Company Performance - Meridian Bank reported quarterly earnings of $0.21 per share, missing the Zacks Consensus Estimate of $0.33 per share, and down from $0.24 per share a year ago, representing an earnings surprise of -36.36% [1] - The bank posted revenues of $27.1 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 4.24%, compared to year-ago revenues of $24.59 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Meridian Bank shares have increased by approximately 3.4% since the beginning of the year, contrasting with the S&P 500's decline of -6.8% [3] - The current consensus EPS estimate for the upcoming quarter is $0.44, with expected revenues of $30.32 million, and for the current fiscal year, the EPS estimate is $1.72 on revenues of $121.52 million [7] Industry Outlook - The Zacks Industry Rank for Banks - Northeast is currently in the top 26% of over 250 Zacks industries, indicating a favorable outlook for the industry [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that the industry outlook can significantly impact stock performance [5][8]

[Financial Highlights and CEO Commentary](index=1&type=section&id=Financial%20Highlights%20and%20CEO%20Commentary) The company reported Q1 2025 results, highlighting strong PPNR growth despite lower net income and providing CEO commentary on key business drivers [Q1 2025 Financial Highlights](index=1&type=section&id=Q1%202025%20Financial%20Highlights) The company reported Q1 2025 net income of $2.4 million, with strong PPNR growth offset by lower earnings compared to prior periods **Q1 2025 Key Financial Metrics** | (Dollars in thousands, except per share data) | March 31, 2025 | December 31, 2024 | March 31, 2024 | |---|---|---|---| | Net income | $2,399 | $5,600 | $2,676 | | Diluted earnings per common share | $0.21 | $0.49 | $0.24 | | Pre-provision net revenue (PPNR) (Non-GAAP) | $8,357 | $11,167 | $6,419 | - The Board of Directors declared a quarterly cash dividend of **$0.125 per common share**, payable May 19, 2025[7](index=7&type=chunk) - Key performance metrics for Q1 2025 include a **3.46% net interest margin**, **$2.5 billion in total assets**, **3% quarterly commercial loan growth**, and **6% quarterly deposit growth**[7](index=7&type=chunk) [CEO Commentary](index=1&type=section&id=CEO%20Commentary) The CEO noted strong PPNR growth and improved net interest margin, despite earnings being impacted by higher provisions for distressed SBA loans - Q1 2025 earnings were negatively affected by higher provisioning for distressed SBA loans, which have been impacted by dramatic rate rises[2](index=2&type=chunk) - The net interest margin showed consistent improvement, reaching **3.46% in Q1 2025**[2](index=2&type=chunk) - Annualized loan growth was **12% in the first quarter**, with commercial/industrial lending benefiting from strategic hiring[3](index=3&type=chunk) - Meridian Wealth Partners continued its strong performance, with pre-tax income of **$726 thousand** for the quarter[4](index=4&type=chunk) - The mortgage group experienced a larger pre-tax loss compared to Q1 2024, primarily due to lower volume and a reduced number of loan officers[5](index=5&type=chunk) [Financial Performance Analysis](index=3&type=section&id=Financial%20Performance%20Analysis) This section details the quarter-over-quarter changes in the income statement and balance sheet, analyzing key drivers of performance [Income Statement Analysis (Q1 2025 vs Q4 2024)](index=3&type=section&id=Income%20Statement%20Analysis%20(Q1%202025%20vs%20Q4%202024)) Net income decreased to $2.4 million, driven by lower non-interest income and higher credit provisions, partially offset by improved net interest income [Net Interest Income](index=3&type=section&id=Net%20Interest%20Income) Net interest income rose to $19.8 million, with the net interest margin expanding to 3.46% due to a lower cost of deposits - Net interest income increased by **$477 thousand** quarter-over-quarter[10](index=10&type=chunk) - The net interest margin increased by **17 basis points to 3.46%** as the cost of funds declined[14](index=14&type=chunk) - The overall cost of deposits dropped by **21 basis points**, and total interest expense decreased by $1.3 million[13](index=13&type=chunk) [Provision for Credit