), excluding PPP loans)<br>3<br>5.14%<br>5.30%<br>4.51%<br>4.26%<br>4.30%<br>4.24%<br>4.23%<br>Cost of Deposits<br>1.29%<br>1.67%<br>1.07%<br>0.49%<br>0.40%<br>0.37%<br>0.33%<br>Cost of Interest-Bearing Liabilities<br>1.69%<br>2.10%<br>1.18%<br>0.77%<br>0.67%<br>0.62%<br>0.60%<br>For the Quarter Ended<br>For the Year Ended |
| --- |
| 15<br>Meridian<br>Corporation<br>RECONCILIATION OF NON<br>-<br>GAAP FINANCIAL MEASURES<br>Tangible common equity to tangible<br>assets<br>Management uses the measure tangible common equity to tangible assets to assess our capital strength. We<br>believe that<br>this non<br>-<br>GAAP financial measure is useful to<br>investors because, by removing the impact of our preferred stock<br>, goodwill<br>and other intangible assets, it allows investors to more easily assess our capital adequacy.<br>This<br>non<br>-<br>GAAP financial<br>measure should not be considered a substitute for any regulatory capital ratios and may not be comparable<br>to other<br>similarly titled measures<br>used by other companies. The table below provides the non<br>-<br>GAAP reconciliation<br>for our<br>tangible common equity to tangible assets:<br>(dollars in thousands)<br>Meridian Corporation<br>2018Y<br>2019Y<br>2020 Y<br>1Q 2021<br>2Q 2021<br>3Q 2021<br>4Q 2021<br>Tangible common equity ratio:<br>Total stockholders' equity<br>109,552<br><br><br>120,695<br><br><br>141,622<br><br><br>143,505<br><br><br>152,885<br><br><br>158,416<br><br><br>165,360<br><br><br>Less:<br>Goodwill<br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>Intangible assets<br>4,147<br><br><br>3,874<br><br><br>3,601<br><br><br>3,533<br><br><br>3,481<br><br><br>3,430<br><br><br>3,379<br><br><br>Tangible common equity<br>104,507<br><br><br>115,922<br><br><br>137,122<br><br><br>139,073<br><br><br>148,505<br><br><br>154,087<br><br><br>161,082<br><br><br>Total assets<br>997,480<br><br><br>1,150,019<br><br><br>1,720,197<br><br><br>1,743,977<br><br><br>1,709,010<br><br><br>1,762,445<br><br><br>1,713,443<br><br><br>Less:<br>Goodwill<br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>Intangible assets<br>4,147<br><br><br>3,874<br><br><br>3,601<br><br><br>3,533<br><br><br>3,481<br><br><br>3,430<br><br><br>3,379<br><br><br>Tangible assets<br>992,434<br><br><br>1,145,246<br><br><br>1,715,697<br><br><br>1,739,545<br><br><br>1,704,630<br><br><br>1,758,116<br><br><br>1,709,166<br><br><br>Tangible common equity ratio<br>10.53%<br>10.12%<br>7.99%<br>7.99%<br>8.71%<br>8.76%<br>9.42%<br>(dollars in thousands)<br>Meridian Bank<br>2018Y<br>2019Y<br>2020 Y<br>1Q 2021<br>2Q 2021<br>3Q 2021<br>4Q 2021<br>Tangible common equity ratio:<br>Total stockholders' equity<br>109,552<br><br><br>159,643<br><br><br>180,288<br><br><br>182,171<br><br><br>190,477<br><br><br>196,009<br><br><br>201,486<br><br><br>Less:<br>Goodwill<br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>Intangible assets<br>4,147<br><br><br>3,874<br><br><br>3,601<br><br><br>3,533<br><br><br>3,481<br><br><br>3,430<br><br><br>3,379<br><br><br>Tangible common equity<br>104,507<br><br><br>154,870<br><br><br>175,788<br><br><br>177,739<br><br><br>186,097<br><br><br>191,680<br><br><br>197,208<br><br><br>Total assets<br>997,480<br><br><br>1,149,979<br><br><br>1,720,166<br><br><br>1,743,945<br><br><br>1,709,006<br><br><br>1,762,415<br><br><br>1,713,318<br><br><br>Less:<br>Goodwill<br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>899<br><br><br>Intangible assets<br>4,147<br><br><br>3,874<br><br><br>3,601<br><br><br>3,533<br><br><br>3,481<br><br><br>3,430<br><br><br>3,379<br><br><br>Tangible assets<br>992,434<br><br><br>1,145,206<br><br><br>1,715,666<br><br><br>1,739,513<br><br><br>1,704,626<br><br><br>1,758,086<br><br><br>1,709,040<br><br><br>Tangible common equity ratio<br>10.53%<br>13.52%<br>10.25%<br>10.22%<br>10.92%<br>10.90%<br>11.54% |
| --- |
| 16<br>Meridian<br>Corporation<br>RECONCILIATION OF NON<br>-<br>GAAP FINANCIAL MEASURES<br>Dollar Values in Thousands<br>4Q 2020<br>1Q 2021<br>2Q 2021<br>3Q 2021<br>4Q 2021<br>Reconciliation of Net Interest Margin (TEY, exluding PPP loans and PPPLF borrowings)<br>Net interest margin (TEY)<br>3.59%<br>3.72%<br>3.70%<br>3.83%<br>3.83%<br>Impact of PPP loans and PPPLF borrowings<br>(0.07%)<br>(0.08%)<br>0.05%<br>(0.10%)<br>(0.07%)<br>Net interest margin (TEY, excluding PPP loans and PPPLF borrowings)<br>3.52%<br>3.64%<br>3.75%<br>3.73%<br>3.76%<br>Reconciliation of Reserves / Loans<br>Allowance for loan losses / Total loans held for investment<br>1.38%<br>1.36%<br>1.35%<br>1.38%<br>1.35%<br>Less: Impact of loans held for investment - fair valued<br>0.00%<br>0.00%<br>0.01%<br>0.01%<br>0.02%<br>Less: Impact of PPP loans<br>0.27%<br>0.29%<br>0.22%<br>0.13%<br>0.09%<br>Allowance / Total loans held for investment (excl. loans at fair value and PPP loans)<br>1.65%<br>1.65%<br>1.58%<br>1.52%<br>1.46%<br>Reconciliation of Yield on Earning Assets<br>Yield on earning assets (TEY)<br>4.28%<br>4.29%<br>4.20%<br>4.31%<br>4.28%<br>Impact of PPP loans<br>(0.01%)<br>(0.03%)<br>0.10%<br>(0.07%)<br>(0.05%)<br>Yield on earning assets (TEY, excluding PPP loans)<br>4.27%<br>4.26%<br>4.30%<br>4.24%<br>4.23%<br>4Q 2020<br>1Q 2021<br>2Q 2021<br>3Q 2021<br>4Q 2021<br>Income before inocme tax expense<br>11,877<br><br><br>13,306<br><br><br>10,802<br><br><br>12,301<br><br><br>9,893<br><br><br>Add: Provision for loan losses<br>1,163<br><br><br>599<br><br><br>96<br><br><br>597<br><br><br>(222)<br><br><br>Pre-tax, pre-provision income<br>$13,040<br>$13,905<br>$10,898<br>$12,898<br>$9,671<br>Reconciliation of PPP Related Non-GAAP Measures<br>Reconciliation of Pre-tax, Pre-Provision Non-GAAP Measure<br>For the Quarter Ended<br>For the Quarter Ended |
| --- |