Meridian Corporation Reports Second Quarter 2024 Results and Announces a Quarterly Dividend of $0.125 per Common Share
Meridian (Nasdaq: MRBK) reported Q2 2024 results with net income of $3.3 million, up 24.3% from Q1. Diluted earnings per share reached $0.30. Key highlights include:
- Commercial loans grew 3% for the quarter and 8% year-over-year
- Total assets increased to $2.4 billion
- Pre-tax, pre-provision income was $7.1 million
- Net interest margin was 3.06% with a loan yield of 7.31%
- Board declared a quarterly cash dividend of $0.125 per share
CEO Christopher J. Annas noted strong loan growth, particularly in residential and multi-family real estate, amid market disruption. The company continues to gain market share in the Philadelphia metro region despite rate challenges.
Meridian (Nasdaq: MRBK) ha riportato i risultati del Q2 2024 con un reddito netto di 3,3 milioni di dollari, in aumento del 24,3% rispetto al Q1. Utili per azione diluiti hanno raggiunto i $0,30. I principali punti salienti includono:
- I prestiti commerciali sono aumentati del 3% nel trimestre e dell'8% su base annua
- I totali attivi sono aumentati a 2,4 miliardi di dollari
- Il reddito ante imposte e accantonamenti è stato di 7,1 milioni di dollari
- Il margine di interessi netto è stato del 3,06% con un rendimento sui prestiti del 7,31%
- Il Consiglio ha dichiarato un dividendo in contante trimestrale di 0,125 dollari per azione
Il CEO Christopher J. Annas ha sottolineato la forte crescita dei prestiti, in particolare nel settore residenziale e multi-familiare, nonostante le perturbazioni del mercato. L'azienda continua a guadagnare quote di mercato nella regione metropolitana di Filadelfia nonostante le sfide sui tassi.
Meridian (Nasdaq: MRBK) reportó resultados del Q2 2024 con un ingreso neto de 3.3 millones de dólares, un aumento del 24.3% con respecto al Q1. Utilidad por acción diluida alcanzó los $0.30. Los aspectos destacados incluyen:
- Los préstamos comerciales crecieron un 3% en el trimestre y un 8% interanual
- Los activos totales aumentaron a 2.4 mil millones de dólares
- El ingreso antes de impuestos y provisiones fue de 7.1 millones de dólares
- El margen de interés neto fue del 3.06% con un rendimiento de préstamos del 7.31%
- La Junta declaró un dividendo en efectivo trimestral de 0.125 dólares por acción
El CEO Christopher J. Annas destacó el fuerte crecimiento de los préstamos, especialmente en bienes raíces residenciales y multifamiliares, en medio de la disrupción del mercado. La empresa continúa ganando cuota de mercado en la región metropolitana de Filadelfia a pesar de los desafíos en las tasas.
Meridian (Nasdaq: MRBK)는 Q2 2024 결과를 보고하며 순이익이 330만 달러로 Q1 대비 24.3% 증가했다고 발표했습니다. 희석 주당 순이익은 $0.30에 도달했습니다. 주요 하이라이트는 다음과 같습니다:
- 상업 대출이 분기 동안 3% 증가하고 연간 8% 증가했습니다
- 총 자산이 24억 달러로 증가했습니다
- 세금 전, 충당금 전 수익은 710만 달러였습니다
- 순 이자 마진은 3.06%, 대출 수익률은 7.31%였습니다
- 이사회는 주당 0.125달러의 분기 현금 배당금을 선언했습니다
CEO Christopher J. Annas는 특히 주거 및 다가구 부동산에서 대출이 강하게 성장하고 있다고 언급했습니다. 이 회사는 금리 문제에도 불구하고 필라델피아 대도시 지역에서 시장 점유율을 계속 확대하고 있습니다.
Meridian (Nasdaq: MRBK) a rapporté les résultats du Q2 2024 avec un revenu net de 3,3 millions de dollars, en hausse de 24,3% par rapport au Q1. Bénéfice dilué par action a atteint 0,30 $. Les points forts incluent :
- Prêts commerciaux en hausse de 3% sur le trimestre et de 8% par rapport à l'année précédente
- Actifs totaux augmentés à 2,4 milliards de dollars
- Revenu avant impôts et provisions de 7,1 millions de dollars
- Marge d'intérêt nette de 3,06% avec un rendement des prêts de 7,31%
- Le Conseil a déclaré un dividende en espèces trimestriel de 0,125 dollar par action
Le PDG Christopher J. Annas a noté une forte croissance des prêts, en particulier dans le secteur résidentiel et multifamilial, malgré les perturbations du marché. L'entreprise continue de gagner des parts de marché dans la région métropolitaine de Philadelphie malgré les défis liés aux taux.
Meridian (Nasdaq: MRBK) berichtete über die Ergebnisse des Q2 2024 mit einem Nettoergebnis von 3,3 Millionen Dollar, was einem Anstieg von 24,3% im Vergleich zum Q1 entspricht. Diluted Earnings per Share betrugen 0,30 $. Zu den wichtigsten Highlights gehören:
- Privatkredite wuchsen um 3% im Quartal und um 8% im Jahresvergleich
- Gesamtvermögen erhöhte sich auf 2,4 Milliarden Dollar
- Ertrag vor Steuern und Vorausleistungen betrug 7,1 Millionen Dollar
- Nettozinsspanne betrug 3,06% mit einer Kreditertragsrate von 7,31%
- Der Vorstand erklärte eine vierteljährliche Bardividende von 0,125 Dollar pro Aktie
CEO Christopher J. Annas hob das starke Kreditwachstum hervor, insbesondere im Bereich Wohn- und Mehrfamilienimmobilien, trotz der Marktdisruption. Das Unternehmen gewinnt weiterhin Marktanteile in der Metropolregion Philadelphia, trotz der Herausforderungen durch die Zinssätze.
