- Net income of
$4.0 million and diluted earnings of$0.35 per share for the third quarter endedSeptember 30, 2023 . - Return on average assets and return on average equity for the third quarter of 2023 were 0.73% and 10.17%, respectively.
- Net interest margin was 3.29% for the third quarter of 2023, with a loan yield of 7.08%.
- Total assets at
September 30, 2023 andJune 30, 2023 were$2.2 billion , compared to$1.9 billion atSeptember 30, 2022 . - Third quarter overall commercial loan growth was
$21.3 million , or 6.1% annualized; residential and home equity loans increased by$15.1 million on a combined basis, or 19.2% annualized. - Third quarter deposit growth was
$26.0 million , or 6.0% annualized. - Raised
$9.7 million in subordinated debt at 8.00% during the quarter for growth and capital purposes. - On
October 26, 2023 , the Board of Directors declared a quarterly cash dividend of$0.125 per common share, payableNovember 20, 2023 to shareholders of record as ofNovember 13, 2023 .
Total assets remained relatively flat quarter over quarter, however our portfolio loans increased
Mortgage banking revenue was down
Select Condensed Financial Information
As of or for the quarter ended (Unaudited) | |||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Income: | |||||||||||||||||||
Net income | $ | 4,005 | $ | 4,645 | $ | 4,021 | $ | 4,557 | $ | 5,798 | |||||||||
Basic earnings per common share | 0.36 | 0.42 | 0.36 | 0.40 | 0.49 | ||||||||||||||
Diluted earnings per common share | 0.35 | 0.41 | 0.34 | 0.39 | 0.48 | ||||||||||||||
Net interest income | 17,224 | 17,098 | 17,677 | 18,518 | 18,026 | ||||||||||||||
Balance Sheet: | |||||||||||||||||||
Total assets | $ | 2,230,971 | $ | 2,206,877 | $ | 2,229,783 | $ | 2,062,228 | $ | 1,921,924 | |||||||||
Loans, net of fees and costs | 1,885,629 | 1,859,839 | 1,818,189 | 1,743,682 | 1,610,349 | ||||||||||||||
Total deposits | 1,808,645 | 1,782,605 | 1,770,413 | 1,712,479 | 1,673,553 | ||||||||||||||
Non-interest bearing deposits | 244,668 | 269,174 | 262,636 | 301,727 | 290,169 | ||||||||||||||
Stockholders' equity | 155,114 | 153,962 | 153,049 | 153,280 | 151,161 | ||||||||||||||
Balance Sheet (Average Balances): | |||||||||||||||||||
Total assets | $ | 2,184,385 | $ | 2,166,574 | $ | 2,088,599 | $ | 1,962,915 | $ | 1,868,194 | |||||||||
Total interest earning assets | 2,086,331 | 2,070,640 | 1,995,460 | 1,877,967 | 1,791,255 | ||||||||||||||
Loans, net of fees and costs | 1,876,648 | 1,847,736 | 1,783,322 | 1,674,215 | 1,565,861 | ||||||||||||||
Total deposits | 1,782,140 | 1,775,444 | 1,759,571 | 1,698,597 | 1,597,648 | ||||||||||||||
Non-interest bearing deposits | 253,485 | 266,675 | 296,037 | 312,297 | 295,975 | ||||||||||||||
Stockholders' equity | 156,271 | 154,179 | 153,179 | 151,791 | 157,614 | ||||||||||||||
Performance Ratios (Annualized): | |||||||||||||||||||
Return on average assets | 0.73 | % | 0.86 | % | 0.78 | % | 0.92 | % | 1.23 | % | |||||||||
Return on average equity | 10.17 | % | 12.08 | % | 10.65 | % | 11.91 | % | 14.59 | % | |||||||||
Income Statement - Third Quarter 2023 Compared to Second Quarter 2023
Net income of
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) | 2023 | 2023 | $ Change | % Change | Change due to rate | Change due to volume | |||||||||||||||
