8-K
Meridian Corp (MRBK)
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 5, 2020
Date of Report (Date of earliest event reported)

(Exact name of registrant as specified in its charter)
| Pennsylvania | 000-55983 | 83-1561918 |
| --- | --- | --- | | (State or other jurisdiction<br> <br>of incorporation) | (Commission<br> <br>File Number) | (IRS Employer<br> <br>Ident. No.) |
| 9 Old Lincoln Highway, Malvern, Pennsylvania | 19355 |
| --- | --- | | (Address of principal executive offices) | (Zip Code) |
| \(484\) 568-5000<br> <br>Registrant’s telephone number, including area code |
| --- | | Not Applicable | | (Former name or former address, if changed since last report.) |
Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)
☐ Pre-commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))
☐ Pre-commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4 (c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b‑2 of the Securities Exchange Act of 1934 (17 CFR §240.12b‑2).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class: | Trading Symbol(s) | Name of each exchange on which registered: |
|---|---|---|
| Common Stock, $1 par value | MRBK | The NASDAQ Stock Market |
| Item 7.01 | Regulation FD Disclosure. | |
| --- | --- |
On February 5, 2020, Meridian Corporation (the “Company”) made available the presentation materials attached as Exhibit 99.1 to this Current Report on Form 8-K to be used in connection with presentations to investors and others. The presentation materials attached hereto as Exhibit 99.1 are incorporated into this Item 7.01 by reference.
The information furnished under Item 7.01 and Item 9.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of such section, nor will such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as may be expressly set forth by specific reference in such filing. The information in Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1 attached hereto, shall not be deemed an admission as to the materiality of any information in this Item 7.01 that is required to be disclosed solely to satisfy the requirements of Regulation FD.
| Item 9.01 | Financial Statements and Exhibits. |
| --- | --- |
(d) Exhibits.
| Exhibit<br> <br>No. | Description |
|---|---|
| 99.1 | Slide Presentation |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| | MERIDIAN CORPORATION | | |
| --- | --- | --- | --- | | Dated: February 5, 2020 | | | | | | By: | /s/ Denise Lindsay | | | | | | Denise Lindsay | | | | | Executive Vice President and Chief Financial Officer |
Exhibit 99.1
| Investor Presentation<br>February 2020 NASDAQ: MRBK<br>® |
|---|
| 2 Meridian<br>Corporation<br>Forward-Looking Statements<br>Meridian Corporation (the “Company”) may from time to time make written or oral “forward-looking statements,” including<br>statements contained in this presentation as well as the Company’s filings with the SEC, in its reports to stockholders and in other<br>communications by the Company, which are made in good faith by the Company pursuant to the “safe harbor” provisions of<br>Section 21E of the Securities Exchange Act of 1934, as amended (referred to as the “Exchange Act”).<br>These forward-looking statements include statements with respect to the Company’s strategies, goals, beliefs, expectations,<br>estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business.<br>Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,”<br>“believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement.<br>These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors<br>(some of which, in whole or in part, are beyond Meridian Corporation’s control). Numerous competitive, economic, regulatory,<br>legal and technological factors, among others, could cause the Company’s financial performance to differ materially from the<br>goals, plans, objectives, intentions and expectations expressed in such forward-looking statements. The Company cautions that<br>the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the<br>impact of any future events. All forward-looking statements and information set forth herein are based on management’s current<br>beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of<br>the assumptions, risks and