Meridian Corporation Reports First Quarter 2025 Results and Announces a Quarterly Dividend of $0.125 per Common Share

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Meridian's Q1 showed mixed results: PPNR up 30% YoY despite earnings decline, with strong deposit/loan growth offset by SBA credit challenges.

Meridian 's first quarter results reveal a bank experiencing operational growth amid credit quality challenges. While net income declined to $2.4 million ($0.21/share) from $5.6 million in Q4 2024 and $2.7 million in Q1 2024, the underlying business shows resilience. The 30.2% year-over-year increase in pre-provision net revenue to $8.4 million reflects solid core operations despite headline earnings pressure.

The net interest margin improved to 3.46%, continuing a four-quarter positive trend that demonstrates effective balance sheet management in a challenging rate environment. This margin improvement, coupled with strong loan growth of 12% annualized (excluding leases) and robust deposit growth of 6% (with non-interest-bearing deposits surging 34%), indicates healthy business expansion.

The primary earnings pressure stems from credit quality deterioration, with provision for credit losses increasing to $5.2 million, up $1.6 million quarter-over-quarter. Non-performing loans rose by $7.1 million to $52.2 million, with SBA loans comprising $19.1 million of this total. Management attributes these issues to interest rate impacts on SBA borrowers rather than fundamental underwriting problems.

The wealth management division continues to perform well, contributing $726,000 in pre-tax income, while the mortgage segment faces challenges with decreased volume and declining loan officer headcount. The 9.30% Community Bank Leverage Ratio provides adequate capital cushion above regulatory requirements despite recent credit challenges.

The maintained quarterly dividend of $0.125 per share signals management's confidence in the bank's financial position despite near-term headwinds. The divergence between growing PPNR and declining net income underscores the temporary nature of current credit challenges versus the improving core banking business.

04/25/2025 - 01:31 PM

MALVERN, Pa., April 25, 2025 (GLOBE NEWSWIRE) -- Meridian Corporation (Nasdaq: MRBK) today reported:

	Three Months Ended
(Dollars in thousands, except per share data)((Unaudited)	March 31, 2025		December 31, 2024		March 31, 2024
Income:
Net income	$	2,399	$	5,600	$	2,676
Diluted earnings per common share	$	0.21	$	0.49	$	0.24
Pre-provision net revenue (PPNR) ⁽¹⁾	$	8,357	$	11,167	$	6,419
(1) See Non-GAAP reconciliation in the Appendix

Net income for the quarter ended March 31, 2025 was $2.4 million, or $0.21 per diluted share.
Pre-provision net revenue¹ for the quarter was $8.4 million, up $1.9 million or 30.2% from 1Q 2024.
Net interest margin was 3.46% for the first quarter of 2025, with a loan yield of 7.19%.
Return on average assets and return on average equity for the first quarter of 2025 were 0.40% and 5.57%, respectively.
Total assets at March 31, 2025 were $2.5 billion, compared to $2.4 billion at December 31, 2024 and $2.3 billion at March 31, 2024.
Commercial loans, excluding leases, increased $49.5 million, or 3% for the quarter.
First quarter deposit growth was $123.4 million, or 6%.
Non-interest-bearing deposits were up $82.6 million or 34%, quarter over quarter.
On April 24, 2025, the Board of Directors declared a quarterly cash dividend of $0.125 per common share, payable May 19, 2025 to shareholders of record as of May 12, 2025.

Christopher J. Annas, Chairman and CEO commented:

Meridian’s first quarter 2025 earnings of $2.4 million were slightly below the first quarter 2024 net income of $2.7 million however PPNR was up 30%, reflecting overall healthy growth in our business units and good expense control. Our earnings were negatively affected by higher provisioning resulting mainly from distressed SBA loans, which have been impacted by the dramatic rate rise. The remediation process for SBA loans is lengthy due to procedural requirements, which we follow diligently to assure the government guaranty, but we are making progress. On a positive note, our net interest margin was 3.46% and has shown consistent improvement over the last four quarters.

