• Meridian Corporation Reports Second Quarter 2024 Results and Announces a Quarterly Dividend of $0.125 per Common Share

    Source: Nasdaq GlobeNewswire / 26 Jul 2024 13:09:44   America/New_York

    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, or 3%, for the quarter and $112.3 million, or 8%, 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 of 7.31%.
    • On July 25, 2024, the Board of Directors declared a quarterly cash dividend of $0.125 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 24.3% to $3.3 million, or $0.30 per share. Key highlights include a steady net interest margin at 3.06% for the quarter and a quarterly profit in our mortgage segment. Total loan growth in the first half was 6.5% as we continue to bring on new relationships and take advantage of market disruption. Real estate loan growth is particularly strong in residential and multi-family, which are both in high demand.

    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 $650 thousand, or 24.3%, to $3.3 million mainly due to a seasonal increase in net operating income from the mortgage division, as well as increased net interest income and lower quarterly provision for credit losses. Net interest income increased $237 thousand, or 1.4%, on a tax equivalent basis, as commercial loan fees of $238 thousand boosted overall interest income and out-paced the increase in interest expense. Non-interest income increased $1.3 million or 15.8%, reflecting the improved level of mortgage banking income. Non-interest expense increased $844 thousand, or 4.6%, due primarily to an increase in salaries and benefits expense, loan expenses and advertising and promotion. These increases were partially offset by a decrease in professional fees. Detailed explanations of the major categories of income and expense follow below.

    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 $1.2 million quarter-over-quarter on a tax equivalent basis, driven by the increased levels of average earning assets. Average earning assets increased by $49.0 million contributing $830 thousand to the increase. In addition, the yield on earnings assets increased 8 basis points during the period, which benefited from commercial loan fees.

    Average total loans, excluding residential loans for sale, increased $28.5 million resulting in an increase in interest income of $517 thousand. The largest drivers of this increase were commercial, commercial real estate, and small business loans which on a combined basis increased $36.0 million on average, partially offset by a decrease in average leases of $13.2 million. Home equity, residential real estate, consumer and other loans held in portfolio increased on a combined basis $5.9 million on average. The yield on total loans increased 7 basis points and the yield on cash and investments increased 13 basis points on a combined basis.

    Total interest expense increased $1.0 million, quarter-over-quarter, due to higher levels of deposits, particularly time deposits. Interest expense on total deposits increased $1.6 million while interest expense on borrowings decreased $584 thousand. Non-interest bearing balances decreased $6.7 million on average, while time deposits increased $94.7 million on average. The cost of deposits increased 14 basis points to 3.98% causing an increase of $377 thousand in interest expense. Interest expense on borrowings decreased $564 thousand due to volume changes as average borrowings decreased $46.0 million for the period, while the cost of borrowings were relatively flat period over period.

    Overall the net interest margin decreased 3 basis points to 3.06% as the cost of funds outpaced the increase in yield on earnings assets.

    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 $186 thousand to $2.7 million, from $2.9 million in the first quarter, with the provision for unfunded loan commitments representing an increase of $34 thousand of the combined provision during the current quarter. The second quarter provision for funded loans of $2.6 million was driven by an increase in overall loan portfolio growth as well as an increase in net charge-offs during the quarter, offset somewhat by a decrease in specific reserves on individually evaluated loans. This decline in the overall provision was also positively impacted by favorable changes in certain portfolio baseline loss rates and some macroeconomic factors underlying the funded loss model.

    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 $1.3 million, or 15.8%, quarter-over-quarter as mortgage banking income increased $1.8 million, or 49.1%. Mortgage loan sales increased $68.3 million or 52.6% quarter over quarter driving higher gain on sale income at a slightly lower margin. SBA and other income decreased $869 thousand combined due to lower levels of SBA loan sales and other mortgage related fees. SBA loans sold for the quarter-ended June 30, 2024 totaled $12.1 million, down $3.4 million, or 21.7%, compared to the quarter-ended March 31, 2024. The gross margin on SBA sales was 8.8% for the quarter, up from 8.1% for the previous quarter. Contributing to the increased margin on sale was an increase in the average yield on loans sold over the prior quarter.

