EX-99.1 2 q22022earningsrelease_ex991.htm EX-99.1 Document

Exhibit 99.1
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Meridian Corporation Reports Second Quarter 2022 Results

MALVERN, Pa., August 1, 2022 — Meridian Corporation (Nasdaq: MRBK) today reported:
•Net income of $5.9 million and diluted earnings per share of $0.96 for the second quarter ended June 30, 2022 compared to net income of $5.5 million and diluted earnings per share of $0.88 for the first quarter ended March 31, 2022
•Return on average assets for the second quarter of 2022 was 1.31% compared to 1.28% for the first quarter of 2022; return on average equity for the second quarter was 15.03% compared to 13.86% for the prior quarter
•Net interest margin increased to 4.07% in the second quarter of 2022 from 3.89% in the first quarter of 2022
•Second quarter commercial loan growth, excluding Paycheck Protection Program ("PPP") loans, was $73.8 million, or 24% annualized; consumer loans increased by $19.1 million, or 36% annualized
•Non-interest income of $10.4 million in the second quarter of 2022 compared to $13.1 million in the prior quarter
•Non-interest expenses decreased by $1.7 million, to $19.7 million in the second quarter of 2022 from $21.4 million in the prior quarter; efficiency ratio at 70% for the second quarter of 2022 compared to 74% for the prior quarter
•The Company repurchased 97,385 shares of its common stock at an average price of $31.14 per share during the second quarter ended June 30, 2022
•On July 28, 2022, the Board of Directors declared a quarterly cash dividend of $0.20 per common share, payable August 22, 2022 to shareholders of record as of August 15, 2022


20222022202120212021
(Dollars in thousands, except per share data)2nd QTR1st QTR4th QTR3rd QTR2nd QTR
Income:
Net income$5,938 $5,535$7,719$9,438$8,258
Diluted earnings per common share0.96 0.881.241.521.33
Pre-tax, pre-provision income (1)8,248 7,7049,67112,89810,898
Pre-tax, pre-provision income - Bank (1)7,458 8,7786,8298,8967,811
(1) See Non-GAAP reconciliation in the Appendix

Christopher J. Annas, Chairman and CEO commented “Meridian’s second quarter revenue of $30.4 million generated earnings of $5.9 million, or $0.96 per diluted share. The results were very strong despite a break even in the mortgage segment. While we’re not happy with this, it does illuminate the excellent bank returns that sometimes get overshadowed. Exceptional loan growth and a strong margin drove much of the Bank’s success. Loan growth, excluding PPP, was $92.9 million or 25% annualized and all organic. The net interest margin increased to 4.07%, as PPP loans are being replaced by higher yielding commercial loans. The SBA division has consistently delivered loan sale income, and historically has done well in difficult economic times. We expected a decline in mortgage volume with the rate increases, but the lack of homes for sale in the region has made it worse. We continually forecast results in mortgage and make the appropriate adjustments.”

Mr. Annas added, “Despite the economic volatility, we have a strong pipeline of commercial business which should hold through year end. Meridian is the go-to bank for small and medium sized businesses in the Philadelphia metro market, and we will continue to get our opportunities. Our strong credit culture is a safeguard with a possible recession looming, so our scrutiny towards these opportunities will always be our first priority.”



