Meridian Corp

Previous wording

The following items highlight the Corporation’s changes in its financial condition as of June 30, 2024 compared to December 31, 2023 and the results of operations for the three and six months ended June 30, 2024 compared to the same period in 2023. More detailed information related to these highlights can be found in the sections that follow.

Current wording

The following items highlight the Corporation’s changes in its financial condition as of September 30, 2024 compared to December 31, 2023 and the results of operations for the three and nine months ended September 30, 2024 compared to the same periods in 2023. More detailed information related to these highlights can be found in the sections that follow.

Previous wording

•Total assets increased $105.4 million, or 4.7%, to $2.4 billion as of June 30, 2024.

Current wording

•Total assets increased $141.5 million, or 6.3%, to $2.4 billion as of September 30, 2024.

Previous wording

•Mortgage loans held for sale increased $29.5 million, or 118.7%, to $54.3 million as of June 30, 2024.

Current wording

•Mortgage loans held for sale increased $21.8 million, or 87.8%, to $46.6 million as of September 30, 2024.

Previous wording

•Non-interest bearing deposits decreased $15.2 million, or 6.4%, to $224.0 million as of June 30, 2024.

Current wording

•Non-interest bearing deposits decreased $2.1 million, or 0.9%, to $237.2 million as of September 30, 2024.

Previous wording

•The Corporation returned $2.8 million of capital to Meridian shareholders during the six months ended June 30, 2024 through a $0.125 dividend per quarter.

Current wording

•The Corporation returned $4.2 million of capital to Meridian shareholders during the nine months ended September 30, 2024 through a $0.125 dividend per share per quarter, totaling a $0.375 year to date dividend per share.

Previous wording

•The return on average assets and return on average equity were 0.58% and 8.25%, respectively, for the second quarter 2024, compared to 0.86% and 12.08%, respectively, for the second quarter 2023.

Current wording

•The return on average assets and return on average equity were 0.80% and 11.41%, respectively, for the third quarter 2024, compared to 0.73% and 10.17%, respectively, for the third quarter 2023.

Previous wording

•Net interest margin decreased to 3.06% from 3.33% due to the impact of deposit and borrowing costs outpacing the repricing of interest earnings assets, mainly loans.

Current wording

•Net interest margin decreased to 3.20% from 3.29% due to the impact of deposit and borrowing costs outpacing the repricing of interest earnings assets, mainly loans.

Previous wording

•The overall provision for credit losses increased $2.0 million when comparing the second quarter 2024 to the second quarter 2023. The provision increase was largely due to provisioning for loan growth and increased non-performing loans.

Current wording

•The overall provision for credit losses increased $2.2 million when comparing the third quarter 2024 to the third quarter 2023. The provision increase was largely due to the impact of charge-offs, an increase in non-performing loans, combined with providing for loan growth over this period.

Previous wording

•Non-interest income increased $120 thousand, or 1.3%, to $9.2 million driven by a $370 thousand increase in mortgage banking income, $209 thousand of an increase in wealth management fee income, and an increase of $124 thousand in other income, partially offset by a $982 thousand decrease in SBA loan income.

Current wording

•Non-interest income increased $2.7 million, or 33.9%, to $10.8 million driven by a $1.7 million increase in mortgage banking income, an overall $1.1 million positive impact of fair value changes related to mortgage banking activities, $189 thousand of an increase in wealth management fee income, and an increase of $263 thousand in other income, partially offset by a $438 thousand decrease in SBA loan income.

Previous wording

Six Month Results of Operations - June 30, 2024 Compared to the Same Period in 2023

Current wording

Nine Month Results of Operations - September 30, 2024 Compared to the Same Period in 2023

Previous wording

•Net income was $6.0 million, or $0.54 per diluted share, down $2.7 million, or 30.7%, driven by an increase in interest expense and the provision for credit losses, partially offset by increases in interest income and non-interest income.

Current wording

•Net income was $10.7 million, or $0.96 per diluted share, down $1.9 million, or 15.2%, driven by an increase in interest expense and the provision for credit losses, partially offset by increases in interest income and non-interest income.