- Net income increased 24.3% quarter-over-quarter to $3.3 million
- Commercial loans grew 3% for the quarter and 8% year-over-year
- Total assets increased to $2.4 billion
- Pre-tax, pre-provision income was $7.1 million
- Board declared a quarterly cash dividend of $0.125 per share
- Strong loan growth in residential and multi-family real estate
- Gaining market share in the Philadelphia metro region
- Net interest margin decreased 3 basis points to 3.06%
- Non-performing assets at $37.6 million, with non-performing loans to total loans ratio at 1.84%
- Net charge-offs increased to $4.1 million for Q2 2024, up from $2.3 million in Q1
Meridian 's Q2 2024 results show a mixed performance with some positive trends and areas of concern. Net income increased by
Key positives include:
- Commercial loan growth of
3% for the quarter and8% year-over-year - Total assets increased to
$2.4 billion , up from$2.3 billion in the previous quarter - Pre-tax, pre-provision income rose to
$7.1 million - Net interest margin held steady at
3.06%
However, there are some concerns:
- The allowance for credit losses ratio decreased to
1.10% from1.19% in the previous quarter - Net charge-offs increased to
0.20% of average loans, up from0.12% - Non-performing assets, while slightly decreased, remain elevated at
1.68% of total assets
The bank's focus on commercial and real estate lending in the Philadelphia metro area appears to be paying off, but the increase in charge-offs and still-high non-performing assets warrant close monitoring. The steady net interest margin in a challenging rate environment is commendable, but pressure on this metric may continue as deposit costs rise.
Meridian 's Q2 2024 results reflect the broader trends in the banking sector, particularly for regional banks. The Philadelphia metro region's robust real estate market is a key driver for Meridian's growth, aligning with the national housing shortage mentioned by DR Horton.
Notable market insights:
- The continued shortage of homes for sale in Meridian's region suggests sustained demand for mortgage and construction lending
- The bank's market share gains amid industry disruption indicate potential for further growth
- The shift towards higher-yield time deposits (
1.6% increase) mirrors the industry-wide trend of depositors seeking better returns - The
49.1% increase in mortgage banking income suggests a resilient housing market despite high interest rates
However, investors should consider:
- The potential impact of private equity's significant ownership of homes on the local real estate market dynamics
- The bank's exposure to commercial real estate in a potentially softening market
- The competitive pressure on deposits, as evidenced by the
14 basis point increase in deposit costs
Meridian's performance relative to its peer group and its ability to navigate the challenging interest rate environment will be important factors for investors to watch in the coming quarters.
From a legal and regulatory perspective, Meridian 's Q2 2024 results highlight several key points:
- The bank maintains a Community Bank Leverage Ratio of
9.33% , which is above the regulatory minimum, indicating adequate capitalization - The increase in net charge-offs and non-performing assets, while not alarming, may attract regulatory attention if the trend continues
- The decrease in the allowance for credit losses ratio from
1.19% to1.10% could be scrutinized by regulators, especially given the increase in charge-offs - The bank's focus on commercial and real estate lending in a specific geographic area (Philadelphia metro) may raise concentration risk concerns from a regulatory standpoint
Meridian's management should be prepared to address these points in regulatory examinations and ensure robust risk management practices are in place. The bank's ability to maintain strong capital ratios while growing its loan portfolio will be important from a regulatory compliance perspective.
Additionally, the bank's dividend declaration of
Overall, while there are no immediate legal red flags, the bank should remain vigilant in its risk management and regulatory compliance efforts, particularly in areas of credit quality and concentration risk.
MALVERN, Pa., July 26, 2024 (GLOBE NEWSWIRE) -- Meridian Corporation (Nasdaq: MRBK) today reported:
Three Months Ended | ||||||||
(Dollars in thousands, except per share data)((Unaudited) | June 30, 2024 | March 31, 2024 | June 30, 2023 | |||||
Income: | ||||||||
Net income | $ | 3,326 | $ | 2,676 | $ | 4,645 | ||
Diluted earnings per common share | $ | 0.30 | $ | 0.24 | $ | 0.41 | ||
Pre-tax, pre-provision income (1) | $ | 7,072 | $ | 6,419 | $ | 6,607 | ||
(1) See Non-GAAP reconciliation in the Appendix |
- Commercial loans, excluding leases, increased
$40.7 million , or3% , for the quarter and$112.3 million , or8% , year over year. - Total assets at June 30, 2024 were
$2.4 billion , compared to$2.3 billion at March 31, 2024 and$2.2 billion at June 30, 2023. - Pre-tax, pre-provision income was
$7.1 million for the quarter, with$545 thousand from the mortgage division. - Net interest margin was
3.06% for the second quarter of 2024, with a loan yield of7.31% . - On July 25, 2024, the Board of Directors declared a quarterly cash dividend of
$0.12 5 per common share, payable August 19, 2024 to shareholders of record as of August 12, 2024.