Interest income: | |||||||||||||||||||||
Due from banks | $ | 244 | $ | 275 | $ | (31 | ) | (11.3 | )% | $ | 25 | $ | (56 | ) | |||||||
Federal funds sold | 1 | 3 | (2 | ) | (66.7 | )% | 1 | (3 | ) | ||||||||||||
Investment securities - taxable (1) | 901 | 992 | (91 | ) | (9.2 | )% | (18 | ) | (73 | ) | |||||||||||
Investment securities - tax exempt (1) | 410 | 426 | (16 | ) | (3.8 | )% | (9 | ) | (7 | ) | |||||||||||
Loans held for sale | 456 | 407 | 49 | 12.0 | % | 40 | 9 | ||||||||||||||
Loans held for investment (1) | 33,526 | 31,810 | 1,716 | 5.4 | % | 1,213 | 503 | ||||||||||||||
Total loans | 33,982 | 32,217 | 1,765 | 5.5 | % | 1,253 | 512 | ||||||||||||||
Total interest income | $ | 35,538 | $ | 33,913 | $ | 1,625 | 4.8 | % | $ | 1,252 | $ | 373 | |||||||||
Interest expense: | |||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,488 | $ | 1,840 | $ | (352 | ) | (19.1 | )% | $ | 42 | $ | (394 | ) | |||||||
Money market and savings deposits | 6,755 | 5,371 | 1,384 | 25.8 | % | 796 | 588 | ||||||||||||||
Time deposits | 7,300 | 6,812 | 488 | 7.2 | % | 537 | (49 | ) | |||||||||||||
Total deposits | 15,543 | 14,023 | 1,520 | 10.8 | % | 1,375 | 145 | ||||||||||||||
Borrowings | 2,086 | 2,129 | (43 | ) | (2.0 | )% | (103 | ) | 60 | ||||||||||||
Subordinated debentures | 606 | 586 | 20 | 3.4 | % | 6 | 14 | ||||||||||||||
Total interest expense | 18,235 | 16,738 | 1,497 | 8.9 | % | 1,278 | 219 | ||||||||||||||
Net interest income differential | $ | 17,303 | $ | 17,175 | $ | 128 | 0.75 | % | $ | (26 | ) | $ | 154 | ||||||||
(1) Reflected on a tax-equivalent basis. | |||||||||||||||||||||
Interest income increased
The yield on total loans increased 19 basis points and the yield on cash and investments decreased 1 basis point combined, reflecting the impact on rates from the Federal Reserve’s monetary policy. Nearly
Total interest expense increased
Although net interest income increased quarter over quarter, the net interest margin decreased 4 basis points to 3.29% as the cost of funds outpaced the increase in yield on earnings assets. The margin was also affected by a reduction in average non-interest bearing deposits, which were down on average by
Provision for Credit Losses
The overall provision for credit losses is comprised of provisioning for funded loans as well as unfunded commitments. The combined provision decreased to
Non-interest income
The following table presents the components of non-interest income for the periods indicated:
Quarter Ended | |||||||||||||||
(Dollars in thousands) | 2023 | 2023 | $ Change | % Change | |||||||||||
Mortgage banking income | $ | 4,819 | $ | 5,050 | $ | (231 | ) | (4.6 | )% | ||||||
Wealth management income | 1,258 | 1,235 | 23 | 1.9 | % | ||||||||||
SBA loan income | 982 | 1,767 | (785 | ) | (44.4 | )% | |||||||||
Earnings on investment in life insurance | 201 | 193 | 8 | 4.1 | % | ||||||||||
Net change in the fair value of derivative instruments | 103 | 183 | (80 | ) | (43.7 | )% | |||||||||
Net change in the fair value of loans held-for-sale | 111 | (199 | ) | 310 | (155.8 | )% | |||||||||
Net change in the fair value of loans held-for-investment | (570 | ) | (219 | ) | (351 | ) | 160.3 | % | |||||||
Net (loss) gain on hedging activity | 82 | (1 | ) | 83 | (8300.0 | )% | |||||||||
