- Net income of
$21.8 million and diluted earnings per share of$3.58 for the year endedDecember 31, 2022 , and net income of$4.6 million and diluted earnings per share of$0.77 for the fourth quarter endedDecember 31, 2022 . - Return on average assets and return on average equity for the year ended
December 31, 2022 were 1.18% and 13.87%, respectively; while the return on average assets and return on average equity for the fourth quarter of 2022 were 0.92% and 11.91%, respectively. - Net interest margin was 3.98% for the year ended
December 31, 2022 and 3.93% for the fourth quarter of 2022. - Total assets at
December 31, 2022 were$2.1 billion , compared to$1.9 billion atSeptember 30, 2022 and$1.7 billion atDecember 31, 2021 . - Fourth quarter commercial loan growth, excluding Paycheck Protection Program ("PPP") loans, was
$61.3 million , or 17.6% annualized; residential and home equity loans increased by$70.1 million . - Fourth quarter deposit growth was
$38.9 million with an$11.6 million increase in non-interest bearing deposits. - Non-interest income of
$41.7 million for the year endedDecember 31, 2022 , and$8.0 million in the fourth quarter of 2022. - Non-interest expenses of
$81.4 million for the year endedDecember 31, 2022 , and$20.0 million in the fourth quarter of 2022. - The Company repurchased 123,441 shares of its common stock at an average price of
$30.82 per share during the fourth quarter. - On
January 26, 2023 , the Board of Directors declared a quarterly cash dividend of$0.25 per common share, payableFebruary 21, 2023 to shareholders of record as ofFebruary 14, 2023 .
"On an annual basis, we fared well in a tumultuous year. Loans grew 26%, led by commercial real estate and commercial/industrial. We also generated adjustable rate mortgages for the portfolio, in shorter maturity buckets. I’m very pleased with a 3.98% net interest margin for the year. The change from a flush deposit environment to rapid rate increases and deposit outflows has been a challenge. Credit quality is good, and we experienced some non-performing loan payoffs. Our branch lite and customer self-service model helps control expenses."
"Our mortgage segment experienced a 67% decline in revenue year-over-year, resulting from the rate increases and a lack of homes for sale. The low inventory has plagued the business for the last two years and is only now showing signs of subsiding. We made dramatic cuts in expense throughout the year but still ended with a
"The SBA business was impacted by rates, as gain on sale margins reduced and transactions slowed. We have added some new lenders and expect economic conditions to be ripe for more opportunities."
Select Condensed Financial Information
As of or for the quarter ended (Unaudited) | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
(Dollars in thousands, except per share data) | |||||||||||||||||||
Income: | |||||||||||||||||||
Net income | $ | 4,557 | $ | 5,798 | $ | 5,938 | $ | 5,535 | $ | 7,719 | |||||||||
Basic earnings per common share | 0.80 | 0.99 | 0.99 | 0.92 | 1.29 | ||||||||||||||
Diluted earnings per common share | 0.77 | 0.96 | 0.96 | 0.88 | 1.24 | ||||||||||||||
Net interest income | 18,518 | 18,026 | 17,551 | 16,035 | 16,322 | ||||||||||||||
Balance Sheet: | |||||||||||||||||||
Total assets | $ | 2,062,228 | $ | 1,921,924 | $ | 1,853,019 | $ | 1,831,589 | $ | 1,713,443 | |||||||||
Loans, net of fees and costs | 1,743,682 | 1,610,349 | 1,518,893 | 1,431,906 | 1,386,457 | ||||||||||||||