Previous wording

•The return on average assets and return on average equity were 0.53% and 7.50%, respectively, for the six months ended June 30, 2024, compared to 0.82% and 11.37%, respectively, for the six months ended June 30, 2023

Current wording

•The return on average assets and return on average equity were 0.62% and 8.84%, respectively, for the nine months ended September 30, 2024, compared to 0.79% and 10.96%, respectively, for the nine months ended September 30, 2023

Previous wording

•Net interest margin decreased to 3.08% from 3.46% due to the impact of deposit and borrowing costs outpacing the repricing of interest earnings assets, mainly loans.

Current wording

•Net interest margin decreased to 3.12% from 3.40% due to the impact of deposit and borrowing costs outpacing the repricing of interest earnings assets, mainly loans.

Previous wording

•The overall provision for credit losses increased $3.4 million when comparing the six months ended June 30, 2024 to June 30, 2023. The provision increase was largely due to provisioning for loan growth and higher level of non-performing loans.

Current wording

•The overall provision for credit losses increased $5.6 million when comparing the nine months ended September 30, 2024 to September 30, 2023. As noted above in the quarterly analysis, the provision increase was largely due to the impact of charge-offs, an increase in non-performing loans, combined with providing for loan growth over this period.

Previous wording

•Non-interest income increased $1.5 million, or 9.3%, to $17.2 million driven by a $732 thousand increase in mortgage banking income, a $330 thousand of an increase in wealth management fee income, and increase of $883 thousand in other income, partially offset by a $709 thousand decrease in SBA loan income.

Current wording

•Non-interest income increased $4.2 million, or 17.7%, to $28.1 million driven by a $2.4 million increase in mortgage banking income, an overall $1.3 million positive impact of fair value changes related to mortgage banking activities, a $519 thousand increase in wealth management fee income, and an increase of $1.2 million in other income, partially offset by a $1.1 million decrease in SBA loan income.

Previous wording

•Non-interest expense decreased $212 thousand, or 0.6%, to $37.2 million due to a decrease of $1.2 million in salaries and employee benefits and a $215 thousand decrease in advertising expense, partially offset by an increase of $444 thousand in other expenses and an increase of $700 thousand in professional fees.

Current wording

•Non-interest expense increased $316 thousand, or 0.6%, to $57.7 million due to an increase of $703 thousand in professional fees, an increase of $835 thousand in other expense, partially offset by a decrease of $794 thousand in salaries and employee benefits and, a $345 thousand decrease in advertising and promotions expense.

Previous wording

Net interest income is an integral source of the Corporation’s revenue. The table below present a summary for the three and six months ended June 30, 2024 and 2023, of the Corporation’s average balances and yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities. The net interest margin is the net interest income as a percentage of average interest-earning assets. The net interest spread is the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. The difference between the net interest margin and the net interest spread is the result of net free funding sources such as non-interest bearing deposits and stockholders’ equity.

Current wording

Net interest income is an integral source of the Corporation’s revenue. The tables below present a summary for the three and nine months ended September 30, 2024 and 2023, of the Corporation’s average balances and yields earned on its interest-earning assets and the rates paid on its interest-bearing liabilities. The net interest margin is the net interest income as a percentage of average interest-earning assets. The net interest spread is the difference between the weighted average yield on interest-earning assets and the weighted average cost of interest-bearing liabilities. The difference between the net interest margin and the net interest spread is the result of net free funding sources such as non-interest bearing deposits and stockholders’ equity.

Previous wording

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 three and six months ended June 30, 2024 as compared to the same periods in 2023, allocated by rate and volume. Changes in interest income and/or expense attributable to both rate and volume have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category.

Current wording

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 three and nine months ended September 30, 2024 as compared to the same periods in 2023, allocated by rate and volume. Changes in interest income and/or expense attributable to both rate and volume have been allocated proportionately based on the relationship of the absolute dollar amount of the change in each category.