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Select Condensed Financial Information
For the Quarter Ended (Unaudited)
20222022202120212021
(Dollars in thousands, except per share data)2nd QTR1st QTR4th QTR3rd QTR2nd QTR
Income:
Net income - consolidated$5,938 $5,535 $7,719 $9,438 $8,258 
Basic earnings per common share0.99 0.92 1.29 1.56 1.37 
Diluted earnings per common share0.96 0.88 1.24 1.52 1.33 
Net interest income - consolidated17,551 16,035 16,322 16,257 15,412 
At the Quarter Ended (Unaudited)
20222022202120212021
June 30March 31December 31September 30June 30
Balance Sheet:
Total assets$1,853,019 $1,831,589 $1,713,443 $1,762,445 $1,709,010 
Loans, net of fees and costs1,518,893 1,431,906 1,386,457 1,378,670 1,362,750 
Total deposits1,568,014 1,564,851 1,446,413 1,439,047 1,413,280 
Non-interest bearing deposits291,925 291,379 274,528 265,842 261,806 
Stockholders' Equity156,087 157,684 165,360 158,416 152,885 
At the Quarter Ended (Unaudited)
20222022202120212021
June 30March 31December 31September 30June 30
Balance Sheet (Average Balances):
Total assets$1,811,335 $1,752,643 $1,755,263 $1,739,848 $1,723,421 
Total interest earning assets1,736,547 1,680,070 1,696,473 1,691,641 1,678,721 
Loans, net of fees and costs1,465,891 1,397,002 1,449,361 1,351,634 1,345,672 
Total deposits1,567,325 1,504,241 1,468,575 1,409,534 1,385,250 
Non-interest bearing deposits296,521 281,123 287,801 254,843 255,964 
Stockholders' Equity158,420 161,939 159,921 155,580 146,497 
At the Quarter Ended (Unaudited)
20222022202120212021
June 30March 31December 31September 30June 30
Performance Ratios (Annualized):
Return on average assets - consolidated1.31 %1.28 %1.74 %2.15 %1.92 %
Return on average equity - consolidated15.03 %13.86 %19.15 %24.07 %22.61 %






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Income Statement Summary
Second Quarter 2022 Compared to First Quarter 2022
Net income was $5.9 million, or $0.96 per diluted share, for the second quarter of 2022 compared to net income of $5.5 million, or $0.88 per diluted share, for the first quarter of 2022. The $403 thousand increase in net income quarter-over-quarter was driven by continued strong loan portfolio growth, which helped improve net interest income by $1.5 million. Non-interest expense decreased $1.7 million, but was offset by a decrease of $2.7 million in non-interest income.
Interest income increased $2.0 million, or 11.5%, to $20.0 million from $18.0 million, for the second quarter of 2022. Quarter-over-quarter, there was combined average balance growth of $57.4 million on commercial loans and leases, small business loans, and residential real estate loans. In addition, the yield on loans rose 28 basis points, to 4.99% for the second quarter of 2022. This yield increase is partially due to these portfolios realizing the impact of interest rate rises in the market, combined with the positive impact of PPP loan balances being paid off and replaced by higher yielding commercial loans and leases.

Interest expense increased $557 thousand, or 28.9%, to $2.5 million as interest rates rose during the period. The cost of deposits increased 12 basis points over the prior quarter, as rates in interest checking, money market accounts, and time deposits moved up 21, 12, and 13 basis points, respectively.

The net interest margin was 4.07% for the second quarter of 2022 compared to 3.89% for the first quarter of 2022. Excluding the impact from PPP, the net interest margin increased 13 basis points to 3.95% for the second quarter 2022 from 3.82% for the first quarter of 2022. A reconciliation of this non-GAAP measure is included in the Appendix. Overall, net interest income increased $1.5 million, or 9.5%, to $17.6 million from $16.0 million for the first quarter of 2022.

The provision for loan losses was $602 thousand for the second quarter of 2022, compared to a $615 thousand provision for the first quarter of 2022. The second quarter provision was the result of new loan growth as well as covering $695 thousand in charge-offs on small ticket equipment leases, partially offset by decreases in specific reserves on non-performing loans as the underlying credit quality improved.

Total non-interest income for the second quarter of 2022 was $10.4 million, down $2.7 million or 20.6%, from the first quarter of 2022. Non-interest income was primarily down as a result of lower SBA loan income, which decreased $2.1 million. Mortgage banking revenue and wealth management revenue also decreased slightly, down $154 thousand or 2.2%, and $50 thousand, or 3.8%, respectively.

SBA loan income for the second quarter of 2022 was $437 thousand, a decline of $2.1 million, or 82.7%, from the first quarter of 2022. The decline was the result of a lower level of SBA loans sold ($12.8 million in the second quarter of 2022 compared to $25.2 million in loans sold in the first quarter of 2022), as well as lower margins on the sale.