uncertainties related to our business, you are encouraged to review the Company’s filings with the<br>Securities and Exchange Commission (including our Annual Report on Form 10-K for the year ended December 31, 2018) and,<br>for periods prior to the completion of the holding company reorganization, Meridian Bank’s filings with the FDIC, including<br>Meridian Bank’s Annual Report on Form 10-K for the year ended December 31, 2017, subsequently filed quarterly reports<br>on Form 10-Q and current reports on Form 8-K that update or provide information in addition to the information included in<br>the Form 10-K and Form 10-Q filings, if any. The Company does not undertake to update any forward-looking statement whether<br>written or oral, that may be made from time to time by the Company or by or on behalf of Meridian Bank.<br>Throughout this document, references to “we,” “us,” or “our” refer to the Company, Meridian Bank, its wholly owned Pennsylvania<br>– chartered commercial bank (“the “Bank”) and its other consolidated subsidiaries. |
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| 3 Meridian<br>Corporation<br>Company Highlights<br>Demonstrated organic growth engine in diversified loan segments, capitalizing on<br>market disruption in the Delaware Valley tri-state market<br>Financial services business model with significant noninterest income streams in<br>Meridian Mortgage, SBA Lending and Meridian Wealth Partners<br>Significant market opportunity in the 6-county greater Philadelphia metropolitan<br>market driven by a "branch-lite," technology-focused and high-touch banking strategy<br>Strong management team with long-tenured, in-market experience<br>Existing corporate infrastructure and key personnel in place to support future growth<br>in the Bank and to maximize profitability from additional capital inflow<br>Pristine asset quality<br>Attractive economic footprint, providing opportunities to grow non-interest bearing<br>deposits<br>Low commercial real estate (CRE) concentration allows for significant capacity for<br>growth<br>® ® |
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| 4 Meridian<br>Corporation<br>Company Snapshot<br>1) As of and for the quarter ended December 31, 2019, per January 27, 2020 press release<br>2) Includes loans held for sale and held for investment<br>3) Excludes loans at fair value<br>Overview Financial Highlights¹<br>Balance Sheet ($ in Millions)<br>Asset Quality (%)<br>MRQ Profitability (%)<br>Assets $1,151<br>Loans & Leases2 $998<br>Deposits $851<br>Equity $121<br>NPA’s/Assets 0.30%<br>Nonaccrual Loans/Loans 0.34%<br>Reserves/Loans3 1.00%<br>NCOs (recoveries)/Loans (0.03%)<br>ROAA 1.13%<br>ROAE 10.41%<br>Net Interest Margin 3.61%<br>Tangible Equity 11.20%<br>State-chartered commercial bank established in<br>July 2004 and headquartered in suburban Main<br>Line Philadelphia<br>Provides full service banking to businesses,<br>professionals and retail customers in the Delaware<br>Valley<br>– 6 full-service banking offices in PA (implementing a<br>successful one branch per county strategy)<br>– 9 mortgage loan production offices<br>Noninterest income businesses in Meridian<br>Mortgage, SBA Lending, and Meridian Wealth<br>Partners<br>Successful Meridian Mortgage division with<br>experienced core management team that has been<br>together for over 20 years<br>®<br>®<br>® |
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| 5 Meridian<br>Corporation<br>Current Meridian Franchise Footprint<br>Source: S&P Global Market Intelligence<br>Geographic Footprint<br>Meridian Corporation<br>Holding Company<br>Meridian Bank<br>100% Owned Subsidiary<br>Organizational Structure<br>Meridian Wealth<br>Partners<br>100% Owned Subsidiary<br>Apex Realty<br>100% Owned Subsidiary<br>Meridian Land<br>Settlement<br>Services<br>100% Owned Subsidiary<br>Headquarters<br>Branches (6)<br>Mortgage Locations (9) |