Previous wording

For the six months ended June 30, 2024 as compared to the same period in 2023, tax-equivalent interest income increased $10.9 million as favorable rate and volume changes contributed $5.4 million, and $5.5 million, respectively, to interest income. The favorable change in rates led to increased yields on loans held for sale (up 368 basis points) and loans held for investment (up 50 basis points) that favorably impact interest income by $5.0 million, overall. The loans held for investment average balances increased $142.8 million, leading to a favorable volume impact on interest income of $5.0 million, while the increase in loans held for sale average balances of $82 thousand had an small but favorable impact to interest income of $188 thousand. Growth in the loans held for investment portfolio was led by average balance increases in commercial real estate ($160.3 million), residential real estate ($23.5 million), home equity loans ($16.0 million), and commercial loans ($14.6 million).

Current wording

For the three months ended September 30, 2024 as compared to the same period in 2023, tax-equivalent interest income increased $4.9 million as favorable rate and volume changes contributed $1.8 million, and $3.1 million, respectively, to interest income. The favorable change in rates led to increased yields on taxable investment securities (up 68 basis points) and loans held for investment (up 35 basis points) that favorably impacted interest income by $1.6 million, overall. The loans held for investment average balances increased $120.9 million, leading to a favorable volume impact on interest income of $2.2 million, while the increase in loans held for sale average balances of $19.5 million had an small but favorable impact to interest income of $316 thousand. Growth in the loans held for investment portfolio was led by average balance increases in commercial real estate ($138.6 million), commercial loans ($40.8 million), residential real estate ($5.0 million), and home equity loans ($14.3 million).

Previous wording

On the funding side, overall interest expense increased $4.9 million, largely driven by the continuing impact that the Fed's rate hikes in prior periods have had on the cost of deposits and borrowings. The cost of deposits were up across the board, leading to a $5.0 million increase to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits increased 25 basis points, 92 basis points and 74 basis points, respectively, while the cost of borrowings decreased by 30 basis points. Money market/savings accounts were the largest drivers of the interest expense increase due to volume as average balances on such accounts increased $133.5 million, while time deposit average balances increased $119.2 million, and the average balances on interest-bearing demand deposits decreased $70.6 million, while borrowings decreased $12.3 million on average.

Current wording

On the funding side, overall interest expense increased $3.8 million, largely driven by the continued impact that the Fed's prior period rate hikes have had on the cost of deposits and borrowings, while Fed's rate decrease announced late in the third quarter has not yet taken full effect. The cost of deposits was up across the board, leading to a $3.8 million increase to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits increased 51, 44, and 39 basis points, respectively, while the cost of borrowings did not change. Money market/savings accounts were the largest drivers of the interest expense increase due to volume as average balances on such accounts increased $81.3 million, while time deposit average balances increased $132.5 million, and the average balances on interest-bearing demand deposits decreased $28.6 million, while borrowings decreased $7.8 million on average.

Previous wording

Overall, the $1.3 million decrease in net interest income over this period was driven by rate changes as the cost of interest bearing liabilities outpaced the increase in the yield on interest earning assets.

Current wording

Overall, the $1.0 million increase in net interest income over this period was attributable largely to volume changes as favorable rate changes in interest-earning assets were nearly offset by rate changes on interest-bearing liabilities.

Previous wording

For the three months ended June 30, 2024 as compared to the same period in 2023, tax-equivalent interest income increased $4.6 million as favorable rate and volume changes contributed $2.1 million, and $2.5 million, respectively, to interest income. The favorable change in rates led to increased yields on loans held for sale (up 57 basis points) and loans held for investment (up 41 basis points) that favorably impact interest income by $1.9 million, overall. The loans held for investment average balances increased $125.0 million, leading to a favorable volume impact on interest income of $2.2 million, while the increase in loans held for sale average balances of $7.8 million had an small but favorable impact to interest income of $125 thousand. Growth in the loans held for investment portfolio was led by average balance increases in commercial real estate ($142.0 million), commercial loans ($20.5 million), residential real estate ($17.4 million), and home equity loans ($16.7 million).

Current wording

For the nine months ended September 30, 2024 as compared to the same period in 2023, tax-equivalent interest income increased $15.8 million as favorable rate and volume changes contributed $7.2 million, and $8.6 million, respectively, to interest income. The favorable change in rates led to increased yields on loans held for sale (up 38 basis points) and loans held for investment (up 46 basis points) that favorably impact interest income by $6.6 million, overall. The loans held for investment average balances increased $135.4 million, leading to a favorable volume impact on interest income of $7.2 million, while the increase in loans held for sale average balances of $10.5 million had a favorable impact to interest income of $508 thousand. Growth in the loans held for investment portfolio was led by average balance increases in commercial real estate ($153.0 million), commercial loans ($23.4 million), residential real estate ($17.3 million), and home equity loans ($15.4 million).