Total deposits | 1,712,479 | 1,673,553 | 1,568,014 | 1,564,851 | 1,446,413 | ||||||||||||||
Non-interest bearing deposits | 301,727 | 290,169 | 291,925 | 291,379 | 274,528 | ||||||||||||||
Stockholders' equity | 153,280 | 151,161 | 156,087 | 157,684 | 165,360 | ||||||||||||||
Balance Sheet (Average Balances): | |||||||||||||||||||
Total assets | $ | 1,962,915 | $ | 1,868,194 | $ | 1,811,335 | $ | 1,752,643 | $ | 1,755,263 | |||||||||
Total interest earning assets | 1,877,967 | 1,791,255 | 1,736,547 | 1,680,070 | 1,696,473 | ||||||||||||||
Loans, net of fees and costs | 1,674,215 | 1,565,861 | 1,484,696 | 1,415,831 | 1,383,511 | ||||||||||||||
Total deposits | 1,698,597 | 1,597,648 | 1,567,325 | 1,504,241 | 1,409,534 | ||||||||||||||
Non-interest bearing deposits | 312,297 | 295,975 | 296,521 | 281,123 | 287,801 | ||||||||||||||
Stockholders' equity | 151,791 | 157,614 | 158,420 | 161,939 | 159,921 | ||||||||||||||
Performance Ratios (Annualized): | |||||||||||||||||||
Return on average assets | 0.92 | % | 1.23 | % | 1.31 | % | 1.28 | % | 1.74 | % | |||||||||
Return on average equity | 11.91 | % | 14.59 | % | 15.03 | % | 13.86 | % | 19.15 | % |
Income Statement - Fourth Quarter 2022 Compared to Third Quarter 2022
Net income was
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 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) | 2022 | 2022 | $ Change | % Change | Change due to rate | Change due to volume | ||||||||||||||||
Interest income: | ||||||||||||||||||||||
Due from banks | $ | 126 | $ | 92 | $ | 34 | 37.0 | % | $ | 49 | $ | (15 | ) | |||||||||
Federal funds sold | 3 | 1 | 2 | 200.0 | % | 1 | 1 | |||||||||||||||
Investment securities - taxable (1) | 821 | 648 | 173 | 26.7 | % | 172 | 1 | |||||||||||||||
Investment securities - tax exempt (1) | 449 | 451 | (2 | ) | (0.4 | )% | 9 | (11 | ) | |||||||||||||
Loans held for sale | 292 | 479 | (187 | ) | (39.0 | )% | 71 | (258 | ) | |||||||||||||
Loans held for investment (1) | 26,150 | 21,371 | 4,779 | 22.4 | % | 3,231 | 1,548 | |||||||||||||||
Total loans | 26,442 | 21,850 | 4,592 | 21.0 | % | 3,302 | 1,290 | |||||||||||||||
Total interest income | 27,841 | 23,042 | 4,799 | 20.8 | % | 3,533 | 1,266 | |||||||||||||||
Interest expense: | ||||||||||||||||||||||
Interest-bearing demand deposits | $ | 1,388 | $ | 798 | $ | 590 | 73.9 | % | $ | 589 | $ | 1 | ||||||||||
Money market and savings deposits | 3,851 | 2,075 | 1,776 | 85.6 | % | 1,813 | (37 | ) | ||||||||||||||
Time deposits | 2,976 | 1,202 | 1,774 | 147.6 | % | 1,385 | 389 | |||||||||||||||
Total deposits | 8,215 | 4,075 | 4,140 | 101.6 | % | 3,787 | 353 | |||||||||||||||
Borrowings | 439 | 266 | 173 | 65.0 | % | 206 | (33 | ) | ||||||||||||||
Subordinated debentures | 591 | 591 | — | — | % | — | — | |||||||||||||||
Total interest expense | 9,245 | 4,932 | 4,313 | 87.4 | % | 3,993 | 320 | |||||||||||||||
Net interest income differential | $ | 18,596 | $ | 18,110 | $ | 486 | 2.68 | % | $ | (460 | ) | $ | 946 | |||||||||
(1) Reflected on a tax-equivalent basis. |
Interest income increased
Interest expense increased
Net interest margin decreased 8 basis points to 3.93% for the fourth quarter from 4.01% for third the quarter, as retail deposits experienced pent-up repricing and wholesale funding repriced quicker than loans at the tail end of the quarter. Excluding the impact from PPP, net interest margin decreased 7 basis points to 3.92% from 3.99%. A reconciliation of this non-GAAP measure is included in the Appendix.
