 MALVERN, Pa., July 27, 2020 GLOBE NEWSWIRE -- Meridian Corporation Nasdaq: MRBK today reported: 2020 2020 2019 Dollars in thousands, except per share data2nd QTR 1st QTR 2nd QTR Income: Net income - consolidated 5,713 2,516 2,022 Diluted earnings per common share 0.94 0.39 0.31 Highlighting our second quarter results was the extraordinary production in new purchase and refinance mortgage activity, driven by historically low interest rates. At the same time, SBA Paycheck Protection Program loans generated during the quarter substantially added to loan and deposit growth, which also contributed to strong second quarter earnings, said Christopher J. Annas, Chairman and CEO. The effect of the pandemic on our employees, customers and communities remains our primary concern, and we believe the full economic impact has yet to be realized. Since the start of the pandemic, we implemented limited branch hours and appointment scheduling for our customers, as well as remote working for employees to keep our communities safe. Our technology platform has allowed these functions to be seamless, as over 95 of our customers already utilize our online banking channels. With our strong capital base, leading technology and commitment to customer service, we will continue to help our customers navigate through this economic crisis.We are closely watching certain modified loans and other loans we consider at risk due to the COVID-19 induced economic slowdown. Additionally, we added 1.6 million in loan loss provisions during the quarter to address the general deterioration in economic conditions, which is the same amount taken in the preceding quarter, Annas continued. The allowance for loan losses to loans held for investment, excluding loans at fair value and PPP loans, increased to 1.27 of total loans at the end of the second quarter of 2020, compared to 1.10 three months earlier.Demonstrating the strength of our Company, we are excited to begin paying a quarterly cash dividend of 0.125 per share to reward our shareholders a regular return on their investment. Initiating a quarterly cash dividend demonstrates our continued confidence in Meridians long-term prospects, added Annas. COVID-19 Pandemic Response Update SBA Paycheck Protection Program. As of June 30, 2020 Meridian has assisted 928 clients in need of short-term funding by providing nearly 260 million in PPP loans. These PPP loans helped our small business clients to support the paychecks of nearly 21,500 employees, said Annas. And approximately 89 of our PPP loans and 77 of small business client employees supported are based in the markets we serve in Pennsylvania, New Jersey and Delaware. The PPP loans generated 7.1 million of net loan processing fees that are being amortized into interest income over the contractual loan life. Industry Exposure. At the inception of the pandemic, the governor of Pennsylvania ordered all non-essential businesses to close, mandated stay-at-home orders, closed schools and universities and put a moratorium on construction. The economic impact was widespread, but certain businesses have been more acutely impacted. Aside from construction lending, Meridian monitored commercial portfolios and identified various industries that were substantially impacted by these mandates such as retail trade, hospitality, residential spec construction and advertisingmarketing. At June 30, 2020, Meridians exposure as a percent of the total loan portfolio to these industries was 2.3, 2.3, 5.5, and 1.7, respectively. Assistance Provided to Loan Customers. During the pandemic, Meridian also worked with commercial, construction and residential loan customers to provide assistance. In total 117.8 million of commercial loans covering 163 borrowers and 23.9 million of construction borrowers were assisted with loan payment holidays of 3 months. In addition, 18.2 million in construction loans with interest reserves covering 33 borrowers were given lowered interest rates for an average 68 days during the moratorium. As of June 30, 2020, all 18.2 million in construction loans with rate adjustments had returned to their original interest rates. On the consumer side, 6.2 million of residential mortgage and home equity loans covering 25 total borrowers were provided with 3 to 6 month payment holidays. Loan Loss Reserve. Meridian increased its loan loss provision by 1.6 million for the second quarter of 2020, in addition to the 1.6 million already provided for during the first quarter of 2020, in anticipation of changes in risks associated with loan classification assignments and further economic uncertainty as a result of the COVID-19 pandemic. Technology. Starting in mid-March and continuing today, Meridian implemented limited branch hours and appointment scheduling for our customers, as well as remote working for employees. Our technology platform has allowed these functions to be seamless. Liquidity and Capital Management. Meridian continues to be well positioned with adequate levels of cash and liquid assets as of June 30, 2020. At June 30, 2020, Meridians tangible common equity to average tangible asset ratio was 9.54 and Meridian was well in excess of regulatory requirements.Income Statement HighlightsSecond quarter 2020 compared with first quarter 2020: Net income was 5.7 million, an increase of 3.2 million, or 127.0, driven by an increase of 10.9 million in mortgage banking revenue as well as higher interest income on loans. Pre-tax, pre-provision income for the quarter was 9.0 million, an increase of 4.2 million or 87.3. A reconciliation of this non-GAAP measure is included in the Appendix. Total revenue was 35.7 million, an increase of 11.6 million or 48. Net interest income increased 1.9 million, or 20, with interest expense down 670 thousand or 16.2. Non-interest income increased 10.3 million or 99.8, both driven by mortgage banking and SBA income. o Mortgage banking revenue increased 10.9 million, or 137.5, due to higher levels of originations and refis stemming from the historically low rate environment as well as the expansion of our mortgage division into Maryland that took place in the first quarter of 2020. o The increase in mortgage pipeline generated significant positive fair value changes in both derivative instruments as well as loans held-for-sale of 3.0 million, combined. These changes were more than offset by hedging losses of 3.3 million. o SBA loan sale income increased 89 thousand. Provision for loan losses was 1.6 million; approximately 1.3 million related to qualitative provisioning for economic uncertainty as a result of the COVID-19 pandemic. The first quarter 2020 provision for loan losses was nearly the same at 1.6 million. Non-interest expenses increased 8.1 million, or 53.0, driven by mortgage banking related expenses. The Board of Directors declared a quarterly cash dividend of 0.125 per common share, payable August 24, 2020, to shareholders of record as of August 10, 2020.Balance Sheet HighlightsJune 30, 2020 compared to December 31, 2019: Total assets increased 429.1 million, or 37.3, to 1.6 billion as of June 30, 2020. Total loans increased 298.3 million, or 30.9, to 1.3 billion as of June 30, 2020. PPP loans contributed 253.6 million net to this increase. Mortgage loans held for sale increased 84.0 million, or 249.2, to 117.7 million as of June 30, 2020. Mortgage segment originated 790.5 million in loans year-to-date June 30, 2020. Total deposits grew 315.5 million, or 37.1, to 1.2 billion as of June 30, 2020. Non-interest bearing deposits grew 74.9 million, or 53.7, to 214.4 million as of June 30, 2020. Borrowings from the Federal Reserves Paycheck Protection Program Liquidity Facility PPPLF were 136.2 million as of June 30, 2020. Meridian repurchased 316,625 shares of its common stock in the first quarter of 2020, at an average price of 18.10, fulfilling the previously announced repurchase authorization.Select Condensed Financial Information For the Quarter Ended Unaudited 2020 2020 2019 2019 2019 Dollars in thousands, except per share dataJune 30 March 31 December 31 September 30 June 30 Income: Net income - consolidated 5,713 2,516 3,137 3,317 2,022 Basic earnings per common share 0.94 0.39 0.49 0.52 0.32 Diluted earnings per common share 0.94 0.39 0.49 0.52 0. 