Loan growth in the first quarter was 12% annualized (minus expected lease paydowns) and all commercial groups contributed. The Delaware Valley region is plagued by a lack of homes for sale, so construction and other residential building is in demand. Our commercial/industrial lending has benefited from disruption in a recent local bank combination, from where we hired a senior lender with a deep list of contacts throughout the region. We expect many opportunities from this individual and his future hires.

Meridian Wealth Partners continued its strong performance with pre-tax income of $726 thousand for the quarter. A slight increase in assets under management combined with overall better fee percentages contributed to the gain. We are poised for better growth in this segment as our expanded loan customer base provides referral business, and with the recent hiring of a senior wealth professional to help focus on other opportunities.

The mortgage group had a larger pre-tax loss in 1Q25 vs 1Q24, mainly due to lower volume and a lesser loan officer count. The first quarter is seasonally weaker, but we are encouraged by the forecast for greater home inventory in both our Delaware Valley and Maryland markets. That has been a much bigger factor for loan originations than mortgage rates.

Our solid growth in PPNR has enabled us to manage the spike in non-performing loans, as we work intensely to remediate these credits. The growth in first quarter loan volume and expansion in net interest margin should continue to help drive further improvement in profitability.

Select Condensed Financial Information

	As of or for the three months ended (Unaudited)
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
	(Dollars in thousands, except per share data)
Income:
Net income	$	2,399		$	5,600		$	4,743		$	3,326		$	2,676
Basic earnings per common share		0.21			0.50			0.43			0.30			0.24
Diluted earnings per common share		0.21			0.49			0.42			0.30			0.24
Net interest income		19,776			19,299			18,242			16,846			16,609

Balance Sheet:
Total assets	$	2,528,586		$	2,385,867		$	2,387,721		$	2,351,584		$	2,292,923
Loans, net of fees and costs		2,071,675			2,030,437			2,008,396			1,988,535			1,956,315
Total deposits		2,128,742			2,005,368			1,978,927			1,915,436			1,900,696
Non-interest bearing deposits		323,485			240,858			237,207			224,040			220,581
Stockholders' equity		173,266			171,522			167,450			162,382			159,936

Balance Sheet Average Balances:
Total assets	$	2,420,571		$	2,434,270		$	2,373,261		$	2,319,295		$	2,269,047
Total interest earning assets		2,330,224			2,342,651			2,277,523			2,222,177			2,173,212
Loans, net of fees and costs		2,039,676			2,029,739			1,997,574			1,972,740			1,944,187
Total deposits		2,036,208			2,043,505			1,960,145			1,919,954			1,823,523
Non-interest bearing deposits		244,161			259,118			246,310			229,040			233,255
Stockholders' equity		174,734			171,214			165,309			162,119			159,822

Performance Ratios (Annualized):
Return on average assets		0.40	%		0.92	%		0.80	%		0.58	%		0.47	%
Return on average equity		5.57	%		13.01	%		11.41	%		8.25	%		6.73	%

Income Statement - First Quarter 2025 Compared to Fourth Quarter 2024

First quarter net income decreased $3.2 million, or 57.2%, to $2.4 million due to decreased non-interest income as the prior quarter included a $4.0 million gain on sale of MSR's and a $317 thousand gain on sale of OREO, partially offset by a $1.0 million charge for early lease termination. The first quarter provision for credit losses increased over the prior quarter by $1.6 million. Net interest income increased $477 thousand and non-interest expenses decreased $2.7 million. Detailed explanations of the major categories of income and expense follow below.

Net Interest income

Interest income decreased $869 thousand quarter-over-quarter on a tax equivalent basis, driven by both two less days in the period as well as a lower level of average earning assets, which decreased by $12.4 million. On a rate basis, the yield on earnings assets increased 2 basis points.

Average total loans, excluding residential loans for sale, increased $10.0 million. The largest drivers of this increase were commercial, commercial real estate, and small business loans which on a combined basis increased $21.2 million on average, partially offset by a decrease in average leases of $10.6 million. Home equity, residential real estate, consumer and other loans held in portfolio decreased on a combined basis $602 thousand on average.