The mortgage segment originated $332.4 million in loans during the second quarter of 2022, an increase of $8.6 million, or 2.6%, from the prior quarter, but the gain on sale margin declined 73 basis points. Refinance activity was down as interest rates continue to rise, representing 15% of the total residential mortgage loans originated for the second quarter of 2022, compared to 36% for the first quarter of 2022. The changes in the fair value of derivative instruments and loans held for sale increased a combined $884 thousand during the second quarter of 2022 compared to the first quarter of 2022, while there was a $1.7 million gain on hedging activity for the second quarter of 2022, compared to a $2.8 million gain for the first quarter of 2022.

Wealth management revenue from our wealth segment decreased $50 thousand, or 3.8%, quarter-over-quarter due to impacts from unfavorable market conditions.

Total non-interest expense for the second quarter of 2022 was $19.7 million, down $1.7 million or 8.1%, from the first quarter of 2022. Total salaries and employee benefits expense was $12.9 million, a net decrease of $2.4 million or 15.5%, compared to the first quarter of 2022. Of this decrease, $1.9 million related to the mortgage segment, which recognizes variable compensation based on loan origination volume, as well as a general reduction in workforce. Salary and employee benefits were down $442 thousand for the bank and wealth segments due to a decline in the value of stock based compensation quarter-over-quarter.

Partially offsetting the decrease in salaries and benefits, advertising expense was up $203 thousand, or 20.6%, and other non-interest expense increased $321 thousand, or 19.3%. Increases in other expense related to employee business and travel expenses, communications and other lesser expenses related to growth.
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Balance Sheet Summary
As of June 30, 2022, total assets were $1.9 billion, an increase of $21.4 million, or 1.2%, from March 31, 2022. This growth in assets was due to loan portfolio growth, partially funded by a reduction in cash and investments of $31.1 million.

Portfolio loans grew $87.0 million, or 6.1%, to $1.5 billion as of June 30, 2022, from $1.4 billion as of March 31, 2022. Portfolio loan growth, excluding PPP loans, was $115.2 million, or 8% quarter-over-quarter. Commercial loans increased $16.9 million, or 7.7%, commercial real estate loans increased $17.5 million, or 3.2%, construction loans increased $13.0 million, or 7.9%, residential real estate loans held in portfolio increased $35.4 million, or 45.0%, and lease financings increased $15.1 million, or 14.1% from March 31, 2022. Partially offsetting the growth in portfolio loans was a decrease of $66.8 million, or 75.7%, in PPP loan balances as they continue to be forgiven by the SBA.

Deposits were $1.6 billion as of June 30, 2022, up $3.2 million, or 0.2%, from March 31, 2022. Non-interest bearing deposits increased $546 thousand, or 0.2%, from March 31, 2022. Interest-bearing checking accounts decreased $47.0 million, or 18.6%, while money market accounts/savings accounts combined increased $40.8 million, or 5.9%, since March 31, 2022. Certificates of deposits increased $8.8 million, or 2.7%, from March 31, 2022, as some wholesale deposits shifted from interest-bearing checking due to more favorable interest rates.

Consolidated stockholders’ equity of the Corporation was $156.1 million, or 8.4% of total assets as of June 30, 2022, as compared to $157.7 million, or 8.6% of total assets as of March 31, 2022. The change in stockholders’ equity is the result of net income of $5.9 million for the quarter, offset by dividends of $1.2 million paid during the second quarter, as well as $3.0 million in treasury share purchases, and a $3.5 million decline in accumulated other comprehensive income from the investment security portfolio due to changes in interest rates over this period.

As of June 30, 2022, the Tier 1 leverage ratio was 8.87% for the Corporation and 10.86% for the Bank, the Tier 1 risk-based capital and common equity ratios were 9.79% for the Corporation and 11.98% for the Bank, and total risk-based capital was 13.50% for the Corporation and 13.33% for the Bank. Based on these capital ratio levels, we remain above the Community Bank Leverage Ratio ("CBLR") requirement of 8%. Quarter-end numbers show a tangible common equity to tangible assets ratio (a non-GAAP measure) of 8.22% for the Corporation and 10.18% for the Bank. A reconciliation of this non-GAAP measure is included in the Appendix. Tangible book value per share was $25.16 as of June 30, 2022, compared with $25.04 as of March 31, 2022.