Net loss on sale of investment securities available-for-sale | (3 | ) | (54 | ) | 51 | (94.4 | )% | ||||||||
Other | 1,103 | 1,169 | (66 | ) | (5.6 | )% | |||||||||
Total non-interest income | $ | 8,086 | $ | 9,124 | $ | (1,038 | ) | (11.4 | )% | ||||||
Total non-interest income decreased
SBA loan income decreased
Non-interest expense
The following table presents the components of non-interest expense for the periods indicated:
Quarter Ended | |||||||||||||||
(Dollars in thousands) | 2023 | 2023 | $ Change | % Change | |||||||||||
Salaries and employee benefits | $ | 12,420 | $ | 12,152 | $ | 268 | 2.2 | % | |||||||
Occupancy and equipment | 1,226 | 1,140 | 86 | 7.5 | % | ||||||||||
Professional fees | 1,104 | 1,004 | 100 | 10.0 | % | ||||||||||
Advertising and promotion | 848 | 1,091 | (243 | ) | (22.3 | )% | |||||||||
Data processing and software | 1,652 | 1,681 | (29 | ) | (1.7 | )% | |||||||||
244 | 245 | (1 | ) | (0.4 | )% | ||||||||||
Other | 2,524 | 2,302 | 222 | 9.6 | % | ||||||||||
Total non-interest expense | $ | 20,018 | $ | 19,615 | $ | 403 | 2.1 | % | |||||||
Salaries and employee benefits increased
Professional fees increased
Balance Sheet -
As of
Portfolio loan growth was
Total deposits increased
In September,
Consolidated stockholders’ equity of the Corporation increased by
Asset Quality Summary
The ratio of non-performing loans to total loans increased to 1.53% as of
Meridian realized net charge-offs of 0.05% of total average loans for the quarter ended
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 1.05% as of
Bank Sector Considerations
Meridian is a regional community bank with loans and deposits that are well diversified in size, type, location and industry. We manage this diversification carefully, while avoiding concentrations in business lines. Meridian’s model continues to build on our strong and stable financial position, which serves our regional customers and communities with the banking products and services needed to help build their prosperity.
As a commercial bank, the majority of Meridian's deposit base is comprised of business deposits (58%), with consumer deposits amounting to 12% at
Meridian also maintains borrowing arrangements with various correspondent banks to meet short-term liquidity needs and has access to approximately
About
“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
Contact:
cannas@meridianbanker.com
484-568-5000
MERIDIAN CORPORATION AND SUBSIDIARIES
FINANCIAL RATIOS (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
Quarter Ended | |||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
Earnings and Per Share Data: | |||||||||||||||||||
Net income | $ | 4,005 | $ | 4,645 | $ | 4,021 | $ | 4,557 | $ | 5,798 | |||||||||
Basic earnings per common share | $ | 0.36 | $ | 0.42 | $ | 0.36 | $ | 0.40 | $ | 0.49 | |||||||||
Diluted earnings per common share | $ | 0.35 | $ | 0.41 | $ | 0.34 | $ | 0.39 | $ | 0.48 | |||||||||
Common shares outstanding | 11,178 | 11,178 | 11,305 | 11,466 | 11,689 | ||||||||||||||
Performance Ratios: | |||||||||||||||||||
Return on average assets | 0.73 | % | 0.86 | % | 0.78 | % | 0.92 | % | 1.23 | % | |||||||||
Return on average equity | 10.17 | 12.08 | 10.65 | 11.91 | 14.59 | ||||||||||||||
Net interest margin (tax-equivalent) | 3.29 | 3.33 | 3.61 | 3.93 | 4.01 | ||||||||||||||
