MALVERN, Pa., Oct. 24, 2024 (GLOBE NEWSWIRE) -- Meridian Corporation (Nasdaq: MRBK) today reported:
| Three Months Ended | ||||||||
| (Dollars in thousands, except per share data) (Unaudited) | September 30,
| June 30,2024 | September 30,2023 | |||||
| Income: | ||||||||
| Net income | $ | 4,743 | $ | 3,326 | $ | 4,005 | ||
| Diluted earnings per common share | $ | 0.42 | $ | 0.30 | $ | 0.35 | ||
| Pre-tax, pre-provision income (1) | $ | 8,527 | $ | 7,072 | $ | 5,292 | ||
| (1) See Non-GAAP reconciliation in the Appendix | ||||||||
- Net income for the quarter ended September 30, 2024 was $4.7 million and pre-tax, pre-provision income was $8.5 million1.
- Return on average assets and return on average equity for the third quarter of 2024 were 0.80% and 11.41%, respectively.
- Net interest margin was 3.20% for the third quarter of 2024, with a loan yield of 7.41%.
- Total assets at September 30, 2024 were $2.4 billion, compared to $2.4 billion at June 30, 2024 and $2.2 billion at September 30, 2023.
- Commercial loans, excluding leases, increased $30.0 million, or 2% for the quarter and $158.0 million, or 11% year over year.
- Third quarter deposit growth was $63.5 million, or 3%, and $170.3 million, or 9.4% year over year.
- Non-interest-bearing deposits were up $13.2 million or 6%, quarter over quarter.
- On October 22, 2024, the Board of Directors declared a quarterly cash dividend of $0.125 per common share, payable November 19, 2024 to shareholders of record as of November 12, 2024.
"Our third quarter earnings showed significant improvement from the second quarter, increasing by 42.6% to $4.7 million, or $0.42 per share. Key highlights include an improving net interest margin at 3.20% for the quarter, and strong results from our wealth and mortgage segments. Robust loan growth of 7.2% for the first nine months of the year reflects our strong sales culture and healthy economic conditions in our primary market areas. We have great systems for lenders to be more effective, and that same technology for our customers to bank entirely online, which leads to better efficiencies. Deposit growth is consistent, and we are evaluating deposit-rich segments to accelerate growth that is less reliant on branch networks.
Our wealth segment is benefiting from local disruption and the cross-selling from our commercial/industrial and CRE lending units. A recent hire from a large local bank has accelerated growth and has a pipeline for adding advisors. The mortgage segment has recovered from the rate shock, and despite a continued lack of homes for sale, is hitting volume levels similar to pre-2019. The hard decisions made to cut back expenses and reposition the business are paying off. And if mortgage rates fall in 2025, there are many refinance opportunities.
Since starting the bank in 2004, Meridian has built a great reputation for responsiveness and consistency. The business community heavily relies on these qualities in a bank to build and grow themselves. We are the go-to bank in the Philadelphia metro market, and in a great position to build ever larger market share."
Select Condensed Financial Information
| As of or for the quarter ended (Unaudited) | |||||||||||||||||||
| September 30, 2024 | June 30,
| March 31, 2024 | December 31,
| September 30, 2023 | |||||||||||||||
| (Dollars in thousands, except per share data) | |||||||||||||||||||
| Income: | |||||||||||||||||||
| Net income | $ | 4,743 | $ | 3,326 | $ | 2,676 | $ | 571 | $ | 4,005 | |||||||||
| Basic earnings per common share | 0.43 | 0.30 | 0.24 | 0.05 | 0.36 | ||||||||||||||
| Diluted earnings per common share | 0.42 | 0.30 | 0.24 | 0.05 | 0.35 | ||||||||||||||
| Net interest income | 18,242 | 16,846 | 16,609 | 16,942 | 17,224 | ||||||||||||||
| Balance Sheet: | |||||||||||||||||||
| Total assets | $ | 2,387,721 | $ | 2,351,584 | $ | 2,292,923 | $ | 2,246,193 | $ | 2,230,971 | |||||||||
| Loans, net of fees and costs | 2,008,396 | 1,988,535 | 1,956,315 | 1,895,806 | 1,885,629 | ||||||||||||||
| Total deposits | 1,978,927 | 1,915,436 | 1,900,696 | 1,823,462 | 1,808,645 | ||||||||||||||
| Non-interest bearing deposits | 237,207 | 224,040 | 220,581 | 239,289 | 244,668 | ||||||||||||||
| Stockholders' equity | 167,450 | 162,382 | 159,936 | 158,022 | 155,114 | ||||||||||||||
| Balance Sheet Average Balances: | |||||||||||||||||||
| Total assets | $ | 2,373,261 | $ | 2,319,295 | $ | 2,269,047 | $ | 2,219,340 | $ | 2,184,385 | |||||||||
| Total interest earning assets | 2,277,523 | 2,222,177 | 2,173,212 | 2,121,068 | 2,086,331 | ||||||||||||||
| Loans, net of fees and costs | 1,997,574 | 1,972,740 | 1,944,187 | 1,891,170 | 1,876,648 | ||||||||||||||
| Total deposits | 1,960,145 | 1,919,954 | 1,823,523 | 1,820,532 | 1,782,140 | ||||||||||||||
| Non-interest bearing deposits | 246,310 | 229,040 | 233,255 | 254,025 | 253,485 | ||||||||||||||
| Stockholders' equity | 165,309 | 162,119 | 159,822 | 157,210 | 156,271 | ||||||||||||||
| Performance Ratios (Annualized): | |||||||||||||||||||
| Return on average assets | 0.80 | % | 0.58 | % | 0.47 | % | 0.10 | % | 0.73 | % | |||||||||
| Return on average equity | 11.41 | % | 8.25 | % | 6.73 | % | 1.44 | % | 10.17 | % | |||||||||
Third quarter net income increased $1.4 million, or 42.6%, to $4.7 million led by increased net interest income and a lower quarterly provision for credit losses, combined with an increase in net operating income from the mortgage division. Net interest income increased $1.4 million, or 8.3%, as the increase in interest income out-paced the increase in interest expense. Non-interest income increased $1.6 million or 17.2%, reflecting higher levels of mortgage banking income and an improvement in fair value changes of the pipeline as well as fair valued portfolio loans. Non-interest expense increased $1.5 million, or 8.0%, due primarily to an increase in salaries and employee benefits expense, professional fees and other expense. These increases were partially offset by a decrease in advertising and promotion expense. 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) | September 30,
| June 30,2024 | $ Change | % Change | Change due
to rate | Change due to volume | ||||||||||||||
| Interest income: | ||||||||||||||||||||
| Cash and cash equivalents | $ | 416 | $ | 331 | $ | 85 | 25.7 | % | $ | 3 | $ | 82 | ||||||||
| Investment securities - taxable | 1,480 | 1,324 | 156 | 11.8 | % | 28 | 128 | |||||||||||||
| Investment securities - tax exempt (1) | 397 | 403 | (6 | ) | (1.5 | )% | (3 | ) | (3 | ) | ||||||||||
| Loans held for sale | 766 | 572 | 194 | 33.9 | % | (5 | ) | 199 | ||||||||||||
| Loans held for investment (1) | 37,339 | 35,916 | 1,423 | 4.0 | % | 967 | 456 | |||||||||||||
| Total loans |
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