4 unchanged sentences
This section of this Form 10-K generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
−Removed: Recent Market Conditions
−Removed: Our financial condition and performance, as well as the ability of our borrowers to repay their loans, the value of collateral securing those loans, and demand for loans and other products and services that we offer, are all highly dependent on the business environment in the primary markets in which we operate and in the United States as a whole.
−Removed: Bank Sector Concerns
−Removed: Meridian is a regional community bank with loans and deposits that are well diversified in size, type, location and industry.
−Removed: We manage this diversification carefully, while avoiding concentrations in business lines.
−Removed: Meridian’s model continues to build on our strong and stable financial position, which serves our regional customers and communities with the banking products and services needed to help build their prosperity.
−Removed: Total balance sheet liquidity, which is derived from cash and investments, as well as salable commercial loans and residential mortgage loans held for sale, was $273.4 million at December 31, 2023.
−Removed: Meridian maintains a high-quality investment bond portfolio comprised of U.S Treasuries, government agencies, government agency mortgage-backed securities, and general obligation municipal securities with an average duration of 4.2 years.
−Removed: Meridian’s investment portfolio represented 8.2% of total assets at December 31, 2023.
−Removed: Meridian also maintains borrowing arrangements with various correspondent banks to meet short-term liquidity needs and has access to approximately $987 million in liquidity from numerous sources including its borrowing capacity with the FHLB and other financial institutions, as well as funding through the CDARS program or through brokered CD arrangements.
−Removed: In addition, the Bank is eligible to receive funds under the Bank Term Funding Program.
−Removed: Management believes that the above sources of liquidity provide Meridian with the necessary resources to meet its short-term and long-term funding requirements.
Critical Accounting Policies and Estimates
15 unchanged sentences
The evaluation process combines several factors:
−Removed: historical loan loss experience, managements ongoing review of lending policies and practices, experience and depth of staff, quality of the loan grading system, the fair value of underlying collateral, concentration of loans to specific borrowers or industries, existing economic conditions and forecasts, segment specific risks and other quantitative and qualitative factors which could affect future credit losses.
+Added: historical loan loss experience, managements ongoing review of lending policies and practices, experience and depth of staff, quality of the loan grading system, the fair value of underlying collateral, concentration of loans to specific borrowers or industries, existing
+Added: economic conditions and forecasts, segment specific risks and other quantitative and qualitative factors which could affect future credit losses.
Our reasonable and supportable forecast is for a period of four quarters.
3 unchanged sentences
Executive Overview
−Removed: The following items highlight the Corporation’s changes in its financial condition as of December 31, 2023 compared to December 31, 2022 and the results of operations for the year ended December 31, 2023 compared to the same periods in 2022.
+Added: The following items highlight the Corporation’s changes in its financial condition as of December 31, 2024 compared to December 31, 2023 and the results of operations for the year ended December 31, 2024 compared to the same period in 2023.
More detailed information related to these highlights can be found in the sections that follow.
3 unchanged sentences
Results of Operations
−Removed: • Consolidated net income decreased $8.6 million, or 39.3%, driven by a lower level of non-interest revenue from mortgage banking activity, and a decline in net interest income after provision for credit losses, due to increased interest expense on deposits and an increase in the provision for credit losses.
+Added: • Consolidated net income increased $3.1 million, or 23.4%.
• The return on average assets and return on average equity was 0.70% and 9.93%, respectively, for the year ended December 31, 2024, compared to 0.61% and 8.53%, respectively, for the year ended December 31, 2023.
−Removed: • Provision for credit losses increased $4.3 million, or 173.9%, due to an increase in specific reserves on a commercial loan relationship and small business loans, combined with provisioning for loan growth and charge-offs.
+Added: • Net interest income was up $2.1 million, or 3.0% due to higher levels of earning assets.
+Added: • Non-interest income increased $9.4 million or 29.3% due largely to an improved mortgage banking environment.