Yield on earning assets (tax-equivalent) | 6.76 | 6.57 | 6.31 | 5.88 | 5.10 | ||||||||||||||
Cost of funds | 3.63 | 3.39 | 2.83 | 2.07 | 1.17 | ||||||||||||||
Efficiency ratio | 79.09 | % | 74.80 | % | 73.16 | % | 75.61 | % | 71.72 | % | |||||||||
Asset Quality Ratios: | |||||||||||||||||||
Net charge-offs (recoveries) to average loans | 0.05 | % | 0.05 | % | 0.08 | % | 0.05 | % | 0.02 | % | |||||||||
Non-performing loans to total loans | 1.53 | 1.44 | 1.25 | 1.20 | 1.40 | ||||||||||||||
Non-performing assets to total assets | 1.38 | 1.32 | 1.11 | 1.11 | 1.20 | ||||||||||||||
Allowance for credit losses to: | |||||||||||||||||||
Total loans held for investment | 1.04 | 1.09 | 1.12 | 1.08 | 1.18 | ||||||||||||||
Total loans held for investment (excluding loans at fair value) (1) | 1.05 | 1.10 | 1.13 | 1.09 | 1.20 | ||||||||||||||
Non-performing loans | 67.61 | % | 73.97 | % | 88.41 | % | 88.66 | % | 82.20 | % | |||||||||
Capital Ratios: | |||||||||||||||||||
Book value per common share | $ | 13.88 | $ | 13.77 | $ | 13.54 | $ | 13.37 | $ | 12.93 | |||||||||
Tangible book value per common share | $ | 13.53 | $ | 13.42 | $ | 13.18 | $ | 13.01 | $ | 12.58 | |||||||||
Total equity/Total assets | 6.95 | % | 6.98 | % | 6.86 | % | 7.43 | % | 7.87 | % | |||||||||
Tangible common equity/Tangible assets - Corporation (1) | 6.79 | 6.81 | 6.70 | 7.25 | 7.67 | ||||||||||||||
Tangible common equity/Tangible assets - Bank (1) | 8.89 | 8.54 | 8.26 | 8.80 | 9.61 | ||||||||||||||
Tier 1 leverage ratio - Corporation | 7.52 | 7.46 | 7.65 | 8.13 | 8.54 | ||||||||||||||
Tier 1 leverage ratio - Bank | 9.65 | 9.22 | 9.32 | 9.95 | 10.52 | ||||||||||||||
Common tier 1 risk-based capital ratio - Corporation | 8.43 | 8.38 | 8.44 | 8.77 | 9.28 | ||||||||||||||
Common tier 1 risk-based capital ratio - Bank | 10.82 | 10.35 | 10.27 | 10.73 | 11.44 | ||||||||||||||
Tier 1 risk-based capital ratio - Corporation | 8.43 | 8.38 | 8.44 | 8.77 | 9.28 | ||||||||||||||
Tier 1 risk-based capital ratio - Bank | 10.82 | 10.35 | 10.27 | 10.73 | 11.44 | ||||||||||||||
Total risk-based capital ratio - Corporation | 11.96 | 11.49 | 11.63 | 12.05 | 12.80 | ||||||||||||||
Total risk-based capital ratio - Bank | 11.85 | % | 11.43 | % | 11.41 | % | 11.87 | % | 12.70 | % | |||||||||
(1) See Non-GAAP reconciliation in the Appendix | |||||||||||||||||||
MERIDIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
Three Months Ended | Nine Months Ended | ||||||||||||||||||
2023 | 2023 | 2022 | 2023 | 2022 | |||||||||||||||
Interest income: | |||||||||||||||||||
Loans and other finance receivables, including fees | $ | 33,980 | $ | 32,215 | $ | 21,848 | $ | 95,612 | $ | 58,187 | |||||||||
Securities - taxable | 901 | 992 | 648 | 2,853 | 1,599 | ||||||||||||||
Securities - tax-exempt | 333 | 351 | 369 | 1,038 | 1,015 | ||||||||||||||
Cash and cash equivalents | 245 | 278 | 93 | 741 | 157 | ||||||||||||||
Total interest income | 35,459 | 33,836 | 22,958 | 100,244 | 60,958 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 15,543 | 14,023 | 4,075 | 41,013 | 7,182 | ||||||||||||||
Borrowings | 2,692 | 2,715 | 857 | 7,230 | 2,166 | ||||||||||||||
Total interest expense | 18,235 | 16,738 | 4,932 | 48,243 | 9,348 | ||||||||||||||
Net interest income | 17,224 | 17,098 | 18,026 | 52,001 | 51,610 | ||||||||||||||
