Meridian Corp0001750735false00017507352024-01-262024-01-26

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
January 26, 2024
Date of Report (Date of earliest event reported)
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(Exact name of registrant as specified in its charter)
Pennsylvania 000-55983 83-1561918
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Ident. No.)
     
9 Old Lincoln Highway, Malvern, Pennsylvania
 19355
(Address of principal executive offices) (Zip Code)
 
(484) 568-5000
Registrant’s telephone number, including area code
 
Not Applicable
(Former name or former address, if changed since last report.)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4 (c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Securities registered pursuant to Section 12(b) of the Act:
Title of each class:
    Trading Symbol(s)    Name of each exchange on which registered:
Common Stock, $1 par value
MRBKThe NASDAQ Stock Market




Item 2.02.            Results of Operations and Financial Condition.
On January 26, 2024 Meridian Corporation issued a press release discussing the Corporation’s Fourth Quarter 2023 Results. A copy is attached hereto as Exhibit 99.1 and is incorporated herein by reference.
The information in this Current Report on Form 8-K, including Exhibit 99.1 attached hereto and incorporated by reference into Item 2.02 shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities under that Section. Furthermore, such information, including the exhibit attached hereto, shall not be deemed incorporated by reference into any of the Corporation’s reports or filings with the SEC under the Securities Exchange Act of 1933, as amended (the "Securities Act"), or the Exchange Act, whether made before or after the date hereof, except as expressly set forth by specific reference in such report or filing. The information in this Current Report on Form 8-K, including the exhibit attached hereto, shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.
Item 7.01.     Regulation FD Disclosures.

In connection with the issuance of its earnings for the three months ended December 31, 2023, Meridian Corporation has also made available on its website materials that contain supplemental information about the Corporation's financial results (“Earnings Supplement”). A copy of the earnings supplement is attached hereto as Exhibit 99.2 and is incorporated by reference in this Item 7.01. The information contained in this Item 7.01 of this Report on Form 8-K, including Exhibit 99.2, is being furnished and shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Exchange Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.


Item 8.01.            Other Events.
Quarterly Dividend
On January 25, 2024, Meridian Corporation’s Board of Directors declared a quarterly cash dividend of $0.125 per common share, payable February 20, 2024, to shareholders of record as of February 12, 2024.
Item 9.01.            Financial Statements and Exhibits.
(d)    Exhibits. The following exhibit is furnished herewith:
99.1 Press Release, issued January 26, 2024
99.2 Earnings Supplement, issued January 26, 2024




EXHIBIT INDEX
Exhibit No. Description of Exhibit
   
 
104Cover Page Interactive Data File (embedded within the Inline XBRL document)






SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
MERIDIAN CORPORATION
(Registrant)
   
Dated:  January 26, 2024
  
   
 By:/s/  Denise Lindsay 
   Denise Lindsay
   Executive Vice President and Chief Financial Officer
   


Exhibit 99.1

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Meridian Corporation Reports Fourth Quarter 2023 Results and Announces a Quarterly Dividend of $0.125 per Common Share.
MALVERN, PA., January 26, 2024 — Meridian Corporation (Nasdaq: MRBK) today reported:
Three Months Ended
Year Ended
(Dollars in thousands, except per share data)((Unaudited)December 31,
2023		September 30,
2023		December 31,
2023		December 31,
2022
Income:
Net income
$571 $4,005 $13,243 $21,829 
Diluted earnings per common share$0.05 $0.35 $1.16 $1.79 
Pre-tax, pre-provision income (1)
$5,356 $5,292 $23,782 $30,408 
Pre-tax, pre-provision income - Bank (1)
$5,757 $6,399 $27,751 $31,004 
(1) See Non-GAAP reconciliation in the Appendix

•Total assets at December 31, 2023 and September 30, 2023 were $2.2 billion, compared to $2.1 billion at December 31, 2022.
•Commercial loans, excluding leases, increased $15.7 million for the quarter and $114.6 million, or 9%, year over year.
•Pre-tax, pre-provision income for the Bank was $5.8 million for the quarter and $27.8 million for the year.
•Net interest margin was 3.18% for the fourth quarter of 2023, with a loan yield of 7.15%. Net interest margin was 3.35% with a loan yield of 6.94% for the year.
•On January 25, 2024, the Board of Directors declared a quarterly cash dividend of $0.125 per common share, payable February 20, 2024 to shareholders of record as of February 12, 2024.

Christopher J. Annas, Chairman and CEO commented, “Meridian’s fourth quarter earnings totaled $571 thousand, which was down from the prior quarter. Contributing to the decline was a necessary additional provision for a non-performing commercial credit, which has experienced some deterioration. In addition, the historical rise in interest rates has had negative impact on our SBA and small-ticket leasing businesses, both of which required additional provisions. We are comfortable with the existing reserves and expect some resolution in the commercial credit in 2024. Annual loan growth in the core CRE, C&I and SBA portfolios was 9%, which reflects our continued outreach and a stable business environment in the Philadelphia metro region. Construction lending for residential and multi-family is still strong because of high housing demand, as housing inventory remains at historical lows.

Mr. Annas added, "Net interest margin was down from the prior quarter mostly due to higher deposit expense, as customers are increasingly rate conscious. We have adjusted well to the tumultuous environment created by the historic Federal Reserve interest rate moves, but the impact on margins continues.

The mortgage segment has been downsized throughout 2023 to match expected volumes. The lack of homes for sale remains the biggest issue, while the higher rates are less of a factor. We will continue to monitor the impact of market conditions on our mortgage operations and are prepared to make further adjustments if warranted."

Mr. Annas concluded, "Our continued growth results from being highly visible in our regions, and being the preferred bank in the Delaware Valley. If the forecasted rate declines materialize, the business environment should be robust."
















1
Exhibit 99.1





Select Condensed Financial Information
As of or for the quarter ended (Unaudited)
December 31,
2023		September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022
(Dollars in thousands, except per share data)
Income:
Net income
$571 $4,005 $4,645 $4,021 $4,557 
Basic earnings per common share0.05 0.36 0.42 0.36 0.40 
Diluted earnings per common share0.05 0.35 0.41 0.34 0.39 
Net interest income
16,942 17,224 17,098 17,677 18,518 
Balance Sheet:
Total assets$2,246,193 $2,230,971 $2,206,877 $2,229,783 $2,062,228 
Loans, net of fees and costs
1,895,806 1,885,629 1,859,839 1,818,189 1,743,682 
Total deposits1,823,462 1,808,645 1,782,605 1,770,413 1,712,479 
Non-interest bearing deposits239,289 244,668 269,174 262,636 301,727 
Stockholders' equity
158,022 155,114 153,962 153,049 153,280 
Balance Sheet (Average Balances):
Total assets$2,219,340 $2,184,384 $2,166,574 $2,088,599 $1,962,915 
Total interest earning assets2,121,068 2,086,602 2,070,640 1,995,460 1,877,967 
Loans, net of fees and costs
1,891,170 1,876,648 1,847,736 1,783,322 1,674,215 
Total deposits1,820,532 1,782,140 1,775,444 1,759,571 1,698,597 
Non-interest bearing deposits254,025 253,485 266,675 296,037 312,297 
Stockholders' equity
157,210 156,271 154,179 153,179 151,791 
Performance Ratios (Annualized):
Return on average assets
0.10 %0.73 %0.86 %0.78 %0.92 %
Return on average equity
1.44 %10.17 %12.08 %10.65 %11.91 %

Income Statement - Fourth Quarter 2023 Compared to Third Quarter 2023
Net income of $571 thousand for the fourth quarter decreased $3.4 million from $4.0 million for the third quarter mainly due to provisioning for general credit reserves, specific reserves on individually evaluated loans, and charge-offs. Net interest income decreased $288 thousand, or 1.6%, on a tax equivalent basis due to an increase in interest expense that out-paced the increase in interest income. Non-interest income increased $31 thousand or 0.4%, as fair value changes exceeded the lower level of gains on sale of mortgage loans. Non-interest expense decreased $315 thousand, or 1.6% due primarily to a decrease in salaries and benefits expense, partially offset by an increase in professional fees. Detailed explanations of the major categories of income and expense follow below.