Previous wording

On the funding side, overall interest expense increased $12.2 million, largely driven by the continuing impact that the Fed's rate hikes have had on the cost of deposits and borrowings. The cost of deposits were up across the board, leading to a $10.9 million increase to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits increased 49 basis points, 111 basis points and 99 basis points, respectively, while the cost of borrowings decreased by 20 basis points. Money market/savings accounts were the largest drivers of the interest expense increase due to volume as average balances on such accounts increased $128.9 million, while time deposit average balances increased $107.1 million, and the average balances on interest-bearing demand deposits decreased $81.7 million, while borrowings increased $42.1 million on average.

Current wording

On the funding side, overall interest expense increased $16.1 million. The cost of deposits were up across the board, leading to a $14.7 million increase to interest expense. The cost of interest-bearing demand deposits, money market and savings accounts and time deposits increased 51 basis points, 86 basis points and 78 basis points, respectively, while the cost of borrowings decreased by 11 basis points. Money market/savings accounts were the largest drivers of the interest expense increase due to volume as average balances on such accounts increased $112.8 million, while time deposit average balances increased $115.6 million, and the average balances on interest-bearing demand deposits decreased $63.8 million, while borrowings increased $25.3 million on average.

Previous wording

Overall, the $248 thousand decrease in net interest income over this period was driven by rate changes as the cost of interest bearing liabilities outpaced the increase in the yield on interest earning assets.

Current wording

Overall, the $297 thousand decrease in net interest income over this period was driven by rate changes as the cost of interest bearing liabilities outpaced the increase in the yield on interest earning assets.

Previous wording

The overall provision for credit losses increased $2.0 million on a net basis for the three months ended June 30, 2024. The provision on funded loans increased $1.9 million over the three month comparable period in 2023 driven by provisioning for loan growth and non-performing loans, as well as an increase in specific reserves, mainly on small business loans and existing non-accrual loans. The provision on unfunded loan commitments increased over this period due to an increase in the baseline loss rate for certain portfolios.

Current wording

The total provision for credit losses increased $2.2 million on a net basis for the three months ended September 30, 2024. The provision on funded loans increased $1.6 million over the three month comparable period in 2023 driven by provisioning for loan growth and charge-offs, as well as an increase in specific reserves, mainly on small business loans and existing non-accrual loans. The provision on unfunded loan commitments increased over this period due to an increase in unfunded balances and the baseline loss rate for certain portfolios.

Previous wording

The overall provision for credit losses increased $3.4 million on a net basis for the six months ended June 30, 2024. The provision on funded loans increased $3.9 million over the six month comparable period in 2023 driven by an increase in specific reserves, mainly on small business loans and existing non-accrual loans, combined with provisioning for loan growth and charge-offs.

Current wording

The total provision for credit losses increased $5.6 million on a net basis for the nine months ended September 30, 2024. The provision on funded loans increased $5.5 million over the nine month comparable period in 2023 driven by an increase in specific reserves, mainly on small business loans and existing non-accrual loans, combined with provisioning for loan growth and charge-offs.

Previous wording

Total non-interest income increased $120 thousand due largely to improved income from our mortgage segment, despite the continued impact of the higher rate environment and a lack of housing inventory. Mortgage loan originations increased $34.0 million to $220.5 million when comparing the quarter ended June 30, 2024 to the quarter ended June 30, 2023. SBA loan income decreased $982 thousand over this period as the value of SBA loans sold for the quarter-ended June 30, 2024 was $15.7 million, or 56.4%, lower than the quarter-ended June 30, 2023, while the gross margin on sale was 8.8% for the quarter-ended June 30, 2024 compared to 7.0% for the quarter-ended June 30, 2023.