Provision for credit losses | 82 | 705 | 526 | 2,186 | 1,743 | ||||||||||||||
Net interest income after provision for credit losses | 17,142 | 16,393 | 17,500 | 49,815 | 49,867 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Mortgage banking income | 4,819 | 5,050 | 7,329 | 13,143 | 21,367 | ||||||||||||||
Wealth management income | 1,258 | 1,235 | 1,114 | 3,689 | 3,672 | ||||||||||||||
SBA loan income | 982 | 1,767 | 989 | 3,463 | 3,946 | ||||||||||||||
Earnings on investment in life insurance | 201 | 193 | 138 | 585 | 413 | ||||||||||||||
Net change in the fair value of derivative instruments | 103 | 183 | 127 | 217 | (713 | ) | |||||||||||||
Net change in the fair value of loans held-for-sale | 111 | (199 | ) | (237 | ) | (88 | ) | (1,094 | ) | ||||||||||
Net change in the fair value of loans held-for-investment | (570 | ) | (219 | ) | (886 | ) | (673 | ) | (2,499 | ) | |||||||||
Net (loss) gain on hedging activity | 82 | (1 | ) | 399 | 81 | 4,941 | |||||||||||||
Net loss on sale of investment securities available-for-sale | (3 | ) | (54 | ) | — | (58 | ) | — | |||||||||||
Other | 1,103 | 1,169 | 1,251 | 3,489 | 3,695 | ||||||||||||||
Total non-interest income | 8,086 | 9,124 | 10,224 | 23,848 | 33,728 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and employee benefits | 12,420 | 12,152 | 13,360 | 35,633 | 41,585 | ||||||||||||||
Occupancy and equipment | 1,226 | 1,140 | 1,191 | 3,610 | 3,619 | ||||||||||||||
Professional fees | 1,104 | 1,004 | 899 | 2,930 | 2,659 | ||||||||||||||
Advertising and promotion | 848 | 1,091 | 1,165 | 2,799 | 3,340 | ||||||||||||||
Data processing and software | 1,652 | 1,681 | 1,442 | 4,764 | 3,939 | ||||||||||||||
244 | 245 | 202 | 735 | 612 | |||||||||||||||
Other | 2,524 | 2,302 | 2,002 | 6,951 | 5,646 | ||||||||||||||
Total non-interest expense | 20,018 | 19,615 | 20,261 | 57,422 | 61,400 | ||||||||||||||
Income before income taxes | 5,210 | 5,902 | 7,463 | 16,241 | 22,195 | ||||||||||||||
Income tax expense | 1,205 | 1,257 | 1,665 | 3,568 | 4,927 | ||||||||||||||
Net income | $ | 4,005 | $ | 4,645 | $ | 5,798 | $ | 12,673 | $ | 17,268 | |||||||||
Basic earnings per common share | $ | 0.36 | $ | 0.42 | $ | 0.49 | $ | 1.14 | $ | 1.45 | |||||||||
Diluted earnings per common share | $ | 0.35 | $ | 0.41 | $ | 0.48 | $ | 1.11 | $ | 1.40 | |||||||||
Basic weighted average shares outstanding | 11,057 | 11,062 | 11,736 | 11,130 | 11,928 | ||||||||||||||
Diluted weighted average shares outstanding | 11,363 | 11,304 | 12,118 | 11,449 | 12,344 | ||||||||||||||
MERIDIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts) | 2023 | 2023 | 2023 | 2022 | 2022 | ||||||||||||||
Assets: | |||||||||||||||||||
Cash and due from banks | $ | 13,737 | $ | 10,576 | $ | 8,473 | $ | 11,299 | $ | 12,114 | |||||||||
Interest-bearing deposits at other banks | 46,022 | 36,290 | 100,030 | 27,092 | 20,774 | ||||||||||||||
Cash and cash equivalents | 59,759 | 46,866 | 108,503 | 38,391 | 32,888 | ||||||||||||||
Securities available-for-sale, at fair value | 122,218 | 126,668 | 142,933 | 135,346 | 127,999 | ||||||||||||||
Securities held-to-maturity, at amortized cost | 36,232 | 36,463 | 36,525 | 37,479 | 37,922 | ||||||||||||||
Equity investments | 2,019 | 2,097 | 2,110 | 2,086 | 2,092 | ||||||||||||||
Mortgage loans held for sale, at fair value | 23,144 | 40,422 | 35,701 | 22,243 | 33,800 | ||||||||||||||