Total interest expense decreased $1.3 million, quarter-over-quarter, also driven by two fewer days in the period and a lower volume of time deposits and borrowings. On a rate basis, all deposit types experienced a decrease in the cost, with the overall cost of deposits dropping 21 basis points. Interest expense on total deposits decreased $1.5 million and interest expense on borrowings decreased $139 thousand. During the period, interest-bearing checking accounts and money market accounts increased $9.9 million and $37.9 million on average, respectively, while time deposits decreased $40.2 million on average. Borrowings decreased $6.7 million on average.

Overall the net interest margin increased 17 basis points to 3.46% as the cost of funds declined and the yield on earning assets increased slightly.

Provision for Credit Losses

The overall provision for credit losses for the first quarter increased $1.6 million to $5.2 million, from $3.6 million in the fourth quarter. The first quarter provision increased due to an increase of $7.1 million in non-performing loans which led to an increase of $2.3 million in specific reserves on such loans. SBA loans make up $6.9 million of these additional non-performing loans, of which $3.8 million are guaranteed by the SBA. The increase in provision was also partially impacted by unfavorable changes in certain macro-economic factors used in the model due to current economic and market uncertainty.

Non-interest income

The following table presents the components of non-interest income for the periods indicated:

	Three Months Ended
(Dollars in thousands)	March 31, 2025			December 31, 2024			$ Change			% Change
Mortgage banking income	$	3,393		$	5,516		$	(2,123	)	(38.5)%
Wealth management income		1,535			1,527			8		0.5	%
SBA loan income		748			1,143			(395	)	(34.6)%
Earnings on investment in life insurance		222			224			(2	)	(0.9)%
Net (loss) gain on sale of MSRs		(52	)		3,992			(4,044	)	(101.3)%
Gain on sale of OREO		—			317			(317	)	(100.0)%
Net change in the fair value of derivative instruments		149			(146	)		295		(202.1)%
Net change in the fair value of loans held-for-sale		102			(163	)		265		(162.6)%
Net change in the fair value of loans held-for-investment		170			(552	)		722		(130.8)%
Net (loss) gain on hedging activity		21			192			(171	)	(89.1)%
Other		1,036			1,229			(193	)	(15.7)%
Total non-interest income	$	7,324		$	13,279		$	(5,955	)	(44.8)%

Total non-interest income decreased $6.0 million, or 44.8%, quarter-over-quarter largely due to recognizing a gain on sale of MSRs of $4.0 million in the prior quarter, combined with a $2.1 million decline in mortgage banking income, and a change in gains of $171 thousand in hedging activity. These declines in income were partially offset by favorable derivative and loan related fair value changes. Mortgage loan sales decreased $68.1 million or 31.5% quarter over quarter driving lower gain on sale income in addition to a lower overall margin, leading to the lower level of mortgage banking income.

SBA loan income decreased $395 thousand due to a lower level of SBA loan sales. SBA loans sold for the quarter-ended March 31, 2025 totaled $12.1 million, down $7.8 million, or 39.1%, compared to the quarter-ended December 31, 2024. The gross margin on SBA sales was 8.7% for the quarter, up from 7.5% for the previous quarter.

Non-interest expense

The following table presents the components of non-interest expense for the periods indicated:

	Three Months Ended
(Dollars in thousands)	March 31, 2025		December 31, 2024		$ Change			% Change
Salaries and employee benefits	$	11,385	$	12,429	$	(1,044	)	(8.4)%
Occupancy and equipment		1,338		2,270		(932	)	(41.1)%
Professional fees		763		1,134		(371	)	(32.7)%
Data processing and software		1,479		1,553		(74	)	(4.8)%
Advertising and promotion		779		839		(60	)	(7.2)%
Pennsylvania bank shares tax		269		243		26		10.7	%
Other		2,730		2,943		(213	)	(7.2)%
Total non-interest expense	$	18,743	$	21,411	$	(2,668	)	(12.5)%

Overall salaries and benefits decreased $1.0 million. Bank and wealth segments combined decreased $245 thousand, while the mortgage segment decreased $799 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 $63.5 million from the prior quarter. Occupancy and equipment expense decreased $932 thousand, net, due to fees, credits and other disposal costs for the early termination of the Blue Bell lease that occurred in the prior quarter. Professional fees decreased $371 thousand over the prior period mainly due to the results of cost control efforts on certain internal audit fees, legal fees and consulting fees, while other non-interest expense decreased $213 thousand due to a decline in certain business development costs, other loan related fees, and OREO related expenses.

