Meridian Corporation reported its financial results for the first quarter of 2025, revealing a net income of $2.4 million, or $0.21 per diluted share, a decrease of 10.4% compared to $2.7 million, or $0.24 per diluted share, in the same period last year. The decline in profitability was attributed to a higher provision for credit losses, which increased by $2.3 million year-over-year, and a decrease in non-interest income, which fell by 8.3% to $7.3 million. However, net interest income rose by 19.1% to $19.8 million, driven by a reduction in deposit and borrowing costs, resulting in a net interest margin increase to 3.46% from 3.09%.
Total assets for Meridian increased by 6.0% to $2.5 billion as of March 31, 2025, up from $2.4 billion at the end of 2024. The growth in assets was primarily due to a $42 million increase in the loan portfolio, which reached $2.1 billion. Total deposits also rose by 6.2% to $2.1 billion, with non-interest-bearing deposits increasing significantly by 34.3% to $323.5 million. The bank's allowance for credit losses as a percentage of loans and other finance receivables rose to 1.01%, up from 0.91% at the end of the previous year.
Operationally, Meridian's banking segment generated the majority of its income, contributing $3.6 million before tax, while the wealth management segment saw an increase in income to $726,000. Conversely, the mortgage banking segment reported a loss before tax of $1.2 million, attributed to increased expenses related to loan originations and sales. The bank's total non-performing assets increased to $52.4 million, representing 2.07% of total assets, up from 1.90% at the end of 2024, primarily due to downgrades in the SBA loan portfolio.
Looking ahead, Meridian's management expressed cautious optimism, noting that the bank's liquidity position remains strong with access to approximately $640.5 million in liquidity from various sources. The bank continues to focus on managing its credit risk and maintaining a balanced loan portfolio. The outlook for the remainder of 2025 will depend on macroeconomic conditions and the bank's ability to navigate potential challenges in the lending environment.
About Meridian Corp
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