Key Performance Ratios
16 unchanged sentences
0.91 % 1.17 %
−Removed: Tier I capital to risk weighted assets 7.9 % 8.8 %
+Added: Tier I capital to risk weighted assets - Corporation 8.1 % 7.9 %
Tangible common equity to tangible assets ratio (1)
23 unchanged sentences
Cash and cash equivalents $ 35,915 $ 1,848 5.14 % $ 24,354 $ 1,266 5.20 %
−Removed: Federal funds sold 136 7 5.15 1,160 7 0.60
Investment securities - taxable 140,602 5,739 4.08 112,045 3,873 3.46
10 unchanged sentences
Time deposits 748,417 35,979 4.81 636,843 27,173 4.27
−Removed: Total deposits 1,517,180 57,819 3.81 1,295,937 15,396 1.19
+Added: Total interest - bearing deposits 1,695,148 74,037 4.37 1,517,180 57,819 3.81
Borrowings 159,483 7,878 4.94 145,545 7,266 4.99
17 unchanged sentences
Cash and cash equivalents $ (12) $ 594 $ 582
−Removed: Federal funds sold 11 (8) 3
Investment securities - taxable 774 1,092 1,866
Investment securities - tax exempt (1)
−Removed: 97 (118) (22)
Loans held for sale 5 741 746
7 unchanged sentences
Time deposits 3,695 5,111 8,806
−Removed: Total deposits 36,976 5,447 42,423
+Added: Total interest - bearing deposits 8,634 7,584 16,218
Borrowings (77) 689 612
3 unchanged sentences
(1) Yields and net interest income are reflected on a tax-equivalent basis.
−Removed: Interest income increased $47.9 million on a tax equivalent basis, year over year, due to a higher yield on earning assets, which increased 160 basis points, in addition to a higher level of average earning assets, which increased by $296.8 million.
−Removed: The average yield on loans held for investment increased 156 basis points and the yield on cash and investments increased 119 basis points in total, reflecting the impact on rates caused by the Federal Reserve’s monetary policy.
+Added: Interest income increased $19.5 million on a tax equivalent basis, year over year, due to a higher level of average earning assets, which increased by $185.4 million, combined with a higher yield on earning assets, which increased 32 basis points.
Average total loans held for investment increased $136.1 million, most notably in commercial real estate and construction, commercial loans and small business loans, which increased $158.7 million on average, combined.
Home equity loans and residential real estate loans held in portfolio increased $33.6 million on average, combined.
−Removed: Residential loans for sale decreased $21.0 million on average.
+Added: Residential loans for sale increased $11.6 million on average.
+Added: The average yield on loans held for investment increased 35 basis points and the yield on cash and investments increased 46 basis points in total, reflecting the impact on rates caused by the Federal Reserve’s monetary policy.
Interest expense increased $17.4 million, year over year, due primarily to market interest rate rises, as well as an increase of $178.0 million in average interest bearing deposits.
1 unchanged sentence
Total cost of deposits increased 58 basis points reflecting a decrease of $25.4 million in average non-interest bearing deposits.
−Removed: Interest expense on borrowings increased $6.4 million as the cost increased 199 basis points, and total average short-term borrowings increased $117.9 million.
−Removed: Net interest margin decreased 63 basis points to 3.35% for the year ended December 31, 2023 from 3.98% for the year ended December 31, 2022, as the increase in yield on earnings assets was outpaced by the increase in costs of funds, impacted also by the $29.2 million decrease in average non-interest bearing deposits.
+Added: Interest expense on borrowings increased $612 thousand as the cost decreased 5 basis points, and total average short-term borrowings increased $13.9 million.
+Added: Net interest margin decreased 19 basis points to 3.16% for the year ended December 31, 2024 from 3.35% for the year ended December 31, 2023, as the increase in the volume of interest earning assets outpaced the volume increase in interest-bearing liabilities, while the yield on earnings assets was outpaced by the increase in costs of funds, impacted also by the $25.4 million decrease in average non-interest bearing deposits.
PROVISION FOR CREDIT LOSSES
−Removed: The provision for credit losses was $6.8 million for the year ended December 31, 2023, compared to a $2.5 million provision for the year ended December 31, 2022.