Balance Sheet - March 31, 2025 Compared to December 31, 2024

Total assets increased $142.7 million, or 6.0%, to $2.5 billion as of March 31, 2025 from $2.4 billion at December 31, 2024. Interest-earning cash increased $91.8 million, or 419.7%, to $113.6 million as of March 31, 2025 from December 31, 2024, as a temporary deposit of $103 million from a long standing customer was on hand for several weeks. In addition, loan growth contributed to the overall increase in total assets over this period.

Portfolio loan growth was $42.0 million, or 2.1% quarter-over-quarter. The portfolio growth was generated from commercial mortgage loans which increased $21.2 million, or 2.6%, construction loans which increased $18.3 million, or 7.1%, small business loans which increased $5.3 million, or 3.4%, and commercial & industrial loans which increased $4.6 million, or 1.3%. Lease financings decreased $9.2 million, or 12.1% from December 31, 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 $123.4 million, or 6.2% quarter-over-quarter, led by non-interest bearing deposit growth of $82.6 million. Non-interest bearing deposits benefited from a late quarter deposit of $103 million from a long standing customer that sold a business. This deposit was on hand for several weeks. Money market accounts and savings accounts also increased a combined $34.3 million, while interest bearing demand deposits increased $19.6 million, and time deposits decreased $13.1 million from largely wholesale efforts. Overall borrowings increased $15.1 million, or 12.1% quarter-over-quarter.

Total stockholders’ equity increased by $1.7 million from December 31, 2024, to $173.3 million as of March 31, 2025. Changes to equity for the current quarter included net income of $2.4 million, less dividends paid of $1.4 million, offset by a decrease of $529 thousand in other comprehensive income. The Community Bank Leverage Ratio for the Bank was 9.30% at March 31, 2025.

Asset Quality Summary

Non-performing loans increased $7.1 million to $52.2 million at March 31, 2025 compared to $45.1 million at December 31, 2024. Included in non-performing loans are $19.1 million of SBA loans of which $9.9 million, or 53%, are guaranteed by the SBA. The SBA portfolio was subject to the Fed's rapid rate increase and $15.0 million, or 80% of these non-performing loans originated in 2020-2021 where their rates rose over 500 basis points.

The ratio of non-performing loans to total loans increased 30 bps to 2.49% as of March 31, 2025, from 2.19% as of December 31, 2024. The increase in non-performing loans was led by a $6.9 million increase in non-performing SBA loans, and $881 thousand in leases.

Net charge-offs as a % of total average loans of 0.14% for the quarter ended March 31, 2025, decreased from 0.34% for the quarter ended December 31, 2024. Net charge-offs decreased to $2.8 million for the quarter ended March 31, 2025, compared to net charge-offs of $7.1 million for the quarter ended December 31, 2024. First quarter charge-offs consisted of $851 thousand on a protracted commercial advertising loan relationship, $738 thousand related to construction loans, $553 thousand of small ticket equipment leases which are charged-off after becoming more than 120 days past due, and $277 thousand in SBA loans. Overall there were recoveries of $175 thousand, largely related to leases and SBA loans.

The ratio of allowance for credit losses to total loans held for investment was 1.01% as of March 31, 2025, an increase from the coverage ratio of 0.91% as of December 31, 2024 due largely to the increase in specific reserves on non-performing loans in the quarter discussed above. As of March 31, 2025 there were specific reserves of $5.0 million against individually evaluated loans, an increase of $2.3 million from $2.7 million in specific reserves as of December 31, 2024. The specific reserve increase over the prior quarter was led by a $1.6 million increase in specific reserves on SBA loans, as well as increases of $535 thousand in commercial real estate loan specifics reserves and a $174 thousand increase in commercial loan specific reserves.

About Meridian Corporation

Meridian Bank, the wholly owned subsidiary of Meridian Corporation, is an innovative community bank serving Pennsylvania, New Jersey, Delaware and Maryland. Through its 17 offices, including banking branches and mortgage locations, Meridian offers a full suite of financial products and services. Meridian specializes in business and industrial lending, retail and commercial real estate lending, electronic payments, and wealth management solutions through Meridian Wealth Partners. Meridian also offers a broad menu of high-yield depository products supported by robust online and mobile access. For additional information, visit our website at www.meridianbanker.com. Member FDIC.