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| 6 Meridian<br>Corporation<br>Deep and Experienced Leadership<br>Meridian<br>Bank<br>Executive<br>Management<br>Chris Annas<br>Chairman of the Board & CEO<br>Founder, Chairman, President and Chief Executive Officer of the Bank since its opening in 2004<br>Held executive positions with various regional banks in the Delaware Valley since 1986<br>Over 35 years of banking experience in various commercial lending capacities<br>Denise Lindsay<br>EVP & CFO<br>Manages all corporate accounting functions and is responsible for asset-liability management, financial<br>reporting, tax planning and reporting, budgeting and investor relations<br>Over 25 years experience in bank financial management, including 12 years as Controller of a publicly<br>traded local community bank headquartered in PA<br>Certified Public Accountant, former Senior Accountant for KPMG, LLP and member of the Financial<br>Managers Society and PICPA<br>Joseph Cafarchio<br>EVP & CCO<br>Heads credit underwriting and administration<br>Over 35 years of experience in commercial lending in the region, including five years at the Federal<br>Reserve Bank of Philadelphia<br>Previously Chief Lending Officer from the Bank's inception until January 2017 when the Bank split the role<br>of Chief Lending Officer and Chief Credit Officer<br>Charles D. Kochka<br>EVP & CLO<br>Has served as leader of commercial and consumer lending at the Bank since 2017<br>Has more than 38 years experience in commercial lending in the Delaware Valley<br>Randy J. McGarry<br>EVP & CIO<br>Responsible for executing technology and operational solutions aligned with corporate strategy<br>Over 25 years of banking experience with expertise in IT strategy, technology architecture, network<br>infrastructure, core system conversions and merger & acquisitions<br>Member of the Greater Philadelphia Senior Executive Group and the Society for Information Management<br>Clarence Martindell<br>EVP & CRE Lending<br>In charge of growing and maintaining a strong commercial real estate loan portfolio, along with growing the<br>Bank’s title business and handling the disposition of all REO<br>Over 25 years of real estate lending experience.<br>Prior to joining the Bank, was the Director of Finance for Westrum Development Co., a regional<br>homebuilder. He also spent approximately 13 years working in banking at National Penn Bank primarily in<br>their commercial real estate division<br>T. Benjamin Marsho<br>EVP & Risk & Treasury<br>Oversees risk management, treasury, compliance and BSA / AML<br>Over 25 years of banking experience, including 5 years at the Office of Comptroller of the Currency, nearly<br>10 years as Controller at a publicly traded community bank and 5 years in investment and treasury<br>management of a $50 billion multinational bank |
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| 7 Meridian<br>Corporation<br>Overview of Business Lines<br>Commercial & Industrial Lending<br>– Lines of credit, term loans<br>– Owner-occupied commercial<br>mortgages<br>Commercial Real Estate<br>Lending<br>– Investor-owned commercial<br>mortgages<br>– Construction loans<br>– Land development loans<br>Consumer Lending<br>– Home equity loans / lines of<br>credit<br>– Student loans<br>Deposit and cash management<br>services<br>SBA Lending<br>– Highly experienced team<br>brought over from Beneficial<br>– Top 4 originator in Eastern<br>PA district<br>Core Banking Meridian Mortgage Wealth Management and<br>Advisory Services<br>Mortgage originations were<br>$603 million for 2019 and $637<br>million for 2018<br>Meridian Mortgage clients<br>include homeowners and small<br>scale investors<br>Approximately 94% of mortgage<br>loans are originated in the PA,<br>NJ and DE markets<br>– Majority of these loans<br>were for 1-4 family housing<br>– 99% of all loans originated<br>were sold<br>– Top lender in the Delaware<br>Valley<br>$704 Million AUM as of<br>December 31, 2019<br>Meridian Wealth Partners, LLC<br>is a registered investment<br>advisor and wholly-owned<br>subsidiary of the Bank<br>Provides a comprehensive array<br>of wealth management services<br>and trusted guidance<br>Clients include:<br>– Professionals<br>– High net worth individuals<br>– Company benefit plans<br>Synergies between the core<br>bank and wealth businesses are<br>building |
