Slide 1: Q1'2023 Investor Presentation
Q1'2023 Investor Presentation 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: Company Snapshot
COMPANY SNAPSHOT Profile and Business Lines Asset Mix at March 31, 2023 Meridian specializes in business and FF & E industrial lending, retail and commercial real Other assets 1% 3% estate lending, electronic payments, along Cash & investments with a broad menu of high-yield depository Residential l
Slide 4: Geographic Footprint
GEOGRAPHIC FOOTPRINT Regional Market Branches Mortgage LPOs Headquarters, Malvern PA • Serves PA, New Jersey, DE & MD • Philadelphia MSA is 8th largest MSA in the US • Expansion into central MD MSA • Six full service branches • 12 mortgage loan production offices *********************** Satellite Co
Slide 5: Investment Highlights
INVESTMENT HIGHLIGHTS • Historically strong asset growth with above peer profitability. • "Go to" bank in the Delaware Valley - comfortably handles all but largest companies • Financial services business model with significant non-interest income streams in Meridian Mortgage, SBA Lending and Meridia
Slide 6: Q1'2023 Highlights
Q1'2023 HIGHLIGHTS Financial Highlights ¹ Balance Sheet ($ in Millions) Balance Sheet: Total Assets $ 2,230 • Total assets increased $167.6 million, or 8.1%, to $2.2 Total Loans & Leases² $ 1,854 billion as of March 31, 2023, from December 31, 2022 Deposits $ 1,770 • Commercial loans grew $61.3 mill
Slide 7: Summary Income Statement
SUMMARY INCOME STATEMENT (dollars in thousands) Quarter Ended • Net income decreased $536 thousand, or 11.8%, Q1'2023 over Q4'2022. Summary Income Statement Q1'2023 Q4'2022 • Significant mortgage business brings seasonality to Net interest income $ 17,677 $ 18,518 quarterly results. Provision for cr
Slide 8: Net Interest Margin
NET INTEREST MARGIN • NIM was 3.61% for Q1'2023 down from 3.93% for Net Interest Margin Trend Q4'2022, due to increases in interest expense, along with $253 thousand reduction in extra loan fee income 4.20% compared to Q4'2022. 4.10% 4.07% • Interest earning asset yield increased 43 bps to 6.31%, 4.
Slide 9: Non-Interest Income
NON-INTEREST INCOME (Dollars in thousands) Q1'2023 Q4'2022 $ Change Mortgage banking income (incl. FV chg) 3,202 4,715 (1,513) Wealth management income 1,196 1,061 135 23.0% SBA income 713 522 191 Other income 1,527 1,698 (171) 48.2% Total $ 6,638 $ 7,996 ($1,358) 10.7% Non-interest income decreased
Slide 10: Mortgage Performance
MORTGAGE PERFORMANCE Net Profit (000s) Cumulative Expense Reduction Measures $100,000 $75,000 $50,000 $25,000 $— $2,403 $20,897 $14,632 $(2,626) $(2,063) $(25,000) 2019 2020 2021 2022 Q1 2023 Revenue Expense Net profit • Historically profitable, with exceptional profits in 2020 & 2021. • Seasonal bu
Slide 11: Mortgage Volume & Margin Trends
MORTGAGE VOLUME & MARGIN TRENDS • Volume continues to be impacted by lack of home inventory, higher mortgage rates, and high property values. • Margin: 1Q 2023 margin of 3.14% up 41 bps from 2.73% for the prior quarter. • Moved to best efforts locks and exited hedge due to rate volatility. • Purchas
Slide 12: Non-Interest Expense
NON-INTEREST EXPENSE Non-Interest Expense decreased $2.3 million (Dollars in thousands) Q1'2023 Q4'2022 $ Change or 11.3% Salaries and employee benefits 11,061 12,794 (1,733) • Salaries and benefits were down as result of lower Occupancy and equipment 1,244 1,218 26 levels of incentive compensation,
Slide 13: Loan Portfolio Diversification
LOAN PORTFOLIO DIVERSIFICATION Admin & Support, 2.2% RE & Rental Lease, 0.8% (as a % of total loans) Waste Mgmt & Remediation, 0.6% Science & Tech, 3.7% Leisure, 3.0% HELOC, 3.4% Construction, 20.1% Construction Professional Serv, 4.0% RE Investment Residential Mtg Other Health & Social Serv, 5.7% M
Slide 14: Asset Quality
ASSET QUALITY Non-performing Loans & Assets Ratios(1) ACL / Loans (2)(3) 1.57% 1.51% 1.46% 1.40% 1.50% 1.50% 1.20% 1.25% 1.58% 1.52% 1.46% 1.34% 1.38% 1.25% 1.24% 1.20% 1.27% 1.00% 1.00% 1.20% 1.11% 1.11% 1.09% 1.13% 0.55% 0.61% 0.50% 0.50% 0.48% 0.52% 0.00% —% Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4
Slide 15: Deposit Composition
DEPOSIT COMPOSITION (as a % of total deposits) Consumer Accounts, 11.0% Business Accounts, 56.7% Total Deposits $1.8 Billion Municipal Deposits, 9.2% Brokered Deposits, 23.1% Business Accounts Consumer Accounts Municipal Deposits Brokered Deposits • At March 31, 2023, 64% of business accounts and 73
Slide 16: Investment Portfolio Composition
INVESTMENT PORTFOLIO COMPOSITION State & municipal - (as a % of total investments) • Total investment securities 6.3% of taxable, 7.3% total assets: – 81% Available for sale (AFS). US asset backed, 9.1% – 19% Held-to-maturity (HTM). • 100% investment grade, US government Total agency, 37.2% – w/90%
Slide 17: Strong Capital Position
STRONG CAPITAL POSITION • All Bank capital Excess Capital (000s) ratios(1) exceed well $250,000 14.00% capitalized regulatory requirements. $200,000 $26,827 13.00% ◦ Community Banking $90,486 $43,185 $71,706 Leverage Ratio $150,000 12.00% of 9.32% compared to minimum of 9.0% $100,000 11.41% 11.00% ◦
Slide 18: Appendix - Historical Financial Highlights and Reconciliations of Non-GAAP Measures
APPENDIX - HISTORICAL FINANCIAL HIGHLIGHTS AND RECONCILIATIONS OF NON-GAAP MEASURES Meridian Corporation 18
Slide 19: Historical Financial Highlights
HISTORICAL FINANCIAL HIGHLIGHTS As of or the Quarter Ended As of or the Year Ended (dollars in thousands) Q1'2023 Q4'2022 Q1'2022 2022Y 2021Y 2020Y Balance Sheet Total Assets $ 2,229,783 $ 2,062,228 $ 1,831,589 $ 2,062,228 $ 1,713,443 $ 1,720,197 Loans (1) 1,853,890 1,765,925 1,513,164 1,765,925 1,4
Slide 20: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES Meridian believes that non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts. The non-GAAP disclosure have limitations as an analytical tool, should not be viewed as a substitute for perfo
Slide 21: Reconciliation of Non-GAAP Measures
RECONCILIATION OF NON-GAAP MEASURES March 31, December 31, September 30, June 30, March 31, (dollars in thousands) 2023 2022 2022 2022 2022 Tangible common equity ratio - Consolidated: Total stockholders' equity (GAAP) $ 153,049 $ 153,280 $ 151,161 $ 156,087 $ 157,684 Less: Goodwill and intangible a