Losses](index=4&type=section&id=Provision%20for%20Credit%20Losses) The provision for credit losses increased by $1.6 million to $5.2 million, driven by a rise in non-performing SBA loans - The provision for credit losses increased by **$1.6 million to $5.2 million** in Q1 2025[15](index=15&type=chunk) - The increase was driven by a **$7.1 million rise in non-performing loans**, leading to a $2.3 million increase in specific reserves[15](index=15&type=chunk) [Non-interest Income](index=4&type=section&id=Non-interest%20Income) Non-interest income fell by 44.8% to $7.3 million, primarily due to a non-recurring gain on MSR sales in the prior quarter **Non-interest Income Breakdown** | (Dollars in thousands) | Q1 2025 | Q4 2024 | $ Change | % Change | |---|---|---|---|---| | Mortgage banking income | $3,393 | $5,516 | $(2,123) | (38.5)% | | Net (loss) gain on sale of MSRs | $(52) | $3,992 | $(4,044) | (101.3)% | | SBA loan income | $748 | $1,143 | $(395) | (34.6)% | | **Total non-interest income** | **$7,324** | **$13,279** | **$(5,955)** | **(44.8)%** | - SBA loan sales totaled **$12.1 million**, a decrease of $7.8 million (39.1%) from the previous quarter, leading to lower SBA loan income[17](index=17&type=chunk) [Non-interest Expense](index=4&type=section&id=Non-interest%20Expense) Non-interest expense decreased by 12.5% to $18.7 million, driven by lower salary and occupancy costs **Non-interest Expense Breakdown** | (Dollars in thousands) | Q1 2025 | Q4 2024 | $ Change | % Change | |---|---|---|---|---| | Salaries and employee benefits | $11,385 | $12,429 | $(1,044) | (8.4)% | | Occupancy and equipment | $1,338 | $2,270 | $(932) | (41.1)% | | Professional fees | $763 | $1,134 | $(371) | (32.7)% | | **Total non-interest expense** | **$18,743** | **$21,411** | **$(2,668)** | **(12.5)%** | [Balance Sheet Analysis (March 31, 2025 vs Dec 31, 2024)](index=6&type=section&id=Balance%20Sheet%20Analysis%20(March%2031%2C%202025%20vs%20Dec%2031%2C%202024)) Total assets grew 6.0% to $2.5 billion, driven by loan growth and a significant temporary customer deposit - Total assets increased by **$142.7 million (6.0%) to $2.5 billion**, partly due to a temporary $103 million deposit from a customer[20](index=20&type=chunk) - Portfolio loan growth was **$42.0 million (2.1%)**, driven by increases in commercial mortgage ($21.2M), construction ($18.3M), and small business loans ($5.3M)[21](index=21&type=chunk) - Total deposits grew by **$123.4 million (6.2%)**, led by an $82.6 million increase in non-interest bearing deposits[22](index=22&type=chunk) - Total stockholders' equity increased by **$1.7 million to $173.3 million**, after accounting for net income of $2.4 million and dividends paid of $1.4 million[23](index=23&type=chunk) [Asset Quality](index=6&type=section&id=Asset%20Quality) Asset quality deteriorated as non-performing loans rose to 2.49% of total loans, though net charge-offs decreased - Non-performing loans increased by **$7.1 million to $52.2 million** at March 31, 2025, compared to the prior quarter[24](index=24&type=chunk) - The ratio of non-performing loans to total loans rose to **2.49% from 2.19%** quarter-over-quarter, led by a $6.9 million increase in non-performing SBA loans[25](index=25&type=chunk) - Net charge-offs as a percentage of total average loans decreased to **0.14%** for Q1 2025, down from 0.34% in Q4 2024[26](index=26&type=chunk) - The allowance for credit losses to total loans increased to **1.01% from 0.91%** at the end of the prior quarter[27](index=27&type=chunk) [Financial Statements and Ratios](index=3&type=section&id=Financial%20Statements%20and%20Ratios) This section presents key financial statements and performance ratios for the company over recent periods [Key Financial Data and Ratios](index=3&type=section&id=Key%20Financial%20Data%20and%20Ratios) Key ratios for Q1 2025 show decreased profitability and deteriorating asset quality, but an improved net interest margin **Selected Financial Ratios** | (Annualized Ratios) | Q1 2025 | Q4 2024 | Q1 2024 | |---|---|---|---| | Return on average assets | 0.40% | 0.92% | 0.47% | | Return on average equity | 5.57% | 13.01% | 6.73% | | Net interest margin (tax-equivalent) | 3.46% | 3.29% | 3.09% | | Non-performing loans to total loans | 2.49% | 2.19% | 