“Safe Harbor” Statement

In addition to historical information, this press release may contain “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements with respect to Meridian Corporation’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Meridian Corporation’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation, credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; increased competitive pressures; changes in spreads on interest-earning assets and interest-bearing liabilities; changes in general economic conditions and conditions within the securities markets; escalating tariff and other trade policies and the resulting impacts on market volatility and global trade; 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, 2024 and subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Meridian Corporation does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Meridian Corporation or by or on behalf of Meridian Bank.

MERIDIAN CORPORATION AND SUBSIDIARIES FINANCIAL RATIOS (Unaudited) (Dollar amounts and shares in thousands, except per share amounts)

	Three Months Ended
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Earnings and Per Share Data:
Net income	$	2,399		$	5,600		$	4,743		$	3,326		$	2,676
Basic earnings per common share	$	0.21		$	0.50		$	0.43		$	0.30		$	0.24
Diluted earnings per common share	$	0.21		$	0.49		$	0.42		$	0.30		$	0.24
Common shares outstanding		11,285			11,240			11,229			11,191			11,186

Performance Ratios:
Return on average assets⁽²⁾		0.40	%		0.92	%		0.80	%		0.58	%		0.47	%
Return on average equity ⁽²⁾		5.57			13.01			11.41			8.25			6.73
Net interest margin (tax-equivalent) ⁽²⁾		3.46			3.29			3.20			3.06			3.09
Yield on earning assets (tax-equivalent) ⁽²⁾		6.83			6.81			7.06			6.98			6.90
Cost of funds ⁽²⁾		3.56			3.71			4.05			4.10			4.00
Efficiency ratio		69.16	%		65.72	%		70.67	%		72.89	%		73.90	%

Asset Quality Ratios:
Net charge-offs (recoveries) to average loans		0.14	%		0.34	%		0.11	%		0.20	%		0.12	%
Non-performing loans to total loans		2.49			2.19			2.20			1.84			1.93
Non-performing assets to total assets		2.07			1.90			1.97			1.68			1.74
Allowance for credit losses to:
Total loans and other finance receivables		1.01			0.91			1.09			1.09			1.18
Total loans and other finance receivables (excluding loans at fair value) ⁽¹⁾		1.01			0.91			1.10			1.10			1.19
Non-performing loans		39.90	%		40.86	%		48.66	%		57.66	%		60.59	%

Capital Ratios:
Book value per common share	$	15.35		$	15.26		$	14.91		$	14.51		$	14.30
Tangible book value per common share	$	15.03		$	14.93		$	14.58		$	14.17		$	13.96
Total equity/Total assets		6.85	%		7.19	%		7.01	%		6.91	%		6.98	%
Tangible common equity/Tangible assets - Corporation ⁽¹⁾		6.72			7.05			6.87			6.76			6.82
Tangible common equity/Tangible assets - Bank ⁽¹⁾		8.61			9.06			8.95			8.85			8.93
Tier 1 leverage ratio - Bank		9.30			9.21			9.32			9.33			9.42
Common tier 1 risk-based capital ratio - Bank		10.15			10.33			10.17			9.84			9.87
Tier 1 risk-based capital ratio - Bank		10.15			10.33			10.17			9.84			9.87
Total risk-based capital ratio - Bank		11.14	%		11.20	%		11.22	%		10.84	%		10.95	%
(1) See Non-GAAP reconciliation in the Appendix
(2) Annualized

MERIDIAN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited) (Dollar amounts and shares in thousands, except per share amounts)