Loans and other finance receivables, net of fees and costs | 1,885,629 | 1,859,839 | 1,818,189 | 1,743,682 | 1,610,349 | ||||||||||||||
Allowance for credit losses | (19,683 | ) | (20,242 | ) | (20,442 | ) | (18,828 | ) | (18,974 | ) | |||||||||
Loans and other finance receivables, net of the allowance for credit losses | 1,865,946 | 1,839,597 | 1,797,747 | 1,724,854 | 1,591,375 | ||||||||||||||
Restricted investment in bank stock | 8,309 | 9,157 | 10,173 | 6,931 | 5,217 | ||||||||||||||
Bank premises and equipment, net | 13,310 | 13,234 | 13,281 | 13,349 | 12,835 | ||||||||||||||
Bank owned life insurance | 28,641 | 28,440 | 28,247 | 28,055 | 22,916 | ||||||||||||||
Accrued interest receivable | 8,984 | 7,651 | 7,651 | 7,363 | 6,008 | ||||||||||||||
Other real estate owned | 1,703 | 1,703 | 1,703 | 1,703 | — | ||||||||||||||
Deferred income taxes | 4,993 | 4,258 | 4,017 | 3,936 | 5,722 | ||||||||||||||
Servicing assets | 11,835 | 12,193 | 12,125 | 12,346 | 12,807 | ||||||||||||||
899 | 899 | 899 | 899 | 899 | |||||||||||||||
Intangible assets | 3,022 | 3,073 | 3,124 | 3,175 | 3,226 | ||||||||||||||
Other assets | 39,957 | 34,156 | 25,044 | 24,072 | 26,218 | ||||||||||||||
Total assets | $ | 2,230,971 | $ | 2,206,877 | $ | 2,229,783 | $ | 2,062,228 | $ | 1,921,924 | |||||||||
Liabilities: | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Non-interest bearing | $ | 244,668 | $ | 269,174 | $ | 262,636 | $ | 301,727 | $ | 290,169 | |||||||||
Interest bearing | |||||||||||||||||||
Interest checking | 156,537 | 155,907 | 232,616 | 219,838 | 236,562 | ||||||||||||||
Money market and savings deposits | 746,599 | 710,546 | 647,904 | 697,564 | 709,127 | ||||||||||||||
Time deposits | 660,841 | 646,978 | 627,257 | 493,350 | 437,695 | ||||||||||||||
Total interest-bearing deposits | 1,563,977 | 1,513,431 | 1,507,777 | 1,410,752 | 1,383,384 | ||||||||||||||
Total deposits | 1,808,645 | 1,782,605 | 1,770,413 | 1,712,479 | 1,673,553 | ||||||||||||||
Borrowings | 177,959 | 194,636 | 233,883 | 122,082 | 23,458 | ||||||||||||||
Subordinated debentures | 50,079 | 40,348 | 40,319 | 40,346 | 40,597 | ||||||||||||||
Accrued interest payable | 7,814 | 5,612 | 3,836 | 2,389 | 1,154 | ||||||||||||||
Other liabilities | 31,360 | 29,714 | 28,283 | 31,652 | 32,001 | ||||||||||||||
Total liabilities | 2,075,857 | 2,052,915 | 2,076,734 | 1,908,948 | 1,770,763 | ||||||||||||||
Stockholders’ equity: | |||||||||||||||||||
Common stock | 13,181 | 13,181 | 13,180 | 13,156 | 13,101 | ||||||||||||||
Surplus | 79,731 | 79,650 | 79,473 | 79,072 | 78,313 | ||||||||||||||
(26,079 | ) | (26,079 | ) | (24,512 | ) | (21,821 | ) | (18,033 | ) | ||||||||||
Unearned common stock held by employee stock ownership plan | (1,403 | ) | (1,403 | ) | (1,403 | ) | (1,403 | ) | (1,602 | ) | |||||||||
Retained earnings | 102,043 | 99,434 | 96,180 | 95,815 | 92,405 | ||||||||||||||
Accumulated other comprehensive loss | (12,359 | ) | (10,821 | ) | (9,869 | ) | (11,539 | ) | (13,023 | ) | |||||||||
Total stockholders’ equity | 155,114 | 153,962 | 153,049 | 153,280 | 151,161 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,230,971 | $ | 2,206,877 | $ | 2,229,783 | $ | 2,062,228 | $ | 1,921,924 | |||||||||