1.93% | [Condensed Consolidated Statements of Income](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Income) The company reported net income of $2.4 million on total revenues of $27.1 million for the first quarter of 2025 **Income Statement Summary** | (Dollars in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | |---|---|---|---| | Net interest income | $19,776 | $19,299 | $16,609 | | Provision for credit losses | $5,212 | $3,572 | $2,866 | | Total non-interest income | $7,324 | $13,279 | $7,984 | | Total non-interest expense | $18,743 | $21,411 | $18,174 | | **Net income** | **$2,399** | **$5,600** | **$2,676** | [Condensed Consolidated Statements of Condition (Balance Sheet)](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Condition%20(Balance%20Sheet)) The balance sheet shows total assets of $2.53 billion and total stockholders' equity of $173.3 million as of March 31, 2025 **Balance Sheet Summary** | (Dollars in thousands) | March 31, 2025 | December 31, 2024 | |---|---|---| | **Total assets** | **$2,528,586** | **$2,385,867** | | Loans and other finance receivables, net | $2,050,848 | $2,011,999 | | Total deposits | $2,128,742 | $2,005,368 | | Total liabilities | $2,355,320 | $2,214,345 | | **Total stockholders' equity** | **$173,266** | **$171,522** | [Segment Information](index=13&type=section&id=Segment%20Information) The Bank and Wealth segments remained profitable in Q1 2025, while the Mortgage segment reported a wider pre-tax loss **Segment Pre-Tax Income** | Income (loss) before income taxes (in thousands) | Q1 2025 | Q1 2024 | |---|---|---| | Bank | $3,648 | $3,540 | | Wealth | $726 | $478 | | Mortgage | $(1,229) | $(465) | | **Total** | **$3,145** | **$3,553** | [Appendix: Non-GAAP Measures](index=14&type=section&id=Appendix%3A%20Non-GAAP%20Measures) This appendix provides reconciliations of non-GAAP financial measures to their most directly comparable GAAP measures [Non-GAAP Reconciliations](index=14&type=section&id=Non-GAAP%20Reconciliations) Reconciliations show Q1 2025 PPNR of $8.4 million and a tangible book value per share of $15.03 **Reconciliation of Pre-Provision Net Revenue (Non-GAAP)** | (Dollars in thousands) | Q1 2025 | Q4 2024 | Q1 2024 | |---|---|---|---| | Income before income tax expense (GAAP) | $3,145 | $7,595 | $3,553 | | Provision for credit losses | $5,212 | $3,572 | $2,866 | | **Pre-provision net revenue (Non-GAAP)** | **$8,357** | **$11,167** | **$6,419** | **Reconciliation of Tangible Book Value per Common Share (Non-GAAP)** | (Per share data) | March 31, 2025 | December 31, 2024 | |---|---|---| | Book value per common share (GAAP) | $15.35 | $15.26 | | **Tangible book value per common share (Non-GAAP)** | **$15.03** | **$14.93** | - The Tangible Common Equity to Tangible Assets ratio for the Corporation was **6.72%** as of March 31, 2025, down from 7.05% at the end of the prior quarter[43](index=43&type=chunk)

Core Insights - Meridian Corporation reported a net income of $2.4 million for Q1 2025, a decrease from $2.7 million in Q1 2024, while pre-provision net revenue (PPNR) increased by 30.2% to $8.4 million [1][2][5] - The company faced challenges due to higher provisioning related to distressed SBA loans, impacted by rising interest rates, but showed improvement in net interest margin, which reached 3.46% [2][5][6] Financial Performance - Net income for Q1 2025 was $2.4 million, or $0.21 per diluted share, down from $5.6 million, or $0.49 per diluted share in Q4 2024 [1][5][31] - PPNR increased by $1.9 million, or 30.2%, compared to Q1 2024 [5][31] - Total assets grew to $2.5 billion, a 6.0% increase from $2.4 billion at the end of Q4 2024 [18][21] Loan and Deposit Growth - Loan growth was annualized at 12%, with commercial loans increasing by $49.5 million, or 3% for the quarter [3][19] - Total deposits increased by $123.4 million, or 6.2%, with non-interest-bearing deposits rising by $82.6 million, or 34% [20][21] Non-Interest Income and Expenses - Total non-interest income decreased by $6.0 million, or 44.8%, primarily due to a lack of gains on the sale of mortgage servicing rights (MSRs) [15][16] - Non-interest expenses decreased by $2.7 million, or 12.5%, driven by reductions in salaries and employee benefits, occupancy costs, and professional fees [17][32] Asset Quality - Non-performing loans increased by $7.1 million to $52.2 million, with a ratio of non-performing loans to total loans rising to 2.49% [22][23] - The provision for credit losses increased to $5.2 million, reflecting the rise in non-performing loans [14][31] Wealth Management Performance - Meridian Wealth Partners reported pre-tax income of $726 thousand for the quarter, supported by a slight increase in assets under management [4]