Asset Quality Summary
Meridian credit culture is strong and asset quality remains a primary focus of management. Total non-performing loans were $23.0 million as of June 30, 2022, relatively flat over the prior period. The ratio of non-performing assets to total assets declined to 1.24% as of June 30, 2022, from 1.25% as of March 31, 2022. There was no other real estate property included in non-performing assets for either period.

Meridian realized net charge-offs of 0.03% of total average loans for the quarter ended June 30, 2022, down from the quarter ended March 31, 2022 level of 0.04%. Net charge-offs for the quarter ended June 30, 2022 were $622 thousand, comprised of $695 thousand in charge-offs, with $73 thousand in recoveries for the quarter. Nearly all of the charge-offs for the quarter ended June 30, 2022 were from small ticket equipment leases. The ratio of allowance for loan losses to total loans held for investment, excluding loans at fair value and PPP loans (a non-GAAP measure, see reconciliation in the Appendix), was 1.27% as of June 30, 2022 compared to 1.38% as of March 31, 2022. As of June 30, 2022 there were specific reserves of $2.8 million against non-performing loans, down from $4.2 million as of March 31, 2022 due to improvement in the underlying credit quality for certain loans.
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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 more than 20 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, the impact of the COVID-19 pandemic and government responses thereto; on the U.S. economy, including the markets in which we operate; actions that we and our customers take in response to these factors and the effects such actions have on our operations, products, services and customer relationships; and the risk that the Small Business Administration may not fund some or all Paycheck Protection Program (PPP) loan guaranties; increased competitive pressures; changes in the interest rate environment; 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, 2021 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.