2
Exhibit 99.1

Net Interest income
The rate/volume analysis table below analyzes dollar changes in the components of interest income and interest expense as they relate to the change in balances (volume) and the change in interest rates (rate) of tax-equivalent net interest income for the periods indicated and allocated by rate and volume. Changes in interest income and/or expense related to changes attributable to both volume and rate have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category.
Quarter Ended
(dollars in thousands)December 31,
2023		September 30,
2023		$ Change% ChangeChange due to rateChange due to volume
Interest income:
Cash and cash equivalents526245$281 114.7 %$(3)$284 
Investment securities - taxable1,020 901 119 13.2 %65 54 
Investment securities - tax exempt (1)
402 410 (8)(2.0)%4 (12)
Loans held for sale400 456 (56)(12.3)%36 (92)
Loans held for investment (1)
34,071 33,526 545 1.6 %285 260 
Total loans34,471 33,982 489 1.4 %321 168 
Total interest income$36,419 $35,538 $881 2.5 %$387 $494 
Interest expense:
Interest-bearing demand deposits$1,476 $1,488 $(12)(0.8)%$51 $(63)
Money market and savings deposits7,384 6,755 629 9.3 %328 301 
Time deposits7,946 7,300 646 8.8 %495 151 
Total deposits16,806 15,543 1,263 8.1 %874 389 
Borrowings1,816 2,086 (270)(12.9)%(56)(214)
Subordinated debentures782 606 176 29.0 %41 135 
Total interest expense19,404 18,235 1,169 6.4 %859 310 
Net interest income differential$17,015 $17,303 $(288)(1.66)%$(472)$184 
(1) Reflected on a tax-equivalent basis.
Interest income increased $881 thousand quarter-over-quarter, on a tax equivalent basis, due to a higher yield on earning assets and higher levels of average earning assets. The yield on earnings assets rose 5 basis points during the period, while average earning assets increased by $34.5 million.

The yield on total loans increased 7 basis points and the yield on cash and investments increased 9 basis points combined. Average total loans, excluding residential loans for sale, increased $14.5 million. Construction, commercial real estate, and small business loans increased $19.3 million on average, combined, while home equity loans and residential real estate loans held in portfolio increased $15.9 million on average, combined.
Total interest expense increased $1.2 million, quarter-over-quarter, due primarily to market interest rate rises, and an increase in deposit average balances. Interest expense on deposits increased $1.3 million as total average deposits increased $37.9 million and the cost of interest-bearing deposits increased 23 basis points to 4.26%. Interest expense on borrowings decreased $270 thousand as the cost of borrowings decreased 14 basis points due to the positive carry on a $75 million pay fixed swap, and average borrowings decreased for the period, while the average balance of subordinated debentures increased for the period due to the $9.7 million raised in the prior quarter.

The net interest margin decreased 11 basis points to 3.18% as the cost of funds outpaced the increase in yield on earnings assets. The average balance on non-interest bearing deposits increased $540 thousand for the quarter which helped offset somewhat the impact of the increase in cost of funds.
Provision for Credit Losses
The overall provision for credit losses is comprised of provisioning for funded loans as well as unfunded loan commitments. The combined provision increased to $4.6 million for the fourth quarter, from $82 thousand for the third quarter, with the provision for unfunded loan commitments representing only $8 thousand of the combined provision. The increase in provision for funded loans was due to a $3.9 million increase in specific reserves on new, mainly small business loans, and existing non-accrual loans combined with provisioning for loan growth and charge-offs. $2.3 million of the increase in specific reserves related to a commercial loan relationship for which new information became available related to the value of the underlying collateral, and an estimate of disposition costs. This increase was partially offset by the impact of favorable changes in certain portfolio baseline loss rates and some macroeconomic factors underlying the funded loss model.



3
Exhibit 99.1
Non-interest income
The following table presents the components of non-interest income for the periods indicated:
Quarter Ended
(Dollars in thousands)December 31,
2023		September 30,
2023		$ Change% Change
Mortgage banking income$3,394 $4,819 $(1,425)(29.6)%
Wealth management income1,239 1,258 (19)(1.5)%
SBA loan income1,022 982 40 4.1 %
Earnings on investment in life insurance204 201 3 1.5 %
Net change in the fair value of derivative instruments(126)103 (229)(222.3)%
Net change in the fair value of loans held-for-sale120 111 9 8.1 %
Net change in the fair value of loans held-for-investment805 (570)1,375 (241.2)%
Net gain on hedging activity(53)82 (135)(164.6)%
Net loss on sale of investment securities available-for-sale— (3)3 (100.0)%
Other1,512 1,103 409 37.1 %
Total non-interest income$8,117 $8,086 $31 0.4 %
Total non-interest income increased $31 thousand, or 0.4%, quarter-over-quarter as a result of an increase in the net change in fair values and an increase in other income, largely offset by lower mortgage banking income. Other income increased $409 thousand due to swap fee income and gains in fair value of equity securities. Mortgage banking income decreased $1.4 million, or 29.6% quarter-over-quarter, due to lower levels of mortgage loan originations, which decreased $39.8 million. In addition to lower volume, the gain on sale margin increased 5 basis points over the prior quarter. The fair value of loans held for investment increased $1.4 million due to the recent decline in interest rates.

SBA loan income increased $40 thousand, or 4.1%, quarter-over-quarter. While the value of SBA loans sold for the quarter-ended December 31, 2023 was $6.1 million, or 23.3%, less than the quarter-ended September 30, 2023, the gross margin on sale was 6.4% for the quarter-ended December 31, 2023 compared to 6.2% for the quarter-ended September 30, 2023. Also contributing to the increase in SBA loan income was a decrease in amortization expense and in servicing asset impairment.


Non-interest expense
The following table presents the components of non-interest expense for the periods indicated:
Quarter Ended
(Dollars in thousands)December 31,
2023		September 30,
2023		$ Change% Change
Salaries and employee benefits$11,744 $12,420 $(676)(5.4)%
Occupancy and equipment1,232 1,226 6 0.5 %
Professional fees1,382 1,104 278 25.2 %
Advertising and promotion931 848 83 9.8 %
Data processing and software1,651 1,652 (1)(0.1)%
Pennsylvania bank shares tax233 244 (11)(4.5)%
Other2,530 2,524 6 0.2 %
Total non-interest expense$19,703 $20,018 $(315)(1.6)%
Salaries and employee benefits decreased $676 thousand overall, with bank and wealth segments combined having increased $332 thousand, and the mortgage segment decreased $1.0 million. Bank and wealth segment salaries and employee benefits were up due to increased full-time-equivalent employees, and expense related to the issuance of stock options during the quarter.

Professional fees increased $278 thousand during the current quarter due to an increase in loan and lease workout expenses and other legal expenses. Advertising and promotion expense increased $83 thousand from the prior quarter as a result of an increase in advertising and business development expense during the holiday season.