Provision for loans losses
The provision for loan losses increased
Non-interest income
The following table presents the components of non-interest income for the periods indicated:
Quarter Ended | ||||||||||||||
(Dollars in thousands) | 2022 | 2022 | $ Change | % Change | ||||||||||
Mortgage banking income | $ | 3,958 | $ | 7,329 | $ | (3,371 | ) | (46.0 | )% | |||||
Wealth management income | 1,061 | 1,114 | (53 | ) | (4.8 | )% | ||||||||
SBA loan income | 522 | 989 | (467 | ) | (47.2 | )% | ||||||||
Earnings on investment in life insurance | 140 | 138 | 2 | 1.4 | % | |||||||||
Net change in the fair value of derivative instruments | 10 | 127 | (117 | ) | (92.1 | )% | ||||||||
Net change in the fair value of loans held-for-sale | 249 | (237 | ) | 486 | (205.1 | )% | ||||||||
Net change in the fair value of loans held-for-investment | 91 | (886 | ) | 977 | (110.3 | )% | ||||||||
Net gain on hedging activity | 498 | 399 | 99 | 24.8 | % | |||||||||
Service charges | 35 | 32 | 3 | 9.4 | % | |||||||||
Other | 1,432 | 1,219 | 213 | 17.5 | % | |||||||||
Total non-interest income | $ | 7,996 | $ | 10,224 | $ | (2,228 | ) | (21.8 | )% |
Total non-interest income decreased
SBA loan income decreased
Wealth management income decreased
Non-interest expense
The following table presents the components of non-interest expense for the periods indicated:
Quarter Ended | ||||||||||||||
(Dollars in thousands) | 2022 | 2022 | $ Change | % Change | ||||||||||
Salaries and employee benefits | $ | 12,794 | $ | 13,360 | $ | (566 | ) | (4.2 | )% | |||||
Occupancy and equipment | 1,218 | 1,191 | 27 | 2.3 | % | |||||||||
Professional fees | 976 | 899 | 77 | 8.6 | % | |||||||||
Advertising and promotion | 996 | 1,165 | (169 | ) | (14.5 | )% | ||||||||
Data processing | 677 | 574 | 103 | 17.9 | % | |||||||||
Information technology | 836 | 868 | (32 | ) | (3.7 | )% | ||||||||
181 | 202 | (21 | ) | (10.4 | )% | |||||||||
Other | 2,369 | 2,002 | 367 | 18.3 | % | |||||||||
Total non-interest expense | $ | 20,047 | $ | 20,261 | $ | (214 | ) | (1.1 | )% |
Salaries and employee benefits decreased
Professional fees increased
Balance Sheet -
As of
Portfolio loan growth, excluding PPP loans, was
Total deposits increased
Consolidated stockholders’ equity of the Corporation increased as a result of net income of
The following table presents capital ratios at the dates indicated:
2022 | 2022 | ||||
Stockholders' equity to total assets | 7.43 | % | 7.87 | % | |
Tangible common equity to tangible assets (1) | 7.25 | % | 7.67 | % | |
Tier 1 leverage ratio - Corporation | 8.13 | % | 8.54 | % | |
Common tier 1 risk-based capital ratio - Corporation | 8.77 | % | 9.28 | % | |
Tier 1 risk-based capital ratio - Corporation | 8.77 | % | 9.28 | % | |
Total risk-based capital ratio - Corporation | 12.05 | % | 12.80 | % | |
(1) See Non-GAAP reconciliation in the Appendix |
Asset Quality Summary
Meridian's strong credit culture remains focused on asset quality, while working with customers to navigate current economic challenges. As a result of continuing work-out process, several non-performing assets moved forward with positive changes in underlying credit position. Three non-performing loans paid down, paid off or moved to OREO during the period. The ratio of non-performing loans to total loans decreased to 1.20% as of
Meridian realized net charge-offs of 0.05% of total average loans for the quarter ended
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, the impact of the COVID-19 pandemic and government responses thereto; on the
MERIDIAN CORPORATION AND SUBSIDIARIES