FINANCIAL TABLES FOLLOW
















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APPENDIX - FINANCIAL RATIOS
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Quarterly
20222022202120212021
(Dollars in thousands, except per share data)2nd QTR1st QTR4th QTR3rd QTR2nd QTR
Earnings and Per Share Data
Net income$5,938$5,535$7,719$9,438$8,258
Basic earnings per common share0.990.921.291.561.37
Diluted earnings per common share0.960.881.241.521.33
Common shares outstanding6,0376,1296,1086,1086,173
Performance Ratios
Return on average assets - consolidated1.31%1.28 %1.74 %2.15 %1.92 %
Return on average equity - consolidated15.03%13.86 %19.15 %24.07 %22.61 %
Net interest margin (TEY)4.07%3.89 %3.83 %3.83 %3.70 %
Net interest margin (TEY, excluding PPP loans and borrowings) (1)3.95%3.82 %3.76 %3.73 %3.75 %
Yield on earning assets (TEY)4.65%4.35 %4.28 %4.31 %4.20 %
Yield on earning assets (TEY, excluding PPP loans) (1)4.54%4.31 %4.23 %4.24 %4.30 %
Cost of funds0.61%0.50 %0.49 %0.52 %0.54 %
Efficiency ratio - consolidated70%74 %71 %66 %71 %
Asset Quality Ratios
Net charge-offs (recoveries) to average loans0.03%0.04 %—%—%0.01%
Non-performing loans/Total loans1.46%1.51%1.57%0.61%0.55%
Non-performing assets/Total assets1.24%1.25%1.34%0.52%0.48%
Allowance for loan losses/Total loans held for investment1.24%1.31%1.35%1.38%1.35%
Allowance for loan losses/Total loans held for investment (excluding loans at fair value and PPP loans) (1)1.27%1.38%1.46%1.52%1.58%
Allowance for loan losses/Non-performing loans81.82%82.41%81.47%206.42%224.63%
Capital Ratios
Book value per common share$25.85$25.73$27.07$25.94$24.77
Tangible book value per common share$25.16$25.04$26.37$25.23$24.06
Total equity/Total assets8.42%8.61%9.65%8.99%8.95%
Tangible common equity/Tangible assets - Corporation (1)8.22%8.40%9.42%8.76%8.71%
Tangible common equity/Tangible assets - Bank (1)10.18%10.40%11.54%10.90%10.92%
Tier 1 leverage ratio - Corporation8.87%9.10%9.39%9.28%8.97%
Tier 1 leverage ratio - Bank10.86%11.20%11.51%11.55%11.28%
Common tier 1 risk-based capital ratio - Corporation9.79%10.09%10.83%10.64%10.16%
Common tier 1 risk-based capital ratio - Bank11.98%12.41%13.27%13.25%12.80%
Tier 1 risk-based capital ratio - Corporation9.79%10.09%10.83%10.64%10.16%
Tier 1 risk-based capital ratio - Bank11.98%12.41%13.27%13.25%12.80%
Total risk-based capital ratio - Corporation13.50%13.91%14.81%14.72%14.23%
Total risk-based capital ratio - Bank13.33%13.76%14.63%14.62%14.18%
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(1)Non-GAAP measure. See reconciliation in the Appendix.
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Statements of Income (Unaudited)Statements of Income (Unaudited)
Three Months EndedSix Months Ended
(Dollars in thousands, except per share data)June 30, 2022June 30, 2021June 30, 2022June 30, 2021
Interest Income
Interest and fees on loans$19,120 $16,839 $36,339 $33,662 
Investments and cash917 678 1,662 1,307 
Total interest income20,037 17,517 38,001 34,969 
Interest Expense
Deposits1,818 1,368 3,107 2,934 
Borrowings668 737 1,308 1,502 
Total interest expense2,486 2,105 4,415 4,436 
Net interest income17,551 15,412 33,586 30,533 
Provision for loan losses602 96 1,217 695 
Net interest income after provision for loan losses16,949 15,316 32,369 29,838 
Non-Interest Income
Mortgage banking income6,942 19,467 14,038 43,567 
Wealth management income1,254 1,163 2,558 2,299 
SBA income437 1,490 2,957 2,735 
Earnings on investment in life insurance137 65 275 131 
Net change in fair value of derivative instruments(674)(2,148)(840)(3,092)
Net change in fair value of loans held for sale268 1,235 (856)(2,632)
Net change in fair value of loans held for investment(835)41 (1,613)(61)
Net gain (loss) on hedging activity1,715 (674)4,542 3,587 
Net gain on sale of investment securities available-for-sale— — — 48 
Service charges31 33 58 64 
Other1,128 1,060 2,386 2,134 
Total non-interest income10,403 21,732 23,505 48,780 
Non-Interest Expenses
Salaries and employee benefits12,926 20,213 28,224 42,352 
Occupancy and equipment1,176 1,175 2,428 2,326 
Professional fees913 816 1,761 1,756 
Advertising and promotion1,189 921 2,175 1,707 
Data processing580 520 1,059 1,136 
Information technology728 464 1,438 889 
Pennsylvania bank shares tax212 163 411 326 
Other1,982 1,974 3,643 4,018 
Total non-interest expenses19,706 26,246 41,139 54,510 
Income before income taxes7,646 10,802 14,735 24,108 
Income tax expense1,708 2,544 3,262 5,680 
Net Income$5,938 $8,258 $11,473 $18,428 
Weighted-average basic shares outstanding5,999 6,032 6,011 6,018 
Basic earnings per common share$0.99 $1.37 $1.91 $3.06 
Adjusted weighted-average diluted shares outstanding6,199 6,203 6,229 6,177 
Diluted earnings per common share$0.96 $1.33 $1.84 $2.98 
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Statement of Condition (Unaudited)
(Dollars in thousands)June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021
Assets
Cash & cash equivalents$37,093 $68,888 $23,480 $63,121 $26,902 
Investment securities168,552 167,870 168,028 153,566 149,366 
Mortgage loans held for sale58,938 81,258 80,882 117,996 132,348 
Loans, net of fees and costs1,518,893 1,431,906 1,386,457 1,378,670 1,362,750 
Allowance for loan losses(18,805)(18,826)(18,758)(18,976)(18,361)
Bank premises and equipment, net12,185 11,883 11,806 8,242 8,160 
Bank owned life insurance22,778 22,641 22,503 22,362 12,269 
Servicing assets12,860 13,396 12,765 11,932 10,327 
Goodwill and intangible assets4,176 4,227 4,278 4,329 4,380 
Other assets36,349 48,346 22,002 21,203 20,869 
Total Assets$1,853,019 $1,831,589 $1,713,443 $1,762,445 $1,709,010 
Liabilities & Stockholders’ Equity
Liabilities
Non-interest bearing deposits$291,925 $291,379 $274,528 $265,842 $261,806 
Interest bearing deposits
Interest checking205,298 252,298 268,248 279,659 257,939 
Money market / savings accounts728,886 688,117 697,628 670,101 631,604 
Certificates of deposit341,905 333,057 206,009 223,445 261,931 
Total interest bearing deposits1,276,089 1,273,472 1,171,885 1,173,205 1,151,474 
Total deposits1,568,014 1,564,851 1,446,413 1,439,047 1,413,280 
Borrowings59,136 36,136 41,344 100,683 82,156 
Subordinated debt40,567 40,538 40,508 40,760 40,730 
Other liabilities29,215 32,380 19,818 23,539 19,959 
Total Liabilities1,696,932 1,673,905 1,548,083 1,604,029 1,556,125 
Stockholders' Equity156,087 157,684 165,360 158,416 152,885 
Total Liabilities & Stockholders’ Equity$1,853,019 $1,831,589 $1,713,443 $1,762,445 $1,709,010 
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Condensed Statements of Income (Unaudited)
Three Months Ended
(Dollars in thousands, except per share data)June 30, 2022March 31, 2022December 31, 2021September 30, 2021June 30, 2021
Interest income$20,037 $17,964 $18,248 $18,306 $17,517 
Interest expense2,486 1,929 1,926 2,049 2,105 
Net interest income17,551 16,035 16,322 16,257 15,412 
Provision (credit) for loan losses602 615 (222)597 96 
Non-interest income10,403 13,102 17,086 22,122 21,732 
Non-interest expense19,706 21,433 23,737 25,481 26,246 
Income before income tax expense7,646 7,089 9,893 12,301 10,802 
Income tax expense1,708 1,554 2,174 2,863 2,544 
Net Income$5,938 $5,535 $7,719 $9,438 $8,258 
Weighted-average basic shares outstanding5,999 6,023 5,978 6,045 6,032 
Basic earnings per common share$0.99 $0.92 $1.29 $1.56 $1.37 
Adjusted weighted-average diluted shares outstanding6,199 6,262 6,210 6,231 6,203 
Diluted earnings per common share$0.96 $0.88 $1.24 $1.52 $1.33 