Christopher J. Annas, Chairman and CEO commented:
“Our second quarter earnings showed significant improvement from the first quarter, increasing by
The Philadelphia metro region remains healthy, with a continued shortage of homes for sale. A recent comment from DR Horton highlighted that the US needs 5 million more homes nationally to meet demand, a deficiency that is evident in our region. Private equity’s significant ownership and rental of homes nationally contributes to this problem. Despite these challenges our volume has improved from 2023, and if rates come down the demand could strengthen.
Meridian continues to gain market share in our region. While navigating the rate rise has presented some obstacles, our core businesses remain healthy. We are excited about our prospects and the generally stable economic landscape.”
Select Condensed Financial Information
As of or for the quarter ended (Unaudited) | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Income: | |||||||||||||||||||
Net income | $ | 3,326 | $ | 2,676 | $ | 571 | $ | 4,005 | $ | 4,645 | |||||||||
Basic earnings per common share | 0.30 | 0.24 | 0.05 | 0.36 | 0.42 | ||||||||||||||
Diluted earnings per common share | 0.30 | 0.24 | 0.05 | 0.35 | 0.41 | ||||||||||||||
Net interest income | 16,846 | 16,609 | 16,942 | 17,224 | 17,098 | ||||||||||||||
Balance Sheet: | |||||||||||||||||||
Total assets | $ | 2,351,584 | $ | 2,292,923 | $ | 2,246,193 | $ | 2,230,971 | $ | 2,206,877 | |||||||||
Loans, net of fees and costs | 1,988,535 | 1,956,315 | 1,895,806 | 1,885,629 | 1,859,839 | ||||||||||||||
Total deposits | 1,915,436 | 1,900,696 | 1,823,462 | 1,808,645 | 1,782,605 | ||||||||||||||
Non-interest bearing deposits | 224,040 | 220,581 | 239,289 | 244,668 | 269,174 | ||||||||||||||
Stockholders' equity | 162,382 | 159,936 | 158,022 | 155,114 | 153,962 | ||||||||||||||
Balance Sheet Average Balances: | |||||||||||||||||||
Total assets | $ | 2,319,295 | $ | 2,269,047 | $ | 2,219,340 | $ | 2,184,384 | $ | 2,166,575 | |||||||||
Total interest earning assets | 2,222,177 | 2,173,212 | 2,121,068 | 2,086,602 | 2,070,640 | ||||||||||||||
Loans, net of fees and costs | 1,972,740 | 1,944,187 | 1,891,170 | 1,876,648 | 1,847,736 | ||||||||||||||
Total deposits | 1,919,954 | 1,823,523 | 1,820,532 | 1,782,140 | 1,775,444 | ||||||||||||||
Non-interest bearing deposits | 229,040 | 233,255 | 254,025 | 253,485 | 266,675 | ||||||||||||||
Stockholders' equity | 162,119 | 159,822 | 157,210 | 156,271 | 154,183 | ||||||||||||||
Performance Ratios (Annualized): | |||||||||||||||||||
Return on average assets | 0.58 | % | 0.47 | % | 0.10 | % | 0.73 | % | 0.86 | % | |||||||||
Return on average equity | 8.25 | % | 6.73 | % | 1.44 | % | 10.17 | % | 12.08 | % | |||||||||
Income Statement - Second Quarter 2024 Compared to First Quarter 2024
Net income for the second quarter increased
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.
Quarter Ended | ||||||||||||||||||||
(dollars in thousands) | June 30, 2024 | March 31, 2024 | $ Change | % Change | Change due to rate | Change due to volume | ||||||||||||||
Interest income: | ||||||||||||||||||||
Cash and cash equivalents | 331 | 300 | $ | 31 | 10.3 | % | $ | (2 | ) | $ | 33 | |||||||||
Investment securities - taxable | 1,324 | 1,251 | 73 | 5.8 | % | 38 | 35 | |||||||||||||
Investment securities - tax exempt (1) | 403 | 405 | (2 | ) | (0.5)% | 5 | (7 | ) | ||||||||||||
Loans held for sale | 572 | 323 | 249 | 77.1 | % | (3 | ) | 252 | ||||||||||||
Loans held for investment (1) | 35,916 | 35,018 | 898 | 2.6 | % | 381 | 517 | |||||||||||||
Total loans | 36,488 | 35,341 | 1,147 | 3.2 | % | 378 | 769 | |||||||||||||
Total interest income | $ | 38,546 | $ | 37,297 | $ | 1,249 | 3.3 | % | $ | 419 | $ | 830 | ||||||||
Interest expense: | ||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,279 | $ | 1,367 | $ | (88 | ) | (6.4)% | $ | (28 | ) | $ | (60 | ) | ||||||
Money market and savings deposits | 8,265 | 7,855 | 410 | 5.2 | % | 284 | 126 | |||||||||||||
Time deposits | 9,447 | 8,170 | 1,277 | 15.6 | % | 121 | 1,156 | |||||||||||||
Total interest - bearing deposits | 18,991 | 17,392 | 1,599 | 9.2 | % | 377 | 1,222 | |||||||||||||
Borrowings | 1,851 | 2,435 | (584 | ) | (24.0)% | (20 | ) | (564 | ) | |||||||||||