Balance Sheet - December 31, 2023 Compared to September 30, 2023
As of December 31, 2023, total assets increased $15.2 million, or 0.7%, to $2.2 billion from September 30, 2023. This increase was due to an increase in cash and cash equivalents and an increase in loans. Interest-bearing cash decreased $395 thousand, or 0.8%, to $46.6 million as of December 31, 2023, from September 30, 2023.
Portfolio loan growth was $10.0 million, or 0.5% quarter-over-quarter. Commercial mortgage loans increased $41.7 million, or 6.0%, commercial & industrial loans increased $3.0 million, or 1.0%, while residential real estate loans held in portfolio increased $4.3 million,
4
Exhibit 99.1
or 1.7%, and home equity lines and loans increased $2.4 million, or 3.3%. Partially offsetting portfolio loan growth were construction loans which decreased $30.2 million, or 10.9%, and lease financings that decreased $12.4 million, or 8.9% from September 30, 2023.
Total deposits increased $14.8 million, or 0.8% quarter-over-quarter, due largely to higher levels of certificates of deposits. Time deposits increased $24.6 million, or 3.7%, from retail and wholesale efforts as customers continue to opt for higher term interest rates. Money market accounts and savings accounts increased a combined $1.2 million while interest bearing demand deposits decreased $5.6 million. Non-interest bearing deposits decreased $5.4 million, reflecting typical business cash out at the end of the year for distributions and profit-sharing.
Consolidated stockholders’ equity of the Corporation increased by $2.9 million from September 30, 2023, to $158.0 million as of December 31, 2023. Changes to equity for the current quarter included net income of $571 thousand, $199 thousand in ESOP loan payments, an increase of a $2.9 million in other comprehensive income, partially offset by quarter dividends paid of $1.4 million. The Community Bank Leverage Ratio for the Bank was 9.46% at December 31, 2023.

Asset Quality Summary
The ratio of non-performing loans to total loans increased to 1.76% as of December 31, 2023, from 1.53% as of September 30, 2023, while the ratio of non-performing assets to total assets increased to 1.58% as of December 31, 2023, compared to 1.38% at September 30, 2023. Driving the increase in these ratios were total non-performing loans which increased $4.7 million from $29.1 million as of September 30, 2023, to $33.8 million as of December 31, 2023, due to risk rating downgrades of several SBA loans and small ticket equipment leases, partially offset by charge-offs of leases and SBA loans as of December 31, 2023.
Meridian realized net charge-offs of 0.11% of total average loans for the quarter ended December 31, 2023, compared with the quarter ended September 30, 2023 level of 0.05%, as net charge-offs increased to $2.2 million for the quarter ended December 31, 2023, compared to net-charge-offs of $913 thousand for the quarter ended September 30, 2023. Fourth quarter charge-offs were comprised of $1.2 million from small ticket equipment leases which are charged-off after becoming more than 120 days past due, and $890 thousand for an SBA loan. There were recoveries of $17 thousand, largely related to leases.
The ratio of allowance for credit losses to total loans held for investment, excluding loans at fair value (a non-GAAP measure, see reconciliation in the Appendix), was 1.17% as of December 31, 2023 compared to 1.05% as of September 30, 2023. As of December 31, 2023 there were specific reserves of $6.5 million against individually evaluated loans, an increase from $2.6 million as of September 30, 2023. The drivers of the increase related to a $2.3 million increase in a commercial loan relationship specific reserve for which new information became available related to the value of the underlying collateral, combined with the net impact of establishing $2.3 million in specific reserves on SBA loan relationships classified as non-performing, netted with the charge-off an SBA loan during the quarter that had a specific reserve of $890 thousand in the prior quarter.

About Meridian Corporation
Meridian Bank, the wholly owned subsidiary of Meridian Corporation, is an innovative community bank serving Pennsylvania, New Jersey, Delaware and Maryland. Through its 17 offices, including banking branches and mortgage locations, Meridian offers a full suite of financial products and services. Meridian specializes in business and industrial lending, retail and commercial real estate lending, electronic payments, and wealth management solutions through Meridian Wealth Partners. Meridian also offers a broad menu of high-yield depository products supported by robust online and mobile access. For additional information, visit our website at www.meridianbanker.com. Member FDIC.