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 | |||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
Interest income | $ | 35,459 | $ | 33,836 | $ | 30,947 | $ | 27,763 | $ | 22,958 | |||||||||
Interest expense | 18,235 | 16,738 | 13,270 | 9,245 | 4,932 | ||||||||||||||
Net interest income | 17,224 | 17,098 | 17,677 | 18,518 | 18,026 | ||||||||||||||
Provision for credit losses | 82 | 705 | 1,399 | 746 | 526 | ||||||||||||||
Non-interest income | 8,086 | 9,124 | 6,638 | 7,996 | 10,224 | ||||||||||||||
Non-interest expense | 20,018 | 19,615 | 17,789 | 20,047 | 20,261 | ||||||||||||||
Income before income tax expense | 5,210 | 5,902 | 5,127 | 5,721 | 7,463 | ||||||||||||||
Income tax expense | 1,205 | 1,257 | 1,106 | 1,164 | 1,665 | ||||||||||||||
Net Income | $ | 4,005 | $ | 4,645 | $ | 4,021 | $ | 4,557 | $ | 5,798 | |||||||||
Basic weighted average shares outstanding | 11,057 | 11,062 | 11,272 | 11,389 | 11,736 | ||||||||||||||
Basic earnings per common share | $ | 0.36 | $ | 0.42 | $ | 0.36 | $ | 0.40 | $ | 0.49 | |||||||||
Diluted weighted average shares outstanding | 11,363 | 11,304 | 11,656 | 11,795 | 12,118 | ||||||||||||||
Diluted earnings per common share | $ | 0.35 | $ | 0.41 | $ | 0.34 | $ | 0.39 | $ | 0.48 | |||||||||
Segment Information | |||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
(dollars in thousands) | Bank | Wealth | Mortgage | Total | Bank | Wealth | Mortgage | Total | |||||||||||||||||||||||
Net interest income | $ | 17,205 | $ | (15 | ) | $ | 34 | $ | 17,224 | $ | 17,664 | $ | 218 | $ | 144 | $ | 18,026 | ||||||||||||||
Provision for credit losses | 82 | — | — | 82 | 526 | — | — | 526 | |||||||||||||||||||||||
Net interest income after provision | 17,123 | (15 | ) | 34 | 17,142 | 17,138 | 218 | 144 | 17,500 | ||||||||||||||||||||||
Non-interest income | 1,758 | 1,258 | 5,070 | 8,086 | 1,730 | 1,114 | 7,380 | 10,224 | |||||||||||||||||||||||
Non-interest expense | 12,564 | 826 | 6,628 | 20,018 | 11,354 | 780 | 8,127 | 20,261 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 6,317 | $ | 417 | $ | (1,524 | ) | $ | 5,210 | $ | 7,514 | $ | 552 | $ | (603 | ) | $ | 7,463 | |||||||||||||
Efficiency ratio | 66 | % | 66 | % | 130 | % | 79 | % | 59 | % | 59 | % | 108 | % | 72 | % | |||||||||||||||
Nine Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||||
(dollars in thousands) | Bank | Wealth | Mortgage | Total | Bank | Wealth | Mortgage | Total | |||||||||||||||||||||||
Net interest income | $ | 51,928 | $ | (12 | ) | $ | 85 | $ | 52,001 | $ | 50,197 | $ | 628 | $ | 785 | $ | 51,610 | ||||||||||||||
Provision for credit losses | 2,186 | — | — | 2,186 | 1,743 | — | — | 1,743 | |||||||||||||||||||||||
Net interest income after provision | 49,742 | (12 | ) | 85 | 49,815 | 48,454 | 628 | 785 | 49,867 | ||||||||||||||||||||||
Non-interest income | 5,696 | 3,689 | 14,463 | 23,848 | 6,267 | 3,671 | 23,790 | 33,728 | |||||||||||||||||||||||
Non-interest expense | 35,608 | 2,704 | 19,110 | 57,422 | 32,186 | 2,480 | 26,734 | 61,400 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 19,830 | $ | 973 | $ | (4,562 | ) | $ | 16,241 | $ | 22,535 | $ | 1,819 | $ | (2,159 | ) | $ | 22,195 | |||||||||||||
Efficiency ratio | 62 | % | 74 | % | 131 | % | 76 | % | 57 | % | 58 | % | 109 | % | 72 | % | |||||||||||||||
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.
