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,
2024 June 30,
2024 September 30,
2023Income: Net income$4,743 $3,326 $4,005Diluted earnings per common share$0.42 $0.30 $0.35Pre-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. Christopher J. Annas, Chairman and CEO commented:
“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,
2024 March 31,
2024 December 31,
2023 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% Income Statement – Third Quarter 2024 Compared to Second Quarter 2024
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,
2024 June 30,
2024 $ Change % Change Change due
to rate Change due
to volumeInterest 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