−Removed: The provision for credit losses for the year ended December 31, 2023 was calculated under the current expected credit losses method, while the provision for the year ended December 31, 2022 was calculated under the incurred loss model, which impacts comparability.
−Removed: The overall provision for credit losses for 2023 is comprised of provisioning for funded loans as well as unfunded loan commitments.
−Removed: The increase in provision for funded loans was due to a $4.7 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.
−Removed: $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.
+Added: The provision for credit losses was $11.4 million for the year ended December 31, 2024, compared to a $6.8 million provision for the year ended December 31, 2023, an increase of $4.6 million.
+Added: The overall provision for credit losses is comprised of provisioning for funded loans as well as unfunded loan commitments.
+Added: The increase in provision for funded loans of $4.4 million for the year ended December 31, 2024 was primarily due to an increase in net charge-offs year over year.
+Added: While net charge-offs increased $10.3 million in 2024 over 2023, nearly half of the loans charged-off were specifically reserved for in prior periods.
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.
−Removed: The provision for unfunded loan commitments decreased $419 thousand during the year due to the impact of favorable changes in certain portfolio baseline loss rates and some macroeconomic factors underlying the unfunded loss model.
+Added: The provision for unfunded loan commitments decreased $226 thousand during the year due to favorable changes in certain portfolio baseline loss rates and some macroeconomic factors underlying the unfunded loss model.
NON-INTEREST INCOME
6 unchanged sentences
Earnings on investment in life insurance 868 789 79 10.0 %
+Added: Gain on sale of MSRs 3,992 — 3,992 100.0 %
+Added: Gain on sale of OREO 317 — 317 100.0 %
Net change in the fair value of derivative instruments 30 91 (61) (67.0) %
1 unchanged sentence
Net change in the fair value of loans held-for-investment 214 132 82 62.1 %
−Removed: Net gain on hedging activity 28 5,439 (5,411) (99.5) %
+Added: Net (loss) gain on hedging activity (87) 28 (115) (410.7) %
Net loss on sale of investment securities available-for-sale (57) (58) 1 (1.7) %
1 unchanged sentence
Total non-interest income $ 41,339 $ 31,965 $ 9,374 29.3 %
−Removed: Total non-interest income decreased $9.8 million largely as a result of lower mortgage banking revenue.
−Removed: Mortgage banking income was down $8.8 million, due primarily to lower levels of mortgage loan originations as rising interest rates and lack of housing inventory has had a negative impact on mortgage banking activity throughout the year.
−Removed: Compounding the impact of the decline in mortgage banking income were net changes in the fair value of derivative instruments and loans held-for-sale, along with a decline in net gains on hedging activity that decreased $3.7 million, combined, year over year.
−Removed: SBA loan sale income was relatively unchanged year-over-year, despite an increase of $9.1 million, or 12.0%, in the volume of loans sold in 2023 compared to 2022.
−Removed: The upward movement in interest rates during 2023 had a negative impact on gross margins on the SBA loan sales, which declined to 6.7% for all sales in 2023, compared to 7.4% in 2022.
−Removed: The net change in the fair value of loans held-for-investment increased $2.5 million to a gain of $132 thousand for the year ended December 31, 2023, compared to a loss of $2.4 million for the comparable prior year, due to the negative impact the rising interest rate environment had on the fair value of the loans in portfolio that are held at fair value.
+Added: Total non-interest income increased $9.4 million as a result of higher mortgage banking revenue, the gain of $4.0 million on the sale of $6.6 million in residential loan servicing rights and an increase in wealth management revenue of $807 thousand.
+Added: Mortgage banking income increased $4.5 million, due to an increase of $178.0 million, or 28.6% in mortgage loan originations, despite the higher interest rate environment and continued lack of housing inventory.
+Added: SBA loan sale income decreased $1.0 million due to a decrease of $25.6 million, or 30.1%, in the volume of loans sold in 2024 compared to 2023.
+Added: Despite the decline in SBA loan sales volume, the gross margin on sales in 2024 was 8.0% overall, compared to 6.7% for 2023 sales.
+Added: The increase in wealth management revenue was due to increased assets under management and better market conditions in general.