	Three Months Ended
	March 31, 2025			December 31, 2024			March 31, 2024
Interest income:
Loans and other finance receivables, including fees	$	36,549		$	37,229		$	35,339
Securities - taxable		1,693			1,684			1,251
Securities - tax-exempt		313			314			325
Cash and cash equivalents		613			801			300
Total interest income		39,168			40,028			37,215
Interest expense:
Deposits		16,868			18,341			17,392
Borrowings and subordinated debentures		2,524			2,388			3,214
Total interest expense		19,392			20,729			20,606
Net interest income		19,776			19,299			16,609
Provision for credit losses		5,212			3,572			2,866
Net interest income after provision for credit losses		14,564			15,727			13,743
Non-interest income:
Mortgage banking income		3,393			5,516			3,634
Wealth management income		1,535			1,527			1,317
SBA loan income		748			1,143			986
Earnings on investment in life insurance		222			224			207
Net (loss) gain on sale of MSRs		(52	)		3,992			—
Gain on sale of OREO		—			317			—
Net change in the fair value of derivative instruments		149			(146	)		75
Net change in the fair value of loans held-for-sale		102			(163	)		(2	)
Net change in the fair value of loans held-for-investment		170			(552	)		(175	)
Net (loss) gain on hedging activity		21			192			(19	)
Other		1,036			1,229			1,961
Total non-interest income		7,324			13,279			7,984
Non-interest expense:
Salaries and employee benefits		11,385			12,429			10,573
Occupancy and equipment		1,338			2,270			1,233
Professional fees		763			1,134			1,498
Data processing and software		1,479			1,553			1,532
Advertising and promotion		779			839			748
Pennsylvania bank shares tax		269			243			274
Other		2,730			2,943			2,316
Total non-interest expense		18,743			21,411			18,174
Income before income taxes		3,145			7,595			3,553
Income tax expense		746			1,995			877
Net income	$	2,399		$	5,600		$	2,676

Basic earnings per common share	$	0.21		$	0.50		$	0.24
Diluted earnings per common share	$	0.21		$	0.49		$	0.24

Basic weighted average shares outstanding		11,205			11,158			11,088
Diluted weighted average shares outstanding		11,446			11,375			11,201

MERIDIAN CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited) (Dollar amounts and shares in thousands, except per share amounts)

	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Assets:
Cash and due from banks	$	16,976		$	5,598		$	12,542		$	8,457		$	8,935
Interest-bearing deposits at other banks		113,620			21,864			19,805			15,601			14,092
Federal funds sold		629			—			—			—			—
Cash and cash equivalents		131,225			27,462			32,347			24,058			23,027
Securities available-for-sale, at fair value		185,221			174,304			171,568			159,141			150,996
Securities held-to-maturity, at amortized cost		32,720			33,771			33,833			35,089			35,157
Equity investments		2,126			2,086			2,166			2,088			2,092
Mortgage loans held for sale, at fair value		28,047			32,413			46,602			54,278			29,124
Loans and other finance receivables, net of fees and costs		2,071,675			2,030,437			2,008,396			1,988,535			1,956,315
Allowance for credit losses		(20,827	)		(18,438	)		(21,965	)		(21,703	)		(23,171	)
Loans and other finance receivables, net of the allowance for credit losses		2,050,848			2,011,999			1,986,431			1,966,832			1,933,144
Restricted investment in bank stock		8,369			7,753			8,542			10,044			8,560
Bank premises and equipment, net		12,028			12,151			12,807			13,114			13,451
Bank owned life insurance		29,935			29,712			29,489			29,267			29,051
Accrued interest receivable		10,345			9,958			10,012			9,973			9,864
Other real estate owned		159			159			1,862			1,862			1,703
Deferred income taxes		5,136			4,669			3,537			3,950			4,339
Servicing assets		4,284			4,382			4,364			11,341			11,573
Servicing assets held for sale		—			—			6,609			—			—
Goodwill		899			899			899			899			899
Intangible assets		2,716			2,767			2,818			2,869			2,920
Other assets		24,528			31,382			33,835			26,779			37,023
Total assets	$	2,528,586		$	2,385,867		$	2,387,721		$	2,351,584		$	2,292,923

Liabilities:
Deposits:
Non-interest bearing	$	323,485		$	240,858		$	237,207		$	224,040		$	220,581
Interest bearing
Interest checking		161,055			141,439			133,429			130,062			121,204
Money market and savings deposits		947,795			913,536			822,837			787,479			797,525
Time deposits		696,407			709,535			785,454			773,855			761,386
Total interest-bearing deposits		1,805,257			1,764,510			1,741,720			1,691,396			1,680,115
Total deposits		2,128,742			2,005,368			1,978,927			1,915,436			1,900,696
Borrowings		139,590			124,471			144,880			187,260			145,803
Subordinated debentures		49,761			49,743			49,928			49,897			49,867
Accrued interest payable		7,404			6,860			7,017			7,709			8,350
Other liabilities		29,823			27,903			39,519			28,900			28,271
Total liabilities		2,355,320			2,214,345			2,220,271			2,189,202			2,132,987