Segment Information
Three Months Ended June 30, 2022Three Months Ended June 30, 2021
(Dollars in thousands)    Bank    Wealth    Mortgage    Total    Bank    Wealth    Mortgage    Total
Net interest income$16,92331731117,551$14,8242 58615,412
Provision for loan losses602——60296——96
Net interest income after provision16,32131731116,94914,7282 58615,316
Non-interest income1,1591,2547,99010,4032,4021,16318,16721,732
Non-interest expense10,6248228,26019,7069,41578916,04226,246
Income before income taxes$6,856749417,646$7,7153762,71110,802
Efficiency ratio59 %52 %100 %70 %55 %68 %86 %71 %
Segment Information
Six Months Ended June 30, 2022Six Months Ended June 30, 2021
(Dollars in thousands)    Bank    Wealth    Mortgage    Total    Bank    Wealth    Mortgage    Total
Net interest income$32,533 411 642 33,586 $29,324 (11)1,220 30,533 
Provision for loan losses1,217 — — 1,217 695 — — 695 
Net interest income after provision31,316 411 642 32,369 28,629 (11)1,220 29,838 
Non-interest income4,535 2,558 16,412 23,505 4,724 2,299 41,757 48,780 
Non-interest expense20,833 1,700 18,606 41,139 18,348 1,684 34,478 54,510 
Income before income taxes$15,018 1,269 (1,552)14,735 $15,005 604 8,499 24,108 
Efficiency ratio56 %57 %109 %72 %54 %74 %80 %69 %
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Reconciliation of Non-GAAP Financial Measures
Meridian believes that non-GAAP measures are meaningful because they reflect adjustments commonly made by management, investors, regulators and analysts. This non-GAAP disclosure has 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 (Unaudited)
20222022202120212021
(Dollars in thousands)2nd QTR1st QTR4th QTR3rd QTR2nd QTR
Income before income tax expense$7,646$7,089$9,893$12,301$10,802
Provision for loan losses602615(222)59796
Pre-tax, pre-provision income$8,248$7,704$9,671$12,898$10,898
Pre-tax, Pre-provision Income by Segment (Unaudited)
20222022202120212021
(Dollars in thousands)2nd QTR1st QTR4th QTR3rd QTR2nd QTR
Bank$7,458 $8,778 $6,829 $8,896 $7,811 
Wealth749 519 286 432 376 
Mortgage41 (1,593)2,556 3,570 2,711 
Pre-tax, pre-provision income$8,248 $7,704 $9,671 $12,898 $10,898 