FINANCIAL RATIOS (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
Quarter Ended | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Earnings and Per Share Data: | |||||||||||||||||||
Net income | $ | 4,557 | $ | 5,798 | $ | 5,938 | $ | 5,535 | $ | 7,719 | |||||||||
Basic earnings per common share | $ | 0.80 | $ | 0.99 | $ | 0.99 | $ | 0.92 | $ | 1.29 | |||||||||
Diluted earnings per common share | $ | 0.77 | $ | 0.96 | $ | 0.96 | $ | 0.88 | $ | 1.24 | |||||||||
Common shares outstanding | 5,733 | 5,844 | 6,037 | 6,129 | 6,108 | ||||||||||||||
Performance Ratios: | |||||||||||||||||||
Return on average assets | 0.92 | % | 1.23 | % | 1.31 | % | 1.28 | % | 1.74 | % | |||||||||
Return on average equity | 11.91 | 14.59 | 15.03 | 13.86 | 19.15 | ||||||||||||||
Net interest margin (tax-equivalent) | 3.93 | 4.01 | 4.07 | 3.89 | 3.83 | ||||||||||||||
Net interest margin (tax-equivalent, excluding PPP loans and borrowings) (1) | 3.92 | 3.99 | 3.95 | 3.82 | 3.76 | ||||||||||||||
Yield on earning assets (tax-equivalent) | 5.88 | 5.10 | 4.65 | 4.35 | 4.28 | ||||||||||||||
Yield on earning assets (tax-equivalent, excluding PPP loans) (1) | 5.88 | 5.09 | 4.54 | 4.31 | 4.23 | ||||||||||||||
Cost of funds | 2.07 | 1.17 | 0.61 | 0.50 | 0.49 | ||||||||||||||
Efficiency ratio | 75.61 | % | 71.72 | % | 70.49 | % | 73.56 | % | 71.05 | % | |||||||||
Asset Quality Ratios: | |||||||||||||||||||
Net charge-offs (recoveries) to average loans | 0.05 | % | 0.02 | % | 0.03 | % | 0.04 | % | 0.00 | % | |||||||||
Non-performing loans to total loans | 1.20 | 1.40 | 1.46 | 1.51 | 1.57 | ||||||||||||||
Non-performing assets to total assets | 1.11 | 1.20 | 1.24 | 1.25 | 1.34 | ||||||||||||||
Allowance for loan losses to: | |||||||||||||||||||
Total loans held for investment | 1.08 | 1.18 | 1.24 | 1.31 | 1.35 | ||||||||||||||
Total loans held for investment (excluding loans at fair value and PPP loans) (1) | 1.09 | 1.20 | 1.27 | 1.38 | 1.46 | ||||||||||||||
Non-performing loans | 88.66 | % | 82.20 | % | 81.82 | % | 82.48 | % | 81.60 | % | |||||||||
Capital Ratios: | |||||||||||||||||||
Book value per common share | $ | 26.74 | $ | 25.86 | $ | 25.85 | $ | 25.73 | $ | 27.07 | |||||||||
Tangible book value per common share | $ | 26.03 | $ | 25.16 | $ | 25.16 | $ | 25.04 | $ | 26.37 | |||||||||
Total equity/Total assets | 7.43 | % | 7.87 | % | 8.42 | % | 8.61 | % | 9.65 | % | |||||||||
Tangible common equity/Tangible assets - Corporation (1) | 7.25 | 7.67 | 8.22 | 8.40 | 9.42 | ||||||||||||||
Tangible common equity/Tangible assets - Bank (1) | 8.80 | 9.61 | 10.17 | 10.40 | 11.54 | ||||||||||||||
Tier 1 leverage ratio - Corporation | 8.13 | 8.54 | 8.87 | 9.10 | 9.39 | ||||||||||||||
Tier 1 leverage ratio - Bank | 9.95 | 10.52 | 10.86 | 11.20 | 11.51 | ||||||||||||||
Common tier 1 risk-based capital ratio - Corporation | 8.77 | 9.28 | 9.79 | 10.09 | 10.83 | ||||||||||||||
Common tier 1 risk-based capital ratio - Bank | 10.73 | 11.44 | 11.98 | 12.41 | 13.27 | ||||||||||||||
Tier 1 risk-based capital ratio - Corporation | 8.77 | 9.28 | 9.79 | 10.09 | 10.83 | ||||||||||||||
Tier 1 risk-based capital ratio - Bank | 10.73 | 11.44 | 11.98 | 12.41 | 13.27 | ||||||||||||||
Total risk-based capital ratio - Corporation | 12.05 | 12.80 | 13.50 | 13.91 | 14.81 | ||||||||||||||
Total risk-based capital ratio - Bank | 11.87 | % | 12.70 | % | 13.33 | % | 13.76 | % | 14.63 | % | |||||||||
(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 | Year Months Ended | ||||||||||||||||||
2022 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||
Interest income: | |||||||||||||||||||