“Safe Harbor” Statement
In addition to historical information, this press release may contain “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 with respect to Meridian Corporation’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Meridian Corporation’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation, credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; increased competitive pressures; changes in spreads on interest-earning assets and interest-bearing liabilities; changes in general economic conditions and conditions within the securities markets; unanticipated changes in our liquidity position; unanticipated changes in regulatory and governmental policies impacting interest rates and financial markets; legislation affecting the financial services industry as a whole, and Meridian Corporation, in particular; changes in accounting policies, practices or guidance; developments affecting the industry and the soundness of financial institutions and further disruption to the economy and U.S. banking system; among others, could cause Meridian Corporation’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements. Meridian Corporation cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward-looking statements and information set forth herein are based on management’s current beliefs
5
Exhibit 99.1
and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Meridian Corporation’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Meridian Corporation does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Meridian Corporation or by or on behalf of Meridian Bank.
6
Exhibit 99.1
MERIDIAN CORPORATION AND SUBSIDIARIES
FINANCIAL RATIOS (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
Quarter Ended
December 31,
2023		September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022
Earnings and Per Share Data:
Net income$571 $4,005 $4,645 $4,021 $4,557 
Basic earnings per common share$0.05 $0.36 $0.42 $0.36 $0.40 
Diluted earnings per common share$0.05 $0.35 $0.41 $0.34 $0.39 
Common shares outstanding11,183 11,178 11,178 11,305 11,466 
Performance Ratios:
Return on average assets
0.10 %0.73 %0.86 %0.78 %0.92 %
Return on average equity
1.44 10.17 12.08 10.65 11.91 
Net interest margin (tax-equivalent)
3.18 3.29 3.33 3.61 3.93 
Yield on earning assets (tax-equivalent)
6.81 6.76 6.57 6.31 5.88 
Cost of funds3.81 3.63 3.39 2.83 2.07 
Efficiency ratio
78.63 %79.09 %74.80 %73.16 %75.61 %
Asset Quality Ratios:
Net charge-offs (recoveries) to average loans0.11 %0.05 %0.05 %0.08 %0.05 %
Non-performing loans to total loans
1.76 1.53 1.44 1.25 1.20 
Non-performing assets to total assets
1.58 1.38 1.32 1.11 1.11 
Allowance for credit losses to:
Total loans held for investment
1.17 1.04 1.09 1.12 1.08 
Total loans held for investment (excluding loans at fair value) (1)
1.17 1.05 1.10 1.13 1.09 
Non-performing loans
65.48 %67.61 %73.97 %88.41 %88.66 %
Capital Ratios:
Book value per common share$14.13 $13.88 $13.77 $13.54 $13.37 
Tangible book value per common share$13.78 $13.53 $13.42 $13.18 $13.01 
Total equity/Total assets7.04 %6.95 %6.98 %6.86 %7.43 %
Tangible common equity/Tangible assets - Corporation (1)
6.87 6.79 6.81 6.70 7.25 
Tangible common equity/Tangible assets - Bank (1)
8.94 8.89 8.54 8.26 8.80 
Tier 1 leverage ratio - Bank9.46 9.65 9.22 9.32 9.95 
Common tier 1 risk-based capital ratio - Bank10.10 10.82 10.35 10.27 10.73 
Tier 1 risk-based capital ratio - Bank10.10 10.82 10.35 10.27 10.73 
Total risk-based capital ratio - Bank11.17 %11.85 %11.43 %11.41 %11.87 %
(1) See Non-GAAP reconciliation in the Appendix
7
Exhibit 99.1
MERIDIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
Three Months Ended
Year Ended
December 31,
2023		September 30,
2023		December 31,
2022		December 31,
2023		December 31,
2022
Interest income:
Loans and other finance receivables, including fees$34,469 $33,980 $26,440 $130,081 $84,627 
Securities - taxable1,020 901 821 3,873 2,420 
Securities - tax-exempt331 333 373 1,369 1,388 
Cash and cash equivalents526 245 129 1,266 286 
Total interest income36,346 35,459 27,763 136,589 88,721 
Interest expense:
Deposits16,806 15,543 8,215 57,819 15,397 
Borrowings2,598 2,692 1,030 9,828 3,196 
       Total interest expense19,404 18,235 9,245 67,647 18,593 
Net interest income16,942 17,224 18,518 68,942 70,128 
Provision for credit losses4,628 82 746 6,815 2,488 
Net interest income after provision for credit losses12,314 17,142 17,772 62,127 67,640 
Non-interest income:
Mortgage banking income3,394 4,819 3,958 16,537 25,325 
Wealth management income1,239 1,258 1,061 4,928 4,733 
SBA loan income1,022 982 522 4,485 4,467 
Earnings on investment in life insurance204 201 140 789 553 
Net change in the fair value of derivative instruments(126)103 10 91 (703)
Net change in the fair value of loans held-for-sale120 111 249 32 (844)
Net change in the fair value of loans held-for-investment805 (570)91 132 (2,408)
Net gain on hedging activity(53)82 498 28 5,439 
Net loss on sale of investment securities available-for-sale— (3)— (58)— 
Other1,512 1,103 1,467 5,001 5,162 
Total non-interest income8,117 8,086 7,996 31,965 41,724 
Non-interest expense:
Salaries and employee benefits11,744 12,420 12,794 47,377 54,378 
Occupancy and equipment1,232 1,226 1,218 4,842 4,837 
Professional fees1,382 1,104 976 4,312 3,635 
Advertising and promotion931 848 996 3,730 4,336 
Data processing and software1,651 1,652 1,513 6,415 5,451 
Pennsylvania bank shares tax233 244 181 968 793 
Other2,530 2,524 2,369 9,481 8,014 
Total non-interest expense19,703 20,018 20,047 77,125 81,444 
        Income before income taxes728 5,210 5,721 16,967 27,920 
Income tax expense157 1,205 1,164 3,724 6,091 
        Net income $571 $4,005 $4,557 $13,243 $21,829 
Basic earnings per common share$0.05 $0.36 $0.40 $1.19 $1.85 
Diluted earnings per common share$0.05 $0.35 $0.39 $1.16 $1.79 
Basic weighted average shares outstanding11,070 11,057 11,389 11,115 11,792 
Diluted weighted average shares outstanding11,206 11,363 11,795 11,387 12,204 
8
Exhibit 99.1
MERIDIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CONDITION (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
December 31,
2023		September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022
Assets:
Cash and due from banks$10,067 $12,734 $10,576 $8,473 $11,299 
Interest-bearing deposits at other banks46,630 47,025 36,290 100,030 27,092 
Cash and cash equivalents56,697 59,759 46,866 108,503 38,391 
Securities available-for-sale, at fair value146,019 122,218 126,668 142,933 135,346 
Securities held-to-maturity, at amortized cost35,781 36,232 36,463 36,525 37,479 
Equity investments2,121 2,019 2,097 2,110 2,086 
Mortgage loans held for sale, at fair value24,816 23,144 40,422 35,701 22,243 
Loans and other finance receivables, net of fees and costs1,895,806 1,885,629 1,859,839 1,818,189 1,743,682 
Allowance for credit losses(22,107)(19,683)(20,242)(20,442)(18,828)
Loans and other finance receivables, net of the allowance for credit losses1,873,699 1,865,946 1,839,597 1,797,747 1,724,854 
Restricted investment in bank stock8,072 8,309 9,157 10,173 6,931 
Bank premises and equipment, net13,557 13,310 13,234 13,281 13,349 
Bank owned life insurance28,844 28,641 28,440 28,247 28,055 
Accrued interest receivable9,325 8,984 7,651 7,651 7,363 
Other real estate owned1,703 1,703 1,703 1,703 1,703 
Deferred income taxes4,201 4,993 4,258 4,017 3,936 
Servicing assets11,748 11,835 12,193 12,125 12,346 
Goodwill899 899 899 899 899 
Intangible assets2,971 3,022 3,073 3,124 3,175 
Other assets25,740 39,957 34,156 25,044 24,072 
Total assets$2,246,193 $2,230,971 $2,206,877 $2,229,783 $2,062,228 
Liabilities:
Deposits:
Non-interest bearing$239,289 $244,668 $269,174 $262,636 $301,727 
Interest bearing
Interest checking150,898 156,537 155,907 232,616 219,838 
Money market and savings deposits747,803 746,599 710,546 647,904 697,564 
Time deposits685,472 660,841 646,978 627,257 493,350 
Total interest-bearing deposits1,584,173 1,563,977 1,513,431 1,507,777 1,410,752 
Total deposits1,823,462 1,808,645 1,782,605 1,770,413 1,712,479 
Borrowings174,896 177,959 194,636 233,883 122,082 
Subordinated debentures49,836 50,079 40,348 40,319 40,346 
Accrued interest payable10,324 7,814 5,612 3,836 2,389 
Other liabilities29,653 31,360 29,714 28,283 31,652 
Total liabilities2,088,171 2,075,857 2,052,915 2,076,734 1,908,948 
Stockholders’ equity:
Common stock13,186 13,181 13,181 13,180 13,156 
Surplus80,325 79,731 79,650 79,473 79,072 
Treasury stock(26,079)(26,079)(26,079)(24,512)(21,821)
Unearned common stock held by employee stock ownership plan(1,204)(1,403)(1,403)(1,403)(1,403)
Retained earnings101,216 102,043 99,434 96,180 95,815 
Accumulated other comprehensive loss(9,422)(12,359)(10,821)(9,869)(11,539)
Total stockholders’ equity158,022 155,114 153,962 153,049 153,280 
Total liabilities and stockholders’ equity$2,246,193 $2,230,971 $2,206,877 $2,229,783 $2,062,228 
9
Exhibit 99.1
MERIDIAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND SEGMENT INFORMATION (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
Three Months Ended
December 31,
2023		September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022
Interest income$36,346 $35,459 $33,836 $30,947 $27,763 
Interest expense19,404 18,235 16,738 13,270 9,245 
Net interest income16,942 17,224 17,098 17,677 18,518 
Provision for credit losses
4,628 82 705 1,399 746 
Non-interest income8,117 8,086 9,124 6,638 7,996 
Non-interest expense19,703 20,018 19,615 17,789 20,047 
Income before income tax expense728 5,210 5,902 5,127 5,721 
Income tax expense157 1,205 1,257 1,106 1,164 
Net Income$571 $4,005 $4,645 $4,021 $4,557 
Basic weighted average shares outstanding11,070 11,057 11,062 11,272 11,389 
Basic earnings per common share$0.05 $0.36 $0.42 $0.36 $0.40 
Diluted weighted average shares outstanding11,206 11,363 11,304 11,656 11,795 
Diluted earnings per common share$0.05 $0.35 $0.41 $0.34 $0.39 
Segment Information
Three Months Ended December 31, 2023
Three Months Ended December 31, 2022
(dollars in thousands)BankWealthMortgageTotalBankWealthMortgageTotal
Net interest income$16,908 $(15)$49 $16,942 $18,376 $68 $74 $18,518 
Provision for credit losses
4,628 — — 4,628 746 — — 746 
Net interest income after provision
12,280 (15)49 12,314 17,630 68 74 17,772 
Non-interest income2,051 1,239 4,827 8,117 1,291 1,061 5,644 7,996 
Non-interest expense13,202 957 5,544 19,703 12,939 918 6,190 20,047 
Income (loss) before income taxes
$1,129 $267 $(668)$728 $5,982 $211 $(472)$5,721 
Efficiency ratio70 %78 %114 %79 %66 %81 %108 %76 %
Year Ended December 31, 2023
Year Ended December 31, 2022
(dollars in thousands)BankWealthMortgageTotalBankWealthMortgageTotal
Net interest income$68,835 $(27)$134 $68,942 $68,570 $697 $861 $70,128 
Provision for credit losses
6,815 — — 6,815 2,488 — — 2,488 
Net interest income after provision
62,020 (27)134 62,127 66,082 697 861 67,640 
Non-interest income7,743 4,928 19,294 31,965 7,556 4,732 29,436 41,724 
Non-interest expense48,827 3,661 24,637 77,125 45,122 3,399 32,923 81,444 
Income (loss) before income taxes
$20,936 $1,240 $(5,209)$16,967 $28,516 $2,030 $(2,626)$27,920 
Efficiency ratio64 %75 %127 %76 %59 %63 %109 %73 %