Stockholders’ equity:
Common stock		13,288			13,243			13,232			13,194			13,189
Surplus		81,724			81,545			81,002			80,639			80,487
Treasury stock		(26,079	)		(26,079	)		(26,079	)		(26,079	)		(26,079	)
Unearned common stock held by employee stock ownership plan		(1,006	)		(1,006	)		(1,204	)		(1,204	)		(1,204	)
Retained earnings		112,952			111,961			107,765			104,420			102,492
Accumulated other comprehensive loss		(7,613	)		(8,142	)		(7,266	)		(8,588	)		(8,949	)
Total stockholders’ equity		173,266			171,522			167,450			162,382			159,936
Total liabilities and stockholders’ equity	$	2,528,586		$	2,385,867		$	2,387,721		$	2,351,584		$	2,292,923

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
	March 31, 2025		December 31, 2024		September 30, 2024		June 30, 2024		March 31, 2024
Interest income	$	39,168	$	40,028	$	40,319	$	38,465	$	37,215
Interest expense		19,392		20,729		22,077		21,619		20,606
Net interest income		19,776		19,299		18,242		16,846		16,609
Provision for credit losses		5,212		3,572		2,282		2,680		2,866
Non-interest income		7,324		13,279		10,831		9,244		7,984
Non-interest expense		18,743		21,411		20,546		19,018		18,174
Income before income tax expense		3,145		7,595		6,245		4,392		3,553
Income tax expense		746		1,995		1,502		1,066		877
Net Income	$	2,399	$	5,600	$	4,743	$	3,326	$	2,676

Basic weighted average shares outstanding		11,205		11,158		11,110		11,096		11,088
Basic earnings per common share	$	0.21	$	0.50	$	0.43	$	0.30	$	0.24

Diluted weighted average shares outstanding		11,446		11,375		11,234		11,150		11,201
Diluted earnings per common share	$	0.21	$	0.49	$	0.42	$	0.30	$	0.24

	Segment Information
	Three Months Ended March 31, 2025												Three Months Ended March 31, 2024
(dollars in thousands)	Bank			Wealth			Mortgage			Total			Bank			Wealth			Mortgage			Total
Net interest income	$	19,706		$	9		$	61		$	19,776		$	16,592		$	(6	)	$	23		$	16,609
Provision for credit losses		5,212			—			—			5,212			2,866			—			—			2,866
Net interest income after provision		14,494			9			61			14,564			13,726			(6	)		23			13,743
Non-interest income		1,912			1,535			3,877			7,324			1,874			1,317			4,793			7,984
Non-interest expense		12,758			818			5,167			18,743			12,060			833			5,281			18,174
Income (loss) before income taxes	$	3,648		$	726		$	(1,229	)	$	3,145		$	3,540		$	478		$	(465	)	$	3,553
Efficiency ratio		59	%		53	%		131	%		69	%		65	%		64	%		110	%		74	%

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-provision Net Revenue Reconciliation
	Three Months Ended
(Dollars in thousands, except per share data, Unaudited)	March 31, 2025		December 31, 2024		March 31, 2024
Income before income tax expense	$	3,145	$	7,595	$	3,553
Provision for credit losses		5,212		3,572		2,866
Pre-provision net revenue	$	8,357	$	11,167	$	6,419

	Pre-Provision Net Revenue Reconciliation
	Three Months Ended
(Dollars in thousands, except per share data, Unaudited)	March 31, 2025			December 31, 2024		March 31, 2024
Bank	$	8,860		$	8,205	$	6,406
Wealth		726			571		478
Mortgage		(1,229	)		2,391		(465	)
Pre-provision net revenue	$	8,357		$	11,167	$	6,419