NON-INTEREST EXPENSE
5 unchanged sentences
Professional fees 4,767 4,312 455 10.6 %
−Removed: Advertising and promotion 3,730 4,336 (606) (14.0) %
Data processing and software 6,144 6,415 (271) (4.2) %
−Removed: FDIC premiums 2,929 1,247 1,682 134.9 %
+Added: Advertising and promotion 3,293 3,730 (437) (11.7) %
+Added: Pennsylvania bank shares tax 972 968 4 0.4 %
Other 10,729 9,481 1,248 13.2 %
Total non-interest expense $ 79,149 $ 77,125 $ 2,024 2.6 %
−Removed: Total non-interest expense decreased $4.3 million mainly due to a decrease in salaries and employee benefits expense at the mortgage segment, which recognized decreased fixed and variable compensation as the volume of loan originations and sales were both down year-over-year.
−Removed: Partially offsetting this decrease was an increase for the bank and wealth segments salaries & benefits as FTEs were up and a higher level of stock-based compensation expense.
−Removed: Professional fees increased $677 thousand as we incurred OREO expense during the year to maintain the one property held, non-performing loan and lease workout expenses increased, and we also incurred system conversion fees for a new loan servicing platform for our mortgage segment.
+Added: Total non-interest expense increased $2.0 million, or 2.6% to $79.1 million for the year ended December 31, 2024.
+Added: Occupancy and equipment expense increased $1.1 million overall, with $1.0 million of this increase due to fees, credits and other disposal costs for the early termination of the Blue Bell lease.
+Added: The lease termination is expected to improve occupancy expense by $359 thousand per year.
+Added: Professional fees increased $455 thousand as we incurred OREO related legal and professional fees as well as an increase in non-performing loan and lease workout expenses.
Advertising and promotion expense decreased $437 thousand as the result of a decline in mortgage related advertising expense and other promotional expense.
−Removed: Data processing and software expense increased $964 thousand as Meridian continued with the strategy to invest in technology that focuses on improving back-office efficiencies through automation and workflow processes.
−Removed: Data processing expense was up over the prior year due to an increase in customer account transaction volume.
+Added: Data processing and software expense decreased $271 thousand due to volume based discounts obtained on certain transactional fees.
+Added: Other expense increased $1.2 million due to increases in certain loan expenses and employee related expenses.
INCOME TAX EXPENSE
5 unchanged sentences
Effective tax rate 24.97 % 21.95 % 3.02 % 13.7 %
−Removed: While income tax expense decreased primarily due to the decrease in income before income taxes, the effective tax rate increased slightly due to the impact of additional nondeductible stock based compensation in 2023, partially offset by an increase in tax-free bank owned life insurance income.
+Added: While income tax expense increased primarily due to the increase in income before income taxes, the effective tax rate also increased.
The effective tax rate reflects the recognition of certain tax benefits in the financial statements including those benefits from tax-exempt interest income, federal low-income housing tax credits, and excess tax benefits from recognized stock compensation.
40 unchanged sentences
Leases, net 3,290 72,277 420 — 75,987
−Removed: Total $ 202,902 $ 537,531 $ 723,105 $ 424,910 $ 1,888,448
+Added: Total portfolio loans and leases $ 253,526 $ 549,081 $ 797,490 $ 426,195 $ 2,026,292
The amounts have been classified according to sensitivity to changes in interest rates for amounts due after one year, as of December 31, 2024.
13 unchanged sentences
Owner-occupied commercial real estate loans generally involve less risk than an investment property and are distinctly reported from non-owner occupied commercial real estate loans for measuring loan concentrations for regulatory purposes.
−Removed: Our owner-occupied commercial real estate loans are originated and managed within our commercial loan department and comprise d 33.8% of our total commercial real estate loan portfolio at December 31, 2023.
+Added: Our owner-occupied commercial real estate loans are originated and managed within our commercial loan department and amounted to $335 million at December 31, 2024.