Subordinated debentures | 777 | 779 | (2 | ) | (0.3)% | (2 | ) | — | ||||||||||||
Total interest expense | 21,619 | 20,606 | 1,013 | 4.9 | % | 355 | 658 | |||||||||||||
Net interest income differential | $ | 16,927 | $ | 16,691 | $ | 236 | 1.41 | % | $ | 64 | $ | 172 | ||||||||
(1) Reflected on a tax-equivalent basis. | ||||||||||||||||||||
Interest income increased
Average total loans, excluding residential loans for sale, increased
Total interest expense increased
Overall the net interest margin decreased 3 basis points to
Provision for Credit Losses
The overall provision for credit losses is comprised of expected loan loss recorded for funded loans as well as unfunded loan commitments. The overall expense for the second quarter decreased
Non-interest income
The following table presents the components of non-interest income for the periods indicated:
Quarter Ended | ||||||||||||||
(Dollars in thousands) | June 30, 2024 | March 31, 2024 | $ Change | % Change | ||||||||||
Mortgage banking income | $ | 5,420 | $ | 3,634 | $ | 1,786 | 49.1 | % | ||||||
Wealth management income | 1,444 | 1,317 | 127 | 9.6 | % | |||||||||
SBA loan income | 785 | 986 | (201 | ) | (20.4)% | |||||||||
Earnings on investment in life insurance | 215 | 207 | 8 | 3.9 | % | |||||||||
Net change in the fair value of derivative instruments | 203 | 75 | 128 | 170.7 | % | |||||||||
Net change in the fair value of loans held-for-sale | (29 | ) | (2 | ) | (27 | ) | 1350.0 | % | ||||||
Net change in the fair value of loans held-for-investment | (24 | ) | (175 | ) | 151 | (86.3)% | ||||||||
Net loss on hedging activity | (63 | ) | (19 | ) | (44 | ) | 231.6 | % | ||||||
Other | 1,293 | 1,961 | (668 | ) | (34.1)% | |||||||||
Total non-interest income | $ | 9,244 | $ | 7,984 | $ | 1,260 | 15.8 | % | ||||||
Total non-interest income increased
Non-interest expense
The following table presents the components of non-interest expense for the periods indicated:
Quarter Ended | ||||||||||||
(Dollars in thousands) | June 30, 2024 | March 31, 2024 | $ Change | % Change | ||||||||
Salaries and employee benefits | $ | 11,437 | $ | 10,573 | $ | 864 | 8.2 | % | ||||
Occupancy and equipment | 1,230 | 1,233 | (3 | ) | (0.2)% | |||||||
Professional fees | 1,029 | 1,498 | (469 | ) | (31.3)% | |||||||
Advertising and promotion | 989 | 748 | 241 | 32.2 | % | |||||||
Data processing and software | 1,506 | 1,532 | (26 | ) | (1.7)% | |||||||
Pennsylvania bank shares tax | 274 | 274 | — | — | % | |||||||
Other | 2,553 | 2,316 | 237 | 10.2 | % | |||||||
Total non-interest expense | $ | 19,018 | $ | 18,174 | $ | 844 | 4.6 | % | ||||
Salaries and employee benefits increased
Professional fees decreased
Balance Sheet - June 30, 2024 Compared to March 31, 2024
Total assets increased
Portfolio loan growth was
Total deposits increased
Total stockholders’ equity increased by
Asset Quality Summary
Non-performing assets decreased
Meridian realized net charge-offs of
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
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; 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.
Contact: Christopher J. Annas
484.568.5001
CAnnas@meridianbanker.com
MERIDIAN CORPORATION AND SUBSIDIARIES
FINANCIAL RATIOS (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
Quarter Ended | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |||||||||||||||
Earnings and Per Share Data: | |||||||||||||||||||
Net income | $ | 3,326 | $ | 2,676 | $ | 571 | $ | 4,005 | $ | 4,645 | |||||||||
Basic earnings per common share | $ | 0.30 | $ | 0.24 | $ | 0.05 | $ | 0.36 | $ | 0.42 | |||||||||
Diluted earnings per common share | $ | 0.30 | $ | 0.24 | $ | 0.05 | $ | 0.35 | $ | 0.41 | |||||||||
Common shares outstanding | 11,191 | 11,186 | 11,183 | 11,178 | 11,178 | ||||||||||||||
Performance Ratios: | |||||||||||||||||||
Return on average assets (2) | 0.58 | % | 0.47 | % | 0.10 | % | 0.73 | % | 0.86 | % | |||||||||
Return on average equity (2) | 8.25 | 6.73 | 1.44 | 10.17 | 12.08 | ||||||||||||||
Net interest margin (tax-equivalent) (2) | 3.06 | 3.09 | 3.18 | 3.29 | 3.33 | ||||||||||||||
Yield on earning assets (tax-equivalent) (2) | 6.98 | 6.90 | 6.81 | 6.76 | 6.57 | ||||||||||||||
Cost of funds (2) | 4.10 | 4.00 | 3.81 | 3.63 | 3.39 | ||||||||||||||