Loans and other finance receivables, including fees | $ | 26,440 | $ | 21,848 | $ | 17,535 | $ | 84,627 | $ | 68,822 | |||||||||
Securities - taxable | 821 | 648 | 387 | 2,420 | 1,463 | ||||||||||||||
Securities - tax-exempt | 373 | 369 | 303 | 1,388 | 1,189 | ||||||||||||||
Cash and cash equivalents | 129 | 93 | 23 | 286 | 48 | ||||||||||||||
Total interest income | 27,763 | 22,958 | 18,248 | 88,721 | 71,522 | ||||||||||||||
Interest expense: | |||||||||||||||||||
Deposits | 8,215 | 4,075 | 1,233 | 15,397 | 5,494 | ||||||||||||||
Borrowings | 1,030 | 857 | 693 | 3,196 | 2,917 | ||||||||||||||
Total interest expense | 9,245 | 4,932 | 1,926 | 18,593 | 8,411 | ||||||||||||||
Net interest income | 18,518 | 18,026 | 16,322 | 70,128 | 63,111 | ||||||||||||||
Provision for loan losses | 746 | 526 | (222 | ) | 2,488 | 1,070 | |||||||||||||
Net interest income after provision for loan losses | 17,772 | 17,500 | 16,544 | 67,640 | 62,041 | ||||||||||||||
Non-interest income: | |||||||||||||||||||
Mortgage banking income | 3,958 | 7,329 | 13,639 | 25,325 | 75,932 | ||||||||||||||
Wealth management income | 1,061 | 1,114 | 1,270 | 4,733 | 4,801 | ||||||||||||||
SBA loan income | 522 | 989 | 1,475 | 4,467 | 6,898 | ||||||||||||||
Earnings on investment in life insurance | 140 | 138 | 141 | 553 | 365 | ||||||||||||||
Net change in the fair value of derivative instruments | 10 | 127 | (907 | ) | (703 | ) | (4,338 | ) | |||||||||||
Net change in the fair value of loans held-for-sale | 249 | (237 | ) | (147 | ) | (844 | ) | (3,311 | ) | ||||||||||
Net change in the fair value of loans held-for-investment | 91 | (886 | ) | (165 | ) | (2,408 | ) | (189 | ) | ||||||||||
Net gain on hedging activity | 498 | 399 | 563 | 5,439 | 2,961 | ||||||||||||||
Net gain on sale of investment securities available-for-sale | — | — | 73 | — | 435 | ||||||||||||||
Service charges | 35 | 32 | 29 | 125 | 129 | ||||||||||||||
Other | 1,432 | 1,219 | 1,115 | 5,037 | 4,305 | ||||||||||||||
Total non-interest income | 7,996 | 10,224 | 17,086 | 41,724 | 87,988 | ||||||||||||||
Non-interest expense: | |||||||||||||||||||
Salaries and employee benefits | 12,794 | 13,360 | 17,042 | 54,378 | 78,866 | ||||||||||||||
Occupancy and equipment | 1,218 | 1,191 | 1,085 | 4,837 | 4,545 | ||||||||||||||
Professional fees | 976 | 899 | 929 | 3,635 | 3,558 | ||||||||||||||
Advertising and promotion | 996 | 1,165 | 919 | 4,336 | 3,714 | ||||||||||||||
Data processing | 677 | 574 | 484 | 2,310 | 2,150 | ||||||||||||||
Information technology | 836 | 868 | 867 | 3,142 | 2,232 | ||||||||||||||
181 | 202 | 131 | 793 | 609 | |||||||||||||||
Other | 2,369 | 2,002 | 2,280 | 8,014 | 8,053 | ||||||||||||||
Total non-interest expense | 20,047 | 20,261 | 23,737 | 81,445 | 103,727 | ||||||||||||||
Income before income taxes | 5,721 | 7,463 | 9,893 | 27,919 | 46,302 | ||||||||||||||
Income tax expense | 1,164 | 1,665 | 2,174 | 6,091 | 10,717 | ||||||||||||||
Net income | $ | 4,557 | $ | 5,798 | $ | 7,719 | $ | 21,828 | $ | 35,585 | |||||||||
Basic earnings per common share | $ | 0.80 | $ | 0.99 | $ | 1.29 | $ | 3.70 | $ | 5.91 | |||||||||
Diluted earnings per common share | $ | 0.77 | $ | 0.96 | $ | 1.24 | $ | 3.58 | $ | 5.73 | |||||||||
Basic weighted average shares outstanding | 5,695 | 5,868 | 5,978 | 5,896 | 6,019 | ||||||||||||||
Diluted weighted average shares outstanding | 5,898 | 6,059 | 6,210 | 6,102 | 6,206 |
MERIDIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Assets: | |||||||||||||||||||
Cash and due from banks | $ | 11,299 | $ | 12,114 | $ | 8,280 | $ | 11,155 | $ | 3,966 | |||||||||
