Meridian Bank is finally making money again after three years of heavy losses.
With its asset quality improving, the privately held, $1.1 billion-asset bank in Phoenix said Monday that it earned $7.9 million in the first half of this year, compared to a loss of $14 million for the same period last year. The bank, a unit of Marquette Financial Cos. in Minneapolis, has turned a profit in two consecutive quarters for the first time since the second and third quarters of 2007.
Like many banks in its market, Meridian was battered by defaults on real estate and construction loans, losing more than $260 million in 2008, 2009 and 2010, according to Federal Deposit Insurance Corp. data.
In a news release, the bank attributed its recent turnaround to a sharp decline in nonperforming loans. Between April 1, 2010 and March 31, 2011, the bank's ratio of noncurrent loans to total loans fell from 13.16% to 4.56%, according to the FDIC.
Capital ratios have also improved as the bank has unloaded problem assets. At June 30, its total risk-based capital ratio was 19.7%, compared to 14.74% a year earlier.