Meridian Corporation · NASDAQ:MRBK
Meridian — Q3 2020 Earnings Presentation
24 slides from Meridian's earnings presentation, Nov 9, 2020
Slide 1: 3rd QTR 2020 Investor Presentation
3rd QTR 2020 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 September 30, 2020, per October 26, 2020 press release. 2) Includes loans held for sale and held for investment. 3) Excludes loans at fair value, loans held for sale and PPP loans. A Non-GAAP measure. Refer to Appendix for No
Slide 4: Current Meridian Franchise Footprint
4 Meridian Corporation Current Meridian Franchise Footprint Geographic Footprint Branches 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 Land Settlem
Slide 5: 3QTR 2020 Highlights
5 Meridian Corporation 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. Tota
Slide 6: Overview of Business Lines
6 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 – Owner occupied commercial mortgages – Construction loans – Land develop
Slide 7: Summary Income Statement
7 Meridian Corporation Summary Income Statement1 1) Decrease in 2017 profitability due to a decrease in net operating profit from mortgage division ($1.8M); 2017 tax reform resulted in a one-time charge to tax expense of $737K. Net Interest Income ($M) Non-interest Income ($M) Non-interest Expense (
Slide 8: Segment Information
8 Meridian Corporation Segment Information 41% 58% 1% Bank Mortgage Banking Wealth Management Pre-tax/pre-provision income by segment percentage for three months ended September 30, 2020 Pre-tax/pre-provision (PTPP) income increased 76.5% over 2Q Bank PTPP increased $1.6 million or 33% due largely t
Slide 9: Consistent Balance Sheet Growth
9 Meridian Corporation Consistent Balance Sheet Growth 1) Includes loans held for sale and held for investment. Total Assets ($M) Loans and Leases1 ($M) Total Deposits ($M) Consolidated Equity ($M) $643.9 $729.7 $875.8 $998.4 $1,129.1 $1,380.7 $1,532.0 2016 2017 2018 2019 1Q 20 2Q 20 3Q 20 $527.1 $6
Slide 10: Capital Summary
10 Meridian Corporation Capital Summary Bank Holding Company 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. 7.78% 11.27% 10.56% 13.52% 11.77%
Slide 11: Asset Quality
11 Meridian Corporation Asset Quality 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/3Q 2020, PPP loans. A Non-GAAP measure. See Appendix for Non-GAAP to GAAP
Slide 12: Balanced Loan Portfolio
12 Meridian Corporation $1.5 Billion total gross loans and leases as of September 30, 20201 – $254.0 M net PPP loans CRE concentration of 183% as of September 30, 2020 Average yield on loans of 4.27% for 3Q 2020 Average yield on loans, excluding PPP loans, of 4.68% for 3Q 2020 Balanced Loan Portfoli
Slide 13: Commercial Loans by Industry
Commercial Loans by Industry September 30, 2020 Meridian Corporation Note: Balances do not include consumer loans; HELoC, and 1st mortgages. Source: Company documents 13
Slide 14: Shared National Credits
14 Meridian Corporation Shared National Credits September 30, 2020 Source: Company documents
Slide 15: Allowance for Loan Losses
15 Meridian Corporation Allowance for Loan Losses September 30, 2020 ALLL Coverage by Portfolio ALLL Coverage Ratios •Provision for loan losses was $4.0 million for 3Q 2020 • ALLL to non-performing loans ratio increased to 209.5% • ALLL to total loans* ratio increased to 1.59% as of September 30, 20
Slide 16: COVID-19 Response Update
16 Meridian Corporation COVID-19 Response Update Source: Company documents 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 second round de
Slide 17: Total Deposits and Deposit Composition
17 Meridian Corporation $1.2B total deposits as of September 30, 2020 Diversified deposit mix – 36% transaction accounts – 18% noninterest-bearing deposits / deposits – Average cost of total deposits of 0.75% for 3Q 2020 Deposit Composition September 30, 2020 Source: Company documents Total Deposits
Slide 18: Time Deposit Repricing Opportunities
18 Meridian Corporation Time Deposit Repricing Opportunities As of September 30, 2020 Source: Company documents $100M time deposits matured during Q3 Cost of CDs and cost of funds improved by 29 bps and 23 bps, respectively $172M time deposits with a blended cost of 1.50% are maturing over next 2 qu
Slide 19: Investment Portfolio Composition
19 Meridian Corporation Investment Portfolio Composition September 30, 2020 Source: Company documents $110.9 million total investments as of September 30, 2020 – 94.1% available-for-sale – 5.9% held-to-maturity Average TEY of 2.48% year-to-date Realized gains of $1.3 million in 3Q Unrealized gain $1
Slide 20: Deep and Experienced Leadership
20 Meridian Corporation Deep and Experienced Leadership Meridian Bank 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 Dela
Slide 21: Appendix
21 Meridian Corporation Appendix
Slide 22: Historical Financial Highlights
22 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: 2015-2017 Financials ar
Slide 23: Reconciliation of Non-GAAP Financial Measures
23 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 24: Reconciliation of Non-GAAP Financial Measures
24 Meridian Corporation Reconciliation of Non-GAAP Financial Measures Dollar Values in Thousands 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 PPP loans and PPPLF borrowings — 0.14% 0.21% N