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| 8 Meridian<br>Corporation<br>$45.0 $52.9<br>$70.0<br>$101.4 $109.6<br>$120.7<br>2014 2015 2016 2017 2018 2019<br>$462.7 $490.6 $527.1<br>$627.1<br>$752.1<br>$851.2<br>2014 2015 2016 2017 2018 2019<br>$525.9 $584.4 $643.9<br>$729.7<br>$875.8<br>$998.4<br>2014 2015 2016 2017 2018 2019<br>$582.2 $663.3 $733.7<br>$856.0<br>$997.5<br>$1,151.0<br>2014 2015 2016 2017 2018 2019<br>Consistent Balance Sheet Growth<br>1) Includes loans held for sale and held for investment<br>Source: S&P Global Market Intelligence<br>Total Assets ($M) Loans and Leases1 ($M)<br>Total Deposits ($M) Consolidated Equity ($M) |
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| 9 Meridian<br>Corporation<br>Summary Income Statement1<br>1) Decrease in 2017 profitability due to a decrease in net operating profit from mortgage division ($1.8M); 2017 tax reform resulted in a one-time charge to tax<br>expense of $737K<br>Source: S&P Global Market Intelligence<br>Net Interest Income ($M) Non-interest Income ($M)<br>Non-interest Expense ($M) Net Income ($M)<br>$21.5 $23.4<br>$25.8<br>$28.9<br>$32.7<br>$36.3<br>2014 2015 2016 2017 2018 2019<br>$25.3<br>$36.1<br>$42.8<br>$36.7<br>$32.4 $33.1<br>2014 2015 2016 2017 2018 2019<br>$37.7<br>$48.6<br>$59.9 $57.7<br>$52.9 $55.0<br>2014 2015 2016 2017 2018 2019<br>$4.3<br>$6.2<br>$4.9<br>$3.0<br>$8.2<br>$10.5<br>2014 2015 2016 2017 2018 2019 |
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| 10 Meridian<br>Corporation<br>Pristine Asset Quality<br>1) Nonperforming assets defined as loans 90+ days past due and still accruing, nonaccrual loans and leases and OREO, excluding performing TDRs<br>2) Excludes loans at fair value<br>Source: S&P Global Market Intelligence<br>NPAs¹ / Assets (%) Reserves / Loans2 (%)<br>Nonaccrual Loans / Loans (%) Net Chargeoffs / Average Loans (%)<br>0.67%<br>0.63%<br>0.73%<br>0.42% 0.39%<br>0.30%<br>2014 2015 2016 2017 2018 2019<br>1.04%<br>1.06%<br>0.90%<br>0.96% 0.97%<br>1.00%<br>2014 2015 2016 2017 2018 2019<br>0.66%<br>0.68%<br>0.83%<br>0.43%<br>0.45%<br>0.34%<br>2014 2015 2016 2017 2018 2019<br>0.34%<br>0.21%<br>0.17%<br>0.13%<br>0.03% (0.06)<br>2014 2015 2016 2017 2018 2019 |
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| 11 Meridian<br>Corporation<br>$998.4 million total gross loans and<br>leases as of December 31, 20191<br>– 13.7% CAGR since December 31,<br>2014<br>CRE concentration of 177.1% as of<br>December 31, 2019<br>High-yielding loan mix<br>– Average yield on loans of 5.51% for<br>2019<br>Balanced Loan Portfolio<br>December 31, 2019<br>1) Total loans held for investment and held for sale, net of fees and costs<br>Total Loans: $998.4 Million<br>8% 9%<br>37% 16%<br>30%<br>HELOC/Consumer Residential<br>CRE C&D<br>C&I |
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| 12 Meridian<br>Corporation<br>Commercial Loans by Industry<br>December 31, 2019<br>Note: balance total does not include consumer loans, HELoC and 1st mortgages<br>Source: Company documents<br>Residential and Commercial<br>Construction<br>16.7%<br>Residential Real<br>Estate<br>Investment<br>16.2%<br>Commercial<br>Real Estate<br>Investment<br>9.4%<br>Shared National<br>Credits<br>8.8%<br>Manufacturing<br>8.1%<br>Other<br>6.0%<br>Scientific and<br>Technical<br>Services<br>5.6%<br>Construction<br>Related<br>5.6%<br>Fin, Ins & RE<br>Services<br>4.9%<br>Wholesale Trade<br>4.6%<br>Health Care and<br>Social Assistance<br>3.9%<br>Leisure<br>3.6%<br>Retail Trade<br>3.1%<br>Administration<br>and Support<br>2.3%<br>Real Estate and<br>Rental Lease<br>1.1% |
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| 13 Meridian<br>Corporation<br>$851.2 million total deposits as of<br>December 31, 2019<br>– 13.0% CAGR for total deposits since<br>December 31, 2014<br>– 28.1% CAGR for noninterest-bearing<br>deposits since December 31, 2014<br>Diversified deposit mix<br>– 16.4% noninterest-bearing deposits /<br>deposits<br>– Average cost of total deposits of<br>1.67% for 2019<br>Deposit Composition<br>December 31, 2019<br>Source: S&P Global Market Intelligence, company documents<br>Total Deposits: $851.2 Million<br>27%<br>36%<br>28%<br>9%<br>Transaction MMDA/savings<br>Retail certificates Jumbo certificates |
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| 14 Meridian<br>Corporation<br>Historical Financial Highlights |
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