Efficiency ratio | 72.89 | % | 73.90 | % | 78.63 | % | 79.09 | % | 74.80 | % | |||||||||
Asset Quality Ratios: | |||||||||||||||||||
Net charge-offs (recoveries) to average loans | 0.20 | % | 0.12 | % | 0.11 | % | 0.05 | % | 0.05 | % | |||||||||
Non-performing loans to total loans | 1.84 | 1.93 | 1.76 | 1.53 | 1.44 | ||||||||||||||
Non-performing assets to total assets | 1.68 | 1.74 | 1.58 | 1.38 | 1.32 | ||||||||||||||
Allowance for credit losses to: | |||||||||||||||||||
Total loans held for investment | 1.09 | 1.18 | 1.17 | 1.04 | 1.09 | ||||||||||||||
Total loans held for investment (excluding loans at fair value) (1) | 1.10 | 1.19 | 1.17 | 1.05 | 1.10 | ||||||||||||||
Non-performing loans | 57.66 | % | 60.59 | % | 65.48 | % | 67.61 | % | 73.97 | % | |||||||||
Capital Ratios: | |||||||||||||||||||
Book value per common share | $ | 14.51 | $ | 14.30 | $ | 14.13 | $ | 13.88 | $ | 13.77 | |||||||||
Tangible book value per common share | $ | 14.17 | $ | 13.96 | $ | 13.78 | $ | 13.53 | $ | 13.42 | |||||||||
Total equity/Total assets | 6.91 | % | 6.98 | % | 7.04 | % | 6.95 | % | 6.98 | % | |||||||||
Tangible common equity/Tangible assets - Corporation (1) | 6.76 | 6.82 | 6.87 | 6.79 | 6.81 | ||||||||||||||
Tangible common equity/Tangible assets - Bank (1) | 8.85 | 8.93 | 8.94 | 8.89 | 8.54 | ||||||||||||||
Tier 1 leverage ratio - Bank | 9.33 | 9.42 | 9.46 | 9.65 | 9.22 | ||||||||||||||
Common tier 1 risk-based capital ratio - Bank | 9.84 | 9.87 | 10.10 | 10.82 | 10.35 | ||||||||||||||
Tier 1 risk-based capital ratio - Bank | 9.84 | 9.87 | 10.10 | 10.82 | 10.35 | ||||||||||||||
Total risk-based capital ratio - Bank | 10.84 | % | 10.95 | % | 11.17 | % | 11.85 | % | 11.43 | % | |||||||||
(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 | Six Months Ended | ||||||||||||||||||
June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||||||||
Interest income: | |||||||||||||||||||
Loans and other finance receivables, including fees | $ | 36,486 | $ | 35,339 | $ | 32,215 | $ | 71,825 | $ | 61,632 | |||||||||
Securities - taxable | 1,324 | 1,251 | 992 | 2,575 | 1,951 | ||||||||||||||
Securities - tax-exempt | 324 | 325 | 351 | 649 | 705 | ||||||||||||||
Cash and cash equivalents | 331 | 300 | 278 | 631 | 495 | ||||||||||||||
Total interest income | 38,465 | 37,215 | 33,836 | 75,680 | 64,783 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 18,991 | 17,392 | 14,023 | 36,383 | 25,470 | ||||||||||||||
Borrowings | 2,628 | 3,214 | 2,715 | 5,842 | 4,538 | ||||||||||||||
Total interest expense | 21,619 | 20,606 | 16,738 | 42,225 | 30,008 | ||||||||||||||
Net interest income | 16,846 | 16,609 | 17,098 | 33,455 | 34,775 | ||||||||||||||
Provision for credit losses | 2,680 | 2,866 | 705 | 5,546 | 2,104 | ||||||||||||||
Net interest income after provision for credit losses | 14,166 | 13,743 | 16,393 | 27,909 | 32,671 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Mortgage banking income | 5,420 | 3,634 | 5,050 | 9,054 | 8,322 | ||||||||||||||
Wealth management income | 1,444 | 1,317 | 1,235 | 2,761 | 2,431 | ||||||||||||||
SBA loan income | 785 | 986 | 1,767 | 1,771 | 2,480 | ||||||||||||||
Earnings on investment in life insurance | 215 | 207 | 193 | 422 | 385 | ||||||||||||||
Net change in the fair value of derivative instruments | 203 | 75 | 183 | 278 | 114 | ||||||||||||||
Net change in the fair value of loans held-for-sale | (29 | ) | (2 | ) | (199 | ) | (31 | ) | (200 | ) | |||||||||
Net change in the fair value of loans held-for-investment | (24 | ) | (175 | ) | (219 | ) | (199 | ) | (102 | ) | |||||||||
Net loss on hedging activity | (63 | ) | (19 | ) | (1 | ) | (82 | ) | (1 | ) | |||||||||
Net loss on sale of investment securities available-for-sale | — | — | (54 | ) | — | (54 | ) | ||||||||||||
Other | 1,293 | 1,961 | 1,169 | 3,254 | 2,387 | ||||||||||||||
Total non-interest income | 9,244 | 7,984 | 9,124 | 17,228 | 15,762 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and employee benefits | 11,437 | 10,573 | 12,152 | 22,010 | 23,213 | ||||||||||||||
Occupancy and equipment | 1,230 | 1,233 | 1,140 | 2,463 | 2,384 | ||||||||||||||
Professional fees | 1,029 | 1,498 | 1,004 | 2,527 | 1,827 | ||||||||||||||
Advertising and promotion | 989 | 748 | 1,091 | 1,737 | 1,952 | ||||||||||||||
Data processing and software | 1,506 | 1,532 | 1,681 | 3,038 | 3,113 | ||||||||||||||