10

MERIDIAN CORPORATION AND SUBSIDIARIES
APPENDIX: NON-GAAP MEASURES (Unaudited)
(Dollar amounts and shares in thousands, except per share amounts)
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 performance and financial condition measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of Meridian’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies.
Pre-tax, Pre-provision Reconciliation
Three Months Ended
Year Ended
(Dollars in thousands, except per share data)((Unaudited)
December 31,
2023		September 30,
2023		December 31,
2023		December 31,
2022
Income before income tax expense$728 $5,210 $16,967 $27,920 
Provision for credit losses4,628 82 6,815 2,488 
Pre-tax, pre-provision income$5,356 $5,292 $23,782 $30,408 

Pre-tax, Pre-provision Reconciliation
Three Months Ended
Year Ended
(Dollars in thousands, except per share data)((Unaudited)
December 31,
2023		September 30,
2023		December 31,
2023		December 31,
2022
Bank$5,757 $6,399 $27,751 $31,004 
Wealth267 417 1,240 2,030 
Mortgage(668)(1,524)(5,209)(2,626)
Pre-tax, pre-provision income$5,356 $5,292 $23,782 $30,408 

Allowance For Loan Losses to Loans, Net of Fees and Costs, Excluding and Loans at Fair Value
December 31,
2023		September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022
Allowance for credit losses (GAAP)
$22,107 $19,683 $20,242 $20,442 $18,828 
Loans, net of fees and costs (GAAP)
1,895,806 1,885,629 1,859,839 1,818,189 1,743,682 
Less: Loans fair valued
(13,726)(13,231)(14,403)(14,434)(14,502)
Loans, net of fees and costs, excluding loans at fair value (non-GAAP)
$1,882,080 $1,872,398 $1,845,436 $1,803,755 $1,729,180 
Allowance for credit losses to loans, net of fees and costs (GAAP)
1.17 %1.04 %1.09 %1.12 %1.08 %
Allowance for credit losses to loans, net of fees and costs, excluding loans at fair value (non-GAAP)
1.17 %1.05 %1.10 %1.13 %1.09 %
Tangible Common Equity Ratio Reconciliation - Corporation
December 31,
2023		September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022
Total stockholders' equity (GAAP)
$158,022 $155,114 $153,962 $153,049 $153,280 
Less: Goodwill and intangible assets
(3,870)(3,921)(3,972)(4,023)(4,074)
Tangible common equity (non-GAAP)
154,152 151,193 149,990 149,026 149,206 
Total assets (GAAP)
2,246,193 2,230,971 2,206,877 2,229,783 2,062,228 
Less: Goodwill and intangible assets(3,870)(3,921)(3,972)(4,023)(4,074)
Tangible assets (non-GAAP)
$2,242,323 $2,227,050 $2,202,905 $2,225,760 $2,058,154 
Tangible common equity to tangible assets ratio - Corporation (non-GAAP)
6.87 %6.79 %6.81 %6.70 %7.25 %
11

Tangible Common Equity Ratio Reconciliation - Bank
December 31,
2023		September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022
Total stockholders' equity (GAAP)$204,132 $201,996 $192,209 $187,954 $185,039 
Less: Goodwill and intangible assets(3,870)(3,921)(3,972)(4,023)(4,074)
Tangible common equity (non-GAAP)200,262 198,075 188,237 183,931 180,965 
Total assets (GAAP)2,244,893 2,232,297 2,208,252 2,229,721 2,059,557 
Less: Goodwill and intangible assets(3,870)(3,921)(3,972)(4,023)(4,074)
Tangible assets (non-GAAP)$2,241,023 $2,228,376 $2,204,280 $2,225,698 $2,055,483 
Tangible common equity to tangible assets ratio - Bank (non-GAAP)8.94 %8.89 %8.54 %8.26 %8.80 %
Tangible Book Value Reconciliation
December 31,
2023		September 30,
2023		June 30,
2023		March 31,
2023		December 31,
2022
Book value per common share$14.13 $13.88 $13.77 $13.54 $13.37 
Less: Impact of goodwill /intangible assets0.35 0.35 0.35 0.36 0.36 
Tangible book value per common share$13.78 $13.53 $13.42 $13.18 $13.01 
12
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 NASDAQ: MRBK Q4'2023 Earnings Supplement

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 2Meridian 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 statements include statements with respect to Meridian Corporation’s strategies, goals, beliefs, expectations, estimates, intentions, capital raising efforts, financial condition and results of operations, future performance and business. Statements preceded by, followed by, or that include the words “may,” “could,” “should,” “pro forma,” “looking forward,” “would,” “believe,” “expect,” “anticipate,” “estimate,” “intend,” “plan,” or similar expressions generally indicate a forward-looking statement. These forward-looking statements involve risks and uncertainties that are subject to change based on various important factors (some of which, in whole or in part, are beyond Meridian Corporation’s control). Numerous competitive, economic, regulatory, legal and technological factors, risks and uncertainties that could cause actual results to differ materially include, without limitation, credit losses and the credit risk of our commercial and consumer loan products; changes in the level of charge-offs and changes in estimates of the adequacy of the allowance for credit losses, or ACL; cyber-security concerns; rapid technological developments and changes; increased competitive pressures; changes in spreads on interest-earning assets and interest-bearing liabilities; changes in general economic conditions and conditions within the securities markets; legislative and regulatory changes; and the effects of inflation, a potential recession, among others, could cause Meridian Corporation’s financial performance to differ materially from the goals, plans, objectives, intentions and expectations expressed in such forward-looking statements. Meridian Corporation cautions that the foregoing factors are not exclusive, and neither such factors nor any such forward-looking statement takes into account the impact of any future events. All forward- looking statements and information set forth herein are based on management’s current beliefs and assumptions as of the date hereof and speak only as of the date they are made. For a more complete discussion of the assumptions, risks and uncertainties related to our business, you are encouraged to review Meridian Corporation’s filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022 and subsequently filed quarterly reports on Form 10-Q and current reports on Form 8-K that update or provide information in addition to the information included in the Form 10-K and Form 10-Q filings, if any. Meridian Corporation does not undertake to update any forward-looking statement whether written or oral, that may be made from time to time by Meridian Corporation or by or on behalf of Meridian Bank.