	Allowance For Credit Losses (ACL) to Loans and Other Finance Receivables, Excluding and Loans at Fair Value
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Allowance for credit losses (GAAP)	$	20,827		$	18,438		$	21,965		$	21,703		$	23,171

Loans and other finance receivables (GAAP)		2,071,675			2,030,437			2,008,396			1,988,535			1,956,315
Less: Loans at fair value		(14,182	)		(14,501	)		(13,965	)		(12,900	)		(13,139	)
Loans and other finance receivables, excluding loans at fair value (non-GAAP)	$	2,057,493		$	2,015,936		$	1,994,431		$	1,975,635		$	1,943,176

ACL to loans and other finance receivables (GAAP)		1.01	%		0.91	%		1.09	%		1.09	%		1.18	%
ACL to loans and other finance receivables, excluding loans at fair value (non-GAAP)		1.01	%		0.91	%		1.10	%		1.10	%		1.19	%

	Tangible Common Equity Ratio Reconciliation - Corporation
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Total stockholders' equity (GAAP)	$	173,266		$	171,522		$	167,450		$	162,382		$	159,936
Less: Goodwill and intangible assets		(3,615	)		(3,666	)		(3,717	)		(3,768	)		(3,819	)
Tangible common equity (non-GAAP)		169,651			167,856			163,733			158,614			156,117

Total assets (GAAP)		2,528,586			2,385,867			2,387,721			2,351,584			2,292,923
Less: Goodwill and intangible assets		(3,615	)		(3,666	)		(3,717	)		(3,768	)		(3,819	)
Tangible assets (non-GAAP)	$	2,524,971		$	2,382,201		$	2,384,004		$	2,347,816		$	2,289,104
Tangible common equity to tangible assets ratio - Corporation (non-GAAP)		6.72	%		7.05	%		6.87	%		6.76	%		6.82	%

	Tangible Common Equity Ratio Reconciliation - Bank
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Total stockholders' equity (GAAP)	$	220,768		$	219,119		$	217,028		$	211,308		$	208,319
Less: Goodwill and intangible assets		(3,615	)		(3,666	)		(3,717	)		(3,768	)		(3,819	)
Tangible common equity (non-GAAP)		217,153			215,453			213,311			207,540			204,500

Total assets (GAAP)		2,525,029			2,382,014			2,385,994			2,349,600			2,292,894
Less: Goodwill and intangible assets		(3,615	)		(3,666	)		(3,717	)		(3,768	)		(3,819	)
Tangible assets (non-GAAP)	$	2,521,414		$	2,378,348		$	2,382,277		$	2,345,832		$	2,289,075
Tangible common equity to tangible assets ratio - Bank (non-GAAP)		8.61	%		9.06	%		8.95	%		8.85	%		8.93	%

	Tangible Book Value Reconciliation
	March 31, 2025			December 31, 2024			September 30, 2024			June 30, 2024			March 31, 2024
Book value per common share	$	15.35		$	15.26		$	14.91		$	14.51		$	14.30
Less: Impact of goodwill /intangible assets		0.32			0.33			0.33			0.34			0.34
Tangible book value per common share	$	15.03		$	14.93		$	14.58		$	14.17		$	13.96

FAQ

What caused MRBK's earnings decline in Q1 2025?

Higher provisioning for distressed SBA loans impacted by interest rate increases was the main factor in the earnings decline from $2.7M in Q1 2024 to $2.4M in Q1 2025.

How much did MRBK's deposits grow in Q1 2025?

Total deposits grew by $123.4 million (6%), with non-interest-bearing deposits increasing by $82.6 million (34%) quarter-over-quarter.

What is MRBK's dividend payment for Q1 2025?

MRBK declared a quarterly cash dividend of $0.125 per share, payable May 19, 2025 to shareholders of record as of May 12, 2025.

What was MRBK's loan growth in Q1 2025?

Portfolio loans grew by $42.0 million (2.1%) quarter-over-quarter, with commercial mortgage loans up $21.2M and construction loans increasing $18.3M.

Meridian Corporation Reports First Quarter 2025 Results and Announces a Quarterly Dividend of $0.125 per Common Share

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Meridian Corporation Reports First Quarter 2025 Results and Announces a Quarterly Dividend of $0.125 per Common Share

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