Pennsylvania bank shares tax | 274 | 274 | 245 | 548 | 490 | ||||||||||||||
Other | 2,553 | 2,316 | 2,302 | 4,869 | 4,425 | ||||||||||||||
Total non-interest expense | 19,018 | 18,174 | 19,615 | 37,192 | 37,404 | ||||||||||||||
Income before income taxes | 4,392 | 3,553 | 5,902 | 7,945 | 11,029 | ||||||||||||||
Income tax expense | 1,066 | 877 | 1,257 | 1,943 | 2,363 | ||||||||||||||
Net income | $ | 3,326 | $ | 2,676 | $ | 4,645 | $ | 6,002 | $ | 8,666 | |||||||||
Basic earnings per common share | $ | 0.30 | $ | 0.24 | $ | 0.42 | $ | 0.54 | $ | 0.78 | |||||||||
Diluted earnings per common share | $ | 0.30 | $ | 0.24 | $ | 0.41 | $ | 0.54 | $ | 0.75 | |||||||||
Basic weighted average shares outstanding | 11,096 | 11,088 | 11,062 | 11,092 | 11,167 | ||||||||||||||
Diluted weighted average shares outstanding | 11,150 | 11,201 | 11,304 | 11,178 | 11,494 | ||||||||||||||
MERIDIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |||||||||||||||
Assets: | |||||||||||||||||||
Cash and due from banks | $ | 8,457 | $ | 8,935 | $ | 10,067 | $ | 12,734 | $ | 10,576 | |||||||||
Interest-bearing deposits at other banks | 15,601 | 14,092 | 46,630 | 47,025 | 36,290 | ||||||||||||||
Cash and cash equivalents | 24,058 | 23,027 | 56,697 | 59,759 | 46,866 | ||||||||||||||
Securities available-for-sale, at fair value | 159,141 | 150,996 | 146,019 | 122,218 | 126,668 | ||||||||||||||
Securities held-to-maturity, at amortized cost | 35,089 | 35,157 | 35,781 | 36,232 | 36,463 | ||||||||||||||
Equity investments | 2,088 | 2,092 | 2,121 | 2,019 | 2,097 | ||||||||||||||
Mortgage loans held for sale, at fair value | 54,278 | 29,124 | 24,816 | 23,144 | 40,422 | ||||||||||||||
Loans and other finance receivables, net of fees and costs | 1,988,535 | 1,956,315 | 1,895,806 | 1,885,629 | 1,859,839 | ||||||||||||||
Allowance for credit losses | (21,703 | ) | (23,171 | ) | (22,107 | ) | (19,683 | ) | (20,242 | ) | |||||||||
Loans and other finance receivables, net of the allowance for credit losses | 1,966,832 | 1,933,144 | 1,873,699 | 1,865,946 | 1,839,597 | ||||||||||||||
Restricted investment in bank stock | 10,044 | 8,560 | 8,072 | 8,309 | 9,157 | ||||||||||||||
Bank premises and equipment, net | 13,114 | 13,451 | 13,557 | 13,310 | 13,234 | ||||||||||||||
Bank owned life insurance | 29,267 | 29,051 | 28,844 | 28,641 | 28,440 | ||||||||||||||
Accrued interest receivable | 9,973 | 9,864 | 9,325 | 8,984 | 7,651 | ||||||||||||||
Other real estate owned | 1,862 | 1,703 | 1,703 | 1,703 | 1,703 | ||||||||||||||
Deferred income taxes | 3,950 | 4,339 | 4,201 | 4,993 | 4,258 | ||||||||||||||
Servicing assets | 11,341 | 11,573 | 11,748 | 11,835 | 12,193 | ||||||||||||||
Goodwill | 899 | 899 | 899 | 899 | 899 | ||||||||||||||
Intangible assets | 2,869 | 2,920 | 2,971 | 3,022 | 3,073 | ||||||||||||||
Other assets | 26,779 | 37,023 | 25,740 | 39,957 | 34,156 | ||||||||||||||
Total assets | $ | 2,351,584 | $ | 2,292,923 | $ | 2,246,193 | $ | 2,230,971 | $ | 2,206,877 | |||||||||
Liabilities: | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Non-interest bearing | $ | 224,040 | $ | 220,581 | $ | 239,289 | $ | 244,668 | $ | 269,174 | |||||||||
Interest bearing | |||||||||||||||||||
Interest checking | 130,062 | 121,204 | 150,898 | 156,537 | 155,907 | ||||||||||||||
Money market and savings deposits | 787,479 | 797,525 | 747,803 | 746,599 | 710,546 | ||||||||||||||
Time deposits | 773,855 | 761,386 | 685,472 | 660,841 | 646,978 | ||||||||||||||
Total interest-bearing deposits | 1,691,396 | 1,680,115 | 1,584,173 | 1,563,977 | 1,513,431 | ||||||||||||||
Total deposits | 1,915,436 | 1,900,696 | 1,823,462 | 1,808,645 | 1,782,605 | ||||||||||||||
Borrowings | 187,260 | 145,803 | 174,896 | 177,959 | 194,636 | ||||||||||||||
Subordinated debentures | 49,897 | 49,867 | 49,836 | 50,079 | 40,348 | ||||||||||||||
Accrued interest payable | 7,709 | 8,350 | 10,324 | 7,814 | 5,612 | ||||||||||||||
Other liabilities | 28,900 | 28,271 | 29,653 | 31,360 | 29,714 | ||||||||||||||
Total liabilities | 2,189,202 | 2,132,987 | 2,088,171 | 2,075,857 | 2,052,915 | ||||||||||||||
Stockholders’ equity: | |||||||||||||||||||
Common stock | 13,194 | 13,189 | 13,186 | 13,181 | 13,181 | ||||||||||||||
Surplus | 80,639 | 80,487 | 80,325 | 79,731 | 79,650 | ||||||||||||||