Interest-bearing deposits at other banks | 27,092 | 20,774 | 28,813 | 44,867 | 19,514 | ||||||||||||||
Federal funds sold | — | — | — | 12,866 | — | ||||||||||||||
Cash and cash equivalents | 38,391 | 32,888 | 37,093 | 68,888 | 23,480 | ||||||||||||||
Securities available-for-sale, at fair value | 135,346 | 127,999 | 129,288 | 130,653 | 159,302 | ||||||||||||||
Securities held-to-maturity, at amortized cost | 37,479 | 37,922 | 37,111 | 34,977 | 6,372 | ||||||||||||||
Equity investments | 2,086 | 2,092 | 2,153 | 2,240 | 2,354 | ||||||||||||||
Mortgage loans held for sale, at fair value | 22,243 | 33,800 | 58,938 | 81,258 | 80,882 | ||||||||||||||
Loans, net of fees and costs | 1,743,682 | 1,610,349 | 1,518,893 | 1,431,906 | 1,386,457 | ||||||||||||||
Allowance for loan and lease losses | (18,828 | ) | (18,974 | ) | (18,805 | ) | (18,826 | ) | (18,758 | ) | |||||||||
Loans, net of the allowance for loan and lease losses | 1,724,854 | 1,591,375 | 1,500,088 | 1,413,080 | 1,367,699 | ||||||||||||||
Restricted investment in bank stock | 6,931 | 5,217 | 4,719 | 4,330 | 5,117 | ||||||||||||||
Bank premises and equipment, net | 13,349 | 12,835 | 12,185 | 11,883 | 11,806 | ||||||||||||||
Bank owned life insurance | 28,055 | 22,916 | 22,778 | 22,641 | 22,503 | ||||||||||||||
Accrued interest receivable | 7,363 | 6,008 | 5,108 | 4,848 | 5,009 | ||||||||||||||
Other real estate owned | 1,703 | — | — | — | — | ||||||||||||||
Deferred income taxes | 3,936 | 5,722 | 4,467 | 3,190 | 1,413 | ||||||||||||||
Servicing assets | 12,346 | 12,807 | 12,860 | 13,396 | 12,765 | ||||||||||||||
899 | 899 | 899 | 899 | 899 | |||||||||||||||
Intangible assets | 3,175 | 3,226 | 3,277 | 3,328 | 3,379 | ||||||||||||||
Other assets | 24,072 | 26,218 | 22,055 | 35,978 | 10,463 | ||||||||||||||
Total assets | $ | 2,062,228 | $ | 1,921,924 | $ | 1,853,019 | $ | 1,831,589 | $ | 1,713,443 | |||||||||
Liabilities: | |||||||||||||||||||
Deposits: | |||||||||||||||||||
Non-interest bearing | $ | 301,727 | $ | 290,169 | $ | 291,925 | $ | 291,379 | $ | 274,528 | |||||||||
Interest bearing | |||||||||||||||||||
Interest checking | 219,838 | 236,562 | 205,298 | 252,298 | 268,248 | ||||||||||||||
Money market and savings deposits | 697,564 | 709,127 | 728,886 | 688,117 | 697,628 | ||||||||||||||
Time deposits | 493,350 | 437,695 | 341,905 | 333,057 | 206,009 | ||||||||||||||
Total interest-bearing deposits | 1,410,752 | 1,383,384 | 1,276,089 | 1,273,472 | 1,171,885 | ||||||||||||||
Total deposits | 1,712,479 | 1,673,553 | 1,568,014 | 1,564,851 | 1,446,413 | ||||||||||||||
Short-term borrowings | 122,082 | 23,458 | 59,136 | 36,136 | 41,344 | ||||||||||||||
Subordinated debentures | 40,346 | 40,597 | 40,567 | 40,538 | 40,508 | ||||||||||||||
Accrued interest payable | 2,389 | 1,154 | 146 | 575 | 31 | ||||||||||||||
Other liabilities | 31,652 | 32,001 | 29,069 | 31,805 | 19,787 | ||||||||||||||
Total liabilities | 1,908,948 | 1,770,763 | 1,696,932 | 1,673,905 | 1,548,083 | ||||||||||||||
Stockholders’ equity: | |||||||||||||||||||
Common stock | 6,578 | 6,566 | 6,561 | 6,556 | 6,535 | ||||||||||||||
Surplus | 85,650 | 84,848 | 84,359 | 84,177 | 83,663 | ||||||||||||||
(21,821 | ) | (18,033 | ) | (11,896 | ) | (8,860 | ) | (8,860 | ) | ||||||||||
Unearned common stock held by employee stock ownership plan | (1,403 | ) | (1,602 | ) | (1,602 | ) | (1,602 | ) | (1,602 | ) | |||||||||
Retained earnings | 95,815 | 92,405 | 87,815 | 83,104 | 84,916 | ||||||||||||||
Accumulated other comprehensive (loss) income | (11,539 | ) | (13,023 | ) | (9,150 | ) | (5,691 | ) | 708 | ||||||||||
