MALVERN, PA — Meridian Corporation (Nasdaq: MRBK) has announced its robust financial report for the first quarter of 2024. The banking company also declared a quarterly dividend of $0.125 per common share.
Christopher J. Annas, the CEO and Chairman of Meridian Corporation, celebrated the corporation’s progress by noting the improvement in earnings to $2.7 million or $0.24 per share. Despite challenges caused by increasing interest rates, he pointed out that the net interest margin, which shrunk to 3.09%, showed signs of stabilization.
Within the Philadelphia metro region, Meridian continues to thrive and expand. The company’s main commercial businesses recorded a 10% growth compared to the same period in the previous year. An overview of the housing market revealed a scarcity in inventory, prompting robust activity in home construction financing.
Meridian Corporation is a credit-driven bank with a broad product line designed to serve all but the largest customers. This consumer segment is credit-dependent and is steadily adjusting to change. While the strain is visible in the form of elevated provisioning, particularly for small businesses, the company remains optimistic, largely due to the positive developments in the SBA and equipment leasing divisions.
Despite suffering a seasonal loss, the mortgage segment managed to outperform the same quarter from the previous year in terms of volumes. Annas expressed confidence that the corporation will continue increasing its market share within the region, despite facing hurdles from growing interest rates.
The first quarter of 2024 reflected a net income increase of $2.1 million to $2.7 million. This is primarily due to a decline in the quarterly provision for credit losses and a decrease in non-interest expenses. However, a reduction in non-interest income and an increased interest expense on deposits and borrowings tempered this growth.
Meridian experienced a surge in interest income driven by increased average earning assets and improved yield on these assets. However, overall net interest margin diminished by 9 basis points to 3.09%, a result of the cost of funds exceeding the growth in earning asset yield.
As far as everyone’s concern with credit losses goes, the combined provision for the first quarter dropped to $2.9 million, down from $4.6 million. This allowance was primarily due to an increase in specific reserves for small business and existing non-accrual loans and provisioning for loan growth and charge-offs.
Total non-interest income witnessed a slight drop of $133 thousand because of a dip in the fair value of loans held for investment. Yet, contributing to the brighter side, the mortgage banking income saw a rise and other income surged due to an increase in FHLB stock income and other mortgage segment-related income.
With a solid increase in total deposits by $77.2 million, mainly due to a surge in certificates of deposits, the corporation’s consolidated stockholders’ equity also rose by $1.9 million. However, asset quality showed some warmth, with an increase in the ratio of non-performing loans to total loans as well as a slight uptick in net charge-offs.
Despite the ups and downs that the quarter presented, Meridian Corporation is taking it all in stride, with optimism and a keen focus on opportunities for continued growth.
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