Group 1 - Meridian Bank, founded in 2004, is a newcomer in the regional banking sector [1] - The bank has experienced growth over the last twenty years, establishing itself as a primary lender in the Delaware Valley [1]

Core Viewpoint - The analyst has revised their outlook on Meridian Corporation (NASDAQ: MRBK) due to the emergence of tariff issues and inflation uncertainty, moving from a previously dovish stance to a more cautious one [1]. Group 1 - The analyst previously expected a sharp fall in market interest rates but has changed this expectation based on new economic factors [1].

Corporate Structure and Operations - The Corporation operates through its wholly-owned subsidiary, Meridian Bank, providing a range of banking services across Pennsylvania, New Jersey, Delaware, Central Maryland, and Florida[22]. - The Bank operates four wholly-owned subsidiaries, including Meridian Wealth, which is a registered investment advisory firm[51]. - Meridian Wealth, a subsidiary, enhances the Corporation's capacity to provide comprehensive wealth management services to professionals and higher net worth individuals[27]. Financial Performance - Consolidated net income rose by $3.1 million, or 23.4%, for the year ended December 31, 2024[199]. - Basic earnings per share increased to $1.47 in 2024 from $1.19 in 2023[199]. - Diluted earnings per share rose to $1.45 in 2024 from $1.16 in 2023[199]. - Return on average assets improved to 0.70% in 2024 from 0.61% in 2023[199]. - Return on average equity increased to 9.93% in 2024 from 8.53% in 2023[199]. - Net interest income grew by $2.1 million, or 3.0%, due to higher levels of earning assets[199]. - Non-interest income surged by $9.4 million, or 29.3%, attributed to an improved mortgage banking environment[199]. Capital and Regulatory Compliance - Meridian Corporation is subject to extensive regulatory oversight from the FDIC, FRB, and PDBS, ensuring compliance with safety and soundness standards[46]. - Under Basel III Capital Rules, the minimum capital ratios required are 4.5% CET1 to risk-weighted assets and 6% Tier 1 capital to risk-weighted assets[64]. - The Capital Rules require an additional capital conservation buffer of 2.5% of CET1, resulting in effective minimum ratios of 7% CET1 to risk-weighted assets[66]. - The Bank adopted the community bank leverage ratio framework as its primary regulatory capital ratio, applicable to institutions with total consolidated assets of less than $10 billion[68]. - The FDIA mandates prompt corrective action for banks that do not meet minimum capital requirements, categorizing them into five capital tiers[70]. - The liquidity coverage ratio (LCR) requires the Bank to maintain high-quality liquid assets equal to expected net cash outflows for a 30-day period[70]. Loan and Deposit Growth - Total loans held for investment increased by $136.1 million, with significant growth in commercial real estate, construction, and small business loans, which collectively rose by $158.7 million[205]. - The loan portfolio grew by $137.8 million, or 7.3%, to $2.0 billion as of December 31, 2024, from $1.9 billion as of December 31, 2023[217]. - As of December 31, 2024, the company had $2.0 billion in deposits, which are subject to fluctuations due to various external factors[118]. Risk Management - The company must maintain adequate policies to combat money laundering and terrorist financing, as mandated by the USA PATRIOT Act, to avoid legal and reputational risks[98]. - The company faces liquidity risks that could impair its ability to meet financial commitments, particularly if customer deposits decrease due to alternative investment perceptions[115]. - The company’s operations are sensitive to economic conditions, particularly in its local markets, which could adversely affect loan repayment