Treasury stock | (26,079 | ) | (26,079 | ) | (26,079 | ) | (26,079 | ) | (26,079 | ) | |||||||||
Unearned common stock held by employee stock ownership plan | (1,204 | ) | (1,204 | ) | (1,204 | ) | (1,403 | ) | (1,403 | ) | |||||||||
Retained earnings | 104,420 | 102,492 | 101,216 | 102,043 | 99,434 | ||||||||||||||
Accumulated other comprehensive loss | (8,588 | ) | (8,949 | ) | (9,422 | ) | (12,359 | ) | (10,821 | ) | |||||||||
Total stockholders’ equity | 162,382 | 159,936 | 158,022 | 155,114 | 153,962 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,351,584 | $ | 2,292,923 | $ | 2,246,193 | $ | 2,230,971 | $ | 2,206,877 | |||||||||
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 | ||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | ||||||||||
Interest income | $ | 38,465 | $ | 37,215 | $ | 36,346 | $ | 35,459 | $ | 33,836 | ||||
Interest expense | 21,619 | 20,606 | 19,404 | 18,235 | 16,738 | |||||||||
Net interest income | 16,846 | 16,609 | 16,942 | 17,224 | 17,098 | |||||||||
Provision for credit losses | 2,680 | 2,866 | 4,628 | 82 | 705 | |||||||||
Non-interest income | 9,244 | 7,984 | 8,117 | 8,086 | 9,124 | |||||||||
Non-interest expense | 19,018 | 18,174 | 19,703 | 20,018 | 19,615 | |||||||||
Income before income tax expense | 4,392 | 3,553 | 728 | 5,210 | 5,902 | |||||||||
Income tax expense | 1,066 | 877 | 157 | 1,205 | 1,257 | |||||||||
Net Income | $ | 3,326 | $ | 2,676 | $ | 571 | $ | 4,005 | $ | 4,645 | ||||
Basic weighted average shares outstanding | 11,096 | 11,088 | 11,070 | 11,057 | 11,062 | |||||||||
Basic earnings per common share | $ | 0.30 | $ | 0.24 | $ | 0.05 | $ | 0.36 | $ | 0.42 | ||||
Diluted weighted average shares outstanding | 11,150 | 11,201 | 11,206 | 11,363 | 11,304 | |||||||||
Diluted earnings per common share | $ | 0.30 | $ | 0.24 | $ | 0.05 | $ | 0.35 | $ | 0.41 | ||||
Segment Information | |||||||||||||||||||||||||||||||
Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | ||||||||||||||||||||||||||||||
(dollars in thousands) | Bank | Wealth | Mortgage | Total | Bank | Wealth | Mortgage | Total | |||||||||||||||||||||||
Net interest income | $ | 16,784 | $ | 36 | $ | 26 | $ | 16,846 | $ | 17,102 | $ | (29 | ) | $ | 25 | $ | 17,098 | ||||||||||||||
Provision for credit losses | 2,680 | — | — | 2,680 | 705 | — | — | 705 | |||||||||||||||||||||||
Net interest income after provision | 14,104 | 36 | 26 | 14,166 | 16,397 | (29 | ) | 25 | 16,393 | ||||||||||||||||||||||
Non-interest income | 1,673 | 1,444 | 6,127 | 9,244 | 2,508 | 1,235 | 5,381 | 9,124 | |||||||||||||||||||||||
Non-interest expense | 12,606 | 804 | 5,608 | 19,018 | 12,325 | 889 | 6,401 | 19,615 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 3,171 | $ | 676 | $ | 545 | $ | 4,392 | $ | 6,580 | $ | 317 | $ | (995 | ) | $ | 5,902 | ||||||||||||||
Efficiency ratio | 68 | % | 54 | % | 91 | % | 73 | % | 63 | % | 74 | % | 118 | % | 75 | % | |||||||||||||||
SixMonths EndedJune 30, 2024 | SixMonths EndedJune 30, 2023 | ||||||||||||||||||||||||||||||
(dollars in thousands) | Bank | Wealth | Mortgage | Total | Bank | Wealth | Mortgage | Total | |||||||||||||||||||||||
Net interest income | $ | 33,376 | $ | 30 | $ | 49 | $ | 33,455 | $ | 34,721 | $ | 3 | $ | 51 | $ | 34,775 | |||||||||||||||
Provision for credit losses | 5,546 | — | — | 5,546 | 2,104 | — | — | 2,104 | |||||||||||||||||||||||
Net interest income after provision | 27,830 | 30 | 49 | 27,909 | 32,617 | 3 | 51 | 32,671 | |||||||||||||||||||||||
Non-interest income | 3,550 | 2,760 | 10,918 | 17,228 | 3,938 | 2,431 | 9,393 | 15,762 | |||||||||||||||||||||||
Non-interest expense | 24,669 | 1,636 | 10,887 | 37,192 | 23,024 | 1,877 | 12,503 | 37,404 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 6,711 | $ | 1,154 | $ | 80 | $ | 7,945 | $ | 13,531 | $ | 557 | $ | (3,059 | ) | $ | 11,029 | ||||||||||||||
Efficiency ratio | 67 | % | 59 | % | 99 | % | 73 | % | 60 | % | 77 | % | 132 | % | 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-tax, Pre-provision Reconciliation | ||||||||||||||
Three Months Ended | Six Months Ended | |||||||||||||
(Dollars in thousands, except per share data, Unaudited) | June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | |||||||||