Total stockholders’ equity | 153,280 | 151,161 | 156,087 | 157,684 | 165,360 | ||||||||||||||
Total liabilities and stockholders’ equity | $ | 2,062,228 | $ | 1,921,924 | $ | 1,853,019 | $ | 1,831,589 | $ | 1,713,443 |
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 | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Interest income | $ | 27,763 | $ | 22,958 | $ | 20,037 | $ | 17,964 | $ | 18,248 | |||||||||
Interest expense | 9,245 | 4,932 | 2,486 | 1,929 | 1,926 | ||||||||||||||
Net interest income | 18,518 | 18,026 | 17,551 | 16,035 | 16,322 | ||||||||||||||
Provision (credit) for loan losses | 746 | 526 | 602 | 615 | (222 | ) | |||||||||||||
Non-interest income | 7,996 | 10,224 | 10,403 | 13,102 | 17,086 | ||||||||||||||
Non-interest expense | 20,047 | 20,261 | 19,706 | 21,433 | 23,737 | ||||||||||||||
Income before income tax expense | 5,721 | 7,463 | 7,646 | 7,089 | 9,893 | ||||||||||||||
Income tax expense | 1,164 | 1,665 | 1,708 | 1,554 | 2,174 | ||||||||||||||
Net Income | $ | 4,557 | $ | 5,798 | $ | 5,938 | $ | 5,535 | $ | 7,719 | |||||||||
Basic weighted average shares outstanding | 5,695 | 5,868 | 5,999 | 6,023 | 5,978 | ||||||||||||||
Basic earnings per common share | $ | 0.80 | $ | 0.99 | $ | 0.99 | $ | 0.92 | $ | 1.29 | |||||||||
Diluted weighted average shares outstanding | 5,898 | 6,059 | 6,199 | 6,262 | 6,210 | ||||||||||||||
Diluted earnings per common share | $ | 0.77 | $ | 0.96 | $ | 0.96 | $ | 0.88 | $ | 1.24 |
Segment Information | |||||||||||||||||||||||||||||||
Three Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
(dollars in thousands) | Bank | Wealth | Mortgage | Total | Bank | Wealth | Mortgage | Total | |||||||||||||||||||||||
Net interest income | $ | 18,376 | $ | 68 | $ | 74 | $ | 18,518 | $ | 15,931 | $ | 25 | $ | 366 | $ | 16,322 | |||||||||||||||
Provision for loan losses | 746 | — | — | 746 | (222 | ) | — | — | (222 | ) | |||||||||||||||||||||
Net interest income after provision | 17,630 | 68 | 74 | 17,772 | 16,153 | 25 | 366 | 16,544 | |||||||||||||||||||||||
Non-interest income | 1,291 | 1,061 | 5,644 | 7,996 | 2,305 | 1,270 | 13,511 | 17,086 | |||||||||||||||||||||||
Non-interest expense | 12,939 | 918 | 6,190 | 20,047 | 11,407 | 1,009 | 11,321 | 23,737 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 5,982 | $ | 211 | $ | (472 | ) | $ | 5,721 | $ | 7,051 | $ | 286 | $ | 2,556 | $ | 9,893 | ||||||||||||||
Efficiency ratio | 65.79 | % | 81.31 | % | 108.25 | % | 75.61 | % | 62.55 | % | 77.92 | % | 81.58 | % | 71.05 | % |
Year Months Ended | Year Months Ended | ||||||||||||||||||||||||||||||
(dollars in thousands) | Bank | Wealth | Mortgage | Total | Bank | Wealth | Mortgage | Total | |||||||||||||||||||||||
Net interest income | $ | 68,570 | $ | 697 | $ | 861 | $ | 70,128 | $ | 61,032 | $ | 15 | $ | 2,064 | $ | 63,111 | |||||||||||||||
Provision for loan losses | 2,488 | — | — | 2,488 | 1,070 | — | — | 1,070 | |||||||||||||||||||||||
Net interest income after provision | 66,082 | 697 | 861 | 67,640 | 59,962 | 15 | 2,064 | 62,041 | |||||||||||||||||||||||
Non-interest income | 7,556 | 4,732 | 29,436 | 41,724 | 10,779 | 4,802 | 72,407 | 87,988 | |||||||||||||||||||||||
Non-interest expense | 45,123 | 3,399 | 32,923 | 81,445 | 40,392 | 3,496 | 59,839 | 103,727 | |||||||||||||||||||||||
Income (loss) before income taxes | $ | 28,515 | $ | 2,030 | $ | (2,626 | ) | $ | 27,919 | $ | 30,349 | $ | 1,321 | $ | 14,632 | $ | 46,302 | ||||||||||||||
Efficiency ratio | 59.27 | % | 62.61 | % | 108.67 | % | 72.81 | % | 56.25 | % | 72.58 | % | 80.35 | % | 68.65 | % |
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.
