Meridian Corporation · NASDAQ:MRBK
Meridian — Q1 2021 Earnings Presentation
28 slides from Meridian's earnings presentation, May 4, 2021
Slide 1: 1st QTR 2021 Investor Presentation
1st QTR 2021 Investor Presentation NASDAQ: MRBK ®
Slide 2: Forward-Looking Statements
2 Meridian Corporation Forward-Looking Statements Meridian Corporation (the “Corporation”) may from time to time make written or oral “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking stateme
Slide 3: Company Snapshot
3 Meridian Corporation Company Snapshot 1) As of and for the quarter ended March 31, 2021, per April 26, 2021 press release. 2) Includes PPP loans, loans held for sale and loans held for investment. 3) Excludes loans at fair value, loans held for sale and PPP loans. A Non-GAAP measure. Refer to Appe
Slide 4: Current Meridian Franchise Footprint
4 Meridian Corporation Current Meridian Franchise Footprint Geographic Footprint Branches Mortgage LPOs Meridian Corporation Holding Company Meridian Bank 100% Owned Subsidiary Organizational Structure Meridian Wealth Partners 100% Owned Subsidiary Apex Realty 100% Owned OREO Subsidiary Meridian Lan
Slide 5: Overview of Business Lines
5 Meridian Corporation Overview of Business Lines Commercial & Industrial Lending – Lines of credit, term loans – Owner-occupied commercial mortgages – Leasing through Meridian Equipment Finance® Commercial Real Estate Lending – Commercial mortgages – Construction loans – Land development loans Cons
Slide 6: Deep and Experienced Leadership
6 Meridian Corporation Deep and Experienced Leadership Meridian Executive Management Chris Annas Chairman of the Board President & CEO Founder, Chairman, President and Chief Executive Officer of the Bank since its opening in 2004 Held executive positions with various regional banks in the Delaware V
Slide 7: 1QTR 2021 Highlights
7 Meridian Corporation 1QTR 2021 Highlights 1) Excludes loans at fair value, loans held for sale and PPP loans. A Non-GAAP measure. Refer to Appendix for Non-GAAP to GAAP reconciliation. Net income was $10.2 million for the quarter, or $1.65 per diluted share, driven by continued strong non- interes
Slide 8: Balance Sheet Growth
8 Meridian Corporation Balance Sheet Growth 1) Includes loans held for sale and held for investment. Total Assets ($M) Loans and Leases1 ($M) Total Deposits ($M) Consolidated Equity ($M) $856 $998 $1,151 $1,720 $1,744 2017 2018 2019 2020 1Q 21 $730 $876 $998 $1,514 $1,525 2017 2018 2019 2020 1Q 21 $
Slide 9: Summary Income Statement
9 Meridian Corporation Summary Income Statement Net Interest Income ($M) Non-interest Income ($M) Non-interest Expense ($M) Pre-tax Income ($M) 2017 2018 2019 2020 1Q 21 Wealth $0.1 $0.3 $0.1 $(0.0) $(0.0) Mortgage $0.4 $1 $0.3 $2 $0.6 Bank $28 $32 $36 $47 $14.5 2017 2018 2019 2020 1Q 21 Wealth $2 $
Slide 10: Consistent Revenue Growth
10 Meridian Corporation Consistent Revenue Growth ($M) $2.6 $3.7 $3.5 $3.9 $1.1 $31.0 $26.2 $25.1 $79.0 $24.7 $36.3 $44.7 $55.3 $66.7 $18.7 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 $70.0 $80.0 $90.0 2017 2018 2019 2020 1Q 21 Bank Mortgage Wealth Total Revenue: 1Q 2021 - $44.5 FY 2020 - $149.6 FY 2019
Slide 11: Capital Summary
11 Meridian Corporation Capital Summary Bank Holding Company Regulatory Minimum 2 Tangible Common Equity / Tangible Common Assets (%)1 Tier 1 Leverage Ratio (%) Tier 1 Capital Ratio (%) Total Capital Ratio (%) 1) A Non-GAAP measure. Refer to Appendix for Non-GAAP to GAAP reconciliation. 2) To be wel
Slide 12: Segment Information
12 Meridian Corporation Segment Information 1) A Non-GAAP measure. Refer to Appendix for Non-GAAP to GAAP reconciliation. Pre-tax/pre-provision income by segment percentage for three months ended March 31, 2021 Pre-tax/pre-provision (PTPP)1 income increased 6.6% over 4Q 2020, due mostly to an increa
Slide 13: Mortgage Division Historical Performance
13 Meridian Corporation Mortgage Division Historical Performance March 31, 2021 Source: Company documents Historically profitable Expansion into MD more than doubled originations, $2.4B in 2020 2020 earnings $14.8M 1Q2021 trends continuing; originations $725M and earnings of $4.4M 1Q originations we
Slide 14: Balanced Loan Portfolio
14 Meridian Corporation $1.5 Billion total gross loans and leases as of March 31, 20211 – $225.6 M net PPP loans CRE concentration of 172% of capital as of March 31, 2021 Average yield on loans of 4.59% for 1Q 2021, compared to 4.56% for 4Q 2020 Average yield on loans, excluding PPP loans, of 4.60%