Allowance For Loan Losses to Loans, Net of Fees and Costs, Excluding PPP Loans and Loans at Fair Value | |||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
Allowance for credit losses (GAAP) | $ | 19,683 | $ | 20,242 | $ | 20,442 | $ | 18,828 | $ | 18,974 | |||||||||
Loans, net of fees and costs (GAAP) | 1,885,629 | 1,859,839 | 1,818,189 | 1,743,682 | 1,610,349 | ||||||||||||||
Less: PPP loans | (289 | ) | (187 | ) | (238 | ) | (4,579 | ) | (8,610 | ) | |||||||||
Less: Loans fair valued | (13,231 | ) | (14,403 | ) | (14,434 | ) | (14,502 | ) | (14,702 | ) | |||||||||
Loans, net of fees and costs, excluding loans at fair value and PPP loans (non-GAAP) | $ | 1,872,109 | $ | 1,845,249 | $ | 1,803,517 | $ | 1,724,601 | $ | 1,587,037 | |||||||||
Allowance for credit losses to loans, net of fees and costs (GAAP) | 1.04 | % | 1.09 | % | 1.12 | % | 1.08 | % | 1.18 | % | |||||||||
Allowance for credit losses to loans, net of fees and costs, excluding PPP loans and loans at fair value (non-GAAP) | 1.05 | % | 1.10 | % | 1.13 | % | 1.09 | % | 1.20 | % |
Tangible Common Equity Ratio Reconciliation - Corporation | |||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
Total stockholders' equity (GAAP) | $ | 155,114 | $ | 153,962 | $ | 153,049 | $ | 153,280 | $ | 151,161 | |||||||||
Less: | (3,921 | ) | (3,972 | ) | (4,023 | ) | (4,074 | ) | (4,125 | ) | |||||||||
Tangible common equity (non-GAAP) | 151,193 | 149,990 | 149,026 | 149,206 | 147,036 | ||||||||||||||
Total assets (GAAP) | 2,230,971 | 2,206,877 | 2,229,783 | 2,062,228 | 1,921,924 | ||||||||||||||
Less: | (3,921 | ) | (3,972 | ) | (4,023 | ) | (4,074 | ) | (4,125 | ) | |||||||||
Tangible assets (non-GAAP) | $ | 2,227,050 | $ | 2,202,905 | $ | 2,225,760 | $ | 2,058,154 | $ | 1,917,799 | |||||||||
Tangible common equity to tangible assets ratio - Corporation (non-GAAP) | 6.79 | % | 6.81 | % | 6.70 | % | 7.25 | % | 7.67 | % |
Tangible Common Equity Ratio Reconciliation - Bank | |||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
Total stockholders' equity (GAAP) | $ | 201,996 | $ | 192,209 | $ | 187,954 | $ | 185,039 | $ | 188,386 | |||||||||
Less: | (3,921 | ) | (3,972 | ) | (4,023 | ) | (4,074 | ) | (4,125 | ) | |||||||||
Tangible common equity (non-GAAP) | 198,075 | 188,237 | 183,931 | 180,965 | 184,261 | ||||||||||||||
Total assets (GAAP) | 2,232,297 | 2,208,252 | 2,229,721 | 2,059,557 | 1,921,714 | ||||||||||||||
Less: | (3,921 | ) | (3,972 | ) | (4,023 | ) | (4,074 | ) | (4,125 | ) | |||||||||
Tangible assets (non-GAAP) | $ | 2,228,376 | $ | 2,204,280 | $ | 2,225,698 | $ | 2,055,483 | $ | 1,917,589 | |||||||||
Tangible common equity to tangible assets ratio - Bank (non-GAAP) | 8.89 | % | 8.54 | % | 8.26 | % | 8.80 | % | 9.61 | % | |||||||||
Tangible Book Value Reconciliation | |||||||||||||||||||
2023 | 2023 | 2023 | 2022 | 2022 | |||||||||||||||
Book value per common share | $ | 13.88 | $ | 13.77 | $ | 13.54 | $ | 13.37 | $ | 12.93 | |||||||||
Less: Impact of goodwill /intangible assets | 0.35 | 0.35 | 0.36 | 0.36 | 0.35 | ||||||||||||||
Tangible book value per common share | $ | 13.53 | $ | 13.42 | $ | 13.18 | $ | 13.01 | $ | 12.58 | |||||||||
Source:
2023 GlobeNewswire, Inc., source