The remaining commercial real estate loans are managed by our commercial real estate department which offer the following commercial real estate products:
8 unchanged sentences
Our commercial real estate loans increased by $86.1 million, or 11.7%, to $824.0 million at December 31, 2024 from $737.9 million at December 31, 2023.
−Removed: Our total commercial real estate loan portfolio represented 38.6% and 32.2% of our total loan portfolio at December 31, 2023 and 2022, respectively.
−Removed: Construction loans decreased $25.5 million, or 9.4%, to $246.4 million at December 31, 2023 from $272.0 million at December 31, 2022.
+Added: Our commercial real estate loan portfolio represented 40.0% and 38.6% of our total loan portfolio at December 31, 2024 and 2023, respectively.
+Added: Construction loans increased $13.1 million, or 5.3%, to $259.6 million at December 31, 2024 from $246.4 million at December 31, 2023.
Construction loans represented 12.6% and 12.9% of our total loan portfolio at December 31, 2024 and 2023, respectively.
−Removed: Commercial and Industrial Loans
+Added: Commercial and Industrial Loans (C & I)
We provide a variety of variable and fixed rate commercial business loans and lines of credit.
3 unchanged sentences
The primary source of repayment for commercial business loans is generally operating cash flows of the business and may also include collateralization of inventory, accounts receivable, equipment and/or personal guarantees.
−Removed: Our commercial and industrial loans decreased $38.5 million, or 11.3%, to $302.9 million at December 31, 2023 from
−Removed: $341.4 million at December 31, 2022.
−Removed: Commercial and industrial loans overall represented 15.8% and 19.4% of our total loan portfolio at December 31, 2023 and 2022, respectively.
+Added: Our C & I loans increased $64.5 million, or 21.3%, to $367.4 million at December 31, 2024 from $302.9 million at December 31, 2023.
+Added: C & I loans overall represented 17.8% and 15.8% of our total loan portfolio at December 31, 2024 and 2023, respectively.
+Added: Our 10 largest C & I relationships represented 13% of our C & I portfolio and 5% of the total loan portfolio at December 31, 2024.
+Added: The average loan size outstanding in C & I portfolio, excluding leases, was $413 thousand at December 31, 2024 and the weighted average risk rating of the C & I portfolio is 4.1 (pass), based on our credit rating scale of 1 through 9, where ratings 1 through 5 are considered pass.
Small Business Loans
1 unchanged sentence
Our small business loans increased by $13.4 million, or 9.4%, to $155.8 million at December 31, 2024 from $142.3 million at December 31, 2023.
−Removed: During 2023 we sold $85.0 million in SBA loans, an increase of $9.1 million, or 12.0%, from $75.9 million in SBA loans sold in 2022.
+Added: During 2024 we sold $59.4 million in SBA loans, a decrease of $25.6 million, or 30.1%, from $85.0 million in SBA loans sold in 2023.
The small business loans portfolio represented 7.6% and 7.4% of our total loan portfolio at December 31, 2024 and 2023, respectively.
3 unchanged sentences
Additional products include smaller dollar personal loans and our student loan refinance product, designed to provide additional flexibility in repayment terms desired in the marketplace.
−Removed: Home equity lines and loans increased $16.9 million, or 28.4%, to $76.3 million at December 31, 2023 from $59.4 million at December 31, 2022, while residential mortgage loans increased by $38.8 million, or 17.5%, to $260.6 million at December 31, 2023 from $221.8 million at December 31, 2022.
+Added: Home equity lines and loans increased $14.4 million, or 18.9%, to $90.7 million at December 31, 2024 from $76.3 million at December 31, 2023, while residential mortgage loans decreased by $8.0 million, or 3.1%, to $252.6 million at December 31, 2024 from $260.6 million at December 31, 2023.
Overall the total consumer loan portfolio represented 16.7% and 17.6% of our total loan portfolio at December 31, 2024 and 2023, respectively.
Meridian Equipment Finance specializes in small ticket equipment leases for small and mid-sized businesses nationally and through a broad range of industries.
−Removed: The Bank’s credit risk generally results from the potential default of borrowers which may be driven by customer specific or broader industry related conditions.