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 3Meridian Corporation MRBK INVESTMENT HIGHLIGHTS • "Go to" bank in the Delaware Valley - comfortably handles all but largest companies. • Technology driven with valuable customer base trained to solely use electronic channel. • Skilled management team with extensive in-market experience. • Strong sales culture that capitalizes on market disruption. • Demonstrated organic growth engine in diversified loan segments. • Financial services business model with significant non-interest revenue. • Historically well capitalized with strong net interest margin. • Excellent historical asset quality. • Strong net interest margin driven by loan yield. • Nationally recognized as a great place to work.

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 4Meridian Corporation GEOGRAPHIC FOOTPRINT • Serves PA, NJ, DE & MD • Philadelphia MSA is 8th largest in the US Regional Market • HQ in Malvern, PA • 6 full service branches • Main office in Wayne, PA • 10 mortgage loan production offices • Naples, FL • Reaches broad SW FL market ************************ Satellite Commercial Loan Production Office

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 5Meridian Corporation COMPANY SNAPSHOT (1) Includes home equity loans, residential mortgage loans held in portfolio and individual consumer loans. • Meridian is an innovative, growth oriented commercial bank serving the Tri-State area and the Baltimore /DC market. • We focus on customer success and helping to build the economics of our markets. • Meridian specializes in business and industrial lending, retail and commercial real estate lending, along with a broad menu of high- yielding depository products. • We deliver these services with great technology, supported by robust online and mobile access, and physical locations convenient to our customers. Cash & investments 11% C & I loans 27% CRE loans 29% Construction loans 13% Consumer loans (1) 14% Residential loans HFS 2% FF & E 0% Other assets 4% Asset Mix at December 31, 2023 Profile and Business Lines

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 6Meridian Corporation Q4'2023 HIGHLIGHTS 1) As of and for the quarter ended and year ended December 31, 2023, per January 26, 2024 press release. 2) Includes loans held for sale and loans held for investment. 3) A Non-GAAP measure. See Non-GAAP reconciliation in the Appendix. Financial Highlights ¹ Balance Sheet: • Portfolio loans grew $10.0 million, or 0.5% in Q4'23. - Y over Y up $157.8 million, or 9.1% • Commercial loans up $15.7 million, or 1.1% in Q4'23 - Y over Y up $114.6 million, or 8.7% • Deposits up $14.8 million in Q4'23. - Y over Y up $111.0 million, or 6.5% • Interest bearing deposits increased $20.2 million, - Y over Y up $173.4 million, or 12.3%. • Capital - 11.3% total RBC. • Bank CBLR - 9.5% • $9.7 million in sub debt raised Q3'23 Income Statement (Q4'23 v. Q3'23): • NII decreased $282 thousand; NIM 3.2%. • Provision for credit losses of $4.6 million. • MTG banking revenue down $1.4 million. • Non-interest expense down $315 thousand. • Bank pre-tax, pre-provision income of $5.8 million Balance Sheet ($ in Millions) Total Assets $ 2,246 Total Loans & Leases² $ 1,921 Deposits $ 1,823 Equity $ 158 Tangible Equity to Tangible Assets3 6.87 % Profitability (%) Q4'2023 FY 2023 ROE 1.44% 8.53% ROA 0.10% 0.61% NIM 3.18% 3.35% Asset Quality (%) ACL / Loans & Leases3 1.17% 4Q NCOs (recoveries) / Loans 0.11% Nonaccrual Loans / Loans 1.76 % Net Income & Share Data Q4'2023 FY 2023 (dollars in thousands, except for per share amounts) Net income $ 571 $ 13,243 Diluted earnings per share $ 0.05 $ 1.16 Price per common share $ 13.90 $ 13.90 Pre-tax, pre-provision income3 $ 5,356 $ 23,782 Pre-tax, pre-provision income - Bank3 $ 5,757 $ 27,751 Dividends per common share $ 0.125 $ 0.500 Dividend yield 0.9 % 3.6 % Payout ratio 250.0 % 42.0 %

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 7Meridian Corporation PRE-TAX, PRE-PROVISION INCOME BY SEGMENT Pre-tax, Pre-provision Income by Segment Q4'2023 Q3'2023 YR 2023 YR 2022 Bank $ 5,757 $ 6,399 $ 27,751 $ 31,004 Wealth 267 417 1,240 2,030 Mortgage (668) (1,524) (5,209) (2,626) Total Pre-tax Income $ 5,356 $ 5,292 $ 23,782 $ 30,408 % of Pre-tax, Pre-provision Income by Segment (Q4) 107.5% 5.0% Bank Wealth Mortgage % of Pre-tax, Pre-provision Income by Segment (YTD) 116.7% 5.2% Bank Wealth Mortgage

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 8Meridian Corporation NET INTEREST MARGIN • The net interest margin decreased 11 basis points to 3.18% as the cost of funds outpaced the increase in yield on earnings assets. • Interest income increased $881 thousand quarter-over-quarter, on a tax equivalent basis, due to a higher yield on earning assets and higher levels of average earning assets. • Total interest expense increased $1.2 million, quarter-over-quarter, due primarily to market interest rate rises, and an increase in deposit average balances. N IM Yield on E arning A ssets / C ost of Funds Net Interest Margin Trend 3.93% 3.61% 3.33% 3.29% 3.18% 5.88% 6.31% 6.57% 6.76% 6.81% 2.07% 2.83% 3.39% 3.63% 3.81% Net Interest Margin Yield on Earning Assets Cost of Funds Q4' 2022 Q1' 2023 Q2' 2023 Q3' 2023 Q4' 2023 3.00% 3.25% 3.50% 3.75% 4.00% 2.00% 3.00% 4.00% 5.00% 6.00% 7.00% 8.00%

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 9Meridian Corporation NON-INTEREST INCOME Non-interest income increased $31 thousand or 0.4% • Mortgage banking income decreased $1.8 million, or 34.8%: • SBA loan income increased $40 thousand, or 4.1%: ◦ $20.1 million loans sold in Q4'2023, compared to $26.2 million in Q3'2023 ◦ Gross margin of 6.4% in Q4'2023, compared to 6.2% Q3'2023 • Other income increased $1.8 million, or 244.9%, due to a $1.4 million increase in the fair value on certain loans held-for- investment that are not included in mortgage banking income. (Dollars in thousands) Q4'2023 Q3'2023 $ Change Mortgage banking income 1 3,335 5,115 (1,780) SBA income 1,022 982 40 Wealth management income 1,239 1,258 (19) Other income 2,521 731 1,790 Total $ 8,117 $ 8,086 $ 31 Note 1 - includes FV change on mortgages HFS and related hedging derivatives. 41.1% 15.3% 12.6% 31.1% Mortgage banking income (incl. FV change) Wealth management income SBA income Other income (% of total non-interest income during Q4'2023)

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 10Meridian Corporation MORTGAGE PERFORMANCE • Fiscal year 2023 - unprecedented lack of homes for sale • Margin declined 44 basis points year over year • Mortgage loan origination volume down $445.3 million year over year Net Profit ($000s) $2,403 $20,899 $14,633 $(2,627) $(5,213) Revenue Expense Net profit 2019 2020 2021 2022 2023 $(25,000) $— $25,000 $50,000 $75,000 $100,000 Continued expense reductions: • Cumulative expense reduction of over $3.8 million. • Reducing FTEs, instituting pay cuts & other compensation changes, closing loan production offices. Cumulative Expense Reductions ($000s) $15 $336 $853 $1,593$1,636 $1,903 $2,673 $3,803 Cumulative expense reductions LTD Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 $— $1,000 $2,000 $3,000 $4,000

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 11Meridian Corporation MORTGAGE VOLUME & MARGIN TRENDS • Margin: 4Q 2023 margin of 2.76% up 5 bps from 2.71% for the prior quarter. • Purchase market comprised > 90% of the originations. • Volume continues to be impacted by lack of home inventory, higher mortgage rates, and high property values