and overall profitability[108]. - Cybersecurity risks are actively managed through a comprehensive strategy involving regular assessments and training, although threats have been experienced[182]. Market and Economic Conditions - The median household income in the Philadelphia metropolitan area is $88,336, significantly higher than the national average of $62,843[31]. - The unemployment rate in the Philadelphia metropolitan area is 4.20%, while the median household income in the Baltimore metropolitan area is $105,582[32][31]. - The competitive landscape is intensifying, with larger institutions having greater resources, which may pressure the company's net interest margin[133]. Community Engagement - In 2024, the Corporation donated $546,000 to over 100 organizations across its service areas, demonstrating its commitment to community support[36]. Interest Rate and Economic Sensitivity - Changes in interest rates significantly impact mortgage-related revenues, with a decline in rates generally increasing demand for mortgage loans[144]. - The corporation's interest rate spread, net interest margin, and net interest income improved as interest-bearing liabilities repriced faster than interest-earning assets[139]. - Interest expense rose by $17.4 million year-over-year, primarily due to market interest rate increases and an increase of $178.0 million in average interest-bearing deposits[206]. Wealth Management - Wealth management revenues are primarily derived from investment advisory fees based on assets under management, which may decline due to market conditions or client withdrawals[164]. - Strong competition in the wealth management sector may hinder the company's ability to attract and retain clients, affecting overall financial results[166]. Compliance and Legal Risks - The company is required to comply with various federal and state consumer protection laws, which can result in significant liabilities if violated[84]. - The CFPB has broad authority to enforce consumer financial protection laws, particularly for institutions with assets of $10 billion or more[85]. - The company is subject to heightened independence requirements for its compensation committee as per the Dodd-Frank Act, which could affect governance practices[102].

Core Viewpoint - Meridian Bank (MRBK) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive trend in earnings estimates which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Impact - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [3][5]. - Institutional investors utilize earnings estimates to determine the fair value of stocks, leading to buying or selling actions that affect stock prices [3]. Meridian Bank's Earnings Outlook - The upgrade reflects an improvement in Meridian Bank's underlying business, with rising earnings estimates expected to drive the stock price higher [4]. - For the fiscal year ending December 2025, Meridian Bank is projected to earn $2.07 per share, representing a 42.8% increase from the previous year [7]. - Over the past three months, the Zacks Consensus Estimate for Meridian Bank has risen by 13.4% [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks which have averaged a +25% annual return since 1988 [6]. - The upgrade to Zacks Rank 2 places Meridian Bank in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [9].

Core Viewpoint - Meridian Bank (MRBK) is identified as a strong value stock with a Zacks Rank of 2 (Buy) and an A for Value, indicating it is currently undervalued in the market [4][8]. Valuation Metrics - MRBK has a P/E ratio of 9.40, which is lower than the industry average of 11.13, suggesting it is undervalued compared to its peers [4]. - The stock's P/B ratio stands at 1.11, compared to the industry's average P/B of 1.34, further indicating its attractive valuation [5]. - MRBK's P/S ratio is 0.95, significantly lower than the industry average of 1.88, highlighting its potential as a value investment [6]. - The P/CF ratio for MRBK is 8.44, which is much lower than the industry's average P/CF of 25.19, reinforcing the notion that the stock is undervalued [7]. Earnings Outlook - The combination of MRBK's favorable valuation metrics and strong earnings outlook positions it as an impressive value stock in the current market [8].