Slide 15: Commercial Loans by Industry
Commercial Loans by Industry March 31, 2021 Meridian Corporation Note: Balances do not include consumer loans; HELoC, and 1st mortgages. Source: Company documents 15 Manufacturing 16.7% Construction Related 12.6% Professional, Scientific and Technical Services 10.8% Other 10.0% Leisure 9.6% Wholesal
Slide 16: Commercial Real Estate Loans by Industry
16 Meridian Corporation Commercial Real Estate Loans by Industry March 31, 2021 Residential and Commercial Construction 22.7% Residential Real Estate Investment 22.2% Commercial Real Estate Investment 19.8% Construction Related 5.7% Other 5.2% Health Care and Social Assistance 3.9% Manufacturing 3.8
Slide 17: Construction and Land Development
17 Meridian Corporation Construction and Land Development Source: Company documents $134.6 M in construction and land development loans as of March 31, 2021 – $24.6 M land development Average yield on loans of 6.27% for 1Q 2021 68% of total capital as of March 31, 2021 19% 43% 8% 17% 12% 1% Pre-sold
Slide 18: Shared National Credits by Industry
18 Meridian Corporation Shared National Credits by Industry March 31, 2021 Source: Company documents Managed by experienced (30 yrs) large corporate lender Buy/participate in more secure, less yielding facilities Purposeful industry diversification Provides added liquidity on balance sheet Yielded 3
Slide 19: Asset Quality
19 Meridian Corporation Asset Quality March 31, 2021 1) Nonperforming assets defined as loans 90+ days past due and still accruing, nonaccrual loans and leases and OREO, excluding performing TDRs. 2) Excludes loans held for sale and, for 2Q 2020 to 1Q 2021, PPP loans. A Non-GAAP measure. See Appendi
Slide 20: Allowance for Loan Losses
20 Meridian Corporation Allowance for Loan Losses March 31, 2021 1) Includes loans held for sale and held for investment. ALLL Coverage by Portfolio ALLL Coverage Ratios •Provision for loan losses was $599 thousand for 1Q 2021 • ALLL to non-performing loans ratio increased to 214.4% • ALLL to total
Slide 21: COVID-19 Loan Modifications (Active)
21 Meridian Corporation COVID-19 Loan Modifications (Active) March 31, 2021 1) Excludes loans held for sale and PPP loans. $10 $9 $19 $15 $12 $12 $17 $15 $5 $4 $10 $10 $- $5 $- $16 $3 $5 $2 4.3% 4.9% 1.8% 2.5% 2.5% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% $- $10 $20 $30 $40 $50 $60 Q1 2020 Q2 2020 Q3 2020
Slide 22: Investment Portfolio Composition
22 Meridian Corporation Investment Portfolio Composition March 31, 2021 Source: Company documents $141.7 million total investments as of March 31, 2021 – 95.0% available-for-sale – 5.0% held-to-maturity Average TEY of 2.06% year-to-date Realized gains of $48 thousand in 1Q Unrealized gains $632 thou
Slide 23: Deposit Composition
23 Meridian Corporation $1.4B total deposits as of March 31, 2021 Diversified deposit mix – 36% transaction accounts – 19% noninterest-bearing deposits to total deposits – Average cost of total deposits of 0.49% for 1Q 2021, down from 0.61% for 4Q 2020 Deposit Composition March 31, 2021 Source: Comp
Slide 24: Time Deposit Repricing Opportunities
24 Meridian Corporation Time Deposit Repricing Opportunities March 31, 2021 Source: Company documents $75M time deposits matured during Q1 2021 Cost of CDs and cost of funds improved by 43 bps and 14 bps, respectively $48M time deposits with a blended cost of 55 bps maturing over next 3 months Poten
Slide 25: Appendix
25 Meridian Corporation Appendix
Slide 26: Historical Financial Highlights
26 Meridian Corporation Historical Financial Highlights 1) Includes loans held for sale and held for investment. 2) Includes loans held for investment (excluding loans at fair value and PPP loans). 3) A Non-GAAP measure. See Appendix for Non-GAAP to GAAP reconciliation. Note: 2017 Financials are at
Slide 27: Reconciliation of Non-GAAP Financial Measures
27 Meridian Corporation Reconciliation of Non-GAAP Financial Measures Tangible common equity to tangible assets Management uses the measure tangible common equity to tangible assets to assess our capital strength. We believe that this non-GAAP financial measure is useful to investors because, by rem
Slide 28: Reconciliation of Non-GAAP Financial Measures
28 Meridian Corporation Reconciliation of Non-GAAP Financial Measures Dollar Values in Thousands 1Q 20 2Q 20 3Q 20 4Q 20 1Q 21 Reconciliation of Net Interest Margin (TEY, exluding PPP loans and PPPLF borrowings) Net interest margin (TEY) 3.49% 3.27% 3.26% 3.59% 3.72% Impact of PPP loans and PPPLF bo