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MC

Meridian Corp (MRBK)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 EPS was $0.58, up 19% QoQ, with net income of $6.7M and continued margin expansion (NIM 3.77%), driven by lower deposit costs and higher earning asset yields .
  • Pre-provision net revenue rose 4% QoQ to $11.5M and 35% YoY, as bank segment PPNR reached $10.5M while mortgage and wealth remained profitable albeit lighter .
  • Asset quality mixed: NPLs/loans increased to 2.53% (from 2.35% in Q2), but net charge-offs fell to 0.09% and ACL coverage edged up to 1.01% .
  • Board declared a $0.125 quarterly dividend; management highlighted deposit repricing tailwinds with ~$431M of term deposits set to reprice at ~3.90% over the next six months .

What Went Well and What Went Wrong

What Went Well

  • NIM expansion to 3.77% (+23 bps QoQ) on lower deposit costs (-9 bps) and higher asset yields (+12 bps); absent loan fee uplift, NIM would still be 3.68% .
  • Strong commercial loan growth across C&I (+$14.1M QoQ), commercial mortgage (+$17.0M), and construction (+$29.9M) supporting net interest income growth (+$2.0M QoQ) .
  • CEO tone confident on market consolidation opportunity: “We will capitalize on the turmoil for both customers and new lenders. Our branding and outreach in this metro market is unparalleled…” .

What Went Wrong

  • Non-interest income fell 11.8% QoQ on lower SBA loan sales (-$14.2M volume QoQ) and absence of MSR sale gains; SBA income declined by $557K QoQ despite better gross margins (7.4% vs. 6.2%) .
  • Asset quality: non-performing loans rose to $55.4M, lifting NPLs/loans to 2.53% (+18 bps QoQ); 60% of SBA NPLs originated in 2020–2021 amid 500+ bps rate rise sensitivity .
  • Ongoing SBA/lease headwinds acknowledged by management: “We are challenged with elevated nonperforming loans and leases, but working these hard through consistent monitoring” .

Financial Results

Core Income Statement and Margins (Company-reported)

MetricQ1 2025Q2 2025Q3 2025
Net Interest Income ($USD Thousands)$19,776 $21,159 $23,116
Non-Interest Income ($USD Thousands)$7,324 $11,288 $9,953
Net Income ($USD Thousands)$2,399 $5,592 $6,659
Diluted EPS ($USD)$0.21 $0.49 $0.58
Net Interest Margin (%)3.46% 3.54% 3.77%
Efficiency Ratio (%)69.16% 65.82% 65.15%
ROAA (%)0.40% 0.90% 1.04%
ROAE (%)5.57% 12.68% 14.42%

Consensus vs. Actual (S&P Global)

MetricQ1 2025Q2 2025Q3 2025
EPS Consensus Mean ($)0.325*0.42*N/A*
EPS Actual ($)0.21*0.49*0.58*
EPS - # of Estimates2*1*N/A*
Revenue Consensus Mean ($)27,928,000*30,204,000*N/A*
Revenue Actual ($)21,888,000*28,644,000*30,219,000*
Revenue - # of Estimates2*1*N/A*

Values retrieved from S&P Global.*

Segment PPNR (Pre-Provision Net Revenue)

Segment ($USD Thousands)Q1 2025Q2 2025Q3 2025
Bank$8,860 $9,005 $10,504
Wealth$726 $604 $512
Mortgage$(1,229) $1,481 $507
Total PPNR$8,357 $11,090 $11,523

KPIs and Asset Quality

KPIQ1 2025Q2 2025Q3 2025
Non-Performing Loans / Total Loans (%)2.49% 2.35% 2.53%
Non-Performing Assets / Total Assets (%)2.07% 2.14% 2.32%
Net Charge-Offs / Avg Loans (%)0.14% 0.17% 0.09%
ACL / Loans (%)1.01% 0.99% 1.01%
Total Assets ($USD Millions)$2,528.9 $2,510.9 $2,541.1
Total Deposits ($USD Millions)$2,128.7 $2,110.4 $2,131.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Loan GrowthFY 20258–10% (Q2 commentary) Not reiterated numerically in Q3; management emphasized growth in C&I/CRE and construction Maintained emphasis (no formal update)
Deposit CostsNext 6 monthsN/A~$431M term deposits to reprice at ~3.90% vs. 4.16%/4.09% earlier periods New disclosure (tailwind)
DividendQuarterly$0.125 per share (ongoing) $0.125 per share declared Oct 23, 2025 (payable Nov 17, 2025) Maintained

No formal revenue/EPS/OpEx/OI&E/tax rate guidance provided in Q3 materials .