    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 $864 thousand overall, with bank and wealth segments combined having increased $80 thousand, and the mortgage segment increased $784 thousand. Mortgage segment salaries, commissions, and employee benefits are impacted by volume and therefore increased as originations increased $85.4 million over the prior quarter.

    Professional fees decreased $469 thousand during the current quarter due to lower legal expenses. Advertising and promotion expense increased $241 thousand from the prior quarter as a result of an increase in business development expenses. Other expense increased $237 thousand from the prior quarter due to an increase in employee travel and trainings, combined with an increase in FDIC premiums.

    Balance Sheet - June 30, 2024 Compared to March 31, 2024

    Total assets increased $58.7 million, or 2.6%, to $2.4 billion as of June 30, 2024 from $2.3 billion at March 31, 2024. This increase was driven by strong loan growth and an increase in investments. Interest-bearing cash increased $1.5 million, or 10.7%, to $15.6 million as of June 30, 2024, from March 31, 2024.

    Portfolio loan growth was $33.1 million, or 1.7% quarter-over-quarter. The portfolio growth was generated from commercial & industrial loans which increased $24.3 million, or 7.4%, commercial mortgage loans which increased $11.9 million, or 1.6%, and small business loans which increased $4.9 million despite the sale of $12.1 million in small business loan during the quarter. Lease financings decreased $11.3 million, or 10.3% from March 31, 2024, partially offsetting the above noted loan growth, but this decline was expected as we continue to refocus away from lease originations. Other assets decreased by $10.2 million quarter-over-quarter due to certain SBA loan sales that settled after quarter-end.

    Total deposits increased $14.7 million, or 0.8% quarter-over-quarter, due largely to higher levels of certificates of deposits. Time deposits increased $12.5 million, or 1.6%, from largely wholesale efforts, as customers continue to opt for higher rate term deposits. Money market accounts and savings accounts decreased a combined $10.0 million while interest bearing demand deposits increased $8.9 million. Non-interest bearing deposits increased $3.5 million. Overnight borrowings increased $41.5 million, or 28.4% quarter-over-quarter, in support of loan growth, particularly residential mortgage loans available for sale which are up over $25 million seasonally.

    Total stockholders’ equity increased by $2.4 million from March 31, 2024, to $162.4 million as of June 30, 2024. Changes to equity for the current quarter included net income of $3.3 million, less dividends paid of $1.4 million, plus an increase of $361 thousand in other comprehensive income as the result of the positive impact that rising interest rates had on the investment portfolio. The Community Bank Leverage Ratio for the Bank was 9.33% at June 30, 2024.

    Asset Quality Summary

    Non-performing assets decreased $604 thousand to $37.6 million at June 30, 2024 compared to $38.2 million at March 31, 2024. As a result of the decrease, the ratio of non-performing loans to total loans decreased to 1.84% as of June 30, 2024, from 1.93% as of March 31, 2024, and the ratio of non-performing assets to total assets decreased to 1.68% as of June 30, 2024, compared to 1.74% as of March 31, 2024. The changes were primarily the result of charge-offs in addition to principal paydowns of $645 thousand on 2 commercial loans classified as non-performing.

    Meridian realized net charge-offs of 0.20% of total average loans for the quarter ended June 30, 2024, compared with 0.12% for the quarter ended March 31, 2024. The level of net charge-offs increased to $4.1 million for the quarter ended June 30, 2024, compared to net charge-offs of $2.3 million for the quarter ended March 31, 2024. Second quarter charge-offs were comprised of $1.3 million from small ticket equipment leases which are charged-off after becoming more than 120 days past due, a $1.3 million charge off of 1 commercial loan, and $1.4 million for SBA loans. There were recoveries of $237 thousand, largely related to leases.

    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 1.10% as of June 30, 2024 compared to 1.19% as of March 31, 2024. As of June 30, 2024 there were specific reserves of $7.2 million against individually evaluated loans, a decrease of $1.3 million from $8.5 million in specific reserves as of March 31, 2024. The specific reserve decline over the prior quarter was the result of a drop in both commercial and SBA loan related reserves driven by charge-offs.

    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 

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