−Removed: Leases decreased $17.4 million, or 12.5%, to $121.6 million at December 31, 2023 from $139.0 million at December 31, 2022.
+Added: Leases decreased $45.6 million, or 37.5% to $76.0 million at December 31, 2024 as we continue to shift focus to commercial relationship lending.
Our securities portfolio is used to make various term investments, maintain a source of liquidity and serve as collateral for certain types of deposits and borrowings.
3 unchanged sentences
As of December 31, 2024 our available-for-sale investment portfolio had a fair value of $174.3 million, with an effective tax equivalent yield of 3.72% and an estimated duration of approximately 3.8 years.
−Removed: The largest category of this investment portfolio, or 28.9%, consists of municipal securities, along with 24.8% in U.S.
−Removed: agency securities, and 20.8% in U.S.
+Added: The largest category of this investment portfolio, or 38.1%, consists of U.S.
+Added: agency securities, along with 21.1% in municipal securities, and 8.9% in U.S.
Treasury securities.
16 unchanged sentences
Amortized cost Gross unrecognized gains Gross unrecognized losses Allowance for credit losses Fair value # of Securities in unrecognized loss position
−Removed: Securities held to maturity:
State and municipal securities
Total securities held-to-maturity $ 33,771 $ 7 $ (3,286) $ — $ 30,492 19
+Added: $ 33,771 $ 7 $ (3,286) $ — $ 30,492 19
December 31, 2023
15 unchanged sentences
The ratio of non-performing assets to total assets increased to 1.90% as of December 31, 2024, from 1.58% as of December 31, 2023.
−Removed: There was $1.7 million in other real estate property included in non-performing assets as of December 31, 2023 and 2022, related to a well secured residential property.
+Added: There was $159 thousand in other real estate property included in non-performing assets as of December 31, 2024 and 2023 related to a well secured residential property.
Total non-performing loans were $45.1 million and $33.8 million as of December 31, 2024 and December 31, 2023, respectively.
−Removed: The increase in non-performing loans over the period was due to increases in non-performing small business loans, commercial loans, residential real estate loans and construction loans of $5.0 million, $2.9 million, $2.5 million, and $1.2 million, respectively.
+Added: The increase in non-performing loans over the period was due to increases in non-performing construction loans, residential real estate loans, and small business loans of $6.0 million, $3.4 million, $2.8 million, respectively, partially offset by a decrease of $3.4 million in non-performing commercial loans due to a $3.5 million partial charge-off of a commercial loan relationship.
Meridian realized net charge-offs of $15.8 million, or 0.78%, of total average loans for the year ended December 31, 2024, compared to net charge-offs of $5.6 million, or 0.30%, of total average loans for the year ended December 31, 2023.
−Removed: A majority of charge-offs for the year ended December 31, 2023 were from equipment leases, $4.0 million, and $1.5 million were from small business loans.
+Added: A majority of charge-offs for the year ended December 31, 2024 were from equipment leases, $5.9 million, commercial loans, $4.8 million, and small business loans, $4.3 million.
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 0.91% as of December 31, 2024 compared to 1.17% as of December 31, 2023.
−Removed: As of December 31, 2023 there were specific reserves of $6.5 million against individually evaluated loans, an increase from $2.2 million as of December 31, 2022.
−Removed: 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.
−Removed: The Corporation continues to be diligent in its credit underwriting process and proactive with its loan review process, including the engagement of the services of an independent outside loan review firm, which helps identify developing credit issues.
+Added: The decline in this coverage ratio was largely impacted by net charge-offs of individually evaluated loans of $4.8 million and $4.2 million in the commercial and industrial loan, and small business loan portfolios, respectively, combined with the decline in ACL on leases as we continue to refocus away from lease originations.
+Added: As of December 31, 2024 there were specific reserves of $2.7 million against individually evaluated loans, a decrease from $6.5 million as of December 31, 2023.
+Added: The drivers of the decrease related to a $2.9 million decrease in a commercial loan relationship specific reserve due to the charge-off note above, combined with a decline of $1 million in SBA loan specific reserves.
+Added: The Corporation is proactive with its loan review process that utilizes the engagement of an independent outside loan review firm, which helps identify developing credit issues.
