Meridian Corporation · NASDAQ:MRBK
Meridian — Q2 2020 Earnings Presentation
22 slides from Meridian's earnings presentation, Jul 29, 2020
Slide 1: 2nd QTR Investor Presentation
2nd QTR Investor Presentation July 29, 2020 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 Highlights
3 Meridian Corporation Company Highlights Demonstrated organic growth engine in diversified loan segments, capitalizing on sales culture and big bank missteps in the Delaware Valley tri-state market. Financial services business model with significant non-interest income streams in Meridian Mortgage,
Slide 4: Company Snapshot
4 Meridian Corporation Company Snapshot 1) As of and for the quarter ended June 30, 2020, per July 27, 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 Non-GAAP t
Slide 5: Current Meridian Franchise Footprint
5 Meridian Corporation Current Meridian Franchise Footprint Geographic Footprint Meridian Corporation Holding Company Meridian Bank 100% Owned Subsidiary Organizational Structure Meridian Wealth Partners 100% Owned Subsidiary Apex Realty 100% Owned Subsidiary Meridian Land Settlement Services 100% O
Slide 6: Deep and Experienced Leadership
6 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 Delaw
Slide 7: Overview of Business Lines
7 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 8: Consistent Balance Sheet Growth
8 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) $663.3 $733.7 $856.0 $997.5 $1,150.0 $1,303.4 $1,579.1 2015 2016 2017 2018 2019 1Q 2020 2Q 2020 $584.4
Slide 9: Summary Income Statement
9 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 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 (%) 7.98% 9.54% 11.27% 10.53% 13.52% 11.77% 10.15% 7.98% 9.54% 11.27% 10.53% 10.12% 8.73% 7.68% 2015 2016 2017 2018
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 at fair value, loans held for sale and for 2Q 2020, PPP loans. A Non-GAAP measure. See Appendix for
Slide 12: Balanced Loan Portfolio
12 Meridian Corporation $1.4 Billion total gross loans and leases as of June 30, 20201 – $253.4 M net PPP loans CRE concentration of 183% as of June 30, 2020 Average yield on loans of 4.48% for 2Q 2020 Average yield on loans, excluding PPP loans, of 4.81% for 2Q 2020 Balanced Loan Portfolio June 30,
Slide 13: Commercial Loans by Industry
Commercial Loans by Industry June 30, 2020 Meridian Corporation Note: Balances do not include consumer loans; HELoC, and 1st mortgages. Source: Company documents 13
Slide 14: COVID-19 Response
14 Meridian Corporation COVID-19 Response Source: Company documents Commercial: – Original payment holiday up to 3 billing cycles – 9 loan relationships ($50.7M) additional 3 months Construction: – PA moratorium on construction is now over – Previously lowered rates now returned to original rate – T
Slide 15: Shared National Credits
15 Meridian Corporation Shared National Credits Source: Company documents
Slide 16: Deposit Composition
16 Meridian Corporation $1.2B total deposits as of June 30, 2020 Diversified deposit mix – 37% transaction accounts – 19% noninterest-bearing deposits / deposits – Average cost of total deposits of 0.90% for 2Q 2020 Deposit Composition June 30, 2020 Source: Company documents Total Deposits: $1.2 Bil
Slide 17: Time Deposit Repricing Opportunities
17 Meridian Corporation Time Deposit Repricing Opportunities Source: Company documents $271M time deposits maturing over next 3 quarters Blended cost of CDs maturing over 9 months is 1.48% Potential to shed approx. 30bps on time deposit costs each quarter Potential to expand margin 7bps quarter over
Slide 18: Investment Portfolio Composition
18 Meridian Corporation Investment Portfolio Composition Source: Company documents $104.7 million total investments as of June 30, 2020 – 93.7% available-for-sale – 6.3% held-to-maturity Average TEY of 2.69% year-to-date Unrealized gain $2.8 million at June 30, 2020 Conservative investment portfolio
Slide 19: Appendix
19 Meridian Corporation Appendix
Slide 20: Historical Financial Highlights
20 Meridian Corporation Historical Financial Highlights
Slide 21: Reconciliation of Non-GAAP Financial Measures
21 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 22: Reconciliation of Non-GAAP Financial Measures
22 Meridian Corporation Reconciliation of Non-GAAP Financial Measures