Reconciliation of PPP / PPPLF Impacted Yields (Unaudited)
20222022202120212021
2nd QTR1st QTR4th QTR3rd QTR2nd QTR
Net interest margin (TEY)4.07 %3.89 %3.83 %3.83 %3.70 %
Impact of PPP loans and PPPLF borrowings(0.12)%(0.07)%(0.07)%(0.10)%0.05 %
Net interest margin (TEY, excluding PPP loans and PPPLF borrowings)3.95 %3.82 %3.76 %3.73 %3.75 %
Yield on earning assets (TEY)4.65 %4.35 %4.28 %4.31 %4.20 %
Impact of PPP loans(0.11)%(0.04)%(0.05)%(0.07)%0.10 %
Yield on earning assets (TEY, excluding PPP loans)4.54 %4.31 %4.23 %4.24 %4.30 %





Reconciliation of Allowance for Loan Losses / Total loans (Unaudited)
20222022202120212021
June 30March 31December 31September 30June 30
Allowance for loan losses / Total loans held for investment1.24 %1.31 %1.35 %1.38 %1.35 %
Less: Impact of loans held for investment - fair valued0.01 %0.02 %0.02 %0.01 %0.01 %
Less: Impact of PPP loans0.02 %0.05 %0.09 %0.13 %0.22 %
Allowance for loan losses / Total loans held for investment (excl. loans at fair value and PPP loans)1.27 %1.38 %1.46 %1.52 %1.58 %


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Tangible Common Equity Ratio Reconciliation - Corporation  (Unaudited)
20222022202120212021
(Dollars in thousands)June 30March 31December 31September 30June 30
Total stockholders' equity$156,087 $157,684 $165,360 $158,416 $152,885 
Less:
Goodwill and intangible assets(4,176)(4,227)(4,278)(4,329)(4,380)
Tangible common equity$151,911 $153,457 $161,082 $154,087 $148,505 
Total assets$1,853,019 $1,831,589 $1,713,443 $1,762,445 $1,709,010 
Less:
Goodwill and intangible assets(4,176)(4,227)(4,278)(4,329)(4,380)
Tangible assets$1,848,843 $1,827,362 $1,709,165 $1,758,116 $1,704,629 
Tangible common equity ratio - Corporation8.22 %8.40 %9.42 %8.76 %8.71 %

Tangible Common Equity Ratio Reconciliation - Bank  (Unaudited)
20222022202120212021
(Dollars in thousands)June 30March 31December 31September 30June 30
Total stockholders' equity$192,212 $194,347 $201,486 $196,009 $190,477 
Less:
Goodwill and intangible assets(4,176)(4,227)(4,278)(4,329)(4,380)
Tangible common equity$188,036 $190,120 $197,208 $191,680 $186,097 
Total assets$1,852,998 $1,831,461 $1,713,318 $1,762,415 $1,709,006 
Less:
Goodwill and intangible assets(4,176)(4,227)(4,278)(4,329)(4,380)
Tangible assets$1,848,822 $1,827,234 $1,709,040 $1,758,086 $1,704,626 
Tangible common equity ratio - Bank10.17 %10.40 %11.54 %10.90 %10.92 %


Tangible Book Value Reconciliation (Unaudited)
20222022202120212021
June 30March 31December 31September 30June 30
Book value per common share$25.85 $25.73 $27.07 $25.94 $24.77 
Less: Impact of goodwill and intangible assets0.69 0.69 0.70 0.71 0.71 
Tangible book value per common share$25.16 $25.04 $26.37 $25.23 $24.06 



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