Meridian Corporation · NASDAQ:MRBK
Meridian — Investor Presentation (December 2020)
27 slides from Meridian's investor presentation, Dec 3, 2020
Slide 1: Investor Presentation
® Investor Presentation December 3, 2020 NASDAQ: MRBK
Slide 2: Forward-Looking Statements
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 statements include statements
Slide 3: Investment Highlights – Why Meridian?
Investment Highlights – Why Meridian? Demonstrated organic growth engine in commercial bank segments, capitalizing on market disruption in PA, NJ, DE and MD markets Relationship focus drives referrals to wealth, mortgage, leasing and deposits, reducing cost to originate Fifteen year "branch-lite" pl
Slide 4: Company Snapshot
Company Snapshot Overview Financial Highlights 3QTR 2020¹ State-chartered commercial bank established in Balance Sheet ($ in Millions) July 2004 and headquartered in suburban Main Line Philadelphia. Serves Pennsylvania, New Jersey, Delaware and Maryland with more than 20 offices and a full suite of
Slide 5: Current Meridian Franchise Footprint
Current Meridian Franchise Footprint Organizational Structure Geographic Footprint Branches LPOs Meridian Corporation Holding Company Meridian Bank 100% Owned Subsidiary Meridian Land Meridian Wealth Settlement Partners 100% Owned Subsidiary Services 100% Owned Subsidiary Meridian Apex Realty Equipm
Slide 6: Deep and Experienced Leadership
Deep and Experienced Leadership Chris Annas Founder, Chairman, President and Chief Executive Officer of the Bank since its opening in 2004 Chairman of the Board Held executive positions with various regional banks in the Delaware Valley since 1986 President & CEO Over 35 years of banking experience
Slide 7: Overview of Business Lines
Overview of Business Lines Wealth Management and Core Banking Meridian Mortgage Advisory Services Commercial & Industrial Lending Mortgage originations were $886 Million AUM as of Sept 30, – Lines of credit, term loans $708 million for 3Q 2020, $1.5 2020 – Owner-occupied commercial billion for YTD 2
Slide 8: Consistent Balance Sheet Growth
Consistent Balance Sheet Growth Total Assets ($M) Loans and Leases1 ($M) $1,758.6 $1,532.0 $1,579.1 $1,380.7 $1,303.4 $1,129.1 $1,151.0 $998.4 $997.5 $875.8 $856.0 $729.7 $733.7 $643.9 2016 2017 2018 2019 1Q 20 2Q 20 3Q 20 2016 2017 2018 2019 1Q 20 2Q 20 3Q 20 Total Deposits ($M) Consolidated Equity
Slide 9: Capital Summary
Capital Summary Tangible Common Equity / Tangible Common Assets (%)1 Tier 1 Leverage Ratio (%) 13.52% 14.08% 11.27% 10.56% 13.22% 11.77% 11.27% 10.53% 12.37% 12.37% 10.11% 10.15% 9.51% 11.53% 7.78% 8.73% 11.20% 11.16% 7.78% 10.55% 10.71% 7.68% 7.26% 9.67% 9.67% 9.80% 8.77% 8.06% 2016 2017 2018 2019
Slide 10: Summary Income Statement
Summary Income Statement1 Net Interest Income ($M) Non-interest Income ($M) $36.3 $38.4 $32.7 $34.2 $28.9 $30.6 $31.0 $25.8 $29.1 $18.7 $12.7 $11.6 $9.7 $9.2 2016 2017 2018 2019 1Q 20 2Q 20 3Q 20 2016 2017 2018 2019 1Q 20 2Q 20 3Q 20 Non-interest Expense ($M) Net Income ($M) $55.5 $55.2 $52.9 $10.5
Slide 11: 3QTR 2020 Highlights
3QTR 2020 Highlights Net income was $9.2 million, an increase of $3.5 million, or 61.3%, over 2Q, driven by strong non-interest income revenue for the quarter. Pre-tax, pre-provision income for the quarter was $15.9 million, an increase of $6.9 million, or 76.5%, over 2Q. Total revenue was $44.9 mil
Slide 12: Segment Information
Segment Information Pre-tax/pre-provision (PTPP) income increased 76.5% over 2Q Bank PTPP increased $1.6 million or 33% due largely to gains on sale of investment securities of $1.3 million and an increase $390 thousand or 9% in other fee income of Mortgage Banking income before tax Pre-tax/pre-prov
Slide 13: Mortgage Division Historical Performance
Mortgage Division Historical Performance $1,600 $12.0 $1,400 $10.4 $10.0 Historically profitable $1,200 Recent expansion into $8.0 MD market YTD Loan Originations ($M) $1,000 YTD earnings $10.4M YTD Income ($M) $800 $6.0 Year-to-date originations $1.5B $600 $4.0 3Q originations were 54% refinance an