Proactive steps that are taken include the procurement of additional collateral (preferably outside the current loan structure) whenever possible and frequent contact with the borrower.
20 unchanged sentences
Non-performing loans to:
−Removed: Total loans and leases 1.76 % 1.20 %
−Removed: Total loans held-for-investment 1.78 % 1.22 %
−Removed: Total loans held-for-investment (excluding loans at fair value) (1)
+Added: Total loans and other finance receivables 2.22 % 1.78 %
+Added: Total loans and other finance receivables (excluding loans at fair value) (1)
2.24 % 1.79 %
Allowance for credit losses to:
−Removed: Total loans and leases 1.15 % 1.07 %
−Removed: Total loans held-for-investment 1.17 % 1.08 %
−Removed: Total loans held-for-investment (excluding loans at fair value) (1)
+Added: Total loans and other finance receivables 0.91 % 1.17 %
+Added: Total loans and other finance receivables (excluding loans at fair value) (1)
0.91 % 1.17 %
1 unchanged sentence
Total loans and leases $ 2,062,850 $ 1,920,622
−Removed: Total loans and leases held-for-investment $ 1,895,806 $ 1,743,682
−Removed: Total loans and leases held-for-investment (excluding loans at fair value) $ 1,882,080 $ 1,729,180
+Added: Total loans and other finance receivables $ 2,030,437 $ 1,895,806
+Added: Total loans and other finance receivables (excluding loans at fair value) $ 2,015,936 $ 1,882,080
Allowance for credit losses $ 18,438 $ 22,107
−Removed: $ 22,107 $ 18,828
(1) The allowance for credit losses to total loans held-for-investment (excluding loans at fair value) ratio is a non-GAAP financial measure.
See “Non-GAAP Financial Measures” for a reconciliation of this measure to its most comparable GAAP measure.
−Removed: (2) The allowance for credit losses for the year ended December 31, 2023 was calculated under the current expected credit loss model, while the allowance for the year ended December 21, 2022 was calculated under the incurred loss model.
Allowance for Credit Losses
9 unchanged sentences
Small business loans 6,304 8% 7,005 8%
−Removed: Consumer — —% 3 —%
Leases 2,476 4% 3,706 6%
Total $ 18,438 100% $ 22,107 100%
−Removed: (1) The allowance for credit losses for the year ended December 31, 2023 was calculated under the current expected credit loss model, while the allowance for the year ended December 21, 2022 was calculated under the incurred loss model.
The following table provides information on net (charge-offs) and recoveries by loan category for the years ended:
4 unchanged sentences
Small business loans (4,164) (1,483)
+Added: Consumer (1) 2
Leases (5,324) (3,779)
12 unchanged sentences
Total deposits were $2.0 billion as of December 31, 2024, up $181.9 million, or 10.0%, from December 31, 2023.
−Removed: Non-interest bearing deposits decreased $62.4 million, or 20.7%, from December 31, 2022.
−Removed: Interest-bearing demand deposits decreased $68.9 million, or 31.4%, from December 31, 2022, while money market accounts/savings accounts increased $50.2 million, or 7.2%, from December 31, 2022.
−Removed: Certificates of deposits increased $192.1 million, or 38.9%, from December 31, 2022, as lower levels of core deposits, combined with continued loan growth year over year, led to the need to obtain more wholesale funding.
−Removed: Included in time deposits as of December 31, 2023, and December 31, 2022, are $429.9 million and $375.3 million of brokered deposits, respectively, which comprise 23.8% and 21.9% of total deposits as of these dates.
+Added: Non-interest bearing deposits increased $1.6 million, or 0.7%, from December 31, 2023.
+Added: Interest-bearing demand deposits decreased $9.5 million, or 6.3%, from December 31, 2023, while money market accounts/savings accounts increased $165.7 million, or 22.2%, during the period.
+Added: Business accounts comprised 50% of all deposits, consumer accounts and municipal deposits comprised 13% and 12%, respectively, and wholesale funding was approximately 25%.