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 12Meridian Corporation NON-INTEREST EXPENSE Non-Interest Expense down $315 thousand or 1.6% • Decreased salaries and benefits expense due to: ◦ Mortgage salaries down as loan origination and sales volumes down. Bank expense up due to increase in FTE's and incentive compensation. • Professional fees were up due to legal fees related to loan / OREO workouts. • Other expenses were up due primarily to seasonal increases in advertising and business development expense. (% of total non-interest expense during Q4'2023) (Dollars in thousands) Q4'2023 Q3'2023 $ Change Salaries and employee benefits 11,744 12,420 (676) Occupancy and equipment 1,232 1,226 6 Professional fees 1,382 1,104 278 Data processing and information 1,651 1,652 (1) Other 3,694 3,616 78 Total $ 19,703 $ 20,018 $ (315) 59.6% 6.3% 7.0% 8.4% 18.7% Salaries and employee benefits Occupancy and equipment Professional fees Data processing and information technology Other

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 13Meridian Corporation LOAN PORTFOLIO TRENDS Q4'2023 vs Q3'2023 (Dollars in thousands) December 31, 2023 September 30, 2023 Q over Q $ Change Annual Growth % Commercial mortgage 737,863 $ 696,124 $ 41,739 30.5 % Home equity lines and loans 76,287 73,844 2,443 28.4 % Residential mortgage 260,604 256,343 4,261 17.5 % Construction 246,440 276,590 (30,150) (9.4) % Commercial and industrial 234,359 231,511 2,848 1.2 % Shared national credits 68,532 68,350 182 0.3 % Small business loans 142,342 141,265 1,077 4.5 % Consumer 389 434 (45) (20.3) % Leases, net 126,597 138,963 (12,366) (8.9) % Total portfolio loans $ 1,893,413 $ 1,883,424 $ 9,989 9.1 % Commercial mortgage, 39% Home equity lines and loans, 4%Residential mortgage, 14% Construction , 13% Commercial and industrial, 12% Shared national credits, 4% Small business loans, 7% Leases, 7% Commercial - 82% Residential - 14% Home Equity - 4% • Portfolio loans grew $10.0 million in Q4'23, or 9.1% year over year. • Commercial CRE and construction loans combined grew $11.6 million in Q4'23, or 17.5% year over year. • Leases down $12.4 million in Q4'23, or 8.9% year over year due to reallocation of funds to: ◦ higher yielding portfolios ◦ relationship-based portfolios.

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 14Meridian Corporation Construction, 17.9% RE Investment , 22.5% Residential Mtg, 13.3%Other, 6.6% Manufacturing, 7.3% Retail Trade, 3.2% WholesaleTrade, 3.3% Health & Social Serv, 4.9% Professional Serv, 4.7% HELOC, 4.0% Leisure, 4.3% Science & Tech, 3.7% Admin & Support, 2.0% RE & Rental Lease, 1.0% Resi Construction, 0.5% Construction RE Investment Residential Mtg Other Manufacturing Retail Trade WholesaleTrade Health & Social Serv Professional Serv HELOC Leisure Science & Tech Admin & Support RE & Rental Lease Resi Construction Waste Mgmt & Remediation LOAN PORTFOLIO DIVERSIFICATION Total Loans $1.9 Billion 1 (as a % of total loans) (1) Included in RE Investment loans are $58.9 million (3% of total loans) non-owner occupied office space loans with an average loan size of $1.5 million.

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 15Meridian Corporation 1.38% 1.27% 1.20% 1.09% 1.13% 1.10% 1.05% 1.17% Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 0.75% 1.00% 1.25% 1.50% ASSET QUALITY TRENDS 1) Includes loans held for sale and held for investment. 2) Excludes loans at fair value, which is a non-GAAP measure. See Appendix for Non-GAAP to GAAP reconciliation 3) CECL standard adopted effective January 1, 2023, when we recorded an increase to allowance for credit losses of $1.6 million. Non-performing Loans & Assets Ratios(1) Net Charge-offs / Average Loans ACL / Loans (2)(3) 1.51% 1.46% 1.40% 1.20% 1.25% 1.44% 1.53% 1.76% 1.25% 1.24% 1.20% 1.11% 1.11% 1.32% 1.38% 1.58% NPLs / Loans NPAs / Assets Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 1.00% 1.25% 1.50% 1.75% 2.00% $546 $414 $357 $891 $1,453 $986 $913 $2,197 0.04% 0.04% 0.02% 0.05% 0.08% 0.05% 0.05% 0.11% Net C/O's ($) Net Charge-offs Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 0.00% 0.05% 0.10% 0.15% $— $1,000 $2,000 $3,000 $615 $602 $526 $746 $1,399 $705 $82 $4,628 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Q2'23 Q3'23 Q4'23 $— $1,000 $2,000 $3,000 $4,000 $5,000 Provision for Credit Losses ($000s)

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 16Meridian Corporation DEPOSIT COMPOSITION Business Accounts, 58% Consumer Accounts, 11% Municipal Deposits, 8% Brokered Deposits, 23% Business Accounts Consumer Accounts Municipal Deposits Brokered Deposits Total Deposits $1.8 Billion • At December 31, 2023, 65% of business accounts and 89% of consumer accounts were fully insured by the FDIC. • The average business money market account balance was $424 thousand at December 31, 2023. • The municipal deposits are 100% insured or collateralized and brokered deposits are 100% FDIC insured. • The level of uninsured deposits for the entire deposit base was 21% at December 31, 2023. (as a % of total deposits)

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 17Meridian Corporation INVESTMENT PORTFOLIO COMPOSITION • Total investment securities 8.2% of total assets: – 81% Available for sale (AFS). – 19% Held-to-maturity (HTM). • 100% investment grade: – w/ 67% >AA or higher. • Average TEY of 3.23% year-to-date. • Portfolio duration - 4.3 years and average life - 5.4 years. • 12-month projected cash flow $22.4 million, or 12% of portfolio • Total net unrealized loss of $11.6 million: – HTM $1.1 million. – AFS $10.5 million. – AOCI $9.0 or 4.2% of Bank Tier 1 Capital. (1) Capital ratios reflect Meridian Bank ratios. US government agency 39.5% State & municipal - tax free 21.3% Other 11.1% US asset backed 9.2% State & municipal - taxable 17.8% Equity Securities 1.2% US government agency State & municipal - tax free Other US asset backed State & municipal - taxable Equity Securities Total Securities $183.8 million (as a % of total investments)

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 18Meridian Corporation STRONG BANK CAPITAL POSITION • All Bank capital ratios(1) exceed well capitalized regulatory requirements. ◦ Added $9.7 million of Corp. sub debt in Q3, $9 million dropped down to Bank as Tier 1 ◦ Community Banking Leverage Ratio of 9.46% compared to minimum of 9.0% ◦ $10.2 million of excess capital. • On January 25, 2024, the Board of Directors declared a Q4'2023 dividend of $0.125 per common share. Excess Capital (000s) $99,606 $43,986 $75,368 $24,460 9.46% 10.10% 10.10% 11.17% Regulatory Minimum Excess Capital Ratio Tier 1 Leverage Ratio ($) Tier 1 Risk Based Ratio ($) CE Tier 1 Ratio ($) Total Risk Based Ratio ($) $— $50,000 $100,000 $150,000 $200,000 $250,000 9.00% 10.00% 11.00% 12.00% 13.00% 14.00% (1) Capital ratios reflect Meridian Bank ratios.