Slide 14: Balanced Loan Portfolio
Balanced Loan Portfolio September 30, 2020 Total Loans: $1.5 Billion $1.5 Billion total gross loans and leases as of September 30, 20201 18% 5% – $254.0 M net PPP loans 13% Strong sales culture Expansion of C & I Lending staff 23% including: 31% – SBA 10% – Leasing Diverse portfolios and diverse ind
Slide 15: Commercial Loans by Industry
Commercial Loans by Industry September 30, 2020 Note: Balances do not include consumer loans; HELoC, and 1st mortgages. Meridian Source: Company documents Corporation 15
Slide 16: Construction and Land Development
Construction and Land Development 7% $150.5 M in construction and land 20% 11% development loans as of September 30, 2020 15% – $25.3 M land development 7% 40% Average yield on loans of 6.29% for 3Q 2020 81% of total capital as of September Pre-sold residential Spec residential 30, 2020 Rental /comm
Slide 17: Shared National Credits
Shared National Credits September 30, 2020 Meridian Source: Company documents Corporation 17
Slide 18: Asset Quality
Asset Quality NPAs¹ / Assets (%) Reserves / Loans2 (%) 0.73% 1.59% 0.51% 0.45% 0.42% 0.39% 0.47% 1.27% 0.30% 1.10% 0.97% 0.90% 1.00% 0.96% 2016 2017 2018 2019 1Q 20 2Q 20 3Q 20 2016 2017 2018 2019 1Q 20 2Q 20 3Q 20 Nonaccrual Loans / Loans (%) Net Chargeoffs / Average Loans (%) 0.83% 0.17% 0.58% 0.1
Slide 19: COVID-19 Response Update
COVID-19 Response Update Pandemic Relief Summary by Portfolio Loan Assistance Programs Overall program represents $154.1 million or 14.8% of total loans Currently $19.1 million, or 1.8% are still in active relief Commercial and Construction: – Original payment holiday up to 3 billing cycles; all sec
Slide 20: Allowance for Loan Losses
Allowance for Loan Losses September 30, 2020 ALLL Coverage Ratios ALLL Coverage by Portfolio Allowance Ratios 1.80% 300.0% 281.2% 1.59% 1.60% 250.0% 1.40% 1.27% 1.20% 170.6% 209.5% 200.0% 1.00% 168.3% 1.00% 1.10% 150.0% 0.80% 0.54% 0.58% 0.52% 0.60% 0.34% 0.51% 0.47% 100.0% 0.45% 0.40% 0.30% 50.0% 0
Slide 21: Investment Portfolio Composition
Investment Portfolio Composition September 30, 2020 Total Securities: $110.9 Million 3% 11% 21% $110.9 million total investments as of September 30, 2020 – 94.1% available-for-sale – 5.9% held-to-maturity 39% 26% Average TEY of 2.48% year-to-date Realized gains of $1.3 million in 3Q Unrealized gain
Slide 22: Deposit Composition
Deposit Composition September 30, 2020 Total Deposits: $1.2 Billion $1.2B total deposits as of September 30, 3% 18% 2020 25% Diversified deposit mix 18% – 36% transaction accounts – 18% noninterest-bearing deposits / 36% deposits – Average cost of total deposits of 0.75% for 3Q 2020 Non-interest che
Slide 23: Time Deposit Repricing Opportunities
Time Deposit Repricing Opportunities As of September 30, 2020 100,000,000.00 1.53% $100M time deposits 90,000,000.00 matured during Q3 80,000,000.00 1.47% Cost of CDs and cost of funds improved by 29 70,000,000.00 bps and 23 bps, respectively 60,000,000.00 0.43% $172M time deposits 50,000,000.00 0.6
Slide 24: Appendix
Appendix Meridian Corporation 24
Slide 25: Historical Financial Highlights
Historical Financial Highlights For the Year Ended For the Quarter Ended Dollar Values in Thousands, Except Per Share Amounts 2015Y 2016Y 2017Y 2018Y 2019Y 3Q 19 4Q 19 1Q 20 2Q 20 3Q 20 Balance Sheet Total Assets $ 663,344 $ 733,693 $ 856,035 $ 997,480 $ 1,150,019 $ 1,126,937 $ 1,150,019 $1,303,442
Slide 26: Reconciliation of Non-GAAP Financial Measures
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 removing the impact of our
Slide 27: Reconciliation of Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures Dollar Values in Thousands For the Quarter Ended Reconciliation of PPP Related Non-GAAP Measures 1Q 20 2Q 20 3Q 20 Reconciliation of Net Interest Margin (TEY, exluding PPP loans and PPPLF borrowings) Net interest margin (TEY) 3.49% 3.27% 3.26% Impact of