+Added: Wholesale funding supports loan growth as business accounts from lending relationships tend to lag and wholesale funding can easily be managed through term.
Time deposits of $250 thousand or more had remaining maturities as follows:
7 unchanged sentences
Consolidated stockholders’ equity of the Corporation was $171.5 million, or 7.2% of total assets as of December 31, 2024 as compared to $158.0 million, or 7.0% of total assets as of December 31, 2023.
−Removed: The increase in stockholders’ equity is the result of year-to-date net income of $13.2 million, and comprehensive income of $2.1 million, partially offset by dividends paid of $5.6 million, common stock repurchases of $4.3 million, and $1.0 million in stock-based compensation and stock options exercised.
+Added: The increase in stockholders’ equity is the result of year-to-date net income of $16.3 million, and comprehensive income of $1.3 million, partially offset by dividends paid of $5.6 million, and $456 thousand in stock-based compensation and stock options exercised.
On February 28, 2023, the Corporation approved and declared a two-for-one stock split in the form of a 100% stock dividend, payable March 20, 2023, to shareholders of record as of March 14, 2023.
36 unchanged sentences
Allowance for credit losses (GAAP) $ 18,438 $ 22,107
−Removed: Loans, net of fees and costs (GAAP) 1,895,806 1,743,682
−Removed: Loans fair valued (13,726) (14,502)
−Removed: Loans, net of fees and costs, excluding loans at fair value (non-GAAP) $ 1,882,080 $ 1,729,180
−Removed: Allowance for credit losses to loans, net of fees and costs (GAAP) 1.17 % 1.08 %
−Removed: Allowance for credit losses to loans, net of fees and costs, excluding loans at fair value (non-GAAP) 1.17 % 1.09 %
+Added: Loans and other finance receivables (GAAP) 2,030,437 1,895,806
+Added: Loans at fair value (14,501) (13,726)
+Added: Loans and other finance receivables, excluding loans at fair value (non-GAAP) $ 2,015,936 $ 1,882,080
+Added: ACL to loans and other finance receivables (GAAP) 0.91 % 1.17 %
+Added: ACL to loans and other finance receivables, excluding loans at fair value (non-GAAP) 0.91 % 1.17 %
Management maintains liquidity to meet depositors’ needs for funds, to satisfy or fund loan commitments, and for other operating purposes.
Meridian’s foundation for liquidity is a stable and loyal customer deposit base, cash and cash equivalents, and a marketable investment portfolio that provides periodic cash flow through regular maturities and amortization or that can be used as collateral to secure funding.
−Removed: In addition, as part of its liquidity management, Meridian maintains a segment of commercial loan assets that are
−Removed: comprised of SNCs, which have a national market and can be sold in a timely manner.
+Added: In addition, as part of its liquidity management, Meridian maintains a portion of commercial loan assets that are comprised of SNCs, which have a national market and can be sold in a timely manner.
Meridian’s available liquidity, which totaled $315.8 million at December 31, 2024, compared to $273.4 million at December 31, 2023, includes investments, SNCs, Federal funds sold, mortgages held-for-sale and cash and cash equivalents, less the amount of securities required to be pledged for certain liabilities.
2 unchanged sentences
Through its relationship at the FRB, Meridian had available credit of approximately $5.4 million at December 31, 2024.
−Removed: At December 31, 2023, Meridian had $33.0 million in borrowings from the Federal Reserve.
+Added: At December 31, 2024, Meridian had $0 in borrowings from the Federal Reserve.
As a member of the FHLB, we are eligible to borrow up to a specific credit limit, which is determined by the amount of our residential mortgages, commercial mortgages and other loans that have been pledged as collateral.
8 unchanged sentences
Management believes that the majority of such deposits will be reinvested with Meridian and that certificates that are not renewed will be funded by a reduction in cash and cash equivalents or by pay-downs and maturities of loans and investments.
−Removed: At December 31, 2023, Meridian had a reserve for unfunded loan commitments of $1.0 million.
+Added: At December 31, 2024, Meridian had a reserve for unfunded loan commitments of $817 thousand.
Capital Resources
13 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.