Current wording

Total non-interest income increased $2.7 million due largely to improved income from our mortgage segment, despite the continued impact of the higher rate environment and a lack of housing inventory. Mortgage loan originations increased $66.0 million to $238.8 million when comparing the quarter ended September 30, 2024 to the quarter ended September 30, 2023. SBA loan income decreased $438 thousand over this period as the value of SBA loans sold for the quarter-ended September 30, 2024 was $14.3 million, or 54.6%, lower than the quarter-ended September 30, 2023, while the gross margin on sale was 7.9% for the quarter-ended September 30, 2024 compared to 6.2% for the quarter-ended September 30, 2023.

Previous wording

The net change in the fair value of loans held-for-investment improved to a loss of $24 thousand for the quarter ended June 30, 2024, compared to a loss of $219 thousand for the comparable prior year quarter, due to the impact of the changing interest rate environment and the impact this has had on loans in portfolio that are held at fair value. Other non-interest income increased due to an increase in FHLB stock income, increases in broker fees and other mortgage segment related income, partially offset by a decline in swap fee income as no new swaps were entered into in the current quarter.

Current wording

The net change in the fair value of loans held-for-investment improved to a gain of $965 thousand for the quarter ended September 30, 2024, compared to a loss of $570 thousand for the comparable prior year quarter, due to the impact of the changing interest rate environment and the impact this has had on loans in portfolio that are held at fair value. Other non-interest income increased due to an increase in FHLB stock income, increases in broker fees and other mortgage segment related income, as well as business credit card fee income.

Previous wording

Total non-interest income increased $1.5 million due largely to improved income from our mortgage segment, despite the continued impact of the higher rate environment and a lack of housing inventory. Mortgage loan originations increased $50.0 million to $360.2 million when comparing the six months ended June 30, 2024 to the six months ended June 30, 2023. SBA loan income decreased $709 thousand over this period as the value of SBA loans sold for the six months ended June 30, 2024 was $11.1 million, or 28.6%, lower than for the six months June 30, 2023, while the gross margin on sale was 8.4% for the six months ended June 30, 2024 compared to 7.2% for the six months ended June 30, 2023.

Current wording

Total non-interest income increased $4.2 million due largely to improved income from our mortgage segment, despite the continued impact of the higher rate environment and a lack of housing inventory. Mortgage loan originations increased $112.0 million to $594.5 million when comparing the nine months ended September 30, 2024 to the nine months ended September 30, 2023. SBA loan income decreased $1.1 million over this period as the value of SBA loans sold for the nine months ended September 30, 2024 was $25 million, or 39.1%, lower than for the nine months September 30, 2023, while the gross margin on sale was 8.2% for the nine months ended September 30, 2024 compared to 6.8% for the nine months ended September 30, 2023.

Previous wording

The net changes in the fair value of derivative instruments and loans held-for-sale loans increased by $164 thousand and $169 thousand, respectively, period over period due due to the increase in volume and the impact of the changing interest rate environment. Other non-interest income in several areas increased including FHLB stock income, broker fees and other mortgage segment related income, as well as business credit card fee income, and other account related fees such as wire transfer fees and ATM fees.

Current wording

The net changes in the fair value of loans held-for-sale increased by $226 thousand, period over period due to the increase in volume and the impact of the changing interest rate environment. Other non-interest income in several areas increased including FHLB stock income, broker fees and other mortgage segment related income, as well as business credit card fee income, and other account related fees such as wire transfer fees and ATM fees.

Previous wording

Other non-interest expense increased $251 thousand due largely to an increase in FDIC insurance expense, which reflected the new 2 basis point increase in assessment, and an increase in certain commercial and consumer related loan expenses due to portfolio growth, and employee related training and recruitment fees as we continue to search for high performing individuals to join the Meridian team.

Current wording

Total non-interest expense increased $528 thousand, or 2.6%, largely attributable to an increase in salaries and employee benefits and other non-interest expense. Salaries and employee benefits increased $409 thousand due largely to the improvement in mortgage banking operations over the period, combined with a higher level of stock based compensation expense. Other non-interest expense increased $393 thousand due to an increase in certain commercial and consumer related loan expenses due to portfolio growth, and employee related training and recruitment fees as we continue to search for high performing individuals to join the Meridian team, partially offset by a decrease in FDIC insurance expense. Data processing and software expense decreased $99 thousand as a result of a change in mortgage customer volume, and advertising and promotion expense decreased $131 thousand as well due to the timing of marketing campaigns and events.