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 & Q2)Current Period (Q3)Trend
Net Interest MarginQ1: 3.46% with improving trajectory; Q2: 3.54% on lower deposit costs 3.77% (+23 bps QoQ); deposit costs -9 bps, asset yields +12 bps Improving
Loan Growth (C&I/CRE/Construction)Q1: +$42.0M QoQ driven by CRE/construction/SBA/C&I ; Q2: +$36.2M QoQ despite SBA sales +$54.8M QoQ; strength in C&I/CRE/construction Strengthening
SBA PortfolioQ1: higher provisioning tied to distressed SBA loans ; Q2: SBA sales up $27.4M, margin 6.2% SBA sales down $14.2M QoQ; gross margin 7.4%; SBA NPLs $21.3M (56% guaranteed) Mixed (better margins, lower volume; elevated NPLs)
Mortgage BusinessQ1: seasonal weakness; loss in segment ; Q2: strong rebound on volume/margins, MSR gain Slight margin improvement (+13 bps), modest volume decline; profitable quarter Stabilizing
Wealth ManagementConsistent profitability; growth hires in Q1/Q2 Profitable; income +$118K QoQ Stable
Asset QualityQ1: NPLs/loans 2.49% (+30 bps QoQ) ; Q2: 2.35% (-14 bps QoQ) 2.53% (+18 bps QoQ); NCOs down to 0.09% Mixed
Market Consolidation OpportunityQ1/Q2: hiring and outreach Management expects to capitalize on reduced competition in metro market Positive

Management Commentary

  • “We are pleased to report that Meridian's third quarter 2025 earnings rose 19% over the prior quarter to $6.7 million, benefiting from an improved margin and continued strong loan growth. The net interest margin rose to 3.77% for the quarter… We are challenged with elevated nonperforming loans and leases, but working these hard through consistent monitoring.” — Christopher J. Annas, Chairman & CEO .
  • “There have been numerous acquisitions in our market over the past year, and we will capitalize on the turmoil for both customers and new lenders. Our branding and outreach in this metro market is unparalleled…” — Christopher J. Annas .
  • “Management is intensely focused on reducing the nonperforming loans, historically high for us…” — Q2 CEO commentary .
  • “Our earnings were negatively affected by higher provisioning resulting mainly from distressed SBA loans…” — Q1 commentary .

Q&A Highlights

  • The company did not furnish an earnings call transcript in the available document set; no Q&A details were accessible via the SEC filing catalog during Q3 2025. We relied on press release and earnings supplement commentary for themes . If a transcript is later posted, we will update Q&A highlights accordingly.

Estimates Context

  • Q3 EPS: S&P Global EPS consensus unavailable; actual $0.58.* Q3 revenue actual $30.2M, consensus unavailable.* [GetEstimates]
  • Q2: EPS beat ($0.49 vs. $0.42*); revenue light ($28.6M vs. $30.2M*).*
  • Q1: EPS miss ($0.21 vs. $0.325*); revenue below ($21.9M vs. $27.9M*).*

Values retrieved from S&P Global.*

Implication: Estimate models likely adjust higher for NIM trajectory and bank segment profitability, but may incorporate higher NPL ratios and lower SBA sale volumes.

Key Takeaways for Investors

  • Margin expansion is the central driver: NIM at 3.77% with identifiable deposit repricing tailwinds (~$431M term deposits set to reprice at ~3.90%) should support near-term net interest income .
  • Core loan growth momentum across C&I/CRE/construction remains robust; expect bank segment to lead PPNR as wealth/mortgage contribute steadily .
  • Asset quality risk remains the key swing factor: NPLs/loans ticked up to 2.53% in Q3, but NCOs improved to 0.09%; SBA NPLs carry government guarantees on 56% of balances, partially mitigating severity .
  • Non-interest income headwinds from lower SBA sales and lack of MSR gains weighed on Q3; watch for variability as secondary market dynamics shift .
  • Capital and liquidity appear stable: equity rose to $188.0M on ATM issuance and earnings; dividend maintained at $0.125 per share, supporting yield .
  • Near-term trading: Positive setup on margin trajectory and loan growth; monitor headlines on NPL remediation and SBA performance for sentiment inflections .
  • Medium-term thesis: Operational leverage from lower funding costs and market share gains in a consolidating metro market; risk-adjusted returns hinge on controlling asset quality while sustaining growth .

Source Notes

  • Q3 2025 8-K and exhibits (press release and earnings supplement) .
  • Q3 2025 press release (full) .
  • Prior quarters Q2 2025 8-K and press release ; Q1 2025 8-K and press release .