Group 1: Earnings Performance - Meridian Bank reported quarterly earnings of $0.49 per share, exceeding the Zacks Consensus Estimate of $0.34 per share, and showing a significant increase from $0.05 per share a year ago, representing an earnings surprise of 44.12% [1] - The company posted revenues of $28.59 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 6.91%, compared to $25.06 million in the same quarter last year [2] - Over the last four quarters, Meridian Bank has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Group 2: Stock Performance and Outlook - Meridian Bank shares have increased approximately 14.3% since the beginning of the year, outperforming the S&P 500's gain of 4% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.37 on revenues of $26.58 million, and for the current fiscal year, it is $1.75 on revenues of $115.19 million [7] Group 3: Industry Context - The Zacks Industry Rank indicates that the Banks - Northeast sector is currently in the top 18% of over 250 Zacks industries, suggesting a favorable environment for stocks in this category [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors or through tools like the Zacks Rank [5]

Financial Performance - Net income for Q4 2024 was $5.6 million, or $0.49 per diluted share, representing an 18.1% increase from Q3 2024[2] - For the full year 2024, net income increased 23.4% to $16.3 million, or $1.45 per diluted share[2] - Pre-tax, pre-provision income for Q4 2024 was $11.2 million, and $33.2 million for the full year[4] - Basic earnings per common share rose to $0.50 for the quarter, compared to $0.43 in the prior quarter[32] - Income before income tax expense for the three months ended December 31, 2024, was $7,596,000, compared to $6,245,000 for the previous quarter, representing an increase of 21.7%[40] Loan and Deposit Growth - Loan growth for 2024 was 12%, with commercial loans increasing by $177.1 million year over year[3] - Total deposits grew by $181.9 million, or 10%, year over year, with a quarterly increase of $26.4 million, or 1%[4] - Total deposits reached $2,005,368 million, up from $1,978,927 million in the previous quarter, marking an increase of 1.8%[34] - Portfolio loan growth was $22.8 million, or 1.1% quarter-over-quarter, with commercial mortgage loans increasing by $23.0 million, or 2.9%[19] Non-Interest Income and Expenses - Total non-interest income rose by $2.4 million, or 22.6%, quarter-over-quarter, totaling $13.3 million, driven by a $4.0 million gain on the sale of mortgage servicing rights[16] - Non-interest income for the quarter was $13,280 million, significantly higher than $10,831 million in the previous quarter, representing a growth of 22.5%[36] - Total non-interest expense was $21,411 million, up from $20,546 million in the prior quarter[32] Credit Quality and Provisions - The overall provision for credit losses for Q4 increased by $1.3 million to $3.6 million, up from $2.3 million in Q3[15] - Net charge-offs increased to $7.1 million for Q4, representing 0.34% of total average loans, up from 0.11% in Q3[23] - The ratio of allowance for credit losses to total loans held for investment decreased to 0.91% from 1.10% in the prior quarter[24] - Provision for credit losses increased to $3,572 million in Q4 2024 from $2,282 million in Q3 2024, indicating a rise of 56.5%[36] Equity and Capital Ratios - Total stockholders' equity increased by $4.1 million to $171.5 million, supported by net income of $5.6 million and dividends paid of $1.4 million[21] - Total stockholders' equity (GAAP) increased to $171,522,000 as of December 31, 2024, compared to $167,450,000 as of September 30, 2024, reflecting a growth of 1.3%[43] - Book value per common share increased to $15.26 from $14.91 in the previous quarter[30] - Tangible common equity to tangible assets ratio (non-GAAP) improved to 7.05% as of December 31, 2024, from 6.87% as of September 30, 2024[43] Operational Efficiency - The efficiency ratio improved to 65.72% from 70.67% in the previous quarter[30] - The efficiency ratio improved to 66% in Q4 2024 from 70% in Q3 2024, indicating better cost management[36] Regulatory and Operational Concerns - Regulatory costs are a concern for the company, with hopes for reduced burdens under the new administration[6] - Occupancy and equipment expenses rose by $1.0 million, primarily due to costs associated with the early termination of a lease[17]