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 19Meridian Corporation APPENDIX - HISTORICAL FINANCIAL HIGHLIGHTS AND RECONCILIATIONS OF NON-GAAP MEASURES

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 20Meridian 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). 3) A Non-GAAP measure. See Appendix for Non-GAAP to GAAP reconciliation. As of or the Quarter Ended As of or the Year Ended (dollars in thousands) Q4'2023 Q3'2023 Q4'2022 2023Y 2022Y 2021Y Balance Sheet Total Assets $ 2,246,193 $ 2,230,971 $ 2,062,228 $ 2,246,193 $ 2,062,228 $ 1,713,443 Loans (1) 1,920,622 1,908,773 1,765,925 1,920,622 1,765,925 1,467,339 Deposits 1,823,462 1,808,645 1,712,479 1,823,462 1,712,479 1,446,413 Gross Loans / Deposits 105.33 % 105.54 % 103.12 % 105.33 % 103.12 % 101.45 % Capital Total Equity $ 158,022 $ 155,114 $ 153,280 $ 158,022 $ 153,280 $ 165,360 Tangible Common Equity / Tangible Assets - HC (3) 6.87 % 6.79 % 7.25 % 6.87 % 7.25 % 9.42 % Tangible Common Equity / Tangible Assets - Bank (3) 8.94 8.89 8.80 8.94 8.80 11.54 Tier 1 Leverage Ratio - Bank 9.46 9.65 9.95 9.46 9.95 11.51 Total Capital Ratio - Bank 11.17 11.85 11.87 11.17 11.87 14.63 Commercial Real Estate Loans / Total RBC 255.9 % 261.3 % 232.8 % 255.9 % 232.8 % 167.2 % Earnings & Profitability Net Income $ 571 $ 4,005 $ 4,557 $ 13,243 $ 21,829 $ 35,585 ROA 0.10 % 0.73 % 0.92 % 0.61 % 1.18 % 2.06 % ROE 1.44 10.17 11.91 8.53 13.87 23.74 Net Interest Margin (NIM)(TEY) 3.18 3.29 3.93 3.35 3.98 3.77 Non-Int Inc. / Avg. Assets 1.45 1.47 1.62 1.48 2.26 5.09 Efficiency Ratio 78.63 % 79.09 % 75.61 % 76.43 % 72.81 % 68.65 % Asset Quality Nonaccrual Loans / Loans (1) 1.76 % 1.53 % 1.20 % 1.76 % 1.20 % 1.57 % NPAs / Assets 1.58 1.38 1.11 1.58 1.11 1.34 Reserves / Loans (2) (3) 1.17 1.05 1.09 1.17 1.09 1.46 NCOs / Average Loans 0.11 % 0.05 % 0.05 % 0.30 % 0.15 % 0.00 % Yield and Cost Yield on Earning Assets (TEY) 6.81 % 6.76 % 5.88 % 6.62 % 5.02 % 4.27 % Cost of Deposits 3.66 3.46 1.92 3.24 0.97 0.48 Cost of Interest-Bearing Liabilities 4.36 % 4.16 % 2.51 % 3.97 % 1.36 % 0.65 %

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 21Meridian Corporation Allowance For Credit Losses to Loans, Net of Fees and Costs, Excluding Loans at Fair Value (dollars in thousands) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Allowance for credit losses (GAAP) $ 22,107 $ 19,683 $ 20,242 $ 20,442 $ 18,828 Loans, net of fees and costs (GAAP) 1,895,806 1,885,629 1,859,839 1,818,189 1,743,682 Less: Loans fair valued (13,726) (13,231) (14,403) (14,434) (14,502) GAAP) $ 1,882,080 $ 1,872,398 $ 1,845,436 $ 1,803,755 $ 1,729,180 Allowance for credit losses to loans, net of fees and costs (GAAP) 1.17 % 1.04 % 1.09 % 1.12 % 1.08 % loans at fair value (non-GAAP) 1.17 % 1.05 % 1.10 % 1.13 % 1.09 % 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 performance and financial condition measures determined in accordance with GAAP, and should not be considered in isolation or as a substitute for analysis of Meridian’s results as reported under GAAP, nor is it necessarily comparable to non-GAAP performance measures that may be presented by other companies. Pre-tax, Pre-provision Reconciliation Three Months Ended Year Ended (Dollars in thousands, except per share data) December 31, 2023 September 30, 2023 December 31, 2023 December 31, 2022 Income before income tax expense $ 728 $ 5,210 $ 16,967 $ 27,920 Provision for credit losses 4,628 82 6,815 2,488 Pre-tax, pre-provision income $ 5,356 $ 5,292 $ 23,782 $ 30,408 Bank $ 5,757 $ 6,399 $ 27,751 $ 31,004 Wealth 267 417 1,240 2,030 Mortgage (668) (1,524) (5,209) (2,626) Pre-tax, pre-provision income $ 5,356 $ 5,292 $ 23,782 $ 30,408

 
239 15 75 111 111 113 186 12 47 0 0 0 234 234 234 186 12 0 112 173 71 22Meridian Corporation (dollars in thousands) December 31, 2023 September 30, 2023 June 30, 2023 March 31, 2023 December 31, 2022 Tangible common equity ratio - Consolidated: Total stockholders' equity (GAAP) $ 158,022 $ 155,114 $ 153,962 $ 153,049 $ 153,280 Less: Goodwill and intangible assets (3,870) (3,921) (3,972) (4,023) (4,074) Tangible common equity (non-GAAP) $ 154,152 $ 151,193 $ 149,990 $ 149,026 $ 149,206 Total assets (GAAP) $ 2,246,193 $ 2,230,971 $ 2,206,877 $ 2,229,783 $ 2,062,228 Less: Goodwill and intangible assets (3,870) (3,921) (3,972) (4,023) (4,074) Tangible assets (non-GAAP) $ 2,242,323 $ 2,227,050 $ 2,202,905 $ 2,225,760 $ 2,058,154 Tangible common equity ratio (non-GAAP) 6.87 % 6.79 % 6.81 % 6.70 % 7.25 % Tangible common equity ratio - Bank: Total stockholders' equity (GAAP) $ 204,132 $ 201,996 $ 192,209 $ 187,954 $ 185,039 Less: Goodwill and intangible assets (3,870) (3,921) (3,972) (4,023) (4,074) Tangible common equity (non-GAAP) $ 200,262 $ 198,075 $ 188,237 $ 183,931 $ 180,965 Total assets (GAAP) $ 2,244,893 $ 2,232,297 $ 2,208,252 $ 2,229,721 $ 2,059,557 Less: Goodwill and intangible assets (3,870) (3,921) (3,972) (4,023) (4,074) Tangible assets (non-GAAP) $ 2,241,023 $ 2,228,376 $ 2,204,280 $ 2,225,698 $ 2,055,483 Tangible common equity ratio (non-GAAP) 8.94 % 8.89 % 8.54 % 8.26 % 8.80 % RECONCILIATION OF NON-GAAP MEASURES

 
v3.23.4
Cover
Jan. 26, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Jan. 26, 2024
Entity Registrant Name Meridian Corp
Entity Incorporation, State or Country Code PA
Entity File Number 000-55983
Entity Tax Identification Number 83-1561918
Entity Address, Address Line One 9 Old Lincoln Highway, Malvern, Pennsylvania
Entity Address, City or Town Malvern
Entity Address, State or Province PA
Entity Address, Postal Zip Code 19355
City Area Code (484) 568-5000Registrant’s telephone number, including area code
Local Phone Number (484) 568-5000Registrant’s telephone number, including area code
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Entity Emerging Growth Company false
Title of 12(b) Security Common Stock, $1 par value
Trading Symbol MRBK
Security Exchange Name NASDAQ
Entity Central Index Key 0001750735
Amendment Flag false
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