Previous wording

Total non-interest expense decreased $212 thousand, or 0.6%, largely attributable to a decrease in salaries and employee benefits and advertising expense, partially offset an increase in professional fees, and other non-interest expense. Salaries and employee benefits decreased $1.2 million due largely to the above noted cost reduction efforts in the mortgage segment over the last few quarters, combined with lower stock based compensation expense. Professional fees increased $700 thousand over this period due to an increase in loan and lease workout expenses and OREO expense, as well as an increase in audit related costs. Other non-interest expense increased $444 thousand due largely to an increase in FDIC insurance expense, which reflected the new 2 basis point increase in assessment, and an increase in certain commercial and consumer related loan expenses due to portfolio growth.

Current wording

Total non-interest expense increased $316 thousand, or 0.6%, largely attributable to an increase in professional fees, and other non-interest expense, partially offset by a decrease in salaries and employee benefits, and advertising expense. Salaries and employee benefits decreased $794 thousand due largely to the above noted cost reduction efforts in the mortgage segment, combined with lower stock based compensation expense. Professional fees increased $703 thousand over this period due to an increase in loan and lease workout expenses and OREO expense, as well as an increase in audit related costs. Other non-interest expense increased $835 thousand due largely to an increase in certain commercial and consumer related loan expenses due to portfolio growth, and employee related training and recruitment fees.

Previous wording

Income tax expense for the three and six months ended June 30, 2024 was $1.1 million, and $1.9 million, respectively, as compared to $1.3 million, and $2.4 million, respectively, for the same periods in 2023. Our effective tax rates were 24.3% and 24.5%, respectively, for the three and six months ended June 30, 2024, compared to 21.3% and 21.4% for the same periods in 2023. While income tax expense decreased primarily due to the decrease in income before income taxes, the effective tax rate increased due to the impact of additional nondeductible expense, partially offset by an increase in tax-free bank owned life insurance income.

Current wording

Income tax expense for the three and nine months ended September 30, 2024 was $1.5 million, and $3.4 million, respectively, as compared to $1.2 million, and $3.6 million, respectively, for the same periods in 2023. Our effective tax rates were 24.0% and 24.3%, respectively, for the three and nine months ended September 30, 2024, compared to 23.1% and 22.0% for the same periods in 2023. While income tax expense decreased primarily due to the decrease in income before income taxes, the effective tax rate increased due to the impact of additional nondeductible expense, partially offset by an increase in tax-free bank owned life insurance income.

Previous wording

As of June 30, 2024, total assets were $2.4 billion which increased $105.4 million, or 4.7%, from December 31, 2023. This increase in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following table:

Current wording

As of September 30, 2024, total assets were $2.4 billion which increased $141.5 million, or 6.3%, from December 31, 2023. This increase in assets over the prior period was due primarily to loan portfolio growth, as detailed in the following table:

Previous wording

Portfolio loans increased $94.7 million, to $2.0 billion as of June 30, 2024, from $1.9 billion as of December 31, 2023. Overall portfolio loan growth was 5.0% since December 31, 2023, or 10.0% on an annualized basis for 2024. Commercial real estate loans increased $37.4 million, or 5.1%, commercial and industrial loans increased $49.6 million, or 16.4%, and construction loans increased $16.2 million, or 6.6%.

Current wording

Portfolio loans increased $115.0 million, to $2.0 billion as of September 30, 2024, from $1.9 billion as of December 31, 2023. Overall portfolio loan growth was 6.1% since December 31, 2023, or 8.1% on an annualized basis for 2024. Commercial real estate loans increased $63.1 million, or 8.5%, commercial and industrial loans increased $61.0 million, or 20.1%, and construction loans increased $4.1 million, or 1.7%.

Previous wording

As of June 30, 2024, included within the commercial real estate loans total of $775.3 million was $244.0 million of owner-occupied commercial loans, as well as $117.5 million of multi-family loans. Nearly all (98%) of the multi-family real estate loans are on properties located in Philadelphia and surrounding counties we service.