Net Interest Margin, (TEY), Excluding PPP Loans & PPPLF Borrowings Yield on Interest Earning Assets, (TEY), Excluding PPP income | ||||||||||||||
Q4'2022 | Q3'2022 | Q2'2022 | Q1'2022 | Q4'2021 | ||||||||||
Net interest margin (TEY) (GAAP) | 3.93 | % | 4.01 | % | 4.07 | % | 3.89 | % | 3.83 | % | ||||
Impact of PPP loans and PPPLF borrowings | (0.01 | )% | (0.02 | )% | (0.12 | )% | (0.07 | )% | (0.07 | )% | ||||
Net interest margin (TEY), excluding PPP loans and PPPLF borrowings | 3.92 | % | 3.99 | % | 3.95 | % | 3.82 | % | 3.76 | % | ||||
Yield on interest earning assets, tax equivalent (GAAP) | 5.88 | % | 5.10 | % | 4.65 | % | 4.35 | % | 4.28 | % | ||||
Impact of PPP loans | — | % | (0.01 | )% | (0.11 | )% | (0.04 | )% | (0.05 | )% | ||||
Yield on interest earning assets (TEY), excluding PPP income | 5.88 | % | 5.09 | % | 4.54 | % | 4.31 | % | 4.23 | % |
Allowance For Loan Losses to Loans, Net of Fees and Costs, Excluding PPP Loans and Loans at Fair Value | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Allowance for loan losses (GAAP) | $ | 18,828 | $ | 18,974 | $ | 18,805 | $ | 18,826 | $ | 18,758 | |||||||||
Loans, net of fees and costs (GAAP) | 1,743,682 | 1,610,349 | 1,518,893 | 1,431,906 | 1,386,457 | ||||||||||||||
Less: PPP loans | (4,579 | ) | (8,610 | ) | (21,460 | ) | (49,680 | ) | (88,245 | ) | |||||||||
Less: Loans fair valued | (14,502 | ) | (14,702 | ) | (16,212 | ) | (17,375 | ) | (17,558 | ) | |||||||||
Loans, net of fees and costs, excluding loans at fair value and PPP loans (non-GAAP) | $ | 1,724,601 | $ | 1,587,037 | $ | 1,481,221 | $ | 1,364,851 | $ | 1,280,654 | |||||||||
Allowance for loan losses to loans, net of fees and costs (GAAP) | 1.08 | % | 1.18 | % | 1.24 | % | 1.31 | % | 1.35 | % | |||||||||
Allowance for loan losses to loans, net of fees and costs, excluding PPP loans and loans at fair value (non-GAAP) | 1.09 | % | 1.20 | % | 1.27 | % | 1.38 | % | 1.46 | % |
Tangible Common Equity Ratio Reconciliation - Corporation | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Total stockholders' equity (GAAP) | $ | 153,280 | $ | 151,161 | $ | 156,087 | $ | 157,684 | $ | 165,360 | |||||||||
Less: | (4,074 | ) | (4,125 | ) | (4,176 | ) | (4,227 | ) | (4,278 | ) | |||||||||
Tangible common equity (non-GAAP) | 149,206 | 147,036 | 151,911 | 153,457 | 161,082 | ||||||||||||||
Total assets (GAAP) | 2,062,228 | 1,921,924 | 1,853,019 | 1,831,589 | 1,713,443 | ||||||||||||||
Less: | (4,074 | ) | (4,125 | ) | (4,176 | ) | (4,227 | ) | (4,278 | ) | |||||||||
Tangible assets (non-GAAP) | $ | 2,058,154 | $ | 1,917,799 | $ | 1,848,843 | $ | 1,827,362 | $ | 1,709,165 | |||||||||
Tangible common equity to tangible assets ratio - Corporation (non-GAAP) | 7.25 | % | 7.67 | % | 8.22 | % | 8.40 | % | 9.42 | % |
Tangible Common Equity Ratio Reconciliation - Bank | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Total stockholders' equity (GAAP) | $ | 185,039 | $ | 188,386 | $ | 192,212 | $ | 194,347 | $ | 201,486 | |||||||||
Less: | (4,074 | ) | (4,125 | ) | (4,176 | ) | (4,227 | ) | (4,278 | ) | |||||||||
Tangible common equity (non-GAAP) | 180,965 | 184,261 | 188,036 | 190,120 | 197,208 | ||||||||||||||
Total assets (GAAP) | 2,059,557 | 1,921,714 | 1,852,998 | 1,831,461 | 1,713,318 | ||||||||||||||
Less: | (4,074 | ) | (4,125 | ) | (4,176 | ) | (4,227 | ) | (4,278 | ) | |||||||||
Tangible assets (non-GAAP) | $ | 2,055,483 | $ | 1,917,589 | $ | 1,848,822 | $ | 1,827,234 | $ | 1,709,040 | |||||||||
Tangible common equity to tangible assets ratio - Bank (non-GAAP) | 8.80 | % | 9.61 | % | 10.17 | % | 10.40 | % | 11.54 | % | |||||||||
Tangible Book Value Reconciliation | |||||||||||||||||||
2022 | 2022 | 2022 | 2022 | 2021 | |||||||||||||||
Book value per common share | $ | 26.74 | $ | 25.86 | $ | 25.85 | $ | 25.73 | $ | 27.07 | |||||||||
Less: Impact of goodwill /intangible assets | 0.71 | 0.70 | 0.69 | 0.69 | 0.70 | ||||||||||||||
Tangible book value per common share | $ | 26.03 | $ | 25.16 | $ | 25.16 | $ | 25.04 | $ | 26.37 |
Contact:
cannas@meridianbanker.com
484-568-5000
Source:
2023 GlobeNewswire, Inc., source