Income before income tax expense | $ | 4,392 | $ | 3,553 | $ | 5,902 | $ | 7,945 | $ | 11,029 | ||||
Provision for credit losses | 2,680 | 2,866 | 705 | 5,546 | 2,104 | |||||||||
Pre-tax, pre-provision income | $ | 7,072 | $ | 6,419 | $ | 6,607 | $ | 13,491 | $ | 13,133 | ||||
Pre-tax, Pre-provision Reconciliation | |||||||||||||||||
Three Months Ended | Six Months Ended | ||||||||||||||||
(Dollars in thousands, except per share data, Unaudited) | June 30, 2024 | March 31, 2024 | June 30, 2023 | June 30, 2024 | June 30, 2023 | ||||||||||||
Bank | $ | 5,851 | $ | 6,406 | $ | 7,285 | $ | 12,257 | $ | 15,643 | |||||||
Wealth | 676 | 478 | 317 | 1,154 | 548 | ||||||||||||
Mortgage | 545 | (465 | ) | (995 | ) | 80 | (3,058 | ) | |||||||||
Pre-tax, pre-provision income | $ | 7,072 | $ | 6,419 | $ | 6,607 | $ | 13,491 | $ | 13,133 | |||||||
Allowance For Credit Losses to Loans, Net of Fees and Costs, Excluding and Loans at Fair Value | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |||||||||||||||
Allowance for credit losses (GAAP) | $ | 21,703 | $ | 23,171 | $ | 22,107 | $ | 19,683 | $ | 20,242 | |||||||||
Loans, net of fees and costs (GAAP) | 1,988,535 | 1,956,315 | 1,895,806 | 1,885,629 | 1,859,839 | ||||||||||||||
Less: Loans fair valued | (12,900 | ) | (13,139 | ) | (13,726 | ) | (13,231 | ) | (14,403 | ) | |||||||||
Loans, net of fees and costs, excluding loans at fair value (non-GAAP) | $ | 1,975,635 | $ | 1,943,176 | $ | 1,882,080 | $ | 1,872,398 | $ | 1,845,436 | |||||||||
Allowance for credit losses to loans, net of fees and costs (GAAP) | 1.09 | % | 1.18 | % | 1.17 | % | 1.04 | % | 1.09 | % | |||||||||
Allowance for credit losses to loans, net of fees and costs, excluding loans at fair value (non-GAAP) | 1.10 | % | 1.19 | % | 1.17 | % | 1.05 | % | 1.10 | % | |||||||||
Tangible Common Equity Ratio Reconciliation - Corporation | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |||||||||||||||
Total stockholders' equity (GAAP) | $ | 162,382 | $ | 159,936 | $ | 158,022 | $ | 155,114 | $ | 153,962 | |||||||||
Less: Goodwill and intangible assets | (3,768 | ) | (3,819 | ) | (3,870 | ) | (3,921 | ) | (3,972 | ) | |||||||||
Tangible common equity (non-GAAP) | 158,614 | 156,117 | 154,152 | 151,193 | 149,990 | ||||||||||||||
Total assets (GAAP) | 2,351,584 | 2,292,923 | 2,246,193 | 2,230,971 | 2,206,877 | ||||||||||||||
Less: Goodwill and intangible assets | (3,768 | ) | (3,819 | ) | (3,870 | ) | (3,921 | ) | (3,972 | ) | |||||||||
Tangible assets (non-GAAP) | $ | 2,347,816 | $ | 2,289,104 | $ | 2,242,323 | $ | 2,227,050 | $ | 2,202,905 | |||||||||
Tangible common equity to tangible assets ratio - Corporation (non-GAAP) | 6.76 | % | 6.82 | % | 6.87 | % | 6.79 | % | 6.81 | % | |||||||||
Tangible Common Equity Ratio Reconciliation - Bank | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |||||||||||||||
Total stockholders' equity (GAAP) | $ | 211,308 | $ | 208,319 | $ | 204,132 | $ | 201,996 | $ | 192,209 | |||||||||
Less: Goodwill and intangible assets | (3,768 | ) | (3,819 | ) | (3,870 | ) | (3,921 | ) | (3,972 | ) | |||||||||
Tangible common equity (non-GAAP) | 207,540 | 204,500 | 200,262 | 198,075 | 188,237 | ||||||||||||||
Total assets (GAAP) | 2,349,600 | 2,292,894 | 2,244,893 | 2,232,297 | 2,208,252 | ||||||||||||||
Less: Goodwill and intangible assets | (3,768 | ) | (3,819 | ) | (3,870 | ) | (3,921 | ) | (3,972 | ) | |||||||||
Tangible assets (non-GAAP) | $ | 2,345,832 | $ | 2,289,075 | $ | 2,241,023 | $ | 2,228,376 | $ | 2,204,280 | |||||||||
Tangible common equity to tangible assets ratio - Bank (non-GAAP) | 8.85 | % | 8.93 | % | 8.94 | % | 8.89 | % | 8.54 | % | |||||||||
Tangible Book Value Reconciliation | |||||||||||||||||||
June 30, 2024 | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 | |||||||||||||||
Book value per common share | $ | 14.51 | $ | 14.30 | $ | 14.13 | $ | 13.88 | $ | 13.77 | |||||||||
Less: Impact of goodwill /intangible assets | 0.34 | 0.34 | 0.35 | 0.35 | 0.35 | ||||||||||||||
Tangible book value per common share | $ | 14.17 | $ | 13.96 | $ | 13.78 | $ | 13.53 | $ | 13.42 |
![](https://ml.globenewswire.com/media/YTVkODQ0ZmEtMmVhYi00ZWMxLWIzYmUtOGIyNTZmMDRlYTFjLTExOTk1Nzg=/tiny/Meridian-Corporation.png)
FAQ
What was Meridian 's (MRBK) net income for Q2 2024?
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