Current wording

As of September 30, 2024, included within the commercial real estate loans total of $800.9 million was $253.0 million of owner-occupied commercial loans, as well as $110.2 million of multi-family loans. Nearly all of the multi-family real estate loans are on properties located in Philadelphia and surrounding counties we service.

Previous wording

Total deposits increased $92.0 million, or 5.0%, since December 31, 2023. Noninterest-bearing deposits and interest-bearing accounts decreased $15.2 million, and $20.8 million, respectively, during the period. This decline was largely due to customer preference for money market deposits which carry higher interest rates than demand deposits. Time deposits grew $88.4 million, or 12.9%, from retail and wholesale efforts as customers prefer the higher term interest rates.

Current wording

Total deposits increased $155.5 million, or 8.5%, since December 31, 2023. Noninterest-bearing deposits and interest-bearing accounts decreased $2.1 million, and $17.5 million, respectively, during the period. This decline was largely due to customer preference for money market deposits which carry higher interest rates than demand deposits. Time deposits grew $100.0 million, or 14.6%, largely due to wholesale funding as customers prefer the higher term interest rates offered by these products.

Previous wording

The majority of Meridian's deposit base is comprised of business deposits (52%), with consumer deposits amounting to 13% at June 30, 2024. Municipal deposits (11%) and brokered deposits (24%) provide growth funding. Historically, business deposits lag loan fundings. A typical business relationship maintains operating accounts, investment accounts or sweep accounts and business owners may also have personal savings or wealth accounts. Deposit balances in business accounts have a tendency to be higher on average than consumer accounts. At June 30, 2024, 63% of business accounts and 89% of consumer accounts were fully insured by the FDIC. The municipal deposits are 100% collateralized and brokered deposits are 100% FDIC insured. The level of uninsured deposits for the entire deposit base was 20% at June 30, 2024.

Current wording

The majority of Meridian's deposit base is comprised of business deposits (51%), with consumer deposits amounting to 12% at September 30, 2024. Municipal deposits (11%) and brokered deposits (26%) provide growth funding. Historically, business deposits lag loan fundings. A typical business relationship maintains operating accounts, investment accounts or sweep accounts and business owners may also have personal savings or wealth accounts. Deposit balances in business accounts have a tendency to be higher on average than consumer accounts. At September 30, 2024, 62% of business accounts and 89% of consumer accounts were fully insured by the FDIC. The municipal deposits are 100% collateralized and brokered deposits are 100% FDIC insured. The level of uninsured deposits for the entire deposit base was 20% at September 30, 2024.

Previous wording

Consolidated stockholders’ equity of the Corporation was $162.4 million, or 6.9% of total assets as of June 30, 2024, as compared to $158.0 million, or 7.0% of total assets as of December 31, 2023. On July 25, 2024, the Board of Directors declared a quarterly cash dividend of $0.125 per common share payable August 19, 2024 to shareholders of record as of August 12, 2024.

Current wording

Consolidated stockholders’ equity of the Corporation was $167.5 million, or 7.0% of total assets as of September 30, 2024, as compared to $158.0 million, or 7.0% of total assets as of December 31, 2023. On October 22, 2024, the Board of Directors declared a quarterly cash dividend of $0.125 per common share payable November 19, 2024 to shareholders of record as of November 12, 2024.

Previous wording

Under the Community Bank Leverage Ratio framework, a community banking organization that is less than $10 billion in total consolidated assets, and has limited amounts of certain assets and off-balance sheet exposures, and a CBLR greater than 9% can elect to report a single regulatory capital ratio. The Corporation has elected to be measured under this framework for Bank capital adequacy and had ratios of 9.33% and 9.46% at June 30, 2024 and December 31, 2023, respectively. The Corporation is exempt from CBLR.

Current wording

Under the Community Bank Leverage Ratio framework, a community banking organization that is less than $10 billion in total consolidated assets, and has limited amounts of certain assets and off-balance sheet exposures, and a CBLR greater than 9% can elect to report a single regulatory capital ratio. The Corporation has elected to be measured under this framework for Bank capital adequacy and had ratios of 9.32% and 9.46% at September 30, 2024 and December 31, 2023, respectively. The Corporation is exempt from CBLR.